MORGAN EP INC (Tables)

12 Months Ended

Dec. 31, 2025

in thousands
	December 31, 2025			December 31, 2024

Assets:
Cash	$	18		$	15
Revenue receivables		—			343
Joint interest billing receivables		2,014			1,738
Other receivables		49			2
Prepaids and other current assets		72			35
Current assets		2,153			2,133

Property, plant and equipment
Oil and gas properties, net - full cost method		11,644			6,959
Other property, plant and equipment		23			34
Total property, plant and equipment - net		11,667			6,993

Other noncurrent assets
Operating lease right-of-use assets, net		185			227
Total noncurrent assets		185			227

Total assets	$	14,005		$	9,353

Liabilities, Member's and Stockholder's Deficit

Current liabilities
Accounts payable	$	6,263		$	6,656
Revenue payable		214			319
Short-term loan payable		2,958			—
Current portion of operating lease liabilities		54			47
Deferred income		5			—
Due to parent		1,148			550
Note payable - Due to parent		10,500			—
Accrued liabilities		10,544			3,162
Accrued liabilities - Due to parent		2,749			—
Total current liabilities		34,435			10,734

Long-term liabilities
Asset retirement obligations		5			4
Long-term operating lease liabilities		153			207
Note payable - Due to parent		—			10,500
Long-term accrued liabilities - Due to parent		—			1,471
Total long-term liabilities		158			12,182
Total liabilities		34,593			22,916

Commitments and Contingencies (Note 9 and Note 10)

Member's deficit		—			(13,563	)

Stockholder's deficit
Preferred stock, $0.001 par value, 10,000,000 shares authorized, zero shares issued at December 31, 2025		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized 6,800,000 shares issued at December 31, 2025		7			—
Common stock discount		(7	)		—
Accumulated deficit		(20,588	)		—
Total stockholder's deficit		(20,588	)		—

Total liabilities, member's and stockholder's deficit	$	14,005		$	9,353

Schedule of Condensed Statements of Operations

	Year Ended December 31,						Period from inception (April 3, 2023 through December 31,)
	2025			2024			2023

Oil and gas revenue	$	177		$	2,710		$	270

Operating costs and expenses
Lease operating		798			2,694			268
Production and ad valorem taxes		13			261			27
Marketing, transportation and gathering		34			85			—
Depreciation, depletion and amortization		170			1,467			60
Accretion		1			1			—
Impairment of oil and gas properties		2,018			6,678			—
Bad debt expense		282			—			—
General and administrative		1,980			2,042			1,510
Total operating costs and expenses		5,296			13,228			1,865

Other income (expense)
Interest income		—			6			16
Rental income		20			—			—
Other income		7			—			—
Interest expense		(1,933	)		(1,247	)		(225	)
Total other income (expense), net		(1,906	)		(1,241	)		(209	)
Net loss	$	(7,025	)	$	(11,759	)	$	(1,804	)

Schedule of Condensed Statements of Cash Flows

	Year Ended December 31,						Period from inception (April 3, 2023) through December 31
	2025			2024			2023
Cash flows from operating activities
Net loss	$	(7,025	)	$	(11,759	)	$	(1,804	)
Adjustments to reconcile net loss to cash flows used in operating activities
Depreciation, depletion and amortization		170			1,467			61
Amortization of deferred financing costs		33			—			—
Amortization of right-of-use asset		42			43			12
Accretion		1			1			—
Provision for credit losses		282			—			—
Impairment of oil and gas properties		2,018			6,678			—
Changes in operating assets and liabilities
Accounts receivable – oil and natural gas sales		61			121			(464	)
Accounts receivable – joint interest billings		(276	)		(1,508	)		(291	)
Other receivables		(47	)		(2	)		—
Prepaids and other current assets		(37	)		98			(133	)
Accounts payable		(393	)		4,284			85
Revenue payable		(105	)		518			221
Prepayments from owners		—			—			1,701
Due to parent		598			537			13
Current portion of operating lease liabilities		(47	)		(28	)		—
Accrued liabilities		567			(3,772	)		810
Accrued liabilities - due to parent		1,278			1,246			225
Net cash used in operating activities		(2,880	)		(2,076	)		436
Cash flows from investing activities
Capital expenditures		(42	)		(2,597	)		(5,700	)
Acquisition of oil and gas properties		—			—			(500	)
Additions to other property, plant and equipment		—			—			(48	)
Net cash used in investing activities		(42	)		(2,597	)		(6,248	)
Cash flows from financing activities
Proceeds from note payable - affiliate		—			2,247			8,253
Proceeds from short-term debt		3,000			—			—
Deferred financing costs paid		(75	)		—			—
Cash flows provided by financing activities		2,925			2,247			8,253

Net change in cash		3			(2,426	)		2,441
Beginning of year		15			2,441			—

End of year	$	18		$	15		$	2,441
Supplemental disclosure of cash flow information
Cash paid for interest	$	100		$	—		$	—
Noncash investing and financing activities:
Operating lease right-of-use assets	$	—		$	—		$	(282	)
Acquisition of oil and natural gas working interests funded by accrued liabilities	$	—		$	(3,019	)	$	—
Capital expenditures funded by accrued liabilities	$	6,820		$	849		$	4,181
Prepayments applied to joint interest	$	—		$	122		$	1,579
Change in asset retirement costs	$	—		$	(1	)	$	4

EQUUS TOTAL RETURN, INC. 10-K/A