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What changed in Smart Sand, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Smart Sand, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+429 added−413 removedSource: 10-K (2026-02-26) vs 10-K (2025-03-04)

Top changes in Smart Sand, Inc.'s 2025 10-K

429 paragraphs added · 413 removed · 342 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

84 edited+17 added−32 removed120 unchanged
Biggest changeWhile resources invested in securing permits are significant, this cost has not had a material adverse effect on our results of operations or financial condition. We cannot ensure that existing environmental, health and safety (“EHS”) laws and regulations will not be reinterpreted or revised or that new EHS laws and regulations will not be adopted or become applicable to us.
Biggest changeWe cannot ensure that existing environmental, health and safety (“EHS”) laws and regulations will not be reinterpreted or revised or that new EHS laws and regulations will not be adopted or become applicable to us. Revised or additional EHS requirements that result in increased compliance costs or additional operating restrictions could have a material adverse effect on our business.
We completed an expansion of our IPS processing at our Ottawa, Illinois plant in the fourth quarter of 2023 to provide blending and cooling capabilities to increase our product offerings in the industrial marketplace. SmartSystems Segment We provide wellsite proppant handling solutions services and equipment under flexible contract terms custom tailored to meet the needs of our customers.
We completed an expansion of our IPS processing equipment at our Ottawa, Illinois plant in the fourth quarter of 2023 to provide blending and cooling capabilities to increase our product offerings in the industrial marketplace. SmartSystems Segment We provide wellsite proppant handling solutions services and equipment under flexible contract terms custom tailored to meet the needs of our customers.
Through our SmartSystems wellsite proppant storage solutions, we offer the SmartDepot and SmartDepotXL silo systems, the SmartBelt conveyor, the SmartPath wellsite proppant management system, and our rapid deployment trailers. The SmartDepot silos feature passive and active dust suppression technology and support gravity-fed operation.
Through our SmartSystems wellsite proppant storage solutions, we offer the SmartDepot and SmartDepotXL silo systems, the SmartBelt conveyor, the SmartPath wellsite proppant management system, and our rapid deployment trailers. The SmartDepot silos feature passive and active dust suppression technology and support gravity-fed operation.
We also increased our silo storage capacity and streamlined proppant delivery directly to the blender. This addition provides greater flexibility for customers with varying wellsite configurations while maintaining the efficiency, safety, and reliability that define our SmartSystems solutions. Our rapid deployment trailers are designed for quick setup, takedown, and transportation of the entire SmartSystem.
We also increased our silo storage capacity and streamlined proppant delivery directly to the blender. This addition provides greater flexibility for customers with varying wellsite configurations while maintaining the efficiency, safety, and reliability that define our SmartSystems solutions. Our rapid deployment trailers are designed for quick setup, takedown, and transportation of the entire SmartSystem.
These consumption patterns are influenced by numerous factors, including, among other things, the price for oil and natural gas and hydraulic fracturing activity, including the number of stages completed per well, the lateral length of horizontal wells being completed, and the amount of proppant used per stage.
These consumption patterns are influenced by numerous factors, including, among other things, the price for oil and natural gas, hydraulic fracturing activity, including the number of stages completed per well, the lateral length of horizontal wells being completed, and the amount of proppant used per stage.
Mr. Whelan has over 20 years of entrepreneurial experience in mining, technology and renewable energy industries. Mr. Whelan received a B.A. in Marketing from Bloomsburg University and M.S. in Instructional Technology from Bloomsburg University. 20 James D. Young James D. Young was named Executive Vice President, General Counsel and Secretary in June 2017. Prior to joining us, Mr.
Mr. Whelan has over 20 years of entrepreneurial experience in mining, technology and renewable energy industries. Mr. Whelan received a B.A. in Marketing from Bloomsburg University and M.S. in Instructional Technology from Bloomsburg University. James D. Young James D. Young was named Executive Vice President, General Counsel and Secretary in June 2017. Prior to joining us, Mr.
In addition, the trend in environmental regulation is to place more restrictions on activities that may affect the environment, and thus, any changes in, or more stringent enforcement of, these laws and regulations that result in more stringent and costly pollution control equipment, the occurrence of delays in the permitting or performance of projects, or waste handling, storage, transport, disposal or remediation requirements could have a material adverse effect on our operations and financial position.
In addition, the trend in environmental regulation is to place more restrictions on activities that may affect the environment, and thus, any changes in, or more stringent enforcement of, these laws and regulations that result in more stringent and costly pollution 15 control equipment, the occurrence of delays in the permitting or performance of projects, or waste handling, storage, transport, disposal or remediation requirements could have a material adverse effect on our operations and financial position.
In September 2024, the Company entered into a $30.0 million five-year senior secured asset-based credit facility with First-Citizens Bank & Trust Company. The FCB ABL Credit Facility provides for non-amortizing revolving loans in an aggregate principal amount of up to $30.0 million, subject to a borrowing base comprised of eligible inventory and accounts receivable.
In September 2024, the Company entered into a $30.0 million five-year senior secured asset-based credit facility with First-Citizens Bank & Trust Company. The FCB ABL Credit Facility provides for non-amortizing revolving loans in an aggregate principal amount of up to $30.0 million, subject to a borrowing base 12 comprised of eligible inventory and accounts receivable.
We sell frac sand under long-term take-or-pay contracts as well as in the spot market, and provide proppant logistics solutions through our in-basin transloading terminals and SmartSystems wellsite proppant storage solutions and other logistics services. Generally, customers under long-term take-or-pay contracts are required to take minimum volumes of sand or make shortfall payments for a specified period of time.
We sell frac sand under short- and long-term take-or-pay contracts as well as in the spot market, and provide proppant logistics solutions through our in-basin transloading terminals and SmartSystems wellsite proppant storage solutions and other logistics services. Generally, customers under take-or-pay contracts are required to take minimum volumes of sand or make shortfall payments for a specified period of time.
It is possible that other climate-related reporting regulations applicable to many U.S. companies will continue to take effect. 16 Water Discharges The Clean Water Act (“CWA”) and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into state waters or waters of the United States.
It is possible that other climate-related reporting regulations applicable to many U.S. companies will continue to take effect. Water Discharges The Clean Water Act (“CWA”) and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into state waters or waters of the United States.
In September 2020, we acquired our Ottawa, Illinois mine and processing facility, which has annual processing capacity of approximately 1.6 million tons and access to the Burlington Northern Santa Fe Class I rail line through the Peru, Illinois transload facility, as well as rights to use a rail terminal located in El Reno, Oklahoma.
In September 2020, we acquired our Ottawa, Illinois mine and processing facility, which has annual processing capacity of approximately 1.6 million tons and access to the Burlington Northern Santa Fe Class I rail line through the nearby Peru, Illinois transload facility, as well as rights to use a rail terminal located in El Reno, Oklahoma.
Through the addition of new origination and destination options, we continue evaluating ways to reduce the landed cost of our products in-basin and to the wellsite for our customers while increasing our customized service offerings to provide our customers with additional delivery and pricing alternatives. • Focusing on organic growth by increasing the utilization of our mine and frac sand processing facilities.
Through the addition of new origination and destination options, we continue evaluating ways to reduce the landed cost of our products in-basin and to the wellsite for our customers while increasing our customized service offerings to provide our customers with additional delivery and pricing alternatives. 10 • Focusing on organic growth by increasing the utilization of our mine and frac sand processing facilities.
We believe our three sand mines in Oakdale, Wisconsin, Ottawa, Illinois and Blair, Wisconsin have a uniquely desirable combination of large high-quality reserves of fine mesh sand that is contiguous to their production and primary rail loading facilities that are either on site or are in close proximity to the mines.
We believe our three active sand mines in Oakdale, Wisconsin, Ottawa, Illinois and Blair, Wisconsin have a uniquely desirable combination of large high-quality reserves of fine mesh sand that is contiguous to their production and primary rail loading facilities that are either on site or are in close proximity to the mines.
We also believe that having our mines, processing facilities and primary rail loading facilities in close proximity provides us with an overall low-cost structure, which enables us to compete effectively for sales of Northern White frac sand and to achieve attractive operating margins. • Intrinsic logistics advantage.
We also believe that having our mines, 11 processing facilities and primary rail loading facilities in close proximity provides us with an overall low-cost structure, which enables us to compete effectively for sales of Northern White frac sand and to achieve attractive operating margins. • Intrinsic logistics advantage.
Demand for frac sand and logistics solutions and the prices that we will be able to obtain for our products, to the extent not subject to a fixed price or take-or-pay contract, are closely linked to proppant consumption patterns for the completion of oil and natural gas wells in North America.
Demand for frac sand and logistics solutions and the prices that we will be able to obtain for our products, to the extent not subject to a fixed price or take-or-pay contract, are closely linked to 14 proppant consumption patterns for the completion of oil and natural gas wells in North America.
We expect to continue to expand and diversify to serve the vital industrial markets throughout North America, including glass, 9 foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, recreation and more. • Expanding and optimizing our existing logistics infrastructure and developing additional origination and destination points.
We expect to continue to expand and diversify to serve the vital industrial markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, recreation and more. • Expanding and optimizing our existing logistics infrastructure and developing additional origination and destination points.
After several expansions our current annual processing capacity at our Oakdale facility is approximately 5.5 million tons. This facility has access to both the Canadian Pacific Class I rail network (through an onsite, unit train capable rail facility) and the Union Pacific Class I rail network (through the Byron, Wisconsin transload facility).
After several expansions our current annual processing capacity at our Oakdale facility is approximately 5.5 million tons. This facility has access to both the Canadian Pacific Class I rail network (through an onsite, unit train capable rail facility) and the Union Pacific Class I rail network (through the nearby Byron, Wisconsin transload facility).
Harm under the ESA includes acts that actually kill or injure wildlife as well as significant habitat modification or degradation that significantly 17 impairs essential behavioral patterns, including breeding, feeding or sheltering . Take prohibitions also protect migratory birds under the Migratory Bird Treaty Act (“MBTA”).
Harm under the ESA includes acts that actually kill or injure wildlife as well as significant habitat modification or degradation that significantly impairs essential behavioral patterns, including breeding, feeding or sheltering . Take prohibitions also protect migratory birds under the Migratory Bird Treaty Act (“MBTA”).
To address the hazards inherent in our business, we maintain insurance coverage that includes physical damage coverage, third-party general liability insurance, employer’s liability, business interruption, environmental and pollution and other coverage, although coverage for 15 environmental and pollution-related losses is subject to significant limitations.
To address the hazards inherent in our business, we maintain insurance coverage that includes physical damage coverage, third-party general liability insurance, employer’s liability, business interruption, environmental and pollution and other coverage, although coverage for environmental and pollution-related losses is subject to significant limitations.
Young, our Chief Executive Officer and member of our board of directors, and James D. Young, our Executive Vice President, General Counsel and Secretary. Robert Kiszka Robert Kiszka was named Executive Vice President of Operations in May 2014. Previously, Mr. Kiszka served as the Vice President of Operations from September 2011 to May 2014. Mr.
Young, our Chief Executive Officer and member of our board of directors, and James D. Young, our Executive Vice President, General Counsel and Secretary. 19 Robert Kiszka Robert Kiszka was named Executive Vice President of Operations in May 2014. Previously, Mr. Kiszka served as the Vice President of Operations from September 2011 to May 2014. Mr.
This access to two Class I rail carriers from Oakdale provides increased delivery options for our customers, greater competition between our rail carriers and potentially lower freight costs.
This access to two Class I rail carriers from Oakdale provides increased delivery options from our Oakdale site for our customers, greater competition between our rail carriers and potentially lower freight costs.
We operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin. The Van Hook terminal became operational in April 2018. In 2020, as part of our acquisition of the Ottawa, Illinois mining facility, we obtained rights to use a rail terminal located in El Reno, Oklahoma.
We operate a unit train capable transloading terminal in Van Hook, North Dakota, which became operational in April 2018, to service the Bakken Formation in the Williston Basin. In September 2020, as part of our acquisition of the Ottawa, Illinois mining facility, we obtained rights to use a rail terminal located in El Reno, Oklahoma.
We also operate several terminals throughout the United States, including a multiple unit train capable transloading terminal in Van Hook, North Dakota, which we believe allows us to be one of the most efficient and low-cost sources of frac sand in the Bakken Formation in the Williston Basin.
We also operate several terminals throughout the United States, including a multiple unit train capable transloading terminal in Van Hook, North Dakota, which we believe allows us to be one of the most efficient and low-cost sources of Northern White frac sand in the Bakken Formation in the Williston Basin.
Our transportation assets at Oakdale have access to two Class I rail lines owned by Canadian Pacific and Union Pacific. We believe our customized on-site logistical configuration yields lower operating and transportation costs of product to our customers between the mine and in basin destinations.
Our transportation assets at Oakdale have access to two Class I rail lines, the Canadian Pacific and Union Pacific. We believe our customized on-site logistical configuration yields lower operating and transportation costs of product to our customers between the mine and in basin destinations.
Although some of our competitors may have greater financial or natural resources than we do, we believe that we are well-positioned competitively due to our low cost of sand production, low debt levels, logistics infrastructure, high-quality, balanced reserve profile and patented SmartSystems wellsite proppant storage solutions, which offer numerous benefits over our competition.
Although some of our competitors may have greater financial or natural resources than we do, we believe that we are well-positioned competitively due to our low cost of sand production, low debt levels, logistics infrastructure, high-quality, balanced reserve profile, service capabilities, transportation capabilities, and patented SmartSystems wellsite proppant storage solutions, which offer numerous benefits over our competition.
Our Waynesburg, Pennsylvania terminal, which services the Appalachian Basins, including the Marcellus and Utica Formations, became operational in January 2022 and was expanded in the fourth quarter of 2023. We believe this terminal allows us to be one of the most efficient and low-cost sources of frac sand in the Appalachian Basin.
Our Waynesburg, Pennsylvania terminal, which services the Appalachian Basin, including the Marcellus and Utica Formations, became operational in January 2022 and was expanded in the fourth quarter of 2023. We believe this terminal allows us to be one of the most efficient and low-cost sources of Northern White frac sand in the Appalachian Basin.
Please read “Risk Factors—Risks Inherent in Our Business—We face significant competition that may cause us to lose market share.” There are numerous large and small producers in all sand producing regions of North America with whom we compete, many of which also offer solutions for unloading, storing and delivering proppant to the wellsite.
Competition The proppant industry is highly competitive. Please read “Risk Factors—Risks Inherent in Our Business—We face significant competition that may cause us to lose market share.” There are numerous large and small producers in all sand producing regions of North America with whom we compete, many of which also offer solutions for unloading, storing and delivering proppant to the wellsite.
We also offer our customers portable wellsite storage and management solutions through our 8 SmartSystems products and services. Our Smart Systems enable customers to unload, store, and deliver proppant at the wellsite and rapidly set up, take down, and transport the entire system. This capability enhances our customers’ efficiency, safety, and reliability.
We offer our customers portable wellsite storage and management solutions through our 8 SmartSystems products and services. Our SmartSystems enable customers to unload, store, and deliver proppant at the wellsite and rapidly set up, take down, and transport the entire system. This capability enhances our customers’ efficiency, safety, and reliability.
Our Ottawa mine and nearby Peru transloading terminal in Illinois provides us direct access to another Class I rail line with direct access to the Burlington Northern Santa Fe Class I rail line.
Our Ottawa mine and nearby Peru transloading terminal in Illinois provides us with access to another Class I rail line, the Burlington Northern Santa Fe railroad.
Please read “Risk Factors—Risks Inherent in Our Business—A substantial majority of our revenues have been generated under contracts with a limited number of customers, and the loss of, material nonpayment or nonperformance by or significant reduction in purchases by any of them could adversely affect our business, results of operations and financial condition.” Capital Plans We expect 2025 capital expenditures to be between $13.0 million and $17.0 million, consisting primarily of capital for efficiency projects at our mine and processing facilities and our in-basin terminals, along with investments in our facilities to support incremental IPS activity.
Please read “Risk Factors—Risks Inherent in Our Business—A substantial majority of our revenues have been generated under contracts with a limited number of customers, and the loss of, material nonpayment or nonperformance by or significant reduction in purchases by any of them could adversely affect our business, results of operations and financial condition.” Capital Plans We expect 2026 capital expenditures to be between $15.0 million and $20.0 million, consisting primarily of capital for efficiency projects at our mine and processing facilities and our in-basin terminals, along with investments in our facilities to support incremental IPS activity.
Our self-contained SmartPath wellsite proppant management system is a mobile sand transloading solution that works with bottom-dump trailers. These systems include a drive-over conveyor, surge bin, silo storage, bucket elevators, and integrated dust collection. In 2024, we developed new dual bucket elevators to enhance our vertical material handling capabilities.
Our self-contained SmartPath wellsite proppant management system is a mobile sand transloading solution that works with bottom-dump trailers. These systems include a drive-over conveyor, surge bin, silo storage, bucket elevators, and integrated dust collection. We have recently developed new dual bucket elevators to enhance our vertical material handling capabilities.
For the year ended December 31, 2023, Equitable Gas Corporation and Liberty Oilfield Services accounted for 30.2% and 11.4%, respectively, of our total revenues, and the remainder of our revenues were from 72 customers.
For the year ended December 31, 2023, EQT Corporation and Liberty Oilfield Services accounted for 30.2% and 11.4%, respectively, of our total revenues, and the remainder of our revenues were from 72 customers.
As of December 31, 2024, we had cash on hand of $1.6 million and undrawn availability under the FCB ABL Credit Facility of $30.0 million and no outstanding borrowings. The FCB ABL Credit Facility matures in September 2029. Our total available liquidity among cash and available borrowings was $31.6 million as of December 31, 2024. • Experienced management team.
As of December 31, 2025, we had cash on hand of $22.6 million and undrawn availability under the FCB ABL Credit Facility of $30.0 million and no outstanding borrowings. The FCB ABL Credit Facility matures in September 2029. Our total available liquidity among cash and available borrowings was $52.6 million as of December 31, 2025. • Experienced management team.
For the year ended December 31, 2024, Equitable Gas Corporation, Encino Energy and Liberty Oilfield Services, accounted for 31.9%, 13.8% and 10.2%, respectively, of total revenue, and the remainder of our revenues were from 82 customers.
For the year ended December 31, 2024, EQT Corporation, Encino Energy, and Liberty Oilfield Services accounted for 31.9%, 13.8% and 10.2%, respectively, of our total revenues, and the remainder of our revenues were from 82 customers.
While our dry plants are able to process finished product volumes evenly throughout the year, our excavation and our wet sand processing activities have historically been limited to primarily non-winter months.
While our dry plants are able to process finished product volumes evenly throughout the year, our excavation and our wet sand processing activities at some of our mines have historically been limited to primarily non-winter months.
While we are not aware of any misstatements regarding the proppant industry data presented herein, estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors.” Demand Trends Demand for frac sand continued to moderately increase during 2024.
While we are not aware of 13 any misstatements regarding the proppant industry data presented herein, estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors.” Demand Trends Demand for frac sand declined moderately during 2025.
The dunes sagebrush lizard is found in the active and semi-stable shinnery oak dunes of southeastern New Mexico and adjacent portions of Texas, including areas where our customers operate and our frac sand facilities may be located. On May 20, 2024, the United States Fish and Wildlife Service (“USFWS”) listed the dunes sagebrush lizard as an endangered species.
The dunes sagebrush lizard is found in the active and semi-stable shinnery oak dunes of southeastern New Mexico and adjacent portions of Texas, including areas where some of our customers operate. On May 20, 2024, the United States Fish and Wildlife Service (“USFWS”) listed the dunes sagebrush lizard as an endangered species.
Depending on the particular program, we could be required to monitor, report, or control GHG emissions or to purchase and surrender allowances for GHG emissions resulting from our operations. Independent of Congress, the U.S. Environmental Protection Agency (“EPA”) has adopted regulations controlling GHG emissions under its existing authority.
