Mammoth Energy Services, Inc.: Form 10-Q for the period ended Mar 31, 2025

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto presented in this Quarterly Report and the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission, or the SEC, on March 7, 2025 and the section entitled “Cautionary Note Regarding Forward-Looking Statements” appearing elsewhere in this Quarterly Report.

Overview

We are an integrated, growth-oriented energy services company focused on providing products and services to enable the exploration and development of North American onshore unconventional oil and natural gas reserve as well as the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through our infrastructure services segment. Our primary business objective is to grow our operations and create value for stockholders through organic growth opportunities and accretive acquisitions and divestitures. Our suite of services includes well completion services, infrastructure services, natural sand proppant services and other services. Our well completion services segment provides hydraulic fracturing, sand hauling and water transfer services. Our infrastructure services segment provides engineering and fiber services to the electrical infrastructure industry. Our natural sand proppant services segment mines, processes and sells natural sand proppant used for hydraulic fracturing. In addition to these segments, we also provide directional drilling services, aviation services, equipment rentals, remote accommodations and equipment manufacturing. We believe that the services we offer play a critical role in increasing the ultimate recovery and present value of production streams from unconventional resources as well as in maintaining and improving electrical infrastructure. Our complementary suite of services provides us with the opportunity to cross-sell our services and expand our customer base and geographic positioning.

We continue to address the external challenges in today’s economic environment as we remain disciplined with our spending and are focused on continuing to improve our operational efficiencies and cost structure and on enhancing value for our stockholders.

On April 11, 2025, we completed a transaction to sell a portion of our infrastructure services entities, including our distribution, transmission and substation operations for aggregate proceeds of $108.7 million, subject to customary post-closing adjustments. The Company believes this transaction will be accretive for its stockholders. Mammoth entered the infrastructure sector in 2017 with two small acquisitions and has grown and added to it through organic development to generate more than $90 million of revenue annually in each of the last three years. We believe this transaction unlocks significant value for the Mammoth enterprise and with the increased cash position, we are actively exploring opportunities to deploy capital at accretive returns.

Overview of Our Industries

Oil and Natural Gas Industry

The oil and natural gas industry has traditionally been volatile and is influenced by a combination of long-term, short-term and cyclical trends, including the domestic and international supply and demand for oil and natural gas, current and expected future prices for oil and natural gas and the perceived stability and sustainability of those prices, production depletion rates and the resultant levels of cash flows generated and allocated by exploration and production companies to their drilling, completion and related services and products budgets. The oil and natural gas industry is also impacted by general domestic and international economic conditions, political instability in oil producing countries, government regulations (both in the United States and elsewhere), levels of customer demand, the availability of pipeline capacity, storage capacity, shortages of equipment and materials and other conditions and factors that are beyond our control.

Demand for most of our oil and natural gas products and services depends substantially on the level of expenditures by companies in the oil and natural gas industry. The levels of capital expenditures of our customers are driven by many factors, including the prices of oil and natural gas. Throughout 2024, we continued to experience persistent challenges in our well completion and natural sand proppant services segments associated with lower U.S. onshore activity and sustained weakness in the natural gas basins in which we operate. Macroeconomic uncertainty, tariff implications and OPEC+ production increases have placed significant pressure on the energy market, and more specifically, commodity prices. This has widely softened expectations for activity levels throughout 2025. We expect 2025 completions activity to be relatively steady, with the potential for upside compared to 2024 driven by incremental demand associated with natural gas. Positive trends that may contribute to increased activity will come from LNG export capacity coming online and general electricity and power demand enhancements. We will be strategically positioned to capitalize on this anticipated demand if and when it ramps up.

In response to market conditions and reduced demand, we temporarily shut down our cementing and acidizing operations and flowback operations beginning in July 2019, our rig hauling operations beginning in April 2020, our coil tubing, pressure control and full service transportation operations beginning in July 2020 and our crude oil hauling operations beginning in July 2021. We continue to monitor the market to determine if and when we can recommence these services.

