# EDGAR Filing Document

**Accession Number:** 0000799165
**File Stem:** 0001558370-25-011393
**Filing Date:** 2025-8
**Character Count:** 191155
**Document Hash:** 5aebad5134d5c074f9bb143512e3b61f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001558370-25-011393.hdr.sgml**: 20250813

**ACCESSION NUMBER**: 0001558370-25-011393

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 60

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250813

**DATE AS OF CHANGE**: 20250813

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** DAWSON GEOPHYSICAL CO
- **CENTRAL INDEX KEY:** 0000799165
- **STANDARD INDUSTRIAL CLASSIFICATION:** OIL AND GAS FIELD EXPLORATION SERVICES [1382]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 742095844
- **STATE OF INCORPORATION:** TX
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32472
- **FILM NUMBER:** 251212135

**BUSINESS ADDRESS:**
- **STREET 1:** 508 WEST WALL
- **STREET 2:** SUITE 800
- **CITY:** MIDLAND
- **STATE:** TX
- **ZIP:** 79701
- **BUSINESS PHONE:** 4326843000

**MAIL ADDRESS:**
- **STREET 1:** 508 WEST WALL
- **STREET 2:** SUITE 800
- **CITY:** MIDLAND
- **STATE:** TX
- **ZIP:** 79701

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TGC INDUSTRIES INC
- **DATE OF NAME CHANGE:** 19920703

?xml version='1.0' encoding='ASCII'? DAWSON GEOPHYSICAL COMPANY_June 30, 2025

[**Table of Contents**](#TOC)

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

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

**For the Quarterly Period Ended June 30, 2025**

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

**For the Transition Period From &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**

**Commission File No. 001-32472**

**DAWSON GEOPHYSICAL COMPANY**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Texas** |  | **74-2095844** |
| (State or other jurisdiction of  |  | (I.R.S. Employer |
| incorporation or organization) |  | Identification No.) |

---

**508 West Wall, Suite 800, Midland, Texas 79701**

(Address of Principal Executive Office**)** (Zip Code)

Registrant's Telephone Number**,** Including Area Code: **432-684-3000**

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

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Title of Each Class** | &nbsp;&nbsp;**Name of Exchange on Which Registered** | &nbsp;&nbsp;**Trading Symbol** |
| &nbsp;&nbsp;**Common Stock, $0.01 par value** | &nbsp;&nbsp;**The NASDAQ Stock Market** | &nbsp;&nbsp;DWSN |

---

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, a 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.

---

| | | |
|:---|:---|:---|
| Accelerated filer ☐ | Large accelerated filer ◻ | Smaller reporting company ☒ |
| Non-accelerated filer ⌧ | 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 ☒

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.

---

| | |
|:---|:---|
| **Title of Each Class** | **Outstanding at August 11, 2025** |
| Common Stock, $0.01 par value | 31,047,801 shares |

---

------

[**Table of Contents**](#TOC)

**DAWSON GEOPHYSICAL COMPANY**

INDEX

---

| | |
|:---|:---|
|  | **PageNumber** |
| [**Part I. FINANCIAL INFORMATION**](#PARTIFINANCIALINFORMATION_430767) | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 1. Financial Statements](#ITEM1FINANCIALSTATEMENTS_376548) | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Condensed Consolidated Balance Sheets at June 30, 2025 and December 31, 2024 (unaudited)](#BALANCESHEETS_107274)  | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)](#COMPREHENSIVELOSS_871319) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (unaudited)](#CASHFLOWS_208457) | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)](#STOCKHOLDERSEQUITY_926433) | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Notes to Condensed Consolidated Financial Statements (unaudited)](#NOTESTOCONDENSEDCONSOLIDATEDFINANCIALSTA) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#ITEM2MANAGEMENTSDISCUSSIONANDANALYSIS_23) | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 3. Quantitative and Qualitative Disclosures about Market Risk](#ITEM3QUANTITATIVEANDQUALITATIVE_777615) | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 4. Controls and Procedures](#ITEM4CONTROLSANDPROCEDURES_180441) | 21 |
| [**Part II. OTHER INFORMATION**](#PARTIIOTHERINFORMATION_378548) | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 1. Legal Proceedings](#ITEM1LEGALPROCEEDINGS_315864) | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 1A. Risk Factors](#ITEM1ARISKFACTORS_294464) | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](#ITEM2UNREGISTEREDSALESOFEQUITYSECURITIES) | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 3. Defaults Upon Senior Securities](#ITEM3DEFAULTSUPONSENIORSECURITIES) | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 4. Mine Safety Disclosures](#ITEM4MINESAFETYDISCLOSURES) | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 5. Other Information](#ITEM5OTHERINFORMATION) | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 6. Exhibits](#ITEM6) | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Signatures](#SIGNATURES_258787) | 24 |

---

[**Table of Contents**](#TOC)

**PART I. FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)**

**DAWSON GEOPHYSICAL COMPANY**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(unaudited and amounts in thousands, except share data)**

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,**<br>**2024** |
| **Assets** |  |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $16228 | $1385 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net  | 3524 | 9970 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract assets | 7454 | 391 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 4222 | 2795 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 31428 | 14541 |
| **Property and equipment** | 237255 | 238064 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less accumulated depreciation | (225925) | (225085) |
| **Property and equipment, net** | 11330 | 12979 |
| **Operating lease right-of-use assets** | 2559 | 3002 |
| **Intangibles, net** | 367 | 348 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $45684 | $30870 |
| **Liabilities and Stockholders' Equity** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $2991 | $3381 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payroll costs and other taxes | 1786 | 2014 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 932 | 830 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 17935 | 1570 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current maturities of notes payable and finance leases | 1723 | 1010 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current maturities of operating lease liabilities | 1178 | 1125 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 26545 | 9930 |
| **Long-term liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable and finance leases, net of current maturities | 1127 | 1512 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities, net of current maturities | 1583 | 2131 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax liabilities, net | 16 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long-term liabilities | 2726 | 3659 |
| **Commitments and contingencies** |  |  |
| **Stockholders' equity:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock-par value $1.00 per share; 4,000,000 shares authorized, none outstanding |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock-par value $0.01 per share; 35,000,000 shares authorized, |  |  |
| 31,047,801 and 30,983,437 shares issued and outstanding at June 30, 2025  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and December 31, 2024, respectively | 310 | 310 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 157115 | 157073 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (138976) | (137619) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss, net | (2036) | (2483) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 16413 | 17281 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $45684 | $30870 |

---

*See accompanying notes to the condensed consolidated financial statements (unaudited).*

[**Table of Contents**](#TOC)

**DAWSON GEOPHYSICAL COMPANY**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME**

**(unaudited and amounts in thousands, except share and per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2024** | **2025** | **2024** |
| **Operating revenues:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fee Revenue | $8735 | $8326 | $23994 | $35064 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reimbursable Revenue | 1116 | 4186 | 1935 | 9032 |
|  | 9851 | 12512 | 25929 | 44096 |
| **Operating costs:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fee operating expenses | 7601 | 8205 | 18561 | 25319 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimbursable operating expenses | 1116 | 4186 | 1935 | 9032 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 8717 | 12391 | 20496 | 34351 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 2331 | 2484 | 4325 | 4717 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 1174 | 1406 | 2445 | 2995 |
|  | 12222 | 16281 | 27266 | 42063 |
| **(Loss) income from operations** | (2371) | (3769) | (1337) | 2033 |
| **Other income (expense):** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | 35 | 105 | 39 | 218 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (58) | (39) | (134) | (85) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | 38 | 26 | 71 | 205 |
| **(Loss) income before income tax** | (2356) | (3677) | (1361) | 2371 |
| **Income tax benefit (expense)** | 7 | 131 | 4 | (71) |
| **Net (loss) income** | (2349) | (3546) | (1357) | 2300 |
| **Other comprehensive income (loss):** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net unrealized income (loss) on foreign exchange rate translation | 477 | (110) | 447 | (270) |
| **Comprehensive (loss) income** | $(1872) | $(3656) | $(910) | $2030 |
| **Basic (loss) income per share of common stock** | $(0.08) | $(0.12) | $(0.04) | $0.07 |
| **Diluted (loss) income per share of common stock** | $(0.08) | $(0.12) | $(0.04) | $0.07 |
| **Weighted average equivalent common shares outstanding** | 30986929 | 30815443 | 30985212 | 30813886 |
| **Weighted average equivalent common shares outstanding - assuming dilution** | 30986929 | 30815443 | 30985212 | 30813886 |

---

*See accompanying notes to the condensed consolidated financial statements (unaudited).*

[**Table of Contents**](#TOC)

**DAWSON GEOPHYSICAL COMPANY**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(unaudited and amounts in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| Net (loss) income | $(1357) | $2300 |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 2445 | 2995 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash operating lease cost | 504 | 576 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash compensation  | 87 | 259 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bad debt expense | 177 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on disposal of assets | (378) | (114) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 16 |  |
| Change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;Decrease in accounts receivable | 6673 | 8192 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Increase) decrease in contract assets | (7063) | 605 |
| &nbsp;&nbsp;Decrease in prepaid expenses and other assets | 322 | 964 |
| &nbsp;&nbsp;Decrease in accounts payable | (439) | (139) |
| &nbsp;&nbsp;Decrease in accrued liabilities | (171) | (1101) |
| &nbsp;&nbsp;Decrease in operating lease liabilities | (554) | (627) |
| &nbsp;&nbsp;Increase (decrease) in deferred revenue | 16365 | (6120) |
| Net cash provided by operating activities | 16627 | 7790 |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;Capital expenditures, net of non-cash capital expenditures summarized below | (683) | (1488) |
| &nbsp;&nbsp;Proceeds from disposal of assets | 378 | 234 |
| Net cash used in investing activities | (305) | (1254) |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal payments on notes payable | (1066) | (777) |
| &nbsp;&nbsp;&nbsp;&nbsp;Principal payments on finance leases | (386) | (340) |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax withholdings related to stock based compensation awards | (45) | (76) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid |  | (9860) |
| Net cash used in financing activities | (1497) | (11053) |
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | 18 | (97) |
| Net increase (decrease) in cash and cash equivalents | 14843 | (4614) |
| **Cash and cash equivalents and restricted cash at beginning of period** | 1385 | 15772 |
| **Cash and cash equivalents and restricted cash at end of period** | $16228 | $11158 |
| **Supplemental cash flow information:** |  |  |
| &nbsp;&nbsp;Cash paid for interest  | $128 | $84 |
| &nbsp;&nbsp;Cash paid for income taxes | $— | $37 |
| **Non-cash operating, investing and financing activities:** |  |  |
| &nbsp;&nbsp;Decrease in accrued purchases of property and equipment | $— | $(332) |
| &nbsp;&nbsp;Finance leases incurred | $— | $613 |
| &nbsp;&nbsp;Financed insurance premiums | $1746 | $— |

---

*See accompanying notes to the condensed consolidated financial statements (unaudited).*

[**Table of Contents**](#TOC)

**DAWSON GEOPHYSICAL COMPANY**

**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**

**(unaudited and amounts in thousands, except share data)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | | |
|  | **Number**<br>**Of Shares** | <br>**Amount** | <br>**Additional**<br>**Paid-in**<br>**Capital** | <br>**Accumulated**<br>**Deficit** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**Loss** | <br>**Total** |
| **Balance January 1, 2025** | 30983437  | $310 | $157073 | $(137619) | $(2483) | $17281 |
| Net income |  |  |  | 992 |  | 992 |
| Unrealized loss on foreign exchange rate translation |  |  |  |  | (30) | (30) |
| Stock-based compensation expense |  |  | 44 |  |  | 44 |
| Issuance of common stock as compensation | 1050  |  |  |  |  |  |
| Shares exchanged for taxes on stock-based compensation | (325) |  |  |  |  |  |
| **Balance March 31, 2025** | 30984162  | $310 | $157117 | $(136627) | $(2513) | $18287 |
| Net loss |  |  |  | (2349) |  | (2349) |
| Unrealized income on foreign exchange rate translation |  |  |  |  | 477 | 477 |
| Stock-based compensation expense |  |  | 43 |  |  | 43 |
| Issuance of common stock as compensation | 91100  |  |  |  |  |  |
| Shares exchanged for taxes on stock-based compensation | (27461) |  | (45) |  |  | (45) |
| **Balance June 30, 2025** | 31047801  | $310 | $157115 | $(138976) | $(2036) | $16413 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | | |
|  | **Number**<br>**Of Shares** | <br>**Amount** | <br>**Additional**<br>**Paid-in**<br>**Capital** | <br><br>**Accumulated**<br>**Deficit** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**Loss** | <br>**Total** |
| **Balance January 1, 2024**  | 30812329  | $308 | $156678 | $(123640) | $(1912) | $31434 |
| Net income |  |  |  | 5846 |  | 5846 |
| Unrealized loss on foreign exchange rate translation |  |  |  |  | (160) | (160) |
| Dividends |  |  |  | (9860) |  | (9860) |
| **Balance March 31, 2024** | 30812329  | $308 | $156678 | $(127654) | $(2072) | $27260 |
| Net loss |  |  |  | (3546) |  | (3546) |
| Unrealized loss on foreign exchange rate translation |  |  |  |  | (110) | (110) |
| Issuance of common stock as compensation | 133850  | 1 | 258 |  |  | 259 |
| Shares exchanged for taxes on stock-based compensation | (39402) |  | (76) |  |  | (76) |
| **Balance June 30, 2024** | 30906777  | $309 | $156860 | $(131200) | $(2182) | $23787 |

---

*See accompanying notes to the condensed consolidated financial statements (unaudited).*

[**Table of Contents**](#TOC)

**DAWSON GEOPHYSICAL COMPANY**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**1. ORGANIZATION AND NATURE OF OPERATIONS** 

Dawson Geophysical Company, and its consolidated subsidiaries (the "Company") is a leading provider of North American onshore seismic data acquisition services with operations throughout the continental United States ("U.S.") and Canada. The Company acquires and processes 2-D, 3-D and multicomponent seismic data solely for its clients, ranging from major oil and gas companies to independent oil and gas operators as well as providers of multi-client data libraries.

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

**Basis of Presentation** 

In the opinion of the Company's management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Certain prior period amounts in the condensed consolidated financial statements may have been reclassified to conform to the current period's presentation.

These condensed consolidated financial statements have been prepared using accounting principles generally accepted in the U.S. for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in annual financial statements presented in accordance with accounting principles generally accepted in the U.S. have been omitted.

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company's annual consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The December 31, 2024, balance sheet information was derived from our audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

**Significant Accounting Policies** 

*Principles of Consolidation.* The condensed consolidated financial statements as of June 30, 2025, and for the three and six months ended June 30, 2025, and 2024, include the accounts of the Company and its wholly-owned subsidiaries, Dawson Operating LLC, Dawson Seismic Services Holdings, Inc., Eagle Canada, Inc., Eagle Canada Seismic Services ULC, and Exploration Surveys, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

*Dividends.* The Company records dividends declared as an addition to accumulated deficit when declaration of such dividends is not subject to restrictions in the jurisdictions in which the Company operates, or in conflict with information in the Company's bylaws.

*Allowance for Current Expected Credit Losses.* The Company's allowance for credit losses reflects its current estimate expected to be incurred over the life of the financial instrument and is determined based on a number of factors. Management determines the need for any allowance for credit losses on accounts receivable based on its review of past-due accounts, its past experience of historical write-offs, its current client base, when customer accounts exceed 90 days past due and specific customer account reviews. While the collectability of outstanding client invoices is continually assessed, the inherent volatility of the energy industry's business cycle can cause swift and unpredictable changes in the financial stability of the Company's clients. With the adoption of ASU No. 2016-13 in 2020, the Company made an accounting policy election to write off accrued interest amounts by reversing interest income. For the six months ended June 30, 2025, the Company incurred $177,000 of credit losses. For the three months ended June 30, 2025 the Company incurred no credit losses. The Company's allowance for credit losses was $250,000 at June 30, 2025 and December 31, 2024.

 *Leases*. The Company leases certain vehicles, seismic recording equipment, real property and office equipment under lease agreements. The Company evaluates each lease to determine its appropriate classification as a finance lease or an operating lease for financial reporting purposes. The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair market value of the related assets. Assets under finance leases are amortized using the straight-line method over the initial lease term. Amortization of assets under finance leases is included in depreciation expense. For operating leases, where readily determinable, the Company uses the implicit interest rate in determining the present value of future minimum lease payments. In the absence of an implicit rate, the Company uses its incremental borrowing rate. The right-of-use assets are amortized to operating lease cost over the lease terms in

[**Table of Contents**](#TOC)

a manner that results in straight-line operating lease cost and is included in operating expense. Several of the Company's leases include options to renew and the exercise of lease renewal options is primarily at the Company's discretion.

*Property and Equipment.* Property and equipment is capitalized at historical cost or the fair value of assets acquired in a business combination and is depreciated over the useful life of the asset. Management's estimation of this useful life is based on circumstances that exist in the seismic industry and information available at the time of the purchase of the asset. As circumstances change and new information becomes available, these estimates could change. Depreciation is computed using the straight-line method. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the balance sheet, and any resulting gain or loss is reflected in the results of operations for the period.

*Impairment of Long-lived Assets.* Long-lived assets are tested for impairment at the asset group level when events or changes in circumstances indicate the carrying value of the asset group may not be recoverable. Recognition of an impairment charge is required if future expected undiscounted net cash flows are insufficient to recover the carrying value of the asset group and the fair value of the asset group is below its carrying value. Depending upon the facts and circumstances, when indicators of asset impairment exist, management will test the asset group for impairment through developing a forecast of future undiscounted cash flows expected to be generated by the asset group or by estimating the fair value of assets within the asset group in lieu of detailed cash flow projections. If either the future undiscounted cashflows expected to be generated by the asset group or the fair of the assets within the asset group exceeds the carrying value of the asset group no impairment would be recognized. During the year ended December 31, 2024, management tested two of its asset groups for impairment through estimating the fair value of certain assets within the asset groups using a market approach or cost approach, as applicable. Because the fair value of these assets collectively exceeded the carrying value of the asset group, no impairment charges were recognized for the year ended December 31, 2024. No impairment test was required during the three and six months ended June 30, 2025.

*Use of Estimates in the Preparation of Financial Statements.* Preparation of the accompanying financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because of the use of assumptions and estimates inherent in the reporting process, actual results could differ from those estimates.

*Revenue Recognition*. Services are provided under cancelable service contracts which usually have an original expected duration of one year or less. These contracts are either "turnkey" or "term" agreements. Under both types of agreements, the Company recognizes revenues as the services are performed. Revenue is generally recognized based on square miles of data recorded compared to total square miles anticipated to be recorded on the survey using the total estimated revenue for the service contract. In the case of a cancelled service contract, the client is billed and revenue is recognized for any third party charges and square miles of data recorded up to the date of cancellation.

The Company receives reimbursements for certain out-of-pocket expenses under the terms of the service contracts. The amounts billed to clients are included at their gross amount in the total estimated revenue for the service contract.

Clients are billed as permitted by the service contract. Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and cash collections. If billing occurs prior to the revenue recognition or billing exceeds the revenue recognized, the amount is considered deferred revenue and a contract liability. Conversely, if the revenue recognition exceeds the billing, the excess is considered an unbilled receivable and a contract asset. As services are performed, those deferred revenue amounts are recognized as revenue.

In some instances, third-party permitting, surveying, drilling, helicopter, equipment rental and mobilization costs that directly relate to the contract are utilized to fulfill the contract obligations. These fulfillment costs are included in prepaid expenses and other current assets and generally amortized based on the total square miles of data recorded compared to total square miles anticipated to be recorded on the survey using the total estimated fulfillment costs for the service contract.

Estimates for total revenue and total fulfillment cost on any service contract are based on certain qualitative and quantitative judgments. Management considers a variety of factors such as whether various components of the performance obligation will be performed internally or externally, cost of third party services, and facts and circumstances unique to the performance obligation in making these estimates.

Additionally, the Company's policy includes (i) ignoring the financing component when estimating the transaction price for service contracts completed within one year, (ii) excluding sales tax collected from the customer when determining the transaction price, and (iii) expensing incremental costs to obtain a customer contract if the amortization period for those costs would otherwise be one year or less. See note 4 for additional disclosures related to disaggregated revenue.

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*Share-based compensation.* We measure and record compensation expense for share-based payment awards to employees and outside directors based on estimated grant date fair values. Grant date fair value is determined by averaging the high and low stock price on the grant date. We recognize compensation costs for awards granted over the requisite service period based on the grant date fair value in fee operating expenses and general and administrative expenses on our consolidated statements of operations. During the three and six months ended June 30, 2025, we granted 5,050 shares to employees with an aggregate grant date fair value of $8,000. For the three months ended June 30, 2025, we recognized expense related to restricted stock unit awards of $34,000 and $9,000 in fee operating expenses and general and administrative expenses, respectively. For the six months ended June 30, 2025, we recognized expense related to restricted stock unit awards of $70,000 and $17,000 in fee operating expenses and general and administrative expenses, respectively. Additionally, we recognize forfeitures of share-based compensation as they occur.

*Risks and Uncertainties.* The Company's ability to be profitable in the future will depend on many factors beyond its control, but primarily on the level of demand for land-based seismic data acquisition services by oil and natural gas exploration and development companies. The Company incurred net losses of $2.3 million and $3.5 million for the three months ended June 30, 2025 and 2024, respectively. The Company incurred a net loss of $1.4 million and generated net income of $2.3 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had $16.2 million in cash, and a positive working capital balance of $4.9 million. We believe that our cash flows from operations, and our current financial position are adequate to fund our continued operations.

**Recently Issued Accounting Pronouncements**

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures* ("ASU 2023-09")*.* ASU 2023-09 seeks to improve transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures. The updated guidance is effective for annual periods after January 1, 2025, and will be reflected through additional disclosures in the Company's 2025 10-K.

In November 2024, the FASB issued ASU No. 2024-03, *Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,* ASU 2024-03 enhances the disclosures required for certain expense captions in the Company's annual and interim consolidated financial statements. This ASU is effective prospectively or retrospectively for fiscal years beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its disclosures.

**3. FAIR VALUE OF FINANCIAL INSTRUMENTS** 

At June 30, 2025 and December 31, 2024, the Company's financial instruments included cash and cash equivalents, accounts receivable, other current assets, accounts payable, other current liabilities, notes payable, finance leases and operating lease liabilities. Due to the short-term maturities of cash and cash equivalents, accounts receivable, other current assets, accounts payable and other current liabilities, the carrying amounts approximate fair value at the respective balance sheet dates. The carrying value of the notes payable approximate their fair value based on comparisons with the prevailing market interest rate. The fair values of the Company's notes payable are level 2 measurements in the fair value hierarchy.

**4. OPERATING SEGMENTS**

The Company's chief operating decision maker (President and Chief Executive Officer) reviews the discrete segment financial information on a geographic basis for the U.S. operations and Canada Operations. The revenue for both of the Company's segments is generated by the same services, which utilize the same type of equipment and personnel. As a result, the Company has two reportable segments, U.S. Operations and Canada Operations. The performance of our segments is evaluated primarily on Adjusted EBITDA. We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax expense or benefit, (iii) depreciation, depletion and amortization and (iv) other unusual items. For the three and six months ended June 30, 2025, and 2024, there were no unusual items and therefore Adjusted EBITDA and EBITDA were equal.

Beginning in the year ended December 31, 2024, a portion of the management charges incurred by the U.S. segment were allocated to the Canadian segment based upon an activity level determined to be appropriate by management. These charges totaled approximately $55,000 and $34,000 for the three months ended June 30, 2025 and 2024, respectively and approximately $215,000 and $172,000 for the six months ended June 30, 2025 and 2024, respectively.

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The following tables present the Company's income statements by operating segment (in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** |
|  | **USA Operations** | **Canada Operations** | **Consolidated** | **USA Operations** | **Canada Operations** | **Consolidated** |
| **Operating revenues** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fee revenue | $8404 | $331 | $8735 | $11130 | $12864 | $23994 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reimbursable revenue | 1116 |  | 1116 | 1686 | 249 | 1935 |
|  | 9520 | 331 | 9851 | 12816 | 13113 | 25929 |
| **Operating costs:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fee operating expenses | 6742 | 859 | 7601 | 11357 | 7204 | 18561 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimbursable operating expenses | 1116 |  | 1116 | 1686 | 249 | 1935 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating expenses | 7858 | 859 | 8717 | 13043 | 7453 | 20496 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 1998 | 333 | 2331 | 3553 | 772 | 4325 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 981 | 193 | 1174 | 2058 | 387 | 2445 |
|  | 10837 | 1385 | 12222 | 18654 | 8612 | 27266 |
| **(Loss) income from operations** | (1317) | (1054) | (2371) | (5838) | 4501 | (1337) |
| **Other income (expense):** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | 26 | 9 | 35 | 26 | 13 | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (46) | (12) | (58) | (109) | (25) | (134) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | 33 | 5 | 38 | 74 | (3) | 71 |
| **(Loss) income before income tax** | (1304) | (1052) | (2356) | (5847) | 4486 | (1361) |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | 7 |  | 7 | 4 |  | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred |  |  |  |  |  |  |
| **Income tax benefit** | 7 |  | 7 | 4 |  | 4 |
| **Net (loss) income** | $(1297) | $(1052) | $(2349) | $(5843) | $4486 | $(1357) |
| **EBITDA** | $(303) | $(856) | $(1159) | $(3706) | $4885 | $1179 |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** |
|  | **USA Operations** | **Canada Operations** | **Consolidated** | **USA Operations** | **Canada Operations** | **Consolidated** |
| **Operating revenues** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fee revenue | $8321 | $5 | $8326 | $26608 | $8456 | $35064 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reimbursable revenue | 4186 |  | 4186 | 8995 | 37 | 9032 |
|  | 12507 | 5 | 12512 | 35603 | 8493 | 44096 |
| **Operating costs:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fee operating expenses | 7648 | 557 | 8205 | 20541 | 4778 | 25319 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimbursable operating expenses | 4186 |  | 4186 | 8995 | 37 | 9032 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating expenses | 11834 | 557 | 12391 | 29536 | 4815 | 34351 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 2181 | 303 | 2484 | 4011 | 706 | 4717 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 1162 | 244 | 1406 | 2467 | 528 | 2995 |
|  | 15177 | 1104 | 16281 | 36014 | 6049 | 42063 |
| **(loss) income from operations** | (2670) | (1099) | (3769) | (411) | 2444 | 2033 |
| **Other income (expense):** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | 89 | 16 | 105 | 188 | 30 | 218 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (29) | (10) | (39) | (65) | (20) | (85) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | 45 | (19) | 26 | 230 | (25) | 205 |
| **(Loss) income before income tax** | (2565) | (1112) | (3677) | (58) | 2429 | 2371 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | 131 |  | 131 | (71) |  | (71) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred |  |  |  |  |  |  |
| **Income tax benefit (expense)** | 131 |  | 131 | (71) |  | (71) |
| **Net (loss) income** | $(2434) | $(1112) | $(3546) | $(129) | $2429 | $2300 |
| **EBITDA** | $(1463) | $(874) | $(2337) | $2286 | $2947 | $5233 |

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The following tables present the Company's total assets, net property and equipment, capital expenditures and right of use assets disaggregated by operating segment (in thousands):

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| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,**<br>**2024** |
| Total Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;United States | $38949 | $21257 |
| &nbsp;&nbsp;&nbsp;&nbsp;Canada | 6735 | 9613 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets | $45684 | $30870 |

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| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,**<br>**2024** |
| Net Property and Equipment |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;United States | $9443 | $10818 |
| &nbsp;&nbsp;&nbsp;&nbsp;Canada | 1887 | 2161 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $11330 | $12979 |

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| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **June 30,** <br>**2024** |
| Capital Expenditures |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;United States | $683 | $906 |
| &nbsp;&nbsp;&nbsp;&nbsp;Canada |  | 863 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Capital Expenditures | $683 | $1769 |

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| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,**<br>**2024** |
| Net Right-of-use Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;United States | $1489 | $1881 |
| &nbsp;&nbsp;&nbsp;&nbsp;Canada | 1070 | 1121 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $2559 | $3002 |

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The reconciliation of the Company's EBITDA to net (loss) income which are the most directly comparable GAAP financial measures, are provided in the following tables (in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  | **2025 US** | **2025 CA** | **2025 Consol.** | **2024 US** | **2024 CA** | **2024 Consol.** |
| Net loss | $(1297) | $(1052) | $(2349) | $(2434) | $(1112) | $(3546) |
| Depreciation and amortization | 981 | 193 | 1174 | 1162 | 244 | 1406 |
| Interest expense (income), net | 20 | 3 | 23 | (60) | (6) | (66) |
| Income tax benefit | (7) |  | (7) | (131) |  | (131) |
| &nbsp;&nbsp;&nbsp;&nbsp;EBITDA | $(303) | $(856) | $(1159) | $(1463) | $(874) | $(2337) |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025 US** | **2025 CA** | **2025 Consol.** | **2024 US** | **2024 CA** | **2024 Consol.** |
| Net (loss) income | $(5843) | $4486 | $(1357) | $(129) | $2429 | $2300 |
| Depreciation and amortization | 2058 | 387 | 2445 | 2467 | 528 | 2995 |
| Interest income, net | 83 | 12 | 95 | (123) | (10) | (133) |
| Income tax (benefit) expense | (4) |  | (4) | 71 |  | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;EBITDA | $(3706) | $4885 | $1179 | $2286 | $2947 | $5233 |

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**5. DEBT**

**Dominion Loan Agreement** 

On September 30, 2019, the Company entered into a Loan and Security Agreement with Dominion Bank, a Texas state bank ("Dominion Bank"). On September 30, 2023, the Company entered into a Fifth Loan Modification Agreement (the "Fifth Modification

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Agreement") to the Loan and Security Agreement (as amended by (i) that certain Loan Modification Agreement dated as of September 30, 2020, (ii) that certain Second Loan Modification Agreement dated as of September 30, 2021, (iii) that certain Third Loan Modification Agreement dated as of September 30, 2022, (iv) that certain Fourth Modification Agreement dated as of March 21, 2023, and (v) the Fifth Modification Agreement, the "Loan Agreement"). The Loan Agreement provided for a secured revolving credit facility (the "Revolving Credit Facility") in an amount up to the lesser of (I) an amount equal to the Borrowing Base or (II) $5 million. The Company's obligations under the Loan Agreement were secured by a Certificate of Deposit with Dominion Bank for $5 million (the "Deposit") in the Company's collateral account. On May 2, 2024, the collateral deposit of $5 million was released and the Loan Agreement was terminated.

**Dominion Letters of Credit**

As of June 30, 2025, the Company has no outstanding letters of credit.

**Other Indebtedness**

As of June 30, 2025, the Company has three short-term notes payable to finance companies for various insurance premiums totaling $0.8 million. As of December 31, 2024, the Company had one outstanding short-term note payable to a finance company for various insurance premiums totaling $168,000.

In addition, the Company leases certain seismic recording equipment and vehicles under leases classified as finance leases. The Company's Condensed Consolidated Balance Sheet as of June 30, 2025, and December 31, 2024, include finance leases of $2.0 million and $2.4 million, respectively.

