What changed in this filing

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Item 9A. Controls and Procedures

2026-03-27 compared with 2025-03-19 · 102 added, 45 removed, 446 unchanged (25% of the section changed)

2 unchanged sentences

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the design and effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).

Based on that evaluation, our principal executive officer and principal financial officer have concluded that as of December 31, 2024, our disclosure controls and procedures were effective at the reasonable assurance level.

Based on that evaluation, our principal executive officer and principal financial officer have concluded that as of December 31, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weakness described below.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As disclosed in Note 4 “Business Combination” included in the notes to the consolidated financial statements contained herein, the Company completed the acquisition of Peak Exploration & Production LLC and Peak BLM Lease LLC (collectively, “Peak”), on November 14, 2025 in a business combination.

As discussed in Securities and Exchange Commission (“SEC”) staff guidance, a company may conclude it will exclude an acquired business from the assessment of internal control over financial reporting during the first year after completion of an acquisition.

In light of the overlap between a company’s disclosure controls and procedures and its internal control over financial reporting, the evaluation of disclosure controls and procedures may also exclude an assessment of the disclosure controls and procedures of the acquired entity that are subsumed in internal control over financial reporting.

In consideration of the SEC staff guidance, we excluded Peak from our assessment of the effectiveness of disclosure controls and procedures as of December 31, 2025.

Peak’s total assets and total revenues excluded from our assessment represented approximately 52% and 8% of the Company’s consolidated total assets and consolidated total revenues, respectively, as of and for the year ended December 31, 2025.

Management’s Report on Internal Control Over Financial Reporting

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The internal control structure includes, among other things, established policies and procedures, the selection and training of qualified personnel as well as management oversight.

With the participation of our management, we performed an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “2013 Framework)”.

Based upon our evaluation under the 2013 Framework, we have concluded that as of December 31, 2024 our internal control over financial reporting was effective.

The scope of management’s assessment of internal controls over financial reporting excluded the internal controls of Peak which is in accordance with guidance issued by the SEC Staff.

Based upon our evaluation under the 2013 Framework, we have concluded that as of December 31, 2025 our internal control over financial reporting was not effective due to the material weakness discussed below.

Material Weakness in Internal Control over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

As part of our assessment of internal controls over financial reporting, management identified a material weakness related to the accounting for significant and non-standard transactions.

After giving consideration to the material weakness, and the additional analyses and other procedures we performed to ensure that our Financial Statements included in this Annual Report on Form 10-K were prepared in accordance with GAAP, our management has concluded that our Financial

Statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with GAAP.

Plan for Remediation of Material Weakness

We have initiated remediation efforts designed to strengthen review and approval procedures for significant and non-standard transactions.

These remediation activities are ongoing.

Until such measures are fully implemented and operating effectively for a sufficient period, we cannot conclude that our disclosure controls and procedures are effective.

Attestation Report of Independent Registered Public Accounting Firm

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

2 unchanged sentences

Changes in Internal Control Over Financial Reporting

There have been no significant changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As discussed above, on November 14, 2025, we completed the Peak acquisition.

We are currently integrating the business and operations of Peak into our internal control over financial reporting.

In executing the integration, we are evaluating changes to controls and procedures related to Peak’s business and operations.

We have excluded the Peak acquisition from our assessment of internal control over financial reporting.

Except as described above and the material weakness identified, there have been no significant changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION.

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Nicola Maddox

Bryan Lawrence

Biographies of Corporate Directors and Executive Officers.

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He has worked in the energy industry since 1998 with a focus on upstream E&P.

Most recently he served as President and CEO of Merlon International, LLC, a privately held company with assets in the Western Desert of Egypt and US Gulf Coast which was sold in 2019 to a publicly listed UK company where he served as an advisor until 2021.

Previously, he served as CFO and ultimately President of privately held Merlon Petroleum Company, which had assets in the US Gulf Coast and Egypt and was sold in 2006.

Previously he served as President and CEO of Merlon International, LLC, a privately held company with assets in the Western Desert of Egypt and US Gulf Coast which was sold in 2019 to a publicly listed UK company where he served as an advisor until 2021.

