EMPIRE PETROLEUM CORP 10-K

ITEM 9A. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this report, the Company carried out an evaluation under the supervision and participation of the Company’s Principal Executive Officer/Principal Financial Officer, along with our management, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on this evaluation, the Company’s Principal Executive Officer/Principal Financial Officer concluded that the disclosure controls and procedures were effective, as of the end of the period covered by this report, in ensuring the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (Principal Executive Officer/Principal Financial Officer), to allow timely decisions regarding required disclosure. Inherent Limitations on Effectiveness of Controls The Company’s disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their desired objectives. Management recognizes that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of their inherent limitations, disclosure controls and procedures and internal control over financial reporting may not prevent or detect all errors or misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation . Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Under the supervision and with the participation of the Company’s management, including its Principal Executive Officer/Principal Financial Officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) as set forth in Internal Control - Integrated Framework. Based on our evaluation under that framework, our management concluded that our internal control over financial reporting is effective as of December 31, 2025. 37 Table of Contents Changes in Internal Control over Financial Reporting While we continue to implement design enhancements to our internal control procedures, we believe that there were no changes to our internal control over financial reporting which were identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Exchange Act during the fourth quarter of 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Attestation Report of Registered Public Accounting Firm This report does not contain an attestation report of our independent registered public accounting firm related to internal control over financial reporting because the rules for smaller reporting companies provide an exemption from the attestation requirement. ​ ITEM 9B. OTHER INFORMATION. The Company was not informed by any of its directors or Section 16 officers of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K, during the fourth quarter of 2025. ​ ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. ​ 38 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. The information called for by this Item 10 is incorporated herein by reference to our definitive Proxy Statement for 2026 annual meeting of stockholders (“2026 Proxy Statement”) to be filed with the SEC no later than 120 days following the fiscal year ended December 31, 2025. ITEM 11. EXECUTIVE COMPENSATION. The information called for by this Item 11 is incorporated herein by reference to our 2026 Proxy Statement to be filed with the SEC no later than 120 days following the fiscal year ended December 31, 2025. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The information called for by this Item 12 is incorporated herein by reference to our 2026 Proxy Statement to be filed with the SEC no later than 120 days following the fiscal year ended December 31, 2025. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE. The information called for by this Item 13 is incorporated herein by reference to our 2026 Proxy Statement to be filed with the SEC no later than 120 days following the fiscal year ended December 31, 2025. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The information called for by this Item 14 is incorporated herein by reference to our 2026 Proxy Statement to be filed with the SEC no later than 120 days following the fiscal year ended December 31, 2025. ​ 39 Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) (1)    Financial Statements ​ The financial statements under this item are included in Item 8 of Part II of this Annual Report on Form 10-K. (2)    Schedules ​ NONE (3)    Exhibits Exhibit No. ​ Description ​ ​ ​ 3.1 ​ Amended and Restated Certificate of Incorporation of Empire Petroleum Corporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K dated March 4, 2022, which was filed on March 9, 2022). 3.2 ​ Certificate of Designation of Series A Voting Preferred Stock of Empire Petroleum Corporation (incorporated herein by reference to Exhibit 3.2 to the Company’s Form 8-K dated March 4, 2022, which was filed on March 9, 2022). 3.3 ​ Amended and Restated Bylaws of Empire Petroleum Corporation (incorporated herein by reference to Exhibit 3.3 to the Company’s Form 8-K dated March 4, 2022, which was filed on March 9, 2022). 4.1 ​ Description of the Common Stock of Empire Petroleum Corporation (incorporated herein by reference to Exhibit 4.1 to the Company’s Form 10-K for the fiscal year ended December 31, 2021, which was filed on March 31, 2022). 4.2 ​ Common Share Warrant Certificate No. Energy Evolution-2 dated May 31, 2024 (incorporated herein by reference to Exhibit 4 to the Company’s Form 8-K dated May 24, 2024, which was filed on May 31, 2024). 4.3 ​ Common Share Warrant Certificate No. Mulacek Note 2025 dated September 24, 2025 (incorporated herein by reference to Exhibit 4 to the Company’s Form 8-K dated September 24, 2025, which was filed on September 26, 2025). 10.1* ​ Empire Petroleum Corporation 2019 Stock Option Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K dated April 3, 2019, which was filed on April 9, 2019). 10.2* ​ Form of Non-Qualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K dated April 3, 2019, which was filed on April 9, 2019). 10.3 ​ Loan Agreement dated as of August 6, 2020, by and between Empire Texas LLC and Petroleum Independent & Exploration LLC (incorporated herein by reference to Exhibit 10.6 to the Company’s Form 8-K dated August 6, 2020, which was filed on August 11, 2020). 10.4* ​ Employment Agreement dated as of August 18, 2021, by and between Empire Petroleum Corporation and Michael R. Morrisett (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K dated August 18, 2021, which was filed on August 24, 2021). 10.5* ​ Empire Petroleum Corporation 2021 Stock and Incentive Compensation Plan (incorporated herein by reference to the Company’s Information Statement on Schedule 14C filed August 31, 2021). 10.6* ​ Form of Non-Qualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.24 to the Company’s Form 10-K for the fiscal year ended December 31, 2021, which was filed on March 31, 2022). 10.7* ​ Form of Restricted Stock Units Award Agreement (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.25 to the Company’s Form 10-K for the fiscal year ended December 31, 2021, which was filed on March 31, 2022). 10.8* ​ Form of Restricted Stock Units Award Agreement (Executive Officers) (incorporated herein by reference to Exhibit 10.26 to the Company’s Form 10-K for the fiscal year ended December 31, 2021, which was filed on March 31, 2022). 10.9* ​ Empire Petroleum Corporation 2022 Stock and Incentive Compensation Plan (incorporated herein by reference to Annex A to the Company’s Proxy Statement on Schedule 14A filed on July 27, 2022). 10.10* ​ Empire Petroleum Corporation 2023 Stock and Incentive Compensation Plan (incorporated herein by reference to Annex A to the Company’s Proxy Statement on Schedule 14A filed on May 1, 2023). 10.11 ​ Shared Services Agreement, dated as of August 1, 2023, by and between PIE Operating, LLC and Empire Petroleum Corporation (incorporated herein by reference to Exhibit 10.8 to the Company’s Form 10-Q for the quarter ended September 30, 2023, which was filed on November 13, 2023). 10.12 ​ Revolver Loan Agreement, dated as of December 29, 2023, by and between Empire North Dakota LLC and Empire ND Acquisition LLC, as borrowers, and Equity Bank, as lender (incorporated herein by reference to Exhibit 10 to the Company’s Form 8-K dated December 29, 2023, which was filed on January 5, 2024). 10.13 ​ Empire Petroleum Corporation Promissory Note Due February 15, 2026 in the aggregate principal amount of $5.0 million in favor of Energy Evolution Master Fund, Ltd. (incorporated herein by reference to Exhibit 10 to the Company’s Form 8-K dated February 16, 2024, which was filed on February 21, 2024). 10.14* ​ Empire Petroleum Corporation 2024 Stock and Incentive Compensation Plan (incorporated herein by reference to Annex A to the Company’s Proxy Statement on Schedule 14A, filed on April 29, 2024). 40 Table of Contents 10.15 ​ Note Repayment and Loan Termination Agreement dated as of July 31, 2024, by and among Petroleum Independent & Exploration, LLC, Empire Texas LLC and Empire Petroleum Corporation (incorporated herein by reference to Exhibit 10 to the Company’s Form 8-K dated July 31, 2024, which was filed on August 6, 2024). 10.16 ​ First Amendment to Revolver Loan Agreement dated as of November 18, 2024, by and between Empire North Dakota LLC and Empire ND Acquisition LLC, as borrowers, and Equity Bank, as lender (incorporated herein by reference to Exhibit 10 to the Company’s Form 8-K dated November 18, 2024, which was filed on November 22, 2024). 10.17 ​ Empire Petroleum Corporation Promissory Note due June 17, 2027 in the aggregate principal amount of $4.0 million in favor of Phil E. Mulacek (incorporated herein by reference to Exhibit 10 to the Company’s Form 8-K dated June 17, 2025, which was filed on June 23, 2025). 10.18 ​ Second Amendment to Revolver Loan Agreement dated as of June 18, 2025, by and between Empire North Dakota LLC, Empire ND Acquisition LLC, and Empire Texas Development LLC, as borrowers, and Equity Bank, as lender (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended June 30, 2025, which was filed on August 13, 2025). 10.19 ​ Empire Petroleum Corporation Promissory Note due September 23, 2027 in the aggregate principal amount of $4.0 million in favor of Phil E. Mulacek (incorporated herein by reference to Exhibit 10 to the Company’s Form 8-K dated September 24, 2025, which was filed on September 26, 2025). 10.20 ​ Letter Agreement dated November 5, 2025 between Empire Petroleum Corporation and Phil E. Mulacek (incorporated herein by reference to Exhibit 10 to the Company’s Form 8-K dated November 5, 2025, which was filed on November 7, 2025). 10.21 ​ Third Amendment to Revolver Loan Agreement dated as of December 29, 2025, by and between Empire North Dakota LLC, Empire ND Acquisition LLC, and Empire Texas Development LLC, as borrowers, and Equity Bank, as lender, (incorporated herein by reference to Exhibit 10 to the Company’s Form 8-K dated December 29, 2025, which was filed on January 5, 2026). 10.22 ​ Empire Petroleum Corporation Promissory Note due May 19, 2026 in the aggregate principal amount of $3.0 million in favor of Phil E. Mulacek (incorporated herein by reference to Exhibit 10 to the Company’s Form 8-K dated February 19, 2026, which was filed on February 23, 2026). 19 ​ Empire Petroleum Corporation Insider Trading Policy (incorporated herein by reference to Exhibit 19 to the Company’s Form 10-K for the fiscal year ended December 31, 2024, which was filed on March 27, 2025). 21 ​ Subsidiaries of Empire Petroleum Corporation (submitted herewith). 23.1 ​ Consent of Grant Thornton LLP (submitted herewith). 23.2 ​ Consent of Cawley, Gillespie & Associates, Inc. (submitted herewith). 31.1 ​ Rule 13a – 14(a)/15d – 14(a) Certification of Michael R. Morrisett, Chief Executive Officer (submitted herewith). 31.2 ​ Rule 13a – 14(a)/15d – 14(a) Certification of Michael R. Morrisett, Principal Financial Officer (submitted herewith). 32.1 ​ Section 1350 Certification of Michael R. Morrisett, Chief Executive Officer (submitted herewith). 32.2 ​ Section 1350 Certification of Michael R. Morrisett, Principal Financial Officer (submitted herewith). 97* ​ Empire Petroleum Corporation Policy for the Recovery of Erroneously Awarded Compensation (incorporated herein by reference to Exhibit 97 to the Company’s Form 10-K for the fiscal year ended December 31, 2023, which was filed on March 28, 2024). 99.1 ​ Cawley, Gillespie & Associates, Inc. Summary Report (submitted herewith). 101 ​ Financial Statements for Inline XBRL format (submitted herewith). 104 ​ Cover Page Interactive Data File (embedded within Inline XBRL document). *Indicates a management contract or compensatory plan or arrangement identified under the requirements of Item 15 of Form 10-K. ​ ITEM 16. FORM 10-K SUMMARY. None. ​ 41 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ ​ ​ Empire Petroleum Corporation ​ ​ ​ ​ ​ Date: March 13, 2026 By: /s/ Michael R. Morrisett ​ ​ Name: Michael R. Morrisett ​ ​ Title: President and Chief Executive Officer ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature ​ ​ ​ Title ​ ​ ​ Date ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Michael R. Morrisett ​ Director, President and Chief Executive Officer ​ March 13, 2026 MICHAEL R. MORRISETT ​ (Principal Executive Officer and Principal Financial Officer) ​ ​ ​ ​ ​ ​ ​ /s/ Matthew E. Watson ​ Chief Accounting Officer ​ March 13, 2026 MATTHEW E. WATSON ​ (Principal Accounting Officer) ​ ​ ​ ​ ​ ​ ​ /s/ Phil E. Mulacek ​ Director and Chairman of the Board ​ March 13, 2026 PHIL E. MULACEK ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Andrew L. Lewis ​ Director ​ March 13, 2026 ANDREW L. LEWIS ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Mason H. Matschke ​ Director ​ March 13, 2026 MASON H. MATSCHKE ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Benjamin J. Marchive II ​ Director ​ March 13, 2026 BENJAMIN J. MARCHIVE II ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ J. Kevin Vann ​ Director ​ March 13, 2026 J. KEVIN VANN ​ ​ ​ ​ ​ ​ ​ 42 Table of Contents EMPIRE PETROLEUM CORPORATION CONSOLIDATED FINANCIAL STATEMENTS TABLE OF CONTENTS Page No. Report of Independent Registered Public Accounting Firm – Grant Thornton LLP (PCAOB ID Number 248 ) 44 Consolidated Balance Sheets as of December 31, 2025 and 2024 46 Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 47 Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2025 and 2024 48 Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 49 Notes to Consolidated Financial Statements 50 ​ ​ ​ 43 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ ​ Board of Directors and Stockholders Empire Petroleum Corporation Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Empire Petroleum Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. The estimation of proved developed producing reserves of oil and natural gas properties used in the determination of impairment expense under the successful efforts method of accounting As described further in Note 2 to the financial statements, the Company accounts for its oil and natural gas properties using the successful efforts method of accounting, which requires management to make estimates of proved reserve volumes and future discounted net cash flows to record impairment expense. In addition, the estimation of proved reserves is impacted by management’s judgments and estimates regarding the financial performance of its wells to determine if its wells are expected, with reasonable certainty, to be economical under the appropriate pricing assumptions and expected production costs projections, which is then discounted at a rate commensurate with the risk of the proved developed producing reserves. We identified the estimation of proved reserves attributable to oil and natural gas properties, due to its impact on impairment expense, as a critical audit matter. The principal considerations for our determination that the estimation of proved developed producing reserves is a critical audit matter is that changes in certain inputs and assumptions, which include a high degree of subjectivity, necessary to estimate the volume and future discounted net cash flows of the Company’s reserves, could have a significant impact on the measurement of impairment expense. In turn, auditing those inputs and assumptions required subjective and complex auditor judgment. Our audit procedures related to the estimation of proved developed producing reserves included the following, among others: ● We evaluated the level of knowledge, skill, and ability of the Company’s petroleum engineering specialists, made inquiries of those specialists regarding the process followed and judgments made to estimate the Company’s reserve volumes. 