ProFrac Holding Corp.

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

ProFrac Holding Corp. ("ProFrac Corp.") and its consolidated subsidiaries, including ProFrac Holdings, LLC (“ProFrac LLC”), is a vertically integrated and innovation-driven energy services holding company providing hydraulic fracturing, proppant production, other completion services and other complementary products and services to leading upstream oil and natural gas companies engaged in the exploration and production (“E&P”) of North American unconventional oil and natural gas resources.

ProFrac Corp. operates in three business segments: Stimulation Services, Proppant Production and Manufacturing. Our Stimulation Services segment owns and operates a fleet of mobile hydraulic fracturing units and other auxiliary equipment that generates revenue by providing stimulation services to our customers. Our Proppant Production segment provides proppant to oilfield service providers and E&P companies. Our Manufacturing segment sells highly engineered, tight tolerance machined, assembled, and factory tested products such as high horsepower pumps, valves, piping, swivels, large-bore manifold systems, and fluid ends.

Mr. Dan Wilks and Mr. Farris Wilks are brothers and are the founders and principal stockholders of the Company. Their sons, Mr. Matthew D. Wilks and Mr. Johnathan Ladd Wilks are the Company’s Executive Chairman and Chief Executive Officer, respectively. In the normal course of business, we enter into transactions with related parties where Mr. Dan Wilks and Mr. Farris Wilks and entities owned by or affiliated with them (collectively, the "Wilks Parties") hold a controlling financial interest. Under Nasdaq rules and the Company’s Related Party Transactions Policy, our Audit Committee is responsible for reviewing all related party transactions. Under the policy, potential related party transactions are subject to approval by the Audit Committee in advance or, in certain circumstances, ratification by the Audit Committee, in each case if such transactions satisfy the terms and conditions set forth in the policy. See "Note 14. Related Party Transactions" for further information.

Basis of Presentation

The unaudited condensed consolidated financial statements presented herein include the accounts of ProFrac Corp. and those of its subsidiaries that are wholly owned, controlled by it or a variable interest entity ("VIE") where it is the primary beneficiary. Unless the context requires otherwise, the use of the terms "Company," "we," "us," "our" or "ours" in these notes to the unaudited condensed consolidated financial statements refer to ProFrac Corp., together with its consolidated subsidiaries.

These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial reporting. Accordingly, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. We believe that the presentations and disclosures herein are adequate to make the information not misleading. The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) for a fair statement of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in Item 8 "Financial Statements and Supplementary Data" of our Annual Report.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Concentration of Risk and Liquidity Update

Our business activities are concentrated in the well completion services segment of the oilfield services industry in the United States. The market for these services is cyclical, and we depend on the willingness of our customers to make operating and capital expenditures to explore for, develop, and produce oil and natural gas in the United States. The willingness of our customers to undertake these activities depends largely upon prevailing industry conditions that are predominantly influenced by current and expected prices for oil and natural gas. Historically, a low commodity-price environment has caused our customers to significantly reduce their hydraulic fracturing activities and the prices they are willing to pay for those services. During such periods, these customer actions materially adversely affected our business, financial condition and results of operations.

Beginning in April 2025, many of our customers began reducing their activity levels as a result of a depressed commodity price environment, and our results of operations and operating cash flows correspondingly began to decline. The third quarter results reflected continued challenging market conditions, with improvement mid-period giving way to an unexpected decline in conditions toward quarter-end. To ensure that we have sufficient near-term liquidity during a prolonged depressed commodity environment, we have executed the following initiatives to optimize the cost structure of the business with a focus on operational efficiency:

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increased liquidity by issuance of common stock in August 2025, which generated net proceeds of $79.0 million;

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increased liquidity by selling an intercompany note receivable from Flotek Industries, Inc. ("Flotek") in November 2025 to PC Energy Credit I LLC, an affiliate of the Wilks Parties and a related party to the Company, generating net proceeds of approximately $40.0 million, which amounted to the entire principal amount of the note, plus accrued and unpaid interest;

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obtained lender commitments to purchase an additional $40.0 million of 2029 Senior Notes, at the Company's option, in December 2025;

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pursuing capital in the form of incremental debt targeting up to $40.0 million;

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reduced our direct and indirect labor costs;

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reduced our selling, general and administrative expenses by reducing headcount and eliminating certain non-labor related costs; and

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identified areas to enhance operating efficiencies, to reduce operating expenses, and to reduce capital expenditures.

