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|
Delaware
|
|
001-37988
|
|
38-4016639
|
(State or other jurisdiction
|
|
(Commission File Number)
|
|
(IRS Employer
|
of incorporation)
|
|
|
|
Identification Number)
|
2121 Sage Road, Houston, Texas
|
|
77056
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Exhibit
No.
|
|
Description
|
|
|
|
10.1
|
|
Contingent Value Rights Agreement, dated July 3, 2017, by and among the Company, RockPile Energy Holdings, LLC and the Permitted Holders (incorporated herein by reference to Exhibit 10.1 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
10.2
|
|
Form of Lockup Agreement (incorporated herein by reference to Exhibit 10.2 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
10.3
|
|
Amended and Restated Stockholders’ Agreement, dated July 3, 2017, by and among the Company, Keane Investor Holdings LLC, RockPile Energy Holdings, LLC and WDE RockPile Aggregate, LLC (incorporated herein by reference to Exhibit 10.3 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
10.4
|
|
Incremental Facility Agreement and Amendment No. 1, dated as of July 3, 2017, by and among Keane Group Holdings, LLC (“KGH LLC”), Keane Frac, LP and KS Drilling, LLC, as borrowers, the Company, KGH Intermediate Holdco I, LLC, KGH Intermediate Holdco II, LLC and Keane Frac GP, LLC, as guarantors, each of the incremental lenders party thereto, each of the existing lenders party thereto, and Owl Rock Capital Corporation (“Owl Rock”), as administrative agent and collateral agent, to the Term Loan Agreement, dated as of March 15, 2017, among the Company, as the parent guarantor, KGH LLC, as the lead borrower, the other borrowers and guarantors party thereto, the existing lenders, and Owl Rock, as administrative agent and collateral agent (incorporated herein by reference to Exhibit 10.4 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
10.5
|
|
Employment Agreement, dated as of May 18, 2017, and effective as of July 3, 2017, by and between Keane Group, Inc. and R. Curt Dacar (incorporated herein by reference to Exhibit 10.5 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
23.1
|
|
Consent of Grant Thornton, LLP, Independent Certified Public Accountants.
|
|
|
|
23.2
|
|
Consent of KPMG LLP, Independent Auditors.
|
|
|
|
99.1
|
|
Press release dated July 3, 2017 (incorporated herein by reference to Exhibit 99.1 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
99.2
|
|
Audited consolidated financial statements of RockPile Energy Holdings, LLC as of December 31, 2016 and 2015 and for the periods from September 8, 2016 to December 31, 2016, January 1, 2016 to September 7, 2016 and the year ended December 31, 2015.
|
|
|
|
99.3
|
|
Audited consolidated financial statements of RockPile Energy Services, LLC as of and for the fiscal year ended January 31, 2015.
|
|
|
|
99.4
|
|
Unaudited consolidated balance sheet of RockPile Energy Holdings, LLC as of June 30, 2017, and the unaudited consolidated statements of operations, unaudited consolidated statements of cash flows and the unaudited consolidated statement of changes in members’ equity of RockPile Energy Holdings, LLC, each for the six months ended June 30, 2017.
|
|
|
|
99.5
|
|
Unaudited pro forma condensed combined balance sheet as of June 30, 2017, unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2017 and unaudited pro forma condensed combined statement of operations for the year ended December 31, 2016.
|
|
|
|
|
|
|
|
|
|
KEANE GROUP, INC.
|
||
|
|
|
|
||
Date: August 4, 2017
|
|
|
By:
|
|
/s/ Kevin M. McDonald
|
|
|
|
Name:
|
|
Kevin M. McDonald
|
|
|
|
Title:
|
|
Executive Vice President, General Counsel
|
|
|
|
|
|
and Secretary
|
|
|
|
Exhibit
No. |
|
Description
|
|
|
|
10.1
|
|
Contingent Value Rights Agreement, dated July 3, 2017, by and among the Company, RockPile Energy Holdings, LLC and the Permitted Holders (incorporated herein by reference to Exhibit 10.1 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
10.2
|
|
Form of Lockup Agreement (incorporated herein by reference to Exhibit 10.2 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
10.3
|
|
Amended and Restated Stockholders’ Agreement, dated July 3, 2017, by and among the Company, Keane Investor Holdings LLC, RockPile Energy Holdings, LLC and WDE RockPile Aggregate, LLC (incorporated herein by reference to Exhibit 10.3 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
10.4
|
|
Incremental Facility Agreement and Amendment No. 1, dated as of July 3, 2017, by and among Keane Group Holdings, LLC (“KGH LLC”), Keane Frac, LP and KS Drilling, LLC, as borrowers, the Company, KGH Intermediate Holdco I, LLC, KGH Intermediate Holdco II, LLC and Keane Frac GP, LLC, as guarantors, each of the incremental lenders party thereto, each of the existing lenders party thereto, and Owl Rock Capital Corporation (“Owl Rock”), as administrative agent and collateral agent, to the Term Loan Agreement, dated as of March 15, 2017, among the Company, as the parent guarantor, KGH LLC, as the lead borrower, the other borrowers and guarantors party thereto, the existing lenders, and Owl Rock, as administrative agent and collateral agent (incorporated herein by reference to Exhibit 10.4 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
10.5
|
|
Employment Agreement, dated as of May 18, 2017, and effective as of July 3, 2017, by and between Keane Group, Inc. and R. Curt Dacar (incorporated herein by reference to Exhibit 10.5 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
23.1
|
|
Consent of Grant Thornton, LLP Independent Certified Public Accountants.
|
|
|
|
23.2
|
|
Consent of KPMG LLP, Independent Auditors.
|
|
|
|
99.1
|
|
Press release dated July 3, 2017 (incorporated herein by reference to Exhibit 99.1 to Keane Group, Inc.'s Current Report on Form 8-K filed on July 3, 2017).
|
|
|
|
99.2
|
|
Audited consolidated financial statements of RockPile Energy Holdings, LLC as of December 31, 2016 and 2015 and for the periods from September 8, 2016 to December 31, 2016, January 1, 2016 to September 7, 2016 and the year ended December 31, 2015.
|
|
|
|
99.3
|
|
Audited consolidated financial statements of RockPile Energy Services, LLC as of and for the fiscal year ended January 31, 2015.
|
|
|
|
99.4
|
|
Unaudited consolidated balance sheet of RockPile Energy Holdings, LLC as of June 30, 2017, and the unaudited consolidated statements of operations, unaudited consolidated statements of cash flows and the unaudited consolidated statement of changes in members’ equity of RockPile Energy Holdings, LLC, each for the six months ended June 30, 2017.
|
|
|
|
99.5
|
|
Unaudited pro forma condensed combined balance sheet as of June 30, 2017, unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2017 and unaudited pro forma condensed combined statement of operations for the year ended December 31, 2016.
|
Contents
|
Page
|
|
|
CONSOLIDATED FINANCIAL STATEMENTS
|
|
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
|
3
|
CONSOLIDATED BALANCE SHEETS
|
5
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
6
|
CONSOLIDATED STATEMENTS OF MEMBERS’ EQUITY
|
7
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
8
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
9
|
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
|
Grant Thornton LLP
211 N Robinson, Suite 1200
Oklahoma City, OK 73102-7148
T 405.218.2800
F 405.218.2801
www.GrantThornton.com
|
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31, 2016
