Smart Sand, Inc.

(IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 1 —Organization and Nature of Business

The Company was incorporated in July 2011 and is headquartered in Yardley, Pennsylvania. The Company operates as a fully integrated frac and industrial sand supply and services company. The Company offers complete mine to wellsite proppant supply and logistics solutions to our frac sand customers. These operations include the excavation, processing and sale of sand as a proppant for hydraulic fracturing operations as well as proppant logistics and wellsite storage solutions through the Company’s SmartSystems TMproducts and services. The Company also offers sand to customers for industrial uses through its Industrial Products Solutions (“IPS”) business. These industrial uses include glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation.

Sand Mines and Processing Facilities

The Company’s integrated Oakdale, Wisconsin facility, with on-site rail infrastructure and sand processing facilities, has access to two Class I rail lines: the Canadian Pacific Railway through the Company’s onsite rail terminal and the Union Pacific Railway through the Company’s nearby Byron, Wisconsin facility. The Company commenced operations at its Oakdale mine and processing facility in July 2012, and subsequently expanded its operations in 2014, 2015 and 2018. The annual processing capacity at the Oakdale facility is approximately 5.5 million tons.

In September 2020, the Company acquiredtwo frac sand mines and related processing facilities in Ottawa, Illinois and New Auburn, Wisconsin. The Ottawa facility has an annual processing capacity of approximately 1.6 million tons and access to the Burlington Northern Santa Fe (“BNSF”) Class I rail line through the Company’s Peru, Illinois transload facility. The Company began operating the Ottawa mine and processing facility and Peru transload facility in October 2020. The Company has no plans to operate the New Auburn facility for the foreseeable future.

In March 2022, the Company acquired its Blair, Wisconsin frac sand mine and related processing facility. The Blair facility has an annual processing capacity of approximately 2.9 million tons and contains an onsite, unit train capable rail terminal with access to the Class I Canadian National Railway. The Company began operating the Blair mine and processing facility in May 2023.

Transload & Logistics Solutions

In March 2018, the Company acquired the rights to operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin and began operations there in April 2018.

In September 2020, the Company acquired the rights to use a rail terminal located in El Reno, Oklahoma.

In September 2021, the Company acquired the rights to construct and operate a transloading terminal in Waynesburg, Pennsylvania to service the Appalachian Basin, including the Marcellus and Utica Formations. The Company began providing sand to customers through this terminal in January 2022 and expanded the facility’s capacity in late 2023.

In December 2023 and January 2024, the Company acquired the rights to use transloading terminals in Minerva, Ohio and Dennison, Ohio, respectively, and commenced operations at these sites servicing the Appalachian Basin in 2024. In September 2025, the Company completed the expansion of the Dennison terminal.

In July 2026, the Company acquired the rights to operate a transloading terminal in Williamsport, Pennsylvania. The Company expects to begin operations at this terminal in 2027.

In August 2026, the Company acquired the rights to a site in Fort St. John, British Columbia for potential future terminal development.

In June 2018, the Company acquired a manufacturer of portable vertical proppant storage solution systems which formed the basis for the Company’s SmartSystems business. Through its SmartSystems business, the Company offers various proppant storage solutions that create efficiencies, flexibility, enhanced safety and reliability for customers by providing the capability to unload, store and deliver proppant at the wellsite, as well as the ability to rapidly set up, takedown and transport the entire system.

NOTE 2 —Summary of Significant Accounting Policies

The information presented below supplements the complete description of our significant accounting policies disclosed in our 2025 Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on February 26, 2026.

Basis of Presentation and Consolidation

The accompanying unaudited quarterly condensed consolidated financial statements (“interim statements”) of the Company are presented in accordance with the rules and regulations of the SEC for quarterly reports on Form 10-Q and therefore do not include all the information and notes required by GAAP. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. All adjustments are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. The consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2025. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2025.

Reclassifications

Certain selling, general and administrative expenses related to the SmartSystems segment have been reclassified as cost of goods sold in the prior year financial statement presentation to conform to the current financial statement presentation. These reclassifications have no effect on previously reported net income.