44 Table of Contents ● Identified inputs and assumptions that were significant to the determination of proved developed producing reserve volumes and tested management’s process of determining the significant inputs and assumptions, as follows: • Compared the pricing used in the reserve report to relevant published pricing benchmarks along with recalculating the realized differentials experienced by the Company; • Vouched, on a sample basis, the working and net revenue interests used in the reserve report to underlying land and division order records; • Assessed forecasted production estimates by comparing forecasted production amounts in the current year reserve report to the actual historical production amounts in the current year, in total and for a sample of individual wells; • Applied analytical procedures on inputs to the reserve report by comparing to historical actual results; • Assessed the inflation factors used on future pricing and production costs to historical published inflation percentages; and • Assessed the appropriateness of the discount rate used to arrive at the net present value of future cash flows. ​ /s/ GRANT THORNTON LLP ​ We have served as the Company’s auditor since 2022. ​ Tulsa, Oklahoma March 13, 2026 ​ 45 Table of Contents EMPIRE PETROLEUM CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 ASSETS ​ ​ ​ ​ ​ ​ Current Assets: ​ ​ ​ ​ ​ ​ Cash ​ $ 1,189 ​ $ 2,251 Accounts Receivable ​ 5,122 ​ 8,155 Inventory ​ 1,262 ​ 1,305 Prepaids ​ 607 ​ 640 Total Current Assets ​ 8,180 ​ 12,351 ​ ​ ​ ​ ​ ​ ​ Property and Equipment: ​ ​ ​ ​ Oil and Natural Gas Properties, Successful Efforts ​ 148,238 ​ 140,675 Less: Accumulated Depletion, Amortization and Impairment ​ ( 93,425 ) ​ ( 31,974 ) Total Oil and Gas Properties, Net ​ 54,813 ​ 108,701 Other Property and Equipment, Net ​ 1,486 ​ 1,391 Total Property and Equipment, Net ​ 56,299 ​ 110,092 ​ ​ ​ ​ ​ ​ ​ Other Noncurrent Assets ​ 1,394 ​ 1,425 ​ ​ ​ ​ ​ ​ ​ Total Assets ​ $ 65,873 ​ $ 123,868 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ Accounts Payable ​ $ 10,799 ​ $ 10,452 Accrued Expenses ​ 12,616 ​ 10,348 Current Portion of Lease Liability ​ 286 ​ 400 Current Portion of Long-Term Debt ​ 641 ​ 70 Total Current Liabilities ​ 24,342 ​ 21,270 ​ ​ ​ ​ ​ ​ ​ Long-Term Debt ​ 14,415 ​ 11,266 Long-Term Note Payable - Related Party, net (Note 7) ​ ​ 1,023 ​ ​ — Long-Term Lease Liability ​ 12 ​ 144 Derivative Instruments (Note 7) ​ ​ 281 ​ ​ — Asset Retirement Obligations ​ 30,406 ​ 28,423 Total Liabilities ​ 70,479 ​ 61,103 ​ ​ ​ ​ ​ ​ ​ Commitments and Contingencies (Note 14) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ Equity: ​ ​ ​ ​ Series A Preferred Stock - $ 0.001 Par Value, 10,000,000 Shares Authorized, 6 and 6 Shares Issued and Outstanding, Respectively ​ — ​ — Common Stock - $ 0.001 Par Value 190,000,000 Shares Authorized, 34,855,815 and 33,667,132 Shares Issued and Outstanding, Respectively ​ 94 ​ 93 Additional Paid-in-Capital ​ 148,191 ​ 143,489 Accumulated Deficit ​ ( 152,891 ) ​ ( 80,817 ) ​ ​ ​ ​ ​ ​ ​ Total Stockholders’ Equity (Deficit) ​ ( 4,606 ) ​ 62,765 ​ ​ ​ ​ ​ ​ ​ Total Liabilities and Stockholders’ Equity ​ $ 65,873 ​ $ 123,868 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ ​ 46 Table of Contents EMPIRE PETROLEUM CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 Revenue: ​ ​ ​ ​ ​ ​ Oil Sales ​ $ 31,648 ​ $ 41,515 Gas Sales ​ 898 ​ 344 Natural Gas Liquids Sales ​ 1,616 ​ 2,133 Total Product Revenues ​ 34,162 ​ 43,992 Other ​ 41 ​ 47 Gain (Loss) on Derivatives ​ — ​ ( 389 ) Total Revenue ​ 34,203 ​ 43,650 ​ ​ ​ ​ ​ ​ ​ Costs and Expenses: ​ ​ ​ ​ Lease Operating Expense ​ 25,223 ​ 27,545 Production and Ad Valorem Taxes ​ 2,854 ​ 3,770 Depreciation, Depletion & Amortization ​ 10,595 ​ 9,256 Impairment ​ ​ 51,289 ​ ​ — Accretion of Asset Retirement Obligation ​ 2,139 ​ 2,007 General and Administrative: ​ ​ ​ ​ General and Administrative ​ 11,995 ​ 12,582 Stock-Based Compensation ​ 1,423 ​ 2,156 Total General and Administrative ​ 13,418 ​ 14,738 ​ ​ ​ ​ ​ ​ ​ Total Cost and Expenses ​ 105,518 ​ 57,316 ​ ​ ​ ​ ​ ​ ​ Operating Loss ​ ( 71,315 ) ​ ( 13,666 ) ​ ​ ​ ​ ​ ​ ​ Other Income and (Expense): ​ ​ ​ ​ Interest Expense ​ ( 1,547 ) ​ ( 1,515 ) Other Income (Expense) ​ 788 ​ ( 1,017 ) ​ ​ ​ ​ ​ ​ ​ Loss Before Taxes ​ ( 72,074 ) ​ ( 16,198 ) ​ ​ ​ ​ ​ ​ ​ Income Tax Benefit (Provision) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ Net Loss ​ $ ( 72,074 ) ​ $ ( 16,198 ) ​ ​ ​ ​ ​ ​ ​ Net Loss per Common Share: ​ ​ ​ ​ Basic ​ $ ( 2.12 ) ​ $ ( 0.54 ) Diluted ​ $ ( 2.12 ) ​ $ ( 0.54 ) ​ ​ ​ ​ ​ ​ ​ Weighted-Average Number of Common Shares Outstanding: ​ ​ ​ ​ Basic ​ 34,056,054 ​ 30,064,856 Diluted ​ 34,056,054 ​ 30,064,856 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 47 Table of Contents EMPIRE PETROLEUM CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Preferred Stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Par ​ Additional ​ Accumulated ​ ​ ​ ​ ​ Shares ​ ​ ​ Par Value ​ ​ ​ Shares ​ ​ ​ Value ​ ​ ​ Paid-in-Capital ​ ​ ​ Deficit ​ ​ ​ Total ​ Balances as of December 31, 2023 25,503,530 ​ $ 85 6 ​ $ — ​ $ 99,490 ​ $ ( 64,619 ) ​ $ 34,956 ​ Net Loss — ​ — — ​ — ​ — ​ ( 16,198 ) ​ ( 16,198 ) ​ Rights Offerings (Note 9) 6,112,430 ​ 6 — ​ — ​ 30,478 ​ — ​ 30,484 ​ Partial Conversion of Option to Purchase (Note 3) 616,800 ​ 1 — ​ — ​ 3,232 ​ — ​ 3,233 ​ Warrants Exercised 128,800 ​ — — ​ — ​ 950 ​ — ​ 950 ​ Conversion of Related-Party Note (Note 7) 1,005,427 ​ 1 — ​ — ​ 7,247 ​ — ​ 7,248 ​ Stock-Based Compensation 300,145 ​ — — ​ — ​ 2,092 ​ — ​ 2,092 ​ Balances as of December 31, 2024 33,667,132 ​ $ 93 6 ​ $ — ​ $ 143,489 ​ $ ( 80,817 ) ​ $ 62,765 ​ Net Loss — ​ — — ​ — ​ — ​ ( 72,074 ) ​ ( 72,074 ) ​ Rights Offerings (Note 9) 469,351 ​ — — ​ — ​ 2,358 ​ — ​ 2,358 ​ Debt Discount Related to Warrants (Note 7) — ​ — — ​ — ​ 144 ​ — ​ 144 ​ Options Exercised 589,100 ​ ​ 1 ​ — ​ ​ — ​ ​ 777 ​ ​ — ​ ​ 778 ​ Warrants Exercised 14 ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Stock-Based Compensation 130,218 ​ — — ​ — ​ 1,423 ​ — ​ 1,423 ​ Balances as of December 31, 2025 34,855,815 ​ $ 94 6 ​ $ — ​ $ 148,191 ​ $ ( 152,891 ) ​ $ ( 4,606 ) ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 48 Table of Contents EMPIRE PETROLEUM CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 Cash Flows From Operating Activities: ​ ​ ​ ​ ​ ​ Net Loss ​ $ ( 72,074 ) ​ $ ( 16,198 ) ​ ​ ​ ​ ​ Adjustments to Reconcile Net Loss to Net Cash (Used In) Provided By Operating Activities: ​ ​ ​ ​ Stock-Based Compensation ​ 1,423 2,156 Amortization of Right-of-Use Assets ​ 469 ​ 540 Depreciation, Depletion & Amortization ​ 10,595 ​ 9,256 Accretion of Asset Retirement Obligations ​ 2,139 ​ 2,007 Impairment of Oil and Natural Gas Properties ​ ​ 51,289 ​ ​ — Loss on Commodity Derivatives ​ — ​ 389 Net Settlements on Derivative Instruments ​ — ​ 18 Loss (Gain) on Financial Derivatives (Note 7) ​ ( 581 ) ​ 998 Amortization of Debt Discount on Convertible Notes ​ 29 ​ 500 Amortization of Debt Issuance Costs ​ ​ 113 ​ ​ — Loss on Extinguishment of Debt ​ ​ — ​ ​ 10 Gain on Sale of Oil and Natural Gas Properties ​ ​ ( 168 ) ​ ​ — Gain on Sale of Other Fixed Assets ​ ( 30 ) ​ — Change in Operating Assets and Liabilities: ​ ​ ​ ​ Accounts Receivable ​ 369 ​ ( 357 ) Inventory, Oil in Tanks ​ 43 ​ 129 Prepaids, Current ​ 574 ​ 608 Accounts Payable ​ 541 ​ 5,020 Accrued Expenses ​ 1,463 ​ 2,144 Other Long-Term Assets and Liabilities ​ ( 140 ) ​ ( 1,063 ) Net Cash (Used In) Provided By Operating Activities ​ ( 3,946 ) ​ 6,157 ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities: ​ ​ ​ ​ Disposal of Oil and Natural Gas Properties ​ 575 ​ — Capital Expenditures - Oil and Natural Gas Properties (1) ​ ( 4,754 ) ​ ( 53,219 ) Disposal of Other Fixed Assets ​ ​ 51 ​ ​ — Purchase of Other Fixed Assets ​ ( 54 ) ​ ( 152 ) Cash Paid for Right-of-Use Assets ​ ( 431 ) ​ ( 499 ) Net Cash Used In Investing Activities ​ ( 4,613 ) ​ ( 53,870 ) ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: ​ ​ ​ ​ Borrowings on Credit Facility ​ 3,000 ​ 6,650 Proceeds from Promissory Notes - Related Party (Note 7) ​ 4,000 ​ 5,000 Payments on Promissory Note - Related Party (Note 7) ​ ( 2,000 ) ​ — Principal Payments of Debt ​ ( 639 ) ​ ( 592 ) Proceeds from Rights Offering, net of transaction costs (Note 9) ​ 2,358 ​ 30,484 Proceeds from Stock Issuance and Warrant Exercises ​ ​ 778 ​ ​ 629 Net Cash Provided By Financing Activities ​ 7,497 ​ 42,171 ​ ​ ​ ​ ​ ​ ​ Net Change in Cash ​ ( 1,062 ) ​ ( 5,542 ) ​ ​ ​ ​ ​ ​ ​ Cash - Beginning of Period ​ 2,251 ​ 7,793 ​ ​ ​ ​ ​ ​ ​ Cash - End of Period ​ $ 1,189 ​ $ 2,251 ​ ​ ​ ​ ​ ​ ​ Supplemental Cash Flow Information: ​ ​ ​ ​ Cash Paid for Interest ​ $ 1,320 ​ $ 894 (1) Incurred capital expenditures were $ 4.6 million and $ 42.2 million for the respective periods. The difference between incurred and cash capital expenditures is due to changes in related accounts payable. The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 49 Table of Contents EMPIRE PETROLEUM CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) Note 1 - Organization and Basis of Presentation Empire Petroleum Corporation (the “Company”, collectively with its subsidiaries) is an independent energy company operator engaged in optimizing developed production by employing field management methods to maximize reserve recovery while minimizing costs. Empire operates primarily from the following wholly-owned subsidiaries in its areas of operations: ● Empire New Mexico LLC (“Empire New Mexico”) ● Empire North Dakota LLC (“Empire North Dakota”) ● Empire Texas LLC (“Empire Texas”) ● Empire Louisiana LLC (“Empire Louisiana”) Empire was incorporated in the State of Delaware in 1985. The consolidated financial statements of Empire Petroleum Corporation and subsidiaries include the accounts of the Company and its wholly-owned subsidiaries. The terms “Company,” “we,” “us,” “our,” and similar terms refer to Empire Petroleum Corporation and its subsidiaries. Liquidity and Going Concern The Company has a revolving line of credit agreement (Note 7) with Equity Bank which requires the Company to maintain compliance with certain financial covenants computed on a quarterly and annual basis. As of December 31, 2025, the Company was in compliance with all required covenants and projected to be in compliance with all debt covenants over the next 12 months. However, the Company carried a negative working capital of approximately $ 16.2 million as of December 31, 2025. Working capital decreased by approximately $ 7.2 million from prior year primarily due to the overall pricing environment reducing operating cash flows, capital spend on various projects within Texas and North Dakota resulting in increased payables as operating cash flows decline, and lower overall production from redrilling and operational activity resulting in certain wells being down for a period of time during the period. Additionally, the Company’s debt obligations continue to increase with various related parties as discussed below. To meet its obligations, the Company increased its revolver commitment to $ 20.0 million in November 2024 which had approximately $ 2.5 million remaining unused commitment as of December 31, 2025; however, the revolver commitment is reduced monthly by $ 0.25 million commencing on December 31, 2024 (Note 7), limiting future access to capital. Further, the Company entered into a promissory note and a convertible note with Phil Mulacek in June 2025 and September 2025, respectively. Each respective note provided up to $ 4.0 million of available borrowing capacity. As of December 31, 2025 , the promissory note had fully expired and the convertible note had $ 2.0 million outstanding. The Company may borrow up to an additional $ 2.0 million of the convertible note’s available principal at the discretion of Mr. Mulacek, per the terms of the agreement (Note 7). The Company also issued warrants to Mr. Mulacek in connection with the convertible note (Note 7). Further, a subscription rights offering was completed in August 2025, which raised approximately $ 2.5 million of gross proceeds (Note 9). A portion of these proceeds were used to settle $ 2.0 million of the outstanding balance of the promissory note with Mr. Mulacek, per the terms of the note, during the third quarter. In February 2026, the Company entered into a convertible note with Mr. Mulacek for $ 3.0 million to be used towards full settlement of the convertible note in September 2025 and general working capital needs. In March 2026, this note was fully converted to common shares (Note 7). An additional subscription rights offering was also announced and expected to raise gross proceeds of up to $ 10.0 million (Note 9). While these transactions provide additional funding towards the Company’s obligations, the Company expects to have negative working capital for the next 12 months and future expected operating cash flows do not sufficiently meet the Company’s obligations. Given the negative working capital and insufficient expected operating cash flow there is substantial doubt about the Company’s ability to continue as a going concern. Given the negative working capital and insufficient expected operating cash flow there is substantial doubt about the Company’s ability to continue as a going concern. Empire has committed financial support from Phil Mulacek who owns approximately 24.5 % of our common stock outstanding as of December 31, 2025, and Energy Evolution Master Fund, Ltd. (“Energy Evolution”), our largest stockholder, who owns approximately 30.8 % of our common stock outstanding as of December 31, 2025. Both are related parties of the Company (Note 13). Mr. Mulacek and Energy Evolution are willing and able to provide these additional funds for Empire to continue to meet its obligations over the next 12 months. These additional funds may be raised through related party warrants or a related party note payable that may or may not have conversion rights into shares of common stock of Empire. Management has considered these plans in evaluating FASB ASC 205-40, Presentation of Financial Statements - Going Concern . Management believes the above actions are sufficient to allow Empire to meet its obligations as they become due within one year after the date the financial statements are issued. Management believes that its plans, and support from the existing related-party stockholders discussed above, is probable and has alleviated the substantial doubt regarding Empire’s ability to continue as a going concern. 50 Table of Contents Note 2 – Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts and balances of the Company and have been prepared in accordance with US GAAP. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Estimated quantities of crude oil, natural gas and NGLs reserves are the most significant of the Company’s estimates. All reserve data used in the preparation of the consolidated financial statements, including depletion estimates, and information included in Note 18 - Supplemental Information of Oil and Natural Gas Producing Activities (Unaudited), are based on estimates. Reservoir engineering is a subjective process of estimating underground accumulations of crude oil, natural gas and NGLs. There are numerous uncertainties inherent in estimating quantities of proved crude oil, natural gas and NGLs reserves. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. As a result, reserve estimates may be different from the quantities of crude oil, natural gas and NGLs that are ultimately recovered. Other items subject to estimates and assumptions include, but are not limited to, the carrying amounts of property, plant and equipment, asset retirement obligations, valuation allowances for deferred income tax assets, and valuation of derivative instruments. Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic and commodity price environment. The volatility of commodity prices results in increased uncertainty inherent in such estimates and assumptions. Although management believes these estimates are reasonable, actual results may differ from estimates and assumptions of future events and these revisions could be material. Future production may vary materially from estimated oil and natural gas proved reserves. Actual future prices may vary significantly from price assumptions used for determining proved reserves and for financial reporting. Accounts Receivable Accounts receivable include estimated amounts due from crude oil, natural gas, and NGLs purchasers and from non-operating working interest owners. Accrued revenue related to product sales from purchasers and operators are due under normal trade terms, generally requiring payment within 60 days of production. For receivables from joint interest owners, the Company generally has the ability to withhold future revenue disbursements to recover any non-payment of joint interest billings. Receivables are stated at amounts due, net of an allowance for credit losses, if necessary and are considered past due if full payment is not received by the contractual due date. The Company estimates uncollectible amounts based on the length of time that the accounts receivable has been outstanding, historical collection experience and current and future economic and market conditions, if failure to collect is expected to occur. Past due accounts are generally written off against the allowance for credit losses account only after all collection attempts have been exhausted. The Company did not have an allowance for credit losses at either December 31, 2025 or 2024. The Company’s accounts receivable are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ 2025 ​ ​ ​ 2024 Oil, Gas and NGLs receivables $ 1,684 ​ $ 2,628 ​ Joint interest billings 2,648 ​ 5,072 ​ Joint interest billings - related party 762 ​ 394 ​ Other 28 ​ 61 ​ Total Accounts receivable $ 5,122 ​ $ 8,155 ​ ​ ​ ​ ​ 51 Table of Contents Concentrations of Credit Risk Empire’s accounts receivable are primarily receivables from oil and natural gas purchasers and joint interest owners. The oil and natural gas purchasers consist primarily of independent marketers, major oil and natural gas companies and gas pipeline companies. Historically, the Company has not experienced any significant losses from uncollectible accounts from its oil and natural gas purchasers. The Company operates a substantial portion of its oil and natural gas properties. As the operator of a property we make full payments for costs associated with the property and seek reimbursement from the other working interest owners in the property for their share of those costs. Joint operating agreements govern the operations of an oil or natural gas well and, in most instances, provide for the offsetting of amounts payable or receivable between the Company and its joint interest owners. Our joint interest partners consist primarily of independent oil and natural gas producers. If the oil and natural gas exploration and production industry in general were adversely affected, the ability of the joint interest partners to reimburse Empire could be adversely affected. Convertible Debt and Derivative Instruments In connection with Empire’s issuance of a promissory note in the first quarter of 2024 and third quarter of 2025, Empire bifurcated the respective embedded conversion options and recorded the embedded conversion options as long-term derivative liabilities in Empire’s consolidated balance sheets in accordance with FASB ASC 815, Derivatives and Hedging . The convertible debt and the derivative liabilities associated with the respective promissory notes were separately presented as long-term note payable – related party and long-term derivative instruments on the consolidated financial statements for the applicable periods. The convertible debt was carried at amortized cost. The derivative liabilities were remeasured at each reporting period using a binomial lattice model with changes in fair value recorded in other income (expense) of the applicable period’s consolidated statements of operations. The conversion option related to the 2024 promissory note was exercised in the second quarter of 2024. See Note 7 for further details. The Company issued warrants with the promissory note in the third quarter of 2025 and determined they shall be classified as equity in accordance with FASB ASC 815, Derivatives and Hedging . The warrants were recorded as a discount to the long-term note payable – related party and presented as net on the consolidated balance sheets. The value of the discount was determined by using a Black-Scholes model and recorded at its estimated relative fair value on the date the warrants were issued. It will be amortized over the life of the corresponding promissory note within interest expense in the consolidated statements of operations. See Note 7 for further details. From time to time the Company enters into hedge agreements to manage its exposure to oil and natural gas price fluctuations. The fair value of derivative contracts is recognized as an asset or liability on the Company’s consolidated balance sheets. Realized gain or loss is recognized as a component of revenue when the derivative contracts mature. For contracts which have not matured, an unrealized gain or loss is recorded based on the change in the fair value of the outstanding contracts. Inventory Inventory primarily consists of oil in tanks which has not been delivered and is valued at the lower of cost or net realizable value. Leases The Company’s right-of-use operating lease assets and lease liabilities are primarily for leased vehicles for field operations and office spaces. Some of these lease agreements include variable payments for non-lease components such as common area maintenance. Oil and Natural Gas and Other Properties The Company uses the successful efforts method of accounting for its oil and gas activities. Costs incurred are deferred until exploration and completion results are evaluated. At such time, costs of activities with economically recoverable reserves are capitalized as proven properties, and costs of unsuccessful or uneconomical activities are expensed. Capitalized drilling costs are reviewed periodically for impairment. Costs related to impaired prospects or unsuccessful exploratory drilling are charged to expense. Management’s assessment of the results of exploration activities, commodity price outlooks, planned future sales or expiration of all or a portion of such leaseholds impact the amount and timing of impairment provisions. An impairment expense could result if oil and gas prices decline in the future as it may not be economical to develop some of these unproved properties. Lease options are capitalized as unproved property acquisition costs and are reviewed for impairment if indicators exist that the carrying value of the lease option may not be recoverable. If the lease options become impaired, expire or are abandoned, the options will be expensed. If proved reserves are discovered after the options are exercised, these costs will be reclassified as proved property. ​ 52 Table of Contents Depletion and amortization of producing properties is computed on the units-of-production method on a property-by-property basis. The units-of-production method is based primarily on estimates of proved reserve quantities. Due to uncertainties inherent in this estimation process, it is at least reasonably possible that reserve quantities will be revised in the near term. Changes in estimated reserve quantities are applied to depletion and amortization computations prospectively. Other property and equipment is depreciated on the straight-line method. Segment Reporting The Company operates as one operating segment and one reportable segment which is engaged in the exploration, development, and production of oil, gas, and NGLs in New Mexico, North Dakota, Montana, Texas, and Louisiana, from which all of its revenues are derived and expenses incurred. All financial results are reviewed by the Chief Executive Officer (“CEO”), the Company’s Chief Operating Decision Maker (“CODM”), on a consolidated basis to evaluate performance of the Company. The single segment constitutes all of the consolidated entity and the accompanying consolidated financial statements and the notes to the accompanying consolidated financial statements are representative of such amounts. Refer to Note 17 for further discussion. Debt Issuance Costs Debt issuance fees, which are recorded at cost, net of amortization, are amortized over the life of the respective debt agreements utilizing the straight-line method. We had approximately $ 0.1 million and $ 0.2 million of unamortized debt issuance costs as of year-end December 31, 2025 and 2024, respectively. Unamortized debt issuance costs related to the Company’s credit facility are recorded in other noncurrent assets on the Company’s consolidated balance sheets. Asset Retirement Obligations The Company records the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related oil and natural gas property asset. Subsequently, the asset retirement cost included in the carrying amount of the related asset is allocated to expense through depletion of the asset. Changes in the liability due to passage of time are recognized as an increase in the carrying amount of the liability through accretion expense. Based on certain factors, including commodity prices and costs, the Company may revise its previous estimates of the liability, which would also increase or decrease the related oil and natural gas property asset. Revenue Recognition The Company’s revenues are comprised solely of revenues from customers and include the sale of oil, natural gas and NGLs. The Company believes that the disaggregation of revenue into these three major product types, as presented in the consolidated statements of operations, appropriately depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors based on its single geographic region, the continental United States. Revenues are recognized at a point in time when production is sold to a purchaser at a determinable price, delivery has occurred, control has transferred and it is probable substantially all of the consideration will be collected. The Company fulfills its performance obligations under its customer contracts through delivery of oil, natural gas and NGLs and revenues are recorded on a monthly basis. The Company receives payment from one to three months after delivery. Generally, each unit of product represents a separate performance obligation. The prices received for oil, natural gas and NGLs sales under the Company’s contracts are generally derived from stated market prices which are then adjusted to reflect deductions including transportation, fractionation and processing. As a result, revenues from the sale of oil, natural gas and NGLs will decrease if market prices decline. The sales of oil, natural gas and NGLs, as presented on the consolidated statements of operations, represent the Company’s share of revenues net of royalties and excluding revenue interests owned by others. When selling oil, natural gas and NGLs on behalf of royalty or working interest owners, the Company is acting as an agent and thus reports the revenue on a net basis. To the extent actual volumes and prices of oil and natural gas sales are unavailable for a given reporting period because of timing or information not received from third parties, the expected sales volumes and prices for those properties are estimated and recorded. Variances between the Company’s estimated revenue and actual payment are recorded in the month the payment is received. Historically, these differences have been insignificant. At the end of each month when the performance obligation is satisfied, the variable consideration can be reasonably estimated and amounts due from customers are recorded in accounts receivable on the consolidated balance sheets. Taxes assessed by governmental authorities on oil, natural gas and NGLs sales are presented separately from such revenues in the consolidated statements of operations. ​ 53 Table of Contents Oil Sales Oil production is transported from the wellhead to tank batteries or delivery points through flow-lines or gathering systems. Purchasers of the oil take delivery at the tank batteries and transport the oil by truck or at a pipeline delivery point and the Company collects a market price, net of pricing differentials. Revenue is recognized when control transfers to the purchaser at the net price received by the Company. Natural Gas and NGLs Sales Under the Company’s natural gas sales arrangements, the purchaser takes control of wet gas at a delivery point near the wellhead or at the inlet of the purchaser’s processing facility. The purchaser gathers and processes the wet gas and remits proceeds to the Company for the resulting natural gas and NGLs sales. Based on the nature of these arrangements, the purchaser is the Company’s processor, thus, the Company recognizes natural gas and NGLs sales based on the net amount of proceeds received from the purchaser. Transaction Price Allocated to Remaining Performance Obligations Substantially all of the Company’s product sales are short-term in nature with a contract term of one year or less. For these contracts, the Company has utilized the practical expedient in ASU 2024, Revenue from Contracts with Customers (“Topic 606”) which exempts the Company from the requirements to disclose the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For the Company’s product sales that have a contract term greater than one year, the Company has utilized the practical expedient in Topic 606 which states the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these contracts, each unit of product generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required. Prior-Period Performance Obligations The Company records revenue in the month that product is delivered to the purchaser. Settlement statements for certain natural gas and NGLs sales, however, may not be received for 30 to 90 days after the date the product is delivered, and as a result the Company is required to estimate the amount of product delivered to the purchaser and the price that will be received for the sale of the product. In these situations, the Company records the differences between its estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. Any identified differences between the Company’s revenue estimates and actual revenue received have historically been insignificant. For the years ended December 31, 2025 and 2024, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. Stock-Based Compensation The Company recognizes stock-based compensation expense associated with equity-based incentive awards consisting of stock options and restricted stock units. The Company accounts for forfeitures of equity-based incentive awards as they occur. Stock-based compensation expense related to equity-based awards is generally recognized as vesting occurs. See Note 10 for further discussion. Income Taxes The Company accounts for income taxes in accordance with the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established if management determines it is more likely than not that some portion of a deferred tax asset will not be realized. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax benefit (expense) on the consolidated statements of operations. Per Share Amounts The Company calculates and discloses basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). The computation of basic earnings per share is computed by dividing earnings available to common stockholders by the weighted-average number of outstanding common shares during the period. 54 Table of Contents Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. The computation of Diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on losses. As a result, if there is a loss from continuing operations, Diluted EPS is computed in the same manner as Basic EPS. Fair Value Measurements The FASB ASC 820, Fair Value Measurement (“Topic 820”) standards define fair value, establish a consistent framework for measuring fair value and establish a fair value hierarchy based on the observability of inputs used to measure fair value. The three-level fair value hierarchy for disclosure of fair value measurements defined by Topic 820 is as follows: Level 1 – Unadjusted, quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 – Inputs, other than quoted prices within Level 1, that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 – Prices or valuations that require unobservable inputs that are both significant to the fair value measurement and unobservable. Valuation under Level 3 generally involves a significant degree of judgment from management. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instrument’s complexity. The Company reflects transfers between the three levels at the beginning of the reporting period in which the availability of observable inputs no longer justifies classification in the original level. There were no transfers between fair value hierarchy levels for the years ended December 31, 2025 and 2024. See Note 16. Related Party Transactions Transactions between related parties are considered to be related party transactions even though they may not be given accounting recognition. FASB ASC 850, Related Party Disclosures (“Topic 850”) requires that transactions with related parties that would have influence in decision making shall be disclosed so that users of the financial statements can evaluate their significance. Related party transactions typically occur within the context of the following relationships: affiliates of the entity; entities for which investments in their equity securities is typically accounted for under the equity method by the investing entity; trusts for the benefit of employees; principal owners of the entity and members of their immediate families; management of the entity and members of their immediate families; and other parties that can significantly influence the management or operating policies of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Recently Issued Accounting Pronouncements The FASB periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting. The Company has reviewed the recently issued pronouncements and concluded the following standards are applicable: In December 2023, FASB, issued ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures (“Topic 740”). The guidance in Topic 740 improves the transparency of income tax disclosures by greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The Company adopted the amendments in 2025 and applied the guidance on a retrospective basis. Adoption of the update resulted in additional disclosures in Note 11 – Income Taxes but did not impact the Company’s financial position, results of operations or liquidity. In November 2024, FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (“Subtopic 220-40”), which expands disclosures around a public entity’s costs and expenses of specific items (i.e. employee compensation and depreciation, depletion and amortization), requires the inclusion of amounts that are required to be disclosed under US GAAP in the same disclosure as other disaggregation requirements, requires qualitative descriptions of amounts remaining in expense captions that are not separately disaggregated quantitatively, and requires disclosure of total selling expenses, and in annual periods, the definition of selling expenses. The amendment does not change or remove existing disclosure requirements. The amendment is effective for fiscal years beginning after December 15, 2026, and interim periods with fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendment can be adopted prospectively or retrospectively to any or all periods presented in the financial statements. Empire is currently assessing the impact of adopting this standard which is expected to only affect financial statement disclosures. 55 Table of Contents In November 2024, FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Option: Induced Conversions of Convertible Debt Instruments , to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20. ASU 2024-04 is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of the annual reporting period for all entities that have adopted ASU 2020-06 and may be adopted either on a prospective or retrospective basis. The Company early adopted this ASU on January 1, 2025, on a prospective basis and determined it did not have a material impact on the period’s consolidated financial statements. In December 2025, FASB issued ASU 2025-12, Codification Improvements . ASU 2025-12 is the latest in a series of updates that the FASB made to the existing GAAP literature to amend or supplement that literature related to minor change and corrections that have identified and made amendments to thirty-three ASC topics. This ASU is effective for annual reporting periods that begin after December 31, 2026, and interim periods within those annual reporting periods. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosure. Note 3 – Property Empire follows the successful efforts method of accounting for its oil and natural gas activities. Under this method, costs to acquire oil and natural gas properties and costs incurred to drill and equip development and exploratory wells are deferred until exploration and completion results are evaluated. Exploration drilling costs are expensed if recoverable reserves are not found. Upon sale or retirement of oil and natural gas properties, the costs and related accumulated depletion and amortization are eliminated from the accounts and the resulting gain or loss is recognized. Costs incurred to maintain wells and related equipment and lease and well operating costs are charged to expense as incurred. Depletion is calculated on a unit-of-production basis at the field level based on total proved developed reserves. Proved oil and natural gas properties are reviewed for impairment at least annually, or as indicators of impairment arise. We performed an analysis of our oil and gas properties as of December 31, 2025, and determined facts and circumstances exist that indicate impairment on certain proved and unproved properties. We determined due to the general decline in market pricing a portion of our proved oil and gas properties have been deemed to be impaired because the assets are not expected to recover their entire carrying value through future cash flows. Additionally, our analysis identified certain proved and unproved properties where further development has ceased due to alternative opportunities and is not expected to continue in the foreseeable future and therefore determined to be fully impaired. The Company has recorded a total impairment loss of $ 51.3 million for the year ended December 31, 2025 as a result of our annual analysis. There were no indicators of impairment during the year ended December 31, 2024. The aggregate capitalized costs of oil and natural gas properties are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 Proved properties ​ $ 141,079 ​ $ 134,239 Unproved properties ​ 6,533 ​ 3,858 Work in process ​ 626 ​ 2,578 Gross capitalized costs ​ 148,238 ​ 140,675 Accumulated depletion, amortization and impairment ​ ( 93,425 ) ​ ( 31,974 ) Total Oil and gas properties, net ​ $ 54,813 ​ $ 108,701 ​ Depletion amortization expense related to oil and gas properties for the years ended December 31, 2025 and 2024, was approximately $ 10.2 million and $ 9.0 million, respectively. Empire completed 13 wells in North Dakota related to our Starbuck Drilling Program during the year ended December 31, 2024 of which the final well began production during 2025. On April 9, 2024, Empire acquired 60 % of certain New Mexico interests from Energy Evolution. As consideration, Empire issued Energy Evolution 600,000 shares of common stock of Empire based on an agreed upon price of $ 5.00 per share for an aggregate agreed upon value of $ 3.0 million. On August 8, 2024, Empire extended its right to acquire the remaining interest for an exercise price of $ 2.0 million (the “Purchase Option”) by one year with the issuance of 16,800 shares of common stock (the “Option Shares”) to Energy Evolution. On May 1, 2025, the Company amended its ability to further extend the Purchase Option to allow for payment of such extension to be made in cash in lieu of the Option Shares, due and payable on or before September 30, 2025. The Company made a cash payment to Energy Evolution on September 30, 2025 to extend the Purchase Option for an additional year . 56 Table of Contents On December 10, 2025, the Company entered into a letter agreement with Energy Evolution to acquire the remaining 40 % of certain New Mexico interests and closed on the transaction on January 5, 2026. As consideration, Empire issued 562,500 shares of common stock based on an agreed upon price of $ 3.20 per share for an aggregate agreed upon value of $ 1.8 million. In January 2026, Empire paid approximately $ 0.1 million for certain interests in undeveloped properties in North Dakota. The transaction is subject to customary regulatory procedures and will not be finalized until all proceedings are completed. Net proceeds for the sale of certain non-core oil and natural gas properties totaled approximately $ 0.6 million during the year ended December 31, 2025 resulting in net gains of approximately $ 0.2 million which are reflected within other income (expense) on the consolidated statements of operations. Other property and equipment consists of operating lease assets, vehicles, office furniture, and equipment with lives ranging from three to five years . The capitalized costs of other property and equipment are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 Other property and equipment, at cost ​ $ 4,163 ​ $ 3,304 Less: accumulated depreciation ​ ( 2,677 ) ​ ( 1,913 ) Total Other property and equipment, net ​ $ 1,486 ​ $ 1,391 ​ Depreciation expense related to other property and equipment for the years ended December 31, 2025 and 2024, was approximately $ 0.4 million and $ 0.3 million, respectively. Note 4 - Asset Retirement Obligations The Company’s asset retirement obligations represent the estimated present value of the estimated cash flows the Company will incur to plug, abandon and remediate its producing properties at the end of their productive lives, in accordance with applicable state laws. Market risk premiums associated with asset retirement obligations are estimated to represent a component of the Company’s credit-adjusted risk-free rate that is utilized in the calculations of asset retirement obligations. The Company’s asset retirement obligation activities are summarized in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 Asset retirement obligations, beginning of period ​ $ 30,188 ​ $ 28,168 Liabilities incurred from drilling activity and assumed in acquisitions ​ 30 ​ 877 Revisions ​ — ​ — Liabilities settled from plugging activity and disposals ​ ( 541 ) ​ ( 864 ) Accretion expense ​ 2,139 ​ 2,007 Asset retirement obligations, end of period ​ $ 31,816 ​ $ 30,188 Less: current portion included in Accrued expenses ​ 1,410 ​ 1,765 Asset retirement obligations, long-term ​ $ 30,406 ​ $ 28,423 ​ The liabilities incurred from drilling activity in 2025 and 2024 primarily relate to the completion of new wells as part of Empire’s North Dakota Starbuck Drilling Program. The liabilities assumed in acquisitions in 2024 relate to additional working interest acquired in New Mexico. (Note 3). The liabilities settled from disposals in 2025 relate to the divestiture of certain non-core oil and natural gas properties further described in Note 3. There were no liabilities settled from disposals in 2024. Note 5 – Commodity Derivative Financial Instruments The Company has used derivative financial instruments to manage its exposure to commodity price fluctuations in the past. Commodity derivative instruments have been used to reduce the effect of volatility of price changes on the oil and natural gas the Company produces and sells. The Company does not enter into derivative financial instruments for speculative or trading purposes. The Company’s derivative financial instrument activity has consisted of swaps and put options. The Company does not designate its derivative instruments to qualify for hedge accounting. Accordingly, the Company reflects changes in the fair value of its derivative instruments in its consolidated statements of operations as they occur. These contracts are recognized and recorded at fair value as an asset or liability on the Company’s consolidated balance sheets. Cash receipts or payments upon settlement of swaps and put options are reflected in the operating activities section of its consolidated statements of cash flows. 