EXHIBIT 99.5
MAMMOTH ENERGY SERVICES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
TABLE OF CONTENTS



MAMMOTH ENERGY SERVICES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION


On June 5, 2017, the Company acquired, through its wholly owned subsidiary Mammoth Energy Partners LLC ("Mammoth Partners LLC"), all outstanding membership interests in Sturgeon Acquisitions LLC, a Delaware limited liability company ("Sturgeon"), Stingray Energy Services LLC, a Delaware limited liability company ("Stingray Energy"), and Stingray Cementing LLC, a Delaware limited liability company ("Stingray Cementing") (collectively, the “Targets”) for aggregate consideration consisting of 7,000,000 shares (the “Stock Consideration”) of the Company’s common stock, par value $0.01 per share (collectively, the “Transaction”).

The unaudited pro forma condensed consolidated financial statements have been prepared to show the effect of the acquisition of Stingray Energy and Stingray Cementing (together, “Stingray”) and Sturgeon on the Company's consolidated results of operations and financial position for the periods and as of the dates indicated.

Sturgeon and the Company are under common control and it is required under accounting principles generally accepted in the United States of America ("US GAAP") to account for this common control acquisition in a manner similar to the pooling of interest method of accounting. The acquisition of Stingray (the "Stingray Acquisition") is being accounted for by application of the acquisition method in accordance with FASB ASC 805, Business Combinations. Under the acquisition method, assets acquired and liabilities assumed in connection with the acquisition are generally recorded at their fair values as of the effective date of the acquisition.

The unaudited pro forma condensed consolidated financial statements, in the instance of Sturgeon, have been prepared as if the Transaction occurred on September 13, 2014, in the case of the unaudited pro forma condensed consolidated statements of comprehensive (loss) income for the years ended December 31, 2016, 2015 and 2014 and the three months ended March 31, 2017. The unaudited pro forma condensed consolidated financial statements, in the instance of Stingray Energy and Stingray Cementing, have been prepared as if the Transaction occurred on January 1, 2016, in the case of the unaudited pro forma condensed consolidated statements of comprehensive (loss) income for the years ended December 31, 2016 and the three months ended March 31, 2017. The unaudited pro forma condensed consolidated balance sheet has been prepared as if the Transaction occurred on March 31, 2017. The unaudited pro forma condensed consolidated financial statements have also been prepared based on certain pro forma adjustments, as described in Note 2—Pro forma adjustments and are qualified in their entirety by reference to and should be read in conjunction with: (i) Stingray's historical financial statements and notes thereto included in this Report; (ii) Sturgeon's historical financial statements and notes thereto included in this Report and (iii) the Company’s historical financial statements and notes thereto included in its reports filed with the Securities and Exchange Commission under the Securities Act of 1934, as amended.

The pro forma adjustments reflected in the pro forma condensed consolidated financial statements are based upon currently available information and certain assumptions and estimates that the Company’s management considers to be reasonable. The unaudited pro forma condensed consolidated financial information is provided for illustrative purposes only and does not purport to represent what our actual results of operations or our financial position would have been had the Transactions occurred on the respective dates assumed, nor is it indicative of our future operating results or financial position.



1
MAMMOTH ENERGY SERVICES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2017
(Unaudited)


 
 
 
 
 
 
 
 
Pro Forma Adjustments
 
 
ASSETS
 
Mammoth
 
Stingray
 
Sturgeon
 
Stingray
 
Sturgeon
 
 
 
Mammoth
 
 
Historical
 
(A)
 
(B)
 
Adjustments
 
Adjustments
 
 
 
Pro Forma
CURRENT ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
12,278,120

 
$
1,417,510

 
$
649,122

 
$
(7,214,780
)
 
$
—

 
a, b
 
$
7,129,972

Accounts receivable, net
 
24,973,332

 
743,062

 
639,174

 
—

 
—

 
 
 
26,355,568

Receivables from related parties
 
33,141,299

 
8,077,607

 
4,259,995

 
(2,274,135
)
 
(4,967,907
)
 
c, d
 
38,236,859

Inventories
 
4,922,627

 
310,141

 
1,174,944

 
—

 
—

 
 
 
6,407,712

Prepaid Expenses
 
3,402,022

 
123,978

 
157,409

 
(15,211
)
 
—

 
a
 
3,668,198

Other current assets
 
1,182,058

 
—

 
—

 
—

 
—

 
 
