TORCHLIGHT ENERGY RESOURCES INC (Form: 8-K, Received: 02/01/2021 16:49:57)

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): January 29, 2021

Torchlight Energy Resources, Inc.

(Exact name of registrant as specified in its charter)


Nevada	001-36247	74-3237581
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

5700 W. Plano Parkway, Suite 3600

Plano, Texas 75093

(Address of principal executive offices)

Telephone – (214) 432-8002

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:

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value		TRCH		The Nasdaq Stock Market LLC

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 o

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. o

Item 1.01 Entry into a Material Definitive Agreement.

As previously disclosed in the current report on Form 8-K filed on September 23, 2020, on September 18, 2020 Torchlight Energy Resources, Inc. (“Torchlight”) issued McCabe Petroleum Corporation, a company owned by Torchlight’s chairman Gregory McCabe (“MPC”), a 6% Secured Convertible Promissory Note (the “MPC Note”). Under the terms of the MPC Note, it provided that if the proposed business combination transaction with Metamaterial, Inc. (“Metamaterial”) closes, all principal and interest under the MPC Note will automatically convert into shares of Torchlight’s common stock at the conversion price of $0.375 per share, and if the transaction is terminated or otherwise does not close, then at such time and until the maturity date, MPC will have the right, at its option, to convert up to $500,000 of the remaining principal amount of the MPC Note, plus all unpaid interest accrued under the MPC Note, into shares of Torchlight’s common stock at the conversion price of $0.375 per share. On January 29, 2021, Torchlight and MPC agreed to amend the MPC Note to allow MPC to convert at any time, including prior to closing of the Metamaterial transaction.

The description of the amendment to the MPC Note set forth herein does not purport to be complete and is qualified in its entirety by reference to the Second Amendment to Promissory Note attached to this current report as Exhibit 10.1.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

As previously disclosed in the current report on Form 8-K filed on July 16, 2020, on July 15, 2020, Torchlight’s Compensation Committee granted stock options to John Brda, Torchlight’s President and Chief Executive Officer, and Roger Wurtele, Torchlight’s Chief Financial Officer. On January 29, 2021, the Torchlight board of directors agreed to amend the stock options of both executives so that instead of vesting upon the closing of a change of control, they will vest on the earlier of Torchlight’s stockholders approving a change of control transaction or the closing of a change of control transaction.

The description of the amendments to the stock options set forth herein does not purport to be complete and is qualified in its entirety by reference to Addendum #1 to Stock Option Agreement of John Brda attached to this current report as Exhibit 10.2 and Addendum #1 to Stock Option Agreement of Roger Wurtele attached to this current report as Exhibit 10.3.

Item 8.01. Other Events.

As previously disclosed in the current report on Form 8-K filed on December 14, 2020, on that date, Torchlight entered into an Arrangement Agreement (the “Agreement”) with Metamaterial, to acquire all of the outstanding common shares of Metamaterial by way of a statutory plan of arrangement under the Business Corporations Act (Ontario), on and subject to the terms and conditions of the Agreement.

On February 1, 2021, Torchlight issued a press release announcing that MPC converted the entire principal amount of $1.5 million of the MPC Note into common stock at its conversion price of $0.375 per share, totaling 4,000,000 shares. Additionally, Mr. McCabe converted the entire principal amount of the $100,000 promissory note issued by Torchlight in December 2020 into common stock of Torchlight at its conversion price of $1.00 per share, totaling 100,000 shares. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference.

Forward-Looking Statement

This current report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the “safe harbor” created by those sections. All statements in this current report that are not based on historical fact are “forward looking statements.” These statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “strategy,” “goal,” or “planned,” “seeks,” “may,” “might”, “will,” “expects,” “intends,” “believes,” “should,” and similar expressions, or the negative versions thereof, and which also may be identified by their context. All statements that address operating performance or events or developments Torchlight expects or anticipates will occur in the future, such as stated objectives or goals, refinement of strategy, attempts to secure additional financing, exploring possible business alternatives, or that are not otherwise historical facts, are forward-looking statements. While management has based any forward-looking statements included in this current report on its current expectations, the information on which such expectations were based may change. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements as a result of various factors, including risks associated with Torchlight’s ability to obtain additional capital in the future to fund planned expansion, the demand for oil and natural gas which demand could be materially affected by the economic impacts of COVID-19 and possible increases in supply from Russia and OPEC, the proposed business combination transaction with Metamaterial, general economic factors, competition in the industry and other factors that could cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Additional risks and uncertainties are described in or implied by the Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of Torchlight’s 2019 Annual Report on Form 10-K, filed on March 16, 2020 and other reports filed from time to time with the Securities and Exchange Commission (“SEC”). Torchlight urges you to consider those risks and uncertainties in evaluating its forward-looking statements. Readers are cautioned to not place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, Torchlight disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in its expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

