What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2025-11-07 · 194 added, 433 removed, 481 unchanged (57% of the section changed)

3 unchanged sentences

(in thousands, except share data)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current assets:

1 unchanged sentence

Restricted cash 104 104

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

Accounts receivable, net of allowance for credit losses of $ 820 and $ 764 at March 31, 2026 and December 31, 2025, respectively

21,794 19,043

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

Accounts receivable, related party, net of allowance for credit losses of $ 0 at March 31, 2026 and December 31, 2025

61,023 64,204

Equipment credit, related party 11,782 —

Inventories, net 14,303 10,629

12 unchanged sentences

Accrued liabilities 8,771 7,256

Accrued liabilities, related party 7,248 —

Income taxes payable 295 258

3 unchanged sentences

Asset-based loan 4,666 3,332

Current portion of long-term debt — 60

Total current liabilities 68,727 61,575

Deferred revenue, long-term — 14

Note payable - related party, net of deferred financing costs 39,608 39,584

6 unchanged sentences

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

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

37,390,332 shares issued and 36,174,338 shares outstanding at March 31, 2026;

31,320,960 shares issued and 30,130,480 shares outstanding at December 31, 2025

3 unchanged sentences

Treasury stock, at cost;

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

1,215,994 and 1,190,480 shares at March 31, 2026 and December 31, 2025, respectively

( 36,681 ) ( 36,225 )

5 unchanged sentences

(in thousands, except per share data)

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

2025 2024 2025 2024

Three Months Ended March 31,

Revenue from external customers $ 18,165 $ 24,423

5 unchanged sentences

Selling, general, and administrative 6,925 6,282

Asset acquisition expenses 167 — 4,362 —

Depreciation 631 252

3 unchanged sentences

Income from operations 7,589 5,567

Other income (expense):

Other expense:

Interest expense ( 1,332 ) ( 229 )

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

Other income, net 16 106

Total other expense ( 1,316 ) ( 123 )

Income before income taxes 6,273 5,444

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

Income tax expense ( 1,609 ) ( 64 )

Net income $ 4,664 $ 5,380

5 unchanged sentences

Weighted average common shares used in computing diluted income per common share 38,340 31,752

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

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

FLOTEK INDUSTRIES, INC.

1 unchanged sentence

(in thousands)

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

2025 2024 2025 2024

Three months ended March 31,

Net income $ 4,664 $ 5,380

2 unchanged sentences

Comprehensive income $ 4,698 $ 5,335

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

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

FLOTEK INDUSTRIES, INC.

1 unchanged sentence

(in thousands)

Nine months ended September 30,

Three months ended March 31,

Cash flows from operating activities:

10 unchanged sentences

Stock compensation expense 824 461

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

Deferred income tax expense 1,572 14

Changes in current assets and liabilities:

18 unchanged sentences

Payments on asset-based loan ( 53,766 ) ( 58,136 )

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

Payment of note payable issuance costs ( 480 ) —

Payment of stock warrant issuance costs ( 653 ) —

Proceeds from exercise of April 2025 Warrant 1 —

Payments to tax authorities for shares withheld from employees ( 456 ) ( 23 )

5 unchanged sentences

Net change in cash and cash equivalents and restricted cash ( 55 ) 1,849

Cash and cash equivalents at the beginning of period 4,404 5,851

Restricted cash at the beginning of period 102 102

Cash and cash equivalents and restricted cash at beginning of period 4,506 5,953

Cash and cash equivalents at end of period 4,603 4,997

Restricted cash at the end of period 103 101

Cash and cash equivalents and restricted cash at end of period $ 4,706 $ 5,098

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

FLOTEK INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

Three Months Ended September 30, 2025

Common Stock Treasury Stock Additional

Capital Accumulated

Comprehensive

Income Accumulated Deficit Total Stockholders’ Equity

Value Shares Cost

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 option exercises 133 — — — 566 — — 566

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

Stock compensation expense — — — — 569 — — 569

Shares withheld to cover taxes — — 3 ( 22 ) — — — ( 22 )

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

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 September 30, 2024

Common Stock Treasury Stock Additional

Capital Accumulated

Comprehensive

Income Accumulated Deficit Total Stockholders’ Equity

Value Shares Cost

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

Net income — — — — — — 2,532 2,532

Foreign currency translation adjustment — — — — — ( 52 ) — ( 52 )

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

Restricted stock vested 25 — — — — — — —

Stock compensation expense — — — — 273 — — 273

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

Balance, September 30, 2024

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

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

Cash and cash equivalents at the beginning of the period 5,731 4,404

Restricted cash at the beginning of the period 104 102

Cash and cash equivalents and restricted cash at the beginning of the period 5,835 4,506

Cash and cash equivalents at the end of the period 5,676 6,253

Restricted cash at the end of the period 104 102

Cash and cash equivalents and restricted cash at the end of the period $ 5,780 $ 6,355

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

FLOTEK INDUSTRIES, INC.