Previous to that, he served as CFO and ultimately President of privately held Merlon Petroleum Company, which had assets in the US Gulf Coast and Egypt and was sold in 2006.

He has a BA in Economics from Williams College.

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He has also been a member of our Compensation, Nominating and Corporate Governance Committee, and Conflicts Committee since February 2019.

He is the founder of Westminster Advisors, a CEO advisory services company, and served as its Chief Executive Officer from January 2018.

He was previously employed by Resources Global Professionals, a large business consulting company, from

July 2001 to December 2016, and was the Chief Operating Officer the last three years.

He is the founder of Westminster Advisors, a CEO advisory services company, and served as its Chief Executive Officer from

January 2018.

He was previously employed by Resources Global Professionals, a large business consulting company, from July 2001 to December 2016, and was the Chief Operating Officer the last three years.

We believe that Mr.

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Maddox is qualified to serve as a member of our board of directors because of his significant industry experience in upstream oil and gas.

Vaughn is the founder of Peak E&P and has served as the Chairman of the board of directors and the Chief Executive Officer of Peak E&P since its formation in March 2011.

Vaughn has almost 50 years of experience in the exploration and production industry.

From 2002 to 2011, Mr.

Vaughn was the Chairman of the board of directors and Chief Executive Officer for three prior iterations of Peak E&P with projects in the Granite Wash in the Texas Panhandle, the Barnett Shale in the Ft.

Worth Basin, and in the Bakken Formation in the Williston Basin of North Dakota.

Prior to forming Peak E&P, Mr.

Vaughn served as the Vice President–Rocky Mountain Division for EnerVest Management Partners Ltd.

from 1996 to 2002.

Vaughn also managed a successful San Juan Basin coal bed methane project owned by an EnerVest Management Partners Ltd.

and GE Capital Oil & Gas partnership and later sold to Texaco Inc.

in November 2001.

Before that, Mr.

Vaughn was an Executive Project Manager for the Hillman Company Energy Group, where he managed the development of a successful CBM project in the San Juan Basin from 1989 to 2002.

Prior to that time, Mr.

Vaughn worked as a consultant in drilling and completion operations and project management throughout the Rockies, East Texas, and the Mid-Continent for a number of independents.

Vaughn started his career in 1968 with Amoco Oil Company.

Vaughn also served as member of the board of directors for Bonanza Creek Energy, Inc., the predecessor of Civitas Resources, Inc., from April 2017 until its acquisition by Civitas in April 2021.

Vaughn holds a B.S.

in Petroleum Engineering from the University of Texas at Austin.

Lawrence is the founder and managing member Yorktown Energy Partners, which for over 25 years has managed private equity partnerships that have made investments in companies engaged in the energy industry.

Lawrence was employed with the investment firm of Dillon, Read & Co.

(“ Dillon Read ”) from 1966 to 1997, serving most recently as a Managing Director until Dillon Read merged with SCB Warburg in September 1997.

Lawrence also serves as a director of the following publicly traded companies:

Ramaco Resources, Inc., Riley Exploration Permian, Inc., Hallador Energy Company and Kestrel Heat LLC, the general partner of Star Group, L.P., as well as other non-public companies in the energy industry in which Yorktown holds equity interests.

Lawrence is a graduate of Hamilton College and holds an M.B.A.

from Columbia University.

Corporate Governance Practices and Policies

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Lovoi is the Managing Partner of JVL Advisors, LLC, beneficial owner of 1.29% of our common shares and Chairman of the Board.

The Board held ten meetings during 2024 and eleven meetings during 2023.

The Board held eleven meetings during 2025 and ten meetings during 2024.

All Board meetings were conducted with open and candid discussions.

1 unchanged sentence

The members of the Board have the ability to meet on their own and are authorized to retain independent financial, legal and other experts as required whenever, in their opinion, matters come before the Board that require an independent analysis by the members of the Board.

intends to hold at least four regular meetings each year, as well as additional meetings as required.

