v3.26.3
Restatement of Previously Issued Interim Condensed Consolidated Financial Statements (Unaudited)
12 Months Ended
Dec. 31, 2025
Summary of Significant Accounting Policies [Abstract]  
RESTATEMENT OF PREVIOUSLY ISSUED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 14 — RESTATEMENT OF PREVIOUSLY ISSUED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

The Company has received a series of comment letters (“Comment Letters”) from the staff (the “Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission (“SEC”). The Comment Letters included comments related to the Company’s accounting for non-controlling interest (“NCI”) for Class B Units of a subsidiary of the Company and the corresponding number of Class B Common Stock of the Company (collectively, referred to as the “Class B Equity”). The Company did not allocate its annual losses to the NCI because, among other things pursuant to the purchase agreement for the Company’s initial business combination and related transaction documents, the Class B Equity had “no economic” rights.

 

On February 24, 2026, the Audit Committee of the Board of Directors of the Company (the “Audit Committee”) determined, based on management’s recommendation and after consultation with CBIZ CPAs P.C., the Company’s independent registered public accounting firm, to modify the accounting methodology and allocate net income or loss to the NCI for Class B Equity from November 15, 2023, when the Class B Equity was issued, through February 2025, when the last of the Class B Equity was converted to Class A Common Stock of the Company. 

 

During the preparation of the Company’s 2025 consolidated financial statements, the Company determined that a side agreement executed in 2021 in connection with the sale of founders’ shares to the Company’s Chief Executive Officer contained a put right on the purchased shares of common stock. The Company did not account for this put right. The Company determined that this put right should be classified as a derivative liability and measured at fair value, and that the underlying shares of common stock should be accounted for as mezzanine equity.

 

In addition, the Company determined that the conversion options within the 2025 Convertible Notes and the White Lion Notes should be bifurcated as derivative liabilities and accounted for at fair value as further discussed in Note 8 above.

 

In addition, as previously reported in the Company’s September 30, 2025, 10Q filed on November 14, 2025, during the preparation of its financial statements for the nine months ended September 30, 2025, the Company determined the asset retirement obligation liability and related accretion of asset retirement obligation expenses incurred during three months ended March 31, 2025, three months ended June 30, 2025 and the six months ended June 30, 2025 was overstated due to an incorrect discount rate being used in the calculation. The Company also identified errors related to (i) the accounting for certain vendor invoices in the correct period which resulted in additional capitalized expenditures related to oil and gas operations, additional lease operating and general and administrative expenses, and corresponding changes to accounts payable and other accrued liabilities, (ii) incorrect recognition of royalties payable at the proper ownership interest and historical differentials, (iii) recognition of certain crude oil and natural gas sales in the wrong period, (iv) recognition of certain production taxes and lease operating expenses in the wrong period, (v) incorrect recognition of interest expense and gain on the settlement of liabilities during the third quarter of 2025, (vi) proper classification of capital expenditures related to oil and gas operations between prepaid expenditures and capitalized assets, (vii) improper recognition and classification of cash received for settlement of commodity derivatives, (viii) incorrect classification between current and long term assets of security deposits on oil and gas bonds and (ix) the related estimated tax impacts of the previously mentioned errors in its consolidated financial statements. Additionally, the Company identified an error in which it had incorrectly capitalized certain prepaid workover costs to Oil and Gas properties which had not yet actually been incurred.

The impact of the errors on the previously issued unaudited condensed consolidated financial statements is as follows:

 

   Three Months Ended March 31, 2025 
   As Reported   Adjustments   As Restated 
Revenues            
Natural gas and natural gas liquids  $139,532   $(59,500)  $80,032 
Total revenues   4,564,598    (59,500)   4,505,098 
                
Expenses               
Lease operating   1,921,321    269,446    2,190,767 
Accretion of asset retirement obligations   335,771    (328,779)   6,992 
General and administrative   2,084,545    (275,655)   1,808,890 
Total expenses   4,835,928    (334,988)   4,500,940 
Operating income (loss)   (271,330)   275,488    4,158 
Gain on extinguishment of liabilities   92,294    (484,113)   (391,819)
Change in fair value of derivative liabilities   
-
    (129,721)   (129,721)
Change in fair value of derivative liabilities - related party   
-
    113,000    113,000 
Other income   13,627    (13,426)   201 
Total other income (expense)   (2,251,286)   (514,260)   (2,765,546)
Income (loss) before income taxes   (2,522,616)   (238,772)   (2,761,388)
Income tax (provision) benefit   770,385    (65,516)   704,869 
Net income (loss)   (1,752,231)   (304,288)   (2,056,519)
Net income (loss) attributable to NCI   
-
    (28,535)   (28,535)
Net income (loss) attributable to Eon Resources, Inc.  $(1,752,231)  $(275,753)  $(2,027,984)
                
