8-K/A - RNGR - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 1, 2022

Ranger Energy Services, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware	001-38183	81-5449572
(State or other jurisdiction<br><br>of incorporation)	(Commission<br><br>File Number)	(IRS Employer<br><br>Identification No.)
10350 Richmond, Suite 550<br><br>Houston, Texas 77042<br><br>(713) 935-8900<br><br>(Address of Principal Executive Offices)
Registrant’s telephone number, including area code: (713) 895-8900

Check the appropriate box below if the Form 8K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value	RNGR	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

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

Introductory Note

The sole purpose of this Amendment No. 2 on Current Report Form 8-K for the Audited Financial Statements of The Acquired Basic Business, is to include the audit opinion letter related to the audited combined financial statements of The Acquired Basic Business, which were filed March 22, 2022. Information not affected by this Amendment remains unchanged and reflects the disclosures made at the time of the filing.

As reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission by Ranger Energy Services, Inc. (the “Company”) on October 1, 2021 (the “Original Ranger Form 8-K”), the Company, together with certain of its subsidiaries, completed the acquisition of assets (the “Acquired Assets”) from Basic Energy Services, LLC (“Basic” and such acquisition, the “Basic Acquisition”). The Acquired Assets included, outside the State of California (excluding the water logistic business), all of Basic’s assets within its well servicing service line, fishing, rental tool and coiled tubing service lines, as well as all rolling stock assets required to support the operating assets being purchased and real property locations inclusive of, but not limited to, real property owned in New Mexico, Oklahoma and Texas.

This Current Report on Form 8-K/A (this “Amendment”) amends and supplements the Original Ranger Form 8-K to provide the following:

•Audited combined financial statements of The Acquired Basic Business (for the period described in Item 9.01(a) below), the notes thereto and the Independent Auditor’s Report;

•Unaudited interim combined financial statements of The Acquired Basic Business (for the period described in Item 9.01(a) below) and the notes thereto; and

•Unaudited combined pro forma financial information described in Item 9.01(b) below.

No other modifications to the Original Ranger Form 8-K are being made by this Amendment. This Amendment should be read in conjunction with the Original Ranger Form 8-K, which provides a more complete description of the Basic Acquisition.

Item 9.01 Financial Statements and Exhibits

(a) Financial Statements of Businesses Acquired

•Audited combined financial statements of The Acquired Basic Business as of and for the years ended December 31, 2020 and 2019, and the related notes to the combined financial statements, attached as Exhibit 99.1 hereto; and

•Unaudited interim combined financial statements of The Acquired Basic Business as of September 30, 2021 and for the nine months ended September 30, 2021 and 2020, and the related notes to the combined financial statements, attached as Exhibit 99.2 hereto.

(b) Pro Forma Financial Information

The following unaudited combined pro forma financial information of the Company, giving effect to the Basic Acquisition, attached as Exhibit 99.3 hereto;

•Unaudited combined pro forma Balance Sheet as of September 30, 2021;

•Unaudited combined pro forma Statements of Operations for the year ended December 31, 2020 and the nine months ended September 30, 2021; and

•Notes to the unaudited combined pro forma financial statements.

Exhibit No.	Description
23.1	Consent of KPMG, LLP
99.1	Audited Combined Financial Statements of The Acquired Basic Business as of and for the years ended December 31, 2020 and 2019
99.2	Unaudited Interim Combined Financial Statements of The Acquired Basic Business as of September 30, 2021 and for the nine months ended September 30, 2021 and 2020
99.3	Unaudited Combined Pro Forma Financial information for the year ended December 31, 2020 and as of and for the nine months ended September 30, 2021
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Ranger Energy Services, Inc.
/s/ J. Brandon Blossman	March 23, 2022
J. Brandon Blossman	Date
Chief Financial Officer
(Principal Financial Officer)

Document

Exhibit 23.1

KPMG LLP

811 Main Street

Houston, TX 77002

Consent of the Independent Auditors

We consent to the incorporation by reference in the registration statement (No. 333-220018) on Ranger Energy Services, Inc. of our report dated March 22, 2022, with respect to the combined financial statements of The Acquired Basic Business, which report appears in the Form 8-K/A of Ranger Energy Services, Inc. dated March 22, 2022.

/s/ KPMG

Houston, Texas

March 22, 2022

Document

EXHIBIT 99.1

The Acquired Basic Business

(Acquisition of certain assets related to the well servicing and completion and remedial business lines of Basic Energy Services, Inc.)

Combined Financial Statements

For the Years Ended December 31, 2020 and 2019

EXHIBIT 99.1

Index To Combined Financial Statements

	Page(s)
Report of Independent Auditors
Combined Financial Statements
Combined Statements of Operations	3
Combined Balance Sheets	4
Combined Statements of Parent Company Equity	5
Combined Statements of Cash Flows	6
Notes to Combined Financial Statements	7 - 20

EXHIBIT 99.1

KPMG LLP

811 Main Street

Houston, TX 77002

Independent Auditors’ Report

The Board of Directors of Ranger Energy Services, LLC

The Acquired Basic Business:

We have audited the accompanying combined financial statements of The Acquired Basic Business, which comprise the combined balance sheets as of December 31, 2020 and 2019, and the related statements of operations, parent company equity, and cash flows for the years then ended, and the related notes to the combined financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depending on the auditors’ judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of The Acquired Basic Business as of December 31, 2020 and 2019, and the results of their operations and their cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.

Houston, Texas

March 22, 2022

EXHIBIT 99.1

THE ACQUIRED BASIC BUSINESS

COMBINED STATEMENTS OF OPERATIONS

(in thousands)

	Years Ended December 31,
	2020		2019
Revenues
Well servicing	$	120,469	$	195,850
Completion and Remedial	48,975		141,690
Total Revenues	169,444		337,540
Operating expenses
Well servicing	109,205		155,525
Completion and Remedial	47,521		99,596
Total cost of services	156,726		255,121
Selling, general and administrative	63,583		90,873
Depreciation and amortization	20,564		29,819
Impairment and other charges	67,065		—
Total operating expenses	307,938		375,813
Operating loss	(138,494)		(38,273)
Interest expense	435		799
Loss before income taxes	(138,929)		(39,072)
Tax expense	—		—
Net Loss	$	(138,929)	$	(39,072)

See accompanying notes to combined financial statements.

EXHIBIT 99.1

THE ACQUIRED BASIC BUSINESS

COMBINED BALANCE SHEETS

(in thousands)

	December 31,
	2020		2019
Assets
Trade accounts receivable, net	$	21,111	$	64,363
Inventories	8,593		11,337
Prepaid expenses and other current assets	5,486		4,557
Total current assets	35,190		80,257
Property and equipment, net	64,980		120,017
Operating lease right-of-use assets	2,330		3,841
Intangible assets, net	1,290		1,407
Other assets, net	1,090		1,865
Total assets	104,880		207,387
Liabilities and Parent Company Equity
Accounts payable	27,367		24,834
Accrued expenses	24,733		22,920
Current portion of finance lease liabilities	2,020		3,860
Current portion of operating lease liabilities	482		570
Total current liabilities	54,602		52,184
Finance lease liabilities	3,129		6,038
Operating lease liabilities	758		792
Total liabilities	58,489		59,014
Parent company equity
Parent company investment	46,391		148,373
Total parent company equity	46,391		148,373
Total liabilities and parent company equity	$	104,880	$	207,387

See accompanying notes to combined financial statements.

EXHIBIT 99.1

THE ACQUIRED BASIC BUSINESS

COMBINED STATEMENTS OF PARENT COMPANY EQUITY

(in thousands)

	Total parent company equity
Balance as of January 1, 2019	$	172,324
Net loss	(39,072)
Net transfers from parent	15,121
Balance as of December 31, 2019	$	148,373
Balance as of January 1, 2020	$	148,373
Net loss	(138,929)
Non cash CJWS property, equipment and goodwill contribution from Parent	29,383
Net transfers from parent	7,564
Balance as of December 31, 2020	$	46,391

See accompanying notes to combined financial statements.

