What changed in this filing

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Item 9A. Controls and Procedures

2025-03-07 compared with 2024-03-01 · 417 added, 567 removed, 1153 unchanged (46% of the section changed)

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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.

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 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.

As of December 31, 2024, an evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act.

Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2023, our disclosure controls and procedures are effective.

Based upon our

evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2024, our disclosure controls and procedures are effective.

C hanges in Internal Controls Over Financial Reporting

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Other Information

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.

During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Executive Compensation

The information required by Item 11 of Part III is incorporated by reference to our definitive Proxy Statement within 120 days after the close of the year ended December 31, 2023.

The information required by Item 11 of Part III is incorporated by reference to our definitive Proxy Statement to be filed by us pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 within 120 days after the close of the year ended December 31, 2024.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 12 of Part III is incorporated by reference to our definitive Proxy Statement within 120 days after the close of the year ended December 31, 2023.

The information required by Item 12 of Part III is incorporated by reference to our definitive Proxy Statement to be filed by us pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 within 120 days after the close of the year ended December 31, 2024.

Certain Relationships and Related Transactions and Director Independence

The information required by Item 13 of Part III is incorporated by reference to our definitive Proxy Statement within 120 days after the close of the year ended December 31, 2023.

Principal Accountant Fees and Services

The information required by Item 14 of Part III is incorporated by reference to our definitive Proxy Statement within 120 days after the close of the year ended December 31, 2023.

Exhibits, Financial Statement Schedules

The information required by Item 13 of Part III is incorporated by reference to our definitive Proxy Statement to be filed by us pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 within 120 days after the close of the year ended December 31, 2024.

Principal Accounting Fees and Services

The information required by Item 14 of Part III is incorporated by reference to our definitive Proxy Statement to be filed by us pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 within 120 days after the close of the year ended December 31, 2024.

Exhibits and Financial Statement Schedules

The following documents are filed as part of this report or incorporated by reference herein:

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Consolidated Balance Sheets

Consolidated Statement of Comprehensive Loss

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Changes in Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

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

N810LA Helicopter Lease Extension Agreement, dated as of January 1, 2025 by and between Cobra Aviation Services LLC and Brim Equipment Leasing LLC.

N904AF Helicopter Lease Extension Agreement, dated as of January 1, 2025 by and between Leopard Aviation LLC and Brim Equipment Leasing LLC.

Advisory Services Agreement, dated as of October 19, 2016, by and between the Company and Wexford Capital LP (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No.

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

Mammoth Energy Services, Inc.

2024 Equity Incentive Plan (incorporated by reference to Annex B to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 29, 2024).

Credit Agreement Amendment, dated as of October 16, 2024, by and between the Company and Fifth Third Bank, National Association (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 1, 2024).

Mammoth Energy Services Inc.

Insider Trading and Unauthorized Disclosure of Information Policy

Mammoth Energy Services Inc.

Supplemental Insider Trading Policy

List of Significant Subsidiaries of the Company.

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Mammoth Energy Services, Inc.

Clawback Policy, effective as of December 1, 2023.

Clawback Policy, effective as of December 1, 2023 (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K (File No.

001-37917), filed with the SEC on March 1, 2024).

101.INS* XBRL Instance Document.

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+ Management contract, compensatory plan or arrangement.

MAMMOTH ENERGY SERVICES, INC.

Form 10-K Summary

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Signature Title Date

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

Arty Straehla

/s/ Phil Lancaster Chief Executive Officer (principal executive officer) March 7, 2025

Phil Lancaster

/s/ Mark Layton Chief Financial Officer (principal financial and accounting officer) March 7, 2025

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

(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.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, 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, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, 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, 2024, 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 7, 2025 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

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

These consolidated financial statements are the responsibility of the Company’s management.

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

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.

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We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

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.

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”).

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.

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, management’s qualitative evaluation of the measurement 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 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 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.

Critical audit matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ GRANT THORNTON LLP

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Accounts receivable, net 79,020 447,202

Receivables from related parties, net 47 223

Inventories 15,119 12,653

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Property, plant and equipment, net 115,082 113,905

Sand reserves 58,528 61,830

Sand reserves, net 57,273 58,528

Operating lease right-of-use assets 6,417 9,551

Intangible assets, net 913 1,782

Goodwill 9,214 9,214

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Current operating lease liability 3,450 5,771

Current portion of long-term debt — 83,520

Income taxes payable 44,658 61,320

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Product revenue 19,026 39,285 48,985

Product revenue - related parties — — 2,145

Total revenue 187,932 309,492 362,086

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124,821 37,458 39,554

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

Depreciation, depletion, amortization and accretion 25,079 45,110 64,271

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Impairment of goodwill — 1,810 —

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

Total cost and expenses 316,637 326,177 378,504

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Interest expense and financing charges, net - related parties ( 4,707 ) ( 1,241 ) —

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

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

Other (expense) income, net ( 64,621 ) 42,015 40,912

Total other income (expense) ( 89,825 ) 25,819 29,406

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Common Stock Retained Paid-In Comprehensive

Shares Amount Earnings (Deficit) Capital Loss Total

Shares Amount Deficit Capital Loss Total

(in thousands)

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Net loss — — ( 619 ) — — ( 619 )

Other comprehensive income — — — — 134 134

Balance at December 31, 2021 46,684 $ 467 $ ( 72,535 ) $ 538,221 $ ( 2,931 ) $ 463,222

Stock based compensation 628 6 — 917 — 923

Net loss — — ( 619 ) — — ( 619 )

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

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

Stock based compensation 186 2 — 873 — 875

Net loss — — ( 207,326 ) — — ( 207,326 )

Other comprehensive loss — — — — ( 831 ) ( 831 )

Balance at December 31, 2024 48,127 $ 481 $ ( 283,643 ) $ 540,431 $ ( 4,451 ) $ 252,818

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

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Impairment of goodwill — 1,810 —

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

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

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Accounts receivable, net 195,639 11,275 ( 52,527 )

Receivables from related parties 176 ( 135 ) 28,373

Inventories ( 2,563 ) ( 3,770 ) ( 517 )

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Income taxes payable ( 16,655 ) 12,757 5,800

Net cash provided by (used in) operating activities 31,386 15,266 ( 18,865 )

Net cash provided by operating activities 180,717 31,386 15,266

Cash flows from investing activities:

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Proceeds from disposal of property and equipment 6,633 7,333 10,613

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

Net cash used in investing activities ( 10,432 ) ( 8,786 ) ( 2,124 )

Cash flows from financing activities:

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

Repayments of long-term debt - related parties ( 50,888 ) — —

Proceeds from financing transaction, net — 46,120 —

Payments on financing transaction (Note 10) ( 46,837 ) — —

Proceeds from sale-leaseback transaction — — 4,589

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Other — ( 919 ) —

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

Net cash used in financing activities ( 112,113 ) ( 15,586 ) ( 5,601 )

Effect of foreign exchange rate on cash ( 144 ) 2 ( 158 )

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Cash paid for interest $ 15,526 $ 12,017 $ 10,164

Cash paid for income taxes $ 897 $ 106 $ 829

Cash paid for income taxes, net of refunds received $ 1,173 $ 897 $ 106

Supplemental disclosure of non-cash transactions:

Purchases of property and equipment included in accounts payable $ 3,339 $ 4,736 $ 1,535

Interest paid in kind - related parties $ 5,888 $ — $ —

Purchases of property and equipment included in accounts payable and accrued expenses $ 5,650 $ 3,339 $ 4,736

Right-of-use assets obtained for financing lease liabilities $ 6,896 $ 1,417 $ 3,058

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Mammoth Inc.’s infrastructure division provides engineering, design, construction, upgrade, maintenance and repair services to various public and private owned utilities.

Its oilfield services division provides a diversified set of services to the exploration and production industry including well completion, natural sand and proppant and drilling services.

Its oilfield services division provides a diversified set of services to the exploration and production industry including well completions and natural sand proppant services.

Additionally, the Company provides aviation services, equipment rentals, remote accommodation services and equipment manufacturing.

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Bison Trucking LLC (“Bison Trucking”), formed August 2013;

Anaconda Rentals LLC, formerly known as White Wing Tubular Services LLC, formed July 29, 2014;

Barracuda Logistics LLC (“Barracuda”), formed October 24, 2014;

Inspections LLC (“MRI”), formed January 2015;

Panther Drilling Systems LLC (“Panther”), formed December 2012;

Redback Energy Services, LLC (“Redback Energy”), formed October 6, 2011;

Redback Coil Tubing, LLC (“Coil Tubing”), formed May 15, 2012;

Redback Pump Down Services LLC (“Pump Down”), formed January 16, 2015;

Muskie Proppant LLC (“Muskie”), formed September 2011;

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(“Sand Tiger”), formed October 2007;

WTL Oil LLC (“WTL”), formerly known as Silverback Energy Services LLC, formed June 8, 2016;

Mammoth Energy Partners LLC, formed October 2016;

Mammoth Equipment Leasing LLC, formed November 2016;

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Stingray Energy Services LLC (“SR Energy”), acquired June 2017;

Stingray Cementing LLC (“Cementing”), acquired June 5, 2017;

Sturgeon Acquisitions LLC (“Sturgeon”), acquired June 2017;

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Cobra Aviation Services LLC (“Cobra Aviation”), formed January 2018;

Bison Sand Logistics LLC (“Bison Sand”), formed January 8, 2018;

Dire Wolf Energy Services LLC (“Dire Wolf”), formed January 2018;

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Stingray Cementing and Acidizing LLC (“Stingray Cementing and Acidizing”), formerly known as RTS Energy Services LLC (“RTS”), acquired June 2018;

Aquahawk Energy LLC (“Aquahawk”), formed June 28, 2018;

Ivory Freight Solutions LLC (“Ivory Freight”), formed July 26, 2018;

Orca Energy Services LLC (“Orca”), formed June 2018;

Python Equipment LLC (“Python”), formed December 2018;

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

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

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

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

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

On December 13, 2024, the following entities were merged into Orca:

Anaconda Rentals LLC, formerly known as White Wing Tubular Services LLC;

Barracuda Logistics LLC (“Barracuda”);

Redback Energy Services, LLC (“Redback Energy”);

Redback Coil Tubing, LLC (“Coil Tubing”);

Redback Pumpdown Services LLC (“Pumpdown”);

WTL Oil LLC (“WTL”), formerly known as Silverback Energy Services LLC;

Stingray Cementing LLC (“Cementing”);

Bison Sand Logistics LLC (“Bison Sand”);

Aquahawk Energy LLC (“Aquahawk”);

Ivory Freight Solutions LLC (“Ivory Freight”);

and IFX Transport LLC (“IFX”).

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.

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The Company’s natural sand proppant services include the distribution and production of natural sand proppant that is used primarily for hydraulic fracturing in the oil and gas industry.

The Company’s drilling services provide drilling rigs and directional tools for both vertical and horizontal drilling of oil and natural gas wells.

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

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

MAMMOTH ENERGY SERVICES, INC.

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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 Northern Alberta, Canada.

The Company operates 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 Northern Alberta, Canada.

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.

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

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.

Previously, the Company included Bison Drilling and Panther in its drilling reportable segment.

The Company now presents Bison Drilling and Panther in the “All Other” reconciling column.

On December 13, 2024, Anaconda Rentals, Aquahawk, Barracuda, Bison Sand, IFX, Ivory Freight, Coil Tubing, Redback Energy, Pumpdown, Stingray Cementing and WTL were merged into Orca.

Prior to 2024, Aquahawk, Bison Sand and Pumpdown were included in the Company’s well completion segment and Barracuda was included in the Company’s natural sand proppant services segment.

Due to the merger of these entities into Orca, the results for Aquahawk, Bison Sand, Pumpdown and Barracuda are now included in the reconciling column titled “All Other”.

The results for the years ended December 31, 2023 and 2022 have been retroactively adjusted to reflect these changes.

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

Change in Accounting Estimate

The Company is party to sale leaseback agreements whereby it has the option to purchase the assets at the end of the lease terms.

During the year ended December 31, 2024, the Company changed its estimate of the purchase price at the end of the leases.

The effect of this change in estimate for the year ended December 31, 2024 was a decrease to net income of $ 9.9 million, or $ 0.21 per both basic and diluted share.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Restricted cash as of December 31, 2024 consisted of amounts held by the Company’s lender as collateral for a letter of credit and bonds.

These amounts are expected to be released upon expiration of the corresponding letter of credit and bonds.

Restricted cash as of December 31, 2023 consisted of amounts held by the Company’s lender 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.

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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.

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.

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Most areas in the continental United States in which the Company operates provide for a mechanic’s lien against the property on which the service is performed if the lien is filed within the statutorily specified time frame.

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” in the consolidated statement of comprehensive loss when chargeable and collectability is reasonably assured.

Customer balances are generally considered delinquent if unpaid by the due date, which generally ranges from 30 to 60 days following the invoice date, and credit privileges may be revoked if balances remain unpaid.

Interest on delinquent trade accounts receivable is recognized in “other (expense) 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, 2024, 2023 and 2022, the Company charged interest on delinquent trade accounts receivable pursuant to the terms of its agreements with PREPA totaling $ 20.8 million, $ 45.4 million and $ 41.3 million, respectively.

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.

As discussed in more detail below, on July 22, 2024, Cobra entered into a release and settlement agreement with PREPA and the Financial Oversight and Management Board for Puerto Rico (the “FOMB”), in its capacity as Title III representative for PREPA, to settle all outstanding matters between Cobra and PREPA (the “Settlement Agreement”).

As a result of the Settlement Agreement, Cobra recognized a charge to interest on delinquent accounts receivable totaling $ 81.5 million during the three months ended June 30, 2024 to reduce its accounts receivable balance to the amount expected to be collected in relation to interest charged to PREPA.

These amounts are included in “other (expense) 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 were interest charges of $ 197.5 million.

See below for a full description of the Settlement Agreement and its impact on the Company’s financial statements for the year ended December 31, 2024.

As of December 31, 2024 and 2023, accounts receivable included receivables from contracts with customers totaling $ 69.3 million and $ 436.3 million, respectively.

Included in accounts receivable at each of December 31, 2024 and 2023, were receivables related to income taxes totaling $ 8.9 million.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Current Expected Credit Losses

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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 expected credit losses for the years ended December 31, 2024, 2023 and 2022 (in thousands):

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Change in provision for expected credit losses 3,550

Additions charged to revenue 27,071

Additions charged to other selling, general, and administrative expense 273

Additions charged to other, net - related parties 515

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

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

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Balance, December 31, 2024 $ 171,399

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.

The Company has made specific reserves consistent with Company policy which resulted in additions to allowance for expected credit losses totaling $ 171.5 million, a nominal amount and $ 3.6 million, respectively, for the years ended December 31, 2024, 2023 and 2022.

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.

The Company’s subsidiaries Stingray Pressure Pumping and Muskie were party to a pressure pumping contract and a sand supply contract, respectively, with Gulfport Energy Corporation (“Gulfport”).

On November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.

See Notes 3 and 20 for additional information.

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

Balance, January 1, 2022 11,714

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 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 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.

1 unchanged sentence

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.

PREPA is currently subject to bankruptcy proceedings, which were filed in July 2017 and are currently pending in the United States District Court for the District of Puerto Rico (the “Title III Court”).

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

Since September 30, 2019, Cobra has been pursuing litigation in the Title III Court 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 the Company’s prior reports filed with the SEC.

PREPA was holding approximately $ 18.4 million in funds (the “Withheld FEMA Funds”) received from FEMA and considered payable to Cobra but had been withheld due to garnishments asserted by three Puerto Rican municipalities (the “Specified Municipalities”) for certain municipal tax claims discussed in Mammoth’s filings with the SEC (the “Specified Municipal Tax Claims”) and for which Cobra disputed any valid garnishment.

On July 22, 2024, Cobra entered into a release and settlement agreement with PREPA and the FOMB, in its capacity as Title III representative for PREPA, to settle all outstanding matters between Cobra and PREPA.

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.

Under the terms of the Settlement Agreement, Cobra was allowed an administrative expense claim against PREPA of $ 170.0 million, plus the $ 18.4 million in the Withheld FEMA Funds.

Cobra’s allowed claim will be paid through three installments:

(i) $ 150.0 million on the later of (A) ten business days following approval of the Settlement Agreement by the Title III Court and (B) August 31, 2024;

(ii) $ 20.0 million within seven days following the effective date of PREPA’s plan of adjustment;

and (iii) $ 18.4 million (subject to providing one or more indemnity letters of credit) in the Withheld FEMA Funds within either (A) ten business days after the deadline for appealing the entry of the settlement order by the Title III Court under the applicable bankruptcy rules of procedure if no such appeal is filed, or (B) if the provisions of the settlement order allowing PREPA to release the Withheld FEMA Funds to Cobra without retaining any liability to the Specified Municipalities are appealed by the Specified Municipalities, within ten business days of the filing of the notice of such appeal.

The Settlement Agreement was approved by the Company’s Board of Directors on July 22, 2024, and was also approved

by the PREPA Board and by the FOMB.

On September 18, 2024, the Settlement Agreement was approved by the Title III Court overruling all objections thereto and an order was entered the same day (the “Settlement Order”).

On October 1, 2024, Cobra received the first installment payment of $ 150.0 million from the Commonwealth of Puerto Rico in connection with the Settlement Agreement with PREPA.

Also on October 1, 2024, certain Puerto Rico municipalities and Foreman Electric Services Inc.

that had objected to approval of the Settlement Order each filed timely notices of appeal of the Settlement Order to the United States Court of Appeals for the First Circuit.

None of the foregoing parties have sought a stay of the Settlement Order pending such appeals.

Although the ultimate outcome of these appeals cannot be predicted with certainty, Cobra believes that the appeals are without merit.

On October 18, 2024, Cobra received a payment from PREPA totaling $ 18.4 million under the terms of the Settlement Agreement.

In connection with the receipt of the $ 18.4 million from PREPA, Cobra instructed Fifth Third Bank, National Association (“Fifth Third Bank”) to issue a letter of credit to PREPA under the Reimbursement Agreement in the amount of $ 18.4 million and transferred a total of $ 19.3 million to a restricted cash account maintained by Fifth Third Bank as collateral for the letter of credit.

representing the amount owed to Cobra by PREPA in relation to these agreements as of June 30, 2024, including the

accrued but unpaid interest, prior to the Settlement Agreement, to the amount expected to be received from the Settlement Agreement.

Of the $ 170.7 million, $ 89.2 million was charged to credit loss expense, which is included in “selling, general and administrative” in the accompanying consolidated statement of comprehensive loss, and $ 81.5 million was charged to interest on delinquent accounts receivable, which is included in “other (expense) income, net” in the accompanying consolidated statement of comprehensive loss.

Complete performance of the Settlement Agreement is not met until PREPA satisfies the remaining $ 20.0 million payment.

Therefore, the Company recorded the $ 170.7 million as an allowance for expected credit losses.

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

Prepaid expenses primarily consist of insurance costs and rail car freight and lease expense.

Prepaid expenses primarily consist of insurance costs and lease expense.

These costs are expensed over the periods that they benefit.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Current Assets

Other current assets primarily consists of financed insurance premiums related to our insurance policies.

These costs are expensed over the terms of the policies.

Property and Equipment

22 unchanged sentences

Other Non-Current Assets

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).

Other non-current assets primarily consist of deferred financing costs on our revolving credit facility (see Note 11), our equity method investment (see Note 9) and capital contributions made to our group captive and protective cell captive insurance companies (see Note 20).

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.

15 unchanged sentences

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.

See Note 8 for additional disclosure related to intangible assets.

Fair Value of Financial Instruments

8 unchanged sentences

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.

The Company elected the fair value option for measuring the liability of the Assignment Agreement, as defined herein.

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.

6 unchanged sentences

The Company had $ 17.4 million and $ 12.7 million, respectively, of unbilled revenue included in “accounts receivable, net” in the accompanying consolidated balance sheets at December 31, 2024 and 2023.

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.

The Company had $ 2.3 million and $ 0.7 million of deferred revenue included in “accrued expenses and other current liabilities” in the accompanying consolidated balance sheets at December 31, 2024 and 2023.

Loss per Share

6 unchanged sentences

The Company’s stock-based compensation program consists of restricted stock units granted to employees and restricted stock units granted to non-employee directors under the Mammoth Energy Services, Inc.

2016 Incentive Plan, as amended (the “2016 Plan”).

2016 Equity Incentive Plan (the “2016 Plan”) and Mammoth Energy Services, Inc.

2024 Equity Incentive Plan (the “2024 Plan”).

The Company recognizes in its financial statements the cost of employee services received in exchange for restricted stock based on the fair value of the equity instruments as of the grant date.

28 unchanged sentences

Management has established procedures for the ongoing evaluation of the Company’s operations, to identify potential environmental exposures and to comply with regulatory policies and procedures.

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

Expenditures that relate to an existing

Environmental expenditures

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.

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.

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

1 unchanged sentence

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

During the year ended December 31, 2024, the Company made payments totaling $ 0.2 million to resolve this matter.

As of December 31, 2024, there were no probable environmental matters.

13 unchanged sentences

— % 9 % 10 % — % — %

Customer C (c)

— % — % — % 25 % 90 %

Customer A is a third-party customer.

1 unchanged sentence

Customer B is a third-party customer.

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

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

Revenues and the related accounts receivable balances earned from Customer B were derived from the Company’s well completion services segment.

Customer C is a third-party customer.

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

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

New Accounting Pronouncements

1 unchanged sentence

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.

The Company adopted this standard on December 31, 2024.

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

2 unchanged sentences

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.

Revenues from Contracts with Customers

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

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

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Certain of the Company’s customer contracts include provisions entitling the Company to a termination penalty when the customer invokes its contractual right to terminate prior to the contract’s nominal end date.

3 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

6 unchanged sentences

Generally, revenue is recognized over time upon the completion of each segment of work based upon a completed field ticket, which includes the charges for the services performed, mobilization of the equipment to the location and personnel.

Pursuant to a contract with Gulfport, Stingray Pressure Pumping agreed to provide Gulfport with use of up to two pressure pumping fleets for the period covered by the contract.

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 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.

Further, on November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.

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

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.

Stingray Pressure Pumping used the expected value method to estimate unliquidated damages totaling $ 37.9 million, which resulted in the recognition of net revenue totaling $ 14.8 million and bad debt expense of $ 2.9 million on previously recognized revenue during the three months ended March 31, 2021.

On September 21, 2021, the Company and Gulfport reached a settlement under which all litigation relating to the Stingray Pressure Pumping contract will be terminated.

Stingray Pressure Pumping released all claims against Gulfport and its subsidiaries with respect to Gulfport’s bankruptcy proceedings and each of the parties released all claims they had against the others with respect to the litigation matters discussed in Note 20.

As a result of this settlement agreement, during the three months ended September 30, 2021, the Company wrote off its remaining receivable related to the Stingray Pressure Pumping claim resulting in bad debt expense and other expense of $ 31.0 million and $ 1.3 million, respectively.

Gulfport was a related party until June 29, 2021.

On June 29, 2021, pursuant to the terms of its plan of reorganization, all of the Company’s shares that Gulfport owned were transferred to a trust for the benefit of certain of Gulfport’s creditors.

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

See Notes 13 and 20 below.

Additional revenue is generated through labor charges and the sale of consumable supplies that are incidental to the service being performed.

12 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.

3 unchanged sentences

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.

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

As of December 31, 2024, the Company had deferred revenue totaling $ 1.6 million related to shortfall payments.

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

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.

During the years ended December 31, 2024, 2023 and 2022, the Company recognized revenue totaling $ 4.5 million, $ 2.0 million and $ 3.1 million, respectively, related to shortfall payments.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

1 unchanged sentence

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 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.

On November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.

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

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.

Muskie used the expected value method to estimate unliquidated damages totaling $ 8.5 million, which resulted in the recognition of net revenue totaling $ 2.1 million and bad debt expense of $ 1.0 million on previously recognized revenue during the three months ended March 31, 2021.

On September 21, 2021, the Company and Gulfport reached a settlement under which all litigation relating to the Muskie contract was terminated, each of the parties released all claims they had against the others with respect to the litigation matters discussed in Note 20 and Muskie’s contract claim against Gulfport was allowed under Gulfport’s plan of reorganization in the amount of $ 3.1 million.

As a result of this settlement agreement, Muskie recognized bad debt expense of $ 0.2 million during the third quarter of 2021.

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.

See Notes 13 and 20 below.

Drilling Services

Contract drilling services were provided under daywork contracts.

Directional drilling services, including motor rentals, are provided on a day rate or hourly basis, and revenue is recognized as work progresses.

Performance obligations are satisfied over time as the work progresses based on the measure of output.

Mobilization revenue and costs were recognized over the days of actual drilling.

As a result of market conditions, the Company temporarily shut down its contract land drilling operations beginning in December 2019 and its rig moving operations beginning in April 2020.

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.

The Company also provides directional drilling services, aviation services, equipment rentals, crude oil hauling, remote accommodations and equipment manufacturing, which are reported under other services.

The Company’s other services are typically provided based upon a purchase order, contract or on a spot market basis.

3 unchanged sentences

Practical Expedients

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

3 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

6 unchanged sentences

Deduction for rebate credit recognized ( 506 )

Increase for deferral of shortfall payments 1,595

Increase for deferral of customer prepayments 643

4 unchanged sentences

As of December 31, 2024, the Company had unsatisfied performance obligations totaling $ 5.6 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.

On July 13, 2023, the Company sold all of the equity interest in its subsidiary ARS for $ 3.3 million in cash.

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

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

7 unchanged sentences

Total inventory $ 15,119 $ 12,653

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property, Plant and Equipment

15 unchanged sentences

Land improvements 15 years or life of lease

10,066 10,053

Rail improvements 10 - 20 years

13,445 13,793

Other property and equipment (b)

Other property and equipment (a)

15,010 15,171

695,523 695,742

Deposits on equipment and equipment in process of assembly (c)

Deposits on equipment and equipment in process of assembly (b)

704,444 704,412

accumulated depreciation (d)

accumulated depreciation (c)

589,362 590,507

Total property, plant and equipment, net $ 115,082 $ 113,905

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.

Included in Other property and equipment are costs of $ 3.1 million at each of December 31, 2024 and 2023, respectively, related to assets leased to customers 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.

2 unchanged sentences

Proceeds from customers for horizontal and directional drilling services equipment damaged or lost down-hole are reflected in revenue with the carrying value of the related equipment charged to cost of service revenues and are reported as cash inflows from investing activities in the statement of cash flows.

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.

For the years ended December 31, 2024, 2023 and 2022, total cash and accrued proceeds from the sale of equipment damaged or lost down-hole were $ 0.3 million, $ 0.4 million and $ 0.8 million, respectively, and gains on sales of equipment damaged or lost down-hole were $ 0.2 million, $ 0.3 million and $ 0.6 million, respectively.

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.

For the years ended

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024, 2023 and 2022, total cash and accrued proceeds from the sale of equipment were $ 5.5 million, $ 8.2 million and $ 10.0 million, respectively, and gains from the sale or disposal of equipment were $ 4.0 million, $ 6.0 million and $ 3.9 million, respectively.

A summary of depreciation, depletion, amortization and accretion expense is shown below (in thousands):

5 unchanged sentences

Depreciation, depletion, amortization and accretion $ 25,079 $ 45,110 $ 64,271

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impairment of Goodwill

3 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.

The Company performed the qualitative assessment described above during the fourth quarter of 2024.

Based on this assessment, the Company concluded that it was more likely than not that the fair value of each of the Company’s reporting units was greater than their carrying value.

Accordingly, no further testing was required and no impairment was recognized during the year ended December 31, 2024.

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

8 unchanged sentences

Accordingly, no further testing was required and no impairment was recognized during the year ended December 31, 2022.

The Company performed the qualitative assessment described above during the fourth quarter of 2021.

Based on this assessment, the Company concluded that it was more likely than not that the fair value of the Stingray Pressure Pumping, Silverback and Aviation reporting units was greater than their carrying value.

Accordingly, no further testing was required on these units.

Additionally, the Company concluded that the carrying value for its infrastructure reporting unit was greater than its fair value.

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

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

Impairment of Other Long-Lived Assets

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.

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 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.

8 unchanged sentences

Acquisitions — — —

Impairment losses — — —

Impairment losses (a)

— ( 1,810 ) ( 1,810 )

Dispositions — ( 693 ) ( 693 )

Balance as of December 31, 2023

3 unchanged sentences

Acquisitions — — —

Impairment losses (a)

— ( 1,810 ) ( 1,810 )

Impairment losses — — —

Dispositions — — —

10 unchanged sentences

Amortization expense for intangible assets was $ 0.7 million, $ 0.8 million and $ 0.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company recognized impairment of intangible assets totaling $ 1.2 million for the year ended December 31, 2021.

See Note 7 for a description of these impairment losses.

The original life of trade names is 10 years as of December 31, 2024 with a remaining average useful life of 2.5 years.

11 unchanged sentences

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.

The Company recorded equity method adjustments to its investment for its share of Brim Acquisitions’ income (loss) of $( 0.1 ) million, $ 0.7 million, and $ 0.1 million respectively, for the years ended December 31, 2024, 2023 and 2022, respectively, which is included in “other (loss) income, net” in the accompanying consolidated statements of comprehensive loss.

No additional investments were made during the years ended December 31, 2024, 2023 and 2022.

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Accrued Expenses and Other Current Liabilities

Financing arrangement, net (a)

State and local taxes payable $ 12,776 $ 13,111

Financed insurance premiums (b)

Financed insurance premiums (a)

Sale-leaseback liability (b)

Accrued compensation and benefits 2,542 5,558

Sale-leaseback liability (c)

Deferred revenue 2,337 663

Financing leases 2,068 1,702

Insurance reserves 1,507 1,277

Deferred revenue 663 7,550

Equipment financing note (d)

Financing arrangement, net (c)

Other 1,098 2,139

1 unchanged sentence

Other Long-Term Liabilities

Sale-leaseback liability (c)

$ 2,555 $ 6,836

Financing leases $ 6,521 $ 2,138

Equipment financing note (d)

Sale-leaseback liability (b)

Total other long-term liabilities $ 6,659 $ 4,715

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, 2024, the applicable interest rate associated with financed insurance premiums was 6.49 %.

As of December 31, 2023, the applicable interest rates associated with financed insurance premiums ranged from 6.60 % to 7.05 %.

On December 30, 2020, the Company entered into an agreement with First National Capital, LLC (“FNC”) whereby the Company agreed to sell certain assets from its infrastructure segment to FNC for aggregate proceeds of $ 5.0 million.

Concurrent with the sale of assets, the Company entered into a 36 -month lease agreement whereby the Company agreed to lease back the assets at a monthly rental rate of $ 0.1 million.

On December 30, 2023, this lease was extended 12 months.

On June 1, 2021, the Company entered into another agreement with FNC whereby the

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company sold additional assets from its infrastructure segment to FNC for aggregate proceeds of $ 9.5 million and entered into a 42 -month lease agreement whereby the Company agreed to lease back the assets at a monthly rental rate of $ 0.2 million.

On June 1, 2022, the Company entered into another agreement with FNC whereby the Company sold additional assets from its infrastructure segment to FNC for aggregate proceeds of $ 4.6 million and entered into a 42 -month lease agreement whereby the Company agreed to lease back the assets at a monthly rental rate of $ 0.1 million.

Under the agreements, the Company has the option to purchase the assets at the end of the lease terms, which caused it to fail true sale treatment.

As a result, the Company recorded liabilities for the proceeds received and will continue to depreciate the assets.

The Company has imputed an interest rate so that the carrying amount of the financial liabilities will be the expected repurchase price at the end of the lease terms.

During the year ended December 31, 2024, the Company changed its estimate of the purchase price at the end of the leases, resulting in a charge to interest expense and financing charges, net of $ 9.9 million.

During the fourth quarter of 2024, the Company purchased the assets under the June 1, 2021 and June 1, 2022 agreements for an aggregate purchase price of $ 10.9 million.

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

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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, 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 %.

Concurrent with the sale of assets, the Company entered into a 36 -month lease agreement whereby the Company will lease back the assets at a monthly rental rate of $ 0.1 million.

On June 1, 2021, the Company entered into another agreement with FNC whereby the Company sold additional assets from its infrastructure segment to FNC for aggregate proceeds of $ 9.5 million and entered into a 42 -month lease agreement whereby the Company agreed to lease back the assets at a monthly rental rate of $ 0.2 million.

Under the agreements, the Company has the option to purchase the assets at the end of the lease terms.

The Company recorded liabilities for the proceeds received and will continue to depreciate the assets.

The Company has imputed an interest rate so that the carrying amount of the financial liability will be the expected repurchase price at the end of the initial lease terms.

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 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 %.

This note was paid off on December 22, 2023.

Debt included the following (in thousands):

Revolving credit facility — —

Term credit facility 45,000 —

Term credit facility, including interest paid-in-kind — 45,000

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

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Total long-term debt $ — $ 42,809

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

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

Revolving Credit Facility and Term Credit Facility

On October 16, 2023, the Company entered into a revolving credit facility and a term credit facility (each as defined below), which refinanced in full the Company’s indebtedness outstanding under, and terminated, the amended and restated revolving credit facility, dated as of October 19, 2018, as amended (the “previous revolving credit facility”), with us and certain of our direct and indirect subsidiaries, as borrowers, the lenders party thereto from time to time, and PNC Bank, National Association, as a lender and as administrative agent for the lenders.

On October 16, 2023, 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, as may be subsequently amended (the “revolving credit facility”).

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

Borrowings under the 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 revolving credit facility.

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

Interest under the revolving credit facility equals the Tranche Rate (as defined in the revolving credit facility) plus (i) 1.75 %, if the Average Excess Availability Percentage (as defined in the 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%.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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;

As of December 31, 2024 and December 31, 2023, the financial covenant under the revolving credit facility was the fixed coverage ratio of 1.0 to 1.0 which applies only during the period from the date that excess availability under the revolving credit facility is less than the greater of (i) 10 % of total availability under the revolving credit facility and (ii) $ 5 million until the date in which the excess availability is equal to the greater of (i) 10 % of excess availability and (ii) $ 5 million for 30 consecutive days (such period, a “Financial Covenant Period”).

A Financial Covenant Period was not in effect as of each of December 31, 2024, December 31, 2023 and the filing date of this report.

At December 31, 2024, the revolving credit facility was undrawn, the borrowing base was $ 25.2 million, and there was $ 17.7 million of borrowing capacity under the facility, after giving effect to $ 7.5 million of outstanding letters of credit.

At December 31, 2023, the 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, 2024, the Company entered into (i) an amendment to the revolving credit agreement (the “Credit Agreement Amendment”) and (ii) a letter of credit reimbursement agreement (the “Reimbursement Agreement”), each with Fifth Third Bank.

The Credit Agreement Amendment, among other things, permits the transactions contemplated by the Reimbursement Agreement, including the issuance of one or more letters of credit to satisfy Cobra’s obligations under the Settlement Agreement relating to one or more indemnity letters of credit.

The aggregate amount of all such letters of credit shall not exceed $ 18.4 million.

Under the terms of the Reimbursement Agreement, the Company agreed to hold cash funds totaling at least 105 % of the stated amount of all letters of credit in an account maintained by Fifth Third Bank and to which Fifth Third Bank has a first priority security interest.

On October 18, 2024, Cobra received a payment from PREPA totaling $ 18.4 million under the terms of the Settlement Agreement.

In connection with the receipt of the $ 18.4 million from PREPA, Cobra instructed Fifth Third Bank to issue a letter of credit to PREPA under the Reimbursement Agreement in the amount of $ 18.4 million and transferred a total of $ 19.3 million to a restricted cash account maintained by Fifth Third Bank as collateral for the letter of credit.

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

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

The term credit facility contained various affirmative and restrictive covenants.

Interest under the term credit facility equaled the SOFR Interest Rate (as defined in the new term credit facility) plus 7.50 %;

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

In particular, under the term credit facility, the Company was 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 term credit facility, which was used to reduce outstanding borrowings under the term credit facility, as required under the terms thereof.

Wexford waived this requirement in connection with the Assignment Agreement and the $ 9.6 million received by Cobra from PREPA in February 2024.

At December 31, 2023, there were outstanding borrowings, including interest paid-in-kind, under the term credit facility of $ 45.0 million.

In connection with the receipt of the first installment amount under the Settlement Agreement on October 1, 2024, the Company paid, in full, all amounts owed under the term credit facility, including the accrued and unpaid interest, in the aggregate amount of $ 50.9 million, and terminated the facility on October 2, 2024.

In connection with the payoff of the term credit facility, Wexford waived the 1 % early termination penalty.

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, 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 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 revolving credit facility is currently scheduled to mature on October 16, 2028.

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

On November 6, 2020, Leopard and Cobra Aviation entered into a 39 -month promissory note agreement with Bank7 (the “Aviation Note”) in an aggregate principal amount of $ 4.6 million and received net proceeds of $ 4.5 million.

The Aviation Note bore interest at a rate based on the Wall Street Journal Prime Rate plus a margin of 1 %.

The Aviation Note was paid off on September 30, 2022.

Variable Interest Entities

27 unchanged sentences

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

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):

Included in the year ended December 31, 2024 amount is a charge of $ 89.2 million related to Cobra’s Settlement Agreement with PREPA.

Summary of Significant Accounting Policies—Accounts Receivable and —Concentrations of Credit Risk and Significant Customers and Note 20.

Commitments and Contingencies—Litigation included elsewhere in this report for additional information.

The components of income tax (benefit) provision attributable to the Company for the year ended December 31, 2024, 2023 and 2022, respectively, are as follows (in thousands):

Year Ended December 31,

1 unchanged sentence

current income tax expense $ 474 $ 715 $ 61

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

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

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

deferred income tax expense (benefit) 2,500 — ( 207 )

Foreign current income tax (benefit) expense ( 15,913 ) 13,269 5,846

Foreign deferred income tax expense (benefit) 1,735 ( 1,687 ) 7,907

Total $ ( 11,204 ) $ 12,297 $ 13,607

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):

1 unchanged sentence

2024 2023 2022

Income (loss) before income taxes $ 9,134 $ 12,988 $ ( 124,293 )

(Loss) income before income taxes $ ( 218,530 ) $ 9,134 $ 12,988

Statutory income tax rate 21 % 21 % 21 %

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

Expected income tax (benefit) expense ( 45,891 ) 1,918 2,727

Interest and penalties 3,493 2,269 1,677

Foreign income tax rate differential ( 28,291 ) 3,416 4,311

Foreign earnings (loss) not in reported income 5,188 1,565 ( 336 )

Foreign (loss) earnings not in reported income ( 35,996 ) 5,188 1,565

Foreign tax credits ( 166 ) ( 11,193 ) ( 3,646 )

7 unchanged sentences

The effective tax rate for the years ended December 31, 2024, 2023 and 2022 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.

Additionally, as a result of the Settlement Agreement with PREPA, during the year ended December 31, 2024, the Company reversed $ 19.9 million in withholding tax accruals related to undistributed earnings from Puerto Rico.

The Company recorded interest and penalties expense of $ 3.2 million, $ 1.8 million and $ 1.7 million during the years ended December 31, 2024, 2023 and 2022, respectively, related to the 2020, 2021, 2022 and 2023 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.

Additionally, the Company recorded interest expense of $ 0.3 million and $ 0.5 million during the years ended December 31, 2024 and 2023, respectively related to the 2019 tax year return in the United States.

MAMMOTH ENERGY SERVICES, INC.

3 unchanged sentences

Deferred tax assets:

Section 163(j) interest limitation $ 5,090 $ —

Lease asset 3,660 3,249

18 unchanged sentences

During the years ended December 31, 2024 and 2023, the Company recorded changes in its valuation allowance of $ 120.5 million and $ 8.1 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.

The Company has foreign tax credit carryforwards of $ 76.6 million as of December 31, 2024.

These credits have a 10-year carryforward period and begin to expire in 2028.

The Company maintains a partial valuation allowance related to U.S.

As of December 31, 2024, the Company has federal net operating loss and 163(j) interest limitation carryforwards of $ 197.8 million and $ 24.2 million, respectively, that have an indefinite life carryforward.

The Company has net operating loss carryforwards in Puerto Rico of $ 170.4 million that have a 10-year carryforward period and expire in 2034.

The Company maintains a full valuation allowance related to U.S.

foreign tax credit carryforwards, as it cannot objectively assert that these deferred tax assets are more likely than not to be realized.

The Company has a full valuation allowance on U.S.

tax attribute carryforwards to the extent not supported by existing deferred tax liabilities.

As result of the annual limitations for net operating loss carryforwards to offset only 80 percent of taxable income, the Company reflects the net deferred tax liability as of December 31, 2024.

The Company recorded the full valuation allowance with respect to the Puerto Rico net operating loss carryforwards as they are not more likely than not to be realized.

All available positive and negative evidence was weighed to determine whether a valuation allowance was necessary.

The more significant evidential matter is the higher foreign tax rate applied to foreign source income in comparison to the U.S.

Federal tax rate of 21%.

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.

At December 31, 2023, the Company had undistributed earnings in its Puerto Rico foreign branch.

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 $ 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.

The most significant evidential matter relates to recent cumulative loss position in the U.S.

and no projected benefit related to losses generated in Puerto Rico as of December 31, 2024.

At December 31, 2024, Mammoth has a foreign subsidiary in Canada with undistributed earnings.

These earnings are considered permanently reinvested, as it is the Company’s intention to reinvest these earnings in foreign operations.

Although we would not be subject to income tax in the U.S.

on these earnings, these amounts could be subject to withholding tax if distributed.

The Company has made no provision for tax related to these undistributed earnings.

The Company has recorded interest and penalties payable of $ 8.5 million and $ 5.0 million at December 31, 2024 and

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2023, respectively, related to the 2020, 2021, 2022 and 2023 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.

3 unchanged sentences

The Company’s state and local income tax returns for tax years 2018 through 2024 remain subject to examination, with few exceptions, by the respective tax authorities.

Puerto Rico tax returns for tax years 2018 through

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2023 and Canada tax returns for the tax years 2016 through 2023 remain open to examination by the respective tax authorities.

Puerto Rico tax returns for tax years 2019 through 2024 and Canada tax returns for the tax years 2017 through 2024 remain open to examination by the respective tax authorities.

Lessee Accounting

17 unchanged sentences

Total lease expense $ 8,915 $ 10,275

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental balance sheet information related to leases as of December 31, 2024 and 2023 is as follows (in thousands):

8 unchanged sentences

Other liabilities 6,521 2,138

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other supplemental information related to leases for the years ended December 31, 2024 and 2023 is as follows (in thousands):

23 unchanged sentences

Present value of lease payments $ 6,242 $ 8,589

Subsequent to December 31, 2024, the Company entered into 14 additional finance leases for trucks.

These agreements provide for aggregate fixed lease payments totaling $ 0.9 million with lease terms of three years .

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lessor Accounting

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.

Certain of the Company’s agreements with its customers for equipment rentals, 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.

2 unchanged sentences

The Company does not provide an option for the lessee to purchase the rented assets at the end of the lease and the lessees do not provide residual value guarantees on the rented assets.

During the years ended December 31, 2023, 2022 and 2021, the Company recognized lease revenue, which is included in “ services

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

During the years ended December 31, 2024, 2023 and 2022, the Company recognized lease revenue, which is included in “ services revenue ” and “services revenue - related parties” in the accompanying consolidated statements of comprehensive loss of $ 2.0 million, $ 3.2 million, and $ 3.3 million, respectively.

Loss Per Share

21 unchanged sentences

As a result, Payout did not occur and no compensation cost was recorded.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Payout for the remaining awards is expected to occur as the contribution member’s unreturned capital balance is recovered from additional sales by MEH Sub of its shares of the Company’s common stock or from dividend distributions, which is not considered probable until the event occurs.

2 unchanged sentences

Stock-Based Compensation

On April 29, 2024, the Board of Directors of Mammoth adopted the Mammoth Energy Services, Inc.

2024 Equity Incentive Plan (the “2024 Plan”), subject to stockholder approval, which approval was obtained at Mammoth’s 2024 Annual Meeting of Stockholders on June 12, 2024.

The 2024 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 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

There are a maximum of 2.1 million shares of common stock reserved for issuance under the 2024 Plan, of which 1.9 million shares of common stock remain available for future grants under the 2024 Plan as of December 31, 2024.

No new awards will be granted under the Company’s previous equity incentive plan after June 12, 2024.

Restricted Stock Units

1 unchanged sentence

This value is amortized over the vesting period.

Forfeitures are recognized as incurred.

A summary of the status and changes of the unvested shares of restricted stock under the 2016 Plan is presented below.

Number of Unvested Restricted Stock Units Weighted Average Grant-Date Fair Value

Unvested restricted stock units as of January 1, 2021 1,914,782 $ 1.21

A summary of the status and changes of the unvested shares of restricted stock is presented below.

Number of Unvested Restricted Shares Weighted Average Grant-Date Fair Value

Unvested shares as of January 1, 2022 1,128,205 $ 1.27

Granted 228,310 2.19

11 unchanged sentences

As of December 31, 2024, there was $ 0.6 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 1.7 years.

The cost is expected to be recognized over a weighted average period of approximately 10 months.

The total fair value of shares vested was $ 0.7 million, $ 4.1 million and $ 1.1 million, respectively, for the years ended December 31, 2024, 2023 and 2022.

Included in cost of revenue and selling, general and administrative expenses is stock-based compensation expense of $ 0.9 million, $ 1.3 million and $ 0.9 million, respectively, for the years ended December 31, 2024, 2023 and 2022.

Related Party Transactions

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

Grizzly Oil Sands ULC (“Grizzly”);

El Toro Resources LLC (“El Toro”);

Elk City Yard LLC (“Elk City Yard”);

Caliber Investment Group LLC (“Caliber”);

and Brim Equipment.

Following is a summary of related party transactions (in thousands):

Years Ended December 31, At December 31,

2023 2022 2021 2023 2022

REVENUES ACCOUNTS RECEIVABLE

Stingray Pressure Pumping and Gulfport (a) $ — $ — $ 14,812 $ — $ —

Muskie and Gulfport (b) — — 2,145 — —

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

$ 980 $ 1,133 $ 17,939 $ 47 $ 223

OTHER ACCOUNTS RECEIVABLE

Stingray Pressure Pumping and Gulfport (a) $ — $ — $ 514 $ — $ —

Muskie and Gulfport (b) — — 1 — —

$ — $ — $ 515 $ — $ —

Transactions between the subsidiaries of the Company, including Panther, Cobra Aviation, ARS and Leopard and the following companies are included in Related Party Transactions:

Wexford, El Toro Resources LLC (“El Toro”), Elk City

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stingray Pressure Pumping provided pressure pumping, stimulation and related completion services to Gulfport.

Other amount represents interest charged on delinquent accounts receivable related to these services.

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

Muskie agreed to sell and deliver, and Gulfport has agreed to purchase, specified annual and monthly amounts of natural sand proppant, subject to certain exceptions specified in the agreement, and pay certain costs and expenses.

Other amount represents interest charged on delinquent accounts receivable related to this agreement.

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.

Panther provides directional drilling services for El Toro, an entity controlled by Wexford, pursuant to a master service agreement.

COST OF REVENUE ACCOUNTS PAYABLE

Years Ended December 31, At December 31,

2023 2022 2021 2023 2022

Cobra Aviation/ARS/Leopard and Brim Equipment (a) 7 77 73 — 3

The Company and Caliber (b) 361 357 351 — —

Other Relationships 107 107 107 — —

$ 475 $ 541 $ 531 $ — $ 3

SELLING, GENERAL AND ADMINISTRATIVE COSTS

The Company and Wexford (c) — — 5 — —

The Company and Caliber (b) — — 374 — —

Other Relationships — — 8 — —

$ — $ — $ 387 $ — $ —

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

Caliber, an entity controlled by Wexford, leases office space to the Company.

Wexford provides certain administrative and analytical services to the Company and, from time to time, the Company pays for goods and services on behalf of Wexford.

Yard LLC (“Elk City Yard”), Double Barrel Downhole Technologies LLC (“DBDHT”), Caliber Investment Group LLC (“Caliber”) and Brim Equipment.

For the years ended December 31, 2024, 2023 and 2022, revenue from related party transactions was $ 1.5 million, $ 1.0 million and $ 1.1 million, respectively, and costs incurred from related party transactions was $ 0.4 million, $ 0.5 million and $ 0.5 million, respectively.

At December 31, 2024 and December 31, 2023, accounts receivable from related party transactions was $ 0.4 million and a nominal amount, respectively, which is included in “accounts receivable”, in the accompanying consolidated balance sheets.

There was no accounts payable for related party transactions at December 31, 2024, and 2023, respectively.

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.

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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.

Under this agreement, the Company had outstanding debt, including interest paid-in kind and net of debt discount and debt issuance costs, of $ 42.8 million as of December 31, 2023.

Additionally, the Company incurred interest expense under this agreement totaling $ 4.7 million and $ 1.2 million for the years ended December 31, 2024 and 2023, respectively.

On October 2, 2024, the Company paid, in full, all amounts owed under the term credit facility and terminated the facility.

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

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The Company did not have any unconditional purchase obligations as of December 31, 2024.

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Letters of Credit

The Company has various letters of credit that were issued under the Company’s revolving credit facility which is collateralized by substantially all of the assets of the Company.

The letters of credit are categorized below (in thousands):

Environmental remediation $ 3,782 $ 3,694

Insurance programs 2,500 2,800

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

The Company had outstanding letters of credit related to environmental remediation and insurance programs that were issued under the Company’s revolving credit facility, which is collateralized by substantially all of the assets of the Company, totaling $ 7.5 million and $ 6.3 million as of December 31, 2024 and 2023, respectively.

Additionally, as of December 31, 2024, the Company had an outstanding letter of credit related to its Settlement Agreement with PREPA totaling $ 18.4 million, which is cash collateralized at Fifth Third Bank for $ 19.3 million.

The Company has insurance coverage for physical partial loss to its assets, employer’s liability, automobile liability, commercial general liability, workers’ compensation and insurance for other specific risks.

The Company has also elected in some cases to accept a greater amount of risk through increased deductibles on certain insurance policies.

As of December 31, 2023 and 2022, the workers’ compensation and automobile liability policies required a deductible per occurrence of up to $ 0.3 million and $ 0.1 million, respectively.

The Company establishes liabilities for the unpaid deductible portion of claims incurred based on estimates.

At each of December 31, 2024 and 2023, the workers’ compensation policy required a deductible per occurrence of up to $ 0.3 million.

At December 31, 2024 and 2023, the Company’s primary automobile liability policy required a deductible per occurrence of up to $ 0.5 million and $ 0.1 million, respectively.

As of December 31, 2024 and 2023, the workers’ compensation and auto liability policies contained an aggregate stop loss of $ 5.4 million.

The Company establishes liabilities for the unpaid deductible portion of claims incurred relating to workers’ compensation and auto liability based on estimates.

Effective November 1, 2024, the Company became party to a deductible reimbursement insurance policy from a protected cell captive insurance company that covers losses between the $ 0.5 million deductible under its primary auto liability policy and $ 0.1 million.

Also effective November 1, 2024, the Company became a member of a group captive insurance company that covers one layer of its auto liability coverage.

The Company establishes liabilities for the unpaid deductible portion of claims incurred based on estimates.

As of December 31, 2024 and 2023, accrued claims were $ 1.5 million and $ 1.3 million, respectively.

The Company also has insurance coverage for directors and officers liability.

As of December 31, 2023 and 2022, the directors and officers liability policy had a deductible per occurrence of $ 1.0 million and an aggregate deductible of $ 10.0 million.

As of December 31, 2024 and 2023, the directors and officers liability policy had a deductible per occurrence of $ 1.0 million and an aggregate deductible of $ 10.0

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024 and 2023, the Company did not have any accrued claims for directors and officers liability.

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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, 2024.

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

At December 31, 2024 and 2023, accrued claims were $ 2.3 million and $ 1.5 million, respectively.

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

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The estimated cost to complete projects secured by the performance and payment bonds totaled $ 7.2 million and $ 2.5 million as of December 31, 2024 and 2023, 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, 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.

PREPA, however, 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 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 motion by June 7, 2021.

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

Following this filing, PREPA initiated discussion, 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 release 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 extended the stay and directed that an additional status report be filed, which was done 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 first-level administrative appeals of the November 21, 2022 and December 21, 2022.

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 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.

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

There were $ 0.2 million in outstanding bid bonds as of December 31, 2024 and 2023, respectively.

Cobra and PREPA previously entered into two agreements to aid in the restoration and reconstruction of Puerto Rico’s power grid in response to damage caused by Hurricane Maria in 2017.

PREPA is currently subject to bankruptcy proceedings, which were filed in July 2017 and are currently pending in the Title III Court.

As a result, PREPA’s ability to meet its payment obligations under the above-referenced agreements was largely dependent upon funding from FEMA or other sources.

PREPA was holding approximately $ 18.4 million in Withheld FEMA Funds received from FEMA and considered payable to Cobra but had been withheld due to garnishments asserted by three Puerto Rican municipalities for certain municipal tax claims discussed below and for which Cobra disputed any valid garnishment.

Under the terms of the Settlement Agreement, Cobra was allowed an administrative expense claim against PREPA of $ 170.0 million, plus the $ 18.4 million in the Withheld FEMA Funds.

Cobra’s allowed claim is payable through three installments:

(i) $ 150.0 million on the later of (A) ten business days following approval of the Settlement Agreement by the Title III Court and (B) August 31, 2024;

(ii) $ 20.0 million within seven days following the effective date of PREPA’s plan of adjustment;

and (iii) $ 18.4 million in the Withheld FEMA Funds within either (A) ten business days after the deadline for appealing the entry of the settlement order by the Title III Court under the applicable bankruptcy rules of procedure if no such appeal is filed, or (B) if the provisions of the settlement order allowing PREPA to release the Withheld FEMA Funds to Cobra without retaining any liability to the Specified Municipalities are appealed by the Specified Municipalities, within ten business days of the filing of the notice of such appeal.

In exchange for the settlement payments and conditioned upon the effectiveness and full implementation of the Settlement Agreement, Cobra has agreed to release and waive any further claim against PREPA under its two agreements with PREPA.

Further, if PREPA pays 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.

These matters were automatically stayed as a result of Gulfport’s bankruptcy filing on November 13, 2020, seeking voluntary relief under chapter 11 of the Bankruptcy Code.

Gulfport emerged from bankruptcy on May 17, 2021.

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

During the first quarter of 2021, the Company recognized unliquidated damages of approximately $ 46.4 million and recorded reserves on these unliquidated damages as a reduction to revenue of $ 27.1 million and to bad debt expense of $ 3.8 million.

Also during the first quarter of 2021, the Company recorded additional reserves on its pre-petition products and services and interest receivables of $ 6.1 million and $ 0.5 million, respectively.

On September 21, 2021, the Company and Gulfport reached a settlement under which all litigation relating to the Stingray Pressure Pumping contract and the Muskie contract was terminated, Stingray Pressure Pumping released all claims against Gulfport and its subsidiaries with respect to Gulfport’s bankruptcy proceedings, each of the parties released all claims they had against the others with respect to the litigation matters discussed above and Muskie retained an allowed general unsecured claim against Gulfport of $ 3.1 million.

As a result, during 2021, the Company wrote off its remaining receivable related to the Stingray Pressure Pumping claim resulting in bad debt expense and other expense of $ 31.0 million and $ 1.3 million, respectively, and recorded additional bad debt expense related to the Muskie claim totaling $ 0.2 million.

Withheld FEMA Funds to Cobra following the notice of appeal described above, Cobra agreed to indemnify and hold PREPA harmless, as well as to provide PREPA with one or more indemnity letters of credit, solely for any payment(s) PREPA is subsequently required to make pursuant to the Specified Municipalities on account of the Specified Municipal Tax Claims if such order is entered as a result of (i) any reversal on appeal of the settlement order with respect to the FEMA Withheld Funds and/or (ii) the Puerto Rico Court of First Instance or other court of competent jurisdiction enters such order after a diligent challenge by PREPA (including through enforcement of the order approving Settlement Agreement if in effect).

Any such indemnity obligation will in no event exceed the amount of the Withheld FEMA Funds paid to and received by Cobra.

The Settlement Agreement was approved by the Company’s Board of Directors on July 22, 2024, and was also approved by the PREPA Board and by the FOMB.

On September 18, 2024, the Settlement Agreement was approved by the Title III Court overruling all objections thereto and an order was entered the same day (the “Settlement Order”).

On October 1, 2024, Cobra received the first installment payment of $ 150.0 million from the Commonwealth of Puerto Rico in connection with the Settlement Agreement with PREPA.

Also on October 1, 2024, certain Puerto Rico municipalities and Foreman Electric Services Inc.

that had objected to approval of the Settlement Order each filed timely notices of appeal of the Settlement Order to the United States Court of Appeals for the First Circuit.

None of the foregoing parties have sought a stay of the Settlement Order pending such appeals.

Although the ultimate outcome of these appeals cannot be predicted with certainty, Cobra believes that the appeals are without merit.

On October 18, 2024, Cobra received a payment from PREPA totaling $ 18.4 million under the terms of the Settlement Agreement.

As a result of the Settlement Agreement, the Company recorded a non-cash, pre-tax charge of approximately $ 170.7 million in the second quarter of 2024 to reduce its accounts receivable balance from PREPA of $ 359.1 million, representing the amount owed to Cobra by PREPA in relation to these agreements as of June 30, 2024, including the accrued but unpaid interest, prior to the Settlement Agreement, to the amount expected to be received from the Settlement Agreement.

On January 21, 2020, MasTec Renewables Puerto Rico, LLC (“MasTec”) filed a lawsuit against Mammoth Inc.

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and Cobra in the Oklahoma County District Court (Oklahoma State Court).

The petition asserted claims against the Company and Cobra under federal RICO statutes and certain state-law causes of action.

The petition asserted claims against the Company and Cobra under federal Racketeer Influenced and Corrupt Organizations Act (“RICO”) statutes and certain state-law causes of action.

Foreman alleged that it sustained injuries to its business and property in the amount of $ 250 million due to the Company’s and Cobra’s alleged wrongful interference by means of inducements to a FEMA official.

On May 18, 2021, the Company removed this action to the United States District Court for the Western District of Oklahoma and filed a motion to dismiss on July 8, 2021.

On May 18, 2021,

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the Company removed this action to the United States District Court for the Western District of Oklahoma and filed a motion to dismiss on July 8, 2021.

On July 29, 2021, Foreman voluntarily dismissed the action without prejudice.

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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.

The defendants moved to dismiss the Amended Petition, which was denied 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.

On April 29, 2024, the Court denied that motion.

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

moved to dismiss the complaint.

On September 15, 2023, Straehla and Layton moved to dismiss the complaint.

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

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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.

During 2024, the Company recognized an estimated liability related to these complaints, which is included in “accounts payable” in the accompanying consolidated balance sheets.

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

The Company is routinely involved in state and local tax audits.

8 unchanged sentences

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 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, on March 20, 2023, the Court confirmed the imposition of approximately $ 8.5 million related to construction excise taxes.

6 unchanged sentences

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.

In connection with the Settlement Agreement entered into with PREPA, PREPA (including through the Puerto Rico Fiscal Agency and Financial Advisory Authority, as fiscal agent for PREPA, and the FOMB) has agreed to cooperate with Cobra and assist in resolving the construction excise and volume of business taxes assessed against Cobra.

There is no guarantee, however, that the Company, including with PREPA’s cooperation, will be successful in favorably resolving or mitigating these taxes.

Accordingly, 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.

On April 16, 2019, Christopher Williams, a former employee of Higher Power Electrical, LLC, filed a putative class and collective action complaint titled Christopher Williams, individually and on behalf of all others similarly situated v.

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The plaintiff alleges the defendant failed to pay overtime wages to a class of workers in compliance with the Fair Labor Standards Act and Puerto Rico law.

On August 21, 2019, upon request of the parties, the Court stayed proceedings in the lawsuit and administratively closed the case pending completion of individual arbitration proceedings initiated by Mr.

On August 21, 2019, upon request of the parties, the Court stayed

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

proceedings in the lawsuit and administratively closed the case pending completion of individual arbitration proceedings initiated by Mr.

Zeisset and opt-in plaintiffs.

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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.

During 2023 and 2024, the Company recognized an estimated liability related to these complaints, which is included in “accounts payable” in the accompanying consolidated balance sheets.

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

5 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

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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 .

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 .

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 .

1 unchanged sentence

The Company does not expect any additional activity in the criminal proceeding.

Given the uncertainty inherent in criminal litigation, however, it is not possible at this time to determine the potential impacts that the sentencings could have on the Company.

PREPA has stated in Court filings that it may contend the alleged criminal activity affects Cobra’s entitlement to payment under its contracts with PREPA.

It is unclear what PREPA’s position will be going forward.

Subsequent to the indictment, Cobra received a civil investigative demand (“CID”) from the United States Department of Justice (“DOJ”), which requests certain documents and answers to specific interrogatories relevant to an ongoing investigation it is conducting.

The aforementioned DOJ investigation is in connection with the issues raised in the criminal matter.

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.

Cobra fully cooperated with the DOJ but is not able to predict the outcome of this investigation, or even if it still active, or if so, whether 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 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.

Craig Charles, Julian Calderas, Jr., and AL Global Services, LLC v.

Jim Jorrie v.

Cobra Acquisitions LLC v.

ESPADA Logistics & Security Group, LLC, ESPADA Caribbean LLC, Arty Straehla, Ken Kinsey, Jennifer Jorrie, and Mammoth Energy Services, Inc., in the 57th Judicial District in Bexar County, Texas.

The petition alleges that the Company should be held vicariously liable under alter ego, agency and respondeat superior theories for Alpha Lobo’s alleged claims against Cobra and Arty Straehla for aiding and abetting, knowing participation in and conspiracy to breach fiduciary duty in connection with Cobra’s execution of an agreement with ESPADA Caribbean, LLC for security services related to Cobra’s work in Puerto Rico.

The trial court granted Cobra, Mammoth and Straehla’s motion to compel Alpha Lobo’s claims against them to arbitration.

However, Alpha Lobo has not yet brought its claims in arbitration.

Instead, on March 22, 2022, Alpha Lobo filed a Petition for Writ of Mandamus in the Fourth Court of Appeals, San Antonio, Texas, seeking to overturn the order compelling arbitration.

The appellate court denied the Mandamus on May 4, 2022, without requesting a response.

On June 28, 2022, Alpha Lobo filed a Petition for Writ of Mandamus in the Texas Supreme Court, seeking to overturn the order compelling arbitration.

The Texas Supreme Court denied the Mandamus on August 5, 2022, without requesting a response.

Alpha Lobo has not yet brought its claims in arbitration.

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

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

Additionally, there was a parallel arbitration proceeding in which certain Defendants were seeking a declaratory judgment regarding Cobra’s rights to terminate the Alpha Lobo contract and enter into a new contract with a third-party.

On June 24, 2021, the arbitration panel ruled in favor of Cobra.

The Company is involved in various other legal proceedings in the ordinary course of business.

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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,

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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.

Further, under the term loan and security agreement with Wexford, Mammoth was 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.

In connection with the Assignment Agreement, Wexford waived this requirement.

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

2 unchanged sentences

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.

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During the three months ended March 31, 2024, 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 Company recognized a financing charge totaling $ 5.5 million during the three months ended March 31, 2024 related to the termination of the Assignment Agreement, which is included in “interest expense and financing charges, net” in the accompanying consolidated statement of comprehensive loss.

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.

Wexford waived the requirement to mandatorily remit to Wexford up to 50 % of all PREPA Claim proceeds in relation to the $ 9.6 million.

Defined contribution plan

5 unchanged sentences

Reporting Segments

As of December 31, 2023, the Company’s revenues, income before income taxes and identifiable assets are primarily attributable to four reportable segments.

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 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.

Segment evaluation is determined on a quantitative basis based on a function of operating income (loss) less impairment expense, as well as a qualitative basis, such as nature of the product and service offerings and types of customers.

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

MAMMOTH ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Segment evaluation is determined on a quantitative basis based on a function of Adjusted EBITDA, as well as a qualitative basis, such as nature of the product and service offerings and types of customers.

The Company defines Adjusted EBITDA as net loss before depreciation, depletion, amortization and accretion, gains or losses on disposal of assets, net, impairment of goodwill, stock based compensation, interest expense and financing charges, net, other expense (income), net (which is comprised of interest on trade accounts receivable and certain legal expenses) and (benefit) provision for income taxes, further adjusted to add back interest on trade accounts receivable.

The Company’s significant segment expenses include cost of revenue and selling, general and administrative expense.

As of December 31, 2024, the Company had three reportable segments, which includes well completion services (“Well Completion”), infrastructure services (“Infrastructure”) and natural sand proppant services (“Sand”).

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 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 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.

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”.

Based on its assessment of FASB ASC 280, Segment Reporting , guidance at December 31, 2024, the Company changed its presentation in 2024 to move Bison Drilling and Panther Drilling, which were previously included in the Company’s drilling services reportable segment, to the reconciling column titled “All Other”.

On December 13, 2024, Anaconda Rentals, Aquahawk, Barracuda, Bison Sand, IFX, Ivory Freight, Coil Tubing, Redback Energy, Redback Pumpdown, Stingray Cementing and WTL were merged into Orca.

Prior to 2024, Aquahawk, Bison Sand and Redback Pumpdown were included in the Well Completion segment, Barracuda was included in the Sand segment and the remainder of the entities were included in the reconciling column titled “All Other”.

Due to the merger of these entities into Orca, the results for Aquahawk, Bison Sand, Redback Pumpdown and Barracuda are now included in the reconciling column titled “All Other”.

The results for the years ended December 31, 2023 and 2022 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.

The Company also provides directional drilling, aviation services, equipment rental services, remote accommodation and equipment manufacturing services.

The businesses that provide these services are distinct operating segments, which the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 FASB ASC 280 .

8 unchanged sentences

Transactions conducted by companies within the same reporting segment are eliminated within each reporting segment.

Corporate selling, general and administrative costs are allocated to each segment based on forecasted revenue, expense and asset base.

Corporate interest expense is allocated to each segment based on its inter-company payable position with the Company’s corporate entity.

US income tax expense is not allocated to each segment.

Foreign income tax expense is realized in the segment in which the foreign operations occur.

The following tables set forth certain financial information with respect to the Company’s reportable segments (in thousands):

Year Ended December 31, 2023 Well Completion Infrastructure Sand Drilling All Other Eliminations Total

Year Ended December 31, 2024 Well Completion Infrastructure Sand All Other Eliminations Total

Revenue from external customers $ 33,622 $ 110,383 $ 19,026 $ 24,901 $ — $ 187,932

4 unchanged sentences

Total cost of revenue 38,761 92,132 17,790 29,040 ( 6,972 ) 170,751

Selling, general and administrative 7,212 22,078 3,655 746 3,767 — 37,458

Selling, general and administrative, exclusive of stock based compensation 4,389 111,068 4,195 4,294 — 123,946

Interest on trade accounts receivable — ( 60,686 ) — — — ( 60,686 )

Adjusted EBITDA ( 9,135 ) ( 153,503 ) ( 2,928 ) ( 1,885 ) — ( 167,451 )

Reconciliation of net (loss) income to Adjusted EBITDA:

Net (loss) income ( 21,886 ) ( 166,089 ) ( 8,496 ) ( 10,855 ) — ( 207,326 )

Depreciation, depletion, amortization and accretion 10,889 2,774 5,228 6,188 — 25,079

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

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

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

Losses (gains) on disposal of assets, net 52 ( 1,304 ) 1 ( 2,763 ) — ( 4,014 )

Stock based compensation 180 462 145 88 — 875

Interest expense and financing charges, net 1,628 21,590 186 1,800 — 25,204

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

Other expense, net 2 64,535 8 76 — 64,621

(Benefit) provision for income taxes — ( 14,785 ) — 3,581 — ( 11,204 )

Interest on trade accounts receivable — ( 60,686 ) — — — ( 60,686 )

Adjusted EBITDA ( 9,135 ) ( 153,503 ) ( 2,928 ) ( 1,885 ) — ( 167,451 )

Total expenditures for property, plant and equipment $ 12,730 $ 2,815 $ — $ 913 $ 607 $ 17,065

As of December 31, 2024:

Intangible assets, net $ 619 $ 105 $ — $ — $ 189 $ — $ 913

Total assets $ 61,728 $ 150,531 $ 118,855 $ ( 97,525 ) $ 150,442 $ 384,031

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31, 2022 Well Completion Infrastructure Sand Drilling All Other Eliminations Total

Year Ended December 31, 2023 Well Completion Infrastructure Sand All Other Eliminations Total

Revenue from external customers $ 126,932 $ 110,537 $ 39,106 $ 32,917 $ — $ 309,492

4 unchanged sentences

Total cost of revenue 105,062 90,627 25,666 28,979 ( 2,494 ) 247,840

Selling, general and administrative 8,642 19,147 7,171 606 3,988 — 39,554

Selling, general and administrative, exclusive of stock based compensation 6,371 21,540 3,432 4,770 — 36,113

Interest on trade accounts receivable — 45,440 — — — 45,440

Adjusted EBITDA 15,939 43,810 10,033 1,197 — 70,979

Reconciliation of net (loss) income to Adjusted EBITDA:

Net (loss) income ( 2,043 ) 8,237 1,824 ( 11,181 ) — ( 3,163 )

Depreciation, depletion, amortization and accretion 15,374 8,390 7,737 13,609 — 45,110

Gains on disposal of assets, net ( 2,023 ) ( 510 ) ( 13 ) ( 3,495 ) — ( 6,041 )

Operating income (loss) 11,791 ( 14,720 ) ( 1,206 ) ( 5,636 ) ( 6,647 ) — ( 16,418 )

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

Stock based compensation 496 538 186 125 — 1,345

Interest expense and financing charges, net 4,133 9,753 317 1,993 — 16,196

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

Other expense (income), net 2 ( 39,252 ) ( 18 ) ( 2,747 ) — ( 42,015 )

Provision for income taxes — 11,214 — 1,083 — 12,297

Interest on trade accounts receivable — 45,440 — — — 45,440

Adjusted EBITDA 15,939 43,810 10,033 1,197 — 70,979

Total expenditures for property, plant and equipment $ 17,921 $ 716 $ 223 $ 432 $ 103 $ 19,395

As of December 31, 2023:

Intangible assets, net $ 1,307 $ 135 $ — $ — $ 340 $ — $ 1,782

Total assets $ 49,926 $ 462,429 $ 121,201 $ ( 40,156 ) $ 105,079 $ 698,479

Year Ended December 31, 2021 Well Completion Infrastructure Sand Drilling All Other Eliminations Total

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31, 2022 Well Completion Infrastructure Sand All Other Eliminations Total

Revenue from external customers $ 165,645 $ 111,452 $ 48,916 $ 36,073 $ — $ 362,086

4 unchanged sentences

Total cost of revenue 124,444 91,649 35,985 31,637 ( 5,128 ) 278,587

Selling, general and administrative 49,275 18,267 5,351 803 4,550 — 78,246

Selling, general and administrative, exclusive of stock based compensation 7,765 18,798 6,988 5,080 — 38,631

Interest on trade accounts receivable — 41,276 — — — 41,276

Adjusted EBITDA 34,032 42,281 8,418 1,413 — 86,144

Reconciliation of net income (loss) to Adjusted EBITDA:

Net income (loss) 12,870 4,933 ( 886 ) ( 17,536 ) — ( 619 )

Depreciation, depletion, amortization and accretion 20,129 16,171 8,714 19,257 — 64,271

Gains on disposal of assets, net ( 618 ) ( 795 ) ( 89 ) ( 2,406 ) — ( 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 ) ( 8,921 ) ( 13,749 ) — ( 123,041 )

Stock based compensation 369 349 118 87 — 923

Interest expense and financing charges, net 1,625 7,390 575 1,916 — 11,506

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 )

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

Provision for income taxes — 13,427 — 180 — 13,607

Interest on trade accounts receivable — 41,276 — — — 41,276

Adjusted EBITDA 34,032 42,281 8,418 1,413 — 86,144

Total expenditures for property, plant and equipment $ 11,421 $ 885 $ 88 $ 496 $ ( 153 ) $ 12,737

As of December 31, 2022:

Intangible assets, net $ 1,995 $ 165 $ — $ — $ 401 $ — $ 2,561

Total assets $ 79,022 $ 450,841 $ 129,566 $ 14,813 $ 50,436 $ 724,678

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Geographic Areas

12 unchanged sentences

Total $ 195,444 $ 199,710 $ 227,986

Subsequent Events

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