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

changes in federal government regulation of offshore resources for the production of oil and natural gas or the development of offshore wind farms;

changes in lawsa andwide regulations,range includingof environmentalother laws and regulations that can adversely affect the cost, manner or feasibility of doing business;

inability to selldivest off a portionparts of the business or forfeiture of vessels resulting from restrictions placed on non-U.S. citizen ownership;

The market for the Company’s offshore support services is impacted by the comparative price for exploring, developing, and producing oil and natural gas and by the corresponding supply and demand for oil and natural gas, both globally and regionally. The prices of these commodities are subject to significant volatility. Among other factors, the increased supply of oil and natural gas from the development of unconventional oil and natural gas supply sources, particularly shale, and technologies to improve recovery from current sources have caused volatility in the price of oil and natural gas as well as a reduction of demand and prices charged for offshore support services globally. The increased use of electric cars and the development of alternative sources of energy to hydrocarbons, such as solar and wind power and other developing technology, as well as increasing regulations on greenhouse gas emissions and actions taken and expected to be taken by companies, governments and investors to reduce dependence on hydrocarbon-based fuels,fuels are widely expected tocould further diminish the demand for oil and natural gas in the coming years. Other factors that influence the supply and demand and the relative price of oil and natural gas include operational issues, natural disasters, weather, political instability, conflicts, civil unrest, the worldwide economic, political and military environment, acts of terrorism, foreign exchange rates, economic conditions and actions by major hydrocarbon-producing countries, as well as sanctions on such countries that prohibit the sale of these commodities. TheFor example, the implementation or removal of sanctions on countries with oil and natural gas production could significantly decrease or increase the supply of oil and natural gas and the corresponding price for such commodities. Additionally, the price of oil and natural gas and the relative cost to extract, proximity to market and political imperatives of countries with offshore deposits affect the willingness to commit investment for contract drilling rigs and offshore support vessels used for offshore exploration, field development and production activities, which in turn affects the Company’s results of operations. Prolonged periods of low oil and natural gas prices or rising costs result in lower demand for the Company’s services and can give rise to impairments of the Company’s assets.

The Company’s operations depend on the level of spending by oil and natural gas companies for exploration, development and production, maintenance and decommissioning activities. Both short-term and long-term trends in oil and natural gas prices affect these activity levels. Oil and natural gas prices, as well as the level of drilling, exploration and production activity, have been highly volatile over the past few years and are expected to continue to be volatile for the foreseeable future. The volatility of the energy markets generally makes it extremely difficult to predict future oil and natural gas price movements over the long term. For example, the West Texas Intermediate (“WTI”) front month oil prices experienced unprecedented volatility during 2020 due to the COVID-19 pandemic and the related effects on the global economy, including going negative for a short period of time. Oil prices then steadily increased from the lows hit at the beginning of the COVID-19 pandemic and hit a multi-year high of $122 per barrel during 2022, primarily as a result of the conflict between Russia and Ukraine as well as the related economic sanctions imposed on Russia by the U.S., Canada and European countries and economic uncertainty but subsequently decreased to pre-conflict levels. Recent U.S. foreign policy decisions may also have short- and long-term effects on oil and gas pricing. During 2024,2025, WTI oil prices hit a low of $66$55 per barrel in SeptemberDecember 20242025 and a high of $87$81 per barrel in AprilJanuary 2024,2025, ending the year at $72$57 per barrel.

Declines in oil prices are primarily caused by, among other things, an excess of supply of crude oil in relation to demand. Since developing offshore oil fields, particularly in deep waters, is one of the most capital intensive sources of hydrocarbons and providing transportation and logistics services to these markets is the largest component of the Company’s business, the Company is particularly exposed to depressed oil and natural gas prices that last for some period of time. When the Company’s customers experience low commodity prices or come to believe that they will be low in the future, they generally reduce their capital spending for offshore drilling, exploration and field development. The significant decrease in oil and natural gas prices experienced in 2020 as a result of the COVID-19 pandemic and the related effects of the pandemic on the global economy caused a reduction in many of the Company’s customers’ exploratory, drilling, completion and other production activities and, as a result, reduced related spending on the Company’s services. While spending on the Company’s services has steadily improved,improved since the pandemic, the Company’s overall fleet utilization for the years ended December 31, 2024,2025, 20232024 and 2022,2023, was 67%,66%, 75%67% and 75%, respectively. The prolonged reduction in the overall level of exploration and development activities has materially and adversely affected the Company by negatively impacting its fleet utilization, which in turn has negatively affected its revenues, cash flows, profitability and the fair market value of the Company’s vessels. It could also affect the collectability of the Company’s receivables and its ability to retain skilled personnel. Periods of low activity intensify price competition in the industry, which erodes operating margins, and can lead to the Company’s vessels being idle for long periods of time and, in turn, could lead to significant expenses upon reactivation.

international sanctions on oil and natural gas producing countriescountries, including certain sanctions against Iran, Russia and Venezuela andVenezuela, the acceptance of oil produced by such countries, and the allocation of our customers’ capital expenditure budgets to such countries;

The Company operates in four primary regions: the U.S., primarily U.S. Gulf of America; Africa and Europe; the Middle East and Asia; and Latin America, primarily in MexicoGuyana and Guyana.Mexico. The volume of work contributed by each region changes periodically due to a number of factors including how active each region is, how many vessels are working in each region and the changing political, economic or regulatory landscape of the applicable region. For instance, for the years ended December 31, 2025, 2024, and 2023, and 2022, approximately 13%,16%, 21%13% and 28%,21%, respectively, of the Company’s operating revenues were earned in the U.S. The Company has some ability to shift the location of its assets between regions depending upon local regulation and cost of doing business, among many other factors, and, while it has repositioned some assets from less active regions to other regions and may continue to do so in the future, such efforts may not be sufficient to counter any changes in demand in any particular region.

