What changed in this filing

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Item 1A. Risk Factors

2022-03-31 compared with 2021-03-16 · 66 added, 84 removed, 314 unchanged (32% of the section changed)

Risk Factors.

The Company’s business, financial condition, results of operations, cash flows and liquidity are subject to various risks and uncertainties.

The Company’s business, financial condition, results of operations, cash flows, liquidity and prospects are subject to various risks and uncertainties.

Readers of this Annual Report should not consider any descriptions of these risk factors to be a complete set of all potential risks that could affect the Company.

These factors should be carefully considered together with the other information contained in this Annual Report and the other reports and materials filed by the Company with the SEC.

many of these risks are interrelated and, as a result, the occurrence of certain risks could trigger and/or exacerbate other risks.

Such a combination could materially increase the severity of the impact of these risks on the Company’s business, results of operations, financial condition, cash flows or liquidity.

Further, many of these risks are interrelated and, as a result, the occurrence of certain risks could trigger and/or exacerbate other risks.

Such a combination could materially increase the severity of the impact of these risks on the Company’s business, results of operations, financial condition, cash flows, liquidity or prospects.

This Annual Report contains “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties.

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Risks Related to the Company’s Business

The Company’s business is largely dependent upon its customers’ spending, both in the oil and gas industry and in the sanitizer, surface cleaner and disinfectant sector.

The Company’s business is largely dependent upon its customers’ spending, both in the oil and gas industry and in adjacent industrial applications for professional chemistries.

Spending could be adversely affected by industry conditions or by new or increased governmental regulations;

global economic conditions;

spending on sanitizer, surface cleaner and disinfectant products;

sentiment surrounding the COVID-19 pandemic;

lingering sentiment surrounding the pandemic;

the availability of credit;

and oil and natural gas prices.

The Company’s CT and DA segments are dependent upon customers’ willingness to make operating and capital expenditures and purchasing decisions related to the Company’s products.

Expectations of a decline in future oil and natural gas market prices or lessened focus on sanitation chemicals could reduce demand for the Company’s products and services.

Industry conditions are influenced by numerous factors over which the Company has no control, including the supply of and demand for oil and natural gas, domestic and international economic conditions, availability and effectiveness of a COVID-19 vaccine, general focus on sanitization and cleansing, and mergers and divestitures among the Company’s target customer base.

Demand for and prices of the Company’s products are subject to a variety of factors, including, but not limited to:

• global demand for energy as a result of population growth, economic development, and general economic and business conditions;

• the timing and rate of economic recovery from the effects of COVID-19;

• the need for sanitization products related to concern over COVID-19 and similar diseases and related consumer behavior;

• the timing and rate of economic recovery from the effects of the pandemic;

• the ability of the Organization of Petroleum Exporting Countries (“OPEC”) to set and maintain production levels and the impact of non-OPEC producers on global supply;

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• domestic and international refining activity;

• availability of vaccines and other therapeutic treatments for COVID-19;

• pipeline capacity to critical markets and out of producing regions;

• political and economic uncertainty and sociopolitical unrest;

• political and economic uncertainty, sociopolitical unrest including the current conflict in Ukraine and ongoing sanctions imposed on Russia

• cost of exploration, production and transport of oil and natural gas;

• sustained market adoption of green chemistry solutions;

• technological advances impacting energy production and consumption;

• weather conditions;

• foreign exchange rates.

The volatility of commodity prices and the consequential effect on the activities of the Company’s target customer base could adversely impact the activity levels of the Company’s customers.

Volatile economic conditions could weaken customer expenditures, causing reduced demand for the Company’s products and services and a significant adverse effect on the Company’s operating results.

It is difficult to predict the pace of industry growth, the direction of oil and natural gas prices, the direction and magnitude of economic activity, the effects or duration of the COVID-19 pandemic, the demand for sanitizer, surface cleaner and disinfectant products, and to what extent these conditions could affect the Company.

Demand for the Company’s goods and services may be adversely impacted if volatile economic conditions weaken customer expenditures, specifically as it concerns the continued adoption of chemistry solutions with lower overall impact on the environment.

