Building the roads of tomorrow, using the waste of today. That’s one of the propositions that drew investors to Vivakor (NASDAQ:VIVK)’s February 2022 listing on the tech-heavy NASDAQ exchange, attracting $8 million in new investment.
The South Salt Lake, Utah-based company has built a business - and a solid reputation - as a pioneer of the circular carbon economy using innovative environmental technologies, such as hydrocarbon remediation, processing and upgrading.
Its smart road technology, which involves embedding small sensors in the recycled asphalt that it has reclaimed from waste that would otherwise have gone into landfills is just one of several green projects and solutions Vivakor is progressing.
“Vivakor is a socially-responsible acquirer and developer of clean energy technologies and environmental solutions primarily focused on soil remediation,” CEO Matt Nicosia told Proactive in an interview. “What that really means is that we have found effective technological ways to extract natural resources from waste, such as oil which has been spilt into soil and how we deploy that technology worldwide as our objective.”
NASDAQ listing a natural step
Due to the growing acceptance of its technology and an increasing asset base, Nicosia explained that a NASDAQ listing was the next natural step to make investors on the tech-heavy exchange aware of its clean technology.
“We were very well received, and we've had a lot of exciting relationships with those investors, specifically the funds that have been involved,” Nicosia said. “They like our objective and what we can offer, from our backlog of contracts to the future.”
Vivakor’s main focus is on bitumen (heavy oil) extraction from shallow, oil-laden areas in eastern Utah, along with petroleum-based remediation projects across the globe. The technologies utilized are low-cost, proprietary, and disruptive for the industry.
Its business model relies on it being an acquisition hub, focused on building and acquiring cash-flowing assets in discrete areas where it has a technological advantage. It mainly acquires, develops and commercializes clean technology solutions.
“Each of these remediation processing centres is patented,” Nicosia noted. “Vivakor owns the patents. These are systems that we can set up throughout the world to clean oil out of soil. We have projects in Utah, we have projects in the Middle East and we're expanding anywhere you can think of. Where there's oil spilt into soil, there's an appetite for this type of technology to separate both oil from the soil and to make them both usable.”
Turning oil sands into asphalt
It costs about $6.25 million to build each system and Vivakor generates around $5 million on average in top-line revenue per machine.
“They have a 20-year useful life and some of the contract scenarios we're finding ourselves are in long-term potential take-off agreements,” Nicosia added.
In Utah, Vivakor takes the oil sands and turns it into an asphalt product that can be sold throughout the inter-mountain west. In Kuwait, it has a service contract, under which it’s paid for each ton of oil sands it cleans.
“We see that income for a three- to four-year period of time,” the Vivakor CEO said. “So, the case study is, we build as many machines as possible. As each one is deployed, we add another $5 million in top-line revenue and potentially $2.2 million in EBITDA per machine.”
Following the NASDAQ listing and capital raise, Nicosia said Vivakor plans to expand its Utah facility, adding three more systems to take the project from producing 250 barrels of asphalt a day to a thousand barrels. It already has contracts and letters of intent to take off all the material from the plant for an extended period.
The company is also preparing a site in Houston, Texas where it is targeting tank-bottom sludge and drill cuttings, which normally get thrown away into landfills.
“We can take that material in, still charge the same service fee of $15 to $20 per ton, and clean it so there's no effect on landfill,” Nicosia said. “We then take the oil product, separate it into an asphalt or recycled fuel, and now you've got a zero effect on environmental landfill which we pass on to the producers that sold the product to us.”
The company also plans to invest approximately $1 million into existing technologies that are aimed at improving the commercial end product of the hydrocarbon.
Smart roads of the future
And then there’s the smart road technology.
“Because we're already extracting asphalt from these products, we can classify them as a potential waste asphalt,” Nicosia added. “Once we've cleaned it, extracted it, you have new roads being made from waste asphalt. With our Smart Sensor technology, which we've licenced with TBT Group, we see a lot of excitement around embedding these small sensors in the asphalt from waste to make the smart roads of the future from the waste of today.”
The CEO said Vivakor already has a demand for five systems that it needs to deploy this year, which will require $30 million in equipment financing. That’s to just keep up with the contracts and orders it currently has.
While it advances current projects, he said Vivakor is also eyeing other interesting technologies that it can adopt in its remediation processing centres.
“We may see some expansion into technology as well as some potential acquisitions now that we’re a Nasdaq company that we will look into to fit in line with our vision of how to do we clean up the environment while being responsible with the natural resources,” he concluded.
Contact the author at stephen.gunnion@proactiveinvestors.com