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Item 9A. Controls and Procedures

2024-03-18 compared with 2023-03-29 · 135 added, 114 removed, 745 unchanged (25% of the section changed)

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Under the supervision and with the participation of our management, including our Chief Executive Officer (“ CEO ”) and Chief Accounting Officer (“ CAO ”), we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2023, the end of the period covered by this Annual Report.

Based on this evaluation, our CEO and CAO concluded as of December 31, 2022, that our disclosure controls and procedures were designed at a reasonable assurance level and were effective to provide reasonable assurance that the information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, our CEO and CAO concluded as of December 31, 2023, that our disclosure controls and procedures were not designed at a reasonable assurance level and were not effective to provide reasonable assurance that the information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

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In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control— Integrated Framework (2013).

Based on our assessment, management has concluded that the Company’s internal control over financial reporting were effective as of December 31, 2022.

We previously had identified a material weakness in our internal control over financial reporting relating to the completeness and accuracy of the Company’s oil, NGL and natural gas sales revenue accrual, which weakness existed during, and was reported in, our Quarterly Report on Form 10-Q for the period ended June 30, 2023.

To remediate this material weakness, changes were subsequently made to the Company’s internal control for validating the Company’s oil, NGL and natural gas revenue accrual process for third-party operated properties.

Specifically, management implements additional controls consisting of validating production detail of source documentation for the new well revenue accruals and has determined that the control is now operating effectively.

In addition, through the course of the Company’s preparation of its year-ended December 31, 2023 financial statements, a material weakness in our internal control over financial reporting was identified which related to the review of our inputs to the depreciation, depletion, and amortization calculations, specifically that we did not have effective controls over the proper inclusion of all developed reserves in our calculation of depreciation, depletion, and amortization of our reserves and the proper exclusion of certain segments of certain wells towards the end of the life in the reserve quantity estimates.

We have already developed a plan to implement new controls and procedures designed to address the identified material weakness.

The Company believes these new controls and procedures will remediate the material weaknesses in a future period.

However, there is the potential that the Company’s already implemented efforts to remedy the material weakness will be ineffective and/or that additional material weaknesses could occur regardless of the remediation or additional controls implemented by the Company.

Based on our assessment, management has concluded that the Company’s internal control over financial reporting were not effective as of December 31, 2023.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during the quarter ended December 31, 2022 that have materially affected or are reasonably likely to materially affect, our internal controls over financial reporting, including any corrective actions with regard to significant deficiencies and material weaknesses.

As a result of COVID-19, some members of our workforce began operating primarily in a work from home environment starting in April 2020, and several continue to work from home on a part-time basis as of the date of this filing.

While pre-existing controls were not specifically designed to operate in our current work from home operating environment, we don’t believe that such work from home actions have had a material adverse effect on our internal controls over financial reporting.

We have continued to re-evaluate and refine our financial reporting process to provide reasonable assurance that we could report our financial results accurately and timely.

There were no changes in our internal controls over financial reporting during the quarter ended December 31, 2023 that have materially affected or are reasonably likely to materially affect, our internal controls over financial reporting, including any corrective actions with regard to significant deficiencies and material weaknesses, outside of the changes discussed above.

Limitations on the Effectiveness of Controls

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OTHER INFORMATION.

Not applicable

Termination of Sales Agreement.

Effective March 15, 2024, the Company terminated that certain Sales Agreement, dated November 17, 2021, entered into with Roth Capital Partners, LLC, which was entered into in connection with the ATM Offering.

Sales under the Sales Agreement were to be made under the Company’s Form S-3 shelf registration statement, which has now expired, and as such, the Company is not currently eligible to sell any additional securities under the Sales Agreement, and has, accordingly, terminated the Sales Agreement.

No termination penalties were incurred by the Company.

Rule 10b5-1 Trading Plans .

During the quarter ended December 31, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f)) adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

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In 2011, he was awarded Cornell ILR School’s Alpern Award given to those who “have been exceedingly generous in their support of the ILR School in general and in support of Off-Campus Credit Programs in particular.”