Depending on the particular program, we could be required to monitor, report, or control GHG emissions or to purchase and surrender allowances for GHG emissions resulting from our operations. Independent of Congress, the U.S. Environmental Protection Agency (“EPA”) has adopted regulations controlling GHG emissions under its existing authority predicated on a finding that GHG emissions are harmful to human health.
Our most recent annual report required under the Tier 1 protocol was submitted to the Green Tier Program contact on May 31, 2024. 19 Employees As of December 31, 2024, we employed 285 people, of which 25 were employed under a collective bargaining agreement. The current collective bargaining agreements expire April 30, 2027.
Our most recent annual report required under the Tier 1 protocol was submitted to the Green Tier Program contact in April 2025. Employees As of December 31, 2025, we employed 318 people, of which 31 were employed under a collective bargaining agreement. The current collective bargaining agreements expire April 30, 2027.
We market our products and services to oil and natural gas exploration and production companies, oilfield service companies and industrial manufacturers.
We market our products and services to oil and natural gas exploration and production companies, oilfield service companies and diversified industrial and commercial customers.
Supply and demand for Northern white frac sand was relatively in balance in 2023 and 2024 and this is expected to continue in 2025. Supplies of high-quality Northern White frac sand are limited to select areas, predominantly in western Wisconsin and limited areas of Minnesota and Illinois.
Supply and demand for Northern white frac sand was relatively in balance from 2023 to 2025. Supplies of high-quality Northern White frac sand are limited to select areas, predominantly in western Wisconsin and limited areas of Minnesota, Illinois and Missouri.
In turn the operations of our customers in any area that is designated as the dunes sagebrush lizard’s habitat may be limited, delayed or, in some circumstances, prohibited, and our customers could be required to comply with expensive conservation measures intended to protect the dunes sagebrush lizard and its habitat.
In turn the operations of our customers in any area that is designated as the dunes sagebrush lizard’s habitat may be limited, delayed or, in some circumstances, prohibited, and our customers could be required to comply with expensive conservation measures intended to protect the dunes sagebrush lizard and its habitat. 17 Another species whose recent listing could impact our operations and the operations of our customers is the lesser prairie-chicken.
Our El Reno, Oklahoma terminal provides us with the flexibility to send sand to the Woodford and SCOOP/STACK Basins as it is needed by our customers. Additionally, our SmartSystems wellsite storage and proppant management systems allow us to offer expanded logistics services to our customers.
In September 2025, we completed an expansion of the Dennison, Ohio terminal. Our El Reno, Oklahoma terminal provides us with the flexibility to send sand to the Woodford and SCOOP/STACK Basins as it is needed by our customers. Additionally, our SmartSystems wellsite storage and proppant management systems allow us to offer expanded logistics services to our customers.
We also offer proppant logistics solutions to our customers through our in-basin transloading terminals and our SmartSystems TM wellsite proppant storage capabilities. In late 2021, we created our Industrial Products Solutions (“IPS”) business in order to diversify our customer base and markets we serve by offering sand for industrial uses.
We also offer proppant logistics solutions to our customers through our in-basin transloading terminals and our SmartSystems TM wellsite proppant storage capabilities. In recent years, we have expanded our product line to offer Industrial Products Solutions (“IPS”) in order to diversify our customer base and markets we serve by offering sand for industrial uses.
In late 2021, we started our IPS business to provide sand to customers for various industrial applications, such as glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation.
We completed an expansion of this terminal in the third quarter of 2025. In late 2021, we started our IPS business to provide sand to customers for various industrial applications, such as glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation.
As of December 31, 2024, we have an estimated life of mine of approximately 60 years at Oakdale, 105 years at Ottawa, and 56 years at Blair, based on our current expected sales volumes.
As of December 31, 2025, we have an estimated life of mine of approximately 71 years at Oakdale, 149 years at Ottawa, and 67 years at Blair, based on our current expected sales volumes.
Our main competitors include Badger Mining Corporation, HC Minerals, Inc., Covia Holdings Corporation, U.S. Silica Holdings, Inc., Capital Sand Company, Source Energy Services and Solaris Energy Infrastructure, Inc.
Our main competitors include Badger Mining Corporation, Iron Oak Energy Solutions, LLC, U.S. Silica Holdings, Inc., Capital Sand Company, Source Energy Services and Solaris Energy Infrastructure, Inc.
Federal and state regulatory agencies can impose administrative, civil and criminal penalties as well as other enforcement mechanisms for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulations. Hydraulic Fracturing We supply frac sand to hydraulic fracturing operators in the oil and natural gas industry.
Federal and state regulatory agencies can impose administrative, civil and criminal penalties as well as other enforcement mechanisms for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulations. 16 Hydraulic Fracturing We supply frac sand to exploration and production companies and oil field service companies that utilize hydraulic fracturing to complete new oil and natural gas wells.
Industry Trends Impacting Our Business Unless otherwise indicated, the information set forth under this section, including all statistical data and related forecasts, is derived from Spears’ “Hydraulic Fracturing Market - Q4 2024” published in the first quarter of 2025.
Industry Trends Impacting Our Business Unless otherwise indicated, the information set forth under this section, including all statistical data and related forecasts, is derived from Spears’ “North American Proppant Market” published in the first quarter of 2026.
President Trump also declared a “national energy emergency,” directing agencies to expedite conventional energy projects. While the extent of the Trump Administration’s changes to the environmental regulatory landscape in the United States is unknown at this time, it is possible that additional changes in the future could impact our results of operation and those of our customers.
While the extent of the Trump Administration’s changes to the environmental regulatory landscape in the United States is unknown at this time, it is possible that additional changes in the future could impact our results of operation and those of our customers.
We believe that coupling our premium proppant with long-term sustainable logistics supply services may mitigate the potential cost savings of using regional sand. Demand for frac sand has continued to moderately increase during 2024. According to Spears and Associates, Inc. (“Spears”), North America proppant demand increased by 7% in 2024 compared to 2023, mirroring an improving hydraulic fracturing market.
We believe that coupling our premium proppant with long-term sustainable logistics supply services may mitigate the potential cost savings of using regional sand. Demand for frac sand declined moderately during 2025. According to Spears and Associates, Inc. (“Spears”), North America proppant demand decreased by approximately 2% compared to 2024.
On January 20, 2025, President Trump issued a series of executive orders and memoranda signaling a shift in environmental and energy policy in the United States, including the revocation of approximately 80 Biden-era executive orders related to public health, the environment, climate change and climate-related financial risks.
President Trump has issued a series of executive orders and memoranda signaling a shift in environmental and energy policy in the United States, including the revocation of approximately 80 Biden-era executive orders related to public health, the environment, climate change and climate-related financial risks. President Trump also declared a “national energy emergency,” directing agencies to expedite conventional energy projects.
Since 2016, Smart Sand has maintained International Organization for Standardization (“ISO”) ISO 9001 and ISO 14001 registrations for our quality management system and environmental management system programs, respectively, for our Oakdale facility. We earned initial ISO 9001 registration for our Ottawa, Illinois 12 facility in 2022. We also have attained Green Professional status in Wisconsin’s Green Master sustainability recognition program.
Since 2016, Smart Sand has maintained International Organization for Standardization (“ISO”) ISO 9001 and ISO 14001 registrations for our quality management system and environmental management system programs, respectively, for our Oakdale facility. We earned initial ISO 9001 registration for our Ottawa, Illinois facility in 2022 and for our Blair, WI facility in 2024.
We believe that as this business grows, it will provide us with the ability to diversify some of our sales into more stable, consumer-driven products to help mitigate the price volatility that we are exposed to in the oil and gas industry.
The IPS business is primarily influenced by macroeconomic drivers such as consumer demand and population growth. We believe that as this business grows, it will provide us with the ability to diversify a portion of our sales into more stable, consumer-driven products to help mitigate the price volatility in the oil and gas industry.
We cannot be assured, however, that future events, such as changes in existing laws or enforcement policies, the promulgation of new laws or regulations or the development or discovery of new facts or conditions adverse to our operations will not cause us to incur significant costs.
Future events, such as changes in existing laws or enforcement policies, the promulgation of new laws or regulations or the development or discovery of new facts or conditions adverse to our operations could cause us to incur significant costs. For example, policy shifts could impact our operations.
In particular, we currently believe that Northern White frac sand has logistical advantages in the Marcellus, Utica and Bakken Formations in the shale basins of the United States, and the Montney and Douvernay shale basins in Canada.
However, we believe there will continue to be demand for our high-quality Northern White frac sand. In particular, we currently believe that Northern White frac sand has logistical advantages in the Marcellus, Utica and Bakken Formations in the shale basins of the United States, and the Montney and Duvernay shale basins in Canada.
Demand for frac sand in the oil and natural gas industry drove a significant increase in the production of frac sand. As a result, some local communities expressed concern regarding silica sand mining operations. These concerns have generally included exposure to ambient silica sand dust, truck traffic, water usage and blasting.
As a result, some local communities expressed concern regarding silica sand mining operations. These concerns have generally included exposure to ambient silica sand dust, truck traffic, water usage and blasting.
Additionally, demand may increase over the next five years, which may be driven by increased export capacity of LNG and potential increased power demand for data centers. 13 Supply Trends There was considerable consolidation activity including mergers, acquisitions, closures of mines and bankruptcy filings among our peers from 2020 to 2024.
In addition, demand may continue to grow over the next five years, driven by expected increases in natural gas demand to support expanded LNG export capacity and potential incremental power demand from data centers. Supply Trends There was considerable consolidation activity including mergers, acquisitions, closures of mines and bankruptcy filings among our peers from 2020 to 2025.
NEPA requires federal agencies to evaluate the environmental impact of all “major federal actions” significantly 18 affecting the quality of the human environment. The granting of a federal permit for a major development project, such as a mining operation, may be considered a “major federal action” that requires review under NEPA.
The granting of a federal permit for a major development project, such as a mining operation, may be considered a “major federal action” that requires review under NEPA.
They detach from the wellsite equipment, allowing for removal from the wellsite during operations. We believe our SmartSystems help customers reduce trucking and related fuel consumption, reducing the carbon footprint of their daily operations.
They detach from the wellsite equipment, allowing for removal from the wellsite during operations. We believe our SmartSystems help customers reduce trucking and related fuel consumption, reducing the carbon footprint of their daily operations. Market Supply and demand fundamentals have been stable during the last three years and frac sand prices have recovered from previous historic lows.
We are also members of the Wisconsin Industrial Sand Association, which promotes safe and environmentally responsible sand mining standards. Our Customers Our core customers are oil and natural gas exploration and production companies and oilfield service companies. In late 2021, we began diversifying our sand sales to include IPS to customers.
We also have attained Green Professional status in Wisconsin’s Green Master sustainability recognition program. We are also members of the Wisconsin Industrial Sand Association, which promotes safe and environmentally responsible sand mining standards. Our Customers Our core customers are oil and natural gas exploration and production companies and oilfield service companies.
Finally, we believe that the adoption of our SmartSystems provides improved efficiencies in shipping and storing sand at the wellsite through reduced trucking requirements, which removes traffic from the roads and lowers diesel fuel consumption, thereby providing incremental value to our customers by reducing their carbon emissions.
Finally, we believe that the adoption of our SmartSystems provides improved efficiencies in shipping and storing sand at the wellsite through reduced trucking requirements, which removes traffic from the roads and lowers diesel fuel consumption, thereby providing incremental value to our customers by reducing their carbon emissions. 9 Demand in the IPS business is stable as customers are spread over a wide range of industries, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, recreation and more.
Our Blair, Wisconsin mine with onsite rail infrastructure provides us with direct access to the Class 1 Canadian National Railway, allowing us access to all Class 1 rail lines within the United States and Canada. The Blair facility began operations in the second quarter of 2023.
With this access, we currently have access to all Class 1 rail lines within the United States and Canada. The Blair facility began operations in the second quarter of 2023.
Additionally, demand may increase over the next five years, which may be driven by increased export capacity of liquid natural gas (“LNG”) and potential increased power demand for data centers. 10 • Focusing on being a low-cost provider and continuing to make process improvements.
In addition, demand may continue to grow over the next five years, driven by expected increases in natural gas demand to support expanded LNG export capacity and potential incremental power demand from data centers. • Focusing on being a low-cost provider and continuing to make process improvements.
Additionally, we believe the location of our Ottawa, Illinois facility in close proximity to Greater Chicago and other major Midwestern metropolitan markets and our ability to truck or rail our products from this location allows us to be able to offer competitive pricing for industrial sand application. 11 The addition of the Blair frac sand mine and related processing facility located in Blair, Wisconsin, which contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway, has secured our access to provide sand on all Class I rail lines in the United States and Canada. • Expanded logistics solutions.
The addition of the Blair frac sand mine and related processing facility located in Blair, Wisconsin, which contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway, has secured our access to provide sand on all Class I rail lines in the United States and Canada. • Expanded logistics solutions.
Compliance with new legislation may require us to incur substantial costs or suspend or terminate our operations. In addition, various policymakers, including the states of California, Illinois, and New York, have adopted or are considering adopting requirements for in-scope companies to disclose certain climate-related information, including on GHG emissions and climate risks. For example, the U.S.
In addition, various policymakers, including the states of California, Illinois, and New York, have adopted or are considering adopting requirements for in-scope companies to disclose certain climate-related information, including on GHG emissions and climate risks. The SEC also previously finalized rules to mandate extensive disclosure of climate-related data, risks, and GHG emissions for certain public companies.
We believe that regional sand will continue to affect the demand for Northern White sand in some of the oil and natural gas producing basins in which we market our products. However, we believe there will continue to be demand for our high-quality Northern White frac sand.
Northern White frac sand, which is found predominantly in Wisconsin and limited portions of Minnesota, Illinois, and Missouri, is considered a premium proppant due to its favorable physical characteristics. We believe that regional sand will continue to affect the demand for Northern White sand in some of the oil and natural gas producing basins in which we market our products.
We also operate a terminal located in El Reno, Oklahoma, which we acquired in 2020, to serve the Woodford and SCOOP/STACK Basins. We are capable of delivering sand to substantially all onshore operating basins in the United States and Canada.
We are capable of delivering sand to substantially all onshore operating basins in the United States and Canada.
While sales of IPS to customers have been a small portion of our overall sand sales since beginning this business, we intend to continue increasing our expansion of IPS in 2025 and beyond.
In late 2021, we began diversifying our sand sales to include IPS. IPS customers represent a small but growing portion of our overall sand sales and we intend to continue increasing our expansion of IPS in 2026 and beyond.
Wisconsin has specific permitting and review processes for commercial silica mining operations, and state agencies may impose different or additional monitoring or mitigation requirements than federal agencies. The development of new sites and our existing operations also are subject to a variety of local environmental and regulatory requirements, including land use, zoning, building, and transportation requirements.
Wisconsin has specific permitting and review processes for commercial silica mining operations, and state agencies may impose different or additional monitoring or mitigation requirements than federal agencies.
Market Beginning in the first quarter of 2022 and continuing through 2024, supply and demand fundamentals have improved and frac sand prices recovered from previous historic lows. There have been modest pricing fluctuations over the periods presented, but we believe the fluctuation is consistent with other commodities in the oilfield services sector.
There have been modest pricing fluctuations over the periods presented, but we believe the fluctuation is consistent with other commodities in the oilfield services sector.
Mining and Workplace Safety Our sand mining operations are subject to mining safety regulation. The U.S. Mining Safety and Health Administration (“MSHA”) is the primary regulatory organization governing frac sand mining and processing. Accordingly, MSHA regulates quarries, surface mines, underground mines and the industrial mineral processing facilities associated with and located at quarries and mines.
The listed territory of the Southern DPS could overlap with the operating areas of some of our customers. Mining and Workplace Safety Our sand mining operations are subject to mining safety regulation. The U.S. Mining Safety and Health Administration (“MSHA”) is the primary regulatory organization governing frac sand mining and processing.
Our mine at Ottawa, Illinois and related transloading terminal in Peru, Illinois added new origination and destination points to our existing capabilities and offers additional capability to ship products on a third Class I rail carrier, the BNSF.
Our mine at Ottawa, Illinois and related transloading terminal in Peru, Illinois provide additional origination and destination points through access to a third Class I rail carrier, the BNSF. Our Blair, Wisconsin mine, with onsite rail infrastructure, provides us with direct access to the Class 1 Canadian National Railway.
The primary drivers for the increase in frac sand usage are increased lateral well lengths and increased volume of sand per linear foot of lateral well. The trend is expected to increase moderately in 2025 as well.
We believe the demand for frac sand will continue to moderately increase, driven by increased lateral well lengths and increased volume of sand per linear foot of lateral well.
Although we do not directly engage in hydraulic fracturing activities, our customers purchase our frac sand for use in their hydraulic fracturing activities.
Although we do not directly engage in hydraulic fracturing activities, our customers purchase our frac sand for use in their hydraulic fracturing activities. From time to time, policymakers have adopted regulations restricting or otherwise regulating hydraulic fracturing operations, including the disposal of produced water from the hydraulic fracturing process.
Portions of our facilities lie in areas designated as wetlands, which will require additional local, state and federal permits prior to mining and reclaiming those areas. We also must meet requirements for certain international standards concerning safety, greenhouse gases and rail operations.
Our current and planned areas for excavation at our mining facilities are permitted for extraction of our proven reserves. Portions of our facilities lie in areas designated as wetlands, which will require additional local, state and federal permits prior to mining those areas. We voluntarily meet the standards of the Wisconsin Department of Natural Resources’ Green Tier program.
We obtained access, through long term leases, to rail terminals in Minerva, Ohio and Dennison, Ohio, which we believe will broaden our ability to offer sand to our customers in the Utica Formation of the Appalachian Basin in an efficient and cost-effective manner. These terminals became operational in 2024.
We have also obtained access, through long term leases, to rail terminals in Minerva, Ohio and Dennison, Ohio. These terminals became operational in 2024.
According to Spears, North America proppant demand increased by 7% in 2024 compared to 2023, mirroring an improving hydraulic fracturing market. The primary drivers for the increase in frac sand usage are increased lateral well lengths and increased volume of sand per linear foot of lateral well. The trend is expected to increase moderately in 2025 as well.
According to Spears, North America proppant demand decreased by approximately 2% compared to 2024. Despite lower drilling and completion activity during the year, overall frac sand demand remained relatively stable, supported by longer lateral well lengths and increased sand volume per linear foot of lateral well. Frac sand demand is expected to increase moderately in 2026.
To conduct our operations, we are required to obtain permits and approvals that address environmental, land use and health and safety issues at our operating facilities. Our current and planned areas for excavation at our mining facilities are permitted for extraction of our proven reserves.
Permits We operate in a regulated environment overseen by governmental regulatory and enforcement bodies at the local, state and federal levels. To conduct our operations, we are required to obtain permits and approvals that address environmental, land use and health and safety issues at our operating facilities.
We believe the Waynesburg terminal allows us to be one of the most efficient and low-cost sources of frac sand in the Appalachian Basin.
In September 2025, we completed an expansion of the Dennison, Ohio terminal.We believe the Waynesburg, Minerva and Dennison terminals allow us to be one of the most efficient and low-cost sources of frac sand in the Appalachian Basin. We also operate a terminal located in El Reno, Oklahoma, which we acquired in 2020, to serve the Woodford and SCOOP/STACK Basins.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase of our securities could decrease, which could cause the price of our common stock and other securities and their trading volume to decline. 36 Our amended and restated certificate of incorporation and amended and restated bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock.
Biggest changeIf analysts who cover us downgrade our securities, the price of our securities would likely decline. If analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase of our securities could decrease, which could cause the price of our common stock and other securities and their trading volume to decline.
Specifically, if frac sand is oversupplied, our customers may reduce their sales volumes, may not be willing to purchase sand from us, may demand lower prices, any one or combination of the preceding could have a material adverse effect on our business, results of operations and financial condition.
Specifically, if frac sand is oversupplied, our customers may reduce their sales volumes, may not be willing to purchase sand from us, or may demand lower prices, and any one or combination of the preceding could have a material adverse effect on our business, results of operations and financial condition.
In addition, some provisions of our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our stockholders, including: • advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders; • provisions that divide our board of directors into three classes of directors, with the classes to be as nearly equal in number as possible; • provisions that prohibit stockholder action by written consent after the date on which our Principal Stockholders collectively cease to beneficially own at least 50% of the voting power of the outstanding shares of our stock entitled to vote; • provisions that provide that special meetings of stockholders may be called only by the board of directors or, for so long as a Principal Stockholder continues to beneficially own at least 20% of the voting power of the outstanding shares of our stock; • provisions that provide that our stockholders may only amend our certificate of incorporation or bylaws with the approval of at least 66 2/3% of the voting power of the outstanding shares of our stock entitled to vote, or for so long as our Principal Stockholders collectively continue to beneficially own at least 50% of the voting power of the outstanding shares of our stock entitled to vote, with the approval of a majority of the voting power of the outstanding shares of our stock entitled to vote; • provisions that provide that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and • provisions that establish advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
In addition, some provisions of our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our stockholders, including: • advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders; • provisions that divide our board of directors into three classes of directors, with the classes to be as nearly equal in number as possible; • provisions that prohibit stockholder action by written consent after the date on which our Principal Stockholders collectively cease to beneficially own at least 50% of the voting power of the outstanding shares of our stock entitled to vote; • provisions that provide that special meetings of stockholders may be called only by the board of directors or, for so long as a Principal Stockholder continues to beneficially own at least 20% of the voting power of the outstanding shares of our stock; • provisions that provide that our stockholders may only amend our certificate of incorporation or bylaws with the approval of at least 66 2/3% of the voting power of the outstanding shares of our stock entitled to vote, or for so long as our Principal Stockholders collectively continue to beneficially own at least 50% of the voting power of the outstanding shares of our stock entitled to vote, with the approval of a majority of the voting power of the outstanding shares of our stock entitled to vote; 37 • provisions that provide that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and • provisions that establish advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
Our amended and restated certificate of incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our amended and restated certificate of incorporation or our bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.
Our amended and restated certificate of incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our amended and restated certificate of incorporation or our bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties 38 named as defendants therein.
Disruptions in transportation services, including shortages of railcars, lack of developed infrastructure, weather-related problems, flooding, drought, accidents, mechanical difficulties, strikes, lockouts, bottlenecks, environmental restrictions or other events could affect our ability to timely and cost effectively deliver to our customers and could temporarily impair the ability of our customers to take delivery and, in certain 24 circumstances, constitute a force majeure event under our customer contracts, permitting our customers to suspend taking delivery of and paying for our frac sand (and in some cases terminating the agreement after a period of time).
Disruptions in transportation services, including shortages of railcars, lack of developed infrastructure, weather-related problems, flooding, drought, accidents, mechanical difficulties, strikes, lockouts, bottlenecks, environmental restrictions or other events could affect our ability to timely and cost effectively deliver to our customers and could temporarily impair the ability of our customers to take delivery and, in certain circumstances, constitute a force majeure event under our customer contracts, permitting our customers to suspend taking delivery of and paying for our frac sand (and in some cases terminating the agreement after a period of time).
Any failure by us to comply with applicable environmental laws and regulations may cause governmental authorities to take actions that could adversely impact our operations and financial condition, including: • issuance of administrative, civil, or criminal penalties; • denial, modification, or revocation of permits or other authorizations; • occurrence of delays in permitting or performance of projects; • imposition of injunctive obligations or other limitations on our operations, including cessation of operations; and 31 • requirements to perform site investigatory, remedial, or other corrective actions.
Any failure by us to comply with applicable environmental laws and regulations may cause governmental authorities to take actions that could adversely impact our operations and financial condition, including: • issuance of administrative, civil, or criminal penalties; • denial, modification, or revocation of permits or other authorizations; • occurrence of delays in permitting or performance of projects; • imposition of injunctive obligations or other limitations on our operations, including cessation of operations; and • requirements to perform site investigatory, remedial, or other corrective actions.
While President Trump has expressed a policy agenda supportive of our industry, at the same time, certain environmental groups have suggested that additional laws may be needed and, in some instances, have pursued voter ballot initiatives to more closely and uniformly limit or otherwise regulate the hydraulic fracturing process, and legislation has been proposed by some members of Congress to provide for such regulation.
While President Trump has expressed a policy agenda supportive of our industry, at the same time, certain environmental groups have suggested that additional laws may be needed and, in some instances, have pursued voter ballot initiatives or litigation to more closely and uniformly limit or otherwise regulate the hydraulic fracturing process, and legislation has been proposed by some members of Congress to provide for such regulation.
In addition, our ability to maintain existing debt financing or to access the capital markets for future equity or debt offerings may be limited by our financial condition at the time of any such financing or offering, the covenants or borrowing base restrictions contained in our FCB ABL Credit Facility or other current or future debt agreements, adverse market 22 conditions or other contingencies and uncertainties that are beyond our control.
In addition, our ability to maintain existing debt financing or to access the capital markets for future equity or debt offerings may be limited by our financial condition at the time of any such financing or offering, the covenants or borrowing base restrictions contained in our FCB ABL Credit Facility or other current or future debt agreements, adverse market conditions or other contingencies and uncertainties that are beyond our control.
Any renegotiation on less favorable terms or inability to enter into new leases on economically acceptable terms upon the expiration, termination or other lapse of our current leases or rights-of-way could cause us to cease operations on the affected land, increase costs related to continuing operations elsewhere and have a material adverse effect on our business, financial condition and results of operations.
Any renegotiation on less 27 favorable terms or inability to enter into new leases on economically acceptable terms upon the expiration, termination or other lapse of our current leases or rights-of-way could cause us to cease operations on the affected land, increase costs related to continuing operations elsewhere and have a material adverse effect on our business, financial condition and results of operations.
The price and supply of natural gas is unpredictable and can fluctuate significantly based on domestic, international, political and economic circumstances, as well as other events outside our control, 25 such as changes in supply and demand due to weather conditions, actions by OPEC, governmental regulations and sanctions, regional production patterns, security threats and environmental concerns.
The price and supply of natural gas is unpredictable and can fluctuate significantly based on domestic, international, political and economic circumstances, as well as other events outside our control, such as changes in supply and demand due to weather conditions, actions by OPEC, governmental regulations and sanctions, regional production patterns, security threats and environmental concerns.
Any inability to find alternative components at prices or with quality specifications similar to those deployed today could result in delays or a loss of customers. 29 Unsatisfactory safety performance may negatively affect our customer relationships and, to the extent we fail to retain existing customers or attract new customers, adversely impact our revenues.
Any inability to find alternative components at prices or with quality specifications similar to those deployed today could result in delays or a loss of customers. Unsatisfactory safety performance may negatively affect our customer relationships and, to the extent we fail to retain existing customers or attract new customers, adversely impact our revenues.
Furthermore, oil and natural gas exploration and production companies and other providers of hydraulic fracturing services have acquired and in the future may acquire their own frac sand reserves to fulfill their proppant requirements, and these other market participants may expand their existing frac sand production capacity, all of which would negatively impact demand for our frac sand.
Furthermore, oil and natural gas exploration and production companies and other providers of hydraulic fracturing services have acquired and in the future may acquire their own frac sand reserves to fulfill their proppant requirements, and these other market participants 21 may expand their existing frac sand production capacity, all of which would negatively impact demand for our frac sand.
A successful claim that we do not have title to our property or lack appropriate water rights could cause us to lose any rights to explore, develop and extract minerals, without compensation for 26 our prior expenditures relating to such property. Our business may suffer a material adverse effect in the event we have title deficiencies.
A successful claim that we do not have title to our property or lack appropriate water rights could cause us to lose any rights to explore, develop and extract minerals, without compensation for our prior expenditures relating to such property. Our business may suffer a material adverse effect in the event we have title deficiencies.
Aside from state laws, local land use restrictions may restrict drilling in general or hydraulic fracturing in particular. Municipalities may adopt local 30 ordinances attempting to prohibit hydraulic fracturing altogether or, at a minimum, to allow such fracturing processes within their jurisdictions to proceed but regulating the time, place and manner of those processes.
Aside from state laws, local land use restrictions may restrict drilling in general or hydraulic fracturing in particular. Municipalities may adopt local ordinances attempting to prohibit hydraulic fracturing altogether or, at a minimum, to allow such fracturing processes within their jurisdictions to proceed but regulating the time, place and manner of those processes.
Suits have also been brought against such companies under stockholder and consumer protection laws, alleging that companies have been aware of the adverse effects of climate change but failed to adequately disclose those impacts. To the extent these risks impact our customers, we may experience reduced demand for our proppant.
Suits have also been 34 brought against such companies under stockholder and consumer protection laws, alleging that companies have been aware of the adverse effects of climate change but failed to adequately disclose those impacts. To the extent these risks impact our customers, we may experience reduced demand for our proppant.
Subject to the satisfaction of vesting conditions and the requirements of Rule 144, shares registered under the registration statement on Form S-8 will be available for resale immediately in the public market without restriction. 37 We have provided certain registration rights for the sale of common stock by certain existing stockholders in the future.
Subject to the satisfaction of vesting conditions and the requirements of Rule 144, shares registered under the registration statement on Form S-8 will be available for resale immediately in the public market without restriction. We have provided certain registration rights for the sale of common stock by certain existing stockholders in the future.
The long-term impact of such actions on our customers’ operations, if any, is difficult to predict at this time. A negative shift in investor sentiment towards the oil and natural gas industry and increased attention to environmental, social and governance (“ESG”) and conservation matters may adversely impact our business.
The long-term impact of such actions on our customers’ operations, if any, is difficult to predict at this time. A negative shift in sentiment towards the oil and natural gas industry and increased attention to environmental, social and governance (“ESG”) and conservation matters may adversely impact our business.
Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities. Such litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources and harm our business, operating results and financial condition.
Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market 35 price of a company’s securities. Such litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources and harm our business, operating results and financial condition.
In addition, prices can be affected by a number of factors beyond our control, including weather conditions, seasonal trends, domestic and foreign supply of and demand for natural gas, domestic, local and foreign governmental regulations, tariffs and taxes, including environmental and climate change regulation, among others.
In addition, prices can be affected by a number of factors beyond our control, including weather conditions, seasonal trends, domestic and foreign supply of and demand for oil and natural gas, domestic, local and foreign governmental regulations, tariffs and taxes, including environmental and climate change regulation, among others.
Such a decline would have a material adverse effect on our business, results of operation and financial condition. The commercial development of economically viable alternative energy sources (such as wind, solar, geothermal, tidal, batteries, fuel cells and biofuels) could have a similar effect.
Such a decline would have a material adverse effect on our business, results of operation and financial condition. The commercial development of economically viable alternative 20 energy sources (such as wind, solar, geothermal, tidal, batteries, fuel cells and biofuels) could have a similar effect.
If we are unable to make acquisitions from third parties because we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts, we are unable to obtain financing for these acquisitions on economically acceptable terms or we are outbid 23 by competitors, our future growth may be limited.
If we are unable to make acquisitions from third parties because we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts, we are unable to obtain financing for these acquisitions on economically acceptable terms or we are outbid by competitors, our future growth may be limited.
Our ability to pay dividends and repurchase shares under our share repurchase program will depend on our ongoing ability to generate cash from operations and access capital markets. We cannot guarantee that we will pay any dividend or make any repurchases of our common stock in the future.
Our ability to pay dividends and repurchase shares under our share repurchase program will depend on our ongoing ability to generate cash from operations and access capital markets. We cannot guarantee that we will pay any dividends or make any repurchases of our common stock in the future.
In order to obtain permits and renewals of permits in the future, we may be required to prepare and present data to governmental authorities pertaining to the potential adverse impact that any proposed excavation or production activities, 32 individually or in the aggregate, may have on the environment.
In order to obtain permits and renewals of permits in the future, we may be required to prepare and present data to governmental authorities pertaining to the potential adverse impact that any proposed excavation or production activities, individually or in the aggregate, may have on the environment.
For example, certain of our contracts were adjusted in 2020 due to effects of the COVID-19 pandemic, resulting in a combination of 21 reduced average selling prices per ton, adjustments to take-or-pay volumes and length of contract.
For example, certain of our contracts were adjusted in 2020 due to effects of the COVID-19 pandemic, resulting in a combination of reduced average selling prices per ton, adjustments to take-or-pay volumes and length of contract.
New legal requirements, including those related to the protection of the environment, could be adopted that could materially adversely affect our mining operations (including our ability to extract or the pace of extraction of mineral deposits), our cost structure, or our customers’ ability to use our frac sand.
New legal requirements, including those related to the protection of the environment, could be adopted that could materially adversely affect our mining operations (including our ability to extract or the pace of extraction of mineral deposits), our cost structure, or our customers’ ability to use our sand.
We may not prevail in any such legal proceedings related to such claims, and our storage systems and related items may be found to infringe, impair, misappropriate, dilute or otherwise violate the intellectual property rights of others.
We may not prevail in any such legal proceedings related to 29 such claims, and our storage systems and related items may be found to infringe, impair, misappropriate, dilute or otherwise violate the intellectual property rights of others.
Seasonal fluctuations in weather impact the production levels at our wet processing plant. While our sales and finished product 27 production levels are contracted evenly throughout the year, our mining and wet sand processing activities are reduced during winter months.
Seasonal fluctuations in weather impact the production levels at our wet processing plant. While our sales and finished product production levels are contracted evenly throughout the year, our mining and wet sand processing activities are reduced during winter months.
Additionally, several states and geographic regions in the United States have adopted legislation and regulations to reduce emissions of GHGs, including cap and trade regimes and 33 commitments to contribute to meeting the goals of the Paris Agreement.
Additionally, several states and geographic regions in the United States have adopted legislation and regulations to reduce emissions of GHGs, including cap and trade regimes and commitments to contribute to meeting the goals of the Paris Agreement.
The actual or perceived health risks of mining, processing and handling proppants could materially and adversely affect proppant producers, including us, through reduced use of frac sand, the threat of product liability or employee lawsuits, increased scrutiny by federal, state and local regulatory authorities of us and our customers or reduced financing sources available to the frac sand industry.
The actual or perceived health risks of mining, processing and handling sand could materially and adversely affect sand producers, including us, through reduced use of sand, the threat of product liability or employee lawsuits, increased scrutiny by federal, state and local regulatory authorities of us and our customers or reduced financing sources available to the frac sand industry.
At the local level, zoning, building, storm water, erosion control, wellhead protection, road usage and access are all regulated and require permitting to some degree. A non-metallic mining reclamation permit is required. Certain permits or approvals may also require consultation with federal, state, tribal, or local authorities.
At the local level, zoning, building, storm water, erosion control, road usage and access are all regulated and require permitting to some degree. A non-metallic mining reclamation permit is required. Certain permits or approvals may also require consultation with federal, state, tribal, or local authorities.
A significant portion of our revenues have been generated with a limited number of customers, and the loss of, material nonpayment or nonperformance by or significant reduction in purchases by any of them could adversely affect our business, results of operations and financial condition. A material portion of our revenues are generated from a limited number of customers.
A significant portion of our revenues have been generated with a limited number of customers, and the loss of, material nonpayment or nonperformance by or significant reduction in purchases by any of these customers could adversely affect our business, results of operations and financial condition. A material portion of our revenues are generated from a limited number of customers.
These health risks have been, and may continue to be, a significant issue confronting the proppant industry. Concerns over silicosis and other potential adverse health effects, as well as concerns regarding potential liability from the use of frac sand, may have the effect of discouraging our customers’ use of our frac sand.
These health risks have been, and may continue to be, a significant issue confronting the sand industry. Concerns over silicosis and other potential adverse health effects, as well as concerns regarding potential liability from the use of sand, may have the effect of discouraging our customers’ use of our sand.
Our success is dependent on our ability to continue to attract, employ and retain highly skilled personnel. Our profitability could be negatively affected if we fail to maintain satisfactory labor relations. As of December 31, 2024, 25 employees in our Illinois facility operated under a collective bargaining agreement. Our collective bargaining agreement expires on April 30, 2027.
Our success is dependent on our ability to continue to attract, employ and retain highly skilled personnel. Our profitability could be negatively affected if we fail to maintain satisfactory labor relations. As of December 31, 2025, 31 employees in our Illinois facility operated under a collective bargaining agreement. Our collective bargaining agreement expires on April 30, 2027.
In addition to the risks described in this section, the market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including: • our operating and financial performance; • quarterly variations in the rate of growth of our financial indicators, such as revenues, EBITDA, Adjusted EBITDA, contribution margin, free cash flow, net income, and net income per share; • the public reaction to our press releases, our other public announcements, and our filings with the SEC; • strategic actions by our competitors; • our failure to meet revenue or earnings estimates by research analysts or other investors; • changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts; • speculation in the press or investment community; • the failure of research analysts to cover our common stock; • sales of our common stock by us or our stockholders, or the perception that such sales may occur; • changes in accounting principles, policies, guidance, interpretations, or standards; • additions or departures of key management personnel; • actions by our stockholders; • general market conditions, including fluctuations in commodity prices, sand-based proppants, or industrial and recreational sand-based products; • domestic and international economic, legal and regulatory factors unrelated to our performance; and • the realization of any risks described under this “Risk Factors” section. 35 We are subject to certain requirements of Section 404 of the Sarbanes-Oxley Act.
In addition to the risks described in this section, the market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including: • our operating and financial performance; • quarterly variations in the rate of growth of our financial indicators, such as revenues, net income, net income per share, EBITDA, Adjusted EBITDA, contribution margin, and free cash flow; • the public reaction to our press releases, our other public announcements, and our filings with the SEC; • strategic actions by our competitors; • our failure to meet revenue or earnings estimates by research analysts or other investors; • changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts; • speculation in the press or investment community; • the failure of research analysts to cover our common stock; • sales of our common stock by us or our stockholders, or the perception that such sales may occur; • changes in accounting principles, policies, guidance, interpretations, or standards; • additions or departures of key management personnel; • actions by our stockholders; • general market conditions, including fluctuations in commodity prices, sand-based proppants, or industrial and recreational sand-based products; • domestic and international economic, legal and regulatory factors unrelated to our performance; and • the realization of any risks described under this “Risk Factors” section.
Increasing attention to climate change, natural capital, human capital, and other ESG matters by various stakeholders, including consumer demand for alternative sources of energy, may result in increased costs, changes in demand for certain products or services, reputational harm, or other adverse impacts to our business.
An increase in attention to climate change, natural capital, human capital, and other ESG matters by various stakeholders, including consumer demand for alternative sources of energy, may result in increased costs, changes in demand for certain products or services, reputational harm, or other adverse impacts to our business.
If we are unable to make acquisitions on economically acceptable terms, our future growth would be limited. A portion of our strategy to grow our business is dependent on our ability to make acquisitions.
If we are unable to make acquisitions on economically acceptable terms, our future growth could be limited. A portion of our strategy to grow our business is dependent on our ability to make acquisitions.
The board’s decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, restrictions in the FCB ABL Credit Facility, industry practice, legal requirements, regulatory constraints and other factors that the board deems relevant.
The board’s decisions regarding the payment of dividends or share repurchases will depend on many factors, such as our financial condition, earnings, capital requirements, restrictions in the FCB ABL Credit Facility, industry practice, legal requirements, regulatory constraints and other factors that the board deems relevant.
