What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-03-01 compared with 2023-02-24 · 475 added, 385 removed, 1245 unchanged (41% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Control and Procedures

Under the direction of our Chief Executive Officer and Chief Financial Officer, we have established disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed,

summarized and reported within the time periods specified in the SEC’s rules and forms.

The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

10 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Grant Thornton LLP, the independent registered public accounting firm that audited the consolidated financial statements of the Company included in this Annual Report on Form 10-K, has issued their report on the effectiveness of the Company’s internal control over financial reporting at December 31, 2023.

The report, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting at December 31, 2023, is included in this Item under the heading “Report of Independent Registered Public Accounting Firm”.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Mammoth Energy Services, Inc.

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Mammoth Energy Services, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2023, and our report dated March 1, 2024 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

/s/ GRANT THORNTON LLP

Oklahoma City, Oklahoma

March 1, 2024

Other Information

Not applicable.

As discussed in this report, on December 1, 2023, Cobra, as seller, and Mammoth, as guarantor, entered into an assignment agreement (the “Assignment Agreement”) with SPCP Group, LLC (“SPCP Group”).

Under the terms and conditions of the Assignment Agreement, Cobra transferred to SPCP Group all of its rights, title and interest in $54.4 million of outstanding accounts receivable with PREPA and received net proceeds of $46.1 million.

On February 26, 2024, PREPA paid $50.6 million with respect to its outstanding receivable to Cobra.

This was in addition to $13.4 million paid by PREPA in January 2024.

Of the $64.0 million paid by PREPA in 2024, $9.6 million was paid to Cobra and $54.4 million was paid to SPCP Group, as Cobra’s assignee under the Assignment Agreement.

Following such payment, all of Cobra’s and Mammoth’s obligations under the Assignment Agreement were fully extinguished and the Assignment Agreement was terminated effective as of February 28, 2024.

For additional information regarding the Assignment Agreement, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Cobra Assignment Agreement,” which information is incorporated herein by reference.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

30 unchanged sentences

001-37917), filed with the SEC on November 15, 2016).

First Amendment to Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No.

001-37917), filed with the SEC on June 9, 2020).

Description of Securities of the Company (incorporated by reference to Exhibit 4.1 to the Company ’ s Annual Report on Form 10-K (File No.

38 unchanged sentences

001-37917), filed with the SEC on May 31, 2018).

Amended and Restated Revolving Credit and Security Agreement, dated as of October 19, 2018, by and among Mammoth Energy Services, Inc., certain direct and indirect subsidiaries, the lenders party thereto and PNC Bank, National Association, as a lender and administrative agent for the lenders (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.

001-37917), filed with the SEC on October 25, 2018).

First Amendment to Amended and Restated Revolving Credit and Security Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No.

001-37917), filed with the SEC on November 12, 2019).

Second Amendment to Amended and Restated Revolving Credit and Security Agreement, dated as of February 26, 2020 (incorporated by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K (File No.

001-37917), filed with the SEC on March 2, 2020).

N745BW Helicopter Lease Agreement, dated as of January 10, 2020 and effective as of January 1, 2020, by and between Cobra Aviation Services LLC and Cobra Acquisitions LLC and Brim Equipment Leasing LLC (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No.

001-37917), filed with the SEC on May 11, 2020).

N745MB Helicopter Lease Agreement, dated as of January 10, 2020 and effective as of January 1, 2020, by and between Cobra Aviation LLC and Brim Equipment Leasing LLC (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No.

001-37917), filed with the SEC on May 11, 2020).

N810LA Helicopter Lease Agreement, dated as of January 10, 2020 and effective as of January 1, 2020, by and between Cobra Aviation LLC and Brim Equipment Leasing LLC (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No.

001-37917), filed with the SEC on May 11, 2020).

N902TX Helicopter Lease Agreement, dated as of January 10, 2020 and effective as of January 1, 2020, by and between Air Rescu e Systems Corporation and Brim Equipment Leasing LLC (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (File No.

001-37917), filed with the SEC on May 11, 2020).

N904AF Helicopter Lease Agreement, dated as of January 10, 2020 and effective as of January 1, 2020, by and between Cobra Aviation LLC and Brim Equipment Leasing LLC (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (File No.

N904AF Helicopter Lease Agreement, dated as of January 10, 2020 and effective as of January 1, 2020, by and between Leopard Aviation LLC and Brim Equipment Leasing LLC (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (File No.

001-37917), filed with the SEC on May 11, 2020).

1 unchanged sentence

2016 Equity Incentive Plan (incorporated by reference to Appendix A to the Company's Definitive Proxy Statement on Schedule 14A, filed with the SEC on June 10, 2020).

Third Amendment to Amended and Restated Credit Agreement, dated as of November 3, 2021 (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (File No.

001-37917), filed with the SEC on November 5, 2021).

Fourth Amendment to Amended and Restated Credit Agreement, dated as of February 28, 2022 (incor porated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K (File No.

001-37917), filed with the SEC on March 4, 2022).

Revolving Credit Agreement, dated as of October 16, 2023, by and among Mammoth Energy Services, Inc., as borrower, certain of its direct and indirect subsidiaries, as guarantors, the lenders from time to time party thereto, and Fifth Third Bank, National Association, as agent, letters of credit issuer and swing line lender.

Loan and Security Agreement, dated as of October 16, 2023, by and among Mammoth Energy Services, Inc., as borrower, certain of its direct and indirect subsidiaries, as guarantors, the lenders from time to time party thereto and Wexford Capital LP, as agent for lenders.

Assignment Agreement, dated as of December 1, 2023, between Cobra Acquisitions LLC, as seller, Mammoth Energy Services, Inc.

as guarantor, and SPCP Group, LLC, as purchaser.

List of Significant Subsidiaries of the Company.

9 unchanged sentences

001-37917) filed with the SEC on March 4, 2022).

Mammoth Energy Services, Inc.

Clawback Policy, effective as of December 1, 2023.

101.INS* XBRL Instance Document.

11 unchanged sentences

MAMMOTH ENERGY SERVICES, INC.

February 24, 2023 By:

March 1, 2024 By:

/s/ Mark Layton

2 unchanged sentences

Signature Title Date

/s/ Arty Straehla Chief Executive Officer (principal executive officer) and Director February 24, 2023

/s/ Arty Straehla Chief Executive Officer (principal executive officer) and Director March 1, 2024

Arty Straehla

/s/ Mark Layton Chief Financial Officer (principal financial and accounting officer) February 24, 2023

/s/ Arthur Amron Director (Chairman of the Board) February 24, 2023

Palm Director February 24, 2023

/s/ Paul Jacobi Director February 24, 2023

/s/ Arthur Smith Director February 24, 2023

/s/ Corey Booker Director February 24, 2023

/s/ Mark Layton Chief Financial Officer (principal financial and accounting officer) March 1, 2024

/s/ Arthur Amron Director (Chairman of the Board) March 1, 2024

Palm Director March 1, 2024

/s/ Paul Jacobi Director March 1, 2024

/s/ Arthur Smith Director March 1, 2024

/s/ Corey Booker Director March 1, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

3 unchanged sentences

We have audited the accompanying consolidated balance sheets of Mammoth Energy Services, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of comprehensive loss, changes in equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of comprehensive loss, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 1, 2024 expressed an unqualified opinion.

Basis for opinion

1 unchanged sentence

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

9 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Collectability of receivable balances from the Puerto Rico Electric Power Authority

Measurement of receivable balances from the Puerto Rico Electric Power Authority

As described further in Notes 2 and 20 to the consolidated financial statements, Cobra Acquisitions LLC (“Cobra”) and the Puerto Rico Electric Power Authority (“PREPA”) entered into an emergency master services agreement in October 2017 and a second master service contract in May 2018 for repairs to PREPA’s electrical grid due to damage caused by Hurricane Maria in 2017 (collectively, the “PREPA Contracts”).

As of December 31, 2023, the consolidated financial statements include accounts receivable from PREPA for approximately $204.8 million for services performed as well as receivables of approximately $197.5 million of interest charges on delinquent balances in accordance with the terms of the PREPA Contracts (collectively, “PREPA receivable”).

PREPA is subject to bankruptcy proceedings that are currently pending in the U.S.

District Court for the District of Puerto Rico.

Furthermore, on September 10, 2019, the U.S.

District Court for the District of Puerto Rico unsealed an indictment that charged three individuals, including the former president of Cobra, with conspiracy, wire fraud, false statements and disaster fraud.

The indictment was focused on the interactions between a former U.S.

Department of Homeland Security - Federal Emergency Management Agency (“FEMA”) official and the former president of Cobra, which concluded in December 2022.

The Company is cooperating with the U.S.

Securities and Exchange Commission and the U.S.

Department of Justice in the criminal matter and neither the Company nor any of its subsidiaries were charged in the indictment.

However, adverse developments in the criminal investigation and/or related litigation may affect PREPA’s willingness or intent to remit payment to Cobra.

We identified the collectability of the receivable balances associated with the PREPA Contracts as a critical audit matter.

The principal consideration for our determination that the collectability of the receivable balances from PREPA is a critical audit matter is the high degree of estimation uncertainty resulting from significant management judgment.

Given that PREPA is subject to bankruptcy proceedings and as a result, its ability to meet its remaining obligations under the PREPA Contracts is largely dependent upon funding from FEMA or other sources, and given the related litigation described in Notes 2 and 19, management’s qualitative evaluation of the collectability of the PREPA receivable and the determination of PREPA’s ability and intent to remit payment required a high degree of auditor judgment and an increased extent of effort to assess the reasonableness of management’s estimates and assumptions.

Our audit procedures related to the collectability of the receivable balances from PREPA included the following, among others.

• We obtained an understanding and evaluated the design and implementation of management’s controls over the collectability of the receivable balances from PREPA.

We identified the measurement of the receivable balances associated with the PREPA Contracts as a critical audit matter.

The principal consideration for our determination that the measurement of the receivable balances from PREPA is a critical audit matter is the high degree of estimation uncertainty resulting from significant management judgment.

PREPA receivable and the determination of PREPA’s ability and intent to remit payment required a high degree of auditor judgment and an increased extent of effort to assess the reasonableness of management’s estimates and assumptions.

Our audit procedures related to the measurement of the receivable balances from PREPA included the following, among others.

• We obtained an understanding and evaluated the design, implementation, and operating effectiveness of management’s controls over the assessment of the measurement of the receivable balances from PREPA.

• We evaluated the qualitative assessment performed by management by performing the following:

◦ We inquired of management to gain an understanding of the relevant facts and circumstances related to the current status of FEMA’s review of invoices submitted by PREPA for reimbursement, PREPA’s appeals with FEMA on any amounts initially determined to be ineligible for federal assistance, the status of PREPA’s bankruptcy proceedings and the status of the related litigation.

◦ We corroborated the facts and circumstances by obtaining and reviewing the relevant legal documents and correspondence with officials of PREPA, FEMA and the Federal Oversight and Management Board for Puerto Rico, which is involved in the oversight of PREPA.

◦ We evaluated responses to inquiry letters sent to internal and external legal counsel and obtained written representations from management related to the collectability of the PREPA receivable and related litigation.

◦ Through such procedures, we assessed the reasonableness of management’s conclusions regarding the collectability of the accounts receivables from PREPA and whether a loss is probable or reasonably possible.

• We assessed the sufficiency of management’s disclosures related to the PREPA receivable and related litigation, including that PREPA’s ability to meet its payment obligations is largely dependent upon funding from FEMA and that the receivable may not be collectible if PREPA (i) does not have or does not obtain the funds necessary to satisfy its obligations under the contracts, (ii) obtains the necessary funds but refuses to pay the amounts owed to the Company or (iii) otherwise does not pay amounts owed to the Company for services performed.

◦ We inquired of management to gain an understanding of the relevant facts and circumstances related to the status of FEMA’s review of invoices submitted by PREPA for reimbursement, PREPA’s appeals with FEMA on any amounts initially determined to be ineligible for federal assistance, and the status of PREPA’s bankruptcy proceedings.

We evaluated management’s responses and analyzed the overall impact to the measurement of the PREPA receivable.

◦ We sent PREPA an audit confirmation to verify the receivable balance as of year-end.

◦ We inspected publicly available information to verify PREPA’s liquidity position as of year-end, and we inspected relevant court filings to verify funds FEMA has obligated to PREPA.

◦ We held direct conversations with external legal counsel handling matters pertaining to PREPA and evaluated the responses to our inquiries regarding the current facts and circumstances of legal proceedings and the measurement of the accounts receivable from PREPA.

Additionally, we sent inquiry letters to external legal counsel and obtained written representations from management related to the measurement of the PREPA receivable and the status of legal proceedings.

◦ We corroborated the facts and circumstances by obtaining and reviewing the relevant court filings and correspondence with officials of PREPA, FEMA, and the Federal Oversight and Management Board for Puerto Rico, which is involved in the oversight of PREPA.

◦ Through such procedures, we assessed the reasonableness of management’s conclusions regarding the measurement of the accounts receivable from PREPA and assessed the weighting of evidence collected to evaluate management’s conclusion that no reserve for credit loss was necessary.

• We assessed the sufficiency of management’s disclosures related to the PREPA receivable and related legal proceedings, including that PREPA’s ability to meet its payment obligations is largely dependent upon funding from FEMA or other sources and that the receivable may not be collectable if PREPA (i) does not have or does not obtain the funds necessary to satisfy its obligations under the contracts, (ii) obtains the necessary funds but refuses to pay the amounts owed to the Company, or (iii) otherwise does not pay amounts owed to the Company for services performed.

/s/ GRANT THORNTON LLP

1 unchanged sentence

Oklahoma City, Oklahoma

February 24, 2023

March 1, 2024

MAMMOTH ENERGY SERVICES, INC.