Use of Estimates

The preparation of interim statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these financial statements include, but are not limited to: impairment considerations of assets, including intangible assets, fixed assets, and inventory; estimated cost of future asset retirement obligations; fair value of acquired assets and assumed liabilities; recoverability of deferred tax assets; inventory reserve; the collectability of receivables; and certain liabilities. Actual results could differ from management’s best estimates as additional information or actual results become available in the future, and those differences could be material.

Events such as the ongoing conflicts in Ukraine and the Middle East, rapidly changing trade policies between the United States and other countries, and periodic output changes by the Organization of the Petroleum Exporting Countries may affect oil and natural gas prices and create volatility in the oilfield service sector, along with potentially impacting the drilling and completion of new oil and natural gas wells. Recent U.S. actions in Iran and Venezuela have added uncertainty to global crude supply, pricing and market dynamics, which may indirectly affect demand for frac sand and related services. Anticipated increasing demand for natural gas in North America to support increased liquefied natural gas (“LNG”) export capacity and power generation needs for new data center development may impact the demand for frac sand. Since demand for frac sand is tied to new well completion activity, which is impacted by current oil and natural gas demand, the Company cannot predict if frac sand prices will increase, decrease or stabilize.

The uncertainty of tariffs could also have an impact on frac sand demand. The Company’s sales into Canada and Mexico are currently exempt from tariffs. Although the Company’s sales into Canada were subject to tariffs in the beginning of 2025, a Surtax Remission Order eliminated such tariffs on the Company’s sand. For the nine months ended September 30, 2026, approximately 17% of sales went to Canada and Mexico. Should the tariff rates change, the Company anticipates that its customers would be responsible for the increased cost, which may result in customers sourcing their sand needs from other suppliers within their own countries. The Company is currently unable to estimate the effect of current or future events on its future financial position and results of operations. Therefore, the Company can give no assurances that these events will not have a material adverse effect on its financial position or results of operations.

Performance Obligations

The Company recorded $9,838 of deferred revenue on the consolidated balance sheet as of December 31, 2025, all of which has been recognized in the nine months ended September 30, 2026. As of September 30, 2026, the Company had

$141,475 in unsatisfied performance obligations related to contracts with customers. The Company expects to perform these obligations and recognize revenue of $61,088 and $80,387 in the remainder of 2026 and 2027, respectively.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, which updates various disclosures including enhancing the disclosure of certain costs and expenses in the notes to the financial statements. The Update is effective for the Company for its annual financial statements for 2027 and interim periods thereafter. Early adoption is permitted. While the Company is still in the process of evaluating the effects of ASU 2024-03, at the time of adoption, it believes the primary effect will be disaggregation of the cost of goods sold and selling, general and administrative line items on the face of the financial statements or within the notes to the financial statements.

NOTE 3 —Inventory

Inventory consisted of the following:

NOTE 4 —Property, Plant and Equipment, net

Net property, plant and equipment consisted of:

Depreciation expense was $7,369 and $6,971 for the three months ended September 30, 2026 and 2025, respectively, and $22,000 and $20,995 for the nine months ended September 30, 2026 and 2025, respectively.

NOTE 5 —Accrued and Other Expenses

Accrued and other expenses were comprised of the following:

NOTE 6 —Debt

The current portion of long-term debt consists of the following:

Long-term debt, net of current portion consists of the following:

The following summarizes the maturity of our debt:

FCB ABL Credit Facility

On September 3, 2024, the Company entered into the FCB ABL Credit Facility. The FCB ABL Credit Facility provides for non-amortizing revolving loans subject to a borrowing base comprised of eligible inventory and accounts receivable. Additionally, obligations under the FCB ABL Credit Facility are guaranteed by certain of the Company’s wholly-owned domestic subsidiaries and secured by a first-priority security interest in certain non-real estate assets. Borrowings under the FCB ABL Credit Facility bear interest at a rate equal to the secured overnight financing rate (“SOFR”) plus a margin of 2.75%.

