BATL Battalion Oil Corporation

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 24, 2024 

Battalion Oil Corporation

(Exact name of registrant as specified in its charter)

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Registrant’s telephone number, including area code: (832) 538-0300

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(Former name or former address, if changed since last report)

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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:

◻    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⌧    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

◻    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

◻    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Securities registered pursuant to Section 12(b) of the Act:

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. ◻
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Amendment to Merger Agreement

On January 24, 2024, Battalion Oil Corporation (the “Company” or “we”), Fury Resources, Inc., a Delaware corporation (“Parent”), and San Jacinto Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a direct, wholly owned subsidiary of Parent, entered into an Amendment (the “Amendment”) to the Agreement and Plan of Merger, dated as of December 14, 2023 (the “Merger Agreement”), by and among the Company, Parent and Merger Sub.

Pursuant to the Merger Agreement, Parent agreed to deposit amounts in cash into a segregated escrow account (the “Escrow Account”) established pursuant to that certain Escrow Agreement, dated as of December 14, 2023 (the “Escrow Agreement”), by and among Parent, the Company and Wilmington Trust, National Association, as escrow agent (the “Escrow Agent”) for purposes of securing Parent’s obligations pursuant to the Merger Agreement. Prior to the execution and delivery of the Merger Agreement, Parent had deposited $10,000,000 (the “Initial Deposit Amount”) into the Escrow Account and, pursuant to the terms of the Merger Agreement, agreed to deposit an additional $10,000,000 into the Escrow Account (the “Subsequent Deposit Amount”) on or before 5:00 p.m. Central Time on January 23, 2024  such that the aggregate funds contained in the Escrow Account would equal to $20,000,000 by such time (the “Full Escrow Funding”). For a summary of the material terms of the Merger Agreement and the Escrow Agreement, please see the Company’s Form 8-K filed with the Securities and Exchange Commission on December 18, 2023, which is incorporated by reference herein.

Subsequent to the execution of the Merger Agreement, and in order to facilitate the Full Escrow Funding on a timely basis, on January 24, 2024, the Company and Parent entered into the Amendment.  

The Amendment amends the Merger Agreement to reflect, among other things, the following changes:

In accordance with the terms of the Amendment, on January 24, 2024, Parent and the Company delivered joint written instructions to the Escrow Agent directing the Escrow Agent to distribute the Release Amount from the Escrow Account to the Company. Pursuant to the terms of the Escrow Agreement, the Escrow Agent is required to distribute such funds within one business day following its receipt of such joint written instructions.

Except as modified by the Amendment, the terms of the Merger Agreement in the form filed by the Company as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company on December 18, 2023 with the U.S. Securities and Exchange Commission, as amended, are unchanged.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is attached hereto as Exhibit 2.1 and is incorporated by reference herein.

Important Information for Investors and Stockholders

This communication is being made in respect of the proposed transaction involving the Company and Parent. In connection with the proposed transaction, the Company intends to file the relevant materials with the SEC, including a proxy statement on Schedule 14A and a transaction statement on Schedule 13e-3 (the “Schedule 13e-3”). Promptly after filing its definitive proxy statement with the SEC, the Company will mail the definitive proxy statement, the Schedule 13e-3 and a proxy card to each stockholder of the Company entitled to vote at the special meeting relating

to the proposed transaction. This communication is not a substitute for the proxy statement, the Schedule 13e-3 or any other document that the Company may file with the SEC or send to its stockholders in connection with the proposed transaction. The materials to be filed by the Company will be made available to the Company’s investors and stockholders at no expense to them and copies may be obtained free of charge on the Company’s website at www.battalionoil.com. In addition, all of those materials will be available at no charge on the SEC’s website at www.sec.gov. Investors and stockholders of the Company are urged to read the proxy statement, the Schedule 13e-3 and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction because they contain important information about the Company and the proposed transaction.

The Company and its directors, executive officers, other members of its management and employees may be deemed to be participants in the solicitation of proxies of the Company stockholders in connection with the proposed transaction under SEC rules. Investors and stockholders may obtain more detailed information regarding the names, affiliations and interests of the Company’s executive officers and directors in the solicitation by reading the Company’s Annual Report on Form 10-K, as amended on Form 10-K/A, for the fiscal year ended December 31, 2022, and the proxy statement, the Schedule 13e-3 and other relevant materials that will be filed with the SEC in connection with the proposed transaction when they become available. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the proposed transaction and the Schedule 13e-3 when they become available.

Forward-Looking Statements

All statements and assumptions in this communication that do not directly and exclusively relate to historical facts could be deemed “forward-looking statements.” Forward-looking statements are often identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “may,” “could,” “should,” “forecast,” “goal,” “intends,” “objective,” “plans,” “projects,” “strategy,” “target” and “will” and similar words and terms or variations of such. These statements represent current intentions, expectations, beliefs or projections, and no assurance can be given that the results described in such statements will be achieved. Forward-looking statements include, among other things, statements about the potential benefits of the proposed transaction; the prospective performance and outlook of the Company’s business, performance and opportunities; the ability of the parties to complete the proposed transaction and the expected timing of completion of the proposed transaction; as well as any assumptions underlying any of the foregoing. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of the Company’s control. Important factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to, (i) the risk that the proposed transaction may not be completed in a timely manner or at all; (ii) the failure to receive, on a timely basis or otherwise, the required approvals of the proposed transaction by the Company’s stockholders; (iii) the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); (iv) the possibility that competing offers or acquisition proposals for the Company will be made; (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction, including in circumstances, which would require the Company to pay a termination fee; (vi) the effect of the announcement or pendency of the proposed transaction on the Company’s ability to attract, motivate or retain key executives and employees, its ability to maintain relationships with its customers, suppliers and other business counterparties, or its operating results and business generally; (vii) risks related to the proposed transaction diverting management’s attention from the Company’s ongoing business operations; (viii) the amount of costs, fees and expenses related to the proposed transaction; (ix) the risk that the Company’s stock price may decline significantly if the Merger is not consummated; (x) the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; and (xi) other factors as set forth from time to time in the Company’s filings with the SEC, including its Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2022, as may be updated or supplemented by any subsequent Quarterly Reports on Form 10-Q or other filings with the SEC. Readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. The Company does not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this communication or to reflect the occurrence of unanticipated events except as required by law.

(d)Exhibits. The following exhibits are furnished as part of this Current Report on Form 8-K:

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Exhibit 2.1

Execution Copy

FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER

THIS FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER is made as of January 24, 2024 (this “Amendment”) by and among Battalion Oil Corporation, a Delaware corporation (the “Company”), Fury Resources, Inc., a Delaware corporation (“Parent”), and San Jacinto Merger Sub, Inc., a Delaware corporation (“Merger Sub”).  

WHEREAS, the Company, Parent and Merger Sub are parties to that certain Agreement and Plan of Merger, dated as of December 14, 2023 (the “Agreement”); and

WHEREAS, the Company, Parent and Merger Sub desire to amend certain terms of the Agreement to the extent provided herein.

NOW, THEREFORE, in consideration of foregoing and the mutual covenants and agreements contained herein, the parties, intending to be legally bound, agree as follows:

“Closing Failure Fee” means an amount equal to the Initial Deposit Escrow Amount; provided, however, that if this Agreement is terminated for any reason (other than a termination pursuant to Section 8.1(d)(vi)) at any time after 5:00 p.m. Central Time on February 5, 2024, then the “Closing Failure Fee” shall mean an amount equal to the Initial Deposit Escrow Amount plus the Subsequent Deposit Escrow Amount.

“Initial Escrow Deposit Amount” has the meaning set forth in Section 8.4(a).

“Subsequent Escrow Deposit Amount” has the meaning set forth in Section 8.4(a).

this Agreement is terminated (A) for any reason pursuant to Section 8.1 (including Section 8.1(d)(vi)), then the Company shall retain the Initial Escrow Deposit Amount (it being understood that such retention shall be deemed to be a payment by Parent to the Company of the Closing Failure Fee in an amount equal to the Initial Escrow Deposit Amount), or (B) (1) by the Company pursuant to Section 8.1(d)(i), Section 8.1(d)(iii), Section 8.1(d)(iv) or Section 8.1(d)(v) or (2) by either Parent or the Company pursuant to Section 8.1(b) under circumstances where the Company would have been entitled to terminate this Agreement pursuant to Section 8.1(d)(i), Section 8.1(d)(iii), Section 8.1(d)(iv) or Section 8.1(d)(v), and in the case of the foregoing clauses (1) and (2), such termination takes place after 5:00 p.m. Central Time on February 5, 2024, then the Company shall retain the Initial Escrow Deposit Amount as contemplated by the immediately preceding clause (A) (it being understood that such retention shall be deemed to be a partial payment by Parent to the Company of the Closing Failure Fee in an amount equal to the Initial Escrow Deposit Amount) and Parent shall pay to the Company the remainder of the Closing Failure Fee in accordance with Section 8.4(b)(iii).

Concurrently with the execution and delivery of this Agreement, Parent and the Company have entered into an escrow agreement, in the form attached hereto as Exhibit F (th  “Escrow Agreement”), with Wilmington Trust, National Association, as escrow agent (the “Escrow Agent”), pursuant to which, among other things, Parent shall (i) concurrently with the execution and delivery of this Agreement, deposit an amount in cash equal to $10,000,000 (the “Initial Escrow Deposit Amount”) into a segregated escrow account established by the Escrow Agent (the “Escrow Account”) and (ii) subsequent to the execution and delivery of this Agreement but in any event no later than 5:00 p.m. Central Time on February 5, 2024, deposit an amount in cash equal to $15,000,000 (the “Subsequent Escrow Deposit Amount”) into the Escrow Account (the deposit of the Subsequent Escrow Deposit Amount into the Escrow Account, the “Full Escrow Funding”) for the purpose of funding Parent’s obligations under this Agreement, including Section 8.3(b)(iv).

(b)Distributions of funds contained in the Escrow Account (the “Escrow Funds”) shall occur as follows:

(i)concurrently with the execution and delivery of this Amendment, Parent and the Company shall deliver joint written instructions to the Escrow Agent in the form attached hereto as Annex I instructing the Escrow Agent to distribute from the Escrow Account an amount in cash equal to $9,999,999.99, by wire transfer of immediately available funds to the account(s) designated in such instructions, to the Company (for the avoidance of doubt, Parent and the Company agree that the amounts distributed to the Company pursuant to this Section 8.4(b)(i) shall be retained by the Company and are not refundable or otherwise under an obligation to be returned to Parent, any Financing Sources or any of their respective Affiliates under any circumstances or in any respect);

(ii)if the Effective Time occurs and the transactions contemplated hereby are consummated in accordance with the terms hereof, Parent and the Company shall deliver join written instructions to the Escrow Agent instructing the Escrow Agent to distribute from the Escrow Account all of the Escrow Funds, by wire transfer of immediately available funds to the account(s) designated in such instructions, to the Paying Agent for the inclusion of such Escrow Funds in the Payment Fund (and, for the avoidance of doubt, the Escrow Funds will be deemed to be a part of the Payment Fund upon receipt by the Paying Agent);

(iii)if this Agreement is terminated in accordance with the terms hereof and the Company is entitled to receive the Closing Failure Fee in accordance with Section 8.3(b)(iv)(B), then the Company and Parent shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to distribute from the Escrow Account all of the Escrow Funds, by wire transfer of immediately available funds to the account(s) designated in such instructions, to the Company in satisfaction of Parent’s obligations under Section 8.3(b)(iv)(B); and

(iv)if this Agreement is terminated in accordance with the terms hereof and the Company is not entitled to receive the Closing Failure Fee in accordance with Section 8.3(b)(iv)(B), then the Company and Parent shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to distribute from the Escrow Account all of the Escrow Funds, by wire transfer of immediately available funds to the account(s) designated in such instructions, to Parent (or its designee).

[Signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.

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BATTALION OIL CORPORATION

By:/s/ Matthew Steele​ ​

Name:Matthew Steele
Title:Chief Executive Officer

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FURY RESOURCES, INC.

By:/s/ Ariella Fuchs​ ​

Name:Ariella Fuchs
Title:President and General Counsel

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SAN JACINTO MERGER SUB, INC.

By:/s/ Ariella Fuchs​ ​

Name:Ariella Fuchs
Title:President and General Counsel

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ANNEX I

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Joint Instructions

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See attached.

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JOINT RELEASE INSTRUCTION

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January 24, 2024

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VIA ELECTRONIC MAIL

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Wilmington Trust, National Association

50 South 6^th Street, Suite 1290

Minneapolis, MN 55402

Attn: Lance Schonert

Telephone No.: (612) 217-5681

Email: LSchonert@wilmingtontrust.com

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Re:Written Instructions to Release Escrow Funds

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Dear Mr. Schonert:

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Reference is made hereby to that certain Escrow Agreement, dated as of December 14, 2023 (the “Escrow Agreement”), by and among Fury Resources, Inc. (“Parent”), Battalion Oil Corporation (the “Company”) and Wilmington Trust, National Association, a national association, as escrow agent (the “Escrow Agent”). All capitalized terms used but not defined in this letter have the meanings given to them in the Escrow Agreement.

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Pursuant to Section 1.2 of the Escrow Agreement, the Company and Parent hereby instruct Escrow Agent to disburse $9,999,999.99 from the Escrow Property in the Termination Fee Escrow Account to the Company by wire transfer of immediately available funds to the account, and using the wire instructions, set forth below:

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Bank Name: [****]

ABA No.: [****]

Account Name: [****]

Account No.: [****]

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For the avoidance of doubt, (a) this letter is executed and delivered to the Escrow Agent jointly by Parent and the Company and is expressly intended to serve as Joint Instructions to the Escrow Agent contemplated by Section 1.2 of the Escrow Agreement and (b) since Escrow Property will remain in the Termination Fee Escrow Account after giving effect to the disbursement contemplated above, the Escrow Agreement remains in full force and effect and has not terminated automatically pursuant to Section 3.3 of the Escrow Agreement.

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This letter may be executed in two or more counterparts and delivered by .PDF or electronic mail, each of which will be deemed an original but all of which will constitute but one instrument.

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[Signature page follows]

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Sincerely,

BATTALION OIL CORPORATION

By: /s/ Matthew Steele​ ​

Name:Matthew Steele

Title:Chief Executive Officer

FURY RESOURCES, INC.

By: /s/ Ariella Fuchs​ ​

Name:Ariella Fuchs

Title:President and General Counsel

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