The Company’s existing credit facilities impose, and its future credit facilities may impose, restrictions, such as negative covenants and maintenance of financial ratio covenants, which may limit the Company’s operating and financial flexibility. Negative covenants such as limitations on the incurrence of additional indebtedness or liens may affect the Company’s ability to incur additional debt if needed, while asset sale covenants could affect its ability to sell assets to generate liquidity and properly manage its fleet size. Requirements to maintain a minimum level of liquidity could also affect cash available for working capital, capital expenditures, debt service and general corporate purposes. For instance, the 2024 SMFH Credit Facility (as defined below) contains covenants limiting the ability of the Company and its subsidiaries to incur additional indebtedness or liens (subject to important exceptions) and also requires the Company to maintain a minimum of Cash and Cash Equivalents equal to the higher of $20.0 million and 7.5% of Net Interest-Bearing Debt (as each are defined in the 2024 SMFH Credit Facility) (see “Note 5. Long-Term Debt” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K). While the Company was in compliance with all such covenants as of December 31, 2024,2025, the Company’s ability to maintain compliance with these financial ratio covenants may be affected by general economic conditions or other events beyond the Company’s control and no assurance can be given that such ratios will be met in the future. If the Company is unable to meet such ratios or is otherwise unable to comply with covenants in these facilities, it may be unable to reach agreements with the lenders under such credit facilities for waivers and/or amendments to the applicable covenants. Failure to comply with these restrictions could result in the lenders accelerating all amounts due under the credit facility and potentially trigger a cross-default or acceleration of the Company’s other credit facilities.

Prolonged periods of low utilization or low day or charter rates, the sale of assets below their then carrying value or the decline in market value of the Company’s assets may cause the Company to record additional impairments. If there are indications that the carrying value of any of the Company’s vessels or other tangible assets may not be recoverable or if the Company sells assets for less than their carrying value, the Company may recognize additional impairment charges on its fleet. During 2024,2025, 2023the Company did not recognize impairment charges related to tangible assets. During 2024 and 2022,2023, the Company recognized impairment charges of $3.7 million, $0.7 million and $2.9$0.7 million, respectively, related to tangible assets.

The Company derives a significant portion of its revenues from a limited number of customers. During the years ended December 31, 2025, 2024, 2023, and 2022,2023, the Company’s ten largest customers accounted for approximately 76%,84%, 73%76% and 66%,73%, respectively, of its operating revenues. During the year ended December 31, 2024,2025, twothree customers, AzuleAzule, ExxonMobil and SEACOR Marine Arabia, a joint venture through which vessels are chartered to Saudi Aramco, were together responsible for 40%58% of the Company’s operating revenues. In addition, one or more of the Company's joint ventures may rely primarily on a single customer for their revenues. The portion of the Company’s revenues or any of its joint ventures’ revenues attributable to any single customer may change over time, depending on the level of activity by any such customer, the Company’s ability to meet the customer’s needs and other factors, many of which are beyond the Company’s control. Additionally, most of the Company’s contracts with its customers can be canceled on relatively short notice and do not commit its customers to acquire specific amounts of services or require the payment of significant liquidated damages upon cancellation. The loss of business from any of the Company’s significant customers, whether temporary or permanent, the result of competition, military conflict or changes in consumer preferences, could have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and prospects. Further, to the extent any of the Company’s customers experience an extended period of operating difficulty, it may have a material adverse effect on the Company’s business, financial position, results of operation, cash flows and prospects.

As of December 31, 2024,2025, the average age of the Company’s owned vessels was approximately ten11 years. The Company believes that after a vessel has been in service for approximately 20 years, the expense (which typically increases with age) necessary to satisfy required marine certification standards may not be economically justifiable. In addition, the Company must maintain its vessels to remain attractive to its customers and comply with regulations, including updating or replacing systems and equipment. However, the Company may be unable to carry out drydockings of its vessels, may be limited by insufficient shipyard capacity or its systems and equipment may become obsolete and unsupported by the manufacturer or other service providers, which could adversely affect its ability to maintain its vessels. In addition, market conditions may not justify these expenditures or enable the Company to operate its older vessels profitably during the remainder of their economic lives. While the Company has entered into agreements to build two PSVs with expected delivery in the fourth quarter of 2026 and first quarter of 2027, respectively, there can be no assurance that the Company will be able to maintain its fleet by extending the economic life of existing vessels, or that its financial resources will be sufficient to enable it to make expenditures necessary for these purposes or to acquire or build replacement vessels, all of which could have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and prospects.

Attracting and retaining skilled personnel is an important factor in the Company’s future success. In addition, the success of the Company is dependent upon its ability to adequately crew its vessels. The market for qualified personnel is highly competitive, particularly in the last few years, and global and/or regional conflicts, such as the conflict between Russia and Ukraine andUkraine, the conflicts in the Middle East,East and military intervention by the U.S. in Venezuela, may further reduce or restrict the availability of qualified personnel or the willingness of qualified personnel to operate in certain regions, particularly with respect to certain technical and engineering positions, including marine officers.

AsHistorically, during periods of Decemberlow 31, 2024, two of 51 owned vessels were cold-stacked worldwide and, if the industry experiences another downturn,utilization, the Company may determineadhered to cold-stacka additionalpolicy of cold stacking vessels into responsedecrease maintenance and related variable costs. While cold stacking vessels helps maintain financial discipline, the cost and time to suchreactivate downturn.cold-stacked vessels could be significant. No assurance can be given that the Company will be able to quickly bring these cold-stacked vessels back into service or that the cost of doing so would not be significant. Cold-stacked vessels do not receive the same level of maintenance as active vessels. As a result and depending on the length of time the vessels are cold-stacked, the Company could incur deferred drydocking costs for regulatory recertification to return these vessels to active service and may incur costs to hire and train mariners to operate such vessels. These costs are difficult to estimate and could be substantial. Delay in reactivating cold-stacked vessels and the costs and other expenses related to the reactivation of cold-stacked vessels could have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and prospects.