1 unchanged sentence

(in thousands)

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Common Stock Treasury Stock Additional

9 unchanged sentences

Restricted stock granted 67 — — — — — — —

Restricted stock forfeited — — 3 — — — — —

Restricted stock units vested 3 — — — — — — —

Stock compensation expense — — — — 824 — — 824

Shares withheld to cover taxes — — 28 ( 456 ) — — — ( 456 )

Excess consideration over historical asset book value (Note 3) — — — — ( 92,608 ) — — ( 92,608 )

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

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

Balance, September 30, 2025

Exercise of April 2025 Warrant (Note 13) 6,000 1 — — — — — 1

Balance, March 31, 2026

37,390 $ 4 1,216 $ ( 36,681 ) $ 435,838 $ 130 $ ( 281,116 ) $ 118,175

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Common Stock Treasury Stock Additional

7 unchanged sentences

Stock issued under employee stock purchase plan — — ( 4 ) — 31 — — 31

Restricted stock granted 94 — — — — — — —

Restricted stock forfeited — — 3 — — — — —

2 unchanged sentences

Shares withheld to cover taxes — — 3 ( 23 ) — — — ( 23 )

Balance, September 30, 2024

Balance, March 31, 2025

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

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

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

FLOTEK INDUSTRIES, INC.

4 unchanged sentences

The Company is committed to delivering products and services that endeavor to maximize customer returns by leveraging chemistry as the common value creation platform.

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”) 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 proprietary chemistries, specialty chemistries, logistics and technology services seek to enable our customers to pursue improved efficiencies and performance throughout the life cycle of their desired chemical applications program.

The Company designs, develops, manufactures, packages, distributes and markets optimized chemistry solutions that are designed to accelerate existing sustainability practices to reduce the environmental impact of energy on the air, water, land and people.

The Company’s Data Analytics (“DA”) segment delivers real-time measurement 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 5-15 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 DA segment has expanded its presence in providing mobile power generation solutions through the acquisition and construction of power-generation assets which 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 DA segment generates revenues through a combination of short and long-term equipment rentals (service revenue) and capital sales (product revenue) both of which are founded on the usage of the segment’s proprietary real-time measurement technologies.

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):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Balance, beginning of year $ 764 $ 447

2 unchanged sentences

Balance, end of period $ 820 $ 764

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

The Company accounts for leasing arrangements in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 842, “Leases” (“ASC 842”).

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 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:

(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.

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 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.

As of March 31, 2026 and December 31, 2025, the Company had not recorded an allowance for credit losses for the related party accounts receivable from ProFrac Services, LLC (“ProFrac Services”) (see Note 16, “Related Party Transactions”).

Recent Accounting Pronouncements

3 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 September 30, 2025

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

Improvements to Income Tax Disclosures" ("ASU 2023-09"), which is intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

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.

New Accounting Standards Issued and Not Adopted as of March 31, 2026

Expense Disaggregation Disclosures

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.

2 unchanged sentences

The Company is currently evaluating the impact of this standard on its disclosures.

Note 3 — Asset Acquisition

The Company entered into a series of transactions in connection with an Asset Purchase Agreement, dated as of April 28, 2025 (the “Purchase Agreement”), with ProFrac GDM, LLC (“ProFrac GDM”), an indirect subsidiary of ProFrac Holding Corp.

(“ProFrac”), and various subsidiaries of ProFrac, pursuant to which, among other things, the Company acquired certain mobile power generation assets, comprised of twenty-two operating units and eight units under construction, certain inventory and related intellectual property (the “Acquired Assets”).

Concurrently, the Leased Equipment (as defined below) was leased back to ProFrac GDM pursuant to an Agreement for Equipment Rental, dated as of April 28, 2025, by and between PWRtek, LLC (“PWRtek”), a wholly-owned subsidiary of the Company, and ProFrac GDM (the “Lease Agreement”) (collectively, the “PWRtek Transactions”).

In accordance with FASB ASC 805, “Business Combinations,” the acquisition of the Acquired Assets is classified as an asset acquisition between entities under common control.

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

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 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 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.

The April 2025 Warrant has a seven -year term and can be exercised on a cashless basis for nominal consideration at any time following the date on which the Company’s stockholders have approved the issuance of the shares of the Company’s common stock underlying the April 2025 Warrant.

