Mammoth Energy Services, Inc.: Form 10-Q for the period ended Mar 31, 2026

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, 2025, filed with the Securities and Exchange Commission, or the SEC, on March 6, 2026 and the section entitled “Cautionary Note Regarding Forward-Looking Statements” appearing elsewhere in this Quarterly Report.

Overview

We are an integrated, growth-oriented company focused on providing products and services to our customers primarily in the oil and natural gas and utility infrastructure industries. Our suite of services includes rental services, infrastructure services, natural sand proppant services, accommodation services and drilling services. Our rental services segment provides a wide range of equipment used in oilfield, construction and aviation activities. Our infrastructure services segment provides engineering, design and fiber optic services to the utility industry. Our natural sand proppant services segment mines, processes and sells natural sand proppant used for hydraulic fracturing. Our accommodation services provide housing, kitchen and dining, and recreational service facilities for workers located in remote areas away from readily available lodging. Our drilling services provides directional drilling to oilfield operators.

We are focused on driving returns through improved execution by prioritizing asset utilization, margin expansion, and capital efficiency across the portfolio. While macroeconomic uncertainty including tariffs and demand volatility continue to affect parts of the market, we remain proactive in repositioning Mammoth to perform through differing business cycles.

Business Developments

During 2025, we completed four strategic divestitures. On April 11, 2025, we sold a portion of our infrastructure services entities, including our distribution, transmission and substation operations, for aggregate proceeds of approximately $108.7 million, subject to customary post-closing adjustments. On June 16, 2025, we sold all of the equipment previously used in our hydraulic fracturing services for $15.0 million. On September 15, 2025, the Company completed the sale of assets related to its natural sand proppant operations at its Piranha Proppant LLC processing plant. On December 2, 2025, we completed the sale of our engineering services business, Aquawolf, for approximately $30.0 million, also subject to customary post-closing adjustments. The results of operations, financial position and cash flows for these businesses are reported as discontinued operations for all periods presented and discussed in this report. Unless otherwise indicated, the information presented in this Management’s Discussion and Analysis relates only to our continuing operations.

To reflect how management evaluates the business after these divestitures, prior period segment information in our results of operations below has been recast to conform with our segment composition as of March 31, 2026. See Note 3. Discontinued Operations of the notes to our unaudited condensed consolidated financial statements for more information.

Overview of Our Industries

Aircraft Industry

The operating environment for the lease of aircraft and aircraft assets is currently favorable. Factors such as population growth as well as global economic health and development are positively influencing both passenger and freight demand. In addition, factors and trends including Original Equipment Manufacturer supply chain challenges and backlogs, the financing needs of airlines and the availability of maintenance facilities as well as repair timelines may increase the demand for our aircraft and aircraft equipment.

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. The conflict in the Middle East, including attacks on regional energy infrastructure, has resulted in higher oil prices and the potential for multi-year LNG constraints. These factors have resulted in improved demand for our services, which we expect to continue through the remainder of 2026. 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.

Infrastructure Industry

The infrastructure industry involves the construction and maintenance of fiber networks. Demand for our services is driven by artificial intelligence (“AI”) and data center projects.

Certain barriers to entry exist in the markets in which we operate, including adequate financial resources, technical expertise, high safety ratings and a proven track record of operational success. We compete based upon our industry experience, technical expertise, financial and operational resources, geographic presence, industry reputation, safety record and customer service. While we believe our customers consider a number of factors when selecting a service provider, they generally award most of their work through a bid process. Consequently, price is often a principal factor in determining which service provider is selected.

We believe that AI and high-performance computing will drive the upgrade and overbuild of fiber networks in order to increase data capacity. Funding for projects in the infrastructure space remains strong with added opportunities since the Infrastructure Investment and Jobs Act ("IIJA") was signed into law on November 15, 2021. Federal and state agencies continue to implement multi‑year funding programs established under the IIJA, including substantial investments through Broadband Equity, Access and Deployment ("BEAD") program. These programs continue to support planned investment in broadband, utility, transportation, and clean‑energy projects. Although these programs were enacted several years ago, the implementation and distribution of funds remain ongoing and are expected to continue well into the latter half of the decade. Market participants across telecommunications, power, and energy‑transition sectors have announced substantial capital plans aligned with these programs, supported by federal incentives and growing private‑sector investment in areas such as fiber deployment, grid modernization, electrification, and data‑center‑related power demand.

