EXHIBIT 99.3
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 May 26, 2017, the Company acquired substantially all of the assets of Chieftain Sand and Proppant, LLC and Chieftain Sand and Proppant Baron, LLC (together, “Chieftain”) for $36.3 million in cash (the "Acquisition"). The assets acquired include a wet and dry plant located on approximately 600 acres in New Auburn, Wisconsin and a sand mine with an estimated 38 million tons of usable frac sands. The following unaudited pro forma condensed consolidated financial information is presented to illustrate the effect of the Acquisition.

The unaudited pro forma condensed consolidated financial statements have been prepared as if the Acquisition occurred on January 1, 2016, in the case of the unaudited pro forma condensed consolidated statements of comprehensive loss for the year 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) Chieftain's historical financial statements and notes thereto included in this Report and the (ii) Company's historical financial statements and notes thereto included in its reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, including the Company's Form 8-K/A filed on August 2, 2017 reflecting the presentation of the Company's historical financial statements on a combined basis with those of Sturgeon Acquisitions LLC ("Sturgeon"). The Company's acquisition of Sturgeon on June 5, 2017 was a transaction involving entities under common control and has been accounted for in a manner similar to the pooling of interest method of accounting in accordance with FASB ASC 805, Business Combinations.

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 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)


ASSETS
 
Mammoth
 
Chieftain
 
Chieftain
 
 
 
Mammoth
 
 
Historical (a)
 
(A)
 
Pro Forma Adjustments
 
Pro Forma
CURRENT ASSETS
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
12,927,242

 
$
2,508,588

 
$
(2,508,588
)
 
a
 
$
12,927,242

Accounts receivable, net
 
25,612,506

 
244

 
(244
)
 
a
 
25,612,506

Receivables from related parties
 
32,433,387

 
—

 
—

 
 
 
32,433,387

Inventories
 
6,097,571

 
—

 
—

 
 
 
6,097,571

Prepaid Expenses
 
3,559,431

 
118,558

 
(118,558
)
 
a
 
3,559,431

Other current assets
 
1,182,058

 
—

 
—

 
 
 
1,182,058

Total current assets
 
81,812,195

 
2,627,390

 
(2,627,390
)
 
 
 
81,812,195

 
 
 
 
 
 


 
 
 


Property, plant and equipment, net
 
264,727,442

 
39,825,763

 
(16,452,963
)
 
b
 
288,100,242

Sand reserves, net
 
55,365,025

 
—

 
20,910,000

 
b
 
76,275,025

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

 
—

 
—

 
 
 
13,859,772

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

 
—

 
—

 
 
 
5,439,307

Goodwill
 
88,726,875

 
—

 
—

 
 
 
88,726,875

Reclamation deposits
 
—

 
557,700

 
(557,700
)
 
a
 
—

Other non-current assets
 
5,491,878

 
388,010

 
(388,010
)
 
a
 
5,491,878

Total assets
 
$
515,422,494

 
$
43,398,863

 
$
883,937

 
 
 
$
559,705,294

 
 
 
 
 
 


 
 
 


LIABILITIES AND EQUITY
 


 
 
 


 
 
 


CURRENT LIABILITIES
 
 
 
 
 


 
 
 


Accounts payable
 
$
40,337,570

 
$
4,146,258

 
$
(4,146,258
)
 
a
 
$
40,337,570

Payables to related parties
 
661,134

 
—

 
—

 
 
 
661,134

Accrued expenses and other current liabilities
 
9,211,898

 
4,912,301

 
(5,173,330
)
 
c
 
8,950,869

Income taxes payable
 
—

 
—

 
—

 
 
 
—

Asset retirement obligation
 
—

 
3,483,555

 
(1,490,445
)
 
c
 
1,993,110

Accrued interest
 
—

 
6,038,921

 
(6,038,921
)
 
a
 
—

Accrual for estimated disposal costs in liquidation
 
—

 
3,499,057

 
(3,499,057
)
 
a
 
—

Subordinated notes payable
 
—

 
607,000

 
(607,000
)
 
a
 
—

Current maturities of long-term debt
 
—

 
60,175,680

 
(60,175,680
)
 
a
 
—

Total current liabilities
 
50,210,602

 
82,862,772

 
(81,130,691
)
 
 
 
51,942,683

 
 
 
 
 
 


 
 
 


Long-term debt
 
—

 
—

 
36,320,187

 
d
 
36,320,187

Deferred income taxes
 
43,881,012

 
—

 
2,219,020

 
e
 
46,100,032

Other liabilities
 
2,733,863

 
—

 
—

 
 
 
2,733,863

Total liabilities
 
96,825,477

 
82,862,772

 
(42,591,484
)
 
 
 
137,096,765

 
 
 
 
 
 
 
 
 
 


EQUITY
 
 
 


 
 
 
 
 


Equity:
 
 
 


 
 
 
 
 


Common stock
 
375,000

 
—

 
—

 
 
