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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024

or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to
Commission File Number 1-13270
 
FLOTEK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Delaware90-0023731
(State of other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
5775 N. Sam Houston Parkway W., Suite 400, Houston, TX
77086
(Address of principal executive offices)(Zip Code)
(713) 849-9911
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par valueFTKNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.
Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒
Smaller reporting company ☒ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒
At November 4, 2024, there were 29,795,834 outstanding shares of the registrant’s common stock, $0.0001 par value.


TABLE OF CONTENTS
 
Forward-Looking Statements
PART I - FINANCIAL INFORMATION
Unaudited Condensed Consolidated Balance Sheets at September 30, 2024 and December 31, 2023
Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and 2023
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023
Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023
Notes to Unaudited Condensed Consolidated Financial Statements
PART II - OTHER INFORMATION
Legal Proceedings
Item 1ARisk Factors
SIGNATURES


2

FORWARD-LOOKING STATEMENTS
 
In this Quarterly Report on Form 10-Q (this “Quarterly Report”), unless the context otherwise requires, the terms “Flotek,” the "Company," "we," "us" and "our" refer to Flotek Industries, Inc. and its wholly-owned subsidiaries.
This Quarterly Report on Form 10-Q, and in particular, Part I, Item 2 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent the current assumptions and beliefs regarding future events of Flotek, many of which, by their nature, are inherently uncertain and outside the Company’s control. Such statements include estimates, projections, and statements related to the Company’s business plan, objectives, expected operating results, and assumptions upon which those statements are based. The forward-looking statements contained in this Quarterly Report are based on information available as of the date of this Quarterly Report.
The forward-looking statements relate to future industry trends and economic conditions, forecast performance or results of current and future initiatives and the outcome of contingencies and other uncertainties that may have a significant impact on the Company’s business, future operating results and liquidity. These forward-looking statements generally are identified by words including but not limited to, “anticipate,” “believe,” “estimate,” “commit,” “budget,” “aim,” “potential,” “schedule,” “continue,” “intend,” “expect,” “plan,” “forecast,” “target,” “think,” “likely,” “project” and similar expressions, or future-tense or conditional constructions such as “will,” “may,” “should,” “could” and “would,” or the negative thereof or other variations thereon or comparable terminology. The Company cautions that these statements are merely predictions and are not to be considered guarantees of future performance. Forward-looking statements may also include statements regarding the anticipated performance under long-term supply agreements or amendments thereto and the potential value thereof or potential revenue or liquidated damages thereunder. Forward-looking statements are based upon current expectations and assumptions that are subject to risks and uncertainties that can cause actual results to differ materially from those projected, anticipated or implied.
A detailed discussion of potential risks and uncertainties that could cause actual results and events to differ materially from forward-looking statements include, but are not limited to, those discussed in Part I, Item 1A — “Risk Factors” of the Annual Report on Form 10-K for the year ended December 31, 2023 (“Annual Report” or “2023 Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on March 15, 2024, and periodically in subsequent reports filed with the SEC. The Company has no obligation, and we disclaim any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information or future events, except as required by law.
In certain places in this Quarterly Report on Form 10-Q, we may refer to statements provided by third parties that purport to describe trends or developments in supply chain or energy exploration and production activity and we specifically disclaim any responsibility for the accuracy and completeness of such information and have undertaken no steps to update or independently verify such information.

The following information contained in this Quarterly Report on Form 10-Q should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in Part 1, Item 1 of this Quarterly Report on Form 10-Q and related disclosures and our 2023 Annual Report.

3

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FLOTEK INDUSTRIES INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
September 30, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$4,997 $5,851 
Restricted cash101 102 
Accounts receivable, net of allowance for credit losses of $388 and $745 at September 30, 2024 and December 31, 2023, respectively
12,220 13,687 
Accounts receivable, related party, net of allowance for credit losses of $0 at September 30, 2024 and December 31, 2023, respectively
47,064 34,569 
Inventories, net12,744 12,838 
Other current assets2,687 3,564 
Current contract asset6,480 5,836 
Total current assets86,293 76,447 
Long-term contract asset63,835 68,820 
Property and equipment, net4,958 5,129 
Operating lease right-of-use assets3,759 5,030 
Deferred tax assets, net66 300 
Other long-term assets1,738 1,787 
TOTAL ASSETS$160,649 $157,513 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$37,395 $31,705 
Accrued liabilities4,115 5,890 
Income taxes payable54 45 
Current portion of operating lease liabilities1,642 2,449 
Current portion of finance lease liabilities— 22 
Asset-based loan1,426 7,492 
Current portion of long-term debt104 179 
Total current liabilities44,736 47,782 
Deferred revenue, long-term35 35 
Long-term operating lease liabilities6,871 7,676 
Long-term debt— 60 
TOTAL LIABILITIES51,642 55,553 
Stockholders’ equity:
Preferred stock, $0.0001 par value, 100,000 shares authorized; no shares issued and outstanding
— — 
Common stock, $0.0001 par value, 240,000,000 shares authorized; 30,891,597 shares issued and 29,789,476 shares outstanding at September 30, 2024; 30,772,837 shares issued and 29,664,130 shares outstanding at December 31, 2023 (As adjusted, see Note 13)
3 3 
Additional paid-in capital (As adjusted, see Note 13)464,143 463,140 
Accumulated other comprehensive income 133 127 
Accumulated deficit(320,738)(326,806)
Treasury stock, at cost; 1,102,121 and 1,108,707 shares at September 30, 2024 and December 31, 2023, respectively (As adjusted, see Note 13)
(34,534)(34,504)
Total stockholders’ equity109,007 101,960 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$160,649 $157,513 
The accompanying Notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
4

FLOTEK INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Revenue:
Revenue from external customers$16,565 $17,806 $47,935 $47,278 
Revenue from related party33,177 29,462 88,332 98,592 
Total revenues49,742 47,268 136,267 145,870 
Cost of sales40,623 38,221 109,159 131,037 
Gross profit9,119 9,047 27,108 14,833 
Operating costs and expenses:
Selling, general, and administrative5,714 6,526 18,056 21,303 
Depreciation220 181 662 530 
Research and development462 757 1,349 2,231 
Severance costs— 2 23 (28)
Gain on sale of property and equipment— (38)(34)(38)
Gain in fair value of Contract Consideration Convertible Notes Payable— — — (29,969)
Total operating costs and expenses6,396 7,428 20,056 (5,971)
Income from operations2,723 1,619 7,052 20,804 
Other income (expense):
Paycheck protection plan loan forgiveness— — — 4,522 
Interest expense(256)(160)(842)(2,537)
Other income, net102 (91)151 (82)
Total other income (expense)(154)(251)(691)1,903 
Income before income taxes2,569 1,368 6,361 22,707 
Income tax expense (37)(81)(293)(98)
Net income$2,532 $1,287 $6,068 $22,609 
Income (loss) per common share (As adjusted, see Note 14):
Basic$0.09 $0.04 $0.21 $0.97 
Diluted $0.08 $0.04 $0.20 $(0.18)
Weighted average common shares (As adjusted, see Note 14):
Weighted average common shares used in computing basic income (loss) per common share29,613 29,358 29,498 23,291 
Weighted average common shares used in computing diluted income (loss) per common share30,897 30,688 30,655 28,034 

The accompanying Notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
5

FLOTEK INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
    
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Net income$2,532 $1,287 $6,068 $22,609 
Other comprehensive income (loss):
Foreign currency translation adjustment(52)47 6 13 
Comprehensive income$2,480 $1,334 $6,074 $22,622 


















The accompanying Notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
6

FLOTEK INDUSTRIES, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (in thousands)

Nine months ended September 30,
 20242023
Cash flows from operating activities:
Net income$6,068 $22,609 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Change in fair value of contingent consideration(46)(384)
Change in fair value of Contract Consideration Convertible Notes Payable — (29,969)
Amortization of convertible note issuance costs— 83 
Paid-in-kind interest expense — 2,284 
Amortization of contract assets4,341 3,665 
Depreciation662 530 
Amortization of asset-based loan origination costs243 36 
Provision for credit losses, net of recoveries121 97 
Provision for excess and obsolete inventory626 626 
Gain on sale of property and equipment(34)(38)
Non-cash lease expense1,661 2,316 
Stock compensation expense915 (565)
Deferred income tax expense233 50 
Paycheck protection plan loan forgiveness— (4,522)
Changes in current assets and liabilities:
Accounts receivable1,346 3,472 
Accounts receivable, related party(12,495)(2,082)
Inventories(532)(776)
Other assets849 (863)
Accounts payable5,690 60 
Accrued liabilities(1,730)(3,179)
Operating lease liabilities(2,002)(2,636)
Income taxes payable9 (54)
Interest payable— (8)
Net cash provided by (used in) operating activities5,925 (9,248)
Cash flows from investing activities:
Capital expenditures(491)(593)
Proceeds from sale of assets34 68 
Net cash used in investing activities(457)(525)
Cash flows from financing activities:
Payment for forfeited stock options— (617)
Payments on long term debt(135)(104)
Proceeds from asset-based loan122,600 27,750 
Payments on asset-based loan(128,666)(24,380)
Payment of asset-based loan origination costs(164)(502)
Payments to tax authorities for shares withheld from employees(30)(246)
Proceeds from issuance of stock88 48 
Payments for finance leases(22)(24)
Net cash (used in) provided by financing activities(6,329)1,925 
Effect of changes in exchange rates on cash and cash equivalents6 13 
Net change in cash and cash equivalents and restricted cash(855)(7,835)
Cash and cash equivalents at the beginning of period5,851 12,290 
Restricted cash at the beginning of period102 100 
Cash and cash equivalents and restricted cash at beginning of period5,953 12,390 
Cash and cash equivalents at end of period4,997 4,453 
Restricted cash at the end of period101 102 
Cash and cash equivalents and restricted cash at end of period$5,098 $4,555 
The accompanying Notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
7


FLOTEK INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)

Three Months Ended September 30, 2024
 Common StockTreasury StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive
Income		Accumulated DeficitTotal Stockholders’ Equity
 Shares
Issued		Par
Value		SharesCost
Balance, June 30, 202430,867 $3 1,107 $(34,528)$463,844 $185 $(323,270)$106,234 
Net income— — — — — — 2,532 2,532 
Foreign currency translation adjustment— — — — — (52)— (52)
Stock issued under employee stock purchase plan— — (6)— 26 — — 26 
Restricted stock units vested25 — — — — — — — 
Stock compensation expense— — — — 273 — — 273 
Shares withheld to cover taxes— — 1 (6)— — — (6)
Balance, September 30, 2024
30,892 $3 1,102 $(34,534)$464,143 $133 $(320,738)$109,007 


Three Months Ended September 30, 2023
 Common StockTreasury StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive
Income		Accumulated DeficitTotal Stockholders’ Equity
 Shares
Issued		Par
Value		SharesCost
(As adjusted, see Note 13)
Balance, June 30, 202326,370 $3 1,113 $(34,480)$462,529 $147 $(330,197)$98,002 
Net income— — — — — — 1,287 1,287 
Foreign currency translation adjustment— — — — — 47 — 47 
Stock issued under employee stock purchase plan— — (4)— 15 — — 15 
Restricted stock granted145 — — — — — — — 
Restricted stock forfeited— — 1 — — — — — 
Stock compensation expense— — — — 270 — — 270 
Shares withheld to cover taxes(3)— — (2)(15)— — (17)
Exercise of pre-funded warrants4,228 — — — — — — — 
Balance, September 30, 2023
30,740 $3 1,110 $(34,482)$462,799 $194 $(328,910)$99,604 









The accompanying Notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
8

FLOTEK INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(continued)
(in thousands)

Nine Months Ended September 30, 2024
 Common StockTreasury StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive
Income		Accumulated DeficitTotal Stockholders’ Equity
 Shares
Issued		Par
Value		SharesCost
Balance, December 31, 202330,773 $3 1,109 $(34,504)$463,140 $127 $(326,806)$101,960 
Net income— — — — — — 6,068 6,068 
Foreign currency translation adjustment— — — — — 6 — 6 
Stock issued under employee stock purchase plan— — (25)— 88 — — 88 
Restricted stock granted94 — — — — — — — 
Restricted stock forfeited— — 11 — — — — — 
Restricted stock units vested25 — — — — — — — 
Stock compensation expense— — — — 915 — — 915 
Shares withheld to cover taxes— — 7 (30)— — — (30)
Balance, September 30, 2024
30,892 $3 1,102 $(34,534)$464,143 $133 $(320,738)$109,007 


Nine Months Ended September 30, 2023
 Common StockTreasury StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive
Income		Accumulated DeficitTotal Stockholders’ Equity
 Shares
Issued		Par
Value		SharesCost
(As adjusted, see Note 13)
Balance, December 31, 202213,986 $1 1,021 $(34,251)$388,184 $181 $(351,519)$2,596 
Net income— — — — — — 22,609 22,609 
Foreign currency translation adjustment— — — — — 13 — 13 
Stock issued under employee stock purchase plan— — (12)— 48 — — 48 
Restricted stock granted148 — — — — — — — 
Restricted stock forfeited(7)— 65 — — — — — 
Restricted stock units vested82 — — — — — — — 
Forfeited stock options purchased— — — — (617)— — (617)
Stock compensation expense— — — (565)— — (565)
Shares withheld to cover taxes(3)36 (231)(15)— — (246)
Exercise of pre-funded warrants4,228 — — — — — — — 
Issuance of stock warrants, net of transaction fee— — — — 15,092 — — 15,092 
Conversion of convertible notes payable to Pre-Funded Warrants— — — — 11,040 — — 11,040 
Conversion of convertible notes payable to Common Stock1,723 — — — 8,996 — — 8,996 
Conversion of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable to Common Stock10,583 2 — — 40,636 — — 40,638 
Balance, September 30, 2023
30,740 $3 1,110 $(34,482)$462,799 $194 $(328,910)$99,604 






The accompanying Notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
9

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Organization and Nature of Operations
General
Flotek creates unique solutions to reduce the environmental impact of energy on air, water, land and people. A technology-driven, specialty green chemistry and data company, Flotek helps customers across industrial and commercial markets improve their environmental performance. The Company serves customer needs for both domestic and international energy markets.
The Company’s Chemistry Technologies (“CT”) segment designs, develops, manufactures, packages and distributes green specialty chemicals that help customers improve their return on invested capital, lower operational costs and realize tangible environmental benefits aimed at enhancing the profitability of hydrocarbon producers.
The Company’s Data Analytics (“DA”) segment aims to enable users to maximize the value of their hydrocarbon associated processes by providing analytics associated with their hydrocarbon streams in seconds rather than minutes or days. The real-time access to information can prevent waste, reduce reprocessing and allow users to pursue automation of their hydrocarbon streams to maximize their profitability.
The Company’s two operating segments, CT and DA, are supported by its Research & Innovation advanced laboratory capabilities. For further discussion of our operations and segments, see Note 17, “Business Segment, Geographic and Major Customer Information.”
As used herein, “Flotek,” the “Company,” “we,” “our” and “us” refers to Flotek Industries, Inc. and/or the Company’s wholly-owned subsidiaries. The use of these terms is not intended to connote any particular corporate status or relationship.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements reflect all adjustments, in the opinion of management, necessary for the fair statement of the financial condition and results of operations for the periods presented. All such adjustments are normal and recurring in nature. The financial statements, including selected notes, have been prepared in accordance with applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and do not include all information and disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for comprehensive financial statement reporting. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s 2023 Annual Report. A copy of the 2023 Annual Report is available on the SEC’s website, www.sec.gov, or on the Company’s website, www.flotekind.com. The information contained on the SEC’s website and the Company’s website does not form a part of this Quarterly Report.
All significant intercompany accounts and transactions have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries.
Sources and Uses of Liquidity
These unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company currently funds its operations with cash on hand, availability under the ABL (defined below, see Note 9, “Debt and Convertible Notes Payable”) and other liquid assets. The Company recognized $9.1 million and $2.5 million of gross profit and net income, respectively, during the three months ended September 30, 2024 and recognized $27.1 million and $6.1 million of gross profit and net income, respectively, during the nine months ended September 30, 2024. Further, the Company recognized net cash provided by operating activities of $5.9 million during the nine months ended September 30, 2024. While we believe that our cash, liquid assets, and availability under the ABL will provide us with sufficient financial resources to fund operations to meet our capital requirements and anticipated obligations as they become due, uncertainty surrounding the long-term stability and strength of the oil and gas markets, and the resulting potential impact on our customers’ ability to pay their obligations to us in a timely manner, could have a negative impact on our liquidity. The availability of capital is dependent on the Company’s operating cash flow, which is currently expected to be principally derived from the ProFrac Agreement (see Note 16, “Related Party Transactions”). Related party revenues for the three and nine months ended September 30, 2024 included Contract Shortfall Fees (defined below) of $6.8 million and $23.8 million, respectively (see Note 16, “Related Party Transactions”). Related party receivables as of September 30, 2024 included accrued Contract Shortfall Fees of $23.8 million, which will be due in the first quarter of 2025 under the terms of the ProFrac Agreement.
10

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Based upon our outlook for future cash flows from operations, which includes the collection of the Contract Shortfall Fees in the first quarter of 2025, combined with cash on hand and availability under the ABL, the Company believes it has sufficient financial resources to fund operations and meet its capital requirements and anticipated obligations as they become due in the next twelve months. While the Company cannot guarantee a sufficient level of cash flows in the future, the unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
Note 2 — Summary of Significant Accounting Policies
Apart from those matters described in this note, there have been no updates to our significant accounting policies since those reported under Note 2 of the 2023 Annual Report.
Accounts Receivable and Allowance for Credit Losses
Changes in the allowance for credit losses are as follows (in thousands):
 September 30, 2024December 31, 2023
Balance, beginning of year$745 $623 
Charges to provision for credit losses, net of recoveries121 138 
Write-offs(478)(16)
Balance, end of period$388 $745 
As of September 30, 2024 and December 31, 2023, the Company had not recorded an allowance for credit losses for the related party accounts receivable, including ProFrac Services, LLC (see Note 16, “Related Party Transactions”).
Recent Accounting Pronouncements
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”). We evaluate the applicability and impact of all authoritative guidance issued by the FASB. Guidance not listed below was assessed and determined to be either not applicable, clarifications of items listed below, immaterial or already adopted by the Company.
New Accounting Standards Issued and Not Adopted as of September 30, 2024
The FASB issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures.” This standard improves reportable segment disclosure requirements through enhanced disclosures around significant segment expenses. The amendments under this standard require interim and annual disclosures of significant segment expenses regularly provided to the chief operating decision maker (“CODM”). In addition, public entities are required to disclose the amount of “other segment items” by segment and their composition; make annual disclosures about a reportable segment’s profit/loss and assets; and clarify if the CODM uses more than one measure of a segment’s profit or loss in assessing performance and resource allocation and disclose the name and title of the CODM. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments are applied retrospectively to all prior periods presented. The Company is currently evaluating the impact of the adoption of the ASU on the related disclosures.
The FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”). The amendments under ASU 2023-09 were created as a response to requests from investors, lenders, creditors and other parties to enhance transparency and effectiveness of tax disclosures to help them better assess how an entity’s operations and related tax risks affect an entity’s tax rate and potential future cash flows. ASU 2023-09 requires that entities annually disclose the amount of taxes paid (net of refunds received) disaggregated by federal, state and foreign jurisdictions and that those amounts are also disaggregated by individual jurisdictions equal to or greater than 5% of total income taxes paid (net of funds received). ASU 2023-09 adds a requirement that entities disaggregate income (loss) from continuing operations before income tax expense (benefit) between domestic and foreign. The amendments also require entities to disaggregate income tax expense (benefit) by federal, state and foreign jurisdictions.
The amendments under ASU 2023-09 also remove certain prior requirements. Public business entities are no longer required to disclose the nature and estimate of change in the unrecognized tax benefits balance in the next 12 months or make a statement that an estimate cannot be determined. In addition, public business entities are no longer required to disclose the cumulative amount of each type of temporary difference for which a deferred tax liability has not been recognized due to the exception to recognizing deferred taxes related to subsidiaries and corporate joint ventures. ASU 2023-09 goes into effect for annual periods beginning after December 15, 2024 and early adoption is permitted for annual financial statements not yet issued or made
11

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
available for issuance. Adoption of the ASU is on a prospective basis, with the option to apply retrospectively. The Company is currently evaluating the impact of the adoption of the ASU on the related disclosures.
Note 3 — Revenue from Contracts with Customers
Disaggregation of Revenue
The Company differentiates revenue based on whether the source of revenue is attributable to product sales or service revenue. Product and service revenues include sales to related parties as described in Note 16, “Related Party Transactions.”
Total revenue disaggregated by revenue source is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Revenue:
Products$48,243 $45,865 $132,052 $141,695 
Services1,499 1,403 4,215 4,175 
$49,742 $47,268 $136,267 $145,870 
Disaggregation of Cost of Sales
The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs which cannot be directly attributable to either tangible goods or services.
Total cost of sales disaggregated is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Cost of sales:
Tangible goods sold$35,824 $33,350 $95,064 $116,755 
Services91 128 273 425 
Other4,708 4,743 13,822 13,857 
$40,623 $38,221 $109,159 $131,037 
Other cost of sales represent costs directly associated with the generation of revenue but which cannot be attributed directly to tangible goods sold or services. Examples of other costs of sales are certain personnel costs and equipment rental and insurance costs.
Cost of sales, between external and related party, is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Cost of sales:
Cost of sales for external customers$14,996 $14,399 $45,436 $42,471 
Cost of sales for related parties25,627 23,822 63,723 88,566 
$40,623 $38,221 $109,159 $131,037 

Note 4 - Contract Assets
Contract assets are as follows (in thousands):
September 30, 2024December 31, 2023
Contract assets$83,060 $83,060 
Less accumulated amortization(12,745)(8,404)
Contract assets, net70,315 74,656 
Less current contract assets(6,480)(5,836)
Contract assets, long term$63,835 $68,820 
12

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In connection with entering into the Initial ProFrac Agreement and Amended ProFrac Agreement on February 2, 2022 and May 17, 2022, respectively, as discussed in Note 9, “Debt and Convertible Notes Payable” and Note 16, “Related Party Transactions,” the Company recognized contract assets of $10.0 million and $69.5 million, respectively, and associated fees of $3.6 million. As of September 30, 2024 and December 31, 2023, $63.8 million and $68.8 million, respectively, of the contract assets were classified as long term based upon our estimate of the forecasted revenues from the ProFrac Agreement which will not be realized within the next twelve months of the ProFrac Agreement. The Company’s estimate of the timing of the future contract revenues is evaluated on a quarterly basis.
During the three months ended September 30, 2024 and 2023, the Company recognized $1.6 million and $1.3 million, respectively, of contract assets amortization which is recorded as a reduction of the transaction price included in the related party revenue in the consolidated statement of operations. During the nine months ended September 30, 2024 and 2023, the Company recognized $4.3 million and $3.7 million, respectively, of contract assets amortization. The below table reflects our estimated amortization per year (in thousands) based on the Company’s current forecasted revenues from the ProFrac Agreement.
Years ending December 31,Amortization
2024 (excluding the nine months ended September 30, 2024)
$1,499 
20256,833 
20268,868 
202710,117 
202810,117 
Thereafter through May 203232,881 
Total contract assets$70,315 
Based on our tests of recoverability, we did not recognize any impairment of such contract assets as of September 30, 2024.
Note 5 — Inventories
Inventories are as follows (in thousands):
September 30, 2024December 31, 2023
Raw materials$4,776 $5,299 
Finished goods13,318 13,660 
Inventories18,094 18,959 
Less reserve for excess and obsolete inventory(5,350)(6,121)
Inventories, net$12,744 $12,838 
The additional reserves recorded for the CT segment during the three months ended September 30, 2024 and 2023 were $0.2 million and $0.1 million, respectively. The Company recorded additional reserves of $16 thousand for the three months ended September 30, 2023 for the DA segment with no corresponding activity for the same period of 2024. During the nine months ended September 30, 2024 and 2023, additional reserves recorded were $0.6 million and $0.5 million, respectively, for the CT segment and $13 thousand and $0.2 million, respectively, for the DA segment.
13

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 6 — Property and Equipment
Property and equipment are as follows (in thousands):
September 30, 2024December 31, 2023
Land$886 $886 
Land improvements520 520 
Buildings and leasehold improvements5,520 5,483 
Machinery and equipment7,216 6,993 
Furniture and fixtures520 520 
Transportation equipment830 945 
Computer equipment and software1,926 1,696 
   Property and equipment17,418 17,043 
Less accumulated depreciation(12,460)(11,914)
Property and equipment, net$4,958 $5,129 
Depreciation expense totaled $0.2 million and $0.2 million for the three months ended September 30, 2024 and 2023, respectively, and $0.7 million and $0.5 million for the nine months ended September 30, 2024 and 2023, respectively.
Note 7 — Leases
The components of lease expense and supplemental cash flow information are as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
2024202320242023
Operating lease expense$640 $890 $2,176 $2,625 
Finance lease expense:
Amortization of assets4 3 11 11 
Interest on lease liabilities— 1 1 3 
Total finance lease expense 4 4 12 14 
Short-term lease expense392 138 963 160 
Total lease expense$1,036 $1,032 $3,151 $2,799 
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$1,245 $1,331 $4,232 $4,246 
Operating cash flows from finance leases7 7 30 24 
Financing cash flows from finance leases— 1 — 3 
Maturities of lease liabilities as of September 30, 2024 are as follows (in thousands):
Years ending December 31,Operating Leases
2024 (excluding the nine months ended September 30, 2024)
$611 
20252,117 
20261,810 
20271,741 
20281,602 
Thereafter3,047 
Total lease payments$10,928 
Less: Interest(2,415)
Present value of lease liabilities$8,513 
14

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Supplemental balance sheet information related to leases is as follows (in thousands):
September 30, 2024December 31, 2023
Operating Leases
Operating lease right-of-use assets$3,759 $5,030 
Current portion of operating lease liabilities1,642 2,449 
Long-term operating lease liabilities6,871 7,676 
Total operating lease liabilities$8,513 $10,125 
Finance Leases
Property and equipment$— $147 
Accumulated depreciation— (70)
Property and equipment, net$— $77 
Current portion of finance lease liabilities$— $22 
Total finance lease liabilities$— $22 
Weighted Average Remaining Lease Term
Operating leases5.5 years5.5 years
Finance leases— 0.6 years
Weighted Average Discount Rate
Operating leases9.5 %9.5 %
Finance leases— %8.5 %
Sublease Income
On April 1, 2023, the Company entered into an agreement to sublease its office and lab space in Houston, Texas beginning September 1, 2023 and continuing until October 30, 2030. The rental income from the sublease is included in the Company’s statement of operations in Other income (expense), net, and offsets the monthly rental expense of $86 thousand from the Company’s lease of the facility. Sublease rental income for future years are as follows (in thousands):
Years ending December 31,Rental Income
2024 (excluding the nine months ended September 30, 2024)
$192 
2025767 
2026767 
2027767 
2028767 
Thereafter1,406 
Total rental income$4,666 
15

