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AESI

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-41828

Atlas Energy Solutions Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	93-2154509
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5918 W. Courtyard Drive, Suite 500 Austin, Texas	78730
(Address of principal executive offices)	(Zip Code)

(512) 220-1200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common stock, par value $0.01 per share

     AESI
 
     New York Stock Exchange
NYSE Texas, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 30, 2025, the registrant had 123,982,170 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	58
Item 4.	Controls and Procedures	59

PART II.	OTHER INFORMATION	60

Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	61
SIGNATURES		62

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Atlas Energy Solutions Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)


	September 30, 2025			December 31, 2024
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	41,349		$	71,704
Accounts receivable, net		184,625			165,967
Inventories		11,852			17,302
Spare part inventories, net		44,960			23,248
Prepaid expenses and other current assets		14,419			11,197
Total current assets		297,205			289,418
Property, plant and equipment, net		1,560,555			1,486,246
Operating lease right-of-use assets		12,098			13,632
Finance lease right-of-use assets		14,529			5,034
Goodwill		156,709			68,999
Intangible assets, net		189,224			105,867
Other long-term assets		3,152			3,456
Total assets	$	2,233,472		$	1,972,652
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	92,839		$	119,018
Accounts payable - related parties		37			226
Accrued liabilities		74,803			60,294
Current portion of long-term debt		38,069			43,736
Current portion of operating lease liabilities		1,309			6,622
Current portion of finance lease liabilities		4,010			2,811
Current portion of deferred revenue		2,999			7,755
Other current liabilities		6,503			2,603
Total current liabilities		220,569			243,065
Long-term debt, net of discount and deferred financing costs		518,427			466,989
Deferred tax liabilities		228,444			206,872
Operating lease liabilities		11,587			7,454
Finance lease liabilities		10,212			2,483
Asset retirement obligation		7,000			7,040
Other long-term liabilities		13,848			2,193
Total liabilities		1,010,087			936,096
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value; 500,000,000 authorized; no shares issued and outstanding as of September 30, 2025 and December 31, 2024.		—			—
Common Stock, $0.01 par value, 1,500,000,000 shares authorized, 123,691,077 shares and 110,217,322 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively.		1,237			1,102
Additional paid-in-capital		1,250,208			1,035,454
Accumulated deficit		(28,060	)		—
Total stockholders’ equity		1,223,385			1,036,556
Total liabilities and stockholders’ equity	$	2,233,472		$	1,972,652

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

Atlas Energy Solutions Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Product revenue	$	106,839		$	145,347		$	372,812		$	386,989
Service revenue		135,643			159,087			432,607			397,630
Rental revenue		17,131			—			40,461			—
Total revenue		259,613			304,434			845,880			784,619
Cost of sales (excluding depreciation, depletion and accretion expense)		195,230			225,347			597,197			534,229
Depreciation, depletion and accretion expense		40,619			26,069			118,252			68,271
Gross profit		23,764			53,018			130,431			182,119
Selling, general and administrative expense (including stock-based compensation expense of $9,344, $6,289, $24,152, and $15,961, respectively)		36,322			25,463			105,105			80,712
Credit loss expense		97			—			4,207			25
Amortization expense of acquired intangible assets		5,883			3,744			17,133			8,573
Loss on disposal of assets		—			8,574			—			19,672
Insurance recovery (gain)		—			—			—			(10,000	)
Operating income (loss)		(18,538	)		15,237			3,986			83,137
Interest (expense), net		(15,010	)		(11,193	)		(41,886	)		(26,629	)
Other income (expense), net		(3	)		289			626			450
Income (loss) before income taxes		(33,551	)		4,333			(37,274	)		56,958
Income tax expense (benefit)		(9,830	)		415			(9,214	)		11,416
Net income (loss)	$	(23,721	)	$	3,918		$	(28,060	)	$	45,542

Net income (loss) per common share
Basic	$	(0.19	)	$	0.04		$	(0.23	)	$	0.42
Diluted	$	(0.19	)	$	0.04		$	(0.23	)	$	0.42
Weighted average common shares outstanding
Basic		123,737			109,883			121,899			107,570
Diluted		123,737			111,078			121,899			108,562

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

Atlas Energy Solutions Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands)


	Common Stock					Additional						Stockholders’
	Shares			Value		Paid-In-Capital			Accumulated Deficit			Equity
Balance at December 31, 2024		110,217		$	1,102	$	1,035,454		$	—		$	1,036,556
Net loss		—			—		—			(28,060	)		(28,060	)
Dividends		—			—		(92,281	)		—			(92,281	)
Dividend equivalent rights		—			—		(2,505	)		—			(2,505	)
Stock-based compensation		—			—		24,152			—			24,152
Repurchases of Common Stock under share repurchase program		(16	)		—		(200	)		—			(200	)
Issuance of Common Stock upon vesting of RSUs, net of shares withheld for income taxes		334			3		(1,254	)		—			(1,251	)
Issuance of Common Stock from equity offering, net of issuance costs		11,500			115		252,955			—			253,070
Equity issued in connection with Moser Acquisition		1,656			17		33,887			—			33,904
Balance at September 30, 2025		123,691		$	1,237	$	1,250,208		$	(28,060	)	$	1,223,385


	Common Stock					Additional			Retained Earnings			Stockholders’
	Shares			Value		Paid-In-Capital			(Accumulated Deficit)			Equity
Balance at December 31, 2023		100,026		$	1,000	$	908,079		$	(41,255	)	$	867,824
Net income		—			—		—			45,542			45,542
Dividends		—			—		(66,157	)		(4,287	)		(70,444	)
Dividend equivalent rights		—			—		(1,784	)		—			(1,784	)
Stock-based compensation		—			—		15,961			—			15,961
Issuance of Common Stock upon vesting of RSUs, net of shares withheld for income taxes		138			1		(1	)		—			—
Equity issued in connection with Hi-Crush Transaction		9,711			97		188,985			—			189,082
Balance at September 30, 2024		109,875		$	1,098	$	1,045,083		$	—		$	1,046,181

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

Atlas Energy Solutions Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Nine Months Ended September 30,
	2025			2024
Operating activities:
Net income (loss)	$	(28,060	)	$	45,542
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and accretion expense		122,029			70,865
Amortization expense of acquired intangible assets		17,133			8,573
Amortization of debt discount		3,931			2,535
Amortization of deferred financing costs		301			318
Loss on disposal of assets		—			19,672
Stock-based compensation		24,152			15,961
Deferred income tax		(10,830	)		10,433
Credit loss expense		4,207			25
Other		(104	)		(1,680	)
Changes in operating assets and liabilities:
Accounts receivable		(11,950	)		(22,361	)
Inventories		5,450			(5,093	)
Spare part inventories		(10,693	)		(3,613	)
Prepaid expenses and other current assets		(2,998	)		(2,387	)
Other long-term assets		203			(412	)
Accounts payable		(5,709	)		27,373
Accounts payable - related parties		(204	)		(42	)
Deferred revenue		(5,679	)		(5,460	)
Accrued liabilities and other liabilities		12,460			25,358
Net cash provided by operating activities		113,639			185,607
Investing activities:
Purchases of property, plant and equipment		(126,463	)		(297,552	)
Acquisitions, net of cash acquired		(204,169	)		(142,233	)
Proceeds from insurance recovery		5,398			10,000
Net cash used in investing activities		(325,234	)		(429,785	)
Financing Activities:
Proceeds from equity offering, net of issuance costs		253,070			—
Proceeds from term loan borrowings		188,805			148,500
Principal payments on term loan borrowings		(14,202	)		(9,931	)
Payment on ABL credit facility		(70,000	)		—
Payment on Deferred Cash Consideration Note		(101,252	)		—
Payments under finance leases		(2,632	)		(1,774	)
Repurchases of Common Stock under share repurchase program		(200	)		—
Repayment of equipment finance notes		(3,671	)		(2,527	)
Dividends		(92,281	)		(70,444	)
Taxes withheld on vesting RSUs		(1,251	)		—
Issuance costs associated with debt financing		(146	)		(1,183	)
Proceeds from ABL credit facility		25,000			50,000
Net cash provided by financing activities		181,240			112,641
Net decrease in cash and cash equivalents		(30,355	)		(131,537	)
Cash and cash equivalents, beginning of period		71,704			210,174
Cash and cash equivalents, end of period	$	41,349		$	78,637
Supplemental cash flow information
Cash paid during the period for:
Interest	$	38,930		$	27,602
Taxes	$	1,745		$	2,275
Supplemental disclosure of non-cash investing activities:
Property, plant and equipment in accounts payable and accrued liabilities	$	10,867		$	44,654
Acquisition consideration, equity issuance	$	33,904		$	189,082
Contingent consideration issued for PropFlow Acquisition	$	10,200		$	—
Equipment assets acquired through debt	$	17,117		$	5,012
Hi-Crush acquisition consideration, Deferred Cash Consideration Note	$	—		$	107,189