 
1,182,058

Total current assets
 
79,899,458

 
10,672,298

 
6,880,644

 
(9,504,126
)
 
(4,967,907
)
 
 
 
82,980,367

 
 
 
 
 
 
 
 
 
 
 
 
 
 


Property, plant and equipment, net
 
244,021,697

 
14,581,419

 
20,705,745

 
6,597,144

 
—

 
e
 
285,906,005

Sand reserves, net
 
—

 
—

 
55,365,025

 
—

 
—

 
 
 
55,365,025

Intangible assets, net - customer relationships
 
13,859,772

 
—

 
—

 
1,140,000

 
—

 
 
 
14,999,772

Intangible assets, net - trade names
 
5,439,307

 
—

 
—

 
820,000

 
—

 
 
 
6,259,307

Goodwill
 
86,043,148

 
—

 
2,683,727

 
10,168,738

 
—

 
e
 
98,895,613

Other non-current assets
 
5,239,582

 
6,995

 
252,296

 
(6,995
)
 
(255,398
)
 
a
 
5,236,480

Total assets
 
$
434,502,964

 
$
25,260,712

 
$
85,887,437

 
$
9,214,761

 
$
(5,223,305
)
 
 
 
$
549,642,569

 
 
 
 
 
 
 
 


 
 
 
 
 


LIABILITIES AND EQUITY
 
 
 
 
 
 
 


 


 
 
 


CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 


Accounts payable
 
$
37,237,976

 
$
4,258,074

 
$
3,099,594

 
$
—

 
$
—

 
 
 
$
44,595,644

Payables to related parties
 
4,921,129

 
1,866,873

 
707,912

 
(2,274,135
)
 
(4,967,907
)
 
c, f, g
 
253,872

Accrued expenses and other current liabilities
 
8,825,877

 
439,884

 
386,021

 
—

 
—

 
 
 
9,651,782

Income taxes payable
 
—

 
—

 
—

 
—

 
—

 
h
 
—

Current maturities of long-term debt
 
—

 
2,878,403

 
—

 
(2,878,403
)
 
—

 
b
 
—

Total current liabilities
 
50,984,982

 
9,443,234

 
4,193,527

 
(5,152,538
)
 
(4,967,907
)
 
 
 
54,501,298

 
 
 
 
 
 
 
 
 
 
 
 
 
 


Long-term debt
 
—

 
4,336,377

 
—

 
(4,336,377
)
 
—

 
b
 
—

Deferred income taxes
 
43,881,012

 
—

 
—

 
4,444,845

 
4,010,883

 
h
 
52,336,740

Other liabilities
 
2,733,863

 
—

 
—

 
—

 
—

 
 
 
2,733,863

Total liabilities
 
97,599,857

 
13,779,611

 
4,193,527

 
(5,044,070
)
 
(957,024
)
 
 
 
109,571,901

 
 
 
 
 
 
 
 
 
 
 
 
 
 


EQUITY
 


 
 
 
 
 
 
 


 
 
 


Equity:
 
 
 
 
 
 
 


 
 
 
 
 


Common stock
 
375,000

 
—

 
—

 
13,925

 
56,075

 
i
 
445,000

Additional paid in capital
 
400,775,752

 
—

 
—

 
25,748,213

 
77,371,554

 
i
 
503,895,519

Member's equity
 
—

 
11,481,101

 
81,693,910

 
(11,481,101
)
 
(81,693,910
)
 
i
 
—

Accumulated Deficit
 
(61,259,392
)
 
—

 
—

 
(22,206
)
 
—

 
b, h
 
(61,281,598
)
Accumulated other comprehensive loss
 
(2,988,253
)
 
—

 
—

 
—

 
—

 
 
 
(2,988,253
)
Total equity
 
336,903,107

 
11,481,101

 
81,693,910

 
14,258,831

 
(4,266,281
)
 
 
 
440,070,668

Total liabilities and equity
 
$
434,502,964

 
$
25,260,712

 
$
85,887,437

 
$
9,214,761

 
$
(5,223,305
)
 
 
 
$
549,642,569




2
MAMMOTH ENERGY SERVICES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME
THREE MONTHS ENDED MARCH 31, 2017
(Unaudited)


 
 
 
 
 
 
 
Pro Forma Adjustments
 
 
 
Mammoth
 
Stingray
 
Sturgeon
 
Stingray
 
Sturgeon
 
 
 
Mammoth
 
Historical
 
(A)
 
(B)
 
Adjustments
 
Adjustments
 
 
 