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 8 — Accrued Liabilities
Current accrued liabilities are as follows (in thousands):
 September 30, 2024December 31, 2023
Severance costs$372 $648 
Payroll and benefits2,063 2,138 
Legal costs45 37 
Contingent liability for earn-out provision11 56 
Deferred revenue, current452 550 
Financed insurance751 1,573 
Other421 888 
Total current accrued liabilities$4,115 $5,890 
Note 9 — Debt and Convertible Notes Payable
Asset Based Loan
In August 2023, the Company entered into a 24-month revolving loan and security agreement in connection with an asset-based loan (the “ABL”). In connection with the second amendment to the ABL effective August 5, 2024, the maturity date was extended to August 2026, the credit availability was increased and the interest rate spread was reduced. The ABL is classified as current debt on our consolidated balance sheet due to the nature of the payment arrangements where the lender is paid from customer payments received into the Company’s collections account. As of September 30, 2024, the ABL provided up to $20.0 million of credit availability, which is limited by a borrowing base consisting of (i) 85% of eligible accounts receivable, plus (ii) 60% of the value of eligible inventory not to exceed 100% of the eligible accounts receivable, plus (iii) 60% of the value of certain real estate holdings.
As of September 30, 2024, the Company had $1.4 million outstanding with approximately $12.0 million of available borrowings under the ABL. During the three and nine months ended September 30, 2024, the Company incurred $0.3 million and $0.7 million, respectively, in interest and fees related to the ABL. As of September 30, 2024, the Company recorded $0.2 million of amortized deferred financing costs related to the ABL.
Borrowings under the ABL bear interest at the Wall Street Journal Prime Rate (subject to a floor of 5.5%) plus 2.0% per annum. The interest rate under the ABL was 10.0% as of September 30, 2024. The ABL contains an annual commitment fee equal to 1.0% of the ABL’s borrowing base. Additionally, the Company will be assessed a non-usage fee of 0.25% per quarter based on the difference between the average daily outstanding balance and the borrowing base limit of the ABL. If the ABL is terminated prior to the end of its term, the Company is required to pay an early termination fee of 2.50% of the borrowing base limit of the ABL (if terminated with more than 12 months remaining until the maturity date) or 1.50% of the borrowing base limit of the ABL (if terminated with less than 12 months remaining until the maturity date).
The ABL contains customary representations, warranties, covenants and events of default, the occurrence of which would permit the lender to accelerate the payment of any amounts borrowed. The ABL requires the Company to maintain a minimum Tangible Net Worth (as defined in the ABL) of not less than $11 million. In addition, the ABL provides the lender a blanket security interest on all or substantially all of the Company’s assets. The Company was in compliance with all of the covenants under the ABL as of September 30, 2024.
Paycheck Protection Program Loan
In April 2020, the Company received a $4.8 million loan (the “Flotek PPP loan”) under the Paycheck Protection Program (“PPP”), which was created through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). In October 2021, the Flotek PPP loan maturity date was extended from April 15, 2022 to April 15, 2025. On January 5, 2023, the Company received notice from the SBA that $4.4 million of the $4.8 million principal amount and accrued interest to that date of $0.1 million were forgiven. The remaining principal amount of $0.4 million and accrued interest is to be repaid in monthly installments of $15 thousand over the remaining term of the loan through April 15, 2025. The forgiveness of the Flotek PPP loan was accounted for as an
16

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
extinguishment of the debt and the Company recorded a $4.5 million gain in the nine months ended September 30, 2023, comprising the principal amount forgiven of $4.4 million and accrued interest of $0.1 million.
Long-term debt, including current portion, is as follows (in thousands):
September 30, 2024December 31, 2023
Flotek PPP loan
$104 $239 
Less current maturities
(104)(179)
Total long-term debt, net of current portion
$— $60 
Convertible Notes Payable
On February 2, 2022, Flotek entered into a Private Investment in Public Equity transaction (the “PIPE transaction”) with a consortium of investors to secure growth capital for the Company. Pursuant to the PIPE transaction, Flotek issued $21.2 million in aggregate initial principal amount of Convertible Notes Payable for net cash proceeds of approximately $20.1 million (the “Convertible Notes Payable”). The investors were ProFrac Holdings, LLC, Burlington Ventures Ltd., entities associated with North Sound Management, certain funds associated with one of Flotek's former directors including the D3 Family Fund and the D3 Bulldog Fund, and Firestorm Capital LLC. The Convertible Notes Payable accrued paid-in-kind interest at a rate of 10% per annum, had a maturity of one year, and were convertible into common stock of Flotek or Pre-Funded Warrants to purchase common stock of Flotek, (a) at the holder's option at any time prior to maturity, at a price of $1.088125 per share on a pre-Reverse Stock Split basis, (b) at Flotek's option, if the volume-weighted average trading price of Flotek's common stock equals or exceeds $2.50 per share on a pre-Reverse Stock Split basis, or $1.741 per share on a pre-Reverse Stock Split basis, for 20 trading days during a 30 consecutive trading day period, or (c) at maturity, at a price of $0.8705 per share on a pre-Reverse Stock Split basis. On March 21, 2022, a portion of the Convertible Notes Payable, plus accrued paid-in-kind interest thereon, were converted at the holder’s option into shares of common stock. The issuance cost was amortized on a straight-line basis over the term of the Convertible Notes Payable and the amortization was included in interest expense in the unaudited condensed consolidated statements of operations. The carrying value was recorded as additional paid in capital.
Upon maturity on February 2, 2023, the Convertible Notes Payable, excluding those held by ProFrac Holdings, LLC, with a carrying value of $9.0 million, including accrued paid-in-kind interest of $0.8 million, were converted on a pre-Reverse Stock Split basis into 10,335,840 shares of common stock (1,722,640 shares of the Company’s common stock on a post-Reverse Stock Split basis) at a price of $0.8705 per share.
The Convertible Notes Payable held by ProFrac Holding, LLC, with a carrying value of $11.0 million, including accrued paid-in-kind interest of $1.0 million, were converted on a pre-Reverse Stock Split basis, upon maturity, into 12,683,280 February 2023 Warrants with an exercise price of $0.0001 per share and were recorded as additional paid in capital upon conversion. On September 6, 2023, the February 2023 Warrants were exercised and the Company issued, on a pre-Reverse Stock Split basis, 12,683,280 shares of the Company’s common stock (2,113,880 shares of the Company’s common stock on a post-Reverse Stock Split basis).
Initial ProFrac Agreement Contract Consideration Convertible Notes Payable
On February 2, 2022, the Company entered into a long-term supply agreement with ProFrac Services, LLC (the “Initial ProFrac Agreement”), a subsidiary of ProFrac Holdings LLC, in exchange for $10 million in aggregate principal amount of Contract Consideration Convertible Notes Payable (“Initial ProFrac Agreement Contract Consideration Convertible Notes Payable”), under the same terms as the Convertible Notes Payable issued in the PIPE transaction described above, including paid-in-kind interest at a rate of 10% per annum and conversion features.
On February 2, 2023, the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable, remeasured to and carried at a fair value of $15.1 million (see Note 10, “Fair Value Measurements”), were converted on a pre-Reverse Stock Split basis, upon maturity, into 12,683,281 February 2023 Warrants with an exercise price of $0.0001 per share and were recorded as additional paid in capital upon conversion. On September 6, 2023, the February 2023 Warrants were exercised and the Company issued, on a pre-Reverse Stock Split basis, 12,683,281 shares of the Company’s common stock (2,113,881 shares of the Company’s common stock on a post-Reverse Stock Split basis).
17

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Amended ProFrac Agreement Contract Consideration Convertible Notes Payable
On May 17, 2022, the Company entered into an amendment to the Initial ProFrac Agreement (the “Amended ProFrac Agreement” and collectively with the Initial ProFrac Agreement, the “ProFrac Agreement”) upon issuance of $50 million in aggregate principal amount of Contract Consideration Convertible Notes Payable (“Amended ProFrac Agreement Contract Consideration Convertible Notes Payable”) to ProFrac. The Amended ProFrac Agreement Contract Consideration Convertible Notes Payable accrued paid-in-kind interest at a rate of 10% per annum.
On May 17, 2023, the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable, remeasured to and carried at a fair value of $40.6 million (see Note 10, “Fair Value Measurements”), were converted on a pre-Reverse Stock Split basis, upon maturity, into 63,496,922 shares of common stock at a price of $0.8705 per share. As a result of the Reverse Stock Split, these shares were converted into 10,582,821 common shares.
Note 10 — Fair Value Measurements
Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement.
•Level 1 — Quoted prices in active markets for identical assets or liabilities;
•Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
•Level 3 — Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entity’s assumptions about the inputs.
Fair Value of Other Financial Instruments
The carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accrued liabilities, accounts payable and ABL approximate fair value due to the short-term nature of these accounts.
Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy (in thousands):
September 30,December 31,
Level 1Level 2Level 32024Level 1Level 2Level 32023
Contingent earnout consideration$— $— $11 $11 $— $— $56 $56 
Total $— $— $11 $11 $— $— $56 $56 
Contingent Earnout Consideration Key Inputs
The estimated fair value of the remaining stock performance earn-out provision, with respect to the JP3 transaction, is included in accrued liabilities as of September 30, 2024 and December 31, 2023. The estimated fair value of the earn-out provision at the end of each period was valued using a Monte Carlo model analyzing 20,000 simulations performed using Geometric Brownian Motion with inputs such as risk-neutral expected growth and volatility.
September 30, 2024December 31, 2023
Risk-free interest rate4.28 %4.58 %
Expected volatility65.0 %70.0 %
Term until liquidation (years)0.63 1.38 
Stock price $4.98 $3.92 
Discount rate10.62 %11.86 %
18

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Initial ProFrac Agreement Contract Consideration Notes Payable Key Inputs
The Initial ProFrac Agreement Contract Consideration Convertible Notes Payable were measured at fair value at issuance and on a recurring basis. The Initial ProFrac Agreement Contract Consideration Convertible Notes Payable had an initial fair value of $10.0 million on February 2, 2022.
On February 2, 2023, the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable were remeasured, upon maturity, to a fair value of $15.1 million based on the pre-Reverse Stock Split closing price of the shares of common stock of $1.19, on the date of conversion. The fair value adjustment was a $0.8 million increase for the nine months ended September 30, 2023.
Amended ProFrac Agreement Contract Consideration Convertible Notes Payable Key Inputs
On May 17, 2022, the Company measured the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable classified as Level 3 using a Monte Carlo simulation at an estimated fair value of $69.5 million.
On May 17, 2023, the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable were remeasured, at maturity using a Monte Carlo simulation, to a fair value of $40.6 million based on the pre-Reverse Stock Split closing price of the shares of common stock of $0.64, on the date of conversion resulting in a gain in fair value of Amended ProFrac Agreement Contract Consideration Convertible Note Payable of $30.8 million for the nine months ended September 30, 2023.
Assets Measured at Fair Value on a Nonrecurring Basis
The Company’s non-financial assets, including property and equipment and operating lease ROU assets, are measured at fair value on a non-recurring basis and are subject to adjustment to their fair value in certain circumstances.
Level 3 Rollforward for Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents the changes in balances of liabilities for the three and nine months ended September 30, 2024 and 2023 classified as Level 3 (in thousands):
Three months ended September 30,Nine months ended September 30,
2024202320242023
Balance - beginning of period$30 $260 $56 $84,153 
Increase in principal of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable for paid-in-kind interest— — — 85 
Increase in principal of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable for paid-in-kind interest— — — 2,043 
Change in fair value of contingent earnout consideration(19)(61)(45)(384)
Change in fair value of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable— — — 786 
Change in fair value of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable— — — (30,754)
Conversion of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable on maturity— — — (15,092)
Conversion of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable on maturity— — (40,638)
Balance - end of period$11 $199 $11 $199 
19

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 11 — Income Taxes
The income tax provision (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 21% to income (loss) before income tax for the reasons set forth below:
Three months ended September 30,Nine months ended September 30,
2024202320242023
U.S. federal statutory tax rate
21.0 %21.0 %21.0 %21.0 %
State income taxes, net of federal benefit
1.5 6.1 4.7 %0.4 
Non-U.S. income taxed at different rates
5.8 7.3 (0.2)%0.5 
Increase (reduction) in tax benefit related to stock-based awards(0.3)0.7 0.5 %0.7 
Change in valuation allowance
(30.4)(5.6)(23.6)%(19.0)
Permanent differences related to CARES Act
— (16.7)— %(3.0)
Non-deductible expenses3.9 (6.6)2.3 %(0.2)
Effective income tax rate
1.5 %6.2 %4.7 %0.4 %
As of September 30, 2024, the Company had U.S. net operating loss carryforwards (“NOLs”) of $190.1 million, including $43.5 million expiring in various amounts from 2029 through 2037 which can offset 100% of taxable income and $146.6 million that has an indefinite carryforward period which can offset 80% of taxable income per year. Additionally, the Company has an estimated $91.2 million in certain state NOL carryforwards and $3.8 million in tax credit carryforwards.
As a result of the ownership change experienced in 2023, the Company’s ability to use NOLs to reduce taxable income is generally limited by Section 382 of the Internal Revenue Code of 1986 to an annual amount of $3.5 million plus net unrealized built in gain of $24.5 million. The Company’s use of NOLs arising after the date of the ownership change are not impacted by the Section 382 limitation. NOLs that exceed the Section 382 limitation in any year continue to be allowed as carryforwards until they expire and can be used to offset taxable income for years within the carryover period subject to the limitation in each year. If the Company does not generate a sufficient level of taxable income prior to the expiration of the pre-2018 NOL carryforward periods, then the ability to apply those NOLs as offsets to future taxable income is lost. Based on an analysis of the Section 382 limitation, the Company estimates that all carryforwards with the exception of $1.0 million of the state NOL carryforwards and $3.8 million of the tax credit carryforwards will be available for utilization if there is sufficient taxable income in subsequent periods. Although the ownership change will significantly limit the ability of the Company to utilize the pre-change net operating losses and credits, the Company does not expect a significant impact to its financial statements given the valuation allowance that is recorded to estimate the realizability of the deferred tax assets.
Note 12 — Commitments and Contingencies
Litigation
The Company is subject to routine litigation and other claims that arise in the normal course of business. Management is not aware of any pending or threatened lawsuits or proceedings that are expected to have a material effect on the Company’s financial position, results of operations or liquidity.
Other Commitments and Contingencies
The Company is subject to concentrations of credit risk within trade accounts receivable and related party accounts receivable, as the Company does not generally require collateral as support for trade receivables. In addition, the majority of the Company’s cash is invested in three major U.S. financial institutions and balances often exceed insurable amounts.
Note 13 — Stockholders’ Equity
Reverse stock split
On September 14, 2023, the Company announced that the Board of Directors approved a reverse stock split of its common stock at a ratio of 1-to-6 (“Reverse Stock Split”). The Reverse Stock Split was completed on September 25, 2023 and resulted in 184,438,695 issued and outstanding shares of common stock being converted into 30,739,820 shares of common stock.
20

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Reverse Stock Split had no effect on the par value or on the number of authorized shares of common stock. The Company issued one whole share of common stock to any shareholder that would have received a fractional share as a result of the Reverse Stock Split. Therefore, no fractional shares were issued in connection with the Reverse Stock Split and no cash or other consideration was paid in connection with any fractional shares that resulted from the Reverse Stock Split.
The Company adjusted the number of outstanding shares of common stock and treasury stock on the consolidated balance sheet and in the statement of changes in stockholders’ equity for all periods presented to reflect the impacts of the Reverse Stock Split. Where we disclose the number of shares of common stock within the footnotes to the consolidated financial statements we have presented both the pre-Reverse Stock Split and post-Reverse Stock Split amount as denoted.
Unless otherwise noted, all references in the consolidated financial statements and notes to condensed consolidated financial statements to the number of shares, per share data, restricted stock and stock option data have been retroactively adjusted to give effect to the Reverse Stock Split.
Conversion of Convertible Notes Payable
On February 2, 2023, the Convertible Notes Payable pursuant to the PIPE transaction discussed in Note 9, “Debt and Convertible Notes Payable,” excluding those held by ProFrac Holdings, LLC, were converted on a pre-Reverse Stock Split basis, upon maturity, into 10,335,840 shares of common stock (1,722,640 shares of common stock on a post-Reverse Stock Split basis) at a price of $0.8705 per share. The Convertible Notes Payable converted into common stock shares had a carrying value of $9.0 million, including accrued paid-in-kind interest of $0.8 million and were recorded as additional paid-in-capital upon conversion.
The Convertible Notes Payable held by ProFrac Holding, LLC, with a carrying value of $11.0 million, including accrued interest of $1.0 million, were converted on a pre-Reverse Stock Split basis, upon maturity, into 12,683,280 February 2023 Warrants with an exercise price of $0.0001 per share and were recorded as additional paid-in-capital upon conversion. On September 6, 2023, the February 2023 Warrants issued upon the conversion of the Convertible Notes Payable held by ProFrac Holding, LLC were exercised and the Company issued, on a pre-Reverse Stock Split basis, 12,683,280 shares of the Company’s common stock (2,113,880 shares of the Company’s common stock on a post-Reverse Stock Split basis).
On February 2, 2023, the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable discussed in Note 9, “Debt and Convertible Notes Payable,” remeasured to a fair value of $15.1 million upon maturity, were converted on a pre-Reverse Stock Split basis, into 12,683,281 February 2023 Warrants and were recorded as additional paid-in-capital upon conversion. On September 6, 2023, the February 2023 Warrants issued upon the conversion of the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable were exercised and the Company issued on a pre-Reverse Stock Split basis, 12,683,281 shares of the Company’s common stock (2,113,881 shares of the Company’s common stock on a post-Reverse Stock Split basis).
On May 17, 2023, the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable discussed in Note 9, “Debt and Convertible Notes Payable”, were converted on a pre-Reverse Stock Split basis, upon maturity, into 63,496,922 shares of common stock at a price of $0.8705 per share (10,582,821 shares of common stock on a post-Reverse Stock Split basis). The Contract Consideration Convertible Notes Payable converted into common stock shares, remeasured to a fair value of $40.6 million upon maturity, were recorded as additional paid-in-capital.
Pre-Funded Warrants
On June 21, 2022, ProFrac Holdings II, LLC paid $19.5 million for Pre-Funded Warrants (the “June 2022 Warrants”) of the Company. The June 2022 Warrants permit ProFrac Holdings II, LLC to purchase on a pre-Reverse Stock Split basis 13,104,839 shares of common stock of the Company (2,184,140 shares of the Company’s common stock on a post-Reverse Stock Split basis) at an exercise price equal to $0.0001 per share, subject to a $4.5 million exercise fee.
ProFrac Holdings II, LLC and its affiliates may not receive any voting or consent rights in respect of the June 2022 Warrants or the underlying shares of common stock unless and until ProFrac Holdings II, LLC has paid an additional $4.5 million to the Company; provided, however, that ProFrac Holdings II may exercise the June 2022 Warrants immediately prior to the sale of the shares of common stock subject to such exercise to a non-affiliate of ProFrac Holdings II. The additional $4.5 million will be accounted for as an equity contribution if received.
21

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 14 — Earnings (Loss) Per Share
Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period, which includes the February 2023 Warrants (See Note 9, “Debt and Convertible Notes Payable” and Note 13, “Stockholders’ Equity”). Diluted earnings (loss) per common share is calculated by dividing the adjusted net income (loss) by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. Potentially dilutive common share equivalents consist of incremental shares of common stock issuable upon conversion of convertible notes payable, exercise of stock warrants and vesting and settlement of stock awards. The dilutive effect of non-vested stock issued under share‑based compensation plans, shares issuable under the Employee Stock Purchase Plan (ESPP), employee stock options outstanding, and the Pre-Funded stock warrants are computed using the treasury stock method. The dilutive effect of the Convertible Notes is computed using the if‑converted method.
For all periods presented in the table below, weighted average shares and earnings (loss) per share reflect the effects of the Reverse Stock Split. The calculation of the basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2024 and 2023 is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Numerator:
Net income for basic earnings per share$2,532 $1,287 $6,068 $22,609 
Adjustments to net income available to shareholders
Paid-in-Kind interest expense on convertible notes payable and Contract Consideration Convertible Notes Payable— — — 2,284 
Valuation gain on Contract Consideration Convertible Notes Payable carried at fair value— — — (29,969)
Adjusted net income (loss) for diluted earnings per share$2,532 $1,287 $6,068 $(5,076)
Denominator:
Basic weighted average shares outstanding29,613 29,358 29,498 23,291 
Dilutive effect of convertible notes payable— — — 4,743 
Dilutive effect of warrants outstanding1,190 1,238 1,029 — 
Dilutive effect of stock options and restricted shares94 92 128 — 
Diluted weighted average shares outstanding30,897 30,688 30,655 28,034 
Basic earnings per share$0.09 $0.04 $0.21 $0.97 
Diluted earnings (loss) per share$0.08 $0.04 $0.20 $(0.18)
Anti-dilutive incremental shares excluded from denominator for diluted earnings computation
Average number of diluted shares for June 2022 stock warrants (1)
— — — 1,308 
Average number of diluted shares for options and restricted stock (1)
— — — 111 
(1) These items were not included in the dilution calculation for the nine months ended September 30, 2023 due to their anti-dilutive effect as it would reduce the loss per share.
22

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 15 — Supplemental Cash Flow Information
Supplemental cash flow information is as follows (in thousands):
        
 Nine months ended September 30,
 20242023
Supplemental cash flow information:
Interest paid$654 $36 
Income taxes50 — 
Supplemental non cash financing and investing activities:
Conversion of convertible notes payable to common stock— 8,996 
Conversion of convertible notes payable to February 2023 Warrants— 11,040 
Conversion of Initial Contract Consideration Convertible Notes Payable to February 2023 Warrants— 15,092 
Conversion of Amended Contract Consideration Convertible Notes Payable to common stock— 40,638 
Note 16— Related Party Transactions
On February 2, 2022, the Company entered into the Initial ProFrac Agreement, upon issuance of $10 million in aggregate principal amount of the convertible notes (the “Contract Consideration Convertible Notes Payable”) to ProFrac Holdings LLC (see Note 9, “Debt and Convertible Notes Payable”). Under the Initial ProFrac Agreement, ProFrac Services, LLC is obligated to order chemicals from the Company at least equal to the greater of (a) the chemicals required for 33% of ProFrac Services, LLC’s hydraulic fracturing fleets and (b) a baseline measured by the first ten hydraulic fracturing fleets deployed by ProFrac Services, LLC during the term of the Initial ProFrac Agreement. If the minimum volumes are not achieved in any given year, ProFrac Services LLC shall pay to the Company, as liquidated damages an amount equal to twenty-five percent (25%) of the difference between (i) the aggregate purchase price of the quantity of products comprising the minimum purchase obligation and (ii) the actual purchased volume during such calendar year (“Contract Shortfall Fees”).
On May 17, 2022, the Company entered into the Amended ProFrac Agreement upon issuance of $50 million in aggregate principal amount of Contract Consideration Convertible Notes Payable (see Note 9, “Debt and Convertible Notes Payable”). The Initial ProFrac Agreement was amended to (a) increase ProFrac Services LLC’s minimum purchase obligation for each year to the greater of 70% of ProFrac Services LLC’s requirements and a baseline measured by ProFrac Services, LLC’s first 30 hydraulic fracturing fleets, and (b) increase the term to 10 years.
On February 2, 2023, the Company entered into an amendment to the ProFrac Agreement (the “Amended ProFrac Agreement No. 2”). The Amended ProFrac Agreement No. 2 has an effective date of January 1, 2023. The ProFrac Agreement was amended to (1) provide a ramp-up period from January 1, 2023 to May 31, 2023 for ProFrac Services, LLC to increase the number of active hydraulic fracturing fleets to 30 fleets, (2) waive any Contract Shortfall Fee payment relating to any potential order shortfall prior to January 1, 2023, (3) add additional fees to certain products, and (4) provide margin increases based on margins with non-ProFrac customers.
The current measurement period for Contract Shortfall Fees is January 1, 2024 through December 31, 2024. The Company does not expect that the minimum purchase requirements will be met during the current measurement period, and as a result, related party revenues for the nine months ended September 30, 2024 reflect variable consideration for Contract Shortfall Fees of $23.8 million, which will be due in the first quarter of 2025 under the terms of the ProFrac Agreement. The measurement period for 2023 was June 1, 2023 through December 31, 2023. Related party revenues for the nine months ended September 30, 2023 included $10.0 million of Contract Shortfall Fees.
On February 2, 2023, the Convertible Notes Payable held by ProFrac Holding, LLC, with a carrying value of $11.0 million, including accrued paid-in-kind interest of $1.0 million, were converted on a pre-Reverse Stock Split basis, upon maturity, into 12,683,280 February 2023 Warrants (see Note 9, “Debt and Convertible Notes Payable” and Note 13, “Stockholders’ Equity”) and subsequently exercised on September 6, 2023.
23

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On February 2, 2023, the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable, with a carrying value of $11.0 million, including accrued interest of $1.0 million, were converted on a pre-Reverse Stock Split basis, upon maturity, into 12,683,281 February 2023 Warrants and subsequently exercised on September 6, 2023 (see Note 9, “Debt and Convertible Notes Payable” and Note 13, “Stockholders’ Equity”). The fair value of the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable, as of February 2, 2023, was $15.1 million (see Note 10, “Fair Value Measurements”).
On May 17, 2023, the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable were converted on a pre-Reverse Stock Split basis, upon maturity, into 63,496,922 shares of common stock at a price of $0.8705 per share (see Note 9, “Debt and Convertible Notes Payable” and Note 13, “Stockholders’ Equity”). The fair value of the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable, as of May 17, 2023 was $40.6 million (see Note 10, “Fair Value Measurements”). As a result of the Reverse Stock Split, these shares were converted into 10,582,821 common shares.
During the three months ended September 30, 2024 and 2023, the Company’s revenues from ProFrac Services, LLC were $33.2 million and $29.5 million, respectively. For the three months ended September 30, 2024 and 2023, these revenues were net of amortization of contract assets of $1.6 million and $1.3 million, respectively. Cost of sales attributable to these revenues were $25.6 million and $23.8 million, respectively, for the three months ended September 30, 2024 and 2023. During the nine months ended September 30, 2024 and 2023, the Company’s revenues from ProFrac Services, LLC were $88.3 million and $98.6 million, respectively. For the nine months ended September 30, 2024 and 2023, these revenues were net of amortization of contract assets of $4.3 million and $3.7 million, respectively. Cost of sales attributable to these revenues were $63.7 million and $88.6 million, respectively, for the nine months ended September 30, 2024 and 2023.
As of September 30, 2024 and December 31, 2023 our accounts receivable from ProFrac Services, LLC was $47.1 million and $34.6 million, respectively, which is recorded in accounts receivable, related party on the consolidated balance sheet. During the nine months ended September 30, 2024, the Company collected variable consideration of $20.1 million related to the 2023 Contract Shortfall Fees, which were included in accounts receivable, related party as of December 31, 2023.
Note 17 — Business Segment, Geographic and Major Customer Information
Segment Information
Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision-maker in deciding how to allocate resources and assess performance. The operations of the Company are categorized into the following reportable segments:
Chemistry Technologies. The CT segment includes green specialty chemistries, logistics and technology services, which enable its customers to pursue improved efficiencies and performance throughout the life cycle of their wells, and also helping customers improve their ESG and operational goals. Customers of the CT segment include major integrated oil and gas companies, oilfield services companies, independent oil and gas companies, national and state-owned oil companies, and international supply chain management companies.
Data Analytics. The DA segment includes the design, development, production, sale and support of equipment and services that create and provide valuable information on the composition and properties of energy customers’ hydrocarbon fluids. The company markets products and services that support in-line data analysis of hydrocarbon components and properties. Customers of the DA segment span across the entire oil and gas market, from upstream production to midstream facilities to refineries and distribution networks.
Performance is based upon a variety of criteria. The primary financial measure is segment operating income (loss). Various functions, including certain sales and marketing activities and general and administrative activities, are provided centrally by the corporate office. Costs associated with corporate office functions, other corporate income and expense items, and income taxes are not allocated to the reportable segments.





