Blueprint
As filed with the Securities and Exchange Commission on
December 19, 2016
Registration No. 333-214415
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________
FORM S-3/A
Amendment
No. 1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
__________________________
PEDEVCO CORP.
(Name
of registrant in its charter)
Texas
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22-3755993
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(State
or 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
(855) 733-3826
(Address,
including zip code, and telephone number,
including
area code, of registrant’s principal executive
offices)
____________________________
Michael L. Peterson
Chief Executive Officer
PEDEVCO Corp.
4125 Blackhawk Plaza Circle, Suite 201
Danville, California 94506
(855) 733-3826
(Name,
address, including zip code, and telephone number,
including
area code, of agent for service)
____________________________
Copies To:
David M. Loev, Esq.
John S. Gillies, Esq.
The Loev Law Firm, PC
6300 West Loop South, Suite 280
Bellaire, Texas 77401
Telephone: (713) 524-4110
Facsimile: (713) 524-4122
____________________________
Approximate date of
commencement of proposed sale to the public: From time to time after this Registration
Statement becomes effective.
If the
only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check
the following box:
☐
If any
of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box: ☒
If this
Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. ☐
If this
Form is a post–effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
☐
If this
Form is a registration statement pursuant to General Instruction
I.D. or a post–effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e)
under the Securities Act, check the following box.
☐
If this
Form is a post–effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to
register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the
following box. ☐
Indicate by check
mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of “large accelerated filer,”
“accelerated
filer” and “smaller reporting
company” in Rule 12b-2 of the Securities Exchange Act
of 1934, as amended.
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Large
accelerated filer ☐
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Accelerated
filer ☐
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Non-accelerated
filer ☐
(Do not
check if a smaller reporting company)
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Smaller
reporting company ☒
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CALCULATION OF REGISTRATION FEE
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Title of Each
Class of
Securities to be
Registered(1)(2)
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Amount
to
be
Registered
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Proposed
Maximum
Offering
Price
per Unit
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Proposed
Maximum
Aggregate
Offering Price(3)(4)
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Amount of
Registration Fee(5)
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Common
Stock, par value $0.001 per share
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Preferred
Stock, par value $0.001 per share
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Warrants
(6)
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Units
(7)
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Total
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$100,000,000
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$12,880 (8)
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(1)
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Any of
the securities registered hereunder may be sold separately, or as
units with other securities registered hereby. We will determine
the proposed maximum offering price when we issue the above listed
securities. The proposed maximum and aggregate offering prices per
class of securities will be determined from time to time by the
registrant in connection with the issuance by the registrant of the
securities registered under this registration statement and is not
specified as to each class of security pursuant to General
Instruction II.D of Form S-3 under the Securities Act of 1933, as
amended (the “Securities
Act”). The aggregate amount of the
registrant’s common stock, preferred stock and/or warrants
registered hereunder that may be sold in “at the market” offerings
for the account of the registrant is limited to that which is
permissible under Rule 415(a)(4) under the Securities
Act.
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(2)
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Pursuant
to Rule 416 under the Securities Act, the shares being registered
hereunder include such indeterminate number of shares of common
stock, preferred stock, warrants, and units as may be issuable with
respect to the shares being registered hereunder as a result of
stock splits, stock dividends
or similar transactions.
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(3)
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Not
required to be included pursuant to Form S-3 General Instruction
II.D.
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(4)
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There
are being registered hereunder such indeterminate number of shares
of common stock, preferred stock, warrants and units to purchase
common stock and preferred stock as shall have an aggregate initial
offering price not to exceed $100,000,000. The securities
registered also include such indeterminate amounts and numbers of
common stock, and preferred stock as may be issued upon conversion
of or exchange for preferred stock, that provide for conversion or
exchange, upon exercise of warrants, or pursuant to the
anti-dilution provisions of any such securities.
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(5)
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Calculated
pursuant to Rule 457(o) under the Securities Act.
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(6)
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Includes
warrants to purchase common stock and warrants to purchase
preferred stock.
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(7)
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Any
securities registered hereunder may be sold separately or as units
with other securities registered hereunder.
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(8)
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PEDEVCO
Corp. filed a Registration Statement on Form S-3 (File No.
333-191869) (the “Prior Registration Statement”), which
registered an aggregate of $100,000,000 of securities, including
common stock, preferred stock, warrants and units, $80,499,622 of
which remain unsold (the “Unsold Securities”). Pursuant
to Rule 415(a)(6) under the Securities Act, this Registration
Statement carries forward the Unsold Securities from the Prior
Registration Statement and PEDEVCO Corp. is continuing to apply the
previously paid filing fee of $12,880 associated with the Unsold
Securities to this Registration Statement. No securities in
addition to the Unsold Securities are included in this Registration
Statement. Accordingly, no additional filing fee is being paid
herewith. The Unsold Securities covered by the Prior Registration
Statement may continue to be offered and sold under the Prior
Registration Statement until this registration statement becomes
effective or 180 days after the third anniversary of the Prior
Registration Statement’s effectiveness date (November 5,
2013), whichever comes first. To the extent that after the filing
date hereof and prior to the effectiveness of this registration
statement, any Unsold Securities are sold pursuant to the Prior
Registration Statement, the registrant will identify in a
pre-effective amendment to this registration statement, the updated
amount of Unsold Securities from the Prior Registration Statement
to be included in this registration statement pursuant to Rule
415(a)(6). Pursuant to Rule 415(a)(6), the offering of Unsold
Securities under the Prior Registration Statement will be deemed
terminated as of the date of effectiveness of this Registration
Statement.
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The registrant hereby amends this
Registration Statement on such date or dates as may be necessary to
delay its effective date until the registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act or until the Registration
Statement shall become effective on such date as the Securities and
Exchange Commission acting pursuant to said Section 8(a), may
determine.
EXPLANATORY NOTE
This
registration statement contains two prospectuses:
●
a base prospectus
which covers the offering, issuance and sale by the Registrant of
up to $100,000,000 of the Registrant’s common stock,
preferred stock, warrants and/or units. and
●
a sales agreement
prospectus covering the offering, issuance and sale by the
Registrant of up to $2,000,000 of the Registrant’s common
stock that may be issued and sold under a sales agreement with
National Securities Corporation.
The
base prospectus immediately follows this explanatory note. The
specific terms of any securities to be offered pursuant to the base
prospectus will be specified in a prospectus supplement to the base
prospectus. The sales agreement prospectus immediately follows the
base prospectus. The $2,000,000 of common stock that may be
offered, issued and sold by the Registrant under the sales
agreement prospectus is included in the $100,000,000 of securities
that may be offered, issued and sold by the Registrant under the
base prospectus.
Information contained herein is not complete and may be changed.
These securities may not be sold until the Registration Statement
filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell and it is not soliciting an
offer to buy these securities in any jurisdiction where the offer
or sale is not permitted.
PROSPECTUS
SUBJECT TO COMPLETION, DATED DECEMBER 19,
2016
PEDEVCO Corp.
$100,000,000
Common Stock
Preferred Stock
Warrants
Units
We may
from time to time, in one or more offerings at prices and on terms
that we will determine at the time of each offering, sell common
stock, preferred stock, warrants, or a combination of these
securities or units (collectively referred to as
“securities”)
for an aggregate initial offering price of up to $100 million. This
prospectus describes the general manner in which our securities may
be offered using this prospectus. Each time we offer and sell
securities, we will provide you with a prospectus supplement that
will contain specific information about the terms of that offering.
We may also authorize one or more free writing prospectuses to be
provided to you in connection with these offerings. Any prospectus
supplement and any related free writing prospectus may also add,
update, or change information contained in this prospectus. You
should carefully read this prospectus, the applicable prospectus
supplement and any related free writing prospectus as well as the
documents incorporated or deemed to be incorporated by reference
herein or therein before you purchase any of the securities offered
hereby.
This
prospectus may not be used to offer or sell our securities unless
accompanied by a prospectus supplement. The information contained
or incorporated in this prospectus or in any prospectus supplement
is accurate only as of the date of this prospectus, or such
prospectus supplement, as applicable, regardless of the time of
delivery of this prospectus or any sale of our
securities.
Securities may be
sold by us to or through underwriters or dealers, directly to
purchasers or through agents designated from time to time. For
additional information on the methods of sale, you should refer to
the section entitled “Plan of Distribution” in
this prospectus. If any underwriters are involved in the sale of
any securities with respect to which this prospectus is being
delivered, the names of such underwriters and any applicable
discounts or commissions and over-allotment options will be set
forth in a prospectus supplement. The price to the public of such
securities and the net proceeds we expect to receive from such sale
will also be set forth in a prospectus supplement.
Our common stock is listed on the NYSE
MKT under the symbol “PED.”
On December 16, 2016, the last reported sales price of
our common stock was $0.12. There is currently no market for the
other securities we may offer. You are urged to obtain current
market quotations of our common stock (and any other securities we
may offer for which there is a current market), before purchasing
any of the securities being offered for sale pursuant to this
prospectus or any prospectus supplement. The prospectus supplement
will contain information, where applicable, as to any other listing
of the securities on the NYSE MKT or any other securities market or
exchange covered by the prospectus supplement. Pursuant to General
Instruction I.B.6 of Form S-3, in no event will we sell our common
stock in a public primary offering with a value exceeding more than
one-third of our public float in any 12-month period so long as our
public float remains below $75 million. As of the date of this
prospectus, the aggregate market value of our outstanding voting
and nonvoting common equity held by non-affiliates of the Company
(i.e., our public float) was
$4,933,535 and the total value of our entire
voting and nonvoting common equity was
$5,981,916, each based on the closing price of the
Company’s common stock on December 16, 2016,
which closing price was $0.12. We have offered and sold no securities
pursuant to General Instruction I.B.6 of Form S-3 during the twelve
calendar months prior to and including the date of this
prospectus.
Investing
in our securities involves risks. You should carefully consider
the risk factors beginning on page 7 of this prospectus
and set forth in the documents incorporated by reference herein
before making any decision to invest in our
securities.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this prospectus is ____________, 2016.
TABLE OF CONTENTS
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Page
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About This Prospectus
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1
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Prospectus Summary
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2
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Securities Registered Hereby That We May Offer
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3
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Forward-Looking Statements
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5
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Risk
Factors
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7
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Use of Proceeds
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10
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Description of Capital Stock
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11
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Description of Preferred Stock
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15
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Description of Warrants
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16
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Description of Units
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19
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Plan of Distribution
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20
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Legal Matters
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23
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Experts
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23
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Where You Can Find More Information
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24
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Incorporation of Certain Documents By Reference
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24
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ABOUT THIS PROSPECTUS
This
prospectus is a part of a registration statement that we filed with
the Securities and Exchange Commission, or the Commission,
utilizing a “shelf” registration
process. Under this shelf registration process, we may offer to
sell any combination of the securities described in this
prospectus, either individually or in units, in one or more
offerings up to a total dollar amount of $100,000,000. This
prospectus provides you with a general description of the
securities we may offer. Each time we sell securities under this
shelf registration, we will provide a prospectus supplement that
will contain specific information about the terms of that offering.
We may also authorize one or more free writing prospectuses to be
provided to you that may contain material information about the
terms of that offering. The prospectus supplement and any related
free writing prospectus that we may authorize to be provided to you
may also add, update or change information contained in this
prospectus. To the extent that any statement that we make in a
prospectus supplement and any related free writing prospectus that
we may authorize to be provided to you is inconsistent with
statements made in this prospectus, the statements made in this
prospectus will be deemed modified or superseded by those made in
the prospectus supplement. You should read this prospectus and any
prospectus supplement and free writing prospectus, including all
documents incorporated herein or therein by reference, together
with additional information described under “Where You Can Find More
Information” and “Information Incorporated by
Reference” before making an investment decision. We
may only use this prospectus to sell the securities if it is
accompanied by a prospectus supplement.
You
should rely only on the information included or incorporated by
reference in this prospectus and any accompanying prospectus
supplement or free writing prospectus. We have not authorized any
dealer, salesman or other person to provide you with additional or
different information. This prospectus and any accompanying
prospectus supplement and free writing prospectus are not an offer
to sell or the solicitation of an offer to buy any securities other
than the securities to which they relate and are not an offer to
sell or the solicitation of an offer to buy securities in any
jurisdiction to any person to whom it is unlawful to make an offer
or solicitation in that jurisdiction. You should not assume that
the information contained in this prospectus and the accompanying
prospectus supplement, and any free writing prospectus, is accurate
on any date subsequent to the date set forth on the front of the
document or that any information we have incorporated by reference
is correct on any date subsequent to the date of the document
incorporated by reference, even though this prospectus and any
accompanying prospectus supplement and free writing prospectus is
delivered or securities are sold on a later date. We will disclose
any material changes in our affairs in a post-effective amendment
to the registration statement of which this prospectus is a part, a
prospectus supplement, free writing prospectus or a future filing
with the Securities and Exchange Commission incorporated by
reference in this prospectus. We do not imply or represent by
delivering this prospectus that PEDEVCO Corp., or its business,
financial condition or results of operations, are unchanged after
the date on the front of this prospectus or that the information in
this prospectus is correct at any time after such
date.
Persons
outside the United States who come into possession of this
prospectus must inform themselves about, and observe any
restrictions relating to, the offering of the securities and the
distribution of this prospectus outside of the United
States.
The
market data and certain other statistical information used
throughout this prospectus are based on independent industry
publications, government publications and other published
independent sources. Although we believe that these third-party
sources are reliable and that the information is accurate and
complete, we have not independently verified the information. Some
data is also based on our good faith estimates.
Unless
the context otherwise requires, references in this prospectus and
the accompanying prospectus supplement to “we,” “us,” “our,” the
“Company,” and
“PEDEVCO” refer to PEDEVCO
Corp. and its subsidiaries.
PROSPECTUS SUMMARY
The
following summary highlights material information found in more
detail elsewhere in, or incorporated by reference in, the
prospectus. It does not contain all of the information you should
consider. As such, before you decide to buy our securities, in
addition to the following summary, we urge you to carefully read
the entire prospectus and documents incorporated by reference
herein, the prospectus supplement, and any free writing prospectus,
especially the risks of investing in our securities as discussed
under “Risk
Factors” herein and therein. The following summary is
qualified in its entirety by the detailed information appearing
elsewhere in this prospectus.
General
Overview
We
are an energy company engaged primarily in the acquisition,
exploration, development and production of oil and natural gas
shale plays in the Denver-Julesberg Basin (“D-J Basin”)
in Colorado, which contains hydrocarbon bearing deposits in several
formations, including the Niobrara, Codell, Greenhorn, Shannon,
J-Sand, and D-Sand. As of September 30, 2016, we held
approximately 11,556 net D-J Basin acres located in
Weld County, Colorado through our wholly-owned operating
subsidiary, Red Hawk Petroleum, LLC (“Red Hawk”), which
asset we refer to as our “D-J Basin
Asset.”
On December 29, 2015, the Company entered into an
Agreement and Plan of Merger and Reorganization (as amended to
date, the “GOM Merger Agreement”) with White Hawk
Energy, LLC (“White Hawk”) and GOM Holdings, LLC
(“GOM”), each a Delaware limited liability company. The
GOM Merger Agreement provides for the
Company’s acquisition of GOM
through an exchange of (i) an aggregate of 1,551,552 shares of our
restricted common stock and (ii) 698,448 restricted shares of our
to-be-designated Series B Convertible Preferred Stock (which will
be convertible into common stock on a 1,000:1 basis)(the
“Consideration Shares”), for 100% of the limited
liability company membership units of GOM (the “GOM
Units”), with the GOM Units being received by White Hawk and
GOM receiving the Consideration Shares from the Company (the
“GOM Merger”). On February 29, 2016, the parties entered into an
amendment to the GOM Merger Agreement, which amended the merger
agreement in order to provide GOM additional time to meet certain
closing conditions contemplated by the GOM Merger Agreement, and on
April 25, 2016, the parties further amended the merger agreement to
remove the deadline for closing the merger and agreed to work
expeditiously in good faith toward closing. The Company and GOM
continue to move forward with the merger, which the Company
is working to close as soon as possible, subject to satisfaction of
closing conditions including possible approval by applicable
bankruptcy courts.
Oil and Gas Properties
We
believe that the D-J Basin shale play represents among the most
promising unconventional oil and natural gas plays in the U.S. We
plan to continue to opportunistically seek additional acreage
proximate to our currently held acreage. Our strategy is to be the
operator, directly or through our subsidiaries and joint ventures,
in the majority of our acreage so we can dictate the pace of
development in order to execute our business plan. The
majority of our capital expenditure budget for the next twelve
months will be focused on the development of our D-J Basin Asset.
Our development plan calls for the development of approximately
$35.6 million in capital expenditures (of which $5.1 million has
been deployed to acquire interests in 2.1 net short lateral wells
already in 2016) in order to drill and complete, participate in the
drilling and completion of, and/or acquire approximately 8.5 net
wells in our D-J Basin Asset for the next twelve months. We plan to
fund our operations and business plan by utilizing projected cash
flow from operations, a $26 million debt facility we closed in
May 2016, our cash on hand and proceeds from future potential debt
and/or equity financings, which may include drilling partnerships.
In addition, we may seek additional funding through asset sales,
farm-out arrangements, lines of credit, or public or private debt
or equity financings to fund additional 2017 capital expenditures
and/or repay or refinance a portion or all of our outstanding debt.
If market conditions are not conducive to raising additional
funds, the Company may choose to extend the drilling program
and associated capital expenditures further into
2017.
Additional Information
Additional
information about us can be obtained from the documents
incorporated by reference herein. See “Where You Can Find More
Information.”
Our Contact Information
Our
principal office is located at 4125 Blackhawk Plaza Circle, Suite
201, Danville, California 94506. Our phone number is (855)
733-3826. Our website address is www.pacificenergydevelopment.com.
Information on our website or any other website is not, and will
not be, a part of this prospectus and is not, and will not be,
incorporated by reference into this prospectus.
SECURITIES REGISTERED HEREBY THAT WE MAY OFFER
We may
offer any of the following securities, either individually or in
combination, with a total value of up to $100,000,000 from time to
time under this prospectus at prices and on terms to be determined
by market conditions at the time of the offering:
●
preferred stock,
in one or more series;
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warrants to
purchase shares of common stock, or shares of preferred stock;
or
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any combination of
the foregoing securities, in units.
We
refer to our common stock, preferred stock, warrants, and units
collectively in this prospectus as the “securities.” This
prospectus provides you with a general description of the
securities we may offer. Each time we offer a type or series of
securities, we will provide a prospectus supplement that will
describe the specific amounts, prices and other important terms of
the securities, including, to the extent applicable:
●
designation or
classification;
●
aggregate offering
price;
●
rates and times of
payment of dividends, if any;
●
redemption,
conversion or sinking fund terms, if any;
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voting or other
rights, if any;
●
conversion prices,
if any; and
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important federal
income tax considerations.
We may
sell the securities to or through underwriters or dealers, directly
to purchasers or through agents designated from time to time. We
and our agents, underwriters and dealers reserve the right to
accept or reject all or part of any proposed purchase of
securities. If we do offer securities to or through agents,
underwriters or dealers, we will include in the applicable
prospectus supplement:
●
the names of those
agents, underwriters or dealers;
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applicable fees,
discounts and commissions to be paid to them;
●
details regarding
over-allotment options, if any; and
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the net proceeds
to us.
