SEDAR Interim Financial Statements

Q3 2025 Interim Condensed Consolidated Financial Statements AS AT AND FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 UNAUDITED TSX - SHLE September 30, December 31, As at September 30, Note 2025 2024 Assets Current assets Cash $ 30,395 $ 32,717 Accounts receivable 22(d) 51,798 79,505 Prepaid expenses 5,993 9,624 Inventories 6 92,811 89,427 Lease receivable 7 1,542 1,320 Total current assets 182,539 212,593 Deferred income tax assets 15,677 21,825 Deposits and restricted cash 11(g) 3,370 3,729 Deferred finance costs 11(b) 354 566 Property, plant and equipment 8 296,689 280,670 Right-of-use assets 9 97,616 76,027 Lease receivable 7 1,649 2,808 Total assets $ 597,894 $ 598,218 Liabilities and equity Current liabilities Accounts payable and accruals 22(e),16 $ 76,870 $ 94,847 Contract liabilities 18 2,642 11,832 Lease liabilities 12 26,889 19,386 Current portion of long-term debt 11 14,727 8,093 Current income tax liabilities 5,771 5,251 Decommissioning provision 13 1,514 1,564 Total current liabilities 128,413 140,973 Lease liabilities 12 77,370 60,518 Long-term debt 11 166,292 186,874 Contract liabilities 18 1,608 1,636 Deferred income tax liabilities 4,745 9,123 Decommissioning provision 13 9,121 9,227 Total liabilities $ 387,549 $ 408,351 Shareholders' equity Shareholders' equity 15 $ 405,633 $ 410,632 Contributed surplus 2,459 2,459 Accumulated deficit (213,991) (244,941) Accumulated other comprehensive income 16,244 21,717 Total shareholders' equity $ 210,345 $ 189,867 Total liabilities and shareholders' equity $ 597,894 $ 598,218 See accompanying notes to these interim condensed consolidated financial statements. Commitments and contingencies (Note 14) SOURCE ENERGY SERVICES LTD. Interim Condensed Consolidated Statements of Financial Position - Unaudited (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 1 For the three months ended September 30, For the nine months ended September 30, Note 2025 2024 2025 2024 Sales Sand revenue 18 $ 100,265 $ 142,236 $ 424,640 $ 415,286 Well site solutions 18 23,941 39,908 107,585 110,988 Terminal services 18 1,113 906 3,547 2,700 Total sales 125,319 183,050 535,772 528,974 Cost of sales 19 $ 95,016 $ 139,768 $ 410,665 $ 400,364 Cost of sales - depreciation 10,676 9,613 31,951 26,662 Gross margin $ 19,627 $ 33,669 $ 93,156 $ 101,948 Operating expense 19 $ 7,149 $ 6,493 $ 23,459 $ 18,862 General & administrative expense 19 3,235 3,518 12,982 14,719 Depreciation 5,484 4,753 16,616 13,252 Income from operations $ 3,759 $ 18,905 $ 40,099 $ 55,115 Other expense (income): Finance expense 20 $ 6,568 $ 8,217 $ 20,609 $ 25,566 Share-based compensation expense (recovery) 16 321 1,016 (3,557) 9,325 Loss (gain) on asset disposal 443 (862) 983 (2,840) Gain on Sahara finance lease 7 — (1,992) — (1,992) Other income (22) (12) (737) (568) Other expense (recovery) 21 187 221 (12,037) 1,279 Loss on sublease 7 — — 13 638 (Gain) loss on debt modification and extinguishment 11 (204) — (694) 164 Unrealized foreign exchange loss (gain) 3,529 — (4,666) — Foreign exchange (gain) loss 22(f) (349) (66) 144 (571) Total other expense 10,473 6,522 58 31,001 (Loss) income before income taxes $ (6,714) $ 12,383 $ 40,041 $ 24,114 Income taxes Current tax expense 10 $ 1,212 $ 812 $ 6,437 $ 4,550 Deferred tax (income) expense 10 (1,709) 1,416 2,654 2,831 Total income taxes (497) 2,228 9,091 7,381 Net (loss) income $ (6,217) $ 10,155 $ 30,950 $ 16,733 Other comprehensive (loss) income Fore --- ign currency translation adjustment (subject to recycling) 2,633 549 (5,473) 1,223 Comprehensive (loss) income $ (3,584) $ 10,704 $ 25,477 $ 17,956 (Loss) earnings per share (in dollars) Basic 17 $ (0.46) $ 0.75 $ 2.31 $ 1.24 Diluted 17 $ (0.46) $ 0.74 $ 2.31 $ 1.24 See accompanying notes to these interim condensed consolidated financial statements. SOURCE ENERGY SERVICES LTD. Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - Unaudited (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 2 Common share capital Contributed Surplus Accumulated Deficit Accumulated other comprehensive income Number of Shares Total Equity Note $ Balance at December 31, 2024 13,545,055 $ 410,632 $ 2,459 $ (244,941) $ 21,717 $ 189,867 Net income 30,950 30,950 Repurchase and cancellation of shares under NCIB 15 (392,900) (4,999) (4,999) Foreign currency translation adjustment (5,473) (5,473) Balance at September 30, 2025 13,152,155 $ 405,633 $ 2,459 $ (213,991) $ 16,244 $ 210,345 Common share capital Contributed Surplus Accumulated Deficit Accumulated other comprehensive income Number of Shares Total Equity $ Balance at December 31, 2023 13,545,055 $ 410,632 $ 2,459 $ (254,450) $ 10,489 $ 169,130 Net income 16,733 16,733 Foreign currency translation adjustment 1,223 1,223 Balance at September 30, 2024 13,545,055 $ 410,632 $ 2,459 $ (237,717) $ 11,712 $ 187,086 See accompanying notes to these interim condensed consolidated financial statements. SOURCE ENERGY SERVICES LTD. Interim Condensed Consolidated Statements of Changes in Equity - Unaudited (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 3 For the three months ended September 30, For the nine months ended September 30, Note 2025 2024 2025 2024 Operating Activities Net (loss) income $ (6,217) $ 10,155 $ 30,950 $ 16,733 Adjusted for the following: Depreciation 16,160 14,366 48,567 39,914 Share-based compensation expense (recovery) 16 321 1,016 (3,557) 9,325 Loss (gain) on asset disposal 443 (862) 983 (2,840) Finance expense 20 6,568 8,217 20,609 25,566 Gain on Sahara finance lease 7 — (1,992) — (1,992) (Gain) loss on debt modification and extinguishment 11 (204) — (694) 164 Income tax (recovery) expense 10 (497) 2,228 9,091 7,381 Loss on sublease 7 — — 13 638 Foreign exchange loss (gain) 3,219 — (5,398) — Satisfaction of performance obligations on contract liabilities 18 (613) — (9,555) — Income taxes paid (1,111) — (5,715) (1,169) Payments for share-based compensation (257) (53) (9,632) (5,218) Payments made for decommissioning provision 13 (575) (307) (1,191) (1,070) Net changes in non-cash working capital 4 17,780 (16,511) 23,077 (26,405) Cash flows provided by operating activities $ 35,017 $ 16,257 $ 97,548 $ 61,027 Investing Activities Capital expenditures (25,667) (9,306) (47,908) (28,244) Asset acquisition 5 — (437) — (1,682) Proceeds on disposal of property, plant and equipment and reimbursement of capital costs 819 3,761 1,548 13,685 Net changes in non-cash working capital 4 (1,302) (738) (942) 719 Cash flows used in investing activities $ (26,150) $ (6,720) $ (47,302) $ (15,522) Financing Activities Proceeds on long-term debt 11 4,863 192,668 12,355 557,661 Repayments on long-term debt 11 (11,723) (189,312) (19,926) (566,730) Repurchase and cancellation of shares under NCIB 15 (2,297) — (4,999) — Payment of lease obligations 12 (6,832) (5,328) (19,427) (15,434) Financing expense paid (6,500) (6,655) (2 --- 0,016) (20,092) Cash flows used in financing activities $ (22,489) $ (8,627) $ (52,013) $ (44,595) (Decrease) increase in cash $ (13,622) $ 910 $ (1,767) $ 910 Effect of foreign exchange differences 172 — (555) — Cash, beginning of period 43,845 — 32,717 — Cash, end of period $ 30,395 $ 910 $ 30,395 $ 910 Supplementary information Interest paid (5,843) (6,349) (17,972) (19,053) See accompanying notes to these interim condensed consolidated financial statements. SOURCE ENERGY SERVICES LTD. Interim Condensed Consolidated Statements of Cash Flows - Unaudited (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 4 1. GENERAL DESCRIPTION OF BUSINESS Source Energy Services Ltd. and its subsidiaries (“Source” or the “Company”) is a company that focuses on the integrated production and distribution of frac sand, as well as the distribution of other bulk completion materials not produced by Source. Source provides its customers with an end-to-end solution for frac sand supported by its Wisconsin, United States (“US”) and Peace River, Alberta mines and processing facilities, its Western Canadian terminal network and its “last mile” logistics capabilities, including its trucking operations, and Sahara, a proprietary well site mobile sand storage and handling system. The Company is incorporated under the Alberta Business Corporations Act and the head and principal office is located at 500, 438 - 11th Avenue SE, Calgary, Alberta, T2G 0Y4. 2. BASIS OF PRESENTATION Statement of compliance These interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting, as at and for the three and nine months ended September 30, 2025, and do not include all the information required for full annual financial statements. As such, they should be read in conjunction with the December 31, 2024 audited annual consolidated financial statements. These financial statements are available on SEDAR+. The policies applied in these interim condensed consolidated financial statements are based on IFRS® Accounting Standards (“IFRS”) issued and outstanding as at September 30, 2025. These interim condensed consolidated financial statements were authorized for issuance by the Board of Directors (the “Board”) on November 6, 2025. Use of estimates and judgments The preparation of these interim condensed consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future years affected. These estimates are further described in the Company’s December 31, 2024 audited annual consolidated financial statements. Comparative figures Certain prior year amounts have been reclassified to conform to current year presentation. Material accounting policy information The accounting policies applied in these interim condensed consolidated financial statements are the same as those applied in the Company’s December 31, 2024 audited annua --- l consolidated financial statements. Future Accounting Policy Changes The accounting standards and amendments effective for fiscal years beginning on or after January 1, 2026 are consistent with those disclosed in the Company’s December 31, 2024 audited annual financial statements. 3. SEASONALITY OF OPERATIONS The Company’s business is seasonal in nature and as a result, Source’s operating results vary on a quarterly basis. Lower activity levels are usually realized in the fourth quarter, as exploration and production (“E&P”) companies evaluate remaining capital spend for the year, and in the second quarter spring break-up may impact activity levels. There are other factors that will impact the Company’s activities from quarter-to-quarter including commodity prices and completion activity levels of E&P companies. SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 5 4. SUPPLEMENTAL CASH FLOW INFORMATION Changes in non-cash operating assets and liabilities for the three and nine months ended September 30, 2025 and 2024 were as follows: As at September 30, Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Accounts receivable $ 33,497 $ 3,036 $ 28,672 $ (24,241) Prepaid expenses 1,730 (1,004) 4,571 850 Inventories (11,527) 7,196 (6,339) 12,270 Contract liabilities — — 337 — Accounts payable and accruals (5,920) (25,739) (4,164) (15,284) Changes in non-cash working capital $ 17,780 $ (16,511) $ 23,077 $ (26,405) Changes in non-cash investing assets and liabilities for the three and nine months ended September 30, 2025 and 2024 were as follows: As at September 30, Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Accounts payable and accruals $ (1,302) $ (738) $ (942) $ 719 Changes in non-cash working capital $ (1,302) $ (738) $ (942) $ 719 5. ACQUISITIONS In March and August, 2024, the Company completed two transactions to purchase sand trucking assets for an aggregate purchase price of $10,237, comprised of $1,682 paid in cash, promissory notes payable (the “Promissory Notes”) and the assumption of certain lease obligations. The purchases were treated as asset acquisitions, including $1,658 of right-of-use assets, with the remainder allocated to property, plant and equipment. 6. INVENTORIES Inventory consists of three main classifications: As at September 30, 2025 December 31, 2024 Unprocessed sand and work in progress $ 56,552 $ 51,720 Sand available for shipment 31,487 33,814 Spare parts and supplies 4,772 3,893 Total inventories $ 92,811 $ 89,427 Spare parts and supplies are for routine facilities and equipment maintenance. Included in the inventory balance is depreciation expense related to sand-producing properties of $11,942 as at September 30, 2025 (December 31, 2024 - $12,413). The total amount of inventory expensed through cost of sales during the three and nine months ended September 30, 2025 was $72,558 and $312,132, respectively (three and nine months ended September 30, 2024 - $104,324 and $302,193, respectively). No inventory write-downs or reversals of prior write-downs were recorded during the three and nine months ended September 30, 2025 (three and nine months ended September 30, 2024 - $nil). SOURCE ENERGY SERVICES LTD. Notes to the Interim Condense --- d Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 6 7. LEASE RECEIVABLE As at September 30, 2025 December 31, 2024 Balance, beginning of period $ 4,128 $ — Additions 275 4,285 Interest income 397 149 Lease payments received (1,479) (448) Exchange differences (130) 142 Balance, end of period $ 3,191 $ 4,128 Less: current portion (1,542) (1,320) Long-term portion $ 1,649 $ 2,808 Previously, the Company entered into arrangements to construct and subsequently lease two Sahara units, with costs to build the units fully reimbursed by customers. During 2024 the leases commenced, upon completion of construction, each payable over three-year terms with an option for each customer to purchase the respective unit at the end of the term. The leases have been classified as finance leases, resulting in the recognition of a lease receivable and derecognition of the constructed assets. On January 1, 2025, the Company entered into a sublease agreement with a third party to lease the Company’s previous head office location. The Company has classified the sublease as a finance lease due to the sublease term being equal to the remaining term of the head lease. As a result, the net book value of the original right-of-use asset was derecognized and a lease receivable was recorded, resulting in a loss of $13 during the nine months ended September 30, 