Target Hospitality Corp.

Notes to Consolidated Financial Statements

(Amounts in Thousands, Unless Stated Otherwise)

1. Organization and Nature of Operations, Basis of Presentation, and Summary of Significant Accounting Policies

Organization and Nature of Operations

Target Hospitality Corp. (“Target Hospitality” and, together with its subsidiaries, the “Company”) was formed on March 15, 2019 and is one of North America’s largest providers of vertically integrated specialty rental accommodations and full-service value-added hospitality solutions. The Company delivers comprehensive hospitality services and workforce community solutions, including: catering and food services, maintenance, housekeeping, grounds-keeping, security, recreational amenities, community design and construction, community management, and laundry services. Target Hospitality’s modular specialty rental accommodation assets are relocatable and interchangeable across its operating segments, enabling the Company to redeploy assets in response to shifts in customer requirements, market conditions, and project locations. The Company serves customers in the natural resources development sector, customers supporting critical mineral development, power generation, or data center infrastructure projects, and the government sector, with operations primarily located in the West Texas, South Texas, New Mexico, Nevada and Midwest regions.

The Company, whose securities are listed on the Nasdaq Capital Market, together with its wholly owned subsidiaries, Topaz Holdings LLC, a Delaware limited liability company (“Topaz”), and Arrow Bidco, LLC, a Delaware limited liability company (“Arrow Bidco”), serve as the holding companies for the businesses of Target Logistics Management, LLC and its subsidiaries (“Target” or “TLM”) and RL Signor Holdings, LLC (“Signor”). TDR Capital LLP (“TDR Capital” or “TDR”) indirectly owns approximately 65% of Target Hospitality and the remaining ownership is broken out among the founders of the Company’s legal predecessor, Platinum Eagle Acquisition Corp. (“Platinum Eagle” or “PEAC”), investors who purchased the shares of Platinum Eagle in a private placement transaction, and other public shareholders.

Basis of Presentation

The accompanying consolidated financial statements and related notes have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. If the underlying estimates and assumptions upon which the financial statements are based change in future periods, actual amounts may differ from those included in the accompanying consolidated financial statements.

Principles of Consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries that it controls due to ownership of a majority voting interest or if the subsidiary is a variable interest entity (“VIE”) where the Company has been determined to be the primary beneficiary. For controlled subsidiaries that are not wholly-owned, the third-party ownership interest represents a noncontrolling interest, which is presented separately in the consolidated financial statements. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the Company. All intercompany balances and transactions are eliminated.

Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents.

Receivables and Allowances for Credit Losses

Receivables primarily consist of amounts due from customers from the delivery of specialty rental services. The trade accounts receivable is recorded net of an allowance for credit losses. The allowance for credit losses is based upon the amount of losses expected to be incurred in the collection of these accounts pursuant to the guidance outlined in ASU 2016-13,Financial Instruments – Credit Losses (ASU 2016-13, Topic 326, or ASC 326), which the Company adopted effective January 1, 2023. The estimated losses are calculated using the loss rate method based upon a review of outstanding receivables, including specific accounts, related aging, and on historical collection experience. These allowances reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. Our estimate could require a change based on changing circumstances, including changes in the economy or in the circumstances of individual customers. In addition, specific accounts are written off against the allowance when management determines the account is uncollectible. Activity in the allowance for credit losses was as follows:

Provision for credit losses, net of recoveries for the period are included within selling, general and administrative expenses in the accompanying consolidated statements of comprehensive income (loss).

Prepaid Expenses and Other Assets

Prepaid expenses of approximately $4.5 million and $5.4 million at December 31, 2025 and 2024, respectively, primarily consist of insurance, rent, deposits and permits. Prepaid insurance, rent, and permits are amortized over the related term of the respective agreements. Other assets of approximately $4.3 million and $4 million at December 31, 2025 and 2024, respectively, primarily consist of $2.1 million and $1.9 million of deposits as of December 31, 2025 and 2024, respectively, and $2.1 million and $1.9 million of hospitality inventory as of December 31, 2025 and 2024, respectively. Inventory, primarily consisting of food and beverages, is accounted for by the first-in, first-out method and is stated at the lower of cost and net realizable value.

Concentrations of Credit Risk

In the normal course of business, the Company grants credit to its customers based on credit evaluations of their financial condition and generally requires no collateral or other security. Major customers are defined as those individually comprising more than 10.0% of the Company’s revenues or accounts receivable. For the year ended December 31, 2025, the Company hadthree customers who accounted for 28%,11% and 11% of total revenues, respectively. The largest customer accounted for 48% of accounts receivable, whileno other customer accounted for more than 10% of the accounts receivable balance as of December 31, 2025.

For the year ended December 31, 2024, the Company hadone customer who accounted for 48% of revenues. The largest customer accounted for 43% of accounts receivable, whileno other customer accounted for more than 10% of the accounts receivable balance as of December 31, 2024 .

For the year ended December 31, 2023, the Company hadone customer representing 62% of revenues.

Major suppliers are defined as those individually comprising more than 10.0% of the annual goods purchased. For the years ended December 31, 2025, 2024 and 2023, the Company hadone major supplier representing 13.5%,19.4%, and 16.8% of goods purchased, respectively.

Interest Capitalization

Interest costs for the construction of certain long-term assets are capitalized by applying the weighted average interest rate applicable to the borrowings of the Company to the average amount of accumulated expenditures outstanding during the construction period. Such capitalized interest costs are depreciated over the related assets’ estimated useful lives.

Specialty Rental Assets

Specialty rental assets (modular units, site work and furniture and fixtures comprising communities) are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Costs of improvements and betterments are capitalized when such costs extend the useful life or increase the rental value of the specialty rental asset. Costs incurred for specialty rental assets to meet a particular customer specification are capitalized and depreciated over the lease term. Maintenance and repair costs are expensed as incurred.

Depreciation is computed using the straight-line method over estimated useful lives and considering the residual value of those assets. The estimated useful life of buildings is 5-15 years. The estimated useful life of modular units is 15 years. The estimated useful life of site work (above ground and below ground infrastructure) is 5 years. The estimated useful life of furniture and fixtures is 7 years. Depreciation methods, useful lives and residual values are adjusted prospectively, if a revision is determined to be appropriate.

Other Property, Plant, and Equipment

Other property, plant, and equipment is stated at cost, net of accumulated depreciation and impairment losses. Assets leased under finance leases are depreciated over the shorter of the lease term or their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Land is not depreciated. Maintenance and repair costs are expensed as incurred.

Depreciation is computed using the straight-line method over estimated useful lives, as follows:

Depreciation methods, useful lives and residual values are reviewed and adjusted prospectively, if appropriate.

Business Combinations

Business combinations are accounted for using the acquisition method. Consideration transferred for acquisitions is measured at fair value at the acquisition date and includes assets transferred, liabilities assumed and equity issued. Acquisition costs incurred are expensed and included in selling, general and administrative expenses. When the Company acquires a business, the financial assets and liabilities assumed are assessed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions at the acquisition date.

Any contingent consideration transferred by the acquirer is recognized at fair value at the acquisition date. Any subsequent changes to the fair value of contingent consideration are recognized in profit or loss. If the contingent consideration is classified as equity, it is not re-measured and subsequent settlement is accounted for within equity.

Goodwill

The Company evaluates goodwill for impairment at least annually at the reporting unit level. A reporting unit is the operating segment, or one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. However, components are aggregated as a single reporting unit if they have similar economic characteristics. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Company’s reporting units that are expected to benefit from the combination. The Company evaluates changes in its reporting structure to assess whether that change impacts the composition of one or more of its reporting units. If the composition of the Company’s reporting units’ changes, goodwill is reassigned between reporting units using the relative fair value allocation approach.

The Company performs the annual impairment test of goodwill at October 1. In addition, the Company performs impairment tests during any reporting period in which events or changes in circumstances indicate that impairment may have occurred. To test goodwill for impairment, the Company first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, the Company then performs a quantitative impairment test. Otherwise, the quantitative impairment test is not required. Under the quantitative impairment test, the Company would compare the estimated fair value of each reporting unit to its carrying value.

In assessing the fair value of the reporting units, the Company considers the market approach, the income approach, or a combination of both. Under the market approach, the fair value of the reporting unit is based on quoted market prices of companies comparable to the reporting unit being valued. Under the income approach, the fair value of the reporting unit is based on the present value of estimated cash flows. The income approach is dependent on several significant management assumptions, including estimated future revenue growth rates, gross margin on sales, operating margins, capital expenditures, tax rates and discount rates.

If the carrying amount of the reporting unit exceeds the calculated fair value, a loss on impairment is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Additionally, the Company considers the income tax effect from any tax-deductible goodwill on the carrying amount of the reporting unit, if applicable, when measuring the goodwill impairment charge.

Intangible Assets Other Than Goodwill

Intangible assets that are acquired by the Company and determined to have an indefinite useful life are not amortized, but are tested for impairment at least annually. The Company’s indefinite-lived intangible assets consist of a trade name. The Company calculates fair value by comparing a relief-from-royalty method to the carrying amount of the indefinite-lived intangible asset. This method is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. A loss on impairment would be recorded to the extent the carrying value of the indefinite-lived intangible asset exceeds the fair value.

Other intangible assets that have finite useful lives are measured at cost less accumulated amortization and impairment losses, if any. Subsequent expenditures for intangible assets are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets. The Company has customer relationship assets with lives ranging from 5 to 9 years. Amortization of intangible assets is included in other depreciation and amortization on the consolidated statements of comprehensive income (loss).

Impairment of Long-Lived and Amortizable Intangible Assets

Fixed assets including rental equipment and other property, plant and equipment and amortizable intangible assets are reviewed for impairment as events or changes in circumstances occur indicating that the carrying value of the asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to future undiscounted cash flows, without interest charges, expected to be generated by the asset group. If future undiscounted cash flows, without interest charges, exceed the carrying amount of an asset, no impairment is recognized. If management determines that the carrying value cannot be recovered based on estimated future undiscounted cash flows, without interest charges, over the shorter of the asset’s estimated useful life or the expected holding period, an impairment loss would be recorded based on the estimated fair value of the asset.

Assets Held for Sale

Management considers an asset to be held for sale when management approves and commits to a formal plan to actively market the asset for sale and it is probable that the sale will be completed within twelve months. A sale may be considered probable when a signed sales contract and significant non-refundable deposit or contract break-up fee exist. Upon designation as held for sale, management records the carrying value of the asset at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and management stops recording depreciation expense. As of December 31, 2025, no assets were considered held for sale.

Deferred Financing Costs Revolver, net

Deferred financing costs revolver are associated with the issuance of the ABL Facility discussed in Note 7. Such costs are amortized over the contractual term of the line-of-credit through initial maturity using the straight-line method. Amortization expense of deferred financing costs revolver is included in interest expense, net in the consolidated statement of comprehensive income (loss).

Term Loan Deferred Financing Costs

Term loan deferred financing costs are associated with the issuance of the 2025 Senior Secured Notes discussed in Note 7. The Company presents unamortized deferred financing costs as a direct deduction from the principal amount of the 2025 Senior Secured Notes on the consolidated balance sheets. Such costs are deferred and amortized over the term of the debt based on the effective interest rate method.

Original Issuance Discounts

Debt original issue discounts are associated with the issuance of the 2025 Senior Secured Notes discussed in Note 7 and are recorded as direct deductions to the principal amount of the 2025 Senior Secured Notes on the consolidated balance sheets. Debt discounts are deferred and amortized over the term of the debt based on the effective interest rate method.

Finance and Operating Leases

The Company determines if a contract is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Expense for these short-term leases is recognized on a straight-line basis over the lease term. For leases with an initial term greater than 12 months, the Company records a right-of-use (“ROU”) asset and a corresponding lease obligation. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease obligations represent the Company’s obligation to make fixed lease payments as stipulated by the lease. The Company has elected the lessee practical expedient to make an accounting policy election by class of underlying asset to not separate non-lease components from lease components and instead to account for each separate lease component and non-lease components associated with that lease component as a single lease component. As a lessee in a lease contract, the Company recognizes a ROU asset and a lease liability on the consolidated balance sheet. The Company is a lessee in a variety of lease contracts, such as land, building, modular units, equipment and vehicle leases.

