Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 04, 2019 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | U.S. WELL SERVICES, INC. | |
Entity Central Index Key | 0001670349 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-38025 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-1847117 | |
Entity Address, Address Line One | 1360 Post Oak Boulevard | |
Entity Address, Address Line Two | Suite 1800 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77056 | |
City Area Code | 832 | |
Local Phone Number | 562-3730 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Common Class A [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 54,588,775 | |
Title of each class | CLASS A COMMON SHARES $0.0001, par value | |
Trading Symbol | USWS | |
Name of each exchange on which registered | NASDAQ | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 13,775,400 | |
Warrants [Member] | ||
Document Information [Line Items] | ||
Title of each class | WARRANTS | |
Trading Symbol | USWSW | |
Name of each exchange on which registered | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 20,712 | $ 29,529 |
Restricted cash | 12,084 | 507 |
Accounts receivable (net of allowance for doubtful accounts of $22 and $189 in 2019 and 2018, respectively) | 108,050 | 58,026 |
Inventory, net | 10,488 | 9,413 |
Prepaids and other current assets | 14,867 | 16,437 |
Total current assets | 166,201 | 113,912 |
Property and equipment, net | 461,529 | 331,387 |
Intangible assets, net | 22,191 | 27,890 |
Goodwill | 4,971 | 4,971 |
Deferred financing costs, net | 1,108 | 2,070 |
TOTAL ASSETS | 656,000 | 480,230 |
CURRENT LIABILITIES: | ||
Accounts payable | 78,559 | 89,360 |
Accrued expenses and other current liabilities | 29,453 | 17,044 |
Notes payable, current portion | 7,250 | 4,560 |
Current portion of long-term equipment financing | 7,886 | 3,263 |
Current portion of long-term capital lease obligation | 13,286 | 25,338 |
Current portion of long-term debt | 5,000 | 900 |
Total current liabilities | 141,434 | 140,465 |
Notes payable, less current portion | 1,867 | |
Long-term equipment financing | 11,926 | 8,304 |
Long-term capital lease obligation | 1,330 | |
Long-term debt | 275,154 | 91,112 |
Deferred rent | 166 | |
TOTAL LIABILITIES | 431,877 | 239,881 |
Commitments and contingencies (NOTE 16) | ||
STOCKHOLDERS' EQUITY | ||
Additional paid in capital | 232,080 | 204,928 |
Accumulated deficit | (78,008) | (17,383) |
Total stockholders' equity attributable to U.S. Well Services, Inc. | 154,078 | 187,551 |
Noncontrolling interest | 38,077 | 52,798 |
Total Stockholders' Equity | 192,155 | 240,349 |
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY | 656,000 | 480,230 |
Series A Convertible Redeemable Preferred Stock [Member] | ||
MEZZANINE EQUITY | ||
Series A Convertible Redeemable Preferred Stock, par value $0.0001 per share; 55,000 shares authorized, issued and outstanding as of September 30, 2019; aggregate liquidation preference of $57,330 as of September 30, 2019 | 31,968 | |
Common Class A [Member] | ||
STOCKHOLDERS' EQUITY | ||
Class A Common Stock, par value of $0.0001 per share; 400,000,000 shares authorized; 54,588,775 shares and 49,254,760 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 5 | 5 |
Total Stockholders' Equity | 5 | 5 |
Common Class B [Member] | ||
STOCKHOLDERS' EQUITY | ||
Class A Common Stock, par value of $0.0001 per share; 400,000,000 shares authorized; 54,588,775 shares and 49,254,760 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 1 | 1 |
Total Stockholders' Equity | $ 1 | $ 1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Sep. 30, 2019USD ($)$ / sharesshares |
Allowance for doubtful accounts | $ | $ 22 |
Series A Convertible Redeemable Preferred Stock [Member] | |
Mezzanine Equity, par value | $ / shares | $ 0.0001 |
Mezzanine Equity, authorized | 55,000 |
Mezzanine Equity, issued | 55,000 |
Mezzanine Equity, outstanding | 55,000 |
Mezzanine Equity, liquidation preference | $ | $ 57,330 |
Common Class A [Member] | |
Common stock, par value | $ / shares | $ 0.0001 |
Common stock, authorized | 400,000,000 |
Common stock, issued | 54,588,775 |
Common stock, outstanding | 54,588,775 |
Common Class B [Member] | |
Common stock, par value | $ / shares | $ 0.0001 |
Common stock, authorized | 20,000,000 |
Common stock, issued | 13,775,400 |
Common stock, outstanding | 13,775,400 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | $ 130,884,000 | $ 166,173,000 | $ 422,075,000 | $ 530,411,000 |
Costs and expenses: | ||||
Depreciation and amortization | 39,723,000 | 26,765,000 | 117,888,000 | 77,547,000 |
Selling, general and administrative expenses | 8,216,000 | 5,248,000 | 24,474,000 | 14,863,000 |
Loss (gain) on disposal of assets | 4,976,000 | (126,000) | 15,884,000 | 7,990,000 |
Income (loss) from operations | (12,823,000) | (3,166,000) | (44,012,000) | 2,768,000 |
Interest expense, net | (8,449,000) | (7,387,000) | (21,384,000) | (21,672,000) |
Loss on extinguishment of debt | (12,558,000) | |||
Other income | 62,000 | 9,000 | 1,774,000 | 331,000 |
Loss before income taxes | (21,210,000) | (10,544,000) | (76,180,000) | (18,573,000) |
Income tax expense | 39,000 | 469,000 | ||
Net loss | (21,249,000) | (10,544,000) | (76,649,000) | (18,573,000) |
Net loss attributable to noncontrolling interest | (4,280,000) | (15,929,000) | ||
Net loss attributable to U.S. Well Services, Inc. | (16,969,000) | (10,544,000) | (60,720,000) | (18,573,000) |
Dividends accrued on Series A preferred stock | (1,670,000) | (2,330,000) | ||
Deemed and imputed dividends on Series A preferred stock | (4,406,000) | (5,966,000) | ||
Net loss attributable to U.S. Well Services, Inc. common stockholders | $ (23,045,000) | $ (10,544,000) | $ (69,016,000) | $ (18,573,000) |
Loss per common share (See Note 12): | ||||
Basic and diluted | $ (0.45) | $ (0.21) | $ (1.36) | $ (0.37) |
Weighted average common shares outstanding: | ||||
Basic and diluted | 50,249,606 | 47,939,999 | 49,182,110 | 47,939,999 |
Service [Member] | ||||
Costs and expenses: | ||||
Cost of services (excluding depreciation and amortization) | $ 90,792,000 | $ 137,452,000 | $ 307,841,000 | $ 427,243,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (76,649) | $ (18,573) |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Depreciation and amortization | 117,888 | 77,547 |
Provision for losses on accounts receivable | 307 | 569 |
Provision for losses on inventory obsolescence | 93 | |
Non-cash interest | 7,196 | |
Loss on disposal of assets | 15,884 | 7,990 |
Amortization of discount on debt | 1,373 | |
Deferred financing costs amortization | 1,049 | 1,569 |
Loss on extinguishment of debt | 12,558 | |
Share-based compensation expense | 5,672 | 2,802 |
Changes in assets and liabilities: | ||
Accounts receivable | (50,331) | 2,794 |
Inventory | (2,036) | 1,364 |
Prepaids and other current assets | 1,795 | (4,514) |
Accounts payable | 2,243 | 800 |
Accrued liabilities | 1,487 | 4,477 |
Accrued interest | 11,090 | |
Net cash provided by operating activities | 42,330 | 84,114 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (194,114) | (58,557) |
Insurance proceeds from damaged property and equipment | 706 | 8,011 |
Net cash used in investing activities | (193,408) | (50,546) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of revolving credit facility | 49,134 | |
Repayment of revolving credit facility | (65,000) | |
Proceeds from issuance of long-term debt | 285,000 | |
Repayments of long-term debt | (75,000) | |
Payment of fees related to debt extinguishment | (6,560) | |
Repayments of long-term debt to related party | (3,420) | |
Proceeds from issuance of notes payable | 9,117 | 6,513 |
Repayments of note payable | (4,560) | (2,145) |
Repayments of amounts under equipment financing | (66,872) | (12,484) |
Principal payments under finance lease obligation | (12,494) | (7,144) |
Proceeds from issuance of preferred stock and warrants, net | 54,524 | |
Cash distribution to partners | (9) | |
Deferred financing costs | (13,451) | |
Net cash provided by (used in) financing activities | 153,838 | (18,689) |
Net increase in cash and cash equivalents and restricted cash | 2,760 | 14,879 |
Cash and cash equivalents and restricted cash, beginning of period | 30,036 | 6,426 |
Cash and cash equivalents and restricted cash, end of period | 32,796 | 21,305 |
Supplemental cash flow disclosure: | ||
Interest paid | 7,853 | 12,586 |
Income tax paid | 353 | |
Non-cash investing and financing activities: | ||
Beneficial conversion feature of Series A preferred stock | 20,132 | |
Issuance of warrants to purchase common stock associated with preferred stock offering | 10,720 | |
Deemed and imputed dividends on Series A preferred stock | 5,966 | |
Accrued Series A preferred stock dividends | 2,330 | |
Changes in accrued and unpaid capital expenditures | 13,045 | 49,199 |
Assets under finance lease obligations | 10,451 | |
Financed equipment purchases | $ 66,342 | $ 3,893 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Class A [Member] | Common Class B [Member] | Additional Paid in Capital [Member] | Member's Interest [Member] | Member's Accumulated Deficit [Member] | Accumulated Deficit [Member] | Noncontrolling Interests [Member] |
Balance at Dec. 31, 2017 | $ 44,263 | $ 137,885 | $ (93,622) | |||||
Deemed contribution related to unit-based compensation | 2,802 | 2,802 | ||||||
Cash distribution to partners | (9) | (9) | ||||||
Net loss | (18,573) | (18,573) | ||||||
Balance at Sep. 30, 2018 | 28,483 | 140,678 | (112,195) | |||||
Balance at Jun. 30, 2018 | 38,141 | 139,792 | (101,651) | |||||
Deemed contribution related to unit-based compensation | 895 | 895 | ||||||
Cash distribution to partners | (9) | (9) | ||||||
Net loss | (10,544) | (10,544) | ||||||
Balance at Sep. 30, 2018 | 28,483 | $ 140,678 | $ (112,195) | |||||
Balance at Dec. 31, 2018 | 240,349 | $ 5 | $ 1 | $ 204,928 | $ (17,383) | $ 52,798 | ||
Balance (in shares) at Dec. 31, 2018 | 49,254,760 | 13,937,332 | ||||||
Adoption of ASC 606 as of January 1, 2019 (Note 1) | 122 | 95 | 27 | |||||
Exercise of warrants | 2,925,712 | |||||||
Conversion of Class B common stock to Class A common stock | 161,932 | (161,932) | ||||||
Restricted stock granted to employees | 2,218,183 | |||||||
Class A Common stock granted to board members | 418 | 331 | 87 | |||||
Class A Common stock granted to board members (in shares) | 46,875 | |||||||
Share-based compensation | 5,359 | 4,265 | 1,094 | |||||
Restricted stock forfeitures (in shares) | (18,687) | |||||||
Issuance of warrants to purchase common stock associated with preferred stock offering | 10,720 | 10,720 | ||||||
Beneficial conversion feature of Series A preferred stock | 20,132 | 20,132 | ||||||
Deemed and imputed dividends on Series A preferred stock | (5,966) | (5,966) | ||||||
Accrued Series A preferred stock dividends | (2,330) | (2,330) | ||||||
Net loss | (76,649) | (60,720) | (15,929) | |||||
Balance at Sep. 30, 2019 | 192,155 | $ 5 | $ 1 | 232,080 | (78,008) | 38,077 | ||
Balance (in shares) at Sep. 30, 2019 | 54,588,775 | 13,775,400 | ||||||
Balance at Jun. 30, 2019 | 217,279 | $ 5 | $ 1 | 236,398 | (61,039) | 41,914 | ||
Balance (in shares) at Jun. 30, 2019 | 54,607,462 | 13,775,400 | ||||||
Share-based compensation | 2,201 | 1,758 | 443 | |||||
Restricted stock forfeitures (in shares) | (18,687) | |||||||
Deemed and imputed dividends on Series A preferred stock | (4,406) | (4,406) | ||||||
Accrued Series A preferred stock dividends | (1,670) | (1,670) | ||||||
Net loss | (21,249) | (16,969) | (4,280) | |||||
Balance at Sep. 30, 2019 | $ 192,155 | $ 5 | $ 1 | $ 232,080 | $ (78,008) | $ 38,077 | ||
Balance (in shares) at Sep. 30, 2019 | 54,588,775 | 13,775,400 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | NOTE 1 – DESCRIPTION OF BUSINESS U.S. Well Services, Inc. (the “Company”), f/k/a Matlin & Partners Acquisition Corp (“MPAC”), is a Houston, Texas-based oilfield service provider of well stimulation services to the upstream oil and natural gas industry. The Company engages in high-pressure hydraulic fracturing in oil and natural gas basins in the United States. The fracturing process consists of pumping a specially formulated fluid into perforated well casing, tubing or open holes under high pressure, causing the underground formation to crack or fracture, allowing nearby hydrocarbons to flow more freely up the wellbore. The Company’s fleets consist of mobile hydraulic fracturing units and other auxiliary heavy equipment to perform fracturing services. The Company has two designs for hydraulic fracturing units: (1) Conventional Fleets, which utilize traditional internal combustion engines, transmissions, radiators and are powered by diesel fuel and (2) Clean Fleets which replace the traditional engines, transmissions, and radiators with electric motors powered by electricity generated by natural gas fueled turbine generators. Both designs utilize high-pressure hydraulic fracturing pumps mounted on trailers. The Company refers to the group of pump trailers and other equipment necessary to perform a typical fracturing job as a “fleet”. The Company was incorporated in Delaware in March 2016 as a special purpose acquisition company, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more target businesses. On November 9, 2018 (the “Closing Date”), MPAC acquired USWS Holdings LLC, a Delaware limited liability company (“USWS Holdings”), pursuant to the Merger and Contribution Agreement, dated as of July 13, 2018, and subsequently amended (as amended, the “Merger and Contribution Agreement”). The acquisition, together with the other transactions contemplated by the Merger and Contribution Agreement are referred to herein as the “Transaction”. In connection with the closing of the Transaction, MPAC changed its name to U.S. Well Services, Inc. Following the completion of the Transaction, substantially all of the Company’s assets and operations are held and conducted by U.S. Well Services, LLC (“USWS LLC”), a wholly owned subsidiary of USWS Holdings, and the Company’s only assets are equity interests representing 79.8% ownership of USWS Holdings as of September 30, 2019. Unless the context otherwise requires, “the Company”, “USWS”, “we,” “us,” and “our” refer, for periods prior to the completion of the Transaction, to USWS Holdings and its subsidiaries and, for periods upon or after the completion of the Transaction, to U.S. Well Services, Inc. and its subsidiaries, including USWS Holdings and its subsidiaries. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read in conjunction with the annual financial statements included in the Company's 2018 Annual Report on Form 10-K (the “Annual Report”). The accompanying unaudited condensed consolidated financial statements and accompanying notes present the consolidated financial position, results of operations, cash flows, and equity of the Company as of September 30, 2019 and December 31, 2018, and for the three and nine months ended September 30, 2019 and 2018. The interim data includes all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the results for the interim period. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results of operations expected for the entire fiscal year ended December 31, 2019. Principles of Consolidation The condensed consolidated financial statements comprise the financial statements of the Company, its wholly owned subsidiaries, and its subsidiaries that it controls due to ownership of a majority voting interest. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the Company. All significant intercompany balances and transactions are eliminated upon consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We regularly evaluate estimates and judgments based on historical experience and other relevant facts and circumstances. Significant estimates included in these financial statements primarily relate to allowance for doubtful accounts, allowance for inventory obsolescence, estimated useful lives and valuation of property and equipment and intangibles, impairment assessments of goodwill and other intangibles, Level 2 inputs used in fair value estimation of term loans, accounting for business combination, and the assumptions used in our Black-Scholes and Monte Carlo option pricing models associated with the valuation of share-based compensation and certain equity instruments. Actual results could differ from those estimates. Restricted Cash Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements, or are reserved for a specific purpose, that is not readily available for immediate or general use are recorded in restricted cash in our condensed consolidated balance sheets. The restricted cash in our condensed consolidated balance sheet represents cash transferred into a trust account to support our workers’ compensation obligations and cash held for use in capital expenditures related to approved fleet expansion amounting to $0.5 million and $11.6 million, respectively, as of September 30, 2019, and $0.5 million and nil, respectively, as of December 31, 2018. The following table provides a reconciliation of the amount of cash and cash equivalents reported on the condensed consolidated balance sheets to the total of cash and cash equivalents and restricted cash shown on the consolidated statements of cash flows (in thousands) September 30, 2019 December 31, 2018 Cash and cash equivalents $ 20,712 $ 29,529 Restricted cash 12,084 507 Cash and cash equivalents and restricted cash $ 32,796 $ 30,036 Inventory Inventory consists of proppant, chemicals, and other consumable materials and supplies used in our high-pressure hydraulic fracturing operations. Inventories are stated at the lower of cost or net realizable value. Cost is determined principally on a first-in-first-out cost basis. All inventories are purchased for use by the Company in the delivery of its services with no inventory being sold separately to outside parties. Inventory quantities on hand are reviewed regularly and write-downs for obsolete inventory are recorded based on our forecast of the inventory item demand in the near future. As of September 30, 2019 and December 31, 2018, the Company had reserves of $0.3 million and $0.6 million, respectively, for obsolete and slow-moving inventory. In certain contracts with our proppant vendors, we take ownership of proppant as it leaves the sand mines. These in transit inventories are recognized as part of Inventory in our condensed consolidated balance sheets. As of September 30, 2019 and December 31, 2018, in transit inventories were nil and $0.3 million, respectively. Fair Value of Financial Instruments Fair value is defined under Accounting Standards Codification (ASC) 820, Fair Value Measurement Level 1–inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2–inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3–inputs are unobservable for the asset or liability. The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of September 30, 2019 and December 31, 2018: Cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other current liabilities. These carrying amounts approximate fair value because of the short maturity of the instruments or because the carrying value is equal to the fair value of those instruments on the balance sheet dates. Senior Secured Term Loan and Second Lien Term Loan . The carrying value of the Senior Secured Term Loan and Second Lien Term Loan approximates fair value as its terms are consistent with and comparable to current market rates as of September 30, 2019 and December 31, 2018, respectively. Equipment financing . The carrying value of the equipment financing approximates fair value as its terms are consistent with and comparable to current market rates as of September 30, 2019 and December 31, 2018, respectively. Revenue Recognition Effective January 1, 2019, the Company adopted a comprehensive new revenue recognition standard, ASC 606, Revenue from Contracts with Customers. Under the new standard, revenue recognition is based on the customer’s ability to benefit from the services rendered in an amount that reflects the consideration expected to be received in exchange for those services. Taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore excluded from revenues in the Company’s financial statements. The Company’s revenues consist of providing hydraulic fracturing services for either a pre-determined term or number of stages/wells to exploration and production companies operating in the onshore oil and natural gas basins of the United States. Revenues are earned as services are rendered, which is generally on a per stage or fixed monthly rate basis. Customers are invoiced according to contract terms either upon the completion of a stage, the completion of a well or monthly with payment due typically 30 days from invoice date. Hydraulic fracturing is a well-stimulation technique intended to optimize hydrocarbon flow paths during the completion phase of wellbores. The process involves the injection of water, sand and chemicals under high pressure into shale formations. The Company’s performance obligations are satisfied over time, typically measured in number of stages completed or the number of pumping days a fleet is available to pump for a customer in a month. A field ticket is created for each stage completed that records all services performed, including any chemicals and proppant consumed in completing the stage. The field ticket is signed by a customer representative and evidences the amounts to which the Company has a right to invoice and thus to recognize as revenue. All revenue is recognized when a contract with a customer exists, collectability of amounts subject to invoice is probable, the performance obligations under the contract have been satisfied over time, and the amount to which the Company has the right to invoice has been determined. Contract fulfillment costs, such as mobilization costs and shipping and handling costs, are expensed as incurred and are recorded in cost of services in the unaudited condensed consolidated statements of operations. A portion of the Company’s contracts contain variable consideration; however, this variable consideration is typically unknown at the time of contract inception, and is not known until the job is complete, at which time the variability is resolved. Examples of variable consideration include the amount of consumables (such as chemicals and proppants) that will be used to complete a job. The Company has elected to use the “as invoiced” practical expedient to recognize revenue based upon the amount it has a right to invoice upon the completion of each performance obligation per the terms of the contract. The practical expedient permits an entity to recognize revenue in the amount to which it has a right to invoice the customer if that amount corresponds directly with the value to the customer of the entity’s performance completed to date. The Company believes that this is an accurate reflection of the value transferred to the customer as each incremental obligation is performed. The Company has elected to expense sales commissions paid upon the successful signing of a new customer contract as incurred if the related contract will be fully satisfied within one year. For contracts that will not be fully satisfied within one year, these incremental costs of obtaining a contract with a customer will be recognized as a contract asset and amortized on a straight-line basis over the life of the contract. Accounts Receivable Accounts receivable are recorded at their outstanding balances adjusted for an allowance for doubtful accounts. The allowance for doubtful accounts is determined by analyzing the payment history and credit worthiness of each customer. Receivable balances are charged off when they are considered uncollectible by management. Recoveries of receivables previously charged off are recorded as income when received. Accounts receivable charged off against the allowance was $0.4 million for the three and nine months ended September 30, 2019, and nil for the three and nine months ended September 30, 2018. The Company held a reserve for doubtful accounts of a nominal amount and $0.2 million as of September 30, 2019 and December 31, 2018, respectively. Major Customer and Concentration of Credit Risk The concentration of our customers in the oil and natural gas industry may impact our overall exposure to credit risk, either positively or negatively, in that customers may be similarly affected by changes in economic and industry conditions. We perform ongoing credit evaluations of our customers and do not generally require collateral in support of our trade receivables. The following table shows the percentage of revenues from our significant customers for the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, 2019 2018 Customer A * 30.5% Customer B * 17.9% Customer C * 10.6% Customer D 16.1% 15.1% Customer E * 15.7% Customer F 21.8% * Customer G 20.0% * Customer H 10.1% * Customer I * 10.1% Nine Months Ended September 30, 2019 2018 Customer A 10.9% 28.9% Customer B * 21.3% Customer C * 11.3% Customer D 17.4% 13.3% Customer E * 12.9% Customer F 16.3% * Customer G 16.9% * An asterisk indicates that revenue is less than ten percent. The following table shows the percentage of trade receivables from our significant customers as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Customer A * 18.4% Customer B * 17.7% Customer C * 10.8% Customer D * 26.1% Customer E 17.1% * Customer F 10.3% 13.0% Customer G 41.1% * An asterisk indicates that trade receivable is less than ten percent. Fair Value of Preferred Stock The fair value of preferred stock is estimated by calculating the present value of its one-year redemption cost to the Company and then discounted for lack of marketability. Embedded Conversion Features The Company evaluates embedded conversion features within a convertible instrument under ASC 815 Derivatives and Hedging Debt with Conversion and Other Options The Company records a beneficial conversion feature (“BCF”) when the convertible instrument is issued with conversion features at fixed or adjustable rates that are below market value when issued. The BCF for convertible instruments is recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The intrinsic value is generally calculated at the commitment date as the difference between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. If certain other securities are issued with the convertible security, the proceeds are allocated among the different components. The portion of the proceeds allocated to the convertible security is divided by the contractual number of the conversion shares to determine the effective conversion price, which is used to measure the BCF. The effective conversion price is used to compute the intrinsic value. The value of the BCF is limited to the basis that is initially allocated to the convertible security. The BCF for the convertible instrument is recorded as a reduction, or discount, to the carrying amount of the convertible instrument equal to the fair value of the conversion feature. The discount is then amortized as deemed dividends over the period from the date of the convertible instrument’s issuance to the earliest redemption date, provided that the convertible instrument is not currently redeemable but probable of becoming redeemable in the future. Warrants Issued with Convertible Instruments The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method. The Company allocates the value of the proceeds received from a convertible instrument transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as discount or premium. Income Taxes Prior to the completion of the Transaction, the Company was a limited liability company and treated as a partnership for federal and certain state income tax purposes. As such, the results of operations were allocated to the members for inclusion in their income tax returns and therefore no provision or benefit for federal or certain state income taxes was included in our financial statements prior to the completion of the Transaction. The Company, under ASC 740, uses the asset and liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and (ii) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period the rate change is enacted. A valuation allowance is provided for deferred tax assets when it is more likely than not the deferred tax assets will not be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. |
Accounting Standards
Accounting Standards | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Accounting Standards | NOTE 3 – ACCOUNTING STANDARDS Recently Adopted Accounting Pronouncements The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. In August 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments The Company adopted this new guidance as of April 1, 2019 which resulted in the presentation of the cash portion of the loss on extinguishment of debt amounting to $6.6 million as cash used in financing activities rather than operating activities in the condensed consolidated statement of cash flows. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In January 2017, the FASB issued ASU 2017-1, Business Combinations (Topic 805): Clarifying the Definition of a Business Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) modified retrospective with applied transition method upon adoption of the standard. Under this adoption method, all leases that are in effect and in existence as of, and subsequent to transition date will be applied as of the transition date, with a cumulative impact to retained earnings in that period. Prior period financial statements would be stated under the old guidance ASC 840 with no change to prior periods or disclosures associated with prior period. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment |
Prepaids and Other Current Asse
Prepaids and Other Current Assets | 9 Months Ended |
Sep. 30, 2019 | |
Prepaid Expense And Other Assets Current [Abstract] | |
