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Item 1. Financial Statements

2022-10-31 compared with 2022-08-02 · 138 added, 89 removed, 509 unchanged (31% of the section changed)

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

21 unchanged sentences

Interest expense, net 3,999 4,083 10,933 12,373

Other (income) expense, net ( 1,037 ) 466 ( 3,448 ) ( 4,306 )

Other income, net ( 1,410 ) ( 10,132 ) ( 4,858 ) ( 14,438 )

Income (loss) before taxes and discontinued operations 2,115 3,082 12,329 ( 13,963 )

(Benefit) provision for income taxes ( 479 ) 1,384 721 1,552

Provision for income taxes 2,178 587 2,899 2,139

Income (loss) before discontinued operations ( 63 ) 2,495 9,430 ( 16,102 )

Discontinued operations:

(Loss) income from discontinued operations, net of taxes ( 34 ) ( 126 ) ( 49 ) 120,864

Net income (loss) 1,725 ( 6,780 ) 9,444 102,267

Income from discontinued operations, net of taxes 319 18 270 120,882

Net income 256 2,513 9,700 104,780

loss (income) attributable to noncontrolling interests (1)

22 — 43 ( 306 )

Net income (loss) attributable to TETRA stockholders $ 1,745 $ ( 6,753 ) $ 9,465 $ 101,961

Net income attributable to TETRA stockholders $ 278 $ 2,513 $ 9,743 $ 104,474

Basic net income (loss) per common share:

1 unchanged sentence

Income from discontinued operations — — — 0.96

Net income (loss) attributable to TETRA stockholders $ 0.01 $ ( 0.05 ) $ 0.07 $ 0.81

Net income attributable to TETRA stockholders $ 0.00 $ 0.02 $ 0.08 $ 0.83

Weighted average basic shares outstanding 128,407 126,733 127,890 126,489

2 unchanged sentences

Income from discontinued operations — — — 0.96

Net income (loss) attributable to TETRA stockholders $ 0.01 $ ( 0.05 ) $ 0.07 $ 0.81

Net income attributable to TETRA stockholders $ 0.00 $ 0.02 $ 0.08 $ 0.83

Weighted average diluted shares outstanding 128,407 128,694 129,704 126,489

(1) (Income) loss attributable to noncontrolling interests includes zero for the three months ended June 30, 2022 and 2021, respectively, and zero and $( 333 ) income for the six months ended June 30, 2022 and 2021, respectively, related to discontinued operations.

(1) Loss (income) attributable to noncontrolling interests includes zero for the three months ended September 30, 2022 and 2021, respectively, and zero and $ 333 income for the nine months ended September 30, 2022 and 2021, respectively, related to discontinued operations.

See Notes to Consolidated Financial Statements

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income (loss) $ 1,725 $ ( 6,780 ) $ 9,444 $ 102,267

Net income $ 256 $ 2,513 $ 9,700 $ 104,780

Foreign currency translation adjustment from continuing operations, net of taxes of $ 0 in 2022 and 2021

( 3,873 ) ( 2,150 ) ( 7,095 ) ( 2,772 )

Unrealized loss on investment in CarbonFree ( 306 ) — ( 306 ) —

Comprehensive income (loss) ( 3,923 ) 363 2,299 102,008

6 unchanged sentences

(In Thousands)

September 30,

2022 December 31,

41 unchanged sentences

(In Thousands, Except Share Amounts)

September 30,

2022 December 31,

19 unchanged sentences

200,226 202,561

Commitments and contingencies

Commitments and contingencies (Note 7)

TETRA stockholders’ equity:

Common stock, par value 0.01 per share;

250,000,000 shares authorized at June 30, 2022 and December 31, 2021;

131,394,102 shares issued at June 30, 2022 and 130,075,838 shares issued at December 31, 2021

250,000,000 shares authorized at September 30, 2022 and December 31, 2021;

131,758,500 shares issued at September 30, 2022 and 130,075,838 shares issued at December 31, 2021

Additional paid-in capital

1 unchanged sentence

Treasury stock, at cost;

3,138,675 shares held at June 30, 2022, and at December 31, 2021

3,138,675 shares held at September 30, 2022 and December 31, 2021

( 19,957 ) ( 19,957 )

