Pure Acquisition Corp. Makes a Few Changes

Pure Acquisition Corp. (PACQ), announced a few changes this morning, mostly concerning amending many of the dates within their agreements since they have previously extended their deadline and are heading into another extension vote on February 17th.  At the February 17th vote, Pure will be asking to extend to May 21, 2020, with a $0.033 per share contribution to trust for non-redeeming shareholders.

However, the more notable change is regarding Pure’s Forward Purchase Agreement (“FPA”). Previously, PACQ had secured a $150 million FPA at their IPO, where HPEP I, an affiliate of the Sponsor, agreed to purchase 15,000,000 of units at $10.00 (15,000,000 shares of Class A Common Stock  and 7,500,000 warrants).  This has been amended now so that HPEP I, will assign its rights and obligations to HighPeak Energy Partners II, LP, and HighPeak Energy Partners III, LP, both also affiliates of Sponsor, AND the number of warrants to be purchased is reduced to 5,000,000 (down from 7,500,000), effectively purchasing only a 1/3 of a warrant in the unit, rather than the 1/2 warrant that matched the public unit.

Keep in mind that Pure is in the process of its third tender offer for its warrants (at $1.00 per warrant) since they still have 3,158,195 public warrants remaining outstanding (down from their original 20,700,000).  So by reducing the FPA amount of warrants purchased, they should be able to close their transaction with a much better looking warrant overhang. Every little bit helps.

Look for results post-Pure vote on February 17th.