Pro Forma
REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
Services revenue
$
27,091,882

 
$
581,701

 
$
—

 
$
—

 
$
—

 
 
 
$
27,673,583

Services revenue - related parties
33,132,571

 
8,407,129

 
—

 
(281,571
)
 
(170,914
)
 
c, d
 
41,087,215

Product revenue
2,615,209

 
—

 
756,854

 
—

 
—

 
 
 
3,372,063

Product revenue - related parties
11,576,151

 
—

 
7,618,808

 
—

 
(7,654,540
)
 
c, d
 
11,540,419

Total Revenue
74,415,813

 
8,988,830

 
8,375,662

 
(281,571
)
 
(7,825,454
)
 
 
 
83,673,280

 
 
 
 
 
 
 
 
 
 
 
 
 
 
COST AND EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
 
Services cost of revenue
45,460,804

 
7,967,874

 
—

 
—

 
—

 
c, f, g
 
53,428,678

Services cost of revenue - related parties
494,345

 
44,206

 
—

 
(281,571
)
 
(64,428
)
 
c, f, g
 
192,552

Product cost of revenue
5,376,897

 
—

 
7,230,368

 
—

 
—

 
c, f, g
 
12,607,265

Product cost of revenue - related parties
7,554,380

 
—

 
206,646

 
—

 
(7,761,026
)
 
c, f, g
 
—

Selling, general and administrative
5,844,093

 
133,316

 
235,811

 
251,220

 
332,640

 
c, f, g
 
6,797,080

Selling, general and administrative - related parties
377,717

 
252,814

 
279,177

 
(251,220
)
 
(332,640
)
 
c, f, g
 
325,848

Depreciation and amortization
16,893,777

 
1,254,491

 
343,474

 
375,416

 
—

 
e
 
18,867,158

Impairment of long-lived assets
—

 
—

 
—

 
—

 
—

 
 
 
—

Total cost and expenses
82,002,013

 
9,652,701

 
8,295,476

 
93,845

 
(7,825,454
)
 
 
 
92,218,581

Operating (loss) income
(7,586,200
)
 
(663,871
)
 
80,186

 
(375,416
)
 
—

 
 
 
(8,545,301
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER (EXPENSE) INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(286,338
)
 
(71,140
)
 
(110,846
)
 
8,941

 
51,080

 
b
 
(408,303
)
Other, net
(170,041
)
 
—

 
(14,105
)
 
—

 
—

 
 
 
(184,146
)
Total other expense
(456,379
)
 
(71,140
)
 
(124,951
)
 
8,941

 
51,080

 
 
 
(592,449
)
Loss before income taxes
(8,042,579
)
 
(735,011
)
 
(44,765
)
 
(366,475
)
 
51,080

 
 
 
(9,137,750
)
Provision for income taxes
(3,106,065
)
 
—

 
—

 
(302,596
)
 
(17,636
)
 
h
 
(3,426,297
)
Net (loss) income
$
(4,936,514
)
 
$
(735,011
)
 
$
(44,765
)
 
$
(63,879
)
 
$
68,716

 
 
 
$
(5,711,453
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER COMPREHENSIVE LOSS
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
228,110

 
—

 
—

 
—

 
—

 
 
 
228,110

Comprehensive (loss) income
$
(4,708,404
)
 
$
(735,011
)
 
$
(44,765
)
 
$
(63,879
)
 
$
68,716

 
 
 
$
(5,483,343
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss per share (basic and diluted) (Note 3)
 
 
 
 
 
 
 
 
 
 
 
 
$
(0.13
)
Weighted average number of shares outstanding (Note 3)
 
 
 
 
 
 
 
 
 
 
 
 
44,500,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 


3
MAMMOTH ENERGY SERVICES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
YEAR ENDED DECEMBER 31, 2016
(Unaudited)



 
 
 
 
 
 
 
Pro Forma Adjustments
 
 
 
Mammoth
 
Stingray
 
Sturgeon
 
Stingray
 
Sturgeon
 
 
 
Mammoth
 
Historical
 
(A)
 
(B)
 
Adjustments
 
Adjustments
 
 
 
Pro Forma
REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
Services revenue
$
89,642,899

 
$
2,873,700

 
$
—

 
$
—

 
$
—

 
 
 
$
92,516,599

Services revenue - related parties
107,599,378

 
21,544,441

 
—

 
(758,696
)
 