(as restated)
|
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash
|
$
|
11,254,578
|
|
|
|
$
|
1,000
|
|
Accounts receivable, trade
|
25,522,904
|
|
|
|
9,114,062
|
|
||
Inventory
|
2,287,350
|
|
|
|
2,267,980
|
|
||
Prepaid expenses and other current assets
|
2,571,463
|
|
|
|
5,519,792
|
|
||
Total current assets
|
41,636,295
|
|
|
|
16,902,834
|
|
||
Property and equipment, net
|
56,656,242
|
|
|
|
68,671,689
|
|
||
Goodwill
|
—
|
|
|
|
1,671,558
|
|
||
Intangible assets, net
|
6,745,055
|
|
|
|
2,860,051
|
|
||
Other long-term assets
|
5,834,534
|
|
|
|
490,532
|
|
||
Total assets
|
$
|
110,872,126
|
|
|
|
$
|
90,596,664
|
|
Liabilities and Members’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
$
|
15,003,503
|
|
|
|
$
|
12,075,786
|
|
Accrued payroll and related costs
|
2,872,190
|
|
|
|
2,316,808
|
|
||
Accrued expenses
|
10,034,861
|
|
|
|
14,246,905
|
|
||
Current portion of long-term debt
|
—
|
|
|
|
1,109,350
|
|
||
Other current liabilities
|
—
|
|
|
|
42,741
|
|
||
Total current liabilities
|
27,910,554
|
|
|
|
29,791,590
|
|
||
Long-term liabilities:
|
|
|
|
|
||||
Long-term debt
|
—
|
|
|
|
75,484,076
|
|
||
Other long-term liabilities
|
404,009
|
|
|
|
859,315
|
|
||
Total liabilities
|
28,314,563
|
|
|
|
106,134,981
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
||||
Members' equity (deficit):
|
|
|
|
|
||||
Predecessor Series A Units, 30,000,000 authorized, 25,543,210 issued and outstanding as of December 31, 2015
|
—
|
|
|
|
29,000,000
|
|
||
Predecessor Series B Units
|
—
|
|
|
|
—
|
|
||
Successor Class A Units, so limit authorized, 88,019,000 issued and outstanding units as of December 31, 2016
|
88,204,381
|
|
|
|
—
|
|
||
Successor Class B Units
|
—
|
|
|
|
—
|
|
||
Successor Class C Units
|
—
|
|
|
|
—
|
|
||
Additional paid-in capital
|
221,743
|
|
|
|
1,332,000
|
|
||
Accumulated deficit
|
(5,868,561
|
)
|
|
|
(45,870,317
|
)
|
||
Total members’ equity (deficit)
|
82,557,563
|
|
|
|
(15,538,317
|
)
|
||
Total liabilities and members’ equity
|
$
|
110,872,126
|
|
|
|
$
|
90,596,664
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
September 8 to December 31,
2016
(as restated)
|
|
|
January 1 to September 7,
2016
(as restated)
|
|
Year-ended December 31, 2015
|
||||||
Revenue
|
$
|
47,841,511
|
|
|
|
$
|
75,695,313
|
|
|
$
|
231,684,615
|
|
Cost of sales
|
45,811,258
|
|
|
|
83,617,951
|
|
|
234,380,167
|
|
|||
Gross profit (loss)
|
2,030,253
|
|
|
|
(7,922,638
|
)
|
|
(2,695,552
|
)
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
7,532,658
|
|
|
|
21,377,328
|
|
|
26,674,240
|
|
|||
Impairment
|
—
|
|
|
|
—
|
|
|
13,757,758
|
|
|||
(Gain)/Loss of Disposal of Assets
|
—
|
|
|
|
(107,589
|
)
|
|
1,191,996
|
|
|||
Depreciation and amortization
|
354,945
|
|
|
|
479,154
|
|
|
719,803
|
|
|||
Total operating expenses
|
7,887,603
|
|
|
|
21,748,893
|
|
|
42,343,797
|
|
|||
Operating loss
|
(5,857,350
|
)
|
|
|
(29,671,531
|
)
|
|
(45,039,349
|
)
|
|||
Other income and expense:
|
|
|
|
|
|
|
||||||
Cancellation of debt income
|
—
|
|
|
|
60,922,269
|
|
|
—
|
|
|||
Other income
|
5,062
|
|
|
|
10,718
|
|
|
1,915
|
|
|||
Interest expense
|
(16,273
|
)
|
|
|
(3,650,596
|
)
|
|
(3,446,759
|
)
|
|||
Net income (loss)
|
$
|
(5,868,561
|
)
|
|
|
$
|
27,610,860
|
|
|
$
|
(48,484,193
|
)
|
Predecessor:
|
|
Predecessor Shares
|
|
Predecessor Series A Units
|
|
Successor Shares
|
|
Successor Class A Units
|
|
Additional paid-in capital
|
|
Retained earnings/ (accumulated deficit)
|
|
Total
|
||||||||||||
Members’ equity at January 1, 2015
|
|
25,543,210
|
|
|
$
|
29,000,000
|
|
|
—
|
|
|
—
|
|
|
$
|
743,095
|
|
|
$
|
10,913,970
|
|
|
$
|
40,657,065
|
|
|
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
588,905
|
|
|
—
|
|
|
588,905
|
|
|||||
Capital distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,300,094
|
)
|
|
46,316,688
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,484,193
|
|
|
46,316,688
|
|
|||||
Members’ deficit at December 31, 2015
|
|
25,543,210
|
|
|
29,000,000
|
|
|
—
|
|
|
—
|
|
|
1,332,000
|
|
|
(45,870,317
|
)
|
|
15,538,317
|
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
498,930
|
|
|
—
|
|
|
498,930
|
|
|||||
Capital distributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,432
|
)
|
|
—
|
|
|
(1,432
|
)
|
|||||
Net income (as restated)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,610,860
|
|
|
27,610,860
|
|
|||||
Members’ equity at September 7, 2016 (as restated)
|
|
25,543,210
|
|
|
29,000,000
|
|
|
—
|
|
|
—
|
|
|
1,829,498
|
|
|
(18,259,457
|
)
|
|
12,570,041
|
|
|||||
Successor:
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||||
White Deer Acquisition
|
|
—
|
|
|
—
|
|
|
46,316,688
|
|
|
46,502,069
|
|
|
—
|
|
|
—
|
|
|
46,502,069
|
|
|||||
Member contributions
|
|
—
|
|
|
—
|
|
|
41,702,312
|
|
|
41,702,312
|
|
|
—
|
|
|
—
|
|
|
41,702,312
|
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
221,743
|
|
|
—
|
|
|
221,743
|
|
|||||
Net loss (as restated)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,868,561
|
)
|
|
(5,868,561
|
)
|
|||||
Members’ equity at December 31, 2016 (as restated)
|
|
—
|
|
|
—
|
|
|
88,019,000
|
|
|
$
|
88,204,381
|
|
|
$
|
221,743
|
|
|
$
|
(5,868,561
|
)
|
|
$
|
82,557,563
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
September 8 to December 31,
2016
(as restated)
|
|
|
January 1 to September 7,
2016
(as restated)
|
|
Year-ended
December 31,
2015
|
||||||
Cash Flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(5,868,561
|
)
|
|
|
$
|
27,610,860
|
|
|
$
|
(48,484,193
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
3,034,814
|
|
|
|
15,298,909
|
|
|
32,795,248
|
|
|||
(Gain) loss on disposal of assets
|
—
|
|
|
|
(107,589
|
)
|
|
1,191,996
|
|
|||
Amortization of deferred financing costs
|
—
|
|
|
|
278,638
|
|
|
362,525
|
|
|||
Impairment
|
—
|
|
|
|
—
|
|
|
13,757,758
|
|
|||
Stock-based compensation
|
221,743
|
|
|
|
498,930
|
|
|
588,905
|
|
|||
Cancellation of debt income
|
—
|
|
|
|
(60,922,269
|
)
|
|
—
|
|
|||
Other non-cash
|
—
|
|
|
|
10,881
|
|
|
73,821
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
(Increase) decrease in accounts receivable
|
(10,097,774
|
)
|
|
|
(4,827,567
|
)
|
|
87,780,166
|
|
|||
(Increase) decrease in inventories
|
525,349
|
|
|
|
(544,719
|
)
|
|
1,546,190
|
|
|||
(Increase) decrease in prepaid expenses, deposits, & other assets
|
(963,304
|
)
|
|
|
3,269,892
|
|
|
(2,169,072
|
)
|
|||
(Increase) decrease in other assets
|
(70,133
|
)
|
|
|
18,828
|
|
|
(150,544
|
)
|
|||
Increase (decrease) in accounts payable
|
7,929,430
|
|
|
|
(5,062,943
|
)
|
|
(20,856,432
|
)
|
|||
Increase (decrease) in payroll and related costs
|
(927,595
|
)
|
|
|
551,623
|
|
|
(1,079,265
|
)
|
|||
Increase (decrease) in accrued liabilities
|
(2,321,818
|
)
|
|
|
29,779
|
|
|
(5,260,108
|
)
|
|||
Increase (decrease) in other long term liabilities
|
635,623
|
|
|
|
(222,725
|
)
|
|
184,089
|
|
|||
Net cash provided by (used in) operating activities
|
(7,902,226
|
)
|
|
|
(24,119,472
|
)
|
|
60,281,084
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
||||||
Capital expenditures
|
(15,454,368
|
)
|
|
|
(266,233
|
)
|
|
(20,669,688
|
)
|
|||
White Deer Acquisition
|
(46,502,069
|
)
|
|
|
—
|
|
|
—
|
|
|||
AWS Acquisition, net of cash acquired
|
(8,012,824
|
)
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from disposals of property, plant and equipment
|
—
|
|
|
|
191,000
|
|
|
7,467,500
|
|
|||
Net cash used in investing activities
|
(69,969,261
|
)
|
|
|
(75,233
