Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [ ]Yes [✓]No

As of ~~October 31, 2020,~~April 30, 2021, the registrant had ~~71,766,358~~90,068,356 shares of Class A Common Stock and ~~2,302,936~~0 shares of Class B Common Stock outstanding.

U.S. WELL SERVICES, INC.							U.S. WELL SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS							CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)							(in thousands, except share and per share amounts)
(unaudited)							(unaudited)
	September 30, 2020			December 31, 2019				March 31, 2021			December 31, 2020 (As Restated)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	519		$	33,794			$	17,726		$	3,693
Restricted cash		519			7,610				519			1,569
Accounts receivable (net of allowance for doubtful accounts of $9,000 and $22 as of September 30, 2020 and December 31, 2019, respectively)		36,416			79,542
Accounts receivable (net of allowance for doubtful accounts of $0 and $12,000 as of March 31, 2021 and December 31, 2020, respectively)									61,756			44,393
Inventory, net		7,321			9,052				8,077			7,965
Prepaids and other current assets		10,443			13,332				14,048			10,707
Total current assets		55,218			143,330				102,126			68,327
Property and equipment, net		242,810			441,610				233,502			235,332
Intangible assets, net		13,708			21,826				13,225			13,466
Goodwill		4,971			4,971				4,971			4,971
Deferred financing costs, net		1,196			1,045				781			1,127
TOTAL ASSETS	$	317,903		$	612,782			$	354,605		$	323,223
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable	$	35,745		$	70,170			$	45,113		$	36,362
Accrued expenses and other current liabilities		12,142			40,481				11,989			14,781
Notes payable		1,867			8,068				9,123			998
Current portion of long-term equipment financing		3,473			5,564				3,564			3,519
Capital lease obligation		6,201			10,474
Current portion of capital lease obligation									218			54
Current portion of long-term debt		-			6,250				10,000			10,000
Total current liabilities		59,428			141,007				80,007			65,714
Warrant liabilities									8,775			1,619
Long-term equipment financing		10,243			10,501				8,438			9,347
Long-term capital lease obligation									661			-
Long-term debt		250,831			274,391				293,503			274,555
Other long-term liabilities		1,598			215				3,617			3,539
TOTAL LIABILITIES		322,100			426,114				395,001			354,774
Commitments and contingencies (NOTE 16)
MEZZANINE EQUITY
Series A Redeemable Convertible Preferred Stock, par value $0.0001 per share; 55,000 shares authorized; 52,000 shares and 55,000 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $61,006 and $59,050 as of September 30, 2020 and December 31, 2019, respectively		50,907			38,928
Series B Redeemable Convertible Preferred Stock, par value $0.0001 per share; 22,050 shares 0 shares authorized, issued and outstanding as of September 30, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $23,398 and $0 as of September 30, 2020 and December 31, 2019, respectively		21,984			-
STOCKHOLDERS' EQUITY (DEFICIT)
Class A Common Stock, par value of $0.0001 per share; 400,000,000 shares authorized; 71,413,883 shares and 62,857,624 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		7			5
Class B Common Stock, par value of $0.0001 per share; 20,000,000 shares authorized; 2,302,936 shares and 5,500,692 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		-			1
Series A Redeemable Convertible Preferred Stock, par value $0.0001 per share; 55,000 shares authorized; 50,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020; aggregate liquidation preference of $62,230 and $60,418 as of March 31, 2021 and December 31, 2020, respectively									53,252			50,975
Series B Redeemable Convertible Preferred Stock, par value $0.0001 per share; 22,050 shares authorized; 21,288 shares and 22,050 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $24,013 and $24,100 as of March 31, 2021 and December 31, 2020, respectively									22,600			22,686
STOCKHOLDERS' DEFICIT
Class A Common Stock, par value of $0.0001 per share; 400,000,000 shares authorized; 90,068,356 shares and 72,515,342 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively									9			7
Class B Common Stock, par value of $0.0001 per share; 20,000,000 shares authorized; 0 shares and 2,302,936 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively									-			-
Additional paid in capital		240,547			248,302				226,740			217,212
Accumulated deficit		(317,642	)		(111,201	)			(342,997	)		(322,431	)
Total stockholders' equity (deficit) attributable to U.S. Well Services, Inc.		(77,088	)		137,107
Noncontrolling interest		-			10,633
Total Stockholders' Equity (Deficit)		(77,088	)		147,740
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)	$	317,903		$	612,782
Total Stockholders' Deficit									(116,248	)		(105,212	)
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT								$	354,605		$	323,223
The accompanying notes are an integral part of these condensed consolidated financial statements.							The accompanying notes are an integral part of these condensed consolidated financial statements.

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

U.S. WELL SERVICES, INC.													U.S. WELL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS													CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)													(in thousands, except per share amounts)
(unaudited)													(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
	2020			2019			2020			2019				2021			2020 (As Restated)
Revenue	$	44,042		$	130,884		$	195,914		$	422,075			$	76,258		$	112,035
Costs and expenses:
Cost of services (excluding depreciation and amortization)		31,157			90,792			145,321			307,841				62,631			85,153
Depreciation and amortization		16,393			39,723			65,759			117,888				11,106			32,008
Selling, general and administrative expenses		6,098			8,216			30,376			24,474				7,390			19,058
Impairment of long-lived assets		-			-			147,543			-				-			147,543
Loss on disposal of assets		755			4,976			5,852			15,884				2,436			4,244
Loss from operations		(10,361	)		(12,823	)		(198,937	)		(44,012	)			(7,305	)		(175,971	)
Interest expense, net		(5,744	)		(8,449	)		(19,357	)		(21,384	)			(6,183	)		(7,956	)
Loss on extinguishment of debt		-			-			-			(12,558	)
Change in fair value of warrant liabilities															(7,151	)		6,553
Other income		30			62			81			1,774				29			6
Loss before income taxes		(16,075	)		(21,210	)		(218,213	)		(76,180	)			(20,610	)		(177,368	)
Income tax expense (benefit)		(87	)		39			(824	)		469
Income tax benefit															-			(750	)
Net loss		(15,988	)		(21,249	)		(217,389	)		(76,649	)			(20,610	)		(176,618	)
Net loss attributable to noncontrolling interest		(51	)		(4,280	)		(10,948	)		(15,929	)			(44	)		(10,800	)
Net loss attributable to U.S. Well Services, Inc.		(15,937	)		(16,969	)		(206,441	)		(60,720	)			(20,566	)		(165,818	)
Dividends accrued on Series A preferred stock		(1,854	)		(1,670	)		(5,450	)		(2,330	)			(1,813	)		(1,751	)
Dividends accrued on Series B preferred stock		(681	)		-			(1,347	)		-				(711	)		-
Deemed and imputed dividends on Series A preferred stock		(467	)		(4,406	)		(11,220	)		(5,966	)			(464	)		(6,972	)
Deemed dividends on Series B preferred stock															(4,168	)		-
Net loss attributable to U.S. Well Services, Inc. common stockholders	$	(18,939	)	$	(23,045	)	$	(224,458	)	$	(69,016	)		$	(27,722	)	$	(174,541	)
Loss per common share (See Note 12):
Loss per common share (See Note 13):
Basic and diluted	$	(0.28	)	$	(0.45	)	$	(3.46	)	$	(1.36	)		$	(0.35	)	$	(2.90	)
Weighted average common shares outstanding:
Basic and diluted		66,667			50,250			63,431			49,182				78,977			58,620

The accompanying notes are an integral part of these condensed consolidated financial statements.													The accompanying notes are an integral part of these condensed consolidated financial statements.

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

	Nine Months Ended September 30,						Three Months Ended March 31,
	2020			2019			2021			2020 (As Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(217,389	)	$	(76,649	)	$	(20,610	)	$	(176,618	)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization		65,759			117,888			11,106			32,008
Change in fair value of warrant liabilities								7,151			(6,553	)
Impairment of long-lived assets		147,543			-			-			147,543
Provision for losses on accounts receivable		9,031			307		��	9			9,031
Provision for losses on inventory obsolescence		603			-			106			37
Loss on disposal of assets		5,852			15,884			2,436			4,244
Amortization of discount on debt		2,355			1,373			1,188			221
Deferred financing costs amortization		1,017			1,049			270			359
Loss on extinguishment of debt		-			12,558
Share-based compensation expense		4,519			5,672			1,648			2,078
Changes in assets and liabilities:
Accounts receivable		34,096			(50,331	)		(17,373	)		(19,342	)
Inventory		1,128			(2,036	)		(218	)		(603	)
Prepaids and other current assets		5,979			1,795			(7,973	)		945
Accounts payable		(22,375	)		2,243			10,424			15,825
Accrued liabilities		(8,360	)		1,487			(3,159	)		(2,702	)
Accrued interest		(10,669	)		11,090			3,979			(18,032	)
Net cash provided by operating activities		19,089			42,330
Net cash used in operating activities								(11,016	)		(11,559	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(43,948	)		(194,114	)		(14,218	)		(35,017	)
Proceeds from sale of property and equipment		15,778			706
Proceeds from sale of property and equipment and insurance proceeds from damaged property and equipment								6,393			14,907
Net cash used in investing activities		(28,170	)		(193,408	)		(7,825	)		(20,110	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility		25,723			49,134			21,174			9,476
Repayment of revolving credit facility		(51,034	)		(65,000	)		(9,000	)		(2,381	)
Proceeds from issuance of long-term debt		10,000			285,000			3,004			-
Repayments of long-term debt		(2,500	)		(75,000	)		(1,250	)		(2,500	)
Payment of fees related to debt extinguishment		-			(6,560	)
Proceeds from issuance of note payable		-			9,117			9,139			-
Repayments of notes payable		(6,201	)		(4,560	)		(1,014	)		(2,042	)
Repayments of amounts under equipment financing		(2,349	)		(66,872	)		(864	)		(1,308	)
Principal payments under finance lease obligation		(4,272	)		(12,494	)
Proceeds from issuance of preferred stock and warrants, net		19,596			54,524
Deferred financing costs		(20,248	)		(13,451	)
Principal payments under capital lease obligation								(34	)		(1,393	)
Proceeds from issuance of common stock, net								10,669			-
Net cash provided by (used in) financing activities		(31,285	)		153,838			31,824			(148	)
Net increase (decrease) in cash and cash equivalents and restricted cash		(40,366	)		2,760			12,983			(31,817	)
Cash and cash equivalents and restricted cash, beginning of period		41,404			30,036			5,262			41,404
Cash and cash equivalents and restricted cash, end of period	$	1,038		$	32,796		$	18,245		$	9,587

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

Class A Common
Stock

Class B Common
Stock

Additional

Paid in

Accumulated

Noncontrolling

Total

Shares

Amount

Shares

Amount

Capital

Deficit

Interest

Equity

Balance, December 31, 2018

49,254,760

$
5

13,937,332

$
1

$
204,928

$
(17,383
)

$
52,798

$
240,349

Adoption of ASC 606 as of
   January 1, 2019

-

-

-

-

-

95

27

122

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

46,875

-

-

-

331

-

87

418

Share-based compensation

-

-

-

-

4,265

-

1,094

5,359

Restricted stock forfeitures

(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

-

-

-

-

-

(60,720
)

(15,929
)

(76,649
)
Balance, September 30, 2019

54,588,775

$
5

13,775,400

$
1

$
232,080

$
(78,008
)

$
38,077

$
192,155

	Class A Common Stock					Class B Common Stock
										Additional
										Paid in			Accumulated			Noncontrolling			Total
	Shares			Amount		Shares		Amount		Capital			Deficit			Interest			Equity
Balance, December 31, 2019 (As Restated)		62,857,624		$	5		5,500,692	$	1	$	225,382		$	(93,091	)	$	10,633		$	142,930
Share-based compensation		-			-		-		-		1,911			-			167			2,078
Tax withholding related to vesting of share-based compensation		(154,253	)		-		-		-		(70	)		-			-			(70	)
Restricted stock forfeitures		(347,714	)		-		-		-					-			-			-
Deemed and imputed dividends on Series A preferred stock		-			-		-		-		(6,972	)		-			-			(6,972	)
Accrued Series A preferred stock dividends		-			-		-		-		(1,751	)		-			-			(1,751	)
Net loss		-			-		-		-		-			(165,818	)		(10,800	)		(176,618	)
Balance, March 31, 2020 (As Restated)		62,355,657		$	5		5,500,692	$	1	$	218,500		$	(258,909	)	$	-		$	(40,403	)

Class A Common
Stock

Class B Common
Stock

Additional

Paid in

Accumulated

Noncontrolling

Total

Shares

Amount

Shares

Amount

Capital

Deficit

Interest

Equity

Balance, December 31, 2019

62,857,624

$
5

5,500,692

$
1

$
248,302

$
(111,201
)

$
10,633

$
147,740

Class A common stock issuance

5,530,022

1

-

-

1,437

-

-

1,438

Conversion of Class B common stock to Class A common stock

3,197,756

1

(3,197,756
)

(1
)

-

-

-

-

Conversion of Series A preferred stock to Class A common stock

523,973

-

-

-

4,691

-

-

4,691

Share-based compensation

-

-

-

-

4,204

-

315

4,519

Tax withholding related to vesting of share-based compensation

(154,253
)

-

-

-

(70
)

-

-

(70
)
Restricted stock forfeitures

(541,239
)

-

-

-

-

-

-

-

Deemed and imputed dividends on Series A preferred stock

-

-

-

-

(11,220
)

-

-

(11,220
)
Accrued Series A preferred stock dividends

-

-

-

-

(5,450
)

-

-

(5,450
)
Accrued Series B preferred stock dividends

-

-

-

-

(1,347
)

-

-

(1,347
)
Net loss

-

-

-

-

-

(206,441
)

(10,948
)

(217,389
)
Balance, September 30, 2020

71,413,883

$
7

2,302,936

$
-

$
240,547

$
(317,642
)

$
-

$
(77,088
)

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

U.S. WELL SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (continued)

(in thousands, except share amounts)

(unaudited)

Class A Common
Stock

Class B Common
Stock

Additional

Paid in

Accumulated

Noncontrolling

Total

Shares

Amount

Shares

Amount

Capital

Deficit

Interest

Equity

Balance, June 30, 2019

54,607,462

$
5

13,775,400

$
1

$
236,398

$
(61,039
)

$
41,914

$
217,279

Share-based compensation

-

-

-

-

1,758

-

443

2,201

Restricted stock forfeitures

(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

-

-

-

-

-

(16,969
)

(4,280
)

(21,249
)

Balance, September 30, 2019

54,588,775

$
5

13,775,400

$
1

$
232,080

$
(78,008
)

$
38,077

$
192,155

Class A Common
Stock

Class B Common
Stock

Additional

Paid in

Accumulated

Noncontrolling

Total

Shares

Amount

Shares

Amount

Capital

Deficit

Interest

Equity

Balance, June 30, 2020

68,361,213

$
7

5,014,897

$
-

$
237,872

$
(301,705
)

$
-

$
(63,826
)

Class A common stock issuance

400

-

-

-

-

-

-

-

Conversion of Class B common stock to Class A common stock

2,711,961

-

(2,711,961
)

-

-

-

-

-

Conversion of Series A preferred stock to Class A common stock

523,973

-

-

-

4,691

-

-

4,691

Share-based compensation

-

-

-

-

986

-

51

1,037

Restricted stock forfeitures

(183,664
)

-

-

-

-

-

-

-

Deemed and imputed dividends on Series A preferred stock

-

-

-

-

(467
)

-

-

(467
)

Accrued Series A preferred stock dividends

-

-

-

-

(1,854
)

-

-

(1,854
)

Accrued Series B preferred stock dividends

-

-

-

-

(681
)

-

-

(681
)

Net loss

-

-

-

-

-

(15,937
)

(51
)

(15,988
)

Balance, September 30, 2020

71,413,883

$
7

2,302,936

$
-

$
240,547

$
(317,642
)

$
-

$
(77,088
)

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Class A Common Stock					Class B Common Stock
											Additional
											Paid in			Accumulated			Noncontrolling			Total
	Shares			Amount		Shares			Amount		Capital			Deficit			Interest			Equity
Balance, December 31, 2020 (As Restated)		72,515,342		$	7		2,302,936		$	-	$	217,212		$	(322,431	)	$	-		$	(105,212	)
Class A common stock issuance		12,624,657			1		-			-		10,350			-			-			10,351
Conversion of Class B common stock to Class A common stock		2,302,936			-		(2,302,936	)		-		-			-			-			-
Conversion of Series B preferred stock to Class A common stock		2,745,778			1		-			-		797			-			-			798
Share-based compensation		-			-		-			-		1,519			-			44			1,563
Tax withholding related to vesting of share-based compensation		(103,697	)		-		-			-		(150	)		-			-			(150	)
Restricted stock forfeitures		(16,660	)		-		-			-		-			-			-			-
Deemed and imputed dividends on Series A preferred stock		-			-		-			-		(464	)		-			-			(464	)
Accrued Series A preferred stock dividends		-			-		-			-		(1,813	)		-			-			(1,813	)
Accrued Series B preferred stock dividends		-			-		-			-		(711	)		-			-			(711	)
Net loss		-			-		-			-		-			(20,566	)		(44	)		(20,610	)
Balance, March 31, 2021		90,068,356		$	9		-		$	-	$	226,740		$	(342,997	)	$	-		$	(116,248	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

U.S. Well Services, Inc. (the ~~“Company”~~“Company,” “we,” “us” or “our”), f/k/a Matlin & Partners Acquisition Corp (“MPAC”), is a Houston, Texas-based technology-focused oilfield service company focused on hydraulic fracturing for oil and natural gas exploration and production (“E&P”) companies in the United States. The process of hydraulic fracturing involves pumping a pressurized stream of fracturing fluid—typically a mixture of water, chemicals, and proppant—into a well casing or tubing ~~in order~~ to cause the underground mineral formation to fracture or crack. Fractures release trapped hydrocarbon particles and provide a conductive channel for the oil or natural gas to flow freely to the wellbore for collection. The propping agent or proppant becomes lodged in the cracks created by the hydraulic fracturing process, “propping” them open to facilitate the flow of hydrocarbons from the reservoir to the well.

