ProFrac Holding Corp

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Annual Report”) contains certain “forward-looking statements” within the meaning 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 include those that express a belief, expectation or intention, as well as those that are not statements of historical fact. Forward-looking statements include information regarding our future plans and goals, as well as our expectations with respect to:

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our business strategy and future growth prospects;

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our industry;

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integration of acquired businesses;

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our future profitability, cash flows and liquidity;

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our financial strategy, budget, projections and operating results;

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the amount, nature and timing of our capital expenditures and the impact of such expenditures on our performance;

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the availability and terms of capital;

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our exploration, development and production activities;

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the market for our existing and future products and services;

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competition and government regulations; and,

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general economic conditions.

These forward-looking statements may be accompanied by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “will,” “should,” “could,” “would,” “likely,” “future,” “budget,” “pursue,” “target,” “seek,” “objective,” or similar expressions that are predictions of or indicate future events or trends that do not relate to historical matters.

The forward-looking statements in this Annual Report speak only as of the date of this Annual Report, or such other date as specified herein. We disclaim any obligation to update these statements unless required by law, and we caution you not to place undue reliance on them. Forward-looking statements are not assurances of future performance and involve risks and uncertainties. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties include, but are not limited to, the following:

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our ability to finance, consummate, integrate and realize the benefits expected from our past or future acquisitions, including any related synergies;

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uncertainty regarding the timing, pace and extent of economic growth in the United States and elsewhere, which in turn may affect demand for crude oil and natural gas and the demand for our services;

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the level of production of crude oil, natural gas and other hydrocarbons and the resultant market prices of crude oil, natural gas, natural gas liquids and other hydrocarbons;

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a further decline or future decline in domestic spending by the onshore oil and natural gas industry;

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actions by members of the Organization of Petroleum Exporting Countries, Russia and other oil-producing countries with respect to oil production levels and announcements of potential changes in such levels;

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the political environment in oil and natural gas producing regions, including uncertainty or instability resulting from civil disorder, terrorism or war, such as the ongoing war between Russia and Ukraine, the war between Israel and Hamas, and the global response to such hostilities which may negatively impact our operating results;

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changes in general economic and geopolitical conditions, including any impacts from inflation and tariffs;

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competitive conditions in our industry;

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changes in the long-term supply of and demand for oil and natural gas;

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technological advances affecting energy consumption;

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a decline in demand for proppant;

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our ability as well as the ability of our customers to obtain permits, approvals and authorizations from governmental and third parties, and the effects of or changes to U.S. government regulation;

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changes in the availability and cost of capital;

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inflationary factors, such as increases in the labor costs, material costs and overhead costs;

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the effects of consolidation on our customers or competitors;

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the price and availability of debt and equity financing including changes in interest rates;

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our ability to complete growth projects on time and on budget;

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introduction of new drilling or completion techniques, or services using new technologies subject to patent or other intellectual property protections;

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acts of terrorism, war or political or civil unrest in the United States or elsewhere;

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loss or corruption of our information or a cyberattack on our computer systems;

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the price and availability of alternative fuels and energy sources;

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risks relating to launching new businesses;

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federal, state and local regulation of hydraulic fracturing and other oilfield service activities, as well as exploration and production activities, including public pressure on governmental bodies and regulatory agencies to regulate the industry;

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the availability of water resources, suitable proppant and chemicals in sufficient quantities for use in hydraulic fracturing fluids;

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the effects of existing and future laws and governmental regulations (or the interpretation thereof) on us and our customers;

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the severity and duration of widespread health events and related economic repercussions on the oil and gas industry and on demand for oil and gas; and

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the effects of future litigation.

These and other important factors that could affect our operating results and performance are described in (i) Part I, Item 1A “Risk Factors” and in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report, and elsewhere within this Annual Report, (ii) our other reports and filings we make with the SEC from time to time, and (iii) other announcements we may make from time to time. Should one or more of the risks or uncertainties described in the documents above or in this Annual Report occur, or should underlying assumptions prove incorrect, our actual results, performance, achievements or plans could differ materially from those expressed or implied in any forward-looking statements. All such forward-looking statements in this Annual Report are expressly qualified in their entirety by the cautionary statements in this section.

