FTK

MKT CAP $918.2MP/E 26.1DIV YIELD —FCF YIELD —REV TTM $293M +36.8%NET INCOME $38M +169.3%NET DEBT $35.6M52W 13.47 – 38.82SEC XBRL · TTM TO Invalid Date

How FTK rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Item 1A.-Risk Factors” in this Annual Report for more information.
We intend to continue maintaining a valuation allowance on a substantial portion of our deferred tax assets until there is sufficient evidence to support a reversal of such allowances.
Reserve for Excess and Obsolete Inventory Inventories consist of raw materials and finished goods and are stated at the lower of cost or market determined using the weighted-average cost method, or net realizable value.
Finished goods inventories include raw materials, direct labor and production overhead.
The Company reviews inventories on hand and current market conditions to determine if the cost of raw materials and finished goods inventories exceed current market prices and impairs the cost basis of the inventory accordingly.
Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its net realizable value if those amounts are determined to be less than cost.
Write-downs or write-offs of inventory are charged to cost of sales.
At December 31, 2025 and 2024, the reserve for excess and obsolete inventory was $3.9 million and $5.2 million, or 26.9% and 28.2% of inventory, respectively.
Significant or unanticipated changes to our estimates and forecasts could impact the amount and timing of any additional provisions for excess and obsolete inventory.
Recent Accounting Pronouncements Recent accounting pronouncements which may impact the Company are described in Note 2, “Summary of Significant Accounting Policies - Recent Accounting Pronouncements,” in Part II, Item 8 — “Financial Statements” of this Annual Report.
Quantitative and Qualitative Disclosures About Market Risk The Company is exposed to a variety of market risks, which primarily includes market risk from changes in interest rates, raw material prices, freight costs and foreign currency exchange rates.
Market risk is measured as the potential negative impact on earnings, cash flows or fair values resulting from a hypothetical change in interest rates, commodity prices, freight or foreign currency exchange rates over the next year.
The Company manages exposure to market risks at the corporate level.
The portfolio of interest-sensitive assets and liabilities is monitored and adjusted to provide liquidity necessary to satisfy anticipated short-term needs.
The Company’s risk management policies allow the use of specified financial instruments for hedging purposes only.
Speculation on interest rates or foreign currency rates is not permitted.
The Company does not consider any of these risk management activities to be material.
Foreign Currency Exchange Risk The Company’s functional currency is primarily the U.S. dollar.
The Company operates principally in the United States and has limited exposure to foreign currency risk in its international operations.
During 2025, approximately 4.8% of revenue was denominated in non-U.S. dollar currencies and substantially all assets and liabilities of the Company are denominated in U.S. dollars.
However, as the Company expands its international operations, non-U.S. denominated activity is likely to increase.
A 10% devaluation in average foreign currency exchange rates for the U.S. dollar would have resulted in a $1.1 million decrease to our revenues for the year ended December 31, 2025.
The Company has not historically used swaps or foreign currency hedges, however, the Company may utilize swaps or foreign currency hedges in the future.
Commodity and Freight Risk The Company, and the CT segment in particular, primarily relies upon supply relationships to meet many of its raw material needs.
Commodity and freight price increases are passed along to the Company’s customers, where applicable or possible.
The Company presently does not utilize commodity derivative instruments but may consider utilizing forms of hedging to mitigate the effects of rising commodity prices on its supplies, in the future.
Interest Rate Risk The PWRtek Note is subject to a fixed interest rate and is therefore not exposed to fluctuations in interest rates.
The Company is subject to interest rate risk under its ABL, which bears 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 8.75% and 9.5% as of December 31, 2025 and 2024, respectively.
For the years ended December 31, 2025 and 2024, the weighted-average interest rate was 9.3 % and 10.8 %, respectively.
During the years ended December 31, 2025 and 2024, the Company incurred $1.0 million and $0.7 million in interest and fees related to the ABL, respectively.
Based upon ABL borrowings outstanding as of December 31, 2025 of $3.3 million, a 100 basis point change in interest rates would have resulted in an approximate $0.1 million change to our annual interest expense.
Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors Flotek Industries, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Flotek Industries, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flow for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 16, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

