Item 8.01 Other Events
As previously disclosed, on August 19, 2021 Independence Contract Drilling, Inc. (the “Company”) entered into an amended and restated equity distribution agreement (the “Agreement”) with Piper Sandler & Co. and Johnson Rice & Company L.L.C. (the “Agents”), which amended and restated the original equity distribution, entered into by the Company and Piper Sandler & Co. on June 5, 2020. Pursuant to the Agreement, the Company from time to time may offer and sell through the Agents shares of its common stock, par value $0.01 per share, having an aggregate offering price of up to a maximum amount specified therein (the “Shares”). Pursuant to a prospectus supplement dated August 19, 2021, the Company has issued and sold approximately $7.5 million in shares of common stock during 2021.
Pursuant to General Instruction I.B.6 to a Registration Statement on Form S-3, the Company may sell additional shares at this time, and the board of directors has authorized the sale of an additional $5.9 million in shares of its common stock. Sales of the Shares, if any, under the Agreement may be made in any transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).
If, and when, any such sales occur, the Company currently plans to use the net proceeds from at the market offerings, after deducting the sales agents’ commissions and offering expenses payable by the Company, for general corporate purposes, which may include, among other things, funding for future rig reactivations, repayment of final Sidewinder merger consideration payments due June 30, 2022 aggregating $4.6 million, including accrued interest, as of such date, repayment of indebtedness and capital expenditures.
The Agreement contains customary representations, warranties and agreements by the Company, indemnification obligations of the Company and the Agents, including for liabilities under the Securities Act, other obligations of the parties and termination provisions.
The Shares to be sold under the Agreement, if any, will be issued and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No 333-258534), which was declared effective by the Securities and Exchange Commission on August 18, 2021, and a prospectus supplement thereto. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the Shares nor shall there be any sale of the Shares in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to complete text of the Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K. A legal opinion related to the issuance and sale of the additional Shares is filed herewith as Exhibit 5.1.
In connection with sales of Shares pursuant to the Agreement, effective December 14, 2021 the Company and Tumim Stone Capital LLC (“Tumim”) also mutually agreed to terminate the Common Stock Purchase Agreement, dated November 11, 2020 (the “Commitment Purchase Agreement”), between the Company and Tumim Stone Capital LLC (“Tumim”). Pursuant to the Commitment Purchase Agreement, the Company had the right to sell to Tumim up to $5,000,000 in shares of its common stock (subject to certain conditions and limitations) from time to time during the term of the Commitment Purchase Agreement. The Company sold 1,144,000 shares of its common stock to Tumim during the term of the Commitment Purchase Agreement for gross proceeds of approximately $4.2 million. Accordingly, the Company does not believe the termination of such agreement is material to the Company.
Item 9.01 Financial Statements and Exhibits
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1.1 | | Amended and Restated Equity Distribution Agreement, dated August 19, 2021, among Independence Contract Drilling, Inc., Piper Sandler & Co. and Johnson Rice & Company L.L.C. (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed on August 19, 2021) (File No. 001-36590) |
5.1 | | Legal Opinion of Sidley Austin LLP |
10.1 | | Common Stock Purchase Agreement, dated as of November 11, 2020, by and between Independence Contract Drilling, Inc. and Tumim Stone Capital LLC. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on November 12, 2020) (File No. 001-36590) |
23.1 | | Consent of Sidley Austin LLP (included in Exhibit 5.1) |
104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