The Board intends to hold at least four regular meetings each year, as well as additional meetings as required.

The Board has not established any required attendance levels for the Board and committee meetings.

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Board Diversity .

Our Compensation, Nominating and Corporate Governance Committee is responsible for reviewing with the board of directors, on an annual basis, the appropriate characteristics, skills and experience required

for the board of directors as a whole and its individual members.

In evaluating the suitability of individual candidates (both new candidates and current members), the nominating and corporate governance committee, in recommending candidates for election, and the board of directors, in approving (and, in the case of vacancies, appointing) such candidates, will take into account many factors, including the following:

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Compensation, Nominating and Corporate Governance Committee .

The Compensation, Nominating and Corporate Governance Committee is currently comprised of Tracy Stephens (Chairman), John Lovoi, and Nicola Maddox.

All members of this committee are independent directors.

The Compensation, Nominating and Corporate Governance Committee is currently comprised of Tracy Stephens (Chairman), John Lovoi, Nicola Maddox, Bryan Lawrence, and Jack Vaughn.

All members of this committee, with the exception of Bryan Lawrence and Jack Vaughn, are independent directors.

The Compensation, Nominating and Corporate Governance Committee’s mandate is to:

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Stabell was hired as our chief executive officer in July 2022.

His current base salary is $322,000.

2024—Share award of 88,889 common shares valued at $6.21 per share, market price on the grant date of December 31, 2024, which vests evenly over a three year period.

His 2025 base salary was $331,000.

2025—Share award of 166,736 common shares valued at $4.78 per share, the 30-day volume weighted average price ending on the grant date of December 31, 2025, which vests evenly over a three year period.

Share award of 20,007 dividend equivalent rights common shares valued at $4.64 per share, market price on the grant date of December 31, 2025, which vested immediately.

2024—Share award of 88,889 common shares valued at $6.21 per share, market price on the grant date of December 31, 2024, which vests evenly over a three year period.

Share award of 56,180 common shares valued at $5.34 per share, market price on the grant date of July 1, 2023.

This stub grant, although awarded in 2023, was based on 2022 performance.

The grant vests evenly over a three year period.

Henry Clanton was hired as our chief operating officer in January 2018.

His current base salary of $282,000.

2024—Share award of 26,409 common shares valued at $6.21 per share, market price on the grant date of December 31, 2024, which vest evenly over a three year period.

His 2025 base salary was $290,000.

2025—Share award of 49,582 common shares valued at $4.78 per share, the 30-day volume weighted average price ending on the grant date of December 31, 2025, which vests evenly over a three year period.

Share award of 2,946 dividend equivalent rights common shares valued at $4.64 per share, market price on the grant date of December 31, 2025, which vested immediately.

2024—Share award of 26,409 common shares valued at $6.21 per share, market price on the grant date of December 31, 2024, which vest evenly over a three year period.

Andrew Williamson was hired as our chief financial officer in July 2022.

His current base salary is $264,000.

2024—Share award of 35,588 valued at $6.21 per share, market price on the grant date of December 31, 2024, which grants vest evenly over a three year period.

His 2025 base salary was $271,000.

2025—Share award of 71,130 common shares valued at $4.78 per share, the 30-day volume weighted average price ending on the grant date of December 31, 2025, which vests evenly over a three year period.

Share award of 8,315 dividend equivalent rights common shares valued at $4.64 per share, market price on the grant date of December 31, 2025, which vested immediately.

2024—Share award of 35,588 valued at $6.21 per share, market price on the grant date of December 31, 2024, which grants vest evenly over a three year period.

Share award of 23,409 common shares valued at $5.34 per share, market price on the grant date of July 1, 2023.

This stub grant, although awarded in 2023, was based on 2022 performance.

The grant vests evenly over a three year period.

(4) As a Company policy, Epsilon matches on 401K contributions up to 5%.

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Additionally, Mr.

