Vivakor signs non-binding LOI to acquire Direct Midstream for $40 million gross purchase price

Non-binding LOI: Vivakor proposes to acquire 100% of Direct Midstream, a Midland, TX-based water midstream company serving Permian Basin operators with saltwater disposal, produced water management, and oilfield waste services.

Valuation: $40 million gross purchase price equates to 4x Direct Midstream's targeted 2027 free cash flow of $10 million, with purchase price adjustable between $30 million and $50 million based on actual 2027 free cash flow.

Consideration mix: $10 million Vivakor capital investment in Direct Midstream at closing (reduces consideration dollar-for-dollar), plus ~$29 million of Vivakor Series B Preferred Stock and $1 million of Vivakor common stock, subject to debt and net working capital adjustments.

Closing conditions: Subject to customary due diligence, completion of audited financials, Vivakor funding of the $10 million investment, a fairness opinion acceptable to independent directors, and execution of a definitive purchase agreement; no assurance of completion.

Note conversion: J.J. Astor & Co. converted $350,000 of a junior secured convertible promissory note into 128,965 shares of common stock, issued without a Rule 144 restrictive legend pursuant to Section 4(a)(2).