PREPAIDS AND OTHER CURRENT ASSETS | NOTE 4 – PREPAIDS AND OTHER CURRENT ASSETS Prepaids and other current assets as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands) September 30, 2019 December 31, 2018 Prepaid insurance $ 10,937 $ 6,011 Recoverable costs from insurance - 3,540 Sales tax receivable 781 1,987 Other receivables - 895 Income tax receivable 810 810 Other current assets 2,339 3,194 Total prepaid expenses and other current assets $ 14,867 $ 16,437 In March 2017, some of our turbine equipment that we use to operate our Clean Fleets were damaged in an accident. As a result, we incurred costs primarily to rent replacement equipment in order to continue our operations. Recoverable costs from insurance as of December 31, 2018 included costs of $2.9 million we incurred as of December 31, 2018, which was recovered from the insurance company in January 2019. In June 2018, we experienced a fire on one of our conventional hydraulic fracturing fleets operating in Pennsylvania, damaging a portion of hydraulic fracturing equipment. We received insurance proceeds during the nine months ended September 30, 2019 amounting to $2.4 million as final settlement to cover the cost of replacing damaged equipment and reimbursement of certain operating expenses incurred due to the fire. Of this amount, reimbursement of certain expenses incurred in the prior year amounting to $1.6 million was recorded as other income in the condensed consolidated statement of operations for the nine months ended September 30, 2019. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 5 – INTANGIBLE ASSETS A summary of intangible assets as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands) Estimated Useful Life (in years) Gross Carrying Value Accumulated Amortization Net Book Value As of September 30, 2019 Order backlog 3 $ 15,345 $ 15,345 $ - Trademarks 10 3,132 835 2,297 Patents 20 22,955 3,061 19,894 Covenants not to compete 2 1,524 1,524 - Customer relationship 1 132 132 - $ 43,088 $ 20,897 $ 22,191 As of December 31, 2018 Order backlog 3 $ 15,345 $ 10,742 $ 4,603 Trademarks 10 3,132 600 2,532 Patents 20 22,955 2,200 20,755 Covenants not to compete 2 1,524 1,524 - Customer relationship 1 132 132 - $ 43,088 $ 15,198 $ 27,890 The intangible assets are amortized over the period the Company expects to receive the related economic benefit. Amortization expense related to amortizable intangible assets for the three months ended September 30, 2019 and 2018 was $1.9 million and $2.1 million, respectively, and is included as part of depreciation and amortization in the consolidated statements of operations. Amortization expense related to amortizable intangible assets for the nine months ended September 30, 2019 and 2018 was $5.7 million and $6.3 million, respectively. The estimated amortization expense for future periods is as follows (in thousands) Fiscal Year Estimated Amortization Expense Remainder of 2019 $ 365 2020 1,461 2021 1,461 2022 1,461 2023 1,461 Thereafter 15,982 Total $ 22,191 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 6 – PROPERTY AND EQUIPMENT, NET Property and equipment as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands) Estimated Useful Life (in years) September 30, 2019 December 31, 2018 Fracturing equipment 1.5 to 25 years $ 642,410 $ 449,685 Light duty vehicles 5 years 7,940 6,455 Furniture and fixtures 5 years 277 231 IT equipment 3 years 6,721 5,339 Auxiliary equipment 2 to 20 years 36,968 24,118 Leasehold improvements Term of lease 725 335 695,041 486,163 Less: Accumulated depreciation and amortization (233,512 ) (154,776 ) Property and equipment, net $ 461,529 $ 331,387 Depreciation and amortization expense for the three months ended September 30, 2019 and 2018 was $37.8 million and $24.7 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2019 and 2018 was $112.2 million and $71.2 million, respectively. Capital leases . In November 2018 and January 2019, we entered into two capital leases. The equipment under the capital lease in November 2018 was received at the end of December 2018 and placed into service in 2019. The total amount capitalized under these capital leases was $29.8 million, presented as part of fracturing equipment in property and equipment, and the related accumulated depreciation was $17.1 million and nil as of September 30, 2019 and December 31, 2018, respectively. In January 2019, through equipment financing, we purchased certain equipment that were previously under capital leases entered into in August and September 2017. As a result, a difference of $0.1 million between the purchase price and the carrying amount of the capital lease obligation was recorded as adjustment to the carrying amount of the equipment. The total amount capitalized under this equipment financing was $7.6 million, presented as part of fracturing equipment in property and equipment. The future minimum lease payments related to the capital leases as of September 30, 2019 amounts to $15.2 million, of which $9.3 million and $5.9 million are due in the remainder of 2019 and in 2020, respectively. Included in these amounts is imputed interest totaling $0.6 million. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | NOTE 7 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands) September 30, 2019 December 31, 2018 Accrued payroll and benefits $ 8,674 $ 7,087 Accrued taxes 7,472 8,119 Accrued interest 11,090 - Other current liabilities 2,217 1,838 Accrued expenses and other current liabilities $ 29,453 $ 17,044 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 8 – NOTES PAYABLE On September 15, 2019, the Company obtained insurance for its workers’ compensation, pollution, umbrella, general liability, and auto coverage needs. The Company made an initial down payment and entered into a premium finance agreement with a credit finance institution to pay the remainder of the premiums. The aggregate amount of the premiums financed was $9.1 million at an interest rate of 4.75%. Under the terms of the agreement, the Company agreed to pay 15 equal monthly payments of $0.6 million beginning October 15, 2019 through maturity on December 15, 2020. The payments include interest expense of $0.3 million. The note had an outstanding balance of $9.1 million as of September 30, 2019, of which $7.2 million was due within one year from the balance sheet date. Notes payable outstanding as of December 31, 2018 totaling $4.6 million relating to premium finance agreements for the Company’s directors and officers liability, workers’ compensation, pollution, umbrella, general liability, and auto coverage needs were paid in full as of September 30, 2019. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9 – DEBT Long-term debt as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands) September 30, 2019 December 31, 2018 Senior Secured Term Loan $ 250,000 $ - ABL Credit Facility 40,109 - First Lien Credit Facility - $ 55,975 Second Lien Term Loan - 40,000 Equipment financing 19,812 11,567 Capital leases 14,616 25,338 Total debt 324,537 132,880 Unamortized discount on debt and debt issuance costs (9,955 ) (3,963 ) Current maturities (26,172 ) (29,501 ) Net Long-term debt $ 288,410 $ 99,416 Senior Secured Term Loan On May 7, 2019, USWS LLC (the “Borrower”), a subsidiary of the Company, and all of the other subsidiaries of the Company entered into a $250.0 million Senior Secured Term Loan Credit Agreement (as amended, the “Senior Secured Term Loan”). The Company is required to make quarterly principal payments of 2.0% per annum of the initial principal balance, commencing on January 15, 2020, with final payment due at maturity on May 7, 2024. The Senior Secured Term Loan will bear interest at a variable rate per annum equal to the applicable LIBOR rate, subject to a 2.0% floor, plus 8.25%. The Senior Secured Term Loan is not subject to financial covenants but is subject to certain non-financial covenants, including but not limited to reporting, insurance, notice and collateral maintenance covenants as well as limitations on the incurrence of indebtedness, permitted investments, liens on assets, dispositions of assets, paying dividends, transactions with affiliates, mergers and consolidations. The Senior Secured Term Loan requires mandatory prepayments upon certain dispositions of property or issuance of other indebtedness, as defined, and quarterly a percentage of excess cash flow, if any, equal to 25% to 100% (depending on total debt outstanding) commencing in September 2019. Certain mandatory prepayments (excluding excess cash flows sweep) and optional prepayments are subject to a yield maintenance fee for the first two years and prepayment premium of 2% in year three and 1% in year four. Upon the final payment and termination of the Senior Secured Term Loan, the Borrower is subject to an exit fee equal to 2.0% of the principal amount of loans then outstanding and the aggregate optional prepayment of principal amounts repaid during the 120 days that occurred prior to such final payment. Proceeds from the Senior Secured Term Loan were used to repay the outstanding balances of the First Lien Credit Facility, Second Lien Term Loan, and certain equipment financings, fund a cash account reserved solely for future expansion capital expenditures, and pay associated fees and expenses. The First Lien Credit Facility and Second Lien Term Loan were both terminated and accounted for as debt extinguishments which resulted in a $6.5 million loss on early repayment of debt, write off of $1.7 million of unamortized debt issue costs related to the First Lien Credit Facility and write off of $4.3 million of unamortized original issue discount and debt issuance costs related to the Second Lien Term Loan, all of which were presented as part of loss on extinguishment of debt in the condensed consolidated statement of operations. The Senior Secured Term Loan was issued at a $5.0 million discount and the Company incurred $5.8 million in debt issuance costs with both amounts recorded as a direct deduction to the face amount of the Senior Secured Term Loan. The debt issuance costs and debt discount related to the Senior Secured Term Loan are being amortized to interest expense based on the effective interest rate method over the term of the Senior Secured Term Loan. As of September 30, 2019, the outstanding principal balance of the Senior Secured Term Loan was $250.0 million, of which $5.0 million was due within one year from the balance sheet date. ABL Credit Facility On May 7, 2019, the Company entered into a $75.0 million ABL Credit Agreement (the “ABL Credit Facility”) which matures on February 6, 2024. The ABL Credit Facility is subject to a borrowing base which is calculated based on a formula referencing the Loan Parties’ eligible accounts receivables. Borrowings under the ABL Credit Facility bear interest at LIBOR, plus an applicable LIBOR rate margin of 1.5% to 2.0% or base rate margin of 0.5% to 1.0% as defined in the ABL Credit Facility. The unused portion of the ABL Credit Facility is subject to an unused commitment fee of 0.250% to 0.375%. All borrowings under the ABL Credit Facility are subject to the satisfaction of customary conditions, including the absence of a default and the accuracy of representations and warranties and certifications regarding sales of certain inventory, and to a borrowing base (described above). In addition, the ABL Credit Facility includes a consolidated fixed charge coverage ratio of 1.00 to 1.00 but only when a financial covenant trigger period is in effect as defined in the ABL Credit Agreement. Borrowings under the ABL Credit Facility are fully and unconditionally guaranteed jointly and severally by the Loan Parties, other than future unrestricted subsidiaries. In connection with the ABL Credit Facility, As of September 30, 2019, the borrowing base was $68.8 million and the outstanding revolver loan balance was $40.1 million, classified as long-term debt in the condensed consolidated balance sheets. Equipment Financing From 2016 through 2019, the Company entered into security agreements with financing institutions for the purchase of certain fracturing equipment. As of September 30, 2019 and December 31, 2018, these financing agreements with maturities through 2023 had a total balance of $19.8 million and $11.6 million, respectively, of which $7.9 million and $3.3 million, respectively, was due within one year. The weighted average interest rate for these agreements was 6.4% and 6.3% per annum as of September 30, 2019 and December 31, 2018, respectively. Payments of Debt Obligations due by Period Presented in the following table is a schedule of the repayment requirements of long-term debt as of September 30, 2019 (in thousands) : Principal Amount of Long-term Debt Remainder of 2019 $ 12,762 2020 17,416 2021 10,594 2022 9,157 2023 5,749 Thereafter 268,859 Total $ 324,537 |
Mezzanine Equity
Mezzanine Equity | 9 Months Ended |
Sep. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
MEZZANINE EQUITY | NOTE 10 – MEZZANINE EQUITY Series A Convertible Redeemable Preferred Stock The Company is authorized to issue up to 10,000,000 shares of preferred stock, par value $0.0001 per share. On May 23, 2019, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (collectively, the “Purchasers”) to issue and sell in a private placement 55,000 shares of newly created series of convertible redeemable preferred stock of the Company (“Series A preferred stock”), for an aggregate purchase price of $1,000 per share, for total gross proceeds of $55.0 million. At the initial closing on May 24, 2019 (“Closing Date”), the Purchasers purchased all of the Series A preferred stock and 2,933,333 initial warrants exercisable for shares of Class A common stock. Subject to there being Series A preferred stock outstanding, the Company will issue an additional 4,399,992 warrants to the Purchasers in quarterly installments of 488,888 warrants beginning nine months after the Closing Date. Crestview III USWS, L.P. and Crestview III USWS TE, LLC, two of the Purchasers, are part of an affiliate group which, prior to the Closing Date, held an aggregate 29.80% ownership interest in the Company and is entitled to designate for nomination by the Company for election two directors to serve on the Company’s Board of Directors. Holders of shares of Series A preferred stock are entitled to receive cumulative dividends, compounding and accruing quarterly in arrears, from the Closing Date until the second anniversary of the Closing Date, at an annual rate of 12.0%, and thereafter, 16% of the stated value of $1,000 per share, subject to increase in connection with the payment of dividends in kind. Dividends are payable, at the Company’s option, in cash from legally available funds or in kind by increasing the stated value of the outstanding Series A preferred stock by the amount per share of the dividend on February 24, May 24, August 24, and November 24 of each year. On August 24, 2019, the Company’s Board of Directors did not declare a dividend on the Series A preferred stock resulting in the dividends for this period being paid-in-kind in accordance with the Series A preferred stock’s Certificate of Designations. The Series A preferred stock is redeemable by the Company at any time for cash equal to the stated value per share on the date of redemption, except for a redemption occurring prior to the nine-month anniversary of the Closing Date, in which case the redemption price shall be $1,092.73 per share. If the Company notifies the holders that it has elected to redeem the Series A preferred stock, the holder may instead elect to convert such shares into Class A common stock. If the Company funds the redemption with proceeds of an equity offering within one year of the Closing Date, then any converting shares will convert at a ratio that is based on the higher of the price to the public in the offering or the ordinary conversion price of $6.67. Otherwise, such converting shares will convert by reference to the ordinary conversion price. In any event, the Series A preferred stock converting in response to a redemption notice will net settle for a combination of cash and Class A common stock. Following the first anniversary of the Closing Date, each holder of Series A preferred stock may convert all or any portion of its shares of Series A preferred stock into Class A common stock based on the then-applicable liquidation preference at a conversion price of $6.67, subject to anti-dilution adjustments, at any time, but not more than once per quarter, so long as any conversion is for at least $1.0 million. The Company has the option to force a conversion of any then outstanding Series A preferred stock following the third anniversary of the Closing Date, and contingent upon (i) the closing price of the Company’s Class A common stock being greater than 130% of the Conversion Price for 20 trading days during any 30-day consecutive trading day period, (ii) the average daily trading volume of the Class A common stock exceeding 250,000 for 20 trading days and (iii) the Company having an effective registration statement on file with the Securities and Exchange Commission (“SEC”) covering resales of the underlying Class A common stock to be received upon such conversion. In connection with the Series A preferred stock offering, there were 55,000 shares of Series A preferred stock and 2,933,333 warrants outstanding as of September 30, 2019. The Series A preferred stock was recorded as Mezzanine Equity, net of issuance