On July 9, 2025, the Company held a special stockholders meeting where the Company’s stockholders approved the issuance of the 6,000,000 shares of the Company’s common stock underlying the April 2025 Warrant.

The fair value of the April 2025 Warrant was $ 42.7 million.

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.

The principal becomes due at the end of the five-year term on April 28, 2030.

PWRtek’s obligations under the PWRtek Note are secured by a first priority lien on the Acquired Assets, including the Leased Equipment, as well as certain other after-acquired property of PWRtek.

While the PWRtek Note includes certain prepayment restrictions, Flotek and ProFrac GDM can each elect to apply up to fifty percent cumulatively of any future Contract Shortfall Fee (see Note 17, “Related Party Transactions”) that becomes due and payable under the ProFrac Agreement to prepay principal and interest due under the PWRtek Note without penalty.

The obligations under the PWRtek Note have been guaranteed by the Company.

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

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 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.

The Company collected $ 15.0 million of the 2024 Contract Shortfall Fees in cash in March 2025.

The remaining 2024 Contract Shortfall Fees of $ 17.6 million were offset as consideration for the Acquired Assets as described above.

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 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.

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:

April 2025 Warrant exercisable into 6,000,000 shares

PWRtek Note 40,000

2024 Contractual Shortfall Fee offset 17,552

Future Contract Shortfall Fee offset 7,248

Total consideration $ 107,460

Asset historical book value:

Leased equipment $ 14,252

Inventory 600

Total assets book value $ 14,852

Excess consideration over assets historical book value $ 92,608

Internal-Use Software Costs

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

ASU 2025-06 eliminates the previously required stage-based model for capitalization of internal-use software costs and now requires capitalization to begin when (i) management authorizes and commits to funding the project, and (ii) it is probable the project will be completed and used as intended.

The ASU also clarifies that all capitalized internal-use software, including implementation costs in hosting arrangements, are subject to the disclosure requirements of ASC 360-10.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of adoption on our disclosures .

Note 3 — Revenue from Contracts with Customers

3 unchanged sentences

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

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

2025 2024 2025 2024

Three months ended March 31,

Products $ 60,621 $ 53,625

4 unchanged sentences

The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs that cannot be directly attributed to either tangible goods or services.

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

2025 2024 2025 2024

Three months ended March 31,

Cost of sales:

4 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 nine months ended September 30, 2025 includes $ 0.6 million and $ 0.8 million, respectively, related to the Lease Agreement.

Other cost of sales for the three months ended March 31, 2026 includes $ 0.8 million, 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 September 30, Nine months ended September 30,

2025 2024 2025 2024

Three months ended March 31,

Cost of sales:

4 unchanged sentences

Contract assets are as follows (in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Contract assets $ 83,060 $ 83,060

3 unchanged sentences

Contract assets, long term $ 52,102 $ 55,115

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 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 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.

In connection with entering into the Initial ProFrac Agreement (defined below) and First Amendment to ProFrac Agreement (defined below) on February 2, 2022 and May 17, 2022, respectively, as discussed in Note 16, “Related Party Transactions,” the Company recognized contract assets of $ 10.0 million and $ 69.5 million, respectively, and associated fees of $ 3.6 million.

As of March 31, 2026 and December 31, 2025, $ 52.1 million and $ 55.1 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 quarterly.

During the three months ended March 31, 2026 and 2025, the Company recognized $ 2.2 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.

The table below reflects our estimated amortization per year (in thousands) based on the Company’s forecasted revenues from the ProFrac Agreement as of March 31, 2026.

Years ending December 31, Amortization

2025 (excluding first nine months)

2026 (excluding the first three months)

Thereafter through May 2032 13,139

4 unchanged sentences

Inventories are as follows (in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Raw materials $ 4,459 $ 4,821

3 unchanged sentences

Inventories, net $ 14,303 $ 10,629

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.

During the three months ended March 31, 2026 and 2025, additional reserves recorded were $ 0.4 million and $ 0.1 million, respectively, for the CT segment and $ 46 thousand and $ 13 thousand, respectively, for the DA segment.

Note 6 — Property and Equipment

Property and equipment are as follows (in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Land $ 886 $ 886

9 unchanged sentences

Property and equipment, net $ 21,912 $ 20,344

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

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

Depreciation expense totaled $ 0.6 million and $ 0.3 million for the three months ended March 31, 2026 a nd 2025, respectively.