**Maturities and Interest Rates of Debt**

The following tables set forth the aggregate principal amount (in thousands) under the Company's outstanding notes payable and the interest rates as of June 30, 2025, and December 31, 2024:

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| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| Notes payable to finance company for insurance |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Aggregate principal amount outstanding | $847 | $168 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rates 6.35% and 9.47% |  |  |

---

The aggregate maturities of finance leases as of June 30, 2025, are as follows (in thousands):

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| | |
|:---|:---|
| July 2025 - June 2026 | $876 |
| July 2026 - June 2027 | 750 |
| July 2027 - June 2028 | 338 |
| July 2028 - June 2029 | 39 |
| July 2029 - June 2030 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Obligations under finance leases | $2003 |

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Interest rates on these leases range from 4.86% to 8.74%.

**6. LEASES**

The Company leases certain vehicles, seismic recording equipment, real property and office equipment under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating lease or finance lease for financial reporting purposes. The majority of our operating leases are non-cancelable operating leases for office and shop space in Midland and Plano Texas, and Calgary, Alberta. There have been no material changes to our leases since the Company's most recent Annual Report on Form 10-K that was filed with the SEC on April 2, 2025.

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Maturities of lease liabilities as of June 30, 2025, are as follows (in thousands):

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| | | |
|:---|:---|:---|
|  | **Operating Leases** | **Finance Leases** |
| July 2025 - June 2026 | $1297 | $979 |
| July 2026 - June 2027 | 1067 | 798 |
| July 2027 - June 2028 | 285 | 346 |
| July 2028 - June 2029 | 229 | 39 |
| July 2029 - June 2030 | 95 |  |
| Thereafter |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total payments under lease agreements | 2973 | 2162 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less imputed interest | (212) | (159) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total lease liabilities | $2761 | $2003 |

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**7. COMMITMENTS AND CONTINGENCIES** 

From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. Although the Company cannot predict the outcomes of any such legal proceedings, management believes that the resolution of pending legal actions will not have a material adverse effect on the Company's financial condition, results of operations or liquidity, as the Company believes it is adequately indemnified and insured.

Additionally, the Company experiences contractual disputes with its clients from time to time regarding the payment of invoices or other matters. While the Company seeks to minimize these disputes and maintain good relations with its clients, the Company has experienced in the past, and may experience in the future, disputes that could affect its revenues and results of operations in any period.

**8. NET INCOME PER SHARE** 

Basic income per share is computed by dividing the net income by the weighted average shares outstanding. Diluted income per share is computed by dividing the net income by the weighted average diluted shares outstanding.

A $0.32 per share special cash dividend on the Company's common stock was declared on March 28, 2024, and paid on May 6, 2024 to stockholders of record as of the close of business on April 22, 2024. The aggregate payment was approximately $9.9 million.

The computation of basic and diluted income per share (in thousands, except share and per share data) was as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2024** | **2025** | **2024** |
| Net (loss) income | $(2349) | $(3546) | $(1357) | $2300 |
| Weighted average common shares outstanding |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 30986929 | 30815443 | 30985212 | 30813886 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dilutive common stock options, restricted stock unit awards and restricted stock awards |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 30986929 | 30815443 | 30985212 | 30813886 |
| Basic (loss) income per share of common stock | $(0.08) | $(0.12) | $(0.04) | $0.07 |
| Diluted (loss) income per share of common stock | $(0.08) | $(0.12) | $(0.04) | $0.07 |

---

The Company had a net loss for the three months ended June 30, 2025, and 2024, and for the six months ended June 30, 2025. As a result, all stock options, restricted stock unit awards and restricted stock awards were anti-dilutive and excluded from weighted average shares used in determining the diluted loss per share of common stock for those periods. The Company had net income for the six months ended June 30, 2024, however due to stock valuation at June 30, 2024, any associated stock options, restricted stock unit awards and restricted stock awards were anti-dilutive and were excluded from weighted average shares used in determining the diluted income per share of common stock for that period.

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The following weighted average numbers of stock options, restricted stock unit awards and restricted stock awards have been excluded from the calculation of diluted loss per share of common stock, as their effect would be anti-dilutive for the three and six months ended June 30, 2025 and 2024:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2024** | **2025** | **2024** |
| Restricted stock units | 82721 | 3187 | 87366 | 1593 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total  | 82721 | 3187 | 87366 | 1593 |

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**9. INCOME TAXES**

For the three and six months ended June 30, 2025, the Company's effective tax rates was 0.3%. For the three and six months ended June 30, 2024, the Company's effective tax rates were 3.6% and 3.0%, respectively. The Company's nominal effective tax rate for the periods above was due to the presence of net operating loss carryovers and adjustments to the valuation allowance on deferred tax assets.

The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over an extended amount of time. Such objective evidence limits the ability to consider other subjective evidence, such as projections for taxable earnings.

The Company has recorded valuation allowances against the associated deferred tax assets for the amounts it deems are not more likely than not realizable. Based on management's belief that not all the net operating losses are realizable, a federal valuation allowance and additional state valuation allowances were maintained during the three and six months ended June 30, 2025 and 2024. In addition, due to the Company's recent operating losses and valuation allowances, the Company may recognize reduced or no tax benefits on future losses on the condensed consolidated financial statements. The amount of the valuation allowances considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth.

**10. SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION**

**Contract Assets (in thousands)**

Contract assets were $0.4 million and $4.3 million at January 1, 2025 and 2024, respectively. The Company's contract assets incurred to fulfill contracts with customers at June 30, 2025 and 2024, were $7.5 million and $3.7 million, respectively.

Contract assets at June 30, 2025, compared to January 1, 2025, increased primarily as a result of new projects for clients with large third party reimbursables where data had not yet been recorded. Contract assets at June 30, 2024, compared to January 1, 2024, decreased primarily as a result of the completion of several projects during that six month period that had deferred fulfillment costs at January 1, 2025.

The amount of total contract assets amortized for the six months ended June 30, 2025, and 2024, was $1.9 million and $12.9 million, respectively. There were no material impairment losses incurred during these periods.

**Deferred Revenue (in thousands)**

Deferred revenue was $1.6 million and $11.8 million at January 1, 2025 and 2024, respectively. The Company's deferred revenue at June 30, 2025 and 2024 was $17.9 million and $5.7 million, respectively.

Deferred revenue at June 30, 2025 compared to January 1, 2025 increased primarily as a result of new projects for clients with large third party reimbursables where data had not yet been recorded. Deferred revenue at June 30, 2024, compared to January 1, 2024, decreased primarily as a result of completing projects for clients with prepayments for third party reimbursables.

Revenue recognized for the six months ended June 30, 2025 and 2024 that was included in the contract liability balance at the beginning of 2025 and 2024 was $1.6 million and $11.4 million, respectively.

**Accounts Receivable (in thousands)**

Accounts receivable related to contracts with customers was $9.9 million and $12.5 million at January 1, 2025 and 2024, respectively.

Accounts receivable related to contracts with customers was $3.5 million and $4.4 million at June 30, 2025 and 2024, respectively.

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**Related Party Transactions**

For the three and six months ended June 30, 2025, the Company incurred related party expenses totaling approximately $21,000 and $95,000, respectively. These are charges by various commonly controlled companies of Wilks Brothers, LLC, the holder of approximately 80% of the Company's outstanding stock. All transactions for the year consisted of trucking charges. As of June 30, 2025, the Company had approximately $21,000 outstanding related party accounts payable.

For the three and six months ended June 30, 2024, the Company incurred related party expenses totaling approximately $0 and $106,000, respectively. These transactions consisted of trucking charges of $97,000 and client hosting expenses of $9,000. For the three and six months ended June 30, 2024, the Company received related party revenue of $9,000 and $14,000, respectively, for partial use of leased office space.

**11. SUBSEQUENT EVENTS**

On August 8, 2025, Dawson Operating LLC ("Dawson Operating"), entered into an Equipment Purchase Agreement, dated August 8, 2025 (the "Purchase Agreement"), with GTC, Inc., a wholly-owned subsidiary of Geospace Technologies Corporation ("GTC"), pursuant to which, among other things, Dawson Operating agreed to acquire single point node channels from GTC. Subject to the terms and conditions of the Purchase Agreement, the equipment is to be delivered in three shipments commencing in August 2025, with the final shipment scheduled for delivery by early January 2026.

The Purchase Agreement provides that, subject to the terms and conditions set forth therein, Dawson Operating will pay to GTC an aggregate purchase price of approximately $24.2 million, as follows: (i) approximately $4.8 million was paid in cash in connection with the execution of the Purchase Agreement; (ii) approximately $1.2 million will be payable in cash upon acceptance of the third and final delivery of the equipment; and (iii) approximately $18.2 million in the aggregate will be financed by the delivery of three separate thirty-six (36) month promissory notes each with a fixed interest rate of 8.75% (each, a "Note" and collectively, the "Notes") payable by Dawson Operating and the Company, jointly and severally, to GTC, with each Note to be issued in connection with the Dawson Operating's acceptance of one of the three equipment deliveries.

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**Forward Looking Statements**

Statements other than statements of historical fact included in this Form 10-Q that relate to forecasts, estimates or other expectations regarding future events, including without limitation, statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" regarding technological advancements and our financial position, business strategy, and plans and objectives of our management for future operations, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). When used in this Form 10-Q, words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors. These factors include, but are not limited to, risks relating to the efficacy of the purchased single node channels; the risk that the delivery of the equipment may not be delivered in a timely manner or at all; the Company's ability to execute its business strategies and plans for growth; the failure to operationalize the acquired equipment in a timely manner or at all; risks associated with the Company's ability to finance the transaction contemplated by the Purchase Agreement; our status as a controlled public company, which exempts us from certain corporate governance requirements; the limited market for our common stock; the impact of general economic, industry, market or political conditions, including tariffs; dependence upon energy industry spending; changes in exploration and production spending by our customers and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of our customers, particularly during extended periods of low prices for crude oil and natural gas; the volatility of oil and natural gas prices and markets; changes in economic conditions; surplus in the supply of oil and the ability of the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, to agree on and comply with supply limitations; the potential for contract delays; reductions or cancellations of service contracts; limited number of customers; credit risk related to our customers; reduced utilization; high fixed costs of operations and high capital requirements; industry competition; external factors affecting the Company's crews such as weather interruptions and inability to obtain land access rights of way; whether the Company enters into turnkey or day rate contracts; crew productivity; the availability of capital resources; disruptions in the global economy, including unrest in the Middle East, export controls and financial and economic sanctions imposed on certain industry sectors and parties as a result of the developments in Ukraine and related activities, and whether or not a future transaction or other action occurs that causes the Company to be delisted from Nasdaq and no longer be required to make filings with the Securities and Exchange Commission (the "SEC"). The cautionary statements made in this Form 10-Q should be read as applying to all related forward-looking

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statements wherever they appear in this Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this paragraph. A discussion of these and other factors, including risks and uncertainties, is set forth in the Company's Annual Report on Form 10-K that was filed with the SEC on April 2, 2025 and any subsequent Quarterly Reports on Form 10-Q filed with the SEC. The Company disclaims any intention or obligation to revise any forward-looking statements, whether as a result of new information, future events or otherwise.

**Overview**

We are a leading provider of North American onshore seismic data acquisition services with operations throughout the continental U.S. and Canada. Substantially all of our revenues are derived from the seismic data acquisition services we provide to our clients. Our clients consist of major oil and gas companies, independent oil and gas operators, and providers of multi-client data libraries. In recent years, our primary customer base has consisted of providers of multi-client data libraries. Demand for our services depends upon the level of spending by these companies for exploration, production, development and field management activities, which depends, in a large part, on oil and natural gas prices. Significant fluctuations in domestic oil and natural gas exploration and development activities related to commodity prices, as we have recently experienced, have affected, and will continue to affect, demand for our services and our results of operations, and such fluctuations continue to be the single most important factor affecting our business and results of operations.

Due to the observed increase in demand for large integrated high-resolution, high channel count surveys and improvement to our backlog, we made the decision to make a significant capital investment to purchase new single node channels from a wholly-owned subsidiary of Geospace Technologies Corporation ("GTC"). On August 8, 2025, Dawson Operating LLC ("Dawson Operating"), entered into an Equipment Purchase Agreement, dated August 8, 2025 (the "Purchase Agreement"), with GTC, Inc., pursuant to which, among other things, Dawson Operating agreed to acquire single point node channels from GTC. Subject to the terms and conditions of the Purchase Agreement, the equipment is to be delivered in three shipments commencing in August 2025, with the final shipment scheduled for delivery by early January 2026.

The Purchase Agreement provides that, subject to the terms and conditions set forth therein, Dawson Operating will pay to GTC an aggregate purchase price of approximately $24.2 million, as follows: (i) approximately $4.8 million was paid in cash in connection with the execution of the Purchase Agreement; (ii) approximately $1.2 million will be payable in cash upon acceptance of the third and final delivery of the equipment; and (iii) approximately $18.2 million in the aggregate will be financed by the delivery of three separate thirty-six (36) month promissory notes each with a fixed interest rate of 8.75% (each, a "Note" and collectively, the "Geospace Notes") payable by Dawson Operating and the Company, jointly and severally, to GTC, with each Note to be issued in connection with the Dawson Operating's acceptance of one of the three equipment deliveries. We believe this investment will allow the Company to be a leader in the industry, giving us a competitive advantage for large integrated high-resolution, high channel count surveys currently demanded by the exploration & production efforts of our customers.

We deployed one large channel crew at the beginning of April, which should keep that crew highly utilized throughout the end of the year. We continue to improve our backlog and have multiple small channel crew jobs contracted in the third quarter for quick deployment of our recently purchased equipment.

While our revenues are mainly affected by the level of client demand for our services, our revenues are also affected by the pricing for our services that we negotiate with our clients and the productivity and utilization level of our data acquisition crews. Factors impacting productivity and utilization levels include, without limitation: client demand, commodity prices, whether we enter into turnkey or dayrate contracts with our clients, the number and size of crews, the number of recording channels per crew, crew downtime related to inclement weather, delays in acquiring land access permits, agricultural or hunting activity, holiday schedules, short winter days, crew repositioning and equipment failure. Additionally, revenues for our Canadian operations are seasonally limited to the winter season due to rules regarding surface conditions. To the extent we experience these factors, our operating results may be affected from quarter to quarter. Consequently, our efforts to negotiate more favorable contract terms in our supplemental service agreements, mitigate permit access delays and improve overall crew productivity may contribute to growth in our revenues.

**Results of Operations**

*U.S. Fee Revenues*. Acquisition revenues for the second quarter of 2025 increased 1.0% to $8.4 million compared to $8.3 million for the same period of 2024. The minimal increase was primarily due to similar crew utilization. Acquisition revenues for the first six months of 2025 decreased 58.2% to $11.1 million compared to $26.6 million for the same period of 2024. The decrease was primarily due to a decrease in crew utilization in the first quarter of 2025 compared to 2024.

*Canadian Fee Revenues.* Acquisition revenues for the second quarter of 2025 increased to $331,000 compared to $5,000 for the same period of 2024. Acquisition revenues for the first six months of 2025 increased 52.1% to 12.9 million compared to $8.5 million for the same

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period of 2024. The increase in both periods was primarily due to completion of projects during the second quarter of 2025 in addition to increased crew utilization for the first six months of 2025, compared to the same period of 2024.

*Total Revenues.* Revenues for the second quarter of 2025 were $9.9 million compared to $12.5 million for the same period of 2024. Total revenues included a decrease of $3.1 million in reimbursable revenues. Revenues for the first six months of 2025 were $25.9 million compared to $44.1 million for the same period of 2024. Total revenues included a decrease of $7.1 million in reimbursable revenues.

*U.S. Fee Operating Expenses.* Acquisition expenses for the second quarter of 2025 decreased 11.9% to $6.7 million compared to $7.6 million for the same period of 2024. The decrease was primarily due to improved efficiency in our operations. Acquisition expenses for the first six months of 2025 decreased 44.7% to $11.4 million from $20.5 million for the same period of 2024. The decrease was primarily due to a decrease in crew utilization.