24

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Summarized financial information of the reportable segments is as follows (in thousands):
As of and for the three months ended September 30,
Chemistry Technologies
Data Analytics
Corporate and OtherTotal
2024
Revenue from external customers
Products$13,600 $1,681 $— $15,281 
Services497 787 — 1,284 
Total revenue from external customers14,097 2,468 — 16,565 
Revenue from related party
Products32,962 — — 32,962 
Services15 200 — 215 
Total revenue from related parties32,977 200 — 33,177 
Gross profit7,944 1,175 — 9,119 
Income (loss) from operations5,559 130 (2,966)2,723 
Depreciation156 37 27 220 
Interest expense— — 256 256 
Income tax— — 37 37 
Additions to long-lived assets158 71 33 262 
2023
Revenue from external customers
Products$15,764 $1,025 $— $16,789 
Services562 455 — 1,017 
Total revenue from external customers16,326 1,480 — 17,806 
Revenue from related party
Products29,076 — — 29,076 
Services176 210 386 
Total revenue from related parties29,252 210 — 29,462 
Gross profit 8,240 807 — 9,047 
Income (loss) from operations5,519 (37)(3,863)1,619 
Depreciation149 26 6 181 
Interest expense— — 160 160 
Income tax— — 81 81 
Additions to long-lived assets— 135 — 135 
25

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of and for the nine months ended September 30,
Chemistry Technologies
Data Analytics
Corporate and OtherTotal
2024
Revenue from external customers
Products$40,427 $3,920 $— $44,347 
Services1,716 1,872 — 3,588 
Total revenue from external customers42,143 5,792 — 47,935 
Revenue from related party
Products87,705 — — 87,705 
Services27 600 — 627 
Total revenue from related parties87,732 600 — 88,332 
Gross profit24,888 2,220 — 27,108 
Income (loss) from operations17,810 (652)(10,106)7,052 
Depreciation475 108 79 662 
Interest expense— — 842 842 
Income tax— — 293 293 
Additions to long-lived assets333 105 53 491 
2023
Revenue from external customers
Products$39,150 $4,586 $— $43,736 
Services1,870 1,672 — 3,542 
Total revenue from external customers41,020 6,258 — 47,278 
Revenue from related party
Products97,956 2 — 97,958 
Services179 455 — 634 
Total revenue from related parties98,135 457 — 98,592 
Gross profit 11,279 3,554 — 14,833 
Change in fair value of Contract Consideration Convertible Notes Payable(29,969)— — (29,969)
Income (loss) from operations32,694 550 (12,440)20,804 
Paid-in-kind interest on Contract Consideration Convertible Notes Payable2,129 — — 2,129 
Paid-in-kind interest on convertible notes payable— — 155 155 
Depreciation462 61 7 530 
Other interest expense— — 253 253 
Income tax— — 98 98 
Additions to long-lived assets30 230 32 292 

Assets of the Company by reportable segments are as follows (in thousands):
September 30, 2024December 31, 2023
Chemistry Technologies$143,399 $138,559 
Data Analytics7,917 6,604 
Corporate and Other9,333 12,350 
Total assets$160,649 $157,513 
26

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Geographic Information
Revenue by country is based on the location where services are provided and products are sold. For the three and nine months ended September 30, 2024 and 2023 no country other than the U.S. accounted for more than 10% of revenue. Revenue by geographic location is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
U.S. (1)$48,498 $46,401 $131,763 $141,251 
UAE592 635 3,136 3,547 
Other countries652 232 1,368 1,072 
Total revenue$49,742 $47,268 $136,267 $145,870 
(1) Includes revenue from related party
Long-lived assets held in countries other than the U.S. are not considered material to the consolidated financial statements.
Major Customers
Revenue from major customers, as a percentage of consolidated revenue, is as follows (in thousands):
Revenue% of Total Revenue
Three months ended September 30, 2024
ProFrac Services, LLC
$33,177 66.7 %
Three months ended September 30, 2023
ProFrac Services, LLC
$29,462 62.3 %
Revenue% of Total Revenue
Nine months ended September 30, 2024
ProFrac Services, LLC
$88,332 64.8 %
Nine months ended September 30, 2023
ProFrac Services, LLC
$98,592 67.6 %
The concentration with ProFrac Services, LLC and in the oil and gas industry increases credit, commodity and business risk.
27

FLOTEK INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Major Suppliers
Expenditure with major suppliers, as a percentage of consolidated supplier expenditure, is as follows (in thousands):
Three months ended September 30,Expenditure% of Total Expenditure
2024
Supplier A$8,885 24.6 %
Supplier B5,187 14.4 %
Supplier C4,348 12.1 %
Supplier D3,782 10.5 %
2023
Supplier A$6,094 25.3 %
Supplier B5,581 23.2 %
Supplier C4,197 17.4 %
Nine months ended September 30,Expenditure% of Total Expenditure
2024
Supplier B$16,885 17.8 %
Supplier A16,639 17.5 %
Supplier C16,583 17.5 %
2023
Supplier A$36,318 32.5 %
Supplier B21,752 19.5 %
Supplier C13,151 11.8 %
Note 18 — Subsequent Event

The Company has evaluated the effects of events that have occurred subsequent to September 30, 2024 through November 7, 2024, the date at which the Company’s interim financial statements are available to be issued, and has determined that there have been no material events that would require recognition in the September 30, 2024 interim financial statements or disclosure in the notes to the interim financial statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the 2023 Annual Report and the unaudited consolidated financial statements and accompanying notes included herein. Comparative segment revenues and related financial information are discussed herein and are presented in Note 17 to our unaudited consolidated financial statements. See “Forward Looking Statements” in this report and “Risk Factors” included in our filings with the SEC, including our Quarterly Reports on Form 10-Q and our 2023 Annual Report, for a description of important factors that could cause actual results to differ from expected results. Our historical financial information may not be indicative of our future performance.
Executive Summary
Flotek creates unique solutions to reduce the environmental impact of energy on air, water, land and people. A technology-driven, specialty green chemistry and data technology company, Flotek helps customers across industrial and commercial markets improve their environmental performance. The Company serves customers needs for both domestic and international energy markets.
The Company has two operating segments, CT and DA, which are both supported by the Company’s continuing Research and Innovation (“R&I”) advanced laboratory capabilities.
Company Overview
Chemistry Technologies
The Company’s CT segment provides sustainable, optimized chemistry solutions that we believe maximize our customers value by improving return on invested capital, lowering operational costs, and providing tangible environmental benefits. The Company’s proprietary green chemistries, specialty chemistries, logistics, and technology services enable its customers to pursue improved efficiencies and performance throughout the life cycle of their desired chemical applications program. The Company designs, develops, manufactures, packages, distributes and markets optimized chemistry solutions that accelerate existing sustainability practices to reduce the environmental impact of energy on the air, water, land and people.
Customers of the CT segment include those of energy related markets, such as our related party ProFrac Services, LLC, with whom we have a long-term supply agreement, as well as industrial applications. Major integrated oil and gas companies, oilfield services companies, independent oil and gas companies, national and state-owned oil companies, geothermal energy companies, solar energy companies and advanced alternative energy companies benefit from our best-in-class technology, field operations, and continuous improvement exercises that go beyond existing sustainability practices.
ProFrac Supply Agreement
On February 2, 2022, the Company entered into the Initial ProFrac Agreement, which was subsequently amended on May 17, 2022 and February 1, 2023 (collectively, the “ProFrac Agreement”).
The ProFrac Agreement contains minimum requirements for chemistry purchases. If the minimum volumes are not achieved within the applicable measurement period, ProFrac Services, LLC is required to pay to the Company, as liquidated damages, an amount equal to twenty-five percent (25%) of the difference between (i) the aggregate purchase price of the quantity of products comprising the minimum purchase obligation and (ii) the actual purchased volume during the measurement period (“Contract Shortfall Fees”). The measurement period for Contract Shortfall Fees during 2023 was June 1, 2023 through December 31, 2023. Related party revenues for the three and nine months ended September 30, 2023 reflected Contract Shortfall Fees of $8.0 million and $10.0 million, respectively. The current measurement period for Contract Shortfall Fees is January 1, 2024 through December 31, 2024. The Company does not expect that the minimum purchase requirements will be met during the current measurement period, and as a result, related party revenues for the three and nine months ended September 30, 2024 reflect Contract Shortfall Fees of $6.8 million and $23.8 million, respectively.
Data Analytics
The DA segment delivers real-time information and insights to our customers to enable optimization of operations and reduction of emissions and their carbon intensity. Real-time composition and physical properties are delivered simultaneously on their refined fuels, natural gas liquids (“NGLs”), natural gas, crude oil, and condensates using the industry’s only field-deployable, in-line optical near-infra-red spectrometer that generates no emissions. The instrument's response is processed with advanced chemometrics modeling, artificial intelligence, and machine learning algorithms to deliver these valuable insights every 15 seconds.
We believe customers using this technology have obtained significant benefits, including additional profits, by enhancing operations in crude/condensates stabilization, blending operations, reduction of transmix, increasing efficiencies and
29

optimization of gas plants, allowing for the use of significantly lower cost field gas instead of diesel to generate power, lower emissions and protect equipment, and ensuring product quality while reducing giveaways, i.e., providing higher value products at the lower value products prices. More efficient operations have the benefit of reducing customer’s carbon footprint, e.g., less flaring and reduction in energy expenditure for compression and re-processing. Our customers in North America include the supermajors, some of the largest midstream companies and large gas processing plants. We have developed a line of Verax™ analyzers for deployment internationally, which was certified for compliance in hazardous locations and harsh weather conditions.
During the second quarter of 2024, the Environmental Protection Agency (“EPA”) designated the Company’s JP3 measurement system as an approved measurement technology with respect to recently enacted flare monitoring regulations. The optical measurement system, designed for precise measurement of net heating values in flare gases, is the first to be approved as an alternative method under the new NPS OOOOb regulations. The Company believes that this approval could facilitate opportunities to access this new application as a source of future growth.
Research & Innovation
R&I supports both business segments through green chemistry formulation, specialty chemical formulations and EPA regulatory guidance, technical support, basin and reservoir studies, data analytics and new technology projects. The purpose of R&I is to supply the Company’s business segments with enhanced products and services that generate current and future revenues, while advising Company management on opportunities concerning technology, environmental and industry trends. The R&I facilities support advances in chemistry performance, detection, optimization and manufacturing. For the three months ended September 30, 2024 and 2023, the Company incurred $0.5 million and $0.8 million, respectively, of research and development expense. For the nine months ended September 30, 2024 and 2023, the Company incurred $1.3 million and $2.2 million, respectively, of research and development expense. The Company expects that its 2024 research and development investment will continue to support new product development, especially in support of enhanced environmental demands and conventional customization initiatives for its clients.
Outlook
Our business is subject to numerous variables which impact our outlook and expectations given the shifting conditions of the industry. We have based our outlook on the market conditions we perceive today. Changes often occur.
Energy
The demand for oil and gas and related services fluctuates due to numerous factors including the supply of oil and gas, weather and macroeconomic and geopolitical conditions. Despite the near-term volatility in commodity pricing, leading to the recent weakness in onshore drilling and completion activity, particularly in basins that are weighted toward natural gas production, fundamentals for energy related services remain strong. The overall expansion of the global economy should continue to create substantial demand for all forms of energy which will increase service intensity. Independent exploration and production companies operate the majority of U.S. land rigs and react quickly to changing commodity prices. In the current commodity price environment, we expect companies operating in oil-weighted basins to maintain or increase activity while companies operating in gas-weighted basins are expected to maintain or decrease activity over the next 12 months. In general, we expect the major exploration and production companies to maintain activity levels over the next 12 months.
Digital Analytics
The use of data and digital analytics is a growing trend in all industries where technology is leveraged to analyze large datasets of operational information to improve performance, as well as for predictive maintenance, advanced safety measures and reduced environmental impact of operations. We believe Verax™ analyzers have gained a foothold in North American markets for critical applications where compositional information is needed in real-time. The technology delivers insight on valuable operations data like vapor pressure, boiling point, flash point, octane level, API (American Petroleum Institute) gravity, viscosity, BTU (British Thermal Unit) and more, simultaneously. We continue to collaborate with our customers to identify further facilities and applications where our technology has the highest value. To drive recurring revenue, we continue to build on the modular nature of our sensor and analysis packages with new data processing techniques that enhance the value of our installations. AIDA (Automated Interface Detection Algorithm) provides real-time detection of interfaces in a liquids pipeline without the need for additional sampling or chemometric modeling. The application can identify products such as refined fuels, crude and NGLs with its advanced machine learning algorithms and detect interfaces real-time versus traditional lab analysis. We believe this allows customers to cut batches quickly and accurately, reduce transmix and minimize off-spec product that requires downgrades. We are also gaining traction leveraging the Verax™ in applications where operators and service companies are using field gas as a substitute for diesel in dual fuel engines as the market moves to Tier 4 equipment and
30

eFleets. Analyzing this in real-time allows companies to maximize the field gas for diesel substitution rate providing significant cost savings while lowering emissions, reducing fuel consumption/costs, and protecting the equipment from damage.
Supply Chain
The principal supply issues facing our industry for the next twelve months are expected to include:
•Fluctuating freight costs for shipping to our customers;
•Availability of raw materials;
•Labor shortages; and
•Demand forecasting.
All bidding will require the risk of shipping costs and delays to be factored into proposals. Trucking availability and pricing will impact North American opportunities while security of delivery for sea-freight could impact sales of North American manufactured goods being delivered internationally for the foreseeable future. The overall flow of materials globally could experience price increases. Military conflicts in the Middle East could also result in supply disruption and cost increases.
Consolidated Results of Operations (in thousands)
Three months ended September 30,Nine months ended September 30,
 2024202320242023
Revenue
   Revenue from external customers$16,565 $17,806 $47,935 $47,278 
   Revenue from related party33,177 29,462 88,332 98,592 
     Total revenues49,742 47,268 136,267 145,870 
Cost of sales40,623 38,221 109,159 131,037 
Cost of sales %81.7 %80.9 %80.1 %89.8 %
Gross profit9,119 9,047 27,108 14,833 
Gross profit %18.3 %19.1 %19.9 %10.2 %
Selling general and administrative5,714 6,526 18,056 21,303 
Selling general and administrative %11.5 %13.8 %13.3 %14.6 %
Depreciation220 181 662 530 
Research and development462 757 1,349 2,231 
Severance costs— 2 23 (28)
Gain on sale of property and equipment— (38)(34)(38)
Gain in fair value of Contract Consideration
 Convertible Notes Payable		— — — (29,969)
Income from operations2,723 1,619 7,052 20,804 
Operating margin %5.5 %3.4 %5.2 %14.3 %
Interest and other (expense) income, net(154)(251)(691)1,903 
Income before income taxes2,569 1,368 6,361 22,707 
Income tax expense(37)(81)(293)(98)
Net income$2,532 $1,287 $6,068 $22,609 
Net income %5.1 %2.7 %4.5 %15.5 %
Consolidated revenue for the three months ended September 30, 2024 increased $2.5 million, or 5%, versus the same period of 2023, driven by higher related party activity under the ProFrac Agreement and increased activity in the DA segment, partially offset by decreased accrued Contract Shortfall Fees of $1.2 million and decreased revenue from external customers. Related party revenues in the CT segment are net of $1.6 million and $1.3 million of contract assets amortization for the three months ended September 30, 2024 and 2023, respectively.
31
Consolidated revenue for the nine months ended September 30, 2024 decreased $9.6 million, or 7%, versus the same period of 2023, driven by lower related party activity under the ProFrac Agreement, partially offset by an increase in accrued Contract Shortfall Fees of $13.8 million. Related party revenues in the CT segment are net of $4.3 million and $3.7 million of contract assets amortization for the nine months ended September 30, 2024 and 2023, respectively.
Consolidated cost of sales for the three months ended September 30, 2024 increased $2.4 million, or 6%, versus the respective period of 2023, primarily due to increased product sales, partially offset by lower freight costs. Gross profit margin during the third quarter of 2024 was lower than the corresponding 2023 period as a result of a shift in product mix and lower Contract Shortfall Fees during the 2024 period. Consolidated cost of sales for the nine months ended September 30, 2024 decreased $21.9 million, or 17%, versus the respective period of 2023, primarily due to decreased product sales under the ProFrac Agreement and lower freight costs. Consolidated cost of sales percentage totaled 82% for the three months ended September 30, 2024 versus 81% in the same period of 2023 and improved to 80% for the nine months ended September 30, 2024 from 90% in the same period of 2023 as a result of higher accrued Contract Shortfall Fees during the nine-month 2024 period, which have no associated costs.
SG&A expenses for the three months ended September 30, 2024 decreased $0.8 million, or 12%, versus the same period of 2023. SG&A expenses for the nine months ended September 30, 2024 decreased $3.2 million, or 15.2%, versus the same period of 2023. The decreases relate primarily to decreased professional fees and salaries partially offset by increased stock compensation expense.
Research and development (“R&D”) costs for the three and nine months ended September 30, 2024 decreased $0.3 million, or 39%, and $0.9 million, or 40%, respectively, versus the same periods of 2023 due to reduced occupancy costs, reduced development costs and reduced legal expenses partially offset by increased third-party testing costs.
Income from operations increased $1.1 million for the three months ended September 30, 2024, versus the same period in 2023. The increase is primarily driven by a $0.8 million decrease in SG&A expenses and $0.3 million decrease in R&D costs for the three months ended September 30, 2024 as compared to the same period of 2023. Income from operations decreased $13.8 million for the nine months ended September 30, 2024, versus the same period in 2023. The decrease is primarily driven by the gain in fair value of the Contract Consideration Convertible Notes Payable of $30.0 million for the nine months ended September 30, 2023 with no corresponding fair value change in the same period of 2024. This gain was partially offset by a $12.3 million increase in gross profit, a $3.2 million decrease in SG&A expenses and a $0.9 decrease in R&D costs during the nine months ended September 30, 2024 as compared to the same period of 2023.
Interest and other expense for the three months ended September 30, 2024 decreased $0.1 million, driven by decreases in interest related primarily to the Contract Consideration Convertible Notes Payable, which matured and converted in 2023. Interest and other expense for the nine months ended September 30, 2024 decreased $2.6 million driven by the $4.5 million gain for the nine months ended September 30, 2023 related to the partial forgiveness of the Flotek PPP loan with no corresponding activity in 2024. The increase was partially offset by a $1.7 million decrease in interest payments, which related primarily to the Contract Consideration Convertible Notes Payable, which matured and converted in 2023.
The Company’s income tax expense for the nine months ended September 30, 2024 and 2023 was $0.3 million and $0.1 million, respectively.
Results by Segment (in thousands):
Chemistry Technologies Results of Operations:
Three months ended September 30,Nine months ended September 30,
2024202320242023
Revenue from external customers$14,097 $16,326 $42,143 $41,020 
Revenue from related party32,977 29,252 87,732 98,135 
Income from operations5,559 5,519 17,810 32,694 
CT revenue from external customers for the three months ended September 30, 2024 decreased $2.2 million, or 14%, compared to the same period of 2023 driven primarily by decreased domestic activity. Revenue from related party for the three months ended September 30, 2024 increased $3.7 million, or 12.7%, compared to the same period of 2023 primarily driven by increased activity under the ProFrac Agreement partially offset by decreased accrued Contract Shortfall Fees.
32
CT revenue from external customers for the nine months ended September 30, 2024 increased $1.1 million, or 3%, compared to the same period of 2023 driven primarily by domestic activity partially offset by decreased international activity. Revenue from related party for the nine months ended September 30, 2024 decreased $10.4 million, or 11%, compared to the same period of 2023 primarily driven by decreased activity partially offset by increased accrued Contract Shortfall Fees.
Income from operations for the CT segment for the three months ended September 30, 2024 was $5.6 million compared to $5.5 million the same period of 2023.
Income from operations for the CT segment for the nine months ended September 30, 2024 decreased $14.9 million compared to the same period of 2023. The decrease is primarily due to the gain in fair value of the Contract Consideration Convertible Notes Payable of $30.0 million for the nine months ended September 30, 2023 with no corresponding valuation changes in the same period of 2024. The decrease was partially offset by increased gross profit of $13.6 million for the nine months ended September 30, 2024 which was related to accrued Contract Shortfall Fees and cost management initiatives.
Data Analytics Results of Operations:
Three months ended September 30,Nine months ended September 30,
2024202320242023
Revenue from external customers$2,468 $1,480 $5,792 $6,258 
Revenue from related party200 210 600 457 
Income (loss) from operations130 (37)(652)550 
DA revenue from external customers for the three months ended September 30, 2024 increased $1.0 million, or 67%, compared to the same period of 2023 primarily due to increased unit sales. Revenue from related party for the three months ended September 30, 2024 was $0.2 million relating to services provided to ProFrac compared to $0.2 million for the same period in 2023. DA revenue from external customers for the nine months ended September 30, 2024 decreased $0.5 million, or 7%, compared to the same period of 2023 primarily due to reduced unit sales. Revenue from related party for the nine months ended September 30, 2024 was $0.6 million relating to services provided to ProFrac compared to $0.5 million for the same period in 2023.
Income from operations for the DA segment for the three months ended September 30, 2024 increased $0.2 million compared to the same period for 2023 primarily driven by increased activity and cost management initiatives. Income from operations for the DA segment for the nine months ended September 30, 2024 decreased $1.2 million compared to the same period for 2023 primarily driven by decreased activity and increased materials costs.
Corporate and Other Results of Operations:
Three months ended September 30,Nine months ended September 30,
2024202320242023
Loss from operations$(2,966)$(3,863)$(10,106)$(12,440)

Loss from operations for the three months ended September 30, 2024 decreased $0.9 million, or 23%, compared to the same period of 2023 attributable to decreased personnel costs. Loss from operations for the nine months ended September 30, 2024 decreased $2.3 million, or 19%, compared to the same period of 2023 attributable to decreased professional fees.
Capital Resources and Liquidity
Overview
The Company’s capital requirements relate to the acquisition and maintenance of equipment and funding working capital requirements. During the nine months ended September 30, 2024, the Company funded working capital requirements with cash on hand and borrowings under the ABL (defined below).
As of September 30, 2024, the Company had unrestricted cash and cash equivalents of $5.0 million compared to $5.9 million on December 31, 2023. In addition, at November 5, 2024, the Company had approximately $14.0 million in available borrowings under its amended ABL. During the nine months ended September 30, 2024, the Company had $7.1 million of operating income, $5.9 million of cash provided by operating activities, $0.5 million of cash used in investing activities and $6.3 million of cash used in financing activities.
33

Asset Based Loan
In August 2023, the Company entered into a 24-month revolving loan and security agreement in connection with an Asset Based Loan (the “ABL”). During August 2024, the Company entered into a second amendment to the ABL extending the maturity to August 2026, increasing the credit availability and lowering the interest rate spread. The ABL provides up to $20.0 million of credit availability, which is limited by a borrowing base consisting of (i) 85% of eligible accounts receivable, plus (ii) 60% of the value of eligible inventory not to exceed 100% of the eligible accounts receivable, plus (iii) 60% of the value of certain real estate holdings.
As of September 30, 2024, the Company had $1.4 million outstanding under the ABL. During the nine months ended September 30, 2024, the Company incurred $0.7 million in interest and fees related to the ABL. As of September 30, 2024, the Company recorded $0.2 million of unamortized deferred financing costs related to the ABL.
Borrowings under the ABL bear interest at the Wall Street Journal Prime Rate (subject to a floor of 5.50%) plus 2.0% per annum. The interest rate under the ABL was 10.0% as of September 30, 2024. The ABL contains an annual commitment fee equal to 1.0% of the ABL’s borrowing base. Additionally, the Company will be assessed a non-usage fee of 0.25% per quarter based on the difference between the average daily outstanding balance and the borrowing base limit of the ABL. If the ABL is terminated prior to the end of its term, the Company is required to pay an early termination fee of 2.50% of the borrowing base limit of the ABL (if terminated with more than 12 months remaining until the maturity date) or 1.50% of the borrowing base limit of the ABL (if terminated with less than 12 months remaining until the maturity date).
The ABL contains customary representations, warranties, covenants and events of default, the occurrence of which would permit the lender to accelerate the payment of any amounts borrowed. The ABL requires the Company to maintain a minimum Tangible Net Worth (as defined in the ABL) of not less than $11 million. In addition, the ABL provides the lender a blanket security interest on all or substantially all of the Company’s assets. The Company was in compliance with all of the covenants under the ABL as of September 30, 2024.
Sources and Uses of Liquidity
These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company currently funds its operations with cash on hand, availability under the ABL (see Note 9, “Debt and Convertible Notes Payable” in Part I, Item 1 of this Quarterly Report) and other liquid assets. The Company recognized $9.1 million and $2.5 million of gross profit and net income, respectively, during the three months ended September 30, 2024 and recognized $27.1 million and $6.1 million of gross profit and net income, respectively, during the nine months ended September 30, 2024. Further, the Company recognized net cash provided by operating activities of $5.9 million during the nine months ended September 30, 2024. While we believe that our cash, liquid assets, and availability under the ABL will provide us with sufficient financial resources to fund operations to meet our capital requirements and anticipated obligations as they become due, uncertainty surrounding the long-term stability and strength of the oil and gas markets, and the resulting potential impact on our customers’ ability to pay their obligations to us in a timely manner, could have a negative impact on our liquidity. The availability of capital is dependent on the Company’s operating cash flow, which is currently expected to be principally derived from the ProFrac Agreement (see Note 16, “Related Party Transactions” in Part I, Item 1 of this Quarterly Report). Related party revenues for the three and nine months ended September 30, 2024 included Contract Shortfall Fees of $6.8 million and $23.8 million, respectively (see Note 16, “Related Party Transactions” in Part I, Item 1 of this Quarterly Report). Related party receivables as of September 30, 2024 included accrued Contract Shortfall Fees of $23.8 million, which will be due in the first quarter of 2025 under the terms of the ProFrac Agreement.
Based upon our outlook for future cash flows from operations, which includes the collection of the Contract Shortfall Fees in the first quarter of 2025, combined with cash on hand and availability under the ABL, the Company believes it has sufficient financial resources to fund operations and meet its capital requirements and anticipated obligations as they become due in the next twelve months. While the Company cannot guarantee a sufficient level of cash flows in the future, the unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
34

