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| EX-99.1 - PRESS RELEASE - PEDEVCO CORP | ped_ex991.htm |
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): July 11,
2018
001-35922
(Commission file number)
PEDEVCO CORP.
(Exact name of registrant as specified in its charter)
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Texas
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22-3755993
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(State or other jurisdiction of incorporation or
organization)
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(IRS Employer Identification No.)
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4125 Blackhawk Plaza Circle, Suite 201
Danville, California 94506
(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 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
(a)
On July
11, 2018, David Steinberg, who had served on the Board of Directors
of PEDEVCO Corp. (the “Company”,
“PEDEVCO”,
“we”
and “us”) since July 2015, as
the designee of the holders of the Company’s Series A
Convertible Preferred Stock, tendered his resignation as a member
of the Board of Directors, effective as of the same date. The
resignation was not due to a disagreement with the Company or in
connection with any matter relating to the Company’s
operations, policies or practices. Mr. Steinberg did not serve on
any committees of the Board of Directors at the time of his
resignation.
(b), (c) and (d)
Also on
July 11, 2018, the Board of Directors of the Company, pursuant to
the power provided to the Board of Directors by the Company’s
Bylaws, appointed Dr. Simon Kukes as the Chief Executive Officer of
the Company and as a member of the Board of Directors of the
Company and further appointed Mr. Ivar Siem and Mr. John J. Scelfo
as members of the Board of Directors (the “Appointees” and the
“Appointments”). Each of
the Appointments were approved effective July 12,
2018.
The
Board of Directors determined that Mr. Ivar Siem and Mr. John J.
Scelfo were “independent” as defined
in Section 803(A) of the NYSE American Company Guide.
Mr.
John J. Scelfo was also appointed to the Company’s Audit
Committee, replacing current Committee member Ms. Elizabeth Smith
on the Audit Committee, and the Company’s Compensation
Committee, replacing current Committee member Mr. Adam McAfee on
the Compensation Committee. In addition, Mr. Ivar Siem was
appointed Chairman, and Mr. Scelfo was appointed as a member, of
the Company’s Corporate Governance and Nominating Committee,
replacing current Committee members Ms. Smith and Mr. McAfee. The
Company also formed a new Finance Committee composed of Mr. Scelfo
as Chairman and Dr. Kukes as a Committee member, and a new
Operations Committee composed of Mr. Siem as Chairman and Dr. Kukes
as a Committee member, with both Committees reporting to the
Company’s Board of Directors.
Dr.
Kukes, Mr. Siem and Mr. Scelfo are not party to any material plan,
contract or arrangement (whether or not written) with the Company
and there are no arrangements or understandings between Dr. Kukes,
Mr. Siem or Mr. Scelfo and any other person pursuant to which they
were selected to serve as a director of the Company, nor are they a
participant in any related party transaction required to be
reported pursuant to Item 404(a) of Regulation S-K, except in
connection with Dr. Kukes, as discussed below under
“SK Energy
Transactions”).
There
are no family relationships between any director or executive
officer of the Company, including, but not limited to the
Appointees.
As a
result of the appointment of Dr. Kukes as Chief Executive Officer
of the Company as discussed above, the Company’s current
Chief Executive Officer, Frank C. Ingriselli, will step down as
Chief Executive Officer of the Company, effective July 12, 2018,
provided that Mr. Ingriselli will continue to serve as the
President and Chairman of the Company and advisor to the Chief
Executive Officer.
Biographical
information for Dr. Kukes, Mr. Siem and Mr. Scelfo is provided
below:
Dr. Simon Kukes, Age 72
Dr. Kukes is
an American citizen. Since April 2013, Dr. Kukes has served as the
principal of SK Energy LLC, a consulting company. Dr. Kukes
was the CEO at Samara-Nafta, a Russian oil company, partnering with
Hess Corporation; a U.S. based international oil company, from
January 2005 to April 2013. He was President and Chief Executive of
Tyumen Oil Company (TNK) from 1998 until its merger with British
Petroleum (BP) in 2003. He then joined Yukos Oil as chairman. He
also served as chief executive of Yukos from 2003 until June 2004.
