AESI 10-K & 10-Q changes, risk factors and insider trading

Worldwide economic, political and military events, including tax, trade and tariff policies of the United States and other countries involved in global energy markets, war, terrorist activity, events in the Middle East and initiatives by OPEC+, have contributed, and are likely to continue to contribute, to oil and natural gas price volatility. For example, the recent events in Venezuela and the ongoing armed conflicts between Russia and UkraineUkraine, andunrest Israelin and Hamas andIran, the continuation of, and the escalation in the severity of, these conflicts has led to extreme regional instability, caused dramatic fluctuations in global financial markets and has increased the level of global economic uncertainty, including uncertainty about world-wide oil supply and demand, which in turn has caused increased volatility in commodity prices. Further, the Houthi movement, which controls parts of Yemen, has targeted and launched numerous attacks on Israeli, American and international commercial marine vessels in the Red Sea as the ships approach the Suez Canal, resulting in many shipping companies re-routing to avoid the region altogether and worsening existing supply chain issues, including delays in supplier deliveries, extended lead times and increased cost of freight, impacts to the shipping of oil and gas, insurance and materials. The potential for conflict with Iran, a major oil producer, the Houthi movement in Yemen or the Hezbollah movement in Lebanon has increased as a result of continued, increasing hostilities in the Middle East.

Our business is subject to the cyclical nature of our customers’ businesses and on the oil and natural gas and power industry.

Our business is directly affected by capital spending to explore for, develop and produce oil and natural gas and power in the United States. The oil and natural gas industry is cyclical and historically has experienced periodic downturns in activity. During periods of economic slowdown in one or more of the industries or geographic regions we serve or in the worldwide economy, our customers often reduce their production and capital expenditures by deferring or canceling pending projects, even if such customers are not experiencing financial difficulties. These developments can have an adverse effect on sales of our products and our results of operations.

volatility in political, legal and regulatory environments in connection with the U.S. presidentialand transitionother countries involved in global energy markets;

political and economic conditions in oil and natural gas producing countries, including uncertainty or instability resulting from civil unrest, terrorism or war, such as the current conflicts between Russia and Ukraine, Israelthe andIsrael-Hamas Hamaswar, the Israel-Iran conflict, recent events in Venezuela, and other instability in the Middle East, including from the Houthi rebels in YemenEast;

Our future performance in the proppant market will depend on our ability to succeed in competitive markets and on our ability to appropriately react to potential fluctuations in demand for, and supply of, our products and services.

WeOur operateproppant business operates in a highly competitive market that is characterized by a small number of large, national producers and a larger number of small, regional or local producers. Transportation costs are a significant portion of the total cost to customers of proppant (in many instances, transportation costs can represent more than 50% of delivered cost), the proppant market is typically local, and competition from beyond the local area is limited. Further, competition in the industry is based on customer relationships, reliability of supply, consistency and quality of product, customer service, site location, distribution capability, breadth of product offering, technical support and price.

Businesses across all industries face scrutiny from stakeholders related to their ESG approach and practices. Businesses that are perceived to be operating in contrast to investor or stakeholder expectations and standards, which are continuing to evolve, or businesses that are perceived to have not responded appropriately with respect to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, access to capital, and/or stock price of such business entity could be materially and adversely affected. Increased societal, investor, regulator, and stakeholder attention to climate change, natural capital, and other ESG matters along with changes in consumer demand for alternative sources of energy may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting, and insurance) and reduced demand for our customers’ hydrocarbon products and our products and services. Increased and sometimes conflicting investor, lender, and societal expectations regarding voluntary ESG-related disclosures and trends towards mandatory ESG-related disclosures could result in increased costs, heightened regulatory, judicial, and legislative scrutiny, governmental investigations, and litigation. From time to time, we may also be subject to ESG-specific activist campaigns as stockholders may attempt to effect changes to our business or governance practices.

In addition, certain organizations that provide informationinformation, ratings or proxy advisory services to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings or recommendations are used by some investors to inform their investment and voting decisions. Accordingly, we may receive pressure from certain investors, lenders or other groups to adopt climate or other ESG-related goals or commitments or to participate in various voluntary frameworks or certification programs intended to improve our ESG profile. A failure or a perception (whether valid or not) of failure to adequately pursue or implement ESG strategies or adopt ESG goals or commitments which are often aspirational, including any voluntary GHG emission reduction or carbon intensity goals or commitments, could result in litigation or reputational damage, cause investors or customers to lose confidence in us, harm our ability to effectively recruit or retain employees and negatively impact our operations and goodwill, all of which may adversely affect our financial performance. Moreover, even if we voluntarily elect to pursue climate or ESG goals,goals or commitments, we cannot guarantee that we will be able to pursue or implement such goals or commitments because of potential costs, technical or operational obstacles, uncertainty and inaccuracies in long-term assumptions and expectations or other market or technological developments beyond our control. Similarly, we cannot guarantee that participation in any sustainability, climate-related, or ESG certification program or framework will have the intended results on our ESG profile.

