What changed in this filing

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Item 1. Financial Statements

2025-11-07 compared with 2025-08-08 · 221 added, 178 removed, 693 unchanged (37% of the section changed)

3 unchanged sentences

(in thousands, except share data)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Current assets:

1 unchanged sentence

Restricted cash 103 102

Accounts receivable, net of allowance for credit losses of $ 430 and $ 447 at June 30, 2025 and December 31, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 716 and $ 447 at September 30, 2025 and December 31, 2024, respectively

26,767 17,386

Accounts receivable, related party, net of allowance for credit losses of $ 0 at June 30, 2025 and December 31, 2024

Accounts receivable, related party, net of allowance for credit losses of $ 0 at September 30, 2025 and December 31, 2024

44,831 52,370

30 unchanged sentences

Common stock, $ 0.0001 par value, 240,000,000 shares authorized;

30,968,827 shares issued and 29,854,440 shares outstanding at June 30, 2025;

31,102,241 shares issued and 29,989,657 shares outstanding at September 30, 2025;

30,938,073 shares issued and 29,826,508 shares outstanding at December 31, 2024

3 unchanged sentences

Treasury stock, at cost;

1,114,387 and 1,111,565 shares at June 30, 2025 and December 31, 2024, respectively

1,112,584 and 1,111,565 shares at September 30, 2025 and December 31, 2024, respectively

( 34,748 ) ( 34,666 )

5 unchanged sentences

(in thousands, except per share data)

Three months ended June 30, Six months ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

14 unchanged sentences

Interest expense ( 1,351 ) ( 256 ) ( 2,563 ) ( 842 )

Other income, net 181 75 287 49

Other income (expense), net ( 8 ) 102 279 151

Total other expense ( 1,359 ) ( 154 ) ( 2,284 ) ( 691 )

Income before income taxes 7,743 2,569 14,972 6,361

Income tax expense ( 17 ) ( 15 ) ( 81 ) ( 257 )

Income tax benefit (expense) 12,612 ( 37 ) 12,531 ( 293 )

Net income $ 20,355 $ 2,532 $ 27,503 $ 6,068

9 unchanged sentences

(in thousands)

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

7 unchanged sentences

(in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

10 unchanged sentences

Stock compensation expense 1,706 915

Deferred income tax expense 16 216

Deferred income tax (benefit) expense ( 12,773 ) 233

Changes in current assets and liabilities:

18 unchanged sentences

Payments on asset-based loan ( 145,127 ) ( 128,666 )

Payments of asset-based loan origination costs ( 150 ) ( 164 )

Payment of note payable issuance costs ( 480 ) —

2 unchanged sentences

Proceeds from issuance of stock under Employee Stock Purchase Plan 113 88

Proceeds from issuance of stock from stock option exercises 8 —

Proceeds from stock option exercises 574 —

Payments for finance leases ( 60 ) ( 22 )

Net cash used in financing activities ( 740 ) ( 1,765 )

Net cash provided by (used in) financing activities 1,075 ( 6,329 )

Effect of changes in exchange rates on cash and cash equivalents ( 142 ) 6

10 unchanged sentences

(in thousands)

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Common Stock Treasury Stock Additional

3 unchanged sentences

Value Shares Cost

Balance, March 31, 2025 30,941 $ 3 1,114 $ ( 34,689 ) $ 465,112 $ 206 $ ( 310,928 ) $ 119,704

Balance, June 30, 2025 30,969 $ 3 1,114 $ ( 34,726 ) $ 415,637 $ 96 $ ( 309,160 ) $ 71,850

Net income — — — — — — 20,355 20,355

Foreign currency translation adjustment — — — — — 13 — 13

Stock issued under option exercises 2 — — — 8 — — 8

Stock option exercises 133 — — — 566 — — 566

Stock issued under employee stock purchase plan — — ( 4 ) — 45 — — 45

Restricted stock granted 26 — — — — — — —

Stock compensation expense — — — — 569 — — 569

1 unchanged sentence

Excess consideration over historical asset book value (Note 3) — — — — ( 208 ) — — ( 208 )

Issuance of April 2025 Warrant, net (Note 3) — — — — 42,204 — — 42,204

Balance, June 30, 2025

Fees related to issuance of April 2025 Warrant (Note 3) — — — — ( 197 ) — — ( 197 )

Valuation allowance release on deferred tax asset — — — — 17,527 — — 17,527

Balance, September 30, 2025

31,102 $ 3 1,113 $ ( 34,748 ) $ 433,939 $ 109 $ ( 288,805 ) $ 110,498

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Common Stock Treasury Stock Additional

3 unchanged sentences

Value Shares Cost

Balance, March 31, 2024 30,773 $ 3 1,112 $ ( 34,514 ) $ 463,484 $ 169 $ ( 325,244 ) $ 103,898

Balance, June 30, 2024 30,867 $ 3 1,107 $ ( 34,528 ) $ 463,844 $ 185 $ ( 323,270 ) $ 106,234

Net income — — — — — — 2,532 2,532

1 unchanged sentence

Stock issued under employee stock purchase plan — — ( 6 ) — 26 — — 26

Restricted stock granted 94 — — — — — — —

Restricted stock vested 25 — — — — — — —

Stock compensation expense — — — — 273 — — 273

Shares withheld to cover taxes — — 1 ( 6 ) — — — ( 6 )

Balance, June 30, 2024

Balance, September 30, 2024

30,892 $ 3 1,102 $ ( 34,534 ) $ 464,143 $ 133 $ ( 320,738 ) $ 109,007

3 unchanged sentences

(in thousands)

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Common Stock Treasury Stock Additional

6 unchanged sentences

Foreign currency translation adjustment — — — — — ( 142 ) — ( 142 )

Stock issued under stock option exercises 2 — — — 8 — — 8

Stock option exercises 135 — — — 574 — — 574

Stock issued under employee stock purchase plan — — ( 13 ) — 113 — — 113

6 unchanged sentences

Issuance of April 2025 Warrant, net (Note 3) — — — — 42,007 — — 42,007

Balance, June 30, 2025

Valuation allowance release on deferred tax asset — — — — 17,527 — — 17,527

Balance, September 30, 2025

31,102 $ 3 1,113 $ ( 34,748 ) $ 433,939 $ 109 $ ( 288,805 ) $ 110,498

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Common Stock Treasury Stock Additional

9 unchanged sentences

Restricted stock forfeited — — 11 — — — — —

Restricted stock vested 25 — — — — — — —

Stock compensation expense — — — — 915 — — 915

Shares withheld to cover taxes — — 7 ( 30 ) — — — ( 30 )

Balance, June 30, 2024

Balance, September 30, 2024

30,892 $ 3 1,102 $ ( 34,534 ) $ 464,143 $ 133 $ ( 320,738 ) $ 109,007

7 unchanged sentences

The Company’s Chemistry Technologies (“CT”) segment designs, develops, manufactures, packages, distributes and markets optimized chemistry solutions that we believe 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”) delivers real-time information and insights to its customers to enable optimization of operations and reduction of emissions and their carbon intensity.

