PEDEVCO CORP

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 September 1, 2023, which expires on February 28, 2027. The remaining monthly payments are approximately $15,800 through February 2026 and increase to approximately $16,000 through the end of the lease. The Company paid a security deposit of $14,700.

For the years ended December 31, 2025 and 2024, the Company incurred lease expense of $168,000 and $110,000, respectively, for the lease.

The Company believes its existing leased office space is suitable for the conduct of its business. We believe that this arrangement is suitable for the conduct of our business.

• Our business operations may be affected by worldwide economic, political and miliary events, including certain ongoing conflicts.
• Volatility in oil and gas prices makes it hard for us to plan and project our operations, capital expenditures, and financial performance.
• Our exploration, development and exploitation projects require substantial capital expenditures that may exceed cash on hand, cash flows from operations and potential borrowings, and we may be unable to obtain needed capital on satisfactory terms, which could adversely affect our future growth.
• Our oil and natural gas reserves are estimated and may not reflect the actual volumes of oil and natural gas we will receive, and significant inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves.
• Approximately 49% of our total proved reserves are classified as proved undeveloped and may ultimately prove to be less than estimated.
• If actual reserves are lower than anticipated, the financial condition and results of operations of the Company could be adversely affected.
• Approximately 181,093 net acres in the PRB are located on federal lands as of December 31, 2025, which are subject to administrative permitting requirements, current and potential federal legislation, regulation and orders and pending litigation that may limit or restrict oil and natural gas operations on federal lands.
• Our hedging activities may 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 may have accidents, equipment failures or mechanical problems while drilling or completing wells or in production activities, which could adversely affect our business.
• Our operations are subject to operational hazards and unforeseen interruptions for which we may not be adequately insured.
• Our strategy as an onshore resource player may result in operations concentrated in certain geographic areas and may increase our exposure to many of the risks described in this Annual Report.
• Unless we replace our oil and natural gas reserves, our reserves and production will decline, which will adversely affect our business, financial condition and results of operations.
• Our strategy includes acquisitions of oil and natural gas properties, and our failure to identify or complete future acquisitions successfully, or not produce projected revenues associated with the future acquisitions could reduce our earnings and hamper our growth.
• We may purchase oil and natural gas properties with liabilities or risks that we did not know about or that we did not assess correctly, and, as a result, we could be subject to liabilities that could adversely affect our results of operations.
• We may incur losses or costs as a result of title deficiencies in the properties in which we invest.
• Our identified drilling locations are scheduled over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.
• We currently license only a limited amount of seismic and other geological data and may have difficulty obtaining additional data at a reasonable cost, which could adversely affect our future results of operations.
• The unavailability or high cost of drilling rigs, completion equipment and services, supplies and personnel, including hydraulic fracturing equipment and personnel, could adversely affect our ability to establish and execute exploration and development plans within budget and on a timely basis, which could have a material adverse effect on our business, financial condition and results of operations.
• We have limited control over activities on properties we do not operate.
• The marketability of our production is dependent upon oil and natural gas gathering and transportation and storage facilities owned and operated by third parties, and the unavailability of satisfactory oil and natural gas transportation arrangements have had a material adverse effect on our revenue in the past and may again in the future.
• An increase in the differential between the NYMEX or other benchmark prices of oil and natural gas and the wellhead price we receive for our production has adversely affected our business, financial condition and results of operations.
• Financial difficulties encountered by our oil and natural gas purchasers, third-party operators or other third parties could decrease our cash flow from operations and adversely affect the exploration and development of our prospects and assets.
• The calculated present value of future net revenues from our proved reserves will not necessarily be the same as the current market value of our estimated oil and natural gas reserves.
• Competition in the oil and natural gas industry is intense, making it difficult for us to acquire properties, market oil and natural gas and secure trained personnel.
• Our competitors may use superior technology and data resources that we may be unable to afford or that would require a costly investment by us in order to compete with them more effectively.
• Uncertainties associated with enhanced recovery methods may result in us not realizing an acceptable return on our investments in such projects.
• Competition for hydraulic fracturing services and water disposal could impede our ability to develop our oil and gas plays.
• Our operations are substantially dependent on the availability of water. Restrictions on our ability to obtain water may have an adverse effect on our financial condition, results of operations and cash flows.
• Downturns and volatility in global economies and commodity and credit markets have, and in the future may, materially adversely affect our business, results of operations and financial condition.
• Improvements in or new discoveries of alternative energy technologies could have a material adverse effect on our financial condition and results of operations.
