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: December 18, 2013
DATE OF EARLIEST EVENT REPORTED: December 16, 2013

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.)
 
4125 Blackhawk Plaza Circle, Suite 201
Danville, California 94506
 (Address of principal executive offices)
 
 
(855) 733 2685
(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))

 
 
 
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

Amendment to Bridge Notes

On December 16, 2013, PEDEVCO Corp. (the “ Company ”) entered into an Amendment to Secured Promissory Note (each, an “ Amended Note ,” and collectively, the “ Amended Notes ”) with each of the holders (the “ Bridge Investors ”) of those certain Secured Promissory Notes (the “ Bridge Notes ”), originally issued by the Company on March 22, 2013 in a private placement transaction in which the Company sold and issued to the Bridge Investors a total of $4.0 million of Bridge Notes and warrants exercisable for a total of up to 76,198 shares of the Company’s common stock (the “ Bridge Warrants ”) for gross proceeds of $4.0 million (the “ Bridge Financing ”).  The Amended Notes amend certain provisions of the Bridge Notes, as originally reported by the Company in its Quarterly Report on Form 10-Q filed with the Commission on May 20, 2013.

The Bridge Notes were amended effective December 16, 2013 (the “ Effective Date ”) to provide for (i) the extension of the maturity date of such Bridge Notes, which were originally due as of December 31, 2013, to July 31, 2014 (the “ Extension Term ” and “ New Maturity Date ”), (ii) the subordination of the Bridge Notes to certain future qualified senior indebtedness of the Company with a principal amount of at least $5.0 million, (iii) the payment in full of all accrued interest through the Effective Date on January 8, 2014 (the “ Payment Date ”), equal to an aggregate of approximately $320,000 due and payable to the Bridge Investors on the Payment Date, (iv) the payment in full of the payment-in-kind amount (“ PIK ”) equal to 10% of the original principal amount of such Bridge Notes on the Payment Date, equal to an aggregate of $400,000 due and payable to the Bridge Investors on the Payment Date, (v) the repayment of either none or 50% of the outstanding principal amount due under such Bridge Notes, as elected by the holders thereof, on the Payment Date, which aggregate principal repayment of $1,625,000 shall be due and payable to the Bridge Investors on the Payment Date as elected by the holders, (vi) the amendment of the interest rate of such Bridge Notes for the Extension Term from 10% per annum to 12% per annum with respect to the remaining unpaid principal amount of such Bridge Notes (the “ Deferred Principal ”), and (vii) an additional payment-in-kind cash amount equal to 10% of the Deferred Principal due on the New Maturity Date (the “ Additional PIK ”).  In total, eleven (11) Bridge Investors holding Bridge Notes with an aggregate principal amount outstanding of $3,250,000 elected to defer 50% of their principal, agreeing to defer an aggregate of $1,625,000 in principal amount of the Bridge Notes, and five (5) Bridge Investors holding Bridge Notes with an aggregate principal amount outstanding of $750,000 elected to defer 100% of their principal, for a total Deferred Principal of $2,375,000, and an aggregate Additional PIK due upon the New Maturity Date of $237,500.

As additional consideration for the amendment of the Bridge Notes, the Company granted, with issuance subject to additional listing approval by the NYSE MKT, a new warrant (“ New Warrant ”) exercisable on a cashless basis at an exercise price of $2.34 per share for a number of shares of common stock of the Company equal to (x) double (2x) the number of shares issuable under the Bridge Warrant originally issued to each holder who agreed to defer 50% of the outstanding principal of its Bridge Note, and (y) triple (3x) the number of shares issuable under the Bridge Warrant originally issued to each holder who agreed to defer 100% of the outstanding principal of its Bridge Note, for a total of New Warrants exercisable for an aggregate of 166,684 shares of Company common stock issuable by the Company to the Bridge Investors.  The New Warrants have a 4-year life and have substantially the same terms as the Bridge Warrants originally issued to the Bridge Investors.

Frank C. Ingriselli, the Company’s President, Chief Executive Officer, and member of the Company’s Board of Directors, agreed to defer $500,000 of the original $1.0 million principal amount outstanding under his Bridge Note, and on the Payment Date the Company will pay to him $80,000 in accrued interest and $100,000 in PIK amounts due, and repay 50% of his outstanding principal amount of $500,000, and Mr. Ingriselli will receive a New Warrant exercisable for 38,096 shares of the Company’s common stock.  Clark R. Moore, the Company’s Executive Vice President and General Counsel, agreed to defer $25,000 of the original $50,000 principal amount outstanding under his Bridge Note, and on the Payment Date the Company will pay to him $4,000 in accrued interest and $5,000 in PIK amounts due, and repay 50% of his outstanding principal amount of $25,000, and Mr. Moore will receive a New Warrant exercisable for 1,906 shares of the Company’s common stock.

The Company amended the Bridge Notes in order to extend their maturity dates with respect to the Deferred Principal to conserve the Company’s available cash, and to subordinate the Bridge Notes to better position the Company to seek additional senior debt financing opportunities.

The foregoing descriptions of the Amended Notes and New Warrants is qualified in their entirety by the full text of each document which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and incorporated in this Item 1.01 by reference.

ITEM 2.03   CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

See the discussion under Item 1.01 above below with respect to the Amended Notes, which is incorporated herein by reference.

ITEM 3.02  UNREGISTERED SALES OF EQUITY SECURITIES.

The issuance of the Amended Notes and the grant of the New Warrants described above in Item 1.01, were exempt from registration pursuant to Section 4(2), Rule 506 of Regulation D and/or Regulation S of the Securities Act of 1933, as amended, since the foregoing issuances and grants did not involve a public offering, the recipients took the securities for investment and not resale, we took appropriate measures to restrict transfer, and the recipients (a) were “accredited investors,” (b) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act of 1933; and/or (c) were non-U.S. persons.

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

Exhibit No.
Description
   
10.1*
Form of Amendment to Secured Promissory Note (December 2013)
10.2*
Form of Warrant for the Purchase of Common Stock (December 2013 New Warrants)
 
* 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 hereunto duly authorized.


 
PEDEVCO CORP.
     
 
By:
/s/ Michael L. Peterson
   
Michael L. Peterson
   
Executive Vice President and
Chief Financial Officer
Date: December 18, 2013

 
 
 

EXHIBIT INDEX


Exhibit No.
Description
   
10.1*
Form of Amendment to Secured Promissory Note (December 2013)
10.2*
Form of Warrant for the Purchase of Common Stock (December 2013 New Warrants)
 
 
* Filed herewith.



EXHIBIT 10.1


AMENDMENT TO SECURED PROMISSORY NOTE
 
THIS AMENDMENT TO SECURED PROMISSORY NOTE (the “ Amendment ”) is executed as of this 16th day of December, 2013 (the “ Effective Date ”) by and between PEDEVCO CORP., a Texas corporation (“ Company ”), and the undersigned holder (“ Holder ”).  Capitalized terms used below and otherwise not defined herein shall have the meanings given to them in the Note and Warrant (each, as defined below).
 
W I T N E S S E T H
 
WHEREAS, on March 22, 2013, the Company issued a secured promissory note to the Holder (the “ Note ”), with a maturity date of December 31, 2013 (the “ Maturity Date ”), pursuant to that certain Note and Warrant Purchase Agreement, dated March 22, 2013, entered into by and among the Company, the Holder, and certain other parties thereto (the “ Purchase Agreement ”);
 
WHEREAS, on March 22, 2013 and pursuant to the Purchase Agreement, the Company issued a warrant to the Holder exercisable for shares of Company common stock at $5.25 per share (as adjusted to reflect the Company’s one-for-three reverse split that was effected on April 23, 2013) (the “ Exercise Price ”), expiring on March 22, 2017 (the “ Original Warrant ”); and
 
WHEREAS, the Company and the Holder desire to extend the Maturity Date of the Note with respect to [50%][100%] of the original principal amount due and outstanding thereunder (the “ Deferred Principal Amount ”) to July 31, 2014 (the   “ New Maturity Date ”), and make certain other changes, and, in consideration thereof, to provide that:
 
