10-Q

AESI

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-41828

Atlas Energy Solutions Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	93-2154509
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5918 W. Courtyard Drive, Suite 500 Austin, Texas	78730
(Address of principal executive offices)	(Zip Code)

(512) 220-1200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Common stock, par value $0.01 per share

    AESI

    New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☒

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 24, 2024, the registrant had 110,216,836 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Stockholders' and Members' Equity and Redeemable Noncontrolling Interest	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	50

PART II.	OTHER INFORMATION	51

Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	51
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	52
SIGNATURES		53

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Atlas Energy Solutions Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)


	September 30,		December 31,
	2024		2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	78,637	$	210,174
Accounts receivable		179,924		71,170
Inventories		15,777		6,449
Spare part inventories		22,123		15,408
Prepaid expenses and other current assets		20,052		15,485
Total current assets		316,513		318,686
Property, plant and equipment, net		1,449,540		934,660
Operating lease right-of-use assets		13,730		3,727
Finance lease right-of-use assets		5,917		424
Goodwill		75,219		—
Intangible assets		109,281		1,767
Other long-term assets		3,290		2,422
Total assets	$	1,973,490	$	1,261,686
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	124,770	$	60,882
Accounts payable - related parties		235		277
Accrued liabilities		68,458		28,458
Current portion of long-term debt		36,219		—
Current portion of operating lease liabilities		5,832		1,249
Current portion of finance lease liabilities		3,035		158
Current portion of deferred revenue		6,837		—
Other current liabilities		12,786		1,568
Total current liabilities		258,172		92,592
Long-term debt, net of discount and deferred financing costs		439,043		172,820
Deferred tax liabilities		207,182		121,529
Operating lease liabilities		8,400		3,498
Finance lease liabilities		3,155		264
Deferred revenue		951		—
Asset retirement obligation		8,662		2,705
Other long-term liabilities		1,744		454
Total liabilities		927,309		393,862
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value; 500,000,000 authorized; no shares issued and outstanding as of September 30, 2024 and December 31, 2023.		—		—
Common Stock, $0.01 par value, 1,500,000,000 shares authorized, 109,874,855 and 100,025,584 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.		1,098		1,000
Additional paid-in-capital		1,045,083		908,079
Retained earnings (Accumulated deficit)		—		(41,255	)
Total stockholders' equity		1,046,181		867,824
Total liabilities and stockholders’ equity	$	1,973,490	$	1,261,686

The accompanying notes are an integral part of these condensed consolidated financial statements.

Atlas Energy Solutions Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Product sales	$	145,347		$	114,773		$	386,989		$	368,131
Service sales		159,087			42,843			397,630			104,691
Total sales		304,434			157,616			784,619			472,822
Cost of sales (excluding depreciation, depletion and accretion expense)		225,347			67,770			534,229			193,829
Depreciation, depletion and accretion expense		26,069			10,221			68,271			28,173
Gross profit		53,018			79,625			182,119			250,820
Selling, general and administrative expense (including stock and unit-based compensation expense of $6,289, $1,414, $15,961, and $3,660, respectively)		25,463			14,301			80,737			34,988
Amortization expense of acquired intangible assets		3,744			—			8,573			—
Loss on disposal of assets		8,574			—			19,672			—
Insurance recovery (gain)		—			—			(10,000	)		—
Operating income		15,237			65,324			83,137			215,832
Interest (expense), net		(11,193	)		(1,496	)		(26,629	)		(5,459	)
Other income		289			136			450			438
Income before income taxes		4,333			63,964			56,958			210,811
Income tax expense		415			7,637			11,416			20,368
Net income	$	3,918		$	56,327		$	45,542		$	190,443
Less: Pre-IPO net income attributable to Atlas Sand Company, LLC					—						54,561
Less: Net income attributable to redeemable noncontrolling interest					26,887						66,190
Net income attributable to Atlas Energy Solutions Inc.	$	3,918		$	29,440		$	45,542		$	69,692

Net income per common share
Basic	$	0.04		$	0.51		$	0.42		$	1.22
Diluted	$	0.04		$	0.51		$	0.42		$	1.21
Weighted average common shares outstanding
Basic		109,883			57,237			107,570			57,189
Diluted		111,078			57,928			108,562			57,746

The accompanying notes are an integral part of these condensed consolidated financial statements.

Atlas Energy Solutions Inc.