Note 7 — Leases

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

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

2025 2024 2025 2024

Three months ended March 31,

Operating lease expense $ 302 $ 491

9 unchanged sentences

Financing cash flows from finance leases 8 —

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

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Maturities of lease liabilities as of March 31, 2026 are as follows (in thousands):

Years ending December 31, Operating Leases Finance Leases

2025 (excluding first nine months) $ 406 $ 45

2026 1,810 180

2026 (excluding first three months) $ 1,332 $ 136

2027 1,865 180

4 unchanged sentences

Present value of lease liabilities $ 6,436 $ 340

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Operating Leases

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Operating leases 4.4 years 4.6 years

Finance leases 2.6 years —

Finance leases 2.1 years 2.4 years

Weighted Average Discount Rate

1 unchanged sentence

Finance leases 9.5 % 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 $ 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):

The Company recorded income from the Lease Agreement (see Note 16, “Related Party Transactions”) of $ 6.8 million during the three months ended March 31, 2026.

At March 31, 2026, 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 nine months) (1)

Thereafter (2)

2026 (excluding first three months)

Total rental income (through April 2030)

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

(1) 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 $ 0.1 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.

The Company recorded rental income from the sublease of $ 0.2 million and $ 0.2 million for the three months ended March 31, 2026 and 2025, 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 nine months)

Thereafter 639

2026 (excluding first three months)

Total rental income $ 3,515

1 unchanged sentence

Current accrued liabilities are as follows (in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Severance costs $ 655 $ 750

5 unchanged sentences

Total current accrued liabilities $ 8,771 $ 7,256

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 — Debt

1 unchanged sentence

In August 2023, the Company entered into a 24-month revolving loan and security agreement in connection with an Asset Based Loan, which was amended in October 2023, August 2024 and April 2025 (as amended the “ABL”).

The August 2024 amendment to the ABL extended the maturity date to August 2026, increased the credit availability and lowered the interest rate spread.

The ABL provides up to $ 20.0 million of credit availability, which is limited by a borrowing base consisting of (i) 85 % of eligible accounts receivable, plus (ii) 60 % of the value of eligible inventory not to exceed 100 % of the eligible accounts receivable, plus (iii) 60 % of the value of certain real estate holdings.

As of September 30, 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.

The August 2024 amendment to the ABL extended the maturity date to August 2026, increased the credit availability and lowered the interest rate spread.The ABL provides up to $ 20.0 million of credit availability, which is limited by a borrowing base consisting of (i) 85 % of eligible accounts receivable, plus (ii) 60 % of the value of eligible inventory not to exceed 100 % of the eligible accounts receivable, plus (iii) 60 % of the value of certain real estate holdings.

As of March 31, 2026 and December 31, 2025, the Company had $ 4.7 million and $ 3.3 million, respectively, outstanding under the ABL.

As of March 31, 2026, the Company had approximately $ 5.4 million of available borrowings under the ABL.

During the three months ended March 31, 2026 and 2025, the Company incurred $ 0.2 million and $ 0.1 million, respectively, in interest and fees related to the ABL.

As of March 31, 2026 and 2025, the Company recorded $ 0.1 million and $ 0.2 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 the three and nine months ended September 30, 2025, the weighted-average interest rate was 9.46 % and 9.40 %, respectively.

For the three months ended March 31, 2026 and 2025, the weighted-average interest rate was 8.8 % and 9.5 %, 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

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).

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).

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.

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 September 30, 2025.

The ABL requires the Company to maintain a minimum Tangible Net Worth (as defined in the ABL) of not less than $ 11 million.

In addition, the ABL provides the lender a blanket security interest on all or substantially all of the Company’s assets, excluding the Acquired Assets (defined below).

The Company was in compliance with all of the applicable covenants under the ABL as of March 31, 2026.

Related Party Note Payable

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

September 30, 2025

In connection with the PWRtek Transactions (see Note 16, “Related Party Transactions”), a component of the consideration paid by the Company consisted of a secured promissory note in the initial principal amount of $ 40.0 million (the “PWRtek Note”).

The Company recorded $ 0.5 million as deferred financing costs.

On November 7, 2025, the Company entered into a series of agreements with ProFrac GDM, LLC (“ProFrac GDM”), a subsidiary of ProFrac Holding Corp.

(“ProFrac”), in connection with the assignment of the PWRtek Note by ProFrac GDM to PC Energy Credit I LLC, an affiliate of the founders and principal stockholders of ProFrac and entities owned by or affiliated with them and a related party to ProFrac (the “Note Assignment”).

To facilitate the Note Assignment, all parties involved agreed to various amendments, which among other things, removed certain restrictions and other conditions that were outlined under the original PWRtek Note.