(452,378
)
 
c, d
 
127,932,745

Product revenue
5,433,141

 
—

 
2,619,304

 
—

 
—

 
 
 
8,052,445

Product revenue - related parties
28,323,303

 
—

 
24,853,721

 
—

 
(27,393,771
)
 
c, d
 
25,783,253

Total Revenue
230,998,721

 
24,418,141

 
27,473,025

 
(758,696
)
 
(27,846,149
)
 
 
 
254,285,042

 
 
 
 
 
 
 
 
 
 
 
 
 
 
COST AND EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
 
Services cost of revenue
139,807,987

 
21,920,807

 
—

 
473,172

 
244,853

 
c, f, g
 
162,446,819

Services cost of revenue - related parties
5,575,092

 
507,895

 
—

 
(1,231,868
)
 
(4,511,861
)
 
c, f, g
 
339,258

Product cost of revenue
7,577,660

 
—

 
24,096,338

 
—

 
228,223

 
c, f, g
 
31,902,221

Product cost of revenue - related parties
20,589,170

 
—

 
3,220,649

 
—

 
(23,807,364
)
 
c, f, g
 
2,455

Selling, general and administrative
15,836,165

 
567,074

 
781,536

 
722,105

 
672,922

 
c, f, g
 
18,579,802

Selling, general and administrative - related parties
894,810

 
733,995

 
536,004

 
(722,105
)
 
(672,922
)
 
c, f, g
 
769,782

Depreciation and amortization
69,910,858

 
4,896,620

 
2,404,540

 
1,558,774

 
—

 
e
 
78,770,792

Impairment of long-lived assets
1,870,885

 
—

 
—

 
—

 
—

 
 
 
1,870,885

Total cost and expenses
262,062,627

 
28,626,391

 
31,039,067

 
800,078

 
(27,846,149
)
 
 
 
294,682,014

Operating loss
(31,063,906
)
 
(4,208,250
)
 
(3,566,042
)
 
(1,558,774
)
 
—

 
 
 
(40,396,972
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER (EXPENSE) INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(3,711,457
)
 
(292,061
)
 
(384,725
)
 
(10,907
)
 
(306,477
)
 
b
 
(4,705,627
)
Other, net
252,239

 
(33,409
)
 
(94,066
)
 
—

 
—

 
 
 
124,764

Total other expense
(3,459,218
)
 
(325,470
)
 
(478,791
)
 
(10,907
)
 
(306,477
)
 
 
 
(4,580,863
)
Loss before income taxes
(34,523,124
)
 
(4,533,720
)
 
(4,044,833
)
 
(1,569,681
)
 
(306,477
)
 
 
 
(44,977,835
)
Provision for income taxes
53,884,871

 
—

 
—

 
2,067,856

 
3,238,079

 
h
 
59,190,806

Net loss
$
(88,407,995
)
 
$
(4,533,720
)
 
$
(4,044,833
)
 
$
(3,637,537
)
 
$
(3,544,556
)
 
 
 
$
(104,168,641
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER COMPREHENSIVE LOSS
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
2,710,605

 
—

 
—

 
—

 
—

 
 
 
2,710,605

Comprehensive loss
$
(85,697,390
)
 
$
(4,533,720
)
 
$
(4,044,833
)
 
$
(3,637,537
)
 
$
(3,544,556
)
 
 
 
$
(101,458,036
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss per share (basic and diluted) (Note 3)
 
 
 
 
 
 
 
 
 
 
 
 
$
(2.71
)
Weighted average number of shares outstanding (Note 3)
 
 
 
 
 
 
 
 
 
 
 
 
38,500,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 


4
MAMMOTH ENERGY SERVICES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME
YEAR ENDED DECEMBER 31, 2015
(Unaudited)


 
 
 
 
 
Pro Forma Adjustments
 
 
 
Mammoth
 
Sturgeon
 
 
 
 
 
Mammoth
 
Historical
 
(B)
 
Adjustments
 
 
 
Pro Forma
REVENUE
 
 
 
 
 
 
 
 
 
Services revenue
$
172,012,405

 
$
—

 
$
—

 
 
 
$
172,012,405

Services revenue - related parties
132,674,989

 
—

 
(122,131
)
 
c, d
 
132,552,858

Product revenue
16,732,077

 
8,457,482

 
—

 
 
 
25,189,559

Product revenue - related parties
38,517,222

 
23,185,931

 
(23,521,183
)
 
c, d
 
38,181,970

Total Revenue
359,936,693

 
31,643,413

 
(23,643,314
)
 
