What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-04-29 compared with 2021-11-05 · 200 added, 274 removed, 387 unchanged (55% of the section changed)

3 unchanged sentences

(in millions, except share amounts)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Cash and cash equivalents $ 3.8 $ 0.6

Restricted cash 42.0 —

Accounts receivable, net 88.6 80.8

2 unchanged sentences

Prepaid expenses 4.2 8.3

Assets held for sale 5.6 —

Total current assets 126.4 105.2

20 unchanged sentences

50,000,000 shares authorized;

no shares issued or outstanding as of September 30, 2021 and December 31, 2020

6,000,001 shares issued and outstanding as of March 31, 2022 and December 31, 2021

Class A Common Stock, $ 0.01 par value, 100,000,000 shares authorized;

11,716,996 shares issued and 11,165,168 shares outstanding as of September 30, 2021;

19,223,189 shares issued and 18,671,361 shares outstanding as of March 31, 2022;

18,981,172 shares issued and 18,429,344 shares outstanding as of December 31, 2021

Class B Common Stock, $ 0.01 par value, 100,000,000 shares authorized;

6,866,154 shares issued and outstanding as of September 30, 2021 and December 31, 2020

no shares issued or outstanding as of March 31, 2022 and December 31, 2021

Class A Common Stock held in treasury at cost;

551,828 treasury shares as of September 30, 2021 and December 31, 2020

551,828 treasury shares as of March 31, 2022 and December 31, 2021

( 3.8 ) ( 3.8 )

9 unchanged sentences

(in millions, except share and per share amounts)

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Three Months Ended

High specification rigs $ 64.9 $ 21.7

Completion and other services 50.8 18.9 86.1 79.9

Processing solutions 1.0 1.2 3.3 5.6

Wireline services 38.6 12.1

Processing solutions and ancillary services 20.1 4.5

Total revenues 123.6 38.3

2 unchanged sentences

High specification rigs 50.8 19.0

Completion and other services 48.4 14.0 82.2 59.0

Processing solutions 0.5 0.3 1.9 2.2

Wireline services 40.4 11.3

Processing solutions and ancillary services 16.8 3.8

Total cost of services 108.0 34.1

22 unchanged sentences

(in millions, except share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

2022 2021 2022 2021

Quantity Amount Quantity Amount

Quantity Amount

Shares, Series A Preferred Stock

Balance, beginning of period 6,000,001 — $ 0.1 $ —

Balance, end of period 6,000,001 — $ 0.1 $ —

Shares, Class A Common Stock

2 unchanged sentences

Shares withheld for taxes on equity transactions ( 97,384 ) ( 97,513 ) — —

Share issuance for acquisitions 900,000 — — — 2,156,000 — — —

Balance, end of period 19,223,189 9,329,306 $ 0.2 $ 0.1

4 unchanged sentences

Balance, beginning of period ( 551,828 ) ( 551,828 ) $ ( 3.8 ) $ ( 3.8 )

Repurchase of Class A Common Stock — — — — — ( 437,891 ) — ( 3.1 )

Balance, end of period ( 551,828 ) ( 551,828 ) $ ( 3.8 ) $ ( 3.8 )

5 unchanged sentences

Balance, beginning of period $ 260.2 $ 123.9

Equity based compensation amortization 0.3 1.1 2.1 2.7

Equity based compensation 0.8 0.9

Shares withheld for taxes on equity transactions ( 1.1 ) ( 0.5 )

Share issuance for acquisitions 8.7 — 16.4 —

Impact of transactions affecting noncontrolling interest — 0.7

3 unchanged sentences

Net loss attributable to controlling interest ( 5.7 ) ( 4.6 )

Equity based compensation amortization 0.3 1.1 2.1 2.7

Equity based compensation 0.8 0.9

Shares withheld for taxes on equity transactions ( 1.1 ) ( 0.5 )

Share issuance for acquisition 8.7 — 16.4 —

Impact of transactions affecting noncontrolling interest — 0.7

Repurchase of Class A Common Stock — — — ( 3.1 )

Balance, end of period $ 242.7 $ 98.4

2 unchanged sentences

Net loss attributable to noncontrolling interest — ( 3.7 )

Equity based compensation amortization — — — 0.1

Impact of transactions affecting noncontrolling interest — ( 0.7 )

3 unchanged sentences

Net loss ( 5.7 ) ( 8.3 )

Equity based compensation amortization 0.3 1.1 2.1 2.8

Equity based compensation 0.8 0.9

Shares withheld for taxes on equity transactions ( 1.1 ) ( 0.5 )

Share issuance from acquisition 8.7 — 16.4 —

Repurchase of Class A Common Stock — — — ( 3.1 )

Balance, end of period $ 242.7 $ 176.9

3 unchanged sentences

(in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Operating Activities

3 unchanged sentences

Equity based compensation 0.8 0.9

(Gain) Loss on debt retirement 0.2 ( 2.1 )

Other costs, net 1.2 3.0

Changes in operating assets and liabilities, net effects of business combinations

Gain on disposal of property and equipment ( 1.0 ) ( 0.4 )

Income tax expense (benefit) ( 1.6 ) 0.4

Other expense, net 0.2 —

Changes in operating assets and liabilities

Accounts receivable ( 7.8 ) ( 1.4 )

6 unchanged sentences

Other current liabilities ( 0.2 ) —

Operating lease, right-of-use obligations 1.1 ( 1.4 )

Other long-term liabilities ( 1.3 ) —

Net cash provided by operating activities 23.4 27.3

Net cash used in operating activities ( 12.1 ) ( 1.9 )

Cash Flows from Investing Activities

1 unchanged sentence

Proceeds from disposal of property and equipment 6.6 0.4

Purchase of businesses, net of cash received ( 2.4 ) —

Net cash used in investing activities ( 5.9 ) ( 5.6 )

Net cash provided by investing activities 5.0 —

Cash Flows from Financing Activities

1 unchanged sentence

Principal payments on Credit Facility ( 120.0 ) ( 5.3 )

Borrowings under Eclipse M&E 12.5 —

Deferred financing costs on Eclipse ( 2.4 ) —

Principal payments on Eclipse M&E Term Loan ( 0.2 ) —

Principal payments under Eclipse Term Loan B ( 1.4 ) —

Principal payments on Secured Promissory Note ( 2.1 ) —

Principal payments on Encina Master Financing Agreement ( 17.7 ) ( 7.5 )

Payments on Installment Purchases ( 0.4 ) —

Proceeds from financing of sale-leasebacks 15.6 —

Principal payments on financing lease obligations ( 1.2 ) ( 0.8 )

Principal payments on other financing liabilities ( 1.5 ) —

Shares withheld on equity transactions ( 1.1 ) ( 0.5 )

Principal payments on ESCO Note Payable — ( 3.6 )

Repurchase of Class A Common Stock — ( 3.1 )

Payments on Installment Purchases ( 0.1 ) ( 0.2 )

Principal payments on Encina Master Financing Agreement — ( 2.5 )

Proceeds from financing of sale-leasebacks — 3.5

Net cash provided by financing activities 10.3 0.6

Increase in cash, cash equivalents and restricted cash 42.0 ( 3.5 )

Cash, cash equivalents and restricted cash, Beginning of Period 2.8 6.9

Cash, cash equivalents and restricted cash, End of Period $ 44.8 $ 3.4

Increase in cash and cash equivalents 3.2 ( 1.3 )

Cash and cash equivalents, Beginning of Period 0.6 2.8

Cash and cash equivalents, End of Period $ 3.8 $ 1.5

Supplemental Cash Flow Information

3 unchanged sentences

Additions to fixed assets through installment purchases and financing leases $ ( 0.8 ) $ ( 0.2 )

Issuance of Class A Common Stock for acquisition $ ( 16.4 ) $ —

Secured Promissory Note $ ( 11.4 ) $ —

Early termination of financing leases $ — $ 1.3

The accompanying notes are an integral part of these condensed consolidated financial statements.

