Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes as of September 30, 2026, and for the three and nine months ended September 30, 2026 and 2025, included elsewhere herein. For additional information pertaining to our business, including risk factors which should be considered before investing in our Common Stock, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Capitalized terms used in this section, but not otherwise defined, have the meanings ascribed to them in the Report.

Overview

We are a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle. We operate from 15 locations in North America and 11 international service and support centers in Europe, the Middle East, and Asia-Pacific.

Our revenues are derived from two sources: tool rental and product sales. Tool rental revenues are derived from the rental of tools used in bottom hole assemblies ("BHA"), various wellbore optimization tools, and tubular goods for drilling, workover, and

completion operations. Additionally, tool rental revenue consists of the repair and inspection of such tools. Product sale revenues are derived from the sale of target depth technologies, the manufacturing and repair of tools for external customers, and tool recovery revenue. During the three months ended September 30, 2026 and 2025, we derived 79% and 82% of total revenues from tool rentals and 21% and 18% from product sales, respectively. During the nine months ended September 30, 2026 and 2025, we derived 78% and 82% from tool rentals and 22% and 18% from product sales, respectively.

We operate out of 2 reportable segments, split by geography, consisting of the Western Hemisphere operations and the Eastern Hemisphere operations.

Market Factors

Demand for our services and products depends primarily upon the general level of activity in the oil and gas industry, including the number of active drilling rigs, the number of wells drilled, the depth and working pressure of these wells, the number of well completions, the level of well remediation activity, the volume of production and the corresponding capital spending by oil and natural gas companies. Oil and gas activity is in turn heavily influenced by, among other factors, investor sentiment, availability of capital and oil and gas prices locally and worldwide, which have historically been volatile.

Our tool rental revenues are primarily dependent on drilling activity and our ability to gain or maintain market share with a sustainable pricing model.

Our product sales revenues are primarily dependent on oil and gas companies paying for tools that are lost or damaged in their drilling programs as well as the customers' need to replace aging or consumable products and our ability to provide competitive pricing. With the addition of Deep Casing Tools, we now sell tools to the end users for use in constructing their wells.

All of these factors may be influenced by the oil and gas region in which our customers are operating. While these factors may lead to differing revenues, we have generally been able to forecast our product needs and anticipated revenue levels based on historic trends in a given region and product line.

Recent Developments and Trends

Pending Acquisition of the Group

On October 8, 2026, we entered into the Purchase Agreement to acquire the Group, an Aberdeen-based provider of rental drilling tools serving the North Sea, Middle East, Asia Pacific and other Eastern Hemisphere markets, for approximately $81 million in cash (subject to adjustment) and 17,355,139 shares of Common Stock. We expect the Saltire Acquisition to increase our Eastern Hemisphere contribution from approximately 18% of our standalone revenue in the second quarter of 2026 to approximately 40% of pro forma revenue following closing. On October 9, 2026, we filed a registration statement on Form S-4, which includes a proxy statement/prospectus for a special meeting of our stockholders to approve the share issuance and the ratification of certain prior director elections under Section 204 of the DGCL. The registration statement has not yet been declared effective and the special meeting has not yet been scheduled. Subject to the satisfaction of closing conditions, including financing, we expect the Saltire Acquisition to close in the first quarter of 2027. We have incurred approximately $2.2 million of transaction-related expenses in connection with the Saltire Acquisition during the three months ended September 30, 2026, and we expect to incur significant additional transaction, financing and integration costs. See Note 20 - Subsequent Events.

Oil and Natural Gas Prices

The following table summarizes average oil and natural gas prices in North America over the indicated periods as well as International and Domestic industry activity levels as reflected by the average number of active onshore drilling rigs during the same periods.

(1) U.S. Energy Information Administration ("EIA") Cushing, OK WTI ("West Texas Intermediate") monthly average spot price per barrel of crude oil.

(2) EIA Henry Hub Natural Gas monthly average spot price per million British Thermal Unit ("MMBtu").