Condensed Consolidated Statements of Stockholders' and Members' Equity and Redeemable Noncontrolling Interest

(Unaudited)

(In thousands)


	Redeemable			Members'			Old Atlas				Old Atlas						New Atlas				Additional						Stockholders'
	Noncontrolling			Equity			Class A				Class B						Common Stock				Paid-In-			Retained Earnings			and Members'
	Interest			Value			Shares		Value		Shares			Value			Shares		Value		Capital			(Accumulated Deficit)			Equity
Balance at December 31, 2023	$	—		$	—			—	$	—		—		$	—			100,026	$	1,000	$	908,079		$	(41,255	)	$	867,824
Net income		—			—			—		—		—			—			—		—		—			45,542			45,542
Dividends		—			—			—		—		—			—			—		—		(66,157	)		(4,287	)		(70,444	)
Dividend equivalent rights		—			—			—		—		—			—			—		—		(1,784	)		—			(1,784	)
Stock-based compensation		—			—			—		—		—			—			—		—		15,961			—			15,961
Issuance of Common Stock upon vesting of RSUs		—			—			—		—		—			—			138		1		(1	)		—			—
Equity issued in connection with Hi-Crush Transaction		—			—			—		—		—			—			9,711		97		188,985			—			189,082
Balance at September 30, 2024	$	—		$	—			—	$	—		—		$	—			109,875	$	1,098	$	1,045,083		$	—		$	1,046,181

	Redeemable			Members'			Old Atlas				Old Atlas						New Atlas				Additional						Stockholders'
	Noncontrolling			Equity			Class A				Class B						Common Stock				Paid-In-			Retained Earnings			and Members'
	Interest			Value			Shares		Value		Shares			Value			Shares		Value		Capital			(Accumulated Deficit)			Equity
Balance at December 31, 2022	$	—		$	511,357			—	$	—		—		$	—			—	$	—	$	—		$	—		$	511,357
Member distributions prior to IPO		—			(15,000	)		—		—		—			—			—		—		—			—			(15,000	)
Net income prior to IPO and Reorganization		—			54,561			—		—		—			—			—		—		—			—			54,561
Effect of Reorganization and reclassification to redeemable noncontrolling interest		771,345			(550,918	)		39,148		391		42,852			429			—		—		(221,247	)		—			(771,345	)
Issuance of Class A common stock in IPO, net of offering costs		—			—			18,000		180		—			—			—		—		291,056			—			291,236
Deferred tax liability arising from IPO		—			—			—		—		—			—			—		—		(27,537	)		—			(27,537	)
Stock-based compensation		—			—			—		—		—			—			—		—		3,290			—			3,290
Net income after IPO and Reorganization		66,190			—			—		—		—			—			—		—		—			69,692			69,692
$0.35/share Class A common stock dividend		—			—			—		—		—			—			—		—		—			(20,002	)		(20,002	)
$0.35/unit distribution to Atlas Sand Operating, LLC unitholders		(14,998	)		—			—		—		—			—			—		—		—			—			—
Dividend equivalent rights ($0.35 per share)		—			—			—		—		—			—			—		—		—			(296	)		(296	)
Other distributions to redeemable non-controlling interest unitholders		(7,158	)		—			—		—		—			—			—		—		—			—			—
Redemption of operating units of Atlas Sand Operating, LLC for Class A common stock		(13,640	)		—			594		6		(594	)		(6	)		—		—		13,640			—			13,640
Deferred tax liability arising from the redemption of operating units of Atlas Sand Operating, LLC for Class A common stock		—			—			—		—		—			—			—		—		(176	)		—			(176	)
Issuance of common stock upon vesting of RSUs, net of shares withheld for income taxes		—			—			25		—		—			—			—		—		—			—			—
Adjustment of redeemable noncontrolling interest to redemption amount		185,412			—			—		—		—			—			—		—		(59,026	)		(126,386	)		(185,412	)
Balance at September 30, 2023	$	987,151		$	—			57,767	$	577		42,258		$	423			—	$	—	$	—		$	(76,992	)	$	(75,992	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Atlas Energy Solutions Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Nine Months Ended
	September 30,
	2024			2023
Operating activities:
Net income	$	45,542		$	190,443
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and accretion expense		70,865			29,368
Amortization expense of acquired intangible assets		8,573			—
Amortization of debt discount		2,535			469
Amortization of deferred financing costs		318			270
Loss on disposal of assets		19,672			—
Stock and unit-based compensation		15,961			3,660
Deferred income tax		10,433			19,059
Other		(1,655	)		143
Changes in operating assets and liabilities:
Accounts receivable		(22,361	)		(28,893	)
Accounts receivable - related party		—			868
Inventories		(5,093	)		1,653
Spare part inventories		(3,613	)		(4,141	)
Prepaid expenses and other current assets		(2,387	)		(10,355	)
Other long-term assets		(412	)		(1,681	)
Accounts payable		27,373			3,877
Accounts payable - related parties		(42	)		93
Deferred revenue		(5,460	)		—
Accrued liabilities and other liabilities		25,358			8,691
Net cash provided by operating activities		185,607			213,524
Investing activities:
Purchases of property, plant and equipment		(297,552	)		(245,693	)
Hi-Crush acquisition, net of cash acquired		(142,233	)		—
Proceeds from insurance recovery		10,000			—
Net cash used in investing activities		(429,785	)		(245,693	)
Financing Activities:
Principal payments on term loan borrowings		(9,931	)		(16,573	)
Proceeds from borrowings		198,500			—
Issuance costs associated with debt financing		(1,183	)		(4,397	)
Payments under finance leases		(1,774	)		(1,932	)
Repayment of notes payable		(2,527	)		—
Dividends and distributions		(70,444	)		(42,158	)
Net proceeds from IPO		—			303,426
Payment of offering costs		—			(6,020	)
Member distributions		—			(15,000	)
Prepayment fee on 2021 Term Loan Credit Facility		—			(2,649	)
Net cash provided by financing activities		112,641			214,697
Net increase (decrease) in cash and cash equivalents		(131,537	)		182,528
Cash and cash equivalents, beginning of period		210,174			82,010
Cash and cash equivalents, end of period	$	78,637		$	264,538
Supplemental cash flow information
Cash paid during the period for:
Interest	$	27,602		$	10,735
Taxes	$	2,275		$	11,403
Supplemental disclosure of non-cash investing activities:
Property, plant and equipment in accounts payable and accrued liabilities	$	44,654		$	46,710
Asset retirement obligations incurred	$	6,743		$	847
Hi-Crush acquisition consideration, equity issuance	$	189,082		$	—
Hi-Crush acquisition consideration, Deferred Cash Consideration Note	$	107,189		$	—
Equipment assets acquired through debt	$	5,012		$	—
Redeemable noncontrolling interest cumulative adjustment to redemption value	$	—		$	185,412
Finance lease assets acquired through debt	$	—		$	39,454
Finance lease liabilities converted to debt	$	—		$	42,795