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(“Ranger, Inc.,” “Ranger,” or the “Company”) is a provider of onshore high specification (“high-spec”) well service rigs and complementary services in the United States.

The Company also provides an extensive range of well site services to leading U.S.

The Company also provides an extensive range of well site services to leading United States (“U.S”).

exploration and production (“E&P”) companies that are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive life of a well.

The Company offers services that consist of well completion support, workover, well maintenance, wireline, fluid management, other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows:

Our service offerings consist of well completion support, workover, well maintenance, wireline, fluid management, other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows:

• High Specification Rigs .

Provides high-spec well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.

• Completion and Other Services .

Provides wireline completion services necessary to bring a well on production and other ancillary services often utilized in conjunction with the high-spec rig services to enhance the production of a well.

• Processing Solutions .

Provides proprietary, modular equipment for the processing of natural gas.

The Company’s operations take place in most of the active oil and natural gas basins in the United States, including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties plays.

• Wireline Services.

Provides services necessary to bring and maintain a well on production and consists of our wireline completion, wireline production, and pump down lines of business.

• Processing Solutions and Ancillary Services.

Provides other services often utilized in conjunction with our High Specification Rigs and Wireline Services segments.

These services include equipment rentals, plug and abandonment, logistics hauling, processing solutions, as well as snubbing and coil tubing.

The Company’s operations take place in most of the active oil and natural gas basins in the U.S., including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties plays.

was incorporated as a Delaware corporation in February 2017.

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Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services and Torrent Services’ business and consolidates the financial results of Ranger Services and Torrent Services and their subsidiaries.

Recent Events

Basic Energy (“Basic”) Acquisition

On September 15, 2021, Ranger Energy Acquisition, LLC, a Delaware corporation and wholly owned subsidiary of the Company entered into an Asset Purchase Agreement for certain assets of Basic and certain of its subsidiaries (the “Basic Sellers”), closing on October 1, 2021.

The Company purchased assets associated with Basic’s well servicing, fishing and rental, coiled tubing operations, and rolling stock assets required to support the operating assets being purchased and real property locations inclusive of, but not limited to, real property owned in New Mexico, Oklahoma and Texas.

The Company paid $ 36.65 million in cash to Basic, subject to normal closing adjustments and assumed liabilities.

See Note 16 — Subsequent Events for further details.

Coronavirus (“COVID-19”)

The outbreak of the novel COVID-19 has spread across the globe and has been declared a public health emergency by the World Health Organization and a National Emergency by the President of the United States.

The COVID-19 pandemic has resulted, and is likely to continue to result, in significant economic disruption and has, and is likely to continue to, adversely affect the operations of the Company’s business, as the significantly reduced global and national economic activity has resulted in reduced demand for oil and natural gas.

Federal, state and local governments mobilized to implement containment mechanisms to minimize impacts to their populations and economies.

Various containment measures, which include the quarantining of cities, regions and countries, while aiding in the prevention of further outbreak, have resulted in a severe drop in general economic activity and a resulting decrease in energy demand.

In addition, the global economy has experienced a significant disruption to global supply chains.

The extent of the COVID-19 outbreak on the Company’s operational and financial performance will continue to depend on certain developments, including the duration and spread of the outbreak and its continued impact on customer activity and third-party providers.

The direct impact to the Company’s operations began to

take effect at the close of the first quarter ended March 31, 2020, and continued through the issuance of these Condensed Consolidated Financial Statements.

The full extent to which the COVID-19 outbreak may affect the Company’s financial conditions, results of operations or liquidity subsequent to the issuance of these Condensed Consolidated Financial Statements is uncertain.

The severe drop in economic activity, travel restrictions and other restrictions due to COVID-19 have had a significant negative impact on the demand for oil and gas.

In addition to the impact of the COVID-19 outbreak, in March 2020, the Organization of the Petroleum Exporting Countries (“OPEC”), Russia and certain other oil producing states, commonly referred to as “OPEC Plus,” failed to agree on a plan to cut production of oil and natural gas.

Subsequently, Saudi Arabia announced plans to increase production to record levels and reduce the prices at which they sell oil and, in turn, Russia responded with threats to also increase production.

Collectively, these events created an unprecedented global oil and natural gas supply and demand imbalance, reduced global oil and natural gas storage capacity, caused oil prices to decline significantly and resulted in continued volatility in oil, natural gas and natural gas liquids (“NGLs”) prices through the third quarter of 2021.

Factors deriving from the COVID-19 response, as well as the oil oversupply, that have or may negatively impact sales, liquidity and gross margins in the future include, but are not limited to:

limitations on the ability of the Company’s customers to conduct business, which would result in a decrease in demand for services and lower utilization of the Company’s assets;

limitations on the ability of suppliers to provide materials or equipment, limitations on the ability of the Company’s employees to perform their work due to illness caused by the pandemic or local, state or federal orders requiring employees to remain at home;

reduction of capital expenditures and discretionary spend;

and limitations on the ability of customers to pay us on a timely basis.

If prolonged, such factors may also negatively affect the carrying values of the Company’s property and equipment and intangible assets.

At the close of the first quarter of 2020, the Company initiated cost reductions throughout the organization, including a reduction in the workforce and salary reductions.

Additionally, various other operational, travel and organizational expense reductions will continue to manage costs to preserve liquidity through the downturn.

We believe these actions will provide sufficient liquidity to finance our operations for twelve months post issuance of these Condensed Consolidated Financial Statements.

During the first half of 2021, increased activity can be attributed to stay-at-home orders and other restrictions being lifted in certain geographical areas, however any future containment measure, as a result of the emergence of new strains or variants of COVID-19 or otherwise, could curtail such growth.

We will continue to actively monitor the situation and may take further actions that alter business operations as may be required by federal, state or local authorities, or that we determine are in the best interests of the Company’s employees, customers and stakeholders.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The consolidated balance sheet as of December 31, 2020 has been derived from audited financial statements and the Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.

The condensed consolidated balance sheet as of December 31, 2021 has been derived from audited financial statements and the Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.

GAAP”) for interim financial information and the Securities and Exchange Commission’s (the “SEC”) instructions to Form 10-Q and Article 10 of Regulation S-X.

3 unchanged sentences

Interim results for the periods presented may not be indicative of results that will be realized for future periods.

Investments in which the Company exercises control are consolidated and the noncontrolling interests of such investments, which are not attributable directly or indirectly to the Company are presented as a separate component of net income or loss and equity in the accompanying condensed consolidated financial statements.

