Victory Energy Corporation (OTCMKTS:VYEY) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
Entry into a Material Definitive Agreement.
As previously reported on August 24, 2017, Victory Energy Corporation (the “Company”) entered into a divestiture agreement (the “Divestiture Agreement”) with Navitus Energy Group (“Navitus”) on August 21, 2017, to which the Company has agreed to divest and transfer its 50% ownership interest in Aurora Energy Partners to Navitus, which currently owns the remaining 50% interest, in consideration for a release from Navitus of all of the Company’s obligations under the second amended partnership agreement, dated October 1, 2011, between Victory and Navitus, including, without limitation, obligations to return to Navitus investors their accumulated deferred capital, deferred interest and related allocations of equity.
On September 14, 2017, the Company and Navitus entered into an amendment to the divestiture agreement (the “Amended Divestiture Agreement”), to which the parties amended the Divestiture Agreement to provide for the issuance of 166,549,134 shares of the Company’s common stock (or 4,382,872 shares of common stock following the Company’s planned 1-for-38 reverse stock split) to Navitus upon closing of the transactions contemplated by the Divestiture Agreement. The Company also agreed to provide Navitus with demand registration rights for these shares, whereby the Company agreed to file within thirty (30) of request a registration statement on an appropriate form covering the resale of these shares and use its commercially reasonable efforts to cause such registration statement to be declared effective within one hundred twenty (120) days following such filing.
In connection with the foregoing, the Company entered into a lock-up and resale restriction agreement (the “Lock-Up Agreement”) with Navitus, to which Navitus agreed to certain restrictions on the transfer of these shares.
The foregoing summary of the terms and conditions of the Amended Divestiture Agreement and the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of those agreements filed as exhibits to this report.
Item 3.02Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 regarding the issuance of shares of common stock under the Amended Divestiture Agreement is incorporated by reference into this Item 3.02. The issuance of these securities is being made in reliance upon an exemption from registration provided under Section4(a)(2) of the Securities Act of 1933, as amended.
Item 5.03Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On September 14, 2017, the Board of Directors of the Company adopted Amended and Restated Bylaws, which revised the Company’s former bylaws. The following is a summary of certain provisions of the Amended and Restated Bylaws adopted by the Board of Directors. Such summary is not intended to be complete and is qualified
in its entirety by reference to the full text of the Amended and Restated Bylaws, a copy of which is filed as Exhibit 3.1 to this report and is incorporated by reference herein.
Generally, the Amended and Restated Bylaws update the Company’s former bylaws, and include (among others) the following modifications.
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(1) |
The Amended and Restated Bylaws provide that directors shall be elected by a plurality vote of stockholders, while the former bylaws provided that directors were elected by a majority vote. |
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(2) |
The Amended and Restated Bylaws include a provision setting forth the procedure for nominations of directors by stockholders, while the former bylaws did not include such a provision. |
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(3) |
The Amended and Restated Bylaws removed a provision from the prior bylaws allowing for loans to, and guarantees for the benefit of, officers and employees of the Company. |
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(4) |
The Amended and Restated Bylaws include a provision for the issuance of uncertificated shares, while the former bylaws did not include such a provision. |
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Item 5.05 |
Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics. |
On September 14, 2017, the Board of Directors of the Company adopted a Code of Ethics and Business Conduct (the “Code of Ethics”), which replaces the Company’s prior Code of Ethics for CEO and Senior Financial Officers. The Code of Ethics applies to all of the Company’s directors, officers and employees, including the Company’s principal executive officer, principal financial officer and principal accounting officer. The Code of Ethics addresses, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, and reporting of violations of the Code of Ethics.
The Company is required to disclose any amendment to, or waiver from, a provision of the Code of Ethics. The Company intends to use its website as a method of disseminating this disclosure, as permitted by applicable Securities and Exchange Commission rules. Any such disclosure will be posted to the Company’s website within four (4) business days following the date of any such amendment to, or waiver from, a provision of the Code of Ethics.
The foregoing summary is not intended to be complete and is qualified in its entirety by reference to the full text of the Code of Ethics, a copy of which is filed as Exhibit 14.1 to this report and is incorporated by reference herein.
On September 14, 2017, the Board of Directors of the Company established an audit committee and a compensation committee and adopted written charters for each committee. Copies of the audit committee charter and compensation committee charter are filed as Exhibits 99.1, and 99.2, respectively, to this report and are incorporated herein by reference.
The Board of Directors appointed Messrs. Ronald W. Zamber, Julio C. Herrera and Eric Eilertsen (upon his election at the Company’s upcoming special stockholder meeting) to serve on each committee. Mr. Eilertsen was appointed as the chair of the audit committee and Mr. Zamber was appointed as chair of the compensation committee.
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Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
The following exhibits are filed herewith:
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Exhibit No. |
Description of Exhibit |
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3.1 |
Amended and Restated Bylaws adopted on September 14, 2017 |
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10.1 |
Divestiture Agreement, dated August 21, 2017, between Victory Energy Corporation and Navitus Energy Group (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed on August 24, 2017) |
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10.2 |
Amendment No. 1 to the Divestiture Agreement, dated September 14, 2017, between Victory Energy Corporation and Navitus Energy Group |
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10.3 |
Lock-Up and Resale Restriction Agreement, dated September 14, 2017, by and between Victory Energy Corporation and Navitus Energy Group |
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14.1 |
Code of Ethics and Business Conduct adopted on September 14, 2017 |
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99.1 |
Audit Committee Charter adopted on September 14, 2017 |
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99.2 |
Compensation Committee Charter adopted on September 14, 2017 |
VICTORY ENERGY CORP ExhibitEX-3.1 2 exhibit31-amendedandrestat.htm EXHIBIT 3.1 Exhibit AMENDED AND RESTATED BYLAWSOFVICTORY ENERGY CORPORATION(the “Corporation”)Adopted on September 14,…To view the full exhibit click here
About Victory Energy Corporation (OTCMKTS:VYEY)
Victory Energy Corporation (Victory) is an independent exploration and production company. The Company is engaged in the acquisition, exploration and production of oil and natural gas properties, through its partnership with Aurora Energy Partners (Aurora). The Company has technical and specialized resources located in Midland, Texas. The Company is focused on the acquisition and development of unconventional resource play opportunities in the Permian Basin, the Eagle Ford shale of South Texas and other areas. The Company has approximately 40 gross and over nine net wells, in production. The Company’s portfolio of producing assets includes the Eagle Ford property, the Fairway property, the Bootleg Canyon Ellenberger Field, the Adams-Baggett Gas Field, the Chapman Ranch, the Morgan Property and the Clear Water Wolfberry Resource Play. All of Victory’s assets are located in the United States. The Bootleg Canyon Property, which covers over 4,000 acres, is located in Pecos County, Texas.