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 are powered by diesel fuel and utilize traditional internal combustion engines, transmissions, and radiators and (2) Clean Fleet^®, which replaces 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” and the personnel assigned to each fleet as a “crew”.

MPAC 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, 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 97% ownership of USWS Holdings as of September 30, 2020.

Unless the context otherwise requires, “the Company”, “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.

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 GAAP for annual financial statements and should be read in conjunction with the annual financial statements included in the ~~Company's 2019~~Amendment No. 1 to Annual Report on Form ~~10-K,~~10-K/A for the year ended December 31, 2020 (the “Amended Annual Report”), filed with the Securities and Exchange Commission (“SEC”) on ~~March 5, 2020 (the “Annual Report”).~~May 17, 2021.

The accompanying unaudited condensed consolidated financial statements and accompanying notes present the consolidated financial position, results of operations, cash flows, and ~~equity (deficit)~~stockholders’ deficit of the Company as of ~~the dates~~March 31, 2021 and December 31, 2020, and for the ~~periods presented.~~three months ended March 31, 2021 and 2020. 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 periods. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 are not necessarily indicative of the results of operations expected for the entire fiscal year ended December 31, ~~2020.~~2021.

On April 12, 2021, the Staff of the SEC (the “SEC Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities of the entity measured at fair value, with changes in fair value each reporting period in earnings as opposed to being treated as equity.

As a result of the SEC Staff Statement and in light of evolving views as to certain provisions commonly included in warrants issued by SPACs, we re-evaluated the accounting for our warrants (as described in “Note 8 – Warrant Liabilities” and “Note 11 – Mezzanine Equity”) under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and concluded that they do not meet the criteria to be classified in stockholders’ equity. The Company historically accounted for the warrants as equity based on the initial evaluations of the accounting treatment for the warrants and believed its positions to be appropriate at those times. As a result of the SEC Staff Statement, the Company determined that the warrants should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in the Company’s consolidated statements of operations each reporting period. Accordingly, the Company filed an Amended Annual Report to amend and restate its previously issued consolidated financial statements as of and for the years ended December 31, 2020, 2019 and 2018, and for the interim periods within the years ended

December 31, 2020 and 2019. Accordingly, this Quarterly Report on Form 10–Q contains our restated consolidated financial statements and related disclosures as of December 31, 2020 and for the three months ended March 31, 2020.

Please see “Explanatory Note” and Note 2 to the Notes to the Consolidated Financial Statements included in Part II, Item 8 of the Amended Annual Report for additional information about the restatement.

The condensed consolidated financial statements comprise the financial statements of the Company and its wholly owned ~~subsidiaries, and its subsidiaries that it controls due to ownership of a majority voting interest.~~subsidiaries. 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.

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 intangible assets, impairment assessments of goodwill and long-lived assets, Level 2 inputs used in fair value estimation of warrant liabilities, term loans, and the assumptions used in our Black-Scholes and Monte Carlo option pricing models associated with the valuation of warrant liabilities, share-based compensation and certain equity instruments. Actual results could differ from those estimates.

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, and 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 approved capital expenditures ~~related~~amounting to ~~approved fleet expansion in amounts of $0.5 million~~$513 and ~~a nominal amount,~~$6, respectively, as of ~~September 30, 2020,~~March 31, 2021, and ~~$0.5 million~~$513 and ~~$7.1 million,~~$1,056, respectively, as of December 31, ~~2019.~~2020.

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 condensed consolidated statements of cash flows (in thousands):

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, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company had established inventory reserves of $0.4 million and ~~$0.6~~$0.3 million, respectively, for obsolete and slow-moving inventory.

Property and equipment are carried at cost, with depreciation provided on a straight-line basis over their estimated useful lives. Expenditures for renewals and betterments that extend the lives of the assets are capitalized. Amounts spent for maintenance and repairs, which do not improve or extend the life of the related asset, are charged to expense as incurred.

The Company separately identifies and accounts for certain critical components of its hydraulic fracturing units including the engine, transmission, and pump, which requires us to separately estimate the useful lives of these components. For our other service equipment, we do not separately identify and track depreciation of specific original components. When we replace components of these assets, we typically estimate the net book values of the components that are retired, which are based primarily upon their replacement costs, their ages and their original estimated useful lives.

In the first quarter of 2020, our review of impairment of long-lived assets ~~(refer to “Note 5 – Goodwill and Intangible Assets”)~~ necessitated a review of the useful lives of our property and equipment. Current trends in hydraulic fracturing equipment operating conditions, such as increasing treating pressures and higher pumping rates, along with the increase in daily pumping time are shortening the useful life of certain critical components we use. We determined that the average useful life of fluid ends and fuel injectors is now less than one year, resulting in our determination that costs associated with the replacement of these components will no longer be capitalized, but instead expensed as they are used in operations. This change in accounting estimate was made effective in March 2020 and accounted for prospectively.

Goodwill is not amortized, but is reviewed for impairment annually, or more frequently when events or changes in circumstances indicate that the carrying value may not be recoverable. Judgements regarding indicators of potential impairment are based on market conditions and operational performance of the business.

As of December 31 of each year, or as required, the Company performs an impairment analysis of goodwill. The Company may assess its goodwill for impairment initially using a qualitative approach to determine whether conditions exist that indicate it is more likely than not that a reporting unit’s carrying value is greater than its fair value, and if such conditions are identified, then a quantitative analysis will be performed to determine if there is any impairment. The Company may also elect to perform a single step quantitative analysis in which the carrying amount of the reporting unit is compared to its fair value, which the Company estimates using a guideline public company method, a form of the market approach. The guideline public company method ~~utilized~~utilizes the trading multiples of similarly traded public companies as they ~~related~~relate to the Company’s operating metrics. An impairment charge would be recognized for the amount by which the carrying amount of the reporting unit exceeds the reporting unit’s fair value, and only limited to the total amount of goodwill allocated to the reporting unit.

The Company evaluates all its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity and ASC 815-15, Derivatives and Hedging—Embedded Derivatives. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or equity is evaluated pursuant to ASC 815-40,Derivatives and Hedging—Contracts in Entity’s Own Equity.

The Company issued public warrants and private placement warrants (collectively, the “public and private placement warrants”) in connection with its initial public offering in November 2018. Additionally, the Company issued warrants to certain institutional investors in connection with the Company’s private placement of Series A Preferred Stock on May 24, 2019 (“Series A warrants,” and together with the public and private placement warrants, the “warrants”). All our outstanding warrants are recognized as liabilities. Accordingly, we recognize the warrant instruments as liabilities at fair value upon issuance and adjust the instruments to fair value at the end of each reporting period. Any change in fair value is recognized in our condensed consolidated statements of operations. The public warrants are valued using their quoted market price since they are publicly traded and thus had an observable market price. The private placement warrants are valued using a Monte Carlo simulation model. The Series A warrants are valued using the Black-Scholes option pricing model.

Fair value is defined under ~~Accounting Standards Codification (ASC)~~ASC 820, Fair Value Measurement, as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels are defined as follows:

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.

The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:

Senior Secured Term Loan. The fair value of the Senior Secured Term Loan is ~~$193.9~~$196.9 million and ~~approximates carrying value~~$198.0 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, 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, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

See “Note 8 – Warrant Liabilities” for fair value measurements associated with the Company’s warrants.

The Company recognizes revenue 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.

The Company’s performance obligations are satisfied over time, typically measured inby the number of stages completed or the number of pumping days a fleet is available to pump for a customer in a month. 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. 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.

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.

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. ~~The~~During the three months ended March 31, 2021, the Company ~~held a reserve~~wrote-off accounts receivable amounting to $12.0 million, which was previously reserved for ~~doubtful accounts of $9.0 million and a nominal amount~~in full as of ~~September 30, 2020 and~~ December 31, 2019, respectively. The reserve was recorded due to growing uncertainty as to collectability of billed amounts from customers weakened by the recent collapse in crude oil prices. We are continuing to work with our customers on collecting these receivables.2020. See “Note 17 – Subsequent Events” for more information.

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, 2020 and 2019:~~customers:

The following table shows the percentage of trade receivables from our significant ~~customers as of September 30, 2020 and December 31, 2019:~~customers:

The Company under ASC 740,Accounting for Income Taxes, 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. NaN amounts were accrued for the payment of interest and penalties at ~~September 30, 2020.~~March 31, 2021. 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.

Except as discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, as compared to the recent accounting pronouncements described in the Amended Annual Report, that are of significance, or potential significance to the Company.

In ~~January 2017,~~August 2018, the FASB issued ASU ~~2017-04,~~2018-15, Intangibles - Goodwill and Other ~~(Topic 350)~~- Internal-Use Software (Subtopic 350-40): ~~Simplifying~~Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, requiring a customer in a cloud computing arrangement that is a service contract to follow the ~~Test~~guidance in ASC 350-40 in determining the requirements for ~~Goodwill Impairment~~, which eliminates the second step of the previous two-step quantitative test of goodwill impairment. Under the new guidance, the quantitative test consists of a single step in which the carrying amount of the reporting unit is comparedcapitalizing implementation costs incurred to its fair value. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the amount of the impairment would be limited to the total amount of goodwill allocated to the reporting unit. The guidance does not affect the existing option to perform the qualitative assessment for a reporting unit to determine whether the quantitative impairment test is necessary.develop or obtain internal-use-software. The new guidance will be effective for emerging growth companies for ~~fiscal years~~annual reporting periods beginning after December 15, ~~2021; however, early~~2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted. The Company ~~early~~ adopted ASU 2018-15 on January 1,

2021, and the adoption of this ~~guidance during the first quarter of 2020. The Company’s impairment analysis~~standard did not ~~result in any impairment of goodwill.~~

~~In June 2020,~~have a material impact on the ~~FASB issued ASU 2020-05,~~ ~~Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) - Effective Dates for Certain Entities~~Company’s consolidated financial statements., which provided deferral of the effective dates for implementing previously issued Topic 606 and Topic 842 for one year to give some relief for businesses and the difficulties they are facing during the COVID-19 coronavirus pandemic. The Company adopted Topic 606 on January 1, 2019. We expect to adopt Topic 842 using the effective date of January 1, 2022 as the date of our initial application of the standard.

Prepaids and other current assets ~~as of September 30, 2020 and December 31, 2019~~ consisted of the following (in thousands):

During the ~~third quarter~~three months ended March 31, 2021, the Company prepaid $10.1 million in insurance premiums related to renewals of ~~2020, certain pieces of equipment were damaged. The Company has~~various insurance ~~coverage in place covering, among other things, property damage up to certain specified amounts. Other current assets include~~policies.

The recoverable costs from insurance amounting to ~~$3.1~~$4.6 million ~~which represents net book value~~recorded as of December 31, 2020 was collected in full during the ~~equipment damaged.~~three months ended March 31, 2021.

Goodwill represents the difference between the purchase price and the estimated fair value of identifiable assets acquired and liabilities assumed. The Company performs an impairment analysis related to goodwill as of December 31 of each year, or when the Company identifies certain triggering events or circumstances that would more likely than not reduce the estimated fair value of the goodwill below its carrying amount.

In the first quarter of 2020, the Company performed an impairment analysis of goodwill and long-lived assets. This impairment analysis was triggered by the sudden and drastic decline in oil prices in March 2020 and the corresponding decrease in the Company’s stock price, operating results and revised forecasts. The Company performed a quantitative goodwill impairment test utilizing the single-step approach to compare the carrying value of the reporting unit to its estimated fair value. The estimated fair value of the reporting unit was determined using a guideline public company method, a form of the market approach. The guideline public company method utilized the trading multiples of similarly traded public companies as they related to our operating metrics. Based on the impairment test, the Company determined that goodwill was not impaired as the reporting unit’s carrying value, after accounting for the impairment charges of long-lived assets, did not exceed the reporting unit’s fair value.

A summary of intangible assets ~~as of September 30, 2020 and December 31, 2019~~ consisted of the following (in thousands):

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,~~March 31, 2021 and 2020 ~~and 2019~~ was $0.2 million and ~~$1.9~~$0.4 million, respectively, and was included as part of depreciation and amortization in the condensed consolidated statements of operations. ~~Amortization expense related to amortizable intangible assets for the nine months ended September 30, 2020 and 2019 was $0.8 million and $5.7 million, respectively.~~

As ~~discussed above, the Company identified a triggering event in the first quarter~~ of 2020 and performed a quantitative impairment test on long-lived assets. The expected present value method, a form of the income approach, was utilized to determine the fair value of long-lived assets. This method is based on expected cash flows using a risk-adjusted discount rate, which reflects the weighted average cost of capital of similarly traded public companies. As a result of the impairment test performed, the Company recorded in the first quarter of 2020 an impairment charge of $7.2 million to reduce the carrying value of intangible assets from $21.4 million to $14.2 million, representing its fair value on the date of impairment.

~~The~~March 31, 2021, the estimated amortization expense for future periods is as follows (in thousands):

Property and equipment ~~as of September 30, 2020 and December 31, 2019~~ consisted of the following (in thousands):

Depreciation and amortization expense related to property and equipment for the three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ was ~~$16.2~~$10.9 million and ~~$37.8~~$31.6 million, respectively. ~~Depreciation and amortization expense related to property and equipment for the nine months ended September 30, 2020 and 2019 was $64.9 million and $112.2 million, respectively.~~

As a result of the impairment test on long-lived assets described in “Note 5 – Goodwill and Intangible Assets,” the Company recorded in the first quarter of 2020 an impairment charge of $140.3 million to reduce the carrying value of property and equipment from $414.1 million to $273.8 million, representing its fair value on the date of impairment.

Accrued expenses and other current liabilities ~~as of September 30, 2020 and December 31, 2019~~ consisted of the following (in thousands):

As of March 31, 2021, a total of 19,167,417 public warrants and private placement warrants were outstanding, and exercisable for an aggregate of 9,583,709 shares of Class A common stock. In addition, as of March 31, 2021, 5,288,885 Series A warrants were outstanding pursuant to the Series A preferred stock purchase agreement, and exercisable for 5,288,885 shares of Class A common stock.

The Company’s warrants are accounted for as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in the Company’s condensed consolidated statements of operations each reporting period.

The following tables present the Company's fair value hierarchy for liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 (in thousands):

Public warrants. The fair value of the public warrants are classified as Level 1 in the fair value hierarchy and valued using quoted market prices, as they are traded in active markets.

Private placement warrants. The fair value of the private placement warrants are classified as a Level 2 in the fair value hierarchy and determined using a Monte Carlo simulation model. As of March 31, 2021, the valuation for the private placement warrants used the following assumptions: exercise price of $5.75 per half share ($11.50 for full share equivalent), stock price of $1.04, expected remaining life of 2.61 years, volatility rate of 142.8%, risk-free interest rate of 0.3% and dividend rate of 0%.

Series A warrants. The fair value of the Series A warrants are classified as a Level 2 in the fair value hierarchy and determined using the Black-Scholes valuation method. As of March 31, 2021, the valuation for the Series A warrants used the following assumptions: exercise price of $7.66, expected remaining term of 4.7 years, volatility rate of 142.8%, risk-free interest rate of 0.8% and expected dividend rate of 0%.