cost, on the condensed consolidated balance sheets because it has redemption features upon certain triggering events that are outside the Company’s control, such as change in control. The Company has determined that the warrants should be accounted as a component of stockholders’ equity. On the Closing Date, the Company estimated the fair value of the warrants at $12.8 million using the Black-Scholes option pricing model using the following primary assumptions: contractual term of 6.5 years, volatility rate of 53.0%, risk-free interest rate of 2.2% and expected dividend rate of 0%. Based on the warrant’s relative fair value to the fair value of the Series A preferred stock, approximately $10.8 million of the $12.8 million of aggregate value was allocated to the warrants, creating a corresponding preferred stock discount in the same amount. Due to the reduction of allocated proceeds to Series A preferred stock, the effective conversion price was approximately $5.40 per share creating a beneficial conversion feature of $20.1 million which further reduced the carrying value of the Series A preferred stock. Since the Holders’ conversion option of the Series A preferred stock could only be exercisable after the first anniversary of the Closing Date, the discount resulting from the beneficial conversion feature will be accreted over one year as deemed preferred dividends using the effective yield method, resulting in a corresponding increase in the carrying value of the Series A preferred stock over the same time period. The Series A preferred stock had similar characteristics of an “Increasing Rate Security” as described by SEC Staff Accounting Bulletin Topic 5Q, Increasing Rate Preferred Stock. As a result, the discount on Series A preferred stock is considered an unstated dividend cost that is amortized over the period preceding commencement of the perpetual dividend using the effective interest method, by charging imputed dividend cost against retained earnings, or additional paid in capital in the absence of retained earnings, and increasing the carrying amount of the Series A preferred stock by a corresponding amount. The discount is therefore being amortized over two years using the effective yield method. The amortization in each period is the amount which, together with the stated dividend in the period, results in a constant rate of effective cost with regard to the carrying amount of the Series A preferred stock. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 11 – STOCKHOLDERS’ EQUITY Shares Authorized and Outstanding Preferred Stock At the Closing Date and pursuant to the Purchase Agreement, as defined in “Note 10 – Mezzanine Equity”, the Company adopted and filed with the Secretary of State of the State of Delaware the Certificate of Designations as an amendment to the Company’s Second Amended and Restated Certificate of Incorporation (as amended, the “Charter”) to authorize and establish the rights, preferences and privileges of the preferred stock. The preferred stock are a new class of equity interests that rank senior to the Class A common stock and Class B common stock in the Company with respect to distributions. The preferred stock will have only specified voting rights, including with respect to the issuance or creation of senior securities, amendments to the Charter that negatively impact the rights of the preferred stock and the payment of dividends on, repurchase or redemption of Class A common 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. At September 30, 2019 and December 31, 2018, there were 55,000 and no shares, respectively, of convertible redeemable 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. At September 30, 2019 and December 31, 2018, there were 54,588,775 and 49,254,760 shares of Class A common stock issued and outstanding, respectively. At September 30, 2019, 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. 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. In June 2019, 161,932 shares of Class B common stock were converted to an equivalent number of shares of Class A common stock. As of September 30, 2019 and December 31, 2018, there were 13,775,400 and 13,937,332 shares, respectively, of Class B common stock issued and outstanding. Warrants Prior to the Transaction, 32,500,000 warrants were issued pursuant to our initial public offering and 15,500,000 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, 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 , the Company issued 2,933,333 initial warrants to certain institutional investors and will issue the remaining 4,399,992 warrants to them in quarterly installments beginning nine months after the initial closing date. As of September 30, 2019, there remained 9,994,635 public warrants and 15,500,000 private placement warrants outstanding, the total of both are exercisable for 12,747,318 shares of Class A common stock, and 2,933,333 initial warrants issued and outstanding pursuant to the Series A preferred stock Purchase Agreement as disclosed in “Note 10 – Mezzanine Equity”, which are exercisable for 2,933,333 shares of Class A common stock. Noncontrolling Interest The Company’s noncontrolling ownership interest in consolidated subsidiaries is presented in the condensed consolidated balance sheet within shareholders’ equity as a separate component and represents approximately 20.2% ownership of USWS Holdings as of September 30, 2019. Long-Term Incentive Plan In connection with the Transaction, the Company’s Board of Directors adopted the U.S. Well Services, Inc. 2018 Long Term Incentive Plan (the “LTIP”). An aggregate 8,160,500 shares of Class A common stock were initially available for issuance under the LTIP. Shares issued under the LTIP are further discussed in “Note 13 - Share-Based Compensation”. The aggregate amount of shares available for issuance as of September 30, 2019 was 4,315,967. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | NOTE 12 – EARNINGS (LOSS) PER SHARE Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional common shares that could have been outstanding assuming the exercise of stock options, exercise of warrants, conversion of Series A preferred shares, conversion of Class B shares and vesting of restricted shares. Basic and diluted net income per share excludes the income attributable to and shares associated with the 1,609,677 Class A shares that are subject to cancellation on November 9, 2024 if certain market conditions have not been met. The Company included in the calculation deemed dividends resulting from amortization of discounts related to the Series A preferred stock. The following table sets forth the calculation of basic and diluted earnings per share for the periods indicated based on the weighted average number of common shares outstanding for the period subsequent to the corporate reorganization that occurred in connection with the Transaction (in thousands, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Basic Net Income Per Share Numerator: Net loss attributable to U.S. Well Services, Inc. $ (16,969 ) $ (10,544 ) $ (60,720 ) $ (18,573 ) Net loss attributable to cancellable Class A shares 527 343 1,924 603 Basic net loss attributable to U.S. Well Services, Inc. shareholders (16,442 ) (10,201 ) (58,796 ) (17,970 ) Dividends accrued on Series A preferred stock (1,670 ) - (2,330 ) - Deemed and imputed dividends on Series A preferred stock (4,406 ) - (5,966 ) - Basic net loss attributable to U.S. Well Services, Inc. common shareholders $ (22,518 ) $ (10,201 ) $ (67,092 ) $ (17,970 ) Denominator: Weighted average shares outstanding 51,859,283 49,549,676 50,791,787 49,549,676 Cancellable Class A shares (1,609,677 ) (1,609,677 ) (1,609,677 ) (1,609,677 ) Basic and diluted weighted average shares outstanding 50,249,606 47,939,999 49,182,110 47,939,999 Basic and dilutive net income per share attributable to Class A shareholders $ (0.45 ) $ (0.21 ) $ (1.36 ) $ (0.37 ) A summary of securities excluded from the computation of diluted earnings per share is presented below for the applicable periods: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Dilutive earnings per share: Anti-dilutive stock options 1,068,162 - 1,068,162 - Anti-dilutive warrants 15,680,651 - 15,680,651 Anti-dilutive restricted stock 2,729,496 - 2,729,496 - Anti-dilutive Class B shares convertible into Class A common stock 13,775,400 - 13,775,400 - Anti-dilutive Series A Preferred stock convertible into Class A common stock 8,595,172 - 8,595,172 - Potentially dilutive securities excluded as anti-dilutive 41,848,881 - 41,848,881 - |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based Compensation | NOTE 13 – SHARE-BASED COMPENSATION Restricted Stock The Company granted a total of 2,218,183 shares of restricted stock to certain employees of the Company pursuant to the Company’s LTIP during the first quarter of 2019. Restricted stock is subject to restrictions on transfer and is generally subject to a risk of forfeiture if the award recipient is no longer an employee of the Company prior to the lapse of the restriction. During the third quarter of 2019, restricted stock forfeitures related to employee terminations totaled 18,687 shares. The total stock-based compensation cost associated with this award, net of forfeitures, amounts to $19.5 million and will be recognized over the four-year vesting period. Rollforward of restricted stock awards as of September 30, 2019 is as follows: Weighted- average Unvested grant-date fair value Units at beginning of period 530,000 $ 8.72 Granted 2,218,183 8.91 Vested - - Forfeited (18,687 ) 8.91 Units at end of period 2,729,496 $ 8.87 Unrestricted stock The Company also granted 46,875 shares of unrestricted Class A common stock under the LTIP during the first quarter of 2019 to certain board members in exchange for their services as a director of the Company, in accordance with the existing compensation plan of the Board of Directors. These shares are fully vested and the weighted-average grant-date fair value per share is $8.91. Stock-based compensation cost amounting to $0.4 million associated with this award will be recognized over the one-year requisite service period. The fair value of the restricted and unrestricted stock granted under the LTIP during the first quarter of 2019 was determined using the closing price of the Company’s Class A common stock on the grant date. Stock Options The Company granted a total of 1,068,162 stock options under the LTIP to certain employees of the Company during the first quarter of 2019. The fair value of stock options on the date of grant was $3.95 per option, which was calculated using the Black-Scholes valuation model. These stock options were granted with seven-year terms and vest over four years in equal installments each year on the anniversary of the grant date. The expected term of the options granted was based on the safe harbor rule of the SEC Staff Accounting Bulletin No. 107 “Share-Based Payment” as the Company lacks historical exercise data to estimate the expected term of these options. The expected stock price volatility is calculated based on the Company’s peer group because the Company does not have sufficient historical data and will continue to use peer group volatility information until historical volatility of the Company is available to measure expected volatility for future grants. The exercise price for stock options granted equals the closing market price of the underlying stock on the date of grant. These options are time-based and are not based upon attainment of performance goals. Stock based compensation costs totaling $4.2 million associated with this award will be recognized over the four-year vesting period. The following table sets forth the assumptions used in the Black-Scholes valuation model: Expected option term 4.75 years Expected price volatility 49.0 % Expected dividend yield 0.0 % Risk-free Rate 2.63 % Grant date fair value per share $ 3.95 Grant date exercise price per share $ 8.91 For the three months ended September 30, 2019, stock-based compensation expense of $2.3 million related to restricted and unrestricted stock grants and stock option grants was recorded, of which $0.8 million is presented as part of cost of services, and $1.5 million presented as part of selling, general, and administrative expenses in the condensed consolidated statement of operations For the nine months ended September 30, 2019, stock-based compensation expense of $5.6 million related to restricted and unrestricted stock grants and stock option grants was recorded, of which $1.8 million is presented as part of cost of services, and $3.8 million presented as part of selling, general, and administrative expenses in the condensed consolidated statement of operations. As of September 30, 2019, total unrecognized compensation cost related to stock-based compensation grants under the LTIP was $22.8 million. We expect to recognize these costs over a weighted average period of 3.7 years. |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Sep. 30, 2019 | |
Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Employee Benefit Plan | NOTE 14 – EMPLOYEE BENEFIT PLAN In 2013, the Company established the U.S. Well Services 401(k) Plan. The Company matches 100% of employee contributions up to 6% of the employee’s salary, subject to cliff vesting after two years of service. For the three months ended September 30, 2019 and 2018, matching contributions were $1.1 million and $0.9 million, |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 15 – INCOME TAXES Prior to the completion of the Transaction, the Company was a limited liability company and was taxed as a partnership for federal and certain state income tax purposes. As such, the results of operations were allocated to the members for inclusion in their income tax returns and therefore no provision or benefit for federal or certain state income taxes were included in our financial statements prior to the completion of the Transaction. The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions and is subject to examination by the taxing authorities. The Company’s effective tax rate on continuing operations for the nine months ended September 30, 2019 was (0.62)%. The difference between the effective tax rate and the U.S. federal statutory rate is due to state taxes, flow-through income not subject to tax, and a valuation allowance. We follow guidance issued by the FASB in accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the consolidated financial statements and applies to all income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the consolidated financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. We have considered our exposure under the standard at both the federal and state tax levels. We did not record any liabilities for uncertain tax positions as of September 30, 2019 or December 31, 2018. We record income tax-related interest and penalties, if any, as a component of income tax expense. We did not incur any material interest or penalties on income taxes. After consideration of all of the information available, management determined that a valuation allowance was appropriate, as it is more likely than not that the Company will not utilize its net deferred tax assets. On December 22, 2017, the Tax Cuts and Jobs Act was signed into legislation. As part of the legislation, the U.S. corporate income tax rate was reduced to 21%. Since the Company was previously a flow-through entity, no deferred tax expense was recorded as a result of the reduced tax rate. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16 – COMMITMENTS AND CONTINGENCIES Litigation Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Sand Purchase Agreements The Company entered into agreements for the supply of proppant for use in its hydraulic fracturing operations. Under the terms of these agreements, the Company is subject to minimum purchase quantities on a monthly, quarterly, or annual basis at fixed prices or may pay penalties in the event of any shortfall. As of September 30, 2019, we estimated and accrued for a shortfall in quantities. This accrual is presented as part of accrued liabilities on the condensed consolidated balance sheets. The following is a schedule of the contracted volumes in dollars and minimum commitments under the proppant supply purchase agreements as of September 30, 2019 (in thousands) Minimum Contracted Commitments Remainder of 2019 $ 20,038 $ 5,162 2020 38,992 6,998 2021 25,524 2,448 Total $ 84,554 $ 14,608 The minimum commitments represent the aggregate amounts that we would be obligated to pay in the event we procured no additional proppant under the contracts subsequent to September 30, 2019. During the first quarter of 2019, we became involved in a contract dispute with a proppant vendor resulting in the cancellation of the contract. Accordingly, as of September 30, 2019, we have excluded $47.1 million and $48.0 million of contracted and minimum commitments, respectively, related to this contract. The litigation involving the contract in dispute is in the discovery stage, as such no prediction can be made as to the outcome of the case at this time nor can we reasonably estimate the potential losses or range of losses resulting from this litigation, if any. Operating Lease Agreements The Company has various operating leases for facilities with terms ranging from 24 to 76 months. Rent expense for the three months ended September 30, 2019 and 2018 was $0.7 million and $0.6 million, respectively, of which $0.6 million and $0.5 million, respectively, are recorded as part of cost of services and $0.1 million, $0.1 million, respectively, are recorded as part of selling, general and administrative expenses in the condensed consolidated statements of operations. Rent expense for the nine months ended September 30, 2019 and 2018 was $2.0 million and $1.6 million, respectively, of which $1.6 million and $1.4 million, respectively, are recorded as part of cost of services and $0.4 million, $0.2 million, respectively, are recorded as part of selling, general and administrative expenses in the condensed consolidated statements of operations. The following is a schedule of minimum future payments on non-cancellable operating leases as of September 30, 2019 (in thousands) Gross Amount Income from Sublease Net Remainder of 2019 $ 435 $ (43 ) $ 392 2020 1,323 (173 ) 1,150 2021 651 (178 ) 473 2022 476 (182 ) 294 2023 288 (31 ) 257 Thereafter 325 - 325 Total minimum future rentals, net $ 3,498 $ (607 ) $ 2,891 On April 30, 2019, we entered into an agreement to sublease our old corporate office space. The term of the lease is for a period of 46 months commencing on May 1, 2019, with total rent throughout the term totaling $0.6 million. The monthly base rent is subject to an escalation clause that is nominal in amount. The Company records rent income on a straight line basis, presented as other income on the condensed consolidated statements of operations. On October 9, 2019, we entered into an agreement to extend the lease of one our office facilities. The term of the amended lease is for a period of 36 months commencing on November 1, 2019, with total rent throughout the term totaling $1.3 million. Self-insurance Beginning June 2014, the Company established a self-insured plan for employees’ healthcare benefits except for losses in excess of varying threshold amounts. The Company charges to expense all actual claims made during each reporting period, as well as an estimate of claims incurred, but not yet reported. The amount of estimated claims incurred, but not reported was $0.4 million and $0.3 million as of September 30, 2019 and December 31, 2018, respectively, and was reported as accrued expenses in the condensed consolidated balance sheets. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued for existing claims. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 17 – RELATED PARTY TRANSACTIONS During the three and nine months ended September 30, 2019, the Company purchased $3.4 million and $8.2 million, respectively, in chemicals used for our hydraulic fracturing operations from Rockwater Energy Solutions (“Rockwater”), a subsidiary of Select Energy Services (“Select Energy”). Rockwater is considered a related party since Select Energy and the Company share two board members and a common investor, Crestview Partners (“Crestview”). As of September 30, 2019 and December 31, 2018, the Company had $3.3 million and $0.3 million, respectively, in accounts payable owed to Rockwater. Crestview purchased 20,000 shares of Series A preferred stock for a total payment of $20.0 million. Along with the Series A preferred stock, Crestview received 1,066,666 initial warrants and the right to receive up to 1,600,002 additional warrants according to the Purchase Agreement as described in “Note 10 – Mezzanine Equity”. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read in conjunction with the annual financial statements included in the Company's 2018 Annual Report on Form 10-K (the “Annual Report”). The accompanying unaudited condensed consolidated financial statements and accompanying notes present the consolidated financial position, results of operations, cash flows, and equity of the Company as of September 30, 2019 and December 31, 2018, and for the three and nine months ended September 30, 2019 and 2018. The interim data includes all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the results for the interim period. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results of operations expected for the entire fiscal year ended December 31, 2019. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements comprise the financial statements of the Company, its wholly owned subsidiaries, and its subsidiaries that it controls due to ownership of a majority voting interest. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the Company. All significant intercompany balances and transactions are eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We regularly evaluate estimates and judgments based on historical experience and other relevant facts and circumstances. Significant estimates included in these financial statements primarily relate to allowance for doubtful accounts, allowance for inventory obsolescence, estimated useful lives and valuation of property and equipment and intangibles, impairment assessments of goodwill and other intangibles, Level 2 inputs used in fair value estimation of term loans, accounting for business combination, and the assumptions used in our Black-Scholes and Monte Carlo option pricing models associated with the valuation of share-based compensation and certain equity instruments. Actual results could differ from those estimates. |
Restricted Cash | Restricted Cash Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements, or are reserved for a specific purpose, that is not readily available for immediate or general use are recorded in restricted cash in our condensed consolidated balance sheets. The restricted cash in our condensed consolidated balance sheet represents cash transferred into a trust account to support our workers’ compensation obligations and cash held for use in capital expenditures related to approved fleet expansion amounting to $0.5 million and $11.6 million, respectively, as of September 30, 2019, and $0.5 million and nil, respectively, as of December 31, 2018. The following table provides a reconciliation of the amount of cash and cash equivalents reported on the condensed consolidated balance sheets to the total of cash and cash equivalents and restricted cash shown on the consolidated statements of cash flows (in thousands) September 30, 2019 December 31, 2018 Cash and cash equivalents $ 20,712 $ 29,529 Restricted cash 12,084 507 Cash and cash equivalents and restricted cash $ 32,796 $ 30,036 |
Inventory | Inventory Inventory consists of proppant, chemicals, and other consumable materials and supplies used in our high-pressure hydraulic fracturing operations. Inventories are stated at the lower of cost or net realizable value. Cost is determined principally on a first-in-first-out cost basis. All inventories are purchased for use by the Company in the delivery of its services with no inventory being sold separately to outside parties. Inventory quantities on hand are reviewed regularly and write-downs for obsolete inventory are recorded based on our forecast of the inventory item demand in the near future. As of September 30, 2019 and December 31, 2018, the Company had reserves of $0.3 million and $0.6 million, respectively, for obsolete and slow-moving inventory. In certain contracts with our proppant vendors, we take ownership of proppant as it leaves the sand mines. These in transit inventories are recognized as part of Inventory in our condensed consolidated balance sheets. As of September 30, 2019 and December 31, 2018, in transit inventories were nil and $0.3 million, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined under Accounting Standards Codification (ASC) 820, Fair Value Measurement Level 1–inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2–inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3–inputs are unobservable for the asset or liability. The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of September 30, 2019 and December 31, 2018: Cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other current liabilities. These carrying amounts approximate fair value because of the short maturity of the instruments or because the carrying value is equal to the fair value of those instruments on the balance sheet dates. Senior Secured Term Loan and Second Lien Term Loan . The carrying value of the Senior Secured Term Loan and Second Lien Term Loan approximates fair value as its terms are consistent with and comparable to current market rates as of September 30, 2019 and December 31, 2018, respectively. Equipment financing . The carrying value of the equipment financing approximates fair value as its terms are consistent with and comparable to current market rates as of September 30, 2019 and December 31, 2018, respectively. |
Revenue Recognition | Revenue Recognition Effective January 1, 2019, the Company adopted a comprehensive new revenue recognition standard, ASC 606, Revenue from Contracts with Customers. Under the new standard, revenue recognition is based on the customer’s ability to benefit from the services rendered in an amount that reflects the consideration expected to be received in exchange for those services. Taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore excluded from revenues in the Company’s financial statements. The Company’s revenues consist of providing hydraulic fracturing services for either a pre-determined term or number of stages/wells to exploration and production companies operating in the onshore oil and natural gas basins of the United States. Revenues are earned as services are rendered, which is generally on a per stage or fixed monthly rate basis. Customers are invoiced according to contract terms either upon the completion of a stage, the completion of a well or monthly with payment due typically 30 days from invoice date. Hydraulic fracturing is a well-stimulation technique intended to optimize hydrocarbon flow paths during the completion phase of wellbores. The process involves the injection of water, sand and chemicals under high pressure into shale formations. The Company’s performance obligations are satisfied over time, typically measured in number of stages completed or the number of pumping days a fleet is available to pump for a customer in a month. A field ticket is created for each stage completed that records all services performed, including any chemicals and proppant consumed in completing the stage. The field ticket is signed by a customer representative and evidences the amounts to which the Company has a right to invoice and thus to recognize as revenue. All revenue is recognized when a contract with a customer exists, collectability of amounts subject to invoice is probable, the performance obligations under the contract have been satisfied over time, and the amount to which the Company has the right to invoice has been determined. Contract fulfillment costs, such as mobilization costs and shipping and handling costs, are expensed as incurred and are recorded in cost of services in the unaudited condensed consolidated statements of operations. A portion of the Company’s contracts contain variable consideration; however, this variable consideration is typically unknown at the time of contract inception, and is not known until the job is complete, at which time the variability is resolved. Examples of variable consideration include the amount of consumables (such as chemicals and proppants) that will be used to complete a job. The Company has elected to use the “as invoiced” practical expedient to recognize revenue based upon the amount it has a right to invoice upon the completion of each performance obligation per the terms of the contract. The practical expedient permits an entity to recognize revenue in the amount to which it has a right to invoice the customer if that amount corresponds directly with the value to the customer of the entity’s performance completed to date. The Company believes that this is an accurate reflection of the value transferred to the customer as each incremental obligation is performed. The Company has elected to expense sales commissions paid upon the successful signing of a new customer contract as incurred if the related contract will be fully satisfied within one year. For contracts that will not be fully satisfied within one year, these incremental costs of obtaining a contract with a customer will be recognized as a contract asset and amortized on a straight-line basis over the life of the contract. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at their outstanding balances adjusted for an allowance for doubtful accounts. The allowance for doubtful accounts is determined by analyzing the payment history and credit worthiness of each customer. Receivable balances are charged off when they are considered uncollectible by management. Recoveries of receivables previously charged off are recorded as income when received. Accounts receivable charged off against the allowance was $0.4 million for the three and nine months ended September 30, 2019, and nil for the three and nine months ended September 30, 2018. The Company held a reserve for doubtful accounts of a nominal amount and $0.2 million as of September 30, 2019 and December 31, 2018, respectively. |
Major Customer and Concentration of Credit Risk | Major Customer and Concentration of Credit Risk The concentration of our customers in the oil and natural gas industry may impact our overall exposure to credit risk, either positively or negatively, in that customers may be similarly affected by changes in economic and industry conditions. We perform ongoing credit evaluations of our customers and do not generally require collateral in support of our trade receivables. The following table shows the percentage of revenues from our significant customers for the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, 2019 2018 Customer A * 30.5% Customer B * 17.9% Customer C * 10.6% Customer D 16.1% 15.1% Customer E * 15.7% Customer F 21.8% * Customer G 20.0% * Customer H 10.1% * Customer I * 10.1% Nine Months Ended September 30, 2019 2018 Customer A 10.9% 28.9% Customer B * 21.3% Customer C * 11.3% Customer D 17.4% 13.3% Customer E * 12.9% Customer F 16.3% * Customer G 16.9% * An asterisk indicates that revenue is less than ten percent. The following table shows the percentage of trade receivables from our significant customers as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Customer A * 18.4% Customer B * 17.7% Customer C * 10.8% Customer D * 26.1% Customer E 17.1% * Customer F 10.3% 13.0% Customer G 41.1% * An asterisk indicates that trade receivable is less than ten percent. |
