Empire Petroleum Corporation Enters \$3 Million Convertible Note Agreement with Phil E. Mulacek

Key Highlights

• Material Definitive Agreement: On February 19, 2026, Empire Petroleum Corporation (“Empire” or “the Company”) entered into a Material Definitive Agreement by issuing a promissory note of \$3,000,000 to Phil E. Mulacek.
• Immediate Funding: As of February 19, 2026, Mr. Mulacek has advanced the full \$3,000,000 under the Note.
• Use of Proceeds: The funds will be used to repay debt and for general working capital purposes.
• Convertible Feature: The Note is convertible at the holder’s option into shares of Empire’s common stock, subject to certain terms and conditions.
• NYSE American Listing: Empire will use commercially reasonable efforts to secure approval from NYSE American for a supplemental listing application related to the issuance of the underlying shares upon conversion.
• Related Party Transaction: Investors should note the material relationship between Empire and Mr. Mulacek, as disclosed in the Company’s proxy statement (April 30, 2025) and Form 10-Q (September 30, 2025).
• Unregistered Securities: The Note issuance was not registered under the Securities Act of 1933, relying on Section 4(a)(2) exemption. Mr. Mulacek is a sophisticated accredited investor.

Details for Investors and Shareholders

Convertible Note Terms:
The \$3 million promissory note issued to Mr. Mulacek can be converted into Empire Petroleum common stock at a specified conversion price. This provides an immediate capital infusion and may lead to future dilution if conversion occurs.

Price Sensitive Information:

• Potential Dilution: The conversion of debt into equity could increase the number of outstanding shares, affecting earnings per share and ownership percentages.
• Debt Repayment: Use of proceeds to repay debt strengthens the balance sheet but reduces cash reserves.
• NYSE Listing Approval: The Company is actively seeking NYSE American approval for supplemental listing of shares related to this Note, which is a prerequisite for conversion and may impact liquidity and trading dynamics.
• Material Relationship: The transaction involves a related party, Mr. Mulacek, whose ongoing relationship and potential influence on corporate governance may be relevant for shareholders.
• Unregistered Securities: The Note was issued in reliance on a private placement exemption, signaling a transaction with minimal public disclosure, which may be scrutinized by investors.

Legal and Financial Implications

Events of Default: The Note includes provisions for events of default, including failure to pay interest or principal within two business days of due date or material breaches by Empire. If default occurs and is not cured within five business days after notice, it may trigger immediate repayment or conversion rights.

Adjustment Mechanisms: The conversion price of the Note is subject to adjustment for stock dividends, splits, distributions, and fundamental transactions (such as mergers or asset sales). This protects the investor but may impact share value and capital structure.

Corporate Actions and Notices: Empire is required to notify the investor at least 20 days prior to any material corporate action, including dividends, mergers, or dissolution, giving the investor practical opportunity to convert the Note and participate in such events.

Potential Share Price Impact

• The issuance of a \$3 million convertible note, especially to a related party, is material and may affect investor sentiment.
• Future conversion of the Note into shares could result in dilution, potentially impacting share price negatively if perceived as excessive or poorly timed.
• Successful NYSE approval for supplemental listing may improve liquidity and facilitate conversion, which could be positive or negative depending on market perception.
• Improved balance sheet from debt repayment may be viewed positively, but the terms of the Note and potential dilution must be closely monitored.

Other Shareholder Considerations

• Shareholders should review disclosures in the Company’s proxy statement and Form 10-Q for details on Mr. Mulacek’s relationship with Empire.
• The full terms of the Note are available as Exhibit 10 to the Current Report on Form 8-K and are incorporated by reference for further detail.
• There are no written communications, soliciting materials, or pre-commencement tender offer communications associated with this Form 8-K filing.
• Empire Petroleum is not classified as an emerging growth company, as defined under SEC rules.

Conclusion

Empire Petroleum Corporation’s execution of a \$3 million convertible note with Phil E. Mulacek represents a significant financial event. The immediate capital infusion, potential for conversion into equity, and related party dynamics are all factors that shareholders must consider for their potential impact on share value and corporate governance.

Disclaimer:
This article is based on information extracted from Empire Petroleum Corporation’s Form 8-K filed with the SEC on February 19, 2026. It is intended for informational purposes only and should not be construed as investment advice. Investors are encouraged to review the full filing and consult with financial advisors before making investment decisions. The author does not accept any liability for the accuracy or completeness of the information provided.

View EMPIRE PETROLEUM CORP Historical chart here