What changed in this filing

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Item 1. Financial Statements

2022-10-31 compared with 2022-08-03 · 175 added, 137 removed, 495 unchanged (39% of the section changed)

3 unchanged sentences

(in millions, except share amounts)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Cash and cash equivalents $ 5.2 $ 0.6

26 unchanged sentences

50,000,000 shares authorized;

no shares issued or outstanding as of June 30, 2022;

no shares issued or outstanding as of September 30, 2022;

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

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

25,268,856 shares issued and 24,717,028 shares outstanding as of June 30, 2022;

25,425,754 shares issued and 24,873,926 shares outstanding as of September 30, 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;

no shares issued or outstanding as of June 30, 2022 and December 31, 2021

no shares issued or outstanding as of September 30, 2022 and December 31, 2021

Class A Common Stock held in treasury at cost;

551,828 treasury shares as of June 30, 2022 and December 31, 2021

551,828 treasury shares as of September 30, 2022 and December 31, 2021

( 3.8 ) ( 3.8 )

7 unchanged sentences

(in millions, except share and per share amounts)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

12 unchanged sentences

Impairment of fixed assets 0.2 — 1.3 —

Loss on sale of assets 1.1 — 1.1 —

Gain (loss) on sale of assets ( 1.1 ) — — 0.1

Total operating expenses 159.0 89.8 443.6 193.9

Operating loss ( 2.2 ) ( 8.5 ) ( 7.4 ) ( 15.8 )

Operating income (loss) 18.0 ( 8.1 ) 10.6 ( 23.9 )

Other (income) expenses

2 unchanged sentences

Total other (income) expenses 1.0 1.2 2.1 2.5

Loss before income tax (benefit) expense ( 1.2 ) ( 9.2 ) ( 8.5 ) ( 17.1 )

Income (loss) before income tax (benefit) expense 17.0 ( 9.3 ) 8.5 ( 26.4 )

Tax (benefit) expense 3.4 ( 0.2 ) 1.0 0.1

Net loss ( 0.4 ) ( 9.1 ) ( 6.1 ) ( 17.4 )

Net income (loss) 13.6 ( 9.1 ) 7.5 ( 26.5 )

Net loss attributable to noncontrolling interests — ( 3.5 ) — ( 10.7 )

Net loss attributable to Ranger Energy Services, Inc.

Net income (loss) attributable to Ranger Energy Services, Inc.

$ 13.6 $ ( 5.6 ) $ 7.5 $ ( 15.8 )

Loss per common share

Income (loss) per common share

Basic $ 0.55 $ ( 0.51 ) $ 0.34 $ ( 1.63 )

7 unchanged sentences

(in millions, except share amounts)

Three Months Ended June 30, Six Months Ended June 30,

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

2022 2021 2022 2021 2022 2021 2022 2021

34 unchanged sentences

Share issuance for acquisition — 8.7 — 16.4

Shares converted to Class A Common Stock ( 0.1 ) — ( 0.1 ) —

Issuance of shares from Series A Preferred Stock conversion 0.1 — 0.1 —

Impact of transactions affecting noncontrolling interest — 3.9 — 10.7

10 unchanged sentences

Shares withheld for taxes on equity transactions 0.1 ( 0.2 ) ( 1.1 ) ( 0.9 )

Issuance of Class A Common Stock to related party — 7.7 — 7.7

Shares converted to Class A Common Stock ( 0.1 ) — ( 0.1 ) —

Issuance of shares from Series A Preferred Stock conversion 0.1 — 0.1 —

Share issuance from acquisition — 8.7 — 16.4

Balance, end of period $ 257.7 $ 175.9 $ 257.7 $ 175.9

3 unchanged sentences

(in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows from Operating Activities

Net loss $ ( 6.1 ) $ ( 17.4 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Net income (loss) $ 7.5 $ ( 26.5 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 33.8 24.9

Equity based compensation 2.8 2.1

Loss on disposal of property and equipment 1.1 0.1

Impairment of fixed assets 1.3 —

11 unchanged sentences

Other long-term liabilities 6.0 0.2

Net cash provided by (used in) operating activities 7.8 ( 4.1 )

Net cash provided by operating activities 18.5 23.4

Cash Flows from Investing Activities

6 unchanged sentences

Principal payments on Credit Facility ( 433.2 ) ( 52.5 )