|
)
|
|
(13,202,188
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
||||||
Proceeds from borrowings
|
—
|
|
|
|
43,688,085
|
|
|
147,526,113
|
|
|||
Repayments of borrowings
|
—
|
|
|
|
(14,173,918
|
)
|
|
(191,562,378
|
)
|
|||
Proceeds from insurance financing
|
1,375,204
|
|
|
|
—
|
|
|
2,656,947
|
|
|||
Repayments of insurance financing
|
(453,520
|
)
|
|
|
(2,132,445
|
)
|
|
(2,904,201
|
)
|
|||
Proceeds from members’ contributions
|
88,204,381
|
|
|
|
—
|
|
|
—
|
|
|||
Capital distributions
|
—
|
|
|
|
(1,432
|
)
|
|
(8,300,094
|
)
|
|||
Payment of contingent consideration
|
—
|
|
|
|
(1,284,597
|
)
|
|
(613,643
|
)
|
|||
Other
|
—
|
|
|
|
(58,988
|
)
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
89,126,065
|
|
|
|
26,036,705
|
|
|
(53,197,256
|
)
|
|||
Net increase (decrease) in cash
|
11,254,578
|
|
|
|
1,842,000
|
|
|
(6,118,360
|
)
|
|||
Cash at beginning of the period
|
—
|
|
|
|
1,000
|
|
|
6,119,360
|
|
|||
Cash at end of the period
|
$
|
11,254,578
|
|
|
|
$
|
1,843,000
|
|
|
$
|
1,000
|
|
Supplemental cash flow disclosure:
|
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Interest
|
—
|
|
|
|
2,149,111
|
|
|
3,104,647
|
|
|||
Non-cash investing activities:
|
|
|
|
|
|
|
||||||
Change in accrual of property, plant and equipment
|
1,299,361
|
|
|
|
(123,976
|
)
|
|
(1,231,796
|
)
|
1)
|
Description of Company
|
2)
|
Restatement
|
|
Previously Reported
|
|
Increase (Decrease)
|
|
Restated
|
||||||
Inventory
|
$
|
3,208,842
|
|
|
$
|
(921,492
|
)
|
|
$
|
2,287,350
|
|
Total current assets
|
42,557,787
|
|
|
(921,492
|
)
|
|
41,636,295
|
|
|||
Property and equipment, net
|
56,320,322
|
|
|
335,920
|
|
|
56,656,242
|
|
|||
Total Assets
|
111,457,698
|
|
|
(585,572
|
)
|
|
110,872,126
|
|
|||
Accumulated Deficit
|
(5,282,989
|
)
|
|
(585,572
|
)
|
|
(5,868,561
|
)
|
|||
Total members’ equity (deficit)
|
83,143,135
|
|
|
(585,572
|
)
|
|
82,557,563
|
|
|||
Total liabilities and members’ equity
|
111,457,698
|
|
|
(585,572
|
)
|
|
110,872,126
|
|
|
Previously Reported
|
|
Increase (Decrease)
|
|
Restated
|
||||||
Cost of sales
|
$
|
83,282,030
|
|
|
$
|
335,921
|
|
|
$
|
83,617,951
|
|
Gross Profit
|
(7,586,717
|
)
|
|
(335,921
|
)
|
|
(7,922,638
|
)
|
|||
Operating Loss
|
(29,335,610
|
)
|
|
(335,921
|
)
|
|
(29,671,531
|
)
|
|||
Net income (loss)
|
27,946,781
|
|
|
(335,921
|
)
|
|
27,610,860
|
|
|
Previously Reported
|
|
Increase (Decrease)
|
|
Restated
|
||||||
Cost of sales
|
$
|
45,225,686
|
|
|
$
|
585,572
|
|
|
$
|
45,811,258
|
|
Gross Profit
|
2,615,825
|
|
|
(585,572
|
)
|
|
2,030,253
|
|
|||
Operating Loss
|
(5,271,778
|
)
|
|
(585,572
|
)
|
|
(5,857,350
|
)
|
|||
Net income (loss)
|
(5,282,989
|
)
|
|
(585,572
|
)
|
|
(5,868,561
|
)
|
|
Previously Reported
|
|
Increase (Decrease)
|
|
Restated
|
||||||
Net income (loss)
|
$
|
27,946,781
|
|
|
$
|
(335,921
|
)
|
|
$
|
27,610,860
|
|
(Increase) decrease in inventories
|
(880,640
|
)
|
|
335,921
|
|
|
(544,719
|
)
|
|
Previously Reported
|
|
Increase (Decrease)
|
|
Restated
|
||||||
Net income (loss)
|
$
|
(5,282,989
|
)
|
|
$
|
(585,572
|
)
|
|
$
|
(5,868,561
|
)
|
(Increase) decrease in inventories
|
(60,223
|
)
|
|
585,572
|
|
|
525,349
|
|
3)
|
Summary of Significant Accounting Policies
|
|
Trade accounts receivable
|
|
Revenue
|
|||||||||||
|
Successor
|
|
Predecessor
|
|
Successor
|
|
Predecessor
|
|||||||
|
As of
December 31, 2016
|
|
As of
December 31, 2015
|
|
Period from
September 8, 2016 to
December 31, 2016
|
|
Period from
January 1, 2016 to
September 7, 2016
|
|
Year Ended
December 31, 2015
|
|||||
Customer A
|
|
|
34
|
%
|
|
|
|
|
|
|
||||
Customer B
|
26
|
%
|
|
|
|
|
|
|
|
18
|
%
|
|||
Customer C
|
15
|
%
|
|
25
|
%
|
|
20
|
%
|
|
39
|
%
|
|
24
|
%
|
Customer D
|
|
|
13
|
%
|
|
|
|
|
|
10
|
%
|
|||
Customer E
|
12
|
%
|
|
|
|
16
|
%
|
|
|
|
|
|||
Customer F
|
11
|
%
|
|
|
|
|
|
13
|
%
|
|
22
|
%
|
||
Customer G
|
|
|
|
|
|
|
|
|
|
|||||
Customer H
|
|
|
|
|
14
|
%
|
|
|
|
|
||||
Customer I
|
|
|
|
|
|
|
12
|
%
|
|
|
||||
Customer J
|
|
|
|
|
|
|
|
|
12
|
%
|
||||
Customer K
|
|
|
|
|
11
|
%
|
|
|
|
|
||||
|
64
|
%
|
|
72
|
%
|
|
61
|
%
|
|
64
|
%
|
|
86
|
%
|
•
|
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
|
•
|
Level 2 inputs are 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 inputs for the asset or liability.
|
4)
|
Acquisitions
|
a)
|
White Deer Acquisition of RockPile Energy Services, LLC
|
Purchase price:
|
$
|
46,502,069
|
|
Allocation to assets acquired:
|
|
||
Working capital
|
(2,123,782
|
)
|
|
Property and equipment, and other assets
|
42,212,151
|
|
|
Trade name (1)
|
2,584,300
|
|
|
Non-compete agreements (1)
|
115,400
|
|
|
Customer relationships (1)
|
3,714,000
|
|
(1)
|
The fair value was determined utilizing an income approach, and the fair value of these intangibles will be recognized on a straight-line basis over their useful lives. The useful lives of the trade name, non-compete agreements and customer relationships was 60, 25 and 120 months, respectively.
|
b)
|
Acquisition of American Well Services, LLP
|
Purchase price:
|
$
|
9,752,970
|
|
Allocation to assets acquired:
|
|
||
Net working capital
|
2,932,037
|
|
|
Property and equipment, and other assets
|
6,134,633
|
|
|
Trade name (1)
|
116,900
|
|
|
Non-compete agreements (1)
|
233,400
|
|
|
Customer relationships (1)
|
336,000
|
|
(1)
|
The fair value was determined utilizing an income approach, and the fair value of these intangibles will be recognized on a straight-line basis over their useful lives. The useful lives of the trade name, non-compete agreements and customer relationships was 36, 60 and 48 months, respectively.
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
September 8, 2016 to
December 31, 2016
|
|
|
January 1, 2016 to
September 7, 2016
|
|
Year Ended
December 31, 2015
|
||||||
Revenue
|
$
|
47,841,511
|
|
|
|
$
|
85,410,651
|
|
|
$
|
250,197,684
|
|
Net Loss
|
(5,852,288
|
)
|
|
|
(28,619,678
|
)
|
|
(41,205,704
|
)
|
5)
|
Prepaid expense and other current assets
|
|
Successor
|
|
Predecessor
|
||||
December 31,
2016
|
|
December 31,
2015
|
|||||
Prepaid insurance
|
$
|
1,511,791
|
|
|
$
|
2,548,117
|
|
Prepaid rent
|
58,666
|
|
|
255,197
|
|
||
Prepaid software
|
145,226
|
|
|
196,052
|
|
||
Prepaid other
|
722,787
|
|
|
115,914
|
|
||
Prepaid leases
|
115,914
|
|
|
2,268,608
|
|
||
Deposits
|
17,079
|
|
|
135,904
|
|
||
Total Prepaid expenses and other current assets
|
$
|
2,571,463
|
|
|
$
|
5,519,792
|
|
6)
|
Inventories
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31,
2016
(as restated)
|
|
|
December 31,
2015
|
||||
Parts and consumables
|
$
|
901,041
|
|
|
|
$
|
1,027,107
|
|
Sand
|
1,104,589
|
|
|
|
396,291
|
|
||
Chemical
|
177,902
|
|
|
|
746,085
|
|
||
Proppant
|
103,818
|
|
|
|
98,497
|
|
||
Total Inventory
|
$
|
2,287,350
|
|
|
|
$
|
2,267,980
|
|
7)
|
Property and Equipment
|
|
|
|
Successor
|
|
Predecessor
|
||||
|
Estimated
useful lives
|
|
December 31, 2016 (as restated)
|
|
December 31, 2015
|
||||
Land
|
Indefinite
|
|
$
|
3,292,874
|
|
|
$
|
4,326,931
|
|
Buildings
|
20 years
|
|
2,613,418
|
|
|
10,671,118
|
|
||
Leasehold improvements
|
1 - 18 years
|
|
133,255
|
|
|
273,304
|
|
||
Office furniture and fixtures
|
3 years
|
|
44,977
|
|
|
631,269
|
|
||
Computer equipment
|
3 years
|
|
27,830
|
|
|
362,703
|
|
||
Software
|
3 years
|
|
128,545
|
|
|
690,484
|
|
||
Light vehicles
|
3 years
|
|
3,233,270
|
|
|
4,560,290
|
|
||
Other vehicles
|
5 years
|
|
5,609,550
|
|
|
10,167,760
|
|
||
Operating equipment