As of March 31, 2026 and December 31, 2025, amounts outstanding under the PWRtek Note are as follows (in thousands):

March 31, 2026 December 31, 2025

PWRtek Note payable $ 40,000 $ 40,000

1 unchanged sentence

Total PWRtek Note payable $ 39,608 $ 39,584

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

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2026 , 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

Thereafter 40,000

Total payments $ 40,000

Paycheck Protection Program Loan

In April 2020, the Company received a $ 4.8 million loan (the “Flotek PPP loan”) under the Paycheck Protection Program (“PPP”), which was created through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and is administered by the U.S.

Small Business Administration (“SBA”).

On January 5, 2023, the Company received notice from the SBA that $ 4.4 million of the $ 4.8 million principal amount and accrued interest to that date of $ 0.1 million were forgiven.

The remaining principal amount of $ 0.4 million and accrued interest was fully repaid as of April 15, 2025.

Total payment $ 40,000

For the three months ended March 31, 2026, interest expense related to the PWRtek Note was $ 1.0 million.

At both March 31, 2026 and December 31, 2025, interest payable related to the PWRtek Note was $ 1.0 million and included in interest payable, related party in the condensed consolidated balance sheets.

Note 10 — Fair Value Measurements

5 unchanged sentences

• 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.

FLOTEK INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy (in thousands):

September 30, December 31,

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

Contingent earnout consideration $ — $ — $ — $ — $ — $ — $ 127 $ 127

Total $ — $ — $ — $ — $ — $ — $ 127 $ 127

Contingent Earnout Consideration Key Inputs

In connection with the acquisition of one of the Company’s wholly owned subsidiaries, JP3 Measurement, LLC, the Company entered into a stock performance earn-out provision with the sellers.

The estimated fair value of the remaining stock performance earn-out provision, with respect to this transaction, is included in accrued liabilities as of December 31, 2024.

The estimated fair value of the earn-out provision at the end of each period was valued using a Monte Carlo model analyzing 20,000 simulations performed using Geometric Brownian Motion with inputs such as risk-neutral expected growth and volatility as set forth in the table below.

The earnout provision expired on May 18, 2025 and no payment was required to be made by the Company to the sellers.

December 31, 2024

Risk-free interest rate 4.30 %

Expected volatility 65.0 %

Term until liquidation (years) 0.38

Stock price $ 9.53

Discount rate 8.00 %

Assets Measured at Fair Value on a Nonrecurring Basis

The Company’s non-financial assets, including property and equipment and operating lease ROU assets, are measured at fair value on a non-recurring basis and are subject to adjustment to their fair value in certain circumstances.

Level 3 Rollforward for Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

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

2025 2024 2025 2024

Balance - beginning of period $ — $ 30 $ 127 $ 56

Expiration of contingent earnout consideration — — ( 127 ) —

Change in fair value of contingent earnout consideration — ( 19 ) — ( 45 )

Balance - end of period $ — $ 11 $ — $ 11

FLOTEK INDUSTRIES, INC.

3 unchanged sentences

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

Three months ended September 30,

Three months ended March 31,

federal statutory tax rate $ 1,318 21.0 %

State income taxes, net of federal benefit 155 2.5 %

income taxed at different rates 34 0.4 % 144 5.8 %

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

Nine months ended September 30,

Foreign tax effects 33 0.5 %

Effect of cross-border tax laws 102 1.6 %

Nontaxable or nondeductible items

Stock-based awards ( 157 ) ( 2.5 ) %

Executive compensation limit 134 2.1 %

Other 24 0.4 %

Income tax expense and effective rate $ 1,609 25.6 %

Three months ended March 31,

federal statutory tax rate $ 1,143 21.0 %

State income taxes, net of federal benefit 64 1.2 %

income taxed at different rates ( 86 ) ( 0.6 ) % ( 10 ) ( 0.2 ) %

Increase (reduction) in tax expense related to stock-based awards ( 460 ) ( 3.1 ) % 30 0.5 %

Foreign tax effects ( 90 ) ( 1.7 ) %

Effect of cross-border tax laws 98 1.8 %

Change in valuation allowance ( 1,183 ) ( 21.7 ) %

Non-deductible expenses 327 2.2 % 141 2.3 %

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

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

Nontaxable or nondeductible items

Stock-based awards ( 2 ) ( 0.1 ) %

Executive compensation limit 4 0.1 %

Other 30 0.6 %

Income tax expense and effective rate $ 64 1.2 %

As of March 31, 2026, the Company had U.S.

net operating loss carryforwards (“NOLs”) of $ 183.5 million, including $ 37.1 million expiring in various amounts from 2029 through 2037, which can offset 100 % of taxable income, and $ 146.4 million that has an indefinite carryforward period, which can offset 80 % of taxable income per year.

