Blueprint
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT
REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of Earliest Event Reported): October 25, 2018
001-35922
(Commission file number)
PEDEVCO CORP.
(Exact name of registrant as specified in its charter)
|
Texas
|
|
22-3755993
|
|
(State or other jurisdiction of incorporation or
organization)
|
|
(IRS Employer Identification No.)
|
1250 Wood Branch Park Dr., Suite 400
Houston, Texas 77079
(Address of principal executive offices)
(855)
733-3826
(Issuer’s telephone number)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
|
[
]
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|
|
|
|
|
[
]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
|
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
|
|
|
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
|
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Item 1.01 Entry Into a Material Definitive
Agreement.
On
October 25, 2018, PEDEVCO Corp. (the “Company”,
“PEDEVCO”,
“we”
and “us”) raised $7,000,000
through the sale of a $7,000,000 Convertible Promissory Note (the
“Convertible
Note”) to SK Energy LLC (“SK Energy”), a company
wholly-owned by our Chief Executive Officer and director, Dr. Simon
Kukes. The Convertible Note accrues interest monthly at 8.5% per
annum, which interest is payable on the maturity date unless
otherwise converted into our common stock as described below. The
Convertible Note and all accrued interest thereon are convertible
into shares of our common stock, from time to time, at the option
of the holder thereof, at a conversion price equal to $1.79 per
share (the “Conversion Price”), which
was $0.01 above the closing sales price of the Company’s
common stock on the date the Convertible Note was entered into. The
conversion of the Convertible Note is subject to a 49.9% conversion
limitation for so long as SK Energy or any of its affiliates holds
such note, which prevents the conversion of any portion thereof
into common stock of the Company if such conversion would result in
SK Energy beneficially owning (as such term is defined in the
Securities Exchange Act of 1934, as amended)(“Beneficially Owning”)
more than 49.9% of the Company’s outstanding shares of common
stock. The Convertible Note is due and payable on October 25, 2021,
but may be prepaid at any time without penalty. The Convertible
Note contains standard and customary events of default and, upon
the occurrence of an event of default, the amount owed under the
Convertible Note accrues interest at 10% per annum.
The
Company intends to apply the funds raised from the sale of the
Convertible Note to (i) fund the drilling of four initial wells on
its new assets acquired on August 31, 2018 located in the San
Andres play in the Permian Basin situated in eastern New Mexico as
announced by the Company in its Current Report on Form 8-K filed
with the Securities and Exchange Commission (the
“SEC”)
on September 4, 2018, (ii) fund its participation in several new
non-operated wells in its D-J Basin asset located in Weld County,
Colorado, and (iii) for general working capital
purposes.
The
foregoing description of the Convertible Note does not purport to
be complete and is qualified in its entirety by reference to the
form of Convertible Note attached as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by
reference.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The
disclosures in Item
1.01 above regarding the Convertible Note are
incorporated by reference in this Item 2.03 in their
entirety.
Item 3.02 Unregistered Sales of Equity Securities.
We
claim an exemption from registration for the issuance and sale of
the Convertible Note described above and Interest Shares described
below pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D
of the Securities Act of 1933, as amended (“Securities Act”), since
the foregoing issuances did not involve a public offering, the
recipient was an “accredited investor”
and/or had access to similar information as would be included in a
Registration Statement under the Securities Act. The securities
were offered without any general solicitation by us or our
representatives. No underwriters or agents were involved in the
foregoing issuances and we paid no underwriting discounts or
commissions. The securities are subject to transfer restrictions,
and the certificates evidencing the securities contain an
appropriate legend stating that such securities have not been
registered under the Securities Act and may not be offered or sold
absent registration or pursuant to an exemption therefrom. The
securities were not registered under the Securities Act and such
securities may not be offered or sold in the United States absent
registration or an exemption from registration under the Securities
Act and any applicable state securities laws.
Up to a
total of 3,910,615 shares of common stock of the Company are
issuable upon the conversion of the principal amount of the
Convertible Note, based on a Conversion Price equal to $1.79 per
share.
Item 8.01 Other Events.
As disclosed in greater detail in the
Company’s Current Report on Form 8-K filed with the SEC on
June 26, 2018, on June 26, 2018, we raised $7,700,000 through the
sale of a $7,700,000 Convertible Promissory Note (the
“June 2018
Note”) to SK Energy. The
June 2018 Note accrues interest monthly at 8% per annum, payable
quarterly (beginning October 15, 2018), in either cash or shares of
common stock (at the option of the Company), or with the consent of
SK Energy, such interest may be accrued and capitalized, or, in the
event that the Company is prohibited from paying the interest
payments due on the June 2018 Note in either cash or shares of
common stock, then such interest will continue to accrue until such
time as the Company can either pay such accrued interest in cash or
stock. If interest on the June 2018 Note is paid in common stock,
SK Energy will be due that number of shares of common stock (the
“Interest
Shares”) equal to the
amount due divided by the average of the closing sales prices of
the Company’s common stock for the ten trading days
immediately preceding the last day of the calendar quarter prior to
the applicable payment date, rounded up to the nearest whole share
of common stock (the “Average
Price”).
On October 25, 2018, the Company and SK Energy
agreed to convert an aggregate of $163,756.76 of interest accrued
under the June 2018 Note from its effective date through September
30, 2018 (the “Accrued
Interest”) into Interest
Shares, and the Company issued an aggregate of 75,118 Interest
Shares to SK Energy upon conversion of the Accrued Interest on that
date, based on an Average Price of $2.18 calculated in accordance
with the terms of the June 2018 Note calculated as of September 30,
2018.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits.
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
|
|
Convertible
Promissory Note between PEDEVCO Corp., as borrower and SK Energy
LLC, dated October 25, 2018
|
* Filed herewith.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
|
|
|
|
|
|
PEDEVCO CORP.
|
|
|
|
|
|
|
By:
|
/s/ Dr. Simon Kukes
|
|
|
|
Dr. Simon Kukes
|
|
|
|
Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: October
26, 2018
EXHIBIT INDEX
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
|
|
Convertible
Promissory Note between PEDEVCO Corp., as borrower and SK Energy
LLC, dated October 25, 2018
|
* Filed herewith.