Smart Sand Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
$SND
Mining & Quarrying of Nonmetallic Minerals (No Fuels)
Industrials
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 3, 2024
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Item 1.01 Entry into a Material Definitive Agreement.
On September 3, 2024, Smart Sand, Inc. (the “Company”) entered into a new five-year senior secured asset-based credit facility (the “ABL Credit Facility”) pursuant to: (i) a credit agreement among the Company, the subsidiary borrowers and guarantors party thereto, First-Citizens Bank & Trust Company, as issuing bank, swingline lender and agent, and certain other lenders from time to time party thereto (the “Credit Agreement”); and (ii) a guarantee and collateral agreement among the Company, the subsidiary borrowers and guarantors party thereto and First-Citizens Bank & Trust Company, as agent (the “Security Agreement”).
The ABL Credit Facility provides for non-amortizing revolving loans in an aggregate principal amount of up to $30.0 million, subject to a borrowing base comprised of eligible inventory and accounts receivable (subject to certain reserves and customary conditions). Approximately $1.0 million was drawn on the ABL Credit Facility at closing and an additional $29.0 million remains available under the initial borrowing base. Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to an applicable margin of 2.75% plus the secured overnight financing rate (SOFR).
All obligations under the ABL Credit Facility are guaranteed on a senior basis by our wholly-owned domestic subsidiaries, subject to certain exceptions, and are secured, subject to permitted liens and other exceptions (which exceptions include all of our owned real estate and sand reserves), by a first-priority security interest in our assets.
The ABL Credit Facility contains a number of covenants that, among other things, restrict our ability to incur liens, incur indebtedness, make certain restricted payments, merge or consolidate and dispose of assets. In addition, the ABL Credit Facility requires us in certain limited circumstances to maintain a minimum fixed charge coverage ratio of 1.1 to 1.0. The ABL Credit Facility also contains certain affirmative covenants and events of default customary for facilities of this type.
The above summary does not purport to be a complete description of the Credit Agreement and Security Agreement and is qualified in its entirety by the contents of the Credit Agreement and Security Agreement, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K.
Item 1.02 Termination of a Material Definitive Agreement.
On September 3, 2024, in connection with entry into the Credit Agreement, the Company terminated its existing senior secured asset-based credit facility (the “Prior Credit Facility”) under a credit agreement, dated as of December 13, 2019, among the Company, as borrower, Jefferies Finance LLC, as issuing bank, swingline lender and agent, and the other lenders party thereto, which was filed with the Securities and Exchange Commission as Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Prior Credit Facility was scheduled to mature on December 13, 2024 and provided non-amortizing revolving loans in an aggregate principal amount of up to $20.0 million.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth above in Item 1.01 in this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | |||||||
| 10.1 | ||||||||
| 10.2 | ||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SMART SAND, INC. | |||||||||||||||||||||||
| Dated: | September 9, 2024 | By: | /s/ Lee E. Beckelman | ||||||||||||||||||||
| Lee E. Beckelman | |||||||||||||||||||||||
| Chief Financial Officer | |||||||||||||||||||||||