What changed in this filing

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Item 1. Financial Statements

2024-04-30 compared with 2023-10-30 · 170 added, 266 removed, 374 unchanged (54% of the section changed)

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Product sales

9 unchanged sentences

Depreciation, amortization, and accretion

8,578 8,634 25,705 24,061

Impairments and other charges

— — 777 2,262

Insurance recoveries

— — ( 2,850 ) ( 3,750 )

Total cost of revenues

4 unchanged sentences

Interest expense, net 5,952 5,092

Loss on debt extinguishment

Other income, net

( 3,978 ) ( 214 )

Income before taxes and discontinued operations 1,295 7,534

Provision for income taxes 380 1,489

Income (loss) before discontinued operations

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

Income (loss) from discontinued operations, net of taxes

( 48 ) 319 ( 68 ) 270

Income before discontinued operations

Discontinued operations:

Loss from discontinued operations, net of taxes

Net income 915 6,033

3 unchanged sentences

Income from continuing operations $ 0.01 $ 0.05

Income from discontinued operations — —

Net income attributable to TETRA stockholders $ 0.01 $ 0.05

2 unchanged sentences

Income from continuing operations $ 0.01 $ 0.05

Income from discontinued operations — —

Net income attributable to TETRA stockholders $ 0.01 $ 0.05

6 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income $ 915 $ 6,033

1 unchanged sentence

( 1,634 ) 1,421

Unrealized gain (loss) on investment in CarbonFree

146 ( 306 ) 474 ( 306 )

Unrealized gain on investment in CarbonFree

Comprehensive income (loss) ( 482 ) 7,575

6 unchanged sentences

(In Thousands)

September 30,

2024 December 31,

20 unchanged sentences

Construction in progress

11,126 10,323

Total property, plant, and equipment

19 unchanged sentences

(In Thousands, Except Share Amounts)

September 30,

2024 December 31,

3 unchanged sentences

$ 47,491 $ 52,290

Current portion of long-term debt 1,911 3

Compensation and employee benefits 19,232 26,918

3 unchanged sentences

29,280 27,303

Current liabilities associated with discontinued operations 414 920

Total current liabilities

10 unchanged sentences

Common stock, par value 0.01 per share;

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

250,000,000 shares authorized at March 31, 2024 and December 31, 2023;

134,274,837 shares issued at March 31, 2024 and 133,217,848 shares issued at December 31, 2023

Additional paid-in capital

1 unchanged sentence

Treasury stock, at cost;

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

3,138,675 shares held at March 31, 2024 and December 31, 2023

( 19,957 ) ( 19,957 )

15 unchanged sentences

Stock Accumulated Other

Comprehensive Income (Loss) Retained

Comprehensive

Income (Loss)

Deficit Noncontrolling

2 unchanged sentences

Balance at December 31, 2023 $ 1,332 $ 489,156 $ ( 19,957 ) $ ( 45,886 ) $ 655 $ ( 276,709 ) $ ( 1,257 ) $ 147,334

Net income (loss) for first quarter 2023 — — — — — 6,040 ( 7 ) 6,033

Net income for first quarter 2024

— — — — — 915 — 915

Translation adjustment, net of taxes of $ 0

1 unchanged sentence

Other comprehensive income

Comprehensive income 7,575

— — — — 237 — — 237

Comprehensive loss

Equity-based compensation

2 unchanged sentences

Balance at March 31, 2024

Net income (loss) for second quarter 2023 — — — — — 18,215 ( 18 ) 18,197

Translation adjustment,

net of taxes of $ 0

$ 1,343 $ 488,440 $ ( 19,957 ) $ ( 47,520 ) $ 892 $ ( 275,794 ) $ ( 1,257 ) $ 146,147

Other comprehensive income — — — — 207 — — 207

Comprehensive income 19,449

Equity-based compensation — 1,507 — — — — — 1,507

Other 2 ( 52 ) — — — — ( 2 ) ( 52 )

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.