Natural Sand Proppant Industry

The natural sand proppant industry is closely aligned with the oil and gas industry. Similar to our well completion segment, activity for our natural sand proppant services segment remained suppressed throughout 2024. We expect 2025 activity to be relatively steady, with the potential for upside compared to 2024 driven by incremental demand associated with natural gas.

As a result of adverse market conditions, production at our Muskie sand facility in Pierce County, Wisconsin has been temporarily idled since September 2018. Our contracted capacity has provided a baseline of business, which has kept our Taylor and Piranha plants operating and our costs competitive.

Energy Infrastructure Industry

Prior to the sale described above, our infrastructure services segment provides engineering, design, construction, upgrade, maintenance and repair services to the electrical infrastructure industry. We offered a broad range of services on electric transmission and distribution, or T&D, networks and substation facilities, which include engineering, design, construction, upgrade, maintenance and repair of high voltage transmission lines, substations and lower voltage overhead and underground distribution systems. Our commercial services included the installation, maintenance and repair of commercial wiring. We also provided storm repair and restoration services in response to storms and other disasters. We provided infrastructure services primarily in the northeastern, southwestern, midwestern and western portions of the United States. We retained our infrastructure engineering and fiber entities and continue to operate in the midwestern and western portions of the United States.

Settlement Agreement with PREPA

Since we commenced infrastructure services operations, a substantial portion of our infrastructure revenue has been generated from storm restoration work, primarily from PREPA. 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. Our work under each of the contracts with PREPA ended on March 31, 2019. 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”). Cobra pursued 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. On July 22, 2024, Cobra entered into the Settlement Agreement with PREPA. Pursuant to the terms of the Settlement Agreement, PREPA paid Cobra approximately $168.4 million in 2024 and, as of March 31, 2025, PREPA owes Cobra $20.0 million, which is payable to Cobra within seven days following the effective date of PREPA’s plan of adjustment in its bankruptcy proceedings. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, previously filed with the SEC for more information regarding the Settlement Agreement.

First Quarter 2025 Financial Overview

• Revenue for the first quarter of 2025 increased by $19.3 million, or 45%, to $62.5 million from $43.2 million for the first quarter of 2024. The increase in total revenue is primarily attributable to an increase in well completion services, infrastructure services and natural sand proppant services revenue.
• Net loss for the first quarter of 2025 was $0.5 million, or $0.01 loss per diluted share, as compared to net loss of $11.8 million, or $0.25 loss per diluted share, for the first quarter of 2024. The improvement is primarily attributable to an increase in utilization for our well completion, infrastructure and natural sand proppant services.
• Adjusted EBITDA for the first quarter of 2025 was $2.7 million as compared to $4.5 million for the first quarter of 2024. See “Non-GAAP Financial Measures” for a reconciliation of net loss to Adjusted EBITDA.

Results of Operations

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

(in thousands)

Revenue. Revenue for the three months ended March 31, 2025 increased $19.3 million, or 45%, to $62.5 million from $43.2 million for the three months ended March 31, 2024. The increase in total revenue is primarily attributable to increases in revenue for our well completion, infrastructure and natural sand proppant services segments during the three months ended March 31, 2025. Revenue by segment was as follows:

Well Completion Services. Well completion services revenue increased $12.9 million, or 161%, to $20.9 million for the three months ended March 31, 2025 from $8.0 million for the three months ended March 31, 2024. The increase in our well completion services revenue was primarily driven by an 118% increase in the number of stages completed from 380 for the three months ended March 31, 2024 to 828 for the three months ended March 31, 2025. An average of 1.3 of our pressure pumping fleets were active for the three months ended March 31, 2025 as compared to an average of 0.6 pressure pumping fleets during the three months ended March 31, 2024.

Infrastructure Services. Infrastructure services revenue increased $5.7 million, or 23%, to $30.7 million for the three months ended March 31, 2025 from $25.0 million for the three months ended March 31, 2024. The increase in revenue was primarily due to an increase in average crew count from 75 crews for the three months ended March 31, 2024 to 100 crews for the three months ended March 31, 2025 coupled with a $5.1 million increase in storm restoration activity. These increases were partially offset by a $2.4 million decrease in substation revenue.