|
1.5 - 5 years
|
|
28,738,517
|
|
|
69,579,062
|
|
||
|
|
|
43,822,236
|
|
|
101,262,921
|
|
||
Less: Accumulated depreciation
|
|
|
(2,679,869
|
)
|
|
(34,378,477
|
)
|
||
|
|
|
41,142,367
|
|
|
66,884,444
|
|
||
Assets not yet placed in service and related deposits
|
|
|
15,513,875
|
|
|
1,787,245
|
|
||
Total property and equipment, net
|
|
|
$
|
56,656,242
|
|
|
$
|
68,671,689
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
September 8, 2016
to December 31,
2016
|
|
|
January 1, 2016
to September 7,
2016
|
|
Year Ended
December 31,
2015
|
||||||
Total depreciation
|
$
|
2,679,869
|
|
|
|
$
|
14,911,708
|
|
|
$
|
32,254,467
|
|
Depreciation included in cost of goods sold
|
2,679,869
|
|
|
|
14,819,755
|
|
|
32,075,445
|
|
8)
|
Intangible Assets
|
|
|
|
Successor
|
|
|
|
|
Predecessor
|
||||
|
Estimated
useful lives
|
|
December 31,
2016
|
|
|
Estimated
useful lives
|
|
December 31,
2015
|
||||
Carrying value:
|
|
|
|
|
|
|
|
|
||||
Customer Relationships
|
48-120 months
|
|
$
|
4,050,000
|
|
|
|
120 months
|
|
$
|
2,203,318
|
|
Trade name
|
36-60 months
|
|
2,701,200
|
|
|
|
60 months
|
|
1,042,101
|
|
||
Noncompetition agreement
|
25-60 months
|
|
348,800
|
|
|
|
60 months
|
|
121,358
|
|
||
Developed Technology
|
|
|
—
|
|
|
|
120 months
|
|
616,458
|
|
||
Vendor Relationships
|
|
|
—
|
|
|
|
120 months
|
|
19,621
|
|
||
|
|
|
7,100,000
|
|
|
|
|
|
4,002,856
|
|
||
Accumulated Amortization:
|
|
|
|
|
|
|
|
|
||||
Customer Relationships
|
|
|
(147,662
|
)
|
|
|
|
|
(477,387
|
)
|
||
Trade name
|
|
|
(175,123
|
)
|
|
|
|
|
(451,577
|
)
|
||
Noncompetition agreement
|
|
|
(32,160
|
)
|
|
|
|
|
(52,588
|
)
|
||
Developed Technology
|
|
|
—
|
|
|
|
|
|
(142,940
|
)
|
||
Vendor Relationships
|
|
|
—
|
|
|
|
|
|
(18,313
|
)
|
||
Total Accumulated Amortization
|
|
|
(354,945
|
)
|
|
|
|
|
(1,142,805
|
)
|
||
Total intangible assets, net
|
|
|
$
|
6,745,055
|
|
|
|
|
|
$
|
2,860,051
|
|
Successor
|
|
|
Predecessor
|
||
September 8, 2016 to
December 31, 2016
|
|
|
January 1, 2016 to
September 7, 2016
|
|
Year Ended
December 31, 2015
|
354,945
|
|
|
387,201
|
|
540,781
|
2017
|
$
|
1,154,565
|
|
2018
|
1,141,729
|
|
|
2019
|
1,086,896
|
|
|
2020
|
1,060,207
|
|
|
2021
|
781,009
|
|
|
Thereafter
|
1,520,649
|
|
|
Total
|
$
|
6,745,055
|
|
9)
|
Goodwill
|
10)
|
Commitments (Leases) and Contingencies
|
|
Successor
|
||
|
Operating
Leases
|
||
2017
|
$
|
5,033,392
|
|
2018
|
5,176,274
|
|
|
2019
|
5,283,526
|
|
|
2020
|
3,551,309
|
|
|
2021
|
1,066,493
|
|
|
Thereafter
|
12,317,436
|
|
|
Total minimum lease payments
|
$
|
32,428,430
|
|
11)
|
Defined Contribution Plan
|
12)
|
Members’ Equity and Share Based Compensation
|
|
Class B
|
|
Class C
|
||
Expected dividend yield
|
0.0
|
%
|
|
0.0
|
%
|
Expected volatility
|
70
|
%
|
|
70
|
%
|
Expected term (years)
|
1.5
|
|
|
1.5
|
|
Risk-free rate
|
0.67
|
%
|
|
0.67
|
%
|
Discount for lack of marketability
|
28.1
|
%
|
|
36.2
|
%
|
|
Number of
Class B
Units
|
|
Number of
Class C
Units
|
|
Weighted
average
award
date unit
fair value
Class B
|
|
Weighted
average
award
date unit
fair value
Class C
|
||||||
Units Outstanding September 8, 2016
|
—
|
|
|
—
|
|
|
|
|
|
||||
Units Granted
|
4,178,470
|
|
79,306
|
|
$
|
0.21
|
|
|
$
|
18.80
|
|
||
Units Outstanding December 31, 2016
|
4,178,470
|
|
79,306
|
|
|
|
|
|
Remaining vesting period (years)
|
|
Number of units
|
|
Vested
|
|
Unvested
|
||||
Units at September 8, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Class B Unit grants
|
2.67
|
|
|
4,178,470
|
|
|
—
|
|
|
4,178,470
|
|
Class C Units grants
|
3.67
|
|
|
79,306
|
|
|
—
|
|
|
79,306
|
|
Units at December 31, 2016
|
|
|
4,257,776
|
|
|
—
|
|
|
4,257,776
|
|
|
Series B-1 & B-2
|
|
Series B-3
|
|
Series B-4
|
|
Series B-5 & B-6
|
||||
Expected volatility
|
52.90
|
%
|
|
54.54
|
%
|
|
50.13
|
%
|
|
45.13
|
%
|
Expected term (years)
|
3.9
|
|
|
3.0
|
|
|
3.0
|
|
|
3.0
|
|
Risk-free rate
|
0.55
|
%
|
|
0.49
|
%
|
|
0.79
|
%
|
|
0.92
|
%
|
Lack of marketability
|
35
|
%
|
|
35
|
%
|
|
32
|
%
|
|
57
|
%
|
|
Number of
Series B Units
|
|
Weighted
average award
date unit
fair value
|
||
Series B Units outstanding December 31, 2014
|
5,302,000
|
|
|
||
Series B-5 Unit grants
|
397,500
|
|
$
|
0.55
|
|
Series B-6 Unit grants
|
257,500
|
|
$
|
0.55
|
|
Forfeiture of Series B-3 Units
|
(96,000)
|
|
$
|
0.70
|
|
Forfeiture of Series B-4 Units
|
(78,800)
|
|
$
|
1.60
|
|
Forfeiture of Series B-6 Units
|
(2,500)
|
|
|
||
Series B Units outstanding December 31, 2015
|
5,779,700
|
|
|
||
Forfeiture of Series B-3 Units
|
(12,000)
|
|
|
||
Forfeiture of Series B-4 Units
|
(15,000)
|
|
|
||
Forfeiture of Series B-5 Units
|
(60,000)
|
|
|
||
Forfeiture of Series B-6 Units
|
(46,000)
|
|
|
||
Series B Units outstanding September 7, 2016
|
5,646,700
|
|
|
|
Remaining
vesting period
(years)
|
|
Number of
Series B Units
|
|
Vested
|
|
Unvested
|
||||
Series B-1 Unit grants
|
—
|
|
|
2,920,000
|
|
|
2,920,000
|
|
|
—
|
|
Series B-2 Unit grants
|
—
|
|
|
60,000
|
|
|
60,000
|
|
|
—
|
|
Series B-3 Unit grants
|
1.38
|
|
|
814,000
|
|
|
352,000
|
|
|
462,000
|
|
Series B-4 Unit grants
|
3.13
|
|
|
1,333,200
|
|
|
117,600
|
|
|
1,215,600
|
|
Series B-5 Unit grants
|
3.42
|
|
|
397,500
|
|
|
—
|
|
|
397,500
|
|
Series B-6 Unit grants
|
3.42
|
|
|
255,000
|
|
|
—
|
|
|
255,000
|
|
Series B Units at December 31, 2015
|
—
|
|
|
5,779,700
|
|
|
3,449,600
|
|
|
2,330,100
|
|
Series B-1 Unit grants
|
—
|
|
|
2,920,000
|
|
|
2,920,000
|
|
|
—
|
|
Series B-2 Unit grants
|
—
|
|
|
60,000
|
|
|
60,000
|
|
|
—
|
|
Series B-3 Unit grants
|
0.69
|
|
|
802,000
|
|
|
546,000
|
|
|
256,000
|
|
Series B-4 Unit grants
|
2.44
|
|
|
1,318,200
|
|
|
231,000
|
|
|
1,087,200
|
|
Series B-5 Unit grants
|
2.73
|
|
|
337,500
|
|
|
—
|
|
|
337,500
|
|
Series B-6 Unit grants
|
2.73
|
|
|
209,000
|
|
|
—
|
|
|
209,000
|
|
Series B Units at September 7, 2016
|
—
|
|
|
5,646,700
|
|
|
3,757,000
|
|
|
1,889,700
|
|
13)
|
Successor Period Borrowings
|
14)
|
Predecessor Period Borrowings
|
|
Predecessor
|
||
|
December 31,
2015
|
||
Note Payable
|
$
|
73,053,129
|
|
Real estate mortgages and notes payable
|
2,822,692
|
|
|
Team Well Services, Inc. acquisition notes payable
|
964,193
|
|
|
Notes payable for redemption of restricted units
|
1,040,689
|
|
|
Less: Debt issuance costs
|
(1,287,277
|
)
|
|
Total debt
|
76,593,426
|
|
|
Less: current portion:
|
|
||
Real estate mortgages and notes payable
|
(145,157
|
)
|
|
Team Well Services, Inc. acquisition notes payable
|
(964,193
|
)
|
|
Total long-term debt
|
$
|
75,484,076
|
|
15)
|
Related party disclosures
|
16)
|
Subsequent Events
|
(1)
|
Organization and Description of Business
|
(2)
|
Principles of Consolidation
|
(3)
|
Significant Accounting Policies
|
(a)
|
Basis of Presentation
|
(b)
|
Use of Estimates
|
(c)
|
Cash
|
(d)
|
Accounts Receivable
|
(e)
|
Inventory
|
(f)
|
Property and Equipment
|
(g)
|
Deferred Loan Costs
|
(h)
|
Business Combinations
|
(i)
|
Goodwill
|
(j)
|
Share‑Based Compensation
|
(k)
|
Concentration of Credit Risk
|
(l)
|
Off‑Balance‑Sheet Arrangements
|
(m)
|
Contingencies
|
(n)
|
Fair Value of Financial Instruments
|
(o)
|
Income Taxes
|
(p)
|
Revenue Recognition
|
(q)
|
Impairment of Long‑Lived Assets
|
(r)
|
Recent Accounting Pronouncements
|
(4)
|
Related Parties
|
(5)
|
Prepaid Expenses and Other Current Assets
|
|
|
January 31
2015
|
||
Prepaid insurance
|
|
$
|
2,387,872
|
|
Prepaid inventory
|
|
697,273
|
|
|
Prepaid software maintenance agreements
|
|
129,816
|
|
|
Prepaid other