 
(i)
the Company shall pay to the Holder all interest accrued under the Note through the Effective Date on January 8, 2014 (the “ Payment Date ”);
 
 
(ii)
the Company shall pay to the Holder the PIK cash amount equal to 10% of the original principal amount of the Note on the Payment Date;
 
 
(iii)
interest on the Deferred Principal Amount of the Note from the Payment Date through the New Maturity Date shall accrue at 12% per annum;
 
 
(iv)
in addition to the Interest accrued under the Note from the Payment Date through the New Maturity Date with respect to the Deferred Principal Amount, upon the New Maturity Date, the Company shall pay to the Holder an additional payment-in-kind (“ Additional PIK ”) cash amount equal to 10% of the Deferred Principal Amount of the Note;
 
 
(v)
an additional 4-year cashless warrant (a “ New Warrant ”) shall be issued to the Holder by the Company exercisable for [double (2x)][triple (3x)] the number of shares issuable under the Original Warrant (as adjusted to reflect the 1-for-3 reverse stock split effected by the Company on April 23, 2013 (the “ Stock Split ”)), with an “Exercise Price” equal to the closing sales price for the Company’s common stock (or the closing bid, if no sales were reported) as quoted on the NYSE MKT exchange or system on the Effective Date, as reported in The Wall Street Journal or such other source as the Company deems reliable; and
 

 
 
 


 
(vi)
the Holder shall agree to subordinate the Note to certain qualified senior indebtedness, provided that the aggregate principal amount of such indebtedness must be at least US$5,000,000 .
 
NOW THEREFORE , in consideration of the premises and the mutual promises and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
 
1.             [ Partial Repayment of Note Principal .  On the Payment Date, the Company shall repay to the Holder 50% of the outstanding unpaid principal amount of the Note.  Effective upon the receipt of the partial principal repayment by the Holder on the Payment Date, the “principal amount” of the Note shall be automatically amended to equal the Deferred Principal Amount. ]
 
2.             Amendment to Section 3.1(a) of the Note .  Section 3.1(a) of the Note shall be amended and restated in its entirety to read as follows:
 
“(a)            Interest .  Simple interest on the principal under this Note outstanding from time to time (“ Interest ”) shall accrue at the fixed rate equal to 10% per annum through the effective date of the first amendment of this Note (the “ Amendment Effective Date ”), and thereafter Interest on the outstanding unpaid principal amount shall accrue at the fixed rate equal to 12% per annum through the New Maturity Date (as defined below).  Interest accrued through the Amendment Effective Date shall be due and payable on January 8, 2014 (the “ Payment Date ”), and interest accrued from the Amendment Effective Date through the New Maturity Date shall be due and payable on the New Maturity Date.”
 
3.             Amendment to Section 3.1(b) of the Note .  Section 3.1(b) of the Note shall be amended and restated in its entirety to read as follows:
 
“(b)            Payment-In-Kind .  In addition to the accrual of Interest provided in Section 3.1(a) above, on or before the Payment Date, the Borrower shall pay to the Holder a payment-in-kind (“ PIK ”) cash amount equal to 10% of the original principal amount of this Note.  In addition, on the New Maturity Date (as defined below), in addition to the accrual of Interest provided in Section 3.1(a) above, the Borrower shall pay to the Holder an additional payment-in-kind (“ Additional PIK ”) cash amount equal to 10% of the “ Deferred Principal Amount ” due under the Note, which shall equal the principal amount due and outstanding under the Note after the partial principal repayment by the Borrower to the Holder on or about the Payment Date.”
 
4.             Amendment to Section 3.1(c) of the Note .  Section 3.1(c) of the Note shall be amended and restated in its entirety to read as follows:
 
“(c)            Principal .  To the extent not repaid prior to such date as provided or permitted herein, the principal amount of this Note shall be due and payable within ten (10) Business Days of July 31, 2014 , the “ New Maturity Date ”).  If the principal is not paid when due hereunder, whether by reason of acceleration or on the New Maturity Date, interest on such unpaid principal shall accrue from its due date until paid at the rate of 18% per annum.  If upon the Maturity Date the amount available for distribution to each holder of Notes that are also due as of the Maturity Date is less than the amount that such holder is entitled to pursuant to such holder’s Note, then each holder shall receive its pro rata share pursuant to such holder’s outstanding principal amount and accrued but unpaid interest.
 