It is difficult to predict the pace of industry growth, the direction of oil and natural gas prices, the direction and magnitude of economic activity, the continuing impact of the pandemic, the demand for professional chemistry products, and to what extent these conditions could affect the Company.

However, reduced cash flow and capital availability could adversely impact the financial condition of the Company’s customers, which could result in customer project modifications, delays or cancellations, general business disruptions, and delay in, or nonpayment of, amounts that are owed to the Company.

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Furthermore, if certain of the Company’s suppliers were to experience significant cash flow constraints or become insolvent as a result of such conditions, a reduction or interruption in supplies or a significant increase in the price of supplies could occur, adversely impacting the Company’s results of operations and cash flows.

The COVID-19 pandemic has significantly reduced demand for our services and may continue to have a prolonged material adverse impact on our financial condition, results of operations and cash flows.

The effects of the COVID-19 pandemic, including actions taken by businesses and governments, have resulted in a significant and continued reduction in international and U.S.

economic activity.

These effects have materially and adversely affected, and may continue to materially and adversely affect, the demand for oil and natural gas, as well as for our oil and gas related services and products.

The decline in our customers’ demand for our oil and gas related services and products has had a material adverse impact on our financial condition, results of operations and cash flows.

In addition, we have adopted social distancing and work-from-home procedures, which have had and may continue to have an impact on the ability of employees and management of the Company to communicate and work efficiently.

We expect such impact will continue to have certain negative effects on the Company’s business.

The timing of the effectiveness of vaccines, economic uncertainty, and future developments and effects are highly uncertain and cannot be predicted.

The uncertain future development of this crisis could materially and adversely affect our business, operations, operating results, financial condition, liquidity and/or capital levels.

The persistence and or emergence of new pandemic threats can significantly reduce demand for our services and adversely impact our financial condition, results of operations and cash flows.

Actions taken by businesses and governments in efforts to mitigate pandemic threats have the potential to negatively impact international and U.S.

economic activity for an indeterminable duration.

These effects can directly impact the demand for oil and natural gas, as well as our oil and gas related services and products.

Furthermore, pandemic conditions can create disruptions in raw materials, logistics, and access to other critical resources such as human capital and financial markets.

Reduced unconventional oil production could lessen the positive effects of a general recovery of the oil and gas industry.

The majority of the Company’s product offerings in its CT segment, other than sanitizer, surface cleaner and disinfectant products, are used in unconventional oil and gas operations.

The majority of the Company’s product offerings in its CT segment, other than professional chemistry products are used in unconventional oil and gas operations.

The Company has little to no exposure to conventional or offshore sectors.

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The Company’s inability to develop and/or introduce new products or differentiate existing products could have an adverse effect on its ability to be responsive to customers’ needs and could result in a loss of customers, as well as adversely affecting the Company’s future success and profitability.

The industries in which the Company does business are characterized by technological advancements that have historically resulted in, and will likely continue to result in, substantial improvements in the scope and quality of specialty chemistries and analytical servi ces.

Consequently, the Company’s future success is dependent, in part, upon the Company’s continued ability to timely develop innovative products and services.

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Competitors with greater resources and lower cost structures or who are trying to gain market share may be successful in providing competing products and services to the Company’s customers at lower prices than the Company currently charges.

The Company operates in an environment with relatively low barriers to entry;

employees of the Company may leave and compete directly with the Company.

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Under either scenario, the Company could become involved in costly litigation or other legal proceedings regarding its patent or other intellectual property rights, from both an enforcement and defensive standpoint.

Even if the Company chooses to enforce its patent or other intellectual property rights against a third party, there may be risk that the Company’s patent or other intellectual property rights become invalidated or otherwise unenforceable through legal proceedings.

If intellectual property infringement claims are asserted against the Company, the Company could defend itself from such assertions or could seek to obtain a license under the third party’s intellectual property rights in order to mitigate exposure.

Even if the Company chooses to enforce its patent or other intellectual property rights against a third party, there may be risk that the Company’s patent or other intellectual

property rights become invalidated or otherwise unenforceable through legal proceedings.