|
|
318,750
|
|
|
Deposits
|
|
121,550
|
|
|
Total prepaid expenses and other current assets
|
|
$
|
3,655,261
|
|
(6)
|
Inventory
|
|
|
January 31
2015
|
||
Sand
|
|
$
|
2,128,328
|
|
Intermediate proppant
|
|
2,473,109
|
|
|
Lightweight proppant
|
|
473,699
|
|
|
Methanol
|
|
15,293
|
|
|
Other
|
|
128,293
|
|
|
Total Inventory
|
|
$
|
5,218,722
|
|
(7)
|
Property and Equipment
|
|
Estimated
useful lives
|
|
January 31
2015
|
|
Land
|
Indefinite
|
$
|
5,375,487
|
|
Buildings
|
10-20 years
|
|
12,016,009
|
|
Leasehold improvements
|
20 years
|
|
156,936
|
|
Office furniture and fixtures
|
3 years
|
|
561,573
|
|
Computer equipment
|
3 years
|
|
960,818
|
|
Software
|
3 years
|
|
1,839,954
|
|
Light vehicles
|
3 years
|
|
4,334,655
|
|
Other vehicles
|
3-5 years
|
|
14,449,791
|
|
Operating equipment
|
1.5-15 years
|
|
91,487,891
|
|
|
|
|
131,183,114
|
|
Less accumulated depreciation
|
|
|
(32,361,307
|
)
|
|
|
|
98,821,807
|
|
Assets not yet placed in service
|
|
|
9,207,583
|
|
Deposits on equipment
|
|
|
1,764,457
|
|
Total property and equipment, net
|
|
$
|
109,793,847
|
|
(8)
|
Intangible Assets and Goodwill
|
|
Estimated
useful lives
|
January 31
2015
|
||
Goodwill
|
Indefinite
|
$
|
1,671,558
|
|
Trade name
|
5 years
|
1,042,101
|
|
|
Developed technology
|
10 years
|
708,022
|
|
|
Non-Competition agreement
|
5 years
|
121,358
|
|
|
Customer relationships
|
10 years
|
2,203,318
|
|
|
Vendor relationships
|
10 years
|
156,968
|
|
|
|
|
4,231,767
|
|
|
Less accumulated amortization
|
|
(648,242
|
)
|
|
Total intangible assets, net
|
|
$
|
3,583,525
|
|
2016
|
$
|
539,523
|
|
2017
|
539,523
|
|
|
2018
|
539,523
|
|
|
2019
|
481,350
|
|
|
2020
|
306,831
|
|
|
Thereafter
|
1,176,775
|
|
|
Total
|
$
|
3,583,525
|
|
(9)
|
Commitments (Leases)
|
|
Operating
Leases
|
||
Fiscal year ending January 31:
|
|
||
2016
|
$
|
2,660,640
|
|
2017
|
2,533,707
|
|
|
2018
|
2,111,943
|
|
|
2019
|
1,798,098
|
|
|
2020
|
1,463,962
|
|
|
Thereafter
|
14,347,535
|
|
|
Total minimum lease payments
|
$
|
24,915,885
|
|
(10)
|
Defined‑Contribution Plan
|
(11)
|
Share‑Based Compensation
|
|
Number of
Series B units
|
Weighted average award date unit
fair value
|
||
Series B Units outstanding January 31, 2014
|
4,070,000
|
|
||
Redemption of B-1 Units
|
(180,000)
|
|
||
Series B-4 Unit grants
|
1,412,000
|
|
$1.60
|
|
Series B Units outstanding January 31,2015
|
5,302,000
|
|
|
Remaining vesting period (years)
|
|
Number of Series B units
|
|
Vested
|
|
Unvested
|
|||
Series B Units at January 31, 2014
|
|
|
4,070,000
|
|
2,581,667
|
|
|
1,488,333
|
|
|
Series B-1 Unit grants
|
—
|
|
|
2,920,000
|
|
2,920,000
|
|
|
—
|
|
Series B-2 Unit grants
|
0.58
|
|
|
60,000
|
|
30,000
|
|
|
30,000
|
|
Series B-3 Unit grants
|
2.28
|
|
|
910,000
|
|
188,000
|
|
|
722,000
|
|
Series B-4 Unit grants
|
4.04
|
|
|
1,412,000
|
|
—
|
|
|
1,412,000
|
|
Series B Units at January 31, 2015
|
|
|
5,302,000
|
|
3,138,000
|
|
|
2,164,000
|
|
(12)
|
Credit Facility and Notes Payable
|
|
|
January 31, 2015
|
|
CitiBank Credit facility
|
$
|
104,887,279
|
|
Wells Fargo Credit Facility
|
|
—
|
|
Real estate mortgages and notes payable
|
|
—
|
|
Team Well Services, Inc. acquisition notes payable
|
|
924,406
|
|
Notes payable for redemption of restricted units
|
|
1,040,688
|
|
Total debt
|
|
106,852,373
|
|
Less current portion:
|
|
|
|
Wells Fargo Credit Facility
|
|
—
|
|
Real estate mortgages and notes payable
|
|
—
|
|
Total long-term debt
|
$
|
106,852,373
|
|
(13)
|
Acquisitions
|
(14)
|
Subsequent Events
|
Contents
|
Page
|
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
|
Unaudited Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016
|
3
|
Unaudited Condensed Statements of Operations for the Six Months Ended June 30, 2017 and 2016
|
4
|
Unaudited Condensed Statements of Members’ Equity for the Six Months Ended June 30, 2017
|
5
|
Unaudited Condensed Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016
|
6
|
Notes to Unaudited Condensed Consolidated Financial Statements
|
8
|
|
June 30, 2017
|
|
December 31,
2016 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
20,378,806
|
|
|
$
|
11,254,578
|
|
Accounts receivable, trade
|
57,116,465
|
|
|
25,522,904
|
|
||
Inventory
|
2,895,031
|
|
|
2,287,350
|
|
||
Prepaid expenses and other current assets
|
13,630,246
|
|
|
2,571,463
|
|
||
Total current assets
|
94,020,548
|
|
|
41,636,295
|
|
||
Property and equipment, net
|
81,413,194
|
|
|
56,656,242
|
|
||
Intangible assets, net
|
6,135,723
|
|
|
6,745,055
|
|
||
Other long-term assets
|
613,212
|
|
|
5,834,534
|
|
||
Total assets
|
$
|
182,182,677
|
|
|
$
|
110,872,126
|
|
Liabilities and Members’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
38,999,400
|
|
|
$
|
15,003,503
|
|
Deferred Revenue
|
23,052,557
|
|
|
1,661,629
|
|
||
Accrued payroll and related costs
|
2,870,597
|
|
|
2,872,190
|
|
||
Accrued expenses
|
19,290,035
|
|
|
8,373,232
|
|
||
Total current liabilities
|
84,212,589
|
|
|
27,910,554
|
|
||
Long-term liabilities:
|
|
|
|
||||
Other long-term liabilities
|
827,066
|
|
|
404,009
|
|
||
Total liabilities
|
85,039,655
|
|
|
28,314,563
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
Members’ equity :
|
|
|
|
||||
Class A Units, no limit authorized, 105,459,067 and 88,204,381 issued and outstanding units, respectively
|
105,459,067
|
|
|
88,204,381
|
|
||
Additional paid-in capital
|
554,358
|
|
|
221,743
|
|
||
Accumulated deficit
|
(8,870,403)
|
|
|
(5,868,561)
|
|
||
Total members’ equity
|
97,143,022
|
|
|
82,557,563
|
|
||
Total liabilities and members’ equity
|
$
|
182,182,677
|
|
|
$
|
110,872,126
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
Successor
|
|
Predecessor
|
|
Successor
|
|
Predecessor
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue
|
$
|
110,245,066
|
|
|
$
|
27,813,658
|
|
|
$
|
188,069,939
|
|
|
$
|
51,162,012
|
|
Cost of sales
|
92,079,242
|
|
|
28,437,351
|
|
|
162,124,964
|
|
|
57,267,199
|
|
||||
Gross profit (loss)
|
18,165,824
|
|
|
(623,693)
|
|
|
25,944,975
|
|
|
(6,105,187)
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
19,245,437
|
|
|
6,633,889
|
|
|
28,114,417
|
|
|
11,474,993
|
|
||||
Gain on Disposal of Assets
|
—
|
|
|
(1,595)
|
|
|
(80,258)
|
|
|
(126,643)
|
|
||||
Depreciation and amortization
|
335,528
|
|
|
165,519
|
|
|
627,904
|
|
|
325,739
|
|
||||
Total operating expenses
|
19,580,965
|
|
|
6,797,813
|
|
|
28,662,063
|
|
|
11,674,089
|
|
||||
Operating loss
|
(1,415,141)
|
|
|
(7,421,506)
|
|
|
(2,717,088)
|
|
|
(17,779,276)
|
|
||||
Other income and expense:
|
|
|
|
|
|
|
|
||||||||
Other income
|
5,098
|
|
|
3,263
|
|
|
9,012
|
|
|
8,127
|
|
||||
Interest expense
|
(300,345)
|
|
|
(1,139,473)
|
|
|
(293,766)
|
|
|
(2,291,596)
|
|
||||
Net loss
|
$
|
(1,710,388
|
)
|
|
$
|
(8,557,716
|
)
|
|
$
|
(3,001,842
|
)
|
|
$
|
(20,062,745
|
)
|
|
Class A Units
|
|
Successor Class A Units
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Total
|
|||||||||
Members’ equity at January 1, 2017
|
88,204,381
|
|
|
$
|
88,204,381
|
|
|
$
|
221,743
|
|
|
$
|
(5,868,561
|
)
|
|
$
|
82,557,563
|
|
Members’ contributions
|
17,254,686
|
|
|
17,254,686
|
|
|
—
|
|
|
—
|
|
|
17,254,686
|
|
||||
Share-based compensation
|
—
|
|
|
—
|
|
|
332,615
|
|
|
—
|
|
|
332,615
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,001,842)
|
|
|
(3,001,842)
|
|
||||
Members’ equity at June 30, 2017
|
105,459,067
|
|
|
$
|
105,459,067
|
|
|
$
|
554,358
|
|
|
$
|
(8,870,403
|
)
|
|
$
|
97,143,022
|
|
|
Six Months Ended
June 30, |
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(3,001,842
|
)
|
|
$
|
(20,062,745
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities
|
|
|
|
||||
Depreciation and amortization
|
9,532,348
|
|
|
11,518,431
|
|
||
Gain on disposal of assets
|
(80,258
|
)
|
|
(126,643
|
)
|
||
Amortization of deferred financing costs
|
16,345
|
|
|
187,862
|
|
||
Stock-based compensation
|
332,615
|
|
|
331,220
|
|
||
TWS Loan Accretion / Earn-out Accretion
|
—
|
|
|
29,633
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Decrease (increase) in accounts receivable
|
(31,593,562
|
)
|
|
(3,973,607
|
)
|
||
Decrease (increase) in inventories
|
(607,681
|
)
|
|
877,402
|
|
||
Decrease (increase) in prepaid expenses, deposits and other assets
|
(5,694,043
|
)
|
|
(121,428
|
)
|
||
Increase (decrease) in accounts payable
|
23,554,342
|
|
|
(4,872,667
|
)
|
||
Increase (decrease) in payroll and related costs
|
(1,593
|
)
|
|
(336,130
|
)
|
||
Increase (decrease) in accrued liabilities and other current liabilities
|
9,691,273
|
|
|
(5,654,678
|
)
|
||
Increase (decrease) in deferred revenue
|
21,390,928
|
|
|
(484,287
|
)
|
||
Increase (decrease) in other long-term liabilities
|
423,056
|
|
|
—
|
|
||
Net cash provided by (used in) operating activities
|
23,961,928
|
|
|
(22,687,637
|
)
|
||
Cash flows from investing activities
|
|
|
|
||||
Capital expenditures
|
(32,197,768
|
)
|
|
(270,949
|
)
|
||
Proceeds from disposal of property, plant and equipment
|
106,260
|
|
|
191,000
|
|
||
Acquisitions of assets
|
(1,066,644
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(33,158,152
|
)
|
|
(79,949
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from revolving credit facility
|
3,000,000
|
|
|
43,688,085
|
|
||
Repayment of revolving credit facility
|
(3,000,000
|
)
|
|
(4,920,214
|
)
|
||
Repayment of term loan Property
|
—
|
|
|
(72,121
|
)
|
||
Debt issuance costs
|
(159,764
|
)
|
|
—
|
|
||
Proceeds from insurance financing
|
2,085,203
|
|
|
—
|
|
||
Repayment of insurance financing
|
(859,673
|
)
|
|
(1,594,168
|
)
|
||
Proceeds from members’ contributions
|
17,254,686
|
|
|
—
|
|
||
Net cash provided by financing activities
|
18,320,452
|
|
|
37,101,582
|
|
||
Net increase in cash
|
9,124,228
|
|
|
14,333,996
|
|
||
Cash and cash equivalents, beginning of period
|
11,254,578
|
|
|
1,000
|
|
||
Cash and cash equivalents, end of period
|
$
|
20,378,806
|
|
|
$
|
14,334,996
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest payments
|
$
|
13,396
|
|
|
$
|
1,650,264
|
|
Supplemental disclosure of non-cash information:
|
|
|
|
||||
Change in accrual of property, plant and equipment
|
$
|
441,556
|
|
|
$
|
(82,422
|
)
|
1)
|
Basis of Presentation
|
2)
|
Summary of Significant Accounting Policies
|
2)
|
Summary of Significant Accounting Policies – Continued
|
2)
|
Summary of Significant Accounting Policies – Continued
|
•
|
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
|
•
|
Level 2 inputs are 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 inputs for the asset or liability.
|
2)
|
Summary of Significant Accounting Policies – Continued
|
3)
|
Recent Accounting Pronouncements
|
3)
|
Recent Accounting Pronouncements - Continued
|
4)
|
Asset Acquisition
|
5)
|
Inventories
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Parts and consumables
|
$
|
1,826,668
|
|
|
$
|
901,041
|
|
Sand
|
—
|
|
1,104,589
|
|
|||
Chemical
|
458,174
|
|
|
177,902
|
|
||
Proppant
|
610,189
|
|
|
103,818
|
|
||
Total inventory
|
$
|
2,895,031
|
|
|
$
|
2,287,350
|
|
6)
|
Prepaid expenses and other current assets
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Prepaid insurance
|
$
|
708,899
|
|
|
$
|
1,511,791
|
|
Prepaid other
|
12,384,152
|
|
|
722,787
|
|
||
Prepaid leases
|
115,914
|
|
|
115,914
|
|
||
Prepaid software
|
175,496
|
|
|
145,226
|
|
||
Prepaid rent
|
228,731
|
|
|
58,666
|
|
||
Deposits
|
17,054
|
|
|
17,079
|
|
||
Total prepaid expenses and other current assets
|
$
|
13,630,246
|
|
|
$
|
2,571,463
|
|
7)
|
Property and Equipment
|
|
Estimated useful lives
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Land
|
Indefinite
|
|
$
|
3,292,874
|
|
|
$
|
3,292,874
|
|
Buildings
|
20 years
|
|
2,815,028
|
|
|
2,613,418
|
|
||
Leasehold improvements
|
1-18 years
|
|
430,567
|
|
|
133,255
|
|
||
Office furniture and fixtures
|
3 years
|
|
45,359
|
|
|
44,977
|
|
||
Computer equipment
|
3 years
|
|
52,370
|
|
|
27,830
|
|
||
Software
|
3 years
|
|
330,352
|
|
|
128,545
|
|
||
Light vehicles
|
3 years
|
|
3,998,546
|
|
|
3,233,270
|
|
||
Other vehicles
|
5 years
|
|
4,530,548
|
|
|
5,609,550
|
|
||
Operating Equipment
|
1.5-5 years
|
|
75,084,198
|
|
|
28,738,517
|
|
||
|
|
|
90,579,842
|
|
|
43,822,236
|
|
||
Less: Accumulated depreciation
|
|
|
(11,601,021)
|
|
|
(2,679,869)
|
|
||
|
|
|
78,978,821
|
|
|
41,142,367
|
|
||
Asset not yet placed in service and related deposits
|
|
|
2,434,373
|
|
|
15,513,875
|
|
||
Total property plant and equipment, net
|
|
|
$
|
81,413,194
|
|
|
$
|
56,656,242
|
|
|
Successor
|
Predecessor
|
|
June 30, 2017
|
June 30, 2016
|
Total Depreciation
|
8,923,016
|
11,259,570
|
Depreciation included in cost of goods sold
|
8,904,443
|
11,192,691
|
8)
|
Intangible Assets
|
|
Estimated useful lives
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Carrying Value:
|
|
|
|
|
|
||||
Customer Relationships
|
48-120 months
|
|
$
|
4,050,000
|
|
|
$
|
4,050,000
|
|
Trade name
|
36-60 months
|
|
2,701,200
|
|
|
2,701,200
|
|
||
Noncompetition agreement
|
25-60 months
|
|
348,800
|
|
|
348,800
|
|
||
|
|
|
7,100,000
|
|
|
7,100,000
|
|
||
Accumulated Amortization:
|
|
|
|
|
|
||||
Customer Relationships
|
|
|
(402,272)
|
|
|
(147,662)
|
|
||
Trade Name
|
|
|
(466,951)
|
|
|
(175,123)
|
|
||
Noncompetition agreement
|
|
|
(95,054)
|
|
|
(32,160)
|
|
||
Total Accumulated Amortization
|
|
|
(964,277)
|
|
|
(354,945)
|
|
||
Total intangible assets, net
|
|
|
$
|
6,135,723
|
|
|
$
|
6,745,055
|
|
2017
|
$
|
545,233
|
2018
|
|
1,141,729
|
2019
|
|
1,086,896
|
2020
|
|
1,060,207
|
2021
|
|
781,009
|
Thereafter
|
|
1,520,649
|
Total
|
$
|
6,135,723
|
9)
|
Notes Payable
|
10)
|
Commitments and Contingencies
|
|
|
Operating Leases
|
2017
|
$
|
2,810,110
|
2018
|
|
6,105,531
|
2019
|
|
6,179,441
|
2020
|
|
4,406,797
|
2021
|
|
1,587,249
|
Thereafter
|
|
12,600,341
|
Total Minimum Lease Payments
|
$
|
33,689,469
|
10)
|
Commitments and Contingencies - Continued
|
11)
|
Subsequent Events
|
|
Historical
|
|
Pro Forma
|
||||||||||||
|
Keane
|
|
RockPile
|
|
Adjustments for RockPile Transactions
|
|
Combined
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Current Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
75,552
|
|
|
$
|
20,379
|
|
|
$
|
7,758
|
|
a
|
$
|
103,689
|
|
Trade and other accounts receivable
|
142,677
|
|
|
57,117
|
|
|
—
|
|
|
199,794
|
|
||||
Inventories, net
|
30,501
|
|
|
2,895
|
|
|
(42
|
)
|
b
|
33,354
|
|
||||
Prepaid and other current assets
|
10,799
|
|
|
13,630
|
|
|
—
|
|
|
24,429
|
|
||||
Total current assets
|
259,529
|
|
|
94,021
|
|
|
7,716
|
|
|
361,266
|
|
||||
Property and equipment, net
|
285,569
|
|
|
81,413
|
|
|
76,241
|
|
c
|
443,223
|
|
||||
Goodwill
|
50,624
|
|
|
—
|
|
|
77,372
|
|
d
|
127,996
|
|
||||
Intangible assets
|
41,322
|
|
|
6,136
|
|
|
14,831
|
|
e
|
62,289
|
|
||||
Notes receivable
|
—
|
|
|
—
|
|
|
250
|
|
f
|
250
|
|
||||
Other noncurrent assets
|
5,573
|
|
|
613
|
|
|
(250
|
)
|
f
|
5,936
|
|
||||
Total Assets
|
$
|
642,617
|
|
|
$
|
182,183
|
|
|
$
|
176,160
|
|
|
$
|
1,000,960
|
|
Liabilities and Owners' Equity
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
83,321
|
|
|
$
|
38,999
|
|
|
$
|
—
|
|
|
$
|
122,320
|
|
Accrued expenses
|
65,564
|
|
|
22,161
|
|
|
—
|
|
|
87,725
|
|
||||
Current maturities of capital lease obligations
|
2,642
|
|
|
—
|
|
|
—
|
|
|
2,642
|
|
||||
Current maturities of long-term debt
|
342
|
|
|
—
|
|
|
581
|
|
h
|
923
|
|
||||
Stock based compensation - current
|
4,281
|
|
|
—
|
|
|
—
|
|
|
4,281
|
|
||||
Deferred revenue
|
—
|
|
|
23,053
|
|
|
—
|
|
|
23,053
|
|
||||
Contingent liabilities
|
—
|
|
|
—
|
|
|
11,962
|
|
g
|
11,962
|
|
||||
Other current liabilities
|
1,750
|
|
|
—
|
|
|
—
|
|
|
1,750
|
|
||||
Total current liabilities
|
157,900
|
|
|
84,213
|
|
|
12,543
|
|
|
254,656
|
|
||||
Capital lease obligations, less current maturities
|
4,210
|
|
|
—
|
|
|
—
|
|
|
4,210
|
|
||||
Long-term debt, net of unamortized deferred financing costs and unamortized debt discount, less current maturities
|
144,535
|
|
|
—
|
|
|
130,470
|
|
h
|
275,005
|
|
||||
Stock-based compensation - non-current
|
4,281
|
|
|
—
|
|
|
—
|
|
|
4,281
|
|
||||
Other noncurrent liabilities
|
4,242
|
|
|
827
|
|
|
—
|
|
|
5,069
|
|
||||
Total noncurrent liabilities
|
157,268
|
|
|
827
|
|
|
130,470
|
|
|
288,565
|
|
||||
Total Liabilities
|
315,168
|
|
|
85,040
|
|
|
143,013
|
|
|
543,221
|
|
||||
Owners' equity (deficit):
|
|
|
|
|
|
|
|
||||||||
Members’ equity
|
—
|
|
|
106,013
|
|
|
(106,013
|
)
|
i
|
—
|
|
||||
Common stock, par value $0.01 per share (authorized 500,000 shares, Actual - issued 103,147, Pro Forma - issued 111,831 shares)
|
1,031
|
|
|
—
|
|
|
87
|
|
i
|
1,118
|
|
||||
Paid-in capital excess of par value
|
404,361
|
|
|
—
|
|
|
130,203
|
|
i
|
534,564
|
|
||||
Retained deficit
|
(75,384
|
)
|
|
(8,870
|
)
|
|
8,870
|
|
i
|
(75,384
|
)
|
||||
Accumulated other comprehensive (loss)
|
(2,559
|
)
|
|
—
|
|
|
—
|
|
|
(2,559
|
)
|
||||
Total owners’ equity
|
327,449
|
|
|
97,143
|
|
|
33,147
|
|
|
457,739
|
|
||||
Total liabilities and owners’ equity
|
$
|
642,617
|
|
|
$
|
182,183
|
|
|
$
|
176,160
|
|
|
$
|
1,000,960
|
|
|
Historical
|
|
Pro Forma
|
||||||||||||
|
Keane
|
|
Rockpile
|
|
Adjustments for RockPile Transactions
|
|
Combined
|
||||||||
Revenue
|
$
|
563,289
|
|
|
$
|
188,070
|
|
|
$
|
(72
|
)
|
k
|
$
|
751,287
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of services (excluding depreciation and amortization, shown separately)
|
502,376
|
|
|
162,125
|
|
|
(11,492
|
)
|
l
|
653,009
|
|
||||
Depreciation and amortization
|
63,112
|
|
|
628
|
|
|
23,052
|
|
m
|
86,792
|
|
||||
Selling, general and administrative expenses
|
39,884
|
|
|
28,034
|
|
|
(1,220
|
)
|
n
|
66,698
|
|
||||
Total operating costs and expenses
|
605,372
|
|
|
190,787
|
|
|
10,340
|
|
|
806,499
|
|
||||
Operating income (loss)
|
(42,083
|
)
|
|
(2,717
|
)
|
|
(10,412
|
)
|
|
(55,212
|
)
|
||||
Other expense:
|
|
|
|
|
|
|
|
||||||||
Other income, net
|
3,705
|
|
|
9
|
|
|
—
|
|
|
3,714
|
|
||||
Interest expense
|
(44,710
|
)
|
|
(294
|
)
|
|
(5,956
|
)
|
o
|
(50,960
|
)
|
||||
Total other expenses
|
(41,005
|
)
|
|
(285
|
)
|
|
(5,956
|
)
|
|
(47,246
|
)
|
||||
Loss before income taxes
|
(83,088
|
)
|
|
(3,002
|
)
|
|
(16,368
|
)
|
|
(102,458
|
)
|
||||
Deferred income tax expense
|
(1,065
|
)
|
|
—
|
|
|
275
|
|
p
|
(790
|
)
|
||||
Net loss
|
$
|
(84,153
|
)
|
|
$
|
(3,002
|
)
|
|
$
|
(16,093
|
)
|
|
$
|
(103,248
|
)
|
Net loss attributable to Predecessor
|
(8,769
|
)
|
|
|
|
|
|
|
|||||||
Net loss attributable to Keane Group, Inc.
|
(75,384
|
)
|
|
|
|
|
|
|
|||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
44
|
|
|
—
|
|
|
—
|
|
|
44
|
|
||||
Hedging activities
|
184
|
|
|
—
|
|
|
—
|
|
|
184
|
|
||||
Total comprehensive loss
|
$
|
(83,925
|
)
|
|
$
|
(3,002
|
)
|
|
$
|
(16,093
|
)
|
|
$
|
(103,020
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share
|
$
|
(0.83
|
)
|
|
|
|
|
|
|
|
$
|
(0.94
|
)
|
||
Weighted-average shares outstanding: basic and diluted
|
100,932
|
|
|
|
|
|
8,684
|
|
q
|
109,616
|
|
|
Historical
|
|
Pro Forma
|
||||||||||||
|
Keane
|
|
Rockpile Predecessor
|
|
Adjustments for RockPile Transactions
|
|
Combined
|
||||||||
Revenue
|
$
|
152,784
|
|
|
$
|
51,162
|
|
|
$
|
(45
|
)
|
k
|
$
|
203,901
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of services (excluding depreciation and amortization, shown separately)
|
152,884
|
|
|
57,267
|
|
|
(12,469
|
)
|
l
|
197,682
|
|
||||
Depreciation and amortization
|
43,829
|
|
|
326
|
|
|
22,534
|
|
m
|
66,689
|
|
||||
Selling, general and administrative expenses
|
35,516
|
|
|
11,348
|
|
|
1,125
|
|
n
|
47,989
|
|
||||
Total operating costs and expenses
|
232,229
|
|
|
68,941
|
|
|
11,190
|
|
|
312,360
|
|
||||
Operating income (loss)
|
(79,445
|
)
|
|
(17,779
|
)
|
|
(11,235
|
)
|
|
(108,459
|
)
|
||||
Other expense:
|
|
|
|
|
|
|
|
||||||||
Other income, net
|
1,006
|
|
|
8
|
|
|
—
|
|
|
1,014
|
|
||||
Interest expense
|
(18,445
|
)
|
|
(2,292
|
)
|
|
(6,016
|
)
|
o
|
(26,753
|
)
|
||||
Total other expenses
|
(17,439
|
)
|
|
(2,284
|
)
|
|
(6,016
|
)
|
|
(25,739
|
)
|
||||
Loss before income taxes
|
(96,884
|
)
|
|
(20,063
|
)
|
|
(17,251
|
)
|
p
|
(134,198
|
)
|
||||
Deferred income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net loss
|
$
|
(96,884
|
)
|
|
$
|
(20,063
|
)
|
|
$
|
(17,251
|
)
|
|
$
|
(134,198
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
65
|
|
|
—
|
|
|
—
|
|
|
65
|
|
||||
Hedging activities
|
1,234
|
|
|
—
|
|
|
—
|
|
|
1,234
|
|
||||
Total comprehensive loss
|
$
|
(95,585
|
)
|
|
$
|
(20,063
|
)
|
|
$
|
(17,251
|
)
|
|
$
|
(132,899
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share
|
$
|
(1.11
|
)
|
|
|
|
|
|
$
|
(1.40
|
)
|
||||
Weighted-average shares outstanding: basic and diluted
|
87,313
|
|
|
|
|
8,684
|
|
q
|
95,997
|
|
|
Historical
|
|
Pro Forma
|
||||||||||||||||
|
Keane
|
|
RockPile Predecessor
(January 1 - September 7, 2016)
|
|
RockPile Successor
(September 8 - December 31, 2016)
|
|
Adjustments for RockPile Transactions
|
|
Combined
|
||||||||||
Revenue
|
$
|
420,570
|
|
|
$
|
75,695
|
|
|
$
|
47,842
|
|
|
$
|
(141
|
)
|
k
|
$
|
543,966
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (excluding depreciation and amortization, shown separately)
|
416,342
|
|
|
83,618
|
|
|
45,811
|
|
|
(21,262
|
)
|
l
|
524,509
|
|
|||||
Depreciation and amortization
|
100,979
|
|
|
479
|
|
|
355
|
|
|
44,885
|
|
m
|
146,698
|
|
|||||
Selling, general and administrative expenses
|
52,768
|
|
|
21,269
|
|
|
7,533
|
|
|
2,274
|
|
n
|
83,844
|
|
|||||
Impairment
|
185
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
185
|
|
|||||
Total operating costs and expenses
|
570,274
|
|
|
105,366
|
|
|
53,699
|
|
|
25,897
|
|
|
755,236
|
|
|||||
Operating loss
|
(149,704
|
)
|
|
(29,671
|
)
|
|
(5,857
|
)
|
|
(26,038
|
)
|
|
(211,270
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense), net
|
916
|
|
|
60,933
|
|
|
5
|
|
|
—
|
|
|
61,854
|
|
|||||
Interest expense
|
(38,299
|
)
|
|
(3,651
|
)
|
|
(16
|
)
|
|
(12,001
|
)
|
o
|
(53,967
|
)
|
|||||
Total other expenses
|
(37,383
|
)
|
|
57,282
|
|
|
(11
|
)
|
|
(12,001
|
)
|
|
7,887
|
|
|||||
Loss before income taxes
|
(187,087
|
)
|
|
27,611
|
|
|
(5,868
|
)
|
|
(38,039
|
)
|
p
|
(203,383
|
)
|
|||||
Deferred income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss
|
$
|
(187,087
|
)
|
|
$
|
27,611
|
|
|
$
|
(5,868
|
)
|
|
$
|
(38,039
|
)
|
|
$
|
(203,383
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Hedging activities
|
1,857
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,857
|
|
|||||
Total comprehensive (loss)
|
$
|
(185,208
|
)
|
|
$
|
27,611
|
|
|
$
|
(5,868
|
)
|
|
$
|
(38,039
|
)
|
|
$
|
(201,504
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted net loss per share
|
$
|
(2.14
|
)
|
|
|
|
|
|
|
|
$
|
(2.12
|
)
|
||||||
Weighted-average shares outstanding: basic and diluted
|
87,428
|
|
|
|
|
|
|
8,684
|
|
q
|
96,112
|
|
Closing cash purchase price
|
$
|
115,193,900
|
|
Seller transaction expenses paid by buyer
|
5,199,267
|
|
|
Purchase price escrow amount
|
1,400,000
|
|
|
Indemnification escrow
|
1,500,000
|
|
|
Total U.S. GAAP cash consideration
|
$
|
123,293,167
|
|
Cash consideration
|
$
|
123,293
|
|
Equity consideration
|
130,290
|
|
|
Contingent consideration
|
11,962
|
|
|
Less: Cash acquired
|
(20,379
|
)
|
|
Total purchase consideration, less cash acquired
|
$
|
245,166
|
|
|
|
||
Fair value of consideration transferred allocated to:
|
|
||
Trade and other accounts receivable
|
$
|
57,117
|
|
Inventories, net
|
2,853
|
|
|
Prepaid and other current assets
|
13,630
|
|
|
Property and equipment, net
|
157,654
|
|
|
Intangible assets
|
20,967
|
|
|
Notes receivable
|
250
|
|
|
Other noncurrent assets
|
363
|
|
|
Assets acquired
|
252,834
|
|
|
Accounts payable
|
38,999
|
|
|
Accrued expenses
|
22,161
|
|
|
Deferred revenue
|
23,053
|
|
|
Other noncurrent liabilities
|
827
|
|
|
Liabilities assumed
|
85,040
|
|
|
Goodwill
|
77,372
|
|
|
Total purchase price consideration
|
$
|
245,166
|
|
•
|
adjustments associated with the effects of adjusting the historical net book values of the assets acquired and liabilities assumed to their estimated fair values and related impact on the statements of operations and comprehensive income (loss), such as revised depreciation expense on the estimated fair value of the acquired property and equipment;
|
•
|
adjustments associated with the amortization of acquired intangible assets;
|
•
|
consideration of non-recurring items directly attributable to our acquisition of RockPile such as transaction costs;
|
•
|
adjustments to the historical financial statements of RockPile to present its financial statements in conformity with Keane's accounting policies.
|
•
|
the impact of the purchase price of the RockPile Acquisition, including payment of cash and issuance of common stock as part of the consideration transferred to effect the RockPile Acquisition; and
|
•
|
the Additional Financing under the Company’s incremental term loan used to finance the RockPile Acquisition and the associated impact to interest expense.
|
a.
|
Cash
|
|
June 30, 2017
|
||
Net proceeds from the Additional Financing
|
131,051
|
|
|
Less: Cash consideration paid for RockPile Acquisition
|
(123,293
|
)
|
|
Net pro forma adjustment to cash
|
$
|
7,758
|
|
b.
|
Inventories, net
|
c.
|
Property and equipment, net
|
d.
|
Goodwill
|
e.
|
Intangible assets
|
f.
|
Notes receivable
|
g.
|
Contingent consideration
|
h.
|
Long-term debt
|
|
June 30, 2017
|
||
The Additional Financing
|
$
|
135,000
|
|
Less: Original issue discount and deferred financing costs
|
(3,949
|
)
|
|
Net proceeds from the Additional Financing
|
$
|
131,051
|
|
i.
|
Equity
|
j.
|
Retained earnings
|
k.
|
Revenue
|
l.
|
Cost of services
|
|
|
|
|
|
RockPile
|
|||||||||||||
|
Six months ended June 30, 2017
|
|
Six months ended June 30, 2016
|
|
Predecessor
(January 1 - September 7, 2016)
|
Successor
(September 8 - December 31, 2016)
|
|
Combined year ended December 31, 2016
|
||||||||||
Eliminate Rockpile's historical depreciation expense from cost of services
|
$
|
(8,904
|
)
|
|
$
|
(11,193
|
)
|
|
$
|
(14,820
|
)
|
$
|
(2,680
|
)
|
|
$
|
(17,500
|
)
|
Eliminate expenses related to the purchase of power ends and transmissions
|
(1,867
|
)
|
|
(562
|
)
|
|
(1,113
|
)
|
(1,103
|
)
|
|
(2,216
|
)
|
|||||
Reclassify RockPile's historical expenses between cost of services and selling, general and administrative expenses
|
(721
|
)
|
|
(714
|
)
|
|
(1,019
|
)
|
(527
|
)
|
|
(1,546
|
)
|
|||||
Pro forma adjustment to cost of sales
|
$
|
(11,492
|
)
|
|
$
|
(12,469
|
)
|
|
$
|
(16,952
|
)
|
$
|
(4,310
|
)
|
|
$
|
(21,262
|
)
|
•
|
reclassification of historical insurance and property tax expenses of $0.8 million, $1.0 million, and $1.6 million for six months ended June 30, 2017 and 2016, and year ended December 31, 2016, respectively, from cost of services to selling, general and administrative expenses; and
|
•
|
remaining balance comprises of reclassification of historical HSE professional fees from selling, general and administrative expenses to cost of services.
|
m.
|
Depreciation and amortization
|
|
|
|
|
|
RockPile
|
|||||||||||||
|
Six months ended June 30, 2017
|
|
Six months ended June 30, 2016
|
|
Predecessor
(January 1 - September 7, 2016) |
Successor
(September 8 - December 31, 2016) |
|
Combined year ended December 31, 2016
|
||||||||||
Eliminate Rockpile's historical depreciation and amortization expense
|
$
|
(628
|
)
|
|
$
|
(326
|
)
|
|
$
|
(479
|
)
|
$
|
(356
|
)
|
|
$
|
(835
|
)
|
Adjust depreciation and amortization expense for acquired assets and reclassifications (see footnote above)
|
23,680
|
|
|
22,860
|
|
|
31,369
|
|
14,351
|
|
|
45,720
|
|
|||||
Pro forma adjustment to depreciation and amortization
|
$
|
23,052
|
|
|
$
|
22,534
|
|
|
$
|
30,890
|
|
$
|
13,995
|
|
|
$
|
44,885
|
|
n.
|
Selling, general and administrative expenses
|
|
|
|
|
|
RockPile
|
|||||||||||||
|
Six months ended June 30, 2017
|
|
Six months ended June 30, 2016
|
|
Predecessor
(January 1 - September 7, 2016)
|
Successor
(September 8 - December 31, 2016)
|
|
Combined year ended December 31, 2016
|
||||||||||
Eliminate transaction costs related to the Rockpile Acquisition
|
$
|
(2,238
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
Reclassify RockPile's historical expenses between selling, general and administrative expense and cost of services
|
649
|
|
|
668
|
|
|
944
|
|
462
|
|
|
1,406
|
|
|||||
Adjust for new compensation arrangements with RockPile personnel
|
369
|
|
|
457
|
|
|
630
|
|
238
|
|
|
868
|
|
|||||
Pro forma adjustment to selling, general and administrative expenses
|
$
|
(1,220
|
)
|
|
$
|
1,125
|
|
|
$
|
1,574
|
|
$
|
700
|
|
|
$
|
2,274
|
|
•
|
reclassification of historical insurance and property tax expenses of $0.8 million, $1.0 million, and $1.6 million for six months ended June 30, 2017 and 2016, and year ended December 31, 2016, respectively, from cost of services to selling, general and administrative expenses; and
|
•
|
remaining balance comprises of reclassifications of historical expenses such as rental income and HSE professional fees.
|
•
|
addition of stock compensation expense related to new Keane restricted stock units and stock options issued to five RockPile executives;
|
•
|
elimination of RockPile’s historical stock compensation expense related to the five RockPile executives who received new Keane stock compensation awards;
|
•
|
elimination of executive retention bonuses related to the RockPile Transactions that were paid by RockPile in the six months ended June 30, 2017; and
|
•
|
addition of $1.0 million of expense related to the two-year executive retention bonus program issued to certain Rockpile management members, which will be paid ratably by Keane on the first and second anniversaries of the Rockpile closing on July 3, 2017.
|
o.
|
Interest expense
|
p.
|
Income tax expense
|
q.
|
Net loss per share
|