Cash Flows
Consolidated cash flows by type of activity are noted below (in thousands):
 Nine months ended September 30,
 20242023
Net cash provided by (used in) operating activities$5,925 $(9,248)
Net cash used in investing activities(457)(525)
Net cash (used in) provided by financing activities(6,329)1,925 
Effect of changes in exchange rates on cash and cash equivalents6 13 
Net change in cash and cash equivalents and restricted cash$(855)$(7,835)
Operating Activities
Net cash provided by operating activities was $5.9 million during the nine months ended September 30, 2024 compared to net cash used in operating activities of $9.2 million for the same period of 2023. Consolidated net income for the nine months ended September 30, 2024 was $6.1 million compared to net income of $22.6 million for the nine months ended September 30, 2023.
During the nine months ended September 30, 2024, non-cash adjustments to net income totaled $8.7 million as compared to $25.8 million for the same period of 2023.
•For the nine months ended September 30, 2024 non-cash adjustments included non-cash positive adjustments of $0.9 million of stock compensation expense, $4.3 million amortization of contract assets and $1.7 million non-cash lease expense.
•For the nine months ended September 30, 2023 non-cash adjustments included $30.0 million for the change in fair value of Contract Consideration Convertible Notes Payable and $4.5 million related to the partial forgiveness of the PPP loan, partially offset by $2.3 million paid-in-kind interest expense and non-cash negative adjustments of $0.6 million of stock compensation expense.
During the nine months ended September 30, 2024, changes in working capital used $8.9 million of cash as compared to $6.1 million for the same period of 2023.
•For the nine months ended September 30, 2024, changes in working capital resulted primarily from an increase in related party accounts receivable of $12.5 million, decreased third party accounts receivable of $1.3 million and net inventories of $0.5 million along with decreased accrued liabilities and operating lease liabilities of $1.7 million and $2.0 million, respectively, partially offset by increases in accounts payable of $5.7 million, and other assets of $0.8 million.
•For the nine months ended September 30, 2023, changes in working capital resulted primarily from a decrease in accrued liabilities and operating lease liabilities of $3.2 million and $2.6 million, respectively, a decrease in related party accounts receivable of $2.1 million and a decrease in other assets of $0.9 million, partially offset by a $3.5 million increase in third-party accounts receivable.
Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2024 and 2023 was $0.5 million and $0.5 million, respectively, driven by capital expenditures in both periods.
Financing Activities
Net cash used in financing activities for the nine months ended September 30, 2024 was $6.3 million and relates primarily to $6.1 million in net payments on the ABL, payments for loan origination costs, payments to tax authorities for shares withheld from employees and payments for finance leases, partially offset by proceeds from the issuance of stock. Net cash provided by financing activities was $1.9 million for the nine months ended September 30, 2023, and relates primarily to payments for forfeited options, payments for loan origination costs, payments to tax authorities for shares withheld from employees and payments on finance leases, offset by $3.4 million in net proceeds from the ABL.
35

Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions, and estimates that affect the amounts reported. Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Company’s 2023 Annual Report describes the critical accounting policies and estimates used in the preparation of the Company’s condensed consolidated financial statements. Note 2, “Summary of Significant Accounting Policies,” of the Notes to Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2023 Annual Report describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company is primarily exposed to market risk from changes in raw material prices, freight costs and foreign currency exchange rates. There have been no material changes to the quantitative or qualitative disclosures about market risk set forth in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of the Company’s 2023 Annual Report.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. The Company’s disclosure controls and procedures are also designed to ensure such information is accumulated and communicated to management, including the principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance that control objectives are attained.
In accordance with Exchange Act Rules 13a–15(e) and 15d–15(e), we carried out an evaluation under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of September 30, 2024. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2024.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting (identified in connection with the evaluation required by Rule 13a-15(d) and Rule 15d-15(d) under the Exchange Act) during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
36

PART II - OTHER INFORMATION

Item 1. Legal Proceedings
Except as described in Note 12, “Commitments and Contingencies” of the Notes to Unaudited Condensed Consolidated Financial Statements contained in Part I, Item 1, there have been no material changes in the legal proceedings as described in “Item3. - Legal Proceedings” in the 2023 Annual Report.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors contained in “Item 1A.-Risk Factors” in our 2023 Annual Report, which could materially affect our business, financial condition and/or future results. As of September 30, 2024, there have been no material changes in our risk factors from those set forth in the Annual Report. The risks described in the Annual Report are not the only risks facing our company. Additional risks and uncertainties not currently known to us or those we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or future results.
Item 2. Unregistered Sales of Equity Securities
Unregistered Sales of Equity Securities
None.
Issuer Repurchases of Equity Securities
The Company’s stock compensation plans allow employees to elect to have shares withheld to satisfy their tax liabilities related to non-qualified stock options exercised or restricted stock vested or to pay the exercise price of the options. When this settlement method is elected by the employee, the Company repurchases the shares withheld upon vesting or exercise of the award. Repurchases of the Company’s equity securities during the three months ended September 30, 2024 that the Company made or were made on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act are as follows:
Period
Total Number of Shares Purchased (1)
Average Price Paid per Share
July 1, 2024 to July 31, 2024124 $4.92 
August 1, 2024 to August 31, 2024— $— 
September 1, 2024 to September 30, 20241,015 $4.52 
Total1,139 

(1) The Company purchases shares of its common stock (a) to satisfy tax withholding requirements and payment remittance obligations related to period vesting of restricted shares and exercise of non-qualified stock options and (b) to satisfy payments required for common stock upon the exercise of stock options.

Item 3. Defaults Upon Senior Securities
None.
Item  4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information

None.

37

Item  6. Exhibit
Exhibit
Number		  Description of Exhibit
2.1***
3.1  
3.2  
3.3
3.4
3.5
3.6
4.1  
4.2
4.3
4.4
4.5
10.1
31.1*
31.2*
32.1**
32.2**
101.INS*Inline 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
101.SCH*Inline XBRL Schema Document
101.CAL*Inline XBRL Calculation Linkbase Document
101.LAB*Inline XBRL Label Linkbase Document
101.PRE*Inline XBRL Presentation Linkbase Document
101.DEF*Inline XBRL Definition Linkbase Document
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*Filed with this Form 10-Q.
**Furnished with this Form 10-Q, not filed.
***Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission or its staff.

38

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.

Date: November 7, 2024
 
FLOTEK INDUSTRIES, INC.
By:   /s/    Ryan Ezell
 Ryan Ezell
 Chief Executive Officer
By:/s/    Bond Clement
Bond Clement
Chief Financial Officer (Principal Financial and Accounting Officer)




39

Exhibit 31.1
CERTIFICATION
I, Ryan Ezell, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Flotek Industries, Inc.;
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;
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;
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:
(a) 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;
(b) 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;
(c) 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
(d) 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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:
(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
(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.
 
/s/    RYAN EZELL
Ryan Ezell
Chief Executive Officer
Date: November 7, 2024


Exhibit 31.2
CERTIFICATION
I, Bond Clement, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Flotek Industries, Inc.;
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;
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;
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:
(a) 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;
(b) 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;
(c) 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
(d) 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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:
(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
(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.
 
/s/    BOND CLEMENT
Bond Clement
Chief Financial Officer
Date: November 7, 2024
 



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 Flotek Industries, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
/s/    Ryan Ezell
Ryan Ezell
Chief Executive Officer
Date: November 7, 2024



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 Flotek Industries, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
/s/   BOND CLEMENT
Bond Clement
Chief Financial Officer
Date: November 7, 2024