In the event the Company cannot obtain a license, third parties could file lawsuits or other legal proceedings against the Company, seeking damages (including treble damages) or an injunction against the manufacture, use, sale, offer for sale, or importation of the Company’s products and services.

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An award of damages, including material royalty payments, or the entry of an injunction order against the use, manufacture and sale of any of the Company’s products and services found to be infringing, could have an adverse effect on the Company’s results of operations and ability to compete.

Certain of the Company’s products and facilities, especially those related to the sanitizer, surface cleaner and disinfectant business, have been registered with the EPA and/or FDA.

Certain of the Company’s products and facilities, especially those related to the professional chemistry products, have been registered with the EPA and/or FDA.

The failure of the Company to maintain such EPA and FDA registrations could result in the inability of the Company to market or sell its products.

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The loss of key customers could have an adverse impact on the Company’s results of operations and could result in a decline in the Company’s revenue.

In the CT segment, in the aggregate, revenue derived from the Company’s three largest customers as a percentage of consolidated revenue for the years ended December 31, 2020 and 2019, totaled 50% and 40%, respectively.

C ustomer relationships are historically governed by purchase orders or other short-term contractual obligations as opposed to long-term contracts.

In the CT segment in aggregate, revenue derived from the Company’s three largest customers as a percentage of consolidated revenue for the years ended December 31, 2021 and 2020, totaled 44% and 50%, respectively.

The Company expects that customer concentration risk will increase due to the recent entry into the long-term supply agreement with Profrac Services LLC.

C ustomer relationships are substantially governed by purchase orders or other short-term contractual obligations as opposed to long-term contracts.

Losses of customers also may occur due to product, service or pricing issues, as well as industry consolidation.

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Materials used in servicing and manufacturing operations, as well as those purchased for sale, are generally available on the open market from multiple sources.

Acquisition costs and transportation of raw materials to the Company’s facilities have historically been impacted by extreme weather conditions.

Certain raw materials used by the Company’s CT segment are available only from limited sources;

accordingly, any disruptions to critical suppliers’ operations could materially and adversely impact the Company’s operations.

Prices paid for raw materials could be affected by energy products and other commodity prices;

Acquisition costs and transportation of raw materials to the Company’s facilities have historically been impacted by extreme weather conditions.

Additionally, prices paid for raw materials could be affected by energy products and other commodity prices;

weather and disease associated with our crop dependent raw materials;

tariffs and duties on imported materials;

evolving geopolitical risks;

foreign currency exchange rates;

and phases of the general business cycle and global demand.

The Company’s CT segment secures short- and long-term supply agreements for most of its critical raw materials from both domestic and international vendors.

Certain of the Company’s products use citrus terpene as a raw material.

While the Company believes that its existing supply and contractual arrangements are sufficient for its current usage, a loss of current supply may require the Company to find alternative raw materials or alternative sources of citrus terpene, each of which could have an adverse effect on the cost of the Company to produce its products.

The prices of key raw materials are subject to market fluctuations, which at times can be significant and unpredictable.

Availability of key raw materials, weather events, natural disasters, and health epidemics in countries from which the Company sources raw materials may significantly impact prices.

During a period of scarcity of supply the Company may also be negatively impacted by prioritization decisions enacted by its suppliers.

The Company may be unable to pass along price increases to its customers, which could result in a materially adverse impact on margins and operating profits.

The Company currently uses purchasing strategies designed, where possible, to align the timing of customer demand with the Company’s supply commitments.

However, the Company currently does not hedge commodity prices, but may consider such strategies in the future, and there is no guarantee that the Company’s purchasing strategies will prevent cost increases from resulting in materially adverse impacts on margins and operating profits.

The Company currently does not hedge commodity prices, but may consider such strategies in the future, and there is no guarantee that the Company’s purchasing strategies will prevent cost increases from resulting in materially adverse impacts on margins and operating profits.

The Company’s DA segment is dependent on its ability to source appropriate technical components for its Verax measurement system, certain of which are specialty products that are sole-sourced and are not easily replaceable with other sources.

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Removal of members of management or directors may be difficult or costly.

