Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.22.1
Stockholders' Equity
3 Months Ended
Mar. 31, 2022
Equity [Abstract]  
Stockholders' Equity

NOTE 14 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. See “Note 13 – Mezzanine Equity” for disclosure regarding preferred stock issued and outstanding.

Class A Common Stock

The Company is authorized to issue 400,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of March 31, 2022 and December 31, 2021, there were 77,066,612 and 53,148,952 shares of Class A common stock issued and outstanding, respectively. As of March 31, 2022, 285,715 outstanding shares of Class A common stock were subject to cancellation on November 9, 2024, unless the closing price per share of the Class A common stock has equaled or exceeded $42.00 for any 20 trading days within any 30-trading day period, and 174,194 outstanding shares of Class A common stock were subject to the same cancellation provision, but at a closing price per share of $47.25.

ATM Agreement. On June 26, 2020, the Company entered into an Equity Distribution Agreement (the “ATM Agreement”) with Piper Sandler & Co. relating to the Company’s shares of Class A common stock. In accordance with the terms of the ATM Agreement, the Company may offer and sell shares of our Class A common stock over a period of time pursuant to an “at-the-market” offering program. Under the ATM Agreement, the Company will pay Piper Sandler an aggregate commission of up to 3% of the gross sales price per share of Class A common stock sold under the ATM Agreement. On March 19, 2021, the Company increased the number of shares of Class A common stock that it may offer in accordance with the terms of the ATM Agreement to a total of $50.0 million.

The following table presents information with respect to shares of Class A common stock sold under the ATM Agreement during the periods indicated:

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

Shares of Class A common stock sold

 

 

9,767,941

 

 

 

12,624,657

 

Total net proceeds

 

$

21,282

 

 

$

10,669

 

Commission paid

 

$

658

 

 

$

330

 

 

Since inception on June 26, 2020 through March 31, 2022, the Company has sold a total of 15,086,100 shares of Class A common stock under the ATM Agreement for total net proceeds of $36.4 million and paid $1.1 million in commissions.

On April 26, 2022, the Company entered into a new Equity Distribution Agreement (the “2022 ATM Agreement”) with Piper Sandler & Co. relating to the Company’s shares of Class A common stock to replace the former ATM Agreement, which had expired on April 26, 2022. See “Note 18 - Subsequent Events” for additional disclosure regarding the 2022 ATM Agreement.

Registered Direct Offering. On March 11, 2022, the Company completed a registered direct offering of 14,180,375 shares of Class A common stock and issuance of 14,180,375 RDO Investor Warrants for gross proceeds of $25.0 million, before deducting placement agent fees and other offering expenses. The Company issued 992,626 Placement Agent Warrants as partial compensation for the placement agent’s services in connection with the registered direct offering on March 11, 2022. The Company intends to use the net proceeds for working capital purposes, including the funding of certain capital expenditures.

The proceeds received were allocated as $17.1 million and $7.9 million to the Class A common stock and RDO Investor Warrants, respectively, based on the relative fair value at issuance. The fair value of the Class A common stock issued in the registered direct offering was $16.3 million, calculated based on the closing price of the Class A common stock on the date of issuance. The fair value of the RDO Investor Warrants and Placement Agent Warrants was $7.5 million and $0.5 million respectively, calculated using the Black-Scholes option pricing model. The following assumptions were used to calculate the fair value for the RDO Investor Warrants and Placement Agent Warrants at issuance:

 

 

RDO Investor Warrants

 

 

Placement Agent
Warrants

 

Exercise price

 

$

1.763

 

 

$

2.2038

 

Contractual term

 

3.5 years

 

 

3.5 years

 

Volatility rate

 

80.0%

 

 

80.0%

 

Risk-free interest rate

 

1.9%

 

 

1.9%

 

Expected dividend rate

 

0%

 

 

0%

 

Class B Common Stock

The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. The shares of Class B common stock are non-economic; however, holders are entitled to one vote per share. Each share of Class B common stock, together with one unit of USWS Holdings, is exchangeable for one share of Class A common stock or, at the Company’s election, the cash equivalent to the market value of one share of Class A common stock.

During the three months ended March 31, 2021, 2,302,936 shares of Class B common stock were converted into 657,982 shares of Class A common stock, which has been adjusted to reflect the reverse stock split. As of March 31, 2022 and December 31, 2021, there were no shares of Class B common stock issued and outstanding.

Warrants

As of March 31, 2022, the Company has issued and outstanding Term C Loan Warrants, RDO Investor Warrants and Placement Agent Warrants, which are recognized as equity. See “Note 9 - Warrants” for disclosure regarding the Term C Loan Warrants, RDO Investor Warrants and Placement Agent Warrants.

Noncontrolling Interest

During the first quarter of 2021, the remaining noncontrolling interest holders of USWS Holdings exchanged all of their respective shares for the Company’s Class A common stock. Accordingly, USWS Holdings became the Company’s wholly owned subsidiary as of March 31, 2021.