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Gone since FY2024

Risk Factors The Company’s business, financial condition, results of operations, cash flows, liquidity and prospects are subject to various risks and uncertainties.
Readers of this Annual Report should not consider any descriptions of these risk factors to be a complete set of all potential risks that could affect the Company.
These factors should be carefully considered together with the other information contained in this Annual Report and the other reports and materials filed by the Company with the SEC.
Further, many of these risks are interrelated and, as a result, the occurrence of certain risks could trigger and/or exacerbate other risks.
Such a combination could materially increase the severity of the impact of these risks on the Company’s business, results of operations, financial condition, cash flows, liquidity or prospects.
This Annual Report contains “forward-looking statements,” as defined in Section 27A of the Securities Act and Section 21E of the Exchange Act that involve risks and uncertainties.
Forward-looking statements discuss Company prospects, expected revenue, expenses and profits, strategic and operational initiatives, and other activities.
Forward-looking statements also contain suppositions regarding future oil and natural gas industry and other conditions, both domestically and internationally.
The Company’s results could differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including risks described below and elsewhere.
See “Forward-Looking Statements” at the beginning of this Annual Report.
Risks Related to the Company’s Business The Company’s business is largely dependent upon its customers’ spending in the oil and gas industry.
Spending could be adversely affected by industry conditions; new or increased governmental regulations; changes to existing governmental regulations; global economic conditions; the availability of credit; and oil and natural gas prices.
Demand for and prices of the Company’s products are subject to a variety of factors, including, but not limited to: • global demand for energy as a result of population growth, economic development, and general economic and business conditions; • political and economic uncertainty, and sociopolitical unrest including the current military conflicts in Ukraine and Middle East and ongoing sanctions imposed on Russia; • the ability of the Organization of Petroleum Exporting Countries (“OPEC”) to influence production levels and the impact of non-OPEC producers on global supply; • availability and quantity of natural gas storage; • import and export volumes and pricing of liquefied natural gas; • domestic and international refining activity; • rising demand for electricity in the U.S. and technological improvements to competing sources of power generation, including wind, solar and hydrogen; • pipeline capacity to critical markets and out of producing regions; • cost of exploration, production and transport of oil and natural gas; • sustained market adoption of green chemistry solutions; • technological advances impacting energy production and consumption; • new or increased governmental regulation or changes to existing governmental regulations; • expectations for inflation and the resulting impact on interest rates; • the imposition of tariffs or trade sanctions; • weather conditions; and • foreign exchange rates.
Volatile commodity prices could adversely impact the activity levels of the Company’s customers.
Demand for the Company’s goods and services may be adversely impacted if volatile economic conditions weaken customer expenditures.
It is difficult to predict the pace of industry growth, the direction of oil and natural gas prices, the direction and magnitude of economic activity, the demand for chemistry and data analytics products, and to what extent these conditions could affect the Company.
However, reduced cash flow and capital availability could adversely impact the financial condition of the Company’s customers, which could result in customer project modifications, delays or cancellations, general business disruptions, and delay in, or nonpayment of, amounts that are owed to the Company.
This could cause a negative impact on the Company’s results of operations and cash flows.
The Company’s reliance on the ProFrac Agreement could adversely impact our financial condition, results of operations and cash flows.
The ProFrac Agreement is a major source of the Company’s liquidity and we expect it to remain so over the term of the contract.
Revenues attributable to the ProFrac Agreement represented 62% and 65% of our total revenues during 2024 and 2023, respectively.
If the Company became unable to execute the requirements of the agreement financially and operationally, from procuring inventory to meet the needs of ProFrac Services, LLC under the ProFrac Agreement to executing timely billing and collection, the Company’s liquidity could be adversely impacted.
Further, our relationship with ProFrac Services, LLC may impact their competitors’ willingness to purchase products from the Company or to seek price concessions from the Company.
We are also dependent on ProFrac Services, LLC’s compliance in meeting their committed activity levels and paying for our products, including any Contract Shortfall Fees, on a timely basis, in accordance with the terms of the ProFrac Agreement.
Our financial condition, results of operations and cash flows may be adversely impacted if ProFrac Services, LLC’s financial condition or its spending level under the ProFrac Agreement is negatively impacted and it is unable to pay its outstanding obligations to the Company, including those payments related to Contract Shortfall Fees.
As of December 31, 2024, amounts due to the Company from ProFrac Services, LLC totaled $52.4 million, including $32.4 million related to 2024 Contract Shortfall Fees.
ProFrac Services, LLC has the right to terminate the ProFrac Agreement by providing written notice to the Company after the occurrence of any of the following events: (i) the Company’s bankruptcy; (ii) the Company’s failure to produce and deliver the products in accordance with the specifications, or failure to timely deliver products, and the Company has been unable to cure such failure within a commercially reasonable period determined by ProFrac Services, LLC; (iii) the Company fails to meet pricing requirements set forth in the ProFrac Agreement; or (iv) the Company is affected by a force majeure event, and such force majeure event has not been remedied within 30 days of the initial occurrence of such event.
ProFrac Services, LLC also has the right to terminate the ProFrac Agreement for any other material breach of the ProFrac Agreement by the Company if the breach is capable of being cured, but is not cured within 30 days after written notice.
Termination of the ProFrac Agreement would have a material adverse impact on the Company’s financial condition, results of operations and cash flows.
In addition, ProFrac Services, LLC has customary rights to audit our compliance with the terms of the ProFrac Agreement.
Any adverse findings during such an audit could have an adverse impact on the Company’s financial condition, results of operations and cash flows.
The Company’s inability to develop and/or introduce new products or differentiate existing products could have an adverse effect on its ability to be responsive to customers’ needs and could result in a loss of customers, as well as adversely affecting the Company’s future success and profitability.
The industries in which the Company does business are characterized by technological advancements that have historically resulted in, and will likely continue to result in, substantial improvements in the scope and quality of specialty chemistries and data analytical services.
Consequently, the Company’s future success is dependent, in part, upon the Company’s continued ability to timely develop innovative products and services.
Successful introduction of new technology requires time and resources, and there is no assurance that the Company will be able to commercialize new technology in a timely manner.
If the Company fails to successfully develop and introduce innovative products and services at price points that appeal to customers, or if existing or new market competitors develop superior products and services, the Company’s revenue and profitability could deteriorate.
The Company’s business, financial condition, operating results and ability to grow and compete may be affected adversely if adequate capital is not available.
While we believe that our cash, liquid assets, and availability under the ABL will provide us with sufficient financial resources to fund operations to meet our capital requirements and anticipated obligations as they become due, uncertainty surrounding the long-term stability and strength of 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.
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.
The Company may need additional financing sources, including commercial borrowings and issuances of debt and/or equity securities.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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