What changed in this filing

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Item 1. Financial Statements

2026-08-10 compared with 2026-05-11 · 196 added, 82 removed, 417 unchanged (40% of the section changed)

3 unchanged sentences

(in thousands, except par value)

March 31, December 31,

June 30, December 31,

Current Assets:

9 unchanged sentences

Property and equipment, net of accumulated depreciation 22,047 20,519

Goodwill 824 —

Intangible assets, net of accumulated amortization 1,139 —

Other assets 14,912 10,619

24 unchanged sentences

(in thousands, except earnings per share)

Three months ended

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Rental $ 49,433 $ 39,580 $ 96,548 $ 78,490

16 unchanged sentences

Interest expense ( 4,442 ) ( 3,243 ) ( 8,470 ) ( 6,413 )

Interest income 36 — 36 —

Other income (expense) 29 104 ( 97 ) 103

18 unchanged sentences

Vesting of restricted stock/units — — 22 — — — — — —

Taxes paid related to net shares settlement of equity awards — — — — ( 6 ) — — — ( 6 )

Taxes paid related to net share settlement of equity awards — — — — ( 6 ) — — — ( 6 )

Net income — — — — — 4,854 — — 4,854

March 31, 2025 — $ — 13,784 $ 138 $ 118,768 $ 156,362 1,310 $ ( 15,004 ) $ 260,264

Stock-based compensation — — — — 579 — — — 579

Vesting of restricted stock/units — — 22 — 108 — — — 108

Exercise of common stock options — — 5 — 75 — — — 75

Net income — — — — — 5,188 — — 5,188

June 30, 2025 — $ — 13,811 $ 138 $ 119,530 $ 161,550 1,310 $ ( 15,004 ) $ 266,214

Preferred Stock Common Stock Additional Paid-In Capital Retained Earnings Treasury Stock Total Stockholders’ Equity

4 unchanged sentences

Exercise of common stock options — — 2 1 66 — — — 67

Taxes paid related to net shares settlement of equity awards — — ( 1 ) — ( 195 ) — — — ( 195 )

Taxes paid related to net share settlement of equity awards — — ( 1 ) — ( 195 ) — — — ( 195 )

Dividends declared — — — — — ( 1,396 ) — — ( 1,396 )

1 unchanged sentence

March 31, 2026 — $ — 13,907 $ 139 $ 121,261 $ 174,138 1,310 $ ( 15,004 ) $ 280,534

Stock-based compensation — — — — 851 — — — 851

Vesting of restricted stock/units — — 24 1 412 — — — 413

Exercise of common stock options — — 34 — 961 — — — 961

Taxes paid related to net share settlement of equity awards — — — — ( 193 ) — — — ( 193 )

Issuance of common stock related to the Flatrock acquisition — — 242 2 9,997 — — — 9,999

Dividends declared — — — — — ( 1,909 ) — — ( 1,909 )

Net income — — — — — 3,830 — — 3,830

June 30, 2026 — $ — 14,207 $ 142 $ 133,289 $ 176,059 1,310 $ ( 15,004 ) $ 294,486

See accompanying notes to these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three months ended

Six months ended

CASH FLOWS FROM OPERATING ACTIVITIES:

9 unchanged sentences

Provision for credit losses 88 208

Loss on company owned life insurance 125 17

Loss (gain) on company owned life insurance 103 ( 17 )

Changes in operating assets and liabilities:

6 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of rental equipment, property and other equipment ( 15,247 ) ( 19,256 )

Purchases of rental equipment, property and other equipment ( 34,033 ) ( 45,065 )

Acquisition, net of cash acquired ( 108,680 ) —

Proceeds received from insurance for damages to equipment — 99

Proceeds from disposition of assets, net 37 4

7 unchanged sentences

Taxes paid related to net share settlement of equity awards ( 388 ) ( 6 )

NET CASH USED IN FINANCING ACTIVITIES ( 5,514 ) ( 2,006 )

NET CASH PROVIDED BY FINANCING ACTIVITIES 94,293 10,882

NET CHANGE IN CASH AND CASH EQUIVALENTS 84 ( 1,817 )

7 unchanged sentences

Accrued purchases of property and equipment $ 2,967 $ 7,254

Right of use assets acquired through an operating lease $ 1,632 $ —

Common stock issued in connection with acquisition $ 9,999 $ —

Common stock issued to settle liability-classified awards $ 413 $ —

See accompanying notes to these unaudited condensed consolidated financial statements.