Natural Sand Proppant Services. Natural sand proppant services revenue increased $2.4 million, or 56%, to $6.7 million for the three months ended March 31, 2025 from $4.3 million for the three months ended March 31, 2024 primarily due to a 30% increase in tons of sand sold from 145,662 tons for the three months ended March 31, 2024 to 189,020 tons for the three months ended March 31, 2025, coupled with $1.6 million of shortfall revenue recognized during the three months ended March 31, 2025. This was partially offset by a 12% decline in the average price per ton of sand sold from $24.38 per ton during the three months ended March 31, 2024 to $21.49 per ton during the three months ended March 31, 2025.

Other. Other revenue, consisting of revenue derived from our directional drilling, aviation, equipment rental, remote accommodations and equipment manufacturing services, decreased approximately $1.0 million, or 14%, to $5.9 million for the three months ended March 31, 2025 from $6.9 million for the three months ended March 31, 2024. Intersegment revenue, consisting primarily of equipment manufacturing revenue derived from our well completion segment, was $1.7 million and $1.0 million for the three months ended March 31, 2025 and 2024, respectively.

The decline in revenue is primarily attributable to a decrease in equipment manufacturing revenue coupled with a decrease in remote accommodations revenue. On average, 179 rooms were utilized during the three months ended March 31, 2025 as compared to 235 for the three months ended March 31, 2024 for our remote accommodations services. These decreases were partially offset by an increase in equipment rental revenue. An average of 231 pieces of equipment were rented to customers during the three months ended March 31, 2025, an increase of 9% from an average of 211 pieces of equipment rented to customers during the three months ended March 31, 2024.

Cost of Revenue (exclusive of depreciation, depletion, amortization and accretion). Cost of revenue, exclusive of depreciation, depletion, amortization and accretion, increased $12.8 million from $40.6 million, or 94% of total revenue, for the three months ended March 31, 2024 to $53.4 million, or 85% of total revenue, for the three months ended March 31, 2025. The increase is primarily due to an increase in activity in our well completion segment. Cost of revenue by segment was as follows:

Well Completion Services. Well completion services cost of revenue, exclusive of depreciation and amortization, increased $10.9 million, or 138%, to $18.8 million for the three months ended March 31, 2025 from $7.9 million for the three months ended March 31, 2024, primarily due to an increase in utilization of our fleets. As a percentage of revenue, our well completion services cost of revenue, exclusive of depreciation and amortization of $3.1 million for the three months ended March 31, 2025 and 2024 was 90% and 99% for the three months ended March 31, 2025 and 2024, respectively. The decrease as a percentage of revenue is primarily due to an increase in utilization of our pressure pumping services, resulting in a lower ratio of fixed costs to variable costs.

Infrastructure Services. Infrastructure services cost of revenue, exclusive of depreciation and amortization, increased $3.8 million, or 18%, to $25.4 million for the three months ended March 31, 2025 from $21.6 million for the three months ended March 31, 2024. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization of $0.9 million and $0.7 million for the three months ended March 31, 2025 and 2024, respectively, was 83% and 86% for the three months ended March 31, 2025 and 2024, respectively. The decrease as a percentage of revenue is primarily due to an increase in storm restoration work, which produces higher margins.

Natural Sand Proppant Services. Natural sand proppant services cost of revenue, exclusive of depreciation, depletion and accretion, decreased $0.2 million, or 4%, to $5.5 million for the three months ended March 31, 2025 from $5.7 million for the three months ended March 31, 2024. As a percentage of revenue, cost of revenue, exclusive of depreciation, depletion and accretion of $0.9 million and $1.1 million for the three months ended March 31, 2025 and 2024, respectively, was 82% and 133% for the three months ended March 31, 2025 and 2024, respectively. The decrease as a percentage of revenue is primarily due to an increase in tons of sand sold and the recognition of shortfall revenue, which was partially offset by a decline in the average price per ton of sand sold.

Other. Other cost of revenue, exclusive of depreciation and amortization, decreased $1.0 million, or 15%, to $5.5 million for the three months ended March 31, 2025 from $6.5 million for the three months ended March 31, 2024 primarily due to decreased activity. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization of $1.2 million and $2.1 million for the three months ended March 31, 2025 and 2024, respectively, was 93% and 94% for the three months ended March 31, 2025 and 2024, respectively.

Selling, General and Administrative. Selling, general and administrative, or SG&A, represent the costs associated with managing and supporting our operations. SG&A decreased $2.3 million, or 26%, to $6.5 million for the three months ended March 31, 2025 from $8.8 million for the three months ended March 31, 2024 primarily due to a decrease in compensation and benefits. The table below presents a breakdown of SG&A for the periods indicated (in thousands):

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

Depreciation, Depletion, Amortization and Accretion. Depreciation, depletion, amortization and accretion decreased $1.0 million, or 14%, to $6.0 million for the three months ended March 31, 2025 from $7.0 million for the three months ended March 31, 2024. The decrease is primarily attributable to a decline in property, plant and equipment depreciation as a result of existing assets being fully depreciated during or after the three months ended March 31, 2024.

Gains on Disposal of Assets, Net. Gains on the disposal of assets, net were $4.0 million and $1.2 million for the three months ended March 31, 2025 and 2024, respectively.

Operating Income (Loss). We reported operating income of $0.5 million for the three months ended March 31, 2025 compared to operating loss of $12.0 million for the three months ended March 31, 2024. The increase in operating income is primarily due to an increase in activity for our well completion, infrastructure and natural sand proppant services segments.

Interest Income (Expense and Financing Charges), Net. Interest income, net of interest expense and financing charges was $0.2 million for the three months ended March 31, 2025 compared to interest expense and financing charges, net of $8.1 million for the three months ended March 31, 2024. The change is primarily due to a $5.5 million financing charge incurred in relation to the Assignment Agreement with SPCP Group during the three months ended March 31, 2024. See “—Liquidity and Capital Resources—Cobra Assignment Agreement” for additional information. Additionally, interest expense on long-term debt decreased by $1.6 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to the payoff of our term credit facility in October 2024.

Other (Expense) Income, Net. Other expense was $0.3 million for the three months ended March 31, 2025 compared to other income of $10.1 million for the three months ended March 31, 2024. The change is primarily due to the recognition of interest on delinquent accounts receivable totaling $10.5 million during the three months ended March 31, 2024 with no similar activity during the three months ended March 31, 2025.

Provision for Income Taxes. We recorded income tax expense of $0.9 million on pre-tax income of $0.3 million for the three months ended March 31, 2025 compared to income tax expense of $1.8 million on pre-tax loss of $10.0 million for the three months ended March 31, 2024. Our effective tax rates were 266% and 18% for the three months ended March 31, 2025 and 2024, respectively. The effective tax rate for the three months ended March 31, 2025 differed from the statutory rate of 21% primarily due to interest and penalties recognized during the period. The effective tax rate for the three months ended March 31, 2024 differed from the statutory rate of 21% primarily due to changes in the valuation allowance and interest and penalties recognized during the period.

Non-GAAP Financial Measures

Adjusted EBITDA

Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA as net income (loss) before depreciation, depletion, amortization and accretion, gains (losses) on disposal of assets, net, stock based compensation, interest (income) expense and financing charges, other (income) expense, net (which is comprised of interest on trade accounts receivable and certain legal expenses) and provision for income taxes, further adjusted to add back interest on trade accounts receivable. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industries depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) or cash flows from operating activities as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements.

The following tables provide a reconciliation of Adjusted EBITDA to net income or loss, the most directly comparable GAAP financial measure, on a consolidated basis and for each of our reportable segments and other services for the specified periods (in thousands):

Consolidated

Well Completion Services

31

Infrastructure Services

Natural Sand Proppant Services

Other(a)

(a) Includes results for our directional drilling, aviation, equipment rentals, remote accommodations and equipment manufacturing and corporate related activities. Our corporate related activities do not generate revenue.

Liquidity and Capital Resources

We require capital to fund ongoing operations including maintenance expenditures on our existing fleet of equipment, organic growth initiatives, investments and acquisitions, and the litigation settlement obligations described in Note 18. Commitments and Contingencies of the notes to the unaudited condensed consolidated financial statements and under “Capital Requirements and Sources of Liquidity” below. Our primary sources of liquidity have been cash on hand, borrowings under our revolving credit facility, proceeds from the sale of assets and cash flows from operations, as well as the net proceeds received by Cobra under the assignment agreement with SPCP Group relating to the PREPA receivable. Our primary uses of capital have been for investing in property, plant and equipment used to provide our services and to acquire complementary businesses.

Liquidity

The following table summarizes our liquidity as of the dates indicated (in thousands):

(a) Net working capital (less cash, cash equivalents and restricted cash) is a non-GAAP measure and, at March 31, 2025, is calculated by subtracting total current liabilities of $105.0 million, cash and cash equivalents of $56.7 million and restricted cash of $21.6 million from total current assets of $186.6 million. As of December 31, 2024, net working capital (less cash, cash equivalents and restricted cash) is calculated by subtracting total current liabilities of $114.5 million, cash and cash equivalents of $61.0 million and restricted cash of $21.4 million from total current assets of $188.6 million.

As of May 2, 2025, we had unrestricted cash on hand of $135.4 million and no outstanding borrowings under our revolving credit facility and a borrowing base of $75.0 million, leaving an aggregate of $67.5 million of available borrowing capacity under this facility, after giving effect to $7.5 million of outstanding letters of credit and the requirement to maintain the reserves specified in the revolving credit facility out of the available borrowing capacity.

Cash Flows

The following table sets forth our cash flows for the periods indicated (in thousands):

Operating Activities

Net cash provided by operating activities was $2.7 million for the three months ended March 31, 2025, compared to $47.3 million for the three months ended March 31, 2024. The decrease in operating cash flows for the three months ended March 31, 2025 was primarily attributable to a $53.9 million decrease in receipts on accounts receivable, which was partially offset by an $11.3 million decrease in net loss.

Investing Activities

Net cash used in investing activities was $3.0 million for the three months ended March 31, 2025, compared to $1.1 million for the three months ended March 31, 2024. The increase in net cash used in investing activities for the three months ended March 31, 2025 is primarily due to an increase in purchases of property, plant and equipment of $3.1 million, which was partially offset by an increase in proceeds from the disposal of property, plant and equipment of $1.2 million.

The following table summarizes our purchases of property, plant and equipment by segment for the periods indicated (in thousands):

(a) Purchases primarily for upgrades to our pressure pumping fleet to reduce greenhouse gas emissions and maintenance for the three months ended March 31, 2025 and 2024.

(b) Purchases primarily for truck, tooling and other equipment for the three months ended March 31, 2025 and 2024.

(c) Purchases primarily for maintenance for the three months ended March 31, 2025.

(d) Purchases primarily for equipment for our remote accommodations and equipment rental services for the three months ended March 31, 2025 and 2024.

Financing Activities

Net cash used in financing activities was $3.8 million for the three months ended March 31, 2025, compared to $48.5 million for the three months ended March 31, 2024. Net cash used in financing activities for the three months ended March 31, 2025 was primarily attributable to payments on sale leaseback transactions of $3.2 million and principal payments on financing leases and equipment financing notes totaling $0.6 million. Net cash used in financing activities for the three months ended March 31, 2024 was primarily attributable to payments on financing transactions of $46.8 million, payments on sale leaseback transactions of $1.1 million and principal payments on financing leases and equipment financing notes totaling $0.5 million.

Effect of Foreign Exchange Rate on Cash

The effect of foreign exchange rate on cash was a nominal amount for the three months ended March 31, 2025 and 2024. The change was driven primarily by a favorable (unfavorable) shift in the weakness (strength) of the Canadian dollar relative to the U.S. dollar for the cash held in Canadian accounts, respectively.