Separately, some members of the investment community have increased their focus on the ESG practices and disclosures of public companies, including practices and disclosures related to climate change and sustainability, employment practices and social initiatives, and heightened governance standards. Certain large institutional investors may also evaluate companies for ESG disclosure and performance prior to investing in our Company or including our Company’s stock in their investment products, and such evaluation criteria may not be made known to us. Although this trend has waned recently, to the extent anyfinancial of these large institutional investorsinstitutions choose not to invest in our Company on account of their evaluation of our ESG performance or a decision to allocate capital away from or cease to insure the fossil fuel production sector, we may lose investors, our cost of capital may increase, and our stock price may be negatively impacted.

Certain public statements with respect to ESG matters, such as emission reduction goals, other environmental targets, or other commitments addressing certain social issues, are becoming increasingly subject to heightened scrutiny from public and governmental authorities, as well as other parties, related to the risk of potential “greenwashing,” (i.e., misleading information or false claims overstating potential ESG benefits). For example, thefederal SECand hasstate recentlyagencies have taken enforcement action against companies for ESG-related misconduct, including alleged greenwashing. CertainSuch regulators, such as the SEC and various state agencies, as well as non-governmental organizations and other private actorsactors, have also filed lawsuits under various securities and consumer protection laws alleging that certain ESG-statements, emission reduction claims, approaches to accounting for GHG emissions reductions, or other ESG-related goals, or standards were misleading, false, or otherwise deceptive. Any alleged claims of greenwashing against us or others in our industry may lead to further negative sentiment and diversion of investments. Additionally, we could face increasing costs as we attempt to comply with and navigate further ESG-related focus and scrutiny.

Additionally, certain employment or business practices and social initiatives are the subject of scrutiny by both those calling for the continued advancement of such policies, as well as those who believe they should be curbed, including government actors, and the complex regulatory and legal frameworks applicable to such initiatives continue to evolve. We cannot be certain of the impact of such regulatory, legal and other developments on our business.

All of our product salesrevenue areis currently generated at facilities in West Texas. Any adverse developments at those facilities could have an adverse effect on our business, financial condition and results of operations.

All of our product salesrevenue areis currently derived from our Kermit and Monahans facilities located in Winkler and Ward Counties in Texas and the OnCore distributed mining network located in West Texas. Any adverse development at these facilities due to catastrophic events or weather, adverse government regulatory impacts, transportation-related constraints or any other events that could cause us to curtail, suspend or terminate operations at any of our facilities, could result in our being unable to deliver our contracted volumes and related obligations. Although we maintain insurance coverage to cover a portion of these types of risks, there could be potential risks associated with our operations not covered by insurance. There also may be certain risks covered by insurance where the policy does not reimburse us for all of the costs related to such risks. Downtime or other delays or interruptions to our future operations that are not covered by insurance could have an adverse effect on our business, results of operations and financial condition. In addition, under our supply contracts, if we are unable to deliver contracted volumes, we may be required to pay liquidated damages that could have an adverse effect on our financial condition and results of operations.

Natural gas and electricity costs in our sand and logistics segment represented approximately 1.3% and 2.8%, respectively, of our total product revenue in the year ended December 31, 2025, and 1.0% and 1.3%, respectively, of our total product salesrevenue in the year ended December 31, 2024, and 2.1% and 0.7%, respectively, of our total product sales in the year ended December 31, 2023.2024. Potential climate change regulations or carbon or emissions taxes could result in higher cost of production for energy, which may be passed on to us in whole or in part. A significant increase in the price of energy that is not recovered through an increase in the price of our products and services or covered through our hedging arrangements or an extended interruption in the supply of electricity or natural gas to our production facilities could have an adverse effect on our business, results of operations and financial condition.

A large portion of our salesrevenue is generated by our top 10 customers, and the loss of or a significant reduction in purchases by our largest customers could adversely affect our business, financial condition and results of operations.

Our 10 largest customers accounted for approximately 82.0%82.4% of total salesrevenue for the year ended December 31, 2024,2025, and approximately 86.5%82.0% of total salesrevenue for the year ended December 31, 2023.2024. Some of our customers have exited or could exit the business, or have been or could be acquired by other companies that purchase proppant solutions or logistics services we provide from other third-party providers. Our current customers also may seek to acquire proppant or logistics services from other providers that offer more competitive pricing or capture and develop their own sources of proppant solutions or logistics services. The loss of a customer or contract, or a reduction in the amount of proppant solutions or logistics services purchased by any customer, could have an adverse effect on our business, financial condition and results of operations. Further, as a result of market conditions, competition or other factors, these customers may not continue to purchase the same levels of our products in the future, if at all. Substantial reductions in purchased volumes across these customers could have an adverse effect on our business, financial condition and results of operations.

Our results of operations are significantly affected by the market price of sand-based proppant, which havehas been historically subject to substantial price fluctuations.

We have, and expect to maintain in the near term, a significant amount of indebtedness. Under our 2023 ABL Credit Facility, including the ABL Amendment,amendments, the lenders thereunder provide revolving credit financing to Atlas LLC in an aggregate principal amount of up to $125.0 million with availability thereunder subject to a borrowing base as described in the 2023 ABL Credit Agreement. As of the date of this filing, we were using $0.2$0.3 million for outstanding letters of credit, leaving $124.8$67.9 million of borrowing availability under our 2023 ABL Credit Facility.