Common Stock. We may offer shares of our common stock. Our
common stock currently is listed on the NYSE MKT under the symbol
“PED.”
Shares of common stock that may be offered in this offering will,
when issued and paid for, be fully paid and
non-assessable.
Preferred Stock. We may offer shares of our preferred stock,
in one or more series. Prior to the issuance of shares of each
series, our Board of Directors will determine the rights,
preferences, privileges and restrictions of such preferred stock
series, and will adopt resolutions and file a certificate of
designation with the Secretary of State of the State of Texas. The
certificate of designation fixes for each class or series the
designations, powers, preferences, rights, qualifications,
limitations and restrictions, including, but not limited to, the
following: any dividend rights, conversion rights, voting rights,
rights and terms of redemption, liquidation preferences, sinking
fund terms and the number of shares constituting any series or the
designation of any series. Convertible preferred stock will be
convertible into shares of our common stock. Conversion may be
mandatory or at your option and would be at prescribed
conversion rates. Shares of preferred stock that may be offered in
this offering will, when issued and paid for, be fully paid and
non-assessable. If we elect to issue preferred stock, we will
describe the specific terms of a particular series of preferred
stock in the prospectus supplement relating to that series. We will
file as an exhibit to the registration statement of which this
prospectus is a part, or will incorporate by reference from another
report that we file with the SEC, the certificate of designation
that describes the terms of any series of preferred stock we offer
under this prospectus before the issuance of shares of that series
of preferred stock. You should read any prospectus supplement and
any free writing prospectus that we may authorize to be provided to
you related to the series of preferred stock being offered. We have
summarized certain general features of the preferred stock under
“Description of
Preferred Stock”. We urge you to read the complete
certificate of designations containing the terms of the applicable
series of preferred stock, as well as the applicable prospectus
supplement, and any related free writing prospectus that we may
authorize to be provided to you, related to such
series.
Warrants. We may issue warrants for the purchase of
common stock or preferred stock in one or more series. We may issue
warrants independently or in combination with common stock or
preferred stock. In this prospectus, we have summarized certain
general features of the warrants under “Description of
Warrants.” We urge you, however, to read the
applicable prospectus supplement, and any related free writing
prospectus that we may authorize to be provided to you, related to
the particular series of warrants being offered, as well as the
form of warrant and/or the warrant agreement and warrant
certificate, as applicable, that contain the terms of the warrants.
We will file as exhibits to the registration statement of which
this prospectus is a part, or will incorporate by reference from
reports that we file with the SEC, the form of warrant and/or the
warrant agreement and warrant certificate, as applicable, that
describe the terms of the particular series of warrants we are
offering, and any supplemental agreements, before the issuance of
such warrants.
Warrants may be
issued under a warrant agreement that we enter into with a warrant
agent. We will indicate the name and address of the warrant agent,
if any, in the applicable prospectus supplement relating to a
particular series of warrants.
Units. We may issue units representing any combination
of common stock, preferred stock, and/or warrants from time to
time. The units may be issued under one or more unit agreements. In
this prospectus, we have summarized certain general features of the
units.
We will
incorporate by reference into the registration statement, of which
this prospectus is a part, the form of unit agreement under which
the units are designated, if any, describing the terms of the units
we are offering before the issuance of the related units. We have
summarized certain general features of the units under
“Description of
Units.” We urge you to read the prospectus supplements
related to any units being offered, as well as the complete unit
agreement, if any, designating the units.
FORWARD-LOOKING STATEMENTS
Certain
information included in this prospectus, any prospectus supplement,
any free writing prospectus we may file, the documents or
information incorporated by reference herein, other reports filed
by us under the Securities Exchange Act of 1934, as amended, or the
Exchange Act, and any other written or oral statement by or on our
behalf contain forward-looking statements and information that are
based on management’s beliefs, expectations and conclusions,
drawn from certain assumptions and information currently available,
within the meaning of Section 27A of the Securities Act of 1933, as
amended, or the Securities Act, Section 21E of the Exchange Act,
and the Private Securities Litigation Reform Act of 1995, as
amended. These forward-looking statements are subject to risks and
uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from the
results, performance or achievements expressed or implied by the
forward-looking statements. You should not unduly rely on these
statements. Forward-looking statements may include statements about
our:
●
cash
flows and liquidity;
●
financial
strategy, budget, projections and operating results;
●
oil
and natural gas realized prices;
●
timing
and amount of future production of oil and natural
gas;
●
availability of
oil field labor;
●
the
amount, nature and timing of capital expenditures, including future
exploration and development costs;
●
availability and
terms of capital;
●
government
regulation and taxation of the oil and natural gas
industry;
●
marketing of oil
and natural gas;
●
exploitation
projects or property acquisitions;
●
costs
of exploiting and developing our properties and conducting other
operations;
●
general economic
conditions;
●
competition in the
oil and natural gas industry;
●
effectiveness of
our risk management activities;
●
environmental
liabilities;
●
counterparty
credit risk;
●
developments in
oil-producing and natural gas-producing countries;
●
future
operating results;
●
future
planned and completed acquisitions and business combinations,
including our planned combination transaction with GOM Holdings,
LLC; and
●
estimated future
reserves and the present value of such reserves.
We identify forward-looking statements by use of terms such as
“may,” “will,” “expect,”
“anticipate”, “estimate”,
“hope”, “plan”, “believe”,
“predict”, “envision”,
“intend”, “continue”,
“potential”, “should”,
“confident”, “could” and similar words and
expressions, although some forward-looking statements may be
expressed differently. You should be aware that our actual results
could differ materially from those contained in the forward-looking
statements. You should consider carefully the statements included
in and incorporated by reference in this prospectus, any prospectus
supplement and any free writing prospectus, which describe factors
that could cause our actual results to differ from those set forth
in the forward-looking statements.
The
above statements are not the exclusive means of identifying
forward-looking statements herein. Although forward-looking
statements contained or incorporated by reference in this
prospectus reflect our good faith judgment, such statements can
only be based on facts and factors currently known to us.
Consequently, forward-looking statements are inherently subject to
risks and uncertainties, including known and unknown risks and
uncertainties incidental to the exploration for, and the
acquisition, development, production and marketing of oil and
natural gas, and actual outcomes may differ materially from the
results and outcomes discussed in the forward-looking
statements.
Important factors
that could cause actual results to differ materially from the
forward-looking statements include, but are not limited
to:
●
changes in
production volumes and worldwide demand, including economic
conditions that might impact demand;
●
volatility of
commodity prices for oil and natural gas;
●
the impact of
governmental policies and/or regulations, including changes in
environmental and other laws, the interpretation and enforcement
related to those laws and regulations, liabilities arising
thereunder and the costs to comply with those laws and
regulations;
●
changes in
estimates of proved reserves;
●
inaccuracy of
reserve estimates and expected production rates;
●
risks incidental
to the production of oil and natural gas;
●
our future cash
flows, liquidity and financial condition;
●
competition in the
oil and gas industry;
●
availability and
cost of capital;
●
impact of
environmental events, governmental and other third-party responses
to such events, and our ability to insure adequately against such
events;
●
cost of pending or
future litigation;
●
the effect that
acquisitions we may pursue have on our capital
expenditures;
●
purchase price or
other adjustments relating to asset and other acquisitions or
dispositions that may be unfavorable to us;
●
our ability to
retain or attract senior management and key technical employees;
and
●
success of
strategic plans, expectations and objectives for our future
operations.
Forward-looking
statements speak only as of the date of this prospectus or the date
of any document incorporated by reference in this prospectus, any
prospectus supplement or any free writing prospectus, as
applicable. Except to the extent required by applicable law or
regulation, we do not undertake any obligation to update
forward-looking statements to reflect events or circumstances after
the date of this prospectus, any prospectus supplement or any free
writing prospectus or to reflect the occurrence of unanticipated
events.
You
should also consider carefully the statements under and
incorporated by reference in “Risk Factors” in this
prospectus, any prospectus supplement, and other sections of this
prospectus, and the documents we incorporate by reference or file
as part of any prospectus supplement or free writing prospectus,
which address additional facts that could cause our actual results
to differ from those set forth in the forward-looking
statements. We caution investors not to place significant
reliance on the forward-looking statements contained in this
prospectus, any prospectus supplement, any free writing prospectus,
and the documents we incorporate by reference. We undertake no
obligation to publicly update or review any forward-looking
statements, whether as a result of new information, future
developments or otherwise, except as otherwise required by
law.
RISK FACTORS
Except
for the historical information contained in this prospectus or
incorporated by reference, this prospectus (and the information
incorporated by reference in this prospectus) and any prospectus
supplement or free writing prospectus contains forward-looking
statements that involve risks and uncertainties. Our actual results
could differ materially from those discussed herein or incorporated
by reference or as set forth in any prospectus supplement or free
writing prospectus. Factors that could cause or contribute to such
differences include, but are not limited to the following risks, as
well as those discussed in the section entitled “Risk Factors” contained
under Item 1A of Part I of our most recent Annual Report on Form
10-K, and under “Risk Factors” under Item
1A of Part II of our subsequent Quarterly Reports on Form 10-Q, as
the same may be amended, supplemented or superseded from time to
time by our subsequent filings and reports under the Exchange Act,
each of which are incorporated by reference in this prospectus. For
more information, see “Information Incorporated by
Reference.”
Investing in our
securities involves a high degree of risk. You should carefully
review the risks and uncertainties described below and under the
heading “Risk
Factors” contained in the applicable prospectus
supplement and any related free writing prospectus, and under
similar headings in the other documents that are incorporated by
reference into this prospectus, before deciding whether to purchase
any of the securities being registered pursuant to the registration
statement of which this prospectus is a part. Each of the risk
factors could adversely affect our business, operating results and
financial condition, as well as adversely affect the value of an
investment in our securities, and the occurrence of any of these
risks might cause you to lose all or part of your investment.
Moreover, the risks described are not the only ones that we face.
Additional risks not presently known to us or that we currently
believe are immaterial may also significantly impair our business
operations.
Risks Related To This Offering
Management will have broad discretion as to the use of the proceeds
from this offering and may not use the proceeds
effectively.
Because
we have not designated the amount of net proceeds from this
offering to be used for any particular purpose, our management will
have broad discretion as to the application of the net proceeds
from this offering and could use them for purposes other than those
contemplated at the time of the offering. Our management may use
the net proceeds for corporate purposes that may not improve our
financial condition or market value.
Resales of
our common stock in the public market during this offering by our
stockholders may cause the market price of our common stock to
fall.
We
may issue securities from time to time in connection with this
offering. This issuance from time to time of these new securities,
or our ability to issue these securities in this offering, could
result in resales of our securities, including our common stock, by
our current stockholders concerned about the potential dilution of
their holdings. In turn, these resales could have the effect of
depressing the market price for our common stock.
We currently have an illiquid and volatile market for our common
stock, and the market for our common stock is and may remain
illiquid and volatile in the future.
We currently have a highly sporadic,
illiquid and volatile market for our common stock, which market is
anticipated to remain sporadic, illiquid and volatile in the
future. Factors that could affect our stock price or
result in fluctuations in the market price or trading volume of our
common stock include:
●
our
actual or anticipated operating and financial performance and
drilling locations, including reserve estimates;
●
quarterly
variations in the rate of growth of our financial indicators, such
as net income per share, net income and cash flows, or those of
companies that are perceived to be similar to us;
●
changes in
revenue, cash flows or earnings estimates or publication of reports
by equity research analysts;
●
speculation in the
press or investment community;
●
public
reaction to our press releases, announcements and filings with the
SEC;
●
sales
of our common stock by us or other shareholders, or the perception
that such sales may occur;
●
the
limited amount of our freely tradable common stock available in the
public marketplace;
●
general financial
market conditions and oil and natural gas industry market
conditions, including fluctuations in commodity
prices;
●
the
realization of any of the risk factors presented in this
prospectus, any prospectus supplement, and the filings incorporated
by reference herein and therein;
●
the
recruitment or departure of key personnel;
●
commencement of,
or involvement in, litigation;
●
the
prices of oil and natural gas;
●
the
success of our exploration and development operations, and the
marketing of any oil and natural gas we produce;
●
changes in market
valuations of companies similar to ours; and
●
domestic and
international economic, legal and regulatory factors unrelated to
our performance.
Our common stock is listed on the NYSE
MKT under the symbol “PED.” Our stock price may be
impacted by factors that are unrelated or disproportionate to our
operating performance. The stock markets in general
have experienced extreme volatility that has often been unrelated
to the operating performance of particular companies. These broad
market fluctuations may adversely affect the trading price of our
common stock. Additionally, general economic, political and market
conditions, such as recessions, interest rates or international
currency fluctuations may adversely affect the market price of our
common stock. Due to the limited volume of our shares which trade,
we believe that our stock prices (bid, ask and closing prices) may
not be related to our actual value, and not reflect the actual
value of our common stock. Shareholders and potential investors in
our common stock should exercise caution before making an
investment in us.
Additionally, as a
result of the illiquidity of our common stock, investors may not be
interested in owning our common stock because of the inability to
acquire or sell a substantial block of our common stock at one
time. Such illiquidity could have an adverse effect on the market
price of our common stock. In addition, a shareholder may not be
able to borrow funds using our common stock as collateral because
lenders may be unwilling to accept the pledge of securities having
such a limited market. We cannot assure you that an active trading
market for our common stock will develop or, if one develops, be
sustained.
An active liquid trading market for our common stock may not
develop in the future.
Our
common stock currently trades on the NYSE MKT, although our common
stock’s trading volume is very low. Liquid and active trading
markets usually result in less price volatility and more efficiency
in carrying out investors’ purchase and sale orders. However,
our common stock may continue to have limited trading volume, and
many investors may not be interested in owning our common stock
because of the inability to acquire or sell a substantial block of
our common stock at one time. Such illiquidity could have an
adverse effect on the market price of our common stock. In
addition, a shareholder may not be able to borrow funds using our
common stock as collateral because lenders may be unwilling to
accept the pledge of securities having such a limited market. We
cannot assure you that an active trading market for our common
stock will develop or, if one develops, be sustained.
We do not presently intend to pay any cash dividends on or
repurchase any shares of our common stock.
We do
not presently intend to pay any cash dividends on our common stock
or to repurchase any shares of our common stock. Any payment of
future dividends will be at the discretion of the Board of
Directors and will depend on, among other things, our earnings,
financial condition, capital requirements, level of indebtedness,
statutory and contractual restrictions applying to the payment of
dividends and other considerations that our Board of Directors
deems relevant. Cash dividend payments in the future may only be
made out of legally available funds and, if we experience
substantial losses, such funds may not be available. Accordingly,
you may have to sell some or all of your common stock in order to
generate cash flow from your investment, and there is no guarantee
that the price of our common stock that will prevail in the market
will ever exceed the price paid by you.
We are subject to the Continued Listing Criteria of the NYSE MKT
and our failure to satisfy these criteria may result in delisting
of our common stock.
Our common stock is currently listed on the NYSE
MKT. In order to maintain this listing, we must maintain certain
share prices, financial and share distribution targets, including
maintaining a minimum amount of shareholders’ equity and a
minimum number of public shareholders. In addition to these
objective standards, the NYSE MKT may delist the securities of any
issuer if, in its opinion, the issuer’s financial condition
and/or operating results appear unsatisfactory; if it appears that
the extent of public distribution or the aggregate market value of
the security has become so reduced as to make continued listing on
the NYSE MKT inadvisable; if the issuer sells or disposes of
principal operating assets or ceases to be an operating company; if
an issuer fails to comply with the NYSE MKT’s listing
requirements; if an issuer’s common stock sells at what the
NYSE MKT considers a “low selling
price” (generally trading
below $0.20 per share for an extended period of time) and the
issuer fails to correct this via a reverse split of shares after
notification by the NYSE MKT (provided that issuers can also be
delisted if any shares of the issuer trade below $0.06 per share);
or if any other event occurs or any condition exists which makes
continued listing on the NYSE MKT, in its opinion,
inadvisable.
If
the NYSE MKT delists our common stock, investors may face material
adverse consequences, including, but not limited to, a lack of
trading market for our securities, reduced liquidity, decreased
analyst coverage of our securities, and an inability for us to
obtain additional financing to fund our operations.
If
we are delisted from the NYSE MKT, your ability to sell your shares
of our common stock may be limited by the penny stock restrictions,
which could further limit the marketability of your
shares.
If
our common stock is delisted, it could come within the definition
of “penny stock” as defined in the Exchange Act and
could be covered by Rule 15g-9 of the Exchange Act. That
Rule imposes additional sales practice requirements on
broker-dealers who sell securities to persons other than
established customers and accredited investors. For transactions
covered by Rule 15g-9, the broker-dealer must make a special
suitability determination for the purchaser and receive the
purchaser’s written agreement to the transaction prior to the
sale. Consequently, Rule 15g-9, if it were to become
applicable, would affect the ability or willingness of
broker-dealers to sell our securities, and accordingly would affect
the ability of stockholders to sell their securities in the public
market. These additional procedures could also limit our ability to
raise additional capital in the future.
Due to the fact that our common stock is listed on the NYSE MKT, we
are subject to financial and other reporting and corporate
governance requirements which increase our costs and
expenses.
We are currently required to file annual and quarterly information
and other reports with the Securities and Exchange Commission that
are specified in Sections 13 and 15(d) of the Exchange Act.
Additionally, due to the fact that our common stock is listed on
the NYSE MKT, we are also subject to the requirements to maintain
independent directors, comply with other corporate governance
requirements and are required to pay annual listing and stock
issuance fees. These obligations require a commitment of additional
resources including, but not limited, to additional expenses, and
may result in the diversion of our senior management’s time
and attention from our day-to-day operations. These obligations
increase our expenses and may make it more complicated or time
consuming for us to undertake certain corporate actions due to the
fact that we may require NYSE approval for such transactions and/or
NYSE rules may require us to obtain shareholder approval for such
transactions.
You may experience future dilution as a result of future equity
offerings or other equity issuances.
We may
in the future issue additional shares of our common stock or other
securities convertible into or exchangeable for our common stock.
We cannot assure you that we will be able to sell shares or other
securities in any other offering or other transactions at a price
per share that is equal to or greater than the price per share paid
by investors in this offering. The price per share at which we sell
additional shares of our common stock or other securities
convertible into or exchangeable for our common stock in future
transactions may be higher or lower than the price per share
paid by any investors in this
offering.
In
addition, we have a significant number of stock options and
warrants outstanding. To the extent that outstanding stock options
or warrants have been or may be exercised or other shares issued,
investors purchasing our common stock in this offering may
experience further dilution.
Future sales of our common stock could cause our stock price to
decline.
If our shareholders
sell substantial amounts of our common stock in the public market,
the market price of our common stock could decrease significantly.
The perception in the public market that our shareholders might
sell shares of our common stock could also depress the market price
of our common stock. Up to $100,000,000 in total
aggregate value of securities which are being registered by us in
this offering will be eligible for sale in the public markets from
time to time, when sold and issued by us. Additionally, if our
existing shareholders sell, or indicate an intent to sell,
substantial amounts of our common stock in the public market, the
trading price of our common stock could decline significantly. The
market price for shares of our common stock may drop significantly
when such securities are sold in the public markets. A decline in
the price of shares of our common stock might impede our ability to
raise capital through the issuance of additional shares of our
common stock or other equity securities.
USE OF PROCEEDS
Unless
otherwise indicated in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of the securities
offered in the prospectus and any prospectus supplement for future
drilling and development, additional leasehold acquisitions,
repayment of debt, working capital and general corporate purposes.
We may also use a portion of the net proceeds to acquire or invest
in businesses and assets that are complementary to our own,
although we have no current plans, commitments or agreements with
respect to any acquisitions as of the date of this prospectus.
Pending the uses described above, we intend to invest the net
proceeds in short-term, interest bearing, investment-grade
securities.
DESCRIPTION OF CAPITAL STOCK
The
following description of common stock and preferred stock
summarizes the material terms and provisions of the common stock
and preferred stock that we may offer under this prospectus, but is
not complete. For the complete terms of our common stock and
preferred stock, please refer to our certificate of incorporation,
any certificates of designation for our preferred stock, and
bylaws, as may be amended from time to time. While the terms we
have summarized below will apply generally to any future common
stock or preferred stock that we may offer, we will describe the
specific terms of any series of preferred stock in more detail in
the applicable prospectus supplement. If we so indicate in a
prospectus supplement, the terms of any preferred stock we offer
under that prospectus supplement may differ from the terms we
describe below.
As of
December 16, 2016, our authorized capital stock
consists of 300 million shares, consisting of 200 million shares of
common stock par value $0.001 per share, and 100 million shares of
preferred stock, par value $0.001 per share, of which 66,625 shares
have been designated as “Series A Convertible Preferred
Stock” (the “Series A preferred stock”). As of
the date of this prospectus, we had 49,849,297 shares of common
stock issued and outstanding and 66,625 shares of Series A
preferred stock issued and outstanding. The authorized and unissued
shares of common stock and the authorized and undesignated shares
of preferred stock are available for issuance without further
action by our stockholders, unless such action is required by
applicable law or the rules of any stock exchange on which our
securities may be listed. Unless approval of our stockholders is so
required, our Board of Directors will not seek stockholder approval
for the issuance and sale of our common stock or preferred
stock.
Common Stock
The
holders of our common stock are entitled to equal dividends and
distributions per share with respect to the common stock when, as
and if declared by the Board of Directors from funds legally
available therefore. No holder of any shares of common stock has a
preemptive right to subscribe for any of our securities, nor are
any common shares subject to redemption or convertible into other
securities. Upon liquidation, dissolution or winding-up of our
company, and after payment of creditors and preferred shareholders,
if any, the assets will be divided pro rata on a share-for-share
basis among the holders of the shares of common stock. All shares
of common stock now outstanding are, and all shares that we are
selling in this offering, upon their issuance and sale, will be,
fully paid, validly issued and non-assessable. Each share of our
common stock is entitled to one vote with respect to the election
of any director or any other matter upon which shareholders are
required or permitted to vote.
Preferred Stock
On February 23, 2015 (the
“Original Issuance
Date”), the Company
issued all 66,625 shares of Series A preferred stock to Golden
Globe Energy (US), LLC (“GGE”) in connection with an acquisition of
certain assets, all of which shares remain issued and outstanding
as of the date of this prospectus.
The 66,625 shares of Series A preferred stock
issued to GGE (i) had a liquidation preference senior to all of the
Company’s common stock equal to $400 per share (the
“Liquidation
Preference”) prior to the
date the Shareholder Approval (defined below) was received, (ii)
accrued an annual dividend equal to 10% of their Liquidation
Preference, payable annually from the date of issuance (the
“Dividend”)
prior to the date the Shareholder Approval (defined below) was
received, (iii) vote together with the common stock on all matters,
with each share having one (1) vote, and (iv) since the date of the
Shareholder Approval are convertible into common stock of the
Company on a 1,000:1 basis. On October 7, 2015, the Company
obtained shareholder approval of the issuance of the
Company’s common stock upon conversion of the Series A
preferred stock, and other related matters under applicable NYSE
MKT rules and regulations (the “Shareholder
Approval”). Upon our
receipt of Stockholder Approval, (x) the Series A preferred stock
automatically ceased accruing Dividends and all accrued and unpaid
Dividends were automatically forfeited and forgiven in their
entirety, (y) the liquidation preference of the Series A preferred
stock was reduced to $0.001 per share from $400 per share, and (z)
each share of Series A preferred stock became convertible into
common stock on a 1,000:1 basis.
Notwithstanding
the above, no conversion is allowed in the event the holder thereof
would beneficially own more than 9.9% of the Company’s common
stock or voting stock.
GGE,
the sole holder of our Series A preferred stock, has the right
pursuant to the certificate of designation designating the Series A
preferred stock, upon notice to us, voting separately as a single
class, to appoint designees to fill two (2) seats on our Board of
Directors, one of which must be an independent director as defined
by applicable rules and the exclusive right, voting the Series A
preferred stock as sole stockholder thereof, separately as a single
class, to elect such two (2) nominees to the Board of Directors.
The Board of Directors appointment rights continue until GGE no
longer holds any of the 15,000 shares of Series A preferred stock
designated as Tranche One Shares.
Under
our amended and restated certificate of formation, our Board of
Directors has the power, without further action by the holders of
the common stock, to designate the relative rights and preferences
of the preferred stock, and to issue the preferred stock in one or
more series as designated by our Board of Directors. The
designation of rights and preferences could include preferences as
to liquidation, redemption and conversion rights, voting rights,
dividends or other preferences, any of which may be dilutive of the
interest of the holders of the common stock or the preferred stock
of any other series. The issuance of preferred stock may have the
effect of delaying or preventing a change in control of our company
without further shareholder action and may adversely affect the
rights and powers, including voting rights, of the holders of the
common stock.
Business Combinations under Texas Law
A
number of provisions of Texas law, our certificate of formation and
bylaws could make more difficult the acquisition of our company by
means of a tender offer, a proxy contest or otherwise and the
removal of incumbent officers and directors. These provisions are
intended to discourage coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire control
of our company to negotiate first with our Board of
Directors.
We are subject to the provisions of Title 2,
Chapter 21, Subchapter M of the Texas Business Organizations Code
(the “Texas Business
Combination Law”). That
law provides that a Texas corporation may not engage in specified
types of business combinations, including mergers, consolidations
and asset sales, with a person, or an affiliate or associate of
that person, who is an “affiliated
shareholder”, for a
period of three years from the date that person became an
affiliated shareholder, subject to certain exceptions (described
below). An “affiliated
shareholder” is generally
defined as the holder of 20% or more of the corporation’s
voting shares. The law’s prohibitions do not apply if the
business combination or the acquisition of shares by the affiliated
shareholder was approved by the Board of Directors of the
corporation before the affiliated shareholder became an affiliated
shareholder; or the business combination was approved by the
affirmative vote of the holders of at least two-thirds of the
outstanding voting shares of the corporation not beneficially owned
by the affiliated shareholder, at a meeting of shareholders called
for that purpose, not less than six months after the affiliated
shareholder became an affiliated shareholder.
Because we have more than 100 of record
shareholders, we are considered an “issuing public
corporation” for purposes
of this law. The Texas Business Combination Law does not apply to
the following:
●
|
the
business combination of an issuing public corporation: where the
corporation’s original charter or bylaws contain a provision
expressly electing not to be governed by the Texas Business
Combination Law; or that adopts an amendment to its charter or
bylaws, by the affirmative vote of the holders, other than
affiliated shareholders, of at least two-thirds of the outstanding
voting shares of the corporation, expressly electing not to be
governed by the Texas Business Combination Law and so long as the
amendment does not take effect for 18 months following the date of
the vote and does not apply to a business combination with an
affiliated shareholder who became affiliated on or before the
effective date of the amendment;
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●
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a
business combination of an issuing public corporation with an
affiliated shareholder that became an affiliated shareholder
inadvertently, if the affiliated shareholder divests itself, as
soon as possible, of enough shares to no longer be an affiliated
shareholder and would not at any time within the three-year period
preceding the announcement of the business combination have been an
affiliated shareholder but for the inadvertent
acquisition;
|
●
|
a
business combination with an affiliated shareholder who became an
affiliated shareholder through a transfer of shares by will or
intestacy and continuously was an affiliated shareholder until the
announcement date of the business combination; or
|
●
|
a
business combination of a corporation with its wholly owned Texas
subsidiary if the subsidiary is not an affiliate or associate of
the affiliated shareholder other than by reason of the affiliated
shareholder’s beneficial ownership of voting shares of the
corporation.
|
Neither
our certificate of formation nor our bylaws contain any provision
expressly providing that we will not be subject to the Texas
Business Combination Law. The Texas Business Combination Law may
have the effect of inhibiting a non-negotiated merger or other
business combination involving our company, even if that event
would be beneficial to our shareholders.
Anti-Takeover Provisions of Our Charter Documents
Our
certificate of formation and bylaws contain various provisions
intended to promote the stability of our stockholder base and
render more difficult certain unsolicited or hostile attempts to
take us over, that could disrupt us, divert the attention of our
directors, officers and employees and adversely affect the
independence and integrity of our business. These provisions
include:
●
|
Special Meetings of Stockholders — Our bylaws
provide that special meetings of the stockholders may only be
called by our Chairman, our President, or upon written notice to
our Board of Directors by our stockholders holding not less than
30% of our outstanding voting capital stock.
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●
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Amendment of Bylaws — Our bylaws may be amended
by our Board of Directors alone.
|
●
|
Advance Notice Procedures — Our bylaws establish
an advance notice procedure for stockholder proposals to be brought
before an annual meeting of our stockholders. At an annual meeting,
our stockholders elect a Board of Directors and transact such other
business as may properly be brought before the meeting. By
contrast, at a special meeting, our stockholders may transact only
the business for the purposes specified in the notice of the
meeting.
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●
|
No cumulative voting — Our certificate of formation and bylaws do not
include a provision for cumulative voting in the election of
directors.
|
●
|
Vacancies — Our bylaws provide that vacancies on
our board may be filled by a majority of directors in office,
although less than a quorum, and not by the
stockholders.
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●
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Preferred Stock — Our certificate of formation allows us to issue
up to 100,000,000 shares of preferred stock, of which 66,625 shares
have been designated as Series A preferred stock. The undesignated
preferred stock may have rights senior to those of the common stock
and that otherwise could adversely affect the rights and powers,
including voting rights, of the holders of common stock. In some
circumstances, this issuance could have the effect of decreasing
the market price of the common stock as well as having an
anti-takeover effect.
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Authorized but Unissued Shares — Our Board of
Directors may cause us to issue our authorized but unissued shares
of common stock in the future without stockholders’ approval.
These additional shares may be utilized for a variety of corporate
purposes, including future public offerings to raise additional
capital, corporate acquisitions and employee benefit plans. The
existence of authorized but unissued shares of common stock could
render more difficult or discourage an attempt to obtain control of
a majority of our common stock by means of a proxy contest, tender
offer, merger or otherwise.
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Limitation of Liability and Indemnification of Officers and
Directors
Our
certificate of formation provides that our directors are not
personally liable to us or our shareholders for monetary damages
for an act or omission in their capacity as a director. A director
may, however, be found liable for, and we may be prohibited from
indemnifying them against:
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any
breach of the director’s duty of loyalty to us or
our shareholders;
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acts or
omissions not in good faith that constitute a breach of the
director’s duty to us;
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acts or
omissions that involve intentional misconduct or a knowing
violation of law;
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any
transaction from which the director receives an improper benefit;
or
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acts or
omissions for which the liability is expressly provided by an
applicable statute.
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Our
certificate of formation also provides that we will indemnify our
directors, and may indemnify our agents, to the fullest extent
permitted by applicable Texas law from any expenses, liabilities or
other matters. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted for directors,
officers and controlling persons of our company under our
certificate of formation, it is the position of the Securities
Exchange Commission that such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable.
Subchapter
C of Title 1 of Chapter 8 of the Texas Business Organizations Code
describes the terms and conditions under which a corporation is
authorized to indemnify its directors, officers and other agents
against judgments, penalties, fines, settlements and expenses that
they may incur in connection with proceedings brought against them,
or in which they are otherwise involved, as a result of their
service as directors, officers or other agents of the
corporation.
Indemnification Agreements
We
have entered into indemnification agreements with each of our
officers and directors pursuant to which we have agreed, to the
maximum extent permitted by applicable law and subject to the
specified terms and conditions set forth in each agreement, to
indemnify a director or officer who acts on our behalf and is made
or threatened to be made a party to any action or proceeding
against expenses, judgments, fines and amounts paid in settlement
that are incurred by such officer or director in connection with
the action or proceeding. The indemnification provisions apply
whether the action was instituted by a third party or by us. We
also maintain insurance on behalf of our officers and directors
that provides coverage for expenses and liabilities incurred by
them in their capacities as officers and directors.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is First American
Stock Transfer, Inc., located at 4747 N. 7th Street, Suite 170,
Phoenix, Arizona 85014.
DESCRIPTION OF PREFERRED STOCK
A
prospectus supplement relating to any series of preferred stock
being offered will include specific terms relating to the offering.
Such prospectus supplement will include:
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the
title and stated or par value of the preferred stock;
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the
number of shares of the preferred stock offered, the liquidation
preference per share and the offering price of the preferred
stock;
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the
dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to the preferred stock;
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whether
dividends shall be cumulative or non-cumulative and, if cumulative,
the date from which dividends on the preferred stock shall
accumulate;
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the
provisions for a sinking fund, if any, for the preferred
stock;
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any
voting rights of the preferred stock;
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the
provisions for redemption, if applicable, of the preferred stock
and any restriction on the repurchase or redemption of shares by
the Company while there is any arrearage in the payment of
dividends or sinking fund installments;
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any
listing of the preferred stock on any securities
exchange;
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the
terms and conditions, if applicable, upon which the preferred stock
will be convertible into our common stock, including the conversion
price or the manner of calculating the conversion price and
conversion period;
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if
appropriate, a discussion of Federal income tax consequences
applicable to the preferred stock; and
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any
other specific terms, preferences, rights, limitations or
restrictions of the preferred stock.
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The
terms, if any, on which the preferred stock may be convertible into
or exchangeable for our common stock will also be stated in the
preferred stock prospectus supplement. The terms will include
provisions as to whether conversion or exchange is mandatory, at
the option of the holder or at our option, and may include
provisions pursuant to which the number of shares of our common
stock to be received by the holders of preferred stock would be
subject to adjustment.
When we
issue shares of preferred stock, the shares will be fully paid and
non-assessable, which means the full purchase price of the shares
will have been paid and holders of the shares will not be assessed
any additional monies for the shares. Unless the applicable
prospectus supplement indicates otherwise, each series of the
preferred stock will rank equally with any outstanding shares of
our preferred stock and each other series of the preferred stock.
Unless the applicable prospectus supplement states otherwise, the
preferred stock will have no preemptive rights to subscribe for any
additional securities which are issued by us, meaning, the holders
of shares of preferred stock will have no right to buy any portion
of the issued securities.
In
addition, unless the applicable prospectus indicates otherwise, we
will have the right to “reopen” a previous issue
of a series of preferred stock by issuing additional preferred
stock of such series.
The
transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of each series of preferred stock will be named in
the prospectus supplement relating to such series.
DESCRIPTION OF WARRANTS
General
The
following description, together with the additional information we
may include in any applicable prospectus supplements and free
writing prospectuses, summarizes the material terms and provisions
of the warrants that we may offer under this prospectus, which may
consist of warrants to purchase common stock or preferred stock and
may be issued in one or more series. Warrants may be offered
independently or in combination with common stock or preferred
stock, or as a part of units, offered by any prospectus supplement.
While the terms we have summarized below will apply generally to
any warrants that we may offer under this prospectus, we will
describe the particular terms of any series of warrants in more
detail in the applicable prospectus supplement. The following
description of warrants will apply to the warrants offered by this
prospectus unless we provide otherwise in the applicable prospectus
supplement. The applicable prospectus supplement for a particular
series of warrants may specify different or additional
terms.
We will
file as exhibits to the registration statement of which this
prospectus is a part, or will incorporate by reference from reports
that we file with the SEC, the form of warrant and/or the warrant
agreement and warrant certificate, as applicable, that describe the
terms of the particular series of warrants we are offering, and any
supplemental agreements, before the issuance of such warrants. The
following summaries of material terms and provisions of the
warrants are subject to, and qualified in their entirety by
reference to, all the provisions of the form of warrant and/or the
warrant agreement and warrant certificate, as applicable, and any
supplemental agreements applicable to a particular series of
warrants that we may offer under this prospectus. We urge you to
read the applicable prospectus supplement related to the particular
series of warrants that we may offer under this prospectus, as well
as any related free writing prospectuses, and the complete form of
warrant and/or the warrant agreement and warrant certificate, as
applicable, and any supplemental agreements, that contain the terms
of the warrants.
The
prospectus supplement relating to a particular series of warrants
to purchase our common stock or preferred stock will describe the
terms of the warrants, including the following:
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the
title of the warrants;
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the
offering price for the warrants, if any;
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the
aggregate number of the warrants;
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the
designation and terms of the common stock or preferred stock that
may be purchased upon exercise of the warrants;
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if
applicable, the designation and terms of the securities with which
the warrants are issued and the number of warrants issued with each
security;
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if
applicable, the date from and after which the warrants and any
securities issued with the warrants will be separately
transferable;
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the
number of shares of common stock or preferred stock that may be
purchased upon exercise of a warrant and the exercise price for the
warrants;
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the
dates on which the right to exercise the warrants shall commence
and expire;
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if
applicable, the minimum or maximum amount of the warrants that may
be exercised at any one time;
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the
currency or currency units in which the offering price, if any, and
the exercise price are payable;
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if
applicable, a discussion of material U.S. federal income tax
considerations;
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the
anti-dilution provisions of the warrants, if any;
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the
redemption or call provisions, if any, applicable to the
warrants;
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any
provisions with respect to a holder’s right to require us to
repurchase the warrants upon a change in control; and
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any
additional material terms of the warrants, including terms,
procedures, and limitations relating to the exchange, exercise and
settlement of the warrants.
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Holders
of warrants will not be entitled to:
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vote,
consent or receive dividends;
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receive
notice as shareholders with respect to any meeting of shareholders
for the election of our directors or any other matter;
or
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exercise
any rights as shareholders of the Company.
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Exercise of Warrants
Each
warrant will entitle the holder to purchase the securities that we
specify in the applicable prospectus supplement or free writing
prospectus at the exercise price that we describe in the applicable
prospectus supplement. Unless we otherwise specify in the
applicable prospectus supplement, holders of the warrants may
exercise the warrants at any time up to the specified time on the
expiration date that we set forth in the applicable prospectus
supplement. After the close of business on the expiration date,
unexercised warrants will become void.
