HOUSTON–(BUSINESS WIRE)–Falcon Minerals Corporation (NASDAQ: FLMN, FLMNW) (“Falcon“or the”Company”) today announced the results of the proposals considered and voted on by its shareholders at its special meeting of shareholders held on June 3, 2022 (the “Special meeting”). Falcon indicated that all of the various proposals giving effect to the previously announced merger (the “Merger”) between Falcon and Desert Peak Minerals (“desert peak”) were approved by the required number of common shares of Falcon voted at the special meeting. In addition, Falcon has indicated that the proposed director election (as defined in Falcon’s definitive proxy statement filed with the United States Securities and Exchange Commission (the “SECOND”) on May 5, 2022 (the “Proxy statement”)) was also approved by the required number of common shares of Falcon voted at the special meeting and, henceforth, William D. Anderson, Mark C. Henle and Adam M. Jenkins are hereby appointed class administrators II on Falcon’s board (the “Plank”) until the effective time of the Merger. A current report on Form 8-K disclosing the complete voting results will be filed with the SEC on June 3, 2022.
Amendment and update of Falcon’s certificate of incorporation
Following shareholder approval at the special meeting, Falcon has filed with the Secretary of State for the State of Delaware the Third Amended and Restated Certificate of Incorporation to be effective at 5:00 p.m. East on June 3, 2022, whereby Falcon, among other things, (i) changed its name to Sitio Royalties Corp., (ii) effected a four-for-one stock consolidation of Falcon’s Class A common stock, d ‘a par value of $0.0001 per share (the “Class A common shares”) and (iii) effected a four-for-one stock consolidation of the Class C common stock of Falcon, with a par value of $0.0001 per share (the “Class C common shares“, as well as the Class A common shares, the “Ordinary actions”).
Reverse stock split
Pursuant to the Share Consolidation, (i) each of the four Class A common shares issued and outstanding or held by the Company immediately prior to the Share Consolidation on or after 5:00 p.m. June 3, 2022 will be combined and reclassified as one issued, fully paid, non-assessment Class A common stock and (ii) each of the four issued and outstanding Class C common stock or held by the Company in cash immediately prior to the reversal stock split effective 5:00 p.m. Eastern Time, June 3, 2022, will be combined and reclassified into one issued, fully paid, tax-free share of Class C common stock , in each case, without any action required on the part of the Company or the holders of Ordinary Shares. In addition, the number of common shares subject to the warrants of the Company and the exercise price of such warrants will be adjusted by the same factor. The exercise price of the warrants was $11.21 before the stock consolidation and $44.84 after taking into account the stock consolidation. The number of ordinary shares subject to outstanding share awards and the number of shares reserved for future issuances under the Company’s share ownership plan will also be reduced by the same factor.
The reverse stock split will not affect a Falcon shareholder’s percentage ownership interest in Falcon, except to the extent that the reverse stock split results in one of Falcon’s stockholders holding a fractional share. Common shares issued pursuant to the reverse stock split will remain fully paid and non-taxable. The nominal value per share of the ordinary shares remains the same. The reverse stock split will not reduce the total number of common shares that the Company is authorized to issue, which will remain at 240,000,000 Class A common shares and 120,000,000 Class C common shares.
No fractional shares will be issued in connection with the reverse stock split. In lieu of fractional shares, shareholders of Class C common stock will receive cash equal to the fair value of such fractional Class C common stock as determined by the Board of Directors. In lieu of fractional Class A Common Shares, the aggregate of all fractional Class A Common Shares will be issued to the Exchange Agent and subsequent sale of such fractional Class A Common Shares will be sold at prevailing market rates and the proceeds of such sales, after deducting customary brokerage commissions and other expenses, will be distributed on a pro rata basis to shareholders who would otherwise be entitled to fractional Class A common shares.
Continental Stock Transfer & Trust Company, the company’s transfer agent, will act as the exchange agent for the stock consolidation. The Company’s shareholders hold shares registered in an account and therefore do not have to take any action.
Trading in the Class A common stock on a reverse stock split adjusted basis will begin at the opening of trading on the Nasdaq on June 6, 2022 under the new name Sitio Royalties Corp. and the new ticker symbol “STR”. The new CUSIP number for the Class A common stock following the reverse stock split is 82982V 101. The Company’s warrants will begin trading under the new symbol “STRDW” upon the opening of trading on the Nasdaq on June 6, 2022 with new CUSIP 82982V 119. .
Stock exchange listing and delisting
The merger is expected to close on June 7, 2022, at which time the combined company’s Class A common stock and warrants will continue to trade on Nasdaq Capital Markets LLC (“Nasdaq”) under the symbols “STR”. and “STRDW”. “The listing of the Class A common stock and warrants of the combined company will then transfer to the New York Stock Exchange and NYSE American LLC, respectively, on or about June 14, 2022, where the Class A common stock will retain the same ticker symbol and the warrants will trade under the new ticker symbol “STR WS”, and the Class A common stock and warrants of the combined company will subsequently be delisted from the Nasdaq. The Warrants will not meet Nasdaq’s initial listing standards upon closing of the Merger.
Additional information on the amendment to Falcon’s certificate of incorporation, the stock consolidation and the listing and delisting can be found in the company’s proxy statement, which is available free of charge on the website of the SEC, www.sec.gov, and on the Company’s website at www.falconminerals.com.
Falcon is an Up-C-Corporation created to own and acquire high quality oil-weighted mineral rights. Falcon holds mineral, royalty and overriding royalty interests spanning over 21,000 NRAs in the Eagle Ford and Austin Chalk shales in Karnes, DeWitt and Gonzales counties in Texas. The company also owns more than 12,000 NRAs in the Marcellus Shale in Pennsylvania, Ohio and West Virginia.
Desert Peak was founded by Kimmeridge, a private investment firm focused on energy solutions, to acquire, own and manage high-quality mineral and royalty interests in the Permian Basin with the goal of generating cash flow from transactions that can be returned to shareholders and reinvested. Desert Peak has accrued over 105,000 Net Royalty Acres (“NRA”, when normalized to a 1/8th royalty equivalent) through the completion of over 180 acquisitions to date.
This press release contains certain statements that may constitute “forward-looking statements” for purposes of federal securities laws. Forward-looking statements include, but are not limited to, statements referring to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “could”, “plan”, ” seek”, “possible”, “potential”, “predict”, “project”, “prospects”, “directions”, “prospects”, “should”, “would”, “shall” and similar expressions can identify statements forward-looking, but the absence of such words does not mean that a statement is not forward-looking. These statements include, but are not limited to, statements about Falcon’s and Desert Peak’s ability to perform the transactions described in this communication; expected benefits and timing of transactions; future dividends; and future plans, expectations and objectives for the operations of the combined company after completion of the transactions, including statements about strategy, synergies, future operations, financial condition, outlook, plans and objectives of the direction. Although forward-looking statements are based on assumptions and analyzes made by us that we believe are reasonable under the circumstances, whether actual results and developments will meet our expectations and forecasts depends on a number of risks and uncertainties that could cause our actual results, performance and financial condition to differ materially from our expectations. See “Risk Factors” in Falcon’s definitive proxy statement filed with the United States Securities and Exchange Commission (the “SEC”) on May 5, 2022 for a discussion of risk factors relating to the merger and to Desert Peak activities. See also Part I, Item 1A “Risk Factors” of Falcon’s Annual Report on Form 10-K for the year ended December 31, 2021 and Part II, Item 1A “Risk Factors” of Falcon’s Quarterly Report on Form 10-Q, each filed with the SEC for a discussion of risk factors that affect our business. Any forward-looking statement made in this press release speaks only as of the date on which it is made. Factors or events that could cause actual results to differ may arise from time to time and not all of them can be predicted. Neither Desert Peak nor Falcon undertakes to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as required by law.