4 unchanged sentences

Natural Gas Services Group, Inc.

(the “Company,” “NGS,” “Natural Gas Services Group,” “we,” “us” or “our”) (a Colorado corporation), is a leading provider of natural gas and electric compression equipment, technology and services to the energy industry.

(the “Company,” “NGS,” “Natural Gas Services Group,” “we,” “us” or “our”) (a Texas corporation), is a leading provider of natural gas and electric compression equipment, technology and services to the energy industry.

We rent, design, install, service and maintain compressors and related equipment and parts for our customers’ oil and gas production and processing facilities, generally using equipment from OEM suppliers along with limited in-house assembly.

2 unchanged sentences

Principles of Consolidation and Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) and include the accounts of the Company, its subsidiary, NGSG Properties, LLC and the rabbi trust associated with our deferred compensation plan.

The accompanying unaudited Condensed Consolidated Financial Statements were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) and include the accounts of the Company and its subsidiaries, all of which are wholly-owned, and the rabbi trust associated with our deferred compensation plan.

All significant intercompany accounts and transactions for the periods presented have been eliminated in consolidation.

These financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for the fair presentation of our financial position as of March 31, 2026, and the results of our operations for the three months ended March 31, 2026, and 2025, respectively.

These financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for the fair presentation of our financial position as of June 30, 2026, and the results of our operations for the three and six months ended June 30, 2026, and 2025, respectively.

As permitted by the rules and regulations of the SEC, the accompanying Condensed Consolidated Financial Statements do not include all disclosures normally required by GAAP.

5 unchanged sentences

Based on these facts and circumstances, we have concluded that we operate in one business segment.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2026.

The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2026.

Recently Issued Accounting Pronouncements

3 unchanged sentences

The adoption of ASU 2024-03 is not expected to have a material impact on our Consolidated Financial Statements or disclosures.

Business Combination

Flatrock Acquisition

On June 12, 2026 (the “Acquisition Date”), we executed and closed a Securities Purchase Agreement (the “SPA”) with Flatrock Compression Holdings, LLC (“Flatrock”), the holders of all of the membership interests of Flatrock (the “Sellers”) and Mule Deer Sky LLC, acting as the Sellers Representative, to acquire all of the issued and outstanding membership interests of Flatrock from the Sellers, including a current rented fleet of 87,233 horsepower, in exchange for (i) 241,803 shares of common stock, par value $ 0.01 per share of the Company (“Common Stock”), (ii) $ 108.9 million in cash, subject to customary post-closing adjustments, and (iii) the right to receive certain royalty payments pursuant to a royalty agreement (the “Flatrock Acquisition”).

The Flatrock Acquisition represents the execution of our business strategy to pursue accretive mergers and acquisitions.

Furthermore, the Flatrock Acquisition increases our operational density in the Permian Basin and the Eagle Ford as well as adding meaningful customer diversification and attractive opportunities for growth with several new large customers, and complements our fleet with the addition of significant large horsepower and electric motor units.

The cash portion of the purchase price was sourced from borrowings under our senior secured revolving credit agreement (as amended and restated from time to time, the “Credit Facility”), as amended by the Fifth Amendment to the Amended and Restated Credit Agreement (the “Fifth Amendment”).

The Flatrock Acquisition has been accounted for by applying the acquisition method of accounting which contemplates the assets acquired and liabilities assumed to be recorded at their fair values on the Acquisition Date.

The excess of the total consideration transferred over the fair values of the net assets acquired has been recorded as goodwill.

The preliminary purchase price allocation provided below is based upon preliminary estimates and assumptions and is subject to certain adjustments upon management’s review of the final valuations and the working capital adjustment, among others.

We are currently in the process of finalizing final valuations attributable to property and equipment, identifiable intangible assets, deferred income taxes, contingent consideration and goodwill.

Any adjustments subsequent to the Acquisition Date could impact future depreciation and amortization as well as our income tax provision.

