HighPeak Energy, Inc.

Current report

The Investment and the related refinancing of the existing agreements governing our indebtedness may not becompleted on the terms currently contemplated or at all, and failure to complete them could adversely affect our liquidity andfinancial condition.

Current report

On October 6, 2026 (the “Signing Date”), the Company announced its entry into agreements providing for a comprehensive refinancing through a $450 million preferred equity investment and a new senior secured credit facility with an initial borrowing base of $800 million. On the Signing Date, the Company entered into (x) a Securities Purchase Agreement, with PT Danantara Energy International, a subsidiary of PT Danantara Investment Management (“DIM”) pursuant to which they have agreed to purchase from the Company 250,000 shares of a newly created series of convertible preferred stock, designated as Series A 6.0% Perpetual Convertible Preferred Stock (the “Series A Preferred Stock”) and (y) a Securities Purchase Agreement with PT Tunas Harapan Perkasa, a subsidiary of PT Energi Mega Persada Tbk (IDX: ENRG) (“EMP”), pursuant to which they have agreed to purchase from the Company 200,000 shares of Series A Preferred Stock (each, a “Securities Purchase Agreement” and collectively, the “Securities Purchase Agreements”, and the transactions contemplated thereby, the “Investment”).

Current report

In connection with the Company’s entry into the Securities Purchase Agreements, the Company has also entered into a debt commitment letter with Citibank, N.A. (“Citibank”) and Fifth Third Bank, National Association (“Fifth Third”) for a new reserve-based credit facility in an aggregate amount of up to $1.5 billion subject to an initial borrowing base of $800 million, consisting of a revolving credit facility with an initial elected commitment amount of $750 million and a $50 million term loan facility (collectively, the “RBL”) in connection with the refinancing of the Company’s existing credit agreements, which is expected to be completed in connection with the closing of the Investment. Together, the proceeds from the Investment, initial borrowings under the RBL and available cash are expected to enable the Company to repay the $1.17 billion outstanding under the Term Loan Credit Agreement in full.

Current report

Completion of the Investment is subject to a number of conditions, many of which are outside our control. These include:

Current report

● the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and receipt of any other required antitrust approvals;

Current report

● the absence of any injunction, order or decree prohibiting the Investment;

Current report

● the accuracy of our representations and warranties, subject to applicable materiality standards, including the absence of a material adverse effect since June 30, 2026;

Current report

● our performance of our covenants in all material respects;

Current report

● the substantially simultaneous closing of the Investment under each Securities Purchase Agreement;

Current report

● the satisfaction or waiver of all conditions precedent to the initial borrowings under the RBL and/or under each Securities Purchase Agreement;

Current report

● receipt of a waiver from a holder under our existing registration rights agreement; and

Current report

● certain additional approvals.

Current report

Either party may terminate a Securities Purchase Agreement if the closing has not occurred by December 31, 2026, subject to limited extension for a U.S. government shutdown or by mutual agreement. Either party may also terminate if a governmental entity issues a final, nonappealable order prohibiting the Investment, or if the other party has an uncured breach. Because the Investment and the RBL depend on each other, a failure of either could prevent completion of the other.

Current report

We cannot assure you that the conditions will be satisfied or waived, that the Investment and the RBL will close on the anticipated timeline or on the terms currently contemplated, or that they will close at all. If they are not completed, we would not receive the expected proceeds to reduce our outstanding indebtedness. We may then need to seek alternative financing, which may not be available on acceptable terms or at all. In addition, until closing, the Securities Purchase Agreements restrict us from taking certain actions without the Investors’ consent, which could limit our operational and financial flexibility. These include paying dividends, incurring additional indebtedness, issuing equity requiring stockholder approval, and making acquisitions or dispositions above $10 million. We have incurred, and will continue to incur, significant transaction costs whether or not the Investment is completed. Any failure to complete them, or a significant delay, could negatively affect the market price of our common stock and our future business and financial results.

Current report

Conversion of our Series A Preferred Stock into common stock could substantially dilute our existing stockholders****and could depress the market price of our common stock.

Current report

We have agreed to issue 450,000 shares of Series A Preferred Stock in connection with the Investment. Upon completion of the Investment, holders thereof may convert at any time into common stock at an initial conversion price of $9.50 per share, which is subject to customary adjustments. Based on the aggregate liquidation preference of $450 million, full conversion at the initial conversion price would result in the issuance of approximately 47.4 million shares of common stock.

Current report

The number of shares issuable on conversion could also increase over time. In addition, after the third anniversary of closing, we may require conversion if our common stock closes above 150% of the conversion price for 30 out of 40 consecutive trading days. Any conversion would dilute the ownership and voting interests of our existing stockholders and could reduce our earnings per share. The holders will also receive demand and piggyback registration rights for the resale of the common stock issuable on conversion. Sales of a substantial number of these shares into the public market, or the perception that such sales may occur, could cause the market price of our common stock to decline and could impair our ability to raise capital through future equity offerings.

Current report

The Series A Preferred Stock has rights senior to our common stock and imposes escalating dividend obligations that****could limit our financial flexibility.

Current report

The Series A Preferred Stock has no maturity date and carries cumulative dividends, payable quarterly in arrears, expected to commence December 31, 2026. Dividends accrue at the following rates:

Current report

● through the second anniversary of closing, 6.0% per annum in cash or 7.5% per annum in kind;

Current report

● from the second to the fifth anniversary, 7.5% per annum in cash or 9.0% per annum in kind; and

Current report

● thereafter, 10.0% per annum.

Current report

The $1,000-per-share liquidation preference, plus accumulated and unpaid dividends, ranks ahead of our common stock. Upon any liquidation, dissolution or winding up, holders of our common stock may therefore receive less, or nothing. Our ability to redeem the Series A Preferred Stock is limited. We may redeem only on or after the third anniversary of closing, and only at a cash price that, together with cash dividends paid, would give holders a 10.0% internal rate of return. As the dividend rate rises, the cost of keeping the Series A Preferred Stock outstanding will increase. Paying dividends in cash will reduce the cash available for our development program, debt service and other corporate purposes. Paying in kind will increase the dilution described above.

Current report

The Investors, including an affiliate of Indonesia's sovereign wealth fund, may have interests that differ from those of****our other stockholders, and their foreign ownership may subject us to additional regulatory scrutiny.

Current report

Pursuant to the certificate of designation establishing the Series A Preferred Stock, the holders of the Series A Preferred Stock, voting separately as a class, will be entitled to appoint and elect up to two directors to our Board of Directors, and, subject to certain beneficial ownership thresholds, each of the Investors will be entitled to appoint and elect one such director (or, in certain circumstances, a second such director in lieu of the other Investor’s director). In addition, under the Securities Purchase Agreements, each of the Investors will have the right to nominate one individual (or, in certain circumstances, two individuals) for election to our Board of Directors at such times as it does not have the right to appoint and elect a director under the certificate of designation, subject to certain beneficial ownership thresholds and a maximum of two such directors in the aggregate. Their standstill obligations and transfer restrictions expire on the second anniversary of closing. After that, the Investors may acquire additional securities, sell their shares or take other actions that may not align with the interests of our other stockholders. On an as-converted basis, the Investors would together hold a significant percentage of our common stock. This could give them meaningful influence over matters requiring stockholder approval, could make a change of control more difficult, and could discourage transactions that other stockholders might consider beneficial.

Current report

PT Danantara Energy International is controlled by an Indonesian state-owned investment entity. Investments by foreign government-controlled persons in U.S. businesses may be reviewed by the Committee on Foreign Investment in the United States or other governmental authorities. Changes in U.S.–Indonesia relations, sanctions, or foreign investment laws could also affect the Investment, our operations, or perceptions of our company by counterparties and investors.