Riley Exploration Permian (REPX) Risk Analysis

The stock markets have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. The market price of our common stock may also fluctuate significantly in response to the following factors, some of which are beyond our control: - our operating and financial performance and drilling locations, including reserve estimates;- actual or anticipated fluctuations in our quarterly results of operations, and financial indicators, such as net income, cash flow and revenues;- our failure to meet revenue, reserves or earnings estimates by research analysts or other investors;- sales or purchases of our common stock by the Company or other stockholders, or the perception that such sales or purchases may occur;- the public reaction to our press releases, other public announcements, and filings with the SEC;- strategic actions by our competitors or competition for, among other things, capital, acquisition of reserves, undeveloped land and skilled personnel;- publication of research reports about us or the oil and natural gas exploration and production industry generally;- changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts;- speculation in the press or investment community;- the failure of research analysts to cover our common stock;- increases in market interest rates or funding rates, which may increase our cost of capital;- changes in market valuations of similar companies;- changes in accounting principles, policies, guidance, interpretations or standards;- additions or departures of key management personnel;- actions by our stockholders;- commencement or involvement in litigation;- general market conditions, including fluctuations in commodity prices;- political conditions in oil and natural gas producing regions;- domestic and international economic, legal and regulatory factors unrelated to our performance; and - the realization of any risks described under this "Risk Factors" section. In the past, following periods of volatility in the market price of a company's securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our business, financial condition, results of operations and reputation.

Future sales or repurchases or the availability for sale or repurchase of substantial amounts of our common stock in the public market, or the perception that such sales or repurchases could occur, could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through future sales of equity securities. On May 10, 2024, we filed with the SEC a "shelf" registration statement on Form S-3 that became effective on May 29, 2024. The registration statement registers securities that may be issued by the Company in a maximum aggregate amount of up to $250,000,000, as well as up to 12,037,813 shares of common stock that may be resold by certain selling stockholders named in therein. Sales by the Company of securities under a registration statement or in private placements, could be dilutive to existing shareholders. Additionally, sales by the Company or selling stockholders of securities, or the perception that such sales may occur, could adversely affect the trading price for our common stock. We may issue shares of our common stock or other securities from time to time as consideration for future acquisitions and investments. If any such acquisition or investment is significant, the number of shares of our common stock, or the number or aggregate principal amount, as the case may be, of other securities that we may issue may in turn be substantial. We may also grant registration rights covering those shares of our common stock or other securities in connection with any such acquisitions and investments. We cannot predict the size of future issuances of our common stock or sales by our selling stockholders or the effect, if any, that future issuances and sales of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares of our common stock issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock.

Pursuant to our publicly announced stock repurchase plan, we are authorized to repurchase up to $100 million of our common stock over a period of 24 months, including through open market purchases, through block trades, in privately negotiated transactions, or by other means, including through the use of trading plans, each in accordance with applicable securities laws and other restrictions. The timing, amount, and manner of any purchase will be determined at the Company's discretion, subject to management's assessment of the intrinsic value of the common stock, the market price of the common stock, general market and economic conditions, available liquidity, compliance with the Company's debt and other agreements, applicable legal requirements, and other considerations. This activity could impact the market price of our common stock at that time. Additionally, repurchases under our stock repurchase program will diminish our cash reserves, which could impact our ability to pursue possible strategic opportunities and acquisitions. There can be no assurance that any share repurchases will enhance stockholder value because the market price of our common stock could decline. Although our stock repurchase program is intended to enhance long-term stockholder value, short-term share price fluctuations could reduce the program's effectiveness.

Our common stock is listed for quotation on the NYSE American and we are required to meet specified financial requirements, including requirements for a minimum amount of capital, a minimum price per share, a minimum public float, and continued business operations so that we are not delisted or characterized as a "public shell company." If we are unable to comply with the NYSE American stock exchange's listing standards, NYSE may determine to delist our common stock from the NYSE American stock exchange or other of NYSE's trading markets. If our common stock is delisted for any reason, it could reduce the value of our common stock and liquidity.

The trading market for our common stock relies, in part, on the research and reports that industry or financial analysts publish about us or our business. Equity research analysts may elect not to provide research coverage of our common stock, and such lack of research coverage may adversely affect the market price of our common stock. In the event we do have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports. The price of our common stock could decline if one or more equity research analysts downgrade our stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which in turn could cause our stock price or trading volume to decline.

Our certificate of incorporation authorizes us to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our Board may determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock.

As of December 31, 2025, our executive officers, directors and principal stockholders, in the aggregate, own 51.7% of the fully diluted common stock of the Company. As a result, if these stockholders were to choose to act together, they would be able to control or significantly influence all matters submitted to the Company's stockholders for approval, as well as the Company's management and affairs. For example, these persons, if they choose to act together, would control or significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of the Company's assets. This concentration of voting power could delay or prevent an acquisition of the Company on terms that other stockholders may desire.

Provisions in our corporate charter and by-laws may discourage, delay or prevent a merger, acquisition or other changes in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our Board is responsible for appointing the members of the management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove current management by making it more difficult for stockholders to replace members of our board of directors. Among other things, these provisions: - allow the authorized number of directors to be changed only by resolution of the Board;- after a certain date, limit the manner in which stockholders can remove directors from the Board;- establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to the Board;- after a certain date, require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by written consent;- limit who may call stockholder meetings;- authorize the Board to issue preferred stock without stockholder approval, which could be used to institute a shareholder rights plan, or so-called "poison pill," that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by the Board; and - after a certain date, require the approval of the holders of at least 66 2/3% of the votes that all the stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.

Our bylaws provide that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on the Company's behalf, any action asserting a breach of fiduciary duty owed by Company's directors, officers, other employees or stockholders to the Company or our stockholders, any action asserting a claim against the Company arising pursuant to the Delaware General Corporation Law or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or any action asserting a claim arising pursuant to the Company's certificate of incorporation or bylaws or governed by the internal affairs doctrine. Our bylaws provide that, unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for any actions arising under the Securities Act of 1933, as amended, or the Exchange Act. These provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or our directors, officers, employees or stockholders, which may discourage such lawsuits against the Company and our directors, officers, employees or stockholders. Alternatively, if a court were to find these provisions in our bylaws to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

Investment funds managed by certain of our stockholders are in the business of making investments in entities in the U.S. energy industry. As a result, certain of our stockholders may, from time to time, acquire interests in businesses that directly or indirectly compete with our business, as well as businesses that are significant existing or potential customers. Certain of our stockholders and their respective portfolio companies may acquire or seek to acquire assets that we seek to acquire and, as a result, those acquisition opportunities may not be available to us or may be more expensive for us to pursue. Under our certificate of incorporation, certain of our stockholders and/or one or more of their respective affiliates are permitted to engage in business activities or invest in or acquire businesses which may compete with our business or do business with any client of ours. Any actual or perceived conflicts of interest with respect to the foregoing could have an adverse impact on the trading price of our common stock.