In accordance with the Hi-Crush Merger Agreement, the Company issued the Deferred Cash Consideration Note for an aggregate principleprincipal amount of $111.3 million as of December 31, 2024. This amount is subject to purchase price adjustments as defined in the Hi-Crush Merger Agreement.million. The Deferred Cash Consideration Note bears interest at a rate of 5.00% per annum if paid in cash, or 7.00% per annum if paid in kind. Interest on the Deferred Cash Consideration Note is payable quarterly in arrears beginning March 29, 2024 through the maturity date of January 31, 2026. As of theDecember date31, of this filing,2025, we had an outstanding principal balance of $10.0 million remaining under the Deferred Cash Consideration Note.

On February 21, 2025, Atlas LLC entered into a credit agreement (the “2025 Term Loan Credit Agreement”) with Stonebriar, as administrative agent and initial lender, pursuant to which Stonebriar extended Atlas LLC athe term2025 loanTerm creditLoan facilityCredit Facility comprised of a $540.0 million single advance term loan that was made on February 21, 2025 (the “2025 Term Loan Credit Facility”).2025. The Company used the proceeds from the 2025 Term Loan Credit Facility (i) to refinance the existing 2023 Term Loan Credit Facility and the ADDT Loan (as defined in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.—RecentDebt DevelopmentsAgreements”), (ii) to finance the cash consideration for the Moser Acquisition, and (iii) for general corporate purposes.

We will need substantial additional capital to operate our business, and the inability to obtain needed capital or financing, on satisfactory terms, or at all, whether due to restrictions in our 2023 ABL Credit Facility, 2025 Term Loan Credit FacilityFacility, Lease Documents or otherwise, could have an adverse effect on our growth and profitability.

In addition, our existing 2023 ABL Credit Facility andFacility, 2025 Term Loan Credit Facility and Lease Documents contain, and any future financing agreements we may enter into could also contain, operating and financial restrictions and covenants that may limit our ability to finance future operations or capital needs or to engage in, expand or pursue our business activities.

Our ability to comply with these restrictions and covenants is uncertain and will be affected by the levels of cash flow from our operations and events and circumstances beyond our control. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired. If we violate any of the restrictions or covenants in our 2023 ABL Credit Facility andFacility, 2025 Term Loan Credit Facility,Facility or Lease Documents, a significant portion of our indebtedness may become immediately due and payable and our lenders’ commitment to make further loans to us may terminate. We might not have, or be able to obtain, sufficient funds to make these accelerated payments. In addition, our obligations under our 2025 Term Loan Credit Facility are secured by substantially all of our assets, and if we are unable to repay our indebtedness or satisfy our other obligations under these, the lenders could seek to foreclose on our assets.

We may reducenot or suspendresume our dividend program and there is no guarantee that we will repurchase shares of our Common Stock in the future.

We have paid a quarterly dividend or distribution for many years, and commencing in the second quarter of 2023 we established base quarterly dividend of $0.15 per share and paid an additional variable dividend of $0.05 per share per quarter, amounting to a total dividend payment of $0.20 per share. In February 2024, we increased the base dividend to $0.16 per share, amounting to a total dividend payment of $0.21 per share. The variable dividend was increased to $0.06 in May 2024, amounting to a total dividend payment of $0.22 per share. In August 2024, we declared an increased dividend to common stockholders of $0.23 per share and elected to move away from the base plus variable dividend structure to a standalone base dividend. In October 2024, we increased the dividend to $0.24 per share and then in February 2025, we increased the dividend to $0.25 per share. Despite establishing this base dividend in 2023, our Board has not yet adopted a dividend policy, and in November 2025, we announced that the future,suspension of our Boardquarterly may,dividend without advance notice, determine to reduce or suspend our dividendsprogram in order to maintainsafeguard the long-term strength of our financialbalance sheet and preserve capital flexibility and best position the Company for long‑termgrowth success.opportunities, including in our power segment. The declaration and amount of future dividends is at the discretion of our Board and will depend on our financial condition, results of operations, cash flows, prospects, industry conditions, capital requirements and other factors and restrictions our Board deems relevant. The likelihood that dividends will be reduced orremain suspended is increased during periods of prolonged market weakness or uncertainty, such as the economic downturn that resulted from the COVID-19 pandemic andpandemic, the oil price collapse in 2020.2020 and the current oil price environment. In addition, our ability to pay dividends may be limited by agreements governing our indebtedness now or in the future. Although we do not currently have plans to reduce or suspend our dividend, thereThere can be no assurance that we will not reduceresume our dividend or that we will continue to pay a dividendprogram in the future.

In October 2024, our Board authorized a share repurchase program that allows us to repurchase up to $200.0 million of our outstanding Common Stock, but the exact number of shares to be repurchased is not guaranteed, and the program may be modified, suspended or discontinued at any time without prior notice. During the year ended December 31, 2025, the Company repurchased 16,380 shares of Common Stock through open-market purchases under the share repurchase program, at an average price, including commission, of $12.21 per share, for an aggregate purchase price of $200,000. The Company is not obligated to repurchase any dollar amount or number of shares under the program. Any elimination of, or downward revision in, our share repurchase program could have an adverse effect on the market price of our Common Stock.

We also operate a differentiated logistics platform that is designed to increase the efficiency, safety and sustainability of the oil and natural gas industry primarily 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. We have also begun integrating autonomous driving technologies in certain of our fit-for-purpose trucks, creating the first semi-autonomous oilfield logistics network in an effort to increase our automation of the oil and gas proppant supply chain.

We also provide distributed power solutions through a fleet of more than 900 natural gas-powered reciprocating generators, with approximately 212 megawatts of existing power generation,generators primarily supporting production and artificial lift operations across all major United States resource basins. Our generators are designed for heavy-duty, harsh environments for mission critical power needs. Our in-house manufacturing and remanufacturing capabilities, coupled with critical in-field service, provide quality control and standardization across the fleet ensuring market-leading uptime.

On JanuaryFebruary 27,24, 2025, the Company enteredcompleted intothe Moser Acquisition pursuant to 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”), pursuant to which the Purchaser will acquireacquired (i) 100% of the authorized, issued and outstanding equity ownership interests in Moser Acquisition, Inc., a Delaware corporation (“Moser AcquisitionCo”),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”).AcquisitionCo.

The Offering closed onOn February 3, 2025.2025, the Company conducted an underwritten public offering of 11.5 million shares of our Common Stock at a public offering price of $23.00 per share (the “Equity Offering”). The Company received approximately $254.1$253.1 million of net proceeds from the sale of shares of our Common Stock, after deducting underwriting discounts and commissions. We used the net proceeds from thisthe offeringEquity Offering (i) to repay the $70.0 million outstanding on the 2023 ABL Credit Facility, (ii) to repay $101.3 million of the Deferred Cash Consideration Note, and (iii) the remainder for general corporate purposes.

On February 24, 2025, in connection with the Moser Closing, the Company entered into a registration rights agreement (the “Moser Registration Rights Agreement”) with the Seller that provides, among other things, that the Company will, no later than (a) March 26, 2025, or (b) if the Company is and continues to be a “Well-Known Seasoned Issuer” as defined in Rule 405 of the Securities Act, May 25, 2025, file with the U.S. Securities and Exchange CommissionSEC a registration statement registering for resale the Common Stock comprising the Moser Stock Consideration that was issued in connection with the Moser Acquisition, subject to the full or partial exercise of the RedemptionMoser RightStock Consideration subject to redemption by the Company. Pursuant to the Moser Purchase Agreement, the Seller agreed not to lend, offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, or otherwise transfer or dispose of, any of their shares of Common Stock for a period of 90 days following the closing of the Moser Closing,Acquisition, subject to certain exceptions. The Company also agreed to pay certain expenses of the parties incurred in connection with the exercise of their rights under the Moser Registration Rights Agreement, and to indemnify them for certain securities law matters in connection with any registration statement filed pursuant thereto.

The Second Term Loan Amendment increased the existing DDT Loan by an aggregate principal amount of $100.0 million (the “Acquisition Loan”) to a total of $200.0 million, creating availability of $180.0 million, with interest (computed on the basis of a 365-day year for the actual number of days elapsed) on the unpaid principal amount thereof from and including the date of the funding on the Acquisition Loan (“Funding Date”) until paid in full. The Acquisition Loan will accrue interest at a rate equal to 5.95% plus the greater of (A) the Term Secured Overnight Financing Rate (“SOFR”) and (B) 4.30%, as determined on the Funding Date the Acquisition Loan is payable in 60 consecutive monthly installments of combined principal and interest. In the event of a prepayment of the Acquisition Loan, Atlas LLC will be required to pay, and we have agreed to guaranty payment by Atlas LLC of, a premium on such prepayment amount of (A) 4%, if prepaid on or prior to the first anniversary of the Funding Date, (B) 3% if prepaid after the first, but on or prior to the second, anniversary of the Funding Date and (C) 2% if paid after the second anniversary of the Funding Date.

On January 27, 2025, Atlas LLC and certain other subsidiaries of the Company entered into that certain Second Amendment to Loan, Security and Guaranty Agreement (the “Second ABL Amendment”), among Atlas LLC, as the borrower, the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as theadministrative ABL Agent.agent. The Second ABL Amendment amends that certain Loan, Security and Guaranty Agreement dated as of February 22, 2023, as amended.

The Second ABL Amendment permitted the Company and its applicable affiliates to enter into the Second Term Loan Amendment, pursuant to which the principal amount of the existing delayedDDT draw term loanLoan was increased by an aggregate principal amount of $100.0 million.

OnThe FebruaryThird 21,ABL 2025,Amendment Atlaspermitted LLCthe enteredCompany and its applicable affiliates to enter into a credit agreement (the “2025 Term Loan Credit Agreement”) with Stonebriar, as administrative agent and initial lender,Agreement, pursuant to which Stonebriar extended Atlas LLC a term loan credit facility comprised of aborrowed $540.0 million from Stonebriar in a single advance term loan that was made on February 21, 2025 (the “2025 Term Loan Credit Facility”).2025.

The 2025 Term Loan Credit Facility is payable in eighty-five consecutive monthly installments, consisting of forty-eight monthly installments of combined principal and interest, thirty-seventhirty-six installments of interest only payments, and a final payment of the remaining outstanding principal balance at maturity. The 2025 Term Loan Credit Facility has a final maturity date of March 1, 2032 (the “Maturity Date”).2032. The 2025 Term Loan Credit Facility bears interest at a rate equal to 9.51% per annum.

