Pedevco Corp 10-Q for FY2026 Q1
Pedevco Corp (PED)
About this 10-Q
Pedevco Corp filed this 10-Q on May 14, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $40.22M
- up 360.4% from $8.74M a year earlier
- Net loss
- $25.63M
- compared with net income of $140K a year earlier
- Diluted EPS
- -$3.28
- compared with $0.03 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended:
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
| (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
At May 13, 2026, there were
PEDEVCO CORP.
TABLE OF CONTENTS
| 2 |
| Table of Contents |
REVERSE STOCK SPLIT
On October 29, 2025, stockholders of PEDEVCO Corp. (the “Company”, “we” and “us”) who collectively held more than two-thirds of the combined voting power of the total issued and outstanding shares of Company common stock, executed a written consent in lieu of a special meeting of stockholders of the Company (the “Written Consent”), approving among other things, the grant of discretionary authority to the Company’s Board of Directors (the “Board”) to (A) approve an amendment to the Company’s Certificate of Formation, as amended, to effect a reverse stock split of our issued and outstanding shares of common stock, by a ratio of between one-for-ten to one-for-twenty, inclusive, with the exact ratio to be set at a whole number to be determined by our Board or a duly authorized committee thereof in its discretion, at any time after approval of the amendment and prior to October 30, 2026, and (B) determine whether to arrange for the disposition of fractional interests by stockholders entitled thereto, to pay in cash the fair value of fractions of a share of common stock as of the time when those entitled to receive such fractions are determined, or to entitle stockholder to receive from the Company’s transfer agent, in lieu of any fractional share, the number of shares of common stock rounded up to the next whole number (the “Stockholder Authority”).
The effectiveness of the Stockholder Authority was subject to the Company filing a definitive information statement on Schedule 14C, which was filed with the Securities and Exchange Commission (the “SEC” or the “Commission”) on February 2, 2026 (the “Information Statement”) and the mailing of such Information Statement to the Company’s stockholders describing among other things, the majority stockholders’ approval of the Stockholder Authority, which as described in greater detail in the Current Report on Form 8-K filed by the Company with the Commission on March 3, 2026, was mailed to the stockholders of the Company on February 6, 2026, in accordance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as a result, the Stockholder Authority became effective on February 27, 2026, the 21st day following the mailing date of the Information Statement.
Following effectiveness of the Stockholder Authority, the Company’s Board approved an amendment to our Second Amended and Restated Certificate of Formation to effect a reverse stock split of our common stock at a ratio of 1-for-20, and to pay in cash the fair value of fractions of a share of common stock as of the time when those entitled to receive such fractions are determined (the “Reverse Stock Split”).
On March 10, 2026, we filed a Certificate of Amendment to our Second Amended and Restated Certificate of Formation (the “Certificate of Amendment”) with the Secretary of State of the State of Texas to effect the Reverse Stock Split.
Pursuant to the Certificate of Amendment, the Reverse Stock Split became effective on March 13, 2026 at 12:01 a.m. Eastern Time (the “Effective Time”). The shares of the Company’s common stock began trading on the NYSE American (“NYSE”) on a post-split basis on March 13, 2026, with a new CUSIP number of 70532Y402. No change was made to the trading symbol for the Company’s shares of common stock, “PED” in connection with the Reverse Stock Split.
At the Effective Time, every twenty (20) shares of issued and outstanding common stock were converted into one (1) share of issued and outstanding common stock. No fractional shares were issued in connection with the Reverse Stock Split, and stockholders who would have otherwise been entitled to receive a fractional share as a result of the Reverse Stock Split instead received cash in lieu of such fractional share, based upon the closing sale price of the common stock on the trading day immediately prior to the Effective Time as reported on the NYSE American.
In addition, the number of shares of common stock issuable upon exercise of our stock options and other equity awards (including shares reserved for issuance under the Company’s equity compensation plans) were proportionately adjusted by the applicable administrator, using the 1-for-20 ratio, and rounded down to the nearest whole share, effective as of the Effective Time, pursuant to the terms of the Company’s equity compensation plans. In addition, the exercise price for each outstanding stock option was increased in inverse proportion to the 1-for-20 split ratio such that, upon exercise, the aggregate exercise price payable by the optionee to the Company for the shares subject to the option will remain approximately the same as the aggregate exercise price prior to the Reverse Stock Split, subject to the terms of such securities.
The effects of the Reverse Stock Split have been retroactively affected throughout this Report unless otherwise stated.
| 3 |
| Table of Contents |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Quarterly Report on Form 10-Q (this “Report”) include forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may,” and similar expressions or future or conditional verbs such as “should”, “would”, and “could” are generally forward-looking in nature and not historical facts. Forward-looking statements which are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than statements of historical fact included in this Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs and cash flows, prospects, plans and objectives of management are forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements include information concerning our future financial performance, business strategy, projected plans and objectives. These factors include, among others, the factors set forth below under the heading “Risk Factors.” Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Most of these factors are difficult to predict accurately and are generally beyond our control. Readers are cautioned not to place undue reliance on these forward-looking statements.
Forward-looking statements may include statements about:
● | our business strategy; |
● | our reserves; |
● | our technology; |
● | our cash flows and liquidity; |
● | our financial strategy, budget, projections and operating results; |
● | oil and natural gas realized prices; |
● | timing and amount of future production of oil and natural gas; |
● | the availability of oil field labor; |
● | the amount, nature and timing of capital expenditures, including future exploration and development costs; |
● | drilling of wells; |
● | government regulation and taxation of the oil and natural gas industry; |
● | changes in, and interpretations and enforcement of, environmental and other laws and other political and regulatory developments, including, in particular, additional permit scrutiny in Colorado; |
● | exploitation projects or property acquisitions; |
● | costs of exploiting and developing our properties and conducting other operations; |
● | general economic conditions in the United States and around the world, including the effect of regional or global health pandemics (such as, for example, the 2019 coronavirus (“COVID-19”)), recent changes in inflation and interest rates, tariffs and trade wars, and risks of recessions, including as a result thereof; |
● | competition in the oil and natural gas industry; |
● | effectiveness of our risk management activities; |
● | environmental liabilities; |
● | counterparty credit risk; |
● | developments in oil-producing and natural gas-producing countries; |
● | political conditions in or affecting oil, NGLs and natural gas producing regions and/or pipelines, including in Eastern Europe, the Middle East and South America, for example, as experienced with the Russian invasion of the Ukraine in February 2022 and the current conflict in Iran, which conflicts are ongoing; |
● | our future operating results; |
● | the benefits of our recent acquisitions (discussed below) and future acquisition transactions; |
● | the impairment of oil and gas assets; |
● | our estimated future reserves and the present value of such reserves; and |
● | our plans, objectives, expectations and intentions contained in this Quarterly Report that are not historical. |
All forward-looking statements speak only at the date of the filing of this Quarterly Report. The reader should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this Quarterly Report are reasonable, we can provide no assurance that these plans, intentions or expectations will be achieved. We disclose important factors that could cause our actual results to differ materially from our expectations under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 31, 2026. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. We do not undertake any obligation to update or revise publicly any forward-looking statements except as required by law, including the securities laws of the United States and the rules and regulations of the SEC.
| 4 |
| Table of Contents |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PEDEVCO CORP.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per share data)
|
| March 31, 2026 |
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| December 31, |
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| (Unaudited) |
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| 2025 |
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Assets |
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Current assets: |
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Cash |
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Restricted cash |
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Accounts receivable – oil and gas |
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Inventory |
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Derivative contract assets, current |
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Prepaid expenses and other current assets |
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Total current assets |
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Oil and gas properties: |
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Oil and gas properties, subject to amortization, net |
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Oil and gas properties, not subject to amortization, net |
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Total oil and gas properties, net |
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Derivative contract assets |
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Operating lease – right-of-use asset |
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Deferred income taxes |
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Other assets |
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Total assets |
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
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Accrued expenses |
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Revenue payable |
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Income tax payable |
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Operating lease liabilities – current |
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Derivative contract liabilities – current |
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Asset retirement obligations – current |
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Total current liabilities |
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Long-term liabilities: |
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Revolving credit facility |
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Operating lease liabilities, net of current portion |
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Derivative contract liabilities |
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Asset retirement obligations, net of current portion |
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Deferred income taxes |
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Other long-term liabilities |
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Total liabilities |
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Commitments and contingencies (Note 12) |
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Shareholders’ equity: |
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Series A preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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| ( | ) |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
| $ |
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| $ |
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See accompanying notes to unaudited consolidated financial statements.
| 5 |
| Table of Contents |
PEDEVCO CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(amounts in thousands, except share and per share data)
|
| Three Months Ended March 31, |
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| 2026 |
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| 2025 |
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Revenue: |
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Oil and gas sales |
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| $ |
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Operating expenses: |
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Lease operating costs |
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Selling, general and administrative expense |
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Depreciation, depletion, amortization and accretion |
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Impairment of oil and gas properties |
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Total operating expenses |
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Operating income |
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Other income (expense): |
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Interest expense |
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Interest income |
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Net loss on derivative contracts |
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Other income (expense) |
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Total other (expense) income |
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(Loss) Income before income taxes |
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Income tax benefit (expense) |
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Net (loss) income |
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| $ |
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(Loss) earnings per common share: |
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Basic |
| $ | ( | ) |
| $ |
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Diluted |
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| $ |
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Weighted average number of common shares outstanding: |
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Basic |
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Diluted |
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See accompanying notes to unaudited consolidated financial statements.
| 6 |
| Table of Contents |
PEDEVCO CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(amounts in thousands)
|
| Three Months Ended March 31, |
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| 2026 |
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| 2025 |
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Cash Flows From Operating Activities: |
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Net (loss) income |
| $ | ( | ) |
| $ |
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Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
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Depreciation, depletion, amortization and accretion |
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Impairment of oil and gas properties |
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Amortization of right-of-use asset |
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Amortization of deferred financing costs |
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Share-based compensation expense |
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Net loss on derivative contracts |
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Cash received for derivative settlements, net |
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Deferred income taxes |
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| ( | ) |
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Changes in operating assets and liabilities: |
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Accounts receivable – oil and gas |
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| ( | ) |
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Note receivable accrued interest |
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Inventory |
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Prepaid expenses and other current assets |
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Accounts payable |
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Accrued expenses |
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Revenue payable |
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Income tax payable |
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Other liabilities |
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Net cash provided by operating activities |
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Cash Flows From Investing Activities: |
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Cash paid for drilling and completion costs |
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Cash received for sale of oil and gas property |
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Net cash (used in) provided by investing activities |
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Cash Flows From Financing Activities: |
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Proceeds from credit facility |
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Reverse stock split costs |
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Net cash provided by financing activities |
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Net increase in cash and restricted cash |
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Cash and restricted cash at beginning of period |
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Cash and restricted cash at end of period |
| $ |
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| $ |
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Supplemental Disclosure of Cash Flow Information |
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Cash paid for: |
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Interest |
| $ |
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| $ |
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Income taxes |
| $ |
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| $ |
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Noncash investing and financing activities: |
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Change in accrued oil and gas development costs |
| $ |
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| $ |
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Changes in estimates of asset retirement costs, net |
| $ |
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| $ |
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Conversion of preferred stock into common stock |
| $ |
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| $ |
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Issuance of restricted common stock |
| $ |
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| $ |
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See accompanying notes to unaudited consolidated financial statements.
| 7 |
| Table of Contents |
PEDEVCO CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
(amounts in thousands, except share amounts)
|
| Series A Preferred Stock |
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| Common Stock |
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| Additional Paid-in |
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| Accumulated |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Capital |
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| Deficit |
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| Totals |
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Balances at December 31, 2025 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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Issuance of restricted common stock |
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| - |
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Restricted common stock surrendered for tax withholding |
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| - |
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Conversion of preferred stock into common stock |
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Reduction for fractional shares in reverse stock split |
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Stock-based compensation |
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| - |
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| - |
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Net loss |
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| - |
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| - |
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| ( | ) |
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Balances at March 31, 2026 |
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| - |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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| Series A Preferred Stock |
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| Common Stock |
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| Additional Paid-in |
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| Accumulated |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Capital |
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| Deficit |
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| Totals |
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Balances at December 31, 2024 |
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| - |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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Issuance of restricted common stock |
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| - |
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| ( | ) |
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Stock-based compensation |
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| - |
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| - |
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Net income |
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| - |
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| - |
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Balances at March 31, 2025 |
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| - |
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| $ |
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| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| |||||
See accompanying notes to unaudited consolidated financial statements.
| 8 |
| Table of Contents |
PEDEVCO CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
The accompanying interim unaudited consolidated financial statements of PEDEVCO Corp. (“PEDEVCO” or the “Company”), have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in PEDEVCO’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate disclosures contained in the audited financial statements for the most recent fiscal year, as reported in the Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 31, 2026 (the “2025 Annual Report”), have been omitted.
The Company’s consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and subsidiaries in which the Company has a controlling financial interest. All significant inter-company accounts and transactions have been eliminated in consolidation.
The Company’s future financial condition and liquidity will be impacted by, among other factors, the success of our drilling program, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, the actual cost of exploration, appraisal and development of our prospects, the prevailing prices for, and demand for, oil and natural gas.
Reverse Stock Split
On March 13, 2026, the Company effected a
As a result of the Reverse Stock Split:
| · | every |
| · | the par value of the Company’s common stock remained unchanged at $ |
| · | fractional shares remaining after the Reverse Stock Split were paid in cash, such amounts were not material. |
All authorized, issued, and outstanding common stock, stock options, and other equity instruments, as well as the related exercise or conversion prices, were proportionately adjusted to reflect the Reverse Stock Split.
Retroactive Adjustment
All share amounts, per-share data, earnings (loss) per share, and weighted-average shares outstanding presented in the accompanying consolidated financial statements and related notes have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented, unless otherwise indicated. The Reverse Stock Split did not affect the Company’s total stockholders’ equity or the proportionate voting rights of stockholders, and no fractional shares were issued in connection with the reverse stock split. Stockholders who would otherwise have been entitled to receive fractional shares received cash in lieu thereof, based on the closing price of the Company’s common stock on March 12, 2026, the trading day immediately prior to the effective date of the Reverse Stock Split.
| 9 |
| Table of Contents |
NOTE 2 – DESCRIPTION OF BUSINESS
PEDEVCO is an oil and gas company focused on the acquisition and development of oil and natural gas assets where the latest in modern drilling and completion techniques and technologies have yet to be applied. In particular, the Company focuses on legacy proven properties where there is a long production history, well defined geology and existing infrastructure that can be leveraged when applying modern field management technologies. The Company’s current properties are located in the Denver-Julesberg Basin (“D-J Basin”) in Colorado and Wyoming, the Powder River Basin (“PRB”) in Wyoming, and in the San Andres formation of the Permian Basin situated in West Texas and eastern New Mexico (the “Permian Basin”).
The Company’s D-J Basin assets (the “D-J Basin Assets”) are located in Weld and Morgan Counties, Colorado and Laramie County, Wyoming, are held through the Company’s wholly-owned subsidiaries, PRH Holdings LLC (“PRH”) and NPOG, and are operated by the Company’s wholly-owned operating subsidiaries, Red Hawk Petroleum, LLC (“Red Hawk”), North Silo Resources, LLC (“NSR”), and Longs Peak Resources, LLC (“LPR”).
The Company’s PRB assets (the “Powder River Basin Assets” or “PRB Assets”) are predominantly located in Laramie and Campbell Counties, Wyoming, are held through the Company’s wholly-owned subsidiary Century Oil and Gas, LLC (“Century”), and operated by the Company’s wholly-owned operating subsidiaries, Century Oil and Gas Sub-Holdings, LLC (“COG”), Navigation Powder River, LLC (“NPR”), and Pine Haven Resources, LLC (“Pine Haven”).
The Company’s Permian Basin assets (the “Permian Basin Assets”) are located in Chaves and Roosevelt Counties, New Mexico, are held by the Company’s wholly-owned subsidiary, Pacific Energy Development Corp. (“PEDCO”), and are operated by the Company’s wholly-owned subsidiary, Ridgeway Arizona Oil Corp. (“RAZO”).
On October 31, 2025, the Company completed the transactions (the “Mergers”) contemplated by that certain Agreement and Plan of Merger, dated October 31, 2025 (the “Merger Agreement”), by and among the Company; NP Merger Sub, LLC, a wholly owned subsidiary of the Company (the “First Merger Sub”); COG Merger Sub, LLC, a wholly owned subsidiary of the Company (the “Second Merger Sub,” and together with First Merger Sub, the “Merger Subs”); NPOG and COG (together with NPOG, the “Acquired Companies”); and, solely for purposes of specified provisions therein, North Peak Oil & Gas Holdings, LLC (“North Peak”), pursuant to which the Acquired Companies were merged with and into the Merger Subs, with the Acquired Companies continuing as the surviving companies and wholly-owned subsidiaries of the Company. The Acquired Companies own substantial oil-weighted producing assets and significant leasehold interests in the D-J Basin and PRB.
The Company believes that horizontal development and exploitation of conventional assets in the Wattenberg and Wattenberg Extension in the D-J Basin, the PRB, and the Permian Basin represent among the most economic oil and natural gas plays in the United States (“U.S.”). Moving forward, the Company plans to optimize its existing assets and opportunistically seek additional acreage proximate to its currently held core acreage, as well as other attractive onshore U.S. oil and gas assets that fit the Company’s acquisition criteria, that Company management believes can be developed using its technical and operating expertise and be accretive to shareholder value.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company has provided a discussion of significant accounting policies, estimates and judgments in its 2025 Annual Report. There have been no changes to the Company’s significant accounting policies since December 31, 2025.
Recently Adopted Accounting Pronouncement
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. The Company adopted this ASU on December 31, 2025, and has reflected the required disclosures in the accompanying notes to the consolidated financial statements. The ASU had no impact on the Company’s consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows.
Subsequent Events
The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration.
| 10 |
| Table of Contents |
NOTE 4 – REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue from Contracts with Customers. The following table disaggregates revenue by significant product type in the periods indicated (in thousands):
|
| Three Months Ended March 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Oil sales |
| $ |
|
| $ |
| ||
Natural gas sales |
|
|
|
|
|
| ||
Natural gas liquids sales |
|
|
|
|
|
| ||
Total revenue from customers |
| $ |
|
| $ |
| ||
There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of March 31, 2026 or March 31, 2025.
NOTE 5 – CASH
The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets, which sum to the total of such amounts in the periods indicated (in thousands):
|
| March 31, 2026 |
|
| December 31, 2025 |
| ||
Cash |
| $ |
|
| $ |
| ||
Restricted cash* |
|
|
|
|
|
| ||
Restricted cash included in other assets |
|
|
|
|
|
| ||
Total cash and restricted cash |
| $ |
|
| $ |
| ||
* Represents cash previously classified within other assets due to restrictions on access, as the funds served as collateral for surety bonds related to the Company’s drilling operations. These amounts are anticipated to become unrestricted within 90 days of the date of this Report and are therefore classified as current restricted cash on the Company’s consolidated balance sheet as of March 31, 2026. The increase in restricted cash from the prior period is primarily attributable to the Company’s Mergers completed in October 2025.
| 11 |
| Table of Contents |
NOTE 6 – OIL AND GAS PROPERTIES
The following table summarizes the Company’s oil and gas activities by classification for the three months ended March 31, 2026 (in thousands):
|
| December 31, 2025 |
|
| Additions |
|
| Disposals |
|
| Transfers |
|
| March 31, 2026 |
| |||||
Oil and gas properties, subject to amortization |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Oil and gas properties, not subject to amortization |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||
Asset retirement costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Accumulated depreciation and depletion |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||
Accumulated impairment |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||
Total oil and gas properties, net |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| ||||
For the three-month period ended March 31, 2026, the Company incurred $
Additionally, for the three-month period ended March 31, 2026, the Company recorded an impairment of oil and gas properties of $
The depletion recorded for production on proved properties for the three months ended March 31, 2026 and 2025, amounted to $
NOTE 7 –MERGER ACQUISITION
On October 31, 2025, the Company completed the transactions contemplated by the Merger Agreement discussed in “Note 2 – Description Of Business”.
Pursuant to the Merger Agreement, (i) the First Merger Sub merged with and into NPOG, with NPOG surviving as a wholly-owned subsidiary of PEDEVCO, and (ii) the Second Merger Sub merged with and into COG, with COG surviving as a wholly-owned subsidiary of PEDEVCO. The Acquired Companies own substantial oil-weighted producing assets and significant leasehold interests in the D-J Basin and Powder River Basin located in Wyoming.
The aggregate fair value of the consideration paid in the Mergers was approximately $
The acquisition was accounted for as a business combination under the acquisition method of accounting in accordance with Accounting Standards Codification (ASC) 805, Business Combinations. The fair value of the consideration transferred was allocated to the identifiable assets acquired and liabilities assumed on a relative fair value basis and recorded as of October 31, 2025. The preliminary allocation of the fair value to the identifiable assets acquired and liabilities assumed resulted in no goodwill or bargain purchase gain being recognized. Acquisition-related costs were expensed as incurred in accordance with ASC 805.
| 12 |
| Table of Contents |
Determining the fair value of the acquired assets and assumed liabilities required significant judgment and the use of various assumptions, the most significant of which related to the valuation of NPOG’s and COG’s oil and gas properties. The inputs and assumptions used in valuing these properties were classified as Level 3 within the fair value hierarchy.
Consideration: |
|
|
| |
Series A Convertible Preferred Stock |
|
|
| |
Fair Value Per Share of Preferred Stock |
| $ |
| |
Common stock consideration, net of estimated liabilities assumed by PEDEVCO |
| $ |
| |
|
|
|
|
|
Cash paid to settle North Peak Debt |
|
|
| |
|
|
|
|
|
Total consideration |
| $ |
| |
|
|
|
|
|
Fair value of assets acquired: |
|
|
|
|
Cash and restricted cash |
| $ |
| |
Accounts receivable |
|
|
| |
Commodity derivative, asset - current |
|
|
| |
Prepaid expenses and other current assets |
|
|
| |
Evaluated oil and gas properties |
|
|
| |
Unevaluated oil and gas properties |
|
|
| |
Asset retirement costs |
|
|
| |
Other long-term assets |
|
|
| |
Total assets acquired |
| $ |
| |
|
|
|
|
|
Fair value of liabilities assumed: |
|
|
|
|
Accounts payable and accrued liabilities |
| $ |
| |
Asset retirement obligations - current |
|
|
| |
Asset retirement obligations - long-term |
|
|
| |
Other long-term liabilities |
|
|
| |
Total liabilities assumed |
| $ |
| |
|
|
|
|
|
Total identifiable net assets acquired |
| $ |
| |
Unaudited pro forma financial information. Presented below are the Company’s condensed consolidated results of operations for the period presented on an unaudited pro forma basis, as if the Mergers had occurred on January 1, 2025. The information reflects adjustments based on available data and assumptions the Company believes are factual and supportable. The unaudited pro forma financial information is not necessarily indicative of the results that would have occurred had the Mergers been completed on the assumed date, nor is it indicative of future results. It also does not give effect to any expected cost savings, synergies, or integration costs associated with the Mergers or the Acquired Assets.
(in thousands) |
| Three Months Ended March 31, 2025 |
| |
Pro forma revenues |
| $ |
| |
Pro forma net loss |
| $ | ( | ) |
At the closing of the Mergers (the “Closing”), the Company entered into a Shareholder Agreement with Century and North Peak (together, the “Juniper Shareholder”) and, for certain limited provisions, Dr. Simon G. Kukes, then Executive Chairman of the Company, and The SGK 2018 Revocable Trust (of which Dr. Kukes serves as trustee and beneficiary). The agreement grants the Juniper Shareholder board nomination rights from the Closing until the Automatic Conversion Date, including the right to designate one director nominee and one non-voting observer.
| 13 |
| Table of Contents |
Following the Automatic Conversion Date, the Board consisted of six directors, with the Juniper Shareholder’s nomination rights determined based on its ownership percentage of Company’s common stock at that time. For purposes of the Shareholder Agreement, “Juniper Beneficial Ownership” is defined as the ownership, together with affiliates, of 3,181,818 shares of Company common stock issued to the Juniper Shareholder and its affiliates on February 27, 2026, relative to
Based on Juniper Beneficial Ownership: (i) at
The Juniper Shareholder also has the right to remove or replace its designees, subject to Board approval and applicable SEC and NYSE independence and suitability requirements. At least one Juniper designee will serve on each Board committee (other than the Audit Committee) and will chair the Compensation and Nominating and Corporate Governance Committees, subject to limited exceptions.
The Shareholder Agreement also provides registration rights. The Company is required to use commercially reasonable efforts to file a registration statement within 45 days of the Automatic Conversion Date covering resale of shares issuable upon conversion of the Series A Preferred Stock, using Form S-3 or Form S-1 if necessary. The agreement permits underwritten offerings of at least $
On February 27, 2026, and at the request of the Juniper Shareholder pursuant to the Shareholder Agreement, the Board, upon recommendation of the Nominating and Corporate Governance Committee, increased its size from five (5) to six (6) directors and appointed Edward Geiser to the Board and as Chair of the Nominating and Corporate Governance Committee, to serve until his successor is duly elected and qualified or earlier resignation, death, or removal.
Also, effective February 27, 2026, Josh Schmidt, another Juniper Shareholder appointee, was appointed Chairman of the Board.
NOTE 8 – REVOLVING CREDIT FACILITY
On October 31, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”), which amended and restated its prior senior secured revolving credit agreement dated September 11, 2024, with Citibank, N.A., as administrative agent, and the lenders party thereto.
The A&R Credit Agreement matures on October 31, 2029 and provides for an initial borrowing base and elected commitments of $
The obligations are guaranteed by the Company’s subsidiaries and secured by first-priority liens on substantially all assets of the Company and its subsidiaries, including mortgages on oil and gas properties representing at least 90% of proved reserves.
Borrowings may be alternate base rate (“ABR”) loans or SOFR loans. SOFR loans bear interest at the forward-looking term rate based on the secured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”) plus a margin of 300–400 basis points, and ABR loans bear interest at the applicable base rate plus a margin of 200–300 basis points, in each case depending on borrowing base utilization. For the period ended March 31, 2026, total interest expense was $
| 14 |
| Table of Contents |
The A&R Credit Agreement includes customary representations, warranties, affirmative and negative covenants, and events of default, including a change in control. Financial covenants require (i) a minimum current ratio of 1.0 to 1.0 and (ii) a maximum leverage ratio of 3.0 to 1.0. Additional covenants restrict, among other things, indebtedness, liens, dividends, investments, asset sales, affiliate transactions, mergers, and hedging activities.
The Company is required to hedge at least
On December 2, 2025, the parties to the A&R Credit Agreement entered into a First Amendment to Credit Agreement, which amended the A&R Credit Agreement to add an additional lender and re-allocate commitments among the lender group, which amendment was deemed immaterial by the Company, as there were no changes to the maturity date, the borrowing base, or any other material items.
On May 5, 2026, the parties to the A&R Credit Agreement entered into a Second Amendment to Credit Agreement which, among other amendments set forth therein, (i) amended the definition of “EBITDAX” to (A) update the cap on permitted transaction cost add-backs to EBITDAX for any acquisition or disposition of the Company’s oil and gas properties which form the collateral for the agreement, to the greater of $
In connection with the closing of the Mergers, the Company drew $
NOTE 9 – DERIVATIVES
The Company is exposed to certain risks relating to its ongoing business operations, such as risks related to commodity prices. Therefore, the Company uses derivative instruments primarily to manage commodity price risk.
The Company enters into derivative instruments with respect to a portion of its crude oil and natural gas to hedge future prices received. These instruments are used to mitigate revenue volatility resulting from fluctuations in commodity prices. The Company does not hold or issue derivative financial instruments for speculative trading purposes.
| 15 |
| Table of Contents |
While there are many different types of derivative instruments available, we use costless collars, producer three-way collars, standalone put options, fixed-price swaps and basis swaps to attempt to manage price risk. Costless collar and three-way producer collar agreements are combinations of put and call options used to establish floor and ceiling commodity prices for a fixed volume of production during a certain time period. All collar agreements provide for payments between the counterparties if the settlement price under the agreement exceeds the ceiling or if the settlement price under the agreement is below the floor. Standalone put options are floors that are purchased for a cost and provide that counterparties make payments to us if the settlement price is below the established floor. The fixed-price swap agreements call for payments to, or receipts from, counterparties depending on whether the index price of oil or natural gas for the period is greater or less than the fixed price established for the period contracted under the fixed-price swap agreement. The basis swaps agreements effectively lock in a price differential between regional prices where the product is sold and the relevant pricing index under which oil or natural gas production is hedged.
On November 1, 2025, the Company assumed the derivative liabilities (novated hedges) associated with its Mergers (see Note 7 above) which are subject to master netting agreements. Additional derivative contracts with the same counterparty are also subject to netting. Still, in accordance with ASC 815, the Company will classify the fair value of all its derivative positions on a gross basis in its corresponding consolidated balance sheets. The Company has not designated its derivative instruments as accounting hedges. Accordingly, changes in the fair value of outstanding derivatives and settlements of derivative contracts are recognized in earnings and included in “Other Income (Expense)” under the caption “Net gain (loss) on derivative contracts” in the consolidated statements of operations.
“Derivative contract assets” and “Derivative contract liabilities” represent the estimated fair value of open derivative positions, which reflects the difference between current forward commodity prices and the contractual hedge prices for the remaining hedged volumes as of March 31, 2026 (the “mark-to-market” valuation). The following table summarizes the location and fair value amounts of all derivative contracts in the consolidated balance sheets as of March 31, 2026 (in thousands).
|
| Derivative Contracts |
| |||
Commodity derivative instruments |
| Location of gain (loss) recognized in income on derivative contracts |
| March 31, 2026 |
| |
Realized loss on derivative contracts |
| Other income and expenses - net gain (loss) on derivative contracts |
| $ | ( | ) |
Unrealized loss on derivative contracts |
| Other income and expenses - net gain (loss) on derivative contracts |
|
| ( | ) |
Total loss on derivative contracts |
|
|
| $ | ( | ) |
| 16 |
| Table of Contents |
As of March 31, 2026, the Company had the following open crude oil and natural gas derivative contracts:
Crude Oil - 3 Way Collars | ||||||||||||||||||||||||||||||||
|
| Producer Three-Way Collars (Summary of 3 separate contracts) |
|
| Participating Three-Way Collars (Summary of 3 separate contracts) |
| ||||||||||||||||||||||||||
Date |
| Volume (Boe) |
|
| Put Sold ($/Boe) |
|
| Put Bought ($/Boe) |
|
| Call Sold ($/Boe) |
|
| Volume (Boe) |
|
| Put Bought ($/Boe) |
|
| Call Sold ($/Boe) |
|
| Call Bought ($/Boe) |
| ||||||||
2Q 2026 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
3Q 2026 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
4Q 2026 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
FY 2026 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
1Q 2027 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
2Q 2027 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
3Q 2027 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
4Q 2027 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
FY 2027 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
1Q 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
2Q 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
3Q 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
4Q 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
FY 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ |
|
| $ |
| ||||||||
| 17 |
| Table of Contents |
Crude Oil - Swaps and Costless Collars | ||||||||||||||||||||
|
| Swaps |
|
| Costless Collars |
| ||||||||||||||
Date |
| Volume (Boe) |
|
| Avg. Price ($/Boe) |
|
| Volume (Boe) |
|
| Floor Price ($/Boe) |
|
| Ceiling Price ($/Boe) |
| |||||
2Q 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||
3Q 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||
4Q 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||
FY 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||
1Q 2027 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||
2Q 2027 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||
3Q 2027 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||
4Q 2027 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||
FY 2027 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||
1Q 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
2Q 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
3Q 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
4Q 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
FY 2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Natural Gas | ||||||||||||||||||||
|
| Swaps |
|
| Costless Collars |
| ||||||||||||||
Date |
| Volume (Mcf) |
|
| Avg. Price ($/mcf) |
|
| Volume (Mcf) |
|
| Floor Price ($/mcf) |
|
| Ceiling Price ($/mcf) |
| |||||
2Q 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||
3Q 2026 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
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3Q 2027 |
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4Q 2027 |
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1Q 2028 |
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3Q 2028 |
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| 18 |
| Table of Contents |
NOTE 10 – FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Authoritative guidance establishes a framework for measuring fair value and requires that fair value measurements be classified and disclosed in one of the following categories:
| · | Level 1 – Observable inputs based on quoted market prices for identical assets or liabilities in active markets. |
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| · | Level 2 – Observable inputs other than Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. |
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· | Level 3 – Unobservable inputs for the asset or liability due to little or no market activity that are significant to the fair value measurement. These inputs reflect assumptions that market participants would use in pricing the asset or liability. |
Assets and liabilities measured at fair value are classified based on the lowest level input that is significant to the measurement. The determination of the significance of inputs requires judgment and may affect the classification within the fair value hierarchy. There were no transfers between levels of the fair value hierarchy during any period presented.
The Company measures its derivative instruments at fair value on a recurring basis using a market approach. Fair value is estimated using observable commodity futures prices for the underlying commodities obtained from a third-party pricing source. These measurements are classified within Level 2 of the fair value hierarchy. The fair values of the Company’s derivatives are not based on quoted prices for identical instruments in active markets.
The Company applies fair value guidance on a non-recurring basis to certain non-financial assets and liabilities, which are not measured at fair value on an ongoing basis but are subject to adjustment if events or changes in circumstances indicate impairment or other adjustments may be necessary.
The following table, sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value as of March 31, 2026 (in thousands).
|
| Level 1 |
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| Level 2 |
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| Level 3 |
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| Total |
| ||||
Assets |
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| ||||
Derivative contract assets |
| $ |
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| $ |
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| $ |
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| $ |
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Liabilities |
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Derivative contract liabilities |
| $ |
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| $ |
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| $ |
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| $ |
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Derivative contracts listed above as Level 2 include fixed-price swaps and costless put/call collars that are carried at fair value. The Company records the net change in fair value of these positions in “Net gain (loss) on derivative contracts”.
Asset retirement obligations. The fair value of asset retirement obligation is estimated using discounted cash flow projections with primarily Level 3 inputs, using numerous estimates, assumptions and judgments regarding such factors as the existence of a legal obligation, estimated plugging and abandonment costs, timing of remediation, the credit adjusted risk-free rate and inflation rate.
Merger Acquisition. On October 31, 2025, the Company completed the Mergers with the Acquired Companies, recording assets and liabilities at fair value. Oil and gas properties and asset retirement obligations were valued using discounted cash flows with primarily Level 3 inputs, including estimated future production based upon the estimation of reserves, future operating and development costs, future commodity prices (adjusted for basis differentials), and discount rates (see Note 7—Merger Acquisition).
| 19 |
| Table of Contents |
NOTE 11 – ASSET RETIREMENT OBLIGATIONS
Activity related to the Company’s asset retirement obligations is as follows (in thousands):
|
| Three Months Ended March 31, 2026 |
| |
Balance at the beginning of the period (1) |
| $ |
| |
Accretion expense |
|
|
| |
Liabilities settled |
|
| ( | ) |
Changes in estimates, net |
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Balance at end of period (2) |
| $ |
| |
| (1) | Includes $ |
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| (2) | Includes $ |
In New Mexico, the Company, through its New Mexico operating subsidiary RAZO, has entered into a Stipulated Final Order (“SFO”) with Director of the Oil and Gas Conservation Division of New Mexico (the “OCD”) pursuant to which, among other things, RAZO agreed to reimburse the OCD for actual costs incurred by the OCD for plugging and abandoning approximately 299 inactive legacy wells in the Permian Basin Asset at a rate of $
NOTE 12 – COMMITMENTS AND CONTINGENCIES
Lease Agreements
Currently, the Company has one operating sublease for office space that requires ASC Topic 842 treatment, discussed below.
The Company’s leases typically do not provide an implicit rate. Accordingly, the Company is required to use its incremental borrowing rate in determining the present value of lease payments based on the information available at the commencement date. The Company’s incremental borrowing rate would reflect the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. However, at the time of implementation, the Company did not maintain debt at the time, and in order to apply an appropriate discount rate, the Company used a borrowing rate obtained from a financial institution at which it maintains banking accounts.
In December 2022, the Company entered into a lease agreement for approximately 5,200 square feet of office space in Houston, Texas, that commenced on
| 20 |
| Table of Contents |
Supplemental cash flow information related to the Company’s operating office sublease is included in the table below (in thousands):
|
| Three Months Ended |
| |
|
| March 31, 2026 |
| |
Cash paid for amounts included in the measurement of lease liabilities |
| $ |
| |
Supplemental balance sheet information related to operating leases is included in the table below (in thousands):
|
| March 31, 2026 |
| |
Operating lease – right-of-use asset |
| $ |
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Operating lease liabilities - current |
| $ |
| |
Operating lease liabilities - long-term |
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Total lease liability |
| $ |
| |
The weighted-average remaining lease term for the Company’s operating lease is
Lease liability with enforceable contract terms that have greater than one-year terms are as follows (in thousands):
Remainder of 2026 |
| $ |
| |
2027 |
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| |
Thereafter |
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|
| |
Total lease payments |
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Less imputed interest |
|
| ( | ) |
Total lease liability |
| $ |
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Leasehold Drilling Commitments
The Company’s oil and gas leasehold acreage is subject to expiration of leases if the Company does not drill and hold such acreage by production or otherwise exercises options to extend such leases, if available, in exchange for payment of additional cash consideration.
Other Commitments
Although the Company may, from time to time, be involved in litigation and claims arising out of its operations in the normal course of business, the Company is not currently a party to any material legal proceeding. In addition, the Company is not aware of any material legal or governmental proceedings against it or contemplated to be brought against it.
As part of its regular operations, the Company may become party to various pending or threatened claims, lawsuits and administrative proceedings seeking damages or other remedies concerning its commercial operations, products, employees and other matters.
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| Table of Contents |
Although the Company provides no assurance about the outcome of these or any other pending legal and administrative proceedings and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on the Company’s financial condition or results of operations.
Milnesand Sale Dispute and Tilloo Note Default and Litigation
On November 9, 2023, in accordance with the sale of our then wholly-owned subsidiary EOR Operating Company (“EOR”) to Tilloo Exploration and Production LLC (“Tilloo”), the Company entered into a five-year secured promissory note (the “Note”) with Tilloo, bearing interest at 10% per annum, with no payments due until January 8, 2025, and fully-amortized payments due monthly over the remaining four years of the term thereafter until maturity. The Note contains customary events of default and is secured by a lien over all the assets and capital shares of EOR created under a Security Agreement, a Security Agreement (Pledge of Corporate Securities), and a Mortgage entered into by and between the Company and Tilloo.
Tilloo failed to make its initial installment payment on January 8, 2025, and has not made any subsequent payments as of December 31, 2025. The Company issued a notice of default under the Note to Tilloo in mid-January 2025, and sought to work with Tilloo into April 2025, in an effort to either restructure the Note or arrange for the sale of the assets securing the same to an unaffiliated third-party buyer, with proceeds of such sale to be applied toward repayment of the Note. On September 18, 2025, Tilloo filed a civil lawsuit against the Company in the District Court of Harris County, Texas, alleging breach of contract, fraudulent inducement, and negligent misrepresentation. In November 2025, the Company issued to Tilloo a notice of acceleration and demand for payment under the Note and also filed a counterclaim against Tilloo for breach of contract seeking full recovery under the Note. In February 2026, the Company filed a motion for summary judgement with respect to Tilloo’s claims and the Company’s counterclaims asserted against Tilloo for breach of contract, which motion is currently pending before the Court. On May 4, 2026, Tilloo amended its lawsuit to include a statutory fraud claim and punitive damages claim and dropped its breach of contract claim. Discovery is ongoing, with trial set for March 1, 2027. The Company does not anticipate that the Company will incur any material losses related to this matter.
Phoenix Litigation
Upon the consummation of the Mergers, effective October 31, 2025, a wholly-owned subsidiary of NPOG, Navigation Powder River, LLC (“NPRLLC”), became an indirect wholly-owned subsidiary of the Company. On July 31, 2025, NPRLLC and Phoenix Energy One, LLC (“Phoenix”) entered into that certain Purchase and Sale Agreement (the “Phoenix PSA”) whereby NPRLLC agreed to sell to Phoenix certain oil and gas properties located in Campbell and Converse Counties, Wyoming. On September 10, 2025, NPRLLC filed a Petition against Phoenix in the Eleventh Business District Business Court of Texas (Navigation Powder River, LLC v. Phoenix Energy One, LLC, Eleventh Business District, Texas Business Court, Houston, TX) alleging a breach of contract by Phoenix Energy for its failure to consummate the transactions contemplated by the Phoenix PSA. The Company intends to vigorously pursue its claims in an effort to secure a favorable ruling from the court. If the matter is ultimately not resolved in the Company’s favor, the Company estimates that its potential loss will be the approximately $
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| Table of Contents |
NOTE 13 – SHAREHOLDERS’ EQUITY
All share and per-share amounts presented below have been retroactively adjusted to reflect the
Series A Convertible Preferred Stock
As part of the Mergers, the Company issued newly designated Series A Convertible Preferred Stock of the Company in two separate transactions. First, in connection with the Mergers,
In addition, concurrently with the Mergers, certain investors (the “PIPE Investors”) purchased
In both preferred stock issuances noted above, the preferred stock functioned as a temporary equity instrument that subsequently and automatically converted into
Common Stock
During the three months ended March 31, 2026, the Company granted an aggregate of
As noted above,
NOTE 14 – SHARE-BASED COMPENSATION
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award over the vesting period.
Common Stock
On February 5, 2026, in connection with his service on the Board, Director John K. Howie was granted
| 23 |
| Table of Contents |
On February 27, 2026, in connection with his appointment to the Board, Director Edward Geiser was granted
The Company grants restricted stock awards to employees. The following table summarizes activity for nonvested restricted stock awards for the period ended March 31, 2026:
Nonvested Awards |
| Number of Awards |
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| Weighted-Average Grant-Date Fair Value ($) |
| ||
Nonvested at January 1, 2026 |
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Granted |
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Vested |
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| ( | ) |
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Forfeited* |
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| ( | ) |
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Nonvested at March 31, 2026 |
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*To satisfy employee tax withholding obligations, these shares were surrendered and cancelled and were recorded as a reduction to additional paid-in capital.
Stock-based compensation expense recorded related to the vesting of restricted stock for the three months ended March 31, 2026, was $
Options
During the three months ended March 31, 2026, no stock options were granted, and the Company recognized stock option expense of $
The intrinsic value of outstanding and exercisable options at March 31, 2026 was $
| 24 |
| Table of Contents |
Option activity during the three months ended March 31, 2026, was:
|
| Number of Stock Options |
|
| Weighted Average Exercise Price |
|
| Weighted Average Remaining Contract Term (Years) |
| |||
Outstanding at December 31, 2025 |
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Expired/Canceled |
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Outstanding at March 31, 2026 |
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Exercisable at March 31, 2026 |
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NOTE 15 – EARNINGS (LOSS) PER COMMON SHARE
Earnings (loss) per common share-basic is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Net income (loss) per common share-diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing net income (loss) by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net income (loss) per common share-diluted considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares, as defined above, would have an anti-dilutive effect.
The calculation of earnings (loss) per share for the periods indicated below were as follows (amounts in thousands, except share and per share data):
Numerator: |
| March 31, 2026 |
|
| March 31, 2025 |
| ||
Net (loss) earnings |
| $ | ( | ) |
| $ |
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Effect of common stock equivalents |
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Net income adjusted for common stock equivalents |
| $ | ( | ) |
| $ |
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Denominator: |
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Weighted average common shares – basic |
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Dilutive effect of common stock equivalents: |
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Options |
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| - |
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| - |
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Denominator: |
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Weighted average common shares – diluted |
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(Loss) earnings per common share – basic |
| $ | ( | ) |
| $ |
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(Loss) earnings per common share – diluted |
| $ | ( | ) |
| $ |
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For the three months ended March 31, 2026, and 2025, share equivalents related to options to purchase
| 25 |
| Table of Contents |
NOTE 16 – INCOME TAXES
The Company’s effective tax rate was approximately
NOTE 17 — SEGMENT INFORMATION
Operating segments are defined as components of an enterprise for which separate financial information is available and regularly evaluated by the Chief Operating Decision Maker (“CODM”) for the purpose of making key operating decisions, allocating resources, and assessing operating performance. The Company operates in one reportable operating segment, oil and natural gas development, exploration and production. The Company’s oil and gas properties are managed as a whole rather than through discrete operating segments. Financial and operational information is tracked by geographic area; however, financial performance is assessed as a single enterprise and not on a geographic basis. Allocation of resources is made on a project basis across the Company’s entire portfolio without regard to geographic area, and considers among other things, return on investment, current market conditions, including commodity prices and market supply, availability of services and human resources, and contractual commitments. The Company’s President and Chief Executive Officer is its CODM.
The Company’s profitability measure is consolidated net income which is used to assess budgeted versus actual results and drives the Company’s operating cash flow. The CODM reviews significant consolidated forecasts and results of operations, including return on capital, operating expenses, and cash flow when making decisions such as the allocation of capital. The financial position, results of operations and cash flows of the Company’s reportable operating segment are consistent with the Company’s consolidated financial statements included herein.
NOTE 18 – SUBSEQUENT EVENTS
On April 30, 2026, in connection with his service on the Board, Director John K. Howie was granted
On May 5, 2026, the Company entered into a Second Amendment to the A&R Credit Agreement which, among other changes, amended certain EBITDAX calculation provisions, including updates to permitted transaction cost add-backs and the inclusion of estimated EBITDAX related to the Company’s October 2025 acquisitions from Juniper Capital Advisors, L.P. for applicable test periods. The amendment also revised the definition of “Test Period” to provide for phased annualization of EBITDAX beginning with the quarter ended December 31, 2025, updated the borrowing base redetermination schedule, and revised the reserve report delivery schedule (see Note 8 above).
| 26 |
| Table of Contents |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
The following is management’s discussion and analysis of the significant factors that affected the Company’s financial position and results of operations during the periods included in the accompanying unaudited consolidated financial statements. You should read this in conjunction with the discussion under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, and the unaudited consolidated financial statements included in this quarterly Report.
Certain abbreviations and oil and gas industry terms used throughout this Quarterly Report are described and defined in greater detail under “Glossary of Oil And Natural Gas Terms” on page 5 of our Annual Report on Form 10‑K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on March 31, 2026.
Our fiscal year ends on December 31st. Interim results are presented on a quarterly basis for the quarters ended March 31st, June 30th, and September 30th, the first quarter, second quarter and third quarter, respectively, with the quarter ending December 31st being referenced herein as our fourth quarter. Fiscal 2026 means the year ended December 31, 2026, whereas fiscal 2025 means the year ended December 31, 2025.
Certain capitalized terms used below but not otherwise defined, are defined in, and shall be read along with the meanings given to such terms in, the notes to the unaudited financial statements of the Company for the three months ended March 31, 2026, above.
Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “PEDEVCO” and “PEDEVCO Corp.” refer specifically to PEDEVCO Corp. and its wholly and majority-owned subsidiaries.
In addition, unless the context otherwise requires and for the purposes of this Report only:
| · | “Boe” refers to barrels of oil equivalent, determined using the ratio of one Bbl of crude oil, condensate or natural gas liquids, to six Mcf of natural gas; |
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| · | “Bopd” refers to barrels of oil day; |
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| · | “Mcf” refers to a thousand cubic feet of natural gas; |
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| · | “NGL” refers to natural gas liquids; |
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| · | “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; |
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| · | “SEC” or the “Commission” refers to the United States Securities and Exchange Commission; |
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| · | “SWD” means a saltwater disposal well; and |
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| · | “Securities Act” refers to the Securities Act of 1933, as amended. |
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| Table of Contents |
Available Information
The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, are filed with the SEC. The Company is subject to the informational requirements of the Exchange Act and files or furnishes reports, proxy statements and other information with the SEC. Such reports and other information filed by the Company with the SEC are available free of charge at our website (www.pedevco.com) under “Investors” – “SEC Filings”, when such reports are available on the SEC’s website. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The Company periodically provides other information for investors on its corporate website, www.pedevco.com. This includes press releases and other information about financial performance, information on corporate governance and details related to the Company’s annual meeting of shareholders. The information contained on the websites referenced in this Form 10-Q is not incorporated by reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references only.
Summary of The Information Contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. Our MD&A is organized as follows:
| ● | General Overview. Discussion of our business and overall analysis of financial and other highlights affecting us, to provide context for the remainder of our MD&A. | |
|
|
| |
| ● | Strategy. Discussion of our strategy moving forward and how we plan to seek to increase stockholder value. | |
|
|
| |
| ● | Results of Operations and Financial Condition. An analysis of our financial results comparing the three-month periods ended March 31, 2026, and 2025, and a discussion of changes in our consolidated balance sheets, cash flows and a discussion of our financial condition. | |
|
|
| |
| ● | Critical Accounting Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts. | |
General Overview
We are an oil and gas company focused on the acquisition and development of oil and natural gas assets where the latest in modern drilling and completion techniques and technologies have yet to be applied. In particular, we focus on legacy proven properties where there is a long production history, well defined geology and existing infrastructure that can be leveraged when applying modern field management technologies. Our current properties are located in the Denver-Julesberg Basin (“D-J Basin”) in Colorado and Wyoming, the Powder River Basin (the “Powder River Basin” or “PRB”) in Wyoming, and in the San Andres formation of the Permian Basin situated in West Texas and eastern New Mexico (the “Permian Basin”).
As of March 31, 2026, we held approximately 89.784 net acres in the D-J Basin located in Weld and Morgan Counties, Colorado and Laramie County, Wyoming, through our wholly-owned subsidiaries, PRH Holdings LLC (“PRH”) and North Peak Oil & Gas, LLC (“NPOG”)(the “D-J Basin Asset”), which assets are operated by the Company’s wholly-owned operating subsidiaries, Red Hawk Petroleum, LLC (“Red Hawk”), North Silo Resources, LLC (“NSR”), and Longs Peak Resources, LLC (“LPR”). On April 3, 2025, effective January 1, 2025, the Company sold all of its legacy 17 gross (15.4 net) operated wells in the D-J Basin in order to reduce plugging and abandonment liabilities and recurring operating expenses. The Company retained ownership of the associated leasehold interests, as these legacy wells no longer provided meaningful oil and gas production.
As of March 31, 2026, the Company held approximately 202,100 net acres in the Powder River Basin, predominantly located in Campbell County, Wyoming, through its wholly-owned subsidiary Century Oil and Gas Sub-Holdings, LLC (“COG”). These assets are operated by the Company’s wholly-owned operating subsidiaries, COG, Navigation Powder River, LLC (“NPR”), and Pine Haven Resources, LLC (“Pine Haven”), and are referred to as the “Powder River Basin Asset” or the “PRB Asset.”
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| Table of Contents |
As of March 31, 2026, we held approximately 14,505 net acres in the Permian Basin located in Chaves and Roosevelt Counties, New Mexico, through our wholly-owned subsidiary, Pacific Energy Development Corp. (“PEDCO”). These assets are operated by our wholly-owned operating subsidiary, Ridgeway Arizona Oil Corp. (“RAZO”), and are collectively referred to as our “Permian Basin Asset.”
As of March 31, 2026, we held interests in 184 gross (79.4 net) wells, consisting of 180 producing wells, three saltwater disposal wells, and one drilled but uncompleted wells (“DUCs”) in the D-J Basin Asset. Of these wells, 74 gross (66.9 net) were operated, and 110 gross (12.5 net) were non-operated. In the PRB Asset, we held interests in 156 gross (135.4 net) wells, consisting of 140 producing wells, 15 injection wells, and one saltwater disposal well. Of these wells, 16 gross (1.4 net) were non-operated. In the Permian Basin, we held interests in 38 gross (34.5 net) wells consisting of 34 producing wells, two injection wells, and two saltwater disposal wells.
Strategy
We believe that horizontal development and exploitation of conventional and unconventional oil and gas assets in the Rockies region, including the D-J and Powder River Basins, and the Permian Basin, represent among the most economic oil and natural gas plays in the U.S. We plan to optimize our existing assets and opportunistically seek additional acreage proximate to our currently held core acreage, as well as target other acquisitions in the Rockies region that fit our acquisition criteria. We believe there is a significant opportunity to build a leading oil and gas company in the Rockies region through both organic growth and acquisitions on terms that are more attractive than what we see in other oil and gas producing basins.
Specifically, we seek to increase stockholder value through the following strategies:
● | Grow production, cash flow and reserves by developing our operated drilling inventory and participating opportunistically in non-operated projects. We believe our extensive inventory of drilling locations in the D-J Basin, Powder River Basin, and Permian Basin, combined with our operating expertise, will enable us to continue to deliver accretive production, cash flow and reserves growth. We believe the location, concentration and scale of our core leasehold positions, coupled with our technical understanding of the reservoirs, will allow us to efficiently develop our core areas and to allocate capital to maximize the value of our resource base. |
● | Apply modern drilling and completion techniques and technologies. We own and intend to acquire additional properties that have been historically underdeveloped and underexploited. We believe our attention to detail and application of the latest industry advances in horizontal drilling, completions design, frac intensity and locally optimal frac fluids will allow us to successfully develop our properties. |
● | Optimization of development plans, well density and configuration. We own properties that are located in oil and gas producing basins that are geologically well defined, characterized by widespread vertical and horizontal development and geological well control. We utilize the extensive geological, petrophysical and production data of such properties to confirm optimal development plans, well spacing and configuration using modern reservoir evaluation methodologies. |
● | Maintain a high degree of operational control and/or form partnerships which allow for a high degree of control over non-operated properties. We believe that by retaining operational control and/or by forming partnerships which require consent and input by all partners in major development projects, we can efficiently manage the timing and amount of our capital expenditures and operating costs, and thus key in on the optimal drilling and completions strategies, which we believe will generate higher recoveries and greater rates of return per well. |
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● | Leverage extensive deal flow, technical and operational experience to evaluate and execute accretive acquisition opportunities. Our management and technical teams have an extensive track record of forming, buying, building and selling oil and gas businesses. We also have significant expertise in successfully sourcing, evaluating and executing acquisition opportunities. We believe our understanding of the business, financial, geology, geophysics and reservoir properties of potential acquisition targets will allow us to identify and acquire highly prospective acquisitions and leasing opportunities in order to grow our reserve base and maximize stockholder value. |
● | Preserve financial flexibility to pursue organic and external growth opportunities. We intend to maintain a disciplined financial profile in order to provide flexibility across various commodity and market cycles. |
Our strategy is to be the operator and/or a significant working interest owner, directly or through our subsidiaries and joint ventures, in the majority of our acreage so we can dictate the pace of development in order to execute our business plan. In areas we deem highly economic and do not have a high enough working interest to serve as operator, we seek to participate in projects if returns match or exceed other projects in our portfolio. Due to the fragmented nature of acreage positions in some of our holdings, our ownership interest does not always allow us to serve as the operator. Our net capital expenditures for 2026 are estimated at the time of this filing to range between $16 million to $20 million. This estimate includes a range of $6 million to $7 million for drilling and completion costs on our D-J Basin Assets (of which approximately $3 million is carry over from our 2025 program) and approximately $10 million to $13 million in estimated capital expenditures for optimization projects on the newly acquired assets from the Mergers. These optimization projects include jet pump to rod pump or gas lift conversions, electronic submersible pump (ESP) to rod pump conversions, compression optimization projects, recompletions, and well cleanouts that are expected to materially lower lease operating expenses on our operated assets going forward. Other minor capital expenditures included in these figures are leasing, facilities, remediation and other miscellaneous capital expenses. We anticipate that approximately 90% of our expected capital expenditures for 2026 will be allocated to the D-J Basin and 10% will be allocated collectively to the Powder River and Permian Basin. These estimates do not include any expenditures for acquisitions or other projects that may arise but are not currently anticipated. We are also currently evaluating future development plans for late 2026 and 2027, as we integrate the assets and operations acquired in the Mergers and work to execute the near-term optimization program outlined above. We periodically review our capital expenditures and adjust our capital forecasts and allocations based on liquidity, drilling results, leasehold acquisition opportunities, partner non-consents, proposals from third party operators, and commodity prices, while prioritizing our financial strength and liquidity.
We plan to continue to evaluate D-J Basin non-operated well proposals as received from third party operators and participate in those we deem most economic and prospective. If new proposals are received that meet our economic thresholds and require material capital expenditures, we have flexibility to expand our capital program or move capital from our operated D-J Basin, Powder River Basin, and Permian Basin assets, allowing for flexibility on timing of development. Our 2026 development program is based upon our current outlook for the year and is subject to revision, if and as necessary, to react to market conditions, product pricing, contractor availability, requisite permitting, capital availability, partner non-consents, capital allocation changes between assets, acquisitions, divestitures and other adjustments determined by the Company in the best interest of its shareholders while prioritizing our financial strength and liquidity.
We expect that we will have sufficient cash available to meet our needs over the next 12 months after the filing of this report and in the foreseeable future, including to fund the remainder of our 2026 development program, discussed above, which cash we anticipate being available from (i) projected cash flow from our operations, (ii) existing cash on hand, (iii) public or private debt or equity financings, including up to $7.6 million in securities which we may sell in the future in “at the market offerings”, pursuant to a Sales Agreement entered into on December 20, 2024, with Roth Capital Partners, LLC (the “Lead Agent”), and A.G.P./Alliance Global Partners (“AGP” and, together with the Lead Agent, the “Agents”) discussed in greater detail below under “Liquidity and Capital Resources—Financing” (under which we have sold 24,498 shares of common stock to date at a sales prices ranging between $14.32 to $16.02 per share), and (iv) funding through credit or loan facilities, including under the Company’s A&R Credit Agreement with Citibank, N.A., as administrative agent, which provides for an initial borrowing base of $120 million and an aggregate maximum revolving credit amount of $250 million (of which $98 million has been drawn down by the Company to date), as discussed in greater detail below under “Amended and Restated Credit Agreement”. In addition, we may seek additional funding through asset sales, farm-out arrangements, and credit facilities to fund potential acquisitions during the remainder of 2026.
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Participations Agreements Related to D-J Basin Assets
On August 21, 2024, the Company, through PRH, entered into a five-year Participation Agreement with a large private equity-backed D-J Basin exploration and production company with extensive operational experience (“Joint Development Party”), whereby the Joint Development Party assigned to PRH a 30% interest in approximately 7,607 net acres of existing oil and gas leases and PRH assigned to the Joint Development Party a 70% interest in approximately 3,166 net acres of oil and gas leases, all located within the SW Pony Prospect in the D-J Basin in Weld County, Colorado. Additionally, to facilitate joint development of the SW Pony Prospect, the parties agreed to an Area of Mutual Interest covering approximately 16,900 gross acres wherein the parties have the opportunity to participate in subsequent leasehold acquisitions proportionate to their working interest under the Participation Agreement. Each party’s participation is based on their proportionate share of the total acquisition cost. The Company participated in six wells which were drilled and completed in 2024 (the Harlequin wells), and four wells which were drilled and completed in the fourth quarter of 2025 (three Mavericks wells and one Jaws well), all of which were within this Area of Mutual Interest.
In February 2025, the Company entered into a Joint Development Agreement with a large, Denver, Colorado-based private equity-backed D-J Basin exploration and production (E&P) Company with extensive operational experience (the “Operator”), pursuant to which the parties agreed to jointly participate in the expansion and development of the Company’s Roth and Amber drilling spacing units (DSUs) located in Weld County, Colorado, with the Operator paying to the Company $1.7 million, the Company agreeing to amend the Company’s existing Roth and Amber DSUs to increase each to 1,600 acres and transferring operatorship of the DSUs to the Operator, and the parties agreeing to jointly participate in the development of the Roth and Amber DSUs. The Roth wells were drilled and completed in the fourth quarter of 2025. The Operator had until May 10, 2026, to make an election to acquire up to 50% of the Company’s working interest in the Amber DSU at an acquisition price of approximately $2.5 million, which election date the Company agreed to extend through May 18, 2026.
Merger Agreement
On October 31, 2025 (the “Closing”), the Company completed the transactions contemplated by that certain Agreement and Plan of Merger, dated October 31, 2025 (the “Merger Agreement”), by and among the Company; NP Merger Sub, LLC, a wholly owned subsidiary of the Company (the “First Merger Sub”); COG Merger Sub, LLC, a wholly owned subsidiary of the Company (the “Second Merger Sub”); NPOG; COG; and, solely for purposes of specified provisions therein, North Peak Oil & Gas Holdings, LLC (“North Peak”).
Pursuant to the Merger Agreement, (i) the First Merger Sub merged with and into NPOG, with NPOG surviving as a wholly-owned subsidiary of PEDEVCO, and (ii) the Second Merger Sub merged with and into COG, with COG surviving as a wholly-owned subsidiary of PEDEVCO.
Subject to the terms and conditions of the Merger Agreement, all of the issued and outstanding limited liability company interests of each of NPOG and COG were automatically converted into the right to receive an aggregate of 10,650,000 validly issued, fully paid and nonassessable shares of newly designated Series A Convertible Preferred Stock of the Company (the “Merger Preferred Shares”), par value $0.001 per share (the “Series A Preferred Stock”), which shares were issued to Century Oil and Gas Holdings, LLC, a Delaware limited liability company (“Century”) and North Peak. The Series A Preferred Stock automatically converted into shares of common stock of the Company, par value $0.001 per share (the “Automatic Conversion”), at a ratio of 0.5-to-1, effective February 27, 2026, following the expiration of the twenty calendar day period commencing on the distribution of an information statement to the Company’s shareholders in accordance with Rule 14c-2 of Regulation 14C promulgated under the Exchange Act (the “Automatic Conversion Date”). On the Automatic Conversion Date, the Merger Preferred Shares converted into an aggregate of 5,325,000 shares of Company common stock.
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Amended and Restated Credit Agreement
On October 31, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”), which amended and restated that prior senior secured revolving credit agreement entered into on September 11, 2024 (the “Original Credit Agreement”) among the Company, as borrower, Citibank, N.A., as administrative agent (the “Administrative Agent”), and the lenders from time to time party thereto (the “Lenders”).
The A&R Credit Agreement has a maturity date of October 31, 2029. The A&R Credit Agreement provides for an initial borrowing base and aggregate elected commitments of $120 million and an aggregate maximum revolving credit amount of $250 million. The borrowing base is scheduled to be redetermined semiannually on or about April 1 and October 1 of each calendar year, commencing on April 1, 2026, and is subject to additional adjustments from time to time, including for certain asset sales, elimination or reduction of hedge positions and title defects.
The A&R Credit Agreement contains additional restrictive covenants that limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, incur additional liens, enter into mergers and consolidations, make or declare dividends, make investments and loans, engage in transactions with affiliates.
On December 2, 2025, the parties to the A&R Credit Agreement entered into a First Amendment to Credit Agreement, which amended the A&R Credit Agreement to add an additional lender and re-allocate commitments among the lender group, which amendment was deemed immaterial by the Company, as there were no changes to the maturity date, the borrowing base, or any other material items.
On May 5, 2026, the parties to the A&R Credit Agreement entered into a Second Amendment to Credit Agreement which, among other amendments set forth therein, (i) amended the definition of “EBITDAX” to (A) update the cap on permitted transaction cost add-backs to EBITDAX for any acquisition or disposition of the Company’s oil and gas properties which form the collateral for the agreement, to the greater of $6,000,000 or five percent (5%) of the then-current borrowing base (currently $120 million), and (B) add back an estimated EBITDAX for the month of October 2025 attributable to the companies acquired in by the Company in October 2025 from Juniper Capital Advisors, L.P. for any test period that includes the fiscal quarter ended December 31, 2025; (ii) amended the definition of "Test Period" to provide for annualization of EBITDAX beginning with the Test Period ended December 31, 2025, building to a full trailing twelve-month calculation for the Test Period ending September 30, 2026; (iii) revised the borrowing base redetermination schedule so that the next scheduled redetermination occurs on or about July 1, 2026, with semi-annual redeterminations thereafter on or about April 1 and October 1 of each year; and (iv) updated the reserve report delivery schedule so that the next reserve report is due on or about June 1, 2026, with subsequent reports thereafter due on or about March 1 and September 1 of each year.
In connection with the closing of the Mergers, the Company drew $87 million under the A&R Credit Agreement. The Company subsequently borrowed an additional $6.0 million on January 8, 2026 and $5.0 million on February 5, 2026. The proceeds from these borrowings were used to fund the Company’s participation in certain non-operated well operations and to pay other Company obligations. A total of $98 million is currently outstanding under the A&R Credit Agreement as of the date of this filing.
PIPE Offering
Concurrently with the Closing of the Mergers, certain investors (the “PIPE Investors”) subscribed for and purchased an aggregate of 6,363,637 shares of Series A Preferred Stock (the “PIPE Preferred Shares”), at a price per share equal to $5.50 per share (the “Purchase Price”) ($11.00 per share of common stock issuable upon conversion thereof, on a post-reverse stock split basis), pursuant to their entry into Series A Convertible Preferred Stock Subscription Agreements in favor of the Company (the “Subscription Agreements”). On the Automatic Conversion Date, the PIPE Preferred Shares converted into 3,181,818 shares of Company common stock (the “PIPE Conversion Shares”).
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The PIPE Investors included (a) The SGK 2018 Revocable Trust, a family trust of which Dr. Simon Kukes, the then Executive Chairman of the Company is trustee and beneficiary ($15,409,977); (b) American Resources, Inc., an entity owned and controlled by J. Douglas Schick, the Chief Executive Officer, President and member of the Board ($250,003); (c) Clark R. Moore, the Executive Vice President, General Counsel and Secretary of the Company ($25,003); (d) John J. Scelfo Revocable Trust Dated October 8, 2003, a trust of which John J. Scelfo, a then member of the Board, is trustee and beneficiary ($550,000); (e) Jody D. Crook, the Chief Commercial Officer of the Company ($25,003); (f) J PED, LLC, an entity affiliated with Juniper Capital Advisors, L.P. (“Juniper”) ($18,550,004); (g) Reagan T. Dukes, the then Chief Executive Officer of the Acquired Companies, who was appointed Chief Operating Officer of the Company at the Closing of the Mergers ($52,503) and (h) Robert J. Long, the then Chief Financial Officer of the Acquired Companies, who was appointed Chief Financial Officer, Treasurer and Principal Accounting/Financial Officer of the Company at the Closing of the Mergers ($52,503). The PIPE Financing closed concurrently with the Mergers and the $35,000,004 of net proceeds raised by the Company pursuant to the PIPE Financing was used to pay off certain liabilities of the Acquired Companies in connection with the Mergers and certain expenses of the PIPE Financing and Mergers.
Second Amended and Restated Designation of Series A Convertible Preferred Stock
In preparation for the Closing of the Mergers, the Board of Directors approved the Second Amended and Restated Certificate of Designations establishing the rights, preferences, and limitations of the Company’s Series A Convertible Preferred Stock on October 29, 2025, which was filed with the Texas Secretary of State on October 31, 2025. A total of 17,013,637 shares of Series A Preferred Stock were designated. Except as required by law or the designation, Series A Preferred Stockholders had no voting rights, except the right to elect one director (the “Series A Director”) until the Automatic Conversion Date, with Josh Schmidt serving as such director.
Holders of Series A Preferred Stock were entitled to certain protective provisions, requiring approval by a majority in interest of outstanding shares for actions such as amending governing documents, changing board composition, issuing new securities, major acquisitions or disposals, indebtedness above $500,000, executive appointments, and other material corporate actions. The holders of Series A Preferred Stock were provided no dividend rights, and in the event of liquidation, dissolution, or winding-up, Series A holders were to receive distributions pari passu with common shareholders, as if their shares were converted to common stock. All of the 17,013,637 then outstanding shares of Series A Preferred Stock converted on the Automatic Conversion Date, into an aggregate of 8,506,818 shares of the Company common stock in a ratio of 0.5-for-1.
Additionally, on February 27, 2026, the Company, after approval of the Board of Directors and the stockholders pursuant to the Written Consent, filed a Second Amended and Restated Certificate of Formation of the Company, which among other things, terminated the designation of the Series A Preferred Stock. As such, as of the date of this filing, we have no Series A Preferred Stock outstanding or designated.
How We Conduct Our Business and Evaluate Our Operations
Our use of capital for acquisitions and development allows us to direct our capital resources to what we believe to be the most attractive opportunities as market conditions evolve. We have historically acquired properties that we believe had significant appreciation potential. We intend to continue to acquire both operated and non-operated properties to the extent we believe they meet our return objectives.
We will use a variety of financial and operational metrics to assess the performance of our oil and natural gas operations, including:
| · | production volumes; |
| · | realized prices on the sale of oil and natural gas, including the effects of our commodity derivative contracts; |
| · | oil and natural gas production and operating expenses; |
| · | capital expenditures; |
| · | general and administrative expenses; |
| · | net cash provided by operating activities; and |
| · | net income. |
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Results of Operations and Financial Condition
Market Conditions and Commodity Prices
Our financial results depend on many factors, particularly the price of natural gas and crude oil and our ability to market our production on economically attractive terms. Commodity prices are affected by many factors outside of our control, including changes in market supply and demand, which are impacted by, among other factors, weather conditions, inventory storage levels, basis differentials and other factors. As a result, we cannot accurately predict future commodity prices and, therefore, we cannot determine with any degree of certainty what effect increases or decreases in these prices will have on our production volumes or revenues. In addition to production volumes and commodity prices, finding and developing sufficient amounts of natural gas and crude oil reserves at economical costs are critical to our long-term success. We expect prices to remain volatile for the remainder of the year. For information about the impact of realized commodity prices on our natural gas and crude oil and condensate revenues, refer to “Results of Operations” below.
Results of Operations
The following discussion and analysis of the results of operations for the three-month periods ended March 31, 2026, and 2025, should be read in conjunction with our consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q. The majority of the numbers presented below are rounded numbers and should be considered as approximate.
Three Months Ended March 31, 2026, vs. Three Months Ended March 31, 2025
We reported a net loss for the three-month period ended March 31, 2026, of $25.6 million, or ($3.28) per common share, compared to net income of $0.1 million, or $0.03 per share, for the three-month period ended March 31, 2025. Although revenues increased by $31.5 million in the current period compared to the prior period, net income decreased by $26.6 million. This decline was primarily driven by a net loss of $31.3 million on derivative contracts (both realized and unrealized), resulting from the recent and substantial increase in commodity prices in relation to the Company’s hedge positions. Additional factors contributing to the decrease include $2.0 million in interest expense and $24.9 million in total operating expenses, which includes a $1.6 million impairment of oil and gas properties (each discussed in more detail below) combined with income tax benefit of $868,000 (see Note 16 – Income Taxes, in the notes to the consolidated financial statements above under “Part I – Financial Information—Item 1. Financial Statements”).. Prior to the Company’s Mergers in October 2025, the Company had no outstanding debt or hedge positions during the three-month period ended March 31, 2025.
Net Revenues
The following table sets forth the operating results and production data for the periods indicated:
|
| Three Months Ended March 31, |
|
| Increase |
|
| % Increase |
| |||||||
|
| 2026 |
|
| 2025 |
|
| (Decrease) |
|
| (Decrease) |
| ||||
Sale Volumes: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Crude Oil (Bbls) |
|
| 534,563 |
|
|
| 102,699 |
|
|
| 431,864 |
|
|
| 421 | % |
Natural Gas (Mcf) |
|
| 636,057 |
|
|
| 166,733 |
|
|
| 469,324 |
|
|
| 281 | % |
NGL (Bbls) |
|
| 87,568 |
|
|
| 23,143 |
|
|
| 64,425 |
|
|
| 278 | % |
Total (Boe) (1) |
|
| 728,141 |
|
|
| 153,631 |
|
|
| 574,510 |
|
|
| 374 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil (Bbls per day) |
|
| 5,940 |
|
|
| 1,141 |
|
|
| 4,799 |
|
|
| 421 | % |
Natural Gas (Mcf per day) |
|
| 7,067 |
|
|
| 1,853 |
|
|
| 5,214 |
|
|
| 281 | % |
NGL (Bbls per day) |
|
| 973 |
|
|
| 257 |
|
|
| 716 |
|
|
| 279 | % |
Total (Boe per day) (1) |
|
| 8,091 |
|
|
| 1,707 |
|
|
| 6,384 |
|
|
| 374 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Sale Price: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil ($/Bbl) |
| $ | 68.39 |
|
| $ | 68.88 |
|
| $ | (0.49 | ) |
| (1 | %) | |
Natural Gas ($/Mcf) |
|
| 2.97 |
|
|
| 5.05 |
|
|
| (2.08 | ) |
| (41 | %) | |
NGL ($/Bbl) |
|
| 20.24 |
|
|
| 35.43 |
|
|
| (15.19 | ) |
| (43 | %) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil |
| $ | 36,558 |
|
| $ | 7,074 |
|
| $ | 29,484 |
|
|
| 417 | % |
Natural Gas |
|
| 1,892 |
|
|
| 842 |
|
|
| 1,050 |
|
|
| 125 | % |
NGL |
|
| 1,772 |
|
|
| 820 |
|
|
| 952 |
|
|
| 116 | % |
Total Revenues |
| $ | 40,222 |
|
| $ | 8,736 |
|
| $ | 31,486 |
|
|
| 360 | % |
(1) | Assumes 6 Mcf of natural gas equivalents to 1 barrel of oil. |
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Total crude oil, natural gas and NGL revenues for the three-month period ended March 31, 2026, increased $31.5 million, or 360%, to $40.2 million, compared to $8.7 million for the same period a year ago, due to a favorable volume variance of $32.2 million, offset by an unfavorable price variance of $0.7 million, due primarily to the average sales price for natural gas and liquids realized by the Company decreasing compared to the prior period. The increase in production volume is related to our October 2025 Mergers whereby we added a total of 432 thousand barrels of oil equivalent (Mboe) of additional oil and gas production sales for the current period.
Operating Expenses and Other Income
The following table summarizes our production costs and operating expenses for the periods indicated (in thousands):
|
| Three Months Ended |
|
|
|
|
|
|
| |||||||
|
| March 31, |
|
| Increase |
|
| % Increase |
| |||||||
|
| 2026 |
|
| 2025 |
|
| (Decrease) |
|
| (Decrease) |
| ||||
Direct lease operating expenses |
| $ | 9,631 |
|
| $ | 1,925 |
|
| $ | 7,706 |
|
|
| 400 | % |
Workovers |
|
| 138 |
|
|
| 262 |
|
|
| (124 | ) |
| (47 | %) | |
Other* |
|
| 6,588 |
|
|
| 1,225 |
|
|
| 5,363 |
|
|
| 438 | % |
Total lease operating expenses |
| $ | 16,357 |
|
| $ | 3,412 |
|
| $ | 12,945 |
|
|
| 379 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization and accretion |
| $ | 12,450 |
|
| $ | 3,346 |
|
| $ | 9,104 |
|
|
| 272 | % |
Impairment of oil and gas properties |
| $ | 1,605 |
|
| $ | 232 |
|
| $ | 1,373 |
|
|
| 592 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative (cash) |
| $ | 2,615 |
|
| $ | 1,121 |
|
| $ | 1,494 |
|
|
| 133 | % |
Share-based compensation (non-cash) |
|
| 492 |
|
|
| 475 |
|
|
| 17 |
|
|
| 4 | % |
Total general and administrative expense |
| $ | 3,107 |
|
| $ | 1,596 |
|
| $ | 1,511 |
|
|
| 95 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
| $ | 1,995 |
|
| $ | - |
|
| $ | 1,995 |
|
|
| 100 | % |
Interest income |
| $ | 58 |
|
| $ | 64 |
|
| $ | (6 | ) |
| (9 | %) | |
Net loss on derivative contracts |
| $ | 31,266 |
|
| $ | - |
|
| $ | (31,266 | ) |
|
| 100 | % |
Other income |
| $ | 5 |
|
| $ | 2 |
|
| $ | 3 |
|
|
| 150 | % |
* Includes severance, ad valorem taxes, assessment and gathering, transportation and processing costs.
Lease operating expenses. Lease operating expenses increased by $12.9 million for the period ended March 31, 2026, primarily due to the October 2025 Mergers. Acquired properties contributed $7.2 million of direct lease operating expenses and $4.8 million of other operating costs, along with $0.9 million of higher variable expenses associated with increased legacy production volumes.
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Depreciation, depletion, amortization and accretion. Increased by $9.1 million for the period ended March 31, 2026, compared to the prior period, primarily due to the production increase noted above, which is primarily attributed to inclusion of the Acquired Companies.
Impairment of oil and gas properties. The Company recorded an impairment of oil and gas properties of $1.6 million and $0.2 in the periods ended March 31, 2026 and 2025, respectively, related to the expiration of certain leases representing 3,660 and 232 net acres, respectively, in the D-J Basin, that it allowed to expire or currently has no plans to drill prior to expiration.
General and administrative expenses (excluding share-based compensation). General and administrative expenses (excluding share-based compensation) increased by $1.5 million for the period ended March 31, 2026, compared to the prior period, primarily due to additional payroll expenses compared to the prior period, with the addition of 12 employees added in connection with the Mergers, and higher legal and audit fees due to the growth of the Company period over period.
Share-Based Compensation. Share-based compensation, which is included in general and administrative expenses in the Statements of Operations, nominally increased when comparing periods. Share-based compensation is utilized for the purpose of conserving cash resources for use in field development activities and operations.
Net loss on derivative contracts. For the period ended March 31, 2026, the Company recorded a realized loss of $3.4 million from derivative contract settlements, primarily due to crude oil prices at settlement exceeding the fixed prices specified in the contracts. The Company also recorded an unrealized loss of $27.9 million related to the mark-to-market valuation of outstanding derivative contracts, driven by increases in commodity prices during the latter part of the first quarter of 2026. This non-cash charge was driven by a sustained upward shift in the forward crude oil price curve during the latter part of the first quarter of 2026, which increased the estimated fair value of the Company's net liability position under these contracts. There were no derivative contracts in the prior period.
Interest expense. The Company recognized $2.0 million in interest expense in the current period compared to no interest expense in the prior period due, to the Company utilizing its credit facility beginning in October 2025. Interest expense for the current period consisted of $1.8 million of interest incurred under the A&R Credit Agreement (discussed above) and $0.2 million related to the amortization of deferred financing costs. No interest expense or amortization of deferred financing costs were recorded in the prior period.
Interest Income and Other Income. Includes interest earned from our interest-bearing cash accounts which modestly decreased due to increased operational spending in the current period compared to the prior period. Other income also decreased slightly period over period.
Liquidity and Capital Resources
The primary sources of cash for the Company during the three-month period ended March 31, 2026 were from $40.2 million in sales of crude oil, natural gas and NGLs and drawdowns totaling $11.0 million from our A&R Credit Agreement. The primary uses of cash were funds used for drilling, completion and operating costs.
Working Capital
At March 31, 2026, the Company’s total current liabilities of $62.9 million exceeded its total current assets of $42.5 million, resulting in a working capital deficit of $20.4 million. At December 31, 2025, total current liabilities of $64.5 million exceeded total current assets of $37.8 million, resulting in a working capital deficit of $26.7 million. The $6.3 million decrease in the working capital deficit was primarily driven by a reduction in capital payables and accrued expenses following the completion of certain drilling programs with third-party partners during the period. This improvement was coupled with an increase in accounts receivable and cash balances from initial production sales related to the applicable wells.
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Our acreage position is subject to lease expirations if we are unable to meet drilling commitments or obtain extensions. In the aggregate, a significant portion of our undeveloped acreage in the D-J Basin and Powder River Basin is scheduled to expire over the 2026–2028 period, with smaller expirations in the Permian Basin. Failure to retain these leases could result in the loss of leasehold interests and associated capitalized costs, potentially leading to write-offs of unproved properties and adversely affecting our liquidity and capital resources.
Financing
The Company has an ongoing $8.0 million offering of securities in an “at the market offering”, pursuant to which the Company may sell securities from time to time (the “ATM Offering”). During the month of June 2025, the Company sold an aggregate of 24,498 shares of common stock in five separate sales at a sales prices ranging between $14.32 to $16.02 per share via an ongoing “at the market offering” (for net proceeds of $354,000, which includes $11,000 in commission fees). The Company also incurred $214,000 in initial and subsequent legal and audit-related fees and expenses incurred in connection with the registration and placement of the ATM Offering. As of March 31, 2026, a total of $7.6 million is available for future sales of common stock under the ATM Offering.
The ATM Offering was made pursuant to the terms of that certain December 20, 2024, Sales Agreement (the “Sales Agreement”), entered into with Roth Capital Partners, LLC (the “Lead Agent”) and A.G.P./Alliance Global Partners (“AGP”, and collectively with the Lead Agent, the “Agents”), pursuant to which the Company may sell securities from time to time in an “at the market offering”. The Company will pay the Lead Agent a commission of 3.0% of the gross sales price of any shares sold under the Sales Agreement. The Company also agreed to reimburse the Agents for their reasonable and documented out-of-pocket expenses in an amount not to exceed $75,000, in connection with entering into the Sales Agreement and for the Agents’ reasonable and documented out-of-pocket expenses related to quarterly maintenance of the Sales Agreement on a quarterly basis in an amount not to exceed $5,000.
Our expected net capital expenditures for 2026 are discussed above under “Strategy”. We expect that we will have sufficient cash available to meet our needs over the next 12 months after the filing of this report and in the foreseeable future, including to fund the remaining portion of our 2026 development program, discussed above, which cash we anticipate being available from (i) projected cash flow from our operations, (ii) existing cash on hand, (iii) borrowing under our A&R Credit Agreement with Citibank, N.A., as administrative agent, which provides for an initial borrowing base of $120 million and an aggregate maximum revolving credit amount of $250 million (of which $98 million has been drawn down by the Company to date to fund the Mergers, participation in non-operated wells operations, and other Company payables), as discussed below, (iv) public or private debt or equity financings, pursuant to the ATM Offering noted above, and (v) funding through other credit or loan facilities. In addition, we may seek additional funding through asset sales, farm-out arrangements, and partnerships to fund potential acquisitions during the remainder of 2026.
On October 31, 2025, the Company entered into the Amended and Restated Credit Agreement, discussed in greater detail above.
Cash Flows (in thousands)
|
| Three Months Ended March 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Cash flows provided by operating activities |
| $ | 10,535 |
|
| $ | 5,928 |
|
Cash flows (used in) provided by investing activities |
|
| (16,476 | ) |
|
| 625 |
|
Cash flows provided by financing activities |
|
| 10,956 |
|
|
| - |
|
Net increase (decrease) in cash and restricted cash |
| $ | 5,015 |
|
| $ | 6,553 |
|
Cash flows provided by operating activities. Net cash provided by operating activities increased by $4.6 million for the current year’s period, when compared to the prior year’s period, primarily due to a decrease in net income of $26.5 million, which was offset by a $31.3 million net loss on derivative contracts and a $9.1 million increase in depreciation, depletion and amortization an $1.4 million increase in the impairment of oil and gas properties during the current period offset by a $10.7 million net decrease to our other components of working capital (predominantly from our drilling and completion activities).
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Cash flows (used in) provided by investing activities. Net cash used in investing activities increased by $17.1 million for the current year’s period, when compared to the prior year’s period, primarily due to increased cash outlays from our capital spending relating to our drilling and completion activities.
Cash flows financing activities. Consisted of an $11.0 million drawdown on our credit facility and nominal fees related to our reverse stock split. There were no cash flows from financing activities in the prior period.
Non-GAAP Financial Measures
We have included EBITDA and Adjusted EBITDA in this Report as supplements to generally accepted accounting principles in the United States of America (“GAAP”) measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. “EBITDA” represents net income before interest, taxes, depreciation and amortization. “Adjusted EBITDA” represents EBITDA, less share-based compensation, merger acquisition costs, impairment of oil and gas properties and net loss on derivative contracts. Adjusted EBITDA excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. For example, although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. Additionally, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than PEDEVCO Corp. does, limiting its usefulness as a comparative measure. You should not consider EBITDA and Adjusted EBITDA in isolation, or as substitutes for analysis of the Company’s results as reported under GAAP. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure. The following table presents a reconciliation of the GAAP financial measure of net income to the non-GAAP financial measure of Adjusted EBITDA (in thousands):
|
| Three Months Ended March 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Net (loss) income |
| $ | (25,627 | ) |
| $ | 140 |
|
Add (deduct) |
|
|
|
|
|
|
|
|
Interest expense |
|
| 1,995 |
|
|
| - |
|
Income tax (benefit) expense |
|
| (868 | ) |
|
| 76 |
|
Depreciation, depletion, amortization and accretion |
|
| 12,450 |
|
|
| 3,346 |
|
EBITDA |
|
| (12,050 | ) |
|
| 3,562 |
|
Add (deduct) |
|
|
|
|
|
|
|
|
Share-based compensation |
|
| 492 |
|
|
| 475 |
|
Merger acquisition costs |
|
| 200 |
|
|
| - |
|
Impairment of oil and gas properties |
|
| 1,605 |
|
|
| 232 |
|
Net loss on derivative contracts |
|
| 31,266 |
|
|
| - |
|
Adjusted EBITDA |
| $ | 21,513 |
|
| $ | 4,269 |
|
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Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our most significant judgments and estimates used in preparation of our consolidated financial statements.
Oil and Gas Properties, Successful Efforts Method. The successful efforts method of accounting is used for oil and gas exploration and production activities. Under this method, all costs for development wells, support equipment and facilities, and proved mineral interests in oil and gas properties are capitalized. Geological and geophysical costs are expensed when incurred. Costs of exploratory wells are capitalized as exploration and evaluation assets pending determination of whether the wells find proved oil and gas reserves. Proved oil and gas reserves are the estimated quantities of crude oil and natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, (i.e., prices and costs as of the date the estimate is made). Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based upon future conditions.
Exploratory wells in areas not requiring major capital expenditures are evaluated for economic viability within one year of completion of drilling. The related well costs are expensed as dry holes if it is determined that such economic viability is not attained. Otherwise, the related well costs are reclassified to oil and gas properties and subject to impairment review. For exploratory wells that are found to have economically viable reserves in areas where major capital expenditure will be required before production can commence, the related well costs remain capitalized only if additional drilling is under way or firmly planned. Otherwise, the related well costs are expensed as dry holes.
Exploration and evaluation expenditures incurred subsequent to the acquisition of an exploration asset in a business combination are accounted for in accordance with the policy outlined above.
Depreciation, depletion and amortization of capitalized oil and gas properties is calculated on a field-by-field basis using the unit of production method. Lease acquisition costs are amortized over the total estimated proved developed and undeveloped reserves and all other capitalized costs are amortized over proved developed reserves. Costs specific to developmental wells for which drilling is in progress or uncompleted are capitalized as wells in progress and not subject to amortization until completion and production commences, at which time amortization on the basis of production will begin.
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Revenue Recognition. The Company’s revenue is comprised entirely of revenue from exploration and production activities. The Company’s oil is sold primarily to marketers, gatherers, and refiners. Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, direct end-users, industrial users, local distribution companies, and natural-gas marketers. NGLs are sold primarily to direct end-users, refiners, and marketers. Payment is generally received from the customer in the month following delivery.
Contracts with customers have varying terms, including month-to-month contracts, and contracts with a finite term. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs.
Revenues are recognized for the sale of the Company’s net share of production volumes. Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues.
Asset Retirement Obligations. If a reasonable estimate of the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon wells can be made, the Company will record a liability (an asset retirement obligation or “ARO”) on its consolidated balance sheet and capitalize the present value of the asset retirement cost in oil and gas properties in the period in which the retirement obligation is incurred. In general, the amount of an ARO and the costs capitalized will be equal to the estimated future cost to satisfy the abandonment obligation assuming the normal operation of the asset, using current prices that are escalated by an assumed inflation factor up to the estimated settlement date, which is then discounted back to the date that the abandonment obligation was incurred using an assumed cost of funds for the Company. After recording these amounts, the ARO will be accreted to its future estimated value using the same assumed cost of funds and the capitalized costs are depreciated on a unit-of-production basis over the estimated proved developed reserves. Both the accretion and the depreciation will be included in depreciation, depletion and amortization expense on our consolidated statements of operations.
Stock-Based Compensation. Pursuant to the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation, which establishes accounting for equity instruments exchanged for employee service, we utilize the Black-Scholes option pricing model to estimate the fair value of employee stock option awards at the date of grant, which requires the input of highly subjective assumptions, including expected volatility and expected life. Changes in these inputs and assumptions can materially affect the measure of estimated fair value of our share-based compensation. These assumptions are subjective and generally require significant analysis and judgment to develop. When estimating fair value, some of the assumptions will be based on, or determined from, external data and other assumptions may be derived from our historical experience with stock-based payment arrangements. The appropriate weight to place on historical experience is a matter of judgment, based on relevant facts and circumstances. We estimate volatility by considering historical stock volatility. We have opted to use the simplified method for estimating expected term, which is equal to the midpoint between the vesting period and the contractual term.
Business Combinations. The Company accounts for business combinations using the acquisition method, recording oil and gas assets acquired and liabilities assumed at estimated fair values. Fair values are determined using discounted cash flows, market comparables, and other valuation techniques, with significant judgment applied to estimates of reserves, future commodity prices, and operating and development costs. Purchase price allocations may be adjusted during a one-year measurement period. The Mergers were completed on October 31, 2025 and have been accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”), PEDEVCO was treated as the acquirer for accounting purposes. Under the acquisition method of accounting, the assets and liabilities of Acquired Companies have been recorded at their respective fair values as of the acquisition date on October 31, 2025. As provided under ASC 805, the purchase price allocation may be subject to change for up to one year after October 31, 2025. See Note 7 – Merger Acquisition, for additional information.
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Derivative Instruments. The Company may periodically enter into derivative contracts to manage its exposure to commodity risk. These derivative contracts, which are generally placed with major financial institutions, may take the form of forward contracts, futures contracts, swaps, or options. The oil and gas reference prices upon which the commodity derivative contracts are based reflect various market indices that have a high degree of historical correlation with actual prices received by the Company for its oil and natural gas production. All derivative instruments are recorded on the consolidated balance sheet as either an asset or liability measured at fair value. Although the derivative instruments provide an economic hedge of the Company’s exposure to commodity price volatility, the Company chose not to elect hedge accounting treatment. Accordingly, the Company records the net change in the mark-to-market valuation of these positions, as well as payments and receipts on settled contracts, in “Net gain (loss) on derivative contracts” on the consolidated statements of operations.
Recently Adopted Accounting Pronouncement
In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. The Company adopted this ASU on December 31, 2025 and has reflected the required disclosures in the accompanying notes to the consolidated financial statements. The ASU had no impact on the Company’s consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, as appropriate, in order to allow timely decisions in connection with required disclosure.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”)(the Principal Executive Officer) and Chief Financial Officer (“CFO”)(the Principal Financial/Accounting Officer), 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 the end of the period covered by this Quarterly Report. Based on this evaluation, our CEO and CFO concluded as of March 31, 2026, 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 conclusion was the result of the material weaknesses identified during the preparation of the Company's year-end financial statements and reported in Item 9A of the Form 10-K for the year ended December 31, 2025 that have not yet been remediated as of March 31, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended March 31, 2026, that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting, including any corrective actions regarding significant deficiencies and material weaknesses.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Litigation and Regulatory Proceedings
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. Except as disclosed below, we are not currently involved in any legal proceedings that we believe could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations.
Such current litigation or other legal proceedings are described in, and incorporated by reference in, this “Part II, Item 1. Legal Proceedings” of this Report from, “Part I – Item 1. Financial Information” in the Notes to Consolidated Financial Statements in “Note 12 – Commitments and Contingencies”, under the heading Other Commitments. The Company believes that the resolution of currently pending matters will not individually or in the aggregate have a material adverse effect on our financial condition or results of operations. However, assessment of the current litigation or other legal claims could change in light of the discovery of facts not presently known to the Company or by judges, juries or other finders of fact, which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.
Additionally, the outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.
Governmental Proceedings
From time-to-time, we receive notices of violation from governmental and regulatory authorities, including notices relating to alleged violations of environmental statutes or the rules and regulations promulgated thereunder. While we cannot predict with certainty whether these notices of violation will result in fines, penalties or both, if fines or penalties are imposed, they may result in monetary sanctions, individually or in the aggregate, in excess of a specified threshold. We have elected to use a $1 million threshold for disclosing governmental proceedings of this nature. We believe proceedings under this threshold are not material to our business and financial condition.
In 2022, two environmental advocacy groups filed suit against the U.S. Department of Interior and the Bureau of Land Management (“BLM”) challenging certain lease sales by the BLM beginning in December of 2017 (the “BLM Litigation”). On January 17, 2025, a three-judge panel of the Ninth Circuit Court of Appeals upheld vacatur of various leases sold by the BLM, on grounds that the BLM violated the National Environmental Policy Act (“NEPA”) and the Federal Land Planning and Management Act when selling certain leases. It remains unclear whether parties involved in the BLM Litigation will seek en banc review of the decision. While the Company is not named in the BLM Litigation (as defendants, intervenors or otherwise), certain of the leases owned by the Company in the PRB have been “placed in suspense” pending a ruling by the Ninth Circuit Court of Appeals in the BLM Litigation. It is possible that the Ninth Circuit Court of Appeals ruling could result in the cancellation of some or all of these leases. In the event all of these leases are cancelled, the Company would lose leases covering approximately 84,362 net acres in the PRB, upon cancellation of which leases the Company would receive reimbursement for leasehold purchase amounts paid of approximately $79,253,934.
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Commission on March 31, 2026 (the “Form 10-K”), under the heading “Item 1A. Risk Factors”, except as discussed below, and investors are encouraged to review such risk factors in the Annual Report and below, prior to making an investment in the Company. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.
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Geopolitical conflicts and disruptions to global energy markets, including risks associated with the Strait of Hormuz, may adversely affect our business, financial condition, and results of operations
Ongoing geopolitical conflicts involving Iran and other countries in the Middle East have created significant volatility and uncertainty in global energy markets. The Strait of Hormuz, a critical transit chokepoint through which approximately 20% of the world’s oil supply and a significant portion of liquefied natural gas flows, has experienced material disruption, including reduced vessel traffic, military activity, and heightened security risks.
Although our operations are domestic, our business is indirectly exposed to global energy market conditions. Disruptions to supply, transportation constraints, or perceived risks of interruption in the Strait of Hormuz or surrounding regions may result in significant commodity price volatility, including rapid increases or decreases in oil and natural gas prices, as well as dislocations in supply chains and end markets.
In addition, military escalation or collateral damage affecting energy infrastructure, shipping routes, or regional production facilities in the Middle East may further exacerbate global supply shortages, increase input and operating costs, and contribute to broader macroeconomic instability, including inflationary pressures or recessionary conditions. These conditions may adversely impact demand for our oil and natural gas, disrupt capital markets, and impair our ability to access financing on acceptable terms.
Our ongoing development activities may also be adversely affected by such geopolitical events. Supply chain disruptions, equipment procurement delays, cost inflation, or volatility in oil and gas pricing could delay project timelines, increase capital expenditures, or reduce expected returns.
Furthermore, geopolitical instability may result in heightened regulatory scrutiny, trade restrictions, sanctions, or changes in U.S. energy policy, any of which could adversely affect our operations, counterparties, or strategic initiatives. The extent and duration of these risks remain uncertain and could have a material adverse effect on our business, financial condition, and results of operations.
Our hedging activities have in the past and may in the future prevent us from fully benefiting from increases in crude oil, natural gas and NGLs prices and may expose us to other risks, including counterparty risk, and our future production may not be sufficiently protected from any declines in commodity prices by our existing or future hedging arrangements.
We use financial derivative instruments (primarily financial fixed price swaps and collar contracts) to hedge the impact of fluctuations in commodity prices on our results of operations and cash flows. In connection with the entry into the A&R Credit Agreement, the Company was required to hedge at least 75% of its projected proved developed producing reserves (PDP) oil and gas production at the time of entry into the A&R Credit Agreement, for the first 24 months of the agreement, and 50% of its projected PDP of oil and gas production for months 25–36. Afterward, within 60 days after each fiscal quarter, the Company must show it has hedged at least 50% of expected oil and gas production for the next 18 months. The Company may hedge crude oil, natural gas, or natural gas liquids (on a barrel of oil equivalent basis) to meet these requirements, but may not hedge more than 75% of anticipated production (on a barrel of oil equivalent basis) for any month. As of the date of this report, the Company currently has approximately 75% of its crude oil production hedged through November 2027 and approximately 51% hedged from December 2027 through November 2028, and ~75% of its natural gas production hedged through November 2027 and approximately 50% hedged from December 2027 through November 2028, at various prices.
For the three months ended March 31, 2026, the Company had a net loss on derivative contracts of $31.3 million. Our hedging activities have in the past expose, and may in the future expose, us to the risk of financial loss in certain circumstances, including instances in which the counterparties to our hedging contracts fail to perform under the contracts. Our hedges have in the past and may in the future result in losses and reduce the amount of revenue we would otherwise obtain upon the sale of our oil and natural gas production and may also decrease our margins and net revenues.
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Our actual future production may be significantly higher or lower than we estimate at the time we enter into derivative contracts for the relevant period. If the actual amount of production is higher than we estimated, we will have greater commodity price exposure than we intended. If the actual amount of production is lower than the notional amount that is subject to our derivative instruments, we might be forced to satisfy all or a portion of our derivative transactions without the benefit of the cash flow from our sale of the underlying physical commodity, resulting in a substantial diminution of our liquidity. As a result of these factors, our hedging activities may not be as effective as we intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility of our cash flows.
To the extent that we have engaged, or in the future engage, in hedging activities to protect ourselves against commodity price declines, we may be prevented from fully realizing the benefits of increases in commodity prices above the prices established by our hedging contracts, similar to what occurred during the three months ended March 31, 2026. In addition, our hedging activities may expose us to the risk of financial loss in certain circumstances, including instances in which the counterparties to our hedging contracts fail to perform under the contracts.
Derivative instruments also expose us to the risk of financial loss in some circumstances, including when:
| · | the counter-party to the derivative instrument defaults on its contract obligations; |
|
|
|
| · | there is an increase in the differential between the underlying price in the derivative instrument and actual prices received; or |
|
|
|
| · | the steps we take to monitor our derivative financial instruments do not detect and prevent transactions that are inconsistent with our risk management strategies. |
In addition, depending on the type of derivative arrangements we enter into, the agreements could limit the benefit we would receive from increases in oil and gas prices. It cannot be assumed that the hedging transactions we have entered into, or will enter into, will adequately protect us from fluctuations in commodity prices.
Increases in the differential between the ceiling value for oil and natural gas prices set forth in our commodity derivative contracts and commodity derivative collar contracts is anticipated to affect our business, financial condition and results of operations.
For more information regarding our current derivative instruments see “Part I. Item 1. Financial Statements” – “Note 9 – Derivatives”.
We have recorded impairments in the past and may be required to record additional write-downs of our oil and natural gas properties in the future, including as a result of declining commodity prices and lease expirations, which could adversely affect our financial condition and results of operations.
We review our long-lived tangible and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Historically, impairments have resulted primarily from declines in oil and natural gas prices. For example, for the year ended December 31, 2020, we recorded a $19.3 million impairment related to our D-J Basin properties, and during the years ended December 31, 2024 and 2023, the Acquired Companies recorded impairment charges of $3.9 million and $21.1 million, respectively, with respect to their proved and unproved oil and natural gas properties in the PRB for 2024 and both the PRB and D-J Basin for 2023. Aside from certain lease expirations, no significant impairment was recorded for the year ended December 31, 2025.
In addition to commodity price volatility, our asset base is subject to the risk of lease expirations, which may result in the loss of leasehold interests and associated capitalized costs if we are unable to meet drilling commitments or obtain extensions. In our D-J Basin asset, 16,138 net acres are scheduled to expire during 2026, with an additional 2,133 and 638 net acres expiring in 2027 and 2028, respectively, and 8,081 net acres thereafter, in each case net to our direct ownership interest, if we do not satisfy applicable drilling or extension requirements. In the PRB, 4,822 net acres are set to expire in 2026, with 34,999 and 15,828 net acres expiring in 2027 and 2028, respectively. In the Permian Basin asset, approximately 200 net acres are scheduled to expire in 2026(net to our direct ownership interest only). If these leases expire without being developed or extended, we may be required to write off the associated unproved property costs, which could result in material non-cash charges.
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If oil, natural gas and NGL prices remain depressed for extended periods, decline materially from current levels, or if we experience significant lease expirations without replacement or development, we may be required to record additional material write-downs of both proved and unproved properties. Any such impairments or write-offs would adversely affect our balance sheet, results of operations and cash flows, and could cause the value of our securities to decline.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The Company did not issue or sell any unregistered equity securities during the quarter ended March 31, 2026, and through the date of the filing of this Report.
Use of Proceeds From Sale of Registered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
During the quarter ended March 31, 2026, certain officers and employees surrendered an aggregate of 14,192 previously issued shares of common stock to the Company for cancellation in order to satisfy tax withholding obligations arising from the vesting of restricted common stock. These transactions included J. Douglas Schick, the Company’s President and Chief Executive Officer, who surrendered 5,535 shares, Clark R. Moore, the Company’s Executive Vice President and General Counsel, who surrendered 3,294 shares, Jody Crook, the Company’s Chief Commercial Officer, who surrendered 345 shares, and Paul A. Pinkston, the Company’s Chief Accounting Officer, who surrendered 2,223 shares.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
(c) Rule 10b5-1 Trading Plans.
In the event our directors and executive officers desire to purchase or sell our shares, they are encouraged, but not required, to enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the quarter ended March 31, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f))
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ITEM 6. EXHIBITS
|
|
|
| Incorporated By Reference | |||||||
Exhibit No. |
| Description |
| Form |
| Exhibit |
| Filing Date |
| File Number | |
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| 8-K |
| 3.1 |
| 3/3/2026 |
| 001-35922 | |||
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| 8-K |
| 3.2 |
| 3/13/2026 |
| 001-35922 | |||
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| 8-K |
| 10.1 |
| 9/1/2021 |
| 001-35922 | |||
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| 8-K |
| 10.1 |
| 8/30/2021 |
| 001-35922 | |||
| Second Amendment to PEDEVCO Corp. 2021 Equity Incentive Plan |
| 8-K |
| 10.7 |
| 11/3/2025 |
| 001-35922 | ||
| PEDEVCO Corp. 2021 Equity Incentive Plan Form of Restricted Shares Grant Agreement |
| S-8 |
| 99.2 |
| 9/1/2021 |
| 333-259248 | ||
| PEDEVCO Corp. 2021 Equity Incentive Plan Form of Stock Option Grant Agreement |
| S-8 |
| 99.3 |
| 9/1/2021 |
| 333-259248 | ||
10.6 |
| First Amendment to Credit Agreement, dated as of December 2, 2025, among PEDEVCO Corp., as borrower, Citibank, N.A., as administrative agent, each guarantor party thereto, and each lender party thereto |
| 8-K |
| 10.2 |
| 5/8/2026 |
| 001-35922 | |
10.7 |
| Second Amendment to Credit Agreement, dated as of May 5, 2026, among PEDEVCO Corp., as borrower, Citibank, N.A., as administrative agent, each guarantor party thereto, and each lender party thereto |
| 8-K |
| 10.3 |
| 5/8/2026 |
| 001-35922 | |
| Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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| Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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101.INS* |
| Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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101.SCH* |
| Inline XBRL Taxonomy Extension Schema Document |
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101.CAL* |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF* |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB* |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE* |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104* |
| Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set |
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* Filed herewith.
** Furnished herewith.
# Indicates management contract or compensatory plan or arrangement.
| 46 |
| Table of Contents |
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, thereunto duly authorized.
| PEDEVCO Corp. |
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May 14, 2026 | By: | /s/ J. Douglas Schick |
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| J. Douglas Schick |
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| President and Chief Executive Officer |
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| (Principal Executive Officer) |
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| PEDEVCO Corp. |
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May 14, 2026 | By: | /s/ Robert J. Long |
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| Robert J. Long |
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| Chief Financial Officer and Treasurer |
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| (Principal Financial and Accounting Officer) |
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| 47 |
EXHIBIT 31.1
CERTIFICATION
I, J. Douglas Schick, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of PEDEVCO Corp.; |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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Date: May 14, 2026
| /s/ J. Douglas Schick | |
| J. Douglas Schick | |
| President and Chief Executive Officer | |
| (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION
I, Robert J. Long, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of PEDEVCO Corp.; |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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Date: May 14, 2026
| /s/ Robert J. Long | |
| Robert J. Long | |
| Chief Financial Officer and Treasurer | |
| (Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of PEDEVCO Corp. on Form 10-Q for the period ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Douglas Schick, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
| /s/ J. Douglas Schick | |
| J. Douglas Schick | |
| President and Chief Executive Officer | |
| (Principal Executive Officer) |
Date: May 14, 2026
The foregoing certification is not deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of PEDEVCO Corp. on Form 10-Q for the period ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert J. Long, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
| /s/ Robert J. Long | |
| Robert J. Long | |
| Chief Financial Officer and Treasurer | |
| (Principal Financial and Accounting Officer) |
Date: May 14, 2026
The foregoing certification is not deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.