 
375,000

Additional paid in capital
 
400,775,752

 
—

 
—

 
 
 
400,775,752

Member's equity
 
81,693,910

 
(39,463,909
)
 
39,463,909

 
a
 
81,693,910

Accumulated Deficit
 
(61,259,392
)
 
—

 
4,011,512

 
e, f
 
(57,247,880
)
Accumulated other comprehensive loss
 
(2,988,253
)
 
—

 
—

 
 
 
(2,988,253
)
Total equity
 
418,597,017

 
(39,463,909
)
 
43,475,421

 
 
 
422,608,529

Total liabilities and equity
 
$
515,422,494

 
$
43,398,863

 
$
883,937

 
 
 
$
559,705,294


(a) Financial information has been recast to include the financial position and results attributable to Sturgeon.



2
MAMMOTH ENERGY SERVICES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (INCOME)
YEAR ENDED DECEMBER 31, 2016
(Unaudited)



 
Mammoth
 
 
 
Chieftain
 
 
 
Mammoth
 
Historical (a)
 
Chieftain
 
Pro Forma Adjustments
 
Pro Forma
REVENUE
 
 
 
 
 
 
 
 
 
Services revenue
$
89,642,899

 
$
—

 
$
—

 
 
 
$
89,642,899

Services revenue - related parties
107,147,000

 
—

 
—

 
 
 
107,147,000

Product revenue
8,052,445

 
7,690,032

 
—

 
 
 
15,742,477

Product revenue - related parties
25,783,253

 
—

 
—

 
 
 
25,783,253

Total Revenue
230,625,597

 
7,690,032

 
—

 
 
 
238,315,629

 
 
 
 
 
 
 
 
 
 
COST AND EXPENSES
 
 
 
 
 
 
 
 
 
Services cost of revenue
140,063,016

 
—

 
—

 
 
 
140,063,016

Services cost of revenue - related parties
1,063,231

 
—

 
—

 
 
 
1,063,231

Product cost of revenue
31,892,045

 
3,454,485

 
—

 
 
 
35,346,530

Product cost of revenue - related parties
2,455

 
—

 
—

 
 
 
2,455

Selling, general and administrative
17,290,623

 
14,416,305

 
(3,499,057
)
 
g
 
28,207,871

Selling, general and administrative - related parties
757,892

 
—

 
—

 
 
 
757,892

Depreciation and amortization
72,315,398

 
3,890,092

 
360,549

 
h
 
76,566,039

Accretion of asset retirement obligations
—

 
360,549

 
(360,549
)
 
h
 
—

Impairment of long-lived assets
1,870,885

 
595,190

 
—

 
 
 
2,466,075

Total cost and expenses
265,255,545

 
22,716,621

 
(3,499,057
)
 
 
 
284,473,109

Operating loss
(34,629,948
)
 
(15,026,589
)
 
3,499,057

 
 
 
(46,157,480
)
 
 
 
 
 
 
 
 
 
 
OTHER (EXPENSE) INCOME
 
 
 
 
 
 
 
 
 
Interest expense
(4,096,182
)
 
(11,970,235
)
 
11,970,235

 
i,j
 
(4,096,182
)
Interest income
—

 
1,900

 
(1,900
)
 
j
 
—

Other, net
158,173

 
52,923,473

 
—

 
 
 
53,081,646

Total other (expense) income
(3,938,009
)
 
40,955,138

 
11,968,335

 
 
 
48,985,464

(Loss) income before income taxes
(38,567,957
)
 
25,928,549

 
15,467,392

 
 
 
2,827,984

Provision for income taxes
53,884,871

 
—

 
7,268,597

 
e
 
61,153,468

Net (loss) income
$
(92,452,828
)
 
$
25,928,549

 
$
8,198,795

 
 
 
$
(58,325,484
)
 
 
 
 
 
 
 
 
 
 
OTHER COMPREHENSIVE (LOSS) INCOME
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
2,710,605

 
—

 
—

 
 
 
2,710,605

Comprehensive (loss) income
$
(89,742,223
)
 
$
25,928,549

 
$
8,198,795

 
 
 
$
(55,614,879
)
 
 
 
 
 
 
 
 
 
 
Net loss per share (basic and diluted) (Note 3)
 
 
 
 
 
 
 
 
$
(1.85
)
Weighted average number of shares outstanding (Note 3)
 
 
 
 
 
 
 
 
31,500,000

 
 
 
 
 
 
 
 
 
 












(a) Financial information has been recast to include the financial position and results attributable to Sturgeon.


3
MAMMOTH ENERGY SERVICES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (INCOME)
THREE MONTHS ENDED MARCH 31, 2017
(Unaudited)


 
Mammoth
 
 
 
 
 
 
 
Mammoth
 
Historical (a)
 
Chieftain
 
Pro Forma Adjustments
 
Pro Forma
REVENUE
 
 
 
 
 
 
 
 
 
Services revenue
$
27,091,882

 
$
—

 
$
—

 
 
 
$
27,091,882

Services revenue - related parties
32,961,657

 
—

 
—

 
 
 
32,961,657

Product revenue
3,372,063

 
—

 
—

 
 
 
3,372,063

Product revenue - related parties
11,540,419

 
—

 
—

 
 
 
11,540,419

Total Revenue
74,966,021

 
—

 
—

 
 
 
74,966,021

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

 
—

 
—

 
 
 
45,460,804

Services cost of revenue - related parties
429,917

 
—

 
—

 
 
 
429,917

Product cost of revenue
12,607,265

 
—

 
—

 
 
 
12,607,265

Product cost of revenue - related parties
—

 
—

 
—

 
 
 
—

Selling, general and administrative
6,412,544

 
—

 
—

 
 
 
6,412,544

Selling, general and administrative - related parties
324,254

 
—

 
—

 
 
 
324,254

Depreciation and amortization
17,237,251

 
—

 
—

 
 
 
17,237,251

Impairment of long-lived assets
—

 
—

 
—

 
 
 
—

Total cost and expenses
82,472,035

 
—

 
—

 
 
 
82,472,035

Operating (loss) income
(7,506,014
)
 
—

 
—

 
 
 
(7,506,014
)
 
 
 
 
 
 
 
 
 
 
OTHER (EXPENSE) INCOME
 
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
—

 
 
 
—

Interest expense
(397,184
)
 
(216,101
)
 
216,101

 
i
 
(397,184
)
Other, net
(184,146
)
 
—

 
—

 
 
 
(184,146
)
Total other expense
(581,330
)
 
(216,101
)
 
216,101

 
 
 
(581,330
)
(Loss) income before income taxes
(8,087,344
)
 
(216,101
)
 
216,101

 
 
 
(8,087,344
)
Benefit for income taxes
(3,106,065
)
 
—

 
(134,189
)
 
e
 
(3,240,254
)
Net loss
$
(4,981,279
)
 
$
(216,101
)
 
$
350,290

 
 
 
$
(4,847,090
)
 
 
 
 
 
 
 
 
 
 
OTHER COMPREHENSIVE (LOSS) INCOME
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
228,110

 
—

 
—

 
 
 
228,110

Comprehensive loss
$
(4,753,169
)
 
$
(216,101
)
 
$
350,290

 
 
 
$
(4,618,980
)
 
 
 
 
 
 
 
 
 
 
Net loss per share (basic and diluted) (Note 3)
 
 
 
 
 
 
 
 
$
(0.13
)
Weighted average number of shares outstanding (Note 3)
 
 
 
 
 
 
 
 
37,500,000

 
 
 
 
 
 
 
 
 
 
















(a) Financial information has been recast to include the financial position and results attributable to Sturgeon.


4
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 condensed combined financial statements of the Company and the historical financial statements of Chieftain. The unaudited pro forma condensed consolidated financial statements present the impact of the Acquisition, which is described in the introduction to the unaudited pro forma condensed consolidated financial statements, on the Company's results of operations and financial position.

2. Pro forma adjustments

The following adjustments to the Company's historical financial statements have been prepared as if the Acquisition occurred on January 1, 2016:
 
a.
Adjustment column reflects removal of assets and liabilities of Chieftain not acquired in the Acquisition.

b.
The 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 on the closing date of the Acquisition is allocated in the following preliminary purchase price allocation:
Total consideration paid
$
36,320,187

 

Estimated Book Value at March 31, 2017:
$
39,825,762

Fair value adjustments to:
 
Property, plant and equipment, net
4,457,038

Asset retirement obligation assumed
(1,732,081
)
Gain recognition
(6,230,532
)
Total estimated fair value
$
36,320,187

 
 

c.
Adjustment to reclassify the Company's asset retirement obligation to align with Chieftain's.

d.
Assumes that the Company would have used its availability under its credit facility to fund the Acquisition.

e.
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. Pro forma adjustments reflect impact of Chieftain on the Company's income tax provision.

f.
Adjustment reflects gain on bargain purchase associated with the Acquisition.

g.
Adjustment to remove effect of one-time reorganization charges incurred by Chieftain related to its bankruptcy proceedings.

h.
Adjustment to reclassify Chieftain's accretion expense to align with the Company's.

i.
Adjustment to remove interest expense associated with long-term debt not acquired by Mammoth.

j.
Adjustment to remove Chieftain's interest income to related to its cash that was not acquired in the Acquisition.

3. Pro forma net loss per common share

Pro forma net loss per common share is determined by dividing the pro forma net 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 was 31,500,000 for the year ended December 31, 2016 and 37,500,000 for the three months ended March 31, 2017. For purposes of this pro forma calculation, the Company assumed that shares of common stock outstanding were 31,500,000 and 37,500,000 for the year ended December 31, 2016 and the three months ended March 31, 2017, respectively.

5