PEDEVCO Swings to Loss Amid Revenue Dip, Higher Costs

TL;DR

**PEDEVCO's Q3 loss and revenue drop are a red flag; the recent acquisition needs to deliver big to turn this ship around.**

AI Summary

PEDEVCO Corp. reported a net loss of $325,000 for the three months ended September 30, 2025, a significant decline from the net income of $2.915 million in the same period of 2024. For the nine months ended September 30, 2025, the company posted a net loss of $1.861 million, compared to a net income of $6.369 million in the prior year. Revenue from oil and gas sales decreased to $6.961 million for the three months ended September 30, 2025, down from $9.050 million in 2024, and fell to $22.669 million for the nine-month period from $28.977 million. Operating expenses increased, with total operating expenses reaching $7.795 million for the quarter, up from $6.954 million, and $25.240 million for the nine months, up from $23.638 million. This increase was driven by higher depreciation, depletion, amortization and accretion, which rose to $4.010 million for the quarter from $3.055 million, and an impairment of oil and gas properties totaling $907,000 for the nine months. The company also recorded a note receivable credit loss of $1.378 million for the nine-month period. Cash and cash equivalents significantly increased to $10.922 million as of September 30, 2025, from $4.010 million at December 31, 2024, primarily due to $12.905 million in net cash provided by operating activities. The company completed the acquisition of North Peak Oil & Gas, LLC and Century Oil and Gas Sub-Holdings, LLC on October 31, 2025, which is expected to impact future financial performance.

Why It Matters

PEDEVCO's shift from profitability to a net loss, coupled with declining oil and gas sales, signals potential headwinds for investors. The increase in operating expenses, particularly depreciation and impairment charges, suggests challenges in asset valuation and operational efficiency within a competitive energy market. While the significant increase in cash and cash equivalents is positive, the underlying operational losses could pressure future capital allocation and shareholder returns. The recent acquisition of North Peak Oil & Gas and Century Oil and Gas Sub-Holdings, LLC, though not yet reflected, introduces a new layer of integration risk and opportunity that could redefine PEDEVCO's competitive standing and market valuation.

Risk Assessment

Risk Level: high — PEDEVCO reported a net loss of $325,000 for Q3 2025 and a $1.861 million net loss for the nine months, a stark reversal from prior year profits. Oil and gas sales decreased by 23% to $6.961 million in Q3 2025 from $9.050 million in Q3 2024, indicating declining core business performance. The company also recognized a $907,000 impairment of oil and gas properties and a $1.378 million note receivable credit loss, highlighting asset value and credit quality concerns.

Analyst Insight

Investors should exercise caution and closely monitor PEDEVCO's integration of the recently acquired North Peak and Century Oil and Gas assets. Given the current operational losses and declining revenue, a 'wait and see' approach is prudent to assess if the acquisition can reverse the negative financial trends and generate accretive value.

Financial Highlights

debt To Equity

0.18

revenue

$6.961 million

operating Margin

-12.0%

total Assets

$135.888 million

total Debt

$20.520 million

net Income

($325,000)

eps

N/A

gross Margin

N/A

cash Position

$10.922 million

revenue Growth

-23.1%

Revenue Breakdown

Key Numbers

• $325,000 — Net Loss (For the three months ended September 30, 2025, compared to $2.915 million net income in 2024.)
• $1.861 million — Net Loss (For the nine months ended September 30, 2025, compared to $6.369 million net income in 2024.)
• $6.961 million — Oil and Gas Sales Revenue (For the three months ended September 30, 2025, down from $9.050 million in 2024.)
• $22.669 million — Oil and Gas Sales Revenue (For the nine months ended September 30, 2025, down from $28.977 million in 2024.)
• $7.795 million — Total Operating Expenses (For the three months ended September 30, 2025, up from $6.954 million in 2024.)
• $10.922 million — Cash and Cash Equivalents (As of September 30, 2025, up from $4.010 million at December 31, 2024.)
• $907,000 — Impairment of Oil and Gas Properties (For the nine months ended September 30, 2025.)
• $1.378 million — Note Receivable Credit Loss (For the nine months ended September 30, 2025.)
• 92,519,352 — Common Shares Outstanding (As of September 30, 2025.)
• $5.496 million — Overstatement of Tax Benefit (Restatement of deferred income taxes as of December 31, 2024.)

Key Players & Entities

• PEDEVCO Corp. (company) — Registrant and oil and gas company
• North Peak Oil & Gas, LLC (company) — Acquired company in October 2025 merger
• Century Oil and Gas Sub-Holdings, LLC (company) — Acquired company in October 2025 merger
• Permian Basin (other) — Location of PEDEVCO's oil and gas properties
• Denver-Julesberg Basin (other) — Location of PEDEVCO's oil and gas properties
• SEC (regulator) — Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• NYSE American (other) — Exchange where PEDEVCO Common Stock is registered
• Pacific Energy Development Corp. (company) — Wholly-owned operating subsidiary of PEDEVCO
• PRH Holdings LLC (company) — Wholly-owned subsidiary of PEDEVCO

FAQ

Risk Factors

• Net Loss and Declining Revenue [high — financial]: The company reported a net loss of $325,000 for the three months ended September 30, 2025, a significant shift from a $2.915 million net income in the prior year. For the nine-month period, the net loss was $1.861 million, compared to a $6.369 million net income. This decline is accompanied by a decrease in oil and gas sales revenue, falling to $6.961 million from $9.050 million for the quarter and $22.669 million from $28.977 million for the nine months.
• Increased Operating Expenses [medium — operational]: Total operating expenses rose to $7.795 million for the quarter, up from $6.954 million in the prior year. For the nine-month period, expenses increased to $25.240 million from $23.638 million. This increase is largely driven by higher depreciation, depletion, amortization, and accretion, which grew to $4.010 million for the quarter from $3.055 million.
• Impairment and Credit Loss [high — financial]: A significant factor contributing to the financial downturn is an impairment of oil and gas properties totaling $907,000 for the nine months ended September 30, 2025. Additionally, the company recorded a note receivable credit loss of $1.378 million for the same period, impacting profitability.
• Tax Benefit Overstatement [medium — financial]: The company restated its deferred income taxes as of December 31, 2024, due to an overstatement of tax benefit by approximately $5.496 million. This error stemmed from not appropriately applying prior period net operating losses in the tax benefit calculation.
• Commodity Price Volatility [high — market]: As an oil and gas producer, PEDEVCO's financial performance is inherently tied to the volatile prices of oil and natural gas. Fluctuations in these commodity prices can significantly impact revenue, profitability, and the valuation of its oil and gas properties.
• Acquisition Integration Risk [medium — operational]: The company completed the acquisition of North Peak Oil & Gas, LLC and Century Oil and Gas Sub-Holdings, LLC on October 31, 2025. While expected to impact future performance, the integration of these entities carries operational and financial risks, including potential synergies not being realized or unforeseen integration costs.
• Environmental and Regulatory Compliance [medium — regulatory]: The oil and gas industry is subject to stringent environmental regulations. Changes in regulations, compliance costs, or potential liabilities related to environmental impact can affect operations and financial results.
• Liquidity and Future Funding [medium — financial]: Despite an increase in cash and cash equivalents to $10.922 million as of September 30, 2025, the company's net loss and increased operating expenses warrant close monitoring of liquidity. Future drilling programs and acquisitions will require ongoing capital, and the company's ability to secure financing will be critical.

Industry Context

PEDEVCO operates in the highly competitive and capital-intensive oil and gas exploration and production sector. The industry is characterized by significant price volatility for crude oil and natural gas, driven by global supply and demand dynamics, geopolitical events, and economic conditions. Companies in this sector face ongoing challenges related to finding and developing reserves, managing operational costs, and complying with evolving environmental regulations.

Regulatory Implications

The oil and gas industry is subject to extensive federal, state, and local regulations concerning environmental protection, safety, and resource management. Changes in these regulations, such as stricter emissions standards or new drilling restrictions, can increase compliance costs and impact operational feasibility. PEDEVCO must remain vigilant in adhering to these regulations to avoid penalties and operational disruptions.

What Investors Should Do

1. Monitor acquisition integration progress
2. Analyze trends in operating expenses
3. Evaluate commodity price hedging strategies
4. Assess the impact of impairment charges and credit losses

Key Dates

• 2025-09-30: End of Third Quarter 2025 — Reported net loss of $325,000 and revenue of $6.961 million, reflecting a decline from the prior year. Cash and cash equivalents stood at $10.922 million.
• 2025-10-31: Acquisition of North Peak Oil & Gas, LLC and Century Oil and Gas Sub-Holdings, LLC — This strategic acquisition is expected to influence future financial performance, though integration risks are present.
• 2025-10-31: Filing of 2024 Annual Report on Form 10-K/A (Amendment No. 3) — Included restatement of deferred income taxes as of December 31, 2024, correcting an overstatement of tax benefit by $5.496 million.
• 2024-12-31: End of Fiscal Year 2024 — Company reported net income of $6.369 million and revenue of $28.977 million for the nine months ended September 30, 2024. Cash and cash equivalents were $4.010 million.

Glossary

Depreciation, depletion, amortization and accretion

These are non-cash expenses that represent the reduction in value of tangible and intangible assets over time. Depreciation applies to tangible assets, depletion to natural resources like oil and gas, amortization to intangible assets, and accretion to the unwinding of discount on asset retirement obligations. (An increase in these expenses to $4.010 million for the quarter significantly contributed to the rise in operating expenses and the net loss.)

Impairment of oil and gas properties

A charge taken when the carrying value of oil and gas properties on the balance sheet exceeds their estimated recoverable value, often due to changes in commodity prices, production levels, or regulatory environments. (A $907,000 impairment for the nine-month period negatively impacted the company's net income.)

Note receivable – credit loss

An expense recognized when it's probable that a lender will not be able to collect all amounts due on a note receivable. This reflects a reduction in the expected value of the loan. (A $1.378 million credit loss on a note receivable for the nine-month period further contributed to the company's losses.)

Deferred income taxes

Taxes that are paid or received in future periods. They arise from temporary differences between accounting income and taxable income. (The company restated its deferred income taxes due to an overstatement of tax benefit by $5.496 million as of December 31, 2024.)

Accumulated deficit

The total cumulative net losses of a company since its inception, less any cumulative net income. It represents a negative balance in retained earnings. (The accumulated deficit increased to ($113,359,000) as of September 30, 2025, reflecting the company's recent net losses.)

Asset retirement obligations

The costs associated with the retirement of tangible long-lived assets, such as plugging and abandoning oil wells. These are typically recognized when the asset is acquired or constructed. (These obligations are listed as current and long-term liabilities, with current portion at $616,000 and net long-term portion at $5,805,000 as of September 30, 2025.)

Year-Over-Year Comparison

PEDEVCO Corp. has experienced a significant downturn in financial performance compared to the prior year. For the three months ended September 30, 2025, the company reported a net loss of $325,000, a stark contrast to the $2.915 million net income in the same period of 2024. Revenue from oil and gas sales also declined by 23.1% to $6.961 million. Operating expenses have risen, driven by higher depreciation, depletion, amortization, and accretion, and further impacted by an impairment of oil and gas properties and a note receivable credit loss. While cash reserves have increased substantially to $10.922 million, this is largely due to operating cash flows, which are under pressure from declining revenues and rising costs.

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value per share PED NYSE Americ

Filing Documents

• ped_10q.htm (10-Q) — 1080KB
• ped_ex22.htm (EX-2.2) — 22KB
• ped_ex311.htm (EX-31.1) — 11KB
• ped_ex312.htm (EX-31.2) — 11KB
• ped_ex321.htm (EX-32.1) — 4KB
• ped_ex322.htm (EX-32.2) — 4KB
• ped_10qimg1.jpg (GRAPHIC) — 6KB
• 0001654954-25-013092.txt ( ) — 4331KB
• ped-20250930.xsd (EX-101.SCH) — 44KB
• ped-20250930_lab.xml (EX-101.LAB) — 261KB
• ped-20250930_cal.xml (EX-101.CAL) — 46KB
• ped-20250930_pre.xml (EX-101.PRE) — 206KB
• ped-20250930_def.xml (EX-101.DEF) — 90KB
• ped_10q_htm.xml (XML) — 501KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 4 Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 4 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 6 Consolidated Statements of Shareholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 7 Notes to Unaudited Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 38 Item 4.

Controls and Procedures

Controls and Procedures 38

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 39 Item 1A.

Risk Factors

Risk Factors 39 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44 Item 3. Defaults Upon Senior Securities 44 Item 4. Mine Safety Disclosures 44 Item 5. Other Information 44 Item 6. Exhibits 45

Signatures

Signatures 46 2 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 the 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 un

Forward-looking statements may include statements about

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; our ability to successfully integrate the assets and operations of the Acquired Companies (as defined and discussed below), including the planned benefits of such transaction; 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, natural gas liquids (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 war in Israel, which conflicts are ongoing; our future operating results; future acquisition transactions;

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS P EDEVCO CORP. CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share and per share data) Assets September 30, 2025 (Unaudited) December 31, 2024 (Restated) Current assets: Cash and cash equivalents $ 10,922 $ 4,010 Note receivable, current - 293 Accounts receivable – oil and gas 5,002 7,995 Prepaid expenses and other current assets 229 917 Total current assets 16,153 13,215 Oil and gas properties: Oil and gas properties, subject to amortization, net 93,431 95,070 Oil and gas properties, not subject to amortization, net 14,400 8,442 Total oil and gas properties, net 107,831 103,512 Note receivable - 933 Operating lease – right-of-use asset 256 224 Deferred income taxes 7,833 7,255 Other assets 3,815 3,210 Total assets $ 135,888 $ 128,349 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 10,295 $ 2,625 Accrued expenses 1,339 2,255 Revenue payable 2,208 1,266 Operating lease liabilities – current 178 99 Asset retirement obligations – current 616 663 Total current liabilities 14,636 6,908 Long-term liabilities: Operating lease liabilities, net of current portion 79 129 Asset retirement obligations, net of current portion 5,805 5,708 Total liabilities 20,520 12,745 Commitments and contingencies Shareholders' equity: Common stock, $ 0.001 par value, 200,000,000 shares authorized; 92,519,352 and 89,495,267 shares issued and outstanding, respectively 93 89 Additional paid-in capital 228,634 227,013 Accumulated deficit ( 113,359 ) ( 111,498 ) Total shareholders' equity 115,368 115,604 Total liabilities and shareholders' equity $ 135,888 $ 128,349 See accompanying notes to unaudited consolidated financial statements. 4 Table of Contents P EDEVCO CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (amounts in thousands, except share and per sh

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 interim unaudited consolidated 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/A (Amendment No. 3) for the year ended December 31, 2024, filed with the SEC on October 31, 2025 (the "2024 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, and

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