Settlement Agreement with 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, 2026, 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, 2025, previously filed with the SEC for more information regarding the Settlement Agreement.

First Quarter 2026 Financial Overview

• Revenue for the first quarter of 2026 increased by $10.4 million, or 90%, to $22.0 million from $11.6 million for the first quarter of 2025. The increase in total revenue is primarily attributable to an increase in rental and aviation sales, accommodation and drilling services revenue.
• Net income for the first quarter of 2026 was $5.2 million, or $0.11 per diluted share, as compared to net loss of $0.5 million, or $(0.01) per diluted share, for the first quarter of 2025.
• Adjusted EBITDA for the first quarter of 2026 was $1.9 million as compared to ($2.3) million for the first quarter of 2025. See “Non-GAAP Financial Measures” for a reconciliation of net income (loss) from continuing operations to Adjusted EBITDA.

Future Results

We expect to generate positive adjusted EBITDA from continuing operations for the full year 2026.

Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

(in thousands)

Revenue. Revenue for the three months ended March 31, 2026 increased $10.4 million, or 90%, to $22.0 million from $11.6 million for the three months ended March 31, 2025. The increase in total revenue is primarily attributable to increases in revenue for rental, accommodation and drilling services during the three months ended March 31, 2026, which was partially offset by a decrease in revenue for infrastructure services and natural sand proppant services. Revenue by segment was as follows:

Rental Services and Aviation Sales. Rental services and aviation sales revenue increased $11.1 million, or 584%, to $13.0 million for the three months ended March 31, 2026 from $1.9 million for the three months ended March 31, 2025. The increase in our rental services and aviation sales revenue was primarily driven by a $10.0 million increase in aviation revenue, which was coupled with a 55% increase in equipment rental revenue. The increase in aviation revenue was a result of the sale of an auxiliary power unit for $6.5 million combined with increased utilization.

Infrastructure Services. Infrastructure services revenue decreased $0.4 million, or 57%, to $0.3 million for the three months ended March 31, 2026 from $0.7 million for the three months ended March 31, 2025. The decrease in revenue was primarily due to a decrease in fiber optic revenue related to decreased activity.

Natural Sand Proppant Services. Natural sand proppant services revenue decreased $2.8 million, or 42%, to $3.9 million for the three months ended March 31, 2026 from $6.7 million for the three months ended March 31, 2025 primarily due to a 18% decrease in tons of sand sold from 189,020 tons for the three months ended March 31, 2025 to 155,597 tons for the three months ended March 31, 2026, combined with a 9% decline in the average price per ton of sand sold from $21.49 per ton during the three months ended March 31, 2025 to $19.49 per ton during the three months ended March 31, 2026. Average price per ton of sand sold decreased primarily due to a shift of grade mix. Additionally, the three months ended March 31, 2025 included shortfall revenue of $1.6 million compared to none for the three months ended March 31, 2026. The decrease in revenue also reflects $0.1 million of lower customer freight reimbursements.

Accommodation Services. Accommodation services revenue increased $1.4 million, or 67%, to $3.5 million for the three months ended March 31, 2026 from $2.1 million for the three months ended March 31, 2025 primarily due to an increase in utilization. On average, 275 rooms were utilized during the three months ended March 31, 2026 as compared to 179 for the three months ended March 31, 2025 for our accommodation services.

Drilling Services. Drilling services revenue increased $1.2 million or 600% to $1.4 million for the three months ended March 31, 2026 from $0.2 million for the three months ended March 31, 2025 . The increase in our drilling services revenue was primarily attributable to increased utilization, which increased from 2% for the three months ended March 31, 2025 to 20% for the three months ended March 31, 2026, coupled with higher average day rates for our drilling services.

Cost of Revenue (exclusive of depreciation, depletion, amortization and accretion). Cost of revenue, exclusive of depreciation, depletion, amortization and accretion, increased $6.4 million from $10.1 million, or 75% of total revenue, for the three months ended March 31, 2025 to $16.5 million, or 87% of total revenue, for the three months ended March 31, 2026. Cost of revenue by segment was as follows:

Rental Services and Aviation Sales. Rental services and aviation sales cost of revenue, exclusive of depreciation and amortization, increased $6.7 million, or 479%, to $8.1 million for the three months ended March 31, 2026 from $1.4 million for the three months ended March 31, 2025, primarily due to the sale of an auxiliary power unit with a cost basis of $5.8 million, an increase in utilization, and the expansion of our aviation equipment offerings. As a percentage of revenue, our rental services cost of revenue, exclusive of depreciation and amortization of $2.6 million and $0.2 million for the three months ended March 31, 2026 and 2025, was 62% and 74%, respectively. The decrease as a percentage of revenue is primarily due to an increase in equipment utilization as well as higher margins associated with aviation rentals as compared to equipment rentals, resulting in improved absorption of fixed operating costs.

Infrastructure Services. Infrastructure services cost of revenue, exclusive of depreciation, decreased $0.4 million, or 44%, to $0.5 million for the three months ended March 31, 2026 from $0.9 million for the three months ended March 31, 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation of $0.1 million for the three months ended March 31, 2026 and 2025, was 167% and 129% for the three months ended March 31, 2026 and 2025, respectively. The increase as a percentage of revenue is primarily due to an increase in subcontractor expense.

Natural Sand Proppant Services. Natural sand proppant services cost of revenue, exclusive of depreciation, depletion and accretion, decreased $1.0 million, or 18%, to $4.5 million for the three months ended March 31, 2026 from $5.5 million for the three months ended March 31, 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation, depletion and accretion of $0.4 million and $0.9 million for the three months ended March 31, 2026 and 2025, was 115% and 82% for the three months ended March 31, 2026 and 2025, respectively. The increase in cost as a percentage of revenue is primarily due to an 18% decrease in tons sold and a 9% decline in average sales price per ton.

Accommodation Services. Accommodation services cost of revenue, exclusive of depreciation and accretion, increased $0.7 million, or 50%, to $2.1 million for the three months ended March 31, 2026 from $1.4 million for the three months ended March 31, 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation and accretion of $0.3 million for the three months ended March 31, 2026 and 2025, was 60% and 67% for the three months ended March 31, 2026 and 2025, respectively. The decrease as a percentage of revenue is primarily due to an increase in utilization, resulting in a lower ratio of fixed costs to variable costs.

Drilling Services. Drilling services cost of revenue, exclusive of depreciation, increased $0.8 million, or 200%, to $1.2 million for the three months ended March 31, 2026 from $0.4 million for the three months ended March 31, 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation of nominal amounts for the three months ended March 31, 2026 and 2025, was 86% and 200% for the three months ended March 31, 2026 and 2025, respectively. The decrease as a percentage of revenue is primarily due to an increase in utilization, resulting in a lower ratio of fixed costs to variable costs.

Other Services. Other services cost of revenue, exclusive of depreciation, decreased $0.3 million to $0.2 million for the three months ended March 31, 2026 from $0.5 million for the three months ended March 31, 2025. The decline is primarily due to decreased utilization, resulting in a higher proportion of fixed operating costs.

Selling, General and Administrative. Selling, general and administrative, or SG&A, represent the costs associated with managing and supporting our operations. SG&A decreased $0.5 million to $3.6 million for the three months ended March 31, 2026 from $4.1 million for the three months ended March 31, 2025. The decrease is primarily due to a decrease in legal fees.

Depreciation, Depletion, Amortization and Accretion. Depreciation, depletion, amortization and accretion totaled $3.5 million for the three months ended March 31, 2026 compared to $2.1 million for the three months ended March 31, 2025. The increase is primarily attributable to increased depreciation of property, plant and equipment resulting from aviation assets being placed into service.

Gains on Disposal of Assets, Net. Gains on the disposal of assets, net were $0.7 million compared to $3.5 million for the three months ended March 31, 2026 and 2025, respectively.

Operating Loss. We reported operating loss of $0.9 million for the three months ended March 31, 2026 compared to operating loss of $1.2 million for the three months ended March 31, 2025. The decrease in operating loss is primarily due to an increase in activity for our rental, accommodation and drilling services.

Interest Income, Net. Interest income, net of interest expense and financing charges was $0.5 million for the three months ended March 31, 2026 compared to $0.1 million for the three months ended March 31, 2025.

Unrealized Gain on Marketable Securities, Net. Unrealized gain on marketable securities, net was $7.1 million for the three months ended March 31, 2026 compared to zero for the three months ended March 31, 2025, as the Company did not hold marketable securities during the prior‑year period.

Other Income (Expense), Net. Other income, net was $0.6 million for the three months ended March 31, 2026 compared to other expense, net of $0.3 million for the three months ended March 31, 2025.

Provision for Income Taxes. We recorded income tax expense of $1.5 million on pre-tax income of $6.1 million for the three months ended March 31, 2026 compared to $0.8 million on pre-tax loss of $1.4 million for the three months ended March 31, 2025. Our effective tax rates were 23.7% and 59.4% for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate for the three months ended March 31, 2026 differed from the statutory rate of 21% primarily due to changes in the valuation allowance and interest and penalties recognized during the period. 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.

Discontinued Operations. We recorded net income from discontinued operations, net of income taxes totaling $0.5 million during the three months ended March 31, 2026 compared to $1.7 million for the three months ended March 31, 2025.

See Note 3 of the notes to our unaudited condensed consolidated financial statements for a breakout of the results of operations for our discontinued operations.

Non-GAAP Financial Measures

Adjusted EBITDA from Continuing Operations

Adjusted EBITDA from continuing operations 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 from continuing operations as net income (loss) from continuing operations before depreciation, depletion, amortization and accretion, gains on disposal of assets, net, stock based compensation, interest income, net, inclusive of related parties, unrealized gain on marketable securities, net, other 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) from continuing operations in arriving at Adjusted EBITDA from continuing operations 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 from continuing operations should not be considered as an alternative to, or more meaningful than, net income (loss) from continuing operations 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 from continuing operations 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 historical costs of depreciable assets, none of which are components of Adjusted EBITDA from continuing operations. Our computations of Adjusted EBITDA from continuing operations may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA from continuing operations 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 from continuing operations to net income (loss) from continuing operations, the most directly comparable GAAP financial measure for the specified periods (in thousands):

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. Our primary uses of capital have been for investing in property, plant and equipment used to provide our services and to acquire complementary assets and 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 calculated by subtracting total current liabilities, cash and cash equivalents and restricted cash from total current assets.

As of May 6, 2026, we had unrestricted cash on hand of $56.0 million, marketable securities of $32.6 million, no outstanding borrowings under our revolving credit facility and a borrowing base of $50.0 million, leaving an aggregate of $40.4 million of available borrowing capacity under this facility, after giving effect to $5.0 million of outstanding letters of credit. As of May 6, 2026, we had cash, cash equivalents and marketable securities of $88.6 million.

Cash Flows

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

Operating Activities from Continuing Operations

Net cash used in operating activities from continuing operations was $2.8 million for the three months ended March 31, 2026, compared to $0.5 million for the three months ended March 31, 2025. The decrease in operating cash flows from continuing operations for the three months ended March 31, 2026 was primarily attributable to a decline in receipts on accounts receivable, which was partially offset by an increase in net income from continuing operations.

Operating Activities from Discontinued Operations

Net cash used in operating activities from discontinued operations was $0.3 million for the three months ended March 31, 2026, compared to net cash provided by operating activities from discontinued operations of $3.2 million for the three months ended March 31, 2025. The decrease in operating cash flows from discontinued operations for the periods is primarily attributable to decreased receipt of outstanding receivables of the discontinued entities during the three months ended March 31, 2026.

Investing Activities from Continuing Operations

Net cash used in investing activities from continuing operations was $10.3 million for the three months ended March 31, 2026, compared to net cash provided by investing activities from continuing operations of $3.2 million for the three months ended March 31, 2025. The increase in net cash used in investing activities from continuing operations for the periods is primarily due to an increase in purchases of property, plant and equipment and purchases of marketable securities for the three months ended March 31, 2026.

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

(a) Capital expenditures primarily for expansion of our aviation rental fleet for the three months ended March 31, 2026 and equipment rental purchases for the three months ended March 31, 2025.

(b) Capital expenditures primarily for equipment for our fiber optic fleets for the periods presented.

(c) Capital expenditures primarily for equipment for the periods presented.

Investing Activities from Discontinued Operations

Net cash provided by investing activities from discontinued operations was $4.6 million for the three months ended March 31, 2026, compared to net cash used in investing activities from discontinued operations of $6.2 million for the three months ended March 31, 2025. The increase in net cash provided by investing activities from discontinued operations for the periods is primarily due to the sale of pressure pumping land and building during the three months ended March 31, 2026.

Financing Activities from Continuing Operations

Net cash used in financing activities from continuing operations was $0.5 million for the three months ended March 31, 2026, compared to $0.1 million for the three months ended March 31, 2025. The increase in net cash used in financing activities from continuing operations for the periods is primarily due to common stock repurchase and retirement, which was partially offset by a decrease in principal payments on financing leases and equipment notes for the three months ended March 31, 2026.

Financing Activities from Discontinued Operations

Net cash used in financing activities from discontinued operations was $3.7 million for the three months ended March 31, 2025. Net cash used in financing activities from discontinued operations for the periods is primarily attributable to payments on sale leaseback transactions and principal payments on financing leases for the three months ended March 31, 2025.

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, 2026 and 2025, respectively. 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.

Net Working Capital

Our net working capital totaled $109.5 million and $107.1 million at March 31, 2026 and December 31, 2025, respectively. Our unrestricted cash balances were $92.7 million and $102.0 million at March 31, 2026 and December 31, 2025, respectively.

Revolving 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 $50 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, 2026 and December 31, 2025, 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, 2026 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. In October 2025, Fifth Third Bank released the $18.4 million letter of credit previously issued under the Reimbursement Agreement with PREPA. As part of the release, the $19.3 million in cash collateral originally deposited on October 18, 2024 was returned to the Company. In addition, approximately $0.5 million of interest earned on the collateralized balance was transferred to the Company’s unrestricted cash account.

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 July 2, 2025, the Company entered into a letter agreement in relation to its revolving credit facility whereby the Revolving Loan Commitments are reduced from $75.0 million to $50.0 million.

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, 2026 and December 31, 2025.

As of May 6, 2026, our borrowing base was $50.0 million and we had no outstanding borrowings under our revolving credit facility, leaving an aggregate of $40.4 million of available borrowing capacity, after giving effect to $5.0 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.

On May 8, 2026, the Company entered into an agreement with Fifth Third Bank, which reduced the maximum availability from $50.0 million to $25.0 million. Pursuant to the agreement, the Company may, without obtaining lender consent, repurchase shares of its common stock. The agreement matures on May 8, 2029.

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 our common stock, subject to the factors discussed below. 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 repurchased and retired 187,668 shares of our common stock for approximately $0.4 million under the stock repurchase program during the three months ended March 31, 2026.

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, 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, 2026, our capital expenditures from continuing operations totaled $11.7 million. During 2026, we currently estimate that our aggregate capital expenditures, excluding aviation, will be approximately $23.0 million, depending upon industry conditions and our financial results. These capital expenditures primarily relate to our equipment rental services. Additional growth in our infrastructure division is expected to be financed through leasing arrangements.

In addition, while we regularly evaluate both aviation as well as acquisition opportunities, we do not have a specific acquisition budget for 2026 since the timing and size of aviation purchases or acquisitions cannot be accurately forecasted. We intend to continue to evaluate acquisition opportunities, including 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, 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, infrastructure services and natural sand proppant; demand for improvement and construction of fiber networks, fiber optic networks in the 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 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.

Although the levels of activity in the U.S. oil and natural gas and utility infrastructure 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 $92.7 million at March 31, 2026. Currently, we do not enter into derivative instruments to hedge our interest rate exposure. 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, 2026, we had no outstanding borrowings under our revolving credit facility.

Marketable Securities Risk

As of March 31, 2026, the recorded fair value of our equity investments in publicly traded companies was $32.4 million. These investments are subject to market price volatility, and current global economic conditions add further uncertainty. However, our holdings are concentrated in financially stable companies. Accordingly, we believe that a meaningful sensitivity analysis is not practicable.

Foreign Currency Risk

Our remote accommodation services segment 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, 2026, we had $5.1 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 income from continuing operations before income taxes at March 31, 2026. 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

The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. The Company's marketable securities portfolio consists of investment-grade securities. 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, 2026. 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 the notes to our unaudited condensed consolidated financial statements for further information.

Seasonality

We provide infrastructure services in the southwestern and midwestern portions of the United States. We provide natural sand proppant services primarily in the Utica and Montney shales. We provide drilling services primarily in the Permian Basin, Eagle Ford, Granite Wash, Cana Woodford and Cleveland sand resource plays located in the continental U.S. We provide remote accommodation 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 Operating 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 Operating 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, 2026, an evaluation was performed under the supervision and with the participation of management, including our Chief Operating 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 Operating Officer and Chief Financial Officer have concluded that at March 31, 2026, 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, 2026 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 6, 2026. For a discussion of the trends and uncertainties impacting our business and risks associated with the Settlement Agreement with PREPA, see also “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview of Our Industries—.”