In 1999, he was voted one of the Top 10 Central European Executives
by the Wall Street Journal Europe and in 2003 he was named by The
Financial Times and PricewaterhouseCoopers as one of the 64 most
respected business leaders in the world. Dr. Kukes has a primary
degree in Chemical Engineering from the Institute for Chemical
Technology, Moscow and a PhD in Physical Chemistry from the Academy
of Sciences, Moscow and was a Post-Doctoral Fellow of Rice
University, Houston, Texas. He is the holder of more than 130
patents and has published more than 60 scientific
papers.
2
Mr. Ivar Siem, Age 72
Mr.
Siem has broad experience from both the upstream and the service
segments of the oil and gas industry, has been the founder of
several companies, and has been involved in several roll-ups and
restructuring processes throughout his career. He currently serves
as the Chairman of American Resources, Inc., and as a Managing
Partner of its affiliated investment vehicle, Norexas, LLC, both
privately-held Houston, Texas-based companies active in oil and gas
investment, acquisition and development, and has served in that
capacity since 2013. Previously, Mr. Siem served as Chairman and
Chief Executive Officer of American Resources, Inc. (from 2013
through July 2017) and Chairman of Blue Dolphin Energy Company
(OTCQX: BDCO), a Houston, Texas-based independent refiner and
marketer of petroleum products (from 1990 to 2014). In 1999, Mr.
Siem acquired a small distressed public company, American Resources
Offshore, Inc. and worked with creditors and existing management to
achieve a voluntary reorganization. From 1995 to 2000, Mr. Siem
served as Chairman and interim CEO of DI Industries/Grey Wolf
Drilling while restructuring the company financially and
operationally. Through several mergers and acquisitions, the
company emerged as one of the leading land drilling contractors.
The company was subsequently acquired by Precision Drilling in
2008. From 1996 to 1997 Mr. Siem served as Chairman and CEO of
Seateam Technology ASA. Prior to Seateam, Mr. Siem held various
executive roles at multiple E&P and oil field service
companies. Mr. Siem started his career at Amoco working as an
engineer in various segments of upstream operations.
Mr.
Siem is currently on the Board of Directors at Siem Industries,
Inc., Frupor SA, the Drillmar Energy Group and Petrolia Energy
Corporation, (OTCQB: BBLS) and has served on the board of several
privately held and publicly traded companies including Avenir, ASA
and DSND ASA. Siem Industries is a holding company which invests in
shipping and offshore oil and gas construction services. Frupor SA,
is a Portuguese agricultural business, which Mr. Siem cofounded
with his brother O. M. Siem in 1988.
Mr.
Siem holds a Bachelor of Science in Mechanical Engineering with a
minor in Petroleum from the University of California, Berkeley and
an Executive MBA from the Amos Tuck School of Business, Dartmouth
University.
Mr. John J. Scelfo, Age
60
Mr. Scelfo brings nearly 40 years of experience in
oil and gas management, finance and accounting to the Board.
Mr. Scelfo currently serves as principal and owner of JJS
Capital Group, a Fort
Lauderdale, Florida-based investment company that he formed in
April 2014. Prior to forming JJS Capital, Mr. Scelfo served
as Senior Vice President, Finance and Corporate Development (from
February 2004 to March 2014), and Chief Financial Officer,
Worldwide Exploration & Producing (from April 2003 to January
2004) of New York, New York-based Hess Corporation,
a large integrated
oil and gas company, where he served
as one of eight members of the company’s Executive Committee
and was responsible for the company’s corporate treasury,
strategy and upstream commercial activities. Prior to joining
Hess Corporation, Mr. Scelfo served as Executive Vice President and
Chief Financial Officer of Sirius Satellite Radio (from April 2001
to March 2003), as Vice
President and Chief Financial Officer of Asia Pacific &
Japan for Dell Computer
(November 1999 to March 2001), and in various roles of increasing
responsibility with Mobil Corporation (from June 1980 to October
1999).
Mr.
Scelfo holds a Bachelor’s Degree and an M.B.A. from Cornell
University. He was awarded Cornell ILR School’s Alpern
Award given to those who “have been exceedingly generous in
their support of the ILR School in general and in support of
Off-Campus Credit Programs in particular”.