The Company’s management, employees and directors may have retention, employment or severance agreements in place.

The Company’s management, employees, Chairman and Chief Executive Officer may have retention, employment or severance agreements in place.

In the event that our employees, management or directors do not have the proper skills for management or operation of the Company, or the Company otherwise wishes to remove them from their position(s), the Company may be required to pay severance or similar payments.

Removal of some management and employees by the Company may also be difficult and require negotiations by the Company.

Failure to maintain effective disclosure controls and procedures and internal controls over financial reporting could have an adverse effect on the Company’s operations and the trading price of the Company’s common stock.

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Ineffective internal controls could also cause investors to lose confidence in reported financial information, which could negatively affect the trading price of the Company’s common stock, limit the ability of the Company to access capital markets in the future, and require additional costs to improve internal control systems and procedures.

The Company disclosed material weaknesses in internal controls during 2020.

The failure to properly remediate each of the material weaknesses, or the discovery of additional material weaknesses, could affect the Company’s operating results or cause the Company to be unable to meet its reporting obligations.

Network disruptions, security threats and activity related to global cyber-crime pose risks to the Company’s key operational, reporting and communication systems.

The Company relies on access to information systems for its operations.

Failures of, or interference with, access to these systems, such as network communications disruptions, could have an adverse effect on our ability to conduct operations and could directly impact consolidated reporting.

Cyberattacks may have a significant and adverse impact on the Company’s operations and related financial condition.

The Company relies on access to information systems for operational, reporting and communication functions..

Impairments of these systems, such as ransomware and network communications disruptions, could have an adverse effect on our ability to conduct operations and could directly impact consolidated reporting.

Phishing attacks could result in sensitive or confidential information being released by the Company.

Security breaches pose a risk to confidential data and intellectual property, which could result in damages to our competitiveness and reputation.

The Company’s policies and procedures, system monitoring and data back-up processes may not prevent or mitigate the effects of these potential disruptions or breaches.

The Company’s policies and procedures, system monitoring and data back-up processes may not prevent or detect potential disruptions or breaches in a timely or effective manner.

There can be no assurance that existing or emerging threats will not have an adverse impact on our systems or communications networks.

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As a result, the Company may not be able to finance strategic growth plans, take advantage of business opportunities, or to respond to competitive pressures.

The Company’s existing shelf registration statement does not have extra capacity for equity offerings, and there is no guarantee that the Company will file a new shelf registration statement.

There is no guarantee that the Company will file a new shelf registration statement.

The Company’s ability to procure debt financing, is dependent on, among other things, the willingness of banks and other financial institutions to lend into the Company’s industry and on their evaluation of the Company’s credit risk.

There is no guarantee that the Company will be able to procure debt financing or, in the event that it is able to procure debt financing, that the financing will be on favorable terms and conditions or at favorable rates of interest.

Failure to adapt to changing buying ha bits at the Company’s potential and existing customers could have a negative effect on the Company’s ability to attract and retain busine ss.

Failure to adapt to changing buying habits of the Company’s potential and existing customers could have a negative effect on the Company’s ability to attract and retain business.

The demographics and habits of the purchasing departments of many of the Company’s customers and potential customers is changing.

Key decision makers are less experienced and show different buying habits and approaches.

Customers are increasingly using advanced analytics to make purchasing decisions.

Customers are increasingly requiring vendors to integrate with purchasing modules and using advanced analytics to make purchasing decisions.

If the Company does not adapt to these changing purchasing trends, the Company may not be able to attract or retain business.

Failure to collect for goods and services sold to key customers could have an adverse effect on the Company’s financial results, liquidity and cash flows.

The Company performs credit analyses on potential customers;

The Company performs credit analysis on potential customers;

however, credit analysis does not provide full assurance that customers will be willing and/or able to pay for goods and services purchased from the Company.

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Because sales to domestic and international customers are generally made on an unsecured basis, there can be no assurance of collectability.

The Company’s sales revenues are concentrated among customers operating in the oil and gas industry.

Furthermore, the Company anticipates an increase in concentration risk in 2022 and beyond as a result of the entry of the Company into a substantial long-term agreement with ProFrac Services LLC.

