PEDEVCO CORP (Form: 8-K, Received: 03/04/2019 17:23:07)

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): March 1, 2019

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 March 1, 2019, PEDEVCO Corp. (the “Company”, “PEDEVCO”, “we” and “us”) and SK Energy LLC (“SK Energy”), a company wholly-owned by our Chief Executive Officer and director, Dr. Simon Kukes, entered into a First Amendment to Promissory Note (the “Amendment”) which amended the promissory note, in the principal amount of $7,700,000, issued by the Company to SK Energy on June 25, 2018 (the “June 2018 Note”), to provide SK Energy the right, at any time, at its option, to convert the principal and interest owed under such June 2018 Note, into shares of our common stock, at a conversion price of $2.13 per share. The June 2018 Note previously only included a conversion feature whereby the Company had the option to pay quarterly interest payments on the June 2018 Note in shares of Company common stock instead of cash, at a conversion price per share calculated based on the average closing sales price of the Company’s common stock on the NYSE American for the ten trading days immediately preceding the last day of the calendar quarter immediately prior to the quarterly payment date.

In addition, on March 1, 2019, the holders of $1,500,000 in aggregate principal amount of Convertible Promissory Notes issued by the Company on August 1, 2018 (the “August 2018 Notes”) sold their August 2018 Notes at face value plus accrued and unpaid interest through March 1, 2019 to SK Energy (the “August 2018 Note Sale”). Holders which sold their August 2018 Notes pursuant to the August 2018 Note Sale to SK Energy include an executive officer of SK Energy ($200,000 in principal amount of August 2018 Notes); a trust affiliated with John J. Scelfo, a director of the Company ($500,000 in principal amount of August 2018 Notes); an entity affiliated with Ivar Siem, a director of the Company, and J. Douglas Schick the President of the Company ($500,000 in principal amount of August 2018 Notes); and Harold Douglas Evans, a director of the Company ($200,000 in principal amount of August 2018 Notes).

Following the August 2018 Note Sale, the Company’s sole issued and outstanding debt was the (i) $7,700,000 in principal, plus accrued interest, under the June 2018 Note held by SK Energy, (ii) an aggregate of $23,500,000 in principal, plus accrued interest, under the August 2018 Notes held by SK Energy, and (iii) $100,000 in principal, plus accrued interest, under an August 2018 Note held by an unaffiliated holder (the “Unaffiliated Holder”).

Immediately following the effectiveness of the Amendment and August 2018 Note Sale, on March 1, 2019, SK Energy and the Unaffiliated Holder elected to convert all $31,300,000 of outstanding principal and an aggregate of $1,462,818 of accrued interest under the June 2018 Note and August 2018 Notes into common stock of the Company at a conversion price of $2.13 per share (the “Conversion Price” and the “Conversions”) as set forth in the June 2018 Note, as amended, and the August 2018 Notes (collectively, the “Notes”), into an aggregate of 15,381,605 shares of restricted common stock of the Company (the “Conversion Shares”). These Conversion Shares represent approximately 34.0% of the Company’s now 45,288,828 shares of issued and outstanding Company common stock after giving effect to the Conversions, with Dr. Kukes deemed to beneficially own approximately 37,296,662 shares of common stock, representing approximately 82.4% of the Company’s issued and outstanding common stock.

As a result of the Conversions, the Company now has no debt on its balance sheet.

* * * * * * * * *

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

We claim an exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (“Securities Act”), for the conversion of the June 2018 Note and August 2018 Notes and the issuance of shares of restricted common stock to SK Energy and the Unaffiliated Holder in connection therewith, each as described above, as the common stock was exchanged by us with SK Energy and the Unaffiliated Holder (our existing security holders) in transactions where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange.

Item 7.01 Regulation FD Disclosure.

The Company issued a press release on March 4, 2019 regarding the matters discussed in Item 1.01 and 3.02 above. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description

10.1*		First Amendment to Promissory Note, dated March 1, 2019, entered into by and between PEDEVCO Corp. and SK Energy LLC
99.1**		Press Release dated March 4, 2019

* Filed herewith.

** Furnished 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: March 4, 2019

EXHIBIT INDEX

Exhibit No.		Description

10.1*		First Amendment to Promissory Note, dated March 1, 2019, entered into by and between PEDEVCO Corp. and SK Energy LLC
99.1**		Press Release dated March 4, 2019

* Filed herewith.

** Furnished herewith.

Exhibit 10.1

FIRST AMENDMENT TO PROMISSORY NOTE

THIS FIRST AMENDMENT TO PROMISSORY NOTE (the “First Amendment”) is executed and effective as of March 1, 2019 (the “Effective Date”) by and between PEDEVCO CORP., a Texas corporation (“Company”), and SK Energy, LLC, a Delaware limited liability company (“Holder”). Capitalized terms used below and otherwise not defined herein shall have the meanings given to them in the Note (as defined below).