57 Table of Contents The following table summarizes the net realized and unrealized amounts reported in earnings related to the oil derivative instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 Gain on derivatives, realized ​ $ — ​ $ 18 Loss on derivatives, unrealized ​ — ​ ( 407 ) Loss on derivatives, net ​ $ — ​ $ ( 389 ) ​ The following table represents the Company’s net cash receipts from derivatives: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 Cash settlements received on oil derivatives, net ​ $ — ​ $ 18 ​ The Company did not have any open commodity derivative positions as of December 31, 2025. We entered into certain oil commodity derivative positions subsequent to December 31, 2025 through March 13, 2026 for approximately 90 % of our estimated oil production for the remaining three quarters of 2026 at a blended price of $ 72.26 . Note 6 – Accrued Expenses The following table represents the Company’s accrued expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 Accrued and suspended third-party revenue ​ $ 8,202 ​ $ 5,987 Accrued salaries and payroll taxes ​ 854 ​ 1,091 Accrued production taxes ​ 888 ​ 837 Asset retirement obligations - current ​ 1,410 ​ 1,765 Accrued legal costs ​ ​ 805 ​ ​ - Other ​ 457 ​ 668 Total Accrued expenses ​ $ 12,616 ​ $ 10,348 ​ ​ Note 7 – Debt Including Debt with Related Parties The following table represents Empire’s outstanding debt as of the dates presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 Equity Bank Credit Facility ​ $ 14,146 ​ $ 11,089 Note Payable to insurance provider, bears 8.25 % interest, matures January 2026, monthly payments of principal and interest of $ 58,103 ​ 40 ​ — Equipment and vehicle notes, 0.00 % to 9.59 % interest rates, due in 2025 to 2030 with monthly payments ranging from $ 900 to $ 1,400 per month (1) ​ 870 ​ 247 Total Debt ​ 15,056 ​ 11,336 Less: Current Maturities on Credit Facility ​ ​ ( 396 ) ​ ​ — Less: Current Maturities on Note Payable, Equipment and Vehicle Notes ​ ( 245 ) ​ ( 70 ) Long-Term Debt ​ $ 14,415 ​ $ 11,266 (1) Weighted-average interest rate of 9.41 % and 8.32 % as of December 31, 2025 and 2024, respectively. ​ The following table represents Empire’s outstanding related-party debt as of the dates presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 Promissory Note - Related Party ​ $ 1,138 ​ $ — Less: Debt discount on warrants issued with Promissory Note - Related Party ​ ​ ( 115 ) ​ ​ — Long-Term Note Payable - Related Party, net ​ $ 1,023 ​ $ — ​ ​ ​ 58 Table of Contents On December 29, 2023, Empire North Dakota and Empire ND Acquisition LLC (“Original Borrowers”), entered into a revolver loan agreement with Equity Bank (the “Credit Facility”). Pursuant to the Credit Facility (a) the initial revolver commitment amount is $ 10.0 million; (b) the maximum revolver commitment amount is $ 15.0 million; (c) commencing on January 31, 2024, and occurring on the last day of each calendar month thereafter, the revolver commitment amount is reduced by $ 150,000 ; (d) commencing on March 31, 2024, there are scheduled semiannual collateral borrowing base redeterminations each year on March 31 and September 30; (e) the final maturity date is December 29, 2026; (f) outstanding borrowings bear interest at a rate equal to the prime rate of interest plus 1.50 %, and in no event lower than 8.50 %; (g) a quarterly commitment fee is based on the unused portion of the commitments; and (h) Original Borrowers have the right to prepay loans under the Credit Facility at any time without a prepayment penalty. The Credit Facility is guaranteed by the Company. Original Borrowers entered into a security agreement, pursuant to which the obligations under the Credit Facility are secured by liens on substantially all of the assets of Original Borrowers. Furthermore, the obligations under the Credit Facility are secured by a continuing, first priority mortgage lien, pledge of and security interest in not less than 80 % of Original Borrowers’ producing oil, gas and other leasehold and mineral interests, including without limitation, those situated in the States of North Dakota and Montana. On November 18, 2024, the Company entered into the First Amendment to the Credit Facility (the “First Amendment”). Pursuant to the First Amendment (a) the maximum revolver commitment amount is $ 20.0 million; and (b) commencing on December 31, 2024, and occurring on the last day of each calendar month thereafter, the revolver commitment amount is reduced by $ 250,000 . On June 18, 2025, the Company entered into the Second Amendment to the Credit Facility (the “Second Amendment”). The Second Amendment added Empire Texas Development LLC as a third borrower to the Original Borrowers (collectively “Borrowers”) to the original Credit Facility and extends the obligation security by liens on substantially all of the assets of Empire Texas Development LLC. On December 29, 2025, the Company entered into the Third Amendment to the Credit Facility (the “Third Amendment”). Pursuant to the Third Amendment, among other things, (a) the final maturity date was extended to December 29, 2028, (b) Borrowers delivered a replacement promissory note, (c) Empire Texas Development LLC executed and delivered an amended and restated security agreement, (d) Borrowers paid a fully earned and non-refundable loan extension fee of $ 0.05 million, and (e) the Company executed and delivered guarantor acknowledgment and ratification. The Credit Facility requires Borrowers to maintain (a) a current ratio of 1.0 to 1.0 or more and (b) a ratio of funded debt to EBITDAX (as defined in the revolver loan agreement), calculated quarterly and annually based on a trailing twelve-month basis, of no more than 3.50 to 1.00. At December 31, 2025, the Borrowers were in compliance with all required covenants under the Credit Facility. Promissory Note - Related Party On February 16, 2024, Empire issued a promissory note (the “February Note”) in the aggregate principal amount of $ 5.0 million to Energy Evolution with a maturity date of February 15, 2026, (the “February Maturity Date”) and accrues interest at the rate of 7 % per annum beginning March 31, 2024, and on each subsequent quarter end date until the February Maturity Date paid in cash or shares of common stock at the option of Energy Evolution. Any unpaid balance after the February Maturity Date accrues interest at 9 % per annum. The February Note carries no penalties for prepayment without the consent of Energy Evolution if Empire provides written notification within at least five business days. At the discretion of Energy Evolution all or any portion of the outstanding principal amount of the February Note may be converted into shares of common stock at a conversion price of $ 6.25 per share, subject to customary adjustments, up to a maximum conversion shares amount of 800,000 (without giving effect to any interest that may be converted). Empire determined that an embedded conversion feature included in the February Note required bifurcation from the host contract that is recognized as a separate derivative liability carried at fair value. The estimated fair value of the derivative liability, which represents a Level 3 valuation, was approximately $ 1.3 million as of March 31, 2024, and was determined using a binomial lattice model using certain assumptions and inputs discussed in Note 16. Accordingly, Empire recognized a gain on the fair value adjustment of the derivative liability in the amount of approximately $ 0.7 million. The conversion option was exercised by Energy Evolution on May 24, 2024, in exchange for 800,000 shares of common stock of the Company under the terms of the February Note and the fair value of the derivative was revalued as of that date resulting in a loss of $ 1.7 million in 2024. All of the other embedded features of the February Note were clearly and closely related to the debt host and did not require bifurcation as a derivative liability. On June 17, 2025 (the “Original Issue Date”), the Company issued a promissory note (the “June Note”) in the aggregate principal amount of $ 4.0 million to Mr. Mulacek. On the Original Issue Date, Mr. Mulacek advanced the Company $ 2.0 million under the June Note (the “Original Issue Date Advance”). From time to time, during the period beginning 45 days after the Original Issue Date and ending 90 days after the Original Issue Date, the Company may request in writing that Mr. Mulacek advance up to another $ 2.0 million to the Company, provided that no Event of Default (as defined in the June Note) has occurred or is continuing. Within five business days of receipt of such notice, Mr. Mulacek shall either advance the funds requested (an “Additional Advance”) or decline to make such additional advance. The June Note may be prepaid at any time or from time to time without the consent of Mr. Mulacek and without penalty or premium. 59 Table of Contents The June Note matures on June 17, 2027 (the “June Maturity Date”) and accrues interest at the rate of 5.5 % per annum. After the Maturity Date, any principal balance of the June Note remaining unpaid accrues interest at the rate of 9 % per annum. All accrued but unpaid interest is payable in cash on the June Maturity Date, except upon the occurrence of an Event of Default, in which case all accrued and unpaid interest shall immediately be due and payable. In the event that after the Original Issue Date, the Company closes a sale of its equity (an “Equity Raise”), the Company shall promptly, but in no event later than five business days after receipt of the proceeds from such Equity Raise, repay the lesser of (a) the Original Issue Date Advance (including any interest or fees thereon) or (b) the amount of the Equity Raise to Mr. Mulacek (an “Equity Raise Repayment”). In the event the Company receives proceeds from the sale of any of its equity after an Equity Raise Repayment and an Additional Advance, the Company shall use such proceeds to promptly repay such Additional Advance, and all accrued and unpaid interest thereon, to Mr. Mulacek. In August 2025, Empire completed an Equity Raise further described in Note 9 and repaid the outstanding June Note balance and all accrued and unpaid interest. On September 24, 2025, Empire issued a convertible promissory note (the “September Note”) in the aggregate principal amount of $ 4.0 million to Mr. Mulacek with a maturity date of September 23, 2027, (the “September Maturity Date”) and accrues interest at the rate of 5.5 % per annum with interest paid in cash on March 31, 2026, and on each semi-annual end date until the September Maturity Date. Mr. Mulacek advanced to the Company $ 2.0 million (“First Advance”) payable in full at the September Maturity Date and an additional $ 2.0 million may be advanced from time to time from March 23, 2026 and for a period of six months thereafter, provided no Event of Default further described in the September Note has occurred. Any unpaid balance after the September Maturity Date accrues interest at the rate of 9 % per annum. The September Note carries no penalties for prepayment without the consent of Mr. Mulacek if Empire provides written notification within at least five business days. At the discretion of Mr. Mulacek all or any portion of the outstanding principal amount of the September Note may be converted into shares of common stock at a conversion price of $ 4.27 per share, subject to customary adjustments up to a maximum conversion shares amount of 936,768 . On November 5, 2025, the September Note was amended to increase the conversion price for the First Advance to $ 4.32 per share for a maximum conversion shares amount of 462,962 and to provide that any further advances are at the discretion of Mr. Mulacek. The conversion price for each subsequent advance shall be determined per the terms of the amendment on November 5, 2025. The Company repaid the full outstanding balance and all related interest in February 2026. Empire determined that an embedded conversion feature included in the September Note required bifurcation from the host contract that is recognized as a separate derivative liability carried at fair value and revalued at each reporting period. The estimated fair value of the derivative liability, which represents a Level 3 valuation, was approximately $ 0.3 million as of December 31, 2025, and was determined using a binomial lattice model using certain assumptions and inputs discussed in Note 16. Accordingly, Empire recognized total gains on the fair value adjustment of the derivative liability in the amount of approximately $ 0.6 million for the year ended December 31, 2025, reflected within other income (expense) on the consolidated statements of operations. All of the other embedded features of the September Note were clearly and closely related to the debt host and did not require bifurcation as a derivative liability. As partial consideration for the September Note, the Company issued Mr. Mulacek a warrant certificate to purchase up to 281,030 common shares at a $ 4.27 exercise price which will expire on September 24, 2028. On November 5, 2025, the warrant certificate was amended to change the exercise price to $ 4.32 and the maximum purchase to 138,889 common shares. In the event Mr. Mulacek advances an additional $ 2.0 million under the terms of the September Note, an additional warrant certificate will be issued to purchase a number of common shares at an exercise price determined at the issuance of the additional warrant certificate per the terms of the amendment on November 5, 2025. In no event will Mr. Mulacek be entitled to receive an aggregate amount of the Company’s common stock in excess of 1,217,798 shares in connection with conversions under the September Note, exercises under the warrant certificate and/or exercises under one or more additional warrant certificates related to subsequent advances. Empire determined the warrants shall be classified as equity and accounted for as a discount to the outstanding September Note balance at its relative fair value and amortized over the life of the September Note. The amortization shall be recognized within interest expense in the consolidated statements of operations. The estimated relative fair value of the warrants on the date the warrant certificate was issued was approximately $ 0.4 million and determined using a Black-Scholes model with certain assumptions and inputs discussed in Note 16. On the amendment date of November 5, 2025, the warrants were revalued using a Black-Scholes model to approximately $ 0.1 million. As of December 31, 2025, the unamortized discount was approximately $ 0.1 million. On February 19, 2026, Empire issued a convertible promissory note (the “February 2026 Note”) in the aggregate principal amount of $ 3.0 million to Mr. Mulacek with a maturity date of May 19, 2026, and accrues interest at the rate of 5.5 % per annum until the earlier of the date Mr. Mulacek elects to convert some or all of the February 2026 Note or the maturity date paid in cash. Any unpaid balance after the maturity date accrues interest at 9 % per annum. The February 2026 Note carries no penalties for prepayment without the consent of Mr. Mulacek if Empire provides written notification within at least five business days. At the discretion of Mr. Mulacek all or any portion of the outstanding principal amount of the February 2026 Note may be converted into shares of common stock at a conversion price of $ 2.99 per share, subject to customary adjustments up to a maximum conversion shares amount of 1,003,344 . In March 2026, Mr. Mulacek converted the full February 2026 Note for total common shares of 1,003,344 in accordance with the terms of the February 2026 Note. The Company also paid all outstanding interest in cash. ​ 60 Table of Contents Note Payable - Related Party On July 31, 2024, Empire Texas paid the remaining outstanding term loan balance with Petroleum & Independent Exploration, LLC and related entities (“PIE”), a related party (Note 13), of $ 1.1 million. As consideration for payment, Empire issued PIE 205,427 shares of common stock of Empire following the approval of a supplemental listing application by the NYSE American stock exchange in the third quarter of 2024. Note 8 - Leases As a lessee, the Company leases its corporate office headquarters in Tulsa, Oklahoma, and one field office. The leases expire between 2026 and 2027. The corporate office has an option to renew for an additional five-year term. The option to renew the lease is generally not considered reasonably certain to be exercised. Therefore, the period covered by such optional period is not included in the determination of the term of the lease and the lease payments during these periods are similarly excluded from the calculation of right-of-use lease asset and lease liability balances. The Company also leases vehicles primarily used in our field operations. These vehicle leases typically have a three-year life. The Company recognizes right-of-use lease expense on a straight-line basis, except for certain variable expenses that are recognized when the variability is resolved, typically during the period in which they are paid. Variable right-of-use lease payments typically include charges for property taxes, insurance, and variable payments related to non-lease components, including common area maintenance. Right-of-use lease expense was approximately $ 0.5 million for both the years ended December 31, 2025 and 2024, respectively. Cash paid for right-of-use lease was approximately $ 0.4 million and $ 0.5 million for the respective periods. Supplemental balance sheet information related to the right-of-use leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 Net operating lease asset (included in Other property and equipment, net) ​ $ 328 ​ $ 604 ​ ​ ​ ​ ​ ​ ​ Current portion of lease liability ​ $ 286 ​ $ 400 Long-term lease liability ​ 12 ​ 144 Total right-of-use lease liabilities ​ $ 298 ​ $ 544 ​ The weighted-average remaining term is 0.9 years, and the weighted-average discount rate is 7.58 % for Empire’s right-of-use leases as of December 31, 2025. Maturities of lease liabilities as of December 31, 2025, are as follows: ​ ​ ​ ​ ​ December 31, ​ 2025 Year 1 $ 296 Year 2 12 Year 3 — Year 4 — Year 5 — Total lease payments 308 Less: imputed interest ( 10 ) Total lease obligation $ 298 ​ ​ ​ Note 9 – Equity Pursuant to the Company’s Amended and Restated Certificate of Incorporation (“Charter”), effective as of March 4, 2022, the total number of shares of all classes of stock that the Company has the authority to issue is 200,000,000 , consisting of 190,000,000 shares of common stock, par value $ 0.001 per share, and 10,000,000 shares of preferred stock, par value $ 0.001 per share. Preferred Stock Preferred stock may be issued from time to time in one or more series at the direction of the Company’s Board of Directors and the directors also have the ability to fix dividend rates and rights, liquidation preferences, voting rights, conversion rights, rights and terms of redemption and other rights, preferences, privileges and restrictions as determined by the Company’s Board of Directors, subject to certain limitations set forth in the Charter. 