DG Capital Management SC 13D/A Blueknight Energy Partners / DG Capital Management ownership change

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO §240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO §240.13d-2(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 2)*

Blueknight Energy Partners, L.P.

(Name of Issuer)

Common Units representing limited partner interests

(Title of Class of Securities)

09625U109

(CUSIP Number)

Dov Gertzulin

DG Capital Management, LLC

460 Park Avenue, 22nd Floor

New York, NY 10022

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

December 21, 2021

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 09625U109 SCHEDULE 13D Page 2

1.	NAMES OF REPORTING PERSONS   DG Capital Management, LLC
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)   (a)  ☐        (b)  ☒
3.	SEC USE ONLY
4.	SOURCE OF FUNDS (see instructions)   WC
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)   ☐
6.	CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware, United States of America

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7.	SOLE VOTING POWER   0
	8.	SHARED VOTING POWER    3,837,981
	9.	SOLE DISPOSITIVE POWER   0
	10.	SHARED DISPOSITIVE POWER    3,837,981

11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON    3,837,981
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)   ☐
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   9.24% (1)
14.	TYPE OF REPORTING PERSON (see instructions)   IA

(1) Calculated based on 41,516,643 common units (“Common Units”) of Blueknight Energy Partners, L.P. (the “Issuer”) issued and outstanding as of November 4, 2021, as reported in the Issuer’s Quarterly Report on Form 10-Q (“Quarterly Report”) filed with the Securities and Exchange Commission (the “Commission”) on November 12, 2021.

CUSIP No. 09625U109 Page 3

1.	NAMES OF REPORTING PERSONS   Dov Gertzulin
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)   (a)  ☐        (b)  ☒
3.	SEC USE ONLY
4.	SOURCE OF FUNDS (see instructions)   WC
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)   ☐
6.	CITIZENSHIP OR PLACE OF ORGANIZATION   United States of America

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7.	SOLE VOTING POWER   0
	8.	SHARED VOTING POWER    3,837,981
	9.	SOLE DISPOSITIVE POWER   0
	10.	SHARED DISPOSITIVE POWER    3,837,981

11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON    3,837,981
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)   ☐
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   9.24% (1)
14.	TYPE OF REPORTING PERSON (see instructions)   IN

(1) Calculated based on 41,516,643 Common Units issued and outstanding as of November 4, 2021, as reported in the Issuer’s Quarterly Report filed with the Commission on November 12, 2021.

CUSIP No. 09625U109 Page 4

1.	NAMES OF REPORTING PERSONS   DG Value Partners II Master Fund, LP
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)   (a)  ☐        (b)  ☒
3.	SEC USE ONLY
4.	SOURCE OF FUNDS (see instructions)   WC
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)   ☐
6.	CITIZENSHIP OR PLACE OF ORGANIZATION   Cayman Islands

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7.	SOLE VOTING POWER   0
	8.	SHARED VOTING POWER   3,309,553
	9.	SOLE DISPOSITIVE POWER   0
	10.	SHARED DISPOSITIVE POWER   3,309,553

11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   3,309,553
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)   ☐
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   7.97%
14.	TYPE OF REPORTING PERSON (see instructions)   PN

(1) Calculated based on 41,516,643 Common Units issued and outstanding as of November 4, 2021, as reported in the Issuer’s Quarterly Report filed with the Commission on November 12, 2021.

Page 5

Explanatory Note

This Amendment No. 2 (this “Amendment”) amends and supplements the Schedule 13D filed with the Securities and Exchange Commission (the “Commission”) on October 13, 2021, as amended by Amendment No. 1 thereto filed with the Commission on November 16, 2021 (collectively, the “Schedule 13D”) by the Reporting Persons relating to the Common Units of Blueknight Energy Partners, L.P. (the “Issuer”).

Information reported in the Schedule 13D remains in effect except to the extent that it is amended, restated or superseded by information in this Amendment. Capitalized terms used but not defined in this Amendment have the respective meanings set forth in the Schedule 13D.

Item 3. Source or Amount of Funds or Other Consideration.

Item 3 of the Schedule 13D is hereby amended and supplemented by adding the following paragraph:

The Common Units reported herein were acquired in open-market transactions using working capital of the private investment funds advised by DG Capital Management, LLC (“DG Capital”).

Item 5. Interest in Securities of the Issuer.

Item 5 of the Schedule 13D is hereby amended by amending and replacing in their entirety each of Item 5(a), (b) and (c) as follows:

(a)–(b) Each Reporting Person’s beneficial ownership of the Common Units as of the date of this Amendment is reflected on that Reporting Person’s cover page. DG Capital and Dov Gertzulin beneficially own, in the aggregate, 3,837,981 Common Units, representing approximately 9.24% of the Issuer’s Common Units issued and outstanding. DG Value Partners II Master Fund, LP (“DG Value”) beneficially owns 3,309,553 Common Units, representing approximately 7.97% of the Issuer’s Common Units issued and outstanding. The percentages herein are calculated based on 41,516,643 Common Units issued and outstanding as of November 4, 2021, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Commission on November 12, 2021.

The Common Units reported herein are held by private investment funds, including DG Value and separately managed accounts (the “DG Entities”) for which DG Capital serves as the investment manager. Dov Gertzulin serves as the managing member of DG Capital. By virtue of these relationships, the Reporting Persons may be deemed to have shared voting and dispositive power with respect to the Common Units owned directly by the DG Entities. This report shall not be deemed an admission that the Reporting Persons are beneficial owners of the Common Units for purposes of Section 13 of the Securities Exchange Act of 1934, as amended, or for any other purpose. Each of the Reporting Persons disclaims beneficial ownership of the Common Units reported herein except to the extent of the Reporting Person’s pecuniary interest therein.

(c)    The transactions in Common Units by the Reporting Persons since the filing of the Schedule 13D are set forth on Schedule I hereto which is incorporated herein by reference.

Item 7. Material to be Filed as Exhibits.

Exhibit No.	Description
99.1	Joint Filing Agreement, by and among the Reporting Persons, dated as of October 13, 2021 (incorporated by reference to Exhibit 99.1 to the Schedule 13D).

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: December 23, 2021

DG CAPITAL MANAGEMENT, LLC
By:	/s/ Dov Gertzulin
Name:	Dov Gertzulin
Title:	Managing Member

/s/ Dov Gertzulin

Dov Gertzulin

DG VALUE PARTNERS II MASTER FUND, LP
By:	/s/ Dov Gertzulin
Name:	Dov Gertzulin
Title:	Authorized Signatory

Schedule I

Transactions in Common Units by the Reporting Persons since the filing of the Schedule 13D

Name of Reporting Person	Transaction	Date	Amount of Common Units		Price per Common Unit
DG Capital Management, LLC	Open market purchase	11/16/2021		343	$	3.36
DG Capital Management, LLC	Open market purchase	11/17/2021		620	$	3.31
DG Capital Management, LLC	Open market purchase	11/19/2021		801	$	3.36
DG Capital Management, LLC	Open market purchase	11/22/2021		3,998	$	3.29
DG Capital Management, LLC	Open market purchase	11/23/2021		57	$	3.28
DG Capital Management, LLC	Open market purchase	11/24/2021		7,134	$	3.30
DG Capital Management, LLC	Open market purchase	11/29/2021		26	$	3.26
DG Capital Management, LLC	Open market purchase	11/30/2021		1,371	$	3.26
DG Capital Management, LLC	Open market purchase	12/01/2021		167	$	3.23
DG Capital Management, LLC	Open market purchase	12/01/2021		74	$	3.23
DG Capital Management, LLC	Open market purchase	12/06/2021		169	$	3.29
DG Capital Management, LLC	Open market purchase	12/06/2021		289	$	3.29
DG Capital Management, LLC	Open market purchase	12/06/2021		79	$	3.29
DG Capital Management, LLC	Open market purchase	12/07/2021		243	$	3.29
DG Capital Management, LLC	Open market purchase	12/07/2021		188	$	3.29
DG Capital Management, LLC	Open market purchase	12/07/2021		51	$	3.29
DG Capital Management, LLC	Open market purchase	12/13/2021		2,841	$	3.27
DG Capital Management, LLC	Open market purchase	12/15/2021		6,583	$	3.24
DG Capital Management, LLC	Open market purchase	12/16/2021		256	$	3.25
DG Capital Management, LLC	Open market purchase	12/16/2021		215	$	3.25
DG Capital Management, LLC	Open market purchase	12/16/2021		59	$	3.25
DG Capital Management, LLC	Open market purchase	12/17/2021		1,004	$	3.24
DG Capital Management, LLC	Open market purchase	12/17/2021		887	$	3.24
DG Capital Management, LLC	Open market purchase	12/17/2021		212	$	3.24
DG Capital Management, LLC	Open market purchase	12/17/2021		821	$	3.24
DG Capital Management, LLC	Open market purchase	12/17/2021		229	$	3.24
DG Capital Management, LLC	Open market purchase	12/20/2021		19,203	$	3.25
DG Capital Management, LLC	Open market purchase	12/20/2021		12,327	$	3.25
DG Capital Management, LLC	Open market purchase	12/21/2021		2,709	$	3.25
DG Capital Management, LLC	Open market purchase	12/22/2021		3,288	$	3.24
DG Value Partners II Master Fund, LP	Open market purchase	11/16/2021		1,999	$	3.36
DG Value Partners II Master Fund, LP	Open market purchase	11/16/2021		2,171	$	3.36
DG Value Partners II Master Fund, LP	Open market purchase	11/17/2021		3,540	$	3.31
DG Value Partners II Master Fund, LP	Open market purchase	11/17/2021		3,927	$	3.31
DG Value Partners II Master Fund, LP	Open market purchase	11/19/2021		4,495	$	3.36
DG Value Partners II Master Fund, LP	Open market purchase	11/19/2021		5,077	$	3.36
DG Value Partners II Master Fund, LP	Open market purchase	11/22/2021		21,976	$	3.29
DG Value Partners II Master Fund, LP	Open market purchase	11/22/2021		25,344	$	3.29
DG Value Partners II Master Fund, LP	Open market purchase	11/23/2021		281	$	3.28
DG Value Partners II Master Fund, LP	Open market purchase	11/23/2021		362	$	3.28
DG Value Partners II Master Fund, LP	Open market purchase	11/24/2021		39,258	$	3.30
DG Value Partners II Master Fund, LP	Open market purchase	11/24/2021		45,208	$	3.30
DG Value Partners II Master Fund, LP	Open market purchase	11/29/2021		200	$	3.26
DG Value Partners II Master Fund, LP	Open market purchase	11/29/2021		164	$	3.26
DG Value Partners II Master Fund, LP	Open market purchase	11/30/2021		10,888	$	3.26
DG Value Partners II Master Fund, LP	Open market purchase	11/30/2021		8,694	$	3.26
DG Value Partners II Master Fund, LP	Open market purchase	12/01/2021		1,954	$	3.23
DG Value Partners II Master Fund, LP	Open market purchase	12/01/2021		1,973	$	3.23
DG Value Partners II Master Fund, LP	Open market purchase	12/06/2021		2,659	$	3.29
DG Value Partners II Master Fund, LP	Open market purchase	12/06/2021		2,549	$	3.29
DG Value Partners II Master Fund, LP	Open market purchase	12/07/2021		1,812	$	3.29
DG Value Partners II Master Fund, LP	Open market purchase	12/07/2021		1,547	$	3.29
DG Value Partners II Master Fund, LP	Open market purchase	12/08/2021		200	$	3.29
DG Value Partners II Master Fund, LP	Open market purchase	12/09/2021		600	$	3.26
DG Value Partners II Master Fund, LP	Open market purchase	12/13/2021		21,034	$	3.27

Page 8

DG Value Partners II Master Fund, LP	Open market purchase	12/13/2021	18,068	$	3.27
DG Value Partners II Master Fund, LP	Open market purchase	12/15/2021	47,065	$	3.24
DG Value Partners II Master Fund, LP	Open market purchase	12/15/2021	41,871	$	3.24
DG Value Partners II Master Fund, LP	Open market purchase	12/16/2021	1,846	$	3.25
DG Value Partners II Master Fund, LP	Open market purchase	12/16/2021	1,624	$	3.25
DG Value Partners II Master Fund, LP	Open market purchase	12/17/2021	8,654	$	3.24
DG Value Partners II Master Fund, LP	Open market purchase	12/17/2021	6,386	$	3.24
DG Value Partners II Master Fund, LP	Open market purchase	12/21/2021	13,676	$	3.25
DG Value Partners II Master Fund, LP	Open market purchase	12/21/2021	17,204	$	3.25