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 17, 2017 (October 11, 2017)
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Victory Energy Corporation
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(Exact name of registrant as specified in its charter)
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Nevada
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002-76219-NY
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87-0564462
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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3355 Bee Caves Road, Suite 608
Austin, Texas 78746
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(Address of principal executive offices)
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(512) 347-7300
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(Registrant's telephone number, including area code)
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Not Applicable
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(Former name or former address, if changed since last report.)
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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:
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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 Amendment to a Material Definitive Agreement.
As previously reported on August 24, 2017, Victory Energy Corporation (the “Company”) entered into a loan agreement (the “Loan Agreement”) with Visionary Private Equity Group I, LP, a Missouri limited partnership (“VPEG”) on August 21, 2017, pursuant to which VPEG loaned $500,000 to the Company. Such loan is evidenced by a secured convertible original issue discount promissory note (the “Note”) issued by the Company to VPEG on August 21, 2017. The Note reflects an original issue discount of $50,000 such that the principal amount of the VPEG Note is $550,000, notwithstanding the fact that the loan is in the amount of $500,000. The Note does not bear any interest in addition to the original issue discount; provided that upon the occurrence of an event of default (as defined in the Note), interest upon the unpaid principal amount shall begin to accrue at a rate equal to the lesser of (i) eight percent (8%) per annum or (ii) the maximum interest rate allowed from time to time under applicable law. The Note was to mature on September 1, 2017 and is secured by a security interest in all of the Company’s assets. VPEG has the right, exercisable at any time prior to payment in full, to convert all or any portion of the principal amount then outstanding, plus all accrued but unpaid interest, into shares of the Company’s common stock at a conversion price equal to $0.04 per share, subject to adjustment.
On October 11, 2017, the Company and VPEG entered into an amendment to the Loan Agreement and Note (the “Amendment”), pursuant to which the parties agreed to (i) increase the loan amount to $565,000, (ii) increase the principal amount of the Note to $621,500, reflecting an original issue discount of $56,500 and (iii) extend the maturity date to November 30, 2017.
The foregoing summary of the terms and conditions of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment filed as an exhibit to this report.
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation of an Off-Balance Sheet Arrangement of a Registrant.
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The information set forth under Item 1.01 regarding the Note and the Amendment is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 regarding the issuance of the Note as amended by the Amendment is incorporated by reference into this Item 3.02. The issuance of the Note is being made in reliance upon an exemption from registration provided under Section 4(a)(2) of the Securities Act of 1933, as amended.
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Item 9.01
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Financial Statements and Exhibits.
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(d) Exhibits
The following exhibits are filed herewith:
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Exhibit No.
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Description of Exhibit
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10.1
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Loan Agreement, dated August 21, 2017, between Visionary Private Equity Group I, LP and Victory Energy Corporation (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed on August 24, 2017)
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10.2
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Secured Convertible Original Issue Discount Promissory Note issued by Victory Energy Corporation to Visionary Private Equity Group I, LP on August 21, 2017 (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed on August 24, 2017)
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10.3
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Amendment No. 1 to Secured Convertible Original Issue Discount Promissory Note and to Loan Agreement, dated October 11, 2017
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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.
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VICTORY ENERGY CORPORATION
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Date: October 17, 2017
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/s/ Kenneth Hill
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Name: Kenneth Hill
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Title: Chief Executive Officer
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EXHIBIT INDEX
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Exhibit No.
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Description of Exhibit
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Loan Agreement, dated August 21, 2017, between Visionary Private Equity Group I, LP and Victory Energy Corporation (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed on August 24, 2017)
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Secured Convertible Original Issue Discount Promissory Note issued by Victory Energy Corporation to Visionary Private Equity Group I, LP on August 21, 2017 (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed on August 24, 2017)
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Amendment No. 1 to Secured Convertible Original Issue Discount Promissory Note and to Loan Agreement, dated October 11, 2017
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AMENDMENT NO. 1 TO
SECURED CONVERTIBLE
ORIGINAL ISSUE DISCOUNT PROMISSORY NOTE
AND TO LOAN AGREEMENT
Effective on October 11, 2017 (the “
Effective Date
”), each of (i) the Secured Convertible Original Issue Discount Promissory Note, dated August 21, 2017, issued by
VICTORY ENERGY CORPORATION
to
VISIONARY PRIVATE EQUITY GROUP I, LP
in the principal amount of $550,000 (the “
Note
”), and (ii) the Loan Agreement, dated August 21, 2017 by and between
VICTORY ENERGY CORPORATION
and
VISIONARY PRIVATE EQUITY GROUP I, LP
(the “
Loan Agreement
”), are hereby amended as follows:
1.
Increase in Principal Amount
. The principal amount of the Note is hereby increased by Seventy-One Thousand, Five Hundred Dollars ($71,500), resulting in an increase in the principal amount of the Note to Six Hundred Twenty-One Thousand, Five Hundred Dollars ($621,500).
2.
Increase in Loan Amount.
The loan amount of the Note is hereby increased by Sixty-Five Thousand Dollars ($65,000), resulting in an increase in the loan amount of the Note to Five Hundred Sixty-Five Thousand Dollars ($565,000).
3.
Original Issue Discount
. The Note, as amended by this Amendment No. 1 to Secured Convertible Promissory Note and Loan Agreement, is being issued at an original issue discount of Fifty-Six Thousand, Five Hundred Dollars ($56,500).
4.
Extension of Maturity Date
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The Maturity Date is extended to November 30, 2017; provided, however, that the Maturity Date shall be accelerated if Borrower raises capital in an amount sufficient to repay the Principal Amount and all other amounts due under the Loan.
5.
Option to Loan Additional Amounts
. The Lender shall have the option, but not the obligation, to loan to the Borrower up to an additional $250,000 on the terms specified in the Note and Loan Agreement. If the Lender elects to loan additional amounts to the Borrower it shall deliver to the Borrower a written notice that indicates (a) the amount of the additional loan, (b) the new principal amount of the Note, (c) the new loan amount, and (d) the new aggregate original issue discount amount. Such notice, after funding of the additional loan amount, shall automatically, and without any action on the party of the Borrower or the Lender, be deemed to be an amendment to the Note and Loan Agreement that reflects the terms described in the Lender’s written notice. The Lender’s written notice shall be evidence of the additional loan amount absent manifest error.
6.
Ratification of Remaining Provisions
. Except as expressly set forth herein, all of the provisions of the Note and the Loan Agreement shall remain in full force and effect.
7.
IN WITNESS WHEREOF, the undersigned has caused this Amendment No. 1 to Secured Convertible Original Issue Discount Promissory Note and to Loan Agreement to be executed by its duly authorized officers on the Effective Date.
VISIONARY PRIVATE EQUITY GROUP I, LP,
BY: VISIONARY PE GP I, LLC,
its General Partner
By:
/s/ Ronald Zamber
Name: Ronald Zamber
Title: Senior Managing Director
VICTORY ENERGY CORPORATION
By:
/s/ Kenneth Hill
Name: Kenneth Hill
Title: Chief Executive Officer
CONSENT OF ARMACOR
The undersigned, on behalf of Armacor Victory Ventures, LLC, consents to the foregoing amendment to the Loan Agreement and Note which increases the principal amount of the Note as described above.
ARMACOR VICTORY VENTURES, LLC
By:
/s/ Rick Salas
Rick Salas, President