ped_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2026

☐	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: 001-35922

PEDEVCO Corp.

(Exact name of registrant as specified in its charter)

Texas		22-3755993
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

575 N. Dairy Ashford, Suite 210, Houston, Texas		77079
(Address of principal executive offices)		(Zip Code)

(713) 221-1768

(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
Common Stock, $0.001 par value per share	PED	NYSE American

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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	☐
Non-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 ☐ No ☒

At May 13, 2026, there were 13,301,403 shares of the Registrant’s common stock outstanding.

PEDEVCO CORP.

TABLE OF CONTENTS

		Page
Reverse Stock Split		3
Cautionary Note Regarding Forward-Looking Statements		4

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	5

	Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025	5

	Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	6

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	7

	Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	8

	Notes to Unaudited Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41

Item 4.	Controls and Procedures	41

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	42

Item 1A.	Risk Factors	42

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45

Item 3.	Defaults Upon Senior Securities	45

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits	46

Signatures		47

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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.

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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.

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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			December 31,
	(Unaudited)			2025
Assets
Current assets:
Cash	$	7,702		$	3,222
Restricted cash		3,634			-
Accounts receivable – oil and gas		27,407			25,666
Inventory		141			61
Derivative contract assets, current		3,340			8,368
Prepaid expenses and other current assets		307			434
Total current assets		42,531			37,751

Oil and gas properties:
Oil and gas properties, subject to amortization, net		301,525			303,411
Oil and gas properties, not subject to amortization, net		15,861			18,859
Total oil and gas properties, net		317,386			322,270

Derivative contract assets		7,585			9,640
Operating lease – right-of-use asset		169			213
Deferred income taxes		96			-
Other assets		2,316			5,995
Total assets	$	370,083		$	375,869

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	9,922		$	32,436
Accrued expenses		12,418			8,245
Revenue payable		22,947			21,480
Income tax payable		28			-
Operating lease liabilities – current		170			182
Derivative contract liabilities – current		16,764			964
Asset retirement obligations – current		714			1,170
Total current liabilities		62,963			64,477

Long-term liabilities:
Revolving credit facility		98,000			87,000
Operating lease liabilities, net of current portion		-			32
Derivative contract liabilities		11,366			6,358
Asset retirement obligations, net of current portion		13,341			7,641
Deferred income taxes		-			800
Other long-term liabilities		2,228			2,197
Total liabilities		187,898			168,505

Commitments and contingencies (Note 12)

Shareholders’ equity:
Series A preferred stock, $0.001 par value, 200,000,000 shares authorized; -0- and 17,013,637 shares issued and outstanding, respectively		-			17,014
Common stock, $0.001 par value, 200,000,000 shares authorized; 13,300,621 and 4,797,239 shares issued and outstanding, respectively		13			5
Additional paid-in capital		329,659			312,205
Accumulated deficit		(147,487	)		(121,860	)
Total shareholders’ equity		182,185			207,364
Total liabilities and shareholders’ equity	$	370,083		$	375,869

See accompanying notes to unaudited consolidated financial statements.

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PEDEVCO CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(amounts in thousands, except share and per share data)

	Three Months Ended March 31,
	2026			2025
Revenue:
Oil and gas sales	$	40,222		$	8,736

Operating expenses:
Lease operating costs		16,357			3,412
Selling, general and administrative expense		3,107			1,596
Depreciation, depletion, amortization and accretion		12,450			3,346
Impairment of oil and gas properties		1,605			232
Total operating expenses		33,519			8,586

Operating income		6,703			150

Other income (expense):
Interest expense		(1,995	)		-
Interest income		58			64
Net loss on derivative contracts		(31,266	)		-
Other income (expense)		5			2
Total other (expense) income		(33,198	)		66
(Loss) Income before income taxes		(26,495	)		216
Income tax benefit (expense)		868			(76	)

Net (loss) income	$	(25,627	)	$	140

(Loss) earnings per common share:
Basic	$	(3.28	)	$	0.03
Diluted	$	(3.28	)	$	0.03

Weighted average number of common shares outstanding:
Basic		7,815,752			4,543,406
Diluted		7,815,752			4,543,406

See accompanying notes to unaudited consolidated financial statements.

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PEDEVCO CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(amounts in thousands)

	Three Months Ended March 31,
	2026			2025
Cash Flows From Operating Activities:
Net (loss) income	$	(25,627	)	$	140
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		12,450			3,346
Impairment of oil and gas properties		1,605			232
Amortization of right-of-use asset		48			28
Amortization of deferred financing costs		168			-
Share-based compensation expense		492			475
Net loss on derivative contracts		31,266			-
Cash received for derivative settlements, net		158			-
Deferred income taxes		(896	)		76
Changes in operating assets and liabilities:
Accounts receivable – oil and gas		(1,741	)		(3,853	)
Note receivable accrued interest		-			(41	)
Inventory		(80	)		-
Prepaid expenses and other current assets		521			81
Accounts payable		(16,977	)		(3,154	)
Accrued expenses		7,622			6,432
Revenue payable		1,467			2,166
Income tax payable		28			-
Other liabilities		31			-
Net cash provided by operating activities		10,535			5,928

Cash Flows From Investing Activities:
Cash paid for drilling and completion costs		(16,476	)		(1,403	)
Cash received for sale of oil and gas property		-			2,028
Net cash (used in) provided by investing activities		(16,476	)		625

Cash Flows From Financing Activities:
Proceeds from credit facility		11,000			-
Reverse stock split costs		(44	)		-
Net cash provided by financing activities		10,956			-

Net increase in cash and restricted cash		5,015			6,553
Cash and restricted cash at beginning of period		6,321			6,607
Cash and restricted cash at end of period	$	11,336		$	13,160

Supplemental Disclosure of Cash Flow Information
Cash paid for:
Interest	$	1,147		$	-
Income taxes	$	-		$	-

Noncash investing and financing activities:
Change in accrued oil and gas development costs	$	12,683		$	4,277
Changes in estimates of asset retirement costs, net	$	4,474		$	1,085
Conversion of preferred stock into common stock	$	17,014		$	-
Issuance of restricted common stock	$	-		$	1

See accompanying notes to unaudited consolidated financial statements.

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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						Common Stock					Additional Paid-in			Accumulated
	Shares			Amount			Shares			Amount		Capital			Deficit			Totals
Balances at December 31, 2025		17,013,637		$	17,014			4,797,239		$	5	$	312,205		$	(121,860	)	$	207,364
Issuance of restricted common stock		-			-			10,949			-		-			-			-
Restricted common stock surrendered for tax withholding		-			-			(14,192	)		-		-			-			-
Conversion of preferred stock into common stock		(17,013,637	)		(17,014	)		8,506,818			8		17,006			-			-
Reduction for fractional shares in reverse stock split		-			-			(193	)		-		(44	)		-			(44	)
Stock-based compensation		-			-			-			-		492			-			492
Net loss		-			-			-			-		-			(25,627	)		(25,627	)
Balances at March 31, 2026		-		$	-			13,300,621		$	13	$	329,659		$	(147,487	)	$	182,185

	Series A Preferred Stock				Common Stock				Additional Paid-in			Accumulated
	Shares		Amount		Shares		Amount		Capital			Deficit			Totals
Balances at December 31, 2024		-	$	-		4,474,765	$	4	$	227,098		$	(111,498	)	$	115,604
Issuance of restricted common stock		-		-		92,205		1		(1	)		-			-
Stock-based compensation		-		-		-		-		475			-			475
Net income		-		-		-		-		-			140			140
Balances at March 31, 2025		-	$	-		4,566,970	$	5	$	227,572		$	(111,358	)	$	116,219

See accompanying notes to unaudited consolidated financial statements.

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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 1-for-20 reverse stock split of its issued and outstanding shares of common stock (the “Reverse Stock Split”). The Reverse Stock Split was approved by the Company’s stockholders on October 29, 2025 and became effective on February 27, 2026, subject to the determination of the Board of Directors to move forward with the Reverse Stock Split and determination of the final Reverse Stock Split ratio. On February 27, 2026, following the effectiveness of the stockholder consent, the Company’s Board of Directors determined to move forward with the Reverse Stock Split and approved the 1-for-20 reverse stock ratio.

As a result of the Reverse Stock Split:

	·	every 20 shares of issued and outstanding common stock were automatically combined into one share of common stock;
	·	the par value of the Company’s common stock remained unchanged at $0.001 per share; and
	·	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.

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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.

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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	$	36,558	$	7,074
Natural gas sales		1,892		842
Natural gas liquids sales		1,772		820
Total revenue from customers	$	40,222	$	8,736

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	$	7,702	$	3,222
Restricted cash*		3,634		-
Restricted cash included in other assets		-		3,099
Total cash and restricted cash	$	11,336	$	6,321

* 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.

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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	$	434,218		$	3,475		$	-	$	1,711		$	439,404
Oil and gas properties, not subject to amortization		24,545			318			-		(1,711	)		23,152
Asset retirement costs		7,037			4,474			-		-			11,511
Accumulated depreciation and depletion		(98,046	)		(11,546	)		-		-			(109,592	)
Accumulated impairment		(45,484	)		(1,605	)		-		-			(47,089	)
Total oil and gas properties, net	$	322,270		$	(4,884	)	$	-	$	-		$	317,386

For the three-month period ended March 31, 2026, the Company incurred $3.8 million of capital expenditures primarily related to completion activities for 10 non-operated wells in the D-J Basin, in which the Company holds working interests ranging from 1.1% to 6.3%.

Additionally, for the three-month period ended March 31, 2026, the Company recorded an impairment of oil and gas properties of $1.6 million, related to undeveloped leases representing 3,660 net acres in the D-J Basin that it allowed to expire or currently has no plans to drill prior to expiration.

The depletion recorded for production on proved properties for the three months ended March 31, 2026 and 2025, amounted to $11.5 million and $3.0 million, respectively.

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 $179.9 million. Of this amount, $115.6 million was paid in cash at closing (October 31, 2025), including (a) $87.0 million drawn under the Company’s Amended and Restated Credit Agreement (net of $1.3 million in debt issuance costs) and (b) proceeds from certain investors who subscribed for and purchased an aggregate of 6,363,637 shares of PEDEVCO Series A Preferred Stock at a purchase price of $5.50 per share ($11.00 per common stock share issuable upon conversion thereof, on a post-reverse stock split basis), resulting in gross proceeds of $35.0 million. The cash consideration was further reduced by $4.7 million in transaction costs directly related to the Mergers. On February 27, 2026, the Series A Preferred Stock converted into 3,181,818 shares of PEDEVCO common stock automatically pursuant to its terms (the “Automatic Conversion Date”).

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.

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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

SEC Form 10-Q filed by Pedevco Corp.