18 unchanged sentences

Interest Total

Translation Unrealized Gain (Loss) on Investment

Balance at December 31, 2021 $ 1,301 $ 475,624 $ ( 19,957 ) $ ( 46,932 ) $ — $ ( 310,332 ) $ ( 1,141 ) $ 98,563

15 unchanged sentences

Balance at June 30, 2022 $ 1,314 $ 476,381 $ ( 19,957 ) $ ( 50,154 ) $ — $ ( 300,867 ) $ ( 1,181 ) $ 105,536

Net income for third quarter 2022 — — — — — 278 ( 22 ) 256

Translation adjustment,

net of taxes of $ 0

— — — ( 3,873 ) — — — ( 3,873 )

Other comprehensive income (loss) — — — — ( 306 ) — — ( 306 )

Comprehensive income ( 3,923 )

Equity compensation expense — 1,098 — — — — — 1,098

Other 4 ( 949 ) — — — — ( 10 ) ( 955 )

Balance at September 30, 2022 $ 1,318 $ 476,530 $ ( 19,957 ) $ ( 54,027 ) $ ( 306 ) $ ( 300,589 ) $ ( 1,213 ) $ 101,756

Par Value Additional Paid-In

25 unchanged sentences

Balance at June 30, 2021 $ 1,297 $ 473,872 $ ( 19,939 ) $ ( 43,368 ) $ ( 311,704 ) $ ( 1,101 ) $ 99,057

Net income for third quarter 2021 — — — — 2,513 — 2,513

Translation adjustment, net of taxes of $ 0

— — — ( 2,150 ) — — ( 2,150 )

Comprehensive income 363

Equity award activity 4 — — — — — 4

Treasury stock activity, net — — ( 6 ) — — — ( 6 )

Equity compensation expense — 1,057 — — — — 1,057

Other — ( 385 ) — — — ( 12 ) ( 397 )

Balance at September 30, 2021 $ 1,301 $ 474,544 $ ( 19,945 ) $ ( 45,518 ) $ ( 309,191 ) $ ( 1,113 ) $ 100,078

See Notes to Consolidated Financial Statements

3 unchanged sentences

(In Thousands, Unaudited)

Six Months Ended

Nine Months Ended

September 30,

Operating activities:

4 unchanged sentences

Impairment and other charges 2,262 449

Gain on investments ( 390 ) ( 5,613 )

Loss (gain) on investments 159 ( 11,803 )

Equity-based compensation expense 3,361 3,611

4 unchanged sentences

Gain on sale of assets ( 980 ) ( 479 )

Other non-cash charges ( 313 ) ( 176 )

Other non-cash credits ( 425 ) ( 359 )

Changes in operating assets and liabilities:

16 unchanged sentences

Payments on financing lease obligations ( 1,174 ) —

Repurchase of common stock — ( 461 )

Debt issuance costs and other financing activities — ( 718 )

1 unchanged sentence

Effect of exchange rate changes on cash ( 1,201 ) ( 1,635 )

Increase (decrease) in cash and cash equivalents 4,781 ( 33,515 )

Cash and cash equivalents and restricted cash at beginning of period 31,551 83,894

Decrease in cash and cash equivalents ( 6,304 ) ( 42,031 )

Cash and cash equivalents at beginning of period 31,551 83,894

Cash and cash equivalents at beginning of period

associated with discontinued operations

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents at beginning of period

associated with continuing operations

31,551 67,317

Cash and cash equivalents and restricted cash at end of period

Cash and cash equivalents at end of period

associated with continuing operations

12 unchanged sentences

The information furnished reflects all normal recurring adjustments, which are, in the opinion of management, necessary to provide a fair statement of the results for the interim periods.

Operating results for the period ended June 30, 2022 are not necessarily indicative of results that may be expected for the twelve months ended December 31, 2022.

Operating results for the period ended September 30, 2022 are not necessarily indicative of results that may be expected for the twelve months ended December 31, 2022.

We have reflected the operations of our former Compression Division and Offshore Division as discontinued operations for all periods presented.

8 unchanged sentences

Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2021 included in our 2021 Annual Report .

There have been no significant changes in our accounting policies or the application thereof during the second quarter of 2022.

