What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-10-30 compared with 2023-07-31 · 120 added, 90 removed, 520 unchanged (29% of the section changed)

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

24 unchanged sentences

Provision for income taxes 1,248 2,178 5,612 2,899

Income before discontinued operations 18,205 1,759 24,250 9,493

Loss from discontinued operations, net of taxes ( 8 ) ( 34 ) ( 20 ) ( 49 )

Income (loss) before discontinued operations

5,468 ( 63 ) 29,718 9,430

Income (loss) from discontinued operations, net of taxes

( 48 ) 319 ( 68 ) 270

Net income 5,420 256 29,650 9,700

3 unchanged sentences

Income from continuing operations $ 0.04 $ 0.00 $ 0.23 $ 0.08

Income from discontinued operations — — — —

Net income attributable to TETRA stockholders $ 0.04 $ 0.00 $ 0.23 $ 0.08

2 unchanged sentences

Income from continuing operations $ 0.04 $ 0.00 $ 0.23 $ 0.08

Income from discontinued operations — — — —

Net income attributable to TETRA stockholders $ 0.04 $ 0.00 $ 0.23 $ 0.08

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

2 unchanged sentences

( 2,750 ) ( 3,873 ) ( 284 ) ( 7,095 )

Unrealized gain on investment in CarbonFree 207 — 328 —

Unrealized gain (loss) on investment in CarbonFree

146 ( 306 ) 474 ( 306 )

Comprehensive income (loss) 2,816 ( 3,923 ) 29,840 2,299

6 unchanged sentences

(In Thousands)

September 30,

2023 December 31,

41 unchanged sentences

(In Thousands, Except Share Amounts)

September 30,

2023 December 31,

22 unchanged sentences

Common stock, par value 0.01 per share;

250,000,000 shares authorized at June 30, 2023 and December 31, 2022;

132,695,294 shares issued at June 30, 2023 and 131,800,975 shares issued at December 31, 2022

250,000,000 shares authorized at September 30, 2023 and December 31, 2022;

133,217,848 shares issued at September 30, 2023 and 131,800,975 shares issued at December 31, 2022

Additional paid-in capital

1 unchanged sentence

Treasury stock, at cost;

3,138,675 shares held at June 30, 2023 and December 31, 2022

3,138,675 shares held at September 30, 2023 and December 31, 2022

( 19,957 ) ( 19,957 )

38 unchanged sentences

Balance at June 30, 2023 $ 1,327 $ 481,448 $ ( 19,957 ) $ ( 46,525 ) $ 256 $ ( 278,238 ) $ ( 1,254 ) $ 137,057

Net income for third quarter 2023 — — — — — 5,420 — 5,420

Translation adjustment,

net of taxes of $ 0

— — — ( 2,750 ) — — — ( 2,750 )

Other comprehensive income — — — — 146 — — 146

Comprehensive income 2,816

Equity-based compensation — 1,396 — — — — — 1,396

Other 5 ( 135 ) — — — — ( 2 ) ( 132 )

Balance at September 30, 2023 $ 1,332 $ 482,709 $ ( 19,957 ) $ ( 49,275 ) $ 402 $ ( 272,818 ) $ ( 1,256 ) $ 141,137

(1) Equity-based compensation for the three months ended March 31, 2023 includes $ 2.3 million for a portion of short-term incentive compensation that was settled through grants of restricted stock units rather than cash.

5 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

9 unchanged sentences

— — — ( 3,414 ) — — — ( 3,414 )

Comprehensive income (loss) ( 1,689 )

Comprehensive loss ( 1,689 )

Equity compensation expense — 1,159 — — — — — 1,159

1 unchanged sentence

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

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

Translation adjustment, net of taxes of $ 0

— — — ( 3,873 ) — — — ( 3,873 )

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

Comprehensive loss ( 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

See Notes to Consolidated Financial Statements

3 unchanged sentences

(In Thousands, Unaudited)

Six Months Ended

Nine Months Ended

September 30,

Operating activities:

3 unchanged sentences

Impairment and other charges 777 2,262

Gain on investments ( 403 ) ( 390 )

Loss on investments

Equity-based compensation expense 4,199 3,361

3 unchanged sentences

Gain on sale of assets ( 432 ) ( 980 )

Provision (benefit) for deferred taxes

( 805 ) ( 66 )

Other non-cash credits ( 916 ) ( 359 )

10 unchanged sentences

Proceeds from insurance recoveries associated with damaged equipment 2,850 3,750

Purchase of investment ( 250 ) —

Purchase of investments

Other investing activities ( 1,836 ) ( 841 )

6 unchanged sentences

Effect of exchange rate changes on cash ( 285 ) ( 1,201 )

Increase in cash and cash equivalents 14,083 4,781

Increase (decrease) in cash and cash equivalents

20,234 ( 6,304 )

Cash and cash equivalents at beginning of period 13,592 31,551

5 unchanged sentences

NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES

We are an energy services and solutions company operating on six continents, focused on calcium chloride, completion fluids and associated products and services, comprehensive water management solutions, frac flowback, production well testing and offshore rig cooling.

We were incorporated in Delaware in 1981 and are composed of two segments – Completion Fluids & Products Division and Water & Flowback Services Division.

4 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, 2023 are not necessarily indicative of results that may be expected for the twelve months ended December 31, 2023.

Operating results for the period ended September 30, 2023 are not necessarily indicative of results that may be expected for the twelve months ended December 31, 2023.

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

29 unchanged sentences

We have rights to the brine underlying our approximately 40,000 gross acres of brine leases in the Smackover Formation in Southwest Arkansas, including rights to the bromine and lithium contained in the brine.

We recognized approximately $ 2.3 million and $ 3.1 million of expense during the three-month and six-month periods ended June 30, 2023, respectively, and $ 0.6 million and $ 2.6 million of expense during the three-month and six-month periods ended June 30, 2022, respectively, for exploration and pre-development costs representing expenditures incurred to evaluate potential future development of our lithium and bromine properties in Arkansas.

We recognized approximately $ 3.8 million and $ 6.8 million of expense during the three-month and nine-month periods ended September 30, 2023, respectively, and $ 0.9 million and $ 3.5 million of expense during the three-month and nine-month periods ended September 30, 2022, respectively, for exploration and pre-development costs representing expenditures incurred to evaluate potential future development of our lithium and bromine properties in Arkansas.

We are also party to agreements whereby Standard Lithium Ltd.

SLI) (“Standard Lithium”) has the right to explore for, and an option to acquire the rights to produce and extract, lithium in our Arkansas leases and other potential resources in the Mojave region of California.

Standard Lithium delivered a notice to exercise this option to acquire those lithium rights in our Arkansas leases on October 6, 2023.

In June 2023, we entered into a memorandum of understanding (“MOU”) with Saltwerx LLC (“Saltwerx”), an indirect wholly owned subsidiary of a Fortune 500 company, relating to a newly-proposed brine unit in the Smackover Formation in Southwest Arkansas and potential bromine and lithium production from brine produced from the unit.

The binding provisions of the MOU provide, among other things, that (i) we will file an amended brine unit application (“the Application”) covering approximately 6,138 acres, which expands the size of the unit area and also combines brine acreage that was previously leased by each of TETRA and Saltwerx (“the Brine Unit”), with the Arkansas Oil & Gas Commission (“AOGC”) and (ii) Saltwerx will provide a letter to us in support of the Application.

The MOU also contains provisions effective after, and contingent on, the approval of the Brine Unit by the AOGC, including provisions relating to:

(i) initial brine ownership percentages within the Brine Unit, including the bromine and lithium contained in the brine, (ii) the transfer of certain leased acres outside the proposed Brine Unit from the Company to Saltwerx, (iii) Saltwerx reimbursing the Company for certain expenses incurred by the Company to date regarding the development of leased acreage to be included in the Brine Unit, and (iv) an allocation of certain future costs for the drilling of a brine production test well and other development operations, including FEED studies for bromine and lithium production facilities.

We recognized approximately $ 4.7 million of income during the three-month and six-month periods ended June 30, 2023 for income from collaborative arrangement representing the portion of exploration and pre-development costs that are reimbursable by Saltwerx and is included in other income, net in our consolidated statements of operations.

We filed an amended brine unit application (“the Application”) covering approximately 6,138 acres, which expands the size of the unit area and also combines brine acreage that was previously leased by each of TETRA and Saltwerx (“the Brine Unit”), with the Arkansas Oil & Gas Commission (“AOGC”).

On September 26, 2023, the AOGC held a public hearing and unanimously approved our application to establish the Brine Unit.

On October 17, 2023, the AOGC issued formal orders establishing the Brine Unit and integrating all unleased parties within the Brine Unit, subject to a 60-day statutory election period for each unleased party, to elect whether or not to participate and share in costs of development of the Brine Unit.

If no such election is made within the election period, such unleased parties will be deemed integrated within the Brine Unit as described in the formal orders.

The MOU includes provisions relating to:

(i) initial brine ownership percentages within the Brine Unit, including the bromine and lithium contained in the brine, (ii) the transfer of certain leased acres outside the proposed Brine Unit from the Company to Saltwerx after the expiration of the 60-day election period, (iii) Saltwerx reimbursing the Company for certain expenses incurred by the Company to date regarding the development of leased acreage to be included in the Brine Unit, and (iv) an allocation of certain future costs for the drilling of a brine production test well and other development operations, including front-end engineering and design studies for bromine and lithium production facilities.

Significant Accounting Policies

Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2022 included in our 2022 Annual Report .

There have been no significant changes in our accounting policies or the application thereof during the second quarter of 2023.

There have been no significant changes in our accounting policies or the application thereof during the third quarter of 2023.

Use of Estimates

9 unchanged sentences

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 are included in other (income) expense, net and totaled losses of $ 67,000 and $ 0.2 million during the three and six months ended June 30, 2023, respectively, and gains of $ 0.8 million and $ 1.6 million during the three and six months ended June 30, 2022, respectively.

Foreign currency exchange (gains) losses are included in other (income) expense, net and totaled less than $ 0.1 million and $ 0.3 million during the three and nine months ended September 30, 2023, respectively, and $( 1.1 ) million and $( 2.7 ) million during the three and nine months ended September 30, 2022, respectively.

Fair Value Measurements

5 unchanged sentences

Supplemental cash flow information is as follows:

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

1 unchanged sentence

Income taxes paid $ 3,918 $ 2,525

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(in thousands)

20 unchanged sentences

Our consolidated statements of comprehensive income, statements of equity and statements of cash flows combine continuing and discontinued operations.

Our loss from discontinued operations for the three and six months ended June 30, 2023 consist of general and administrative expense associated with ongoing litigation for our former Offshore Division.

Our loss from discontinued operations for the three and nine months ended September 30, 2023 consists primarily of general and administrative expense associated with our former Offshore Division.

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

2 unchanged sentences

Three Months Ended

June 30, 2022

Offshore Services Maritech Total

September 30, 2022

Offshore Services

Major classes of line items constituting income from discontinued operations

Cost of revenues $ 54 $ — $ 54

General and administrative expense $ 510

Other income, net — ( 28 ) ( 28 )

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

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

Six Months Ended

June 30, 2022

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

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 )

Pretax gain on disposal of discontinued operations 829

Total pretax income from discontinued operations 270

Income from discontinued operations attributable to TETRA stockholders $ 270

Reconciliation of Major Classes of Assets and Liabilities of the Discontinued Operations to Amounts Presented Separately in the Statement of Financial Position

(in thousands)

June 30, 2023

September 30, 2023

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 $ 36.7 million and $ 33.1 million as of June 30, 2023 and December 31, 2022, respectively.

Our contract asset balances, primarily associated with contractual invoicing milestones and/or customer documentation requirements, were $ 30.7 million and $ 33.1 million as of September 30, 2023 and December 31, 2022, respectively.

