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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of
Report (Date of Earliest event Reported): November 14,
2017
Torchlight Energy Resources, Inc.
(Exact
name of registrant as specified in its charter)
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Nevada
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001-36247
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74-3237581
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(State or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(IRS Employer Identification No.)
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5700 W.
Plano Parkway, Suite 3600
Plano, Texas 75093
(Address
of principal executive offices)
Telephone
– (214) 432-8002
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a -12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d -2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e -4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On
November 14, 2017, we and our newly formed wholly-owned subsidiary,
Torchlight Wolfbone Properties, Inc., a Texas corporation
(“TWP”), entered into an Agreement and Plan of
Reorganization and Plan of Merger with McCabe Petroleum
Corporation, a Texas corporation (“MPC”), and Warwink
Properties, LLC, a Texas limited liability company (“Warwink
Properties”), under which agreements TWP is to merge with and
into Warwink Properties and the separate existence of TWP is to
cease, with Warwink Properties becoming the surviving organization
and our wholly-owned subsidiary. Warwink Properties is wholly owned
by MPC which is wholly owned by Gregory McCabe, our Chairman.
Warwink Properties owns certain assets, including approximately
10.71875% Working Interest in 640 acres in Winkler County, TX. At
closing of the merger transaction, our shares of common stock of
TWP will convert into a membership interest of Warwink Properties,
the membership interest in Warwink Properties held by MPC will
cease to exist, and we will issue MPC 2,500,000 restricted shares
of common stock as consideration. Closing of the merger transaction
is subject to certain conditions, including without limitation MPC
fully closing its transaction with MECO IV, LLC
(“MECO”) for the purchase and sale of certain assets as
contemplated by the Purchase and Sale Agreement dated November 9,
2017 (the “MECO PSA”), of which we are not a party. The
MECO PSA, which is scheduled to close on or before November 29,
2017, also provides that MPC and Warwink Properties are to receive
a 21.4375% (10.71875% each) carried (through the tanks) working
interest in the first well drilled on the Winkler County
leases.
Also on
November 14, 2017, our wholly-owned subsidiary, Torchlight Energy,
Inc., a Nevada corporation (“TEI”), entered into a
Purchase Agreement with MPC, under which TEI is to acquire
beneficial ownership of certain of MPC’s assets, including
acreage and wellbores located in Ward County, Texas (the
“Ward County Assets”). As consideration under the
Purchase Agreement, at closing TEI is to issue to MPC an unsecured
promissory note in the principal amount of $3,250,000, payable in
monthly installments of interest only beginning on January 1, 2018
at the rate of 5% per annum, with the entire principal amount
together with all accrued interest due and payable on December 31,
2020. In connection with TEI’s acquisition of beneficial
ownership in the Ward County Assets, MPC will sell those same
assets, on behalf of TEI, to MECO at closing of the MECO PSA, and
accordingly, TEI will receive by assignment $3,250,000 in cash
(which amount is subject to certain pre and post-closing
adjustments). Additionally, at closing of the Purchase Agreement,
MPC is to pay TEI a performance fee of $2,781,500 cash as
compensation for marketing and selling certain Winkler County
assets of MPC as a package to MECO. Closing of the Purchase
Agreement is subject to closing of the MECO PSA.
Prior
to entering into the above transactions, our Board of Directors
formed a special committee composed of independent directors to
analyze and negotiate the transactions on behalf of Torchlight
Energy Resources, Inc. and determine whether the transactions are
fair to the company. In this role, the special committee engaged an
investment bank which rendered a fairness opinion on November 13,
2017 deeming that the transactions were fair to the company, from a
financial point of view, with regard to the total consideration to
be received by the company in relation to the total consideration
to be provided by the company.
Item 3.02 Unregistered Sales of Equity
Securities.
Reference
is made to the disclosure set forth above under Item 1.01 of this
current report, which disclosure is incorporated herein by
reference. Subject to closing, as described above, the securities
will be issued under the exemption from registration provided by
Section 4(a)(2) of the Securities Act of 1933 and the rules and
regulations promulgated thereunder. The subject issuance of
securities does not involve a “public offering” based
upon the following factors: (i) the issuance of the securities will
be an isolated private transaction; (ii) a limited number of
securities will be issued to a limited number of purchasers; (iii)
there were no public solicitations; (iv) the purchaser has
represented that it is an “accredited investor”; (v)
the investment intent of the purchaser; and (vi) the restriction on
transferability of the securities to be issued.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Torchlight
Energy Resources, Inc.
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Date: November
15, 2017
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By:
/s/ John A.
Brda
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John A.
Brda
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President
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