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Divestiture of Wholly Owned Subsidiaries
 9 Months Ended
Sep. 30, 2025
Investments in and Advances to Affiliates [Abstract]  
Divestiture of Wholly Owned Subsidiaries

Note 2. Divestiture of Wholly Owned Subsidiaries

 

On July 30, 2025, the Company completed the divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC (together, the “divested entities”), two indirectly wholly owned subsidiaries (which were acquired by the Company in October 2024), pursuant to a Membership Interest Purchase Agreement (the “Purchase Agreement”) entered into with Jorgan Development, LLC (“Jorgan”). Under the Purchase Agreement, the Company sold all of the issued and outstanding membership interests in the divested entities. The divested entities were non-core subsidiaries, primarily engaged in the transportation of oilfield-produced water and related equipment leasing, activities that did not align with the Company’s strategic focus. The purchase price consisted of the Company’s Series A Convertible Preferred Stock, with a stated value of $10,058,235 which was returned to the Company, retired, and is no longer outstanding or entitled to dividends.

 

Because the entities are under common control, we did not record a gain on the sale. The consideration received for the divestiture of the businesses consisted solely of the return of 11,058 shares of the Company’s Series A Preferred Stock.

 

The amounts related to the transactions were as follows:

 

       
Net consideration received:        
Return of 11,058 shares of the Company’s Series A Preferred Stock   $ 10,814,449  
         
Less: assets transferred        
Cash     (746,059 )
Accounts receivable     (2,713,866 )
Prepaid expenses     (20,172 )
Inventories     (21,547 )
Property and equipment, net     (28,232,430 )
Right of use assets - operating leases     (1,977,356 )
Other assets     (5,160,272 )
Goodwill     (28,316,081 )
Plus: liabilities transferred        
Accounts payable and accrued expenses     15,083,979  
Operating lease liabilities     1,639,601  
Finance lease liabilities     6,401,565  
Loans and notes payable     40,199,687  
Total net assets transferred     (3,862,951 )
         
Excess of consideration received over net assets transferred, recorded to additional paid in capital   $ 6,901,498