What changed in this filing

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Item 9A. Controls and Procedures

2024-02-27 compared with 2023-02-27 · 289 added, 225 removed, 1168 unchanged (31% of the section changed)

34 unchanged sentences

Financial Statements of the Company

Reports of Independent Registered Public Accounting Firm s (PCAOB ID Numbers Grant Thornton LLP:

Reports of Independent Registered Public Accounting Firm (PCAOB ID Number Grant Thornton LLP:

Consolidated Balance Sheets at December 31, 2023 and 2022

12 unchanged sentences

Purchase and Sale Agreement dated as of January 29, 2021 between Spartan Energy Holdco, LLC, TETRA Technologies, Inc., and, solely for the limited purposes set forth therein, Spartan Energy Partners LP (incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed on January 29, 2021 (SEC File No.

3.1 Restated Certificate of Incorporation of TETRA Technologies, Inc.

(incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed on December 22, 2016 (SEC File No.

333-215283)).

3.2 Amended and Restated Bylaws of TETRA Technologies, Inc.

(incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 filed on May 4, 2006 (SEC File No.

333-133790)).

3.3 Certificate of Amendment of Restated Certificate of Incorporation of TETRA Technologies, Inc.

(incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report filed on August 9, 2017 (SEC File No.

3.1 Amended and Restated Certificate of Incorporation of TETRA Technologies, Inc.

(incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed May 25, 2023 (SEC File No.

3.2 Second Amended and Restated Bylaws of TETRA Technologies, Inc.

(incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed May 25, 2023 (SEC File No.

4.1 Form of Senior Indenture (including form of senior debt security) (incorporated by reference to Exhibit 4.11 to the Company's Registration Statement on Form S-3 filed on May 5, 2022 (SEC File No.

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4.8 Amendment to Credit Agreement dated as of July 30, 2021, by and among the Company, Wilmington Trust, National Association, as administrative agent, and each of the lenders party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on August 2, 2021 (SEC File No.

Credit Agreement dated as of January 12, 2024 among TETRA Technologies, Inc., Silver Point Finance, LLC, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on January 18, 2024 (SEC File No.

Fifth Amendment to Credit agreement dated as of January 12, 2024 by and among TETRA Technologies, Inc., TETRA Technologies U.K.

Limited, the other loan parties thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on January 18, 2024 (SEC File No.

Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 .

4 unchanged sentences

TETRA Technologies, Inc.

Non-Employee Director Deferred Compensation Plan effective on December 13, 2023.

TETRA Technologies, Inc.

401(k) Retirement Plan, as amended and restated (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed on February 22, 2008 (SEC File No.

50 unchanged sentences

Brightman (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report filed on August 7, 2020 (SEC File No.

10.24*** Transition Agreement dated July 27, 2020 between TETRA Technologies, Inc.

(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report filed on November 3, 2020 (SEC File No.

10.25*** TETRA Technologies, Inc.

1 unchanged sentence

Form of TETRA Technologies, Inc.

2018 Equity Incentive Plan Restricted Stock Award Agreement (incorporated by reference to Exhibit 4.6 to the Company’s registration statement on Form S-8 filed on May 4, 2018 (SEC File No.

10.27*** Form of TETRA Technologies, Inc.

2018 Equity Incentive Plan Incentive Stock Option Award Agreement (incorporated by reference to Exhibit 4.7 to the Company’s registration statement on Form S-8 filed on May 4, 2018 (SEC File No.

10 unchanged sentences

Form of TETRA Technologies, Inc.

First Amended and Restated 2018 Equity Incentive Plan Restricted Stock Unit Award for Outside Directors (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8 filed with the SEC on May 26, 2021 (SEC File No.

333-256494)).

10.33*** Form of TETRA Technologies, Inc.

First Amended and Restated 2018 Equity Incentive Plan Cash Award Agreement (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 filed with the SEC on May 26, 2021 (SEC File No.

333-256494)).

10.34*** Cooperation Agreement, dated March 24, 2021, by and among TETRA Technologies, Inc., Bradley L.

Radoff and the Radoff Family Foundation (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 26, 2021 (SEC File No.

TETRA Technologies, Inc.

Second Amended and Restated 2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on May 25, 202 3 (SEC File No.

Form of TETRA Technologies, Inc.

Second Amended and Restated 2018 Equity Incentive Plan Restricted Stock Unit Award.

Form of TETRA Technologies, Inc.

Second Amended and Restated 2018 Equity Incentive Plan Restricted Stock Unit Award for outside directors.

Form of TETRA Technologies, Inc.

Second Amended and Restated 2018 Equity Incentive Plan Cash Award.

21+ Subsidiaries of the Company.

6 unchanged sentences

Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).

TETRA Technologies, Inc.

Incentive-Based Compensation Recoupment Policy effective on October 25, 2023.

101.INS++ XBRL Instance Document.

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Director February 27, 2024

/s/Christian A.

Director February 27, 2024

Luna Director February 27, 2024

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We have audited the accompanying consolidated balance sheets of TETRA Technologies, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

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Critical audit matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgements.

38 unchanged sentences

Cash and cash equivalents $ 52,485 $ 13,592

Trade accounts receivable, net of allowance for doubtful accounts of $ 538 in 2022 and $ 289 in 2021

Trade accounts receivable, net of allowance for credit losses of $ 614 in 2023 and $ 538 in 2022

111,798 129,631

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Treasury stock, at cost;

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

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

( 19,957 ) ( 19,957 )

Accumulated other comprehensive income (loss) ( 49,063 ) ( 46,932 )

Accumulated other comprehensive loss

( 45,231 ) ( 49,063 )

Retained deficit ( 276,709 ) ( 302,493 )

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Interest expense, net 22,349 15,833 16,377

Other (income) expense, net ( 4,465 ) ( 17,468 ) ( 2,994 )

Other income, net

( 9,112 ) ( 4,465 ) ( 17,468 )

Income (loss) before taxes and discontinued operations 31,699 11,166 ( 14,721 )

3 unchanged sentences

Discontinued operations:

Income (loss) from discontinued operations, net of taxes 195 120,407 ( 72,089 )

Net income (loss) 7,796 103,602 ( 98,933 )

loss (income) attributable to noncontrolling interest (1)

Income from discontinued operations, net of taxes

278 195 120,407

Net income (loss) attributable to TETRA stockholders $ 7,839 $ 103,333 $ ( 51,143 )

25,757 7,796 103,602

(income) loss attributable to noncontrolling interest (1)

27 43 ( 269 )

Net income attributable to TETRA stockholders

$ 25,784 $ 7,839 $ 103,333

Basic net income (loss) per common share:

1 unchanged sentence

$ 0.20 $ 0.06 $ ( 0.13 )

Income (loss) from discontinued operations 0.00 0.95 ( 0.19 )

Net income (loss) attributable to TETRA stockholders $ 0.06 $ 0.82 $ ( 0.41 )

Income from discontinued operations

Net income attributable to TETRA stockholders

$ 0.20 $ 0.06 $ 0.82

Weighted average basic shares outstanding 129,568 128,082 126,602

1 unchanged sentence

Income (loss) from continuing operations $ 0.20 $ 0.06 $ ( 0.13 )

Income (loss) from discontinued operations 0.00 0.95 ( 0.19 )

Net income (loss) attributable to TETRA stockholders $ 0.06 $ 0.82 $ ( 0.41 )

Income from discontinued operations — — 0.95

Net income attributable to TETRA stockholders $ 0.20 $ 0.06 $ 0.82

Weighted average diluted shares outstanding 131,243 129,778 126,602

(1) (Income) loss attributable to noncontrolling interest includes (income) loss from discontinued operations, net of taxes of zero , $( 333 ), and $ 47,898 for the years ended December 31, 2022, 2021 and 2020, respectively.

(1) (Income) loss attributable to noncontrolling interest includes income from discontinued operations, net of taxes of zero , zero , and $ 333 for the years ended December 31, 2023, 2022, and 2021, respectively.

See Notes to Consolidated Financial Statements

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2023 2022 2021

Net income (loss) $ 7,796 $ 103,602 $ ( 98,933 )

$ 25,757 $ 7,796 $ 103,602

Foreign currency translation gain (loss), net of taxes of $0 in 2023, $0 in 2022, and $0 in 2021 3,105 ( 2,059 ) ( 4,623 )

Unrealized loss on investment in CarbonFree convertible note ( 72 ) — —

Comprehensive income (loss) 5,665 98,979 ( 96,547 )

comprehensive loss (income) attributable to noncontrolling interest 43 ( 269 ) 47,673

Comprehensive income (loss) attributable to TETRA stockholders $ 5,708 $ 98,710 $ ( 48,874 )

Unrealized income (loss) on investment in CarbonFree convertible note

Comprehensive income

29,589 5,665 98,979

comprehensive (income) loss attributable to noncontrolling interest

27 43 ( 269 )

Comprehensive income attributable to TETRA stockholders

$ 29,616 $ 5,708 $ 98,710

See Notes to Consolidated Financial Statements

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Balance at December 31, 2020 $ 1,289 $ 472,134 $ ( 19,484 ) $ ( 49,914 ) $ — $ ( 413,665 ) $ 80,702 $ 71,062

Net loss for 2020 — — — — — ( 51,143 ) ( 47,790 ) ( 98,933 )

Translation adjustment, net of taxes of $0

Net income for 2021

— — — — — 103,333 269 103,602

Comprehensive loss ( 96,547 )

Distributions to CSI Compressco public unitholders — — — — — — ( 1,244 ) ( 1,244 )

Translation adjustment, net of taxes of zero

— — — ( 4,623 ) — — — ( 4,623 )

Comprehensive income

Deconsolidation of CSI Compressco

— — — 7,605 — — ( 82,775 ) ( 75,170 )

— — — — — — ( 110 ) ( 110 )

Equity award activity 12 — — — — — — 12

3 unchanged sentences

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

Net income for 2021 — — — — — 103,333 269 103,602

Translation adjustment, net of taxes of $0

Net income (loss) for 2022

— — — — — 7,839 ( 43 ) 7,796

Translation adjustment, net of taxes of zero

— — — ( 2,059 ) — — — ( 2,059 )

Other comprehensive loss

— — — — ( 72 ) — — ( 72 )

Comprehensive income 5,665

Deconsolidation of CSI Compressco — — — 7,605 — — ( 82,775 ) ( 75,170 )

Dividend — — — — — — ( 110 ) ( 110 )

Equity award activity 12 — — — — — — 12

Treasury stock activity, net — — ( 473 ) — — — — ( 473 )

Equity compensation expense — 4,482 — — — — — 4,482

1 unchanged sentence

Balance at December 31, 2022 $ 1,318 $ 477,820 $ ( 19,957 ) $ ( 48,991 ) $ ( 72 ) $ ( 302,493 ) $ ( 1,228 ) $ 106,397

Net income for 2022 — — — — — 7,839 ( 43 ) 7,796

Translation adjustment, net of taxes of $0

Net income (loss) for 2023

— — — — — 25,784 ( 27 ) 25,757

Other comprehensive income (loss) — — — — ( 72 ) — — ( 72 )

Translation adjustment, net of taxes of zero

— — — 3,105 — — — 3,105

Other comprehensive income

— — — — 727 — — 727

Comprehensive income 29,589

10 unchanged sentences

Operating activities:

Net income (loss) $ 7,796 $ 103,602 $ ( 98,933 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

$ 25,757 $ 7,796 $ 103,602

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, amortization, and accretion 34,329 32,819 33,532

2 unchanged sentences

Unrealized (gain) loss on investments

( 539 ) ( 180 ) 2,227

Realized gain on sale of Standard Lithium shares — — ( 15,479 )

Provisions for deferred income taxes

( 734 ) 537 ( 71 )

Equity-based compensation expense 10,622 6,880 4,664

Provision for (recovery of) doubtful accounts 42 ( 654 ) 6,857

Provision for (recovery of) credit losses

285 42 ( 654 )

Amortization and expense of financing costs 3,433 3,376 3,091

Gain from insurance recoveries associated with damaged equipment ( 2,850 ) ( 3,750 ) ( 110 )

CSI Compressco debt exchange expenses

Gain on sale of assets ( 562 ) ( 1,170 ) ( 482 )

15 unchanged sentences

Other investing activities ( 1,936 ) ( 987 ) 934

Net cash provided by (used in) investing activities ( 36,504 ) ( 5,175 ) 6,038

Net cash used in investing activities

( 27,027 ) ( 36,504 ) ( 5,175 )

Financing activities:

Proceeds from long-term debt 13,825 1,614 477,647

Principal payments on long-term debt ( 12,483 ) ( 50,477 ) ( 487,574 )

Payments on finance lease obligations ( 1,302 ) — —

Distributions to CSI Compressco public unitholders

Proceeds from credit agreements and long-term debt

97,529 13,825 1,614

Principal payments on credit agreements and long-term debt

( 100,497 ) ( 12,483 ) ( 50,477 )

Payments on finance lease obligations ( 1,695 ) ( 1,302 ) —

Debt issuance costs and other financing activities — — ( 1,191 )

1 unchanged sentence

Effect of exchange rate changes on cash 377 ( 452 ) ( 1,771 )

Increase (decrease) in cash and cash equivalents and restricted cash ( 17,959 ) ( 52,343 ) 66,126

Increase (decrease) in cash and cash equivalents

38,893 ( 17,959 ) ( 52,343 )

Cash and cash equivalents at beginning of period 13,592 31,551 83,894

2 unchanged sentences

Cash and cash equivalents at end of period $ 52,485 $ 13,592 $ 31,551

Cash and cash equivalents at end of period associated with discontinued operations — — 16,577

Cash and cash equivalents at end of period associated with continuing operations $ 13,592 $ 31,551 $ 67,317

See Notes to Consolidated Financial Statements

4 unchanged sentences

NOTE 1 — ORGANIZATION AND OPERATIONS

We are an energy services and solutions company operating on six continents, focused on bromine-based completion fluids, calcium chloride, water management solutions, frac flowback, and production well testing services.

We are an energy services and solutions company with operations on six continents focused on developing environmentally conscious services and solutions that help make people’s lives better.

We were incorporated in Delaware in 1981.

3 unchanged sentences

Our Completion Fluids & Products Division manufactures and markets clear brine fluids (“CBFs”), additives, and associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations in the United States and in certain countries in Latin America, Europe, Asia, the Middle East, and Africa.

The Division also markets liquid and dry calcium chloride products manufactured at its production facilities or purchased from third-party suppliers to a variety of markets outside the energy industry, and markets TETRA PureFlow ® ultra-pure zinc bromide to several battery technology companies.

The Division also markets liquid and dry calcium chloride products manufactured at its production facilities or purchased from third-party suppliers to a variety of markets outside the energy industry, and markets TETRA PureFlow an ultra-pure zinc bromide as well as TETRA PureFlow Plus, an ultra-pure zinc bromide/zinc chloride blend;

both to several battery technology companies.

Our Water & Flowback Services Division provides onshore oil and gas operators with comprehensive water management services.

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See Note 3 - “Discontinued Operations” for further information.

On December 19, 2023, CSI Compressco announced that it had entered into an agreement to be acquired by Kodiak Gas Services, Inc.

(“Kodiak”) with Kodiak surviving the merger (the “Kodiak Transaction”).

If the Kodiak Transaction closes, our common units in CSI Compressco will be exchanged for Kodiak common stock (NYSE:

Use of Estimates

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Certain previously reported financial information has been reclassified to conform to the current year’s presentation.

For a discussion of the reclassification of the financial presentation of our former Compression Division as discontinued operations, see Note 3 - “Discontinued Operations”.

Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations.

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Our risk management activities include the use of foreign currency forward purchase and sale derivative contracts as part of a program designed to mitigate the currency exchange rate risk exposure on selected international operations.

We have $ 3.0 million outstanding balance under our variable rate revolving credit facilities as of December 31, 2022.

We have no outstanding balance under our variable rate revolving credit facilities as of December 31, 2023.

Outstanding balances on variable-rate bank credit facilities create market risk exposure related to changes in applicable interest rates.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is determined on a specific identification basis when we believe that the collection of specific amounts owed to us is not probable.

Allowance for Credit Losses

The allowance for credit losses is determined on a specific identification basis when we believe that the collection of specific amounts owed to us is not probable, as well as a percentage of aged receivables based on historic losses.

Changes in the allowance are as follows:

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Activity in the period:

Provision for doubtful accounts 257 ( 4 ) 5,672

Account (charge offs) recoveries, net ( 8 ) ( 6,531 ) ( 760 )

Provision for credit losses

285 257 ( 4 )

Account charge offs, net of recoveries

( 209 ) ( 8 ) ( 6,531 )

At end of period $ 614 $ 538 $ 289

13 unchanged sentences

Depreciation expense, excluding impairments and other charges, for the years ended December 31, 2023, 2022, and 2021 was $ 29.2 million, $ 27.3 million, and $ 27.8 million, respectively.

Construction in progress as of December 31, 2022 and 2021 consisted primarily of equipment fabrication projects.

Construction in progress as of December 31, 2023 and 2022 consisted primarily of equipment fabrication projects and early production facilities.

Intangible Assets other than Goodwill

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If an impairment has occurred, we will recognize a loss for the difference between the carrying value and the estimated fair value of the intangible asset.

See “Impairments of Long-Lived Assets” section in Note 6 - “Impairments and Other Charges”.

As a lessee, unless the lease meets the criteria of short-term and is excluded per our policy election described below, we initially recognize a lease liability and related right-of-use asset on the commencement date.

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As an accounting policy election, we do not include short-term leases on our balance sheets.

Short-term leases include leases with a term of 12 months or less, inclusive of renewal options we are reasonably certain to

The lease payments for short-term leases are included as operating lease costs on a straight-line basis over the lease term in cost of revenues or general and administrative expense based on the use of the underlying asset.

Short-term leases include leases with a term of 12 months or less, inclusive of renewal options we are reasonably certain to exercise.

The lease payments for short-term leases are included as operating lease costs on a straight-line basis

over the lease term in cost of revenues or general and administrative expense based on the use of the underlying asset.

We recognize lease costs for variable lease payments not included in the determination of a lease liability in the period in which an obligation is incurred.

2 unchanged sentences

Consistent with other long-lived assets or asset groups that are held and used, we test for impairment of our right-of-use assets when impairment indicators are present.

Impairments of Long-Lived Assets

Impairments of long-lived assets, including identified intangible assets, are determined periodically when indicators of impairment are present.

Impairments of Inventory and Long-Lived Assets

Impairments of inventory and long-lived assets, including identified intangible assets, are determined periodically when indicators of impairment are present.

If such indicators are present, the determination of the amount of impairment is based on our judgments as to the future undiscounted operating cash flows to be generated from these assets throughout their remaining estimated useful lives.

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We include in general and administrative expense all costs not identifiable to our specific product or service operations, including divisional and general corporate overhead, professional services, corporate office costs, sales and marketing expenses, insurance, and certain taxes.

Exploration and Pre-Development Costs and Collaborative Arrangement

We are pursuing low-carbon energy initiatives that leverage our fluids and aqueous chemistry core competencies and our significant bromine and lithium resources, including our brine leases in Southwest Arkansas.

During the years ended December 31, 2023, 2022, and 2021, we incurred $ 12.1 million, $ 6.6 million and zero , respectively, of exploration and pre-development costs.

In June 2023, we entered into a memorandum of understanding with Saltwerx, LLC (“Saltwerx”), an indirect wholly owned subsidiary of ExxonMobil Corporation, 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 memorandum of understanding includes an allocation of certain 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.

During the year ended December 31, 2023, we recorded $ 9.3 million in reimbursements associated with this arrangement.

This income is included in other (income) expense, net in our consolidated statements of operations.

Equity-Based Compensation

We have various equity incentive compensation plans which provide for the granting of restricted common stock, options for the purchase of our common stock, and other performance-based, equity-based compensation awards to our executive officers, key employees, nonexecutive officers, and directors.

Total equity-based compensation expense, net of taxes, for the three years ended December 31, 2022, 2021, and 2020, was $ 6.8 million, $ 4.6 million, and $ 4.3 million, respectively.

General and administrative expense for the year ended December 31, 2022 also includes $ 2.4 million for a portion of short-term incentive compensation that is expected to be settled in stock rather than cash during the first quarter of 2023.

Total equity-based compensation expense, net of taxes, for the years ended December 31, 2023, 2022, and 2021, was $ 10.4 million, $ 6.8 million, and $ 4.6 million, respectively.

For further discussion of equity-based compensation, see Note 13 – “Equity-Based Compensation and Other” .

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

During the years ended December 31, 2022, 2021, and 2020, income from this arrangement was $ 3.3 million, $ 1.1 million, and $ 3.1 million, respectively, including the value of cash and stock received, and $( 1.4 ) million, $( 1.8 ) million and $ 0.9 million, respectively, for unrealized gains (losses) on changes in the value of Standard Lithium stock held.

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.

Deferred income balances were $ 1.6 million and $ 1.9 million as of December 31, 2023 and 2022, respectively, associated with the consideration received from Standard Lithium and are included in accrued liabilities and other in our consolidated balance sheets.

During the years ended December 31, 2023, 2022, and 2021, income from this arrangement was $ 3.0 million, $ 3.3 million, and $ 1.1 million, respectively, from the value of cash and stock received, and $ 1.0 million, $ 1.4 million and $ 1.8 million, respectively, for unrealized losses on changes in the value of Standard Lithium stock held.

We also recognized $ 15.5 million of income during 2021 from the sale of our shares in Standard Lithium.

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We elected to account for GILTI as a period cost in the year the tax is incurred.

Tax Benefits Preservation Plan

On February 28, 2023, the Board of Directors adopted a Tax Benefits Preservation Plan (the “Tax Plan”) designed to protect the availability of the Company’s net operating loss carryforwards (“NOLs”) and other tax attributes (collectively, the “Tax Attributes”), which may be utilized in certain circumstances to reduce the Company’s future income tax obligations.

The Tax Plan is intended to reduce the likelihood that any changes in the Company’s investor base would limit the Company’s future use of its Tax Attributes as a result of the Company experiencing an “ownership change” under Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended (the “Code”).

If a corporation experiences an “ownership change,” any NOLs, losses or deductions attributable to a “net unrealized built-in loss” and other Tax Attributes could be substantially limited, and timing of the usage of such Tax Attributes could be substantially delayed.

A corporation generally will experience an ownership change if one or more stockholders (or group of stockholders) who are each deemed to own at least 5% of the corporation’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a testing period (generally, a rolling three-year period).

In adopting the Tax Plan, the Board of Directors declared a dividend of one Series A Junior Participating Preferred Stock purchase right (the “Rights”) for each outstanding share of Common Stock pursuant to the terms of

the Tax Plan.

Initially, each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $ 0.01 per share, of the Company (the “Preferred Stock”) at a price of $ 20.00 per one one-thousandth of a share of Preferred Stock (the “Purchase Price”), subject to adjustment.

The Rights will cause substantial dilution to a person or group that acquires 4.99 % or more of the Common Stock (or to a person or group that already owns 4.99 % or more of the Company’s Common Stock if such person or group acquires additional shares representing 2 % of the Company’s then outstanding shares of Common Stock) without prior approval from the Board of Directors.

The Rights will expire at the earliest of:

(i) the close of business on February 28, 2026 (the “Final Expiration Date”);

(ii) the time at which the Rights are redeemed pursuant to the Tax Plan, (iii) the time at which the Rights are exchanged pursuant to the Tax Plan;

(iv) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement as described in the penultimate paragraph of Section 1.3 of the Tax Plan;

(v) the close of business on the effective date of the repeal of Section 382 of the Code if the Board determines that the Tax Plan is no longer necessary or desirable for the preservation of the Tax Attributes;

or (vi) the close of business on the first day of a taxable year of the Company following a Board determination that no Tax Attributes may be carried forward or otherwise utilized.

The Tax Plan adopted by the Board of Directors is similar to plans adopted by other publicly held companies with significant NOLs or other substantial tax benefits and is not designed to prevent any action that the Board of Directors determines to be in the best interest of the Company and its stockholders.

At the Company’s 2023 annual meeting of stockholders held on May 24, 2023, the Company’s stockholders ratified the adoption of the Tax Plan.

The Rights are in all respects subject to and governed by the provisions of the Tax Plan.

The foregoing summary provides only a general description of the Tax Plan and does not purport to be complete.

The Tax Plan, which specifies the terms of the Rights and includes as Exhibit A the Form of Certificate of Designation of Series A Junior Participating Preferred Stock of the Company and as Exhibit B the Form of Right Certificate, is attached to the Company’s Current Report on Form 8-K, which was filed with the SEC on March 1, 2023, as Exhibit 4.1 and is incorporated herein by reference.

The foregoing summary should be read together with the entire Tax Plan and is qualified in its entirety by reference to the Tax Plan.

Noncontrolling Interests

Noncontrolling interests represent third-party ownership in the net assets of the Company’s consolidated subsidiaries and are presented as a component of equity.

Substantially all of the Company’s noncontrolling interests represented third-party ownership in CSI Compressco prior to the GP sale in January 2021.

The Company’s noncontrolling interests as of December 31, 2023 and 2022 consists primarily of the outside ownership of subsidiaries in Africa.

Accumulated Other Comprehensive Income (Loss)

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The calculation of basic and diluted earnings per share excludes losses attributable to noncontrolling interests.

The calculation of basic earnings per share excludes any dilutive effects of equity awards or warrants.

The calculation of diluted earnings per share includes the effect of equity awards and warrants, if dilutive, which is computed using the treasury stock method during the periods such equity awards and warrants were outstanding.

For the years ended December 31, 2021, and 2020, the average diluted shares outstanding excludes the impact of all outstanding equity awards and warrants, as the inclusion of these shares would have been anti-dilutive due to the net losses from continuing operations recorded during the year.

The calculation of basic earnings per share excludes any dilutive effects of equity awards.

The calculation of diluted earnings per share includes the effect of equity awards, if dilutive, which is computed using the treasury stock method during the periods such equity awards were outstanding.

See Note 16 – “Net Income (Loss) Per Share” for further discussion of shares outstanding.

Foreign Currency Translation

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

respectively.

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

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Income taxes paid $ 4,782 $ 3,270 $ 2,100

Accrued capital expenditures at year end $ 7,036 $ 7,491 $ 1,573

(1) I nformation for the year ended December 31, 2020 includes the activity for CSI Compressco for the full period.

2023 2022 2021

(in thousands)

Accrued capital expenditures

$ 5,171 $ 4,901 $ 5,356

(1) Information for the year ended December 31, 2021 includes activity for CSI Compressco for January only.

New Accounting Pronouncements

Standards not yet adopted

Standards adopted during 2023

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326):

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Credit impairment will be accounted for as an allowance for credit losses deducted from the amortized cost basis at each reporting date.

Updates at each reporting date after initial adoption will be recorded through selling, general, and administrative expense.

Updates at each reporting date after initial adoption will be recorded through selling, general, and

administrative expense.

On January 1, 2023, we adopted ASU 2016-13.

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In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.” Entities may elect to apply the amendments for contract

modifications made on or before December 31, 2024.

During the three months ended September 30, 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.

We will assess the impact of adopting ASU 2020-04, as extended by ASU 2022-06, on our consolidated financial statements if or when our contracts are modified to eliminate references to LIBOR.

Deferral of the Sunset Date of Topic 848.” During the three months ended June 30, 2023, our asset-based credit agreement and term credit agreement were amended to replace LIBOR and Eurodollar rates with the secured overnight financing rate (“SOFR”).

There were no significant costs associated with the amendments and the amendments did not have a significant impact on our consolidated financial statements.

Standards not yet adopted

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segments disclosures in annual and interim financial statements, primarily through expanded disclosures of significant segment expenses.

ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023, with early adoption permitted.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” The new standard requires companies to disclose specific categories in the income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the expected impact of these standards, but does not expect them to have a significant impact on its consolidated financial statements upon adoption.

NOTE 3 – DISCONTINUED OPERATIONS

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We also provided back-office support to CSI Compressco under a Transition Services Agreement until CSI Compressco completed a full separation from our back-office support functions during the first quarter of 2022.

In the second quarter of 2022, we received $ 0.3 million from CSI Compressco for the sale of equipment.

During the year ended December 31, 2022, we received $ 0.4 million from CSI Compressco for services provided under the Transition Services Agreement and distributions, and paid less than $ 0.1 million to CSI Compressco for reimbursement of expenses.

During the year ended December 31, 2021, we received $ 7.0 million from CSI Compressco for services provided under the Transition Services Agreement, distributions and other reimbursements and paid $ 0.5 million to CSI Compressco for reimbursement of expenses.

During the year ended December 31, 2023, we received $ 0.2 million from CSI Compressco for distributions, and paid $ 0.01 million to CSI Compressco for office rentals in Latin America.

During the year ended December 31, 2022, we received $ 0.4 million from CSI Compressco for services provided under the Transition Services Agreement, distributions and other reimbursements, received $ 0.3 million from CSI Compressco for the sale of equipment, and paid $ 0.1 million to CSI Compressco for reimbursement of expenses.

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

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December 31, 2023

Offshore Services Maritech Total

Offshore Services

Cost of revenues $ 5

General and administrative expense 41

Other income, net

Income from discontinued operations attributable to TETRA stockholders $ 278

December 31, 2022

Offshore Services

General and administrative expense 31 — 31

Other expense, net — ( 226 ) ( 226 )

Pretax income (loss) from discontinued operations

$ ( 31 ) $ 226 195

Income from discontinued operations attributable to TETRA stockholders $ 195

December 31, 2021

Compression Offshore Services Total

Offshore Services Total

Revenue $ 18,968 $ — $ 18,968

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Pretax income from discontinued operations

$ 231 $ 69 300

Pretax income on disposal of discontinued operations

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Income from discontinued operations attributable to TETRA stockholders

December 31, 2020

Compression Offshore Services Total

Revenue $ 338,246 $ — $ 338,246

Cost of revenues 212,253 ( 330 ) 211,923

Depreciation, amortization, and accretion 80,533 — 80,533

Impairments and other charges 20,841 — 20,841

General and administrative expense 37,895 473 38,368

Interest expense, net 52,771 — 52,771

Other expense, net 2,688 — 2,688

Pretax loss from discontinued operations $ ( 68,735 ) $ ( 143 ) ( 68,878 )

Income tax provision 3,211

Loss from discontinued operations ( 72,089 )

Loss from discontinued operations attributable to noncontrolling interest 47,898

Loss from discontinued operations attributable to TETRA stockholders $ ( 24,191 )

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

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Total liabilities associated with discontinued operations $ 825 $ 95 $ 920

December 31, 2021

Offshore Services Maritech Total

Carrying amounts of major classes of liabilities included as part of discontinued operations

Trade payables $ 1,157 $ — $ 1,157

Accrued liabilities and other — 228 228

Total liabilities associated with discontinued operations $ 1,157 $ 228 $ 1,385

See Note 11 - “Commitments and Contingencies” for further discussion of contingencies of discontinued operations.

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

Unearned income balances were $ 3.7 million and $ 3.2 million as of December 31, 2022 and 2021, respectively, and vary based on the timing of invoicing and performance obligations being met.

Unearned income balances were $ 3.1 million, $ 1.8 million and $ 1.7 million as of December 31, 2023, 2022 and 2021, respectively, and vary based on the timing of invoicing and performance obligations being met.

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

During the year ended December 31, 2022 , we recognized approximately $ 0.6 million of revenue deferred in unearned income as of the beginning of the period.

During the years ended December 31, 2023 and 2022, we recognized approximately $ 1.8 million

and $ 0.6 million, respectively, of revenue deferred in unearned income as of the beginning of each period.

This amount is included in products sales and services revenues in our consolidated statements of operations.

Revenue recognized during the years ended December 31 2021 and 2020 deferred as of the end of the preceding year was not significant.

Revenue recognized during the year ended December 31, 2021 deferred as of the end of the preceding year was not significant.

During the years ended December 31, 2023 , 2022, and 2021 , contract costs were not significant.

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$ 626,262 $ 553,213 $ 388,272

We are also 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 other potential resources in the Mojave region of California.

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

See Minerals Resources Arrangements within Note 2 - “Summary of Significant Accounting Policies” for further discussion.

NOTE 5 — INTANGIBLES

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Impairments of Inventory and Long-Lived Assets

During 2023, we recorded a $ 2.1 million impairment of a facility lease in Scotland within our Completion Fluids & Products Division and we recorded a $ 0.8 million impairment of our corporate office lease.

The fair values were estimated based on the discounted cash flows from our lease and sublease agreements (a Level 3 fair value measurement) in accordance with the fair value hierarchy.

During the second quarter of 2022, our Completion Fluids & Products and Water & Flowback Services Divisions each recorded certain inventory and long-lived tangible asset impairments.

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During 2021, we recorded an impairment charge of $ 0.6 million primarily related to idle equipment in our Canada office within our Water & Flowback Services Division.

During 2020, we recorded an impairment charge of $ 0.6 million primarily related to a right of use asset for the lease of our Canada office within our Water & Flowback Services Division as we ceased use of the office during the year.

NOTE 7 – INVENTORIES

Components of inventories, net of reserve, are as follows:

Components of inventories are as follows:

(In Thousands)

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Investment in Standard Lithium 1,616 1,180

Other investments

Total investments $ 17,354 $ 14,286

Following the closing of the GP Sale, we continue to own approximately 3.7 % of the outstanding CSI Compressco common units (NASDAQ:

We continue to own approximately 3.7 % of the outstanding CSI Compressco common units (NASDAQ:

CCLP) as of December 31, 2023.

In May 2021, we signed a memorandum of understanding (“MOU”) with CarbonFree, a carbon capture company with patented technologies that capture CO 2 and mineralize emissions to make commercial, carbon-negative chemicals.

Although the MOU expired in May 2022 at the end of its twelve-month term, we have an intellectual property joint development agreement in place with CarbonFree to evaluate potential new technologies.

CarbonFree is a carbon capture company with patented technologies that capture CO 2 and mineralize emissions to make commercial, carbon-negative chemicals.

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

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

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

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.

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.

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

During the fourth quarter of 2021, we sold 1.6 million shares of Standard Lithium shares we owned for approximately $ 17.6 million, before broker and transaction fees.

See Note 14 - “Fair Value Measurements” for further information.

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Under the terms of the lease agreement, we have the ability to extend the lease for five successive five-year periods at base rental rates to be determined at the time of each extension.

Components of lease expense, included in either cost of revenues or general and administrative expense based on the use of the underlying asset, are as follows (inclusive of lease expense for leases not included on our consolidated balance sheet based on our accounting policy election to exclude leases with a term of 12 months or less):

consolidated balance sheet based on our accounting policy election to exclude leases with a term of 12 months or less):

Year Ended December 31,

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Total lease expense $ 59,963 $ 52,805 $ 34,960

For the years ended December 31, 2022, 2021, and 2020, we recognized sublease income of $ 1.4 million, $ 1.0 million, and $ 1.0 million, respectively.

Variable rent expense was not material.

At December 31, 2022, future minimum rental receipts under non-cancelable subleases for office space in two of our locations totaled $ 3.7 million.

Supplemental cash flow information:

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2025 9,383 1,615

2026 8,899 144

2027 7,812 142

2028 2,293 92

Thereafter 6,590 15

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Total lease liabilities $ 36,639 $ 2,656

The Company has subleases for a portion of its corporate headquarters facility and a facility in Europe.

The leases and subleases are considered operating leases.

For the years ended December 31, 2023, 2022, and 2021,

we recognized sublease income of $ 1.2 million, $ 1.4 million, and $ 1.0 million, respectively.

Future minimum sublease payments under non-cancelable subleases for two of our facilities were as follows at December 31, 2023:

Sublease Payments

(In Thousands)

Thereafter 4,158

Total sublease payments

NOTE 10 — LONG-TERM DEBT AND OTHER BORROWINGS

Consolidated long-term debt consists of the following:

Scheduled Maturity 2023 2022

(In Thousands)

TETRA Scheduled Maturity

Term credit agreement (1)

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Swedish credit facility December 31, 2024 — 3

TETRA total debt 156,458 151,936

157,505 156,458

Less current portion — ( 3 )

Total long-term debt $ 157,505 $ 156,455

(1) Net of deferred financing costs of $ 1.1 million and $ 1.5 million as of December 31, 2022 and 2021, respectively.

(1) Net of unamortized discount of $ 2.2 million and $ 3.4 million as of December 31, 2023 and 2022, respectively, and net of unamortized deferred financing costs of $ 3.3 million and $ 5.1 million as of December 31, 2023 and 2022, respectively.

Scheduled maturities for the next five years and thereafter are as follows, not considering annual prepayment offers required by our Term Credit Agreement described below:

December 31, 2022

(In Thousands)

Total maturities $ 166,022

(2) Net of deferred financing costs of zero and $ 1.1 million as of December 31, 2023 and 2022, respectively.

Deferred financing costs of $ 0.6 million as of December 31, 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 December 31, 2023 TETRA had $ 157.5 million outstanding, net of unamortized discounts and unamortized deferred financing costs, under the Term Credit Agreement.

Our 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.

The minimum amount of $ 8.2 million that we would have been required to offer to prepay pursuant to this obligation for the year ending December 31, 2021 was paid on July 30, 2021 in connection with the amendment of our ABL Credit Agreement.

We are not required to offer to prepay any amount based on our Excess Cash Flow for the year ended December 31, 2022.

Borrowings under the Term Credit Agreement bear interest at a rate per annum equal to, at the option of TETRA, either (i) LIBOR (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.

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

As of December 31, 2023, the interest rate per annum on borrowings under the Term Credit Agreement is 11.70 %.

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All obligations under the Term Credit Agreement and the guarantees of those obligations are secured, subject to certain exceptions, by a security interest for the benefit of the Term Lenders on substantially all of the personal property of TETRA and certain of its subsidiaries, the equity interests in certain domestic subsidiaries, and a maximum of 65 % of the equity interests in certain foreign subsidiaries.

As of December 31, 2023, the $ 163.1 million principal balance of the Term Credit Agreement was due on September 10, 2025 and we had no other scheduled debt maturities.

The Company refinanced the Term Credit Agreement in January 2024.

See Note 18 - “Subsequent Events” for further information.

Asset-Based Credit Agreement

As of December 31, 2022, TETRA had $ 3.0 million outstanding and had $ 6.3 million in letters of credit against its asset-based lending agreement (“ABL Credit Agreement”).

As of December 31, 2023, TETRA had no balance outstanding and had $ 5.0 million in letters of credit against its asset-based lending agreement (“ABL Credit Agreement”).

The ABL Credit Agreement provides for a senior secured revolving credit facility of up to $ 80 million, with a $ 20 million accordion.

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TETRA had availability of $ 68.8 million under this agreement as of December 31, 2023.

Borrowings under the ABL Credit Agreement bear interest at a rate per annum equal to, at the option of TETRA, either (i) LIBOR plus a margin based upon a fixed charge coverage ratio or (ii) a base rate plus a margin based on a fixed charge coverage ratio.

The ABL Credit Agreement was amended in May 2023 to remove references to LIBOR.

Borrowings under the ABL Credit Agreement bear interest at a rate per annum equal to, at the option of TETRA, either (i) the standard overnight financing rate plus 0.10 %, (ii) a base rate plus a margin based on a fixed charge coverage ratio, (iii) the Daily Simple Risk Free Rate plus 0.10 %, or (iv) with respect to borrowings denominated in Sterling, the Daily Simple Risk Free Rate for Sterling plus 0.0326 %.

The base rate is determined by reference to the highest of (a) the prime rate of interest as announced from time to time by JPMorgan Chase Bank, N.A.

(b) the Federal Funds Effective Rate (as defined in the ABL Credit Agreement) plus 0.5 % per annum and (c) LIBOR (adjusted to reflect any required bank reserves) for a one-month period on such day plus 1.0 % per annum.

(b) the Federal Funds Effective Rate (as defined in the ABL Credit Agreement) plus 0.5 % per annum and (c) the standard overnight financing rate (adjusted to reflect any required bank reserves) for a one-month period on such day plus 1.0 % per annum.

Borrowings outstanding have an applicable margin ranging from 1.75 % to 2.25 % per annum for LIBOR-based loans and 0.75 % to 1.25 % per annum for base-rate loans, based upon the applicable fixed charge coverage ratio.

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In addition to paying interest on the outstanding principal under the ABL Credit Agreement, TETRA is required to pay a commitment fee in respect of the unutilized commitments at an applicable rate ranging from 0.375 % to 0.5 % per annum, paid monthly in arrears based on utilization of the commitments under the ABL Credit Agreement.

TETRA is also required to pay a customary letter of credit fee equal to the applicable margin on LIBOR-based loans and fronting fees.

TETRA is also required to pay a customary letter of credit fee equal to the applicable margin on loans and fronting fees.

All obligations under the ABL Credit Agreement and the guarantees of those obligations are secured, subject to certain exceptions, by a security interest for the benefit of the ABL Lenders on substantially all of the personal property of TETRA and certain subsidiaries of TETRA, the equity interests in certain domestic subsidiaries, and a maximum of 65 % of the equity interests in certain foreign subsidiaries.

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

As of December 31, 2022, we had approximately $ 3 thousand outstanding and availability of approximately $ 4.8 million under the Swedish Credit Facility.

As of December 31, 2023, we had no balance outstanding and availability of approximately $ 5.0 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.

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The Swedish Credit Facility expired on December 31, 2023 and has been renewed by the Company through December 31, 2024.

The balance outstanding under the Swedish Credit Facility is included in accrued liabilities and other in our consolidated balance sheet.

Any balance outstanding under the Swedish Credit Facility is included in accrued liabilities and other in our consolidated balance sheet.

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”).

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

As of December 31, 2023, we had $ 1.5 million of letters of credit outstanding against the Finland Credit Agreement.

The Finland Credit Agreement expired on January 31, 2023 and has been renewed by the Company through January 31, 2024.

The Finland Credit Agreement has been renewed by the Company through January 31, 2025.

Argentina Credit Facility

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”).

During the year ended December 31, 2023, $ 1.9 million was borrowed and repaid under the Argentina Credit Facility, which expired in October 2023.

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

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We are named defendants in several lawsuits and respondents in certain governmental proceedings arising in the ordinary course of business.

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.

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, which we believe is not justified nor appropriate under the Sales Agreement.

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, 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.

Discussions with LANXESS regarding this arbitration are ongoing.

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

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, pricing 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.

Product Purchase Obligations

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

As of December 31, 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 $ 125.9 million, including on average $ 18.9 million per year from 2023 to 2027 and $ 31.2 million thereafter, extending through 2029.

As of December 31, 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 $ 74.8 million, including $ 26.2 million for the year ending December 31, 2024, $ 22.7 million for the year ending December 31, 2025, $ 16.1 million for the year ending December 31, 2026, $ 7.4 million for the year ending December 31, 2027, and $ 2.4 million during the year ending December 31, 2028.

Amounts purchased under these agreements for each of the years ended December 31, 2023, 2022, and 2021, was $ 46.9 million, $ 29.7 million, and $ 23.2 million, respectively.

Contingencies of Discontinued Operations

In early 2018, we closed the Maritech Asset Purchase and Sale Agreement with Orinoco Natural Resources, LLC (“Orinoco”) that provided for the purchase by Orinoco of Maritech’s remaining oil and gas properties and related assets.

Also in early 2018, we closed the Maritech Membership Interest Purchase and Sale Agreement with Orinoco that provided for the purchase by Orinoco of all of the outstanding membership interests in Maritech.

As a result of these transactions, we have effectively exited the business of our former Maritech segment.

Under the Maritech Asset Purchase and Sale Agreement, Orinoco assumed all of Maritech’s decommissioning liabilities related to the leases sold to Orinoco (the “Orinoco Lease Liabilities”) and, under the Maritech Membership Interest Purchase and Sale Agreement, Orinoco assumed all other liabilities of Maritech, including the decommissioning liabilities associated with the oil and gas properties previously sold by Maritech (the “Legacy Liabilities”), subject to certain limited exceptions unrelated to the decommissioning liabilities.

In early 2018, we closed the Maritech Asset Purchase and Sale Agreement (“Maritech APA") and Maritech Membership Interest Purchase Agreement (“Maritech MIPA”) with Orinoco Natural Resources, LLC (“Orinoco”) that together provided for the purchase by Orinoco of all of Maritech’s membership interests and remaining oil and gas properties and related assets.

Under the Maritech APA, Orinoco assumed responsibility for all of Maritech’s decommissioning liabilities related to the leases sold to Orinoco (the “Orinoco Lease Liabilities”) and, under the Maritech MIPA, Orinoco assumed all other liabilities of Maritech, including the decommissioning liabilities associated with Maritech’s interests in oil and gas properties previously sold by Maritech and select infrastructure still operated by Maritech (the “Legacy Liabilities”), subject to certain limited exceptions unrelated to the decommissioning liabilities.

To the extent that Maritech or Orinoco fails to satisfy decommissioning liabilities associated with any of the Orinoco Lease Liabilities or the Legacy Liabilities, we may be required to satisfy such liabilities under third party indemnity agreements and corporate guarantees that we previously provided to the U.S.

Department of the Interior and other parties, respectively.

Pursuant to a Bonding Agreement entered into as part of these transactions (the “Bonding Agreement”), Orinoco provided non-revocable performance bonds in an aggregate amount of $ 46.8 million to cover the performance by Orinoco and Maritech of the asset retirement obligations of Maritech (the “Initial Bonds”) and agreed to replace, within 90 days following the closing, the Initial Bonds with other non-revocable performance bonds, meeting certain requirements, in the aggregate sum of $ 47.0 million (collectively, the “Interim Replacement Bonds”).

Orinoco further agreed to replace, within 180 days following the closing, the Interim Replacement Bonds with a maximum of three non-revocable performance bonds in the aggregate sum of $ 47.0 million , meeting certain requirements (the “Final Bonds” and, together with the Interim Replacement Bonds, the “Replacement Bonds”).

Among the other requirements of the Final Bonds was that they must provide coverage for all of the asset retirement obligations of Maritech instead of only relating to specific properties.

In the event Orinoco does not provide the Interim Replacement Bonds or the Final Bonds, Orinoco is required to make certain cash escrow payments to us.

Department of the Interior (“BSEE”) and other parties, respectively, for which costs may be significant.

Pursuant to a Bonding Agreement entered into as part of these Orinoco transactions (the “Bonding Agreement”), Orinoco provided non-revocable performance bonds in an aggregate amount of $ 46.8 million to cover the performance by Orinoco and Maritech of the asset retirement obligations of Maritech (the “Initial Bonds”) and agreed to replace the Initial Bonds with other non-revocable

performance bonds in the aggregate sum of $ 47.0 million (collectively, the “Replacement Bonds”).

In the event Orinoco does not provide the Replacement Bonds, Orinoco is required to make certain cash escrow payments to us.

Maritech has received decommissioning orders from BSEE and could receive additional decommissioning orders in the future.

From time to time, we receive demand notices from third parties related to such corporate guarantees.

While the ultimate outcome of such matters cannot be predicted at this time, if Maritech or other interest owners default on their decommissioning obligations, BSEE or third parties may seek to enforce corporate guarantees, in which event we could become liable, in certain scenarios, for part of such decommissioning obligations.

The payment obligations of Orinoco under the Bonding Agreement were guaranteed by Thomas M.

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Clarke pursuant to a separate guaranty agreement (the “Clarke Bonding Guaranty Agreement”).

Orinoco has not delivered the Replacement Bonds and neither it nor the Clarkes has made any of the agreed upon cash escrow payments and we filed a lawsuit against Orinoco and the Clarkes to enforce the terms of the Bonding Agreement and the Clarke Bonding Guaranty Agreement.

A summary judgment was initially granted in favor of Orinoco and the Clarkes which dismissed our claims against Orinoco under the Bonding Agreement and against the Clarkes under the Clarke Bonding Guaranty Agreement.

We filed an appeal and also asked the trial court to grant a new trial on the summary judgment or to modify the judgment because we believe this judgment should not have been granted.

On November 5, 2019, the trial court signed an order granting our motion for new trial and vacating the prior order granting summary judgment for Orinoco and the Clarkes.

Orinoco has not delivered the Replacement Bonds and neither it nor the Clarkes has made any of the agreed upon cash escrow payments;

therefore, we filed a lawsuit against Orinoco and the Clarkes to enforce the terms of the Bonding Agreement and the Clarke Bonding Guaranty Agreement.

Summary judgment was initially granted in favor of Orinoco and the Clarkes, which dismissed our claims against Orinoco under the Bonding Agreement and against the Clarkes under the Clarke Bonding Guaranty Agreement.

We filed an appeal with the trial court and requested a new trial on the summary judgment or modification of the judgment.

On November 5, 2019, the trial court signed an order granting our motion for a new trial and vacating the prior summary judgment order.

The parties are awaiting direction from the court on a new scheduling order and/or trial setting.

The Initial Bonds, which are non-revocable, remain in effect.

If we become liable in the future for any decommissioning liability associated with any property covered by either an Initial Bond or an Interim Replacement Bond while such bonds are outstanding and the payment made to us under such bond is not sufficient to satisfy such liability, the Bonding Agreement provides that Orinoco will pay us an amount equal to such deficiency and if Orinoco fails to pay any such amount, such amount must be paid by the Clarkes under the Clarke Bonding Guaranty Agreement.

However, if the Final Bonds or the full amount of the escrowed cash have been provided, neither Orinoco nor the Clarkes would be liable to pay us for any such deficiency.

Our financial condition and results of operations may be negatively affected if Orinoco is unable to cover any such deficiency or if we become liable for a significant portion of the decommissioning liabilities.

If we become liable in the future for any decommissioning liability associated with any property covered by either an Initial Bond or Replacement Bond while such bonds are outstanding and the payment made to us under such bond is not sufficient to satisfy such liability, the Bonding Agreement provides that Orinoco will pay us an amount equal to such deficiency and if Orinoco fails to pay any such amount, such amount must be paid by the Clarkes under the Clarke Bonding Guaranty Agreement.

Our financial condition and results of operations may be negatively affected if Orinoco or the Clarkes are unable to cover any such deficiency or if we become liable for a significant portion of the decommissioning liabilities.

In early 2018, we also closed the sale of our Offshore Division to Epic Companies, LLC (“Epic Companies,” formerly known as Epic Offshore Specialty, LLC).

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TETRA filed a lawsuit against the Clarkes on January 15, 2020 for breach of the promissory note guaranty agreement.

In September 2020, the court granted TETRA’s Motion for Summary Judgment and entered Final Judgment in our favor, dismissing counterclaims by the Clarkes and awarded TETRA $ 7.9 million in damages.

The Clarkes have filed an appeal of the Final Judgment, and the parties are awaiting a ruling from the court of appeals.

Since obtaining the Final Judgment, TETRA has undertaken efforts to abstract the judgment in Texas, Utah, Nevada, Massachusetts, and Georgia.

TETRA continues to work on identifying potential assets and/or engage with the Clarkes to resolve this dispute.

In September 2020, the court granted TETRA’s Motion for Summary Judgment and entered Final Judgment in our favor, dismissing counterclaims by the Clarkes and awarding TETRA $ 7.9 million in damages.

The Clarkes appealed the Final Judgment, and the court of appeals affirmed.

Since obtaining the Final Judgment, TETRA has undertaken efforts to collect the judgment in Texas, Utah, Nevada, Massachusetts, and Georgia without success.

TETRA continues to work on identifying potential Orinoco assets and/or engage with the Clarkes to resolve this dispute.

We cannot provide any assurance the Clarkes will pay the judgment or that they will not file for bankruptcy protection.

If the Clarkes do file for bankruptcy protection, we likely would be unable to collect all, or even a significant portion of, the judgment owed to us.

See Note 3 - “Discontinued Operations” for further discussion.

NOTE 12 — CAPITAL STOCK

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The voting, dividend, and liquidation rights of the holders of common stock are subject to the rights of the holders of preferred stock.

The holders of common stock

are entitled to one vote for each share held.

The holders of common stock are entitled to one vote for each share held.

There is no cumulative voting.

26 unchanged sentences

Total equity-based compensation expense before tax attributed to equity incentive compensation plans for the three years ended December 31, 2023, 2022, and 2021, was $ 10.6 million, $ 4.5 million, and $ 4.7 million, respectively, and is included in general and administrative expense.

Stock Incentive Plans

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In May 2010, our stockholders approved further amendments to the TETRA Technologies, Inc.

Amended and Restated 2007 Equity Incentive Compensation Plan (renamed as the 2007 Long Term Incentive Compensation Plan) which, among other changes, resulted in an

additional increase in the maximum number of shares authorized for issuance.

Pursuant to the 2007 Long Term Incentive Compensation Plan, we are authorized to grant up to 5,590,000 shares in the form of stock options (including incentive stock options and nonqualified stock options);

Amended and Restated 2007 Equity Incentive Compensation Plan (renamed as the 2007 Long Term Incentive Compensation Plan) which, among other changes, resulted in an additional increase in the maximum number of shares authorized for issuance.

Pursuant to the 2007 Long Term Incentive Compensation Plan, we were authorized to grant up to 5,590,000 shares in the form of stock options (including incentive stock options and nonqualified stock options);

restricted stock;

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Intrinsic value is the difference between the market value of our stock option multiplied by the number of stock options outstanding for those stock options where the market value exceeds their exercise price.

The total intrinsic value of stock options exercised during the year ended December 31, 2022, was less than $ 0.1 million.

There were 80,000 , 11,000 , and zero options exercised during the years ended December 31, 2022, 2021, and 2020, respectively.

The total intrinsic value of stock options exercised during the year ended December 31, 2023, was $ 0.3 million.

There were approximately 206,000 , 80,000 , and 11,000 options exercised during the years ended December 31, 2023, 2022, and 2021, respectively.

At December 31, 2023, total unrecognized compensation cost related to unvested stock options is not significant.

1 unchanged sentence

Restricted stock awards and restricted stock units are periodically granted to key employees, including grants for employment inducements, as well as to members of our Board of Directors.

These awards historically have provided for vesting periods of three years.

These awards historically have provided for vesting periods of up to three years .

Non-employee director grants vest in full before the first anniversary of the grant.

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Total compensation cost recognized for restricted stock was $ 10.6 million, $ 4.5 million, and $ 4.6 million for the years ended December 31, 2023, 2022, and 2021, respectively.

These amounts include $ 5.0 million and $ 2.4 million for the years ended December 31, 2023 and 2022, respectively, for the portion of awards under short-term incentive plans and long-term incentive plans that were or are expected to be settled with restricted stock awards.

Total unrecognized compensation cost at December 31, 2023, related to restricted stock, is approximately $ 7.6 million which is expected to be recognized over a weighted-average remaining amortization period of 1.7 years.

During the years ended December 31, 2023, 2022, and 2021, the total fair value of shares vested was $ 4.7 million, $ 5.5 million, and $ 5.5 million, respectively.

During 2022, 2021, and 2020, we received zero , 184,699 and 130,785 shares, respectively, of our common stock related to the vesting of certain employee restricted stock.

During 2023, 2022, and 2021, we received zero , zero , and 184,699 shares, respectively, of our common stock related to the vesting of certain employee restricted stock.

Such surrendered shares received by us are included in treasury stock.

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In addition, we can make discretionary contributions which are allocable to participants in accordance with the Plan.

During the fourth quarter of 2021, we reinstated the 401(k) matching for our employees which was suspended during 2020 due to the COVID pandemic and market conditions.

Total expense related to our 401(k) plan was $ 2.7 million, $ 2.3 million, and $ 0.5 million for the years ended December 31, 2023, 2022, and 2021, respectively.

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

Our investment in CarbonFree is recorded in our consolidated financial statements based on an internal valuation with assistance from a third-party valuation specialist (a Level 3 fair value measurement).

Our investment in convertible notes issued by CarbonFree is recorded in our consolidated financial statements based on an internal valuation with assistance from a third-party valuation specialist (a Level 3 fair value measurement).

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

2 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 changes in our investment in CarbonFree for the years ended December 31, 2023, 2022, and 2021 were as follows:

Year Ended December 31,

2023 2022 2021

At beginning of period $ 6,139 $ 5,000 $ —

Purchase of CarbonFree convertible note

Change in fair value of embedded option ( 16 ) 1,211 —

Change in fair value of convertible note, excluding embedded option 727 ( 72 ) —

At end of period $ 6,850 $ 6,139 $ 5,000

Derivative Contracts

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We did not have foreign currency derivative instruments outstanding as of December 31, 2023 or 2022.

During the years ended December 31, 2022, 2021, and 2020, we recognized $ 0.4 million, less than $ 0.1 million, and $ 0.2 million of net losses, respectively, reflected in other (income) expense, net, associated with our foreign currency derivative program.

During the years ended December 31, 2023, 2022, and 2021, we recognized zero , $ 0.4 million, and less than $ 0.1 million of net losses, respectively, reflected in other income, net, associated with our foreign currency derivative program.

A summary of significant recurring fair value measurements by valuation hierarchy as of December 31, 2023 and 2022, is as follows:

7 unchanged sentences

Investment in CarbonFree

6,850 — — 6,850

Investment in Standard Lithium

Total $ 14,286

1,616 1,616 — —

Fair Value Measurements Using

6 unchanged sentences

Investments in CarbonFree 6,139 — — 6,139

Total $ 11,233

Investments in Standard Lithium 1,180 1,180 — —

The fair values were estimated based on the discounted cash flows from our lease and sublease agreements (a Level 3 fair value measurement) in accordance with the fair value hierarchy.

The fair values of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings, and long-term debt pursuant to TETRA's Term Credit Agreement, ABL Credit Agreement and Swedish Credit Agreement approximate their carrying amounts.

7 unchanged sentences

6,954 3,028 2,155

Federal — — ( 175 )

State ( 41 ) 30 ( 4 )

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Total $ 31,699 $ 11,166 $ ( 14,721 )

A reconciliation of the beginning and ending amount of our gross unrecognized tax benefit is as follows:

Year Ended December 31,

2022 2021 2020

(In Thousands)

Gross unrecognized tax benefits at beginning of period $ — $ 17 $ 137

Lapse in statute of limitations — ( 17 ) ( 120 )

Gross unrecognized tax benefits at end of period $ — $ — $ 17

We recognize interest and penalties related to uncertain tax positions in income tax expense.

During the year ended December 31, 2022, we recognized no interest and penalties.

We recognized less than $ 0.1 million and $ 0.2 million for the years ended December 31, 2021 and 2020, respectively, of interest and penalties.

During the years ended December 31, 2023 and December 31, 2022, we recognized no interest and penalties and we recognized less than $ 0.1 million for the year ended December 31, 2021 of interest and penalties.

As of December 31, 2023 and 2022, we had no unrecognized tax benefits.

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We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

We considered all available evidence, both positive and negative, in determining whether, based on the weight of that evidence, a

valuation allowance is needed for some portion or all of our deferred tax assets.

We considered all available evidence, both positive and negative, in determining whether, based on the weight of that evidence, a valuation allowance is needed for some portion or all of our deferred tax assets.

In determining the need for a valuation allowance on our deferred tax assets we placed greater weight on recent and objectively verifiable current information, as compared to more forward-looking information that is used in valuating other assets on the balance sheet.

9 unchanged sentences

Net deferred tax assets $ 20,562 $ 23,222

(In Thousands)

Right of use asset $ 8,695 $ 8,049

4 unchanged sentences

Net deferred tax liabilities $ 1,369 $ 2,038

Deferred tax assets and liabilities are netted by jurisdiction in our consolidated balance sheets.

Net deferred tax assets are included in other assets in our consolidated balance sheets.

Deferred tax assets and liabilities netted by jurisdiction as of December 31, 2023 and 2022 are as follows:

(In Thousands)

Deferred tax assets

Deferred tax liabilities

( 2,279 ) ( 2,038 )

Net deferred tax liabilities $ ( 1,369 ) $ ( 2,038 )

We believe that it is more likely than not we will not realize all the tax benefits of the deferred tax assets within the allowable carryforward period.

11 unchanged sentences

Number of weighted average common shares outstanding 129,568 128,082 126,602

Assumed exercise of stock options 1,696 — —

Assumed exercise of restricted stock units and stock options 1,675 1,696 —

Average diluted shares outstanding 131,243 129,778 126,602

The average diluted shares outstanding excludes the impact of certain outstanding equity awards and warrants of 1.8 million and 21 thousand shares for the twelve-month periods ended December 31, 2021 and 2020, 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 of 1.8 million shares for the year ended December 31, 2021 as the inclusion of these shares would have been anti-dilutive due to the net loss from continuing operations recorded during the period.

NOTE 17 — INDUSTRY SEGMENTS AND GEOGRAPHIC INFORMATION

61 unchanged sentences

Discontinued operations

— 2,980 14,696

Consolidated $ 38,152 $ 40,056 $ 20,533

(1) Amounts presented are net of cost of equipment sold, including zero during 2022, zero during 2021 and $ 12.7 million during 2020 for our former Compression Division.

Summarized financial information concerning the geographic areas of our customers and in which we operate at December 31, 2023, 2022, and 2021, is presented below:

14 unchanged sentences

Total revenues $ 626,262 $ 553,213 $ 388,272

As of December 31, 2022, receivables from one customer represented more than 10 % of our consolidated trade accounts receivables, net of allowance for doubtful accounts.

As of December 31, 2023, no single customer represented more than 10% of our consolidated trade accounts receivables, net of allowance for credit losses.

As of December 31, 2022, receivables from one customer represented more than 10% of our consolidated trade accounts receivables, net of allowance for credit losses.

During each of the years ended December 31, 2023, 2022, and 2021, no single customer accounted for more than 10% of our consolidated revenues.

10 unchanged sentences

The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements except for the transaction described below.

Our Lake Charles facility incurred damage due to Hurricane Laura in 2020 for which we received partial insurance proceeds in 2020 and a $ 3.8 million voluntary settlement in February 2022.

In February 2023, we reached a voluntary settlement of an additional $ 2.8 million with another party, which we expect to recognize as other income during the first half of 2023.

On January 12, 2024, the Company entered into a definitive agreement for a $ 265.0 million credit facility, consisting of a $ 190.0 million funded term loan and a $ 75.0 million delayed-draw term loan (collectively the “New Term Credit Agreement”) that refinanced the Company’s $ 163.1 million Term Credit Agreement outstanding as of December 31, 2023 and provided capital to advance the Company’s Arkansas bromine processing project.

Pricing on the New Term Credit Agreement is the secured overnight financing rate plus 5.75 %.

The Company is required to pay a commitment fee on the unutilized commitments with respect to the delayed-draw term loan at the rate of 1.5 % per annum.

The Company used the net proceeds to repay in full the balance of its prior credit facility, with approximately $ 15.2 million of additional cash, net of discounts and transaction expenses.

The maturity date of the New Term Credit Agreement is January 12, 2030.

The Company expects to recognize an approximately $ 5.5 million loss in the first quarter of 2024 for costs deferred on the existing term loan as of December 31, 2023 and transaction costs.

The New Term Credit Agreement contains certain affirmative and negative covenants, including covenants that restrict the ability of the Company and certain of its subsidiaries to take certain actions including, among other things and subject to certain significant exceptions, the incurrence of debt, the granting of liens, engaging in mergers and other fundamental changes, the making of investments, entering into transactions with affiliates, the payment of dividends and other restricted payments, the prepayment of other indebtedness and the sale of assets.

The New Term Credit Agreement also requires the Company to maintain a Leverage Ratio (as defined in the new term loan credit agreement) of not more than 4.0 to 1.0 as of the end of each fiscal quarter and Liquidity (as defined in the New Term Credit Agreement) of not less than $ 50.0 million at all times.

All obligations under the New Term Credit Agreement and the guarantees of those obligations are secured, subject to certain exceptions, by a security interest on substantially all of the property of the Company and its domestic subsidiaries, subject to the lien priorities set forth in the intercreditor agreement with the agent under the Company’s Asset-Based Credit Agreement.

Our New Term Credit Agreement requires us to offer to prepay a percentage of Excess Cash Flow (as defined in the New Term Credit Agreement) within five business days of filing our Annual Report beginning with the financial statements for the year ending December 31, 2024.

The New Term Credit Agreement includes customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross-default to other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of security interests or invalidity of loan documents, certain ERISA events, unsatisfied or unstayed judgments and change of control.

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

What changed 10-K

Item 9A. Controls and Procedures