(3) Baker Hughes, includes land and offshore activity and does not include miscellaneous rigs

During the nine months ended September 30, 2026, the oil and gas market continued to be influenced by evolving supply and demand fundamentals, geopolitical developments, and broader macroeconomic conditions. U.S. crude oil production remained near record levels, supported by continued activity in key shale basins and offshore developments. While crude oil prices remained volatile during the period, customer investment decisions continued to be driven primarily by medium- and long-term commodity price expectations, particularly for offshore projects with longer development cycles.

U.S. natural gas prices remained above prior-year levels during the nine months ended September 30, 2026, supported by improving market fundamentals, including continued demand growth and relatively tighter inventories, despite increasing domestic production.

Operational activity remained below historical levels in certain Western and Eastern Hemisphere markets. However, longer laterals, improved drilling efficiencies, and higher productivity per rig continued to partially offset the impact of lower drilling activity, supporting demand for certain products and services.

Inflation and Increased Costs

We are experiencing the impacts of global inflation, both in increased personnel costs and the prices of goods and services required to operate drilling rigs and execute capital projects. While we are currently unable to estimate the ultimate impact of rising prices, we do expect that our costs will continue to rise in the near term and will impact our profitability.

Results of Operations

The following table sets forth our results of operations for the periods presented (in thousands):

(1) Corporate and other includes stock compensation expense, monitoring expenses, and unallocated corporate expenses.

Comparison of the three months ended September 30, 2026 and 2025

nm = not meaningful

Western Hemisphere

Western Hemisphere revenue was $34.7 million for the three months ended September 30, 2026, a decrease of $0.2 million, or 1%, compared to the three months ended September 30, 2025. Revenue was flat year over year despite lingering pricing compression from activity declines in prior periods. Additionally, Western Hemisphere segment income was $11.4 million for the three months ended September 30, 2026, a decrease of $0.3 million or 3%, compared to the three months ended September 30, 2025. Segment income moved in line with revenue.

Eastern Hemisphere

Eastern Hemisphere revenue was $7.9 million for the three months ended September 30, 2026, an increase of $1.7 million, or 27%, compared to the three months ended September 30, 2025. The increase in revenues was driven by increased rental activity in geographies into which the Company has expanded. Additionally, Eastern Hemisphere segment income was $1.3 million for the three months ended September 30, 2026, an increase of $1.1 million or 571%, compared to the three months ended September 30, 2025. The increase was primarily driven by the increase in revenue year over year.

Corporate and other expenses

Corporate and other expenses was $4.2 million for the three months ended September 30, 2026, an increase of $0.7 million, or 18%, compared to the three months ended September 30, 2025. The increase was primarily related to stock-based compensation due to additional restricted stock units and performance share awards granted in 2026.

Loss (gain) on asset disposal

Loss (gain) on asset disposal was $0.4 million for the three months ended September 30, 2026, an increase of $0.4 million, or 100%, compared to the three months ended September 30, 2025. The increase was primarily related to the disposition of assets in the Western Hemisphere during the three months ended September 30, 2026.

Other operating and non-operating expense, net

Other operating and non-operating expense, net was $3.0 million for the three months ended September 30, 2026, an increase of $2.4 million, or 411%, compared to the three months ended September 30, 2025. The increase was primarily a result of the higher transaction related expenses incurred in the third quarter of 2026.

Comparison of the nine months ended September 30, 2026 and 2025

Western Hemisphere

Western Hemisphere revenue was $101.1 million for the nine months ended September 30, 2026, a decrease of $12.6 million, or 11%, compared to the nine months ended September 30, 2025. The decrease in revenues was driven by a decrease in tool rental revenue as a result of lower customer activity levels and pricing pressures during the nine months ended September 30, 2026. Additionally, Western Hemisphere segment income was $31.4 million for the nine months ended September 30, 2026, a decrease of $6.0 million or 16%, compared to the nine months ended September 30, 2025. The decrease was in line with the decrease in revenue and a result of the same drivers.