Additionally, the Company also is actively pursuing other sources of capital in the form of non-collateralized asset sales.

If these actions are successful, we believe our cost structure and liquidity will be better positioned for the long term and we believe that our sources of liquidity and our cash provided by operations will be sufficient to fund our capital expenditures, satisfy our obligations, and remain in compliance with our existing debt covenants for at least the next 12 months. However, there is no assurance that we can complete all of these actions or that these actions, if completed, will result in the cost savings or liquidity enhancements that we expect. If that is the case, then we will need to identify additional liquidity enhancements, which may include selling assets or seeking additional sources of capital. There can be no assurance that any such additional liquidity enhancements will be available, or if available, that they will be on terms acceptable to us or our stakeholders.

Correction of an Immaterial Error on Previously Issued Financial Statements

During the third quarter of 2025, the Company identified and corrected an error in our accounting for certain transaction costs capitalized as property, plant and equipment at Flotek for the three and six months ended June 30, 2025. At June 30, 2025, this error understated other operating expenses by $3.7 million and overstated property, plant and equipment by the same amount.

We evaluated whether our previously issued unaudited condensed consolidated financial statements for June 30, 2025, were materially misstated due to these errors. Based upon our evaluation of both quantitative and qualitative factors, we concluded that the effects of these errors were not material individually or in the aggregate to these previously reported periods. Accordingly, we will report the corrected amounts for June 30, 2025, when presented in future financial statements.

Recently Adopted Accounting Standards

The Company has adopted FASB ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, effective retrospectively for the fiscal year ended December 31, 2024, and interim reporting period starting the first quarter of 2025. This ASU enhances the disclosures required for operating segments in the Company's annual and interim consolidated financial statements. As a result of this adoption, the Company's segment disclosure now includes significant expense categories. The Company's primary segment measure remains unchanged. See “Note 13. Business Segments” for the enhanced disclosures associated with the adoption of this ASU.

Recently Issued Standards Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. This ASU provides for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. This ASU is effective for the Company prospectively to all annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard on our disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which enhances the disclosures for certain expense captions in the Company's annual and interim consolidated financial statements. This ASU is effective prospectively or retrospectively for fiscal years beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on our disclosures.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments --Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient for calculating current expected credit losses on accounts receivable and current contract assets. This ASU permits a reporting entity to assume that current conditions as of the balance sheet date remain unchanged over the remaining life of the assets. The ASU is effective for the Company for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company plans to elect the practical expedient provided by the ASU and does not expect it to have a material impact on its financial statements.

2. SUPPLEMENTAL BALANCE SHEET INFORMATION

Inventories

Inventories are comprised of the following:

Accrued Expenses

Accrued expenses are comprised of the following:

Other Current Liabilities

Other current liabilities are comprised of the following:

3. BUSINESS COMBINATIONS AND DISPOSITIONS

2025 Disposition

In June 2025, we disposed of our EKU Power Drives subsidiary in our Manufacturing Segment. We recorded a loss of $10.5 million in connection with this disposal, which was classified as other income and expense, net on our consolidated statements of operations. Total assets decreased approximately $40 million and total liabilities decreased approximately $29 million on our condensed consolidated balance sheet as a result of this disposal. This disposal will not have a major effect on our future operations and financial results.

2024 Acquisitions

In April 2024, we acquired all of the remaining equity interests of Basin Production and Completion LLC (“BPC”). BPC is the parent company of FHE USA LLC, which manufactures equipment used in the hydraulic fracturing industry. The total purchase consideration was $39.8 million, consisting of cash consideration of $14.9 million and our pre-existing equity investment of $24.9 million. BPC is included in our Manufacturing reportable segment.

In June 2024, we acquired 100% of the issued and outstanding capital stock of Advanced Stimulation Technologies, Inc. (“AST”), a pressure pumping services provider serving the Permian Basin, for total purchase consideration of $174.0 million in cash. AST is included in our Stimulation Services reportable segment.

In June 2024, we acquired 100% of the issued and outstanding common stock of NRG Manufacturing, Inc., which manufactures equipment used in the hydraulic fracturing industry, and its affiliate, AMI US Holdings, Inc., which develops commercial software used in hydraulic fracturing industry (collectively “NRG”), for total purchase consideration of $6.0 million in cash. NRG is included in our Manufacturing reportable segment.