In 2022, the U.S. and other developed countries experienced significantly heightened inflationary pressures related to the policies implemented during COVID-19 and the ensuing economic recovery, causing disruptions in demand, supply chains, and labor markets. The general economy in 2022 was also affected by the war in Ukraine and associated increase in energy costs. While the global inflation rate beganhas toeased easesignificantly somewhatfrom its highs in 2023 and 2024 as a result of central bank policy tightening,2022, core inflation remains persistent. As a result of the decline in global inflation, while the U.S. Federal Reserve cut the federal funds rate three times in 2024 by a total of 100 basis points,points theand U.S.three Federal Reserve held rates steadytimes in their January 2025 meeting and indicated the pause will likely continue for 2025. As a result,total thereof 75 basis points. There is no telling if interest rates will stabilize, continue to increase or continue to decrease, either globally or in the U.S. specifically. The Company expects these inflationary pressures to continue to impact its margins and more generally, its businessbusiness, in 2025.2026.

The Company’s ability to renew or replace expiring contracts or obtain new contracts, and the terms of any such contracts, will depend on various factors, including market conditions and the specific needs of its customers. Given the highly competitive and historically cyclical nature of the industry, the Company may not be able to renew or replace expiring contracts or it may be required to renew or replace expiring contracts or obtain new contracts at rates that are below, and potentially substantially below, existing day rates, or that have terms that are less favorable to the Company than its existing contracts, or it may be unable to secure contracts for these vessels. ThisFor example, two of the Company's liftboats in the Middle East recently ended their contracts and have entered a period of drydocking for maintenance and repair. When these liftboats complete their drydockings and return to market, the Company's ability to obtain new contracts for these liftboats is subject to the above-described risks. These risks could have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and prospects.

The Company relies on information technology networks and systems, including the Internet and cloud services, to process, transmit and store electronic and financial information, manage a variety of business processes and activities, and comply with regulatory, legal and tax requirements. The Company also depends on its information technology infrastructure to capture knowledge of its business including its vessel operation systems containing information about vessel positioning and scheduling; monitor its vessel maintenance and engine systems; to coordinate its business across its bases of operation including cargo delivery and equipment tracking; and communicate within its organization and with customers, suppliers, partners and other third parties. The Company’s ability to service customers and operate vessels is dependent on the continued operation of these systems. While the Company takes various precautions and has enhanced controls around its information technology systems, like other technology systems, they are susceptible to damage, disruptions or shutdowns, hardware or software failures, power outages, computer viruses, telecommunication failures, user errors, catastrophic events, or cyber-attacks including malware, other malicious software, phishing email attacks, attempts to gain unauthorized access to its data, the unauthorized release, corruption or loss of its data, loss or damage to its data delivery systems, ransomware, and other electronic security breaches. Over time, the techniques used to conduct these cyber-attacks, as well as the sources and targets of these attacks, have changed and become increasingly sophisticated, including the application of generative AI and the increased use of cyber-attack tools that can circumvent security controls and evade detection. In addition, there has been an increase in cyber-attacks conducted or sponsored by capable and well-funded “nation state” operators and other advanced persistent threat actors. The Company expects that sophistication and techniques of cyber-threats will continue to evolve as threat actors increase their use of AI and machine-learning technologies.

Regulation of the offshore marine industry has intensified over the past several decades, and the Company expects this trend to continue. Changes in laws or regulations regarding offshore oil and natural gas exploration and development activities and technical and operational measures may increase the Company’s costs and the costs of its customers’ operations. For instance, in response to fatalities and environmental damages caused by a 2010 explosion on the Deepwater Horizon, a drilling rig operating in the U.S. Gulf of America, various regulatory agencies imposed temporary moratoria on drilling operations and enacted several permanent regulations designed to enhance the safety of operations in the U.S. Gulf of America. Compliance with these new regulations and new interpretations of existing regulations have materially increased the cost of drilling operations in the U.S. Gulf of America. New or additional government regulations or laws concerning drilling operations in the U.S. Gulf of America and other regions have in the past and could in the future materially increase the cost of drilling operations in those markets or cause additional moratoria on drilling activities. These changes could decrease offshore operations or investments by the Company’s current or prospective customers, and thereby reduce the demand for the Company’s services. Moreover, continuing changes in regulation increase our compliance costs and make it more difficult for the Company to implement long-term plans. In addition, the bodies that regulate maritime operations are considering enacting regulations meant to safeguard the industry and its participant from cyber-threats. These regulations could lead to additional costs for the Company, as well as disruption to its information technology systems. For these reasons, further changes in regulation of the offshore marine industry could have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and prospects.

The Outer Continental Shelf Lands Act provides the federal government with broad discretion in regulating the release or continued use of offshore resources for oil and natural gas production and authorizes the U.S. President to issue leasing moratoriums or bans. Various political leaders and public interest groups oppose further leasing, and from time to time U.S. Presidents have issued leasing moratoriums or bans, including drilling bans. On January 6, 2025, the U.S. President temporarily stopped allowing oil and natural gas leasing in certain unleased areas within the EEZ of the U.S. including areas on the East and West Coasts, the eastern Gulf of America, and portions of Alaska’s Northern Bering Sea. Furthermore, on January 20, 2025, the U.S. President suspended new or renewed wind energy leasing in the Outer Continental Shelf. Additionally, on December 22, 2025, the Director of the U.S. Bureau of Ocean Energy Management issued stop-work orders to suspend all ongoing activities for 90 days related to five offshore wind projects on the Outer Continental Shelf. These actions create uncertainties regarding the current and future level of permitted offshore leasing. New offshore oil and natural gas exploration, drilling or production may be subject to continuing or newly enacted moratoriums or bans. Because the Company’s operations rely on offshore oil and natural gas exploration and production, as well as on offshore wind farm operations, the government’s exercise of authority under the provisions of the Outer Continental Shelf Lands Act to restrict the availability of offshore oil and natural gas leases (due to accidents, environmental concerns or otherwise) could have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and prospects. To the extent other nations similarly restrict economic development in their offshore waters, those restrictions could similarly adversely impact the Company.

The Company is subject to a wide range of other complex laws and regulations, including environmental laws and regulations,regulations that can adversely affect the cost, manner or feasibility of doing business.

