FLMN Falcon Minerals Corporation

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 28, 2022

1401 Lawrence Street, Suite 1750

Denver, Colorado 80202

(Address of principal executive offices, including Zip Code)

(720) 640-7620

(Registrant’s telephone number, including area code)

Sitio Royalties Corp.

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

INTRODUCTORY NOTE

As previously disclosed, on September 6, 2022, STR Sub Inc. (formerly Sitio Royalties Corp.) (“Former Sitio”) entered into the Agreement and Plan of Merger (the “Merger Agreement”), among Former Sitio, MNRL Sub Inc. (formerly Brigham Minerals, Inc.), a Delaware corporation (“Brigham”), Brigham Minerals Holdings, LLC, a Delaware limited liability company (“Brigham Opco”), Sitio Royalties Operating Partnership, LP, a Delaware limited partnership (“Opco LP”), Sitio Royalties Corp. (formerly Snapper Merger Sub I, Inc.), a Delaware corporation (“New Sitio”), Snapper Merger Sub IV, Inc., a Delaware corporation (“Brigham Merger Sub”), Snapper Merger Sub V, Inc., a Delaware corporation (“Sitio Merger Sub”), and Snapper Merger Sub II, LLC, a Delaware limited liability company (“Opco Merger Sub LLC”).

The Merger Agreement provides for the acquisition of Brigham by Former Sitio in an all-stock transaction through: (i) the merger of Brigham Merger Sub with and into Brigham (the “Brigham Merger”), with Brigham surviving the Brigham Merger as a wholly owned subsidiary of New Sitio, (ii) the merger of Sitio Merger Sub with and into Former Sitio (the “Sitio Merger”), with Former Sitio surviving the Sitio Merger as a wholly owned subsidiary of New Sitio, and (iii) the merger of Opco Merger Sub LLC with and into Brigham Opco (the “Opco Merger,” and, together with the Brigham Merger and the Sitio Merger, the “Mergers”), with Brigham Opco surviving the Opco Merger as a wholly owned subsidiary of Opco LP, in each case on the terms set forth in the Merger Agreement. For a more detailed description of the Mergers, please see the Definitive Consent Solicitation Statement on Schedule 14A filed with the SEC by Former Sitio on November 23, 2022.

The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which is included as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.

As described further under Item 5.07, consent of the holders of Former Sitio’s common stock was required to adopt the Merger Agreement and approve the Mergers. Former Sitio’s consent solicitation period expired on December 28, 2022 and the requisite stockholder consents for the adoption of the Merger Agreement and the approval of the Mergers were received. Brigham held a special meeting of its stockholders on December 28, 2022, during which stockholders of Brigham voted to adopt the Merger Agreement and approve the Mergers. As a result, effective as of December 29, 2022, the Mergers were consummated in accordance with the Merger Agreement. As part of the Mergers, Former Sitio became a wholly owned subsidiary of New Sitio. Upon the consummation of the Mergers, Former Sitio changed its name from “Sitio Royalties Corp.” to “STR Sub Inc.”

On December 29, 2022, Opco LP and the other guarantors party thereto entered into that certain Fourth Amendment to Credit Agreement (the “RBL Fourth Amendment”), pursuant to which, among other things, the Credit Agreement was amended to (i) permit the consummation of, and the transactions contemplated by, the Mergers described above, (ii) reaffirm the borrowing base under the Former Sitio Credit Agreement at $300,000,000, (iii) designate certain subsidiaries of Brigham as unrestricted subsidiaries (the “Brigham Unrestricted Subsidiaries”), (iv) require that the Brigham Unrestricted Subsidiaries become restricted subsidiaries under the Former Sitio Credit Agreement on or before June 30, 2023 and (v) include restrictions on the amount of debt that can be incurred by the Brigham Unrestricted Subsidiaries before they are designated as restricted subsidiaries under the RBL Credit Agreement.

The above references to and description of the RBL Fourth Amendment do not purport to be complete and are qualified in their entirety by reference to the RBL Fourth Amendment, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

First Amendment to Note Purchase Agreement

On September 21, 2022, Opco LP, as issuer, and certain subsidiaries of Opco LP as guarantors entered into that certain Note Purchase Agreement (the “Note Purchase Agreement”) with certain banks, financial institutions, lending institutions and other institutional investors party thereto as holders (the “Holders”) and U.S. Bank Trust Company, National Association, as agent for the Holders, pursuant to which Opco LP issued senior unsecured notes to the Holders in an aggregate principal amount of $450,000,000 (the “2026 Senior Notes”).

On December 29, 2022, Opco LP and the guarantors entered into that certain First Amendment to Note Purchase Agreement (the “NPA First Amendment”), pursuant to which, among other things, the Note Purchase Agreement was amended to (i) ( designate the Brigham Unrestricted Subsidiaries as unrestricted subsidiaries under the Note Purchase Agreement, (ii) require that the Brigham Unrestricted Subsidiaries become restricted subsidiaries under the Note Purchase Agreement and the RBL Credit Agreement (as defined in the Note Purchase Agreement on or before June 30, 2023 (iii) postpone the automatic 0.75% (or, in certain circumstances, 1.75%) reduction of the applicable margin on the 2026 Senior Notes from the date when the Mergers are consummated to the date when the Brigham Unrestricted Subsidiaries are designated as restricted subsidiaries under the Note Purchase Agreement and (iv) include restrictions on the amount of debt that can be incurred by the Brigham Unrestricted Subsidiaries before they are designated as restricted subsidiaries under the Note Purchase Agreement.

The above references to and description of the NPA First Amendment do not purport to be complete and are qualified in their entirety by reference to the NPA First Amendment, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

Amendment to the Second Amended and Restated Agreement of Limited Partnership of Opco LP

In connection with the Closing, Sitio Royalties GP, LLC, a Delaware limited liability company and wholly owned subsidiary of Former Sitio, entered into an amendment (the “Sitio Opco LPA Amendment”) to the Second Amended and Restated Agreement of Limited Partnership of Opco LP (as amended, the “Sitio Opco LPA”) as the sole general partner of Opco LP. The Sitio Opco LPA Amendment provides that the references to Former Sitio in the Sitio Opco LPA is amended to refer to New Sitio, among other things.

The Sitio Opco LPA after giving effect to the Sitio Opco LPA Amendment also provides that, on the exercise by a limited partner of Opco LP to redeem Sitio Opco Partnership Units, Opco LP will be entitled to settle any such redemption by delivering to the redeeming limited partner, in lieu of shares of New Sitio Class A Common Stock, an amount of cash equal to: (a) other than in the case of clause (b), if the New Sitio Class A Common Stock trades on a securities exchange or automated or electronic quotation system, the product of (x) the number of shares of New Sitio Class A Common Stock that would have been received in such redemption and (y) the volume-weighted average price per share of New Sitio Class A Common Stock for the five consecutive full trading days immediately prior to the delivery of the notice of redemption; (b) if the redemption is in connection with an underwritten offering to the public equity securities of New Sitio pursuant to a registration statement, the product of (x) the number of shares of New Sitio Class A Common Stock that would have been received in such redemption and (y) the price per share of New Sitio Class A Common Stock sold in such public offering (reduced by the amount of any discount associated with such share of New Sitio Class A Common Stock); or (c) if the New Sitio Class A Common Stock no longer trades on a securities exchange or automated or electronic quotation system, the product of (x) the number of shares of New Sitio Class A Common Stock that would have been received in such redemption and (y) the fair market value of one share of New Sitio Class A Common Stock as determined in good faith by the general partner of Opco LP. A description of the Sitio Opco LPA is included in Former Sitio’s Current Report on Form 8-K, dated June 7, 2022. The foregoing description of the Sitio Opco LPA is a summary only and is qualified in its entirety by reference to the full text of the Sitio Opco LPA, a copy of which was filed with the SEC on June 7, 2022 as Exhibit 10.3 to Former Sitio’s Current Report on Form 8-K.

This summary and the information incorporated herein by reference is qualified in its entirety by reference to the text of the Sitio Opco LPA Amendment, which is included as Exhibit 10.4 to this Current Report and is incorporated herein by reference.