v3.24.3
Cover Page - shares
 9 Months Ended
Sep. 30, 2024
Nov. 04, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 1-13270  
Entity Registrant Name FLOTEK INDUSTRIES INC/CN  
Entity Incorporation, State DE  
Entity Tax Identification Number 90-0023731  
Entity Address, Street 5775 N. Sam Houston Parkway W., Suite 400,  
Entity Address, City Houston,  
Entity Address, State TX  
Entity Address, Postal Zip Code 77086  
City Area Code 713  
Local Phone Number 849-9911  
Title of each class Common Stock, $0.0001 par value  
Trading Symbol(s) FTK  
Name of each exchange on which registered NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   29,795,834
Entity Central Index Key 0000928054  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Amendment Flag false  
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 4,997 $ 5,851
Restricted cash 101 102
Inventories, net 12,744 12,838
Other current assets 2,687 3,564
Current contract asset 6,480 5,836
Total current assets 86,293 76,447
Long-term contract asset 63,835 68,820
Property and equipment, net 4,958 5,129
Operating lease right-of-use assets 3,759 5,030
Deferred tax assets, net 66 300
Other long-term assets 1,738 1,787
TOTAL ASSETS 160,649 157,513
Current liabilities:    
Accounts payable 37,395 31,705
Accrued liabilities 4,115 5,890
Income taxes payable 54 45
Current portion of operating lease liabilities 1,642 2,449
Current portion of finance lease liabilities 0 22
Asset-based loan 1,426 7,492
Current portion of long-term debt 104 179
Total current liabilities 44,736 47,782
Deferred revenue, long-term 35 35
Long-term operating lease liabilities 6,871 7,676
Long-term debt 0 60
TOTAL LIABILITIES 51,642 55,553
Stockholders’ equity:    
Preferred stock, $0.0001 par value, 100,000 shares authorized; no shares issued and outstanding 0 0
Common stock, $0.0001 par value, 240,000,000 shares authorized; 30,891,597 shares issued and 29,789,476 shares outstanding at September 30, 2024; 30,772,837 shares issued and 29,664,130 shares outstanding at December 31, 2023 (As adjusted, see Note 13) 3 3
Additional paid-in capital (As adjusted, see Note 13) 464,143 463,140
Accumulated other comprehensive income 133 127
Accumulated deficit (320,738) (326,806)
Treasury stock, at cost; 1,102,121 and 1,108,707 shares at September 30, 2024 and December 31, 2023, respectively (As adjusted, see Note 13) (34,534) (34,504)
Total stockholders’ equity 109,007 101,960
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 160,649 157,513
Third Party    
Current assets:    
Accounts receivable 12,220 13,687
Related Party    
Current assets:    
Accounts receivable $ 47,064 $ 34,569
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Accounts receivable, allowance for doubtful accounts $ 388 $ 745
Preferred stock, at par value (in dollars per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized (in shares) 100,000 100,000
Preferred stock, shares issued (in shares) 0 0
Preferred Stock, shares outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares) 240,000,000 240,000,000
Common stock, shares issued (in shares) 30,891,597 30,772,837
Common stock, shares outstanding (in shares) 29,789,476 29,664,130
Treasury stock, shares (in shares) 1,102,121 1,108,707
Third Party    
Accounts receivable, allowance for doubtful accounts $ 388 $ 745
Related Party    
Accounts receivable, allowance for doubtful accounts $ 0 $ 0
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue:        
Total revenues $ 49,742 $ 47,268 $ 136,267 $ 145,870
Cost of sales 40,623 38,221 109,159 131,037
Gross profit 9,119 9,047 27,108 14,833
Operating costs and expenses:        
Selling, general, and administrative 5,714 6,526 18,056 21,303
Depreciation 220 181 662 530
Research and development 462 757 1,349 2,231
Severance costs 0 2 23 (28)
Gain on sale of property and equipment 0 (38) (34) (38)
Gain in fair value of Contract Consideration Convertible Notes Payable 0 0 0 (29,969)
Total operating costs and expenses 6,396 7,428 20,056 (5,971)
Income from operations 2,723 1,619 7,052 20,804
Other income (expense):        
Paycheck protection plan loan forgiveness 0 0 0 4,522
Interest expense (256) (160) (842) (2,537)
Other income, net 102 (91) 151 (82)
Total other income (expense) (154) (251) (691) 1,903
Income before income taxes 2,569 1,368 6,361 22,707
Income tax expense (37) (81) (293) (98)
Net income $ 2,532 $ 1,287 $ 6,068 $ 22,609
Income (loss) per common share (As adjusted, see Note 14):        
Basic (in dollars per share) $ 0.09 $ 0.04 $ 0.21 $ 0.97
Diluted (in dollars per share) $ 0.08 $ 0.04 $ 0.20 $ (0.18)
Weighted average common shares (As adjusted, see Note 14):        
Weighted average common shares used in computing basic income (loss) per common share (in shares) 29,613 29,358 29,498 23,291
Weighted average common shares used in computing diluted income (loss) per common share (in shares) 30,897 30,688 30,655 28,034
Nonrelated Party        
Revenue:        
Total revenues $ 16,565 $ 17,806 $ 47,935 $ 47,278
Cost of sales 14,996 14,399 45,436 42,471
Related Party        
Revenue:        
Total revenues $ 33,177 $ 29,462 $ 88,332 $ 98,592
v3.24.3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Comprehensive Income [Abstract]        
Net income $ 2,532 $ 1,287 $ 6,068 $ 22,609
Other comprehensive income (loss):        
Foreign currency translation adjustment (52) 47 6 13
Comprehensive income $ 2,480 $ 1,334 $ 6,074 $ 22,622
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Cash flows from operating activities:          
Net income $ 2,532 $ 1,287 $ 6,068 $ 22,609  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:          
Change in fair value of contingent consideration     (46) (384)  
Change in fair value of Contract Consideration Convertible Notes Payable 0 0 0 (29,969)  
Amortization of convertible note issuance costs     0 83  
Paid-in-kind interest expense     0 2,284  
Amortization of contract assets     4,341 3,665  
Depreciation 220 181 662 530  
Amortization of asset-based loan origination costs     243 36  
Provision for credit losses, net of recoveries     121 97 $ 138
Provision for excess and obsolete inventory     626 626  
Gain on sale of property and equipment 0 (38) (34) (38)  
Non-cash lease expense     1,661 2,316  
Stock compensation expense     915 (565)  
Deferred income tax expense     233 50  
Paycheck protection plan loan forgiveness 0 0 0 (4,522)  
Changes in current assets and liabilities:          
Accounts receivable     1,346 3,472  
Accounts receivable, related party     (12,495) (2,082)  
Inventories     (532) (776)  
Other assets     849 (863)  
Accounts payable     5,690 60  
Accrued liabilities     (1,730) (3,179)  
Operating lease liabilities     (2,002) (2,636)  
Income taxes payable     9 (54)  
Interest payable     0 (8)  
Net cash provided by (used in) operating activities     5,925 (9,248)  
Cash flows from investing activities:          
Capital expenditures     (491) (593)  
Proceeds from sale of assets     34 68  
Net cash used in investing activities     (457) (525)  
Cash flows from financing activities:          
Payment for forfeited stock options     0 (617)  
Payments on long term debt     (135) (104)  
Proceeds from asset-based loan     122,600 27,750  
Payments on asset-based loan     (128,666) (24,380)  
Payment of asset-based loan origination costs     (164) (502)  
Payments to tax authorities for shares withheld from employees     (30) (246)  
Proceeds from issuance of stock     88 48  
Payments for finance leases     (22) (24)  
Net cash (used in) provided by financing activities     (6,329) 1,925  
Effect of changes in exchange rates on cash and cash equivalents     6 13  
Net change in cash and cash equivalents and restricted cash     (855) (7,835)  
Cash and cash equivalents at the beginning of period     5,851 12,290 12,290
Restricted cash at the beginning of period     102 100 100
Cash and cash equivalents and restricted cash at beginning of period     5,953 12,390 12,390
Cash and cash equivalents at end of period 4,997 4,453 4,997 4,453 5,851
Restricted cash at the end of period 101 102 101 102 102
Cash and cash equivalents and restricted cash at end of period $ 5,098 $ 4,555 $ 5,098 $ 4,555 $ 5,953
v3.24.3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($)
$ in Thousands
Total
Common Stock
Treasury Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Income
Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2022   13,986,000        
Beginning balance at Dec. 31, 2022 $ 2,596 $ 1 $ (34,251) $ 388,184 $ 181 $ (351,519)
Beginning balance (in shares) at Dec. 31, 2022     1,021,000      
Increase (Decrease) in Equity            
Net income 22,609         22,609
Foreign currency translation adjustment 13       13  
Stock issued under employee stock purchase plan (in shares)     (12,000)      
Stock issued under employee stock purchase plan 48     48    
Restricted stock units vested (in shares)   82,000        
Restricted stock granted (in shares)   148,000        
Restricted stock forfeited (in shares)   7,000 65,000      
Forfeited stock options purchased (617)     (617)    
Stock compensation expense (565)     (565)    
Shares withheld to cover taxes (in shares)   (3,000) (36,000)      
Shares withheld to cover taxes (246)   $ (231) (15)    
Exercise of pre-funded warrants (in shares)   4,228,000        
Issuance of stock warrants, net of transaction fee 15,092     15,092    
Conversion of convertible notes payable to Pre-Funded Warrants 11,040     11,040    
Conversion of convertible notes payable to Common Stock (in shares)   1,723,000        
Conversion of convertible notes payable to Common Stock 8,996     8,996    
Conversion of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable to Common Stock (in shares)   10,583,000        
Conversion of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable to Common Stock 40,638 $ 2   40,636    
Ending balance (in shares) at Sep. 30, 2023   30,740,000        
Ending balance at Sep. 30, 2023 99,604 $ 3 $ (34,482) 462,799 194 (328,910)
Ending balance (in shares) at Sep. 30, 2023     1,110,000      
Beginning balance (in shares) at Jun. 30, 2023   26,370,000        
Beginning balance at Jun. 30, 2023 98,002 $ 3 $ (34,480) 462,529 147 (330,197)
Beginning balance (in shares) at Jun. 30, 2023     1,113,000      
Increase (Decrease) in Equity            
Net income 1,287         1,287
Foreign currency translation adjustment 47       47  
Stock issued under employee stock purchase plan (in shares)     (4,000)      
Stock issued under employee stock purchase plan 15     15    
Restricted stock granted (in shares)   145,000        
Restricted stock forfeited (in shares)     1,000      
Stock compensation expense 270     270    
Shares withheld to cover taxes (in shares)   (3,000)        
Shares withheld to cover taxes (17)   $ (2) (15)    
Exercise of pre-funded warrants (in shares)   4,228,000        
Ending balance (in shares) at Sep. 30, 2023   30,740,000        
Ending balance at Sep. 30, 2023 $ 99,604 $ 3 $ (34,482) 462,799 194 (328,910)
Ending balance (in shares) at Sep. 30, 2023     1,110,000      
Beginning balance (in shares) at Dec. 31, 2023 30,772,837 30,773,000        
Beginning balance at Dec. 31, 2023 $ 101,960 $ 3 $ (34,504) 463,140 127 (326,806)
Beginning balance (in shares) at Dec. 31, 2023 1,108,707   1,109,000      
Increase (Decrease) in Equity            
Net income $ 6,068         6,068
Foreign currency translation adjustment 6       6  
Stock issued under employee stock purchase plan (in shares)     (25,000)      
Stock issued under employee stock purchase plan 88     88    
Restricted stock units vested (in shares)   25,000        
Restricted stock granted (in shares)   94,000        
Restricted stock forfeited (in shares)     11,000      
Stock compensation expense 915     915    
Shares withheld to cover taxes (in shares)     (7,000)      
Shares withheld to cover taxes $ (30)   $ (30)      
Ending balance (in shares) at Sep. 30, 2024 30,891,597 30,892,000        
Ending balance at Sep. 30, 2024 $ 109,007 $ 3 $ (34,534) 464,143 133 (320,738)
Ending balance (in shares) at Sep. 30, 2024 1,102,121   1,102,000      
Beginning balance (in shares) at Jun. 30, 2024   30,867,000        
Beginning balance at Jun. 30, 2024 $ 106,234 $ 3 $ (34,528) 463,844 185 (323,270)
Beginning balance (in shares) at Jun. 30, 2024     1,107,000      
Increase (Decrease) in Equity            
Net income 2,532         2,532
Foreign currency translation adjustment (52)       (52)  
Stock issued under employee stock purchase plan (in shares)     (6,000)      
Stock issued under employee stock purchase plan 26     26    
Restricted stock units vested (in shares)   25,000        
Stock compensation expense 273     273    
Shares withheld to cover taxes (in shares)     (1,000)      
Shares withheld to cover taxes $ (6)   $ (6)      
Ending balance (in shares) at Sep. 30, 2024 30,891,597 30,892,000        
Ending balance at Sep. 30, 2024 $ 109,007 $ 3 $ (34,534) $ 464,143 $ 133 $ (320,738)
Ending balance (in shares) at Sep. 30, 2024 1,102,121   1,102,000      
v3.24.3
Organization and Nature of Operations
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Nature of Operations Organization and Nature of Operations
General
Flotek creates unique solutions to reduce the environmental impact of energy on air, water, land and people. A technology-driven, specialty green chemistry and data company, Flotek helps customers across industrial and commercial markets improve their environmental performance. The Company serves customer needs for both domestic and international energy markets.
The Company’s Chemistry Technologies (“CT”) segment designs, develops, manufactures, packages and distributes green specialty chemicals that help customers improve their return on invested capital, lower operational costs and realize tangible environmental benefits aimed at enhancing the profitability of hydrocarbon producers.
The Company’s Data Analytics (“DA”) segment aims to enable users to maximize the value of their hydrocarbon associated processes by providing analytics associated with their hydrocarbon streams in seconds rather than minutes or days. The real-time access to information can prevent waste, reduce reprocessing and allow users to pursue automation of their hydrocarbon streams to maximize their profitability.
The Company’s two operating segments, CT and DA, are supported by its Research & Innovation advanced laboratory capabilities. For further discussion of our operations and segments, see Note 17, “Business Segment, Geographic and Major Customer Information.”
As used herein, “Flotek,” the “Company,” “we,” “our” and “us” refers to Flotek Industries, Inc. and/or the Company’s wholly-owned subsidiaries. The use of these terms is not intended to connote any particular corporate status or relationship.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements reflect all adjustments, in the opinion of management, necessary for the fair statement of the financial condition and results of operations for the periods presented. All such adjustments are normal and recurring in nature. The financial statements, including selected notes, have been prepared in accordance with applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and do not include all information and disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for comprehensive financial statement reporting. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s 2023 Annual Report. A copy of the 2023 Annual Report is available on the SEC’s website, www.sec.gov, or on the Company’s website, www.flotekind.com. The information contained on the SEC’s website and the Company’s website does not form a part of this Quarterly Report.
All significant intercompany accounts and transactions have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries.
Sources and Uses of Liquidity
These unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company currently funds its operations with cash on hand, availability under the ABL (defined below, see Note 9, “Debt and Convertible Notes Payable”) and other liquid assets. The Company recognized $9.1 million and $2.5 million of gross profit and net income, respectively, during the three months ended September 30, 2024 and recognized $27.1 million and $6.1 million of gross profit and net income, respectively, during the nine months ended September 30, 2024. Further, the Company recognized net cash provided by operating activities of $5.9 million during the nine months ended September 30, 2024. While we believe that our cash, liquid assets, and availability under the ABL will provide us with sufficient financial resources to fund operations to meet our capital requirements and anticipated obligations as they become due, uncertainty surrounding the long-term stability and strength of the oil and gas markets, and the resulting potential impact on our customers’ ability to pay their obligations to us in a timely manner, could have a negative impact on our liquidity. The availability of capital is dependent on the Company’s operating cash flow, which is currently expected to be principally derived from the ProFrac Agreement (see Note 16, “Related Party Transactions”). Related party revenues for the three and nine months ended September 30, 2024 included Contract Shortfall Fees (defined below) of $6.8 million and $23.8 million, respectively (see Note 16, “Related Party Transactions”). Related party receivables as of September 30, 2024 included accrued Contract Shortfall Fees of $23.8 million, which will be due in the first quarter of 2025 under the terms of the ProFrac Agreement.
Based upon our outlook for future cash flows from operations, which includes the collection of the Contract Shortfall Fees in the first quarter of 2025, combined with cash on hand and availability under the ABL, the Company believes it has sufficient financial resources to fund operations and meet its capital requirements and anticipated obligations as they become due in the next twelve months. While the Company cannot guarantee a sufficient level of cash flows in the future, the unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
v3.24.3
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Apart from those matters described in this note, there have been no updates to our significant accounting policies since those reported under Note 2 of the 2023 Annual Report.
Accounts Receivable and Allowance for Credit Losses
Changes in the allowance for credit losses are as follows (in thousands):
 September 30, 2024December 31, 2023
Balance, beginning of year$745 $623 
Charges to provision for credit losses, net of recoveries121 138 
Write-offs(478)(16)
Balance, end of period$388 $745 
As of September 30, 2024 and December 31, 2023, the Company had not recorded an allowance for credit losses for the related party accounts receivable, including ProFrac Services, LLC (see Note 16, “Related Party Transactions”).
Recent Accounting Pronouncements
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”). We evaluate the applicability and impact of all authoritative guidance issued by the FASB. Guidance not listed below was assessed and determined to be either not applicable, clarifications of items listed below, immaterial or already adopted by the Company.
New Accounting Standards Issued and Not Adopted as of September 30, 2024
The FASB issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures.” This standard improves reportable segment disclosure requirements through enhanced disclosures around significant segment expenses. The amendments under this standard require interim and annual disclosures of significant segment expenses regularly provided to the chief operating decision maker (“CODM”). In addition, public entities are required to disclose the amount of “other segment items” by segment and their composition; make annual disclosures about a reportable segment’s profit/loss and assets; and clarify if the CODM uses more than one measure of a segment’s profit or loss in assessing performance and resource allocation and disclose the name and title of the CODM. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments are applied retrospectively to all prior periods presented. The Company is currently evaluating the impact of the adoption of the ASU on the related disclosures.
The FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”). The amendments under ASU 2023-09 were created as a response to requests from investors, lenders, creditors and other parties to enhance transparency and effectiveness of tax disclosures to help them better assess how an entity’s operations and related tax risks affect an entity’s tax rate and potential future cash flows. ASU 2023-09 requires that entities annually disclose the amount of taxes paid (net of refunds received) disaggregated by federal, state and foreign jurisdictions and that those amounts are also disaggregated by individual jurisdictions equal to or greater than 5% of total income taxes paid (net of funds received). ASU 2023-09 adds a requirement that entities disaggregate income (loss) from continuing operations before income tax expense (benefit) between domestic and foreign. The amendments also require entities to disaggregate income tax expense (benefit) by federal, state and foreign jurisdictions.
The amendments under ASU 2023-09 also remove certain prior requirements. Public business entities are no longer required to disclose the nature and estimate of change in the unrecognized tax benefits balance in the next 12 months or make a statement that an estimate cannot be determined. In addition, public business entities are no longer required to disclose the cumulative amount of each type of temporary difference for which a deferred tax liability has not been recognized due to the exception to recognizing deferred taxes related to subsidiaries and corporate joint ventures. ASU 2023-09 goes into effect for annual periods beginning after December 15, 2024 and early adoption is permitted for annual financial statements not yet issued or made
available for issuance. Adoption of the ASU is on a prospective basis, with the option to apply retrospectively. The Company is currently evaluating the impact of the adoption of the ASU on the related disclosures.
v3.24.3
Revenue from Contracts with Customers
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers Revenue from Contracts with Customers
Disaggregation of Revenue
The Company differentiates revenue based on whether the source of revenue is attributable to product sales or service revenue. Product and service revenues include sales to related parties as described in Note 16, “Related Party Transactions.”
Total revenue disaggregated by revenue source is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Revenue:
Products$48,243 $45,865 $132,052 $141,695 
Services1,499 1,403 4,215 4,175 
$49,742 $47,268 $136,267 $145,870 
Disaggregation of Cost of Sales
The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs which cannot be directly attributable to either tangible goods or services.
Total cost of sales disaggregated is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Cost of sales:
Tangible goods sold$35,824 $33,350 $95,064 $116,755 
Services91 128 273 425 
Other4,708 4,743 13,822 13,857 
$40,623 $38,221 $109,159 $131,037 
Other cost of sales represent costs directly associated with the generation of revenue but which cannot be attributed directly to tangible goods sold or services. Examples of other costs of sales are certain personnel costs and equipment rental and insurance costs.
Cost of sales, between external and related party, is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Cost of sales:
Cost of sales for external customers$14,996 $14,399 $45,436 $42,471 
Cost of sales for related parties25,627 23,822 63,723 88,566 
$40,623 $38,221 $109,159 $131,037 
Contract Assets
Contract assets are as follows (in thousands):
September 30, 2024December 31, 2023
Contract assets$83,060 $83,060 
Less accumulated amortization(12,745)(8,404)
Contract assets, net70,315 74,656 
Less current contract assets(6,480)(5,836)
Contract assets, long term$63,835 $68,820 
In connection with entering into the Initial ProFrac Agreement and Amended ProFrac Agreement on February 2, 2022 and May 17, 2022, respectively, as discussed in Note 9, “Debt and Convertible Notes Payable” and Note 16, “Related Party Transactions,” the Company recognized contract assets of $10.0 million and $69.5 million, respectively, and associated fees of $3.6 million. As of September 30, 2024 and December 31, 2023, $63.8 million and $68.8 million, respectively, of the contract assets were classified as long term based upon our estimate of the forecasted revenues from the ProFrac Agreement which will not be realized within the next twelve months of the ProFrac Agreement. The Company’s estimate of the timing of the future contract revenues is evaluated on a quarterly basis.
During the three months ended September 30, 2024 and 2023, the Company recognized $1.6 million and $1.3 million, respectively, of contract assets amortization which is recorded as a reduction of the transaction price included in the related party revenue in the consolidated statement of operations. During the nine months ended September 30, 2024 and 2023, the Company recognized $4.3 million and $3.7 million, respectively, of contract assets amortization. The below table reflects our estimated amortization per year (in thousands) based on the Company’s current forecasted revenues from the ProFrac Agreement.
Years ending December 31,Amortization
2024 (excluding the nine months ended September 30, 2024)
$1,499 
20256,833 
20268,868 
202710,117 
202810,117 
Thereafter through May 203232,881 
Total contract assets$70,315 
Based on our tests of recoverability, we did not recognize any impairment of such contract assets as of September 30, 2024.
v3.24.3
Contract Assets
 9 Months Ended
Sep. 30, 2024
Revenue Recognition [Abstract]  
Contract Assets Revenue from Contracts with Customers
Disaggregation of Revenue
The Company differentiates revenue based on whether the source of revenue is attributable to product sales or service revenue. Product and service revenues include sales to related parties as described in Note 16, “Related Party Transactions.”
Total revenue disaggregated by revenue source is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Revenue:
Products$48,243 $45,865 $132,052 $141,695 
Services1,499 1,403 4,215 4,175 
$49,742 $47,268 $136,267 $145,870 
Disaggregation of Cost of Sales
The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs which cannot be directly attributable to either tangible goods or services.
Total cost of sales disaggregated is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Cost of sales:
Tangible goods sold$35,824 $33,350 $95,064 $116,755 
Services91 128 273 425 
Other4,708 4,743 13,822 13,857 
$40,623 $38,221 $109,159 $131,037 
Other cost of sales represent costs directly associated with the generation of revenue but which cannot be attributed directly to tangible goods sold or services. Examples of other costs of sales are certain personnel costs and equipment rental and insurance costs.
Cost of sales, between external and related party, is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Cost of sales:
Cost of sales for external customers$14,996 $14,399 $45,436 $42,471 
Cost of sales for related parties25,627 23,822 63,723 88,566 
$40,623 $38,221 $109,159 $131,037 
Contract Assets
Contract assets are as follows (in thousands):
September 30, 2024December 31, 2023
Contract assets$83,060 $83,060 
Less accumulated amortization(12,745)(8,404)
Contract assets, net70,315 74,656 
Less current contract assets(6,480)(5,836)
Contract assets, long term$63,835 $68,820 
In connection with entering into the Initial ProFrac Agreement and Amended ProFrac Agreement on February 2, 2022 and May 17, 2022, respectively, as discussed in Note 9, “Debt and Convertible Notes Payable” and Note 16, “Related Party Transactions,” the Company recognized contract assets of $10.0 million and $69.5 million, respectively, and associated fees of $3.6 million. As of September 30, 2024 and December 31, 2023, $63.8 million and $68.8 million, respectively, of the contract assets were classified as long term based upon our estimate of the forecasted revenues from the ProFrac Agreement which will not be realized within the next twelve months of the ProFrac Agreement. The Company’s estimate of the timing of the future contract revenues is evaluated on a quarterly basis.
During the three months ended September 30, 2024 and 2023, the Company recognized $1.6 million and $1.3 million, respectively, of contract assets amortization which is recorded as a reduction of the transaction price included in the related party revenue in the consolidated statement of operations. During the nine months ended September 30, 2024 and 2023, the Company recognized $4.3 million and $3.7 million, respectively, of contract assets amortization. The below table reflects our estimated amortization per year (in thousands) based on the Company’s current forecasted revenues from the ProFrac Agreement.
Years ending December 31,Amortization
2024 (excluding the nine months ended September 30, 2024)
$1,499 
20256,833 
20268,868 
202710,117 
202810,117 
Thereafter through May 203232,881 
Total contract assets$70,315 
Based on our tests of recoverability, we did not recognize any impairment of such contract assets as of September 30, 2024.
v3.24.3
Inventories
 9 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
Inventories Inventories
Inventories are as follows (in thousands):
September 30, 2024December 31, 2023
Raw materials$4,776 $5,299 
Finished goods13,318 13,660 
Inventories18,094 18,959 
Less reserve for excess and obsolete inventory(5,350)(6,121)
Inventories, net$12,744 $12,838 
The additional reserves recorded for the CT segment during the three months ended September 30, 2024 and 2023 were $0.2 million and $0.1 million, respectively. The Company recorded additional reserves of $16 thousand for the three months ended September 30, 2023 for the DA segment with no corresponding activity for the same period of 2024. During the nine months ended September 30, 2024 and 2023, additional reserves recorded were $0.6 million and $0.5 million, respectively, for the CT segment and $13 thousand and $0.2 million, respectively, for the DA segment.
v3.24.3
Property and Equipment
 9 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
Property and equipment are as follows (in thousands):
September 30, 2024December 31, 2023
Land$886 $886 
Land improvements520 520 
Buildings and leasehold improvements5,520 5,483 
Machinery and equipment7,216 6,993 
Furniture and fixtures520 520 
Transportation equipment830 945 
Computer equipment and software1,926 1,696 
   Property and equipment17,418 17,043 
Less accumulated depreciation(12,460)(11,914)
Property and equipment, net$4,958 $5,129 
Depreciation expense totaled $0.2 million and $0.2 million for the three months ended September 30, 2024 and 2023, respectively, and $0.7 million and $0.5 million for the nine months ended September 30, 2024 and 2023, respectively.
v3.24.3
Leases
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Leases Leases
The components of lease expense and supplemental cash flow information are as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
2024202320242023
Operating lease expense$640 $890 $2,176 $2,625 
Finance lease expense:
Amortization of assets4 3 11 11 
Interest on lease liabilities— 1 1 3 
Total finance lease expense 4 4 12 14 
Short-term lease expense392 138 963 160 
Total lease expense$1,036 $1,032 $3,151 $2,799 
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$1,245 $1,331 $4,232 $4,246 
Operating cash flows from finance leases7 7 30 24 
Financing cash flows from finance leases— 1 — 3 
Maturities of lease liabilities as of September 30, 2024 are as follows (in thousands):
Years ending December 31,Operating Leases
2024 (excluding the nine months ended September 30, 2024)
$611 
20252,117 
20261,810 
20271,741 
20281,602 
Thereafter3,047 
Total lease payments$10,928 
Less: Interest(2,415)
Present value of lease liabilities$8,513 
Supplemental balance sheet information related to leases is as follows (in thousands):
September 30, 2024December 31, 2023
Operating Leases
Operating lease right-of-use assets$3,759 $5,030 
Current portion of operating lease liabilities1,642 2,449 
Long-term operating lease liabilities6,871 7,676 
Total operating lease liabilities$8,513 $10,125 
Finance Leases
Property and equipment$— $147 
Accumulated depreciation— (70)
Property and equipment, net$— $77 
Current portion of finance lease liabilities$— $22 
Total finance lease liabilities$— $22 
Weighted Average Remaining Lease Term
Operating leases5.5 years5.5 years
Finance leases— 0.6 years
Weighted Average Discount Rate
Operating leases9.5 %9.5 %
Finance leases— %8.5 %
Sublease Income
On April 1, 2023, the Company entered into an agreement to sublease its office and lab space in Houston, Texas beginning September 1, 2023 and continuing until October 30, 2030. The rental income from the sublease is included in the Company’s statement of operations in Other income (expense), net, and offsets the monthly rental expense of $86 thousand from the Company’s lease of the facility. Sublease rental income for future years are as follows (in thousands):
Years ending December 31,Rental Income
2024 (excluding the nine months ended September 30, 2024)
$192 
2025767 
2026767 
2027767 
2028767 
Thereafter1,406 
Total rental income$4,666 
Leases Leases
The components of lease expense and supplemental cash flow information are as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
2024202320242023
Operating lease expense$640 $890 $2,176 $2,625 
Finance lease expense:
Amortization of assets4 3 11 11 
Interest on lease liabilities— 1 1 3 
Total finance lease expense 4 4 12 14 
Short-term lease expense392 138 963 160 
Total lease expense$1,036 $1,032 $3,151 $2,799 
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$1,245 $1,331 $4,232 $4,246 
Operating cash flows from finance leases7 7 30 24 
Financing cash flows from finance leases— 1 — 3 
Maturities of lease liabilities as of September 30, 2024 are as follows (in thousands):
Years ending December 31,Operating Leases
2024 (excluding the nine months ended September 30, 2024)
$611 
20252,117 
20261,810 
20271,741 
20281,602 
Thereafter3,047 
Total lease payments$10,928 
Less: Interest(2,415)
Present value of lease liabilities$8,513 
Supplemental balance sheet information related to leases is as follows (in thousands):
September 30, 2024December 31, 2023
Operating Leases
Operating lease right-of-use assets$3,759 $5,030 
Current portion of operating lease liabilities1,642 2,449 
Long-term operating lease liabilities6,871 7,676 
Total operating lease liabilities$8,513 $10,125 
Finance Leases
Property and equipment$— $147 
Accumulated depreciation— (70)
Property and equipment, net$— $77 
Current portion of finance lease liabilities$— $22 
Total finance lease liabilities$— $22 
Weighted Average Remaining Lease Term
Operating leases5.5 years5.5 years
Finance leases— 0.6 years
Weighted Average Discount Rate
Operating leases9.5 %9.5 %
Finance leases— %8.5 %
Sublease Income
On April 1, 2023, the Company entered into an agreement to sublease its office and lab space in Houston, Texas beginning September 1, 2023 and continuing until October 30, 2030. The rental income from the sublease is included in the Company’s statement of operations in Other income (expense), net, and offsets the monthly rental expense of $86 thousand from the Company’s lease of the facility. Sublease rental income for future years are as follows (in thousands):
Years ending December 31,Rental Income
2024 (excluding the nine months ended September 30, 2024)
$192 
2025767 
2026767 
2027767 
2028767 
Thereafter1,406 
Total rental income$4,666 
v3.24.3
Accrued Liabilities
 9 Months Ended
Sep. 30, 2024
Payables and Accruals [Abstract]  
Accrued Liabilities Accrued Liabilities
Current accrued liabilities are as follows (in thousands):
 September 30, 2024December 31, 2023
Severance costs$372 $648 
Payroll and benefits2,063 2,138 
Legal costs45 37 
Contingent liability for earn-out provision11 56 
Deferred revenue, current452 550 
Financed insurance751 1,573 
Other421 888 
Total current accrued liabilities$4,115 $5,890 
v3.24.3
Debt and Convertible Notes Payable
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt and Convertible Notes Payable Debt and Convertible Notes Payable
Asset Based Loan
In August 2023, the Company entered into a 24-month revolving loan and security agreement in connection with an asset-based loan (the “ABL”). In connection with the second amendment to the ABL effective August 5, 2024, the maturity date was extended to August 2026, the credit availability was increased and the interest rate spread was reduced. The ABL is classified as current debt on our consolidated balance sheet due to the nature of the payment arrangements where the lender is paid from customer payments received into the Company’s collections account. As of September 30, 2024, the ABL provided up to $20.0 million of credit availability, which is limited by a borrowing base consisting of (i) 85% of eligible accounts receivable, plus (ii) 60% of the value of eligible inventory not to exceed 100% of the eligible accounts receivable, plus (iii) 60% of the value of certain real estate holdings.
As of September 30, 2024, the Company had $1.4 million outstanding with approximately $12.0 million of available borrowings under the ABL. During the three and nine months ended September 30, 2024, the Company incurred $0.3 million and $0.7 million, respectively, in interest and fees related to the ABL. As of September 30, 2024, the Company recorded $0.2 million of amortized deferred financing costs related to the ABL.
Borrowings under the ABL bear interest at the Wall Street Journal Prime Rate (subject to a floor of 5.5%) plus 2.0% per annum. The interest rate under the ABL was 10.0% as of September 30, 2024. The ABL contains an annual commitment fee equal to 1.0% of the ABL’s borrowing base. Additionally, the Company will be assessed a non-usage fee of 0.25% per quarter based on the difference between the average daily outstanding balance and the borrowing base limit of the ABL. If the ABL is terminated prior to the end of its term, the Company is required to pay an early termination fee of 2.50% of the borrowing base limit of the ABL (if terminated with more than 12 months remaining until the maturity date) or 1.50% of the borrowing base limit of the ABL (if terminated with less than 12 months remaining until the maturity date).
The ABL contains customary representations, warranties, covenants and events of default, the occurrence of which would permit the lender to accelerate the payment of any amounts borrowed. The ABL requires the Company to maintain a minimum Tangible Net Worth (as defined in the ABL) of not less than $11 million. In addition, the ABL provides the lender a blanket security interest on all or substantially all of the Company’s assets. The Company was in compliance with all of the covenants under the ABL as of September 30, 2024.
Paycheck Protection Program Loan
In April 2020, the Company received a $4.8 million loan (the “Flotek PPP loan”) under the Paycheck Protection Program (“PPP”), which was created through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). In October 2021, the Flotek PPP loan maturity date was extended from April 15, 2022 to April 15, 2025. On January 5, 2023, the Company received notice from the SBA that $4.4 million of the $4.8 million principal amount and accrued interest to that date of $0.1 million were forgiven. The remaining principal amount of $0.4 million and accrued interest is to be repaid in monthly installments of $15 thousand over the remaining term of the loan through April 15, 2025. The forgiveness of the Flotek PPP loan was accounted for as an
extinguishment of the debt and the Company recorded a $4.5 million gain in the nine months ended September 30, 2023, comprising the principal amount forgiven of $4.4 million and accrued interest of $0.1 million.
Long-term debt, including current portion, is as follows (in thousands):
September 30, 2024December 31, 2023
Flotek PPP loan
$104 $239 
Less current maturities
(104)(179)
Total long-term debt, net of current portion
$— $60 
Convertible Notes Payable
On February 2, 2022, Flotek entered into a Private Investment in Public Equity transaction (the “PIPE transaction”) with a consortium of investors to secure growth capital for the Company. Pursuant to the PIPE transaction, Flotek issued $21.2 million in aggregate initial principal amount of Convertible Notes Payable for net cash proceeds of approximately $20.1 million (the “Convertible Notes Payable”). The investors were ProFrac Holdings, LLC, Burlington Ventures Ltd., entities associated with North Sound Management, certain funds associated with one of Flotek's former directors including the D3 Family Fund and the D3 Bulldog Fund, and Firestorm Capital LLC. The Convertible Notes Payable accrued paid-in-kind interest at a rate of 10% per annum, had a maturity of one year, and were convertible into common stock of Flotek or Pre-Funded Warrants to purchase common stock of Flotek, (a) at the holder's option at any time prior to maturity, at a price of $1.088125 per share on a pre-Reverse Stock Split basis, (b) at Flotek's option, if the volume-weighted average trading price of Flotek's common stock equals or exceeds $2.50 per share on a pre-Reverse Stock Split basis, or $1.741 per share on a pre-Reverse Stock Split basis, for 20 trading days during a 30 consecutive trading day period, or (c) at maturity, at a price of $0.8705 per share on a pre-Reverse Stock Split basis. On March 21, 2022, a portion of the Convertible Notes Payable, plus accrued paid-in-kind interest thereon, were converted at the holder’s option into shares of common stock. The issuance cost was amortized on a straight-line basis over the term of the Convertible Notes Payable and the amortization was included in interest expense in the unaudited condensed consolidated statements of operations. The carrying value was recorded as additional paid in capital.
Upon maturity on February 2, 2023, the Convertible Notes Payable, excluding those held by ProFrac Holdings, LLC, with a carrying value of $9.0 million, including accrued paid-in-kind interest of $0.8 million, were converted on a pre-Reverse Stock Split basis into 10,335,840 shares of common stock (1,722,640 shares of the Company’s common stock on a post-Reverse Stock Split basis) at a price of $0.8705 per share.
The Convertible Notes Payable held by ProFrac Holding, LLC, with a carrying value of $11.0 million, including accrued paid-in-kind interest of $1.0 million, were converted on a pre-Reverse Stock Split basis, upon maturity, into 12,683,280 February 2023 Warrants with an exercise price of $0.0001 per share and were recorded as additional paid in capital upon conversion. On September 6, 2023, the February 2023 Warrants were exercised and the Company issued, on a pre-Reverse Stock Split basis, 12,683,280 shares of the Company’s common stock (2,113,880 shares of the Company’s common stock on a post-Reverse Stock Split basis).
Initial ProFrac Agreement Contract Consideration Convertible Notes Payable
On February 2, 2022, the Company entered into a long-term supply agreement with ProFrac Services, LLC (the “Initial ProFrac Agreement”), a subsidiary of ProFrac Holdings LLC, in exchange for $10 million in aggregate principal amount of Contract Consideration Convertible Notes Payable (“Initial ProFrac Agreement Contract Consideration Convertible Notes Payable”), under the same terms as the Convertible Notes Payable issued in the PIPE transaction described above, including paid-in-kind interest at a rate of 10% per annum and conversion features.
On February 2, 2023, the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable, remeasured to and carried at a fair value of $15.1 million (see Note 10, “Fair Value Measurements”), were converted on a pre-Reverse Stock Split basis, upon maturity, into 12,683,281 February 2023 Warrants with an exercise price of $0.0001 per share and were recorded as additional paid in capital upon conversion. On September 6, 2023, the February 2023 Warrants were exercised and the Company issued, on a pre-Reverse Stock Split basis, 12,683,281 shares of the Company’s common stock (2,113,881 shares of the Company’s common stock on a post-Reverse Stock Split basis).
Amended ProFrac Agreement Contract Consideration Convertible Notes Payable
On May 17, 2022, the Company entered into an amendment to the Initial ProFrac Agreement (the “Amended ProFrac Agreement” and collectively with the Initial ProFrac Agreement, the “ProFrac Agreement”) upon issuance of $50 million in aggregate principal amount of Contract Consideration Convertible Notes Payable (“Amended ProFrac Agreement Contract Consideration Convertible Notes Payable”) to ProFrac. The Amended ProFrac Agreement Contract Consideration Convertible Notes Payable accrued paid-in-kind interest at a rate of 10% per annum.
On May 17, 2023, the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable, remeasured to and carried at a fair value of $40.6 million (see Note 10, “Fair Value Measurements”), were converted on a pre-Reverse Stock Split basis, upon maturity, into 63,496,922 shares of common stock at a price of $0.8705 per share. As a result of the Reverse Stock Split, these shares were converted into 10,582,821 common shares.
v3.24.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement.
•Level 1 — Quoted prices in active markets for identical assets or liabilities;
•Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
•Level 3 — Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entity’s assumptions about the inputs.
Fair Value of Other Financial Instruments
The carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accrued liabilities, accounts payable and ABL approximate fair value due to the short-term nature of these accounts.
Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy (in thousands):
September 30,December 31,
Level 1Level 2Level 32024Level 1Level 2Level 32023
Contingent earnout consideration$— $— $11 $11 $— $— $56 $56 
Total $— $— $11 $11 $— $— $56 $56 
Contingent Earnout Consideration Key Inputs
The estimated fair value of the remaining stock performance earn-out provision, with respect to the JP3 transaction, is included in accrued liabilities as of September 30, 2024 and December 31, 2023. The estimated fair value of the earn-out provision at the end of each period was valued using a Monte Carlo model analyzing 20,000 simulations performed using Geometric Brownian Motion with inputs such as risk-neutral expected growth and volatility.
September 30, 2024December 31, 2023
Risk-free interest rate4.28 %4.58 %
Expected volatility65.0 %70.0 %
Term until liquidation (years)0.63 1.38 
Stock price $4.98 $3.92 
Discount rate10.62 %11.86 %
Initial ProFrac Agreement Contract Consideration Notes Payable Key Inputs
The Initial ProFrac Agreement Contract Consideration Convertible Notes Payable were measured at fair value at issuance and on a recurring basis. The Initial ProFrac Agreement Contract Consideration Convertible Notes Payable had an initial fair value of $10.0 million on February 2, 2022.
On February 2, 2023, the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable were remeasured, upon maturity, to a fair value of $15.1 million based on the pre-Reverse Stock Split closing price of the shares of common stock of $1.19, on the date of conversion. The fair value adjustment was a $0.8 million increase for the nine months ended September 30, 2023.
Amended ProFrac Agreement Contract Consideration Convertible Notes Payable Key Inputs
On May 17, 2022, the Company measured the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable classified as Level 3 using a Monte Carlo simulation at an estimated fair value of $69.5 million.
On May 17, 2023, the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable were remeasured, at maturity using a Monte Carlo simulation, to a fair value of $40.6 million based on the pre-Reverse Stock Split closing price of the shares of common stock of $0.64, on the date of conversion resulting in a gain in fair value of Amended ProFrac Agreement Contract Consideration Convertible Note Payable of $30.8 million for the nine months ended September 30, 2023.
Assets Measured at Fair Value on a Nonrecurring Basis
The Company’s non-financial assets, including property and equipment and operating lease ROU assets, are measured at fair value on a non-recurring basis and are subject to adjustment to their fair value in certain circumstances.
Level 3 Rollforward for Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents the changes in balances of liabilities for the three and nine months ended September 30, 2024 and 2023 classified as Level 3 (in thousands):
Three months ended September 30,Nine months ended September 30,
2024202320242023
Balance - beginning of period$30 $260 $56 $84,153 
Increase in principal of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable for paid-in-kind interest— — — 85 
Increase in principal of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable for paid-in-kind interest— — — 2,043 
Change in fair value of contingent earnout consideration(19)(61)(45)(384)
Change in fair value of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable— — — 786 
Change in fair value of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable— — — (30,754)
Conversion of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable on maturity— — — (15,092)
Conversion of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable on maturity— — (40,638)
Balance - end of period$11 $199 $11 $199 
v3.24.3
Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The income tax provision (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 21% to income (loss) before income tax for the reasons set forth below:
Three months ended September 30,Nine months ended September 30,
2024202320242023
U.S. federal statutory tax rate
21.0 %21.0 %21.0 %21.0 %
State income taxes, net of federal benefit
1.5 6.1 4.7 %0.4 
Non-U.S. income taxed at different rates
5.8 7.3 (0.2)%0.5 
Increase (reduction) in tax benefit related to stock-based awards(0.3)0.7 0.5 %0.7 
Change in valuation allowance
(30.4)(5.6)(23.6)%(19.0)
Permanent differences related to CARES Act
— (16.7)— %(3.0)
Non-deductible expenses3.9 (6.6)2.3 %(0.2)
Effective income tax rate
1.5 %6.2 %4.7 %0.4 %
As of September 30, 2024, the Company had U.S. net operating loss carryforwards (“NOLs”) of $190.1 million, including $43.5 million expiring in various amounts from 2029 through 2037 which can offset 100% of taxable income and $146.6 million that has an indefinite carryforward period which can offset 80% of taxable income per year. Additionally, the Company has an estimated $91.2 million in certain state NOL carryforwards and $3.8 million in tax credit carryforwards.
As a result of the ownership change experienced in 2023, the Company’s ability to use NOLs to reduce taxable income is generally limited by Section 382 of the Internal Revenue Code of 1986 to an annual amount of $3.5 million plus net unrealized built in gain of $24.5 million. The Company’s use of NOLs arising after the date of the ownership change are not impacted by the Section 382 limitation. NOLs that exceed the Section 382 limitation in any year continue to be allowed as carryforwards until they expire and can be used to offset taxable income for years within the carryover period subject to the limitation in each year. If the Company does not generate a sufficient level of taxable income prior to the expiration of the pre-2018 NOL carryforward periods, then the ability to apply those NOLs as offsets to future taxable income is lost. Based on an analysis of the Section 382 limitation, the Company estimates that all carryforwards with the exception of $1.0 million of the state NOL carryforwards and $3.8 million of the tax credit carryforwards will be available for utilization if there is sufficient taxable income in subsequent periods. Although the ownership change will significantly limit the ability of the Company to utilize the pre-change net operating losses and credits, the Company does not expect a significant impact to its financial statements given the valuation allowance that is recorded to estimate the realizability of the deferred tax assets.
v3.24.3
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Litigation
The Company is subject to routine litigation and other claims that arise in the normal course of business. Management is not aware of any pending or threatened lawsuits or proceedings that are expected to have a material effect on the Company’s financial position, results of operations or liquidity.
Other Commitments and Contingencies
The Company is subject to concentrations of credit risk within trade accounts receivable and related party accounts receivable, as the Company does not generally require collateral as support for trade receivables. In addition, the majority of the Company’s cash is invested in three major U.S. financial institutions and balances often exceed insurable amounts.
v3.24.3
Stockholders’ Equity
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Stockholders’ Equity Stockholders’ Equity
Reverse stock split
On September 14, 2023, the Company announced that the Board of Directors approved a reverse stock split of its common stock at a ratio of 1-to-6 (“Reverse Stock Split”). The Reverse Stock Split was completed on September 25, 2023 and resulted in 184,438,695 issued and outstanding shares of common stock being converted into 30,739,820 shares of common stock.
The Reverse Stock Split had no effect on the par value or on the number of authorized shares of common stock. The Company issued one whole share of common stock to any shareholder that would have received a fractional share as a result of the Reverse Stock Split. Therefore, no fractional shares were issued in connection with the Reverse Stock Split and no cash or other consideration was paid in connection with any fractional shares that resulted from the Reverse Stock Split.
The Company adjusted the number of outstanding shares of common stock and treasury stock on the consolidated balance sheet and in the statement of changes in stockholders’ equity for all periods presented to reflect the impacts of the Reverse Stock Split. Where we disclose the number of shares of common stock within the footnotes to the consolidated financial statements we have presented both the pre-Reverse Stock Split and post-Reverse Stock Split amount as denoted.
Unless otherwise noted, all references in the consolidated financial statements and notes to condensed consolidated financial statements to the number of shares, per share data, restricted stock and stock option data have been retroactively adjusted to give effect to the Reverse Stock Split.
Conversion of Convertible Notes Payable
On February 2, 2023, the Convertible Notes Payable pursuant to the PIPE transaction discussed in Note 9, “Debt and Convertible Notes Payable,” excluding those held by ProFrac Holdings, LLC, were converted on a pre-Reverse Stock Split basis, upon maturity, into 10,335,840 shares of common stock (1,722,640 shares of common stock on a post-Reverse Stock Split basis) at a price of $0.8705 per share. The Convertible Notes Payable converted into common stock shares had a carrying value of $9.0 million, including accrued paid-in-kind interest of $0.8 million and were recorded as additional paid-in-capital upon conversion.
The Convertible Notes Payable held by ProFrac Holding, LLC, with a carrying value of $11.0 million, including accrued interest of $1.0 million, were converted on a pre-Reverse Stock Split basis, upon maturity, into 12,683,280 February 2023 Warrants with an exercise price of $0.0001 per share and were recorded as additional paid-in-capital upon conversion. On September 6, 2023, the February 2023 Warrants issued upon the conversion of the Convertible Notes Payable held by ProFrac Holding, LLC were exercised and the Company issued, on a pre-Reverse Stock Split basis, 12,683,280 shares of the Company’s common stock (2,113,880 shares of the Company’s common stock on a post-Reverse Stock Split basis).
On February 2, 2023, the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable discussed in Note 9, “Debt and Convertible Notes Payable,” remeasured to a fair value of $15.1 million upon maturity, were converted on a pre-Reverse Stock Split basis, into 12,683,281 February 2023 Warrants and were recorded as additional paid-in-capital upon conversion. On September 6, 2023, the February 2023 Warrants issued upon the conversion of the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable were exercised and the Company issued on a pre-Reverse Stock Split basis, 12,683,281 shares of the Company’s common stock (2,113,881 shares of the Company’s common stock on a post-Reverse Stock Split basis).
On May 17, 2023, the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable discussed in Note 9, “Debt and Convertible Notes Payable”, were converted on a pre-Reverse Stock Split basis, upon maturity, into 63,496,922 shares of common stock at a price of $0.8705 per share (10,582,821 shares of common stock on a post-Reverse Stock Split basis). The Contract Consideration Convertible Notes Payable converted into common stock shares, remeasured to a fair value of $40.6 million upon maturity, were recorded as additional paid-in-capital.
Pre-Funded Warrants
On June 21, 2022, ProFrac Holdings II, LLC paid $19.5 million for Pre-Funded Warrants (the “June 2022 Warrants”) of the Company. The June 2022 Warrants permit ProFrac Holdings II, LLC to purchase on a pre-Reverse Stock Split basis 13,104,839 shares of common stock of the Company (2,184,140 shares of the Company’s common stock on a post-Reverse Stock Split basis) at an exercise price equal to $0.0001 per share, subject to a $4.5 million exercise fee.
ProFrac Holdings II, LLC and its affiliates may not receive any voting or consent rights in respect of the June 2022 Warrants or the underlying shares of common stock unless and until ProFrac Holdings II, LLC has paid an additional $4.5 million to the Company; provided, however, that ProFrac Holdings II may exercise the June 2022 Warrants immediately prior to the sale of the shares of common stock subject to such exercise to a non-affiliate of ProFrac Holdings II. The additional $4.5 million will be accounted for as an equity contribution if received.
v3.24.3
Earnings (Loss) Per Share
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Earnings (Loss) Per Share Earnings (Loss) Per Share
Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period, which includes the February 2023 Warrants (See Note 9, “Debt and Convertible Notes Payable” and Note 13, “Stockholders’ Equity”). Diluted earnings (loss) per common share is calculated by dividing the adjusted net income (loss) by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. Potentially dilutive common share equivalents consist of incremental shares of common stock issuable upon conversion of convertible notes payable, exercise of stock warrants and vesting and settlement of stock awards. The dilutive effect of non-vested stock issued under share‑based compensation plans, shares issuable under the Employee Stock Purchase Plan (ESPP), employee stock options outstanding, and the Pre-Funded stock warrants are computed using the treasury stock method. The dilutive effect of the Convertible Notes is computed using the if‑converted method.
For all periods presented in the table below, weighted average shares and earnings (loss) per share reflect the effects of the Reverse Stock Split. The calculation of the basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2024 and 2023 is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Numerator:
Net income for basic earnings per share$2,532 $1,287 $6,068 $22,609 
Adjustments to net income available to shareholders
Paid-in-Kind interest expense on convertible notes payable and Contract Consideration Convertible Notes Payable— — — 2,284 
Valuation gain on Contract Consideration Convertible Notes Payable carried at fair value— — — (29,969)
Adjusted net income (loss) for diluted earnings per share$2,532 $1,287 $6,068 $(5,076)
Denominator:
Basic weighted average shares outstanding29,613 29,358 29,498 23,291 
Dilutive effect of convertible notes payable— — — 4,743 
Dilutive effect of warrants outstanding1,190 1,238 1,029 — 
Dilutive effect of stock options and restricted shares94 92 128 — 
Diluted weighted average shares outstanding30,897 30,688 30,655 28,034 
Basic earnings per share$0.09 $0.04 $0.21 $0.97 
Diluted earnings (loss) per share$0.08 $0.04 $0.20 $(0.18)
Anti-dilutive incremental shares excluded from denominator for diluted earnings computation
Average number of diluted shares for June 2022 stock warrants (1)
— — — 1,308 
Average number of diluted shares for options and restricted stock (1)
— — — 111 
(1) These items were not included in the dilution calculation for the nine months ended September 30, 2023 due to their anti-dilutive effect as it would reduce the loss per share.
v3.24.3
Supplemental Cash Flow Information
 9 Months Ended
Sep. 30, 2024
Supplemental Cash Flow Elements [Abstract]  
Supplemental Cash Flow Information Supplemental Cash Flow Information
Supplemental cash flow information is as follows (in thousands):
        