Fair Value of Preferred Stock | Fair Value of Preferred Stock The fair value of preferred stock is estimated by calculating the present value of its one-year redemption cost to the Company and then discounted for lack of marketability. |
Embedded Conversion Features | Embedded Conversion Features The Company evaluates embedded conversion features within a convertible instrument under ASC 815 Derivatives and Hedging Debt with Conversion and Other Options The Company records a beneficial conversion feature (“BCF”) when the convertible instrument is issued with conversion features at fixed or adjustable rates that are below market value when issued. The BCF for convertible instruments is recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The intrinsic value is generally calculated at the commitment date as the difference between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. If certain other securities are issued with the convertible security, the proceeds are allocated among the different components. The portion of the proceeds allocated to the convertible security is divided by the contractual number of the conversion shares to determine the effective conversion price, which is used to measure the BCF. The effective conversion price is used to compute the intrinsic value. The value of the BCF is limited to the basis that is initially allocated to the convertible security. The BCF for the convertible instrument is recorded as a reduction, or discount, to the carrying amount of the convertible instrument equal to the fair value of the conversion feature. The discount is then amortized as deemed dividends over the period from the date of the convertible instrument’s issuance to the earliest redemption date, provided that the convertible instrument is not currently redeemable but probable of becoming redeemable in the future. |
Warrants Issued with Convertible Instruments | Warrants Issued with Convertible Instruments The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method. The Company allocates the value of the proceeds received from a convertible instrument transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as discount or premium. |
Income Taxes | Income Taxes Prior to the completion of the Transaction, the Company was a limited liability company and treated as a partnership for federal and certain state income tax purposes. As such, the results of operations were allocated to the members for inclusion in their income tax returns and therefore no provision or benefit for federal or certain state income taxes was included in our financial statements prior to the completion of the Transaction. The Company, under ASC 740, uses the asset and liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and (ii) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period the rate change is enacted. A valuation allowance is provided for deferred tax assets when it is more likely than not the deferred tax assets will not be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. In August 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments The Company adopted this new guidance as of April 1, 2019 which resulted in the presentation of the cash portion of the loss on extinguishment of debt amounting to $6.6 million as cash used in financing activities rather than operating activities in the condensed consolidated statement of cash flows. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In January 2017, the FASB issued ASU 2017-1, Business Combinations (Topic 805): Clarifying the Definition of a Business Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) modified retrospective with applied transition method upon adoption of the standard. Under this adoption method, all leases that are in effect and in existence as of, and subsequent to transition date will be applied as of the transition date, with a cumulative impact to retained earnings in that period. Prior period financial statements would be stated under the old guidance ASC 840 with no change to prior periods or disclosures associated with prior period. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents and Restricted Cash | The following table provides a reconciliation of the amount of cash and cash equivalents reported on the condensed consolidated balance sheets to the total of cash and cash equivalents and restricted cash shown on the consolidated statements of cash flows (in thousands) September 30, 2019 December 31, 2018 Cash and cash equivalents $ 20,712 $ 29,529 Restricted cash 12,084 507 Cash and cash equivalents and restricted cash $ 32,796 $ 30,036 |
Schedule of Percentage of Revenues and Trade Receivables from Customers | The following table shows the percentage of revenues from our significant customers for the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, 2019 2018 Customer A * 30.5% Customer B * 17.9% Customer C * 10.6% Customer D 16.1% 15.1% Customer E * 15.7% Customer F 21.8% * Customer G 20.0% * Customer H 10.1% * Customer I * 10.1% Nine Months Ended September 30, 2019 2018 Customer A 10.9% 28.9% Customer B * 21.3% Customer C * 11.3% Customer D 17.4% 13.3% Customer E * 12.9% Customer F 16.3% * Customer G 16.9% * An asterisk indicates that revenue is less than ten percent. The following table shows the percentage of trade receivables from our significant customers as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Customer A * 18.4% Customer B * 17.7% Customer C * 10.8% Customer D * 26.1% Customer E 17.1% * Customer F 10.3% 13.0% Customer G 41.1% * An asterisk indicates that trade receivable is less than ten percent. |
Prepaids and Other Current As_2
Prepaids and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Schedule of Prepaids and Other Current Assets | Prepaids and other current assets as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands) September 30, 2019 December 31, 2018 Prepaid insurance $ 10,937 $ 6,011 Recoverable costs from insurance - 3,540 Sales tax receivable 781 1,987 Other receivables - 895 Income tax receivable 810 810 Other current assets 2,339 3,194 Total prepaid expenses and other current assets $ 14,867 $ 16,437 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | A summary of intangible assets as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands) Estimated Useful Life (in years) Gross Carrying Value Accumulated Amortization Net Book Value As of September 30, 2019 Order backlog 3 $ 15,345 $ 15,345 $ - Trademarks 10 3,132 835 2,297 Patents 20 22,955 3,061 19,894 Covenants not to compete 2 1,524 1,524 - Customer relationship 1 132 132 - $ 43,088 $ 20,897 $ 22,191 As of December 31, 2018 Order backlog 3 $ 15,345 $ 10,742 $ 4,603 Trademarks 10 3,132 600 2,532 Patents 20 22,955 2,200 20,755 Covenants not to compete 2 1,524 1,524 - Customer relationship 1 132 132 - $ 43,088 $ 15,198 $ 27,890 |
Schedule of Estimated Future Amortization Expense | The estimated amortization expense for future periods is as follows (in thousands) Fiscal Year Estimated Amortization Expense Remainder of 2019 $ 365 2020 1,461 2021 1,461 2022 1,461 2023 1,461 Thereafter 15,982 Total $ 22,191 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands) Estimated Useful Life (in years) September 30, 2019 December 31, 2018 Fracturing equipment 1.5 to 25 years $ 642,410 $ 449,685 Light duty vehicles 5 years 7,940 6,455 Furniture and fixtures 5 years 277 231 IT equipment 3 years 6,721 5,339 Auxiliary equipment 2 to 20 years 36,968 24,118 Leasehold improvements Term of lease 725 335 695,041 486,163 Less: Accumulated depreciation and amortization (233,512 ) (154,776 ) Property and equipment, net $ 461,529 $ 331,387 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands) September 30, 2019 December 31, 2018 Accrued payroll and benefits $ 8,674 $ 7,087 Accrued taxes 7,472 8,119 Accrued interest 11,090 - Other current liabilities 2,217 1,838 Accrued expenses and other current liabilities $ 29,453 $ 17,044 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt as of September 30, 2019 and December 31, 2018 consisted of the following (in thousands) September 30, 2019 December 31, 2018 Senior Secured Term Loan $ 250,000 $ - ABL Credit Facility 40,109 - First Lien Credit Facility - $ 55,975 Second Lien Term Loan - 40,000 Equipment financing 19,812 11,567 Capital leases 14,616 25,338 Total debt 324,537 132,880 Unamortized discount on debt and debt issuance costs (9,955 ) (3,963 ) Current maturities (26,172 ) (29,501 ) Net Long-term debt $ 288,410 $ 99,416 |
Schedule of Repayment Requirements of Long-term Debt | Presented in the following table is a schedule of the repayment requirements of long-term debt as of September 30, 2019 (in thousands) : Principal Amount of Long-term Debt Remainder of 2019 $ 12,762 2020 17,416 2021 10,594 2022 9,157 2023 5,749 Thereafter 268,859 Total $ 324,537 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Calculation of Basic And Diluted Earning Per Share | The following table sets forth the calculation of basic and diluted earnings per share for the periods indicated based on the weighted average number of common shares outstanding for the period subsequent to the corporate reorganization that occurred in connection with the Transaction (in thousands, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Basic Net Income Per Share Numerator: Net loss attributable to U.S. Well Services, Inc. $ (16,969 ) $ (10,544 ) $ (60,720 ) $ (18,573 ) Net loss attributable to cancellable Class A shares 527 343 1,924 603 Basic net loss attributable to U.S. Well Services, Inc. shareholders (16,442 ) (10,201 ) (58,796 ) (17,970 ) Dividends accrued on Series A preferred stock (1,670 ) - (2,330 ) - Deemed and imputed dividends on Series A preferred stock (4,406 ) - (5,966 ) - Basic net loss attributable to U.S. Well Services, Inc. common shareholders $ (22,518 ) $ (10,201 ) $ (67,092 ) $ (17,970 ) Denominator: Weighted average shares outstanding 51,859,283 49,549,676 50,791,787 49,549,676 Cancellable Class A shares (1,609,677 ) (1,609,677 ) (1,609,677 ) (1,609,677 ) Basic and diluted weighted average shares outstanding 50,249,606 47,939,999 49,182,110 47,939,999 Basic and dilutive net income per share attributable to Class A shareholders $ (0.45 ) $ (0.21 ) $ (1.36 ) $ (0.37 ) |
Summary of Securities Excluded from Computation of Diluted Earnings Per Share | A summary of securities excluded from the computation of diluted earnings per share is presented below for the applicable periods: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Dilutive earnings per share: Anti-dilutive stock options 1,068,162 - 1,068,162 - Anti-dilutive warrants 15,680,651 - 15,680,651 Anti-dilutive restricted stock 2,729,496 - 2,729,496 - Anti-dilutive Class B shares convertible into Class A common stock 13,775,400 - 13,775,400 - Anti-dilutive Series A Preferred stock convertible into Class A common stock 8,595,172 - 8,595,172 - Potentially dilutive securities excluded as anti-dilutive 41,848,881 - 41,848,881 - |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Restricted Stock Transactions | Rollforward of restricted stock awards as of September 30, 2019 is as follows: Weighted- average Unvested grant-date fair value Units at beginning of period 530,000 $ 8.72 Granted 2,218,183 8.91 Vested - - Forfeited (18,687 ) 8.91 Units at end of period 2,729,496 $ 8.87 |
Schedule of Key Input Assumptions | The following table sets forth the assumptions used in the Black-Scholes valuation model: Expected option term 4.75 years Expected price volatility 49.0 % Expected dividend yield 0.0 % Risk-free Rate 2.63 % Grant date fair value per share $ 3.95 Grant date exercise price per share $ 8.91 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Contracted Volumes and Minimum Commitments under Proppant Supply Purchase Agreements | The following is a schedule of the contracted volumes in dollars and minimum commitments under the proppant supply purchase agreements as of September 30, 2019 (in thousands) Minimum Contracted Commitments Remainder of 2019 $ 20,038 $ 5,162 2020 38,992 6,998 2021 25,524 2,448 Total $ 84,554 $ 14,608 |
Schedule of Minimum Future Payments on Non-Cancelable Operating Leases | The following is a schedule of minimum future payments on non-cancellable operating leases as of September 30, 2019 (in thousands) Gross Amount Income from Sublease Net Remainder of 2019 $ 435 $ (43 ) $ 392 2020 1,323 (173 ) 1,150 2021 651 (178 ) 473 2022 476 (182 ) 294 2023 288 (31 ) 257 Thereafter 325 - 325 Total minimum future rentals, net $ 3,498 $ (607 ) $ 2,891 |
Description of Business (Detail
Description of Business (Details Narrative) | Sep. 30, 2019 |
Merger and Contribution Agreement [Member] | USWS Holdings [Member] | |
Description Of Business [Line Items] | |
Equity interests ownership | 79.80% |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | Nov. 09, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 |
Accounting Policies [Line Items] | |||||||
Restricted cash | $ 12,084,000 | $ 12,084,000 | $ 507,000 | ||||
Inventory valuation reserves | 300,000 | 300,000 | 600,000 | ||||
Inventory in transit | 0 | 0 | 300,000 | ||||
Increase (Decrease), Retained Earnings | $ 100,000 | ||||||
Allowance for doubtful accounts receivable, charged off | 400,000 | $ 0 | 400,000 | $ 0 | |||
Allowance for doubtful accounts | 22,000 | $ 22,000 | 189,000 | ||||
Estimated fair value of preferred stock, calculation period | 1 year | ||||||
Income tax provision or benefit | $ 0 | 39,000 | $ 469,000 | ||||
Accrued for payment of interest and penalties | 0 | 0 | |||||
Workers’ Compensation Obligations [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Restricted cash | 500,000 | 500,000 | 500,000 | ||||
Approved Fleet Expansion [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Restricted cash | $ 11,600,000 | $ 11,600,000 | $ 0 |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 20,712 | $ 29,529 | ||
Restricted cash | 12,084 | 507 | ||
Cash and cash equivalents and restricted cash | $ 32,796 | $ 30,036 | $ 21,305 | $ 6,426 |
Significant Accounting Polici_6
Significant Accounting Policies (Details 1) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Revenues [Member] | |||||
Concentration risk, Percentage | 10.00% | ||||
Revenues [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||
Concentration risk, Percentage | 30.50% | 10.90% | 28.90% | ||
Revenues [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||||
Concentration risk, Percentage | 17.90% | 21.30% | |||
Revenues [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||
Concentration risk, Percentage | 10.60% | 11.30% | |||
Revenues [Member] | Customer Concentration Risk [Member] | Customer D [Member] | |||||
Concentration risk, Percentage | 16.10% | 15.10% | 17.40% | 13.30% | |
Revenues [Member] | Customer Concentration Risk [Member] | Customer E [Member] | |||||
Concentration risk, Percentage | 15.70% | 12.90% | |||
Revenues [Member] | Customer Concentration Risk [Member] | Customer F [Member] | |||||
Concentration risk, Percentage | 21.80% | 16.30% | |||
Revenues [Member] | Customer Concentration Risk [Member] | Customer G [Member] | |||||
Concentration risk, Percentage | 20.00% | 16.90% | |||
Revenues [Member] | Customer Concentration Risk [Member] | Customer H [Member] | |||||
Concentration risk, Percentage | 10.10% | ||||
Revenues [Member] | Customer Concentration Risk [Member] | Customer I [Member] | |||||
Concentration risk, Percentage | 10.10% | ||||
Trade Receivables [Member] | |||||
Concentration risk, Percentage | 10.00% | ||||