61 Table of Contents Series A Voting Preferred Stock On March 8, 2022, the Company formalized the issuance of preferred stock as was required under the terms of the Company’s May 2021 financing agreements with Energy Evolution and issued six shares of Series A Voting Preferred Stock. The Series A Voting Preferred Stock was issued in connection with the strategic investment in the Company by Energy Evolution. For so long as the Series A Voting Preferred Stock is outstanding, the Company’s Board of Directors will consist of six directors. Three of the directors are designated as the Series A Directors and the three other directors (each, a “common director”) are elected by the holders of common stock and/or any preferred stock (other than the Series A Voting Preferred Stock) granted the right to vote on the common directors. Any Series A Director may be removed with or without cause but only by the affirmative vote of the holders of a majority of the Series A Voting Preferred Stock voting separately and as a single class. The holders of the Series A Voting Preferred Stock have the exclusive right, voting separately and as a single class, to vote on the election, removal and/or replacement of the Series A Directors. Holders of common stock or other preferred stock do not have the right to vote on the Series A Directors. The approval of the holders of the Series A Voting Preferred Stock, voting separately and as a single class, is required to authorize any resolution or other action to issue or modify the number, voting rights or any other rights, privileges, benefits, or characteristics of the Series A Voting Preferred Stock, including without limitation, any action to modify the number, structure and/or composition of the Company’s current Board of Directors. The Series A Voting Preferred Stock is held by Phil Mulacek, Chairman of the Board of Directors of the Company and one of the principals of Energy Evolution, as Energy Evolution’s designee (the “Initial Holder”). The Series A Voting Preferred Stock may be transferred only to certain controlled affiliates of the Initial Holder (“Permitted Transferees”), and the voting rights of the Series A Voting Preferred Stock are contingent upon the Initial Holder and Permitted Transferees (collectively, the “Series A Holders”) holding together at least 3,000,000 shares of the Company’s outstanding common stock. The Series A Voting Preferred Stock is not entitled to receive any dividends or distributions of cash or other property except in the event of any liquidation, dissolution or winding up of the Company’s affairs. In such event, before any amount is paid to the holders of the Company’s common stock but after any amount is paid to the holders of the Company’s senior securities, the holders of the Series A Voting Preferred Stock will be entitled to receive an amount per share equal to $ 1.00 . Except as discussed above or as otherwise set forth in the certificate of designation of the Series A Voting Preferred Stock, the holders of the Series A Voting Preferred Stock have no voting rights. The Series A Voting Preferred Stock is not redeemable at the Company’s election or the election of any holder, except the Company may elect to redeem the Series A Voting Preferred Stock for $ 1.00 per share following satisfaction of its notice and cure requirements in the event that: ● any or all shares of Series A Voting Preferred Stock are held by anyone other than the Initial Holder or a Permitted Transferee; or ● the Series A Holders together hold less than 3,000,000 shares of the Company’s outstanding common stock. The Series A Voting Preferred Stock is not convertible into common stock or any other security. Common Stock The holders of shares of common stock are entitled to one vote per share for all matters on which common stockholders are authorized to vote on. Examples of matters that common stockholders are entitled to vote on include, but are not limited to, the election of three of the six directors and other common voting situations afforded to common stockholders. In April 2024, Empire completed a subscription rights offering (the “April Rights Offering”) which raised gross proceeds of $ 20.7 million. Empire distributed at no charge to holders of its common stock, as of the close of business on March 7, 2024 (the record date for the April Rights Offering), one subscription right for each share of common stock held. Each subscription right entitled the holder to purchase 0.161 shares of common stock at a subscription price of $ 5.00 per share per one whole share of common stock. The subscription rights were non-transferable and not listed for trading on any stock exchange or market. On July 31, 2024, Petroleum & Independent Exploration, LLC and related entities (“PIE”), a related party (Note 13), Empire Texas, and Empire entered into a note repayment and loan termination agreement providing for the payment in full of the remaining outstanding amount of the approximate $ 1.1 million PIE loan As payment in full, Empire issued PIE 205,427 shares of common stock of Empire following the approval of a supplemental listing application by the NYSE American stock exchange in the third quarter of 2024. On May 31, 2024, Empire issued Energy Evolution a warrant certificate granting them the right to purchase 128,800 shares of common stock of Empire at $ 5.00 per share. On June 28, 2024, Energy Evolution exercised the warrants and received 128,800 shares in exchange for approximately $ 0.6 million. 62 Table of Contents In November 2024, Empire completed a subscription rights offering (the “November Rights Offering”) which raised gross proceeds of $ 10.0 million. Empire distributed at no charge to holders of its common stock, as of the close of business on September 30, 2024 (the record date for the November Rights Offering), one subscription right for each share of common stock held. Each subscription right entitled the holder to purchase 0.063 shares of common stock at a subscription price of $ 5.05 per share per one whole share of common stock. The subscription rights were non-transferable and not listed for trading on any stock exchange or market. In August 2025, Empire completed a subscription rights offering (the “August Rights Offering”) which raised gross proceeds of $ 2.5 million. Empire distributed at no charge to holders of its common stock, as of the close of business on July 10, 2025 (the record date for the August Rights Offering), one non-transferable subscription right for each whole share of common stock owned by that stockholder on the record date. Each subscription right entitled a rights holder to purchase one unit at a subscription price equal to $ 0.07367 per unit, each unit consisting of 0.0139 shares of the Company’s common stock and one rights warrant to purchase 0.0136 shares of the Company’s common stock equal to $ 5.46 per whole share. No fractional shares of common stock are issued in the rights offering, including upon exercise of the warrants. The subscription rights were initially set to expire if they were not exercised or extended at the discretion of the Company by July 25, 2025; however, this date was subsequently extended to August 20, 2025. The warrants expired 90 days after the August Extension Date. No warrants were exercised. On September 24, 2025 and as amended on November 5, 2025, Empire issued Mr. Mulacek a warrant certificate granting him the right to purchase up to 138,889 shares of common stock of Empire at $ 4.32 per share in conjunction with the September Note further described in Note 7. On December 10, 2025, Empire entered into a letter agreement with Energy Evolution to acquire the remaining 40 % of certain New Mexico interests and closed the transaction on January 5, 2026. As consideration, the Company issued 562,500 shares of common stock on January 5, 2026, which is the closing date of the letter agreement, based on an agreed upon price of $ 3.20 per share for an aggregate agreed upon value of $ 1.8 million (Note 3). In February 2026, Empire announced a subscription rights offering which was expected to raise gross proceeds of $ 6.0 million. Empire distributed at no charge to holders of its common stock, as of the close of business on February 2, 2026 (the record date), one non-transferable subscription right for each whole share of common stock owned by that stockholder on the record date. Each subscription right entitled the holder to purchase 0.057 shares of common stock at a subscription price of $ 2.99 per whole share. The offering includes an oversubscription privilege, which entitles stockholders who fully exercise their subscription rights the right to purchase at the same exercise price additional units in the rights offering that other stockholders do not purchase, subject to availability and pro-rata allocation of units among rights holders exercising such oversubscription privilege. No fractional shares of common stock will be issued in the rights offering. The subscription rights were set to expire if they were not exercised or extended at the discretion of the Company by February 27, 2026. On February 25, 2026, the subscription rights offering was modified to entitle each holder to purchase 0.095 shares of common stock at a subscription price of $ 2.99 per one whole share of common stock for gross proceeds of up to approximately $ 10.0 million. The expiration date was also extended to March 18, 2026. See Note 13 for information regarding other transactions where shares of common stock of the Company were issued. Note 10 – Stock Based Compensation Empire recognizes stock-based compensation expense associated with granted stock options and restricted stock units (“RSUs”). Empire accounts for forfeitures of equity-based incentive awards as they occur. Stock-based compensation expense related to time-based restricted stock units is based on the price of the common stock on the grant date and recognized as vesting occurs. For options, the fair value is determined using the Black-Scholes option valuation assumptions on dividend yield, expected annual volatility, risk-free interest rate and an expected useful life. Stock-based compensation expense for restricted stock units and stock options is included in general and administrative expense in the consolidated statements of operations and is recorded with a corresponding increase in additional paid-in capital within the consolidated balance sheets. On April 3, 2019, the Board of Directors of the Company adopted the Empire Petroleum Corporation 2019 Stock Option Plan (the “2019 Stock Option Plan”). The total number of shares of common stock that may be issued pursuant to stock options under the 2019 Stock Option Plan was 2,500,000 . On August 27, 2021, the Board of Directors of the Company adopted the Company’s 2021 Stock and Incentive Compensation Plan (the “2021 Incentive Plan”) which was subsequently approved by stockholders of the Company. As a result of such approval, no further awards will be made under the 2019 Incentive Plan. The total number of shares of common stock that could be issued pursuant to the 2021 Incentive Plan is 750,000 . On August 26, 2022, the stockholders of the Company approved the Company’s 2022 Stock and Incentive Compensation Plan (the “2022 Incentive Plan”) which reserves 750,000 shares of the Company’s common stock for issuance thereunder. As a result of such approval, no further awards will be made under the 2021 Incentive Plan. On June 9, 2023, the stockholders of the Company approved the Company’s 2023 Stock and Incentive Compensation Plan (the “2023 Incentive Plan”) which reserves 700,000 shares of the Company’s common stock for issuance thereunder. As a result of such approval, no further awards will be made under the 2022 Incentive Plan. On June 14, 2024, the Board of Directors adopted the Company’s 2024 Stock and Incentive Compensation Plan (the “2024 Incentive Plan”) which reserves 700,000 shares of the Company’s common stock 63 Table of Contents for issuance thereunder. As a result of such approval no further awards will be made under the 2023 Incentive Plan. The 2024 Incentive Plan authorizes the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards (restricted stock awards, restricted stock units, performance shares and performance units are collectively referred to as restricted stock units for purposes of this Note). At December 31, 2025, 346,391 shares of our common stock were available for future grants. Restricted Stock Units Each RSU represents the contingent right to receive one share of common stock. The holders of outstanding RSUs do not receive dividends or have voting rights prior to vesting and settlement. The Company determines the fair value of granted RSUs based on the market price of the common stock on the date of the grant. Compensation expense for granted RSUs is recognized on a straight-line basis over the vesting and is net of forfeitures, as incurred. RSUs are generally granted with 12 -month, 13 -month, or 3 -year service periods. Total value assigned to the RSUs granted in 2025 based on grant date price approximated $ 0.7 million. For both the years ended December 31, 2025 and 2024, approximately $ 0.9 million of compensation expense related to RSUs was recognized. At December 31, 2025, approximately $ 0.4 million of unrecognized compensation expense remained and will be recognized on a straight-line basis depending on the service period of each grant. The following summary reflects nonvested restricted stock unit activity and related information: ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ Shares ​ ​ ​ Fair Value (1) Outstanding, December 31, 2023 204,817 ​ $ 10.61 Granted 106,260 ​ 5.29 Vested (2) ( 162,034 ) ​ 9.79 Forfeited ( 22,500 ) ​ 11.05 Outstanding, December 31, 2024 126,543 ​ $ 7.11 Granted 124,074 ​ 5.87 Vested (2) ( 134,218 ) ​ 7.03 Forfeited ( 27,600 ) ​ 5.36 Outstanding, December 31, 2025 88,799 ​ $ 6.13 (1) Shares are valued at the grant-date market price. (2) Total fair value of RSUs vested was approximately $ 0.9 million and $ 1.6 million for the years ended December 31, 2025 and 2024, respectively. ​ Stock Options Each stock option award provides the opportunity in the future to purchase Empire common shares at the market price of our common stock on the date the award is granted (the strike price). The options generally become exercisable in equal amounts over a three-year vesting period or over one-year for options awarded to the Board of Directors of the Company; however, certain options become exercisable only if certain performance criteria are met. Stock options have no financial statement effect on the date they are granted but rather are reflected over time through recording stock-based compensation expense. The stock-based compensation expense is based on the estimated fair value of the awards expected to vest, and that amount is amortized as compensation expense on a straight-line basis over the respective vesting period and is net of forfeitures, as incurred. The estimated fair value of an option is calculated using a Black-Scholes option valuation model with the following assumption inputs: dividend yield, expected annual volatility, risk free interest rate and an expected life of the option. The following table summarizes the weighted-average fair value and assumptions: ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ Weighted-average grant-date fair value of stock options $ 1.90 ​ $ 3.25 ​ Stock Options Valuation Assumptions: ​ ​ ​ ​ Risk-free interest rate 4.2 % ​ 4.5 % ​ Dividend yield 0.0 % ​ 0.0 % ​ Expected volatility 63.2 % ​ 73.9 % ​ Expected option life (in years) 3.29 ​ 5.00 ​ Other pricing model inputs: ​ ​ ​ ​ Weighted-average grant-date market prices of Empire stock (strike price) $ 4.55 ​ $ 5.12 ​ ​ For the years ended December 31, 2025 and 2024, approximately $ 0.4 million and $ 1.1 million of compensation expense related to stock options was recognized. At December 31, 2025, approximately $ 0.5 million of unrecognized compensation expense remained and will be recognized on a straight-line basis depending on the service period of each grant. 