We believe customers using this technology have obtained significant benefits, including additional profits, by enhancing operations in crude/condensates stabilization, enhancing blending operations, reducing time impacting transmix operations, increasing efficiencies and optimization of gas plants, allowing for the use of significantly lower cost field gas instead of diesel to generate power, lowering emissions, protecting equipment and ensuring product quality while reducing giveaways, i.e., providing higher value products at lower value product prices.

Our ability to facilitate the use of lower cost field gas to generate remote power solutions has been significantly enhanced through the acquisition of the assets described in Note 3, “Asset Acquisition.”

The Company’s Data Analytics (“DA”) segment delivers real-time information and insights to its customers designed to enable optimization of operations and reduction of emissions and their carbon intensity.

The Company’s technologies are founded upon an industry leading field-deployable, in-line optical near-infrared spectrometer that measures the quality, quantity and composition of hydrocarbon flows.

The instrument’s response is processed with advanced chemometrics modeling, artificial intelligence and machine learning algorithms to deliver valuable insights to our customers every 15 seconds.

The DA segment generates revenues through a combination of short and long-term equipment rentals (service revenue) and capital sales (product revenue).

Customers of the DA segment span across the oil and gas industry, including oil and gas supermajors, some of the largest midstream oil and gas companies, large gas processing plants, independent exploration and production companies and oil field service companies that provide hydraulic fracturing services.

We believe customers using our technology may obtain significant benefits, including additional profits, by enhancing operations in crude/condensates stabilization, enhancing blending operations, reducing time impacting transmix operations and increasing efficiencies and optimization of gas plants.

The DA segment has expanded its presence in providing mobile power generation solutions through the acquisition of the assets described in Note 3, “Asset Acquisition.” These assets facilitate the use of significantly lower-cost field gas, as a replacement to diesel, to generate power, lower emissions and protect equipment through the continuous measurement of gas quality.

The Company’s two operating segments, CT and DA, are supported by its Research & Innovation (“R&I”) advanced laboratory capabilities.

7 unchanged sentences

Changes in the allowance for credit losses are as follows (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Balance, beginning of year $ 447 $ 745

2 unchanged sentences

Balance, end of period $ 716 $ 447

As of June 30, 2025 and December 31, 2024, the Company had not recorded an allowance for credit losses for the related party accounts receivable from ProFrac Services, LLC (“ProFrac Services”) (see Note 17, “Related Party Transactions”).

As of September 30, 2025 and December 31, 2024, the Company had not recorded an allowance for credit losses for the related party accounts receivable from ProFrac Services, LLC (“ProFrac Services”) (see Note 17, “Related Party Transactions”).

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lessor Arrangements

1 unchanged sentence

On April 28, 2025, the Company entered into an equipment lease, the Lease Agreement (as defined below), with a related party customer under an operating lease arrangement (see Note 3, “Asset Acquisition”).

At contract inception, an evaluation is performed to determine if the lease arrangement conveys the right to control the use of an identified asset.

To the extent such rights of control are conveyed, a further assessment is made as to the applicable lease classification.

At contract inception, an evaluation was performed to determine if the lease arrangement conveys the right to control the use of an identified asset.

To the extent such rights of control were conveyed, a further assessment is made as to the applicable lease classification.

In determining whether a transaction should be classified as a sales-type or operating lease, the Company considers the following criteria at lease commencement:

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

major part of the remaining economic life of the leased asset , (4) whether the lease grants the lessee an option to purchase the leased asset that the lessee is reasonably certain to exercise, and (5) whether the underlying asset is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term.

(1) whether title of the asset transfers automatically or for a nominal fee by the end of the lease term, (2) whether the present value of the minimum lease payments equals or exceeds substantially all of the fair value of the leased asset, (3) whether the lease term is for the major part of the remaining economic life of the leased asset, (4) whether the lease grants the lessee an option to purchase the leased asset that the lessee is reasonably certain to exercise, and (5) whether the underlying asset is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term.

If any of these criteria are met, the lease is classified as a sales-type lease.

For the three and six month periods ended June 30, 2025 and 2024, the Company did not have any sales-type leases.

Based on the Company’s assessment, and in accordance with ASC 842, the Lease Agreement was classified as an operating lease.

For the three and nine months ended September 30, 2025 and 2024, the Company did not have any sales-type leases.

For operating leases, rental income is recognized on a straight-line basis over the lease term as lease revenue.

The cost of customer-leased equipment is recorded within Property and equipment, net in the balance sheets and depreciated over the equipment’s estimated useful life.

The cost of customer-leased equipment is recorded within Property and equipment, net in the balance sheet and depreciated over the equipment’s estimated useful life.

Depreciation expense associated with the leased equipment under operating lease arrangements is reflected in Depreciation in the statements of operations.

4 unchanged sentences

Guidance not listed below was assessed and determined to be either not applicable, clarifications of items listed below, have no material effect on the Company’s financial statements or already adopted by the Company.

New Accounting Standards Issued and Not Adopted as of June 30, 2025

New Accounting Standards Issued and Not Adopted as of September 30, 2025

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, "Income Taxes (Topic 740):

2 unchanged sentences

ASU 2023-09 is effective for the Company prospectively to all annual periods beginning for the annual period ending December 31, 2025.

Early adoption is permitted.

This is expected to result in expanded tax disclosures in the annual financial statements for the year ended December 31, 2025.

The FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures” (“ASU 2024-03”), which enhances the disclosures required for certain expense captions in the Company's annual and interim consolidated financial statements.

8 unchanged sentences

Pursuant to the terms of the Lease Agreement, ProFrac GDM agreed to lease from PWRtek, for a period of six years, twenty-two operating mobile power generation assets, comprised of fourteen digitally enhanced mobile natural gas power generation filtration units and eight gas distribution units and eight additional units, comprised of seven gas distribution units and one mobile natural gas power generation filtration unit, that were under construction (collectively, the “Leased Equipment”) as of April 28, 2025.