Additional Information and Where to Find It

Torchlight will prepare a proxy statement for Torchlight’s stockholders to be filed with the SEC. The proxy statement will be mailed to Torchlight’s stockholders. Torchlight urges investors, stockholders and other interested persons to read, when available, the proxy statement, as well as other documents filed with the SEC, because these documents will contain important information about the proposed business combination transaction. Such persons can also read Torchlight’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, for a description of the security holdings of its officers and directors and their respective interests as security holders in the consummation of the transactions described herein. Torchlight’s definitive proxy statement will be mailed to stockholders of Torchlight as of a record date to be established for voting on the transactions described in this report. Torchlight’s stockholders will also be able to obtain a copy of such documents, without charge, by directing a request to: John A. Brda, President of Torchlight Energy Resources, Inc., 5700 W. Plano Parkway, Suite 3600, Plano, Texas 75093; e-mail: john@torchlightenergy.com. These documents, once available, can also be obtained, without charge, at the SEC’s web site (http://www.sec.gov).

Participants in Solicitation

Torchlight and its directors, executive officers and other members of their management and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies of Torchlight stockholders in connection with the proposed business combination. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of Torchlight’s directors in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which was filed with the SEC on March 16, 2020. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies to Torchlight’s stockholders in connection with the proposed business combination will be set forth in the proxy statement for the proposed business combination when available. Information concerning the interests of Torchlight’s participants in the solicitation, which may, in some cases, be different than those of Torchlight’s equity holders generally, will be set forth in the proxy statement relating to the proposed business combination when it becomes available.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

		Description
Exhibit 10.1		Second Amendment to Promissory Note of McCabe Petroleum Corporation dated January 29, 2021
Exhibit 10.2		Addendum #1 to Stock Option Agreement of John Brda dated January 29, 2021
Exhibit 10.3		Addendum #1 to Stock Option Agreement of Roger Wurtele dated January 29, 2021
Exhibit 99.1		Press release dated February 1, 2021

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 hereunto duly authorized.

	Torchlight Energy Resources, Inc.

Date: February 1, 2021	By: /s/ John A. Brda
	John A. Brda
	President

Exhibit 10.1

SECOND AMENDMENT TO PROMISSORY NOTE

THIS SECOND AMENDMENT TO PROMISSORY NOTE (“Amendment”) dated as of January 29, 2021, is to become affixed to, modify and become a part of that certain 6% Secured Convertible Promissory Note in the original principal sum of $1,500,000 dated as of September 18, 2020 (“Original Issue Date”), and amended on September 22, 2020 (as amended, the “Note”), which Note was made and executed by Torchlight Energy Resources, Inc., a Nevada corporation (the “Debtor”), and payable to the order of McCabe Petroleum Corporation (the “Holder”), which Note is due and payable on May 10, 2021 (“Maturity Date”).

WHEREAS, the Holder and Debtor desire to amend the Note; and

NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements and the respective representations and warranties herein contained, and on the terms and subject to the conditions herein set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

1. The Note is amended and modified by amending and restating in its entirety section 4(a) as follows:

“(a) Conversion. At any time after the Original Issue Date, the Holder of this Note will have the right, at the Holder’s option, to convert all or any portion of the Principal Amount hereof and any accrued but unpaid interest thereon into shares of common stock, par value $.001 per share, of the Company (“Common Stock”) in a manner and in accordance with Section 4(b) below (unless earlier paid or redeemed) at the conversion price as set forth below in Section 4(c) (subject to adjustment as described herein). The right to convert the Principal Amount or interest thereon of this Note called for redemption will terminate at the close of business on the Business Day prior to the Redemption Payment Date for such Note, unless the Company subsequently fails to pay the applicable Redemption Amount. The shares of Common Stock to be issued upon conversion under this Section 4 are hereinafter referred to as the “Conversion Shares”.”

2. All terms and conditions of the Note shall, except as amended and modified by this Amendment, will remain in full force and effect and all rights, duties, obligations and responsibilities of the Debtor and the Holder shall be governed and determined by the Note as the same has been amended and modified by this Amendment.