2025. Future minimum lease payments are as follows: 2025 $ 510 2026 1,850 2027 1,328 Total $ 3,688 Less: unearned finance income 497 Lease receivable $ 3,191 8. PROPERTY, PLANT AND EQUIPMENT Land & Building Equipment & Vehicles Other Construction in Progress(5) Mine Preparation Costs Total Cost Balance as at December 31, 2023 $ 210,938 $ 213,764 $ 6,564 $ 25,780 $ 35,728 $ 492,774 Additions(1)(2)(3) 1,604 8,814 62 33,006 10,008 53,494 Disposals (772) (4,129) (5) — — (4,906) Completed construction in progress 10,360 17,616 — (27,976) — — Derecognition(4) — (11,502) — — — (11,502) Transfers 46 2,013 — — — 2,059 Exchange differences 15,046 14,463 303 763 2,904 33,479 Balance as at December 31, 2024 $ 237,222 $ 241,039 $ 6,924 $ 31,573 $ 48,640 $ 565,398 Additions 1,086 205 63 37,203 10,413 48,970 Disposals — (7,221) — (214) — (7,435) Completed construction in progress 9,178 13,487 — (22,665) — — Transfers — 7,727 — — — 7,727 Exchange differences (5,586) (5,151) (128) (182) (1,296) (12,343) Balance as at September 30, 2025 $ 241,900 $ 250,086 $ 6,859 $ 45,715 $ 57,757 $ 602,317 SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 7 Land & Building Equipment & Vehicles Other Construction in Progress(5) Mine Preparation Costs Total Accumulated depreciation Balance as at December 31, 2023 $ (81,708) $ (113,832) $ (6,406) $ — $ (31,116) $ (233,062) Depreciation (8,900) (15,374) (88) — (10,440) (34,802) Disposals 747 3,699 5 — — 4,451 Transfers (1) (1,825) — — — (1,826) Exchange differences (7,004) (9,406) (302) — (2,777) (19,489) Balance as at December 31, 2024 $ (96,866) $ (136,738) $ (6,791) $ — $ (44,333) $ (284,728) Depreciation (8,390) (12,887) (53) — (7,857) (29,187) Disposals — 4,995 — — — 4,995 Transfers — (3,752) — — — (3,752) Exchange differences 2,423 3,286 1 --- 27 — 1,208 7,044 Balance as at September 30, 2025 $ (102,833) $ (145,096) $ (6,717) $ — $ (50,982) $ (305,628) Carrying amounts December 31, 2024 $ 140,356 $ 104,301 $ 133 $ 31,573 $ 4,307 $ 280,670 September 30, 2025 $ 139,067 $ 104,990 $ 142 $ 45,715 $ 6,775 $ 296,689 Notes: (1) In 2024, Source incurred capital costs of $8,594 related to contracts to construct two Sahara units on behalf of and fully reimbursed by customers. (2) The Company incurred costs to replace a piece of equipment in 2024, located at a terminal facility, which malfunctioned in 2023. The costs to replace the equipment were reimbursed through an insurance claim received during 2024. (3) Includes sand trucking assets acquired in 2024. Refer to Note 5 for additional information. (4) During 2024, upon completion of construction for the Sahara units as outlined above, the Company commenced lease arrangements for the units. The leases have been classified as finance leases, resulting in the derecognition of the assets. Refer to Note 7 for additional information. (5) Assets under construction are not amortized until the asset is deemed ready for use, at which time they are allocated to their corresponding capital asset group and will commence depreciating. No indicators of impairment were noted as at September 30, 2025. SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 8 9. RIGHT-OF-USE ASSETS Land & Building Equipment & Vehicles Rail cars Peace River Facility Total Cost Balance as at December 31, 2023 $ 11,831 $ 30,171 $ 52,911 $ 26,865 $ 121,778 Additions and modifications(1) 3,988 19,000 12,176 — 35,164 Expired leases (2,838) (1,555) (11,131) — (15,524) Transfers — (2,059) — — (2,059) Exchange differences 233 2,339 4,810 — 7,382 Balance as at December 31, 2024 $ 13,214 $ 47,896 $ 58,766 $ 26,865 $ 146,741 Additions and modifications(2) 861 28,129 15,888 — 44,878 Expired leases — (1,720) (15,168) — (16,888) Transfers — (7,727) — — (7,727) Exchange differences (131) (1,059) (1,854) — (3,044) Balance as at September 30, 2025 $ 13,944 $ 65,519 $ 57,632 $ 26,865 $ 163,960 Accumulated depreciation Balance as at December 31, 2023 $ (8,007) $ (13,457) $ (41,132) $ (3,062) $ (65,658) Depreciation (2,381) (6,939) (6,591) (1,781) (17,692) Expired leases 2,838 1,547 11,131 — 15,516 Transfers — 1,826 — — 1,826 Exchange differences (122) (1,059) (3,525) — (4,706) Balance as at December 31, 2024 $ (7,672) $ (18,082) $ (40,117) $ (4,843) $ (70,714) Depreciation (2,111) (9,244) (5,369) (1,336) (18,060) Expired leases — 1,720 15,168 — 16,888 Transfers — 3,752 — — 3,752 Exchange differences 61 451 1,278 — 1,790 Balance as at September 30, 2025 $ (9,722) $ (21,403) $ (29,040) $ (6,179) $ (66,344) Carrying amounts December 31, 2024 $ 5,542 $ 29,814 $ 18,649 $ 22,022 $ 76,027 September 30, 2025 $ 4,222 $ 44,116 $ 28,592 $ 20,686 $ 97,616 Notes: (1) Includes sand trucking right-of-use assets acquired during 2024. Refer to Note 5 for additional information. (2) On January 1, 2025, the Company entered into a sublease agreement with a third party to lease the Company’s previous head office location. The sublease has been classified as a finance lease, resulting in the derecognition of the right-of-use asset. Refer to Note 7 for additional information. SOURCE ENERGY SERVICES LTD. Notes to --- the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 9 10. INCOME TAXES The following table reconciles the Company's expected income tax expense relative to the current effective Canadian statutory rate of 23% (2024 - 23%) for the periods indicated: 2025 2024 2025 2024 (Loss) income before income taxes $ (6,714) $ 12,383 $ 40,041 $ 24,114 Statutory income tax rate 23.00 % 23.00 % 23.00 % 23.00 % Expected income taxes (1,544) 2,848 9,209 5,546 Increase (decrease) in taxes from: Non-deductible expenses 20 347 48 686 Share-based compensation — 29 3 372 Unrealized foreign exchange 392 — (433) — Prior period adjustments — (64) (39) (708) Unrecognized deferred income tax assets (2) (285) (5) 2,152 Rate differential on foreign activities (10) 133 288 37 Other 647 (780) 20 (704) Total income taxes $ (497) $ 2,228 $ 9,091 $ 7,381 Current tax expense 1,212 812 6,437 4,550 Deferred tax (recovery) expense (1,709) 1,416 2,654 2,831 Total income taxes $ (497) $ 2,228 $ 9,091 $ 7,381 Three months ended September 30, Nine months ended September 30, At September 30, 2025, the Company had $84,103 (December 31, 2024 - $93,215) of non-capital losses. Canadian losses begin to expire in 2037. 