3 unchanged sentences

Cash and cash equivalents $ 16,556 $ 17,282

Short-term investment — 1,762

Restricted cash 7,742 —

Accounts receivable, net 447,155 456,465

16 unchanged sentences

Accrued expenses and other current liabilities 86,713 52,297

Accrued expenses and other current liabilities - related parties 1,241 —

Current operating lease liability 5,771 5,447

2 unchanged sentences

Total current liabilities 182,553 237,212

Long-term debt, net of current portion — 85,240

Long-term debt from related parties 42,809 —

Deferred income tax liabilities 628 471

28 unchanged sentences

Selling, general and administrative (Note 13)

37,458 39,554 77,861

Selling, general and administrative - related parties (Note 13)

6 unchanged sentences

OTHER INCOME (EXPENSE)

Interest expense, net ( 11,506 ) ( 6,406 ) ( 5,397 )

Interest expense and financing charges, net ( 14,955 ) ( 11,506 ) ( 6,406 )

Interest expense and financing charges, net - related parties ( 1,241 ) — —

Other income, net 42,015 40,912 5,669

Other (expense) income, net - related parties — ( 515 ) 1,890

Other expense, net - related parties — — ( 515 )

Total other income (expense) 25,819 29,406 ( 1,252 )

6 unchanged sentences

Comprehensive loss $ ( 2,942 ) $ ( 1,529 ) $ ( 101,296 )

Net loss per share (basic) (Note 15) $ ( 0.01 ) $ ( 2.18 ) $ ( 2.36 )

Net loss per share (diluted) (Note 15) $ ( 0.01 ) $ ( 2.18 ) $ ( 2.36 )

Weighted average number of shares outstanding (Note 15) 47,175 46,428 45,644

Weighted average number of shares outstanding, including dilutive effect (Note 15) 47,175 46,428 45,644

Net loss per share (basic and diluted) (Note 16)

$ ( 0.07 ) $ ( 0.01 ) $ ( 2.18 )

Weighted average number of shares outstanding, basic and diluted (Note 16)

47,777 47,175 46,428

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

12 unchanged sentences

Net loss — — ( 619 ) — — ( 619 )

Other comprehensive income — — — — 134 134

Other comprehensive loss — — — — ( 910 ) ( 910 )

Balance at December 31, 2022 47,312 $ 473 $ ( 73,154 ) $ 539,138 $ ( 3,841 ) $ 462,616

Stock based compensation 795 8 — 1,337 — 1,345

Shares repurchased ( 166 ) ( 2 ) — ( 917 ) — ( 919 )

Net loss — — ( 3,163 ) — — ( 3,163 )

Other comprehensive loss — — — — ( 910 ) ( 910 )

Other comprehensive income — — — — 221 221

Balance at December 31, 2023 47,941 $ 479 $ ( 76,317 ) $ 539,558 $ ( 3,620 ) $ 460,100

9 unchanged sentences

Depreciation, depletion, amortization and accretion 45,110 64,271 78,475

Amortization of coil tubing strings — — 359

Amortization of debt origination costs 777 665 831

Bad debt expense (Note 2) 3,389 41,662 21,958

Amortization of financing origination costs 1,288 777 665

Change in provision for expected credit losses ( 591 ) 3,389 41,662

Gains on disposal of assets, net ( 6,041 ) ( 3,908 ) ( 5,147 )

2 unchanged sentences

Impairment of other long-lived assets — — 1,212

Gain on sale of business ( 2,080 ) — —

Deferred income taxes ( 1,687 ) 7,700 ( 32,005 )

7 unchanged sentences

Accrued expenses and other liabilities ( 6,949 ) ( 15,272 ) 12,380

Accrued expenses and other liabilities - related parties 1,241 — —

Income taxes payable 12,757 5,800 8,658

2 unchanged sentences

Purchases of property and equipment ( 19,395 ) ( 12,737 ) ( 5,843 )

Purchases of property and equipment from related parties — — ( 76 )

Contributions to equity investee — — ( 490 )

Business divestitures, net of cash transferred 3,276 — —

Proceeds from disposal of property and equipment 7,333 10,613 11,350

Purchase of short-term investment — — ( 1,750 )

Net cash (used in) provided by investing activities ( 8,786 ) ( 2,124 ) 5,507

1 unchanged sentence

Borrowings on long-term debt 201,091 197,975 73,100

Borrowings on long-term debt - related parties 43,874 — —

Repayments of long-term debt ( 284,610 ) ( 199,430 ) ( 68,911 )

Proceeds from financing transaction, net 46,120 — —

Proceeds from sale-leaseback transaction — 4,589 9,473

2 unchanged sentences

Debt issuance costs ( 3,972 ) — —

Other ( 919 ) —

Net cash (used in) provided by financing activities ( 15,586 ) ( 5,601 ) 8,428

Effect of foreign exchange rate on cash 2 ( 158 ) 7

Net increase (decrease) in cash and cash equivalents 7,383 ( 4,923 ) 8,950

Cash and cash equivalents at beginning of period 9,899 14,822 5,872

Cash and cash equivalents at end of period $ 17,282 $ 9,899 $ 14,822

Net increase (decrease) in cash, cash equivalents and restricted cash 7,016 7,383 ( 4,923 )

Cash, cash equivalents and restricted cash at beginning of period 17,282 9,899 14,822

Cash, cash equivalents and restricted cash at end of period $ 24,298 $ 17,282 $ 9,899

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

6 unchanged sentences

Cash paid for interest $ 12,017 $ 10,164 $ 4,827

Cash paid (recovered) for income taxes $ 106 $ 829 $ ( 617 )

Cash paid for income taxes $ 897 $ 106 $ 829

Supplemental disclosure of non-cash transactions:

51 unchanged sentences

IFX Transport LLC (“IFX”), formed December 5, 2018;

Air Rescue Systems LLC (“ARS”), acquired December 21, 2018;

Air Rescue Systems LLC (“ARS”), acquired December 21, 2018 and sold on July 13, 2023;

Leopard Aviation LLC (“Leopard”), formed April 29, 2019;

3 unchanged sentences

and Falcon Fiber Solutions LLC (“Falcon”), formed March 3, 2021.

On July 13, 2023, the Company sold all of its equity interests in ARS.

Activity for ARS through the date of sale is included in the accompanying consolidated financial statements.

The Company’s well completion services include equipment and personnel used in connection with the completion and early production of oil and natural gas wells.

3 unchanged sentences

The Company also provides other services, including aviation, equipment rentals, remote accommodations and equipment manufacturing.

The Company's operations are concentrated in North America.

During the periods presented, the Company has operated its oil and natural gas businesses in the Permian Basin, the Utica Shale, the Eagle Ford Shale, the Marcellus Shale, the Granite Wash, the SCOOP, the STACK, the Cana-Woodford Shale, the Cleveland Sand and the oil sands located in

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Northern Alberta, Canada.

The Company's operations are concentrated in North America.

The Company’s oil and natural gas business depends in large part on the conditions in the oil and natural gas industry and, specifically, on the amount of capital spending by its customers.

14 unchanged sentences

Actual results could differ from those estimates.

Significant estimates include, but are not limited to, the Company's sand reserves and their impact on calculating depletion expense, allowance for doubtful accounts, asset retirement obligations, reserves for self-insurance, depreciation and amortization of property and equipment, amortization of intangible assets and future cash flows, fair values used to assess recoverability and impairment of long-lived assets, including goodwill, estimates of income taxes and the estimated effects of litigation and other contingencies.

Significant estimates include, but are not limited to, the Company’s sand reserves and their impact on calculating depletion expense, allowance for expected credit losses, fair values used to assess recoverability and impairment of long-lived assets, including goodwill, estimates of income taxes and the estimated effects of litigation and other contingencies.

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation.

Previously, the Company included gains and losses on disposal of assets within other income (expense), net on the consolidated statement of comprehensive loss.

The Company now presents gains and losses on disposal of assets as a separate line titled “Gains on disposal of assets, net”.

Cash and Cash Equivalents and Short-Term Investment

Previously, the Company included Bison Trucking in its Drilling segment.

The Company now presents Bison Trucking in the “All Other” reconciling column.

See Note 21 for additional detail regarding our reporting segments.

There was no impact on previously reported total assets, total liabilities, net income (loss) or equity for the periods presented.

Cash, Cash Equivalents and Restricted Cash

All highly liquid investments with an original maturity of three months or less are considered cash equivalents.

Restricted cash consists of amounts held by our previous creditor as collateral for letters of credit and card program.

The Company maintains its cash accounts in financial institutions that are insured by the Federal Deposit Insurance Corporation, with the exception of cash held by Sand Tiger in a Canadian financial institution.

2 unchanged sentences

however, the Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risks on such accounts.

The Company’s short-term investment at December 31, 2021 consisted of a certificate of deposit with a maturity over 90 days.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows.

Cash and cash equivalents $ 16,556 $ 17,282

Restricted cash 7,742 —

Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 24,298 $ 17,282

Accounts Receivable

4 unchanged sentences

Customer balances are generally considered delinquent if unpaid by the 30th day following the invoice date and credit privileges may be revoked if balances remain unpaid.

Interest on delinquent trade accounts receivable is recognized in other income, net on the consolidated statement of comprehensive loss when chargeable and collectability is reasonably assured.

Interest on delinquent trade accounts receivable is recognized in “other income, net” in the consolidated statement of comprehensive loss when chargeable and collectability is reasonably assured.

During the period October 2017 through March 2019, the Company provided infrastructure services in Puerto Rico under master services agreements entered into by Cobra, one of the Company’s subsidiaries, with the Puerto Rico Electric Power Authority (“PREPA”) to perform repairs to PREPA’s electrical grid as a result of Hurricane Maria.

During the years ended December 31, 2023, 2022 and 2021, the Company charged interest on delinquent trade accounts receivable pursuant to the terms of its agreements with PREPA totaling $ 45.4 million, $ 41.3 million and $ 36.6 million, respectively.

These amounts are included in other income, net on the consolidated statement of comprehensive loss.

Included in “accounts receivable, net” on the consolidated balance sheets as of December 31, 2022 and 2021 were interest charges of $ 152.0 million and $ 110.8 million, respectively.

Allowance for Doubtful Accounts

The Company regularly reviews receivables and provides for expected losses through an allowance for doubtful accounts.

These amounts are included in “other income, net” in the accompanying consolidated statement of comprehensive loss.

Included in “accounts receivable, net” in the accompanying consolidated balance sheets as of December 31, 2023 and 2022 were interest charges of $ 197.5 million and $ 152.0 million, respectively.

Allowance for Current Expected Credit Losses

The Company regularly reviews receivables and provides for expected losses through an allowance for expected credit losses.

In evaluating the level of established reserves, the Company makes judgments regarding its customers’ ability to make required payments, economic events and other factors.

As the financial condition of customers changes, circumstances develop, or additional information becomes available, adjustments to the allowance for doubtful accounts may be required.

As the financial condition of customers changes, circumstances develop, or additional information becomes available, adjustments to the allowance for expected credit losses may be required.

In the event the Company expects that a customer may not be able to make required payments, the Company would increase the allowance through a charge to income in the period in which that determination is made.

If it is determined that previously reserved amounts are collectible, the Company would decrease the allowance through a credit to income in the period in which that determination is made.

Uncollectible accounts receivable are periodically charged against the allowance for doubtful accounts once a final determination is made regarding their collectability.

Uncollectible accounts receivable are periodically charged against the allowance for expected credit losses once a final determination is made regarding their collectability.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Following is a roll forward of the allowance for doubtful accounts for the years ended December 31, 2022, 2021 and 2020 (in thousands):

Following is a roll forward of the allowance for expected credit losses for the years ended December 31, 2023, 2022 and 2021 (in thousands):

Balance, January 1, 2021 $ 30,139

Additions charged to bad debt expense 22,705

Additions charged to other selling, general and administrative expense 3,950

Additions charged to other, net - related parties 1,427

Recoveries of receivables previously charged to bad debt expense ( 747 )

Deductions for uncollectible receivables written off ( 2,350 )

Balance, December 31, 2020 30,139

Additions charged to bad debt expense 41,873

Change in provision for expected credit losses 41,873

Additions charged to revenue 27,071

2 unchanged sentences

Additions charged to other income (expense), net 1,474

Recoveries of receivables previously charged to bad debt expense ( 211 )

Deductions for uncollectible receivables written off ( 83,049 )

Recoveries of receivables previously charged to credit loss expense ( 211 )

Write-offs charged against the provision ( 83,049 )

Balance, December 31, 2021 18,085

Additions charged to bad debt expense 3,550

Recoveries of receivables previously charged to bad debt expense ( 161 )

Deductions for uncollectible receivables written off ( 17,887 )

Change in provision for expected credit losses 3,550

Recoveries of receivables previously charged to credit loss expense ( 161 )

Write-offs charged against the provision ( 17,887 )

Balance, December 31, 2022 3,587

The Company has made specific reserves consistent with Company policy which resulted in additions to allowance for doubtful accounts totaling $ 3.6 million, $ 0.7 million and $ 3.3 million, respectively, for the years ended December 31, 2022, 2021 and 2020.

These additions were charged to bad debt expense based on the factors described above.

Also, during the year ended December 31, 2021, the Company recorded additions to allowance for doubtful accounts of $ 0.3 million related to insurance claim receivables for its directors and officers liability policy.

Change in provision for expected credit losses 47

Recoveries of receivables previously charged to credit loss expense ( 638 )

Write-offs charged against the provision ( 2,831 )

Balance, December 31, 2023 $ 165

The Company has made specific reserves consistent with Company policy which resulted in additions to allowance for expected credit losses totaling a nominal amount, $ 3.6 million and $ 0.7 million, respectively, for the years ended December 31, 2023, 2022 and 2021.

These additions were charged to credit loss expense based on the factors described above.

Also, during the year ended December 31, 2021, the Company recorded additions to allowance for expected credit losses of $ 0.3 million related to insurance claim receivables for its directors and officers liability policy.

The Company will continue to pursue collection until such time as final determination is made consistent with Company policy.

2 unchanged sentences

See Notes 3 and 20 for additional information.

Following is a roll forward of the allowance for doubtful accounts specifically related to Gulfport (in thousands):

Following is a roll forward of the allowance for expected credit losses specifically related to Gulfport (in thousands):

Balance, January 1, 2022 11,714

Additions charged to bad debt expense 41,196

Additions charged to revenue 27,070

Additions charged to other income (expense), net - related parties 1,842

Deductions for uncollectible receivables written off ( 80,975 )

Balance, December 31, 2021 11,714

Recoveries of receivables previously charged to bad debt expense ( 147 )

Deductions for uncollectible receivables written off ( 11,567 )

Recoveries of receivables previously charged to credit loss expense ( 147 )

Write-offs charged against the provision ( 11,567 )

Balance, December 31, 2022 —

As of December 31, 2023 and 2022, PREPA owed the Company $ 402.3 million and $ 379.0 million, respectively, which includes interest charged on delinquent balances.

PREPA is currently subject to bankruptcy proceedings, which were filed

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in July 2017 and are currently pending in the U.S.

PREPA is currently subject to bankruptcy proceedings, which were filed in July 2017 and are currently pending in the U.S.

District Court for the District of Puerto Rico.

As a result, PREPA’s ability to meet its payment obligations is largely dependent upon funding from the Federal Emergency Management Agency (“FEMA”) or other sources.

On September 30, 2019, Cobra filed a motion with the U.S.

District Court for the District of Puerto Rico seeking recovery of the amounts owed to Cobra by PREPA, which motion was stayed by the Court.

On March 25, 2020, Cobra filed an urgent motion to modify the stay order and allow the recovery of approximately $ 61.7 million in claims related to a tax gross-up provision contained in the emergency master service agreement, as amended, that was entered into with PREPA on October 19, 2017.

This emergency motion was denied on June 3, 2020 and the Court extended the stay of our motion.

On December 9, 2020, the Court again extended the stay of our motion and directed PREPA to file a status report by June 7, 2021.

On April 6, 2021, Cobra filed a motion to lift the stay order.

Following this filing, PREPA initiated discussion with Cobra, which resulted in PREPA and Cobra filing a joint motion to adjourn all deadlines relative to the April 6, 2021 motion until the June 16, 2021 omnibus hearing as a result of PREPA’s understanding that FEMA would be releasing a report in the near future relating to the emergency master service agreement between PREPA and Cobra that was executed on October 19, 2017.

The joint motion was granted by the Court on April 14, 2021.

On May 26, 2021, FEMA issued a Determination Memorandum related to the first contract between Cobra and PREPA in which, among other things, FEMA raised two contract compliance issues and, as a result, concluded that approximately $ 47 million in costs were not authorized costs under the contract.

On June 14, 2021, the Court issued an order adjourning Cobra’s motion to lift the stay order to a hearing on August 4, 2021 and directing Cobra and PREPA to meet and confer in good faith concerning, among other things, (i) the May 26, 2021 Determination Memorandum issued by FEMA and (ii) whether and when a second determination memorandum is expected.

The parties were further directed to file an additional status report, which was filed on July 20, 2021.

On July 23, 2021, with the aid of Mammoth, PREPA filed an appeal of the entire $ 47 million that FEMA de-obligated in the May 26, 2021 Determination Memorandum.

FEMA approved the appeal in part and denied the appeal in part.

FEMA found that staffing costs of $ 24.4 million are eligible for funding.

On August 4, 2021, the Court denied Cobra’s April 6, 2021 motion to lift the stay order, extended the stay of our motion seeking recovery of amounts owed to Cobra and directed the parties to file an additional joint status report, which was filed on January 22, 2022.

On January 26, 2022, the Court extended the stay and directed the parties to file a further status report by July 25, 2022.

On June 7, 2022, Cobra filed a motion to lift the stay order.

On June 29, 2022 the Court denied Cobra’s motion and extended the stay to January 2023.

On November 21, 2022, FEMA issued a Determination Memorandum related to the 100 % federal funded portion of the second contract between Cobra and PREPA in which FEMA concluded that approximately $ 5.6 million in costs were not authorized costs under the contract.

On December 21, 2022, FEMA issued a Determination Memorandum related to the 90 % federal cost share portion of the second contract between Cobra and PREPA in which FEMA concluded that approximately $ 68.1 million in costs were not authorized costs under the contract.

PREPA filed a first-level administrative appeal of the November 21, 2022 Determination Memorandum and has indicated that they will review the December 21, 2022 Determination Memorandums and, to the extent they feel plausible, file a first-level administrative appeal of the unauthorized amounts.

On January 7, 2023, Cobra and PREPA filed a joint status report with the Court, in which PREPA requested that the Court continue the stay through July 31, 2023 and Cobra requested that the stay be lifted.

On January 18, 2023, the Court entered an order extending the stay and directing the parties to file a further status report addressing (i) the status of any administrative appeals in connection with the November and December determination memorandums regarding the second contract, (ii) the status of the criminal case against the former Cobra president and the FEMA official that concluded in December 2022, and (iii) a summary of the outstanding and unpaid amounts arising from the first and second contracts and whether PREPA disputes Cobra’s entitlement to these amounts with the Court by July 31, 2023.

On January 20, 2023, Cobra submitted a certified claim for approximately $ 379 million to FEMA pursuant to the federal Contract Disputes Act.

On February 1, 2023, FEMA notified Cobra that it had reviewed the claim and determined that no contract, expressed or implied, exists between FEMA and Cobra.

Therefore, no final decision will be issued in response to Cobra’s claim.

Cobra has 90 days from the February 1, 2023 decision to file a notice of appeal.

The Company believes all amounts charged to PREPA, including interest charged on delinquent accounts receivable, were in accordance with the terms of the contracts.

Further, there have been multiple reviews prepared by or on behalf of FEMA, including the determination memorandums mentioned above, that have concluded that the amounts Cobra charged PREPA were reasonable, that PREPA adhered to Puerto Rican legal statutes regarding emergency situations, and that PREPA engaged in a reasonable procurement process.

The Company believes these receivables are collectible and for the reasons previously described as well as other factors, no allowance was deemed necessary at December 31, 2022 or 2021.

However, in the event PREPA (i) does not have or does not obtain the funds necessary to satisfy its obligations to Cobra under the contracts, (ii) obtains the necessary funds but refuses to pay the amounts owed to the Company or (iii) otherwise does not pay amounts owed to the Company for services performed, the receivable may not be collectible.

On October 19, 2017, one of our subsidiaries, Cobra, and PREPA entered into an emergency master services agreement for repairs to PREPA’s electrical grid as a result of Hurricane Maria.

The one-year contract, as amended, provided for payments of up to $ 945 million (the “first contract”).

On May 26, 2018, Cobra and PREPA entered into a second one-year, $ 900 million master services agreement to provide additional repair services and begin the initial phase of reconstruction of the electrical power system in Puerto Rico (the “second contract”).

As of December 31, 2023, PREPA owed us approximately $ 204.8 million for services performed excluding $ 197.5 million of interest charged on delinquent balances.

Since September 30, 2019, we have been pursuing litigation in the U.S.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Court for the District of Puerto Rico and other dispute resolution efforts seeking recovery of the amounts owed to Cobra by PREPA for restoration services in Puerto Rico, which proceedings are discussed in more detail in Note 20—“Commitments and Contingencies—Litigation” included elsewhere in this report.

In connection with these efforts, in 2023, an aggregate of $ 99 million was approved by FEMA for reimbursement to Cobra for services performed by Cobra, of which amount approximately $ 22.2 million was paid by PREPA to Cobra in 2023.

On December 1, 2023, Cobra, as seller, and Mammoth, as guarantor, entered into an assignment agreement (the “Assignment Agreement”) with SPCP Group, LLC (“SPCP Group”), pursuant to which Cobra transferred to SPCP Group all of its rights, title and interest in $ 54.4 million of outstanding accounts receivable with PREPA and received net proceeds of $ 46.1 million.

See Note 20—“Commitments and Contingencies—Assignment Agreement” for additional information.

On December 4, 2023, following submission of a joint status report by Cobra and FEMA on December 1, 2023, in which, among other things, PREPA reported that they submitted a request for reimbursement to the Government of Puerto Rico’s Central Recovery and Reconstruction Office (“COR3”) COR3 on November 1, 2023 for $ 82.4 million and is disputing approximately $ 1.5 million of invoices from Cobra, the Court ordered PREPA to provide a detailed summary of each of their objections to the disputed amounts and directed the parties to report the status of any remaining unpaid approved invoices in connection with the status report due on January 16, 2024.

On January 16, 2024, the parties filed a joint status report in which, among other things, PREPA reported that on December 28, 2023, it received a disbursement from COR3 for the amount requested on November 1, 2023 and was in the process of paying approximately $ 13.4 million in approved but unpaid invoices for reimbursements for services performed by Cobra to SPCP Group, as Cobra’s assignee, which amount was paid by PREPA on January 18, 2024.

PREPA, however, also informed the Court that it will withhold the release of any further funds to Cobra approved by FEMA for reimbursement to Cobra due to municipal and construction excise tax claims against Cobra allegedly aggregating to $ 70.4 million.

Cobra believes it is exempt from the construction excise taxes and strongly disagrees with PREPA’s decision to withhold funds.

On January 17, 2024, Cobra filed a Writ of Certiorari requesting the Court of Appeals to reverse the order from the Humacao Superior Court.

On February 15, 2024, Cobra’s request was granted by the Court of Appeals and the order instructing PREPA to withhold the $ 9.0 million payment from Cobra was revoked.

The case was remanded to the lower Court for continuation of the proceedings in accordance with the Court of Appeals’ order.

The municipality has 15 days to request reconsideration.

On January 19, 2024, the Court extended the previously ordered stay in the proceedings through April 5, 2024, and directed the parties to file a joint status report addressing (i) the status of any administrative appeals in connection with the November 2022 and December 2022 determination memoranda regarding the second contract, (ii) the status of any remaining approved, but unpaid invoices, and (iii) whether the parties are actively engaged in mediation to resolve their outstanding issues by March 27, 2024.

Subsequent to December 31, 2023, PREPA paid $ 64.0 million with respect to the outstanding PREPA receivable, of which $ 9.6 million was paid to Cobra and $ 54.4 million was paid to SPCP Group, as Cobra’s assignee under the Assignment Agreement, which fully extinguished Cobra’s and Mammoth’s obligations to SPCP Group under the Assignment Agreement, and the Assignment Agreement was terminated.

The Company believes all amounts charged to PREPA, including interest charged on delinquent accounts receivable, were in accordance with the terms of the contracts.

Further, there have been multiple reviews prepared by or on behalf of FEMA that have concluded that the amounts Cobra charged PREPA were reasonable, that PREPA adhered to Puerto Rican legal statutes regarding emergency situations, and that PREPA engaged in a reasonable procurement process.

The Company believes these receivables are collectible and no allowance was deemed necessary at December 31, 2023 or 2022.

However, in the event PREPA (i) does not have or does not obtain the funds necessary to satisfy its obligations to Cobra under the contracts, (ii) obtains the necessary funds but refuses to pay the remaining amounts owed to the Company or (iii) otherwise does not pay amounts owed to the Company, the receivable may not be collectible.

Inventory consists of raw sand and processed sand available for sale, raw materials, chemicals and other products sold as a bi-product of completion and production operations and supplies used in performing services.

6 unchanged sentences

See Note 5 for additional disclosure related to inventory.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Prepaid Expenses

23 unchanged sentences

The fair value is determined using a combination of the income and market approaches.

See Notes 6 and 7 for additional disclosures related to goodwill.

See Note 7 and Note 8 for additional disclosures related to goodwill.

Other Non-Current Assets

Other non-current assets primarily consist of deferred financing costs on our credit facility (see Note 10), sales tax receivables and our equity method investment (see Note 8).

Investments are accounted for under the equity method in circumstances where the Company has the ability to exercise significant influence over the operating and investing

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

policies of the investee, but does not have control.

Other non-current assets primarily consist of deferred financing costs on our revolving credit facility (see Note 11) and our equity method investment (see Note 9).

Investments are accounted for under the equity method in circumstances where the Company has the ability to exercise significant influence over the operating and investing policies of the investee, but does not have control.

Under the equity method, the Company recognizes its share of the investee’s earnings in its consolidated statements of comprehensive loss.

4 unchanged sentences

Changes in estimates are reflected in earnings in the period an estimate is revised.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Following is a roll forward of the Company’s asset retirement obligations for the years ended December 31, 2023 and 2022 (in thousands):

2 unchanged sentences

Accretion expense 141 136

Liabilities settled — ( 782 )

Foreign currency translation adjustment 18 ( 51 )

1 unchanged sentence

Amortizable Intangible Assets

Intangible assets subject to amortization include customer relationships and trade names.

Customer relationships are amortized based on an estimated attrition factor and trade names are amortized over their estimated useful lives.

Intangible assets subject to amortization include trade names, which are amortized over their estimated useful lives.

See Notes 7 and 8 for additional disclosures related to intangible assets.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, short-term investments, trade receivables, trade payables, amounts receivable or payable to related parties, and debt.

The carrying amount of cash and cash equivalents, trade receivables, trade payables and receivables and payables from related parties approximates fair value because of the short-term nature of the instruments.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.

The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

The Company uses appropriate valuation techniques based on available inputs to measure the fair values of its assets and liabilities.

Level 1 - Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date.

Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data.

These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3 - Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value.

The Company elected the fair value option for measuring the liability of the Assignment Agreement.

To estimate the fair value of the liability, the Company used inputs that are not observable in the market (Level 3) based on an income approach.

The Company used the contractual settlement amount, imputed interest rate and expected timing of cash flows to estimate the liability as of December 31, 2023 using the discounted cash flow model.

See Notes 10 and 20.

The carrying amount of cash and cash equivalents, restricted cash, trade receivables, trade payables and receivables and payables from related parties approximates fair value because of the short-term nature of the instruments.

The fair value of debt approximates it s carrying value because the cost of borrowing fluctuates based upon market conditions.

1 unchanged sentence

The timing of revenue recognition may differ from contract billing or payment schedules, resulting in revenues that have been earned but not billed (“unbilled revenue”) or amounts that have been billed, but not earned (“deferred revenue”).

The Company had $ 21.1 million and $ 22.0 million, respectively, of unbilled revenue included in accounts receivable, net in the consolidated balance sheets at December 31, 2022 and 2021.

The Company had $ 7.5 million and $ 3.2 million, respectively, of deferred revenue included in accrued expenses and other current liabilities in the consolidated balance sheets at December 31, 2022 and 2021.

The Company had $ 12.7 million and $ 21.1 million, respectively, of unbilled revenue included in “accounts receivable, net” in the accompanying consolidated balance sheets at December 31, 2023 and 2022.

The Company had $ 0.7 million and $ 7.5 million, respectively, of deferred revenue included in “accrued expenses and other current liabilities” in the accompanying consolidated balance sheets at December 31, 2023 and 2022.

Loss per Share

Loss per share is computed by dividing net loss by the weighted average number of outstanding shares.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Equity-based Compensation

7 unchanged sentences

Amounts are recognized in cost of revenue and selling, general and administrative expenses.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s operations are included in a consolidated federal income tax return and other state returns.

25 unchanged sentences

Environmental expenditures that relate to current operations are expensed or capitalized as appropriate.

Expenditures that relate to an existing condition caused by past operations and do not contribute to current or future revenue generation are expensed as incurred.

Expenditures that relate to an existing

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

condition caused by past operations and do not contribute to current or future revenue generation are expensed as incurred.

Liabilities are recorded when environmental costs are probable and the costs can be reasonably estimated.

The Company maintains insurance which may cover in whole or in part certain environmental expenditures.

As of December 31, 2022 and 2021, there were no probable environmental matters.

The Company had $ 0.6 million of probable environmental liabilities included in “accounts payable” in the accompanying consolidated balance sheet at December 31, 2023.

As of December 31, 2022, there were no probable environmental matters.

Other Comprehensive Loss

2 unchanged sentences

Specifically, cumulative foreign currency translation adjustments are included in accumulated other comprehensive loss.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Concentrations of Credit Risk and Significant Customers

8 unchanged sentences

— % — % — % 90 % 83 %

Customer C (c)

— % 7 % 16 % — % — %

Customer D (d)

— % 3 % 15 % — % — %

Customer A is a third-party customer.

3 unchanged sentences

Accounts receivable for Customer B also includes receivables due for interest charged on delinquent accounts receivable.

Customer C was a related-party customer until June 29, 2021.

Revenues earned from this customer prior to June 29, 2021 are included in services revenue - related parties and product revenue - related parties on the consolidated statements of comprehensive loss.

The related accounts receivable are included in accounts receivable, net on the consolidated balance sheet at December 31, 2021.

Revenues and the related accounts receivable balances earned from Customer C were derived from the Company’s well completion services segment, natural sand proppant services segment and other businesses.

Accounts receivable for Customer C also included receivables due for interest charged on delinquent accounts receivable.

Customer D is a third-party customer.

Revenues and the related accounts receivable balances earned from Customer D were derived from the Company’s infrastructure services segment.

The Company’s primary revenue streams include well completion services, infrastructure services, natural sand proppant services, drilling services and other services, which includes coil tubing, pressure control, equipment rentals, full service transportation, crude oil hauling, remote accommodations and equipment manufacturing.

New Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, “Segment reporting (Topic 280)”, which is intended to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses.

The amendment requires disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”) as well as other segment items, extends certain annual disclosures to interim periods, clarifies the applicability to single reportable segment entities, permits more than one measure of profit or loss to be reported under certain conditions and requires disclosure of the title and position of the CODM.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 31, 2024.

We expect to adopt the new disclosures for the year ended December 31, 2024.

The Company is currently evaluating the impact that adoption of ASU 2023-07 will have on its disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied on a prospective basis, with a retrospective option.

The Company is currently evaluating the impact that adoption of ASU 2023-09 will have on its disclosures.

The Company’s primary revenue streams include well completion services, infrastructure services, natural sand proppant services, drilling services and other services, which includes aviation, equipment rentals, remote accommodations and equipment manufacturing.

See Note 21 for the Company’s revenue disaggregated by type.

4 unchanged sentences

As of the modification date, the Company updates its estimate of the transaction price using the expected value method, subject to constraints, and recognizes the amount over the remaining performance period.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Well Completion Services

8 unchanged sentences

Under this agreement, performance obligations were satisfied as services were rendered based on the passage of time rather than the completion of each segment of work.

Stingray Pressure Pumping had the right to receive consideration from this customer even if circumstances prevent us from performing work.

All consideration owed to Stingray Pressure Pumping for services performed during the contractual period is fixed and the right to receive it is unconditional.

Stingray Pressure Pumping had the right to receive consideration from this customer even if circumstances prevent them from performing work.

All consideration owed to Stingray Pressure Pumping for services performed during the contractual period was fixed and the right to receive it was unconditional.

On December 28, 2019, Gulfport filed a legal action in Delaware state court seeking the termination of this contract and monetary damages.

1 unchanged sentence

On March 22, 2021, Gulfport listed the Stingray Pressure Pumping contract on its master rejection schedule filed with the bankruptcy court.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

determined that these factors changed the scope of the contract, accelerated the duration of, and otherwise changed the rights and obligations of each party to the contract.

The Company determined that these factors changed the scope of the contract, accelerated the duration of, and otherwise changed the rights and obligations of each party to the contract.

As a result, the Company accounted for this as a contract modification during the three months ended March 31, 2021.

21 unchanged sentences

The Company recognizes revenue at the point in time when the customer obtains legal title to the product, which may occur at the production facility, rail origin or at the destination terminal.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Certain of the Company’s sand supply agreements contain a minimum volume commitment related to sand purchases whereby the Company charges a shortfall payment if the customer fails to meet the required minimum volume commitment.

1 unchanged sentence

If a make-up right exists, the Company has future performance obligations to deliver excess volumes of product in subsequent periods.

In accordance with ASC 606, if the customer fails to meet the minimum volume commitment, the Company will assess whether it expects the customer to fulfill its unmet commitment during the contractually specified make-up period based on discussions with the customer and management’s knowledge of the business.

In accordance with FASB ASC 606, Revenue from Contracts with Customers , if the customer fails to meet the minimum volume commitment, the Company will assess whether it expects the customer to fulfill its unmet commitment during the contractually specified make-up period based on discussions with the customer and management’s knowledge of the business.

If the Company expects the customer will make-up deficient volumes in future periods, revenue related to shortfall payments will be deferred and recognized on the earlier of the date on which the customer utilizes make-up volumes or the likelihood that the customer will exercise its right to make-up deficient volumes becomes remote.

As of December 31, 2021, the Company had deferred revenue totaling $ 3.0 million, respectively, related to shortfall payments.

These amounts are included in accrued expenses and other current liabilities on the consolidated balance sheet.

The Company did not have any deferred revenue related to shortfall payments at December 31, 2022.

The Company did not have any deferred revenue related to shortfall payments at December 31, 2023 or 2022, respectively.

If the Company does not expect the customer will make-up deficient volumes in future periods, the breakage model will be applied and revenue related to shortfall payments will be recognized when the model indicates the customer’s inability to take delivery of excess volumes.

1 unchanged sentence

In certain of the Company’s sand supply agreements, the customer obtains control of the product when it is loaded into rail cars and the customer reimburses the Company for all freight charges incurred.

The Company has elected to account

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

for shipping and handling as activities to fulfill the promise to transfer the sand.

The Company has elected to account for shipping and handling as activities to fulfill the promise to transfer the sand.

If revenue is recognized for the related product before the shipping and handling activities occur, the Company accrues the related costs of those shipping and handling activities.

Pursuant to its contract with Gulfport, Muskie has agreed to sell and deliver specified amounts of sand to Gulfport.

Pursuant to its contract with Gulfport, Muskie agreed to sell and deliver specified amounts of sand to Gulfport.

In September 2020, Muskie filed a lawsuit against Gulfport to recover delinquent payments due under this agreement.

7 unchanged sentences

Gulfport was a related party until June 29, 2021.

The revenue recognized related to this agreement is included in “product revenue - related parties” in the accompanying consolidated statement of comprehensive loss and the related accounts receivable is included in “accounts receivable, net” in the consolidated balance sheets as of December 31, 2021.

The revenue recognized related to this agreement is included in “product revenue - related parties” in the accompanying consolidated statement of comprehensive loss.

See Notes 13 and 20 below.

6 unchanged sentences

Other Services

During the periods presented, the Company also provided aviation, coil tubing, pressure control, equipment rentals, crude oil hauling, full service transportation, remote accommodations and equipment manufacturing, which are reported under other services.

During the periods presented, the Company also provided aviation, equipment rentals, crude oil hauling, remote accommodations and equipment manufacturing, which are reported under other services.

As a result of market conditions, the Company temporarily shut down its coil tubing, pressure control and full service transportation operations beginning in July 2020 and its crude oil hauling operations beginning in July 2021.

4 unchanged sentences

Practical Expedients

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts in which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied distinct good or service that forms part of a single performance obligation.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances

6 unchanged sentences

Deduction for recognition of revenue ( 3,207 )

Increase for deferral of shortfall payments 7,023

Deduction for rebate credit recognized ( 140 )

Increase for deferral of customer prepayments 7,647

4 unchanged sentences

Balance, December 31, 2023 $ 663

The Company did not have any contract assets as of December 31, 2022, December 31, 2021 or December 31, 2020.

The Company did not have any contract assets as of December 31, 2023 or December 31, 2022.

Performance Obligations

Revenue recognized in the current period from performance obligations satisfied in previous periods was a nominal amount for the years ended December 31, 2023, 2022 and 2021.

As of December 31, 2022, the Company had unsatisfied performance obligations totaling $ 12.8 million, which will be recognized over the next 21 months.

As of December 31, 2023, the Company had unsatisfied performance obligations totaling $ 11.4 million, which are expected to be recognized over the next 13 months.

On July 13, 2023, the Company sold all of the equity interest in its subsidiary ARS for $ 3.3 million in cash plus $ 0.3 million to be paid one year after closing if certain conditions are met.

The Company recognized a gain of $ 2.1 million on the sale, which is included in “other income, net” in the accompanying consolidated statements of comprehensive loss.

Inventories consist of raw sand and processed sand available for sale, chemicals and other products sold as a bi-product of completion and production operations and supplies used in performing services.

37 unchanged sentences

Total property, plant and equipment, net $ 113,905 $ 138,066

Included in Buildings at each of December 31, 2022 and 2021 are costs of $ 7.6 million related to assets under operating leases.

Included in Other property and equipment at each of December 31, 2022 and 2021 are costs of $ 6.0 million related to assets under operating leases.

Included in Buildings at December 31, 2022 are costs of $ 7.6 million related to assets under operating leases.

Included in Other property and equipment are costs of $ 3.1 million and $ 6.0 million at December 31, 2023 and 2022, respectively, related to assets under operating leases.

Deposits on equipment and equipment in process of assembly represents deposits placed with vendors for equipment that is in the process of assembly and purchased equipment that is being outfitted for its intended use.

3 unchanged sentences

For the years ended December 31, 2023, 2022 and 2021, proceeds from the sale of equipment damaged or lost down-hole were $ 0.4 million, $ 0.8 million and $ 0.3 million, respectively, and gains on sales of equipment damaged or lost down-hole were $ 0.3 million, $ 0.6 million and $ 0.3 million, respectively.

Proceeds from assets sold or disposed of as well as the carrying value of the related equipment are reflected in other income, net on the consolidated statement of comprehensive loss.

Proceeds from assets sold or disposed of as well as the carrying value of the related equipment are reflected in “gains on disposal of assets, net” in the accompanying consolidated statements of comprehensive loss.

For the years ended December 31, 2023, 2022 and 2021, proceeds from the sale of equipment were $ 8.2 million, $ 10.0 million and $ 11.2 million, respectively, and gains from the sale or disposal of equipment were $ 6.0 million, $ 3.9 million and $ 5.1 million, respectively.

13 unchanged sentences

If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded based on that difference.

As a result of the ARS sale, we performed an impairment assessment of our goodwill during the third quarter of 2023.

Based on the qualitative assessment described above, the Company concluded that it was more likely than not that the carrying value of the Aviation reporting unit was greater than its fair value.

To determine fair value of the Aviation reporting unit at September 30, 2023, the Company used the income approach.

The income approach estimates the fair value based on anticipated cash flows that are discounted using a weighted average cost of capital.

As a result, the Company impaired goodwill associated with Cobra Aviation, resulting in a $ 1.8 million impairment charge during the third quarter of 2023.

The Company performed an assessment of goodwill during the fourth quarter of 2023 and determined that the fair value of its goodwill was greater than its carrying value.

Therefore, no additional impairment was deemed necessary at December 31, 2023.

The Company performed the qualitative assessment described above during the fourth quarter of 2022.

6 unchanged sentences

To determine fair value of the infrastructure reporting unit at December 31, 2021, the Company used the income approach.

The income approach estimates the fair value based on anticipated cash flows that are discounted using a weighted average cost of capital.

As a result, the Company impaired goodwill associated with 5 Star and Higher Power, resulting in a $ 0.9 million impairment charge for 2021.

Oil prices declined significantly in March 2020 as a result of geopolitical events that increased the supply of oil in the market as well as effects of the COVID-19 pandemic.

As a result, the Company determined that it was more likely than not that the fair value of certain of its reporting units were less than their carrying value.

Therefore, the Company performed an interim goodwill impairment test.

The Company impaired goodwill associated with Stingray Pressure Pumping, Silverback and WTL, resulting in a $ 55.0 million impairment charge during the first quarter of 2020.

The Company performed an assessment of goodwill during the fourth quarter of 2020 and determined that the fair value of its goodwill was greater than its carrying value.

Therefore, no additional impairment was necessary at December 31, 2020.

To determine fair value, the Company used a combination of the income and market approaches.

The income approach estimates the fair value based on anticipated cash flows that are discounted using a weighted average cost of capital.

The market approach estimates the fair value using comparative multiples, which involves significant judgment in the selection of the appropriate peer group companies and valuation multiples.

Impairment of Other Long-Lived Assets

Due to market conditions, the Company has temporarily shut down its crude oil hauling operations beginning in July 2021.

As a result, the Company recognized impairment of trade names totaling $ 0.5 million, which is included in impairment of other long-lived assets on the consolidated statements of comprehensive loss.

Due to market conditions, the Company temporarily shut down its crude oil hauling operations beginning in July 2021.

As a result, the Company recognized impairment of trade names totaling $ 0.5 million, which is included in “impairment of other long-lived assets” in the accompanying consolidated statements of comprehensive loss.

The Company performed a review of its intangible asset balances as of December 31, 2021 and determined the fair value of Higher Power’s trade names and customer relationships was less than their carrying value, resulting in an additional impairment expense of $ 0.7 million at year-end.

Oil prices declined significantly in March 2020 as a result of geopolitical events that increased the supply of oil in the market as well as effects of the COVID-19 pandemic.

As a result, the Company determined that it was more likely than not that the fair value of certain of its oilfield services assets were less than their carrying value.

Therefore, the Company performed an interim impairment test.

As a result of the test, the Company recorded impairments totaling $ 12.9 million to its fixed assets during the first quarter of 2020.

The Company measured the fair values of these assets using direct and indirect observable inputs (Level 2) based on a market approach.

The assumptions used in the impairment evaluation for long-lived assets are inherently uncertain and require management’s judgment.

A continued period of low oil and natural gas prices or continued reductions in capital expenditures by our customers would likely have an adverse impact on our utilization and the prices that we receive for our services.

This could result in the recognition of future material impairment charges on the same, or additional, property and

This could result in the recognition of future material impairment charges on the same, or additional, property and equipment if future cash flow estimates, based upon information then available to management, indicate that their carrying values are not recoverable.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

equipment if future cash flow estimates, based upon information then available to management, indicate that their carrying values are not recoverable.

Goodwill and Intangible Assets

Changes in the net carrying amount of goodwill by reporting segment (see Note 21) for the years ended December 31, 2023 and 2022 are presented below (in thousands):

Infrastructure Well Completion Sand Other Total

Well Completion Other Total

Balance as of January 1, 2022

3 unchanged sentences

Acquisitions — — —

Impairment losses (a)

( 891 ) — — — ( 891 )

Impairment losses — — —

Balance as of December 31, 2022

3 unchanged sentences

Acquisitions — — —

Impairment losses — — — — —

Impairment losses (a)

— ( 1,810 ) ( 1,810 )

Dispositions — ( 693 ) ( 693 )

Balance as of December 31, 2023

11 unchanged sentences

See Note 7 for a description of these impairment losses.

The original lives of trade names range from 10 to 20 years and as of December 31, 2022 the remaining average useful life was 3.22 years.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The original life of trade names is 10 years as of December 31, 2023 with a remaining average useful life of 1.75 years.

Aggregated expected amortization expense for the future periods is expected to be as follows (in thousands):

Year ended December 31:

Thereafter 66

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Equity Method Investment

On December 21, 2018, Cobra Aviation and Wexford Partners Investment Co.

LLC (“Wexford Investment”), a related party, formed a joint venture under the name of Brim Acquisitions LLC (“Brim Acquisitions”) to acquire all outstanding equity interest in Brim Equipment for a total purchase price of approximately $ 2.0 million.

(“Brim Equipment”) for a total purchase price of approximately $ 2.0 million.

Cobra Aviation owns a 49 % economic interest and Wexford Investment owns a 51 % economic interest in Brim Acquisitions, and each member contributed its pro rata portion of Brim Acquisitions initial capital of $ 2.0 million.

Brim Acquisitions, through Brim Equipment, owns four commercial helicopters and leases five commercial helicopters for operations, which it uses to provide a variety of services, including short haul, aerial ignition, hoist operations, aerial photography, fire suppression, construction services, animal/capture/survey, search and rescue, airborne law enforcement, power line construction, precision long line operations, pipeline construction and survey, mineral and seismic exploration, and aerial seeding and fertilization.

Brim Acquisitions, through Brim Equipment, owns three commercial helicopters and leases two commercial helicopters for operations, which it uses to provide a variety of services, including short haul, aerial ignition, hoist operations, aerial photography, fire suppression, construction services, animal/capture/survey, search and rescue, airborne law enforcement, power line construction, precision long line operations, pipeline construction and survey, mineral and seismic exploration, and aerial seeding and fertilization.

The Company uses the equity method of accounting to account for its investment in Brim Acquisitions, which had a carrying value of approximately $ 4.2 million and $ 3.5 million, respectively, at December 31, 2023 and 2022.

The investment is included in “other non-current assets” on the consolidated balance sheets.

The Company recorded equity method adjustments to its investment for its share of Brim Acquisitions’ income (loss) of $ 0.1 million, ($ 0.3 ) million, and $ 0.6 million respectively, for the years ended December 31, 2022, 2021 and 2020, respectively, which is included in “other income, net” on the consolidated statements of comprehensive loss.

The Company made additional investments totaling $ 0.5 million during the year ended December 31, 2020.

The investment is included in “other non-current assets” in the accompanying consolidated balance sheets.

The Company recorded equity method adjustments to its investment for its share of Brim Acquisitions’ income (loss) of $ 0.7 million, $ 0.1 million, and ($ 0.3 ) million respectively, for the years ended December 31, 2023, 2022 and 2021, respectively, which is included in “other income, net” in the accompanying consolidated statements of comprehensive loss.

No additional investments were made during the years ended December 31, 2023, 2022 and 2021.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accrued Expenses and Other Current Liabilities and Other Long-Term Liabilities

1 unchanged sentence

Accrued Expenses and Other Current Liabilities

Financing arrangement, net (a)

State and local taxes payable 13,111 13,336

Financed insurance premiums (a)

Deferred revenue 7,550 3,250

Financed insurance premiums (b)

Accrued compensation and benefits 5,558 6,743

Sale-leaseback liability (b)

Sale-leaseback liability (c)

Financing leases 1,702 4,003

Equipment financing note (c)

Insurance reserves 1,277 1,509

Payroll tax liability 95 2,810

Accrued legal settlement (d)

Deferred revenue 663 7,550

Equipment financing note (d)

Other 2,139 2,190

1 unchanged sentence

Other Long-Term Liabilities

Sale-leaseback liability (b)

Sale-leaseback liability (c)

$ 2,555 $ 6,836

Equipment financing note (c)

Financing leases 2,138 2,602

Equipment financing note (d)

Total other long-term liabilities $ 4,715 $ 15,485

On December 1, 2023, Cobra, as seller, and Mammoth, as guarantor, entered into the Assignment Agreement with SPCP Group.

Under the terms and conditions of the Assignment Agreement, Cobra transferred to SPCP Group all of its rights, title and interest in $ 54.4 million of outstanding accounts receivable with PREPA.

The Company elected the fair value option for measuring the liability.

As of December 31, 2023, the fair value of the liability was approximately $ 48.9 million.

See Note 20 for additional information regarding this transaction.

Financed insurance premiums are due in monthly installments, are unsecured and mature within the twelve-month period following the close of the year.

As of December 31, 2022, the applicable interest rates associated with financed insurance premiums ranged from 1.95 % to 5.13 %.

As of December 31, 2023, the applicable interest rates associated with financed

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

insurance premiums ranged from 6.60 % to 7.05 %.

As of December 31, 2022, the applicable interest rates associated with financed insurance premiums ranged from 1.95 % to 5.13 %.

7 unchanged sentences

In December 2022, the Company entered into a 42 -month financing arrangement with FNC for the purchase of seven new pressure pumping units for an aggregate value of $ 9.7 million.

Under this arrangement, the Company has agreed to make monthly principal and interest payments totaling $ 0.3 million over the term of the agreement.

Under this arrangement, the Company agreed to make monthly principal and interest payments totaling $ 0.3 million over the term of the agreement.

This note is secured by the seven pressure pumping units and bears interest at an imputed rate of approximately 15.0 %.

On August 2, 2021, the Company reached an agreement to settle a certain legal matter, which was paid during 2022.

See Note 19 for additional detail.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

This note was paid off on December 22, 2023.

Debt included the following (in thousands):

Revolving credit facility — 83,520

Aviation note — 3,371

Unamortized debt issuance costs — ( 33 )

Term credit facility 45,000 —

Unamortized debt issuance costs and discount ( 2,191 ) —

Total debt 42,809 83,520

1 unchanged sentence

Total long-term debt $ 42,809 $ —

Mammoth Credit Facility

As of December 31, 2023 and 2022, there were deferred financing costs on our revolving credit facility totaling $ 3.4 million and $ 0.4 million, respectively, included in “other non-current assets” in the accompanying consolidated balance sheets.

The table below presents debt maturities as of December 31, 2023, excluding debt issuance costs and discount (in thousands):

Total long-term debt, net $ 45,000

PNC Revolving Credit Facility

On October 19, 2018, Mammoth Inc.

and certain of its direct and indirect subsidiaries, as borrowers, entered into an amended and restated revolving credit and security agreement with the lenders party thereto and PNC Bank, National Association, as a lender and as administrative agent for the lenders, as amended and restated (the “revolving credit facility”).

The revolving credit facility matures on October 19, 2023.

Borrowings under the revolving credit facility are secured by the assets of Mammoth Inc., inclusive of the subsidiary companies, and are subject to a borrowing base calculation prepared monthly.

The revolving credit facility also contains various customary affirmative and restrictive covenants.

Among the covenants is a financial covenant, including a minimum fixed charges coverage ratio of at least 1.1 to 1.0.

At December 31, 2022, there were outstanding borrowings under the revolving credit facility of $ 83.5 million and $ 19.7 million of available borrowing capacity, after giving effect to $ 6.5 million of outstanding letters of credit and the requirement to maintain a $ 10 million reserve out of the available borrowing capacity.

At December 31, 2021, there were outstanding borrowings under the revolving credit facility of $ 83.4 million and $ 16.5 million of borrowing capacity under the facility, after giving effect to $ 9.0 million of outstanding letters of credit.

As of December 31, 2022, the Company was in compliance with its financial covenants under the revolving credit facility.

As a result of the lack of payment from PREPA, the Company projected that it would likely breach the leverage ratio covenant contained in its revolving credit facility for the fiscal quarter ended September 30, 2021.

On November 3, 2021, the Company entered into a third amendment to its revolving credit facility (the “Third Amendment”) to, among other things, (i) suspend the leverage ratio and fixed charges coverage ratio covenants for the quarters ending September 30, 2021 and December 31, 2021, (ii) permanently reduce the maximum revolving advance amount from $ 130 million to $ 120 million, (iii) add a minimum adjusted EBITDA financial covenant of $ 6.0 million for the quarter ending December 31, 2021, (iv) set the applicable margin on all loans at 3.50 % during the limited covenant waiver period, (v) add a requirement to maintain revolver availability of not less than $ 10.0 million at all times during the limited covenant waiver period, (vi) permanently reduce the maximum revolving advance amount in an amount equal to fifty percent ( 50 %) of any mandatory prepayments made with non-recurring proceeds that are received during the limited covenant waiver period, and (vii) eliminate the declaration of unrestricted subsidiaries during the limited covenant waiver period.

The limited covenant waiver period commenced on the effective date of the Third Amendment and ended on February 28, 2022, as discussed below.

On February 28, 2022, the Company entered into a fourth amendment to the revolving credit facility (the “Fourth Amendment”) to, among other things, (i) amend the financial covenants as outlined below, (ii) provide for a conditional increase of the applicable interest margin, (iii) permit certain sale-leaseback transactions, (iv) provide for a reduction in the maximum revolving advance amount in an amount equal to 50 % of the PREPA claims proceeds, subject to a floor equal to the sum of eligible billed and unbilled accounts receivables, and (v) classifies the payments pursuant to the Company ’ s settlement agreement with MasTec Renewables Puerto Rico, LLC (“MasTec”) as restricted payments and requires $ 20.0 million of availability both before and after making such payments.

The financial covenants under our revolving credit facility were amended as follows:

• the leverage ratio was eliminated;

and certain of its direct and indirect subsidiaries, as borrowers, entered into an

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• the fixed charge coverage ratio was reduced to .85 to 1.0 for the six months ended June 30, 2022 and increases to 1.1 to 1.0 for the periods thereafter;

• a minimum adjusted EBITDA covenant of $ 4.7 million, excluding interest on accounts receivable from PREPA, for the five months ending May 31, 2022 was added;

• the minimum excess availability covenant was reduced to $ 7.5 million through March 31, 2022, after which the minimum excess availability covenant increased to $ 10.0 million.

The Fourth Amendment also permanently waived compliance by the borrowers with the leverage ratio and fixed charge coverage ratio covenants in the revolving credit facility for the fiscal quarters ended September 30, 2021 and December 31, 2021, respectively, ending the limited covenant waiver period under the Third Amendment.

As of February 22, 2023, the Company had $ 79.7 million in borrowings outstanding under its revolving credit facility, leaving an aggregate of $ 22.3 million of available borrowing capacity under this facility, after giving effect to $ 6.4 million of outstanding letters of credit and the requirement to maintain a $ 10.0 million reserve out of the available borrowing capacity.

If an event of default occurs under the revolving credit facility and remains uncured, it could have a material adverse effect on the Company ’ s business, financial condition, results of operations and cash flows.

The lenders (i) would not be required to lend any additional amounts to the Company, (ii) could elect to increase the interest rate by 200 basis points, (iii) could elect to declare all outstanding borrowings, together with accrued and unpaid interest and fees, to be due and payable, (iv) may have the ability to require the Company to apply all of its available cash to repay outstanding borrowings, and (v) may foreclose on substantially all of the Company’s assets.

The Company’s revolving credit facility is currently scheduled to mature on October 19, 2023.

The Company continues to explore various strategic alternatives to extend, refinance or repay its revolving credit facility at or before the scheduled maturity date.

There is no guarantee that such extension, refinancing or repayment will be secured.

Additionally, any such extended or new credit facility could have terms that are less favorable to the Company than the terms of its existing revolving credit facility, which may significantly increase the Company’s cost of capital and may have a material adverse effect on the Company’s liquidity and financial condition.

amended and restated revolving credit and security agreement with the lenders party thereto and PNC Bank, National

Association, as a lender and as administrative agent for the lenders, as subsequently further amended (the “previous revolving credit facility”).

At December 31, 2022, there were outstanding borrowings under the revolving credit facility of $ 83.5 million, the borrowing base was $ 119.8 million, and there was $ 19.7 million of borrowing capacity under the facility, after giving effect to $ 6.5 million of outstanding letters of credit and the requirement to maintain a $ 10.0 million reserve out of the available borrowing capacity.

New Revolving Credit Facility and New Term Credit Facility

On October 16, 2023, the Company entered into the new revolving credit facility and the new term credit facility (each as defined below), which refinanced in full the Company’s indebtedness outstanding under the previous revolving credit facility.

The Company, as borrower, and certain of its direct and indirect subsidiaries, as guarantors, entered into a revolving credit agreement with the lenders party thereto and Fifth Third Bank, National Association, as a lender and as administrative agent for the lenders (“Fifth Third”), as may be subsequently amended (the “new revolving credit facility”).

The new revolving credit facility provides for revolving commitments in an aggregate amount of up to $ 75 million.

Borrowings under the new revolving credit facility are secured by the Company’s assets, inclusive of the subsidiary companies, and are subject to a borrowing base calculation prepared monthly which includes a requirement to maintain certain reserves as specified in the new revolving credit facility.

The new revolving credit facility also contains various affirmative and restrictive covenants.

Interest under the new revolving credit facility equals the Tranche Rate (as defined in the new revolving credit facility) plus (i) 1.75 %, if the Average Excess Availability Percentage (as defined in the new revolving credit facility) is greater than 66 2/3%, (ii) 2.00 % if the Average Excess Availability Percentage is greater than 33 1/3% and less than or equal to 66 2/3%, and (iii) 2.25 % if the Average Excess Availability Percentage is less than or equal to 33 1/3%.

As of December 31, 2023, the financial covenant under the new revolving credit facility was the fixed coverage ratio of 1.0 to 1.0 which applies only during a Financial Covenant Period (as defined in the new revolving credit facility).

At December 31, 2023, the new revolving credit facility was undrawn, the borrowing base was $ 27.0 million, and there was $ 20.7 million of borrowing capacity under the facility, after giving effect to $ 6.3 million of outstanding letters of credit.

On October 16, 2023, the Company, as borrower, and certain of its direct and indirect subsidiaries, as guarantors, also entered into a loan and security agreement with the lenders party thereto and Wexford Capital LP, an affiliate of the Company, as administrative agent for the lenders (“Wexford”), as may be subsequently amended (the “new term credit facility”).

The new term credit facility was approved by the audit committee of the Company’s board of directors, consisting entirely of independent directors, as a transaction with a related party.

The new term credit facility provides for term commitments in an aggregate amount equal to $ 45 million.

Borrowings under the new term credit facility are secured by the Company’s assets, inclusive of the subsidiary companies.

The new term credit facility also contains various affirmative and restrictive covenants.

Interest under the new term credit facility equals the SOFR Interest Rate (as defined in the new term credit facility) plus 7.50 %, as such margin may be increased pursuant to the terms of the new term credit facility;

provided that the Company may elect to pay all or a portion of the accrued interest due with respect to any Interest Period (as defined in the new term credit facility) ending on or before April 16, 2025, in kind by adding such accrued interest to the principal amount of the outstanding loans thereunder.

As of December 31, 2023, borrowings outstanding under the new term credit facility bore interest at 12.9 %.

In particular, under the new term credit facility, the Company is required, among other things, to mandatorily remit to Wexford up to 50 % of all amounts that constitute PREPA Claim Proceeds, as such term is defined in the new term credit facility, which will be used to reduce outstanding borrowings under the new term credit facility, as required under the terms thereof.

At December 31, 2023, there were outstanding borrowings under the term credit facility of $ 45.0 million.

If an event of default occurs under the new revolving credit facility or the new term credit facility, as applicable, and remains uncured, it could have a material adverse effect on the Company’s business, financial condition, liquidity and results of operations.

