Business Segment, Geographic and Major Customer and Supplier Information

12 Months Ended

Dec. 31, 2023

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 sustainability 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):

As of and for the years ended December 31,	Chemistry Technologies		Data Analytics		Corporate and Other		Total
2023
Revenue from external customers
Products	$	56,721	$	5,275	$	—	$	61,996
Services	2,295		2,227		—		4,522
Total revenue from external customers	59,016		7,502		—		66,518
Revenue from related party
Products	120,698		2		—		120,700
Services	205		635		—		840
Total revenue from related parties	120,903		637		—		121,540
Gross profit	20,345		3,918		—		24,263
Change in fair value of contract consideration convertible notes	(29,969)		—		—		(29,969)
Income (loss) from operations	39,043		(53)		(15,767)		23,223
Paid-in-kind interest on contract consideration convertible notes payable	2,129		—		—		2,129
Paid-in-kind interest on convertible notes payable	—		—		238		238
Interest on ABL	—		—		453		453
Other interest	—		—		37		37
Depreciation	613		95		26		734
Additions to long-lived assets	180		466		435		1,081
Income tax expense	—		—		(149)		(149)
2022
Revenue from external customers
Product	$	47,004	$	3,903	$	—	$	50,907
Service	1,956		1,481		—		3,437
Total revenue from external customers	48,960		5,384		—		54,344
Revenue from related party
Product	81,614		—		—		81,614
Service	4		130		—		134
Total revenue from related parties	81,618		130		—		81,748
Gross profit (loss)	(7,317)		617		—		(6,700)
Change in fair value of contract consideration convertible notes	(75)		—		—		(75)
Loss from operations	(14,729)		(2,877)		(17,815)		(35,421)
Paid-in-kind interest on contract consideration convertible notes payable	4,185		—		—		4,185
Paid-in-kind interest on convertible notes payable	—		—		1,771		1,771
Accrued issuance costs on convertible notes payable	—		—		912		912
Depreciation	668		63		3		734
Additions to long-lived assets	56		134		231		421
Income tax benefit	—		—		22		22

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

	December 31,
	2023		2022
Chemistry Technologies	$	138,559	$	146,542
Data Analytics	6,604		5,645
Corporate and Other	12,350		12,623
Total assets	$	157,513	$	164,810

Geographic Information

Revenue by country is based on the location where services are provided and products are sold. For the years ended December 31, 2023 and 2022, no individual countries other than the U.S accounted for more than 10% of revenue. Revenue by geographic location is as follows (in thousands):

	Years ended December 31,
	2023		2022
U.S. (1)	$	180,300	$	124,399
UAE	6,549		9,257
Other countries	1,209		2,436
Total revenue	$	188,058	$	136,092

(1) Includes revenue from related parties of $121,540 and $81,748, 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):

	Revenue		% of Total Revenue
Year ended December 31, 2023
Customer A (related party - ProFrac Services, LLC)	$	121,540	64.6	%

Year ended December 31, 2022
Customer A (related party - ProFrac Services, LLC)	$	80,359	59.0	%
Customer B	$	14,395	10.6	%

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):

	Expenditure		% of Total Expenditure
Year ended December 31, 2023
Supplier A	$	42,684	30.1	%
Supplier B	28,222		19.9	%
Supplier C	16,447		11.6	%

Year ended December 31, 2022
Supplier A	$	25,057	27.7	%
Supplier B	15,302		16.9	%
Supplier C	15,255		16.8	%