Company: PED
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001654954-25-013092
Chunk: 83

Company: PEDEVCO CORP
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 83
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 2023, in accordance with the sale of our then wholly-owned subsidiary EOR Operating Company (“EOR”) to Tilloo Exploration and Production LLC (“Tilloo”), the Company entered into a five-year secured promissory note (the “Note”) with Tilloo, bearing interest at 10% per annum, with no payments due until January 8, 2025, and fully-amortized payments due monthly over the remaining four years of the term thereafter until maturity. The Note contains customary events of default and is secured by a lien over all the assets and capital shares of EOR created under a Security Agreement, a Security Agreement (Pledge of Corporate Securities), and a Mortgage entered into by and between the Company and Tilloo.  Tilloo failed to make its initial installment payment on January 8, 2025, and has not made any subsequent payments as of September 30, 2025. The Company issued a notice of default under the Note to Tilloo in mid-January 2025 and sought to work with Tilloo into April 2025 in an effort to either restructure the Note or arrange for the sale of the assets securing the same to an unaffiliated third-party buyer, with proceeds of such sale to be applied toward repayment of the Note. On September 18, 2025, Tilloo filed a civil lawsuit against the Company in the District Court of Harris County, Texas, alleging breach of contract, fraudulent inducement, and negligent misrepresentation. The Company is currently in the process of preparing a response and intends to vigorously defend against these allegations, and make appropriate counterclaims against Tilloo, where available. Due to Tilloo’s sustained default and a determination by the Company that the prospect of recovery is remote, the Company wrote off the outstanding balance of the Note in the second quarter of 2025. As such, the outstanding balance of the Note as of September 30, 2025 is nil.  Accordingly, a $1,267,000 note receivable – credit loss has been recognized in the consolidated statements of operations for the nine months ended September 30, 2025. However, the Company continues to consider avenues and remedies available to collect on all amounts due and owing to the Company from Tilloo. Additionally, the Company has fully written off post-closing adjustments receivable due from Tilloo related to the sale of EOR in the amount of $111,000. These write