 
 
367,936,792

 
 
 
 
 
 
 
 
 
 
COST AND EXPENSES
 
 
 
 
 
 
 
 
 
Services cost of revenue
225,820,450

 
—

 
123,818

 
c, f, g
 
225,944,268

Services cost of revenue - related parties
4,177,335

 
—

 
(2,798,502
)
 
c, f, g
 
1,378,833

Product cost of revenue
25,838,555

 
21,525,593

 
—

 
c, f, g
 
47,364,148

Product cost of revenue - related parties
20,510,977

 
457,653

 
(20,968,630
)
 
c, f, g
 
—

Selling, general and administrative
19,303,557

 
1,354,695

 
791,180

 
c, f, g
 
21,449,432

Selling, general and administrative - related parties
1,237,991

 
503,777

 
(791,180
)
 
c, f, g
 
950,588

Depreciation and amortization
72,393,882

 
2,104,692

 
—

 
 
 
74,498,574

Impairment of long-lived assets
12,124,353

 
—

 
—

 
 
 
12,124,353

Total cost and expenses
381,407,100

 
25,946,410

 
(23,643,314
)
 
 
 
383,710,196

Operating (loss) income
(21,470,407
)
 
5,697,003

 
—

 
 
 
(15,773,404
)
 
 
 
 
 
 
 
 
 
 
OTHER (EXPENSE) INCOME
 
 
 
 
 
 
 
 
 
Interest income
98,492

 
—

 
—

 
 
 
98,492

Interest expense
(5,290,821
)
 
(173,726
)
 
—

 
 
 
(5,464,547
)
Other, net
(2,157,764
)
 
(111,294
)
 
—

 
 
 
(2,269,058
)
Total other expense
(7,350,093
)
 
(285,020
)
 
—

 
 
 
(7,635,113
)
(Loss) income before income taxes
(28,820,500
)
 
5,411,983

 
—

 
 
 
(23,408,517
)
Benefit for income taxes
(1,589,086
)
 
—

 
—

 
 
 
(1,589,086
)
Net (loss) income
$
(27,231,414
)
 
$
5,411,983

 
$
—

 
 
 
$
(21,819,431
)
 
 
 
 
 
 
 
 
 
 
OTHER COMPREHENSIVE (LOSS) INCOME
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
(4,814,819
)
 
—

 
—

 
 
 
(4,814,819
)
Comprehensive (loss) income
$
(32,046,233
)
 
$
5,411,983

 
$
—

 
 
 
$
(26,634,250
)
 
 
 
 
 
 
 
 
 
 
Net loss per share (basic and diluted) (Note 3)
 
 
 
 
 
 
 
 
$
(0.59
)
Weighted average number of shares outstanding (Note 3)
 
 
 
 
 
 
 
 
37,000,000

 
 
 
 
 
 
 
 
 
 


5
MAMMOTH ENERGY SERVICES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME
YEAR ENDED DECEMBER 31, 2014
(Unaudited)

 
 
 
September 13 to December 31,
 
Pro Forma Adjustments
 
 
 
Mammoth
 
Sturgeon
 
 
 
 
 
Mammoth
 
Historical
 
(B)
 
Adjustments
 
 
 
Pro Forma
REVENUE
 
 
 
 
 
 
 
 
 
Services revenue
$
182,341,309

 
$
—

 
$
—

 
 
 
$
182,341,309

Services revenue - related parties
30,834,421

 
—

 
—

 
 
 
30,834,421

Product revenue
36,859,731

 
14,301,656

 
—

 
 
 
51,161,387

Product revenue - related parties
9,490,543

 
3,910,574

 
(2,008,800
)
 
c, d
 
11,392,317

Total Revenue
259,526,004

 
18,212,230

 
(2,008,800
)
 
 
 
275,729,434

 
 
 
 
 
 
 
 
 
 
COST AND EXPENSES
 
 
 
 
 
 
 
 
 
Services cost of revenue
150,482,793

 
—

 
—

 
 
 
$
150,482,793

Services cost of revenue - related parties
1,770,565

 
—

 
(1,029,974
)
 
c, f
 
740,591

Product cost of revenue
35,525,596

 
9,360,221

 
—

 
 
 
44,885,817

Product cost of revenue - related parties
3,289,947

 
111,398

 
(978,826
)
 
c, f
 
2,422,519

Selling, general and administrative
14,272,986

 
1,510,985

 
—

 
 