On September 1, 2026, the Company entered into Amendment No. 2 (the “Amendment”) to the FCB ABL Credit Facility, which increased the aggregate revolving commitments under the facility from $30,000 to $50,000 and extended the maturity date to September 1, 2031. The Amendment also modified the borrowing base to include a $20,000 sublimit supported by the value of the Company’s Oakdale, Wisconsin facility and requires the Company to maintain a minimum excess liquidity threshold whenever the Oakdale facility portion of the borrowing base is utilized. In connection with the Amendment, the Company agreed, among other things, to a negative pledge of the Oakdale real property.

The FCB ABL Credit Facility contains a number of covenants that, among other things, restrict the Company’s ability to incur liens or other indebtedness, make certain restricted payments, merge or consolidate and dispose of assets. In addition, the FCB ABL Credit Facility requires the Company in certain limited circumstances to maintain a minimum fixed charge coverage ratio of 1.0. The FCB ABL Credit Facility also contains certain affirmative covenants and events of default customary for facilities of this type. The Company was compliant with all requirements of this facility.

The available borrowing amount under the FCB ABL Credit Facility as of September 30, 2026 was $50,000 and is based on the Company’s eligible accounts receivable, inventory and Oakdale facility assets. The Company hadno borrowings outstanding and $50,000 available to be drawn under this facility as of September 30, 2026. There wasno interest paid on borrowings under this facility for the nine months ended September 30, 2026.

VFI Equipment Financing

On June 26, 2024, the Company entered into the VFI Equipment Financing with a principal amount of $10,000. The VFI Equipment Financing is legally comprised of a Master Lease Agreement and one lease schedule. The VFI Equipment Financing is considered a lease under article 2A of the Uniform Commercial Code but is considered a financing arrangement for accounting and financial reporting purposes, and not a lease. The collateral under the VFI Equipment Financing includes the majority of the Company’s SmartSystems equipment. The VFI Equipment Financing bears interest at a fixed rate of 11.56%.

The Company used the net proceeds to refinance a prior fixed rate facility, and the remainder was added to working capital. The VFI Equipment Financing matures on September 30, 2028. The Company will reacquire the underlying equipment on the lease schedule upon maturity for one dollar.

Notes Payable

The Company has entered into various financing arrangements, primarily to finance heavy equipment. As of September 30, 2026, these notes payable bear interest at rates between 0.00% and 8.49%. The effect of imputing interest on debt with below-market interest rates is immaterial and, therefore, has not been recorded.

NOTE 7 —Leases

Lessee

The operating and financing components of the Company’s right-of-use assets and lease liabilities on the consolidated balance sheets were as follows:

Operating lease costs are recorded as a single expense on the condensed consolidated statements of operations and allocated to the right-of-use assets and the related lease liabilities as depreciation expense and interest expense, respectively. Lease cost recognized in the condensed consolidated statements of operations for the three and nine months ended September 30, 2026 and 2025 was as follows:

Other information related to the Company’s leasing activity for the nine months ended September 30, 2026 and 2025 is as follows:

Maturities of the Company’s lease liabilities as of September 30, 2026 are as follows:

NOTE 8 —Asset Retirement Obligations

The Company had a post-closure reclamation and site restoration obligation of $23,337 as of September 30, 2026. The following is a reconciliation of the total reclamation liability for asset retirement obligations.

NOTE 9 —Segment Reporting

The Company hastwo reportable segments, Sand and SmartSystems, as of September 30, 2026. The Company evaluates its segment reporting on an ongoing basis. The Company does not currently provide asset information by reportable segment as it does not routinely evaluate the total asset position by segment. The chief operating decision maker (“CODM”) is Charles

Young, the Company’s chief executive officer. The CODM regularly reviews the Company’s GAAP financial statements, as well as the non-GAAP reporting measures when considering the profit and loss of the Company and uses this information in deciding how to allocate resources.

The Sand segment includes both frac sand sales and IPS sales. The sand production process begins the same way for each of these revenue streams. Frac sand primarily consists of four sizes of sand, called grades. IPS begins with these same frac sand grades and may contain additional sizes or custom blends of a variety of grades.

The SmartSystems segment revenue is primarily from the rental of our patented SmartSystems equipment and related services provided to customers. This segment offers customers portable wellsite storage and management solutions that enable customers to unload, store, and deliver proppant at the wellsite.

During the three months ended September 30, 2026, five of the Company’s customers each accounted for more than 10% of the Company’s revenues. Of these five customers, four had revenues in the Sand segment andone had revenues in both the Sand and SmartSystems segment. The following tables present additional segment information for the three months ended September 30, 2026 and a reconciliation to amounts on the condensed consolidated statements of operations.

During the nine months ended September 30, 2026, four of the Company’s customers each accounted for more than 10% of the Company’s revenues. Of these four customers, three had revenues in the Sand segment andone had revenues in both the Sand and SmartSystems segment. The following tables present additional segment information for the nine months ended September 30, 2026 and a reconciliation to amounts on the condensed consolidated statements of operations.

During the three months ended September 30, 2025, two of the Company’s customers each accounted for more than 10% of the Company’s revenues. Both of these customers had revenues in the Sand segment. Sand segment revenue during the three months ended September 30, 2025 includes $4.4 million related to contractual charges for tons sold in excess of certain contractual thresholds in a prior period that were not recognizable under ASC 606 until that period. The following tables present additional segment information for the three months ended September 30, 2025 and a reconciliation to amounts on the condensed consolidated statements of operations.

During the nine months ended September 30, 2025, two of the Company’s customers each accounted for more than 10% of the Company’s revenues. Both of these customers had revenues in the Sand segment. Sand segment revenue during the nine months ended September 30, 2025 includes $4.4 million related to contractual charges for tons sold in excess of certain contractual thresholds in a prior period that were not recognizable under ASC 606 until that period. The following tables present additional segment information for the nine months ended September 30, 2025 and a reconciliation to amounts on the condensed consolidated statements of operations.

The following table presents revenue by geographic location, based on the country in which delivery to the customer occurred for the three and nine months ended September 30, 2026 and 2025:

NOTE 10 —Earnings Per Share

Basic net income per share of common stock is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the dilutive effects of restricted stock. Diluted net income (loss) per share of common stock is computed by dividing the net income attributable to common stockholders by the sum of the weighted-average number of shares of common stock outstanding during the period plus the potential dilutive effects of shares of restricted stock outstanding during the period calculated in accordance with the treasury stock method, although shares of restricted stock are excluded if their effect is anti-dilutive. The number of shares underlying equity-based awards that were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive were 176 and 2,492 for the three months ended September 30, 2026 and 2025, respectively. The number of shares underlying equity-based awards that were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive were 176 and 2,473 for the nine months ended September 30, 2026 and 2025, respectively. In periods with a net loss, there is no difference between basic and diluted net loss per share of common stock. The following table reconciles the weighted-average common shares outstanding used in the calculation of basic net income per share to the weighted average common shares outstanding used in the calculation of diluted net income per share.

NOTE 11 —Income Taxes

The Company calculates its interim income tax provision by estimating the annual expected effective tax rate and applying that rate to its ordinary year-to-date earnings or loss. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs. For the three months ended September 30, 2026 and 2025, the effective tax rate was approximately 6.3% and 40.9%, respectively. For the nine months ended September 30, 2026 and 2025, the effective tax rate was approximately (3.9)% and 106.6%, respectively. The computation of the effective tax rate includes modifications from the statutory rate such as income tax credits, tax depletion deduction, valuation allowance and state taxes, among other items. For the three and nine months ended September 30, 2026 and 2025, the statutory tax rate was 21.0%.

The Company has recorded a liability for uncertain tax positions included in its consolidated balance sheet of $630 as of December 31, 2025. There was no material change for the nine months ended September 30, 2026.

The Company believes it will not be able to use all of its tax benefits from some of its tax deductions. Because of this, it has recorded a partial valuation allowance against those benefits, which is included in the long-term deferred tax liabilities, net on its consolidated balance sheets. At September 30, 2026 and December 31, 2025, the Company recorded a partial valuation allowance against the gross deferred tax assets on its consolidated balance sheet in the amount of $2,958 and $1,866, respectively.

The Company’s federal income tax returns subsequent to 2021 remain open to audit by taxing authorities. The Company has not been informed that its tax returns are the subject of any audit or investigation by taxing authorities.

NOTE 12— Stock-Based Compensation

Equity Incentive Plan and Employee Stock Purchase Plan

On June 2, 2026, the Company’s stockholders approved the Smart Sand, Inc. 2026 Equity Incentive Plan (the “2026 Plan”), which replaced the Company’s Amended and Restated 2016 Omnibus Incentive Plan (the “2016 Plan”). The 2026 Plan permits grants of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards and other stock-based awards to employees, non-employee directors and consultants. Subject to adjustment pursuant to the terms of the 2026 Plan, the maximum number of shares of the Company’s common stock available for issuance under the 2026

Plan is 2.4 million shares, plus certain shares that remain available under, or subsequently become available from, the 2016 Plan in accordance with the terms of the 2026 Plan.

On June 2, 2026, the Company’s stockholders approved the Smart Sand, Inc. 2026 Employee Stock Purchase Plan (the “2026 ESPP”), which replaced the Company’s 2016 Employee Stock Purchase Plan. Subject to adjustment pursuant to the terms of the 2026 ESPP,3.0 million shares of the Company’s common stock have been reserved for issuance under the 2026 ESPP. The purchase price of shares under the 2026 ESPP is 85% of the lower of the fair market value of the Company’s common stock on the first day or last day of eachsix-month offering period. Employee purchases may not exceed 20% of their gross compensation during an offering period.

Other than the adoption of the 2026 Plan and the 2026 ESPP described above, stock-based compensation expense and related award activity, including grants and vesting activity, were not materially different from the amounts disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

NOTE 13 —Concentrations

As of September 30, 2026, four customers accounted for 65% of the Company’s total accounts and unbilled receivables. As of December 31, 2025, four customers accounted for 57% of the Company’s total accounts receivable.

During the three months ended September 30, 2026,85% of the Company’s revenues were earned from five customers. During the three months ended September 30, 2025,58% of the Company’s revenues were earned from three customers. During the nine months ended September 30, 2026,72% of the Company’s revenues were earned from four customers. During the nine months ended September 30, 2025,40% of the Company’s revenues were earned from two customers.

As of September 30, 2026, two vendors accounted for 23% of the Company’s accounts payable. As of December 31, 2025, two vendors accounted for 24% of the Company’s accounts payable.

During the three months ended September 30, 2026, three vendors accounted for 51% of the Company’s cost of goods sold. During the three months ended September 30, 2025, two vendors accounted for 27% of the Company’s cost of goods sold. During the nine months ended September 30, 2026, three vendors accounted for 49% of the Company’s cost of goods sold. During the nine months ended September 30, 2025, two vendors accounted for 31% of the Company’s cost of goods sold.

The Company’s primary product is Northern White sand, and its mining operations are limited to Wisconsin and Illinois. There is a risk of loss if there are significant environmental, legal or economic changes to the geographic areas of the Company’s mines, the oil and natural gas producing basins they serve, or the transportation routes between them.

NOTE 14 —Commitments and Contingencies

Litigation

The Company may be subject to various legal proceedings, claims and governmental inspections, audits or investigations arising out of our operations in the normal course of business, which cover matters such as general commercial, governmental and trade regulations, product liability, environmental, intellectual property, employment and other actions. Although the outcomes of these routine claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on our financial statements.

Bonds

The Company has performance bonds with various public and private entities regarding reclamation, permitting and maintenance of public roadways. Total aggregate principal amount of performance bonds outstanding as of September 30, 2026 was $19,959.

NOTE 15 —Subsequent Events

Dividend Declaration

On November 5, 2026, the Company’s Board of Directors declared a special dividend of $0.05 per share of common stock, which will be paid on November 30, 2026 to stockholders of record at the close of business on November 18, 2026. The dividend payment will return approximately $2,176 to the Company’s stockholders.