EXHIBIT 99.1

THE ACQUIRED BASIC BUSINESS

COMBINED STATEMENTS OF CASH FLOWS

(in thousands)

	Years Ended December 31,
	2020		2019
Cash Flows from Operating Activities
Net Loss	$	(138,929)	$	(39,072)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	20,564		29,819
Impairment of property and equipment	59,940		—
Impairment of goodwill	7,124		—
Stock based compensation	1,042		5,838
Bad debt provisions	677		358
Changes in operating assets and liabilities:
Accounts receivable	42,574		41,083
Inventories	2,744		894
Prepaid expenses and other assets	(154)		5,108
Accounts payable	2,533		(31,976)
Accrued expenses	771		(2,898)
Other liabilities	1,393		432
Net cash provided by operating activities	279		9,586
Cash flow from investing activities
Capital expenditures	(2,729)		(20,598)
Net cash used in investing activities	(2,729)		(20,598)
Cash flow from financing activities
Other financing activates	(5,114)		(4,109)
Net transfers from parent	7,564		15,121
Net cash provided by financing activities	2,450		11,012
Net decrease in cash and cash equivalents	—		—
Cash and cash equivalents, beginning period	—		—
Cash and cash equivalents, ending period	—		—
Supplemental cash flow information and non-cash investing and financing activities:
Finance lease liabilities incurred from obtaining right-of-use assets	362		3,335
Operating lease liabilities incurred from obtaining right-of-use assets	1,372		4,843
Additions to goodwill related to CJWS	7,124		—
Additions to property and equipment related to CJWS	22,259		—

See accompanying notes to combined financial statements.

EXHIBIT 99.1

THE ACQUIRED BASIC BUSINESS

NOTES TO COMBINED FINANCIAL STATEMENTS

Note 1 — Business and Basis of Presentation

Description of the Business

On September 15, 2021, Ranger Energy Acquisition, LLC (“Buyer” or “Ranger”), a controlled subsidiary of Ranger Energy Services, Inc., entered into an Asset Purchase Agreement with Basic Energy Services, Inc. (“the Parent”) and its following subsidiaries, Basic Energy Services, L.P., C&J Well Services, Inc., Taylor Industries, LLC, Breakaway Acquisition LLC and KVS Transportation, Inc, (each a “Seller” and, collectively, “Sellers” or “Basic”), pursuant to which Ranger acquired the right, title and interest of certain assets related to Basic.

Specifically, Ranger acquired certain assets related to well servicing and completion and remedial business lines of the Sellers outside the State of California (excluding the water logistic business and corporate assets), related to the well servicing, fishing and rental tool, coiled tubing, rolling stock and real property locations inclusive of, but not limited to, real property owned in New Mexico, Oklahoma and Texas (collectively and hereinafter, “the Business” or “we”, “us” or “our”).

The Parent and its subsidiaries provide a wide range of wellsite services to oil and natural gas drilling and producing companies, including well servicing, water logistics and completion and remedial services. The Parent’s operations are concentrated in major United States onshore oil and natural gas producing regions located in Texas, California, New Mexico, Oklahoma, Arkansas, Louisiana, Wyoming, North Dakota and Colorado.

Basis of Presentation

These combined financial statements of the Business reflect the historical financial position, results of operations, changes in parent company equity and cash flows of the Business for the periods presented as the Business was historically managed by the Parent. The combined financial statements have been prepared on a “carve-out” basis and are derived from the combined financial statements and accounting records of the Parent and its subsidiaries. The combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) using U.S. dollars as the reporting currency. There were no items of other combined comprehensive income during the periods presented.

The combined financial statements include expense allocations for certain functions provided by the Parent. These allocations were either based on direct usage when identifiable or generally based on the proportionate percentage of the Business cost of sales. Cost of sales include expense allocations related to stock-based compensation of $1.0 million and $5.8 million for the years ended December 31, 2020 and 2019, respectively; and selling and general administrative expenses include expense allocations related to accounting and finance, legal, information technology, human resources, corporate fleet and cash incentive plans of $27.0 million and $36.2 million for the years ended December 31, 2020 and 2019, respectively (refer to Note 3 — Related Party Transactions with Parent). Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to or the benefit received by the Business during the period presented for purposes of the carve-out. The allocations may not, however, reflect the expenses that the Business would have incurred as an independent stand-alone company for the period presented. Actual costs that may have been incurred if the Business had been a stand-alone Parent would depend on a number of factors, including the executive, organizational and administrative structure, equity compensation costs, professional fees costs, whether functions were outsourced or performed by employees, and other strategic decisions like merger and acquisitions and expansion into other markets.

Parent Company Equity represents the Parent’s historical investment in the Business, cumulative net earnings or losses and the net effect of transfers to and from, transactions between, and cost allocations from the Parent.

Total Parent Company Equity for the year ended December 31, 2020, reflects the contribution of certain property, equipment and goodwill contributed by the Parent to Business, as part of the acquisition of C&J Well Services, Inc. ("CJWS") from NexTier Holding Co by the Parent on March 9, 2020.The results of operations for the periods subsequent to March 2020, includes the operations of the acquired property and equipment.

EXHIBIT 99.1

Except for certain finance leases, the Parent’s external debt and the related interest expense have not been allocated to the Business as the Business is not the legal obligor of the debt and the Parent’s borrowings were not directly attributable to the Business.

The Business does not have legal ownership of bank accounts. Accordingly, none of the cash and cash equivalents of the Parent has been assigned to the Business in the combined financial statements.

Non-recurring costs related to transaction costs, restructuring and severance payments have been excluded from the combined financial statements.

Income taxes for the Business are calculated as if the business filed tax returns on a stand-alone basis separate from the Parent.

The combined financial statements may not be indicative of the Businesses’ future performance and do not necessarily reflect what the financial position, results of operations and cash flows would have been had it operated as an independent Parent during the periods presented.

Note 2 — Summary of Significant Accounting Policies

Use of estimates

The preparation of the accompanying combined financial statements in conformity with GAAP to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Areas where critical accounting estimates are made by Parent management include impairments of goodwill and long-lived assets.

Revenue Recognition

We account for revenues under Accounting Standards Codification (ASC) Topic - 606 - Revenue from Contracts with Customers to match the delivery of goods or services to customers. Our revenues are generated by services, which are consumed as provided by our customers on their sites. Contracts for our services are negotiated on a regional level and are on a per job basis, with jobs being completed in a short period of time, usually one day or up to a week. Revenue is recognized as performance obligations have been completed on a daily basis either as Accounts Receivable or Work-in-Process ("WIP"), when all of the proper approvals are obtained. A small percentage of our jobs may require performance obligations which extend over a longer period of time and are not invoiced until all performances obligations in the contract are complete, such as plugging a well, fishing services, and pad site preparation jobs. Because these jobs are performed on the customer's job site, and we are contractually entitled to bill for our services performed to date, revenues for these service lines are recognized on a daily basis as services are performed and recorded as Contract Assets rather than WIP or Accounts Receivable. Contract Assets are typically invoiced within 30 to 60 days of recognizing revenue. We do not have any long-term service contracts; nor do we have revenue expected to be recognized in any future year related to remaining performance obligations or contracts with variable consideration related to undelivered performance obligations.

Accounts Receivable and Allowance for Credit Losses

We estimate the allowance for credit losses on accounts receivable based on past collections and expectations for future collections. We regularly review each account receivable for collectability. After all collection efforts are exhausted, if the balance is still determined to be uncollectible, the balance is written off. Expense related to the write-off of uncollected account receivables is recorded in selling, general and administrative expense. For accounts receivable related to products and services, we estimate the expected credit losses by reviewing and monitoring updated customer credit scores and risk ratings provided by third party and internal resources, considering the future impact of the current business and industry environment, and reviewing the historical loss experience by type of customer.

Inventories

Service tools, coiled tubing and additive tools are stated at lower of cost or net realizable value. Other inventories, consisting mainly of manufacturing raw materials, rig components, repair parts, drilling and completion materials

EXHIBIT 99.1

and gravel, are stated at lower of cost or net realizable value, with cost being determined on the first-in, first-out method.

Leases

We adopted ASU No. 2016-02, Topic 842 – Leases on January 1, 2019. We determine if an arrangement is a lease at inception of the arrangement. To the extent that we determine an arrangement represents a lease, we classify that lease as an operating lease or a finance lease. We capitalize operating leases on our combined balance sheets through a right-of-use (“ROU”) asset and finance leases as property plant and equipment and the corresponding lease liabilities. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating and finance lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term.

Property and Equipment

Property and equipment are stated at cost or at the Parent’s basis. Expenditures for repairs and maintenance are charged to expense as incurred and additions and improvements that significantly extend the lives of the assets are capitalized. We are obligated under various finance leases for certain vehicles and equipment that expire at various dates during the next five years. All property and equipment are depreciated or amortized (to the extent of estimated salvage values) on the straight-line method based on estimated useful lives of the assets as follows:

Assets	Estimated Useful Life
Service equipment	3-15 years
Rental equipment	2-15 years
Building and improvements	20-30 years
Light vehicles	3-7 years

Goodwill

In connection with the Parent acquisition of C&J Well Services, Inc. ("CJWS") from NexTier Holding Co on March 9, 2020, the Parent recorded goodwill of $19 million, which was initially allocated to its Well Servicing and Water Logistics reporting units based on their respective fair values. Only goodwill related to the Parent’s Well Servicing reporting unit (excluding assets in the California region) was pushed-down to the Business in an amount of $7.1 million.