The Lease Agreement provides for fixed rental rates for the Leased Equipment during the first five years of the Lease Agreement and then prevailing market rates during the sixth year.

The Lease Agreement provides for fixed rental rates for the Leased Equipment during the first five years of the

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease Agreement and then prevailing market rates during the sixth year.

The Lease Agreement does not include a purchase option for the purchase of the Leased Equipment at the end of the Lease Agreement term.

The Company began recognizing lease revenue associated with the twenty-two operating mobile power generation assets on April 28, 2025, the effective date of the Lease Agreement.

With respect to the Leased Equipment under construction, the Company will recognize lease revenue at the earlier of the in-service date or January 1, 2026.

In accordance with ASC 842, the Lease Agreement is accounted for as an operating lease.

With respect to the Leased Equipment under construction, the Company began recognizing lease revenue on the respective dates each of the eight units were placed in-service.

As of September 30, 2025, all of the eight units under construction as of April 28, 2025 had been completed and placed in-service.

Total consideration paid by the Company in connection with the PWRtek Transactions was $ 107.5 million, which consisted of the following:

(1) an offset of $ 17.6 million against the Company’s accrued 2024 Contract Shortfall Fee (see Note 17, “Related Party Transactions”), which was the consideration for the acquisition of the Acquired Assets, (2) a warrant (the “April 2025 Warrant”) to purchase 6,000,000 shares of the Company’s common stock, (3) a secured promissory note, issued by PWRtek in the initial principal amount of $ 40 million (the “PWRtek Note”), and (4) offsets against potential future period Contract

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Shortfall Fee amounts that may become due under the ProFrac Agreement (see Note 17, “Related Party Transactions”).

The estimated fair value of the Leased Equipment was deemed to be in excess of the total consideration of $ 107.5 million.

3 unchanged sentences

The Company recorded the fair value of the April 2025 Warrant as additional paid in capital within stockholders’ equity, net of $ 0.7 million of issuance costs, as the April 2025 Warrant is classified as equity.

As of September 30, 2025, the April 2025 Warrant had not been exercised.

The PWRtek Note provides for a five -year term and is subject to a 10 % annual interest rate, payable quarterly in cash or in-kind (i.e., added to the principal balance quarterly) at PWRtek’s option.

4 unchanged sentences

The Company recorded $ 0.5 million as deferred financing costs on April 28, 2025.

As of June 30, 2025, there was $ 39.5 million outstanding, net of unamortized deferred financing costs of $ 0.5 million under the PWRtek Note.

As of September 30, 2025, there was $ 39.6 million outstanding, net of unamortized deferred financing costs of $ 0.4 million under the PWRtek Note.

See Note 10 - “Debt” for additional information.

For the three and six months ended June 30, 2025, interest expense related to the PWRtek Note was $ 0.7 million and as of June 30, 2025, interest payable related to the PWRtek Note was $ 0.7 million.

For the three and nine months ended September 30, 2025, interest expense related to the PWRtek Note was $ 1.0 million and $ 1.7 million, respectively.

As of September 30, 2025, interest payable related to the PWRtek Note was $ 1.0 million.

Contract Shortfall Fees for the measurement period of January 1, 2024 through December 31, 2024 totaled approximately $ 32.6 million (the “2024 Contract Shortfall Fees”) and was included in accounts receivable, related party as of December 31, 2024.

2 unchanged sentences

Due to ProFrac controlling more than 50% of the Company’s outstanding shares (see Note 17, “Related Party Transaction”), the acquisition of the Acquired Assets qualified as a transfer of assets between entities under common control.

As such, the Acquired Assets have been recorded at ProFrac’s historical book value of approximately $ 15.1 million as of April 28, 2025.

The total consideration paid by the Company in connection with the PWRtek Transactions in excess of ProFrac’s historical book value of the Acquired Assets of $ 92.4 million was recorded as a reduction to additional paid in capital for the PWRtek Transactions within stockholders’ equity.

As such, the Acquired Assets were recorded at ProFrac’s historical book value of approximately $ 14.9 million.

The total consideration paid by the Company in connection with the PWRtek Transactions in excess of ProFrac’s historical book value of the Acquired Assets of $ 92.6 million was recorded as a reduction to additional paid in capital for the PWRtek Transactions within stockholders’ equity during the nine months ended September 30, 2025.

Financial results from the Lease Agreement and operation of the Acquired Assets are reported within the Company’s DA segment.

See Note 8, “Leases” for additional information.

The following table summarizes the consideration transferred and the historical book value of identified Acquired Assets at the date of the PWRtek Transactions:

April 28, 2025

(in thousands)

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the consideration transferred and the historical book value of identified Acquired Assets at the date of the PWRtek Transactions (in thousands):

Components of consideration:

9 unchanged sentences

Excess consideration over assets historical book value $ 92,608

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 — Revenue from Contracts with Customers

3 unchanged sentences

Total revenue disaggregated by revenue source is as follows (in thousands):

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

6 unchanged sentences

Total cost of sales disaggregated is as follows (in thousands):

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

5 unchanged sentences

Other cost of sales represents costs directly associated with the generation of revenue that cannot be attributed directly to tangible goods sold or services.

Other cost of sales for the three and six months ended June 30, 2025 includes $ 0.2 million related to the Lease Agreement.

Other cost of sales for the three and nine months ended September 30, 2025 includes $ 0.6 million and $ 0.8 million, respectively, related to the Lease Agreement.

Examples of other costs of sales are certain personnel costs and equipment rental and insurance costs.

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cost of sales, disaggregated between external customers and related party, is as follows (in thousands):

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

5 unchanged sentences

Contract assets are as follows (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Contract assets $ 83,060 $ 83,060

3 unchanged sentences

Contract assets, long term $ 56,655 $ 63,105

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In connection with entering into the Initial ProFrac Agreement (defined below) and Amended ProFrac Agreement (defined below) on February 2, 2022 and May 17, 2022, respectively, as discussed in Note 17, “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 June 30, 2025 and December 31, 2024, $ 59.4 million and $ 63.1 million, respectively, of the contract assets were classified as long term based upon our estimate of the forecasted revenues from the ProFrac Agreement that will not be realized within the next twelve months of the ProFrac Agreement.

As of September 30, 2025 and December 31, 2024, $ 56.7 million and $ 63.1 million, respectively, of the contract assets were classified as long term based upon our estimate of the forecasted revenues from the ProFrac Agreement that 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 June 30, 2025 and 2024, the Company recognized $ 1.4 million and $ 1.5 million, respectively, of contract assets amortization that is recorded as a reduction of the transaction price included in related party revenue in the consolidated statement of operations.

During the six months ended June 30, 2025 and 2024, the Company recognized $ 2.9 million and $ 2.7 million, respectively, of contract assets amortization that is recorded as a reduction of the transaction price included in related party revenue in the consolidated statement of operations.

The below table reflects our estimated amortization per year (in thousands) based on the Company’s current forecasted revenues from the ProFrac Agreement.

During the three months ended September 30, 2025 and 2024, the Company recognized $ 1.3 million and $ 1.6 million, respectively, of contract assets amortization that is recorded as a reduction of the transaction price included in related party revenue in the consolidated statement of operations.

During the nine months ended September 30, 2025 and 2024, the Company recognized $ 4.2 million and $ 4.3 million, respectively, of contract assets amortization that is recorded as a reduction of the transaction price included in related party revenue in the consolidated statement of operations.

The table below reflects our estimated amortization per year (in thousands) based on the Company’s forecasted revenues from the ProFrac Agreement as of September 30, 2025.

Years ending December 31, Amortization

2025 (excluding first six months)

2025 (excluding first nine months)

Thereafter through May 2032 23,503

Total contract assets $ 64,834

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6 — Inventories

Inventories are as follows (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Raw materials $ 4,830 $ 4,945

3 unchanged sentences

Inventories, net $ 13,232 $ 13,303

During the three months ended June 30, 2025 and 2024, additional reserves recorded were $ 0.2 million and $ 0.1 million, respectively, for the CT segment.

For the three months ended June 30, 2025, additional reserves of $ 5 thousand were recorded for the DA segment with no additional reserves recorded for the three months ended June 30, 2024.

During the six months ended June 30, 2025 and 2024, additional reserves recorded were $ 0.2 million and $ 0.4 million, respectively, for the CT segment and $ 18 thousand and $ 13 thousand, respectively, for the DA segment.

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended September 30, 2025 and 2024, additional reserves recorded were $ 28 thousand and $ 0.2 million, respectively, for the CT segment.

For the three months ended September 30, 2025, additional reserves of $ 28 thousand were recorded for the DA segment with no additional reserves recorded for the three months ended September 30, 2024.

During the nine months ended September 30, 2025 and 2024, additional reserves recorded were $ 0.3 million and $ 0.6 million, respectively, for the CT segment and $ 45 thousand and $ 13 thousand, respectively, for the DA segment.

Note 7 — Property and Equipment

Property and equipment are as follows (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Land $ 886 $ 886

10 unchanged sentences

Leased equipment (See Note 3, “Asset Acquisition”) has an estimated useful life of ten years.

Depreciation expense totaled $ 0.4 million and $ 0.2 million for the three months ended June 30, 2025 a nd 2024, respectively.Depreciation expense totaled $ 0.6 million and $ 0.4 million for the six months ended June 30, 2025 a nd 2024, respectively.

Depreciation expense totaled $ 0.6 million and $ 0.2 million for the three months ended September 30, 2025 a nd 2024, respectively.

Depreciation expense totaled $ 1.2 million and $ 0.7 million for the nine months ended September 30, 2025 a nd 2024, respectively.

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 — Leases

The components of lease expense and supplemental cash flow information are as follows (in thousands):

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

10 unchanged sentences

Financing cash flows from finance leases 10 — 18 —

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

Years ending December 31, Operating Leases Finance Leases

2025 (excluding first six months) $ 841 $ 90

2025 (excluding first nine months) $ 406 $ 45

2026 1,810 180

5 unchanged sentences

Present value of lease liabilities $ 7,103 $ 413

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental balance sheet information related to leases is as follows (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Operating Leases

14 unchanged sentences

Finance leases 9.5 % — %

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease Agreement Income

The Company recorded income from the Lease Agreement (see Note 3, “Asset Acquisition”) of $ 3.2 million for both the three and six months ended June 30, 2025.

At June 30, 2025, the minimum future lease income related to the Lease Agreement is as follows (in thousands):

The Company recorded income from the Lease Agreement (see Note 3, “Asset Acquisition”) of $ 6.1 million and $ 9.3 million for the three and nine months ended September 30, 2025, respectively.

At September 30, 2025, the minimum future lease income related to the Lease Agreement is as follows (in thousands):

Years ending December 31, Lease Agreement Income

2025 (excluding first six months) (1)

2025 (excluding first nine months) (1)

Thereafter (2)

Total rental income (through April 2030)

(1) Excludes income from assets not placed in service at June 30, 2025.

(1) All assets have been placed in service as of September 30, 2025.

(2) Excludes rental income for the sixth year of the Lease Agreement as rental rates in year six will be determined based on prevailing market rates.

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 through October 30, 2030.

The Company recorded rental income from the sublease of $ 0.2 million and $ 0.2 million for the three months ended June 30, 2025 and 2024, respectively and $ 0.4 million and $ 0.4 million for the six months ended June 30, 2025 and 2024, respectively, which is included in the Company’s statement of operations in Other income (expense), net.

The Company recorded rental income from the sublease of $ 0.1 million and $ 0.2 million for the three months ended September 30, 2025 and 2024, respectively and $ 0.5 million and $ 0.4 million for the nine months ended September 30, 2025 and 2024, respectively, which is included in the Company’s statement of operations in Other income (expense), net.

Rental income from the sublease offsets the monthly rental expense from the Company’s lease of the facility.

1 unchanged sentence

Years ending December 31, Sublease Income

2025 (excluding first six months)

2025 (excluding first nine months)

Thereafter 639

2 unchanged sentences

Current accrued liabilities are as follows (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Severance costs $ 406 $ 380

5 unchanged sentences

Total current accrued liabilities $ 4,925 $ 5,912

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10 — Debt

3 unchanged sentences

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 June 30, 2025 and December 31, 2024, the Company had $ 5.1 million and $ 4.8 million, respectively, outstanding under the ABL.

As of June 30, 2025, the Company had approximately $ 9.2 million of available borrowings under the ABL.

During the three months ended June 30, 2025 and 2024, the Company incurred $ 0.2 million and $ 0.2 million, respectively, in interest and fees related to the ABL.

During the six months ended June 30, 2025 and 2024, the Company incurred $ 0.3 million and $ 0.4 million, respectively, in interest and fees related to the ABL.

As of June 30, 2025 and December 31, 2024, the Company recorded $ 0.2 million and $ 0.3 million, respectively, of unamortized deferred financing costs related to the ABL.

As of September 30, 2025 and December 31, 2024, the Company had $ 6.7 million and $ 4.8 million, respectively, outstanding under the ABL.

As of September 30, 2025, the Company had approximately $ 9.6 million of available borrowings under the ABL.

During the three months ended September 30, 2025 and 2024, the Company incurred $ 0.4 million and $ 0.3 million, respectively, in interest and fees related to the ABL.

During the nine months ended September 30, 2025 and 2024, the Company incurred $ 0.7 million and $ 0.7 million, respectively, in interest and fees related to the ABL.

As of September 30, 2025 and December 31, 2024, the Company recorded $ 0.2 million and $ 0.3 million, respectively, 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.

For both the three and six months ended June 30, 2025, the weighted-average interest rate was 9.5 %.

For the three and nine months ended September 30, 2025, the weighted-average interest rate was 9.46 % and 9.40 %, respectively.

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 2.5 % of the borrowing base limit of the ABL (if terminated with more than 12 months remaining until the maturity date) or 1.5 % of the borrowing base limit of the ABL (if terminated with less than 12 months remaining until the maturity date).

If the ABL is terminated prior to the end of its term, the Company is required to pay an early termination fee of 2.5 % of the borrowing base limit of the ABL (if terminated with more than 12 months

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

remaining until the maturity date) or 1.5 % 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.

In connection with the Company’s entry into the Purchase Agreement, the Company entered into the Letter Agreement with the lender whereby the lender will not test compliance with respect to the Tangible Net Worth (as defined in the ABL) covenant through and including December 31, 2025.

Pursuant to the Letter Agreement, the Company will be required to maintain positive trailing three-month consolidated net income on a monthly basis through and including December 31, 2025 and PWRtek is prohibited from making distributions, except as permitted pursuant to the PWRtek Note.

Pursuant to the Letter Agreement, the Company will be required to maintain positive trailing three-month consolidated net income on a monthly basis through and including December 31, 2025.

In addition, the ABL provides the lender a blanket security interest on all or substantially all of the Company’s assets, excluding the PWRtek Assets.

The Company was in compliance with all of the applicable covenants under the ABL as of June 30, 2025.

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company was in compliance with all of the applicable covenants under the ABL as of September 30, 2025.

Related Party Note Payable

As of June 30, 2025, amounts outstanding under the PWRtek Note (see Note 3, “Asset Acquisition”) are as follows (in thousands):

June 30, 2025

As of September 30, 2025, amounts outstanding under the PWRtek Note (see Note 3, “Asset Acquisition”) are as follows (in thousands):

September 30, 2025

PWRtek Note payable $ 40,000

1 unchanged sentence

Total PWRtek Note payable $ 39,560

As of June 30, 2025, the fair value of the PWRtek Note approximated the carrying amount.

As of September 30, 2025 , the fair value of the PWRtek Note approximated the carrying amount.

Principal payment for future years is as follows (in thousands):

Years ending December 31, Principal Payments

2025 (excluding first six months)

Thereafter 40,000

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• 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, accrued liabilities - related party, accounts payable and ABL approximate fair value due to the short-term nature of these accounts.

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of Other Financial Instruments

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):

June 30, December 31,

September 30, December 31,

Level 1 Level 2 Level 3 2025 Level 1 Level 2 Level 3 2024

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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 six months ended June 30, 2025 and 2024 classified as Level 3 (in thousands):

Three months ended June 30, Six months ended June 30,

The following table presents the changes in balances of liabilities for the three and nine months ended September 30, 2025 and 2024 classified as Level 3 (in thousands):

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

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federal income tax rate of 21% to income before income tax for the reasons set forth below (dollars in thousands):

Three months ended June 30,

Three months ended September 30,

federal statutory tax rate $ 1,626 21.0 % $ 523 21.0 %

1 unchanged sentence

income taxed at different rates 34 0.4 % 144 5.8 %

Increase (reduction) in tax expense related to stock-based awards ( 188 ) ( 10.5 ) % 16 0.8 %

Reduction in tax expense related to stock-based awards ( 271 ) ( 3.5 ) % ( 9 ) ( 0.3 ) %

Change in valuation allowance ( 13,243 ) ( 171.0 ) % ( 756 ) ( 30.4 ) %

Non-deductible expenses ( 107 ) ( 1.4 ) % 98 3.9 %

Income tax expense and effective rate $ 17 1.0 % $ 15 0.6 %

Six months ended June 30,

Income tax (benefit) expense and effective rate $ ( 12,612 ) ( 162.9 ) % $ 37 1.5 %

Nine months ended September 30,

federal statutory tax rate $ 3,144 21.0 % $ 1,320 21.0 %

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Non-deductible expenses 327 2.2 % 141 2.3 %

Income tax expense and effective rate $ 81 1.1 % $ 257 6.7 %

As of June 30, 2025, the Company had U.S.

Income tax (benefit) expense and effective rate $ ( 12,531 ) ( 83.7 ) % $ 293 4.7 %

As of September 30, 2025, the Company had U.S.

net operating loss carryforwards (“NOLs”) of $ 190.1 million, including $ 40.6 million expiring in various amounts from 2029 through 2037, which can offset 100 % of taxable income, and $ 149.5 million that has an indefinite carryforward period, which can offset 80 % of taxable income per year.

5 unchanged sentences

Based on an analysis of the Section 382 limitation, the Company estimates that all carryforwards with the exception of $ 0.9 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.

Given the Company’s anticipated future earnings, we believe that there is a reasonable possibility that within the next 3 to 12 months, sufficient positive evidence may become available to allow us to reach the conclusion that a significant portion of the valuation allowance will no longer be needed.

Release of the valuation allowance would result in the recognition of certain deferred tax assets and an income tax benefit for the period the release is recorded.

However, the exact timing and amount of the valuation allowance release are subject to change based on our ongoing analysis of all negative and positive evidence including the level of profitability that we are able to achieve.

On July 4, 2025, the U.S.

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The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing and the business interest expense limitation.

ASC 740, “Income Taxes,” requires the effects of changes in tax rates and laws to be recognized in the period in

ASC 740, “Income Taxes,” requires the effects of changes in tax rates and laws to be recognized in the period in which the legislation is enacted.

Changes in tax laws may affect recorded deferred tax assets and deferred tax liabilities and our effective tax rate in the future, and the Company recognized those changes in tax laws in the quarter ended September 30, 2025.

Valuation Allowance

The Company considered both positive and negative evidence and determined that as of September 30, 2025 a full valuation allowance was no longer required for certain deferred tax assets.

Positive evidence included our results of operations reaching an adjusted three-year cumulative income position on a rolling twelve-quarter basis during the quarter ended September 30, 2025, that indicates a trend of profitability;

future reversals of existing taxable temporary differences;

and an evaluation of currently available information about future years forecasted taxable income, specifically, the forecasted future income based

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

which the legislation is enacted.

Changes in tax laws may affect recorded deferred tax assets and deferred tax liabilities and our effective tax rate in the future, and the Company continues to evaluate the impacts the new legislation will have on its financial statements.

on existing contracts including the ProFrac Agreement (discussed below in Note 17, “Related Party Transactions”) and the Lease Agreement with ProFrac (see Note 3, “Asset Acquisition”).

The Company’s assessment of profitability considered the impact of unusual and non-recurring items on historical book income or losses.

However, because of the lack of objectively verifiable information in years after the expiration of the ProFrac Agreement and Lease Agreement, it was determined that forecasted future income may not be sufficient to realize all the deferred tax assets.

Therefore, a partial release of valuation allowance for federal deferred tax assets was recorded during the three and nine months ended September 30, 2025 totaling $ 29.7 million and $ 31.1 million, respectively, of which $ 16.3 million during the three and nine months ended September 30, 2025 was recorded to equity as a change to intraperiod tax allocation in interim periods within the same year related to a deferred tax asset arising from a basis difference in connection with the Asset Acquisition.

In addition, a partial release of valuation allowance for state deferred tax assets was recorded during both the three and nine months ended September 30, 2025 totaling $ 1.9 million, of which $ 1.2 million during the three and nine months ended September 30, 2025 was recorded to equity.

We intend to continue maintaining a valuation allowance on a substantial portion of our deferred tax assets until there is sufficient evidence to support a reversal of such allowances.

The federal and state valuation allowances currently estimated to be necessary at December 31, 2025 are $ 41.3 million The timing and amount of future valuation allowance reductions are subject to future levels of profitability being achieved.

Note 13 — Commitments and Contingencies

From time to time, the Company is subject to litigation and other claims that arise in the normal course of business.

As of June 30, 2025, the Company was not party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

As of September 30, 2025, the Company was not party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

However, the results of current or future matters cannot be predicted with certainty;

13 unchanged sentences

The Company accounts for treasury stock using the cost method and includes treasury stock as a component of stockholders’ equity.

During the three months ended June 30, 2025 and 2024, the Company withheld approximately 5 thousand shares and 4 thousand shares, respectively, of the Company’s common stock at fair market value for payment of income tax withholding owed by employees upon the vesting of restricted shares During the six months ended June 30, 2025 and 2024, the Company withheld approximately 8 thousand shares and 6 thousand shares, respectively, of the Company’s common stock at fair market value for payment of income tax withholding owed by employees upon the vesting of restricted shares.

During the three months ended September 30, 2025 and 2024, the Company withheld approximately 3 thousand shares and 1 thousand shares, respectively, of the Company’s common stock at fair market value for payment of income tax withholding owed by employees upon the vesting of restricted shares During the nine months ended September 30, 2025 and 2024, the Company withheld approximately 11 thousand shares and 7 thousand shares, respectively, of the Company’s common stock at fair market value for payment of income tax withholding owed by employees upon the vesting of restricted shares.

Shares issued as restricted stock awards to employees under the 2018 Long-Term Incentive Plan are accounted for as treasury stock when forfeited.

During the six months ended June 30, 2025 and 2024, forfeited stock awards returned to treasury stock were approximately 3 thousand shares and 11 thousand shares, respectively.

During the nine months ended September 30, 2025 and 2024, forfeited stock awards returned to treasury stock were approximately 3 thousand shares and 11 thousand shares, respectively.

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 15 — Earnings Per Share

1 unchanged sentence

Diluted earnings per common share is calculated by dividing the adjusted net income by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive.

For the three and six months ended June 30, 2025 and 2024, there were no adjustments to net income.

For the three and nine months ended September 30, 2025 and 2024, there were no adjustments to net income.

Potentially dilutive common share equivalents consist of incremental shares of common stock issuable upon exercise of the June 2022 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, employee stock options outstanding, and the June 2022 Warrants are computed using the treasury stock method.

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The calculation of the basic and diluted earnings per share for the three and six months ended June 30, 2025 and 2024 is as follows (in thousands):

Three months ended June 30, Six months ended June 30,

The calculation of the basic and diluted earnings per share for the three and nine months ended September 30, 2025 and 2024 is as follows (in thousands):

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

7 unchanged sentences

Diluted earnings per share $ 0.53 $ 0.08 $ 0.78 $ 0.20

(1) Basic weighted average shares outstanding for the three and six month 2025 periods include the weighted average of 6,000,000 shares associated with the April 2025 Warrant assumed issued at the April 28, 2025 closing date of the PWRtek Transactions (see Note 3, “Asset Acquisition”).

(1) Basic weighted average shares outstanding for the three and nine month 2025 periods include the weighted average of 6,000,000 shares associated with the April 2025 Warrant assumed issued at the April 28, 2025 closing date of the PWRtek Transactions (see Note 3, “Asset Acquisition”).

Note 16 — Supplemental Cash Flow Information

Supplemental cash flow information is as follows (in thousands):

Six months ended June 30,

Nine months ended September 30,

Supplemental non-cash operating activities:

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PWRtek Note issued ( 40,000 ) —

Valuation allowance release on deferred tax asset on PWRtek assets ( 17,527 ) —

Excess consideration over historical asset book value 92,608 —

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The current measurement period for Contract Shortfall Fees is January 1, 2025 through December 31, 2025.

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 six months ended June 30, 2025 reflect variable consideration for Contract Shortfall Fees of $ 15.2 million, which will be due in the first quarter of 2026 under the terms of the ProFrac Agreement.

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, 2025 reflect variable consideration for Contract Shortfall Fees of $ 8.7 million and $ 23.9 million, respectively, which will be due in the first quarter of 2026 under the terms of the ProFrac Agreement, net of the Contract Shortfall Fee offset of $ 7.2 million as discussed in Note 3, “Asset Acquisition,” as recorded as Accrued liabilities, related party.

The measurement period for 2024 was January 1, 2024 through December 31, 2024.

Related party revenues for the six months ended June 30, 2024 included $ 17.1 million of Contract Shortfall Fees.

During the three months ended June 30, 2025 and 2024, the Company’s related party revenues were $ 33.2 million and $ 28.0 million, respectively.

For the three months ended June 30, 2025 and 2024, these revenues were net of amortization of contract assets of $ 1.4 million and $ 1.5 million, respectively.

Cost of sales attributable to these revenues were $ 22.3 million and $ 19.5 million, respectively, for the three months ended June 30, 2025 and 2024.

During the six months ended June 30, 2025 and 2024, the Company’s related party revenues were $ 64.1 million and $ 55.2 million, respectively.

For the six months ended June 30, 2025 and 2024, these revenues were net of amortization of contract assets of $ 2.9 million and $ 2.7 million, respectively.

Cost of sales attributable to these revenues were $ 43.5 million and $ 38.1 million, respectively, for the six months ended June 30, 2025 and 2024.

As of June 30, 2025 and December 31, 2024 our accounts receivable from ProFrac Services was $ 37.3 million and $ 52.4 million, respectively, which is recorded in accounts receivable, related party on the consolidated balance sheets.

Also during 2023, the Company entered into various related party transactions with ProFrac Holdings and ProFrac Holdings II as described in Note 17, “Related Party Transactions” to the consolidated financial statements from the 2024 Annual Report.

As a result of these related party transactions and other purchases by affiliates of ProFrac, ProFrac Holdings or its affiliates owned approximately 61 % of the Company’s common stock, including the effects of the June 2022 Warrants and April 2025 Warrant, as of June 30, 2025.

PWRtek Transactions and Lease Agreement

Related party revenues for the three and nine months ended September 30, 2024 included $ 6.8 million and $ 23.8 million, respectively, of Contract Shortfall Fees.

As described in Note 3, “Asset Acquisition,” on April 28, 2025, the Company entered into a series of transactions with various subsidiaries of ProFrac referred to as the PWRtek Transactions.

1 unchanged sentence

See Note 3, “Asset Acquisition,” Note 8, “Lease Agreements – Lease Agreement Income,” and Note 10, “Debt” for additional information on the Lease Agreement, April 2025 Warrant and PWRtek Note.

During the three months ended September 30, 2025 and 2024, the Company’s related party revenues were $ 33.1 million and $ 33.2 million, respectively.

For the three months ended September 30, 2025 and 2024, these revenues were net of amortization of contract assets of $ 1.3 million and $ 1.6 million, respectively.

Cost of sales attributable to these revenues were $ 19.9 million and $ 25.6 million, respectively, for the three months ended September 30, 2025 and 2024.

During the nine months ended September 30, 2025 and 2024, the Company’s related party revenues were $ 97.2 million and $ 88.3 million, respectively.

For the nine months ended September 30, 2025 and 2024, these revenues were net of amortization of contract assets of $ 4.2 million and $ 4.3 million, respectively.

Cost of sales attributable to these revenues were $ 63.5 million and $ 63.7 million, respectively, for the nine months ended September 30, 2025 and 2024.

As of September 30, 2025 and December 31, 2024 our accounts receivable from ProFrac Services was $ 44.8 million and $ 52.4 million, respectively, which is recorded in accounts receivable, related party on the consolidated balance sheets.

FLOTEK INDUSTRIES, INC.

12 unchanged sentences

Chemistry Technologies.

The CT segment includes specialty chemistries, logistics and technology services, which we believe enables our customers to pursue improved efficiencies and performance throughout the life cycle of their wells, and also helps our customers improve their environmental, social and governance (“ESG”) and operational goals.

The CT segment includes specialty chemistries, logistics and technology services, which we believe enable our customers to pursue improved efficiencies and performance throughout the life cycle of their wells, and also help our customers improve their environmental, social and governance (“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 .

2 unchanged sentences

The DA segment seeks to deliver real-time information and insights to our customers to enable optimization of operations, which has been enhanced through the addition of the Acquired Assets (see Note 3, “Asset Acquisition”), and reduction of emissions and their carbon intensity.

Customers of the DA segment span across the entire oil and gas market, from upstream production to midstream facilities to refineries and distribution networks.

FLOTEK INDUSTRIES, INC.

1 unchanged sentence

Summarized financial information of the reportable segments is as follows (in thousands):

As of and for the three months ended June 30,

As of and for the three months ended September 30,

Chemistry Technologies Data Analytics

17 unchanged sentences

Interest expense $ ( 1,351 ) $ ( 1,351 )

Other income, net 181 181

Other expense, net ( 8 ) ( 8 )

Income before income taxes $ 7,743

16 unchanged sentences

Income before income taxes $ 2,569

Other segment items for the three months ended June 30, 2025 includes depreciation of $ 0.2 million and $ 0.2 million in the CT and DA segments, respectively, and R&D costs of $ 0.3 million and $ 0.2 million in the CT and DA segments, respectively.

Other segment items for the three months ended June 30, 2024 includes depreciation of $ 0.2 million and $ 35 thousand in the CT and DA segments, respectively, and R&D costs of $ 0.4 million and $ 0.1 million in the CT and DA segments, respectively.

Other segment items for the three months ended September 30, 2025 includes depreciation of $ 0.2 million and $ 0.4 million in the CT and DA segments, respectively, and R&D costs of $ 0.4 million and $ 0.2 million in the CT and DA segments, respectively.

Other segment items for the three months ended September 30, 2024 includes depreciation of $ 0.2 million and $ 37 thousand in the CT and DA segments, respectively, and R&D costs of $ 0.3 million and $ 0.1 million in the CT and DA segments, respectively.

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of and for the six months ended June 30,

As of and for the nine months ended September 30,

Chemistry Technologies Data Analytics

36 unchanged sentences

Income before income taxes $ 6,361

Other segment items for the six months ended June 30, 2025 includes depreciation of $ 0.3 million and $ 0.2 million in the CT and DA segments, respectively;

Other segment items for the nine months ended September 30, 2025 includes depreciation of $ 0.5 million and $ 0.6 million in the CT and DA segments, respectively;

R&D costs of $ 0.9 million and $ 0.4 million in the CT and DA segments, respectively;

and gain on sale of property and equipment in the CT segment of $ 7 thousand.

Other segment items for the six months ended June 30, 2024 includes depreciation of $ 0.3 million and $ 70 thousand in the CT and DA segments, respectively;

Other segment items for the nine months ended September 30, 2024 includes depreciation of $ 0.5 million and $ 0.1 million in the CT and DA segments, respectively;

and R&D costs of $ 1.0 million and $ 0.4 million in the CT and DA segments, respectively.

2 unchanged sentences

Assets of the Company by reportable segments and corporate and other are as follows (in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Chemistry Technologies $ 146,976 $ 152,161

3 unchanged sentences

Additions to long-lived assets by reportable segments and corporate and other are as follows (in thousands):

As of and for the six months ended June 30,

As of and for the nine months ended September 30,

Chemistry Technologies Data Analytics

3 unchanged sentences

Additions to long-lived assets $ 333 $ 105 $ 53 $ 491

(1) Additions to long-lived assets for the six months ended June 30, 2025 includes $ 14.5 million of assets as a result of the non-cash PWRtek Transactions (see Note 3 and Note 17).

(1) Additions to long-lived assets for the nine months ended September 30, 2025 includes $ 14.3 million of assets as a result of the non-cash PWRtek Transactions (see Note 3 and Note 17).

Geographic Information

Revenue by country is based on the location where services are provided and products are sold.

For the three and six months ended June 30, 2025 and 2024 no country other than the U.S.

For the three and nine months ended September 30, 2025 and 2024 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 June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

9 unchanged sentences

Revenue % of Total Revenue

Three months ended June 30, 2025

Three months ended September 30, 2025

Customer A (related party)

$ 33,090 59.1 %

Three months ended June 30, 2024

Three months ended September 30, 2024

Customer A (related party)

$ 33,177 66.7 %

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenue % of Total Revenue

Six months ended June 30, 2025

Nine months ended September 30, 2025

Customer A (related party)

$ 97,197 57.3 %

Six months ended June 30, 2024

Nine months ended September 30, 2024

Customer A (related party)

$ 88,332 64.8 %

The concentration with ProFrac Services, ProFrac GDM and in the oil and gas industry increases credit, commodity and business risk.

The concentration with ProFrac and in the oil and gas industry increases credit, commodity and business risk.

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Accounts receivable from major external customers, as a percentage of accounts receivable, is as follows (in thousands):

Accounts Receivable % of Total Non-Related Party Accounts Receivable

As of September 30, 2025

$ 8,274 30.1 %

Customer B $ 3,170 11.5 %

Customer C $ 2,241 8.2 %

As of December 31, 2024

$ 3,324 18.6 %

Customer C $ 2,264 12.7 %

Customer B $ 1,288 7.2 %

Please see Note 17 - “Related Party Transactions” for additional information regarding accounts receivable with ProFrac.

Major Suppliers

Expenditure with major suppliers, as a percentage of consolidated supplier expenditure, is as follows (in thousands):

Three months ended June 30, Expenditure % of Total Expenditure

Three months ended September 30, Expenditure % of Total Expenditure

Supplier A $ 7,977 26 %

1 unchanged sentence

Supplier C 3,808 13 %

Supplier A $ 5,975 23 %

Supplier D 3,368 11 %

Supplier B 4,103 16 %

Six months ended June 30, Expenditure % of Total Expenditure

Supplier D $ 8,885 25 %

Supplier A 5,187 14 %

Supplier B 10,933 16 %

Supplier C 4,348 12 %

Supplier E 3,782 10 %

Nine months ended September 30, Expenditure % of Total Expenditure

Supplier A $ 26,787 26 %

Supplier D 14,301 14 %

Supplier A $ 16,885 18 %

Supplier B 4,103 8 %

Supplier D 16,639 18 %

Supplier C 16,583 17 %

Note 19 — Subsequent Event

The Company has evaluated the effects of events that have occurred subsequent to June 30, 2025 through 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 other than that discussed below that would require recognition in the June 30, 2025 interim financial statements or disclosure in the notes to the interim financial statements.

The Company has evaluated the effects of events that have occurred subsequent to September 30, 2025 through 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, other than discussed below, that would require recognition in the September 30, 2025 interim financial statements or disclosure in the notes to the interim financial statements.

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PWRtek Note Sale

On November 7, 2025, the Company entered into a series of agreements with ProFrac GDM, LLC, a subsidiary of ProFrac (“ProFrac GDM”), in connection with the assignment of the PWRtek Note by ProFrac GDM, LLC to PC Energy Credit I LLC (the “Note Assignment”).

The PWRtek Note was originally issued as a component of the total consideration paid by the Company in connection with the PWRtek Transactions (see “Note 3 - Asset Acquisition” above).

In connection with the Note Assignment, (1) the Company and ProFrac GDM have entered into that certain Consent, Acknowledgement and Amendment to Senior Secured Note Documents, dated as of November 7, 2025 (the “Assignment Consent”), (2) ProFrac and ProFrac GDM have entered into that certain Guaranty, dated as of November 7, 2025 (the “ProFrac Parent Guaranty”), and (3) the Company and ProFrac GDM have entered into that certain Amendment No.

1 to Agreement for Equipment Rental, dated as of November 7, 2025 (the “Dry Lease Amendment,” and together with the Assignment Consent and the ProFrac Parent Guaranty, the “Transaction Documents”).

Pursuant to the Transaction Documents, in consideration for the Company’s consent to the Note Assignment, the parties involved agreed to various amendments which include, among other things, (a) the provision of a guaranty by ProFrac of all of ProFrac GDM’s obligations under the Lease Agreement, (b) the elimination of all make-whole amounts and prepayment premiums applicable to the PWRtek Note, providing the Company with the unrestricted ability to prepay the PWRtek Note without premiums or penalties, (c) the removal of a “Material Adverse Effect” event of default under the PWRtek Note relating to the Company, and (d) the removal of restrictions included in the PWRtek Note on PWRTEK, LLC’s, a subsidiary of the Company, ability to make distributions (as well as the corresponding removal of restrictions included in the Lease Agreement on ProFrac GDM’s ability to make distributions).

In addition, in order to facilitate the Note Assignment, the parties further agreed to the removal of the mutual rights to offset Contract Shortfall Fees that are payable under the ProFrac Agreement and the Company’s right to offset amounts due pursuant to the Lease Agreement against the principal of the PWRtek Note.

As a result, the full principal amount of the PWRtek Note will be payable in cash by the Company, rather than via offset against amounts payable pursuant to the Company’s other agreements with ProFrac and its affiliates.

Correspondingly, any amounts due to the Company from ProFrac and its affiliates pursuant to the Company’s other agreements with ProFrac and its affiliates, including order shortfall payments, must be paid in cash, rather than via offset.

In addition, on October 28, 2025, the Company’s lender under the ABL provided its consent (the “ABL Consent”) to the Note Assignment(see “Note 10 - Debt”).

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-Q

Item 1. Financial Statements