Weighted average share outstanding, common stock - basic and diluted   15,338,289    
-
    15,338,289 
Net income (loss) per share of common stock – basic and diluted  $(0.11)   (0.02)  $(0.13)

 

Condensed Consolidated Balance Sheet  As of March 31, 2025 
   As Reported   Adjustment   As Restated 
             
Crude oil and natural gas properties, successful efforts method:            
Proved Properties  $100,926,091   $(36,870)  $100,889,221 
Total oil and natural gas properties, net   98,069,791    (36,870)   98,032,921 
Total Assets  $103,860,046   $(36,870)  $103,823,176 
                
Accounts payable  $6,599,927   $(319,306)  $6,280,621 
Accrued liabilities and other   8,393,414    (130,614)   8,262,800 
Royalties payable   4,117,471    479,767    4,597,238 
Total current liabilities   33,707,812    29,847    33,737,659 
Asset retirement obligations   1,385,056    (328,779)   1,056,277 
Deferred tax liability   1,922,348    65,516    1,987,864 
Derivative liabilities   
-
    216,646    216,646 
Derivative liabilities, related parties   
-
    2,537,000    2,537,000 
Total for non-current liabilities   37,644,078    2,490,383    40,134,461 
Total liabilities   71,351,890    2,520,230    73,872,120 
                
Redeemable common stock   
-
    800,000    800,000 
                
Class A Common Stock   1,792    (40)   1,752 
Additional paid in capital   41,237,209    (402,772)   40,834,437 
Accumulated deficit   (29,951,259)   1,253,477    (28,697,782)
Total stockholders’ deficit attributable to EON Resources, Inc.   11,287,742    850,665    12,138,407 
Noncontrolling Interest   21,220,414    (4,207,765)   17,012,649 
Total Stockholders’ Equity   32,508,156    (3,357,100)   29,151,056 
Total Liabilities and Stockholders Equity  $103,860,046   $(36,870)  $103,823,176 
   Three Months Ended June 30, 2025 
   As Reported   Adjustments   As Restated 
Revenues            
Crude oil  $3,520,740   $74,402   $3,595,142 
Natural gas and natural gas liquids   67,840    (25,500)   42,340 
Total revenues   4,583,148    48,902    4,632,050 
                
Expenses               
Production taxes, transportation and processing   302,850    12,491    315,341 
Lease operating   1,993,454    365,588    2,359,042 
Accretion of asset retirement obligations   95,322    (86,809)   8,513 
General and administrative   1,941,044    (132,699)   1,808,345 
Total expenses   4,790,860    158,571    4,949,431 
Operating income (loss)   (207,712)   (109,669)   (317,381)
Gain on extinguishment of liabilities   207,307    (1,121,825)   (914,518)
Change in fair value of derivative liabilities   
-
    (755,558)   (755,558)
Change in fair value of derivative liabilities - related party   
-
    449,000    449,000 
Interest expense   (1,678,538)   28,882    (1,649,656)
Other income   281,715    (281,715)   
-
 
Total other income (expense)   (1,491,511)   (1,681,216)   (3,172,727)
Income (loss) before income taxes   (1,699,223)   (1,790,885)   (3,490,108)
Income tax (provision) benefit   398,744    135,515    534,259 
Net income (loss)   (1,300,479)   (1,655,370)   (2,955,849)
Net income (loss) attributable to Eon Resources, Inc.  $(1,300,479)  $(1,655,370)  $(2,955,849)
                
Weighted average share outstanding, common stock - basic and diluted   22,575,043    
-
    22,575,043 
Net income (loss) per share of common stock – basic and diluted  $(0.06)   (0.07)  $(0.13)

 

   Six Months Ended June 30, 2025 
   As Reported   Adjustments   As Restated 
Revenues            
Crude oil  $7,913,345   $74,402   $7,987,747 
Natural gas and natural gas liquids   207,372    (85,000)   122,372 
Total revenues   9,147,746    (10,598)   9,137,148 
                
