Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v3.20.4
Stockholders' Equity
12 Months Ended
Dec. 31, 2020
Equity [Abstract]  
Stockholders' Equity

NOTE 11 – STOCKHOLDERS’ EQUITY

 

Shares Authorized and Outstanding

 

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. The Company adopted and filed with the Secretary of State of the State of Delaware each of the Certificate of Designations for the Series A preferred stock and the Series B preferred stock as amendments to the Company’s Second Amended and Restated Certificate of Incorporation (as amended, the “Charter”) each on May 24, 2019 and March 31, 2020, to authorize and establish the rights, preferences and privileges of the Series A preferred stock and Series B preferred stock, respectively. See “Note 10 – Mezzanine Equity” for the discussion of 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. On December 31, 2020 and December 31, 2019, there were 72,515,342 and 62,857,624 shares of Class A common stock issued and outstanding, respectively. At December 31, 2020, 1,000,000 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 $12.00 for any 20 trading days within any 30-trading day period, and 609,677 outstanding shares of Class A common stock were subject to the same cancellation provision, but at a closing price per share of $13.50.

 

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 over a period, up to $10,275 of our Class A common stock. The ATM Agreement relates 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. The Company sold 792,258 shares of Class A common stock for total net proceeds of $400 under this ATM Agreement as of December 31, 2020. The Company paid $12 in commissions with respect to this sale. In January 2021, we sold an additional 8,340,608 shares of Class A common stock for a total net proceeds of $5,679, after payment of $176 in commissions.  

 

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 year ended December 31, 2020, 3,197,756 shares of Class B common stock were converted to an equivalent number of shares of Class A common stock.

 

As of December 31, 2020 and 2019, there were 2,302,936 and 5,500,692 shares, respectively, of Class B common stock issued and outstanding.

 

Warrants

 

Pursuant to the Company’s initial public offering, 32,500,000 warrants (the “public warrants”) were issued and 15,500,000 warrants (the “private placement warrants”) were sold simultaneously to Matlin & Partners Acquisition Sponsor, LLC (the “Sponsor”) and Cantor Fitzgerald (the “Underwriter”). Each warrant entitles its holder to purchase one half of one share of Class A common stock at an exercise price of $5.75 per half share ($11.50 for full share equivalent), to be exercised only for a whole number of shares of our Class A common stock. The warrants became exercisable 30 days after the completion of the Transaction and expire five years after that date or earlier upon redemption or liquidation. Once the warrants became exercisable, the Company may redeem the outstanding warrants at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, if the last sale price of the Company’s common stock equals or exceeds $24.00 per share for any 20 trading days within a 30-trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders. The private placement warrants, however, are nonredeemable so long as they are held by the Sponsor, the Underwriter or their permitted transferees.

 

In March 2019, the Company entered into privately negotiated warrant exchange agreements with certain warrant holders to exchange 10,864,391 public warrants for Class A common stock at a ratio of 0.13 Class A common shares per warrant. In April 2019, pursuant to a previously announced public warrant exchange offer on March 14, 2019, the Company exchanged an additional 11,640,974 public warrants for Class A common stock at a ratio of 0.13 Class A common shares per warrant.

 

See “Note 10 – Mezzanine Equity” for the discussion of warrants issued pursuant to the Series A preferred stock purchase agreement.

 

During the year ended December 31, 2020, certain warrant holders elected to forfeit 6,327,218 warrants for $0 consideration. As of December 31, 2020, there remained 3,667,417 public warrants and 15,500,000 private placement warrants outstanding, the total of both are exercisable for 9,583,709 shares of Class A common stock. In addition, as of December 31, 2020, 4,844,441 warrants were outstanding pursuant to the Series A preferred stock purchase agreement, and exercisable for 4,844,441 shares of Class A common stock.

 

Noncontrolling Interest

 

The Company’s noncontrolling ownership interest in consolidated subsidiaries is presented in the consolidated balance sheet within stockholders’ equity (deficit) as a separate component and represents approximately 3% ownership of USWS Holdings as of December 31, 2020.

 

Long-Term Incentive Plan

 

Pursuant to the U.S. Well Services, Inc. 2018 Stock Incentive Plan (the “LTIP”), there were an aggregate 8,160,500 shares of Class A common stock initially made available for issuance under the LTIP. On November 5, 2020, pursuant to the Amended and Restated U.S. Well Services, Inc. 2018 Stock Incentive Plan (the “A&R LTIP”), the Company made grants of deferred stock units and performance incentive awards to certain key employees of the Company. The A&R LTIP, which was approved by the Board of Directors, upon the recommendation of the Compensation Committee of the Board of Directors on September 1, 2020, is expected to be included in the Company’s Proxy Statement for its 2021 Annual Meeting of Stockholders for approval by the Company’s stockholders. Shares issued under the LTIP and A&R LTIP are further discussed in “Note 13 - Share-Based Compensation”. There were no shares available for issuance under the LTIP as of December 31, 2020.