*Canadian Fee Operating Expenses.* Acquisition expenses for the second quarter of 2025 increased 54.2% to $0.9 million compared to $0.6 million for the same period of 2024. The increase was primarily due to an overall increase in crew production and utilization during the period. Acquisition expenses for the first six months of 2025 increased 50.8% to $7.2 million from $4.8 million for the same period of 2024. The increase was primarily due to increased crew utilization.

*Reimbursable Revenues and Costs.* These revenues and expenses are passed through to our clients and are job specific and vary significantly from year to year. The costs are agreed to by our clients prior to contracting with outside vendors for the various tasks.

*General and Administrative Expenses*. During the second quarter of 2025, general and administrative expenses decreased 6.2% to $2.3 million compared to $2.5 million for the same period of 2024. During the first six months of 2025 general and administrative expenses decreased 8.3% to $4.3 million compared to $4.7 million for the same period of 2024. The decrease was primarily due to our focus on cost reduction initiatives.

*Depreciation and Amortization Expense*. Depreciation and amortization expenses for the second quarter and first six months of 2025 totaled $1.2 million and $2.4 million, respectively, compared to $1.4 million and $3.0 million for the same periods of 2024. Depreciation expenses decreased in 2025 compared to 2024 primarily due to multiple years of reduced capital expenditures.

*Total Operating Costs.* Total operating costs for the second quarter of 2025 were $12.2 million, representing a 24.9% decrease from the same period of 2024. The operating costs for the first six months of 2025 were $27.3 million, representing a 35.2% decrease from the same period of 2024. The decrease in operating costs for the second quarter and first six months of 2025 compared to 2024 was primarily due to the factors described above.

*Income Taxes*. Income tax benefits for the second quarter and first six months of 2025 were $7,000 and $4,000, respectively, compared to income tax benefit of $131,000 for the second quarter of 2024 and income tax expense of $71,000 for the first six months of 2024. These amounts represent effective tax rates of 0.3% for the second quarter and first six months of 2025, compared to 3.6% and 3.0% for the same periods of 2024. The Company's nominal effective tax rate for the periods above was due to the presence of net operating loss carryovers and adjustments to the valuation allowance on deferred tax assets.

Our effective tax rates differ from the statutory federal rate of 21.0% for certain items such as state and local taxes, valuation allowances, and non-deductible expenses. For further information, see Note 9 of the Notes to the Condensed Consolidated Financial Statements.

**Use of EBITDA (a Non-GAAP measure)**

We define EBITDA as net income (loss) plus interest expense, interest income, income taxes, depreciation and amortization expense and other unusual items. Our management uses EBITDA, further adjusted for other unusual items (Adjusted EBITDA), when applicable, as a supplemental financial measure to assess:

● the financial performance of our assets without regard to financing methods, capital structures, taxes or historical cost basis;

● our operating performance over time in relation to other companies that own similar assets and that we believe calculate EBITDA in a similar manner; and

● the ability of our assets to generate cash sufficient for us to pay potential interest costs.

We also understand that such data are used by investors to assess our performance. However, the term EBITDA is not defined under generally accepted accounting principles ("GAAP"), and EBITDA is not a measure of operating income or operating performance presented

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in accordance with GAAP. When assessing our operating performance, investors and others should not consider this data in isolation or as a substitute for net income (loss), cash flow from operating activities or other cash flow data calculated in accordance with GAAP. In addition, our EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since other companies may not calculate EBITDA in the same manner as us. Further, the results presented by EBITDA cannot be achieved without incurring the costs that the measure excludes: interest, taxes, depreciation and amortization, and other unusual items. For the three and six months ended June 30, 2025, and 2024, there were no unusual items and therefore Adjusted EBITDA and EBITDA were equal, and only EBITDA is presented.

The reconciliation of our EBITDA to our Net (loss) income and net cash provided by operating activities, which are the most directly comparable GAAP financial measures, are provided in the following tables (in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  | **2025 US** | **2025 CA** | **2025 Consol.** | **2024 US** | **2024 CA** | **2024 Consol.** |
| Net loss | $(1297) | $(1052) | $(2349) | $(2434) | $(1112) | $(3546) |
| Depreciation and amortization | 981 | 193 | 1174 | 1162 | 244 | 1406 |
| Interest expense (income), net | 20 | 3 | 23 | (60) | (6) | (66) |
| Income tax benefit | (7) |  | (7) | (131) |  | (131) |
| &nbsp;&nbsp;&nbsp;&nbsp;EBITDA | $(303) | $(856) | $(1159) | $(1463) | $(874) | $(2337) |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025 US** | **2025 CA** | **2025 Consol.** | **2024 US** | **2024 CA** | **2024 Consol.** |
| Net (loss) income | $(5843) | $4486 | $(1357) | $(129) | $2429 | $2300 |
| Depreciation and amortization | 2058 | 387 | 2445 | 2467 | 528 | 2995 |
| Interest income, net | 83 | 12 | 95 | (123) | (10) | (133) |
| Income tax (benefit) expense | (4) |  | (4) | 71 |  | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;EBITDA | $(3706) | $4885 | $1179 | $2286 | $2947 | $5233 |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  | **2025 US** | **2025 CA** | **2025 Consol.** | **2024 US** | **2024 CA** | **2024 Consol.** |
| Net cash provided by operating activities | $6742 | $8133 | $14875 | $1302 | $4618 | $5920 |
| Changes in working capital and other items | (6805) | (8932) | (15737) | (2251) | (5442) | (7693) |
| Non-cash adjustments to net loss | (240) | (57) | (297) | (514) | (50) | (564) |
| &nbsp;&nbsp;&nbsp;&nbsp;EBITDA | $(303) | $(856) | $(1159) | $(1463) | $(874) | $(2337) |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025 US** | **2025 CA** | **2025 Consol.** | **2024 US** | **2024 CA** | **2024 Consol.** |
| Net cash provided by operating activities | $8286 | $8341 | $16627 | $3298 | $4492 | $7790 |
| Changes in working capital and other items | (11335) | (3345) | (14680) | (278) | (1444) | (1722) |
| Non-cash adjustments to net (loss) income | (657) | (111) | (768) | (734) | (101) | (835) |
| &nbsp;&nbsp;&nbsp;&nbsp;EBITDA | $(3706) | $4885 | $1179 | $2286 | $2947 | $5233 |

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**Liquidity and Capital Resources**

Our principal sources of cash are amounts earned from the seismic data acquisition services we provide to our clients. Our principal uses of cash are the amounts used to provide these services, including expenses related to our operations and acquiring new equipment. Accordingly, our cash position depends (as do our revenues) on the level of demand for our services. Historically, cash generated from our operations along with cash reserves have been sufficient to fund our working capital requirements and, to some extent, our capital expenditures. Management believes cash flow from operations, cash on hand and working capital are sufficient to fund operating and investing cash flow requirements, as well as obligations under the Geospace Notes.

*Cash Flows*. Net cash provided by operating activities was $16.6 million for the six months ended June 30, 2025, compared to net cash provided by operating activities of $7.8 million for the same period of 2024. This increase was primarily due to an increase in deferred revenue.

Net cash used in investing activities was $0.3 million and $1.3 million for the six months ended June 30, 2025, and 2024, respectively. The decrease in cash used in investing activities between periods of $1.0 million was primarily due to a decrease in cash capital expenditures to $0.7 million for the first six months of 2025 compared to capital expenditures of $1.5 million for the same period of 2024.

Net cash used in financing activities was $1.5 million for the six months ended June 30, 2025, and was primarily comprised of principal payments of $1.1 million and $0.4 million under our notes payable and finance leases, respectively. Net cash used in financing activities was

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$11.1 million for the six months ended June 30, 2024, and was primarily comprised of dividends paid of $9.9 million, principal payments of $0.8 million and $0.3 million under our notes payable and finance leases, respectively.

*Capital Expenditures*. The Board of Directors approved the Purchase Agreement to acquire new single node channels for an aggregate purchase price of approximately $24.2 million, paid as follows: (i) approximately $4.8 million paid in cash in connection with the execution of the Purchase Agreement; (ii) approximately $1.2 million will be payable in cash upon acceptance of the third and final delivery of the equipment; and (iii) approximately $18.2 million in the aggregate will be financed by the Geospace Notes, payable by Dawson Operating and the Company, jointly and severally, to GTC, with each Note to be issued in connection with the Dawson Operating's acceptance of one of the three equipment deliveries.

For the six months ended June 30, 2025, we have spent $0.7 million on capital expenditures, primarily for rolling stock and maintenance capital requirements. Historically, we have funded most of our capital expenditures through cash flow from operations, cash reserves, equipment term loans and finance leases. Under the Purchase Agreement, we are funding our purchase of new single node channels utilizing vendor financing in the form of the Geospace Notes.

*Capital Resources*. Historically, we have primarily relied on cash flows from operations, cash reserves and borrowings from commercial banks to fund our working capital requirements. In connection with the Purchase Agreement, we have agreed to the terms under the Geospace Notes.

*Special Cash Dividend*. Declared on March 28, 2024, the $0.32 per share special cash dividend on the Company's common stock was paid on May 6, 2024 to stockholders of record as of the close of business on April 22, 2024. The aggregate payment was approximately $9.9 million.

**Loan Agreement**

*Dominion Credit Facility.* On September 30, 2019, we entered into a Loan and Security Agreement with Dominion Bank, a Texas state bank ("Dominion Bank"). On September 30, 2023, we entered into a Fifth Loan Modification Agreement (the "Fifth Modification Agreement") to the Loan and Security Agreement (as amended by (i) that certain Loan Modification Agreement dated as of September 30, 2020, (ii) that certain Second Loan Modification Agreement dated as of September 30, 2021, (iii) that certain Third Loan Modification Agreement dated as of September 30, 2022, (iv) that certain Fourth Modification Agreement dated as of March 21, 2023, and (v) the Fifth Modification Agreement, the "Loan Agreement"). The Loan Agreement provided for a secured revolving credit facility (the "Revolving Credit Facility") in an amount up to the lesser of (I) an amount equal to the Borrowing Base or (II) $5 million. Our obligations under the Loan Agreement was secured by a Certificate of Deposit with Dominion Bank for $5 million (the "Deposit") in our collateral account. On May 2, 2024, the collateral deposit of $5 million was released and the Loan Agreement was terminated.

*Dominion Letters of Credit.* As of June 30, 2025, we have no outstanding letters of credit.

**Geospace Notes**

In connection with the Purchase Agreement, we have agreed to the terms under the Geospace Notes. We executed our first Note under the Geospace Notes on August 8, 2025, for approximately $3.6 million. We anticipate executing our second Note in November 2025 for approximately $10.9 million and executing our third Note in January 2026 for approximately $3.7 million. Each Note will be for a term of 36 months with a fixed interest rate of 8.75%.

**Other Indebtedness**

As of June 30, 2025, we have three outstanding short-term notes payable to finance companies for various insurance premiums totaling $0.8 million. As of December 31, 2024, we had one outstanding short-term note payable to a finance company for various insurance premiums totaling $168,000.

In addition, we lease certain seismic recording equipment and vehicles under leases classified as finance leases. Our Condensed Consolidated Balance Sheet as of June 30, 2025 and December 31, 2024, include finance leases of $2.0 million and $2.4 million, respectively.

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**Maturities and Interest Rates of Debt**

The following tables set forth the aggregate principal amount (in thousands) under our outstanding notes payable and the interest rates as of June 30, 2025, and December 31, 2024:

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| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| Notes payable to finance company for insurance |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Aggregate principal amount outstanding | $847 | $168 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rates 6.35% and 9.47% |  |  |

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The aggregate maturities of finance leases as of June 30, 2025, are as follows (in thousands):

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| | |
|:---|:---|
| July 2025 - June 2026 | $876 |
| July 2026 - June 2027 | 750 |
| July 2027 - June 2028 | 338 |
| July 2028 - June 2029 | 39 |
| July 2029 - June 2030 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Obligations under finance leases | $2003 |

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Interest rates on these leases range from 4.86% to 8.74%.

**Contractual** **Obligations**

We believe that our capital resources, including our cash on hand, short-term investments and cash flow from operations will be adequate to meet our current operational needs. We believe that we will be able to finance our 2025 capital expenditures through cash flow from operations, borrowings from commercial lenders and the Geospace Notes. However, our ability to satisfy working capital requirements, meet debt repayment obligations, and fund future capital requirements will depend principally upon our future operating performance, which is subject to the risks inherent in our business, and will also depend on the extent to which the current economic climate adversely affects the ability of our customers, and/or potential customers, to promptly pay amounts owing to us under their service contracts with us.

**Critical Accounting Policies**

Information regarding our critical accounting policies and estimates is included in Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024.

**Recently Issued Accounting Pronouncements**

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures* ("ASU 2023-09")*.* ASU 2023-09 seeks to improve transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures. The updated guidance is effective for annual periods after January 1, 2025, and will be reflected through additional disclosures in our 2025 10-K.

In November 2024, the FASB issued ASU No. 2024-03, *Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,* ASU 2024-03 enhances the disclosures required for certain expense captions in the Company's annual and interim consolidated financial statements. This ASU is effective prospectively or retrospectively for fiscal years beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of this standard on its disclosures

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

There has been no material change in our market risk profile during the three months ended June 30, 2025. For additional information about our market risk profile, refer to "Quantitative and Qualitative Disclosures About Market Risk" in Item 7A. in Part II of our Annual Report on Form 10-K for the year ended December 31, 2024.

We are exposed to certain market risks arising from the use of financial instruments in the ordinary course of business. These risks arise primarily as a result of potential changes to operating concentration of credit risk and changes in interest rates. We have not entered into any hedge arrangements, commodity swap agreements, commodity futures, options or other derivative financial instruments. We also conduct business in Canada, which subjects our results of operations and cash flows to foreign currency exchange rate risk.

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**ITEM 4. CONTROLS AND PROCEDURES**

**Management's Evaluation of Disclosure Controls and Procedures**

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive and financial officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report. Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer concluded that, as of June 30, 2025, our disclosure controls and procedures were effective, in all material respects, with regard to the recording, processing, summarizing and reporting, within the time periods specified in the SEC's rules and forms, for information required to be disclosed by us in the reports that we file or submit under the Exchange Act. Our disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our President and Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

**Changes in Internal Control Over Financial Reporting**

There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the three and six months ended June 30, 2025, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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**PART II. OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

Refer to Note 7 – Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for a discussion of the Company's legal proceedings.

**ITEM 1A. RISK FACTORS**

There have been no material changes in the significant risk factors that may affect our business, results of operations or liquidity as described in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

None.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. MINE SAFETY DISCLOSURES**

Not applicable.

**ITEM 5. OTHER INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) None.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) During the three months ended June 30, 2025, none of the Company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408(c) of Regulation S-K).

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**ITEM 6. EXHIBITS**

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| | |
|:---|:---|
| **Number** | **Exhibit** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1\*\*\* | [Equipment Purchase Agreement, dates as of August 8, 2025, by and between Dawson Operating LLC and GTC, Inc.](dwsn-20250630xex10d1.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2\* | [Purchase Money Security Agreement, dated as of August 8, 2025, by and between Dawson Operating LLC and GTC, Inc.](dwsn-20250630xex10d2.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3\* | [Form of Secured Promissory Note among Dawson Operating LLC, Dawson Geophysical Company and GTC, Inc.](dwsn-20250630xex10d3.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31.1\* | [Certification of Chief Executive Officer of Dawson Geophysical Company pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.](dwsn-20250630xex31d1.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31.2\* | [Certification of Chief Financial Officer of Dawson Geophysical Company pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.](dwsn-20250630xex31d2.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32.1\*\* | [Certification of Chief Executive Officer of Dawson Geophysical Company pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.](dwsn-20250630xex32d1.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32.2\*\* | [Certification of Chief Financial Officer of Dawson Geophysical Company pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.](dwsn-20250630xex32d2.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;101.INS\* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;101.SCH\* | Inline XBRL Taxonomy Extension Schema Document. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;101.DEF\* | Inline XBRL Taxonomy Extension Definition. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;104\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

\*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Filed herewith.