Stabell is eligible for equity awards in the discretion of the Compensation Committee, which in 2024 included 88,889 common shares valued at $6.21 per share (market price on the grant date of December 31, 2024), which vests evenly over a three year period, and in 2023 included 108,465 common shares valued at $5.08 per share (market price on the grant date of December 31, 2023), which vests evenly over a three year period.

Stabell is eligible for equity awards in the discretion of the Compensation Committee, which in 2025 included 166,736 common shares $4.78 per share (the 30-day volume weighted average price ending on the grant date of December 31, 2025) which vests evenly over a three year period, and in 2024 included 88,889 common shares valued at $6.21 per share (market price on the grant date of December 31, 2024), which vests evenly over a three year period.

Stabell is entitled to participate in all applicable Company benefit plans, programs, or arrangements that the Company may offer to its executives generally, from time to time, and as may be amended from time to time.

5 unchanged sentences

Additionally, Mr.

Clanton is eligible for equity awards in the discretion of the Compensation Committee, which in 2024 included 26,409 common shares valued at $6.21 per share (market price on the grant date of December 31, 2024), which vests evenly over a three year period, and in 2023 included 18,811 common shares valued at $5.08 per share (market price on the grant date of December 31, 2023), which vests evenly over a three year period.

Clanton is eligible for equity awards in the discretion of the Compensation Committee, which in 2025 included 49,582 common shares valued at $4.78 per share (the 30-day volume weighted average price ending on the grant date of December 31, 2025), which vests evenly over a three year period and in 2024 included 26,409 common shares valued at $6.21 per share (market price on the grant date of December 31, 2024), which vests evenly over a three year period.

Clanton is entitled to participate in all applicable Company benefit plans, programs, or arrangements that the Company may offer to its executives generally, from time to time, and as may be amended from time to time.

5 unchanged sentences

Additionally, Mr.

Williamson is eligible for equity awards in the discretion of the Compensation Committee, which in 2024 included 35,588 common shares valued at $6.21 per share (market price on the grant date of December 31, 2024), which vests evenly over a three year period, and in 2023 included 45,276 common shares valued at $5.08 per share (market price on the grant date of December 31, 2023), which vests evenly over a three year period.

Williamson is eligible for equity awards in the discretion of the Compensation Committee, which in 2025 included 71,130 common shares valued at $4.78 per share (the 30-day volume weighted average

price ending on the grant date of December 31, 2025), which vests evenly over a three year period and in 2024 included 35,588 common shares valued at $6.21 per share (market price on the grant date of December 31, 2024), which vests evenly over a three year period.

Williamson is entitled to participate in all applicable Company benefit plans, programs, or arrangements that the Company may offer to its executives generally, from time to time, and as may be amended from time to time.

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Incentive Plan Awards for Named Executive Officers

Outstanding Share-Based Awards and Option-Based Awards as of December 31, 2024 are as follows:

Outstanding Share Based Awards as of December 31, 2025 are as follows:

Share-based Awards

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On a quarterly basis, we compensate each director for services rendered (unless a director elects not to receive payment) and reimburse reasonable out-of-pocket travel expenses when incurred.

At this time, Bryan Lawrence does not receive any compensation and Jack Vaughn will not receive compensation until his one year severance payment is completed in November 2026

As of January 1, 2023, board member compensation is fixed at an annual fee of $55,000 paid in cash quarterly and $65,000 as a share-based award valued at the prior year-end share price (vesting evenly over a three year period).

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We maintain directors’ and officers’ liability insurance for the protection of our directors and officers against liability incurred by them in their capacities as our directors and officers.

The policy provides an aggregate limit of liability

of $30,000,000 with a retention held by the Company of $1,500,000.

The policy provides an aggregate limit of liability of $35,000,000 with a retention held by the Company of $1,500,000.

The current annual premium for the Directors’ and Officers’ liability insurance is approximately $350,000 and is re-bid annually.

7 unchanged sentences

5% Stockholders

Yorktown Energy Partners (1)

Solas Capital Management LLC (2)

Jumana Capital Investments LLC (2)

Named Executive Officers and Directors

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Nicola Maddox (10)

Bryan Lawrence (11)

Jack Vaughn (12)

All executive officers and directors as a group (10 persons)

Indicates beneficial ownership of less than 5% of outstanding shares.