5.             Amendment of Note to Include New Section 2.8 .  The Note shall be amended to include the following provision as new Section 2.8 thereto:
 

 
 
 


“2.8            Subordination . Notwithstanding anything to the contrary herein, the Borrower agrees, and the Holder by its acceptance hereof likewise agrees, that the Note shall be subordinated by the Holder to Qualified Senior Indebtedness (as defined below).  The Holder agrees to enter into a subordination agreement for Qualified Senior Indebtedness according to standard industry terms and conditions as requested by the lender.  For purposes of this Note, “ Qualified Senior Indebtedness ” means all indebtedness of the Borrower for money borrowed from any bank or other non-affiliated financial institution or investment group (including any indebtedness to any assignees thereof) whether now existing or hereafter arising, including, without limitation, all principal and interest (including such interest as may accrue after the initiation of bankruptcy proceedings), and all premiums, fees and expenses owing by the Borrower to any such parties in respect of such indebtedness, provided that the aggregate principal amount of such indebtedness must be at least $5,000,000 to qualify as “Qualified Senior Indebtedness” (excluding amounts borrowed from the Holder or its affiliates, and any amounts borrowed from MIE Jurassic Holding Corporation).”
 
6.             Issuance of New Warrant .  Upon the Effective Date, and subject to additional listing approval by the NYSE MKT, the Company shall issue to the Holder a New Warrant in substantially the form attached hereto as Exhibit A , exercisable for a number of shares of common stock of the Company equal to [double (2x)][triple (3x)] the number of shares issuable under the Original Warrant (as adjusted to reflect the Stock Split), with an “Exercise Price” equal to the closing sales price for the Company’s common stock (or the closing bid, if no sales were reported) as quoted on the NYSE MKT exchange or system on the Effective Date, as reported in The Wall Street Journal or such other source as the Company deems reliable.
 
7.             Representations and Warranties .
 
a.            The Company has the requisite corporate power and authority to enter into and perform this Amendment in accordance with the terms hereof.  The execution, delivery and performance of this Amendment by the Company and the consummation by it of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, no further consent or authorization of the Company, its Board of Directors, stockholders or any other third party is required.  When executed and delivered by the Company, this Amendment shall constitute a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.
 
8.            With respect to the issuance of the New Warrant and underlying Warrant Stock, the Holder reissues and certifies the representations and warranties made by the Holder to the Company in Section 4 of the Purchase Agreement, including, but not limited to, Section 4.1 (“Business and Financial Experience”), Section 4.2 (“Investment Intent; Blue Sky”), Section 4.7 (“Purchaser Due Diligence”), and Section 4.8 (“Accredited Investor”).
 
9.             Limited Effect .  Except as amended hereby, the Note shall remain in full force and effect, and the valid and binding obligation of the parties thereto.  Upon the effectiveness of this Agreement, each reference in the Note to “Note,” “Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to such Note as amended and modified hereby.  Effective upon the Effective Date, the Note shall automatically represent and evidence the Deferred Principal Amount and it shall not be necessary for the Company to provide the Holder a replacement or amended Note evidencing such Deferred Principal Amount.
 

 
 
 


10.             Effective Time .  This Amendment shall be deemed effective from and after due execution and delivery by each party hereto.
 
11.             Governing Law .  This Amendment shall be governed by and construed in accordance with the laws of the State of California (without giving effect to conflicts of law principles) as to all matters, including validity, construction, effect, performance and remedies of and under this Amendment.
 
12.             Further Assurances .  The parties agree that, from time to time, each of them will take such other action and to execute, acknowledge and deliver such contracts, deeds, or other documents as may be reasonably requested and necessary or appropriate to carry out the purposes and intent of this Agreement and the transactions contemplated herein.
 
13.             Counterparts .  This Agreement may be executed in several counterparts, each of which is an original.  It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.  A copy of this Agreement signed by one Party and faxed to another Party shall be deemed to have been executed and delivered by the signing Party as though an original.  A photocopy of this Agreement shall be effective as an original for all purposes.
 