The Company had ownership interests in Ranger, LLC, which was consolidated within the Company’s consolidated financial statements, but was not wholly owned by the Company.

Upon conversion of the Class B Common Stock during the year-ended December 31, 2021, all noncontrolling interests were eliminated.

Changes in the Company’s ownership interest in Ranger, LLC, while it retains its controlling interest, are accounted for as equity transactions.

We have made certain reclassifications to our prior period operating revenue and cost of sales amounts due to the change in reportable segments whereby our Wireline and Ancillary Services were bifurcated from our historical Completion and Other

Services segment as a result of our fourth quarter operating segment changes.

The Ancillary Services were combined with the historical Processing Solutions segment.

None of these reclassifications have an impact on our consolidated operations results, cash flows or financial position.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Note 2 — Summary of Significant Accounting Policies of the Annual Report.

Restricted Cash

The Company’s restricted cash consisted of cash the Company was contractually obligated to utilize for the purchase of the Basic Energy assets and related transactions costs.

The Company completed the Basic Energy Acquisition on October 1, 2021 and included this purchase as a liability in Other current liabilities in the Condensed Consolidated Balance Sheets.

On October 1, 2021, the Company issued Series A Preferred Stock in connection with the receipt of the restricted cash.

See Note 16 — Subsequent Events for further details.

Use of Estimates

11 unchanged sentences

Emerging Growth Company Status and Smaller Reporting Company Status

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012.

The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012.

The Company will remain an emerging growth company until the earlier of (1) the last day of its fiscal year (a) following the fifth anniversary of the completion of its initial public offering (“IPO”), (b) in which its total annual gross revenue is at least $1.07 billion, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of the Company’s common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of its most recently completed second fiscal quarter, or (2) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

1 unchanged sentence

The Company has irrevocably opted out of the extended transition period and, as a result, the Company will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

The Company will lose its EGC status on December 31, 2022, as this will represent the last day of the fiscal year following the fifth anniversary of our first Form S-1, which was filed in August 2017.

The Company is also a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as Amended.

7 unchanged sentences

ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2022, with early adoption permitted.

The Company is evaluating the effect of this accounting standard on its consolidated financial statements.

The Company is evaluating the effect of this accounting standard on its condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for accounting contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

The amendments apply only to contracts, hedging relationships and other transactions that reference the London Interbank Offering Rate (“LIBOR”) or another reference rate expected to be discontinued due to the reference rate reform.

ASU 2020-04 became effective as of March 12, 2020 and can be applied through December 31, 2022.

ASU 2020-04 became effective as of March 12,

2020 and can be applied through December 31, 2022.

The Company has not made any contract modifications as of the date of this report to transition to a different reference rate, however it will consider this guidance as future modifications are made.

1 unchanged sentence

Note 3 — Business Combinations

The Company completed two acquisitions during the nine months ended September 30, 2021 with both purchases accounted for using the acquisition method of accounting under the FASB Accounting Standards Codification 805, Business Combinations (“ASC 805”).

The results of operations for each of the acquisitions are included in the accompanying Condensed

Consolidated Statements of Operations from the respective date of each acquisition.

The Company completed three acquisitions during the year ended December 31, 2021 where all purchases were accounted for using the acquisition method of accounting under the FASB Accounting Standards Codification 805, Business Combinations (“ASC 805”).

The results of operations for each of the acquisitions are included in the accompanying Condensed Consolidated Statements of Operations from the respective date of each acquisition.

Under the acquisition method of accounting, the assets and liabilities have been recorded at their respective estimated fair values as of the date of completion of the acquisition and reported into Ranger’s Condensed Consolidated Balance Sheets.

The preliminary purchase price assessment remains an ongoing process and is subject to change for up to one year subsequent to the closing date of the acquisition.

Patriot Well Solutions (“Patriot”) Acquisition

1 unchanged sentence

As consideration for the Patriot Acquisition the Company paid an aggregate of $ 11.0 million, which included 1.3 million shares of Class A Common Stock and cash payments of $ 3.3 million, net of cash acquired.

The financial results of Patriot are included in the Completion and Other Services reporting segment.

The pro forma results of operations for the Patriot Acquisition is not presented because the pro forma effects, individually and in the aggregate, are not material to the Company’s consolidated results of operations.

The financial results of Patriot are included in the Wireline Services reporting segment.

The Company finalized the purchase price allocation in the fourth quarter of 2021.

PerfX Wireline Services (“PerfX”) Acquisition

On July 8, 2021, the Company acquired all of the outstanding stock of PerfX, a provider of wireline services that operate in Williston, North Dakota and Midland, Texas.

Following the acquisition of PerfX, the Company significantly expanded its scale and scope of the existing wireline business, which now includes production services.

On July 8, 2021, the Company acquired the assets of PerfX, a provider of wireline services that operate in Williston, North Dakota and Midland, Texas.

Following the acquisition of PerfX, the Company significantly expanded its scale and scope of the existing wireline business.

The financial results of PerfX are included within the Wireline Services reporting segment.

The aggregate consideration was $ 20.1 million, which included 1,000,000 shares of Class A Common Stock and a Secured Promissory Note of $ 11.4 million.

2 unchanged sentences

Refer to “Note 10 — Debt” for further details related to the Secured Promissory Note.

The Company finalized the purchase price allocation in the fourth quarter of 2021.

The Company reported revenue and an operating loss during the three months ended March 31, 2022 of approximately $ 24.5 million and $ 2.1 million, respectively.

The PerfX purchase price includes a warrant to acquire a 30 % ownership in the XConnect Business (“XConnect”), which expires on July 8, 2031.

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Upon the occurrence of a second uncured forfeiture event, the warrant is deemed to be cancelled.

The value of the warrant by the Company is negligible as of March 31, 2022.

The Company finalized the purchase price allocation in the fourth quarter of 2021.

The following table presents the fair value of assets acquired and liabilities assumed in accordance with ASC 805 (in millions):

2 unchanged sentences

Prepaid and other current assets 0.1

Operating leases, right-of-use asset 1.1

Property and equipment 18.4

2 unchanged sentences

Accrued expenses 1.0

Operating lease right-of-use obligation 1.1

Total liabilities assumed 7.5

Allocated purchase price $ 20.1

The following is supplemental pro-forma revenue, operating loss, net loss and loss per share had the PerfX Acquisition occurred as of January 1, 2020 (in millions):

Nine Months Ended September 30,

Revenue $ 224.9 $ 225.0

Operating loss $ ( 27.2 ) $ ( 13.9 )

Net loss $ ( 30.1 ) $ ( 20.8 )

Basic and diluted loss per share $ ( 1.90 ) $ ( 1.20 )

The supplemental pro forma information presented above are being provided for information purposes only and may not necessarily reflect the future results of operations of the Company or what the results of operations would have been had the

Company owned and operation the PerfX Acquisition assets since January 1, 2020.

There were no material non-recurring pro-forma adjustments present.

The financial results of PerfX are included in the Completion and Other Services reporting segment.

The Company reported revenue and operating income during the three and nine months ended September 30, 2021 that included approximately $ 27.9 million and $ 0.5 million, respectively.

