8-K: Vivakor Appoints New CFO Amid Former CFO's Resignation Over Internal Control Disputes

Vivakor, Inc. announced the appointment of Kimberly Hawley as its new Executive Vice President, Chief Financial Officer, and Treasurer, following the immediate resignation of Tyler Nelson, who cited disagreements over financial processes and internal control weaknesses.

Summary

• Vivakor Administration, LLC appointed Kimberly Hawley as Executive Vice President, Chief Financial Officer, and Treasurer of the Company and Vivakor, Inc. on July 24, 2025.
• Ms. Hawley will receive an annual base compensation of $350,000 and is eligible for performance-based cash and equity incentive bonuses tied to Vivakor's EBITDA targets.
• Her employment agreement includes severance provisions, such as a lump sum payment equal to one calendar year's pay if terminated without cause.
• Tyler Nelson resigned as Vivakor's Chief Financial Officer and Board Member on July 19, 2025, effective immediately.
• Mr. Nelson's resignation was partly due to disagreements with Vivakor regarding its financial review, authorization, and reporting processes and policies, certain strategic decisions, and the alleged failure to timely address material weaknesses in internal controls.
• Mr. Nelson also alleged that Vivakor Administration, LLC materially breached his Executive Employment Agreement, diminished his responsibilities, and breached obligations related to a Promissory Note dated June 8, 2024.
• Vivakor is reviewing Mr. Nelson's allegations and intends to provide a timely response.

Sentiment

Score: 3

Explanation: The immediate resignation of the CFO citing serious disagreements over financial processes and alleged material weaknesses in internal controls is a significant negative. While a new CFO has been appointed, the underlying issues raised by the former CFO create substantial uncertainty and risk.

Positives

• Appointment of Kimberly Hawley as the new Executive Vice President, Chief Financial Officer, and Treasurer, bringing extensive experience in public company financial management, accounting, auditing, and SEC reporting.
• Ms. Hawley's prior experience includes overseeing financial operations for seven subsidiaries and securing over $120 million in long-term debt financing at Empire Diversified Energy, Inc.
• The Board believes Ms. Hawley's expertise in financial statements for complex entities and financing transactions makes her ideally qualified to lead the Company towards continued growth and success.

Negatives

• Resignation of former CFO and Board Member, Tyler Nelson, effective immediately.
• Mr. Nelson's resignation was explicitly due to disagreements over Vivakor's financial review, authorization, and reporting processes and policies.
• Alleged failure by Vivakor to timely implement appropriate measures to address material weaknesses in its internal controls, as previously discussed in public filings.
• Allegations by Mr. Nelson that Vivakor Administration, LLC materially breached his Executive Employment Agreement, diminished his responsibilities, and breached obligations related to a Promissory Note dated June 8, 2024.

Risks

• Disagreements with former CFO regarding financial review, authorization, and reporting processes and policies.
• Alleged failure to timely implement appropriate measures to address material weaknesses in internal controls, as discussed in public filings.
• Potential legal dispute arising from former CFO's allegations of material breach of his employment agreement and a promissory note.

Future Outlook

The Board expresses confidence that Ms. Hawley's qualifications will help lead the Company and Vivakor towards continued growth and success. The company intends to provide a timely response to the former CFO's allegations.

Management Comments

• The Board believes that Ms. Hawley’s compiling and preparing accurate financial statements for complex entities, as well as her extensive knowledge with financing transactions makes her ideally qualified to help lead the Company and Vivakor towards continued growth and success as the Company and Vivakors Chief Financial Officer.

Industry Context

This event reflects a significant change in a company's financial leadership, which is a critical aspect of corporate stability and investor confidence. The departure of a CFO citing internal control weaknesses is a serious concern that can impact a company's reputation and regulatory standing, contrasting with the general industry trend towards stronger financial governance and transparency.

Comparison to Industry Standards

• The departure of a CFO citing "disagreements regarding financial review, authorization and reporting processes and policies" and "failure to timely implement appropriate measures to address material weaknesses in internal controls" is a red flag compared to industry best practices for financial transparency and internal controls, which emphasize robust and reliable financial reporting.
• Ms. Hawley's background, including securing over $120 million in long-term debt financing at Empire Diversified Energy, Inc., suggests a capability in capital structure and funding initiatives that aligns with the needs of growing companies in the industry.
• The allegations of material weaknesses in internal controls are a significant deviation from the Sarbanes-Oxley Act (SOX) requirements and general corporate governance standards expected of publicly traded companies, which mandate effective internal controls over financial reporting.

Management Changes

Corporate Governance

Legal Proceedings

• Tyler Nelson, former CFO, alleged that Vivakor Administration, LLC materially breached his Executive Employment Agreement.
• Tyler Nelson also alleged that Vivakor Administration, LLC diminished his responsibilities.
• Tyler Nelson alleged that Vivakor was in breach of obligations owed pursuant to a Promissory Note dated June 8, 2024, made to his order.
• Vivakor and Vivakor Administration, LLC are reviewing these allegations and intend to provide a timely response.

Related Party Transactions

• No related party transactions involving Ms. Hawley were disclosed.
• Former CFO Tyler Nelson alleged a breach of a Promissory Note dated June 8, 2024, made to his order by Vivakor.

Stakeholder Impact

• Shareholders: Potential negative impact due to concerns over financial reporting integrity, internal control weaknesses, and management stability following the CFO's resignation and his stated reasons.
• Employees: New financial leadership may bring changes to internal processes and potentially impact morale due to the circumstances of the former CFO's departure.
• Creditors: The allegation regarding a breached promissory note could raise concerns about the company's financial obligations and creditworthiness.
• Regulatory Authorities: The mention of "material weaknesses in internal controls" and disagreements over financial reporting processes could attract increased scrutiny from the SEC.

Next Steps

• Vivakor and Vivakor Administration, LLC will review the allegations made by former CFO Tyler Nelson regarding material breach of his employment agreement, diminished responsibilities, and breach of a promissory note.
• Vivakor and Vivakor Administration, LLC intend to provide a timely response to Mr. Nelson's allegations.
• If Vivakor receives a letter from Mr. Nelson stating disagreement with the Form 8-K disclosures, it will file that letter as an amendment to the Form 8-K within two business days of receipt.

Key Dates

Recommendation

While the appointment of a new, experienced CFO is a positive step, the immediate resignation of the previous CFO citing material weaknesses in internal controls and disagreements over financial processes is a significant concern. This raises questions about the company's financial integrity and governance. Investors should hold and monitor closely for further developments regarding the internal control issues and the resolution of the former CFO's allegations before making further investment decisions.

Keywords

Vivakor, VIVK, CFO, Chief Financial Officer, Executive Vice President, Treasurer, Kimberly Hawley, Tyler Nelson, resignation, appointment, SEC filing, 8-K, financial reporting, internal controls, corporate governance, executive compensation, NASDAQ