8-K

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: February 4, 2016

DATE OF EARLIEST EVENT REPORTED: January 29, 2016

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.

On January 29, 2016, PEDEVCO Corp. (the “Company”), entered into a Letter Agreement (the “Letter Agreement”) with Senior Health Insurance Company of Pennsylvania (“SHIP”) (as successor-in-interest to BRe BCLIC Primary), BRe BCLIC Sub, BRe WINIC 2013 LTC Primary, BRe WNIC 2013 LTC Sub, HEARTLAND Bank, and RJ Credit LLC (“RJC”) (collectively, the “Lenders”), and BAM Administrative Services LLC (the “Agent”), as agent for the Lenders. The Lenders are parties to that certain Note Purchase Agreement, dated March 7, 2014 (as amended and modified to date, the “NPA”), by and among the Company, the Lenders and the Agent, pursuant to which the Company issued Senior Secured Promissory Notes to each of the Lenders (collectively, the “Senior Notes”), and RJC is also a party to that certain Note and Security Agreement, dated April 10, 2014, as amended on February 23, 2015, issued by the Company to RJ Credit LLC (the “RJC Junior Note,” and together with the Senior Notes, the “Notes”).

The Letter Agreement extends by one (1) month, through February 29, 2016, the deferral of the payment of interest and principal due under the Notes (the “Deferral Extension”), which payments were originally delayed for a period of six (6) months from August 1, 2015 through January 31, 2016 pursuant to those certain Letter Agreements entered into with the Lenders on August 28, 2015 (the “Original Deferral Agreements”), as more fully described in the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange on September 1, 2015. The purpose of the Deferral Extension is to provide the Company with the financial resources and runaway it believes it needs to fully-focus upon and consummate the merger with GOM Holdings, LLC (“GOM”) as contemplated by that certain Agreement and Plan of Merger and Reorganization, dated December 29, 2015, entered into by the Company and GOM (the “GOM Agreement”), which merger the Company is targeting to close no later than February 29, 2016. The closing of the transactions contemplated by the GOM Agreement is subject to various closing conditions, described in greater detail in the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on December 30, 2015, and no assurance can be made that the transactions contemplated by the GOM Agreement will be completed.

Specifically, pursuant to the Letter Agreement, (i) all Lenders agreed to further defer until the maturity date of their Senior Notes the mandatory principal payments that would otherwise be due and payable by the Company to them on payment dates occurring through February 29, 2016, (ii) HEARTLAND Bank agreed to change the next scheduled semi-annual interest payment due from February 1, 2016 to March 1, 2016 (with interest due and payable thereafter on a semi-annual basis) and to change the next mandatory principal repayment due date to September 3, 2016, and the Company agreed to place an amount equal to 1/6^th of the semi-annual principal and interest payments due into a sinking fund which the Company shall pay to HEARTLAND Bank every six months when due and owing, and (iii) SHIP, BRe BCLIC Sub, BRe WINIC 2013 LTC Primary, BRe WNIC 2013 LTC Sub, and RJC agreed to (a) defer until the maturity date of their Senior Notes and the RJC Junior Note all of the interest payments that would otherwise be due and payable by the Company to them in February 2016; (b) return the interest rate under each of their Senior Notes to 15% per annum (compared to 17% annum pursuant to the Original Deferral Agreements), and the interest rate under the RJC Junior Note to 12% cash pay per annum, effective January 31, 2016; and (c) delay the issuance of any “Subsequent Warrants” (as defined in the Original Deferral Agreements) issuable pursuant thereto to within 30 days of March 1, 2016, subject to NYSE MKT additional listing approval.

In addition, on the Monday of each week commencing on February 1, 2016 and thereafter, the Company agreed to deliver to the Agent: (a) an accounts receivable and accounts payable listing as of the close of business of the preceding week; (b) collection reports for the preceding week; (c) a compliance report with respect to the Budget which includes a comparison of all categories in the Budget with actual levels of expenditures and revenues generated for the preceding week together with an explanation of all variances from the Budget; and (d) a listing of all the Company’s and its subsidiaries’ (collectively, the “PEDEVCO Group Companies”) checks outstanding as of the end of the preceding week. For purposes of the Letter Agreement, the term, “Budget” means the PEDEVCO Group Companies’ budget for the ten (10) week period covered thereby in a form and substance satisfactory to the Agent, as such Budget may be modified, from time to time so long as such modifications have been agreed to by the Company and the Lenders in their reasonable discretion. Furthermore, the Company agreed that at no time shall the PEDEVCO Group Companies’ disbursements exceed by more than 5% those amounts set forth in the Budget, and the Company agreed further to provide to the Agent a copy of (i) any selling memoranda (and any other similar marketing materials) for or relating to the sale of all or any equity or asset of any PEDEVCO Group Company (such sale, a “PEDEVCO Sale”), (ii) any loan memoranda (and any other similar marketing materials) for or relating to the borrowing of money by any PEDEVCO Group Company (such borrowing transaction, an “Additional PEDEVCO Loan”) or (iii) any executed letter of intent, purchase agreement, merger agreement or similar agreement relating to any PEDEVCO Sale or Additional PEDEVCO Loan, in each case within two (2) business days after (x) in the case of preceding clause (i) or (ii), the final preparation thereof or (y) in the case of preceding clause (iii), execution thereof by the parties thereto.

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

ITEM 9.01   FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

Exhibit No.	Description
10.1*	Letter Agreement, dated January 29, 2016, by and among PEDEVCO Corp., BAM Administrative Services LLC, Senior Health Insurance Company of Pennsylvania, BRE BCLIC Sub, BRE WNIC 2013 LTC Primary, BRE WNIC 2013 LTC Sub, HEARTLAND Bank, and RJ Credit LLC

* Filed herewith. 

Important Information

In connection with the proposed business combination between PEDEVCO Corp. (“PEDEVCO”) and GOM Holdings, LLC (“GOM”), PEDEVCO currently intends to file a proxy statement with the SEC to seek approval for the Shareholder Approval defined and described in the GOM Agreement. This communication is not a substitute for any proxy statement or other document PEDEVCO may file with the SEC in connection with the Shareholder Approval. Prospective investors are urged to read the proxy statement when filed as it will contain important information. Any definitive proxy statement(s) (if and when available) will be mailed to stockholders of PEDEVCO. Prospective investors may obtain free copies of the proxy statement, when filed, as well as other filings containing information about PEDEVCO, without charge, at the SEC’s website (www.sec.gov). Copies of PEDEVCO’s SEC filings may also be obtained from PEDEVCO without charge at PEDEVCO’s website (www.pacificenergydevelopment.com) or by directing a request to PEDEVCO at (855) 733-3826.

Participants in Solicitation

PEDEVCO and its directors and executive officers and other members of management and employees are potential participants in the solicitation of proxies in respect of the Shareholder Approval. Information regarding PEDEVCO’s directors and executive officers is available in PEDEVCO’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 31, 2015 and PEDEVCO Corp.’s definitive proxy statement on Schedule 14A, filed with the SEC on August 25, 2015. Additional information regarding the interests of such potential participants will be included in the proxy statement to be filed with the SEC by PEDEVCO in connection with the Shareholder Approval and in other relevant documents filed by PEDEVCO with the SEC. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC when they become available.

Forward-Looking Statements

Certain statements in this communication regarding the proposed transaction between PEDEVCO and GOM are “forward-looking” statements. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “probable,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “would,” “potential,” “may,” “might,” “anticipate,” “likely” “plan,” “positioned,” “strategy,” and similar expressions, and the negative thereof, are intended to identify forward-looking statements. These forward-looking statements, which are subject to risks, uncertainties and assumptions about PEDEVCO and GOM, may include projections of their respective future financial performance, their respective anticipated growth strategies and anticipated trends in their respective businesses. These statements are only predictions based on current expectations and projections about future events. There are important factors that could cause actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including the risk factors set forth in PEDEVCO’s most recent reports on Form 10-K, Form 10-Q and other documents on file with the SEC and the factors given below:

· termination of the proposed combination by either party subject to the terms of the Agreement and Plan of Merger and Reorganization;

· failure to obtain the approval of members of GOM in connection with the proposed transaction or the approval of the shareholders of PEDEVCO for the Shareholder Approval;

· the failure to consummate or 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;

· PEDEVCO’s ability to achieve the synergies and value creation contemplated by the proposed transaction;

· the ability of PEDEVCO to effectively integrate GOM’s operations; and

· the diversion of management time on transaction-related issues.

PEDEVCO’s forward-looking statements are based on assumptions that PEDEVCO believes to be reasonable but that may not prove to be accurate. PEDEVCO cannot guarantee future results, level of activity, performance or achievements. Moreover, PEDEVCO does not assume responsibility for the accuracy and completeness of any of these forward-looking statements. PEDEVCO assumes no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as may be required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

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.
Date: February 4, 2016	By:	/s/ Frank C. Ingriselli
		Frank C. Ingriselli
		Chairman and Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description
10.1*	Letter Agreement, dated January 29, 2016, by and among PEDEVCO Corp., BAM Administrative Services LLC, Senior Health Insurance Company of Pennsylvania, BRE BCLIC Sub, BRE WNIC 2013 LTC Primary, BRE WNIC 2013 LTC Sub, HEARTLAND Bank, and RJ Credit LLC

* Filed herewith. 

EX-10.1

Pedevco Corp. 8-K

Exhibit 10.1

 

January 29, 2016

BAM Administrative Services LLC

1370 Avenue of the Americas, 32^nd Floor

New York, New York 10019

Attention: Dhruv Narain

RJ Credit LLC

250 West 55^th Street, 14^th Floor

New York, New York 10019

Attention: David Steinberg

HEARTLAND Bank

One Information Way, Suite 300

Little Rock, AR 72202

Attn: Mark Hoffpauir

Blank Rome LLP

405 Lexington Avenue

New York, New York 10174

Attention: Eliezer M. Helfgott, Esq.

Re: Consent and Agreement

Dear Messrs. Narain, Steinberg and Hoffpauir:

Reference is made to that certain Note Purchase Agreement, dated March 7, 2014 (the “NPA”), by and among BRe BCLIC Primary, BRe BCLIC Sub (“BCLIC Sub”), BRe WNIC 2013 LTC Primary (“WNIC Primary”), BRe WNIC 2013 LTC Sub (“WNIC Sub”), Heartland Bank (“Heartland”) and RJ Credit LLC (“RJC”) (collectively, the “Purchasers”), BAM Administrative Services LLC, as agent for the Investors (the “Agent”), and PEDEVCO Corp. (the “Company” and, together with each of the Company’s Subsidiaries, the “Pedevco Group Companies” and each, a “Pedevco Group Company”), pursuant to which the Company issued Senior Secured Promissory Notes to each of the Investors (collectively, but excluding the Heartland Note as defined below, the “Notes”). On March 19, 2015, BRe WNIC 2013 LTC Primary transferred a portion of its Note to Heartland and the Company reissued a replacement note to Heartland (the “Heartland Note”). On April 1, 2015, BRe BCLIC Primary transferred the entirety of its Note to Senior Health Insurance Company of Pennsylvania (“SHIP” and, collectively with the Purchasers and Heartland, the “Investors” and, together with the Agent, the “Creditor Parties” and each, a “Creditor Party”). Reference is also made to that certain Note and Security Agreement, dated April 10, 2014, as amended on February 23, 2015, issued by the Company to RJC (the “RJC Junior Note”). To the extent not defined herein, capitalized terms shall have the meaning ascribed to them in the NPA.

Consent and Agreement

Page 2

The Company has requested certain interest and principal deferrals from the Investors and the Investors are willing to grant such requests on the terms and conditions set forth herein. The Company and the Investors hereby agree to amend the terms of (i) that certain Consent and Agreement, dated August 28, 2015, entered into by the Company and each of BCLIC Sub, WNIC Primary, WNIC Sub, SHIP and RJC (collectively, the “Original Investors”) (the “Original Investors August 2015 Consent and Agreement”), and (ii) that certain Consent and Agreement, dated August 28,2015, entered into by the Company and Heartland (the “Heartland August 2015 Consent and Agreement,” and together with the Original Investors August 2015 Consent and Agreement, the “August 2015 Consent and Agreements”), as follows:

Original Investors August 2015 Consent and Agreement

The Original Investors hereby agree as follows (defined terms shall have the meaning ascribed to them in the Original Investors August 2015 Consent and Agreement):

a. Each of the (i) “Original Investor’s Interest Deferral,” the (ii) “Original Investor’s Principal Repayment Deferral,” and the (iii) “RJC Junior Note Interest Deferral” shall be extended for an additional one (1) month period through February 29, 2016, and the “Waiver Period” shall be similarly extended for an additional one (1) month period through January 31, 2016;

b. 17/17^ths of the interest payments due to the Original Investors otherwise due and payable by the Company to the Original Investors under the Notes on February 1, 2016 shall be deferred until the Maturity Date, with no cash interest payments due to the Original Investors in February 2016;

c. On January 31, 2016, the interest rate under each of the Notes shall return to 15% per annum, and the interest rate under the RJC Junior Note shall return to 12% cash pay per annum; and

d. To the extent issuable under the Original Investors August 2015 Consent and Agreement, any Subsequent Warrants issuable to the Investors shall be issued within 30 days of March 1, 2016, subject to NYSE MKT additional listing approval.

For avoidance of doubt, nothing under this “Original Investors August 2015 Consent and Agreement” section shall amend or otherwise modify the terms and conditions of the Heartland Note, which the Original Investors agree and acknowledge is being modified separately under “Heartland August 2015 Consent and Agreement” below. Except as modified hereunder, the terms of the Notes, as amended to date, shall remain in full force and effect.

Heartland August 2015 Consent and Agreement

Heartland hereby agrees as follows (defined terms shall have the meaning ascribed to them in the Heartland August 2015 Consent and Agreement”):

a. The “Mandatory Principal Repayment Waiver” shall be extended one (1) additional month through March 1, 2016, with the next mandatory principal repayments due and payable on the Heartland Note due and payable by the Company on the third Business Day of September 2016 for the period of March 1, 2016 through August 31, 2016, with mandatory principal repayments accruing thereafter due and payable every six (6) months;

b. Interest due and payable by the Company for the seven (7) month period commencing August 1, 2015 shall be due and payable by the Company on March 1, 2016, with interest accruing thereafter due and payable every six (6) months; and

c. The requirement that the Company pace an amount equal to 1/6^th of the semi-annual principal and interest payments due under the Heartland Note into a sinking fund shall begin on April 1, 2016.

For avoidance of doubt, nothing under this “Heartland August 2015 Consent and Agreement” section shall amend or otherwise modify the terms and conditions of the Notes held by the Original Investors, which Heartland agrees and acknowledges are being modified separately under “Original Investors August 2015 Consent and Agreement” above. Except as modified hereunder, the terms of the Heartland Note, as amended to date, shall remain in full force and effect.

Consent and Agreement

Page 3

Additional Agreements

a. Additional Reporting. On the Monday of each week commencing on February 1, 2016 and thereafter, Pedevco Group Companies shall deliver to Agent: (a) an accounts receivable and accounts payable listing as of the close of business of the preceding week; (b) collection reports for the preceding week; (c) a compliance report with respect to the Budget (as defined below) which includes a comparison of all categories in the Budget with actual levels of expenditures and revenues generated for the preceding week together with an explanation of all variances from the Budget; and (d) a listing of all the Pedevco Group Companies’ checks outstanding as of end of the preceding week. For purposes hereof, the term, “Budget” shall mean the Pedevco Group Companies’ budget for the ten (10) week period covered thereby to be delivered to Agent within 3 business days of the date hereof in form and substance satisfactory to Agent as such budget may be modified, from time to time so long as such modifications have been agreed to by the Company and the Creditor Parties in their reasonable discretion.

b. Company Disbursements. At no time shall the Pedevco Group Company’s disbursements exceed by more than 5% those amounts set forth on the Budget.

c. Acquisition and Transactional Matters. The Pedevco Group Companies shall provide to Agent a copy of (i) any selling memoranda (and any other similar marketing materials) for or relating to the sale of all or any equity or asset of any Pedevco Group Company (and such sale, a “Pedevco Sale”), (ii) any loan memoranda (and any other similar marketing materials) for or relating to the borrowing of money by any Pedevco Group Company (and such borrowing transaction, an “Additional Pedevco Loan”) or (iii) any executed letter of intent, purchase agreement, merger agreement or similar agreement relating to any Pedevco Sale or Additional Pedevco Loan, in each case within two (2) Business Days after (x) in the case of preceding clause (i) or (ii), the final preparation thereof or (y) in the case of preceding clause (iii), execution thereof by the parties thereto. Nothing herein shall be deemed to in any way waive the Pedevco Group Companies’ obligations set forth herein and in the Transaction Documents as relating to Creditor Party consent requirements.

Miscellaneous

The Investors hereby consent and agree that none of the amendments and modifications, or performance by the Company in accordance therewith, made hereunder, shall give rise to a breach or an event of default under the NPA, the Notes, the Heartland Note, the RJC Junior Note, or any other Transaction Documents, or otherwise trigger any right to prepayment under the NPA, the Notes, the Heartland Note, the RJC Junior Note, or any of the other Transaction Documents. This letter agreement shall be deemed to be a Transaction Document and any breach by any Pedevco Group Company of any “Additional Agreements” as described above shall be deemed to constitute a breach of a Transaction Document. Except as expressly described herein, nothing contained herein shall (a) limit in any manner whatsoever the Company’s obligation to comply with, and each Investors’ right to insist on the Company’s compliance with, each and every term of each Note, the Heartland Note, the RJC Junior Note, the NPA and each other Transaction Document, or (b) constitute a waiver of any event of default or any right or remedy available to any Investor, or of the Company’s or any other person’s obligation to pay and perform all of its obligations, in each case whether arising under the Notes, the Heartland Note, the NPA, the RJC Junior Note, or any other Transaction Document, applicable law and/or in equity, all of which rights and remedies howsoever arising are hereby expressly reserved, are not waived and may be exercised by Investors at any time, and none of which obligations are waived.

The Company hereby represents and warrants to the Agent and each of the Investors that on the date hereof and after giving effect to this Consent and Agreement, (i) each of the representations and warranties of the Company and the Subsidiaries in the NPA and the other Transaction Documents are and shall be true and correct in all material respects, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date and (ii) no Default or Event of Default has occurred and is continuing or will occur as a result of the consummation of this Consent and Agreement.

Company hereby further confirms and agrees, on behalf of itself and each of its direct and indirect subsidiaries, that all security interests and liens granted to Agent and Investors pursuant to the Transaction Documents continue in full force and effect and shall continue to secure the Obligations (as defined in the Security Agreement), including all liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become due, or that are now or may be hereafter contracted or acquired, or owing, under the Notes, the Heartland Note, the RJC Junior Note and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from Investors as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time.

Consent and Agreement

Page 4

Subject in each case to any other prior and still effective intercreditor agreements among the Investors that relate to payment priority, each of the Investors hereby further agrees that on and after the occurrence of an Event of Default and/or in connection with the distribution of proceeds from the sale or transfer of all or substantially all of the assets or equity of the Company, all accrued and unpaid interest deferred by any Investor pursuant to the Interest Deferral shall be repaid in full prior to repayment of any other indebtedness of the Company held by any other Investor.

[Signature Pages Follow]

Consent and Agreement

Page 5

Except as specifically set forth herein, all terms and conditions of the NPA, the Notes, the RJC Junior Note, the Heartland Note, and other Transaction Documents shall remain in full force and effect.

Regards,

/s/ Clark R. Moore

Clark R. Moore

Executive Vice President and General Counsel

PEDEVCO Corp.

Consented and Agreed:
BAM ADMINISTRATIVE SERVICES LLC
By:	/s/ Scott Taylor
Name:	Scott Taylor
Title:	Authorized Signatory
Date:	January 29, 2016
SENIOR HEALTH INSURANCE COMPANY OF PENNSYLVANIA
By:	B Asset Manager, LP, its investment manager
By:	/s/ Scott Taylor
Name:	Scott Taylor
Title:	President
Date:	January 29, 2016
BRE BCLIC SUB
By:	/s/ David B. Young
Name:	David B. Young
Title:	Vice President
Date:	January 29, 2016
BRE WNIC 2013 LTC PRIMARY
By:	/s/ David B. Young
Name:	David B. Young
Title:	Vice President
Date:	January 29, 2016

Consent and Agreement

Page 6

BRE WNIC 2013 LTC SUB
By:	/s/ David B. Young
Name:	David B. Young
Title:	Vice President
Date:	January 29, 2016
RJ CREDIT LLC
By:	/s/ David Steinberg
Name:	David Steinberg
Title:	Authorized Signatory
Date:	January 29, 2016
HEARTLAND BANK
By:	/s/ Phil Thomas
Name:	Phil Thomas
Title:	EVP/CLO
Date:	January 29, 2016