# EDGAR Filing Document

**Accession Number:** 0000928054
**File Stem:** 0000928054-25-000079
**Filing Date:** 2025-8
**Character Count:** 252298
**Document Hash:** 3446f4753934bc0d22e32cc190b50cf5
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000928054-25-000079.hdr.sgml**: 20250808

**ACCESSION NUMBER**: 0000928054-25-000079

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 100

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250808

**DATE AS OF CHANGE**: 20250808

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** FLOTEK INDUSTRIES INC/CN/
- **CENTRAL INDEX KEY:** 0000928054
- **STANDARD INDUSTRIAL CLASSIFICATION:** MISCELLANEOUS CHEMICAL PRODUCTS [2890]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 900023731
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-13270
- **FILM NUMBER:** 251196804

**BUSINESS ADDRESS:**
- **STREET 1:** 5775 N. SAM HOUSTON PARKWAY W.
- **STREET 2:** SUITE 400
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77086
- **BUSINESS PHONE:** 7138499911

**MAIL ADDRESS:**
- **STREET 1:** 5775 N. SAM HOUSTON PARKWAY W.
- **STREET 2:** SUITE 400
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77086

?xml version='1.0' encoding='ASCII'? ftk-20250630

---

| | |
|:---|:---|
| **UNITED STATES<br>SECURITIES AND EXCHANGE COMMISSION<br>Washington, D.C. 20549** | **UNITED STATES<br>SECURITIES AND EXCHANGE COMMISSION<br>Washington, D.C. 20549** |
| **FORM 10-Q** | **FORM 10-Q** |
| ☒ | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|  | **For the quarterly period ended June 30, 2025** |
| **or** | **or** |
| ☐ | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|  | **For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to** |
|  | **Commission File Number 1-13270** |

---

---

| |
|:---|
| **FLOTEK INDUSTRIES, INC.** |
| **(Exact name of registrant as specified in its charter)** |

---

---

| | |
|:---|:---|
| **Delaware** | **90-0023731** |
| **(State of other jurisdiction of<br>incorporation or organization)** | **(I.R.S. Employer<br>Identification No.)** |
| **5775 N. Sam Houston Parkway W., Suite 400, Houston, TX** | **77086** |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

**(713) 849-9911** 

**(Registrant's telephone number, including area code)**

**Securities registered pursuant to Section 12(b) of the Exchange Act:**

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.0001 par value | FTK | New York Stock Exchange |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒

Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At August 5, 2025, there were 29,857,883 outstanding shares of the registrant's common stock, $0.0001 par value.

------

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| **Forward-Looking Statements** | **Forward-Looking Statements** | <u>[3](#i8951c148ecc84b5781856603a63c5508_19)</u> |
| **PART I - FINANCIAL INFORMATION** | **PART I - FINANCIAL INFORMATION** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 1.](#i8951c148ecc84b5781856603a63c5508_238) | [Financial Statements](#i8951c148ecc84b5781856603a63c5508_238) |  |
|  | &nbsp;&nbsp;Unaudited Condensed Consolidated Balance Sheets at June 30, 2025 and December 31, 2024 | <u>[4](#i8951c148ecc84b5781856603a63c5508_118)</u> |
|  | &nbsp;&nbsp;Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024  | <u>[5](#i8951c148ecc84b5781856603a63c5508_121)</u> |
|  | &nbsp;&nbsp;Unaudited Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and 2024 | <u>[6](#i8951c148ecc84b5781856603a63c5508_124)</u> |
|  | &nbsp;&nbsp;Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024  | <u>[7](#i8951c148ecc84b5781856603a63c5508_127)</u> |
|  | &nbsp;&nbsp;Unaudited Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended June 30, 2025 and 2024  | <u>[8](#i8951c148ecc84b5781856603a63c5508_130)</u> |
|  | &nbsp;&nbsp;Notes to Unaudited Condensed Consolidated Financial Statements | <u>[10](#i8951c148ecc84b5781856603a63c5508_136)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 2.](#i8951c148ecc84b5781856603a63c5508_139) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#i8951c148ecc84b5781856603a63c5508_139) | <u>[30](#i8951c148ecc84b5781856603a63c5508_223)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 3.](#i8951c148ecc84b5781856603a63c5508_166) | [Quantitative and Qualitative Disclosures about Market Risk](#i8951c148ecc84b5781856603a63c5508_166) | <u>[38](#i8951c148ecc84b5781856603a63c5508_238)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 4.](#i8951c148ecc84b5781856603a63c5508_169) | [Controls and Procedures](#i8951c148ecc84b5781856603a63c5508_169) | <u>[38](#i8951c148ecc84b5781856603a63c5508_241)</u> |
| **[PART II](#i8951c148ecc84b5781856603a63c5508_115) - OTHER INFORMATION** | **[PART II](#i8951c148ecc84b5781856603a63c5508_115) - OTHER INFORMATION** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 1.](#i8951c148ecc84b5781856603a63c5508_175) | [L](#i8951c148ecc84b5781856603a63c5508_175)egal Proceedings | <u>[40](#i8951c148ecc84b5781856603a63c5508_247)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;Item 1A | Risk Factors | <u>[40](#i8951c148ecc84b5781856603a63c5508_250)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 2.](#i8951c148ecc84b5781856603a63c5508_181) | [Unregistered Sales of Equity Securities and Use of Proceeds](#i8951c148ecc84b5781856603a63c5508_181) | <u>[40](#i8951c148ecc84b5781856603a63c5508_253)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 3.](#i8951c148ecc84b5781856603a63c5508_184) | [Defaults Upon Senior Securities](#i8951c148ecc84b5781856603a63c5508_184) | <u>[40](#i8951c148ecc84b5781856603a63c5508_256)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 4.](#i8951c148ecc84b5781856603a63c5508_187) | [Mine Safety Disclosures](#i8951c148ecc84b5781856603a63c5508_187) | <u>[40](#i8951c148ecc84b5781856603a63c5508_259)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 5.](#i8951c148ecc84b5781856603a63c5508_193) | [Other Information](#i8951c148ecc84b5781856603a63c5508_193) | <u>[40](#i8951c148ecc84b5781856603a63c5508_262)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 6.](#i8951c148ecc84b5781856603a63c5508_196) | [Exhibits](#i8951c148ecc84b5781856603a63c5508_196) | <u>[42](#i8951c148ecc84b5781856603a63c5508_325)</u> |
| **SIGNATURES** | **SIGNATURES** | <u>[44](#i8951c148ecc84b5781856603a63c5508_328)</u> |

---

------

**FORWARD-LOOKING STATEMENTS**

*In this Quarterly Report on Form 10-Q (this "Quarterly Report"), unless the context otherwise requires, the terms "Flotek," the "Company," "we," "us" and "our" refer to Flotek Industries, Inc. and its wholly-owned subsidiaries.*

This Quarterly Report on Form 10-Q, and in particular, Part I, Item 2 — "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are not historical facts, but instead represent the current assumptions and beliefs regarding future events of Flotek, many of which, by their nature, are inherently uncertain and outside the Company's control. Such statements include, but are not limited to, estimates, projections, and statements related to the Company's business plan or performance under the ProFrac Agreement (defined below) or Lease Agreement (defined below), objectives, expected operating results, and assumptions upon which those statements are based. The forward-looking statements contained in this Quarterly Report are based on information available as of the date of this Quarterly Report.

The forward-looking statements relate to future industry trends and economic conditions, forecast performance or results of current and future initiatives and the outcome of contingencies and other uncertainties that may have a significant impact on the Company's business, future operating results and liquidity. These forward-looking statements generally are identified by words including but not limited to, "anticipate," "believe," "estimate," "commit," "budget," "aim," "potential," "schedule," "continue," "intend," "expect," "plan," "forecast," "target," "think," "likely," "project" and similar expressions, or future-tense or conditional constructions such as "will," "may," "should," "could" and "would," or the negative thereof or other variations thereon or comparable terminology. The Company cautions that these statements are merely predictions and are not to be considered guarantees of future performance. Forward-looking statements may also include statements regarding the anticipated performance under long-term supply or lease agreements or amendments thereto and the potential value thereof or potential revenue or liquidated damages thereunder. Forward-looking statements are based upon current expectations and assumptions that are subject to risks and uncertainties that can cause actual results to differ materially from those projected, anticipated or implied.

A detailed discussion of potential risks and uncertainties that could cause actual results and events to differ materially from forward-looking statements include, but are not limited to, those discussed in Part I, Item 1A — "Risk Factors" of the Annual Report on Form 10-K for the year ended December 31, 2024 ("Annual Report" or "2024 Annual Report") filed with the Securities and Exchange Commission ("SEC") on March 12, 2025 and Part II, Item 1A — "Risk Factors" in this Quarterly Report, and periodically in subsequent reports filed with the SEC. The Company has no obligation, and we disclaim any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information or future events, except as required by law.

In certain places in this Quarterly Report on Form 10-Q, we may refer to statements provided by third parties that purport to describe trends or developments in supply chain or energy exploration and production activity and we specifically disclaim any responsibility for the accuracy and completeness of such information and have undertaken no steps to update or independently verify such information.

The following information contained in this Quarterly Report on Form 10-Q should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in Part 1, Item 1 of this Quarterly Report on Form 10-Q and related disclosures and our 2024 Annual Report.

------

**PART I - FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**FLOTEK INDUSTRIES INC.**

**UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS** 

**(in thousands, except share data)**

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| **ASSETS** | | |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $5028 | $4404 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 103 | 102 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for credit losses of $430 and $447 at June 30, 2025 and December 31, 2024, respectively | 22221 | 17386 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, related party, net of allowance for credit losses of $0 at June 30, 2025 and December 31, 2024 | 37350 | 52370 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories, net | 12302 | 13303 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 3084 | 2952 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current contract asset | 6743 | 5939 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 86831 | 96456 |
| Long-term contract asset | 59386 | 63105 |
| Property and equipment, net | 21223 | 6178 |
| Right-of-use assets | 3174 | 3326 |
| Deferred tax assets, net | 35 | 51 |
| Other long-term assets | 1594 | 1680 |
| **TOTAL ASSETS** | $172243 | $170796 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $36350 | $38073 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 3905 | 5912 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities, related party | 7248 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable | 85 | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest payable, related party | 701 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 1186 | 1486 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion of finance lease liabilities | 146 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset-based loan | 5055 | 4789 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt |  | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 54676 | 50368 |
| Deferred revenue, long-term |  | 14 |
| Note payable - related party, net of deferred financing costs | 39536 |  |
| Long-term operating lease liabilities | 5879 | 6514 |
| Long-term finance lease liabilities | 302 |  |
| **TOTAL LIABILITIES** | 100393 | 56896 |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, $0.0001 par value, 100,000 shares authorized; no shares issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 240,000,000 shares authorized; 30,968,827 shares issued and 29,854,440 shares outstanding at June 30, 2025; 30,938,073 shares issued and 29,826,508 shares outstanding at December 31, 2024  | 3 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 415637 | 464620 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income | 96 | 251 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (309160) | (316308) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury stock, at cost; 1,114,387 and 1,111,565 shares at June 30, 2025 and December 31, 2024, respectively  | (34726) | (34666) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 71850 | 113900 |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $172243 | $170796 |

---

The accompanying Notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

------

**FLOTEK INDUSTRIES, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**(in thousands, except per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| **Revenue:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue from external customers | $25182 | $18191 | $49605 | $31371 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue from related party | 33168 | 27961 | 64107 | 55155 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 58350 | 46152 | 113712 | 86526 |
| **Cost of sales** | 43943 | 36982 | 86856 | 68535 |
| **Gross profit** | 14407 | 9170 | 26856 | 17991 |
| **Operating costs and expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general, and administrative | 6796 | 6279 | 13078 | 12365 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset acquisition expenses | 4195 |  | 4195 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 374 | 222 | 626 | 442 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 455 | 481 | 810 | 888 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of property and equipment |  | (34) | (7) | (34) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating costs and expenses | 11820 | 6948 | 18702 | 13661 |
| **Income from operations** | 2587 | 2222 | 8154 | 4330 |
| **Other income (expense):** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (983) | (308) | (1212) | (586) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net | 181 | 75 | 287 | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expense | (802) | (233) | (925) | (537) |
| **Income before income taxes** | 1785 | 1989 | 7229 | 3793 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | (17) | (15) | (81) | (257) |
| **Net income** | $1768 | $1974 | $7148 | $3536 |
| **Income per common share:** | **Income per common share:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $0.05 | $0.07 | $0.22 | $0.12 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $0.05 | $0.06 | $0.21 | $0.12 |
| **Weighted average common shares:** | **Weighted average common shares:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted average common shares used in computing basic income per common share | 33947 | 29449 | 31827 | 29440 |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted average common shares used in computing diluted income per common share | 36231 | 30668 | 34026 | 30512 |

---

The accompanying Notes are an integral part of these Consolidated Financial Statements.

------

**FLOTEK INDUSTRIES, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

**(in thousands)**

&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Net income | $1768 | $1974 | $7148 | $3536 |
| &nbsp;&nbsp;Other comprehensive income: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | (110) | 16 | (155) | 58 |
| Comprehensive income | $1658 | $1990 | $6993 | $3594 |

---

The accompanying Notes are an integral part of these Consolidated Financial Statements.

------

**FLOTEK INDUSTRIES, INC.** 

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW**

**(in thousands)**

---

| | | |
|:---|:---|:---|
| | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income | $7148 | $3536 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration | (127) | (27) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of contract assets | 2916 | 2749 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 626 | 442 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 157 | 170 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses, net of recoveries | 261 | 79 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for excess and obsolete inventory | 250 | 433 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of property and equipment | (7) | (34) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash lease expense | 624 | 1236 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock compensation expense | 1137 | 642 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax expense | 16 | 216 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in current assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (5096) | 292 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, related party | (2532) | (5480) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 1448 | 192 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax receivable | (32) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (155) | 688 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (1722) | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | (1893) | (2837) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (935) | (1510) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable | 37 | (10) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest payable, related party | 701 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 2822 | 827 |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | (1309) | (229) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of assets | 7 | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (1302) | (195) |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on long term debt | (60) | (90) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from asset-based loan | 106950 | 83300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on asset-based loan | (106685) | (84994) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of note payable issuance costs | (480) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of stock warrant issuance costs | (456) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments to tax authorities for shares withheld from employees | (60) | (24) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of stock under Employee Stock Purchase Plan | 68 | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of stock from stock option exercises | 8 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments for finance leases | (25) | (19) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (740) | (1765) |
| **Effect of changes in exchange rates on cash and cash equivalents** | (155) | 58 |
| **Net change in cash and cash equivalents and restricted cash** | 625 | (1075) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at the beginning of period | 4404 | 5851 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash at the beginning of period | 102 | 102 |
| **Cash and cash equivalents and restricted cash at beginning of period** | 4506 | 5953 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents at end of period | 5028 | 4777 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash at the end of period | 103 | 101 |
| **Cash and cash equivalents and restricted cash at end of period** | $5131 | $4878 |

---

The accompanying Notes are an integral part of these Consolidated Financial Statements.

------

**FLOTEK INDUSTRIES, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**

**(in thousands)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** |
| | **Common Stock** | **Common Stock** | **Treasury Stock** | **Treasury Stock** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Other<br>Comprehensive<br>Income** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| | **Shares<br>Issued** | **Par<br>Value** | **Shares** | **Cost** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Other<br>Comprehensive<br>Income** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| Balance, March 31, 2025 | 30941 | $3 | 1114 | $(34689) | $465112 | $206 | $(310928) | $119704 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  | 1768 | 1768 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment |  |  |  |  |  | (110) |  | (110) |
| &nbsp;&nbsp;&nbsp;Stock issued under option exercises | 2 |  |  |  | 8 |  |  | 8 |
| &nbsp;&nbsp;&nbsp;Stock issued under employee stock purchase plan |  |  | (5) |  | 37 |  |  | 37 |
| &nbsp;&nbsp;&nbsp;Restricted stock granted | 26 |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Stock compensation expense |  |  |  |  | 676 |  |  | 676 |
| &nbsp;&nbsp;&nbsp;Shares withheld to cover taxes |  |  | 5 | (37) |  |  |  | (37) |
| &nbsp;&nbsp;&nbsp;Excess consideration over historical asset book value (Note 3) |  |  |  |  | (92400) |  |  | (92400) |
| &nbsp;&nbsp;&nbsp;Issuance of April 2025 Warrant, net (Note 3) |  |  |  |  | 42204 |  |  | 42204 |
| Balance, June 30, 2025 | 30969 | $3 | 1114 | $(34726) | $415637 | $96 | $(309160) | $71850 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** |
| | **Common Stock** | **Common Stock** | **Treasury Stock** | **Treasury Stock** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Other<br>Comprehensive<br>Income** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| | **Shares<br>Issued** | **Par<br>Value** | **Shares** | **Cost** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Other<br>Comprehensive<br>Income** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| Balance, March 31, 2024 | 30773 | $3 | 1112 | $(34514) | $463484 | $169 | $(325244) | $103898 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  | 1974 | 1974 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment |  |  |  |  |  | 16 |  | 16 |
| &nbsp;&nbsp;&nbsp;Stock issued under employee stock purchase plan |  |  | (9) |  | 28 |  |  | 28 |
| &nbsp;&nbsp;&nbsp;Restricted stock granted | 94 |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Stock compensation expense |  |  |  |  | 332 |  |  | 332 |
| &nbsp;&nbsp;&nbsp;Shares withheld to cover taxes |  |  | 4 | (14) |  |  |  | (14) |
| Balance, June 30, 2024 | 30867 | $3 | 1107 | $(34528) | $463844 | $185 | $(323270) | $106234 |

---

The accompanying Notes are an integral part of these Consolidated Financial Statements.

------

**FLOTEK INDUSTRIES, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**

**(in thousands)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** |
| | **Common Stock** | **Common Stock** | **Treasury Stock** | **Treasury Stock** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Other<br>Comprehensive<br>Income** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| | **Shares<br>Issued** | **Par<br>Value** | **Shares** | **Cost** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Other<br>Comprehensive<br>Income** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| Balance, December 31, 2024 | 30938 | $3 | 1112 | $(34666) | $464620 | $251 | $(316308) | $113900 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  | 7148 | 7148 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment |  |  |  |  |  | (155) |  | (155) |
| &nbsp;&nbsp;&nbsp;Stock issued under stock option exercises | 2 |  |  |  | 8 |  |  | 8 |
| &nbsp;&nbsp;&nbsp;Stock issued under employee stock purchase plan |  |  | (9) |  | 68 |  |  | 68 |
| &nbsp;&nbsp;&nbsp;Restricted stock granted | 26 |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Restricted stock forfeited |  |  | 3 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Restricted stock units vested | 3 |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Stock compensation expense |  |  |  |  | 1137 |  |  | 1137 |
| &nbsp;&nbsp;&nbsp;Shares withheld to cover taxes |  |  | 8 | (60) |  |  |  | (60) |
| &nbsp;&nbsp;&nbsp;Excess consideration over historical asset book value (Note 3) |  |  |  |  | (92400) |  |  | (92400) |
| &nbsp;&nbsp;&nbsp;Issuance of April 2025 Warrant, net (Note 3) |  |  |  |  | 42204 |  |  | 42204 |
| Balance, June 30, 2025 | 30969 | $3 | 1114 | $(34726) | $415637 | $96 | $(309160) | $71850 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** |
| | **Common Stock** | **Common Stock** | **Treasury Stock** | **Treasury Stock** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Other<br>Comprehensive<br>Income** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| | **Shares<br>Issued** | **Par<br>Value** | **Shares** | **Cost** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Other<br>Comprehensive<br>Income** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| Balance, December 31, 2023 | 30773 | $3 | 1109 | $(34504) | $463140 | $127 | $(326806) | $101960 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  | 3536 | 3536 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment |  |  |  |  |  | 58 |  | 58 |
| &nbsp;&nbsp;&nbsp;Stock issued under employee stock purchase plan |  |  | (19) |  | 62 |  |  | 62 |
| &nbsp;&nbsp;&nbsp;Restricted stock granted | 94 |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Restricted stock forfeited |  |  | 11 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Stock compensation expense |  |  |  |  | 642 |  |  | 642 |
| &nbsp;&nbsp;&nbsp;Shares withheld to cover taxes |  |  | 6 | (24) |  |  |  | (24) |
| Balance, June 30, 2024 | 30867 | $3 | 1107 | $(34528) | $463844 | $185 | $(323270) | $106234 |

---

The accompanying Notes are an integral part of these Consolidated Financial Statements.