Par Value Additional Paid-In

1 unchanged sentence

Stock Accumulated Other

Comprehensive Loss Retained

Comprehensive

Income (Loss)

Deficit Noncontrolling

2 unchanged sentences

Balance at December 31, 2022

$ 1,318 $ 477,820 $ ( 19,957 ) $ ( 48,991 ) $ ( 72 ) $ ( 302,493 ) $ ( 1,228 ) $ 106,397

Net income (loss) for first quarter 2023

— — — — — 6,040 ( 7 ) 6,033

Translation adjustment, net of taxes of $ 0

— — — 1,421 — — — 1,421

Other comprehensive income

— — — — 121 — — 121

Comprehensive income 7,575

Equity compensation expense — 1,104 — — — — — 1,104

Other 7 ( 673 ) — — — — ( 10 ) ( 676 )

Balance at March 31, 2022 $ 1,308 $ 476,055 $ ( 19,957 ) $ ( 46,740 ) $ — $ ( 302,612 ) $ ( 1,152 ) $ 106,902

Net income (loss) for second quarter 2022 — — — — — 1,745 ( 20 ) 1,725

Translation adjustment, net of taxes of $ 0

Equity-based compensation (1)

— 3,514 — — — — — 3,514

Comprehensive loss ( 1,689 )

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

Other 7 ( 1,341 ) — — — — 1 ( 1,333 )

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

Balance at March 31, 2023

$ 1,325 $ 479,993 $ ( 19,957 ) $ ( 47,570 ) $ 49 $ ( 296,453 ) $ ( 1,234 ) $ 116,153

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)

Nine Months Ended

September 30,

Three Months Ended

Operating activities:

2 unchanged sentences

Depreciation, amortization, and accretion 8,755 8,670

Impairment and other charges 777 2,262

Loss on investments

(Gain) loss on investments

( 2,795 ) 505

Equity-based compensation expense 1,623 1,276

Provision for credit losses 190 31

Recovery of credit losses

( 115 ) ( 21 )

Amortization and expense of financing costs 380 884

Expense unamortized finance costs

Insurance recoveries associated with damaged equipment — ( 2,850 )

Gain on sale of assets ( 29 ) ( 170 )

Provision (benefit) for deferred taxes

( 805 ) ( 66 )

Other non-cash credits ( 553 ) ( 100 )

4 unchanged sentences

Trade accounts payable and accrued expenses ( 5,577 ) ( 11,179 )

Other 1,133 ( 1,768 )

Net cash provided by operating activities 51,331 25,948

Net cash provided by (used in) operating activities

( 13,816 ) 8,985

Investing activities:

2 unchanged sentences

Proceeds from insurance recoveries associated with damaged equipment — 2,850

Purchase of investments

Other investing activities ( 172 ) ( 1,552 )

4 unchanged sentences

Payments on financing lease obligations ( 277 ) ( 258 )

Net cash used in financing activities ( 1,894 ) ( 2,771 )

Shares withheld for taxes on equity-based compensation ( 2,339 ) —

Debt issuance costs and other financing activities ( 5,277 ) —

Net cash provided by financing activities

Effect of exchange rate changes on cash ( 330 ) 167

8 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, and production well testing.

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

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.

In addition to providing products and services to the oil and gas industry and calcium chloride for diverse applications, TETRA is expanding into the low-carbon energy market with chemistry expertise, key mineral acreage, and global infrastructure, helping to meet the demand for sustainable energy in the twenty-first century.

We were incorporated in Delaware in 1981.

Our products and services are delivered through two reporting segments – Completion Fluids & Products Division and Water & Flowback Services Division.

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.

Calcium chloride is used in the oil and gas industry, and also has broad industrial applications to the agricultural, road, food and beverage, and lithium production markets.

Our Completion Fluids & Products Division also markets TETRA PureFlow, an ultra-pure zinc bromide, as well as TETRA PureFlow Plus, an ultra-pure zinc bromide/zinc chloride blend, to battery technology companies.

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

The Division also provides frac flowback, production well testing, and other associated services in many of the major oil and gas producing regions in the United States, as well as in oil and gas basins in certain countries in Latin America, Europe, and the Middle East.

Unless the context requires otherwise, when we refer to “we,” “us,” and “our,” we are describing TETRA Technologies, Inc.

3 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 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.

See Note 2 - “Discontinued Operations” for further information.

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

Operating results for the period ended March 31, 2024 are not necessarily indicative of results that may be expected for the twelve months ended December 31, 2024.

The accompanying unaudited consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the U.S.

3 unchanged sentences

These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2023 and notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2024 (the “ 202 3 Annual Report ”).

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.

Mineral Resources Arrangement

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 $ 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.

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, 2023 included in our 2023 Annual Report .

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

There have been no significant changes in our accounting policies or the application thereof during the first quarter of 2024.

Use of Estimates

2 unchanged sentences

Actual results could differ from those estimates, and such differences could be material.

Reclassifications

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

The impact of reclassifications was not significant to the prior year's overall presentation.

Mineral Resources Arrangement

In June 2023, we entered into a memorandum of understanding (“MOU”) with Saltwerx LLC (“Saltwerx”), an indirect wholly owned subsidiary of ExxonMobil Corporation, relating to a newly formed Brine Unit and potential bromine and lithium production from brine produced from the unit.

We completed an initial preliminary economic assessment in early 2023 for a bromine extraction plant.

On January 8, 2024, we announced the completion of a technical resources report for our Brine Unit in Arkansas.

During the three months ended March 31, 2024, we capitalized approximately $ 4.0 million of costs associated with the development of our properties in Arkansas.

We recognized $ 0.7 million of expense during the three months ended March 31, 2023 for exploration and pre-development costs representing expenditures incurred to evaluate potential future development of our lithium and bromine properties in Arkansas.

Foreign Currency Translation

2 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) 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.

Foreign currency exchange (gains) losses are included in other (income) expense, net and totaled $( 0.2 ) million and $ 0.2 million during the three months ended March 31, 2024 and March 31, 2023, respectively.

Fair Value Measurements

5 unchanged sentences

Supplemental cash flow information is as follows:

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

1 unchanged sentence

Income taxes paid $ 433 $ 1,358

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(in thousands)

1 unchanged sentence

New Accounting Pronouncements

Standards adopted during 2023

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

Measurement of Credit Losses on Financial Instruments”.

ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the previously-used incurred loss methodology, which will result in the more timely recognition of losses on financial instruments not accounted for at fair value through net income.

The provisions require credit impairments to be measured over the contractual life of an asset and developed with consideration for past events, current conditions, and forecasts of future economic information.

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.

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

The adoption of this standard did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)”, which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued.

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

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.

NOTE 2 – DISCONTINUED OPERATIONS

On March 1, 2018, we closed a series of related transactions that resulted in the disposition of our Offshore Division, consisting of our Offshore Services and Maritech segments.

Our former Offshore Division is reported as discontinued operations for all periods presented.

Our consolidated balance sheets and consolidated statements of operations report discontinued operations separate from continuing operations.

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 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:

Reconciliation of the Line Items Constituting Pretax Loss from Discontinued Operations to the After-Tax Loss from Discontinued Operations

(in thousands, unaudited)

Three Months Ended

September 30, 2022

Offshore Services

Major classes of line items constituting income from discontinued operations

General and administrative expense $ 510

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

Major classes of line items constituting income from discontinued operations

Cost of revenues $ 54 $ — $ 54

General and administrative expense 533 — 533

Other income, net — ( 28 ) ( 28 )

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

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)

September 30, 2023

Offshore Services Maritech Total

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

Trade payables $ 319 $ — $ 319

Accrued liabilities and other — 95 95

Total liabilities associated with discontinued operations $ 319 $ 95 $ 414

December 31, 2022

Offshore Services Maritech Total

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

Trade payables $ 319 $ — $ 319

Accrued liabilities and other 506 95 601

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

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 and interim reporting periods beginning after December 15, 2024, 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 as the standards expand disclosures only.

NOTE 2 – REVENUE FROM CONTRACTS WITH CUSTOMERS

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.

Our contract asset balances, primarily associated with contractual invoicing milestones and/or customer documentation requirements, were $ 25.4 million and $ 30.6 million as of March 31, 2024 and December 31, 2023, 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 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 $ 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 balances were $ 5.8 million and $ 3.1 million as of March 31, 2024 and December 31, 2023, 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 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 recognized approximately $ 0.1 million and $ 0.7 million of revenue during the three months ended March 31, 2024 and March 31, 2023, respectively, deferred in unearned income as of the beginning of the period.

During the three months ended March 31, 2024 and March 31, 2023, contract costs were not significant.

We disaggregate revenue from contracts with customers into Product Sales and Services within each segment, as noted in our two reportable segments in Note 9 - “Industry Segments.” In addition, we disaggregate revenue from contracts with customers by geography based on the following table below.

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

(in thousands)

12 unchanged sentences

NOTE 3 – INVENTORIES

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

September 30, 2023 December 31, 2022

Components of inventories as of March 31, 2024 and December 31, 2023 are as follows:

March 31, 2024 December 31, 2023

(in thousands)

7 unchanged sentences

NOTE 4 – INVESTMENTS

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

September 30, 2023 December 31, 2022

Our investments as of March 31, 2024 and December 31, 2023 consist of the following:

March 31, 2024 December 31, 2023

(in thousands)

5 unchanged sentences

Total Investments $ 20,386 $ 17,354

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 September 30, 2023.

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.

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

CCLP) as of March 31, 2024.

CSI Compressco was acquired by Kodiak Gas Services, Inc.

KGS) (“Kodiak”) on April 1, 2024.

See Note 10 - “Subsequent Events” for further information.

CarbonFree Chemicals Holdings LLC (“CarbonFree”) is a carbon capture company with patented technologies that capture CO 2 and mineralize emissions to make commercial, carbon-negative chemicals.

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

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.

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

During the three month period ended March 31, 2024, the convertible note agreement was amended and, in connection with that amendment, note holders agreed to defer their right to electively convert the convertible notes to common units of CarbonFree (“CarbonFree Units”) for two years .

In exchange for the amendment, we received CarbonFree Units representing less than 1 % of the CarbonFree Units outstanding as of March 31, 2024.

The CarbonFree Units are not publicly traded and may not be offered, sold, transferred or pledged until such common units are registered pursuant to an effective registration statement or pursuant to an exemption from registration.

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

We are party to agreements whereby Standard Lithium Ltd.

SLI) (“Standard Lithium”) has the rights to produce and extract lithium in a portion of our Arkansas leases.

The Company received stock of Standard Lithium under the terms of its arrangements.

See Note 7 - “Fair Value Measurements” for further information.

NOTE 5 – LONG-TERM DEBT AND OTHER BORROWINGS

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

Consolidated long-term debt as of March 31, 2024 and December 31, 2023 consists of the following:

Scheduled Maturity March 31, 2024 December 31, 2023

(in thousands)

Term Credit Agreement (1)

September 10, 2025 $ 156,748 $ 154,570

Asset-Based Credit Agreement (2)

May 31, 2025 — 1,885

Argentina Credit Agreement October 19, 2023 1,900 —

Swedish Credit Facility December 31, 2023 11 3

Total debt 158,659 156,458

Less current portion ( 1,911 ) ( 3 )

January 12, 2030 $ 179,394 $ 157,505

Total long-term debt $ 179,394 $ 157,505

(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 $ 0.7 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.

(1) Net of unamortized discount of $ 5.5 million and $ 2.2 million as of March 31, 2024 and December 31, 2023, respectively, and net of unamortized deferred financing costs of $ 5.1 million and $ 3.3 million as of March 31, 2024 and December 31, 2023, respectively.

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

The Term Credit Agreement was amended in June 2023 to remove references to LIBOR and Eurodollar rates.

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 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.

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.

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 “Term Credit Agreement”) that refinanced the Company’s prior credit facility outstanding as of December 31, 2023 and provided capital to advance the Company’s Arkansas bromine processing project.

Pricing on the 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 interest rate per annum on borrowings under the Term Credit Agreement is 11.17 % as of March 31, 2024 and the maturity date of the Term Credit Agreement is January 12, 2030.

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.

As a result of termination of the prior credit facility, a loss of $ 5.5 million was recognized during the three-month period ended March 31, 2024 primarily for unamortized deferred financing costs.

The 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 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 Term Credit Agreement) of not less than $50.0 million at all times.

All obligations under the 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 our ABL 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 beginning with the financial statements for the year ending December 31, 2024.

The 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.

ABL Credit Agreement

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.

As of March 31, 2024, 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 September 30, 2023, we had no balance outstanding and $ 11.5 million in letters of credit and guarantees under our ABL Credit Agreement.

As of March 31, 2024, we had no balance outstanding and $ 0.5 million in letters of credit and guarantees under our ABL Credit Agreement.

Deferred financing costs of $ 0.5 million and $ 0.6 million as of March 31, 2024 and December 31, 2023, respectively, were classified as other long-term assets on the accompanying consolidated balance sheet as there was no outstanding balance on 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 $ 79.5 million under this agreement.

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) SOFR 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 %.

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) SOFR (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.

As of March 31, 2024, the interest rate per annum on borrowings under the ABL Credit Agreement is 8.75 %.

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.

Argentina Credit Agreement

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 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 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 September 30, 2023, we had a nominal amount outstanding and availability of approximately $ 4.6 million under the Swedish Credit Facility.

As of March 31, 2024, we had no balance outstanding and availability of approximately $ 4.7 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 September 30, 2023, there were $ 1.4 million of letters of credit outstanding against the Finland Credit Agreement.

As of March 31, 2024, there were $ 1.5 million of letters of credit outstanding against the Finland Credit Agreement.

The Finland Credit Agreement expires on January 31, 2025 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 September 30, 2023, we are in compliance with all covenants under the credit agreements.

As of March 31, 2024, we are in compliance with all covenants under the credit agreements.

NOTE 6 – COMMITMENTS AND CONTINGENCIES

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

There have been no material developments in our legal proceedings during the quarter ended March 31, 2024.

For additional discussion of our legal proceedings, please see our 202 3 Annual Report .

Also see Note 10 - “Subsequent Events” for information related to a putative class action complaint that was filed on April 25, 2024.

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

There have been no 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 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 .

As of March 31, 2024, 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 $ 69.0 million, including $ 20.9 million for the remainder of 2024, $ 22.5 million in 2025, $ 16.0 million in 2026, $ 7.4 million in 2027 and $ 2.2 million in 2028 .

NOTE 7 – 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 September 30, 2023.

We retained an interest in CSI Compressco representing approximately 3.7 % of CSI Compressco’s outstanding common units as of March 31, 2024.

CSI Compressco was acquired by Kodiak on April 1, 2024.

See Note 10 - “Subsequent Event” for further information.

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

In addition, we receive cash and stock of Standard Lithium under the terms of our arrangements as noted in Note 5 - “Investments.”

In addition, we receive stock of Standard Lithium under the terms of our arrangements as noted in Note 4 - “Investments.”

Our investments in CSI Compressco and Standard Lithium are recorded in investments on our consolidated balance sheets based on the quoted market stock price (Level 1 fair value measurements).

The stock component of consideration received from Standard Lithium 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.

The stock component of consideration received from Standard Lithium was 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.

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

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 (Level 3 fair value measurement).

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

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

1 unchanged sentence

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

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

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

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

The change in our investments for the three-month periods ended March 31, 2024 and 2023 are as follows:

Three Months Ended March 31, 2024

Fair Value Measurements Using

Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Unobservable Inputs

(Level 1) (Level 3) Total

(in thousands)

Balance at beginning of period $ 6,139

Change in fair value of embedded option

Change in fair value of convertible note, excluding embedded option

Balance at end of period $ 6,563

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

Investment balance at beginning of period

$ 10,154 $ 7,200 $ 17,354

Unrealized gain on equity securities

2,994 — 2,994

Unrealized loss on embedded option

— ( 199 ) ( 199 )

Unrealized gain on convertible note, excluding embedded option

Investment balance at end of period

$ 13,148 $ 7,238 $ 20,386

Three Months Ended March 31, 2023

Fair Value Measurements Using

Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Unobservable Inputs

(Level 1) (Level 3) Total

(in thousands)

Investment balance at beginning of period

$ 8,147 $ 6,139 $ 14,286

Unrealized loss on equity securities

( 184 ) — ( 184 )

Unrealized loss on embedded option

— ( 321 ) ( 321 )

Unrealized gain on convertible note, excluding embedded option

Investment balance at end of period

$ 7,963 $ 5,939 $ 13,902

Recurring fair value measurements by valuation hierarchy as of March 31, 2024 and December 31, 2023 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 September 30, 2023 (Level 1) (Level 2) (Level 3)

Description March 31, 2024 (Level 1) (Level 2) (Level 3)

(in thousands)

13 unchanged sentences

Investment in Standard Lithium 1,616 1,616 — —

Other investments

Investments $ 17,354

During the second quarter of 2023, 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, including the rent rate per square foot (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 our Term Credit Agreement, ABL Credit Agreement, Argentina Credit Agreement, and Swedish Credit Agreement approximate their carrying amounts.

The fair values of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings and long-term debt approximate their carrying amounts.

See Note 5 - “Long-Term Debt and Other Borrowings” for further discussion.

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

(in thousands)

4 unchanged sentences

132,123 129,975

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 9 – INDUSTRY SEGMENTS

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

(in thousands)

14 unchanged sentences

Water & Flowback Services Division 721 6,378

Interdivision Eliminations — 3 — 9

Corporate Overhead (1)

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

(in thousands)

1 unchanged sentence

Depreciation and amortization 81 109

Impairments and other charges — — 777 —

Interest expense 6,145 5,460

Loss on debt extinguishment

Other general corporate (income) expense, net ( 3,645 ) 658

Total $ 19,218 $ 17,286

NOTE 10 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q 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 and event described below.

On April 1, 2024, Kodiak completed its acquisition of CSI Compressco.

In exchange for our 5.2 million CSI Compressco common units, we received approximately 450,000 shares of Kodiak common stock.

On April 25, 2024, a purported stockholder of the Company filed a putative class action complaint in the Delaware Court of Chancery naming as defendants all current members of the Board, the Company and the Rights Agent.

The litigation is captioned Webb, et al.

Murphy, et al., C.A.

2024-0445 (Del.

The plaintiff alleges that the Board breached their fiduciary duties by adopting and maintaining the Company’s Tax Benefits Preservation Plan (the “Tax Plan”).

The plaintiff seeks, among other relief, to enjoin the Tax Plan.

We believe that the plaintiff’s claims lack merit.

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