SK Energy Transactions
As
described in greater detail in the Current Reports on Form 8-K
filed by the Company with the Securities and Exchange Commission on
June 26, 2018 and July 3, 2018:
3
On June 26, 2018, the Company borrowed $7.7
million from SK Energy LLC (“SK
Energy”), which amount
was evidenced by a Promissory Note dated June 25, 2018, in the
amount of $7.7 million (the “SK Energy
Note”). SK Energy is 100%
owned and controlled by Dr. Kukes. The SK Energy Note accrues
interest monthly at 8% per annum, payable quarterly (beginning
October 15, 2018), in either cash or shares of common stock (at the
option of the Company), or with the consent of SK Energy, such
interest may be accrued and capitalized. Additionally, in the event
that the Company is prohibited from paying the interest payments
due on the SK Energy Note in cash pursuant to the terms of its
senior debt and/or the requirement that the Company obtain
shareholder approval for the approval of issuance of shares of
common stock in lieu of interest due under the SK Energy Note due
to the Share Cap (described and defined below), such interest will
continue to accrue until such time as the Company can either pay
such accrued interest in cash or stock.
If interest on the SK Energy Note is paid in
common stock, SK Energy will be due that number of shares of common
stock as equals the amount due divided by the average of the
closing sales prices of the Company’s common stock for the
ten trading days immediately preceding the last day of the calendar
quarter prior to the applicable payment date, rounded up to the
nearest whole share of common stock (the “Interest
Shares”).
The
SK Energy Note is due and payable on June 25, 2021, but may be
prepaid at any time, without penalty. Other than in connection with
the Interest Shares, the principal amount of the SK Energy Note is
not convertible into common stock of the Company. The SK Energy
Note contains standard and customary events of default and upon the
occurrence of an event of default, the amount owed under the SK
Energy Note accrues interest at 10% per annum.
As additional
consideration for SK Energy agreeing to the terms of the SK Energy
Note, the Company issued SK Energy 600,000 shares of common stock
(the “Loan
Shares”).
The SK Energy Note includes a share issuance
limitation preventing the Company from issuing Interest Shares
thereunder, if such issuance, together with the number of Loan
Shares, plus such number of Interest Shares issued previously, as
of the date of such new issuance, totals more than 19.99% of the
Company’s outstanding shares of common stock as of June 25,
2018 (i.e., 1,455,023 shares) (the “Share
Cap”), unless the Company
receives shareholder approval for such issuances in accordance with
applicable NYSE American rules and regulations.
As part of the same transaction and as a required
condition to closing the sale of the SK Energy Note, SK Energy
entered into a Stock Purchase Agreement with Golden Globe Energy
(US), LLC (“GGE”), the then holder of our outstanding
66,625 shares of Series A Convertible Preferred Stock (convertible
pursuant to their terms into 6,662,500 shares of the
Company’s common stock – approximately 47.6% of the
Company’s outstanding shares post-conversion), pursuant to
which on June 25, 2018, SK Energy purchased, for $100,000, all of
the Series A Convertible Preferred Stock).
On
July 3, 2018, SK Energy converted all of the Series A Convertible
Preferred Stock shares, pursuant to their terms, into 6,662,500
shares of the Company’s common stock, representing 45.8% of
the Company’s then outstanding common stock, and resulting in
approximately 14,541,254 shares of the Company’s common stock
being issued and outstanding. The issuance was deemed a change of
control under applicable NYSE American rules and regulations,
provided that such issuance was previously approved at the 2015
annual meeting of shareholders of the Company held on October 7,
2015. The conversion transaction constituted a change in control of
the Company under applicable NYSE American rules and
regulations. The shares of common stock issued upon conversion
of the Series A Convertible Preferred Stock, together with the
600,000 shares of common stock issued to SK Energy in connection
with its entry into a $7.7 million promissory note on June 25,
2017, totaled 49.9% of our currently outstanding shares of common
stock. As such, SK Energy holds, and Dr. Kukes is deemed to
beneficially own, 49.9% of our outstanding shares of common
stock.
4
(e)
Dr.
Kukes has agreed to receive an annual salary of $1 as his
compensation for serving as Chief Executive Officer of the Company
and as a member of the Board of Directors and to not charge the
Company for any business expenses he incurs in connection with such
positions.