[Signature Pages Follow]
 

 
 
 


IN WITNESS WHEREOF, the parties hereto, have caused this Amendment to Secured Promissory Note to be duly executed and delivered as of the date first written above.
 
PEDEVCO CORP .

By:          _____________________________ 
Frank C. Ingriselli
President and Chief Executive Officer


HOLDER:


________________________________

By:                                                       

Name:                                                                 

Title:                                                       



 
 
 


Exhibit A

PEDEVCO CORP.
WARRANT
FOR THE PURCHASE OF
COMMON STOCK


 
 
 
 
EXHIBIT 10.2

 
EXHIBIT A
 
NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND SUCH SECURITIES MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
 
Warrant No.
CS-___
Number of Shares: __________
Warrant Date:
December 16, 2013
 

PEDEVCO CORP.
WARRANT
FOR THE PURCHASE OF
COMMON STOCK
 
1.            Issuance .  For value received, the receipt of which is hereby acknowledged by PEDEVCO Corp., a Texas corporation (the “Company”), _______________ , or registered assigns (the “Holder”), is hereby granted the right to purchase, at any time until the close of business on DECEMBER 16, 2017 (the “Expiration Date”), _______________ ( _________ ) fully paid and nonassessable shares of the Company’s Common Stock, par value US$0.001 per share (the “Common Stock”), at an exercise price of US$2.34 per share (the “Exercise Price”).
 
2.            Procedure for Exercise .  Upon surrender of this Warrant with the annexed Notice of Exercise Form duly executed, together with payment of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased.  This Warrant may be exercised in whole or in part.
 
(a)            Net Issues Exercise .  Notwithstanding any provisions herein to the contrary, if the fair market value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise Form and notice of such election in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:
 
X =
Y (A-B)
A

 
Where
X =
the number of shares of Common Stock to be issued to the Holder
 
 
Y =
the number of shares of Common Stock purchasable under this Warrant or, if only a portion of this Warrant is being exercised, the portion of this Warrant being canceled (at the date of such calculation)
 
 
A =
the fair market value of one share of the Company’s Common Stock (at the date of such calculation)
 
 
B =
Exercise Price (as adjusted to the date of such calculation)

 
 
 
 
For purposes of the above calculation, fair market value of one share of Common Stock shall be equal to the last closing trade price for such security on the Principal Market (as defined below) as reported by Bloomberg Financial Markets (“Bloomberg”), or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price at 4:00 p.m., New York City Time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg, or, if the foregoing do not apply, the last closing trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing trade price is reported for such security by Bloomberg, the last closing ask price for such security as reported by Bloomberg, or, if no last closing ask price is reported for such security by Bloomberg, the average of the highest bid price and the lowest ask price of any market makers for such security.  If the fair market value cannot be calculated for that security on that date on any of the foregoing bases, or if the security is not publicly traded and is not listed on a Principal Market, the fair market value of such security on such date shall be determined by the Company’s Board of Directors in good faith.  “Principal Market” for purposes of this Warrant means any national U.S. stock exchange (including any market that is part of the Nasdaq Stock Market), the OTC Bulletin Board, and/or on the OTCQX or OTCQB levels of the OTC Markets Group.
 
3.            Reservation of Shares .  The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of Common Stock as shall be required for issuance upon exercise hereof (the “Warrant Shares”).  Any shares issuable upon exercise of this Warrant will be duly and validly issued, fully paid and free of all liens and charges and not subject to any preemptive rights.
 
4.            Mutilation or Loss of Warrant .  Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void.
 
5.            No Rights as Shareholder .  The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder of the Company, either at law or in equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.
 
6.            Effect of Certain Transactions
 
6.1            Adjustments for Stock Splits, Stock Dividends Etc .  If the number of outstanding shares of Common Stock of the Company are increased or decreased by a stock split, reverse stock split, stock dividend, stock combination, recapitalization or the like, the Exercise Price and the number of shares purchasable pursuant to this Warrant shall be adjusted proportionately so that the ratio of (i) the aggregate number of shares purchasable by exercise of this Warrant to (ii) the total number of shares outstanding immediately following such stock split, reverse stock split, stock dividend, stock combination, recapitalization or the like shall remain unchanged, and the aggregate purchase price of shares issuable pursuant to this Warrant shall remain unchanged.
 
