Business Segment, Geographic and Major Customer Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Business Segment, Geographic and Major Customer Information

Business Segment, Geographic and Major Customer Information

Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision-maker in deciding how to allocate resources and assess performance. The operations of the Company are categorized into the following reportable segments: CT and DA.

Chemistry Technologies. The CT segment includes green specialty chemistries, logistics and technology services, which enable its customers to pursue improved efficiencies and performance throughout the life cycle of their wells, helping customers improve their environmental, social and governance (“ESG) and operational goals. Customers of the CT segment include major integrated oil and gas companies, oilfield services companies, independent oil and gas companies, national and state-owned oil companies, and international supply chain management companies.

Data Analytics. The DA segment, created in the second quarter of 2020 in conjunction with the acquisition of JP3 on May 18, 2020, includes the design, development, production, sale and support of equipment and services that create and provide valuable information on the composition and properties of energy customers’ hydrocarbon fluids. The company markets products and services that support in-line data analysis of hydrocarbon components and properties. Customers of the DA segment span across the entire oil and gas market, from upstream production to midstream facilities to refineries and distribution networks

Performance is based upon a variety of criteria. The primary financial measure is segment operating income (loss). Various functions, including certain sales and marketing activities and general and administrative activities, are provided centrally by the corporate office. Costs associated with corporate office functions, other corporate income and expense items, and income taxes are not allocated to the reportable segment.

Summarized financial information of the reportable segments is as follows (in thousands):

As of and for the three months ended September 30,	Chemistry Technologies		Data Analytics		Corporate and Other		Total
2022
Revenue from external customers	$	13,511	$	1,695	$	—	$	15,206
Revenue from related party	30,417		—		—		30,417
Change in fair value of contract consideration convertible notes	4,250		—		—		4,250
Loss from operations	(10,603)		(745)		(4,931)		(16,279)
Depreciation and amortization	162		14		1		177
Additions to long-lived assets	25		33		112		170
2021
Revenue from external customers	$	8,044	$	803	$	—	$	8,847
Revenue from related party	1,332		—		—		1,332
Income (loss) from operations	4,399		(1,071)		(2,696)		632
Depreciation and amortization	215		17		1		233
Additions to long-lived assets	—		—		—		—

As of and for the nine months ended September 30,	Chemistry Technologies		Data Analytics		Corporate and Other		Total
2022
Revenue from external customers	$	34,933	$	3,479	$	—	$	38,412
Revenue from related party	49,462		—		—		49,462
Change in fair value of contract consideration convertible notes	(9,016)		—		—		(9,016)
Loss from operations	(1,716)		(2,751)		(14,057)		(18,524)
Depreciation and amortization	507		45		2		554
Additions to long-lived assets	30		33		112		175
2021
Revenue from external customers	$	26,033	$	3,749	$	—	$	29,782
Revenue from related party	1,332		—		—		1,332
Loss from operations	(3,009)		(2,138)		(9,926)		(15,073)
Depreciation and amortization	739		52		2		793
Additions to long-lived assets	31		—		—		31

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

	September 30, 2022		December 31, 2021
Chemistry Technologies	$	150,160	$	34,387
Data Analytics	7,215		7,329
Corporate and Other	6,644		8,528
Total assets	$	164,019	$	50,244

The increase in Chemistry Technologies assets is primarily due to contact assets of $81.1 million.

Geographic Information

Revenue by country is based on the location where services are provided and products are sold. No individual countries other than the U.S. and the United Arab Emirates (“UAE”) accounted for more than 10% of revenue. Revenue by geographic location is as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
U.S. (1)	$	42,670	$	8,094	$	78,959	$	24,624
UAE	2,242		1,319		6,692		3,741
Other countries	711		766		2,223		2,749
Total revenue	$	45,623	$	10,179	$	87,874	$	31,114

(1) Includes revenue from related party

Long-lived assets held in countries other than the U.S. are not considered material to the consolidated financial statements.

Major Customers

Revenue from major customers, as a percentage of consolidated revenue, is as follows (in thousands):

Three months ended September 30,	Revenue		% of Total Revenue
2022
Customer A (Related Party)	$	30,417	66.7	%
2021
Customer C	$	3,041	29.9	%
Customer D	1,332		13.1	%

Nine months ended September 30,	Revenue		% of Total Revenue
2022
Customer A (Related Party)	$	48,074	54.7	%
Customer B	10,905		12.4	%
2021
Customer C	$	7,701	24.8	%
Customer D	4,067		13.1	%

The majority of the Company’s revenue consists predominantly of customers within the oil and gas industry. Customers within the oil and gas industry include ProFrac and other oilfield services companies, integrated oil and natural gas companies, independent oil and natural gas companies, and state-owned national oil companies. The concentration with ProFrac and in the oil and gas industry increases credit and business risk.