What changed in this filing

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Item 1A. Risk Factors

2026-03-11 compared with 2025-03-10 · 155 added, 153 removed, 778 unchanged (28% of the section changed)

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HighPeak Energy’s development projects and acquisitions will require substantial capital expenditures.

HighPeak Energy may be unable to obtain required capital or financing on satisfactory terms, including as a result of recent increases in cost of capital resulting from Federal Reserve policies or otherwise, which could reduce its ability to access or increase production and reserves.

HighPeak Energy may be unable to obtain required capital or financing on satisfactory terms, including as a result of increases in cost of capital resulting from Federal Reserve policies or otherwise, which could reduce its ability to access or increase production and reserves.

Restrictions in the Term Loan Credit Agreement, the Senior Credit Facility Agreement and any future debt agreements could limit HighPeak Energy’s growth and ability to engage in certain activities.

Our ability to repurchase shares under our share repurchase program is subject to certain considerations, and any share repurchases thereunder could increase the volatility of our stock prices and could diminish our cash reserves.

A failure to comply with the obligations contained in such agreements governing our indebtedness could result in an event of default under such agreement, which could permit acceleration of the related debt, enforcement against any liens securing the related debt and acceleration of debt under other instruments that contain cross acceleration or cross default provisions.

We may not have, or may not be able to obtain, sufficient funds to make any required accelerated payments.

Our existing and future indebtedness may adversely affect our cash flows and ability to operate our business, remain in compliance and repay our debt.

Our results of operations and cash flows vary significantly from year to year due to the cyclical nature of the crude oil and natural gas industry.

HighPeak Energy experiences periods of higher costs as commodity prices have risen and inflation may adversely affect our operating results, which negatively impacts our profitability, cash flow and ability to complete development activities as planned.

HighPeak Energy experiences periods of higher costs when commodity prices rise and inflation may adversely affect our operating results, which negatively impacts our profitability, cash flow and ability to complete development activities as planned.

Continuing or worsening inflationary issues and associated changes in monetary policy, including tariffs, have resulted in and may result in additional increases to the cost of our goods, services and personnel, which in turn could cause our capital expenditures and operating costs to rise.

Volatility in the political, legal and regulatory environment as a result of the change in U.S.

presidential administration and political instability or armed conflict in crude oil or natural gas producing regions, such as the ongoing war between Russia and Ukraine, the Israel-Hamas conflict and OPEC+ policy decisions could have a material adverse impact on our business, financial condition or future results.

Volatility in the political, legal and regulatory environment as a result of the U.S.

presidential administration and political instability or armed conflict in crude oil or natural gas producing regions, such as the ongoing war between Russia and Ukraine, conflicts in the Middle East, U.S.

intervention in Venezuela and OPEC+ policy decisions could have a material adverse impact on our business, financial condition or future results.

The marketability of HighPeak Energy’s production is dependent upon transportation, storage and other facilities, certain of which it does not control.

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Certain factors could require HighPeak Energy to shut-in production or cease its capital expenditure program.

Certain of the undeveloped leasehold acreage of HighPeak Energy’s assets is subject to leases that will expire over the next several years unless production is established on units containing the acreage or the leases are renewed.

Certain factors could require HighPeak Energy to write-down the carrying values of its crude oil and natural gas properties, including commodity prices decreasing to a level such that future undiscounted cash flows from its properties are less than their carrying value.

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HighPeak Energy may be unable to make additional attractive acquisitions or successfully integrate acquired businesses with its current assets, and any inability to do so may disrupt its business and hinder its ability to grow.

The unavailability or high cost of drilling rigs, equipment, supplies, personnel, frac crews and oilfield services due to commodity price volatility or supply constraints as a result of the conflict in Ukraine, the Israel-Hamas conflict, elevated interest rates and associated policies of the Federal Reserve could adversely affect HighPeak Energy’s ability to execute its development plans within its budget and on a timely basis and consequently could materially and adversely affect our cash flows and results of operations.

The IRA 2022 could accelerate the transition to a low carbon economy and could impose new costs on our operations.

intervention in Venezuela, elevated interest rates and associated policies of the Federal Reserve could adversely affect HighPeak Energy’s ability to execute its development plans within its budget and on a timely basis and consequently could materially and adversely affect our cash flows and results of operations.

HighPeak Energy may be involved in legal proceedings that could result in substantial liabilities.

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Unanticipated changes in effective tax rates or laws or adverse outcomes resulting from examination of HighPeak Energy’s income or other tax returns could adversely affect HighPeak Energy’s financial condition, results of operations and cash flow.

HighPeak Energy is an emerging growth company within the meaning of the Securities Act, and if HighPeak Energy takes advantage of certain exemptions from disclosure requirements available to emerging growth companies, which could make HighPeak Energy’s common stock less attractive to investors and may make it more difficult to compare its performance with other public companies.

Risks Related to Our Business

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The prices HighPeak Energy receives for its crude oil, NGL and natural gas production heavily influence its revenue, profitability, access to capital, future rate of growth and the carrying value of its properties.

The markets for crude oil and natural gas have been volatile historically and are likely to remain volatile in the future.

For example, during the period from January 1, 2021 through December 31, 2024, the calendar month average NYMEX WTI crude oil price per Bbl ranged from a low of $52.10 to a high of $114.34, and the last trading day NYMEX natural gas price per MMBtu ranged from a low of $1.58 to a high of $9.35.

One of the factors which caused the fall in prices was OPEC+ being unable to reach an agreement on production levels for crude oil, which resulted in Saudi Arabia and Russia initiating efforts to increase production.

The convergence of these events, along with the significantly reduced demand because of the COVID-19 pandemic, created an unprecedented global crude oil and natural gas supply and demand imbalance, reduced global crude oil and natural gas storage capacity, caused crude oil and natural gas prices to decline significantly and resulted in continued volatility in crude oil, NGL and natural gas prices.

Prices have recovered to pre-pandemic levels, with the calendar month average NYMEX WTI crude oil price of $71.69 per Bbl and the last trading day NYMEX natural gas price of $3.43 per MMBtu for the month of December 2024.

However, there can be no certainty that commodity prices will sustain at these levels or continue to increase.

In addition, the incoming U.S.

presidential administration has signaled it will encourage increased domestic production of crude oil, which could lead to falling crude oil, NGL and natural gas prices.

The markets for crude oil and natural gas have been volatile historically, including periods of rapid and material decline in recent years, and are likely to remain volatile in the future.

Likewise, NGL, which are made up of ethane, propane, isobutane, normal butane and natural gasoline, each of which has different uses and pricing characteristics, have also fluctuated widely during this period.

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the price and quantity of foreign imports of crude oil, NGL and natural gas;

domestic and global political and economic conditions, such as the change in U.S.

presidential administration, the ongoing conflict in Ukraine, the Israel-Hamas conflict, socio-political unrest and instability, terrorism or hostilities in or affecting other producing regions or countries, including the Middle East, Africa, South America and Russia;

the occurrence or threat of epidemic or pandemic diseases, such as COVID-19, or any government response to such occurrence or threat;

domestic and global political and economic conditions, such as changes in U.S.

energy policy, the ongoing war between Russia and Ukraine, conflicts in the Middle East, U.S.

intervention in Venezuela, socio-political unrest and instability, terrorism or hostilities in or affecting other producing regions or countries, including the Middle East, Africa, South America and Russia;

the occurrence or threat of epidemic or pandemic diseases, or any government response to such occurrence or threat;

actions of OPEC, its members and other state-controlled crude oil companies relating to crude oil price and production controls;

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technological advances affecting energy consumption;

the price and availability of alternative fuels, including the potential acceleration of the development of alternative fuels as a result of the IRA 2022 or otherwise;

the price and availability of alternative fuels, including the potential acceleration of the development of alternative fuels;

expectations about future commodity prices;

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There is current uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs and we cannot predict whether, and to what extent, U.S.

trade policies will change in the future, including as a result of changes by the incoming U.S.

trade policies will change in the future, including as a result of changes by the U.S.

presidential administration.

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HighPeak Energy ’ s development projects and acquisitions will require substantial capital expenditures.

HighPeak Energy may be unable to obtain required capital or financing on satisfactory terms, including as a result of recent increases in the cost of capital resulting from Federal Reserve policies or otherwise, which could reduce its ability to access or increase production and reserves.

HighPeak Energy may be unable to obtain required capital or financing on satisfactory terms, including as a result of increases in the cost of capital resulting from Federal Reserve policies or otherwise, which could reduce its ability to access or increase production and reserves.

The crude oil and natural gas industry is capital-intensive.

HighPeak Energy has evaluated multiple development scenarios under multiple potential commodity price assumptions.

Under its current 2025 development program, HighPeak Energy would expect to incur approximately $375 to $405 million of capital expenditures for drilling, completion, facilities and equipping costs, $40 - $50 million for field infrastructure, land and other costs and $33 - $35 million on one-time infrastructure expenditures.

Under its current 2026 development program, HighPeak Energy would expect to incur approximately $255 to $285 million of capital expenditures for drilling, completion, facilities and equipping costs, field infrastructure and other costs, excluding acquisitions.

The ability to make these capital expenditures will be highly dependent on the price of crude oil and available funding of HighPeak Energy.

Commodity prices have recovered, with the calendar month average NYMEX WTI price of $71.69 per Bbl and last trading day NYMEX natural gas price of $3.43 per MMBtu for the month of December 2024.

HighPeak Energy ran a two-rig program for the majority of 2024.

HighPeak Energy expects to average two (2) drilling rigs and one (1) frac crew during 2025.

However, HighPeak Energy recognizes that commodity prices remain highly volatile and that its liquidity is limited, and as a result, there is no certainty that HighPeak Energy will operate a two (2) rig development program in the future.

Commodity prices have fallen, with the calendar month average NYMEX WTI price of $57.87 per Bbl and last trading day NYMEX natural gas price of $4.424 per MMBtu for the month of December 2025.

HighPeak Energy ran a one to two-rig, one frac crew program for the majority of 2025.

HighPeak Energy expects to average one (1) drilling rig and one (1) frac crew during 2026 depending on certain market conditions.

HighPeak Energy expects to fund its forecasted capital expenditures with cash on its balance sheet, cash generated by operations, through borrowings under the Senior Credit Facility Agreement if needed and, depending on market circumstances, potential future debt or equity offerings.

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The availability and cost of these capital sources is cyclical, and these capital sources may not remain available, or we may not be able to obtain financing at a reasonable cost in the future.

For example, due to the high levels of inflation in the U.S., the Federal Reserve and other central banks increased interest rates multiple times in 2022 and 2023, and began decreasing rates with three rate cuts toward the end of 2024 and although the Federal Reserve has indicated that such decreases should continue in 2025, uncertainty remains as to when or if such elevated rates may be decreased further.

For example, due to the high levels of inflation in the U.S., the Federal Reserve and other central banks increased interest rates multiple times in 2022 and 2023, and began decreasing rates with three rate cuts toward the end of 2024 followed by three rate cuts in 2025 and although the Federal Reserve has indicated that such decreases should continue in 2026, uncertainty remains as to when or if such elevated rates may be decreased further.

Such increased interest rates have increased the cost of capital and may prevent us from being able to obtain debt financing at favorable rates, or at all, which would materially impact our operations.

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HighPeak Energy’s ability to obtain additional debt financing, including increases to the Term Loan Credit Agreement or the Senior Credit Facility Agreement;

the duration and scope of the ongoing war between Russia and Ukraine and conflict in the Middle East, including between Israel and Hamas;

the duration and scope of the ongoing war between Russia and Ukraine, conflicts in the Middle East and U.S.

intervention in Venezuela;

HighPeak Energy’s ability to obtain storage capacity for the crude oil it produces;

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Restrictions in the Term Loan Credit Agreement, the Senior Credit Facility Agreement and any future debt agreements could limit HighPeak Energy ’ s growth and ability to engage in certain activities.

We may not have, or may not be able to obtain, sufficient funds to make any required accelerated payments.

The terms and conditions governing the Term Loan Credit Agreement, the Senior Credit Facility Agreement and any future additional indebtedness are expected to:

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If market or other economic conditions deteriorate, HighPeak Energy’s ability to comply with these covenants may be impaired.

Effective as of December 30, 2025, in order to ensure continued compliance with the financial covenants under the Term Loan Credit Agreement and the Senior Credit Facility Agreement, the Company has entered into the Second Term Loan Amendment and the Third Facility Amendment whereby, among other things, (i) the Company will be required to maintain an asset coverage ratio of not less than 1.00 to 1.00 for the Fourth Quarter of 2025 and the First Quarter of 2026, representing a 0.25x decrease in the required ratio levels for such quarters, (ii) the Company will be required to maintain a total net leverage ratio of not greater than 2.50 to 1.00 for the Fourth Quarter of 2025 and the First Quarter of 2026, representing a 0.50x increase in the required ratio levels for such quarters, (iii) the Company’s hedging obligations will be increased requiring it to maintain hedging agreements with respect to 75% of its proved developed producing oil production for the period from April 1, 2026 to March 31, 2027 and 60% of its proved developed producing oil production for the period from April 1, 2027 to September 30, 2027, in each case as provided in the January 1, 2026 reserve report and (iv) the Company will be prohibited from making quarterly dividends on its common stock until September 30, 2026.

For the Second Quarter of 2026 and quarterly periods ending thereafter, the required asset coverage ratio and total net leverage ratio levels will reset to the levels in effect for such quarters prior to these amendments.

It is uncertain whether the Company will be able to comply with these covenants, in particular beginning in the Second Quarter of 2026 when the required asset coverage ratio and total net leverage ratio levels will reset to the prior more stringent levels.

The Company has already taken steps to improve these ratios, including, but not limited to, suspending the payment of dividends and reducing capital expenditures, and in connection with any potential or anticipated covenant shortfalls, the Company may seek to take other action such as raising additional capital through debt or equity offerings, selling assets, reducing capital expenditures further, obtaining additional amendments or waivers from its lenders, or pursuing other strategic alternatives.

There can be no assurance that any such measures will be available on acceptable terms, or at all, or that they will be sufficient to address any covenant compliance issues.

Any failure of the Company to comply with its financial covenants would result in an event of default under the Term Loan Credit Agreement and Senior Credit Facility Agreement, entitling the lenders to accelerate amounts outstanding thereunder.

HighPeak Energy cannot be certain that its cash flow will be sufficient to enable it to pay the principal and interest on its debt and meet its other obligations.

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The Term Loan Credit Agreement also limits the amounts HighPeak Energy can borrow under the Senior Credit Facility Agreement to $100.0 million.

Our ability to repurchase shares under our recently announced share repurchase program is subject to certain considerations, and any share repurchases thereunder could increase the volatility of our stock prices and could diminish our cash reserves.

On March 6, 2025, the Board extended the expiration date of the prior repurchase program of up to $75 million of the Company’s common stock that was originally authorized by the Board in February 2024 (the “2024 Repurchase Program”).

The extension did not alter the terms of the 2024 Repurchase Program, did not increase the total amount under the program and does not obligate HighPeak to repurchase any specific dollar amount or to acquire any specific number of shares and will depend upon, among other things, our earnings, liquidity, capital requirements, financial condition and other factors deemed relevant by our board of directors.

Additionally, our Term Loan Credit Agreement limits our ability to repurchase shares of our common stock.

Further, our share repurchases could affect our share trading prices, increase their volatility, reduce our cash reserves and may be suspended or terminated at any time, which may result in a decrease in the trading prices of our stock.

Our Board of Directors may amend or suspend the share repurchase program at any time in its discretion.

We can provide no assurances that we will repurchase shares of our common stock within the authorized amount or at all.

Our existing and future indebtedness may adversely affect our cash flows and ability to operate our business, remain in compliance and repay our debt.

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HighPeak Energy experiences periods of higher costs when commodity prices rise and inflation may adversely affect our operating results, which could negatively impact our profitability, cash flow and ability to complete development activities as planned.

Continuing or worsening inflationary issues and associated changes in monetary policy have resulted in and may result in additional increases to the cost of our goods, services and personnel, which in turn could cause our capital expenditures and operating costs to rise.

Historically, capital and operating costs have risen during periods of increasing crude oil, NGL and natural gas prices.

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A high rate of inflation may have an adverse effect on HighPeak Energy’s operating results and this impact may be magnified to the extent that HighPeak Energy’s ability to participate in the commodity price increases is limited by its derivative activities, if any.

Elevated inflation rates throughout 2023 and 2024 and inflationary pressures have resulted in and may result in additional increases to the costs of our oilfield goods, services and personnel, which would in turn cause our capital expenditures and operating costs to rise.

Due to the high levels of inflation in the U.S., the Federal Reserve and other central banks increased interest rates multiple times in 2022 and 2023, and began decreasing rates with three rate cuts toward the end of 2024 and although the Federal Reserve has indicated that such decreases could continue into 2025, uncertainty remains as to when or if such elevated rates may be decreased further.

Elevated inflation rates throughout 2023 and 2024 and inflationary pressures have resulted in and may continue to result in additional increases to the costs of our oilfield goods, services and personnel, which would in turn cause our capital expenditures and operating costs to rise.

Although the Federal Reserve has paused rate cuts beginning in 2026, uncertainty remains as to when or if such elevated rates may be decreased further.

To the extent rates remain high, this could have the effects of raising the cost of capital and depressing economic growth, either of which—or the combination thereof—could hurt the financial and operating results of our business.

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We cannot predict any future trends in the rate of inflation, and a significant increase in inflation, to the extent we are unable to recover higher costs through higher crude oil and natural gas prices and revenues, would negatively impact our business, financial condition and results of operations.

Volatility in the political, legal and regulatory environments as a result of the change in U.S.

Our business, financial condition and future results are subject to political and economic risks and uncertainties, including volatility in the political, legal and regulatory environments as a result of the change in U.S.

presidential administration and instability resulting from civil unrest, political demonstrations, mass strikes or armed conflict or other crises in crude oil or natural gas producing areas such as the ongoing war between Russia and Ukraine and the Israel-Hamas conflict.

Volatility in the political, legal and regulatory environments as a result of the U.S.

intervention in Venezuela and OPEC+ policy decisions could have a material adverse impact on our business, financial condition or future results.

intervention in Venezuela.

The United States and other countries and certain international organizations have imposed broad-ranging and severe economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response, and additional sanctions may be imposed in the future.

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The length, impact, and outcome of the ongoing war between Russia and Ukraine is highly unpredictable, and such events or any further hostilities in Ukraine or elsewhere could severely impact the world economy and may adversely affect our financial condition.

Furthermore, escalations of the Israel-Hamas conflict may result in heightened geopolitical risks for crude oil and natural gas markets, given the significant share of global oil supply in the Middle East.

Furthermore, conflicts in the Middle East may result in heightened geopolitical risks for crude oil and natural gas markets, given the significant share of global oil supply in the Middle East.

While the Company does not have operations overseas, these conflicts elevate the likelihood of supply chain disruptions, heightened volatility in crude oil and natural gas prices and negative effects on our ability to raise additional capital when required and could have a material adverse impact on our business, financial condition or future results.

Currently, global crude oil inventories are low relative to historical levels and supply from OPEC+ and other crude oil producing nations are not expected to be sufficient to meet forecasted crude oil demand growth for the next few years.

It is believed that many OPEC+ countries will be unable to increase their production levels or even produce at expected levels due to their lack of capital investments in developing incremental crude oil supplies over the past few years.

In December 2024, OPEC+ postponed planned reductions of 2.2 million Bopd of oil production until April 2025, due to a slowdown in global demand and rising output surrounding the global economic and crude oil market outlooks.

Currently, it is believed that many OPEC+ countries will be unable to increase their production levels or even produce at expected levels due to their lack of capital investments in developing incremental crude oil supplies over the past few years.

In the first quarter of 2026, OPEC+ agreed to slight production increases to help mitigate the impact on crude oil prices of disrupted shipments in the Middle East, after pausing production increases due to a slowdown in global demand and rising output surrounding the global economic and crude oil market outlooks.

Furthermore, sanctions and import bans on Russian crude oil have been implemented by various countries in response to the war in Ukraine, further impacting global crude oil supply.

Still, crude oil and natural gas prices have declined from the highs experienced in second quarter of 2022 and could decrease or increase with any changes in demand due to, among other things, uncertainty and volatility from global supply chain disruptions attributable to the pandemic, the ongoing conflict in Ukraine, the Israel-Hamas conflict, international sanctions, speculation as to future actions by OPEC+, increasing inflation and government efforts to reduce inflation, and possible changes in the overall health of the global economy, including a prolonged recession.

intervention in Venezuela, international sanctions, speculation as to future actions by OPEC+, increasing inflation and government efforts to reduce inflation, and possible changes in the overall health of the global economy, including a prolonged recession.

Further, the volatility in crude oil and natural gas prices could accelerate a transition away from fossil fuels, resulting in reduced demand over the longer term.

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Certain factors could require HighPeak Energy to shut-in production or cease its capital expenditure program.

During 2020, the reduction in global demand caused by COVID-19, coupled with the actions of foreign crude oil producers such as Saudi Arabia and Russia, materially decreased global crude oil prices and generated a surplus of crude oil.

During 2020, a reduction in global demand, coupled with the actions of foreign crude oil producers such as Saudi Arabia and Russia, materially decreased global crude oil prices and generated a surplus of crude oil.

This significant surplus created a saturation of storage and caused imminent crude storage constraints, which led to, and in the future may further lead to the shut-in of production of our wells due to the lack of sufficient markets or the lack of availability and capacity of processing, gathering, storing and transportation systems.

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Cost increases necessary to bring wells back online may be significant enough that such wells would become uneconomic at low commodity price levels, which may lead to decreases in HighPeak Energy’s proved reserve estimates and potential impairments and associated charges to its earnings.

As of December 31, 2024, HighPeak Energy was running a two-rig program and expects to average two (2) drilling rigs and approximately one (1) frac crew during 2025 under our current development plan.

As of December 31, 2025, HighPeak Energy was running a two-rig program and expects to average one (1) drilling rig and one (1) frac crew during 2026 under our current development plan depending on certain market conditions.

HighPeak Energy will continue to monitor the extent by which prices continue to increase and/or stabilize as we execute our capital expenditure program.

Any shut-in or curtailment of the crude oil, NGL and natural gas produced from HighPeak Energy’s fields could adversely affect its financial condition and results of operations.

Certain of the undeveloped leasehold acreage of HighPeak Energy ’ s assets is subject to leases that will expire over the next several years unless production is established on units containing the acreage or the leases are renewed.

Certain of the undeveloped leasehold acreage of HighPeak Energy ’ s assets is subject to leases that will expire over the next several years unless production is established on units containing the acreage or the leases are extended or renewed.

As of December 31, 2025, approximately 72% of HighPeak Energy’s acreage was held by production.

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From 2026 through 2028, approximately 49%, 43% and 4%, respectively, of the net undeveloped acreage associated with the leases are set to expire.

If the leases expire and HighPeak Energy is unable to renew the leases, HighPeak Energy will lose its right to develop the related properties.

In particular, if the Company is unable to comply with the financial covenants under its Term Loan Credit Agreement and Senior Credit Facility Agreement and is required to reduce its capital expenditures as a result, it may be unable to pursue the drilling and development activities necessary to maintain these leases, which could result in the loss of a significant portion of its undeveloped acreage, including the proved undeveloped reserves associated therewith.

If the leases expire and HighPeak Energy is unable to extend or renew the leases, HighPeak Energy will lose its right to develop the related properties.

Although HighPeak Energy intends to hold substantially all these leases through its development drilling program or extend substantially all the net acreage associated with identified drilling locations through a combination of exploratory and development drilling, a portion of such leases may be extended or renewed.

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Further, many factors may curtail, delay or cancel scheduled drilling operations, including:

delays imposed by, or resulting from, compliance with regulatory requirements, including the IRA 2022, limitations on wastewater disposal, emission of GHGs and hydraulic fracturing;

delays imposed by, or resulting from, compliance with regulatory requirements, limitations on wastewater disposal, emission of GHGs and hydraulic fracturing;

pressure or irregularities in geological formations;

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The remaining monetary commitment as of December 31, 2025, if the Company never delivers any additional volumes under the agreement, is approximately $115.9 million.

The Company is party to an amended agreement whereby it has agreed to purchase at least 750,000 tons of frac sand over a fifteen-month period beginning April 1, 2024.

The Company has taken deliveries of approximately 547,000 tons of sand through December 31, 2024, leaving a commitment of approximately 203,000 tons remaining.

There are stipulations in the agreement that reduce this commitment should we experience a downturn in crude oil prices.

Generally, if the Company never takes delivery of any additional frac sand under the agreement, the monetary commitment that remains as of December 31, 2024 is approximately $5.2 million.

If HighPeak Energy has insufficient production to meet the minimum volume commitments under any of these agreements or if HighPeak Energy fails to take delivery of supplies which it committed to, HighPeak Energy’s cash flow from operations will be reduced, which may require HighPeak Energy to reduce or delay its planned investments and capital expenditures, or seek alternative means of financing, all of which may have a material adverse effect on HighPeak Energy’s results of operation.

If HighPeak Energy has insufficient production to meet the minimum volume commitments under this agreement, HighPeak Energy’s cash flow from operations will be reduced, which may require HighPeak Energy to reduce or delay its planned investments and capital expenditures, or seek alternative means of financing, all of which may have a material adverse effect on HighPeak Energy’s results of operation.

Hedging transactions expose HighPeak Energy to counterparty credit risk and may become more costly or unavailable.

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If natural gas, NGL or crude oil prices upon settlement of derivative swap contracts exceed the price at which commodities have been hedged, HighPeak Energy will be obligated to make cash payments to counterparties, which could, in certain circumstances, be significant.

The enactment of derivatives legislation could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our businesses.

On July 21, 2010, new comprehensive financial reform legislation, known as the Dodd‑Frank Wall Street Reform and Consumer Protection Act (the “Act”), was enacted that establishes federal oversight and regulation of the over‑the‑counter derivatives market and entities, such as us, that participate in that market.

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The CFTC has also adopted a final rule regarding aggregation of positions, under which a party that controls the trading of, or owns 10% or more of the equity interests in, another party will have to aggregate the positions of the controlled or owned party with its own positions for purposes of determining compliance with position limits unless an exemption applies.

The CFTC’s aggregation rules are now in effect, though CFTC staff have granted relief—until August 12, 2025 or the effective date of any codifying rulemaking—from various conditions and requirements in the final aggregation rules.

The CFTC’s aggregation rules are now in effect, though CFTC staff have granted relief from various conditions and requirements in the final aggregation rules until the effective date of any codifying rulemaking.

With the implementation of the final aggregation rules and upon the effectiveness of the final CFTC position limits rule, our ability to execute our hedging strategies described above could be limited.

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HighPeak Energy expects to sell its production to a relatively small number of customers, as is customary in the crude oil and natural gas business.

For the years ended December 31, 2024 and 2023, there were two purchasers that accounted for approximately 94% and 96% of our revenue, respectively (one at approximately 76% and 82%, respectively, and one at approximately 18% and 14%, respectively), and for the year ended December 31, 2022, there was one purchaser that accounted for approximately 88% of our revenue.

For the years ended December 31, 2025, 2024 and 2023, there were two purchasers that accounted for approximately 90%, 94% and 96% of our revenue, respectively (one at approximately 82%, 76% and 82%, respectively, and one at approximately 8%, 18% and 14%, respectively).

No other purchaser accounted for 10% or more of such revenues during such period.

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These costs and liabilities could arise under a wide range of federal, state and local environmental laws and regulations, including the following federal laws and their state counterparts, as amended from time to time, among others:

the CAA, which restricts the emission of air pollutants from many sources, imposes various pre-construction, monitoring and reporting requirements and is relied upon by the EPA as authority for adopting climate change regulatory initiatives relating to GHG emissions;

the CAA, which restricts the emission of air pollutants from many sources, imposes various pre-construction, monitoring and reporting requirements;

the CWA, which regulates discharges of pollutants from facilities and sources to federal waters and establishes the extent to which waterways are subject to federal jurisdiction and rulemaking as protected waters of the United States;

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To the extent HighPeak Energy’s operations are affected by national, regional, local and other laws, and to the extent such laws are enacted or other governmental action is taken that restricts drilling or imposes more stringent and costly operating, waste handling, disposal and cleanup requirements, HighPeak Energy’s business, prospects, financial condition or results of operations could be materially adversely affected.

HighPeak Energy may incur increasing attention to ESG matters that may impact its business.

HighPeak Energy may incur increased attention to ESG matters that may impact its business.

Businesses across all industries are facing increasing scrutiny from investors, customers, employees, regulatory bodies and other stakeholders related to their ESG practices.

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Increasing attention to climate change, for example, may result in demand shifts for HighPeak Energy’s hydrocarbon products and additional governmental investigations and private litigation.

Moreover, while we may create and publish voluntary disclosures regarding ESG matters from time to time, certain statements in those voluntary disclosures may be based on expectations and assumptions or hypothetical scenarios that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.

Moreover, while we may create and publish mandatory or voluntary disclosures regarding ESG matters from time to time, certain statements in those disclosures may be based on expectations and assumptions or hypothetical scenarios that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.

Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established approach to identifying, measuring and reporting on many ESG matters.

We may also announce participation in, or certification under, various third-party ESG frameworks in an attempt to improve our ESG profile, but such participation or certification may be costly and may not achieve the desired results.

Additionally, while we may announce various voluntary ESG targets, such targets are often aspirational.

Additionally, while we may announce various ESG targets, such targets are often aspirational.

We may not be able to meet such targets in the manner or on such a timeline as initially contemplated, including but not limited to as a result of unforeseen costs or technical difficulties associated with achieving such results.

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Some of these arrangements may receive scrutiny from certain constituencies.

Also, despite these aspirational goals and any other actions taken, we may receive pressure from investors, lenders, or other groups to adopt more aggressive climate or other ESG-related goals, but we cannot guarantee that we will be able to pursue or implement such goals because of potential costs or technical or operational obstacles.

Also, despite these aspirational goals and any other actions taken, we may receive pressure from investors, lenders, or other groups to adopt more aggressive climate or other ESG-related goals, but we cannot guarantee that we will be able to pursue, implement or make progress against such goals because of potential costs or technical, inaccurate assumptions or operational obstacles.

Certain statements or initiatives with respect to ESG matters that we may pursue or assert are increasingly subject to heightened scrutiny from the public and governmental authorities, as well as other parties.

For example, the SEC has recently taken enforcement action against companies for ESG-related misconduct, including alleged “greenwashing,” ( i.e.

For example, the SEC and various state agencies have taken enforcement action against companies for ESG-related misconduct, including alleged “greenwashing,” ( i.e.

, the process of conveying misleading information or making false claims that overstate potential ESG benefits).

Certain regulators, such as the SEC and various state agencies, as well as non-governmental organizations and other private actors have filed lawsuits under various securities and consumer protection laws alleging that certain ESG statements, goals or standards were misleading, false or otherwise deceptive.

Certain social and inclusion initiatives are the subject of scrutiny by both those calling for the continued advancement of such policies, as well as those who believe they should be curbed, including government actors, and the complex regulatory and legal frameworks applicable to such initiatives continue to evolve.

Such regulators, as well as non-governmental organizations and other private actors, have filed lawsuits under various securities and consumer protection laws alleging that certain ESG statements, goals or standards were misleading, false or otherwise deceptive.

Certain employment or business initiatives are the subject of scrutiny by both those calling for the continued advancement of such policies, as well as those who believe they should be curbed, including government actors, and the complex regulatory and legal frameworks applicable to such initiatives continue to evolve.

More recent political developments could mean that the Company faces increasing criticism or litigation risks from certain “anti-ESG” parties, including various government agencies.

Such sentiment may focus on the Company’s environmental or social commitments (such as reducing GHG emissions) or its pursuit of certain employment practices or social initiatives that are alleged to be political or polarizing in nature or are alleged to violate laws based, in part, on changing priorities of, or interpretations by, federal agencies or state governments.

Such sentiment may focus on the Company’s environmental or social commitments (such as reducing GHG emissions) or its pursuit of certain employment or business practices or social initiatives that are alleged to be political or polarizing in nature or are alleged to violate laws based, in part, on changing priorities of, or interpretations by, federal agencies or state governments.

Consideration of ESG-related factors in the Company’s decision-making could be subject to increasing scrutiny and objection from such anti-ESG parties.

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Accordingly, there may be increased costs related to reviewing, implementing and managing such policies, as well as compliance and litigation risks based both on positions we do or do not take, or work we do or do not perform.

In addition, organizations that provided information to investors on ESG and related matters have developed rating processes for evaluating business entities on their approach to ESG matters.

In addition, organizations that provided information and ratings to investors on ESG and related matters have developed processes for evaluating business entities on their approach to ESG matters.

Currently, there are no universal standards for such scores or ratings, but the importance of sustainability evaluations has become more broadly accepted by investors and shareholders.

Such ratings are used by some investors to inform their investment and voting decisions.

Additionally, certain investors use these scores to benchmark businesses against their peers and if a business entity is perceived as lagging, these investors may engage with such entities to require improved ESG disclosure or performance.

Such assessments are used by some investors to inform their investment and voting decisions.

Additionally, certain investors use these assessments to benchmark businesses against their peers and if a business entity is perceived as lagging, these investors may engage with such entities to require improved ESG disclosure or performance.

Moreover, certain members of the broader investment community may consider a business entity’s sustainability score as a reputational or other factor in making an investment decision.

Consequently, a low sustainability score could result in exclusion of HighPeak Energy’s stock from consideration by certain investment funds, engagement by investors seeking to improve such scores and a negative perception of HighPeak Energy’s operation by certain investors.

Consequently, a low sustainability score could result in exclusion of HighPeak Energy’s stock from consideration by certain investment funds, restrictions on our ability to obtain insurance, and engagement by investors seeking to improve such assessments and a negative perception of HighPeak Energy’s operation by certain investors.

Additionally, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations.

ESG matters may also impact our suppliers and customers, which may ultimately have adverse impacts on our operations.

In addition, ESG efforts related to employment practices and social initiatives are the subject of scrutiny by stakeholders, regulators and other third-parties.

The complex regulatory and legal frameworks applicable to such initiatives continue to evolve.

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adverse weather conditions;

compliance with, or changes in, environmental and other governmental or contractual requirements, including the IRA 2022;

compliance with, or changes in, environmental and other governmental or contractual requirements;

increases in the cost of, and shortages or delays in the availability of, electricity, supplies, materials, drilling or workover rigs, equipment and services.

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No assurance can be given that it will be able to identify additional suitable acquisition opportunities, negotiate acceptable terms, obtain financing for acquisitions on acceptable terms or successfully acquire identified targets.

HighPeak Energy’s failure to achieve consolidation savings, to integrate the acquired businesses and assets, including those from the Hannathon and Alamo Acquisitions, into its then-existing operations successfully or to minimize any unforeseen operational difficulties could have a material adverse effect on its financial condition and results of operations.

HighPeak Energy’s failure to achieve consolidation savings, to integrate the acquired businesses and assets into its then-existing operations successfully or to minimize any unforeseen operational difficulties could have a material adverse effect on its financial condition and results of operations.

In addition, the Term Loan Credit Agreement and Senior Credit Facility Agreement impose certain limitations on HighPeak Energy’s ability to enter into mergers or combination transactions and on HighPeak Energy’s and its restricted subsidiaries’ ability to incur certain indebtedness, which could indirectly limit its ability to acquire assets and businesses.

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The costs incurred to comply with such restrictions may be significant, and HighPeak Energy may experience delays or curtailment in the pursuit of development activities and perhaps even be precluded from the drilling of wells.

The unavailability or high cost of drilling rigs, equipment, supplies, personnel, frac crews and oilfield services due to commodity price volatility or supply constraints as a result of the conflict in Ukraine, the Israel-Hamas conflict, elevated interest rates and associated policies of the Federal Reserve could adversely affect HighPeak Energy ’ s ability to execute its development plans within its budget and on a timely basis and consequently could materially and adversely affect our cash flows and results of operations.

intervention in Venezuela, elevated interest rates and associated policies of the Federal Reserve could adversely affect HighPeak Energy ’ s ability to execute its development plans within its budget and on a timely basis and consequently could materially and adversely affect our cash flows and results of operations.

The demand for drilling rigs, pipe and other equipment and supplies, as well as for qualified and experienced field personnel to drill wells and conduct field operations, geologists, geophysicists, engineers and other professionals in the crude oil and natural gas industry, can fluctuate significantly, often in correlation with crude oil, NGL and natural gas prices, causing periodic shortages of equipment, supplies and needed personnel.

The incoming U.S.

The current U.S.

presidential administration has signaled it will encourage increased domestic exploration and production activity, which could lead to a reduction in crude oil, NGL and natural gas prices.

Additionally, supply constraints due to the conflict in Ukraine, the Israel-Hamas conflict, elevated interest rates and associated policies of the Federal Reserve has increased the cost of oilfield services.

Additionally, supply constraints due to the conflict in Ukraine and the Middle East and U.S.

intervention in Venezuela, elevated interest rates and associated policies of the Federal Reserve has increased the cost of oilfield services.

HighPeak Energy’s operations are concentrated in areas in which oilfield activity levels have previously increased rapidly.

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This impact may be magnified to the extent that HighPeak Energy’s ability to participate in the commodity price increases is limited by its derivative activities, if any.

The IRA 2022 could accelerate the transition to a low carbon economy and could impose new costs on our operations.

In August 2022, President Biden signed the IRA 2022 into law.

The IRA 2022 contains hundreds of billions in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.

In addition, the IRA 2022 imposes the first ever federal fee on the emission of greenhouse gases through a methane emissions charge.

The IRA 2022 amends the federal Clean Air Act to impose a fee on the emission of methane from sources required to report their GHG emissions to the EPA, including those sources in the onshore petroleum and natural gas production categories.

The methane emissions charge began in calendar year 2024 at $900 per ton of methane, increases to $1,200 in 2025, and will be set at $1,500 for 2026 and each year after.

Calculation of the fee is based on certain thresholds established in the IRA 2022.

In addition, the multiple incentives offered for various clean energy industries referenced above could further accelerate the transition of the economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives.

We cannot predict whether, how, or when the incoming Trump Administration might take action to revise or repeal the methane emissions charge.

Additionally, Congress may take actions to repeal or revise the IRA, including with respect to the methane emissions charge, which timing or outcome similarly cannot be predicted.

To the extent the methane emissions charge is implemented as originally promulgated, it could decrease demand for crude oil and natural gas, increase our compliance and operating costs and consequently adversely affect our business.

In addition, fuel conservation measures, alternative fuel requirements and increasing consumer demand for alternatives to crude oil, NGL and natural gas could reduce demand for crude oil, NGL and natural gas.

The IRA 2022 incentives discussed above could further accelerate the transition of our economy to alternatives to crude oil, NGL and natural gas.

The impact of the changing demand for crude oil, NGL and natural gas may have a material adverse effect on our business, financial condition, results of operations and cash flows.

HighPeak Energy may be involved in legal proceedings that could result in substantial liabilities.

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Should our operators fail to comply with all applicable regulatory agency administered statutes, rules, regulations and orders, our operators could be subject to substantial penalties and fines.

Under the Energy Policy Act of 2005, FERC has civil penalty authority under the Natural Gas Act of 1938 to impose penalties for current violations of up to $1,584,648 per day for each violation (annually adjusted for inflation) and disgorgement of profits associated with any violation.

Under the Energy Policy Act of 2005, FERC has civil penalty authority under the Natural Gas Act of 1938 to impose penalties for current violations of up to $1,584,648 per day for each violation (annually adjusted for inflation) for 2025 soon to be adjusted for 2026 and disgorgement of profits associated with any violation.

While our operators’ operations have not been regulated by the FERC as a natural gas company under this law, the FERC has adopted regulations that may subject certain of our operators’ otherwise non-FERC jurisdictional facilities to the FERC annual reporting requirements.

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Additional rules and legislation pertaining to those and other matters may be considered or adopted by the FERC from time to time.

Additionally, the FTC has regulations intended to prohibit market manipulation in the petroleum industry with authority to fine violators of the regulations civil penalties of up to $1,510,803 per day (annually adjusted for inflation) and the CFTC prohibits market manipulation in the markets regulated by the CFTC, including similar anti-manipulation authority with respect to crude oil swaps and futures contracts as that granted to the CFTC with respect to crude oil purchases and sales.

The CFTC rules subject violators to a civil penalty of up to the greater of $1,487,712 per day (annually adjusted for inflation) or triple the monetary gain to the person for each violation.

Additionally, the FTC has regulations intended to prohibit market manipulation in the petroleum industry with authority to fine violators of the regulations civil penalties of up to $1,510,803 per day (annually adjusted for inflation) for 2025 soon to be adjusted for 2026 and the CFTC prohibits market manipulation in the markets regulated by the CFTC, including similar anti-manipulation authority with respect to crude oil swaps and futures contracts as that granted to the CFTC with respect to crude oil purchases and sales.

The CFTC rules subject violators to a civil penalty of up to the greater of $1,487,712 per day (annually adjusted for inflation) for 2025 soon to be adjusted for 2026 or triple the monetary gain to the person for each violation.

Failure to comply with those regulations in the future could subject our operators to civil penalty liability, as described in “Items 1 and 2:

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In the United States, no comprehensive climate change legislation has been implemented.

However, the EPA has adopted rules that, among other things, established construction and operating permit reviews for GHG emissions from certain large stationary sources, required the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States, and together with the DOT, implemented GHG emissions limits on vehicles manufactured for operation in the United States.

However, from time to time, certain administrations have taken actions to repeal or revise such climate-related actions.

For example, the regulation of methane from crude oil and natural gas facilities has been subject to uncertainty in recent years.

Under previous presidential administrations, the EPA adopted rules that, among other things, established construction and operating permit reviews for GHG emissions from certain large stationary sources, required the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States, and together with the DOT, implemented GHG emissions limits on vehicles manufactured for operation in the United States.

However, following the change in presidential administration, in February 2026, the EPA formally rescinded its “Endangerment Finding”, which provided the support underpinning the majority of the agency’s GHG-related regulations.

At this time, it remains uncertain what impacts the rescission will have upon current regulations and whether any further actions will be taken by President Trump.

For more information, see the section entitled “Items 1 and 2.

Business and Properties—Regulation of Environmental and Occupational Safety and Health Matters— Regulation of Greenhouse Gas Emissions.” Separately, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of emissions.

At the international level, in 2021, President Biden recommitted the United States to the Paris Agreement, which requires member states to submit non-binding, individually determined reduction goals every five years.

In December 2024, President Biden unveiled a new emissions target, seeking to cut emissions by 61-66% from 2005 levels by 2035.

Subsequent United Nations climate conferences have called for additional action to transition away from fossil fuels and control or otherwise reduce GHG emissions, though none have been legally binding.

However, the Trump Administration has formally begun the process of re-withdrawing from the Paris Agreement, and the United States’ participation in future United Nations climate-related conferences is unclear.

Therefore, the full impact of these actions cannot be predicted at this time.

Governmental, scientific and public concern over the threat of climate change arising from GHG emissions has resulted in increasing political risks in the United States, including climate change related pledges made by certain candidates in public office.

Governmental, scientific and public concern over the threat of climate change arising from GHG emissions has resulted in increasing political risks in the United States.

Litigation risks are also increasing, as a number of entities have sought to bring suit against crude oil and natural gas companies in state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to climate change or that such companies have been aware of the adverse effects of climate change for some time but defrauded their investors or customers by failing to adequately disclose those impacts.

There have also recently been increasing financial risks for fossil fuel producers as certain shareholders currently invested in fossil-fuel energy companies concerned about the potential effects of climate change may elect in the future to shift some or all their investments into other sectors.

Institutional lenders who provide financing to fossil-fuel energy companies also have become more attentive to sustainable lending practices and some of them may elect not to provide funding for fossil fuel energy companies or seek to require more aggressive action with respect to climate-related risks.

There is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector.

For more information, see the section entitled “Items 1 and 2.

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In addition, a number of lawsuits have been filed in some states, including Texas, alleging that disposal well operations have caused damage to neighboring properties or otherwise violated state and federal rules regulating waste disposal.

In response to these concerns, regulators in some states are seeking to impose additional requirements, including requirements in the permitting of produced water disposal wells or otherwise to assess the relationship between seismicity and the use of such wells.

In response to these concerns, regulators in some states have imposed additional requirements, including requirements in the permitting of produced water disposal wells or otherwise to assess the relationship between seismicity and the use of such wells.

For example, Texas has imposed certain limits on the permitting or operation of disposal wells in areas with increased instances of induced seismic events.

In some instances, regulators may also order that disposal wells be shut-in.

For example, in December 2023, the TRRC issued a notice to suspend the permits of all deep disposal wells within the Northern Culberson-Reeves Seismic Response Area.

For example, in December 2023, the TRRC issued a notice to suspend the permits of all deep disposal wells within the Northern Culberson-Reeves Seismic Response Area and in May 2024, the TRRC released a seismicity response plan curtailing permitted injection volumes for certain wells in the Stanton Seismic Response Area.

Most recently, in May 2025, the TRRC released updated guidance for disposal well permits in the Permian Basin that placed new limits on maximum injection pressure and volumes to ensure safety.

HighPeak Energy will likely dispose of large volumes of produced water gathered from its drilling and production operations by injecting it into wells pursuant to permits issued by governmental authorities overseeing such disposal activities.

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The loss of the services of its senior management could have a material adverse effect on its business, financial condition and results of operations.

Recent management changes could disrupt our operations and impair our ability to attract and retain key personnel.

We have experienced recent changes to our senior management team, including the September 2025 departure of our Chief Executive Officer and Chairman of our Board of Directors, Jack Hightower.

Our President, Michael Hollis, was named Interim Chief Executive Officer upon Mr.

Hightower’s retirement and resignation, and on November 4, 2025, the Board named Michael Hollis as the Company’s President and Chief Executive Officer.

Changes in our senior management and uncertainty regarding any future changes may disrupt our operations, impact customer and partner relationships, and impair our ability to recruit and retain other needed personnel.

Any such disruption or impairment could have an adverse effect on our business.

Increases in interest rates could adversely affect HighPeak Energy ’ s business.

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The designation of previously unprotected species in areas where HighPeak Energy operates as threatened or endangered could cause it to incur increased costs arising from species protection measures or could result in limitations on its activities that could have a material and adverse impact on its ability to develop and produce reserves.

For example, in May 2024, the dunes sagebrush lizard was listed and, in November 2022, the FWS listed two distinct population segments of the lesser prairie-chicken under the ESA, although this decision has been challenged.

For example, in May 2024, the dunes sagebrush lizard was listed, although this decision has been challenged.

And, in November 2022, the FWS listed two distinct population segments of the lesser prairie-chicken under the ESA, although in March 2025, the U.S.

District Court for the Western District of Texas vacated the rule for the northern distinct population segment.

If these species or others are listed, the FWS and similar state agencies may designate critical or suitable habitat areas that they believe are necessary for the survival of threatened or endangered species.

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As a consequence, perceived uncertainties related to our future may result in the loss of potential business opportunities and volatility in the market price of our common stock and may make it more difficult for us to attract and retain qualified personnel and business partners.

HighPeak Energy may not be able to pay dividends on our common stock.

HighPeak Energy has suspended the payment of dividends on our common stock and may not resume paying dividends in the future.

Beginning in the first quarter of 2026, we suspended the payment of quarterly dividends on our common stock.

There can be no assurance that we will resume paying dividends, and any decision to resume paying dividends will be solely within the discretion of, and subject to approval by, our Board of Directors.

Our Board of Directors may elect to declare cash dividends on our common stock, subject to our compliance with applicable law and the Credit Agreements.

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Our Board of Director's determination with respect to any such dividends, including the record date, the payment date and the actual amount of the dividend, will depend upon our profitability and financial condition, contractual restrictions, restrictions imposed by applicable law and other factors that the Board of Directors deems relevant at the time of such determination.

The Principal Stockholder Group has significant influence over HighPeak Energy.

The Principal Stockholder Group owns approximately 68% of HighPeak Energy’s common stock as of December 31, 2024.

This includes an aggregate of approximately one million shares of common stock purchased by the Principal Stockholder Group in connection with the Company’s underwritten equity offering in July 2023, which further increased the Principal Stockholder Group’s ownership in the Company.

As long as the Principal Stockholder Group owns or controls a significant percentage of HighPeak Energy’s outstanding voting power, subject to the terms of the Stockholders’ Agreement (as defined below), they will have the ability to influence certain corporate actions requiring stockholder approval.

Under the Stockholders’ Agreement, the Principal Stockholder Group will be entitled to nominate a specified number of directors for appointment to the Board so long as the Principal Stockholder Group meets certain ownership criteria outlined in the Stockholders’ Agreement.

For more information about the Stockholders’ Agreement, see the section entitled “Certain Relationships and Related Transactions, and Director Independence.”

We may determine not to resume paying dividends, or to pay dividends at reduced levels, depending on prevailing market conditions, our financial performance and liquidity needs, and other considerations.

If HighPeak Energy ’ s operational and financial performance does not meet the expectations of investors, stockholders or financial analysts, the market price of our securities may decline.

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changes in the market’s expectations about our operating results;

success of our competitors;

success or failure of our competitors;

our operating results failing to meet the expectation of securities analysts or investors in a particular period;

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general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations, OPEC+’s ability to continue to agree to limit production among its members and acts of war or terrorism.

HighPeak Energy is a “ controlled company ” within the meaning of Nasdaq rules and qualifies for exemptions from certain corporate governance requirements.

As a result, you do not have the same protections afforded to stockholders of companies that are not exempt from such corporate governance requirements.

The Principal Stockholder Group collectively owns a majority of HighPeak Energy’s outstanding voting stock.

The Principal Stockholder Group has significant influence over HighPeak Energy.

We are currently a “ controlled company ” within the meaning of Nasdaq rules and qualify for exemptions from certain corporate governance requirements.

As a result, stockholders do not have the same protections afforded to stockholders of companies that are not exempt from such corporate governance requirements.

If one or both of the HighPeak Funds are dissolved and their shares distributed, it is possible that we will cease to be a controlled company.

There can be no assurance as to when either or both of those distributions will take place, if at all.

However, if one or both of those distributions do take place, over a majority of our shares will still be held by a combination of the HighPeak Funds, the John Paul DeJoria Family Trust and the John Paul DeJoria Dynasty Trust.

The HighPeak Funds have and, following one or both of the HighPeak Funds Distributions, the John Paul DeJoria Family Trust and John Paul DeJoria Dynasty Trust, will have significant influence over us.

The Principal Stockholder Group owns approximately 64% of our common stock as of December 31, 2025.

Therefore, HighPeak Energy is a controlled company within the meaning of Nasdaq corporate governance standards.

Following Mr.

Jack Hightower’s retirement, the HighPeak Funds are managed by a committee comprised of Mr.

Hollis, Daniel Silver and William R.

Hightower, each of whom also serve as President and Chief Executive Officer, Executive Vice President and Executive Vice President of the Company, respectively.

The HighPeak Funds are now set to expire at the end of 2026, unless extended.

Therefore, it is possible that the shares of HighPeak Energy common stock owned by the HighPeak Funds could be distributed to limited partners in early 2027 (the “HighPeak Funds Distributions”), at which time HighPeak Energy could potentially cease to be a controlled company.

However, if both HighPeak Funds are distributed simultaneously, it is likely that HighPeak Energy could potentially remain a controlled company, with the controlling party becoming the John Paul DeJoria Family Trust and the John Paul DeJoria Dynasty Trust.

As long as the HighPeak Funds and, following the HighPeak Funds Distributions, the John Paul DeJoria Family Trust and John Paul DeJoria Dynasty Trust continue to own or control a significant percentage of outstanding voting power, subject to the terms of the Stockholders’ Agreement, they will have the ability to influence certain corporate actions requiring stockholder approval.

For more information about the Stockholders’ Agreement, see the section entitled “Certain Relationships and Related Transactions, and Director Independence.” For so long as the Principal Stockholder Group collectively owns 35% or more of our common stock, the Principal Stockholder Group may designate up to four directors, none of whom are required to be independent if the Principal Stockholder Group owns more than 50% of our common stock.

They may have the ability to strongly influence all corporate actions requiring stockholder approval, including the election and removal of directors and the size of our board of directors, any amendment of our Second Amended and Restated Certificate of Incorporation (the “A&R Charter”) or our Amended and Restated Bylaws, or the approval of any merger or other significant corporate transaction, including a sale of substantially all of our assets.

Moreover, this concentration of stock ownership by our significant stockholders may also adversely affect the trading price of our common stock to the extent investors perceive a disadvantage in owning stock of a company with stockholders who own such a significant percentage of our voting securities .

In addition, until the HighPeak Funds Distributions are completed, we are currently a “controlled company” within the meaning of Nasdaq rules and qualify for exemptions from certain corporate governance requirements.

Under Nasdaq rules, a company of which more than 50% of the voting power is held by an individual, company or group of persons acting together is a controlled company and may elect not to comply with certain Nasdaq corporate governance requirements, including the requirements that:

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the compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

HighPeak Energy has elected to rely on all of the exemptions for controlled companies provided for under the Nasdaq rules.

These requirements will not apply to HighPeak Energy as long as it remains a controlled company.

However, a majority of the HighPeak Energy board members are independent and both the Nominating and Governance Committee and Compensation Committees are composed solely of independent members of the board.

Further, following the one or both of the HighPeak Funds Distributions, because HighPeak Energy could potentially cease to be a controlled company, any action required or permitted to be taken by the stockholders of the Company could potentially be required to be taken at a duly held annual or special meeting of stockholders and may not be taken by any consent in writing of such stockholders.

If our former executive officer was forced to sell shares of our common stock that he has pledged to secure certain personal loan obligations, such sales could cause our stock price to decline.

Certain banking institutions have made extensions of credit to Jack Hightower, our former Chief Executive Officer, a portion of which was used to purchase shares of common stock in the public market and in certain of our public offerings and private placements at the same prices offered to third-party participants in such offerings and placements.

We are not a party to these loans, which are primarily secured by pledges of shares of our common stock currently owned directly by Mr.

Jack Hightower and shares of HighPeak common stock held indirectly by Mr.

Jack Hightower via his interests in the HighPeak Funds and HPK GP.

If the price of our common stock were to decline or such loans were to reach maturity without renewal, Mr.

Jack Hightower may be forced by one or more of the banking institutions to sell, or the applicable banking institution may elect to sell, shares of HighPeak common stock or interests in the HighPeak Funds to satisfy his applicable loan obligations if he could not do so through other means.

Any such sales could adversely affect the trading market and trading price of our common stock, as well as significantly reduce Mr.

Jack Hightower’s ownership in the Company.

HighPeak Energy may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on HighPeak Energy ’ s financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

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In addition, charges of this nature may cause HighPeak Energy to be unable to obtain future financing on favorable terms or at all.

There is no guarantee that our warrants will be in the money at the time you choose to exercise them, and they may expire worthless.

The exercise price for our warrants is $11.50 per share of HighPeak Energy common stock, subject to certain adjustments.

There is no guarantee that our warrants will be in the money at the time you choose to exercise them, and as such, our warrants may expire worthless.

The terms of our warrants may be amended in a manner that may be adverse to holders of our warrants with the approval by the holders of at least 50% of our then-outstanding warrants.

Our warrants were issued in registered form under the Warrant Agreement Amendment.

The Warrant Agreement Amendment provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct or supplement any defective provision but requires the approval by the holders of at least 50% of the then-outstanding warrants to make any other change or modification, including any amendment that adversely affects the interests of the registered holders of our warrants.

Accordingly, HighPeak Energy, may amend the terms of its warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding warrants approve of such amendment.

Although HighPeak Energy’s ability to amend the terms of its warrants with the consent of at least 50% of the then-outstanding warrants is unlimited and such amendments could, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of HighPeak Energy common stock purchasable upon exercise of a warrant.

Warrants are exercisable for HighPeak Energy common stock and HighPeak Energy ’ s LTIP provides for a significant number of stock options, each of which could increase the number of shares eligible for future resale in the public market and result in dilution to stockholders.

The potential for the issuance of a substantial number of additional shares of HighPeak Energy common stock upon exercise of its warrants would increase the number of issued and outstanding shares of HighPeak Energy common stock and reduce the value of the shares issued and outstanding as of the date hereof.