The following table reflects pro forma revenues and net income or loss for the three and nine months ended September 30, 2024 as if our 2024 acquisitions had taken place on January 1, 2024. These unaudited pro forma amounts are not necessarily indicative of results that would have actually been obtained during the periods presented or that may be obtained in the future.

4. DEBT

Debt is comprised of the following:

(1)

Related party debt agreements.

Senior Secured Notes Due 2029

On June 30, 2025, ProFrac Holdings II, LLC, a Texas limited liability company and an indirect wholly-owned subsidiary of ProFrac Holding Corp., entered into a purchase agreement with Beal Bank USA and Wilks Brothers, LLC, which is a Wilks Party, pursuant to which ProFrac Holdings II, LLC has agreed to issue and sell $60.0 million aggregate principal amount of its Senior Secured Floating Rate Notes due 2029 in a private placement. An aggregate of $20.0 million of new notes was purchased by Wilks Brothers, LLC on June 30, 2025. ProFrac Holdings II, LLC obtained two commitments to purchase an additional $40.0 million aggregate principal amount of new notes, at the Company's option, in the second half of 2025. The first commitment was for $20.0 million aggregate principal amount of new notes to be purchased by Wilks Brothers, LLC and Beal Bank, USA on September 30, 2025, and the second commitment is for $20.0 million aggregate principal amount of new notes to be purchased by Beal Bank, USA on December 15, 2025. ProFrac Holdings II, LLC had the option to defer the September 30, 2025 issuance to December 15, 2025 and has the option to cancel such additional issuances. ProFrac Holdings II, LLC exercised its option to defer the September 30, 2025 issuance to December 15, 2025. Such additional issuances are subject to certain customary closing conditions, including the requirement that we deliver a certificate to the 2029 Senior Notes Purchasers that we are solvent (meaning that the fair market value of our assets exceeds our total liabilities and that we can pay our total liabilities, including contingent liabilities, as they mature).

These new notes were, and will be, issued as additional notes pursuant to the original indenture, dated as of December 27, 2023, as supplemented. These new notes and the notes previously issued under the indenture will be treated as a single series of securities under the indenture and the new notes will have substantially identical terms, other than the issue date, issue price and first payment date, as the existing notes and be secured by a security interest in the same collateral. If we issue 2029 Senior Notes in December 2025, we will use the net proceeds therefrom to fund capital expenditures with any remaining proceeds used for general corporate purposes.

Alpine 2023 Term Loan

On June 26, 2025, we amended the Alpine 2023 Term Loan. Under the terms of the amendment, the amortization payments required to be made on June 30, 2025, September 30, 2025 and December 31, 2025 were reduced from $15.0 million to $5.0 million and we will pay an exit fee of $3.4 million when the term loan is repaid. Additionally, the Alpine 2023 Term Loan contained a covenant commencing with the fiscal quarter ending March 31, 2026, requiring Alpine not to exceed a maximum Total Net Leverage Ratio (as defined in the Alpine Term Loan Credit Agreement) of 2.00 to 1.00. This ratio is generally the consolidated total debt of Alpine divided by an adjusted EBITDA calculation. This covenant was amended to commence testing compliance with the Total Net Leverage Ratio with the fiscal quarter ending on March 31, 2027.

2022 ABL Credit Facility

As of September 30, 2025, the maximum availability under the ABL Credit Facility was limited to our eligible borrowing base of $217.8 million with $160.2 million of borrowings outstanding and $16.5 million of letters of credit outstanding, resulting in approximately $41.1 million of remaining availability.

Debt Compliance

Both the 2029 Senior Notes and the ABL Credit Facility contain certain customary representations and warranties and affirmative and negative covenants. As of September 30, 2025, we were in compliance with these covenants and expect to be compliant for at least the next twelve months after taking the actions described in “Note 1. Organization and Description of Business” under the heading “Concentration of Risk and Liquidity Update.”

The Alpine 2023 Term Loan contains a covenant commencing with the fiscal quarter ending March 31, 2027, requiring Alpine not to exceed a maximum Total Net Leverage Ratio (as defined in the Alpine Term Loan Credit Agreement) of 2.00 to 1.00. This ratio is generally the consolidated total debt of Alpine divided by Alpine's adjusted EBITDA. Alpine is closely monitoring its forthcoming compliance obligations with this covenant. While there can be no assurance, Alpine believes that it will be able to meet, modify, or further defer this debt covenant.