 
15,783,971

Selling, general and administrative - related parties
2,754,877

 
—

 
—

 
 
 
2,754,877

Depreciation and amortization
35,627,165

 
738,433

 
—

 
 
 
36,365,598

Impairment of long-lived assets
—

 
—

 
—

 
 
 
—

Total cost and expenses
243,723,929

 
11,721,037

 
(2,008,800
)
 
 
 
253,436,166

Operating income
15,802,075

 
6,491,193

 
—

 
 
 
22,293,268

 
 
 
 
 
 
 
 
 
 
OTHER (EXPENSE) INCOME
 
 
 
 
 
 
 
 
 
Interest income
214,141

 
—

 
—

 
 
 
$
214,141

Interest expense
(4,603,595
)
 
—

 
—

 
 
 
(4,603,595
)
Interest expense - related parties
(184,479
)
 
—

 
 
 
 
 
(184,479
)
Other, net
(5,724,496
)
 
(2,668
)
 
—

 
 
 
(5,727,164
)
Total other expense
(10,298,429
)
 
(2,668
)
 
—

 
 
 
(10,301,097
)
Income before income taxes
5,503,646

 
6,488,525

 
—

 
 
 
11,992,171

Provision for income taxes
7,514,194

 
—

 
—

 
 
 
$
7,514,194

Net (loss) income
$
(2,010,548
)
 
$
6,488,525

 
$
—

 
 
 
$
4,477,977

 
 
 
 
 
 
 
 
 
 
OTHER COMPREHENSIVE (LOSS) INCOME
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
472,714

 
—

 
—

 
 
 
$
472,714

Comprehensive (loss) income
$
(1,537,834
)
 
$
6,488,525

 
$
—

 
 
 
$
4,950,691

 
 
 
 
 
 
 
 
 
 
Net earnings per share (basic and diluted) (Note 3)
 
 
 
 
 
 
 
 
$
0.16

Weighted average number of shares outstanding (Note 3)
 
 
 
 
 
 
 
 
28,056,073

 
 
 
 
 
 
 
 
 
 


6
MAMMOTH ENERGY SERVICES, INC.
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


1. Basis of presentation

The unaudited pro forma condensed consolidated financial statements are based upon the historical consolidated financial statements of the Company and the historical financial statements of the Targets. The unaudited pro forma condensed consolidated financial statements present the impact of the Transaction, which is described in the introduction to the unaudited pro forma condensed consolidated financial statements, on the Company's results of operations, and present the impact of the Transaction on the unaudited pro forma condensed consolidated financial position.
(A)
See Exhibits 99.1 and 99.2 to this Report.
(B)
See Exhibits 99.3 and 99.4 to this Report.

2. Pro forma adjustments

The following adjustments to the Company's historical financial statements have been made:
 
a.
Reflects the use of cash on-hand to pay off the long-term debt of the Targets and the immediate recognition of deferred loan costs associated with the long-term debt that will be retired and/or the revolving credit facility extinguished.

b.
Retirement of long-term debt (a.) would have triggered an immediate recognition of deferred loan costs associated with the long-term debt. 2017 incorporates the add-back of the amortization of loan fees that would have been written off in 2016.

c.
Adjustment column reflects both the revenue (cost) generated (incurred) for the Target and the Company. See d, f and g for breakouts between the Targets and the Company.

d.
Revenue and accounts receivable elimination activity incorporating the Transaction included the following:
 
 
REVENUES
 
ACCOUNTS RECEIVABLE
 
 
Three Months Ended,
Year Ended December 31,
 
At March 31,
 
 
March 31, 2017
2016
2015
2014
 
2017
Sturgeon and Muskie
(i)
$
7,554,380

$
20,586,715

$
20,510,977

$
867,428

 
$
4,056,830

Sturgeon and Pressure Pumping
(i)
—

4,256,830

2,642,693

1,029,974

 
—

Sturgeon and Barracuda
(i)
64,428

10,176

—

—

 
203,165

Sturgeon and SR Logistics
(i)
—

—

32,261

—

 
—

Sturgeon and Energy Services
(i)
—

—

—

—

 
—

 
 
$
7,618,808

$
24,853,721

$
23,185,931

$
1,897,402

 
$
4,259,995

 
 
 
 
 
 
 
 