(1) The address of Yorktown Energy Partners is 410 Park Avenue, 20 th Floor, New York, New York 10022.

Pursuant to a Schedule 13D filed with the SEC on November 14, 2025, Yorktown XI Associates LLC may be deemed to have voting and dispositive power with respect to these common shares.

This share total includes shares held by Yorktown Energy Partners IX, X and XI.

(2) The address of Solas Capital Management, LLC is 1063 Post Rd, 2 nd Floor, Darien, Connecticut 06820.

1 unchanged sentence

All of the securities reported are owned by advisory clients of Solas, none of which is a beneficial owner of more than 5% as of July 14, 2020.

(2) The address of Jumana Capital Investments LLC is 1717 St.

James Place, Suite 335, Houston, Texas 77056.

Christopher Martin is the managing of Jumana Capital and exercises the voting and dispositive power with respect to the common shares held by Jumana Capital.

Stabell is our chief executive officer and a member of our board of directors.

6 unchanged sentences

Maddox is a member of our board of directors.

Lawrence is a member of our board of directors and is the founder and managing member Yorktown Energy Partners.

Vaughn is a member of the board of directors.

Changes in Control.

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Independence of the Board of Directors

The Board is currently composed of five directors who provide us with a wide diversity of business experience.

The Board is currently composed of seven directors who provide us with a wide diversity of business experience.

Our Board has determined that John Lovoi, Tracy Stephens, Jason Stankowski, David Winn, and Nicola Maddox, are independent in accordance with the listing requirements of the NASDAQ Global Market, representing over 50% of the Board.

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We may advance funds to an Indemnified Person for the costs, charges and expenses of a proceeding;

Indemnified Person shall repay the moneys if such individual does not fulfill the Indemnification Conditions.

however, the Indemnified Person shall repay the moneys if such individual does not fulfill the Indemnification Conditions.

The indemnification may be made in connection with a derivative action only with court approval and only if the Indemnification Conditions are met.

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Consolidated Balance Sheets as of December 31, 2025 and December 31, 2024.

Consolidated Statements of Operations a nd Comprehensive Income for the years ended December 31, 2024 and December 31, 2023.

Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2025 and December 31, 2024.

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2025 and December 31, 2024.

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001-38770, filed on October 28, 2024)

Insider Trading Policy, updated November 13, 2024

Membership Interest Purchase Agreement dated August 11, 2025, among the Sellers party thereto, Peak Exploration & Production, LLC, Epsilon Energy USA, Inc., Epsilon Energy Ltd., and Yorktown Energy Partners XI, L.P.

(as Sellers’ Representative) (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated August 11, 2025)

Membership Interest Purchase Agreement dated August 11, 2025, among Yorktown Energy Partners XI, L.P., Peak BLM Lease LLC, Epsilon Energy USA, Inc., and Epsilon Energy Ltd.

(incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K dated August 11, 2025)

Insider Trading Policy (incorporated by reference to Exhibit 19.1 of Form 10-K, File No.

001-38770, filed on March 19, 2025)

Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of Form 10, File No.

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Consent of BDO USA, P.

Consent of Cawlie, Gillespie & Associates

Rule 13a-14(a)/15d-14(a) Certification.

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001-38770, filed on March 21, 2024)

Summary Reserve Report

Summary Reserve Report – DeGolyer and MacNaughton

Summary Reserve Report – Cawlie, Gillespie & Associates

Inline XBRL Instance Document.

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/s/ Jason Stabell

Chief Executive Officer and Director

Chief Executive Officer

March 27, 2026

1 unchanged sentence

(Principal Executive Officer)

Andrew Williamson

/s/ Andrew Williamson

Chief Financial Officer

3 unchanged sentences

/s/ John Lovoi

Chairman of the Board and Director

Chairman of the Board

March 27, 2026

10 unchanged sentences

Nicola Maddox

March 27, 2026

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures