One of the alert stocks that I really liked from a few months back was Vivakor, Inc. (VIVK). It was a biotechnology firm that had revenues, patents in place, a full product pipeline and great prospects.  The stock went out on alert and generated a 20% gain…..but, nothing like what I was expecting.

Once I do my DD on companies, I tend to watch them.  And, I watched VIVK plummet shortly after our alert.  I wasn’t sure why…..there was no negative news, volume remained “adequate”, nothing adverse came to mind.  Now that the stock is at .15/.16, I think that NOW is the time to take another look at VIVK.

When stocks go down without adverse news like VIVK, it means that there are significantly more sellers than buyers (no kidding).  In my conversations with people in and around VIVK, it appears that there was a group of investors that decided to get out while the stock was at high levels and unloaded all of their shares on the market.  These investors (I can only assume) had low, low cost “founder’s shares” and selling them at 63 cents (the most recent high) and down would be a HUGE windfall for them.

Here is an annotated chart, so you can see what I mean.

Vivakor, the company, is an interesting study. It is not a pharma biotech, but rather have a focus on equipment and consumables for the biotech industry.  That is not to say that they don’t have an important R & D component to their business, but in this niche they are, in my opinion, much easier to understand.  I have never claimed to be a pharma/biotech expert and many times I have a hard time understanding the products from a pure pharma/biotech play.

Some of this info is pulled from my original alert, such as:

VIVK has an astonishing breadth and depth of products, technologies and intellectual property.  It conducts research in four primary areas of medical and biotechnological development:

• Molecular medicine
• electro-optics
• biological handling
• and natural and formulary compounds (i.e. nutraceuticals)

The company has (at last count) over 12 products in various stages of FDA approval (with the related patents filed and patent-pending). Here is a link to their site that will allow you to review it for yourself.  It is well put together and very informative.

Here is a list of products under development:

• VivaThermic Vials for cryopreservation - Phase III
• VivaBlend for antioxidant supplements - Phase III
• CryoKeeper/Carrier, a device for the storage and transport of specimens at cryogenic temperatures - Phase II
• VivaSight, a digital photorefractor for children’s vision screening - Phase II
• VivAuris, a device for middle ear redness detection - Phase II
• VivaGlobin, a device for anemia and cutaneous hemoglobin detection - Phase II
• RejuviJam, which is a jam and jelly with antioxidants and bone and cartilage supplements - Phase II
• SLICES, a magnetic resonance imaging enhancement software - Phase II
• Vivaplate, a microplate for rapid temperature response - Phase I
• VivaCycler, a heating and cooling device - Phase I
• Cryopsy, a device for cryogenic biopsy collection of visceral lesions - Phase I
• VivaGastroProtect, which are fruits and vegetables extract for the protection of digestive system - Phase I
• VivaCrop, a vegetation health monitor - Phase I
• Clinical Biomolecular Sensor -  an in vitro diagnostic device used at the point of care. It also provides contract research and development services in molecular biology, device engineering, and other areas - Phase I

Revenues are still insignificant compared to the expenses, but with several products in phase III FDA trials, that could change rapidly upon approval.  I am also watching to see if their announcement of a $5MM deal with Regenca for their nutraceutical product generates any near-term revenues.  The Veritas deal for the sale of Vivathermic vials in Japan is also one that I am watching to see if it brings any significant income.

The 9-30-09 balance sheet doesn’t inspire awe, but it is not untypical for a small biotech firm like VIVK.  It appears that they will have to get some outside financing from somewhere in order to continue in operations.  They have minimal debt, but poor liquidity ratios.  VIVK also announced that they are looking for acquistions.  The way these things usually work is that VIVK will convince the owners of a private company to be acquired giving them access to the public markets and easy liquidity for the value of their company.  Usually in deals like these, very little cash changes hands and it is all done in shares.  That makes it EVEN MORE IMPORTANT for VIVK to get their share price up.

I like the company and think I understand why it has taken a dive.  I get the feeling that the company is ticked that their stock price took a dive and are doing things to change that. It is in their own best interest to get the stock price up…and, I think they will.

I don’t know why I always say this, but “I never call a bottom”. But, this is definitely a radar stock.  I had an order in yesterday for VIVK that didn’t get filled (I was trying to scalp a penny) and I will probably try again today.

Good luck and good trading,

Jeffrey Dean, Editor

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