Simon Kukes, Chief Executive Officer and Director (Chief Executive and Director since July 2018)

Simon Kukes is a global investor and executive with over 40 years’ experience in the oil industry.

Kukes, Chief Executive Officer and Director (Chief Executive and Director since July 2018)

Kukes is a global investor and executive with over 40 years’ experience in the oil industry.

He served as the principal of his personal investment company, SK Energy LLC, from April 2013 until its dissolution in December 2022.

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Douglas Schick, President

Schick has over twenty years of experience in the oil and gas industry.

Schick has over twenty-five years of experience in the oil and gas industry.

Prior to joining the Company as President on August 1, 2018, Mr.

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in December 2010), and in various roles of increasing responsibility in finance, planning, M&A, treasury and accounting at The Houston Exploration Company, ConocoPhillips and Shell Oil Company (from 1998 to 2006).

Schick current serves on the Board of Directors of Rockdale Marcellus, LLC, a Houston, Texas-based subsidiary of Rockdale Energy, LLC engaged in the development of natural gas in Northeastern Pennsylvania.

Schick holds a BBA in Finance from New Mexico State University and an MBA with a specialization in Finance from Tulane University.

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with Honors from the University of Washington.

Ivar Siem, Director ( Director since July 2018 )

Siem has broad experience from both the upstream and the service segments of the oil and gas industry, has been the founder of several companies, and has been involved in several roll-ups and restructuring processes throughout his career.

He currently serves as the Chairman of American Resources, Inc., and as a Managing Partner of its affiliated investment vehicle, Norexas, LLC, both privately held Houston, Texas-based companies active in oil and gas investment, acquisition and development and has served in that capacity since 2013.

Previously, Mr.

Siem served as Chairman and Chief Executive Officer of American Resources, Inc.

(from 2013 through July 2017) and Chairman of Blue Dolphin Energy Company (OTCQX:

BDCO), Houston, Texas after taking the company out of bankruptcy in 1990.

Blue Dolphin was an offshore Gulf of Mexico operator until a merger in 2012 with an independent refiner and marketer of petroleum products.

Siem’s role as CEO ended with the merger and he left the board in 2014.

From January 2007 to present, Mr.

Siem served as President of Drillmar Oil and Gas, Inc., a subsidiary of Drillmar Energy, Inc.

Siem acquired a small distressed public company, American Resources Offshore, Inc.

and worked with creditors and existing management to achieve a voluntary reorganization.

From 1995 to 2000, Mr.

Siem served as Chairman and interim CEO of DI Industries/Grey Wolf Drilling while restructuring the company financially and operationally.

Through several mergers and acquisitions, the company emerged as one of the leading land drilling contractors in the US.

The company was subsequently acquired by Precision Drilling in 2008.

From 1996 to 1997 Mr.

Siem served as the initial Chairman and CEO of Seateam Technology ASA when it was spun off from DSND ASA and listed on the Oslo exchange.

Prior to Seateam, Mr.

Siem held various executive roles at multiple E&P and oil field service companies.

Siem started his career at Amoco working as an engineer in various segments of upstream operations.

Siem is currently on the Board of Directors at Siem Industries, Inc., the Drillmar Energy Group of companies, and Petrolia Energy Corporation, and has served on the board of several privately held and publicly traded companies including Frupor SA, Avenir ASA, and DSND ASA.

Siem Industries is a holding company which invests in shipping and offshore oil and gas construction services.

Frupor SA, is a Portuguese agricultural business, which Mr.

Siem cofounded with his brother O.

Siem in 1988.

Siem holds a Bachelor of Science in Mechanical Engineering with a minor in Petroleum from the University of California, Berkeley and an Executive MBA from the Amos Tuck School of Business, Dartmouth University.

Douglas Evans, Director (Director since September 2018)

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Scelfo serves as Chairman and Dr.

Simon Kukes serves as CEO.

Kukes serves as CEO.

