DEF 14A: Vivakor Seeks Shareholder Approval Amid Nasdaq Delisting Threat

Vivakor, Inc. calls a Special Meeting to approve significant share issuances, a reverse stock split to maintain Nasdaq listing, and an increase in authorized capital.

Summary

• Vivakor, Inc. will hold a Special Meeting of Stockholders on December 22, 2025, to vote on four key proposals.
• Shareholders are asked to approve the issuance of 21,509,090 common shares and 8,566,666 shares underlying pre-funded warrants to institutional investors, which collectively exceed 19.99% of outstanding common stock and require Nasdaq approval.
• The Board seeks discretion to implement a reverse stock split, ranging from one-for-thirty (1:30) up to one-for-two hundred (1:200), by March 15, 2026, to meet Nasdaq's minimum $1.00 bid price requirement, as the closing price was $0.138 on November 25, 2025.
• Approval is sought to increase authorized common stock from 200,000,000 to 500,000,000 shares to cover existing convertible obligations and provide flexibility for future financings and acquisitions.
• The company also proposes the adoption of the Vivakor, Inc. 2025 Equity and Incentive Plan, reserving 100,000,000 common shares for equity awards to employees, directors, and consultants, with an annual increase of 3,000,000 shares from 2026 to 2035.
• Recent financial activities include multiple debt agreements, forbearance agreements, and capital raises totaling approximately $7.55 million in gross proceeds from two registered direct offerings in October 2025.
• The company settled lawsuits with former executives James Samuelson and Tyler Nelson for a total of $100,000 cash and $1,550,000 in stock for Samuelson, and $2,000,000 in cash for Nelson.
• CEO James Ballengee extinguished $569,589.04 owed to him under a convertible promissory note, and Series A Preferred Stockholders, including Ballengee, forgave 6% annual dividends through December 31, 2026, in exchange for voting rights.

Sentiment

Score: 2

Explanation: The company is in a highly distressed financial state, evidenced by the imminent Nasdaq delisting threat, continuous reliance on highly dilutive capital raises at very low prices, and multiple debt restructuring/forbearance agreements. The extensive related-party transactions, while some reduce immediate debt, also raise governance concerns. While management is taking steps to address immediate crises, the underlying financial health appears weak, and the proposed actions (reverse split, massive authorized share increase) signal significant challenges and further potential dilution for shareholders.

Positives

• The company is actively addressing its Nasdaq listing deficiency by proposing a reverse stock split.
• Settlements with former executives James Samuelson and Tyler Nelson resolve outstanding legal claims and potential liabilities.
• The Physical Commodity Intermediation Agreement provides up to $40 million in combined credit support, enhancing commodity trading activities.
• CEO James Ballengee extinguished a $569,589.04 debt owed to him, reducing company liabilities.
• Series A Preferred Stockholders, including the CEO, voluntarily suspended dividend rights through December 31, 2026, in exchange for voting rights, potentially conserving cash.

Negatives

• The company's common stock closing bid price was $0.138 on November 25, 2025, significantly below Nasdaq's $1.00 minimum requirement, indicating severe market underperformance.
• Multiple recent capital raises (two registered direct offerings in October 2025) involved issuing common stock and pre-funded warrants at low prices ($0.2164 and $0.18 per share), leading to substantial dilution.
• The proposed share issuances (30,075,756 shares) exceed 19.99% of outstanding common stock, requiring shareholder approval due to Nasdaq rules, and will further dilute existing shareholders.
• The need for a reverse stock split (up to 1:200) highlights a critical struggle to maintain exchange listing and may not proportionally increase the stock price or improve liquidity.
• The company has insufficient authorized common stock to honor conversions of numerous existing convertible instruments, necessitating an increase to 500,000,000 shares, which will enable further dilution.
• Significant debt obligations required multiple forbearance agreements with J.J. Astor & Co., including a 19% default interest rate and accelerated payment deadlines (November 30, 2025).
• Settlements with former executives involved substantial cash and stock payments, indicating past financial disputes and potential strain on resources.
• Extensive related-party transactions, including the acquisition of Endeavor Entities for $116.3 million and the sale of Water Trucking Sale entities for $11,058,235 in preferred stock to entities controlled by CEO James Ballengee, raise corporate governance concerns.