Trade Receivables [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||
Concentration risk, Percentage | 18.40% | ||||
Trade Receivables [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||||
Concentration risk, Percentage | 17.70% | ||||
Trade Receivables [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||
Concentration risk, Percentage | 10.80% | ||||
Trade Receivables [Member] | Customer Concentration Risk [Member] | Customer D [Member] | |||||
Concentration risk, Percentage | 26.10% | ||||
Trade Receivables [Member] | Customer Concentration Risk [Member] | Customer E [Member] | |||||
Concentration risk, Percentage | 17.10% | ||||
Trade Receivables [Member] | Customer Concentration Risk [Member] | Customer F [Member] | |||||
Concentration risk, Percentage | 10.30% | 13.00% | |||
Trade Receivables [Member] | Customer Concentration Risk [Member] | Customer G [Member] | |||||
Concentration risk, Percentage | 41.10% |
Significant Accounting Polici_7
Significant Accounting Policies (Parenthetical) (Details 1) | 9 Months Ended |
Sep. 30, 2019 | |
Revenues [Member] | |
Concentration risk, Percentage | 10.00% |
Trade Receivables [Member] | |
Concentration risk, Percentage | 10.00% |
Accounting Standards (Details N
Accounting Standards (Details Narrative) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Cash portion of loss on extinguishment of debt | $ 6,560 |
Accounting Standards Update 2016-15 [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Cash portion of loss on extinguishment of debt | $ 6,600 |
Prepaids and Other Current As_3
Prepaids and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid insurance | $ 10,937 | $ 6,011 |
Recoverable costs from insurance | 3,540 | |
Sales tax receivable | 781 | 1,987 |
Other receivables | 895 | |
Income tax receivable | 810 | 810 |
Other current assets | 2,339 | 3,194 |
Total prepaid expenses and other current assets | $ 14,867 | $ 16,437 |
Prepaids and Other Current As_4
Prepaids and Other Current Assets (Details Narrative) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2018Segment | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Prepaid And Other Current Assets [Line Items] | ||||
Recoverable costs from insurance | $ 2,900 | |||
Number of conventional hydraulic fleets caught in fire | Segment | 1 | |||
Insurance proceeds from damaged property and equipment | $ 706 | $ 8,011 | ||
Other Income [Member] | ||||
Prepaid And Other Current Assets [Line Items] | ||||
Reimbursement of expenses incurred | 1,600 | |||
Fire [Member] | ||||
Prepaid And Other Current Assets [Line Items] | ||||
Insurance proceeds from damaged property and equipment | $ 2,400 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 43,088 | $ 43,088 | |
Accumulated Amortization | 15,198 | 20,897 | |
Net Book Value | $ 27,890 | 22,191 | |
Order Backlog [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (in years) | 3 years | 3 years | |
Gross Carrying Value | $ 15,345 | 15,345 | |
Accumulated Amortization | 10,742 | 15,345 | |
Net Book Value | $ 4,603 | ||
Trademarks [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (in years) | 10 years | 10 years | |
Gross Carrying Value | $ 3,132 | 3,132 | |
Accumulated Amortization | 600 | 835 | |
Net Book Value | $ 2,532 | 2,297 | |
Patents [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (in years) | 20 years | 20 years | |
Gross Carrying Value | $ 22,955 | 22,955 | |
Accumulated Amortization | 2,200 | 3,061 | |
Net Book Value | $ 20,755 | 19,894 | |
Covenants Not To Compete [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (in years) | 2 years | 2 years | |
Gross Carrying Value | $ 1,524 | 1,524 | |
Accumulated Amortization | $ 1,524 | 1,524 | |
Customer Relationship [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (in years) | 1 year | 1 year | |
Gross Carrying Value | $ 132 | 132 | |
Accumulated Amortization | $ 132 | $ 132 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 1.9 | $ 2.1 | $ 5.7 | $ 6.3 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Remainder of 2019 | $ 365 | |
2020 | 1,461 | |
2021 | 1,461 | |
2022 | 1,461 | |
2023 | 1,461 | |
Thereafter | 15,982 | |
Net Book Value | $ 22,191 | $ 27,890 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 695,041 | $ 486,163 |
Less: Accumulated depreciation and amortization | (233,512) | (154,776) |
Property and equipment, net | 461,529 | 331,387 |
Fracturing Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 642,410 | 449,685 |
Fracturing Equipment [Member] | Minimum [Member] | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life (in years) | 1 year 6 months | |
Fracturing Equipment [Member] | Maximum [Member] | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life (in years) | 25 years | |
Light Duty Vehicles [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 7,940 | 6,455 |
Estimated Useful Life (in years) | 5 years | |
Furniture and fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 277 | 231 |
Estimated Useful Life (in years) | 5 years | |
IT Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 6,721 | 5,339 |
Estimated Useful Life (in years) | 3 years | |
Auxiliary Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 36,968 | 24,118 |
Auxiliary Equipment [Member] | Minimum [Member] | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life (in years) | 2 years | |
Auxiliary Equipment [Member] | Maximum [Member] | ||
Property Plant And Equipment [Line Items] | ||
Estimated Useful Life (in years) | 20 years | |
Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 725 | $ 335 |
Estimated Useful Life | Term of lease |
Property and Equipment, Net - (
Property and Equipment, Net - (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jan. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property Plant And Equipment [Line Items] | ||||||
Depreciation and amortization expense | $ 37,800 | $ 24,700 | $ 112,200 | $ 71,200 | ||
Net book value | 461,529 | 461,529 | $ 331,387 | |||
Accumulated depreciation | 233,512 | 233,512 | 154,776 | |||
Future minimum lease payments related to capital leases | 15,200 | 15,200 | ||||
Future minimum lease payments related to capital lease due in remainder of fiscal year | 9,300 | 9,300 | ||||
Future minimum lease payments related to capital lease due in two years | 5,900 | 5,900 | ||||
Adjustment to carrying amount of equipment | $ 100 | |||||
Imputed interest | 600 | 600 | ||||
August And October 2017 Capital Lease Agreement [Member] | Fracturing Equipment [Member] | ||||||
Property Plant And Equipment [Line Items] | ||||||
Net book value | 29,800 | 29,800 | ||||
Accumulated depreciation | $ 17,100 | $ 17,100 | ||||
August And September2017 Capital Lease Agreement | Fracturing Equipment [Member] | ||||||
Property Plant And Equipment [Line Items] | ||||||
Net book value | $ 7,600 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables And Accruals [Abstract] | ||
Accrued payroll and benefits | $ 8,674 | $ 7,087 |
Accrued taxes | 7,472 | 8,119 |
Accrued interest | 11,090 | |
Other current liabilities | 2,217 | 1,838 |
Accrued expenses and other current liabilities | $ 29,453 | $ 17,044 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) $ in Thousands | Sep. 15, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Short Term Debt [Line Items] | |||
Notes payable, current portion | $ 7,250 | $ 4,560 | |
Premium Finance Agreement [Member] | Workers Compensation, Pollution, Umbrella, General Liability, and Auto Coverage [Member] | |||
Short Term Debt [Line Items] | |||
Short term debt, term | The Company made an initial down payment and entered into a premium finance agreement with a credit finance institution to pay the remainder of the premiums. The aggregate amount of the premiums financed was $9.1 million at an interest rate of 4.75%. Under the terms of the agreement, the Company agreed to pay 15 equal monthly payments of $0.6 million beginning October 15, 2019 through maturity on December 15, 2020. The payments include interest expense of $0.3 million. The note had an outstanding balance of $9.1 million as of September 30, 2019, of which $7.2 million was due within one year from the balance sheet date. | ||
Aggregate amount of premiums financed | $ 9,100 | ||
Insurance premium interest rate | 4.75% | ||
Insurance premium payment term | Under the terms of the agreement, the Company agreed to pay 15 equal monthly payments of $0.6 million beginning October 15, 2019 through maturity on December 15, 2020. | ||
Insurance premium payment | $ 600 | ||
Insurance premium beginning payment date | Oct. 15, 2019 | ||
Insurance premium maturity date | Dec. 15, 2020 | ||
Interest expense on insurance premium | $ 300 | ||
Notes payable | $ 9,100 | ||
Notes payable, current portion | $ 7,200 | ||
Premium Finance Agreement [Member] | Directors and Officers Liability, Workers Compensation, Pollution, Umbrella, General Liability, and Auto Coverage [Member] | |||
Short Term Debt [Line Items] | |||
Notes payable, current portion | $ 4,600 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Capital leases | $ 14,616 | $ 25,338 |
Total debt | 324,537 | 132,880 |
Unamortized discount on debt and debt issuance costs | (9,955) | (3,963) |
Current maturities | (26,172) | (29,501) |
Net Long-term debt | 288,410 | 99,416 |
First Lien Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Credit Facility | 55,975 | |
ABL Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Credit Facility | 40,109 | |
Equipment Financing [Member] | ||
Debt Instrument [Line Items] | ||
Credit Facility | 19,812 | 11,567 |
Senior Secured Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Credit Facility | $ 250,000 | |
Second Lien Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Credit Facility | $ 40,000 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | May 07, 2019 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||
Loss on extinguishment of debt | $ (12,558) | |
First Lien Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Write off of unamortized debt issuance cost | $ 1,700 | |
Senior Secured Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 250,000 | |
Debt instrument, maturity date | May 7, 2024 | |
Debt instrument, frequency of periodic payment | quarterly | |
Debt instrument periodic payment percentage of principal amount. | 2.00% | |
Debt instrument, floor interest rate percentage | 2.00% | |
Line of credit facility, interest rate | 8.25% | |
Debt instrument, exit fee percentage | 2.00% | |
Debt instrument, repayment period | 120 days | |
Repayment description | Proceeds from the Senior Secured Term Loan were used to repay the outstanding balances of the First Lien Credit Facility, Second Lien Term Loan, and certain equipment financings, fund a cash account reserved solely for future expansion capital expenditures, and pay associated fees and expenses | |
Debt instrument, discount amount | $ 5,000 | |
Debt issuance costs | $ 5,800 | |
Long term debt, principal outstanding balance | $ 250,000 | |
Outstanding principal balance due within one year | $ 5,000 | |
Senior Secured Term Loan [Member] | Debt Instrument, Redemption, Period Three [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, prepayment percentage | 2.00% | |
Senior Secured Term Loan [Member] | Debt Instrument, Redemption, Period Four [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, prepayment percentage | 1.00% | |
Senior Secured Term Loan [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, prepayment percentage | 25.00% | |
Senior Secured Term Loan [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, prepayment percentage | 100.00% | |
Second Lien Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Loss on extinguishment of debt | $ (6,500) | |
Write off of unamortized debt issuance cost | $ 4,300 |
Debt (Details Narrative 1)
Debt (Details Narrative 1) | May 07, 2019USD ($) | Sep. 30, 2019USD ($) |
Debt Instrument [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 68,800,000 | |
Outstanding revolver loan | $ 40,100,000 | |
ABL Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 75,000,000 | |
Line of credit facility, maturity description | ABL Credit Agreement (the “ABL Credit Facility”) which matures on February 6, 2024 | |
Line of credit facility, fixed charge coverage ratio | 1 | |
Debt issuance costs | $ 1,200,000 | |
ABL Credit Facility [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Unused portion of applicable fee rate | 0.25% | |
ABL Credit Facility [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Unused portion of applicable fee rate | 0.375% | |
ABL Credit Facility [Member] | Base Rate | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility, interest rate | 0.50% | |
ABL Credit Facility [Member] | Base Rate | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility, interest rate | 1.00% | |
ABL Credit Facility [Member] | LIBOR | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility, interest rate | 1.50% | |
ABL Credit Facility [Member] | LIBOR | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility, interest rate | 2.00% |
Debt (Details Narrative 2)
Debt (Details Narrative 2) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Current portion of long-term equipment financing | $ 7,886 | $ 3,263 |
Equipment Financing [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 19,800 | 11,600 |
Current portion of long-term equipment financing | $ 7,900 | $ 3,300 |
Debt instrument, weighted average interest rate | 6.40% | 6.30% |
Debt instrument, maturity date, description | From 2016 through 2019, the Company entered into security agreements with financing institutions for the purchase of certain fracturing equipment. | |
Debt instrument, maturity year | 2023 |
Debt (Details 1)
Debt (Details 1) $ in Thousands | Sep. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2019 | $ 12,762 |
2020 | 17,416 |
2021 | 10,594 |
2022 | 9,157 |
2023 | 5,749 |
Thereafter | 268,859 |
Principal Amount of Long-term Debt | $ 324,537 |
Mezzanine Equity (Details Narra
Mezzanine Equity (Details Narrative) | Aug. 24, 2019USD ($) | May 23, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018$ / sharesshares |
Temporary Equity [Line Items] | ||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | ||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||
Number of warrants exercisable for shares of class A common stock | 1 | |||
Common stock maximum trading period | 30 days | |||
Estimated fair value of warrant | $ | $ 12,800,000 | |||
Warrants [Member] | Valuation Technique, Option Pricing Mode [Member] | Expected Term [Member] | ||||
Temporary Equity [Line Items] | ||||
Contractual term | 6 years 6 months | |||
Warrants [Member] | Valuation Technique, Option Pricing Mode [Member] | Volatility Rate [member] | ||||
Temporary Equity [Line Items] | ||||
Alternative investment, measurement input | 53 | |||
Warrants [Member] | Valuation Technique, Option Pricing Mode [Member] | Risk Free Interest Rate [Member] | ||||
Temporary Equity [Line Items] | ||||
Alternative investment, measurement input | 2.2 | |||
Warrants [Member] | Valuation Technique, Option Pricing Mode [Member] | Expected Dividend Rate | ||||
Temporary Equity [Line Items] | ||||
Alternative investment, measurement input | 0 | |||
Series A Convertible Redeemable Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Preferred stock, authorized | 10,000,000 | |||
Preferred stock, par value | $ / shares | $ 0.0001 | |||
Number of shares issued | 55,000 | |||
Aggregate purchase price per share | $ / shares | $ 1,000 | |||
Warrants outstanding | 2,933,333 | |||
Temporary equity, dividend rate till second anniversary of closing date at annual rate | 12.00% | |||
Temporary equity, dividend rate after second anniversary | 16.00% | |||
Dividend declared | $ | $ 0 | |||
Redemption price per share, redeemable within year from closing date | $ / shares | $ 1,092.73 | |||