 Nine months ended September 30,
 20242023
Supplemental cash flow information:
Interest paid$654 $36 
Income taxes50 — 
Supplemental non cash financing and investing activities:
Conversion of convertible notes payable to common stock— 8,996 
Conversion of convertible notes payable to February 2023 Warrants— 11,040 
Conversion of Initial Contract Consideration Convertible Notes Payable to February 2023 Warrants— 15,092 
Conversion of Amended Contract Consideration Convertible Notes Payable to common stock— 40,638 
v3.24.3
Related Party Transactions
 9 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
On February 2, 2022, the Company entered into the Initial ProFrac Agreement, upon issuance of $10 million in aggregate principal amount of the convertible notes (the “Contract Consideration Convertible Notes Payable”) to ProFrac Holdings LLC (see Note 9, “Debt and Convertible Notes Payable”). Under the Initial ProFrac Agreement, ProFrac Services, LLC is obligated to order chemicals from the Company at least equal to the greater of (a) the chemicals required for 33% of ProFrac Services, LLC’s hydraulic fracturing fleets and (b) a baseline measured by the first ten hydraulic fracturing fleets deployed by ProFrac Services, LLC during the term of the Initial ProFrac Agreement. If the minimum volumes are not achieved in any given year, ProFrac Services LLC shall pay to the Company, as liquidated damages an amount equal to twenty-five percent (25%) of the difference between (i) the aggregate purchase price of the quantity of products comprising the minimum purchase obligation and (ii) the actual purchased volume during such calendar year (“Contract Shortfall Fees”).
On May 17, 2022, the Company entered into the Amended ProFrac Agreement upon issuance of $50 million in aggregate principal amount of Contract Consideration Convertible Notes Payable (see Note 9, “Debt and Convertible Notes Payable”). The Initial ProFrac Agreement was amended to (a) increase ProFrac Services LLC’s minimum purchase obligation for each year to the greater of 70% of ProFrac Services LLC’s requirements and a baseline measured by ProFrac Services, LLC’s first 30 hydraulic fracturing fleets, and (b) increase the term to 10 years.
On February 2, 2023, the Company entered into an amendment to the ProFrac Agreement (the “Amended ProFrac Agreement No. 2”). The Amended ProFrac Agreement No. 2 has an effective date of January 1, 2023. The ProFrac Agreement was amended to (1) provide a ramp-up period from January 1, 2023 to May 31, 2023 for ProFrac Services, LLC to increase the number of active hydraulic fracturing fleets to 30 fleets, (2) waive any Contract Shortfall Fee payment relating to any potential order shortfall prior to January 1, 2023, (3) add additional fees to certain products, and (4) provide margin increases based on margins with non-ProFrac customers.
The current measurement period for Contract Shortfall Fees is January 1, 2024 through December 31, 2024. The Company does not expect that the minimum purchase requirements will be met during the current measurement period, and as a result, related party revenues for the nine months ended September 30, 2024 reflect variable consideration for Contract Shortfall Fees of $23.8 million, which will be due in the first quarter of 2025 under the terms of the ProFrac Agreement. The measurement period for 2023 was June 1, 2023 through December 31, 2023. Related party revenues for the nine months ended September 30, 2023 included $10.0 million of Contract Shortfall Fees.
On February 2, 2023, the Convertible Notes Payable held by ProFrac Holding, LLC, with a carrying value of $11.0 million, including accrued paid-in-kind interest of $1.0 million, were converted on a pre-Reverse Stock Split basis, upon maturity, into 12,683,280 February 2023 Warrants (see Note 9, “Debt and Convertible Notes Payable” and Note 13, “Stockholders’ Equity”) and subsequently exercised on September 6, 2023.
On February 2, 2023, the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable, with a carrying value of $11.0 million, including accrued interest of $1.0 million, were converted on a pre-Reverse Stock Split basis, upon maturity, into 12,683,281 February 2023 Warrants and subsequently exercised on September 6, 2023 (see Note 9, “Debt and Convertible Notes Payable” and Note 13, “Stockholders’ Equity”). The fair value of the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable, as of February 2, 2023, was $15.1 million (see Note 10, “Fair Value Measurements”).
On May 17, 2023, the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable were converted on a pre-Reverse Stock Split basis, upon maturity, into 63,496,922 shares of common stock at a price of $0.8705 per share (see Note 9, “Debt and Convertible Notes Payable” and Note 13, “Stockholders’ Equity”). The fair value of the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable, as of May 17, 2023 was $40.6 million (see Note 10, “Fair Value Measurements”). As a result of the Reverse Stock Split, these shares were converted into 10,582,821 common shares.
During the three months ended September 30, 2024 and 2023, the Company’s revenues from ProFrac Services, LLC were $33.2 million and $29.5 million, respectively. For the three months ended September 30, 2024 and 2023, these revenues were net of amortization of contract assets of $1.6 million and $1.3 million, respectively. Cost of sales attributable to these revenues were $25.6 million and $23.8 million, respectively, for the three months ended September 30, 2024 and 2023. During the nine months ended September 30, 2024 and 2023, the Company’s revenues from ProFrac Services, LLC were $88.3 million and $98.6 million, respectively. For the nine months ended September 30, 2024 and 2023, these revenues were net of amortization of contract assets of $4.3 million and $3.7 million, respectively. Cost of sales attributable to these revenues were $63.7 million and $88.6 million, respectively, for the nine months ended September 30, 2024 and 2023.
As of September 30, 2024 and December 31, 2023 our accounts receivable from ProFrac Services, LLC was $47.1 million and $34.6 million, respectively, which is recorded in accounts receivable, related party on the consolidated balance sheet. During the nine months ended September 30, 2024, the Company collected variable consideration of $20.1 million related to the 2023 Contract Shortfall Fees, which were included in accounts receivable, related party as of December 31, 2023.
v3.24.3
Business Segment, Geographic and Major Customer Information
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Business Segment, Geographic and Major Customer Information Business Segment, Geographic and Major Customer Information
Segment Information
Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision-maker in deciding how to allocate resources and assess performance. The operations of the Company are categorized into the following reportable segments:
Chemistry Technologies. The CT segment includes green specialty chemistries, logistics and technology services, which enable its customers to pursue improved efficiencies and performance throughout the life cycle of their wells, and also helping customers improve their ESG and operational goals. Customers of the CT segment include major integrated oil and gas companies, oilfield services companies, independent oil and gas companies, national and state-owned oil companies, and international supply chain management companies.
Data Analytics. The DA segment includes the design, development, production, sale and support of equipment and services that create and provide valuable information on the composition and properties of energy customers’ hydrocarbon fluids. The company markets products and services that support in-line data analysis of hydrocarbon components and properties. Customers of the DA segment span across the entire oil and gas market, from upstream production to midstream facilities to refineries and distribution networks.
Performance is based upon a variety of criteria. The primary financial measure is segment operating income (loss). Various functions, including certain sales and marketing activities and general and administrative activities, are provided centrally by the corporate office. Costs associated with corporate office functions, other corporate income and expense items, and income taxes are not allocated to the reportable segments.
Summarized financial information of the reportable segments is as follows (in thousands):
As of and for the three months ended September 30,
Chemistry Technologies
Data Analytics
Corporate and OtherTotal
2024
Revenue from external customers
Products$13,600 $1,681 $— $15,281 
Services497 787 — 1,284 
Total revenue from external customers14,097 2,468 — 16,565 
Revenue from related party
Products32,962 — — 32,962 
Services15 200 — 215 
Total revenue from related parties32,977 200 — 33,177 
Gross profit7,944 1,175 — 9,119 
Income (loss) from operations5,559 130 (2,966)2,723 
Depreciation156 37 27 220 
Interest expense— — 256 256 
Income tax— — 37 37 
Additions to long-lived assets158 71 33 262 
2023
Revenue from external customers
Products$15,764 $1,025 $— $16,789 
Services562 455 — 1,017 
Total revenue from external customers16,326 1,480 — 17,806 
Revenue from related party
Products29,076 — — 29,076 
Services176 210 386 
Total revenue from related parties29,252 210 — 29,462 
Gross profit 8,240 807 — 9,047 
Income (loss) from operations5,519 (37)(3,863)1,619 
Depreciation149 26 6 181 
Interest expense— — 160 160 
Income tax— — 81 81 
Additions to long-lived assets— 135 — 135 
As of and for the nine months ended September 30,
Chemistry Technologies
Data Analytics
Corporate and OtherTotal
2024
Revenue from external customers
Products$40,427 $3,920 $— $44,347 
Services1,716 1,872 — 3,588 
Total revenue from external customers42,143 5,792 — 47,935 
Revenue from related party
Products87,705 — — 87,705 
Services27 600 — 627 
Total revenue from related parties87,732 600 — 88,332 
Gross profit24,888 2,220 — 27,108 
Income (loss) from operations17,810 (652)(10,106)7,052 
Depreciation475 108 79 662 
Interest expense— — 842 842 
Income tax— — 293 293 
Additions to long-lived assets333 105 53 491 
2023
Revenue from external customers
Products$39,150 $4,586 $— $43,736 
Services1,870 1,672 — 3,542 
Total revenue from external customers41,020 6,258 — 47,278 
Revenue from related party
Products97,956 2 — 97,958 
Services179 455 — 634 
Total revenue from related parties98,135 457 — 98,592 
Gross profit 11,279 3,554 — 14,833 
Change in fair value of Contract Consideration Convertible Notes Payable(29,969)— — (29,969)
Income (loss) from operations32,694 550 (12,440)20,804 
Paid-in-kind interest on Contract Consideration Convertible Notes Payable2,129 — — 2,129 
Paid-in-kind interest on convertible notes payable— — 155 155 
Depreciation462 61 7 530 
Other interest expense— — 253 253 
Income tax— — 98 98 
Additions to long-lived assets30 230 32 292 