64 Table of Contents The following summary reflects stock option activity and related information: ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ Options (2) ​ ​ ​ Exercise Price (3) Outstanding, December 31, 2023 2,065,381 ​ $ 4.89 Granted 149,335 ​ ​ 5.12 Exercised ( 193,866 ) ​ ​ 1.35 Cancelled ( 135,000 ) ​ ​ 12.17 Outstanding, December 31, 2024 1,885,850 ​ $ 4.75 Granted 21,000 ​ ​ 4.55 Exercised ( 589,100 ) ​ ​ 1.32 Cancelled ( 56,250 ) ​ ​ 8.79 Outstanding, December 31, 2025 (1) 1,261,500 ​ $ 6.17 Exercisable, December 31, 2025 (1) 984,333 ​ $ 5.73 (1) Stock options outstanding and exercisable had an aggregate intrinsic value of ($ 3.9 ) million and ($ 2.7 ) million, respectively. (2) Stock options outstanding at December 31, 2025 had weighted-average remaining contract term of 3.39 years. (3) Stock options outstanding at December 31, 2025 had an exercise price range of $ 1.32 to $ 12.36 . ​ Note 11 – Income Taxes The Company operates exclusively within the U.S. and is subject to U.S. federal and various state income tax. Any impacts of state income taxes is primarily attributable to New Mexico and North Dakota, which represents more than 50% of the total state tax effect for the years ended December 31, 2025 and 2024. ​ In the event that an entity has an “ownership change” (as defined in Section 382 of the Internal Revenue Code of 1986, as amended (“IRC”), an entity’s federal net operating loss carryforwards (“NOLs”) generated prior to an ownership change would be subject to annual limitations, which could defer or eliminate the Company’s ability to utilize these tax losses against future taxable income. Generally, an “ownership change” occurs if one or more stockholders, each of whom owns 5% or more in value of a corporation’s stock, increase their aggregate percentage ownership by more than 50% over the lowest percentage of stock owned by those stockholders at any time during the preceding three-year period. A full Section 382 analysis was prepared in 2024 and it was determined that our NOLs were subject to limitations under IRC Section 382. The Company's ability to use NOLs and other tax attributes to reduce taxable income and income taxes could be materially impacted by a future IRC 382 ownership change. Future transactions involving the Company's stock including those outside of the Company's control could cause an IRC Section 382 ownership change resulting in a limitation on tax attributes currently not limited and a more restrictive limitation on tax attributes currently subject to the previous IRC 382 limitation. ​ At December 31, 2025, the Company had approximately $ 59.7 million federal NOLs generated in prior years available to offset against future taxable income, net of NOLs expected to expire unused due to IRC Section 382 limitations. Of the $ 59.7 million NOLs, approximately $ 59.3 million relate to periods after 2017 and have an indefinite life. Additionally, approximately $ 0.4 million will begin to expire between 2025-2037 if not used. Approximately $ 1.1 million of the NOLs were limited as of December 31, 2025, due to previous ownership changes. ​ For both 2025 and 2024, our effective tax rates were 0 %. Other than the full year of 2022, Empire has generated net operating losses since inception, which would normally reflect a tax benefit in the consolidated statements of operations and a deferred asset on the consolidated balance sheets. However, because of the current uncertainty as to Empire’s ability to achieve sustained profitability, a full valuation reserve has been established that offsets the amount of any tax benefit available for each period presented in the consolidated statements of operations. ​ The Company did no t have any current or deferred state or federal income tax expense for the years ended December 31, 2025 and 2024. ​ As a result of the continued net operating losses, we have made no cash payments of U.S. federal or state income taxes, net of refunds, as of December 31, 2025 or 2024, respectively. ​ 65 Table of Contents Deferred tax assets and liabilities are the result of temporary differences between the financial statement carrying values and the tax basis of assets and liabilities. The Company’s net tax position is as follows: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2025 ​ ​ ​ 2024 Deferred tax assets: ​ ​ ​ ​ Loss carry-forwards $ 14,521 ​ $ 9,249 Stock option grants 1,563 ​ 2,527 Asset retirement obligation 1,939 ​ 7,955 Other 1,040 ​ 784 Total deferred tax assets 19,063 ​ 20,515 Deferred tax liabilities: ​ ​ ​ Oil and gas properties 9,564 ​ ( 7,863 ) Other property and equipment ( 31 ) ​ ( 62 ) Financial Derivatives ( 1 ) ​ — Lease liabilities ( 7 ) ​ ( 15 ) Total deferred tax liabilities 9,525 ​ ( 7,940 ) ​ ​ ​ ​ ​ ​ Net deferred tax asset before valuation allowance 28,588 ​ 12,575 ​ ​ ​ ​ ​ ​ Valuation allowance ( 28,588 ) ​ ( 12,575 ) Net deferred taxes $ — ​ $ — ​ Utilization of the Company’s loss carryforwards is dependent on realizing taxable income. The Company’s recorded valuation allowances of approximately $ 28.6 million and $ 12.6 million as of December 31, 2025 and 2024, respectively, are due to the uncertainty related to its ability to utilize some of its deferred income tax assets, primarily consisting of net operating loss carryforwards prior to expiration or the limitation under Section 382 as discussed above. The following table presents a reconciliation of its income tax (benefit) provision and effective income tax rate to the U.S. statutory income tax rate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ 2025 ​ 2024 Benefit at statutory rate $ ( 15,136 ) ​ 21.0 % ​ $ ( 3,402 ) ​ 21.0 % State Taxes ( 854 ) 1.2 % ​ ( 7 ) 0.0 % Effect of changes in rates enacted in the current period ​ 734 ​ ( 1.0 ) % ​ ​ — ​ - % Valuation Allowance 14,470 ( 20.1 ) % ​ 3,178 ( 19.6 ) % Nondeductible Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised ​ ( 17 ) ​ 0.0 % ​ ​ ( 135 ) ​ 0.8 % Other ​ 14 ​ ( 0.0 ) % ​ ​ 15 ​ ( 0.1 ) % Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return to Accrual 911 ( 1.3 ) % ​ 36 ( 0.2 ) % Derivative Liability, Promissory Note Conversion ( 122 ) 0.2 % ​ 315 ( 1.9 ) % Income tax (benefit) provision $ — - % ​ $ — - % ​ The Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken would more likely than not be sustained by examination. Therefore, at December 31, 2025, the Company has not established any reserves for, nor recorded any unrecognized benefits related to uncertain tax positions. The Company’s only taxing jurisdiction is the United States. The Company’s tax years 2022 to present remain open for federal examination. Additionally, tax years 2005 through 2021 remain subject to examination for the purpose of determining the amount of federal NOL and other carryforwards. The number of years open for state tax audits varies, depending on the state, but is generally from three to five years . Tax Legislation On July 4, 2025, the U.S. enacted H.R. 1, informally referred to as the One Big Beautiful Bill Act ("OBBBA”) and contains a broad range of changes to the U.S. federal income tax laws and makes permanent or modifies certain provisions of the Tax Cuts and Jobs Act. Among other provisions, the OBBBA includes permanently restoring an EBITDA-based business interest deduction limitation, 100% bonus depreciation for certain property and immediate expensing for certain domestic research and experimental expenditures. We determined the OBBBA did not have a material impact on our consolidated financial statements for the year ending December 31, 2025. Any impacts of these changes are reflected within income tax provision (benefit) on the consolidated statements of operations for the year ended December 31, 2025. We continue to monitor further legislative developments and administrative guidance. ​ 66 Table of Contents Note 12 – Loss per Share Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. The computation of Diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on losses. As a result, if there is a loss from continuing operations, Diluted EPS is computed in the same manner as Basic EPS. In addition, approximately 650,000 options were excluded in the current period Diluted EPS computation due to the option exercise price exceeding the weighted-average market price of our common shares. The following table summarizes the calculation of loss per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2025 ​ ​ ​ 2024 Net Loss ​ $ ( 72,074 ) ​ $ ( 16,198 ) ​ ​ ​ ​ ​ ​ ​ Basic Weighted-Average Shares ​ 34,056,054 ​ 30,064,856 Effect of Dilutive Securities: ​ ​ ​ ​ Dilutive effect of potential common shares issuable (1) ​ — ​ — Diluted Weighted-Average Shares ​ ​ 34,056,054 ​ ​ 30,064,856 Loss per Common Share ​ ​ ​ ​ Basic ​ $ ( 2.12 ) ​ $ ( 0.54 ) Diluted ​ $ ( 2.12 ) ​ $ ( 0.54 ) (1) At December 31, 2025, the Company had approximately 0.7 million of stock options, warrants, outstanding restricted stock units, and convertible debt excluded from the diluted shares calculation as their inclusion would be anti-dilutive due to a net loss for the period. At December 31, 2024, the Company had approximately 1.0 million of stock options and outstanding restricted stock units excluded as their effect would have been anti-dilutive due to a net loss for the respective periods. Note 13 – Related Party Transactions Energy Evolution is a related party of the Company as it beneficially owns approximately 30.8 % of the Company’s outstanding shares of common stock as of December 31, 2025. In October 2021, a member of Energy Evolution and a board member of Energy Evolution were appointed to the Company’s Board of Directors. The board member of Energy Evolution, Mr. Mulacek, separately beneficially owns approximately 24.5 % of the Company’s outstanding shares of common stock as of December 31, 2025 and is also a majority owner of PIE. The Company has a shared services agreement with PIE that includes access to administrative, engineering and support-services as well as building and insurance services. The agreement provides that the Company will reimburse PIE for the out-of-pocket costs incurred by PIE in providing such services to the Company. The Company had a joint development agreement with PIE to perform recompletion or workover on specified mutually agreed upon wells. In the third quarter of 2024, Empire issued PIE 205,427 shares of common stock of Empire as payment in full for this outstanding note balance of $ 1.1 million (Note 7). On February 16, 2024, Empire issued the February Note to Energy Evolution. Energy Evolution advanced Empire $ 5.0 million under the February Note in the first quarter of 2024. On May 24, 2024, Energy Evolution elected to convert the February Note to shares of common stock of Empire and received 800,000 shares under the terms of the February Note (Note 7). On April 9, 2024, Empire acquired 60 % of certain New Mexico interests from Energy Evolution. As consideration, Empire issued Energy Evolution 600,000 shares of common stock of Empire based on an agreed upon price of $ 5.00 per share for an aggregate agreed upon value of $ 3.0 million. On August 8, 2024, Empire successfully extended its option to purchase the remaining interest with the issuance of 16,800 shares of common stock to Energy Evolution, and as such, Empire has the right to acquire the remaining interest for an exercise price of $ 2.0 million. On May 1, 2025, the Company amended its ability to further extend the Purchase Option to allow for payment for such extension to be made in cash in lieu of the Option Shares due and payable on or before September 30, 2025. The Company made a cash payment to Energy Evolution on September 30, 2025 to extend the Purchase Option for an additional year. On December 10, 2025, the Company entered into a letter agreement to acquire the remaining 40 % of certain New Mexico interests with Energy Evolution and closed on January 5, 2026. As consideration, Empire issued 562,500 shares of common stock based on an agreed upon price of $ 3.20 per share for an aggregate agreed upon value of $ 1.8 million (Note 3). On June 28, 2024, Energy Evolution exercised its warrants of Empire and received 128,800 shares in exchange for approximately $ 0.6 million (Note 9). On June 17, 2025, the Company issued the June Note to Mr. Mulacek. Mr. Mulacek advanced Empire $ 2.0 million under the June Note in the second quarter of 2025 (Note 7). In August 2025, Empire completed an Equity Raise further described in Note 9 and repaid the outstanding June Note balance and all accrued and unpaid interest. 