The transaction costs related to the PerfX Acquisition approximated $ 0.7 million.

Basic Energy Services, Inc.

(“Basic”) Acquisition

On September 15, 2021, Ranger Energy Acquisition, LLC (“Ranger Acquisitions”) entered into an Asset Purchase Agreement for certain assets of Basic and certain of its subsidiaries (the “Basic Sellers”), which closed on October 1, 2021.

Ranger Acquisitions purchased assets associated with Basic’s well servicing, fishing and rental, coiled tubing operations, and rolling stock assets required to support the operating assets being purchased and real property locations inclusive of, but not limited to, real property owned in New Mexico, North Dakota, Oklahoma, and Texas.

All assets associated with the Basic Acquisition, were recorded at their fair value based on a preliminary purchase price allocation.

The purchase price allocation has not been finalized due to additional items to be settled that the Company expects to be immaterial to the financial statements.

The Company used the market approach to value as of the closing date, October 1, 2021, to apply fair values to the assets purchased based on the selling price of similar assets.

As a result of comparing the purchase price to the fair value of the assets acquired, a $ 37.2 million bargain purchase gain, net of tax, was recognized in year ended December 31, 2021.

The bargain purchase gain is primarily attributable Basic’s distressed financial position and lack of financing options available to avoid liquidation.

The Company reported revenue and operating income during the three months ended March 31, 2022 of approximately $ 42.2 million and $ 7.5 million, respectively.

The following table presents the fair value of assets acquired and liabilities assumed in accordance with ASC 805 (in millions):

Property and equipment $ 89.5

Total assets acquired 89.5

Finance lease obligations 3.9

Bargain purchase deferred tax liability 10.8

Total liabilities assumed 14.7

Net assets acquired 74.8

Bargain purchase 37.2

Purchase price $ 37.6

Note 4 — Property and Equipment, Net

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Estimated Useful Life

(years) September 30, 2021 December 31, 2020

(years) March 31, 2022 December 31, 2021

High specification rigs 20 $ 144.8 $ 145.4

High specification rigs machinery and equipment 5 - 10

Completion and other services machinery and equipment 5 - 10

Processing solutions machinery and equipment 3 - 30

Wireline services machinery and equipment 5 - 10

Processing solutions and ancillary services machinery and equipment 3 - 30

Vehicles 3 - 15

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Property and equipment, net $ 250.5 $ 270.6

Depreciation expense was $ 8.6 million and $ 8.2 million for the three months ended September 30, 2021 and 2020, respectively, and $ 24.4 million and $ 26.2 million for the nine months ended September 30, 2021 and 2020, respectively.

Note 5 — Goodwill and Intangible Assets

Depreciation expense was $ 11.4 million and $ 7.8 million for the three months ended March 31, 2022 and 2021, respectively.

Note 5 — Assets Held for Sale

Assets held for sale includes the net book value of excess assets acquired as part of the Basic Acquisition that the Company plans to sell within the next 12 months.

Long-lived assets that meet the held for sale criteria are held for sale and reported at the lower of their carrying value or fair value less estimated costs to sell.

The Company intends to sell the excess assets to fund repayment of the Eclipse M&E Term Loan and the Eclipse Term Loan B.

Refer to “Note 10 — Debt” for further details related to the Eclipse M&E Term Loan and the Eclipse Term Loan B.

As of March 31, 2022, the Company classified land and building assets and supporting equipment, within our High Specification Rigs and Processing Solutions and Ancillary Services segments and being actively marketed, as held for sale.

During the three months ended March 31, 2022, the Company did not record any gain or loss to assets held for sale as the carrying value was less than fair value less estimated costs to sell.

Assets held for sale at March 31, 2022 consisted of the following (in millions):

March 31, 2022

Land and buildings $ 4.4

Other PP&E 1.3

Assets held for sale $ 5.7

Note 6 — Intangible Assets

Definite lived intangible assets are comprised of the following (in millions):

Estimated Useful Life

(years) September 30, 2021 December 31, 2020

(years) March 31, 2022 December 31, 2021

Customer relationships 10 - 18

2 unchanged sentences

Intangible assets, net $ 7.6 $ 7.8

Amortization expense was $ 0.1 million and $ 0.2 million for the three months ended September 30, 2021 and 2020 respectfully.

Amortization expense was $ 0.5 million and $ 0.6 million for the nine months ended September 30, 2021 and 2020, respectively.

Amortization expense was $ 0.2 million and $ 0.2 million for the three months ended March 31, 2022 and 2021 respectfully.

Amortization expense for the future periods is expected to be as follows (in millions):

For the twelve months ending September 30, Amount

For the twelve months ending March 31, Amount

Thereafter 4.0

1 unchanged sentence

Accrued expenses include the following (in millions):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Accrued payables $ 12.6 $ 12.5

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Operating Leases

The Company has operating leases, primarily for real estate and equipment, with terms that vary from 12 months to seven years , included in operating lease costs in the table below.

The Company has operating leases, primarily for real estate and equipment, with terms that vary from one to seven years , included in operating lease costs in the table below.

The operating leases are included in operating leases, right-of-use assets, other current liabilities and operating leases, right-of-use obligations in the Condensed Consolidated Balance Sheets.

Lease costs associated with yard and field offices are included in cost of services and executive offices are included in general and administrative costs in the Condensed Consolidated Statements of Operations.

Lease costs and other information related to operating leases for the three and nine months ended September 30, 2021 and 2020, are as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Lease costs and other information related to operating leases for the three months ended March 31, 2022 and 2021 and 2021, are as follows (in millions):

Three Months Ended March 31,

Short-term lease costs $ 2.5 $ 0.3

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Aggregate future minimum lease payments under operating leases are as follows (in millions):

For the twelve months ending September 30,

For the twelve months ending March 31,

Thereafter 1.2

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The finance leases are included in Property and equipment, net, Other current liabilities and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

Lease costs and other information related to finance leases for the three and nine months ended September 30, 2021 and 2020, are as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Lease costs and other information related to finance leases for the three months ended March 31, 2022 and 2021, are as follows (in millions):

Three Months Ended March 31,

Amortization of finance leases $ 0.5 $ 0.8

4 unchanged sentences

Aggregate future minimum lease payments under finance leases are as follows (in millions):

For the twelve months ending September 30, Total

For the twelve months ending March 31, Total

Total future minimum lease payments 7.4

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Note 9 — Other Financing Liabilities

During the nine months ended September 30, 2021, the Company entered into an agreement to sell a parcel of land and a building attached thereto, and subsequently leased back the property.

During the year ended December 31, 2021, the Company entered into an agreement to sell a parcel of land and a building attached thereto, and subsequently leased back the property.

The Company received cash of $ 12.1 million from the sale and the lease has a 15 year term with an annual rent escalation of two percent per annum.

During the nine months ended September 30, 2021, the Company entered into an agreement to sell certain of other fixed assets and subsequently leased back such assets and received cash of $ 3.5 million to be paid over 18 to 60 months.

During the year ended December 31, 2021, the Company entered into an agreement to sell certain of other fixed assets and subsequently leased back such assets.

The Company received cash of $ 3.5 million to be paid over 18 to 60 months.