The Company used the proceeds from the 2025 Term Loan Credit Facility (i) to refinance the existing term2023 loanTerm facilities,Loan Credit Facility and the ADDT Loan (as defined below under “Debt Agreements ”), (ii) to fundfinance the cash consideration in connection withfor the Moser AcquisitionAcquisition, and (iii) for general corporate purposes.

Except as set forth below, during the three months ended MarchJune 31,30, 2026, there have been no material changes to the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report.Report and Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 5, 2026.

We may not have the ability to raise the funds necessary to settle conversions of the 2031 Notes for cash or to repurchase the 2031 Notes for cash upon a fundamental change, and our future indebtedness may contain limitations on our ability to pay cash upon conversion of the 2031 Notes or to repurchase the 2031 Notes.

Holders of the 2031 Notes will have the right, except in certain limited circumstances, to require us to repurchase all or any portion of their 2031 Notes upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2031 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. In addition, upon conversion of the 2031 Notes, unless we elect to deliver solely shares of our Common Stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2031 Notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2031 Notes surrendered therefor or pay cash with respect to the 2031 Notes being converted.

In addition, our ability to repurchase the 2031 Notes or to pay cash upon conversions of the 2031 Notes may be limited by law, by regulatory authority or by agreements governing our indebtedness. Our failure to repurchase 2031 Notes at a time when the repurchase is required by the indenture governing the 2031 Notes or to pay any cash payable on future conversions of the 2031 Notes as required by the indenture would constitute a default under the indenture. A default under the indenture governing the 2031 Notes or the fundamental change itself could also lead to a default under our then-existing debt agreements. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2031 Notes or make cash payments upon conversions thereof.

Conversion of the 2031 Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their 2031 Notes, and may otherwise depress the price of our Common Stock.

The conversion of some or all of the 2031 Notes will dilute the ownership interests of existing stockholders to the extent we deliver shares of our Common Stock upon conversion of any of the 2031 Notes. The 2031 Notes may from time to time in the future be convertible at the option of their holders prior to their scheduled terms under certain circumstances. Any sales in the public market of the Common Stock issuable upon such conversion could adversely affect prevailing market prices of our Common Stock. In addition, the existence of the 2031 Notes may encourage short selling by market participants because the conversion of the 2031 Notes could be used to satisfy short positions, and the anticipated conversion of the 2031 Notes into shares of our Common Stock could depress the price of our Common Stock.

Provisions in the indenture for the 2031 Notes may deter or prevent a business combination that may be favorable to stockholders.

Certain provisions in the 2031 Notes and the indenture governing the 2031 Notes could make a third-party attempt to acquire us more difficult or expensive. If a fundamental change occurs prior to the maturity date, subject to certain conditions and limited exceptions, holders of the 2031 Notes will have the right, at their option, to require us to repurchase all or a portion of their 2031 Notes, except in limited circumstances. In addition, if a make-whole fundamental change occurs prior to the maturity date, we will in some cases be required to increase the conversion rate for a holder that elects to convert its 2031 Notes in connection with such make-whole fundamental change. Furthermore, the indenture for the 2031 Notes will prohibit us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the 2031 Notes. These and other provisions in the indenture for the 2031 Notes could deter or prevent a third party from acquiring us even when the acquisition may be favorable to stockholders.

The accounting method for the 2031 Notes could adversely affect our reported financial condition and results.

The accounting method for reflecting the 2031 Notes on our consolidated balance sheet, accruing interest expense for the 2031 Notes and reflecting the underlying shares of our Common Stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.

In accordance with Accounting Standards Update (“ASU”) 2020-06, wethe expect that the2031 Notes will beare reflected as a liability on our consolidated balance sheets, with the initial carrying amount equal to the principal amount of the 2031 Notes, net of issuance costs.costs Theand issuancediscounts. Issuance costs willand bediscounts treated as a debt discount for accounting purposes, which will beare amortized intoto interest expense over the term of the 2031 Notes. As a result of this amortization, the interest expense that we expect to recognize for the 2031 Notes for accounting purposes will be greater than the cash interest payments we will pay on the 2031 Notes, which will result in lower reported net income or higher reported net loss, as the case may be.

In addition, we expect that the shares of Common Stock underlying the 2031 Notes will be reflected in our diluted earnings per share using the “if converted” method, in accordance with ASU 2020-06. Under that method, diluted earnings per share would generally be calculated assuming that all the 2031 Notes were converted solely into shares of Common Stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the if-converted method may reduce our reported diluted earnings per share to the extent we are profitable in the future, and accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share.

Furthermore, if any of the conditions to the convertibility of the 2031 Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the 2031 Notes as a current, rather than a long-term, liability. This reclassification could be required even if no holders convert their 2031 Notes and could materially reduce our reported working capital.

We cannot be certain whether other changes may be made to the current accounting standards related to the 2031 Notes, or otherwise, that could have a material effect on our operating results.

This Report contains forward-looking statements that are subject to risks and uncertainties. All statements, other than statements of historical fact included in this Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Report, the words “may,” “forecast,” “continue,” “could,” “would,” “will,” “plan,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the section titled “Risk Factors” included in this Report and in our Annual Report.Report, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 5, 2026. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Although we believe that the forward-looking statements contained in this Report are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to:

the impact of geopolitical developments and tensions, war and uncertainty in oil-producing countries (including the invasion of Ukraine by Russia, geopoliticalthe developmentsongoing conflict involving Iran and disruptions to shipping through the Strait of Hormuz, continued instability in the Middle East, the recent events in Venezuela and any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy);

On April 1, 2026, the Company announced that Socorro entered into a five-year power purchase agreement (with options to renew for two five-year terms, up to an additional 10 years) (the “PPA”) with a technology infrastructure provider (the “Customer”), pursuant to which the Company has agreed to develop a power facility and provide dedicated on-site power generation capacity for the Customer. The equipment to be delivered pursuant to the PPA represents 50% of the 240 MW of recently ordered power generation equipment from a dealer of Caterpillar Inc. (NYSE: CAT),Inc., which was previously announced on November 3, 2025. The Company anticipates full energization during the first half of 2027, subject to customary conditions.

2031 Convertible Notes Issuanceand Capped Call Transaction

On April 9, 2026, the Company issued $450.0 million aggregate principal amount of its 0.50% Convertible Senior Notes due 2031 (the “2031 Notes” and the offering of the Notes, the “2031 Notes Offering”), which included the full exercise of an over-allotment option for $60.0 million principal amount of 2031 Notes. The Company received an estimatedapproximately $386.2 million of net proceeds from the Notes,2031 Notes Offering, after deducting underwriting and offering fees.fees Theand Companyafter usedusing $49.7 million of the net proceeds to fund the costcosts of entering into cappedthe callCapped transactions,Call Transactions (defined below under Debt Agreements). The Company used $66.2 million of the net proceeds to pay down outstanding borrowings under itsthe Lease Documents (defined below under Debt Agreements), and $76.9 million of the net proceeds to pay down itsthe 2023 ABL Credit Facility (defined below under Debt Agreements). The Company expects to use the remainder of the net proceeds for general corporate purposes, including to purchase a portion of the power generation equipment under the GFA,Global Framework Agreement (the “GFA”) with Caterpillar Inc., along with balance of plant and supporting equipment.

For additional information on the terms of the 2031 Notes and relatedthe cappedCapped callCall transactions,Transactions, refer to Note 178 - Subsequent EventsDebt of the unaudited condensed consolidated financial statements (the “Financial Statements”) included elsewhere in this Report.

On April 9, 2026, Atlas LLC and certain subsidiaries of the Company entered into that certain Fifth Amendment to Loan, Security and Guaranty Agreement (the “Fifth ABL Amendment”), among Atlas LLC, as the borrower, the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent. The Fifth ABL Amendment amends that certain Loan, Security and Guaranty Agreement, dated as of February 22, 2023, as amended, to, among other things, permit the issuance of the 2031 Notes Offering and relatedentry cappedinto callthe transactions.Capped Call Transactions.

On April 15, 2026, the Company paid down $66.2 million of outstanding borrowings under the Lease Documents with Stonebriar Commercial Finance LLC (“Stonebriar”) $66.2 million for outstanding borrowings under its Lease Documents..

Drilling and completions activity is highly correlated to commodity prices. West Texas Intermediate crude oil averaged $71.80$95.99 per barrel in the firstsecond quarter of 2026, roughly flat48.5% increase year over year versus $71.84$64.63 per barrel in the firstsecond quarter of 2025. The near-term price outlook remains volatile amid ongoingrapidly globalchanging conflict,U.S. – Iran relations, with potential stabilization in the second half of 2026. Longer term, global economic growth, energy security priorities, and projected multi-year increases in power consumption could bolster demand for both crude and natural gas.

We define Adjusted EBITDA as net income before depreciation, depletion and accretion expense, amortization expense of acquired intangible assets, interest expense, income tax expense, stock and unit-based compensation, loss on extinguishment of debt, loss on disposal of assets, insurance recovery (gain), unrealized commodity derivative gain (loss), litigation-related costs, net, other acquisition related costs, and other non-recurring costs. Management believes Adjusted EBITDA is useful because it allows them to more effectively evaluate our consolidated operating performance and compare the results of our operations from period to period and against our peers without regard to our financing methods or capital structure. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Certain prior period non-recurringlitigation-related costscosts, of goods soldnet are now included as an add-back to adjustedAdjusted EBITDA in order to conform to the current period presentation and to more accurately describe the Company’s consolidated operating performance and results period-over-period.

We define Maintenance Capital Expenditures as capital expenditures excluding growth capital expenditures, reconstruction of previously incurred growth capital expenditures, equipment assets acquired through debt, and asset retirement obligations. Certain prior period equipment assets acquired through debt and asset retirement obligations have been removed from capital expenditures in order to conform to the current period presentation and to more accurately describe the Company’s consolidated operating performance and results period-over-period.