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

Atlas Energy Solutions Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 – Business and Organization

Atlas Energy Solutions Inc., a Delaware corporation (f/k/a New Atlas HoldCo. Inc.) (“New Atlas” and together with its subsidiaries “we,” “us,” “our,” or the “Company”), was formed on June 28, 2023, pursuant to the laws of the State of Delaware, and is the successor to AESI Holdings Inc. (f/k/a Atlas Energy Solutions Inc.), a Delaware corporation (“Old Atlas”). New Atlas is a holding company and the ultimate parent company of Atlas Sand Company, LLC (“Atlas LLC”), a Delaware limited liability company formed on April 20, 2017. The Company has two segments, the sand and logistics segment and the power segment.

Sand and Logistics

The Company is a producer of high-quality, locally sourced 100 mesh and 40/70 sand used as a proppant during the well completion process. Proppant is necessary to facilitate the recovery of hydrocarbons from oil and natural gas wells. One hundred percent of Atlas LLC’s sand reserves are located in Texas within the Permian Basin and operations consist of proppant production and processing facilities, including four facilities near Kermit, Texas (together, the “Kermit facilities”), a fifth facility near Monahans, Texas (the “Monahans facility”), and the OnCore distributed mining network. We sell products and services primarily to oil and natural gas exploration and production companies and oilfield services companies primarily under supply agreements and also through spot sales on the open market. We operate a differentiated logistics platform that is designed to increase the efficiency, safety and sustainability of the oil and natural gas industry within the Permian Basin. This includes our fleet of fit-for-purpose trucks, trailers, wellsite equipment, and the Dune Express, an overland conveyor infrastructure solution.

Power

We provide distributed power solutions through a fleet of natural gas-powered reciprocating generators primarily supporting production and artificial lift operations across major United States resource basins.

PropFlow Acquisition

On July 28, 2025, Atlas LLC entered into a membership interest purchase agreement (the “PropFlow Purchase Agreement”) with BCA HoldCo, LLC, a Delaware limited liability company (“BCA HoldCo”), and certain other signatories thereto, pursuant to which Atlas LLC acquired 100% of the membership interests in PropFlow, LLC, a Delaware limited liability company (“PropFlow”), and its wholly owned subsidiaries (such transaction, the “PropFlow Acquisition”). Refer to Note 3 - Acquisitions for further discussion.

Moser Acquisition

On February 24, 2025 (“Moser Closing Date”), the Company completed the acquisition of (i) 100% of the authorized, issued and outstanding equity ownership interests in Moser Acquisition, Inc., a Delaware corporation (“Moser AcquisitionCo”), and (ii) Moser Engine Service, Inc. (d/b/a Moser Energy Systems), a Wyoming corporation and a wholly-owned subsidiary of Moser AcquisitionCo (such transaction, the “Moser Acquisition”), collectively referred to as “Moser,” pursuant to that certain Stock Purchase Agreement (the “Moser Purchase Agreement”) by and among Wyatt Holdings, LLC, a Delaware limited liability company and an indirectly wholly-owned subsidiary of the Company (the “Purchaser”), Moser Holdings, LLC, a Delaware limited liability company (the “Seller”), and for the limited purposes set forth therein, the Company (together with the Purchaser and the Seller, the “Parties”). Refer to Note 3 - Acquisitions for further discussion.

The foregoing description of the Moser Acquisition and the Moser Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Moser Purchase Agreement, a copy of which is filed as Exhibit 2.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 6, 2025.

Hi-Crush Transaction

On March 5, 2024 (“Hi-Crush Closing Date”), the Company completed the acquisition of the Permian Basin proppant production and logistics businesses and operations of Hi-Crush Inc., a Delaware corporation (“Hi-Crush”), in exchange for mixed consideration totaling $456.1 million, subject to customary post-closing adjustments (the “Hi-Crush Transaction”), pursuant to that certain Agreement and Plan of Merger, dated February 26, 2024 (the “Hi-Crush Merger Agreement”), by and among the Company, Atlas LLC, Wyatt Merger Sub 1 Inc., a Delaware corporation and direct, wholly-owned subsidiary of Atlas LLC, Wyatt Merger Sub 2, LLC, a Delaware limited liability company and direct, wholly-owned subsidiary of Atlas LLC, Hi-Crush, each stockholder of Hi-Crush as of immediately prior to the effective time of the mergers pursuant to the Hi-Crush Merger Agreement (each a “Hi-Crush Stockholder” and, collectively, the “Hi-Crush Stockholders”), Clearlake Capital Partners V Finance, L.P., solely in its capacity as the Hi-Crush Stockholders’ representative and HC Minerals Inc., a Delaware corporation (collectively, the “Parties”). Refer to Note 3 - Acquisitions for further discussion.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the requirements of the SEC. All adjustments necessary for a fair presentation of the Financial Statements have been included. Such adjustments are of a normal, recurring nature. These Financial Statements include the accounts of New Atlas, Old Atlas, Atlas Sand Operating, LLC, a Delaware limited liability company, Atlas LLC, and Atlas LLC’s wholly-owned subsidiaries: Atlas Sand Employee Company, LLC; Atlas OLC Employee Company, LLC; Atlas Construction Employee Company, LLC; Atlas Sand Employee Holding Company, LLC; Fountainhead Logistics Employee Company, LLC; Atlas Sand Construction, LLC; OLC Kermit, LLC; OLC Monahans, LLC; Fountainhead Logistics, LLC; Fountainhead Transportation Services, LLC; and Fountainhead Equipment Leasing, LLC.

The Company acquired PropFlow and its wholly-owned subsidiaries on July 28, 2025. These Financial Statements include the accounts of PropFlow and the following wholly-owned subsidiaries of PropFlow: PropFlow Operating, LLC; PropFlow International, LLC; and PropFlow Employee Co., LLC.

The Company acquired Moser on February 24, 2025. These Financial Statements include the accounts of Moser AcquisitionCo and Moser Engine Service, Inc. (d/b/a Moser Energy Systems).