Assets of the Company by reportable segments are as follows (in thousands):
September 30, 2024December 31, 2023
Chemistry Technologies$143,399 $138,559 
Data Analytics7,917 6,604 
Corporate and Other9,333 12,350 
Total assets$160,649 $157,513 
Geographic Information
Revenue by country is based on the location where services are provided and products are sold. For the three and nine months ended September 30, 2024 and 2023 no country other than the U.S. accounted for more than 10% of revenue. Revenue by geographic location is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
U.S. (1)$48,498 $46,401 $131,763 $141,251 
UAE592 635 3,136 3,547 
Other countries652 232 1,368 1,072 
Total revenue$49,742 $47,268 $136,267 $145,870 
(1) Includes revenue from related party
Long-lived assets held in countries other than the U.S. are not considered material to the consolidated financial statements.
Major Customers
Revenue from major customers, as a percentage of consolidated revenue, is as follows (in thousands):
Revenue% of Total Revenue
Three months ended September 30, 2024
ProFrac Services, LLC
$33,177 66.7 %
Three months ended September 30, 2023
ProFrac Services, LLC
$29,462 62.3 %
Revenue% of Total Revenue
Nine months ended September 30, 2024
ProFrac Services, LLC
$88,332 64.8 %
Nine months ended September 30, 2023
ProFrac Services, LLC
$98,592 67.6 %
The concentration with ProFrac Services, LLC and in the oil and gas industry increases credit, commodity and business risk.
Major Suppliers
Expenditure with major suppliers, as a percentage of consolidated supplier expenditure, is as follows (in thousands):
Three months ended September 30,Expenditure% of Total Expenditure
2024
Supplier A$8,885 24.6 %
Supplier B5,187 14.4 %
Supplier C4,348 12.1 %
Supplier D3,782 10.5 %
2023
Supplier A$6,094 25.3 %
Supplier B5,581 23.2 %
Supplier C4,197 17.4 %
Nine months ended September 30,Expenditure% of Total Expenditure
2024
Supplier B$16,885 17.8 %
Supplier A16,639 17.5 %
Supplier C16,583 17.5 %
2023
Supplier A$36,318 32.5 %
Supplier B21,752 19.5 %
Supplier C13,151 11.8 %
v3.24.3
Subsequent Event
 9 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]  
Subsequent Event Subsequent Event The Company has evaluated the effects of events that have occurred subsequent to September 30, 2024 through November 7, 2024, the date at which the Company’s interim financial statements are available to be issued, and has determined that there have been no material events that would require recognition in the September 30, 2024 interim financial statements or disclosure in the notes to the interim financial statements.
v3.24.3
Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements reflect all adjustments, in the opinion of management, necessary for the fair statement of the financial condition and results of operations for the periods presented. All such adjustments are normal and recurring in nature. The financial statements, including selected notes, have been prepared in accordance with applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and do not include all information and disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for comprehensive financial statement reporting. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s 2023 Annual Report.
Consolidation
All significant intercompany accounts and transactions have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”). We evaluate the applicability and impact of all authoritative guidance issued by the FASB. Guidance not listed below was assessed and determined to be either not applicable, clarifications of items listed below, immaterial or already adopted by the Company.
New Accounting Standards Issued and Not Adopted as of September 30, 2024
The FASB issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures.” This standard improves reportable segment disclosure requirements through enhanced disclosures around significant segment expenses. The amendments under this standard require interim and annual disclosures of significant segment expenses regularly provided to the chief operating decision maker (“CODM”). In addition, public entities are required to disclose the amount of “other segment items” by segment and their composition; make annual disclosures about a reportable segment’s profit/loss and assets; and clarify if the CODM uses more than one measure of a segment’s profit or loss in assessing performance and resource allocation and disclose the name and title of the CODM. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments are applied retrospectively to all prior periods presented. The Company is currently evaluating the impact of the adoption of the ASU on the related disclosures.
The FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”). The amendments under ASU 2023-09 were created as a response to requests from investors, lenders, creditors and other parties to enhance transparency and effectiveness of tax disclosures to help them better assess how an entity’s operations and related tax risks affect an entity’s tax rate and potential future cash flows. ASU 2023-09 requires that entities annually disclose the amount of taxes paid (net of refunds received) disaggregated by federal, state and foreign jurisdictions and that those amounts are also disaggregated by individual jurisdictions equal to or greater than 5% of total income taxes paid (net of funds received). ASU 2023-09 adds a requirement that entities disaggregate income (loss) from continuing operations before income tax expense (benefit) between domestic and foreign. The amendments also require entities to disaggregate income tax expense (benefit) by federal, state and foreign jurisdictions.
The amendments under ASU 2023-09 also remove certain prior requirements. Public business entities are no longer required to disclose the nature and estimate of change in the unrecognized tax benefits balance in the next 12 months or make a statement that an estimate cannot be determined. In addition, public business entities are no longer required to disclose the cumulative amount of each type of temporary difference for which a deferred tax liability has not been recognized due to the exception to recognizing deferred taxes related to subsidiaries and corporate joint ventures. ASU 2023-09 goes into effect for annual periods beginning after December 15, 2024 and early adoption is permitted for annual financial statements not yet issued or made
available for issuance. Adoption of the ASU is on a prospective basis, with the option to apply retrospectively. The Company is currently evaluating the impact of the adoption of the ASU on the related disclosures.
Fair Value Measurements
Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement.
•Level 1 — Quoted prices in active markets for identical assets or liabilities;
•Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
•Level 3 — Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entity’s assumptions about the inputs.
Earnings (Loss) Per Share Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period, which includes the February 2023 Warrants (See Note 9, “Debt and Convertible Notes Payable” and Note 13, “Stockholders’ Equity”). Diluted earnings (loss) per common share is calculated by dividing the adjusted net income (loss) by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. Potentially dilutive common share equivalents consist of incremental shares of common stock issuable upon conversion of convertible notes payable, exercise of stock warrants and vesting and settlement of stock awards. The dilutive effect of non-vested stock issued under share‑based compensation plans, shares issuable under the Employee Stock Purchase Plan (ESPP), employee stock options outstanding, and the Pre-Funded stock warrants are computed using the treasury stock method. The dilutive effect of the Convertible Notes is computed using the if‑converted method.
Segment Information
Segment Information
Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision-maker in deciding how to allocate resources and assess performance. The operations of the Company are categorized into the following reportable segments:
Chemistry Technologies. The CT segment includes green specialty chemistries, logistics and technology services, which enable its customers to pursue improved efficiencies and performance throughout the life cycle of their wells, and also helping customers improve their ESG and operational goals. Customers of the CT segment include major integrated oil and gas companies, oilfield services companies, independent oil and gas companies, national and state-owned oil companies, and international supply chain management companies.
Data Analytics. The DA segment includes the design, development, production, sale and support of equipment and services that create and provide valuable information on the composition and properties of energy customers’ hydrocarbon fluids. The company markets products and services that support in-line data analysis of hydrocarbon components and properties. Customers of the DA segment span across the entire oil and gas market, from upstream production to midstream facilities to refineries and distribution networks.
Performance is based upon a variety of criteria. The primary financial measure is segment operating income (loss). Various functions, including certain sales and marketing activities and general and administrative activities, are provided centrally by the corporate office. Costs associated with corporate office functions, other corporate income and expense items, and income taxes are not allocated to the reportable segments.
v3.24.3
Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Schedule of Allowance for Doubtful Accounts for Continuing Operations
Changes in the allowance for credit losses are as follows (in thousands):
 September 30, 2024December 31, 2023
Balance, beginning of year$745 $623 
Charges to provision for credit losses, net of recoveries121 138 
Write-offs(478)(16)
Balance, end of period$388 $745 
v3.24.3
Revenue from Contracts with Customers (Tables)
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of Disaggregation of Revenue
Total revenue disaggregated by revenue source is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Revenue:
Products$48,243 $45,865 $132,052 $141,695 
Services1,499 1,403 4,215 4,175 
$49,742 $47,268 $136,267 $145,870 
Disaggregation of Cost of Sales
The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs which cannot be directly attributable to either tangible goods or services.
Total cost of sales disaggregated is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Cost of sales:
Tangible goods sold$35,824 $33,350 $95,064 $116,755 
Services91 128 273 425 
Other4,708 4,743 13,822 13,857 
$40,623 $38,221 $109,159 $131,037 
Other cost of sales represent costs directly associated with the generation of revenue but which cannot be attributed directly to tangible goods sold or services. Examples of other costs of sales are certain personnel costs and equipment rental and insurance costs.
Cost of sales, between external and related party, is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Cost of sales:
Cost of sales for external customers$14,996 $14,399 $45,436 $42,471 
Cost of sales for related parties25,627 23,822 63,723 88,566 
$40,623 $38,221 $109,159 $131,037 
v3.24.3
Contract Assets (Tables)
 9 Months Ended
Sep. 30, 2024
Revenue Recognition [Abstract]  
Schedule of Outstanding Contract Assets
Contract assets are as follows (in thousands):
September 30, 2024December 31, 2023
Contract assets$83,060 $83,060 
Less accumulated amortization(12,745)(8,404)
Contract assets, net70,315 74,656 
Less current contract assets(6,480)(5,836)
Contract assets, long term$63,835 $68,820 
The below table reflects our estimated amortization per year (in thousands) based on the Company’s current forecasted revenues from the ProFrac Agreement.
Years ending December 31,Amortization
2024 (excluding the nine months ended September 30, 2024)
$1,499 
20256,833 
20268,868 
202710,117 
202810,117 
Thereafter through May 203232,881 
Total contract assets$70,315 
v3.24.3
Inventories (Tables)
 9 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
Schedule of Components of Inventory
Inventories are as follows (in thousands):
September 30, 2024December 31, 2023
Raw materials$4,776 $5,299 
Finished goods13,318 13,660 
Inventories18,094 18,959 
Less reserve for excess and obsolete inventory(5,350)(6,121)
Inventories, net$12,744 $12,838 
v3.24.3
Property and Equipment (Tables)
 9 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment
Property and equipment are as follows (in thousands):
September 30, 2024December 31, 2023
Land$886 $886 
Land improvements520 520 
Buildings and leasehold improvements5,520 5,483 
Machinery and equipment7,216 6,993 
Furniture and fixtures520 520 
Transportation equipment830 945 
Computer equipment and software1,926 1,696 
   Property and equipment17,418 17,043 
Less accumulated depreciation(12,460)(11,914)
Property and equipment, net$4,958 $5,129 
v3.24.3
Leases (Tables)
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Schedule of Components of Lease Expense and Supplemental Cash Flow Information
The components of lease expense and supplemental cash flow information are as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
2024202320242023
Operating lease expense$640 $890 $2,176 $2,625 
Finance lease expense:
Amortization of assets4 3 11 11 
Interest on lease liabilities— 1 1 3 
Total finance lease expense 4 4 12 14 
Short-term lease expense392 138 963 160 
Total lease expense$1,036 $1,032 $3,151 $2,799 
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$1,245 $1,331 $4,232 $4,246 
Operating cash flows from finance leases7 7 30 24 
Financing cash flows from finance leases— 1 — 3 
Schedule of Maturities of Operating Leases Liabilities
Maturities of lease liabilities as of September 30, 2024 are as follows (in thousands):
Years ending December 31,Operating Leases
2024 (excluding the nine months ended September 30, 2024)
$611 
20252,117 
20261,810 
20271,741 
20281,602 
Thereafter3,047 
Total lease payments$10,928 
Less: Interest(2,415)
Present value of lease liabilities$8,513 
Schedule of Maturities of Finance Leases Liabilities
Maturities of lease liabilities as of September 30, 2024 are as follows (in thousands):
Years ending December 31,Operating Leases
2024 (excluding the nine months ended September 30, 2024)
$611 
20252,117 
20261,810 
20271,741 
20281,602 
Thereafter3,047 
Total lease payments$10,928 
Less: Interest(2,415)
Present value of lease liabilities$8,513 
Schedule of Supplemental Balance Sheet Information
Supplemental balance sheet information related to leases is as follows (in thousands):
September 30, 2024December 31, 2023
Operating Leases
Operating lease right-of-use assets$3,759 $5,030 
Current portion of operating lease liabilities1,642 2,449 
Long-term operating lease liabilities6,871 7,676 
Total operating lease liabilities$8,513 $10,125 
Finance Leases
Property and equipment$— $147 
Accumulated depreciation— (70)
Property and equipment, net$— $77 
Current portion of finance lease liabilities$— $22 
Total finance lease liabilities$— $22 
Weighted Average Remaining Lease Term
Operating leases5.5 years5.5 years
Finance leases— 0.6 years
Weighted Average Discount Rate
Operating leases9.5 %9.5 %
Finance leases— %8.5 %
Schedule of Future Sublease Rental Income Sublease rental income for future years are as follows (in thousands):
Years ending December 31,Rental Income
2024 (excluding the nine months ended September 30, 2024)
$192 
2025767 
2026767 
2027767 
2028767 
Thereafter1,406 
Total rental income$4,666 
v3.24.3
Accrued Liabilities (Tables)
 9 Months Ended
Sep. 30, 2024
Payables and Accruals [Abstract]  
Schedule of Current Accrued Liabilities
Current accrued liabilities are as follows (in thousands):
 September 30, 2024December 31, 2023
Severance costs$372 $648 
Payroll and benefits2,063 2,138 
Legal costs45 37 
Contingent liability for earn-out provision11 56 
Deferred revenue, current452 550 
Financed insurance751 1,573 
Other421 888 
Total current accrued liabilities$4,115 $5,890 
v3.24.3
Debt and Convertible Notes Payable (Tables)
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Schedule of Debt
Long-term debt, including current portion, is as follows (in thousands):
September 30, 2024December 31, 2023
Flotek PPP loan
$104 $239 
Less current maturities
(104)(179)
Total long-term debt, net of current portion
$— $60 
v3.24.3
Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Schedule of Fair Value Measurements, Recurring
The following table presents the Company’s liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy (in thousands):
September 30,December 31,
Level 1Level 2Level 32024Level 1Level 2Level 32023
Contingent earnout consideration$— $— $11 $11 $— $— $56 $56 
Total $— $— $11 $11 $— $— $56 $56 
Schedule of Valuation Techniques
September 30, 2024December 31, 2023
Risk-free interest rate4.28 %4.58 %
Expected volatility65.0 %70.0 %
Term until liquidation (years)0.63 1.38 
Stock price $4.98 $3.92 
Discount rate10.62 %11.86 %
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
The following table presents the changes in balances of liabilities for the three and nine months ended September 30, 2024 and 2023 classified as Level 3 (in thousands):
Three months ended September 30,Nine months ended September 30,
2024202320242023
Balance - beginning of period$30 $260 $56 $84,153 
Increase in principal of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable for paid-in-kind interest— — — 85 
Increase in principal of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable for paid-in-kind interest— — — 2,043 
Change in fair value of contingent earnout consideration(19)(61)(45)(384)
Change in fair value of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable— — — 786 
Change in fair value of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable— — — (30,754)
Conversion of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable on maturity— — — (15,092)
Conversion of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable on maturity— — (40,638)
Balance - end of period$11 $199 $11 $199 
v3.24.3
Income Taxes (Tables)
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Schedule of Effective Income Tax Rate Reconciliation
The income tax provision (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 21% to income (loss) before income tax for the reasons set forth below:
Three months ended September 30,Nine months ended September 30,
2024202320242023
U.S. federal statutory tax rate
21.0 %21.0 %21.0 %21.0 %
State income taxes, net of federal benefit
1.5 6.1 4.7 %0.4 
Non-U.S. income taxed at different rates
5.8 7.3 (0.2)%0.5 
Increase (reduction) in tax benefit related to stock-based awards(0.3)0.7 0.5 %0.7 
Change in valuation allowance
(30.4)(5.6)(23.6)%(19.0)
Permanent differences related to CARES Act
— (16.7)— %(3.0)
Non-deductible expenses3.9 (6.6)2.3 %(0.2)
Effective income tax rate
1.5 %6.2 %4.7 %0.4 %
v3.24.3
Earnings (Loss) Per Share (Tables)
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Schedule of Basic and Diluted
For all periods presented in the table below, weighted average shares and earnings (loss) per share reflect the effects of the Reverse Stock Split. The calculation of the basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2024 and 2023 is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
Numerator:
Net income for basic earnings per share$2,532 $1,287 $6,068 $22,609 
Adjustments to net income available to shareholders
Paid-in-Kind interest expense on convertible notes payable and Contract Consideration Convertible Notes Payable— — — 2,284 
Valuation gain on Contract Consideration Convertible Notes Payable carried at fair value— — — (29,969)
Adjusted net income (loss) for diluted earnings per share$2,532 $1,287 $6,068 $(5,076)
Denominator:
Basic weighted average shares outstanding29,613 29,358 29,498 23,291 
Dilutive effect of convertible notes payable— — — 4,743 
Dilutive effect of warrants outstanding1,190 1,238 1,029 — 
Dilutive effect of stock options and restricted shares94 92 128 — 
Diluted weighted average shares outstanding30,897 30,688 30,655 28,034 
Basic earnings per share$0.09 $0.04 $0.21 $0.97 
Diluted earnings (loss) per share$0.08 $0.04 $0.20 $(0.18)
Anti-dilutive incremental shares excluded from denominator for diluted earnings computation
Average number of diluted shares for June 2022 stock warrants (1)
— — — 1,308 
Average number of diluted shares for options and restricted stock (1)
— — — 111 
(1) These items were not included in the dilution calculation for the nine months ended September 30, 2023 due to their anti-dilutive effect as it would reduce the loss per share.
v3.24.3
Supplemental Cash Flow Information (Tables)
 9 Months Ended
Sep. 30, 2024
Supplemental Cash Flow Elements [Abstract]  
Schedule of Supplemental Cash Flow Information
Supplemental cash flow information is as follows (in thousands):
        
 Nine months ended September 30,
 20242023
Supplemental cash flow information:
Interest paid$654 $36 
Income taxes50 — 
Supplemental non cash financing and investing activities:
Conversion of convertible notes payable to common stock— 8,996 
Conversion of convertible notes payable to February 2023 Warrants— 11,040 
Conversion of Initial Contract Consideration Convertible Notes Payable to February 2023 Warrants— 15,092 
Conversion of Amended Contract Consideration Convertible Notes Payable to common stock— 40,638 
v3.24.3
Business Segment, Geographic and Major Customer Information (Tables)
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Schedule of Financial Information Regarding Reportable Segments
Summarized financial information of the reportable segments is as follows (in thousands):
As of and for the three months ended September 30,
Chemistry Technologies
Data Analytics
Corporate and OtherTotal
2024
Revenue from external customers
Products$13,600 $1,681 $— $15,281 
Services497 787 — 1,284 
Total revenue from external customers14,097 2,468 — 16,565 
Revenue from related party
Products32,962 — — 32,962 
Services15 200 — 215 
Total revenue from related parties32,977 200 — 33,177 
Gross profit7,944 1,175 — 9,119 
Income (loss) from operations5,559 130 (2,966)2,723 
Depreciation156 37 27 220 
Interest expense— — 256 256 
Income tax— — 37 37 
Additions to long-lived assets158 71 33 262 
2023
Revenue from external customers
Products$15,764 $1,025 $— $16,789 
Services562 455 — 1,017 
Total revenue from external customers16,326 1,480 — 17,806 
Revenue from related party
Products29,076 — — 29,076 
Services176 210 386 
Total revenue from related parties29,252 210 — 29,462 
Gross profit 8,240 807 — 9,047 
Income (loss) from operations5,519 (37)(3,863)1,619 
Depreciation149 26 6 181 
Interest expense— — 160 160 
Income tax— — 81 81 
Additions to long-lived assets— 135 — 135 
As of and for the nine months ended September 30,
Chemistry Technologies
Data Analytics
Corporate and OtherTotal
2024
Revenue from external customers
Products$40,427 $3,920 $— $44,347 
Services1,716 1,872 — 3,588 
Total revenue from external customers42,143 5,792 — 47,935 
Revenue from related party
Products87,705 — — 87,705 
Services27 600 — 627 
Total revenue from related parties87,732 600 — 88,332 
Gross profit24,888 2,220 — 27,108 
Income (loss) from operations17,810 (652)(10,106)7,052 
Depreciation475 108 79 662 
Interest expense— — 842 842 
Income tax— — 293 293 
Additions to long-lived assets333 105 53 491 
2023
Revenue from external customers
Products$39,150 $4,586 $— $43,736 
Services1,870 1,672 — 3,542 
Total revenue from external customers41,020 6,258 — 47,278 
Revenue from related party
Products97,956 2 — 97,958 
Services179 455 — 634 
Total revenue from related parties98,135 457 — 98,592 
Gross profit 11,279 3,554 — 14,833 
Change in fair value of Contract Consideration Convertible Notes Payable(29,969)— — (29,969)
Income (loss) from operations32,694 550 (12,440)20,804 
Paid-in-kind interest on Contract Consideration Convertible Notes Payable2,129 — — 2,129 
Paid-in-kind interest on convertible notes payable— — 155 155 
Depreciation462 61 7 530 
Other interest expense— — 253 253 
Income tax— — 98 98 
Additions to long-lived assets30 230 32 292 