(23) Other non-recurring costs includes loss on early payoff of lease financing, credit loss expense due to a dispute with a counterparty, costs incurred during our 2025 Term Loan Credit Facility (defined below under Debt Agreements) transactiontransaction, and other infrequent and unusual costs.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Product Revenue. Product revenue decreased by $30.7$23.1 million to $108.9$103.5 million for the three months ended MarchJune 31,30, 2026, as compared to $139.6$126.6 million for the three months ended MarchJune 31,30, 2025. Sand and logistics product revenue decreased by $34.0$25.1 million to $105.6$101.2 million for the three months ended MarchJune 31,30, 2026, as compared to $139.6$126.3 million for the three months ended MarchJune 31,30, 2025. There was a decrease in proppant prices between the periods which contributed to a $24.0$19.6 million decrease in product revenue. Additionally, a decrease in shortfall revenue contributed to aan $10.5$11.5 million decrease in product revenue. The decrease was partially offset by an increase in proppant sales volumes and logistics equipment sales volumes between periods which contributed to a $0.5$6.0 million increase in product revenue. Power product revenue isincreased $3.3by $2.0 million to $2.3 million for the three months ended MarchJune 31,30, 20262026, dueas compared to the$0.3 sale of power equipment. There was no power product revenuemillion for the three months ended MarchJune 31,30, 2025. The increase was due to more power equipment units sold in 2026 compared to 2025.

Service Revenue. Services revenue, which includes freight for last-mile logistics services, decreasedincreased by $11.5$16.3 million to $139.1$162.7 million for the three months ended MarchJune 31,30, 2026, as compared to $150.6$146.4 million for the three months ended MarchJune 31,30, 2025. There was a decrease in prices between the periods which contributed to a $20.9 million decrease in service revenue. The decrease was partially offset by an increase in sales volumes shipped to last-mile logistics customers between periods which contributed to a $9.4$14.9 million increase in service revenue.revenue along with a $1.4 million increase in prices between periods.

Rental Revenue. Rental revenue increased by $10.2$11.3 million to $17.5$27.0 million for the three months ended MarchJune 31,30, 2026, as compared to $7.3$15.7 million for the three months ended MarchJune 31,30, 2025. The increase in rental revenue was due to threemore monthspower ofequipment operationsbeing acquiredleased into the Moser Acquisitioncustomers for the three months ended MarchJune 31,30, 2026, as compared to one month of operations for the three months ended MarchJune 31,30, 2025.

Cost of sales (excluding depreciation, depletion and accretion expense). Cost of sales (excluding depreciation, depletion and accretion expense) increased by $7.9$25.4 million to $214.0$221.3 million for the three months ended MarchJune 31,30, 2026, as compared to $206.1$195.9 million for the three months ended MarchJune 31,30, 2025.

Cost of sales (excluding depreciation, depletion and accretion) related to product revenue increased by $10.8$5.5 million to $81.1$71.8 million for the three months ended MarchJune 31,30, 2026, as compared to $70.3$66.3 million for the three months ended MarchJune 31,30, 2025. Sand and logistics cost of sales related to product revenue increased by $8.7$4.3 million to $79.0$70.4 million for the three months ended MarchJune 31,30, 2026, as compared to $70.3$66.1 million for the three months ended MarchJune 31,30, 2025. This increase was due to increased production along with an increaseresulting in rentals,increased maintenance,production andcosts payrollbetween expenses.periods. Power cost of sales related to product revenue isincreased $2.1by $1.2 million to $1.4 million for the three months ended MarchJune 31,30, 20262026, dueas compared to the$0.2 sale of power equipment. There was no power cost of sales related to product revenuemillion for the three months ended MarchJune 31,30, 2025. The increase was due to more power equipment units sold between periods.

Cost of sales (excluding depreciation, depletion and accretion expense) related to services decreasedincreased by $6.5$16.8 million to $127.0$140.7 million for the three months ended MarchJune 31,30, 2026, as compared to $133.5$123.9 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease was due to utilizationincreased ofvolumes the Dune Express with shortened average drive distances for deliveriesdelivered to last-mile logistics customers during the period along with a decrease in maintenance expense between periods.

Cost of sales (excluding depreciation, depletion, and accretion expense) related to rentals increased by $3.6$3.1 million to $5.9$8.8 million for the three months ended MarchJune 31,30, 2026, as compared to $2.3$5.7 million for the three months ended MarchJune 31,30, 2025. This increase was due to threemore monthspower ofequipment operationsbeing acquiredleased into the Moser Acquisitioncustomers for the three months ended MarchJune 31,30, 2026, as compared to one month of operations for the three months ended MarchJune 31,30, 2025.

Depreciation, depletion and accretion expense. Depreciation, depletion and accretion expense increased by $8.2$5.4 million to $45.2$46.0 million for the three months ended MarchJune 31,30, 2026, as compared to $37.0$40.6 million for the three months ended MarchJune 31,30, 2025. Sand and logistics depreciation, depletion and accretion expense increased by $4.2$2.0 million to $40.1$40.2 million for the three months ended MarchJune 31,30, 2026, as compared to $35.9$38.2 million for the three months ended MarchJune 31,30, 2025, due to additionalan increase in depreciable assets placed into service when compared to the prior period. Power depreciation, depletion and accretion expense increased by $4.0$3.4 million to $5.1$5.8 million for the three months ended MarchJune 31,30, 2026, as compared to $1.1$2.4 million for the three months ended MarchJune 31,30, 2025, due to threean months of operations acquiredincrease in thedepreciable Moserassets Acquisitionplaced forinto theservice three months ended March 31, 2026, aswhen compared to one month of operations for the threeprior months ended March 31, 2025.period.