Expenses               
Production taxes, transportation and processing   700,066    12,491    712,557 
Lease operating   3,914,775    635,034    4,549,809 
Accretion of asset retirement obligations   251,538    (236,033)   15,505 
General and administrative   4,025,589    (408,354)   3,617,235 
Total expenses   9,447,233    3,138    9,450,371 
Operating income (loss)   (299,487)   (13,736)   (313,223)
Gain on extinguishment of liabilities   299,601    (1,605,938)   (1,306,337)
Change in fair value of derivative liabilities   
-
    (885,279)   (885,279)
Change in fair value of derivative liabilities - related party   
-
    562,000    562,000 
Interest expense   (3,422,784)   28,882    (3,393,902)
Other income   295,342    (295,141)   201 
Total other income (expense)   (3,742,797)   (2,195,476)   (5,938,273)
Income (loss) before income taxes   (4,042,284)   (2,209,212)   (6,251,496)
Income tax (provision) benefit   1,169,129    69,999    1,239,128 
Net income (loss)   (2,873,155)   (2,139,213)   (5,012,368)
Net income (loss) attributable to NCI   
-
    (28,535)   (28,535)
Net income (loss) attributable to Eon Resources, Inc.  $(2,873,155)  $(2,110,678)  $(4,983,833)
                
Weighted average share outstanding, common stock - basic and diluted   18,809,177    
-
    18,809,177 
Net income (loss) per share of common stock – basic and diluted  $(0.15)   (0.11)  $(0.26)
Condensed Consolidated Balance Sheet  As of June 30, 2025 
   As Reported   Adjustment   As Restated 
             
Accounts receivable – Crude Oil and natural gas sales  $1,433,262   $74,402   $1,507,664 
Prepaid expenses and other current assets   488,183    861,056    1,349,239 
Total current Assets   5,875,645    935,458    6,811,103 
Crude oil and natural gas properties, successful efforts method:               
Proved Properties   103,382,842    (1,043,485)   102,339,357 
Total oil and natural gas properties, net   100,068,351    (1,043,485)   99,024,866 
Other noncurrent asset   
-
    213,750    213,750 
Total Assets  $105,963,996   $105,723   $106,069,719 
                
Accounts payable  $6,279,528   $(357,729)  $5,921,799 
Accrued liabilities and other   9,118,446    442,584    9,561,030 
Royalties payable   4,434,575    536,896    4,971,471 
Total current liabilities   27,607,625    621,751    28,229,376 
Asset retirement obligations   1,430,899    (236,033)   1,194,866 
Deferred tax liability   1,523,603    (69,999)   1,453,604 
Derivative liabilities   
-
    728,582    728,582 
Derivative liabilities, related parties   
-
    2,088,000    2,088,000 
Total for non-current liabilities   40,139,959    2,510,550    42,650,509 
Total Liabilities   67,747,584    3,132,301    70,879,885 
                
Redeemable common stock   
-
    800,000    800,000 
                
Class A Common Stock   3,435    (40)   3,395 
Additional paid in capital   48,064,746    962,675    49,027,421 
Accumulated deficit   (31,072,183)   (581,448)   (31,653,631)
Total stockholders’ deficit attributable to EON Resources, Inc.   16,995,998    381,187    17,377,185 
Noncontrolling Interest   21,220,414    (4,207,765)   17,012,649 
Total Stockholders’ Equity   38,216,412    (3,826,578)   34,389,834 
Total Liabilities and Stockholders Equity  $105,963,996   $105,723   $106,069,719 

 

   Three Months Ended September 30, 2025 
   As Reported   Adjustments   As Restated 
Revenues            
Crude Oil  $4,351,800   $(117,945)  $4,233,855 
Natural gas and natural gas liquids   132,466    (26,832)   105,634 
Total revenues   4,364,341    (144,777)   4,219,564 
                
Expenses               
Production taxes, transportation and processing   435,539    (12,491)   423,048 
Lease operating   2,545,969    203,248    2,749,217 
General and administrative   2,591,296    54,001    2,645,297 
Total expenses   6,129,063    244,758    6,373,821 
Operating loss   (1,764,722)   (389,535)   (2,154,257)
Amortization of financing costs   (399,697)   (21,526)   (421,223)
Change in fair value of derivative liabilities   
-
    (779,187)   (779,187)
Change in fair value of derivative liabilities - related party   
-
    (563,000)   (563,000)
Interest expense   (1,220,390)   (67,329)   (1,287,719)
Gain on extinguishment of liabilities   1,846,684    (19,481)   1,827,203 
Total other income (expense)   13,650,069    (1,450,523)   12,199,546 
Income (loss) before income taxes   11,885,347    (1,840,058)   10,045,289 
Income tax (provision) benefit   (6,260,472)   178,606    (6,081,866)
Net income (loss)   5,624,875    (1,661,452)   3,963,423 
Net income (loss) attributable to Eon Resources, Inc.  $5,624,875   $(1,661,452)  $3,963,423 
                