Holders
of the warrants may exercise the warrants by delivering the warrant
or warrant certificate representing the warrants to be exercised
together with specified information, and paying the required amount
to the warrant agent, if applicable, in immediately available
funds, as provided in the applicable prospectus supplement. We will
set forth on the reverse side of any warrant certificate and in the
applicable prospectus supplement the information that the holder of
the warrant will be required to deliver to any warrant
agent.
Upon
receipt of the required payment and any warrant certificate
properly completed and duly executed at the corporate trust office
of any warrant agent or any other office indicated in the
applicable prospectus supplement, we will issue and deliver the
securities purchasable upon such exercise. If fewer than all of the
warrants represented by a warrant certificate are exercised, then
we will issue a new warrant certificate for the remaining amount of
warrants. If we so indicate in the applicable prospectus
supplement, holders of the warrants may surrender securities as all
or part of the exercise price for warrants.
Enforceability of Rights by Holders of Warrants
Each
warrant agent, if any, will act solely as our agent under the
applicable warrant agreement and will not assume any obligation or
relationship of agency or trust with any holder of any warrant. A
single bank or trust company may act as warrant agent for more than
one issue of warrants. A warrant agent will have no duty or
responsibility in case of any default by us under the applicable
warrant agreement or warrant, including any duty or responsibility
to initiate any proceedings at law or otherwise, or to make any
demand upon us. Any holder of a warrant may, without the consent of
the related warrant agent or the holder of any other warrant,
enforce by appropriate legal action its right to exercise, and
receive the securities purchasable upon exercise of, its
warrants.
Amendments and Supplements to Warrant Agreements
We and
the relevant warrant agent may, with the consent of the holders of
at least a majority in number of the outstanding unexercised
warrants affected, modify or amend the warrant agreement and the
terms of the warrants. However, the warrant agreements may be
amended or supplemented without the consent of the holders of the
warrants issued thereunder to effect changes that are not
inconsistent with the provisions of the warrants and that do not
adversely affect the interests of the holders of the warrants.
Notwithstanding the foregoing, no such modification or amendment
may, without the consent of the holders of each warrant
affected:
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reduce
the amount receivable upon exercise, cancellation or
expiration;
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shorten
the period of time during which the warrants may be
exercised;
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otherwise
materially and adversely affect the exercise rights of the
beneficial owners of the warrants; or
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reduce
the percentage of outstanding warrants whose holders must consent
to modification or amendment of the applicable warrant agreement or
the terms of the warrants.
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Anti-dilution and Other Adjustments
Unless
otherwise indicated in the applicable prospectus supplement, the
exercise price of, and the number of shares of common stock covered
by a warrant, are subject to adjustment in certain events,
including:
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the
issuance of common stock as a dividend or distribution on the
common stock;
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subdivisions
and combinations of the common stock (or as applicable to warrants
to purchase preferred stock and the preferred stock);
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the
issuance to all holders of common stock of capital stock rights
entitling them to subscribe for or purchase common stock within 45
days after the date fixed for the determination of the stockholders
entitled to receive such capital stock rights, at less than the
current market price; and
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the
distribution to all holders of common stock of evidence of our
indebtedness or assets (excluding certain cash dividends and
distributions described below) or rights or warrants (excluding
those referred to above).
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We may,
in lieu of making any adjustment in the exercise price of, and the
number of shares of common stock covered by, a warrant, make proper
provision so that each holder of such warrant who exercises such
warrant (or any portion thereof):
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before
the record date for such distribution of separate certificates,
shall be entitled to receive upon such exercise, shares of common
stock issued with capital stock rights; and
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after
such record date and prior to the expiration, redemption or
termination of such capital stock rights, shall be entitled to
receive upon such exercise, in addition to the shares of common
stock issuable upon such exercise, the same number of such capital
stock rights as would a holder of the number of shares of common
stock that such warrants so exercised would have entitled the
holder thereof to acquire in accordance with the terms and
provisions applicable to the capital stock rights if such warrant
was exercised immediately prior to the record date for such
distribution.
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Common
stock owned by or held for our account or for the account of any of
our majority owned subsidiaries will not be deemed outstanding for
the purpose of any adjustment.
No
adjustment in the exercise price of, and the number of shares of
common stock covered by, a warrant will be made for regular
quarterly or other periodic or recurring cash dividends or
distributions of cash dividends or distributions to the extent paid
from retained earnings. Except as stated above, the exercise price
of, and the number of shares of common stock covered by, a warrant
will not be adjusted for the issuance of common stock or any
securities convertible into or exchangeable for common stock, or
securities carrying the right to purchase any of the
foregoing.
In the
case of a reclassification or change of the common stock, a
consolidation or merger involving us or sale or conveyance to
another corporation of our property and assets as an entirety or
substantially as an entirety, in each case as a result of which
holders of our common stock shall be entitled to receive stock,
securities, other property or assets (including cash) with respect
to or in exchange for such common stock, the holders of the
warrants then outstanding will be entitled thereafter to convert
such warrants into the kind and number of shares of stock and
amount of other securities or property which they would have
received upon such reclassification, change, consolidation, merger,
sale or conveyance had such warrants been exercised immediately
prior to such reclassification, change, consolidation, merger, sale
or conveyance.
Governing Law
Unless
we provide otherwise in the applicable prospectus supplement, the
warrants and warrant agreements will be governed by and construed
in accordance with the laws of the State of Texas.
DESCRIPTION OF UNITS
We
may issue, in one more series, units consisting of common stock,
preferred stock and/or warrants for the purchase of common stock
and/or preferred stock in any combination in such amounts and in
such numerous distinct series as we determine. While the terms we
have summarized below will apply generally to any units that we may
offer under this prospectus, we will describe the particular terms
of any series of units in more detail in the applicable prospectus
supplement. The terms of any units offered under a prospectus
supplement may differ from the terms described below.
We will
file as exhibits to the registration statement of which this
prospectus is a part, or will incorporate by reference from reports
that we file with the SEC, the form of unit agreement that
describes the terms of the series of units we are offering, and any
supplemental agreements, before the issuance of the related series
of units. The following summaries of material terms and provisions
of the units are subject to, and qualified in their entirety by
reference to, all the provisions of the unit agreement and any
supplemental agreements applicable to a particular series of units.
We urge you to read the applicable prospectus supplements related
to the particular series of units that we may offer under this
prospectus, as well as any related free writing prospectuses and
the complete unit agreement and any supplemental agreements that
contain the terms of the units.
Each
unit will be issued so that the holder of the unit is also the
holder of each security included in the unit. Thus, the holder of a
unit will have the rights and obligations of a holder of each
included security. The unit agreement under which a unit is issued
may provide that the securities included in the unit may not be
held or transferred separately, at any time or at any time before a
specified date.
We
will describe in the applicable prospectus supplement the terms of
the series of units being offered, including:
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the
designation and terms of the units and of the securities comprising
the units, including whether and under what circumstances those
securities may be held or transferred separately;
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any
provisions of the governing unit agreement that differ from those
described below; and
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any
provisions for the issuance, payment, settlement, transfer or
exchange of the units or of the securities comprising the
units.
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The
provisions described in this section, as well as those described
under “Description
of Capital Stock,” and “Description of Warrants”
will apply to each unit and to any common stock, preferred stock,
or warrant included in each unit, respectively.
Each
unit agent will act solely as our agent under the applicable unit
agreement and will not assume any obligation or relationship of
agency or trust with any holder of any unit. A single bank or trust
company may act as unit agent for more than one series of units. A
unit agent will have no duty or responsibility in case of any
default by us under the applicable unit agreement or unit,
including any duty or responsibility to initiate any proceedings at
law or otherwise, or to make any demand upon us. Any holder of a
unit may, without the consent of the related unit agent or the
holder of any other unit, enforce by appropriate legal action its
rights as holder under any security included in the
unit.
We, and
any unit agent and any of their agents, may treat the registered
holder of any unit certificate as an absolute owner of the units
evidenced by that certificate for any purpose and as the person
entitled to exercise the rights attaching to the units so
requested, despite any notice to the contrary.
Issuance in Series
We may
issue units in such amounts and in as many distinct series as we
wish. This section summarizes terms of the units that apply
generally to all series. Most of the financial and other specific
terms of a particular series will be described in the prospectus
supplement.
Governing Law
Unless
we provide otherwise in the applicable prospectus supplement, the
units and unit agreements will be governed by and construed in
accordance with the laws of the State of Texas.
PLAN OF DISTRIBUTION
We may
sell the securities offered by this prospectus in any one or more
of the following ways from time to time:
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directly
to investors, including through a specific bidding, auction or
other process or in privately negotiated
transactions;
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to
investors through agents;
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to or
through brokers or dealers;
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to the
public through underwriting syndicates led by one or more managing
underwriters;
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to one
or more underwriters acting alone for resale to investors or to the
public;
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through
a block trade in which the broker or dealer engaged to handle the
block trade will attempt to sell the securities as agent, but may
position and resell a portion of the block as principal to
facilitate the transaction;
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through
agents on a best-efforts basis; and
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through
a combination of any such methods of sale.
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We
may also sell the securities offered by this prospectus in
“at the market
offerings” within the meaning of Rule 415(a)(4)
of the Securities Act.
Sales
may be effected in transactions:
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on any
national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale, including
the NYSE MKT in the case of shares of our common
stock;
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in the
over-the-counter market;
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in
transactions otherwise than on such exchanges or services or in the
over-the-counter market;
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through
the writing of options; or
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through
the settlement of short sales.
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We
will provide in the applicable prospectus supplement the terms of
the offering and the method of distribution and will identify any
firms acting as underwriters, dealers or agents in connection with
the offering, including:
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the
name or names of any underwriters, dealers or
agents;
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the
amount of securities underwritten;
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the
purchase price of the securities and the proceeds to us from the
sale;
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any
over-allotment options under which underwriters may purchase
additional securities from us;
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any
underwriting discounts and other items constituting compensation to
underwriters, dealers or agents;
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any
public offering price;
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any
discounts or concessions allowed or reallowed or paid to
dealers;
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any
material relationships between the underwriters and the Company;
and
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any
securities exchange or market on which the securities offered in
the prospectus supplement may be listed.
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In
connection with the sale of the securities, we or the purchasers of
securities for whom the underwriter may act as agent, may
compensate the underwriter in the form of underwriting discounts or
commissions.
Any
underwritten offering may be on a best efforts or a firm commitment
basis. Underwriters, dealers and agents participating in the
securities distribution may be deemed to be underwriters, and any
discounts and commissions they receive and any profit they realize
on the resale of the securities may be deemed to be underwriting
discounts and commissions under the Securities Act. Underwriters
and their controlling persons, dealers and agents may be entitled,
under agreements entered into with us, to indemnification against
and contribution toward specific civil liabilities, including
liabilities under the Securities Act.
The
distribution of the securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be
changed, at varying prices determined at the time of sale, or at
prices determined as the applicable prospectus supplement
specifies.
In
connection with the sale of the securities, underwriters, dealers
or agents may be deemed to have received compensation from us in
the form of underwriting discounts or commissions and also may
receive commissions from securities purchasers for whom they may
act as agent. Underwriters may sell the securities to or through
dealers, and the dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or
commissions from the purchasers for whom they may act as
agent.
Unless
otherwise specified in the related prospectus supplement, each
series of securities will be a new issue with no established
trading market, other than shares of common stock of the Company,
which are listed on the NYSE MKT. Any common stock sold pursuant to
a prospectus supplement will be listed on the NYSE MKT, subject to
official notice of issuance and where applicable, subject to the requirements of the NYSE MKT (which
generally require shareholder approval for any transactions which
would result in the issuance of more than 20% of our then
outstanding shares of common stock or voting rights representing
over 20% of our then outstanding shares of stock). We may
elect to list any series of preferred stock, on an exchange, but we
are not obligated to do so. It is possible that one or more
underwriters may make a market in the securities, but such
underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. No assurance can be given
as to the liquidity of, or the trading market for, any offered
securities.
In
connection with an offering, the underwriters may purchase and sell
securities in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions
created by short sales. Short sales involve the sale by the
underwriters of a greater number of securities than they are
required to purchase in an offering. Stabilizing transactions
consist of bids or purchases made for the purpose of preventing or
retarding a decline in the market price of the securities while an
offering is in progress. The underwriters also may impose a penalty
bid. This occurs when a particular underwriter repays to the
underwriters a portion of the underwriting discount received by it
because the underwriters have repurchased securities sold by or for
the account of that underwriter in stabilizing or short-covering
transactions. These activities by the underwriters may stabilize,
maintain or otherwise affect the market price of the securities. As
a result, the price of the securities may be higher than the price
that otherwise might exist in the open market. If these activities
are commenced, they may be discontinued by the underwriters at any
time. Underwriters may engage in overallotment. If any underwriters
create a short position in the securities in an offering in which
they sell more securities than are set forth on the cover page of
the applicable prospectus supplement, the underwriters may reduce
that short position by purchasing the securities in the open
market.
Underwriters,
dealers or agents that participate in the offer of securities, or
their affiliates or associates, may have engaged or engage in
transactions with and perform services for, us or our affiliates in
the ordinary course of business for which they may have received or
receive customary fees and reimbursement of expenses.
We may
enter into derivative transactions with third parties, or sell
securities not covered by this prospectus to third parties in
privately negotiated transactions. If the applicable prospectus
supplement so indicates, in connection with any derivative
transaction, the third parties may sell securities covered by this
prospectus and the applicable prospectus supplement, including in
short sale transactions. If so, the third party may use securities
pledged by us or borrowed from us or others to settle those sales
or to close out any related open borrowings of stock, and may use
securities received from us in settlement of those derivatives to
close out any related open borrowings of stock. The third party in
such sale transactions will be an underwriter and, if not
identified in this prospectus, will be identified in the applicable
prospectus supplement or a post-effective amendment to the
registration statement of which this prospectus is a part. In
addition, we may otherwise loan or pledge securities to a financial
institution or other third party that in turn may sell the
securities short using this prospectus. Such financial institution
or other third party may transfer its economic short position to
investors in our securities or in connection with a concurrent
offering of other securities.
The
specific terms of any lock-up provisions in respect of any given
offering will be described in the applicable prospectus
supplement.
The
underwriters, dealers and agents may engage in transactions with
us, or perform services for us, in the ordinary course of business
for which they receive compensation.
LEGAL MATTERS
The
validity of the securities offered by this prospectus has been
passed upon for us by The Loev Law Firm, PC. Additional legal
matters may be passed upon for us, any underwriters, dealers or
agents, by counsel that we will name in the applicable prospectus
supplement.
EXPERTS
The
consolidated balance sheets of the Company as of December 31, 2015
and 2014, and the related consolidated statements of operations,
stockholders’ equity, and cash flows for the years then
ended, appearing in the Company’s Annual Report on Form 10-K
for the years ended December 31, 2015 and 2014, respectively (the
“Form
10-Ks”), have been audited by GBH CPAs, PC, as
set forth in their report thereon, and incorporated herein by
reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such reports given on the
authority of such firms as experts in accounting and
auditing.
Certain
of our oil and gas reserve estimates that are incorporated herein
by reference were based upon reports prepared by South Texas
Reservoir Alliance LLC, an independent professional engineering
firm specializing in the technical and financial evaluation of oil
and gas assets. These estimates are included and incorporated
herein in reliance on the authority of such firm as an expert in
such matters.
No
expert or counsel named in this prospectus as having prepared or
certified any part of this prospectus or having given an opinion
upon the validity of the securities being registered or upon other
legal matters in connection with the registration or offering of
the securities was employed on a contingency basis, or had, or is
to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant or any of its
parents or subsidiaries. Nor was any such person connected with the
registrant or any of its parents or subsidiaries as a promoter,
managing or principal underwriter, voting trustee, director,
officer or employee.
WHERE YOU CAN FIND MORE INFORMATION
We
file annual, quarterly, and current reports, proxy statements and
other information with the Securities and Exchange Commission
(“SEC”). Our SEC filings
are available to the public over the Internet at the SEC’s
web site at www.sec.gov and on the
“Investors,”
“SEC
Filings” page of our website at www.pacificenergydevelopment.com.
Information on our web site is not part of this prospectus, and we
do not desire to incorporate by reference such information herein.
You may also read and copy any document we file with the SEC at the
SEC’s Public Reference Room at 100 F Street N.E., Washington,
D.C. 20549. You can also obtain copies of the documents upon the
payment of a duplicating fee to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the
Public Reference Room. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC
like us. Our SEC filings are also available to the public from the
SEC’s website at http://www.sec.gov.
This
prospectus is part of the registration statement and does not
contain all of the information included in the registration
statement. Whenever a reference is made in this prospectus to any
of our contracts or other documents, the reference may not be
complete and, for a copy of the contract or document, you should
refer to the exhibits that are a part of the registration
statement.
This
prospectus omits some information contained in the registration
statement in accordance with SEC rules and regulations. You should
review the information and exhibits included in the registration
statement for further information about us and the securities we
are offering. Statements in this prospectus concerning any document
we filed as an exhibit to the registration statement or that we
otherwise filed with the SEC are not intended to be comprehensive
and are qualified by reference to these filings and documents. You
should review the complete document to evaluate these
statements.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The
Securities and Exchange Commission allows us to “incorporate by reference”
into this prospectus the information we file with it, which means
that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is
considered to be part of this prospectus from the date on which we
file that document. Any reports filed by us with the SEC (i) on or
after the date of filing of the registration statement and (ii) on
or after the date of this prospectus and before the termination of
the offering of the securities by means of this prospectus will
automatically update and, where applicable, supersede information
contained in this prospectus or incorporated by reference into this
prospectus.
We
incorporate by reference the documents listed below, all filings
filed by us pursuant to the Exchange Act after the date of the
registration statement of which this prospectus forms a part prior
to effectiveness of such registration statement, and any future
filings we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, prior to
the time that all securities covered by this prospectus have been
sold; provided, however, that we are not incorporating any
information furnished under either Item 2.02 or Item 7.01 of any
current report on Form 8-K:
●
|
Our
Annual Report on Form 10-K for the fiscal year ended December 31,
2015, filed with the SEC on March 29, 2016;
|
●
|
Our
Definitive Proxy Statement on Schedule 14A for our
2016 Annual Meeting of Shareholders, filed with the
SEC on November 8, 2016;
|
|
|
●
|
Our
Quarterly Reports on Form 10-Q for the quarters ended March 31,
2016, June 30, 2016, and September 30,
2016 filed with the SEC on May 19, 2016, August
11, 2016, and November 9, 2016,
respectively;
|
●
|
Our
Current Reports on Forms 8-K (other than information furnished
rather than filed) filed with the SEC on February 4, 2016, March 2,
2016, March 11, 2016, March 31, 2016, April 13, 2016, April 27,
2016, May 17, 2016, September 29, 2016, October 21, 2016, and
November 9, 2016; and
|
●
|
The
description of our common stock contained in our Registration
Statement on Form 8-A/A, filed with the SEC on September 5, 2013
(File No. 001-35922) pursuant to Section 12(b) of the Exchange Act,
including any amendment or report filed for the purpose of updating
such description.
|
These
documents contain important information about us, our business and
our financial condition. You may request a copy of these filings,
at no cost, by writing or telephoning us at:
PEDEVCO
Corp.
4125
Blackhawk Plaza Circle, Suite 201
Danville,
CALIFORNIA 94506
Phone:
(855) 733-3826
Fax:
(925) 494-3502
All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Act or the Exchange Act, excluding any
information in those documents that are deemed by the rules of the
SEC to be furnished but not filed, after the date of the filing of
this prospectus and before the termination of this offering shall
be deemed to be incorporated in this prospectus and to be a part
hereof from the date of the filing of such document. Any statement
contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for all purposes to the extent
that a statement contained in this prospectus, or in any other
subsequently filed document which is also incorporated or deemed to
be incorporated by reference, modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this prospectus. You will be deemed to have notice of all
information incorporated by reference in this prospectus as if that
information was included in this prospectus.
We
maintain an Internet website at www.pacificenergydevelopment.com where
the incorporated reports listed above can be accessed. Neither this
website nor the information on this website is included or
incorporated in, or is a part of, this prospectus.
The information in this preliminary prospectus is not complete and
may be changed. We may not sell these securities or accept an offer
to buy these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell these securities,
and it is not soliciting offers to buy these securities in any
state where such offer or sale is not
permitted.
PROSPECTUS
SUBJECT TO
COMPLETION, DATED DECEMBER 19,
2016
Up to $2,000,000 of Shares of Common Stock
PEDEVCO Corp.
We
have entered into an At Market Issuance Sales Agreement, or sales
agreement, with National Securities Corporation, or NSC, relating
to shares of our common stock offered by this prospectus. In
accordance with the terms of the sales agreement, we may offer and
sell shares of our common stock from time to time through NSC,
acting as agent, having an aggregate offering price of up to
$2,000,000.
Our common stock is listed on the NYSE MKT under
the symbol “PED.” On December 16, 2016,
the last reported sales price of our common stock was
$0.12.
Sales
of our common stock, if any, under this prospectus, may be made in
sales deemed to be “at the market offerings” as defined
in Rule 415 promulgated under the Securities Act of 1933, as
amended, or the Securities Act, including sales made directly on or
through the NYSE MKT, the existing trading market for our common
stock, or any other existing trading market for our common
stock, at market prices prevailing at the time of sale or at
prices related to such prevailing market prices, and/or any other
sales method that is deemed to be an "at the market offering"
as defined in Rule(a)(4) of the Securities Act. NSC will act
as a sales agent using commercially reasonable efforts consistent
with its normal trading and sales practices, on mutually agreed
terms between NSC and us. There is no arrangement for funds to be
received in any escrow, trust or similar arrangement.
The
compensation to NSC for sales of common stock sold pursuant to the
sales agreement is equal to 3.0% of the gross proceeds we receive
from the sales of our common stock. In connection with the sale of
the common stock on our behalf, NSC may be deemed to be an
“underwriter” within the meaning of the Securities Act,
and the compensation of NSC may be deemed to be underwriting
commissions or discounts. We have also agreed to provide
indemnification and contribution to NSC with respect to certain
liabilities, including liabilities under the Securities
Act.
The
aggregate market value of our outstanding common stock held by
non-affiliates, or public float, is approximately $4.9
million, based on approximately 49.85 million shares of outstanding
common stock, of which approximately 8.74 million
shares are held by affiliates, and a price of $0.12
per share, which was the closing price of our common stock on the
NYSE MKT on December 16, 2016. We have sold no
securities pursuant to General Instruction I.B.6 of Form S-3 during
the prior 12 calendar month period that ends on and includes the
date of this prospectus. Pursuant to General Instruction I.B.6 of
Form S-3, in no event will we sell securities in public primary
offerings on Form S-3 with a value exceeding more than one-third of
our public float in any 12 calendar month period so long as our
public float remains below $75.0 million.
Investing in our securities involves a high degree of risk. Please
read the information contained in, and incorporated by reference
under, the heading “Risk
Factors” beginning on
page S-9 of this prospectus,
and under similar headings in the other documents that are filed
after the date hereof and incorporated by reference into this
prospectus.
The net proceeds from sales under this prospectus
will be used as described under “Use of
Proceeds.”
You should carefully read and consider the
information under “Forward-Looking
Statements” and
“Risk
Factors” beginning on
pages S-8 and S-9 of this
prospectus, respectively.
Neither the Securities and Exchange Commission, nor any state
securities commission has approved or disapproved of these
securities or determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal
offense.
National
Securities Corporation
The
date of this prospectus is _____________, 2016
TABLE OF CONTENTS
|
Page
|
|
|
About This
Prospectus
|
S-1
|
Prospectus
Summary
|
S- 3
|
The
Offering
|
S- 7
|
Forward-Looking
Statements
|
S- 8
|
Risk
Factors
|
S- 9
|
Use of
Proceeds
|
S- 13
|
Price Range of
Common Stock
|
S- 14
|
Description of
Capital Stock
|
S- 14
|
Dividend
Policy
|
S- 18
|
Dilution
|
S- 18
|
Plan of
Distribution
|
S- 19
|
Legal
Matters
|
S- 20
|
Experts
|
S- 20
|
Where You Can Find
More Information
|
S- 20
|
Incorporation of
Certain Documents by Reference
|
S- 21
|
ABOUT THIS PROSPECTUS
This
prospectus relates to the offering of our common stock. Before
buying any of the common stock that we are offering, we urge you to
carefully read this prospectus, together with the information
incorporated by reference as described under the heading
“Incorporation of Certain Documents by Reference” in
this prospectus. These documents contain important information that
you should consider when making your investment
decision.
This
prospectus describes the specific terms of the common stock we are
offering and also adds to, and updates information contained in the
documents incorporated by reference into this prospectus. To the
extent there is a conflict between the information contained in
this prospectus, on the one hand, and the information contained in
any document incorporated by reference into this prospectus that
was filed with the Securities and Exchange Commission, or SEC,
before the date of this prospectus, on the other hand, you should
rely on the information in this prospectus. If any statement in one
of these documents is inconsistent with a statement in another
document having a later date—for example, a document
incorporated by reference into this prospectus— the statement
in the document having the later date modifies or supersedes the
earlier statement.
You
should rely only on the information contained or incorporated by
reference into this prospectus and any free writing prospectus. We
have not, and NSC has not, authorized anyone to provide you with
different information. If anyone provides you with different or
additional information, you should not rely on it. We are not, and
NSC is not, making an offer to sell these securities in any state
or jurisdiction where the offer or sale is not permitted. You
should not assume that the information contained in this prospectus
and any free writing prospectus is accurate on any date subsequent
to the date set forth on the front of the document or that any
information we have incorporated by reference is correct on any
date subsequent to the date of the document incorporated by
reference, even though this prospectus and any free writing
prospectus is delivered or securities are sold on a later date. We
have filed with the SEC a registration statement on Form S-3 with
respect to the securities offered hereby. This prospectus does not
contain all of the information set forth in the registration
statement, parts of which are omitted in accordance with the rules
and regulations of the SEC. For further information with respect to
us and the securities offered hereby, reference is made to the
registration statement and the exhibits that are a part of the
registration statement. We will disclose any material changes in
our affairs in a post-effective amendment to the registration
statement and this prospectus is a part, a future prospectus
supplement, a free writing prospectus or a future filing with the
Securities and Exchange Commission incorporated by reference in
this prospectus. It is important for you to read and consider all
the information contained in this prospectus, including the
documents incorporated by reference therein, in making your
investment decision.
We and NSC take no
responsibility for, and can provide no assurance as to the
reliability of, any other information that others may give you. We
are not, and NSC is not, making an offer to sell these securities
in any jurisdiction where the offer or sale is not
permitted.
Persons outside the United States who come into possession of this
prospectus must inform themselves about, and observe any
restrictions relating to, the offering of the securities and the
distribution of this prospectus outside of the United
States.
Our
logo and other trade names, trademarks, and service marks of
PEDEVCO Corp. appearing in this prospectus are the property of our
company. Other trade names, trademarks, and service marks appearing
in this prospectus are the property of their respective
holders.
The market data and certain other
statistical information used throughout this prospectus are based
on independent industry publications, government publications and
other published independent sources. Although we believe that these
third-party sources are reliable and that the information is
accurate and complete, we have not independently verified the
information. Some data is also based on our good faith estimates.
While we believe the market data included in this prospectus and
the information incorporated herein and therein by reference is
generally reliable and is based on reasonable assumptions, such
data involves risks and uncertainties and is subject to change
based on various factors, including those contained in and
incorporated by reference under the heading
“Risk
Factors” beginning on
page S-9 of this prospectus,
and under similar headings in the other documents that are filed
after the date hereof and incorporated by reference into this
prospectus.
All
references to “we”, “our”,
“us”, the “Company”, and
“PEDEVCO” in this prospectus mean PEDEVCO Corp. and all
entities owned or controlled by us except where it is made clear
that the term means only the parent company. The term
“you” refers to a prospective investor.
“Securities Act” means the Securities Act of 1933, as
amended; “Exchange Act” means the Securities Exchange
Act of 1934, as amended; and “SEC” or the
“Commission” means the United States Securities and
Exchange Commission.
Please carefully read this prospectus, any free
writing prospectus and any pricing supplement, in addition to the
information contained in the documents we refer to under the
headings “Where You Can Find
More Information” and “Incorporation of
Certain Documents by Reference”, on pages
S-20 and S-21, respectively.
PROSPECTUS
SUMMARY
The following
summary highlights material information found in more detail
elsewhere in, or incorporated by reference in, this prospectus. It
does not contain all of the information you should consider. As
such, before you decide to buy our common stock, in addition to the
following summary, we urge you to carefully read this entire
prospectus and documents incorporated by reference herein, and any
other prospectus supplements or free writing prospectuses,
especially the risks of investing in our common stock as discussed
under “Risk Factors.” The following summary is
qualified in its entirety by the detailed information appearing
elsewhere in this prospectus.
Overview
We are
an energy company engaged primarily in the acquisition,
exploration, development and production of oil and natural gas
shale plays in the Denver-Julesberg Basin (“D-J Basin”)
in Colorado, which contains hydrocarbon bearing deposits in several
formations, including the Niobrara, Codell, Greenhorn, Shannon,
J-Sand, and D-Sand. As of September 30, 2016, we held
approximately 11,556 net D-J Basin acres located in
Weld County, Colorado through our wholly-owned operating
subsidiary, Red Hawk Petroleum, LLC (“Red Hawk”), which
asset we refer to as our “D-J Basin Asset.” As of
September 30, 2016, we hold interests in 61 gross
(17.4 net) wells in our D-J Basin Asset, of which 14 gross (12.5
net) wells are operated by Red Hawk and currently producing, 25
gross (4.9 net) wells are non-operated and 22 wells have an
after-payout interest.
On December 29, 2015, the Company entered into an
Agreement and Plan of Merger and Reorganization (as amended to
date, the “GOM Merger Agreement”) with White Hawk
Energy, LLC (“White Hawk”) and GOM Holdings, LLC
(“GOM”), each a Delaware limited liability company. The
GOM Merger Agreement provides for the Company’s
acquisition of
GOM through an exchange of (i) an aggregate of 1,551,552 shares of
our restricted common stock and (ii) 698,448 restricted shares of
our to-be-designated Series B Convertible Preferred Stock (which
will be convertible into common stock on a 1,000:1 basis)(the
“Consideration Shares”), for 100% of the limited
liability company membership units of GOM (the “GOM
Units”), with the GOM Units being received by White Hawk and
GOM receiving the Consideration Shares from the Company (the
“GOM Merger”). On
February 29, 2016, the parties entered into an amendment to the GOM
Merger Agreement, which amended the merger agreement in order to
provide GOM additional time to meet certain closing conditions
contemplated by the GOM Merger Agreement, and on April 25, 2016,
the parties further amended the merger agreement to remove the
deadline for closing the merger and agreed to work expeditiously in
good faith toward closing. The Company and GOM continue to move
forward with the merger, which the Company is working to close as soon as
possible, subject to satisfaction of closing conditions including
possible approval by applicable bankruptcy
courts.
Below
is the total production volumes and total revenue net to the
Company for the three months ended September 30, 2016
and 2015 attributable to our D-J Basin Asset, including the
calculated production volumes and revenue numbers for our D-J Basin
Asset held indirectly through Condor Energy Technology, LLC
(“Condor”), a joint venture owned 20% by the Company
(which ownership interest the Company divested in February 2015),
that would be net to our interest if reported on a consolidated
basis and production realized from our recent D-J Basin Acquisition
beginning February 23, 2015 (described in greater detail below in
“D-J Basin Asset Acquisition”).
September
30, 2016
September
30, 2015
|
Three Months Ended
September
30,
2016
|
Three Months Ended
September
30,
2015
|
Oil volume (barrels
(Bbl))
|
25,617
|
25,256
|
Gas volume
(thousand cubic feet (Mcf))
|
51,896
|
112,239
|
Volume equivalent
(barrel of oil equivalent (Boe)) (1)
|
34,266
|
43,963
|
Revenue
(000’s)
|
$1,218
|
$1,318
|
*Represents
percentage of voting power based on 49,849,297 shares of common
stock and 66,625 shares of Series A Convertible Preferred Stock
outstanding as of December 16, 2016, and
excludes voting power to be acquired upon exercise of outstanding
options or warrants or other convertible securities.
Oil
and Gas Properties
We believe that the D-J Basin shale play represents among the most
promising unconventional oil and natural gas plays in the U.S. We
plan to continue to opportunistically seek additional acreage
proximate to our currently held acreage. Our strategy is to be the
operator, directly or through our subsidiaries and joint ventures,
in the majority of our acreage so we can dictate the pace of
development in order to execute our business plan. The
majority of our capital expenditure budget for the next twelve
months will be focused on the development of our D-J Basin Asset.
Our development plan calls for the development of approximately
$35.6 million in capital expenditures (of which $5.1 million has
been deployed to acquire interests in 2.1 net short lateral wells
already in 2016) in order to drill and complete, participate in the
drilling and completion of, and/or acquire approximately 8.5 net
wells in our D-J Basin Asset for the next twelve months. We plan to
fund our operations and business plan by utilizing projected cash
flow from operations, a $26 million debt facility we closed in
May 2016, our cash on hand and proceeds from future potential debt
and/or equity financings, which may include drilling partnerships.
In addition, we may seek additional funding through asset sales,
farm-out arrangements, lines of credit, or public or private debt
or equity financings to fund additional 2016-2017 capital
expenditures and/or repay or refinance a portion or all of our
outstanding debt. If market conditions are not conducive to
raising additional funds, the Company may choose to extend the
drilling program and associated capital expenditures further
into 2017.
Unless otherwise noted,
the following table presents summary data for our leasehold acreage
in our core D-J Basin Asset as of September 30,
2016 and our drilling capital budget with respect to
this acreage from December 1, 2016 to December 31,
2017, of which $5.1
million has been deployed to acquire interests in 2.1 net short
lateral wells. If commodity prices do
not increase significantly, we may delay drilling activities. The
ultimate amount of capital we will expend may fluctuate materially
based on, among other things, market conditions, commodity prices,
asset monetizations, the success of our drilling results as the
year progresses, availability of capital and whether we consummate
the GOM Merger. In the event the GOM Merger is consummated, the
Company plans to expand this development plan to incorporate
development of assets held by GOM, with the final schedule and
budget anticipated to be disclosed by the Company once they are
available.
|
|
|
|
Drilling Capital
Budget December 2016 - December
2017
|
Current Core Assets:
|
|
|
Potential Gross
-Drilling
Locations
(1)
|
|
|
Capital Cost
to
the Company
(2)(3)
|
D-J Basin
Asset
|
11,556
|
80
|
147
|
|
|
|
Long
lateral
|
|
|
|
6.4
|
$4,700,000
|
$30,080,000
|
Short
lateral
|
|
|
|
2.1
|
$2,600,000
|
$5,557,510
|
Total Assets
|
11,556
|
|
147
|
8.5
|
|
$35,637,510
|
(1)
Potential gross
drilling locations are conservatively calculated using 80 acre
spacing, and not taking into account additional wells that could be
drilled as a result of forced pooling in Niobrara, Colorado, where
the D-J Basin Asset is located, which allows for forced pooling,
and which may create more potential gross drilling locations than
acre spacing alone would otherwise indicate.
(2)
The Company has
deployed $5.1 million in capital to date in 2016 to acquire
interests in 2.1 net short lateral wells, which are included in the
“Net Wells” and “Capital Cost to the
Company” figures.
(3)
Costs per well are
gross costs while capital costs presented are net to our working
interests.
Additional Information
Additional
information about us can be obtained from the documents
incorporated by reference herein. See “Where You Can Find More
Information” beginning on page S-20.
Our
Contact Information
Our principal
office is located at 4125 Blackhawk Plaza Circle, Suite 201,
Danville, California 94506. Our phone number is (855) 733-3826. Our
website address is www.pacificenergydevelopment.com. Information on
our website or any other website is not, and will not be, a part of
this prospectus and is not, and will not be, incorporated by
reference into this prospectus.
THE OFFERING
Issuer:
|
|
PEDEVCO
Corp.
|
|
|
|
Common stock offered hereby:
|
|
Shares of our
common stock having an aggregate offering price of up to $2.0
million. In no event will we sell securities with a value
exceeding more than one-third of our “public float”
(the market value of our common stock and any other equity
securities that we may issue in the future that are held by
non-affiliates) in any 12-calendar month period.
|
|
|
|
Common stock to be outstanding after this offering:
|
|
Up to
16,666,667 shares, assuming sales at a price of
$0.12 per share, which was the closing price of our
common stock on the NYSE MKT on December 16, 2016. The
actual number of shares issued will vary depending on the sales
price under this offering.
|
|
|
|
Manner of offering:
|
|
“At the
market offering” that may be made from time to time through
our sales agent, National Securities Corporation. See the section
captioned “Plan of Distribution” beginning on page 19
of this prospectus.
|
|
|
|
Use of proceeds:
|
|
We intend to use
the net proceeds from this offering, if any, to fund development
and for working capital and general corporate purposes, including
general and administrative expenses. See the section captioned
“Use of Proceeds” beginning on page S-13 of this
prospectus.
|
|
|
|
Risk factors:
|
|
An investment in
our common stock involves a significant degree of risk. You should
read the “Risk Factors” section beginning on page S-9
of this prospectus and in the documents incorporated by reference
in this prospectus for a discussion of factors to consider before
deciding to purchase shares of our common stock.
|
|
|
|
NYSE MKT Symbol:
|
|
PED
|
Unless otherwise indicated, our common stock
and other securities, and the other information based thereon, is
as of December
16, 2016 and the number of shares of common stock
outstanding after the offering, assumes the sale of
16,666,667 shares of common stock at an assumed
offering price of $0.12 per share, the last reported
sale price of our common stock on the NYSE MKT on December
16, 2016, and excludes as of such date:
●
|
4,308,890
shares of common stock that are issuable upon the exercise of
outstanding options, with exercise prices ranging from $0.22 to
$67.20 per share, with a weighted-average exercise price of
$0.57 per share;
|
●
|
12,566,079 shares
of common stock that are issuable upon the exercise of outstanding
warrants to purchase capital stock, with exercise prices ranging
from $1.25 to $2.34 per share, with a weighted-average exercise
price of $0.80 per share;
|
|
|
●
|
66,625 shares of
Series A Convertible Preferred Stock that have the right to convert
into 66,625,000 shares of common stock; and
|
●
|
10,000,000 shares
of common stock that are authorized for future awards under our
employee equity incentive plans, of which 793,830 shares
remain available for future awards.
|
Additionally,
unless otherwise stated, all information in this
prospectus:
●
|
assumes no exercise
of outstanding options and warrants to purchase common stock, no
issuance of shares available for future issuance under our equity
compensation plans, and no conversion of our convertible preferred
stock or other convertible securities; and
|
●
|
reflects all
currency in United States dollars.
|
FORWARD-LOOKING STATEMENTS
Certain
information included in this prospectus, any free writing
prospectus we may file, the documents or information incorporated
by reference herein, other reports filed by us under the Securities
Exchange Act and any other written or oral statement by or on our
behalf contain forward-looking statements and information that are
based on management’s beliefs, expectations and conclusions,
drawn from certain assumptions and information currently
available.
This
prospectus, any free writing prospectus we may file, and the
documents or information incorporated by reference herein contain
forward-looking statements within the meaning of Section 27A of the
Securities Act, Section 21E of the Exchange Act, and the Private
Securities Litigation Reform Act of 1995, as amended. These
forward-looking statements are subject to risks and uncertainties
and other factors that may cause our actual results, performance or
achievements to be materially different from the results,
performance or achievements expressed or implied by the
forward-looking statements. You should not unduly rely on these
statements. Forward-looking statements may include statements about
our:
●
|
business
strategy;
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●
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reserves;
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●
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technology;
|
●
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cash flows and
liquidity;
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●
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financial strategy,
budget, projections and operating results;
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●
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oil and natural gas
realized prices;
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●
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timing and amount
of future production of oil and natural gas;
|
●
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availability of oil
field labor;
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●
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the amount, nature
and timing of capital expenditures, including future exploration
and development costs;
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●
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availability and
terms of capital;
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●
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drilling of
wells;
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●
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government
regulation and taxation of the oil and natural gas
industry;
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●
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marketing of oil
and natural gas;
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exploitation
projects or property acquisitions;
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●
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costs of exploiting
and developing our properties and conducting other
operations;
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●
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general economic
conditions;
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competition in the
oil and natural gas industry;
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●
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effectiveness of
our risk management activities;
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environmental
liabilities;
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●
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counterparty credit
risk;
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●
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developments in
oil-producing and natural gas-producing countries;
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●
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future operating
results;
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planned combination
transaction with GOM Holdings, LLC; and
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●
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estimated future
reserves and the present value of such reserves.
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We
identify forward-looking statements by use of terms such as
“may,” “will,” “expect,”
“anticipate”, “estimate”,
“hope”, “plan”, “believe”,
“predict”, “envision”,
“intend”, “continue”,
“potential”, “should”,
“confident”, “could” and similar words and
expressions, although some forward-looking statements may be
expressed differently. You should be aware that our actual results
could differ materially from those contained in the forward-looking
statements. You should consider carefully the statements included
in and incorporated by reference in this prospectus and any free
writing prospectus, which describe factors that could cause our
actual results to differ from those set forth in the
forward-looking statements.
The
above statements are not the exclusive means of identifying
forward-looking statements herein. Although forward-looking
statements contained or incorporated by reference in this
prospectus reflect our good faith judgment, such statements can
only be based on facts and factors currently known to us.
Consequently, forward-looking statements are inherently subject to
risks and uncertainties, including known and unknown risks and
uncertainties incidental to the exploration for, and the
acquisition, development, production and marketing of oil and
natural gas, and actual outcomes may differ materially from the
results and outcomes discussed in the forward-looking
statements.
Important
factors that could cause actual results to differ materially from
the forward-looking statements include, but are not limited
to:
●
changes
in production volumes and worldwide demand, including economic
conditions that might impact demand;
●
volatility
of commodity prices for oil and natural gas;
●
the
impact of governmental policies and/or regulations, including
changes in environmental and other laws, the interpretation and
enforcement related to those laws and regulations, liabilities
arising thereunder and the costs to comply with those laws and
regulations;
●
changes
in estimates of proved reserves;
●
inaccuracy
of reserve estimates and expected production rates;
●
risks
incidental to the production of oil and natural gas;
●
our
future cash flows, liquidity and financial condition;
●
competition
in the oil and gas industry;
●
availability
and cost of capital;
●
impact
of environmental events, governmental and other third-party
responses to such events, and our ability to insure adequately
against such events;
●
cost
of pending or future litigation;
●
the
effect that acquisitions we may pursue have on our capital
expenditures;
●
purchase
price or other adjustments relating to asset acquisitions or
dispositions that may be unfavorable to us;
●
our
ability to retain or attract senior management and key technical
employees; and
●
success
of strategic plans, expectations and objectives for our future
operations.
Forward-looking
statements speak only as of the date of this prospectus or the date
of any document incorporated by reference in this prospectus or any
free writing prospectus, as applicable. Except to the extent
required by applicable law or regulation, we do not undertake any
obligation to update forward-looking statements to reflect events
or circumstances after the date of this prospectus or any free
writing prospectus or to reflect the occurrence of unanticipated
events.
You should also consider carefully the statements
under and incorporated by reference in “Risk
Factors” in this
prospectus, and other sections of this prospectus, and the
documents we incorporate by reference or file as part of any free
writing prospectus, which address additional facts that could cause
our actual results to differ from those set forth in the
forward-looking statements. We caution investors not to place
significant reliance on the forward-looking statements contained in
this prospectus, any free writing prospectus, and the documents we
incorporate by reference. We undertake no obligation to publicly
update or review any forward-looking statements, whether as a
result of new information, future developments or otherwise, except
as otherwise required by law.
RISK FACTORS
Before
making an investment decision, you should consider the
“Risk
Factors” discussed in the section
entitled “Risk
Factors” contained under
Item 1A of Part I of our most recent annual report on Form 10-K,
under “Risk
Factors” under Item 1A of
Part II of our subsequent quarterly reports on Form 10-Q,
and all other information contained in
this prospectus and incorporated by reference in this prospectus,
and in any free writing prospectus, as the same may be amended,
supplemented or superseded from time to time by our subsequent
filings and reports under the Securities Act or the Exchange Act.
For more information, see “Incorporation of Certain
Documents by Reference” beginning on page S-21. The market or trading price of our
securities could decline due to any of these risks. In addition,
please read “Forward-Looking
Statements” beginning
on page 8 of this
prospectus, where we describe additional uncertainties associated
with our business and the forward-looking statements included or
incorporated by reference in this prospectus.
The securities offered herein are highly
speculative and should only be purchased by persons who can afford
to lose their entire investment in us. You should carefully
consider the following risk factors and the aforementioned risk
factors that are incorporated herein by reference and other
information in this prospectus before deciding to become a holder
of our common stock. The risks and uncertainties described in these
incorporated documents and described below are not the only risks
and uncertainties that we face. Additional risks and uncertainties
not presently known to us may also impair our business operations.
If any of these risks actually occur, our business and financial
results could be negatively affected to a significant extent. In
that event, the trading price of our common stock could decline,
and you may lose all or part of your investment in our common
stock.
Risks Related To This Offering
Management will have broad discretion as to the use of the proceeds
from this offering and may not use the proceeds
effectively.
Because
we have not designated the amount of net proceeds from this
offering to be used for any particular purpose, our management will
have broad discretion as to the application of the net proceeds
from this offering and could use them for purposes other than those
contemplated at the time of the offering. Our management may use
the net proceeds for corporate purposes that may not improve our
financial condition or market value.
Resales of
our common stock in the public market during this offering by our
stockholders may cause the market price of our common stock to
fall.
We
may issue common stock from time to time in connection with this
offering. This issuance from time to time of these new shares of
our common stock, or our ability to issue these shares of common
stock in this offering, could result in resales of our common stock
by our current stockholders concerned about the potential dilution
of their holdings. In turn, these resales could have the effect of
depressing the market price for our common stock.
The shares of common stock offered under this prospectus may be
sold in “at the market offerings,” and investors who
buy shares at different times will likely pay different
prices.
Investors
who purchase shares under this prospectus at different times will
likely pay different prices, and so may experience different
outcomes in their investment results. We will have discretion,
subject to market demand, to vary the timing, prices, and numbers
of shares sold, and there is no minimum or maximum sales price.
Investors may experience declines in the value of their shares as a
result of share sales made at prices lower than the prices they
paid.
We currently have an illiquid and volatile market for our common
stock, and the market for our common stock is and may remain
illiquid and volatile in the future.
We currently have a
highly sporadic, illiquid and volatile market for our common stock,
which market is anticipated to remain sporadic, illiquid and
volatile in the future. Factors that could affect our stock price or
result in fluctuations in the market price or trading volume of our
common stock include:
●
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our actual or
anticipated operating and financial performance and drilling
locations, including reserve estimates;
|
●
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quarterly
variations in the rate of growth of our financial indicators, such
as net income per share, net income and cash flows, or those of
companies that are perceived to be similar to us;
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●
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changes in revenue,
cash flows or earnings estimates or publication of reports by
equity research analysts;
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●
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speculation in the
press or investment community;
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●
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public reaction to
our press releases, announcements and filings with the
SEC;
|
●
|
sales of our common
stock by us or other shareholders, or the perception that such
sales may occur;
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●
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the limited amount
of our freely tradable common stock available in the public
marketplace;
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●
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general financial
market conditions and oil and natural gas industry market
conditions, including fluctuations in commodity
prices;
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●
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the realization of
any of the risk factors presented in this prospectus and the
filings incorporated by reference herein and therein;
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●
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the recruitment or
departure of key personnel;
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●
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commencement of, or
involvement in, litigation;
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●
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the prices of oil
and natural gas;
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●
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the success of our
exploration and development operations, and the marketing of any
oil and natural gas we produce;
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●
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changes in market
valuations of companies similar to ours; and
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●
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domestic and
international economic, legal and regulatory factors unrelated to
our performance.
|
Our common stock is
listed on the NYSE MKT under the symbol “PED.” Our
stock price may be impacted by factors that are unrelated or
disproportionate to our operating performance. The stock markets in general have
experienced extreme volatility that has often been unrelated to the
operating performance of particular companies. These broad market
fluctuations may adversely affect the trading price of our common
stock. Additionally, general economic,
political and market conditions, such as recessions, interest rates
or international currency fluctuations may adversely affect the
market price of our common stock. Due to the limited volume of our
shares which trade, we believe that our stock prices (bid, ask and
closing prices) may not be related to our actual value, and not
reflect the actual value of our common stock. Shareholders and
potential investors in our common stock should exercise caution
before making an investment in us.
Additionally,
as a result of the illiquidity of our common stock, investors may
not be interested in owning our common stock because of the
inability to acquire or sell a substantial block of our common
stock at one time. Such illiquidity could have an adverse effect on
the market price of our common stock. In addition, a shareholder
may not be able to borrow funds using our common stock as
collateral because lenders may be unwilling to accept the pledge of
securities having such a limited market. We cannot assure you that
an active trading market for our common stock will develop or, if
one develops, be sustained.
An active liquid trading market for our common stock may not
develop in the future.
Our
common stock currently trades on the NYSE MKT, although our common
stock’s trading volume is very low. Liquid and active
trading markets usually result in less price volatility and more
efficiency in carrying out investors’ purchase and sale
orders. However, our common stock may continue to have limited
trading volume, and many investors may not be interested in owning
our common stock because of the inability to acquire or sell a
substantial block of our common stock at one time. Such illiquidity
could have an adverse effect on the market price of our common
stock. In addition, a shareholder may not be able to borrow funds
using our common stock as collateral because lenders may be
unwilling to accept the pledge of securities having such a limited
market. We cannot assure you that an active trading market for our
common stock will develop or, if one develops, be
sustained.
We do not presently intend to pay any cash dividends on or
repurchase any shares of our common stock.
We
do not presently intend to pay any cash dividends on our common
stock or to repurchase any shares of our common stock. Any payment
of future dividends will be at the discretion of the board of
directors and will depend on, among other things, our earnings,
financial condition, capital requirements, level of indebtedness,
statutory and contractual restrictions applying to the payment of
dividends and other considerations that our board of directors
deems relevant. Cash dividend payments in the future may only be
made out of legally available funds and, if we experience
substantial losses, such funds may not be available. Accordingly,
you may have to sell some or all of your common stock in order to
generate cash flow from your investment, and there is no guarantee
that the price of our common stock that will prevail in the market
will ever exceed the price paid by you.
We are subject to the Continued Listing Criteria of the NYSE MKT
and our failure to satisfy these criteria may result in delisting
of our common stock.
Our
common stock is currently listed on the NYSE MKT. In order to
maintain this listing, we must maintain certain share prices,
financial and share distribution targets, including maintaining a
minimum amount of shareholders’ equity and a minimum number
of public shareholders. In addition to these objective standards,
the NYSE MKT may delist the securities of any issuer if, in its
opinion, the issuer’s financial condition and/or operating
results appear unsatisfactory; if it appears that the extent of
public distribution or the aggregate market value of the security
has become so reduced as to make continued listing on the NYSE MKT
inadvisable; if the issuer sells or disposes of principal operating
assets or ceases to be an operating company; if an issuer fails to
comply with the NYSE MKT’s listing requirements; if an
issuer’s common stock sells at what the NYSE MKT considers a
“low selling price” (generally trading below $0.20 per
share for an extended period of time) and the issuer fails to
correct this via a reverse split of shares after notification by
the NYSE MKT (provided that issuers can also be delisted if any
shares of the issuer trade below $0.06 per share); or if any other
event occurs or any condition exists which makes continued listing
on the NYSE MKT, in its opinion, inadvisable.
If
the NYSE MKT delists our common stock, investors may face material
adverse consequences, including, but not limited to, a lack of
trading market for our securities, reduced liquidity, decreased
analyst coverage of our securities, and an inability for us to
obtain additional financing to fund our operations.
If we are delisted from the NYSE MKT, your ability to sell your
shares of our common stock may be limited by the penny stock
restrictions, which could further limit the marketability of your
shares.
If
our common stock is delisted, it could come within the definition
of “penny stock” as defined in the Exchange Act and
could be covered by Rule 15g-9 of the Exchange Act. That
Rule imposes additional sales practice requirements on
broker-dealers who sell securities to persons other than
established customers and accredited investors. For transactions
covered by Rule 15g-9, the broker-dealer must make a special
suitability determination for the purchaser and receive the
purchaser’s written agreement to the transaction prior to the
sale. Consequently, Rule 15g-9, if it were to become
applicable, would affect the ability or willingness of
broker-dealers to sell our securities, and accordingly would affect
the ability of stockholders to sell their securities in the public
market. These additional procedures could also limit our ability to
raise additional capital in the future.
Due to the fact that our common stock is listed on the NYSE MKT, we
are subject to financial and other reporting and corporate
governance requirements which increase our costs and
expenses.
We are currently required to file annual and quarterly information
and other reports with the Securities and Exchange Commission that
are specified in Sections 13 and 15(d) of the Exchange Act.
Additionally, due to the fact that our common stock is listed on
the NYSE MKT, we are also subject to the requirements to maintain
independent directors, comply with other corporate governance
requirements and are required to pay annual listing and stock
issuance fees. These obligations require a commitment of additional
resources including, but not limited, to additional expenses, and
may result in the diversion of our senior management’s time
and attention from our day-to-day operations. These obligations
increase our expenses and may make it more complicated or time
consuming for us to undertake certain corporate actions due to the
fact that we may require NYSE approval for such transactions and/or
NYSE rules may require us to obtain shareholder approval for such
transactions.
You will experience immediate dilution in the book value per share
of the common stock you purchase.
The offering prices per share in this offering may
exceed the net tangible book value per share of our common stock.
Assuming that an aggregate of 16,666,667 shares of our
common stock are sold at a price
of $0.12 per share pursuant to this
prospectus, which was the last reported sale price of our common
stock on the NYSE MKT on December 16, 2016, for
aggregate gross proceeds of $2.0 million, and excluding the
deduction of commissions and estimated aggregate offering expenses
payable by us, you would experience immediate dilution
of $0.03 per share, representing the difference
between our as adjusted net tangible book value per share as of
September 30, 2016 after giving effect to this offering and the assumed
offering price. The exercise of outstanding stock options and
warrants may result in further dilution of your investment. See the
section entitled “Dilution” beginning
on page S-18 below for a more
detailed illustration of the dilution you would incur if you
participate in this offering.
You may experience future dilution as a result of future equity
offerings or other equity issuances.
We
may in the future issue additional shares of our common stock or
other securities convertible into or exchangeable for our common
stock. We cannot assure you that we will be able to sell shares or
other securities in any other offering or other transactions at a
price per share that is equal to or greater than the price per
share paid by investors in this offering. The price per share at
which we sell additional shares of our common stock or other
securities convertible into or exchangeable for our common stock in
future transactions may be higher or lower than the price per
share paid by any investors in this
offering.
In
addition, we have a significant number of stock options and
warrants outstanding. To the extent that outstanding stock options
or warrants have been or may be exercised or other shares issued,
investors purchasing our common stock in this offering may
experience further dilution.
Future sales of our common stock could cause our stock price to
decline.
If our shareholders sell substantial amounts of our common stock in
the public market, the market price of our common stock could
decrease significantly. The perception in the public market that
our shareholders might sell shares of our common stock could also
depress the market price of our common stock. Up to $100,000,000 in
total aggregate value of securities have been registered by us on a
“shelf” registration statement on Form S-3 (File No.
333-191869) that we filed with the Securities and Exchange
Commission on October 23, 2013, and which was declared effective on
November 5, 2013, and which we have filed an amendment
to/replacement of. To date, an aggregate of $19,500,378 in
securities have been sold by us under the Form S-3, leaving
$80,499,622 in securities which will be eligible for sale in the
public markets from time to time, when sold and issued by us,
subject to the requirements of Form S-3, which limits us, until
such time, if ever, as our public float exceeds $75 million, from
selling securities in a public primary offering under Form S-3 with
a value exceeding more than one-third of the aggregate market value
of the common stock held by non-affiliates of the Company every
twelve months. Additionally, if our existing shareholders sell, or
indicate an intention to sell, substantial amounts of our common
stock in the public market, the trading price of our common stock
could decline significantly. The market price for shares of our
common stock may drop significantly when such securities are sold
in the public markets. A decline in the price of shares of our
common stock might impede our ability to raise capital through the
issuance of additional shares of our common stock or other equity
securities.
USE OF PROCEEDS
Except
as described in any free writing prospectus that we may authorize
to be provided to you, we currently intend to use the net proceeds
from this offering, if any, to fund development and working
capital, and for general corporate purposes. Because there is no
minimum offering amount required as a condition to close this
offering, the actual total public offering amount, commissions and
proceeds to us, if any, are not determinable at this
time.
The amounts and timing of our actual expenditures will depend on
numerous factors. We may find it necessary or advisable to use
portions of the net proceeds for other purposes, and we will have
broad discretion in the application and allocation of the net
proceeds from this offering. Pending the use of the net
proceeds from this offering as described above, we intend to invest
the proceeds in investment grade, interest-bearing
instruments.
PRICE RANGE OF COMMON STOCK
Our common stock is
listed on the NYSE MKT under the ticker symbol
“PED.” The
following high and low per share sale prices of our common stock,
reflects inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual
transactions.
Quarter Ended
|
|
Low
|
March 31,
2016
|
$0.32
|
$0.15
|
June 30,
2016
|
0.41
|
0.16
|
September 30,
2016
|
0.32
|
0.16
|
December 31, 2016
(through December 16, 2016)
|
0.20
|
0.10
|
|
|
|
March 31,
2015
|
$0.95
|
$0.31
|
June 30,
2015
|
0.78
|
0.42
|
September 30,
2015
|
0.48
|
0.22
|
December 31,
2015
|
0.31
|
0.10
|
|
|
|
March 31,
2014
|
$2.83
|
$1.84
|
June 30,
2014
|
2.44
|
1.65
|
September 30,
2014
|
2.24
|
1.41
|
December 31,
2014
|
1.72
|
0.38
|
As of December 16, 2016, we
had 910 holders of
record of our common stock. The actual number of stockholders is
greater than this number of record holders and includes
stockholders who are beneficial owners but whose shares are held in
street name by brokers and other nominees.
DESCRIPTION
OF CAPITAL STOCK
As of
December 16, 2016, our authorized capital stock
consists of 300 million shares, consisting of 200 million shares of
common stock, par value $0.001 per share, and 100 million shares of
preferred stock, par value $0.001 per share, of which 66,625 shares
have been designated as “Series A Convertible Preferred
Stock” (the “Series A preferred stock”). As of
the date of this prospectus, we had 49,849,297 shares of common
stock issued and outstanding and 66,625 shares of Series A
preferred stock issued and outstanding. The authorized and unissued
shares of common stock and the authorized and undesignated shares
of preferred stock are available for issuance without further
action by our stockholders, unless such action is required by
applicable law or the rules of any stock exchange on which our
securities may be listed. Unless approval of our stockholders is so
required, our board of directors will not seek stockholder approval
for the issuance and sale of our common stock or preferred
stock.
Common Stock
The
holders of our common stock are entitled to equal dividends and
distributions per share with respect to the common stock when, as
and if declared by the board of directors from funds legally
available therefore. No holder of any shares of common stock has a
preemptive right to subscribe for any of our securities, nor are
any common shares subject to redemption or convertible into other
securities. Upon liquidation, dissolution or winding-up of our
company, and after payment of creditors and preferred shareholders,
if any, the assets will be divided pro rata on a share-for-share
basis among the holders of the shares of common stock. All shares
of common stock now outstanding are, and all shares that we are
selling in this offering, upon their issuance and sale, will be,
fully paid, validly issued and non-assessable. Each share of our
common stock is entitled to one vote with respect to the election
of any director or any other matter upon which shareholders are
required or permitted to vote.
Preferred Stock
On February 23, 2015 (the
“Original Issuance
Date”), the Company
issued all 66,625 shares of Series A preferred stock to Golden
Globe Energy (US), LLC (“GGE”) in connection with an acquisition of
certain assets, all of which shares remain issued and outstanding
as of the date of this prospectus.
The 66,625 shares of Series A preferred stock
issued to GGE (i) had a liquidation preference senior to all of the
Company’s common stock equal to $400 per share (the
“Liquidation
Preference”) prior to the
date the Shareholder Approval (defined below) was received, (ii)
accrued an annual dividend equal to 10% of their Liquidation
Preference, payable annually from the date of issuance (the
“Dividend”)
prior to the date the Shareholder Approval (defined below) was
received, (iii) vote together with the common stock on all matters,
with each share having one (1) vote, and (iv) since the date of the
Shareholder Approval are convertible into common stock of the
Company on a 1,000:1 basis. On October 7, 2015, the Company
obtained shareholder approval of the issuance of the
Company’s common stock upon conversion of the Series A
preferred stock, and other related matters under applicable NYSE
MKT rules and regulations (the “Shareholder
Approval”). Upon our
receipt of Stockholder Approval, (x) the Series A preferred stock
automatically ceased accruing Dividends and all accrued and unpaid
Dividends were automatically forfeited and forgiven in their
entirety, (y) the liquidation preference of the Series A preferred
stock was reduced to $0.001 per share from $400 per share, and (z)
each share of Series A preferred stock became convertible into
common stock on a 1,000:1 basis.
Notwithstanding
the above, no conversion is allowed in the event the holder thereof
would beneficially own more than 9.9% of the Company’s common
stock or voting stock.
GGE,
the sole holder of our Series A preferred stock, has the right
pursuant to the certificate of designation designating the Series A
preferred stock, upon notice to us, voting separately as a single
class, to appoint designees to fill two (2) seats on our board of
directors, one of which must be an independent director as defined
by applicable rules and the exclusive right, voting the Series A
preferred stock as sole stockholder thereof, separately as a single
class, to elect such two (2) nominees to the board of directors.
The board of directors appointment rights continue until GGE no
longer holds any of the 15,000 shares of Series A preferred stock
designated as Tranche One Shares.
Under
our amended and restated certificate of formation, our board of
directors has the power, without further action by the holders of
the common stock, to designate the relative rights and preferences
of the preferred stock, and to issue the preferred stock in one or
more series as designated by our board of directors. The
designation of rights and preferences could include preferences as
to liquidation, redemption and conversion rights, voting rights,
dividends or other preferences, any of which may be dilutive of the
interest of the holders of the common stock or the preferred stock
of any other series. The issuance of preferred stock may have the
effect of delaying or preventing a change in control of our company
without further shareholder action and may adversely affect the
rights and powers, including voting rights, of the holders of the
common stock.
Business Combinations under Texas Law
A
number of provisions of Texas law, our certificate of formation and
bylaws could make it more difficult for the acquisition of our
company by means of a tender offer, a proxy contest or otherwise
and the removal of incumbent officers and directors. These
provisions are intended to discourage coercive takeover practices
and inadequate takeover bids and to encourage persons seeking to
acquire control of our company to negotiate first with our board of
directors.
We are subject to the provisions of Title 2,
Chapter 21, Subchapter M of the Texas Business Organizations Code
(the “Texas Business
Combination Law”). That
law provides that a Texas corporation may not engage in specified
types of business combinations, including mergers, consolidations
and asset sales, with a person, or an affiliate or associate of
that person, who is an “affiliated
shareholder”, for a
period of three years from the date that person became an
affiliated shareholder, subject to certain exceptions (described
below). An “affiliated
shareholder” is generally
defined as the holder of 20% or more of the corporation’s
voting shares. The law’s prohibitions do not apply if the
business combination or the acquisition of shares by the affiliated
shareholder was approved by the board of directors of the
corporation before the affiliated shareholder became an affiliated
shareholder; or the business combination was approved by the
affirmative vote of the holders of at least two-thirds of the
outstanding voting shares of the corporation not beneficially owned
by the affiliated shareholder, at a meeting of shareholders called
for that purpose, not less than six months after the affiliated
shareholder became an affiliated shareholder.
Because we have more than 100 of record
shareholders, we are considered an “issuing public
corporation” for purposes
of this law. The Texas Business Combination Law does not apply to
the following:
●
|
the business
combination of an issuing public corporation: where the
corporation’s original charter or bylaws contain a provision
expressly electing not to be governed by the Texas Business
Combination Law; or that adopts an amendment to its charter or
bylaws, by the affirmative vote of the holders, other than
affiliated shareholders, of at least two-thirds of the outstanding
voting shares of the corporation, expressly electing not to be
governed by the Texas Business Combination Law and so long as the
amendment does not take effect for 18 months following the date of
the vote and does not apply to a business combination with an
affiliated shareholder who became affiliated on or before the
effective date of the amendment;
|
●
|
a business
combination of an issuing public corporation with an affiliated
shareholder that became an affiliated shareholder inadvertently, if
the affiliated shareholder divests itself, as soon as possible, of
enough shares to no longer be an affiliated shareholder and would
not at any time within the three-year period preceding the
announcement of the business combination have been an affiliated
shareholder but for the inadvertent acquisition;
|
●
|
a business
combination with an affiliated shareholder who became an affiliated
shareholder through a transfer of shares by will or intestacy and
continuously was an affiliated shareholder until the announcement
date of the business combination; or
|
●
|
a business
combination of a corporation with its wholly owned Texas subsidiary
if the subsidiary is not an affiliate or associate of the
affiliated shareholder other than by reason of the affiliated
shareholder’s beneficial ownership of voting shares of the
corporation.
|
Neither
our certificate of formation, nor our bylaws contain any provision
expressly providing that we will not be subject to the Texas
Business Combination Law. The Texas Business Combination Law may
have the effect of inhibiting a non-negotiated merger or other
business combination involving our company, even if that event
would be beneficial to our shareholders.
Anti-Takeover Provisions of Our Charter Documents
Our
certificate of formation and bylaws contain various provisions
intended to promote the stability of our stockholder base and
render more difficult certain unsolicited or hostile attempts to
take us over, that could disrupt us, divert the attention of our
directors, officers and employees and adversely affect the
independence and integrity of our business. These provisions
include:
●
|
Special Meetings of Stockholders
— Our bylaws provide that special meetings of the
stockholders may only be called by our Chairman, our President, or
upon written notice to our board of directors by our stockholders
holding not less than 30% of our outstanding voting capital
stock.
|
●
|
Amendment of Bylaws — Our
bylaws may be amended by our board of directors alone.
|
●
|
Advance Notice Procedures
— Our bylaws establish an advance notice
procedure for stockholder proposals to be brought before an annual
meeting of our stockholders. At an annual meeting, our stockholders
elect a board of directors and transact such other business as may
properly be brought before the meeting. By contrast, at a special
meeting, our stockholders may transact only the business for the
purposes specified in the notice of the meeting.
|
●
|
No cumulative voting — Our
certificate of formation and
bylaws do not include a provision for cumulative voting in
the election of directors.
|
●
|
Vacancies — Our bylaws
provide that vacancies on our board may be filled by a majority of
directors in office, although less than a quorum, and not by the
stockholders.
|
●
|
Preferred Stock — Our
certificate of formation allows
us to issue up to 100,000,000 shares of preferred stock, of which
66,625 shares have been designated as Series A preferred stock. The
undesignated preferred stock may have rights senior to those of the
common stock and that otherwise could adversely affect the rights
and powers, including voting rights, of the holders of common
stock. In some circumstances, this issuance could have the effect
of decreasing the market price of the common stock as well as
having an anti-takeover effect.
|
●
|
Authorized but Unissued Shares
— Our board of directors may cause us to issue
our authorized but unissued shares of common stock in the future
without stockholders’ approval. These additional shares may
be utilized for a variety of corporate purposes, including future
public offerings to raise additional capital, corporate
acquisitions and employee benefit plans. The existence of
authorized but unissued shares of common stock could render more
difficult or discourage an attempt to obtain control of a majority
of our common stock by means of a proxy contest, tender offer,
merger or otherwise.
|
Limitation of Liability and Indemnification of Officers and
Directors
Our
certificate of formation provides that our directors are not
personally liable to us or our shareholders for monetary damages
for an act or omission in their capacity as a director. A director
may, however, be found liable for, and we may be prohibited from
indemnifying them against:
●
|
any breach of the
director’s duty of loyalty to us or
our shareholders;
|
●
|
acts or omissions
not in good faith that constitute a breach of the director’s
duty to us;
|
●
|
acts or omissions
that involve intentional misconduct or a knowing violation of
law;
|
●
|
any transaction
from which the director receives an improper benefit;
or
|
●
|
acts or omissions
for which the liability is expressly provided by an applicable
statute.
|
Our
certificate of formation also provides that we will indemnify our
directors, and may indemnify our agents, to the fullest extent
permitted by applicable Texas law from any expenses, liabilities or
other matters. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted for directors, officers
and controlling persons of our company under our certificate of
formation, it is the position of the SEC that such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable.
Subchapter
C of Title 1 of Chapter 8 of the Texas Business Organizations Code
describes the terms and conditions under which a corporation is
authorized to indemnify its directors, officers and other agents
against judgments, penalties, fines, settlements and expenses that
they may incur in connection with proceedings brought against them,
or in which they are otherwise involved, as a result of their
service as directors, officers or other agents of the
corporation.
Indemnification Agreements
We
have entered into indemnification agreements with each of our
officers and directors pursuant to which we have agreed, to the
maximum extent permitted by applicable law and subject to the
specified terms and conditions set forth in each agreement, to
indemnify a director or officer who acts on our behalf and is made
or threatened to be made a party to any action or proceeding
against expenses, judgments, fines and amounts paid in settlement
that are incurred by such officer or director in connection with
the action or proceeding. The indemnification provisions apply
whether the action was instituted by a third party or by us. We
also maintain insurance on behalf of our officers and directors
that provides coverage for expenses and liabilities incurred by
them in their capacities as officers and directors.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is First American
Stock Transfer, Inc., located at 4747 N. 7th Street, Suite 170,
Phoenix, Arizona 85014.
DIVIDEND POLICY
We
have never declared or paid any dividends on our common stock and
do not anticipate that we will pay dividends in the foreseeable
future. Any payment of cash dividends on our common stock in the
future will be dependent upon the amount of funds legally
available, our earnings, if any, our financial condition, our
anticipated capital requirements and other factors that the board
of directors may think are relevant. However, we currently intend
for the foreseeable future to follow a policy of retaining all of
our earnings, if any, to finance the development and expansion of
our business and, therefore, do not expect to pay any dividends on
our common stock in the foreseeable future.
DILUTION
If
you invest in our common stock offered hereby, your ownership
interest will be diluted to the extent of the difference between
the offering price per share of common stock in this offering and
the net tangible book value per share of our common stock
immediately after this offering. Net tangible book value per share
represents total tangible assets less total liabilities, divided by
the number of shares of common stock outstanding. Dilution in net
tangible book value per share represents the difference between the
amount per share paid by purchasers of shares in this offering and
the net tangible book value per share of common stock immediately
after the closing of this offering.
After giving effect to the sale of our common stock
pursuant to this prospectus in the aggregate amount of $2.0 million
at an assumed offering price of $0.12 per share, the
last reported sale price of our common stock on the NYSE MKT on
December 16, 2016, and excluding the deduction of
commissions and estimated aggregate offering expenses payable by us, our net tangible
book value as of September 30, 2016 would have been
$6.0 million, or $0.09 per share of
common stock. This represents an immediate increase in
the net tangible book value of $0.01 per share to our
existing stockholders and an immediate dilution in net tangible
book value of $0.03 per share to new
investors. The following table
illustrates this per share dilution:
Assumed offering
price per share:
|
$0.12
|
Historical net
tangible book value per share at September 30,
2016
|
$0.08
|
Increase
per share attributable to investors purchasing shares in this
offering:
|
$0.01
|
As adjusted net
tangible book value per share as of September 30, 2016
after giving effect to this offering:
|
$0.09
|
Dilution per share
to new investors purchasing shares in this offering:
|
$0.03
|
The
foregoing table is based on 49,849,297 shares of our
common stock outstanding as of September 30,
2016.
The table above assumes for
illustrative purposes that an aggregate of 16,666,667
shares of our common stock are sold pursuant to this prospectus at
a price of $0.12 per share, the last reported sale
price of our common stock on the NYSE MKT on December
16, 2016, for aggregate gross proceeds of $2.0 million. The
shares sold in this offering, if any, will be sold from time to
time at various prices. An increase of $0.05 per share in the price
at which the shares are sold from the assumed offering price to
$0.17 per share, assuming all of our common stock in
the aggregate amount of $2.0 million is sold at that price, would
result in an adjusted net tangible book value per share after the
offering of $0.10 per share and would increase the
dilution in net tangible book value per share to new investors in
this offering to $0.07 per share, excluding the
deduction of commissions and estimated aggregate offering expenses
payable by us. Any sales of our
common stock pursuant to this prospectus at a price at or below
$0.08 per share, assuming all of our common stock in
the aggregate amount of $2.0 million is sold at that price and
excluding the deductions of commissions and estimated aggregate
offering expenses payable by us, would result in no dilution in net
tangible book value per share after the offering to new investors
in this offering because the Company’s net tangible book
value per share is $0.08 per share, calculated as of
September 30, 2016. This information is supplied for
illustrative purposes only.
To
the extent that any of our outstanding options or warrants are
exercised, our convertible preferred stock is converted, we grant
additional options under our stock option plans or grant additional
warrants, we issue additional convertible securities, or we issue
additional shares of common stock in the future, there may be
further dilution to new investors.
PLAN OF DISTRIBUTION
We
have entered into an At Market Issuance Sales Agreement, or sales
agreement, with National Securities Corporation, or NSC, under
which we may issue and sell shares of our common stock having
aggregate sales proceeds of up to $2,000,000 from time to time
through NSC acting as agent. Sales of our common stock, if any,
under this prospectus may be made in sales deemed to be “at
the market offerings” as defined in Rule 415 promulgated
under the Securities Act, including sales made directly on or
through the NYSE MKT, the existing trading market for our common
stock, or any other existing trading market for our common
stock, at market prices prevailing at the time
of sale or at prices related to such prevailing market prices,
and/or any other sales method that is deemed to be an "at the
market offering" as defined in Rule 415(a)(4) of the Securities
Act.
NSC
will offer our common stock subject to the terms and conditions of
the sales agreement as agreed upon by us and NSC. Each time we wish
to issue and sell common stock under the sales agreement, we will
notify NSC of the number of shares to be issued, the dates on which
such sales are anticipated to be made and any minimum price below
which sales may not be made. Once we have so instructed NSC, unless
NSC declines to accept the terms of such notice, NSC has agreed to
use its commercially reasonable efforts consistent with its normal
trading and sales practices to sell such shares up to the amount
specified on such terms. The obligations of NSC under the sales
agreement to sell our common stock are subject to a number of
conditions that we must meet.
The
settlement between us and NSC is generally anticipated to occur on
the third trading day following the date on which the sale was
made. Sales of our common stock as contemplated in this prospectus
will be settled through the facilities of The Depository Trust
Company or by such other means as we and NSC may agree upon. There
is no arrangement for funds to be received in an escrow, trust or
similar arrangement.
We
will pay NSC a commission equal to 3.0% of the gross proceeds we
receive from the sales of our common stock. We also agreed to
reimburse NSC for legal expenses incurred by it up to $30,000 in
the aggregate, payable in three (3) installments as follows: (i)
$10,000 on the date of the sales agreement; (ii) $10,000 on the
date that is thirty (30) days from the date of the sales agreement;
and (iii) the balance due (not to exceed $10,000) on the date that
is sixty (60) days from the date of the sales agreement, of
which $20,000 has been paid as of the date hereof. Because
there is no minimum offering amount required as a condition to
close this offering, the actual total public offering amount,
commissions and proceeds to us, if any, are not determinable at
this time.
In connection with the sale of the common stock on
our behalf, NSC may, and will with respect to sales effected in an
“at the market offering,” be deemed to be an
“underwriter” within the meaning of the Securities Act,
and the compensation of NSC may, and will with respect to sales
effected in an “at the market offering,” be deemed to be underwriting commissions
or discounts. We have agreed to provide indemnification and
contribution to NSC with respect to certain civil liabilities,
including liabilities under the Securities Act. We estimate that
the total expenses for the offering, excluding compensation payable
to NSC under the terms of the sales agreement, will be less than
$50,000.
The
offering of our common stock pursuant to the sales agreement will
terminate upon the earlier of (i) the sale of all of our common
stock provided for in this prospectus, or (ii) termination of the
sales agreement as permitted therein.
This summary of the material provisions of the
sales agreement does not purport to be a complete statement of its
terms and conditions. A copy of the sales agreement has been filed
with the SEC as an exhibit to a Current Report on Form 8-K and is
incorporated by reference into the registration statement of which
this prospectus is a part. See “Where You Can Find More
Information” beginning on S-20 below.
To
the extent required by Regulation M under the Exchange Act, NSC
will not engage in any market making activities involving our
common stock while the offering is ongoing under this
prospectus.
NSC
may distribute this prospectus electronically.
LEGAL MATTERS
The validity of the issuance of the securities
offered hereby will be passed upon by The Loev Law Firm, PC,
Bellaire, Texas.
Certain legal matters in connection with this offering will be
passed upon for NSC by Duane Morris LLP, Newark, New
Jersey.
EXPERTS
GBH
CPAs, PC, independent registered public accounting firm, has
audited our consolidated financial statements included in our
Annual Report on Form 10-K for the year ended December 31, 2015, as
set forth in their report (which report expresses an unqualified
opinion and includes an explanatory paragraph relating to the
Company’s ability to continue as a going concern), which is
incorporated by reference in this prospectus and elsewhere in the
registration statement. Our financial statements are incorporated
by reference in reliance on GBH CPAs, PC’s reports, given on
their authority as experts in accounting and auditing.
Certain
of our oil and gas reserve estimates that are incorporated herein
by reference were based upon a report prepared by South Texas
Reservoir Alliance LLC, an independent professional engineering
firm specializing in the technical evaluation of oil and gas assets
and estimates of future net income. These estimates are included
and incorporated by reference herein in reliance on the authority
of such firm as an expert in such matters.
No
expert or counsel named in this prospectus as having prepared or
certified any part of this prospectus or having given an opinion
upon the validity of the securities being registered or upon other
legal matters in connection with the registration or offering of
the securities was employed on a contingency basis, or had, or is
to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant or any of its
parents or subsidiaries. Nor was any such person connected with the
registrant or any of its parents or subsidiaries as a promoter,
managing or principal underwriter, voting trustee, director,
officer or employee.
WHERE YOU CAN FIND MORE INFORMATION
We file annual,
quarterly, and current reports, proxy statements and other
information with the SEC. Our SEC filings are available to the
public over the Internet at the SEC’s web site at www.sec.gov
and on the “Investors,”
“SEC
Filings” page of our
website at www.pacificenergydevelopment.com.
Information on our website is not part of this prospectus, and we
do not desire to incorporate by reference such information herein.
You may also read and copy any document we file with the SEC at the
SEC’s Public Reference Room at 100 F Street N.E., Washington,
D.C. 20549. You can also obtain copies of the documents upon the
payment of a duplicating fee to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the
Public Reference Room. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC
like us. Our SEC filings are also available to the public from the
SEC’s website at http://www.sec.gov.
This
prospectus is part of a registration statement and does not contain
all of the information included in the registration statement.
Whenever a reference is made in this prospectus to any of our
contracts or other documents, the reference may not be complete
and, for a copy of the contract or document, you should refer to
the exhibits that are a part of the registration statement. You
should rely only on the information contained or incorporated by
reference in this prospectus and any supplement or amendment
hereto. We have not authorized anyone to provide you with
information different from that contained in this prospectus. The
securities offered under this prospectus are offered only in
jurisdictions where offers and sales are permitted. The information
contained in this prospectus, and any free writing prospectus, is
accurate only as of the date of this prospectus and any such free
writing prospectus, regardless of the time of delivery of this
prospectus, or any free writing prospectus, or any sale of the
securities.
This
prospectus and any free writing prospectus, constitute a part of a
registration statement we filed with the SEC under the Securities
Act. This prospectus and any free writing prospectus, do not
contain all of the information set forth in the registration
statement, certain parts of which are omitted in accordance with
the rules and regulations of the SEC. For further information with
respect to the Company and the Shares, reference is hereby made to
the registration statement. The registration statement may be
inspected at the public reference facilities maintained by the SEC
at the addresses set forth in the paragraph above. Statements
contained herein concerning any document filed as an exhibit are
not necessarily complete, and, in each instance, reference is made
to the copy of such document filed as an exhibit to the
registration statement. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The
SEC allows us to “incorporate by reference” into this
prospectus the information we file with it, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is considered
to be part of this prospectus from the date on which we file that
document. Any reports filed by us with the SEC (i) on or after the
date of filing of the registration statement and (ii) on or after
the date of this prospectus and before the termination of the
offering of the securities by means of this prospectus will
automatically update and, where applicable, supersede information
contained in this prospectus or incorporated by reference into this
prospectus.
We
incorporate by reference the documents listed below, all filings
filed by us pursuant to the Exchange Act after the date of the
registration statement of which this prospectus forms a part, and
any future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the time that all
securities covered by this prospectus have been sold or this
offering has been terminated; provided, however, that we are not
incorporating any information furnished under either Item 2.02 or
Item 7.01 of any current report on Form 8-K:
●
Our
Annual Report on Form 10-K for the fiscal year ended December 31,
2015, filed with the SEC on March 29, 2016;
●
Our
Definitive Proxy Statement on Schedule 14A for our
2016 Annual Meeting of Shareholders, filed with the
SEC on November 8, 2016;
●
Our
Quarterly Reports on Form 10-Q for the quarters ended March 30,
2016, June 30, 2016 and September 30,
2016 filed with the SEC on May 19, 2016, August
11, 2016 and November 9, 2016,
respectively;
●
Our
Current Reports on Forms 8-K (other than information furnished
rather than filed) filed with the SEC on February 4, 2016, March 2,
2016, March 11, 2016, March 31, 2016, April 13, 2016, April 27,
2016, May 17, 2016, September 29, 2016, October 21,
2016, and November 9, 2016; and
●
The
description of our common stock contained in our Registration
Statement on Form 8-A/A, filed with the SEC on September 5, 2013
(File No. 001-35922) pursuant to Section 12(b) of the Exchange Act,
including any amendment or report filed for the purpose of updating
such description.
These
documents contain important information about us, our business and
our financial condition. You may request a copy of these filings,
at no cost, by writing or telephoning us at:
PEDEVCO
Corp.
4125
Blackhawk Plaza Circle, Suite 201
Danville,
California 94506
Phone:
(855) 733-3826
Fax: (925)
494-3502
All documents filed by us pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Act or the Exchange
Act, excluding any information in those documents that are deemed
by the rules of the SEC to be furnished but not filed, after the
date of this filing and before the termination of this offering
shall be deemed to be incorporated in this prospectus and to be a
part hereof from the date of the filing of such document. Any
statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for all purposes to
the extent that a statement contained in this prospectus or in any
other subsequently filed document which is also incorporated or
deemed to be incorporated by reference, modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this prospectus. You will be deemed to have notice of all
information incorporated by reference in this prospectus as if that
information was included in this prospectus.
We maintain an Internet website
at www.pacificenergydevelopment.com where
the incorporated reports listed above can be accessed. Neither this
website nor the information on this website is included or
incorporated in, or is a part of, this
prospectus.
Up to $2,000,000 of Shares of
Common Stock
PEDEVCO Corp.
___________
PROSPECTUS
___________
National Securities
Corporation
______________, 2016
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The
following table sets forth the various expenses, all of which will
be borne by us, in connection with the sale and distribution of the
securities being registered, other than the underwriting discounts
and commissions. All amounts shown are estimates except for the
Securities and Exchange Commission registration fee.
Description
|
|
|
|
Filing Fee -
Securities and Exchange Commission
|
$12,880
|
Attorney’s
fees and expenses
|
*
|
Accountant’s
fees and expenses
|
*
|
Stock exchange and
listing fees
|
*
|
Transfer
agent’s and registrar fees and expenses
|
*
|
Printing and
engraving expenses
|
*
|
Trustee fees and
expenses
|
*
|
Miscellaneous
expenses
|
*
|
|
|
Total
|
$*
|
*
Estimated expenses that are not presently known because they depend
upon, among other things, the number of offerings that will be made
pursuant to this registration statement, the amount and type of
securities being offered and the timing of such
offerings.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our
certificate of formation provides that our directors are not liable
to us or our shareholders for monetary damages for an act or
omission in their capacity as a director. A director may, however,
be found liable for, and we may be prohibited from indemnifying
them against:
●
|
any
breach of the director’s duty of loyalty to us or
our or its shareholders;
|
●
|
acts or
omissions not in good faith that constitute a breach of the
director’s duty to us;
|
●
|
acts or
omissions that involve intentional misconduct or a knowing
violation of law;
|
●
|
any
transaction from which the director receives an improper benefit;
or
|
●
|
acts or
omissions for which the liability is expressly provided by an
applicable statute.
|
Our
certificate of formation also provides that we will indemnify our
directors, and may indemnify our agents, to the fullest extent
permitted by applicable Texas law from any expenses, liabilities or
other matters. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted for directors, officers
and controlling persons of our company under our certificate of
formation, it is the position of the SEC that such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable.
Subchapter
C of Title I of Chapter 8 of the Texas Business Organization Code
describes the terms and conditions under which a corporation is
authorized to indemnify its directors, officers and other agents
against judgments, penalties, fines, settlements and expenses that
they may incur in connection with proceedings brought against them,
or in which they are otherwise involved, as a result of their
service as directors, officers or other agents of the
corporation.
Indemnification Agreements
We
have entered into indemnification agreements with each of our
officers and directors pursuant to which we have agreed, to the
maximum extent permitted by applicable law and subject to the
specified terms and conditions set forth in each agreement, to
indemnify a director or officer who acts on our behalf and is made
or threatened to be made a party to any action or proceeding
against expenses, judgments, fines and amounts paid in settlement
that are incurred by such officer or director in connection with
the action or proceeding. The indemnification provisions apply
whether the action was instituted by a third party or by us. We
also maintain insurance on behalf of our officers and directors
that provides coverage for expenses and liabilities incurred by
them in their capacities as officers and directors.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)
Exhibits Pursuant to Item 601 of Regulation S-K:
A list
of exhibits filed with this registration statement on Form
S-3/A is set forth on the Exhibit Index and is
incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement
to:
(i) Include
any prospectus required by Section 10(a)(3) of the Securities
Act;
(ii)
Reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the “Calculation
of Registration Fee” table in the effective
registration statement; and
(iii)
Include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however,
that paragraphs (1)(i), (1)(ii) and (i)(iii) above do not apply if
the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or
furnished to the Commission by the registrant pursuant to sections
13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”) that are incorporated by reference in the
registration statement, or is contained in a form of prospectus
filed pursuant to Rule 424(b) of this chapter that is part of the
registration statement.
(2)
That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(4)
That, for the purpose of determining liability under the Securities
Act to any purchaser:
(A)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3)
shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the
registration statement; and
(B)
Each prospectus required to be filed pursuant to Rule 424(b)(2),
(b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x) for the purpose of providing the
information required by section 10(a) of the Securities Act shall
be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used
after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided
in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to
be a new effective date of the registration statement relating to
the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in
any such document immediately prior to such effective
date.
(5)
That, for the purpose of determining liability of the registrant
under the Securities Act to any purchaser in the initial
distribution of the securities:
The
undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used
to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities
to such purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
(ii)
Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by
the undersigned registrant to the purchaser.
The
undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of
the registrant’s annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan’s annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
The
undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus to each person to whom the prospectus
is sent or given, the latest annual report to security holders that
is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim
financial information.
Insofar
as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
The
undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period, to set
forth the results of the subscription offer, the transactions by
the underwriters during the subscription period, the amount of
unsubscribed securities to be purchased by the underwriters, and
the terms of any subsequent reoffering thereof. If any public
offering by the underwriters is to be made on terms differing from
those set forth on the cover page of the prospectus, a
post-effective amendment will be filed to set forth the terms of
such offering.
The
undersigned registrant hereby undertakes that:
(1) For
purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this registration statement as of the time
it was declared effective.
(2) For
the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3/A
and has duly caused this Registration Statement to be signed on its
behalf by the undersigned thereunto duly authorized, in the City of
Danville, California, on December 19,
2016
|
|
|
PEDEVCO CORP.
|
|
|
|
By: /s/ Michael L. Peterson
|
|
Michael
L. Peterson
|
|
Chief
Executive Officer
|
|
(Principal
Executive Officer)
|
|
|
|
By:/s/ Gregory Overholtzer
|
|
Gregory
Overholtzer
|
|
Chief
Financial Officer
|
|
(Principal
Financial and Accounting Officer)
|
KNOW
ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Michael L. Peterson and Gregory
Overholtzer, as his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him/her and
in his/her name, place and stead, in any and all capacities, to
sign any and all amendments (including post-effective amendments)
to this Registration Statement, and any subsequent registration
statements pursuant to Rule 462 of the Securities Act of 1933 and
to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he/she might or could do in
person, hereby ratifying and confirming all that each of said
attorney-in-fact or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the
requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature
|
Title
|
Date
|
|
|
|
By:
/s/ Michael L.
Peterson
Michael
L. Peterson
|
President
and Chief Executive Officer
(Principal
Executive Officer)
|
December
19, 2016
|
|
|
|
By:
*
Gregory
Overholtzer
|
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
|
December 19, 2016
|
|
|
|
By:
*
Frank
C. Ingriselli
|
Chairman
of the Board of Directors
|
December 19, 2016
|
|
|
|
By:
*
David
Z. Steinberg
|
Director
|
December 19, 2016
|
|
|
|
By:
*
David
C. Crikelair
|
Director
|
December 19, 2016
|
|
|
|
By:
*
Elizabeth
P. Smith
|
Director
|
December 19, 2016
|
|
|
|
* By:
/s/ Michael L.
Peterson |
|
Michael L.
Peterson, Attorney-in-Fact
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|
EXHIBIT INDEX
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|
Incorporated By Reference
|
Exhibit No.
|
Description
|
Filed With This Form S-3
|
Form
|
Exhibit
|
Filing Date/Period
|
File
Number
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|
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|
*1.1
|
Form of underwriting agreement (or other similar
agreement)
|
|
|
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|
|
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|
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|
1.2
|
At Market Issuance Sales Agreement by and between the Registrant
and National Securities Corporation, dated September 29,
2016
|
|
8-K
|
1.1
|
9/29/16
|
001-35922
|
|
|
|
|
|
|
|
2.1+
|
Agreement and Plan of Merger and Reorganization dated as of
December 29, 2015, by and among PEDEVCO Corp., White Hawk Energy,
LLC, and GOM Holdings, LLC
|
|
8-K
|
2.1
|
12/20/15
|
001-35922
|
|
|
|
|
|
|
|
2.2+
|
Amendment No. 1 to Agreement and Plan of Merger and Reorganization
dated as of February 29, 2016, by and among PEDEVCO Corp., White
Hawk Energy, LLC, and GOM Holdings, LLC
|
|
8-K
|
2.1
|
3/2/16
|
001-35922
|
|
|
|
|
|
|
|
2.3+
|
Amendment No. 2 to Agreement and Plan of Merger and Reorganization
dated as of April 25, 2016, by and among PEDEVCO Corp., White Hawk
Energy, LLC, and GOM Holdings, LLC
|
|
8-K
|
2.1
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4/27/16
|
001-35922
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|
|
|
|
|
|
|
3.1
|
Amended and Restated Certificate of Formation and Designation by
Blast Acquisition Corp. and Pacific Energy Development
Corp.
|
|
8-K
|
3.1
|
8/2/12
|
000-53725
|
|
|
|
|
|
|
|
3.2
|
Certificate of Amendment of Amended and Restated Certificate of
Formation
|
|
8-K
|
3.1
|
4/23/13
|
000-53725
|
|
|
|
|
|
|
|
3.3
|
Amended and Restated Certificate of Designations of PEDEVCO Corp.
Establishing the Designations, Preferences, Limitations and
Relative Rights of its Series A Convertible Preferred
Stock
|
|
8-K
|
3.1
|
2/24/15
|
000-35922
|
|
|
|
|
|
|
|
3.4
|
Bylaws of PEDEVCO Corp. (formerly Blast Energy Services,
Inc.)
|
|
8-K
|
3.3
|
3/6/08
|
333-64122
|
|
|
|
|
|
|
|
3.5
|
Amendment to the Bylaws (December 2, 2012)
|
|
8-K
|
3.1
|
12/6/12
|
000-53725
|
|
|
|
|
|
|
|
3.6
|
Amendment to the Bylaws (October 21, 2016)
|
|
8-K
|
3.1
|
10/21/16
|
001-35922
|
|
|
|
|
|
|
|
4.1
|
Form of Common Stock Certificate for PEDEVCO CORP.
|
|
S-3
|
4.1
|
10/23/13
|
333-191869
|
|
|
|
|
|
|
|
4.2
|
Form of PEDEVCO Corp. Series A Preferred Stock
Certificate
|
|
10-K
|
4.2
|
3/31/14
|
001-35922
|
|
|
|
|
|
|
|
*4.3
|
Form of Warrant Agreement
|
|
|
|
|
|
*4.4
|
Form of Warrant Certificate
|
|
|
|
|
|
|
|
|
|
|
|
|
*4.5
|
Certificate of Designation of Preferred
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
*4.6
|
Form of Preferred Stock Certificate
|
|
|
|
|
|
|
|
|
|
|
|
|
*4.7
|
Form of Unit Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
*4.8
|
Form
of Unit Certificate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opinion and consent
of The Loev Law Firm, PC re: the legality of the securities being
registered |
X
|
|
|
|
|
|
|
|
|
|
|
|
|
Consent of GBH
CPAs, PC |
X
|
|
|
|
|
|
|
|
|
|
|
|
**23.2
|
Consent of The Loev
Law Firm, PC (included in Exhibit 5.1) |
X
|
|
|
|
|
|
|
|
|
|
|
|
|
Consent
of South Texas Reservoir Alliance LLC
|
X
|
|
|
|
|
|
|
|
|
|
|
|
**24.1
|
Power of Attorney
(included in the signature page to this registration
statement). |
X
|
|
|
|
|
|
|
|
|
|
|
|
* If
applicable, to be filed by amendment or by a report filed under the
Securities Exchange Act of 1934, as amended, and incorporated
herein by reference.
**
Filed herewith.
+Schedules and exhibits have been omitted pursuant to Item
601(b)(2) of Regulation S-K. A copy of any omitted schedule or
exhibit will be furnished supplementally to the Securities and
Exchange Commission upon request; provided, however that PEDEVCO
Corp. may request confidential treatment pursuant to Rule 24b-2 of
the Securities Exchange Act of 1934, as amended, for any schedule
or exhibit so furnished.
II-7