There have been no significant changes in our accounting policies or the application thereof during the third quarter of 2022.

Use of Estimates

6 unchanged sentences

Foreign Currency Translation

We have designated the Euro, the British pound, the Canadian dollar, the Brazilian real, and the Mexican peso as the functional currencies for our operations in Finland and Sweden, the United Kingdom, Canada, Brazil,

and certain of our operations in Mexico, respectively.

The United States dollar is the designated functional currency for all of our other non-U.S.

The cumulative translation effects of translating the applicable accounts from the functional currencies into the United States dollar at current exchange rates are included as a separate component of equity.

Foreign currency exchange (gains) and losses are included in other (income) expense, net and totaled $( 0.8 ) million and $( 1.6 ) million during the three and six months ended June 30, 2022, respectively, and $( 0.2 ) million and $( 1.0 ) million during the three and six months ended June 30, 2021, respectively.

Foreign currency exchange (gains) and losses are included in other (income) expense, net and totaled $( 1.1 ) million and $( 2.7 ) million during the three and nine months ended September 30, 2022, respectively, and $( 0.1 ) million and $( 1.1 ) million during the three and nine months ended September 30, 2021, respectively.

Fair Value Measurements

5 unchanged sentences

Supplemental cash flow information from continuing and discontinued operations is as follows:

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

3 unchanged sentences

Income taxes paid

Decrease in accrued capital expenditures 1,712 1,434

$ 2,525 $ 1,423

Increase (decrease) in accrued capital expenditures $ ( 4,101 ) $ 463

(1) Prior-year information includes the activity for CSI Compressco for January only.

13 unchanged sentences

Entities may elect to apply the amendments for contract modifications made on or before December 31, 2022.

During 2021, our asset-based credit agreement and term credit agreement were amended to allow replacement of LIBOR with another benchmark rate, such as the secured overnight financing rate (“SOFR”) in the event that LIBOR cannot be determined or does not fairly reflect the cost to our lenders of funding our loans.

During 2021, our asset-based credit agreement and term credit agreement were

amended to allow replacement of LIBOR with another benchmark rate, such as the secured overnight financing rate (“SOFR”) in the event that LIBOR cannot be determined or does not fairly reflect the cost to our lenders of funding our loans.

If LIBOR is not available, we cannot predict what alternative index would be negotiated with our lenders.

2 unchanged sentences

On January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan Energy Partners, LP (“Spartan”) pursuant to which we sold the general partner of CSI Compressco, including the incentive distribution rights (“IDRs”) in CSI Compressco LP, (“CSI Compressco”), and approximately 23.1 % of the outstanding limited partner interests in CSI Compressco, in exchange for the combination of $ 13.9 million in cash and $ 3.1 million in contingent consideration in the form of cash and/or CSI Compressco common units if CSI Compressco achieves certain financial targets on or before December 31, 2022.

Throughout this Quarterly Report, we refer to this transaction as the “GP Sale.” Following the closing of the transaction, we retained an interest in CSI Compressco representing approximately 3.7 % of the outstanding common units as of June 30, 2022.

As a result of these transactions, we no longer consolidate CSI Compressco as of January 29, 2021.

2 unchanged sentences

We provided back-office support to CSI Compressco under a Transition Services Agreement that ended during the three-month period ended March 31, 2022.

During the three months ended June 30, 2022, we sold equipment to CSI Compressco for approximately $ 0.3 million.

During the second quarter of 2022, we sold equipment to CSI Compressco for approximately $ 0.3 million.

Our interest in CSI Compressco and the general partner represented substantially all of our Compression Division.

4 unchanged sentences

Our prior-year consolidated statement of operations, statement of comprehensive income, statement of equity and statement of cash flows include CSI Compressco activity for January 1 through January 29 in 2021.

Our consolidated statements of cash flows for the six-month period ended June 30, 2021 included $ 3.0 million, of capital expenditures related to our former Compression division.

Our consolidated statements of cash flows for the nine-month period ended September 30, 2021 included $ 3.0 million of capital expenditures related to our former Compression division.

A summary of financial information related to our discontinued operations is as follows:

2 unchanged sentences

Three Months Ended

June 30, 2022

Offshore Services Maritech Total

Major classes of line items constituting loss from discontinued operations

Cost of revenues $ 54 $ — $ 54

September 30, 2022

Offshore Services

Major classes of line items constituting income from discontinued operations

General and administrative expense $ 510

Other expense, net — ( 28 ) ( 28 )

Pretax income (loss) from discontinued operations ( 62 ) 28 ( 34 )

Loss from discontinued operations attributable to TETRA stockholders $ ( 34 )

Pretax loss from discontinued operations ( 510 )

Pretax gain on disposal of discontinued operations 829

Total pretax income from discontinued operations 319

Income from discontinued operations attributable to TETRA stockholders $ 319

Three Months Ended

June 30, 2021

September 30, 2021

Compression Offshore Services Total

Major classes of line items constituting loss from discontinued operations

Major classes of line items constituting income from discontinued operations

Cost of revenues $ — $ ( 174 ) $ ( 174 )

General and administrative expense — 6 6

Other (income) expense, net 150 — 150

Pretax loss from discontinued operations ( 121 ) ( 5 ) ( 126 )

Loss from discontinued operations attributable to TETRA stockholders $ ( 126 )

Six Months Ended

June 30, 2022

Pretax income (loss) from discontinued operations ( 150 ) 168 18

Income from discontinued operations attributable to TETRA stockholders $ 18

Nine Months Ended

September 30, 2022

Offshore Services Maritech Total

4 unchanged sentences

Pretax income (loss) from discontinued operations ( 587 ) 28 ( 559 )

Loss from discontinued operations attributable to TETRA stockholders $ ( 49 )

Six Months Ended

June 30, 2021

Pretax gain on disposal of discontinued operations 829

Total pretax income from discontinued operations 270

Income from discontinued operations attributable to TETRA stockholders $ 270

Nine Months Ended

September 30, 2021

Compression Offshore Services Total

Major classes of line items constituting loss from discontinued operations

Major classes of line items constituting income from discontinued operations

Revenue $ 18,968 $ — $ 18,968

3 unchanged sentences

Other expense, net 164 — 164

Pretax income (loss) from discontinued operations 348 ( 28 ) 320

Pretax income from discontinued operations 198 140 338

Pretax gain on disposal of discontinued operations 120,574

2 unchanged sentences

Total income from discontinued operations 120,882

Income from discontinued operations attributable to noncontrolling interest ( 333 )

Loss from discontinued operations attributable to noncontrolling interest ( 333 )

Income from discontinued operations attributable to TETRA stockholders $ 120,549

1 unchanged sentence

(in thousands)

June 30, 2022

September 30, 2022

Offshore Services Maritech Total

10 unchanged sentences

NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Our contract asset balances, primarily associated with contractual invoicing milestones and/or customer documentation requirements, were $ 32.2 million and $ 20.5 million as of June 30, 2022 and December 31, 2021, respectively.

Our contract asset balances, primarily associated with contractual invoicing milestones and/or customer documentation requirements, were $ 33.4 million and $ 20.5 million as of September 30, 2022 and December 31, 2021, respectively.

Contract assets, along with billed trade accounts receivable, are included in trade accounts receivable in our consolidated balance sheets.

4 unchanged sentences

The cash and stock component of consideration received is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term.

Unearned income balances were $ 7.9 million and $ 3.2 million as of June 30, 2022 and December 31, 2021, respectively, and vary based on the timing of invoicing and performance obligations being met and the timing of the receipt of stock and shares from Standard Lithium.

Unearned income balances were $ 4.1 million and $ 3.2 million as of September 30, 2022 and December 31, 2021, respectively, and vary based on the timing of invoicing and performance obligations being met and the timing of the receipt of stock and cash from Standard Lithium.

Unearned income is included in accrued liabilities and other in our consolidated balance sheets.

We recognized approximately $ 0.8 million and $ 0.5 million of income during the six-month periods ended June 30, 2022 and June 30, 2021, respectively, related to the Standard Lithium arrangements.

During the three-month and nine-month periods ended September 30, 2022 and September 30, 2021, contract costs were not significant.

During the three-month and nine-month periods ended September 30, 2022, we recognized approximately $ 2.6 million and $ 1.7 million of revenue, respectively, deferred in unearned income as of the beginning of the period.

These amounts are included in products sales and services revenues in our consolidated statements of operations.

Other revenue recognized during the three-month and nine-month periods ended September 30, 2021 deferred in unearned income as of the beginning of the period was not significant.

We also recognized approximately $ 2.4 million and $ 1.3 million of income during the nine-month periods ended September 30, 2022 and September 30, 2021, respectively, related to the Standard Lithium arrangements.

These amounts are included in other income, net in our consolidated statements of operations.

Other revenue recognized during the three-month and six-month periods ended June 30, 2022 and the three-month period ended June 30, 2021 deferred as of the beginning of the period was not significant.

During the six-month period ended June 30, 2021, we recognized approximately $ 1.4 million of revenue deferred as of the preceding year end.

During the three-month and six-month periods ended June 30, 2022 and June 30, 2021, contract costs were not significant.

We disaggregate revenue from contracts with customers into Product Sales and Services within each segment, as noted in our two reportable segments in Note 10 - “Industry Segments.” In addition, we disaggregate revenue from contracts with customers by geography based on the following table below.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

13 unchanged sentences

NOTE 4 – INVENTORIES

Components of inventories as of June 30, 2022 and December 31, 2021 are as follows:

June 30, 2022 December 31, 2021

Components of inventories as of September 30, 2022 and December 31, 2021 are as follows:

September 30, 2022 December 31, 2021

(in thousands)

7 unchanged sentences

NOTE 5 – INVESTMENTS

Following the closing of the GP Sale, we continue to own approximately 3.7 % of the outstanding CSI Compressco common units as of June 30, 2022.

Following the closing of the GP Sale, we continue to own approximately 3.7 % of the outstanding CSI Compressco common units as of September 30, 2022.

In addition, we are party to agreements in which Standard Lithium has the right to explore, and an option to acquire the rights to produce and extract lithium in our Arkansas leases as well as additional potential resources in the Mojave region of California.

6 unchanged sentences

Our exposure to potential losses by CarbonFree is limited to our investment in the convertible note and associated accrued interest.

Our investments as of June 30, 2022 and December 31, 2021, consist of the following:

June 30, 2022 December 31, 2021

Our investments as of September 30, 2022 and December 31, 2021 consist of the following:

September 30, 2022 December 31, 2021

(in thousands)

5 unchanged sentences

NOTE 6 – LONG-TERM DEBT AND OTHER BORROWINGS

Consolidated long-term debt as of June 30, 2022 and December 31, 2021, consists of the following:

Scheduled Maturity June 30, 2022 December 31, 2021

Consolidated long-term debt as of September 30, 2022 and December 31, 2021, consists of the following:

Scheduled Maturity September 30, 2022 December 31, 2021

(in thousands)

7 unchanged sentences

Total long-term debt $ 153,873 $ 151,936

(1) Net of unamortized deferred financing costs of zero and $1.5 million as of June 30, 2022 and December 31, 2021, respectively.

Deferred financing costs of $ 1.3 million as of June 30, 2022, were classified as other long-term assets on the accompanying consolidated balance sheet as there was no outstanding balance on our asset-based credit agreement.

(2) Net of unamortized discount of $ 4.0 million and $ 4.5 million as of June 30, 2022 and December 31, 2021, respectively, and net of unamortized deferred financing costs of $ 5.9 million and $ 6.7 million as of June 30, 2022 and December 31, 2021, respectively.

(1) Net of unamortized deferred financing costs of zero and $ 1.5 million as of September 30, 2022 and December 31, 2021, respectively.

Deferred financing costs of $ 1.2 million as of September 30, 2022, were classified as other long-term assets on the accompanying consolidated balance sheet as there was no outstanding balance on our asset-based credit agreement.

(2) Net of unamortized discount of $ 3.7 million and $ 4.5 million as of September 30, 2022 and December 31, 2021, respectively, and net of unamortized deferred financing costs of $ 5.5 million and $ 6.7 million as of September 30, 2022 and December 31, 2021, respectively.

Swedish Credit Facility

In January 2022, the Company entered into a revolving credit facility for seasonal working capital needs of subsidiaries in Sweden (“Swedish Credit Facility”).

As of June 30, 2022, we had less than US$ 0.1 million outstanding and availability of approximately US$ 4.9 million under the Swedish Credit Facility.

As of September 30, 2022, we had less than US$ 0.1 million outstanding and availability of approximately US$ 4.5 million under the Swedish Credit Facility.

During each year, all outstanding loans under the Swedish Credit Facility must be repaid for at least 30 consecutive days.

2 unchanged sentences

Finland Credit Agreement

The Company also entered into a new agreement guaranteed by certain accounts receivable and inventory in Finland (“Finland Credit Agreement”).

As of June 30, 2022, there were US$ 1.4 million of letters of credit outstanding against the Finland Credit Agreement.

In January 2022, the Company also entered into an agreement guaranteed by certain accounts receivable and inventory in Finland (“Finland Credit Agreement”).

As of September 30, 2022, there were US$ 1.4 million of letters of credit outstanding against the Finland Credit Agreement.

The Finland Credit Agreement expires on January 31, 2023 and the Company intends to renew it annually.

ABL Credit Agreement

As of June 30, 2022, our asset-based credit agreement (“ABL Credit Agreement’) provides for a senior secured revolving credit facility of up to $ 80.0 million, with a $ 20.0 million accordion.

As of September 30, 2022, our asset-based credit agreement (“ABL Credit Agreement”) provides for a senior secured revolving credit facility of up to $ 80.0 million, with a $ 20.0 million accordion.

The credit facility is subject to a borrowing base determined monthly by reference to the value of inventory and accounts receivable, and includes a sublimit of $ 20.0 million for letters of credit, a swingline loan sublimit of $ 11.5 million, and a $ 15.0 million sub-facility subject to a borrowing base consisting of certain trade receivables and inventory in the United Kingdom.

As of June 30, 2022, we had zero outstanding and $ 6.0 million in letters of credit and guarantees under our ABL Credit Agreement, respectively.

As of September 30, 2022, we had zero outstanding and $ 4.7 million in letters of credit and guarantees under our ABL Credit Agreement, respectively.

Subject to compliance with the covenants, borrowing base, and other provisions of the ABL Credit Agreement that may limit borrowings, we had availability of $ 62.6 million under this agreement.

Term Credit Agreement

As of June 30, 2022 we had $ 153.2 million outstanding, net of unamortized discounts and unamortized deferred financing costs under our term credit agreement (“Term Credit Agreement”).

As of September 30, 2022, we had $ 153.9 million outstanding, net of unamortized discounts and unamortized deferred financing costs under our term credit agreement (“Term Credit Agreement”).

The Term Credit Agreement requires us to offer to prepay a percentage of Excess Cash Flow (as defined in the Term Credit Agreement) within five business days of filing our Annual Report.

As of June 30, 2022, the interest rate per annum on borrowings under the Term Credit Agreement is 7.92 %.

As of September 30, 2022, the interest rate per annum on borrowings under the Term Credit Agreement is 8.77 %.

For additional information on our Term Credit agreement, see our 2021 Annual Report .

Our credit agreements contain certain affirmative and negative covenants, including covenants that restrict the ability to pay dividends or other restricted payments.

As of June 30, 2022, we are in compliance with all covenants under the credit agreements.

As of September 30, 2022, we are in compliance with all covenants under the credit agreements.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

While the outcome of lawsuits or other proceedings against us cannot be predicted with certainty, management does not consider it reasonably possible that a loss resulting from such lawsuits or other proceedings in excess of any amounts accrued has been incurred that is expected to have a material adverse impact on our financial condition, results of operations, or liquidity.

There have been no material developments in our legal proceedings during the quarter ended June 30, 2022.

We have a Bromine Requirements Sales Agreement (“Sales Agreement”) to purchase a certain volume of elemental bromine from LANXESS Corporation (formerly Chemtura Corporation, “LANXESS”), included in Product Purchase Obligations below.

LANXESS notified us of a proposed non-ordinary course increase to the price of bromine, which we believe is not justified nor appropriate under the Sales Agreement.

After lengthy discussions, we and LANXESS were unable to reach an agreement regarding the validity of the proposed price increase;

therefore, we filed for arbitration in May 2022 seeking declaratory relief, among other relief, declaring that the proposed price increase is invalid.

In September 2022, LANXESS filed a counterclaim with the American Arbitration Association seeking declaratory relief, among other relief, declaring that the proposed price increase was valid and seeking damages in the amount of the price increase from July 1, 2022 forward.

In October 2022, we filed a reply to LANXESS’ counterclaim disputing the counterclaim and amending our original demand.

The arbitration is currently pending, and no final hearing date has been set.

We are unable to predict the duration, scope or impact of this proceeding on our consolidated financial statements.

There have been no other material developments in our legal proceedings during the quarter ended September 30, 2022.

For a discussion of our legal proceedings, please see our 2021 Annual Report .

5 unchanged sentences

We recognize a liability for the purchase of such products at the time we receive them.

As of June 30, 2022, the aggregate amount of the fixed and determinable portion of the purchase obligation pursuant to our Completion Fluids & Products Division’s supply agreements was approximately $ 104.6 million, including $ 3.0 million for the remainder of 2022, an average of $ 15.7 million per year from 2023 to 2026 and $ 40.2 million thereafter, extending through 2029.

As of September 30, 2022, the aggregate amount of the fixed and determinable portion of the purchase obligation pursuant to our Completion Fluids & Products Division’s supply agreements was approximately $ 120.2 million, including $ 1.0 million for the remainder of 2022, an average of $ 17.9 million per year from 2023 to 2026 and $ 47.5 million thereafter, extending through 2029.

NOTE 8 – FAIR VALUE MEASUREMENTS

1 unchanged sentence

We retained an interest in CSI Compressco (NASDAQ:

CCLP) representing approximately 3.7 % of CSI Compressco’s outstanding common units as of June 30, 2022.

CCLP) representing approximately 3.7 % of CSI Compressco’s outstanding common units as of September 30, 2022.

In December 2021, we invested in a $ 5.0 million convertible note issued by CarbonFree.

1 unchanged sentence

The valuation is impacted by key assumptions, including the assumed probability and timing of potential debt or equity offerings.

The convertible note includes an option to convert the note into equity interests issued by CarbonFree.

The change in the fair value of the embedded option is included in other (income) expense, net in our consolidated statements of operations.

The change in the fair value of the convertible note, excluding the embedded option, is included in other comprehensive income in our consolidated statements of comprehensive income.

We are party to agreements in which Standard Lithium has the right to explore, produce and extract lithium in our Arkansas leases as well as additional potential resources in the Mojave region of California.

The Company receives cash and stock of Standard Lithium (NYSE:SLI) under the terms of the arrangements.

The Company receives cash and stock of Standard Lithium (NYSE:

SLI) under the terms of the arrangements.

1 unchanged sentence

Changes in the value of stock are recorded in other income (expense) in our consolidated statements of operations.

Recurring and nonrecurring fair value measurements by valuation hierarchy as of June 30, 2022 and December 31, 2021, are as follows:

Recurring and nonrecurring fair value measurements by valuation hierarchy as of September 30, 2022 and December 31, 2021, are as follows:

Fair Value Measurements Using

Total as of Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs

Description June 30, 2022 (Level 1) (Level 2) (Level 3)

Description September 30, 2022 (Level 1) (Level 2) (Level 3)

(in thousands)

22 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

128,407 128,694 129,704 126,489

The average diluted shares outstanding excludes the impact of certain outstanding equity awards and warrants of 2,013,000 and 1,740,000 shares for the three and six-month periods ended June 30, 2021, respectively, as the inclusion of these shares would have been anti-dilutive due to the net loss from continuing operations recorded during these periods.

The average diluted shares outstanding excludes the impact of certain outstanding equity awards and warrants of 1.5 million shares for the three-month period ended September 30, 2022 and 1.8 million shares for the nine-month period ended September 30, 2021 as the inclusion of these shares would have been anti-dilutive due to the net loss from continuing operations recorded during these periods.

NOTE 10 – INDUSTRY SEGMENTS

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

21 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

Warrants fair value adjustment (income) expense — ( 3,164 ) — ( 143 )

Other general corporate income, net 20 189 ( 1,121 ) ( 3,079 )

Other general corporate (income) expense, net 157 69 ( 964 ) ( 3,010 )

Total $ 16,727 $ 9,789 $ 45,398 $ 41,820

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