Net Working Capital

Our net working capital totaled $81.5 million and $74.1 million, respectively, at March 31, 2025 and December 31, 2024. Our unrestricted cash balances were $56.7 million and $61.0 million at March 31, 2025 and December 31, 2024, respectively.

Revolving Credit Facility and Term Credit Facility

On October 16, 2023, we, as borrower, and certain of our direct and indirect subsidiaries, as guarantors, entered into a revolving credit agreement with the lenders party thereto and Fifth Third Bank, 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 our 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%.

At March 31, 2025 and December 31, 2024, the financial covenant under the revolving credit facility was the fixed charge 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 March 31, 2025 and the filing date of this Quarterly Report.

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 April 11, 2025, we entered into a second amendment to our revolving credit agreement to, among other things, do the following:

i. receive consent from Fifth Third Bank to effectuate the sale of 5 Star Electric, LLC, Higher Power Electric, LLC and Python Equipment LLC;

ii. permit the Company to repurchase up to the lesser of $50 million or 10 million shares of its common stock on or before March 31, 2026, so long as the aggregate amount of the Company’s unrestricted cash is greater than $50 million after each such repurchase;

iii.expand the Company’s investment opportunities to include equity securities and private investments; and

iv. add certain investments and qualified cash to the borrowing base calculation.

On October 16, 2023, we, as borrower, and certain of our 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 (“Wexford”), as administrative agent for the lenders (the “term credit facility”). The term credit facility was approved by the audit committee of our 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 our assets, inclusive of the subsidiary companies. The term credit facility also contained various affirmative and restrictive covenants. Interest under the term credit facility equaled the SOFR Interest Rate (as defined in the term credit facility) plus 7.50%; provided that we may elect to pay all or a portion of the accrued interest due with respect to any Interest Period (as defined in the term credit facility).

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.

There were no financial covenants applicable under the revolving credit facility at March 31, 2025 and December 31, 2024.

At May 2, 2025, our borrowing base was $75.0 million and we had no outstanding borrowings under our revolving credit facility, leaving an aggregate of $67.5 million of available borrowing capacity, after giving effect to $7.5 million of outstanding letters of credit and the requirement to maintain the reserves specified in the revolving credit facility out of the available borrowing capacity.

Cobra Assignment Agreement

On December 1, 2023, Cobra, as seller, and Mammoth, as guarantor, entered into an assignment agreement (the “Assignment Agreement”) with SPCP Group, LLC (“SPCP Group”), 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.

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

Repurchase Program Authorization

On August 10, 2023, our board of directors approved a stock repurchase program pursuant to which we would be

authorized to repurchase up to the lesser of $55 million or 10 million shares of its common stock, subject to the factors discussed below. Following the completion of the refinancing transactions discussed in this Quarterly Report, any stock repurchases under this program may be made opportunistically from time to time in open market or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Act of 1934, as amended, including any 10b5-1 plan, and will be subject to market conditions, applicable legal and contractual restrictions, liquidity requirements and other factors. The repurchase program has no time limit, does not require us to repurchase any specific number of shares and may be suspended from time to time, modified or discontinued by our board of directors at any time. Any common stock repurchased as part of such stock repurchase program will be cancelled and retired. We have not repurchased any shares of our common stock under the stock repurchase program at March 31, 2025 or to date.

Sale Leaseback Transactions

We were party to agreements with First National Capital, LLC, or FNC, whereby we sold certain assets from our infrastructure segment to FNC. Concurrent with the sale of assets, we entered into lease agreements whereby we leased back the assets. Under the agreements, we had the option to purchase the assets at the end of the lease term. During the fourth quarter of 2024, we purchased a portion of the assets for an aggregate purchase price of $10.9 million. During the first quarter of 2025, we purchased the remainder of the assets for a purchase price of $3.2 million.

Capital Requirements and Sources of Liquidity

As we pursue our business and financial strategy, we regularly consider which capital resources are available to meet our future financial obligations and liquidity requirement. We believe that our cash on hand, including the cash payments received to date under the Settlement Agreement with PREPA, operating cash flow, available borrowings under our currently undrawn credit facility and proceeds from divestitures will be sufficient to meet our short-term and long-term funding requirements, including funding our current operations, planned capital expenditures, debt service obligations and known contingencies.