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 1 — Organization and Nature of Operations**

***General***

Flotek strives to be the collaborative partner of choice for solutions that reduce the environmental impact of energy on air, water, land and people. An advanced technology-driven, chemical and data analytics company, Flotek seeks to provide unique and innovative solutions to its customers in both the domestic and international energy markets. The Company is committed to delivering products and services that endeavor to maximize customer returns by leveraging chemistry as the common value creation platform.

The Company's Chemistry Technologies ("CT") segment designs, develops, manufactures, packages, distributes and markets optimized chemistry solutions that we believe help customers improve their return on invested capital, lower operational costs and realize tangible environmental benefits aimed at enhancing the profitability of hydrocarbon producers.

The Company's Data Analytics ("DA") delivers real-time information and insights to its customers to enable optimization of operations and reduction of emissions and their carbon intensity. We believe customers using this technology have obtained significant benefits, including additional profits, by enhancing operations in crude/condensates stabilization, enhancing blending operations, reducing time impacting transmix operations, increasing efficiencies and optimization of gas plants, allowing for the use of significantly lower cost field gas instead of diesel to generate power, lowering emissions, protecting equipment and ensuring product quality while reducing giveaways, i.e., providing higher value products at lower value product prices. Our ability to facilitate the use of lower cost field gas to generate remote power solutions has been significantly enhanced through the acquisition of the assets described in Note 3, "Asset Acquisition."

The Company's two operating segments, CT and DA, are supported by its Research & Innovation ("R&I") advanced laboratory capabilities. For further discussion of our operations and segments, see Note 18, "Business Segment, Geographic and Major Customer Information."

As used herein, "Flotek," the "Company," "we," "our" and "us" refers to Flotek Industries, Inc. and/or the Company's wholly-owned subsidiaries. The use of these terms is not intended to connote any particular corporate status or relationship.

**Note 2 — Summary of Significant Accounting Policies**

Please refer to Note 2, "Summary of Significant Accounting Policies" to the consolidated financial statements from the 2024 Annual Report for the discussion of significant accounting policies.

***Accounts Receivable and Allowance for Credit Losses***

Changes in the allowance for credit losses are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| Balance, beginning of year | $447 | $745 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Charges to provision for credit losses, net of recoveries | 261 | 181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write-offs | (278) | (479) |
| Balance, end of period | $430 | $447 |

---

As of June 30, 2025 and December 31, 2024, the Company had not recorded an allowance for credit losses for the related party accounts receivable from ProFrac Services, LLC ("ProFrac Services") (see Note 17, "Related Party Transactions").

***Lessor Arrangements*** 

The Company accounts for leasing arrangements in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 842, "Leases" ("ASC 842"). On April 28, 2025, the Company entered into an equipment lease, the Lease Agreement (as defined below), with a related party customer under an operating lease arrangement (see Note 3, "Asset Acquisition"). At contract inception, an evaluation is performed to determine if the lease arrangement conveys the right to control the use of an identified asset. To the extent such rights of control are conveyed, a further assessment is made as to the applicable lease classification. In determining whether a transaction should be classified as a sales-type or operating lease, the Company considers the following criteria at lease commencement: (1) whether title of the asset transfers automatically or for a nominal fee by the end of the lease term, (2) whether the present value of the minimum lease payments equals or exceeds substantially all of the fair value of the leased asset, (3) whether the lease term is for the

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

major part of the remaining economic life of the leased asset , (4) whether the lease grants the lessee an option to purchase the leased asset that the lessee is reasonably certain to exercise, and (5) whether the underlying asset is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term. If any of these criteria are met, the lease is classified as a sales-type lease.

For the three and six month periods ended June 30, 2025 and 2024, the Company did not have any sales-type leases. For operating leases, rental income is recognized on a straight-line basis over the lease term as lease revenue. The cost of customer-leased equipment is recorded within Property and equipment, net in the balance sheets and depreciated over the equipment's estimated useful life. Depreciation expense associated with the leased equipment under operating lease arrangements is reflected in Depreciation in the statements of operations.

***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, have no material effect on the Company's financial statements or already adopted by the Company.

***New Accounting Standards Issued and Not Adopted as of June 30, 2025***

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"), which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for the Company prospectively to all annual periods beginning for the annual period ending December 31, 2025.

The FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures" ("ASU 2024-03"), which enhances the disclosures required for certain expense captions in the Company's annual and interim consolidated financial statements. ASU 2024-03 is effective prospectively or retrospectively for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its disclosures.

**Note 3 — Asset Acquisition**

The Company entered into a series of transactions in connection with an Asset Purchase Agreement, dated as of April 28, 2025 (the "Purchase Agreement"), with ProFrac GDM, LLC ("ProFrac GDM"), an indirect subsidiary of ProFrac Holding Corp. ("ProFrac"), and various subsidiaries of ProFrac, pursuant to which, among other things, the Company acquired certain mobile power generation assets, comprised of twenty-two operating units and eight units under construction, certain inventory and related intellectual property (the "Acquired Assets"). Concurrently, the Leased Equipment (as defined below) was leased back to ProFrac GDM pursuant to an Agreement for Equipment Rental, dated as of April 28, 2025, by and between PWRtek, LLC ("PWRtek"), a wholly-owned subsidiary of the Company, and ProFrac GDM (the "Lease Agreement") (collectively, the "PWRtek Transactions"). In accordance with FASB ASC 805, "Business Combinations," the acquisition of the Acquired Assets is classified as an asset acquisition between entities under common control.

Pursuant to the terms of the Lease Agreement, ProFrac GDM agreed to lease from PWRtek, for a period of six years, twenty-two operating mobile power generation assets, comprised of fourteen digitally enhanced mobile natural gas power generation filtration units and eight gas distribution units and eight additional units, comprised of seven gas distribution units and one mobile natural gas power generation filtration unit, that were under construction (collectively, the "Leased Equipment") as of April 28, 2025. The Lease Agreement provides for fixed rental rates for the Leased Equipment during the first five years of the Lease Agreement and then prevailing market rates during the sixth year. The Lease Agreement does not include a purchase option for the purchase of the Leased Equipment at the end of the Lease Agreement term. The Company began recognizing lease revenue associated with the twenty-two operating mobile power generation assets on April 28, 2025, the effective date of the Lease Agreement. With respect to the Leased Equipment under construction, the Company will recognize lease revenue at the earlier of the in-service date or January 1, 2026. In accordance with ASC 842, the Lease Agreement is accounted for as an operating lease.

Total consideration paid by the Company in connection with the PWRtek Transactions was $107.5 million, which consisted of the following: (1) an offset of $17.6 million against the Company's accrued 2024 Contract Shortfall Fee (see Note 17, "Related Party Transactions"), which was the consideration for the acquisition of the Acquired Assets, (2) a warrant (the "April 2025 Warrant") to purchase 6,000,000 shares of the Company's common stock, (3) a secured promissory note, issued by PWRtek in the initial principal amount of $40 million (the "PWRtek Note"), and (4) offsets against potential future period Contract

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

Shortfall Fee amounts that may become due under the ProFrac Agreement (see Note 17, "Related Party Transactions"). The estimated fair value of the Leased Equipment was deemed to be in excess of the total consideration of $107.5 million.

The April 2025 Warrant has a seven-year term and can be exercised on a cashless basis for nominal consideration at any time following the date on which the Company's stockholders have approved the issuance of the shares of the Company's common stock underlying the April 2025 Warrant. On July 9, 2025, the Company held a special stockholders meeting where the Company's stockholders approved the issuance of the 6,000,000 shares of the Company's common stock underlying the April 2025 Warrant. The fair value of the April 2025 Warrant was $42.7 million. The Company recorded the fair value of the April 2025 Warrant as additional paid in capital within stockholders' equity, net of $0.5 million of issuance costs, as the April 2025 Warrant is classified as equity.

The PWRtek Note provides for a five-year term and is subject to a 10% annual interest rate, payable quarterly in cash or in-kind (i.e., added to the principal balance quarterly) at PWRtek's option. The principal becomes due at the end of the five-year term on April 28, 2030. PWRtek's obligations under the PWRtek Note are secured by a first priority lien on the Acquired Assets, including the Leased Equipment, as well as certain other after-acquired property of PWRtek. While the PWRtek Note includes certain prepayment restrictions, Flotek and ProFrac GDM can each elect to apply up to fifty percent cumulatively of any future Contract Shortfall Fee (see Note 17, "Related Party Transactions") that becomes due and payable under the ProFrac Agreement to prepay principal and interest due under the PWRtek Note without penalty. The obligations under the PWRtek Note have been guaranteed by the Company. The Company recorded $0.5 million as deferred financing costs on April 28, 2025. As of June 30, 2025, there was $39.5 million outstanding, net of unamortized deferred financing costs of $0.5 million under the PWRtek Note. See Note 10 - "Debt" for additional information. For the three and six months ended June 30, 2025, interest expense related to the PWRtek Note was $0.7 million and as of June 30, 2025, interest payable related to the PWRtek Note was $0.7 million.

Contract Shortfall Fees for the measurement period of January 1, 2024 through December 31, 2024 totaled approximately $32.6 million (the "2024 Contract Shortfall Fees") and was included in accounts receivable, related party as of December 31, 2024. The Company collected $15.0 million of the 2024 Contract Shortfall Fees in cash in March 2025. The remaining 2024 Contract Shortfall Fees of $17.6 million were offset as consideration for the Acquired Assets as described above.

Due to ProFrac controlling more than 50% of the Company's outstanding shares (see Note 17, "Related Party Transaction"), the acquisition of the Acquired Assets qualified as a transfer of assets between entities under common control. As such, the Acquired Assets have been recorded at ProFrac's historical book value of approximately $15.1 million as of April 28, 2025. The total consideration paid by the Company in connection with the PWRtek Transactions in excess of ProFrac's historical book value of the Acquired Assets of $92.4 million was recorded as a reduction to additional paid in capital for the PWRtek Transactions within stockholders' equity. Financial results from the Lease Agreement and operation of the Acquired Assets are reported within the Company's DA segment. See Note 8 - "Leases" for additional information.

The following table summarizes the consideration transferred and the historical book value of identified Acquired Assets at the date of the PWRtek Transactions:

---

| | |
|:---|:---|
| | **April 28, 2025** |
| | **(in thousands)** |
| ***Components of consideration:*** | |
| &nbsp;&nbsp;April 2025 Warrant exercisable into 6,000,000 shares | $42660 |
| &nbsp;&nbsp;PWRtek Note | 40000 |
| &nbsp;&nbsp;2024 Contractual Shortfall Fee offset | 17552 |
| &nbsp;&nbsp;Future Contract Shortfall Fee offset | 7248 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total consideration** | $107460 |
| ***Asset historical book value:*** |  |
| &nbsp;&nbsp;Leased equipment | $14460 |
| &nbsp;&nbsp;Inventory | 600 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total assets book value** | $15060 |
| **Excess consideration over assets historical book value** | $92400 |

---

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 4 — Revenue from Contracts with Customers**

***Disaggregation of Revenue***

The Company differentiates revenue based on whether the source of revenue is attributable to product sales, service revenue or rental income. Product, service and rental revenues include sales to related parties as described in Note 17, "Related Party Transactions."

Total revenue disaggregated by revenue source is as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenue: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Products | $53406 | $44694 | $107031 | $83809 |
| &nbsp;&nbsp;&nbsp;Services | 1716 | 1458 | 3453 | 2717 |
| &nbsp;&nbsp;&nbsp;Rental | 3228 |  | 3228 |  |
|  | $58350 | $46152 | $113712 | $86526 |

---

***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 that cannot be directly attributed to either tangible goods or services.

Total cost of sales disaggregated is as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Cost of sales: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Tangible goods sold | $38933 | $32215 | $77165 | $59240 |
| &nbsp;&nbsp;&nbsp;Services | 147 | 88 | 326 | 182 |
| &nbsp;&nbsp;&nbsp;Other | 4863 | 4679 | 9365 | 9113 |
|  | $43943 | $36982 | $86856 | $68535 |

---

Other cost of sales represents costs directly associated with the generation of revenue that cannot be attributed directly to tangible goods sold or services. Other cost of sales for the three and six months ended June 30, 2025 includes $0.2 million related to the Lease Agreement. Examples of other costs of sales are certain personnel costs and equipment rental and insurance costs.

Cost of sales, disaggregated between external customers and related party, is as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Cost of sales: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of sales for external customers | $21658 | $17486 | $43318 | $30439 |
| &nbsp;&nbsp;&nbsp;Cost of sales for related party | 22285 | 19496 | 43538 | 38096 |
|  | $43943 | $36982 | $86856 | $68535 |

---

**Note 5 — Contract Assets**

Contract assets are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| Contract assets | $83060 | $83060 |
| Less accumulated amortization | (16931) | (14016) |
| Contract assets, net | 66129 | 69044 |
| Less current contract assets | (6743) | (5939) |
| Contract assets, long term | $59386 | $63105 |

---

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

In connection with entering into the Initial ProFrac Agreement (defined below) and Amended ProFrac Agreement (defined below) on February 2, 2022 and May 17, 2022, respectively, as discussed in Note 17, "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 June 30, 2025 and December 31, 2024, $59.4 million and $63.1 million, respectively, of the contract assets were classified as long term based upon our estimate of the forecasted revenues from the ProFrac Agreement that will not be realized within the next twelve months of the ProFrac Agreement. The Company's estimate of the timing of the future contract revenues is evaluated on a quarterly basis.

During the three months ended June 30, 2025 and 2024, the Company recognized $1.4 million and $1.5 million, respectively, of contract assets amortization that is recorded as a reduction of the transaction price included in related party revenue in the consolidated statement of operations. During the six months ended June 30, 2025 and 2024, the Company recognized $2.9 million and $2.7 million, respectively, of contract assets amortization that is recorded as a reduction of the transaction price included in 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.

---

| | |
|:---|:---|
| **Years ending December 31,** | **Amortization** |
| 2025 *(excluding first six months)* | $2798 |
| 2026 | 9006 |
| 2027 | 10347 |
| 2028 | 10347 |
| 2029 | 10347 |
| Thereafter through May 2032 | 23284 |
| Total contract assets | $66129 |

---

**Note 6 — Inventories** 

Inventories are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| Raw materials | $5049 | $4945 |
| Finished goods | 12214 | 13581 |
| Inventories | 17263 | 18526 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less reserve for excess and obsolete inventory | (4961) | (5223) |
| Inventories, net | $12302 | $13303 |

---

During the three months ended June 30, 2025 and 2024, additional reserves recorded were $0.2 million and $0.1 million, respectively, for the CT segment. For the three months ended June 30, 2025, additional reserves of $5 thousand were recorded for the DA segment with no additional reserves recorded for the three months ended June 30, 2024.

During the six months ended June 30, 2025 and 2024, additional reserves recorded were $0.2 million and $0.4 million, respectively, for the CT segment and $18 thousand and $13 thousand, respectively, for the DA segment.

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 7 — Property and Equipment**

Property and equipment are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| Land | $886 | $886 |
| Land improvements | 520 | 520 |
| Buildings and leasehold improvements | 6682 | 5722 |
| Machinery and equipment | 8661 | 8524 |
| Leased equipment | 14475 |  |
| Furniture and fixtures | 520 | 520 |
| Transportation equipment | 805 | 790 |
| Computer equipment and software | 1570 | 1531 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property and equipment | 34119 | 18493 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less accumulated depreciation | (12896) | (12315) |
| Property and equipment, net | $21223 | $6178 |

---

Leased equipment (See Note 3, "Asset Acquisition") has an estimated useful life of ten years.

Depreciation expense totaled $0.4 million and $0.2 million for the three months ended June 30, 2025 and 2024, respectively.Depreciation expense totaled $0.6 million and $0.4 million for the six months ended June 30, 2025 and 2024, respectively.

**Note 8 — Leases**

The components of lease expense and supplemental cash flow information are as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Operating lease expense | $413 | $753 | $904 | $1536 |
| Finance lease expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of assets | 29 | 4 | 29 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on lease liabilities | 8 |  | 8 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total finance lease expense | 37 | 4 | 37 | 7 |
| Short-term lease expense | 392 | 312 | 877 | 571 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total lease expense | $842 | $1069 | $1818 | $2114 |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating cash flows from operating leases | $1094 | $1334 | $2175 | $2988 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating cash flows from finance leases | 40 | 10 | 40 | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing cash flows from finance leases | 8 |  | 8 |  |

---

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

Maturities of lease liabilities as of June 30, 2025 are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| **Years ending December 31,** | **Operating Leases** | **Finance Leases** |
| *2025 (excluding first six months)* | $841 | $90 |
| 2026 | 1693 | 180 |
| 2027 | 1741 | 180 |
| 2028 | 1602 | 58 |
| 2029 | 1641 |  |
| Thereafter | 1407 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total lease payments | $8925 | $508 |
| Less: Interest | (1860) | (60) |
| &nbsp;&nbsp;&nbsp;&nbsp;Present value of lease liabilities | $7065 | $448 |

---

Supplemental balance sheet information related to leases is as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| **Operating Leases** | | |
| Operating lease right-of-use assets | $2730 | $3326 |
| Current portion of operating lease liabilities | 1186 | 1486 |
| Long-term operating lease liabilities | 5879 | 6514 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating lease liabilities | $7065 | $8000 |
| **Finance Leases** |  |  |
| Finance lease right-of-use assets | $444 | $— |
| Current portion of finance lease liabilities | $146 | $— |
| Long-term finance lease liabilities | 302 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total finance lease liabilities | $448 | $— |
| **Weighted Average Remaining Lease Term** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating leases | 5.2 years | 5.4 years |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance leases | 2.9 years |  |
| **Weighted Average Discount Rate** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating leases | 9.4% | 9.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance leases | 9.5% | —% |

---

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

***Lease Agreement Income***

The Company recorded income from the Lease Agreement (see Note 3, "Asset Acquisition") of $3.2 million for both the three and six months ended June 30, 2025. At June 30, 2025, the minimum future lease income related to the Lease Agreement is as follows (in thousands):

---

| | |
|:---|:---|
| **Years ending December 31,** | **Lease Agreement Income** |
| 2025 *(excluding first six months)* <sup>(1)</sup> | $10218 |
| 2026 | 27375 |
| 2027 | 27375 |
| 2028 | 27375 |
| 2029 | 27375 |
| Thereafter <sup>(2)</sup> | 9125 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total rental income *(through April 2030)* | $128843 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Excludes income from assets not placed in service at June 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Excludes rental income for the sixth year of the Lease Agreement as rental rates in year six will be determined based on prevailing market rates.

***Sublease Income***

On April 1, 2023, the Company entered into an agreement to sublease its office and lab space in Houston, Texas beginning September 1, 2023 and continuing through October 30, 2030. The Company recorded rental income from the sublease of $0.2 million and $0.2 million for the three months ended June 30, 2025 and 2024, respectively and $0.4 million and $0.4 million for the six months ended June 30, 2025 and 2024, respectively, which is included in the Company's statement of operations in Other income (expense), net. Rental income from the sublease offsets the monthly rental expense from the Company's lease of the facility. Sublease rental income for future years is as follows (in thousands):

---

| | |
|:---|:---|
| **Years ending December 31,** | **Sublease Income** |
| 2025 *(excluding first six months)* | $383 |
| 2026 | 767 |
| 2027 | 767 |
| 2028 | 767 |
| 2029 | 767 |
| Thereafter | 640 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total rental income | $4091 |

---

**Note 9 — Accrued Liabilities**

Current accrued liabilities are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| Severance costs | $398 | $380 |
| Payroll and benefits | 1596 | 2901 |
| Legal costs | 137 | 99 |
| Deferred revenue | 878 | 808 |
| Financed insurance | 505 | 1074 |
| Other | 391 | 650 |
| &nbsp;&nbsp;&nbsp;**Total current accrued liabilities** | $3905 | $5912 |

---

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note 10 — Debt** 

***Asset Based Loan***

In August 2023, the Company entered into a 24-month revolving loan and security agreement in connection with an Asset Based Loan, which was amended in October 2023, August 2024 and April 2025 (as amended the "ABL"). The August 2024 amendment to the ABL extended the maturity date to August 2026, increased the credit availability and lowered the interest rate spread. The ABL provides up to $20.0 million of credit availability, which is limited by a borrowing base consisting of (i) 85% of eligible accounts receivable, plus (ii) 60% of the value of eligible inventory not to exceed 100% of the eligible accounts receivable, plus (iii) 60% of the value of certain real estate holdings.