As part of goodwill impairment testing, fair value is determined by using a combination of the income approach and the market approach. The income approach estimates the fair value by using forecasted revenues and operating cash flows, estimating terminal values and associated growth rates, and discounting them using an estimate of the discount rate, or expected return, that a market participant would have required as of the valuation date. The market approach involves the selection of the appropriate peer group companies and valuation multiples.

On March 31, 2020, due to the reduction in demand for the Parent’s services, the Parent determined that the fair value of the Well Servicing reporting unit was less than its carrying value, which resulted in a full impairment of the Well Services reporting unit goodwill. Therefore, we recorded a goodwill impairment of $7.1 million for this reporting unit.

Intangible Assets

We had trade name intangible assets of 1.3 million and $1.4 million as of December 31, 2020 and 2019, respectively. Trade names are amortized over a 15-year life.

We evaluate intangible assets for impairment with our long-lived assets.

Long-Lived Asset Impairments

EXHIBIT 99.1

The Parent performs a review of its long-lived assets for impairment when, in its judgment, events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recovered over its remaining service life. Impairment is indicated when the sum of the estimated future cash flows, on an undiscounted basis, is less than the asset group's carrying amount. If the undiscounted cash flows are less than the asset group's carrying amount, then the asset group's fair value is determined by using discounted cash flow analysis. An impairment loss is measured and recorded as the amount by which the asset group's carrying amount exceeds its fair value.

Long-lived asset groups and related reporting units have been determined to be the group of assets that operate in the Well Servicing business and the group of assets that operate in the Completion and Remedial business.

When conducting an impairment test on long-lived assets, other than goodwill, groups of assets are determined based on the lowest level for which identifiable cash flows are largely independent of the cash flows from other assets. This requires some judgment. Estimated future undiscounted cash flows expected to result from the use and eventual disposition of the asset group are then compared to its carrying amount. If the undiscounted cash flows are less than the asset group's carrying amount, the asset group's fair value is determined by using discounted cash flow analysis. This analysis is based on estimates such as the short-term and long-term forecast of operating performance, including revenue growth rates and expected profitability margins, estimates of the remaining useful life and service potential of the assets within the asset group, terminal value growth rate, and a discount rate, based on our weighted average cost of capital, used in the discounted cash flow model. An impairment loss is measured and recorded as the amount by which the asset group's carrying amount exceeds its fair value.

On March 31, 2020, due to the reduction in demand for its services, the Parent recognized an impairment in long-lived assets in an amount of $88.7 million. The portion of this impairment related to assets acquired by Ranger was $59.9 million.

Stock-Based Compensation

The Parent has historically compensated directors, executives and employees using a combination of performance and time-based stock option, restricted share, and restricted share unit awards. The Parent values awards at the date of the grant and recognizes expense over the vesting period of the grant. The method of determining the fair value of share-based payments depends on the type of award. Share-based awards that vest over a certain service period with no market conditions are valued at the closing market price on the grant date. Share-based awards that are dependent upon certain market performance conditions being met are valued using a Monte Carlo simulation with inputs determined on the date of the grant. Option grants are valued using the Black-Scholes-Merton model using inputs that are determined on the date of the grant. The portion of stock-based compensation allocated to Ranger based on cost of sales was $1 million and $5.8 million for the year ended December 31, 2020 and 2019.

Environmental Contingencies

We are subject to extensive federal, state and local environmental laws and regulations. These laws, which are constantly changing, regulate the discharge of materials into the environment and may require the Business to remove or mitigate the adverse environmental effects of disposal or release of petroleum, chemical and other substances at various sites. Environmental expenditures are expensed or capitalized depending on the future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefits are expensed. Liabilities for expenditures of a non-capital nature are recorded when environmental assessment and/or remediation is probable and the costs can be reasonably estimated. We had no environmental contingent liabilities recorded during the periods presented.

Taxation

The provision for income taxes, taxes payable and deferred income tax balances has been recorded as if the Business had filed all tax returns on a separate return basis separate from the Parent. The federal and state net operating losses are examples of deferred items that will have no future value to the Business as the purchase did not result in the transfer of loss carryforwards or tax credit carryforwards to the Business. We paid no federal income taxes during the years 2020 and 2019.

The provision for income taxes is determined using the asset and liability method of accounting. Deferred tax assets and liabilities are recorded based upon differences between the tax basis of assets and liabilities and their carrying

EXHIBIT 99.1

values for financial reporting purposes and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

We record deferred tax assets net of a valuation allowance to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. The Business has determined a valuation allowance is required for financial reporting purposes due to cumulative historic losses on a separate tax return basis. In the event we determine that we would be able to realize more of our deferred income tax assets in the future, we would make an adjustment to reduce the valuation allowance which would reduce our income tax expense.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

We classify interest and penalties as a component of tax expense.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). We classify fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities that the Business has the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 — Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured.

Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

For further discussion of fair value measurements utilized in the presentation of these combined financial statements, see “Note 18 — Fair Value Measurements .”

Recent Accounting Pronouncements

Standards Adopted in 2020

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, "Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). ASU 2016-13 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected, utilizing an expected loss methodology in place of the previously used incurred loss methodology. The provisions require credit impairments to be measured over the contractual life of an asset and developed with consideration for past events, current conditions, and forecasts of future economic information. The new standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. We early adopted this standard on January 1, 2020, using the prospective transition method, and the standard did not have a material impact on our combined financial statements upon its adoption.

EXHIBIT 99.1

Standards Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” ("ASU 2019-12"). ASU 2019-12 intends to simplify various aspects related to accounting for income taxes and removes certain exceptions to the general principles in the standard. Additionally, the ASU clarifies and amends existing guidance to improve consistent application of its requirements. The amendments of ASU 2019-12 are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. We anticipate that the impact on its combined financial statements upon adoption of ASU 2019-12 will not be material.

Note 3 — Related Party Transactions with Parent

Corporate Allocations

The following table summarizes corporate allocations related to accounting and finance, legal, information technology, human resources, corporate fleet and cash incentive plans in selling, general and administrative expenses, in thousands:

	2020						2019
	Before Allocations		Corporate allocations		After allocations		Before Allocations		Corporate allocations		After allocations
Cost of services	$	155,684	$	1,042	$	156,726	$	249,282	$	5,839	$	255,121
Selling and administrative	36,554		27,029		63,583		54,635		36,238		90,873
	$	192,238	$	28,071	$	220,309	$	303,917	$	42,077	$	345,994

Self-insurance agreements

The Parent is self-insured up to retention limits with regard to workers’ compensation, general liability claims, and medical and dental coverage of its employees. The Parent estimates its reserves related to litigation and self-insured risks based on the facts and circumstances specific to the litigation and self-insured claims and its past experience with similar claims. The Parent has deductibles per occurrence for workers’ compensation, automobile liability, general liability, and medical and dental coverage of $2.0 million, $1.0 million, $1.0 million and $0.4 million, respectively.

The Business expenses associated with the Parent self-insurance programs have been allocated based on cost of sales and are reflected within selling, general and administrative expenses in the combined statement of operations.

Parent company investment

All intercompany transactions between the Business and the Parent have been included in the combined financial statements and are considered to be effectively settled for cash at the time such transactions are recorded. The total net effect of these transactions is reflected in the combined statement of cash flows as net transfers from Parent within financing activities and in the combined balance sheet as Parent company investment. The components of net transfers from Parent for the period are presented in the following table, in thousands:

	2020		2019
Corporate allocations	$	28,071	$	42,077
Financing activities	(20,507)		(26,956)
Total net transfers from parent	$	7,564	$	15,121

Note 4 — Accounts Receivable

The following table summarizes our accounts receivable balance, in thousands:

	December 31,
	2020		2019
Trade accounts receivable	$	23,985	$	66,559
Allowance for credit losses	(2,874)		(2,196)
Accounts receivable, net	$	21,111	$	64,363

EXHIBIT 99.1

Note 5 — Inventories

The following table summarizes our inventories, in thousands:

	December 31,
	2020		2019
Service tools	$	7,699	$	8,082
Coiled tubing	202		1,558
Additives	387		826
Other	305		871
Total inventories	$	8,593	$	11,337

Manufacturing related inventory decreased due to the closure of the manufacturing facility.

Note 6 — Prepaid Expenses and Other Current Assets

The following table summarizes our prepaid expenses and other current assets, in thousands:

	December 31,
	2020		2019
Prepaid expenses	$	1,061	$	2,470
Prepaid registration	945		—
Prepaid Insurance	2,468		1,162
Prepaid suppliers	508		847
Other accounts receivable	504		78
Total prepaid expenses and other current assets	$	5,486	$	4,557

Note 7 — Property and Equipment, net

The following table summarizes our property and equipment, in thousands:

	December 31,
	2020		2019
Service Equipment	$	141,444	$	123,139
Rental equipment	46,466		45,206
Buildings and improvements	9,046		9,046
Land	8,016		4,059
Light vehicles	19,408		18,417
Other	1,079		242
Total property and equipment	225,459		200,109
Less accumulated depreciation	(100,539)		(80,092)
Less impairment	(59,940)		—
Total property and equipment, net	$	64,980	$	120,017

EXHIBIT 99.1

The table below summarizes the gross amount of property and equipment and related accumulated amortization recorded under finance leases and included above, in thousands:

	December 31,
	2020		2019
Service equipment	$	4,684	$	7,377
Light vehicles	4,486		14,792
Rental equipment	464		574
	9,634		22,743
Less accumulated depreciation	(3,503)		(8,631)
Finance lease right-of-use assets, net	$	6,131	$	14,112

Note 8 — Goodwill

The following table summarizes goodwill balance, in thousands:

	Well Servicing
Balance as of January 1, 2020	$	—
Additions to goodwill	7,124
Goodwill impairment	(7,124)
Balance as of December 31, 2020	$	—

There were no additions in goodwill for the year ended December 31, 2019.

Note 9 — Intangible Assets, net

The intangible assets subject to amortization were as follows, in thousands:

	December 31,
	2020		2019
Trade names	$	1,759	$	1,759
Less accumulated amortization	(469)		(352)
Intangible assets, net	$	1,290	$	1,407

Amortization expense for each of the years ended December 31, 2020 and 2019 was approximately $117.3 thousands and $117.3 thousands, respectively.

Amortization expense for the next five succeeding years is expected to be as follows, in thousands:

	Amortization Expense
2021	$	117
2022	117
2023	117
2024	117
2025	117
Thereafter	705
Total	$	1,290

EXHIBIT 99.1

Note 10 — Other Assets

The following table summarizes our other assets, in thousands:

	December 31,
	2020		2019
Deposits	$	1,066	$	1,842
Other	24		23
Total other assets, net	$	1,090	$	1,865

Note 11 — Accrued Expenses

The following table summarizes our accrued expenses, in thousands:

	December 31,
	2020		2019
Employee compensation and benefits	$	19,227	$	13,603
Property taxes	4,264		3,130
Sales and use taxes	343		651
Others	899		5,536
Total accrued expenses	$	24,733	$	22,920

Note 12 — Leases

The following table summarizes the components of the lease expense recognized for the year ended December 31, 2020 and 2019, respectively, in thousands:

	2020		2019
Operating lease expense:
Operating lease	$	1,442	$	1,584
Short term lease	498		587
Total operating lease expense	$	1,940	$	2,171
Finance lease expense:
Amortization of right of use assets	$	2,402	$	4,399
Interest on lease liabilities	435		799
Total finance lease expenses	$	2,837	$	5,198

Supplemental information related to leases was as follows, in thousands:

	2020		2019
Operating leases
Weighted average remaining lease term	2.28		2.89
Weighted average discount rate	16.35	%	15.51	%
Finance leases
Weighted average remaining lease term	2.35		2.37
Weighted average discount rate	8.18	%	7.72	%

EXHIBIT 99.1

Supplemental cash flow information related to leases was as follows, in thousands:

	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	482	$	571
Financing cash outflows from finance leases	$	2,020	$	3,860

Future annual minimum lease payments are as follows in thousands:

	Operating Leases		Finance Leases
2021	$	482	$	2,020
2022	482		2,020
2023	276		1,109
2024	—		—
2025	—		—
Thereafter	$	1,240	$	5,149

Note 13 — Significant Concentrations

Concentration of credit risk primarily relates to trade receivables, which arise in the normal course of business.

As of December 31, 2020, three customers represent 32% of the total Business accounts receivable balance. As of December 31, 2019, there were not customers that represent more than 10% of the total Business accounts receivable balance.

For the year ended December 31, 2020, there were not customers that represent more than 10% of the Business’ revenue. For the year ended 2019, one customer accounted for 10% or $34.5 million the Business’ revenue.

Note 14 — Parent Compensation Plans

The Parent maintains management incentive plan, stock option awards, time-based Restricted Stock Awards, Performance-based Restricted Stock Awards and Phantom Stock Awards with selected employees. Only cash incentive plans are allocated to this carve out.

We recognized cash incentive plan compensation expenses of $4.7 million and $26.7 million for the year ended December 31, 2020 and 2019, respectively, of which $0.8 million and $4.1 million were allocated from Parent based on cost of sales ratio.

We recognized stock-based compensation of $1.0 million and $5.8 million for the year ended December 31, 2020 and 2019, respectively of which the whole amounts were allocated from Parent based on cost of sales ratio.

Note 15 — 401K Plan

The Parent has a 401(k)-profit sharing plan that covers substantially all employees. After one year of employment, employees may contribute up to their base salary not to exceed the annual federal maximum allowed for such plans. At management’s discretion, the Parent may make a matching contribution proportional to each employee’s contribution. Employee contributions are fully vested at all times. Employer matching was suspended during portions of 2020 and 2019. Employer matching contributions vest immediately. Employer matching contributions vest immediately.

Employer contributions to the Business 401(k) profit sharing plan were $0.6 million and $1.4 million for the year ended December 31, 2020 and 2019, respectively, of which $0.2 million and $0.4 million were allocated from Parent based on cost of sales ratio.

EXHIBIT 99.1

Note 16 — Income Taxes

Income tax (benefit) expense consists of the following, in thousands:

	2020		2019
Federal:
Current	$	—	$	—
Deferred	—		—
State:
Current	—		—
Deferred	—		—
Provision for income taxes	$	—	$	—

Income taxes are calculated as if the Business filed tax returns on a stand-alone basis separate from the Parent. We recorded no provisions for income taxes during the years 2020 and 2019. The provision for income taxes is determined using the asset and liability method of accounting.

Actual income tax expense differed from income tax expense computed by applying the applicable U.S. federal statutory corporate tax rate of 21.0% to carve out income before income taxes for the years ended December 31, 2020 and 2019, as follows, in thousands:

	2020		2019
Provision at the U.S. federal statutory rate	$	(29,175)	$	(8,205)
Increase (decrease) resulting from:
Meals & entertainment	275		458
Change in valuation allowance	28,804		7,661
Other	96		86
Provision for income taxes	$	—	$	—

Our effective tax rate is 0% for both 2020 and 2019. The change in valuation allowances for 2020 and 2019 is primarily derived from the normal movement in deferred tax assets in each respective year as we record full valuation allowances on the net deferred tax assets.

EXHIBIT 99.1

Deferred income tax provisions resulted from temporary differences in the recognition of income and expenses for financial reporting purposes and for tax purposes. The tax effects of these temporary differences representing deferred tax assets/liabilities resulted principally from the following, in thousands:

	December 31,
	2020		2019
Deferred tax assets:
Accruals and reserves	$	3,352	$	2,391
Goodwill and intangibles	11,886		10,425
U.S. net operating loss (“NOL”) carryforwards	47,934		32,847
Operating lease liabilities	283		309
IRC Section 163(j) carryforward	282		—
Deferred tax assets	63,737		45,972
Less: valuation allowance on deferred tax assets	(54,369)		(20,709)
Net deferred tax assets	$	9,368	25,263
Deferred tax liabilities:
Property, plant & equipment	(8,836)		(24,392)
Operating lease ROU assets	(532)		(871)
Deferred tax liabilities	(9,368)		(25,263)
Net deferred tax liability	$	—	$	—

As of December 31, 2020, and 2019, we recorded after tax NOLs of $47.9 million and $32.9 million, respectively. The NOLs as of 2020 and 2019 are generated by the losses incurred in each respective year as well as amount of NOL carryforwards at the beginning of 2019. $58.5 million of the net operating loss carryforward will expire in 2038. The remaining NOLs will be carried forward indefinitely but with approximately $92.0 million being subject to a Section 382 limitation.

After considering all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations, we believe that the deferred tax assets including NOLs in 2020 and 2019 will not more likely than not be realized, thus we recorded full valuation allowances in 2020 and 2019. The Business has determined a valuation allowance is required for financial reporting purposes due to cumulative historic losses on a separate tax return basis.

Other deferred tax assets and liabilities are recorded based upon differences between the tax basis of assets and liabilities and their carrying values for financial reporting purposes and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Business does not have any unrecognized tax benefits as of December 31, 2020 or 2019. The Business does not expect the amount of unrecognized tax benefits to significantly increase or decrease within 12 months of the reporting date.

The Business is subject to tax in the United States and various states. In general, the Business’s federal and state tax returns are open to exam and subject to adjustment because the Business is in a loss carryforward position.