If one or more major customers are unwilling or unable to pay its debts to the Company, it could have an adverse effect of the Company’s financial results, liquidity and cash flows.

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These events could result in damages requiring costly repairs, the interruption of Company business, including the loss of revenue and profits, and/or the Company being named as a defendant in lawsuits asserting large claims.

The Company does not have insurance against all foreseeable risks.

The Company does not

have insurance against all foreseeable or unforeseeable risks.

Consequently, losses and liabilities arising from uninsured or underinsured events could have an adverse effect on the Company’s business, financial condition and results of operations.

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Changes in the perception of citrus oils as a preferred VOC, increased consumer activism against hydraulic fracturing or other regulatory or legislative actions by governments could potentially result in materially reduced demand for the Company’s products and services and could adversely affect the Company’s business, financial condition, and results of operations.

Perceptions and related usage of chemistry solutions that are currently considered safe and acceptable, within specified parameters, may be subject to change in future periods as research and testing of environmental impacts mature.

The Company is subject to complex foreign, federal, state and local environmental, health, and safety laws and regulations, which expose the Company to liabilities that could adversely affect the Company’s business, financial condition, and results of operations.

The Company’s operations are subject to foreign, federal, state, and local laws and regulations related to, among other things, the protection of natural resources, injury, health and safety considerations, chemical exposure assessment, waste management, and transportation of waste and other hazardous materials.

The Company’s operations expose the Company to risks of environmental liability that could result in fines, penalties, remediation, property damage, and personal injury liability.

In order to remain compliant with laws and regulations, the Company maintains permits, authorizations, registrations, and certificates as required from regulatory authorities.

The Company’s operations are exposed to risks of environmental liability that could result in fines, penalties, remediation, property damage, and personal injury liability.

Sanctions for noncompliance with such laws and regulations could include assessment of administrative, civil and criminal penalties, revocation of permits, and issuance of corrective action orders.

The Company could incur substantial costs to ensure compliance with existing and future laws and regulations.

Laws protecting the environment have generally become more stringent and are expected to continue to evolve and become more complex and restrictive into the future.

Laws protecting the environment have generally become more stringent and are expected to continue to evolve and become more complex and restrictive in the future.

Failure to comply with applicable laws and regulations could result in material expense associated with future environmental compliance and remediation.

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Remediation expense and other damages arising as a result of such laws and regulations could be substantial and have a material adverse effect on the Company’s financial condition and results of operations.

Changes in law and regulation relating to hydraulic fracturing may have a negative effect on the Company’s operations.

Much of the Company’s revenue in its CT segment is derived from customers engaged in hydraulic fracturing services, a process that creates fractures extending from the well bore through the rock formation to enable natural gas or oil to flow more easily through the rock pores to a production well.

Changes in laws and regulations relating to hydraulic fracturing may have a negative effect on the Company’s operations.

Much of the Company’s revenue in its CT segment is derived from customers engaged in hydraulic fracturing services.

Some states have adopted regulations which require operators to publicly disclose certain non-proprietary information.

These regulations could require the reporting and public disclosure of the Company’s proprietary chemistry formulas.

In addition, the Biden administration has proposed additional restrictions on hydraulic fracturing.

The adoption of any future federal or state laws or local requirements, or the implementation of regulations imposing reporting obligations on, or otherwise limiting, the hydraulic fracturing process, could increase the difficulty of oil and natural gas well production activity and could have an adverse effect on the Company’s future results of operations.

The adoption of any future federal or state laws or local requirements, or the implementation of regulations imposing reporting obligations on, or otherwise limiting, the hydraulic fracturing process, could increase the difficulty of oil and natural gas production activity and could have an adverse effect on the Company’s future results of operations.

Regulation of greenhouse gases and/or climate change could have a negative impact on the Company’s business.

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In response to such studies, the issue of climate change and the effect of greenhouse gas emissions, in particular emissions from fossil fuels, is attracting increasing worldwide attention.