These sales did not qualify for sale accounting, therefore these leases were classified as finance leases and no gain or loss was recorded.

The net book value of the assets remained in Property and equipment, net and are depreciating over their original useful lives.

As of September 30, 2021, aggregate future lease payments of the financing liabilities are as follows (in millions):

For the twelve months ending September 30,

As of March 31, 2022, aggregate future lease payments of the financing liabilities are as follows (in millions):

For the twelve months ending March 31,

Thereafter 9.5

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The aggregate carrying amounts, net of issuance costs, of the Company’s debt consists of the following (in millions):

September 30, 2021 December 31, 2020

Credit Facility $ — $ 7.2

Encina Master Financing Agreement — 17.3

Eclipse Loan and Security Agreement 39.5 —

Installment Purchases 1.1 —

March 31, 2022 December 31, 2021

Eclipse Revolving Credit Facility 44.8 27.0

Eclipse M&E Term Loan, net 12.0 12.2

Eclipse Term Loan B 10.7 11.9

Secured Promissory Note 8.3 10.4

Installment Purchases 0.9 1.0

Total Debt 76.7 62.5

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Long term-debt, net $ 15.6 $ 18.4

Credit Facility

On August 16, 2017, Ranger Services, entered into a $ 50.0 million senior secured revolving credit facility (the “Credit Facility”) by and among certain of Ranger’s subsidiaries, as borrowers, each of the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent.

The Credit Facility was subject to a borrowing base that was calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves.

The applicable margin for the LIBOR loans ranged from 1.5 % to 2.0 % and the applicable margin for Base Rate loans ranged from 0.5 % to 1.0 %, in each case, depending on Ranger LLC’s average excess availability under the Credit Facility.

The weighted average interest rate for the borrowings under the Credit Facility was 2.3 % for the nine months ended September 30, 2021.

The Credit Facility was extinguished as of September 30, 2021 in connection with the Eclipse Loan Security Agreement, which is described further below.

Encina Master Financing and Security Agreement

On June 22, 2018, the Company entered into a Master Financing and Security Agreement (the “Financing Agreement”) with Encina Equipment Finance SPV, LLC (the “Lender”).

The Company received an aggregate of $ 40 million to acquire certain capital equipment.

The Financing Agreement was secured by a lien on certain high-spec rig assets.

Borrowings under the Financing Agreement bore interest at a rate per annum equal to the sum of 8.0 % plus LIBOR, which was 1.5 % as of September 30, 2021.

The outstanding balance of the Financing Agreement was paid in full as of September 30, 2021 in connection with the Eclipse Loan and Security Agreement.

Please see below for further details.

Eclipse Loan and Security Agreement

On September 27, 2021, the Company entered into a Loan and Security Agreement with Eclipse Business Capital LLC (“EBC”) and Eclipse Business Capital SPV, LLC, as administrative agent, providing the Company with a senior secured credit facility in an aggregate principal amount of $ 77.5 million (the “EBC Credit Facility”), consisting of (i) a revolving credit facility in an aggregate principal amount of up to $ 50.0 million (the “Revolving Credit Facility”), (ii) a machinery and equipment term loan facility in an aggregate principal amount of up to $ 12.5 million (the “M&E Term Loan Facility”) and (iii) a term loan B facility in an aggregate principal amount of up to $ 15.0 million (the “Term Loan B Facility”).

The Company capitalized fees of $ 2.7 million associated with the EBC Credit Facility, which are included in the Condensed Consolidated Balance Sheets as a discount to the EBC Credit Facility.

Such fees will continue to be amortized through maturity and are included in Interest Expense, net on the Condensed Consolidated Statement of Operations.

The Company was in compliance with the Eclipse Loan and Security Agreement covenants as of September 30, 2021.

Debt under the Eclipse Loan and Security Agreement is secured by a lien on substantially all of the Company’s assets.

The Company was in compliance with the Eclipse Loan and Security Agreement covenants as of March 31, 2022.

On January 7, 2022, the Company entered into the First Amendment to Loan and Security Agreement (the Eclipse Loan and Security Agreement, as amended by the First Amendment, the “Amended Loan Agreement”) with EBC and Eclipse Business Capital SPV, LLC, which increased the Maximum Revolving Credit Facility Amount (as defined in the Amended Loan Agreement) to $ 65.0 million, among other things.

Revolving Credit Facility

The Revolving Credit Facility was drawn in part on September 27, 2021, to repay existing Credit Facility, and to pay for the fees, costs and expenses incurred in connection with the EBC Credit Facility.

The Revolving Credit Facility was drawn in part on September 27, 2021, to repay the indebtedness under the existing EBC Credit Facility, which was terminated in connection with such repayment, and to pay for the fees, costs and expenses incurred in connection with the EBC Credit Facility.

The undrawn portion of the Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments.

The Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves.

The Company’s eligible accounts receivable serves as collateral for the borrowings under the Revolving Credit Facility and is scheduled to mature in September 2025.

The Company’s eligible accounts receivable serve as collateral for the borrowings under the Revolving Credit Facility, which is scheduled to mature in September 2025.

The Revolving Credit Facility includes a subjective acceleration clause and cash dominion provisions that permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Revolving Credit Facility.

Therefore, the borrowings of the Revolving Credit Facility will be classified as current maturities of long-term debt indefinitely.

Under the Revolving Credit Facility, the total loan capacity was $ 37.5 million, which was based on a borrowing base certificate in effect as of September 30, 2021.

The Company had outstanding borrowings of $ 29.7 million under the Revolving Credit Facility, leaving a residual $ 7.8 million available for borrowings as of September 30, 2021.

The borrowings of the Revolving Credit Facility, therefore, will be classified as Long-term debt, current portion on the Condensed Consolidated Balance Sheet.

Under the Revolving Credit Facility, the total loan capacity was $ 51.2 million, which was based on a borrowing base certificate in effect as of March 31, 2022.

The Company had outstanding borrowings of $ 44.8 million under the Revolving Credit Facility, leaving a residual $ 6.4 million available for borrowings as of March 31, 2022.

Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to 5 % in excess of the LIBOR Rate and 4 % in excess of the Base Rate through April 1, 2022.

The weighted average applicable margin for the loan was 6.0 % for the three months ended September 30, 2021.

The weighted average interest rate for the loan was 6.0 % for the three months ended March 31, 2022.

The Company capitalized fees of $ 1.8 million associated with the Revolving Credit Facility, which are included in Other assets in the Condensed Consolidated Balance Sheets.

Such fees will continue to be amortized through maturity and are included in Interest expense, net on the Condensed Consolidated Statement of Operations.

Unamortized debt issuance costs as of March 31, 2022 were $ 1.6 million.

M&E Term Loan Facility

Under the M&E Term Loan Facility, the Company had outstanding borrowings of $ 12.5 million where the monthly installments commence on March 1, 2022.

Under the M&E Term Loan Facility, the Company had outstanding borrowings of $ 12.3 million where the monthly principal installments commenced on March 1, 2022.

Borrowings under the M&E Term Loan Facility bear interest at a rate per annum equal to 8 % in excess of the LIBOR Rate and 7 % in excess of the Base Rate.

The weighted average interest rate for the loan was 9.0 % for the three months ended September 30, 2021.

The Financing Agreement is secured by a lien on certain high-spec rig assets.

The weighted average interest rate for the M&E Term Loan was 9.0 % for the three months ended March 31, 2022.

The M&E Term Loan Facility is scheduled to mature in September 2025.

Any principal amounts repaid may not be reborrowed.

On September 27, 2021, the M&E Term Loan Facility was drawn in full to repay existing Encina Master Financing Agreement and Credit Facility.

The Company capitalized fees of $ 0.3 million associated with this M&E Term Loan Facility, which are included in the Consolidated Balance Sheets as a discount to the Long-term debt, net.

Such fees will continue to be amortized through maturity and are included in Interest expense, net on the Condensed Consolidated Statement of Operations.

Unamortized debt issuance costs as of March 31, 2022 were $ 0.3 million.

The Company paid approximately $ 0.2 million on M&E Term Loan subsequent to March 31, 2022, where such cash was generated from the sale of certain assets under the M&E Term Loan.

On October 1, 2021, the Term Loan B, was finalized in connection with the closing of the Basic Acquisition.

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Term Loan B is scheduled to mature in September 2022.

The Financing Agreement is secured by a lien on certain high-spec rig assets.

As of September 30, 2021, the Term Loan B Facility was undrawn and on October 1, 2021, the Term Loan B was drawn in full to repay borrowings under the Revolving Credit Facility.

Any principal amounts repaid may not be reborrowed.

The weighted average interest rate for Term Loan B was 13.0 % for the three months ended March 31, 2022.

On October 1, 2021, the Term Loan B was drawn in full to repay borrowings under the Revolving Credit Facility and as of March 31, 2022 the principal balance outstanding was $ 11.0 million.

Principal payments are generated from the proceeds from the sale of Basic assets, and may not be reborrowed.

The Company capitalized fees of $ 0.6 million associated with Term Loan B, which are included in the Condensed Consolidated Balance Sheets as a discount to the Long-term debt, current portion.

Such fees will continue to be amortized through maturity and are included in Interest Expense, net on the Condensed Consolidated Statement of Operations.

Unamortized debt issuance costs as of March 31, 2022 were $ 0.3 million.

The Company paid approximately $ 4.9 million on Term Loan B subsequent to March 31, 2022, where such cash was generated from the sale of Basic assets under the Term Loan B.

Secured Promissory Note

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Certain of the assets acquired serve as collateral under the Secured Promissory Note.

As of September 30, 2021, the aggregate principal balance outstanding was $ 10.7 million.

As of March 31, 2022, the aggregate principal balance outstanding was $ 8.3 million.

Borrowings under the Secured Promissory Note bear interest at a rate of 8.5 % per annum and is scheduled to mature in January 2024.

The Company made a cash payment of $ 1.5 million payment in February 2022 on the Secured Promissory Note, where such cash was generated from the sale of assets with an attached lien.

Other Installment Purchases

During the three and nine months ended September 30, 2021, the Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral.

As of September 30, 2021, the aggregate principal balance outstanding under the Installment Agreements was $ 1.1 million and is payable ratably over 36 months from the time of each purchase.

During the year ended December 31, 2021, the Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral.

As of March 31, 2022, the aggregate principal balance outstanding under the Installment Agreements was $ 0.9 million and is payable ratably over 36 months from the time of each purchase.

The monthly installment payments contain an imputed interest rate that are consistent with the Company’s incremental borrowing rate and is not significant to the Company.

ESCO Notes Payable

In connection with the IPO and the ESCO Leasing, LLC (“ESCO”) acquisition, both of which occurred on August 16, 2017, the Company issued $ 7.0 million of Seller’s Notes as partial consideration for the ESCO acquisition.

These notes included a note for $ 5.8 million, which was settled in March 2020.

During the nine months ended September 30, 2020, the Company paid $ 3.8 million to settle the note and any unpaid interest, in full, and recognized a gain on the retirement of debt of $ 2.1 million, which is included in the Condensed Consolidated Statement of Operations within General and administrative expenses.

Debt Obligations and Scheduled Maturities

As of September 30, 2021, aggregate future principal payments of total debt are as follows (in millions):

For the twelve months ending September 30, Total

As of March 31, 2022, aggregate future principal payments of total debt are as follows (in millions):

For the twelve months ending March 31, Total

Note 11 — Equity

Series A Preferred Stock

On September 9, 2021, the Company’s board of directors authorized 6,000,001 shares of a series of the Company’s existing preferred stock designated as “Series A Preferred Stock”.

The Preferred Stock is not entitled to voting rights or dividends, or other distributions from the Company.

In the event of liquidation, dissolution or winding up Ranger Energy Services, Inc., holders of Preferred Stock are entitled to receive assets of Ranger prior to any distribution of assets to Common Stockholders.

There were no shares issued or outstanding as of September 30, 2021.

See Note 16 — Subsequent Events for further details.

On September 10, 2021, the Company consummated the private placement under the Securities Purchase Agreement, dated September 10, 2021, with certain accredited investors of 6.0 million newly issued shares of Series A Convertible Preferred Stock, par value $ 0.01 per share, in exchange for cash consideration in an aggregate amount of $ 42 million.

The transaction closed on October 1, 2021 and in April 2022, the Preferred Stock automatically converted into shares of the

Company’s Class A Common Stock upon effectiveness of the registration statement filed on Form S-1 by the Company on March 31, 2022 (File No.

001-699-039).

Equity-Based Compensation

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The Company has granted RSAs, which generally vest in three equal annual installments beginning on the first anniversary date of the grant.

During the three and nine months ended September 30, 2021, the Company granted 145,215 restricted shares and 645,288 restricted shares, respectively, with an aggregate value of $ 4.2 million.

During the three and nine months ended September 30, 2020, the Company granted 649,039 restricted shares with an aggregate fair value of $ 2.5 million.

As of September 30, 2021, there was an aggregate $ 4.5 million of unrecognized expense related to restricted shares issued which is expected to be recognized over a weighted average period of 1.9 years.

As of March 31, 2022, there was an aggregate $ 2.5 million of unrecognized expense related to restricted shares issued which is expected to be recognized over a weighted average period of 1.5 years.

Subsequent to March 31, 2022, the Company granted approximately 398,000 RSAs with an approximated aggregate value of $ 4.0 million.

Performance Stock Units

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Generally, the performance stock units are subject to an approximated three-year performance period.

During the three and nine months ended September 30, 2021, the Company granted 100,942 target shares and 246,212 target shares, respectively, of market based performance stock units at a relative and absolute grant date fair value of approximately $ 9.24 and $ 7.45 per share, respectively, which are expected to vest (if at all) following the completion of the applicable performance period on March 15, 2024.

During the three and nine months ended September 30, 2020, the Company granted 121,262 target shares of market based performance stock units at a relative and absolute grant date fair value of $ 6.33 per share and $ 3.62 per share, respectively, which are expected to vest (if at all) following the completion of the applicable performance period on April 3, 2023.

As of September 30, 2021, there was an aggregate $ 1.4 million of unrecognized compensation cost related to performance stock units which are expected to be recognized over a weighted average period of 2.0 years.

