Company: REI
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0001628280-25-010585
Chunk: 115

Company: RING ENERGY, INC.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 16
Chunk 115
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 third-party escrow account as a deposit pursuant to the Founders Purchase Agreement, (ii) approximately $42.5 million in cash paid on the closing date, net of approximately $10 million of preliminary and customary purchase price adjustments with an effective date of April 1, 2023, and (iii) a deferred cash payment of $11.9 million paid on December 18, 2023, net of customary purchase price adjustments.The Founders Acquisition was accounted for as an asset acquisition in accordance with ASC 805. The fair value of the consideration paid by Ring and allocation of that amount to the underlying assets acquired, on a relative fair value basis, was recorded on Ring’s books as of the date of the closing of the Founders Acquisition. Additionally, costs directly related to the Founders Acquisition were capitalized as a component of the purchase price. Determining the fair value of the assets and liabilities acquired required judgment and certain assumptions to be made, the most significant of these being related to the valuation of Founder’s oil and gas properties. The inputs and assumptions related to the oil and gas properties are categorized as level 3 in the fair value hierarchy.The following table represents the final allocation of the total cost of the Founders Acquisition to the assets acquired and liabilities assumed as of the Founders Acquisition date:Consideration:Cash considerationEscrow deposit released at closing$7,500,000 Closing amount paid to Founders42,502,799 Interest from escrow deposit1,747 Fair value of deferred payment liability14,657,383 Post-close adjustments(4,139,244)Total cash consideration$60,522,685 Direct transaction costs1,361,843 Total consideration$61,884,528 Fair value of assets acquired:Oil and natural gas properties$64,886,472 Amount attributable to assets acquired$64,886,472 Fair value of liabilities assumed:Suspense liability$677,116 Asset retirement obligations2,090,777 Ad valorem tax liability234,051 Amount attributable to liabilities assumed$3,001,944 Net assets acquired$61,884,528 Approximately $18.0 million of revenues and $5.0 million of direct operating expenses attributed to the Founders Acquisition are included in the Company’s Statements of Operations for the period from August 16, 2023 through December 31, 2023.

F-23

New Mexico DivestitureOn September 27, 202