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Calfrac Well Services Ltd

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Calfrac Well Services Ltd CALFRAC WELL SERVICES LTD. ANNUAL INFORMATION FORM For the year ended December 31, 2020 March 26, 2021 TABLE OF CONTENTS CALFRAC WELL SERVICES LTD. ........................................................................................................................ 1 Intercorporate Relationships ..................................................................................................................................... 1 GENERAL DEVELOPMENT OF THE BUSINESS ............................................................................................... 2 The Corporation ........................................................................................................................................................ 2 Development of the Business .................................................................................................................................... 2 Description of Services ............................................................................................................................................. 6 Industry ..................................................................................................................................................................... 8 Competitive Strengths ............................................................................................................................................. 10 Business Strategy .................................................................................................................................................... 11 Customers ................................................................................................................................................................ 13 Contracts ................................................................................................................................................................. 13 Suppliers .................................................................................................................................................................. 13 Competition ............................................................................................................................................................. 13 Regulation ............................................................................................................................................................... 13 Environmental Protection and Social Responsibility .............................................................................................. 14 Intellectual Property ................................................................................................................................................ 16 Operating Bases and Offices ................................................................................................................................... 16 Employees ............................................................................................................................................................... 16 RISK FACTORS ....................................................................................................................................................... 16 MARKET FOR SECURITIES ................................................................................................................................. 28 PRIOR SALES ........................................................................................................................................................... 29 DESCRIPTION OF CAPITAL STRUCTURE....................................................................................................... 29 Common Shares ...................................................................................................................................................... 29 Warrants .................................................................................................................................................................. 29 1.5 Lien Convertible Secured Notes ........................................................................................................................ 29 Second Lien Secured Notes ..................................................................................................................................... 31 DIVIDENDS ............................................................................................................................................................... 31 DIRECTORS AND OFFICERS ............................................................................................................................... 32 Directors and Officers ............................................................................................................................................. 32 Cease Trade Orders or Bankruptcies ....................................................................................................................... 34 Penalties or Sanctions.............................................................................................................................................. 34 Conflicts of Interest ................................................................................................................................................. 35 LEGAL PROCEEDINGS ......................................................................................................................................... 35 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS.................................... 36 TRANSFER AGENT AND REGISTRAR .............................................................................................................. 38 MATERIAL CONTRACTS ..................................................................................................................................... 38 INTERESTS OF EXPERTS ..................................................................................................................................... 39 AUDIT COMMITTEE INFORMATION ............................................................................................................... 39 Audit Committee Charter ........................................................................................................................................ 39 Composition of Audit Committee ........................................................................................................................... 40 Relevant Education and Experience ........................................................................................................................ 40 Pre-Approval Policies and Procedures .................................................................................................................... 40 External Audit Fees by Category ............................................................................................................................ 40 - 3 - ADDITIONAL INFORMATION ............................................................................................................................. 41 APPENDIX "A" A-1 FORWARD-LOOKING STATEMENTS Certain statements contained in this annual information form constitute forward-looking statements. These statements relate to future events or the future performance of the Corporation (as hereinafter defined). All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in these forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this annual information form should not be unduly relied upon. These statements speak only as of the date of this annual information form. Other than as required by applicable laws, the Corporation does not intend, and does not assume any obligation, to update these forward-looking statements. In particular, this annual information form contains forward-looking statements pertaining to the following: • supply and demand for oilfield services; • the impact of the novel coronavirus ("COVID-19") pandemic on the Canadian and world economy, worldwide demand for oil and gas and the Corporation's business generally; • expectations regarding trends in, and the growth prospects of, the global oil and gas industry; • commodity prices; • expectations regarding the Corporation's financing activities and restrictions, including with regard to the Credit Agreement (as hereinafter defined), the Second Lien Notes Indenture (as hereinafter defined) and the 1.5 Lien Notes Indenture (as hereinafter defined), and the Corporation's ability to raise capital; • the Corporation's growth strategy and prospects; • operating strategies; • capital expenditure programs; • the impact of environmental regulations and economic reforms and sanctions on the Corporation's business; • exposure under existing legal proceedings;
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