During the three months ended March 31, 2025, our capital expenditures totaled $7.2 million. During 2025, we currently estimate that our aggregate capital expenditures for our existing entities will be approximately $12 million, depending upon industry conditions and our financial results. These capital expenditures include $5 million for our well completion segment, $3 million for our infrastructure segment, $1 million for our sand segment and $3 million for our other services, primarily related to our equipment rentals services.

Also, as noted above in this Quarterly Report, in response to market conditions and reduced demand, we have (i) temporarily shut down certain of our oilfield service offerings, including coil tubing, pressure control, flowback, crude oil hauling, cementing, acidizing and land drilling services, (ii) idled certain facilities, including our sand processing plant in Pierce County, Wisconsin and (iii) reduced our workforce across all of our operations. We continue to monitor market conditions to determine if and when we will recommence these services and operations and increase our workforce. Any such recommencement and expansion will further increase our liquidity requirements in advance of revenue generation.

In addition, while we regularly evaluate acquisition opportunities, we do not have a specific acquisition budget for 2025 since the timing and size of acquisitions cannot be accurately forecasted. We intend to continue to evaluate acquisition opportunities, including those in the renewable energy sector as well as transactions involving entities controlled by Wexford. Our acquisitions may be undertaken with cash, our common stock or a combination of cash, common stock and/or other consideration. In the event we make one or more acquisitions and the amount of capital required is greater than the amount we have available for acquisitions at that time, we could be required to reduce the expected level of capital expenditures and/or seek additional capital.

If we seek additional capital for any of the above or other reasons, we may do so through borrowings under the revolving credit facility, joint venture partnerships, sale leaseback transactions, asset sales, including potential sales of accounts receivable or other financing transactions, offerings of debt or equity securities or other means. Although we expect that our sources of capital will be adequate to fund our short-term and long-term liquidity requirements, we cannot assure you that this additional capital will be available on acceptable terms or at all. If we are unable to obtain funds we need, our ability to conduct operations, make capital expenditures, satisfy debt services obligations, pay litigation settlement obligations, fund contingencies and/or complete acquisitions that may be favorable to us will be impaired, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.

The demand, pricing and terms for our products and services are largely dependent upon the level of activity for the U.S. oil and natural gas industry, energy infrastructure industry and natural sand proppant industry. Industry conditions are influenced by numerous factors over which we have no control, including, but not limited to: the supply of and demand for oil and natural gas services, energy infrastructure services and natural sand proppant; demand for repair and construction of transmission lines, substations and distribution networks in the energy infrastructure industry and the level of expenditures of utility companies; the level of prices of, and expectations about future prices for, oil and natural gas and natural sand proppant, as well as energy infrastructure services; the cost of exploring for, developing, producing and delivering oil and natural gas; the expected rates of declining current production; the discovery rates of new oil and natural gas reserves and frac sand reserves meeting industry specifications and consisting of the mesh size in demand; access to pipeline, transloading and other transportation facilities and their capacity; weather conditions; domestic and worldwide economic conditions; political instability in oil-producing countries; environmental regulations; technical advances affecting energy consumption; the price and availability of alternative fuels; the ability of oil and natural gas producers and other users of our services to raise equity capital and debt financing; and merger and divestiture activity in industries in which we operate.

Throughout 2024, we continued to experience persistent challenges in our well completion and natural sand proppant services segments associated with lower U.S. onshore activity and sustained weakness in the natural gas basins in which we operate. Macroeconomic uncertainty, tariff implications and OPEC+ production increases have placed significant pressure on the energy market, and more specifically, commodity prices. This has widely softened expectations for activity levels throughout 2025. We expect 2025 completions activity to be relatively steady, with the potential for upside compared to 2024 driven by incremental demand associated with natural gas. Positive trends that may contribute to increased activity will come from LNG export capacity coming online and general electricity and power demand enhancements.