Assets of the Company by reportable segments are as follows (in thousands):
September 30, 2024December 31, 2023
Chemistry Technologies$143,399 $138,559 
Data Analytics7,917 6,604 
Corporate and Other9,333 12,350 
Total assets$160,649 $157,513 
Schedule of Revenue by Geographic Location Revenue by geographic location is as follows (in thousands):
 Three months ended September 30,Nine months ended September 30,
 2024202320242023
U.S. (1)$48,498 $46,401 $131,763 $141,251 
UAE592 635 3,136 3,547 
Other countries652 232 1,368 1,072 
Total revenue$49,742 $47,268 $136,267 $145,870 
(1) Includes revenue from related party
Schedule of Revenue by Major Customers
Revenue from major customers, as a percentage of consolidated revenue, is as follows (in thousands):
Revenue% of Total Revenue
Three months ended September 30, 2024
ProFrac Services, LLC
$33,177 66.7 %
Three months ended September 30, 2023
ProFrac Services, LLC
$29,462 62.3 %
Revenue% of Total Revenue
Nine months ended September 30, 2024
ProFrac Services, LLC
$88,332 64.8 %
Nine months ended September 30, 2023
ProFrac Services, LLC
$98,592 67.6 %
Schedule of Expenditure With Major Suppliers by Reporting Segments
Expenditure with major suppliers, as a percentage of consolidated supplier expenditure, is as follows (in thousands):
Three months ended September 30,Expenditure% of Total Expenditure
2024
Supplier A$8,885 24.6 %
Supplier B5,187 14.4 %
Supplier C4,348 12.1 %
Supplier D3,782 10.5 %
2023
Supplier A$6,094 25.3 %
Supplier B5,581 23.2 %
Supplier C4,197 17.4 %
Nine months ended September 30,Expenditure% of Total Expenditure
2024
Supplier B$16,885 17.8 %
Supplier A16,639 17.5 %
Supplier C16,583 17.5 %
2023
Supplier A$36,318 32.5 %
Supplier B21,752 19.5 %
Supplier C13,151 11.8 %
v3.24.3
Organization and Nature of Operations (Details)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
segment
Sep. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Organization and Nature of Operations          
Number of operation segments (segments) | segment     2    
Gross profit $ 9,119 $ 9,047 $ 27,108 $ 14,833  
Net income 2,532 $ 1,287 6,068 22,609  
Operating activities     5,925 (9,248)  
Contract Shortfall Fees          
Organization and Nature of Operations          
Amounts of transaction         $ 20,100
Contract Shortfall Fees | Related Party          
Organization and Nature of Operations          
Amounts of transaction $ 6,800   $ 23,800 $ 10,000  
v3.24.3
Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Accounts Receivable, Allowance for Credit Loss      
Balance, beginning of year $ 745 $ 623 $ 623
Charges to provision for credit losses, net of recoveries 121 $ 97 138
Write-offs (478)   (16)
Balance, end of period $ 388   $ 745
v3.24.3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Disaggregation of Revenue        
Total revenues $ 49,742 $ 47,268 $ 136,267 $ 145,870
Product        
Disaggregation of Revenue        
Total revenues 48,243 45,865 132,052 141,695
Services        
Disaggregation of Revenue        
Total revenues $ 1,499 $ 1,403 $ 4,215 $ 4,175
v3.24.3
Revenue from Contracts with Customers - Cost of Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Disaggregation of Revenue        
Cost of sales $ 40,623 $ 38,221 $ 109,159 $ 131,037
Nonrelated Party        
Disaggregation of Revenue        
Cost of sales 14,996 14,399 45,436 42,471
Related Party | ProFrac Holdings        
Disaggregation of Revenue        
Cost of sales 25,627 23,822 63,723 88,566
Tangible goods sold        
Disaggregation of Revenue        
Cost of sales 35,824 33,350 95,064 116,755
Services        
Disaggregation of Revenue        
Cost of sales 91 128 273 425
Other        
Disaggregation of Revenue        
Cost of sales $ 4,708 $ 4,743 $ 13,822 $ 13,857
v3.24.3
Contract Assets - Contract Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Contract Asset    
Contract assets $ 83,060 $ 83,060
Less accumulated amortization (12,745) (8,404)
Total contract assets 70,315 74,656
Less current contract assets (6,480) (5,836)
Contract assets, long term $ 63,835 $ 68,820
v3.24.3
Contract Assets - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
May 17, 2022
Feb. 02, 2022
Disaggregation of Revenue              
Contract assets $ 83,060   $ 83,060   $ 83,060    
Capitalized contract fees 3,600   3,600        
Long-term contract asset 63,835   63,835   $ 68,820    
Amortization of contract into revenue $ 1,600 $ 1,300 $ 4,300 $ 3,700      
ProFrac Agreement              
Disaggregation of Revenue              
Contract assets           $ 69,500 $ 10,000
v3.24.3
Contract Assets - Estimated Amortization (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Revenue Recognition [Abstract]    
2024 (excluding the nine months ended September 30, 2024) $ 1,499  
2025 6,833  
2026 8,868  
2027 10,117  
2028 10,117  
Thereafter through May 2032 32,881  
Total contract assets $ 70,315 $ 74,656
v3.24.3
Inventories - Components of Inventory (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Inventory Disclosure [Abstract]    
Raw materials $ 4,776 $ 5,299
Finished goods 13,318 13,660
Inventories 18,094 18,959
Less reserve for excess and obsolete inventory (5,350) (6,121)
Inventories, net $ 12,744 $ 12,838
v3.24.3
Inventories - Narratives (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Chemistry Technologies        
Inventory        
Provision for excess and obsolete inventory $ 200 $ 100 $ 600 $ 500
Data Analytics        
Inventory        
Provision for excess and obsolete inventory $ 0 $ 16 $ 13 $ 200
v3.24.3
Property and Equipment - Components of Property and Equipment (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Components of Property, Plant and Equipment    
Property and equipment $ 17,418 $ 17,043
Less accumulated depreciation (12,460) (11,914)
Property and equipment, net 4,958 5,129
Land    
Components of Property, Plant and Equipment    
Property and equipment 886 886
Land improvements    
Components of Property, Plant and Equipment    
Property and equipment 520 520
Buildings and leasehold improvements    
Components of Property, Plant and Equipment    
Property and equipment 5,520 5,483
Machinery and equipment    
Components of Property, Plant and Equipment    
Property and equipment 7,216 6,993
Furniture and fixtures    
Components of Property, Plant and Equipment    
Property and equipment 520 520
Transportation equipment    
Components of Property, Plant and Equipment    
Property and equipment 830 945
Computer equipment and software    
Components of Property, Plant and Equipment    
Property and equipment $ 1,926 $ 1,696
v3.24.3
Property and Equipment - Narratives (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Property, Plant and Equipment [Abstract]        
Depreciation $ 220 $ 181 $ 662 $ 530
v3.24.3
Leases - Components of Lease Expense and Supplemental Cash Flow Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Leases [Abstract]        
Operating lease expense $ 640 $ 890 $ 2,176 $ 2,625
Finance lease expense:        
Amortization of assets 4 3 11 11
Interest on lease liabilities 0 1 1 3
Total finance lease expense 4 4 12 14
Short-term lease expense 392 138 963 160
Total lease expense 1,036 1,032 3,151 2,799
Cash paid for amounts included in the measurement of lease liabilities:        
Operating cash flows from operating leases 1,245 1,331 4,232 4,246
Operating cash flows from finance leases 7 7 30 24
Financing cash flows from finance leases $ 0 $ 1 $ 0 $ 3
v3.24.3
Leases - Maturities of Lease Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Operating Leases    
2024 (excluding the nine months ended September 30, 2024) $ 611  
2025 2,117  
2026 1,810  
2027 1,741  
2028 1,602  
Thereafter 3,047  
Total lease payments 10,928  
Less: Interest (2,415)  
Present value of lease liabilities $ 8,513 $ 10,125
v3.24.3
Leases - Supplemental Balance Sheet Information (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Operating Leases    
Operating lease right-of-use assets $ 3,759 $ 5,030
Current portion of operating lease liabilities 1,642 2,449
Long-term operating lease liabilities 6,871 7,676
Total operating lease liabilities 8,513 10,125
Finance Leases    
Property and equipment 0 147
Accumulated depreciation 0 (70)
Property and equipment, net 0 77
Current portion of finance lease liabilities 0 22
Total finance lease liabilities $ 0 $ 22
Weighted Average Remaining Lease Term    
Operating leases (in years) 5 years 6 months 5 years 6 months
Finance leases (in years)   7 months 6 days
Weighted Average Discount Rate    
Operating leases (in percentage) 9.50% 9.50%
Finance leases (in percentage) 0.00% 8.50%
v3.24.3
Leases - Future Sublease Rental Income (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Sep. 30, 2024
Leases [Abstract]    
Monthly rental expense $ 86  
2024 (excluding the nine months ended September 30, 2024)   $ 192
2025   767
2026   767
2027   767
2028   767
Thereafter   1,406
Total rental income   $ 4,666
v3.24.3
Accrued Liabilities - Schedule of Current Accrued Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Accrued liabilities, current    
Severance costs $ 372 $ 648
Payroll and benefits 2,063 2,138
Legal costs 45 37
Contingent liability for earn-out provision 11 56
Deferred revenue, current 452 550
Financed insurance 751 1,573
Other 421 888
Total current accrued liabilities $ 4,115 $ 5,890
v3.24.3
Debt and Convertible Notes Payable - Asset Backed Loans Narratives (Details) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended
Aug. 31, 2023
Sep. 30, 2024
Sep. 30, 2024
Dec. 31, 2023
Debt Instrument        
Asset-based loan   $ 1,426,000 $ 1,426,000 $ 7,492,000
Asset Based Loan | Line of Credit        
Debt Instrument        
Debt instrument term (years) 24 months      
Initial credit availability $ 20,000,000      
Percentage of eligible accounts receivable (percent) 85.00%      
Percentage value of eligible inventory (percent) 60.00%      
Percentage of real estate holdings (percent) 60.00%      
Asset-based loan   1,400,000 1,400,000  
Line of credit facility, remaining borrowing capacity   12,000,000 12,000,000  
Interest on ABL   300,000 700,000  
Unamortized issuance cost   $ 200,000 $ 200,000  
Debt instrument stated interest rate (percent) 5.50% 10.00% 10.00%  
Basis spread on variable rate (percent) 2.00%      
Commitment fee percentage (percent) 1.00%      
Debt instrument, non usage fee (percent) 0.25%      
Debt instrument, termination fee contingency period 12 months      
Line of credit facility covenant amount minimum tangible net worth   $ 11,000,000 $ 11,000,000  
Asset Based Loan | Line of Credit | Period One        
Debt Instrument        
Early termination fee (percent) 2.50%      
Asset Based Loan | Line of Credit | Period Two        
Debt Instrument        
Early termination fee (percent) 1.50%      
Asset Based Loan | Line of Credit | Maximum        
Debt Instrument        
Percentage of eligible accounts receivable (percent) 100.00%      
v3.24.3
Debt and Convertible Notes Payable - Paycheck Protection Narratives (Details) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended
Jan. 05, 2023
Apr. 30, 2020
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Jan. 04, 2023
Debt Instrument                
Paycheck protection plan loan forgiveness     $ 0 $ 0 $ 0 $ 4,522,000    
Flotek PPP loan | Unsecured Debt                
Debt Instrument                
Proceeds from debt   $ 4,800,000            
Income taxes $ 4,400,000              
Flotek PPP loan     $ 104,000   $ 104,000   $ 239,000 $ 4,800,000
Accrued interest forgiveness 100,000              
Debt instrument, face amount 400,000              
Repaid in monthly installments $ 15,000              
Paycheck protection plan loan forgiveness           4,500,000    
Gain (loss) on extinguishment of debt, principal           4,400,000    
Gain (loss) on extinguishment of debt, accrued interest           $ 100,000    
v3.24.3
Debt and Convertible Notes Payable - Schedule of Debt (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Jan. 04, 2023
Debt Instrument      
Less current maturities $ (104) $ (179)  
Unsecured Debt | Flotek PPP loan      
Debt Instrument      
Flotek PPP loan 104 239 $ 4,800
Total long-term debt, net of current portion $ 0 $ 60  
v3.24.3
Debt and Convertible Notes Payable - Convertible Notes Narratives (Details)
Sep. 06, 2023
shares
May 17, 2023
$ / shares
shares
Feb. 02, 2023
USD ($)
$ / shares
shares
Feb. 02, 2022
USD ($)
day
$ / shares
May 17, 2022
USD ($)
Convertible Debt | February 2023 Warrants          
Debt Instrument          
Conversion price (in dollars per share) | $ / shares     $ 0.0001    
PIPE Transaction | Convertible Debt          
Debt Instrument          
Debt instrument, face amount       $ 21,200,000  
Proceeds from convertible notes       $ 20,100,000  
Debt instrument stated interest rate (percent)       10.00%  
Debt instrument term (years)       1 year  
Conversion price (in dollars per share) | $ / shares       $ 1.088125  
Stock price trigger (in dollars per share) | $ / shares     $ 0.8705 2.50  
Stock price trigger for trading period (in dollars per share) | $ / shares       $ 1.741  
Threshold trading days | day       20  
Consecutive trading days | day       30  
Other Convertible Debt | Convertible Notes Payable          
Debt Instrument          
Convertible notes payable     $ 9,000,000    
Paid-in-kind interest expense     $ 800,000    
Conversion of notes to common stock (in shares) | shares     10,335,840    
Other Convertible Debt | Convertible Notes Payable | Reverse Stock Split          
Debt Instrument          
Conversion of notes to common stock (in shares) | shares     1,722,640    
Amended ProFrac Agreement | Convertible Debt          
Debt Instrument          
Debt instrument, face amount         $ 50,000,000
Debt instrument stated interest rate (percent)         10.00%
Conversion price (in dollars per share) | $ / shares   $ 0.64      
Amended ProFrac Agreement | Convertible Debt | Related Party          
Debt Instrument          
Conversion price (in dollars per share) | $ / shares   $ 0.8705      
Convertible notes payable     $ 11,000,000.0    
Paid-in-kind interest expense     $ 1,000,000.0    
Conversion of notes to common stock (in shares) | shares 12,683,280 63,496,922 12,683,280    
Amended ProFrac Agreement | Convertible Debt | Reverse Stock Split          
Debt Instrument          
Conversion of notes to common stock (in shares) | shares   10,582,821      
Amended ProFrac Agreement | Convertible Debt | Reverse Stock Split | February 2023 Warrants          
Debt Instrument          
Conversion of notes to common stock (in shares) | shares 2,113,880        
Amended ProFrac Agreement | Convertible Debt | Reverse Stock Split | Related Party          
Debt Instrument          
Conversion of notes to common stock (in shares) | shares 2,113,880        
v3.24.3
Debt and Convertible Notes Payable - ProFrac Transactions Narratives (Details) - USD ($)
Sep. 06, 2023
May 17, 2023
Feb. 02, 2023
May 17, 2022
Feb. 02, 2022
ProFrac Holdings | February 2023 Warrants | Related Party          
Debt Instrument          
Conversion of notes to common stock (in shares)     12,683,281    
Convertible Debt | February 2023 Warrants          
Debt Instrument          
Conversion price (in dollars per share)     $ 0.0001    
ProFrac Agreement Contract | Convertible Debt          
Debt Instrument          
Debt instrument, face amount         $ 10,000,000
Debt instrument stated interest rate (percent)         10.00%
Convertible debt, fair value disclosures     $ 15,100,000    
Conversion price (in dollars per share)     $ 1.19    
ProFrac Agreement Contract | Convertible Debt | Related Party          
Debt Instrument          
Convertible debt, fair value disclosures     $ 15,100,000    
Conversion of notes to common stock (in shares) 12,683,281        
ProFrac Agreement Contract | Convertible Debt | Related Party | Reverse Stock Split          
Debt Instrument          
Conversion of notes to common stock (in shares) 2,113,881        
ProFrac Agreement Contract | Convertible Debt | February 2023 Warrants | Reverse Stock Split          
Debt Instrument          
Conversion of notes to common stock (in shares) 2,113,881        
Amended ProFrac Agreement | Convertible Debt          
Debt Instrument          
Debt instrument, face amount       $ 50,000,000  
Debt instrument stated interest rate (percent)       10.00%  
Convertible debt, fair value disclosures   $ 40,600,000      
Conversion price (in dollars per share)   $ 0.64      
Amended ProFrac Agreement | Convertible Debt | Reverse Stock Split          
Debt Instrument          
Conversion of notes to common stock (in shares)   10,582,821      
Amended ProFrac Agreement | Convertible Debt | Related Party          
Debt Instrument          
Convertible debt, fair value disclosures   $ 40,600,000      
Conversion of notes to common stock (in shares) 12,683,280 63,496,922 12,683,280    
Conversion price (in dollars per share)   $ 0.8705      
Amended ProFrac Agreement | Convertible Debt | Related Party | Reverse Stock Split          
Debt Instrument          
Conversion of notes to common stock (in shares) 2,113,880        
Amended ProFrac Agreement | Convertible Debt | February 2023 Warrants | Reverse Stock Split          
Debt Instrument          
Conversion of notes to common stock (in shares) 2,113,880        
v3.24.3
Fair Value Measurements - Recurring (Details) - Recurring - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring    
Contingent earnout consideration $ 11 $ 56
Liabilities measured at fair value on a recurring basis 11 56
Level 1    
Fair Value, Assets and Liabilities Measured on Recurring    
Contingent earnout consideration 0 0
Liabilities measured at fair value on a recurring basis 0 0
Level 2    
Fair Value, Assets and Liabilities Measured on Recurring    
Contingent earnout consideration 0 0
Liabilities measured at fair value on a recurring basis 0 0
Level 3    
Fair Value, Assets and Liabilities Measured on Recurring    
Contingent earnout consideration 11 56
Liabilities measured at fair value on a recurring basis $ 11 $ 56
v3.24.3
Fair Value Measurements - Monte Carlo Simulation (Details)
Sep. 30, 2024
Dec. 31, 2023
Risk-free interest rate    
Fair Value Measurement Inputs and Valuation Techniques    
Earn out provision, measurement input 0.0428 0.0458
Expected volatility    
Fair Value Measurement Inputs and Valuation Techniques    
Earn out provision, measurement input 0.650 0.700
Term until liquidation (years)    
Fair Value Measurement Inputs and Valuation Techniques    
Earn out provision, measurement input 0.63 1.38
Stock price    
Fair Value Measurement Inputs and Valuation Techniques    
Earn out provision, measurement input 4.98 3.92
Discount rate    
Fair Value Measurement Inputs and Valuation Techniques    
Earn out provision, measurement input 0.1062 0.1186
v3.24.3
Fair Value Measurements - Narratives (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2023
May 17, 2023
Feb. 02, 2023
May 17, 2022
Feb. 02, 2022
Assets Measured at Fair Value on a Nonrecurring Basis              
Convertible note payable     $ (29,969)        
ProFrac Agreement Contract | Convertible Debt              
Assets Measured at Fair Value on a Nonrecurring Basis              
Convertible debt, fair value disclosures         $ 15,100    
Conversion price (in dollars per share)         $ 1.19    
Change in fair value $ 0 $ 0 786        
ProFrac Agreement Contract | Convertible Debt | Related Party              
Assets Measured at Fair Value on a Nonrecurring Basis              
Convertible debt, fair value disclosures         $ 15,100    
Amended ProFrac Agreement | Convertible Debt              
Assets Measured at Fair Value on a Nonrecurring Basis              
Convertible debt, fair value disclosures       $ 40,600      
Conversion price (in dollars per share)       $ 0.64      
Amended ProFrac Agreement | Convertible Debt | Related Party              
Assets Measured at Fair Value on a Nonrecurring Basis              
Convertible debt, fair value disclosures       $ 40,600      
Conversion price (in dollars per share)       $ 0.8705      
Amended ProFrac Agreement | Estimate of Fair Value Measurement | Convertible Debt              
Assets Measured at Fair Value on a Nonrecurring Basis              
Convertible debt, fair value disclosures           $ 69,500  
Convertible note payable     $ 30,800        
Recurring | Level 3              
Assets Measured at Fair Value on a Nonrecurring Basis              
Convertible debt, fair value disclosures             $ 10,000
v3.24.3
Fair Value Measurements - Rollforward (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation        
Balance - beginning of period $ 30 $ 260 $ 56 $ 84,153
Balance - end of period 11 199 11 199
ProFrac Agreement Contract | Convertible Debt        
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation        
Change in fair value 0 0   786
ProFrac Agreement        
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation        
Increase in principal of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable for paid-in-kind interest 0 0 0 85
Conversion of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable on maturity 0 0 0 (15,092)
Amended ProFrac Agreement        
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation        
Increase in principal of Amended ProFrac Agreement Contract Consideration Convertible Notes Payable for paid-in-kind interest 0 0 0 2,043
Change in fair value 0 0 0 (30,754)
Conversion of Initial ProFrac Agreement Contract Consideration Convertible Notes Payable on maturity 0 $ 0 $ (40,638)
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]     Debt Instrument, Realized Gain (Loss) On Fair Value Adjustment, Before Tax Debt Instrument, Realized Gain (Loss) On Fair Value Adjustment, Before Tax
Change in fair value of contingent earnout consideration        
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation        
Change in fair value $ (19) $ (61) $ (45) $ (384)
Contingent Portion of Convertible Debt        
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation        
Change in fair value     $ 0  
v3.24.3
Income Taxes - Reconciliation of Effective Tax Rate (Details)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income Tax Disclosure [Abstract]        
U.S. federal statutory tax rate 21.00% 21.00% 21.00% 21.00%
State income taxes, net of federal benefit 1.50% 6.10% 4.70% 0.40%
Non-U.S. income taxed at different rates 5.80% 7.30% (0.20%) 0.50%
Increase (reduction) in tax benefit related to stock-based awards (0.30%) 0.70% 0.50% 0.70%
Change in valuation allowance (30.40%) (5.60%) (23.60%) (19.00%)
Permanent differences related to CARES Act 0.00% (16.70%) 0.00% (3.00%)
Non-deductible expenses 3.90% (6.60%) 2.30% (0.20%)
Effective income tax rate 1.50% 6.20% 4.70% 0.40%
v3.24.3
Income Taxes - Narrative (Details)
$ in Millions
Sep. 30, 2024
USD ($)
Operating Loss Carryforwards  
Operating loss carryforwards $ 190.1
Deferred tax assets, operating loss carryforwards, subject to expiration $ 43.5
Percentage of net operating loss carryforward that can offset net income 100.00%
Deferred tax assets, operating loss carryforwards, not subject to expiration $ 146.6
Percentage of indefinite lived carryforward that can offset taxable in come per year 80.00%
Tax credit carryforward $ 3.8
Operating loss carryforward estimated limitation on use 3.5
Operating loss carryforwards, maximum uplift, amount 24.5
Tax credit valuation allowance, due to expiration 3.8
State and Local Jurisdiction  
Operating Loss Carryforwards  
Operating loss carryforwards 91.2
Operating loss valuation allowance, due to expiration $ 1.0
v3.24.3
Stockholders’ Equity - Reverse Stock Split (Details)
Sep. 25, 2023
shares
Sep. 14, 2023
Fair Value Measurement Inputs and Valuation Techniques    
Reverse stock splits (in shares) 30,739,820  
Reverse stock split ratio   0.1667
Reverse Stock Split    
Fair Value Measurement Inputs and Valuation Techniques    
Conversion of stock, shares converted (in shares) 184,438,695  
v3.24.3
Stockholders’ Equity - Conversion of Convertible Notes (Details) - USD ($)
$ / shares in Units, $ in Millions
Sep. 25, 2023
Sep. 06, 2023
May 17, 2023
Feb. 02, 2023
Feb. 02, 2022
Fair Value Measurement Inputs and Valuation Techniques          
Reverse stock splits (in shares) 30,739,820        
Related Party | ProFrac Holdings | February 2023 Warrants          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion of notes to common stock (in shares)       12,683,281  
Convertible Debt | February 2023 Warrants          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion price (in dollars per share)       $ 0.0001  
Other Convertible Debt | Convertible Notes Payable          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion of notes to common stock (in shares)       10,335,840  
Convertible notes payable       $ 9.0  
Paid-in-kind interest expense       $ 0.8  
Other Convertible Debt | Convertible Notes Payable | Reverse Stock Split          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion of notes to common stock (in shares)       1,722,640  
PIPE Transaction | Convertible Debt          
Fair Value Measurement Inputs and Valuation Techniques          
Reverse stock splits (in shares)       1,722,640  
Stock price trigger (in dollars per share)       $ 0.8705 $ 2.50
Conversion price (in dollars per share)         $ 1.088125
Amended ProFrac Agreement | Convertible Debt          
Fair Value Measurement Inputs and Valuation Techniques          
Exercise price of warrants or rights (in dollars per share)       $ 0.0001  
Convertible debt, fair value disclosures     $ 40.6    
Conversion price (in dollars per share)     $ 0.64    
Amended ProFrac Agreement | Convertible Debt | Reverse Stock Split          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion of notes to common stock (in shares)     10,582,821    
Amended ProFrac Agreement | Convertible Debt | Reverse Stock Split | February 2023 Warrants          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion of notes to common stock (in shares)   2,113,880      
Amended ProFrac Agreement | Convertible Debt | Related Party          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion of notes to common stock (in shares)   12,683,280 63,496,922 12,683,280  
Reverse stock splits (in shares)     10,582,821    
Convertible notes payable       $ 11.0  
Paid-in-kind interest expense       1.0  
Convertible debt, fair value disclosures     $ 40.6    
Conversion price (in dollars per share)     $ 0.8705    
Amended ProFrac Agreement | Convertible Debt | Related Party | Reverse Stock Split          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion of notes to common stock (in shares)   2,113,880      
Reverse stock splits (in shares)     10,582,821    
ProFrac Agreement Contract | Convertible Debt          
Fair Value Measurement Inputs and Valuation Techniques          
Convertible debt, fair value disclosures       $ 15.1  
Conversion price (in dollars per share)       $ 1.19  
ProFrac Agreement Contract | Convertible Debt | Reverse Stock Split | February 2023 Warrants          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion of notes to common stock (in shares)   2,113,881      
ProFrac Agreement Contract | Convertible Debt | Related Party          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion of notes to common stock (in shares)   12,683,281      
Convertible notes payable       $ 11.0  
Paid-in-kind interest expense       1.0  
Convertible debt, fair value disclosures       $ 15.1  
ProFrac Agreement Contract | Convertible Debt | Related Party | Reverse Stock Split          
Fair Value Measurement Inputs and Valuation Techniques          
Conversion of notes to common stock (in shares)   2,113,881      
v3.24.3
Stockholders’ Equity - Prefunded Warrants (Details) - ProFrac Holdings - June 2022 Warrants - Affiliated Entity
Jun. 21, 2022
USD ($)
$ / shares
shares
Common and Preferred Stock  
Exchanged value of warrants $ 19,500,000
Number of securities called by warrants or rights (in shares) | shares 13,104,839
Exercise price of warrants or rights (in dollars per share) | $ / shares $ 0.0001
Warrant exercise fee $ 4,500,000
Conditional proceeds trigger $ 4,500,000
Reverse Stock Split  
Common and Preferred Stock  
Number of securities called by warrants or rights (in shares) | shares 2,184,140
v3.24.3
Earnings (Loss) Per Share - Schedule of Basic and Diluted (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Numerator:        
Net income for basic earnings per share $ 2,532 $ 1,287 $ 6,068 $ 22,609
Adjustments to net income available to shareholders        
Paid-in-Kind interest expense on convertible notes payable and Contract Consideration Convertible Notes Payable     0 2,284
Adjusted net income (loss) for diluted earnings per share $ 2,532 $ 1,287 $ 6,068 $ (5,076)
Denominator:        
Basic weighted average shares outstanding (in shares) 29,613 29,358 29,498 23,291
Dilutive effect of convertible notes payable (in shares) 0 0 0 4,743
Dilutive effect of warrants outstanding (in shares) 1,190 1,238 1,029 0
Dilutive effect of stock options and restricted shares (in shares) 94 92 128 0
Diluted weighted average shares outstanding (in shares) 30,897 30,688 30,655 28,034
Basic earnings per share (in dollars per share) $ 0.09 $ 0.04 $ 0.21 $ 0.97
Diluted earnings (loss) per share (in dollars per share) $ 0.08 $ 0.04 $ 0.20 $ (0.18)
Convertible Notes Payable        
Adjustments to net income available to shareholders        
Paid-in-Kind interest expense on convertible notes payable and Contract Consideration Convertible Notes Payable $ 0 $ 0 $ 0 $ 2,284
Valuation gain on Contract Consideration Convertible Notes Payable carried at fair value $ 0 $ 0 $ 0 $ (29,969)
Stock Warrants        
Denominator:        
Anti-dilutive incremental shares excluded from denominator for diluted earnings computation 0 0 0 1,308
Options and Restricted        
Denominator:        
Anti-dilutive incremental shares excluded from denominator for diluted earnings computation 0 0 0 111
v3.24.3
Supplemental Cash Flow Information (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Supplemental cash flow information:    
Interest paid $ 654 $ 36
Income taxes 50 0
Supplemental non cash financing and investing activities:    
Conversion of convertible notes payable to common stock 0 40,638
Conversion of Initial Contract Consideration Convertible Notes Payable to February 2023 Warrants 0 15,092
Common Stock    
Supplemental non cash financing and investing activities:    
Conversion of convertible notes payable to common stock 0 8,996
Stock Warrants    
Supplemental non cash financing and investing activities:    
Conversion of convertible notes payable to common stock $ 0 $ 11,040
v3.24.3
Related Party Transactions (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 25, 2023
shares
Sep. 06, 2023
shares
May 17, 2023
USD ($)
$ / shares
shares
Feb. 02, 2023
USD ($)
fleet
$ / shares
shares
May 17, 2022
USD ($)
fleet
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Feb. 02, 2022
USD ($)
Related Party Transaction                      
Reverse stock splits (in shares) | shares 30,739,820                    
Revenue from external customers           $ 49,742,000 $ 47,268,000 $ 136,267,000 $ 145,870,000    
Accumulated amortization           (1,600,000) (1,300,000) (4,300,000) (3,700,000)    
Cost of sales           40,623,000 38,221,000 109,159,000 131,037,000    
Contract Shortfall Fees                      
Related Party Transaction                      
Amounts of transaction                   $ 20,100,000  
Related Party                      
Related Party Transaction                      
Revenue from external customers           33,177,000 29,462,000 88,332,000 98,592,000    
Accumulated amortization           (1,600,000) (1,300,000) (4,300,000) (3,700,000)    
Accounts receivable           47,064,000   47,064,000   $ 34,569,000  
Related Party | Contract Shortfall Fees                      
Related Party Transaction                      
Amounts of transaction           6,800,000   23,800,000 10,000,000.0    
Related Party | ProFrac Agreement Contract                      
Related Party Transaction                      
Increase in number of active hydraulic fleets | fleet       30              
Convertible Debt | February 2023 Warrants                      
Related Party Transaction                      
Conversion price (in dollars per share) | $ / shares       $ 0.0001              
Convertible Debt | Amended ProFrac Agreement                      
Related Party Transaction                      
Debt instrument, face amount         $ 50,000,000            
Convertible debt, fair value disclosures     $ 40,600,000                
Conversion price (in dollars per share) | $ / shares     $ 0.64                
Convertible Debt | Amended ProFrac Agreement | Reverse Stock Split                      
Related Party Transaction                      
Conversion of notes to common stock (in shares) | shares     10,582,821                
Convertible Debt | Amended ProFrac Agreement | February 2023 Warrants | Reverse Stock Split                      
Related Party Transaction                      
Conversion of notes to common stock (in shares) | shares   2,113,880                  
Convertible Debt | ProFrac Agreement Contract                      
Related Party Transaction                      
Debt instrument, face amount                     $ 10,000,000
Convertible debt, fair value disclosures       $ 15,100,000              
Conversion price (in dollars per share) | $ / shares       $ 1.19              
Convertible Debt | ProFrac Agreement Contract | February 2023 Warrants | Reverse Stock Split                      
Related Party Transaction                      
Conversion of notes to common stock (in shares) | shares   2,113,881                  
Convertible Debt | Related Party | Amended ProFrac Agreement                      
Related Party Transaction                      
Convertible notes payable       $ 11,000,000.0              
Paid-in-kind interest expense       $ 1,000,000.0              
Conversion of notes to common stock (in shares) | shares   12,683,280 63,496,922 12,683,280              
Convertible debt, fair value disclosures     $ 40,600,000                
Conversion price (in dollars per share) | $ / shares     $ 0.8705                
Reverse stock splits (in shares) | shares     10,582,821                
Convertible Debt | Related Party | Amended ProFrac Agreement | Reverse Stock Split                      
Related Party Transaction                      
Conversion of notes to common stock (in shares) | shares   2,113,880                  
Reverse stock splits (in shares) | shares     10,582,821                
Convertible Debt | Related Party | ProFrac Agreement Contract                      
Related Party Transaction                      
Convertible notes payable       $ 11,000,000.0              
Paid-in-kind interest expense       1,000,000.0              
Conversion of notes to common stock (in shares) | shares   12,683,281                  
Convertible debt, fair value disclosures       $ 15,100,000              
Convertible Debt | Related Party | ProFrac Agreement Contract | Reverse Stock Split                      
Related Party Transaction                      
Conversion of notes to common stock (in shares) | shares   2,113,881                  
PIPE Transaction | Convertible Debt | Related Party                      
Related Party Transaction                      
Debt instrument, face amount                     $ 10,000,000
Fleet purchase commitment percentage                     33.00%
Conditional revenue shortfall rate (percent)                     25.00%
Amended ProFrac Agreement | Convertible Debt | Related Party                      
Related Party Transaction                      
Debt instrument, face amount         $ 50,000,000            
Fleet purchase commitment percentage         70.00%            
Increase in number of active hydraulic fleets | fleet         30            
Potential increase to contract term (years)         10 years            
ProFrac Holdings | Related Party                      
Related Party Transaction                      
Revenue from external customers           33,200,000 29,500,000 88,300,000 98,600,000    
Cost of sales           $ 25,627,000 $ 23,822,000 $ 63,723,000 $ 88,566,000    
ProFrac Holdings | Related Party | February 2023 Warrants                      
Related Party Transaction                      
Conversion of notes to common stock (in shares) | shares       12,683,281              
v3.24.3
Business Segment, Geographic and Major Customer Information - Reportable Segments (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Summarized financial information regarding reportable segments        
Revenue from external customers $ 49,742 $ 47,268 $ 136,267 $ 145,870
Gross profit 9,119 9,047 27,108 14,833
Change in fair value of Contract Consideration Convertible Notes Payable       (29,969)
Income (loss) from operations 2,723 1,619 7,052 20,804
Depreciation 220 181 662 530
Interest expense 256 160 842 2,537
Paid-in-kind interest on Contract Consideration Convertible Notes Payable       2,129
Paid-in-kind interest on convertible notes payable       155
Other interest expense       253
Income tax 37 81 293 98
Additions to long-lived assets 262 135 491 292
Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 16,565 17,806 47,935 47,278
Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 33,177 29,462 88,332 98,592
Product        
Summarized financial information regarding reportable segments        
Revenue from external customers 48,243 45,865 132,052 141,695
Product | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 15,281 16,789 44,347 43,736
Product | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 32,962 29,076 87,705 97,958
Services        
Summarized financial information regarding reportable segments        
Revenue from external customers 1,499 1,403 4,215 4,175
Services | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 1,284 1,017 3,588 3,542
Services | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 215 386 627 634
Operating Segments | Chemistry Technologies        
Summarized financial information regarding reportable segments        
Gross profit 7,944 8,240 24,888 11,279
Change in fair value of Contract Consideration Convertible Notes Payable       (29,969)
Income (loss) from operations 5,559 5,519 17,810 32,694
Depreciation 156 149 475 462
Interest expense 0 0 0  
Paid-in-kind interest on Contract Consideration Convertible Notes Payable       2,129
Paid-in-kind interest on convertible notes payable       0
Other interest expense       0
Income tax 0 0 0 0
Additions to long-lived assets 158 0 333 30
Operating Segments | Chemistry Technologies | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 14,097 16,326 42,143 41,020
Operating Segments | Chemistry Technologies | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 32,977 29,252 87,732 98,135
Operating Segments | Chemistry Technologies | Product | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 13,600 15,764 40,427 39,150
Operating Segments | Chemistry Technologies | Product | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 32,962 29,076 87,705 97,956
Operating Segments | Chemistry Technologies | Services | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 497 562 1,716 1,870
Operating Segments | Chemistry Technologies | Services | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 15 176 27 179
Operating Segments | Data Analytics        
Summarized financial information regarding reportable segments        
Gross profit 1,175 807 2,220 3,554
Change in fair value of Contract Consideration Convertible Notes Payable       0
Income (loss) from operations 130 (37) (652) 550
Depreciation 37 26 108 61
Interest expense 0 0 0  
Paid-in-kind interest on Contract Consideration Convertible Notes Payable       0
Paid-in-kind interest on convertible notes payable       0
Other interest expense       0
Income tax 0 0 0 0
Additions to long-lived assets 71 135 105 230
Operating Segments | Data Analytics | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 2,468 1,480 5,792 6,258
Operating Segments | Data Analytics | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 200 210 600 457
Operating Segments | Data Analytics | Product | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 1,681 1,025 3,920 4,586
Operating Segments | Data Analytics | Product | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 0 0 0 2
Operating Segments | Data Analytics | Services | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 787 455 1,872 1,672
Operating Segments | Data Analytics | Services | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 200 210 600 455
Corporate and Other        
Summarized financial information regarding reportable segments        
Gross profit 0 0 0 0
Change in fair value of Contract Consideration Convertible Notes Payable       0
Income (loss) from operations (2,966) (3,863) (10,106) (12,440)
Depreciation 27 6 79 7
Interest expense 256 160 842  
Paid-in-kind interest on Contract Consideration Convertible Notes Payable       0
Paid-in-kind interest on convertible notes payable       155
Other interest expense       253
Income tax 37 81 293 98
Additions to long-lived assets 33 0 53 32
Corporate and Other | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 0 0 0 0
Corporate and Other | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 0 0 0 0
Corporate and Other | Product | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 0 0 0 0
Corporate and Other | Product | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 0 0 0 0
Corporate and Other | Services | Nonrelated Party        
Summarized financial information regarding reportable segments        
Revenue from external customers 0 0 0 0
Corporate and Other | Services | Related Party        
Summarized financial information regarding reportable segments        
Revenue from external customers $ 0 $ 0 $ 0
v3.24.3
Business Segment, Geographic and Major Customer Information - Assets by Reportable Segments (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Segment Reporting Information    
Total assets $ 160,649 $ 157,513
Operating Segments | Chemistry Technologies    
Segment Reporting Information    
Total assets 143,399 138,559
Operating Segments | Data Analytics    
Segment Reporting Information    
Total assets 7,917 6,604
Corporate and Other    
Segment Reporting Information    
Total assets $ 9,333 $ 12,350
v3.24.3
Business Segment, Geographic and Major Customer Information - Geographic Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenues from External Customers and Long-Lived Assets        
Revenue from external customers $ 49,742 $ 47,268 $ 136,267 $ 145,870
U.S.        
Revenues from External Customers and Long-Lived Assets        
Revenue from external customers 48,498 46,401 131,763 141,251
UAE        
Revenues from External Customers and Long-Lived Assets        
Revenue from external customers 592 635 3,136 3,547
Other countries        
Revenues from External Customers and Long-Lived Assets        
Revenue from external customers $ 652 $ 232 $ 1,368 $ 1,072
v3.24.3
Business Segment, Geographic and Major Customer Information - Major Customers (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Segment Reporting Information        
Revenue from external customers $ 49,742 $ 47,268 $ 136,267 $ 145,870
Related Party        
Segment Reporting Information        
Revenue from external customers 33,177 29,462 88,332 98,592
Customer Concentration Risk | Sales | ProFrac Services, LLC | Related Party        
Segment Reporting Information        
Revenue from external customers $ 33,177 $ 29,462 $ 88,332 $ 98,592
Percentage of revenue by major customers (in percentage) 66.70% 62.30% 64.80% 67.60%
v3.24.3
Business Segment, Geographic and Major Customer Information - Major Suppliers (Details) - Purchases - Cost of Goods and Service - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Supplier A        
Segment Reporting Information        
Supplies expense $ 8,885 $ 6,094 $ 16,639 $ 36,318
Total spend (in percentage) 24.60% 25.30% 17.50% 32.50%
Supplier B        
Segment Reporting Information        
Supplies expense $ 5,187 $ 5,581 $ 16,885 $ 21,752
Total spend (in percentage) 14.40% 23.20% 17.80% 19.50%
Supplier C        
Segment Reporting Information        
Supplies expense $ 4,348 $ 4,197 $ 16,583 $ 13,151
Total spend (in percentage) 12.10% 17.40% 17.50% 11.80%
Supplier D        
Segment Reporting Information        
Supplies expense $ 3,782      
Total spend (in percentage) 10.50%      
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