67 Table of Contents On September 24, 2025, Empire issued the September Note to Mr. Mulacek. Mr. Mulacek advanced Empire $ 2.0 million under the September Note in the third quarter of 2025 (Note 7). On November 5, 2025, Mr. Mulacek exercised 589,100 stock options at an exercise price of $ 1.32 per share. Accounts receivable on the consolidated balance sheet include approximately $ 0.8 million and $ 0.4 million receivable as of December 31, 2025 and 2024, respectively, from Energy Evolution. Accrued expenses on the consolidated balance sheet include approximately $ 0.1 million of revenue payable for both as of December 31, 2025 and 2024 to Energy Evolution. Note 14 – Commitments and Contingencies The Company is subject to extensive federal, state, and local environmental laws and regulations. These laws, among other things, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. Management believes no materially significant liabilities of this nature existed as of the balance sheet date. From time to time, the Company is subject to various legal proceedings arising in the ordinary course of business, including proceedings for which the Company may not have insurance coverage. While many of these matters involve inherent uncertainty, we evaluate legal proceedings on a regular basis and accrue a liability for such matters when the Company believes that a loss is probable, and the amount of the loss can be reasonably estimated. Any such accruals are adjusted thereafter to reflect changed circumstances. In the event the Company determines that (i) a loss to the Company is probable but the amount of the loss cannot be reasonably estimated, or (ii) a loss to the Company is less likely than probable but is reasonably possible, then the Company is required to disclose the matter herein, although the Company is not required to accrue such loss. As of the date hereof, the Company does not currently believe that any such legal proceedings will have a material adverse effect on the Company’s business, financial position, results of operations or liquidity other than the following matter: On April 23, 2024, the Company was named as a defendant in civil action alleging breach of contract and unjust enrichment relating to certain services and equipment provided to the Company. As of December 31, 2025, the Company accrued approximately $ 0.8 million associated with the resolution of this matter, including related legal fees. The amount was paid in March 2026. Agreed Compliance Order In January 2024, the Company deposited $ 1.0 million into an escrow account in accordance with an Agreed Compliance Order (“ACO”) with the New Mexico Oil Conservation Division (“NMOCD”) for compliance work on certain inactive wells in New Mexico. Under the terms of the ACO, the escrow funds will be returned to the Company at a rate of $ 0.01 million for each well as the compliance work is completed. Empire is continuing to work with the NMOCD for all remaining compliance work to satisfy all requirements under the ACO and receive the remaining outstanding escrow amount of $ 0.2 million. New Mexico Trespass In December 2023, the Company initiated a legal action in the Fifth Judicial District Court, Lea County, New Mexico, against a saltwater company for trespassing and illegal wastewater dumping within one of the New Mexico water flood units. Certain of these matters implicate regulatory rulings and actions from either the NMOCD or the New Mexico Oil Conservation Commission. Management continues to evaluate the potential outcomes; however, it cannot be determined at this time, and no amount has been recognized due to the uncertainty of any conclusions that may arise as a result of such action. Note 15 – Concentrations The Company’s producing properties and oil and natural gas reserves are all located in Louisiana, New Mexico, North Dakota, Montana, and Texas. Because of the concentration, the Company is exposed to the impact of regional supply and demand factors, processing or transportation capacity constraints, severe weather events, water shortages, and government regulations specific to the geographic area. For the year ended December 31, 2025, the Company sold 66 % of its oil, natural gas, and NGLs to three customers. For the year ended December 31, 2024, the Company sold 78 % of its oil and natural gas production to four customers. No other purchaser accounted for more than 10% of our total revenues during the respective periods. The loss of these purchasers could result in a temporary interruption in sales or a lower price for production. The Company’s cash balances may at times exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company maintains cash accounts at reputable financial institutions. 68 Table of Contents Note 16 – Fair Value Measurements The following table provides the carrying value and fair value measurement information for certain financial assets and liabilities. The carrying values of cash, accounts receivable, inventory, accounts payable, accrued expenses, lease liabilities, notes payables and equipment and vehicle notes included in the accompanying consolidated balance sheets approximated fair value at December 31, 2025 and 2024, as applicable, and generally represent Level 2 fair values due to their short-term nature. Therefore, such financial assets and liabilities are not presented in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements Using: ​ Carrying Total Fair Level 1 Level 2 Level 3 ​ Amount ​ ​ ​ Value ​ ​ ​ Inputs ​ ​ ​ Inputs ​ ​ ​ Inputs December 31, 2025 liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt - Credit Facility $ 14,146 ​ $ 14,146 ​ $ — ​ $ 14,146 ​ $ — Debt - Convertible Promissory Note - Related Party, excluding debt discount ​ 1,138 ​ ​ 1,506 ​ ​ — ​ ​ — ​ ​ 1,506 Derivative Instrument - Embedded Derivative ​ 281 ​ ​ 281 ​ ​ — ​ ​ — ​ ​ 281 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ Debt - Credit Facility $ 11,089 ​ $ 11,089 ​ $ — ​ $ 11,089 ​ $ — Debt - Convertible Promissory Note - Related Party, excluding debt discount ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Derivative Instrument - Embedded Derivative ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ The following methods and assumptions were used to estimate the fair values in the table above and other fair value measurements. Level 2 Debt – The fair value of our Credit Facility variable rate debt approximates the carrying value as the underlying prime rate changes based on prevailing market rates. See below for discussion on the fair value determination of the related party promissory note. Level 3 Impairment of oil and natural gas properties – The fair value of proved and unproved oil and natural gas properties was measured using valuation techniques that convert the future cash flows to a single discounted amount. Significant inputs to the valuation of proved and unproved oil and natural gas properties include estimates of: (i) recoverable reserves; (ii) production rates; (iii) future operating and development costs; (iv) future commodity prices; and (v) a market-based weighted-average costs of capital. The Company utilized a combination of the New York Mercantile Exchange strip pricing and consensus pricing to value the reserves, then applied various discount rates depending on the classification of reserves and other risk characteristics. For significant acquisitions, management utilized the assistance of a third-party valuation expert to estimate the value of the oil and natural gas properties acquired. Asset Retirement Obligation – The fair value of AROs is included in proved oil and natural gas properties with a corresponding liability. The fair value was determined based on a discounted cash flow model, which included assumptions of the estimated current abandonment costs, discount rate, inflation rate and timing associated with the incurrence of these costs. Empire applies the provisions of fair value measurement on a non-recurring basis to its non-financial assets and liabilities, including oil and gas properties and asset retirement obligations. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments if events or changes in certain circumstances indicate that adjustments may be necessary. We determined certain proved and unproved oil and gas properties are not expected to recover their entire carrying value through future cash flows as well as a substantial change in certain circumstances and therefore recorded an impairment loss for the year ended December 31, 2025. We did not identify any impairments for the year ended December 31, 2024. Warrants – The fair value of the warrants issued in connection with the September Note further described in Note 7 was measured using a Black-Scholes option pricing model. Key inputs for the Black-Scholes model include the stock price, exercise price, expected term, risk-free rate, volatility, and dividend yield. We consider this a Level 3 measurement within the fair value hierarchy as estimated volatility is generally unobservable and requires estimation. Assets and Liabilities Measured at Fair Value on a Recurring Basis – In the determination of the fair value of the February Note and the September Note discussed further in Note 7 including the embedded conversion feature, Empire used a binomial lattice valuation model to value Level 3 derivative liabilities at inception and on subsequent valuation dates. This model incorporates transaction details such as Empire’s stock price, contractual terms of the respective notes, and unobservable inputs classified as Level 3 including risk-free rate and expected volatility. As of the conversion option exercise date of May 24, 2024, related to the February Note, these unobservable inputs were 5.0 % and 46.9 %, respectively. Due to the subjective nature of these inputs, the fair value measurement could differ materially under alternative assumptions. 69 Table of Contents Note 17 – Segment Reporting The Company’s operations are managed and reported to its CEO, the Company’s CODM, on a consolidated basis. The CEO uses consolidated net loss in assessing performance of capital spend projects to allocate the appropriate resources to drive efficiencies and develop growth strategies. Under the organizational and reporting structure, the Company has one operating segment and one reportable segment. The CODM is provided with the following significant segment expenses within lease operating expense on the consolidated statements of operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 Production costs ​ $ 23,032 ​ $ 21,626 Workover activity ​ 1,507 ​ 4,768 Plugging and abandonment activity ​ 684 ​ 1,151 Total Lease operating expense ​ $ 25,223 ​ $ 27,545 ​ Other segment items within consolidated net loss are all separately disclosed on the consolidated statements of operations. Segment asset information is not presented to and used by the CODM to allocate resources, assess performance or make strategic decisions. Note 18 – Supplemental Information of Oil and Natural Gas Producing Activities (Unaudited) The following reserve estimates present the Company’s estimate of the proven natural gas and oil reserves and net cash flow of the Company’s properties, in accordance with the guidelines established by the Securities and Exchange Commission. The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries are more imprecise than those of producing natural gas and oil properties. Accordingly, the estimates are expected to change as future information becomes available. All the oil and natural gas reserves are located in Louisiana, New Mexico, North Dakota, Montana and Texas. Reserve Quantity Information Proved oil and natural gas reserves are those quantities of oil and gas, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations. Proved developed reserves are proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well. Proved undeveloped reserves are proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. The information below excludes proved undeveloped reserves. Below are the net quantities of net proved developed reserves of the Company’s properties: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Oil (MBbls) ​ ​ ​ Gas (MMcf) ​ ​ ​ NGLs (MBbls) ​ ​ ​ MBoe Balance, December 31, 2023 6,924 6,104 1,171 9,112 Acquisition of Reserves 198 240 35 274 Revisions ( 90 ) 637 159 175 Extensions 550 — — 550 Production ( 581 ) ( 917 ) ( 150 ) ( 884 ) Balance, December 31, 2024 7,001 6,064 1,215 9,227 Acquisition of Reserves — — — — Revisions ( 556 ) ( 847 ) ( 30 ) ( 727 ) Extensions — — — — Divestitures ( 42 ) ​ ( 55 ) ​ ( 5 ) ​ ( 56 ) Production ( 525 ) ( 862 ) ( 150 ) ( 818 ) Balance, December 31, 2025 5,878 4,300 1,030 7,625 ​ The acquisition of reserves for 2024 primarily relate to additional working interests in certain of the Company’s New Mexico properties (Note 3). The revisions for the respective periods primarily relate to changes in pricing and the extensions in 2024 relate to increased volumes from our Starbuck Drilling Program. The divestitures in 2025 relate to the sale of non-core oil and natural gas properties. ​ 70 Table of Contents Costs Incurred Related to Oil and Gas Activities Costs incurred include capitalized costs of properties, equipment, and lease facilities for oil and natural gas producing activities. ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ 2025 ​ ​ ​ 2024 Acquisition $ — ​ $ 4,074 Exploration — ​ — Development 4,654 ​ 42,214 Total costs incurred $ 4,654 ​ $ 46,288 ​ Standardized Measure of Discounted Future Net Cash Flows Relating to Oil and Natural Gas Reserves The standardized measure of discounted future net cash flows relating to oil and natural gas reserves and associated changes in standard measure amounts were prepared in accordance with the provision of FASB ASC 932-235-555, Extracting Activities – Oil and Gas (“Topic 932”). Future cash inflows were computed by applying average prices of oil and natural gas for the last 12 months to estimated future production. Future production and development costs were computed by estimating the expenditures to be incurred in developing the oil and natural gas reserves at the end of the year, based on year-end costs and assuming continuation of existing economic conditions. Future net cash flows are discounted at the rate of 10% annually to derive the standardized measure of discounted cash flows. Actual future cash inflows may vary considerably, and the standardized measure does not necessarily represent the fair value of the acquired properties’ oil and natural gas reserves. Standard measure amounts are: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2025 ​ ​ ​ 2024 Future cash inflows $ 391,089 ​ $ 537,303 Future production costs ( 277,342 ) ​ ( 324,215 ) Future development costs ( 30,006 ) ​ ( 38,681 ) Future income tax expense ( 1,867 ) ​ ( 18,020 ) Future net cash flows 81,874 ​ 156,387 10% annual discount for estimated timing of cash flows ( 23,265 ) ​ ( 58,022 ) Standardized measure $ 58,609 ​ $ 98,365 ​ The 12-month average prices were adjusted to reflect applicable transportation and quality differentials on a well-by-well basis to arrive at realized sales prices used to estimate the properties’ reserves. The prices for the properties’ reserves were as follows: ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Oil (Bbl) $ 61.55 ​ $ 71.66 Natural gas (MMBtu) $ 1.76 ​ $ 0.95 NGLs (Bbl) $ 21.07 ​ $ 24.54 ​ Changes in the Standardized Measure of Discounted Future Net Cash Flows at 10% per annum are as follows: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2025 ​ ​ ​ 2024 Beginning of year $ 98,365 ​ $ 83,017 Net change in prices and production costs ( 56,825 ) ​ ( 5,843 ) Net change in future development costs 534 ​ 221 Oil and gas net revenue ( 3,294 ) ​ ( 9,381 ) Extensions — ​ 11,255 Acquisition of reserves — ​ 1,891 Divestiture of reserves ​ ( 800 ) ​ ​ — Revisions of previous quantity estimates ( 1,454 ) ​ 6,676 Net change in taxes 8,760 ​ 4,274 Accretion of discount 10,853 ​ 9,746 Changes in timing and other 2,470 ​ ( 3,491 ) End of year $ 58,609 ​ $ 98,365 ​ Estimates of economically recoverable natural gas and oil reserves and of future net revenues are based upon a number of variable factors and assumptions, all of which are to some degree subjective and may vary considerably from actual results. Therefore, actual production, revenues, development and operating expenditures may not occur as estimated. The reserve data are estimates only, are subject to many uncertainties, and are based on data gained from production histories and on assumptions as to geologic formations and other matters. Actual quantities of natural gas and oil may differ materially from the amounts estimated. ​ ​ 71