Share Repurchases

During the nine months ended September 30, 2020, the Company repurchased 344,827 shares of the Company’s Class A Common Stock for an aggregate $ 2.4 million in a privately negotiated transaction with ESCO.

See Note 14 — Commitments and Contingencies for further details.

In June 2019, the Board of Directors approved a share repurchase program, authorizing the Company to purchase up to 10 % of the outstanding Class A Common Stock held by non-affiliates, not to exceed 580,000 shares or $ 5.0 million in aggregate value.

Share repurchases may have taken place from time to time on the open market or through privately negotiated transactions.

The duration of the share repurchase program was 12 months and therefore ended in June 2020.

During the nine months ended September 30, 2020, the Company repurchased 93,063 shares of the Company’s Class A Common Stock for an aggregate $ 0.7 million.

As of March 31, 2022, there was an aggregate $ 1.0 million of unrecognized compensation cost related to performance stock units which are expected to be recognized over a weighted average period of 1.5 years.

Subsequent to March 31, 2022, the Company granted approximately 72,000 PSUs (based on target).

Note 12 — Risk Concentrations

Customer Concentrations

For the three months ended September 30, 2021, two customers, EOG Resources (“EOG”) and Pioneer Natural Resources (“Pioneer”), accounted for 16 % and 12 %, respectively, of the Company’s consolidated revenues.

For the nine months ended September 30, 2021, three customers, EOG, Pioneer and Conoco Phillips accounted for 19 %, 11 % and 11 %, respectively, of the Company’s consolidated revenues.

As of September 30, 2021, approximately 32 % of the net accounts receivable balance was due from these three customers.

For the three months ended September 30, 2020, two customers, EOG and Concho Resources, Inc., accounted for 24 % and 16 %, respectively, of the Company’s consolidated revenues.

For the nine months ended September 30, 2020, the same two customers each accounted for 20 % and 18 % of the Company’s consolidated revenues.

As of September 30, 2020, approximately 27 % of the accounts receivable balance was due from these customers.

For the three months ended March 31, 2022, two customers, Occidental Petroleum Corporation and Chevron, accounted for 11 % and 10 %, respectively, of the Company’s consolidated revenues.

As of March 31, 2022, approximately 27 % of the net accounts receivable balance was due from these two customers.

For the three months ended March 31, 2021, one customer, EOG Resources, accounted for 24 % of the Company’s consolidated revenues.

As of March 31, 2021, approximately 12 % of the accounts receivable balance was due from this customer.

Note 13 — Income Taxes

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The effective U.S.

federal income tax rate applicable to the Company for the nine months ended September 30, 2021 and 2020 was ( 0.2 )% and ( 0.8 )%, respectively.

federal income tax rate applicable to the Company for the three months ended March 31, 2022 and 2021 was 22.5 % and ( 5.4 )%, respectively.

The Company is subject to the Texas Margin Tax that requires tax payments at a maximum statutory effective rate of 0.75 % on the taxable margin of each taxable entity that does business in Texas.

As a result of the initial public offering and subsequent reorganization, the Company recorded a deferred tax asset.

However, a full valuation allowance (“VA”) has been recorded to reduce the Company’s net deferred tax assets to an amount that is more likely than not to be realized.

However, a valuation allowance (“VA”) has been recorded to reduce the Company’s net deferred tax assets to an amount that is more likely than not to be realized.

The VA is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes.

Total income tax expense for the three and nine months ended September 30, 2021 and 2020 differed from amounts computed by applying the U.S.

federal statutory tax rates to pre-tax income or loss primarily due to changes in the valuation allowance related to pre-tax book income or loss and the impact of permanent differences between book and taxable income or loss attributable to noncontrolling interest.

The effective tax rate includes a rate benefit attributable to the fact that Ranger LLC operates as a limited liability company treated as a partnership for federal and state income tax purposes and as such, is not subject to federal and state income taxes, except for the State of Texas for which Ranger LLC files with the Company.

Accordingly, the portion of earnings attributable to noncontrolling interest is subject to tax when reported as a component of the noncontrolling interest’s taxable income.

Total income tax expense for the three months ended March 31, 2022 and 2021 differed from amounts computed by applying the U.S.

federal statutory tax rates to pre-tax income or loss primarily due to the release of the valuation allowance on deferred tax assets, the impact of permanent differences between book and taxable income, and income attributable to noncontrolling interest that is not subject to federal income taxes.

The Company is subject to the following material taxing jurisdictions:

the United States and Texas.

As of September 30, 2021, the Company has no current tax years under audit.

As of March 31, 2022, the Company has no current tax years under audit.

The Company remains subject to examination for federal income taxes and state income taxes for tax years 2019, 2018, 2017 and 2016.

The Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken would more likely than not be sustained upon examination.

Therefore, as of September 30, 2021, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.

Therefore, as of March 31, 2022, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.

The Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws.

For the three and nine months ended September 30, 2021, there were no material tax impacts to the Condensed Consolidated Financial Statements as it relates to COVID-19 measures.

However, the Company has deferred payroll tax payments of $ 1.9 million as of September 30, 2021, where 50% of the deferral is due by December 31, 2021.

For the three months ended March 31, 2022, there were no material tax impacts to the Condensed Consolidated Financial Statements as it relates to COVID-19 measures.

However, the Company has deferred payroll tax payments of $ 1.1 million as of

March 31, 2022 and was included in Accrued expenses on the Condensed Consolidated Balance Sheet.

The Company will continue to monitor additional guidance issued by the U.S.

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The numerator and denominator used to compute loss per share were as follows (in millions, except share and per share data):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Loss (numerator):

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Diluted loss per share $ ( 0.31 ) $ ( 0.54 )

During the three and nine months ended September 30, 2021 and 2020, the Company excluded approximately 1.1 million and 1.3 million of equity-based awards, respectively.

For all periods presented in the table above, the Company excluded 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock in calculating diluted loss per share.

These items were excluded from the calculation of the loss per share, as the effect was anti-dilutive.

During the three months ended March 31, 2022 and 2021, the Company excluded approximately 0.7 million and 0.9 million of equity-based awards, respectively, in calculating diluted loss per share, as the effect was anti-dilutive.

During the three months ended March 31, 2022 and 2021, the Company excluded 6.0 million shares of Series A Preferred Stock issuable upon an effective registration statement and 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock, respectively, in calculating diluted loss per share, as the effect was anti-dilutive.

Note 15 — Commitments and Contingencies

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The Company does not believe that the ultimate resolution of these currently pending matters will have a material adverse effect on its condensed consolidated financial position or results of operations.

During the year ended December 31, 2018, the Company provided notice to ESCO that the Company sought to be indemnified for breach of contract.

The Company exercised the right to stop payments of the remaining principal balance of $ 5.8 million on the Seller's Notes and any unpaid interest, pending resolution of certain indemnification claims.

During the nine months ended September 30, 2020, the Company paid an aggregate of $ 6.2 million to ESCO, of which $ 3.8 million was paid to settle the Seller’s Note, and any unpaid interest, and $ 2.4 million was paid to repurchase shares of the Company’s Class A Common Stock.

