UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from [ ] to [ ]
Commission file number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of |
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(I.R.S. Employer |
organization) |
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Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes
As of November 1, 2021, the registrant had
TABLE OF CONTENTS
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Page No. |
PART I |
FINANCIAL INFORMATION |
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Item 1. |
Financial Statements (Unaudited) |
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3 |
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4 |
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5 |
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7 |
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9 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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36 |
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2
PART I
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
U.S. WELL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
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September 30, 2021 |
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December 31, 2020 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable (net of allowance for doubtful accounts of $ |
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Inventory, net |
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Assets held for sale |
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- |
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Prepaids and other current assets |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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Other assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Notes payable |
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Current portion of long-term debt |
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Current portion of equipment financing |
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Current portion of capital lease obligations |
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Total current liabilities |
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Warrant liabilities |
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Long-term debt |
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Convertible senior notes |
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- |
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Long-term equipment financing |
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Long-term capital lease obligations |
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Other long-term liabilities |
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Total liabilities |
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Mezzanine equity: |
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Series A Redeemable Convertible Preferred Stock, par value $ |
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Series B Redeemable Convertible Preferred Stock, par value $ |
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Stockholders' deficit: |
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Class A Common Stock, par value of $ |
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Class B Common Stock, par value of $ |
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- |
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- |
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Additional paid in capital (1) |
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Accumulated deficit |
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( |
) |
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( |
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Total Stockholders' deficit |
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( |
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( |
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TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT |
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$ |
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$ |
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(1) Prior periods have been adjusted to reflect the 1-for- reverse stock split on September 30, 2021. See Note 2, Reverse Stock Split, for details.
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
U.S. WELL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Costs and expenses: |
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Cost of services (excluding depreciation and amortization) |
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Depreciation and amortization |
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Selling, general and administrative expenses |
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Impairment of long-lived assets |
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- |
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- |
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- |
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Litigation settlement |
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- |
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- |
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- |
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Loss (gain) on disposal of assets |
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( |
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( |
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Loss from operations |
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( |
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( |
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( |
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( |
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Interest expense, net |
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( |
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( |
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( |
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( |
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Change in fair value of warrant liabilities |
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( |
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Patent license sales |
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- |
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- |
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- |
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Gain on extinguishment of debt, net |
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- |
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- |
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Other income |
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Loss before income taxes |
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( |
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( |
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( |
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( |
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Income tax benefit |
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( |
) |
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( |
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( |
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Net loss |
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( |
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( |
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( |
) |
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( |
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Net loss attributable to noncontrolling interest |
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- |
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( |
) |
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( |
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( |
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Net loss attributable to U.S. Well Services, Inc. |
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( |
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( |
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( |
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( |
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Dividends accrued on Series A preferred stock |
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( |
) |
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( |
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( |
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( |
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Dividends accrued on Series B preferred stock |
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( |
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( |
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( |
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( |
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Deemed and imputed dividends on Series A preferred stock |
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- |
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( |
) |
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( |
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( |
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Deemed dividends on Series B preferred stock |
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( |
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( |
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- |
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Exchange of Series A preferred stock for convertible senior notes |
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- |
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- |
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- |
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Net loss attributable to U.S. Well Services, Inc. common stockholders |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Loss per common share (See Note 14): |
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Basic and diluted (1) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Weighted average common shares outstanding: |
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Basic and diluted (1) |
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(1)
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
U.S. WELL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
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Nine Months Ended |
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September 30, |
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2021 |
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2020 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to cash provided by (used in) operating activities: |
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Depreciation and amortization |
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Change in fair value of warrant liabilities |
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( |
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Impairment of long-lived assets |
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Provision for losses on accounts receivable |
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Provision for losses on inventory obsolescence |
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Loss (gain) on disposal of assets |
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( |
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Convertible senior notes converted into sales of patent licenses |
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( |
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- |
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Amortization of debt discount, premium and issuance costs |
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Paid-in-kind interest on convertible senior notes |
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- |
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Gain on extinguishment of debt, net |
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( |
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- |
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Share-based compensation expense |
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Changes in assets and liabilities: |
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Accounts receivable |
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Inventory |
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( |
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Prepaids and other current assets |
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( |
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Accounts payable |
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( |
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Accrued liabilities |
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( |
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( |
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Accrued interest |
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( |
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Net cash provided by (used in) operating activities |
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( |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of property and equipment |
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( |
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( |
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Proceeds from sale of property and equipment and insurance proceeds from damaged property and equipment |
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Net cash used in investing activities |
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( |
) |
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( |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from revolving credit facility |
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Repayments of revolving credit facility |
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( |
) |
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( |
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Proceeds from issuance of long-term debt |
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Repayments of long-term debt |
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( |
) |
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( |
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Payment of fees related to debt extinguishment |
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( |
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- |
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Proceeds from issuance of convertible senior notes |
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- |
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Proceeds from issuance of notes payable |
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- |
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Repayments of notes payable |
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( |
) |
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( |
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Repayments of amounts under equipment financing |
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( |
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( |
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Principal payments under capital lease obligations |
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( |
) |
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( |
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Proceeds from issuance of common stock, net |
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Deferred financing costs |
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( |
) |
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( |
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Net cash provided by (used in) financing activities |
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( |
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Net increase (decrease) in cash and cash equivalents and restricted cash |
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( |
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Cash and cash equivalents and restricted cash, beginning of period |
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Cash and cash equivalents and restricted cash, end of period |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
U.S. WELL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
(unaudited)
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Nine Months Ended |
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September 30, |
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2021 |
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2020 |
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Supplemental cash flow disclosure: |
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Interest paid |
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$ |
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$ |
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Income tax paid |
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Non-cash investing and financing activities: |
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Issuance of Class A common stock to senior secured term loan lenders |
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Issuance of Series B preferred stock to senior secured term loan lenders |
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Conversion of Series A preferred stock to Class A common stock |
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Exchange of Series A preferred stock for convertible senior notes |
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- |
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Conversion of Series B preferred stock to Class A common stock |
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- |
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Deemed and imputed dividends on Series A preferred stock |
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Accrued Series A preferred stock dividends |
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Accrued Series B preferred stock dividends |
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Changes in accrued and unpaid capital expenditures |
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Assets under capital lease obligations |
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- |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
U.S. WELL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(in thousands, except share amounts)
(unaudited)
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Three Months Ended September 30, 2021 |
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Class A Common |
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Class B Common |
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Additional |
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Accumulated |
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Noncontrolling |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital (1) |
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Deficit |
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Interest |
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Deficit |
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Balance, June 30, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
- |
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$ |
( |
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Class A common stock issuance for reverse stock split round up |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Conversion of Series B preferred stock to Class A common stock |
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- |
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- |
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- |
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- |
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Share-based compensation |
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- |
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- |
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- |
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- |
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- |
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- |
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Restricted stock grants |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Restricted stock forfeitures |
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( |
) |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Accrued Series A preferred stock dividends |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
) |
Accrued Series B preferred stock dividends |
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- |
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- |