Restricted Assets

Our Alpine 2023 Term Loan requires us to segregate collateral associated with Alpine and limits our ability to use Alpine's cash or assets to satisfy our obligations or the obligations of our other subsidiaries. We also have limited ability to provide Alpine with liquidity to satisfy its obligations. See “Note 13. Business Segments” for certain financial information for Alpine, which comprises our Proppant Production segment.

5. EQUITY

Class A Common Stock

In August 2025, we issued 20.6 million shares of Class A common stock, par value $0.01 per share at an offering price of $4.00 per share. The issuance of these shares generated net proceeds of $79.0 million, after deducting underwriter discounts and commissions and offering costs. The Wilks Parties bought 5.0 million shares of these Class A common stock, generating $20.0 million of gross proceeds. We intend to use the net proceeds from this offering to repay borrowings outstanding under our 2022 ABL Credit Facility, to pursue potential investment opportunities and for working capital and other general corporate purposes.

6. REVENUE FROM CONTRACTS WITH CUSTOMERS

We believe that disaggregating our revenue by reportable segment in "Note 13. Business Segments" provides the information necessary to understand the nature, amount, timing and uncertainty of our revenues and cash flows.

Contract Balances with Customers

Our contract assets are classified as accounts receivable in our unaudited condensed consolidated balance sheets. Accounts receivable consist of invoiced amounts or amounts for which we have a right to invoice based on services completed or products delivered.

Our current and non-current contract liabilities are classified as other current liabilities and other liabilities, respectively, in our unaudited condensed consolidated balance sheets. Our contract liabilities consist of deferred revenues from advance consideration received from customers related to future performance of service or delivery of products and off-market contract liabilities from unfavorable contracts recognized in connection with our business acquisitions in the Proppant Production segment.

In the accounting for prior business combinations, we recorded off-market contract liabilities. During the three and nine months ended September 30, 2025 we recorded amortization ofzero and $7.6 million, respectively, related to these contract liabilities as revenue compared with $11.7 million and $39.1 million in the respective periods last year. As of September 30, 2025, our off-market contract liabilities were zero.

Performance Obligations

Certain of our Proppant Production contracts contain multiple performance obligations to provide a minimum quantity of proppant products to our customers in future periods. For these contracts, the transaction price is allocated to each performance obligation at estimated selling prices and we recognize revenue as we satisfy these performance obligations. As of September 30, 2025, the aggregate amount of transaction price allocated to unsatisfied performance obligations was $15.0 million, and we expect to perform these obligations and recognize revenue of $11.3 million in 2026 and $3.7 million in 2027.

We have elected the practical expedient permitting the exclusion of disclosing the value of unsatisfied performance obligations for Stimulation Services and Manufacturing contracts as these contracts have original contract terms of one year or less or we have the right to invoice for services performed.

7. OTHER OPERATING EXPENSE, NET

Other operating expense, net is comprised of the following:

Litigation expenses and accruals for legal contingencies generally represent legal and professional fees incurred in litigation as well as estimates for loss contingencies with regards to certain vendor disputes and litigation matters. In the periods presented, substantially all of these costs represent litigation costs incurred in connection with certain patent infringement lawsuits.

Provision for credit losses primarily related to a revised estimate of the payments to be received from an insolvent customer.

The transaction costs for the three and nine months ended September 30, 2025 represent legal and professional fees incurred for strategic initiatives.

Severance charges relate to the departure of certain highly-compensated employees.

(Gain) loss on disposal of assets, net consists of gains and losses on the sale of excess property, early equipment disposals and other asset dispositions.

Supply commitment charges for the three and nine months ended September 30, 2024, represent charges related to contractual inventory purchase commitments to certain proppant suppliers.

8. INCOME TAXES

We record income taxes for interim periods based on an estimated annual effective tax rate. The estimated annual effective rate is recomputed on a quarterly basis and may fluctuate due to changes in forecasted annual operating income, positive or negative changes to the valuation allowance for net deferred tax assets and changes to actual or forecasted permanent book to tax differences. Our effective tax rate for the nine months ended September 30, 2025 was 6.7%, compared with 19.0% in the same period in 2024.

For the nine months ended September 30, 2025, our income tax provision included a discrete benefit of approximately $12 million from a reduction in Flotek's valuation allowance. Excluding this discrete item, the difference between our effective tax rate and the federal statutory rate related to a permanent book-tax difference in the accounting for a sale-leaseback transaction with Flotek and changes in the valuation allowance on our net deferred tax assets.

For the nine months ended September 30, 2024, our income tax provision included a discrete benefit of $25.6 million related to the release of a portion of the valuation allowance on our net deferred tax assets. This discrete item was caused by the assumption of a $25.6 million deferred tax liability in our acquisition of AST, which made it more likely than not that we would be able to utilize a corresponding amount of our deferred tax assets. Excluding this discrete item, the difference between our effective tax rate and the federal statutory rate related to changes in the valuation allowance on our net deferred tax assets.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA contains, among other provisions, certain changes to U.S. federal income tax laws related to 100% bonus depreciation and the calculation of interest expense deductions, which will reduce our taxable income in 2025 and future years. The accounting for changes in tax rates and tax law are required to be recognized in the period in which the legislation is enacted. The effects of this tax law change have been incorporated into these unaudited condensed consolidated financial statements.

Flotek has historically maintained a valuation allowance on substantially all of its deferred tax assets. At each reporting date, Flotek considers all available positive and negative evidence to evaluate whether its deferred tax assets are more likely than not to be realized. A significant piece of positive evidence that Flotek considers is whether it has incurred cumulative income (generally defined as income before income taxes) in recent years. Flotek noted that for the three years ended September 30, 2025, it recorded cumulative income before income taxes of approximately $30 million. As a result of this positive evidence, Flotek concluded that a valuation allowance was no longer required for a portion of its deferred tax assets at September 30, 2025, because it is more likely than not that the deferred tax assets will be realized.

Because Flotek is not part of our consolidated group for income tax purposes, we present Flotek's net deferred tax assets separate from the Company's net deferred tax liabilities.

9. EARNINGS PER SHARE

The calculation of earnings per share ("EPS") for our Class A common stock is as follows:

The dilutive potential of employee restricted stock units is calculated using the treasury stock method. The dilutive potential of our Series A redeemable convertible preferred stock, par value $0.01 per share (the "Preferred Stock"), is calculated using the if-converted method.

10. COMMITMENTS AND CONTINGENCIES

Purchase Commitments

As of September 30, 2025, we had purchase commitments of $30.9 million in 2025 for hydraulic fracturing equipment components.

Litigation

In the ordinary course of business, we are the subject of, or party to a number of pending or threatened legal actions and administrative proceedings. While many of these matters involve inherent uncertainty, we believe that the amount of the liability, if any, ultimately incurred with respect to proceedings or claims will not have a material adverse effect on our consolidated financial position as a whole or on our liquidity, capital resources or future annual results of operations.

We estimate and provide for potential losses that may arise out of legal proceedings and claims to the extent that such losses are probable and can be reasonably estimated. Significant judgment is required in making these estimates and our final liabilities may ultimately be materially different from these estimates. When preparing our estimates, we consider, among other factors, the progress of each legal proceeding and claim, our experience and the experience of others in similar legal proceedings and claims, and the opinions and views of legal counsel. Legal costs related to litigation contingencies are expensed as incurred.

11. VARIABLE INTEREST ENTITY

Through a contractual relationship, we have the power to appoint directors to the board of directors of Flotek Industries, Inc. ("Flotek"). Because we have this power through a contract and not through our direct equity interest in Flotek, Flotek meets the definition of a variable interest entity ("VIE"). Furthermore, we are the primary beneficiary of the VIE due to our ability to appoint four of seven directors to Flotek’s board of directors. Accordingly, we have consolidated the operating results, assets and liabilities of Flotek. As of September 30, 2025, we owned 50.2% of Flotek's outstanding common stock.

As of September 30, 2025 and December 31, 2024, $111.9 million and $60.9 million, respectively, of Flotek's assets and $54.4 million and $56.2 million, respectively, of Flotek's liabilities are included in our unaudited condensed consolidated balance sheets. These amounts are exclusive of goodwill and are after intercompany eliminations. The assets of Flotek can only be used to settle its obligations and the creditors of Flotek have no recourse to our assets. Our exposure to Flotek is generally limited to the carrying value of our equity, intercompany notes receivable, and variable interest.

12. FAIR VALUE MEASUREMENTS

Recurring Measurements

Our liabilities measured at fair value on a recurring basis consist of the following:

The fair value of the Munger make-whole provision was estimated using a Black-Scholes model as of December 31, 2024. The significant unobservable inputs used in the fair value measurement are the risk-free rate and volatility.

The following is a reconciliation of our recurring Level 3 fair value measurements:

Financial Instruments

The estimated fair values of our financial instruments have been determined at discrete points in time based on relevant market information. Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, certain investments, accounts payable, accrued expenses and long-term debt.

The carrying amounts of our financial instruments other than long-term debt approximate fair value because of the short-term nature of the items. The carrying amounts of our floating rate debt approximate fair value due to their variable interest rates. The fair value of our fixed rate debt, classified as Level 2 in the fair value hierarchy, also approximated its carrying value.

13. BUSINESS SEGMENTS

The Company's segments are determined as those operations whose results are reviewed regularly by the chief operating decision maker ("CODM"), who is our Executive Chairman, in deciding how to allocate resources and assess performance. Our CODM manages our business segments primarily by the type of product or services provided. We have three reportable segments which we operate within the United States of America: Stimulation Services, Proppant Production and Manufacturing. Amounts in the other category reflect our business activities that are not separately reportable, which primarily includes Flotek for the periods presented. Other business activities also include Livewire Power, LLC (“Livewire”), which we launched in the fourth quarter of 2024. Livewire enables onsite power generation services for oilfield and non-oilfield customers that require off-grid power solutions.

The CODM assesses the performance of the segments based on segment adjusted EBITDA, which is defined as our net income (loss) before (i) interest expense, net, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) (loss) gain on disposal of assets, net, (v) stock-based compensation, and (vi) other charges, such as certain credit losses, gain (loss) on extinguishment of debt, gain (loss) on investments, acquisition and integration expenses, litigation expenses and accruals for legal contingencies, acquisition earnout adjustments, severance charges, goodwill impairments, gains on insurance recoveries, transaction costs, third-party supply commitment charges, lease termination costs and impairments of long-lived assets.

We account for intersegment transactions as if the transactions were with third parties, that is, at estimated current market prices.

Summarized financial information for our reportable segments is as follows:

(1)

Our Proppant Production segment recognized noncash revenue associated with acquired contract liabilities ofzero and $8.9 million for the three months ended September 30, 2025 and 2024, respectively, and $7.6 million and $36.1 million for the nine months ended September 30, 2025 and 2024 respectively. Refer to Item 8 "Financial Statements and Supplementary Data" in our Annual Report for information about our acquired contract liabilities.

(2)

In our other business activities, Flotek recorded revenue of $8.7 million and $6.7 million for the three months ended September 30, 2025 and 2024, respectively, and $23.9 million and 23.8 million for the nine months ended September 30, 2025 and 2024, respectively, related to contract shortfalls because the Stimulation Services segment did not purchase the minimum contractual commitment of chemistry products from Flotek.

(3)

Adjusted EBITDA for the Stimulation Services segment included an intercompany supply commitment charge of$8.7 million and $6.7 million for the three months ended September 30, 2025 and 2024, respectively, and $23.9 million and $23.8 million for the nine months ended September 30, 2025 and 2024, respectively, because this segment did not purchase the minimum contractual commitment of chemistry products from Flotek.

(4)

In April 2025, Flotek acquired certain gas conditioning equipment from our Stimulation Services segment for total consideration of $107.5 million and our Stimulation Services segment leased these assets back from Flotek for asix year term. The effects of this sale-leaseback transaction have been eliminated from our condensed consolidated financial statements. The assets have been recorded by Flotek, and reflected in our other business activities, at the previous carrying values recorded by our Stimulation Services segment due to this transaction being conducted by entities under common control.

The following table reconciles consolidated Adjusted EBITDA for our reportable segments to net income (loss):

(1)

Stock-based compensation is reported in “Selling, general and administrative” in the consolidated statements of operations and is not allocated to the segments.

14. RELATED PARTY TRANSACTIONS

In the normal course of business, we have entered into transactions with related parties where the Wilks Parties hold a controlling financial interest. For the three and nine months ended September 30, 2025 and 2024, the Company had related party transactions with the following related party entities:

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Logistix IQ, LLC (“Logistix IQ”, formally Automatize, LLC) is a logistics broker that facilitates the last-mile delivery of proppants on behalf of its customers, including the Company. Amounts paid to Logistix IQ include costs passed through to third-party trucking companies and a commission retained by Logistix IQ. These payments are recorded in cost of revenues, exclusive of depreciation and depletion in our unaudited condensed consolidated statements of operations.

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Equify Financial, LLC (“Equify Financial”) is a finance company that provides equipment and other financing to its customers, including the Company. Amounts paid to Equify Financial are recorded in cost of revenue, interest expense in our unaudited condensed consolidated statements of operations and repayments of long-term debt in our unaudited condensed consolidated statements of cash flows.

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Wilks Brothers, LLC (“Wilks Brothers”) is a management company which provides administrative support to various businesses within its portfolio. Wilks Brothers and certain entities under its control will at times incur expenses on our behalf, billing us for these expenses at cost as well as certain management fees. Amounts paid to Wilks Brothers are generally recorded in selling, general and administrative expenses in our unaudited condensed consolidated statements of operations.

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Interstate Explorations, LLC (“Interstate”) is an exploration and development company for which we perform pressure pumping services.

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Flying A Pump Services, LLC (“Flying A”), along with its subsidiary MGB Manufacturing, LLC, is an oilfield services company which provides pressure pumping, acid and cementing services. We rent and sell equipment and frac fleet components, and at times sell proppant, to Flying A. We also pay Flying A to rent, repair, or sell equipment or frac fleet components.

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MC Estates, LLC, The Shops at Willow Park, FTSI Industrial, LLC, and 420 Shops Blvd, LLC (collectively, the “Related Lessors”) own various industrial parks and office space leased by us. Amounts paid to the Related Lessors are recorded in selling, general and administrative expenses in our unaudited condensed consolidated statements of operations.

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Wilks Construction Company, LLC (“Wilks Construction”) is a construction company that has built and made renovations to several buildings for us. Amounts paid to Wilks Construction are recorded as capital expenditures in our unaudited condensed consolidated statements of cash flows.

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Wilks Earthworks, LLC ("Wilks Earthworks") is an oilfield services company that provides mining, wet and dry loading, hauling and other services and equipment to its customers, including us. These payments are recorded in cost of revenues, exclusive of depreciation and depletion, in our unaudited condensed consolidated statements of operations.

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Carbo Ceramics Inc. (“Carbo”) is a provider of ceramic proppant which will at times purchase conventional proppant from us to act as a broker for its customers. Additionally, we will at times purchase manufactured proppant from Carbo for the Stimulation Services segment.

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Cisco Aero, LLC ("AERO") is a private aviation company. Amounts paid to AERO are recorded as selling, general and administrative expenses in our unaudited condensed consolidated statements of operations.

The following table summarizes revenue from related parties:

The following table summarizes expenditures with related parties:

The following table summarizes accounts receivable–related party:

The following table summarizes accounts payable–related party:

In June 2023 and January 2024, we arranged to sell certain surplus equipment and inventory components and to assign certain pre-orders for equipment to Flying A, at prices which are consistent with fair market value, for a total consideration of $36.3 million and $8.4 million, respectively. We delivered $2.3 million, $12.6 million and $28.9 million of these components to Flying A in 2025, 2024 and 2023, respectively. We expect to deliver the remaining $0.9 million of product to Flying A in 2025. We accounted for the unapplied proceeds from these transactions as related party deposits presented as "Other current liabilities - related party" in our unaudited condensed consolidated balance sheets.

In addition to the arrangement relating to surplus equipment and inventory components described above, in September 2025, we sold certain nonessential assets originally acquired from AST to Flying A in exchange for cash consideration of $3.4 million. The cash consideration received was $0.9 million greater than the carrying value of these assets. Because this sale was to an affiliate under common control, we accounted for the $0.9 million as an equity transaction recorded as a deemed contribution within our consolidated statements of changes in equity.

In September 2025, we entered into four lease agreements with Flying A to rent pressure pumping equipment at a monthly rental rate of $75,000 per lease. The leases have respective initial terms ending November 1, 2025, November 30, 2025, December 31, 2025, and December 31, 2025, and continue on a month-to-month basis until terminated by us.

15. SUBSEQUENT EVENTS

On November 7, 2025, the Company completed the assignment to PC Energy Credit I LLC (“PC Energy”), an affiliate of the Wilks Parties and a related party to the Company, of that certain Senior Secured Note issued to ProFrac GDM by Flotek in April 2025. Consideration paid by PC Energy to the Company in exchange for the note consisted of the entire $40 million principal amount of the note, plus accrued and unpaid interest.