Smart Sand Terminates Agreement, Incurs New Obligation

TL;DR

Smart Sand just ditched a deal and took on a new debt. Big changes ahead.

AI Summary

Smart Sand, Inc. announced on September 3, 2024, the termination of a material definitive agreement and the creation of a direct financial obligation. The company, incorporated in Delaware, filed an 8-K report detailing these events.

Why It Matters

This filing indicates a significant change in Smart Sand's contractual and financial standing, potentially impacting its operational agreements and financial obligations.

Risk Assessment

Risk Level: medium — The termination of a material agreement and the creation of a new financial obligation suggest potential financial distress or strategic shifts that could pose risks.

Key Players & Entities

• Smart Sand, Inc. (company) — Registrant
• September 3, 2024 (date) — Date of earliest event reported
• Delaware (jurisdiction) — State of incorporation
• 1000 Floral Vale Boulevard , Suite 225 Yardley , Pennsylvania 19067 (address) — Principal executive offices

FAQ

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value SND NASDAQ Indicate by chec
• $30.0 m — an aggregate principal amount of up to $30.0 million, subject to a borrowing base comp
• $1.0 million — nd customary conditions). Approximately $1.0 million was drawn on the ABL Credit Facility at
• $29.0 million — t Facility at closing and an additional $29.0 million remains available under the initial bor
• $20.0 million — an aggregate principal amount of up to $20.0 million. Item 2.03. Creation of a Direct Fina

Filing Documents

• snd-20240903.htm (8-K) — 32KB
• ex101fcb_smartsand-credita.htm (EX-10.1) — 1478KB
• ex102fcb_smartsand-guarant.htm (EX-10.2) — 342KB
• 0001529628-24-000167.txt ( ) — 2276KB
• snd-20240903.xsd (EX-101.SCH) — 2KB
• snd-20240903_lab.xml (EX-101.LAB) — 22KB
• snd-20240903_pre.xml (EX-101.PRE) — 13KB
• snd-20240903_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

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

02 Termination of a Material Definitive Agreement

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.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit Number Description 10.1 ABL Credit Agreement, dated September 3, 2024, among Smart Sand, Inc., 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 10.2 Guarantee and Collateral Agreement, dated September 3, 2024, among the Company, the subsidiary borrowers and guarantors party thereto and First-Citizens Bank & Trust Company, as agent

SIGNATURES

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

View Full Filing

View this 8-K filing on SEC EDGAR