Weighted average share outstanding, common stock – basic   38,073,390    
-
    38,073,390 
Weighted average share outstanding, common stock - diluted   54,964,640    
-
    54,964,640 
Net income (loss) per share of common stock – basic  $0.15    (0.05)  $0.10 
Net income (loss) per share of common stock –diluted  $0.10    (0.03)  $0.07 
   Nine Months Ended September 30, 2025 
   As Reported   Adjustments   As Restated 
Revenues            
Crude Oil  $12,265,145   $(43,543)  $12,221,602 
Natural gas and natural gas liquids   339,838    (111,832)   228,006 
Total revenues   13,512,087    (155,375)   13,356,712 
                
Expenses               
Lease operating expenses   6,460,744    838,282    7,299,026 
General and administrative   6,616,885    (354,353)   6,262,532 
Total Expenses   15,340,263    483,929    15,824,192 
Operating loss   (1,828,176)   (639,304)   (2,467,480)
Gain on extinguishment of liabilities   2,146,285    (1,625,419)   520,866 
Amortization of financing costs   (1,069,514)   (21,526)   (1,091,040)
Change in fair value of derivative liabilities   
-
    (1,664,466)   (1,664,466)
Change in fair value of derivative liabilities - related party   
-
    (1,000)   (1,000)
Interest expense   (4,643,174)   (38,447)   (4,681,621)
Other income   295,342    (295,141)   201 
Total other income (expense)   9,907,272    (3,645,999)   6,261,273 
Income (loss) before income taxes   8,079,096    (4,285,303)   3,793,793 
Income tax (provision) benefit   (5,091,343)   248,605    (4,842,738)
Net income (loss)   2,987,753    (4,036,698)   (1,048,945)
Net income (loss) attributable to NCI   
-
    (28,535)   (28,535)
Net income (loss) attributable to Eon Resources, Inc.  $2,987,753   $(4,008,163)  $(1,020,410)
                
Weighted average share outstanding, common stock - basic   25,301,146    
-
    25,301,146 
Weighted average share outstanding, common stock - diluted   47,789,972    (22,488,826)   25,301,146 
Net income (loss) per share of common stock – basic  $0.12    (0.16)  $(0.04)
Net income (loss) per share of common stock – diluted  $0.07    (0.11)  $(0.04)

 

Condensed Consolidated Balance Sheet  As of September 30, 2025 
   As Reported   Adjustment   As Restated 
             
Prepaid expenses and other current assets  $2,631,633   $(1,136,594)  $1,495,039 
Total current Assets   5,317,897    (1,136,594)   4,181,303 
Crude oil and natural gas properties, successful efforts method:               
Proved Properties   87,041,010    7,672    87,048,682 
Total oil and natural gas properties, net   84,177,401    7,672    84,185,073 
Other noncurrent assets   
-
    1,630,000    1,630,000 
Total Assets  $89,515,298   $501,078   $90,016,376 
                
Accounts payable  $5,859,332   $(190,232)  $5,669,100 
Accrued liabilities and other   3,911,147    1,037,318    4,948,465 
Royalties payable   4,023,291    601,491    4,624,782 
Total current liabilities   15,258,502    1,448,577    16,707,079 
Convertible note liability, net of discount   4,392,087    (150,035)   4,242,052 
Deferred tax liability   7,067,245    (248,605)   6,818,640 
Derivative liabilities   
-
    808,133    808,133 
Derivative liabilities, related parties   
-
    2,651,000    2,651,000 
Total for non-current liabilities   13,358,587    3,060,493    16,419,080 
Total Liabilities   28,617,089    4,509,070    33,126,159 
                
Redeemable common stock   
-
    800,000    800,000 
                
Class A Common Stock   4,503    (40)   4,463 
Additional paid in capital   86,104,981    (2,329,019)   83,775,962 
Accumulated deficit   (25,211,275)   (2,478,933)   (27,690,208)
Total stockholders’ deficit attributable to EON Resources, Inc.   60,898,209    (4,807,992)   56,090,217 
Total Stockholders’ Equity   60,898,209    (4,807,992)   56,090,217 
Total Liabilities and Stockholders Equity  $89,515,298   $501,078   $90,016,376