FORUM ENERGY TECH Reports Material Agreement, Asset Deal, Debt, Equity Sale

TL;DR

**FORUM ENERGY TECH just made big moves: new deals, asset changes, more debt, and sold new stock.**

AI Summary

FORUM ENERGY TECHNOLOGIES, INC. filed an 8-K on January 8, 2024, reporting an event that occurred on January 4, 2024. This filing indicates the company entered into a material definitive agreement, completed an acquisition or disposition of assets, created a direct financial obligation, and made unregistered sales of equity securities. For investors, this matters because these actions can significantly impact the company's financial health, ownership structure, and future strategic direction, potentially affecting stock valuation.

Why It Matters

These events signal significant strategic and financial shifts for FORUM ENERGY TECHNOLOGIES, INC., which could lead to changes in revenue, expenses, and overall profitability, directly influencing shareholder value.

Risk Assessment

Risk Level: medium — The combination of new financial obligations and unregistered equity sales introduces complexity and potential dilution, warranting a medium risk assessment.

Analyst Insight

Investors should closely monitor subsequent filings for details on the material agreement, asset transaction, new financial obligations, and the impact of the unregistered equity sales on share dilution and the company's balance sheet.

Key Players & Entities

• FORUM ENERGY TECHNOLOGIES, INC. (company) — registrant filing the 8-K
• January 4, 2024 (date) — date of the earliest event reported
• January 8, 2024 (date) — date the 8-K was filed
• 001-35504 (other) — Commission File Number
• 61-1488595 (other) — I.R.S. Employer Identification No.

FAQ

Key Financial Figures

• $0.01 — ch registered Common Stock, par value $0.01 per share FET NYSE Indicate by chec
• $60.0 million — to the Credit Agreement, Forum borrowed $60.0 million aggregate principal amount of term loan
• $31.25 million — er of (x) 12.5% of the Line Cap and (y) $31.25 million and continuing until excess availabilit
• $150.0 m — and (ii) an amount of cash equal to US $150.0 million, as adjusted for customary purcha
• $90 million — e ABL Credit Agreement of approximately $90 million and the issuance of the Credit Agreemen

Filing Documents

• fet-20240104.htm (8-K) — 54KB
• exhibit41-firstsupplementa.htm (EX-4.1) — 31KB
• exhibit101-secondlienselle.htm (EX-10.1) — 1104KB
• exhibit102-investorrightsa.htm (EX-10.2) — 252KB
• exhibit991-fetpressrelease.htm (EX-99.1) — 12KB
• image_01.jpg (GRAPHIC) — 7KB
• 0001401257-24-000008.txt ( ) — 1798KB
• fet-20240104.xsd (EX-101.SCH) — 2KB
• fet-20240104_lab.xml (EX-101.LAB) — 25KB
• fet-20240104_pre.xml (EX-101.PRE) — 13KB
• fet-20240104_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Credit Agreement On the Closing Date, Forum entered into the Second Lien Seller Term Loan Credit Agreement, (the " Credit Agreement "), by and among Forum, as borrower, the Sellers and certain of the Option Holders (as defined in the Agreement), as lenders (the " Lenders "), and VES Partnership, as administrative and collateral agent for each of the Lenders. Pursuant to the Credit Agreement, Forum borrowed $60.0 million aggregate principal amount of term loans (the " Term Loans "), which mature in December 2026. The Term Loans bear interest at the rate of (i) 11.0% per year for the period commencing on the Closing Date through the first anniversary of the Closing Date, (ii) 17.0% per annum for the period commencing on the first anniversary of the Closing Date through the second anniversary of the Closing Date and (iii) 17.5% per annum for the period commencing on the second anniversary of the Closing Date through the maturity date. The Credit Agreement requires Forum to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 as of the last day of each fiscal quarter commencing at the time excess availability is less than the greater of (x) 12.5% of the Line Cap and (y) $31.25 million and continuing until excess availability exceeds the greater of (x) 12.5% of the Line Cap and (y) $31.25 million for 60 consecutive days. "Line Cap" has the meaning set forth in the Third Amended and Restated Credit Agreement, dated as of October 30, 2017, as amended by Amendment No. 1 to Third Amended and Restated Credit Agreement dated as of February 3, 2020, Amendment No. 2 to Third Amended and Restated Credit Agreement and Amendment No. 1 to each Guaranty and Security Agreement dated as of July 24, 2020, the Master Assignment Agreement and Amendment No. 3 to Third Amended and Restated Credit Agreement dated as of September 8, 2021, Amendment No. 4 to Third Amended and Restated Credit Agreement dated as of April 1, 202

01 Completion of Acquisition or Disposition of Assets

Item 2.01 Completion of Acquisition or Disposition of Assets. The information set forth in the Introduction above regarding the Transactions and in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01. On the Closing Date, the Acquisition was consummated in accordance with the terms and conditions of the Agreement. In connection with the consummation of the Acquisition, Forum paid aggregate consideration of (i) the Shares and (ii) an amount of cash equal to US $150.0 million, as adjusted for customary purchase price adjustments set forth in the Agreement relating to cash, net working capital, indebtedness and transaction expenses of Variperm as of the closing of the Transactions (the " Cash Consideration "). Forum funded the Cash Consideration with cash on hand, borrowings under the ABL Credit Agreement of approximately $90 million and the issuance of the Credit Agreement discussed above. Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information set forth in the Introduction above regarding the Transactions and in Items 1.01 and 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities The information set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The issuance of the Shares was completed in reliance upon the exemption from the registration requirements of the Securities Act, provided by Section 4(a)(2) thereof as a transaction by an issuer not involving any public offering.

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. On January 5, 2024, Forum issued a press release announcing the closing of the Transactions. A copy of the press release containing the announcement is furnished herewith as Exhibit 99.1 and incorporated by reference herein. The information furnished pursuant to Item 7.01, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, shall not otherwise be subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act unless specifically identified therein as being incorporated therein by reference. The furnishing of this communication is not intended to constitute a representation that such information is required by Regulation FD or that the material it contains include material information that is not otherwise publicly available.

01 Exhibits

Item 9.01 Exhibits. (a) Financial Statements of Business Acquired The financial statements required by this Item 9.01(a) are not included in this Current Report on Form 8-K. Forum intends to file such financial statements by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed. (b) Pro Forma Financial Information The pro forma financial information required by this Item 9.01(b) is not included in this Current Report on Form 8-K. Forum intends to file such pro forma financial information by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed. (d) Exhibits: Exhibit No. Exhibit Title or Description 2.1* Stock Purchase Agreement, dated as of November 1, 2023, by and among Forum, the Purchaser, Variperm, the Sellers and VES Partnership, as the Sellers' Representative (incorporated by reference to Exhibit 2.1 to Forum's Current Report on Form 8-K filed on November 3, 2023). 4.1 First Supplemental Indenture, dated as of January 4, 2024, by and among Forum, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as trustee. 10.1 Second Lien Seller Term Loan Credit Agreement, dated as of January 4, 2024, by and among Forum, the lenders party thereto, and VES Partnership, as administrative and collateral agent for each of the lenders. 10.2 Investor Rights Agreement, dated as of January 4, 2024, by and among Forum, the Sellers and James Nurcombe. 99.1 Press Release, dated January 5 , 2024. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). *Filed previously. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly autho

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