PEDEVCO CORP

Previous wording

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.

Current wording

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 and six months ended June 30, 2026, above.

Previous wording

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.

Current wording

As of June 30, 2026, we held approximately 88,605 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.

Previous wording

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.”

Current wording

As of June 30, 2026, the Company held approximately 202,380 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.”

Previous wording

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.

Current wording

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 currently provides a borrowing base of $125 million and an aggregate maximum revolving credit amount of $250 million (of which $85 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.

Previous wording

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.

Current wording

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 but did not make this election.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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. During Q2 2026, the Company paid $13 million, resulting in an outstanding balance of $85.0 million as of June 30, 2026.

Previous wording

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.

Current wording

The following discussion and analysis of the results of operations for the three and six-month periods ended June 30, 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.

Previous wording

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.

Current wording

Total crude oil, natural gas and NGL revenues for the three-month period ended June 30, 2026, increased $39.1 million, or 561%, to $46.1 million, compared to $7.0 million for the same period a year ago. Of the total increase in revenues, $35.8 million is attributable to increased sales volumes and $3.3 million is attributable to increased pricing compared to prior period. The increase in production volume is related to our October 2025 Mergers

Previous wording

*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.

Current wording

*Lease operating expenses.*Lease operating expenses increased by $13.6 million for the three months ended June 30, 2026, primarily due to the October 2025 Mergers. Acquired properties contributed $6.9 million of direct lease operating expenses and $5.0 million of other operating costs, along with $1.7 million of higher variable expenses associated with increased legacy production volumes.

Previous wording

*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.

Current wording

*Depreciation, depletion, amortization and accretion.*Increased by $6.3 million for the three months ended June 30, 2026, compared to the prior period, primarily due to the production increase noted above, which is primarily attributed to inclusion of the Acquired Companies.

Previous wording

*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.

Current wording

*Share-Based Compensation.*Share-based compensation, which is included in general and administrative expenses in the Statements of Operations, slightly decreased when comparing periods.

Previous wording

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.

Current wording

Interest expense. The Company recognized $2.0 million in interest expense in the current period compared to no interest expense in the prior period as a result of the Company utilizing its credit facility beginning in October 2025. Interest expense for the current period consisted of $1.8 million in 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.

Previous wording

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 (seeNote 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.

Current wording

We reported a net loss for the six month period ended June 30, 2026, of $8.2 million, or ($0.77) per common share, compared to a net loss of $1.5 million, or ($0.34) per common share, for the six months ended June 30, 2025. Although operating income increased by $24.2 million in the current period compared to the prior period, primarily the result of the October 2025 Mergers, net income decreased by $6.6 million. The decline was primarily driven by a net loss of $26.3 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. Additionally, the Company recorded $4.0 million in interest expense during the six months ended June 30, 2026. Prior to the Company’s Mergers in October 2025, the Company had no outstanding debt or hedge positions as of or for the six months ended June 30, 2025.

Previous wording

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.

Current wording

*Impairment of oil and gas properties.*The Company recorded an impairment of oil and gas properties of $2.4 million and $0.7 million during the six months ended June 30, 2026 and 2025, respectively, related to the expiration of certain leases representing 5,662 and 776 net acres, respectively, in the D-J Basin, that it allowed to expire or currently has no plans to drill prior to expiration.

Previous wording

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.

Current wording

*General and administrative expenses (excluding share-based compensation).*General and administrative expenses (excluding share-based compensation) increased by $3.3 million for the six months ended June 30, 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.

Previous wording

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.

Current wording

The primary sources of cash for the Company during the six-month period ended June 30, 2026 were from $86.3 million in sales of crude oil, natural gas and NGLs. As of June 30, 2026, the Company has $12.1 million in cash and restricted cash and availability of $40 million under the A&R credit Agreement. The primary uses of cash were funds used for drilling, completion and operating costs.

Previous wording

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.

Current wording

At June 30, 2026, the Company’s total current liabilities of $50.7 million exceeded its total current assets of $39.8 million, resulting in a working capital deficit of $10.9 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 $15.8 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.

Previous wording

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.

Current wording

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 a borrowing base of $125 million and an aggregate maximum revolving credit amount of $250 million (of which $85 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.

Previous wording

**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).

Current wording

**Cash flows provided by operating activities.**Net cash provided by operating activities increased by $20.4 million for the current year’s period, when compared to the prior year’s period, primarily due to an increase in operating income of $24.2 million, which was partially offset by a $7.8 million in cash paid for derivative settlements during the first half of 2026.

Previous wording

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.

Current wording

Cash flows (used in) provided by investing activities. Net cash used in investing activities increased by $17.0 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.

Previous wording

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,…

Excerpt shortened here; the source contains the full paragraph.

Current wording

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 (non-cash), merger acquisition costs, impairment of oil and gas properties and unrealized gain (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 …

Excerpt shortened here; the source contains the full paragraph.