W I T N E S S E T H

WHEREAS, on June 25, 2018, the Company issued a promissory note with a principal amount of $7,700,000 to the Holder1 (the “Note”);

WHEREAS, the Note includes a conversion feature that provides the Holder with the option to receive quarterly interest payments as Company common stock instead of cash, at a conversion price per share calculated based on the average closing sales price of the Company’s common stock on the NYSE American for the ten trading days immediately preceding the last day of the calendar quarter immediately prior to the quarterly payment date (the “Conversion Terms”);

WHEREAS, the Company and the Holder desire to amend the Note to fix the conversion price of the Note at $2.13 per share and permit conversion of all principal and accrued and unpaid interest under the Note at any time at the option of the Holder; and

WHEREAS, the Note may be amended and any term thereof waived upon the approval of the Company and the written consent of the Holder.

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. Amendment of Note to Add New Section 4(j). The Note is hereby amended to add new Section 4(j) as follows:

“4(j) Notwithstanding anything to the contrary herein, at any time prior to the payment in full by the Borrower of this Note, Holder shall have the option, by providing written notice to the Company, to convert the Principal (or any portion thereof) and accrued Interest (or any portion thereof), into Common Stock, at the Conversion Price (the “Holder Conversion Option”), which shall apply for the conversion of Principal and all accrued Interest (each a “Conversion”). The “Conversion Price” shall equal $2.13 per share.”

2. 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 First Amendment, 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 by the First Amendment and hereby. Effective upon the Effective Date, the Note shall automatically represent and evidence the Note as amended to date, and it shall not be necessary for the Company to provide the Holder a replacement or amended Note evidencing the provisions hereof.

1 https://www.sec.gov/Archives/edgar/data/1141197/000165495418006988/ped_ex101.htm

First Amendment to Promissory Note

Page 1 of 3

3. Consideration. Each of the parties agrees and confirms by signing below that they have received valid consideration in connection with this First Amendment and the transactions contemplated herein.

4. Effective Time. This First Amendment shall be deemed effective from and after due execution and delivery by each party hereto, as of the Effective Date.

5. 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 First Amendment and the transactions contemplated herein.

6. Counterparts. This First Amendment may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this First Amendment or any counterpart hereof to produce or account for any of the other counterparts. A copy of this First Amendment 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 First Amendment shall be effective as an original for all purposes.

[Remainder of page left intentionally blank. Signature page follows.]

First Amendment to Promissory Note

Page 2 of 3

IN WITNESS WHEREOF, the parties hereto, have caused this First Amendment to Promissory Note to be duly executed and delivered as of the date first written above to be effective as of the Effective Date.

PEDEVCO CORP.

/s/ Clark R. Moore

Clark R. Moore

Executive Vice President and General Counsel

HOLDER:

SK ENERGY, LLC

By: /s/ Simon G. Kukes

Name: Simon G. Kukes

Title: CEO and Owner

First Amendment to Promissory Note

Page 3 of 3

Exhibit 99.1

Pacific Energy Development Announces Conversion of Additional $32.7 Million of Debt into Equity

Company Now Debt-Free

Houston, Texas, March 4, 2019 – PEDEVCO Corp. d/b/a Pacific Energy Development (NYSE American: PED) (the “Company”) announced today that it has converted all of its remaining $32.7 million in debt into common stock of the Company at a price of $2.13 per share, and is now debt-free. Substantially all of the Company’s debt was held by SK Energy LLC, an investment firm owned by Dr. Simon Kukes, the Company’s Chief Executive Officer.

John J. Scelfo, Chairman of the Company’s Board of Directors, commented, “We are pleased that SK Energy has decided to convert the remainder of its debt years earlier than its maturity date at a conversion price in excess of the current market price, which not only saves the Company millions of dollars in interest, but delivers the Company a debt-free balance sheet. With over $10 million in free cash and a strong balance sheet, we are well-positioned to continue our development plans and pursue additional accretive acquisitions in the Permian Basin to the benefit of our shareholders.”

About Pacific Energy Development (PEDEVCO Corp.)

PEDEVCO Corp, d/b/a Pacific Energy Development (NYSE American: PED), is a publicly-traded energy company engaged in the acquisition and development of strategic, high growth energy projects in the United States. The Company’s principal assets are its San Andres Asset located in the Northwest Shelf of the Permian Basin in eastern New Mexico, and its D-J Basin Asset located in the D-J Basin in Weld and Morgan Counties, Colorado. Pacific Energy Development is headquartered in Houston, Texas.

Cautionary Statement Regarding Forward Looking Statements

All statements in this press release that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Acts”). In particular, when used in the preceding discussion, the words "estimates," "believes," "hopes," "expects," "intends," "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act, and are subject to the safe harbor created by the Act. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of the Company's control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 and subsequently filed Quarterly Reports on Form 10-Q under the heading "Risk Factors". The Company operates in a highly competitive and rapidly changing environment, thus new or unforeseen risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. The Company disclaims any intention to, and undertakes no obligation to, update or revise any forward-looking statements, except as otherwise required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by the Company. Readers are also urged to carefully review and consider the other various disclosures in the Company's public filings with the Securities Exchange Commission (SEC).

Contacts

Pacific Energy Development

1-855-733-3826

PR@pacificenergydevelopment.com