Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Management’s Evaluation of Disclosure Controls and Procedures
In accordance with Rules 13a-15(f) and 15d-15(f), of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer, of the effectiveness of our disclosure controls and procedures based on the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023 to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Management has assessed our internal control over financial reporting as of December 31, 2023. The unqualified report of management thereon is included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K and is incorporated by reference herein.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, during the three months ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
N o n e .
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Pursuant to General Instruction 6 to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2023 Annual Meeting of Stockholders.
The Company's Code of Conduct and Code of Ethics for the Principal Executive Officer and Senior Financial Officers can be found on the Company's website located at www.battalionoil.com . Any stockholder may request a printed copy of such materials by submitting a written request to the Company's Corporate Secretary. If the Company amends the Code of Ethics or grants a waiver, including an implicit waiver, from the Code of Ethics, the Company will disclose the information on its website. The waiver information will remain on the website for at least twelve months after the initial disclosure of such waiver.
ITEM 11. EXECUTIVE COMPENSATION
Pursuant to General Instruction 6 to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2023 Annual Meeting of Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Equity Compensation Plan Information
The following table sets forth certain information as of December 31, 2023 with respect to compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.
Number of Securities
Remaining Available for
Future Issuance Under
Number of Securities
Weighted-Average
Equity Compensation
to be Issued Upon Exercise
Exercise Price of
Plans (Excluding
of Outstanding
Outstanding Options and
Securities Reflected in
Plan Category
Options and Rights(A) (1)
Rights
Column(A))
Equity compensation plans approved by security holders.
—
$
—
—
Equity compensation plans not approved by security holders (2)
384,358
28.32
1,067,966
384,358
$
28.32
1,067,966
(1) Consists of 251,536 unvested RSUs and outstanding 132,822 stock options.
(2) The formation of the plan was approved by the Bankruptcy Court upon confirmation of our Plan of Reorganization in 2019 and further approved by our board with an effective date of January 1, 2020.
Pursuant to General Instruction 6 to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2023 Annual Meeting of Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Pursuant to General Instruction 6 to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2023 Annual Meeting of Stockholders.
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Pursuant to General Instruction 6 to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2024 Annual Meeting of Stockholders.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(1) Consolidated Financial Statements:
The consolidated financial statements of the Company and its subsidiaries and reports of independent registered public accounting firms listed in Section 8 of this Annual Report on Form 10-K are filed as a part of this Annual Report on Form 10-K.
(2) Consolidated Financial Statements Schedules:
All schedules are omitted because they are inapplicable or because the required information is contained in the financial statements or included in the notes thereto.
(3) Exhibits:
2.1
Order of the Bankruptcy Court, dated September 24 2019, confirming the Joint Prepackaged Plan of Reorganization of Halcón Resources Corporation, et al, under Chapter 11 of the Bankruptcy Code, together with such Joint Prepackaged Plan of Reorganization (Incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed September 26, 2019).
2.2
Agreement and Plan of Merger, dated as of December 14, 2023, by and among the Battalion Oil Corporation, Fury Resources, Inc. and San Jacinto Merger Sub, Inc. (Incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed December 18, 2023).
2.2.1
First Amendment to Agreement and Plan of Merger, dated as of January 24, 2024, by and among Battalion Oil Corporation, Fury Resources, Inc. and San Jacinto Merger Sub, Inc. (Incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed January 24, 2024).
2.2.2
Second Amendment to Agreement and Plan of Merger, dated as of February 6, 2024, by and among Battalion Oil Corporation, Fury Resources, Inc. and San Jacinto Merger Sub, Inc. (Incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed February 6, 2024).
2.2.3
Third Amendment to Agreement and Plan of Merger, dated as of February 16, 2024, by and among Battalion Oil Corporation, Fury Resources, Inc. and San Jacinto Merger Sub, Inc. (Incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed February 16, 2024).
2.3
Limited Guarantee, dated February 6, 2024, by Abraham Mirman in favor of Battalion Oil Corporation (Incorporated by reference to Exhibit 2.2 of our Current Report on Form 8-K filed February 6, 2024).
3.1
Amended and Restated Certificate of Incorporation of Battalion Oil Corporation ( formerly Halcón Resources Corporation) dated October 8, 2019, as amended by the Certificate of Amendment, dated January 21, 2020 (Incorporated by reference to Exhibit 3.1 of our Annual Report on Form 10-K filed March 25, 2020).
3.1.1
Certificate of Designations of Series A Redeemable Convertible Preferred Stock effective March 24, 2023 (Incorporated by reference to Exhibit 3.1.1 of our Annual Report on Form 10-K filed March 30, 2023).
3.1.2
Certificate of Designations of Series A-1 Redeemable Convertible Preferred Stock effective September 6, 2023 (Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed September 7, 2023).
3.1.3
Certificate of Amendment to Certificate of Designations of Series A-1 Redeemable Convertible Preferred Stock effective December 15, 2023 (Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed December 18, 2023).
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3.1.4
Certificate of Designations of Series A-2 Redeemable Convertible Preferred Stock effective December 15, 2023 (Incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K filed December 18, 2023).
3.1.5
Certificate of Designations of Series A-3 Redeemable Convertible Preferred Stock dated effective March 27, 2024 (Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed March 28, 2024).
3.2
Seventh Amended and Restated Bylaws of Battalion Oil Corporation (Incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K filed January 27, 2020).
4.1
Description of Battalion Oil Corporation’s securities registered under Section 12 of the Exchange Act. (Incorporated by reference to Exhibit 4.1 of our Annual Report on Form 10-K filed March 25, 2020).
10.1
Amended and Restated Senior Secured Credit Agreement dated as of November 24, 2021, by and among Battalion Oil Corporation, as holdings, Halcón Holdings LLC, as borrower, the subsidiary guarantors party thereto, Macquarie Bank Limited, as administrative agent, and the lenders party thereto (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed November 29, 2021).
10.1.1
Second Amendment to Amended and Restated Senior Secured Credit Agreement dated as of November 14, 2022, by and among Halcón Holdings, LLC, as borrower, Macquarie Bank Limited, as administrative agent and the lenders party hereto, the guarantors party hereto and Battalion Oil Corporation, as holdings (Incorporated by reference to Exhibit 10.1.1 of our Quarterly Report on Form 10-Q filed November 14, 2022).
10.1.2
Third Amendment to Amended and Restated Senior Secured Credit Agreement dated as of March 28, 2024, by and among Halcón Holdings, LLC, as borrower, Macquarie Bank Limited, as administrative agent and the lenders party hereto, the guarantors party hereto and Battalion Oil Corporation, as holdings (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed March 28, 2024).
10.2
Warrant Agreement, dated October 8, 2019, by and between Halcón Resources Corporation and Broadridge Corporate Issuer Solutions, Inc., as warrant agent (Incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed October 8, 2019).
10.3
Registration Rights Agreement, dated October 8, 2019, by and among Halcón Resources Corporation and each of the parties thereto, as investors (Incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed October 8, 2019).
10.3.1
First Amendment to Registration Rights Agreement dated March 28, 2023, by and among Battalion Oil Corporation and each of the parties thereto, as investors (Incorporated by reference to Exhibit 10.3.1 of our Annual Report on Form 10-K filed March 30, 2023).
10.3.2
Second Amendment to Registration Rights Agreement dated September 6, 2023, by and among Battalion Oil Corporation and each of the parties thereto, as investors (Incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed September 7, 2023).
10.3.3
Third Amendment to Registration Rights Agreement dated December 15, 2023, by and among Battalion Oil Corporation and each of the other parties thereto, as investors (Incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed December 18, 2023).
10.3.4
Fourth Amendment to Registration Rights Agreement dated March 27, 2024, by and among Battalion Oil Corporation and each of the other parties thereto, as investors. (Incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed March 28, 2024).
10.4
†
Battalion Oil Corporation 2020 Long-Term Incentive Plan, effective as of January 1, 2020 (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed January 31, 2020).
10.4.1
†
Amendment No. 1 to the Battalion Oil Corporation 2020 Long-Term Incentive Plan, effective as of June 8, 2021 (Incorporated by reference to Exhibit 10.1.1 of our Current Report on Form 8-K filed June 14, 2021).
10.5
†
Employment Agreement between Richard H. Little and Battalion Oil Corporation effective as of January 28, 2020 (Incorporated by reference to Exhibit 10.5 of our Annual Report on Form 10-K filed March 25, 2020).
10.6
†
Employment Agreement between Daniel P. Rohling and Battalion Oil Corporation effective as of January 28, 2020 (Incorporated by reference to Exhibit 10.7 of our Annual Report on Form 10-K filed March 25, 2020).
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10.7
†
Offer Letter with Kristen McWatters dated January 20, 2023 (Incorporated by reference to Exhibit 10.7 of our Annual Report on Form 10-K filed March 30, 2023).
10.8
Purchase Agreement (Series A Preferred Stock), dated March 28, 2023, by and among Battalion Oil Corporation and each of the purchasers set forth on Schedule A thereto (Incorporated by reference to Exhibit 10.8 of our Annual Report on Form 10-K filed March 30, 2023).
10.9
Purchase Agreement (Series A-1 Preferred Stock), dated September 6, 2023, by and among Battalion Oil Corporation and each of the purchasers set forth on Schedule A thereto (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed September 7, 2023).
10.10
Purchase Agreement (Series A-2 Preferred Stock), dated December 15, 2023, by and among Battalion Oil Corporation and each of the purchasers set forth on Schedule A thereto (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed December 18, 2023).
10.11
Purchase Agreement (Series A-3 Preferred Stock), dated March 27, 2024, by and among Battalion Oil Corporation and each of the purchasers set forth on Schedule A thereto. (Incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed March 28, 2024).
10.12
†
Material Terms of Employment Arrangements between Walter R. Mayer and Battalion Oil Corporation (Incorporated by reference to Exhibit 10.9 of our Annual Report Amendment on Form 10-K/A filed April 28, 2023).
10.13
†
Form of Nonqualified Stock Option Award Agreement (Incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed January 31, 2020).
10.14
†
Form of Base Restricted Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed January 31, 2020).
10.15
†
Form of Performance-Based Restricted Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.4 of our Current Report on Form 8-K filed January 31, 2020).
10.16
†
Form of M&A Restricted Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.5 of our Current Report on Form 8-K filed January 31, 2020).
21.1
*
List of Subsidiaries of Battalion Oil Corporation
31
*
Sarbanes-Oxley Section 302 certification of Principal Executive Officer and Principal Financial Officer
32
*
Sarbanes-Oxley Section 906 certification of Principal Executive Officer and Principal Financial Officer
97
*
Incentive Compensation Recoupment Policy
99.1
*
Report of Netherland, Sewell & Associates, Inc.
101.INS
*
Inline XBRL Instance Document
101.SCH
*
Inline XBRL Taxonomy Extension Schema Document
101.CAL
*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
*
Inline XBRL Taxonomy Extension Definition Document
101.LAB
*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
*
Cover Page Interactive Data File (embedded within the Inline XBRL document)
*
Attached hereto.
†
Indicates management contract or compensatory plan or arrangement.
The registrant has not filed with this report copies of the instruments defining rights of all holders of long-term debt of the registrant and its consolidated subsidiaries based upon the exception set forth in Item 601(b)(4)(iii)(A) of Regulation S-K. Copies of such instruments will be furnished to the SEC upon request.
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BATTALION OIL CORPORATION
Date: March 29, 2024
By:
/s/ MATTHEW B. STEELE
Matthew B. Steele
Chief Executive Office
(Principal Executive Officer and Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ MATTEW B. STEELE
Matthew B. Steele
Director and Chief Executive Officer
March 29, 2024
/s/ JONATHAN BARRETT
Jonathan Barrett
Chairman of the Board
March 29, 2024
/s/ DAVID CHANG
David Chang
Director
March 29, 2024
/s/ GREGORY HINDS
Gregory Hinds
Director
March 29, 2024
/s/ AJAY JEGADEESAN
Ajay Jegadeesan
Director
March 29, 2024
/s/ WILLIAM ROGERS
William Rogers
Director
March 29, 2024
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