In addition, an oil spill could result in significant liability, including fines, penalties, criminal liability and costs for natural resource and other damages under other federal and state laws and civil actions. Liability for a catastrophic spill could exceed the Company’s available insurance coverage and result in adverse impacts on the Company, including having to liquidate assets to pay claims. These laws and regulations may expose the Company to liability for the conduct of or conditions caused by others, including charterers. As these laws and regulations frequently change and lack uniformity, the Company can neither assure it will remain in compliance nor predict the ongoing cost of complying with these laws and regulations. Additionally, reduced enforcement of existing safety and other laws or regulations may result in a decline in the demand for the Company’s offshore support services that are provided in connection with compliance with such laws or regulations. The Company cannot be certain that existing laws, regulations or standards (and the enforcement thereof), as currently interpreted or reinterpreted in the future, or future laws and regulations and standards will not have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and prospects. Regulation of the offshore marine services industry will likely continue to become more stringent and more expensive for the Company. In addition, a serious marine incident that results in significant pollution or injury could result in additional regulation and lead to strict governmental enforcement or other legal challenges. The variability and uncertainty of current and future shipping regulations could hamper the ability of the Company and its customers to plan for the future or establish long-term strategies. Additional environmental and other requirements, as well as more stringent enforcement policies, may be adopted that could limit the Company’s ability to operate, require the Company to incur substantial additional costs or otherwise have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and prospects. For more information, see “Item 1. Business—Governmental Regulations—Regulatory Compliance” of this Annual Report on Form 10-K.

The regulatory landscape is constantly changing, particularly with respect to climate change regulations. On March 6, 2024, the SEC implemented new climate disclosure rules, requiring companies to disclose the impact of climate change and their risk mitigation strategies, among other things. While implementation of these rules werehave been voluntarily stayed by the SEC, pending judicial review, the final outcome remains uncertain, making it difficult to predict their potential impact on the Company, including potential regulatory compliance costs.

From time to time, extreme weather causes the Company or its customers to suspend business operations. Climate change may increase the frequency and severity of these extreme weather events and certain adverse weather patterns in the future, which could increase the Company’s exposure to suspended operations and/or put the Company’s properties at risk for weather related damage. Climate change may also affect our ability to procure insurance for the Company’s vessels as well as its facilities in areas with higher exposure to the effects of climate change or to repair and rebuild such facilities if needed in the future. Concern over climate change may also result in new or increased legal or regulatory requirements, which could accelerate the above-described trends towards enhanced regulation of the Company’s operations. In addition, there may be significant physical effects of climate change from such emissions that have the potential to negatively impact the Company’s customers, personnel, and physical assets, any of which could adversely impact cargo levels, the demand for the Company’s services, or the Company’s ability to recruit personnel and operate efficiently. Moreover, uncertainty related to regulations generally associated with climate change and renewable energy can increase Company costs and affect its results of operations. For instance, certain of the Company’s vessels are used to service offshore wind farms. It is unclear what the long-term effect of the current U.S. administration’s policies related wind farms will have on that industry and, in turn, our provision of services to the industry.

While some investors continueadvocate tofor bean focusedincreased focus on ESG matters and failure to address their needs could lead to stock price volatility,matters, there has been an increase in anti-ESG and anti-diversity, equity and inclusion initiatives and sentimentsentiment, which may serve as a counteracting concern in the future, particularly in light ofincluding recent changes in U.S. governmental policy,policy. andThese developments could result in additional compliance obligations or becoming the subject of investigations or enforcement actions.

regional conflicts, including in Ukraine, Israel and around the Red SeaSea, and Venezuela;

Restrictions on non-U.S. citizen ownership of the Company’s vessels could limit its ability to selldivest off any portionparts of its business or result in the forfeiture of its vessels.

As noted above, compliance with the Jones Act requires that non-U.S. citizens own no more than 25% in the entities that directly or indirectly own or operate the vessels that the Company operates in the U.S. coastwise trade. If the Company were to seek to sell any of these vessels or a portion of its business that ownsoperates any of these vessels,them, it may have fewer potential purchasers, since some potential purchasers might be unable or unwilling to satisfy the U.S. citizenship restrictions described above. As a result, the sales price forreceived thatfrom portionany ofsuch the Company’s businesspurchaser may not attain the amount that could be obtained through unconstrained bidding. Furthermore, if at any point the Company or any of the entities that directly or indirectly own its vessels cease to satisfy the requirements to be a U.S. citizen within the meaning of the Jones Act, the Company would become ineligible to operate in the U.S. coastwise trade and may become subject to penalties and risk forfeiture of its vessels.

The Merchant Marine Act provides that, during a national emergency declared by presidential proclamation or a period for which the U.S. President has proclaimed that the security of the national defense makes it advisable, the Secretary of Transportation may requisition the ownership or use of any vessel owned by U.S. citizens (which includes the Company) and any vessel under construction in the U.S. If any of the Company’s vessels were purchased or chartered by the federal government under this law, the Company would be entitled to just compensation, which is generally the fair market value of the vessel in the case of a purchase or, in the case of a charter, the fair market value of charter hire, but the Company would not be entitled to compensation for any consequential damages it may suffer. The purchase or charter for an extended period of time by the federal government of one or more of the Company’s vessels under this law could have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and prospects. Vessels registered by the Company under other flag states may also be subject to requisition or purchase in accordance with comparable applicable locallaws laws.of those states.

An investor’s percentage of ownership in the Company may be diluted in the future as result of warrant exercise, the issuance of equity incentive awards,awards and sales of Common Stock, including pursuant to the Company’s ATM Program.

The success of the Company’s business is both directly and indirectly dependent upon conditions in the global financial markets and economic conditions in the U.S. and throughout the world that are outside the Company’s control and are difficult to predict. Factors such as global and/or regional conflicts, such as the conflict between Russia and Ukraine and the hostilities in the Middle East, military intervention by the U.S. in Venezuela, pandemic responses, commodity prices and demand for commodities, interest rates, availability of credit, inflation rates, changes in laws (including laws relating to taxation), trade barriers, currency exchange rates and controls, significant economic downturns or recessions and national and international political circumstances (including wars, terrorist acts, security operations or pandemics) can have a material negative impact on the Company’s business and investments, which could reduce its revenues and profitability. Uncertainty about global economic conditions may cause or require businesses to postpone capital spending in response to tighter credit and reductions in income or asset values and to cancel or renegotiate existing contracts because their access to capital is impeded. This would in turn affect the Company’s profitability or results of operations. These factors may also adversely affect the Company’s liquidity and financial condition and the liquidity and financial conditions of its customers. Volatility in the conditions of the global economic markets can also affect the Company’s ability to raise capital at attractive prices. The Company’s ongoing exposure to credit risks on its accounts receivable balances are heightened during periods when economic conditions worsen. The Company has procedures that are designed to monitor and limit exposure to credit risk on its receivables, however, there can be no assurance that such procedures will effectively limit the Company’s credit risk and avoid losses that could have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and prospects. Unstable economic conditions, including an economic downturn or recession may also increase the volatility of the Company’s stock price. An economic downturn and related economic uncertainty may have a negative impact on the Company’s business.

Changes or modifications in financial accountaccounting standards or practices may cause an adverse impact on reported results of operations or financial conditions.

The Company provides global marine and support transportation services to offshore energy facilities worldwide. As of December 31, 2024,2025, the Company operated a diverse fleet of 5444 support vessels, of which 51all were owned and three were managed on behalf of unaffiliated third parties.owned. The primary users of the Company’s services are major integrated national and international oil companies, independent oil and natural gas exploration and production companies, oil field service and construction companies, as well as offshore wind farm operators and offshore wind farm installation and maintenance companies.

On December 10,19, 2024,2025, the Company completed the sale of twoone AHTS201 foot, DP-2 PSV built in 2013 for total proceeds of $22.5$13.4 million and a gain of $15.6approximately $8.1 million. ThisApproximately $11.0 million of these sale markedproceeds were designated to make future payments on the Company’sconstruction exitof fromtwo the AHTS asset classPSVs and thedeposited proceedsin willa berestricted used to partially fund the contract price for the newbuild PSVs described below. The Company manages the two sold AHTS on behalf of the new owners.account.

expectations as to the future demand for oil and natural gas in the context of plans for the transition to non-hydrocarbon based sources of energy;

military conflicts and terrorism in oil producing regions, including the Middle EastEast, Venezuela and Russia;

transitions to and demand for non-hydrocarbon based energy sources and uncertainty related to national and supranational attitudes towards energy transition;

While the Company has experienced difficult market conditions over the past few years due to low and volatile oil and natural gas prices and the focus of oil and natural gas producing companies on cost and capital spending budget reductions,discipline, the increases since the lows experienced during the COVID-19 pandemic in oil and natural gas prices has led to an increase in utilization, day rates and customer inquiries about potential new charters.projects.

Certain macro drivers somewhat independent of oil and natural gas prices may support the Company’s business, including: (i) underspending by oil and natural gas producers over the last five to ten years leading to pent up demand for maintenance and growth capital expenditures; (ii) improved extraction technologies; and (iii) the need for offshore wind farm support as the industry grows. While the Company expects that alternative forms of energy will continue to develop and add to the world’s energy mix, especially as certain governments, supranational groups, institutional investors, and various other parties focus on climate change causes and concerns, the Company believes that for the foreseeable future demand for gasoline and oil will be sustained, as will demand for electricity from natural gas.gas, particularly in the context of expanded power generation demand worldwide. Some alternative forms of energy such as offshore wind farms support some of the Company’s operations and the Company expects such support to increase asto the extent that development of these forms of renewable energy expands.

The Company adheres to a strategy of cold-stacking vessels (removing from active service) during periods of weak utilization in order to reduce the daily running costs of operating the fleet, primarily personnel, repairs and maintenance costs, as well as to defer some drydocking costs into future periods. The Company considers various factors in determining which vessels to cold-stack, including upcoming dates for regulatory vessel inspections and related dockingdrydocking requirements. The Company may maintain class certification on certain cold-stacked vessels, thereby incurring some drydocking costs while cold-stacked. Cold-stacked vessels are returned to active service when market conditions improve, or management anticipates improvement, typically leading to increased costs for drydocking, personnel, repair and maintenance in the periods immediately preceding the vessels’ return to active service. Depending on market conditions, vessels with similar characteristics and capabilities may be rotated between active service and cold-stack. On an ongoing basis, the Company reviews its cold-stacked vessels to determine if any should be designated as retired and removed from service based on the vessel’s physical condition, the expected costs to reactivate and restore class certification, if any, and its viability to operate within current and projected market conditions. As of December 31, 2024,2025, twoone of the Company’s 5144 owned vessels werewas cold-stacked worldwide. In addition, the Company had two vessels classified as held for sale as of December 31, 2024.2025.

The Company’s operations expose it to the effects of inflation. Inflation has become a significant factor in the world economy post-pandemic and has led to an increased interest rate environment as well as inflationary pressures on the Company’s operations, including but not limited to increased labor, repairs and maintenance, transportation and insurance costs. The Company’s borrowingsborrowing areis allon ata fixed ratesrate basis and therefore interest rate fluctuations no longer affect the interest costs reflected in the Company’s financial results.

The Company operates its fleet in four principal geographic regions: the U.S., primarily in the Gulf of America; Africa and Europe; the Middle East and Asia; and Latin America, primarily in MexicoGuyana and Guyana.Mexico. The Company’s vessels are highly mobile and regularly and routinely move between countries within a geographic region. In addition, the Company’s vessels are redeployed among geographic regions, subject to flag restrictions, as changes in market conditions dictate. The number and type of vessels operated, their rates per day worked and their utilization levels are the key determinants of the Company’s operating results and cash flows. Unless a vessel is cold-stacked, there is little reduction in daily running costs for the vessels and, consequently, operating margins are most sensitive to changes in rates per day worked and utilization. The Company manages its fleet utilizing a global network of shore side support, administrative and finance personnel.

personnel (primarily wages, benefits, payroll taxes, savings plansplans, training and travel for marine personnel);

During 2025, the Company did not record impairment charges on any owned vessels. During 2024, the Company recorded impairment charges of $3.7 million for other equipment. During 2023, the Company recorded impairment charges of $0.7 million for one leased-in AHTS. During 2022, the Company recorded impairment charges of $1.6 million for one FSV that was sold during the year and one leased-in AHTS. Estimated fair values for the Company’s owned vessels wereare established by independent appraisers and other market data such as recent sales of similar vessels. For information regarding the Company’s vessel fair value measurement determinations, see “Note 8. Fair Value Measurements” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

For vessel classes and individual vessels with indicators of impairment, but which were not impaired as of December 31, 2024,2025, the Company has estimatedassessed that their futureestimated undiscountedfair cashvalue flows exceedexceeds their current carrying values. TheFair Company’svalue estimatesdetermination is primarily accomplished by obtaining independent valuations of futurevessel undiscountedor cashvessel flowsclasses arefrom highlyqualified subjectivethird party appraisers and other market data such as utilizationrecent and rates per day worked are uncertain, including changes in the offshore oil and natural gas markets and the timing and costsales of reactivating cold-stackedsimilar vessels. As markets change, the impact of vessel impairments will be evaluated.

Operating Revenues. Charter revenues were $3.9$15.7 million higherlower in 20242025 compared with 2023.2024. Charter revenues were $9.5$8.9 million higherlower for the Regional Core Fleet, which consists of 1411 vessels, due to higherlower average day rates of $17,356$17,459 in 2025 compared to $19,473 in 2024 and lower utilization of 75% in 2025 compared to $15,871 in 2023, and an increase in fleet utilization from 74% in 2023 to 79%78% in 2024. Charter revenues were $3.5$7.5 million lower due to the disposition of onethree vesselvessels insubsequent 2023to 2024 and $2.1$0.7 million lowerhigher due to the repositioning of one vessel out ofinto the region. Other marine services were $2.4$0.4 million lower primarily due to non-recurringlower businesscatering interruption insurance revenue recorded in 2023.revenues. As of December 31, 20242025 and December 31, 2023,2024, the Company had no vessels cold-stacked in this region.

Operating Revenues. Charter revenues were $2.8$13.5 million lower in 20242025 compared with 2023.2024. Charter revenues were $3.5$21.8 million lower due to the repositioning of fivetwo vessels out of the region, partially offset by the repositioning of two vessels into the region andsubsequent $0.7to 2024. Charter revenues were $8.3 million higher for the Regional Core Fleet, which consists of eightsix vessels, primarily due to higher utilization of 68% in 2025 compared to 63% in 2024 and higher average day rates of $21,468$22,475 in 20242025 compared to $18,455$19,388 in 2023, substantially offset by lower utilization of 63% in 2024 compared to 85% in 2023.2024. Other marine services were $2.5$2.8 million higherlower in 20242025 compared with 20232024 primarily due to higherlower catering revenues. As of December 31, 20242025 and December 31, 2023,2024, the Company had no vessels cold-stacked in this region.

Direct Operating Expenses. Direct operating expenses were $9.9$12.6 million higherlower in 20242025 compared with 2023.2024. Direct operating expenses $8.0were $9.0 million higherlower due to the repositioning of vessels between geographic regions and $3.6 million lower for the Regional Core Fleet primarily due to the timing of certain drydocking and repair expenditures and $1.9 million higher due to the repositioning of vessels between geographic regions.expenditures.

Operating Revenues. Charter revenues were $15.4$2.8 million higherlower in 20232024 compared with 2022.2023. Charter revenues were $11.0$3.5 million lower due to the repositioning of five vessels out of the region, partially offset by the repositioning of two vessels into the region and $0.7 million higher for the Regional Core FleetFleet, which consists of eight vessels, primarily asdue ato resulthigher of increasedaverage day rates andof $4.4$21,468 in 2024 compared to $18,455 in 2023, substantially offset by lower utilization of 63% in 2024 compared to 85% in 2023. Other marine services were $2.5 million higher in 2024 compared with 2023 primarily due to thehigher repositioningcatering of vessels between geographic regions.revenues. As of December 31, 20232024 and December 31, 2022,2023, the Company had no vessels cold-stacked in this region.

Direct Operating Expenses. Direct operating expenses were $0.7$9.9 million lowerhigher in 20232024 compared with 20222023. Direct operating expenses were $8.0 million higher for the Regional Core Fleet primarily due to the timing of certain drydocking and repair expenditures.expenditures and $1.9 million higher due to the repositioning of vessels between geographic regions.

Lease Expense.expense. Leased-in equipment expenses were $0.5 million lower compared with 2024 primarily due to having no leased-in vessels in 2025 compared to one in 2024. Leased-in equipment expenses were $1.1 million lower for 2024 compared with 2023 primarily due to having one leased-in vesselsvessel in 2024 compared to two in 2023. Leased-in equipment expenses were $1.1 million lower for 2023 compared with 2022 primarily due to the impairment of one leased-in vessel in 2022.

Administrative and general. Administrative and general expenses were $2.8 million higher in 2025 compared with 2024 primarily due to increases in professional fees of $2.8 million and increases in wages and benefits expenses of $0.7 million partially offset by decreases in allowance for credit losses of $0.8 million. Administrative and general expenses were $4.5 million lower in 2024 compared with 2023 primarily due to decreases in allowance for credit losses of $3.3 million and decreases in professional fees of $1.4 million partially offset by increases in wages and benefits expenses of $0.4 million. Administrative and general expenses were $8.3 million higher in 2023 compared with 2022 primarily due to increases in wages and benefits expenses of $3.6 million, increases in allowance for credit losses of $3.0 million and increases in professional fees of $1.3 million.

Gains (Losses) on Asset Dispositions and Impairments, Net. During 2024,2025, the Company sold one AHTS,FSV and two PSVs, previously classified as held for sale, twoas AHTS,well as one PSV, three liftboats and other equipment not previously classified as held for sale, and other equipmentsale for net cash proceeds of $24.9$129.2 million, after transaction costs, and a gain of $17.2$63.4 million. In addition, the Company recognized impairment charges of $3.7 million for other equipment designated for a construction project that was indefinitely deferred and will no longer be completed.

During 2023,2024, the Company sold one liftboat, classified as held for sale, three liftboats and one specialty vessel, previously removed from service, one FSV and other equipment,AHTS, previously classified as held for sale, astwo well as other equipmentAHTS, not previously classified as such,held for sale, and other equipment for net cash proceeds of $44.7$24.9 million, after transaction costs, and a gain of $21.1$17.2 million. In addition, the Company recognized impairment charges of $0.7$3.7 million for oneother AHTSequipment to adjustdesignated for indicativea futureconstruction cashproject flowsthat was indefinitely deferred and thewill costno tolonger returnbe the vessel to its owner.completed.

(Losses) gains on debt extinguishment. Loss on debt extinguishment was $31.9 million in 2024 due to the payoff of multiple credit facilities with the proceeds from the 2024 SMFH Credit Facility. Loss on debt extinguishment was $2.0 million in 2023 due to the payoff of the $130.0 million loan facility with a syndicate of lenders administered by DNB Bank ASA, dated September 26, 2018 (as amended from time to time, the “2018 SMFH Credit Facility”) for the 2023 SMFH Credit Facility. Gain on debt extinguishment was $10.4 million in 2022 due to the exchange of the Old Convertible Notes for the Guaranteed Notes and the New Convertible Notes. For further information, see “Note 5. Long-Term Debt” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Derivative gains (losses) gains,, net. DerivativeNet derivative gains in 2025 compared with net derivative losses in 2024 were due to the weakening of the U.S. dollar in relation to the Norwegian Kroner for an open forward currency exchange contract, which is denominated in Norwegian Kroner. As of December 31, 2025, the Company had no outstanding foreign exchange contract. Net derivative losses in 2024 compared with net derivative gains in 2023 were due to the strengthening of the U.S. dollar in relation to the Norwegian Kroner for an open forward currency exchange contract, which is denominated in Norwegian Kroner. Net derivative gains increased in 2023 compared with 2022 due to the Company entering into an open forward currency exchange contract in the fourth quarter of 2023.

Foreign currency (losses) gains,losses, net. ForeignNet foreign currency losses in 2025 compared with 2024 increased due to the weakening of the U.S. dollar in relation to the pound sterling. Net foreign currency losses in 2024 compared with 2023 decreased due to the strengthening of the U.S. dollar in relation to the pound sterling. Foreign currency losses in 2023 compared with foreign currency gains in 2022 were primarily due to the strengthening of the pound sterling in relation to the U.S. dollar.

This Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern management’s expectations, strategic objectives, including our announcement of the commencement of a strategic review of the business, business prospects, anticipated economic performance and financial condition and other similar mattersmatters. Achievement of these expectations and strategic objectives, including any increase to shareholder value from the strategic review, business prospects, anticipated economic performance and financial condition involve significant known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of results to differ materially from any future results, performance or achievements discussed or implied by such forward-looking statements. Certain of these risks, uncertainties and other important factors are discussed in the Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company’s 2025 Annual Report on Form 10-K and this Quarterly Report on Form 10-Q. However, it should be understood that it is not possible to identify or predict all such risks, uncertainties and factors, and others may arise from time to time. All of these forward-looking statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe,” “plan,” “target,” “forecast” and similar expressions are intended to identify forward-looking statements. Forward looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which the forward-looking statement is based. It is advisable, however, to consult any further disclosures the Company makes on related subjects in its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the United States Securities and Exchange Commission.

The Company provides global marine and support transportation services to offshore energy facilities worldwide. As of MarchJune 31,30, 2026, the Company operated a fleet of 4338 support vessels, of which all were owned. The primary users of the Company’s services are major integrated national and international oil companies, independent oil and natural gas exploration and production companies, oil field service and construction companies, as well as offshore wind farm operators and offshore wind farm installation and maintenance companies.

The Company operates its fleet in fourthree principal geographic regions: the United States (“U.S.”), primarily Gulf of AmericaAmericas; Africa and Europe; and the Middle East and Asia; and Latin America, primarily in Brazil, Mexico, Guyana, and Central and South America.Asia. The Company’s vessels are highly mobile and regularly and routinely move between countries within a geographic region. In addition, the Company’s vessels are redeployed among geographic regions, subject to flag restrictions, as changes in market conditions dictate.

Offshore oil and natural gas market conditions are highly volatile. For example, oil prices experienced unprecedented volatility during 2020 due to the COVID-19 pandemic and the related effects on the global economy,pandemic, with the price per barrel going negative for a short period of time. Oil prices steadily increased since the lows hit at the beginning of the COVID-19 pandemic and hit a multi-year high of $122 per barrel during 2022 primarily as a result of the conflict between Russia and Ukraine as well as the related economic sanctions and economic uncertainty but subsequently decreased to pre-conflict levels. Volatility of oil prices has more recently significantly increased and become even more difficult to predict with the onset of the conflict with Iran and the associated affects the conflict has had on one of the of the world’s most important oil producing regions. During the threesix months ended MarchJune 31,30, 2026, WTI oil prices reached a high of $105$113 per barrel and a low of $56 per barrel, ending the period at $102$70 per barrel. Volatility of oil prices has increased with the onset of the conflict with Iran.

The Company adheres to a strategy of cold-stacking vessels (removing from active service) during periods of weak utilization in order to reduce the daily running costs of operating the fleet, primarily personnel, repairs and maintenance costs, as well as to defer some drydocking costs into future periods. The Company considers various factors in determining which vessels to cold-stack, including upcoming dates for regulatory vessel inspections and related drydocking requirements. The Company may maintain class certification on certain cold-stacked vessels, thereby incurring some drydocking costs while cold-stacked. Cold-stacked vessels are returned to active service when market conditions improve, or management anticipates improvement, typically leading to increased costs for drydocking, personnel, repair and maintenance in the periods immediately preceding the vessels’ return to active service. Depending on market conditions, vessels with similar characteristics and capabilities may be rotated between active service and cold-stack. On an ongoing basis, the Company reviews its cold-stacked vessels to determine if any should be designated as retired and removed from service based on the vessel’s physical condition, the expected costs to reactivate and restore class certification, if any, and its viability to operate within current and projected market conditions. As of MarchJune 31,30, 2026, none of the Company’s 4338 owned vessels were cold-stacked worldwide. In addition, the Company had five vessel classified as held for sale as of March 31, 2026.

During the fourth quarter of 2025, the Company initiated certain cost reduction measures to better align its operating expenses with the current state of the offshore marine industry, in general, and its business, in particular. These measures include a reduction of workforce, reorganization of the management structure and streamlining of operations. For the year ended December 31, 2025, the Company incurred one-time charges totaling $1.2 million related to severance charges arising from a reduction in workforce resulting in a decrease in annualized wages and benefits expenses of at least $3.9 million. Management continues to focus on optimizing the cost structure and regional footprint of the business to help maintain the Company’s competitiveness in the industry, improve its operating leverage and position itself to take advantage of market opportunities. As a result of the cost reduction measures, the Company recognized savings of $2.0 million in wages and benefits expenses for the six months ended June 30, 2026.

On FebruaryMay 24,20, 2026, the Company completed the sale of one 201241.5 foot, DP-2 platform supply vessel (“PSV”) built in 20152009 for total proceeds of $14.6$8.0 million for a gain of approximately $7.3$7.4 million. Approximately $11.3$6.2 million of these sale proceeds were designated to make future payments on the construction of two PSVs and deposited in athe restrictedEscrow account.Account.

On DecemberMay 19,18, 2025,2026, the Company completed the sale of onetwo 201 foot, DP-2 platform supply vessel (“PSV”)liftboats built in 20132009 for total proceeds of $13.4$16.0 million for a gain of approximately $8.1$9.6 million. Approximately $11.0 millionNone of thesethe salesales proceeds from these liftboat sales were designatedencumbered by the Company’s 2024 SMFH Credit Facility or required to makebe futureused paymentsto onrepay thesuch construction of two PSVs and deposited in a restricted account.facility.

On September 29, 2025, the Company completed the sale of the United States (“U.S.”) flag liftboat LB Jill and the U.S. flag liftboat LB Robert (together, the “Liftboat Sales”) for total proceeds of $76.0 million. In addition, concurrently with the closing of the Liftboat Sales, the Company sold certain uninstalled vessel equipment for total proceeds of $1.0 million (the “Equipment Sale”). After deducting transaction costs and expenses, the Company received net cash proceeds of $74.7 million and recognized a gain of $30.5 million for the Liftboat Sales and the Equipment Sale. None of the sale proceeds from the Liftboat Sales and the Equipment Sale are encumbered by the Company’s 2024 SMFH Credit Facility or required to be used to repay such facility.

The sections below provide an analysis of the Company’s results of operations for the three and six months (“Current Year Quarter” and “Current Year Six Months”) ended MarchJune 31,30, 2026 compared with the three and six months (“Prior Year Quarter” and “Prior Year Six Months”) ended MarchJune 31,30, 2025. Except as otherwise noted, there have been no material changes since the end of the Company’s fiscal year ended December 31, 2025, in the Company’s results of operations. For the periods indicated, the Company’s consolidated results of operations were as follows (in thousands, except statistics):

Total Assets by region does not include corporate assets of $73.7$90.7 million as of MarchJune 31,30, 2026.

Total Assets by region does not include corporate assets of $43.8$49.4 million as of MarchJune 31,30, 2025.

Fleet Counts. The Company’s fleet count as of MarchJune 31,30, 2026 and December 31, 2025 was as follows:

Africa and Europe.Americas. For the three and six months ended MarchJune 31,30, 2026 and 2025 the Company’s time charter statistics and direct vessel profit in Africathe and EuropeAmericas were as follows (in thousands, except statistics):

Operating Revenues. Charter revenues were $6.1$5.3 million lower in the Current Year Quarter compared with the Prior Year Quarter. Charter revenues were $4.4$10.7 million lower due to the disposition of five vessels subsequent to the Prior Year Quarter. Charter revenues were $5.3 million higher due to the repositioning of two vessels with higher than average day rates into the region partially offset by four vessels repositioned out of the region subsequent to the Prior Year Quarter. Charter revenues were $0.1 million higher for the vessels included in the results of this region in both comparative periods (as applicable to each region, the “Regional Core Fleet,Fleet”), which consists of tenseven vessels, due to lowerhigher utilization of 61% in the Current Year Quarter compared to 80%51% in the Prior Year Quarter andoffset by lower average day rates of $15,994$20,886 in the Current Year Quarter compared to $18,413$24,730 in the Prior Year Quarter. Charter revenues were $2.3 million lower due to the disposition of three vessels subsequent to the Prior Year Quarter and $0.6 million higher due to the repositioning of one vessel into the region subsequent to the Prior Year Quarter. Other marine services were $0.3 million higher primarily due to higher mobilization revenues offset by lower catering revenues. As of MarchJune 31,30, 2026 and 2025,2026, the Company had no vessels cold-stacked in this region.region compared with three of 11 owned vessels (three FSVs) as of June 30, 2025.

Direct Operating Expenses. Direct operating expenses were $2.8$5.6 million higherlower in the Current Year Quarter compared with the Prior Year Quarter. Direct operating expenses were $2.5$11.1 million lower due to net asset dispositions, $5.4 million higher due to the repositioning of vessels between geographic regions and $0.3$0.1 million higher for the Regional Core Fleet primarily due to the timing of certaindrydocking and repair expenditures.

Lease expense. Leased-in equipment expense for the Current Year Quarter and Current Year Six Months was nearly flat compared to the Prior Year Quarter.Quarter and Prior Year Six Months.

Administrative and general. Administrative and general expenses for the Current Year Quarter were $1.5$0.3 million higher compared to the Prior Year Quarter primarily due to increases in professional fees offset by decreases in wages and benefits expenses. Administrative and general expenses for the Current Year Six Months were $1.2 million lower compared to the Prior Year QuarterSix Months primarily due to decreases in wages and benefits expenses partially offset by increases in allowanceprofessional for credit losses.fees.

Depreciation and amortization. Depreciation and amortization expense for the Current Year Quarter and Current Year Six Months were $2.5$1.4 million lower and $3.9 million lower compared to the Prior Year Quarter and Prior Year Six Months due to net fleet changes.