Principal payments on Eclipse M&E Term Loan ( 0.8 ) —

Principal payments under Eclipse Term Loan B ( 12.4 ) —

Principal payments on Secured Promissory Note ( 2.7 ) —

Principal payments on financing lease obligations ( 3.4 ) ( 2.4 )

Principal payments on Secured Promissory Note ( 3.3 ) ( 0.6 )

Principal payments on other financing liabilities ( 2.2 ) ( 1.3 )

Principal payments on Eclipse M&E Term Loan ( 1.5 ) —

Shares withheld on equity transactions ( 1.1 ) ( 1.0 )

1 unchanged sentence

Principal payments on Encina Master Financing Agreement — ( 17.7 )

Deferred financing costs on Eclipse — ( 2.4 )

Proceeds from financing of sale-leasebacks — 15.6

Borrowings under Eclipse M&E Term Loan — 12.5

Net cash provided by (used in) financing activities ( 26.4 ) 24.5

8 unchanged sentences

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

Secured Promissory Note $ — $ ( 11.4 )

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

16 unchanged sentences

is a holding company, and its sole material assets consist of membership interests in RNGR Energy Services, LLC, a Delaware limited liability company (“Ranger LLC”).

Ranger LLC owns all of the outstanding equity interests in Ranger Energy Services, LLC (“Ranger Services”) and Torrent Energy Services, LLC (“Torrent Services”), the subsidiaries through which it operates its assets.

Ranger LLC owns all of the outstanding equity interests in Ranger Energy Services, LLC (“Ranger Services”), Torrent Energy Services, LLC (“Torrent Services”), and Ranger Energy Acquisition, LLC (“Ranger Acquisitions”), the subsidiaries through which it operates its assets.

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.

14 unchanged sentences

The Ancillary Services are now combined with the historical Processing Solutions segment.

Other immaterial reclassifications have been made for comparability purposes.

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

20 unchanged sentences

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

SRC’s means an issuer that is not an investment company, an asset-back issuer, or a majority-owned subsidiary of a parent that is not a SRC and that has (i) market value of common stock held by non-affiliates of less than $250 million;

SRC means an issuer that is not an investment company, an asset-back issuer, or a majority-owned subsidiary of a parent that is not a SRC and that has (i) market value of common stock held by non-affiliates of less than $250 million;

or (ii) annual revenues of less than $100 million and either no common stock held by non-affiliates or a market value of common stock held by non-affiliates of less than $700 million.

5 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 Condensed Consolidated Financial Statements.

After consideration of the guidance changes, the Company does not believe the changes in the accounting standard will result in a material impact on its Condensed Consolidated Financial Statements.

The Company expects to adopt the standard on a prospective basis.

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.

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.

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.

On September 23, 2022, the Company entered into the Fourth Amendment to the Loan and Security Agreement (the Eclipse Loan and Security Agreement, as amended through and including the Fourth Amendment, the “Amended Loan Agreement”) with EBC and Eclipse Business Capital SPV, LLC where the Secured Overnight Financing Rate (“SOFR”) replaced LIBOR as the reference rate for interest on borrowings, effective October 1, 2022.

With the exception of the standards above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s Condensed Consolidated Financial Statements.

13 unchanged sentences

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

The Class A Common Stock issuance includes 100,000 shares that was issued by the Company on July 8, 2022, the 12-month anniversary of the acquisition date.

The Class A Common Stock issuance includes 100,000 shares that were issued by the Company on July 8, 2022, the 12-month anniversary of the acquisition date.

The Secured Promissory Note bears an interest rate of 8.5 % per annum and holds certain assets as collateral through the scheduled maturity date of January 31, 2024.

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 operating income during the three months ended June 30, 2022 of approximately $ 30.2 million and $ 0.3 million, respectively, and revenue and an operating loss of $ 54.7 million and $ 1.9 million for the six months ended June 30, 2022.

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

5 unchanged sentences

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 June 30, 2022.

The value of the warrant by the Company is negligible as of September 30, 2022.

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

11 unchanged sentences

Allocated purchase price $ 20.1

The following unaudited pro-forma financial results considers that the PerfX Acquisition occurred as of January 1, 2021 (in millions):

Nine Months Ended September 30, 2021

Revenue $ 224.9

Operating loss $ ( 27.2 )

Net loss $ ( 30.1 )

Basic and diluted loss per share $ ( 1.90 )

The supplemental pro forma information presented above are being provided for information purposes only and may not necessarily reflect what the results of operations would have been had the Company owned and operation the PerfX Acquisition assets since January 1, 2021.

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

The financial results of PerfX are included in the Wireline 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.

During the nine months ended September 30, 2021 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.

On September 15, 2021, 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 as the Company is taking a full inventory of fixed assets purchase through the Basic Acquisition.

All assets associated with the Basic Acquisition, were recorded at their fair value.

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

2 unchanged sentences

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed as of the closing date, the estimates and assumptions are inherently uncertain and subject to refinement.

As a result, during the measurement period, which may be up to one-year from the closing date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to the bargain purchase.

As a result, during the measurement period, which may be up to one-year from the closing date, the Company recorded adjustments to the assets acquired and liabilities assumed, with the corresponding offset to the bargain purchase.

Subsequent to the measurement period, any adjustment to assets acquired or liabilities assumed is included in the operating results in the period in which the adjustment is identified.

During the three and six months ended June 30, 2022, adjustments were made within the permitted measurement period that resulted in an increase to the bargain purchased recognized of $ 2.8 million, net of tax, due to updated information regarding facts and circumstances which existed as of the date of the business combination.

As of the date of this report the Company has finalized the purchase price allocation in the fourth quarter of 2022.

During the three and nine months ended September 30, 2022, adjustments were made within the permitted measurement period that resulted in an increase to the bargain purchased recognized of $ 0.8 million and $ 3.6 million, respectively, net of tax, due to updated information regarding facts and circumstances which existed as of the date of the business combination.

The measurement period adjustments primarily impacted the bargain purchase gain and property and equipment.

The Company reported revenue and operating income during the three months ended June 30, 2022 of approximately $ 54.3 million and $ 11.3 million, respectively, and $ 96.5 million and $ 18.8 million for the six months ended June 30, 2022.

The Company reported revenue and operating income during the three months ended September 30, 2022 of approximately $ 60.8 million and $ 12.1 million, respectively, and $ 157.3 million and $ 30.9 million for the nine months ended September 30, 2022 attributable to the assets acquired from Basic.

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

7 unchanged sentences

Purchase price $ 37.1

The following unaudited pro-forma financial results considers that the Basic Acquisition occurred as of January 1, 2021 (in millions, except per share amounts):

Nine Months Ended September 30, 2021

Revenue $ 300.1

Operating loss $ ( 24.6 )

Net income (loss) $ ( 27.3 )

Basic earnings (loss) per share $ ( 1.68 )

Diluted earnings (loss) per share $ ( 1.68 )

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

The financial results of Basic are primarily included in the High-Specification Rigs reporting segment.

Note 4 — Property and Equipment, Net

1 unchanged sentence

Estimated Useful Life

(years) June 30, 2022 December 31, 2021

(years) September 30, 2022 December 31, 2021

High specification rigs 20 $ 130.5 $ 145.4

8 unchanged sentences

Property and equipment, net $ 226.2 $ 270.6

Depreciation expense was $ 11.3 million and $ 8.0 million for the three months ended June 30, 2022 and 2021, respectively and $ 22.7 million and $ 15.8 million for the six months ended June 30, 2022 and 2021.

Depreciation expense was $ 10.5 million and $ 8.6 million for the three months ended September 30, 2022 and 2021, respectively and $ 33.2 million and $ 24.4 million for the nine months ended September 30, 2022 and 2021.

Note 5 — Assets Held for Sale

3 unchanged sentences

Refer to “Note 10 — Debt” for further details.

As of June 30, 2022, the Company classified land and buildings within our High Specification Rigs and Processing Solutions and Ancillary Services segments, which are being actively marketed, as held for sale.

During the three and six months ended June 30, 2022, the Company recorded an impairment of $ 1.1 million to assets held for sale as the carrying value exceeded the fair value less estimated costs to sell.

Assets held for sale at June 30, 2022 consisted of the following (in millions):

June 30, 2022

As of September 30, 2022, the Company classified land and buildings within our High Specification Rigs and Processing Solutions and Ancillary Services segments, which are being actively marketed, as held for sale.

During the three and nine months ended September 30, 2022, the Company recorded an impairment of $ 0.2 million and $ 1.3 million, respectively, to assets held for sale as the carrying value exceeded the fair value less estimated costs to sell.

Assets held for sale at September 30, 2022 consisted of the following (in millions):

September 30, 2022

Land and buildings $ 3.0

4 unchanged sentences

Estimated Useful Life

(years) June 30, 2022 December 31, 2021

(years) September 30, 2022 December 31, 2021

Customer relationships 10 - 18

2 unchanged sentences

Intangible assets, net $ 7.2 $ 7.8

Amortization expense was $ 0.1 million and $ 0.2 million for the three months ended June 30, 2022 and 2021 respectively and $ 0.3 million and $ 0.4 million for the six months ended June 30, 2022 and 2021.

Amortization expense was $ 0.3 million and $ 0.1 million for the three months ended September 30, 2022 and 2021 respectively and $ 0.6 million and $ 0.5 million for the nine months ended September 30, 2022 and 2021.

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

For the twelve months ending June 30, Amount

For the twelve months ending September 30, Amount

Thereafter 3.7

1 unchanged sentence

Accrued expenses include the following (in millions):

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Accrued payables $ 11.0 $ 12.5

8 unchanged sentences

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 six months ended June 30, 2022 and 2021, are as follows (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Lease costs and other information related to operating leases for the three and nine months ended September 30, 2022 and 2021, are as follows (in millions):

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

2022 2021 2022 2021

Short-term lease costs $ 4.4 $ 1.1 $ 9.9 $ 1.9

Operating lease cost $ 0.5 $ 0.5 $ 1.1 $ 0.8

Operating lease costs $ 1.1 $ 0.5 $ 2.2 $ 1.3

Operating cash outflows from operating leases $ 0.7 $ 0.4 $ 1.9 $ 1.1

2 unchanged sentences

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

For the twelve months ending June 30,

For the twelve months ending September 30,

Thereafter 0.3

3 unchanged sentences

current portion of operating lease obligations ( 2.2 )

Long-term portion of finance lease obligations $ 6.1

Long-term portion of operating lease obligations $ 10.1

Finance Leases

3 unchanged sentences

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 six months ended June 30, 2022 and 2021, are as follows (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Lease costs and other information related to finance leases for the three and nine months ended September 30, 2022 and 2021, are as follows (in millions):

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

2022 2021 2022 2021

5 unchanged sentences

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

For the twelve months ending June 30, Total

For the twelve months ending September 30, Total

Total future minimum lease payments 7.0

4 unchanged sentences

Note 9 — Other Financing Liabilities

During the three and six months ended June 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 three and 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.

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 three and six months ended June 30, 2021, the Company entered into an agreement to sell certain other fixed assets and subsequently leased back such assets.

During the three and nine months ended September 30, 2021, the Company entered into an agreement to sell certain 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.

1 unchanged sentence

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

As of June 30, 2022, aggregate future lease payments of the financing liabilities are as follows (in millions):

For the twelve months ending June 30,

As of September 30, 2022, aggregate future lease payments of the financing liabilities are as follows (in millions):

For the twelve months ending September 30,

Thereafter 9.0

2 unchanged sentences

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Eclipse Revolving Credit Facility $ 24.9 $ 27.0

9 unchanged sentences

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 June 30, 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.

The Company was in compliance with the Eclipse Loan and Security Agreement covenants as of September 30, 2022.

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

On September 23, 2022, the Company entered into the Amended Loan Agreement with EBC and Eclipse Business Capital SPV, LLC, which, among other things, designated the change in reference rate from LIBOR to SOFR, and designated a Letter of Credit in the amount of $ 1.6 million to be utilized for working capital and general corporate purposes, as needed.

Revolving Credit Facility

5 unchanged sentences

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 $ 57.1 million , which was based on a borrowing base certificate in effect as of June 30, 2022.

The Company had outstanding borrowings of $ 33.9 million under the Revolving Credit Facility, leaving a residual $ 23.2 million available for borrowings as of June 30, 2022.

Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 4.5 % to 5 % in excess of the LIBOR Rate and 3.5 % to 4 % in excess of the Base Rate, dependent on the fixed cost coverage ratio, through July 1, 2022.

The weighted average interest rate for the loan was approximately 5.5 % for the six months ended June 30, 2022.

Under the Revolving Credit Facility, the total loan capacity was $ 57.0 million, which was based on a borrowing base certificate in effect as of September 30, 2022.

The Company had outstanding borrowings of $ 24.9 million under the Revolving Credit Facility, leaving a residual $ 30.5 million available for borrowings as of September 30, 2022.

The weighted average interest rate for the loan was approximately 5.9 % for the nine months ended September 30, 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 June 30, 2022 were $ 1.5 million.

Unamortized debt issuance costs as of September 30, 2022 were $ 1.4 million.

On September 14, 2022, the Company issued a letter of credit in the amount of $ 1.6 million which was issued for insurance related purposes.

The $ 1.6 million was drawn under the Company’s Revolving Credit Facility and thereby reduces the availability thereunder.

The Letter of Credit bears an interest rate of 4.5 % per annum and is scheduled to mature in September 2023, however the terms of such Letter of Credit provide that it may be automatically extended without written consent of any of the parties thereto.

M&E Term Loan Facility

1 unchanged sentence

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 M&E Term Loan was 8.5 % for the six months ended June 30, 2022.

The weighted average interest rate for the M&E Term Loan was 9.0 % for the nine months ended September 30, 2022.

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

2 unchanged sentences

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 June 30, 2022 were $ 0.3 million.

The Company paid approximately $ 0.4 million on M&E Term Loan subsequent to June 30, 2022, where such cash was generated from the sale of certain assets under the M&E Term Loan.

Unamortized debt issuance costs as of September 30, 2022 were $ 0.2 million.

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

Borrowings under Term Loan B bear interest at a rate per annum equal to 13 % in excess of the LIBOR Rate and 11 % in excess of the Base Rate.

Term Loan B is scheduled to mature in September 2022.

The weighted average interest rate for Term Loan B was 12.7 % for the three months ended June 30, 2022.

On October 1, 2021, Term Loan B was drawn in full to repay borrowings under the Revolving Credit Facility and as of June 30, 2022 the principal balance outstanding was $ 2.8 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 June 30, 2022 were $ 0.1 million.

The Company paid approximately $ 1.8 million on Term Loan B subsequent to June 30, 2022, where such cash was generated from the sale of Basic assets under the Term Loan B.

Term Loan B was scheduled to mature in September 2022.

The weighted average interest rate for Term Loan B was 12.4 % through the maturity date of August 16, 2022.

On October 1, 2021, Term Loan B was drawn in full to repay borrowings under the Revolving Credit Facility as of September 30, 2022.

Cash proceeds generated from the sale of Basic assets were utilized to make payments on Term Loan B and were not available to be reborrowed.

The Company capitalized fees of $ 0.6 million associated with Term Loan B.

On August 16, 2022, the outstanding balance of Term Loan B was terminated.

At this time, the remaining balance of the loan was $ 0.3 million, which was paid utilizing funds from the Revolving Credit Facility.

At the time of the termination, the Company had capitalized fees associated with Term Loan B of $ 0.1 million, which was charged to interest expense on the Condensed Consolidated Statement of Operations.

Secured Promissory Note

1 unchanged sentence

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

As of June 30, 2022, the aggregate principal balance outstanding was $ 7.7 million.

As of September 30, 2022, the aggregate principal balance outstanding was $ 7.0 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.

Other Installment Purchases

During the three and six months ended June 30, 2022, 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 June 30, 2022, the aggregate principal balance outstanding under the Installment Agreements was $ 0.7 million and is payable ratably over 36 months from the time of each purchase.

During the three and nine months ended September 30, 2021 reporting periods, 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, 2022, the aggregate principal balance outstanding under the Installment Agreements was $ 0.6 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.

Debt Obligations and Scheduled Maturities

As of June 30, 2022, aggregate future principal payments of total debt are as follows (in millions):

For the twelve months ending June 30, Total

Thereafter 1.5

As of September 30, 2022, aggregate future principal payments of total debt are as follows (in millions):

For the twelve months ending September 30, Total

Note 11 — Equity

1 unchanged sentence

On September 10, 2021, the Company consummated the private placement, under the Securities Purchase Agreement, 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 during the three and six months ended June 30, 2022, the Preferred Stock automatically converted into shares of the Company’s

Class A Common Stock, on April 18, 2022, upon effectiveness of the registration statement filed on Form S-1 by the Company on March 31, 2022 (File No.

The transaction closed on October 1, 2021 and during the nine months ended September 30, 2022, the Preferred Stock automatically converted into shares of the Company’s Class A Common Stock, on April 18, 2022, upon effectiveness of the registration statement filed on Form S-1 by the Company on March 31, 2022 (File No.

001-699-039).

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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 six months ended June 30, 2022, the Company granted approximately 417,200 RSAs with an approximated aggregate value of $ 4.2 million.