6 unchanged sentences

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.

On July 4, 2025, the U.S.

1 “A bill to provide for reconciliation pursuant to Title II of H.

14”, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”).

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 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

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 12 — 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 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.

As of March 31, 2026, 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;

an unfavorable resolution of one or more of such matters could have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Other Commitments and Contingencies

9 unchanged sentences

The additional $ 4.5 million will be accounted for as an equity contribution if received.

April 2025 Warrant

A component of the consideration paid for the PWRtek Transactions (see Note 16, “Related Party Transactions”) consisted of a warrant (the “April 2025 Warrant”) to purchase 6,000,000 shares of the Company’s common stock.

The April 2025 Warrant had a seven -year term and could be exercised on a cashless basis for nominal consideration.

On March 13, 2026, ProFrac GDM exercised the April 2025 Warrant and was issued 6,000,000 shares of the Company’s common stock.

Treasury Stock

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 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.

During the three months ended March 31, 2026 and 2025, the Company withheld approximately 28 thousand shares and 3 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 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

During the three months ended March 31, 2025, approximately 3 thousand shares of forfeited stock awards were returned to treasury stock with no corresponding activity for the three months ended March 31, 2026.

Note 14 — 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 nine months ended September 30, 2025 and 2024, there were no adjustments to net income.

For the three months ended March 31, 2026 and 2025, 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.

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

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The calculation of the basic and diluted earnings per share for the three months ended March 31, 2026 and 2025 is as follows (in thousands):

Three months ended March 31,

Net income for basic and diluted earnings per share $ 4,664 $ 5,380

Basic weighted average shares outstanding 36,100 29,683

35,868 29,613 33,189 29,498

Dilutive effect of the June 2022 warrants 1,922 1,664

3 unchanged sentences

Diluted earnings per share $ 0.12 $ 0.17

(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 15— Supplemental Cash Flow Information

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

Nine months ended September 30,

Supplemental non-cash operating activities:

PWRtek Transactions (Note 3)

2024 Contract Shortfall Fee offset $ ( 17,552 ) $ —

Future Contract Shortfall Fee (accrued liabilities - related party) ( 7,248 ) —

Historic book value of inventory acquired 600 —

Supplemental non-cash investing and financing activities:

PWRtek Transactions (Note 3)

Historic book value of Acquired Assets 14,252 —

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 —

April 2025 Warrant issued ( 42,660 ) —

Three months ended March 31,

Supplemental cash flow information:

Interest paid $ 1,265 $ 169

Income taxes 124 50

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Equipment Credit (Note 16) $ 12,500 $ —

Equipment purchases from ProFrac to offset receivables (1)

(1) Includes $ 0.7 million of equipment purchases recorded against the Equipment Credit (as defined in Note 16, “Related Party Transactions”).

Note 16— Related Party Transactions

6 unchanged sentences

The Second Amendment to ProFrac Agreement amended the ProFrac Agreement to (1) provide a ramp-up period from January 1, 2023 to May 31, 2023 for ProFrac Services to increase the number of active hydraulic fracturing fleets to 30 fleets, (2) waive any Contract Shortfall Fee payment relating to any potential order shortfall prior to January 1, 2023, (3) add additional fees to certain products, and (4) provide margin increases based on margins with non-ProFrac Services customers.

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 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 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.

Total consideration paid by the Company in connection with the PWRtek Transactions was $ 107.5 million.

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.

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 September 30, 2025.

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On April 28, 2025, the Company entered into a series of transactions with ProFrac GDM and various subsidiaries of ProFrac (the “PWRtek Transactions”) pursuant to which, among other things, the Company acquired certain mobile power generation assets, certain inventory and related intellectual property (the “Acquired Assets”).

Total consideration paid by the Company in connection with the PWRtek Transactions was $ 107.5 million.

Pursuant to an Agreement for Equipment Rental, dated as of April 28, 2025 (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 (collectively, the “Leased Equipment”).

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

See Note 7, “Leases – Lease Agreement Income” for additional information on the Lease Agreement.

The PWRtek Note was a component of the compensation for the PWRtek Transactions.

On November 7, 2025, the Company entered into a series of agreements with ProFrac GDM, in connection with the Note Assignment.

See Note 9, “Debt” for additional information on the PWRtek Note and Note Assignment.