The following table summarizes the activities, including changes in fair values of the Company’s warrant liabilities for the three months ended March 31, 2021 and 2020 (in thousands):

the Company entered into various insurance premium finance agreements ~~with~~amounting to $9.1 million, payable in equal monthly installments at a credit finance institution to pay the premiums on insurance policies for the Company’s directors’ and officers’ liability, general liability, workers’ compensation, umbrella, auto and pollution coverage needs.weighted average interest rate of 5.4%. These premium finance agreements ~~had total balances of $1.9 million~~are due within one year and ~~$8.1 million~~are recorded as ~~of September 30, 2020 and December 31, 2019, respectively.~~notes payable under current liabilities in the condensed consolidated balance sheets.

Long-term debt ~~as of September 30, 2020 and December 31, 2019~~ consisted of the following (in thousands):

During the first quarter of 2020, the Company made principal and interest payments amounting to $2.5 million and $24.3 million, respectively. The interest payments consisted of $17.9 million of accrued interest as of December 31, 2019, and $6.4 million of interest incurred in the first quarter of 2020.

On April 1, 2020, the Company, USWS LLC, as the borrower, and all of the other subsidiaries of the Company entered into a Second Amendment (the “Term Loan Amendment”) to the senior secured term loan with CLMG Corp., as administrative and collateral agent, and the lenders party thereto.

Pursuant to the Term Loan Amendment, the interest rate on amounts outstanding under the senior secured term loan was reduced to 0.0% and scheduled principal amortization payments were suspended for the period beginning April 1, 2020 and ending March 31, 2022. Beginning April 1, 2022, the senior secured term loan, as amended by the Term Loan Amendment, will resume incurring interest at the applicable LIBOR rate, subject to a 2.0% floor, plus 8.25%, and scheduled principal amortization payments equal to 0.5% of the initial principal balance of the term loans will resume on a quarterly basis commencing June 30, 2022. Additionally, pursuant to the Term Loan Amendment, certain other covenants were amended including, but not limited to, covenants relating to collateral inspections and excess cash flow, and the maturity date of the senior secured term loan was extended to December 5, 2025.

~~The Company accounted for the Term Loan Amendment as a troubled debt restructuring under ASC 470-60,~~ ~~Troubled Debt Restructurings by Debtors~~, due to the level of concession provided by the lenders under the senior secured term loan. Under this guidance, the future undiscounted cash flows of the senior secured term loan, as amended, exceeded the carrying value, and accordingly, 0 gain was recognized and no adjustment was made to the carrying value of the debt. Interest expense on the amended senior secured term loan was computed using a new effective rate that equated the present value of the future cash payments specified by the new terms with the carrying value of the debt under the original terms.

In exchange for entering into the Term Loan Amendment, the lenders under the senior secured term loan received an extension fee comprised of a $20.0 million cash payment, 1,050 shares of Series B preferred stock valued at $1.1 million based on the stated liquidation preference of $1,000 per share, and 5,529,622 shares of Class A common stock valued at $1.4 million based on the closing price of the Class A common stock at the date of issuance. The Series B preferred stock issued to the lenders under the senior secured term loan had the same terms as the Series B preferred stock issued to certain institutional investors as described in “Note 10 – Mezzanine Equity”.

The total fair value of cash and non-cash consideration transferred to the lenders under the senior secured term loan were accounted for as discount on debt issuance and amortized using the effective interest method.

On July 30, 2020, the Company, USWS LLC, as the borrower, and all of the other subsidiaries of the Company entered into a Second Amendment (the “Third Term Loan Amendment”) to the senior secured term loan with CLMG Corp., as administrative and collateral agent, and the lenders party thereto.

Pursuant to the Third Term Loan Amendment, the agents and the lenders agreed to make certain modifications and amendments to the senior secured term loan in order to, among other things, consent to the entry into the PPP Loan, subject to the amended terms and conditions specified for the same in the Third Term Loan Amendment.

Additionally, the Third Term Loan Amendment made certain modifications to the senior secured term loan which limits the Company’s ability to deploy and use collateral outside of the continental United States and other than in connection with oil and gas fracking and exploration without the prior consent of the administrative agent. In the Third Term Loan Amendment the Company further agreed to specific conditions and covenants regarding a turbine rental and services agreement entered into on June 19, 2020 and which affect the equipment which is the subject thereof.

In April and August of 2020, the Company, USWS LLC, and all of the other subsidiaries of the Company entered into the First Amendment (the “ABL Amendment”) and Second Amendment (the “Second ABL Amendment”), respectively, to the ABL Credit Facility with the lenders party thereto and Bank of America, N.A., as the administrative agent, swing line lender and letter of credit issuer.

Pursuant to the ABL Amendment, the aggregate revolving commitment under the ABL Credit Facility was reduced from $75.0 million to $60.0 million, the maturity date was extended from May 7, 2024 to April 1, 2025, and the interest rate margin applicable to borrowings under the ABL Credit Facility was increased by 0.50% per annum and a LIBOR floor of 1% was added. In addition, the borrowing base under the ABL Credit Facility was amended to include a FILO Amount (as defined in the ABL Amendment) which increases borrowing base availability by up to the lesser of (i) $4.0 million and (ii) 5.0% of the value of eligible accounts receivable, subject to scheduled monthly reductions. Loans under the ABL Credit Facility which are advanced in respect of the FILO Amount accrue interest at a rate that is 1.50% higher than the rate applicable to other loans under the ABL Credit Facility, and may be repaid only after all other loans under the ABL Credit Facility have been repaid.

Pursuant to the Second ABL Amendment, the aggregate revolving commitment under the ABL Credit Facility was reduced from $60.0 million to $50.0 million and certain modifications were made to eligible accounts in the borrowing base and to the applicable thresholds in the cash dominion trigger period and financial covenant trigger period, among other things. The Company’s option to request an increase in commitments under the accordion feature was also removed under the terms of the Second ABL Amendment.

~~Under ASC 470-50,~~ ~~Modifications and Extinguishments~~, the Company accounted for each of the ABL Amendment and Second ABL Amendment as a modification of debt. Under the ABL Amendment, the borrowing capacity of the amended ABL Credit Facility was greater than the borrowing capacity of the old ABL Credit Facility and there was no change in the lenders. Accordingly, any unamortized deferred financing costs associated with the old ABL Credit Facility and fees in connection with the amended ABL Credit Facility were deferred and amortized over its remaining term. Under the Second ABL Amendment, the borrowing capacity of the amended ABL Credit Facility was less than the borrowing capacity of the old ABL Credit Facility. Accordingly, unamortized deferred financing cost amounting to $0.2 million, which was calculated in proportion to the decrease in the borrowing capacity of the old Credit Facility, was written off and recorded as interest expense in the condensed consolidated statements of operations. Any fees in connection with the Second ABL Amendment were deferred and amortized over its remaining term.

The ABL Credit Facility is subject to a borrowing base which is calculated based on a formula referencing the Company’s eligible accounts receivables. As of ~~September 30, 2020,~~March 31, 2021, the borrowing base was ~~$25.7~~$50.0 million and the outstanding revolver loan balance was ~~$14.9~~$35.9 million, classified as long-term debt in the condensed consolidated balance sheets.

In ~~July~~November 2020, ~~the Company received an unsecured $10.0 million loan~~we entered into a Business Loan Agreement (the ~~“PPP~~“USDA Loan”) ~~that bears interest at a rate of 1.0% per annum and matures in five years under the Paycheck Protection Program from~~with a commercial ~~bank. The Paycheck Protection Program was established under~~bank pursuant to the United States Department of Agriculture, Business & Industry Coronavirus Aid, Relief, and Economic Security Act ~~(as amended,~~Guaranteed Loan Program, in the ~~“CARES Act”) and is administered by the U.S. Small Business Administration. Under the terms~~aggregate principal amount of ~~the CARES Act, loan recipients can apply for and be granted forgiveness for all or a portion of the loan. Forgiveness is determined, subject~~up to certain limitations, based on the use of the loan proceeds for payroll costs, interest on mortgages or other debt obligations, rents and utilities. At least 60% of the proceeds must be used for payroll costs. No assurance can be given that the Company will obtain forgiveness of the PPP Loan either in whole or in part. Accordingly, the Company accounted$25.0 million for the ~~PPP Loan as part~~purpose of providing long-term ~~debt in~~financing for eligible working capital. Interest payments are due monthly at the ~~condensed consolidated balance sheets.~~

In March 2020, the Company entered into an agreement with a lender to consolidate various individual equipment financing agreements, which represented substantially all of our equipment financing notes, with the same lender into four notes. The amendments under the consolidated equipment financing agreements pertain to maturity date, interest rate, and date of first installment payment. The Company evaluated the debt modification in accordance with ASC 470-50 and concluded that the debt modification did not result in a substantially different debt, and accordingly, no gain or loss was recorded.

~~The total outstanding balance of the consolidated equipment financing agreements as of September 30, 2020 was $13.7 million, payable in equal monthly installments through May 1, 2024, at an~~ interest rate of ~~5.7%.~~

~~The weighted average interest rate~~5.75% per annum beginning on December 12, 2020 but principal payments are not required until December 12, 2023. During the fourth quarter of ~~amounts outstanding~~2020, we received proceeds amounting to $22.0 million under the ~~equipment financing agreements was 5.7% and 6.4% per annum as of September 30, 2020 and December 31, 2019, respectively.~~ USDA Loan. In January 2021, we received the remaining proceeds amounting to $3.0 million.

Presented in the following table is a schedule of the repayment requirements of long-term debt as of ~~September 30, 2020~~March 31, 2021 (in thousands):

The following table summarizes the Company’s Series A Redeemable Convertible Preferred Stock, par value $0.0001 per share (“Series A preferred stock”) activities for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 (in thousands, except share amounts):

~~In accordance with~~During the ~~Series A preferred stock purchase agreement, subject to there being Series A preferred stock outstanding,~~three months ended March 31, 2021, the Company ~~will issue an~~issued 444,444 additional ~~4,399,992~~ warrants to the purchasers of Series A preferred stock in quarterly installments of 488,888 warrants beginning nine months after May 24, 2019. During the nine months ended September 30, 2020, the Company issued 1,466,664 additional warrants to the purchasers of Series A preferred stock.

~~In the third quarter of 2020, a holder of~~accordance with the Series A preferred stock converted 3,000 shares of Series A preferred stock and accrued dividends into 523,973 shares of Class A common stock pursuant to the certificate of designations authorizing and establishing the rights, preferences and privileges of the Series A preferred stock. Accordingly, the Company recorded a reduction of $4.7 million in the carrying value of the Series A preferred stock.purchase agreement.

As of ~~September 30, 2020, 52,000~~March 31, 2021, 50,000 shares of Series A preferred stock were outstanding and convertible into ~~9,146,254~~9,329,921 shares of Class A common stock, and dividends accrued and outstanding with respect to the Series A preferred stock were ~~$9.5~~$12.2 million and reflected in the carrying value of Series A preferred stock.

The following table summarizes the Company’s Series B Redeemable Convertible Preferred Stock, par value $0.0001 per share (“Series B preferred stock”) activities for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 (in thousands, except share amounts):

On March 31, 2020, the Company entered into a purchase agreement with certain institutional investors (collectively, the “Purchasers”), pursuant to which the Company agreed to issue and sell in a private placement 21,000In February 2021, 762 shares of Series B preferred stock ~~for an aggregate purchase price~~and related accrued dividends were converted into 2,745,778 shares of ~~$21.0 million. On April 1, 2020 (the “Series B Closing Date”),~~Class A common stock pursuant to the ~~Purchasers purchased~~certificate of designations authorizing and establishing the rights, preferences, and privileges of the Series B preferred stock. ~~Two~~Accordingly, the Company recorded a reduction of $0.8 million in the ~~purchasers~~carrying value of the Series B preferred stock were affiliates of Crestview Partners, which held, prior to the issuance, an aggregate 36.67% 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.

The Series B preferred stock ranks senior to the Class A common stock and Class B common stock and in parity with the Series A preferred stock, with respect to distributions. The Series B preferred stock has only specified voting rights, including with respect to the issuance or creation of senior securities, amendments to the Company’s Second Amended and Restated Certificate of Incorporation that negatively impact the rights of the Series B preferred stock and the payment of dividends on, or repurchase or redemption of, Class A common stock.

The Company has the option, but no obligation, to redeem the Series B preferred stock for cash. If the Company notifies the holders that it has elected to redeem the Series B preferred stock, a holder may instead elect to convert its shares of Series B preferred stock at the specified conversion price, which is initially $0.308 per share. The Series B preferred stock converted in response to a redemption notice will net settle for a combination of cash and Class A common stock.

Each holder of Series B preferred stock may convert all or any portion of its Series B preferred stock into Class A common stock based on the then-applicable liquidation preference, 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 based on the liquidation preference on the date of the conversion notice.

Following the eighteen-month anniversary of the Series B Closing Date, the Company may cause the conversion of all or any portion of the Series B preferred stock into Class A common stock if (i) the closing price of the Class A common stock is greater than 130% of the conversion price for 20 days over any 30-day trading period; (ii) the average daily trading volume of the Class A common stock exceeded 250,000 for 20 days over any 30-day trading period; and (iii) the Company has an effective registration statement on file with the Securities and Exchange Commission covering resales of the underlying Class A common stock to be received upon such conversion.

The Series B 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.

As of ~~September 30, 2020, 22,050~~March 31, 2021, 21,288 shares of Series B preferred stock were outstanding and convertible into ~~75,966,724~~77,965,385 shares of Class A common stock, and dividends accrued and outstanding with respect to the Series B preferred stock was ~~$1.3~~$2.8 million and reflected in the carrying value of Series B preferred 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. See “Note 1011 – Mezzanine Equity” for the discussion of preferred stock issued and outstanding.

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, 2020~~
March 31, 2021 and December 31, ~~2019,~~2020, there were ~~71,413,883~~90,068,356 and ~~62,857,624~~72,515,342 shares of Class A common stock issued and outstanding, respectively. At ~~September 30, 2020,~~March 31, 2021, 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.

On June 26, 2020, the Company entered into an Equity Distribution Agreement (the “ATM Agreement”) with Piper Sandler & Co. relating to the Company’s shares of Class A common stock. In accordance with the terms of the ATM Agreement, the Company may offer and sell over a period of time ~~up to $10.3 million~~shares of our Class A common stock. The ATM Agreement relates to an “at-the-market” offering program. Under the ATM Agreement, the Company will pay Piper Sandler an aggregate commission of up to 3% of the gross sales price per share of Class A common stock sold under the ATM Agreement. ~~The~~On March 19, 2021, the Company filed Supplement No. 1 to Prospectus Supplement dated June 26, 2020 to increase the number of shares of Class A common stock that we may offer in accordance with the terms of the ATM Agreement by an additional $39.7 million in excess of the amount covered by the prospectus of $10.3 million. During the three months ended March 31, 2021, the Company sold ~~400~~12,624,657 shares of Class A common stock for a total net proceeds of ~~two hundred~~$10.7 million and ~~two dollars and seventy six cents~~paid $0.3 million in commissions under ~~this~~the ATM ~~Agreement as of September 30, 2020. The Company paid six dollars and twenty four cents in commission with respect to this sale.~~Agreement.

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.

~~As of September 30, 2020 and December 31, 2019, there were 2,302,936 and 5,500,692 shares of Class B common stock issued and outstanding, respectively.~~

During the ~~nine~~three months ended ~~September 30, 2020, 3,197,756~~March 31, 2021, 2,302,936 shares of Class B common stock were converted to an equivalent number of shares of Class A common stock.

As of ~~September 30,~~March 31, 2021 and December 31, 2020, ~~9,994,635 public warrants~~there were 0 and ~~15,500,000 private placement warrants were~~2,302,936 shares of Class B common stock issued and outstanding, ~~and exercisable~~respectively.

During the three months ended March 31, 2021, the remaining noncontrolling interest holders of USWS Holdings surrendered all of their respective shares in exchange for ~~an aggregate of 12,747,318 shares of~~the Company’s Class A common stock. ~~In addition,~~Accordingly, USWS Holdings became the Company’s wholly owned subsidiary as of ~~September 30, 2020, 4,399,997 warrants were outstanding pursuant to the Series A preferred stock purchase agreement, and exercisable for 4,399,997 shares of Class A common stock.~~

The Company’s noncontrolling ownership interest in consolidated subsidiaries is presented in the condensed consolidated balance sheet within stockholders’ equity (deficit) as a separate component and represents approximately 3% ownership of USWS Holdings as of September 30, 2020.

