UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | |||||||||||
FORM | |||||||||||
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||
For the fiscal year ended | |||||||||||
or | |||||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||
For the transition period from to | |||||||||||
Commission File Number |
FLOTEK INDUSTRIES, INC. | ||
(Exact name of registrant as specified in its charter) |
(State of other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Forward-Looking Statements | ||||||||
PART I | ||||||||
Item 1. | Business | |||||||
Item 1A. | Risk Factors | |||||||
Item 1B. | Unresolved Staff Comments | |||||||
Item 2. | Properties | |||||||
Item 3. | Legal Proceedings | |||||||
Item 4. | Mine Safety Disclosures | |||||||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |||||||
Item 6. | [Reserved] | |||||||
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||||
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | |||||||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |||||||
Item 9B. | Other Information | |||||||
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | |||||||
PART III | ||||||||
Item 10. | Directors, Executive Officers and Corporate Governance | |||||||
Item 11. | Executive Compensation | |||||||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |||||||
Item 13. | Certain Relationships and Related Transactions, and Director Independence | |||||||
Item 14. | Principal Accountant Fees and Services | |||||||
PART IV | ||||||||
Item 15. | Exhibits and Financial Statement Schedules | |||||||
Item 16. | Form 10-K Summary | |||||||
SIGNATURES |
Segment | Owned/Leased | Location | ||||||
Chemistry Technologies | Owned | Marlow, Oklahoma | ||||||
Chemistry Technologies | Owned | Raceland, Louisiana | ||||||
Chemistry Technologies | Leased | Dubai, United Arab Emirates | ||||||
Chemistry Technologies | Leased | Calgary, Alberta | ||||||
Chemistry Technologies | Leased | Raceland, Louisiana | ||||||
Chemistry Technologies | Leased | Houston, Texas | ||||||
Data Analytics | Leased | Austin, Texas |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(2) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a)) | |||||||||||||||||
(a) | (b) | (c) | ||||||||||||||||||
Equity compensation plans approved by security holders | 5,849,554 | $ | 1.16 | 2,767,906 | ||||||||||||||||
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | |||||||||
October 1, 2022 to October 31, 2022 | 1,624 | $1.00 | |||||||||
November 1, 2022 to November 30, 2022 | — | — | |||||||||
December 1, 2022 to December 31, 2022 | 27,759 | $1.12 | |||||||||
Total | 29,383 |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenue | |||||||||||
Revenue from external customers | $ | 54,344 | $ | 39,627 | |||||||
Revenue from related party | 81,748 | 3,641 | |||||||||
Total revenues | 136,092 | 43,268 | |||||||||
Cost of sales | 142,792 | 40,012 | |||||||||
Cost of sales % | 104.9 | % | 92.5 | % | |||||||
Gross profit (loss) | (6,700) | 3,256 | |||||||||
Gross profit (loss) % | (4.9) | % | 7.5 | % | |||||||
Selling, general and administrative | 27,124 | 20,166 | |||||||||
Selling, general and administrative % | 19.9 | % | 46.6 | % | |||||||
Depreciation | 734 | 1,011 | |||||||||
Research and development | 4,438 | 5,537 | |||||||||
Gain on disposal of property and equipment | (2,916) | (94) | |||||||||
Gain on lease termination | (584) | — | |||||||||
Gain in fair value of contract consideration convertible notes payable | (75) | — | |||||||||
Impairment of goodwill | — | 8,092 | |||||||||
Loss from operations | (35,421) | (31,456) | |||||||||
Operating margin % | (26.0) | % | (72.7) | % | |||||||
Paycheck protection plan loan forgiveness | — | 881 | |||||||||
Interest expense and other income, net | (6,906) | 9 | |||||||||
Loss before income taxes | (42,327) | (30,566) | |||||||||
Income tax benefit | 22 | 40 | |||||||||
Net loss | $ | (42,305) | $ | (30,526) | |||||||
Net loss % | (31.1) | % | (70.6) | % | |||||||
Years ended December 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Revenue from external customers | $ | 48,960 | $ | 35,288 | ||||||||||
Revenue from related party | 81,618 | 3,641 | ||||||||||||
Loss from operations | (14,729) | (5,466) | ||||||||||||
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenue from external customers | $ | 5,384 | $ | 4,339 | |||||||
Revenue from related party | 130 | — | |||||||||
Loss from operations | (2,877) | (12,168) | |||||||||
Years ended December 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Loss from operations | $ | (17,815) | $ | (13,822) | ||||||||||
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Net cash used in operating activities | $ | (44,632) | $ | (25,840) | |||||||
Net cash provided by investing activities | 5,331 | 112 | |||||||||
Net cash provided by (used in) financing activities | 38,267 | (372) | |||||||||
Effect of changes in exchange rates on cash and cash equivalents | 100 | 100 | |||||||||
Net change in cash, cash equivalents and restricted cash | $ | (934) | $ | (26,000) |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net of allowance for doubtful accounts of $ | |||||||||||
Accounts receivable, related party | |||||||||||
Inventories, net | |||||||||||
Other current assets | |||||||||||
Current contract assets | |||||||||||
Assets held for sale | |||||||||||
Total current assets | |||||||||||
Long-term contract assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Deferred tax assets, net | |||||||||||
Other long-term assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Income taxes payable | |||||||||||
Interest payable | |||||||||||
Current portion of operating lease liabilities | |||||||||||
Current portion of finance lease liabilities | |||||||||||
Current portion of long-term debt | |||||||||||
Convertible notes payable | |||||||||||
Contract consideration convertible notes payable | |||||||||||
Total current liabilities | |||||||||||
Deferred revenue, long-term | |||||||||||
Long-term operating lease liabilities | |||||||||||
Long-term finance lease liabilities | |||||||||||
Long-term debt | |||||||||||
TOTAL LIABILITIES | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive income | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Treasury stock, at cost; | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenue: | |||||||||||
Revenue from external customers | $ | $ | |||||||||
Revenue from related party | |||||||||||
Total revenues | |||||||||||
Cost of sales | |||||||||||
Gross profit (loss) | ( | ||||||||||
Operating costs and expenses: | |||||||||||
Selling, general, and administrative | |||||||||||
Depreciation | |||||||||||
Research and development | |||||||||||
Gain on disposal of property and equipment | ( | ( | |||||||||
Gain on lease termination | ( | ||||||||||
Gain on fair value of contract consideration convertible notes payable | ( | ||||||||||
Impairment of goodwill | |||||||||||
Total operating costs and expenses | |||||||||||
Loss from operations | ( | ( | |||||||||
Other income (expense): | |||||||||||
Paycheck protection plan loan forgiveness | |||||||||||
Interest expense | ( | ( | |||||||||
Other income, net | |||||||||||
Total other income (expense) | ( | ||||||||||
Loss before income taxes | ( | ( | |||||||||
Income tax benefit | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Loss per common share: | |||||||||||
Basic | $ | ( | $ | ( | |||||||
Diluted | $ | ( | $ | ( | |||||||
Weighted average common shares: | |||||||||||
Weighted average common shares used in computing basic loss per common share | |||||||||||
Weighted average common shares used in computing diluted loss per common share |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Net loss | $ | ( | $ | ( | |||||||
Other comprehensive income: | |||||||||||
Foreign currency translation adjustment | |||||||||||
Comprehensive Loss | $ | ( | $ | ( | |||||||
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Change in fair value of contingent consideration | ( | ( | |||||||||
Change in fair value of contract consideration convertible notes payable | ( | ||||||||||
Amortization of convertible note issuance cost | |||||||||||
Paid-in-kind interest expense | |||||||||||
Amortization of contract assets | |||||||||||
Depreciation | |||||||||||
Provision for doubtful accounts, net of recoveries | ( | ||||||||||
Inventory purchase commitment settlement | ( | ||||||||||
Provision for excess and obsolete inventory | |||||||||||
Impairment of goodwill | |||||||||||
Gain on sale of property and equipment | ( | ( | |||||||||
Gain on lease termination | ( | ||||||||||
Non-cash lease expense | |||||||||||
Stock compensation expense | |||||||||||
Deferred income tax benefit | ( | ( | |||||||||
Paycheck protection plan loan forgiveness | ( | ||||||||||
Changes in current assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Accounts receivable, related party | ( | ( | |||||||||
Inventories | ( | ||||||||||
Income taxes receivable | |||||||||||
Other assets | ( | ( | |||||||||
Contract assets | ( | ||||||||||
Accounts payable | |||||||||||
Accrued liabilities | ( | ( | |||||||||
Operating lease liabilities | ( | ( | |||||||||
Income taxes payable | ( | ||||||||||
Interest payable | |||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Proceeds from sale of assets | |||||||||||
Net cash provided by investing activities | |||||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of convertible notes | |||||||||||
Payment of issuance costs of convertible notes | ( | ||||||||||
Proceeds from issuance of warrants | |||||||||||
Payment of issuance costs of stock warrants | ( | ||||||||||
Payments to tax authorities for shares withheld from employees | ( | ( | |||||||||
Proceeds from issuance of stock | |||||||||||
Payments for finance leases | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Effect of changes in exchange rates on cash and cash equivalents | |||||||||||
Net change in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash and cash equivalents at the beginning of period | |||||||||||
Restricted cash at the beginning of period | |||||||||||
Cash and cash equivalents and restricted cash at beginning of period | |||||||||||
Cash and cash equivalents at end of period | |||||||||||
Restricted cash at the end of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ |
Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares Issued | Par Value | Shares | Cost | ||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock issued under employee stock purchase plan | — | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock granted | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Restricted stock forfeited | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Restricted stock units vested | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Shares withheld to cover taxes | ( | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Issuance of stock warrants, net of transaction fee | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Equity contribution | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Conversion of notes to common stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | ( | $ | $ | $ | ( | $ |
Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares Issued | Par Value | Shares | Cost | ||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock issued under employee stock purchase plan | — | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock granted | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Restricted stock forfeited | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Restricted units vested | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Shares withheld to cover taxes | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Other (1) | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | ( | $ | $ | $ | ( | $ |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Balance, beginning of year | $ | $ | |||||||||
Charges to provision for doubtful accounts, net of recoveries | ( | ||||||||||
Write-offs | ( | ( | |||||||||
Balance, end of year | $ | $ |
Buildings and leasehold improvements | |||||
Machinery and equipment | |||||
Furniture and fixtures | |||||
Land improvements | |||||
Transportation equipment | |||||
Computer equipment and software |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenue: | |||||||||||
Products (1) | $ | $ | |||||||||
Services | |||||||||||
$ | $ | ||||||||||
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Cost of sales: | |||||||||||
Tangible goods sold | $ | $ | |||||||||
Services | |||||||||||
Other | $ | $ | |||||||||
$ | $ |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Cost of sales: | |||||||||||
Cost of sales for external customers | $ | $ | |||||||||
Cost of sales for related parties | |||||||||||
$ | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Contract assets | $ | $ | |||||||||
Less accumulated amortization | ( | ||||||||||
Contract assets, net | |||||||||||
Less current contract assets | ( | ||||||||||
Contract assets, long term | $ | $ |
Years ending December 31, | Amortization | ||||||||||
2023 | $ | ||||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
Thereafter through May 2032 | |||||||||||
Total contract assets | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Raw materials | $ | $ | |||||||||
Finished goods | |||||||||||
Inventories | |||||||||||
Less reserve for excess and obsolete inventory | ( | ( | |||||||||
Inventories, net | $ | $ |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Balance, beginning of year | $ | $ | |||||||||
Charged to provisions | |||||||||||
Deductions for sales and disposals | ( | ( | |||||||||
Balance, end of the year | $ | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Land | $ | $ | |||||||||
Land improvements | |||||||||||
Buildings and leasehold improvements | |||||||||||
Machinery and equipment | |||||||||||
Furniture and fixtures | |||||||||||
Transportation equipment | |||||||||||
Computer equipment and software | |||||||||||
Property and equipment | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Operating lease expense | $ | $ | |||||||||
Finance lease expense: | |||||||||||
Amortization of assets | |||||||||||
Interest on lease liabilities | |||||||||||
Total finance lease expense | |||||||||||
Short-term lease expense | |||||||||||
Total lease expense | $ | $ | |||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
Operating cash flows from finance leases | |||||||||||
Financing cash flows from finance leases |
Years ending December 31, | Operating Leases | Finance Leases | ||||||||||||
2023 | $ | $ | ||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
2026 | ||||||||||||||
2027 | ||||||||||||||
Thereafter | ||||||||||||||
Total lease payments | $ | $ | ||||||||||||
Less: Interest | ( | ( | ||||||||||||
Present value of lease liabilities | $ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Operating Leases | |||||||||||
Operating lease right-of-use assets | $ | $ | |||||||||
Current portion of operating lease liabilities | $ | $ | |||||||||
Long-term operating lease liabilities | |||||||||||
Total operating lease liabilities | $ | $ | |||||||||
Finance Leases | |||||||||||
Property and equipment | $ | $ | |||||||||
Accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ | |||||||||
Current portion of finance lease liabilities | $ | $ | |||||||||
Long-term finance lease liabilities | |||||||||||
Total finance lease liabilities | $ | $ | |||||||||
Weighted Average Remaining Lease Term | |||||||||||
Operating leases | |||||||||||
Finance leases | |||||||||||
Weighted Average Discount Rate | |||||||||||
Operating leases | % | % | |||||||||
Finance leases | % | % |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Severance costs (see Note 13, “Commitments and Contingencies”) | $ | $ | |||||||||
Loss on purchase commitments (Note 13, “Commitments and Contingencies”) | |||||||||||
Payroll and benefits | |||||||||||
Legal costs | |||||||||||
Contingent liability for earn-out provision | |||||||||||
Deferred revenue, current | |||||||||||
Taxes other than income taxes | |||||||||||
Other | |||||||||||
Total current accrued liabilities | $ | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Flotek PPP loan | $ | $ | |||||||||
Less current maturities | ( | ( | |||||||||
Total long-term debt, net of current portion | $ | $ |
December 31, | December 31, | |||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | 2022 | Level 1 | Level 2 | Level 3 | 2021 | |||||||||||||||||||||||||||||||||||||
Contingent earnout consideration | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
Initial ProFrac Agreement contract consideration convertible notes | ||||||||||||||||||||||||||||||||||||||||||||
Amended ProFrac Agreement contract consideration convertible notes | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Risk-free interest rate | |||||||||||
Expected volatility | |||||||||||
Term until liquidation (years) | |||||||||||
Stock price | $ | $ | |||||||||
Discount rate |
December 31, 2022 | |||||
Risk-free interest rate | |||||
Expected volatility | |||||
Term until liquidation (years) | |||||
Stock price | $ | ||||
Discount rate |
May 17, 2022 | December 31, 2022 | ||||||||||
Risk-free interest rate | |||||||||||
Expected volatility | |||||||||||
Term until liquidation (years) | |||||||||||
Stock price | $ | $ | |||||||||
Discount rate |
Years ended December 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Balance - beginning of period | $ | $ | ||||||||||||
Transfer of Initial ProFrac Agreement contract consideration convertible notes payable from Level 2 | ||||||||||||||
Issuance of Amended ProFrac Agreement contract consideration convertible notes payable | ||||||||||||||
Increase in principle of Initial ProFrac Agreement contract consideration convertible notes payable for paid-in-kind interest | ||||||||||||||
Change in fair value of contingent earnout consideration | ( | ( | ||||||||||||
Change in fair value of Initial ProFrac Agreement contract consideration convertible notes payable | ||||||||||||||
Change in fair value of Amended ProFrac Agreement contract consideration convertible notes payable | ( | |||||||||||||
Balance - end of period | $ | $ |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Current: | |||||||||||
Federal | $ | $ | |||||||||
State | |||||||||||
Foreign | |||||||||||
Total current expense | |||||||||||
Deferred: | |||||||||||
Federal | |||||||||||
State | ( | ( | |||||||||
Foreign | |||||||||||
Total deferred benefit | ( | ( | |||||||||
Income tax benefit | $ | ( | $ | ( |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
United States | $ | ( | $ | ( | |||||||
Foreign | ( | ( | |||||||||
Loss before income taxes | $ | ( | $ | ( |
Years ended December 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
U.S. federal statutory tax rate | % | % | ||||||||||||
State income taxes, net of federal benefit | ||||||||||||||
Non-U.S. income taxed at different rates | ( | |||||||||||||
Increase in tax benefit related to stock-based awards | ( | |||||||||||||
Increase in valuation allowance | ( | ( | ||||||||||||
Permanent differences related to CARES Act | ||||||||||||||
Other | ||||||||||||||
Effective income tax rate | % | % |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | $ | $ | |||||||||
Intangible assets | |||||||||||
Tax credit carryforwards | |||||||||||
Goodwill | |||||||||||
Property and equipment | |||||||||||
Lease liability | |||||||||||
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Allowance for doubtful accounts | |||||||||||
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Total gross deferred tax assets | |||||||||||
Valuation allowance | ( | ( | |||||||||
Total deferred tax assets, net | |||||||||||
Deferred tax liabilities: | |||||||||||
ROU asset | ( | ( | |||||||||
Prepaid insurance and other | ( | ( | |||||||||
Total gross deferred tax liabilities | ( | ( | |||||||||
Net deferred tax assets | $ | $ |
Risk-free interest rate | |||||
Expected volatility | |||||
Term until liquidation (years) | |||||
Stock price | $ | ||||
Strike price (exercise fee) | $ |
Shares | Weighted-Average Exercise Price | Weighted-Average Fair Value | |||||||||||||||
Outstanding as of December 31, 2020 | |||||||||||||||||
Granted | $ | $ | |||||||||||||||
Forfeited | ( | ||||||||||||||||
Expired | ( | ||||||||||||||||
Outstanding as of December 31, 2021 | |||||||||||||||||
Expired | ( | $ | $ | ||||||||||||||
Outstanding as of December 31, 2022 | |||||||||||||||||
Vested or expected to vest at December 31, 2022 | |||||||||||||||||
Share Options Outstanding | Share Options Currently Exercisable | Share Options Vested or Expected to Vest | |||||||||||||||
Number | |||||||||||||||||
Weighted-average exercise price | $ | $ | $ | ||||||||||||||
Aggregate intrinsic value ($000’s) | |||||||||||||||||
Weighted-average remaining contractual term in years |
Year Ended December 31, 2021 | ||||||||
Risk-free interest rate | % | |||||||
Expected volatility of common stock | % | |||||||
Expected life of options in years | ||||||||
Dividend yield | % |
Restricted Stock Shares | Shares | Weighted- Average Fair Value at Date of Grant | ||||||||||||
Non-vested at December 31, 2020 | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Non-vested at December 31, 2021 | ||||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Non-vested at December 31, 2022 | $ |
Restricted Stock Units | Units | Weighted- Average Fair Value at Date of Grant | ||||||||||||
RSUs at December 31, 2020 | $ | |||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
RSUs at December 31, 2021 | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | $ | ( | ||||||||||||
RSUs at December 31, 2022 | $ |
Year ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Numerator: | |||||||||||
Net loss for basic earnings per share | $ | ( | $ | ( | |||||||
Anti-dilutive adjustment to net income available to shareholders excluded from numerator for diluted earnings computation | |||||||||||
Paid-in-Kind interest expense on convertible notes payable and contract consideration convertible notes payable, net of tax | |||||||||||
Valuation gain on convertible notes carried at fair value, net of tax | ( | ||||||||||
Total numerator adjustment excluded from diluted earnings computation | $ | $ | |||||||||
Denominator: | |||||||||||
Basic and diluted weighted average shares outstanding | |||||||||||
Anti-dilutive incremental shares excluded from denominator for diluted earnings computation | |||||||||||
Average number of diluted shares for convertible notes payable and contract consideration convertible notes payable | |||||||||||
Average number of diluted shares for stock warrants | |||||||||||
Average number of diluted shares for stock options and restricted stock | |||||||||||
Basic and diluted loss per share | $ | ( | $ | ( |
Years ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Supplemental cash payment information: | |||||||||||
Interest paid | $ | $ | |||||||||
Income taxes received | ( | ||||||||||
Supplemental non-cash financing and investing activities: | |||||||||||
Issuance of convertible notes payable as consideration for ProFrac Agreement | $ | $ | |||||||||
Conversion of convertible notes payable to common stock | $ | ||||||||||
As of and for the years ended December 31, | Chemistry Technologies | Data Analytics | Corporate and Other | Total | |||||||||||||||||||
2022 | |||||||||||||||||||||||
Revenue from external customers | |||||||||||||||||||||||
Products | $ | $ | $ | $ | |||||||||||||||||||
Services | |||||||||||||||||||||||
Total revenue from external customers | |||||||||||||||||||||||
Revenue from related party | |||||||||||||||||||||||
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Services | |||||||||||||||||||||||
Total revenue from related parties | |||||||||||||||||||||||
Gross profit (loss) | ( | ( | |||||||||||||||||||||
Change in fair value of contract consideration convertible notes | ( | ( | |||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
Paid-in-kind interest on contract consideration convertible notes payable | |||||||||||||||||||||||
Paid-in-kind interest on convertible notes payable | |||||||||||||||||||||||
Depreciation | |||||||||||||||||||||||
Additions to long-lived assets | |||||||||||||||||||||||
2021 | |||||||||||||||||||||||
Revenue from external customers | |||||||||||||||||||||||
Product | $ | $ | $ | $ | |||||||||||||||||||
Service | |||||||||||||||||||||||
Total revenue from external customers | |||||||||||||||||||||||
Revenue from related party | |||||||||||||||||||||||
Product | |||||||||||||||||||||||
Service | |||||||||||||||||||||||
Total revenue from related parties | |||||||||||||||||||||||
Gross profit (loss) | ( | ||||||||||||||||||||||
Loss from operations (1) | ( | ( | ( | ( | |||||||||||||||||||
Depreciation | |||||||||||||||||||||||
Additions to long-lived assets |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Chemistry Technologies | $ | $ | |||||||||
Data Analytics | |||||||||||
Corporate and Other | |||||||||||
Total assets | $ | $ | |||||||||
Years ended December 31, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
U.S. (1) | $ | $ | |||||||||||||||
UAE | |||||||||||||||||
Other countries | |||||||||||||||||
Total revenue | $ | $ |
Revenue | % of Total Revenue | |||||||||||||
Year ended December 31, 2022 | ||||||||||||||
Customer A (related party - ProFrac Services, LLC) | $ | % | ||||||||||||
Customer B | % |
Year ended December 31, 2021 | ||||||||||||||
Customer B | $ | % |
Expenditure | % of Total Expenditure | |||||||||||||
Year ended December 31, 2022 | ||||||||||||||
Supplier A | $ | % | ||||||||||||
Supplier B | % | |||||||||||||
Supplier C | % |
Year ended December 31, 2021 | ||||||||||||||
Supplier C | $ | % | ||||||||||||
Supplier D | % |
Exhibit Number | Description of Exhibit | |||||||
2.1 | †† | |||||||
2.2 | †† | |||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
3.4 | ||||||||
3.5 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
4.3 | ||||||||
4.4 | ||||||||
4.5 | ||||||||
4.6 | ||||||||
10.1 | † | |||||||
10.2 | † | |||||||
10.3 | † | |||||||
10.4 | † | |||||||
10.5 | † | |||||||
10.6 | † | |||||||
10.7 | † | |||||||
10.8 | † | |||||||
10.9 | † | |||||||
10.10 | ||||||||
10.11 | *** |
10.12 | *** | |||||||
10.13 | *** | |||||||
10.14 | ||||||||
10.15 | ||||||||
10.16 | ||||||||
10.17 | *** | |||||||
10.18 | ||||||||
10.19 | † | |||||||
10.20 | † | |||||||
10.21 | † | |||||||
10.22 | † | |||||||
10.23 | † | |||||||
10.24 | † | |||||||
10.25 | † | |||||||
10.26 | † | |||||||
10.27 | † | |||||||
10.28 | † | |||||||
10.29 | † | |||||||
10.30 | † | |||||||
10.31 | † | |||||||
10.32 | † | |||||||
10.33 | †† | |||||||
10.34 |
10.35 | †† | |||||||
10.36 | † | |||||||
10.37 | † | |||||||
10.38 | † | |||||||
10.39 | †† | |||||||
21.1 | * | |||||||
23.1 | * | |||||||
31.1 | * | |||||||
31.2 | * | |||||||
32.1 | ** | |||||||
32.2 | ** | |||||||
101.INS | * | Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document | ||||||
101.SCH | * | Inline XBRL Schema Document | ||||||
101.CAL | * | Inline XBRL Calculation Linkbase Document | ||||||
101.LAB | * | Inline XBRL Label Linkbase Document | ||||||
101.PRE | * | Inline XBRL Presentation Linkbase Document | ||||||
101.DEF | * | Inline XBRL Definition Linkbase Document | ||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
* | Filed with this Form 10-K. | |||||||
** | Furnished with this Form 10-K, not filed. | |||||||
*** | Certain identified information has been excluded from this exhibit because it is not material and is the type of information that the Company customarily and actually treats as private and confidential. Redacted information is indicated by [***] | |||||||
† | Management contracts or compensatory plans or agreements. | |||||||
†† | Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules and similar attachments have been omitted. The Company hereby agrees to furnish a copy of any omitted schedule or attachment to the Securities and Exchange Commission upon request. |
FLOTEK INDUSTRIES, INC. | ||||||||
By: | /s/ Harsha V. Agadi | |||||||
Harsha V. Agadi | ||||||||
Interim Chief Executive Officer and Director |
SIGNATURES | TITLE | DATE | ||||||
/s/ Harsha V. Agadi Harsha V. Agadi | Interim Chief Executive Officer and Director (Principal Executive Officer) | March 22, 2023 | ||||||
/s/ Bond Clement Bond Clement | Chief Financial Officer (Principal Financial and Accounting Officer) | March 22, 2023 | ||||||
/s/ David Nierenberg David Nierenberg | Chairman of the Board | March 22, 2023 | ||||||
/s/ Evan Farber Evan Farber | Director | March 22, 2023 | ||||||
/s/ Michael Fucci Michael Fucci | Director | March 22, 2023 | ||||||
/s/ Lisa Mayr Lisa Mayr | Director | March 22, 2023 | ||||||
/s/ Matt D. Wilks Matt D. Wilks | Director | March 22, 2023 |
Flotek Chemistry, LLC | JP3 Measurement, LLC | |||||||
Oklahoma Limited Liability Company | Texas Limited Liability Company | |||||||
Flotek Paymaster, Inc. | ||||||||
Texas Corporation |
/s/ HARSHA V. AGADI | ||
Harsha V. Agadi | ||
Interim Chief Executive Officer |
/s/ BOND CLEMENT | ||
Bond Clement | ||
Chief Financial Officer |
/s/ HARSHA V. AGADI | ||
Harsha V. Agadi | ||
Interim Chief Executive Officer |
/s/ BOND CLEMENT | ||
Bond Clement | ||
Chief Financial Officer |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Firm ID | 185 |
Auditor Location | Houston, Texas |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 623 | $ 659 |
Preferred stock, at par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000 | 100,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 240,000,000 | 240,000,000 |
Common stock, shares issued (in shares) | 83,915,918 | 79,483,837 |
Common stock, shares outstanding (in shares) | 77,788,391 | 73,461,203 |
Treasury stock, shares (in shares) | 6,022,634 | 6,127,527 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (42,305) | $ (30,526) |
Other comprehensive income: | ||
Foreign currency translation adjustment | 100 | 100 |
Comprehensive Loss | $ (42,205) | $ (30,426) |
Organization and Nature of Operations |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations General Flotek Industries, Inc. (“Flotek” or the “Company”) creates unique solutions to reduce the environmental impact of energy on air, water, land and people. A technology-driven, specialty green chemistry and data company, Flotek helps customers across industrial and commercial markets improve their environmental performance. The Company’s Chemistry Technologies (“CT”) segment develops, manufactures, packages, distributes, delivers, and markets green specialty chemicals that aim to enhance the profitability of hydrocarbon producers. The Company’s Data Analytics (“DA”) segment aims to enable users to maximize the value of their hydrocarbon associated processes by providing analytics associated with their hydrocarbon streams in seconds rather than minutes or days. The real-time access to information prevents waste, reduces reprocessing and allows users to pursue automation of their hydrocarbon streams to maximize their profitability. The Company’s two operating segments, CT and DA, are both supported by its Research & Innovation advanced laboratory capabilities. For further discussion of our operations and segments, see Note 19, “Business Segment, Geographic and Major Customer Information.” Going Concern These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company’s ability to continue as a going concern exists. The Company currently funds its operations from cash on hand and other current assets. The Company has a history of losses and negative cash flows from operations and expects to utilize a significant amount of cash within one year after the date of filing the consolidated financial statements. The availability of capital is dependent on the Company’s operating cash flow currently expected to be principally derived from the ProFrac Agreement (see Note 18, “Related Party Transactions”). It is not certain that the Company’s cash and other current assets and our forecasted operating cash flows currently expected to be generated from the ongoing execution of the ProFrac Agreement will provide the Company with sufficient financial resources to fund operations and meet our capital requirements and anticipated obligations as they become due in the next twelve months. The Company may require additional liquidity to continue its operations over the next twelve months to sufficiently alleviate or mitigate the conditions and events noted above, which results in substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. The Company is evaluating strategies to obtain additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, issuing debt or entering into other financing arrangements, obtaining higher prices for its products and services, increasing the percentage of its sales from higher margin products, monetizing non-core assets, and reducing expenses. However, the Company may be unable to access further equity or debt financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.
|
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with U.S. GAAP. The consolidated financial statements include the accounts of Flotek Industries, Inc. and subsidiaries it controls. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries. Cash Equivalents Cash equivalents consist of highly liquid investments with maturities of three months or less at the date of purchase. Restricted Cash The Company’s restricted cash is $0.1 million and $1.8 million as of December 31, 2022 and December 31, 2021, respectively. The Company’s restricted cash as of December 31, 2022 consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its credit card program with a financial institution. The restricted cash balance as of December 31, 2021 included cash maintained in accordance with the credit card program and cash held in escrow of $1.75 million for amounts due under the terms of the legal settlement discussed in Note 13, “Commitments and Contingencies”. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable and Accounts receivable, related party, arise from product sales and services and are stated at estimated net realizable value. This value incorporates an allowance for doubtful accounts to reflect any loss anticipated on accounts receivable balances. The Company regularly evaluates its accounts receivable to estimate amounts that will not be collected and records the appropriate allowance for doubtful accounts as a charge to operating expenses. The allowance for doubtful accounts is based on a combination of the age of the receivables, individual customer circumstances, credit conditions, and historical write-offs and collections. The Company writes off specific accounts receivable when they are determined to be uncollectible. The recovery of accounts receivable previously written off is recorded as a reduction to the allowance for doubtful accounts charged to operating expense. The majority of the Company’s customers are engaged in the energy industry. The cyclical nature of the energy industry may affect customers’ operating performance and cash flows, which directly impact the Company’s ability to collect on outstanding obligations. Additionally, certain customers are located in international areas that are inherently subject to risks of economic, political, and civil instability, which can impact the collectability of receivables. Changes in the allowance for doubtful accounts are as follows (in thousands):
As of December 31, 2022 and 2021 the Company has not recorded an allowance for doubtful accounts for the related party accounts receivable, including ProFrac Services, LLC. Contract Assets The Company’s contract assets represent consideration issued in the form of convertible notes (Contract Consideration Convertible Notes Payable as discussed in Note 10, “Debt and Convertible Notes Payable”) and other incremental costs related to obtaining the ProFrac Agreement. The contract assets are amortized over the term of the ProFrac Agreement (10 years) based on forecasted revenues as goods are transferred to ProFrac Services, LLC and the amortization is presented as a reduction of the transaction price included in related party revenue in the consolidated statements of operations. The contract assets are tested for recoverability on a recurring basis and the Company will recognize an impairment loss to the extent that the carrying amount of the contract assets exceeds the amount of consideration the Company expects to receive in the future for the transfer of goods under the ProFrac Agreement less the direct costs that relate to providing those goods in the future. Based on our tests of recoverability, we did not identify an impairment of the contract assets during the year ended December 31, 2022. Inventories Inventories consist of raw materials and finished goods and are stated at the lower of cost determined using the weighted-average cost method, or net realizable value. Finished goods inventories include raw materials, direct labor and production overhead. The Company periodically reviews inventories on hand and current market conditions to determine if the cost of raw materials and finished goods inventories exceed current market prices and impairs the cost basis of the inventory accordingly. Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its net realizable value if those amounts are determined to be less than cost. Write-downs or write-offs of inventory are charged to cost of sales. Property and equipment Property and equipment are stated at cost. The cost of ordinary maintenance and repair is charged to operating expense, while replacement of critical components and major improvements are capitalized. Depreciation or amortization of property and equipment, including operating lease right-of-use assets (“ROU”), is calculated using the straight-line method over the shorter of the lease term or the asset’s estimated useful life as follows:
Property and equipment, including ROU assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. If events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable, the Company first compares the carrying amount of an asset or asset group to the sum of the undiscounted future cash flows expected to result from the use and eventual disposal of the asset. If the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposal of the asset, the Company will determine the fair value of the asset or asset group. The amount of impairment loss recognized is the excess of the asset or asset group’s carrying amount over its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. There were no impairments of property and equipment and ROU assets during the years ended December 31, 2022 and 2021. Assets to be disposed of are reported as assets held for sale at the lower of the carrying amount or the asset’s fair value less cost to sell and depreciation is ceased. Upon sale or other disposition of an asset, the Company recognizes a gain or loss on disposal measured as the difference between the net carrying amount of the asset and the net proceeds received. Leases The Company leases certain facilities, land, vehicles, and equipment. The Company determines if an arrangement is classified as a lease at inception of the arrangement. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the related lease. Finance leases are under the current and non-current liabilities and the underlying assets are included in property and equipment on the consolidated balance sheet. As most of the Company’s leases do not provide an implicit rate of return, on a quarterly basis, the Company’s incremental borrowing rate is used, together with the lease term information available at commencement date of the lease, in determining the present value of lease payments. Operating lease liabilities include related options to extend or terminate lease terms that are reasonably certain of being exercised. Leases with an initial term of 12 months or less (“short term leases”) are not recorded on the balance sheet; and the lease expense on short-term leases is recognized on a straight-line basis over the lease term. Convertible Notes Payable and Liability Classified Contract Consideration Convertible Notes Payable The Company accounts for the Convertible Notes Payable at amortized cost pursuant to Financial Accounting Standards Board (“FASB”) ASC Topic 470, Debt. The Company accounts for the Contract Consideration Convertible Notes Payable issued as consideration related to a related party contract (see Note 10, “Debt and Convertible Notes Payable”), as liability classified convertible instruments in accordance with FASB ASC 718, “Stock Compensation” (“ASC 718”). Under ASC 718, liability classified convertible instruments are measured at fair value at the grant date and at each reporting date (see Note 11, “Fair Value Measurements”) with the change in fair value included in the consolidated statements of operations. Fair Value Measurements The Company categorizes financial assets and liabilities using a three-tier fair value hierarchy, based on the nature of the inputs used to determine fair value. Inputs refer broadly to assumptions that market participants would use to value an asset or liability and may be observable or unobservable. When determining the fair value of assets and liabilities, the Company uses the most reliable measurement available. See Note 11, “Fair Value Measurements.” Revenue Recognition The Company only has revenue from customers. The Company recognizes revenue when it satisfies performance obligations under the terms of the contract with a customer, and control of the promised goods are transferred to the customer or services are performed, in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenue based on a five-step model when all of the following criteria have been met: (i) a contract with a customer exists, (ii) performance obligations have been identified, (iii) the price to the customer has been determined, (iv) the price to the customer has been allocated to the performance obligations, and (v) performance obligations are satisfied. Products and services are sold with fixed or determinable prices. Certain sales include right of return provisions, which are considered when recognizing revenue and deferred accordingly, and discounts offered to customers for prompt payment. The Company does not act as an agent in any of its revenue arrangements. In recognizing revenue for products and services, the Company determines the transaction price of contracts with customers, which may consist of fixed and variable consideration. Determining the transaction price may require judgment by management, which includes identifying performance obligations, estimating variable consideration to include in the transaction price, and determining whether promised goods or services can be distinguished in the context of the contract. The majority of the CT segment revenue is chemical products that are sold at a point in time based on when control transfers to the customer determined by agreed upon delivery terms. Contracts with customers for the sale of products generally state the terms of the sale, including the quantity and price of each product purchased. Additionally, the CT segment offers various services associated to products sold which includes field services, installation, maintenance, and other functions. These services are recognized upon completion of commissioning and installation due to the short-term nature of the performance obligation when the Company has a right to invoice the customer. The DA segment recognizes revenue for sales of equipment at the time of sale based on when control transfers to the customer based on agreed upon delivery terms. Additionally, the Company offers various services associated to products sold which includes field services, installation, maintenance, and other functions. Services are recognized upon completion of commissioning and installation due to the short-term nature of the performance obligation. There may be additional performance obligations related to providing ongoing or reoccurring maintenance. Revenue for these types of arrangements is recognized ratably over time throughout the contract period. Additionally, the Company may provide subscription-type arrangements with customers in which monthly reoccurring revenue is recognized ratably over time in accordance with agreed upon terms and conditions. Customers may be invoiced for such maintenance and subscription-type arrangements and revenue not yet recognizable is reported under accrued liabilities and deferred revenue on the consolidated balance sheets. Subscription-type arrangements were not a material revenue stream in the years ended December 31, 2022 and 2021. Payment terms for both the CT and DA segments are customarily 30-60 days for domestic and 90-120 days for international from invoice receipt. Under revenue contracts for both products and services, customers are invoiced once the performance obligations have been satisfied, at which point payment is unconditional. Contract assets associated with incomplete performance obligations are not material. The Company applies several practical expedients including: •Sales commissions are expensed as selling, general and administrative expenses when incurred because the amortization period is generally one year or less. •The Company’s payment terms are short-term in nature with settlements of one year or less. As a result, the Company does not adjust the promised amount of consideration for the effects of a significant financing component. •In most service contracts, the Company has the right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance obligations completed to date and as such the Company recognizes revenue in the amount to which it has a right to invoice. •The Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer. Such taxes are included in accrued liabilities on our consolidated balance sheet until remitted to the governmental agency. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales in our consolidated statement of operations. Foreign Currency Translation The Company’s functional currency is primarily the U.S. dollar. The Company operates principally in the United States and substantially all assets and liabilities of the Company are denominated in U.S. dollars. Financial statements of foreign subsidiaries that are not U.S. dollar functional currency are prepared using the currency of the primary economic environment of the foreign subsidiaries as the functional currency. Assets and liabilities of those foreign subsidiaries are translated into U.S. dollars at exchange rates in effect as of the end of identified reporting periods. Revenue and expense transactions are translated using the average monthly exchange rate for the reporting period. Resultant translation adjustments are recognized as other comprehensive income (loss) within stockholders’ equity. Comprehensive Loss Comprehensive loss encompasses all changes in stockholders’ equity, except those arising from investments and distributions to stockholders. The Company’s comprehensive loss includes consolidated net loss and foreign currency translation adjustments. Research and Development Costs Expenditures for research activities relating to product development and improvement are charged to expense as incurred. Income Taxes Deferred tax assets and liabilities are recognized for temporary differences between financial statement carrying amounts and the tax bases of assets and liabilities and are measured using the tax rates expected to be in effect when the differences reverse. Deferred tax assets are also recognized for operating loss and tax credit carry forwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The establishment of a valuation allowance requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company’s policy is to record interest and penalties related to uncertain tax positions as income tax expense. Stock-Based Compensation Stock-based compensation expense, related to stock options, restricted stock awards and restricted stock units, is recognized based on their grant-date fair values. The Company recognizes compensation expense, net of estimated forfeitures, on a straight-line basis over the requisite service period of the award. Estimated forfeitures are based on historical experience. Stock Warrants The Company evaluated the Prefunded Warrants issued in June 2022 (see Note 14, “Stockholders’ Equity) in accordance with ASC 815-40, “Contracts in Entity’s Own Equity” and determined that the warrants meet the criteria to be classified within stockholders’ equity and recorded the proceeds received for the Prefunded Warrants within additional paid in capital in the consolidated balance sheets. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from these estimates. Significant items subject to estimates and assumptions include the useful lives of property and equipment; long lived asset impairment assessments; stock-based compensation expense; valuation allowances for accounts receivable, inventories, and deferred tax assets; recoverability and timing of the realization of contract assets; and fair value of liability classified Contract Consideration Convertible Notes Payable and equity classified stock warrants. Recent Accounting Pronouncements Changes to U.S. GAAP are established by the FASB. We evaluate the applicability and impact of all authoritative guidance issued by the FASB. Guidance not listed below was assessed and determined to be either not applicable, clarifications of items listed below, immaterial or already adopted by the Company. New Accounting Standards Issued and Adopted as of January 1, 2022 The FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” This standard changes the accounting for convertible instruments by reducing the number of accounting models, amends the requirements for a conversion option to be classified in equity and amends diluted earnings per share calculations for certain convertible debt instruments. The pronouncement is effective for smaller reporting companies for fiscal years beginning after December 15, 2023, with early adoption allowed for fiscal years beginning after December 15, 2020. The Company adopted this standard as of January 1, 2022, and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. The FASB issued ASU No. 2021-10, “Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance.” This standard provides guidance on disclosures for transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The pronouncement is effective for fiscal years beginning after December 15, 2021.The Company adopted this standard as of January 1, 2022 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. New Accounting Standards Issued But Not Adopted as of December 31, 2022 The FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” This standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects estimates of expected credit losses over their contractual life that are recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. The pronouncement is effective for smaller reporting companies for fiscal years beginning after December 15, 2022. The Company regularly evaluates its accounts receivable to estimate amounts that will not be collected and records the appropriate allowance for doubtful accounts as a charge to operating expenses therefore the Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements and related disclosures.
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Revenue from Contracts with Customers |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customers | Revenue from Contracts with Customers Disaggregation of Revenue The Company differentiates revenue based on whether the source of revenue is attributable to product sales or service revenue. Total revenue disaggregated by revenue source is as follows (in thousands):
(1) Product revenues include sales to related parties as described in Note 18, “Related Party Transactions.” Disaggregation of Cost of Sales The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs which cannot be directly attributable to either tangible goods or services. Total cost of sales disaggregated is as follows (in thousands):
Other cost of sales represent costs directly associated with the generation of revenue but which cannot be attributed directly to tangible goods sold or services. Examples of other costs of sales are certain personnel costs and equipment rental and insurance costs. Cost of sales for the year ended December 31, 2021 included a one time credit of $7.6 million (shown in Other and below in cost of sales for external customers), related to the release of accrued costs subsequent to the ADM settlement (see Note 13, “Commitments and Contingencies”). Cost of sales split between external and related party sales is as follows (in thousands):
Contract assets are as follows (in thousands):
In connection with entering into the ProFrac Agreement on February 2, 2022 and May 17, 2022 as discussed in Note 10, “Debt and Convertible Notes Payable” and Note 18, “Related Party Transactions”, the Company recognized contract assets of $10.0 million and $69.5 million, respectively, and associated fees of $3.6 million. As of December 31, 2022, $72.6 million of the contract assets are classified as long term based upon our estimate of the forecasted revenues from the ProFrac Agreement which will not be realized within the next twelve months of the ProFrac Agreement. During the year ended December 31, 2022 the Company recognized $3.4 million of contract assets amortization which is recorded as a reduction of the transaction price included in the related party revenue in the consolidated statement of operations. The below table reflects our estimated amortization per year (in thousands) based on the Company’s current forecasted revenues from the ProFrac Agreement.
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Contract Assets |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Assets | Revenue from Contracts with Customers Disaggregation of Revenue The Company differentiates revenue based on whether the source of revenue is attributable to product sales or service revenue. Total revenue disaggregated by revenue source is as follows (in thousands):
(1) Product revenues include sales to related parties as described in Note 18, “Related Party Transactions.” Disaggregation of Cost of Sales The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs which cannot be directly attributable to either tangible goods or services. Total cost of sales disaggregated is as follows (in thousands):
Other cost of sales represent costs directly associated with the generation of revenue but which cannot be attributed directly to tangible goods sold or services. Examples of other costs of sales are certain personnel costs and equipment rental and insurance costs. Cost of sales for the year ended December 31, 2021 included a one time credit of $7.6 million (shown in Other and below in cost of sales for external customers), related to the release of accrued costs subsequent to the ADM settlement (see Note 13, “Commitments and Contingencies”). Cost of sales split between external and related party sales is as follows (in thousands):
Contract assets are as follows (in thousands):
In connection with entering into the ProFrac Agreement on February 2, 2022 and May 17, 2022 as discussed in Note 10, “Debt and Convertible Notes Payable” and Note 18, “Related Party Transactions”, the Company recognized contract assets of $10.0 million and $69.5 million, respectively, and associated fees of $3.6 million. As of December 31, 2022, $72.6 million of the contract assets are classified as long term based upon our estimate of the forecasted revenues from the ProFrac Agreement which will not be realized within the next twelve months of the ProFrac Agreement. During the year ended December 31, 2022 the Company recognized $3.4 million of contract assets amortization which is recorded as a reduction of the transaction price included in the related party revenue in the consolidated statement of operations. The below table reflects our estimated amortization per year (in thousands) based on the Company’s current forecasted revenues from the ProFrac Agreement.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories are as follows (in thousands):
Changes in the reserve for excess and obsolete inventory are as follows (in thousands):
The provisions recorded in the year ended December 31, 2022 were $1.6 million for the CT segment and $0.1 million for the DA segment. The CT segment provision includes $1.0 million for the exit of the hand sanitizers business line. The provisions recorded in the year ended December 31, 2021 were $0.6 million for the CT segment and nil for the DA segment.
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Property and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment Property and equipment are as follows (in thousands):
Depreciation expense totaled $0.7 million and $1.0 million for the years ended December 31, 2022 and 2021, respectively. During 2022, the Company sold its two facilities that were classified as held for sale as of December 31, 2021 for proceeds of $5.8 million resulting in a net gain of $2.9 million.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Rental income recognized from leasing manufacturing facilities was $375 thousand and $197 thousand for the years ended December 31, 2022 and December 31, 2021, respectively, and is included in other income in the consolidated statement of operations. As discussed in Note 6, “Property and Equipment” these facilities were sold in 2022 and the lease agreements between the tenants and the Company terminated. The components of lease expense and supplemental cash flow information are as follows (in thousands):
Maturities of lease liabilities as of December 31, 2022 are as follows (in thousands):
Supplemental balance sheet information related to leases is as follows (in thousands):
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Leases | Leases Rental income recognized from leasing manufacturing facilities was $375 thousand and $197 thousand for the years ended December 31, 2022 and December 31, 2021, respectively, and is included in other income in the consolidated statement of operations. As discussed in Note 6, “Property and Equipment” these facilities were sold in 2022 and the lease agreements between the tenants and the Company terminated. The components of lease expense and supplemental cash flow information are as follows (in thousands):
Maturities of lease liabilities as of December 31, 2022 are as follows (in thousands):
Supplemental balance sheet information related to leases is as follows (in thousands):
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Goodwill |
12 Months Ended |
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Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Based upon the results of our annual quantitative impairment test for the year ended December 31, 2021, the Company concluded that the carrying value of the DA reporting unit exceeded its estimated fair value as of the testing date, which resulted in goodwill impairment charges of $8.1 million and reduced the goodwill balance to $0 as of December 31, 2021. The goodwill impairment was calculated as the amount that the carrying value of the DA reporting unit, including any goodwill, exceeded its fair value. |
Accrued Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Accrued Liabilities Current accrued liabilities are as follows (in thousands):
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Debt and Convertible Notes Payable |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Convertible Notes Payable | Debt and Convertible Notes Payable Long Term Debt Paycheck Protection Program Loans In April 2020, the Company received a $4.8 million loan (the “Flotek PPP loan”) under the Paycheck Protection Program (“PPP”), which was created through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). In October 2021, the Flotek PPP loan maturity date was extended from April 15, 2022 to April 15, 2025. On January 5, 2023 the Company received notice from the SBA that $4.4 million of the $4.8 million principal amount and accrued interest to this date of $0.1 million, was forgiven. The remaining principal amount of $0.4 million and accrued interest, will be repaid over the remaining term of the loan through April 15, 2025 beginning on March 15, 2023. The forgiveness of the Flotek PPP loan will be accounted for as an extinguishment of the debt and will result in the Company recording a $4.5 million gain in the first quarter of 2023 comprising the principal amount forgiven of $4.4 million and accrued interest of $0.1 million. In connection with the acquisition of JP3 in May 2020, the Company assumed a PPP loan of $0.9 million obtained by JP3 (the “JP3 PPP loan”) in April 2020 prior to its acquisition by Flotek. In June 2021, the Company received notice from the SBA that the JP3 PPP loan and accrued interest were fully forgiven. Accordingly, during the year ended December 31, 2021, the Company recorded $0.9 million for the amount of principal and accrued interest forgiven associated with the JP3 PPP loan in other income on the consolidated statements of operations. Long-term debt, including current portion, is as follows (in thousands):
Convertible Notes Payable On February 2, 2022, Flotek entered into a Private Investment in Public Equity transaction (the “PIPE transaction”) with a consortium of investors to secure growth capital for the Company. Pursuant to the PIPE Transaction, Flotek issued $21.2 million in aggregate initial principal amount of Convertible Notes Payable for net cash proceeds of approximately $20.1 million. The investors are ProFrac Holdings, LLC, Burlington Ventures Ltd., entities associated with North Sound Management, certain funds associated with one of Flotek's directors including the D3 Family Fund and the D3 Bulldog Fund, and Firestorm Capital LLC. The Convertible Notes Payable accrue paid-in-kind interest at a rate of 10% per annum, have a maturity of one year, and are converted into common stock of Flotek or pre-funded warrants to purchase common stock of Flotek, (a) at the holder's option at any time prior to maturity, at a price of $1.088125 per share, (b) at Flotek's option, if the volume-weighted average trading price of Flotek's common stock equals or exceeds $2.50 for 20 trading days during a 30 consecutive trading day period, or (c) at maturity, at a price of $0.8705. The issuance cost of $1.1 million is amortized on a straight line basis over the term of the Convertible Notes Payable and the amortization is included in interest expense in the consolidated statements of operations. On March 21, 2022, $3.0 million of the Convertible Notes Payable, plus accrued paid-in-kind interest thereon, were converted at the holder’s option into approximately 2.8 million shares of common stock resulting in a 3.0 million credit to additional paid-in-capital in stockholders’ equity. As of December 31, 2022, the remaining Convertible Notes Payable are recorded at carrying value of $19.8 million, including accrued paid-in-kind interest of $1.8 million, and net of unamortized issuance costs of $0.1 million. The estimated fair value of the Convertible Notes Payable at December 31, 2022 was $25.8 million. Interest expense for the year ended December 31, 2022 includes $1.8 million of accrued paid-in-kind interest and $1.0 million of issuance cost amortization related to these Convertible Notes Payable. Interest expense relating to the Convertible Notes Payable held by ProFrac Holdings, LLC (related party) is $1.0 million for the year ended December 31, 2022. Initial ProFrac Agreement Contract Consideration Convertible Notes Payable On February 2, 2022, the Company entered into a long-term supply agreement with ProFrac Services, LLC (the “Initial ProFrac Agreement”), a subsidiary of ProFrac Holdings LLC, in exchange for $10 million in aggregate principal amount of Contract Consideration Convertible Notes Payable (“Initial ProFrac Agreement Contract Consideration Convertible Notes Payable”), under the same terms as the Convertible Notes Payable issued in the PIPE Transaction described above, including the paid-in-kind interest at a rate of 10% per annum and conversion features. The Initial ProFrac Agreement Contract Consideration Convertible Notes Payable are accounted for as liability classified convertible instruments and were initially recorded at fair value of $10.0 million on the issuance date with a corresponding contract asset. The Initial ProFrac Agreement Contract Consideration Convertible Notes Payable were remeasured to fair value of $14.2 million as of December 31, 2022 which includes paid-in-kind interest of $1.0 million. The fair value adjustment increased the carrying amount of the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable by $3.3 million during the year ended December 31, 2022 and is recognized in gain on fair value of contract consideration convertible notes payable, net on our consolidated statements of operations. See Note 11, “Fair Value Measurements”. Amended ProFrac Agreement Contract Consideration Convertible Notes Payable On May 17, 2022, the Company entered into an amendment to the Initial ProFrac Agreement (the “Amended ProFrac Agreement” and collectively the “ProFrac Agreement”) upon issuance of $50 million in aggregate principal amount of Contract Consideration Convertible Notes Payable (“Amended ProFrac Agreement Contract Consideration Convertible Notes Payable”) to ProFrac Holdings LLC. The Amended ProFrac Agreement Contract Consideration Convertible Notes Payable accrue paid-in-kind interest at a rate of 10% per annum and may be converted at any time prior to the maturity date, which is one year from the date of issuance under the same conversion terms as the Convertible Notes Payable issued in the PIPE Transaction described above. The Amended ProFrac Agreement Contract Consideration Convertible Notes Payable are accounted for as liability classified convertible instruments and were initially recorded at fair value of $69.5 million on the issuance date with a corresponding contract asset. The Amended ProFrac Agreement Contract Consideration Convertible Notes Payable were remeasured to fair value of $69.4 million as of December 31, 2022 which includes paid-in-kind interest of $3.2 million The fair value adjustment resulted in a $3.3 million decrease during the year ended December 31, 2022 and is recognized in gain on fair value of contract consideration convertible notes payable, net on our consolidated statement of operations. See Note 11, “Fair Value Measurements”.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement. •Level 1 — Quoted prices in active markets for identical assets or liabilities; •Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and •Level 3 — Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entity’s assumptions about the inputs. Fair Value of Other Financial Instruments The carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accrued liabilities and accounts payable approximate fair value due to the short-term nature of these accounts. Liabilities Measured at Fair Value on a Recurring Basis The following table presents the Company’s liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy (in thousands):
Contingent Earnout Consideration Key Inputs The estimated fair value of the remaining stock performance earn-out provision, with respect to the JP3 transaction, is included in accrued liabilities as of December 31, 2022 and 2021. The estimated fair value of the earn-out provision at the end of each period was valued using a Monte Carlo model analyzing 20,000 simulations performed using Geometric Brownian Motion with inputs such as risk-neutral expected growth and volatility.
Initial ProFrac Agreement Contract Consideration Notes Payable Key Inputs The Initial ProFrac Agreement Contract Consideration Convertible Notes Payable were measured at fair value at issuance and on a recurring basis. The Initial ProFrac Agreement Contract Consideration Convertible Notes Payable had an initial fair value of $10.0 million on February 2, 2022. The Initial ProFrac Agreement Contract Consideration Convertible Notes Payable were classified as Level 2 at the initial measurement upon issuance due to the use of a quoted price for a similar liability at that date (the PIPE transaction), and subsequently classified as Level 3 due to the use of unobservable inputs. The estimated value of the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable as of December 31, 2022 was valued using a Monte Carlo simulation. The key inputs into the Monte Carlo simulation used to estimate the fair value of the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable maturing February 2, 2023, as of December 31, 2022 were as follows:
Amended ProFrac Agreement Contract Consideration Convertible Notes Payable Key Inputs On May 17, 2022, the Company measured the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable classified as Level 3 using a Monte Carlo simulation at an estimated fair value of $69.5 million. The Company reduced the discount rate assumed due to the reduced likelihood of occurrence of any of the default events in the shorter term remaining on the notes. The estimated value of the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable as at December 31, 2022 was valued using a Monte Carlo simulation. The key inputs into the Monte Carlo simulation used to estimate the fair value of the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable, on the issuance date of May 17, 2022, and as of December 31, 2022 were as follows:
Assets Measured at Fair Value on a Nonrecurring Basis The Company’s non-financial assets, including property and equipment and operating lease ROU assets, are measured at fair value on a non-recurring basis and are subject to adjustment to their fair value in certain circumstances. Impairment of goodwill of $8.1 million was recorded during the year ended December 31, 2021. See Note 8, “Goodwill”. Level 3 Rollforward for Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the changes in balances of liabilities for the years ended December 31, 2022 and 2021 classified as Level 3 balances (in thousands):
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Components of the income tax benefit are as follows (in thousands):
The components of loss before income taxes are as follows (in thousands):
The income tax benefit differed from the amounts computed by applying the U.S. federal income tax rate of 21% respectively, to loss before income tax for the reasons set forth below:
Deferred income taxes reflect the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the value reported for income tax purposes, at the enacted tax rates expected to be in effect when the differences reverse. The movement in the temporary differences for the year ended December 31, 2022 does not affect the estimated annual effective tax rate as it is offset by a corresponding change in the valuation allowance. The component of deferred tax assets and liabilities are as follows (in thousands):
As of December 31, 2022, the Company had U.S. net operating loss carryforwards of $176 million, including $46.4 million expiring in various amounts from 2029 through 2037 which can offset 100% of taxable income and $129.6 million that has an indefinite carryforward period which can offset 80% of taxable income per year. The ability to utilize net operating losses and other tax attributes could be subject to a significant limitation if the Company were to undergo a change in control as defined for purposes of Section 382 of the Internal Revenue Code of 1986, as amended. The Company performed a study in which it determined that no ownership change has occurred as of December 31, 2022. However, the Company anticipates that a change in control will occur in the near term when certain convertible notes are converted during the year ended 2023. Although the change in control will significantly limit the ability of the Company to utilize the pre-change net operating losses and credits, the Company does not expect a significant impact to their financial statements given the valuation allowance that is recorded to estimate the realizability of the deferred tax assets. The Company’s cumulative recent losses (before permanent items) of $215.5 million in the recent thirty-six months are negative evidence that it will not likely generate sufficient future income to utilize its deferred tax assets. Therefore, the Company believes that it is not more likely than not that it will realize its deferred tax assets in all taxing jurisdictions with the exception of a portion of Louisiana and Texas. Therefore, the Company recorded a valuation allowance for the years ended December 31, 2022 and December 31, 2021 to reflect the estimated amount of deferred tax asset realizability. The Company intends to reinvest the unremitted earnings of its non-U.S. subsidiaries. As of December 31, 2022 and 2021, the Company had approximately $7.4 million and $8.5 million, respectively, in unremitted earnings from its foreign jurisdictions. As a result of the 2017 Tax Act these earnings have been previously taxed in the U.S. although they have not been repatriated. However, certain withholding taxes may need to be paid upon repatriation depending on the US treaty with the applicable country. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. The Company has performed an analysis of its tax positions for the year ended December 31, 2022, concluding all tax positions taken were highly certain.
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Commitments and Contingencies |
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Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is subject to routine litigation and other claims that arise in the normal course of business. Except as disclosed below, management is not aware of any pending or threatened lawsuits or proceedings that are expected to have a material effect on the Company’s financial position, results of operations or liquidity. Former CEO (J Chisholm) Matter During the year ended December 31, 2021, Flotek commenced an internal investigation into the activities of John Chisholm (a previous CEO of Flotek) due to irregularities in expenses and transactions during the years from 2014 to 2018. The investigation revealed evidence of related party transactions/self-dealing, inappropriate personal expenses, and general corporate waste. Flotek’s Board engaged a third party to review the findings of the investigation. After the third-party review, Flotek concluded that its current and historical financial statements can be relied upon, that proper action had been taken, and that no members of current management were implicated in any way. Beginning in December 2021, Flotek sent demand letters to, and subsequently filed arbitration and other legal proceedings against, John Chisholm, Casey Doherty/Doherty & Doherty LLP (Flotek’s former outside general counsel) and Moss Adams LLP (Flotek’s former independent public audit firm) to recover damages. John Chisholm subsequently filed a counterclaim against Flotek in the arbitration proceeding for his remaining severance (currently accrued by the Company, but payment for which was suspended). Although Flotek believes its claims are supported by the available evidence, the timing and amount of any outcome cannot reasonably be predicted. Terpene Supply Agreement On October 29, 2021, the Company reached agreement (“the ADM Settlement) with Archer-Daniels-Midland Company (“ADM”), Florida Chemical Company (“FCC”) and other parties to pay $1.75 million and resolve all claims between the parties in relation to lawsuit claiming damages relating to the terpene supply agreement between Flotek Chemistry, LCC (“Flotek Chemistry”), a wholly owned subsidiary of the Company and FCC. The one-time payment of $1.75 million from Flotek to ADM was paid on January 3, 2022 and was included as restricted cash on the consolidated balance sheet as of December 31, 2021. A credit of $7.6 million was recorded in cost of sales in the consolidated statements operations for the year ended December 31, 2021 relating to the release of excess costs accrued for this matter. Other Commitments and Contingencies The Company is subject to concentrations of credit risk within trade accounts receivable, and related party accounts receivable, as the Company does not generally require collateral as support for trade receivables. In addition, the majority of the Company’s cash is invested in three major U.S. financial institutions and balances often exceed insurable amounts.
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Stockholders’ Equity |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||
Stockholders’ Equity | Stockholders’ Equity On March 21, 2022, Convertible Notes Payable pursuant to the PIPE Transaction discussed in Note 10, “Debt and Convertible Notes Payable”, which had been purchased by certain funds associated with one of the Company’s directors including the D3 Family Fund and the D3 Bulldog Fund, which aggregated $3.0 million plus $39 thousand of accrued interest, were converted into 2,793,030 shares of the Company’s common stock. On June 21, 2022, ProFrac Holdings II, LLC paid $19.5 million for PreFunded Warrants of the Company. The PreFunded Warrants were recorded in equity at their fair value of $11.1 million, estimated using a Black-Scholes Option Pricing model, less $1.2 million of transaction costs paid. The remaining cash received of $8.4 million was recognized as an equity contribution. The Prefunded Warrants permit ProFrac Holdings II, LLC to purchase 13,104,839 shares of common stock of the Company at an exercise price equal to $0.0001 per share, representing a 20% premium to the 30-day volume average price of the Company’s common stock at the close of business on the day prior to the date of the issuance of the Prefunded Warrants. The Prefunded Warrants, net of transaction fees of $1.1 million, and the equity contribution of $8.4 million from ProFrac Holdings, II, LLC are included in additional paid-in capital as of December 31, 2022. The key inputs into the Black-Scholes Option Pricing Model used to estimate the fair value of the Pre-Funded Warrants as of the issuance on June 21, 2022 were as follows:
ProFrac Holdings II, LLC and its affiliates may not receive any voting or consent rights in respect of the Prefunded Warrants or the underlying shares unless and until (i) the Company has obtained approval from a majority of its shareholders excluding ProFrac Holdings II, LLC and its affiliates and (ii) ProFrac Holdings II, LLC has paid an additional $4.5 million to the Company. The additional $4.5 million will be accounted for as an equity contribution if received. During the first quarter of 2021, the Company identified 613,000 shares that were improperly included in the December 31, 2020 issued share count, and the Company adjusted the issued share count presented on the statement of stockholders’ equity. This adjustment was not material to the December 31, 2020 consolidated financial statements or basic and diluted earnings per share. Treasury Stock The Company accounts for treasury stock using the cost method and includes treasury stock as a component of stockholders’ equity. During the years ended December 31, 2022 and 2021, the Company withheld 114,797 shares and 155,317 shares, respectively, of the Company’s common stock at market value as payment of income tax withholding owed by employees upon the vesting of restricted shares and the exercise of stock options. Shares issued as restricted stock awards to employees under the 2018 long-term incentive plan that were forfeited were 39,547 and 135,092 during the years ended December 31, 2022 and 2021, respectively, are accounted for as treasury stock. During the years ended December 31, 2022 and 2021, forfeited stock awards returned to treasury stock were 30,055 shares and 421,389 shares, respectively.
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Stock-Based Compensation and Other Benefit Plans |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation and Other Benefit Plans | Stock-Based Compensation and Other Benefit Plans Stock-Based Incentive Plans Stockholders approved long-term incentive plans in 2020, 2019 and 2018 (the “2020 Plan”, the “2019 Plan,” and the “2018 Plan,”, respectively) under which the Company may grant equity awards to officers, key employees, non-employee directors and service providers in the form of stock options, restricted stock, restricted stock units, and certain other incentive awards. The maximum number of shares that may be issued under the 2020 Plan, 2019 Plan and 2018 Plan are 3 million, 1.0 million, and 8.5 million, respectively. At December 31, 2022 and 2021, the Company had a total of 2.8 million and 4.2 million shares remaining, respectively, to be granted under the 2020 Plan, 2019 Plan and 2018 Plan. Stock Options All stock options are granted with an exercise price equal to the market value of the Company’s common stock on the date of grant. During the year ended December 31, 2022 no market-based stock options were granted compared to 1.4 million during the year ended December 31, 2021. The market-based options are restricted until criteria defined in the agreements are met. Proceeds received from stock option exercises are credited to common stock and additional paid-in capital, as appropriate. The Company uses historical data to estimate pre-vesting option forfeitures. Estimates are adjusted when actual forfeitures differ from the estimate. Stock-based compensation expense is recorded for all equity awards expected to vest. During the years ended December 31, 2022 and 2021, 0.5 million and 0.2 million stock options vested, respectively. During the year ended December 31, 2022, no stock options were forfeited compared to 0.8 million for the year ended December 31, 2021. The total fair value of the stock options that vested was $0.3 million and $0.2 million for the years ended December 31, 2022 and 2021, respectively. Stock option activity for the years ended December 31, 2022 and 2021, are as follows:
The below table shows the aggregate intrinsic value and weighted average remaining contractual term of share options outstanding, currently exercisable and vested or expected to vest.
The following table sets forth significant assumptions used in the Monte Carlo model for market-based options to determine the fair value of the options at the date of grant for the year ended December 31, 2021. There were no options granted during the year ended December 31, 2022.
At December 31, 2022 and 2021, the unrecognized compensation cost related to stock options was $2.1 million and $3.3 million, respectively. Upon the departure of the Company’s Chief Executive Officer and President effective January 19, 2023, 3,000,000 of the outstanding stock options were forfeited (see Note 20, “Subsequent Events”). The unrecognized compensation expense related to these forfeited options was $1.8 million. Restricted Stock The Company grants employees and directors either time-vesting or market-based restricted shares in accordance with terms specified in the Restricted Stock Agreements. During the years ended December 31, 2022 and 2021, all of the restricted stock granted were time-vesting restricted shares. Grantees of restricted shares retain voting rights for the granted shares. •Time-vesting restricted shares vest after a stipulated period has elapsed after the date of grant, generally three years. Certain time-vested shares have also been issued with a portion of the shares granted vesting immediately. •Market-based restricted shares are issued with criteria defined over a designated period and vest only when, and if, the outlined criteria are met. Restricted stock share activity for the years ended December 31, 2022 and 2021, are as follows:
The total fair value of restricted stock that vested during the years ended December 31, 2022 and 2021 was $1.3 million and $2.5 million, respectively. At December 31, 2022 and 2021, unrecognized compensation expense related to non-vested restricted stock was $2.0 million and $1.9 million, respectively. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 1.7 years. Restricted Stock Units No RSU’s were granted during the years ended December 31, 2022 and 2021. Restricted stock units activity for the years ended December 31, 2022 and 2021, are as follows:
At December 31, 2022 and 2021, unrecognized compensation expense related to restricted stock units was $0.4 million and $1.0 million. Upon the departure of the Company’s Chief Executive Officer and President effective January 19, 2023, all the unvested restricted stock units outstanding as of December 31, 2022 were forfeited (see Note 20, “Subsequent Events”). Employee Stock Purchase Plan The Company’s Employee Stock Purchase Plan (“ESPP”) was approved by stockholders in 2012. The Company registered 500,000 shares of its common stock, currently held as treasury shares, for issuance under the ESPP. The purpose of the ESPP is to provide employees with an opportunity to purchase shares of the Company’s common stock through accumulated payroll deductions. The ESPP allows participants to purchase common stock at a purchase price equal to 85% of the fair market value of the common stock on the last business day of a three-month offering period which coincides with calendar quarters. Payroll deductions may not exceed 10% of an employee’s compensation and participants may not purchase more than 1,000 shares in any one offering period. In addition, for each calendar year, an employee may not be granted purchase rights valued over $25,000, as determined at the time such purchase right is granted. The fair value of the discount associated with shares purchased under the plan is recognized as stock-based compensation expense and was $10.2 thousand and $23.6 thousand for the years ended December 31, 2022 and 2021, respectively. The total fair value of the shares purchased under the plan during each of the years ended December 31, 2022 and 2021 was $0.1 million and $0.2 million, respectively. The employee payment associated with participation in the plan occurs through payroll deductions. Stock-Based Compensation Expense Non-cash stock-based compensation expense related to stock options, restricted stock, restricted stock unit grants and stock purchased under the Company’s ESPP was $3.3 million and $3.8 million during the years ended December 31, 2022 and 2021, respectively. 401(k) Retirement Plan The Company maintains a 401(k) retirement plan for the benefit of eligible employees in the U.S. All employees are eligible to participate in the plan upon employment. The Company currently matches contributions at 100% of up to 2% of an employee’s compensation. During the years ended December 31, 2022 and 2021, compensation expense included $0.3 million and $0.2 million, respectively, related to the Company’s 401(k) match.
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Loss Per Share |
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Loss Per Share | Loss Per Share Basic loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted loss per common share is calculated by dividing the adjusted net loss by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. Potentially dilutive common share equivalents consist of incremental shares of common stock issuable upon conversion of convertible notes payable, exercise of stock warrants and vesting and settlement of stock awards. The dilutive effect of non-vested stock issued under share‑based compensation plans, shares issuable under the Employee Stock Purchase Plan (ESPP), employee stock options outstanding, and the prefunded stock warrants are computed using the treasury stock method. The dilutive effect of the Convertible Notes is computed using the if converted method in accordance with ASU 2020-06, which was adopted by the Company on January 1, 2022 (see Note 2, “Summary of Significant Accounting Policies”). The calculation of the basic and diluted loss per share for the years ended December 31, 2022 and 2021 is as follows (in thousands):
For the year ended December 31, 2022 paid-in-kind interest expense, net of tax, on Convertible Notes Payable and the change in fair value related to the Contract Consideration Convertible Notes Payable, net of tax, were not included in the dilution calculation since including them would have an anti-dilutive effect on the loss per share due to the net loss incurred during the periods. For the year ended December 31, 2022 weighted average shares for convertible notes payable, weighted average shares for stock warrants and weighted average shares for employee stock awards were not included in the dilution calculation since including them would have an anti-dilutive effect on the loss per share due to the net loss incurred during the period. For the year ended December 31, 2021, potentially dilutive securities were excluded from the calculation of diluted loss per share, since including them would have an anti-dilutive effect on loss per share due to the net loss incurred during the year.
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Supplemental Cash Flow Information |
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Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information is as follows (in thousands):
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Related Party Transaction |
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Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Related Party Transaction On February 2, 2022, the Company entered into the Initial ProFrac Agreement, upon issuance of $10 million in aggregate principal amount of the convertible notes (the “Contract Consideration Convertible Notes Payable”) to ProFrac Holdings LLC (see Note 10, “Debt and Convertible Notes Payable”). Under the Initial ProFrac Agreement, ProFrac Services, LLC is obligated to order chemicals from the Company at least equal to the greater of (a) the chemicals required for 33% of ProFrac Services, LLC’s hydraulic fracturing fleets and (b) a baseline measured by the first ten hydraulic fracturing fleets deployed by ProFrac Services, LLC during the term of the Initial ProFrac Agreement. If the minimum volumes are not achieved in any given year, ProFrac Services LLC shall pay to the Company, as liquidated damages an amount equal to twenty-five percent (25%) of the difference between (i) the aggregate purchase price of the quantity of products comprising the minimum purchase obligation and (ii) the actual purchased volume during such calendar year. On May 17, 2022, the Company entered into an amendment to the Initial ProFrac Agreement (the “Amended ProFrac Agreement” and collectively the “ProFrac Agreement”) upon issuance of $50 million in aggregate principal amount of Contract Consideration Convertible Notes Payable (see Note 10, “Debt and Convertible Notes Payable”). The Initial ProFrac Agreement was amended to (a) increase ProFrac Services LLC’s minimum purchase obligation for each year to the greater of 70% of ProFrac Services LLC’s requirements and a baseline measured by ProFrac Services LLC’s first 30 hydraulic fracturing fleets, and (b) increase the term to 10 years. During the years ended December 31, 2022 and 2021, the Company’s revenues from ProFrac Services LLC were $80.4 million and zero, respectively. For the year ended December 31, 2022, these revenues were net of amortization of contract assets of $3.4 million. Cost of sales attributable to these revenues were $84.5 million and nil, respectively, for the years ended December 31, 2022 and 2021. As of December 31, 2022 and 2021 our accounts receivable from ProFrac Services, LLC was $22.7 million and zero, respectively which is recorded in accounts receivable, related party on the consolidated balance sheet. Also during 2022, we entered into the following related party transactions with ProFrac Holdings, LLC and ProFrac Holdings II, LLC: •PIPE Transaction (see Note 10, “Debt and Convertible Notes Payable”) •PreFunded Warrants (see Note 14, “Stockholders’ Equity) On March 21, 2022, the Convertible Notes Payable which had been purchased by certain funds associated with one of the Company’s directors including the D3 Family Fund and the D3 Bulldog Fund, which aggregated $3.0 million plus $39 thousand of accrued interest and amortization of issuance costs of $90 thousand, were converted into 2,793,030 shares of the Company’s common stock. Mr. Ted D. Brown was a Director of the Company beginning in November of 2013 and is the President and CEO of Confluence Resources LP (“Confluence”), a private oil and gas exploration and production company. As of April 15, 2022 Mr. Brown stepped down from being a Director of the Company and Confluence is no longer be considered a related party as of April 15, 2022. The Company’s revenues and related cost of sales for product sales to Confluence were $1.4 million and $1.4 million, respectively, through April 15, 2022. The accounts receivable balance from Confluence as at December 31, 2021 was $1.3 million. The Company’s revenues and related cost of sales from chemical sales to Confluence for the year ended December 31, 2021 were $3.6 million and $3.4 million, respectively.
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Business Segment, Geographic and Major Customer and Supplier Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment, Geographic and Major Customer and Supplier Information | Business Segment, Geographic and Major Customer and Supplier 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: 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 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 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):
(1) CT loss from operations includes a credit of $7.6 million from the release of accrued costs relating to the ADM settlement, see Note 13, “Commitments and Contingencies”. Assets of the Company by reportable segments are as follows (in thousands):
The increase in Chemistry Technologies assets is primarily due to contract asset of $79.7 million Geographic Information Revenue by country is based on the location where services are provided and products are sold. For the year ended December 31, 2022 no individual countries other than the U.S accounted for more than 10% of revenue. For the year ended December 31, 2021 no individual countries other than the U.S and United Arab Emirates (“UAE”) accounted for more than 10% of revenue. Revenue by geographic location is as follows (in thousands):
(1) Includes revenue from related parties of $81,748 and $3,641, respectively. 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):
The concentration with ProFrac Services, LLC and in the oil and gas industry increases credit, commodity and business risk. Major Suppliers Expenditure with major suppliers, as a percentage of consolidated supplier expenditure, is as follows (in thousands):
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Subsequent Events |
12 Months Ended |
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Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We have evaluated the effects of events that have occurred subsequent to December 31, 2022, and there have been no material events that would require recognition in the 2022 consolidated financial statements or disclosure in the notes to the consolidated financial statements, except as disclosed below. On January 19, 2023, the Company announced the departure of John W. Gibson, Jr. from his role as Chief Executive Officer and President of the Company, effective January 19, 2023. Mr. Gibson also stepped down from his role as Chairman of the Board of Directors (the “Board”) of the Company. In connection with his separation, the Company and Mr. Gibson have entered into a Separation Agreement and General Release (the “Separation Agreement”) pursuant to which Mr. Gibson will receive $1,500,000 payable in four installments and being fully paid by April 2023. As part of the Separation Agreement, Mr. Gibson has agreed to forfeit all of his outstanding options and unvested restricted stock units. In addition, Mr. Gibson has agreed to a 6-month lock up period with respect to 250,000 shares of common stock owned by Mr. Gibson, which will prohibit Mr. Gibson from selling those shares during the lock up period. On February 1, 2023, the Company entered into an amendment to the ProFrac Agreement (the “Amended ProFrac Agreement No. 2”) between Flotek Chemistry and ProFrac Services, LLC dated February 2, 2022. The Amended ProFrac Agreement No. 2 has an effective date of January 1, 2023. Pursuant to the Amended ProFrac Agreement No. 2, the Parties agree (1) to a ramp-up period from January 1, 2023 to May 31, 2023 for ProFrac Services, LLC to increase the number of active fleets to 30 fleets, (2) that the potential liquidated damages payment relating to order shortfall, prior to January 1, 2023 is waived for that period, (3) to add additional fees to certain products, and (4) to provide margin increases based on revenue percentages from non-ProFrac customers. On February 2, 2023, the Convertible Notes Payable and certain Contract Consideration Convertible Notes previously issued on February 2, 2022 were converted upon maturity into 10,355,840 shares of common stock and 25,366,561 Pre-Funded Warrants to purchase common stock for a nominal exercise price of $0.0001 per share exercisable subject to the limitations on exercise described therein. All of the holders elected to receive shares of common stock upon conversion except for ProFrac Holdings LLC, which elected to receive the Pre-Funded Warrants.
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Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of PresentationThe Company’s consolidated financial statements have been prepared in accordance with U.S. GAAP. | ||||||||||||||||||||||||||||||||||||||||||
Consolidation | The consolidated financial statements include the accounts of Flotek Industries, Inc. and subsidiaries it controls. | ||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents | Cash Equivalents Cash equivalents consist of highly liquid investments with maturities of three months or less at the date of purchase.
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Restricted Cash | Restricted CashThe Company’s restricted cash is $0.1 million and $1.8 million as of December 31, 2022 and December 31, 2021, respectively. The Company’s restricted cash as of December 31, 2022 consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its credit card program with a financial institution. | ||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable and Accounts receivable, related party, arise from product sales and services and are stated at estimated net realizable value. This value incorporates an allowance for doubtful accounts to reflect any loss anticipated on accounts receivable balances. The Company regularly evaluates its accounts receivable to estimate amounts that will not be collected and records the appropriate allowance for doubtful accounts as a charge to operating expenses. The allowance for doubtful accounts is based on a combination of the age of the receivables, individual customer circumstances, credit conditions, and historical write-offs and collections. The Company writes off specific accounts receivable when they are determined to be uncollectible. The recovery of accounts receivable previously written off is recorded as a reduction to the allowance for doubtful accounts charged to operating expense. The majority of the Company’s customers are engaged in the energy industry. The cyclical nature of the energy industry may affect customers’ operating performance and cash flows, which directly impact the Company’s ability to collect on outstanding obligations. Additionally, certain customers are located in international areas that are inherently subject to risks of economic, political, and civil instability, which can impact the collectability of receivables.
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Contract Assets and Revenue Recognition | Contract Assets The Company’s contract assets represent consideration issued in the form of convertible notes (Contract Consideration Convertible Notes Payable as discussed in Note 10, “Debt and Convertible Notes Payable”) and other incremental costs related to obtaining the ProFrac Agreement. The contract assets are amortized over the term of the ProFrac Agreement (10 years) based on forecasted revenues as goods are transferred to ProFrac Services, LLC and the amortization is presented as a reduction of the transaction price included in related party revenue in the consolidated statements of operations. The contract assets are tested for recoverability on a recurring basis and the Company will recognize an impairment loss to the extent that the carrying amount of the contract assets exceeds the amount of consideration the Company expects to receive in the future for the transfer of goods under the ProFrac Agreement less the direct costs that relate to providing those goods in the future. Based on our tests of recoverability, we did not identify an impairment of the contract assets during the year ended December 31, 2022. Revenue Recognition The Company only has revenue from customers. The Company recognizes revenue when it satisfies performance obligations under the terms of the contract with a customer, and control of the promised goods are transferred to the customer or services are performed, in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenue based on a five-step model when all of the following criteria have been met: (i) a contract with a customer exists, (ii) performance obligations have been identified, (iii) the price to the customer has been determined, (iv) the price to the customer has been allocated to the performance obligations, and (v) performance obligations are satisfied. Products and services are sold with fixed or determinable prices. Certain sales include right of return provisions, which are considered when recognizing revenue and deferred accordingly, and discounts offered to customers for prompt payment. The Company does not act as an agent in any of its revenue arrangements. In recognizing revenue for products and services, the Company determines the transaction price of contracts with customers, which may consist of fixed and variable consideration. Determining the transaction price may require judgment by management, which includes identifying performance obligations, estimating variable consideration to include in the transaction price, and determining whether promised goods or services can be distinguished in the context of the contract. The majority of the CT segment revenue is chemical products that are sold at a point in time based on when control transfers to the customer determined by agreed upon delivery terms. Contracts with customers for the sale of products generally state the terms of the sale, including the quantity and price of each product purchased. Additionally, the CT segment offers various services associated to products sold which includes field services, installation, maintenance, and other functions. These services are recognized upon completion of commissioning and installation due to the short-term nature of the performance obligation when the Company has a right to invoice the customer. The DA segment recognizes revenue for sales of equipment at the time of sale based on when control transfers to the customer based on agreed upon delivery terms. Additionally, the Company offers various services associated to products sold which includes field services, installation, maintenance, and other functions. Services are recognized upon completion of commissioning and installation due to the short-term nature of the performance obligation. There may be additional performance obligations related to providing ongoing or reoccurring maintenance. Revenue for these types of arrangements is recognized ratably over time throughout the contract period. Additionally, the Company may provide subscription-type arrangements with customers in which monthly reoccurring revenue is recognized ratably over time in accordance with agreed upon terms and conditions. Customers may be invoiced for such maintenance and subscription-type arrangements and revenue not yet recognizable is reported under accrued liabilities and deferred revenue on the consolidated balance sheets. Subscription-type arrangements were not a material revenue stream in the years ended December 31, 2022 and 2021. Payment terms for both the CT and DA segments are customarily 30-60 days for domestic and 90-120 days for international from invoice receipt. Under revenue contracts for both products and services, customers are invoiced once the performance obligations have been satisfied, at which point payment is unconditional. Contract assets associated with incomplete performance obligations are not material. The Company applies several practical expedients including: •Sales commissions are expensed as selling, general and administrative expenses when incurred because the amortization period is generally one year or less. •The Company’s payment terms are short-term in nature with settlements of one year or less. As a result, the Company does not adjust the promised amount of consideration for the effects of a significant financing component. •In most service contracts, the Company has the right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance obligations completed to date and as such the Company recognizes revenue in the amount to which it has a right to invoice. •The Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer. Such taxes are included in accrued liabilities on our consolidated balance sheet until remitted to the governmental agency. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales in our consolidated statement of operations.
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Inventories | Inventories Inventories consist of raw materials and finished goods and are stated at the lower of cost determined using the weighted-average cost method, or net realizable value. Finished goods inventories include raw materials, direct labor and production overhead. The Company periodically reviews inventories on hand and current market conditions to determine if the cost of raw materials and finished goods inventories exceed current market prices and impairs the cost basis of the inventory accordingly. Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its net realizable value if those amounts are determined to be less than cost. Write-downs or write-offs of inventory are charged to cost of sales.
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Property and Equipment | Property and equipment Property and equipment are stated at cost. The cost of ordinary maintenance and repair is charged to operating expense, while replacement of critical components and major improvements are capitalized. Depreciation or amortization of property and equipment, including operating lease right-of-use assets (“ROU”), is calculated using the straight-line method over the shorter of the lease term or the asset’s estimated useful life as follows:
Property and equipment, including ROU assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. If events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable, the Company first compares the carrying amount of an asset or asset group to the sum of the undiscounted future cash flows expected to result from the use and eventual disposal of the asset. If the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposal of the asset, the Company will determine the fair value of the asset or asset group. The amount of impairment loss recognized is the excess of the asset or asset group’s carrying amount over its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. There were no impairments of property and equipment and ROU assets during the years ended December 31, 2022 and 2021. Assets to be disposed of are reported as assets held for sale at the lower of the carrying amount or the asset’s fair value less cost to sell and depreciation is ceased. Upon sale or other disposition of an asset, the Company recognizes a gain or loss on disposal measured as the difference between the net carrying amount of the asset and the net proceeds received.
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Leases | Leases The Company leases certain facilities, land, vehicles, and equipment. The Company determines if an arrangement is classified as a lease at inception of the arrangement. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the related lease. Finance leases are under the current and non-current liabilities and the underlying assets are included in property and equipment on the consolidated balance sheet. As most of the Company’s leases do not provide an implicit rate of return, on a quarterly basis, the Company’s incremental borrowing rate is used, together with the lease term information available at commencement date of the lease, in determining the present value of lease payments. Operating lease liabilities include related options to extend or terminate lease terms that are reasonably certain of being exercised. Leases with an initial term of 12 months or less (“short term leases”) are not recorded on the balance sheet; and the lease expense on short-term leases is recognized on a straight-line basis over the lease term.
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Convertible Notes Payable and Liability Classified Contract Consideration Convertible Notes payable | Convertible Notes Payable and Liability Classified Contract Consideration Convertible Notes Payable The Company accounts for the Convertible Notes Payable at amortized cost pursuant to Financial Accounting Standards Board (“FASB”) ASC Topic 470, Debt. The Company accounts for the Contract Consideration Convertible Notes Payable issued as consideration related to a related party contract (see Note 10, “Debt and Convertible Notes Payable”), as liability classified convertible instruments in accordance with FASB ASC 718, “Stock Compensation” (“ASC 718”). Under ASC 718, liability classified convertible instruments are measured at fair value at the grant date and at each reporting date (see Note 11, “Fair Value Measurements”) with the change in fair value included in the consolidated statements of operations.
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Fair Value Measurements | Fair Value Measurements The Company categorizes financial assets and liabilities using a three-tier fair value hierarchy, based on the nature of the inputs used to determine fair value. Inputs refer broadly to assumptions that market participants would use to value an asset or liability and may be observable or unobservable. When determining the fair value of assets and liabilities, the Company uses the most reliable measurement available. See Note 11, “Fair Value Measurements.” Fair Value MeasurementsFair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement. •Level 1 — Quoted prices in active markets for identical assets or liabilities; •Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and •Level 3 — Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entity’s assumptions about the inputs.
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Foreign Currency Translation | Foreign Currency TranslationThe Company’s functional currency is primarily the U.S. dollar. The Company operates principally in the United States and substantially all assets and liabilities of the Company are denominated in U.S. dollars. Financial statements of foreign subsidiaries that are not U.S. dollar functional currency are prepared using the currency of the primary economic environment of the foreign subsidiaries as the functional currency. Assets and liabilities of those foreign subsidiaries are translated into U.S. dollars at exchange rates in effect as of the end of identified reporting periods. Revenue and expense transactions are translated using the average monthly exchange rate for the reporting period. Resultant translation adjustments are recognized as other comprehensive income (loss) within stockholders’ equity. | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive Loss | Comprehensive Loss Comprehensive loss encompasses all changes in stockholders’ equity, except those arising from investments and distributions to stockholders. The Company’s comprehensive loss includes consolidated net loss and foreign currency translation adjustments.
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Research and Development Costs | Research and Development Costs Expenditures for research activities relating to product development and improvement are charged to expense as incurred.
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Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for temporary differences between financial statement carrying amounts and the tax bases of assets and liabilities and are measured using the tax rates expected to be in effect when the differences reverse. Deferred tax assets are also recognized for operating loss and tax credit carry forwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The establishment of a valuation allowance requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company’s policy is to record interest and penalties related to uncertain tax positions as income tax expense.
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Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense, related to stock options, restricted stock awards and restricted stock units, is recognized based on their grant-date fair values. The Company recognizes compensation expense, net of estimated forfeitures, on a straight-line basis over the requisite service period of the award. Estimated forfeitures are based on historical experience.
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Stock Warrants | Stock WarrantsThe Company evaluated the Prefunded Warrants issued in June 2022 (see Note 14, “Stockholders’ Equity) in accordance with ASC 815-40, “Contracts in Entity’s Own Equity” and determined that the warrants meet the criteria to be classified within stockholders’ equity and recorded the proceeds received for the Prefunded Warrants within additional paid in capital in the consolidated balance sheets. | ||||||||||||||||||||||||||||||||||||||||||
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from these estimates. Significant items subject to estimates and assumptions include the useful lives of property and equipment; long lived asset impairment assessments; stock-based compensation expense; valuation allowances for accounts receivable, inventories, and deferred tax assets; recoverability and timing of the realization of contract assets; and fair value of liability classified Contract Consideration Convertible Notes Payable and equity classified stock warrants.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Changes to U.S. GAAP are established by the FASB. We evaluate the applicability and impact of all authoritative guidance issued by the FASB. Guidance not listed below was assessed and determined to be either not applicable, clarifications of items listed below, immaterial or already adopted by the Company. New Accounting Standards Issued and Adopted as of January 1, 2022 The FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” This standard changes the accounting for convertible instruments by reducing the number of accounting models, amends the requirements for a conversion option to be classified in equity and amends diluted earnings per share calculations for certain convertible debt instruments. The pronouncement is effective for smaller reporting companies for fiscal years beginning after December 15, 2023, with early adoption allowed for fiscal years beginning after December 15, 2020. The Company adopted this standard as of January 1, 2022, and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. The FASB issued ASU No. 2021-10, “Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance.” This standard provides guidance on disclosures for transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The pronouncement is effective for fiscal years beginning after December 15, 2021.The Company adopted this standard as of January 1, 2022 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. New Accounting Standards Issued But Not Adopted as of December 31, 2022 The FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” This standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects estimates of expected credit losses over their contractual life that are recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. The pronouncement is effective for smaller reporting companies for fiscal years beginning after December 15, 2022. The Company regularly evaluates its accounts receivable to estimate amounts that will not be collected and records the appropriate allowance for doubtful accounts as a charge to operating expenses therefore the Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements and related disclosures.
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Earnings (Loss) Per Share | Basic loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted loss per common share is calculated by dividing the adjusted net loss by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. Potentially dilutive common share equivalents consist of incremental shares of common stock issuable upon conversion of convertible notes payable, exercise of stock warrants and vesting and settlement of stock awards. The dilutive effect of non-vested stock issued under share‑based compensation plans, shares issuable under the Employee Stock Purchase Plan (ESPP), employee stock options outstanding, and the prefunded stock warrants are computed using the treasury stock method. The dilutive effect of the Convertible Notes is computed using the if converted method in accordance with ASU 2020-06, which was adopted by the Company on January 1, 2022 (see Note 2, “Summary of Significant Accounting Policies”). | ||||||||||||||||||||||||||||||||||||||||||
Segment 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: 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 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 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.
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Summary of Significant Accounting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of allowance for doubtful accounts for continuing operations | Changes in the allowance for doubtful accounts are as follows (in thousands):
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Schedule of property and equipment | Depreciation or amortization of property and equipment, including operating lease right-of-use assets (“ROU”), is calculated using the straight-line method over the shorter of the lease term or the asset’s estimated useful life as follows:
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Revenue from Contracts with Customers (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disaggregation of revenue and cost of sales | Total revenue disaggregated by revenue source is as follows (in thousands):
(1) Product revenues include sales to related parties as described in Note 18, “Related Party Transactions.” Disaggregation of Cost of Sales The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs which cannot be directly attributable to either tangible goods or services. Total cost of sales disaggregated is as follows (in thousands):
Cost of sales split between external and related party sales is as follows (in thousands):
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Contract Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of outstanding contract assets | Contract assets are as follows (in thousands):
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Inventories (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of inventory | Inventories are as follows (in thousands):
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Schedule of reserve for excess and obsolete inventory | Changes in the reserve for excess and obsolete inventory are as follows (in thousands):
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Property and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property and equipment | Depreciation or amortization of property and equipment, including operating lease right-of-use assets (“ROU”), is calculated using the straight-line method over the shorter of the lease term or the asset’s estimated useful life as follows:
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Leases (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of lease expense and supplemental cash flow information | The components of lease expense and supplemental cash flow information are as follows (in thousands):
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Schedule of maturities of lease liabilities | Maturities of lease liabilities as of December 31, 2022 are as follows (in thousands):
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Schedule of maturities of lease liabilities | Maturities of lease liabilities as of December 31, 2022 are as follows (in thousands):
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Schedule of supplemental balance sheet information | Supplemental balance sheet information related to leases is as follows (in thousands):
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Accrued Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Current Accrued Liabilities | Current accrued liabilities are as follows (in thousands):
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Debt and Convertible Notes Payable (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | Long-term debt, including current portion, is as follows (in thousands):
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Fair Value Measurements (Tables) |
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value measurements, recurring | The following table presents the Company’s liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy (in thousands):
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Schedule of valuation techniques |
The key inputs into the Monte Carlo simulation used to estimate the fair value of the Initial ProFrac Agreement Contract Consideration Convertible Notes Payable maturing February 2, 2023, as of December 31, 2022 were as follows:
The key inputs into the Monte Carlo simulation used to estimate the fair value of the Amended ProFrac Agreement Contract Consideration Convertible Notes Payable, on the issuance date of May 17, 2022, and as of December 31, 2022 were as follows:
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Schedule of fair value, liabilities measured on recurring basis, unobservable input reconciliation | The following table presents the changes in balances of liabilities for the years ended December 31, 2022 and 2021 classified as Level 3 balances (in thousands):
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of income tax benefit | Components of the income tax benefit are as follows (in thousands):
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Schedule of domestic and foreign net loss before taxes | The components of loss before income taxes are as follows (in thousands):
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Schedule of effective income tax rate reconciliation | The income tax benefit differed from the amounts computed by applying the U.S. federal income tax rate of 21% respectively, to loss before income tax for the reasons set forth below:
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Schedule of deferred tax assets and liabilities | The component of deferred tax assets and liabilities are as follows (in thousands):
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Stockholders’ Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of valuation assumptions | The key inputs into the Black-Scholes Option Pricing Model used to estimate the fair value of the Pre-Funded Warrants as of the issuance on June 21, 2022 were as follows:
The following table sets forth significant assumptions used in the Monte Carlo model for market-based options to determine the fair value of the options at the date of grant for the year ended December 31, 2021. There were no options granted during the year ended December 31, 2022.
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Stock-Based Compensation and Other Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock options | Stock option activity for the years ended December 31, 2022 and 2021, are as follows:
The below table shows the aggregate intrinsic value and weighted average remaining contractual term of share options outstanding, currently exercisable and vested or expected to vest.
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Schedule of valuation assumptions | The key inputs into the Black-Scholes Option Pricing Model used to estimate the fair value of the Pre-Funded Warrants as of the issuance on June 21, 2022 were as follows:
The following table sets forth significant assumptions used in the Monte Carlo model for market-based options to determine the fair value of the options at the date of grant for the year ended December 31, 2021. There were no options granted during the year ended December 31, 2022.
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Schedule of restricted stock activity | Restricted stock share activity for the years ended December 31, 2022 and 2021, are as follows:
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Schedule of restricted stock unit activity | Restricted stock units activity for the years ended December 31, 2022 and 2021, are as follows:
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Loss Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of basic and diluted | The calculation of the basic and diluted loss per share for the years ended December 31, 2022 and 2021 is as follows (in thousands):
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Supplemental Cash Flow Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of supplemental cash flow information | Supplemental cash flow information is as follows (in thousands):
.
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Business Segment, Geographic and Major Customer and Supplier Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial information regarding reportable segments | Summarized financial information of the reportable segments is as follows (in thousands):
(1) CT loss from operations includes a credit of $7.6 million from the release of accrued costs relating to the ADM settlement, see Note 13, “Commitments and Contingencies”. Assets of the Company by reportable segments are as follows (in thousands):
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Schedule of revenue by geographic location | Revenue by geographic location is as follows (in thousands):
(1) Includes revenue from related parties of $81,748 and $3,641, respectively.
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Schedule of revenue by major customers | Revenue from major customers, as a percentage of consolidated revenue, is as follows (in thousands):
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Schedule of expenditure with major suppliers by reporting segments | Expenditure with major suppliers, as a percentage of consolidated supplier expenditure, is as follows (in thousands):
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Organization and Nature of Operations (Details) |
12 Months Ended |
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Dec. 31, 2022
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operation segments (segments) | 2 |
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accounting Policies [Abstract] | ||
Restricted cash | $ 100 | $ 1,790 |
Funds held in escrow | $ 1,750 |
Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Accounts Receivable, Allowance for Credit Loss | ||
Balance, beginning of year | $ 659 | $ 1,316 |
Charges to provision for doubtful accounts, net of recoveries | 203 | (127) |
Write-offs | (239) | (530) |
Balance, end of year | $ 623 | $ 659 |
Summary of Significant Accounting Policies - Revenue Recognition (Details) |
Dec. 31, 2022 |
---|---|
Chemistry Technologies | Minimum | |
Segment Reporting Information | |
Payment period (in days) | 30 days |
Chemistry Technologies | Minimum | International | |
Segment Reporting Information | |
Payment period (in days) | 90 days |
Chemistry Technologies | Maximum | |
Segment Reporting Information | |
Payment period (in days) | 60 days |
Chemistry Technologies | Maximum | International | |
Segment Reporting Information | |
Payment period (in days) | 120 days |
Data Analytics | Minimum | |
Segment Reporting Information | |
Payment period (in days) | 30 days |
Data Analytics | Minimum | International | |
Segment Reporting Information | |
Payment period (in days) | 90 days |
Data Analytics | Maximum | |
Segment Reporting Information | |
Payment period (in days) | 60 days |
Data Analytics | Maximum | International | |
Segment Reporting Information | |
Payment period (in days) | 120 days |
Summary of Significant Accounting Policies - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
ProFrac Agreement | |
Debt Instrument | |
Amortization period | 10 years |
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Disaggregation of Revenue | ||
Total revenues | $ 136,092 | $ 43,268 |
Products | ||
Disaggregation of Revenue | ||
Total revenues | 132,521 | 40,265 |
Services | ||
Disaggregation of Revenue | ||
Total revenues | $ 3,571 | $ 3,003 |
Revenue from Contracts with Customers - Cost Of Revenue (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Disaggregation of Revenue | ||
Cost of sales for external customers | $ 56,844 | $ 36,646 |
Cost of sales for related parties | 85,948 | 3,366 |
Cost of sales | 142,792 | 40,012 |
Products | ||
Disaggregation of Revenue | ||
Cost of sales | 126,914 | 24,083 |
Services | ||
Disaggregation of Revenue | ||
Cost of sales | 285 | 532 |
Other | ||
Disaggregation of Revenue | ||
Cost of sales | $ 15,593 | $ 15,397 |
Revenue from Contracts with Customers - Narrative (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
ADM Agreement | |
Disaggregation of Revenue | |
Cost of goods and services, credits | $ 7.6 |
Contract Assets - Contract Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Contract Asset | ||
Contract assets | $ 83,060 | $ 0 |
Less accumulated amortization | (3,371) | 0 |
Contract assets, net | 79,689 | 0 |
Current contract assets | (7,113) | 0 |
Long-term contract assets | $ 72,576 | $ 0 |
Contract Assets - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2022 |
May 17, 2022 |
Feb. 02, 2022 |
Dec. 31, 2021 |
|
Disaggregation of Revenue | ||||
Contract assets | $ 83,060 | $ 0 | ||
Capitalized contract fees | 3,600 | |||
Long-term contract assets | 72,576 | $ 0 | ||
Amortization of contract into revenue | $ 3,400 | |||
ProFrac Agreement | ||||
Disaggregation of Revenue | ||||
Contract assets | $ 69,500 | $ 10,000 |
Contract Assets - Estimated Amortization (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Revenue Recognition [Abstract] | ||
2023 | $ 7,113 | |
2024 | 8,456 | |
2025 | 8,845 | |
2026 | 8,845 | |
2027 | 8,845 | |
Thereafter through May 2032 | 37,585 | |
Contract assets, net | $ 79,689 | $ 0 |
Inventories - Components of inventory (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Inventory Disclosure [Abstract] | |||
Raw materials | $ 5,800 | $ 5,610 | |
Finished goods | 18,130 | 13,985 | |
Inventories | 23,930 | 19,595 | |
Less reserve for excess and obsolete inventory | (8,210) | (10,141) | $ (11,058) |
Inventories, net | $ 15,720 | $ 9,454 |
Inventories - Reserve for Excess and Obsolete Inventory (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Inventory Valuation Reserves Roll Forward | ||
Balance, beginning of year | $ 10,141 | $ 11,058 |
Charged to provisions | 1,734 | 623 |
Deductions for sales and disposals | (3,665) | (1,540) |
Balance, end of the year | $ 8,210 | $ 10,141 |
Inventories - Narratives (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Chemistry Technologies | ||
Inventory | ||
Inventory write-down | $ 1,600,000 | $ 600,000 |
Business exit, amount | 1,000,000 | |
Data Analytics | ||
Inventory | ||
Inventory write-down | $ 100,000 | $ 0 |
Property and Equipment - Narratives (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022
USD ($)
Facility
|
Dec. 31, 2021
USD ($)
|
|
Property, Plant and Equipment | ||
Depreciation | $ 734 | $ 1,011 |
Proceeds from sale of assets held for sale | 5,800 | |
Gain on the sales of property | $ 2,916 | $ 94 |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||
Property, Plant and Equipment | ||
Number of facilities | Facility | 2 |
Leases - Narratives (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Leases [Abstract] | ||
Rental income | $ 375 | $ 197 |
Leases - Components of Lease Expense and Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Leases [Abstract] | ||
Operating lease expense | $ 2,393 | $ 797 |
Finance lease expense: | ||
Amortization of assets | 15 | 15 |
Interest on lease liabilities | 12 | 12 |
Total finance lease expense | 27 | 27 |
Short-term lease expense | 341 | 267 |
Total lease expense | 2,761 | 1,091 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | 2,934 | 1,107 |
Operating cash flows from finance leases | 39 | 62 |
Financing cash flows from finance leases | $ 6 | $ 8 |
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating Leases | ||
2023 | $ 4,159 | |
2024 | 2,676 | |
2025 | 1,391 | |
2026 | 1,418 | |
2027 | 1,339 | |
Thereafter | 3,444 | |
Total lease payments | 14,427 | |
Less: Interest | (3,055) | |
Present value of lease liabilities | 11,372 | $ 8,381 |
Finance Leases | ||
2023 | 39 | |
2024 | 20 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total lease payments | 59 | |
Less: Interest | (4) | |
Present value of lease liabilities | $ 55 | $ 94 |
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating Leases | ||
Operating lease right-of-use assets | $ 5,900 | $ 2,041 |
Current portion of operating lease liabilities | 3,328 | 602 |
Long-term operating lease liabilities | 8,044 | 7,779 |
Total operating lease liabilities | 11,372 | 8,381 |
Finance Leases | ||
Property and equipment | 147 | 147 |
Accumulated depreciation | (55) | (33) |
Property and equipment, net | 92 | 114 |
Current portion of finance lease liabilities | 36 | 41 |
Long-term finance lease liabilities | 19 | 53 |
Total finance lease liabilities | $ 55 | $ 94 |
Weighted Average Remaining Lease Term | ||
Operating leases (in years) | 5 years 3 months 18 days | 9 years 1 month 6 days |
Finance leases (in years) | 1 year 7 months 6 days | 2 years 10 months 24 days |
Weighted Average Discount Rate | ||
Operating leases (in percentage) | 9.30% | 8.90% |
Finance leases (in percentage) | 8.90% | 8.90% |
Goodwill (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Goodwill | ||
Impairment of goodwill | $ 0 | $ 8,092,000 |
Data Analytics | ||
Goodwill | ||
Impairment of goodwill | $ 8,100,000 | |
Goodwill | $ 0 |
Accrued Liabilities - Schedule of Current Accrued Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accrued liabilities, current | ||
Severance costs (see Note 13, “Commitments and Contingencies”) | $ 2,617 | $ 2,581 |
Loss on purchase commitments (Note 13, “Commitments and Contingencies”) | 0 | 1,750 |
Payroll and benefits | 684 | 1,054 |
Legal costs | 447 | 1,013 |
Contingent liability for earn-out provision | 583 | 608 |
Deferred revenue, current | 655 | 528 |
Taxes other than income taxes | 1,884 | 241 |
Other | 2,114 | 1,221 |
Total current accrued liabilities | $ 8,984 | $ 8,996 |
Debt and Convertible Notes Payable - Schedule of Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument | ||
Less current maturities | $ (2,052) | $ (1,436) |
Unsecured Debt | ||
Debt Instrument | ||
Total long-term debt, net of current portion | 2,736 | 3,352 |
Unsecured Debt | Flotek PPP loan | ||
Debt Instrument | ||
Flotek PPP loan | $ 4,788 | $ 4,788 |
Fair Value Measurements - Narratives (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Feb. 02, 2022 |
|
Assets Measured at Fair Value on a Nonrecurring Basis | |||
Impairment of goodwill | $ 0 | $ 8,092 | |
Recurring | Level 3 | |||
Assets Measured at Fair Value on a Nonrecurring Basis | |||
Convertible debt, fair value disclosures | $ 10,000 |
Income Taxes - Components of Income Tax (Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Current: | ||
Federal | $ 101 | $ 0 |
State | 2 | 16 |
Foreign | 0 | 0 |
Total current expense | 103 | 16 |
Deferred: | ||
Federal | 0 | 0 |
State | (125) | (56) |
Foreign | 0 | 0 |
Total deferred benefit | (125) | (56) |
Income tax benefit | $ (22) | $ (40) |
Income Taxes - Domestic and Foreign Income (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | ||
United States | $ (42,242) | $ (30,037) |
Foreign | (85) | (529) |
Loss before income taxes | $ (42,327) | $ (30,566) |
Income Taxes - Reconciliation of Effective Tax Rate (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory tax rate | 21.00% | 21.00% |
State income taxes, net of federal benefit | 0.20% | 0.10% |
Non-U.S. income taxed at different rates | (0.10%) | 0.50% |
Increase in tax benefit related to stock-based awards | (0.40%) | 0.10% |
Increase in valuation allowance | (21.80%) | (24.90%) |
Permanent differences related to CARES Act | 0.00% | 2.60% |
Other | 1.20% | 0.70% |
Effective income tax rate | 0.10% | 0.10% |
Income Taxes - Narratives (Details) - USD ($) $ in Thousands |
12 Months Ended | 48 Months Ended | |
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2022 |
|
Income Tax Disclosure [Abstract] | |||
Effective income tax rate (percent) | 0.10% | 0.10% | |
Current federal income tax expense | $ 101 | $ 0 | |
Operating loss carryforwards | 176,000 | $ 176,000 | |
Deferred tax assets, operating loss carryforwards, subject to expiration | $ 46,400 | $ 46,400 | |
Percentage of net operating loss carryforward that can offset net income | 100.00% | 100.00% | |
Deferred tax assets, operating loss carryforwards, not subject to expiration | $ 129,600 | $ 129,600 | |
Percentage of indefinite lived carryforward that can offset taxable in come per year | 80.00% | 80.00% | |
Cumulative losses | $ 215,500 | ||
Unremitted earnings outside the US | $ 7,400 | $ 8,500 | $ 7,400 |
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deferred tax assets: | ||
Net operating loss carryforwards | $ 41,453 | $ 33,166 |
Intangible assets | 4,066 | 2,916 |
Tax credit carryforwards | 4,011 | 4,001 |
Goodwill | 4,920 | 5,284 |
Property and equipment | 3,644 | 3,229 |
Lease liability | 2,634 | 1,750 |
Inventory valuation reserves | 2,033 | 2,675 |
Allowance for doubtful accounts | 1,180 | 1,184 |
Accrued liabilities | 320 | 569 |
Accrued compensation | 491 | 401 |
Equity compensation | 536 | 399 |
Interest limitation | 1,616 | 13 |
Other | 230 | 291 |
Total gross deferred tax assets | 67,134 | 55,878 |
Valuation allowance | (64,960) | (54,875) |
Total deferred tax assets, net | 2,174 | 1,003 |
Deferred tax liabilities: | ||
ROU asset | (1,377) | (453) |
Prepaid insurance and other | (393) | (271) |
Total gross deferred tax liabilities | (1,770) | (724) |
Net deferred tax assets | $ 404 | $ 279 |
Commitments and Contingencies (Details) - Terpene Supply Agreement - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 03, 2022 |
Oct. 29, 2021 |
Dec. 31, 2021 |
|
Other Commitments | |||
Litigation settlement, amount due to other party | $ 1,750 | ||
Settlement payments | $ 1,750 | ||
ADM Agreement | |||
Other Commitments | |||
Credits to cost of goods sold | $ 7,600 |
Stockholders’ Equity - Valuation of Assumptions (Details) - Prefunded Warrants $ in Millions |
Jun. 21, 2022
USD ($)
|
---|---|
Fair Value Measurement Inputs and Valuation Techniques | |
Strike price (exercise fee) | $ 4.5 |
Risk-free interest rate | |
Fair Value Measurement Inputs and Valuation Techniques | |
Measurement input | 0.0321 |
Expected volatility | |
Fair Value Measurement Inputs and Valuation Techniques | |
Measurement input | 0.900 |
Term until liquidation (years) | |
Fair Value Measurement Inputs and Valuation Techniques | |
Measurement input | 2.00 |
Stock price | |
Fair Value Measurement Inputs and Valuation Techniques | |
Measurement input | 1.11 |
Stock-Based Compensation and Other Benefit Plans - Stock-Based Incentive Plans (Details) - shares |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
2020 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Maximum number of shares that may be issued (in shares) | 3,000,000 | |
Shares remaining to be granted (in shares) | 2,800,000 | 4,200,000 |
2019 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Maximum number of shares that may be issued (in shares) | 1,000,000 | |
Shares remaining to be granted (in shares) | 2,800,000 | 4,200,000 |
2018 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Maximum number of shares that may be issued (in shares) | 8,500,000 | |
Shares remaining to be granted (in shares) | 2,800,000 | 4,200,000 |
Stock-Based Compensation and Other Benefit Plans - Stock Options - Narratives (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 19, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award | |||
Granted (in shares) | 0 | 1,448,959 | |
Number of stock options vested (in shares) | 500,000 | 200,000 | |
Number of stock options forfeited (in shares) | 0 | 777,084 | |
Compensation cost | $ 2.1 | $ 3.3 | |
Fair value of stock options vested | $ 0.3 | $ 0.2 | |
Subsequent Event | Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Outstanding stock options, expired (in shares) | 3,000,000 | ||
Unrecognized compensation expense, forfeited options | $ 1.8 |
Stock-Based Compensation and Other Benefit Plans - Schedule of Stock Options (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Shares | ||
Outstanding beginning balance (in shares) | 4,281,875 | 3,660,000 |
Granted (in shares) | 0 | 1,448,959 |
Forfeited (in shares) | 0 | (777,084) |
Expired (in shares) | (120,000) | (50,000) |
Outstanding ending balance (in shares) | 4,161,875 | 4,281,875 |
Vested or expected to be vested (in shares) | 3,889,147 | |
Weighted-Average Exercise Price | ||
Outstanding beginning balance (in USD per share) | ||
Granted (in USD per share) | 1.07 | |
Forfeited (in USD per share) | 1.02 | |
Expired (in USD per share) | 0.72 | 0.52 |
Outstanding ending balance (in USD per share) | 1.19 | |
Weighted-Average Fair Value | ||
Beginning balance (per share) | ||
Granted (per share) | 0.88 | |
Forfeited (per share) | 0.52 | |
Expired (per share) | $ 0.10 | 0.52 |
Ending balance (per share) |
Stock-Based Compensation and Other Benefit Plans - Share Options Outstanding, Exercisable and Vested or Expected to Vest (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Share Options Outstanding | |||
Number (in shares) | 4,161,875 | 4,281,875 | 3,660,000 |
Weighted-average exercise price (in USD per share) | $ 1.19 | ||
Aggregate intrinsic value | $ 121 | ||
Weighted-average remaining contractual term in years | 3 years 4 months 28 days | ||
Share Options Currently Exercisable | |||
Number (in shares) | 840,000 | ||
Weighted-average exercise price (in USD per share) | $ 1.28 | ||
Aggregate intrinsic value ($000’s) | $ 24 | ||
Weighted-average remaining contractual term in years | 2 years 1 month 24 days | ||
Share Options Vested or Expected to Vest | |||
Number (in shares) | 3,889,147 | ||
Weighted-average exercise price (in USD per share) | $ 1.19 | ||
Aggregate intrinsic value ($000’s) | $ 114 | ||
Weighted-average remaining contractual term in years | 3 years 5 months 4 days |
Stock-Based Compensation and Other Benefit Plans - Schedule of Significant Assumptions (Details) - shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award | ||
Granted (in shares) | 0 | 1,448,959 |
Market Based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Risk-free interest rate | 1.61% | |
Expected volatility of common stock | 90.00% | |
Expected life of options (in years) | 10 years | |
Dividend yield | 0.00% | |
Granted (in shares) | 0 |
Stock-Based Compensation and Other Benefit Plans - Restricted Stock and Restricted Stock Units- Narratives (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Restricted Stock, Performance-based | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Dividend yield | 3 years | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Fair value of vested restricted stock | $ 1.3 | $ 2.5 |
Award unrecognized compensation expense | $ 2.0 | $ 1.9 |
Award unrecognized compensation expense, expected period for recognition | 1 year 8 months 12 days | |
Granted (in shares) | 1,532,926 | 1,702,289 |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Award unrecognized compensation expense | $ 0.4 | $ 1.0 |
Granted (in shares) | 0 | 0 |
Stock-Based Compensation and Other Benefit Plans - Employee Stock Purchase Plan and Stock-Based Compensation Expense (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2013 |
|
Share-based Compensation Arrangement by Share-based Payment Award | |||
Non-cash share-based compensation expense | $ 3,800,000 | ||
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Maximum number of shares that may be issued (in shares) | 500,000 | ||
Percent of common stock fair market value | 85.00% | ||
Offering period | 3 months | ||
Maximum employee compensation payroll deductions may not exceed | 10.00% | ||
Maximum shares employees may purchase in any one offering period (in shares) | 1,000 | ||
Maximum shares employees may purchase each year, value | $ 25,000 | ||
Non-cash share-based compensation expense | $ 10,200 | 23,600 | |
Total fair value of the shares purchased under the plan | $ 100,000 | $ 200,000 |
Stock-Based Compensation and Other Benefit Plans - 401(k) Retirement Plan (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 01, 2015 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Defined Contribution Plan Disclosure [Line Items] | |||
Compensation expense related to 401(k) retirement plan | $ 0.3 | $ 0.2 | |
Up to 2 Percent | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Company match | 100.00% | ||
Employee contribution | 2.00% |
Loss Per Share - Narrative (Details) - shares shares in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities excluded from calculation of loss per share (in shares) | 598 | 906 |
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Supplemental cash payment information: | ||
Interest paid | $ 45 | $ 26 |
Income taxes received | 0 | (351) |
Supplemental non-cash financing and investing activities: | ||
Issuance of convertible notes payable as consideration for ProFrac Agreement | 79,460 | 0 |
Conversion of convertible notes payable to common stock | $ 3,038 | $ 0 |
Business Segment, Geographic and Major Customer and Supplier Information - Assets by Reportable Segments (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Segment Reporting Information | ||
Total assets | $ 164,810 | $ 50,244 |
Operating Segments | Chemistry Technologies | ||
Segment Reporting Information | ||
Total assets | 146,542 | 34,387 |
Operating Segments | Data Analytics | ||
Segment Reporting Information | ||
Total assets | 5,645 | 7,329 |
Corporate and Other | ||
Segment Reporting Information | ||
Total assets | $ 12,623 | $ 8,528 |
Business Segment, Geographic and Major Customer and Supplier Information - Narratives (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Segment Reporting Information | ||
Increase in customer asset | $ 3,600 | $ 0 |
Chemistry Technologies | ||
Segment Reporting Information | ||
Increase in customer asset | $ 79,700 |
Business Segment, Geographic and Major Customer and Supplier Information - Geographic Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Revenues from External Customers and Long-Lived Assets | ||
Total revenues | $ 136,092 | $ 43,268 |
U.S | ||
Revenues from External Customers and Long-Lived Assets | ||
Total revenues | 124,399 | 33,187 |
UAE | ||
Revenues from External Customers and Long-Lived Assets | ||
Total revenues | 9,257 | 4,512 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets | ||
Total revenues | $ 2,436 | $ 5,569 |
Business Segment, Geographic and Major Customer and Supplier Information - Major Customers (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Segment Reporting Information | ||
Revenue from external customers | $ 54,344 | $ 39,627 |
Revenue from related party | 81,748 | 3,641 |
Customer Concentration Risk | ProFrac Services, LLC | Sales | ||
Segment Reporting Information | ||
Revenue from external customers | $ 80,359 | |
Percentage of revenue by major customers (in percentage) | 59.00% | |
Customer Concentration Risk | Customer B | Sales | ||
Segment Reporting Information | ||
Revenue from external customers | $ 14,395 | $ 11,632 |
Percentage of revenue by major customers (in percentage) | 10.60% | 26.00% |
Business Segment, Geographic and Major Customer and Supplier Information - Major Suppliers (Details) - Purchases - Cost of Goods and Service - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Supplier A | ||
Segment Reporting Information | ||
Supplies expense | $ 25,057 | |
Total spend (in percentage) | 27.70% | |
Supplier B | ||
Segment Reporting Information | ||
Supplies expense | $ 15,302 | |
Total spend (in percentage) | 16.90% | |
Supplier C | ||
Segment Reporting Information | ||
Supplies expense | $ 15,255 | $ 3,643 |
Total spend (in percentage) | 16.80% | 17.00% |
Supplier D | ||
Segment Reporting Information | ||
Supplies expense | $ 4,562 | |
Total spend (in percentage) | 21.30% |
Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Thousands |
Feb. 02, 2023
$ / shares
shares
|
Jan. 19, 2023
USD ($)
shares
|
Jan. 01, 2023
fleet
|
---|---|---|---|
Subsequent Event | |||
Nominal exercise price (in dollars per share) | $ / shares | $ 0.0001 | ||
Prefunded Warrants | |||
Subsequent Event | |||
Conversion of notes to warrants (in shares) | 25,366,561 | ||
Common Stock | |||
Subsequent Event | |||
Conversion of notes to warrants (in shares) | 10,355,840 | ||
Mr.Gibson | |||
Subsequent Event | |||
Consideration payable to settle disputes | $ | $ 1,500 | ||
Shares lock up period | 6 months | ||
Mr.Gibson | Common Stock | |||
Subsequent Event | |||
Shares included In lock up agreement | 250,000 | ||
Amended ProFrac Agreement | |||
Subsequent Event | |||
Increase in number of active fleets | fleet | 30 |
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