Transaction Consideration

The following table summarizes the estimated fair value of the consideration transferred:

Common stock issued (2)

Contingent consideration 53

(1) Includes $ 45.7 million to repay Flatrock’s outstanding line of credit obligation.

(2) Represents the issuance of 241,803 shares of Common Stock to the Sellers (the number of shares was determined from the 30-day volume weighted-average price as provided for in the SPA).

Preliminary Purchase Price Allocation

The following table summarizes the preliminary purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed as of the Acquisition Date:

Cash and cash equivalents $ 248

Trade accounts receivable 2,753

Inventory 6,893

Prepaid expenses and other 181

Rental equipment 100,596

Property and equipment 9,711

Other assets 1,369

Intangible assets 1,151

Accounts payable ( 1,898 )

Accrued liabilities ( 1,824 )

Deferred income taxes ( 315 )

Other long-term liabilities ( 709 )

The goodwill arising from the Flatrock Acquisition is primarily attributable to the workforce accompanying the operating assets acquired as well as the expansion of our services in the Permian Basin and Southeast Texas where we currently operate.

The goodwill is considered to have an indefinite life and will be reviewed for impairment on an annual basis and when indicators of potential impairment, if any, are present.

As the Flatrock Acquisition was structured as an asset purchase for income tax purposes, the goodwill is expected to be fully deductible for U.S.

federal income tax purposes.

Intangible assets

The intangible assets acquired include $ 0.9 million for developed technology and $ 0.3 million for a tradename, both of which are being amortized over a five-year period.

The intangible assets were valued using a “relief from royalties” methodology.

We recorded a provision for amortization of the intangible assets for less than $ 0.1 million from the Acquisition Date through June 30, 2026.

Results of Operations

The results of operations attributable to the Flatrock Acquisition have been included in our Condensed Consolidated Financial Statements from the Acquisition Date through June 30, 2026.

Total revenue attributable to the net assets acquired from Flatrock from the Acquisition Date through June 30, 2026 was $ 2.2 million and pre-tax earnings attributable to the assets acquired and liabilities assumed since the Acquisition Date was $ 0.8 million.

Transaction costs

In connection with the Flatrock Acquisition, we engaged certain advisors and consultants to assist us with various activities to develop, execute and report the transaction.

A substantial portion of costs were incurred during the three months ended June 30, 2026 and we anticipate additional transaction costs to be incurred during the third quarter of 2026, primarily attributable to advisory costs associated with the valuation, purchase price allocation and financial reporting.

The following table summarizes transaction costs, primarily legal and diligence, directly attributable to the Flatrock Acquisition incurred during the three months ended June 30, 2026 which was recorded in selling, general and administrative expenses:

Professional fees (1)

Other costs 206

(1) Includes legal, business diligence, financial advisory and other consulting fees.

Unaudited Pro forma Financial Information

The unaudited supplemental pro forma financial information for the three and six months ended June 30, 2026 was derived by adjusting our historical financial statements in order to give effect to the Flatrock assets acquired and liabilities assumed as though the Flatrock Acquisition occurred as of January 1, 2025 and reflects the following:

• the application of our accounting policies to reflect the changes in depreciation and amortization attributable to the acquired rental equipment, property and equipment and intangible assets;

• the incremental interest expense resulting from borrowings under the Credit Facility to fund the cash component of the consideration transferred;

• the income tax effects of the adjustments described above based on our blended statutory tax rate.

The unaudited pro forma financial information presented below is presented for informational purposes only and is not necessarily indicative of the results of operations that would have occurred had the Flatrock Acquisition been consummated at the beginning of the period presented nor is it necessarily indicative of our future results of operations.

Future results may vary significantly from the results reflected in this unaudited pro forma financial information.

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Revenue $ 59,843 $ 50,486 $ 118,363 $ 101,225

Net income $ 2,852 $ 5,216 $ 10,187 $ 9,799

Trade Accounts Receivable

The following table summarizes our trade accounts receivable from customers as of the dates presented:

March 31, December 31,

June 30, December 31,

Trade accounts receivable

8 unchanged sentences

Rental revenue and sales from Occidental Permian, LTD.

(“Oxy”) and Devon Energy Corporation (“Devon”) in the three months ended March 31, 2026 and 2025 amounted to 64 percent and 55 percent of revenue on a combined basis, respectively.