An aggregate of 8,160,500 shares of Class A common stock were initially available for issuance under the 2018 Long Term Incentive Plan (“LTIP”). Shares issued under the LTIP are further discussed in “Note 13 - Share-Based Compensation”. The aggregate number of shares available for issuance as of September 30, 2020 was 5,053,961.March 31, 2021.

Basic earnings (loss) per share is computed by dividing income (loss) 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 and Series B preferred stock, conversion of Class B common stock, ~~and~~ vesting of restricted shares of Class A common ~~stock.~~stock, and issuance of Class A common stock associated with the deferred stock units and certain performance awards.

Basic and diluted net income (loss) per share excludes the income (loss) attributable to and shares associated with the 1,609,677 shares of Class A common stock that are subject to cancellation on November 9, 2024 if certain market conditions have not been met. The Company has included in the calculation accrued dividends on Series A and Series B preferred stock and related deemed ~~dividends resulting from the amortization of discounts related to the Series A preferred stock.~~and imputed dividends.

The following table sets forth the calculation of basic and diluted earnings (loss) per share for the periods indicated based on the weighted average number of shares of Class A common stock outstanding for the period (in thousands, except share and per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2020			2019			2020			2019			2021			2020 (As Restated)
Basic Net Income (Loss) Per Share
Numerator:
Net loss attributable to U.S. Well Services, Inc.	$	(15,937	)	$	(16,969	)	$	(206,441	)	$	(60,720	)	$	(20,566	)	$	(165,818	)
Net loss attributable to cancellable Class A common stock		376			527			5,109			1,924			411			4,432
Basic net loss attributable to U.S. Well Services, Inc. shareholders		(15,561	)		(16,442	)		(201,332	)		(58,796	)		(20,155	)		(161,386	)
Dividends accrued on Series A preferred stock		(1,854	)		(1,670	)		(5,450	)		(2,330	)		(1,813	)		(1,751	)
Dividends accrued on Series B preferred stock		(681	)		-			(1,347	)		-			(711	)		-
Deemed and imputed dividends on Series A preferred stock		(467	)		(4,406	)		(11,220	)		(5,966	)		(464	)		(6,972	)
Deemed and imputed dividends on Series B preferred stock														(4,168	)		-
Basic net loss attributable to U.S. Well Services, Inc. Class A common shareholders	$	(18,563	)	$	(22,518	)	$	(219,349	)	$	(67,092	)	$	(27,311	)	$	(170,109	)

Denominator:
Weighted average shares outstanding		68,276,671			51,859,283			65,040,390			50,791,787			80,586,777			60,229,277
Cancellable Class A common stock		(1,609,677	)		(1,609,677	)		(1,609,677	)		(1,609,677	)		(1,609,677	)		(1,609,677	)
Basic and diluted weighted average shares outstanding		66,666,994			50,249,606			63,430,713			49,182,110			78,977,100			58,619,600
Basic and diluted net income (loss) per share attributable to Class A common shareholders	$	(0.28	)	$	(0.45	)	$	(3.46	)	$	(1.36	)	$	(0.35	)	$	(2.90	)

A summary of securities excluded from the computation of diluted earnings per share is presented below for the applicable periods:

⁽¹⁾ $198 was presented as part of cost of services and $1,453 was presented as part of selling, general and administrative expenses in the condensed consolidated statement of operations.

⁽²⁾ $918 was presented as part of cost of services and $1,160 was presented as part of selling, general and administrative expenses in the condensed consolidated statement of operations.

The following table summarizes the restricted stock activity for the ~~nine~~three months ended ~~September 30, 2020:~~March 31, 2021:

As of March 31, 2021, the total unrecognized compensation cost related to restricted stock was $6.4 million which is expected to be recognized over a weighted-average period of 1.91 years.

The following table summarizes the stock option activity for the ~~nine~~three months ended ~~September 30, 2020:~~March 31, 2021:

As of ~~September 30, 2020,~~March 31, 2021, the total unrecognized compensation cost related to ~~stock-based compensation grants under the LTIP~~stock options was ~~$10.7 million. We expect~~$1.7 millionwhich is expected to ~~recognize these costs~~be recognized over a weighted average period of ~~2.4~~2.0 years.

The following table summarizes the Company established the U.S. Well Services 401(k) Plan. The Company matched 100% of employee contributions up to 6% of the employee’s salary, subject to cliff vesting after two years of service. At the end of the first quarter of 2020, the Company suspended its match of employee contributions. ForDSUs activity for the three months ended ~~September 30, 2020 and 2019, matching contributions were $0.0~~March 31, 2021:

As of March 31, 2021, the total unrecognized compensation cost related to DSUs was $1.7 million ~~and $1.1 million, respectively. For~~which is expected to be recognized over a weighted average period of 1.75 years.

The Company accounted for the ~~nine~~Pool A Award under liability accounting as a result of the fixed monetary amount that could be settled either in cash or a variable number of shares of the Company’s Class A common stock. The Pool A Award became fully vested as of January 1, 2021. Since the settlement will not occur until the fifth anniversary of the grant date, the Company considered the delayed settlement as a post-vesting restriction which impacted the determination of grant-date fair value of the award.

As of March 31, 2021, the fair value of the Pool A Award liability was remeasured to $2,414, which was estimated using a risk-adjusted discount rate reflecting the weighted average cost of capital of similarly traded public companies.

During the three months ended ~~September 30, 2020 and 2019, matching contributions were $1.0 million and $3.8 million,respectively. The matching contributions were included in~~March 31, 2021, the Company recorded additional compensation cost of ~~services and selling, general and administrative expenses~~$0.1 million, which was the change in fair value of the Pool A Award liability.

On January 1, 2021, one-third of the fair value of the Pool B Award vested in the ~~condensed consolidated statement~~amount of ~~operations.~~$1.1 million. As of March 31, 2021, the unvested fair value of the Pool B Award was $2.2 million.

As of March 31, 2021, the total unrecognized compensation cost related to Pool B Award was $2.0 million which is expected to be recognized over a weighted average period of 1.75 years.

On March 27, 2020, the President signed the CARES Act into law. The CARES Act contains several corporate income tax provisions, including, among other things, providing a 5-year carryback of net operating loss (“NOL”) tax carryforwards generated in tax years 2018, 2019, and 2020, removing the 80% taxable income limitation on utilization of those NOLs if carried back to prior tax years or utilized in tax years beginning before 2021, temporarily liberalizing the interest deductions rules under Section 163(j) of the Tax Cuts and Jobs Act of 2017, and making corporate alternative minimum tax credits immediately refundable. During the second quarter of 2020, the Company filed an application to carry back its 2018 NOLs, claiming a refund of approximately $0.8 ~~million. The Company continues to evaluate other potential effects~~million, which remains outstanding as of ~~the CARES Act.~~March 31, 2021.

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~~three months ended ~~September 30, 2020~~March 31, 2021 was ~~(0.38)~~(0.00)%. ~~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 condensed 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 condensed 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 0t record any liabilities for uncertain tax positions as of ~~September 30, 2020~~March 31, 2021 or December 31, ~~2019.~~2020. 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 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.

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.

The Company was named a defendant in a case filed on January 14, 2019 in the Superior Court of the State of Delaware styled Smart Sand, Inc. v. U.S. Well Services LLC, C.A. 19C-01-144 PRW. Smart Sand alleges that the Company breached a multi-year contract under which Smart Sand supplied frac sand to the Company. Smart Sand claims damages of approximately $54 million. The Company denies that it breached the contract, has alleged that Smart Sand breached the contract first, and has asserted counterclaims for the misuse of the Company’s confidential information. The Company also asserts that the contract contains unenforceable penalty provisions. The case was tried to the Court during December 2020 and when trial concluded, the Court requested post-trial briefing. No prediction can be made as to the outcome of the case at this time nor can the Company reasonably estimate the potential losses or range of losses resulting from this litigation.

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, 2020,~~March 31, 2021, we estimated and accrued for a shortfall in purchase quantities. This accrual is presented as part of accrued liabilities on the condensed consolidated balance sheets.

~~The following is a schedule~~As of March 31, 2021, the Company’s contracted volumes in dollars ~~and~~was $12.0 million. The Company’s minimum commitments ~~under the proppant supply purchase agreements as of September 30, 2020~~ ~~(in thousands)~~:

~~The minimum commitments represent~~was $10.0 million, which represents the aggregate amounts that we would be obligated to pay ~~in the event~~if we procured no additional proppant under the contracts ~~subsequent to September 30, 2020.~~

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, 2020, 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, and as such no prediction can be made as to the outcome of the case at this time and we are unable to reasonably estimate the potential losses or range of losses resulting from this litigation, if any.after March 31, 2021.

The Company has various operating leases for facilities with terms ranging from 24 to 76 months.

Rent expense was $0.3 million and $0.7 million for ~~each of~~ the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~respectively, of which ~~$0.4~~$0.2 million and ~~$0.6~~$0.5 million, respectively, are recorded as part of cost of services and ~~$0.3~~$0.1 million, and ~~$0.1~~$0.2 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, 2020 and 2019 was $1.8 million and $2.0 million, respectively, of which $1.1 million and $1.6 million, respectively, are recorded as part of cost of services and $0.7 million and $0.4 million, respectively, are recorded as part of selling, general 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, 2020~~March 31, 2021 (in thousands):

On April 1, 2020, the Company entered into an agreement to extend the lease on one of its facilities. The extended term of the lease is for a period of 36 months commencing on April 1, 2020, with rent throughout the term totaling $0.7 million.

The total amount of future minimum lease payments related to the capital leases as of ~~September 30, 2020~~March 31, 2021 was ~~$6.4~~$0.9 million, ~~all~~ of which $0.2 million is due in the remainder of ~~2020. This~~2021 and in each of the years in 2022, 2023 and 2024, and $0.1 million is due in 2025. The total payments include a nominal amount ~~includes~~of imputed ~~interest totaling $0.2 million.~~interest.

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 ~~$0.3~~$0.5 million and ~~$0.6~~$0.2 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, and was reported as accrued expenses in the condensed consolidated balance sheets. The Company believes that the liabilities recorded are appropriate based on the known facts and circumstances and does not expect further losses materially in excess of the amounts already accrued for existing claims.

On April 1, 2020, Crestview Partners purchased 11,500 shares of Series B preferred stock for a total payment of $11.5 million. The TCW Group, Inc. purchased 6,500 shares of Series B preferred stock for a total payment of $6.5 million and David Matlin, a member of the Company’s Board of Directors, purchased 1,878 shares of Series B preferred stock for a total payment of $1.9 million.

On ~~November 5, 2020, pursuant to the Amended and Restated U.S. Well Services, Inc. 2018 Stock Incentive Plan (the “A&R LTIP”),~~April 23, 2021, the Company ~~made grants~~entered into an Assignment of ~~deferred stock units~~Claim Agreement (“Assignment”) with a third-party (“Assignee”), whereby the Company transferred to Assignee all right, title, and interest in its claim in the amount of $14.5 million against a certain ~~performance incentive awards that will provide~~customer, in connection with such customer’s bankruptcy. The Assignment was for ~~potential future payments to be made to certain key employees~~consideration of $2.5 million, which the Company received on April 26, 2021. As of March 31, 2021, the allowance for doubtful accounts balance and the related receivables were written off by $12.0 million, which is the unrealized amount of the Company. The A&R LTIP, which was approved by the Board of Directors, upon the recommendation of the Compensation Committee of the Board of Directors on September 21, 2020, is expected to be included in the Company’s Proxy Statement for its 2021 Annual Meeting of Stockholders for approval by the Company’s stockholders. The details of these grants are further discussed in “Part II, Item 5 – Other Information”. The Company is still in the process of evaluating the accounting impact of these grants.

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~The~~You should read the following ~~management~~ discussion and analysis ~~("MD&A")~~ of ~~the~~our financial condition and results of operations ~~of U.S. Well Services, Inc.~~ together ~~with its subsidiaries for the three and nine months ended September 30, 2020 should be read in conjunction~~ with our unaudited condensed consolidated financial statements and ~~accompanying~~the related notes in Item 1. "Financial Statements" contained herein and our audited consolidated financial statements as of December 31, 2020, included ~~elsewhere~~in our Amendment No. 1 to Annual Report on Form 10-K/A for the year ended December 31, 2020 (our "Amended Annual Report"), as filed with the Securities and Exchange Commission (the "SEC") on May 17, 2021. The information provided below supplements, but does not form part of, our unaudited condensed consolidated financial statements. This discussion contains forward-looking statements that are based on the views and beliefs of our management, as well as assumptions and estimates made by our management. Actual results could differ materially from such forward-looking statements as a result of various risk factors, including those that may not be in the control of management. Factors that could cause or contribute to these differences include those discussed under "Forward-Looking Statements" in this Quarterly Report on Form ~~10-Q.~~10-Q and in our Amended Annual Report.

This Quarterly Report on Form 10-Q (this "Report") contains “forward-looking statements” as defined in Section 27A of the United States Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements usually relate to future events, conditions and anticipated revenues, earnings, cash flows or other aspects of our operations or operating results. Forward-looking statements are often identified by words such as “believes,” “expects,” “intends,” “estimates,” “projects,” “anticipates,” “will,” “plans,” “may,” “should,” “would,” “foresee,” or the negative thereof. The absence of these words, however, does not mean that these statements are not forward-looking. These statements are based on our current ~~expectation, belief~~expectations, beliefs and assumptions concerning future developments and business conditions and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All of our forward-looking statements involve risks and uncertainties (some of which are significant or beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. These factors include geological, operating and economic factors and declining prices and market conditions, including reduced expected or realized oil and gas prices (including the ~~recent~~ significant decline in oil prices since the beginning of 2020) and demand for oilfield services and changes in supply or demand for maintenance, repair and operating products, equipment and service; the effectiveness of management's strategies and decisions; our ability to obtain financing, raise capital and continue as a going concern; our ability to implement our internal growth and acquisition growth strategies; general economic and business conditions specific to our primary customers; our ability to collect accounts receivable; compliance with our debt agreements and equity-related securities; volatility in market prices; our ability to satisfy the continued listing requirements of Nasdaq with respect to our Class A common stock and warrants or to cure any continued listing standard deficiency with respect thereto; changes in government regulations; our ability to effectively integrate businesses we may acquire; new or modified statutory or regulatory requirements; availability of materials and labor; inability to obtain or delay in obtaining government or third-party approvals and permits; non-performance by third parties of their contractual obligations; unforeseen hazards such as natural disasters, catastrophes and severe weather conditions, including floods, hurricanes and earthquakes; public health crises, such as a pandemic, including the ~~recent~~ COVID-19 pandemic; ~~and~~ acts of war or terrorist acts and the governmental or military response thereto; and cyber-attacks adversely affecting our operation. This Report identifies other factors that could cause such differences. There can be no assurance that these are all of the factors that could cause actual results to vary materially from the forward-looking statements. Factors that could cause or contribute to such differences also include, but are not limited to, those discussed in our filings with the SEC, including under "Risk Factors" in this Report and in our Amended Annual ~~Report on Form 10-K filed with the Securities and Exchange Commission on March 5, 2020.~~Report. We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We assume no obligation and do not intend to update these forward-looking statements. Unless the context otherwise requires, references in this Report to the “Company”, “USWS”, “we”, or “our” shall mean U.S. Well Services, Inc. and its subsidiaries.

We provide high-pressure, hydraulic fracturing services in oil and natural gas basins. Both our conventional and Clean Fleet^® hydraulic fracturing fleets are among the most reliable and highest performing fleets in the industry, with the capability to meet the most demanding pressure and pump rate requirements. We operate in many of the active shale and unconventional oil and natural gas basins of the United States and our clients benefit from the performance and reliability of our equipment and personnel. Specifically, all of our fleets operate on a 24-hour basis and have the ability to withstand ~~the~~ high utilization rates, which results in more efficient operations. Our senior management team has extensive industry experience providing pressure pumping services to exploration and production companies across North America.

This Item 2 gives effect to the restatement of our unaudited condensed consolidated financial statements as more fully described in Note 2 in the Notes to the Condensed Consolidated Financial Statements.

We generate revenue by providing hydraulic fracturing services to our customers. We own and operate a fleet of hydraulic fracturing units to perform these services. We seek to enter into contractual arrangements with our customers or fleet dedications, which establish pricing terms for a fixed duration. Under the terms of these agreements, we charge our customers base monthly rates, adjusted for activity and provision of materials such as proppant and chemicals, or we charge a variable rate based on the nature of the job including pumping time, well pressure, sand and chemical volumes and transportation.