The
Board of Directors, on July 11, 2018, confirmed and acknowledged
the continuance of all the terms of Mr. Ingriselli’s
employment agreement effective June 1, 2018 (as previously
disclosed in the Current Report on Form 8-K filed by the Company
with the Securities and Exchange Commission on May 11, 2018), other
than his title changing from Chief Executive Officer and President
of the Company, to just President. Mr. Ingriselli continues to
remain President and Chairman of the Company, and as an advisor to
the Company’s Chief Executive Officer.
On
July 11, 2018, immediately prior to the resignation of Mr.
Steinberg, the Board of Directors of the Company agreed to
accelerate the vesting of 150,000 shares of common stock granted to
him on December 28, 2017, that would have otherwise vested on July
15, 2018, assuming he was still serving as a member of the Board of
Directors of the Company on such date.
Additionally, on
July 11, 2018, the Board of Directors granted restricted stock
awards to Messrs. Frank C. Ingriselli (President) and Clark R.
Moore (Executive Vice President, General Counsel and Secretary), of
60,000 and 50,000 shares, respectively, under the Company’s
Amended and Restated 2012 Equity Incentive Plan. The restricted
stock awards vest as follows: 100% on the six (6) month anniversary
of the grant date, in each case subject to the recipient of the
shares being an employee of or consultant to the Company on such
vesting date, and subject to the terms and conditions of a
Restricted Shares Grant Agreement, as applicable, entered into by
and between the Company and the recipient.
Item 7.01 Regulation FD Disclosure.
The Company shall issue a press release on July
12, 2018 regarding the Appointments. A copy of the press release is furnished
herewith as Exhibit
99.1.
Item 9.01 Financial Statements and
Exhibits.
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PEDEVCO
Corp. Amended and Restated 2012 Equity Incentive Plan (Filed on
December 28, 2017, as Exhibit 4.1 to the Company’s
Registration on Form S-8 and incorporated herein by reference)(File
No. 333-222335)
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PEDEVCO
Corp. 2012 Equity Incentive Plan Form of Restricted Shares Grant
Agreement (Filed on October 31, 2013, as Exhibit 4.2 to the
Company’s Registration on Form S-8 and incorporated herein by
reference)(File No. 333-192002)
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$7.7
Million Promissory Note between PEDEVCO Corp., as borrower and SK
Energy LLC, as lender, dated June 25, 2018 (Filed as Exhibit 10.1
to the Current Report on Form 8-K filed with the Securities and
Exchange Commission on June 26, 2018, and incorporated herein by
reference)(File No. 001-35922)
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Employment
Agreement, dated May 10, 2018, by and between Frank C. Ingriselli
and Pacific Energy Development Corp. (Filed as Exhibit 10.1 to the
Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 11, 2018, and incorporated herein by
reference)(File No. 001-35922)
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99.1*
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Press release
dated July 12, 2018
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Furnished herewith.
5
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.
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PEDEVCO CORP.
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Date: July
11, 2018
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By:
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/s/ Frank
C. Ingriselli
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Frank
C. Ingriselli
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President
and Chief Executive Officer
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6
EXHIBIT INDEX
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PEDEVCO Corp.
Amended and Restated 2012 Equity Incentive Plan (Filed on December
28, 2017, as Exhibit 4.1 to the Company’s Registration on
Form S-8 and incorporated herein by reference)(File No.
333-222335)
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PEDEVCO Corp. 2012
Equity Incentive Plan Form of Restricted Shares Grant Agreement
(Filed on October 31, 2013, as Exhibit 4.2 to the Company’s
Registration on Form S-8 and incorporated herein by reference)(File
No. 333-192002)
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$7.7 Million
Promissory Note between PEDEVCO Corp., as borrower and SK Energy
LLC, as lender, dated June 25, 2018 (Filed as Exhibit 10.1 to the
Current Report on Form 8-K filed with the Securities and Exchange
Commission on June 26, 2018, and incorporated herein by
reference)(File No. 001-35922)
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Employment
Agreement, dated May 10, 2018, by and between Frank C. Ingriselli
and Pacific Energy Development Corp. (Filed as Exhibit 10.1 to the
Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 11, 2018, and incorporated herein by
reference)(File No. 001-35922)
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99.1*
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Press release dated
July 12, 2018
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*
Furnished herewith.
7