EXHIBIT 99.1

Note 17 — Commitments and Contingencies

Environmental

We are subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. We cannot predict the future impact of such standards and requirements which are subject to change and can have retroactive effectiveness. We continue to monitor the status of these laws and regulations.

We have not been fined, cited, or notified of any environmental violations that would have a material adverse effect upon our financial position, capital resources. However, due to the very nature of our business, material costs could be incurred to maintain compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation or liabilities, the unknown timing and extent of the corrective actions which may be required, the determination of the Business’ liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification.

Litigation

FASB ASC 450 - "Contingencies" (“ASC 450”) governs the Business’ disclosure and recognition of loss contingencies, including pending claims, lawsuits, disputes with third parties, investigations and other actions that are incurred in the operation of our business. No liabilities related to litigation have recorded on the combined balance sheet.

Note 18 — Fair Value Measurements

Certain assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. These assets can include long-lived assets that have been reduced to fair value when they are held for sale and long-lived assets, including goodwill, that are written down to fair value when they are impaired. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

The following table summarizes our fair value measurements made on a nonrecurring basis as of various dates during the periods presented. Please note that these amounts represent the carrying amounts and fair values at the time of each measurement, in thousands.

	Date of Measurement	Hierarchy Level	Carrying Amount		Fair value
Well Servicing goodwill	31-Mar-20	3	$	7,124	$	—
Property and equipment	31-Mar-20	3	$	140,255	$	80,315

Note 19 — Subsequent Events

The Business has evaluated subsequent events through March 22, 2022, and has determined that there were no subsequent events that require disclosure in the combined financial statements.

Document

EXHIBIT 99.2

The Acquired Basic Business

(Acquisition of certain assets related to the well servicing and completion and remedial business lines of Basic Energy Services, Inc.)

Unaudited Combined Financial Statements

As of September 30, 2021 2020,

and for the Nine Months Ended September 30, 2021 and September 30, 2020

EXHIBIT 99.2

Index to Unaudited Interim Combined Financial Statements

	Page(s)
Unaudited Interim Consolidated Combined Financial Statements
Unaudited Interim Combined Statements of Operations	1
Unaudited Interim Combined Balance Sheets	2
Unaudited Interim Combined Statements of Members’ Equity	3
Unaudited Interim Combined Statements of Cash Flows	4
Notes to the Unaudited Interim Combined Financial Statements	5-11

EXHIBIT 99.2

THE ACQUIRED BASIC BUSINESS

UNAUDITED INTERIM COMBINED STATEMENTS OF OPERATIONS

	Nine Months Ended September 30,
	2021		2020
Revenues
Well servicing	$	97,655	$	90,472
Completion and Remedial	32,420		39,371
Total Revenues	130,075		129,843
Operating expenses
Well servicing	82,577		82,789
Completion and Remedial	24,895		38,443
Total cost of services	107,472		121,232
Selling, general and administrative	33,785		49,846
Depreciation and amortization	11,861		13,616
Impairment and other charges	248		67,065
Total operating expenses	153,366		251,759
Operating loss	(23,291)		(121,916)
Interest expense	311		390
Loss before income taxes	(23,602)		(122,306)
Tax expense	—		—
Net Loss	$	(23,602)	$	(122,306)

The accompanying notes are an integral part of these unaudited interim combined financial statements.

EXHIBIT 99.2

THE ACQUIRED BASIC BUSINESS

UNAUDITED INTERIM COMBINED BALANCE SHEETS

	September 30,
	2021		2020
Assets
Trade accounts receivable, net	$	25,315	$	45,125
Inventories	7,609		8,997
Prepaid expenses and other current assets	4,683		7,368
Total current assets	37,607		61,490
Property and equipment, net	53,862		70,939
Operating lease right-of-use assets	1,071		2,733
Intangible assets, net	1,202		1,319
Other assets, net	1,822		2,648
Total assets	95,564		139,129
Liabilities and parent company equity
Accounts payable	51,761		43,274
Accrued expenses	38,287		27,476
Current portion of finance lease liabilities	1,971		2,199
Current portion of operating lease liabilities	552		508
Total current liabilities	92,571		73,457
Finance lease liabilities	1,678		3,962
Operating lease liabilities	650		628
Total liabilities	94,899		78,047
Commitments and contingencies (Note 14)
Parent company equity
Parent Company Investment	665		61,082
Total parent company equity	665		61,082
Total liabilities and parent company equity	$	95,564	$	139,129

The accompanying notes are an integral part of these unaudited interim combined financial statements.

Exhibit 99.1

THE ACQUIRED BASIC BUSINESS

UNAUDITED INTERIM COMBINED STATEMENTS OF PARENT COMPANY EQUITY

	Total parent company equity
Balance as of January 1, 2020	$	148,373
Net loss	(122,306)
Non cash CJWS property, equipment and goodwill contribution from Parent	29,383
Net transfers from parent	5,632
Balance as of September 30, 2020	$	61,082
Balance as of January 1, 2021	$	46,391
Net loss	(23,602)
Net transfers from parent	(22,124)
Balance as of September 30, 2021	$	665

The accompanying notes are an integral part of these unaudited interim combined financial statements.

Exhibit 99.1

THE ACQUIRED BASIC BUSINESS

UNAUDITED INTERIM COMBINED STATEMENTS OF CASH FLOWS

	Nine Months Ended <br>September 30,
	2021		2020
Cash Flows from Operating Activities
Net Loss	$	(23,602)	$	(122,306)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	11,861		13,616
Impairment of property and equipment	248		59,940
Impairment of goodwill	—		7,124
Provision for expected credit losses, net of recoveries	(2,079)		1,728
Stock based compensation	100		777
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(2,125)		17,510
Inventories	984		2,340
Prepaid expenses and other assets	71		(3,595)
Accounts payable	24,394		18,440
Accrued expenses	13,454		3,778
Other liabilities	(38)		885
Net cash provided by operating activities	23,268		237
Cash flow from investing activities
Capital expenditures	(893)		(2,131)
Net cash used in investing activities	(893)		(2,131)
Cash flow from financing activities
Other financing activates	(251)		(3,738)
Net transfers from parent	(22,124)		5,632
Net cash provided by (used in) financing activities	(22,375)		1,894
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning period	—		—
Cash and cash equivalents, ending period	$	—	$	—
Supplemental cash flow information and non-cash investing and financing activities
Finance lease liabilities incurred from obtaining right-of-use assets	10		—
Operating lease liabilities incurred from obtaining right-of-use assets	—		1,212
Additions to goodwill related to CJWS	—		7,124
Additions to property and equipment related to CJWS	—		22,259

The accompanying notes are an integral part of these unaudited interim combined financial statements.

Exhibit 99.1

THE ACQUIRED BASIC BUSINESS

NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS

Note 1 — Business and Basis of Presentation

Description of the Business

On September 15, 2021, Ranger Energy Acquisition, LLC (“Buyer” or “Ranger”), a controlled subsidiary of Ranger Energy Services, Inc., entered into an Asset Purchase Agreement with Basic Energy Services, Inc. ( “the Parent”) and its following subsidiaries, Basic Energy Services, L.P., C&J Well Services, Inc., Taylor Industries, LLC, Breakaway Acquisition LLC and KVS Transportation, Inc, (each a “Seller” and, collectively, “Sellers” or “Basic”), pursuant to which Ranger acquired the right, title and interest of certain assets related to Basic. This transaction closed on October 1, 2021.

Basis of Presentation

The accompanying interim combined financials are unaudited. These interim combined financial statements of the Business reflect the historical financial position, results of operations, changes in parent company equity and cash flows of the Business for the periods presented as the Business was historically managed by the Parent. The interim combined financial statements have been prepared on a “carve-out” basis and are derived from the consolidated financial statements and accounting records of the Parent and its subsidiaries. The interim combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) using U.S. dollars in thousands as the reporting currency. There were no items of other combined comprehensive income during the periods presented.

The interim combined financial statements include expense allocations for certain functions provided by the Parent. These allocations were either based on direct usage when identifiable or generally based on the proportionate percentage of the Business cost of sales. Cost of sales include expense allocations related to stock-based compensation of $0.1 million and $0.8 million for the nine months ended September 30, 2021 and 2020, respectively; and selling and general administrative expenses include expense allocations related to accounting and finance, legal, information technology, human resources, corporate fleet and cash incentive plans of $18.2 million and $19.1 million for the nine months ended September 30, 2021 and 2020, respectively (refer to Note 3 — Related Party Transactions with Parent). Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to or the benefit received by the Business during the period presented for purposes of the carve-out. The allocations may not, however, reflect the expenses that the Business would have incurred as an independent stand-alone company for the period presented. Actual costs that may have been incurred if the Business had been a independent stand-alone company would depend on a number of factors, including the executive, organizational and administrative structure, equity compensation costs, professional fees costs, whether functions were outsourced or performed by employees, and other strategic decisions like merger and acquisitions and expansion in another markets.