Please see “Note 9 — Debt” and “Note 10 — Equity” for further details of the debt and equity settlements.

Note 16 — Segment Reporting

The Company’s operations are located in the United States and organized into three reportable segments:

High Specification Rigs, Completion and Other Services and Processing Solutions.

High Specification Rigs, Wireline Services and Processing Solutions and Ancillary Services.

The reportable segments comprise the structure used by the Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance during the years presented in the accompanying Condensed Consolidated Financial Statements.

The CODM evaluates the segments’ operating performance based on multiple measures including Operating income, Adjusted EBITDA, rig hours and rig utilization.

The CODM evaluates the segments’ operating performance based on multiple measures including Operating income, Adjusted EBITDA, rig hours and state counts.

The tables below present the operating income measurement, as the Company believes this is most consistent with the principals used in measuring the Condensed Consolidated Financial Statements.

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High Specification Rigs .

The Company’s high-spec rigs facilitate operations throughout the lifecycle of a well, including (i) completion, (ii) workover, (iii) well maintenance and (iv) decommissioning.

The Company provides these advanced well services to E&P companies, particularly to those operating in unconventional oil and natural gas reservoirs and

requiring technically and operationally advanced services.

The Company’s high-spec rigs are designed to support growing U.S.

horizontal well demands.

In addition to the core well service rig operations, the Company offers a suite of complementary services.

Completion and Other Services.

The Completion and Other Services segment provides wireline completion services necessary to bring a well on production and other ancillary services often utilized in conjunction with the high-spec rig services to enhance the production of a well.

Processing Solutions.

The Company provides a range of proprietary, modular equipment for the processing of rich natural gas streams at the wellhead or central gathering points in basins where drilling and completion activity has outpaced the development of permanent processing infrastructure.

Provides high-spec well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.

Wireline Services .

Provides services necessary to bring and maintain a well on production and consists of our wireline completion, wireline production and pump down lines of business.

Processing Solutions and Ancillary Services .

Provides other services often utilized in conjunction with our High Specification Rigs and Wireline Services segments.

These services include equipment rentals, plug and abandonment, logistics hauling, processing solutions, as well as snubbing and coil tubing.

The Company incurs costs, indicated as Other, that are not allocable to any of the operating segments or lines of business and include corporate general and administrative expenses as well as depreciation of office furniture and fixtures and other corporate assets.

Segment information as of September 30, 2021 and December 31, 2020 and for the three and nine months ended September 30, 2021 and 2020 is as follows (in millions):

High Specification Rigs Completion and Other Services Processing Solutions Other Total

Three Months Ended September 30, 2021

Revenues $ 29.9 $ 50.8 $ 1.0 $ — $ 81.7

Cost of services 25.1 48.4 0.5 — 74.0

Depreciation and amortization 4.1 3.6 0.6 0.4 8.7

Operating income (loss) 0.7 ( 1.2 ) ( 0.1 ) ( 7.5 ) ( 8.1 )

Interest expense, net — — — 1.2 1.2

Net income (loss) 0.7 ( 1.2 ) ( 0.1 ) ( 8.5 ) ( 9.1 )

Capital expenditures $ 2.2 $ 0.7 $ 0.1 $ — $ 3.0

Nine Months Ended September 30, 2021

Segment information as of March 31, 2022 and December 31, 2021 and for the three months ended March 31, 2022 and 2021 is as follows (in millions):

High Specification Rigs Wireline Services Processing Solutions and Ancillary Services Other Total

Three Months Ended March 31, 2022

Revenues $ 64.9 $ 38.6 $ 20.1 $ — $ 123.6

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Capital expenditures $ 1.2 $ 0.9 $ 0.3 $ — $ 2.4

As of September 30, 2021

As of March 31, 2022

Property and equipment, net $ 133.7 $ 38.3 $ 61.0 $ 17.5 $ 250.5

Total assets $ 210.5 $ 60.3 $ 96.1 $ 27.6 $ 394.5

High Specification Rigs Completion and Other Services Processing Solutions Other Total

Three Months Ended September 30, 2020

Revenues $ 14.5 $ 18.9 $ 1.2 $ — $ 34.6

Cost of services 12.3 14.0 0.3 — 26.6

Depreciation and amortization 4.6 2.7 0.7 0.4 8.4

Operating income (loss) ( 2.4 ) 2.2 0.2 ( 5.0 ) ( 5.0 )

Interest expense, net — — — 0.8 0.8

Net income (loss) ( 2.4 ) 2.2 0.2 ( 5.7 ) ( 5.7 )

Capital expenditures $ 0.2 $ 0.3 $ 0.1 $ — $ 0.6

Nine Months Ended September 30, 2020

High Specification Rigs Wireline Services Processing Solutions and Ancillary Services Other Total

Three Months Ended March 31, 2021

Revenues $ 21.7 $ 12.1 $ 4.5 $ — $ 38.3

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Note 17 — Subsequent Events

Basic Energy Acquisition

On September 15, 2021, Ranger Energy Acquisition, LLC entered into an Asset Purchase Agreement for certain assets of the Basic Sellers, closing on October 1, 2021.

The Company did not acquire any assets of Basic in the State of California or any assets of Basic’s water logistic assets.

The Company paid $ 36.65 million in cash to Basic, subject to normal closing adjustments and assumed liabilities.

The Basic Energy Acquisition will be accounted for using the acquisition method of accounting in accordance with ASC 805.

The results of operations for the acquisition will be included in the accompanying Condensed Consolidated Statements of Operations from the acquisition date.

The initial accounting for the Basic Energy Acquisition has not yet been completed.

Tax Receivable Agreement (“TRA”) Termination and Class B Common Stock Redemption

On October 1, 2021, in connection with the Basic Acquisition, pursuant to the Tax Receivable Termination and Settlement Agreement (the “TRA Termination Agreement”), dated as of September 10, 2021, certain stockholders of the Company redeemed outstanding units in Ranger LLC, and the Company redeemed the corresponding shares of its Class B Common Stock, in each case, for an equivalent number of shares of Class A Common Stock.

The Company issued 376,185 shares of Class A Common Stock upon redemption of the Ranger LLC Units and Class B Common Stock pursuant to the TRA Termination Agreement were issued and sold in reliance upon an exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof.

Following the redemptions, no shares of Class B Common Stock are issued and outstanding.

Series A Preferred Stock - Issuance

On October 1, 2021, the Company consummated the private placement under the Securities Purchase dated September 10, 2021, with certain accredited investors of 6.0 million shares of Series A Convertible Preferred Stock, (the “Preferred Stock”), in exchange for cash consideration in an aggregate amount of $ 42.0 million.

The Preferred Stock will automatically convert into Class A Common Stock, following receipt of stockholder approval and effectiveness of the registration statement.

In connection with the issuance of the Preferred Stock, the Company received $ 42.0 million on September 30, 2021.

The cash is included in restricted cash with a corresponding offset in other current liabilities within the Condensed Consolidated Balance Sheets.

Series A Preferred Stock

On April 18, 2022, the Preferred Stock were automatically converted into shares of the Company’s Class A Common Stock upon effectiveness of the registration statement filed on Form S-1 by the Company on March 31, 2022 (File No.

001-699-039).

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