Eastern Hemisphere

Eastern Hemisphere revenue was $21.9 million for the nine months ended September 30, 2026, an increase of $4.5 million, or 26% compared to the nine months ended September 30, 2025. The increase in revenues was driven by increased rental activity in geographies into which the Company has expanded. Eastern Hemisphere segment income was $1.9 million for the nine months ended September 30, 2026, an increase of $1.9 million compared to less than $0.1 million for the nine months ended September 30, 2025. The increase was in line with the increase in revenue and a result of the same drivers.

Interest Expense, net

Interest expense, net was $3.3 million for the nine months ended September 30, 2026, a decrease of $0.7 million, or 18%, compared to the nine months ended September 30, 2025. The decrease was primarily a result of the decrease in the overall debt balance when comparing September 30, 2026 to September 30, 2025.

Other operating and non-operating expense, net

Other operating and non-operating expense, net was $4.9 million for the nine months ended September 30, 2026, an increase of $0.5 million, or 10%, compared to the nine months ended September 30, 2025. The increase was primarily a result of the higher transaction related expenses offset by lower restructuring costs incurred in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.

Non-GAAP Financial Measures

To supplement our unaudited interim consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

We use the non-GAAP financial measure Adjusted EBITDA, which is defined as net income (loss); excluding interest income; interest expense; other operating and non-operating expense, net; income tax benefit (expense); depreciation and amortization; and certain other non-cash or non-recurring items impacting net income (loss) from time to time. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in Adjusted EBITDA.

This non-GAAP financial measure should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of this non-GAAP financial measures compared to the closest comparable U.S.GAAP measure. Some of these limitations are that:

Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation of fixed assets and amortization of acquired intangible assets and, although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future;

Adjusted EBITDA excludes income tax benefit (expense).

The following tables present a reconciliation of Adjusted EBITDA to net income (loss) for the three and nine months ended September 30, 2026 and 2025 (non-recurring transaction expenses recorded to other (income) expense are presented separately within Adjusted EBITDA):

Liquidity and Capital Resources

At September 30, 2026, we had $3.0 million of cash. Our primary sources of liquidity and capital resources are cash on hand, cash flows generated by operating activities and, if necessary, borrowings under the Credit Facility Agreement. We may use additional cash generated to execute strategic acquisitions or for general corporate purposes. We believe that our existing cash on hand, cash generated from operations and available borrowings under the Credit Facility Agreement will be sufficient to meet our working capital requirements and anticipated capital expenditures for at least the next 12 months and in the longer term, excluding the cash consideration for the Saltire Acquisition. Cash consideration payable at closing of the Saltire Acquisition is approximately £60.3 million (approximately $81 million), subject to adjustment, which substantially exceeds our cash on hand and available borrowings under the Credit Facility Agreement as of September 30, 2026. We expect to fund the cash consideration for the Saltire Acquisition, together with related fees and expenses, through new debt financing and borrowings under the Credit Facility Agreement. The Buyer's obligation to close is conditioned on obtaining this financing, and the Seller Representative may terminate the Purchase Agreement if the financing has not been obtained by November 30, 2026 and certain other conditions are met. The completion of the Saltire Acquisition and the related financing will significantly increase our indebtedness and debt service obligations. There can be no assurance that such financing will be available on acceptable terms or at all.

Credit Facility Agreement

Reference is made to the disclosure set forth in Note 8 - Long-term Debt, of the notes to condensed consolidated financial statements.

Capital Expenditures

Our capital expenditure relates to capital additions or improvements that add to our rental or repair capacity or extend the useful life of our drilling tools and related infrastructure. Also, our capital expenditures replace tools that are lost or damaged by a customer and these are funded by a rental tool recovery sale amount from the customer. We regularly incur capital expenditures on an on-going basis in order to (i) increase or maintain our rental tool fleet and equipment, (ii) extend the useful life of our rental tools and equipment and (iii) acquire or upgrade computer hardware and software. The amount of our capital expenditures is influenced by, among other things, demand for our services, recovery of lost or damaged tools, schedules for refurbishing our various rental tools and equipment, cash flow generated by our operations, expected rates of return and cash required for other purposes.