As of June 30, 2025 and December 31, 2024, the Company had $5.1 million and $4.8 million, respectively, outstanding under the ABL. As of June 30, 2025, the Company had approximately $9.2 million of available borrowings under the ABL. During the three months ended June 30, 2025 and 2024, the Company incurred $0.2 million and $0.2 million, respectively, in interest and fees related to the ABL. During the six months ended June 30, 2025 and 2024, the Company incurred $0.3 million and $0.4 million, respectively, in interest and fees related to the ABL. As of June 30, 2025 and December 31, 2024, the Company recorded $0.2 million and $0.3 million, respectively, of unamortized deferred financing costs related to the ABL.

Borrowings under the ABL bear interest at the Wall Street Journal Prime Rate (subject to a floor of 5.50%) plus 2.0% per annum. For both the three and six months ended June 30, 2025, the weighted-average interest rate was 9.5%. The ABL contains an annual commitment fee equal to 1.0% of the ABL's borrowing base. Additionally, the Company will be assessed a non-usage fee of 0.25% per quarter based on the difference between the average daily outstanding balance and the borrowing base limit of the ABL. If the ABL is terminated prior to the end of its term, the Company is required to pay an early termination fee of 2.5% of the borrowing base limit of the ABL (if terminated with more than 12 months remaining until the maturity date) or 1.5% of the borrowing base limit of the ABL (if terminated with less than 12 months remaining until the maturity date).

The ABL contains customary representations, warranties, covenants and events of default, the occurrence of which would permit the lender to accelerate the payment of any amounts borrowed. In connection with the Company's entry into the Purchase Agreement, the Company entered into the Letter Agreement with the lender whereby the lender will not test compliance with respect to the Tangible Net Worth (as defined in the ABL) covenant through and including December 31, 2025. Pursuant to the Letter Agreement, the Company will be required to maintain positive trailing three-month consolidated net income on a monthly basis through and including December 31, 2025 and PWRtek is prohibited from making distributions, except as permitted pursuant to the PWRtek Note. In addition, the ABL provides the lender a blanket security interest on all or substantially all of the Company's assets, excluding the PWRtek Assets. The Company was in compliance with all of the applicable covenants under the ABL as of June 30, 2025.

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

***Related Party Note Payable***

As of June 30, 2025, amounts outstanding under the PWRtek Note (see Note 3, "Asset Acquisition") are as follows (in thousands):

---

| | |
|:---|:---|
| | **June 30, 2025** |
| PWRtek Note payable | $40000 |
| Less: unamortized debt issuance cost | (464) |
| Total PWRtek Note payable | $39536 |

---

As of June 30, 2025, the fair value of the PWRtek Note approximated the carrying amount.

Principal payment for future years is as follows (in thousands):

---

| | |
|:---|:---|
| **Years ending December 31,** | **Principal Payments** |
| 2025 *(excluding first six months)* | $— |
| 2026 |  |
| 2027 |  |
| 2028 |  |
| 2029 |  |
| Thereafter | 40000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total payments | $40000 |

---

***Paycheck Protection Program Loan***

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"). 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 that date of $0.1 million were forgiven. The remaining principal amount of $0.4 million and accrued interest was fully repaid as of April 15, 2025.

**Note 11 — 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1 — Quoted prices in active markets for identical assets or liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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, accrued liabilities - related party, accounts payable and ABL approximate fair value due to the short-term nature of these accounts.

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

***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):

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| |<br>**Level 1** |<br>**Level 2** |<br>**Level 3** | **June 30,**<br>**2025** |<br>**Level 1** |<br>**Level 2** |<br>**Level 3** | **December 31,**<br>**2024** |
| Contingent earnout consideration | $— | $— | $— | $— | $— | $— | $127 | $127 |
| Total | $— | $— | $— | $— | $— | $— | $127 | $127 |

---

***Contingent Earnout Consideration Key Inputs***

In connection with the acquisition of one of the Company's wholly owned subsidiaries, JP3 Measurement, LLC, the Company entered into a stock performance earn-out provision with the sellers. The estimated fair value of the remaining stock performance earn-out provision, with respect to this transaction, is included in accrued liabilities as of December 31, 2024. 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 as set forth in the table below. The earnout provision expired on May 18, 2025 and no payment was required to be made by the Company to the sellers.

---

| | |
|:---|:---|
| | **December 31, 2024** |
| Risk-free interest rate | 4.30% |
| Expected volatility | 65.0% |
| Term until liquidation (years) | 0.38 |
| Stock price | $9.53 |
| Discount rate | 8.00% |

---

***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.

***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 three and six months ended June 30, 2025 and 2024 classified as Level 3 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Balance - beginning of period | $2 | $30 | $127 | $56 |
| Expiration of contingent earnout consideration | (2) |  | (127) |  |
| Change in fair value of contingent earnout consideration |  |  |  | (26) |
| Balance - end of period | $— | $30 | $— | $30 |

---

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**Note 12 — Income Taxes** 

The income tax provision differed from the amounts computed by applying the U.S. federal income tax rate of 21% to income before income tax for the reasons set forth below (dollars in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Three months ended June 30,** | **Three months ended June 30,** |
| | **2025** | **2025** | **2024** | **2024** |
| U.S. federal statutory tax rate | $375 | 21.0% | $420 | 21.0% |
| &nbsp;&nbsp;&nbsp;State income taxes, net of federal benefit | 17 | 1.0% | 15 | 0.7% |
| &nbsp;&nbsp;&nbsp;Non-U.S. income taxed at different rates | (45) | (2.5)% | (61) | (3.1)% |
| &nbsp;&nbsp;&nbsp;Increase (reduction) in tax expense related to stock-based awards | (188) | (10.5)% | 16 | 0.8% |
| &nbsp;&nbsp;&nbsp;Change in valuation allowance | (416) | (23.3)% | (387) | (19.4)% |
| &nbsp;&nbsp;Non-deductible expenses | 274 | 15.3% | 12 | 0.6% |
| Income tax expense and effective rate | $17 | 1.0% | $15 | 0.6% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Six months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2025** | **2024** | **2024** |
| U.S. federal statutory tax rate | $1518 | 21.0% | $796 | 21.0% |
| &nbsp;&nbsp;&nbsp;State income taxes, net of federal benefit | 81 | 1.1% | 256 | 6.8% |
| &nbsp;&nbsp;&nbsp;Non-U.S. income taxed at different rates | (120) | (1.7)% | (153) | (4.1)% |
| &nbsp;&nbsp;&nbsp;Increase (reduction) in tax expense related to stock-based awards | (190) | (2.6)% | 39 | 1.0% |
| &nbsp;&nbsp;&nbsp;Change in valuation allowance | (1642) | (22.7)% | (724) | (19.1)% |
| &nbsp;&nbsp;Non-deductible expenses | 434 | 6.0% | 43 | 1.1% |
| Income tax expense and effective rate | $81 | 1.1% | $257 | 6.7% |

---

As of June 30, 2025, the Company had U.S. net operating loss carryforwards ("NOLs") of $186.2 million, including $39.8 million expiring in various amounts from 2029 through 2037, which can offset 100% of taxable income, and $146.4 million that has an indefinite carryforward period, which can offset 80% of taxable income per year. Additionally, the Company has an estimated $74.8 million in certain state NOL carryforwards and $3.8 million in tax credit carryforwards.

As a result of the ownership change experienced in 2023, the Company's ability to use NOLs to reduce taxable income is generally limited by Section 382 of the Internal Revenue Code of 1986 to an annual amount of $3.5 million plus net unrealized built in gain of $24.5 million. The Company's use of NOLs arising after the date of the ownership change are not impacted by the Section 382 limitation. NOLs that exceed the Section 382 limitation in any year continue to be allowed as carryforwards until they expire and can be used to offset taxable income for years within the carryover period subject to the limitation in each year. If the Company does not generate a sufficient level of taxable income prior to the expiration of the pre-2018 NOL carryforward periods, then the ability to apply those NOLs as offsets to future taxable income is lost. Based on an analysis of the Section 382 limitation, the Company estimates that all carryforwards with the exception of $0.9 million of the state NOL carryforwards and $3.8 million of the tax credit carryforwards will be available for utilization if there is sufficient taxable income in subsequent periods. Although the ownership change 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 its financial statements given the valuation allowance that is recorded to estimate the realizability of the deferred tax assets.

Given the Company's anticipated future earnings, we believe that there is a reasonable possibility that within the next 3 to 12 months, sufficient positive evidence may become available to allow us to reach the conclusion that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets and an income tax benefit for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change based on our ongoing analysis of all negative and positive evidence including the level of profitability that we are able to achieve.

On July 4, 2025, the U.S. enacted H.R. 1 "A bill to provide for reconciliation pursuant to Title II of H. Con. Res. 14", commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing and the business interest expense limitation. ASC 740, "Income Taxes," requires the effects of changes in tax rates and laws to be recognized in the period in

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

which the legislation is enacted. Changes in tax laws may affect recorded deferred tax assets and deferred tax liabilities and our effective tax rate in the future, and the Company continues to evaluate the impacts the new legislation will have on its financial statements.

**Note 13 — Commitments and Contingencies** 

***Litigation***

From time to time, the Company is subject to litigation and other claims that arise in the normal course of business. As of June 30, 2025, the Company was not party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company's results of operations, financial condition or cash flows. However, the results of current or future matters cannot be predicted with certainty; an unfavorable resolution of one or more of such matters could have a material adverse effect on the Company's results of operations, financial condition or cash flows.

***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.

**Note 14 — Stockholders' Equity**

***Pre-Funded Warrants***

On June 21, 2022, ProFrac Holdings II, LLC ("ProFrac Holdings II") paid $19.5 million for Pre-Funded Warrants (the "June 2022 Warrants") of the Company. The June 2022 Warrants permit ProFrac Holdings II to purchase 2,184,140 shares of the Company's common stock at an exercise price equal to $0.0001 per share, subject to a $4.5 million exercise fee.

ProFrac Holdings II and its affiliates may not receive any voting or consent rights in respect of the June 2022 Warrants or the underlying shares of common stock unless and until ProFrac Holdings II has paid an additional $4.5 million to the Company; provided, however, that ProFrac Holdings II may exercise the June 2022 Warrants immediately prior to the sale of the shares of common stock subject to such exercise to a non-affiliate of ProFrac Holdings II. The additional $4.5 million will be accounted for as an equity contribution if received.

***Treasury Stock***

The Company accounts for treasury stock using the cost method and includes treasury stock as a component of stockholders' equity. During the three months ended June 30, 2025 and 2024, the Company withheld approximately 5 thousand shares and 4 thousand shares, respectively, of the Company's common stock at fair market value for payment of income tax withholding owed by employees upon the vesting of restricted shares During the six months ended June 30, 2025 and 2024, the Company withheld approximately 8 thousand shares and 6 thousand shares, respectively, of the Company's common stock at fair market value for payment of income tax withholding owed by employees upon the vesting of restricted shares. Shares issued as restricted stock awards to employees under the 2018 Long-Term Incentive Plan are accounted for as treasury stock when forfeited. During the six months ended June 30, 2025 and 2024, forfeited stock awards returned to treasury stock were approximately 3 thousand shares and 11 thousand shares, respectively.

**Note 15 — Earnings Per Share** 

Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing the adjusted net income by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. For the three and six months ended June 30, 2025 and 2024, there were no adjustments to net income. Potentially dilutive common share equivalents consist of incremental shares of common stock issuable upon exercise of the June 2022 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, employee stock options outstanding, and the June 2022 Warrants are computed using the treasury stock method.

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

The calculation of the basic and diluted earnings per share for the three and six months ended June 30, 2025 and 2024 is as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| **Numerator:** |  |  |  |  |
| Net income for basic and diluted earnings per share | $1768 | $1974 | $7148 | $3536 |
| **Denominator:** |  |  |  |  |
| Basic weighted average shares outstanding <sup>(1)</sup> | 33947 | 29449 | 31827 | 29440 |
| &nbsp;&nbsp;&nbsp;Dilutive effect of the June 2022 warrants | 1792 | 1041 | 1738 | 925 |
| &nbsp;&nbsp;&nbsp;Dilutive effect of stock options and restricted shares | 492 | 178 | 461 | 147 |
| Diluted weighted average shares outstanding | 36231 | 30668 | 34026 | 30512 |
| Basic earnings per share | $0.05 | $0.07 | $0.22 | $0.12 |
| Diluted earnings per share | $0.05 | $0.06 | $0.21 | $0.12 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Basic weighted average shares outstanding for the three and six month 2025 periods include the weighted average of 6,000,000 shares associated with the April 2025 Warrant assumed issued at the April 28, 2025 closing date of the PWRtek Transactions (see Note 3, "Asset Acquisition").

**Note 16 — Supplemental Cash Flow Information**

Supplemental cash flow information is as follows (in thousands):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** |
| Supplemental non-cash operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***PWRtek Transactions*** (Note 3) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2024 Contract Shortfall Fee offset | $(17552) | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future Contract Shortfall Fee (accrued liabilities - related party) | (7248) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historic book value of inventory acquired | 600 |  |
| Supplemental non-cash investing and financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;***PWRtek Transactions*** (Note 3) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historic book value of Acquired Assets | 14460 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PWRtek Note issued | (40000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Excess consideration over historical asset book value | 92400 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;April 2025 Warrant issued | (42660) |  |
| Supplemental cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid | $1072 | $452 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes | 60 |  |

---

------

**FLOTEK INDUSTRIES, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**Note 17— Related Party Transactions**

On February 2, 2022, the Company entered into a long-term supply agreement with ProFrac Services (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 ("ProFrac Holdings"). Under the Initial ProFrac Agreement, ProFrac Services was obligated to order chemicals from the Company at least equal to the greater of (a) the chemicals required for 33% of ProFrac Services' hydraulic fracturing fleets and (b) a baseline measured by the first ten hydraulic fracturing fleets deployed by ProFrac Services during the term of the Initial ProFrac Agreement. If the minimum volumes are not achieved in any given year, ProFrac Services is required to 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 ("Contract Shortfall Fees").

On May 17, 2022, the Company entered into an amendment to the Initial ProFrac Agreement (the "First Amendment to ProFrac Agreement") upon issuance of $50 million in aggregate principal amount of Contract Consideration Convertible Notes Payable. The Initial ProFrac Agreement was amended to (a) increase ProFrac Services' minimum purchase obligation for each year to the greater of 70% of ProFrac Services' requirements and a baseline measured by ProFrac Services' first 30 hydraulic fracturing fleets, and (b) increase the term to 10 years.

On February 2, 2023, the Company entered into a second amendment to the Initial ProFrac Agreement (the "Second Amendment to ProFrac Agreement" and together with the Initial ProFrac Agreement and the First Amendment to ProFrac Agreement, collectively the "ProFrac Agreement") effective as of January 1, 2023. The Second Amendment to ProFrac Agreement amended the ProFrac Agreement to (1) provide a ramp-up period from January 1, 2023 to May 31, 2023 for ProFrac Services to increase the number of active hydraulic fracturing fleets to 30 fleets, (2) waive any Contract Shortfall Fee payment relating to any potential order shortfall prior to January 1, 2023, (3) add additional fees to certain products, and (4) provide margin increases based on margins with non-ProFrac Services customers.

The current measurement period for Contract Shortfall Fees is January 1, 2025 through December 31, 2025. The Company does not expect that the minimum purchase requirements will be met during the current measurement period, and as a result, related party revenues for the six months ended June 30, 2025 reflect variable consideration for Contract Shortfall Fees of $15.2 million, which will be due in the first quarter of 2026 under the terms of the ProFrac Agreement. The measurement period for 2024 was January 1, 2024 through December 31, 2024. Related party revenues for the six months ended June 30, 2024 included $17.1 million of Contract Shortfall Fees.

During the three months ended June 30, 2025 and 2024, the Company's related party revenues were $33.2 million and $28.0 million, respectively. For the three months ended June 30, 2025 and 2024, these revenues were net of amortization of contract assets of $1.4 million and $1.5 million, respectively. Cost of sales attributable to these revenues were $22.3 million and $19.5 million, respectively, for the three months ended June 30, 2025 and 2024.

During the six months ended June 30, 2025 and 2024, the Company's related party revenues were $64.1 million and $55.2 million, respectively. For the six months ended June 30, 2025 and 2024, these revenues were net of amortization of contract assets of $2.9 million and $2.7 million, respectively. Cost of sales attributable to these revenues were $43.5 million and $38.1 million, respectively, for the six months ended June 30, 2025 and 2024.

As of June 30, 2025 and December 31, 2024 our accounts receivable from ProFrac Services was $37.3 million and $52.4 million, respectively, which is recorded in accounts receivable, related party on the consolidated balance sheets.

Also during 2023, the Company entered into various related party transactions with ProFrac Holdings and ProFrac Holdings II as described in Note 17, "Related Party Transactions" to the consolidated financial statements from the 2024 Annual Report. As a result of these related party transactions and other purchases by affiliates of ProFrac, ProFrac Holdings or its affiliates owned approximately 61% of the Company's common stock, including the effects of the June 2022 Warrants and April 2025 Warrant, as of June 30, 2025.

***PWRtek Transactions and Lease Agreement***

As described in Note 3, "Asset Acquisition", on April 28, 2025, the Company entered into a series of transactions with various subsidiaries of ProFrac referred to as the PWRtek Transactions. Total consideration paid by the Company in connection with the PWRtek Transactions was $107.5 million. See Note 3, "Asset Acquisition," Note 8, "Lease Agreements – Lease Agreement Income," and Note 10, "Debt" for additional information on the Lease Agreement, April 2025 Warrant and PWRtek Note.

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**FLOTEK INDUSTRIES, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**Note 18 — Business Segment, Geographic and Major Customer Information**

***Segment Information***

The Company's segments are determined as those components whose results are reviewed regularly by the chief operating decision maker ("CODM"), who is the Company's Chief Executive Officer, in deciding how to allocate resources and assess performance. Each segment is organized and managed based upon the nature of the Company's markets and customers and consists of similar products and services. Gross profit and income (loss) from operations for each segment are used by the CODM to assess the performance of each segment in a financial period. The CODM uses segment gross profit and income (loss) from operations as the measure to make resource (including financial or capital resources) allocation decisions for each segment. Accounting policies have been applied consistently by each segment for all reporting periods. Intercompany revenue and expense amounts, if any, have been eliminated within each segment to report on the basis that management uses internally for evaluating segment performance. 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 segments.

The operations of the Company are categorized into the following reportable segments:

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

*Data Analytics.* The DA segment provides innovative analytical measurement solutions. The DA segment seeks to deliver real-time information and insights to our customers to enable optimization of operations, which has been enhanced through the addition of the Acquired Assets (see Note 3 - "Asset Acquisition"), and reduction of emissions and their carbon intensity. Customers of the DA segment span across the entire oil and gas market, from upstream production to midstream facilities to refineries and distribution networks.