The board of directors does not have a policy as to whether the Chairman should be an independent director, an affiliated director, or a member of management.

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The board of directors believes that its programs for overseeing risk, as described below, would be effective under a variety of leadership frameworks and therefore do not materially affect its choice of structure.

The Board evaluates its structure periodically, as well as when warranted by specific circumstances, in order to assess which structure is in the best interests of the Company and its stockholders based on the evolving needs of the Company.

This approach provides the Board appropriate flexibility to determine the leadership structure best suited to support the dynamic demands of our business.

Risk Oversight

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The board of directors’ approach to risk oversight includes understanding the critical risks in our business and strategy, evaluating our risk management processes, allocating responsibilities for risk oversight among the full board of directors, and fostering an appropriate culture of integrity and compliance with legal responsibilities.

The board of directors exercises direct oversight of strategic risks to us.

The Board exercises direct oversight of strategic risks to us.

Our Audit Committee reviews and assesses our processes to manage business and financial risk and financial reporting risk.

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Our Compensation Committee oversees risks relating to compensation programs and policies.

In each case management periodically reports to our board of directors or the relevant committee, which provides the relevant oversight on risk assessment and mitigation.

In each case management periodically reports to our Board or the relevant committee, which provides the relevant oversight on risk assessment and mitigation.

The Nominating and Corporate Governance Committee recommends the slate of director nominees for election to the Company’s Board, identifies and recommends candidates to fill vacancies occurring between annual stockholder meetings, reviews, evaluates and recommends changes to the Company’s corporate governance guidelines, and establishes the process for conducting the review of the Chief Executive Officer’s performance.

Our Chairman can represent the board in communications with stockholders and other stakeholders but cannot individually (however the full Board can) override our Chief Executive Officer on, any risk matters.

Additionally, our Chairman has not traditionally provided input on design of the Board itself, which instead comes from the full Board.

While the Board and its committees oversee the Company’s strategy, management is charged with its day-to-day execution.

To monitor performance against the Company’s strategy, the Board receives regular updates and actively engages in dialogue with management.

Director Independence

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Evans are independent directors as defined in the NYSE American rules governing members of boards of directors and as defined under Rule 10A-3 of the Exchange Act.

Accordingly, 50% of the members of our board of directors are independent as defined in the NYSE American rules governing members of boards of directors and as defined under Rule 10A-3 of the Exchange Act.

Accordingly, over 50% of the members of our board of directors are independent as defined in the NYSE American rules governing members of boards of directors and as defined under Rule 10A-3 of the Exchange Act.

Committees of our Board of Directors

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Audit Committee

and Corporate

Compensation Committee

Nominating and Corporate Governance Committee

Douglas Evans

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and reviewing and, if appropriate, approving proposed transactions between the Company and “related persons” as defined in Item 404 of SEC Regulation S-K, and developing policies and procedures for the review and approval of such transactions.

During the year ended December 31, 2022, the audit committee held four meetings.

During the year ended December 31, 2023, the audit committee held five meetings.

Compensation Committee

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Scelfo serves as Chair of the compensation committee.

During the year ended December 31, 2022, the compensation committee held one meeting.

During the year ended December 31, 2023, the compensation committee held two meetings.

Compensation Committee Interlocks and Insider Participation

The current members of the compensation committee are Messrs.

Scelfo (Chairman) and H.

Douglas Evans, who are each independent members of our board of directors.

No member of the compensation committee is an employee or a former employee of the Company.

During fiscal 2023, none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on our Compensation Committee.

Accordingly, the compensation committee members have no interlocking relationships required to be disclosed under SEC rules and regulations.

Nominating and Corporate Governance Committee

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During the year ended December 31, 2023, the nominating and corporate governance committee held one meeting.

Website Availability of Documents

The charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee and our Code of Business Conducts and Ethics can be found on our website at https://pedevco.com/ped/corporate_governance .

Unless specifically stated herein, documents and information on our website are not incorporated by reference in this Report.

Outside Advisors

Our Board and each of its committees may retain outside advisors, legal counsel, and consultants of their choosing at our expense.

The Board and its committees need not obtain management’s consent to retain such outside advisors, legal counsel, and consultants.

Controlled Company Status

Kukes controls a majority of our outstanding voting power, we are a “ controlled company ” under the corporate governance rules of the NYSE American.

Therefore, we are not required to have a majority of our board of directors be independent, nor are we required to have a compensation committee or an independent nominating function.

We have nevertheless opted to meet the requirements under the NYSE American listing rules for smaller reporting companies, such as the Company, which requires a board of directors be comprised of at least 50% independent directors and to have a compensation, nominating and governance committee comprised of independent directors, as more fully described herein.

Pledging of Shares

The ability of our directors and executive officers to pledge Company stock for personal loans and investments is inherently related to their compensation due to our use of equity awards and promotion of long-termism and an ownership culture.

As such, the Company has no policies in place preventing or limiting any officer or directors’ ability to pledge their stock, other than limitations imposed pursuant to our Code of Business Conducts and Ethics and our Insider Trading Policy.

Insider Trading/Anti-Hedging Policies

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The anti-hedging provisions prohibit all employees, officers and directors from engaging in “ short sales ” of our securities or from trading in options with maturities less than nine months on our stock.

Rule 10b5-1 Trading Plans

Our executive officers and directors are encouraged to conduct purchase or sale transactions under a trading plan established pursuant to Rule 10b5-1 under the Exchange Act.

Through a Rule 10b5-1 trading plan, the executive officer or director contracts with a broker to buy or sell shares of our common stock on a periodic basis.

The broker then executes trades pursuant to parameters established by the executive officer or director when entering into the plan, without further direction from them.

The executive officer or director may amend or terminate the plan in specified circumstances.

Policy on Equity Ownership

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The SEC also recently adopted rules which direct national stock exchanges to require listed companies to implement policies intended to recoup bonuses paid to executives if the company is found to have misstated its financial results.

The NYSE has recently proposed rules to require listed companies to adopt clawack policies and we plan to implement a clawback policy in the future, once required, although we have not yet implemented such policy.

Additionally, on November 8, 2023, the Board of Directors of the Company adopted a Policy for the Recovery of Erroneously Awarded Incentive-Based Compensation (the “ Clawback Policy ”), to comply with the final clawback rules adopted by the U.S.

Securities and Exchange Commission under Section 10D and Rule 10D-1 of the Securities Exchange Act of 1934, as amended (“ Rule 10D-1 ”), and the listing standards, as set forth in the New York Stock Exchange Listed Company Manual (the “ NYSE Rules ” and, together with Rule 10D-1, the “ Final Clawback Rules ”).

The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive compensation from current and former officers of the Company as defined in Rule 10D-1 (“ Covered Officers ”) in the event the Company is required to prepare an accounting restatement as specified in the Clawback Policy.

Under the Clawback Policy, the Board may recoup from the Covered Officers erroneously awarded incentive compensation received within a lookback period of the three completed fiscal years preceding the date on which the Company is required to prepare an accounting restatement.

The Clawback Policy is effective as of October 2, 2023.

Meetings of the Board of Directors and Annual Meeting

During the fiscal year that ended on December 31, 2022, the Board held six meetings and took various other actions via the unanimous written consent of the board of directors and the various committees described above.

All directors attended the board of directors’ meetings and committee meetings relating to the committees on which each director served during fiscal year 2022, except for two Board meetings from which Mr.

During the fiscal year that ended on December 31, 2023, the Board held eight meetings and took various other actions via the unanimous written consent of the board of directors and the various committees described above.

All directors attended all of the board of directors’ meetings and committee meetings relating to the committees on which each director served during fiscal year 2023, except for one Board meeting from which former director Mr.

Siem was absent with notice.

The Company held annual shareholders meetings on June 26, 2014, October 7, 2015, December 28, 2016, December 28, 2017, September 27, 2018, August 28, 2019, August 27, 2020, September 1, 2021 and August 25, 2022, at which meetings all directors were present in person, via teleconference or via virtual attendance.

The Company held annual shareholders meetings on June 26, 2014, October 7, 2015, December 28, 2016, December 28, 2017, September 27, 2018, August 28, 2019, August 27, 2020, September 1, 2021, August 25, 2022 and August 31, 2023, at which meetings all directors were present in person, via teleconference or via virtual attendance.

Each director of the Company is expected to be present at annual meetings of shareholders, absent exigent circumstances that prevent their attendance.

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The following table sets forth the compensation for services paid in all capacities for the two fiscal years ended December 31, 2023 and 2022 to (a) Dr.

Simon Kukes, our Chief Executive Officer and Director, (b) J.

Kukes, our Chief Executive Officer and Director, (b) J.

Douglas Schick, our current President, (c) Clark R.

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Consists of the value of 300,000 shares of restricted common stock granted in January 2022 at $1.17 per share.

Consists of Company matching contributions of up to 6% of the applicable officer’s salary into the Company’s sponsored 401(k) plan, subject to IRS and plan limits, of $14,527.

Also includes accrued vacation paid out in cash of $4,615.

Consists of the value of 200,000 shares of restricted common stock granted in January 2023 at $1.09 per share.

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Stock Awards (4)

(#) exercisable

Number of securities underlying unexercised options (#) exercisable

securities underlying unexercised options (#)

unexercisable

units of stock

that have not

units of stock

that have not

vested ($)(5)

Option Exercise price ($)

Option expiration date

Number of shares or units of stock that have not vested (#)

Market value of shares or units of stock that have not vested ($)(5)

Douglas Schick

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The following table sets forth compensation information with respect to our non-executive directors during our fiscal year ended December 31, 2023.

or Paid in Cash ($)*

Compensation ($)

Fees Earned or Paid in Cash ($)*

Stock Awards ($) (1) (2)

All Other Compensation ($)

Douglas Evans

Ivar Siem (3)

* The table above does not include the amount of any expense reimbursements paid to the above directors.

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Scelfo – 125,000 shares;

Ivar Siem - 70,000 shares;

Douglas Evans – 85,000 shares.

As of December 31, 2022, John J.

Scelfo held fully-vested options to purchase 120,000 shares of common stock exercisable at an exercise price of $2.19 per share, and H.

Douglas Evans held fully-vested options to purchase 100,000 shares of common stock exercisable at an exercise price of $2.19 per share.

Evans and Mr.

Siem received grants of 100,000, 70,000 and 70,000 shares of restricted stock, respectively, on August 25, 2022, each with an aggregate grant date fair value of $117,000, $81,900 and $81,900, respectively, which will vest in full on July 12, 2023, August 25, 2023, and July 12, 2023, respectively, subject to such person’s continued service on the Board.

For the year ended December 31, 2022, there was compensation of $94,000, related to these grants.

Scelfo and Mr.

Evans received grants of 125,00 and 85,000 shares of restricted stock, respectively, on August 31, 2023, with an aggregate grant date fair value of $118,875 and $80,835, respectively, which will vest in full on July 12, 2024 and September 27, 2024, respectively, subject to such person’s continued service on the Board.

For the year ended December 31, 2023, there was a compensation expense of $67,000 recognized by the Company related to these grants.

Passed away on July 18, 2023.

Effective September 27, 2018, the Board no longer has a formal compensation program;

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Agreements with Current Named Executive Officers

Simon Kukes .

Simon Kukes has verbally agreed to receive an annual salary of $1 as his compensation for serving as Chief Executive Officer of the Company and as a member of the Board of Directors and to not charge the Company for any personal business expenses he incurs in connection with such positions.

Kukes has verbally agreed to receive an annual salary of $1 as his compensation for serving as Chief Executive Officer of the Company and as a member of the Board of Directors and to not charge the Company for any personal business expenses he incurs in connection with such positions.

Notwithstanding the above, Dr.

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and a non-solicitation provision prohibiting him from inducing or attempting to induce any employee of the company from leaving their employment with the Company and/or attempting to induce any consultant, service provider, customer or business relation of the Company from terminating their relationship with the Company during the term of his employment and for one year thereafter.

Schick’s salary may be increased from time to time in the discretion of the Board or Compensation Committee, without amending the Offer Letter.

Pacific Energy Development, our wholly-owned subsidiary, has entered into an employment agreement, dated June 10, 2011, as amended January 11, 2013 and January 25, 2022, with Clark Moore, its Executive Vice President, Secretary and General Counsel (the “ Moore Employment Agreement ”), pursuant to which, effective June 1, 2011, Mr.

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or (y) it is a transaction effected primarily for the purpose of financing our company with cash (as determined by the board of directors in its discretion and without regard to whether such transaction is effectuated by a merger, equity financing or otherwise).

Moore’s salary may be increased from time to time in the discretion of the Board or Compensation Committee, without amending the Employment Agreement.

On December 1, 2018, the Company appointed Mr.

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The Pinkston Offer Letter contains standard confidentiality provisions and a standard a non-solicitation provision prohibiting him from inducing or attempting to induce any employee of the Company from leaving their employment with the Company and/or attempting to induce any consultant, service provider, customer or business relation of the Company from terminating their relationship with the Company during the term of his employment and for one year thereafter.

Pinkston’s salary may be increased from time to time in the discretion of the Board or Compensation Committee, without amending the Offer Letter.

2024 Salary Increases

On January 26, 2024, after recommendation by the Compensation Committee of the Company’s Board of Directors, the Board of Directors of the Company, in connection with the Company’s annual compensation review, approved:

(A) a 5% increase of the annual base salaries for (i) Mr.

Paul Pinkston, the Company’s Chief Accounting Officer, from $160,000 to $168,000, (ii) Mr.

Douglas Schick, the President of the Company, from $290,000 to $304,500, and (iii) Mr.

Moore, the Executive Vice President, General Counsel and Secretary of the Company, from $280,000 to $294,000, all effective February 1, 2024 (none of the increases in salary were documented by written agreements or amendments);

and (B) cash bonuses for (i) Mr.

Paul Pinkston, the Company’s Chief Accounting Officer, in the amount of $35,000, (ii) Mr.

Douglas Schick, the President of the Company, in the amount of $120,000, and (iii) Mr.

Moore, the Executive Vice President, General Counsel and Secretary of the Company in the amount of $110,000.

Equity Incentive Plans

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The options have a weighted average exercise price of $1.51 per share and have expiration dates ranging from 2025 to 2026.

The Company cannot grant any additional awards under the 2012 Plan pursuant to its terms since more than 10 years have passed since its original adoption.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

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To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

Number of Common

Stock Shares Beneficially Owned (1)

Common Stock (1)

Number of Common Stock Shares Beneficially Owned (1)

Percent of Common Stock (1)

Named Executive Officers and Directors

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Douglas Evans (6)

Ivar Siem (8)

All Named Executive Officers and Directors as a group (seven persons)

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(d) 3,000 shares of fully-vested common stock held by the spouse of Dr.

and (e) options to purchase 15,000 shares and 6,666 shares of common stock exercisable by the spouse of Dr.

and (e) options to purchase 15,000 shares, 10,000 shares and 6,666 shares of common stock exercisable by the spouse of Dr.

Kukes at an exercise price of $1.68, $1.39 and $1.09 per share, respectively.

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and (b) 858,334 unvested shares of common stock held by Mr.

Schick, 83,334 which vest on January 19, 2024, 100,000 of which vest on each of January 25, 2024 and January 25, 2025, 116,666 of which vest on January 23, 2024, and 116,667 of which vest on each of January 23, 2024 and January 23, 2025, in each case provided that Mr.

Schick, 100,000 which vest on January 25, 2025, 116,667 of which vest on each of January 23, 2025 and January 23, 2026, and 175,000 of which vest on each of January 26, 2025 , January 26, 2026 and January 26, 2027, in each case provided that Mr.

