Item 1.01 Entry into a Material Definitive Agreement.
On July 18, 2022, U.S. Well Services, LLC (“USWS”), a subsidiary of U.S. Well Services, Inc. (the
“Company”), entered into a promissory note (the “Note”) in favor of Equify Financial, LLC, as lender (“Equify”), which provides for the debt financing of certain equipment to be used by USWS in
building an electric frac fleet (the “Equipment”). Among other things, the Note:
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has a principal amount of $12,500,000, |
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has a maturity date of August 1, 2027, |
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is payable by USWS to Equify in equal monthly installments of principal in the amount of $208,334.00, together
with all accrued and unpaid interest on the outstanding principal balance of the Note, commencing on September 1, 2022 and continuing thereafter until the maturity date, and |
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bears interest at a rate per annum equal to the lesser of (i) the sum of (A) “prime rate” as
published in the Wall Street Journal from time to time plus (B) 9.25%, and (ii) the maximum amount of interest allowed by applicable law. |
The obligations of USWS under the Note are secured by a first priority lien in favor of Equify in the Equipment, as set forth in the Security
Agreement by USWS in favor of Equify dated July 18, 2022 (the “Security Agreement”). In addition, the Company entered into a guaranty (the “Guaranty”) pursuant to which it guaranteed to Equify the full
performance and payment of all indebtedness owed by USWS to Equify.
Dan Wilks and Farris Wilks, together with certain of their
affiliates, (collectively, the “Wilks Parties”) collectively hold a controlling interest in ProFrac Holdings Corp. (“ProFrac”) and in Equify. Certain Wilks Parties also own certain securities of the Company. As
previously announced, on June 21, 2022 the Company entered into an agreement and plan of merger with ProFrac and Thunderclap Merger Sub I, Inc., an indirect subsidiary of ProFrac (“Merger Sub”), pursuant to which and subject to the
conditions in the agreement, Merger Sub will be merged with and into the Company, with the Company surviving as an indirect subsidiary of ProFrac.
The foregoing summaries of the material terms of the Note and the Security Agreement are not complete and are subject to, and qualified in
their entirety by, reference to the complete text of the Note, the Security Agreement and the Guaranty, which are filed as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively, to this Current Report on Form
8-K and are incorporated herein by reference.
Important Information For Investors And Stockholders
This communication does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities or a
solicitation of any vote or approval. This communication relates to a proposed transaction between the Company and ProFrac. In connection with this proposed transaction, ProFrac will prepare and file with the SEC a registration statement on Form S-4 containing a proxy statement/prospectus jointly prepared by the Company and ProFrac, and other related documents. The proxy statement/prospectus will contain important information about the proposed transaction
and related matters. STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER RELEVANT DOCUMENTS FILED BY THE COMPANY AND PROFRAC WITH
THE SEC CAREFULLY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, PROFRAC AND THE PROPOSED TRANSACTION.
Stockholders of the Company may obtain free copies of the registration statement, the proxy statement/prospectus and other relevant documents
filed by the Company and ProFrac with the SEC (if and when they become available) through the website maintained by the SEC at www.sec.gov. Copies of the documents filed by the Company and ProFrac with the SEC are also available free of
charge on the Company’s website at www.uswellservices.com and ProFrac’s website at www.pfholdingscorp.com.
This communication
shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Participants in Solicitation
The
Company and ProFrac and their respective executive officers and directors may be deemed, under SEC rules, to be participants in the solicitation of proxies in connection with the transaction. Information regarding the officers and directors of the
Company is included in the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 20, 2022, as amended from time to time, with respect to the 2022 Annual Meeting of Stockholders of the Company and in the
Company’s Current Report on Form 8-K filed with the SEC on May 4, 2022. Information regarding the officers and directors of ProFrac is included in ProFrac’s final prospectus relating to its
initial public offering (File No. 333-261255) declared effective by the SEC on May 12, 2022. More detailed information regarding the identity of the potential participants, and their direct
or indirect interests, by security holdings or otherwise, will be set forth in the proxy materials and other materials to be filed with the SEC in connection with the transaction.