UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): ~~August~~September 1723, 2020

Hi-Crush Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-35630

90-0840530

(State or Other Jurisdiction of

Incorporation or Organization)

(Commission

File Number)

(IRS Employer

Identification No.)

1330 Post Oak Blvd., Suite 600

Houston, Texas 77056

(Address of Principal Executive Offices and Zip Code)

(713) 980-6200

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following (See General Instruction A.2 below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

symbol*

Name of each exchange

on which registered

Common stock, par value $0.01 per share

HCRSQ

New York Stock Exchange

The registrant’s common stock began trading on the OTC Pink Open Market on July 14, 2020 under the symbol “HCRSQ.”

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

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. ☐

Item 1.0103. ~~Entry~~Bankruptcy ~~into~~or ~~Material Definitive Agreement~~Receivership.

As previously disclosed, on July 12, 2020 (the “Petition Date”), Hi-Crush Inc. (the “Company” or “we”) and each of its direct and indirect wholly-owned domestic subsidiaries (collectively with the Company, the “Debtors”) commenced voluntary cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). ~~The~~On ~~Chapter~~August 15, 112020, ~~cases~~the ~~are~~Debtors ~~being~~filed ~~jointly~~with ~~administered~~the ~~under~~Bankruptcy Court the ~~caption~~proposed ~~“In~~Joint ~~re:~~Plan of Reorganization for Hi-Crush Inc., etand ~~al.,”~~its ~~Case~~Affiliate ~~No. 20-33495. The~~ Debtors ~~will~~under ~~continue~~Chapter to11 ~~operate~~of ~~their~~the ~~businesses~~Bankruptcy Code, as ~~“debtors-in-possession”~~described ~~under~~below ~~the~~(as ~~jurisdiction~~amended, ofmodified ~~the~~or ~~Bankruptcy~~supplemented ~~Court~~from ~~and~~time into ~~accordance~~time, ~~with~~ the ~~applicable~~“Plan”). ~~provisions~~On ofSeptember 23, 2020, the Bankruptcy ~~Code~~Court ~~and~~entered ~~orders~~an oforder ~~the~~confirming ~~Bankruptcy~~and ~~Court~~approving the Plan.

~~Backstop~~Plan ~~Purchase~~of ~~Agreement~~Reorganization

OnThe ~~August 17,~~following ~~2020,~~is a summary of the ~~Debtors~~material ~~and~~terms of the ~~backstop~~Plan. ~~parties~~This ~~thereto~~summary (highlights only certain substantive provisions of the ~~“Backstop~~Plan ~~Parties”)~~and ~~entered~~is ~~into~~not intended to be a ~~Backstop~~complete ~~Purchase~~description ~~Agreement~~of (the ~~“Backstop~~Plan. ~~Agreement”)~~Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan. This summary is qualified in its entirety by reference to the full text of the Plan, which is attached hereto as Exhibit 2.1 and incorporated herein by reference.

Pursuant to the ~~terms of the Debtors’ prearranged plan of reorganization (the “~~Plan”): in the Chapter 11 Cases, and subject to approval by the Bankruptcy Court in connection with confirmation of the Plan, the Company intends to offer (the “Rights Offering”) to eligible holders of its outstanding 9.50% senior unsecured notes due 2026 (“Senior Notes” and the allowed claims arising under the Senior Notes, the “Senior Notes Claims”), including the Backstop Parties, and certain other eligible holders of unsecured claims, subscription rights to purchase new senior secured convertible notes (the “New Senior Convertible Notes”) issued by the Company, with a 51⁄2-year maturity in an aggregate principal amount of $48.1 million (inclusive of the Put Option Notes (as defined below)), upon the Company’s emergence from bankruptcy.

~~Subject~~• toOn the ~~terms~~effective ~~and~~date ~~conditions~~of ~~contained~~the inPlan (the ~~Backstop~~“Effective ~~Agreement~~Date”), the ~~Backstop~~reorganized ~~Parties~~Debtors ~~committed~~will toenter ~~purchase,~~into ~~severally~~a ~~and~~new ~~not~~credit ~~jointly,~~agreement ~~the~~providing ~~New~~for ~~Senior~~a ~~Convertible~~new ~~Notes~~senior ~~that~~secured ~~are~~asset-based ~~not~~revolving ~~duly~~loan ~~subscribed~~facility ~~for~~in ~~pursuant to~~ the ~~Rights~~aggregate ~~Offering~~principal atcommitment aamount ~~price~~of ~~equal~~$25 tomillion ~~$1,000~~and ~~per~~a $~~1,000~~25 inmillion ~~principal~~letter ~~amount~~ of ~~the~~credit ~~New~~sub-limit ~~Senior Convertible Notes purchased by such Backstop Party~~ (the “~~Backstop~~Exit ~~Commitment~~ABL Facility”)., Aswhich ~~consideration~~will ~~for~~refinance ~~the~~and ~~commitment~~replace by the ~~Backstop~~Debtors’ ~~Parties,~~$25 ~~the~~million ~~Company has agreed to issue additional New Senior Convertible Notes~~ debtor-in-possession ansuperpriority ~~aggregate~~secured ~~principal~~asset-based ~~amount~~revolving ofloan ~~$4,800,000~~financing facility (the “~~Put~~DIP ~~Option~~ABL ~~Notes~~Facility”), toand the ~~Backstop~~letters ~~Parties~~of ~~pro~~credit ~~rata~~outstanding ~~based~~under on the ~~respective~~DIP ~~amounts~~ABL ofFacility ~~Senior~~will ~~Notes~~be ~~Claims~~deemed ~~held~~outstanding byunder ~~each~~the ~~Backstop~~Exit ~~Party.~~ABL Facility;

• The ~~transactions~~Debtors ~~contemplated~~will byconduct ~~the~~a ~~Backstop~~$43.3 ~~Agreement~~million ~~are~~rights ~~conditioned~~offering ~~upon~~ (the ~~satisfaction~~“Rights orOffering”) ~~waiver~~to eligible holders of ~~customary~~allowed ~~conditions~~claims ~~for~~arising ~~transactions~~under ofand ~~this~~in ~~nature,~~connection ~~including,~~with ~~without~~the ~~limitation,~~Company’s ~~that~~prepetition 9.50% senior notes due 2026 (i) the ~~Bankruptcy~~“Senior ~~Court~~Notes” ~~shall~~and ~~have~~such ~~approved~~claims, the ~~Rights~~“Senior ~~Offering,~~Notes ~~(ii~~Claims”) ~~the~~ ~~Bankruptcy~~and ~~Court~~eligible ~~shall~~holders ~~have~~of ~~confirmed~~allowed ~~the~~general ~~Plan~~unsecured ~~and~~claims (~~iii)~~ the ~~Rights~~“General ~~Offering~~Unsecured ~~shall~~Claims”), ~~have~~pursuant ~~been~~to ~~conducted~~which ~~and~~such ~~consummated~~holders inwill ~~accordance~~be ~~with~~granted rights to purchase new secured convertible notes (the ~~Plan.~~“New Secured Convertible Notes”);

• The Backstop Agreement contains customary representations, warranties and covenants by each of the Debtors and the Backstop Parties, including covenants by the Debtors regarding the conduct of the businesses of the Debtors prior to the consummation of the Rights Offering. ~~The~~will ~~Backstop~~be ~~Agreement~~backstopped ~~also contains customary termination rights exercisable~~ by ~~the Debtors and/or~~ certain ofholders ~~the Backstop Parties upon the occurrence~~ of ~~certain events specified therein, including, without limitation, (i)~~ the ~~consummation~~Senior ofNotes ~~an Alternative Transaction (as defined in the Backstop Agreement) by the Debtors, (ii) a material breach of any representation, warranty~~ or ~~covenant~~their inrespective ~~the~~affiliates ~~Backstop~~pursuant ~~Agreement by the Debtors or the Backstop Parties, as applicable, subject~~ to ~~certain~~a ~~cure~~backstop ~~provisions,~~commitment or (iii) the failure to consummate the transactions contemplated by the Backstop Agreement by October 10, 2020. Subject to the terms and conditions of the Backstop Agreement, if any Debtor consummates, or announces its intention to enter into, an Alternative Transaction or files any pleading or document with the Bankruptcy Court in support thereof, the Debtors may be required to pay the Backstop Parties an aggregate amount of $4,800,000 to non-defaulting Backstop Parties as liquidated damages. agreement;

•

The claims arising under the Debtors’ $40 million debtor-in-possession superpriority secured delayed-draw term loan financing facility will be paid in full in cash from the proceeds of the Rights Offering;

•

Under the Plan, certain classes of claims and equity interests will receive the following treatment:

•

Administrative expense claims, priority tax claims, other priority claims, and other secured claims will be paid in full (or receive such other treatment rendering such claims unimpaired);

•

Holders of Senior Notes Claims will receive (a) rights to participate in the Rights Offering (which shall be attached to each allowed Senior Notes Claim and transferable with such allowed Senior Notes Claim as set forth in the procedures governing the Rights Offering, but the rights may only be exercised to the extent the holder is an “Accredited Investor,” as such term is defined in Rule 501 of the Securities Act of 1933, as amended (the “Securities Act”)) and (b) 100% of the new common stock to be issued by the reorganized Debtors (the “New Common Stock”) shared pro rata with the holders of allowed General Unsecured Claims (subject to dilution on account of (i) the New Common Stock issued upon conversion of the New Secured Convertible Notes, and (ii) the New Common Stock issued to management of the reorganized Debtors under a management equity incentive plan (the “MIP Equity”));

~~The~~• ~~foregoing~~Holders ~~description~~ of ~~the~~General ~~Backstop~~Unsecured ~~Agreement~~Claims ~~does~~will ~~not~~receive ~~purport~~(a) rights to participate in the Rights Offering (which will be ~~complete~~attached to each allowed General Unsecured Claim and istransferable ~~qualified~~with such allowed General Unsecured Claim as set forth in ~~its~~the ~~entirety~~procedures bygoverning ~~reference~~the Rights Offering, but the rights may only be exercised to the ~~full~~extent ~~text~~the holder is an Accredited Investor) and (b) 100% of the ~~Backstop~~New ~~Agreement,~~Common aStock ~~copy~~shared ofpro ~~which~~rata iswith ~~filed~~the asholders ~~Exhibit~~of ~~10.1~~allowed toSenior ~~this~~Notes ~~Current~~Claims ~~Report~~(subject to dilution on ~~Form~~account ~~8-K~~of ~~and~~(i) isthe ~~incorporated~~New ~~herein~~Common byStock ~~reference.~~issued upon conversion of the New Secured Convertible Notes, and (ii) the MIP Equity); and

•

Existing equity interests in Hi-Crush Inc. will be cancelled and holders of such equity interests will receive no distribution or recovery on account of such equity interests;

•

The composition of the new board of directors of the reorganized Company (the “New Board”) will consist of five (5) directors in total, which will include the Chief Executive Officer of reorganized Company and other directors designated by certain holders of Senior Notes prior to the Effective Date;

•

After the Effective Date, the New Board will adopt a management equity incentive plan for the benefit of the management of the reorganized Debtors (the “MIP”). The MIP Equity issued pursuant to such MIP shall dilute all New Common Stock equally, including the New Common Stock issued upon conversion of the New Secured Convertible Notes after the Effective Date; and

•

The Plan will contain customary releases, exculpations, and injunctions concerning certain parties in interest, as outlined in the Plan.

The foregoing description of the Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Plan, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Although the Debtors intend to pursue the transactions (collectively, the “Transaction”) contemplated in the Plan in accordance with the terms set forth therein, there can be no assurance that the Debtors will be successful in completing the Transaction, whether on the same or different terms.

Any new securities to be issued pursuant to the Plan have not been registered under the Securities Act or any state securities laws. Therefore, the new securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws. This Current Report on Form 8-K does not constitute an offer to sell or buy, nor the solicitation of an offer to sell or buy, any securities referred to herein, nor in this Current Report on Form 8-K a solicitation of consents to or vote to accept any chapter 11 plan. Any solicitation or offer will only be made pursuant to a confidential offering memorandum and disclosure statement and only to such persons and in such jurisdictions as is permitted under applicable law.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements give our current expectations, and contain projections of results of operations or of financial condition, or forecasts of future events. Words such as “will,” “may,” “should,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “hope,” “plan,” “estimate,” “anticipate,” “could,” “believe,” “project,” “budget,” “potential,” “likely,” or “continue,” and similar expressions are used to identify forward-looking statements. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering

these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in the Company’s reports filed with the Securities and Exchange Commission (the “SEC”), including those described under Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and any subsequently filed Form 10-Q or Form 8-K. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the risk factors in our reports filed with the SEC or the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward looking statements include: the ability to consummate the plan of reorganization; risks attendant to the bankruptcy process, including our ability to obtain Bankruptcy Court approvals with respect to motions filed in the Chapter 11 Cases, the outcomes of Bankruptcy Court rulings and the Chapter 11 Cases in general and the length of time that we may be required to operate in bankruptcy; the effectiveness of the overall restructuring activities pursuant to the Chapter 11 Cases and any additional strategies that we may employ to address our liquidity and capital resources; the actions and decisions of creditors, regulators and other third parties that have an interest in the Chapter 11 Cases, which may interfere with the ability to consummate the plan of reorganization; restrictions on us due to the terms of any debtor-in-possession credit facility that we will enter into in connection with the Chapter 11 Cases and restrictions imposed by the Bankruptcy Court; and the other factors listed in our reports filed with the SEC from time to time. All forward-looking statements are expressly qualified in their entirety by this cautionary note. The Company’s forward-looking statements speak only as of the date made and the Company undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

Item 9.01

Financial Statements and Exhibits

(d) Exhibits

ExhibitNumber		Exhibit Description
10.1*		Backstop Purchase Agreement, dated August 17, 2020, by and among Hi-Crush Inc., OnCore Processing LLC, Hi-Crush Whitehall LLC, Hi-Crush Augusta LLC, PDQ Properties LLC, Hi-Crush Wyeville Operating LLC, D & I Silica, LLC, Hi-Crush Blair LLC, Hi-Crush LMS LLC, Hi-Crush Investments Inc., Hi-Crush Permian Sand LLC, Hi-Crush Proppants LLC, Hi-Crush PODS LLC, Hi-Crush Canada Inc., Hi-Crush Holdings LLC, Hi-Crush Services LLC, BulkTracer Holdings LLC, Pronghorn Logistics Holdings, LLC, FB Industries USA Inc., PropDispatch LLC, Pronghorn Logistics, LLC, FB Logistics LLC and the backstop parties party thereto.
2.1		Joint Plan of Reorganization for Hi-Crush Inc. and its Affiliate Debtors Under Chapter 11 of the Bankruptcy Code.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

*4 ~~In accordance with Item 601(a)(5) of Regulation S-K, certain schedules or similar attachments to this exhibit have been omitted from this filing.~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Hi-Crush Inc.

Date: August 18, 2020

/s/ J. Philip McCormick, Jr.

Date: September 29, 2020

/s/ J. Philip McCormick, Jr.

J. Philip McCormick, Jr.

Chief Financial Officer

Filing Compare · Hi-Crush Inc.