Schick remains employed by us, or is a consultant to us, on such vesting dates.

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(a) 299,699 shares of fully-vested common stock held by Mr.

and (b) 380,001 unvested shares of common stock, 46,667 of which vest on January 19, 2024, 66,667 of which vest on each of January 25, 2024 and January 25, 2025, 66,666 of which vest on January 23, 2024 and 66,667 of which vest on each of January 23, 2025 and January 23, 2026, in each case provided that Mr.

and (b) 450,001 unvested shares of common stock, 66,667 of which vest on January 25, 2025, 66,667 of which vest on each of January 23, 2025 and January 23, 2026, and 83,333 of which vest on each of January 26, 2025 and January 26, 2026, and 83,334 of which vest on January 26, 2027, in each case provided that Mr.

Pinkston remains employed by us, or is a consultant to us, on such vesting dates.

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(a) 290,000 shares of fully-vested common stock held by Mr.

(b) 70,000 unvested shares of common stock, which vest on September 27, 2023, provided that Mr.

and (b) 85,000 unvested shares of common stock, which vest on September 27, 2024, provided that Mr.

Evans remains a director, employee of, or consultant to us on such vesting date.

and (c) options to purchase 100,000 shares of common stock exercisable by Mr.

Evans at an exercise price of $2.19 per share.

Evans has voting control over his unvested shares of common stock.

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(a) 224,500 shares of fully-vested common stock held by Mr.

(b) 100,000 unvested shares of common stock, which vest on July 12, 2023, provided that Mr.

and (b) 125,000 unvested shares of common stock, which vest on July 12, 2024, provided that Mr.

Scelfo remains a director, employee of, or consultant to us on such vesting date.

and (c) options to purchase 120,000 shares of common stock exercisable by Mr.

Scelfo at an exercise price of $2.19 per share.

Scelfo has voting control over his unvested shares of common stock.

Consisting of the following:

(a) 187,100 shares of common stock held by American Resources Offshore Inc., which shares Mr.

Siem is deemed to beneficially own (Mr.

Siem disclaims beneficial ownership of the securities held by American Resources Offshore Inc., except to the extent of his pecuniary interest therein);

(b) 125,000 shares of fully-vested common stock held by Mr.

and (c) 70,000 unvested shares of common stock held by Mr.

Siem, which vest on July 12, 2023, provided that Mr.

Siem remains a director, employee of, or consultant to us on such vesting date.

Siem has voting control over his unvested shares of PEDEVCO Common Stock.

Consisting of 51,791,325 shares of common stock held by The SGK 2018 Revocable Trust.

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2021 Equity Incentive Plan.

Does not include shares of common stock available for issuance under the 2012 Plan or 2012 Pre-Merger Plan as the Company has determined that it will no longer issue awards thereunder.

Does not include shares of common stock available for issuance under the 2012 Plan or 2012 Pre-Merger Plan as the Company has determined that it can no longer issue awards thereunder.

The Company’s equity compensation plans are discussed in greater detail above under “Item 11.

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Tkachev agreed to provide strategic planning and business development services, and pursuant to which 100,000 shares of restricted common stock were awarded to Mr.

Tkachev under the Company’s Amended and Restated 2012 Equity Incentive Plan (the “ Plan ”), vesting in full on the six-month anniversary of the grant date, subject to his continued service with the Company, in consideration for advisory services to be provided by Mr.

Tkachev under the Company’s Amended and Restated 2012 Equity Incentive Plan vesting in full on the six-month anniversary of the grant date, subject to his continued service with the Company, in consideration for advisory services to be provided by Mr.

Tkachev to the Company.

The Advisory Agreement contains customary confidentiality, indemnification and no conflict language, and unless terminated by the Company or the advisor with 15 days prior written notice for any reason, the Advisory Agreement has an indefinite term.

The Advisory Agreement was terminated on March 10, 2022.

No early termination penalties were incurred by the Company.

