DALLAS - Vivakor, Inc. (NASDAQ:VIVK), known for its energy transportation and remediation services, announced the establishment of a new business division, Vivakor Supply & Trading (VST). The company revealed that VST will engage in petroleum marketing operations to enhance the performance of its facilities in Delhi, Louisiana, and Colorado City, Texas.
VST is expected to play a significant role in managing market risks and diversifying revenue streams for Vivakor. The new unit will also integrate with the activities of the Endeavor Entities following the completion of an acquisition previously announced by the company.
James Ballengee, Chairman, President & CEO of Vivakor, stated, "This is an opportunity to create a more diversified and profitable Company."
Vivakor's operations currently include crude oil gathering, storage, transportation, reuse, and remediation services, which are provided under long-term contracts. The company is also in the process of constructing oilfield waste remediation facilities, which will enable the recovery and disposal of petroleum by products and other waste products.
The announcement comes as part of Vivakor's broader mission to develop and operate assets and technologies in the energy sector. However, the company cautions that forward-looking statements involved in this news release are subject to various risks and uncertainties.
Vivakor Inc. has secured a $5 million equity line of credit from ClearThink Capital Partners, LLC, and sold 1.6 million common shares to investor James K. Granger. Additionally, the company has procured loans totaling $850,000 and issued convertible promissory notes to an individual lender and a related party, Ballengee Holdings, LLC. Vivakor has also engaged 395 Group, LLC for advisory and business development services.
The company recently announced the appointment of Urish Popeck & Co, LLC as its new independent registered public accounting firm, replacing Marcum LLP. Furthermore, Vivakor is nearing the acquisition of several oil and gas logistics firms, including Endeavor Crude, LLC.
Lastly, the company has signed a new employment agreement with its CFO, Tyler Nelson, extending his tenure and adjusting his compensation package.
InvestingPro Insights
As Vivakor, Inc. (NASDAQ:VIVK) ventures into the establishment of its new business division, Vivakor Supply & Trading, investors and market observers are keen to understand the financial health and performance metrics of the company. According to InvestingPro data, Vivakor has a market capitalization of $60.1 million, which reflects its size and market value within the energy sector. Despite its innovative approach in energy transportation and remediation services, the company's financials show some challenges. The latest data reveals a negative P/E ratio of -3.53, indicating that the company is not currently profitable. The gross profit margin for the last twelve months as of Q1 2024 stands at 7.65%, suggesting that the company is experiencing weak gross profit margins, as also highlighted in one of the InvestingPro Tips.
Investors should also note that Vivakor's stock performance has seen significant fluctuations. Over the last three months, the company has seen a strong return of 60.32%, and over the last six months, there has been a large price uptick of 125.0%. However, the one-month price total return as of the same date indicates a decline of -22.66%, which aligns with another InvestingPro Tip pointing out the stock's poor performance over the last month.
For those considering investing in Vivakor, it's important to consider these InvestingPro Tips: the company operates with a significant debt burden, and its short-term obligations exceed its liquid assets. Moreover, Vivakor does not pay a dividend to shareholders, which could be a deciding factor for income-focused investors. For a deeper analysis and more tips, investors can explore the full range of insights on InvestingPro, which currently lists an additional six tips for VIVK at https://www.investing.com/pro/VIVK.
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