Existing or future laws, regulations, treaties, or international agreements related to greenhouse gases, climate change, and indoor air quality, including energy conservation or alternative energy incentives, could have a negative impact on the Company’s operations, if regulations resulted in a reduction in worldwide demand for oil and natural gas.

Company’s operations, if regulations resulted in a reduction in worldwide demand for oil and natural gas.

Other results could be increased compliance costs and additional operating restrictions, each of which could have a negative impact on the Company’s operations.

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Collections from international customers and agents could also prove difficult due to inherent uncertainties in foreign law and judicial procedures.

The Company could experience significant difficulty with collections or recovery due to the political or judicial climate in foreign countries where Company operations occur or in which the Company’s products are used.

The Company’s international operations must be compliant with the Foreign Corrupt Practices Act and other applicable U.S.

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In general, an ownership change occurs if the aggregate stock ownership of certain stockholders increases by more than 50 percentage points over such stockholders’ lowest percentage ownership during the testing period (generally three years).

Company’s common stock, even those outside the Company’s control, such as purchases or sales by investors, within the testing period could result in an “ownership change.”

An ownership change could limit the Company’s ability to utilize existing NOLs and tax attribute carryforwards for taxable years including or following an identified “ownership change.” Transactions involving the Company’s common stock, even those outside the Company’s control, such as purchases or sales by investors, within the testing period could result in an “ownership change.” Moreover, we believe the recently completed and pending convertible notes transactions may substantially impact our ability to use NOLs.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Act (“CARES Act”) was enacted in response to the COVID-19 pandemic.

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Demand for the Company’s products and services is particularly sensitive to levels of activity in the upstream, downstream and midstream sectors, and the corresponding capital spending by, oil and natural gas companies, including national oil companies.

One indication of drilling and completion activity and spending is rig count, which the Company monitors to gauge market conditions.

In addition, the U.S.

Energy Information Administration and other industry data sources report completion activity, which is utilized by the Company.

Any prolonged reduction in oil and natural gas prices or drop in rig and/or completion count could depress current levels of exploration, development, and production activity.

Perceptions of longer-term lower oil and natural gas prices by oil and natural gas companies could similarly reduce or defer major expenditures given the long-term nature of many large-scale development projects.

While capital spending programs for domestic producers appear to be improving, uncertainties around the potential for longer-term weakness in oil and natural gas prices could reduce or defer major expenditures given the long-term nature of many large-scale development projects.

Lower levels of activity could result in a corresponding decline in the demand for the Company’s oil and natural gas related products and services, which could have a material adverse effect on the Company’s revenue and profitability.

The demand for our sanitizer products is dependent on many factors, including human behavior in response to COVID-19 and market participants in the sanitizer, surface cleaner and disinfectant space.

A change in general behavior in response to widespread vaccine availability, relaxed attitudes towards sanitization, consumer reception of our products, or entrants into the sanitizer, surface cleaner and disinfectant space, may materially and adversely affect the demand for our products.

Events in global credit markets can significantly impact the availability of credit and associated financing costs for many of the Company’s customers.

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Also, the credit and economic environment could significantly impact the financial condition of some customers over a prolonged period, leading to business disruptions and restricted ability to pay for the Company’s products and services.

A continuing period of depressed oil and natural gas prices could result in further reductions in demand for the Company’s products and services and adversely affect the Company’s business, financial condition, and results of operations.

A continuous period of swings in oil and natural gas prices could result in further reductions in demand for the Company’s products and services and adversely affect the Company’s business, financial condition, and results of operations.

The markets for the Company’s products, especially oil and gas markets, have historically been volatile.

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The oil and natural gas markets may be volatile in the future.

The demand for the Company’s

products and services is, in large part, driven by general levels of exploration and production spending and drilling activity by its customers.

The demand for the Company’s products and services is, in large part, driven by general levels of exploration and production spending and drilling activity by its customers.

Future declines in oil or gas prices could adversely affect the Company’s business, financial condition, and results of operations.

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The Company’s services require skilled personnel able to perform physically demanding work.

Due to industry volatility, the demanding nature of the work, and the need for industry specific knowledge and technical skills, current employees could choose to pursue employment opportunities outside the Company that offer a more desirable work environment and/or higher compensation than is offered by the Company.

more desirable work environment and/or higher compensation than is offered by the Company.

