Page 4 of 9 – SEC Filing
| Item 3. | SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION |
| The Reporting Person used a total of $2,038,045.25 to acquire the Common Stock reported in this Schedule 13D (the “Purchased Shares“). The source of the funds used to acquire the shares of Common Stock reported herein is the working capital of Fir Tree Funds. |
| Item 4. | PURPOSE OF TRANSACTION |
| On March 3, 2017, a Fir Tree Fund, entered into a Purchase, Sale and Assignment Agreement with certain funds managed by Albright Capital Management LLC (“ACM“), the Issuer and certain subsidiaries of the Issuer (the “Purchase, Sale and Assignment Agreement“) for: (i) the purchase of the Common Stock reported in this Schedule 13D and the Existing ACM Note (as defined below), (ii) the purchase of 1,000 Class C Shares of Eco-Stim Energy Solutions Argentina S.A., an affiliate of the Issuer and (iii) the assignment and delegation to the Fir Tree Fund of all rights, powers, benefits, privileges, discretions, and duties and interest in, to and under the agreements related to such securities. | |
| The foregoing description is a summary of the Purchase, Sale and Assignment Agreement and does not purport to be complete and is qualified in its entirety by reference to the full text thereof, which is filed as Exhibit 1 to this Schedule 13D and incorporated herein by reference. | |
| Simultaneously, the Fir Tree Fund and the Issuer entered into an Amended and Restated Convertible Note Facility Agreement (the “Amended and Restated Convertible Note Facility Agreement“). Pursuant to the terms of the Amended and Restated Convertible Note Facility Agreement, the Issuer issued a secured promissory note (the “Amended and Restated Convertible Note“) in a principal amount of $22 million, which replaces the Issuer’s outstanding 14% convertible notes due 2018 in the aggregate principal amount of $22,000,000 issued to ACM in 2014 (the “Existing ACM Note“), and a secured promissory note (the “New Convertible Note“, and together with the Amended and Restated Convertible Note, the “Notes“) in a principal amount of approximately $19.4 million, representing an additional $17 million aggregate principal amount of convertible notes purchased from the Issuer by the Fir Tree Fund on March 6, 2017 and approximately $2.4 million principal amount of convertible notes issued to the Fir Tree Fund in payment of accrued and unpaid interest on the Existing ACM Note acquired by FT Holdings from ACM. | |
| The New Convertible Note (and, in certain circumstances, the Amended and Restated Convertible Note) will be automatically converted into Common Stock at a price of $1.40 per share, contingent upon the Issuer receiving approval of the conversion by shareholders representing a majority of the outstanding Common Stock not held by the Fir Tree Fund, and subject to certain other conditions set forth in the Notes and the Amended and Restated Convertible Note Facility Agreement. The Issuer will seek prompt shareholder approval of the conversion of the Notes. Assuming the conversion of both Notes at the current conversion price, the Issuer will issue 29,538,787 shares of Common Stock to Fir Tree, which together with the shares of Common Stock reported herein, would represent approximately 67.2% of the shares of Common Stock, assuming there remains 14,416,727 (see Item 5(a)) shares of Common Stock outstanding as of such time. The unpaid principal amount of the Notes bears an interest rate of 20% per annum and matures on May 28, 2018. |
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