On March 12, 2026, the Company and ProFrac entered into an agreement (as amended, the “OSP Agreement”) regarding the settlement of 2025 Contract Shortfall Fees payable to the Company under the ProFrac Agreement for the measurement period of January 1, 2025 to December 31, 2025.

The OSP Agreement provides for the payment of an aggregate of $ 19.7 million of consideration (which amount represents $ 27.4 million of 2025 Contract Shortfall Fees, net of a $ 7.2 million offset against the 2025 Contract Shortfall Fee (the “OSP Offset”) due under the ProFrac Agreement and other minor adjustments) to the Company as follows:

$ 7.2 million to be paid in cash and $ 12.5 million to be satisfied through an equipment construction and rental credit (the “Equipment Credit”), which was reclassified from Accounts Receivable, related party to Equipment Credit, related party on our unaudited condensed consolidated balance sheets.

Under the OSP Agreement, the Company has committed to purchase and/or rent $ 12.5 million of equipment from ProFrac to be used for opportunities within the Data Analytics segment, with the costs of such equipment to be offset by the Equipment Credit.

Pursuant to the OSP Agreement, during the first quarter of 2026, the Company collected $ 5 million in cash and utilized $ 0.7 million of the Equipment Credit.

The Company collected the remaining $ 2.2 million in cash during April 2026 and expects to utilize the remaining Equipment Credit during 2026, however any unused amounts at the end of 2026 would be available for use in 2027 until the full credit is utilized.

The current measurement period for Contract Shortfall Fees is January 1, 2026 through December 31, 2026.

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 months ended March 31, 2026 reflect Contract Shortfall Fees of $ 2.7 million, which is presented within accounts receivable, related party on the Company’s condensed consolidated balance sheet as of March 31, 2026.

Related party revenues for the three months ended March 31, 2025 included $ 7.5 million of Contract Shortfall Fees.

During the three months ended March 31, 2026 and 2025, the Company’s related party revenues were $ 51.9 million and $ 30.9 million, respectively.

For the three months ended March 31, 2026 and 2025, these revenues were net of amortization of contract assets of $ 2.2 million and $ 1.5 million, respectively.

Cost of sales attributable to these revenues were $ 40.0 million and $ 21.3 million, respectively, for the three months ended March 31, 2026 and 2025.

As of March 31, 2026 and December 31, 2025 our accounts receivable from ProFrac was $ 61.0 million and $ 64.2 million, respectively, which is recorded in accounts receivable, related party on the condensed consolidated balance sheets.

As of March 31, 2026, our accounts payable with ProFrac was $ 0.2 million, which is recorded in accounts payable on the condensed consolidated balance sheets.

There was $ 0.3 million due to ProFrac included in accounts payable as of December 31, 2025.

ProFrac Holdings or its affiliates beneficially owned approximately 61 % of the Company’s common stock, including the effects of the June 2022 Warrants, as of March 31, 2026.

On March 13, 2026, ProFrac GDM exercised the April 2025 Warrant and was issued 6,000,000 shares of the Company’s common stock.

Note 17 — Business Segment, Geographic and Major Customer Information

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Gross profit and income (loss) from operations for each segment are used by the CODM to assess the performance of each segment in a financial period.

The CODM uses segment gross profit and income (loss) from operations as the measure to make resource (including financial or capital resources) allocation decisions for each segment.

The CODM uses segment gross profit and income

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(loss) from operations as the measure to make resource (including financial or capital resources) allocation decisions for each segment.

Accounting policies have been applied consistently by each segment for all reporting periods.

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Data Analytics.

The DA segment provides innovative analytical measurement solutions.

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.

The DA segment provides analytical measurement and digital solutions, including measure-and-control services, that deliver near real-time insights for process control across the oil and gas value chain and emerging applications in power and digital valuation.

DA solutions help customers optimize performance, improve decision-making, and reduce emissions and carbon intensity.

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 September 30,

Chemistry Technologies Data Analytics

Corporate and Other Total

Revenue from external customers

Products $ 19,083 $ 1,650 $ — $ 20,733

Services 1,138 1,070 — 2,208

Total revenue from external customers 20,221 2,720 — 22,941

Revenue from related party

Products 26,909 44 — 26,953

Services 47 23 — 70

Rental — 6,067 — 6,067

Total revenue from related parties 26,956 6,134 — 33,090

Cost of sales 35,654 2,594 — 38,248

Gross profit 11,523 6,260 — 17,783

Selling, general and administrative 2,435 1,183 3,766 7,384

Asset acquisition expenses (Note 3) — 167 — 167

Other segment items 557 542 31 1,130

Income (loss) from operations $ 8,531 $ 4,368 $ ( 3,797 ) $ 9,102

Reconciliation of profit to income before income taxes:

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

Other expense, net ( 8 ) ( 8 )

Income before income taxes $ 7,743

Revenue from external customers

Products $ 13,600 $ 1,681 $ — $ 15,281

Services 497 787 — 1,284

Total revenue from external customers 14,097 2,468 — 16,565

Revenue from related party

Products 32,962 — — 32,962

Services 15 200 — 215

Total revenue from related parties 32,977 200 — 33,177

Cost of sales 39,131 1,492 — 40,623

Gross profit 7,943 1,176 — 9,119

Selling, general and administrative 1,887 887 2,940 5,714

Other segment items 497 159 26 682

Income (loss) from operations $ 5,559 $ 130 $ ( 2,966 ) $ 2,723

Reconciliation of profit to income before income taxes:

Interest expense ( 256 ) ( 256 )

Other income, net 102 102

Income before income taxes $ 2,569

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 nine months ended September 30,

As of and for the three months ended March 31,

Chemistry Technologies Data Analytics

3 unchanged sentences

Services 899 1,309 — 2,208

Rental revenue — 316 — 316

Total revenue from external customers 14,741 3,424 — 18,165

7 unchanged sentences

Selling, general and administrative 2,231 1,058 3,636 6,925

Asset acquisition expenses (Note 3) — 4,362 — 4,362

Other segment items 449 542 36 1,027

21 unchanged sentences

Income before income taxes $ 5,444

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

Other segment items for the three months ended March 31, 2026 include depreciation of $ 0.2 million and $ 0.4 million 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.

Other segment items for the three months ended March 31, 2025 include depreciation of $ 0.2 million and $ 0.1 million in the CT and DA segments, respectively;

R&D costs of $ 0.2 million and $ 0.1 million in the CT and DA segments, respectively;

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

FLOTEK INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

September 30, 2025 December 31, 2024

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

March 31, 2026 December 31, 2025

Chemistry Technologies $ 154,095 $ 161,332

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 nine months ended September 30,

As of and for the three months ended March 31,

Chemistry Technologies Data Analytics

3 unchanged sentences

Additions to long-lived assets $ 567 $ 30 $ 1 $ 598

(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 nine months ended September 30, 2025 and 2024 no country other than the U.S.

For the three months ended March 31, 2026 and 2025, no country other than the U.S.

accounted for more than 10% of revenue.

Revenue by geographic location is as follows (in thousands):

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

2025 2024 2025 2024

Three months ended March 31,

$ 68,373 $ 51,526

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Long-lived assets held in countries other than the U.S.

are not considered material to the consolidated financial statements.

are not material to the consolidated financial statements.

Major Customers

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Revenue % of Total Revenue

Three months ended September 30, 2025

Customer A (related party)

$ 33,090 59.1 %

Three months ended September 30, 2024

Customer A (related party)

$ 33,177 66.7 %

Revenue % of Total Revenue

Nine months ended September 30, 2025

Three months ended March 31, 2026

Customer A (related party)

$ 51,886 74.1 %

Nine months ended September 30, 2024

Three months ended March 31, 2025

Customer A (related party)

$ 30,939 55.9 %

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

Customer B 5,821 10.5 %

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):

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

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

Accounts Receivable % of Total Non-Related Party Accounts Receivable

As of September 30, 2025

As of March 31, 2026

$ 8,563 39.3 %

Customer B $ 1,323 6.1 %

Customer C $ 2,241 8.2 %

As of December 31, 2025

$ 8,525 44.8 %

Customer C $ 2,264 12.7 %

Customer B $ 3,001 15.8 %

1 unchanged sentence

Major Suppliers

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

Three months ended September 30, Expenditure % of Total Expenditure

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

Three months ended March 31, Expenditure % of Total Expenditure

Supplier A $ 12,863 26.3 %

2 unchanged sentences

Supplier D 5,560 11.4 %

Supplier D $ 8,885 25 %

Supplier A 5,187 14 %

Supplier C 4,348 12 %

Supplier E $ 8,577 24.2 %

Nine months ended September 30, Expenditure % of Total Expenditure

Supplier A 6,038 17.1 %

Supplier D 14,301 14 %

Supplier A $ 16,885 18 %

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 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”).

Supplier B 4,762 13.5 %

Note 18 — Subsequent Events

The Company has evaluated the effects of events that have occurred subsequent to March 31, 2026 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 that would require disclosure in the March 31, 2026 interim financial statements.

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