The principal costs involved in conducting our hydraulic fracturing services are labor, maintenance, materials, and transportation costs. A large portion of our costs are variable, based on the number and requirements of hydraulic fracturing jobs. We manage our fixed costs, other than depreciation and amortization, based on factors including industry conditions and the expected demand for our services.

Materials include the cost of sand delivered to the basin of operations, chemicals, and other consumables used in our operations. These costs vary based on the quantity and quality of sand and chemicals utilized when providing hydraulic fracturing services. Transportation represents the costs to transport materials and equipment from receipt points to customer locations. Labor costs include payroll and benefits related to our field crews and other ~~employees, as well as severance costs. A majority~~employees. Most of our employees are paid on an hourly basis. ~~During the nine months ended September 30, 2020, our labor cost included approximately $2.3 million of severance expense.~~ Maintenance costs include preventative and other repair costs that do not require the replacement of major components of our hydraulic fracturing fleets. Maintenance and repair costs are expensed as incurred. ~~During the nine months ended September 30, 2020, our maintenance costs included $0.4 million related to the disposal of obsolete inventory.~~

The following table presents our cost of services for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (in thousands):

The global health and economic crisis sparked by the COVID-19 pandemic and the associated decrease in commodity prices has significantly impacted industry activity since late in the first quarter of 2020. Weaker economic activity and lower demand for crude oil, driven by the persistence of the COVID-19 pandemic, ~~has~~ adversely impacted our business, resulting in a reduction in our active fleet count and fleet utilization ~~levels. As such, we are experiencing considerable uncertainty in our near-term business prospects and ability to forecast future financial performance.~~

~~In response to the challenging business and operating environment created by the COVID-19 pandemic, we have taken proactive measures to safeguard the physical health~~levels throughout much of our employees and the financial health of our business. Employees capable of working from home were mandated to do so until conditions improve making it safe for their return on a voluntary basis. Additionally, all individuals entering into a Company facility or work location undergo a screening process.2020. Beginning in ~~February 2020, we took swift action to reduce costs, rationalizing~~ the size of the organization to match activity through reductions-in-force, furloughing employees, reducing compensation levels across the board, and closing facilities. We also worked with customers to accelerate the collections of accounts receivables in certain cases and worked with suppliers to reduce our cost of goods and ensure the availability of supply. During the secondfourth quarter of 2020, ~~we completed an offering~~crude oil prices began rising considerably, and averaged over $58 per barrel during the first quarter of ~~redeemable convertible preferred equity concurrent with~~2021. As commodity prices have improved, demand for hydraulic fracturing services and the ~~amendment~~number of ~~certain terms~~working fracturing fleets have also increased significantly.

Results of ~~our debt instruments in order to provide us with greater liquidity and financial flexibility (See “Note 9 - Debt” and “Note 10 – Mezzanine Equity”~~Operations

	Three Months Ended March 31,
	2021			% ⁽¹⁾	2020 (As Restated)			% ⁽¹⁾	Variance			% Variance
Revenue	$	76,258		100.0%	$	112,035		100.0%	$	(35,777	)	(31.9)%
Costs and expenses:
Cost of services (excluding depreciation and amortization)		62,631		82.1%		85,153		76.0%		(22,522	)	(26.4)%
Depreciation and amortization		11,106		14.6%		32,008		28.6%		(20,902	)	(65.3)%
Selling, general and administrative expenses		7,390		9.7%		19,058		17.0%		(11,668	)	(61.2)%
Impairment of long-lived assets		-		0.0%		147,543		131.7%		(147,543	)	(100.0)%
Loss on disposal of assets		2,436		3.2%		4,244		3.8%		(1,808	)	(42.6)%
Loss from operations		(7,305	)	(9.6)%		(175,971	)	(157.1)%		168,666		*⁽²⁾
Interest expense, net		(6,183	)	(8.1)%		(7,956	)	(7.1)%		1,773		(22.3)%
Change in fair value of warrant liabilities		(7,151	)	(9.4)%		6,553		5.8%		(13,704	)	*⁽²⁾
Other income		29		0.0%		6		0.0%		23		*⁽²⁾
Income tax expense (benefit)		-		0.0%		(750	)	(0.7)%		750		*⁽²⁾
Net loss	$	(20,610	)	(27.0)%	$	(176,618	)	(157.6)%	$	156,008		(88.3)%

⁽¹⁾ As a percentage of revenues. Percentage totals or differences in the ~~Notes to Condensed Consolidated Financial Statements). In addition, we have also taken advantage of relief offered by~~above table may not equal the ~~CARES Act with the deferral~~sum or difference of the ~~employer portion of social security taxes, the carryback of our 2018 NOLs~~components due to ~~prior year taxable income and in July 2020, the receipt of a $10.0 million PPP Loan. We also expect to substantially limit growth capital expenditures for the foreseeable future.~~rounding.

We expect hydraulic fracturing activity to remain depressed relative to historic levels throughout the remainder of 2020 but believe that industry activity should accelerate as overall economic conditions improve.

Results of Operations

Three months ended September 30, 2020, compared to three months ended September 30, 2019

(in thousands, except percentages)

Three Months Ended September 30,

2020

% ⁽¹⁾

2019

% ⁽¹⁾

Variance

% Variance

Revenue

$
44,042

100.0%

$
130,884

100.0%

$
(86,842
)

(66.4)%

Costs and expenses:

Cost of services (excluding depreciation
and amortization)

31,157

70.7%

90,792

69.4%

(59,635
)

(65.7)%

Depreciation and amortization

16,393

37.2%

39,723

30.3%

(23,330
)

(58.7)%

Selling, general and administrative expenses

6,098

13.8%

8,216

6.3%

(2,118
)

(25.8)%

Loss on disposal of assets

755

1.7%

4,976

3.8%

(4,221
)

(84.8)%

Loss from operations

(10,361
)

(23.5)%

(12,823
)

(9.8)%

2,462

* ⁽²⁾

Interest expense, net

(5,744
)

(13.0)%

(8,449
)

(6.5)%

2,705

(32.0)%

Other income

30

0.1%

62

0.0%

(32
)

* ⁽²⁾

Income tax expense (benefit)

(87
)

(0.2)%

39

0.0%

(126
)

* ⁽²⁾

Net loss

$
(15,988
)

(36.3)%

$
(21,249
)

(16.2)%

$
5,261

* ⁽²⁾

⁽¹⁾ As a percentage of revenues. Percentage totals or differences in the above table may not equal the sum or difference of the components due to rounding.

⁽²⁾ Not meaningful.

Revenue. The decrease in revenue was primarily attributable to the decline in business activity ~~as our~~and lower pricing levels for hydraulic fracturing services. Our average active fleet count during the period decreased to 510 fleets compared to 911 fleets in the prior comparable period. Revenue was also affected to a lesser extent by the continuing trend of customers self-sourcing lower margin consumables such as sand, chemicals, and sand transportation. We ~~anticipate revenue to continue to be depressed in future quarters as long as the industry conditions discussed in “Significant Trends” above continue. In addition, we~~ expect the trend of customers self-sourcing consumables to continue, resulting in lower revenues from consumables as compared to prior periods in which we provided these consumables to customers.

Cost of services, excluding depreciation and amortization. The decrease in cost of services, excluding depreciation and amortization, was attributable to the decline in business activity and ~~significant cost cutting measures implemented in response to current industry conditions as described in “Significant Trends” above as well as~~ a reduction in consumables costs ~~as a result of~~due to increased customer self-sourcing. Similar to revenues, we anticipate cost of services, excluding depreciation and amortization, to remain at reduced levels ~~as long as the industry conditions and cost cutting measures described~~mainly due to lower consumables costs compared to prior periods in ~~“Significant Trends” above continue.~~which we provided these consumables to customers.

Depreciation and amortization. The decrease in depreciation and amortization was primarily due to the lower cost basis of depreciating long-lived assets ~~as a result~~because of impairment losses recorded in the first quarter of ~~2020, and fully depreciated long-lived assets since the end of the prior comparable quarter.~~2020.

Selling, general and administrative expenses. The decrease in selling, general, and administrative expenses was primarily attributable to ~~reductions-in-force, furloughing employees,~~our recording of a bad debt reserve of $9.0 million in the first quarter of 2020 due to the uncertainty in collectability of billed amounts from customers weakened by the collapse in crude oil prices. Additionally, compensation and ~~reduction~~benefits costs decreased by approximately $1.3 million due to reduced headcount in the current period.

Impairment of ~~employee compensation levels~~long-lived assets. As a result of impairment tests that we performed in ~~response~~the first quarter of 2020, we determined that the carrying value of long-lived assets exceeded their fair value. Therefore, we recorded an impairment charge in the first quarter of 2020 amounting to ~~current industry conditions as described~~$147.5 million to reduce the carrying value of property and equipment and finite-lived intangible assets to fair value. No such impairment charge was recorded in ~~“Significant Trends” above.~~the first quarter of 2021.

Loss on disposal of assets. The amount of loss on disposal of assets fluctuates period over period due to differences in the operating conditions of our hydraulic fracturing equipment, such as wellbore pressure and rate of barrels pumped per minute, that impact the timing of disposals of our hydraulic fracturing pump components and the amount of gain or loss recognized. The decrease in the loss on disposal of assets was primarily attributable to the significant decrease in loss on disposal related to fluid ends, due to a change in

accounting estimate related to their useful ~~life (See Property and Equipment in “Note 2 – Significant Accounting Policies” in the Notes to Condensed Consolidated Financial Statements).~~life. Beginning in the second quarter of 2020, fluid ends are expensed as they ~~are~~were used in operations, due to their shortened useful life estimate.

Interest expense, net. The decrease was primarily attributable to a lower average debt balance and lower effective interest rates compared to the prior period.

Nine months ended September 30, 2020, compared to nine months ended September 30, 2019

(in thousands, except percentages)

Nine Months Ended September 30,

2020

% ⁽¹⁾

2019

% ⁽¹⁾

Variance

% Variance

Revenue

$
195,914

100.0%

$
422,075

100.0%

$
(226,161
)

(53.6)%

Costs and expenses:

Cost of services (excluding depreciation
and amortization)

145,321

74.2%

307,841

72.9%

(162,520
)

(52.8)%

Depreciation and amortization

65,759

33.6%

117,888

27.9%

(52,129
)

(44.2)%

Selling, general and administrative expenses

30,376

15.5%

24,474

5.8%

5,902

24.1%

Impairment of long-lived assets

147,543

75.3%

-

0.0%

147,543

100.0%

Loss on disposal of assets

5,852

3.0%

15,884

3.8%

(10,032
)

(63.2)%

Loss from operations

(198,937
)

(101.5)%

(44,012
)

(10.4)%

(154,925
)

* ⁽²⁾

Interest expense, net

(19,357
)

(9.9)%

(21,384
)

(5.1)%

2,027

(9.5)%

Loss on extinguishment of debt

-

0.0%

(12,558
)

(3.0)%

12,558

* ⁽²⁾

Other income

81

0.0%

1,774

0.4%

(1,693
)

* ⁽²⁾

Income tax expense (benefit)

(824
)

(0.4)%

469

0.1%

(1,293
)

* ⁽²⁾

Net loss

$
(217,389
)

(111.0)%

$
(76,649
)

(18.2)%

$
(140,740
)

* ⁽²⁾

⁽¹⁾ As a percentage of revenues. Percentage totals or differences in the above table may not equal the sum or difference of the components due to rounding.

⁽²⁾ Not meaningful.

~~Revenue~~. The decrease in revenue was primarily attributable to the decline in business activity, as our average active fleet count during the period decreased to 7 fleets compared to 11 fleets in the prior comparable period. The decrease in revenue was also attributable to an increased amount of self-sourcing by customers of lower-margin consumables such as sand, chemicals, and sand transportation. We expect the industry trend of E&P companies self-sourcing to continue, resulting in decreased revenues from consumables as compared to prior years in which we provided these consumables to our customers. In addition, we anticipate revenue to continue to be depressed in future quarters as long as industry conditions discussed in “Significant Trends” above continue.

~~Cost of services, excluding depreciation and amortization~~. The decrease in cost of services, excluding depreciation and amortization, was primarily attributable to the decline in business activity and significant cost cutting measures implemented in response to current industry conditions as described in “Significant Trends” above. The decrease in cost of services, excluding depreciation and amortization, was also due in part to the change in revenue mix discussed above, offset in part by $2.3 million of severance recorded in the current period. Similar to revenues, we anticipate cost of services, excluding depreciation and amortization to remain at reduced levels as long as the industry conditions and cost cutting measures described in “Significant Trends” above continue.

~~Depreciation and amortization.~~ The decrease in depreciation and amortization was primarily due to the lower cost basis of depreciating long-lived assets as a result of impairment losses recorded in the first quarter of 2020, and fully depreciated long-lived assets since the end of the prior comparable period.

~~Selling, general and administrative expenses~~. The increase in selling, general, and administrative expenses was primarily attributable to our recording of a bad debt reserve of $9.0 million in the first quarter of 2020 due to growing uncertainty as to collectability of billed amounts from customers weakened by the recent collapse in crude oil prices. We are continuing to work with our customers on collecting these receivables. The increase in selling, general, and administrative expenses was offset in part by reduction of expenses due to reductions-in-force, furloughing employees, and reduction of employee compensation levels in response to current industry conditions as described in “Significant Trends” above.

~~Impairment of long-lived assets.~~ As a result of impairment tests that we performed in the first quarter of 2020, we determined that the carrying value of long-lived assets exceeded their fair value, and recorded an impairment charge to reduce the carrying value of property and equipment, and finite-lived intangible assets to fair value (~~See “Note 5 – Goodwill and Intangible Assets” and “Note 6 – Property and Equipment, Net” in the Notes to Condensed Consolidated Financial Statements).~~

~~Loss on disposal of assets~~. The amount of loss on disposal of assets fluctuates period over period due to differences in the operating conditions of our hydraulic fracturing equipment, such as wellbore pressure and rate of barrels pumped per minute, that impact the timing of disposals of our hydraulic fracturing pump components and the amount of gain or loss recognized. The decrease in the loss on disposal of assets was primarily attributable to the significant decrease in loss on disposal related to fluid ends, due to a change in accounting estimate related to their useful life (See Property and Equipment in “Note 2 – Significant Accounting Policies” in the Notes to Condensed Consolidated Financial Statements). Beginning in the second quarter of 2020, fluid ends are expensed as they are used in operations, due to their shortened useful life estimate.

Our primary sources of liquidity and capital resources are cash on the balance sheet, cash flow generated from operating activities, proceeds from the issuance of equity, and borrowings ~~under our revolving credit facility, senior secured term loan~~ and ~~PPP Loan, and~~ borrowing capacity under our revolving credit facility.

On June 26, 2020, the Company entered into an Equity Distribution Agreement (the “ATM Agreement”) with Piper Sandler & Co. relating to the Company’s shares of Class A common stock. In accordance with the terms of the ATM Agreement, the Company may offer and sell over a period of time, shares of our Class A common stock. The ATM Agreement relates to an “at-the-market” offering program. Under the ATM Agreement, the Company will pay Piper Sandler an aggregate commission of up to 3% of the gross sales price per share of Class A common stock sold under the ATM Agreement. On March 19, 2021, the Company filed Supplement No. 1 to Prospectus Supplement dated June 26, 2020 to increase the number of shares of Class A common stock that we may offer in accordance with the terms of the ATM Agreement by an additional $39.7 million in excess of the amount covered by the prospectus of $10.3 million. During the three months ended March 31, 2021, the Company sold 12,624,657 shares of Class A common stock for a total net proceeds of $10.7 million and paid $0.3 million in commissions under the ATM Agreement.

In November 2020, we entered into a ~~purchase agreement~~Business Loan Agreement (the “USDA Loan”) with ~~certain institutional investors (collectively, the “Purchasers”),~~a commercial bank pursuant to ~~which we agreed~~the United States Department of Agriculture, Business & Industry Coronavirus Aid, Relief, and Economic Security Act Guaranteed Loan Program, in the aggregate principal amount of up to ~~issue and sell in a private placement 21,000 shares~~$25.0 million for the purpose of ~~Series B Redeemable Convertible preferred stock, par value $0.0001 per share (“Series B preferred stock”),~~providing long-term financing for an aggregate purchase price of $21.0 million. On April 1, 2020, the Purchasers purchased the Series B preferred stock. We used substantially all of the proceeds from the Series B preferred stock to obtain the amendment on our senior secured term loan described below.