11. LONG-TERM DEBT As at September 30, 2025 December 31, 2024 Term Loan (net of unamortized deferred financing costs) (a) $ 159,146 $ 183,547 Taylor Financing Facility (c) 21,873 10,042 Other long-term debt(1) — 1,378 Total long-term debt $ 181,019 $ 194,967 Less: current portion (14,727) (8,093) Long-term portion $ 166,292 $ 186,874 Note: (1) Includes amounts related to the Company’s share-based compensation plans which were settled during 2025. Refer to Note 16 for additional information. (a) Term Loan As at September 30, 2025 December 31, 2024 Balance, beginning of period $ 183,547 $ — Proceeds — 187,205 Repayments(1) (19,911) — Accretion 1,180 — Unrealized foreign exchange (gain) loss (5,473) 208 Financing costs incurred (287) (3,866) Loss on debt modification 90 — Balance, end of period $ 159,146 $ 183,547 Less: current portion (10,579) (8,093) Long-term portion $ 148,567 $ 175,454 Note: (1) A realized foreign exchange gain of $491 was recognized on repayments of the Term Loan for the nine months ended September 30, 2025 ($312 for the three months ended September 30, 2025). SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 10 On December 20, 2024, the Company completed a refinancing of its senior secured notes and credit facility (the “Refinancing Transaction”). Pursuant to the Refinancing Transaction, Source executed a five-year US$135,000 Term Loan with Silver Point Finance, LLC (the “Term Loan”). The Term Loan has a delayed draw facility of US$25,000 which is undrawn and available through December 31, 2025. The Term Loan bears interest at the Secured Overnight Finance Rate (“SOFR”), plus a margin of 5.25% and an interest rate floor of 4.25%, and matures on December 20, 2029. The Term Loan is secured by a first charge on all assets of the business, excluding assets related to the Taylor Terminal (as defined below), and a second charge on cash, accounts receivable and inventory. The Term Loan --- was recorded at its fair value of US$127,565, net of US$7,435 of issuer discount and transaction fees, which will be amortized over the life of the Term Loan. For the three and nine months ended September 30, 2025, the Term Loan has been subsequently revalued to reflect current cash flows and changes in SOFR, resulting in a gain of $34 and a loss of $90, respectively. The Term Loan has a stated amortization of 5% per annum for amounts drawn on the facility, with 2% due on March 31 and September 30, respectively, and 1% due on June 30. The Term Loan also contains a quarterly mandatory repayment feature, equal to 50% of excess cash flows, payable 45 days after the fiscal quarter. Excess cash flows are defined as cash flows provided by operating activities (which includes an adjustment for cash taxes paid), less maintenance capital expenditures, amounts paid for lease obligations and amounts of interest or principal prepayments on the Term Loan and ABL facility (as defined below) in the applicable fiscal quarter. The Company made excess cash flow repayments totalling US$7,190 for the first two fiscal quarters of 2025, and has a repayment of US$2,580 payable on November 15, 2025, for the three months ended September 30, 2025. The Company may repay all or a portion of amounts outstanding under the Term Loan, plus unpaid and accrued interest, subject to an applicable call premium on amounts repaid (prior to December 20, 2027 - 5%, prior to December 20, 2028 - 3% and thereafter – nil). Financial covenants include a fixed charge coverage ratio of 1.20:1 and a current ratio of 1.25:1, tested each fiscal quarter; and a total leverage ratio not greater than 2.25:1 through March 31, 2026, 2.00:1 through December 31, 2026 and 1.75:1 through the remainder of the term. As at September 30, 2025, Source was in compliance with all covenants. Interest expense for the Term Loan was $3,818 and $13,046, respectively, for the three and nine months ended September 30, 2025. (b) ABL facility As part of the Refinancing Transaction, the Company closed a $40,000 revolving asset-backed credit facility (the “ABL”) with Canadian Imperial Bank of Commerce which matures on December 20, 2027. The ABL is secured by a first lien charge on cash, the accounts receivable and inventory of the Company and a second lien charge on all other assets of the business excluding assets related to the Taylor Terminal, as outlined below. The ABL facility may be drawn in Canadian or US dollars and bears interest based on the bank’s prime lending rate, base rate, Canadian Overnight Repo Rate Average or SOFR, plus an applicable margin, which ranges from 0.0% to 0.25% for prime rate borrowings, depending on the amount of excess availability. The amount available under the facility is subject to a borrowing base formula applied to accounts receivable and inventory. As of September 30, 2025, unamortized deferred financing costs of $693 have been presented as an asset, of which $354 is long-term, as no amounts were drawn on the facility. The ABL includes a springing fixed charge ratio of 1.00:1 to be measured when the Company’s excess availability is less than 10%. (c) Taylor Financing Facility As at September 30, 2025 December 31, 2024 Balance, beginning of period $ 10,042 $ — Proceeds 12,355 9,870 Repayments (506) — Accretion 766 172 Gain on debt modification (784) — Balance, end of period $ 21,873 $ 10,042 Less: current portion (4,148) — Long-term portion $ 17,725 $ 10,042 On July 25, 2024, --- Source entered into a construction financing arrangement (the “Taylor Financing Facility”) with Trican Well Service Ltd. (“Trican”) to construct a new terminal facility located in Taylor, British Columbia (the “Taylor Terminal”). Under the terms of the agreement Trican advances funding for construction under a project financing structure, and receives a fee on each advance drawn which is added to the obligation outstanding. The Taylor Financing Facility is capped at an amount of $23,500 and is repayable through the provision of transload services and optional cash payments over a three-year term, with options to extend for additional one-year periods. SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 11 The Taylor Financing Facility is secured by a first lien charge on all assets of the Taylor transload entity, including a mortgage in favor of Trican. The financial performance of the Taylor Terminal, including amounts drawn on the Taylor Financing Facility, are excluded from the financial covenants as prescribed under the Term Loan and the ABL facility. The difference between the timing of advances received on the Taylor Financing Facility and capital expenditures are presented as cash on these interim condensed consolidated statements of financial position. As at September 30, 2025, $4,648 was included in cash in respect of these timing differences (December 31, 2024 - $3,928). For the three and nine months ended September 30, 2025, Source incurred $6,307 and $13,126 of capital expenditures, respectively, for the Taylor terminal facility. The initial advances under the Taylor Financing Facility were recorded at their fair values and have been subsequently revalued to reflect current estimated future repayments related to transloading volume forecasts and the timing of advances drawn on the facility, which resulted in a gain on debt modification of $170 and $784, respectively, for the three and nine months ended September 30, 2025. For the three and nine months ended September 30, 2025, the Company recorded finance costs of $328 and $766, respectively, calculated using an effective interest rate of 7.65%, to accrete the value of the obligation to amounts payable under the terms of the arrangement. (d) Senior secured notes On December 30, 2020, Source issued $142,238 in aggregate principal of senior secured notes (the “Notes”), which bore interest at 10.5% and would have matured on March 15, 2025. The Notes were secured by a fixed and floating charge over all assets of the business and a second charge on accounts receivable and inventory. Pursuant to the Refinancing Transaction, on December 20, 2024, the Notes were extinguished with proceeds received from the Term Loan. During the nine months ended September 30, 2024, prior to the repayment of the Notes, the Company purchased and cancelled a portion of the outstanding Notes in the open market, with an aggregate principal value of $4,847, for gross proceeds of $4,818, including accrued and unpaid interest. Total Note repurchases completed during the nine months ended September 30, 2024 resulted in a loss on extinguishment of debt of $164. As per the terms of the Note indenture, the Company also completed a mandatory redemption for the Notes with an aggregate principal value of $4,44 --- 1, for gross proceeds of $4,492, including accrued and unpaid interest during the three months ended March 31, 2024. Interest expense for the Notes was $3,707 and $11,278, respectively, for the three and nine months ended September 30, 2024. (e) Prior ABL facility The Company had an ABL facility (the “Prior ABL”) that was extinguished on December 20, 2024, and bore interest at SOFR plus a margin of 2.95% and applicable fees. Amounts available under the Prior ABL were subject to a borrowing base formula applied to accounts receivable and inventory. Interest on the facility was $1,116 and $3,447, respectively, for the three and nine months ended September 30, 2024. (f) Promissory Notes In 2024, the Company acquired sand trucking assets as described in Note 5. The Promissory Notes issued in respect of these acquisitions were repaid in full as part of the Refinancing Transaction. (g) Standby letter of credit facility and deposits The Company has a US$13,500 standby letter of credit facility. The Company also has outstanding letters of credit, supported by cash deposits, and surety bonds issued in respect of reclamation obligations related to its mining operations in Wisconsin. As at September 30, 2025, $3,370 (December 31, 2024 - $3,572) has been classified as a non-current asset in these interim condensed consolidated statements of financial position in respect of these deposits, of which $1,100 is restricted cash (December 31, 2024 - $1,136). The effective interest rate realized on long-term debt, excluding the Taylor Financing Facility, for the nine months ended September 30, 2025 was 11.0% (December 31, 2024 - 11.9%). SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 12 12. LEASE LIABILITIES As at September 30, 2025 December 31, 2024 Balance, beginning of period $ 79,904 $ 62,690 Lease additions(1) 40,646 33,608 Lease modifications 4,489 1,961 Lease payments (19,427) (21,375) Exchange differences (1,353) 3,020 Balance, end of period $ 104,259 $ 79,904 Less: current portion (26,889) (19,386) Long-term portion $ 77,370 $ 60,518 Note: (1) Includes lease liabilities related to the sand trucking assets acquired in 2024. Refer to Note 5 for additional information. The Company enters into lease arrangements related to rail cars, equipment and vehicles, office buildings and surface leases. Lease liabilities are measured at the present value of the remaining lease payments using an incremental borrowing rate of 8% (December 31, 2024 - 9%). Leases with a lease term of twelve months or less for certain classes of assets and low-value assets of $2 and $12, respectively, were expensed to cost of sales or operating expense in the three and nine months ended September 30, 2025 (three and nine months ended September 30, 2024 - $58 and $148, respectively). The Company recognized $1,780 and $5,185, respectively, of interest on lease liabilities for the three and nine months ended September 30, 2025 (three and nine months ended September 30, 2024 - $1,301 and $3,747, respectively). 13. DECOMMISSIONING PROVISION As at September 30, 2025 December 31, 2024 Balance, beginning of period $ 10,791 $ 9,475 Liabilities incurred 202 368 Liabilities settled (1,191) (1,494) Accretion 268 342 Changes in estimates 929 1,236 Exchange differences (364) 864 Balance, --- end of period $ 10,635 $ 10,791 Less: current portion (1,514) (1,564) Long-term portion $ 9,121 $ 9,227 The Company’s decommissioning provision relates to reclamation of land and facilities where its mines operate. Management estimates the costs to abandon and reclaim its properties based on current reclamation technology, acres disturbed and the estimated time period in which these costs will be incurred in the future. The total future estimate of undiscounted cash flows required to settle the provision has been discounted using an inflation rate of 3.17% and risk-free rates of 3.59% for expenditures planned within the next ten years and 3.20% for longer-term expenditures at September 30, 2025 (December 31, 2024 - 3.17%, 3.36% and 3.29%, respectively). The majority of these costs are expected to occur between 6 and 39 years. 14. COMMITMENTS AND CONTINGENCIES The Company has commitments regarding physical natural gas contracts which expire between October 2025 and December 2027, as well as various IT software subscriptions through 2030. Estimated annual commitments are as follows: 2025 $ 817 2026 2,091 2027 and beyond 816 Total $ 3,724 Additionally, under the terms of the Peace River facility lease, the Company is exposed to potential future cash outflows for variable lease payments which commence when production exceeds 150,000 metric tonnes per year. During the three and nine months ended September 30, 2025, no variable lease payments were incurred (three and nine months ended September 30, 2024 - $nil). In the ordinary course of conducting business, the Company occasionally becomes involved in legal proceedings relating to contracts, environmental issues or other matters. While the amount of any proceeding or litigation is inherently uncertain, SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 13 management of the Company believes that the outcome of any pending or threatened actions will not have a material adverse effect on the business or financial condition of the Company. Source had been pursuing claims against certain organizations in respect of damages related to the structural failure of assets at its Fox Creek terminal facility which occurred on May 7, 2019. The claims between the parties were settled and the lawsuit was dismissed in early 2025 (refer to Note 21 for additional information). 15. SHAREHOLDERS' EQUITY The Company is authorized to issue an unlimited number of common shares. The following table outlines the issued and outstanding common shares as at September 30, 2025: (stated in thousands, except share amounts) Number of shares Amount Balance as at December 31, 2024 13,545,055 $ 410,632 Shares repurchased and cancelled through NCIB (392,900) (4,999) Balance as at September 30, 2025 13,152,155 $ 405,633 Normal Course Issuer Bid On May 13, 2025, the Company commenced a Normal Course Issuer Bid (the “NCIB”), under which the Company was authorized to purchase up to a maximum of 750,000 common shares or $5,000. On October 6, 2025, the Company amended its NCIB, increasing the maximum number of shares that may be repurchased to 1,189,458 common shares or $15,600. The NCIB will terminate on the earlier of May 12, 2026 and such earlier date as the maximum number of common shares are purchased or the NCIB is complete --- d or terminated at the election of the Company. For the nine months ended September 30, 2025, Source purchased 392,900 shares for cancellation at a weighted average price per share of $12.72. In May 2025, the Company entered into an Automated Share Purchase Plan (the “ASPP”) with an independent broker which permits Source to purchase common shares during its internal blackout period. Purchases completed during an internal blackout period are determined by the broker in its sole discretion based on parameters established by Source under the ASPP. On October 6, 2025, the Company revised the ASPP in accordance with the terms of the amended NCIB. 16. SHARE-BASED COMPENSATION The Company has a share-based compensation plan that allows for deferred share unit (“DSU”) grants for directors. The DSUs vest and are expensed over the earlier of five years or when a director or other participant ceases in their role and are payable only when a director or participant leaves the Company. The fair value of the DSUs was determined using the Company’s share price at period end and a forfeiture rate of 5%. The DSUs are expected to be settled for cash payment and accordingly are considered a liability-settled award for accounting purposes. At September 30, 2025, a current liability of $3,288 has been recorded for these units (December 31, 2024 - $4,045). The Company had plans that allowed for restricted share unit (“RSU”) and performance share unit (“PSU”) grants as well as the issuance of share appreciation rights (“SAR”) for certain employees. During the three months ended March 31, 2025, the Company and the Board agreed to wind up the RSU and PSU plans, whereby all outstanding units vested and were settled for cash or shares. During 2024, the Company and the Board agreed to wind up the SAR plan, effective January, 2025, which resulted in the cash settlement of all outstanding SARs during the three months ended March 31, 2025. As at September 30, 2025, the following share-based compensation plan units were outstanding: (number of units) SAR RSU PSU DSU Balance as at December 31, 2023 523,500 229,997 788,895 272,888 Granted — — 107,770 62,960 Exercised (203,000) (115,835) (283,967) — Forfeited (27,500) — (6) — Balance as at December 31, 2024 293,000 114,162 612,692 335,848 Granted — — 57,990 37,296 Exercised (293,000) (114,162) (670,672) (70,805) Forfeited — — (10) — Balance as at September 30, 2025 — — — 302,339 Vested as at September 30, 2025 — — — — SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 14 For the three and nine months ended September 30, 2025, share-based compensation expense (recovery) was $321 and $(3,557), respectively (three and nine months ended September 30, 2024 - $1,016 and $9,325, respectively). 17. (LOSS) EARNINGS PER SHARE Basic and diluted (loss) earnings per share The calculation of basic and diluted (loss) earnings per share for the three and nine months ended September 30, 2025 was based on the (loss) earnings available to holders of common shares of $(6,217) and $30,950, respectively (three and nine months ended September 30, 2024 - $10,155 and $16,733), and a weighted average number of common shares outstanding for the three and nine months ended September 30, 2025 of 13,456,959 and 13,417,778, respectively (three an --- d nine months ended September 30, 2024 - 13,545,055). Diluted (loss) earnings per share is calculated by adjusting the (loss) earnings and number of shares for the effects of potential dilution attributed to restricted and performance share units granted to employees. For the three and nine months ended September 30, 2025, there were no common shares that could have a potentially dilutive effect in a future period as all RSU and PSU units were fully settled (potentially dilutive effect for the three and nine months ended September 30, 2024 - 695,279 and 783,698, respectively). Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Common shares outstanding, beginning of period 13,545,055 13,545,055 13,545,055 13,545,055 Weighted average shares repurchased and cancelled under NCIB (88,096) — (127,277) — Weighted average common shares outstanding, end of period 13,456,959 13,545,055 13,417,778 13,545,055 (Loss) earnings per share Basic $ (0.46) $ 0.75 $ 2.31 $ 1.24 Diluted $ (0.46) $ 0.74 $ 2.31 $ 1.24 18. REVENUE The following table presents the Company’s sales, disaggregated by revenue source: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Revenue from contracts with customers: Sand revenue $ 100,265 $ 142,236 $ 424,640 $ 415,286 Well site solutions 23,941 39,908 107,585 110,988 Terminal services 1,067 846 3,409 2,512 Total revenue from contracts with customers $ 125,273 $ 182,990 $ 535,634 $ 528,786 Storage facilities(1) 46 60 138 188 Total $ 125,319 $ 183,050 $ 535,772 $ 528,974 Note: (1) Storage facilities includes revenue for proppant storage at terminals. SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 15 Contract Liabilities Source constructed two customer-funded Sahara units that were completed in 2024, at which time the related leases commenced. Refer to Note 7 for additional information. During 2024, Source entered into agreements with customers where the Company received $13,720 of prepayments for future obligations. The following table provides a summary of the contract liabilities for the periods below: As at September 30, 2025 December 31, 2024 Balance, beginning of period $ 13,468 $ 2,726 Cash proceeds 337 21,840 Satisfaction of performance obligations (9,555) (11,453) Exchange differences — 355 Balance, end of period $ 4,250 $ 13,468 Less: current portion (2,642) (11,832) Long-term portion $ 1,608 $ 1,636 19. OPERATING AND GENERAL & ADMINISTRATIVE COSTS The Company presents its expenses on these interim condensed consolidated statements of operations and comprehensive (loss) income using the function of expense method whereby expenses are classified according to their function within the Company. This method was selected as it is more closely aligned with the Company’s business structure. The Company’s functions under IFRS are as follows: • Cost of sales; • Operating; and • General & administrative. Cost of sales includes direct operating costs (including product costs, direct labour and overhead costs) and depreciation on assets relating to operations. Additional information on the nature of expenses is as follows: COS OPEX G&A Total COS OPEX G&A Total Direct material $ 72,558 $ — $ — $ 72,558 $ 104,324 $ — $ — $ 104,324 Salary costs 6,923 2,655 1 --- ,994 11,572 5,780 2,832 2,503 11,115 Equipment costs 1,899 789 — 2,688 1,579 709 1 2,289 Transportation costs 13,273 — — 13,273 27,923 — — 27,923 Facility costs 363 442 19 824 162 381 16 559 Selling costs — 3,263 (70) 3,193 — 2,571 43 2,614 Administration costs — — 1,292 1,292 — — 955 955 Total $ 95,016 $ 7,149 $ 3,235 $ 105,400 $ 139,768 $ 6,493 $ 3,518 $ 149,779 Nine months ended September 30, 2025 2024 COS OPEX G&A Total COS OPEX G&A Total Direct material $ 312,132 $ — $ — $ 312,132 $ 302,193 $ — $ — $ 302,193 Salary costs 19,669 9,028 8,911 37,608 15,626 8,308 11,289 35,223 Equipment costs 6,297 2,351 2 8,650 4,270 1,808 24 6,102 Transportation costs 71,640 — — 71,640 77,728 — — 77,728 Facility costs 927 1,325 41 2,293 547 1,136 53 1,736 Selling costs — 10,755 (28) 10,727 — 7,610 288 7,898 Administration costs — — 4,056 4,056 — — 3,065 3,065 Total $ 410,665 $ 23,459 $ 12,982 $ 447,106 $ 400,364 $ 18,862 $ 14,719 $ 433,945 Three months ended September 30, 2025 2024 SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 16 20. FINANCE EXPENSE Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Interest $ 5,394 $ 6,281 $ 17,537 $ 18,848 Accretion(1)(2) 897 1,630 2,449 5,679 Other 277 306 623 1,039 Total $ 6,568 $ 8,217 $ 20,609 $ 25,566 Notes: (1) Includes accretion of deferred financing fees for the ABL facility, the Term Loan, the Taylor Financing Facility and accretion of the Company’s decommissioning provision for the three and nine months ended September 30, 2025. (2) For the three and nine months ended September 30, 2024, includes accretion of deferred financing fees for the Prior ABL, amounts related to accretion of the Notes to their aggregate principal value and accretion of the Company’s decommissioning provision. 21. OTHER EXPENSE (RECOVERY) Source had been pursuing claims against certain organizations in respect of damages related to the structural failure of assets at its Fox Creek terminal facility which occurred on May 7, 2019. In early 2025, claims between the parties were settled and the lawsuit was dismissed, resulting in a net payment to Source of $11,150. During the three and nine months ended September 30, 2025 and 2024, the Company incurred costs associated with the legal proceedings related to the claim, as noted above, as well as fees related to the 2024 corporate reorganization. 22. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (a) Risk management overview The Company’s activities expose it to a variety of financial risks including credit risk, liquidity risk and market risk. Further quantitative disclosures are included throughout these interim condensed consolidated financial statements. The Company employs risk management strategies and policies to ensure that any exposures to risk are in compliance with the Company’s business objectives and risk tolerance levels. While the Board has the overall responsibility for the Company’s risk management framework, the Company’s management has the responsibility to administer and monitor these risks. (b) Classification of financial instruments The Company categorizes the following financial instruments at amortized cost: As at September 30, 2025 December 31, 2024 Financial instruments at amortized cost: Cash 30,395 32,717 Accounts receivabl --- e 51,798 79,505 Deposits and restricted cash 3,370 3,729 Lease receivable (includes current portion) 3,191 4,128 Accounts payable and accruals 76,870 94,847 Lease liabilities (includes current portion) 104,259 79,904 Long-term debt (includes current portion) 181,019 194,967 (c) Fair value of financial instruments Financial assets and financial liabilities are not measured at their fair values when the carrying amount is a reasonable approximation of fair value due to their nature, short-term maturity or floating rate interest. The Company analyzes financial instruments carried at fair value by valuation method. The different levels have been defined as follows: Level 1: Values based on unadjusted quoted prices in active markets for identical assets or liabilities, accessible at the measurement date. Level 2: Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3: Values based on prices or valuation techniques that require inputs for the asset or liability that are not based on observable market data (unobservable inputs). SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 17 Carrying amount Fair Value September 30, 2025 Level 1 Level 2 Level 3 Financial liabilities at amortized cost: Term Loan $ 159,146 $ — $ — $ 159,257 Taylor Financing Facility $ 21,873 $ — $ — $ 22,383 (d) Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Substantially all of the Company’s trade and other amounts receivable are due from purchasers of proppants and logistics services and are subject to normal industry credit risk. Significant changes in industry conditions will increase the risk of not collecting receivables. Management believes the risk is materially mitigated by the size and reputation of the companies to which they extend credit. The Company’s revenues are generally derived from a group of large and reputable oilfield E&P companies and oilfield services customers. Orders for proppants are subject to guidelines established by the Company’s credit and collection program. Source’s five largest customers account for 89% of the revenue for the three months ended September 30, 2025, with the three largest making up 72% of revenue (three months ended September 30, 2024, five customers accounted for 65%, three customers accounted for 50%).The Company’s five largest customers account for 77% of the revenue for the nine months ended September 30, 2025, with the three largest making up 60% (nine months ended September 30, 2024, five customers accounted for 71%, three customers accounted for 57%). Three of those customers (two for the nine months ended September 30, 2024) account for 10% or more of total revenue individually for the nine months ended September 30, 2025. The Company’s accounts receivable balance, net of loss allowances, was comprised of the following: As at September 30, 2025 December 31, 2024 Not yet due $ 47,744 $ 69,669 0 – 30 days 3,323 9,703 31 – 60 days 707 5 61 – 90 days 12 89 91+ days 12 39 Total accounts receivable $ 51,798 $ 79,505 The Company performs ongoing credit evaluations --- of its customers and establishes an allowance for doubtful accounts based on the lifetime expected credit loss provision. The Company uses an allowance matrix to estimate the credit losses of trade receivables which considers historical default rates as well as the days past due. A loss allowance of $84 was recorded as at September 30, 2025: As at September 30, 2025 December 31, 2024 Balance, beginning of period $ 402 $ 79 (Decrease) increase in loss allowance (32) 37 Specific provision for receivables deemed uncollectible (286) 286 Balance, end of period $ 84 $ 402 The Company’s maximum exposure to credit risk is the carrying amount of trade and other amounts receivable (including leases), cash, deposits and restricted cash as well as foreign exchange forward contracts, if applicable. Other than leases and accounts receivable, these financial instruments are held with major financial institutions and management believes the investment grade credit ratings of these institutions minimize this risk. (e) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The financial liabilities on these interim condensed consolidated statements of financial position consist of accounts payable and accrued liabilities, contract and lease liabilities, the Term Loan, ABL facility and Taylor Financing Facility. The Company’s approach to managing liquidity risk includes preparing operating and capital budgets and forecasts and monitoring performance against budgets and forecasts. Source may seek additional financing based on the results of these processes. The Company’s ongoing liquidity is impacted by various external events and conditions, including foreign currency fluctuations and commodity price fluctuations as well as global economic conditions. SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 18 The Company expects to repay its financial liabilities in the normal course of operations and to fund future operational and capital requirements through operating cash flow, as well as future debt and equity financings. Source has a credit facility to facilitate the management of liquidity risk. The Company’s contractual cash outflows relating to financial liabilities are outlined in the table below: As at September 30, 2025 Total 2025 2026 2027 2028 2029 2030 and beyond Accounts payable and accruals $ 76,870 $ 76,870 $ — $ — $ — $ — $ — Lease liabilities(1) $ 125,957 $ 8,866 $ 31,897 $ 26,507 $ 17,307 $ 12,226 $ 29,154 Term Loan(2)(3) $ 228,937 $ 7,240 $ 24,923 $ 23,934 $ 23,112 $ 149,728 $ — Contract liabilities $ 4,250 $ 2,642 $ 1,608 $ — $ — $ — $ — Taylor Financing Facility(1)(4) $ 26,063 $ 1,617 $ 5,252 $ 5,252 $ 5,252 $ 8,690 $ — Notes: (1) Includes interest for future periods. (2) Reflects cash outflows for interest and principal only, refer to Note 11(a) for additional information. (3) The timing and amount of interest payments on such balances will fluctuate depending on balances outstanding and applicable interest rates. (4) Includes amounts repayable through transload credits, the timing and amount of which may fluctuate, refer to Note 11(c) for additional information. (f) Market risk Market risk is the risk that changes in market prices, including foreign exchang --- e rates and interest rates, will affect the Company’s net earnings or the value of financial instruments and are largely outside the control of the Company. The objective of the Company is to manage and mitigate market risk exposures within acceptable limits while maximizing returns. Primary market risks are as follows: Foreign currency risk The Company is exposed to foreign exchange risk on debt denominated in US dollars. The net effect of each 1% change in foreign exchange would impact long-term debt and net income by $1,685 at September 30, 2025 (December 31, 2024 - $1,943). The Company is exposed to foreign exchange risk on sales denominated in US dollars to the extent that the receipt of payment of the US denominated accounts receivable are subject to fluctuations in the related foreign exchange rate. In addition, foreign currency risk exists on the cost of manufacturing of inventory for sale to the extent that the payment of those costs are foreign denominated accounts payable and are subject to fluctuations in the foreign exchange rate. Included in accounts receivable, accounts payable and accrued liabilities as at September 30, 2025 are $6,103 (December 31, 2024 - $25,898) and $29,144 (December 31, 2024 - $26,097) denominated in foreign currency, respectively. The net effect of each 1% change in foreign exchange would impact net income (excluding the impact from long-term debt) by $413 and $1,562 for the three and nine months ended September 30, 2025, respectively ($482 and $1,072 for the three and nine months ended September 30, 2024, respectively). Interest rate risk Interest rate risk is the risk that future cash flows associated with financial instruments will fluctuate as a result of changes in market interest rates. The Company is exposed to interest rate risk to the extent that changes in market interest rates impact borrowings under its floating rate asset-backed loan facility and its floating rate Term Loan. The net effect of each 1% change in market interest rates would impact the related interest expense for the Company’s floating rate borrowings by $1,591 at September 30, 2025 ($1,835 at December 31, 2024). The Company had no derivative contracts in place as at or during the three and nine months ended September 30, 2025 and 2024 with respect to managing interest rate risk. (g) Capital management The Company’s capital management policy is to maintain a strong capital base that optimizes the Company’s ability to grow, maintain shareholder and creditor confidence and to provide a platform to create value for its common shareholders. The Company’s management is responsible for managing the Company’s capital and does so through regular reviews of financial information including budgets and forecasts. The Company’s directors are responsible for overseeing this process. The Company considers its capital structure to include equity, the Term Loan, the ABL facility, the Taylor Financing Facility and leases. The Company monitors capital based on its current working capital, available credit line, projected cash flow from operations and anticipated capital expenditures. In order to manage its capital structure, the Company prepares annual capital expenditure and operating budgets, which are updated as necessary. The annual and updated budgets are prepared by the Company’s management and approved by the Company’s Board. In order to maintain or adjust the capital structure, the Company may issue share capital, seek debt financin --- g and adjust its capital spending to manage its current and projected capital structure. The Company’s ability to raise additional debt or equity financing is SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 19 impacted by external conditions, including global economic conditions. The Company continually monitors economic and general business conditions. The Company’s share capital is not subject to external restrictions; however, the amount of the ABL facility available for use is determined by levels of accounts receivable and inventory. Refer to Note 11(b) for additional information. The Company’s capital management policy has not changed during the periods ended September 30, 2025 and December 31, 2024. 23. SEGMENT AND GEOGRAPHICAL INFORMATION The Company has determined that it operates in a single operating and reportable segment. Total external revenues and assets by geographical location are summarized in the table below: Sales for the three months ended September 30, Canadian Operations US Operations Corporate(1) Total 2025 $ 123,663 $ 1,656 $ — $ 125,319 2024 $ 182,033 $ 1,017 $ — $ 183,050 Sales for the nine months ended September 30, Canadian Operations US Operations Corporate(1) Total 2025 $ 532,575 $ 3,197 $ — $ 535,772 2024 $ 526,808 $ 2,166 $ — $ 528,974 Total Assets Canadian Operations US Operations Corporate(1) Total September 30, 2025 $ 289,864 $ 254,856 $ 53,174 $ 597,894 December 31, 2024 $ 275,481 $ 258,839 $ 63,898 $ 598,218 Note: (1) Corporate operations are included for informational purposes only. SOURCE ENERGY SERVICES LTD. Notes to the Interim Condensed Consolidated Financial Statements - Unaudited As at and for the three and nine months ended September 30, 2025 and 2024 (All amounts are in thousands of Canadian dollars, unless otherwise noted) Page 20