Parent Company Equity represents the Parent’s historical investment in the Business, cumulative net losses and the net effect of transfers to and from, transactions between, and cost allocations from the Parent.

Total Parent Company Equity for the year ended December 31, 2020, reflects the contribution of certain property, equipment and goodwill contributed by the Parent to the Business, pursuant to the acquisition of C&J Well Services, Inc. ("CJWS") by the Parent on March 9, 2020. The results of operations of the Business for the periods subsequent to March 9, 2020, include the operations of the contributed CJWS property and equipment.

The Business does not have legal ownership of bank accounts. Accordingly, none of the cash and cash equivalents of the Parent have been assigned to the Business in the combined financial statements.

Exhibit 99.1

Non-recurring costs incurred by the Parent, including costs related to acquisition transaction, corporate restructuring and employee severance costs have been excluded from the combined financial statements.

Income taxes for the Business are calculated as if the Business filed tax returns on a stand-alone basis separate from the Parent.

The combined financial statements may not be indicative of the Business’ future performance and do not necessarily reflect what the financial position, results of operations and cash flows would have been had it operated as an independent stand-alone company during the periods presented.

Note 2 — Summary of Significant Accounting Policies

Significant Accounting Policies

The significant accounting policies followed by the Business are set forth in Note 2 of the combined financial statements of the Acquired Basic Business for the years ended December 31, 2020 and 2019 and are supplemented by the notes to the unaudited interim combined financial statements in this report. The unaudited interim combined financial statements in this report should be read in conjunction with the combined financial statements and notes included in the combined financial statements of the Acquired Basic Business for the years ended December 31, 2020 and 2019.

Use of Estimates

The preparation of the accompanying interim combined financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent liabilities at the date of the interim combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Areas where critical accounting estimates are made by management include impairments of goodwill and long-lived assets.

Revenue Recognition

Accounts Receivable and Allowance for Credit Losses

We estimate the allowance for credit losses on accounts receivable based on past collections and expectations for future collections. We regularly review each account receivable for collectability. After all collection efforts are exhausted, if the balance is still determined to be uncollectable, the balance is written off. Expense related to the write-off of uncollected account receivables is recorded in selling, general and administrative expense. For accounts receivable related to products and services, we estimate the expected credit losses by reviewing and monitoring updated customer credit scores and risk ratings provided by third party and internal resources, considering the future impact of the current business and industry environment, and reviewing the historical loss experience by type of customer.

Recent Accounting Pronouncements

Standards Adopted in 2020

Exhibit 99.1

early adoption permitted. We early adopted this standard on January 1, 2020, using the prospective transition method, and the standard did not have a material impact on our combined financial statements upon its adoption.

Standards Adopted in 2021

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” ("ASU 2019-12"). ASU 2019-12 intends to simplify various aspects related to accounting for income taxes and removes certain exceptions to the general principles in the standard. Additionally, the ASU clarifies and amends existing guidance to improve consistent application of its requirements. The amendments of ASU 2019-12 were adopted as of January 1, 2021, and the impact of the adoption was not material.

Note 3 — Related Party Transactions with Parent

Corporate Allocations

	Nine Months Ended September 30, 2021						Nine Months Ended September 30, 2020
	Before Allocations		Corporate allocations		After allocations		Before Allocations		Corporate allocations		After allocations
Cost of services	$	107,372	$	100	$	107,472	$	120,455	$	777	$	121,232
Selling, general and administrative	15,627		18,158		33,785		30,698		19,148		49,846
	$	122,999	$	18,258	$	141,257	$	151,153	$	19,925	$	171,078

Self-insurance agreements

The Business’ expenses associated with the Parent self-insurance programs have been allocated based on cost of sales and are reflected within selling, general and administrative expenses in the interim combined statement of operations.

Parent company investment

	Nine Months Ended September 30,
	2021		2020
Corporate allocations	$	18,258	$	19,925
Financing activities	(40,382)		(14,293)
Total net transfers from parent	$	(22,124)	$	5,632

Exhibit 99.1

Note 4 — Property and Equipment, net

Property and equipment, net include the following, in thousands:

	September 30,
	2021		2020
Service Equipment	$	142,295	$	140,847
Rental equipment	46,515		46,307
Light vehicles	19,408		19,407
Buildings and improvements	9,013		9,046
Land	7,994		8,022
Other	1,137		870
Total property and equipment	226,362		224,499
Less accumulated depreciation	112,312		93,620
Less impairment	60,188		59,940
Total property and equipment, net	$	53,862	$	70,939

The table below summarizes the gross amount of property and equipment and related accumulated amortization recorded under finance leases and included above, in thousands:

	September 30,
	2021		2020
Service equipment	$	998	$	4,669
Light vehicles	4,486		5,721
Rental equipment	464		461
	5,948		10,851
Less accumulated depreciation	(3,340)		(3,089)
Finance lease right-of-use assets, net	$	2,608	$	7,762

Note 5 — Goodwill

The following table summarizes goodwill balance, in thousands:

	Well Servicing
Balance as of January 1, 2020	$	—
Additions to goodwill	7,124
Goodwill impairment	(7,124)
Balance as of September 30, 2020	$	—

There are not additions in goodwill for the nine months ended September 30, 2021.

Exhibit 99.1

Note 6 — Accrued Expenses

Accrued expenses include the following, in thousands:

	September 30,
	2021		2020
Employee compensation and benefits	$	23,991	$	18,448
Property taxes	9,838		4,396
Sales and use taxes	306		594
Others	4,152		4,038
Total accrued expenses	$	38,287	$	27,476

Note 7 — Leases

The following table summarizes the components of the lease expense recognized for the nine months ended September 30, 2021 and 2020, respectively, in thousands:


	2021		2020
Operating lease expense:
Operating lease	$	663	$	1,022
Short term lease	561		519
Total operating lease expense	$	1,224	$	1,541
Finance lease expense:
Amortization of right of use assets	$	1,379	$	1,761
Interest on lease liabilities	311		390
Total finance lease expenses	$	1,690	$	2,151

Supplemental information related to leases was as follows:


	2021		2020
Operating leases
Weighted average remaining lease term	2.18		4.17
Weighted average discount rate	11.79	%	16.16	%
Finance leases
Weighted average remaining lease term	1.48		2.35
Weighted average discount rate	8.41	%	8.44	%

Supplemental cash flow information related to leases was as follows, in thousands:


	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	414	$	381
Financing cash outflows from finance leases	$	1,479	$	1,650

Exhibit 99.1

Future annual minimum lease payments were as follows, in thousands:

For the nine months ending September 30, 2021	Operating Leases		Finance Leases
2021	$	552	$	1,972
2022	552		1,678
2023	99		—
2024	—		—
2025	—		—
Thereafter	$	1,203	$	3,650

Note 8 — Significant Concentrations

Concentration of credit risk primarily relates to trade receivables, which arise in the normal course of business.

As of September 30, 2021, three customers represent 47% of the total Business accounts receivable balance. As of September 30, 2020, one client represented 21% of the total Business accounts receivable balance.

For the nine months ended September 30, 2021, two customers accounted for 29% or $38.1 million of the Business’ revenue. For the nine months ended September 30, 2020, there were no customers that represented more than 10% of the Business’ revenue.

Note 9 — Parent Compensation Plans

The Parent maintains management cash incentive plans, stock option awards, time-based Restricted Stock Awards, Performance-based Restricted Stock Awards and Phantom Stock Awards with selected employees.

We recognized cash incentive plan compensation expenses of $3.2 million and $3.5 million. For the nine months ended September 30, 2021, no cost was allocated from Parent. For the nine months ended September 30, 2020, $0.6 million were allocated from Parent based on cost of sales ratio.

We recognized stock-based compensation of $0.1 million and $0.7 million the nine months ended September 30, 2021 and 2020, respectively of which the whole amounts were allocated from Parent based on cost of sales ratio.

Note 10 — 401K Plan

There were not employer contributions to the Business 401(k) for the nine months ended September 30, 2021.

Employer contributions to the Business 401(k) profit sharing plan were $0.4 million for the nine months ended September 30, 2020, respectively, of which $0.1 million were allocated from Parent based on cost of sales ratio.

Note 11 — Income Taxes

The Business provides a valuation allowance when it is more likely than not that some portion of the deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Based on this evaluation, as of September 31, 2021, and 2020, a valuation allowance continues to be recorded on the net deferred tax assets for all federal and state tax jurisdictions, respectively. The Business has determined a valuation allowance is required for financial reporting purposes due to cumulative historic losses on a separate tax return basis.

Note 12 — Commitment and Contingencies

Environmental

We have not been fined, cited or notified of any environmental violations that would have a material adverse effect upon our financial position, liquidity or capital resources. However, due to the very nature of our business, material costs could be

Exhibit 99.1

incurred to maintain compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation or liabilities, the unknown timing and extent of the corrective actions which may be required, the determination of the Business’ liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification.

Litigation

Note 13 — Fair Value Measurements

	Date of Measurement	Hierarchy Level	Carrying Amount		Fair value
Well Servicing goodwill	31-Mar-20	3	$	7,124	$	—
Property and equipment	31-Mar-20	3	$	140,255	$	80,315

Note 14 — Subsequent Events

The Business has evaluated subsequent events through March 22, 2022, and has determined that there were no subsequent events that require disclosure in the interim combined financial statements.

Document

Exhibit 99.3

BASIC ENERGY SERVICES, LLC

UNAUDITED COMBINED PRO FORMA

FINANCIAL STATEMENTS

For the Year Ended

December 31, 2020

and

As of and for the Nine Months Ended

September 30, 2021

Exhibit 99.3

Introduction

On September 15, 2021, Ranger Energy Acquisition, LLC (“Buyer”), a controlled subsidiary of Ranger Energy Services, Inc. (“the Company” or “Ranger”), entered into an Asset Purchase Agreement with Basic Energy Services, Inc. (“the Parent”) and its following subsidiaries, Basic Energy Services, L.P., C&J Well Services, Inc., Taylor Industries, LLC, Breakaway Acquisition LLC and KVS Transportation, Inc, (each a “Seller” and, collectively, “Sellers” or “Basic”), pursuant to which Ranger acquired the right, title and interest of certain assets (“the Basic Assets”) related to Basic. This transaction closed on October 1, 2021.

The following unaudited combined pro forma financial information presents the unaudited combined pro forma balance sheet and statement of operations after giving effect to the business combination between Ranger and Basic.

The underlying historical financial information has been derived from:

•The unaudited interim consolidated financial statements as of and for the nine months ended September 30, 2021 and the audited consolidated financial statements as of and for the year ended December 31, 2020 of Ranger.

•The unaudited interim combined financial statements as of and for the nine months ended September 30, 2021 and the audited financial statements as of and for the year ended December 31, 2020 of the Acquired Basic Business.

Information in the unaudited combined pro forma financial statements is presented as follows:

•The unaudited combined pro forma statement of operations for the nine months ended September 30, 2021 and for the year ended December 31, 2020 includes adjustments for the acquisition of Basic as if the Basic Acquisition had been completed as of January 1, 2020.

•The unaudited combined pro forma balance sheet as of September 30, 2021 includes adjustments for the acquisition of Basic, as if the Basic Acquisition had been completed on September 30, 2021.

The unaudited pro forma financial information was prepared in accordance with Article 11 of Regulation S-X. The Basic Acquisition was accounted for using the acquisition method of accounting under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 805, Business Combinations (“ASC 805”). Accordingly, the preliminary purchase price as it relates to Basic was allocated to the assets acquired and liabilities assumed based upon management’s preliminary estimates of fair value. The determination of the final fair values is dependent upon valuations as of the acquisition date and the final adjustments to the purchase price, which when they occur may result in an adjustment to the value of the acquired assets reflected in the unaudited combined pro forma financial statements.

The unaudited combined pro forma financial statements should be read in conjunction with the accompanying notes and with:

•Unaudited interim consolidated financial statements of Ranger as of and for the nine months ended September 30, 2021 contained in the Form 10-Q filed on November 5, 2021.

•Audited consolidated financial statements of Ranger as of and for the year ended December 31, 2020, contained in the Form 10-K filed on February 26, 2021.

•Unaudited interim combined financial statements of the Acquired Basic Business as of and for the nine months ended September 30, 2021 contained in this Form 8-K/A filed on March 22, 2022.

•Audited combined financial statements of the Acquired Basic Business as of and for the year ended December 31, 2020 contained in this Form 8-K/A filed on March 22, 2022.

Exhibit 99.3

The unaudited combined pro forma financial information is presented for illustrative purposes only and does not purport to indicate that the financial condition or results of operations of future periods or the financial condition or results of operations that actually would have been realized had the Business been consummated on the dates or for the periods presented.

The unaudited combined pro forma financial statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those illustrated.

Exhibit 99.3

RANGER ENERGY SERVICES, INC.

UNAUDITED COMBINED PRO FORMA BALANCE SHEET

AS OF SEPTEMBER 30, 2021

(in millions)

	Ranger<br>(Historical)		Basic<br>(Carve Out)		Transaction Accounting Adjustments		Note Reference	Total Pro Forma
Assets
Cash and cash equivalents	$	2.8	$	—	$	4.4	(a)	$	7.2
Restricted Cash	42.0		—		(42.0)		(a)	—
Accounts receivable, net	57.6		25.3		(25.3)		(b)	57.6
Contract assets	7.8		—		—			7.8
Inventory	2.8		7.6		(7.6)		(b)	2.8
Prepaid expenses and other current assets	12.5		4.7		(4.7)		(b)	12.5
Total current assets	125.5		37.6		(75.2)			87.9
Property and equipment, net	196.8		53.9		35.6		(c)	286.3
Intangible assets, net	8.0		1.2		(1.2)		(b)	8.0
Operating leases, right-of-use assets	7.2		1.1		(1.1)		(b)	7.2
Other assets	1.4		1.8		(1.8)		(b)	1.4
Total assets	338.9		95.6		(43.7)			390.8
Liabilities and Stockholders' Equity
Accounts payable	8.7		51.8		(51.8)		(b)	8.7
Accrued expenses	32.9		38.3		(34.8)		(d)	36.4
Financing liability, current portion	2.3		—		—			2.3
Finance lease obligations, current portion	—		2.0		(0.1)		(e)	1.9
Long-term debt, current portion	35.0		—		—			35.0
Other current liabilities	45.9		0.5		(42.5)		(f)	3.9
Total current liabilities	124.8		92.6		(129.2)			88.2
Operating leases, right-of-use obligations	5.9		0.7		(0.7)		(b)	5.9
Financing liability	12.7		—		—			12.7
Finance lease obligation	—		1.6		0.4		(e)	2.0
Long-term debt, net	16.3		—		—			16.3
Other long-term liabilities	3.3		—		10.8		(g)	14.1
Total liabilities	163.0		94.9		(118.7)			139.2
Commitments and contingencies	—		—		—			—
Controlling stockholders' equity	114.4		0.7		46.2		(h)	161.3
Noncontrolling interest	61.5		—		28.8		(i)	90.3
Total stockholders' equity	175.9		0.7		75.0			251.6
Total liabilities and stockholders' equity	$	338.9	$	95.6	$	(43.7)		$	390.8

The accompanying notes are an integral part of the unaudited combined pro forma financial statements

Exhibit 99.3

RANGER ENERGY SERVICES, INC.

UNAUDITED COMBINED PRO FORMA STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

(in millions, except share and per share amounts)

	Ranger (Historical)		Basic<br> (Carve Out)		Transaction Accounting Adjustments		Note Reference	Total <br>Pro Forma
Revenues	$	170.0	$	130.1	$	—		$	300.1
Operating expenses
Cost of services	152.2		107.5		(0.1)		(a)	259.6
General and administrative	16.8		33.8		(18.2)		(a)	32.4
Depreciation and amortization	24.9		11.9		(4.1)		(b)	32.7
Impairment	—		0.2		(0.2)		(c)	—
Total operating expenses	193.9		153.4		(22.6)			324.7
Operating loss	(23.9)		(23.3)		22.6			(24.6)
Other expenses
Interest expense, net	2.5		0.3		(0.2)		(d)	2.6
Total other expenses	2.5		0.3		(0.2)			2.6
Loss before income tax expense	(26.4)		(23.6)		22.8			(27.2)
Tax expense	0.1		—		—			0.1
Net loss	(26.5)		(23.6)		22.8			(27.3)
Less: Net loss attributable to noncontrolling interests	(10.7)		—		(0.3)		(e)	(11.0)
Net loss attributable to Ranger Energy Services, Inc.	$	(15.8)	$	(23.6)	$	23.1		$	(16.3)
Net loss per share
Basic	(1.63)		—		—			(1.68)
Diluted	(1.63)		—		—			(1.68)
Weighted Average Shares Outstanding
Basic	9,714,508		—		—			9,714,508
Diluted	9,714,508		—		—			9,714,508

The accompanying notes are an integral part of the unaudited combined pro forma financial statements

Exhibit 99.3

RANGER ENERGY SERVICES, INC.

UNAUDITED COMBINED PRO FORMA STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2020

(in millions, except share and per share amounts)

	Ranger (Historical)		Basic (Carve Out)		Transaction Accounting Adjustments		Note Reference	Total Pro Forma
Revenues	$	187.8	$	169.4	$	—		$	357.2
Operating expenses
Cost of services	147.9		156.7		(1.0)		(a)	303.6
General and administrative	22.1		63.6		(23.6)		(a)	62.1
Depreciation and amortization	35.0		20.6		(10.2)		(b)	45.4
Impairment	—		67.1		(67.1)		(c)	—
Gain on debt retirement	(2.1)		—		—			(2.1)
Total operating expenses	202.9		308.0		(101.9)			409.0
Operating loss	(15.1)		(138.6)		101.9			(51.8)
Other expenses
Interest expense, net	3.4		0.4		(0.4)		(d)	3.4
Gain on bargain purchase	—		—		(37.2)		(e)	(37.2)
Total other expenses	3.4		0.4		(37.6)			(33.8)
Loss before income tax expense	(18.5)		(139.0)		139.5			(18.0)
Tax (benefit) expense	—		—		—			—
Net loss	(18.5)		(139.0)		139.5			(18.0)
Less: Net loss attributable to noncontrolling interests	(8.2)		—		0.2		(f)	(8.0)
Net loss attributable to Ranger Energy Services, Inc.	$	(10.3)	$	(139.0)	$	139.3		$	(10.0)
Net loss per share
Basic	(1.21)		—		—			(1.15)
Diluted	(1.21)		—		—			(1.15)
Weighted Average Shares Outstanding
Basic	8,532,923		—		—			8,532,923
Diluted	8,532,923		—		—			8,532,923

The accompanying notes are an integral part of the unaudited combined pro forma financial statements

Exhibit 99.3

Note 1 — Description of Transaction

On September 15, 2021, Ranger acquired from Basic the right, title and interest of the Basic Assets for $36.7 million in cash, subject to normal closing adjustments and assumed liabilities in exchange for the Basic Assets. The closing date was October 1, 2021.

As a consideration paid, on October 1, 2021, Ranger consummated the private placement under the Securities Purchase Agreement, dated September 10, 2021, with certain accredited investors of 6.0 million newly issued shares of Series A Convertible Preferred Stock, par value $0.01 per share, in exchange for cash consideration in an aggregate amount of $42.0 million. The Preferred Stock will automatically convert into shares of the Company’s Class A Common Stock, par value $0.01 per share following receipt of Stockholder Approval and effectiveness of the Registration Statement.

Note 2 — Basis of Presentation

The unaudited combined pro forma financial information has been prepared to give effect to the Basic Acquisition. The unaudited combined pro forma financial information has been derived from historical financial statements of Ranger and Basic.

Ranger’s consolidated financial information has been prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”) as issued by the Financial Accounting Standards Board (“FASB”). Basic’s combined financial information has been prepared in accordance with GAAP.

The unaudited combined pro forma financial information was prepared in accordance with Article 11 of Regulation S-X. The Basic Acquisition was accounted for as using the acquisition method of accounting under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 805, Business Combinations (“ASC 805”). Management utilized their best estimates and assumptions to assign preliminary fair value to the assets acquired and liabilities assumed at the acquisition date. The determination of the final fair values and purchase price allocation is based on preliminary estimates and subject to final adjustments. Such adjustments could be material.

The unaudited combined pro forma balance sheet as of September 30, 2021, has been prepared assuming that Basic Acquisition was consummated at that date. There are no significant transactions to be reflected in the historical financial information between September 30, 2021 and October 1, 2021.

Information in the unaudited combined pro forma financial statements is presented as follows:

•The unaudited combined pro forma balance sheet as of September 30, 2021 includes adjustments for the acquisition of Basic, as if the Basic Acquisition had been completed on September 30, 2021.

The column “Basic carve out” reflects the historical carve out results of the Acquired Basic Business as presented elsewhere in this Form 8-K/A.

The historical financial information has been adjusted to give effect to transaction accounting adjustments that are necessary to account for the acquisition. The transaction accounting adjustments are based on currently available information and certain estimates and assumptions and therefore the actual effects of these transactions will differ from the pro forma adjustments. The unaudited combined pro forma financial information has been compiled in a manner consistent with the accounting policies of Ranger. All material adjustments required to reflect the Basic Acquisition are set forth in the column labeled in “Transaction Accounting Adjustments.”

The unaudited combined pro forma financial information is provided for illustrative purposes only and does not purport to represent what the actual results of operations or the financial position of the Company would have been had the acquisition occurred on the dates assumed, nor are they necessarily indicative of future results of operations or financial position.

Exhibit 99.3

Note 3 — Preliminary Purchase Price Allocation and Consideration Transferred

All assets associated with the Basic Acquisition, were recorded at their fair value based on a preliminary purchase price allocation. The Company used the market approach to value as of the closing date, October 1, 2021, to apply fair values to the assets purchased based on the selling price of similar assets. As a result of comparing the purchase price to the fair value of the assets acquired, a $48.0 million bargain purchase gain was recognized. A bargain purchase gain of $48.0 million is included in “Other expenses (income)” in the combined pro forma statements of operations for the year ended December 31, 2020. The bargain purchase gain is primarily attributable Basic’s distressed financial position and lack of financing options available to avoid liquidation.

The following table presents the fair value of assets acquired and liabilities assumed in accordance with ASC 805 (in millions):

Property and equipment	$	89.5
Total assets acquired	89.5
Finance lease obligations	3.9
Bargain purchase deferred tax liability	10.8
Total liabilities assumed	14.7
Net assets acquired	74.8
Bargain purchase	37.2
Purchase price	$	37.6

Note 4 — Unaudited combined pro forma balance sheet adjustments and assumptions

a.Reflects $37.6 million of consideration paid and the reclassification of restricted cash to cash and cash equivalents of $4.4 million.

b.Reflects the exclusion of historical assets and liabilities not assumed as part of the Basic Acquisition.

c.Reflects the step-up fair value adjustment of property and equipment.

d.Reflects the exclusion of $38.3 million of accrued liabilities not assumed as part of the Basic Acquisition and the adjustment to accrue additional transaction costs of $3.5 million incurred by the Company subsequent to September 30, 2021.

e.Reflects the exclusion of $3.6 million of finance lease obligations assumed as part of the Basic Acquisition and additions of $3.9 million related to finance lease liabilities assumed as part of the Asset Purchase Agreement.

f.Reflects the reclassification of $42 million related to the 6.0 million newly issued shares of Series A Preferred Stock from other current liabilities to preferred stocks in controlling stockholders’ equity and exclusion of $0.5 million of operating lease obligations not assumed as part of the Basic Acquisition.

g.Reflects the deferred tax liability related to the bargain purchase.

h. Reflects adjustments to Controlling Stockholders’ Equity as follows (in millions):

Elimination of Carve out Basic Stockholders’ Equity	$	(0.7)
Transaction adjustments
Transaction costs	(3.5)
Preferred Stocks (f)	42.0
Gain on bargain purchase	37.2
Other
Non-controlling interest adjustment	(28.8)
Total	$	46.2

Exhibit 99.3

i. Reflects the adjustment non-controlling interest.

Note 5 — Unaudited combined pro forma statements of operations adjustments and assumptions for the

Nine Months Ended September 30, 2021

a.Reflects the exclusion of $18.3 million of corporate cost allocated from Parent to the Basic carve out.

b.Reflects the exclusion of depreciation and amortization of $11.9 related to the Basic carve out and the recognition of the nine months amortization of $7.8 million related to the property and equipment acquired in the Asset Purchase Agreement.

c.Reflects the exclusion of impairment and other charges related to the Basic carve out.

d.Reflects the exclusion of interest expenses of $0.3 related to the Basic carve out and the recognition of the nine months interest expense of $0.1 million related to the finance leases acquired in the Asset Purchase Agreement.

e.Reflect the impact to net loss attributable to non-controlling interests due to the operations of Basic.

Note 6 — Unaudited combined pro forma statements of operations adjustments and assumptions for the

Year Ended December 31, 2020

a.Reflects the exclusion of $28.1 million of corporate cost allocated from Parent to the Basic carve out and the adjustment to accrue additional transaction costs of $3.5 million.

b.Reflects the exclusion of depreciation and amortization of $20.6 related to the Basic carve out and the recognition of the amortization of $10.4 million related to the property and equipment acquired in the Asset Purchase Agreement.

c.Reflects the exclusion of impairment and other charges related to the Basic carve out.

d.Reflects the exclusion of interest expenses of $0.4 related to the Basic carve out and the recognition of interest expense of $0.1 million related to the finance leases acquired in the Asset Purchase Agreement.

e.Reflects the bargain purchase gain.

f.Reflect net gain attributable to non-controlling interests.