\*\* Furnished herewith

\*\*\* Portions of this exhibit have been omitted in compliance with Regulation S-K Item 601(b)(10)(iv) because the Company has determined that the information is not material and is the type that the Company treats s private or confidential.

[**Table of Contents**](#TOC)

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | DAWSON GEOPHYSICAL COMPANY | DAWSON GEOPHYSICAL COMPANY |
| DATE: August 13, 2025 | By: | /s/ William A. Clark |
|  |  | William A. Clark |
|  |  | President and Chief Executive Officer |
| DATE: August 13, 2025 | By: | /s/ Ian Shaw |
|  |  | Ian Shaw |
|  |  | Chief Financial Officer |

---

## Exhibit 10.1

**Exhibit 10.1**

**Certain information identified by [\*CONFIDENTIAL\*] has been excluded from this exhibit because it is both not material and is the type that the registrant treats as confidential**

**EQUIPMENT PURCHASE AGREEMENT**

THIS EQUIPMENT PURCHASE AGREEMENT (the "**Agreement**"), dated as of August 8, 2025 (the "**Effective Date**"), is entered into by and between the following parties **GTC, INC.**, a Texas corporation, whose business address is 7007 Pinemont Drive, Houston, Texas, USA 77040 (the "**Seller**"); and **Dawson Operating LLC**, a Texas limited liability company, whose business address is 508 W. Wall, Suite 800, Midland, Texas 79701 (the "**Buyer**"). The Seller and the Buyer are collectively referred to as the "**Parties**" and each a "**Party**". Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in <u>Section 13</u> of this Agreement.

WHEREAS, the Buyer wishes to purchase certain equipment from Seller, as described on <u>Exhibit A</u> attached hereto (the "**Equipment**"), and the Seller wishes to sell the Equipment to the Buyer on the terms and conditions set out in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

1. SALE AND PURCHASE OF THE EQUIPMENT

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.Subject to the terms and conditions set forth herein, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller's right, title, and interest in, to the Equipment, free and clear of all Encumbrances, except as provided in this Agreement or in any Transaction Document.

2. THE PURCHASE PRICE

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Purchase Price</u>. The aggregate purchase price for the Equipment shall be $24,197,825 (the "**Purchase Price**"). The Purchase Price shall be paid as set forth in this Article 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Cash Payment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Upon the execution of this Agreement, Buyer shall deliver to the Seller, by wire transfer of immediately available funds to an account designated by the Seller in writing, an amount equal to $4,839,565.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Upon the delivery and acceptance by Buyer of the Third Channel Delivery , the Buyer shall deliver to the Seller, by wire transfer of immediately available funds to an account designated by the Seller in writing, an amount equal to $1,209,891.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Promissory Notes</u>. The balance of the Purchase Price shall be financed by the delivery of three (3) separate promissory notes, substantially in the form attached hereto as <u>Exhibit B</u> (each, a "**Note** "

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and collectively, the "**Notes**"), each with a term of thirty-six (36) months, bearing interest at a fixed rate of 8.75% APR. Upon acceptance in writing by Buyer of the First Channel Delivery, Buyer will issue to Seller a Note in the original principal amount of $3,605,598 for the First Channel Delivery. Upon acceptance in writing by Buyer of the Second Channel Delivery, Buyer will issue to Seller a Note in the original principal amount of $10,895,325 for the Second Channel Delivery. Upon acceptance in writing by Buyer of the Third Channel Delivery, Buyer will issue to Seller a Note in the original principal amount of $3,647,446 for the Third Channel Delivery.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Buyer may prepay the financed amounts, in whole or in part, at any time without penalty.

3. SHIPMENT AND DELIVERY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.Provided that the payment conditions established in Section 2 have all been met, the Seller shall deliver the Equipment to Buyer Ex Works (EXW) at the Seller's Worksite during Seller's normal business hours, as follows: (i) the First Channel Delivery on or about August 8, 2025; (ii) Second Channel Delivery on or before November 3, 2025, and (iii) Third Channel Delivery on or before January 9, 2026. Seller shall notify Buyer in writing (email being sufficient for this purpose) at least 72 hours before delivering the Equipment. Timely delivery of the Equipment is of importance under this Agreement, and Seller shall exert all reasonable efforts to timely achieve delivery as stipulated herein. If Seller fails to supply the Equipment in full on or before each applicable delivery date, the Buyer may, at the Buyer's sole option, (i) agree to a delivery date different from the one specified in this Section 3, and the Parties shall amend the applicable delivery date under this Agreement accordingly by executing a written amendment agreement, or (ii) terminate this Agreement immediately, by providing written notice to the Seller and exercise any rights and remedies available to Buyer under applicable Laws. Notwithstanding the foregoing, the Parties may mutually agree in writing (email being sufficient for this purpose) that any shortfall in one delivery may be fulfilled in the subsequent delivery. Seller shall not be liable for delay in performance or nonperformance of any of its obligations hereunder, in whole or in part, if such performance is rendered impracticable by the occurrence of any contingency or condition beyond the control of either Seller or Seller's suppliers, including without limitation war, sabotage, embargo, riot or other civil commotion, failure or delay in transportation, act of any government or any court or administrative agency thereof (whether or not such action proves to be invalid) provided that an increase in Seller's or its suppliers' costs due to tariffs shall not relieve Seller of its obligations, labor strikes, accident, fire, explosion, flood or other casualty, shortage of labor, fuel, energy, raw materials or machinery or technical failure (a "Force Majeure Event"). In the event of a Force Majeure Event, Seller shall promptly notify Buyer party in writing, describing the nature of the event and its expected duration. Seller shall use commercially reasonable efforts to mitigate the effects of the Force Majeure Event and to continue performance under this Agreement to the extent reasonably possible. If the Force Majeure Event continues for more than sixty (60) days, Buyer may terminate this Agreement upon notice to Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Buyer has the right, at its sole option, to inspect all or any portion of the Equipment received under this Agreement at any time on or after the delivery date. If Buyer determines, in its sole discretion, that any of the Equipment delivered under this Agreement is damaged, other than as a result of any direct act or omission of Buyer, do not fully conform to the specifications or the warranties in Section 6A, or are otherwise nonconforming with the terms of this Agreement or otherwise defective in any respect ("<u>Nonconforming Equipment</u>") or that the quantity received does not match the quantity specified in the applicable order, Buyer may, at its option:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. reject all or any portion of the Nonconforming Equipment and either (i) receive a refund of the price paid by Buyer for such Nonconforming Equipment plus any inspection, test, shipping, handling, and transportation charges incurred by Buyer, or (ii) require prompt repair or replacement of such Equipment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. if the quantity delivered exceeds the quantity specified in the order, either (i) reject all or any excess Equipment for a refund of the price paid by Buyer for such excess Equipment, plus any inspection, test, shipping, handling, and transportation charges incurred by Buyer, or (ii) or keep all the excess Equipment, provided the price for the relevant order shall be adjusted to include any excess Equipment not rejected by Buyer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. if the quantity delivered is less than the quantity specified in the order, either require the Seller to (i) deliver the missing quantity of Equipment to Buyer at Seller's expense and risk of loss, or (ii) refund the price paid by Buyer for such missing Equipment, together with any charges or expenses incurred by Buyer in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.Risk of loss of the Equipment shall pass to Buyer upon delivery as stipulated in Section 3.A. above. Title to the Equipment included in the First Channel Delivery, Second Channel Delivery and Third Channel Delivery shall pass to the Buyer upon Seller's receipt of the Note associated with the First Channel Delivery, Second Channel Delivery or Third Channel Delivery, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.**[\*CONFIDENTIAL\*]**

4. COVENANTS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Buyer hereby covenants and agrees to provide the following as collateral to secure the payment of the Notes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. A first priority security interest in the **[\*CONFIDENTIAL\*]** Channels purchased under this Agreement effective as of the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. A first lien deed of trust on approximately 39.9 acres of commercial land located in Midland County, Texas to be delivered on or before the Second Channel Delivery; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. A first lien deed of trust on the properties located at 2501 and 2503 Commerce Drive, Midland, Texas to be delivered on or before the Second Channel Delivery (clauses (ii) – (iii) , the "**Properties** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** Any repossession and removal of Equipment shall be without prejudice to any of Seller's other rights and remedies under this Agreement, at law or in equity. Buyer agrees, without further consideration, at any time to do or cause to be done, executed and delivered, all such further acts and instruments (including without limitation financing statements appropriate for filing) as Seller may reasonably request in order to perfect the foregoing security interests and liens.

5. REPRESENTATIONS AND WARRANTIES OF SELLER

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Organization and Authority of Seller</u>. Seller is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Texas. Seller has full corporate power and authority to enter into this Agreement and the other Transaction Documents to which Seller is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and any other Transaction Document to which Seller is a party, the performance by Seller of its obligations hereunder and thereunder, and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate, board, and shareholder action on the part of Seller. This Agreement and the Transaction Documents constitute legal, valid, and binding obligations of Seller enforceable against Seller in accordance with their respective terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>No Conflicts or Consents</u>. The execution, delivery, and performance by Seller of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the certificate of incorporation, by-laws, or other governing documents of Seller; (b) violate or conflict with any provision of any Law or any order, writ, judgment, injunction, decree, stipulation, determination, penalty, or award entered by or with any Governmental Authority ("**Governmental Order**") applicable to Seller, or the Equipment; (c) require the consent, notice, declaration, or filing with or other action by any individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association, or other entity ("**Person**") or require any permit, license, or Governmental Order; or (d) result in the creation or imposition of any charge, claim, pledge, equitable interest, lien, security interest, restriction of any kind, or other encumbrance ("**Encumbrance**") on the Equipment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Title to Purchased Equipment</u>. Seller has good and valid title to all the Equipment, free and clear of Encumbrances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Compliance with Laws</u>. The Equipment shall comply with all applicable laws, regulations, and rules, including without limitation all applicable FCC rules and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Non-Infringement</u>. The Equipment does not and shall not infringe or misappropriate any third party's patent, copyright, trade secret, or other intellectual property rights; provided, however, that this warranty shall not apply to any infringement or misappropriation arising from (i) Buyer's use of the Equipment in combination with other equipment, materials, processes, or methods not provided, approved or authorized by Seller (which authorization may be included in any Seller documentation pertaining to the Equipment), or (ii) modifications to the Equipment made by any party other than Seller or its authorized representatives.

6. WARRANTIES AND REMEDIES; WAIVER OF CONSUMER RIGHTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.Seller warrants to Buyer and its Affiliates that all Equipment delivered under this Agreement shall (i) be new and will not be used or refurbished, (ii) conform to all applicable specifications and perform in accordance with its documentation; (iii) be free from any defects in materials, workmanship, or design; and (iv) be free of any back door, time bomb, Trojan horse, worm, virus or similar malicious code. Seller agrees to replace or to correct any Equipment not conforming to the foregoing requirements when notified by Buyer within **[\*CONFIDENTIAL\*]** after Buyer's acceptance of the Third Channel Delivery. Seller's liability

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to repair is limited to the direct cost to correct the defect, including shipping costs. In the event that Seller fails or is unable to replace or correct any non-conforming Equipment so that it complies with the foregoing warranties, Buyer shall be entitled to a refund of all fees paid for the non-conforming Equipment. These warranties survive any delivery, inspection, acceptance, or payment of or for the Equipment by Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.**[\*CONFIDENTIAL\*]**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.Seller shall not be liable for a breach of the warranty set forth in Section 6.A. to the extent that: (i) the defect is caused by Buyer's failure to follow in all material respects Seller's written instructions as to the storage, installation, commissioning, use or maintenance of the Equipment; (ii) the item has been subjected to material misuse, negligence, or accident; or (iii) Buyer makes any material alterations or repairs of the Equipment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.THE REMEDIES SET FORTH HEREIN SHALL BE BUYER'S SOLE AND EXCLUSIVE REMEDIES AND SELLER'S ENTIRE LIABILITY FOR ANY BREACH OF SELLER'S LIMITED WARRANTIES SET FORTH IN THIS SECTION 6. THE REMEDIES STATED HEREIN FOR ANY SUCH BREACH SHALL BE IN LIEU OF ALL OTHER REMEDIES AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, IN LIEU OF LIABILITY FOR SELLER'S NEGLIGENCE OR FAULT (BUT NOT SELLER'S FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT), AND IN LIEU OF BUYER'S RIGHTS AND REMEDIES UNDER THE TEXAS DECEPTIVE TRADE PRACTICES CONSUMER PROTECTION ACT (CHAPTER 17, TEXAS BUSINESS AND COMMERCE CODE). BUYER HEREBY WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. BUYER REPRESENTS THAT IT HAS CONSULTED WITH AN ATTORNEY OF ITS OWN SELECTION AND VOLUNTARILY CONSENTS TO THIS WAIVER.

7. INDEMNIFICATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Buyer shall indemnify, defend and hold harmless Seller and its representatives, officers, directors, employees, agents, affiliates, successors and permitted assigns against any and all losses, damages, or liabilities, including reasonable attorneys' fees, to the extent incurred by such party, relating to, arising out or resulting from any claim of a third party alleging: (a) breach or non-fulfillment of any representation, warranty or covenant under the Agreement by Buyer or Buyer's personnel; (b) any negligent or more culpable act or omission of Buyer or its personnel (including any recklessness or willful misconduct) in connection with the performance of Buyer's obligations under the Agreement; (c) any bodily injury, death of any person or damage to real or tangible personal property caused by the willful or negligent acts or omissions of Buyer or its personnel; or (d) any failure by Buyer or its personnel to comply with any applicable laws, except in each of clauses (a) – (d) to the extent arising from Seller's bad faith, willful misconduct, fraud, or gross negligence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.Seller shall indemnify, defend, and hold harmless Buyer and its officers, directors, employees, agents, representatives, Affiliates, successors, and permitted assigns (collectively, the "<u>Buyer Indemnified Parties</u>") against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable

------

attorneys' fees, fees, and the costs of enforcing any right to indemnification under this Agreement and the cost of pursuing any insurance providers, incurred by Buyer Indemnified Parties, relating to or resulting from any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, notice of violation, proceeding, litigation, citation, summons, subpoena, or investigation of any nature of a third party relating to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. any breach or non-fulfillment of any representation, warranty, or covenant under this Agreement by Seller or Seller's personnel (excluding breach of warranty as contemplated in Article 6 above, as to which the provisions of Article 6 shall govern);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. any negligent or more culpable act or omission of Seller (including any recklessness or willful misconduct) in connection with the performance of Seller's obligations under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. any bodily injury or death of any person, or damage to real or tangible personal property caused by the acts or omissions of Seller or its personnel and/or caused by any fault or defect in the materials, design or workmanship of the Equipment; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. any failure by Seller or its personnel to comply with any applicable Laws.

8. LIMITATION OF LIABILITY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.EXCEPT FOR SELLER'S INDEMNIFICATION OBLIGATIONS HEREUNDER RELATING TO BREACHES OF SECTION 5E FOR WHICH THERE SHALL BE NO LIMITATION ON LIABILITY AND EXCEPT AS PROVIDED IN THE IMMEDIATELY SUCCEEDING SENTENCE, IN NO EVENT SHALL SELLER'S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED THE TOTAL OF THE AMOUNT PAID UNDER THIS AGREEMENT. THE FOREGOING LIMITATION SHALL NOT APPLY TO THE GROSSLY NEGLIGENT ACTS OR OMISSIONS, WILLFUL MISCONDUCT, OR FRAUD OF SELLER. FOR CLARITY, EXCEPT AS PROVIDED IN THE IMMEDIATELY PRECEEDING SENTENCE AND EXCEPT FOR SELLER'S INDEMNIFICATION OBLIGATIONS HEREUNDER RELATING TO BREACHES OF SECTION 5E FOR WHICH THERE SHALL BE NO LIMITATION ON LIABILITY, SELLER'S LIABILITY UNDER THIS SECTION 8 SHALL ONLY INCLUDE THE PAYMENTS ACTUALLY RECEIVED BY SELLER FOR THE EQUIPMENT PURSUANT TO THIS AGREEMENT AT THE TIME THE CLAIM ACCRUES AND SHALL NOT INCLUDE ANY PREPAYMENTS MADE PURSUANT TO SECTION 2D.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.EXCEPT AS AWARDED TO A THIRD PARTY PURSUANT TO SECTION 7 HEREOF, NEITHER PARTY SHALL BE RESPONSIBLE OR HELD LIABLE TO THE OTHER PARTY FOR PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LIABILITY FOR LOSS OF USE, LOSS OF PROFITS, LOSS OF PRODUCT OR BUSINESS INTERRUPTION. THE PROVISIONS OF THIS SECTION 8.B. SHALL APPLY NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR OTHERWISE AND REGARDLESS OF WHETHER THE LIABILITY OR REMEDIES ARISE IN CONTRACT, WARRANTY, TORT (INCLUDING BUT NOT LIMITED TO NEGLIGENCE OR OTHER FAULT,

------

WHETHER ACTIVE, PASSIVE, SOLE, JOINT OR CONCURRENT) STRICT LIABILITY, PRODUCTS LIABILITY, PROFESSIONAL LIABILITY, INDEMNITY, CONTRIBUTION, STATUTE OR ANY OTHER THEORY OR CAUSE OF ACTION.

9. TERMINATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.Seller or Buyer may terminate this Agreement in case of (a) material breach by the other party in the performance of any obligation, covenant, or liability contained in this Agreement which, for the avoidance of doubt, shall include, but not be limited to, the Buyer's failure to make payment in accordance with the terms of this Agreement and the other Transaction Documents, and (b) dissolution, bankruptcy, insolvency, or liquidation of Buyer or Seller, or appointment of a receiver or trustee for Buyer or Seller or its property.

10. GENERAL

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.This Agreement, including and together with any related exhibits, schedules, attachments, and appendices, constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, regarding such subject matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.Subject to the limitations and other provisions of this Agreement: (a) the representations and warranties of the Parties contained herein shall survive the expiration or earlier termination of this Agreement; and (b) Sections 7, 10 11, 13, of this Agreement, as well as any other provision that, in order to give proper effect to its intent, should survive such expiration or termination, shall survive the expiration or earlier termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.No amendment to, or modification of, this Agreement is effective unless it is in writing and signed by each Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.Neither Party may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.The Seller and the Buyer shall pay their own costs and expenses incurred in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.Any invalidity, illegality or unenforceability of any provision of this Agreement in any jurisdiction, shall not affect the validity, legality or enforceability of the relevant provision in any other jurisdiction, or of any other provision of the Agreement in any jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.No waiver by any Party of any of the provisions of this Agreement shall be effective unless explicitly set forth in writing and signed by the Party so waiving. Any delay or omission by the Parties to exercise any right or remedy under this Agreement shall not be construed to be a waiver of any such right or remedy or any other right or remedy hereunder. All of the rights of the Parties under this Agreement shall be cumulative, except as otherwise specified above, and may be exercised separately or concurrently.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H.If the Buyer is required to pay any sum (including interest) under this Agreement and Buyer fails

------

to pay such sum when due for payment within 30 days, the Buyer agrees to pay Seller a financing fee on such delinquent payments at the rate of (a) 10% per annum or, if lower, (b) the maximum amount permitted by law, such rate to be applicable both before and after the rendering of any judgment to enforce payment of such delinquent payments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I.All notices, requests, consents, claims, demands, waivers, and other communications under this Agreement (each, a "**Notice**") must be in writing and addressed to the other Party at its address set forth below (or to such other address as the receiving Party may designate from time to time in accordance with this section). Unless otherwise agreed herein, all Notices must be delivered by personal delivery, nationally recognized overnight courier, or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a Notice is effective only (a) on receipt by the receiving Party, and (b) if the Party giving the Notice has complied with the requirements of this Section.

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| | |
|:---|:---|
| Notice to Buyer: | 508 W. Wall, Suite 800<br>Midland, Texas 79701 |
|  | Telephone: 817-693-2839 |
| <br>with a copy to (which shall not constitute notice):<br>| Attention: Ian Shaw<br>Email: ian.shaw@wilksbrothers.com<br>Brown Rudnick LLP<br>1 Financial Center<br>Boston, MA 02111<br>Attention: James Bedar, Esq.<br>E-mail: JBedar@brownrudnick.com<br>|
| Notice to Seller: | 7007 Pinemont Drive<br>Houston, Texas, USA 77040 |
|  | Telephone: 713 303 8209 |
|  | Attention: Robert Curda<br>Email: rcurda@geospace.com |

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11. CONFIDENTIALITY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. From time to time during the term of this Agreement, either Party (as the "**Disclosing Party**") may disclose or make available to the other Party (as the "**Recipient**") information about its or its Affiliates' business affairs, goods, services, forecasts, confidential intellectual property rights, trade secrets, third-party confidential information, and other sensitive or proprietary information, such information, as well as the terms of this Agreement, whether orally or in visual, written, electronic, or other form or media, and whether or not marked, designated, or otherwise identified as "confidential" (collectively, "**Confidential Information**"). Confidential Information does not include information that at the time of disclosure:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. is or becomes generally available to and known by the public other than as a result of, directly or indirectly, any breach of this Section 11 by the Recipient or any of its Representatives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. is obtained by the Recipient or its Representatives on a non-confidential basis from a third party that was not legally or contractually prohibited from disclosing such information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. the Recipient establishes by documentary evidence was in the Recipient's or its Representatives'

------

possession prior to disclosure by or on behalf of the Disclosing Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. the Recipient establishes by documentary evidence was or is independently developed by the Recipient or its Representatives without using any of the Disclosing Party's Confidential Information; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. is required to be disclosed pursuant to applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.The Recipient shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. protect and safeguard the confidentiality of the Disclosing Party's Confidential Information with at least the same degree of care as the Recipient would protect its own Confidential Information, but in no event with less than a commercially reasonable degree of care;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. not use the Disclosing Party's Confidential Information, or permit it to be accessed or used, for any purpose other than to exercise its rights or perform its obligations under this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. not disclose any such Confidential Information to any individual or entity, except to the Recipient's Representatives who need to know the Confidential Information to assist the Recipient, or act on its behalf, to exercise its rights or perform its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.This Section 11 shall not apply to the extent that the disclosure or use of information is necessary or appropriate in making any filing or obtaining any consent or approval required for the consummation of the transactions contemplated by this Agreement, including without limitation with the U.S. Securities and Exchange Commission, or to the extent that the disclosure or use of information is required by law, regulation or legal process.

12. GOVERNING LAW; SUBMISSION TO JURISDICTION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to principles of conflicts of laws. Each Party, for itself and its successors and assigns, hereby irrevocably (a) submits to the exclusive jurisdiction of the state and federal courts in Texas, (b) waives, to the fullest extent permitted by law, any objection that it may now or in the future have to the laying of venue of any litigation arising out of or in connection with this Agreement brought in Harris County, Texas, (c) waives any objection it may now or hereafter have as to the venue of any such action or proceeding brought in such court or that such court is an inconvenient forum, and (d) agrees that any legal proceeding against any party to any of this Agreement arising out of or in connection with any of this Agreement may be brought in one of the foregoing courts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.**TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY KNOWINGLY, INTENTIONALLY, IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING** 

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**TO THIS AGREEMENT OR ANY CONDUCT, ACT OR OMISSION OF EITHER PARTY, OR ANY OF THEIR DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH EITHER PARTY, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.**

13. DEFINITIONS

"**Affiliate**" of an entity means any other entity or individual that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such entity.

"**Agreement**" has the meaning set forth in the preamble and includes all schedules, exhibits, and attachments to this Agreement.

"**Buyer**" has the meaning set forth in the preamble of this Agreement.

"**Channels**" means individual seismic data acquisition units, each consisting of Seller's Pioneer™ device.

"**Control**" (and with correlative meanings, the terms "Controlled by" and "under common Control with") means, with respect to any individual or entity, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of another entity, whether through the ownership of voting securities, by contract, or otherwise.

"**Deeds of Trust**" means those certain Deeds of Trust, in the form attached as <u>Exhibit C</u> to this Agreement, to be delivered on or before the date of the Second Channel Delivery, given by Dawson Geophysical Company, a Texas corporation, for the benefit of GTC, Inc. relating to the Properties, as they may from time to time be amended, extended, supplemented, or restated.

"**First Channel Delivery**" means the initial delivery by the Seller to the Buyer of approximately **[\*CONFIDENTIAL\*]** functional and conforming Channels.

"**Governmental Authority**" means any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization, or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations, or orders of such organization or authority have the force of Law), or any arbitrator, court, or tribunal of competent jurisdiction.

"**Law**" means any statute, law, ordinance, regulation, rule, code, constitution, treaty, common law, order, writ, injunction, judgment, decree, or other requirement or rule of law, including those promulgated by any Governmental Authority.

"**Representatives**" means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

"**Second Channel Delivery**" means the delivery by the Seller to the Buyer of approximately **[\*CONFIDENTIAL\*]** functional and conforming Channels, which shall occur following the First Channel Delivery.

"**Seller**" has the meaning set forth in the preamble of this Agreement.

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"**Third Channel Delivery**" means the delivery by the Seller to the Buyer of approximately **[\*CONFIDENTIAL\*]** functional and conforming Channels, to occur after the Second Channel Delivery.

**"Transaction Documents**" means the Purchase Money Security Agreement, the Deed of Trust, the Notes, and all other agreements, documents, instruments or certificates delivered or required to be delivered by any party pursuant to this Agreement.

"**Worksite**" means 7007 Pinemont Drive, Houston, Texas, USA 77040.

[Signature Page Follows]

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**GTC, INC.** **DAWSON OPERATING LLC**

Signature: <u>/s/ Rich Kelley</u> Signature: <u>/s/ Tony Clark</u> 

Name:Rich KelleyName:Tony Clark

Title:President and Chief Executive OfficerTitle:President and CEO

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**EXHIBIT A – EQUIPMENT**

**[\*CONFIDENTIAL\*]** 

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**EXHIBIT B** 

Form of Note

See Exhibit 10.3

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## Exhibit 10.2

**Exhibit 10.2**

**Purchase Money Security Agreement**

This **Purchase Money Security Agreement** (this "<u>Agreement</u>") is dated as of August 8, 2025, by and between **Dawson Operating LLC**, a Texas limited liability company (the "<u>Company</u>"), having an office at 508 West Wall, Suite 800 Midland, TX 79701 and **GTC, Inc.**, a Texas corporation (together with its successors and assigns and subsequent holders of the Secured Indebtedness, the "<u>Secured Creditor</u>"), having its office at 7007 Pinemont Drive, Houston, Texas 77040.

Whereas the Company, together with its parent, Dawson Geophysical Company, a Texas corporation, ("**Parent**") has issued to the Secured Creditor a Secured Promissory Note dated of even date herewith as the first of a series of three secured promissory notes (the "<u>Notes</u>") issued and to be issued to the Company by the Secured Creditor made in connection with the purchase by the Company of the Collateral described herein;

Now, Therefore, in consideration of the premises, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**Grant of Security Interest**. The Company hereby pledges, hypothecates, transfers, grants and assigns to the Secured Creditor, and agrees that the Secured Creditor shall have, a security interest in and lien on the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All equipment purchased by the Company from the Secured Creditor pursuant to that certain Equipment Purchase Agreement dated on or about the date of this Agreement, as such Equipment Purchase Agreement may be amended from time to time, including 100,000 new Pioneer single channel nodes and supporting equipment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All rights of the Company under the Intercompany Leases described below; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All proceeds of the foregoing.

All of the foregoing being referred to herein as the "<u>Collateral</u>." The terms "equipment" and "proceeds" as used herein shall have the meanings specified from time to time in the Uniform Commercial Code as in effect in the State of Texas (the "<u>UCC</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**Obligations Secured**. The Collateral secures the payment in full, when due, of any and all principal, interest, expenses, fees and other sums payable by the Company to the Secured Creditor under the Notes and this Agreement and all reasonable costs and expenses incurred in connection with enforcement and collection thereof, including the reasonable fees, charges and disbursements of outside counsel for the Secured Creditor (the "<u>Secured Indebtedness</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**Representations and Warranties**. The Company represents and warrants to the Secured Creditor that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company has not changed its name in the last three years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company is a limited liability company duly formed and validly existing under the laws of the State of Texas of the United States of America, and the chief executive office of the Company is located at 508 West Wall, Suite 800 Midland, TX 79701;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Collateral constitutes "equipment" in the hands of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) This Agreement does not violate or contravene (i) the certificate of formation or limited liability company agreement of the Company (ii) any material agreement to which the Company is a party or its assets are bound or (iii) any writ, judgment, order or decree of any judicial or administrative body by which the Company or its assets are bound; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) This Agreement creates a valid security interest in favor of the Secured Creditor in the Collateral and, when properly perfected by the filing of a financing statement, shall constitute a valid and perfected, first priority security interest in the Collateral free and clear of all liens, claims, security interests and other encumbrances (except security interests in favor of the Secured Creditor and mechanics' liens, materialmen's liens, warehousemen's liens, carrier liens, and tax liens in each case for amounts that are not delinquent (" <u>Permitted Liens</u> ").

So long as any Secured Indebtedness remains unpaid, the Company shall be deemed to represent and warrant continuously to the Secured Creditor all of the representations and warranties set forth in this Section 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**Maintenance of Collateral and Title**. The Company represents, warrants and covenants to and with the Secured Creditor that it has and will maintain absolute and exclusive title to each and every item of the Collateral, free and clear of all liens, claims, security interests and other encumbrances (except security interests in favor of the Secured Creditor and Permitted Liens). However, the Company may lease the equipment to one or more affiliates of the Company pursuant to intercompany equipment lease agreements (the "<u>Intercompany Leases</u>"). The Company shall ensure that at all times the Intercompany Leases in no way hinder the rights of the Secured Creditor to exercise its rights under this Agreement and that such Intercompany Leases shall make reference to and are subject to this Purchase Money Security Agreement and the rights of the Secured Creditor hereunder in all respects. The Company will warrant and defend unto the Secured Creditor and its successors and assigns title to all of the Collateral purported to be owned by it, at the Company's expense, against the claims and demands of all persons whomsoever. The Company shall pay any and all taxes, assessments and other public accounts and charges of every kind and nature that may be levied upon or assessed against any part of the Collateral. The Company shall not permit and shall cause the lessees under the Intercompany Leases not to permit any liens, claims, security interests or other encumbrances (except only security interests in favor of the Secured Creditor, Permitted Liens, and the Intercompany Leases) to attach to any part of the Collateral, nor permit any part of the Collateral to be levied upon under any legal process. The Company shall not sell, exchange, transfer, assign, lease or otherwise dispose of the Collateral or any interest therein, nor permit any Collateral to become a fixture to real property or an accession to other personal property, other than under the Intercompany Leases. Except in the ordinary course of business consistent with past practice, the Company shall not do or permit to be done anything which might impair the value of any item of the Collateral owned by them or the security intended to be afforded hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**Inspection**. The Secured Creditor (by any of its officers, employees or agents) shall have the right at any reasonable time or times to inspect all files relating to the Collateral, to discuss the Company's affairs and finances, insofar as the same are reasonably related to the rights of the Secured Creditor hereunder, with any Person to verify the amount, quantity, value and condition of, or any other matter relating to, any of the Collateral and, in this connection, to review, audit and make extracts from all records and files related to any of the Collateral.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**Change in Name or Chief Executive Office**. The Company shall notify the Secured Creditor in writing 30 days prior to any change in its name, the location of its chief executive office or its jurisdiction of organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**Rights and Remedies upon Default**. (a) Upon the occurrence and during the continuation of any Event of Default (as defined in the Notes) or any material default by the Company of any of the provisions hereof or breach of any representation or warranty of the Company contained herein or any material default by the Company of any of the provisions of, or breach of any representation or warranty of the Company contained in, any other Loan Document (as defined in the Notes), the Secured Creditor shall have, in addition to all other rights and remedies provided by law, all of the rights and remedies of a secured creditor under the UCC. The Secured Creditor shall have the specific right to demand that the Company return the Collateral, at the Company's expense, to the Secured Creditor within ten days after notice of any such Event of Default or breach so that the Secured Creditor may exercise its rights as a secured creditor. The Secured Creditor shall have all rights to enforce the rights of the Company under the Intercompany Leases and to collect all payments due from the lessees thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Secured Creditor is legally entitled, the Company shall be liable for the deficiency, together with interest thereon at the Default Rate (as defined in the Notes), together with the reasonable costs of collection and the fees, charges and disbursements of counsel to the extent required to be paid in accordance with the Notes. Any surplus remaining after the full payment and satisfaction of the Secured Indebtedness shall be returned, in a reasonably prompt fashion, to the Company or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Failure by the Secured Creditor or the holders of the Secured Indebtedness to exercise any right, remedy or option under this Agreement, any other Loan Document (as defined in the Notes), any other document relating to the Secured Obligations, or as provided by applicable law, or any delay by the Secured Creditor or the holders of the Secured Indebtedness in exercising the same, shall not operate as a waiver of any such right, remedy or option. No waiver hereunder shall be effective unless it is in writing, signed by the party against whom such waiver is sought to be enforced and then only to the extent specifically stated. To the extent permitted by applicable law, neither the Secured Creditor nor any of its agents shall be liable hereunder or under any other Loan Document for any acts or omissions or for any error of judgment or mistake of fact or law other than their gross negligence or willful misconduct hereunder. The rights and remedies of the Secured Creditor under this Agreement shall be cumulative and not exclusive of any other right or remedy which the Secured Creditor may have.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**Waivers and Other Agreements**. The Company, to the extent of its interest in the Collateral, hereby waives and releases any and all right to require the Secured Creditor to collect any of the Secured Indebtedness from any specific item or items of the Collateral or from any other collateral security under any theory of marshaling of assets or otherwise, and the Company specifically authorizes the Secured Creditor to apply any item or items of the Collateral in which it may have any interest against the Secured Indebtedness in the manner specified in the Notes. Secured Creditor is hereby authorized by the Company without any liability to the Secured Creditor, in its exclusive discretion and without notice to or demand upon the Company and without otherwise affecting the Company's obligations hereunder, from time to time to take and hold other collateral (in addition to or other than the Collateral itself) for the payment of the Secured Indebtedness or any part thereof, and to accept and hold any endorsement or guaranty of payment of the Secured Indebtedness or any part thereof and to release or substitute any endorser or guarantor or any other person granting security for or in any other way obligated upon the Secured Indebtedness or any part thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.**Further Assurances**. With respect to the Collateral, the Company agrees to do, file, record, make, execute and deliver all such acts, deeds, things, notices and instruments as may be reasonable or desirable in the opinion of the Secured Creditor in order to vest more fully in and assure to the Secured Creditor the liens on and security interests in the Collateral created hereby or intended so to be and the enforcement and realization of the benefits of, all of the rights, remedies and powers of the Secured Creditor hereunder relating to the Collateral. The Secured Creditor shall not have any obligation to take any steps, and the Company shall in each case duly take all steps, necessary to perfect and otherwise preserve against all other parties the rights of the Company and those of the Secured Creditor in the Collateral and each and every item thereof. The Company hereby authorizes the Secured Creditor to prepare and file any financing or continuation statements, or amendments thereof, or termination statements to be filed in any jurisdiction to give notice of this Agreement and the interest created hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**Transfer of Interest**. Any or all of the rights, benefits and advantages of the Secured Creditor under this Agreement, and the right to receive payment of the principal of and premium, if any, and interest on the Notes as and when due and payable by the Company may be assigned by the Secured Creditor and reassigned by any assignee at any time and from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**Expenses**. The Company shall pay all costs of filing of any financing, continuation or termination statements or security agreements with respect to the Collateral deemed by the Secured Creditor to be necessary or advisable in order to perfect and protect the liens and security interests hereby created in favor of the Secured Creditor or intended so to be. The Company agrees that the Collateral secures, and further agrees to pay on demand, all reasonable expenses (including but not limited to reasonable attorneys' fees and other costs for legal services, costs of insurance and payments of taxes or other charges) of or incidental to the custody, care, sale or collection of or realization on any of the Collateral or in any way relating to the enforcement or protection of the rights of the Secured Creditor hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.**Severability**. The invalidity or unenforceability of any provision hereof shall in no way affect, diminish or impair the validity or enforceability of any other provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.**Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Texas applicable to contracts made and performed wholly within Texas by Texas residents.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.**Headings**. Headings in this Agreement are included herein for of reference only and shall not constitute a part of this Agreement for any other purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.**Counterparts**. This Agreement may be executed in any number of counterparts, all of whom together shall constitute one and the same instrument, and either of the parties hereto may execute this by signing any such counterpart.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.**Binding Effect**. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

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In witness whereof, the parties hereto have caused this Agreement to be executed by their proper corporate officers thereunto duly authorized as of the day and year first above written.

**Dawson Operating, LLC** **GTC, Inc.**

By:<u>/s/ Tony Clark</u> By:<u>/s/ Robert Curda</u> 

Tony Clark Robert Curda

Chief Executive Officer Chief Financial Officer

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## Exhibit 10.3

#### Exhibit 10.3

#### SECURED PROMISSORY NOTE
<sup>$[_________]Houston, Texas</sup> **[__], 2025**

For value received, the undersigned, **DAWSON OPERATING LLC**, a Texas limited liability company, and **Dawson Geophysical Company**, a Texas corporation, each located at 508 West Wall, Suite 800, Midland, TX 79701 (together, the "Maker"), jointly and severally promise to pay to the order of **GTC, Inc**., a Texas corporation (together with its **s**uccessors and assigns and subsequent holders of this Note, "Payee"), the principal sum of **[_______________] and 00/100 DOLLARS ($[_________])**, together with interest thereon at the Note Rate, and otherwise in strict accordance with the terms and provisions hereof.

**ARTICLE I – PAYMENT TERMS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1<u>Payment of Principal and Interest</u>. Maker agrees to make equal consecutive monthly payments of principal and accrued interest on this Secured Promissory Note (the "Note") to Payee of $[**_________**] beginning on [_______], 2025 and continuing on the first day (such date, the "Payment Date") of each and every calendar month thereafter until [______], 2028 (the "Maturity Date"); provided, however, that if on any Payment Date the accrued but unpaid interest hereon exceeds the installment amount set forth above, then on such Payment Date there shall be due and payable an additional payment in an amount equal to such excess accrued but unpaid interest. The outstanding principal balance hereof and any and all accrued but unpaid interest hereon shall be finally due and payable in full on the Maturity Date or upon the earlier maturity hereof, whether by acceleration or otherwise. No principal amount repaid may be re-borrowed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2<u>Note Rate; Default Interest Rate</u>. The outstanding unpaid principal balance of this Note shall bear interest at the rate of 8.75% per annum (the "Note Rate"). Payments due to the Payee under the terms of this Note are reflected on the attached amortization schedule. For so long as any Event of Default (as hereinafter defined) exists under this Note or under any of the other Loan Documents (as hereinafter defined), regardless of whether or not there has been an acceleration of the indebtedness evidenced by this Note, and at all times after the maturity of the indebtedness evidenced by this Note (whether by acceleration or otherwise), and in addition to all other rights and remedies of Payee hereunder, interest shall accrue on the outstanding principal balance hereof at a per annum rate equal to the lesser of (a) 18% (or 1.5% per month) and (b) the Maximum Rate (as hereinafter defined), and such accrued interest shall be immediately due and payable (the "Default Rate") upon demand by Payee. Maker acknowledges that it would be extremely difficult or impracticable to determine Payee's actual damages resulting from any late payment or Event of Default, and such accrued interest is a reasonable estimate of those damages and do not constitute a penalty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3<u>Application</u>. Except as expressly provided herein to the contrary, all payments on this Note shall be applied in the following order of priority: (a) the payment or reimbursement of any expenses, costs or obligations (other than the outstanding principal balance hereof and interest hereon) for which either Maker shall be obligated or Payee shall be entitled pursuant to the provisions of this Note; the Purchase Money Security Agreement, dated as of the date hereof between Maker and Payee (the "Security Agreement"); the Deed of Trust, dated as of the date hereof, from Maker, as grantor, to R.G. Converse, as trustee, and to Payee, as beneficiary, covering three tracts of land in Midland County, Texas (the "<u>Deed of Trust</u>"); or any other agreement, document and instrument now or hereafter governing, securing or guaranteeing any portion of the indebtedness evidenced by this Note or executed by Maker or any guarantor or other person or entity in connection with the indebtedness evidenced by this Note or in connection with the payment of the indebtedness evidenced hereby or the performance and discharge of the obligations related hereto or thereto, together with any and all renewals, modifications, amendments, restatements, extensions and supplements hereof or thereof (collectively, the "Loan Documents"), (b) the payment of

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accrued but unpaid interest hereon, and (c) the payment of all or any portion of the principal balance hereof then outstanding hereunder, in the direct order of maturity. If an Event of Default exists under this Note or under any of the other Loan Documents, then Payee may, at the sole option of Payee, apply any such payments, at any time and from time to time, to any of the items specified in clauses (a), (b) or (c) above without regard to the order of priority otherwise specified in this Section 1.3 and any application to the outstanding principal balance hereof may be made in either direct or inverse order of maturity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4<u>Payments</u>. All payments under this Note made to Payee shall be made in immediately available funds at the principal office of Payee located at 7007 Pinemont Drive, Houston, Texas, 77040 (or at such other place as Payee, in Payee's sole discretion, may have established by delivery of written notice thereof to Maker from time to time), without offset, in lawful money of the United States of America. Payments by check or draft shall not constitute payment in immediately available funds until the required amount is actually received by Payee in full. Payments in immediately available funds received by Payee in the place designated for payment on a Business Day (as hereinafter defined) prior to 5:00 p.m. Houston, Texas time at said place of payment shall be credited prior to the close of business on the Business Day received; payments received by Payee on a day other than a Business Day or after 5:00 p.m. Houston, Texas time on a Business Day shall not be credited until the next succeeding Business Day. If any payment of principal or interest on this Note shall become due and payable on a day other than a Business Day, such payment shall be made on the next succeeding Business Day. Any such extension of time for payment shall be included in computing interest which has accrued and shall be payable in connection with such payment. "Business Day" shall mean a day other than a Saturday, Sunday or a day on which commercial banks in the State of Texas are authorized to be closed, or are in fact closed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5<u>Computation Period</u>. Subject to the limitation contained in Section 3.3, interest on the indebtedness evidenced by this Note shall be computed on the basis of a three hundred sixty (360) day year consisting of twelve 30-day months and shall accrue based on the actual number of days elapsed for any whole or partial month in which interest is being calculated. In computing the number of days during which interest accrues, the day on which assets are delivered shall be included regardless of the time of day such delivery is made, and the day on which funds are repaid shall be included unless repayment is credited prior to the close of business on the Business Day received as provided in Section 1.4 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6<u>Prepayment</u>. The Maker shall have the right and privilege at any time of prepaying all or any portion of this Note without premium or penalty; provided, however, that such prepayment shall also include any and all accrued but unpaid interest on this Note, plus any other sums due to Payee under the other Loan Documents which have not been fully paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7<u>Unconditional Payment</u>. Maker is and shall be obligated to pay all principal, accrued interest and any and all other amounts which become payable under this Note or under any of the other Loan Documents absolutely and unconditionally and without any abatement, postponement, diminution or deduction whatsoever and without any reduction for counterclaim or setoff whatsoever. If at any time any payment received by Payee hereunder shall be deemed by a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under any Debtor Relief Law (as hereinafter defined), then the obligation to make such payment shall survive any cancellation or satisfaction of this Note or return thereof to Maker and shall not be discharged or satisfied with any prior payment thereof or cancellation of this Note, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof, and such payment shall be immediately due and payable upon demand. "Debtor Relief Law" means the United States Bankruptcy Code, as now or hereafter in effect, or any other present or future applicable law relating to insolvency, bankruptcy, liquidation, conservatorship, reorganization, extension or adjustment of debts, or similar laws affecting the rights of creditors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8<u>Partial or Incomplete Payments</u>. Remittances in payment of any part of this Note shall be made and accepted subject to the condition that any check or draft may be handled for collection in accordance with the practice of the collecting bank or banks. Acceptance by Payee of any payment in an

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amount less than the full amount then due shall be deemed an acceptance on account only, and the failure to pay the entire amount then due shall be and continue to be an Event of Default in the payment of this Note.

**ARTICLE II – EVENT OF DEFAULT AND REMEDIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Event of Default</u>. The occurrence or happening, at any time and from time to time, of any one or more of the following shall immediately constitute an "Event of Default" under this Note:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Maker shall fail, refuse or neglect to pay and satisfy, in full and in the applicable method and manner required, any required payment of principal or accrued interest or any other portion of the indebtedness evidenced by this Note within two (2) days after the same shall become due and payable, whether at the stipulated due date thereof, at a date fixed for payment, or at maturity, by acceleration or otherwise; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The occurrence of any default, breach or event of default under any of the Loan Documents, which default, breach or event of default is not cured within the time period specified in the applicable Loan Document, and if no cure period is specified, within five (5) days after written notice thereof from Payee to Maker; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any representation or warranty contained herein or in any other Loan Document delivered or furnished by Maker in connection therewith is or proves to have been false, misleading, erroneous or breached in any material respect on the date it was made or deemed to have been made; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Either entity included in the definition of Maker (i) shall execute an assignment for the benefit of creditors or an admission in writing by such entity of such entities's inability to pay, or its's failure to pay, debts generally as the debts become due; (ii) shall allow the levy against the Collateral (as defined in the Security Agreement) or any part thereof, of any execution, attachment, sequestration or other writ; (iii) shall allow the appointment of a receiver, trustee or custodian of itself or of the Collateral or any part thereof; (iv) files as a debtor a petition, case, proceeding or other action pursuant to, or voluntarily seeks the benefit or benefits of, any Debtor Relief Law, or takes any action in furtherance thereof; (v) files either a petition, complaint, answer or other instrument which seeks to effect a suspension of, or which has the effect of suspending any of, the rights or powers of Payee granted in this Note or in any of the other Loan Documents; or (vi) allows the filing of a petition, case, proceeding or other action against such entity as a debtor under any Debtor Relief Law or seeks appointment of a receiver, trustee, custodian or liquidator of such entity or of the Collateral, or any part thereof, or of any significant portion of such entity's other property and (A) such entity admits, acquiesces in or fails to contest diligently the material allegations thereof, (B) the petition, case, proceeding or other action results in the entry of an order for relief or order granting the relief sought against such entity, or (C) the petition, case, proceeding or other action is not permanently dismissed or discharged on or before the earlier of trial thereon or thirty (30) days next following the date of filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Remedies</u>. Upon the occurrence of an Event of Default, Payee shall have the immediate right, at the sole discretion of Payee and without notice, demand, presentment, notice of nonpayment or nonperformance, protest, notice of protest, notice of intent to accelerate, notice of acceleration, or any other notice or any other action (**ALL OF WHICH MAKER HEREBY EXPRESSLY WAIVES AND RELINQUISHES**) (a) to declare the entire unpaid balance of the indebtedness evidenced by this Note (including, without limitation, the outstanding principal balance hereof and all accrued but unpaid interest thereon) at once immediately due and payable (and upon such declaration, the same shall be at once immediately due and payable) and may be collected forthwith, whether or not there has been a prior demand for payment and regardless of the stipulated date of maturity, (b) to foreclose any liens and security interests

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securing payment hereof or thereof (including, without limitation, any liens and security interests granted under the Security Agreement or under the Deed of Trust), and (c) to exercise any of Payee's other rights, powers, recourses and remedies under this Note, under any other Loan Document, or at law or in equity, and the same (i) shall be cumulative and concurrent, (ii) may be pursued separately, singly, successively, or concurrently against Maker or others obligated for the repayment of this Note or any part hereof, or against any one or more of them, or against the Collateral, at the sole discretion of Payee, (iii) may be exercised as often as occasion therefor shall arise, it being agreed by Maker that the exercise, discontinuance of the exercise of or failure to exercise any of the same shall in no event be construed as a waiver or release thereof or of any other right, remedy, or recourse, and (iv) are intended to be, and shall be, nonexclusive. All rights and remedies of Payee hereunder and under the other Loan Documents shall extend to any period after the initiation of foreclosure proceedings, judicial or otherwise, with respect to the Collateral or any portion thereof. Without limiting the provisions of Section 3.14 hereof, if this Note, or any part hereof, is collected by or through an attorney-at-law, Maker agrees to pay all reasonable costs and expenses of collection, including, but not limited to, Payee's reasonable attorneys' fees, whether or not any legal action shall be instituted to enforce this Note.

**ARTICLE III – GENERAL PROVISIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1<u>No Waiver; Amendment</u>. No failure to accelerate the indebtedness evidenced by this Note by reason of an Event of Default hereunder, acceptance of a partial or past due payment, or indulgences granted from time to time shall be construed (a) as a novation of this Note or as a reinstatement of the indebtedness evidenced by this Note or as a waiver of such right of acceleration or of the right of Payee thereafter to insist upon strict compliance with the terms of this Note, or (b) to prevent the exercise of such right of acceleration or any other right granted under this Note, under any of the other Loan Documents or by any applicable laws. Maker hereby expressly waives and relinquishes the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing. The failure to exercise any remedy available to Payee shall not be deemed to be a waiver of any rights or remedies of Payee under this Note or under any of the other Loan Documents, or at law or in equity. No extension of the time for the payment of this Note or any installment due hereunder, made by agreement with any person now or hereafter liable for the payment of this Note, shall operate to release, discharge, modify, change or affect the original liability of Maker under this Note, either in whole or in part, unless Payee specifically, unequivocally and expressly agrees otherwise in writing. This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, or modification is sought.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 **WAIVERS. MAKER AND ANY SURETIES, ENDORSERS AND GUARANTORS HEREOF SEVERALLY WAIVE AND RELINQUISH PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF NONPAYMENT OR NONPERFORMANCE, PROTEST, NOTICE OF PROTEST, NOTICE OF INTENT TO ACCELERATE, NOTICE OF ACCELERATION OR ANY OTHER NOTICES OR ANY OTHER ACTION, INCLUDING FILING OF SUIT AND DILIGENCE IN COLLECTING THIS NOTE OR ENFORCING ANY OF THE SECURITY HEREFOR, AND AGREE TO ANY SUBSTITUTION, EXCHANGE OR RELEASE OF ANY SUCH SECURITY OR THE RELEASE OF ANY PARTY PRIMARILY OR SECONDARILY LIABLE HEREON, AND FURTHER AGREE THAT IT WILL NOT BE NECESSARY FOR ANY HOLDER HEREOF, IN ORDER to enforce payment of this Note by them, to first institute suit or exhaust its remedies against any security herefor, and consent to any one or more extensions or postponements of time of payment of this Note on any terms or any other indulgences with respect thereto, without notice thereof to any of them. MAKER AND ANY SURETIES, ENDORSERS AND GUARANTORS HEREOF SEVERALLY WAIVE AND RELINQUISH, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO THE BENEFITS OF ANY MORATORIUM, REINSTATEMENT, MARSHALING, FORBEARANCE, VALUATION, STAY, EXTENSION, REDEMPTION AND APPRAISEMENT** 

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**NOW OR HEREAFTER PROVIDED BY THE CONSTITUTION AND LAWS OF THE UNITED STATES OF AMERICA AND OF EACH STATE THEREOF, BOTH AS TO ITSELF AND IN AND TO ALL OF ITS PROPERTY, REAL AND PERSONAL, AGAINST THE ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS EVIDENCED BY THIS NOTE OR BY THE OTHER LOAN DOCUMENTS.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3<u>Interest Provisions</u>. It is the intent of Payee and the Maker in the execution and performance of this Note to remain in strict compliance with laws applicable to the State of Texas from time to time in effect ("Applicable Law"). In furtherance thereof, Payee and the Maker stipulate and agree that none of the terms and provisions contained in this Note or any document securing or otherwise relating to the Note, shall ever be construed to create a contract to pay for the use, forbearance or detention of money with interest at a rate or in an amount in excess of the maximum rate allowed by law ("Maximum Rate"). For purposes of this Note "interest" shall include the aggregate of all charges which constitute interest under Applicable Law that are contracted for, charged, reserved, received or paid under this Note. The Maker shall never be required to pay unearned interest and shall never be required to pay interest at a rate or in an amount in excess of the Maximum Rate, and the provisions of this paragraph shall control over all other provisions of this Note and of any other instrument pertaining to or securing this Note, which may be in apparent conflict herewith. If this Note is prepaid or the maturity of this Note is accelerated for any reason, or if under any other contingency the effective rate or amount of interest which would otherwise be payable under this Note would exceed the Maximum Rate, or in the event Payee or any holder of this Note shall charge, contract for, take, reserve or receive monies that are deemed to constitute interest which would, in the absence of this provision, increase the effective rate or amount of interest payable under this Note to a rate or amount in excess of that permitted to be charged, contracted for, taken, reserved or received under Applicable Law then in effect, then the principal amount of this Note or the amount of interest which would otherwise be payable under this Note or both shall be reduced to the amount allowed under Applicable Law as now or hereinafter construed by the courts having jurisdiction, and all such moneys so charged, contracted for, taken, reserved or received that are deemed to constitute interest in excess of the Maximum Rate shall immediately be returned to or credited to the account of the Maker upon such determination. Payee and the Maker further stipulate and agree that, without limitation of the foregoing, all calculations of the rate or amount of interest contracted for, charged, taken, reserved or received under this Note which are made for the purpose of determining whether such rate or amount exceeds the maximum lawful rate or amount, shall be made, to the extent permitted by Applicable Law, by amortizing, prorating, allocating and spreading during the period of the full stated term of this Note, all interest at any time contracted for, charged, taken, reserved or received from the Maker or otherwise by Payee or the holders of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>Further Assurances and Corrections</u>. From time to time, at the request of Payee, Maker will (a) promptly correct any defect, error or omission which may be discovered in the contents of this Note or in any other Loan Document or in the execution or acknowledgment thereof; (b) execute, acknowledge, deliver, record and/or file (or cause to be executed, acknowledged, delivered, recorded and/or filed) such further documents and instruments (including, without limitation, further security agreements, financing statements and continuation statements) and perform such further acts and provide such further assurances as may be necessary, desirable, or proper, in Payee's opinion, (i) to carry out more effectively the purposes of this Note and the Loan Documents and the transactions contemplated hereunder and thereunder, (ii) to confirm the rights created under this Note and the other Loan Documents, (iii) to protect and further the validity, priority and enforceability of this Note and the other Loan Documents and the liens and security interests created thereby, and (iv) to subject to the Loan Documents any property of Maker intended by the terms of any one or more of the Loan Documents to be encumbered by the Loan Documents; and (c) pay all costs in connection with any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5**WAIVER OF JURY TRIAL. MAKER, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY KNOWINGLY, INTENTIONALLY, IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT** 

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**TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS NOTE OR ANY CONDUCT, ACT OR OMISSION OF PAYEE OR MAKER, OR ANY OF THEIR DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH PAYEE OR MAKER, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6<u>Governing Law; Submission to Jurisdiction</u>. This Note shall be governed by and construed in accordance with the laws of the State of Texas, without regard to principles of conflicts of laws. Maker, for itself and its successors and assigns, hereby irrevocably (a) submits to the exclusive jurisdiction of the state and federal courts in Texas, (b) waives, to the fullest extent permitted by law, any objection that it may now or in the future have to the laying of venue of any litigation arising out of or in connection with this Note or any Loan Document brought in Harris County, Texas, (c) waives any objection it may now or hereafter have as to the venue of any such action or proceeding brought in such court or that such court is an inconvenient forum, and (d) agrees that any legal proceeding against any party to any of the Loan Documents arising out of or in connection with any of the Loan Documents may be brought in one of the foregoing courts. Maker hereby agrees that service of process upon Maker may be made by certified or registered mail, return receipt requested, at its address specified herein. Nothing herein shall affect the right of Payee to serve process in any other manner permitted by law or shall limit the right of Payee to bring any action or proceeding against Maker or with respect to any of Maker's property in courts in other jurisdictions. The scope of each of the foregoing waivers is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including, without limitation, contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. Maker acknowledges that these waivers are a material inducement to Payee's agreement to enter into the agreements and obligations evidenced by the Loan Documents, that Payee has already relied on these waivers and will continue to rely on each of these waivers in related future dealings. The waivers in this Section 3.6 are irrevocable, may not be modified either orally or in writing, and apply to any future renewals, extensions, amendments, modifications, or replacements in respect of any and all of the applicable Loan Documents. In connection with any litigation, this Note may be filed as a written consent to a trial by the court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 <u>Relationship of the Parties</u>. Notwithstanding any prior business or personal relationship between Maker and Payee, or any officer, director or employee of Payee, that may exist or have existed, the relationship between Maker and Payee is solely that of debtor and creditor, Payee has no fiduciary or other special relationship with Maker, Maker and Payee are not partners or joint venturers, and no term or condition of any of the Loan Documents shall be construed so as to deem the relationship between Maker and Payee to be other than that of debtor and creditor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8 <u>Payee's Discretion</u>. Whenever pursuant to this Note, Payee exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Payee, the decision of Payee to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall be (except as is otherwise specifically and expressly provided herein to the contrary) in the sole discretion of Payee and shall be final and conclusive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9 <u>Successors and Assigns</u>. The terms and provisions hereof shall be binding upon and inure to the benefit of Maker and Payee and their respective heirs, executors, legal representatives, successors, successors-in-title and assigns, whether by voluntary action of the parties, by operation of law or otherwise, and all other persons claiming by, through or under them. The terms "Maker" and "Payee" as used hereunder shall be deemed to include their respective heirs, executors, legal representatives, successors, successors-in-title and assigns, whether by voluntary action of the parties, by operation of law or otherwise, and all other persons claiming by, through or under them.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10 <u>Time is of the Essence</u>. Time is of the essence with respect to all provisions of this Note and the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.11 <u>Headings</u>. The Article and Section headings hereof are inserted for convenience of reference only and shall in no way alter, modify, define, limit, amplify or be used in construing the text, scope or intent of such Articles or Sections or any provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.12 <u>Notices</u>. All notices or other communications required or permitted to be given pursuant to this Note shall be in writing and shall be considered as properly given if (a) mailed by first class United States mail, postage prepaid, registered or certified with return receipt requested, (b) by delivering same in person to the intended addressee or (c) by delivery to a reputable independent third party commercial delivery service for same day or next day delivery and providing for evidence of receipt at the office of the intended addressee. Notice so mailed shall be effective upon its deposit with the United States Postal Service or any successor thereto; notice sent by such a commercial delivery service shall be effective upon delivery to such commercial delivery service; notice given by personal delivery shall be effective only if and when received by the addressee; and notice given by other means shall be effective only if and when received at the office or designated place or machine of the intended addressee. For purposes of notice, the addresses of the parties shall be as set forth herein; provided, however, that either party shall have the right to change its address for notice hereunder to any other location within the continental United States by the giving of five (5) days' prior notice to the other party in the manner set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.13 <u>Severability</u>. If any provision of this Note or the application thereof to any person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, then neither the remainder of this Note nor the application of such provision to other persons or circumstances nor the other instruments referred to herein shall be affected thereby, but rather shall be enforced to the greatest extent permitted by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.14 <u>Costs of Collection</u>. If any holder of this Note retains an attorney-at-law (whether or not legal proceedings are commenced) in connection with any Event of Default or at maturity or to collect, enforce, or defend this Note or any part hereof, or any other Loan Document, including in connection with any lawsuit or in any probate, reorganization, bankruptcy or other proceeding, then Maker agrees to pay to each such holder, in addition to the principal balance hereof and all interest hereon, all reasonable costs and expenses of collection or incurred by such holder or in any such suit or proceeding, including, but not limited to, reasonable attorneys' fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.15 <u>Statement of Unpaid Balance</u>. At any time and from time to time, Maker will furnish promptly, upon the request of Payee, a written statement or affidavit, in form satisfactory to Payee, stating the unpaid balance of the indebtedness evidenced by this Note and the Related Indebtedness and that there are no offsets or defenses against full payment of the indebtedness evidenced by this Note and the Related Indebtedness and the terms hereof, or if there are any such offsets or defenses, specifying them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.16<u>Security</u>. This Note is secured by (i) the Security Agreement covering certain collateral as more particularly described therein and (ii) the Deed of Trust covering certain lands and premises as more particularly described therein. The holder of this Note is entitled to the benefits and security provided in the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.17<u>Tax Forms</u>. On the date hereof (and from time to time thereafter upon reasonable request of Maker), Payee shall furnish Maker with an executed copy of Internal Revenue Service Form W-9 certifying that Payee is exempt from U.S. federal backup withholding tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.18 **ENTIRE AGREEMENT. THIS NOTE AND THE OTHER LOAN DOCUMENTS CONTAIN THE FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND ALL PRIOR** 

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**AGREEMENTS, WHETHER WRITTEN OR ORAL, RELATIVE HERETO AND THERETO WHICH ARE NOT CONTAINED HEREIN OR THEREIN ARE SUPERSEDED AND TERMINATED HEREBY, AND THIS NOTE AND THE OTHER LOAN DOCUMENTS MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.**

IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has duly executed this Note as of the day and year first written above.

**DAWSON GEOPHYSICAL COMPANY**

<sup>By: __________________________________</sup>

Name:[name of authorized officer]

Title:[title of authorized officer]

**DAWSON OPERATING LLC**

<sup>By: __________________________________</sup>

Name:[name of authorized officer]

Title:[title of authorized officer]

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**Loan Amortization Schedule**

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## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, William A. Clark, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of Dawson Geophysical Company;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Dated: August 13, 2025 |  |
|  | /s/ William A. Clark |
|  | William A. Clark |
|  | President and Chief Executive Officer |
|  | (principal executive officer) |

---

------

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Ian Shaw, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of Dawson Geophysical Company;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Dated: August 13, 2025 |  |
|  | /s/ Ian Shaw |
|  | Ian Shaw |
|  | Chief Financial Officer |
|  | (principal financial and accounting officer) |

---

------

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the quarterly report of Dawson Geophysical Company (the "Company") on Form 10-Q for the period ended June 30, 2025, as filed with the Securities and Exchange Commission (the "Report"), I, William A. Clark, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 13, 2025

---

| |
|:---|
| /s/ William A. Clark |
| William A. Clark |
| President and Chief Executive Officer |
| (principal executive officer) |

---

------

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the quarterly report of Dawson Geophysical Company (the "Company") on Form 10-Q for the period ended June 30, 2025, as filed with the Securities and Exchange Commission (the "Report"), I, Ian Shaw, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 13, 2025

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| |
|:---|
| /s/ Ian Shaw |
| Ian Shaw |
| Chief Financial Officer |
| (principal financial and accounting officer) |

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