The lenders, as applicable, (i) would not be required to lend any additional amounts to the Company, (ii) could elect to increase the interest rate by (x) 200 basis points in connection with an event of default under the new

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

revolving credit facility or (y) 300 basis points with respect to an event of default under the new term credit facility, (iii) could elect to declare all outstanding borrowings, together with accrued and unpaid interest and fees, to be due and payable, (iv) may have the ability to require the Company to apply all of its available cash to repay outstanding borrowings, and (v) may foreclose on substantially all of the Company’s assets.

The new revolving credit facility is currently scheduled to mature on the earliest of (x) July 17, 2028, unless the indebtedness under the new term credit facility is refinanced in accordance with terms of the intercreditor agreement, (y) October 16, 2028.

The new term credit facility is currently scheduled to mature on October 16, 2028.

Aviation Note

8 unchanged sentences

Prior to the transfer of the membership interest to the Voting Trustee, Cobra Aviation was a wholly owned subsidiary of Dire Wolf and Leopard was a wholly owned subsidiary of Predator Aviation.

Cobra Aviation owns two helicopters and support equipment, 100 % of the equity interest in ARS and 49 % of the equity interest in Brim Acquisitions.

Cobra Aviation owns one helicopter and support equipment and 49 % of the equity interest in Brim Acquisitions.

Leopard owns one helicopter.

4 unchanged sentences

Therefore, the Company, through Dire Wolf and Predator Aviation, is considered the primary beneficiary of the VIEs and consolidates Cobra Aviation and Leopard at December 31, 2023.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Selling, General and Administrative Expense

8 unchanged sentences

Non-cash expenses:

Bad debt provision (b)

Change in provision for expected credit losses (b)

( 591 ) 3,389 41,662

3 unchanged sentences

Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs.

The bad debt provision for the year ended December 31, 2021 includes $ 41.2 million related to the Stingray Pressure Pumping and Muskie contracts with Gulfport.

The bad debt provision for the year ended December 31, 2020, included $ 19.4 million related to the voluntary petitions for relief filed on November 13, 2020, by Gulfport and certain of its subsidiaries.

See Notes 2 and 19.

The change in provision for expected credit losses for the year ended December 31, 2021 includes $ 41.2 million related to the Stingray Pressure Pumping and Muskie contracts with Gulfport.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The components of income tax provision (benefit) attributable to the Company for the year ended December 31, 2023, 2022 and 2021, respectively, are as follows (in thousands):

1 unchanged sentence

2023 2022 2021

current income tax expense (benefit) $ 61 $ 290 $ ( 6,931 )

current income tax expense $ 715 $ 61 $ 290

deferred income tax benefit — ( 207 ) ( 23,740 )

Foreign current income tax expense 13,269 5,846 8,852

Foreign deferred income tax expense (benefit) 7,907 ( 8,265 ) 144

Foreign deferred income tax (benefit) expense ( 1,687 ) 7,907 ( 8,265 )

Total $ 12,297 $ 13,607 $ ( 22,863 )

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the statutory federal income tax amount to the recorded expense is as follows (in thousands):

4 unchanged sentences

Expected income tax expense (benefit) 1,918 2,727 ( 26,102 )

Change in tax rate — — ( 161 )

Interest and penalties 2,269 1,677 1,043

3 unchanged sentences

Withholding taxes 1,340 1,677 ( 49 )

Goodwill impairment — 52 11,544

Other permanent differences 1,011 322 478

State tax benefit 227 ( 1,129 ) ( 2,449 )

CARES act — — ( 2,378 )

Return to provision ( 11 ) ( 116 ) 390

2 unchanged sentences

The Company’s effective tax rate was 134.6 % for the year ended December 31, 2023 compared to 104.8 % for the year ended December 31, 2022 and 18.4 % for the year ended December 31, 2021.

The effective tax rate for the years ended December 31, 2022 and 2021 differed from the statutory rate of 21% primarily due to the mix of earnings between the United States and Puerto Rico as well as changes in the valuation allowance.

Additionally, the Company recorded interest and penalties expense of $ 1.7 million and $ 1.0 million during the years ended December 31, 2022 and 2021, respectively, related to the 2020 and 2021 tax year returns in Puerto Rico.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted and signed into U.S.

law in response to the COVID-19 pandemic, and among other things, permits the carryback of certain net operating losses.

As a result of the enacted legislation, the Company recognized a $ 2.4 million net tax benefit during the year ended December 31, 2020, which consisted of a $ 7.0 million current tax benefit and a $ 4.6 million deferred tax expense.

This impact, along with the rate impact from non-deductible goodwill impairment and the change in valuation allowance, was the primary driver for the difference between the statutory rate of 21% and the effective tax rate for the years ended December 31, 2020.

The effective tax rate for the years ended December 31, 2023, 2022 and 2021 differed from the statutory rate of 21% primarily due to the mix of earnings between the United States and Puerto Rico, changes in the valuation allowance and interest and penalties.

The Company recorded interest and penalties expense of $ 1.8 million, $ 1.7 million and $ 1.0 million during the years ended December 31, 2023, 2022 and 2021, respectively, related to the 2020, 2021 and 2022 tax year returns in Puerto Rico.

Additionally, the Company recorded interest expense of $ 0.5 million during the year ended December 31, 2023 related to the 2019 tax year return in the United States.

MAMMOTH ENERGY SERVICES, INC.

3 unchanged sentences

Deferred tax assets:

Allowance for doubtful accounts $ 598 $ 1,241

Lease asset $ 3,249 $ 4,287

9 unchanged sentences

Lease liability ( 3,160 ) ( 4,057 )

Prepaid expenses ( 2,586 ) ( 2,573 )

Other ( 1,808 ) ( 698 )

5 unchanged sentences

Total $ 1,216 $ ( 471 )

During the years ended December 31, 2022 and 2021, the Company recorded changes in its valuation allowance of $ 6.2 million and $ 12.2 million, respectively, related to excess foreign tax credits that are not expected to be utilized.

During the years ended December 31, 2023 and 2022, the Company recorded changes in its valuation allowance of $ 8.1 million and $ 6.2 million, respectively, related to deferred tax assets that are not expected to be utilized.

The Company has foreign tax credits carryforwards of $ 96.3 million as of December 31, 2023.

5 unchanged sentences

Federal tax rate of 21%.

As a result, the Company’s has foreign tax credits in excess of the corresponding U.S.

As a result, the Company has foreign tax credits in excess of the corresponding U.S.

income tax liability for which the foreign tax credits are allowed as an offset and, therefore, are not likely to be realized.

1 unchanged sentence

The distribution of these undistributed earnings is subject to a withholding tax in Puerto Rico and since the Company intends to make these distributions in the future, the withholding tax has been accrued.

The Company has recorded interest and penalties payable of $ 2.7 million and $ 1.0 million at December 31, 2022 and 2021, respectively, related to the 2021 and 2020 tax year returns in Puerto Rico.

The Company has recorded interest and penalties payable of $ 5.0 million and $ 2.7 million at December 31, 2023 and 2022, respectively, related to the 2020, 2021 and 2022 tax year returns in Puerto Rico and the 2019 tax year return in the United States.

It is the Company’s policy to recognize interest and applicable penalties in income tax expense.

64 unchanged sentences

Lessor Accounting

Certain of the Company’s agreements with its customers for drilling services, aviation services and remote accommodation services contain an operating lease component under ASC 842 because (i) there are identified assets, (ii) the customer obtains substantially all of the economic benefits of the identified assets throughout the period of use and (iii) the customer directs the use of the identified assets throughout the period of use.

Certain of the Company’s agreements with its customers for other services, aviation services and remote accommodation services contain an operating lease component under FASB ASC 842, Leases, because (i) there are identified assets, (ii) the customer obtains substantially all of the economic benefits of the identified assets throughout the period of use and (iii) the customer directs the use of the identified assets throughout the period of use.

The Company has elected to apply the practical expedient provided to lessors to combine the lease and non-lease components of a contract where the revenue recognition pattern is the same and where the lease component, when accounted for separately, would be considered an operating lease.

The practical expedient also allows a lessor to account for the combined lease and non-lease components under ASC 606, Revenue from Contracts with Customers , when the non-lease component is the predominant element of the combined component.

The practical expedient also allows a lessor to account for the combined lease and non-lease components under FASB ASC 606, when the non-lease component is the predominant element of the combined component.

The Company’s lease agreements are generally short-term in nature and lease revenue is recognized over time based on a monthly, daily or hourly rate basis.

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

revenue” and “services revenue - related parties” on the consolidated statements of comprehensive loss of $ 3.3 million, $ 2.4 million, and $ 1.4 million, respectively.

revenue” and “services revenue - related parties” in the accompanying consolidated statements of comprehensive loss of $ 3.2 million, $ 3.3 million, and $ 2.4 million, respectively.

Loss Per Share

26 unchanged sentences

The 2016 Plan authorizes the Company’s Board of Directors or the compensation committee of the Company’s Board of Directors to grant restricted stock, restricted stock units, stock appreciation rights, stock options and performance awards.

There are 4.5 million shares of common stock reserved for issuance under the 2016 Plan.

Restricted Stock Units

There was a maximum of 4.5 million shares of common stock reserved for issuance under the 2016 Plan, of which 0.6 million shares of common stock remain available for future grants under the 2016 Plan as of December 31, 2023.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units

The fair value of restricted stock unit awards was determined based on the fair market value of the Company’s common stock on the date of the grant.

17 unchanged sentences

As of December 31, 2023, there was $ 0.9 million of total unrecognized compensation cost related to the unvested restricted stock.

The cost is expected to be recognized over a weighted average period of approximately 5 months.

The cost is expected to be recognized over a weighted average period of approximately 1.7 years.

Included in cost of revenue and selling, general and administrative expenses is stock-based compensation expense of $ 1.3 million, $ 0.9 million and $ 1.2 million, respectively, for the years ended December 31, 2023, 2022 and 2021.

1 unchanged sentence

Transactions between the subsidiaries of the Company and the following companies are included in Related Party Transactions:

Wexford, Gulfport;

Grizzly Oil Sands ULC (“Grizzly”);

El Toro Resources LLC (“El Toro”);

Everest Operations Management LLC (“Everest”);

Elk City Yard LLC (“Elk City Yard”);

Double Barrel Downhole Technologies LLC (“DBDHT”);

Caliber Investment Group LLC (“Caliber”);

Predator Drilling LLC (“Predator”);

and Brim Equipment.

5 unchanged sentences

Muskie and Gulfport (b) — — 2,145 — —

SR Energy and Gulfport (c) — — 113 — —

Cobra Aviation/ARS/Leopard and Brim Equipment (d) 316 371 446 217 85

Panther and El Toro (e) 814 599 38 — —

Cobra Aviation/ARS/Leopard and Brim Equipment (c) 475 316 371 44 217

Panther and El Toro (d) 505 814 599 — —

Other Relationships — 3 12 3 6

12 unchanged sentences

On June 29, 2021, Gulfport ceased to be a related party.

SR Energy provided rental services for Gulfport.

On June 29, 2021, Gulfport ceased to be a related party.

Cobra Aviation, ARS and Leopard lease helicopters to Brim Equipment pursuant to aircraft lease and management agreements.

16 unchanged sentences

On December 21, 2018, Cobra Aviation acquired all outstanding equity interest in ARS and purchased two commercial helicopters, spare parts, support equipment and aircraft documents from Brim Equipment.

Following these transactions, and also on December 21, 2018, Cobra Aviation formed a joint venture with Wexford Investments named Brim Acquisitions to acquire all outstanding equity interests in Brim Equipment.

Following these transactions, and also on December 21, 2018, Cobra Aviation formed a joint venture with Wexford Investment named Brim Acquisitions to acquire all outstanding equity interests in Brim Equipment.

Cobra Aviation made additional investments in Brim Acquisitions totaling $ 0.5 million during the year ended December 31, 2020.

Wexford Investments is an entity controlled by Wexford, which owns approximately 48 % of the Company’s outstanding common stock.

ARS leases a helicopter to Brim Equipment and Cobra Aviation leases the two helicopters purchased as part of these transactions to Brim Equipment under the terms of aircraft lease and management agreements.

Wexford Investment is an entity controlled by Wexford, which owns approximately 47 % of the Company’s outstanding common stock.

Cobra Aviation and Leopard each lease one helicopter to Brim Equipment under the terms of aircraft lease and management agreements.

ARS was subsequently sold to a third party in July 2023.

See Note 4 for further discussion.

On October 16, 2023, The Company entered into a loan and security agreement with Wexford, an affiliate of Mammoth.

Under this agreement, we had outstanding debt, net of debt discount and debt issuance costs, of $ 42.8 million and accrued interest of $ 1.2 million as of December 31, 2023.

Additionally, we incurred interest expense under this agreement totaling $ 1.2 million for the year ended December 31, 2023.

See Note 11 for additional detail on the agreement with Wexford.

Commitments and Contingencies

8 unchanged sentences

Insurance programs 2,500 2,800

Bonding program — 1,000

Rail car commitments — 455

Total letters of credit $ 6,282 $ 6,494

11 unchanged sentences

The Company has coverage on its self-insurance program in the form of a stop loss of $ 0.2 million per participant and an aggregate stop-loss of $ 5.8 million for the calendar year ending December 31, 2023.

As of December 31, 2022 and 2021, accrued claims were $ 1.5 million and $ 1.6 million, respectively.

At each of December 31, 2023 and 2022, accrued claims were $ 1.5 million, respectively.

These estimates may change in the near term as actual claims continue to develop.

13 unchanged sentences

As of December 31, 2023 and 2022, outstanding performance and payment bonds totaled $ 10.0 million and $ 8.6 million, respectively.

The estimated cost to complete projects secured by the performance and payment bonds totaled $ 1.4 million as of December 31, 2022.

The Company did not have any outstanding bid bonds as of December 31, 2022.

Outstanding bid bonds totaled $ 0.6 million as of December 31, 2021.

The estimated cost to complete projects secured by the performance and payment bonds totaled $ 2.5 million and $ 1.4 million as of December 31, 2023 and 2022, respectively.

There were $ 0.2 million in outstanding bid bonds as of December 31, 2023 and no outstanding bid bonds as of December 31, 2022.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2022, PREPA owed the Company approximately $ 227.0 million for services performed, excluding $ 152.0 million of interest charged on these delinquent balances as of December 31, 2022.

As of December 31, 2023, PREPA owed the Company approximately $ 204.8 million for services performed, excluding $ 197.5 million of interest charged on delinquent balances as of December 31, 2023.

The Company believes these receivables are collectible.

22 unchanged sentences

PREPA filed first-level administrative appeals of the November 21, 2022 and December 21, 2022.

On January 18, 2023, the Court entered an order extending the stay and directing the parties to file a further status report addressing (i) the status of any administrative appeals in connection with the November and December determination memoranda regarding the second contract, (ii) the status of the criminal case against the former Cobra president and the FEMA official that concluded in December 2022, and (iii) a summary of the outstanding and unpaid amounts arising from the first and second contracts and whether PREPA disputes Cobra’s entitlement to these amounts with the Court by July 31, 2023.

On January 20, 2023, Cobra submitted a certified claim for approximately $ 379 million to FEMA pursuant to the federal Contract Disputes Act.

On February 1, 2023, FEMA notified Cobra that it had reviewed the claim and determined that no contract, expressed or implied, exists between FEMA and Cobra.

Therefore, no final decision will be issued in response to Cobra’s claim.

Cobra has 90 days from the February 1, 2023 decision to file a notice of appeal.

In the event PREPA (i) does not have or does not obtain the funds necessary to satisfy its obligations to Cobra under the contracts, (ii) obtains the necessary funds but refuses to pay the amounts owed to the Company or (iii) otherwise does not pay amounts owed to the Company for services performed, the receivable may not be collectible.

On March 29, 2023, Cobra filed a notice of appeal with the Civilian Board of Contract Appeals related to the certified claim submitted in January 2023.

On April 25, 2023, FEMA filed a motion to dismiss Cobra’s appeal alleging lack of jurisdiction.

On March 27, 2023, Cobra was notified that FEMA had approved $ 233 million in Cobra invoices related to the December 21, 2022 Determination Memorandum.

The 90 % federal cost share of this approved amount was $ 210 million, which was obligated and made available for draw down on March 27, 2023.

Of this $ 210 million, approximately $ 99 million has been represented by both PREPA and FEMA as intended to pay Cobra for outstanding invoices and the remaining $ 111 million is a reimbursement to PREPA for payments already made on Cobra invoices.

On May 16, 2023, Cobra filed a motion to lift the stay order.

In a June 8, 2023 hearing, the Court ordered PREPA to provide Cobra a detailed report on the status of their review of the invoices that make up the aforementioned $ 99 million.

On June 14, 2023, PREPA paid Cobra approximately $ 10.8 million, all of which was used to reduce outstanding borrowings under the Company’s previous revolving credit facility, as required under the terms thereof.

Additionally, on June 14, 2023, PREPA filed a report noting a portion of the approved, but unpaid invoices would be submitted to COR3 within two weeks of the filing and the remainder of the invoices would be submitted to COR3 within four weeks of the filing.

Following the passage of the two-week and four-week periods contained in the June 14, 2023 report, Cobra filed an

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

informative motion with the Court regarding the passage of the respective periods and PREPA’s failure to meet the deadlines.

The Court ordered PREPA to respond to Cobra’s informative motion, which PREPA did on July 21, 2023.

In this Court ordered response, PREPA informed the Court that an additional $ 8.4 million of invoices had been submitted for payment and that $ 72 million in FEMA approved costs were awaiting engineer certification.

On August 2, 2023, following submission of a joint status report by Cobra and FEMA on July 31, 2023, in which, among other things, PREPA requested the stay be continued and Cobra requested the stay be lifted, the Court entered an order continuing the stay until October 31, 2023 and requiring another joint status report be filed on October 16, 2023.

On August 22, 2023, PREPA paid Cobra approximately $ 2.0 million, all of which was used to reduce outstanding borrowings under the Company’s previous revolving credit facility.

On August 30, 2023, Cobra filed an informative motion with the Court regarding the status of the approved, but unpaid invoices.

The Court ordered PREPA to respond to Cobra’s informative motion, which PREPA did on September 18, 2023.

In this Court ordered response, PREPA informed the Court that the approved, but unpaid invoices were in the process of being entered into PREPA’s system for payment.

On September 22, 2023 and October 10, 2023, PREPA made payments to Cobra of approximately $ 0.8 million and $ 5.7 million, respectively, all of which was used to reduce outstanding borrowings under the Company’s previous revolving credit facility.

On October 16, 2023 and October 25, 2023, PREPA made additional payments to Cobra of approximately $ 1.7 million and $ 1.2 million.

Also on October 16, 2023, pursuant to Court’s prior order, the parties submitted a further joint status report.

In the joint status report, PREPA informed the Court that, among other things, it intended to process and submit to COR3 for reimbursement the remaining approximately $ 81 million in approved, but unpaid invoices.

In addition, the parties informed the Court that the parties were engaged in mediation to resolve open disputes with respect to other unpaid invoices.

On October 19, 2023, the Court entered an order continuing the stay through the earlier of January 31, 2024, and the termination of the mediation, directing the parties to file a further status report with the Court by December 1, 2023, and if the disputes have not been resolved through payment or mediation by January 15, 2024, directed the parties to file a status report by January 16, 2024.

On December 1, 2023, Cobra, as seller, and Mammoth, as guarantor, entered into the Assignment Agreement with SPCP Group.

Under the terms and conditions of the Assignment Agreement, Cobra transferred to SPCP Group all of its rights, title and interest in $ 54.4 million of outstanding accounts receivable with PREPA and received net proceeds of $ 46.1 million.

See below for additional information.

On December 4, 2023, following submission of a joint status report by Cobra and FEMA on December 1, 2023, in which, among other things, PREPA reported that they submitted a request for reimbursement to COR3 on November 1, 2023 for $ 82.4 million and is disputing approximately $ 1.5 million of invoices from Cobra, the Court ordered PREPA to provide a detailed summary of each of their objections to the disputed amounts and directed the parties to report the status of any remaining unpaid approved invoices in connection with the status report due on January 16, 2024.

On January 16, 2024, the parties filed a joint status report in which, among other things, PREPA reported that on December 28, 2023, it received a disbursement from COR3 for the amount requested on November 1, 2023 and was in the process of paying Cobra’s assignee approximately $ 13.4 million, which was paid to SPCP Group on January 18, 2023.

Additionally, PREPA reported that it received an order from the Humacao Superior Court requiring it to withhold approximately $ 9.0 million from any payment otherwise due to Cobra stemming from an alleged unpaid debt of municipal and construction excise taxes and noted that it is aware of twelve Puerto Rico Superior Court cases filed against Cobra by different municipalities relating to the same alleged claims for municipal and construction excise taxes, which, in aggregate, total approximately $ 70.4 million.

See below for a more detailed discussion of claims alleging Cobra’s failure to pay construction excise and volume of business taxes.

As a result of these alleged claims, PREPA informed the Court that it will withhold the release of any further funds to Cobra.

Cobra believes it is exempt from the construction excise taxes and strongly disagrees with PREPA’s decision to withhold funds.

On January 17, 2024, Cobra filed a Writ of Certiorari requesting the Court of Appeals to reverse the order from the Humacao Superior Court.

On February 15, 2024, Cobra’s request was granted by the Court of Appeals and the order instructing PREPA to withhold the $ 9.0 million payment from Cobra was revoked.

The case was remanded to the lower Court for continuation of the proceedings in accordance with the Court of Appeals’ order.

The municipality has 15 days to request reconsideration.

On January 19, 2024, the Court extended the stay through April 5, 2024, and directed the parties to file a joint status report addressing (i) the status of any administrative appeals in connection with the November 2022 and December 2022 determination memoranda regarding the second contract, (ii) the status of any remaining approved, but unpaid invoices, and (iii) whether the parties are actively engaged in mediation to resolve their outstanding issues by March 27, 2024.

On December 28, 2019, Gulfport filed a lawsuit against Stingray Pressure Pumping in the Superior Court of the State of Delaware.

Pursuant to the complaint, Gulfport sought to terminate the October 1, 2014, Amended and Restated Master Services Agreement for Pressure Pumping Services between Gulfport and Stingray Pressure Pumping (“MSA”).

In addition, Gulfport alleged breach of contract and sought damages for alleged overpayments and audit costs under the MSA and other fees and expenses associated with this lawsuit.

On March 26, 2020, Stingray Pressure Pumping filed a counterclaim against Gulfport seeking to recover unpaid fees and expenses due to Stingray Pressure Pumping under the

In addition, Gulfport alleged breach of contract and sought damages for alleged overpayments and audit costs under the

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MSA and other fees and expenses associated with this lawsuit.

On March 26, 2020, Stingray Pressure Pumping filed a counterclaim against Gulfport seeking to recover unpaid fees and expenses due to Stingray Pressure Pumping under the MSA.

In September 2020, Muskie filed a lawsuit against Gulfport to recover delinquent payments due under a natural sand proppant supply contract.

1 unchanged sentence

Gulfport emerged from bankruptcy on May 17, 2021.

As of November 13, 2020, Gulfport owed the Company approximately $ 46.9 million, which included interest charges of $ 3.3 million and $ 1.8 million in attorneys’ fees.

FASB ASC 326 , Financial Instruments-Credit Losses, requires companies to reflect its current estimate of all expected credit losses.

As a result, the Company recorded reserves on its pre-petition receivables due from Gulfport for products and services, interest and attorneys’ fees of $ 19.4 million, $ 1.4 million and $ 1.8 million, respectively, during the year ended December 31, 2020.

On March 22, 2021, Gulfport listed the Stingray Pressure Pumping and Muskie contracts on its master rejection schedule filed with the bankruptcy court.

14 unchanged sentences

The agreement specified interest rates between 6 % and 12 %.

The settlement amount and legal expenses related to the matter of $ 25.0 million and $ 5.4 million, respectively, are reflected in “other, net” on the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2021.

The settlement amount and legal expenses related to the matter of $ 25.0 million and $ 5.4 million, respectively, are reflected in “other income, net” in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2021.

Cobra made the second installment payment, including accrued interest, to MasTec on August 23, 2022, the final installment principal payment to MasTec on October 24, 2022 and the final installment interest payment to MasTec on December 1, 2022.

10 unchanged sentences

Foreman filed a motion to remand this action back to Oklahoma County District Court, which was granted on May 5, 2022.

The case will now proceed according to a schedule that will be set by the Oklahoma County District Court.

In a related matter, on January 12, 2022, a Derivative Complaint on behalf of nominal defendant Machine Learning Integration, LLC (“MLI”), which alleges it would have served as a sub-contractor to Foreman in Puerto Rico, was filed against the Company and Cobra in the U.S.

District Court for the District of Puerto Rico alleging essentially the same facts as Foreman’s action and asserting violations of federal RICO statutes and certain non-federal claims.

MLI alleges it sustained injuries to its business and property in an unspecified amount because the Company’s and Cobra’s wrongful

On September 28, 2023, the Company moved to dismiss the petition.

On November 16, 2023, rather than respond to the motion, Foreman filed an Amended Petition naming Arty Straehla, Mark Layton and Wexford as additional defendants, added claims for fraudulent transfer arising out of the refinancing of certain debt and sought receivership over Mammoth and Cobra related to allegedly fraudulently transferred assets.

The defendants moved to dismiss the Amended Petition, and the motion is set to be heard on March 12, 2024.

On February 8, 2024, Foreman filed a Motion for Appointment of Receiver.

Mammoth’s response to this motion is due by March 1, 2024.

The Company believes these claims are without merit and will vigorously defend the action.

Additionally, on February 6, 2023, Foreman moved to amend a complaint against the former president of Cobra filed in Florida State Court arising from facts similar to those in the pending Oklahoma action to add, as defendants, Arty Straehla and Mark Layton.

On September 15, 2023, Straehla and Layton

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

interference by means of inducements to a FEMA official prevented Foreman from obtaining work, and thereby prevented MLI, as Foreman’s subcontractor, from obtaining work.

moved to dismiss the complaint.

On January 18, 2024, Foreman voluntarily dismissed the Florida State Court action against Straehla and Layton.

District Court for the District of Puerto Rico alleging essentially the same facts as Foreman’s action and asserting violations of federal RICO statutes and certain non-federal claims.

MLI alleges it sustained injuries to its business and property in an unspecified amount because the Company’s and Cobra’s wrongful interference by means of inducements to a FEMA official prevented Foreman from obtaining work, and thereby prevented MLI, as Foreman’s subcontractor, from obtaining work.

These matters are still in the early stages and at this time, the Company is not able to predict the outcome of these claims or whether they will have a material impact on the Company’s business, financial condition, results of operations or cash flows.

4 unchanged sentences

On February 25, 2022, the Company received an unfavorable decision on the appeal.

The Company appealed the decision and while it is not able to predict the outcome of the appeal, this matter is not expected to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

Cobra has been served with ten lawsuits from municipalities in Puerto Rico alleging failure to pay construction excise and volume of business taxes.

These matters are in various stages in the Court.

On November 14, 2022, the Court entered judgment against Cobra in connection with one of the lawsuits ordering payment of approximately $ 9.0 million.

On January 9, 2023, Cobra appealed the judgment and is currently awaiting a decision from the Court.

To the extent Cobra receives an unfavorable judgment, the Company believes that any such taxes in the judgement that relate to the Emergency Master Service Agreement with PREPA executed on October 19, 2017, would be reimbursable to Cobra.

The Company appealed the decision.

On August 2, 2023, the Ohio Supreme court affirmed the ruling in part and reversed the ruling in part.

The Company is currently awaiting the final assessment.

It is not expected to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

Cobra has been served with 13 lawsuits from municipalities in Puerto Rico alleging failure to pay construction excise and volume of business taxes.

These matters are in various stages in the applicable courts in Puerto Rico.

On November 14, 2022, the Puerto Rico Superior Court entered judgment against Cobra in connection with one of the lawsuits ordering payment of approximately $ 9.0 million.

On January 9, 2023, Cobra appealed the judgment and, on March 20, 2023, the Court confirmed the imposition of approximately $ 8.5 million related to construction excise taxes.

On April 10, 2023, Cobra appealed this judgment, which was denied on May 5, 2023.

Cobra filed a motion for reconsideration on May 15, 2023, which was denied.

Cobra filed a second motion for reconsideration on June 22, 2023 and is currently awaiting a decision.

On December 18, 2023, the Humacao Superior Court issued an order to PREPA to withhold payment of approximately $ 9.0 million to Cobra.

On January 17, 2024, Cobra filed a Writ of Certiorari requesting the Court of Appeals to reverse the order from the Humacao Superior Court.

On February 15, 2024, Cobra’s request was granted by the Court of Appeals and the order instructing PREPA to withhold the $ 9.0 million payment from Cobra was revoked.

The case was remanded to the lower Court for continuation of the proceedings in accordance with the Court of Appeals’ order.

The municipality has 15 days to request reconsideration.

Cobra believes it is exempt from the construction excise taxes.

To the extent Cobra receives an unfavorable judgment, the Company believes that any such taxes in the judgment that relate to the Emergency Master Service Agreement with PREPA executed on October 19, 2017, would be reimbursable to Cobra.

At this time, the Company is not able to predict the outcome of these matters or whether they will have a material impact on the Company’s business, financial condition, results of operations or cash flows.

7 unchanged sentences

Zeisset and opt-in plaintiffs.

The arbitrations remain pending.

Other claimants have subsequently initiated additional individual arbitration proceedings asserting similar claims.

All complainants and the respondents have paid the filing fees necessary to initiate the arbitrations.

The parties are currently engaged in discovery.

The Company believes these claims are without merit and is vigorously defending the arbitrations.

However, at this time, the Company is not able to predict the outcomes of these proceedings or whether they will have a material impact on the Company’s business, financial condition, results of operations or cash flows.

During 2023, the Company agreed to settlements in principle with a portion of the claimants.

Arbitrations remain pending for the remaining claimants.

The Company will continue to vigorously defend the arbitrations.

During 2023, the Company recognized an estimated liability related to these complaints, which is included in “accounts payable” in the accompanying consolidated balance sheet at December 31, 2023.

The amount required to resolve these matters may ultimately increase or decrease from the Company’s estimated amount as the matters progress.

On September 10, 2019, the U.S.

4 unchanged sentences

On May 18, 2022, the former FEMA official and the former president of Cobra each pled guilty to one-count information charging gratuities related to a project that Cobra never bid upon and was never awarded or received any monies for.

On December 13, 2022, the Court sentenced the former Cobra president to custody of the Bureau of Prisons for six months and one day, a term of supervised release of six months and one day and a fine of $ 25,000 .

On December 13, 2022, the Court sentenced the former Cobra president to custody of the Bureau of Prisons

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

for six months and one day, a term of supervised release of six months and one day and a fine of $ 25,000 .

The Court sentenced the FEMA official to custody of the Bureau of Prisons for six months and one day, a term of supervised release of six months and a fine of $ 15,000 .

7 unchanged sentences

Cobra is cooperating with the DOJ and is not able to predict the outcome of this investigation or if it will have a material impact on Cobra’s or the Company’s business, financial condition, results of operations or cash flows.

With regard to the previously disclosed SEC investigation, on July 6, 2022, the SEC sent a letter saying that it had concluded its investigation as to the Company and that based on information the SEC has as of this date, it does not intend to recommend an enforcement action against the Company.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

With regard to the SEC investigation disclosed in previous filings, on July 6, 2022, the SEC sent a letter saying that it had concluded its investigation as to the Company and that based on information the SEC has as of this date, it does not intend to recommend an enforcement action against the Company.

On September 12, 2019, AL Global Services, LLC (“Alpha Lobo”) filed a second amended third-party petition against the Company in an action styled Jim Jorrie v.

17 unchanged sentences

Although the Company cannot predict the outcome of these proceedings, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these matters could have a material impact on the Company’s business, financial condition, results of operations or cash flows.

Assignment Agreement

On December 1, 2023, Cobra, as seller and Mammoth, as guarantor, entered into the Assignment Agreement with SPCP Group, as purchaser.

Under the terms and conditions of the Assignment Agreement, Cobra transferred to SPCP Group, at the purchase rate of 88.0 % and free and clear of any liens and claims, all of its rights, title and interest in the first $ 63.0 million (the “Transferred Amount”) of the total outstanding accounts receivable that remained unpaid by PREPA as of October 6, 2023 (the “PREPA Claim”), received or to be received by Cobra on or after October 6, 2023.

Between October 6, 2023 and December 1, 2023, Cobra received payments from PREPA with respect to the PREPA Claim totaling $ 8.6 million (the “Interim Payment Amount”), resulting in the net Transferred Amount of $ 54.4 million.

Under the terms and conditions of the Assignment Agreement, any portion of the Transferred Amount that remains outstanding from PREPA from and after March 31, 2024 will thereafter increase monthly at a rate of 1 % per month, compounded.

Any amount received with respect to the PREPA Claim in excess of the Transferred Amount will be for the benefit of Cobra.

If (i) it is determined by a final order of any court of competent jurisdiction that the PREPA Claim is subject to any defense, claim or right of setoff, reduction, avoidance, disallowance, subordination, disgorgement,

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

recharacterization, adversary proceeding or other impairment, whether on contractual, legal or equitable grounds, resulting in the PREPA Claim being disallowed or allowed in an amount less than the Transferred Amount, or (ii) Cobra consents to, or enters into a settlement agreement with PREPA for, the payment that is, in an aggregate amount, less than the Transferred Amount or is otherwise adversely impacting SPCP Group’s rights transferred under the Assignment Agreement, Cobra has agreed to repurchase within 18 months and one day from the receipt of SPCP Group’s written demand, the unpaid portion of the Transferred Amount subject to such disallowance or impairment, multiplied by the purchase rate, plus interest accruing, subject to certain tolling provisions, at a rate of 6 % per annum from December 1, 2023 through and including the date of such repurchase.

In connection with the entry into the Assignment Agreement, Mammoth and Cobra obtained the required consents from lenders under the Company’s revolving credit facility with Fifth Third Bank and the Company’s term loan and security agreement with Wexford.

Further, under the term loan and security agreement with Wexford, Mammoth is required, among other things, to mandatorily remit to Wexford up to 50 % of all amounts that constitute PREPA Claim proceeds, including the proceeds received by Cobra under the Assignment Agreement, to reduce outstanding borrowings under such term loan and security agreement, which requirement was waived by Wexford in connection with the Assignment Agreement.

The net proceeds received by Cobra in connection with the Assignment Agreement were $ 46.1 million.

The Company elected the fair value option for measuring the liability to simplify the accounting associated with the Assignment Agreement.

As of December 31, 2023, the fair value of the liability was approximately $ 48.9 million, which is included in “accrued expenses and other current liabilities” in the accompanying consolidated balance sheet and the aggregate unpaid principal balance related to this liability was $ 54.4 million.

During the year ended December 31, 2023, the Company recognized a financing charge totaling $ 2.8 million, which is included in “interest expense and financing charges, net” in the accompanying consolidated statement of comprehensive loss.

Subsequent to December 31, 2023, PREPA paid $ 64.0 million with respect to the outstanding PREPA receivable.

Of the $ 64.0 million, $ 54.4 million was paid to SPCP Group, as Cobra’s assignee under the Assignment Agreement, which fully extinguished Cobra’s and Mammoth’s obligations to SPCP Group under the Assignment Agreement, and the Assignment Agreement was terminated.

The remaining $ 9.6 million was paid to Cobra.

The Company expects to recognize a financing charge totaling approximately $ 5.5 million during the first quarter of 2024 related to the termination of the Assignment Agreement.

Defined contribution plan

7 unchanged sentences

The Company principally provides services in connection with on-shore drilling of oil and natural gas wells for small to large domestic independent oil and natural gas producers as well as electric infrastructure services to private utilities, public investor-owned utilities and co-operative utilities.

The Company’s Chief Executive Officer and Chief Financial Officer comprise the Company’s Chief Operating Decision Maker function (“CODM”).

The Company’s Chief Executive Officer and Chief Financial Officer comprise the Company’s CODM.

Segment information is prepared on the same basis that the CODM manages the segments, evaluates the segment financial statements and makes key operating and resource utilization decisions.

1 unchanged sentence

As of December 31, 2023, the Company’s four reportable segments include well completion services (“Well Completion”), infrastructure services (“Infrastructure”), natural sand proppant services (“Sand”) and drilling services (“Drilling”).

The Well Completion segment provides hydraulic fracturing and water transfer services primarily in the Utica Shale of Eastern Ohio, Marcellus Shale in Pennsylvania and the mid-continent region.

The Sand segment mines, processes and sells sand for use in hydraulic fracturing.

The Infrastructure segment provides electric utility infrastructure services to government-funded utilities, private utilities, public investor-owned utilities and co-operative utilities in the northeastern, southwestern, midwestern and western portions of the United States.

The Sand segment primarily services

The Well Completion segment provides hydraulic fracturing and water transfer services primarily in the

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the Utica Shale, Permian Basin, SCOOP, STACK and Montney Shale in British Columbia and Alberta, Canada.

Utica Shale of Eastern Ohio, Marcellus Shale in Pennsylvania and the mid-continent region.

The Sand segment mines, processes and sells sand for use in hydraulic fracturing.

The Sand segment primarily services the Utica Shale, Permian Basin, SCOOP, STACK and Montney Shale in British Columbia and Alberta, Canada.

During certain of the periods presented, the Drilling segment provided contract land and directional drilling services primarily in the Permian Basin and mid-continent region.

During certain of the periods presented, the Company also provided aviation services, coil tubing services, equipment rental services, full service transportation, crude oil hauling services, remote accommodation and equipment manufacturing.

In 2022, the Company included Bison Trucking in its Drilling segment.

Based on its assessment of FASB ASC 280, Segment Reporting , guidance at December 31, 2023, the Company changed its presentation in 2023 to move Bison Trucking to the reconciling column titled “All Other”.

The results for the years ended December 31, 2022 and 2021 have been retroactively adjusted to reflect these changes.

During certain of the periods presented, the Company also provided aviation services, equipment rental services, crude oil hauling services, remote accommodation and equipment manufacturing.

The businesses that provide these services are distinct operating segments, which the CODM reviews independently when making key operating and resource utilization decisions.

None of these operating segments meet the quantitative thresholds of a reporting segment and do not meet the aggregation criteria set forth in ASC 280 Segment Reporting.

None of these operating segments meet the quantitative thresholds of a reporting segment and do not meet the aggregation criteria set forth in FASB ASC 280 .

Therefore, results for these operating segments are included in the column titled “All Other” in the tables below.

Additionally, assets for corporate activities, which primarily include cash and cash equivalents, inter-segment accounts receivable, prepaid insurance and certain property and equipment, are included in the All Other column.

Additionally, assets for corporate activities, which primarily include cash and cash equivalents, restricted cash, inter-segment accounts receivable, prepaid insurance and certain property and equipment, are included in the All Other column.

Although Mammoth Energy Partners LLC, which holds these corporate assets, meets one of the quantitative thresholds of a reporting segment, it does not engage in business activities from which it may earn revenues and its results are not regularly reviewed by the Company’s CODM when making key operating and resource utilization decisions.

16 unchanged sentences

Gains on disposal of assets, net ( 2,091 ) ( 510 ) ( 13 ) ( 1,577 ) ( 1,850 ) — ( 6,041 )

Operating (loss) income 11,791 ( 14,720 ) ( 1,206 ) ( 6,965 ) ( 5,318 ) — ( 16,418 )

Interest expense 1,940 7,390 753 545 878 — 11,506

Other income, net ( 343 ) ( 40,470 ) ( 14 ) — ( 85 ) — ( 40,912 )

Income (loss) before income taxes $ 10,194 $ 18,360 $ ( 1,945 ) $ ( 7,510 ) $ ( 6,111 ) $ — $ 12,988

Impairment of goodwill — — — — 1,810 — 1,810

Operating income (loss) 722 ( 10,048 ) 1,428 ( 3,678 ) ( 5,109 ) — ( 16,685 )

Interest expense and financing charges, net 4,502 9,753 540 489 912 — 16,196

Other expense (income), net 2 ( 39,252 ) ( 18 ) ( 33 ) ( 2,714 ) — ( 42,015 )

(Loss) income before income taxes $ ( 3,782 ) $ 19,451 $ 906 $ ( 4,134 ) $ ( 3,307 ) $ — $ 9,134

Total expenditures for property, plant and equipment $ 17,931 $ 716 $ 223 $ 110 $ 312 $ 103 $ 19,395

14 unchanged sentences

Gains on disposal of assets, net ( 615 ) ( 795 ) ( 89 ) — ( 2,409 ) — ( 3,908 )

Impairment of goodwill — 891 — — — — 891

Impairment of other long-lived assets — 665 — — 547 — 1,212

Operating loss ( 55,100 ) ( 38,573 ) ( 6,698 ) ( 10,989 ) ( 11,681 ) — ( 123,041 )

Interest expense 1,107 3,925 474 293 607 — 6,406

Other (income) expense, net 1,843 ( 6,499 ) ( 844 ) 25 321 — ( 5,154 )

Loss before income taxes $ ( 58,050 ) $ ( 35,999 ) $ ( 6,328 ) $ ( 11,307 ) $ ( 12,609 ) $ — $ ( 124,293 )

Operating income (loss) 11,791 ( 14,720 ) ( 1,206 ) ( 5,636 ) ( 6,647 ) — ( 16,418 )

Interest expense and financing charges, net 1,940 7,390 753 435 988 — 11,506

Other income, net ( 343 ) ( 40,470 ) ( 14 ) — ( 85 ) — ( 40,912 )

Income (loss) before income taxes $ 10,194 $ 18,360 $ ( 1,945 ) $ ( 6,071 ) $ ( 7,550 ) $ — $ 12,988

Total expenditures for property, plant and equipment $ 11,421 $ 885 $ 88 $ 95 $ 401 $ ( 153 ) $ 12,737

11 unchanged sentences

Depreciation, depletion, amortization and accretion 26,377 21,880 9,005 6,784 14,429 — 78,475

(Gains) losses on disposal of assets, net ( 388 ) ( 444 ) 1,829 ( 352 ) ( 1,283 ) — ( 638 )

Gains on disposal of assets, net ( 770 ) ( 286 ) ( 30 ) ( 205 ) ( 3,856 ) — ( 5,147 )

Impairment of goodwill — 891 — — — — 891

1 unchanged sentence

Operating loss ( 55,100 ) ( 38,573 ) ( 6,698 ) ( 8,921 ) ( 13,749 ) — ( 123,041 )

Interest expense 1,130 2,794 312 454 707 — 5,397

Other expense, net ( 1,886 ) ( 31,993 ) 10 125 ( 556 ) — ( 34,300 )

Income (loss) before income taxes $ ( 69,073 ) $ 6,205 $ ( 11,324 ) $ ( 16,865 ) $ ( 28,719 ) $ — $ ( 119,776 )

Interest expense and financing charges, net 1,107 3,925 474 237 663 — 6,406

Other expense (income), net 1,843 ( 6,499 ) ( 844 ) 25 321 — ( 5,154 )

Loss before income taxes $ ( 58,050 ) $ ( 35,999 ) $ ( 6,328 ) $ ( 9,183 ) $ ( 14,733 ) $ — $ ( 124,293 )

Total expenditures for property, plant and equipment $ 4,327 $ 627 $ 484 $ 23 $ 382 $ — 5,843

9 unchanged sentences

United States $ 287,467 $ 343,307 $ 217,958

Puerto Rico — — 53

Canada 21,746 18,603 10,685

8 unchanged sentences

Subsequent Events

Subsequent to December 31, 2022, the Company granted an aggregate of 250,000 restricted stock units (“RSUs”) to certain non-executive employees of the Company under the 2016 Plan.

Of the RSUs granted, an aggregate of 50,000 RSUs will vest in three substantially equal annual installments, and an aggregate of 200,000 RSUs will vest in four equal annual installments, in each case beginning on the grant date, subject to such plan participants’ continued service.

Subsequent to December 31, 2023, the Company issued additional bid bonds totaling $ 1.1 million related to its infrastructure segment.

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-K

Item 9A. Controls and Procedures