Summary of Principal Risk Factors

Our business is subject to a number of risks and uncertainties. The following is a summary of the principal risk factors that could materially adversely affect our business, financial condition and results of operations. A more complete statement of those risks and uncertainties is set forth in “Risk Factors” in Item 1A of Part I of this Annual Report.

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Our business and financial performance depends on the level of capital spending by oil and gas companies operating within the areas we service.

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Our business depends upon our ability to obtain specialized equipment, parts and key raw materials from third-party suppliers, and we may be vulnerable to delayed deliveries and future price increases.

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Oil and natural gas companies’ operations using hydraulic fracturing are substantially dependent on the availability of water, as are our frac sand mining and processing operations. Restrictions on the ability to obtain water and the disposal of flowback and produced water may impact their and our operations and have a corresponding adverse effect on our business, results of operations and financial condition.

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Our operations are subject to unforeseen interruptions and hazards inherent in the oil and natural gas industry, for which we may not be adequately insured, and which could cause us to lose customers and substantial revenue.

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To achieve our growth and vertical integration objectives, our management relies on a rapid succession of strategic acquisitions, investments or procurement arrangements the pace and scope of which may have the potential to adversely affect the day-to-day operation of our business, and our cash flows, financial condition and results of operations.

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Our growth and vertical integration objectives require substantial capital that we may be unable to obtain, or may only obtain at a cost or under terms that adversely affect our cash flows, financial condition and results of operations.

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We may have difficulty managing growth in our business, which could adversely affect our financial condition and results of operations.

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We may experience difficulties in integrating acquired assets into our business and in realizing the expected benefits of an acquisition.

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Our indebtedness could adversely affect our financial flexibility and competitive position and make us more vulnerable to adverse economic conditions.

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Restrictions in our debt agreements and any future financing agreements may limit our ability to finance future operations, meet capital needs or capitalize on potential acquisitions and other business opportunities.

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An increase in interest rates would increase the cost of servicing our indebtedness and could reduce our profitability, decrease our liquidity and impact our solvency.

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We may not be able to generate sufficient cash flow to service all of our obligations, including our obligations under our credit and other financing facilities.

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Our operations and the operations of our customers are subject to environmental, health and safety laws and regulations, and future compliance, claims, and liabilities relating to such matters may have a material adverse effect on our results of operations, financial position or cash flows.

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Federal, state, and local legislative and regulatory initiatives relating to hydraulic fracturing, as well as governmental reviews and investment practices for such activities, may serve to limit future oil and natural gas E&P activities and could have a material adverse effect on our results of operations and business.

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The Issuer is a holding company and its only material asset is its equity interest in ProFrac LLC; accordingly the Issuer is entirely dependent upon distributions from ProFrac LLC to meet its obligations, including the payment of taxes and covering its corporate and other overhead expenses.

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Conflicts of interest could arise between us, on the one hand, and Dan Wilks and Farris Wilks and entities owned by or affiliated with them (collectively, the “Wilks Parties”), on the other hand, concerning among other things, business transactions, competitive business activities or business opportunities.

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The Wilks Parties have the ability to direct the voting of a majority of our voting stock, and their interests may conflict with those of our other stockholders.

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A significant reduction by the Wilks Parties of their ownership interests in ProFrac could adversely affect us.

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Our certificate of incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our Class A Common Stock and could deprive our investors of the opportunity to receive a premium for their shares.

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We do not presently anticipate paying cash dividends on our Class A Common Stock and our existing debt agreements, as well as the Series A Certificate of Designation, place restrictions on our ability to do so. Consequently, your only opportunity to achieve a return on your shares of Class A Common Stock is if the price of our Class A Common Stock appreciates.

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The price of our Class A Common Stock may decline as a result of the large number of shares available for sale.

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ProFrac Holding Corp. is required to make payments under the Tax Receivable Agreement for certain tax benefits that it may claim, and the amounts of such payments could be significant.

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In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the Tax Receivable Agreement.

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In the event that payment obligations under the Tax Receivable Agreement are accelerated in connection with certain mergers, other forms of business combinations or other changes of control, the consideration payable to holders of our Class A Common Stock could be substantially reduced.

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We may issue preferred stock whose terms could adversely affect the voting power or value of our Class A Common Stock.

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We are a “controlled company” within the meaning of the Nasdaq rules and, as a result, qualify for and intend to rely on exemptions from certain corporate governance requirements.