3. THIS AMENDMENT IS TO BE CONSTRUED UNDER THE LAWS OF THE STATE OF TEXAS.

4. This Amendment shall be of no force and effect until receipt and execution of it by the Debtor and the Holder. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which shall be deemed one instrument, by facsimile signature or by e-mail delivery of a “.pdf” format data file signature of any of the parties, each of which shall be deemed an original for all purposes.

Second Amendment to Promissory Note - Page 1

IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Amendment to the Note as of the date first written above.

	DEBTOR:

	TORCHLIGHT ENERGY RESOURCES, INC.


	By:	/s/ John Brda
		John Brda, President/CEO

	HOLDER:

	MCCABE PETROLEUM CORPORATION


	By:	/s/ Gregory McCabe

	Printed Name:	Gregory McCabe

	Title:	President

Second Amendment to Promissory Note - Page 2

Exhibit 10.2

ADDENDUM NO. 1 TO STOCK OPTION AGREEMENT

This Addendum #1 (“Addendum”) to that certain Stock Option Agreement dated July 15, 2020 (“Agreement”) by and between Torchlight Energy Resources, Inc., a Nevada corporation (“Company”), and John A. Brda (“Brda”) is effective January 29, 2021.

WHEREAS, on July 15, 2020, the Company granted to Brda a Stock Option Agreement (the “Stock Option Agreement”) providing him the right to purchase shares of common stock of the Company, in accordance with the Amended and Restated 2015 Stock Option Plan (the “2015 Stock Option Plan”) and the terms and provisions hereof;

WHEREAS, the Company and Brda desire to amend the Stock Option Agreement;

For good and valuable consideration, the receipt and sufficiency of which is hereby accepted and acknowledged, the parties hereto agree to amend and modify the Agreement as follows.

1. Amendment to Section 2. Section 2 of the Agreement shall be amended and restated in its entirety with the following:

“Vesting.

This Option shall vest as to the total number of shares covered by the Option upon either (a) the earlier of the Company’s stockholders approving a Change of Control (as defined in Section 8(c) of the Grantee’s Employment Agreement) or the closing of a Change of Control, in either event, occurring prior to July 15, 2021, or (b) the Company entering into a letter of intent with a third party prior to July 15, 2021 that contemplates a Change of Control, and the Change of Control transaction closes with that third party (or an affiliate(s) of that third party) at a date not later than July 15, 2022; subject, however, to acceleration and earlier vesting of all of the Options in the event of (i) the termination of employment by the Grantee for “good reason” as defined in the Grantee’s Employment Agreement or (ii) a determination of the Committee, at its discretion. In the event of the death or disability of the Grantee prior to vesting or if the Company terminates Grantee’s employment for reasons other than for “Cause” (as defined in Grantee’s Employment Agreement) prior to vesting, the Option will still vest upon the occurrence of the events described under clauses (a) or (b) above.”

2. No Other Amendments. Except as set forth in section 1 of this Addendum, the Agreement shall remain in full force and effect as currently in effect.

3. Severability. Should any one or more of the provisions of this Addendum be determined to be illegal or unenforceable, all other provisions of this Addendum shall be given effect separately from the provision or provisions determined to be illegal or unenforceable and shall not be effected thereby.

Page 1 of 2

4. Counterparts. This Addendum may be executed in multiple counterparts with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

5. Entire Agreement. This Addendum and the Agreement by and between the parties hereof constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof.

6. Defined Terms. Defined terms used in this Addendum shall have the meaning ascribed to them herein or in the Agreement.

IN WITNESS WHEREOF, each of the parties hereto has executed this Addendum or has caused this Addendum to be executed on its behalf by a representative duly authorized, all as of the date first above set forth.

	Torchlight Energy Resources, Inc.

	By:	/s/ Michael Graves
		Michael Graves, Chairman of the Compensation Committee of the Board of Directors

/s/ John A. Brda

John A. Brda

Page 2 of 2

Exhibit 10.3

ADDENDUM NO. 1 TO STOCK OPTION AGREEMENT

This Addendum #1 (“Addendum”) to that certain Stock Option Agreement dated July 15, 2020 (“Agreement”) by and between Torchlight Energy Resources, Inc., a Nevada corporation (“Company”), and Roger Wurtele (“Wurtele”) is effective January 29, 2021.