Temporary equity, conversion price per share | $ / shares | 6.67 | |||
Estimated fair value of warrant | $ | $ 10,800,000 | |||
Temporary equity, effective conversion | $ / shares | $ 5.40 | |||
Temporary equity, reduction in carrying value, beneficial conversion feature | $ | $ 20,100,000 | |||
Temporary equity, amortization period of discount | 2 years | |||
Series A Convertible Redeemable Preferred Stock [Member] | Minimum [Member] | ||||
Temporary Equity [Line Items] | ||||
Temporary Equity to Conversion of Preferred Stock | $ | $ 1,000,000 | |||
Temporary equity, minimum percentage of conversion price to the closing price | 130.00% | |||
Series A Convertible Redeemable Preferred Stock [Member] | Dividends Payable in February [Member] | ||||
Temporary Equity [Line Items] | ||||
Dividend payable date | --02-24 | |||
Series A Convertible Redeemable Preferred Stock [Member] | Dividends Payable in may [Member] | ||||
Temporary Equity [Line Items] | ||||
Dividend payable date | --05-24 | |||
Series A Convertible Redeemable Preferred Stock [Member] | Dividends Payable in August [Member] | ||||
Temporary Equity [Line Items] | ||||
Dividend payable date | --08-24 | |||
Series A Convertible Redeemable Preferred Stock [Member] | Dividends Payable in November [Member] | ||||
Temporary Equity [Line Items] | ||||
Dividend payable date | --11-24 | |||
Series A Convertible Redeemable Preferred Stock [Member] | Private Placement [Member] | Purchasers [Member] | ||||
Temporary Equity [Line Items] | ||||
Number of shares issued | 55,000 | |||
Aggregate purchase price per share | $ / shares | $ 1,000 | |||
Gross proceeds from convertible preferred stock | $ | $ 55,000,000 | |||
Number of warrants exercisable for shares of class A common stock | 2,933,333 | |||
Number of additional warrants issued to the purchasers | 4,399,992 | |||
Warrants outstanding | 488,888 | |||
Percentage of warrants ownership interest | 29.80% | |||
Common Class A [Member] | ||||
Temporary Equity [Line Items] | ||||
Number of warrants exercisable for shares of class A common stock | 12,747,318 | |||
Average daily trading volume of common stock | 250,000 | |||
Conversion of common stock consecutive trading period | 20 days | |||
Common stock maximum trading period | 30 days |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - $ / shares | 1 Months Ended | 9 Months Ended | ||||
Jun. 30, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | May 23, 2019 | Dec. 31, 2018 | |
Class Of Stock [Line Items] | ||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | ||||
Common stock maximum trading period | 30 days | |||||
Warrants issued to purchase stock | 1 | |||||
Closing price per share | $ 24 | |||||
Exercise price | $ 5.75 | |||||
Warrants expiration term | 5 years | |||||
Redemption price of outstanding warrants | $ 0.01 | |||||
Long Term Incentive Plan [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Shares of Restricted Stock Granted | 4,315,967 | |||||
USWS Holdings [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Noncontrolling Interest, Ownership Percentage by Parent | 20.20% | |||||
Public Warrants [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Warrants outstanding | 9,994,635 | |||||
Private Placement Warrant [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Warrants outstanding | 15,500,000 | |||||
Sponsor and Underwriter [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Warrants issued to purchase stock | 15,500,000 | |||||
Initial Public Offering [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Warrants issued to purchase stock | 32,500,000 | |||||
Convertible Redeemable Preferred Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Number of shares issued | 55,000 | 0 | ||||
Number of shares outstanding | 55,000 | 0 | ||||
Common Class A [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||
Common stock, authorized | 400,000,000 | 400,000,000 | ||||
Common stock, issued | 54,588,775 | 49,254,760 | ||||
Common stock, outstanding | 54,607,462 | 54,588,775 | 49,254,760 | |||
Common stock maximum trading period | 30 days | |||||
Conversion of Class B common stock to Class A common stock | 161,932 | 2,925,712 | 161,932 | |||
Warrants issued to purchase stock | 12,747,318 | |||||
Exercise price | $ 0.13 | $ 0.13 | ||||
Number of warrants exchanged | 11,640,974 | 10,864,391 | ||||
Shares of Restricted Stock Granted | 2,218,183 | |||||
Common Class A [Member] | Long Term Incentive Plan [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common Stock Available For Issuance | 8,160,500 | |||||
Common Class A [Member] | Private Placement Warrant [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Warrants issued to purchase stock | 2,933,333 | |||||
Number of additional warrants issued to the purchasers | 4,399,992 | |||||
Common Class A [Member] | Purchasers [Member] | Private Placement Warrant [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Warrants outstanding | 2,933,333 | |||||
Common Class A [Member] | Stock Price Equaled or Exceeded 12.00 [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, shares outstanding subject to cancellation | 1,000,000 | |||||
Closing price per share | $ 12 | |||||
Common stock maximum trading period | 30 days | |||||
Common Class A [Member] | Stock Price 13.50 [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, shares outstanding subject to cancellation | 609,677 | |||||
Closing price per share | $ 13.50 | |||||
Common Class B [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||
Common stock, authorized | 20,000,000 | 20,000,000 | ||||
Common stock, issued | 13,775,400 | 13,937,332 | ||||
Common stock, outstanding | 13,775,400 | 13,775,400 | 13,937,332 | |||
Common stock, voting rights | one | |||||
Conversion of Class B common stock to Class A common stock | (161,932) | |||||
Series A Convertible Redeemable Preferred Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | |||||
Preferred stock, authorized | 10,000,000 | |||||
Number of shares issued | 55,000 | |||||
Number of shares outstanding | 55,000 | |||||
Warrants outstanding | 2,933,333 | |||||
Series A Convertible Redeemable Preferred Stock [Member] | Purchasers [Member] | Private Placement Warrant [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Warrants issued to purchase stock | 2,933,333 | |||||
Warrants outstanding | 2,933,333 |
Earning (Loss) Per Share - (Det
Earning (Loss) Per Share - (Details Narrative) - shares | Nov. 09, 2024 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Earnings Per Share Basic [Line Items] | |||||
Basic and diluted net income per share excludes the income attributable And shares associated to cancellation | 1,609,677 | 1,609,677 | 1,609,677 | 1,609,677 | |
Common Class A [Member] | Scenario, Forecast [Member] | |||||
Earnings Per Share Basic [Line Items] | |||||
Basic and diluted net income per share excludes the income attributable And shares associated to cancellation | 1,609,677 |
Earning Per Share (Details)
Earning Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Basic Net Income Per Share | ||||
Net loss attributable to U.S. Well Services, Inc. | $ (16,969) | $ (10,544) | $ (60,720) | $ (18,573) |
Net loss attributable to cancellable Class A shares | 527 | 343 | 1,924 | 603 |
Basic net loss attributable to U.S. Well Services, Inc. shareholders | (16,442) | (10,201) | (58,796) | (17,970) |
Dividends accrued on Series A preferred stock | (1,670) | (2,330) | ||
Deemed and imputed dividends on Series A preferred stock | (4,406) | (5,966) | ||
Basic net loss attributable to U.S. Well Services, Inc. common shareholders | $ (22,518) | $ (10,201) | $ (67,092) | $ (17,970) |
Weighted average shares outstanding | 51,859,283 | 49,549,676 | 50,791,787 | 49,549,676 |
Cancellable Class A shares | (1,609,677) | (1,609,677) | (1,609,677) | (1,609,677) |
Basic and diluted weighted average shares outstanding | 50,249,606 | 47,939,999 | 49,182,110 | 47,939,999 |
Basic and dilutive net income per share Attributable to Class A Shareholders | $ (0.45) | $ (0.21) | $ (1.36) | $ (0.37) |
Earning (Loss) Per Share (Detai
Earning (Loss) Per Share (Details1) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities excluded as anti-dilutive | 41,848,881 | 41,848,881 |
Anti-dilutive Stock Options [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities excluded as anti-dilutive | 1,068,162 | 1,068,162 |
Anti-dilutive Warrants [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities excluded as anti-dilutive | 15,680,651 | 15,680,651 |
Anti-dilutive Restricted Stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities excluded as anti-dilutive | 2,729,496 | 2,729,496 |
Anti-dilutive Class B Shares Convertible into Class A Common Stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities excluded as anti-dilutive | 13,775,400 | 13,775,400 |
Anti-dilutive Series A Preferred Stock Convertible into Class A Common Stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities excluded as anti-dilutive | 8,595,172 | 8,595,172 |
Share-Based Compensation (Detai
Share-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock-based compensation to be recognized | $ 22.8 | $ 22.8 | |
Period for recognition of unrecognized compensation cost | 3 years 8 months 12 days | ||
Long Term Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Fair value per option | $ 3.95 | ||
Terms of stock option grant | 7 years | ||
Long Term Incentive Plan [Member] | Common Class A [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock granted | 46,875 | ||
Weighted-average grant-date fair value, Vested | $ 8.91 | ||
Stock-based compensation expense | $ 0.4 | ||
Stock recognition, requisite service period | 1 year | ||
Restricted Stock [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock granted | 2,218,183 | ||
Forfeited shares | 18,687 | ||
Fair value per option | $ 3.95 | ||
Restricted Stock [Member] | Long Term Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock granted | 2,218,183 | ||
Stock-based compensation to be recognized | $ 19.5 | ||
Share vesting period | 4 years | ||
Stock-based compensation expense | 2.3 | $ 5.6 | |
Restricted Stock [Member] | Long Term Incentive Plan [Member] | Cost of Services [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock-based compensation expense | 0.8 | 1.8 | |
Restricted Stock [Member] | Long Term Incentive Plan [Member] | Selling, General and Administrative Expenses [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 1.5 | $ 3.8 | |
Restricted Stock [Member] | Long Term Incentive Plan [Member] | Employee Terminations [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Forfeited shares | 18,687 | ||
Employee Stock Option [Member] | Long Term Incentive Plan [Member] | Common Class A [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock granted | 1,068,162 | ||
Stock-based compensation to be recognized | $ 4.2 | ||
Share vesting period | 4 years |
Share-Based Compensation (Det_2
Share-Based Compensation (Details) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unvested units at beginning of period | shares | 530,000 |
Unvested, Granted | shares | 2,218,183 |
Unvested, Forfeited | shares | (18,687) |
Unvested units at end of period | shares | 2,729,496 |
Weighted-average grant-date fair value units at beginning of period | $ 8.72 |
Weighted-average grant-date fair value, Granted | 8.91 |
Weighted-average grant-date fair value, Forfeited | 8.91 |
Weighted-average grant-date fair value units at end of period | $ 8.87 |
Expected option term | 4 years 9 months |
Expected price volatility | 49.00% |
Expected dividend yield | 0.00% |
Risk-free Rate | 2.63% |
Fair value per option | $ 3.95 |
Grant date exercise price per share | $ 8.91 |
Employee Benefit Plan - (Detail
Employee Benefit Plan - (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Defined contribution plan, employer matching contribution | 100.00% | |||
Employer matching contributions | $ 1.1 | $ 0.9 | $ 3.8 | $ 2.5 |
Defined contribution plan, vesting period | 2 years | |||
Maximum [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Defined contribution plan, percent of employees' gross pay | 6.00% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate on continuing operations | (0.62%) | |
Uncertain tax positions | $ 0 | $ 0 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |
Deferred tax assets, valuation allowance | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Contracted | |
Remainder of 2019 | $ 20,038 |
2020 | 38,992 |
2021 | 25,524 |
Total | 84,554 |
Minimum Commitments | |
Remainder of 2019 | 5,162 |
2020 | 6,998 |
2021 | 2,448 |
Total | $ 14,608 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) $ in Millions | Oct. 09, 2019 | Apr. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Loss Contingencies [Line Items] | ||||||||
Excluded amount of contracted | $ 47.1 | |||||||
Excluded amount of minimum commitments | $ 48 | |||||||
Rent expense | $ 0.7 | $ 0.6 | $ 2 | $ 1.6 | ||||
Sublease rent | $ 0.6 | |||||||
Sublease agreement , term of contract | 46 months | |||||||
Sublease agreement, commencement date | May 1, 2019 | |||||||
Estimated claims incurred, but not reported | 0.4 | 0.4 | $ 0.3 | |||||
Subsequent Event [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
lease rent for amended period | $ 1.3 | |||||||
Operating lease agreement, amended term | 36 months | |||||||
Operating lease agreement, commencement date | Nov. 1, 2019 | |||||||
Cost of Services [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Rent expense | 0.6 | 0.5 | 1.6 | 1.4 | ||||
Selling, General and Administrative Expenses [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Rent expense | $ 0.1 | $ 0.1 | $ 0.4 | $ 0.2 | ||||
Minimum [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Term of operating leases for facilities | 24 months | 24 months | ||||||
Maximum [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Term of operating leases for facilities | 76 months | 76 months |
Commitments and Contingencies_3
Commitments and Contingencies - (Details1) $ in Thousands | Sep. 30, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Operating lease,gross amount, remainder of 2019 | $ 435 |
Operating lease, gross amount, 2020 | 1,323 |
Operating lease, gross amount, 2021 | 651 |
Operating lease, gross amount, 2022 | 476 |
Operating lease, gross amount, 2023 | 288 |
Operating lease, gross amount. thereafter | 325 |
Total minimum future rentals, gross | 3,498 |
Income from sublease, remainder of 2019 | (43) |
Income from sublease, 2020 | (173) |
Income from sublease, 2021 | (178) |
Income from sublease, 2022 | (182) |
Income from sublease, 2023 | (31) |
Income from sublease, total minimum future rentals | (607) |
Remainder of 2019 | 392 |
2020 | 1,150 |
2021 | 473 |
2022 | 294 |
2023 | 257 |
Thereafter | 325 |
Total minimum future rentals, net | $ 2,891 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019USD ($)shares | Sep. 30, 2019USD ($)Directorshares | Dec. 31, 2018USD ($) | |
Number of warrants exercisable for shares of class A common stock | 1 | 1 | |
Series A Convertible Redeemable Preferred Stock [Member] | |||
Number of shares issued | 55,000 | 55,000 | |
Rockwater Energy Solutions [Member] | |||
Purchase of energy related inventory, chemicals | $ | $ 3.4 | $ 8.2 | |
Number of directors | Director | 2 | ||
Accounts Payable | $ | $ 3.3 | $ 3.3 | $ 0.3 |
Rockwater Energy Solutions [Member] | Series A Convertible Redeemable Preferred Stock [Member] | Crestview Partners (“Crestview”) [Member] | |||
Number of shares issued | 20,000 | 20,000 | |
Payment for purchase of preferred stock | $ | $ 20 | ||
Number of warrants exercisable for shares of class A common stock | 1,066,666 | 1,066,666 | |
Rockwater Energy Solutions [Member] | Series A Convertible Redeemable Preferred Stock [Member] | Crestview Partners (“Crestview”) [Member] | Maximum [Member] | |||
Right to receive additional warrants | 1,600,002 | 1,600,002 |