Contractual Obligations and Commitments

Our material contractual obligations arise from leases of facilities and vehicles under noncancelable operating lease agreements. See Note 13 - Leases, of the notes to the condensed consolidated financial statements.

Tax Obligations

We currently have available federal net operating loss carryforwards to offset our federal taxable income, and we expect that these carryforwards will substantially reduce our cash tax payments over the next several years. If we forfeit these carryforwards for any reason or deplete them faster than anticipated, our cash tax obligations could increase substantially.

Cash Flows

The following table sets forth our cash flows for the period indicated:

Cash Flows Provided By (Used In) Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2026 was $4.0 million, the driver being a net loss of $6.0 million and a increase in net working capital of $12.8 million offset by non-cash adjustments of $14.7 million. We will continue to evaluate our capital requirements for both short-term and long-term liquidity needs, which could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in the section of this Report entitled "Risk Factors."

Net cash provided by operating activities for the nine months ended September 30, 2025 was $14.6 million, the driver being a net loss of $5.0 million and a increase in net working capital of $1.8 million offset by non-cash adjustments of $21.4 million.

Cash Flows Provided By (Used In) Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2026 was $0.9 million, resulting from purchases of property, plant, and equipment of $17.6 million and the purchase of intangible assets of $1.0 million, offset by proceeds from rental tool recovery sales of $13.7 million and property, plant, and equipment sales of $4.0 million.

Net cash used in investing activities for the nine months ended September 30, 2025 was $12.7 million, resulting from purchases of property, plant, and equipment of $16.1 million, purchases of intangible assets of $1.4 million, and the acquisition of Titan for $5.6 million, partially offset by proceeds from rental tool recovery sales of $10.4 million.

Cash Flows Provided By (Used In) Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2026 was $4.2 million, resulting primarily from debt increases of $4.8 million offset by purchases of treasury stock of $0.7 million.

Net cash used in financing activities for the nine months ended September 30, 2025 was $3.7 million, resulting primarily from debt decreases of $2.6 million and purchases of treasury stock of $1.2 million.

Critical Accounting Policies and Estimates

The condensed consolidated financial statements included in this Report have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. We also make estimates and assumptions that affect the reported amounts and related disclosures for the periods presented. Our estimates are based on our historical experience and other factors that we believe are reasonable under the circumstances. The results of these estimates form the

basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly. Additionally, changes in assumptions, estimates or assessments due to unforeseen events or other causes could have a material impact on our financial position or results of operations.

For a description of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes to our critical accounting policies and estimates since the 2025 Form 10-K.

Recently Issued and Adopted Accounting Standards

A discussion of recent accounting pronouncements is included in Note 1 - Summary of Significant Accounting Policies, of the notes to the Interim condensed consolidated financial statements included elsewhere in this report.

JOBS Act Accounting Election

In April 2012, the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), was enacted. Section 107 of the JOBS Act provides that an "emerging growth company" may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Therefore, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended transition period and, as a result, we will not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. In addition, as an emerging growth company, we may take advantage of certain reduced disclosure and other requirements that are otherwise applicable generally to public companies. DTI will take advantage of these exemptions until such earlier time that it is no longer an emerging growth company. DTI will cease to be an emerging growth company on the earliest of (i) the last day of the fiscal year following the fifth anniversary of the first sale of common equity securities of DTI (as successor to ROC Energy Acquisition Corp.) pursuant to an effective registration statement under the Securities Act, which we expect to be December 31, 2026, (ii) the last day of the fiscal year in which its total annual gross revenue is equal to or more than $1.235 billion, (iii) the date on which it has issued more than $1.0 billion in nonconvertible debt during the previous three years or (iv) the date on which it is deemed to be a large accelerated filer under the rules of the SEC. Upon losing emerging growth company status, which we expect to occur on December 31, 2026, we will be required to adopt any deferred accounting standards and will no longer be eligible for the related reduced disclosure accommodations, including for purposes of our Annual Report on Form 10-K for the fiscal year ending December 31, 2026.