Effective November 8, 2019, the Company entered into an Advisory Agreement with Ivar Siem, a member of the Board of Directors, pursuant to which the 50,000 restricted shares of common stock previously awarded to Mr.

Siem on August 28, 2019 under the Plan became fully vested on July 12, 2020.

Effective November 8, 2019, the Company entered into an Advisory Agreement with Ivar Siem, a former member of the Board of Directors, pursuant to which the 50,000 restricted shares of common stock previously awarded to Mr.

Siem on August 28, 2019 under the 2012 Equity Incentive Plan became fully vested on July 12, 2020.

The Advisory Agreement contains customary confidentiality, indemnification and no conflict language;

and, unless terminated by the Company or the advisor with 15 days prior written notice for any reason, the Advisory Agreement has an indefinite term.

The Advisory Agreement was terminated on March 10, 2022.

and, unless terminated by the Company or the advisor with 15 days prior written notice for any reason, the Advisory Agreement had an indefinite term but was mutually terminated on March 10, 2022.

No early termination penalties were incurred by the Company.

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Director Independence

Our board of directors has determined that Mr.

The Board annually determines the independence of each director and nominee for election as a director.

The Board makes these determinations in accordance with the NYSE American’s listing standards for the independence of directors and the SEC’s rules.

In assessing director independence, the Board considers, among other matters, the nature and extent of any business relationships, including transactions conducted, between the Company and each director and between the Company and any organization for which one of our directors is a director or executive officer or with which one of our directors is otherwise affiliated.

Our Board has determined that Mr.

Scelfo and Mr.

Evans are independent directors as defined in the NYSE American rules governing members of boards of directors and as defined under Rule 10A-3 of the Exchange Act.

Accordingly, 50% of the members of our Board are independent as defined in the NYSE American rules governing members of boards of directors and as defined under Rule 10A-3 of the Exchange Act.

Furthermore, the Board has determined that each of the members of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee is independent within the meaning of NYSE American director independence standards applicable to members of such committees, as currently in effect.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

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(3) Exhibits required by Item 601 of Regulation S-K

Filed or furnished

With This Annual

Sales Agreement, dated November 17, 2021 between PEDEVCO Corp.

and Roth Capital Partners, LLC

Incorporated By Reference

furnished With This Annual Report on

Filing Date/Period End Date

Purchase and Sale Agreement dated November 9, 2023, by and among Pacific Energy Development Corp.

and EOR Operating Company, as sellers and Tilloo Exploration and Production, LLC, as purchaser

Amended and Restated Certificate of Formation and Designation by Blast Acquisition Corp.

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and SK Energy LLC**

Participation Agreement, dated September 12, 2023, entered into by and between PEDEVCO Corp.

and Evolution Petroleum Corporation

Stock Purchase Agreement dated November 9, 2023, by and between Pacific Energy Development Corp.

and Tilloo Exploration and Production, LLC

Promissory Note dated November 9, 2023, executed by Tilloo Exploration and Production, LLC

Security Agreement dated November 9, 2023, by and between Pacific Energy Development Corp.

and Tilloo Exploration and Production, LLC

Security Agreement dated November 9, 2023, by and between Pacific Energy Development Corp.

and Tilloo Exploration and Production, LLC

Mortgage dated November 9, 2023, by and between Pacific Energy Development Corp.

and Tilloo Exploration and Production, LLC

Code of Ethics and Business Conduct

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Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

PEDEVCO Corp., Policy for the Recovery of Erroneously Awarded Incentive-Based Compensation **

Reserves Report of Cawley, Gillespie & Associates, Inc.

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Indicates management contract or compensatory plan or arrangement.

# Schedules and exhibits have been omitted pursuant to Item 601(b)(5) of Regulation S-K.

# Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) 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.

provided, however that the Company 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.

FORM 10-K SUMMARY.

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March 15, 2024

/s/ Simon Kukes

Chief Executive Officer and Director

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Simon Kukes

Chief Executive Officer and Director

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Douglas Evans

/s/ Ivar Siem

March 29, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures