Business Context and Reporting Period
Company: Trio Petroleum Corp (TPET)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: July 31, 2026
Business Overview: An oil and gas exploration and development company operating in California, Utah, Saskatchewan, and Alberta. The company recently shifted operational focus to Canadian assets following the termination of its McCool Ranch operations in California. As of July 31, 2026, producing wells were located in Saskatchewan and Alberta.
Subsequent Event: On August 28, 2026, the Company effected a one-for-nine reverse stock split. All share and per-share data in this report have been retroactively adjusted to reflect this split.
Key Financial Metrics
| Metric | Three Months Ended July 31, 2026 | Nine Months Ended July 31, 2026 |
|---|---|---|
| Revenues, Net | $348,581 | $679,031 |
| Net Loss | $(1,971,426) | $(4,246,515) |
| Net Loss Per Share (Basic & Diluted) | $(0.39) | $(1.36) |
| Cash and Cash Equivalents | $24,292,784 (as of July 31, 2026) | |
| Working Capital | $23,477,554 (as of July 31, 2026) | |
| Total Assets | $37,900,417 (as of July 31, 2026) | |
| Total Liabilities | $1,411,286 (as of July 31, 2026) | |
| Stockholders' Equity | $36,489,131 (as of July 31, 2026) |
Cash Flow (Nine Months Ended July 31, 2026):
- Net cash used in operating activities: $(2,550,968)
- Net cash used in investing activities: $(92,360)
- Net cash provided by financing activities: $26,020,227
Material Changes vs. Prior Period
- Revenue Growth: Net revenue increased 81.2% quarter-over-quarter (QoQ) and 199.8% year-over-year (YoY) for the nine-month period, driven by expanded production in Canadian assets (Saskatchewan and Alberta).
- Expense Increases: Operating expenses rose significantly due to a one-time stock-based compensation charge of $1.254 million related to restricted share grants to executives and directors, and a $300,000 accrued cash bonus for the CEO.
- Debt Elimination: The Company fully converted or extinguished all outstanding convertible notes payable by February 13, 2026, reducing interest expense and eliminating the associated liability.
- Liquidity Improvement: Cash balances increased from $882,162 (Oct 31, 2025) to $24.3 million (July 31, 2026), primarily due to an At-The-Market (ATM) offering program.
- Going Concern Status: Management concluded that substantial doubt regarding the Company's ability to continue as a going concern has been alleviated due to the capital raised during the period.
Guidance, Outlook, and Risks
Capital Resources and ATM Program: The Company sold 3,860,043 shares under its ATM agreement for gross proceeds of approximately $27.0 million. Following the removal of sales limitations under Form S-3, the aggregate amount available for sale under the ATM agreement is now $65.0 million. Management believes current liquidity is sufficient to fund operations for at least 12 months.
Operational Outlook:
- Canada: Focus remains on expanding production and optimization of assets acquired from Novacor and Capital Land. Two Alberta wells commenced production in May 2026.
- California: The South Salinas Project remains in evaluation status with no proved reserves established. Permitting efforts continue.
- Utah: The Letter of Intent (LOI) for the P.R. Spring project was extended to May 15, 2028, pending production targets.
Risks and Contingencies:
- Customer Concentration: 100% of revenue is derived from a single customer (Cenovus Energy Inc.).
- Commodity Prices: Results are sensitive to volatility in oil and natural gas prices.
- Regulatory: Operations are subject to environmental and regulatory compliance in multiple jurisdictions (US and Canada).
- Legal Settlement: The Company received a $43,532 distribution from a class action settlement involving its former auditor, BF Borgers CPA PC.
Investor Verification Checklist
- Reverse Stock Split Impact: Verify that all historical share counts and per-share metrics in the filing have been retroactively adjusted for the 1-for-9 split effective August 28, 2026.
- Stock-Based Compensation: Confirm the $1.254 million expense in Q3 2026 relates to fully vested, one-time grants to executives and directors, which significantly impacted the net loss.
- ATM Capacity: Note the expanded ATM capacity of $65 million and the potential for future dilution as the company pursues acquisitions.
- Asset Retirement Obligations (ARO): Review the new ARO liabilities recognized for the Alberta wells ($38,120) and the Novacor acquisition ($124,201) and their impact on future cash requirements.
- Customer Concentration: Assess the risk associated with selling 100% of crude oil production to a single purchaser.