Selling, general and administrative expense. Selling, general and administrative expense increased by $1.3$5.0 million to $35.7$39.4 million for the three months ended MarchJune 31,30, 2026, as compared to $34.4 million for the three months ended MarchJune 31,30, 2025. The increase is due to an increase of $1.9$0.4 million from stock-based compensation, an increase of $2.4 million from the power segment with three months of operations in 2026 from the Moser Acquisition as compared to one month of operations in 2025,compensation and an increase of $3.3$6.1 million infrom consulting and professional feesfees, (net of insurance proceeds,proceeds (see Note 2- Summary of Significant Accounting Policies- Legal Insurance Proceeds), salaries and benefits, depreciation expense, and other corporate expenses. This increase was partially offset by a decrease in certain acquisition related costs and non-recurring costs of $6.3$1.5 million for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025.

Our selling, general and administrative expense includes the non-cash expense for stock-based compensation expense for equity awards granted to our employees. For the three months ended MarchJune 31,30, 2026, stock-based compensation expense was $8.4$8.7 million, as compared to $6.5$8.3 million of stock-based compensation expense for the three months ended MarchJune 31,30, 2025.

Amortization expense of acquired intangible assets. Amortization expense of acquired intangible assets increasedremained bymaterially $1.6consistent million toat $6.4 million for the three months ended MarchJune 31,30, 2026, as compared to $4.8$6.5 million for the three months ended MarchJune 31,30, 2025. The increaseactivity was primarily due to the amortization of intangible assets associated with acquisitions in 2025. See Note 3 - Acquisitions for more information.acquisitions.

InterestLitigation (expense),settlement expense, net. InterestLitigation settlement expense, net increasedis by $3.7 million to $15.8$2.6 million for the three months ended MarchJune 31,30, 2026, as compared to $12.1no millionlitigation settlement expense, net for the three months ended MarchJune 31,30, 2025.2025, Thedue increase is driven byto the 2025Ayers Termlitigation. LoanSee CreditNote Facility9 - Commitment and 2023Contingencies ABLfor Creditmore Facility (defined below under Debt Agreements).information.

Income tax expenseInterest (benefitexpense)., Incomenet. taxInterest expenseexpense, (benefit)net decreasedincreased by $2.8$1.4 million to $(0.5)$16.2 million for the three months ended MarchJune 31,30, 2026, as compared to $2.3$14.8 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease is primarilydriven attributable to a decrease in income before income taxes and an increase in percentage depletion in excess of basis forby the threeinterest monthsexpense ended March 31, 2026 as compared tofrom the threeLease monthsDocuments ended(defined Marchbelow 31,under 2025.Debt Agreements).

Our primary sources of liquidity to date have been capital contributions from our owners, cash flows from operations, equity offerings, the 2031 Notes, and borrowings under our previous term loan credit facilities, and our previous asset-based loan credit facilities. Going forward, we expect our primary sources of liquidity to be cash flows from operations, proceeds from the April 2026 issuance of the 2031 Notes, availability under our 2023 ABL Credit Facility as amended, funding under our Lease Documents or any other credit facility or lease agreements we enter into in the future and proceeds from any future issuances of debt or equity securities. We expect our primary use of capital will be used for investing in our business, specifically for acquisition of fit-for-purpose equipment used in our logistics platform, and power-related growth capital expenditures. In addition, we have routine facility upgrades and additional ancillary capital expenditures associated with, among other things, contractual obligations and working capital obligations.

As of MarchJune 31,30, 2026, we had working capital, defined as current assets less current liabilities, of $49.8$216.4 million and $49.7$124.7 million of availability under the 2023 ABL Credit Facility. Our cash and cash equivalents totaled $39.8$168.2 million.

ThreeSix Months Ended MarchJune 31,30, 2026 Compared to ThreeSix Months Ended MarchJune 31,30, 2025

Net Cash Provided by (used in) Operating Activities. Net cash provided by operating activities was $19.0$18.4 million and net cash used in operating activities was $7.5$81.2 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Net income (loss) adjusted for non-cash items for the threesix months ended MarchJune 31,30, 2026 resulted in a cash increase of $9.2$41.6 million, as compared with a cash increase of $53.3$106.7 million for the threesix months ended MarchJune 31,30, 2025. This change was primarily due to lower earnings in 2026. ChangesThe remaining movement was due to changes in net working capital for the three months ended March 31, 2026 resulted in a cash increase of $9.9 million, as compared with a cash decrease of $60.7 million for the three months ended March 31, 2025. This change was primarily due to a decrease in accounts receivable and an increase in accounts payable and accrued liabilities and other liabilities in the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.capital.

Net Cash Used in Investing Activities. Net cash used in investing activities was $22.6$174.1 million and $228.5$268.8 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease in cash used is primarily attributable to the $181.5 million used in the Moser Acquisition that occurred during the threesix months ended MarchJune 31,30, 2025, as compared to no such activity for the threesix months ended MarchJune 31,30, 2026. Additionally,The theredecrease was lesspartially offset by an increase in capital spendingspending, atprimarily from the Kermitpower and Monahans facilities, OnCore distributed mining network, Dune Express and logistics assetssegment, during the threesix months ended MarchJune 31,30, 2026 when compared to the threesix months ended MarchJune 31,30, 2025.