HOUSTON, June 28, 2021 /PRNewswire/ -- U.S. Well Services, Inc. (the "Company", "U.S. Well Services" or "we") (NASDAQ: USWS) today announced it has entered into a series of strategic transactions that position the Company to execute on its previously announced strategic plan to grow and become a fully-electric hydraulic fracturing services provider. U.S. Well Services issued $125.5 million of 16.0% Convertible Senior Secured (Third Lien) PIK Notes due June 2026 (the "Notes") in a private placement to institutional investors (the "Private Placement"). In connection with the Private Placement, the Company sold $64.0 million of Notes convertible into U.S. Well Services Class A Common Stock (the "Cash Notes") and $22.5 million of Notes convertible into licenses to ProFrac Manufacturing, LLC ("ProFrac") to build three hydraulic fracturing fleets using the Company's Clean Fleet® technology (the "License Notes"). U.S. Well Services has also taken substantial steps towards simplifying the Company's capital structure. The Company exchanged $39.0 million of its Series A Redeemable Convertible Preferred Stock for $39.0 million of newly issued Notes convertible into U.S. Well Services Class A Common Stock (the "Exchange Notes"). Additionally, the Company expects to amend the Certificate of Designations for its Series B Redeemable Convertible Preferred Stock (the "Series B"), which would allow U.S. Well Services to convert all outstanding shares of the Series B. Following entry of the final judgment by the Superior Court of Delaware in the Smart Sand v. U.S. Well Services LLC litigation awarding Smart Sand approximately $52 million, the Company agreed to settle the case for $35.0 million in cash and the entry into an agreement to provide Smart Sand certain rights of first refusal related to the supply of frac sand (the "Settlement"). Proceeds from the Private Placement will be used to fund the cash portion of the Settlement and to fund capital expenditures related to four Nyx Clean Fleets® and place deposits on critical items for two additional Nyx Clean Fleets®, as well as for general corporate purposes. These capital expenditures are expected to enable the Company to grow its asset portfolio up to 11 all-electric fleets representing approximately 593,500 hydraulic horsepower.
Key Transaction Highlights:
"Although we were disappointed by the Superior Court of Delaware's decision in our litigation with Smart Sand, U.S. Well Services is pleased to have resolved this matter and looks forward to strengthening our balance sheet and resuming the execution of our strategic plan," commented Joel Broussard, U.S. Well Services' President and CEO. "With this Private Placement, U.S. Well Services has not only simplified our capital structure and secured funds to begin the development of our new Nyx Clean Fleet® pumps, but also confirmed the value of our intellectual property through the licensing agreement with ProFrac."
Simmons Energy, A Division of Piper Sandler, acted as exclusive financial advisor to the Special Committee of the Board of Directors for U.S Well Services, Inc.
This press release is neither an offer to sell nor a solicitation of an offer to purchase the securities described herein.
About U.S. Well Services, Inc.
U.S. Well Services, Inc. is a leading provider of hydraulic fracturing services and a market leader in electric fracture stimulation. The Company's patented electric frac technology provides one of the first fully electric, mobile well stimulation systems powered by locally supplied natural gas including field gas sourced directly from the wellhead. The Company's electric frac technology dramatically decreases emissions and sound pollution while generating exceptional operational efficiencies including significant customer fuel cost savings versus conventional diesel fleets. For more information visit: www.uswellservices.com. The information on our website is not part of this release.
The information above includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included herein concerning, among other things, the private placement and the use of proceeds and the expected impact of the transactions on the Company's financial position and prospects, if at all, are forward-looking statements. These forward-looking statements may be identified by their use of terms and phrases such as "may," "expect," "believe," "intend," "estimate," "project," "plan," "may," "anticipate," "will," "should," "could," and similar terms and phrases. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties. These forward-looking statements represent the Company's current expectations or beliefs concerning future events, and it is possible that the results described in this release will not be achieved. These forward-looking statements are subject to certain risks, including the ability and willingness of the Organization of Petroleum Exporting Countries ("OPEC") and non–OPEC countries, such as Russia, to set and maintain production levels and prices for oil, and the impact of epidemics, pandemics or other major public health issues, such as the COVID–19 coronavirus, as well as the other risks, uncertainties and assumptions identified in this release or as disclosed from time to time in the Company's filings with the Securities and Exchange Commission (the "SEC"). Factors that could cause actual results to differ from the Company's expectations include changes in market conditions and other factors described in the Company's public disclosures and filings with the SEC, including those described under "Risk Factors" in its annual report on Form 10-K filed on March 11, 2021 and in our quarterly reports on Form 10-Q. As a result of these factors, actual results may differ materially from those indicated or implied by forward-looking statements.
Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for us to predict all such factors.
U.S. Well Services
Vice President, Finance and Investor Relations
Dennard Lascar Investor Relations
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