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

Unearned income includes amounts in which the Company was contractually allowed to invoice prior to satisfying the associated performance obligations.

We are also party to agreements whereby Standard Lithium Ltd.

SLI) (“Standard Lithium”) has the right to explore for, and an option to acquire the rights to produce and extract lithium in our Arkansas leases and other potential resources in the Mojave region of California.

We are also party to agreements whereby Standard Lithium has the right to explore for, and an option to acquire the rights to produce and extract, lithium in our Arkansas leases and other potential resources in the Mojave region of California.

The Company receives cash and stock of Standard Lithium under the terms of the arrangements.

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 $ 5.1 million and $ 3.7 million as of June 30, 2023 and December 31, 2022, respectively, and vary based on the timing of (i) invoicing, (ii) performance obligations being met and (iii) the receipt of stock and cash from Standard Lithium.

Unearned income balances were $ 4.0 million and $ 3.7 million as of September 30, 2023 and December 31, 2022, respectively, and vary based on the timing of (i) invoicing, (ii) performance obligations being met and (iii) the receipt of stock and cash from Standard Lithium.

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

During the six-month periods ended June 30, 2023 and June 30, 2022, contract costs were not significant.

We recognized approximately $ 1.4 million and $ 0.9 million of revenue during the three-month and six-month periods ended June 30, 2023, respectively, and $ 0.2 million and $ 0.5 million of revenue during the three-month and six-month periods ended June 30, 2022, respectively, deferred in unearned income as of the beginning of the period.

We also recognized approximately $ 0.8 million and $ 1.4 million of income during the three-month and six-month periods ended June 30, 2023, respectively, and $ 0.9 million and $ 1.5 million of income during the three-month and six-month periods ended June 30, 2022, respectively, related to the Standard Lithium arrangements deferred in unearned income as of the beginning of the period and included in other income, net in our consolidated statements of operations.

During the three-month and nine-month periods ended September 30, 2023 and September 30, 2022, contract costs were not significant.

We recognized approximately $ 1.2 million and $ 1.6 million of revenue during the three-month and nine-month periods ended September 30, 2023, respectively, and $ 2.6 million and $ 1.7 million of revenue during the three-month and nine-month periods ended September 30, 2022, respectively, deferred in unearned income as of the beginning of the period.

We also recognized approximately $ 0.7 million and $ 2.4 million of income during the three-month and nine-month periods ended September 30, 2023, respectively, and $ 0.9 million and $ 2.4 million of income during the three-month and nine-month periods ended September 30, 2022, respectively, related to the Standard Lithium arrangements deferred in unearned income as of the beginning of the period and included in other income, net in our consolidated statements of operations.

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,

2023 2022 2023 2022

13 unchanged sentences

NOTE 4 – INVENTORIES

Components of inventories as of June 30, 2023 and December 31, 2022 are as follows:

June 30, 2023 December 31, 2022

Components of inventories as of September 30, 2023 and December 31, 2022 are as follows:

September 30, 2023 December 31, 2022

(in thousands)

7 unchanged sentences

NOTE 5 – INVESTMENTS

Our investments as of June 30, 2023 and December 31, 2022 consist of the following:

June 30, 2023 December 31, 2022

Our investments as of September 30, 2023 and December 31, 2022 consist of the following:

September 30, 2023 December 31, 2022

(in thousands)

3 unchanged sentences

Investment in Standard Lithium 2,264 1,180

Other investment 250 —

Other investments

Total Investments $ 16,405 $ 14,286

Following the January 2021 sale of the general partner of CSI Compressco LP (“CSI Compressco”), we continue to own approximately 3.7 % of the outstanding CSI Compressco common units (NASDAQ:

CCLP) as of June 30, 2023.

CCLP) as of September 30, 2023.

We have an intellectual property joint development agreement in place with CarbonFree to evaluate potential new technologies.

1 unchanged sentence

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

Our exposure to potential losses by CarbonFree are limited to our investments and capitalized and accrued interest associated with the CarbonFree convertible note.

Our exposure to potential losses by CarbonFree is limited to our investments and capitalized and accrued interest associated with the CarbonFree convertible note.

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

3 unchanged sentences

NOTE 6 – LONG-TERM DEBT AND OTHER BORROWINGS

Consolidated long-term debt as of June 30, 2023 and December 31, 2022 consists of the following:

Scheduled Maturity June 30, 2023 December 31, 2022

Consolidated long-term debt as of September 30, 2023 and December 31, 2022 consists of the following:

Scheduled Maturity September 30, 2023 December 31, 2022

(in thousands)

8 unchanged sentences

Total long-term debt $ 156,748 $ 156,455

(1) Net of unamortized discount of $ 2.8 million and $ 3.4 million as of June 30, 2023 and December 31, 2022, respectively, and net of unamortized deferred financing costs of $ 4.2 million and $ 5.1 million as of June 30, 2023 and December 31, 2022, respectively.

(1) Net of unamortized discount of $ 2.5 million and $ 3.4 million as of September 30, 2023 and December 31, 2022, respectively, and net of unamortized deferred financing costs of $ 3.8 million and $ 5.1 million as of September 30, 2023 and December 31, 2022, respectively.

(2) Net of unamortized deferred financing costs of $ 1.1 million as of December 31, 2022.

Deferred financing costs of $ 0.9 million as of June 30, 2023, 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.

Deferred financing costs of $ 0.7 million as of September 30, 2023 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.

Term Credit Agreement

As of June 30, 2023, we had $ 156.0 million outstanding, net of unamortized discounts and unamortized deferred financing costs under our term credit agreement (“Term Credit Agreement”).

As of September 30, 2023, we had $ 156.7 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 up to 50 % of Excess Cash Flow (as defined in the Term Credit Agreement) from the most recent full fiscal year within five business days of filing our Annual Report.

If our Leverage Ratio (as defined in

the Term Credit Agreement) at year-end is less than 2.00 to 1.00, the prepayment requirement is decreased to 25 %.

If our Leverage Ratio (as

defined in the Term Credit Agreement) at year-end is less than 2.00 to 1.00, the prepayment requirement is decreased to 25 %.

If our Leverage Ratio at year-end is less than 1.50 to 1.00, then no prepayment is required.

1 unchanged sentence

Borrowings under the Term Credit Agreement bear interest at a rate per annum equal to, at the option of TETRA, either (i) SOFR (subject to a 1% floor) plus a margin of 6.25 % per annum or (ii) a base rate plus a margin of 5.25 % per annum.

As of June 30, 2023, the interest rate per annum on borrowings under the Term Credit Agreement is 11.40 %.

As of September 30, 2023, the interest rate per annum on borrowings under the Term Credit Agreement is 11.68 %.

In addition to paying interest on the outstanding principal under the Term Credit Agreement, TETRA is required to pay a commitment fee in respect of the unutilized commitments at the rate of 1.0 % per annum, paid quarterly in arrears based on utilization of the commitments under the Term Credit Agreement.

1 unchanged sentence

ABL Credit Agreement

As of June 30, 2023, 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, 2023, 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, 2023, we had no balance outstanding and $ 11.5 million in letters of credit and guarantees under our ABL Credit Agreement.

As of September 30, 2023, we had no balance outstanding and $ 11.5 million in letters of credit and guarantees under our ABL Credit Agreement.

Subject to compliance with the covenants, borrowing base, and other provisions of the ABL Credit Agreement that may limit borrowings, we had availability of $ 68.5 million under this agreement.

8 unchanged sentences

In January 2023, the Company entered into a revolving credit facility for certain working capital and capital expenditure needs for its subsidiary in Argentina (“Argentina Credit Facility”).

As of June 30, 2023, we had $ 1.9 million outstanding and availability of $ 0.1 million under the Argentina Credit Agreement.

As of September 30, 2023, we had $ 1.9 million outstanding and availability of $ 0.1 million under the Argentina Credit Agreement.

Borrowings bear interest at a rate of 2.50 % per annum.

The Argentina Credit Facility expires on October 19, 2023 and is backed by a letter of credit under our ABL Credit Agreement.

The Argentina Credit Facility was backed by a letter of credit under our ABL Credit Agreement, and expired and was repaid in October 2023.

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, 2023, we had no balance outstanding and availability of approximately $ 4.6 million under the Swedish Credit Facility.

As of September 30, 2023, we had a nominal amount outstanding and availability of approximately $ 4.6 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.

3 unchanged sentences

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

As of June 30, 2023, there were $ 1.5 million of letters of credit outstanding against the Finland Credit Agreement.

As of September 30, 2023, there were $ 1.4 million of letters of credit outstanding against the Finland Credit Agreement.

The Finland Credit Agreement expires on January 31, 2024 and the Company intends to renew it annually.

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, 2023, we are in compliance with all covenants under the credit agreements.

As of September 30, 2023, 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.

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.

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.

On May 25, 2023, TETRA entered into the Third Amendment to Bromine Requirements Sales Agreement (the “Amendment”) with LANXESS.

The Amendment has an effective date of April 1, 2023 and was entered into in connection with the entry into a settlement agreement in the Company’s arbitration with LANXESS.

The Amendment provides for, among other things, revised volume requirements and related terms.

On June 14, 2023, in light of the settlement agreement, and in response to the parties’ stipulated motion to dismiss, the arbitration panel issued an Order of Dismissal, which dismissed all claims in the arbitration with prejudice.

There have been no other material developments in our legal proceedings during the quarter ended June 30, 2023.

For additional discussion of our legal proceedings, please see our 2022 Annual Report .

There have been no other material developments in our legal proceedings during the quarter ended September 30, 2023.

For additional discussion of our legal proceedings, please see our 2022 Annual Report and Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

Product Purchase Obligations

4 unchanged sentences

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

As of June 30, 2023, 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 $ 63.6 million, including $ 5.2 million for the remainder of 2023, $ 21.4 million in 2024, $ 19.3 million in 2025, $ 13.0 million in 2026, and $ 4.7 million in 2027 .

As of September 30, 2023, 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 $ 74.9 million, including $ 4.0 million for the remainder of 2023, $ 24.0 million in 2024, $ 21.9 million in 2025, $ 15.6 million in 2026, $ 7.1 million in 2027, and $ 2.3 million thereafter, extending through 2028 .

NOTE 8 – FAIR VALUE MEASUREMENTS

Financial Instruments

We retained an interest in CSI Compressco representing approximately 3.7 % of CSI Compressco’s outstanding common units as of June 30, 2023.

We retained an interest in CSI Compressco representing approximately 3.7 % of CSI Compressco’s outstanding common units as of September 30, 2023.

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

8 unchanged sentences

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

The change in our investment in CarbonFree for the six-month period ended June 30, 2023 is as follows:

Six Months Ended June 30, 2023

The change in our investment in CarbonFree for the nine-month period ended September 30, 2023 is as follows:

Nine Months Ended September 30, 2023

(in thousands)

3 unchanged sentences

Balance at end of period $ 6,563

Recurring fair value measurements by valuation hierarchy as of June 30, 2023 and December 31, 2022 are as follows:

Recurring fair value measurements by valuation hierarchy as of September 30, 2023 and December 31, 2022 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, 2023 (Level 1) (Level 2) (Level 3)

Description September 30, 2023 (Level 1) (Level 2) (Level 3)

(in thousands)

3 unchanged sentences

Investment in Standard Lithium 2,264 2,264 — —

Other investment 250 — — 250

Investments $ 16,718

Other investments

Total investments

Fair Value Measurements Using

14 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

132,089 128,407 130,835 129,704

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

NOTE 10 – INDUSTRY SEGMENTS

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

12 unchanged sentences

Consolidated $ 151,464 $ 135,012 $ 473,136 $ 405,765

Income (loss) before taxes

Income (loss) before taxes and discontinued operations

Completion Fluids & Products Division $ 16,932 $ 12,357 $ 67,330 $ 46,910

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

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