During the three and six months ended June 30, 2021, the Company granted approximately 500,100 restricted shares with an aggregate value of $ 3.0 million.

As of June 30, 2022, there was an aggregate $ 5.4 million of unrecognized expense related to restricted shares issued which is expected to be recognized over a weighted average period of 1.9 years.

During the three and nine months ended September 30, 2022, the Company granted approximately 67,400 and 484,600 RSAs, respectively, with an approximated aggregate value of $ 4.8 million.

During the three and nine months ended September 30, 2021, the Company granted approximately 145,200 and 645,300 RSAs, respectively, with an aggregate value of $ 4.2 million.

As of September 30, 2022, there was an aggregate $ 5.2 million of unrecognized expense related to restricted shares issued which is expected to be recognized over a weighted average period of 1.8 years.

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 six months ended June 30, 2022, the Company granted approximately 91,500 target shares of market-based performance stock units at a relative and absolute grant date fair value of approximately $ 14.11 and $ 12.69 per share, respectively, which are expected to vest (if at all) following the completion of the applicable performance period on December 31, 2024.

During the three and six months ended June 30, 2021, the Company granted approximately 145,300 target shares of market-based performance stock units at a relative and absolute grant date fair value of $ 9.24 per share 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.

As of June 30, 2022, there was an aggregate $ 1.6 million of unrecognized compensation cost related to performance stock units which are expected to be recognized over a weighted average period of 1.9 years.

During the nine months ended September 30, 2022, the Company granted approximately 91,500 target shares of market-based performance stock units at a relative and absolute grant date fair value of approximately $ 14.11 and $ 12.69 per share, respectively, which are expected to vest (if at all) following the completion of the applicable performance period on December 31, 2024.

During the three and nine months ended September 30, 2021, the Company granted approximately 100,900 and 246,200 target shares, respectively, of market-based performance stock units at a relative and absolute grant date fair value of $ 9.24 per share 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.

As of September 30, 2022, 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 1.7 years.

Note 12 — Risk Concentrations

Customer Concentrations

During the three months ended June 30, 2022, two customers, Occidental Petroleum Corporation (“Oxy”) and ConocoPhillips (“Conoco”), accounted for 11 % and 10 %, respectively, of the Company’s consolidated revenues.

During the six months ended June 30, 2022, Oxy and Chevron Corporation accounted for 11 % and 10 %, respectively, of the Company’s consolidated revenues.

As of June 30, 2022, approximately 22 % of the net accounts receivable balance was due from these two customers.

During the three months ended June 30, 2021, two customers, EOG Resources and ConocoPhillips, accounted for 20 % and 14 %, respectively, of the Company’s consolidated revenues.

During the six months ended June 30, 2021, the same two customers accounted for 22 % and 12 %, respectively, of the Company’s consolidated revenues.

As of June 30, 2021, approximately 28 % of the net accounts receivable balance was due from these customers.

During the three and nine months ended September 30, 2022, Occidental Petroleum Corporation (“Oxy”) accounted for 11 % and 10 % of the Company’s consolidated revenues, respectively.

As of September 30, 2022, approximately 15 % of the net accounts receivable balance was due from this customer.

During 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.

During the nine months ended September 30, 2021, three customers, EOG Resources, 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 customers.

Note 13 — Income Taxes

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In calculating the estimated annual effective tax rate, the Company considers forecasted annual pre-tax income and estimated permanent book versus tax differences.

Adjustments to the effective tax rate and other income tax related estimates could occur during the year as information and assumptions change which could include, but are not limited to, changes to forecasted amounts, estimates of permanent book versus tax differences, and changes to tax laws and rates, uses an estimated annual effective tax rate for purposes of determining the income tax provision during interim reporting periods.

In calculating the estimated annual effective tax rate, the Company considers forecasted annual pre-tax income and estimated permanent book versus tax differences.

The effective U.S.

federal income tax rate applicable to the Company for the six months ended June 30, 2022 and 2021 was 29.4 % and ( 1.7 )%, 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.

Historically, a portion of the Company's Net Operating Loss ("NOL") carryforwards have been subject to limitations of utilization under Section 382 of the Internal Revenue Code of 1986, as amended.

The Company may be subject to additional limitations due to ownership changes that may have occurred previously.

The Company reviews ownership changes available as shareholdings are known to determine if ownership changes have occurred that would result in such a limitation.

Given the availability and timing of such ownership information and the underlying analysis required to evaluate, there can be no assurance that existing NOL carry-forwards or credits will not be subject to limitation as of the end of a reporting period.

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

federal income tax rate applicable to the Company for the nine months ended September 30, 2022 and 2021 was 11.6 % and ( 0.2 )%, respectively.

The Company is subject to the Texas Margin Tax, which 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.

Historically, utilization of a portion of the Company's net operating loss ("NOL") carryforwards has been subject to limitations of utilization under Section 382 of the Internal Revenue Code of 1986, as amended.

The Company may be subject to additional limitations due to ownership changes that could occur.

The Company reviews changes in the ownership of its shares as such information becomes available to determine whether changes that would result in further limitation have occurred.

Given the availability and timing of such ownership information and the underlying analysis required to evaluate such changes, there can be no assurance that existing NOL carry-forwards or credits will not be subject to limitation as of the end of a reporting period.

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

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 months ended June 30, 2022 and 2021 differed from amounts computed by applying the U.S.

Total income tax expense for the three months ended September 30, 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.

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the United States and Texas.

As of June 30, 2022, the Company has no current tax years under audit.

As of September 30, 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 2016 through 2021.

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 June 30, 2022, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.

Therefore, as of September 30, 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.

There have been 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 June 30, 2022 and such amounts are included in Accrued expenses on the Condensed Consolidated Balance Sheet.

However, the Company has deferred payroll tax payments of $ 1.1 million as of September 30, 2022 and such amounts are included in Accrued expenses on the Condensed Consolidated Balance Sheet.

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

Treasury Department, the Internal Revenue Service and others.

Note 14 — Loss per Share

Loss per share is based on the amount of net loss allocated to the shareholders and the weighted average number of shares outstanding during the period for each class of Common Stock.

In August 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA 2022”) (Public Law Number 117-169) into law.

This legislation is not expected to have a material impact on our financial statements.

Note 14 — Earnings (Loss) per Share

Earnings or loss per share is based on the amount of net income or loss allocated to the shareholders and the weighted average number of shares outstanding during the period for each class of Common Stock.

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

Three Months Ended June 30, Six Months Ended June 30,

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

2022 2021 2022 2021

Loss (numerator):

Loss attributable to Ranger Energy Services, Inc.

Income (loss) (numerator):

Income (loss) attributable to Ranger Energy Services, Inc.

$ 13.6 $ ( 5.6 ) $ 7.5 $ ( 15.8 )

Loss attributable to Class A Common Stock $ ( 0.4 ) $ ( 5.6 ) $ ( 6.1 ) $ ( 10.2 )

Loss attributable to Ranger Energy Services, Inc.

Net income (loss) attributable to Class A Common Stock $ 13.6 $ ( 5.6 ) $ 7.5 $ ( 15.8 )

Income (loss) attributable to Ranger Energy Services, Inc.

$ 13.6 $ ( 5.6 ) $ 7.5 $ ( 15.8 )

Net loss attributable to Class A Common Stock $ ( 0.4 ) $ ( 5.6 ) $ ( 6.1 ) $ ( 10.2 )

Net income (loss) attributable to Class A Common Stock $ 13.6 $ ( 5.6 ) $ 7.5 $ ( 15.8 )

Weighted average shares (denominator):

Weighted average number of shares - basic 24,845,517 11,011,864 22,323,308 9,714,508

Effect of share-based awards 338,550 — 314,149 —

Weighted average number of shares - diluted 25,184,067 11,011,864 22,637,457 9,714,508

Basic loss per share $ ( 0.02 ) $ ( 0.59 ) $ ( 0.29 ) $ ( 1.13 )

Diluted loss per share $ ( 0.02 ) $ ( 0.59 ) $ ( 0.29 ) $ ( 1.13 )

During the three and six months ended June 30, 2022, the Company excluded approximately 1.0 million of equity-based awards, in calculating diluted loss per share, as the effect was anti-dilutive.

During the three and six months ended June 30, 2021, the Company excluded 1.3 million of equity-based awards and 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock in calculating diluted loss per share, as the effect was anti-dilutive.

Basic income (loss) per share $ 0.55 $ ( 0.51 ) $ 0.34 $ ( 1.63 )

Diluted income (loss) per share $ 0.54 $ ( 0.51 ) $ 0.33 $ ( 1.63 )

During the three and nine months ended September 30, 2022, the Company excluded 0.1 million of equity-based awards in calculating diluted income per share, as the effect was anti-dilutive.

During the three and nine months ended September 30, 2021, the Company excluded 1.1 million of equity-based awards and 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock in calculating diluted loss per share, as the effect was anti-dilutive.

Note 15 — Commitments and Contingencies

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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.

Certain segment information as of June 30, 2022 and December 31, 2021 and for the three and six months ended June 30, 2022 and 2021 is as follows (in millions):

Certain segment information as of September 30, 2022 and December 31, 2021 and for the three and nine months ended September 30, 2022 and 2021 is as follows (in millions):

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

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Revenues $ 79.7 $ 60.6 $ 36.7 $ — $ 177.0

Cost of services 62.7 49.2 26.2 — 138.1

General and administrative — — — 11.0 11.0

Depreciation and amortization 6.3 2.8 1.3 0.4 10.8

Impairment of fixed assets — — — 0.2 0.2

(Gain) loss on sale of assets — — — ( 1.1 ) ( 1.1 )

Operating income (loss) 10.7 8.6 9.2 ( 10.5 ) 18.0

Interest expense, net — — — 1.8 1.8

Income tax expense (benefit) — — — 3.4 3.4

Gain on bargain purchase — — — ( 0.8 ) ( 0.8 )

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Capital expenditures $ 2.8 $ 0.4 $ 2.0 $ — $ 5.2

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Revenues $ 220.6 $ 148.7 $ 84.9 $ — $ 454.2

Cost of services 175.3 134.8 66.0 — 376.1

General and administrative — — — 32.4 32.4

Depreciation and amortization 20.8 8.3 3.3 1.4 33.8

Impairment of fixed assets — — — 1.3 1.3

(Gain) loss on sale of assets — — — — —

Operating income (loss) 24.5 5.6 15.6 ( 35.1 ) 10.6

Interest expense, net — — — 5.7 5.7

Income tax expense (benefit) — — — 1.0 1.0

Gain on bargain purchase — — — ( 3.6 ) ( 3.6 )

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Capital expenditures $ 5.7 $ 2.0 $ 5.2 $ — $ 12.9

As of June 30, 2022

As of September 30, 2022

Accounts receivable, net $ 49.0 $ 29.7 $ 16.3 $ — $ 95.0

Property and equipment, net $ 128.8 $ 34.4 $ 45.7 $ 17.3 $ 226.2

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

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Revenues $ 29.9 $ 45.4 $ 6.4 $ — $ 81.7

Cost of services 25.1 44.0 4.9 — 74.0

General and administrative — — — 7.1 7.1

Depreciation and amortization 4.1 2.7 1.5 0.4 8.7

Operating income (loss) 0.7 ( 1.3 ) — ( 7.5 ) ( 8.1 )

Interest expense, net — — — 1.2 1.2

Income tax expense (benefit) — — — ( 0.2 ) ( 0.2 )

Net income (loss) $ 0.7 $ ( 1.3 ) $ — $ ( 8.5 ) $ ( 9.1 )

Capital expenditures $ 2.2 $ 0.6 $ 0.2 $ — $ 3.0

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Revenues $ 80.6 $ 73.1 $ 16.3 $ — $ 170.0

Cost of services 68.1 70.4 13.7 — 152.2

General and administrative — — — 16.7 16.7

Depreciation and amortization 13.6 5.5 4.7 1.1 24.9

Operating loss $ ( 1.8 ) $ ( 1.5 ) $ ( 2.1 ) $ ( 10.4 ) $ ( 15.8 )

Net loss $ ( 1.8 ) $ ( 1.5 ) $ ( 2.1 ) $ ( 12.0 ) $ ( 17.4 )

Operating income (loss) ( 1.1 ) ( 2.8 ) ( 2.1 ) ( 17.9 ) ( 23.9 )

Interest expense, net — — — 2.5 2.5

Income tax expense (benefit) — — — 0.1 0.1

Net income (loss) $ ( 1.1 ) $ ( 2.8 ) $ ( 2.1 ) $ ( 20.5 ) $ ( 26.5 )

Capital expenditures $ 4.6 $ 1.4 $ 0.5 $ — $ 6.5

As of December 31, 2021

Accounts receivable, net $ 40.9 $ 26.8 $ 13.1 $ — $ 80.8

Property and equipment, net $ 155.0 $ 41.5 $ 48.9 $ 25.2 $ 270.6

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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