• Competition due to advances in renewable fuels may lessen the demand for our products and negatively impact our profitability.
• Future litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements.
• We may be subject in the normal course of business to judicial, administrative or other third-party proceedings that could interrupt or limit our operations, require expensive remediation, result in adverse judgments, settlements or fines and create negative publicity.
• Approximately 50% of our Colorado, New Mexico, and Wyoming properties, are undeveloped; therefore, the risk associated with our success is greater than would be the case if the majority of such properties were categorized as proved developed producing.
• Part of our strategy involves drilling in existing or emerging oil and gas plays using some of the latest available horizontal drilling and completion techniques. The results of our planned exploratory drilling in these plays are subject to drilling and completion technique risks, and drilling results may not meet our expectations for reserves or production. As a result, we may incur material write-downs and the value of our undeveloped acreage could decline if drilling results are unsuccessful.
• Prospects that we decide to drill may not yield oil or natural gas in commercially viable quantities.
• Negative public perception regarding us and/or our industry could have an adverse effect on our operations.
• The physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects. An economy-wide transition to lower GHG energy sources could have a variety of adverse effects on our operations and financial results.
• The requirements, restrictions and covenants in our A&R Credit Agreement, including interest payable thereunder, may restrict our ability to operate our business and might lead to a default under such agreement.
• Our obligations under the A&R Credit Agreement are secured by a first priority security interest in substantially all of our assets and various Company guarantees.
• Continued increases in interest rates will cause our debt service obligations to increase and may have an adverse effect on our operations.
• Risks Related to Management, Employees and Directors
• Potential conflicts of interest could arise for certain members of our management team that hold management positions with other entities and our largest stockholder.
• We depend significantly upon the continued involvement of our present management.
• Juniper beneficially owns 52% of our common stock, which gives Juniper majority voting control over stockholder matters and Juniper’s interests may be different from your interests; and as a result of such ownership, we are a “controlled company” under applicable NYSE American rules.
• Risks Relating to Government Regulations
• New or revised rules, regulations and policies may be issued, and new legislation may be proposed, that could impact the oil and gas exploration and production industry.
• New or amended environmental legislation or regulatory initiatives could result in increased costs, additional operating restrictions, or delays, or have other adverse effects on us.
• The Federal Government previously instituted a moratorium on new oil and gas leases and permits on federal onshore and offshore lands, which may have a material adverse effect on the Company and its results of operations.
• SEC rules could limit our ability to book additional proved undeveloped reserves (“PUDs”) in the future.
• Proposed changes to U.S. tax laws, if adopted, could have an adverse effect on our business, financial condition, results of operations, and cash flows.
• We may incur substantial costs to comply with the various federal, state, and local laws and regulations that affect our oil and natural gas operations, including as a result of the actions of third parties.
• Regulations could adversely affect our ability to hedge risks associated with our business and our operating results and cash flows.
• We have identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting. If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.
• We have previously concluded that certain of our previously issued financial statements should not be relied upon and have restated certain of our previously issued financial statements which may affect investor confidence and raise reputational issues and may subject us to additional risks and uncertainties, including increased professional costs and the increased possibility of legal proceedings and regulatory inquiries.
• Risks Related to Our Common Stock
• We currently have a sporadic and volatile market for our common stock, and the market for our common stock is and may remain sporadic and volatile in the future.
• An active and sustained trading market for our common stock may not develop in the future.
• Our outstanding options may adversely affect the trading price of our common stock.
• We are subject to the Continued Listing Criteria of the NYSE American and our failure to satisfy these criteria may result in delisting of our common stock.
• Due to the fact that our common stock is listed on the NYSE American, we are subject to financial and other reporting and corporate governance requirements which increase our costs and expenses.
• Risks Associated with Our Governing Documents and Texas Law
• Our Certificate of Formation and Bylaws provide for indemnification of officers and directors at our expense, which may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers or directors.
• Our Certificate of Formation contains a specific provision that limits the liability of our directors for monetary damages to the Company and the Company’s stockholders.
• Anti-takeover provisions in our Certificate of Formation and our Bylaws, as well as provisions of Texas law, might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our securities.
• Our Board of Directors can authorize the issuance of preferred stock, which could diminish the rights of holders of our common stock and make a change of control of our company more difficult even if it might benefit our stockholders.
• Risks Relating to the Mergers
• Combining the businesses of NPOG and COG with the Company may be more difficult, costly or time-consuming than expected and the Company may fail to realize the anticipated synergies and other benefits of the Mergers, which may adversely affect the Company’s business results and negatively affect the value of our Common Stock.