The accompanying notes are an integral part of these condensed consolidated financial statements.

Atlas Energy Solutions Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 – Business and Organization

Atlas Energy Solutions Inc., a Delaware corporation (f/k/a New Atlas HoldCo. Inc.) (“New Atlas” and together with its subsidiaries “we,” “us,” “our,” or the “Company”), was formed on June 28, 2023, pursuant to the laws of the State of Delaware, and is the successor to AESI Holdings Inc. (f/k/a Atlas Energy Solutions Inc.), a Delaware corporation (“Old Atlas”). New Atlas is a holding company and the ultimate parent company of Atlas Sand Company, LLC (“Atlas LLC”), a Delaware limited liability company formed on April 20, 2017. Atlas LLC is a producer of high-quality, locally sourced 100 mesh and 40/70 sand used as a proppant during the well completion process. Proppant is necessary to facilitate the recovery of hydrocarbons from oil and natural gas wells. One hundred percent of Atlas LLC’s sand reserves are located in Texas within the Permian Basin and operations consist of proppant production and processing facilities, including four facilities near Kermit, Texas (together, the “Kermit facilities”), a fifth facility near Monahans, Texas (the “Monahans facility”), and the OnCore distributed mining network.

We are currently building a logistics platform with the goal of increasing the efficiency, safety and sustainability of the oil and natural gas industry within the Permian Basin. This will include the Dune Express, an overland conveyor infrastructure solution currently under construction, coupled with our growing fleet of fit-for-purpose trucks and trailers.

We sell products and services primarily to oil and natural gas exploration and production companies and oilfield services companies primarily under supply agreements and also through spot sales on the open market.

Initial Public Offering

On March 13, 2023, Old Atlas completed its initial public offering (the “IPO”) of 18,000,000 shares of Class A common stock, par value $0.01 per share (the “Old Atlas Class A Common Stock”) at a price of $18.00 per share. The IPO generated $324.0 million of gross proceeds and net proceeds of approximately $291.2 million. The gross proceeds were offset by $20.6 million of underwriting discounts and commissions, $5.9 million of current offering costs in 2023, and $6.3 million in offering costs paid in 2022.

Reorganization

In connection with the IPO and pursuant to a master reorganization agreement dated March 8, 2023, by and among Old Atlas, Atlas Sand Management Company, LLC, a Texas limited liability company (“ASMC”), Atlas LLC, Atlas Sand Holdings, LLC, a Delaware limited liability company (“Holdings”), Atlas Sand Operating, LLC, a Delaware limited liability company (“Atlas Operating”), Atlas Sand Holdings II, LLC, a Delaware limited liability company (“Holdings II”), Atlas Sand Management Company II, LLC, a Delaware limited liability company (“ASMC II”), and Atlas Sand Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”), Old Atlas and the parties thereto completed certain restructuring transactions (the “Reorganization”). As part of the Reorganization:

•

Merger Sub merged with and into Atlas LLC, with Atlas LLC surviving as a wholly-owned subsidiary of Atlas Operating;

•

Holdings, Holdings II and ASMC II were formed (collectively with ASMC, the “HoldCos”), through which certain holders who previously held membership interests in Atlas LLC (the “Legacy Owners”) were issued the membership interests in Atlas Operating, as represented by a single class of common units (“Operating Units”);

•

certain Legacy Owners, through the HoldCos, transferred all or a portion of their Operating Units and voting rights, as applicable, in Atlas Operating to Old Atlas in exchange for an aggregate of 39,147,501 shares of Old Atlas Class A Common Stock and, in the case of Legacy Owners that continued to hold Operating Units through the HoldCos, an aggregate of 42,852,499 shares of Class B Common Stock, par value $0.01 per share, of Old Atlas (the “Old Atlas Class B Common Stock,” and together with the Old Atlas Class A Common Stock, the “Old Atlas Common Stock”), so that such Legacy Owners that continued to hold Operating Units also held, through the HoldCos, one share of Old Atlas Class B Common Stock for each Operating Unit held by them immediately following the Reorganization;

•

the 1,000 shares of Old Atlas Class A Common Stock issued to Atlas LLC at the formation of Old Atlas were redeemed and canceled for nominal consideration; and

•

Old Atlas contributed all of the net proceeds received by it in the IPO to Atlas Operating in exchange for a number of Operating Units equal to the number of shares of Old Atlas Class A Common Stock outstanding after the IPO, and Atlas Operating further contributed the net proceeds received to Atlas LLC.

As a result of the Reorganization, (i) Old Atlas’s sole material asset consisted, and still consists, of Operating Units, (ii) Atlas Operating’s sole material asset consisted, and still consists, of 100% of the membership interests in Atlas LLC and (iii) Atlas LLC owned, and still owns, all of the Company’s operating assets. Old Atlas is the managing member of Atlas Operating and is responsible for all operational, management and administrative decisions relating to Atlas LLC’s business and consolidates the financial results of Atlas LLC and its subsidiaries.

As a result of the IPO and Reorganization:

•

the Legacy Owners collectively owned all of the outstanding shares of Old Atlas Class B Common Stock and 39,147,501 shares of Old Atlas Class A Common Stock, collectively representing 82.0% of the voting power and 68.5% of the economic interest of Old Atlas (and 82.0% of the economic interest of Atlas LLC, including both direct and indirect ownership interests) at the closing of the IPO and Reorganization;

•

Old Atlas owned an approximate 57.1% interest in Atlas Operating; and

•

the Legacy Owners that continued to hold Operating Units collectively owned an approximate 42.9% interest in Atlas Operating.

On March 13, 2023, the date on which Old Atlas closed the IPO, a corresponding deferred tax liability of approximately $27.5 million was recorded associated with the differences between the tax and book basis of the investment in Atlas LLC. The offset of the deferred tax liability was recorded to additional paid-in capital. As there was no change in control of Atlas Operating, Atlas LLC, or the businesses or subsidiaries held by Atlas LLC as a result of the Reorganization, purchase accounting was not required and the Legacy Owners’ interests in Operating Units were recognized as a noncontrolling interest in Atlas Operating.

On September 13, 2023, we distributed the Operating Units and shares of Old Atlas Common Stock previously held by the HoldCos to the Legacy Owners in accordance with the distribution provisions of each respective HoldCo operating agreement. Immediately following the distribution, the Legacy Owners held shares of Old Atlas Class A Common Stock or Old Atlas Class B Common Stock (and corresponding Operating Units) directly.

Up-C Simplification

On October 2, 2023, Old Atlas and the Company completed the Up-C Simplification (as defined below) contemplated by the Master Reorganization Agreement (the “Master Reorganization Agreement”), dated as of July 31, 2023, by and among the Company, Old Atlas, Atlas Operating, AESI Merger Sub Inc., a Delaware corporation (“PubCo Merger Sub”), Atlas Operating Merger Sub, LLC, a Delaware limited liability company (“Opco Merger Sub” and, together with PubCo Merger Sub, the “Merger Subs”), and Holdings, in order to, among other things, reorganize under a new public holding company (the “Up-C Simplification”).

Pursuant to the Master Reorganization Agreement, (a) PubCo Merger Sub merged with and into Old Atlas (the “PubCo Merger”), as a result of which (i) each share of Old Atlas Class A Common Stock then issued and outstanding was exchanged for one share of Common Stock of New Atlas, par value $0.01 per share (the “New Atlas Common Stock” or the “Common Stock”), (ii) all of the shares of Old Atlas Class B Common Stock then issued and outstanding were surrendered and cancelled for no consideration and (iii) Old Atlas survived the PubCo Merger as a direct, wholly-owned subsidiary of the Company; and (b) Opco Merger Sub merged with and into Atlas Operating (the “Opco Merger” and, together with the PubCo Merger, the “Mergers”), as a result of which (i) each Operating Unit then issued and outstanding, other than those Operating Units held by Old Atlas, was exchanged for one share of New Atlas Common Stock and (ii) Atlas Operating became a wholly-owned subsidiary of New Atlas.

In connection with the Up-C Simplification:

•

each share of Old Atlas Class A Common Stock issued and outstanding immediately prior to the effective time of the Mergers (the “Effective Time”) was exchanged for one share of New Atlas Common Stock and the holders of Old Atlas Class A Common Stock became stockholders of New Atlas;

•

all of the Old Atlas Class B Common Stock issued and outstanding immediately prior to the Effective Time was surrendered and cancelled for no consideration;

•

each Operating Unit issued and outstanding immediately prior to the Effective Time, other than Operating Units held by Old Atlas, was exchanged for one share of New Atlas Common Stock, and the holders of such Operating Units became stockholders of New Atlas;

•

Old Atlas continues to hold all of the issued and outstanding Operating Units it held as of immediately prior to the Effective Time, such Operating Units were otherwise unaffected by the Up-C Simplification (including the Opco Merger), and such Operating Units, together with the Operating Units received by New Atlas in connection with the Opco Merger, constitute all of the Operating Units currently issued and outstanding;

•

Old Atlas became a direct, wholly-owned subsidiary of New Atlas, and all of the Old Atlas Class A Common Stock then held by New Atlas was recapitalized into a single share;

•

as of the Effective Time, New Atlas assumed (a) the Atlas Energy Solutions Inc. Long Term Incentive Plan (the “LTIP”), (b) all awards of restricted stock units and performance share units, in each case, whether vested or unvested, that were then outstanding under the LTIP, (c) the grant notices and agreements evidencing such awards, and (d) the then remaining unallocated share reserve issuable under the LTIP; and the terms and conditions that were in effect immediately prior to the Up-C Simplification under each outstanding award assumed by New Atlas continue in full force and effect after the Up-C Simplification, with certain exceptions to reflect the completion of the Up-C Simplification, such as each award denominated with reference to shares of New Atlas Common Stock instead of Old Atlas Class A Common Stock and the performance share unit awards being in reference to performance of New Atlas instead of performance of Old Atlas (with respect to the portion of the applicable performance period following the Up-C Simplification);

•

as of the Effective Time, (a) New Atlas assumed Old Atlas’s existing Management Change in Control Severance Plan (and each participation agreement thereunder that was then outstanding) and (b) the terms and conditions of the director compensation program applicable to members of the board of directors of Old Atlas (and any committees thereof) were applied instead to members of the board of directors of New Atlas (the “Board”) (and, any committees thereof) (and any portion of such compensation to be granted in the form of equity-based awards will be granted in awards denominated with reference to shares of New Atlas Common Stock instead of Old Atlas Class A Common Stock); and

•