The Company classifies its leases as either an operating or a finance lease based on the principle of whether or not the lease is effectively a financed purchase of the leased asset. For operating leases, the Company recognizes lease expense on a straight-line basis over the term of the lease. For finance leases, the Company recognizes lease expense using the effective interest method, which results in the interest component of each lease payment being recognized as interest expense and the lease right-of-use asset being amortized into other depreciation and amortization expense in the accompanying consolidated statement of comprehensive income (loss) using the straight-line method over the term of the lease. Operating lease obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate (“IBR”) based on information available at the commencement date in determining the present value of lease payments over the lease term. The IBR is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company determined its IBR for each lease by using the IBR in effect as of the start of the quarter of the lease commencement date. In order to estimate the Company’s IBR, the Company first looks to its own unsecured debt offerings, and adjusts the rate for both length of term and secured borrowing using available market data as well as consultations with leading national financial institutions that are active in the issuance of both secured and unsecured notes.

Operating ROU assets are recognized at the lease commencement date, and include the amount of the initial operating lease obligation, any lease payments made at or before the commencement date, excluding any lease incentives received, and any initial direct costs incurred. For leases that have extension options that the Company can exercise at its discretion, management uses judgment to determine if it is reasonably certain that the Company will in fact exercise such option. If the extension option is reasonably certain to occur, the Company includes the extended term’s lease payments in the calculation of the respective lease liability. Certain lease contracts may include an option to purchase the leased property, which is at the Company's sole discretion. None of the Company’s leases contain any material residual value guarantees or material restrictive covenants. The Company reviews its right-of-use assets for indicators of impairment. If such assets are considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment loss is recognized. The impairment loss recognized is measured at the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Based on the Company’s review, no operating or finance lease ROU assets were impaired during any of the years presented in these accompanying consolidated financial statements.

The Company's leases include a base lease payment, which is recognized as lease expense on a straight-line basis over the lease term. In addition, certain of the Company's leases may include an additional lease payment for items such as common area maintenance, real estate taxes, utilities, operating expenses, insurance, personal property expense, or other related charges all of which are recognized as variable lease expense, when incurred, in the consolidated statement of comprehensive income (loss). The variable lease expense incurred by the Company was not based on an index or rate.

For lease modifications, the Company evaluates whether the lease modifications may be accounted for as either two leases – the original lease and a separate new lease, or, one modified lease. When a lease modification is accounted for as one modified lease, the Company must reconsider the lease classification and may need to remeasure the lease liability and adjust the related ROU asset. Such assessments may require reconsideration of certain assumptions made at the lease commencement date, such as whether the exercise of a renewal option is reasonably certain, which may result in a change to the original expected lease term. Triggering events that may result in a lease modification may include a modification of a related customer contract that depends on leased assets to service the customer contract over the related term.

Lessor Perspective: For lease agreements in which the Company is the lessor, the Company analyzed the lease and non-lease components of its lease agreements and determined that the timing and pattern of transfer for both components are the same. In addition, the leases will continue to qualify as operating leases and the Company will account for and present the lease component under ASC 842 and the non-lease component under ASC 606. Refer to Note 2 for the breakout of revenue under each standard.

Refer to Notes 12 and 13 for additional lease disclosures.

Asset Retirement Obligations

The Company recognizes asset retirement obligations (“AROs”) related to legal obligations associated with the operation of the Company’s specialty rental assets. The fair values of these AROs are recorded on a discounted basis, at the time the obligation is incurred and accreted over time for the change in present value over the expected timing of settlement. Changes in the expected timing or amount of settlement are recognized in the period of change as an increase or decrease in the carrying amount of the ARO and related asset retirement costs with decreases in excess of the carrying value of the related asset retirement cost being recognized in the consolidated statement of comprehensive income (loss). The Company capitalizes asset retirement costs by increasing the carrying amount of the related long-lived assets and depreciating these costs over the remaining useful life. The carrying amount of AROs included in the consolidated balance sheets were $2.7 million and $2.6 million as of December 31, 2025 and 2024, respectively, which represents the present value of the estimated future cost of these AROs of approximately $2.9 million. Accretion expense of approximately $0.1 million, $0.1 million, and $0.2 million was recognized in specialty rental costs in the accompanying consolidated statements of comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023, respectively.

Foreign Currency Transactions and Translation

The Company’s reporting currency is the US Dollar (USD). Exchange rate adjustments resulting from foreign currency transactions are recognized in profit or loss, whereas effects resulting from the translation of financial statements are reflected as a component of accumulated other comprehensive loss, a component of equity.

The assets and liabilities of subsidiaries whose functional currency is different from the USD are translated into USD at exchange rates at the reporting date and revenue and expenses are translated using average exchange rates for the respective period.

Foreign exchange gains and losses arising from a receivable or payable to a consolidated Company entity, the settlement of which is neither planned nor anticipated in the foreseeable future, are considered to form part of a net investment in the Company entity and are included within accumulated other comprehensive loss.

Revenue Recognition

The Company derives revenue from specialty rental and hospitality services, specifically lodging and related ancillary services. Revenue is recognized in the period in which lodging and services are provided pursuant to the terms of contractual relationships with the customers. Certain arrangements contain a lease of lodging facilities to customers. The leases are accounted for as operating leases under the authoritative guidance for leases (“ASC 842”) and are recognized as income is earned over the term of the lease agreement and is reflected as specialty rental income in the consolidated statements of comprehensive income (loss).

Upon lease commencement, the Company evaluates leases to determine if they meet criteria set forth in lease accounting guidance for classification as sales-type or direct financing leases; if a lease meets none of these criteria, the Company classifies the lease as an operating lease. As previously mentioned, the arrangements that contain a lease of the Company’s lodging facilities are accounted for as operating leases, whereby the underlying asset remains on our balance sheet and is depreciated consistently with other owned assets, with income recognized as it is earned over the term of the lease agreement. For contracts that contain both a lease component and a services or non-lease component, the Company has adopted an accounting policy to account for and present the lease component under ASC 842 and the non-lease component under the authoritative guidance for revenue recognition (“ASC 606” or “Topic 606”). Refer to Note 2 for the breakout of revenue under each standard. The Company estimates the transaction price, including variable consideration, at contract inception. Then the consideration in the contract is allocated to each separate lease component and non-lease component of the contract. When assessing the recognition of services and specialty rental revenue, judgement is required in contemplating the determination of the transaction price. When allocating the contract consideration to the lease component under ASC 842 and the services or non-lease component under ASC 606, the Company uses judgement in contemplating how to initially measure one or more parts of the contract, to apply the separation and measurement guidance. Factors the Company considers in making this allocation include relative standalone price of lease and services or non-lease components. The Company recognizes minimum rents on operating leases over the term of the customer

operating lease. A lease term commences when: (1) the customer has control of the leased space (legal right to use the property); and (2) the Company has delivered the premises to the customer as required under the terms of the lease. The term of a lease includes the noncancellable periods of the lease along with periods covered by: (1) a customer option to extend the lease if the customer is reasonably certain to exercise that option; (2) a customer option to terminate the lease if the customer is reasonably certain not to exercise that option; and (3) an option to extend (or not to terminate) the lease in which exercise of the option is controlled by the Company as the lessor. When assessing the expected lease end date, judgment is required in contemplating the significance of: any penalties a customer may incur should it choose not to exercise any existing options to extend the lease or exercise any existing options to terminate the lease; and economic incentives for the customer in the lease. Furthermore, when assessing the expected end date of a contract under ASC 606 with an extension option, judgment is required to determine whether the option contains a material right.

Because performance obligations related to specialty rental and hospitality services are satisfied over time, some of our revenue is recognized evenly over the contractual term of the arrangement, based on a contractual fixed minimum amount and defined period of performance. Certain contracts may contain a contractual fixed minimum amount and an initial ramp up period based on bed utilization, which may result in lower revenue recognition during the ramp up period of the contract term. Some of our revenue is recognized on a daily basis, for each night a customer stays, at a contractual day rate. Our customers typically contract for accommodation services under committed contracts with terms that most often range from several months to multiple years. Our payment terms vary by type and location of our customer and the service offered. The time between invoicing and when payment is due is not significant.

When lodging and services are billed and collected in advance, recognition of revenue is deferred until services are rendered.

Cost of services and construction includes labor, food, utilities, supplies, leasing and other direct costs associated with operating the lodging units as well as repair and maintenance expenses, costs associated with relocating community assets, and construction costs associated with community construction services projects. Cost of rental includes leasing costs, utilities, and other direct costs of maintaining the lodging units. Costs associated with contracts include sales commissions which are expensed as incurred and reflected in selling, general and administrative expenses in the consolidated statements of comprehensive income (loss).

Additionally, the Company collects sales, use, occupancy and similar taxes, which the Company presents on a net basis (excluded from revenues) in the consolidated statements of comprehensive income (loss).

The Company recognizes revenue associated with community construction using the percentage of completion method with progress towards completion measured using the cost-to-cost method as the basis to recognize revenue. Management believes this cost-to-cost method is the most appropriate measure of progress to the satisfaction of a performance obligation on the community construction. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, estimated profitability and final contract settlements may result in revisions to projected costs and revenue and are recognized in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. Factors that may affect future project costs and margins include weather, production efficiencies, availability and costs of labor, materials and subcomponents. As noted above, costs associated with the construction fee income are recognized as incurred and presented within the services and construction costs financial statement line item within the accompanying consolidated statement of comprehensive income (loss).

Revenues associated with community construction using the percentage of completion method are reflected as construction fee income in the consolidated statements of comprehensive income (loss).

Fair Value Measurements

A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The inputs are prioritized into three levels that may be used to measure fair value:

Level 1: Inputs that reflect quoted prices for identical assets or liabilities in active markets that are observable.

Level 2: Inputs that reflect quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3: Inputs that are unobservable to the extent that observable inputs are not available for the asset or liability at the measurement date.

Income Taxes

The Company’s operations are subject to U.S. federal, state and local, and foreign income taxes. The Company accounts for income taxes under the liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent that it is more likely than not that these assets will be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent results of operations. Valuation allowances are recorded to reduce the deferred tax assets to an amount that will more likely than not be realized. When a valuation allowance is established or there is an increase in an allowance in a reporting period, tax expense is generally recorded in the Company’s consolidated statements of comprehensive income (loss).

In accordance with applicable authoritative guidance, the Company accounts for uncertain income tax positions using a benefit recognition model with a two-step approach; a more-likely-than-not recognition criterion; and a measurement approach that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. If it is not more-likely-than-not that the benefit of the tax position will be sustained on its technical merits, no benefit is recorded. Uncertain tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. The Company classifies interest and penalties related to uncertain tax positions within income tax expense.

Warrant Liabilities

We evaluatedthe warrants issued by Platinum Eagle, our legal predecessor, to purchase its common stock in a private placement concurrently with its initial public offering (the “Private Warrants”) under ASC 815-40,Derivatives and Hedging—Contracts in Entity’s Own Equity, and concluded that they did not meet the criteria to be classified in stockholders’ equity. Specifically, the provisions in the Private Warrant agreement provided for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder and because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such a provision would preclude the warrant from being classified in equity. Since the Private Warrants meet the definition of a derivative under ASC 815, we recorded these Private Warrants as liabilities on the balance sheet at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of comprehensive income (loss) at each reporting date. The fair value adjustments were determined by using a Black-Scholes option-pricing model based on inputs less observable in the marketplace*.*The Private Warrants were deemed equity instruments for income tax purposes, and accordingly, there was

no tax accounting related to changes in the fair value of the Private Warrants recognized. The Private Warrants expired unexercised on March 15, 2024 and areno longer outstanding.

Stock-Based Compensation

The Company sponsors an equity incentive plan, the Target Hospitality Corp. 2019 Incentive Award Plan, as amended (the “Plan”), in which certain employees and non-employee directors participate. The Plan is administered by the compensation committee of the board of directors of the Company (the “Compensation Committee”). The Company measures the cost of services received in exchange for an award of equity instruments (typically restricted stock unit awards (“RSUs”), performance stock unit awards (“PSUs”), and stock options) based on the grant-date fair value of the awards issued under the Plan that are equity classified. The fair value of the stock options is calculated using the Black-Scholes option-pricing model and the fair value of the PSUs that are based on market conditions (“Market-Based PSUs”) are calculated using a Monte Carlo simulation while the fair value of the RSUs and performance-based PSUs not based on market conditions (“Performance-Based PSUs”) are calculated based on the Company’s share price on the grant-date, together with the assessment of the probability of achieving defined performance measures for Performance-Based PSUs. Compensation cost for awards with performance conditions (non-market) is recognized if and when achievement becomes probable and is adjusted for changes in probability and actual outcomes through the end of the performance period. The resulting compensation expense is recognized over the period during which an employee or non-employee director is required to provide service in exchange for the awards, usually the vesting period. Similarly, for time-based awards subject to graded vesting, compensation expense is recognized on a straight-line basis over the service period, subject to the requirement that cumulative expense recognized at any date will at least equal the grant-date fair value of the vested portion of the award. For Market-Based PSUs, the probability of satisfying a market condition is considered in the estimation of the grant-date fair value and the compensation cost is not reversed if the market condition is not achieved, provided the requisite service has been provided. Forfeitures are accounted for as they occur. For valuation of awards, the Company uses key assumptions appropriate to the valuation technique (e.g., expected term, expected volatility, dividend yield, and risk-free interest rate for Black-Scholes; and relevant volatility/correlation and risk-free inputs for Monte Carlo). See Note 16 for the period’s specific assumptions and ranges. The Plan also includes Stock Appreciation Rights awards (“SARs”). Each SAR represents a contingent right to receive, upon vesting, payment in cash or the Company’s Common Stock, as determined by the Compensation Committee, in an amount equal to the difference between (a) the fair market value of a Common Share on the date of exercise, over (b) the grant date price. Under the authoritative guidance for stock-based compensation, SARs that are expected to be settled in cash are considered liability-based awards that are included in accrued liabilities and other non-current liabilities in the consolidated balance sheets at fair value and are remeasured at fair value each reporting period until the date of settlement using the Black-Scholes option pricing model. Changes in the estimated fair value of the SARs along with the resulting cost is recognized as increases or decreases in stock-based compensation expense in the accompanying consolidated statements of comprehensive income (loss) each reporting period over the period during which an employee is required to provide service in exchange for the SARs, usually the vesting period. Forfeitures are accounted for as they occur. As of December 31, 2025 and 2024, respectively, there were no SAR awards outstanding as all were either exercised and paid in cash or forfeited as of December 31, 2024. Additional information related to the Plan, including award activity rollforwards (by award type), total unrecognized compensation cost and weighted-average remaining recognition period, valuation assumptions, related income tax effects, and cash flow impacts, is presented in Note 16.

Treasury Stock

Treasury stock is reflected as a reduction of stockholders’ equity at cost. In August 2022, the Inflation Reduction Act of 2022 was enacted into law and imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. The Company reflects the applicable excise tax in equity as part of the cost basis of the stock repurchased classified as treasury stock and a corresponding liability for the excise taxes payable in accrued expenses in the accompanying consolidated balance sheets until paid. We use the weighted average purchase price to determine the cost of treasury stock that is reissued, if any.

Recently Adopted Accounting Standards

In December 2023, the FASB issued ASU 2023-09*, Improvements to Income Tax Disclosures,*which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU 2023-09 requires public companies to annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). Annual disclosures are required for fiscal years beginning after December 15, 2024 and may be applied prospectively or retrospectively. These requirements did not have an impact on amounts recognized in our financial statements, but resulted in expanded Income Tax disclosures as shown in Note 9 of the financial statements. The Company adopted ASU 2023-09, on the effective date of January 1, 2025, which will be applied prospectively. Refer to Note 9 for these expanded disclosures.

Recently Issued Accounting Standards

Improvements to Expense Disaggregation Disclosures. In November 2024, the FASB issued ASU 2024-03, which requires additional information about specific expense categories in the notes to financial statements for both interim and annual reporting periods. The update requires disaggregated information about certain prescribed expense categories underlying any relevant income statement expense caption. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The ASU 2024-03 may be applied prospectively or retrospectively, and allows for early adoption. The Company is currently evaluating the impact of this update and does not intend to early adopt ASU 2024-03. The Company expects this update to result in expanded disclosures, but does not expect the update to affect the Company’s consolidated results of operations, cash flows, or financial position.

2. Revenue

Total revenue under contracts recognized under ASC 606 was approximately $274.8 million for the year ended December 31, 2025, while $45.8 million was specialty rental income subject to the guidance of ASC 842 for the year ended December 31, 2025. Total revenue under contracts recognized under ASC 606 was $265.9 million for the year ended December 31, 2024, while $120.4 million was specialty rental income subject to the guidance of ASC 842 for the year ended December 31, 2024. Total revenue under contracts recognized under ASC 606 was $365.6 million for the year ended December 31, 2023, while $198 million was specialty rental income subject to the guidance of ASC 842 for the year ended December 31, 2023.

The following table disaggregates our services and construction fee income by ourthree reportable segments as well as the All Other category: Hospitality and Facility Services-South (“HFS – South”), Workforce Hospitality Solutions (“WHS”), Government, and All Other for the years indicated below:

For the year ended December 31, 2025, the Company incurred and expensed approximately$69.6 million of construction costs associated with construction fee income, which are included within the services and construction costs financial statement line item within the accompanying consolidated statement of comprehensive income (loss).

During the year ended December 31, 2024, the STFRC Contract in the Company’s Government segment was terminated effective August 9, 2024. The STFRC Contract was based on a fixed minimum lease revenue amount and for the years ended December 31, 2024 and 2023, contributed approximately $38.3 million and $55.9 million, respectively, in total consolidated revenue. The assets associated with the STFRC Contract were reactivated under the DIPC Contract relating to the DIPC effective March 5, 2025, which is a lease and services agreement with an anticipated five-year term. The DIPC retains a similar facility size and operational scope as the prior operations under the STFRC Contract. The DIPC is capable of supporting up to 2,400 individuals and provides an open and safe environment to appropriately care for the community population. The consistency of the community layout required no capital investment, allowing for seamless community reactivation. The Company is providing facility and hospitality solutions under the DIPC Contract, which has a similar economic structure to the previous STFRC Contract, including fixed minimum revenue regardless of occupancy that amounts to a cumulative fixed minimum revenue amount of approximately $246 million over the anticipated five-year term. As such, the DIPC Contract is expected to provide over $246 million of revenue over its anticipated five-year term, to March 2030, and was subject to a ramp up period based on utilization during the first six months of the contract term resulting in lower fixed minimum revenue amounts during the ramp up period. The ramp up period was completed as scheduled as of September 30, 2025 with the maximum fixed minimum revenue amount now being recognized. The maximum fixed minimum revenue amount is based on utilization of 2,400 beds. The DIPC Contract is supported by an amended intergovernmental services agreement between the city of Dilley, Texas and U.S. Immigration and Customs Enforcement. As is customary for U.S. government contracts and subcontracts, the IGSA and the DIPC Contract are subject to annual U.S. government appropriations and can be canceled for convenience with a 60-day prior notice.

During the year ended December 31, 2023, the NP Partner executed the PCC Contract that became effective on November 16, 2023, and included a term with aone-year base period through November 15, 2024, with an option to extend for up tofour additionalone-year periods and an option to extend for up tosix months upon the conclusion of the base period or any of the option periods. The PCC Contract did not result in any advanced payments that required an assessment of the

amortization period. The PCC Contract operated with similar structure to the Company’s prior government services contracts, which centered around minimum revenue amounts supported by the U.S. government. Additionally, this PCC Contract included occupancy-based variable services revenue that fluctuated with active community population fluctuations. During the year ended December 31, 2024, the Company executed the first offour one-year extension options on the PCC Contract along with an amendment, effective November 16, 2024, which supported a community capable of serving up to 6,000 individuals. The minimum revenue amount provided for a minimum annual revenue contribution of approximately $168 million, which decreased from $178 million pursuant to the amendment on November 16, 2024. The PCC contract contained both a lease component under ASC 842 and a service or non-lease component under ASC 606. The November 16, 2024 amendment of the PCC Contract resulted in a re-assessment of the allocation of the contract consideration to the lease component under ASC 842 and the services or non-lease component under ASC 606, which did not result in a material change from the previous allocation of contract consideration done at the origination date of the PCC Contract on November 15, 2023, other than allocating a lower minimum annual revenue contribution of $168 million compared to the prior $178 million amount. All revenue associated with the PCC contract and the related amendment, is attributable to the Government reportable segment. In February 2025, the Company received notice that the U.S. government terminated the PCC Contract with the NP Partner and the NP Partner terminated the PCC Contract, effectively immediately on February 21, 2025 and the NP Partner provided notice to the Company of their intention to terminate the PCC Contract as of the PCC Termination Effective Date. In connection with the PCC Contract termination, on August 1, 2025, the Company entered into an agreement with the NP Partner related to the close-out and settlement of the PCC Contract. The agreement provided the Company with consideration for certain costs related to the termination of the PCC Contract and resulted in a payment to the Company of approximately $11.8 million (“PCC Contract Close-Out Payment”), which was received in cash and recognized as revenue during the year ended December 31, 2025 and is included as a component of services income in the accompanying consolidated statement of comprehensive income (loss) for the year ended December 31, 2025 within the Government segment and is included as a component of cash flows from operations within the accompanying consolidated statement of cash flows for the year ended December 31, 2025. The PCC Contract generated total revenue of approximately $36.3 million (inclusive of the PCC Contract Close-Out Payment) and $186.4 million for the years ended December 31, 2025 and 2024, respectively. The combined PCC Contract and prior contract with the NP Partner generated total revenue of approximately $347.8 million for the year ended December 31, 2023. No further payments are expected from the PCC Contract. The Company retained ownership of the related assets that were associated with the PCC Contract, enabling the Company to continue utilizing these modular solutions and real property to support customer demand across its operating segments and other potential growth opportunities. Certain assets previously associated with servicing the PCC Contract were redeployed to the WHS segment to service the requirements of the Data Center Community Contract described below. The Company is actively engaged in remarketing the remaining assets that were associated with servicing the PCC Contract.

During the year ended December 31, 2025, the Company entered into the Data Center Community Contract to construct and provide comprehensive facility services and hospitality solutions supporting the Data Center Community. The Company will provide full turnkey support for the Data Center Community, including premium culinary offerings, facilities management, and comprehensive support services. The purpose-built and highly customized Community will support an initial population of 250 individuals, with the capability to expand to approximately 1,500 individuals. Construction and mobilization of the Community for the initial 250 beds was completed as of September 30, 2025, and first occupancy of the Community began in September 2025 for the initial 250 beds. During the three months ended December 31, 2025, the scope of the Data Center Community Contract was amended to add an additional 800 beds to the Data Center Community by June 2026, representing a 320% increase from the initial Community size, resulting in a customized and purpose-built community capable of supporting up to 1,050 individuals (“Expanded Community Contract”). The assets comprising the 1,050 beds supporting the Data Center Community will be owned and managed by the Company. The Company anticipates additional potential Community expansions to meet growing customer demand in future years. The Expanded Community Contract, which has an initial term through September 2027 for the initial 250 beds and, as amended, an initial term through May 2028 for the additional 800 beds, is expected to generate approximately$134 million of committed minimum revenue over the initial terms, which includes advanced payments to be paid in installments during the initial construction and mobilization phase of the Expanded Community Contract to fund the initial construction and mobilization of the Community and related expansions. The Company utilized a portion of its existing asset portfolio to construct the premium Data Center Community and, during the year ended December 31, 2025, began receiving advanced payments from the customer to fund the construction and mobilization of the Community. As services began in September 2025, most of the advance payments were received as of December 31, 2025, and are reflected as cash

flows from operations during the year ended December 31, 2025. The advanced payments were determined to be related to future services and will be initially recognized as deferred revenue upon receipt and included as a component of deferred revenue and customer deposits within the accompanying consolidated balance sheet and amortized as revenue over the estimated term of the contract. The Data Center Community Contract began to generate revenue during the year ended December 31, 2025, and is reported within the Company’s WHS segment.

In December 2025, the Company announced a 25-month contract award agreement to build and operate a community in Northern Nevada, supporting power generation expansion for mining and data center projects (the “Power Community Contract”). It is expected to generate approximately $35 million in revenue over its initial 25-month term starting in June of 2026, accommodate up to 250 individuals, and leverage the Company’s existing regional infrastructure with minimal capital investment of $8 million to $10 million. The operating results for this contract are expected to be reported within the WHS operating segment beginning in June of 2026 as the contract generated no operating revenues for the year ended December 31, 2025.

Allowance for Credit Losses

The Company maintains allowances for credit losses. These allowances reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. Our estimate could require a change based on changing circumstances, including changes in the economy or in the circumstances of individual customers.

Contract Assets and Liabilities

We do not have any contract assets.

Contract liabilities primarily consist of deferred revenue that represent advanced payments for rental of assets that is being recognized over the related contract period, a security deposit, advanced payments for community builds, and mobilization of asset activities related to community expansions that are being recognized over the related contract period, and billings in excess of costs. Activity in the deferred revenue accounts as of the dates indicated below was as follows:

As a result of the termination of the STFRC Contract effective August 9, 2024 in the Company’s Government Segment, the Company recognized the $4.9 million of deferred revenue remaining at December 31, 2023 associated with this contract during the year ended December 31, 2024 as is reflected in the above table, as no further service obligations existed.

As of December 31, 2025, the following table discloses the estimated revenues under ASC 606 related to performance obligations that are unsatisfied (or partially unsatisfied) and when we expect to recognize the revenue, and only represents revenue expected to be recognized from contracts where the price and quantity of the product or service are fixed (in thousands):

The Company applied some of the practical expedients in ASC 606, including the “right to invoice” practical expedient, and does not disclose consideration for remaining performance obligations for contracts without minimum revenue amounts or for variable consideration related to unsatisfied (or partially unsatisfied) performance obligations. Due to the application of these practical expedients as well as excluding rental income revenue subject to the guidance included in ASC 842, the table above represents only a portion of the Company’s expected future consolidated revenues and it is not necessarily indicative of the expected trend in total revenues.

3. Specialty Rental Assets, Net

Specialty rental assets, net at the dates indicated below consisted of the following:

There wereno specialty rental assets under finance lease as of December 31, 2025 and 2024, respectively. Depreciation expense of these assets is presented in depreciation of specialty rental assets in the accompanying consolidated statements of comprehensive income (loss). During the year ended December 31, 2025, there was also a non-cash change in specialty rental assets and related accumulated depreciation due to the effect of exchange rate changes in the amount of approximately $0.6 million with no net impact to specialty rental assets, net.

In January 2025, the Company purchased a group of assets consisting of land, and specialty rental assets (building, modular units, site work, and furniture & fixtures) for approximately $15.5 million, of which, approximately $14.9 million is included within this asset group, to support growth of the WHS segment discussed in Note 18, which was funded by cash on hand. The acquisition was accounted for as an asset acquisition. The Company allocated the total purchase price to identifiable tangible assets based on their relative fair values, which resulted in the entire purchase price being allocated to land, and specialty rental assets.

During the year ended December 31, 2024, the Company disposed of assets with accumulated depreciation of approximately $0.5 million along with the related gross cost of approximately $0.7 million. These asset disposals resulted in a net gain on sale of specialty rental assets of approximately $0.1 million (net of sale proceeds of approximately $0.3 million) and is reported within other expense (income), net in the accompanying consolidated statement of comprehensive income (loss) for the year ended December 31, 2024. During the year ended December 31, 2024, there was also a non-cash change in specialty rental assets and related accumulated depreciation due to the effect of exchange rate changes in the amount of approximately $1 million with no net impact to specialty rental assets, net.

4. Other Property, Plant and Equipment, Net

Other property, plant, and equipment, net at the dates indicated below, consisted of the following:

Depreciation expense related to other property, plant and equipment was approximately $2.7 million, $2.2 million and $1.9 million for the years ended December 31, 2025, 2024 and 2023, respectively, and is included in other depreciation and amortization in the consolidated statements of comprehensive income (loss). During the year ended December 31, 2025, the Company retired finance lease right-of-use assets pertaining to commercial-use vehicles included in the Other category above, with accumulated depreciation of $1.0 million and a gross cost of $1.3 million, which resulted in a net loss on the disposal of leased assets of approximately $0.3 million and is reported within other expense (income), net in the accompanying consolidated statement of comprehensive income (loss) for the year ended December 31, 2025.

Included in other property, plant and equipment, net are certain assets under finance lease. The gross cost of the assets under finance lease was approximately $10.3 million and $8.5 million as of December 31, 2025 and 2024, respectively. The accumulated depreciation related to finance lease assets totaled approximately $6.5 million and $5.2 million as of December 31, 2025 and 2024, respectively. Such amounts under finance lease are included in the other category in the above table as of December 31, 2025 and 2024, respectively.

In January 2025, the Company purchased a group of assets consisting of land, and specialty rental assets (building, modular units, site work, and furniture & fixtures) for approximately $15.5 million, of which, approximately $0.6 million is included within this asset group related to the land portion of the acquisition, to support growth of the WHS segment discussed in Note 18, which was funded by cash on hand. The acquisition was accounted for as an asset acquisition. The Company allocated the total purchase price to identifiable tangible assets based on their relative fair values, which resulted in the entire purchase price being allocated to land, and specialty rental assets.

5. Goodwill and Other Intangible Assets, net

The financial statements reflect goodwill from previous acquisitions that is all attributable to the HFS – South business segment and reporting unit.

Changes in the carrying amount of goodwill were as follows:

In connection with our annual assessment on October 1, we performed a qualitative assessment based on information currently available in determining if it was more likely than not that the fair value of the Company’s HFS – South reporting unit was less than the carrying amount. This assessment considered various factors, including changes in the carrying value of the reporting unit, forecasted operating results, other qualitative key events and circumstances, including the macroeconomic environment, the industry, market conditions, cost factors, and events specific to the reporting unit. Based on the results of this qualitative assessment, management concluded that it is not more likely than not that the fair value of the Company's HFS – South reporting unit was less than its carrying amount.

Intangible assets other than goodwill at the dates indicated below consisted of the following:

The aggregate amortization expense for intangible assets subject to amortization was $13.5 million, $13.5 million and $13.4 million for the years ended December 31, 2025, 2024 and 2023, respectively, and is included in other depreciation and amortization in the consolidated statements of comprehensive income (loss).

The estimated aggregate amortization expense as of December 31, 2025 for each of the next five years and thereafter is as follows:

6. Accrued Liabilities

Accrued liabilities as of the dates indicated below consists of the following:

Other accrued liabilities in the above table relates primarily to accrued utilities, real estate and sales taxes, state and federal income taxes, and other accrued operating expenses.

7. Debt

2025 Senior Secured Notes

On November 1, 2023 (the “Notes Exchange Offer Settlement Date” or “Notes Settlement Date”), approximately $181.4 million of Arrow Bidco’s 9.50% Senior Secured Notes due 2024 (the “2024 Senior Secured Notes”) were exchanged by Arrow Bidco and Arrow Bidco issued approximately $181.4 million in aggregate principal amount of its 10.75% Senior Secured Notes due 2025 (the “2025 Senior Secured Notes”) pursuant to an indenture, dated November 1, 2023, by and among Arrow Bidco, the guarantors from time to time party thereto and Deutsche Bank Trust Company Americas, as trustee and collateral agent (the “2025 Senior Secured Notes Indenture”). Following the Notes Settlement Date, approximately $28.1 million aggregate principal amount of 2024 Senior Secured Notes remained outstanding, which were subsequently redeemed on November 21, 2023, resulting in an outstanding balance of $0. As such, none of the 2024 Senior Secured Notes remain outstanding. The 2025 Senior Secured Notes were scheduled to mature on June 15, 2025. Interest on the 2025 Senior Secured Notes accrued at 10.75% per annum, payable semi-annually on March 15 and September 15 of each year, and began March 15, 2024. On March 10, 2025, the Company issued a notice of redemption (the “Redemption”) to redeem all $181.4 million in aggregate principal amount of its 2025 Senior Secured Notes on March 25, 2025 (the “Redemption Date”). The 2025 Senior Secured Notes redeemed pursuant to the Redemption were redeemed for a redemption price equal to 101.000% of the principal amount of the 2025 Senior Secured Notes redeemed plus accrued and unpaid interest to but not including the Redemption Date. As of March 25, 2025, the 2025 Senior Secured Notes were redeemed, paid in full and areno longer outstanding. The premium cost associated with the Redemption amounted to approximately $1.8 million and was recognized as a component of loss on extinguishment of debt for the year ended December 31, 2025, in the accompanying consolidated statement of comprehensive loss. Additionally, the premium cost was recognized as a cash outflow from financing activities within the accompanying consolidated statement of cash flows for the year ended December 31, 2025.

In connection with the issuance of the 2025 Senior Secured Notes, there was an original issue discount of approximately $2.7 million and the discount was being amortized over the original term of the 2025 Senior Secured Notes using the effective interest method. The unamortized original issue discount balance of approximately $0.4 million was recognized as a component of loss on extinguishment of debt for the year ended December 31, 2025 in the accompanying consolidated statement of comprehensive income (loss) in connection with the Redemption of the 2025 Senior Secured Notes.

Finance Lease and Other Financing Obligations

The Company’s finance lease and other financing obligations as of December 31, 2025 consisted of $3.8 million of finance leases. The finance leases pertain to leases entered into during 2022 through December 31, 2025, for commercial-use vehicles with 36-month terms (and continue on a month-to-month basis thereafter) expiring through 2028. Refer to Note 12 for further discussion of finance leases, including the weighted average discount rate applicable to these finance leases.

The Company’s finance lease and other financing obligations as of December 31, 2024, primarily consisted of $3.3 million of finance leases related to commercial-use vehicles with the same terms as described above.

ABL Facility

On March 15, 2019, Topaz, Arrow Bidco, Target, Signor and each of their domestic subsidiaries entered into an ABL credit agreement that provided for a senior secured asset based revolving credit facility in the aggregate principal amount of up to $125 million (as amended from time to time, the “ABL Facility”), which was increased to $175 million with the Third Amendment discussed below. During the years ended December 31, 2024 and 2023, respectively, no amounts were drawn or repaid on the ABL Facility resulting in an outstanding balance of $0 as of December 31, 2024 and 2023, respectively. During the year ended December 31, 2025, all amounts drawn on the ABL Facility were fully repaid resulting in an outstanding balance of $0 as of December 31, 2025.

Borrowings under the ABL Facility, at the relevant borrower’s (the borrowers under the ABL Facility, the “Borrowers”) option, bear interest at either (1) Term SOFR or (2) a base rate, in each case plus an applicable margin. The applicable margin is 4.25% to 4.75% with respect to Term SOFR borrowings and 3.25% to 3.75% with respect to base rate borrowings based on achieving certain excess availability levels. The rates of the applicable margin were determined in connection with the Third Amendment to the ABL Facility on October 12, 2023 (the “Third Amendment”).

Pursuant to the Third Amendment, the ABL Facility provides borrowing availability of an amount equal to the lesser of (a) $175 million and (b) the Borrowing Base (defined below) (the “Line Cap”).

The Borrowing Base is, at any time of determination, an amount (net of reserves) equal to the sum of:

The ABL Facility includes borrowing capacity available for standby letters of credit of up to $25 million and for ‘‘swingline’’ loan borrowings of up to $15 million. Any issuance of letters of credit or making of a swingline loan will reduce the amount available under the ABL Facility.

In addition, the ABL Facility will provide the Borrowers with the option to increase commitments under the ABL Facility in an aggregate amount not to exceed $25 million plus any voluntary prepayments that are accompanied by permanent commitment reductions under the ABL Facility. The termination date of the ABL Facility is February 1, 2028, which was subject to a springing maturity that would have accelerated the maturity of the ABL Facility if any of the 2025 Senior Secured Notes (or any indebtedness incurred to refinance the 2025 Senior Secured Notes) remained outstanding on the date that is ninety-one days prior to the stated maturity date thereof. On February 24, 2025 and February 27, 2025, Arrow Bidco, LLC entered into a fourth amendment (the “Fourth Amendment”) and a fifth amendment (the “Fifth Amendment”), respectively, to the ABL Facility. The Fourth Amendment amended the ABL Facility to modify the springing maturity provision that would have accelerated the maturity of the facility if any of the 2025 Senior Secured Notes remained outstanding on the date that is ninety-one days prior to the stated maturity date thereof (March 15, 2025) to March 18, 2025, which was further modified by the Fifth Amendment to March 31, 2025. As previously mentioned, none of the 2025 Senior Secured Notes remain outstanding as they were redeemed and paid in full on March 25, 2025, and as such, the springing maturity date discussed above no longer applies. On December 23, 2025, Arrow Bidco, LLC and certain of the Company’s other subsidiaries entered into a sixth amendment (the “Sixth Amendment”) to the ABL Facility. The Sixth Amendment provides additional flexibility in connection with the timing of anticipated capital expenditures associated with planned growth projects and, among other things: (i) suspends the minimum fixed charge coverage ratio maintenance covenant; (ii) reduces the maximum total leverage ratio maintenance covenant to 1.50:1.00; and (iii) requires the Borrowers to maintain excess availability under the ABL Facility of the greater of (a)40% of the Line Cap and (b) $70 million. Each of these modifications applies until (but excluding) January 1, 2027, unless the Company elects an earlier reinstatement. The Company was in compliance with the financial covenants under the ABL Credit Agreement as of the date of the Sixth Amendment and remained in compliance with such covenants as of December 31, 2025.

The obligations under the ABL Facility are unconditionally guaranteed by Topaz and each existing and subsequently acquired or organized direct or indirect wholly-owned U.S. organized restricted subsidiary of Arrow Bidco (together with Topaz, the “ABL Guarantors”), other than certain excluded subsidiaries. The ABL Facility is secured by (i) a first priority pledge of the equity interests of Topaz, Arrow Bidco, Target, and Signor (the “Borrowers) and of each direct, wholly-owned US organized restricted subsidiary of any Borrower or any ABL Guarantor, (ii) a first priority pledge of up to 65% of the voting equity interests in each non-US restricted subsidiary of any Borrower or ABL Guarantor and (iii) a first priority security interest in substantially all of the assets of the Borrower and the ABL Guarantors (in each case, subject to customary exceptions).

Prior to the effectiveness of the Sixth Amendment, and as set forth in the Third Amendment, the ABL Facility required the Borrowers to maintain a (i) minimum fixed charge coverage ratio of not less than 1.00:1.00 and (ii) maximum total

leverage ratio of 2.50:1.00. During the period in which the covenant modifications under the Sixth Amendment remain in effect, the ABL Facility does not require the Borrowers to maintain a minimum fixed charge coverage ratio and requires compliance with a maximum total leverage ratio of 1.50:1.00.

The ABL Facility also contains a number of customary negative covenants. Such covenants, among other things, limit or restrict the ability of each of the Borrowers, their restricted subsidiaries, and where applicable, Topaz, to:

The aforementioned restrictions are subject to certain exceptions including (i) the ability to incur additional indebtedness, liens, investments, dividends and distributions, and prepayments of junior indebtedness subject, in each case, to compliance with certain financial metrics and certain other conditions and (ii) a number of other traditional exceptions that grant the ABL Borrowers continued flexibility to operate and develop their businesses. The ABL Facility also contains certain customary representations and warranties, affirmative covenants and events of default.

The carrying value of debt outstanding as of the dates indicated below consist of the following:

Interest expense, net

The components of interest expense, net (which includes interest expense incurred) recognized in the consolidated statements of comprehensive income (loss) for the periods indicated below consist of the following, including the components of interest expense, net on the 2024 and 2025 Senior Secured Notes (collectively, the “Notes”):

Deferred Financing Costs and Original Issue Discount

The Company presents unamortized deferred financing costs and unamortized original issue discount as a direct deduction from the principal amount of the 2025 Senior Secured Notes on the consolidated balance sheet as of December 31, 2024.

In connection with the Notes Exchange Offer and issuance of the 2025 Senior Secured Notes in 2023, the Company incurred and deferred approximately $0.8 million of deferred financing costs and approximately $2.7 million of original issue discount, which are included, net of accumulated amortization in the carrying value of the 2025 Senior Secured Notes as of December 31, 2024. Accumulated amortization expense related to the deferred financing costs was approximately $14.0 million as of December 31, 2024. Accumulated amortization of the original issue discount was approximately $4.8 million as of December 31, 2024. The redemption of the 2025 Senior Secured Notes on March 25, 2025 was accounted for as an extinguishment of debt and consequently, all of the unamortized deferred financing costs and unamortized original issue discount were expensed through loss on extinguishment of debt within the accompanying consolidated statement of comprehensive income (loss) for the year ended December 31, 2025. The loss on extinguishment of debt amounted to approximately $2.4 million consisting of the premium cost of approximately $1.8 million previously discussed, with the remaining portion related to the write-off of unamortized deferred financing costs and unamortized original issue discount as of March 25, 2025.

In connection with the Notes Exchange Offer Settlement Date previously mentioned, The Company recognized a charge of approximately $1.9 million in loss on extinguishment of debt related to the write-off of unamortized deferred financing costs and unamortized original issue discount associated with the extinguishment of the 2024 Senior Secured Notes for the year ended December 31, 2023. The Company also incurred deferred financing costs associated with the ABL Facility, which are capitalized and presented net of accumulated amortization on the consolidated balance sheets as of December 31, 2025 and 2024, respectively, within deferred financing costs revolver, net. These costs are amortized over the contractual term of the line-of-credit through the ABL Facility termination date using the straight-line method.

In connection with the First Amendment to the ABL Facility, which was considered a modification for accounting purposes, any unamortized deferred financing costs from the ABL Facility that pertained to non-continuing lenders were expensed through loss on extinguishment of debt on the consolidated statement of comprehensive income as of the amendment date. As such, the Company recognized a charge of approximately $0.4 million in loss on extinguishment of debt related to the write-off of unamortized deferred financing costs pertaining to non-continuing lenders during the year ended December 31, 2023.

Accumulated amortization related to revolver deferred financing costs for the ABL Facility was approximately $6.5 million and $5.9 million as of December 31, 2025 and 2024, respectively.

Refer to the components of interest expense table in Note 7 for the amounts of the amortization expense related to the deferred financing costs and original issue discount recognized for each of these debt instruments for the years ended December 31, 2025, 2024, and 2023, respectively.

Future maturities

The aggregate annual principal maturities of debt and finance lease obligations for each of the next five years, based on contractual terms are listed in the table below. Refer to Note 12 for additional information on our finance lease obligations, including contractual terms.

The schedule of future maturities as of December 31, 2025 consists of the following:

8. Warrant Liabilities

On January 17, 2018, Harry E. Sloan, Joshua Kazam, Fredric D. Rosen, the Sara L. Rosen Trust and the Samuel N. Rosen 2015 Trust, purchased from Platinum Eagle an aggregate of 5,333,334 Private Warrants at a price of $1.50 per warrant (for an aggregate purchase price of $8.0 million) in a private placement that occurred simultaneously with the completion of its initial public offering. Each Private Warrant entitles the holder to purchaseone share of Common Stock at $11.50 per share. The purchase price of the Private Warrants was added to the proceeds from Platinum Eagle’s initial public offering and was held in the Trust Account until the formation of the Company on March 15, 2019. The Private Warrants (including the shares of Common Stock issuable upon exercise of the Private Warrants) were not transferable, assignable or salable until 30 days after the formation of the Company on March 15, 2019, and they were exercisable on a cashless basis and were non-redeemable so long as they were held by the initial purchasers of the Private Warrants or their permitted transferees.

The Company evaluated the Private Warrants under ASC 815-40,Derivatives and Hedging—Contracts in Entity’s Own Equity, and concluded that they did not meet the criteria to be classified in stockholders’ equity and should be classified as liabilities. Since the Private Warrants met the definition of a derivative under ASC 815, the Company recorded the Private Warrants as liabilities on the balance sheet at their estimated fair value.

Subsequent changes in the estimated fair value of the Private Warrants are reflected in the change in fair value of warrant liabilities in the accompanying consolidated statements of comprehensive income (loss). The change in the estimated fair value of the Private Warrants resulted in a gain of approximately ($0.7) million and ($9.1) million during the years ended December 31, 2024, and 2023, respectively.

As of December 31, 2025 and 2024, the Company hadno Private Warrants issued and outstanding as the Private Warrants expired unexercised on March 15, 2024.

9. Income Taxes

The components of the provision for income taxes are comprised of the following for the years ended December 31:

Income tax results differed from the amount computed by applying the U.S. statutory income tax rate to income before income taxes (“IBIT”) for the following reasons for the years ended December 31:

(1) State taxes in Texas made up the majority (greater than 50 percent) of the tax effect in this category.

The 2025 columns of the table above were prepared in accordance with the updated requirements of ASU 2023-09*, Improvements to Income Tax Disclosures*. See Note 1 – Organization and Nature of Operations, Basis of Presentation, and Summary of Significant Accounting Policies for additional details on the adoption of this new accounting standard.

Income tax expense (benefit) was($6.1) million,$21.4 million and$51.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. The effective tax rate for the years ended December 31, 2025, 2024, and 2023 was 14.2%,23.1% and 22.7%, respectively. The fluctuation in the rate for the years ended December 31, 2025, 2024 and 2023, respectively, results primarily from the relationship of year-to-date income before income tax, the fluctuation in the permanent add-back related to the change in fair value of warrant liabilities on the Company’s warrants, the impact of state tax expense based off of gross receipts, and a compensation deduction limitation during each of the years ended December 31, 2025, 2024 and 2023.

Deferred Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating losses and carryforwards.

Summary of tax accounts on the Consolidated Balance Sheets is as follows:

Significant components of the deferred tax assets and liabilities for the Company are as follows:

Income taxes paid, net of refunds received, consisted of the following:

Tax loss carryovers for domestic income tax purposes totaled approximately $16.2 million at December 31, 2025. Under currently enacted tax laws, these tax carryovers are not subject to expiration. Tax loss carryovers for foreign income tax purposes totaled approximately $11.2 million at December 31, 2025 as shown in the below table. Approximately $11.2 million of these foreign income tax loss carryovers expire between 2031 and 2045. Realization is dependent on generating sufficient taxable income prior to expiration of the loss carryforwards. Avaluation allowance has been established against the deferred tax assets to the extent it is not more likely than not they will be realized.

Unrecognized Tax Positions

No amounts have been accrued for uncertain tax positions as of December 31, 2025 and 2024. However, management's conclusion regarding uncertain tax positions may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations, and interpretations thereof and other factors. The Company does not have any unrecognized tax benefits as of December 31, 2025 and 2024 and does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Additionally, no interest or penalty related to uncertain taxes has been recognized in the accompanying consolidated financial statements.

The Company is subject to taxation in US, Canada, Mexico and state jurisdictions. The Company’s tax returns are subject to examination by the applicable tax authorities prior to the expiration of the statute of limitations for assessing additional taxes, which generally ranges fromtwo tofive years. Therefore, as of December 31, 2025, tax years for 2018 through 2025 generally remain subject to examination by the tax authorities. In addition, in the case of certain tax jurisdictions in which the Company has loss carryforwards, the tax authority may examine the amount of the tax loss carryforward based on when the loss is utilized rather than when it arises.

10. Fair Value of Financial Instruments

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has assessed that the fair value of cash and cash equivalents, trade receivables, trade payables, other current liabilities, and other debt approximates their carrying amounts largely due to the short-term maturities or recent commencement of these instruments. The fair value of the ABL Facility is primarily based upon observable market data, such as market interest rates, for similar debt. The fair value of the Notes is based upon observable market data.

Level 1 & 2 Disclosures:

The carrying amounts and fair values of financial assets and liabilities, which are either Level 1 or Level 2, are as follows:

11. Commitments and Contingencies

The Company is involved in various lawsuits or claims in the ordinary course of business. Management is of the opinion that there isno pending claim or lawsuit which, if adversely determined, would have a material impact on the financial condition of the Company.

Refer to Note 12 for disclosure regarding future minimum lease payments over the next five years at December 31, 2025, by year and in the aggregate, under non-cancelable operating leases.

In December 2025, to support growth in the Company’s WHS segment, the Company entered into a non-cancelable contract to purchase certain modular units totaling $13.8 million. Under the terms of the agreement, the Company paid a 40% non-refundable deposit of approximately $5.5 million prior to December 31, 2025. The Company is obligated to make additional payments of approximately $8.3 million during the three months ended March 31, 2026, upon which delivery will occur and title to the equipment will transfer. These remaining payments aggregating approximately $8.3 million represent a purchase commitment and will be recognized when the equipment is delivered in 2026.

12. Leases

Lessee Accounting

The Company has both finance and operating leases. The finance leases are solely comprised of the Company’s commercial-use vehicles, maturing in dates ranging from 2026 to 2028, including expected renewal options. Including all renewal options available to the Company, the lease maturity date may extend on a month-to-month basis for an unlimited period of time. Operating leases consist of land, building, office, certain community units, and equipment leases, maturing in dates ranging from 2026 to 2028, including expected renewal options. Including all renewal options available to the Company, the lease maturity date extends to 2118.

Leases were included on the Company’s consolidated balance sheet as follows:

The components of lease expense were as follows:

Supplemental cash flow information related to leases was as follows:

Future maturities of the Company’s finance and operating lease obligations at December 31, 2025 were as follows:

13. Rental Income

Lessor Accounting

Certain arrangements contain a lease of lodging facilities (“Lodges”) to customers. Rental income from these leases for the years ended December 31, 2025, 2024 and 2023 was approximately $45.8 million, $120.4 million and $198.0 million, respectively. Each Lodge is leased exclusively to one customer and is accounted for as an operating lease under the authoritative guidance for leases. Revenue related to these lease arrangements is reflected as specialty rental income in the consolidated statements of comprehensive income (loss).

Future minimum lease payments for our operating leases on an undiscounted basis to be received by the Company as of December 31, 2025 for each of the next five years is as follows:

The leased assets consists primarily of specialty rental assets with a gross cost of approximately $169.2 million and $116.6 million as of December 31, 2025 and 2024, respectively, with accumulated depreciation of approximately $92.6 million and $80.8 million as of December 31, 2025 and 2024, respectively. The leased assets have a balance net of accumulated depreciation of approximately $76.6 million and $35.8 million as of December 31, 2025 and 2024, respectively, and are included within specialty rental assets, net in the accompanying consolidated balance sheets. Such assets are depreciated consistent with the depreciation methods discussed in Note 1 for specialty rental assets. The corresponding depreciation expense was $8.9 million in 2025, $5.4 million in 2024, and $5.2 million in 2023 and is recognized within depreciation of specialty rental assets in the accompanying consolidated statements of comprehensive income (loss).

14. Earnings per Share

Basic earnings (loss) per share (“EPS” or “LPS”) is calculated by dividing net income (loss) attributable to Target Hospitality by the weighted average number of shares of Common Stock outstanding during the period. Diluted EPS is computed similarly to basic net earnings per share, except that it includes the potential dilution that could occur if dilutive securities were exercised. We apply the treasury stock method in the calculation of diluted earnings per share. During periods when net losses are incurred, potential dilutive securities would be anti-dilutive and are excluded from the calculation of diluted loss per share for that period. A net loss was recorded for the year ended December 31, 2025, while net income was recorded for the years ended December 31, 2024 and 2023, respectively.

The following table reconciles net income (loss) attributable to common stockholders and the weighted average shares outstanding for the basic calculation to the net income (loss) attributable to common stockholders and the weighted average shares outstanding for the diluted calculation for the periods indicated below ($ in thousands, except per share amounts):

When liability-classified warrants are in the money and the impact of their inclusion on diluted EPS is dilutive, diluted EPS also assumes share settlement of such instruments through an adjustment to net income (loss) available to common stockholders for the fair value (gain) loss on common stock warrant liabilities and inclusion of the number of dilutive shares in the denominator. Public and Private Warrants representing a total of 8,044,287 shares of the Company’s Common Stock for the year ended December 31, 2023 were included in the computation of diluted EPS because their effect is dilutive. No Public or Private Warrants, which expired in accordance with their terms on March 15, 2024, were outstanding as of December 31, 2024 and 2025, respectively, and because they are considered anti-dilutive for the period they were outstanding; the Public and Private Warrants had no impact on the computation of diluted EPS for the year ended December 31, 2024.

As discussed in Note 16, stock-based compensation awards were outstanding for the years ended December 31, 2025, 2024 and 2023, respectively. For the year ended December 31, 2025, these stock-compensation awards were excluded from the computation of diluted LPS, as their effect would have been anti-dilutive as a net loss was recorded for the year ended December 31, 2025. For the years ended December 31, 2024 and 2023, stock-based compensation awards were included in the computation of diluted EPS because their effect is dilutive as noted in the above table. However,

approximately 683,406 of contingently issuable PSUs were excluded from the computation of diluted EPS for the year ended December 31, 2024 as not all necessary conditions for issuance of these PSUs were satisfied, which includes 208,406 of PSUs that did not meet all of the Company’s Diversification EBITDA and TSR criteria (see Note 16). Additionally, approximately 716,025 of contingently issuable PSUs were excluded from the computation of diluted EPS for the year ended December 31, 2023 as not all necessary conditions for issuance of these PSUs were satisfied, which includes 91,025 of PSUs that did not meet all of the Company’s Diversification EBITDA and TSR criteria (see Note 16).

Shares of treasury stock have been excluded from the computation of EPS.

15. Stockholders’ Equity

Common Stock

As of December 31, 2025, Target Hospitality had 113,094,172 shares of Common Stock, par value $0.0001 per share issued and 99,797,242 outstanding. Each share of Common Stock hasone vote.

Preferred Shares

Target Hospitality is authorized to issue 1,000,000 preferred shares with par value of$0.0001 per share. As of December 31, 2025, no preferred shares were issued or outstanding.

Public Warrants

On January 17, 2018, PEAC sold 32,500,000 units at a price of $10.00 per unit (the “Units”) in its initial public offering (the “Public Offering”), including the issuance of 2,500,000 Units as a result of the underwriters’ partial exercise of their overallotment option. Each Unit consisted ofone Class A ordinary share of PEAC, par value $0.0001 per share (the “Public Shares”), andone-third ofone warrant to purchaseone ordinary share (the “Public Warrants”).

Each Public Warrant entitled the holder to purchaseone share of the Company’s Common Stock at a price of $11.50 per share. No fractional shares will be issued upon exercise of the Public Warrants. If upon exercise of the Public Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will upon exercise, round down to the nearest whole number, the number of shares to be issued to the Public Warrant holder. Each Public Warrant became exercisable 30 days after the formation of the Company.

During the year ended December 31, 2023, holders of Public Warrants exercised 17,369 Public Warrants for shares of Common Stock resulting in the Company receiving cash proceeds of approximately $0.2 million and issuing 17,369 shares of Common Stock. As of December 31, 2023, the Company had 6,510,953 Public Warrants issued and outstanding.

During the year ended December 31, 2024, holders of Public Warrants exercised 1,079 Public Warrants for shares of Common Stock resulting in the Company receiving cash proceeds of less than $0.1 million and issuing 1,079 shares of Common Stock. As of December 31, 2025 and 2024, respectively, the Company hadno Public Warrants issued and outstanding, which had expired on March 15, 2024 in accordance with their terms.

Common Stock in Treasury

In August 2022, the Inflation Reduction Act of 2022 was enacted into law and imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. The Company reflected the applicable excise tax in equity as part of the cost basis of the stock repurchased during the year ended December 31, 2024 and recorded a corresponding liability for the excise taxes payable in accrued expenses on the consolidated balance sheet as of December 31, 2024 in an amount of approximately $0.2 million all of which was paid during the year ended December 31, 2025.

On November 3, 2022, the Company’s Board of Directors approved a stock repurchase program that authorizes the Company to repurchase up to $100 million of its outstanding shares of Common Stock. The stock repurchase program

does not obligate the Company to purchase any particular number of shares, and the timing and exact amount of any repurchases will depend on various factors, including market pricing and conditions, business, legal, accounting, and other considerations. Any shares of Common Stock repurchased under such program will be held as treasury shares. Treasury stock is reflected as a reduction of stockholders’ equity at cost.

The Company may repurchase its shares in open market transactions from time to time or through privately negotiated transactions in accordance with federal securities laws, at the Company's discretion. The repurchase program, which has no expiration date, may be increased, suspended, or terminated at any time. The program is expected to be implemented over the course of several years and is conducted subject to the covenants in the agreements governing the Company's indebtedness. No share repurchases were made during the year ended December 31, 2025. As of December 31, 2025,13,296,930 shares of Common Stock for an aggregate price of approximately $57.3 million were held in treasury stock (at cost). During the year ended December 31, 2024, the Company repurchased 3,866,265 shares of Common Stock for an aggregated price of approximately $33.4 million (excluding the excise tax discussed above). As of December 31, 2025, the stock repurchase program had a remaining capacity of approximately $66.6 million.

Other

On December 12, 2024 (the “Settlement Date”), the Company issued an aggregate of 90,000 unregistered, restricted shares of its common stock, par value $0.0001 per share, to Jeff Sagansky, a former director of the Company, in settlement of Mr. Sagansky’s purported exercise of certain warrants held by him. With respect to such issuance, the Company relied on an exemption from the registration requirements under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereunder. The Company valued these shares on the Settlement Date at approximately $0.8 million based on the traded closing price of the Common Stock on the Settlement Date and recognized this amount as an increase to additional paid-in-capital in the accompanying consolidated balance sheet as of December 31, 2024 and as an expense within selling, general and administrative expenses in the accompanying consolidated statement of comprehensive income (loss) for the year ended December 31, 2024.

16. Stock-Based Compensation

On March 15, 2019, the Company’s board of directors approved the Plan, which initially authorized the issuance of 4,000,000 shares of the Company’s Common Stock. Stockholders approved amendments to the Plan on May 19, 2022 and May 22, 2025, increasing the number of shares authorized for issuance by 4,000,000 and 5,000,000 shares, respectively. A total of 13,000,000 shares were authorized for issuance under the Plan as of December 31, 2025. The expiration date of the Plan, on and after which no awards may be granted, is March 15, 2029.

The Plan permits the Company to grant restricted stock units (“RSUs”), performance stock units (“PSUs”), stock appreciation rights (“SARs”), and stock options to employees, officers, and non-employee directors. RSUs generally vest ratably over three orfour years, except for RSU awards granted to non-employee directors of the board, which generally vest overone year on the anniversary of the date of grant or the date of the first annual meeting of the stockholders following the grant date, whichever is sooner. For RSU awards granted to non-employee directors that resign prior to vesting, the Board may approve acceleration of vesting of RSUs granted as permitted by the Plan. PSUs generally vest on the third anniversary of the grant date and are earned based on performance metrics that may include operating cash flow, the Company’s Total Shareholder Return (“TSR Based Award”), Diversification EBITDA (as defined in the applicable PSU Agreement), or stock-price performance, depending on the award year. PSU payouts may range from 0% to 200% (or 150% for certain PSU awards) of target. SARs and options, when granted, vest over three orfour years.

Awards typically provide for pro-rated or accelerated vesting upon a qualifying Retirement (as defined in the Plan), provided the participant has been continuously employed by the Company for at least twelve months following the grant date. In the case of PSUs and RSUs issued to certain executives, vesting is contingent upon the executive’s continued employment through the vesting date, unless the executive’s employment is terminated by reason of death, without Cause, for Good Reason, or in the event of a Change in Control (each term as defined in the Plan).

At the election of participants, the Company may withhold Units and Common Stock, or participants may tender previously acquired shares or cash, to satisfy statutory minimum tax withholding obligations arising upon the vesting or settlement

of awards. In accordance with the terms of the Plan, any shares withheld or tendered for this purpose are added back to the Plan’s share reserve on a one-for-one basis and become available for future awards.

Classification of Awards

Awards granted under the Plan are generally settled in shares and classified as equity, except for SARs and certain RSUs (as determined by the Compensation Committee), which may be settled in cash and classified as liability-based awards. Certain awards may also be classified as liability-based awards if there are insufficient shares available under the Plan to service awards upon vesting. As of December 31, 2025, no SAR awards were outstanding and there wereno liability-based awards outstanding.

Share Availability

As of December 31, 2024, assuming maximum payout of all outstanding PSUs,953,569 shares remained available for future issuance under the Plan.

As of December 31, 2025, assuming maximum PSU payout,2,645,618 shares remained available for future issuance under the Plan.

Restricted Stock Units

Beginning on May 21, 2019, the Compensation Committee began granting time-based RSUs to the Company’s executive officers, certain other employees, and non-employee directors. Each RSU represents a contingent right to receive, upon vesting, one share of the Company’s Common Stock or its cash equivalent, as determined by the Compensation Committee. These RSU awards granted to executive officers and other employees generally vest infour equal installments on each of the first four anniversaries of the grant date, except for 1,134,524 of RSUs granted on February 25, 2021, whereby 50% vest on the second grant date anniversary and 50% vest on the third grant date anniversary. The RSU awards granted to non-employee directors of the board, except as noted below, generally vest overone year on the anniversary of the date of grant or the date of the first annual meeting of the stockholders following the grant date, whichever is sooner. However, with respect to RSU awards granted to non-employee directors that resign prior to vesting, the Board may approve acceleration of vesting of RSUs granted as permitted by the Plan.

For the years ended December 31, 2023, 2024, and 2025, respectively, certain of the Company's employees surrendered RSUs owned by them to satisfy their statutory minimum federal and state tax obligations associated with the vesting of RSUs issued under the Plan.

The table below represents the changes in RSUs for the years indicated below:

The total fair value of RSUs vested during the years ended December 31, 2025, 2024 and 2023 was$2.4 million,$9.5 million, and$17.7 million, respectively.

Stock-based compensation expense for these RSUs recognized in selling, general and administrative expense in the consolidated statement of comprehensive income (loss) for the years ended December 31, 2025, 2024, and 2023, was approximately $4.4 million, $3.8 million, and $5.2 million, respectively, with associated tax benefits of approximately $1.1 million, $0.9 million, and $1.3 million, respectively. At December 31, 2025, unrecognized compensation expense related to RSUs totaled approximately $5.9 million and is expected to be recognized over a remaining term of approximately 2.38 years.

Performance Stock Units

On February 24, 2022, the Company awarded an aggregate of 245,017 time and performance-based PSUs to certain of the Company’s executive officers and management, which vest upon satisfaction of continued service with the Company until the third anniversary of the grant date and attainment of Company specified three-year cumulative operating cash flow amounts as determined based on the net cash flow from operations disclosed in the Company’s Annual Reports on Form 10-K for the period from January 1, 2022 through December 31, 2024. The number of PSUs that vest range from 0% to 150% of the Target Level (as defined in the 2022 PSU Agreement) depending on the attainment of Company cash flow performance criteria as previously defined. As of December 31, 2024,174,419 of these awards were outstanding and during the year ended December 31, 2025 all vested at 150% of the Target Level.

On May 24, 2022, the Company and the Company’s President and Chief Executive Officer, James B. Archer, entered into the Executive Performance Stock Unit Agreement (the “Archer PSU Agreement”) in connection with Mr. Archer’s previously disclosed intention to continue to serve as President and Chief Executive Officer of the Company and as a member of the Company’s Board of Directors. Each PSU awarded under the Agreement represents the right to receiveone share of the Company’s common stock. The PSUs awarded pursuant to the Archer PSU Agreement were scheduled to vest and become unrestricted on June 30, 2025. The number of PSUs that vested was determined based upon the achievement of specified share prices over the period between the grant date and June 30, 2025 (the “Archer Performance Period”). Mr. Archer will earn a corresponding number of PSUs upon the achievement of specified share price thresholds, the first of which is $12.50 per share. If all Performance Goals (as defined in the Archer PSU Agreement) are met during the Archer Performance Period, Mr. Archer will be entitled to receive a maximum of 500,000 PSUs. Vesting is contingent upon Mr. Archer’s continued employment through the vesting date, unless Mr. Archer’s employment is terminated by reason of death or Disability, without Cause, for Good Reason, or in the event of a Qualifying Termination in connection with a Change in Control (each term as defined in the Plan, as amended, or Mr. Archer’s employment agreement with the Company, as amended). These PSUs were valued using a Monte Carlo simulation with the following assumptions on the grant date: the expected volatility was approximately 53.82%, the term was 3.10 years, the dividend rate was 0.0% and the risk-free interest rate was approximately 2.65%, which resulted in a calculated fair value of approximately $2.21 per PSU as of the grant date. During the year ended December 31, 2025,250,000 of these awards vested at the Target Level and the remaining were forfeited as the Performance Goals were not satisfied as of June 30, 2025.

On July 12, 2022, the Compensation Committee granted 750,000 PSUs aimed at retaining, motivating and incentivizing certain of the Company’s executive officers, including its named executive officers (“NEOs”), under and pursuant to the Plan. The form of agreement with respect to the granting of the PSUs has material terms that are substantially similar to those in the Archer PSU Agreement. Such PSUs represent the right to receiveone share of the Company’s common stock, par value $0.0001 per share. The PSUs were scheduled to vest and become unrestricted on June 30, 2025. The number of PSUs that vested was determined based upon the achievement of specified share prices over the Performance Period. The executives will each earn a corresponding number of PSUs upon the achievement of specified share price thresholds, the first of which is $12.50 per share. If all Performance Goals (as defined in the applicable award agreement) are met during the Performance Period, the executives will be entitled to receive the maximum PSUs granted to them. Vesting is contingent upon the applicable executive’s continued employment through the vesting date, unless the applicable executive’s employment is terminated by reason of death or Disability, without Cause, for Good Reason, or in the event of a Qualifying Termination in connection with a Change in Control (each term as defined in the Plan, or each executive’s employment agreement, as amended, with the Company). These PSUs were valued using a Monte Carlo simulation with the following assumptions on the grant date: the expected volatility was approximately 55.76%, the term was 2.97 years,

the dividend rate was 0.0% and the risk-free interest rate was approximately 3.05%, which resulted in a calculated fair value of approximately $6.96 per PSU as of the grant date. During the year ended December 31, 2025,275,000 of these awards vested at the Target Level and the remaining were forfeited as the Performance Goals were not satisfied as of June 30, 2025.

On March 1, 2023, the Company awarded an aggregate of 91,025 time and performance-based PSUs (the “2023 PSUs”) to certain of the Company’s employees, which vest upon satisfaction of continued service with the Company until the third anniversary of the grant date and attainment of Company Diversification EBITDA (measured through the end of the Performance Period dated February 28, 2026) and TSR criteria (measured through the end of the Performance Period dated December 31, 2025). These PSUs were valued using a Monte Carlo simulation with the following assumptions on the grant date: the expected volatility was approximately 45.86%, the term was 2.84 years, the correlation coefficient was 0.6210, the dividend rate was 0.0% and the risk-free interest rate was approximately 4.60%, which resulted in a calculated fair value of approximately $20.66 per PSU as of the grant date. With respect to the performance criteria, half of these awards are subject to attainment of the Company Diversification EBITDA criteria and the other half are subject to attainment of the TSR criteria. As of December 31, 2025,73,931 of these awards were outstanding andnone of the awards had met the Diversification EBITDA and TSR criteria. In January 2026, and March 2026, respectively, the Compensation Committee approved amendments to the Executive Performance Stock Unit Agreement for these awards between the Company and certain employees, which extended the Performance Period for the TSR and Diversification EBITDA criteria through December 31, 2026, and February 28, 2027, respectively (see Note 19).

On February 29, 2024, the Company awarded an aggregate of 203,057 PSUs to certain of the Company’s executive officers and employees, which vest upon satisfaction of continued service with the Company until the third anniversary of the grant date and attainment of the Company’s Diversification EBITDA and TSR criteria. These PSUs were valued using a Monte Carlo simulation with the following assumptions on the grant date: the expected volatility was approximately 36.30%, the term was 2.84 years, the correlation coefficient was 0.5832, the dividend rate was 0.0% and the risk-free interest rate was approximately 4.41%, which resulted in a calculated fair value of approximately $13.50 per PSU as of the grant date. With respect to the performance criteria, half of these awards are subject to attainment of the Company Diversification EBITDA criteria and the other half are subject to attainment of the TSR criteria. As of December 31, 2025,203,057 of these awards were outstanding and a portion of the TSR criteria was achieved that would result in 68,948 of these awards meeting the TSR criteria, subject to continued satisfaction of the continued service criteria discussed above.

On February 27, 2025, the Company awarded an aggregate of 392,858 PSUs to certain of the Company’s executive officers and employees, which vest upon satisfaction of continued service with the Company until the third anniversary of the Grant Date and attainment of the Company’s TSR criteria. These PSUs were valued using a Monte Carlo simulation with the following assumptions on the grant date: the expected volatility was approximately 37.97%, the term was 2.84 years, the correlation coefficient was 0.5426, the dividend rate was 0.0% and the risk-free interest rate was approximately 4.01%, which resulted in a calculated fair value of approximately $7.93 per PSU as of the grant date.

On February 27, 2025, the Compensation Committee, and the Board, in the case of James B. Archer, the Company’s President and Chief Executive Officer, approved agreements granting PSUs aimed at retaining, motivating and incentivizing certain of the Company’s executive officers under and pursuant to the Plan. Settlement upon vesting of the awards in the form of Common Stock was contingent on stockholder approval of the Plan Amendment at the Company’s 2025 annual meeting of stockholders, otherwise such awards will settle in cash upon vesting. As noted above, the Plan Amendment was approved by the Company’s stockholders on May 22, 2025. Each PSU represents the right to receiveone share of Common Stock. PSUs vest and become unrestricted on June 30, 2028. The number of PSUs that vest is determined based upon the achievement of specified share prices over the period between the grant date and June 30, 2028 (the “Performance Period”). The executives will each earn a corresponding number of PSUs upon the achievement of specified share price thresholds, the first of which is $20.00 per share and the highest of which is $30.00 per share. If all Performance Goals (as defined in the applicable award agreements) are met during the Performance Period, Mr. Archer will be entitled to receive a maximum of 2,000,000 PSUs and Mr. Vlacich will be entitled to receive a maximum of 600,000 PSUs. Vesting is contingent upon the applicable executive’s continued employment through the vesting date, unless the applicable executive’s employment is terminated by reason of death or Disability, without Cause, for Good Reason, or in the event of a Qualifying Termination in connection with a Change in Control (each term as defined in the Plan, or each executive’s employment agreement, as amended, with the Company). These PSUs were valued using a Monte Carlo simulation with

the following assumptions on the grant date: the expected volatility was approximately 38.39%, the term was 3.34 years, the dividend rate was 0.0% and the risk-free interest rate was approximately 4.02%, which resulted in a calculated fair value of approximately $0.34 per PSU as of the grant date. Under the authoritative guidance for stock-based compensation, a portion of these PSUs outstanding prior to May 22, 2025, the date stockholders approved the Plan Amendment, were considered liability-based awards due to an insufficient number of shares available under the plan to service these awards upon vesting. The number of awards that were considered liability-based awards through May 22, 2025, the date stockholders approved the Plan Amendment, amounted to 2,494,120. As of May 22, 2025, these PSUs were valued using a Monte Carlo simulation with the following assumptions: the expected volatility was approximately 38.83%, the term was 3.11 years, the dividend rate was 0.0% and the risk-free interest rate was approximately 3.96%, which resulted in a calculated fair value of approximately $0.72 per PSU as of May 22, 2025. As noted above, all such liability-based PSUs were reclassified, as of the Plan Amendment date of May 22, 2025, to additional paid-in-capital, a component of total stockholders’ equity, and are no longer included in liabilities as of December 31, 2025.

The following table represents changes in PSUs for the years indicated below:

Stock-based compensation expense for these PSUs recognized in selling, general and administrative expense in the consolidated statement of comprehensive income (loss) for the years ended December 31, 2025, 2024, and 2023, was approximately $3.2 million, $2.5 million, and $2.6 million, respectively, with associated tax benefits of approximately $0.8 million, $0.7 million, and $0.8 million, respectively. At December 31, 2025, unrecognized compensation expense related to PSUs totaled approximately $4.6 million and is expected to be recognized over a remaining term of approximately 2.03 years.

Stock Option Awards

Beginning on May 21, 2019, the Compensation Committee began granting time-based stock option awards to the Company’s executive officers and certain other employees. The last date such stock option awards were granted was March 4, 2020. Each option represents the right upon vesting, to buyone share of the Company’s common stock, par value $0.0001 per share, for $4.51 to $10.83 per share. The stock options vest infour equal installments on each of the first four anniversaries of the grant date and expireten years from the grant date.

The following table represents changes in stock options for the years indicated below:

345,227 shares were exercisable at December 31, 2025 with a weighted average exercise price per share of $7.52 and an intrinsic value of $0.6 million. The total fair value of stock option awards vested during the years ended December 31, 2025, 2024 and 2023 was$0,$0.4 million, and$0.8 million, respectively.

Stock-based compensation expense for these stock option awards recognized in selling, general and administrative expense in the consolidated statement of comprehensive income (loss) for the years ended December 31, 2025, 2024, and 2023, respectively, was approximately $0, $0.1 million, and $0.5 million with associated tax benefits of $0, less than $0.1 million, and approximately $0.1 million. As of December 31, 2025, there wasno unrecognized compensation expense related to stock options.

The fair value of each option award at the grant date was estimated using the Black-Scholes option-pricing model with the following assumptions:

The volatility assumption used in the Black-Scholes option-pricing model is based on peer group volatility as the Company did not have a sufficient trading history as a stand-alone public company to calculate volatility at the grant date. Additionally, due to an insufficient history with respect to stock option activity and post vesting cancellations, the expected term assumption was based on the simplified method permitted under SEC rules, whereby, the simple average of the vesting period for each tranche of award and its contractual term is aggregated to arrive at a weighted average expected term for the award. The risk-free interest rate used in the Black-Scholes model is based on the implied US Treasury bill yield curve at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a dividend on its shares of common stock.

Stock-based payments are subject to service based vesting requirements and expense is recognized on a straight-line basis over the vesting period. Forfeitures are accounted for as they occur.

Stock Appreciation Right Awards

In 2021, the Compensation Committee granted 1,578,537 SARs to certain of the Company’s executive officers and other employees. Each SAR represented a contingent right to receive, upon vesting, payment in an amount equal to the difference between (a) the fair market value of a Common Share on the date of exercise, over (b) the grant date price.

As approved by the Compensation Committee, all exercised SARs shown in the table below were paid in cash in the amount of $6.2 million and $10.0 million during the years ended December 31, 2024 and 2023, respectively. As of December 31, 2025 and 2024, respectively, no SARs remained outstanding as all remaining SARs were exercised during the year ended December 31, 2024.

The following table represents changes in SARs for the years indicated below:

Under the authoritative guidance for stock-based compensation, these SARs were considered liability-based awards, which were measured at fair value using the Black-Scholes option pricing model until settlement.

Increases and decreases in stock-based compensation expense were recognized over the vesting period, or immediately for vested awards. For the years ended December 31, 2025, 2024 and 2023, the Company recognized compensation expense related to these awards in selling, general and administrative expense in the accompanying consolidated statements of comprehensive income (loss) of approximately $0, $0.9 million, and $2.9 million, respectively. As of December 31, 2025 and 2024, there wasno liability or unrecognized compensation expense related to SARs.

17. Retirement Plans

We offer a defined contribution 401(k) retirement plan to substantially all of our U.S. employees. Participants may contribute from 1% to 90% of eligible compensation, inclusive of pretax and/or Roth deferrals (subject to Internal Revenue Service limitations), and we make matching contributions under this plan on the first 5% of the participant’s compensation (100% match of the first 3% employee contribution and 50% match on the next 2% contribution). Our matching contributions fully vest upon participation. We recognized expense of $1.1 million, $1.0 million and $1.1 million related to matching contributions under our various defined contribution plans during the years ended December 31, 2025, 2024 and 2023, respectively.

18. Business Segments

The Company hasthree reportable operating segments as defined below. The aggregate external revenues of these reportable segments exceeded 75% of the Company’s consolidated revenues for all periods presented. The remaining operating segments were combined in the “All Other” category.

The Company is organized primarily on the basis of geographic region and customer industry group and operates inthree reportable segments. These reportable segments are also operating segments. Resources are allocated, and performance is assessed by our CEO, whom we have determined to be our Chief Operating Decision Maker (CODM).

Our remaining operating segments have been consolidated and included in an “All Other” category.

The following is a brief description of our reportable segments and a description of business activities conducted by All Other.

HFS – South — Segment operations consist primarily of specialty rental and vertically integrated hospitality services revenue from customers in the natural resources and development industry located primarily in Texas and New Mexico.

WHS — Segment operations consist primarily of revenue from the construction phase of the contract with Lithium Nevada, LLC (“Lithium Nevada”), supporting a North American critical mineral supply chain, as well as specialty rental and vertically integrated hospitality services revenue from customers in support of the development of a regional data center campus located in Southwestern United States.

Government — Segment operations consist primarily of specialty rental and vertically integrated hospitality services revenue from customers with Government contracts located in Texas.

**All Other —**Segment operations consist primarily of revenue from specialty rental and vertically integrated hospitality services revenue from customers primarily in the natural resources and development industry located outside of the HFS – South segment.

The accounting policies of the segments are the same as those described in the “Summary of Significant Accounting Policies” for the Company in Note 1. The Company evaluates performance of their segments and allocates resources to them based on revenue and adjusted gross profit. Adjusted gross profit and Adjusted cost of sales for the CODM’s analysis includes the services and construction costs and specialty rental costs in the financial statements and excludes depreciation, loss on impairment, and certain severance costs.

The table below presents information about reported segments for the years ended December 31:

(a)Revenues from operating segments below the quantitative thresholds are reported in the “All Other” category previously described.

(b)The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. There areno intersegment expenses. Note that community operating costs consist primarily of catering food purchases, lodge supplies, apparel and uniform expenses, linen expenses, operating lease expense for land, facilities, and equipment to service certain communities, property taxes, and utility costs. Other costs includes transportation and travel expenses, including the cost of relocating community assets.

(c)The primary difference between capital expenditures allocated to segments included in the tables above and total capital expenditures for the Company is the amount of expenditures incurred for corporate unallocated amounts, which is not included in the segment information. Such unallocated corporate expenditure amounts for the years ended December 31, 2025, 2024, and 2023, were approximately $0.5 million, $0.8 million, and $1.0 million, respectively.

A reconciliation of total segment adjusted gross profit to total consolidated income before income taxes for years ended as of the dates indicated below, is as follows:

A reconciliation of total segment assets to total consolidated assets as of the dates indicated below is as follows:

(d)Other assets in the table above includes unallocated corporate assets of approximately $1.3 million and $1.8 million as of December 31, 2025 and 2024, respectively.

Other unallocated assets are not included in the measure of segment assets provided to or reviewed by the CODM for assessing performance and allocating resources, and as such, are not allocated. Other unallocated assets consist of the following as reported in the consolidated balance sheets of the Company as of the dates indicated below:

There were no single customers from the HFS – South segment for the years ended December 31, 2025, 2024 and 2023 that represented 10% or more of the Company’s consolidated revenues.

Revenues fromone customer of the Company’s WHS segment represented approximately $89.2 million of the Company’s consolidated revenues for the year ended December 31, 2025. Revenues fromone customer within the WHS segment represented approximately 28% of the Company’s consolidated revenues for the year ended December 31, 2025.

For 2025, 2024, and 2023, revenues from the Company’s Government segment were fromtwo customers and represented approximately $70.8 million, $224.7 million, and $403.7 million of the Company’s consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively. Revenues fromone customer within the Government segment represented approximately 11%,48%, and 62% of the Company’s consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively. Revenues from another customer within the Government segment represented approximately 11%,9.9%, and 9.9% of the Company’s consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, the Government segment was comprised of a single customer following the termination of the PCC Contract effective February 21, 2025 as discussed in Note 2. Additionally, the community of assets associated with the prior STFRC Contract within the Government segment were

reactivated on March 5, 2025 under the new DIPC Contract and the operating results and related assets associated with the new DIPC Contract will continue to be reported within the Government segment.

There wereno revenues generated from transactions between reportable operating segments for the years ended December 31, 2025, 2024, and 2023, respectively.

19. Subsequent Events

In January 2026, and March 2026, respectively, the Compensation Committee of the Board of Directors approved amendments to the Executive Performance Stock Unit Agreement (the “Amended PSU Agreement”) between the Company and certain employees, including certain of the Company’s current named executive officers, pursuant to which the 2023 PSUs described in Note 16 were amended. The purpose of the Amended PSU Agreement is to preserve the original pay-for-performance intent of the 2023 PSUs and to maintain alignment with stockholder interests by taking into account the disruption caused by the Arrow Proposal in 2024, which constrained management’s ability to execute against key metrics in the 2023 PSUs.

The Amended PSU Agreement extends the performance period end date for the TSR criteria from December 31, 2025 to December 31, 2026 and also extends the performance period end date for the Diversification EBITDA criteria from February 28, 2026 to February 28, 2027. The Amended PSU Agreement constitutes a reissuance of 2023 PSUs granted under the PSU Agreement pursuant to the Amended PSU Agreement. The Amended PSU Agreement otherwise has material terms that are substantially similar to those in the PSU Agreement for the 2023 PSUs approved by the Compensation Committee and previously disclosed by the Company and filed as Exhibit 10.2 to its Current Report on Form 8-K filed with the SEC on March 6, 2023.

In February 2026, the Company used cash on hand to purchase a group of specialty rental assets for $8.6 million, to support growth in the WHS segment related to the expansion of the Expanded Community Contract discussed in Note 2.

In 2026, the remaining $8.3 million of payments associated with the equipment purchase commitment described in Note 11 had been paid.

In March 2026, the Company entered into a new multi-year lease and services agreement with a total expected minimum contract value of approximately $129 million to provide workforce accommodations and associated hospitality services, supporting a multi-gigawatt power-generation project for hyperscale AI-driven data-center development (“West Texas Power Community”). The West Texas Power Community is designed to support approximately 1,400 individuals and is governed by a 47-month initial term beginning in March 2026, requiring only $2 million to $5 million of incremental capital investment due to the use of existing infrastructure. The Company expects all operating results associated with this contract to be reported within the WHS segment. As this contract was not in place as of December 31, 2025, it is not reflected in the accompanying consolidated financial statements.

In March 2026, the Company entered into a new multi‑year lease and services agreement to provide workforce accommodations and associated hospitality services in Pecos, Texas, supporting the development of a natural gas power plant. The agreement establishes a 26‑month initial term beginning in April 2026 and includes a committed minimum of 400 rooms per night. The agreement is expected to generate a total minimum contract value of approximately $23 million over the initial term, excluding any variable services or overages. The community will require an estimated incremental capital investment of approximately $2 million to $3 million, as the accommodations are available within the Company’s existing infrastructure. The Company expects all operating results associated with this contract to be reported within the WHS segment. As this contract was not in place as of December 31, 2025, it is not reflected in the accompanying consolidated financial statements.