What changed in this filing

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Item 9A. Controls and Procedures

2022-03-30 compared with 2021-02-26 · 90 added, 54 removed, 111 unchanged (56% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a‑15(e) under the Exchange Act, we have evaluated, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d‑15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K.

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

Any controls and procedures, no matter how well designed and operated can only provide reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of all possible controls and procedures.

Based upon this evaluation our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report, at a reasonable assurance level.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Disclosure controls and procedures are controls and other procedures that are designed to ensure 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 Securities and Exchange Commission’s rules and forms.

Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of December 31, 2021 due to the material weakness identified and described below.

In light of the material weakness described below, management performed additional analysis and other procedures to ensure that our interim and annual consolidated financial statements were prepared in accordance with U.S.

generally accepted accounting principles (GAAP).

Accordingly, management believes that the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f).

The internal control over financial reporting is a process designed under the supervision and with the participation of our principal executive officer and principal financial officer, and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting includes policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect transactions of the Company;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles;

• provide reasonable assurance regarding prevention or timely detection of unauthorized transactions.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with our policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, with the participation of our principal executive and principal financial officers, based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.

Based on this assessment, management concluded that the Company maintained effective internal control over financial reporting as of December 31, 2020.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

Internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with U.S.

Our internal control over financial reporting includes those policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

• provide reasonable assurance that transactions are recorded properly to allow for the preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.

Further, because of changing conditions, effectiveness of internal control over financial reporting may vary over time.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021 based on the guidelines established in the Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on its assessment, management concluded that the Company’s internal control over financial reporting was ineffective as of December 31, 2021 due to a material weakness in our control environment whereby the Company did not have adequate controls over the accounting for complex transactions to sufficiently mitigate risks of material misstatement.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

We will not be required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404 until our first Annual Report subsequent to our ceasing to be an "emerging growth company" within the meaning of Section 2(a)(19) of the Exchange Act.

As a result, such attestation report is excluded from this annual report form 10-K.

The Company is working to remediate the material weakness in internal control over financial reporting and is taking steps to improve the internal control environment.

Specifically, the Company is enhancing processes, and designing and implementing additional internal controls to properly account for complex transactions.

Additionally, the Company is hiring additional accounting personnel and implementing training of new and existing personnel on proper execution of designed control procedures.

The material weakness will be considered remediated when management concludes that, through testing, the applicable remediated controls are designed and implemented effectively.

We expect remediation of the material weaknesses will be completed in fiscal year 2022.

Changes in Internal Control over Financial Reporting

Other than the material weakness described above, there were no changes in our internal control over financial reporting that occurred during the quarter-ended December 31, 2021 that have materially affected, or are reasonably likely to materially effect, our internal control over financial reporting.

Attestation Report of the Registered Public Accounting Firm

Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal controls over financial reporting for as long as we are an “emerging growth company” pursuant to the provisions of the JOBS Act.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the year ended December 31, 2020 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Material Weakness in Internal Control over Financial Reporting

As of December 31 , 2021, we identified a material weakness in internal controls over financial reporting.

The material weakness related to ineffective controls over accounting for non-routine and/or complex transactions.

To address this material weakness, we along with the oversight of our audit committee, are evaluating our controls over accounting for non-routine and/or complex transactions in an effort to identify additional controls to timely identify misstatements and strengthen our overall control environment as well as continuing to assess our accounting personnel staffing requirements.

Other Information

Not applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

7 unchanged sentences

Principal Accounting Fees and Services

Our independent registered public accounting firm is BDO USA, LLP, Houston, Texas, Auditor Firm ID:

Please see the information appearing in the proposal for the ratification of the appointment of our independent registered public accounting firm in the definitive proxy statement for our 2022 Annual Meeting of Shareholders for the information this Item 14 requires that is incorporated herein by reference.

8 unchanged sentences

333-218139) filed with the Commission on August 1, 2017).

2.2† Asset Purchase Agreement, dated July 8, 2021 by and among PerfX Wireline Services, LLC, Bravo Wireline, LLC, Ranger Energy Services, Inc., Charlie Thomas, Shelby Sullivan, Jeff Thomas and Jimmie Hayes (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on July 14, 2021

2.3† Asset Purchase Agreement dated as of September 15, 2021, by and among Ranger Energy Acquisition, LLC, Basic Energy Services, Inc., Basic Energy Services, L.P., C&J Well Services, Inc., Taylor Industries, LLC and KVS Transportation, Inc.

(incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on October 4, 2021).

2.4† Closing Agreement and Amendment No.

1 to Asset Purchase Agreement, dated as of October 1, 2021, by and among Ranger Energy Acquisition, LLC, Basic Energy Services, Inc., Basic Energy Services, L.P., C&J Well Services, Inc., Taylor Industries, LLC and KVS Transportation Inc.

(incorporated by reference to Exhibit 2.2 to the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on October 4, 2021).

3.1 Amended and Restated Certificate of Incorporation of Ranger Energy Services, Inc.

22 unchanged sentences

333‑220018) filed with the Commission on August 17, 2017)

10.5† Form of Ranger Energy Services, Inc.

Performance Stock Unit Award Incentive Agreement (2019) (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 10-Q filed with the Commission on May 1, 2019)

10.6† Form of Ranger Energy Services, Inc.

Performance Stock Unit Award Incentive Agreement (2020)

10.7 Tax Receivable Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8‑K (File No.

001‑38183) filed with the Commission on August 22, 2017)

Tax Receivable Termination and Settlement Agreement entered into as of September 10, 2021, by and among Ranger Energy Services, Inc., affiliates of CSL Capital Management, L.P., and Bayou Well Holdings Company, LLC.

(incorporated by reference to Exhibit 10.4 of the Registrant’s Form 8-K (File No.

001- 38183) filed with the Commission on October 4, 2021).

10.9 Credit Agreement (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8‑K (File No.

001‑38183) filed with the Commission on August 22, 2017)

10.7† Indemnification Agreement (Darron M.

Anderson) incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on August 22, 2017)

10.10† Indemnification Agreement (William M.

10 unchanged sentences

001‑38183) filed with the Commission on August 22, 2017)

10.12† Indemnification Agreement (Merrill A.

Miller Jr.) (incorporated by reference to Exhibit 10.10 to the Registrant’s Form 8‑K (File No.

001‑38183) filed with the Commission on August 22, 2017)

10.14† Indemnification Agreement (Krishna Shivram) (incorporated by reference to Exhibit 10.14 to the Registrant’s Form 8‑K (File No.

4 unchanged sentences

001‑38183) filed with the Commission on March 26, 2020)

10.16† Executive Agreement (Darron M.

Anderson) (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed with the Commission on May 10, 2018)

10.17 Employment Agreement (J.

Brandon Blossman) (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Commission on June 7, 2018)

10.17† Indemnification Agreement (Michael C.

Kearney) (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed with the Commission on July 31, 2018)

10.18† Indemnification Agreement (J.

Brandon Blossman) (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed with the Commission on June 7, 2018)

10.19† Indemnification Agreement, dated as of September 1, 2021, by and between the Ranger Energy Services, Inc.

and Stuart Bodden (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on September 8, 2021).

10.20 Employment Agreement, dated as of September 1, 2021, by and between Ranger Energy Services, Inc.

and Stuart Bodden (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on September 8, 2021).

10.21 Employment Agreement (J.

Brandon Blossman) (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the Commission on June 7, 2018)

10.22 Master Financing and Security Agreement (incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K filed with the Commission on June 22, 2018)

10.20† Indemnification Agreement (Michael C.

Kearney) (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed with the Commission on July 31, 2018)

10.21† Employment Agreement, (Mario H.

Hernandez) (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed with the Commission on February 21, 2019)

10.23† Form of Ranger Energy Services, Inc.

Performance Stock Unit Award Incentive Agreement (2018) (incorporated by reference to Exhibit 10.21 of the Registrant’s Form 10-K Filed with the Commission on February 28, 2020)

10.23† Form of Ranger Energy Services, Inc.

Performance Stock Unit Award Incentive Agreement (2019) (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 10-Q filed with the Commission on May 1, 2019)

10.24† Indemnification Agreement, dated as of November 28, 2018, by and between the Company and Mario H.

*10.25† Form of Ranger Energy Services, Inc.

Performance Stock Unit Award Incentive Agreement (2020)

10.24 Debt, Commitment Letter, dated as of September 10, 2021, by and among RNGR Energy Services, LLC, Eclipse Business Capital, LLC and Eclipse Business Capital SPV, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on September 29, 2021).

10.25 Loan and Security Agreement, dated as of September 27, 2021, by and among RNGR Energy Services, LLC and certain of its subsidiaries, Ranger Energy Services, Inc., the lenders party thereto, and Eclipse Business Capital LLC, as agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K (File No.

001- 38183) filed with the Commission on September 29, 2021).

10.26 First Amendment to the Loan and Security Agreement, dated January 7, 2022, by and among RNGR Energy Services, LLC and certain of its subsidiaries, Ranger Energy Services, Inc., the lenders party thereto, and Eclipse Business Capital, LLC, as agent (incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No.

001-38183) filed with the Commission on January 13, 2022).

10.27 Secured Promissory Note, date July 8, 2021 by and among Bravo Wireline, LLC and Chief Investments, LLC (incorporated by reference to Exhibit 2.2 to the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on July 14, 2021)

10.28 Guaranty Agreement, dated as of July 8, 2021 by Ranger Energy Services, Inc.

in favor of Chief Investments, LLC

10.29† Securities Purchase Agreement entered into as of September 10, 2021, by and between Ranger Energy Services, Inc., and the purchasers named therein (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on October 4, 2021).

10.30 Registration Rights Agreement made and entered into as of September 10, 2021, by and among Ranger Energy Services, Inc., and each of the parties listed on the signature pages therein (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on October 4, 2021).

10.31† Voting Agreement, dated as of September 10, 2021, entered into by and among Ranger Energy Services, Inc., affiliates of CSL Capital Management, L.P., and Bayou Well Holdings Company, LLC (incorporated by reference to Exhibit 10.3 of the Registrant’s Form 8-K (File No.

001-38183) filed with the Commission on October 4, 2021).

*21.1 List of subsidiaries of Ranger Energy Services, Inc.

21 unchanged sentences

Ranger Energy Services, Inc.

/s/ Darron M.

Anderson February 26, 2021

Anderson Date

/s/ Stuart N.

Bodden March 30, 2022

President, Chief Executive Officer and Director

2 unchanged sentences

Signature Title Date

/s/ Darron M.

Anderson President, Chief Executive Officer and Director February 26, 2021

Anderson (Principal Executive Officer)

Brandon Blossman Chief Financial Officer February 26, 2021

/s/ Stuart N.

Bodden President, Chief Executive Officer and Director March 30, 2022

Bodden (Principal Executive Officer)

Brandon Blossman Chief Financial Officer March 30, 2022

Brandon Blossman (Principal Financial Officer)

Hernandez Chief Accounting Officer February 26, 2021

Hernandez (Principal Accounting Officer)

/s/ Merrill A.

Chairman of the Board February 26, 2021

/s/ William M.

Austin Director February 26, 2021

Agee Director February 26, 2021

Austin Chairman of the Board March 30, 2022

Agee Director March 30, 2022

/s/ Richard E.

Agee Director February 26, 2021

/s/ Krishna Shivram Director February 26, 2021

Agee Director March 30, 2022

/s/ Krishna Shivram Director March 30, 2022

Krishna Shivram

/s/ Charles S.

Leykum Director February 26, 2021

Leykum Director March 30, 2022

/s/ Gerald C.

Cimador Director February 26, 2021

Cimador Director March 30, 2022

/s/ Michael C.

Kearney Director February 26, 2021

Dunn Director February 26, 2021

Kearney Director March 30, 2022

Dunn Director March 30, 2022

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 9A. Controls and Procedures