(“Oxy”) and Devon Energy Corporation (“Devon”) in the six months ended June 30, 2026 and 2025 amounted to 62 percent and 57 percent of revenue on a combined basis, respectively.

No other single customer accounted for more than 10 percent of our revenues during these periods.

Likewise, Oxy’s and Devon’s accounts receivable balances amounted to 63 percent and 62 percent of our accounts receivable on a combined basis as of March 31, 2026, and December 31, 2025, respectively.

Likewise, Oxy’s and Devon’s accounts receivable balances amounted to 51 percent and 62 percent of our accounts receivable on a combined basis as of June 30, 2026, and December 31, 2025, respectively.

No other customers amounted to more than 10 percent of our accounts receivable as of these dates.

1 unchanged sentence

The following table summarizes the changes in our provision for credit losses for the periods presented:

Three months ended Year ended

March 31, December 31,

Six months ended Year ended

June 30, December 31,

Beginning balance $ 317 $ 1,249

6 unchanged sentences

The following table summarizes the components of our inventory, net of allowance for obsolescence, as of the dates presented:

March 31, December 31,

June 30, December 31,

Parts and supplies, net of allowance of $ 2,552 for each period, respectively

6 unchanged sentences

The following table summarizes the changes in our allowance for obsolescence for the periods presented:

March 31, December 31,

June 30, December 31,

Beginning balance $ 3,572 $ 5,867

19 unchanged sentences

The following table summarizes our rental equipment and accumulated depreciation as of the dates presented:

March 31, December 31,

June 30, December 31,

Compressor units $ 824,074 $ 712,693

Work-in-progress 18,511 24,894

Work-in-process 34,891 24,894

858,965 737,587

1 unchanged sentence

Rental equipment, net of accumulated depreciation $ 613,771 $ 498,525

We evaluated our rental equipment for potential impairments as of March 31, 2026, and December 31, 2025 and determined that none were present.

We retired 134 and 68 units representing 17,700 and 12,073 horsepower, with remaining carrying values of $ 0.4 million and $ 0.7 million during the three months ended March 31, 2026 and 2025, respectively.

Depreciation expense for rental equipment was $ 9.2 million and $ 7.7 million for the three months ended March 31, 2026, and 2025, respectively.

We capitalized interest totaling approximately $ 0.2 million a nd $ 0.6 million , for the three months ended March 31, 2026, and 2025, respe ctively.

We evaluated our rental equipment for potential impairments as of June 30, 2026, and December 31, 2025 and determined that none were present.

We retired 134 and 68 units representing 17,700 and 12,073 horsepower, with remaining carrying values of $ 0.4 million and $ 0.7 million during the six months ended June 30, 2026, and 2025, respectively.

Depreciation expense for rental equipment was $ 9.8 million and $ 8.0 million for the three months ended June 30, 2026 and 2025, respectively, and $ 19.0 million and $ 15.7 million for the six months ended June 30, 2026, and 2025, respectively.

We capitalized interest totaling approximately $ 0.3 million and $ 0.5 million for the three months ended June 30, 2026, and 2025, respectively, and $ 0.5 million a nd $ 1.1 million , for the six months ended June 30, 2026, and 2025, respe ctively.

Property and Equipment

The following table summarizes our property and non-rental equipment as of the dates presented:

March 31, December 31,

June 30, December 31,

Land $ 821 $ 1,562

Building 4,613 16,703

Buildings 5,006 16,703

Leasehold improvements 488 1,026

3 unchanged sentences

Vehicles 25,457 15,315

Work-in-progress 1,497 1,137

Work-in-process 2,200 1,137

39,137 43,529

1 unchanged sentence

Total $ 22,047 $ 20,519

Depreciation expense for property and equipment was $ 1.1 million and $ 0.9 million for the three months ended March 31, 2026, and 2025, respectively.

During the quarter ended March 31, 2026, we reclassified certain items of property and equipment attributable to our Former Headquarters Property with a carrying value of $ 8.8 million to assets held for sale (see Note 5 ).

