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EX-10.2 - FORM OF WARRANT FOR THE PURCHASE OF COMMON STOCK - PEDEVCO CORP | ped_ex102.htm |
EX-10.1 - SERIES B CONVERTIBLE PREFERRED STOCK AND WARRANT SUBSCRIPTION AGREEMENT - PEDEVCO CORP | ped_ex101.htm |
8-K - CURRENT REPORT - PEDEVCO CORP | ped_8k.htm |
EXHIBIT 99.1
Pacific Energy Development Announces Entry into Significant Equity
Funding and Company Restructuring Agreement
August
18, 2017 – PEDEVCO Corp. d/b/a Pacific Energy Development
(NYSE American: PED) (the “Company”), announced today
that it has entered into a definitive subscription agreement to
receive $12 million in equity financing as part of the previously
announced company restructuring. A Hong Kong investment group (the
“Equity Investors”) led by investor Dragon Gem Limited
has agreed to the terms of the restructuring whereby approximately
$61 million of the Company’s debt will be converted into
common stock of the Company, leaving only the current $5.8 million
of senior secured debt but with a lower interest rate, no sweep or
payments due until May, 2019. Both the Equity Investors and
converting note holders will receive Series B Preferred Stock for
their investment at closing and, upon receipt of Company
shareholder and NYSE American additional listing approval, the
Series B Preferred Stock will be convertible into common stock of
the Company, with the Company’s issued and outstanding
capitalization following receipt of such approvals expected to be
held approximately as follows: 11% by existing Company
shareholders, 33% by converting Company debt holders, 51% by the
Equity Investors, and 5% by members of the Company’s
management team.
Closing
is subject to numerous conditions, including, but not limited to,
receipt of Company Board and NYSE American approval, finalization
and entry into debt conversion and repayment agreements with senior
lenders and restructuring of the terms of the surviving senior
debt, the terms of both of which have been substantially agreed
upon, and entry into voting agreements necessary to secure
shareholder approval of the transactions. There can be no assurance
that such transactions will be completed as currently contemplated
and agreed.
As
previously disclosed, upon successful consummation of the
transactions, the Company is expected to emerge with a strong
balance sheet with an estimated $70 million increase in
stockholders’ equity including $12 million in cash and only
approximately $6 million in debt. If the transactions are
consummated as planned, the Company believes it will be properly
capitalized and positioned to initially grow through execution of
its development plan to increase cash flow as well as immediately
pursue the common goal of the Equity Investors and management to
grow the Company through accretive acquisitions of oil and gas
properties and operating companies, some of which are already in
discussions. The existing members of management will remain in
place to lead the Company, as will the majority of the existing
Board. The Equity Investors will have the right to appoint up to
three members to an expanded six-member Board of Directors, with
two of those appointments required to be deemed independent by the
NYSE American Exchange.
Mr.
Michael Peterson, the President and Chief Executive Officer of the
Company, commented, "We are very pleased to be able to announce
entry into the definitive subscription agreement with our new
equity investor and provide the market with greater detail
regarding these transformative transactions we have been working on
with the investor and our lenders since the end of 2016. It has
been an arduous and long process getting all parties to where we
are today with a binding subscription agreement in hand and closing
in sight, and we look forward to bringing these transactions to a
successful close that we believe will be very favorable to all
parties, our current shareholders, our note holders, and our new
equity investors.”
“We
believe these transactions will transform the Company in a very
positive way,” Mr. Peterson continued. “These
transactions will substantially increase stockholders’
equity, remove most of the debt burden on the Company, and provide
the development capital needed to execute the development plan of
our current assets, generate cash flow, and to seek accretive
acquisitions, all of which are anticipated to significantly
increase the value of our shares to the benefit of our common
equity shareholders. These transactions will also help unlock the
great development potential of our oil and gas assets and brings in
an investor who is committed to grow the Company through both
development and acquisition and who has the access to capital to do
so. We are very excited to move forward and are now fully-focused
on working with our lenders, the new investor, and the NYSE
American Exchange to successfully close by the September 30, 2017
target date.”
Additional information regarding the subscription agreement and the
transactions contemplated in connection therewith is set forth in a
Current Report on Form 8-K filed by the Company today with the
Securities and Exchange Commission.
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, including
shale oil and gas assets, in the United States. The Company’s
principal asset is its D-J Basin Asset located in the D-J Basin in
Colorado. Pacific Energy Development is headquartered in Danville,
California, with an operations office 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, 2016 and subsequently filed Quarterly Reports on Form 10-Q
under the heading "Risk Factors" and risks relating to: termination
of the subscription agreement and related transactions; failure to
come to agreement on certain matters which are contemplated by the
subscription agreement and related transactions; failure to obtain
shareholder approval as required by the subscription agreement and
related transactions; failure to convert, satisfy or otherwise
discharge the Company’s debt as required pursuant to the
Subscription Agreement; the failure to consummate or a delay in
consummating the proposed transaction for other reasons; the timing
to consummate the proposed transaction; the risk that a condition
to closing of the proposed transaction may not be satisfied; the
risk that a regulatory approval that may be required for the
proposed transaction is delayed, is not obtained, or is obtained
subject to conditions that are not anticipated; and the diversion
of management time on transaction-related issues. 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