Inaccuracies in estimates of volumes and qualities of our sand reserves could result in lower than expected sales and higher than expected cost of production. We rely on our independent reserve engineers’ prepared estimates of our reserves based on engineering, economic and geological data assembled and analyzed by our engineers and geologists.
Inaccuracies in estimates of volumes and qualities of our sand reserves could result in lower than expected sales and higher than expected cost of production. We rely on our independent reserve engineers’ prepared estimates of our reserves based on engineering, economic and geological data assembled and analyzed by our personnel.
If our information technology systems are damaged or cease to function properly, we may have to make a significant investment to fix or replace them, and we may suffer loss of critical data and interruptions or delays in our operations.
If our IT Systems are damaged or cease to function properly, we may have to make a significant investment to fix or replace them, and we may suffer loss of critical data and interruptions or delays in our operations.
As of December 31, 2024, we had several patents related to our SmartSystems, including patents related to our silo storage system and patents related to lifting and lowering our storage silos.
As of December 31, 2025, we had several patents related to our SmartSystems, including patents related to our silo storage system and patents related to lifting and lowering our storage silos.
If we are unable to timely comply with Section 404 or if the costs related to compliance are significant, our profitability, stock price, results of operations and financial condition could be materially adversely affected. We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act.
We are subject to certain requirements of Section 404 of the Sarbanes-Oxley Act. If we are unable to timely comply with Section 404 or if the costs related to compliance are significant, our profitability, stock price, results of operations and financial condition could be materially adversely affected.
Our operations are exposed to potential natural disasters, including blizzards, tornadoes, storms, floods, other adverse weather conditions and earthquakes. In addition, our employees could be subject to a COVID-19 or other outbreak at one or more of our facilities.
Our operations are exposed to potential natural disasters, including blizzards, tornadoes, storms, floods, other adverse weather conditions and earthquakes. In addition, our employees could be subject to another pandemic similar to COVID-19 or another outbreak at one or more of our facilities.
The occurrence of such an event could also result in damage to our software, computers or systems, or otherwise cause interruptions or malfunctions in our, our customers’, our counterparties’ or third parties’ operations.
The occurrence of such an event could also result in damage to our IT Systems, or otherwise cause interruptions or malfunctions in our, our customers’, our counterparties’ or third parties’ operations.
Severe weather conditions may affect our customers’ operations, thus reducing their need for our products, impact our operations by resulting in weather-related damage to our facilities and equipment and impact our customers’ ability to take delivery of our products at our plant site.
Severe weather conditions may affect our customers’ operations, thus reducing their need for our products, impact our operations by resulting in weather-related damage to our facilities and equipment and impact our customers’ ability to take delivery of our products at our plant or terminal sites.
An increase in the price or a significant interruption in the supply of these or any other energy sources could have a material adverse effect on our business, results of operations and financial condition. Energy costs, primarily natural gas and electricity, represented approximately 7.1% of our total cost of goods sold for the year ended December 31, 2024.
An increase in the price or a significant interruption in the supply of these or any other energy sources could have a material adverse effect on our business, results of operations and financial condition. Natural gas and electricity costs represented approximately 5% of our total cost of goods sold for the year ended December 31, 2025.
Additionally, climate change may increase the frequency and intensity of severe weather events and other natural disasters, as well as contribute to chronic changes (such as to meteorological and hydrological patterns) that may also result in various adverse impacts to our or our customers’ operations.
For example, climate change is expected to increase the frequency and intensity of severe weather events and other natural disasters, as well as contribute to chronic changes (such as to meteorological and hydrological patterns) that may also result in various adverse impacts to our or our customers’ operations.
Natural gas is currently the primary fuel source used for drying in our frac sand production process. As a result, our profitability will be impacted by the price and availability of natural gas we purchase from third parties.
Natural gas is currently the primary fuel source used for drying in our frac sand production process. Electricity is also relied upon for our washing process. As a result, our profitability will be impacted by the price and availability of natural gas and electricity we purchase from third parties.
As we focus on growing our business, particularly as it relates to our SmartSystems offerings, our business may become increasingly subject to inherent risks that can cause personal injury or loss of life, damage to or destruction of property, equipment or the environment or the suspension of our operations.
As we focus on growing our business, our business may become increasingly subject to inherent risks that can cause personal injury or loss of life, damage to or destruction of property, equipment or the environment or the suspension of our operations.
A significant increase in the price of energy that is not recovered through an increase in the price of our products or covered through our hedging arrangements or an extended interruption in the supply of natural gas or electricity to our production facilities could have a material adverse effect on our business, results of operations and financial condition.
A significant increase in the price of energy that is not recovered through an increase in the price of our products or covered through our hedging arrangements or an extended interruption in the supply of natural gas or electricity to our production facilities could have a material adverse effect on our business, results of operations and financial condition. 25 Increases in the price of diesel fuel may adversely affect our business, results of operations and financial condition.
Several federal and state regulatory authorities, including MSHA, have changed and may continue to propose changes in their regulations regarding workplace exposure to crystalline silica, such as permissible exposure limits and required controls and personal protective equipment.
We are subject to laws and regulations relating to human exposure to crystalline silica. Several federal and state regulatory authorities, including MSHA, have changed and may continue to propose changes in their regulations regarding workplace exposure to crystalline silica, such as permissible exposure limits and required controls and personal protective equipment.
As of December 31, 2024, there were 28,570,038 publicly traded shares of common stock held by our public common stockholders. Although our common stock is listed on the NASDAQ, we do not know whether an active trading market will continue to develop or how liquid that market might be.
As of December 31, 2025, there were 27,677,660 publicly traded shares of common stock held by our public common stockholders. Although our common stock is listed on the NASDAQ, we do not know whether an active trading market will continue to develop or how liquid that market might be.
If there is a shortage of experienced labor in areas in which we operate, we may find it difficult to hire or train the necessary number of skilled laborers to perform our own operations which could have an adverse impact on our business, results of operations and financial condition.
If there is a shortage of experienced labor in areas in which we operate, we may find it difficult to hire or train the necessary number of skilled laborers to perform our own operations which could have an adverse impact on our business, results of operations and financial condition. 26 Our business may suffer if we lose, or are unable to attract and retain, key personnel.
If estimates of the quality of our reserves, including the volumes of the various specifications of those reserves, prove to be inaccurate, we may incur significantly higher excavation costs without corresponding increases in revenues, we may not be able to meet our contractual obligations, or our facilities may have a shorter than expected reserve life, any of which could have a material adverse effect on our results of operations and cash flows.
If estimates of the quality of our reserves, including the volumes of the various specifications of those reserves, prove to be inaccurate, we may incur significantly higher excavation costs without corresponding increases in revenues, we may not be able to meet our contractual obligations, or our facilities may have a shorter than expected reserve life, any of which could have a material adverse effect on our results of operations and cash flows. 22 Our sand is currently produced at three facilities and our sales are dependent on delivery by railroads.
A terrorist attack or armed conflict could harm our business. Global and domestic terrorist activities, anti-terrorist efforts and other armed conflicts could adversely affect the U.S. and global economies and could prevent us from meeting financial and other obligations.
Geopolitical conflicts and instability; including terrorist attacks or armed conflicts, could harm our business. Global and domestic terrorist activities, anti-terrorist efforts and other armed conflicts could adversely affect the U.S. and global economies and could prevent us from meeting financial and other obligations.
Actual or anticipated declines in domestic or foreign economic growth rates, regional or worldwide increases in tariffs or other trade restrictions, turmoil affecting the U.S. or global financial systems and markets and a severe economic contraction either regionally or worldwide could materially affect our business and financial condition.
Uncertainty on future inflation trends and volatility in foreign exchange rates and interest rates, as well as actual or anticipated declines in domestic or foreign economic growth rates, regional or worldwide increases in tariffs or other trade restrictions, turmoil affecting the U.S. or global financial systems and markets and a severe economic contraction either regionally or worldwide could materially affect our business and financial condition.
We maintain what we believe is customary and reasonable insurance to protect our business against these potential losses, but such insurance may not be adequate to cover our liabilities, and we are not fully insured against all risks. A financial downturn could negatively affect our business, results of operations, financial condition and liquidity.
We maintain what we believe is customary and reasonable insurance to protect our business against these potential losses, but such insurance may not be adequate to cover our liabilities, and we are not fully insured against all risks. 30 Macroeconomic conditions, including inflation, volatility in foreign exchange rates and interest rates, and a financial downturn could negatively affect our business, results of operations, financial condition and liquidity.
We are required under federal, state, and local laws to maintain financial assurances, such as surety bonds, to secure such obligations. The inability to acquire, maintain or renew such assurances, as required by federal, state, and local laws, could subject us to fines and penalties as well as the revocation of our operating permits.
The inability to acquire, maintain or renew such assurances, as required by federal, state, and local laws, could subject us to fines and penalties as well as the revocation of our operating permits.
Competition for management and key personnel is intense, and the pool of qualified candidates is limited. The loss of any of these individuals or the failure to attract additional personnel, as needed, could have a material adverse effect on our operations and could lead to higher labor costs or the use of less-qualified personnel.
The loss of any of these individuals or the failure to attract additional personnel, as needed, could have a material adverse effect on our operations and could lead to higher labor costs or the use of less-qualified personnel.
Any weather-related interference with our operations could force us to delay or curtail services and potentially breach our contractual obligations to deliver minimum volumes or result in a loss of productivity and an increase in our operating costs.
Any weather-related interference with our operations could force us to delay or curtail services and potentially breach our contractual obligations to deliver minimum volumes or result in a loss of productivity and an increase in our operating costs. Severe weather conditions may also adversely affect our operations as a result of delays in rail shipments.
Restrictions in our FCB ABL Credit Facility may limit our ability to capitalize on potential acquisition and other business opportunities. The operating and financial restrictions and covenants in our FCB ABL Credit Facility could restrict our ability to finance future operations or capital needs or to expand or pursue our business activities.
The operating and financial restrictions and covenants in our FCB ABL Credit Facility could restrict our ability to finance future operations or capital needs or to expand or pursue our business activities.
In addition, a material weakness in the effectiveness of our internal control over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition.
In addition, a material weakness in the effectiveness of our internal control over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition. 36 The concentration of our capital stock ownership by our largest stockholders and its affiliates will limit your ability to influence corporate matters.
We are evaluating our existing controls against the standards adopted by the Committee of Sponsoring Organizations of the Treadway Commission. During the course of our ongoing evaluation and integration of the internal control over financial reporting, we may identify areas requiring improvement, and we may have to design enhanced processes and controls to address issues identified through this review.
During the course of our ongoing evaluation and integration of the internal control over financial reporting, we may identify areas requiring improvement, and we may have to design enhanced processes and controls to address issues identified through this review.
Consequently, our Chief Executive Officer is considered a (“Principal Stockholder”) and will continue to have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions.
As of December 31, 2025, our Chief Executive Officer beneficially owns approximately 18.2% of our outstanding common stock. Consequently, our Chief Executive Officer is considered a (“Principal Stockholder”) and will continue to have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions.
If we consummate any future acquisitions, our capitalization and results of operations may change significantly, and common stockholders will not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in determining the application of these funds and other resources.
If we consummate any future acquisitions, our capitalization and results of operations may change significantly, and common stockholders will not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in determining the application of these funds and other resources. 23 Restrictions in our FCB ABL Credit Facility may limit our ability to capitalize on potential acquisition and other business opportunities.
In addition, various policymakers, including the states of California, Illinois, and New York, have adopted or are considering adopting requirements for in-scope companies to disclose certain climate-related information, including on GHG emissions and climate risks. For example, the U.S.
In addition, various policymakers, including the states of California, Illinois, and New York, have adopted or are considering adopting requirements for in-scope companies to disclose certain climate-related information, including on GHG emissions and climate risks. The SEC also previously finalized rules to mandate extensive disclosure of climate-related data, risks, GHG emissions, for certain public companies.
Our amended and restated certificate of incorporation authorizes our board of directors to issue preferred stock without stockholder approval. If our board of directors elects to issue preferred stock, it could be more difficult for a third party to acquire us.
If our board of directors elects to issue preferred stock, it could be more difficult for a third party to acquire us.
A significant shift in demand from frac sand to other proppants, or the development of new processes to make hydraulic fracturing more efficient that could replace it altogether, could cause a decline in the demand for the frac sand we produce and result in a material adverse effect on our business, results of operations and financial condition.
A significant shift in demand from frac sand to other proppants, or the development of new processes to make hydraulic fracturing more efficient that could replace it altogether, could cause a decline in the demand for the frac sand we produce and result in a material adverse effect on our business, results of operations and financial condition. 24 An increase in the supply of frac sand having similar characteristics as the frac sand we produce could make it more difficult for us to maintain sales with existing customers or obtain new customers on favorable terms, or at all.
We expect that our customers would be responsible for the increased cost, which may result in customers sourcing their sand needs from other suppliers within their own countries.
If enacted, tariffs may significantly affect transactions with our customers and vendors located in Canada and Mexico. We expect that our customers would be responsible for the increased cost, which may result in customers sourcing their sand needs from other suppliers within their own countries.
This could result in significant losses, loss of customers and business opportunities, reputational damage, litigation, regulatory fines, penalties or 28 intervention, reimbursement or other compensatory costs, or otherwise adversely affect our business, financial condition or results of operations. The reliability and capacity of our information technology systems is critical to our operations.
Any adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information could result in significant losses, loss of customers and business opportunities, reputational damage, litigation or proceedings (such as class actions), regulatory fines, penalties or intervention, reimbursement or other compensatory costs, or otherwise adversely affect our business, financial condition or results of operations.
Such current or future regulations could have a material adverse effect on our business, and we may not be able to obtain or renew permits in the future.
Such current or future regulations could have a material adverse effect on our business, and we may not be able to obtain or renew permits in the future. 33 Our inability to acquire, maintain or renew financial assurances related to the reclamation and restoration of mining property could have a material adverse effect on our business, financial condition and results of operations.
Negative economic conditions could also adversely affect the collectability of our trade receivables or performance by our vendors and suppliers.
Negative economic conditions could also adversely affect the collectability of our trade receivables or performance by our vendors and suppliers. Tax legislation and administrative initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.
These new regulations, which could also affect local municipalities and other industrial operations, could have a material adverse effect on our operating costs and effectiveness if implemented.
For example, particularly during drought conditions, local governments may curtail water usage for industrial or mineral production purposes. These new regulations, which could also affect local municipalities and other industrial operations, could have a material adverse effect on our operating costs and effectiveness if implemented.
For more information, see our risk factor “Climate change could result in various risks for us and our customers.” We may be subject to interruptions or failures in our information technology systems, including cyber-attacks. We rely on sophisticated information technology systems and infrastructure to support our business, including process control technology.
For more information, see our risk factor “Climate change could result in various risks for us and our customers.” We and our third-party providers may be subject to cybersecurity risks, cyberattacks, and other interruptions or failures in our information technology systems.
Our sand is currently produced at three facilities and our sales are dependent on delivery by railroads. Any adverse developments at our production facilities, rail terminals, or on any rail line could have a material adverse effect on our business, financial condition and results of operations.
Any adverse developments at our production facilities, rail terminals, or on any rail line could have a material adverse effect on our business, financial condition and results of operations. All of our sand sales are currently produced at our facilities near Oakdale, Wisconsin, Ottawa, Illinois and Blair, Wisconsin. We ship a substantial portion of our sand through our rail terminals.
We cannot guarantee the timing, amount, or payment of dividends on our common stock or the repurchase of our common stock. Although we recently paid a cash dividend, the timing, declaration, amount and payment of future dividends to stockholders will fall within the discretion of our board of directors.
Although we paid dividends in 2024 and 2025 and repurchased shares of our common stock in 2025, the timing, declaration, amount and payment of future dividends to stockholders or share repurchases will fall within the discretion of our board of directors.
Our business may suffer if we lose, or are unable to attract and retain, key personnel. We depend to a large extent on the services of our senior management team and other key personnel. Members of our senior management and other key employees bring significant experience to the market environment in which we operate.
We depend to a large extent on the services of our senior management team and other key personnel. Members of our senior management and other key employees bring significant experience to the market environment in which we operate. Competition for management and key personnel is intense, and the pool of qualified candidates is limited.
Any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunication failures, usage errors by employees, computer viruses, cyber-attacks or other security breaches, or similar events.
We rely on sophisticated computer systems, hardware, softwate, networks and infrastructure to support our business, including process control technology (collectively “IT Systems”). Any of these IT Systems may be susceptible to outages due to fire, floods, power loss, telecommunication failures, usage errors by employees, computer viruses, cyber-attacks or other security breaches, or similar events.
Section 404 requires that we document and test our internal control over financial reporting and issue management’s assessment of our internal control over financial reporting. This section also requires that our independent registered public accounting firm opine on those internal controls upon our public float exceeding a certain threshold as set forth in the SEC rules.
This section also requires that our independent registered public accounting firm opine on those internal controls upon our public float exceeding a certain threshold as set forth in the SEC rules. We are evaluating our existing controls against the standards adopted by the Committee of Sponsoring Organizations of the Treadway Commission.
Tariffs on goods and services between the United States, Canada and Mexico may be detrimental to our business. Our sales into Canada and Mexico may become subject to retaliatory tariffs if the United States imposes tariffs on imports from Canada and Mexico into the United States.
Our sales into Canada and Mexico may become subject to retaliatory tariffs if the United States imposes tariffs on imports from Canada and Mexico into the United States. In recent years, the Company has expanded its sales to customers located in Canada and Mexico.
To the extent the fee is retained and implemented, the emissions fee and funding provisions of the law could increase the operating costs of our customers and accelerate the transition away from fossil fuels, which could in turn adversely affect our business and results of operations.
The ultimate structure of such fee is currently uncertain, and it or similar financial measures may increase the operating costs of our customers and accelerate the transition away from fossil fuels, which could in turn adversely affect our business and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIf our systems, or our customers' or suppliers’ systems, for protecting against cybersecurity incidents prove to be insufficient, a cybersecurity incident could have a material adverse effect on our business, operations, or consolidated financial condition. See additional information about our cybersecurity risks under General Risk factors in Item1(a) Risk Factors.
Biggest changeWe face risks from cybersecurity threats that, if realized, could have a material adverse effect on our business, operations, or consolidated financial condition. See additional information about our cybersecurity risks under "Risk Factors—Risks Inherent in Our Business—We and our third-party providers may be subject to cybersecurity risks, cyberattacks, and other interruptions or failures in our information technology systems.”
In the event there is a cyber security incident, the designated IT personnel and the Incident Response Team will assess the cybersecurity incident’s impact as the basis for assigning a preliminary severity level. Designated IT personnel are also responsible for communicating incidents to other members of management as appropriate.
In the event there is a cyber security incident, the designated IT personnel and the Incident Response Team are expected to assess the cybersecurity incident’s impact as the basis for assigning a preliminary severity level. Designated IT personnel are also responsible for communicating incidents to other members of management as they deem appropriate.
Aside from more immediate reporting of material incidents to our Board of Directors as described above, our IT personnel regularly provide our Board of Directors an update on cybersecurity during each of its quarterly meetings regarding the effectiveness of technical and human security controls, cybersecurity training program compliance, internal and third-party cybersecurity incidents, and cybersecurity risks.
Aside from more immediate reporting of cybersecurity incidents it considers to be significant or potentially significant to our board of directors as described above, our IT personnel regularly provide our board of directors an update on our cybersecurity risk management program during each of its quarterly meetings, including regarding the effectiveness of technical and human security controls, cybersecurity training program compliance, internal and third-party cybersecurity incidents, and cybersecurity risks.
Our information technology (“IT”) personnel, together with third party firms, continuously work to identify, assess, and manage cybersecurity risks in alignment with cybersecurity standards, [including the National Institute of Standards and Technology (NIST) Cyber Security Framework, NIST 800-53, NIST 800-82, and International Electrotechnical Commission 62443].
Our information technology (“IT”) personnel, together with third party firms, work to identify, assess, and manage cybersecurity risks using various cybersecurity standards as a guide, including the National Institute of Standards and Technology (NIST) Cyber Security Framework, NIST 800-53, NIST 800-82, and International Electrotechnical Commission 62443.
ITEM 1C. — CYBERSECURITY We maintain a cyber risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats.
ITEM 1C. — CYBERSECURITY We maintain a cyber risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats, and intended to protect the confidentiality, integrity, and availability of our critical systems and information.
Our executive management team and Board of Directors are periodically updated regarding the status of, and adjustments to, our cybersecurity program. To protect our technology systems from cybersecurity threats, we use various security tools that help prevent, identify, escalate, investigate, resolve, and recover from identified vulnerabilities and security incidents in a timely manner.
To protect our technology systems from cybersecurity threats, we conduct security risk assessments and use various security tools designed to help prevent, identify, escalate, investigate, resolve, and recover from identified vulnerabilities and security incidents in a timely manner.
These include, but are not limited to, internal reporting, monitoring, and detection tools to assist us in identifying vulnerabilities in our products before they are exploited by malicious threat actors. 38 We have an Incident Response Plan that defines and documents procedures for assessing, identifying, and managing a cybersecurity incident.
These include, but are not limited to, internal reporting, monitoring, and detection tools designed to assist us in identifying vulnerabilities in our products before they are exploited by malicious threat actors. We use external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes.
Removed
Were a cybersecurity incident to occur that was determined to be material by our Incident Response Team, including executive management, then our Board of Directors would be notified.
Added
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use such frameworks as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. Our executive management team and board of directors are periodically updated by IT personnel regarding the status of, and adjustments to, our cybersecurity program.
Removed
Should any incidents occur that have a preliminary severity rating of high or critical, our Incident Response Team would confer with our Board of Directors to determine whether to report the cybersecurity incident in our public filings.
Added
IT personnel are principally responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents. Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Removed
No unauthorized access to customer, vendor, supplier, joint venture, employee or our data occurred as a result of cybersecurity incidents against us that has had a material adverse effect on our business, operations, or consolidated financial condition.
Added
We have a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile. Our Incident Response Plan defines and documents procedures for assessing, identifying, and managing a cybersecurity incident.
Added
Our board of directors considers cybersecurity risk as part of its risk oversight function, including oversight of management’s implementation of our cybersecurity risk management program.
Added
Our IT department is primarily responsible for assessing and managing material risks from cybersecurity threats. The IT department has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity and IT personnel and our external cybersecurity consultants.
Added
Our IT personnel take steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include: threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment. 39 We have not identified risks from known cybersecurity threats, including as a result of any unauthorized access to customer, vendor, supplier, joint venture, employee or our data occurred as a result of cybersecurity incidents against us that have materially affected us, including our operations, business strategy, results of operations, or consolidated financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThis table does not include mining activity prior to our acquisition of the Blair mine. 2024 2023 2022 (millions of tons) Silica Sand Oakdale mine 4.9 4.6 4.9 Ottawa mine 0.6 0.9 1.1 Blair mine 1.7 0.6 0.0 7.2 6.1 6.0 Summary of Mineral Reserves and Resources Supplies of high-quality Northern White frac sand are limited to select areas, predominantly in western Wisconsin and limited areas of Minnesota and Illinois.
Biggest changeAll required permits have been secured, and the associated conditions are consistent with those customarily imposed for permits of this nature, including maximum emissions thresholds, bonding requirements, and similar obligations. 42 Summary of Annual Production The table below shows annual dry tons produced at our mining properties for the years ended December 31, 2025, 2024 and 2023. 2025 2024 2023 (millions of tons) Silica Sand Oakdale mine 5.0 4.9 4.6 Ottawa mine 0.7 0.6 0.9 Blair mine 1.6 1.7 0.6 7.3 7.2 6.1 Summary of Mineral Reserves and Resources Supplies of high-quality Northern White frac sand are limited to select areas, predominantly in western Wisconsin and limited areas of Minnesota, Illinois and Missouri.
Our premium sand is used as proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation.
Our premium sand is used as proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation.
Geographically, the Ottawa site is located at approximately 41° 20’48.6” N latitude and 88° 57’18.9” W longitude. 45 The Ottawa site includes approximately 819 acres that we own outright. The mine site was initially developed in 2014 by Eagle Materials Inc., a Delaware corporation (“Eagle”), as a wash plant that railed wet sand to Corpus Christi, TX.
Geographically, the Ottawa site is located at approximately 41° 20’48.6” N latitude and 88° 57’18.9” W longitude. 47 The Ottawa site includes approximately 819 acres that we own outright. The mine site was initially developed in 2014 by Eagle Materials Inc., a Delaware corporation (“Eagle”), as a wash plant that railed wet sand to Corpus Christi, TX.
We began operations at the Blair facility in the second quarter of 2023. The Blair facility has approximately 2.9 million tons of total annual processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway. We pay royalties of approximately $1.75 per ton with certain annual minimum payments.
We began operations at the Blair facility in the second quarter of 2023. The Blair facility has approximately 2.9 million tons of total annual processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway. We pay royalties of approximately $1.70 per ton with certain annual minimum payments.
ITEM 2. — PROPERTIES Overview of our Properties and Logistics As of December 31, 2024, we owned and operated three frac sand mines and related processing facilities in Oakdale, Wisconsin; Ottawa, Illinois; and Blair, Wisconsin. Also, in addition to the onsite transloading capabilities at our Oakdale and Blair mines, we own nearby transloading facilities in Byron, Wisconsin and Peru, Illinois.
ITEM 2. — PROPERTIES Overview of our Properties and Logistics As of December 31, 2025, we owned and operated three frac sand mines and related processing facilities in Oakdale, Wisconsin; Ottawa, Illinois; and Blair, Wisconsin. Also, in addition to the onsite transloading capabilities at our Oakdale and Blair mines, we own nearby transloading facilities in Byron, Wisconsin and Peru, Illinois.
As of December 31, 2024, our individually material mining properties, as determined in accordance with subpart 1300 of Regulation S-K, were the Oakdale, Wisconsin mine and processing facility (“Oakdale”), Ottawa, Illinois mine and processing facility (“Ottawa”), and the Blair, Wisconsin facility (“Blair”).
As of December 31, 2025, our individually material mining properties, as determined in accordance with subpart 1300 of Regulation S-K, were the Oakdale, Wisconsin mine and processing facility (“Oakdale”), Ottawa, Illinois mine and processing facility (“Ottawa”), and the Blair, Wisconsin mine and processing facility (“Blair”).
Only material that can be economically, safely, and legally extracted is contained in these ore reserve estimates. 44 Ottawa, Illinois The Ottawa site is a surface proppant sand mining and processing operation located approximately three miles east of the town of Ottawa, Illinois in LaSalle County, Illinois.
Only material that can be economically, safely, and legally extracted is contained in these reserve estimates. 46 Ottawa, Illinois The Ottawa site is a surface proppant sand mining and processing operation located approximately three miles east of the town of Ottawa, Illinois in LaSalle County, Illinois.
Key assumptions and parameters relating to the mineral reserves at the Oakdale site are discussed in Sections 11.0 and 12.0, respectively, of the Oakdale TRS.
Key assumptions and parameters relating to the mineral reserves at the Blair site are discussed in Sections 11.0 and 12.0, respectively, of the Blair TRS.
For more information on our resources and reserves, please refer to Exhibit 10.25, the Technical Report Summary for our Ottawa mine. 46 Key assumptions and parameters relating to the mineral reserves at the Ottawa site are discussed in Sections 11.0 and 12.0, respectively, of the Utica TRS.
For more information on our resources and reserves, please refer to Exhibit 10.12, the Technical Report Summary for our Ottawa mine. 48 Key assumptions and parameters relating to the mineral reserves at the Ottawa site are discussed in Sections 11.0 and 12.0, respectively, of the Ottawa TRS.
For more information on our resources and reserves, please refer to Exhibit 10.26, the Technical Report Summary for our Blair site. Key assumptions and parameters relating to the mineral reserves at the Blair site are discussed in Sections 11.0 and 12.0, respectively, of the Blair TRS.
For more information on our resources and reserves, please refer to Exhibit 10.11, the Technical Report Summary for our Oakdale site. 45 Key assumptions and parameters relating to the mineral reserves at the Oakdale site are discussed in Sections 11.0 and 12.0, respectively, of the Oakdale TRS.
Only material that can be economically, safely, and legally extracted is contained in these ore reserve estimates. 47 Blair, Wisconsin The Blair site is a surface proppant sand mining and processing operation located approximately 3 miles southwest of the town of Taylor, Wisconsin in Trempealeau County, Wisconsin.
Only material that can be economically, safely, and legally extracted is contained in these ore reserve estimates. 49 Blair, Wisconsin The Blair site is a surface proppant sand mining and processing operation located approximately 3 miles southwest of the town of Taylor, Wisconsin in Trempealeau and Jackson Counties, Wisconsin.
Geographically, the Blair site is located at approximately 44° 17’44.0” N latitude and 91° 10’05.5” W longitude. 48 The Blair site includes approximately 1,285 acres that we own outright. The mine site was initially developed in 2016 by HCR and shut down in 2020 due to the COVID-19 pandemic. On March 4, 2022, we acquired the Blair facility.
Geographically, the Blair site is located at approximately 44° 17’44.0” N latitude and 91° 10’05.5” W longitude. 50 The Blair site includes approximately 1,285 acres that we own outright. The mine site was initially developed in 2016 by Hi-Crush Inc., (“HCR”) and shut down in 2020 due to the COVID-19 pandemic. On March 4, 2022, we acquired the Blair facility.
The total net book value of the Ottawa facility and related transload real property and tangible assets as of December 31, 2024 was $39.2 million. Current mining at the Ottawa facility is excavated using conventional surface mining methods. The first step in the mining process is the removal of the overburden from the sandstone layer.
The total net book value of the Ottawa facility and related transload real property and tangible assets as of December 31, 2025 was $38.9 million. Current mining at the Ottawa facility is excavated using conventional surface mining methods. The first step in the mining process is the removal of the overburden from the sandstone layer.
The total net book value of the Oakdale facility’s real property and tangible assets as of December 31, 2024 was $101.6 million. Current mining at the Oakdale facility is excavated using conventional surface mining methods. The first step in the mining process is the removal of the overburden from the sandstone layer.
The total net book value of the Oakdale facility’s real property and tangible assets as of December 31, 2025 was $95.8 million. Current mining at the Oakdale facility is excavated using conventional surface mining methods. The first step in the mining process is the removal of the overburden from the sandstone layer.
The site has no leased property. Royalties are paid on certain grades of silica sand in the estimated amount of $1.75/ton with certain minimum annual payments. Our Blair facility uses a surface mining technique to produce high-quality Northern White Sand. The processing plant uses natural gas, propane, and electricity to make various grades of high-quality Northern White Sand.
Royalties are paid on certain grades of silica sand in the estimated amount of $1.70/ton with certain minimum annual payments. Our Blair facility uses a surface mining technique to produce high-quality Northern White Sand. The processing plant uses natural gas, propane, and electricity to make various grades of high-quality Northern White Sand.
The total net book value of the Blair facility real property and tangible assets as of December 31, 2024 was $18.1 million. We began operating the Blair facility in the second quarter of 2023. Current mining at the Blair facility is excavated using conventional surface mining methods.
The total net book value of the Blair facility real property and tangible assets as of December 31, 2025 was $20.6 million. We began operating the Blair facility in the second quarter of 2023. Current mining at the Blair facility is excavated using conventional surface mining methods.
Year Ended December 31, Change 2024 2023 Volumes Percentage (millions of tons) Proven 94 95 -1 (1) % Probable 32 32 0 — % Saleable 126 127 -1 (1) % When estimating mineral reserves, silica product pricing was assumed at $20/ton. Only one commodity (silica sand) is mined, processed and sold at the Ottawa site.
Year Ended December 31, Change 2025 2024 Volumes Percentage (millions of tons) Proven 94 94 0 — % Probable 31 32 -1 (3) % Saleable 125 126 -1 (1) % When estimating mineral reserves, silica product pricing was assumed at $24.71/ton. Only one commodity (silica sand) is mined, processed and sold at the Ottawa site.
As such, the Blair site services multiple end markets, such as glass, building products, foundry, fillers and extenders, chemicals and oil and gas proppants. We believe that the Blair facility and its operations have been maintained in good condition.
The Blair site services primarily oil and gas markets with the ability to service additional markets such as glass, building products, foundry, fillers and extenders and chemicals. We believe that the Blair facility and its operations have been maintained in good condition.
Only material that can be economically, safely, and legally extracted is contained in these ore reserve estimates. 49 Internal Controls Disclosure The current year reported reserves have taken the previously reported amounts and subtracted excavation and mining activity to deduce the 2024 reserves.
Only material that can be economically, safely, and legally extracted is contained in these ore reserve estimates. 51 Internal Controls Disclosure The current year reported reserves have taken the previously reported amounts and subtracted excavation and mining activity to deduce the 2025 reserves and revised to update for changes in surface topography and reserve boundaries.
As such, the application of minimum mining thicknesses, maximum stripping ratios (the ratio of waste to sand excavated), or cut-off grades is not generally considered in the estimation of silica sand resources for the Blair site. The decrease in reserves from 2023 to 2024 is primarily attributable to excavation and mining activity in 2024.
As such, the application of minimum mining thicknesses, maximum stripping ratios (the ratio of waste to sand excavated), or cut-off grades is not generally considered in the estimation of silica sand resources for the Blair site.
Production of silica sand is driven by market demand, and production can be modified in response to that demand. As such, the application of minimum mining thicknesses, maximum stripping ratios (the ratio of waste to sand excavated), or cut-off grades is not generally considered in the estimation of silica sand resources for the Oakdale site.
As such, the application of minimum mining thicknesses, maximum stripping ratios (the ratio of waste to sand excavated), or cut-off grades is not generally considered in the estimation of silica sand resources for the Oakdale site.
We have no inferred resources. 42 Material Mine Site Descriptions Oakdale, Wisconsin The Oakdale site is a surface proppant sand mining and processing operation located approximately 1 mile southwest of the town of Oakdale, Wisconsin in Monroe County, Wisconsin. Geographically, the Oakdale site is located at approximately 43° 57’06.1” N latitude and 90° 24’13.0” W longitude.
We have no inferred resources. 43 Material Mine Site Descriptions Oakdale, Wisconsin The Oakdale site is a surface proppant sand mining and processing operation located approximately 1 mile southwest of the town of Oakdale, Wisconsin in Monroe County, Wisconsin.
This ownership includes subsurface mineral and water rights. The site has no leased property. Royalties are paid in the amount of $0.50 per ton of 70-mesh and coarser substrate. Our Oakdale facility is a surface mining operation involving heavy equipment and the hydraulic transfer of material to the processing plant.
We are not a lessor to any portion of this property. Royalties are paid in the amount of $0.50 per ton of 70-mesh and coarser substrate. Our Oakdale facility is a surface mining operation involving heavy equipment and the hydraulic transfer of material to the processing plant.
Through multiple expansions, the Oakdale facility currently has an annual processing capacity of 5.5 million tons. 43 The site is accessible by public roads and a Canadian Pacific railroad spur. Our Oakdale site has an extensive railcar loading, storage, and handling facility. The Oakdale site is connected to the local electrical and natural gas distribution systems.
Operations began at our Oakdale site in July 2012 with 1.1 million tons of annual processing capacity. Through multiple expansions, the Oakdale facility currently has an annual processing capacity of 5.5 million tons. The site is accessible by public roads and a Canadian Pacific railroad spur. Our Oakdale site has an extensive railcar loading, storage, and handling facility.
As of December 31, 2024, we had three operating mines and related processing facilities. 40 Oakdale, Wisconsin We, through Smart Sand, Inc. and Smart Sand Oakdale, LLC, its wholly-owned subsidiary, operate a surface mine and silica sand processing plant near Oakdale, Wisconsin. The Oakdale mine includes a total of 1,256 acres that are owned outright by Smart Sand, Inc.
As of December 31, 2025, we had three operating mines and related processing facilities. 41 Oakdale, Wisconsin We operate a surface mine and silica sand processing plant near Oakdale, Wisconsin. The Oakdale mine includes a total of 1,256 acres that are owned outright by us. This ownership includes subsurface mineral and water rights.
There are no royalties associated with this property. Our Ottawa facility is a surface mining operation involving heavy equipment and the hydraulic transfer of material to the processing plant. The processing plant uses natural gas, propane, and electricity to produce various grades of high-quality Northern White Sand.
Our Ottawa facility is a surface mining operation involving heavy equipment and the hydraulic transfer of material to the processing plant. The processing plant uses natural gas, propane, and electricity to produce various grades of high-quality Northern White Sand. The Ottawa facility is regulated by the Illinois Department of Natural Resources, which requires a Surface Mining Permit and Reclamation Plan.
All required permits are secured, and the site is operating in full compliance. Blair Wisconsin We began operating the Blair mine in the second quarter of 2023. The Blair mine includes a total of 1,285 acres that are owned outright by Smart Sand Blair, a wholly-owned subsidiary of Smart Sand, Inc. This ownership includes subsurface mineral and water rights.
Blair, Wisconsin We began operating the Blair mine in the second quarter of 2023. The Blair mine includes a total of 1,285 acres that are owned outright by us. This ownership includes subsurface mineral and water rights. The site has no leased property.
The decrease in reserves from 2023 to 2024 is primarily attributable to excavation and mining activity in 2024. For more information on our resources and reserves, please refer to Exhibit 10.24, the Technical Report Summary for our Oakdale site.
The decrease in reserves from 2024 to 2025 is primarily attributable to excavation and mining activity in 2025 and revision due to updated surface topography and refinement of reserve boundaries from our previous report. For more information on our resources and reserves, please refer to Exhibit 10.13, the Technical Report Summary for our Blair site.
The following table summarizes our mineral reserves as of December 31, 2024: Total Saleable Reserves Proven Reserves Probable Reserves (millions of tons) Silica Sand Oakdale mine (1) 238 133 105 Ottawa mine (2) 126 94 32 Blair mine (3) 112 112 0 Total Reserves 476 339 137 (1) Economic evaluation for Oakdale is based on $20.00/ton average minegate pricing as of September 2021, with no escalation.
The following table summarizes our mineral reserves as of December 31, 2025: Total Saleable Reserves Proven Reserves Probable Reserves (millions of tons) Silica Sand Oakdale mine (1) 228 125 103 Ottawa mine (2) 125 94 31 Blair mine (3) 109 109 0 Total Reserves 462 328 134 (1) Economic evaluation for Oakdale is based on $23.08/ton average minegate pricing as of December 31, 2025, with no escalation.
The Ottawa operation has obtained the necessary permits. Air emissions are regulated by the Illinois Environmental Protection Agency. A Title V permit for air emissions is currently issued to Northern White Sand, which is our wholly owned subsidiary. We monitor air emissions and have all required permits.
The Ottawa operation has obtained the necessary permits. Air emissions are regulated by the Illinois Environmental Protection Agency. We have been issued a Title V permit for air emissions.
(2) Economic evaluation for Ottawa is based on $20.00/ton average minegate pricing as of September 2021, with no escalation. (3) Economic evaluation for Blair is based on $36.00/ton average minegate pricing, based on 2023 forecast, with no escalation.
(2) Economic evaluation for Ottawa is based on $24.71/ton average minegate pricing as of December 31, 2025, with no escalation. (3) Economic evaluation for Blair is based on $24.96/ton average minegate pricing, as of December 31, 2025, with no escalation.
These techniques allow the Oakdale site to meet a variety of focused specifications on product composition from customers. As such, the Oakdale site services multiple end markets, such as glass, building products, foundry, fillers and extenders, chemicals and oil and gas proppants. We believe that the Oakdale facility and its operating equipment are maintained in good working condition.
The Oakdale site services primarily oil and gas markets with the ability to service additional markets such as glass, building products, foundry, fillers and extenders and chemicals. We believe that the Oakdale facility and its operating equipment are maintained in good working condition.
All water onsite is provided through private wells and ponds supplied with recycled process water and groundwater pumped from the active mine. The site has offices holding administrative, engineering, and operations staff. In addition, there are several buildings that house the processing facilities, plant maintenance and support facilities.
The Oakdale site is connected to the local electrical and natural gas distribution systems. All water onsite is provided through private wells and ponds supplied with recycled process water and groundwater pumped from the active mine. The site has offices holding administrative, engineering, and operations staff.
Year Ended December 31, Change 2024 2023 Volumes Percentage (millions of tons) Proven 112 114 -2 (2) % Probable 0 0 0 Not Meaningful Saleable 112 114 -2 (2) % When estimating mineral reserves, silica product pricing was assumed at $36/ton, which represents our budget for 2024.
A summary of Blair’s mineral resources and reserves as of December 31, 2025 and 2024 is shown below. Year Ended December 31, Change 2025 2024 Volumes Percentage (millions of tons) Proven 109 112 -3 (3) % Probable 0 0 0 Not Meaningful Saleable 109 112 -3 (3) % When estimating mineral reserves, silica product pricing was assumed at $24.96/ton.
We acquired the land and developed the site as a purpose-built silica mine to serve frac sand customers. Since acquiring the facility, we renovated and upgraded its processing capabilities to enable it to produce multiple products through various processing methods, including washing, hydraulic sizing and screening.
Since acquiring the facility, we renovated and upgraded its processing capabilities to enable it to produce multiple products through various processing methods, including washing, hydraulic sizing and screening. These techniques allow the Oakdale site to meet a variety of focused specifications on product composition from customers.
We have two long-term surface mining leases for properties located in the Permian Basin in Texas that are available for future development. The first site consists of 1,772 acres in Winkler County, Texas. This location is adjacent to the Texas & New Mexico Railway (TXN) short line with direct access to State Highway 18.
The first site consists of 1,772 acres in Winkler County, Texas. This location is adjacent to the Texas & New Mexico Railway (TXN) short line with direct access to State Highway 18. The second site consists of 2,447 acres in Crane County, Texas. This location has direct access to Interstate Highway 20.
The Oakdale site includes approximately 1,256 acres that we own outright. Royalties are paid in the amount of $0.50 per ton of 70-mesh and coarser substrate. Operations began at our Oakdale site in July 2012 with 1.1 million tons of annual processing capacity.
Geographically, the Oakdale site is located at approximately 43° 57’06.1” N latitude and 90° 24’13.0” W longitude. 44 The Oakdale site includes approximately 1,256 acres that we own outright. Royalties are paid in the amount of $0.50 per ton of 70-mesh and coarser substrate.
We also own approximately 959 acres in Jackson County, Wisconsin (“Hixton”). The Hixton site is fully permitted to initiate operations and is available for future development. Based on our preliminary testing, we believe there are sufficient quantities on these sites to establish reserves in the future. We have no immediate plans to further develop this site.
Based on our preliminary testing, we believe there are sufficient quantities on these sites to establish reserves in the future. We have no immediate plans to further develop this site. We have two long-term surface mining leases for properties located in the Permian Basin in Texas that are available for future development.
The Oakdale facility operations are predominantly regulated by Monroe County, Wisconsin through the non-metallic mining and reclamation permit. Air emissions are regulated by the Wisconsin Department of Natural Resources, Bureau of Air Management. All required permits are secured, and the site is operating in full compliance.
The processing plant uses natural gas, propane, and electricity to produce various grades of high-quality Northern White Sand. The Oakdale facility operations are predominantly regulated by Monroe County, Wisconsin through the non-metallic mining and reclamation permit. Air emissions are regulated by the Wisconsin Department of Natural Resources, Bureau of Air Management.
Year Ended December 31, Change 2024 2023 Volumes Percentage (millions of tons) Proven 133 138 -5 (4) % Probable 105 105 0 — % Saleable 238 243 -5 (2) % When estimating mineral reserves, silica product pricing was assumed at $20/ton. Only one commodity (silica sand) is mined, processed and sold at the Oakdale site.
A summary of Oakdale’s mineral resources and reserves as of December 31, 2025 and 2024 is shown below. Year Ended December 31, Change 2025 2024 Volumes Percentage (millions of tons) Proven 125 133 -8 (6) % Probable 103 105 -2 (2) % Saleable 228 238 -10 (4) % When estimating mineral reserves, silica product pricing was assumed at $23.08/ton.
The decrease in reserves from 2023 to 2024 is primarily attributable to excavation and mining activity in 2024.
The decrease in reserves from 2024 to 2025 is primarily attributable to excavation and mining activity in 2025 and revision due to updated surface topography and refinement of reserve boundaries from our previous report.
Ottawa, Illinois We, through Northern White Sand LLC, a wholly-owned subsidiary of Smart Sand, Inc., operate a surface mine and a silica sand processing plant near Ottawa, Illinois. The Ottawa mine includes a total of 819 acres that are owned outright by us. This ownership includes subsurface mineral and water rights. The site has no leased property.
The Ottawa mine includes a total of 819 acres that are owned outright by us. This ownership includes subsurface mineral and water rights. We are not a lessor to any portion of this property. There are no royalties associated with this property.
We do not consider this site to be a mining property as we have no immediate plans to resume processing frac sand operations at this facility, though its administrative facilities and proximity to our Oakdale facility allow us to utilize the property to create synergies with our existing operations in Wisconsin.
We do not consider this site to be a mining property as we have no immediate plans to resume processing frac sand operations at this facility. We also own approximately 959 acres in Jackson County, Wisconsin (“Hixton”). The Hixton site is fully permitted to initiate operations and is available for future development.
The second site consists of 2,447 acres in Crane County, Texas. This location has direct access to Interstate Highway 20. Based on our preliminary testing, we believe there are sufficient quantities on these sites to establish reserves in the future. We have no immediate plans to further develop these sites.
Based on our preliminary testing, we believe there are sufficient quantities on these sites to establish reserves in the future. We have no immediate plans to further develop these sites. 40 The map below shows the locations of our mine sites, rail terminals and transload facilities, manufacturing facilities and administrative facilities.
A reclamation plan for restoring the site to an agreed upon state is in place with Jackson County and the City of Blair. The Blair site has secured necessary permits and is in compliance with all required licenses, registrations, and permits. A summary of Blair’s mineral resources and reserves as of December 31, 2024 and 2023 is shown below.
A reclamation plan for restoring the site to an agreed upon state is in place with Jackson County and the City of Blair. The Blair site has secured necessary permits, which have conditions commonly associated with such permits; the site has experienced no violations or fines that would be viewed as a significant encumbrance.
Previously established modeling and analysis of our reserves has been developed by our personnel, reviewed by several levels of internal management and, in the case of the three material properties, reviewed by John T. Boyd. This section summarizes the internal control considerations for our development of estimations, including assumptions, used in resource and reserve analysis and modeling.
Economic considerations and mining operation discussion have been updated to reflect current results and forward-looking budgets. Modelling and analysis of our reserves has been developed by our personnel, reviewed by several levels of internal management and, in the case of the three material properties, reviewed by John T. Boyd as the qualified person. John T.
We have successfully completed the annual outside surveillance audit of our Environmental Management System to the ISO 14001:2015. The Oakdale site has secured necessary permits and is operating in compliance with all required licenses, registrations, and permits. A summary of Oakdale’s mineral resources and reserves as of December 31, 2024 and 2023 is shown below.
We have successfully completed the annual outside surveillance audit of our Environmental Management System to the ISO 14001:2015. The Oakdale site has secured necessary permits, which have conditions commonly associated with such permits; the site has experienced no violations or fines that would be viewed as a significant encumbrance.
The Ottawa site has secured necessary permits and is operating in compliance with all required licenses, registrations, and permits. A summary of Ottawa’s mineral resources and reserves as of December 31, 2024 and 2023 is shown below.
We monitor air emissions and have secured required permits, which have conditions commonly associated with such permits; the site has experienced no violations or fines that would be viewed as a significant encumbrance. A summary of Ottawa’s mineral resources and reserves as of December 31, 2025 and 2024 is shown below.
The Ottawa facility is regulated by the Illinois Department of Natural Resources, which requires a Surface Mining Permit and Reclamation Plan. The mine reclamation plan is submitted to both the LaSalle County, Illinois and Village of Utica, Illinois Boards. Air emissions are regulated by the Illinois Environmental Protection Agency.
The mine reclamation plan is submitted to both the LaSalle County, Illinois and Village of Utica, Illinois Boards. Air emissions are regulated by the Illinois Environmental Protection Agency. All required permits have been secured, and the associated conditions are consistent with those customarily imposed for permits of this nature, including maximum emissions thresholds, bonding requirements, and similar obligations.
Removed
We closed our leased 56,000 square foot facility in Saskatoon, Saskatchewan, Canada where we previously manufactured our SmartSystems wellsite proppant storage solutions. We moved the manufacturing capabilities to existing space at our Oakdale facility in the United States. 39 The map below shows the locations of our mine sites, rail terminals and transload facilities, manufacturing facilities and administrative facilities.
Added
All required permits have been secured, and the associated conditions are consistent with those customarily imposed for permits of this nature, including maximum emissions thresholds, bonding requirements, and similar obligations. Ottawa, Illinois We operate a surface mine and a silica sand processing plant near Ottawa, Illinois.
Removed
The processing plant uses natural gas, propane, and electricity to produce various grades of high-quality Northern White Sand.
Added
In addition, there are several buildings that house the processing facilities, plant maintenance and support facilities. We acquired the land and developed the site as a purpose-built silica mine to serve frac sand customers.
Removed
Our premium sand is used as proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation.
Added
Only one commodity (silica sand) is mined, processed and sold at the Oakdale site. Production of silica sand is driven by market demand, and production can be modified in response to that demand.
Removed
Our premium sand is used as proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation.
Added
The decrease in reserves from 2024 to 2025 is primarily attributable to excavation and mining activity in 2025 and revision due to updated surface topography and refinement of reserve boundaries from our previous report.
Removed
All required permits are secured, and the site is operating in full compliance. 41 Summary of Annual Production The table below shows annual dry tons produced at our mining properties for the years ended December 31, 2024, 2023 and 2022.
Added
Boyd is an independent geological consultant that is not affiliated with Smart Sand or any other entity with an ownership, royalty, or other interest in the property subject of the TRS reports. This section summarizes the internal control considerations for our development of estimations, including assumptions, used in resource and reserve analysis and modeling.
Removed
There have been no material changes to our mining operations or economic considerations since the initial reserves were established in the TRS reports from 2021 and 2022.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNote 16 - Commitments and Contingencies - Litigation of the notes to the consolidated financial statements in this Form 10-K for the year ended December 31, 2024.
Biggest changeNote 16 - Commitments and Contingencies - Litigation of the notes to the consolidated financial statements in this Form 10-K for the year ended December 31, 2025.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. — MINE SAFETY DISCLOSURES We are committed to maintaining a culture that prioritizes mine safety. We believe that our commitment to safety, the environment and the communities in which we operate is critical to the success of our business. Our sand mining operations are subject to mining safety regulation. The U.S.
Biggest changeITEM 4. — MINE SAFETY DISCLOSURES We are committed to maintaining a culture that prioritizes mine safety. We believe that our commitment to safety, the environment and the communities in which we operate is critical to the success of our business. Our sand mining operations are 52 subject to mining safety regulation. The U.S.
Mining Safety and Health Administration (“MSHA”) is the primary regulatory 50 organization governing frac sand mining and processing. Accordingly, MSHA regulates quarries, surface mines, underground mines and the industrial mineral processing facilities associated with and located at quarries and mines.
Mining Safety and Health Administration (“MSHA”) is the primary regulatory organization governing frac sand mining and processing. Accordingly, MSHA regulates quarries, surface mines, underground mines and the industrial mineral processing facilities associated with and located at quarries and mines.
Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Report. 51 PART II
Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Report. 53 PART II
We do not expect to need to make any significant changes in operations or infrastructure to comply with the new rules. We also adhere to NISA’s respiratory protection program, and ensures that workers are provided with fitted respirators and ongoing radiological monitoring.
We do not expect to need to make any significant changes in operations or infrastructure to comply with the new rules. We also adhere to NISA’s respiratory protection program, and ensure that workers are provided with fitted respirators and ongoing radiological monitoring.
Following passage of The Mine Improvement and New Emergency Response Act of 2006, MSHA significantly increased the numbers of citations and orders charged against mining operations. The dollar penalties assessed for citations issued has also increased in recent years.
Following passage of The Mine Improvement and New Emergency Response Act of 2006, MSHA significantly increased the numbers of citations and orders charged against mining operations. The dollar penalties assessed for citations issued have also increased in recent years.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs October 2024 — $ — — 4,444,444 November 2024 — $ — — 4,444,444 December 2024 — $ — — 4,444,444 — $ — — At December 31, 2024, the maximum number of shares that the Company may repurchase under the current repurchase authority was 4,444,444 shares.
Biggest changeTotal number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares (or approximate dollar value) that may yet be purchased under the plans or programs October 2025 — $ — — $ 7,904,773 November 2025 — $ — — $ 7,904,773 December 2025 — $ — — $ 7,904,773 — $ — — On February 23, 2026, our board of directors approved a share repurchase program authorizing us to repurchase up to $20.0 million of its outstanding shares of common stock.
The graph assumes $100 was invested on December 31, 2019, in our common stock, the Russell 3000, and the Standard and Poor’s Small Cap 600 GICS Oil & Gas Equipment & Services Sub-Industry Index. The cumulative total return assumes the reinvestment of all dividends. The information contained in this Smart Sand, Inc.
The graph assumes $100 was invested on December 31, 2020, in our common stock, the Russell 3000, and the Standard and Poor’s Small Cap 600 GICS Oil & Gas Equipment & Services Sub-Industry Index. The cumulative total return assumes the reinvestment of all dividends. The information contained in this Smart Sand, Inc.
Comparative Stock Performance Graph section shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of 52 Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act.
Comparative Stock Performance Graph section shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of 54 Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act.
Unregistered Sales of Equity Securities and Use of Proceeds During the three months ended December 31, 2024, no shares were sold by the Company without registration under the Securities Act of 1933.
Unregistered Sales of Equity Securities and Use of Proceeds During the three months ended December 31, 2025, no shares were sold by the Company without registration under the Securities Act of 1933.
Our board of directors declared a special dividend of $0.10 per share of common stock on October 3, 2024, which was paid on October 28, 2024 to stockholders of record at the close of business on October 15, 2024. We can give no assurance that we will pay any cash dividends on our common stock in the future.
Our board of directors declared an additional special dividend of $0.05 per share of common stock on November 18, 2025, which was paid on December 16, 2025 to stockholders of record at the close of business on December 2, 2025. We can give no assurance that we will pay any cash dividends on our common stock in the future.
Prior to that date, there was no public market for our stock. Holders of Record On February 21, 2025, there were 42,876,756 shares of our common stock outstanding, which were held by approximately 31 stockholders of record.
Prior to that date, there was no public market for our stock. Holders of Record On February 19, 2026, there were 43,538,189 shares of our common stock outstanding, which were held by 32 stockholders of record.
Added
Our board of directors declared a special dividend of $0.10 per share of common stock on July 23, 2025, which was paid on August 14, 2025 to stockholders of record at the close of business on August 4, 2025.
Added
The plan will take effect on April 4, 2026 after completion of our current share repurchase plan and will continue through April 3, 2028. The timing, manner, price, and amount of any repurchases under the share repurchase program will be determined at our discretion.
Added
Purchases may be effected through open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or other means. The Repurchase Program does not obligate us to acquire any particular amount of ordinary shares and the Repurchase Program may be modified or suspended at any time at our discretion.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+24 added−13 removed94 unchanged
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022: Year Ended December 31, Change 2023 2022 Dollars Percentage (in thousands, except percentage change) Revenues: Sand revenue $ 287,479 $ 249,324 $ 38,155 15 % SmartSystems revenue 8,494 6,416 2,078 32 % Total revenue 295,973 255,740 40,233 16 % Cost of goods sold: Sand cost of goods sold 247,181 220,006 27,175 12 % SmartSystems cost of goods sold 7,237 6,143 1,094 18 % Total cost of goods sold 254,418 226,149 28,269 13 % Gross profit 41,555 29,591 11,964 40 % Operating expenses: Selling, general and administrative 38,722 30,769 7,953 26 % Depreciation and amortization 2,535 2,244 291 13 % Loss (gain) on disposal of fixed assets, net 1,802 (294) 2,096 (713) % Total operating expenses 43,059 32,719 10,340 32 % Operating income (loss) (1,504) (3,128) 1,624 (52) % Other (expenses) income: Interest expense, net (1,272) (1,608) 336 (21) % Other income 524 828 (304) (37) % Total other (expenses) income, net (748) (780) 32 (4) % Income (loss) before income tax benefit (2,252) (3,908) 1,656 (42) % Income tax expense (benefit) (6,901) (3,205) (3,696) 115 % Net income (loss) $ 4,649 $ (703) $ 5,352 (761) % Revenue Total revenue was $296.0 million for the year ended December 31, 2023 compared to $255.7 million for the year ended December 31, 2022.
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) GAAP Results of Operations Year Ended December 31, 2025 compared to the Year Ended December 31, 2024: Year Ended December 31, Change 2025 2024 Dollars Percentage (in thousands, except percentage change) Revenues: Sand revenue $ 325,762 $ 303,590 $ 22,172 7 % SmartSystems revenue 4,391 7,782 (3,391) (44) % Total revenue 330,153 311,372 18,781 6 % Cost of goods sold: Sand cost of goods sold 287,811 258,812 28,999 11 % SmartSystems cost of goods sold 4,454 7,737 (3,283) (42) % Total cost of goods sold 292,265 266,549 25,716 10 % Gross profit 37,888 44,823 (6,935) (15) % Operating expenses: Selling, general and administrative 40,524 38,161 2,363 6 % Depreciation and amortization 2,390 2,596 (206) (8) % (Gain) loss on disposal of fixed assets, net (566) 1,062 (1,628) (153) % Total operating expenses 42,348 41,819 529 1 % Operating income (loss) (4,460) 3,004 (7,464) (248) % Other (expenses) income: Interest expense, net (1,469) (1,769) 300 (17) % Loss on extinguishment of debt — (1,341) 1,341 (100) % Other income 343 358 (15) (4) % Total other (expenses), net (1,126) (2,752) 1,626 59 % (Loss) income before income tax benefit (expense) (5,586) 252 (5,838) (2317) % Income tax (benefit) expense (6,931) (2,740) (4,191) 153 % Net income $ 1,345 $ 2,992 $ (1,647) (55) % Revenue Total revenue was $330.2 million for the year ended December 31, 2025 compared to $311.4 million for the year ended December 31, 2024.
Gross Profit Gross profit was $44.8 million and $41.6 million for the years ended December 31, 2024 and December 31, 2023, respectively.
Gross Profit Gross profit was $44.8 million and $41.6 million for the years ended December 31, 2024 and 2023, respectively.
EBITDA and Adjusted EBITDA We define EBITDA as net income, plus: (i) depreciation, depletion and amortization expense; (ii) income tax expense (benefit) and other results of operations based taxes; (iii) interest expense.
EBITDA and Adjusted EBITDA We define EBITDA as net income, plus: (i) depreciation, depletion and amortization expense; (ii) income tax expense (benefit) and other results of operations based taxes; and (iii) interest expense.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) GAAP Results of Operations Year Ended December 31, 2024 compared to the Year Ended December 31, 2023: Year Ended December 31, Change 2024 2023 Dollars Percentage (in thousands, except percentage change) Revenues: Sand revenue $ 303,590 $ 287,479 $ 16,111 6 % SmartSystems revenue 7,782 8,494 (712) (8) % Total revenue 311,372 295,973 15,399 5 % Cost of goods sold: Sand cost of goods sold 258,812 247,181 11,631 5 % SmartSystems cost of goods sold 7,737 7,237 500 7 % Total cost of goods sold 266,549 254,418 12,131 5 % Gross profit 44,823 41,555 3,268 8 % Operating expenses: Selling, general and administrative 38,161 38,722 (561) (1) % Depreciation and amortization 2,596 2,535 61 2 % Loss (gain) on disposal of fixed assets, net 1,062 1,802 (740) (41) % Total operating expenses 41,819 43,059 (1,240) (3) % Operating income (loss) 3,004 (1,504) 4,508 300 % Other (expenses) income: Interest expense, net (1,769) (1,272) (497) 39 % Loss on extinguishment of debt (1,341) — (1,341) Not meaningful Other income 358 524 (166) (32) % Total other (expenses) income, net (2,752) (748) (2,004) 268 % Income (loss) before income tax benefit 252 (2,252) 2,504 111 % Income tax expense (benefit) (2,740) (6,901) 4,161 60 % Net income (loss) $ 2,992 $ 4,649 $ (1,657) (36) % Revenue Total revenue was $311.4 million for the year ended December 31, 2024 compared to $296.0 million for the year ended December 31, 2023.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023: Year Ended December 31, Change 2024 2023 Dollars Percentage (in thousands, except percentage change) Revenues: Sand revenue $ 303,590 $ 287,479 $ 16,111 6 % SmartSystems revenue 7,782 8,494 (712) (8) % Total revenue 311,372 295,973 15,399 5 % Cost of goods sold: Sand cost of goods sold 258,812 247,181 11,631 5 % SmartSystems cost of goods sold 7,737 7,237 500 7 % Total cost of goods sold 266,549 254,418 12,131 5 % Gross profit 44,823 41,555 3,268 8 % Operating expenses: Selling, general and administrative 38,161 38,722 (561) (1) % Depreciation and amortization 2,596 2,535 61 2 % (Gain) loss on disposal of fixed assets, net 1,062 1,802 (740) (41) % Total operating expenses 41,819 43,059 (1,240) (3) % Operating income (loss) 3,004 (1,504) 4,508 (300) % Other (expenses) income: Interest expense, net (1,769) (1,272) (497) 39 % Loss on extinguishment of debt (1,341) — (1,341) Not meaningful Other income 358 524 (166) (32) % Total other (expenses), net (2,752) (748) (2,004) 268 % (Loss) income before income tax benefit (expense) 252 (2,252) 2,504 (111) % Income tax (benefit) expense (2,740) (6,901) 4,161 (60) % Net income $ 2,992 $ 4,649 $ (1,657) (36) % Revenue Total revenue was $311.4 million for the year ended December 31, 2024 compared to $296.0 million for the year ended December 31, 2023.
In 2023, we completed the installation of blending and cooling assets at our Ottawa, Illinois facility that we believe will provide new opportunities to increase our customer base in the IPS business. We expect to continue to expand and diversify to serve the major industrial 57 SMART SAND, INC.
In 2023, we completed the installation of blending and cooling assets at our Ottawa, Illinois facility that we believe will provide new opportunities to increase our customer base in the IPS business. We expect to continue to expand and diversify to serve the major industrial 59 SMART SAND, INC.
Net Income (Loss) Net income was $3.0 million for year ended December 31, 2024 compared to net income of $4.6 million for the year ended December 31, 2023.
Net Income Net Income was $3.0 million for year ended December 31, 2024 compared to net income of $4.6 million for the year ended December 31, 2023.
If the carrying value of our long-lived assets is less than the undiscounted cash flows, the assets are measured at fair value and an impairment is recorded if that fair value is less than the carrying value. During the year ended December 31, 2024, we did not record any impairment charges based on the analysis of our long-lived assets.
If the carrying value of our long-lived assets is less than the undiscounted cash flows, the assets are measured at fair value and an impairment is recorded if that fair value is less than the carrying value. During the year ended December 31, 2025, we did not record any impairment charges based on the analysis of our long-lived assets.
Additionally, we have our unit train capable transload facility approximately three miles from the Oakdale facility in Byron Township, Wisconsin, which provides us with the ability to ship sand to our customers on the Union Pacific rail network.
Additionally, we have our unit train capable transload facility approximately three miles from the Oakdale facility in Byron Township, Wisconsin, which provides us with the ability to ship sand to our customers on the Class I Union Pacific rail network.
The computation of the effective tax rate for the years ended December 31, 2024 and 2023 included modifications from the statutory rate such as income tax credits, depletion deductions, and state taxes, NOL carrybacks and carryforwards, among other items.
The computation of the effective tax rate for the year ended December 31, 2024 and 2023 included modifications from the statutory rate such as income tax credits, depletion deductions, NOL carrybacks and carryforwards and state income taxes, among other items.
We generally expect the level of drilling to correlate with long-term trends in commodity prices. Similarly, oil and natural gas production levels nationally and regionally generally tend to correlate with drilling activity. 59 SMART SAND, INC.
We generally expect the level of drilling to correlate with long-term trends in commodity prices. Similarly, oil and natural gas production levels nationally and regionally generally tend to correlate with drilling activity. 61 SMART SAND, INC.
SmartSystems revenue was $7.8 million for the year ended December 31, 2024, a decline from $8.5 million for the year ended December 31, 2023. The decline was due to lower overall utilization of our SmartSystems fleet in 2024. 60 SMART SAND, INC.
SmartSystems revenue was $7.8 million for the year ended December 31, 2024, a decline from $8.5 million for the year ended December 31, 2023. The decline was due to lower overall utilization of our SmartSystems fleet in 2024. 64 SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) • the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities; • our ability to incur and service debt and fund capital expenditures; • our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods or capital structure; and • our debt covenant compliance, as Adjusted EBITDA is a key component of critical covenants to the ABL Credit Facility.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) • the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets; • the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities; • our ability to incur and service debt and fund capital expenditures; • our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods or capital structure; and • our debt covenant compliance, as Adjusted EBITDA is a key component of critical covenants to the ABL Credit Facility.
For further discussion of contribution margin, EBITDA, Adjusted EBITDA and free cash flow, see the section entitled “Non-GAAP Financial Measures.” in this Item 7 of this Annual Report on Form 10-K. We define various terms to simplify the presentation of information in this Report. All share amounts are presented in thousands.
For further discussion of contribution margin, EBITDA, Adjusted EBITDA and free cash flow, see the section entitled “Non-GAAP Financial Measures” in this Item 7 of this Annual Report on Form 10-K. We define various terms to simplify the presentation of information in this Report. All share amounts are presented in thousands.
These sites became operational in 2024 and we believe that they provide us with the opportunity to sell additional sand to existing and potential customers in the Appalachian Basin. 55 SMART SAND, INC.
These sites became operational in 2024 and we believe that they provide us with the opportunity to sell additional sand to existing and potential customers in the Appalachian Basin. 57 SMART SAND, INC.
With this acquisition, we now have direct access to four Class I rail lines and the ability to access all Class 1 rail lines within the United States and Canada. 58 SMART SAND, INC.
With this acquisition, we now have direct access to four Class I rail lines and the ability to access all Class 1 rail lines within the United States and Canada. 60 SMART SAND, INC.
Blair, Wisconsin Our Blair facility also has a large high-quality reserve base of primarily fine-mesh sand that is contiguous to the production facility and significant logistics assets located on the Canadian National railway. We have approximately 112 million tons of proven and probable reserves and an estimated life of mine of approximately 56 years, based on expected sales volumes.
Blair, Wisconsin Our Blair facility also has a large high-quality reserve base of primarily fine-mesh sand that is contiguous to the production facility and significant logistics assets located on the Canadian National Railway. We have approximately 109 million tons of proven and probable reserves and an estimated life of mine of approximately 67 years, based on expected sales volumes.
Our VFI Equipment Financing is secured by the majority of our SmartSystems equipment. The outstanding balance under the VFI Equipment Financing as of December 31, 2024 was $8.6 million. The VFI facility amortizes to one dollar in 2028. Minimum cash payments on this facility in 2025 are $2.9 million.
Our VFI Equipment Financing is secured by the majority of our SmartSystems equipment. The outstanding balance under the VFI Equipment Financing as of December 31, 2025 was $6.6 million. The VFI facility amortizes to one dollar in 2028. Minimum cash payments on this facility in 2026 are $2.9 million.
We believe higher demand driven by increased laterals and higher amounts of sand per well completed should lead to sand prices remaining relatively stable in 2025.
We believe higher demand driven by increased laterals and higher amounts of sand per well completed should lead to sand prices remaining relatively stable in 2026.
We expect the Bakken and Marcellus formations as well as the Montney and Douvernay shale basins in Canada to continue to be key markets for us and we look to expand our market share in these key areas through our current strategic initiatives.
We expect the Bakken, Marcellus and Utica shale formations as well as the Montney and Duvernay shale basins in Canada to continue to be key markets for us and we look to expand our market share in these key areas through our current strategic initiatives.
We have approximately 238 million tons of proven and probably recoverable reserves with an estimated life of mine of approximately 60 years, based on expected sales volumes. Our Oakdale facility is purpose-built to exploit the reserve profile in place and produce high-quality frac sand.
We have approximately 228 million tons of proven and probably recoverable reserves with an estimated life of mine of approximately 71 years, based on expected sales volumes. Our Oakdale facility is purpose-built to exploit the reserve profile in place and produce high-quality frac sand.
Our on-site transportation assets include approximately nine miles of rail track in a triple-loop configuration and four railcar loading facilities that are connected to a Class I rail line owned by Canadian Pacific. This enables us to simultaneously accommodate multiple unit trains and significantly increases our efficiency in meeting our customers’ frac sand transportation needs.
Our on-site transportation assets include approximately nine miles of rail track in a triple-loop configuration and four railcar loading facilities that are connected to the Class I Canadian Pacific Railway. This enables us to simultaneously accommodate multiple unit trains and significantly increases our efficiency in meeting our customers’ frac sand transportation needs.
The increase in Adjusted EBITDA for the year ended December 31, 2024, as compared to the prior year, was primarily due to higher sales volumes and production costs savings, partially offset by declining average selling prices in the second half of 2024.
The increase in Adjusted EBITDA for the year ended December 31, 2024, as compared to the prior year, was primarily due to higher sales volumes and production costs savings, partially offset by declining average selling prices in the second half of 2024. 67 SMART SAND, INC.
Changes in the current estimate or the interest rates used for inflation or discount can have a material effect on the liability reported. In addition, due to the nature or our business, changes in mine planning can result in changes to our estimated future reclamation dates. 68 SMART SAND, INC.
Changes in the current estimate or the interest rates used for inflation or discount can have a material effect on the liability reported. In addition, due to the nature or our business, changes in mine planning can result in changes to our estimated future reclamation dates.
Other Expense / Income We incurred $1.8 million and $1.3 million of net interest expense for the years ended December 31, 2024 and 2023, respectively. We recorded a $1.3 million loss on extinguishment of debt for the year ended December 31, 2024 related to the payoff of the Oakdale facility, which was refinanced with the VFI Equipment Financing.
Other Expense / Income We incurred $1.8 million and $1.3 million of net interest expense for the years ended December 31, 2024 and 2023, respectively. We recorded a $1.3 million loss on extinguishment of debt for the year ended December 31, 2024 related to the payoff of previous fixed-rate debt, which was refinanced with the VFI Equipment Financing.
There were no borrowings outstanding on our FCB ABL Credit Facility as of December 31, 2024. Operating Leases We use leases primarily to procure certain office space, railcars and heavy equipment as part of our operations. The majority of our lease payments are fixed and determinable. Our operating lease liabilities as of December 31, 2024 were $24.5 million.
There were no borrowings outstanding on our FCB ABL Credit Facility as of December 31, 2025. Operating Leases We use leases primarily to procure certain office space, railcars and heavy equipment as part of our operations. The majority of our lease payments are fixed and determinable. Our operating lease liabilities as of December 31, 2025 were $23.2 million.
Capital expenditures for the year ended December 31, 2024 were $7.0 million compared to $23.0 million for the year ended December 31, 2023, primarily due to less growth-related capital spent in 2024 and management’s continued focus on managing costs. Free cash flow was $8.0 million for the year ended December 31, 2023.
Capital expenditures for the year ended December 31, 2024 were $7.0 million compared to $23.0 million for the year ended December 31, 2023, primarily due to less growth-related capital spent in 2024 and management’s continued focus on managing costs.
This facility is capable of handling multiple unit trains simultaneously and provides access to operating basins in the Western United States. Additionally, the CSX and BNSF rail lines, as well as industrial manufacturers in the greater Chicago area and other Midwestern metropolitan markets are within short trucking distances.
This facility is capable of handling multiple unit trains simultaneously and provides access to operating basins in the western United States. Additionally, the CSX rail line, as well as diversified industrial and commercial customers in the greater Chicago area and other Midwestern metropolitan markets are within short trucking distances.
The change in net income is attributable to an increase in operating income of $4.5 million, which was attributable to an increase in total sand volumes sold and lower operating expenses, partially offset by smaller benefit from income taxes recorded in the current period. 61 SMART SAND, INC.
The change in net income is attributable to an increase in operating income of $4.5 million which was attributable to an increase in total sand volumes sold and lower operating expenses, partially offset by smaller benefit from income taxes recorded in the 2024.
The year ended December 31, 2023 includes $271 of costs related to the asst acquisition of the Blair facility and $274 related to the Minerva, Ohio terminal. _________________________ Adjusted EBITDA was $38.8 million for the year ended December 31, 2024 compared to $33.3 million for the year ended December 31, 2023.
The year ended December 31, 2023 includes $271 of costs related to the acquisition of the Blair facility and $274 related to the Minerva, Ohio terminal. _________________________ Adjusted EBITDA was $29.9 million for the year ended December 31, 2025 compared to $38.8 million for the year ended December 31, 2024.
We expect to continue to capitalize on our three operating facilities logistics networks to maximize our product shipments, increase our railcar utilization and lower our transportation costs. 56 SMART SAND, INC.
We expect to continue to capitalize the logistics networks of our three operating facilities to maximize our product shipments, increase our railcar utilization and lower our transportation costs. 58 SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) Inventory Valuation Sand inventory is stated at the lower of cost or net realizable value using the average cost method. Costs applied to inventory include direct excavation costs, processing costs, overhead allocation, depreciation and depletion. Reserves are estimated for moisture loss and waste during production.
Inventory Valuation Sand inventory is stated at the lower of cost or net realizable value using the average cost method. Costs applied to inventory include direct excavation costs, processing costs, overhead allocation, depreciation and depletion. Reserves are estimated for moisture loss and waste during production.
The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Our actual results may materially differ from these estimates.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Our actual results may materially differ from these estimates.
Income Tax Benefit Income tax benefit was $2.7 million for the year ended December 31, 2024 compared to income tax benefit of $6.9 million for the year ended December 31, 2023. For the years ended December 31, 2024 and 2023, our effective tax rate was approximately (1087.3)% and 306.4%, respectively.
Income Tax Benefit Income tax benefit was $6.9 million for the year ended December 31, 2025 compared to income tax benefit of $2.7 million for the year ended December 31, 2024. For the years ended December 31, 2025 and 2024, our effective tax rate was approximately 124.1% and (1087.3)%, respectively.
We expect to continue to expand and diversify to serve the major industrial markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, recreation and more in 2025.
We expect to continue to expand and diversify to serve the major industrial markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail and recreational uses.
Income Tax Benefit Income tax benefit was $6.9 million for the year ended December 31, 2023 compared to income tax benefit of $3.2 million for the year ended December 31, 2022.
Income Tax Benefit Income tax benefit was $2.7 million for the year ended December 31, 2024 compared to income tax benefit of $6.9 million for the year ended December 31, 2023.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, recreation and more in 2025.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail and recreational uses.
For the years ended December 31, 2023 and 2022, our effective tax rate was approximately 306.4% and 82.0%, respectively, based on the annual effective tax rate net of discrete federal and state taxes.
For the years ended December 31, 2024 and 2023, our effective tax rate was approximately (1087.3)% and 306.4%, respectively, based on the annual effective tax rate net of discrete federal and state taxes.
We evaluate these estimates and assumptions on an ongoing basis and base our estimates on historical experience, current conditions and various other assumptions that we believe to be reasonable under the circumstances.
We evaluate these estimates and assumptions on an ongoing basis and base our estimates on historical experience, current conditions and various other assumptions that we believe to be reasonable under the circumstances. The results of these 70 SMART SAND, INC.
As discussed in the section entitled “Recent Developments” in this Item 7 of this Annual Report on form 10-K, in recent years we have added the Blair mine and two new terminals, and expanded our operations into industrial products.
As discussed in the section entitled “Recent Developments” in this Item 7 of this Annual Report on Form 10-K, in recent years we have added the Blair facility and several new terminals, along with expanding our operations into industrial products.
Our IPS business has continued to grow after we completed the installation of blending and cooling assets in 2023 and we believe will continue to expand this business in 2025 and beyond. We expect the demand for frac sand in 2025 to continue to be at healthy levels.
Our IPS business has continued to grow after we completed the installation of blending and cooling assets in 2023 and we believe will continue to expand this business in 2026 and beyond. We expect the demand for frac sand in 2026 to continue to moderately increase.
The valuation allowance as of December 31, 2023 was $0.9 million. The corresponding increase to the income tax benefit on our consolidated statements of operations for the year ended December 31, 2024 was $1.3 million. 69
The valuation allowance as of December 31, 2024 was $2.2 million. The corresponding increase to the income tax benefit on our consolidated statements of operations for the year ended December 31, 2025 was $0.3 million. 72
We have recorded a liability of $2.2 million for uncertain tax positions included in deferred tax liabilities, long-term, net on our consolidated balance sheet as of December 31, 2024 and 2023, related to our depletion deduction methodology, and a corresponding increase to the income tax expense on our consolidated statements of operations.
We have recorded a liability of $0.6 million and $2.2 million for uncertain tax positions included in deferred tax liabilities, long-term, net on our consolidated balance sheet as of December 31, 2025 and 2024, respectively, related to our depletion deduction methodology, and a corresponding decrease to the income tax expense on our consolidated statements of operations. 71 SMART SAND, INC.
As of December 31, 2024, we determined it is more likely than not that we will not be able to fully realize the benefits of certain existing deductible temporary differences and have recorded a valuation allowance against the deferred tax liabilities, long-term, net on our consolidated balance sheet in the amount of $2.2 million.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) As of December 31, 2025, we determined it is more likely than not that we will not be able to fully realize the benefits of certain existing deductible temporary differences and have recorded a valuation allowance against the deferred tax liabilities, long-term, net on our consolidated balance sheet in the amount of $1.9 million.
Year Ended December 31, 2024 2023 2022 (in thousands) Net income (loss) $ 2,992 $ 4,649 $ (703) Depreciation, depletion and amortization 28,735 27,363 26,521 Income tax benefit and other taxes (2,740) (6,901) (3,205) Interest expense 1,838 1,532 1,661 EBITDA $ 30,825 $ 26,643 $ 24,274 Net loss (gain) on sale of fixed assets 1,062 1,802 (294) Equity compensation 2,855 3,391 2,729 Royalty stock issuance — — 639 Acquisition and development costs (1) 325 545 675 Bank and legal costs related to financing not closed 1,294 — — Cash charges related to restructuring and retention 149 32 137 Accretion of asset retirement obligations 996 904 758 Loss on extinguishment of debt 1,341 — — Adjusted EBITDA $ 38,847 $ 33,317 $ 28,918 (1) Represents costs incurred related to the business combinations and current development project activities.
Year Ended December 31, 2025 2024 2023 (in thousands) Net income $ 1,345 $ 2,992 $ 4,649 Depreciation, depletion and amortization 28,785 28,735 27,363 Income tax benefit and other taxes (6,931) (2,740) (6,901) Interest expense 1,738 1,838 1,532 EBITDA $ 24,937 $ 30,825 $ 26,643 Net loss (gain) on sale of fixed assets (566) 1,062 1,802 Equity compensation 3,386 2,855 3,391 Acquisition and development costs (1) 1,000 325 545 Bank and legal costs related to financing not closed — 1,294 — Cash charges related to restructuring and retention 33 149 32 Accretion of asset retirement obligations 1,101 996 904 Loss on extinguishment of debt — 1,341 — Adjusted EBITDA $ 29,891 $ 38,847 $ 33,317 (1) Represents costs incurred related to the business combinations and current development project activities.
We market our products and services to oil and natural gas exploration and production companies, oilfield service companies, and industrial manufacturers. We sell our sand through long-term contracts, short-term supply agreements or spot sales in the open market. We provide wellsite proppant storage solutions services and equipment under flexible contract terms custom tailored to meet the needs of our customers.
We sell our sand through long-term contracts, short-term supply agreements or spot sales in the open market. We provide wellsite proppant storage solutions services and equipment under flexible contract terms custom tailored to meet the needs of our customers.
While our dry plants are able to process finished product volumes evenly throughout the year, our excavation and our wet sand processing activities have historically been limited to primarily non-winter months. As a 67 SMART SAND, INC.
While our dry plants are able to process finished product volumes evenly throughout the year, our excavation and our wet sand processing activities at some of our mines have historically been limited to primarily non-winter months.
We offer complete mine to wellsite proppant supply and logistics solutions to our frac sand customers. We produce low-cost, high quality Northern White sand, which is a premium sand used as proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications.
We produce low-cost, high quality Northern White sand, which is a premium sand used as proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications. We also offer proppant logistics solutions to our customers through our in-basin transloading terminals and our SmartSystems TM wellsite storage capabilities.
Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures. Each of these non-GAAP financial measures has important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measures.
Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures. Each of these non-GAAP financial measures has important limitations as analytical tools because they exclude some 65 SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) consequence, we have experienced lower cash operating costs in the first and fourth quarter of each calendar year, and higher cash operating costs in the second and third quarter of each calendar year when we overproduce wet sand to meet dry sand demand in the winter months.
As a consequence, we have experienced lower cash operating costs in the first and fourth quarter of each calendar year, and higher cash operating costs in the second and third quarter of each calendar year when we overproduce wet sand to meet dry sand demand in the winter months.
We have approximately 126 million tons of proven and probable reserves, and an estimated life of mine of approximately 105 years, based on expected sales volumes. Our owned Peru transload facility has significant logistics assets to support our Ottawa operations.
We have approximately 125 million tons of proven and probable reserves, and an estimated life of mine of approximately 149 years, based on expected sales volumes. Our owned Peru transload facility provides direct access to the BNSF rail line and has significant logistics assets to support our Ottawa operations.
They detach from the wellsite equipment, allowing for removal from the wellsite during operations. We believe our SmartSystems help customers reduce trucking and related fuel consumption, reducing the carbon footprint of their daily operations. We have expanded our product line to offer Industrial Sand through IPS.
They detach from the wellsite equipment, allowing for removal from the wellsite during operations. We believe our SmartSystems help customers reduce trucking and related fuel consumption, reducing the carbon footprint of their daily operations.
Wages, maintenance and insurance costs declined, driven by management efforts to reduce costs. The loss on disposal of assets of $1.1 million for the year ended December 31, 2024 was primarily related to closing our Saskatoon, Canada manufacturing facility and relocating it to the United States.
The loss on disposal of assets of $1.1 million for the year ended December 31, 2024 was primarily related to closing our Saskatoon, Canada manufacturing facility and relocating it to the United States.
In 2023, we completed the installation of blending and cooling equipment at our Ottawa, Illinois facility that we believe provides new opportunities to increase our customer base in the IPS business.
We have expanded our IPS product line in 2023 by completing the installation of blending and cooling equipment at our Ottawa, Illinois facility, which we believe provides new opportunities to increase our customer base in the IPS business.
Based on our balance sheet, cash flows, current market conditions, and information available to us at this time, we believe that we have sufficient liquidity and other available capital resources, to meet our cash needs for the next twelve months, including continued investment in efficiency projects at our Oakdale, Blair and Ottawa facilities, as well as expansion and customization of our newly acquired Ohio terminals.
Based on our balance sheet, cash flows, current market conditions, and information available to us at this time, we believe that we have sufficient liquidity and other available capital resources, to meet our cash needs for the next twelve months, including continued investment in efficiency projects at our Oakdale, Blair and Ottawa facilities, as well as a potential new terminal to service the Montney and Duvernay shale basins in Canada.
Our Smart Systems enable customers to unload, store, and deliver proppant at the wellsite and rapidly set up, take down, and transport the entire system. This capability enhances our customers’ efficiency, safety, and reliability.
We also offer our customers portable wellsite storage and management solutions through our SmartSystems products and services. Our Smart Systems enable customers to unload, store, and deliver proppant at the wellsite and rapidly set up, take down, and transport the entire system. This capability enhances our customers’ efficiency, safety, and reliability.
Operating Expenses Operating expenses were $41.8 million and $43.1 million for the years ended December 31, 2024 and December 31, 2023, respectively. Overall, selling, general and administrative costs declined as management continued to focus on cost-cutting measures. Royalties increased due to higher volumes and bank and legal fees were higher as we completed debt refinancing in 2024.
Operating Expenses Operating expenses were $41.8 million and $43.1 million for the years ended December 31, 2024 and December 31, 2023, respectively. Overall, selling, general and administrative costs declined as management continued to focus on cost-cutting measures.
Adjusted EBITDA was $33.3 million for the year ended December 31, 2023 compared to $28.9 million for the year ended December 31, 2022.
Adjusted EBITDA was $38.8 million for the year ended December 31, 2024 compared to $33.3 million for the year ended December 31, 2023.
Capital Requirements We expect 2025 capital expenditures, excluding any acquisitions, to be between $13.0 million and $17.0 million, consisting primarily of capital to open new mining areas for development, efficiency projects at Oakdale, Blair and Ottawa facilities, expansion and customization of our newly acquired Ohio terminals and potential investment in one or more new terminals.
Capital Requirements We expect 2026 capital expenditures to be between $15.0 million and $20.0 million, consisting primarily of capital to open new mining areas for development, efficiency projects at our Oakdale, Blair and Ottawa facilities and potential investment in one or more new terminals.
The computation of the effective tax rate for the year ended December 31, 2023 and 2022 included modifications from the statutory rate such as income tax credits, depletion deductions, NOL carrybacks and carryforwards and state income taxes, among other items.
The computation of the effective tax rate for the years ended December 31, 2025 and 2024 included modifications from the statutory rate such as income tax credits, depletion deductions, and state taxes, NOL carrybacks and carryforwards, and the partial release of the reserve for uncertain tax positions in 2025, among other items.
You should not consider contribution margin, EBITDA, Adjusted EBITDA or free cash flow in isolation or as substitutes for an analysis of our results as reported 63 SMART SAND, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) under GAAP.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) but not all items that affect the most directly comparable GAAP financial measures. You should not consider contribution margin, EBITDA, Adjusted EBITDA or free cash flow in isolation or as substitutes for an analysis of our results as reported under GAAP.
This growth and expansion reduces comparability of periods, due to increased revenue, cost of goods sold, operating costs, and capital investments. • Market Trends . Beginning in the first quarter of 2022 and continuing through 2024, supply and demand fundamentals have improved and frac sand prices recovered from previous historic lows.
This growth and expansion reduces comparability of periods due to increased revenue, cost of goods sold, operating costs, and capital investments. • Market Trends . Supply and demand fundamentals have been stable during the last several years and frac sand prices have recovered from previous historic lows.
Year Ended December 31, 2024 2023 2022 (in thousands) Revenue $ 311,372 $ 295,973 $ 255,740 Cost of goods sold 266,549 254,418 226,149 Gross profit 44,823 41,555 29,591 Depreciation, depletion, and accretion of asset retirement obligations included in cost of goods sold 26,861 25,469 25,038 Contribution margin $ 71,684 $ 67,024 $ 54,629 Contribution margin per ton $ 13.62 $ 14.85 $ 12.61 Total tons sold 5,263 4,514 4,333 Contribution margin was $71.7 million, or $13.62 per ton sold, for the year ended December 31, 2024 compared to $67.0 million, or $14.85 per ton sold, for the year ended December 31, 2023.
Year Ended December 31, 2025 2024 2023 (in thousands) Revenue $ 330,153 $ 311,372 $ 295,973 Cost of goods sold 292,265 266,549 254,418 Gross profit 37,888 44,823 41,555 Depreciation, depletion, and accretion of asset retirement obligations included in cost of goods sold 27,203 26,861 25,469 Contribution margin $ 65,091 $ 71,684 $ 67,024 Contribution margin per ton $ 11.96 $ 13.62 $ 14.85 Total tons sold 5,443 5,263 4,514 Contribution margin was $65.1 million, or $11.96 per ton sold, for the year ended December 31, 2025 compared to $71.7 million, or $13.62 per ton sold, for the year ended December 31, 2024.
Contribution margin was $67.0 million, or $14.85 per ton sold, for the year ended December 31, 2023 compared to $54.6 million, or $12.61 per ton sold, for the year ended December 31, 2022.
Contribution margin was $71.7 million, or $13.62 per ton sold, for the year ended December 31, 2024 compared to $67.0 million, or $14.85 per ton sold, for the year ended December 31, 2023.
Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by operating activities $ 17,864 $ 30,991 $ 5,420 Acquisition of Blair facility — — (6,547) Purchases of property, plant and equipment (7,010) (23,031) (12,731) Free cash flow $ 10,854 $ 7,960 $ (13,858) Free cash flow was $10.9 million for the year ended December 31, 2024.
Year Ended December 31, 2025 2024 2023 (in thousands) Net cash provided by operating activities $ 44,116 $ 17,864 $ 30,991 Purchases of property, plant and equipment (11,595) (7,010) (23,031) Free cash flow $ 32,521 $ 10,854 $ 7,960 Free cash flow was $32.5 million for the year ended December 31, 2025.
This spending discipline could potentially lead to a slowdown in activity by our customers and lower sand demand in the fourth quarter of the year. Customer Concentration For the year ended December 31, 2024, Equitable Gas Corporation, Encino Energy and Liberty Oilfield Services accounted for 31.9%, 13.8% and 10.2% respectively, of total revenue.
This spending discipline could potentially lead to a slowdown in activity by our customers and lower sand demand in the fourth quarter of the year. Customer Concentration For the year ended December 31, 2025, EQT Corporation and EOG Resources, Inc. accounted for 27.7% and 10.9% respectively, of total revenue.
Beginning in 2021 and continuing throughout 2024, exploration and production companies have been more disciplined in their drilling activity which has led to less volatility in supply and demand imbalance which has stabilized oil and natural gas prices at higher levels.
In recent years, exploration and production companies have been more disciplined in their drilling activity which has led to less volatility in supply and demand of oil and natural gas which has stabilized oil and natural gas prices at levels sufficient to support consistent drilling and completion activity.
Off-Balance Sheet Arrangements We had $19.7 million and $18.9 million of outstanding performance bonds as of each of the years ended December 31, 2024 and 2023, respectively. These performance bonds assure our performance under our reclamation plan, maintenance and restoration of public roadways.
The annual minimum payments under these contracts is approximately $2.5 million per year for the next 11 years. Off-Balance Sheet Arrangements We had $19.7 million of outstanding performance bonds for each of the years ended December 31, 2025 and 2024, respectively. These performance bonds assure our performance under our reclamation plan, maintenance and restoration of public roadways.
For the year ended December 31, 2023, Equitable Gas Corporation and Liberty Oilfield Services accounted for 30.2% and 11.4%, respectively, of total revenue. For the year ended December 31, 2022, Equitable Gas Corporation, Halliburton Energy Services, Encino Energy, and Liberty Oilfield Services accounted for 22.3%, 15.4%, 14.4% and 13.7% respectively, of total revenue.
For the year ended December 31, 2024, EQT Corporation, Encino Energy and Liberty Oilfield Services accounted for 31.9%, 13.8% and 10.2%, respectively, of total revenue. For the year ended December 31, 2023, EQT Corporation and Liberty Oilfield Services accounted for 30.2% and 11.4%, respectively, of total revenue.
This facility has approximately 2.9 million tons of total annual sand processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway. We commenced operations at the Blair facility in the second quarter of 2023.
In March 2022, we acquired all of the issued and outstanding equity interests in Hi-Crush Blair, LLC, which included our Blair, Wisconsin processing facility. This facility has approximately 2.9 million tons of total annual sand processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway.
Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors and commercial banks, to assess: • the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets; 64 SMART SAND, INC.
Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors and commercial banks, to assess: 66 SMART SAND, INC.
Liquidity and Capital Resources In September 2024 we refinanced the $20.0 million Former ABL Credit Facility to the new $30.0 million FCB ABL Credit Facility. Our primary sources of liquidity are cash flow generated from operations, availability under the FCB ABL Credit Facility and other equipment financing sources.
Liquidity and Capital Resources Our primary sources of liquidity are cash flow generated from operations, availability under the FCB ABL Credit Facility and other equipment financing sources. As of December 31, 2025, cash on hand was $22.6 million and we had $30.0 million in undrawn availability under the FCB ABL Credit Facility.
There have been modest pricing fluctuations over the periods presented, but we believe the fluctuation is consistent with other commodities in the oilfield services sector. High levels of inflation have also led to increasing operating expenses from 2022 through 2024. Overview We are a fully integrated frac and industrial sand supply and services company.
There have been modest pricing fluctuations over the periods presented, but we believe the fluctuation is consistent with other commodities in the oilfield services sector. Overview We are a fully integrated frac and industrial sand supply and services company. We offer complete mine to wellsite proppant supply and logistics solutions to our frac sand customers.
We believe that, among other things: (i) the size and favorable geologic characteristics of our sand reserves; (ii) the strategic location and logistical advantages of our facilities; (iii) our proprietary SmartDepot TM portable wellsite storage silos, SmartPath ® wellsite proppant management system, and SmartBelt TM conveyor; 54 SMART SAND, INC.
We believe that, among other things: (i) the size and favorable geologic characteristics of our sand reserves; (ii) the strategic location and logistical advantages of our facilities; (iii) our proprietary SmartDepot TM portable wellsite storage silos, SmartPath ® wellsite proppant management system, and SmartBelt TM conveyor; (iv) access to all Class I rail lines; and (v) the industry experience of our senior management team make us as a highly attractive provider of sand and logistics services.
The industry trends continue towards drilling and completing wells with longer laterals and more frac stages per lateral foot drilled. This trend is leading to higher volumes of sand per well and the need for oil and natural gas exploration companies to manage larger volumes of sand at the wellsite.
This trend is leading to higher volumes of sand per well and the need for oil and natural gas exploration companies to manage larger volumes of sand at the wellsite.
SmartSystems revenue was $8.5 million for the year ended December 31, 2023, which was an increase from $6.4 million for the year ended December 31, 2022, primarily attributable to higher overall utilization of our SmartSystems fleet in 2023. 62 SMART SAND, INC.
SmartSystems revenue was $4.4 million for the year ended December 31, 2025, a decline from $7.8 million for the year ended December 31, 2024. The decline was due to lower overall utilization of our SmartSystems fleet in 2025. 62 SMART SAND, INC.
We directly control five in-basin transloading facilities and have access to third party transloading terminals in all operating basins. These terminals allow us to offer more efficient and sustainable delivery options to our customers. We operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin.
We commenced operations at the Blair facility in the second quarter of 2023. We directly control five in-basin transloading facilities and have access to third party transloading terminals in all operating basins. These terminals allow us to offer more efficient and sustainable delivery options to our customers.
We operate this terminal under a long-term agreement with Canadian Pacific Railway. We now serve the Appalachian Basin through three company-controlled terminals. In January 2022, we began operations at a unit train capable transloading terminal in Waynesburg, Pennsylvania, which we expanded in 2023.
We operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin. We operate this terminal under a long-term agreement with Canadian Pacific Railway. We also serve the Appalachian Basin through three company-controlled terminals.
The Oakdale facility contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian Pacific Railway. In September 2020, we acquired, all of the issued and outstanding interests in Eagle Proppants Holdings from Eagle, which included our Ottawa , Illinois processing facility, which has approximately 1.6 million tons of annual sand processing capacity.
In September 2020, we acquired from Eagle all of the issued and outstanding equity interests in Eagle Oil and Gas Proppants Holdings, LLC. This acquisition included our Ottawa , Illinois processing facility, which has approximately 1.6 million tons of annual sand processing capacity. We commenced operations at the Ottawa facility in October, 2020.
In December 2023, we acquired the right to operate a terminal in Minerva, Ohio and in January 2024 we acquired the rights to operate a terminal in Dennison, Ohio. These two Ohio terminals became operational in 2024. We also have rights to use a rail terminal located in El Reno, Oklahoma.
In January 2022, we began operations at a unit train capable transloading terminal in Waynesburg, Pennsylvania, which we expanded in 2023. In December 2023, we acquired the right to operate a terminal in Minerva, Ohio and in January 2024 we acquired the rights to operate a terminal in Dennison, Ohio. These two Ohio terminals became operational in 2024.
Additionally, we have long-standing relationships with third party terminal operators that allow us access to substantially all oil and natural gas exploration production basins of North America. We also offer our customers portable wellsite storage and management solutions through our SmartSystems products and services.
In 2025, we expanded the Dennison, Ohio terminal. We also have rights to use a rail terminal located in El Reno, Oklahoma. Additionally, we have long-standing relationships with third party terminal operators that allow us access to substantially all oil and natural gas exploration production basins of North America.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+2 added−2 removed6 unchanged
Biggest changeForeign Currency Risk Our revenues and expenses are primarily in United States dollars; however, certain transactions are transacted in Canada dollars.
Biggest changeA deterioration in the financial condition of one or more significant customers, or an inability to renew or replace expiring contracts on comparable terms, could adversely affect our gross profit and operating cash flows. Foreign Currency Risk Our revenues and expenses are primarily in United States dollars; however, certain transactions are transacted in Canada dollars.
There were no outstanding borrowings under our FCB ABL Credit Facility as of December 31, 2024. We do not believe this represents a material interest rate risk.
There were no outstanding borrowings under our FCB ABL Credit Facility as of December 31, 2025. We do not believe this represents a material interest rate risk.
During the years ended December 31, 2024, 2023 and 2022, revenue, expenses, assets and liabilities transacted in Canada dollars were immaterial to the results of operations. 70
During the years ended December 31, 2025, 2024 and 2023, revenue, expenses, assets and liabilities transacted in Canada dollars were immaterial to the results of operations. 73
Removed
Credit Risk This concentration of counterparties operating in a single industry may increase our overall exposure to credit risk, in that the counterparties may be similarly affected by changes in economic, regulatory or other conditions.
Added
Credit Risk We are exposed to credit risk through our accounts receivable and contract volumes with customers, the majority of whom operate in the natural gas and oil exploration, production, and well-completion services sectors.
Removed
If a customer defaults or if any of our contracts expire in accordance with its terms, and we are unable to renew or replace these contracts or the related sales volumes, our gross profit and cash flows may be adversely affected.
Added
Because these customers tend to be similarly affected by changes in commodity prices, drilling and completion activity, and broader upstream energy market conditions, this concentration increases the potential for correlated credit losses during periods of industry volatility.

Other SND 10-K year-over-year comparisons