6.2            Expiration Upon Certain Transactions .  If at any time the Company plans to sell all or substantially all of its assets or engage in a merger or consolidation of the Company in which the Company will not survive and in which holders of the Common Stock will receive consideration at or above the Exercise Price, as adjusted (other than a merger or consolidation with or into a wholly- or partially-owned subsidiary of the Company), the Company will give the Holder of this Warrant advance written notice.  Upon the occurrence of any such event, this Warrant shall automatically be deemed to be exercised in full without any action required on the part of the Holder.
 
 
 
 

6.3            Adjustments for Reorganization, Mergers, Consolidations or Sales of Assets .  If at any time there is a capital reorganization of the Common Stock (other than a recapitalization, combination, or the like provided for elsewhere in this Section 6) or merger or consolidation of the Company with another corporation (other than one covered by Section 6.2), or the sale of all or substantially all of the Company’s properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant (and only to the extent this Warrant is exercised), the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Common Stock, or other securities, deliverable upon the exercise of this Warrant would otherwise have been entitled on such capital reorganization, merger, consolidation or sale.  In any such case, appropriate adjustments shall be made in the application of the provisions of this Section 6 (including adjustment of the Exercise Price then in effect and number of Warrant Shares purchasable upon exercise of this Warrant) which shall be applicable after such events.
 
7.            Transfer to Comply with the Securities Act .  This Warrant has not been registered under the Securities Act of 1933, as amended, (the “Securities Act”) and has been issued to the Holder for investment and not with a view to the distribution of either this Warrant or the Warrant Shares.  Neither this Warrant nor any of the Warrant Shares or any other security issued or upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the Act.  Each certificate for this Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section.
 
8.            Notices .  Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally or sent by certified, registered or express mail, postage pre-paid.  Any such notice shall be deemed given when so delivered personally, or if mailed, two days after the date of deposit in the United States mails, as follows:
 
If to the Company, to:
 
PEDEVCO Corp.
4125 Blackhawk  Plaza Circle, Suite 201
Danville, CA 94506
Attention:  Chief Executive Officer and General Counsel
 
With a copy to:
 
The Loev Law Firm, PC
6300 West Loop South, Suite 280
Bellaire, Texas 77401
Attention:  David M. Loev
 
If to the Holder, to his address appearing on the Company’ records.
 
Any party may designate another address or person for receipt of notices hereunder by notice given to the other parties in accordance with this Section.
 
 
 
 

9.            Supplements and Amendments; Whole Agreement .  This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto.  This Warrant contains the full understanding of the parties hereto with respect to the subject matter hereof, and there are no representations, warranties, agreements or understandings other than expressly contained herein.
 
10.            Governing Law .  This Warrant shall be deemed to be a contract made under the laws of the State of California and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.
 
11.            Counterparts .  This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
 
12.            Descriptive Headings .  Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
 
13.            Assignability .  This Warrant or any part hereof may only be hereafter assigned by the Holder to an affiliate thereof executing documents reasonably required by the Company.  Any such assignment shall be binding on the Company and shall inure to the benefit of any such assignee.
 
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the Warrant Date set forth above.
 
 
PEDEVCO CORP.
 
 
By:                                                                     
Name: Frank C. Ingriselli
Title:   President and Chief Executive Officer
 
 
 
HOLDER:
_____________________________
 
By:                                                                     
Name:
Title:

 
 
 

NOTICE OF EXERCISE OF WARRANT
 

The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant dated as of December 16, 2013, to purchase _____________ shares of the Common Stock of PEDEVCO Corp., and (x) tenders herewith payment in accordance with the first paragraph of Section 2 of the Warrant or (y) elects to exercise the Warrant for the purchase of _______ shares of Common Stock, pursuant to the provisions of Section 2(a) of the Warrant.
 
Please deliver the stock certificate to:
 
______________________________________
 
______________________________________
 
______________________________________
 

Dated: ____________________


By:_______________________