Additionally, the sale, or even the possibility of sale, of the shares underlying the warrants could have an adverse effect on the market price for HighPeak Energy’s common stock or on its ability to obtain future financing.

If and to the extent these warrants are exercised, you may experience dilution to your holdings.

In addition, to attract and retain key management personnel and non-employee directors, HighPeak Energy has implemented a Long-Term Incentive Plan (“LTIP”), pursuant to which the Share Pool (as defined in the LTIP) is reserved and available for delivery with respect to Stock Awards (as defined in the LTIP).

From time to time and prior to the expiration of the LTIP, the Share Pool will automatically be increased by (i) the number of shares of HighPeak Energy common stock issued pursuant to the LTIP and (ii) 13% of the number of shares of HighPeak Energy common stock that are newly issued by HighPeak Energy (other than those issued pursuant to the LTIP), including any shares issued upon the exercise of the warrants.

As a result, HighPeak Energy could issue a significant number of stock options under the LTIP, including additional shares added to the LTIP upon the exercise of the warrants, which could further dilute your holdings.

If securities or industry analysts do not publish or cease publishing research or reports about HighPeak Energy, HighPeak Energy ’ s business or HighPeak Energy ’ s market, or if they change their recommendations regarding HighPeak Energy common stock adversely, the price and trading volume of HighPeak Energy common stock could decline.

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The Second Amended and Restated Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders ’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

The Second Amended and Restated Certificate of Incorporation (“A&R Charter”) provides that, unless HighPeak Energy consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (“Court of Chancery”) will, to the fullest extent permitted by applicable law and subject to applicable jurisdictional requirements, be the sole and exclusive forum for (i) any derivative action or proceeding as to which the Delaware General Corporation Law (“DGCL”) confers jurisdiction upon the Court of Chancery, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of HighPeak Energy to HighPeak Energy or its stockholders, (iii) any action asserting a claim against HighPeak Energy, its directors, officers or employees arising pursuant to any provision of the DGCL, the A&R Charter or HighPeak Energy’s bylaws or (iv) any action asserting a claim against HighPeak Energy, its directors, officers or employees that is governed by the internal affairs doctrine, in each case except for such claims as to which (a) the Court of Chancery determines that it does not have personal jurisdiction over an indispensable party, (b) exclusive jurisdiction is vested in a court or forum other than the Court of Chancery or (c) the Court of Chancery does not have subject matter jurisdiction.

The A&R Charter provides that, unless HighPeak Energy consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (“Court of Chancery”) will, to the fullest extent permitted by applicable law and subject to applicable jurisdictional requirements, be the sole and exclusive forum for (i) any derivative action or proceeding as to which the Delaware General Corporation Law (“DGCL”) confers jurisdiction upon the Court of Chancery, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of HighPeak Energy to HighPeak Energy or its stockholders, (iii) any action asserting a claim against HighPeak Energy, its directors, officers or employees arising pursuant to any provision of the DGCL, the A&R Charter or HighPeak Energy’s bylaws or (iv) any action asserting a claim against HighPeak Energy, its directors, officers or employees that is governed by the internal affairs doctrine, in each case except for such claims as to which (a) the Court of Chancery determines that it does not have personal jurisdiction over an indispensable party, (b) exclusive jurisdiction is vested in a court or forum other than the Court of Chancery or (c) the Court of Chancery does not have subject matter jurisdiction.

The forum selection provision is not intended to apply to claims arising under the Securities Act or the Exchange Act.

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In addition, a failure to comply with applicable laws, regulations and rules, as interpreted and applied, could have a material adverse effect on HighPeak Energy’s business and results of operations.

There can be no assurance that HighPeak Energy common stock issued, including issuable upon exercise of our warrants, will remain listed on the Nasdaq, or that HighPeak Energy will be able to comply with the continued listing standards of the Nasdaq.

HighPeak Energy’s common stock and warrants are currently listed on the Nasdaq, which such listings includes its common stock or shares of its common stock issuable upon exercise of its warrants.

There can be no assurance that HighPeak Energy common stock issued will remain listed on the Nasdaq, or that HighPeak Energy will be able to comply with the continued listing standards of the Nasdaq.

HighPeak Energy’s common stock is currently listed on the Nasdaq.

If the Nasdaq delists HighPeak Energy’s common stock from trading on its exchange for failure to meet the listing standards, HighPeak Energy and its security holders could face significant material adverse consequences, such as:

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Further, if HighPeak Energy were no longer listed on the Nasdaq, its securities would not be covered securities and HighPeak Energy would be subject to regulation in each state in which HighPeak Energy offers its securities.

Unanticipated changes in effective tax rates or laws or adverse outcomes resulting from examination of HighPeak Energy ’ s income or other tax returns could adversely affect HighPeak Energy ’ s financial condition, results of operations and cash flow.

Unanticipated changes in effective tax rates or laws or adverse outcomes resulting from examination of HighPeak Energy ’ s income or other tax returns could adversely affect HighPeak Energy ’ s financial condition, results of operations and cash flows.

HighPeak Energy is subject to tax by U.S.

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Outcomes from these audits could have an adverse effect on HighPeak Energy’s financial condition and results of operations.

HighPeak Energy is an emerging growth company within the meaning of the Securities Act, and if HighPeak Energy takes advantage of certain exemptions from disclosure requirements available to emerging growth companies, which could make HighPeak Energy ’ s common stock less attractive to investors and may make it more difficult to compare its performance with other public companies.

HighPeak Energy is an “emerging growth company” within the meaning of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and HighPeak Energy takes advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in HighPeak Energy’s periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

As a result, HighPeak Energy’s stockholders may not have access to certain information they may deem important.

HighPeak Energy’s exemption status as an emerging growth company will end on December 31, 2025, unless we issue more than $1 billion in non-convertible debt during any three-year period before that time, in which case we would cease to be an emerging growth company immediately.

HighPeak Energy cannot predict whether investors will find its securities less attractive because HighPeak Energy will rely on these exemptions.

If some investors find HighPeak Energy’s common stock less attractive as a result of HighPeak Energy’s reliance on these exemptions, the trading prices of HighPeak Energy’s common stock may be lower than they otherwise would be, there may be a less active trading market for HighPeak Energy’s common stock and the trading prices of HighPeak Energy’s common stock may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

HighPeak Energy has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, HighPeak Energy, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of HighPeak Energy’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

HighPeak Energy may not be able to use certain of its net operating loss carryforwards and other tax attributes to reduce its future U.S.

federal income tax obligations, which could adversely affect HighPeak Energy ’ s financial condition, results of operations and cash flows.

HighPeak Energy currently has significant U.S.

federal net operating loss (“NOL”) carryforwards.

HighPeak Energy’s ability to use these tax attributes to reduce its future U.S.

federal income tax obligations depends on many factors, including HighPeak Energy’s future taxable income, which cannot be assured.

In addition, HighPeak’s ability to use NOL carryforwards and other tax attributes may be subject to significant limitations under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Code”).

Under those sections of the Code, if a corporation undergoes an “ownership change” (as defined in Section 382 of the Code), the corporation’s ability to use its pre-change NOL carryforwards and other tax attributes may be substantially limited.

Determining the limitations under Section 382 of the Code is technical and highly complex.

A corporation generally will experience an ownership change if one or more stockholders (or groups of stockholders) who are each deemed to own at least 5% of the corporation’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.

If an ownership change occurs or has occurred, HighPeak Energy’s ability to use its NOL carryforwards and other tax attributes to reduce HighPeak Energy’s future U.S.

federal and state income tax obligations may be materially limited, which could adversely affect HighPeak Energy’s financial condition, results of operations and cash flows.

HighPeak Energy has incurred and will continue to incur increased costs as a result of operating as a public company.

As a public company, we have incurred and will continue to incur significant legal, accounting and other expenses, which we expect to further increase now that we are no longer an “emerging growth company.” Compliance with these reporting requirements and other rules of the SEC and Nasdaq have and will continue to increase our legal and financial compliance costs and make some activities more time-consuming and costly.

We cannot predict or estimate the amount or timing of additional costs we have incurred and will continue to incur to respond to these requirements.

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 1A. Risk Factors