Depreciation expense for property and equipment was $ 1.2 million and $ 1.0 million for the three months ended June 30, 2026 and 2025, respectively, and $ 2.3 million and $ 1.9 million for the six months ended June 30, 2026, and 2025, respectively.

During the six months ended June 30, 2026, we reclassified certain items of property and equipment attributable to our Former Headquarters Property with a carrying value of $ 8.8 million to assets held for sale (see Note 6 ).

Supplemental Balance Sheet Disclosures

The following table summarizes the components of other assets as of the dates presented:

June 30, December 31,

Corporate owned life insurance $ 2,296 $ 2,938

Capitalized hosting arrangement costs 4,366 2,361

Operating lease assets, net 3,667 2,373

Finance lease assets, net 1,269 —

Deferred issue costs 3,218 2,845

$ 14,912 $ 10,619

The following table summarizes the components of accrued liabilities as of the dates presented:

March 31, December 31,

June 30, December 31,

Accrued purchases $ 5,075 $ 4,960

Compensation 3,541 3,121

Right of use obligations 471 462

Right of use obligations - operating 722 462

Right of use obligations - finance 560 —

Interest 621 273

5 unchanged sentences

Our outstanding long-term debt consists of the following, as of the dates presented:

March 31, December 31,

June 30, December 31,

Credit facility $ 328,000 $ 230,000

We have a senior secured revolving credit agreement, as amended (the “Credit Facility”) with Texas Capital Bank, National Association as administrative agent (the “Administrative Agent”), TCBI Securities, Inc., Bank of America, N.A., and the Huntington National Bank as joint lead arrangers and joint book runners, and the lenders party thereto (the “Lenders”).

We have a Credit Facility with Texas Capital Bank, National Association as administrative agent (the “Administrative Agent”), TCBI Securities, Inc., Bank of America, N.A., and the Huntington National Bank as joint lead arrangers and joint book runners, and the lenders party thereto (the “Lenders”).

On June 12, 2026, we entered into the Fifth Amendment to the Amended and Restated Credit Agreement (the “Fifth Amendment”) with the Lenders to (i) increase the total commitment to $ 500.0 million from $ 400.0 million, (ii) provide for Regions Bank to become a participating lender and (iii) confirm that the Flatrock Acquisition is a permitted acquisition as that term is defined in the Credit Facility.

In connection with the Fifth Amendment, we incurred and paid fees of approximately $ 1.0 million.

The Credit Facility provides for a total commitment of $ 500.0 million.

4 unchanged sentences

The maturity date of the Credit Facility is February 28, 2028.

As of March 31, 2026, we had $ 226.0 million outstanding under our Credit Facility with a weighted average interest rate of 6.79 %.

As of March 31, 2026, we had approximately $ 174.0 million available for borrowing under the Credit Facility, subject to a borrowing base determination.

As of March 31, 2026, we were in compliance with all financial covenants in our Credit Facility.

As of June 30, 2026, we had $ 328.0 million of borrowings outstanding under our Credit Facility with a weighted average interest rate of 6.48 % as well as $ 0.2 million for outstanding letters of credit.

As of June 30, 2026, we had approximately $ 134.8 million available for borrowing under the Credit Facility, reflecting the applicable borrowing base determination.

As of June 30, 2026, we were in compliance with all financial covenants in our Credit Facility.

Borrowing Base .

42 unchanged sentences

Congress (“JCT”).

As a result of the submission of the refund claim to the JCT, the IRS completed their review of the income tax returns for 2015, 2016 and 2017.

result of the submission of the refund claim to the JCT, the IRS completed their review of the income tax returns for 2015, 2016, 2017 and 2019.

Our request for refund was reviewed and concluded favorably with the JCT concurring with the IRS’s conclusions.

Subsequent to a delay due to the federal government shutdown in October 2025, we received a total of $ 12.3 million in the first quarter of 2026.

This amount includes tax refunds of $ 10.2 million and related interest of $ 2.1 million for the years 2015, 2016 and 2017.

After receipt of these refunds, a total of $ 1.8 million attributable solely to 2019 remains open including an income tax refund of $ 1.5 million plus interest of $ 0.3 million.

Subsequent to a delay due to the federal government shutdown in October 2025, we received a total of $ 13.8 million through June 30, 2026.

This amount included tax refunds of $ 11.7 million and related interest of $ 2.1 million for the years 2015, 2016, 2017 and 2019.

As of June 30, 2026, we had $ 0.3 million remaining as an outstanding receivable attributable solely to interest on the 2019 refund which was subsequently received in July 2026, bringing this matter to a final closure.

Current Year Provision

Our effective income tax rate is comprised of the federal statutory rate of 21% plus a blended rate for the states in which we generate taxable income.

During the quarter ended June 30, 2026, our blended state rate was adversely impacted by the Texas Comptroller's amendments to Rule 3.588;

a change in law enacted in June 2026 that conformed the Texas cost of goods sold depreciation to current federal law.

This discrete item resulted in a 2.6 % increase to our annualized effective rate.

Commitments and Contingencies

4 unchanged sentences

Stockholders’ Equity

Common Stock and Additional Paid-In Capital

In connection with the Flatrock Acquisition, we issued 241,803 shares of Common Stock to the Sellers as a component of the total transaction consideration paid.

Dividends and Comprehensive Income

Cash dividends are considered restricted payments as defined in the Credit Facility (see N ote 9 ) and may be made provided that certain conditions are satisfied as reflected in the Credit Facility, including the absence of any defaults, among others.

Cash dividends are considered restricted payments as defined in the Credit Facility (see Note 1 0 ) and may be made provided that certain conditions are satisfied as reflected in the Credit Facility, including the absence of any defaults, among others.

With respect to the dividends presented in the table below, all of the necessary conditions have been satisfied.

2 unchanged sentences

March 31, 2026 $ 0.11 $ 1,385

June 30, 2026 $ 0.15 $ 1,894

Our comprehensive income is comprised only of our net income as there are no components that would be considered as other comprehensive income.

2 unchanged sentences

The following table summarizes our revenue disaggregated by product or service type for the periods presented:

Three months ended March 31,

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Rental $ 49,433 $ 39,580 $ 96,548 $ 78,490

1 unchanged sentence

Other (Compressors/Rebuilds) 375 373 474 1,281

980 750 1,471 2,677

Aftermarket services 988 1,052 1,849 1,598

Total revenue $ 51,401 $ 41,382 $ 99,868 $ 82,765

No amounts were recognized in revenue attributable to deferred revenue during the three months ended March 31, 2026 and 2025.

No amounts were recognized in revenue attributable to deferred revenue during the three and six months ended June 30, 2026 and 2025.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2026, and December 31, 2025, we had no deferred revenue related to unsatisfied performance obligations.

Contract Costs

We recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less.

These costs are included within Selling, general and administrative expenses in our Condensed Consolidated Statements of Operations.

As of June 30, 2026, and December 31, 2025, we had no deferred revenue related to unsatisfied performance obligations.

Stock-Based and Other Long-Term Incentive Compensation

2 unchanged sentences

(i) stock options, (ii) stock appreciation rights, (iii) restricted awards in the form of restricted stock and restricted stock units (“RSUs ”) , (iv) performance share awards, including performance share units (“PSUs ” ) and (v) other equity-based awards.

After consideration of the activity described in detail below, a total of 530,393 shares remained available for grant under the Equity Incentive Plan as of March 31, 2026.

After consideration of the activity described in detail below, a total of 500,369 shares remained available for grant under the Equity Incentive Plan as of June 30, 2026.

The Equity Incentive Plan expires on June 20, 2034.

1 unchanged sentence

The following table summarizes the total stock-based compensation expense recognized during the periods presented:

Three months ended March 31,

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Equity-classified $ 851 $ 579 $ 1,430 $ 938

Liability-classified (1)

88 137 226 137

$ 939 $ 716 $ 1,656 $ 1,075

(1) Represents compensation expense associated with awards that may be settled in cash at the option of the grantee.

2 unchanged sentences

All options granted after 2025, including those indicated below, were granted under the Equity Incentive Plan.

A summary of all option activity during the three months ended March 31, 2026 is presented below:

A summary of all option activity during the six months ended June 30, 2026, is presented below:

Number of Shares Underlying

7 unchanged sentences

Expired — $ — $ —

Outstanding, March 31, 2026 123,085 $ 23.98 7.24 $ 1,694

Exercisable, March 31, 2026 55,753 $ 20.82 5.61 $ 943

The following table summarizes information about our stock options outstanding as of March 31, 2026:

Outstanding, June 30, 2026 86,483 $ 24.41 7.96 $ 1,639

Exercisable, June 30, 2026 29,321 $ 19.17 6.24 $ 727

The following table summarizes information about our stock options outstanding as of June 30, 2026:

Range of Exercise Prices:

8 unchanged sentences

86,483 7.96 $ 24.41 29,321 $ 19.17

The following table summarizes changes in our unvested stock options during the three months ended March 31, 2026:

The following table summarizes changes in our unvested stock options during the six months ended June 30, 2026:

Shares Weighted Average Grant Date Fair Value Per Share

4 unchanged sentences

Canceled/Forfeited ( 7,583 ) $ 12.23

Unvested, March 31, 2026

Unvested, June 30, 2026

57,162 $ 13.91

As of March 31, 2026, there was a total of approximately $ 0.5 million of unrecognized compensation cost related to unvested options which is expected to be recognized over the next 2.09 years.

As of June 30, 2026, there was a total of approximately $ 0.5 million of unrecognized compensation cost related to unvested options which is expected to be recognized over the next 2.01 years.

Time-Vested Restricted Stock and Restricted Stock Units

The following table summarizes all restricted stock and RSU activity during the three months ended March 31, 2026 is presented below:

The following table summarizes all restricted stock and RSU activity during the six months ended June 30, 2026:

Shares Weighted Average

Grant Date Fair Value Weighted

Contractual Life (years) Aggregate

Grant Date Fair Value

Outstanding, December 31, 2025 105,465 $ 20.82

2 unchanged sentences

Canceled/Forfeited ( 2,803 ) $ 30.27

Outstanding, March 31, 2026 123,128 $ 27.57 5.84 $ 5,225

As of March 31, 2026, there was a total of approximately $ 2.9 million of unrecognized compensation cost related to unvested restricted stock and RSUs which is expected to be recognized over the next 2.45 years.

Outstanding, June 30, 2026 133,025 $ 30.77

As of June 30, 2026, there was a total of approximately $ 3.6 million of unrecognized compensation cost related to unvested restricted stock and RSUs which is expected to be recognized over the next 2.05 years.

Cash Settled Restricted Stock Units

The 2025 and 2024 grants of RSUs to the independent Board members that can be settled in cash represent liability-classified awards.

Compensation expense associated with these awards is based upon the fair value of NGS common stock at each reporting period relative to that portion of the service period that has passed.

Compensation expense associated with these awards is based upon the fair value of Common Stock at each reporting period relative to that portion of the service period that has passed.

Accordingly, the compensation expense is variable in nature.

The following table summarizes all cash settled RSU activity during the six months ended June 30, 2026 is presented below:

Shares Weighted Average

Grant Date Fair Value Weighted

Contractual Life (years) Aggregate

Grant Date Fair Value

Outstanding, December 31, 2025 13,812 $ 24.60

Granted — $ —

Vested — $ — $ —

( 13,812 ) $ 24.60

Canceled/Forfeited — $ —

Outstanding, March 31, 2026 13,812 $ 24.60 0.12 $ 340

Outstanding, June 30, 2026 — $ —

(1) Of the total awards that vested, 4,456 RSUs were settled in cash and the remaining 9,356 RSUs were settled in shares.

Performance Share Units

2 unchanged sentences

With respect to vesting, the PSUs have both a service condition and a market condition.

Due to the presence of the TSR measurement for the common equity of the peer companies, including NGS common stock, which is deemed a “market condition,” the grant-date fair values of the PSUs have been determined using a binomial pricing model, or a Monte Carlo simulation model.

The following table summarizes the weighted average grant date fair values of PSUs granted and the assumptions used in the Monte Carlo simulation model for the determination of the grant date fair values of our PSUs granted during the three months ended March 31, 2026:

Due to the presence of the TSR measurement for the common equity of the peer companies, including the Company’s Common Stock, which is deemed a “market condition,” the grant-date fair values of the PSUs have been determined using a binomial pricing model, or a Monte Carlo simulation model.

Weighted-average grant date fair value of PSUs granted $ 45.36

Risk free rate 3.74 %

Expected volatility 44.8 %

The following table summarizes all PSU activity during the three months ended March 31, 2026:

Risk free rate 3.74 % to 4.11 %

Expected volatility 43.9 % to 44.8 %

The following table summarizes all PSU activity during the six months ended June 30, 2026:

Shares Weighted Average

Grant Date Fair Value Weighted

Contractual Life (years) Aggregate

Grant Date Fair Value

Outstanding, December 31, 2025 78,181 $ 24.90

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Canceled/Forfeited —

Outstanding, March 31, 2026 119,294 $ 31.47 1.93 $ —

As of March 31, 2026 , there was a total of approximately $ 2.8 million of unrecognized compensation cost related to the unvested portion of the PSUs which is expected to be recognized over the next 1.93 years.

Outstanding, June 30, 2026 124,585 $ 32.52

As of June 30, 2026 , there was a total of approximately $ 2.7 million of unrecognized compensation cost related to the unvested portion of the PSUs which is expected to be recognized over the next 1.73 years.

Earnings per Share

The following table reconciles the numerators and denominators of the basic and diluted earnings per share computation for the periods presented:

Three months ended March 31,

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Numerator for basic and diluted earnings per share:

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The following table summarizes the actual number of stock-based compensation awards that were excluded from the determination of diluted earnings per share due to their anti-dilutive effect for the periods presented:

Three months ended March 31,

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Stock options 21,500 94,000 21,500 94,000

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Subsequent Events

On May 11, 2026, we announced that our Board of Directors declared a cash dividend of $ 0.15 per share to stockholders of record as of May 20, 2026 expected to be paid on June 3, 2026.

We have evaluated all events subsequent to the balance sheet date as of March 31, 2026, and through the date this report was issued and determined that there have been no other events that would require adjustments or additional disclosures to our Condensed Consolidated Financial Statements.

On August 10, 2026, we announced that our Board of Directors declared a cash dividend of $ 0.15 per share to stockholders of record as of August 19, 2026, expected to be paid on September 2, 2026.

On July 20, 2026, we completed our redomestication from Colorado to Texas (the “Redomestication”).

In connection with the Redomestication, we adopted a new certificate of formation and bylaws.

The Redomestication proposal to approve the change in state of incorporation, as described in the Company’s 2026 Proxy Statement, was approved by the Company’s shareholders at the Company’s 2026 Annual Meeting of Shareholders held on June 10, 2026.

We have evaluated all events subsequent to the balance sheet date as of June 30, 2026, and through the date this report was issued and determined that there have been no other events that would require adjustments or additional disclosures to our Condensed Consolidated Financial Statements.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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All statements, other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future financial position, growth strategy, budgets, projected costs, plans and objectives of management for future operations, are forward-looking statements.

We use the words “may,” “will,” “expect,” “anticipate,” “estimate,” “guidance,” “believe,” “continue,” “intend,” “plan,” “budget” and other similar words to identify forward-looking statements.

We use the words “may,” “will,” “expect,” “anticipate,” “estimate,” “guidance,” “forecast,” “believe,” “might,” “continue,” “intend,” “plan,” “project,” “budget” and other similar words to identify forward-looking statements.

You should read statements that contain these words carefully and should not place undue reliance on these statements because they discuss future expectations, contain projections of results of operations or of our financial condition and/or state other “forward-looking” information.

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• failure of projected organic growth due to adverse changes in the oil and gas industry, including depressed oil and gas prices, oppressive environmental regulations and competition;

• integration of the Flatrock Acquisition with our business;

• our inability to achieve increased utilization of assets, including rental fleet utilization and monetizing other non-cash balance sheet assets;

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However, events may occur in the future that we are unable to accurately predict or that we are unable to control.

When considering our forward-looking statements, you should keep in mind the risk factors and other cautionary statements including Item 1A, Risk Factors, in our 2025 Annual Report, as it contains important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements.

When considering our forward-looking statements, you should keep in mind the risk factors and other cautionary statements including those risk factors listed under the “Risk Factors” section of this Quarterly Report on Form 10-Q and Item 1A, Risk Factors, in our 2025 Annual Report, as it contains important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements