MAMMOTH ENERGY SERVICES, INC. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Control and Procedures Under the direction of our Chief Executive Officer and Chief Financial Officer, we have established disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. 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 74 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 There was no change in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) that occurred during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. As of December 31, 2024, management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation, management did not identify any material weaknesses in our internal control over financial reporting and determined that we maintained effective internal control over financial reporting as of December 31, 2024. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Grant Thornton LLP, the independent registered public accounting firm that audited the consolidated financial statements of the Company included in this Annual Report on Form 10-K, has issued their report on the effectiveness of the Company’s internal control over financial reporting at December 31, 2024. The report, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting at December 31, 2024, is included in this Item under the heading “Report of Independent Registered Public Accounting Firm”. 75 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders Mammoth Energy Services, Inc. Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Mammoth Energy Services, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2024, and our report dated March 7, 2025 expressed an unqualified opinion on those financial statements. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP Oklahoma City, Oklahoma March 7, 2025 76 Item 9B. Other Information 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. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 77 PART III. Item 10. Directors, Executive Officers and Corporate Governance Information required by Item 10 of Part III is incorporated herein by reference to the 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. We have adopted a Code of Business Conduct and Ethics that applies to directors and employees, including the Chief Executive Officer, the Chief Financial Officer, controller and persons performing similar functions. The Code of Business Conduct and Ethics is posted on our website at http://ir.mammothenergy.com/corporate-governance.cfm. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Business Conduct and Ethics by posting such information on our website at the address specified above. Item 11. Executive Compensation 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. Item 12. 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 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. Item 13. 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 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. Item 14. 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. 78 PART IV. Item 15. Exhibits and Financial Statement Schedules The following documents are filed as part of this report or incorporated by reference herein: (1) Financial Statements Page Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) 1 Consolidated Balance Sheets 2 Consolidated Statements of Comprehensive Loss 3 Consolidated Statements of Changes in Equity 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 7 (2) Financial Statement Schedules All financial statement schedules have been omitted because they are not applicable or the required disclosure is presented in the financial statements or notes thereto. (3) Exhibits Exhibit Number Exhibit Description 3.1 Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-37917), filed with the SEC on November 15, 2016). 3.2 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-37917), filed with the SEC on November 15, 2016). 3.3 First Amendment to Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-37917), filed with the SEC on June 9, 2020). 4.1 Description of Securities of the Company (incorporated by reference to Exhibit 4.1 to the Company ’ s Annual Report on Form 10-K (File No. 001-37917), filed with the SEC on March 2, 2020). 4.2 Specimen Certificate for shares of common stock, par value $0.01 per share, of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Amendment No. 2 to the Registration Statement on Form S-1/A (File No. 333-213504), filed with the SEC on October 3, 2016). 4.3 Registration Rights Agreement, dated October 12, 2016, by and between the Company and Mammoth Energy Holdings, LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-37917), filed with the SEC on November 15, 2016). 10.1* N810LA Helicopter Lease Extension Agreement, dated as of January 1, 2025 by and between Cobra Aviation Services LLC and Brim Equipment Leasing LLC. 10.2* N904AF Helicopter Lease Extension Agreement, dated as of January 1, 2025 by and between Leopard Aviation LLC and Brim Equipment Leasing LLC. 10.3 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. 001-37917), filed with the SEC on November 15, 2016). 10.4 Mammoth Energy Securities, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-37917), filed with the SEC on November 15, 2016). 10.5 Form of Option Agreement (incorporated by reference to Exhibit 10.12 to the Company’s Amendment No. 1 to the Registration Statement on Form S-1/A (File No. 333-213504), filed with the SEC on September 23, 2016). 10.6 Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.13 to the Company’s Amendment No. 1 to the Registration Statement on Form S-1/A (File No. 333-213504), filed with the SEC on September 23, 2016). 10.7† Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.14 to the Company’s Amendment No. 2 to the Registration Statement on Form S-1/A (File No. 333-213504), filed with the SEC on October 3, 2016). 10.8 Emergency Master Service Agreement for PREPA’s Electrical Grid Repairs-Hurricane Maria, executed on October 19, 2017, by the Puerto Rico Electric Power Authority (PREPA) and Cobra Acquisitions LLC (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 001-37917), filed with the SEC on November 14, 2017). 10.9 Amendment No. 1 to Emergency Master Service Agreement for PREPA’s Electrical Grid Repairs-Hurricane Maria, executed on November 1, 2017, by the Puerto Rico Electric Power Authority (PREPA) and Cobra Acquisitions LLC (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 001-37917), filed with the SEC on November 14, 2017). 10.10 Amendment No. 2 to Emergency Master Service Agreement for PREPA’s Electrical Grid Repairs-Hurricane Maria, dated as of December 8, 2017, between the Puerto Rico Electric Power Authority (PREPA) and Cobra Acquisitions LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-37917), filed with the SEC on January 31, 2018). 79 10.11 Amendment No. 3 to Emergency Master Service Agreement for PREPA’s Electrical Grid Repairs-Hurricane Maria, dated December 21, 2017, between the Puerto Rico Electric Power Authority (PREPA) and Cobra Acquisitions LLC (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (File No. 001-37917), filed with the SEC on January 31, 2018). 10.12 Amendment No. 4 to Emergency Master Service Agreement for PREPA’s Electrical Grid Repairs-Hurricane Maria, dated as of January 28, 2018, between the Puerto Rico Electric Power Authority (PREPA) and Cobra Acquisitions LLC (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (File No. 001-37917), filed with the SEC on January 31, 2018). 10.13 Amendment No. 5 to Emergency Master Service Agreement for PREPA's Electrical Grid Repairs-Hurricane Maria, dated as of February 27, 2018, between the Puerto Rico Electric Power Authority (PREPA) and Cobra Acquisitions LLC (incorporated by reference to Exhibit 10.34 to the Company ’ s Annual Report on Form 10-K (File No. 001-37917), filed with the SEC on February 28, 2018). 10.14 Master Service Contract for PREPA's Electrical Grid Repairs Hurricane Maria, executed on May 26, 2018, by the Puerto Rico Electric Power Authority (PREPA) and Cobra Acquisitions LLC (incorporated by reference to Exhibit 10.1 to the Company ’ s Current Report on Form 8-K (File No. 001-37917), filed with the SEC on May 31, 2018). 10.15 N810LA Helicopter Lease Agreement, dated as of January 10, 2020 and effective as of January 1, 2020, by and between Cobra Aviation LLC and Brim Equipment Leasing LLC (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 001-37917), filed with the SEC on May 11, 2020). 10.16 N904AF Helicopter Lease Agreement, dated as of January 10, 2020 and effective as of January 1, 2020, by and between Leopard Aviation LLC and Brim Equipment Leasing LLC (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (File No. 001-37917), filed with the SEC on May 11, 2020). 10.17 First Amendment to the Mammoth Energy Services, Inc. 2016 Equity Incentive Plan (incorporated by reference to Appendix A to the Company's Definitive Proxy Statement on Schedule 14A, filed with the SEC on June 10, 2020). 10.18 Revolving Credit Agreement, dated as of October 16, 2023, by and among Mammoth Energy Services, Inc., as borrower, certain of its direct and indirect subsidiaries, as guarantors, the lenders from time to time party thereto, and Fifth Third Bank, National Association, as agent, letters of credit issuer and swing line lender. 10.19 Loan and Security Agreement, dated as of October 16, 2023, by and among Mammoth Energy Services, Inc., as borrower, certain of its direct and indirect subsidiaries, as guarantors, the lenders from time to time party thereto and Wexford Capital LP, as agent for lenders. 10.20 Assignment Agreement, dated as of December 1, 2023, between Cobra Acquisitions LLC, as seller, Mammoth Energy Services, Inc. as guarantor, and SPCP Group, LLC, as purchaser. 10.21 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). 10.22 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). 19.1* Mammoth Energy Services Inc. Insider Trading and Unauthorized Disclosure of Information Policy 19.2* Mammoth Energy Services Inc. Supplemental Insider Trading Policy 21.1* List of Significant Subsidiaries of the Company. 23.1* John T. Boyd Company Consent. 23.2* Consent of Grant Thornton LLP with respect to the financial statements of Mammoth Energy Services Inc. 31.1* Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended. 31.2* Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended. 32.1** Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code. 32.2** Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code. 95.1* Mine Safety Disclosure Exhibit. 96.1 Technical Report Summary for Piranha and Taylor Mines prepared by John T. Boyd Company (incorporated by reference to Exhibit 96.1 to the Company's Annual Report on Form 10-K (File No. 001-37917) filed with the SEC on March 4, 2022). 97.1 Mammoth Energy Services, Inc. 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. 101.SCH* XBRL Taxonomy Extension Schema Document. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* XBRL Taxonomy Extension Labels Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. * Filed herewith. ** Furnished herewith, not filed. + Management contract, compensatory plan or arrangement. 80 MAMMOTH ENERGY SERVICES, INC. Item 16. Form 10-K Summary None. 81 Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MAMMOTH ENERGY SERVICES, INC. Date: March 7, 2025 By: /s/ Mark Layton Mark Layton Chief Financial Officer Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /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 Mark Layton /s/ Arthur Amron Director (Chairman of the Board) March 7, 2025 Arthur Amron /s/ James D. Palm Director March 7, 2025 James D. Palm /s/ Paul Jacobi Director March 7, 2025 Paul Jacobi /s/ Arthur Smith Director March 7, 2025 Arthur Smith /s/ Corey Booker Director March 7, 2025 Corey Booker 82 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders Mammoth Energy Services, Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Mammoth Energy Services, Inc. (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 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 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 We have served as the Company’s auditor since 2012. Oklahoma City, Oklahoma March 7, 2025 F-1 MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED BALANCE SHEETS ASSETS December 31, 2024 2023 CURRENT ASSETS (in thousands) Cash and cash equivalents $ 60,967 $ 16,556 Restricted cash 21,359 7,742 Accounts receivable, net 79,020 447,202 Inventories 15,119 12,653 Prepaid expenses 1,780 1,931 Other current assets 10,342 10,841 Total current assets 188,587 496,925 Property, plant and equipment, net 115,082 113,905 Sand reserves, net 57,273 58,528 Operating lease right-of-use assets 6,417 9,551 Goodwill 9,214 9,214 Deferred income tax asset — 1,844 Other non-current assets 7,458 8,512 Total assets $ 384,031 $ 698,479 LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable $ 32,459 $ 27,508 Accrued expenses and other current liabilities 33,940 86,713 Accrued expenses and other current liabilities - related parties — 1,241 Current operating lease liability 3,450 5,771 Income taxes payable 44,658 61,320 Total current liabilities 114,507 182,553 Long-term debt from related parties — 42,809 Deferred income tax liabilities 3,021 628 Long-term operating lease liability 2,792 3,534 Asset retirement obligations 4,234 4,140 Other long-term liabilities 6,659 4,715 Total liabilities 131,213 238,379 COMMITMENTS AND CONTINGENCIES (Note 20) EQUITY Equity: Common stock, $ 0.01 par value, 200,000,000 shares authorized, 48,127,369 and 47,941,652 issued and outstanding at December 31, 2024 and 2023 481 479 Additional paid in capital 540,431 539,558 Accumulated deficit ( 283,643 ) ( 76,317 ) Accumulated other comprehensive loss ( 4,451 ) ( 3,620 ) Total equity 252,818 460,100 Total liabilities and equity $ 384,031 $ 698,479 The accompanying notes are an integral part of these consolidated financial statements. F-2 MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Years Ended December 31, 2024 2023 2022 REVENUE (in thousands, except per share amounts) Services revenue $ 167,358 $ 269,227 $ 311,968 Services revenue - related parties 1,548 980 1,133 Product revenue 19,026 39,285 48,985 Total revenue 187,932 309,492 362,086 COST AND EXPENSES Services cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $ 19,848 , $ 37,356 and $ 55,564 , respectively, for 2024, 2023, and 2022) 151,474 219,876 241,323 Services cost of revenue - related parties (exclusive of depreciation, depletion, amortization and accretion of $ 0 , $ 0 and $ 0 , respectively, for 2024, 2023, and 2022) 366 475 541 Product cost of revenue (exclusive of depreciation, depletion, amortization and accretion of $ 5,228 , $ 7,734 and $ 8,707 , respectively, for 2024, 2023, and 2022) 18,911 27,489 36,723 Selling, general and administrative (Note 13) 124,821 37,458 39,554 Depreciation, depletion, amortization and accretion 25,079 45,110 64,271 Gains on disposal of assets, net ( 4,014 ) ( 6,041 ) ( 3,908 ) Impairment of goodwill — 1,810 — Total cost and expenses 316,637 326,177 378,504 Operating loss ( 128,705 ) ( 16,685 ) ( 16,418 ) OTHER INCOME (EXPENSE) Interest expense and financing charges, net ( 20,497 ) ( 14,955 ) ( 11,506 ) Interest expense and financing charges, net - related parties ( 4,707 ) ( 1,241 ) — Other (expense) income, net ( 64,621 ) 42,015 40,912 Total other income (expense) ( 89,825 ) 25,819 29,406 Income (loss) before income taxes ( 218,530 ) 9,134 12,988 Provision (benefit) for income taxes ( 11,204 ) 12,297 13,607 Net loss $ ( 207,326 ) $ ( 3,163 ) $ ( 619 ) OTHER COMPREHENSIVE LOSS Foreign currency translation adjustment, net of tax of $ 0 , $ 0 and $ 0 , respectively, for 2024, 2023, and 2022 ( 831 ) 221 ( 910 ) Comprehensive loss $ ( 208,157 ) $ ( 2,942 ) $ ( 1,529 ) Net loss per share (basic and diluted) (Note 16) $ ( 4.31 ) $ ( 0.07 ) $ ( 0.01 ) Weighted average number of shares outstanding, basic and diluted (Note 16) 48,065 47,777 47,175 The accompanying notes are an integral part of these consolidated financial statements. F-3 MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Accumulated Additional Other Common Stock Retained Paid-In Comprehensive Shares Amount Deficit Capital Loss Total (in thousands) Balance at January 1, 2022 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 ) Balance at December 31, 2022 47,312 $ 473 $ ( 73,154 ) $ 539,138 $ ( 3,841 ) $ 462,616 Stock based compensation 795 8 — 1,337 — 1,345 Shares repurchased ( 166 ) ( 2 ) ( 917 ) ( 919 ) Net loss — — ( 3,163 ) — — ( 3,163 ) Other comprehensive income — — — — 221 221 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. F-4 MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2024 2023 2022 Cash flows from operating activities (in thousands) Net loss $ ( 207,326 ) $ ( 3,163 ) $ ( 619 ) Adjustments to reconcile net loss to cash provided by (used in) operating activities: Stock based compensation 875 1,345 923 Depreciation, depletion, amortization and accretion 25,079 45,110 64,271 Amortization of financing origination costs 3,131 1,288 777 Change in provision for expected credit losses 171,517 ( 591 ) 3,389 Gains on disposal of assets, net ( 4,014 ) ( 6,041 ) ( 3,908 ) Gains from sales of equipment damaged or lost down-hole ( 157 ) ( 335 ) ( 604 ) Impairment of goodwill — 1,810 — Gain on sale of business — ( 2,080 ) — Deferred income taxes 4,237 ( 1,687 ) 7,700 Other 160 ( 693 ) ( 117 ) Changes in assets and liabilities: Accounts receivable, net 195,639 11,275 ( 52,527 ) Inventories ( 2,563 ) ( 3,770 ) ( 517 ) Prepaid expenses and other assets 195 354 ( 710 ) Accounts payable 2,675 ( 18,485 ) 6,680 Accrued expenses and other liabilities 3,277 ( 6,949 ) ( 15,272 ) Accrued expenses and other liabilities - related parties 4,647 1,241 — Income taxes payable ( 16,655 ) 12,757 5,800 Net cash provided by operating activities 180,717 31,386 15,266 Cash flows from investing activities: Purchases of property and equipment ( 17,065 ) ( 19,395 ) ( 12,737 ) Business divestitures, net of cash transferred — 3,276 — Proceeds from disposal of property and equipment 6,633 7,333 10,613 Net cash used in investing activities ( 10,432 ) ( 8,786 ) ( 2,124 ) Cash flows from financing activities: Borrowings on long-term debt — 201,091 197,975 Borrowings on long-term debt - related parties — 43,874 — 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 Payments on sale-leaseback transaction ( 12,407 ) ( 4,958 ) ( 4,429 ) Principal payments on financing leases and equipment financing notes ( 1,944 ) ( 12,212 ) ( 4,306 ) Debt issuance costs ( 37 ) ( 3,972 ) — Other — ( 919 ) — Net cash used in financing activities ( 112,113 ) ( 15,586 ) ( 5,601 ) Effect of foreign exchange rate on cash ( 144 ) 2 ( 158 ) Net increase (decrease) in cash, cash equivalents and restricted cash 58,028 7,016 7,383 Cash, cash equivalents and restricted cash at beginning of period 24,298 17,282 9,899 Cash, cash equivalents and restricted cash at end of period $ 82,326 $ 24,298 $ 17,282 The accompanying notes are an integral part of these consolidated financial statements. F-5 MAMMOTH ENERGY SERVICES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2024 2023 2022 Supplemental disclosure of cash flow information: (in thousands) Cash paid for interest $ 15,526 $ 12,017 $ 10,164 Cash paid for income taxes, net of refunds received $ 1,173 $ 897 $ 106 Supplemental disclosure of non-cash transactions: 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 The accompanying notes are an integral part of these consolidated financial statements. F-6 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Basis of Presentation The accompanying consolidated financial statements were prepared in accordance with the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments, which in the opinion of management are necessary for the fair presentation of the results. Mammoth Energy Services, Inc. (“Mammoth Inc.”, “Mammoth” or the “Company”), together with its subsidiaries, is an integrated, growth-oriented company serving both the oil and gas and the electric utility industries in North America and US territories. 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 completions and natural sand proppant services. Additionally, the Company provides aviation services, equipment rentals, remote accommodation services and equipment manufacturing. The Company was incorporated in Delaware in June 2016. The following companies (“Operating Entities”) are included in these consolidated financial statements: Bison Drilling and Field Services, LLC (“Bison Drilling”), formed November 2010; Bison Trucking LLC (“Bison Trucking”), formed August 2013; Mr. Inspections LLC (“MRI”), formed January 2015; Panther Drilling Systems LLC (“Panther”), formed December 2012; Muskie Proppant LLC (“Muskie”), formed September 2011; Stingray Pressure Pumping LLC (“Stingray Pressure Pumping”), acquired November 2014; Silverback Energy LLC (“Silverback”), formerly known as Stingray Logistics LLC, acquired November 2014; Great White Sand Tiger Lodging Ltd. (“Sand Tiger”), formed October 2007; Mammoth Energy Partners LLC, formed October 2016; Mammoth Equipment Leasing LLC, formed November 2016; Cobra Acquisitions LLC (“Cobra”), formed January 2017; Lion Power Services LLC (“Lion Power”), formerly known as Cobra Energy LLC, formed January 2017; Mako Acquisitions LLC (“Mako”), formed March 2017; Piranha Proppant LLC (“Piranha”), formed March 2017; Higher Power Electrical LLC (“Higher Power”), acquired April 2017; Stingray Energy Services LLC (“SR Energy”), acquired June 2017; Sturgeon Acquisitions LLC (“Sturgeon”), acquired June 2017; Taylor Frac, LLC (“Taylor Frac”), acquired June 2017; Taylor Real Estate Investments, LLC (“Taylor RE”), acquired June 2017; South River Road, LLC (“South River”), acquired June 2017; 5 Star Electric, LLC (“5 Star”), acquired July 2017; Tiger Shark Logistics LLC (“Tiger Shark”), formed October 2017; Cobra Aviation Services LLC (“Cobra Aviation”), formed January 2018; Dire Wolf Energy Services LLC (“Dire Wolf”), formed January 2018; Black Mamba Energy LLC (“Black Mamba”), formed March 2018; Stingray Cementing and Acidizing LLC (“Stingray Cementing and Acidizing”), formerly known as RTS Energy Services LLC (“RTS”), acquired June 2018; Orca Energy Services LLC (“Orca”), formed June 2018; Python Equipment LLC (“Python”), formed December 2018; Air Rescue Systems LLC (“ARS”), acquired December 2018 and sold July 2023; Leopard Aviation LLC (“Leopard”), formed April 2019; Predator Aviation LLC (“Predator Aviation”), formed April 2019; Anaconda Manufacturing LLC (“Anaconda”), formed July 2019; Aquawolf LLC (“Aquawolf”), formed September 2019; and Falcon Fiber Solutions LLC (“Falcon”), formed March 2021. On July 13, 2023, the Company sold all of its equity interests in ARS. Activity for ARS through the date of sale is included in the accompanying consolidated financial statements. 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”). Operations 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. The Company’s infrastructure services include engineering, design, construction, upgrade, maintenance and repair services to the electrical infrastructure industry as well as repair and restoration services in response to storms and other disasters. 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 also provides other services, including directional drilling, aviation, equipment rentals, remote accommodations and equipment manufacturing. F-7 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company’s operations are concentrated in North America. 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. Any prolonged increase or decrease in oil and natural gas prices affects the levels of exploration, development and production activity, as well as the entire health of the oil and natural gas industry. Decreases in the commodity prices for oil and natural gas would have a material adverse effect on the Company’s results of operations and financial condition. During the periods presented in this report, the Company provided its infrastructure services primarily in the northeastern, southwestern, midwestern and western portions of the United States. The Company’s infrastructure business depends on infrastructure spending on maintenance, upgrade, expansion and repair and restoration. Any prolonged decrease in spending by electric utility companies, delays or reductions in government appropriations or the failure of customers to pay their receivables could have a material adverse effect on the Company’s results of operations and financial condition. 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements are prepared in accordance with GAAP and include the accounts of the Company and its subsidiaries and the variable interest entities (“VIE”) for which the Company is the primary beneficiary. All material intercompany accounts and transactions between the entities within the Company have been eliminated. Variable Interest Entities The Company consolidates a VIE when it is determined to be the primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. See Note 12 for more information on the Company’s VIEs. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, the Company’s sand reserves and their impact on calculating depletion expense, allowance for expected credit losses, fair values used to assess recoverability and impairment of long-lived assets, including goodwill, estimates of income taxes and the estimated effects of litigation and other contingencies. Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation. Previously, the Company included 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. F-8 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 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. At December 31, 2024, the Company had $ 4.0 million, in Canadian dollars, of cash in Canadian accounts. Cash balances from time to time may exceed the insured amounts; however, the Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risks on such accounts. The 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. December 31, 2024 2023 Cash and cash equivalents $ 60,967 $ 16,556 Restricted cash 21,359 7,742 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 82,326 $ 24,298 Accounts Receivable Accounts receivable include amounts due from customers for services performed or goods sold. The Company grants credit to customers in the ordinary course of business and generally does not require collateral. Prior to granting credit to customers, the Company analyzes the potential customer’s risk profile by utilizing a credit report, analyzing macroeconomic factors and using its knowledge of the industry, among other factors. 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 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. 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. F-9 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Allowance for Current Expected Credit Losses The Company regularly reviews receivables and provides for expected losses through an allowance for expected credit losses. In evaluating the level of established reserves, the Company makes judgments regarding its customers’ ability to make required payments, economic events and other factors. As the financial condition of customers changes, circumstances develop, or additional information becomes available, adjustments to the allowance for expected credit losses may be required. In the event the Company expects that a customer may not be able to make required payments, the Company would increase the allowance through a charge to income in the period in which that determination is made. If it is determined that previously reserved amounts are collectible, the Company would decrease the allowance through a credit to income in the period in which that determination is made. Uncollectible accounts receivable are periodically charged against the allowance for expected credit losses once a final determination is made regarding their collectability. Following is a roll forward of the allowance for expected credit losses for the years ended December 31, 2024, 2023 and 2022 (in thousands): Balance, January 1, 2022 $ 18,085 Change in provision for expected credit losses 3,550 Recoveries of receivables previously charged to credit loss expense ( 161 ) Write-offs charged against the provision ( 17,887 ) Balance, December 31, 2022 3,587 Change in provision for expected credit losses 47 Recoveries of receivables previously charged to credit loss expense ( 638 ) Write-offs charged against the provision ( 2,831 ) Balance, December 31, 2023 165 Change in provision for expected credit losses 171,539 Recoveries of receivables previously charged to credit loss expense ( 22 ) Write-offs charged against the provision ( 283 ) 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 $ 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. PREPA On October 19, 2017, one of our subsidiaries, Cobra, and PREPA entered into an emergency master services agreement for repairs to PREPA’s electrical grid as a result of Hurricane Maria. The one-year contract, as amended, provided for payments of up to $ 945 million (the “first contract”). On May 26, 2018, Cobra and PREPA entered into a second one-year, $ 900 million master services agreement to provide additional repair services and begin the initial phase of reconstruction of the electrical power system in Puerto Rico (the “second contract”). 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. F-10 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. 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. 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 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. Inventory is stated at the lower of cost or market (net realizable value) on an average cost basis. The Company assesses the valuation of its inventories based upon specific usage, future utility, obsolescence and other factors. Inventory manufactured at the Company’s sand production facilities includes direct excavation costs, processing costs and overhead allocation. Stockpile tonnages are calculated by measuring the number of tons added and removed from the stockpile. Costs are calculated on a per ton basis and are applied to the stockpiles based on the number of tons in the stockpile. Inventory transported for sale at the Company’s terminal facility includes the cost of purchased or manufactured sand, plus transportation related charges. See Note 5 for additional disclosure related to inventory. Prepaid Expenses Prepaid expenses primarily consist of insurance costs and lease expense. These costs are expensed over the periods that they benefit. F-11 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 Property and equipment, including renewals and betterments, are capitalized and stated at cost, while maintenance and repairs that do not increase the capacity, improve the efficiency or safety, or improve or extend the useful life are charged to operations as incurred. Disposals are removed at cost, less accumulated depreciation, and any resulting gain or loss is recorded in operations. Depreciation is calculated using the straight-line method over the shorter of the estimated useful life, or the remaining lease term, as applicable. Depreciation does not begin until property and equipment is placed in service. Once placed in service, depreciation on property and equipment continues while being repaired, refurbished, or between periods of deployment. Sand Reserves Sand reserve costs include engineering, mineralogical studies and other related costs to develop the mine, the removal of overburden to initially expose the mineral and building access ways. Exploration costs are expensed as incurred and classified as product cost of revenue. Capitalization of mine development project costs begins once the deposit is classified as proven and probable reserves. Drilling and related costs are capitalized for deposits where proven and probable reserves exist and the activities are directed at obtaining additional information on the deposit or converting non-reserve minerals to proven and probable reserves and the benefit is to be realized over a period greater than one year. Mining property and development costs are amortized using the units-of-production method on estimated measured tons in in-place reserves. The impact of revisions to reserve estimates is recognized on a prospective basis. Impairment of Long-Lived Assets The Company reviews long-lived assets for recoverability in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 360, Impairment or Disposal of Long-Lived Assets , which requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. These evaluations for impairment are significantly impacted by estimates of revenues, costs and expenses and other factors. If long-lived assets are considered to be impaired, the impairment to be recognized is measured by the amount in which the carrying amount of the assets exceeds the fair value of the assets. See Note 7 for additional disclosure related to impairment of long-lived assets. Goodwill Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that goodwill might be impaired. If it is determined that an impairment exists, an impairment charge is recognized for the excess of carrying value over implied fair value. The fair value is determined using a combination of the income and market approaches. See Note 7 and Note 8 for additional disclosures related to goodwill. Other Non-Current Assets Other non-current assets primarily consist of deferred financing costs on our 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. Under the equity method, the Company recognizes its share of the investee’s earnings in its consolidated statements of comprehensive loss. Investments are evaluated for impairment and a charge to earnings is recognized when any identified impairment is determined to be other than temporary. Asset Retirement Obligations Mine reclamation costs, future remediation costs for inactive mines and other contractual site remediation costs are accrued based on management’s best estimate at the end of each period of the costs expected to be incurred at a site. Such cost estimates include, where applicable, ongoing care, maintenance and monitoring costs. Changes in estimates are reflected in earnings in the period an estimate is revised. F-12 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Following is a roll forward of the Company’s asset retirement obligations for the years ended December 31, 2024 and 2023 (in thousands): December 31, 2024 2023 Balance as of beginning of period $ 4,140 $ 3,981 Additions and revisions of prior estimates — — Accretion expense 161 141 Foreign currency translation adjustment ( 67 ) 18 Asset retirement obligation as of end of period $ 4,234 $ 4,140 Amortizable Intangible Assets Intangible assets subject to amortization include trade names, which are amortized over their estimated useful lives. See Note 8 for additional disclosure related to intangible assets. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. The Company uses appropriate valuation techniques based on available inputs to measure the fair values of its assets and liabilities. Level 1 - Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 - Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company elected the fair value option for measuring the liability of the Assignment Agreement, 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. The Company used the contractual settlement amount, imputed interest rate and expected timing of cash flows to estimate the liability as of December 31, 2023 using the discounted cash flow model. See Notes 10 and 20. The carrying amount of cash and cash equivalents, restricted cash, trade receivables, trade payables and receivables and payables from related parties approximates fair value because of the short-term nature of the instruments. The fair value of debt approximates it s carrying value because the cost of borrowing fluctuates based upon market conditions. Revenue Recognition The timing of revenue recognition may differ from contract billing or payment schedules, resulting in revenues that have been earned but not billed (“unbilled revenue”) or amounts that have been billed, but not earned (“deferred revenue”). The Company had $ 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 $ 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 Loss per share is computed by dividing net loss by the weighted average number of outstanding shares. See Note 16. F-13 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Equity-based Compensation The Company measures equity-based payments at fair value on the date of grant and expenses the value of these equity-based payments in compensation expense over the applicable vesting periods. See Note 17. Stock-based Compensation 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 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. In general, this value is amortized over the vesting period; for grants with a non-substantive service condition, this value is recognized immediately. Amounts are recognized in cost of revenue and selling, general and administrative expenses. See Note 18. Income Taxes The Company’s operations are included in a consolidated federal income tax return and other state returns. Accordingly, the Company has recognized deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases for all our subsidiaries as if each entity were a corporation, regardless of its actual characterization for U.S. federal income tax purposes. Under FASB ASC 740, Income Taxes , deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of deferred tax assets and liabilities as a result of a change in tax rate are recognized in the period that includes the statutory enactment date. A valuation allowance for deferred tax assets is recognized when it is more likely than not that the benefit of deferred tax assets will not be realized. To assess that likelihood, the Company uses estimates and judgments regarding future taxable income, as well as the jurisdiction in which such taxable income is generated, to determine whether a valuation allowance is required. Certain income from our infrastructure services segment and income from our remote accommodations business is subject to foreign income taxes, and such taxes are provided in the financial statements pursuant to FASB ASC 740 . The Company evaluates tax positions taken or expected to be taken in preparation of its tax returns and disallows the recognition of tax positions that do not meet a “more likely than not” threshold of being sustained upon examination by the taxing authorities. The Company has recorded interest and penalty payable of $ 8.5 million and $ 5.0 million at December 31, 2024 and 2023, respectively, related to the 2022 and 2023 tax year returns in Puerto Rico. It is the Company’s policy to recognize interest and applicable penalties in income tax expense. Litigation and Contingencies Accruals for litigation and contingencies are reflected in the consolidated financial statements based on management’s assessment, including advice of legal counsel, of the expected outcome of litigation or other dispute resolution proceedings and/or the expected resolution of contingencies. Liabilities for estimated losses are accrued if the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated. Significant judgment is required in both the determination of probability of loss and the determination as to whether the amount is reasonably estimable. Accruals are based only on information available at the time of the assessment due to the uncertain nature of such matters. As additional information becomes available, management reassesses potential liabilities related to pending claims and litigation and may revise its previous estimates. See Note 20. Foreign Currency Translation For foreign operations, assets and liabilities are translated at the period-end exchange rate and income statement items are translated at the average exchange rate for the period. Resulting translation adjustments are recorded within accumulated other comprehensive loss. Assets and liabilities denominated in foreign currencies, if any, are re-measured at the balance sheet date. Transaction gains or losses are included as a component of current period earnings. Environmental Matters The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. 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 F-14 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. The Company maintains insurance which may cover in whole or in part certain environmental expenditures. 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. Other Comprehensive Loss Comprehensive loss consists of net loss and other comprehensive loss. Other comprehensive loss included certain changes in equity that are excluded from net loss. Specifically, cumulative foreign currency translation adjustments are included in accumulated other comprehensive loss. Concentrations of Credit Risk and Significant Customers Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents in excess of federally insured limits and trade receivables. Following is a summary of our significant customers based on accounts receivable balances at December 31, 2024 and 2023 and revenues derived for the years ended December 31, 2024, 2023 and 2022: REVENUES ACCOUNTS RECEIVABLE Years Ended December 31, At December 31, 2024 2023 2022 2024 2023 Customer A (a) 6 % 3 % 5 % 11 % 1 % Customer B (b) — % 9 % 10 % — % — % Customer C (c) — % — % — % 25 % 90 % a. Customer A is a third-party customer. Revenues and the related accounts receivable balances earned from Customer A were derived from the Company’s well completion services segment. b. Customer B is a third-party customer. Revenues and the related accounts receivable balances earned from Customer B were derived from the Company’s well completion services segment. c. 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 In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280)”, which is intended to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. The amendment requires disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”) as well as other segment items, extends certain annual disclosures to interim periods, clarifies the applicability to single reportable segment entities, permits more than one measure of profit or loss to be reported under certain conditions and requires disclosure of the title and position of the CODM. The Company adopted this standard on December 31, 2024. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied on a prospective basis, with a retrospective option. The Company is currently evaluating the impact that adoption of ASU 2023-09 will have on its disclosures. 3. 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. F-15 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. The termination penalties in the customer contracts vary, but are generally considered substantive for accounting purposes and create enforceable rights and obligations throughout the stated duration of the contract. The Company accounts for a contract cancellation as a contract modification in the period in which the customer invokes the termination provision. The determination of the contract termination penalty is based on the terms stated in the related customer agreement. 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. Well Completion Services Well completion services are typically provided based upon a purchase order, contract or on a spot market basis. Services are provided on a day rate, contracted or hourly basis. Generally, the Company accounts for well completion services as a single performance obligation satisfied over time. In certain circumstances, the Company supplies proppant that is utilized for pressure pumping as part of the agreement with the customer. The Company accounts for these pressure pumping agreements as multiple performance obligations satisfied over time. Jobs for these services are typically short-term in nature and range from a few hours to multiple days. 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. Additional revenue is generated through labor charges and the sale of consumable supplies that are incidental to the service being performed. Such amounts are recognized ratably over the period during which the corresponding goods and services are consumed. Infrastructure Services Infrastructure services are typically provided pursuant to master service agreements, repair and maintenance contracts or fixed price and non-fixed price installation contracts. Pricing under these contracts may be unit priced, cost-plus/hourly (or time and materials basis) or fixed price (or lump sum basis). Generally, the Company accounts for infrastructure services as a single performance obligation satisfied over time. In certain circumstances, the Company supplies materials that are utilized during the jobs as part of the agreement with the customer. The Company accounts for these infrastructure agreements as multiple performance obligations satisfied over time. Revenue is recognized over time as work progresses based on the days completed or as the contract is completed. Under certain customer contracts in our infrastructure services segment, the Company warranties equipment and labor performed for a specified period following substantial completion of the work. Natural Sand Proppant Services The Company sells natural sand proppant through sand supply agreements with its customers. Under these agreements, sand is typically sold at a flat rate per ton or a flat rate per ton with an index-based adjustment. 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. 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. These agreements may also contain make-up provisions whereby shortfall payments can be applied in future periods against purchased volumes exceeding the minimum volume commitment. If a make-up right exists, the Company has future performance obligations to deliver excess volumes of product in subsequent periods. In accordance with FASB ASC 606, Revenue from Contracts with Customers , if the customer fails to meet the minimum volume commitment, the Company will assess whether it expects the customer to fulfill its unmet commitment during the contractually specified make-up period based on discussions with the customer and management’s knowledge of the business. If the Company expects the customer will make-up deficient volumes in future periods, revenue related to shortfall payments will be deferred and recognized on the earlier of the date on which the customer utilizes make-up volumes or the likelihood that the customer will exercise its right to make-up deficient volumes becomes remote. As of December 31, 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. F-16 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. The Company has elected to account for shipping and handling as activities to fulfill the promise to transfer the sand. If revenue is recognized for the related product before the shipping and handling activities occur, the Company accrues the related costs of those shipping and handling activities. Other Services 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. Services are provided on a day rate, contracted or hourly basis. Performance obligations for these services are satisfied over time and revenue is recognized as the work progresses based on the measure of output. Jobs for these services are typically short-term in nature and range from a few hours to multiple days. Practical Expedients The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts in which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied distinct good or service that forms part of a single performance obligation. Contract Balances Following is a rollforward of the Company’s contract liabilities (in thousands): Balance, January 1, 2022 $ 3,250 Deduction for recognition of revenue ( 3,207 ) Deduction for rebate credit recognized ( 140 ) Increase for deferral of customer prepayments 7,647 Balance, December 31, 2022 7,550 Deduction for recognition of revenue ( 7,042 ) Deduction for rebate credit recognized ( 375 ) Increase for deferral of customer prepayments 530 Balance, December 31, 2023 663 Deduction for recognition of revenue ( 58 ) Deduction for rebate credit recognized ( 506 ) Increase for deferral of shortfall payments 1,595 Increase for deferral of customer prepayments 643 Balance, December 31, 2024 $ 2,337 The Company did not have any contract assets as of December 31, 2024 or December 31, 2023. Performance Obligations Revenue recognized in the current period from performance obligations satisfied in previous periods was a nominal amount for the years ended December 31, 2024, 2023 and 2022. 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. 4. Divestitures 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. F-17 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. Inventories 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. Inventory is stated at the lower of cost or net realizable value on an average cost basis. The Company assesses the valuation of its inventories based upon specific usage, future utility, obsolescence and other factors. A summary of the Company’s inventories is shown below (in thousands): December 31, 2024 2023 Supplies $ 8,593 $ 6,757 Raw materials 1,297 872 Work in process 4,199 3,955 Finished goods 1,030 1,069 Total inventory $ 15,119 $ 12,653 6. Property, Plant and Equipment Property, plant and equipment include the following (in thousands): December 31, Useful Life 2024 2023 Pressure pumping equipment 3 - 5 years $ 261,881 $ 251,111 Drilling rigs and related equipment 3 - 15 years 97,021 97,207 Machinery and equipment 7 - 20 years 164,540 155,921 Buildings (a) 15 - 39 years 36,296 40,869 Vehicles, trucks and trailers 5 - 10 years 84,226 92,257 Coil tubing equipment 4 - 10 years 873 6,954 Land N/A 12,349 12,393 Land improvements 15 years or life of lease 9,882 10,066 Rail improvements 10 - 20 years 13,445 13,793 Other property and equipment (a) 3 - 12 years 15,010 15,171 695,523 695,742 Deposits on equipment and equipment in process of assembly (b) 8,921 8,670 704,444 704,412 Less: accumulated depreciation (c) 589,362 590,507 Total property, plant and equipment, net $ 115,082 $ 113,905 a. 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. b. 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. The equipment is not yet placed in service. c. Includes accumulated depreciation of $ 2.7 million and $ 2.3 million at December 31, 2024 and 2023, respectively, related to assets under operating leases. 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, 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 F-18 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): Years Ended December 31, 2024 2023 2022 Depreciation expense $ 22,959 $ 40,891 $ 60,545 Accretion and depletion expense 1,416 3,443 2,947 Amortization expense 704 776 779 Depreciation, depletion, amortization and accretion $ 25,079 $ 45,110 $ 64,271 7. Impairments Impairment of Goodwill Under GAAP, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of one or more of its reporting units is greater than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, there is no need to perform any further testing. However, if the Company concludes otherwise, then it is required to perform a quantitative impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. 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. Based on the qualitative assessment described above, the Company concluded that it was more likely than not that the carrying value of the Aviation reporting unit was greater than its fair value. To determine fair value of the Aviation reporting unit at September 30, 2023, the Company used the income approach. The income approach estimates the fair value based on anticipated cash flows that are discounted using a weighted average cost of capital. As a result, the Company impaired goodwill associated with Cobra Aviation, resulting in a $ 1.8 million impairment charge during the third quarter of 2023. The Company performed an assessment of goodwill during the fourth quarter of 2023 and determined that the fair value of its goodwill was greater than its carrying value. Therefore, no additional impairment was deemed necessary at December 31, 2023. The Company performed the qualitative assessment described above during the fourth quarter of 2022. 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, 2022. F-19 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8. Goodwill and Intangible Assets Goodwill Changes in the net carrying amount of goodwill by reporting segment (see Note 21) for the years ended December 31, 2024 and 2023 are presented below (in thousands): Well Completion Other Total Balance as of January 1, 2023 Goodwill $ 86,043 $ 14,830 $ 100,873 Accumulated impairment losses ( 76,829 ) ( 12,327 ) ( 89,156 ) 9,214 2,503 11,717 Acquisitions — — — Impairment losses (a) — ( 1,810 ) ( 1,810 ) Dispositions — ( 693 ) ( 693 ) Balance as of December 31, 2023 Goodwill 86,043 14,137 100,180 Accumulated impairment losses ( 76,829 ) ( 14,137 ) ( 90,966 ) 9,214 — 9,214 Acquisitions — — — Impairment losses — — — Dispositions — — — Balance as of December 31, 2024 Goodwill 86,043 14,137 100,180 Accumulated impairment losses ( 76,829 ) ( 14,137 ) ( 90,966 ) $ 9,214 $ — $ 9,214 a. See Note 7 for a description of impairment losses recognized. Intangible Assets The Company had the following definite lived intangible assets recorded as of the dates presented below (in thousands): December 31, 2024 2023 Trade names 7,730 7,730 Less: accumulated amortization - trade names ( 7,521 ) ( 6,817 ) Intangible assets, net $ 209 $ 913 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 original life of trade names is 10 years as of December 31, 2024 with a remaining average useful life of 2.5 years. Aggregated expected amortization expense for the future periods is expected to be as follows (in thousands): Year ended December 31: Amount 2025 $ 85 2026 85 2027 39 $ 209 F-20 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 9. Equity Method Investment On December 21, 2018, Cobra Aviation and Wexford Partners Investment Co. LLC (“Wexford Investment”), a related party, formed a joint venture under the name of Brim Acquisitions LLC (“Brim Acquisitions”) to acquire all outstanding equity interest in Brim Equipment Leasing, Inc. (“Brim Equipment”) for a total purchase price of approximately $ 2.0 million. Cobra Aviation owns a 49 % economic interest and Wexford Investment owns a 51 % economic interest in Brim Acquisitions, and each member contributed its pro rata portion of Brim Acquisitions initial capital of $ 2.0 million. Brim Acquisitions, through Brim Equipment, owns three commercial helicopters and leases two commercial helicopters for operations, which it uses to provide a variety of services, including short haul, aerial ignition, hoist operations, aerial photography, fire suppression, construction services, animal/capture/survey, search and rescue, airborne law enforcement, power line construction, precision long line operations, pipeline construction and survey, mineral and seismic exploration, and aerial seeding and fertilization. The Company uses the equity method of accounting to account for its investment in Brim Acquisitions, which had a carrying value of approximately $ 4.1 million and $ 4.2 million, respectively, at December 31, 2024 and 2023. 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 $( 0.1 ) 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. 10. Accrued Expenses and Other Current Liabilities and Other Long-Term Liabilities Accrued expense and other current liabilities and Other long-term liabilities included the following (in thousands): December 31, 2024 2023 Accrued Expenses and Other Current Liabilities State and local taxes payable $ 12,776 $ 13,111 Financed insurance premiums (a) 8,409 9,807 Sale-leaseback liability (b) 3,203 4,754 Accrued compensation and benefits 2,542 5,558 Deferred revenue 2,337 663 Financing leases 2,068 1,702 Insurance reserves 1,507 1,277 Financing arrangement, net (c) — 48,943 Other 1,098 2,139 Total accrued expenses and other current liabilities $ 33,940 $ 87,954 Other Long-Term Liabilities Financing leases $ 6,521 $ 2,138 Sale-leaseback liability (b) — 2,555 Other 138 22 Total other long-term liabilities $ 6,659 $ 4,715 a. 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 %. b. 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 F-21 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. c. On December 1, 2023, Cobra, as seller, and Mammoth, as guarantor, entered into the Assignment Agreement with SPCP Group. Under the terms and conditions of the Assignment Agreement, Cobra transferred to SPCP Group all of its rights, title and interest in $ 54.4 million of outstanding accounts receivable with PREPA. The Company elected the fair value option for measuring the liability. As of December 31, 2023, the fair value of the liability was approximately $ 48.9 million. See Note 20 for additional information regarding this transaction. 11. Debt Debt included the following (in thousands): December 31, 2024 2023 Revolving credit facility — — Term credit facility, including interest paid-in-kind — 45,000 Unamortized debt issuance costs and discount — ( 2,191 ) Total debt — 42,809 Less: current portion — — Total long-term debt $ — $ 42,809 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%. F-22 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. 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 “term credit facility”). 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. 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. F-23 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 12. Variable Interest Entities Dire Wolf and Predator Aviation, wholly owned subsidiaries of the Company, are party to Voting Trust Agreements with TVPX Aircraft Solutions Inc. (the “Voting Trustee”). Under the Voting Trust Agreements, Dire Wolf transferred 100 % of its membership interest in Cobra Aviation and Predator Aviation transferred 100 % of its membership interest in Leopard to the respective Voting Trustees in exchange for Voting Trust Certificates. Dire Wolf and Predator Aviation retained the obligation to absorb all expected returns or losses of Cobra Aviation and Leopard. Prior to the transfer of the membership interest to the Voting Trustee, Cobra Aviation was a wholly owned subsidiary of Dire Wolf and Leopard was a wholly owned subsidiary of Predator Aviation. Cobra Aviation owns one helicopter and support equipment and 49 % of the equity interest in Brim Acquisitions. Leopard owns one helicopter. Dire Wolf and Predator Aviation entered into the Voting Trust Agreements in order to meet certain registration requirements. Dire Wolf’s and Predator Aviation’s voting rights are not proportional to their respective obligations to absorb expected returns or losses of Cobra Aviation and Leopard, respectively, and all of Cobra Aviation’s and Leopard’s activities are conducted on behalf of Dire Wolf and Predator Aviation, which have disproportionately fewer voting rights; therefore, Cobra Aviation and Leopard meet the criteria of a VIE. Cobra Aviation and Leopard’s operational activities are directed by Dire Wolf’s and Predator Aviation’s officers and Dire Wolf and Predator Aviation have the option to terminate the Voting Trust Agreements at any time. Therefore, the Company, through Dire Wolf and Predator Aviation, is considered the primary beneficiary of the VIEs and consolidates Cobra Aviation and Leopard at December 31, 2024. 13. Selling, General and Administrative Expense Selling, general and administrative (“SG&A”) expense includes of the following (in thousands): Years Ended December 31, 2024 2023 2022 Cash expenses: Compensation and benefits $ 14,448 $ 15,563 $ 13,729 Professional services 12,298 13,448 13,501 Other (a) 7,146 7,693 8,012 Total cash SG&A expense 33,892 36,704 35,242 Non-cash expenses: Change in provision for expected credit losses (b) 90,054 ( 591 ) 3,389 Stock based compensation 875 1,345 923 Total non-cash SG&A expense 90,929 754 4,312 Total SG&A expense $ 124,821 $ 37,458 $ 39,554 a. Includes travel-related costs, information technology expenses, rent, utilities and other general and administrative-related costs. b. Included in the year ended December 31, 2024 amount is a charge of $ 89.2 million related to Cobra’s Settlement Agreement with PREPA. See Note 2. 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. 14. Income Taxes 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, 2024 2023 2022 U.S. current income tax expense $ 474 $ 715 $ 61 U.S. 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 F-24 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): Year Ended December 31, 2024 2023 2022 (Loss) income before income taxes $ ( 218,530 ) $ 9,134 $ 12,988 Statutory income tax rate 21 % 21 % 21 % 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 (loss) earnings not in reported income ( 35,996 ) 5,188 1,565 Foreign tax credits ( 166 ) ( 11,193 ) ( 3,646 ) Withholding taxes ( 19,899 ) 1,340 1,677 Other permanent differences 1,007 1,011 322 State tax benefit ( 5,983 ) 227 ( 1,129 ) Return to provision ( 27 ) ( 11 ) ( 116 ) Change in valuation allowance 120,549 8,132 6,219 Total $ ( 11,204 ) $ 12,297 $ 13,607 The Company’s effective tax rate was 5.1 % for the year ended December 31, 2024 compared to 134.6 % for the year ended December 31, 2023 and 104.8 % for the year ended December 31, 2022. 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 $ 0.3 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. F-25 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Deferred tax liabilities attributable to the Company consisted of the following (in thousands): Year Ended December 31, 2024 2023 Deferred tax assets: Section 163(j) interest limitation $ 5,090 $ — Lease asset 3,660 3,249 Intangible assets 1,050 997 Accrued liabilities 3,605 3,712 Net operating loss carryover 114,506 4,334 Foreign tax credits 76,570 96,303 Other 1,442 1,315 Valuation allowance ( 187,087 ) ( 86,432 ) Deferred tax assets 18,836 23,478 Deferred tax liabilities: Property and equipment $ ( 14,140 ) $ ( 14,708 ) Lease liability ( 3,583 ) ( 3,160 ) Prepaid expenses ( 2,306 ) ( 2,586 ) Other ( 1,828 ) ( 1,808 ) Deferred tax liabilities ( 21,857 ) ( 22,262 ) Net deferred tax (liability) asset $ ( 3,021 ) $ 1,216 Reflected in accompanying balance sheet as: Deferred income tax asset $ — $ 1,844 Deferred income tax liability ( 3,021 ) ( 628 ) Total $ ( 3,021 ) $ 1,216 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 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. 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 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 F-26 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. The Company did not have any uncertain tax positions for the years ended December 31, 2024 and 2023. The Company’s U.S. federal tax returns for tax years 2019 through 2024 remain subject to examination by the tax authorities. 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 2019 through 2024 and Canada tax returns for the tax years 2017 through 2024 remain open to examination by the respective tax authorities. 15. Leases Lessee Accounting The Company recognizes a lease liability equal to the present value of the lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases with a term in excess of 12 months. For operating leases, lease expense for lease payments is recognized on a straight-line basis over the lease term, while finance leases include both an operating expense and an interest expense component. For all leases with a term of 12 months or less, the Company has elected the practical expedient to not recognize lease assets and liabilities and recognizes lease expense for these short-term leases on a straight-line basis over the lease term. The Company’s operating leases are primarily for rail cars, real estate, and equipment and its finance leases are primarily for machinery and equipment. Generally, the Company does not include renewal or termination options in its assessment of the leases unless extension or termination for certain assets is deemed to be reasonably certain. The accounting for some of the Company’s leases may require significant judgment, which includes determining whether a contract contains a lease, determining the incremental borrowing rates to utilize in the net present value calculation of lease payments for lease agreements which do not provide an implicit rate and assessing the likelihood of renewal or termination options. Lease agreements that contain a lease and non-lease component are generally accounted for as a single lease component. The rate implicit in the Company’s leases is not readily determinable. Therefore, the Company uses its incremental borrowing rate based on information available at the commencement date of its leases in determining the present value of lease payments. The Company’s incremental borrowing rate reflects the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Lease expense consisted of the following for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Operating lease expense $ 6,576 $ 7,510 Short-term lease expense 191 515 Finance lease expense: Amortization of right-of-use assets 1,767 2,059 Interest on lease liabilities 381 191 Total lease expense $ 8,915 $ 10,275 F-27 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): Year Ended December 31, 2024 2023 Operating leases: Operating lease right-of-use assets $ 6,417 $ 9,551 Current operating lease liability 3,450 5,771 Long-term operating lease liability 2,792 3,534 Finance leases: Property and equipment, net $ 8,731 $ 3,966 Accrued expenses and other current liabilities 2,068 1,702 Other liabilities 6,521 2,138 Other supplemental information related to leases for the years ended December 31, 2024 and 2023 is as follows (in thousands): Year Ended December 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,521 $ 7,438 Operating cash flows from finance leases 381 191 Financing cash flows from finance leases 1,858 3,716 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2,918 $ 5,681 Finance leases 6,896 1,417 Year Ended December 31, 2024 2023 Weighted-average remaining lease term: Operating leases 3.1 years 2.5 years Finance leases 3.8 years 2.2 years Weighted-average discount rate: Operating leases 9.5 % 8.7 % Finance leases 9.0 % 6.3 % Maturities of lease liabilities as of December 31, 2024 are as follows (in thousands): Operating Leases Finance Leases 2025 $ 3,846 $ 2,729 2026 1,590 3,014 2027 697 2,003 2028 446 953 2029 281 953 Thereafter 453 685 Total lease payments 7,313 10,337 Less: Present value discount 1,071 1,748 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 . F-28 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Lessor Accounting 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. The practical expedient also allows a lessor to account for the combined lease and non-lease components under FASB ASC 606, when the non-lease component is the predominant element of the combined component. The Company’s lease agreements are generally short-term in nature and lease revenue is recognized over time based on a monthly, daily or hourly rate basis. 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, 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. 16. Loss Per Share Year Ended December 31, 2024 2023 2022 (in thousands, except per share data) Basic loss per share: Allocation of earnings: Net loss $ ( 207,326 ) $ ( 3,163 ) $ ( 619 ) Weighted average common shares outstanding 48,065 47,777 47,175 Basic loss per share $ ( 4.31 ) $ ( 0.07 ) $ ( 0.01 ) Diluted loss per share: Allocation of earnings: Net loss $ ( 207,326 ) $ ( 3,163 ) $ ( 619 ) Weighted average common shares, including dilutive effect (a) 48,065 47,777 47,175 Diluted loss per share $ ( 4.31 ) $ ( 0.07 ) $ ( 0.01 ) a. No incremental shares of potentially dilutive restricted stock awards were included for the years ended December 31, 2024, 2023, or 2022 as their effect was antidilutive under the treasury stock method. 17. Equity Based Compensation Upon formation of certain operating entities by Wexford and Gulfport, specified members of management (the “Specified Members”) and certain non-employee members (the “Non-Employee Members”) were granted the right to receive distributions from the operating entities after the contribution member’s unreturned capital balance was recovered (referred to as “Payout” provision). On November 24, 2014, the awards were modified in conjunction with the contribution of the operating entities to Mammoth. These awards were not granted in limited or general partner units. The awards are for interests in the distributable earnings of the members of MEH Sub, Mammoth’s majority equity holder. On the closing date of Mammoth Inc.’s initial public offering (“IPO”), the unreturned capital balance of Mammoth’s majority equity holder was not fully recovered from its sale of common stock in the IPO. As a result, Payout did not occur and no compensation cost was recorded. F-29 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. For the Specified Member awards, the unrecognized amount, which represents the fair value of the award as of the modification dates or grant date, was $ 5.6 million. For the Company’s Non-Employee Member awards, the unrecognized amount, which represents the fair value of the awards as of the date of adoption of ASU 2018-07 was $ 18.9 million. 18. 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 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 The fair value of restricted stock unit awards was determined based on the fair market value of the Company’s common stock on the date of the grant. This value is amortized over the vesting period. 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 Vested ( 628,205 ) 1.54 Forfeited — — Unvested restricted stock units as of December 31, 2022 728,310 1.32 Granted 369,050 5.17 Vested ( 794,977 ) 1.69 Forfeited — — Unvested restricted stock units as of December 31, 2023 302,383 5.06 Granted 139,280 3.59 Vested ( 185,717 ) 4.71 Forfeited — — Unvested restricted stock units as of December 31, 2024 255,946 4.52 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 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. 19. Related Party Transactions 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 F-30 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. Following these transactions, and also on December 21, 2018, Cobra Aviation formed a joint venture with Wexford Investment named Brim Acquisitions to acquire all outstanding equity interests in Brim Equipment. Cobra Aviation owns a 49 % economic interest and Wexford Investment owns a 51 % economic interest in Brim Acquisitions, and each member contributed its pro rata portion of Brim Acquisitions’ initial capital of $ 2.0 million. Wexford Investment is an entity controlled by Wexford, which owns approximately 46 % of the Company’s outstanding common stock. Cobra Aviation and Leopard each lease one helicopter to Brim Equipment under the terms of aircraft lease and management agreements. ARS was subsequently sold to a third party in July 2023. See Note 4 for further discussion. On October 16, 2023, the Company entered into a loan and security agreement with Wexford, an affiliate of Mammoth. Under this agreement, 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. 20. Commitments and Contingencies Commitments From time to time, the Company may enter into agreements with suppliers that contain minimum purchase obligations and agreements to purchase capital equipment. The Company did not have any unconditional purchase obligations as of December 31, 2024. Letters of Credit 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. Insurance 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. 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. 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, 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 F-31 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS million. As of December 31, 2024 and 2023, the Company did not have any accrued claims for directors and officers liability. The Company also self-insures its employee health insurance. 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 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. Warranty Guarantees Pursuant to certain customer contracts in our infrastructure services segment, the Company warrants equipment and labor performed under the contracts for a specified period following substantial completion of the work. Generally, the warranty is for one year or less. No liabilities were accrued as of December 31, 2024 or 2023 and no expense was recognized during the years ended December 31, 2024, 2023 or 2022 related to warranty claims. However, if warranty claims occur, the Company could be required to repair or replace warrantied items, which in most cases are covered by warranties extended from the manufacturer of the equipment. In the event the manufacturer of equipment failed to perform on a warranty obligation or denied a warranty claim made by the Company, the Company could be required to pay for the cost of the repair or replacement. Bonds In the ordinary course of business, the Company is required to provide bid bonds to certain customers in the infrastructure services segment as part of the bidding process. These bonds provide a guarantee to the customer that the Company, if awarded the project, will perform under the terms of the contract. Bid bonds are typically provided for a percentage of the total contract value. Additionally, the Company may be required to provide performance and payment bonds for contractual commitments related to projects in process. These bonds provide a guarantee to the customer that the Company will perform under the terms of a contract and that the Company will pay subcontractors and vendors. If the Company fails to perform under a contract or to pay subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. The Company must reimburse the surety for expenses or outlays it incurs. As of December 31, 2024 and 2023, outstanding performance and payment bonds totaled $ 14.2 million and $ 10.0 million, respectively. 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, 2024 and 2023, respectively. Litigation 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. 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 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. 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. 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 F-32 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. 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. 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. 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. On January 21, 2020, MasTec Renewables Puerto Rico, LLC (“MasTec”) filed a lawsuit against Mammoth Inc. and Cobra in the U.S. District Court for the Southern District of Florida. MasTec’s complaint asserted claims against the Company and Cobra Acquisitions for violations of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), tortious interference and violations of Puerto Rico law. MasTec alleged that it sustained injuries to its business and property in an unspecified amount because it lost the opportunity to perform work in connection with rebuilding the energy infrastructure in Puerto Rico after Hurricane Maria under a services contract with a maximum value of $ 500 million due to the Company’s and Cobra’s wrongful interference, payment of bribes, and other inducement to a FEMA official. On April 1, 2020, the defendants filed a motion to dismiss the complaint. On October 14, 2020, the Court dismissed the RICO claims, and on November 18, 2020, dismissed the claims arising under the Puerto Rico statute and the cause of action for tortious interference with MasTec’s contract (but not its business relations), and dismissed Mammoth Inc. from the litigation. On August 2, 2021, in order to avoid the risks of further litigation, and with no admission of wrongdoing whatsoever, the Company reached an agreement to settle this matter. Under the terms of the agreement, Cobra paid $ 6.5 million to MasTec on August 2, 2021 and the Company guaranteed payment, by Cobra, of $ 9.25 million on both August 1, 2022 and December 1, 2022. The agreement specified interest rates between 6 % and 12 %. The settlement amount and legal expenses related to the matter of $ 25.0 million and $ 5.4 million, respectively, are reflected in “other income, net” in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2021. Cobra made the second installment payment, including accrued interest, to MasTec on August 23, 2022, the final installment principal payment to MasTec on October 24, 2022 and the final installment interest payment to MasTec on December 1, 2022. On May 13, 2021, Foreman Electric Services, Inc. (“Foreman”) filed a petition against Mammoth Inc. and Cobra in the Oklahoma County District Court (Oklahoma State Court). 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, F-33 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. On December 14, 2021, Foreman re-filed its petition against Mammoth Inc. and Cobra in the Oklahoma County District Court (Oklahoma State Court). On December 16, 2021, the Company again removed this action to the United States District Court for the Western District of Oklahoma. Foreman filed a motion to remand this action back to Oklahoma County District Court, which was granted on May 5, 2022. On September 28, 2023, the Company moved to dismiss the petition. On November 16, 2023, rather than respond to the motion, Foreman filed an Amended Petition naming Arty Straehla, Mark Layton and Wexford as additional defendants, added claims for fraudulent transfer arising out of the refinancing of certain debt and sought receivership over Mammoth and Cobra related to allegedly fraudulently transferred assets. The defendants moved to dismiss the Amended Petition, which was denied on March 12, 2024. On February 8, 2024, Foreman filed a Motion for Appointment of Receiver. 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 moved to dismiss the complaint. On January 18, 2024, Foreman voluntarily dismissed the Florida State Court action against Straehla and Layton. In a related matter, on January 12, 2022, a Derivative Complaint on behalf of nominal defendant Machine Learning Integration, LLC (“MLI”), which alleges it would have served as a sub-contractor to Foreman in Puerto Rico, was filed against the Company and Cobra in the U.S. District Court for the District of Puerto Rico alleging essentially the same facts as Foreman’s action and asserting violations of federal RICO statutes and certain non-federal claims. MLI alleges it sustained injuries to its business and property in an unspecified amount because the Company’s and Cobra’s wrongful 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. 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. During 2015, the State of Ohio assessed taxes on the purchase of equipment the Company believes is exempt under state law. The Company appealed the assessment and a hearing was held in 2017. As a result of the hearing, the Company received a decision from the State of Ohio, which the Company appealed. On February 25, 2022, the Company received an unfavorable decision on the appeal. The Company appealed the decision. On August 2, 2023, the Ohio Supreme court affirmed the ruling in part and reversed the ruling in part. The Company is currently awaiting the final assessment. It is not expected to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. Cobra has been served with 13 lawsuits from municipalities in Puerto Rico alleging failure to pay construction excise and volume of business taxes. 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. On April 10, 2023, Cobra appealed this judgment, which was denied on May 5, 2023. Cobra filed a motion for reconsideration on May 15, 2023, which was denied. Cobra filed a second motion for reconsideration on June 22, 2023 and is currently awaiting a decision. On December 18, 2023, the Humacao Superior Court issued an order to PREPA to withhold payment of approximately $ 9.0 million to Cobra. On January 17, 2024, Cobra filed a Writ of Certiorari requesting the Court of Appeals to reverse the order from the Humacao Superior Court. On February 15, 2024, Cobra’s request was granted by the Court of Appeals and the order instructing PREPA to withhold the $ 9.0 million payment from Cobra was revoked. The case was remanded to the lower Court for continuation of the proceedings in accordance with the Court of Appeals’ order. Cobra believes it is exempt from the construction excise taxes. 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. Higher Power Electrical, LLC, Cobra Acquisitions LLC, and Cobra Energy LLC in the U.S. District Court for the District of Puerto Rico. On June 24, 2019, the complaint was amended to replace Mr. Williams with Matthew Zeisset as the named plaintiff. 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 F-34 MAMMOTH ENERGY SERVICES, INC. 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. Other claimants have subsequently initiated additional individual arbitration proceedings asserting similar claims. During 2023, the Company agreed to settlements in principle with a portion of the claimants. Arbitrations remain pending for the remaining claimants. The Company will continue to vigorously defend the arbitrations. During 2023 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. On September 10, 2019, the U.S. District Court for the District of Puerto Rico unsealed an indictment that charged the former president of Cobra Acquisitions LLC with conspiracy, wire fraud, false statements and disaster fraud. Two other individuals were also charged in the indictment. The indictment is focused on the interactions between a former FEMA official and the former president of Cobra. Neither the Company nor any of its subsidiaries were charged in the indictment. On May 18, 2022, the former FEMA official and the former president of Cobra each pled guilty to one-count information charging gratuities related to a project that Cobra never bid upon and was never awarded or received any monies for. On December 13, 2022, the Court sentenced the former Cobra president to custody of the Bureau of Prisons for six months and one day, a term of supervised release of six months and one day and a fine of $ 25,000 . 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 . The Court also dismissed the indictment against the two defendants. The Company does not expect any additional activity in the criminal proceeding. 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 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. The Company is involved in various other legal proceedings in the ordinary course of business. Although the Company cannot predict the outcome of these proceedings, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these matters could have a material impact on the Company’s business, financial condition, results of operations or cash flows. Assignment Agreement On December 1, 2023, Cobra, as seller and Mammoth, as guarantor, entered into the Assignment Agreement with SPCP Group, as purchaser. Under the terms and conditions of the Assignment Agreement, Cobra transferred to SPCP Group, at the purchase rate of 88.0 % and free and clear of any liens and claims, all of its rights, title and interest in the first $ 63.0 million (the “Transferred Amount”) of the total outstanding accounts receivable that remained unpaid by PREPA as of October 6, 2023 (the “PREPA Claim”), received or to be received by Cobra on or after October 6, 2023. Between October 6, 2023 and December 1, 2023, Cobra received payments from PREPA with respect to the PREPA Claim totaling $ 8.6 million (the “Interim Payment Amount”), resulting in the net Transferred Amount of $ 54.4 million. 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 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. The Company elected the fair value option for measuring the liability to simplify the accounting associated with the Assignment Agreement. As of December 31, 2023, the fair value of the liability was approximately $ 48.9 million, which is included in “accrued expenses and other current liabilities” in the accompanying consolidated balance sheet and the aggregate unpaid principal balance related to this liability was $ 54.4 million. During the year ended December 31, 2023, the Company recognized a financing charge totaling $ 2.8 million, which is included in “interest expense and financing charges, net” in the accompanying consolidated statement of comprehensive loss. F-35 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. 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 The Company sponsors a 401(k) defined contribution plan for the benefit of substantially all employees at their date of hire. The plan allows eligible employees to contribute up to 92 % of their annual compensation, not to exceed annual limits established by the federal government. The Company makes discretionary matching contributions of up to 3 % of an employee’s compensation and may make additional discretionary contributions for eligible employees. For the years ended December 31, 2024, 2023 and 2022, the Company paid $ 2.1 million, $ 2.0 million and $ 1.9 million, respectively, in contributions to the plan. 21. Reporting Segments and Geographic Areas Reporting Segments 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 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. 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. 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. 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. 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 F-36 MAMMOTH ENERGY SERVICES, INC. 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 . Therefore, results for these operating segments are included in the column titled “All Other” in the tables below. Additionally, assets for corporate activities, which primarily include cash and cash equivalents, restricted cash, inter-segment accounts receivable, prepaid insurance and certain property and equipment, are included in the All Other column. Although Mammoth Energy Partners LLC, which holds these corporate assets, meets one of the quantitative thresholds of a reporting segment, it does not engage in business activities from which it may earn revenues and its results are not regularly reviewed by the Company’s CODM when making key operating and resource utilization decisions. Therefore, the Company does not include it as a reportable segment. Sales from one segment to another are generally priced at estimated equivalent commercial selling prices. Total revenue and total cost of revenue amounts included in the Eliminations column in the following tables include inter-segment transactions conducted between segments. Receivables due for sales from one segment to another and for corporate allocations to each segment are included in the Eliminations column for total assets in the following tables. All transactions conducted between segments are eliminated in consolidation. 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, 2024 Well Completion Infrastructure Sand All Other Eliminations Total Revenue from external customers $ 33,622 $ 110,383 $ 19,026 $ 24,901 $ — $ 187,932 Intersegment revenues 393 — 31 6,548 ( 6,972 ) — Total revenue 34,015 110,383 19,057 31,449 ( 6,972 ) 187,932 Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 38,005 92,081 17,790 22,875 — 170,751 Intersegment cost of revenues 756 51 — 6,165 ( 6,972 ) — Total cost of revenue 38,761 92,132 17,790 29,040 ( 6,972 ) 170,751 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 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, 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: Total assets $ 61,728 $ 150,531 $ 118,855 $ ( 97,525 ) $ 150,442 $ 384,031 F-37 MAMMOTH ENERGY SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 Intersegment revenue 440 — 25 2,029 ( 2,494 ) — Total revenue 127,372 110,537 39,131 34,946 ( 2,494 ) 309,492 Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 103,880 90,478 25,666 27,816 — 247,840 Intersegment cost of revenues 1,182 149 — 1,163 ( 2,494 ) — Total cost of revenue 105,062 90,627 25,666 28,979 ( 2,494 ) 247,840 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 ) 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 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: Total assets $ 49,926 $ 462,429 $ 121,201 $ ( 40,156 ) $ 105,079 $ 698,479 F-38 MAMMOTH ENERGY SERVICES, INC. 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 Intersegment revenues 596 — 2,475 2,057 ( 5,128 ) — Total revenue 166,241 111,452 51,391 38,130 ( 5,128 ) 362,086 Cost of revenue, exclusive of depreciation, depletion, amortization and accretion 120,562 91,577 35,985 30,463 — 278,587 Intersegment cost of revenues 3,882 72 — 1,174 ( 5,128 ) — Total cost of revenue 124,444 91,649 35,985 31,637 ( 5,128 ) 278,587 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 ) Stock based compensation 369 349 118 87 — 923 Interest expense and financing charges, net 1,625 7,390 575 1,916 — 11,506 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: Total assets $ 79,022 $ 450,841 $ 129,566 $ 14,813 $ 50,436 $ 724,678 Geographic Areas The following table presents consolidated revenues by country based on sales destination of the products or services (in thousands): Year Ended December 31, 2024 2023 2022 United States $ 165,883 $ 287,467 $ 343,307 Canada 22,033 21,746 18,603 Other 16 279 176 Total $ 187,932 $ 309,492 $ 362,086 The following table presents long-lived assets, excluding deferred income tax assets, by country (in thousands): Year Ended December 31, 2024 2023 2022 United States $ 187,895 $ 189,697 $ 217,101 Canada 7,549 10,013 10,885 Total $ 195,444 $ 199,710 $ 227,986 F-39