Although the levels of activity in the U.S. oil and natural gas exploration and production, energy infrastructure and natural sand proppant industries continue to improve, they have historically been and continue to be volatile. We are unable to predict the ultimate impact of the volatility in commodity prices, any changes in the near-term or long-term outlook for our industries or overall macroeconomic conditions on our business, financial condition, results of operations, cash flows and stock price.

Interest Rate Risk

We had a cash and cash equivalents balance of $56.7 million at March 31, 2025. Currently, we do not enter into investments for trading or speculative purposes. However, we may enter into these types of investments in the future.

Interest under our revolving credit facility equals the Tranche Rate (as defined in the revolving credit facility) plus an applicable margin, which can fluctuate based on multiple facts, including rates set by the U.S. Federal Reserve, the supply and demand for credit and general economic conditions, plus an applicable margin. At March 31, 2025, we had no outstanding borrowings under our revolving credit facility. We do not currently hedge our interest rate exposure.

Foreign Currency Risk

Our remote accommodations entity, which is included in our other services, generates revenue and incurs expenses that are denominated in the Canadian dollar. These transactions could be materially affected by currency fluctuations. Changes in currency exchange rates could adversely affect our consolidated results of operations or financial position. We also maintain cash balances denominated in the Canadian dollar. At March 31, 2025, we had $3.1 million of cash, in Canadian dollars, in Canadian accounts. A 10% increase in the strength of the Canadian dollar versus the U.S. dollar would have resulted in a nominal change to our pre-tax income at March 31, 2025. We have not hedged our exposure to changes in foreign currency exchange rates and, as a result, could incur unanticipated translation gains and losses.

Customer Credit Risk

We are also subject to credit risk due to concentration of our receivables from several significant customers. We generally do not require our customers to post collateral. The inability, delay or failure of our customers to meet their obligations to us due to customer liquidity issues or their insolvency or liquidation may adversely affect our business, financial condition, results of operations and cash flows. This risk may be further enhanced by the volatility in commodity prices, the reduction in demand for our services and challenging macroeconomic conditions.

Specifically, we had receivables due from PREPA totaling $20.0 million at March 31, 2025. PREPA is currently subject to bankruptcy proceedings pending in the U.S. District Court for the District of Puerto Rico. See Note 2. Basis of Presentation and Significant Accounting Policies—Accounts Receivable and —Concentrations of Credit Risk and Significant Customers and Note 18. Commitments and Contingencies—Litigation of our unaudited condensed consolidated financial statements.

Seasonality

We provide infrastructure services in the midwestern and western portions of the United States. We provide well completion and natural sand proppant services primarily in the Utica, Permian Basin, Eagle Ford, Marcellus, Granite Wash, Cana Woodford and Cleveland sand resource plays located in the continental U.S. We provide remote accommodations services in the oil sands in Alberta, Canada. We serve these markets through our facilities and service centers that are strategically located to serve our customers in Ohio, Texas, Oklahoma, Wisconsin, Colorado, California and Alberta, Canada. A portion of our revenue is generated in Ohio, Wisconsin, Pennsylvania, West Virginia and Canada where weather conditions may be severe. As a result, our operations may be limited or disrupted, particularly during winter and spring months, in these geographic regions, which would have a material adverse effect on our financial condition and results of operations. Our operations in Oklahoma and Texas are generally not affected by seasonal weather conditions.

Inflation and Trade Policies

Moderate inflationary pressures and uncertainty regarding recently enacted and potential future changes to international tariffs and trade policies may contribute to increases in the cost of certain goods, services and labor. Additionally, changes to international tariffs and trade policies may negatively impact our natural sand proppant services in relation to sales to Canadian customers. We continue to actively monitor the impact that inflationary pressures and trade policies may have on our business.

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.

At March 31, 2025, an evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that at March 31, 2025, our disclosure controls and procedures are effective.

Changes in Internal Control 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 March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

As of the date of this filing, our Company and operations continue to be subject to the risk factors previously disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K filed with the SEC on March 7, 2025. For a discussion of the recent trends and uncertainties impacting our business and risks associated with the recent Settlement Agreement with PREPA, see also “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Overview of Our Services and Industry Conditions.”