~~On April 1, 2020, we entered into agreements to amend our existing senior secured term loan and revolving credit facility. Pursuant to the amendment to our senior secured term loan,~~eligible working capital. Interest payments are due monthly at the interest rate of 5.75% per annum beginning on December 12, 2020 but principal payments are not required until December 12, 2023. During the ~~outstanding loan was reduced~~fourth quarter of 2020, we received proceeds amounting to 0.0% and the scheduled principal amortization payments were suspended for the period beginning April 1, 2020 and ending March 31, 2022. In addition, the maturity date of the senior secured term loan was extended to December 5, 2025. Pursuant to the amendment to our revolving credit facility, the aggregate revolving commitment was reduced from $75.0$22.0 million to $60.0 million, the maturity date was extended from May 7, 2024 to April 1, 2025, and the interest rate margin applicable to borrowings under our revolving credit facility was increased by 0.50% per annum. In addition, the borrowing base under the ~~ABL Facility was amended~~USDA Loan. In January 2021, we received the remaining proceeds amounting to ~~include a FILO Amount, which increases borrowing base availability by up to the lesser of (i) $4.0 million and (ii) 5.0% of the value of eligible accounts receivables,~~$3.0 million.

The USDA Loan is subject to ~~scheduled monthly reductions. Advances under the FILO amount accrue interest at~~certain financial covenants. The Company is required to maintain a ~~rate that is 1.50% higher than the rate applicable to other loans under the revolving credit facility and may be repaid only after all other revolving credit facility loans have been repaid.~~

In August 2020, we entered into an amendment to our revolving credit facility pursuant to which the aggregate revolving commitment under the facility was reduced from $60.0 million to $50.0 million and certain modifications were made to eligible accountsDebt Service Coverage Ratio (as defined in the ~~borrowing base and~~USDA Loan) of not less than 1.25:1, to be monitored annually, beginning in calendar year 2021. Additionally, the ~~applicable thresholds~~Company is required to maintain a ratio of debt to net worth of not more than 9:1, to be monitored annually based upon year-end financial statements beginning in the cash dominion trigger period and financial covenant trigger period, among other things. Our option to request an increase in commitments under the accordion feature was also removed under the terms of the amendment.

For more information regarding the issuance of the Series B preferred stock and amendments to our senior secured term loan and revolving credit facility, please refer to “Note 9 – Debt” and “Note 10 – Mezzanine Equity” in the Notes to Condensed Consolidated Financial Statements.calendar year 2022.

As of ~~September 30, 2020,~~March 31, 2021, our 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. In addition, all borrowings under our revolving 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.~~ base. As of ~~September 30, 2020,~~March 31, 2021, the borrowing base was ~~$25.7~~$50.0 million and the outstanding revolver loan balance was ~~$14.9~~$35.9 million. As of ~~September 30, 2020,~~March 31, 2021, we were in compliance with all of the covenants under our senior secured term loan and our revolving credit facility.

In July 2020, the Company received an unsecured $10.0 million loan (the “PPP Loan”) that bears interest at a rate of 1.0% per annum and matures in five years under the Paycheck Protection Program from a commercial bank. The Paycheck Protection Program was established under the CARES Act and is administered by the U.S. Small Business Administration. Under the terms of the CARES Act, loan recipients can apply for and be granted forgiveness for all or a portion of the loan. Forgiveness is determined, subject to certain limitations, based on the use of the loan proceeds for payroll costs, interest on mortgages or other debt obligations, rents and utilities. At least 60% of the proceeds must be used for payroll costs. No assurance can be given that the Company will obtain forgiveness of the PPP Loan either in whole or in part. Monthly principal and interest payments will commence after an initial deferral period as specified under the Paycheck Protection Program on any unforgiven loan proceeds.

We believe that our current cash position, working capital balance, ~~cash generated from operations,~~ favorable payment terms under our ~~amended~~ senior secured term loan, borrowing capacity under our revolving credit facility, ~~deferral of the employer portion of social security tax~~and amounts raised under the ~~CARES Act, proceeds from our PPP Loan~~ATM Agreement will be sufficient to satisfy the anticipated cash requirements associated with our existing operations for at least the next twelve months. While we are focused on maintaining adequate liquidity to fund our operations, service our debt and fund capital expenditures, sustained weakness or further deterioration in industry activity may make it difficult for us to do so.

Net Cash Provided by Operating Activities. Net cash ~~provided by~~used in operating activities primarily represents the results of operations exclusive of non-cash expenses, including depreciation, amortization, provision for losses on accounts receivable and inventory, interest, impairment losses, losses on disposal of assets, and share-based compensation, and the impact of changes in operating assets and liabilities. Net cash ~~provided by~~used in operating activities was ~~$19.1~~$11.0 million for the ~~nine months ended September 30,~~first quarter of 2021 due to redeployment of fracturing fleets. While the Company experienced an increase in customer activity during the second half of the quarter, the related collection of receivables is not expected until the second quarter of 2021. Additionally, we made working capital payments amounting to $3.0 million using proceeds from our USDA Loan. Net cash used in operating activities was $11.6 million for the first quarter of 2020, ~~a decrease of $23.2 million from the prior corresponding period. This decrease was~~ primarily ~~attributable~~due to interest payments amounting to $24.3 million related to our senior secured term loan, which represented interest from May 7, 2019 through March 31, 2020. With the entry into the amendment to our senior secured term loan on April 1, 2020, we have no interest coming due on the senior secured term loan over the next twelve months.loan.

Net Cash used in Investing Activities. Net cash used in investing activities decreased by ~~$165.2~~$12.3 million from the prior corresponding period, primarily due to reduced growth and maintenance capital expenditures ~~as a result~~because of athe decline in business activity. Net cash used in investing activities was ~~$28.2~~$7.8 million for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, primarily due to purchases of property and equipment amounting to ~~$43.9~~$14.2 million, ~~$18.8 million of~~ which related to maintaining and supporting our existing hydraulic fracturing equipment ~~$0.3 million of which related~~and payments made to ~~fleet enhancements,~~replace damaged property and ~~$24.8 million of which related to growth.~~equipment. This was offset in part by insurance proceeds ~~of $15.8~~amounting to $6.4 million ~~from~~related to the ~~sale of certain~~damaged property and equipment.

Net Cash Provided by Financing Activities. During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, cash ~~used in~~provided by financing activities reflects ~~payments of amounts outstanding~~proceeds under our revolving credit facility, long term debt, note payable, ~~equipment financing arrangements, finance leases,~~ and ~~payment~~proceeds from issuance of ~~senior secured term loan amendment fee~~common stock amounting to ~~$51.0~~$21.2 million, ~~$2.5~~$3.0 million, ~~$6.2 million, $2.4 million, $4.3~~$9.1 million, and ~~$20.0~~$10.7 million, respectively, offset in part by ~~proceeds under~~payments related to our revolving credit facility of ~~$25.7~~$9.0 million, ~~net proceeds from issuance~~long term debt of ~~Series B preferred stock~~$1.3 million, note payable of ~~$19.6~~$1.0 million and ~~proceeds from the PPP Loan~~equipment financing arrangements of ~~$10.0 million. With the entry into the amendment to our senior secured term loan on April 1, 2020, we have no scheduled quarterly principal payments due over the next twelve months.~~$0.9 million, respectively.

Capital Expenditures. Our business requires continual investments to upgrade or enhance existing property and equipment and to ensure compliance with safety and environmental regulations. Capital expenditures primarily relate to maintenance capital expenditures, growth capital expenditures and fleet enhancement capital expenditures. Maintenance capital expenditures include expenditures needed to maintain and to support our current operations. Growth capital expenditures include expenditures to generate incremental distributable cash flow. Fleet enhancement capital expenditures include expenditures on new equipment related to existing fleets that increase the productivity of the fleet. Capital expenditures for growth and fleet enhancement initiatives are discretionary.

We classify maintenance capital expenditures as expenditures required to maintain or supplement existing hydraulic fracturing fleets. We budget maintenance capital expenditures based on historical run rates and current maintenance schedules. Growth capital expenditures relate to adding additional hydraulic fracturing fleets and are based on quotes obtained from equipment manufacturers and our estimate for the timing of placing orders, disbursing funds and receiving the equipment. Fleet enhancement capital expenditures relate to technology enhancements to existing fleets that increase their productivity and are based on quotes obtained from equipment manufacturers and our estimate for the timing of placing orders, disbursing funds and receiving the equipment.

We continuously evaluate our capital expenditures and the amount we ultimately spend will depend on ~~a number of~~several factors, including expected industry activity levels and company initiatives. ~~As discussed in “Significant Trends” above, we expect to substantially limit growth capital expenditures for the foreseeable future.~~ We intend to fund ~~the majority~~most of our capital expenditures, contractual obligations and working capital needs with cash on hand, cash generated from operations, borrowing capacity under our revolving credit facility and other financing sources.

~~We enter into certain contractual obligations in the normal course of our business. The following table summarizes our known contractual commitments as of September 30, 2020~~ ~~(in thousands)~~:

We are a party to transactions, agreements or other contractual arrangements defined as “off-balance sheet arrangements” that could have a material future effect on our financial position, results of operations, liquidity, and capital resources. The ~~Company’s~~most significant of

these off-balance sheet arrangements include ~~the operating leases and~~sand purchase commitments disclosed in ~~the “Contractual Obligations” section herein. For further description of such operating leases and purchase commitments, see~~ “Note 16 – Commitments and Contingencies” in the Notes to Condensed Consolidated Financial Statements.

~~The Company does~~We do not have a retained or contingent interest in assets transferred to an unconsolidated entity, we do not have any obligation under a contract that would be accounted for as a derivative instrument, and we do not have any interest in entities referred to as variable interest entities.

WeAs a smaller reporting company, we are ~~exposed to market risks from interest rate and commodity price fluctuations. We have~~ not entered into any derivative financial instrument transactions to manage or reduce market risk for speculative purposes. Our operations are conducted entirely in the United States; therefore, we have no significant exposure to foreign currency exchange rate risk. The consolidated financial statements are subject to concentrations of credit risk consisting primarily of accounts receivable.

Beginning April 1, 2022, we will be subject to interest rate risk on our senior secured term loan. At that time, this loan will be subject to an annual interest rate that is indexed to the London Interbank Offered Rate (“LIBOR”). Refer to “Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” The impact of a 1% increase in interest rates on this debt would result in an increase in interest expense of approximately $2.6 million annually.

Our material and fuel purchases expose us to commodity price risk. Our material costs primarily consist of proppants and chemicals that are consumed while providing hydraulic fracturing services. Our fuel costs primarily consist of diesel fuel used by our trucks and other equipment. Our material and fuel costs are variable and are impacted by changes in supply and demand. We generally pass along price increases to our customers; however, we may be unable to do so in the future. We do not engage in commodity price hedging activities. However, we have commitments in place with certain vendors to purchase sand. Some of these agreements have minimum purchase requirements. We could be required to ~~purchase sand and pay prices in excess of market prices at~~provide the time of purchase. Refer to “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual Obligations” for the contractual commitments and obligations table as of September 30, 2020.

~~The concentration of our customers in the oil and gas industry may impact our overall exposure to credit risk in that customers may be similarly affected~~information required by changes in economic and industry conditions. We extend credit to customers and other parties in the normal course of our business. We manage our credit exposure by performing credit evaluations of our customers and maintaining an allowance for doubtful accounts. As of September 30, 2020, we recorded a reserve for doubtful accounts of $9.0 million, which was primarily driven by growing uncertainty that we will be able collect billed amounts from customers weakened by the recent collapse in crude oil prices. We are continuing to work with our customers to collect on our receivables.this item.

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of ~~such date. Our disclosure controls~~March 31, 2021 due solely to the material weakness in our internal control over financial reporting with respect to the classification of the Company’s warrants as components of equity instead of as liabilities as more fully described in Note 2 to the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Notwithstanding this material weakness, management believes that the financial statements included in this Quarterly Report on Form 10-Q present fairly in all material respects our financial position, results of operations and ~~procedures are designed~~cash flows as of the dates and for the periods presented in accordance with GAAP.

Remediation Plan for Material Weakness in Internal Control over Financial Reporting and Status

Management has implemented remediation steps to ~~ensure that information required~~address the material weakness and to ~~be disclosed in~~improve our internal control over financial reporting. Specifically, we expanded and improved our review process for complex securities and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications and consideration of additional staff with the ~~reports we file or submit under the Exchange Act is recorded, processed, summarized~~requisite experience and ~~reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated~~training to ~~management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.~~supplement existing accounting professionals.

There were no changes made in our internal control over financial reporting during the quarter ended ~~September 30, 2020~~March 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial ~~reporting.~~reporting, as the circumstances that led to the restatement of our financial statements described in Note 2 to the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q had not yet been identified.

~~As described in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2019, we were named as a defendant in a case filed on January 14, 2019~~

See “Note 16 – Commitments and Contingencies” in the Superior Court of the State of Delaware (Smart Sand, Inc. v. U.S. Well Services, LLC) seeking monetary damages arising out of the cancellation of a sand contract. The litigation is in the discovery stages. As such, no prediction can be made asNotes to ~~the outcome of the case at this time.~~Condensed Consolidated Financial Statements for further information.

We are involved in various other pending or potential legal actions in the ordinary course of our business. Management is unable to predict the ultimate outcome of these actions because of the inherent uncertainty of litigation. However, management believes that the most probable, ultimate resolution of these matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

No material changes have occurred from the risk factors previously disclosed in the Company’s Amended Annual ~~Report on Form 10-K for the year ended December 31, 2019, other than the risk factors disclosed below.~~Report. See also Part I, Item 2 ~~(Forward-Looking Statements)~~“Forward-Looking Statements” of this Quarterly Report on Form 10-Q.

~~The volatility of oil and natural gas prices may continue to adversely affect the demand for our services and negatively impact our results of operations.~~

The demand for our services is substantially influenced by current and anticipated crude oil and natural gas commodity prices and the related levels of capital spending and drilling activity in the areas in which we have operations. Volatility or weakness in crude oil and natural gas commodity prices (or the perception that crude oil and natural gas commodity prices will decrease) affects the spending patterns of our customers, and the products and services we provide are, to a substantial extent, deferrable in the event oil and natural gas companies reduce capital expenditures. As a result, we have and may continue to experience lower utilization of and may be forced to continue to lower our rates for our equipment and services.

Historical prices for crude oil and natural gas have been extremely volatile and are expected to continue to be volatile. The market prices for crude oil and natural gas depend on factors beyond our control, including worldwide and domestic supplies of crude oil and natural gas and actions taken by foreign oil and gas producing nations. For example, the price of oil has fallen significantly since the beginning of 2020, due to the COVID–19 coronavirus pandemic and its impact on the worldwide economy and global demand for oil. Weaker economic activity and lower demand for crude oil, driven by the onset of the COVID-19 coronavirus pandemic, has adversely impacted our business resulting in a sharp decrease in both our active fleet count and the utilization of our active fleets. As such, we are experiencing considerable uncertainty in our near-term business prospects and ability to forecast future performance. We expect hydraulic fracturing activity to be muted throughout the remainder of 2020 and that financial performance will be highly uncertain until global economic activity recovers. Beyond the current significant reduction in crude oil prices resulting from the COVID-19 coronavirus pandemic, we expect continued volatility in oil and natural gas prices, as well as in the level of exploration and development activities by our customers.

As a result of declines and volatility in commodity prices, exploration and production companies moved to significantly cut costs, both by decreasing drilling and completion activity and by demanding price concessions from their service providers, including providers of hydraulic fracturing services. In turn, service providers, including hydraulic fracturing service providers, were forced to lower their operating costs and capital expenditures, while continuing to operate their businesses in an extremely competitive environment. Prolonged periods of price instability in the oil and natural gas industry and any significant decline in exploration and development by our customers will adversely affect the demand for our products and services, our financial condition, prospects and results of operations and our ability to service our debt or fund capital expenditures.

Additionally, fuel conservation measures, alternative fuel requirements and increasing consumer demand for alternatives to oil and natural gas could reduce the demand for oil and natural gas products, creating downward pressure on commodity prices and the prices we are able to charge for our services.

A pandemic or epidemic, including the ongoing COVID-19 global pandemic, and the regulatory steps to reduce its transmission could have a material adverse effect on our business, financial condition, and results of operations.

The outbreak of the COVID–19 coronavirus, which has been declared by the World Health Organization to be a pandemic, has spread across the globe and is impacting worldwide economic activity, including the global demand for oil and natural gas. A pandemic, including the COVID–19 coronavirus or other public health epidemic, poses the risk that we or our employees, contractors, suppliers, customers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to spread of the disease within these groups or due to restrictions that may be requested or mandated by governmental authorities, including quarantines of certain geographic areas, restrictions on travel and other restrictions that prohibit employees from going to work. The continued spread of the COVID–19 coronavirus and the related mitigation measures has resulted and may continue to result in a significant decrease in business from our customers and/or cause our customers to be unable to meet existing payment or other obligations to us. If the COVID–19 coronavirus continues to spread or the response to contain the COVID–19 coronavirus pandemic is unsuccessful, we could experience a material adverse effect on our business, financial condition, and results of operations.

We may not be entitled to forgiveness of our recently received PPP Loan, and our application for the PPP Loan could in the future be determined to have been impermissible or could result in damage to our reputation.

On July 28, 2020, we received proceeds of $10.0 million from a loan under the Paycheck Protection Program of the CARES Act, a portion of which may be forgiven. We intend to use the proceeds to retain current employees, maintain payroll and make lease and utility payments. A portion of the PPP Loan may be forgiven by the Small Business Administration (the “SBA”) upon our application in accordance with the forgiveness rules set out in the CARES Act. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered lease payments, covered mortgage interest and covered utilities during the twenty-four-week period beginning on the date the loan is advanced, but not to exceed December 31, 2020. Not more than 40% of the forgiven amount may be for non-payroll costs. In addition, the amount of the PPP Loan eligible for forgiveness related to payroll costs is subject to additional limitations as outlined in the CARES Act. Although we intend to use the entire PPP Loan for designated qualifying expenses and to apply for forgiveness in accordance with the terms of the Paycheck Protection Program, no assurance can be given that we will obtain forgiveness of the PPP Loan in whole or in part. Furthermore, on April 28, 2020, the Secretary of the U.S. Department of the Treasury stated that the SBA will perform a full review of any PPP loan over $2.0 million before forgiving the loan.

We will be required to repay any portion of the outstanding principal that is not forgiven, along with accrued interest, through monthly principal and interest payments. These payments will commence following the end of the deferment period as defined in the PPP Loan. The PPP Loan matures on July 24, 2025 and bears interest at a rate of 1% per annum. We may prepay the principal at any time without penalty.

As part of our application for the PPP Loan, we were required to certify, among other things, that the current economic uncertainty made the PPP Loan request necessary to support our ongoing operations. We made this certification in good faith after analyzing, among other things, our financial situation and access to alternative forms of capital, and believe that we satisfied all eligibility criteria for the PPP Loan and that our receipt of the PPP Loan is consistent with the broad objectives of the Paycheck Protection Program of the CARES Act. The certification described above does not contain any objective criteria and is subject to interpretation. On April 23, 2020, the SBA issued guidance stating that it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith. The lack of clarity regarding loan eligibility under the Paycheck Protection Program has resulted in significant media coverage and controversy with respect to public companies applying for and receiving loans. If, despite our good faith belief that given our Company’s circumstances we satisfied all eligible requirements for the PPP Loan, we are later determined to have violated any of the laws or governmental regulations that apply to us in connection with the PPP Loan, such as the False Claims Act, or it is otherwise determined that we were ineligible to receive the PPP Loan, we may be subject to penalties, including significant civil, criminal and administrative penalties and could be required to repay the PPP Loan in its entirety. In addition, receipt of a PPP Loan may result in adverse publicity and damage to reputation, and a review or audit by the SBA or other government entity or claims under the False Claims Act could consume significant financial and management resources. Any of these events could have a material adverse effect on our business, results of operations and financial condition.

Future sales or the availability for sale of substantial amounts of our Class A common stock, or the perception that these sales may occur, could adversely affect the trading price of our Class A common stock and could impair our ability to raise capital through future sales of equity securities.

Our Second Amended and Restated Certificate of Incorporation (as amended, the “Second Amended and Restated Charter”) authorizes us to issue 400,000,000 shares of Class A common stock, of which 71,766,358 shares were outstanding as of October 31, 2020, and 10,000,000 shares of preferred stock, of which 50,000 shares of Series A preferred stock and 22,050 shares of Series B preferred stock were outstanding as of October 31, 2020. The holders of the Series B preferred stock have the right to convert all or any portion of their shares of Series B preferred stock into shares of Class A common stock and the Series A preferred stock have the right to convert all or any portion of their shares of Series A preferred stock into shares of Class A common stock beginning in May 2020. In addition, as of October 31, 2020, warrants to purchase up to 17,147,315 shares of our Class A common stock were outstanding and immediately exercisable.

A large percentage of our shares of common stock are held by a relatively small number of investors. We entered into registration rights agreements (the “Registration Rights Agreements”) with certain of those investors in connection with the Transaction and in connection with their subsequent purchase of Series A preferred stock and the issuance of the Series B preferred stock pursuant to which we have filed registration statements with the SEC to facilitate potential future sales of such shares by them.

We may issue shares of our Class A common stock or other securities from time to time pursuant to our ATM Offering or as consideration for future acquisitions and investments. If any such acquisition or investment is significant, the number of shares of our Class A common stock, or the number or aggregate principal amount, as the case may be, of other securities that we may issue may in turn be substantial. We may also grant registration rights covering those shares of our Class A common stock or other securities in connection with any such acquisitions and investments.

We cannot predict the effect that future sales of our Class A common stock will have on the price at which our Class A common stock trades or the size of future issuances of our Class A common stock or the effect, if any, that future issuances will have on the market price of our Class A common stock. Sales of substantial amounts of our Class A common stock, or the perception that such sales could occur, may adversely affect the trading price of our Class A common stock and could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities.

We are currently not in compliance with NASDAQ Capital Market listing standards. If our common stock is delisted, the market price and liquidity of our common stock and our ability to raise additional capital would be adversely impacted.

Our Class A common stock and warrants are currently listed on the NASDAQ Capital Market (“NASDAQ”). Continued listing of a security on NASDAQ is conditioned upon compliance with various continued listing standards. On April 21, 2020, we received a notice (the “Notice”) from NASDAQ stating we were not in compliance with the $1.00 minimum bid price requirement for continued listing on Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”), because the bid price for our Class A common stock had closed below the minimum $1.00 price per share requirement for the last thirty (30) consecutive business days. On August 14, 2020, we received another notice (the “Second Notice”) from NASDAQ stating that, based upon its review of our market value of listed securities for the last thirty consecutive business days, we do not meet the market value of listed securities requirement set forth under Nasdaq Listing Rule 5550(b)(2) (the “MVLS Requirement”). In addition, the Second Notice informed us that as of August 14, 2020, we did not meet the alternative compliance standards relating to stockholders’ equity or net income from continuing operations (the “Alternative Compliance Standards”).

The Notice and the Second Notice have no immediate effect on our listing on the NASDAQ Capital Market. Given the extraordinary market conditions, Nasdaq determined to toll the compliance periods for the bid price and market value of publicly held shares requirements (collectively, the “Price-based Requirements”) through June 30, 2020. Accordingly, the compliance periods for the Price-based Requirements was reinstated on July 1, 2020.

In accordance with Listing Rule 5810(c)(3)(A), we have a period of 180 calendar days from July 1, 2020, or until December 28, 2020, to regain compliance with the minimum bid price requirement set forth in the Minimum Bid Price Rule. To regain compliance, the closing bid price of our Class A common stock must meet or exceed $1.00 per share for at least ten consecutive business days before the end of this 180-day period. We also have a period of 180 calendar days from the date of the Second Notice, or until February 10, 2021, to regain compliance with the MVLS Requirement. Compliance can be achieved by meeting the MVLS Requirement for a minimum of ten consecutive business days during the 180-day compliance period, unless NASDAQ exercises its discretion to extend this ten-day period.

If the Company does not regain compliance with the Minimum Bid Price Rule by December 28, 2020, the Company may be eligible for an additional 180-calendar day compliance period. To qualify, we would be required to meet the continued listing requirements for market value of publicly held shares and all other initial listing standards for NASDAQ, with the exception of the minimum bid price requirement, and provide written notice of our intention to cure the minimum bid price deficiency during the second compliance period, by effecting a reverse stock split, if necessary. If we meet these requirements, the Nasdaq staff will grant an additional 180 calendar days for us to regain compliance with the minimum bid price requirement. If the Nasdaq staff determines that we will not be able to cure the deficiency, or if we are otherwise not eligible for such additional compliance period, Nasdaq will provide notice that our Class A common stock will be subject to delisting. We would have the right to appeal a determination to delist our Class A common stock, and the Class A common stock would remain listed on Nasdaq until the completion of the appeal process.

We intend to actively monitor the bid price of our Class A common stock and may, as appropriate, consider available options to regain compliance with the Minimum Bid Price Rule or the MVLS Requirement. There can be no assurance we will be able to regain compliance with the Minimum Bid Price Rule or the MVLS Requirement by the end of the compliance period.

If our Class A common stock was to be delisted from NASDAQ, trading of our common stock most likely would be conducted in the over–the–counter market on an electronic bulletin board established for unlisted securities such as the OTCQX Market, OTCQB Market or OTC Bulletin Board. Such trading would likely reduce the market liquidity of our Class A common stock. As a result, an investor would find it more difficult to dispose of, or obtain accurate quotations for the price of, our Class A common stock. If our Class A common stock is delisted from NASDAQ and the trading price remains below $5.00 per share, trading in our Class A common stock might also become subject to the requirements of certain rules promulgated under the Exchange Act, which require additional disclosure by broker–dealers in connection with any trade involving a stock defined as a “penny stock” (generally, any equity security not listed on a national securities exchange or quoted on NASDAQ that has a market price of less than $5.00 per share, subject to certain exceptions). Many brokerage firms are reluctant to recommend low–priced stocks to their clients. Moreover, various regulations and policies restrict the ability of stockholders to borrow against or “margin” low–priced stocks, and declines in the stock price below certain levels may trigger unexpected margin calls. Additionally, because brokers’ commissions on low–priced stocks generally represent a higher percentage of the stock price than commissions on higher priced stocks, the current price of the Class A common stock can result in an individual stockholder paying transaction costs that represent a higher percentage of total share value than would be the case if our share price were higher. This factor may also limit the willingness of institutions to purchase our Class A common stock. Finally, the additional burdens imposed upon broker–dealers by these requirements could discourage broker–dealers from facilitating trades in our Class A common stock, which could severely limit the market liquidity of the stock and the ability of investors to trade our Class A common stock. As a result, the ability of our stockholders to resell their shares of Class A common stock, and the price at which they could sell their shares, could be adversely affected. The delisting of our Class A common stock from NASDAQ would also make it more difficult for us to raise additional capital.

The following table presents information with respect to our repurchases of our common stock during the quarter ended March 31, 2021.

⁽¹⁾ These shares were withheld in order to pay taxes related to vesting of stock-based compensation.

Over the course of the year, the Compensation Committee of the Board of Directors (the “Board”) of the Company has evaluated means by which it can provide incentives for certain of the Company’s key employees to remain employed by the Company. After carefully evaluating many options, the Board, upon the recommendation of the Compensation Committee of the Board, has approved the grant of deferred stock units and certain performance incentive awards that will provide for potential future payments to be made to certain key employees of the Company, as summarized below. The Board believes that these awards will provide for a key retention pool that will benefit all of its stockholders. Specifically, the Board believes that these awards will enable the Company to: (i) enhance executive management’s and other key employees’ sense of participation in the Company; and (ii) provide incentives for continued employment. The Board also believes that these awards will further align the interests of executive management and key employees with those of the Company’s stockholders through the potential for increased stock ownership.None.

On November 5, 2020 (the “Grant Date”), the Company entered into Deferred Stock Unit Award Agreements (the “DSU Award Agreements”) with certain of its key employees, including Joel Broussard, the Company’s President and Chief Executive Officer, and Kyle O’Neill, the Company’s Chief Financial Officer. The DSU Award Agreements were made pursuant to the Amended and Restated U.S. Well Services, Inc. 2018 Stock Incentive Plan (the “A&R LTIP”), which was approved by the Board, upon the recommendation of the Compensation Committee of the Board, on September 21, 2020. The A&R LTIP is expected to be included in the Company’s Proxy Statement for its 2021 Annual Meeting of Stockholders for approval by the Company’s stockholders.

Pursuant to their respective DSU Award Agreements, Messrs. Broussard and O’Neill were granted 3,592,795 and 1,434,960 Deferred Stock Units (the “DSUs”), respectively. In addition, the other key employees were issued a total of 4,072,913 DSUs. Each DSU represents the right to receive one share of the Company’s Class A common stock, par value $0.0001 per share, which right is conditioned upon the Company receiving stockholder approval of the A&R LTIP. In the event that the Company’s stockholders do not approve the A&R LTIP and the Company lacks sufficient shares of Class A common stock reserved for issuance under the ~~2018 Stock Incentive Plan~~ ~~to satisfy the DSU Award Agreements, then the unsatisfied portion of the DSU Award Agreements will be forfeited and void.~~

The DSUs are subject to vesting and the award recipients continued employment with the Company, and will vest 1/3 each year, beginning on the first anniversary of January 1, 2020 (the “Vesting Effective Date”), or in full upon the occurrence of a Change of Control (as defined in the DSU Award Agreement). If a recipient’s employment is terminated as the result of certain events, such as death, disability or retirement, the participant will vest in 1/3 of the DSUs.

~~Shares of Class A common stock issuable with respect to vested DSUs held by Messrs. Broussard and O’Neill will be issued on the earlier of the following: (i) the 60~~^th ~~day after their respective termination; (ii) upon a Change of Control (as defined in the DSU Award Agreement); or (iii) upon the fifth anniversary of the Grant Date.~~

The foregoing description of the DSU Award Agreements and the DSUs does not purport to be complete and is qualified in its entirety by reference to the complete text of the DSU Award Agreement, which is filed herewith as Exhibit 10.4.

On the Grant Date, the Company entered into Performance Awards (Pool A) (the “Pool A Performance Award Agreements”) with certain of its key employees, including Messrs. Broussard and O’Neill, under the A&R LTIP.

Pursuant to their respective Pool A Performance Award Agreements, Messrs. Broussard and O’Neill were each granted an award (the “Pool A Performance Award”) with a designated cash value equal to $0.9 million and $0.4 million, respectively, which amounts increase by 12.0% until May 24, 2021 and 16.0% thereafter, compounding quarterly (the “Pool A Award Value”). The cash value awarded to all other employees equals $1.0 million. The Pool A Award Value is subject to reduction if, in connection with any Change of Control (as defined in the Pool A Performance Award Agreements), the Company’s Series A Preferred Stock is redeemed for less than its redemption price. No payments will be made under a Pool A Performance Award prior to the date on which the Pool A Performance Award becomes vested and the restricted periods lapse, and payment date occurs, as summarized below.

The respective Pool A Performance Awards of Messrs. Broussard and O’Neill are subject to their continued employment and vest in full (i) on the first anniversary of the Vesting Effective Date or (ii) upon a Change of Control (as defined in the Pool A Performance Award Agreements). If the employment of either Messrs. Broussard or O’Neill is terminated prior to the first anniversary of the Vesting Effective Date or for certain events of cause, then the entire Pool A Performance Award held by such terminated executive will be forfeited, whether or not vested in the case of a for cause termination.

~~The vested Pool A Performance Award will be payable to Messrs. Broussard and O’Neill on the earlier of the following:~~

The fixed payment date (the “Fixed Payment Date”) is the fifth anniversary of the Grant Date, unless the Company elects to defer the payment date, subject to the requirements set forth in the Pool A Performance Award Agreement or Pool B Performance Award Agreement, as applicable, for such a deferral, to a date not less than five years from, nor more than six years after, the initial Fixed Payment Date.

In the event that the Company’s stockholders do not approve the A&R LTIP, then the Pool A Performance Awards cannot be paid in shares of Class A common stock and will, in such case, only be payable in cash.

The foregoing description of the Pool A Performance Award Agreements and the Pool A Performance Awards does not purport to be complete and is qualified in its entirety by reference to the complete text of the Pool A Performance Award Agreement, which is filed herewith as Exhibit 10.5.

On the Grant Date, the Company entered into Performance Awards (Pool B) (the “Pool B Performance Award Agreements”) with certain of its key employees, including Messrs. Broussard and O’Neill, under the A&R LTIP.

Pursuant to their respective Pool B Performance Award Agreements, Messrs. Broussard and O’Neill were each granted an award (the “Pool B Performance Award”) with a designated cash value equal to $0.6 million and $0.2 million, respectively, which amounts increase by 12.0% until May 24, 2021 and 16.0% thereafter, compounding quarterly (the “Pool B Award Value”). The cash value awarded to all other employees equals $0.7 million. The Pool B Award Value is subject to reduction if, in connection with any Change of Control (as defined in the Pool B Performance Award Agreements), the Company’s Series B Preferred Stock is redeemed for less than its redemption price. No payments will be made under a Pool B Performance Award prior to the date on which the Pool B Performance Award becomes vested and the restricted periods lapse and payment date occurs, as summarized below.