The Company acquired Hi-Crush and certain of its wholly-owned subsidiaries on March 5, 2024. These Financial Statements include the accounts of Hi-Crush Operating, LLC (“Hi-Crush Operating”) (f/k/a Hi-Crush Inc.) and the following wholly-owned subsidiaries of Hi-Crush Operating: Hi-Crush LMS LLC; Hi-Crush Investments LLC; OnCore Processing LLC; Hi-Crush Permian Sand LLC; Hi-Crush PODS LLC; NexStage LLC; FB Logistics LLC; BulkTracer Holdings LLC; PropDispatch LLC; Pronghorn Logistics Holdings, LLC; and Pronghorn Logistics, LLC.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any other period. The Financial Statements and these notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024 included within the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Consolidation

The Financial Statements include the accounts of the Company and controlled subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.

Use of Estimates

The preparation of the Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these Financial Statements include, but are not limited to: the proppant reserves and their impact on calculating the depletion expense under the units-of-production method; the depreciation and amortization associated with property, plant and equipment; stock-based compensation; asset retirement obligations; business combinations; valuation of goodwill and acquired intangible assets; contingent consideration; and certain liabilities. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Business Combination

Business combinations are accounted for using the acquisition method of accounting in accordance with the Accounting Standards Codification (“ASC”) 805, “Business Combinations.” The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. Fair value of the acquired assets and liabilities is measured in accordance with the guidance of ASC 820, “Fair Value Measurement.” Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill. Any acquisition-related costs incurred by the Company are expensed as incurred. Operating results of an acquired business are included in the Company’s results of operations from the date of acquisition. We use all available information to estimate fair values, including quoted market prices, the carrying value of acquired assets and assumed liabilities and valuation techniques such as discounted cash flows, relief-from-royalty (“RFR”) method, with or without method, multi-period excess earnings method (“MPEEM”), or cost to recreate method. We engage third-party appraisal firms to assist in the fair value determination of identifiable long-lived assets, identifiable intangible assets, as well as any contingent consideration that provides for additional consideration to be paid to the seller if certain future conditions are met. These estimates are reviewed during the 12-month measurement period and adjusted as soon as the necessary information becomes available but no later than one year from the acquisition date. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact our financial condition or results of operations. The purchase price associated with business combinations can include a holdback liability. The holdback is subject to changes from estimated to actual net working capital amounts and other customary purchase price adjustments. The holdback amount is based on management’s best estimate and may be subject to further adjustments. This amount is recorded in other current liabilities on our condensed consolidated balance sheets.

Since the closing date of the acquisitions, the acquired companies have adopted all of the Company’s accounting policies.

Cash and Cash Equivalents

Cash and cash equivalents consist of all highly-liquid investments that are readily convertible into cash and have original maturities of three months or less when purchased. As of September 30, 2025, we have deposits of $13.1 million in an Insured Cash Sweep (“ICS”) Deposit Placement Agreement within IntraFi Network LLC facilitated by our bank. The ICS program provides the Company with access to Federal Deposit Insurance Corporation (“FDIC”) insurance for our total cash held within the ICS. We place our remaining cash deposits with high-credit-quality financial institutions. At times, a portion of our cash may be uninsured or in deposit accounts that exceed or are not covered under the FDIC limit.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at cost when earned and represent claims against third parties that will be settled in cash. These receivables generally do not bear interest. The carrying value of our receivables, net of allowance for credit losses, represents the estimated collectable amount. If events or changes in circumstances indicate specific receivable balances may be impaired, further consideration is given to our ability to collect those balances and the allowance is adjusted accordingly. We perform credit evaluations of new customers, and sometimes require deposits and prepayments, to mitigate credit risk. When it is probable that all or part of an outstanding balance will not be collected, we establish an allowance for credit losses.

We are exposed to credit losses primarily through sales of products, services, and rentals. We analyze accounts receivable on an individual customer and overall basis through review of historical collection experience and current aging status of our customer accounts. We also consider the financial condition and economic environment of our customers in evaluating the need for an allowance. The Company considers its trade receivables to consist of two portfolio segments: general receivables and shortfall receivables.

General Receivables

General receivables result from fulfilling a performance obligation associated with a customer contract. For general receivables, which were $131.8 million as of September 30, 2025, we recognized credit loss expense of $0.1 million for both the three and nine months ended September 30, 2025. For the three months ended September 30, 2024, we did not recognize credit loss expense and for the nine months ended September 30, 2024, we recognized de minimis credit loss expense. On the condensed consolidated statement of operations, the nine months ended September 30, 2024 credit loss expense was reclassified out of selling, general and administrative expense to credit loss expense for comparable presentation with the current period. On the condensed consolidated statement of cash flows for the nine months ended September 30, 2024, we reclassified certain operating activities for comparable presentation with the current period resulting in no change to net cash provided by operating activities.

Shortfall Receivables

Shortfall receivables result when a customer does not meet the minimum purchases over a period of time defined in the applicable contract. For the shortfall receivables, which were $34.2 million as of September 30, 2025, we did not recognize credit loss expense for the three months ended September 30, 2025 and recognized $4.1 million of credit loss expense for the nine months ended September 30, 2025, due to a dispute with a counterparty that was estimated using the discounted cash flows methodology. For both the three and nine months ended September 30, 2024 we did not recognize credit loss expense.

As of September 30, 2025 and December 31, 2024, we had $4.6 million and $0.3 million in allowance for credit losses, respectively. Allowance for credit losses is included in accounts receivable on the condensed consolidated balance sheets.

As of September 30, 2025, five customers represented 19.7%, 13.8%, 12.8%, 11.4%, and 10.3% of the Company’s outstanding accounts receivable trade balance. As of December 31, 2024, two customers represented 22.2% and 11.2% of the Company’s outstanding accounts receivable trade balance.

Inventories

Inventories include raw sand stockpiles, in-process product, and finished product available for shipment. Inventories are valued at the lower of cost or net realizable value. Cost is determined using a weighted average cost method. Production costs include direct excavation costs, production personnel and benefits costs, processing costs, rental equipment costs, other costs directly attributable to plant operations, depreciation, and depletion.

Spare Part Inventories

Spare part inventories include critical spares, materials and supplies used in the sand and logistics segment along with equipment parts used in the power segment. Spare part inventories are valued at the lower of cost or net realizable value. Cost is determined using a weighted average cost method.

Goodwill and Acquired Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill is not amortized, but is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that the carrying value may not be recoverable. Judgments regarding indicators of potential impairment are based on market conditions and operational performance of our business. We may assess our goodwill for impairment initially using a qualitative approach to determine whether conditions exist that indicate it is more likely than not that the carrying value is greater than its fair value, and if such conditions are identified, then a quantitative analysis will be performed to determine if there is any impairment. The fair value is determined using significant unobservable inputs, or Level 3 in the fair value hierarchy. These inputs are based on internal management estimates, forecasts, and significant judgment. If the carrying amount exceeds the fair value, an impairment loss is recognized in the current period in an amount equal to the excess.

The Company amortizes the cost of definite-lived intangible assets on a straight-line basis over their estimated useful lives of 2 to 10 years. These assets are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of the definite-lived intangible assets may not be recoverable.

Other Intangible Assets

Other intangible assets consist of internal-use software. The Company applies the provisions of ASC 350, “Intangibles-Goodwill and Other.” Costs associated with the acquisition of an internal-use software are capitalized when incurred and amortized over the estimated useful life of the license or application, which is generally 1 to 5 years. As of September 30, 2025 and December 31, 2024, the balance of other intangible assets was $4.6 million and $3.1 million, respectively.

Amortization expense associated with the other intangibles was $0.3 million and $0.8 million for the three and nine months ended September 30, 2025, respectively. Amortization expense associated with the other intangibles was $0.2 million and $0.4 million for the three and nine months ended September 30, 2024, respectively. The amortization expense is recorded in depreciation, depletion and accretion expense in the condensed consolidated statements of operations and condensed consolidated statements of cash flows.

Property, Plant and Equipment, Including Depreciation and Depletion

Property, plant and equipment are recorded at cost and depreciated over their estimated useful lives using either the straight-line method or the units of production method. Construction in progress is comprised of assets which have not been placed into service and is not depreciated until the related assets or improvements are ready to be placed into service.

Costs of improvements and remanufacturing of power equipment that extend economic life or improve service potential are capitalized and depreciated over the remaining useful life of the asset, with routine repairs and maintenance expensed as incurred.

Fixed assets are carried at historical cost. Fixed assets, other than plant facilities associated with productive, depletable properties, are depreciated using the straight-line method over the estimated useful lives of the assets as follows:


Plant facilities and equipment		1 – 40 years
Furniture and office equipment		3 – 15 years
Computer and network equipment		3 – 7 years
Buildings and leasehold improvements		5 – 40 years
Logistics equipment (1)		2 – 40 years
Power equipment		1 – 15 years

(1) Logistics equipment consists of our fleet of fit-for-purpose trucks and trailers, wellsite equipment, and the Dune Express.

Mine development project costs are capitalized once the deposit is classified as a proven and probable reserve. Mine development costs include engineering, mineralogical studies, drilling and other related costs to develop the mine and remove the overburden to initially expose the mineral and allow for the construction of an access way. Exploration costs are expensed as incurred and classified as exploration expense.

Mining property and development costs are amortized using the units of production method on estimated recoverable tonnage, which equals estimated proven and probable reserves. The impact to reserve estimates is recognized on a prospective basis. Drilling and related costs are capitalized for deposits where proven and probable reserves exist. These activities are directed at obtaining additional information on the deposit or converting non-reserve minerals to proven and probable reserves, with the benefit being realized over a period greater than one year.

Impairment or Disposal of Property, Plant and Equipment

The Company periodically evaluates whether current events or circumstances indicate that the carrying value of our property, plant and equipment assets may not be recoverable. If circumstances indicate that the carrying value may not be recoverable, the Company estimates future undiscounted net cash flows using estimates, including but not limited to estimates of proven and probable sand reserves, estimated future sales prices (considering historical and current prices, price trends and related factors), operating costs and anticipated capital expenditures. If the undiscounted cash flows are less than the carrying value of the assets, the Company recognizes an impairment loss equal to the amount by which the carrying value exceeds the fair value of the assets.

The recoverability of the carrying value of the Company’s mining property and development costs are dependent upon the successful development and commercial production of the Company’s mineral deposit and the related processing facilities. The Company’s evaluation of mineral properties for potential impairment primarily includes evaluating changes in the mineral reserves, or the underlying estimates and assumptions, including estimated production costs. Assessing the economic feasibility requires certain estimates including the prices of products to be produced and processing recovery rates, as well as operating and capital costs.

Asset Retirement Obligations

In accordance with ASC 410-20, “Asset Retirement Obligations”, the Company records a liability for asset retirement obligations at the fair value of the estimated costs to retire a tangible long-lived asset at the time the liability is incurred, when there is a legal obligation to incur costs to retire the asset and when a reasonable estimate of the fair value of the obligation can be made. The Company has asset retirement obligations with respect to certain assets due to various contractual obligations to clean and/or dispose of those assets at the time they are retired.

A liability for the fair value of an asset retirement obligation, with a corresponding increase to the carrying value of related long-lived assets, is recognized at the time of an obligating event. The asset is depreciated using the straight-line method, and the discounted liability is increased through accretion over the expected timing of settlement.

The estimated liability is based on third-party estimates of costs to abandon, including estimated economic lives and external estimates as to the cost to bring the land to a state required by the lease agreements. The Company utilized a discounted rate reflecting management’s best estimate of the credit-adjusted risk-free rate. Revisions to the liability could occur due to changes in the estimated costs, changes in the economic life or if federal or state regulators enact new requirements regarding the abandonment. Accretion expense was $0.2 million and $0.6 million for the three and nine months ended September 30, 2025, respectively. Accretion expense was $0.2 million and $0.5 million for the three and nine months ended September 30, 2024, respectively. Accretion is recorded on the condensed consolidated statement of operations in depreciation, depletion and accretion expense. The current portion of the asset retirement obligation, $0.9 million, is recorded within other current liabilities and the long-term portion, $7.0 million, is recorded within asset retirement obligations on the Company’s condensed consolidated balance sheets.

Changes in the asset retirement obligations are as follows (in thousands):


	Nine Months Ended September 30,
	2025			2024
Beginning Balance	$	7,817		$	2,705
Revision of estimates		366			—
Additions to liabilities		—			6,743
Accretion expense		566			456
Settlements		(860	)		(1,057	)
Ending Balance	$	7,889		$	8,847

Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The amounts reported in the balance sheets as current assets or liabilities, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities and deferred revenues approximate fair value due to the short-term maturities of these instruments. The Company’s policy is to recognize transfers between levels at the end of the period. This disclosure does not impact the Company’s financial position, results of operations or cash flows.

As of the dates indicated, our debt consisted of the following (in thousands):


	At September 30, 2025				At December 31, 2024
	Carrying Value		Fair Value		Carrying Value		Fair Value		Valuation Technique
Financial liabilities
Outstanding principal amount of the 2025 Term Loan Credit Facility	$	504,868	$	603,709	$	—	$	—	Level 2 – Market Approach
Outstanding principal amount of the of the Deferred Cash Consideration Note	$	9,124	$	10,058	$	108,519	$	110,598	Level 2 – Market Approach
Outstanding principal amount of the 2023 ABL Credit Facility	$	25,000	$	25,000	$	70,000	$	70,000	Level 1 – Quoted Prices
Outstanding amount of the other indebtedness	$	17,504	$	17,504	$	4,058	$	4,058	Level 1 – Quoted Prices
Outstanding principal amount of the Initial Term Loan under the 2023 Term Loan Credit Facility	$	—	$	—	$	174,141	$	193,523	Level 2 – Market Approach
Outstanding principal amount of the ADDT Loan	$	—	$	—	$	134,013	$	149,266	Level 2 – Market Approach
Outstanding principal amount of the DDT Loan under the 2023 Term Loan Credit Facility	$	—	$	—	$	19,994	$	22,145	Level 2 – Market Approach

•

Our 2025 Term Loan Credit Facility (defined in Note 8 - Debt) with Stonebriar Commercial Finance LLC (“Stonebriar”), pursuant to which Stonebriar extended a $540.0 million single advance term loan, bears interest at a rate equal to 9.51% per annum. The loan is payable in eighty-five consecutive monthly installments, consisting of forty-eight monthly installments of combined principal and interest, thirty-six installments of interest only payments, and a final payment of the remaining outstanding principal balance at maturity. As of September 30, 2025, the fair value of debt has been determined by discounting the future cash flows using current market interest rates for similar financial instruments. These inputs are not quoted prices in active markets, but they are either directly or indirectly observable; therefore, they are classified as Level 2 inputs.

•

The Deferred Cash Consideration Note (defined in Note 8- Debt) entered into in connection with the Hi-Crush Transaction was recorded at fair value as of the acquisition date. As of September 30, 2025 and December 31, 2024, the fair value of debt has been determined by discounting the future cash flows using current market interest rates for similar financial instruments. These inputs are not quoted prices in active markets, but they are either directly or indirectly observable; therefore, they are classified as Level 2 inputs.

•

The carrying amount of the Company’s 2023 ABL Credit Facility (defined in Note 8- Debt) approximated fair value as it bears interest at variable rates over the term of the loan. Therefore, we have classified this long-term debt as Level 1 of the fair value hierarchy.

•

We believe the fair value of our other indebtedness approximates the carrying value. This balance is comprised of equipment financing agreements. We considered the rates entered into for 2025 equipment financing agreements for the same equipment. Therefore we have classified this debt as Level 1 of the fair value hierarchy.

•

Our Initial Term Loan under the 2023 Term Loan Credit Facility (defined in Note 8 - Debt) with Stonebriar, pursuant to which Stonebriar extended a $180.0 million single advance seven-year term loan credit facility that bears interest at a fixed rate of 9.50%, where its fair value will fluctuate based on changes in interest rates and credit quality. As of December 31, 2024, the fair value of debt has been determined by discounting the future cash flows using current market interest rates for similar financial instruments. These inputs are not quoted prices in active markets, but they are either directly or indirectly observable; therefore, they are classified as Level 2 inputs.

•

Our ADDT Loan (defined in Note 8 - Debt) with Stonebriar in the aggregate principal amount of $150.0 million, payable in 76 consecutive monthly installments, bears interest at a fixed rate of 10.86%, where its fair value will fluctuate based on changes in interest rates and credit quality. As of December 31, 2024, the fair value of debt has been determined by discounting the future cash flows using current market interest rates for similar financial instruments. These inputs are not quoted prices in active markets, but they are either directly or indirectly observable; therefore, they are classified as Level 2 inputs.

•

Our DDT Loan under the 2023 Term Loan Credit Facility (defined in Note 8 - Debt) with Stonebriar in the aggregate principal amount of $20.0 million, payable in 69 consecutive monthly installments, bears interest at a fixed rate of 10.58%, where its fair value will fluctuate based on changes in interest rates and credit quality. As of December 31, 2024, the fair value of debt has been determined by discounting the future cash flows using current market interest rates for similar financial instruments. These inputs are not quoted prices in active markets, but they are either directly or indirectly observable; therefore, they are classified as Level 2 inputs.

See Note 8 - Debt for further discussion on our debt arrangements.

Fair Value of Contingent Consideration

Contingent consideration represents a recurring fair value estimate of potential future payments. This fair value measurement is based on unobservable inputs, including management estimates and assumptions about the future achievement of milestones and future estimate of revenues, and is, therefore, classified as Level 3 within the fair value hierarchy. Refer to Note 3 - Acquisitions and Note 16 - Fair Value Measurements for further discussion.

Leases

The Company leases office space, equipment, and vehicles under non-cancellable agreements. The Company’s leases may include options to extend or renew at the Company’s discretion. The measurement of the lease term includes options to extend or renew when it is reasonably certain the Company will exercise those options. Lease assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term. To determine the present value of future minimum lease payments, the Company uses the implicit rate when readily determinable; however, certain leases do not provide an implicit rate. Therefore, to determine the present value of minimum lease payments, the Company uses the incremental borrowing rate based on the information available at the commencement date of the lease. The Company’s finance lease agreements typically include an interest rate that is used to determine the present value of future lease payments. Short-term operating leases with an initial term of 12 months or less are not recorded on our balance sheet. Minimum lease payments are expensed on a straight-line basis over the lease term, including reasonably certain renewal options.

The Company periodically evaluates whether current events or circumstances indicate that the carrying value of our right-of-use assets exceeds fair value. If such a review should indicate that the carrying amount of right-of-use asset is not recoverable, the Company will reduce the carrying amount of such assets to fair value.

The Company is a lessor as we lease certain power equipment to customers through operating leases. These agreements are short term in nature and have monthly terms with no renewal options that are reasonably certain to exercise, or early termination options based on established terms specific to the individual agreement.

Under Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), the Company elected the package of practical expedients permitted under the transition guidance within the new standard, including the option to carry forward the historical lease classifications and assessment of initial direct costs, account for lease and non-lease components as a single lease, and to not include leases with an initial term of less than 12 months in the lease assets and liabilities.

Revenues

Under ASC Topic 606 - Revenue from Contracts with Customers (“ASC 606”), revenue recognition is based on the transfer of control, or the customer’s ability to benefit from the services and products in an amount that reflects the consideration expected to be received in exchange for those services and products. In recognizing revenue for products and services, the transaction price is determined from sales orders or contracts with customers.

The Company generates product revenues from the sale of product that customers purchase for use in the oil and gas industry. Revenues are derived from product sold to customers under supply agreements, the terms of which can extend for over one year, and from spot sales through individual purchase orders executed at prevailing market rates. The Company’s product revenues are primarily a function of the price per ton realized and the volumes sold. Pricing structures under the supply agreements are, in certain cases, subject to certain contractual adjustments and consist of a combination of negotiated pricing and fixed pricing. These arrangements may undergo periodic negotiations regarding pricing and volume requirements, which may occur in volatile market conditions.

The Company generates service revenue by providing transportation, wellsite solutions, and contract labor services to companies in the oil and gas industry. Transportation services typically consist of transporting product from the plant facilities to the wellsite. The amounts invoiced reflect the transportation services rendered. The amounts invoiced reflect either the contractual monthly minimum, or the length of time the equipment was utilized in the billing period. Labor services provide the customers with supervisory, logistics, or field personnel. The amounts invoiced for wellsite solutions and contract labor services reflect the amount of time these services were utilized in the billing period. Transportation, wellsite solutions, and contract labor services are contracted through formal agreements or work orders executed under established pricing terms.

The Company generates rental revenue from the power equipment leases, which include maintenance, parts and service, in the period earned on a straight-line basis, over the term of the contract, regardless of the timing of the billing to customers.

The Company recognizes revenue for product at a point in time following the transfer of control and satisfaction of the performance obligation of such items to the customer, under ASC 606, which typically occurs upon customer pick-up at the facilities. The Company recognizes revenue for services when services are rendered to the customer and the performance obligation is satisfied. The Company’s standard collection terms are generally 30 days, with certain customer payment terms extending up to 60 days.

Certain of the Company’s contracts contain shortfall provisions that calculate agreed upon fees that are billed when the customer does not meet the minimum purchases over a period of time defined in each contract and when collectability is reasonably certain. As the Company does not have the ability to predict customers’ orders over the period, there are constraints around the ability to recognize the variability in consideration related to this condition. The Company did not recognize shortfall provision revenue for the three months ended September 30, 2025 and recognized $23.9 million for the nine months ended September 30, 2025, which was recorded in product revenue in the condensed consolidated statements of operations. The Company recognized shortfall provision revenue of $1.3 million and $3.3 million for the three and nine months ended September 30, 2024, respectively.

The Company’s revenue was generated in the United States for the three and nine months ended September 30, 2025 and 2024. Revenue is disaggregated by product, service, and rental revenue, no further disaggregation of revenue information is provided.

The Company has elected to use the ASC 606 practical expedients, pursuant to which it has excluded disclosures of transaction prices allocated to remaining performance obligations and when it expects to recognize such revenue. The remaining performance obligations are primarily comprised of unfulfilled contracts to deliver product, most of which hold a remaining duration of less than one year, and of which ultimate transaction prices will be allocated entirely to the unfulfilled contracts. The Company’s transaction prices under these contracts may be impacted by market conditions and potential contract negotiations, which have not yet been determined, and are therefore variable in nature.

The Company has elected to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer, such as sales tax, use tax, value-added tax and similar taxes.

Deferred Revenues

The Company occasionally receives prepayments from customers for future deliveries of product or contributions in aid of construction. Amounts received from customers in advance of product deliveries are recorded as contract liabilities referred to as deferred revenues and are recognized as revenue upon delivery of the product. Certain prepayments are secured by collateral interest in certain property, plant and equipment. The Company recognized revenue of $1.7 million and $5.9 million from deferred revenue for the three and nine months ended September 30, 2025, respectively. The Company recognized revenue of $3.2 million and $5.5 million from deferred revenue for the three and nine months ended September 30, 2024, respectively.

Changes in the deferred revenues balance are as follows (in thousands):


	Nine Months Ended September 30,
	2025			2024
Beginning Balance	$	7,755		$	—
Customer prepayment acquired in acquisitions		923			13,248
Consideration received and deferred		268			—
Revenue recognized		(5,947	)		(5,460	)
Ending Balance	$	2,999		$	7,788

Stock-Based Compensation

We account for stock-based compensation, including grants of incentive units, restricted stock awards, time-based restricted stock units and performance share units, under the measurement and recognition provisions of ASC 718, “Compensation – Stock Compensation.” We account for stock-based compensation by amortizing the fair value of the stock, which is determined at the grant date, on a straight-line basis unless the tranche method is required.

We account for forfeitures as they occur and reverse any previously recognized stock-based compensation expense for the unvested portion of the awards that were forfeited. The number of forfeited shares will be available for purposes of awards under the Company’s Long Term Incentive Plan (the “LTIP”). Stock-based compensation expense is recognized as selling, general and administrative expense on the Company’s condensed consolidated statements of operations.

Income Taxes

The Company, under ASC 740–Income Taxes (“ASC 740”), computes its quarterly taxes using an estimated annual effective tax rate which is applied to year-to-date pre-tax book net income, except for discrete items. For the period ended September 30, 2025, the Company determined the best estimate of the annual effective tax rate was the year-to-date effective tax rate which was applied to year-to-date income to estimate quarterly taxes. Income taxes associated with discrete items are computed and recorded in the period that the specific transaction occurs.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company evaluates the uncertainty in tax positions taken or expected to be taken in the course of preparing the Financial Statements to determine whether the tax positions are more likely than not of being sustained by the applicable tax authority. However, the conclusions regarding the evaluation are subject to review and may change based on factors including, but not limited to, ongoing analysis of tax laws, regulations, and interpretations thereof.

As of September 30, 2025 and December 31, 2024, the Company did not have any liabilities for uncertain tax positions or gross unrecognized tax benefits. Our income tax returns from 2021, 2022 and 2023 are subject to examinations by U.S. federal, state or local tax authorities. The Company cannot predict or provide assurance as to the ultimate outcome of any existing or future examinations.

Recently Issued Accounting Pronouncements

Segments- In November 2023, the Financial Accounting Standard Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. The ASU is effective for fiscal years beginning after December 15, 2023 on a retrospective basis, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07, for a further discussion refer to Note 15- Business Segments.

Recently Issued Accounting Pronouncements Not Yet Effective

Intangibles-Goodwill and Other-Internal-Use Software- In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removed the language around project stages that was used to assess when costs could be capitalized for an internal-use software. The update also requires internal-use software to be disclosed under the ASC 360 Property, Plant, and Equipment guidance. The new standard is effective for annual periods beginning after December 15, 2027. The Company is currently evaluating the impact on the Financial Statements and related disclosures.

Financial Instruments–Credit Losses- In July 2025, the FASB issued ASU 2025-05, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which added a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. The new standard is effective for annual periods beginning after December 15, 2025. The Company is currently evaluating the impact on the Financial Statements and related disclosures.

Income Statement Reporting Disclosures- In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update requires additional disclosure of certain costs and expenses within the notes to the financial statements. The new standard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact on the Financial Statements and related disclosures.

Income Taxes- In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. The new standard is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact on the Financial Statements and related disclosures.

Note 3 – Acquisitions

PropFlow Acquisition

On July 28, 2025, the Company completed the PropFlow Acquisition and acquired 100% of the membership interests in PropFlow and its wholly owned subsidiaries, PropFlow Operating, LLC; PropFlow International, LLC; and PropFlow Employee Co., LLC. The PropFlow Acquisition increased efficiency of our logistics operations through our acquisition and integration of PropFlow’s patented on-wellsite proppant filtration technology.

The acquisition-date fair value of the consideration was comprised of the following (in thousands):


	July 28, 2025
Cash to sellers at close	$	6,513
Debt payments		14,806
Seller transaction expenses		1,793
Holdback amount (1)		2,500
Contingent consideration (2)		10,200
Total	$	35,812

(1) This amount represents (i) cash holdbacks subject to changes from estimated to actual net working capital amounts and other customary purchase price adjustments and (ii) cash holdbacks to satisfy post-closing indemnity claims, if any, in accordance with the PropFlow Purchase Agreement (“holdback amount”). The amount in the table above is based on management’s best estimate as of the September 30, 2025 and may be subject to further adjustments.

(2) Contingent consideration to be paid to BCA HoldCo pursuant to the PropFlow Purchase Agreement, subject to the achievement of certain revenue targets.

The purchase price includes $10.2 million of contingent consideration related to an earnout arrangement. Under the terms of the PropFlow Purchase Agreement, the Company may be required to pay a maximum $15.0 million to BCA HoldCo in the fiscal years 2027 and 2028, contingent upon the achievement of certain revenue targets (the “Earnout Payment”). Payment of the Earnout Payment will be settled in cash. The Company estimated the fair value of the contingent consideration as of the acquisition date. The Company implemented a Monte Carlo simulation utilizing a risk neutral framework to determine the value of the Earnout Payment. The Company simulated the 2026 and 2027 Systems Rental Revenue and Sand and Logistics Revenue respectively using two correlated geometric Brownian motions over the 2026 and 2027 earnout periods. “Systems Rental Revenue” is the net revenue generated from the actual number of Company filtration systems being provided to customers. “Sand and Logistics Revenue” is the net revenue generated by the Company from customer sites in geological basins outside of the Permian Basin with respect to (i) the sale of frac sand processed by Company filtration systems and (ii) the associated logistics operations to deliver the sand processed by such Company filtration systems to such customer wellsites. The calculated Earnout Payment is then discounted at a rate that reflects the appropriate credit risk of the Earnout Payment payer. The fair value of the Earnout Payment is estimated as the average discounted Earnout Payment across 1,000,000 iterations of the simulation. This fair value measurement was based on unobservable inputs, including management estimates and assumptions about the future achievement of milestones and future estimate of revenues, and is, therefore, classified as Level 3 within the fair value hierarchy presented in Note 16 - Fair Value Measurements. The key inputs as of the acquisition date are outlined below:


Key Inputs	December 31, 2025			December 31, 2026			December 31, 2027
Risk-Free Rate		4.40	%		4.12	%		3.92	%
Continuous Risk-Free Rate		4.31	%		4.04	%		3.85	%
Systems Revenue Discount Rate		17.88	%		17.88	%		17.88	%
Sands and Logistics Discount Rate		17.88	%		17.88	%		17.88	%
Systems Rental Revenue Volatility		40.10	%		40.10	%		40.10	%
Sands and Logistics Revenue Volatility		40.10	%		40.10	%		40.10	%
Credit Valuation Adjustment	Not Applicable				11.37	%		11.14	%

We will remeasure this liability at each reporting date and record changes in the fair value of the contingent consideration to the condensed consolidated statements of operations. Increases or decreases in the fair value of the contingent consideration liability can result from changes in the passage of time, discount rates, and the timing and amount of our revenue estimates. Contingent consideration is included within other long-term liabilities on the condensed consolidated balance sheets. Refer to Note 16 - Fair Value Measurements for further discussion.

The Company has applied the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” and recognized assets acquired and liabilities assumed at their fair values as of the date of acquisition, with the excess purchase consideration recorded to goodwill. The fair value of acquired property and equipment were based on both available market data and a cost approach. As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date).

The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed (in thousands):


	Fair Value
	July 28, 2025
Cash and cash equivalents	$	455
Accounts receivable		3,733
Property, plant and equipment		13,417
Intangible assets		9,750
Operating lease right-of-use assets		471
Other long-term assets		14
Accounts payable		(1,536	)
Accrued liabilities		(246	)
Operating lease liabilities		(471	)
Goodwill		10,225
Net Assets Acquired	$	35,812

The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. The above fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The Company retained an independent appraiser to determine the fair value of assets acquired and liabilities assumed. In accordance with the acquisition method of accounting, the purchase price of PropFlow has been allocated to the acquired assets and assumed liabilities based on their preliminary estimated acquisition date fair values. The fair value estimates were based on income, market, and cost valuation methods. These fair values were based on inputs that are not observable in the market and thus represent Level 3 inputs. Several significant assumptions and estimates were involved in the application of these valuation methods, including discount rates, future expected cash flows and other future events that are based on the Company’s best judgment from the information available. The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed has been recorded as goodwill. The final determination of the fair value of certain assets and liabilities will be completed as soon as the necessary information becomes available but no later than one year from the acquisition date. The Company expects to continue to obtain information for the purpose of determining the fair value of the assets acquired and liabilities assumed on the acquisition date throughout the remainder of the measurement period.

The revenue and direct operating expenses attributable to the acquired PropFlow operations are not material to the Company’s operations for the three and nine months ended September 30, 2025. Of the $10.2 million of goodwill recognized, $10.2 million is considered non-deductible goodwill primarily attributable to the integration of patented on-wellsite proppant filtration technology along with economies of scale. The goodwill from the PropFlow Acquisition was assigned to the sand and logistics segment.

The following transactions were recognized separately from the acquisition of assets and assumption of liabilities in the PropFlow Acquisition.

•

Transaction costs consisting of legal and professional fees. For the three and nine months ended September 30, 2025, the Company incurred $0.5 million and $0.5 million fees, respectively, which were expensed as incurred and presented in selling, general and administrative expenses in the condensed consolidated statements of operations.

•

In connection with the PropFlow Acquisition, the Company drew down $25.0 million under the ABL Credit Facility (defined in Note 8 - Debt). See Note 8 – Debt for further information.

Identifiable Intangible Assets Acquired

The following table summarizes key information underlying identifiable intangible assets related to the PropFlow Acquisition:

The preliminary estimate of the fair value of the identifiable intangible assets was determined primarily using the income approach.

•

The income approach requires a forecast of all of the expected future cash flows through various methods. Customer relationships were valued using the MPEEM. Trade name and proprietary technology were valued using the RFR method.

The Company has not disclosed pro-forma revenue and earnings attributable to PropFlow as they did not have a material effect on the Company’s Financial Statements.

Moser Acquisition

On February 24, 2025, the Company completed the Moser Acquisition and acquired 100% of Moser AcquisitionCo’s ownership interest and its wholly-owned subsidiary, Moser Engine Service, Inc. (d/b/a Moser Energy Systems). The Moser Acquisition expanded current operations into distributed power end markets.

The Company had adjustments to consideration from February 24, 2025 to September 30, 2025. Refer to the table below for the acquisition-date fair value of the consideration as of February 24, 2025 and the adjustments as of September 30, 2025 (in thousands):


	February 24, 2025		Adjustments			September 30, 2025
Cash to sellers at close (1)	$	187,535	$	—		$	187,535
Stock consideration (2)		35,385		(1,481	)		33,904
Total	$	222,920	$	(1,481	)	$	221,439

(1) Includes payment of debt and transaction costs paid on behalf of the Seller.

(2) Stock consideration is measured at fair value as of the Moser Closing Date (the “Moser Stock Consideration”) by taking the product of (a) the 1,727,764 closing shares (as defined in the Moser Purchase Agreement) and (b) the low price per share of $20.48 on February 24, 2025, which is in line with ASC 820, “Fair Value Measurement” and company policy as an accounting policy election under ASC 235, “Notes to Financial Statements.” During the measurement period, there was a reduction to the equity consideration of $1.5 million due to 72,106 shares being returned to the Company. The adjustment was made in accordance with the terms of the post-closing settlement from the Moser Purchase Agreement.

The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of February 24, 2025, including measurement period adjustments through September 30, 2025 (in thousands):


	Fair Value
	February 24, 2025			Adjustments			September 30, 2025
Cash and cash equivalents	$	6,024		$	—		$	6,024
Accounts receivable		12,579			—			12,579
Spare parts inventories		11,278			(711	)		10,567
Prepaid expenses and other current assets		559			—			559
Property, plant and equipment		65,303			(956	)		64,347
Intangible assets		102,400			(13,200	)		89,200
Operating lease right-of-use assets		5,423			—			5,423
Finance lease right-of-use assets		1,414			—			1,414
Accounts payable		(3,618	)		—			(3,618	)
Accrued liabilities		(2,375	)		—			(2,375	)
Current portion of operating lease liabilities		(1,239	)		—			(1,239	)
Current portion of finance lease liabilities		(561	)		—			(561	)
Current portion of deferred revenue		(923	)		—			(923	)
Other current liabilities		(4	)		—			(4	)
Deferred tax liabilities		(35,594	)		3,192			(32,402	)
Operating lease liabilities		(4,184	)		—			(4,184	)
Finance lease liabilities		(853	)		—			(853	)
Goodwill		67,291			10,194			77,485
Net Assets Acquired	$	222,920		$	(1,481	)	$	221,439

The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. The above fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The Company retained an independent appraiser to determine the fair value of assets acquired and liabilities assumed. In accordance with the acquisition method of accounting, the purchase price of Moser has been allocated to the acquired assets and assumed liabilities based on their preliminary estimated acquisition date fair values. The fair value estimates were based on income, market, and cost valuation methods. These fair values were based on inputs that are not observable in the market and thus represent Level 3 inputs. Several significant assumptions and estimates were involved in the application of these valuation methods, including discount rates, future expected cash flows and other future events that are based on the Company’s best judgment from the information available. The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed has been recorded as goodwill. The final determination of the fair value of certain assets and liabilities will be completed as soon as the necessary information becomes available but no later than one year from the acquisition date. The Company expects to continue to obtain information for the purpose of determining the fair value of the assets acquired and liabilities assumed on the acquisition date throughout the remainder of the measurement period. For the three and nine months ended September 30, 2025, we had a purchase price adjustment of $1.5 million in net assets acquired as a result of the reduction in equity consideration, as well as an update to the fair value of certain intangible assets that resulted in a decrease of $0.7 million in amortization expense of acquired intangible assets on the condensed consolidated statements of operations.

The Company’s condensed consolidated statement of operations includes revenue of $17.1 million and $40.4 million for the three and nine months ended September 30, 2025, respectively, attributable to the acquired Moser operations. The Company’s condensed consolidated statement of operations includes direct operating expenses of $6.5 million and $14.8 million for the three and nine months ended September 30, 2025, respectively, attributable to the acquired Moser operations. Of the $77.5 million of goodwill recognized, $77.5 million is considered non-deductible goodwill primarily attributable to the entry into the power segment along with economies of scale. The goodwill from the Moser Acquisition was assigned to the power segment.

The following transactions were recognized separately from the acquisition of assets and assumption of liabilities in the Moser Acquisition.

•

Transaction costs consisting of legal and professional fees. For the three and nine months ended September 30, 2025, the Company incurred $0.2 million and $7.4 million fees, respectively, which were expensed as incurred and presented in selling, general and administrative expenses in the condensed consolidated statements of operations.

•

In connection with the Moser Acquisition, the Company entered into the 2025 Term Loan Credit Facility (defined in Note 8 - Debt). See Note 8 – Debt for further information.

Identifiable Intangible Assets Acquired

The following table summarizes key information underlying identifiable intangible assets related to the Moser Acquisition:


	Useful Life (In years)	Fair Value (In thousands)
Customer relationships	10	$	55,100
Trade name	10		8,200
Proprietary technology (generators)	10		21,300
Proprietary technology (military applications)	5		4,600
Total		$	89,200

The preliminary estimate of the fair value of the identifiable intangible assets was determined primarily using the income approach and cost approach.

•

The income approach requires a forecast of all of the expected future cash flows through various methods. Customer relationships were valued using the MPEEM and trade name and proprietary technology (generators) were valued using the RFR method.

•

The cost approach reflects the amount that would be required currently to replace the service capacity of an asset (often referred to as current replacement cost). Proprietary technology (military applications) was valued using the cost to recreate method.

Pro Forma Financial Information

The following table summarizes, on an unaudited pro forma basis, the condensed combined results of operations of the Company for the three and nine months ended September 30, 2025 and 2024, assuming the Moser Acquisition had occurred on January 1, 2024 (in thousands).


	Three Months Ended September 30,					Nine Months Ended September 30,
	2025			2024		2025			2024
	(Unaudited)
Revenue	$	259,613		$	323,076	$	856,819		$	840,147
Net income (loss)	$	(23,813	)	$	3,143	$	(20,939	)	$	39,417

The foregoing unaudited pro forma results are for informational purposes only and are not necessarily indicative of the actual results of operations that might have occurred had the Moser Acquisition occurred on January 1, 2024, nor are they necessarily indicative of future results.

The unaudited pro forma information for all periods presented includes the following adjustments, where applicable, for business combination accounting effects resulting from the Moser Acquisition: (i) additional amortization expense related to finite-lived intangible assets acquired, (ii) additional interest expense related to financing for the acquisition, (iii) depreciation expense on property, plant and equipment, and (iv) the related tax effects assuming that the acquisition occurred on January 1, 2024. No assumptions have been applied to the pro forma results of operations regarding potential operating cost savings or other business synergies expected to be achieved.

The significant nonrecurring adjustments reflected in the unaudited pro-forma consolidated information above include the reclassification of the transaction costs to the earliest period presented.

Hi-Crush Transaction

On March 5, 2024, the Company completed the Hi-Crush Transaction and acquired 100% of Hi-Crush’s ownership interest and certain of its wholly-owned subsidiaries. The Hi-Crush Transaction expanded the Company’s position as a leading provider of proppant and proppant logistics in the Permian Basin to meet the needs of our large-scale customers in the Permian Basin.

There have been no adjustments to consideration since December 31, 2024. Refer to the table below for the acquisition-date fair value of the consideration as of March 5, 2024 and December 31, 2024 (in thousands):


	March 5, 2024		Adjustments			December 31, 2024
Cash to sellers at close	$	140,146	$	—		$	140,146
Company Transaction Expenses (sellers’ transaction expenses) (1)		9,019		—			9,019
Stock consideration (2)		189,082		—			189,082
Deferred Cash Consideration Note (1)		109,253		(2,640	)		106,613
Stockholders’ Representative Expense Fund (1)		50		—			50
Adjustment Holdback Amount (1) (3)		5,338		5,852			11,190
Total	$	452,888	$	3,212		$	456,100

(1) Refer to the Hi-Crush Merger Agreement, a copy of which is included as Exhibit 2.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC on May 8, 2024.

(2) Stock consideration is measured at fair value as of the Hi-Crush Closing Date by taking the product of (a) the closing shares of 9,711,432 as defined in the Hi-Crush Merger Agreement and (b) the low price per share of $19.47 on March 5, 2024, which is in line with ASC 820, “Fair Value Measurement” and company policy as an accounting policy election under ASC 235, “Notes to Financial Statements.”

(3) Represents a cash holdback, which was measured at fair value. The holdback was subject to changes from estimated to actual net working capital amounts and other customary purchase price adjustments. This amount was paid as of the year ended December 31, 2024.

The following table summarizes the allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of March 5, 2024, including adjustments through the measurement period. There were no adjustments since December 31, 2024. Refer to the table below (in thousands):


	Fair Value
	March 5, 2024			Adjustments			December 31, 2024
Cash and cash equivalents	$	6,982		$	—		$	6,982
Accounts receivable		96,393			—			96,393
Inventories		4,235			—			4,235
Spare parts inventories		3,101			—			3,101
Prepaid expenses and other current assets		2,180			—			2,180
Property, plant and equipment		277,584			22,842			300,426
Intangible assets		111,723			3,353			115,076
Operating lease right-of-use assets		10,868			—			10,868
Finance lease right-of-use assets		7,311			—			7,311
Other long-term assets		92			—			92
Accounts payable		(37,736	)		—			(37,736	)
Accrued liabilities		(13,162	)		(2,190	)		(15,352	)
Current portion of long-term debt		(1,914	)		—			(1,914	)
Current portion of operating lease liabilities		(6,388	)		—			(6,388	)
Current portion of finance lease liabilities		(3,299	)		—			(3,299	)
Current portion of deferred revenue		(3,302	)		—			(3,302	)
Other current liabilities		(1,221	)		—			(1,221	)
Long-term debt, net of discount and deferred financing costs		(252	)		—			(252	)
Deferred tax liabilities		(70,378	)		1,379			(68,999	)
Operating lease liabilities		(4,479	)		—			(4,479	)
Finance lease liabilities		(4,012	)		—			(4,012	)
Deferred revenue		(9,946	)		—			(9,946	)
Asset retirement obligation		(2,663	)		—			(2,663	)
Goodwill		91,171			(22,172	)		68,999
Net Assets Acquired	$	452,888		$	3,212		$	456,100

The Company retained an independent appraiser to determine the fair value of assets acquired and liabilities assumed. In accordance with the acquisition method of accounting, the purchase price of Hi-Crush has been allocated to the acquired assets and assumed liabilities based on their acquisition date fair values. The fair value estimates were based on income, market, and cost valuation methods. These fair values were based on inputs that are not observable in the market and thus represent Level 3 inputs. Several significant assumptions and estimates were involved in the application of these valuation methods, including discount rates, future expected cash flows and other future events that are based on the Company’s best judgment from the information available.

The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed has been recorded as goodwill. Of the $69.0 million of goodwill recognized, $33.8 million is considered non-deductible goodwill primarily attributable to synergies and economies of scale expected from combining Hi-Crush’s Permian Basin proppant production and logistics operations with the Company’s operations. The goodwill from the Hi-Crush Transaction was assigned to the sand and logistics segment.

The fair value of the identifiable intangible assets was determined using the income approach, which requires a forecast of all of the expected future cash flows either through the with or without method or the RFR method. The fair value of the reserves were valued using the income approach through the MPEEM. Reserves are recorded in property, plant and equipment, net on the Company’s condensed consolidated balance sheets.

Useful Life (In years)

Fair Value
(In thousands)

Customer relationships

Trade name

Proprietary technology

Atlas Energy Solutions Inc. 10-Q