Vivakor, Inc. (VIVK) Announces Third Amendment to Loan Agreement, Fourth Forbearance, and New Funding Package

Key Points and Investor Highlights

• Vivakor, Inc. (Nasdaq: VIVK) has entered into a series of significant financing agreements, including:
  • Third Amendment to an existing Loan Agreement
  • Fourth Forbearance Agreement
  • Issuance of a Fourth Junior Secured Convertible Promissory Note
• The company has secured additional funding of up to \$1,000,000, with an initial draw of \$750,000 and a potential further \$250,000.
  • The Fourth Note has an Original Issue Amount of \$993,750, reflecting a 1.325x multiplier on the funded sum.
  • The final maturity date for the new note is April 6, 2026.
• New and Amended Terms That May Impact Shareholders:
  • The company must call a special shareholder meeting within 90 days of the additional funding to approve the amended agreements and all related transactions.
  • All conversion shares, make-whole shares, and default make-whole shares issued to the lender must be registered and delivered in unrestricted form, making them immediately salable by the lender.
  • Until the notes are fully repaid, Vivakor is restricted from entering into any new equity financing or incurring new debt (other than “Permitted Indebtedness”) unless proceeds are first used to pay all outstanding amounts owed to the lender, including principal, accrued interest, and make-whole payments.
• Pricing and Dilution Mechanics:
  • If the company pays the lender in shares, the “Market Conversion Price” is set at a 50% discount to the lower of (a) closing market price on Nasdaq at time of issuance or (b) lowest VWAP in the 20 trading days prior to issuance. This could result in substantial dilution to existing shareholders, especially if the share price declines.
  • If the conversion price falls below the threshold due to Nasdaq rules, the company must pay the lender a “Make Whole Payment” in cash or, if unable, in additional fully registered shares, further amplifying potential dilution.
  • In the event of a default and acceleration, the conversion price is adjusted to an 80% discount to the lower of the closing price on the original funding dates or 20% of the closing price on the date of acceleration, potentially leading to an even greater number of shares issued to the lender.
• Registration Rights:
  • Vivakor is required to file registration statements by specific deadlines to ensure all lender-held shares can be resold immediately. Failure to do so could trigger further penalties or acceleration of the note.
• Forbearance and Nasdaq Compliance:
  • The effective Nasdaq relisting/reinstatement date has been extended from February 28, 2026, to April 6, 2026. If Vivakor fails to have its common stock relisted and trading on the Nasdaq Capital Market by this date, it will constitute an event of default.
• Subsidiary Guarantees and Security Agreements:
  • All material subsidiaries have issued guarantees and pledged security interests in favor of the lender to support the notes and the company’s obligations.
• Other Covenants and Events of Default:
  • Vivakor and its subsidiaries are subject to extensive negative covenants, including restrictions on issuing new securities, amending organizational documents, entering into affiliate transactions, paying dividends (except to Series A Preferred holders), and more.
  • Events of default include, but are not limited to, breach of covenants, failure to make SEC filings on time, the company’s stock not being traded on Nasdaq, cross-defaults on other indebtedness, and judgments exceeding \$150,000 remaining unpaid for 45 days.
  • If an event of default occurs, the notes become immediately due and payable at a penalty “Default Amount” (110% principal, 19% default interest, etc.) and can be converted into shares at a punitive rate, potentially causing extreme dilution.

Analysis and Potential Share Price Impact

This financing package is highly material and potentially price sensitive for Vivakor shareholders for several reasons:

• Immediate Liquidity: The new funding provides critical cash but at high cost, with a steep original issue discount.
• Significant Dilution Risk: The conversion and make-whole mechanics are highly dilutive, especially if the share price falls. The lender can force conversion at deep discounts, and the company may be required to issue a very large number of shares.
• Nasdaq Listing as a Trigger: Failure to relist on Nasdaq by April 6, 2026, triggers a default, which could lead to accelerated repayment and further dilution.
• Restrictive Covenants: The company is sharply limited in its ability to raise new capital or enter strategic transactions without first paying the lender in full.
• Potential for Downside Volatility: Any event of default can rapidly increase the company’s debt burden and result in conversion at distressed share prices, which could pressure the stock further.
• Shareholder Vote Required: A special meeting of shareholders will be called to approve these transactions, which itself could be a catalyst for volatility and debate among investors.

Conclusion

Vivakor’s new loan amendment and associated agreements are a double-edged sword: they provide critical short-term funding and forestall default, but at the cost of highly dilutive terms, restrictive covenants, and a significant risk of further dilution or loss of control if the company cannot execute operationally or maintain its Nasdaq listing. Investors should monitor developments closely, including the upcoming shareholder vote, Nasdaq relisting progress, and the company’s compliance with the new agreements.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. All investors should conduct their own due diligence before making investment decisions. Vivakor’s financial condition is subject to risks, including those associated with complex financing arrangements, and future events may differ materially from those discussed above.

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