The respective Pool B Performance Awards of Messrs. Broussard and O’Neill are subject to their continued employment and vest 1/3 each year, beginning on the first anniversary of the Vesting Effective Date, or in full upon the occurrence of a Change of Control (as defined in the Pool B Performance Award Agreement). If the employment of either Messrs. Broussard or O’Neill is terminated (i) due to death or disability, then he will vest in 1/3 of the Pool B Performance Award or (ii) due to retirement after the first anniversary of the Vesting Effective Date, then he will vest in 1/3 of the Pool B Performance Award. Upon the termination of their employment for any other reason or for certain events of cause, then the unvested portion of the Pool B Performance Award held by such terminated executive will be forfeited, and in the case of a for cause termination, the entire Pool B Performance Award will be forfeited, whether or not vested.

~~The vested Pool B Performance Award will be payable to Messrs. Broussard and O’Neill on the earlier of the following:~~

In the event that the Company’s stockholders do not approve the A&R LTIP, then the Pool B Performance Awards cannot be paid in shares of Class A common stock and will, in such case, only be payable in cash.

The foregoing description of the Pool B Performance Award Agreements and the Pool B Performance Awards does not purport to be complete and is qualified in its entirety by reference to the complete text of the Pool B Performance Award Agreement, which is filed herewith as Exhibit 10.6.

The exhibits required to be filed or furnished by Item 601 of Regulation S-K are listed below.

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 thereunto duly authorized on ~~November 6, 2020.~~May 17, 2021.

Delaware		81-1847117
(State or other jurisdiction of		(I.R.S. Employer
organization)		Identification No.)

1360 Post Oak Boulevard, Suite 1800, Houston, TX		77056
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☑☐
Non-accelerated filer	☐☑	Smaller reporting company	☑
Emerging growth company	☑

		Page No.
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Cash Flows	4
	Condensed Consolidated Statements of Stockholders’ ~~Equity (Deficit)~~Deficit	6
	Notes to Condensed Consolidated Financial Statements	87

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2623
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	3328
Item 4.	Controls and Procedures	3328

PART II	OTHER INFORMATION	3429
Item 11..	Legal Proceeding	3429
Item 1A.	Risk Factors	3429
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3729
Item 3.	Defaults Upon Senior Securities	3729
Item 4.	Mine Safety Disclosures	3729
Item 5.	Other Information	3729
Item 6.	Exhibits	4130
SIGNATURES		4231

	Three Months Ended September 30,		Three Months Ended March 31,
	2020	2019	2021	2020
Customer A	*	21.8%	*	23.6%
Customer B	23.6%	*	13.0%	13.9%
Customer C	21.5%	10.1%	12.6%	13.8%
Customer D	*	16.1%	*	12.7%
Customer E	18.0%	*	16.6%	*
Customer F	26.0%	*	20.3%	*
Customer G	*	20.0%

	Nine Months Ended September 30,
	2020	2019
Customer A	13.5%	16.3%
Customer B	17.1%	*
Customer C	17.5%	*
Customer D	*	17.4%
Customer E	13.7%	*
Customer F	17.1%	*
Customer G	*	16.9%
Customer I	*	10.9%
Customer H			18.5%	*

An asterisk indicates that revenue is less than 10 percent.

U.S. WELL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (continued)
(in thousands, except share amounts)
(unaudited)

	Class A Common Stock					Class B Common Stock
											Additional
											Paid in			Accumulated			Noncontrolling			Total
	Shares			Amount		Shares			Amount		Capital			Deficit			Interest			Equity
Balance, June 30, 2019		54,607,462		$	5		13,775,400		$	1	$	236,398		$	(61,039	)	$	41,914		$	217,279
Share-based compensation		-			-		-			-		1,758			-			443			2,201
Restricted stock forfeitures		(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		-			-		-			-		-			(16,969	)		(4,280	)		(21,249	)
Balance, September 30, 2019		54,588,775		$	5		13,775,400		$	1	$	232,080		$	(78,008	)	$	38,077		$	192,155

	Class A Common Stock					Class B Common Stock
											Additional
											Paid in			Accumulated			Noncontrolling			Total
	Shares			Amount		Shares			Amount		Capital			Deficit			Interest			Equity
Balance, June 30, 2020		68,361,213		$	7		5,014,897		$	-	$	237,872		$	(301,705	)	$	-		$	(63,826	)
Class A common stock issuance		400			-		-			-		-			-			-			-
Conversion of Class B common stock to Class A common stock		2,711,961			-		(2,711,961	)		-		-			-			-			-
Conversion of Series A preferred stock to Class A common stock		523,973			-		-			-		4,691			-			-			4,691
Share-based compensation		-			-		-			-		986			-			51			1,037
Restricted stock forfeitures		(183,664	)		-		-			-		-			-			-			-
Deemed and imputed dividends on Series A preferred stock		-			-		-			-		(467	)		-			-			(467	)
Accrued Series A preferred stock dividends		-			-		-			-		(1,854	)		-			-			(1,854	)
Accrued Series B preferred stock dividends		-			-		-			-		(681	)		-			-			(681	)
Net loss		-			-		-			-		-			(15,937	)		(51	)		(15,988	)
Balance, September 30, 2020		71,413,883		$	7		2,302,936		$	-	$	240,547		$	(317,642	)	$	-		$	(77,088	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Estimated Useful Life (in years)	Gross Carrying Value		Accumulated Amortization		Net Book Value		Estimated Useful Life (in years)	Gross Carrying Value		Accumulated Amortization		Net Book Value
As of September 30, 2020
As of March 31, 2021
Trademarks	10	$	1,415	$	104	$	1,311	10	$	1,415	$	208	$	1,207
Patents	20		12,776		379		12,397	20		12,775		757		12,018
		$	14,191	$	483	$	13,708		$	14,190	$	965	$	13,225
As of December 31, 2019
As of December 31, 2020
Trademarks	10	$	3,132	$	913	$	2,219	10	$	1,415	$	156	$	1,259
Patents	20		22,955		3,348		19,607	20		12,775		568		12,207
		$	26,087	$	4,261	$	21,826		$	14,190	$	724	$	13,466

Fiscal Year	Estimated Amortization Expense		Estimated Amortization Expense
Remainder of 2020	$	242
2021		966
Remainder of 2021			$	725
2022		966		966
2023		966		966
2024		966		966
2025				966
Thereafter		9,602		8,636
Total	$	13,708	$	13,225

	Estimated Useful Life	September 30, 2020			December 31, 2019			Estimated Useful Life (in years)	March 31, 2021			December 31, 2020
Fracturing equipment	1.5 to 25 years	$	258,218		$	651,162		1.5 to 25	$	267,690		$	263,869
Light duty vehicles	5 years		2,184			8,188		5		3,491			2,483
Furniture and fixtures	5 years		67			277		5		67			67
IT equipment	3 years		1,676			6,724		3		1,723			1,676
Auxiliary equipment	2 to 20 years		12,720			38,502		2 to 20		12,495			11,058
Leasehold improvements	Term of lease		287			725		Term of lease		287			287
			275,152			705,578				285,753			279,440
Less: Accumulated depreciation and amortization			(32,342	)		(263,968	)			(52,251	)		(44,108	)
Property and equipment, net		$	242,810		$	441,610			$	233,502		$	235,332

	Quoted prices in active markets (Level 1)		Other observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
As of March 31, 2021
Public warrants	$	1,799	$	-	$	-	$	1,799
Private placement warrants		-		1,825		-		1,825
Series A warrants		-		5,151		-		5,151
	$	1,799	$	6,976	$	-	$	8,775
As of December 31, 2020
Public warrants	$	254	$	-	$	-	$	254
Private placement warrants		-		248		-		248
Series A warrants		-		1,117		-		1,117
	$	254	$	1,365	$	-	$	1,619

	Principal Amount		Principal Amount
	of Long-term Debt		of Long-term Debt
Remainder of 2020	$	7,052
2021		3,519
Remainder of 2021			$	11,572
2022		7,462		10,186
2023		8,930		9,408
2024		6,705		9,940
2025				269,081
Thereafter		258,688		18,578
Total	$	292,356	$	328,765

	Shares			Amount
Series A preferred stock as of December 31, 2019		55,000		$	38,928
Deemed and imputed dividends on Series A preferred stock		-			11,220
Accrued Series A preferred stock dividends		-			5,450
Conversion of Series A preferred stock to Class A common stock		(3,000	)		(4,691	)
Series A preferred stock as of September 30, 2020		52,000		$	50,907

	Shares		Amount
Series B preferred stock as of December 31, 2019		-	$	-
Proceeds from issuance of Series B preferred stock		21,000		21,000
Issuance of Series B preferred stock to senior secured term loan lenders		1,050		1,050
Issuance cost associated with Series B preferred stock		-		(1,413	)
Accrued Series B preferred stock dividends		-		1,347
Series B preferred stock as of September 30, 2020		22,050	$	21,984

				Weighted- average					Weighted- average
	Unvested shares			grant-date fair value per share		Unvested shares			grant-date fair value per share
Non-vested restricted stock as of December 31, 2019		2,723,637		$	8.87
Non-vested restricted stock as of December 31, 2020							1,449,287		$	8.85
Granted		-			-		-			-
Vested		(690,237	)		8.87		(353,378	)		8.91
Forfeited		(541,239	)		8.85		(16,660	)		8.91
Non-vested restricted stock as of September 30, 2020		1,492,161		$	8.88
Non-vested restricted stock as of March 31, 2021							1,079,249		$	8.83

	Number of shares			Weighted average exercise price (per share data)		Weighted Average Remaining Contractual Life (years)
Outstanding as of December 31, 2019		1,068,162		$	8.91		6.21
Exercised		-			-		-
Forfeited/Expired		(190,896	)		8.91		-
Outstanding as of September 30, 2020		877,266		$	8.91		5.46
Exercisable as of September 30, 2020		219,317		$	8.91		5.46

				Weighted- average
	Unvested units			grant-date fair value per unit
Non-vested DSUs as of December 31, 2020		8,911,858		$	0.33
Granted		-			-
Vested		(2,970,619	)		0.33
Forfeited		-			-
Non-vested DSUs as of March 31, 2021		5,941,239		$	0.33

			Minimum
	Contracted		Commitments
Remainder of 2020	$	7,758	$	4,027
2021		11,340		960
Total	$	19,098	$	4,987

Remainder of 2020	$	358
2021		1,114
Remainder of 2021			$	772
2022		828		828
2023		308		308
2024		258		258
Thereafter		67
2025				67
Total minimum future rentals	$	2,933	$	2,233

Results of Operations

Three months ended September 30, 2020, compared to three months ended September 30, 2019
(in thousands, except percentages)

	Three Months Ended September 30,
	2020			% ⁽¹⁾	2019			% ⁽¹⁾	Variance			% Variance
Revenue	$	44,042		100.0%	$	130,884		100.0%	$	(86,842	)	(66.4)%
Costs and expenses:
Cost of services (excluding depreciation and amortization)		31,157		70.7%		90,792		69.4%		(59,635	)	(65.7)%
Depreciation and amortization		16,393		37.2%		39,723		30.3%		(23,330	)	(58.7)%
Selling, general and administrative expenses		6,098		13.8%		8,216		6.3%		(2,118	)	(25.8)%
Loss on disposal of assets		755		1.7%		4,976		3.8%		(4,221	)	(84.8)%
Loss from operations		(10,361	)	(23.5)%		(12,823	)	(9.8)%		2,462		* ⁽²⁾
Interest expense, net		(5,744	)	(13.0)%		(8,449	)	(6.5)%		2,705		(32.0)%
Other income		30		0.1%		62		0.0%		(32	)	* ⁽²⁾
Income tax expense (benefit)		(87	)	(0.2)%		39		0.0%		(126	)	* ⁽²⁾
Net loss	$	(15,988	)	(36.3)%	$	(21,249	)	(16.2)%	$	5,261		* ⁽²⁾

⁽¹⁾ As a percentage of revenues. Percentage totals or differences in the above table may not equal the sum or difference of the components due to rounding.
⁽²⁾ Not meaningful.

Cash Flows
(in thousands)
	Nine Months Ended September 30,
	2020			2019
Net cash provided by (used in):
Operating activities	$	19,089		$	42,330
Investing activities		(28,170	)		(193,408	)
Financing activities		(31,285	)		153,838

	Less than 1 year		1 - 3 Years		3 - 5 Years		Thereafter		Total
Senior Secured Term Loan	$	-	$	7,500	$	10,000	$	230,000	$	247,500
ABL Credit Facility		-		-		14,939		-		14,939
PPP Loan		-		-		10,000		-		10,000
Equipment financing		3,474		7,533		2,709		-		13,716
Notes payable		1,867		-		-		-		1,867
Capital lease obligations ⁽¹⁾		6,201		-		-		-		6,201
Estimated interest payments ⁽²⁾		1,507		40,192		50,570		4,322		96,591
Operating lease obligations ⁽³⁾		1,250		1,297		386		-		2,933
Purchase commitments ⁽⁴⁾		1,999				-		-		1,999
Sand purchase agreements ⁽⁵⁾		4,747		240		-		-		4,987
Total	$	21,045	$	56,762	$	88,604	$	234,322	$	400,733

Period	Total Number of Shares Purchased ⁽¹⁾		Average Price Paid per Share ($)		Total Number of Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Shares that May Yet be Purchased under the Plan
January 1, 2021 to January 31, 2021		-		-		-	N/A
February 1, 2021 to February 28, 2021		-		-		-	N/A
March 1, 2021 to March 31, 2021		103,697		1.55		-	N/A
Total	��	103,697		1.55		-

Exhibit No.		Description
3.1		Second Amended and Restated Certificate of Incorporation of U.S. Well Services, Inc (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K (File ~~no.~~No. 001-38025), filed with the SEC on November 16, 2018).
3.2		Certificate of Designations, dated May 24, 2019, of U.S. Well Services, Inc. (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K (File ~~no.~~No. 001-38025), filed with the SEC on May 24, 2019.
3.3		Certificate of Designations, dated March 31, 2020, of U.S. Well Services, Inc. (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K (File ~~no.~~No. 001-38025), filed with the SEC on April 2, 2020.
3.4		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 of the Registration Statement on Form S-1 (File No. 333-216076), filed with the SEC on February 15, 2017).
4.1		Registration Rights Agreement, dated April 1, 2020, by and among U.S. Well Services, Inc. and the Purchasers party thereto (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K (File No. 001-38025), filed with the SEC on April 2, 2020).
~~10.1~~		Promissory Note, dated effective as of July 24, 2020, by and between U.S. Well Services, LLC and Bank of America, N.A. (incorporated by reference to Exhibit 10.12 of the Current Report on Form 8-K (File No. 001-38025), filed with the SEC on July 30, 2020).
~~10.2~~		Second Amendment to ABL Credit Agreement dated as of April 1, 2020, by and among U.S. Well Services, LLC, U.S. Well Services Inc., USWS Fleet 10, LLC, USWS Fleet 11, LLC, USWS Holdings, LLC, lenders party thereto, and Bank of America, N.A., as administrative agent, lender, swing line lender and letter of credit issuer (incorporated by reference to Exhibit 10.1. of the Current Report on Form 8-K (File No. 001-38025), filed with the SEC on August 20, 2020).
10.3*		Third Amendment to Senior Secured Term Loan Credit Agreement, dated July 30, 2020, among U.S. Well Services, LLC, U.S. Well Services, Inc., USWS Fleet 11, LLC, USWS Holdings LLC, CLMG Corp., as administrative agent and collateral agent, and the lenders party thereto.
10.4*		~~Form of Deferred Stock Unit Award under the U.S. Well Services, Inc. 2018 Long Term Incentive Plan.~~
10.5*		~~Form of Performance Award (Pool A) under the U.S. Well Services, Inc. 2018 Long Term Incentive Plan.~~
10.6*		~~Form of Performance Award (Pool B) under the U.S. Well Services, Inc. 2018 Long Term Incentive Plan.~~
10.7*		~~U.S. Well Services, Inc. Amended and Restated 2018 Long Term Incentive Plan.~~
31.1*		Certification of Chief Executive Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934.
31.2*		Certification of Chief Financial Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934.
32.1**		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2**		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
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	U.S. WELL SERVICES, INC.

	By:


	/s/ Joel Broussard
	Name:	Joel Broussard
	Title:	President, Chief Executive Officer, and Director

	/s/ Kyle O’Neill
	Name:	Kyle O’Neill
	Title:	Chief Financial Officer