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**FLOTEK INDUSTRIES, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

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

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| | | | | |
|:---|:---|:---|:---|:---|
| **As of and for the three months ended June 30,**  | **Chemistry Technologies** | **Data Analytics**  | **Corporate and Other** | **Total** |
| **2025** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | $21755 | $1820 | $— | $23575 |
| &nbsp;&nbsp;&nbsp;&nbsp;Services | 788 | 819 |  | 1607 |
| &nbsp;&nbsp;&nbsp;Total revenue from external customers | 22543 | 2639 |  | 25182 |
| &nbsp;&nbsp;&nbsp;Revenue from related party |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | 29830 |  |  | 29830 |
| &nbsp;&nbsp;&nbsp;&nbsp;Services | 47 | 63 |  | 110 |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental |  | 3228 |  | 3228 |
| &nbsp;&nbsp;&nbsp;Total revenue from related parties | 29877 | 3291 |  | 33168 |
| &nbsp;&nbsp;&nbsp;Cost of sales | 41753 | 2190 |  | 43943 |
| &nbsp;&nbsp;&nbsp;Gross profit | 10667 | 3740 |  | 14407 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 2155 | 1128 | 3513 | 6796 |
| &nbsp;&nbsp;&nbsp;Asset acquisition expenses (Note 3) |  | 4195 |  | 4195 |
| &nbsp;&nbsp;&nbsp;Other segment items | 463 | 336 | 30 | 829 |
| &nbsp;&nbsp;&nbsp;Income (loss) from operations | $8049 | $(1919) | $(3543) | $2587 |
| &nbsp;&nbsp;&nbsp;*Reconciliation of profit to income before income taxes:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  |  | $(983) | $(983) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net |  |  | 181 | 181 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes |  |  |  | $1785 |
| **2024** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | $15647 | $1306 | $— | $16953 |
| &nbsp;&nbsp;&nbsp;&nbsp;Services | 714 | 524 |  | 1238 |
| &nbsp;&nbsp;&nbsp;Total revenue from external customers | 16361 | 1830 |  | 18191 |
| &nbsp;&nbsp;&nbsp;Revenue from related party |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | 27741 |  |  | 27741 |
| &nbsp;&nbsp;&nbsp;&nbsp;Services |  | 220 |  | 220 |
| &nbsp;&nbsp;&nbsp;Total revenue from related parties | 27741 | 220 |  | 27961 |
| &nbsp;&nbsp;&nbsp;Cost of sales | 35556 | 1426 |  | 36982 |
| &nbsp;&nbsp;&nbsp;Gross profit | 8546 | 624 |  | 9170 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 1903 | 837 | 3539 | 6279 |
| &nbsp;&nbsp;&nbsp;Other segment items | 498 | 145 | 26 | 669 |
| &nbsp;&nbsp;&nbsp;Income (loss) from operations | $6145 | $(358) | $(3565) | $2222 |
| &nbsp;&nbsp;&nbsp;*Reconciliation of profit to income before income taxes:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  |  | (308) | (308) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net |  |  | 75 | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes |  |  |  | $1989 |

---

Other segment items for the three months ended June 30, 2025 includes depreciation of $0.2 million and $0.2 million in the CT and DA segments, respectively, and R&D costs of $0.3 million and $0.2 million in the CT and DA segments, respectively.

Other segment items for the three months ended June 30, 2024 includes depreciation of $0.2 million and $35 thousand in the CT and DA segments, respectively, and R&D costs of $0.4 million and $0.1 million in the CT and DA segments, respectively.

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**FLOTEK INDUSTRIES, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

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| | | | | |
|:---|:---|:---|:---|:---|
| **As of and for the six months ended June 30,**  | **Chemistry Technologies** | **Data Analytics**  | **Corporate and Other** | **Total** |
| **2025** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | $43019 | $3482 | $— | $46501 |
| &nbsp;&nbsp;&nbsp;&nbsp;Services | 1533 | 1571 |  | 3104 |
| &nbsp;&nbsp;&nbsp;Total revenue from external customers | 44552 | 5053 |  | 49605 |
| &nbsp;&nbsp;&nbsp;Revenue from related party |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | 60530 |  |  | 60530 |
| &nbsp;&nbsp;&nbsp;&nbsp;Services | 76 | 273 |  | 349 |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental revenue |  | 3228 |  | 3228 |
| &nbsp;&nbsp;&nbsp;Total revenue from related parties | 60606 | 3501 |  | 64107 |
| &nbsp;&nbsp;&nbsp;Cost of sales | 83048 | 3808 |  | 86856 |
| &nbsp;&nbsp;&nbsp;Gross profit | 22110 | 4746 |  | 26856 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 4322 | 2075 | 6681 | 13078 |
| &nbsp;&nbsp;&nbsp;Asset acquisition expenses (Note 3) |  | 4195 |  | 4195 |
| &nbsp;&nbsp;&nbsp;Other segment items | 848 | 520 | 61 | 1429 |
| &nbsp;&nbsp;&nbsp;Income (loss) from operations | $16940 | $(2044) | $(6742) | $8154 |
| &nbsp;&nbsp;&nbsp;*Reconciliation of profit to income before income taxes:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  |  | $(1212) | $(1212) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net |  |  | 287 | 287 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes |  |  |  | $7229 |
| **2024** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from external customers |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | $26816 | $2238 | $— | $29054 |
| &nbsp;&nbsp;&nbsp;&nbsp;Services | 1231 | 1086 |  | 2317 |
| &nbsp;&nbsp;&nbsp;Total revenue from external customers | 28047 | 3324 |  | 31371 |
| &nbsp;&nbsp;&nbsp;Revenue from related party |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | 54755 |  |  | 54755 |
| &nbsp;&nbsp;&nbsp;&nbsp;Services |  | 400 |  | 400 |
| &nbsp;&nbsp;&nbsp;Total revenue from related parties | 54755 | 400 |  | 55155 |
| &nbsp;&nbsp;&nbsp;Cost of sales | 65855 | 2680 |  | 68535 |
| &nbsp;&nbsp;&nbsp;Gross profit | 16947 | 1044 |  | 17991 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 3759 | 1520 | 7086 | 12365 |
| &nbsp;&nbsp;&nbsp;Other segment items | 938 | 306 | 52 | 1296 |
| &nbsp;&nbsp;&nbsp;Income (loss) from operations | $12250 | $(782) | $(7138) | $4330 |
| &nbsp;&nbsp;&nbsp;*Reconciliation of profit to income before income taxes:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  |  | (586) | (586) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net |  |  | 49 | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes |  |  |  | $3793 |

---

Other segment items for the six months ended June 30, 2025 includes depreciation of $0.3 million and $0.2 million in the CT and DA segments, respectively; R&D costs of $0.5 million and $0.3 million in the CT and DA segments, respectively; and gain on sale of property and equipment in the CT segment of $7 thousand.

Other segment items for the six months ended June 30, 2024 includes depreciation of $0.3 million and $70 thousand in the CT and DA segments, respectively; and R&D costs of $0.6 million and $0.2 million in the CT and DA segments, respectively.

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**FLOTEK INDUSTRIES, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

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

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| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| Chemistry Technologies | $136478 | $152161 |
| Data Analytics | 25995 | 8632 |
| Corporate and Other | 9770 | 10003 |
| &nbsp;&nbsp;&nbsp;Total assets | $172243 | $170796 |

---

Additions to long-lived assets by reportable segments and corporate and other are as follows (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| **As of and for the six months ended June 30,** | **Chemistry Technologies** | **Data Analytics**  | **Corporate and Other** | **Total** |
| **2025** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Additions to long-lived assets <sup>(1)</sup> | $1050 | $14681 | $39 | $15770 |
| **2024** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Additions to long-lived assets | $175 | $34 | $20 | $229 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Additions to long-lived assets for the six months ended June 30, 2025 includes $14.5 million of assets as a result of the non-cash PWRtek Transactions (see Note 3 and Note 17).

***Geographic Information***

Revenue by country is based on the location where services are provided and products are sold. For the three and six months ended June 30, 2025 and 2024 no country other than the U.S. accounted for more than 10% of revenue. Revenue by geographic location is as follows (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| U.S. (1) | $54426 | $44008 | $105895 | $83266 |
| UAE | 3417 | 1803 | 6857 | 2545 |
| Other countries | 507 | 341 | 960 | 715 |
| &nbsp;&nbsp;&nbsp;Total revenue | $58350 | $46152 | $113712 | $86526 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes revenue from related party

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

***Major Customers***

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

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| | | |
|:---|:---|:---|
| | **Revenue** | **% of Total Revenue** |
| **Three months ended June 30, 2025** | | |
| &nbsp;&nbsp;&nbsp;Customer A (related party) | $33168 | 56.8% |
| **Three months ended June 30, 2024** |  |  |
| &nbsp;&nbsp;&nbsp;Customer A (related party) | $27961 | 60.6% |

---

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**FLOTEK INDUSTRIES, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

---

| | | |
|:---|:---|:---|
| | **Revenue** | **% of Total Revenue** |
| **Six months ended June 30, 2025** | | |
| &nbsp;&nbsp;&nbsp;Customer A (related party) | $64107 | 56.4% |
| **Six months ended June 30, 2024** |  |  |
| &nbsp;&nbsp;&nbsp;Customer A (related party) | $55155 | 63.7% |

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The concentration with ProFrac Services, ProFrac GDM 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):

---

| | | |
|:---|:---|:---|
| **Three months ended June 30,** | **Expenditure** | **% of Total Expenditure** |
| &nbsp;&nbsp;&nbsp;**2025** | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier A | $9182 | 28% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier B | 6171 | 19% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier C | 3430 | 10% |
| &nbsp;&nbsp;&nbsp;**2024** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier A | $5975 | 23% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier D | 4383 | 17% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier B | 4103 | 16% |

---

---

| | | |
|:---|:---|:---|
| **Six months ended June 30,** | **Expenditure** | **% of Total Expenditure** |
| &nbsp;&nbsp;&nbsp;**2025** | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier A | $17068 | 24% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier B | 10933 | 16% |
| &nbsp;&nbsp;&nbsp;**2024** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier D | $12120 | 23% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier A | 10543 | 20% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier B | 4103 | 8% |

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**Note 19 — Subsequent Event** 

The Company has evaluated the effects of events that have occurred subsequent to June 30, 2025 through the date at which the Company's interim financial statements are available to be issued, and has determined that there have been no material events other than that discussed below that would require recognition in the June 30, 2025 interim financial statements or disclosure in the notes to the interim financial statements.

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**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*The following discussion should be read in conjunction with the 2024 Annual Report and the unaudited condensed consolidated financial statements and accompanying notes included herein. Comparative segment revenues and related financial information are discussed herein and are presented in Note 18 to our unaudited condensed consolidated financial statements. See "Forward Looking Statements" in this Quarterly Report and "Risk Factors" included in our filings with the SEC, including our Quarterly Reports on Form 10-Q and our 2024 Annual Report, for a description of important factors that could cause actual results to differ from expected results. Our historical financial information may not be indicative of our future performance.*

**<u>Executive Summary</u>**

Flotek strives to be the collaborative partner of choice for solutions that reduce the environmental impact of energy on air, water, land and people. An advanced technology-driven, chemical and data analytics company, Flotek seeks to provide unique and innovative solutions to its customers in both the domestic and international energy markets. The Company is committed to delivering products and services that endeavor to maximize customer returns by leveraging chemistry as the common value creation platform.

The Company has two operating segments, Chemistry Technologies ("CT") and Data Analysis ("DA"), which are both supported by the Company's continuing Research and Innovation ("R&I") advanced laboratory capabilities.

**<u>Recent Events</u>**

***Remote Power Generation Asset Acquisition and Related Lease Agreement***

The Company entered into a series of transactions in connection with an Asset Purchase Agreement, dated as of April 28, 2025 (the "Purchase Agreement"), with ProFrac GDM, LLC ("ProFrac GDM"), an indirect subsidiary of ProFrac Holding Corp. ("ProFrac"), and various subsidiaries of ProFrac, pursuant to which, among other things, the Company acquired certain mobile power generation assets, comprised of twenty-two operating units and eight units under construction, certain inventory and related intellectual property (the "Acquired Assets"). Concurrently, the Leased Equipment (as defined below) was leased back to ProFrac GDM pursuant to an Agreement for Equipment Rental, dated as of April 28, 2025, by and between PWRtek, LLC ("PWRtek"), a wholly-owned subsidiary of the Company, and ProFrac GDM (the "Lease Agreement") (collectively, the "PWRtek Transactions").

Total consideration paid by the Company in connection with the PWRtek Transactions was $107.5 million, which consisted of the following: (1) an offset of $17.6 million against the Company's accrued and 2024 Contract Shortfall Fee (defined below), which was the consideration for the acquisition of the Acquired Assets, (2) a warrant (the "April 2025 Warrant") to purchase 6,000,000 shares of the Company's common stock, (3) a secured promissory note, issued by PWRtek in the initial principal amount of $40 million (the "PWRtek Note"), and (4) offsets against potential future period Contract Shortfall Fee amounts that may become due under the ProFrac Agreement.

Due to ProFrac controlling more than 50% of the Company's outstanding shares, the acquisition of the Acquired Assets qualified as a transfer of assets between entities under common control. As such, the Acquired Assets have been recorded at ProFrac's historical book value as of the acquisition date of approximately $15.1 million. The total consideration paid by the Company for the PWRtek Transactions in excess of ProFrac's historical book value of the Acquired Assets was recorded to stockholders' equity. Financial results from the Lease Agreement and operation of the Acquired Assets are reported within the Company's DA segment.

Pursuant to the terms of the Lease Agreement, ProFrac GDM agreed to lease from PWRtek, for a period of six years, twenty-two operating mobile power generation assets, comprised of fourteen digitally enhanced mobile natural gas power generation filtration units and eight gas distribution units and eight additional units, comprised of seven gas distribution units and one mobile natural gas power generation filtration unit, that were under construction (collectively, the "Leased Equipment") as of April 28, 2025. The Lease Agreement provides for fixed rental rates for the Leased Equipment during the first five years of the Lease Agreement and then prevailing market rates during the sixth year. The Lease Agreement does not include a purchase option for the purchase of the Leased Equipment at the end of the Lease Agreement term. The Company began recognizing lease revenue associated with the twenty-two operating mobile power generation assets on April 28, 2025, the effective date of the Lease Agreement. With respect to the Leased Equipment under construction, the Company will recognize lease revenue at the earlier of the in-service date or January 1, 2026.

The April 2025 Warrant has a seven-year term and can be exercised on a cashless basis for nominal consideration at any time following the date on which the Company's stockholders have approved the issuance of the shares of the Company's common stock underlying the April 2025 Warrant. On July 9, 2025, the Company held a special stockholders meeting where the

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Company's stockholders approved the issuance of the 6,000,000 shares of the Company's common stock underlying the April 2025 Warrant.

The PWRtek Note provides for a five-year term and is subject to a 10% annual interest rate, payable quarterly in cash or in-kind (i.e., added to the principal balance quarterly) at PWRtek's option. The principal becomes due at the end of the five-year term on April 28, 2030. PWRtek's obligations under the PWRtek Note are secured by a first priority lien on the Acquired Assets, including the Leased Equipment, as well as certain other after-acquired property of PWRtek. While the PWRtek Note includes certain prepayment restrictions, Flotek and ProFrac GDM can each elect to apply up to fifty percent cumulatively of any future Contract Shortfall Fee that becomes due and payable under the ProFrac Agreement to prepay principal and interest due under the PWRtek Note without penalty. The obligations under the PWRtek Note have been guaranteed by the Company.

***2024 Contract Shortfall Fees***

Contract Shortfall Fees for the measurement period of January 1, 2024 through December 31, 2024 totaled approximately $32.6 million (the "2024 Contract Shortfall Fees"). The Company collected $15 million of the 2024 Contract Shortfall Fees in cash in March 2025. The remaining 2024 Contract Shortfall Fees were offset as consideration for the Acquired Assets as described above.

***SEC Filing Status Change***

Based on the Company's aggregate worldwide market value of voting and non-voting common equity held by its non-affiliates as of June 30, 2025, the Company expects to become an "accelerated filer" as of December 31, 2025. As a result, the Company's independent registered public accounting firm is expected to be required to provide its attestation report on the Company's internal control over financial reporting in the Company's Annual Report on Form 10-K for the year ending December 31, 2025.

**<u>Company Overview</u>**

***Chemistry Technologies***

The Company's CT segment provides sustainable, optimized chemistry solutions that we believe maximize our customers' value by improving return on invested capital, lowering operational costs and providing tangible environmental benefits. The Company's proprietary chemistries, specialty chemistries, logistics, and technology services enable its customers to pursue improved efficiencies and performance throughout the life cycle of their desired chemical applications program. The Company designs, develops, manufactures, packages, distributes and markets optimized chemistry solutions that are designed to accelerate existing sustainability practices to reduce the environmental impact of energy on the air, water, land and people.

Customers of the CT segment include energy-related companies, such as our related party ProFrac Services, LLC ("ProFrac Services"), with whom we have a long-term chemistry supply agreement, as well as industrial companies. Major integrated oil and gas companies, oilfield services companies, independent oil and gas companies, national and state-owned oil companies, geothermal energy companies, solar energy companies and advanced alternative energy companies may benefit from our best-in-class technology, field operations, and continuous improvement exercises that go beyond existing sustainability practices.

**ProFrac Supply Agreement**

On February 2, 2022, the Company entered into a Chemical Products Supply Agreement with ProFrac Services, which was subsequently amended on May 17, 2022 and February 1, 2023 (as amended, the "ProFrac Agreement").

The ProFrac Agreement contains minimum requirements for chemistry purchases. If the minimum volume purchases are not achieved within the applicable measurement period, ProFrac Services is required to 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 the measurement period ("Contract Shortfall Fees"). The measurement period for Contract Shortfall Fees during 2024 was January 1, 2024 through December 31, 2024. Related party revenues for the six months ended June 30, 2024 reflect Contract Shortfall Fees of $17.1 million. The current measurement period for Contract Shortfall Fees is January 1, 2025 through December 31, 2025. The Company does not expect that the minimum purchase requirements will be met during the current measurement period, and as a result, related party revenues for the six months ended June 30, 2025 reflect Contract Shortfall Fees of $15.2 million.

The PWRtek Transactions described above under "Recent Events" do not impact the ProFrac Agreement; provided, however, the Company and ProFrac Services have agreed that any future Contract Shortfall Fees shall be offset by the approximately $7.2 million residual payable due under the Purchase Agreement and either the Company or ProFrac GDM may elect, upon written notice, to offset up to 50% of any due and payable Contract Shortfall Fees against the PWRtek Note principal and accrued and unpaid interest.

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***Data Analytics***

The DA segment delivers real-time information and insights to our customers to enable optimization of operations and reduction of emissions and their carbon intensity. Real-time composition and physical property measurements are delivered simultaneously on refined fuels, natural gas liquids ("NGLs"), natural gas, crude oil and condensates using the industry's only field-deployable, in-line optical near-infrared spectrometer that generates no emissions. The instrument's response is processed with advanced chemometrics modeling, artificial intelligence, and machine learning algorithms to deliver these valuable insights every 15 seconds.

We believe customers using this technology have obtained significant benefits, including additional profits, by enhancing operations in crude/condensates stabilization, enhancing blending operations, reducing time impacting transmix operations, increasing efficiencies and optimization of gas plants, allowing for the use of significantly lower cost field gas instead of diesel to generate power, lowering emissions and protecting equipment and ensuring product quality while reducing giveaways, i.e., providing higher value products at the lower value products prices. Our ability to facilitate the use of lower cost field gas to generate remote power solutions has been significantly enhanced through the addition of the Acquired Assets described in "Recent Events" above. More efficient operations have the benefit of reducing carbon footprint, e.g., less flaring and reduction in energy expenditure for compression and re-processing. Our customers in North America include oil and gas supermajors, some of the largest midstream oil and gas companies, large gas processing plants and independent exploration and production companies. We have developed a line of Verax™ analyzers for deployment internationally, which was certified for compliance in hazardous locations and harsh weather conditions.

***Research & Innovation***

R&I supports both our business segments through chemistry formulation, specialty chemical formulations and EPA regulatory guidance, technical support, basin and reservoir studies, data analytics and new technology projects. The purpose of R&I is to supply the Company's business segments with enhanced products and services that generate current and future revenues, while advising Company management on opportunities concerning technology, environmental and industry trends. The R&I facilities support advances in CT and DA segment performance, optimization and manufacturing. For the three months ended June 30, 2025 and 2024, the Company incurred $0.5 million and $0.5 million, respectively, of research and development expense. For the six months ended June 30, 2025 and 2024, the Company incurred $0.8 million and $0.9 million, respectively, of research and development expense. The Company expects that its 2025 research and development investments will continue to support new product development, especially in support of enhanced environmental demands and customization initiatives for its clients.

**<u>Outlook</u>**

Our business is subject to numerous variables that impact our outlook and expectations given the shifting conditions of the oil and gas industry. We have based our outlook on the market conditions we perceive today. The oil and gas industry is highly cyclical.

***Energy Industry***

The demand for oil and gas and related services fluctuates due to numerous factors including weather and macroeconomic and geopolitical conditions. Despite the near-term volatility in commodity pricing, partially attributable to the ongoing discussions with respect to tariffs and potential for additional conflicts in the Middle East, we believe the fundamentals for energy-related services remain stable. Independent exploration and production companies operate the majority of U.S. land rigs and react quickly to changing commodity prices. In the current commodity price environment, we generally expect these companies, as well as major exploration and production companies, to maintain current activity levels over the next 12 months.

***Chemistry Technologies***

The CT segment is actively advancing integrated solutions to enhance capital efficiency for exploration and production ("E&P") operators and service companies. Our approach combines technical leadership, exceptional service quality, reliable delivery, and a strong safety record. We believe that we have optimized service delivery across key North American basins and are well-positioned to adapt to fluctuations in activity levels. Based upon our strong results during the first quarter of 2025, and customer commitments, we anticipate stable demand for our chemistry during 2025. Our expectations are in part based upon our current outlook on oil and gas prices.

As a result of the continued growth in the exportation of natural gas, as well as the increased utilization of natural gas to generate electricity, we expect the demand for natural gas to continue to increase over the next twelve to twenty-four months. Higher natural gas prices would likely increase activity in the Haynesville shale basin, an area where we expect our established presence, expertise and capabilities could provide growth.

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Internationally, we are seeing an increase in unconventional activity in the Middle East and Argentina, where we expect demand for our chemistry to grow throughout 2025.

We remain focused on driving innovation between the CT and DA segments, promoting opportunities in upstream applications designed to deliver enhanced efficiencies for E&P operators and service companies. We believe that these initiatives will lead to deeper integration between our CT and DA segments, creating a pathway for future growth.

***Digital Analytics***

The use of data and digital analytics is a growing trend in all industries where technology is leveraged to analyze large datasets of operational information to improve performance, as well as for predictive maintenance, advanced safety measures and reduced environmental impact of operations. We believe Verax™ analyzers have gained a foothold in North American markets for critical applications where compositional information is needed in real-time. The technology delivers insight on valuable operations data like vapor pressure, boiling point, flash point, octane level, API (American Petroleum Institute) gravity, viscosity, BTU (British Thermal Unit) and more, simultaneously. We continue to collaborate with our customers to identify further facilities and applications where our technology has the highest value. To drive recurring revenue, we continue to build on the modular nature of our sensor and analysis packages with new data processing techniques that enhance the value of our installations. Automated Interface Detection Algorithm ("AIDA") provides real-time detection of interfaces in a liquids pipeline without the need for additional sampling or chemometric modeling. The application can identify products such as refined fuels, crude and NGLs with its advanced machine learning algorithms and detect interfaces real-time versus traditional lab analysis. We believe this allows customers to cut batches quickly and accurately, reduce transmix and minimize off-spec product that requires downgrades.

As evidenced by and in connection with the transactions with ProFrac and ProFrac GDM described above under "Recent Events," we are gaining traction leveraging the Verax™ in applications where operators and service companies are using lower cost field gas as a substitute for diesel in dual fuel engines as the market moves to Tier 4 equipment and eFleets. Analyzing gas quality in real-time allows companies to maximize the field gas for diesel substitution rate providing significant cost savings while lowering emissions, reducing fuel consumption/costs, and protecting the equipment from damage. In addition, we believe the Acquired Assets can be utilized in numerous vertical markets, including areas outside of the oil and gas industry. We expect the Lease Agreement described above under "Recent Events" to have a significant impact on the future financial results of our DA segment.

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**<u>Consolidated Results of Operations (in thousands)</u>**

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue from external customers | $25182 | $18191 | $49605 | $31371 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue from related party | 33168 | 27961 | 64107 | 55155 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total revenues | 58350 | 46152 | 113712 | 86526 |
| Cost of sales | 43943 | 36982 | 86856 | 68535 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of sales % | 75.3% | 80.1% | 76.4% | 79.2% |
| Gross profit | 14407 | 9170 | 26856 | 17991 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit % | 24.7% | 19.9% | 23.6% | 20.8% |
| Selling general and administrative | 6796 | 6279 | 13078 | 12365 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling general and administrative % | 11.6% | 13.6% | 11.5% | 14.3% |
| Asset acquisition expenses | 4195 |  | 4195 |  |
| Depreciation | 374 | 222 | 626 | 442 |
| Research and development | 455 | 481 | 810 | 888 |
| Gain on sale of property and equipment |  | (34) | (7) | (34) |
| &nbsp;&nbsp;&nbsp;Income from operations | 2587 | 2222 | 8154 | 4330 |
| &nbsp;&nbsp;&nbsp;Operating margin % | 4.4% | 4.8% | 7.2% | 5.0% |
| Interest and other (expense) income, net | (802) | (233) | (925) | (537) |
| Income before income taxes | 1785 | 1989 | 7229 | 3793 |
| Income tax expense | (17) | (15) | (81) | (257) |
| Net income | $1768 | $1974 | $7148 | $3536 |
| Net income % | 3.0% | 4.3% | 6.3% | 4.1% |

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Consolidated revenue for the three months ended June 30, 2025 increased $12.2 million, or 26%, versus the same period of 2024, driven by increased sales volumes from external customers as well as increased related party activity under the ProFrac Agreement and $3.2 million in PWRtek rental revenue, partially offset by a decrease in accrued Contract Shortfall Fees of $0.6 million. Related party revenues in the CT segment are net of $1.4 million and $1.5 million of contract assets amortization for the three months ended June 30, 2025 and 2024, respectively.

Consolidated revenue for the six months ended June 30, 2025 increased $27.2 million, or 31%, versus the same period of 2024, driven by increased sales volumes from external customers as well as increased related party activity under the ProFrac Agreement and $3.2 million in PWRtek rental revenue, partially offset by a decrease in accrued Contract Shortfall Fees of $1.8 million. Related party revenues in the CT segment are net of $2.9 million and $2.7 million of contract assets amortization for the six months ended June 30, 2025 and 2024, respectively.

Consolidated cost of sales for the three months ended June 30, 2025 increased $7.0 million, or 19%, versus the same period of 2024, primarily due to increased product sales and increased freight costs. Consolidated cost of sales percentage was 75% and 80% for the three months ended June 30, 2025 and 2024, respectively.

Consolidated cost of sales for the six months ended June 30, 2025 increased $18.3 million, or 27%, versus the same period of 2024, primarily due to increased product sales and increased freight costs. Consolidated cost of sales percentage was 76% and 79% for the six months ended June 30, 2025 and 2024, respectively.

SG&A expenses for the three months ended June 30, 2025 increased $0.5 million, or 8%, versus the same period of 2024. The increase relates primarily to increased salaries and stock compensation expense, partially offset by decreased professional fees.

SG&A expenses for the six months ended June 30, 2025 increased $0.7 million, or 5.8%, versus the same period of 2024. The increase relates primarily to increased salaries and stock compensation expense, partially offset by decreased professional fees.

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Asset acquisition expenses were $4.2 million for both the three and six months ended June 30, 2025 related to expenses associated with the April 28, 2025 PWRtek Transactions.

Income from operations increased $0.4 million for the three months ended June 30, 2025, versus the same period in 2024. The increase was primarily driven by a $5.2 million increase in gross profit partially offset by $4.2 million in asset acquisition expenses and a $0.5 million increase in SG&A expenses during the three months ended June 30, 2025 as compared to the same period of 2024.

Income from operations increased $3.8 million for the six months ended June 30, 2025, versus the same period in 2024. The increase was primarily driven by an $8.9 million increase in gross profit partially offset by $4.2 million in asset acquisition expenses and a $0.7 million increase in SG&A expenses during the six months ended June 30, 2025 as compared to the same period of 2024.

Interest and other expense for the three months ended June 30, 2025 increased $0.6 million driven by a $0.7 million increase in interest payments on the new PWRtek Note compared to the same period of 2024. Interest and other expense for the six months ended June 30, 2025 increased $0.4 million driven by a $0.7 million increase in interest payments on the new PWRtek Note compared to the same period of 2024.

The Company's income tax expense for the three months ended June 30, 2025 and 2024 was $17 thousand and $15 thousand, respectively. The Company's income tax expense for the six months ended June 30, 2025 and 2024 was $0.1 million and $0.3 million, respectively.

**<u>Results by Segment (in thousands):</u>**

***Chemistry Technologies Results of Operations:***

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenue from external customers | $22543 | $16361 | $44552 | $28047 |
| Revenue from related party | 29877 | 27741 | 60606 | 54755 |
| Income from operations | 8049 | 6145 | 16940 | 12250 |

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CT revenue from external customers for the three months ended June 30, 2025 increased $6.2 million, or 38%, compared to the same period of 2024 driven primarily by increased activity. Revenue from related party for the three months ended June 30, 2025 increased $2.1 million, or 8%, compared to the same period of 2024, primarily driven by increased activity partially offset by decreased accrued Contract Shortfall Fees. CT revenue from external customers for the six months ended June 30, 2025 increased $16.5 million, or 59%, compared to the same period of 2024 driven primarily by increased activity. Revenue from related party for the six months ended June 30, 2025 increased $5.9 million, or 11%, compared to the same period of 2024, primarily driven by increased activity partially offset by decreased accrued Contract Shortfall Fees.

Income from operations for the CT segment for the three months ended June 30, 2025 increased $1.9 million compared to the same period of 2024. The increase was driven by increased gross profit of $2.1 million for the three months ended June 30, 2025, which was related to increased product volumes partially offset by a corresponding increase in cost of sales. Income from operations for the CT segment for the six months ended June 30, 2025 increased $4.7 million compared to the same period of 2024. The increase was driven by increased gross profit of $5.2 million for the six months ended June 30, 2025, which was related to increased product volumes partially offset by a corresponding increase in cost of sales.

***Data Analytics Results of Operations:***

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenue from external customers | $2639 | $1830 | $5053 | $3324 |
| Revenue from related party | 3291 | 220 | 3501 | 400 |
| Income (loss) from operations | (1919) | (358) | (2044) | (782) |

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DA revenue from external customers for the three months ended June 30, 2025 increased $0.8 million, or 44.3%, compared to the same period of 2024 primarily due to increased unit sales. Revenue from related party for three months ended June 30, 2025 increased $3.1 million compared to the same period of 2024 primarily due to PWRtek rental income. DA revenue from

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external customers for the six months ended June 30, 2025 increased $1.7 million, or 52%, compared to the same period of 2024 primarily due to increased unit sales. Revenue from related party for the six months ended June 30, 2025 increased $3.1 million compared to the same period of 2024 primarily due to PWRtek rental income.

Loss from operations for the DA segment for the three months ended June 30, 2025 increased $1.6 million compared to the same period of 2024 primarily driven by increased materials costs and $4.2 million of asset acquisition expenses related to the PWRtek Transactions, partially offset by PWRtek rental income and increased activity. Loss from operations for the DA segment for the six months ended June 30, 2025 increased $1.3 million compared to the same period for 2024 primarily driven by increased materials costs and $4.2 million of asset acquisition expenses related to the PWRtek Transactions, partially offset by PWRtek rental income and increased activity.

***Corporate and Other Results of Operations:***

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended June 30,** | **Three months ended June 30,** | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Loss from operations | $(3543) | $(3565) | $(6742) | $(7138) |

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Loss from operations for the three months ended June 30, 2025 was relatively flat compared to the same period of 2024. Loss from operations for the six months ended June 30, 2025 decreased $0.4 million, or 6%, compared to the same period of 2024 attributable to decreased professional fees.

**<u>Capital Resources and Liquidity</u>**

***Overview***

The Company's working capital requirements relate to the acquisition and maintenance of equipment and funding obligations as they become due. During the six months ended June 30, 2025, the Company funded working capital requirements with cash on hand, borrowings under the ABL (defined below) and cash flow from operations. We believe our cash and cash equivalents, cash generated from operating activities, which includes the impact of the transactions described in "Recent Events" above, the collection or offset utilization of future Contract Shortfall Fees as described below, and availability under the ABL will be sufficient to fund our capital requirements and anticipated obligations as they become due over the next twelve months.

However, sustained weakness in the oil and gas markets, and the resulting potential impact on our customers' ability to pay their obligations to us in a timely manner could have a negative impact on our liquidity. In addition, the availability of capital is dependent on the Company's operating cash flow, which is currently expected to be principally derived from the ProFrac Agreement and the Lease Agreement. The minimum purchase requirements under the ProFrac Agreement were not met during 2024. As a result, the Company recorded revenue related to the 2024 Contract Shortfall Fees totaling $32.6 million. The Company collected $15.0 million of 2024 Contract Shortfall Fees in cash during the first quarter of 2025. The remainder of the 2024 Contract Shortfall Fees were offset as consideration for the Acquired Assets, see "Recent Events" above. The current measurement period for Contract Shortfall Fees is January 1, 2025 through December 31, 2025. The Company does not expect that the minimum purchase requirements will be met during the current measurement period, and as a result, related party revenues for the six months ended June 30, 2025 reflect Contract Shortfall Fees of $15.2 million. As noted above under "Company Overview – ProFrac Supply Agreement," the Company and ProFrac Services have agreed that any future Contract Shortfall Fees will be offset by the approximately $7.2 million residual payable due under the Purchase Agreement. In addition, the Company and ProFrac each have rights to offset future Contract Shortfall Fees against the PWRtek Note.

As of June 30, 2025, the Company had unrestricted cash and cash equivalents of $5.0 million compared to $4.4 million on December 31, 2024. In addition, on July 31, 2025, the Company had approximately $7.3 million in available borrowings under the ABL. During the six months ended June 30, 2025, the Company had $8.2 million of operating income, $2.8 million of cash provided by operating activities, $1.3 million of cash used in investing activities and $0.7 million of cash used in financing activities.

***Asset Based Loan***

In August 2023, the Company entered into a 24-month revolving loan and security agreement in connection with an Asset Based Loan, which was amended in October 2023, August 2024 and April 2025 (as amended, the "ABL"). The August 2024 amendment to the ABL extended the maturity to August 2026, increased the credit availability and lowered the interest rate spread. The ABL provides up to $20.0 million of credit availability, which is limited by a borrowing base consisting of (i) 85% of eligible accounts receivable, plus (ii) 60% of the value of eligible inventory not to exceed 100% of the eligible accounts receivable, plus (iii) 60% of the value of certain real estate holdings.

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As of June 30, 2025, the Company had $5.1 million outstanding under the ABL. During the six months ended June 30, 2025, the Company incurred $0.3 million in interest and fees related to the ABL. As of June 30, 2025, the Company recorded $0.2 million of unamortized deferred financing costs related to the ABL.

Borrowings under the ABL bear interest at the Wall Street Journal Prime Rate (subject to a floor of 5.50%) plus 2.0% per annum. The interest rate under the ABL was 9.5% as of June 30, 2025. For the six months ended June 30, 2025, the weighted-average interest rate was 9.5%. The ABL contains an annual commitment fee equal to 1.0% of the ABL's borrowing base. Additionally, the Company will be assessed a non-usage fee of 0.25% per quarter based on the difference between the average daily outstanding balance and the borrowing base limit of the ABL. If the ABL is terminated prior to the end of its term, the Company is required to pay an early termination fee of 2.50% of the borrowing base limit of the ABL (if terminated with more than 12 months remaining until the maturity date) or 1.50% of the borrowing base limit of the ABL (if terminated with less than 12 months remaining until the maturity date).

In connection with the Company's entry into the Purchase Agreement, the Company entered into the Letter Agreement with the lender whereby the lender will not test compliance with respect to the Tangible Net Worth (as defined in the ABL) covenant through and including December 31, 2025. Pursuant to the Letter Agreement, the Company will be required to maintain positive trailing three-month consolidated net income on a monthly basis through and including December 31, 2025 and PWRtek is prohibited from making distributions, except as permitted pursuant to the PWRtek Note. In addition, the ABL provides the lender a blanket security interest on all or substantially all of the Company's assets, excluding the PWRtek Assets.

***Cash Flows***

Consolidated cash flows by type of activity are noted below (in thousands):

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| | | |
|:---|:---|:---|
| | **Six months ended June 30,** | **Six months ended June 30,** |
| | **2025** | **2024** |
| Net cash provided by operating activities | $2822 | $827 |
| Net cash used in investing activities | (1302) | (195) |
| Net cash used in financing activities | (740) | (1765) |
| Effect of changes in exchange rates on cash and cash equivalents | (155) | 58 |
| Net change in cash and cash equivalents and restricted cash | $625 | $(1075) |

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*Operating Activities*

Net cash provided by operating activities was $2.8 million during the six months ended June 30, 2025 compared to net cash provided by operating activities of $0.8 million for the same period of 2024. Consolidated net income for the six months ended June 30, 2025 was $7.1 million compared to consolidated net income of $3.5 million for the six months ended June 30, 2024.

During the six months ended June 30, 2025, non-cash adjustments to net income totaled $5.9 million as compared to $5.9 million for the same period of 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For the six months ended June 30, 2025, non-cash adjustments included non-cash positive adjustments of $1.1 million of stock compensation expense, $2.9 million amortization of contract assets and $0.6 million of non-cash lease expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For the six months ended June 30, 2024, non-cash adjustments included non-cash positive adjustments of $0.6 million of stock compensation expense, $2.7 million amortization of contract assets and $1.2 million of non-cash lease expense.

During the six months ended June 30, 2025, changes in working capital used $10.2 million of cash as compared to $8.6 million for the same period of 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For the six months ended June 30, 2025, changes in working capital resulted primarily from an increase in related party accounts receivable of $2.5 million, increased third party accounts receivable of $5.1 million, decreased accrued liabilities and operating lease liabilities of $1.9 million and $0.9 million, respectively and decreases in accounts payable of $1.7 million, partially offset by a decrease in net inventories of $1.4 million and an increase in interest payable of $0.7 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For the six months ended June 30, 2024, changes in working capital resulted primarily from an increase in related party accounts receivable of $5.5 million, a decrease in third party accounts receivable of $0.3 million and net

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inventories of $0.2 million along with decreased accrued liabilities and operating lease liabilities of $2.8 million and $1.5 million, respectively, partially offset by increases in accounts payable of $0.1 million, and other assets of $0.7 million.

*Investing Activities*

Net cash used in investing activities for the six months ended June 30, 2025 and 2024 was $1.3 million and $0.2 million, respectively, primarily driven by $1.3 million and $0.2 million in capital expenditures for the six months ended June 30, 2025 and 2024, respectively.

*Financing Activities*

Net cash used in financing activities for the six months ended June 30, 2025 was $0.7 million and relates primarily to $0.3 million in net payments on the ABL, payments for loan origination costs on the PWRtek Note, the issuance cost of the April 2025 Warrant and payments to tax authorities for shares withheld from employees, partially offset by proceeds from the issuance of stock under the Company's Employee Stock Purchase Plan and stock option exercises. Net cash used in financing activities was $1.8 million for the six months ended June 30, 2024, and relates primarily to $1.7 million in net payments on the ABL.

***Critical Accounting Policies and Estimates***

The preparation of financial statements and related disclosures in conformity with U.S. GAAP and the Company's discussion and analysis of its financial condition and operating results require the Company's management to make judgments, assumptions, and estimates that affect the amounts reported. Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the 2024 Annual Report describes the critical accounting policies and estimates used in the preparation of the Company's consolidated financial statements. Note 2, "Summary of Significant Accounting Policies," of the Notes to Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2024 Annual Report describe the significant accounting policies and methods used in the preparation of the Company's condensed consolidated financial statements.

Additionally, the Company believes the following are critical accounting policies and estimates used in preparation of the Company's consolidated financial statements due to the significant subjective and complex judgments and estimates required when preparing the Company's consolidated financial statements.

*Leases — Lessor Accounting*

We lease equipment to customers under operating lease arrangements. At contract inception we perform an evaluation to determine if a lease arrangement conveys the right to control the use of an identified asset. To the extent such rights of control are conveyed, we further make an assessment as to the applicable lease classification. The determination of appropriate lease classification (sales-type lease or operating lease) may require the use of management judgment, including economic life of the leased equipment, the rate implicit in the lease used to determine the fair value of lease payments, and the fair value of leased equipment.

**Item 3. Quantitative and Qualitative Disclosures about Market Risk** 

The Company is primarily exposed to market risk from changes in interest rates, raw material prices, freight costs and foreign currency exchange rates. There have been no material changes to the quantitative or qualitative disclosures about market risk set forth in Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" of the 2024 Annual Report.

**Item 4. Controls and Procedures**

***Evaluation of Disclosure Controls and Procedures***

The Company's disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. The Company's disclosure controls and procedures are also designed to ensure such information is accumulated and communicated to management, including the principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance that control objectives are attained.

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In accordance with Exchange Act Rules 13a-15(e) and 15d-15(e), we carried out an evaluation under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures as of June 30, 2025. Based upon this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of June 30, 2025.

Our management, including our principal executive officer and our principal financial officer, does not expect that our disclosure controls and procedures can prevent all possible errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that objectives of the control system are met. There are inherent limitations in all control systems, including the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the intentional acts of one or more persons. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and while our disclosure controls and procedures are designed to be effective under circumstances where they should reasonably be expected to operate effectively, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in any control system, misstatements due to possible errors or fraud may occur and not be detected.

***Changes in Internal Control over Financial Reporting***

There have been no changes in the Company's internal control over financial reporting (identified in connection with the evaluation required by Rule 13a-15(d) and Rule 15d-15(d) under the Exchange Act) during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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**PART II - OTHER INFORMATION**

**Item 1. Legal Proceedings**

Except as described in Note 13, "Commitments and Contingencies" of the Notes to Unaudited Condensed Consolidated Financial Statements contained in Part I, Item 1, there have been no material changes in the legal proceedings as described in "Item 3. - Legal Proceedings" in the 2024 Annual Report.

**Item 1A. Risk Factors**

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors contained in "Item 1A.-Risk Factors" in our 2024 Annual Report and "Item 1A.-Risk Factors" in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 (the "Q1 2025 Quarterly Report"), which could materially affect our business, financial condition and/or future results. As of June 30, 2025, there have been no material changes in our risk factors from those set forth in the 2024 Annual Report, except as set forth in our Q1 2025 Quarterly Report. The risks described in the 2024 Annual Report and the Q1 2025 Quarterly Report are not the only risks facing our company. Additional risks and uncertainties not currently known to us or those we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or future results.

**Item 2. Unregistered Sales of Equity Securities** 

***Unregistered Sales of Equity Securities***

None.

***Issuer Repurchases of Equity Securities***

The Company's stock compensation plans allow employees to elect to have shares withheld to satisfy their tax liabilities related to non-qualified stock options exercised or restricted stock vested or to pay the exercise price of the options. When this settlement method is elected by the employee, the Company repurchases the shares withheld upon vesting or exercise of the award. Repurchases of the Company's equity securities during the three months ended June 30, 2025 that the Company made or were made on behalf of the Company or any "affiliated purchaser," as defined in Rule 10b-18(a)(3) under the Exchange Act are as follows:

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| | | |
|:---|:---|:---|
| **Period** | **Total Number of Shares Purchased** <sup>(1)</sup> | **Average Price Paid per Share** |
| April 1, 2025 to April 30, 2025 | 5523 | $6.82 |
| May 1, 2025 to May 31, 2025 |  | $— |
| June 1, 2025 to June 30, 2025 | 124 | $14.63 |
| Total | 5647 |  |

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(1) The Company purchases shares of its common stock (a) to satisfy tax withholding requirements and payment remittance obligations related to period vesting of restricted shares and exercise of non-qualified stock options and (b) to satisfy payments required for common stock upon the exercise of stock options.

**Item 3. Defaults Upon Senior Securities**

None.

**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

***Trading Arrangements***

During the quarter ended June 30, 2025, no director or officer (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (in each case, as defined in Item 408(a) of Regulation S-K).

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***Bylaws***

Effective August 6, 2025, the Company's Board of Directors approved and adopted certain amendments to the Second Amended and Restated Bylaws of the Company (as amended, the "Bylaws"), to reflect changes in Delaware law and make certain other clarifying or conforming language changes, in addition to technical or ministerial changes. The foregoing description of the amendments does not purport to be complete and is qualified in its entirety by reference to the full text of the Bylaws, a copy of which is filed as Exhibit 3.6 hereto and is incorporated herein by reference.

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**Item 6. Exhibit**

---

| | | |
|:---|:---|:---|
| **Exhibit<br>Number** | | **Description of Exhibit** |
| 2.1 | \*\*\* | <u>[Membership Interest Purchase Agreement, dated as of May 18, 2020, by and between the Company, JP3 Measurement, LLC, the Sellers party thereto, and John A. Cardwell, as Seller Representative) (incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed on May 19, 2020).](https://www.sec.gov/Archives/edgar/data/928054/000092805420000089/mipaexecuted.htm)</u> |
| 3.1 |  | <u>[Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Form 10-Q for the quarter ended September 30, 2007).](https://www.sec.gov/Archives/edgar/data/928054/000119312507241953/dex31.htm)</u> |
| 3.2 |  | <u>[Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Form 10-Q for the quarter ended September 30, 2009).](https://www.sec.gov/Archives/edgar/data/928054/000119312509235953/dex31.htm)</u> |
| 3.3 |  | <u>[Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Flotek Industries, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed on May 7, 2020).](https://www.sec.gov/Archives/edgar/data/928054/000092805420000079/exhibit31.htm)</u> |
| 3.4 |  | <u>[Certificate of Amendment to the Amended and Restated Certificate of Incorporation (form of which is incorporated by reference to Appendix B to the Company's Proxy Statement filed on April 5, 2022).](https://www.sec.gov/Archives/edgar/data/928054/000092805422000080/flotekspecialmeeting-defin.htm#i55bdc85d1e63486791e68248d4646b38_37)</u> |
| 3.5 |  | <u>[Certificate of Amendment to Amended and Restated Certificate of Incorporation of Flotek Industries, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed on September 25, 2023).](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000928054/000092805423000188/usgaap-20230925.htm)</u> |
| 3.6 | \* | <u>[Second Amended and Restated Bylaws, as amended](ex36-floteksecondamendedan.htm)</u> |
| 4.1 |  | <u>[Form of Certificate of Common Stock (incorporated by reference to Appendix E to the Company's Definitive Proxy Statement filed on September 27, 2001).](https://www.sec.gov/Archives/edgar/data/928054/000003824201500031/flotekdefs14a.txt)</u> |
| 4.2 |  | <u>[Form of Convertible Note (incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on February 4, 2022).](https://www.sec.gov/Archives/edgar/data/928054/000092805422000010/flotekindustriesinc-formof.htm)</u> |
| 4.3 |  | <u>[Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 to the Company's Form 8-K filed on February 4, 2022).](https://www.sec.gov/Archives/edgar/data/928054/000092805422000010/formofpre-fundedwarrantxfl.htm)</u> |
| 4.4 |  | <u>[10% Convertible PIK Note dated May 17, 2022 (incorporated by reference to Exhibit 10.3 to the Company's Form 8-K filed on May 18, 2022).](https://www.sec.gov/Archives/edgar/data/928054/000092805422000130/formofconvertiblenote-fina.htm)</u> |
| 4.5 |  | <u>[Form of Pre-Funded Warrants (incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on June 23, 2022).](https://www.sec.gov/Archives/edgar/data/928054/000092805422000149/formofpre-fundedwarrantfin.htm)</u> |
| 4.6 |  | <u>[Form of Warrant to Purchase Common Stock issued to ProFrac GDM, LLC (incorporated by reference to Exhibit 10.3 to the Company's Form 8-K filed on April 28, 2025).](https://www.sec.gov/Archives/edgar/data/928054/000119312525100512/d40555dex103.htm)</u> |
| 10.1 |  | <u>[Asset Purchase Agreement, dated April 28, 2025, among ProFrac GDM, LLC, PWRTEK, LLC, ProFrac Holding Corp., ProFrac Services, LLC, Flotek Industries, Inc. and Flotek Chemistry LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on April 28, 2025).](https://www.sec.gov/Archives/edgar/data/928054/000119312525100512/d40555dex101.htm)</u> |
| 10.2 |  | <u>[Lease Agreement, dated April 28, 2025, between PWRTEK, LLC and ProFrac GDM, LLC (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on April 28, 2025](https://www.sec.gov/Archives/edgar/data/928054/000119312525100512/d40555dex102.htm)</u>). |
| 10.3 |  | <u>[Form of Note issued to ProFrac GDM, LLC (incorporated by reference to Exhibit 10.4 to the Company's Form 8-K filed on April 28, 2025).](https://www.sec.gov/Archives/edgar/data/928054/000119312525100512/d40555dex104.htm)</u> |
| 10.4 |  | <u>[Form of Voting Agreement (ProFrac) (incorporated by reference to Exhibit 10.5 to the Company's Form 8-K filed on April 28, 2025).](https://www.sec.gov/Archives/edgar/data/928054/000119312525100512/d40555dex105.htm)</u> |
| 10.5 |  | <u>[Form of D&O Voting Agreement (incorporated by reference to Exhibit 10.6 to the Company's Form 8-K filed on April 28, 2025).](https://www.sec.gov/Archives/edgar/data/928054/000119312525100512/d40555dex106.htm)</u> |
| 10.6 |  | <u>[Form of Parent Guaranty issued to ProFrac GDM, LLC (incorporated by reference to Exhibit 10.7 to the Company's Form 8-K filed on April 28, 2025).](https://www.sec.gov/Archives/edgar/data/928054/000119312525100512/d40555dex107.htm)</u> |
| 10.7 |  | <u>[Letter Agreement, dated as of April 28, 2025, between Amerisource Funding, Inc. and Flotek Industries, Inc. (incorporated by reference to Exhibit 10.8 to the Company's Form 8-K filed on April 28, 2025)](https://www.sec.gov/Archives/edgar/data/928054/000119312525100512/d40555dex108.htm)</u>. |
| 10.8 |  | <u>[Flotek Industries, Inc. 2018 Long-Term Incentive Plan, as amended (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8 filed on July 10, 2025).](https://www.sec.gov/Archives/edgar/data/928054/000092805425000067/forms-82025ltipamendment.htm)</u> |
| 31.1 | \* | <u>[Rule 13a-14(a) Certification of Principal Executive Officer.](ex311_10qxq2-25.htm)</u> |
| 31.2 | \* | <u>[Rule 13a-14(a) Certification of Principal Financial Officer.](ex312_10qxq2-25.htm)</u> |
| 32.1 | \*\* | <u>[Section 1350 Certification of Principal Executive Officer.](ex321_10qx2q25.htm)</u> |
| 32.2 | \*\* | <u>[Section 1350 Certification of Principal Financial Officer.](ex322_10qx2q-25.htm)</u> |
| 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-Q.

\*\* Furnished with this Form 10-Q, not filed.

\*\*\* Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission or its staff.

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**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 8, 2025

---

| | |
|:---|:---|
| FLOTEK INDUSTRIES, INC. | FLOTEK INDUSTRIES, INC. |
| By: | &nbsp;&nbsp;&nbsp;&nbsp;/s/&nbsp;&nbsp;&nbsp;&nbsp;Ryan Ezell |
|  | **Ryan Ezell** |
|  | **Chief Executive Officer** |
| By: | /s/&nbsp;&nbsp;&nbsp;&nbsp;Bond Clement |
|  | **Bond Clement** |
|  | **Chief Financial Officer <br>(Principal Financial and Accounting Officer)** |

---

## Exhibit 3.6

**Exhibit 3.6**

SECOND AMENDED AND RESTATED

BYLAWS

OF

FLOTEK INDUSTRIES, INC.

A Delaware Corporation

ARTICLE I

REGISTERED OFFICE

The registered office of the Corporation required by the Delaware General Corporation Law to be maintained in the State of Delaware, shall be the registered office named in the Certificate of Incorporation of the Corporation, or such other office (which need not be a place of business or principal place of business of the Corporation) as may be designated from time to time by the Board of Directors in the manner provided by law.

ARTICLE II

STOCKHOLDERS

*Section 1. Place of Meetings*. All meetings of the stockholders shall be held at the principal place of business of the Corporation, or at such other place within or without the State of Delaware as shall be specified or fixed in the notices (or waivers of notice) thereof. The Board of Directors may, in its sole discretion, determine that a meeting of the stockholders not be held at a place, but instead be held solely by means of remote communication in the manner and to the extent permitted by applicable law.

*Section 2. Quorum; Adjournment of Meetings.* Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, the holders of a majority of the stock issued and outstanding and entitled to vote at any meeting of stockholders, present in person or represented by proxy thereat (determined based on the relative number of votes to which each share is entitled with respect to the election of directors), shall constitute a quorum at any such meeting for the transaction of business. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of sufficient stockholders to destroy the quorum. Notwithstanding other provisions of the Certificate of Incorporation or these Bylaws, the chairman of the meeting of stockholders or the holders of a majority of the stock, present in person or represented by proxy and entitled to vote thereat, whether or not a quorum is present, shall have the power to adjourn such meeting from time to time, and notice need not be given of any such adjourned meeting if the time, place, if any, thereof and the means of remote communication, if any, are provided in accordance with applicable law. If the adjournment is for more than thirty (30) days, or if subsequent to the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at such meeting. At any such adjourned meeting at which a quorum shall be present or represented by proxy, any business may be transacted which might have been transacted at the meeting as originally called. If authorized by the Board of Directors, in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may by means of remote communication, to the fullest extent permitted by applicable law: (a) participate in a meeting of stockholders, and (b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication.

*Section 3. Annual Meetings*. An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly be considered at the meeting, shall be held at such place, within or without the State of Delaware, or by means of remote communication, on such date, and at such time as the Board of Directors shall fix and set forth in the notice of the meeting. If the Board of Directors has not fixed a place for the holding of the annual meeting of stockholders in accordance with this Article

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II, Section 3, and has not determined that the annual meeting shall be held by means of remote communication, such annual meeting shall be held at the principal place of business of the Corporation. The Corporation may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board of Directors.

*Section 4. Special Meetings.* Unless otherwise provided in the Certificate of Incorporation, special meetings of the stockholders for any proper purpose or purposes may be called at any time only by the Chairman of the Board (if any), the Board of Directors, or the Chief Executive Officer ("CEO"). The Corporation may postpone, reschedule or cancel any special meeting of stockholders previously scheduled by the Board of Directors.

*Section 5. Record Date.* For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders, or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing such record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days prior to the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination.

If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the day next preceding the day on which notice of such meeting is given or, if notice is waived in accordance with Article VIII, Section 3 of these Bylaws, the close of business on the day next preceding the day on which the meeting of stockholders is held.

If, in accordance with Article II, Section 12 hereof, corporate action without a meeting of stockholders is to be taken, the Board of Directors may fix a record date for determining stockholders entitled to consent in writing to such corporate action, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten (10) days subsequent to the date upon which the resolution fixing the record date is adopted by the Board of Directors.

If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office, its principal place of business, or to an officer or to agent of the Corporation having custody of the books in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or the stockholders entitled to exercise any rights in connection with any change, conversion or exchange of stock, or for the purpose of any other lawful action (other than one of the purposes addressed in the first paragraph of this Section 5 of this Article II), the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

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*Section 6. Notice of Meetings*. Written notice stating the place, if any, means of remote communication, if any, day and hour of all meetings and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days prior to the date of the meeting, either personally, by mail, or by electronic transmission in accordance with applicable law, by or at the direction of the CEO, the Secretary or the officer or person calling the meeting, to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to have been given when addressed to the stockholder, at his address as it appears on the share transfer records of the Corporation, postage prepaid, and deposited in the United States mail. An affidavit of the Secretary, an Assistant Secretary, the transfer agent or another agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

*Section 7. Voting List*. The Corporation shall prepare and make, no later than the tenth day before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten (10) days ending on the day before the meeting date, shall be open to the examination of any stockholder, for any purpose germane to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list was provided with the notice of the meeting; or (b) during ordinary business hours, at the principal place of business of the Corporation. Except as provided by applicable law, the stock ledger of the Corporation shall be the only evidence as to the identity of those stockholders entitled to examine such voting list or to vote at any meeting of stockholders. Failure to comply with the requirements of this Article II, Section 7 shall not affect the validity of any action taken at such meeting*.*

*Section 8. Proxies.* Each stockholder entitled to vote at a meeting of stockholders or to express consent, or dissent to a corporate action in writing without a meeting, may authorize another person or persons to act for him by proxy. Proxies for use at any meeting of stockholders shall be filed with the Secretary, or such other officer as the Board of Directors may from time to time determine by resolution, prior to or at the time of such meeting. All proxies shall be received and taken charge of and all ballots shall be received and canvassed by the secretary of the meeting who shall also decide all questions with respect to the validity of such proxies, the qualification of voters, and the acceptance or rejection of votes, unless an inspector or inspectors shall have been appointed by the chairman of the meeting, in which event such inspector or inspectors shall decide all such questions.

No proxy shall be valid after three (3) years from the date of its execution, unless such proxy provides for a longer period. Each proxy, unless expressly provided therein to be irrevocable and coupled with an interest sufficient in law to support an irrevocable power, shall be revocable.

Should a proxy designate two or more persons to act as proxies, unless such instrument shall expressly provide otherwise, a majority of such persons present at any meeting at which their powers thereunder are to be exercised shall have and may exercise all the powers of voting or consent thereby conferred, or if only one be present, then such powers may be exercised by that one; or, if an even number attend and a majority cannot agree on any particular issue, the Corporation shall not be required to recognize such proxy with respect to such issue, if such proxy does not specify how the shares that are the subject of such proxy are to be voted with respect to such issue in such a contingency.

*Section 9. Voting; Inspectors; Elections.* Unless otherwise required by law or provided in the Certificate of Incorporation, each stockholder shall, on each matter submitted to a vote at a meeting of stockholders, have one vote for each share of stock entitled to vote thereon, which is registered in his name on the record date for such meeting. Shares registered in the name of another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the Bylaws (or comparable instrument) of such corporation may prescribe, or in the absence of such provision, as the Board of Directors (or comparable body) of such corporation may determine. Shares registered in the name of a deceased person may be voted by his executor or administrator, either in person or by proxy.

All voting, except as otherwise required by law or the Certificate of Incorporation, may be by a voice vote; provided, however, that upon demand by stockholders holding a majority of the stock present in person or by proxy at any meeting of stockholders, a stock vote shall be taken. Every stock vote shall be taken by written ballot, each of which

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shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting. All elections of directors shall be by stock vote, unless otherwise provided in the Certificate of Incorporation.

At any meeting at which a vote is taken by ballot, the chairman of such meeting may appoint one or more inspectors, each of whom shall sign an oath or affirmation to faithfully execute, to the best of his ability and with strict impartiality, the duties of inspector at such meeting. Such inspector shall receive the ballots, count the votes and make and sign a certificate of the results thereof. The chairman of the meeting may appoint any person to serve as inspector, provided, however, that no candidate for the office of director shall be appointed as an inspector.

Except as set forth below in this paragraph, the election of directors at any meetings of the stockholders at which directors are to be elected shall be by ballot and, subject to any rights of the holders of any class or series of stock to elect directors separately, each director shall be elected by a majority of the votes cast with respect to the director by stockholders entitled to vote and present in person or represented by proxy. For purposes of the immediately preceding sentence, a majority of the votes cast means that the number of shares voted "for" a director must exceed 50% of the votes cast "for" or "against" with respect to that director, excluding abstentions and broker non-votes. Notwithstanding the foregoing, if the number of eligible nominees standing for election at any meeting of the stockholders exceeds the number of directors to be elected, the directors shall be elected by a plurality of the votes cast at the meeting. If an incumbent director who is nominated for re-election does not receive sufficient votes "for" to be elected, the director shall promptly tender his resignation to the Chairman of the Board following certification of the vote. The Corporate Governance and Nominating Committee of the Board shall make a recommendation to the Board of Directors on whether to accept or reject the resignation, or whether other action should be taken. The Board shall act on the tendered resignation, taking into account the Corporate Governance and Nominating Committee's recommendation, and publicly disclose (by a press release, a filing with the Securities and Exchange Commission or other broadly disseminated means of communication) its decision regarding the tendered resignation within 90 days from the date of the certification of the election results. The Corporate Governance and Nominating Committee in making its recommendation, and the Board in making its decision, may each consider any factors or other information that it considers appropriate and relevant. The director who tenders his resignation should not participate in the recommendation of the Corporate Governance and Nominating Committee or the decision of the Board with respect to his resignation. If such incumbent director's resignation is not accepted by the Board, such director shall continue to serve until the next annual meeting of the stockholders of the Corporation and until his successor is duly elected, or his earlier resignation or removal. If a director's resignation is accepted by the Board pursuant to this Section, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of Article III, Section 8 of these Bylaws or may decrease the size of the Board pursuant to the provisions of Article III, Section 1 of these Bylaws.

Unless otherwise required by law, the Certificate of Incorporation, or these Bylaws, any matter, other than the election of directors, shall be determined by a majority of the votes cast by stockholders entitled to vote and present in person or represented by proxy.

Unless otherwise provided in the Certificate of Incorporation, cumulative voting for the election of directors shall be prohibited.

*Section 10. Conduct of Meetings.* All meetings of the stockholders shall be presided over by the chairman of the meeting, who shall be the Chairman of the Board (if any) of the Corporation, or if he is not present, the CEO of the Corporation, or if neither the Chairman of the Board (if any) nor CEO is present, a chairman elected by the Board at such meeting. The Secretary of the Corporation, if present, shall act as secretary of such meetings, or if he is not present, an Assistant Secretary (if any) shall so act; if neither the Secretary nor an Assistant Secretary (if any) is present, then a secretary shall be appointed by the chairman of the meeting. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion, as seem to him in order. Unless the chairman of the meeting shall otherwise determine, the order of business shall be as follows:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Calling of meeting to order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Election of a chairman and the appointment of a secretary (if necessary).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Presentation of proof of the due calling of the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Presentation and examination of proxies and determination of a quorum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Reports of officers and committees, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)The election of directors, if the meeting is an annual meeting or a meeting called for that purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)Voting on any other matters up for stockholder consideration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Unfinished business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)New business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)Adjournment.

*Section 11. Treasury Shares.* Neither the Corporation nor any other person shall vote, directly or indirectly, at any meeting of stockholders, shares of the Corporation's own stock owned by the Corporation, shares of the Corporation's own stock owned by another corporation the majority of the voting stock of which is owned or controlled by the Corporation, and such shares shall not be counted for quorum purposes or in determining the number of outstanding shares.

*Section 12. Action by Written Consent.* Unless otherwise provided in the Certificate of Incorporation, any action permitted or required to be taken at a meeting of stockholders by law, the Certificate of Incorporation or these Bylaws, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of all of the outstanding stock entitled to vote on such action and such consent shall be delivered to the Corporation's registered office, its principal place of business, or to an officer or agent of the Corporation having custody of the books in which the proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. Every written consent shall bear the date of signature thereto and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the first consent delivered to the Corporation in the manner required by this Article II, Section 12, written consents signed by all of the stockholders entitled to vote on such action are delivered to the Corporation.

*Section 13. Notice of Business to be Brought Before a Meeting.*

(a)At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (i) specified in a notice of meeting given by or at the direction of the Board of Directors, (ii) if not specified in a notice of meeting, otherwise brought before the meeting by the Board of Directors or the Chairman of the Board or (iii) otherwise properly brought before the meeting by a stockholder present in person who (A) (1) was a beneficial owner of shares of the Corporation both at the time of giving the notice provided for in this Section 13 and at the time of the meeting, (2) is entitled to vote at the meeting, and (3) has complied with this Section 13 in all applicable respects or (B) properly made such proposal in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (as so amended and inclusive of such rules and regulations, the "Exchange Act"). The foregoing clause (iii) shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of the stockholders. The only matters that may be brought before a special meeting of the stockholders are the matters specified in the notice of meeting given by or at the direction of the person calling the meeting pursuant to Article II, Section 4, and stockholders shall not be permitted to propose business to be brought before a special meeting of the stockholders. For purposes of this Section 13, "present in person" shall mean that the stockholder proposing that the business be brought before the annual meeting of the Corporation, or a qualified representative of such proposing stockholder, appear at such annual meeting. A "qualified representative" of such proposing stockholder shall be a duly authorized officer, manager or partner of such stockholder or any other person authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders. Stockholders seeking to nominate persons for election to the

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Board of Directors must comply with Article II, Section 14 and Section 15 and this Section 13 shall not be applicable to nominations except as expressly provided in Article II, Section 14 and Section 15.

(b)Without qualification, for business to be properly brought before an annual meeting by a stockholder, the stockholder must (i) provide Timely Notice (as defined below) thereof in writing and in proper form to the Secretary of the Corporation and (ii) provide any updates or supplements to such notice at the times and in the forms required by this Section 13. To be timely, a stockholder's notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year's annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the ninetieth (90th) day prior to such annual meeting or, if later, the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made (such notice within such time periods, "Timely Notice"). In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of Timely Notice as described above.

(c)To be in proper form for purposes of this Section 13, a stockholder's notice to the Secretary shall set forth:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)As to each Proposing Person (as defined below), (A) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the Corporation's books and records); and (B) the class or series and number of shares of the Corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person, except that such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future (the disclosures to be made pursuant to the foregoing clauses (A) and (B) are referred to as "Stockholder Information");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)As to each Proposing Person, (A) the full notional amount of any securities that, directly or indirectly, underlie any "derivative security" (as such term is defined in Rule 16a-1(c) under the Exchange Act) that constitutes a "call equivalent position" (as such term is defined in Rule 16a-1(b) under the Exchange Act) ("Synthetic Equity Position") and that is, directly or indirectly, held or maintained by such Proposing Person with respect to any shares of any class or series of shares of the Corporation; provided that, for the purposes of the definition of "Synthetic Equity Position," the term "derivative security" shall also include any security or instrument that would not otherwise constitute a "derivative security" as a result of any feature that would make any conversion, exercise or similar right or privilege of such security or instrument becoming determinable only at some future date or upon the happening of a future occurrence, in which case the determination of the amount of securities into which such security or instrument would be convertible or exercisable shall be made assuming that such security or instrument is immediately convertible or exercisable at the time of such determination; and, provided, further, that any Proposing Person satisfying the requirements of Rule 13d-1(b)(1) under the Exchange Act (other than a Proposing Person that so satisfies Rule 13d-1(b)(1) under the Exchange Act solely by reason of Rule 13d-1(b)(1)(ii)(E)) shall not be deemed to hold or maintain the notional amount of any securities that underlie a Synthetic Equity Position held by such Proposing Person as a hedge with respect to a bona fide derivatives trade or position of such Proposing Person arising in the ordinary course of such Proposing Person's business as a derivatives dealer, (B) any rights to dividends on the shares of any class or series of shares of the Corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation, (C) any material pending or threatened legal proceeding in which such Proposing Person is a party or material participant involving the Corporation or any of its officers or directors, or any affiliate of the Corporation, (D) any other material relationship between such Proposing Person, on the one hand, and the Corporation, any affiliate of the Corporation, on the other hand, (E) any direct or indirect material interest in any material contract or agreement of such Proposing Person with the Corporation or any affiliate of the Corporation (including, in any such case, any employment

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agreement, collective bargaining agreement or consulting agreement), (F) a representation that such Proposing Person intends or is part of a group which intends to deliver a proxy statement or form of proxy to holders of at least the percentage of the Corporation's outstanding capital stock required to approve or adopt the proposal or otherwise solicit proxies from stockholders in support of such proposal and (G) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (A) through (G) are referred to as "Disclosable Interests"); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)As to each item of business that the stockholder proposes to bring before the annual meeting, (A) a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in such business of each Proposing Person, (B) the text of the proposal or business (including the text of any resolutions proposed for consideration), and (C) a reasonably detailed description of all agreements, arrangements and understandings (x) between or among any of the Proposing Persons or (y) between or among any Proposing Person and any other person or entity (including their names) in connection with the proposal of such business by such stockholder; and (D) any other information relating to such item of business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act; provided, however, that the disclosures required by this paragraph (iii) shall not include any disclosures with respect to any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner.

For purposes of this Section 13, the term "Proposing Person" shall mean (i) the stockholder providing the notice of business proposed to be brought before an annual meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting is made, and (iii) any participant (as defined in paragraphs (a)(ii)-(vi) of Instruction 3 to Item 4 of Schedule 14A) with such stockholder in such solicitation.

(d)A Proposing Person shall update and supplement its notice to the Corporation of its intent to propose business at an annual meeting, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 13 shall be true and correct as of the record date for stockholders entitled to vote at the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for stockholders entitled to vote at the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

(e)Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at an annual meeting that is not properly brought before the meeting in accordance with this Section 13. The presiding officer of the meeting shall, if the facts warrant, determine that the business was not properly brought before the meeting in accordance with this Section 13, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

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(f)This Section 13 is expressly intended to apply to any business proposed to be brought before an annual meeting of stockholders other than any proposal made in accordance with Rule 14a-8 under the Exchange Act and included in the Corporation's proxy statement. In addition to the requirements of this Section 13 with respect to any business proposed to be brought before an annual meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such business. Nothing in this Section 13 shall be deemed to affect the rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.

(g)For purposes of these Bylaws, "public disclosure" shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

*Section 14. Notice of Nominations for Election to the Board of Directors.*

(a)Nominations of any person for election to the Board of Directors at an annual meeting or at a special meeting (but only if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting) may be made at such meeting only (i) by or at the direction of the Board of Directors, including by any committee or persons authorized to do so by the Board of Directors or these bylaws, or (ii) by a stockholder present in person (A) who was a beneficial owner of shares of the Corporation both at the time of giving the notice provided for in this Section 14 and at the time of the meeting, (B) is entitled to vote at the meeting, and (C) has complied with this Section 14 and Article II, Section 15 as to such notice and nomination. For purposes of this Section 14, "present in person" shall mean that the stockholder making any nominations of a person or persons for election to the Board of Directors, or, if the proposing stockholder is not an individual, a qualified representative of such stockholder, appear at such meeting. A "qualified representative" of such proposing stockholder shall be a duly authorized officer, manager or partner of such stockholder or any other person authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders. The foregoing clause (ii) shall be the exclusive means for a stockholder to make any nomination of a person or persons for election to the Board of Directors at an annual meeting or special meeting.

(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Without qualification, for a stockholder to make any nomination of a person or persons for election to the Board of Directors at an annual meeting, the stockholder must (1) provide Timely Notice (as defined in Article II, Section 13) thereof in writing and in proper form to the Secretary of the Corporation, (2) provide the information, agreements and questionnaires with respect to such stockholder and its candidate for nomination as required to be set forth by this Section 14 and Article II, Section 15 and (3) provide any updates or supplements to such notice at the times and in the forms required by this Section 14 and Article II, Section 15.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Without qualification, if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling a special meeting, then for a stockholder to make any nomination of a person or persons for election to the Board of Directors at a special meeting, the stockholder must (i) provide timely notice thereof in writing and in proper form to the Secretary of the Corporation at the principal executive offices of the Corporation, (ii) provide the information with respect to such stockholder and its candidate for nomination as required by this Section 14 and Article II, Section 15 and (iii) provide any updates or supplements to such notice at the times and in the forms required by this Section 14 and Article II, Section 15. To be timely, a stockholder's notice for nominations to be made at a special meeting must be delivered to, or mailed and received at, the principal executive offices of the Corporation not earlier than the one hundred twentieth (120th) day prior to such special meeting and not later than the ninetieth (90th) day prior to such special meeting

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or, if later, the tenth (10th) day following the day on which public disclosure (as defined in Article II, Section 13) of the date of such special meeting was first made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)In no event shall any adjournment or postponement of an annual meeting or special meeting or the announcement thereof commence a new time period for the giving of a stockholder's notice as described above.

(c)To be in proper form for purposes of this Section 14, a stockholder's notice to the Secretary shall set forth:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)As to each Nominating Person (as defined below), the Stockholder Information (as defined in Article II, Section 13(c)(i), except that for purposes of this Section 14 the term "Nominating Person" shall be substituted for the term "Proposing Person" in all places it appears in Article II, Section 13(c)(i));

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)As to each Nominating Person, any Disclosable Interests (as defined in Article II, Section 13(c)(ii), except that for purposes of this Section 14 the term "Nominating Person" shall be substituted for the term "Proposing Person" in all places it appears in Article II, Section 13(c)(ii) and the disclosure with respect to the business to be brought before the meeting in Article II, Section 13(c)(ii) shall be made with respect to the election of directors at the meeting); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)As to each candidate whom a Nominating Person proposes to nominate for election as a director, (A) all information with respect to such candidate for nomination that would be required to be set forth in a stockholder's notice pursuant to this Section 14 and Article II, Section 15 if such candidate for nomination were a Nominating Person, (B) all information relating to such candidate for nomination that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such candidate's written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (C) a description of any direct or indirect material interest in any material contract or agreement between or among any Nominating Person, on the one hand, and each candidate for nomination or his respective associates or any other participants in such solicitation, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such Nominating Person were the "registrant" for purposes of such rule and the candidate for nomination were a director or executive officer of such registrant (the disclosures to be made pursuant to the foregoing clauses (A) through (C) are referred to as "Nominee Information"), and (D) a completed and signed questionnaire, representation and agreement as provided in Section 15(a).

For purposes of this Section 14, the term "Nominating Person" shall mean (i) the stockholder providing the notice of the nomination proposed to be made at the meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the nomination proposed to be made at the meeting is made, and (iii) any other participant in such solicitation.

(d)A stockholder providing notice of any nomination proposed to be made at a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 14 shall be true and correct as of the record date for stockholders entitled to vote at the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for stockholders entitled to vote at the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

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(e)In addition to the requirements of this Section 14 with respect to any nomination proposed to be made at a meeting, each Nominating Person shall comply with all applicable requirements of the Exchange Act with respect to any such nominations.

*Section 15. Additional Requirements For Valid Nomination of Candidates to Serve as Director and, If Elected, to Be Seated as Directors.*

(a)To be eligible to be a candidate for election as a director of the Corporation at an annual or special meeting, a candidate must be nominated in the manner prescribed in Article II, Section 14 and the candidate for nomination, whether nominated by the Board of Directors or by a stockholder of record, must have previously delivered (in accordance with the time period prescribed for delivery in a notice to such candidate given by or on behalf of the Board of Directors), to the Secretary at the principal executive offices of the Corporation, (i) a completed written questionnaire (in a form provided by the Corporation) with respect to the background, qualifications, stock ownership and independence of such proposed nominee and (ii) a written representation and agreement (in form provided by the Corporation) that such candidate for nomination (A) is not and, if elected as a director during his term of office, will not become a party to (1) any agreement, arrangement or understanding with, and has not given and will not give any commitment or assurance to, any person or entity as to how such proposed nominee, if elected as a director of the Corporation, will act or vote on any issue or question (a "Voting Commitment") or (2) any Voting Commitment that could limit or interfere with such proposed nominee's ability to comply, if elected as a director of the Corporation, with such proposed nominee's fiduciary duties under applicable law, (B) is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation or reimbursement for service as a director that has not been disclosed therein and (C) if elected as a director of the Corporation, will comply with all applicable corporate governance, conflict of interest, confidentiality, stock ownership and trading and other policies and guidelines of the Corporation applicable to directors and in effect during such person's term in office as a director (and, if requested by any candidate for nomination, the Secretary of the Corporation shall provide to such candidate for nomination all such policies and guidelines then in effect).

(b)The Board of Directors may also require any proposed candidate for nomination as a director to furnish such other information as may reasonably be requested by the Board of Directors in writing prior to the meeting of stockholders at which such candidate's nomination is to be acted upon in order for the Board of Directors to determine the eligibility of such candidate for nomination to be an independent director of the Corporation in accordance with the Corporation's Corporate Governance Guidelines.

(c)A candidate for nomination as a director shall further update and supplement the materials delivered pursuant to this Section 15, if necessary, so that the information provided or required to be provided pursuant to this Section 15 shall be true and correct as of the record date for stockholders entitled to vote at the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation (or any other office specified by the Corporation in any public announcement) not later than five (5) business days after the record date for stockholders entitled to vote at the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

(d)No candidate shall be eligible for nomination as a director of the Corporation unless such candidate for nomination and the Nominating Person seeking to place such candidate's name in nomination has complied with Article II, Section 14 and this Section 15, as applicable. The presiding officer at the meeting shall, if the facts warrant, determine that a nomination was not properly made in accordance with Article II, Section 14 and this Section 15, and if he should so determine, he shall so declare such determination to the meeting, the defective nomination shall be disregarded and any ballots cast for the candidate in question (but in the case of any form of

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ballot listing other qualified nominees, only the ballots case for the nominee in question) shall be void and of no force or effect.

(e)Notwithstanding anything in these Bylaws to the contrary, no candidate for nomination shall be eligible to be seated as a director of the Corporation unless nominated and elected in accordance with Article II, Section 14 and this Section 15.

ARTICLE III

BOARD OF DIRECTORS

*Section 1. Power; Number; Term of Office.* The powers of the Corporation shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under, the direction of the Board of Directors.

Unless otherwise provided in the Certificate of Incorporation, the number of directors that shall constitute the Board of Directors shall be determined from time to time by resolution of the Board of Directors (provided that no decrease in the number of directors that would have the effect of shortening the term of any incumbent director may be made by the Board of Directors). If the Board of Directors does not make such a determination, the number of directors shall be that number set forth in the Certificate of Incorporation as the number of directors constituting the initial Board of Directors. Each director shall hold office for the term for which he is elected and thereafter until his successor shall have been elected and qualified, or until his earlier death, resignation or removal.

Unless otherwise provided in the Certificate of Incorporation, directors need not be stockholders or residents of the State of Delaware.

*Section 2. Quorum; Required Vote for Director Action.* Unless otherwise required by law or provided in the Certificate of Incorporation or these Bylaws, a majority of the total number of directors fixed by or in the manner provided in the Certificate of Incorporation or these Bylaws shall constitute a quorum for the transaction of business at a meeting of the Board of Directors, and the act of a majority of the directors present at such meeting at which a quorum is present shall be the act of the Board of Directors.

*Section 3. Meetings; Order of Business.* The directors may hold their meetings and may have an office and keep the books of the Corporation, except as otherwise provided by law, in such place or places, within or without the State of Delaware, as the Board of Directors may from time to time determine by resolution. At all meetings of the Board of Directors business shall be transacted in such order as shall from time to time be determined by the Chairman of the Board (if any) or in his absence by the CEO (if the CEO is a director) or by resolution of the Board of Directors.

*Section 4. First Meeting.* In connection with any annual meeting of stockholders at which directors are elected the Board of Directors may, if a quorum is present, hold its first meeting for the transaction of business immediately after and at the place of such annual meeting of the stockholders. Notice of such meeting, at such time and place, shall not be required.

*Section 5. Regular Meetings.* Regular meetings of the Board of Directors shall be held at such times and places as shall be designated from time to time by resolution of the Board of Directors. Notice of such regular meetings shall not be required.

*Section 6. Special Meetings.* Special meetings of the Board of Directors may be called by the Chairman of the Board (if any), the CEO or, upon written request of a majority of the directors then in office, by the Secretary, in each case on at least twenty-four (24) hours personal, written, telegraphic, cable or wireless notice to each director. Such notice, or any waiver thereof pursuant to Article VIII, Section 3 hereof, need not state this purpose or purposes of such meeting, except as may otherwise be required by law, the Certificate of Incorporation or these Bylaws.

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*Section 7. Removal.* Any one or more directors or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors for the particular directors being removed.

*Section 8. Vacancies; Increases in the Number of Directors*. Unless otherwise provided in the Certificate of Incorporation or these Bylaws, vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by the affirmative vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. If the Certificate of Incorporation entitles the holders of any class or classes of stock or series thereof to elect one (1) or more directors, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected.

*Section 9. Compensation.* Unless otherwise provided in the Certificate of Incorporation, the Board of Directors shall have the authority to fix the compensation, if any, of directors.

*Section 10. Action Without a Meeting; Telephone Conference Meeting.* Unless otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors, or any committee designated by the Board of Directors, may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission and any consent may be documented, signed, and delivered in any manner permitted by Section 116 of the Delaware General Corporation Law, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Such consent shall have the same force and effect as a unanimous vote at a meeting, and may be stated as such in any document or instrument filed with the Secretary of State of Delaware.

Unless otherwise provided in the Certificate of Incorporation, subject to the requirement for notice of such meetings, members of the Board of Directors, or members of any committee designated by the Board of Directors, may participate in a meeting of such Board of Directors or committee, as the case may be, by means of a conference telephone or similar communications equipment, by means of which all persons participating in the meeting can hear each other, and participation in such meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

*Section 11. Approval or Ratification of Acts or Contracts by Stockholders.* The Board of Directors in its discretion may submit any act or contract for approval or ratification at any annual meeting of the stockholders, or at any special meeting of the stockholders called for the purpose of considering any such act or contract, and, unless otherwise required by law, the Certificate of Incorporation, or these Bylaws, any act or contract that shall be approved or ratified by a majority of the votes cast by stockholders entitled to vote and present in person or represented by proxy at such meeting (provided that a quorum is present), shall be as valid and as binding upon the Corporation and upon all the stockholders as if it had been approved or ratified by every stockholder of the Corporation.

*Section 12. Chairman of the Board.* The Board of Directors shall annually elect one of its members to be its chair (the "Chairman of the Board") and shall fill any vacancy in the position of Chairman of the Board at such time and in such manner as the Board of Directors shall determine. The Chairman of the Board (if any) shall preside at all meetings of the stockholders and of the Board of Directors; and he shall have such other powers and duties as designated in accordance with these Bylaws and as may be assigned to him from time to time by the Board of Directors.

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ARTICLE IV

COMMITTEES

*Section 1. Designation; Powers.* The Board of Directors may, by resolution passed by a majority of the whole board, designate one or more committees, including a Compensation Committee, an Audit Committee, and a Corporate Governance and Nominating Committee, each such committee consisting of one or more of the directors of the Corporation. Any such designated committee, to the extent permitted by applicable law, shall have and may exercise such of the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation as may be provided in such resolution. Any such designated committee may authorize the seal of the Corporation to be affixed to all papers which may require it. In addition, such committee or committees shall have such other powers and limitations of authority as may be determined from time to time by resolution adopted by the Board of Directors. The Corporation elects to be governed by Section 141(c)(2) of the Delaware General Corporation Law.

*Section 2. Procedure; Meetings; Quorum.* Any committee designated pursuant to Article IV, Section 1 hereof shall keep regular minutes of its proceedings and report the same to the Board of Directors when requested, shall fix its own rules and procedures, and shall meet at such times and at such place or places as may be provided by such rules or procedures, or by resolution of such committee or Board of Directors. At every meeting of any such committee, the presence of a majority of all the members thereof shall constitute a quorum, except as provided in Section 3 of this Article IV, and the affirmative vote of a majority of the members present shall be necessary for the adoption of any resolution.

*Section 3. Substitution of Members.* The Board of Directors may designate one or more directors as alternate members of any committee, provided such director meets the applicable requirements for service on such committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member, provided such director meets the applicable requirements for service on such committee.

ARTICLE V

OFFICERS

*Section 1. Number, Titles and Term of Office*. The officers of the Corporation shall be a CEO, if the Board of Directors so elects, a President, one or more Vice Presidents (any one or more of whom may be designated Executive Vice President or Senior Vice President), if the Board of Directors so elects, a Treasurer, a Secretary and, if the Board of Directors so elects, such other officers as the Board of Directors may from time to time elect or appoint. Each officer shall hold office until his successor shall be duly elected and shall qualify or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Any number of offices may be held by the same person, unless the Certificate of Incorporation provides otherwise.

*Section 2. Salaries.* The salaries or other compensation, if any, of the officers and agents of the Corporation shall be fixed from time to time by the Board of Directors or a committee delegated such authority by the Board of Directors.

*Section 3. Removal.* Any officer or agent elected or appointed by the Board of Directors may be removed, either with or without cause, by the vote of a majority of the whole Board of Directors at any regular meeting or at a special meeting called for such purpose, provided the notice for such meeting shall specify that such proposed removal will be considered at the meeting; provided, however, that such removal shall be without prejudice to the contractual rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contractual rights.

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*Section 4. Vacancies.* Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors.

*Section 5. Powers and Duties of the Chief Executive Officer.* The CEO shall be the chief executive officer of the Corporation. Subject to the control of the Board of Directors, the CEO shall have general executive charge, management and control of the properties, business and operations of the Corporation with all such powers as may be reasonably incident to such responsibilities; he may agree upon and execute all leases, contracts, evidences of indebtedness and other obligations in the name of the Corporation and may sign all certificates for shares of capital stock of the Corporation subject to any limitations imposed from time to time by the Board of Directors; and he shall have such other powers and duties as designated in accordance with these Bylaws and as may be assigned to him from time to time by the Board of Directors. The CEO will preside at all meetings of the stockholders in absence of a Chairman of the Board.

*Section 6. [Reserved.]* 

*Section 7. Powers and Duties of the President.* Unless otherwise determined by the Board of Directors or the CEO, the President, if there is such an officer, shall have the authority to agree upon and execute all leases, contracts, evidences of indebtedness and other obligations in the name of the Corporation subject to any limitations imposed from time to time by the Board of Directors and he shall, in the absence of the Chairman of the Board or the CEO or if there be no Chairman of the Board and CEO, preside at all meetings of the stockholders and (if a director) of the Board of Directors; and the President shall have such other powers and duties as designated in accordance with these Bylaws and as may be assigned to him from time to time by the Board of Directors or the CEO.

*Section 8. Vice Presidents.* Each Vice President shall perform such duties and have such powers as the Board of Directors, the CEO, or the President, if there is such an officer, may from time to time prescribe. In addition, in the absence of the CEO and the President, if there is such an officer, or in the event of his inability or refusal to act, a Vice President designated by the Board of Directors or, in the absence of such designation, the Vice President who is present and who is senior in terms of time as a Vice President of the Corporation, shall perform the duties of the CEO, as the case may be, and when so acting shall have all the powers of and be subject to all the restrictions upon the CEO, as the case may be; provided, however, that such Vice President shall not preside at meetings of the Board of Directors unless he is a director.

*Section 9. Treasurer.* The Treasurer, if there is such an officer, shall have responsibility for the custody and control of all the funds and securities of the Corporation, and he shall have such other powers and duties as designated in accordance with these Bylaws and as may be prescribed from time to time by the Board of Directors. He shall perform all acts incident to the position of Treasurer, subject to the control of the CEO and the Board of Directors; the Treasurer shall, if required by the Board of Directors, give such bond for the faithful discharge of his duties in such form as the Board of Directors may require.

*Section 10. Assistant Treasurers.* Each Assistant Treasurer (if any) shall have the usual powers and duties pertaining to his office, together with such other powers and duties as designated in accordance with these Bylaws and as may be prescribed from time to time by the Treasurer, the CEO or the Board of Directors. The Assistant Treasurers shall exercise the powers of the Treasurer during the Treasurer's absence or inability or refusal to act.

*Section 11. Secretary.* The Secretary shall keep the minutes of all meetings of the Board of Directors, committees of directors and of the stockholders in books provided for such purpose; he shall attend to the giving and serving of all notices; he may in the name of the Corporation affix the seal of the Corporation to all contracts of the Corporation and attest thereto; he may sign with the other appointed officers all certificates for shares of capital stock of the Corporation; he shall have charge of such other books and papers as the Board of Directors may direct, all of which shall at all reasonable times be open to inspection by any director upon application at the office of the Corporation during business hours; he shall have such other powers and duties as designated in accordance with these Bylaws and as may be prescribed from time to time by the Board of Directors; and he shall in general perform all acts incident to the office of Secretary, subject to the control of the CEO and the Board of Directors.

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*Section 12. Assistant Secretaries*. Each Assistant Secretary (if any) shall have the usual powers and duties pertaining to his office, together with such other powers and duties as designated in accordance with these Bylaws and as may be prescribed from time to time by the CEO, the Board of Directors or the Secretary. The Assistant Secretaries shall exercise the powers of the Secretary during the Secretary's absence or inability or refusal to act.

*Section 13. Action with Respect to Securities of Other Companies.* Unless otherwise determined by the Board of Directors, the CEO shall have the power to vote and to otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of security holders of any other corporation, or with respect to any action of security holders thereof, in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation.

ARTICLE VI

INDEMNIFICATION OF DIRECTORS

OFFICERS, EMPLOYEES AND AGENTS

*Section 1. Right to Indemnification.* Subject to the limitations and conditions as provided in this Article VI, each person who was or is made a party to or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (hereinafter a "proceeding"), or any appeal in such a proceeding or any inquiry or investigation that could lead to such a proceeding, by reason of the fact that he, or a person of whom he is the legal representative, is or was a director or officer of the Corporation, or while a director or officer of the Corporation is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, limited liability company, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise, shall be indemnified by the Corporation to the fullest extent permitted by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide greater indemnification rights than said law permitted the Corporation to provide prior to such amendment) against judgments, penalties (including excise and similar taxes and punitive damages), fines, settlements and reasonable expenses (including, without limitation, attorneys' fees) actually incurred by such person in connection with such proceeding, and indemnification under this Article VI shall continue as to a person who has ceased to serve in the capacity which initially entitled such person to indemnity hereunder. The rights granted pursuant to this Article VI shall be deemed contractual rights, and no amendment, modification or repeal of this Article VI shall have the effect of limiting or denying any such rights with respect to actions taken or proceedings arising prior to any such amendment, modification or repeal. It is expressly acknowledged that the indemnification conferred in this Article VI could involve indemnification for negligence of the indemnified party or under theories of strict liability.

*Section 2. Advance Payment.* The right to indemnification conferred in this Article VI shall include the right to be paid or reimbursed by the Corporation for the reasonable expenses incurred by a person of the type entitled to be indemnified under Article VI, Section 1 hereof who was, is or is threatened to be made a named defendant or respondent in a proceeding in advance of the final disposition of the proceeding and without any determination as to the person's ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such person in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of a written affirmation by such director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification under this Article VI and a written undertaking, by or on behalf of such person, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnified person is not entitled to be indemnified under this Article VI or otherwise.

*Section 3. Indemnification of Employees and Agents.* The Corporation, by adoption of a resolution of the Board of Directors, may indemnify and advance expenses to an employee or agent of the Corporation to the same extent and subject to the same conditions that it is required to indemnify and advance expenses to directors and officers under this Article VI; the Corporation may indemnify and advance expenses to persons who are not or were not directors,

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officers, employees or agents of the Corporation, but who are or were serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, limited liability company, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in such a capacity or arising out of his status as such a person to the same extent that it may indemnify and advance expenses to directors or officers under this Article VI.

*Section 4. Appearance as a Witness.* Notwithstanding any other provision of this Article VI, the Corporation may pay or reimburse expenses incurred by a director or officer in connection with his appearance as a witness or other participation in a proceeding at a time when he is not a named defendant or respondent in the proceeding.

*Section 5. Nonexclusivity of Rights.* The right to indemnification and advancement and payment of expenses conferred in this Article VI shall not be exclusive of any other right which a director or officer or other person indemnified pursuant to Article VI, Section 3 hereof, may have or hereafter acquire under any law, provision of the Certificate of Incorporation, these Bylaws, any agreement, vote of stockholders or disinterested directors otherwise.

*Section 6. Insurance.* The Corporation may purchase and maintain insurance, at its expense, to protect itself and any person who is or was serving as a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, limited liability company, partnership, joint venture, proprietorship, employee benefit plan, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under this Article VI.

*Section 7. Savings Clause.* If this Article VI or any portion hereof shall be invalidated on any grounds by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and hold harmless each director, officer or any other person required to be indemnified in accordance with this Article VI as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any proceeding, to the full extent permitted by any applicable and valid portion of this Article VI to the fullest extent permitted by applicable law.

ARTICLE VII

CAPITAL STOCK

*Section 1. Certificates of Stock.* The shares of the capital stock of the Corporation shall be represented by certificates, provided, however, that the Board of Directors may determine by resolution that some or all of any or all the classes or series of the Corporation's stock shall be uncertificated shares that may be evidenced by a book-entry system maintained by the registrar of such stock. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the name of the Corporation by any two authorized officers of the Corporation, including, without limitation, the Chairman of the Board (if any), the CEO, the President, any Vice President, the Treasurer, an Assistant Treasurer, the Secretary and an Assistant Secretary, representing the number of shares registered in certificate form. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

*Section 2. Transfer of Shares.* The shares of stock of the Corporation shall only be transferable on the books of the Corporation by the holders thereof in person or by their duly authorized attorneys or legal representatives, and, in the case of certificated shares, upon surrender and cancellation of certificates for a like number of shares (or upon compliance with the provisions of Article VII, Section 5, hereof, if applicable).

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*Section 3. Ownership of Shares.* The Corporation shall be entitled to treat the holder of record of any share or shares of capital stock of the Corporation as the owner in fact thereof at that time for purposes of voting such shares, receiving distributions thereon or notices in respect thereof, transferring such shares, exercising rights of dissent, exercising or waiving any preemptive rights, or giving proxies with respect to such shares; and, neither the Corporation nor any of its officers, directors, employees, or agents shall be liable for regarding that person as the owner of those shares at that time for those purposes, regardless of whether or not that person possesses a certificate for those shares.

*Section 4. Regulations Regarding Certificates.* The Board of Directors shall have the power and authority to make all such rules and regulations as it may deem expedient concerning the issue, transfer and registration or the replacement of certificates for shares of capital stock of the Corporation.

*Section 5. Lost, Stolen, Destroyed or Mutilated Certificates.* The Board of Directors may determine the conditions upon which a new certificate of stock or uncertificated shares may be issued in place of any certificate which is alleged to have been lost, stolen, destroyed or mutilated; and may, in its discretion, require the owner of such certificate or his legal representative to give bond, with sufficient surety, to indemnify the Corporation and each transfer agent and registrar against any and all losses or claims which may arise by reason of the issuance of a new certificate or uncertificated shares in the place of the one so lost, stolen, destroyed or mutilated.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

*Section 1. Fiscal Year.* The fiscal year of the Corporation shall be such as established from time to time by the Board of Directors.

*Section 2. Corporate Seal.* The Board of Directors may provide a suitable seal containing the name of the Corporation. The Secretary shall have charge of the seal (if any). If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by the Assistant Secretary or Assistant Treasurer, if any.

*Section 3. Notice and Waiver of Notice.* Whenever any notice is required to be given by law, the Certificate of Incorporation or these Bylaws, except with respect to notices of meetings of stockholders (with respect to which the provisions of Article II, Section 6 hereof apply) and except with respect to notices of special meetings of directors (with respect to which the provisions of Article III, Section 6 hereof apply) said notice shall be deemed to be sufficient if given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of a postage prepaid notice, in the United States mail addressed to the person entitled thereto at his address as it appears on the records of the Corporation. Such notice shall be deemed to have been given on the day of such transmission or mailing, as the case may be.

Whenever notice is required to be given by law, the Certificate of Incorporation or these Bylaws, a written waiver thereof, signed by the person entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person, including without limitation a director, at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of such meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or a committee of directors need be specified in any written waiver of notice, unless so required by the Certificate of Incorporation or these Bylaws.

*Section 4. Resignations.* Any director, member of a committee or officer may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt by the CEO or Secretary. The acceptance of such resignation shall not be necessary for its effectiveness, unless expressly so provided in the resignation.

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*Section 5. Facsimile, Email or Electronic Signatures.* In addition to the provisions for the use of facsimile, email or electronic signatures specifically authorized elsewhere in these Bylaws, facsimile, email or electronic signatures of any officer or officers of the Corporation may be used as determined by the Board of Directors in accordance with applicable law.

*Section 6. Reliance upon Books, Reports and Records.* A member of the Board of Directors, or a member of any committee thereof, shall be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors, or by any other person as to matters the director reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, as to the value and amount of the assets, liabilities and/or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid, or with which the Corporation's stock might properly be purchased or redeemed.

*Section 7. Forum Selection.* Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery (the "Chancery Court") of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or to the Corporation's stockholders, (c) any action arising pursuant to any provision of the Delaware General Corporate Law or the Certificate of Incorporation or these Bylaws (as either may be amended from time to time), or (d) any action asserting a claim against the Corporation governed by the internal affairs doctrine. If any action the subject matter of which is within the scope of the preceding sentence is filed in a court other than a court located within the State of Delaware (a "Foreign Action") in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the preceding sentence and (ii) having service of process made upon such stockholder in any such action by service upon such stockholder's counsel in the Foreign Action as agent for such stockholder.

*Section 8. Gender*. All personal pronouns used in these Bylaws shall include the other genders, whether used in the masculine, feminine or neuter gender, and the singular shall include the plural, and vice versa, whenever and as often as may be appropriate.

ARTICLE IX

AMENDMENTS

The original or other Bylaws of the Corporation may be adopted, amended or repealed by the incorporators, by the initial directors if they are named in the Certificate of Incorporation, or, before the Corporation has received any payment for any of its stock, by its Board of Directors. After the Corporation has received any payment for any of its stock, the power to adopt, amend or repeal Bylaws shall reside in the stockholders entitled to vote; provided, however, the Corporation may, in the Certificate of Incorporation, confer the power to adopt, amend or repeal Bylaws upon the directors. The fact that such power has been so conferred upon the directors, shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal Bylaws.

Approved:&nbsp;&nbsp;&nbsp;&nbsp;October 11, 2017

Amended:&nbsp;&nbsp;&nbsp;&nbsp;March 11, 2021

Amended: &nbsp;&nbsp;&nbsp;&nbsp;November 6, 2023

Amended:&nbsp;&nbsp;&nbsp;&nbsp;August 6, 2025

## Exhibit 31.1

**Exhibit 31.1** 

**CERTIFICATION PURSUANT TO**

**RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Ryan Ezell, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Flotek Industries, Inc. ("registrant");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| /s/&nbsp;&nbsp;&nbsp;&nbsp;RYAN EZELL |
| Ryan Ezell |
| Chief Executive Officer |

---

Date: August 8, 2025

## Exhibit 31.2

**Exhibit 31.2** 

**CERTIFICATION PURSUANT TO**

**RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Bond Clement, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Flotek Industries, Inc. ("registrant");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| /s/&nbsp;&nbsp;&nbsp;&nbsp;BOND CLEMENT |
| Bond Clement |
| Chief Financial Officer |

---

Date: August 8, 2025

## Exhibit 32.1

**Exhibit 32.1** 

**CERTIFICATION PURSUANT TO** 

**18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Quarterly Report of Flotek Industries, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/&nbsp;&nbsp;&nbsp;&nbsp;RYAN EZELL |
| Ryan Ezell |
| Chief Executive Officer |

---

Date: August 8, 2025

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO** 

**18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Quarterly Report of Flotek Industries, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ BOND CLEMENT |
| Bond Clement |
| Chief Financial Officer |

---

Date: August 8, 2025

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