ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On March 29, 2016, PEDEVCO Corp. and its wholly-owned operating subsidiary Red Hawk Petroleum, LLC (together, the “
Company
”), entered into a Settlement Agreement (the “
Settlement Agreement
”) with Dome Energy AB (“
Dome AB
”), Dome Energy, Inc., a wholly-owned subsidiary of Dome AB (“
Dome US
”), and VistaTex Energy LLC, a wholly-owned subsidiary of Dome US (“
VistaTex
,” and together with Dome AB and Dome US, “
Dome Energy
”), pursuant to which the Company and Dome Energy agreed to settle and resolve all outstanding matters related to the following: (i) their previously contemplated business combination (the “
Dome Merger
”) pursuant to that certain Agreement and Plan of Reorganization, dated May 21, 2015 (as amended from time to time, the “
Dome Merger Agreement
”), which was terminated effective December 29, 2015; (ii) that certain Service Agreement, dated March 24, 2015, entered by and between Red Hawk and Dome AB (the “
Service Agreement
”), pursuant to which Red Hawk agreed to provide certain human resource augmentation and accounting services to Dome AB, and pursuant to which $155,980 remained due and payable by Dome AB to Red Hawk (the “
Services Amount Due
”); (iii) that certain assignment, effective November 18, 2015 (the “
Prior Assignment
”), by Red Hawk to Dome AB of certain wellbore interests (the “
Wellbores
”), and related drilling, completion and operational costs and expenses related thereto, which Prior Assignment was more fully described by the Company in its Current Report on Form 8-K filed with the Securities and Exchange Commission on November 24, 2015; and (iv) certain other matters related thereto.
Pursuant to the Settlement Agreement, (i) Dome AB reconveyed the Wellbores to Red Hawk, effective November 18, 2015 (the “
Reconveyance
”), with Red Hawk becoming responsible in full for all drilling, completion and operational costs and expenses incurred or to be incurred with respect to the Wellbores (which the Company plans to fund pursuant to a debt financing the Company is currently in the later stages of consummating, although no guarantees can be made that it will close), and with Red Hawk entitled to all related revenues, with respect to the Wellbores from initial production thereof, (ii) the parties agreed to terminate and cancel the Service Agreement effective December 21, 2015, and Dome Energy agreed to pay to Red Hawk on May 2, 2016, the amount of $50,000 in full satisfaction of any amounts due and owing under the Service Agreement, with all remaining Services Amount Due forgiven by Red Hawk, subject to the terms and conditions of the Settlement Agreement, and (iii) Dome Energy and the Company mutually released each other, and their respective predecessors and successors in interest, parents, subsidiaries, affiliates, and assigns; and past and present officers, directors, managers, shareholders, members, agents, representatives, servants, employees, and attorneys, from all liability related to the foregoing and matters related thereto except as expressly provided under the Settlement Agreement.
The foregoing description of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the Settlement Agreement, a copy of which is attached as
Exhibit 10.1
to this Current Report on Form 8-K and incorporated herein by reference.