ped_ex41





 







Exhibit 4.1



DESCRIPTION OF SECURITIES



REGISTERED PURSUANT TO SECTION 12 OF



THE SECURITIES EXCHANGE ACT OF 1934


 


The
following summary describes the common stock of PEDEVCO Corp., a
Texas corporation (“PEDEVCO” or the
“Company”), which common
stock is registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). Only the
Company’s common stock is registered under Section 12 of the
Exchange Act.


 



DESCRIPTION OF COMMON STOCK


 


The
following description of our common stock is a summary and is
qualified in its entirety by reference to our Certificate of
Formation, as amended and our Bylaws, as amended, which are
incorporated by reference as exhibits to this Annual Report on Form
10-K, and by applicable law. For purposes of this description,
references to “PEDEVCO,”
“we,”
“our”
and “us” refer only to PEDEVCO
and not to its subsidiaries.


 



Authorized Capitalization


 


The
total number of authorized shares of our common stock is
200,000,000 shares, $0.001 par value per share.


 


The
total number of “blank check” authorized
shares of our preferred stock is 100,000,000 shares, $0.001 par
value per share. The total number of designated shares of our
Series A Convertible Preferred Stock is 66,625. The terms of our
preferred stock are not included herein as such preferred stock is
not registered under Section 12 of the Exchange Act.


 



Common Stock


 


      Voting
Rights. Each share of our common stock is entitled to one
vote on all stockholder matters. Shares of our common stock do not
possess any cumulative voting rights.


 


Except
for the election of directors, if a quorum is present, an action on
a matter is approved if it receives the affirmative vote of the
holders of a majority of the voting power of the shares of capital
stock present in person or represented by proxy at the meeting and
entitled to vote on the matter, unless otherwise required by
applicable law, Texas law, our Certificate of Formation, as amended
or Bylaws, as amended. The election of directors will be determined
by a plurality of the votes cast in respect of the shares present
in person or represented by proxy at the meeting and entitled to
vote, meaning that the nominees with the greatest number of votes
cast, even if less than a majority, will be elected. The rights,
preferences and privileges of holders of common stock are subject
to, and may be impacted by, the rights of the holders of shares of
any series of preferred stock that we have designated, or may
designate and issue in the future.


 


Dividend Rights.
Each share of our common stock is entitled to equal dividends and
distributions per share with respect to the common stock when, as
and if declared by our Board of Directors, subject to any
preferential or other rights of any outstanding preferred
stock.


 


Liquidation and Dissolution
Rights. Upon liquidation, dissolution or winding up, our
common stock will be entitled to receive pro rata on a
share-for-share basis, the assets available for distribution to the
stockholders after payment of liabilities and payment of
preferential and other amounts, if any, payable on any outstanding
preferred stock.


 


 


 




 








 






 

 


 


Fully Paid
Status. All outstanding shares of the Company’s
common stock are validly issued, fully paid and
non-assessable.


 


Listing. Our
common stock is listed and traded on the NYSE American under the
symbol “PED”.


 


Other Matters. No
holder of any shares of our common stock has a preemptive right to
subscribe for any of our securities, nor are any shares of our
common stock subject to redemption or convertible into other
securities.


 



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.