Risks

• Failure to approve the investor stock issuances could lead to a violation of Nasdaq Listing Rule 5635(d).
• The proposed reverse stock split may not result in a sustained increase in the stock price above the Nasdaq minimum, potentially leading to delisting.
• A reverse stock split could adversely affect the liquidity of the common stock due to a reduced number of outstanding shares.
• The market price for the common stock may not react proportionally to the reverse stock split, meaning a 1:100 split from $0.05 may not result in a sustained $5.00 price.
• The issuance of additional common stock from the increased authorized shares or the 2025 Equity and Incentive Plan will dilute current stockholders' percentage ownership and voting rights.
• Future issuances of common stock at prices below what current stockholders paid could dilute the value of their shares.
• The increased number of issued shares could discourage or make more difficult certain mergers, tender offers, proxy contests, or other change of control transactions.
• The company has significant outstanding debt, with some notes accruing interest at a default rate of 19% and having accelerated maturity dates.

Future Outlook

The company aims to maintain its Nasdaq Capital Market listing by potentially implementing a reverse stock split by March 15, 2026. It also seeks to increase authorized common stock to provide flexibility for future financing transactions, potential acquisitions, and equity-based compensation. The 2025 Equity and Incentive Plan is intended to align employee, director, and consultant interests with stockholders for long-term growth. The company is developing Remediation Processing Centers (RPCs) with the first facility under construction, expected to process oilfield solid wastes into valuable byproducts.

Management Comments

• "Your vote is very important. We encourage you to read the Proxy Statement and vote your shares as soon as possible."
• "On behalf of the Board of Directors, thank you for your continued confidence and investment in Vivakor."
• "Our business strategy is centered on building an integrated midstream and environmental services platform that supports operational efficiency, enhances market access for customers, and positions the Company for long-term growth."
• "Our management and Board of Directors is currently reviewing all aspects of the Endeavor Entities assets and operations, including the synergies they have with our pre-acquisition operations and the debt related to certain of those assets and operations. In the event our management and Board of Directors determines some of those assets or operations do not fit organizationally with our other assets and operations then we may seek strategic alternatives with those certain assets and/or operations."
• "The Board of Directors believes that a reverse stock split will increase the price per share of the common stock and assist in meeting the Bid Price Requirement for maintaining Nasdaq listing."
• "The Board proposed a wide stock split ratio to give it flexibility in determining the most conservative stock split ratio possible that will still meet the Bid Price Requirement necessary to prevent delisting from the Nasdaq Capital Market."
• "The Board does not intend as part of the Reverse Stock Split to reduce the amount of the Companys authorized shares of common stock."
• "The Board is not aware of any attempt to take control of the Company and has not presented this proposal with the intention that the Reverse Stock Split be used as a type of antitakeover device."
• "The Board of Directors does not believe the currently available number of unissued shares of Common Stock is an adequate number of shares to assure that there will be sufficient shares available for issuance in connection with possible future acquisitions, equity and equity-based financings, possible future awards under employee benefit plans, stock dividends, stock splits, and other corporate purposes."
• "The Board of Directors is considering, and will continue to consider, various financing options, including the issuance of Common Stock or securities convertible into Common Stock from time to time to raise additional capital necessary to support future growth of the Company."
• "The increase in authorized shares of Common Stock was not approved as a means of preventing or dissuading a change in control or takeover of the Company. However, use of these shares for such a purpose is possible."

Industry Context

Vivakor operates in the oil and gas industry, focusing on midstream services (transportation, terminaling, storage, supply, and trading) and developing environmental solutions like Remediation Processing Centers. The company's strategic shift in segment reporting to include 'supply and trading' reflects growth in this area. The ongoing need for capital raises and the struggle to maintain Nasdaq listing suggest challenges common to smaller, growth-oriented companies in capital-intensive sectors, especially those navigating volatile commodity markets and developing new technologies.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• The company settled a lawsuit titled 'James Samuelson v. Vivakor, Inc., James Ballengee, et al., Case No. 30-2025-01496877-CU-OE-CJC' for alleged unpaid work, agreeing to pay $100,000 cash and $1,550,000 worth of common stock.
• The company settled a lawsuit titled 'Tyler Nelson v. Vivakor, Inc., et al., Case No. 30-2025-01503021-CU-OE-CJC' for alleged wage losses and non-wage damages, agreeing to pay $2,000,000 in cash.

Related Party Transactions

• On October 1, 2024, the company acquired Endeavor Crude, LLC and related entities for $116.3 million from sellers beneficially owned by James Ballengee, the Chairman, President, Chief Executive Officer, and principal shareholder.
• On July 30, 2025, the company sold Meridian Equipment Leasing, LLC and Equipment Transport, LLC (Water Trucking Sale) for $11,058,235 in Series A Convertible Preferred Stock to Jorgan Development, LLC, an entity controlled by James Ballengee.
• In connection with the Water Trucking Sale, the Secured Promissory Note dated August 15, 2022, between Vivakor and Jorgan Development, LLC (Lender, controlled by James Ballengee), was amended to reduce payments to the Lender from 99% to 50% of Monthly Free Cash Flow.
• James Ballengee and certain Ballengee Family Office Affiliates voluntarily suspended their right to receive dividends and distributions upon Series A Convertible Preferred Stock held by them for the period from August 1, 2025, to January 1, 2026.
• The Colorado City, Texas facility's operations are underpinned by an Oil Storage Agreement (WCCC Take-or-Pay) with Jorgan, controlled by James Ballengee, generating approximately $1,800,000 in tank storage revenue for the years ended December 31, 2024, and 2023.
• The Delhi, Louisiana facility's operations include a Crude Petroleum Supply Agreement (SFD Take-or-Pay) with Jorgan, controlled by James Ballengee, and crude oil purchases from White Claw (related party) totaling $41,777,857 in 2024 and $36,740,922 in 2023.
• SFD sells natural gas liquids to WC Crude (related party) for $10,790,417 in 2024 and $11,268,005 in 2023.
• On May 23, 2024, the company issued a promissory note to Ballengee Holdings, LLC, beneficially owned by James Ballengee, with a principal balance of $1,164,150 and $43,880 accrued interest as of December 31, 2024.
• On July 5, 2024, the company received a $500,000 loan from Ballengee Holdings, LLC, with a principal balance of $500,000 and $24,456 accrued interest as of December 31, 2024.
• On November 25, 2025, James Ballengee agreed to extinguish the $569,589.04 he was owed under a convertible promissory note as part of the Series A Preferred Agreement.
• James Ballengee, as CEO and Director, has the right to acquire additional common stock through convertible instruments and as part of his annual salary.
• Executive officers and directors are expected to receive equity-based compensation under the proposed 2025 Equity and Incentive Plan if approved.

Stakeholder Impact

• **Shareholders**: Face significant dilution from past and proposed share issuances, and potential further dilution from the increase in authorized stock and the new equity incentive plan. The reverse stock split aims to maintain Nasdaq listing but carries risks of not proportionally increasing the stock price and affecting liquidity. Series A Preferred stockholders gain voting rights, potentially shifting control dynamics.
• **Employees, Directors, and Consultants**: Will benefit from the proposed 2025 Equity and Incentive Plan, which reserves 100,000,000 shares for equity-based incentive awards, aligning their interests with the company's performance.
• **Creditors (e.g., J.J. Astor & Co., Jorgan Development, LLC)**: Have engaged in multiple debt conversions, new loan agreements, and forbearance agreements, indicating ongoing financial negotiations and potential risks/rewards associated with the company's debt structure. J.J. Astor & Co. has converted substantial debt into equity, and Jorgan Development, LLC (a related party) has amended loan terms and had debt extinguished by its controller.
• **Former Employees (James Samuelson, Tyler Nelson, Patrick Knapp)**: Have received substantial cash and stock settlements for alleged unpaid work and damages, resolving legal disputes but representing significant outflows for the company.

Next Steps

• Hold a Special Meeting of Stockholders on December 22, 2025, to vote on the proposed resolutions.
• If approved, the Board of Directors may implement a reverse stock split in a range from 1:30 to 1:200 on or before March 15, 2026, to regain Nasdaq compliance.
• If approved, the company will amend its articles of incorporation to increase authorized common stock to 500,000,000 shares.
• If approved, the Vivakor, Inc. 2025 Equity and Incentive Plan will be adopted, allowing for equity-based awards.
• The company is obligated to pay James Samuelson $100,000 cash on or before January 30, 2026.
• The company is obligated to pay Tyler Nelson $100,000 within 30 days and another $100,000 within 60 days from November 5, 2025, and $1,550,000 within 90 days from November 5, 2025.
• The company is obligated to pay Patrick Knapp $50,000 on or before December 31, 2025, and issue $100,000 worth of common stock within three trading days from November 10, 2025.

Key Dates

Recommendation

The company's financial position is highly precarious, as evidenced by the need for a reverse stock split (up to 1:200) to avoid Nasdaq delisting, continuous and substantial dilutive capital raises at extremely low prices, and multiple debt forbearance agreements with a 19% default interest rate. The proposed increase in authorized common stock to 500 million shares, explicitly to cover existing convertible obligations and future financing, signals an ongoing strategy of heavy dilution. While management is actively addressing immediate crises, the sheer volume of dilutive events, the low stock price, and extensive related-party transactions (some of which appear to benefit the CEO) indicate severe underlying financial distress and significant risk to existing shareholders. The company's ability to achieve sustained profitability and maintain shareholder value appears highly challenged, making it a strong sell for investors.

Keywords

Vivakor, SEC filing, DEF 14A, proxy statement, Nasdaq listing, reverse stock split, share issuance, dilution, authorized capital, equity incentive plan, debt restructuring, related party transactions, oil and gas, environmental solutions, midstream, capital raise