DALLAS - Vivakor, Inc. (NASDAQ:VIVK), a company specializing in energy transportation, storage, reuse, and remediation services, has announced a revision in the timeline for its planned merger with Empire Diversified Energy, Inc. The merger is now expected to close in the first quarter of 2025, a delay attributed to the recent acquisition of the Endeavor Entities by Vivakor, concluded on October 1, 2024.
In the merger, Vivakor is set to acquire all outstanding shares of Empire's common and preferred stock, issuing 67,200,000 shares of Vivakor common stock as consideration. Consequently, Empire will become a wholly-owned subsidiary of Vivakor. Additionally, 5,040,000 of these shares will be held in escrow for 12 months post-closing for indemnification purposes. Empire has also agreed to a lock-up of 65% of the shares for the same period, with further insider sales restrictions to follow.
The completion of the merger is contingent upon several conditions, including approval from the shareholders of both companies, Vivakor's receipt of a satisfactory fairness opinion, and the effective registration of the Consideration Shares as per a Form S-4 Registration Statement.
James Ballengee, Chairman, President, & CEO of Vivakor, expressed that the merger with Empire would enable the expansion of sustainable-energy technologies across their logistics platform, leveraging the recent acquisition of the Endeavor Entities.
Empire Diversified Energy, Inc. (OTC PINK:MPIR) operates within the sustainable energy and logistics sectors. Its primary operations are based at the Port of West Virginia, within its Eco-Industrial Complex, which is a trimodal facility enabling truck, maritime, and rail transport. Empire is currently advancing a waste-to-energy pyrolysis plant and is part of a consortium set to receive a portion of $925 million in funding from the U.S. Department of Energy for the development of hydrogen projects in the Appalachian region.
This news is based on a press release statement and provides an update on the corporate activities and strategic developments of Vivakor, Inc. and Empire Diversified Energy, Inc.
In other recent news, Vivakor Inc. announced the appointment of Jeremy Gamboa as its Division President, Logistics. This follows the company's recent acquisitions in the midstream petroleum sector, including Endeavor Crude, LLC, Meridian Equipment Leasing, LLC, Equipment Transport, LLC, and Silver Fuels Processing, LLC. In financial developments, Vivakor finalized the sale of equity shares to E-Starts Money Co., resulting in a $500,000 capital injection and also secured a $5 million equity line of credit from ClearThink Capital Partners, LLC.
The company sold 1.6 million common shares to investor James K. Granger and is progressing with its merger plans with Empire Diversified Energy. Vivakor also announced the establishment of a new business division, Vivakor Supply & Trading (VST), to manage market risks and diversify revenue streams. This aligns with the company's nearing acquisition of several oil and gas logistics firms.
The company also secured $850,000 through loans and convertible promissory notes issued to an individual lender and a related party, Ballengee Holdings, LLC. Finally, Vivakor has signed a new employment agreement with its CFO, Tyler Nelson, extending his tenure and adjusting his compensation package. These are some of the recent developments at Vivakor.
InvestingPro Insights
As Vivakor (NASDAQ:VIVK) navigates its merger with Empire Diversified Energy, investors should consider some key financial metrics and insights from InvestingPro. The company's market capitalization stands at $44.2 million, reflecting its current position in the energy services sector.
Despite the ambitious merger plans, InvestingPro Tips highlight some financial challenges for Vivakor. The company operates with a significant debt burden and may have trouble making interest payments on its debt. This could potentially impact the execution of its merger strategy and future growth plans.
Additionally, Vivakor's revenue for the last twelve months as of Q2 2024 was $62.39 million, with a revenue growth of 8.99% over the same period. However, the company is not currently profitable, as indicated by its negative P/E ratio of -4.02. This aligns with another InvestingPro Tip that points out Vivakor's lack of profitability over the last twelve months.
It's worth noting that Vivakor's stock has shown significant volatility, with a large price uptick over the last six months (26.79% total return) but a substantial fall in the last three months (-33.03% total return). This price action could be reflective of market reactions to the company's merger announcements and operational developments.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights beyond those mentioned here. In fact, there are 5 more InvestingPro Tips available for Vivakor, which could provide valuable context for understanding the company's financial position and future prospects as it moves forward with its strategic initiatives.
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