WHEREAS, on July 15, 2020, the Company granted to Wurtele a Stock Option Agreement (the “Stock Option Agreement”) providing him the right to purchase shares of common stock of the Company, in accordance with the Amended and Restated 2015 Stock Option Plan (the “2015 Stock Option Plan”) and the terms and provisions hereof;

WHEREAS, the Company and Wurtele desire to amend the Stock Option Agreement;

For good and valuable consideration, the receipt and sufficiency of which is hereby accepted and acknowledged, the parties hereto agree to amend and modify the Agreement as follows.

1. Amendment to Section 2. Section 2 of the Agreement shall be amended and restated in its entirety with the following:

“Vesting.

2. No Other Amendments. Except as set forth in section 1 of this Addendum, the Agreement shall remain in full force and effect as currently in effect.

Page 1 of 2

6. Defined Terms. Defined terms used in this Addendum shall have the meaning ascribed to them herein or in the Agreement.

	Torchlight Energy Resources, Inc.

	By:	/s/ Michael Graves
		Michael Graves, Chairman of the Compensation Committee of the Board of Directors

/s/ Roger Wurtele

Roger Wurtele

Page 2 of 2

Exhibit 99.1

Torchlight CHAIRMAN converts $1.6 million of debt into common stock

PLANO, TX February 1, 2021 – Torchlight Energy Resources, Inc. (NASDAQ: TRCH), an oil and gas exploration company ("Torchlight"), today announced that the McCabe Petroleum Corporation, owned by Torchlight’s chairman Greg McCabe, converted the entire principal amount of its $1.5 million secured convertible promissory note issued by Torchlight in September of 2020 into common stock at its conversion price of $0.375 per share, totaling 4,000,000 shares. Additionally, Mr. McCabe converted the entire principal amount of the $100,000 promissory note issued by Torchlight in December 2020 into common stock at its conversion price of $1.00 per share, totaling 100,000 shares.

“Once again, Mr. McCabe has demonstrated his confidence in Torchlight and its oil and gas assets,” stated John Brda, CEO of Torchlight. “Management and our board of directors appreciate his continued support.”

####

About Torchlight Energy Resources, Inc.

Torchlight Energy Resources, Inc. (TRCH), based in Plano, Texas, is a high growth oil and gas Exploration and Production (E&P) company with a primary objective of acquisition and development of domestic oil fields. Torchlight has assets focused in West and Central Texas where their targets are established plays such as the Permian Basin. For additional information on Torchlight, please visit www.torchlightenergy.com.

Forward-Looking Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the “safe harbor” created by those sections. All statements in this release that are not based on historical fact are “forward looking statements.” These statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “strategy,” “goal,” or “planned,” “seeks,” “may,” “might”, “will,” “expects,” “intends,” “believes,” “should,” and similar expressions, or the negative versions thereof, and which also may be identified by their context. All statements that address operating performance or events or developments Torchlight Energy Resources expects or anticipates will occur in the future, such as stated objectives or goals, our refinement of strategy, our attempts to secure additional financing, our exploring possible business alternatives, or that are not otherwise historical facts, are forward-looking statements. While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements as a result of various factors, including those risks and uncertainties described in or implied by the Risk Factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our 2019 Annual Report on Form 10-K, filed on March 16, 2020 and our other reports filed from time to time with the Securities and Exchange Commission. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

Additional Information and Where to Find It

Torchlight will prepare a proxy statement for Torchlight’s stockholders to be filed with the SEC. The proxy statement will be mailed to Torchlight’s stockholders. Torchlight urges investors, stockholders and other interested persons to read, when available, the proxy statement, as well as other documents filed with the SEC, because these documents will contain important information about the proposed business combination transaction. Such persons can also read Torchlight’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, for a description of the security holdings of its officers and directors and their respective interests as security holders in the consummation of the transactions described herein. Torchlight’s definitive proxy statement will be mailed to stockholders of Torchlight as of a record date to be established for voting on the proposed business combination. Torchlight’s stockholders will also be able to obtain a copy of such documents, without charge, by directing a request to: John A. Brda, President of Torchlight Energy Resources, Inc., 5700 W. Plano Parkway, Suite 3600, Plano, Texas 75093; e-mail: john@torchlightenergy.com. These documents, once available, can also be obtained, without charge, at the SEC’s web site (http://www.sec.gov).

Participants in Solicitation

Contacts

Derek Gradwell
Integrous Communications
Phone: 512-270-6990
dgradwell@integcom.us, ir@torchlightenergy.com