Muskie and Sturgeon
(ii)
$
35,732

$
2,540,050

$
335,252

$
111,398

 
$
20,193

Mammoth and Sturgeon
(ii)
—

—

—

—

 
629,492

Barracuda and Sturgeon
(ii)
170,914

452,378

122,131

—

 
58,227

 
 
$
206,646

$
2,992,428

$
457,383

$
111,398

 
$
707,912

 Sturgeon pro forma adjustment, net
 
$
7,825,454

$
27,846,149

$
23,643,314

$
2,008,800

 
$
4,967,907

 
 
 
 
 
 
 
 
Stingray Energy and SR Logistics
(iii)
$
—

$
7,246

 
 
 
$
—

Stingray Energy, Cementing and Mammoth
(iii)
—

—

 
 
 
—

Stingray Energy and Pressure Pumping
(iii)
222,382

672,431

 
 
 
400,673

Stingray Energy and Silverback
(iii)
—

27,178

 
 
 
—

Stingray Energy and Barracuda
(iii)
14,983

13,701

 
 
 
7,785

 
 
$
237,365

$
720,556

 
 
 
$
408,458

 
 
 
 
 
 
 
 
MRI and Stingray Cementing
(ii)
$
4,790

$
820

 
 
 
$
5,610

Coil Tubing and Stingray Energy
(ii)
29,250

18,600

 
 
 
47,850

Pressure Pumping and Stingray Cementing
(ii)
9,970

7,364

 
 
 
26,593

Silverback and Stingray Energy
(ii)
196

11,356

 
 
 
69,970

Mammoth and Stingray Energy
(ii)
—

—

 
 
 
1,656,001

Mammoth and Cementing
(ii)
—

—

 
 
 
59,653

 
 
$
44,206

$
38,140

 
 
 
$
1,865,677

Stingray pro forma adjustment, net
 
$
281,571

$
758,696

 
 
 
$
2,274,135

(i)
See Exhibit 99.3 and 99.4 to this Report.
(ii)
See Note 12 of Part 1 in the Company's Quarterly Report on Form 10-Q filed with the SEC on May 15, 2017.
(iii)
See Exhibit 99.1 and 99.2 to this Report.

7
MAMMOTH ENERGY SERVICES, INC.
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


e.
The Stingray Acquisition qualifies as a business combination for accounting purposes and, as such, the Company has estimated the fair value of the acquired properties. The fair value of the consideration transferred at the closing date of the Stingray Acquisition is allocated in the following preliminary purchase price allocation:
Total consideration transferred ($18.50 per share, 1,392,548 shares)
$
25,762,138

 

Estimated Book Value at March 31, 2017:
$
11,481,101

Fair value adjustments to:

Fixed Assets
6,597,144

Goodwill
10,168,738

Intangibles
1,960,000

Deferred tax liability
(4,444,845
)
Total estimated fair value
$
25,762,138

 
 

f.
Expense and accounts payable elimination activity incorporating Sturgeon included the following:
 
 
COST OF REVENUE
 
ACCOUNTS PAYABLE
 
 
Three Months Ended,
Year Ended December 31,
 
At March 31,
 
 
March 31, 2017
2016
2015
2014
 
2017
Sturgeon and Barracuda
(i)
$
170,914

$
452,558

$
122,131

$
—

 
$
58,227

Sturgeon and Mammoth
(i,ii)
—

35,856

—

—

 
629,492

Sturgeon and Muskie
(i)
35,732

2,540,050

335,522

111,398

 
20,193

Sturgeon and Pressure Pumping
(i,ii)
—

192,035

—

—

 
—

Sturgeon and Stingray Energy
(i,ii)
—

150

—

—

 
—

 
 
$
206,646

$
3,220,649

$
457,653

$
111,398

 
$
707,912

 
 
 
 
 
 
 
 
Pressure Pumping and Sturgeon
(iii)
$
—

$
4,256,832

$
2,685,202

$
1,029,974

 
$
—

Muskie and Sturgeon
(iii)
7,554,380

20,586,715

20,510,977

867,428

 
4,056,830

Barracuda and Sturgeon
(ii, iii)
64,428

255,029

81,039

—

 
203,165

Stingray Entities and Sturgeon
(iii)
—

—

32,261

—

 
—

 
 
$
7,618,808

$
25,098,576

$
23,309,479

$
1,897,402

 
$
4,259,995

 Sturgeon pro forma adjustment, net
 
$
7,825,454

$
28,319,225

$
23,767,132

$
2,008,800

 

 
 
 
 
 
 
 
 
 
 
SELLING, GENERAL AND ADMINSTRATIVE
 
 
Sturgeon and Mammoth
(i,ii)
$
270,090

$
405,552

$
401,859

$
—

 
$
—

Sturgeon and Muskie
(i,ii)
—

51,483

19,344

—

 
—

Sturgeon and Pressure Pumping
(i,ii)
—

44,901

82,574

—

 
—

Sturgeon and Energy Services
(i,ii)
—

10,364

—

—

 
—

 
 
$
270,090

$
512,300

$
503,777

$
—

 
$
—

 
 
 
 
 
 
 
 
Mammoth and Sturgeon
(ii, iii)
$
62,550

$
160,622

$
287,403

$
—

 
$
—

 Sturgeon pro forma adjustment, net
 
$
332,640

$
672,922

$
791,180

$
—

 
$
—

 Sturgeon pro forma adjustment, net
 
 

 
 
 
$
4,967,907

(i)
See Exhibit 99.3 and 99.4 to this Report..
(ii)
Predominantly cost reimbursement that is not reflected as revenue recognition in the offsetting party
(iii)
See Note 12 of Part 1 in the Company's Quarterly Report on Form 10-Q filed with the SEC on May 15, 2017.


8
MAMMOTH ENERGY SERVICES, INC.
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


g.
Expense and accounts payable elimination activity incorporating Stingray included the following:
 
 
COST OF REVENUE
 
ACCOUNTS PAYABLE
 
 
Three Months Ended,
Year Ended
 
At March 31,
 
 
March 31, 2017
December 31, 2016
 
2017
Stingray Energy and Mammoth
(i,ii)
$
29,446

$
367,353

 
$
—

Stingray Cementing and Mammoth
(i,ii)
14,760

140,542

 
—

 
 
$
44,206

$
507,895

 
$
—

 
 
 
 
 
 
Barracuda and Stingray Energy
(iii)
$
14,983

$
30,722

 
$
—

Stingray Entities and Stingray Energy
(iii)
222,382

679,550

 
408,458

Silverback and Stingray Energy
(iii)
—

13,701

 
—

 
 
$
237,365

$
723,973

 
$
408,458

Stingray Energy pro forma adjustment, net
 
$
281,571

$
1,231,868

 
 
 
 
 
 
 
 
 
 
SELLING, GENERAL AND ADMINSTRATIVE
 
 
Stingray Energy and Mammoth
(i,ii)
$
178,208

$
536,805

 
$
1,773,821

Stingray Cementing and Mammoth
(i,ii)
73,012

185,300

 
91,856

 
 
$
251,220

$
722,105

 
$
1,865,677

Stingray Energy pro forma adjustment, net
 
$
251,220

$
722,105

 
$
1,865,677

Stingray Energy pro forma adjustment, net
 
 
 
 
$
2,274,135

(i)
See Exhibit 99.1 and 99.2 to this Report.
(ii)
Predominantly cost reimbursement that is not reflected as revenue recognition in the offsetting party
(iii)
See Note 12 of Part 1 in the Company's Quarterly Report on Form 10-Q filed with the SEC on May 15, 2017.

h.
Prior to the Company's initial public offering ("IPO") in October 2016, its predecessor was a partnership and not subject to federal income taxes with the exception of its foreign subsidiary. In connection with the IPO, the Company became subject to federal income taxes. The statement of operations for the year ended December 31, 2016 incorporates one-time associated with incorporating the Targets as entities being subject to federal income taxes.
i.
Issuance as consideration for the Targets of 7,000,000 shares of common stock (valued at $129.5 million based on the closing share price of $18.50 on June 5, 2017) and $6.4 million of assumed debt. Subsequent to the IPO we have assumed that the long-term debt of Stingray would be paid off and the revolving credit facility of Sturgeon would be extinguished.
3. Pro forma net income (loss) per common share

Pro forma net income (loss) per common share is determined by dividing the pro forma net income (loss) that would have been allocated to the common stockholders by the number of shares of common stock outstanding. In the Company's audited financial statements, the reported weighted average shares outstanding for the three months ended March 31, 2017 was 37,500,000 and for the years ended December 31, 2016, 2015 and 2014 were 31,500,000, 30,000,000 and 21,056,073, respectively. For purposes of this pro forma calculation, the Company assumed that shares of common stock outstanding were 44,750,000 for the three months ended March 31, 2017 and 38,500,000, 37,000,000 and 28,056,073 for the years ended December 31, 2016, 2015 and 2014.

9