As a result of these competitive labor conditions, the Company may not be able to find qualified labor, which could limit the Company’s growth.

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In order to attract and retain qualified personnel, the Company may be required to offer increased wages and benefits.

If the Company is unable to increase the prices of products and services to compensate for increases in compensation, or is unable to attract and retain qualified personnel, operating results could be adversely affected.

If the Company is unable to increase the prices of products and services to compensate for increases in compensation including inflation, or is unable to attract and retain qualified personnel, operating results could be adversely affected.

Severe weather could have an adverse impact on the Company’s business.

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Terrorist activities and the threat of potential terrorist activities and any resulting economic downturn could adversely affect the Company’s results of operations, impair the ability to raise capital, or otherwise adversely impact the Company’s ability to realize certain business strategies.

The armed conflict in Ukraine could affect regions in which the Company does business directly or indirectly and could harm the Company’s ability to sell its good and services in those regions.

Our DA segment may be materially and negatively affected by government regulations and/or facility disruptions.

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Additional regulation on oil and gas production, transportation, or processing of hydrocarbons may result in significantly reduced demand for our offerings, either individually or as a result of a decline in the overall oil and gas markets in the United States and abroad.

In addition, our products are subject to export control laws and regulations, and changes to those laws and regulations may negatively impact

our ability to pursue international opportunities.

In addition, our products are subject to export control laws and regulations, and changes to those laws and regulations may negatively impact our ability to pursue international opportunities.

Disruptions to pipelines and refineries, whether due to regulation, weather, demand, or other factors, may also have a materially adverse effect on our ability to derive revenue from our DA segment.

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The market price of the Company’s common stock has historically been subject to significant fluctuations.

The following factors, among others, could cause the price of the Company’s common stock to fluctuate due to:

The following factors, among others, could cause the price of the Company’s common stock to fluctuate:

• variations in the Company’s quarterly results of operations;

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• issuances of common stock or other securities in the future;

including debt convertible into the Company’s common stock;

• additions or departures of key personnel;

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If the Company is unable to satisfy the NYSE criteria for continued listing, its common stock would be subject to delisting.

A delisting of its common stock could negatively impact the Company by, among other things, reducing the liquidity and market price of the its common stock;

A delisting of its common stock could negatively impact the Company by, among other things, reducing the liquidity and market price of its common stock;

reducing the number of investors willing to hold or acquire the Company’s common stock, which could negatively impact its ability to raise equity financing;

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The potential issuance of additional shares of common stock may create downward pressure on the trading price of the Company’s common stock.

The Company may also issue additional shares of common stock or other securities that are convertible into or exercisable for common stock in order to raise capital or effectuate

other business purposes.

The Company may also issue additional shares of common stock or other securities that are convertible into or exercisable for common stock in order to raise capital or effectuate other business purposes.

Future sales of substantial amounts of common stock, or the perception that sales could occur, could have an adverse effect on the price of the Company’s common stock.

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If the Company loses the services of key members of management, the Company may not be able to manage operations and implement growth strategies.

The Company depends on the continued service of the Chief Executive Officer and President, the Chief Financial Officer and other key members of the executive management team, who possess significant expertise and knowledge of the Company’s business and industry.

The Company depends on the continued service of the Chief Executive Officer and President, the Chief Operating Officer, the Chief Financial Officer and other key members of the executive management team, who possess significant expertise and knowledge of the Company’s business and industry.

Furthermore, the Chief Executive Officer and President serves as Chairman of the Board of Directors.

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Any loss or interruption of the services of key members of the Company’s management could significantly reduce the Company’s ability to manage operations effectively and implement strategic business initiatives.

During 2020, the Company replaced its Chief Executive Officer, Chief Financial Officer, General Counsel and lead sales executive.

The failure of the new executives to effectively provide services to the Company and build experience and knowledge of the Company could have an adverse effect on the Company’s results of operations and ability to compete.

The Company’s tax returns are subject to audit by tax authorities.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors