As discussed in Note 1 “Business description”, the Merger of Frank’s with Legacy Expro pursuant to the Merger Agreement was completed on October 1, 2021. U.S. GAAP requires the determination of the accounting acquirer, the acquisition date, the fair value of assets and liabilities of the acquired business and the resulting measurement of goodwill. The Merger is accounted for as a reverse merger and Legacy Expro has been identified as the acquirer for accounting purposes. As a result, the Company has in accordance with ASC 805, Business Combinations, applied the acquisition method of accounting to account for Frank’s assets acquired and liabilities assumed. Applying the acquisition method of accounting includes recording the identifiable assets acquired and liabilities assumed at their fair values and recording goodwill for the excess of the consideration transferred over the net aggregate fair value of the identifiable assets acquired and liabilities assumed.

The Merger consideration was based on Frank’s closing share price on the Closing Date. In a reverse merger involving only the exchange of equity, the fair value of the equity of the accounting acquiree may be used to measure consideration transferred if the value of the accounting acquiree’s equity interests are more reliably measurable than the value of the accounting acquirer’s equity interest. As Legacy Expro was a private company and Frank’s was a public company with a quoted and reliable market price, the fair value of Frank’s equity interests was deemed to be more reliable. Under the acquisition method of accounting, total consideration exchanged was as follows:

The following table sets forth the preliminary allocation of the merger consideration exchanged to the fair value of identifiable tangible and intangible assets acquired and liabilities assumed as of the Closing Date, with the recording of goodwill for the excess of the consideration transferred over the net aggregate fair value of the identifiable assets acquired and liabilities assumed (in thousands):

Due to the recency and complexity of the Merger, these amounts are preliminary and subject to change as our fair value assessments are finalized. The final fair value determination could result in material adjustments to the values presented in the preliminary purchase price allocation table above. The fair values of identifiable intangible assets were prepared using an income valuation approach, which requires a forecast of expected future cash flows either through the use of the relief-from-royalty method or the multi-period excess earnings method, which are discounted to approximate their current ~~information~~value. The estimated useful lives are based on management’s historical experience and expectations as ~~well~~to the duration of time that benefits from these assets are expected to be realized.

The intangible assets will be amortized on a straight-line basis over an estimated 10 to 15 year life. We expect annual amortization to be approximately $7.7 million associated with these intangible assets.

Goodwill will not be amortized but rather subject to an annual impairment test, absent any indicators of impairment. Goodwill is attributable to planned synergies expected to be achieved from the combined operations of Legacy Expro and Frank’s. Goodwill recorded in the Merger is not expected to be deductible for tax purposes.

The following unaudited pro forma consolidated results of operations for the three months ended March 31, 2021 assume the Merger was completed as ~~reasonable and supportable forecasts. We adopted the guidance on~~ of January 1, 2020 (in thousands):

Estimated unaudited pro forma information is not necessarily indicative of the results that actually would have occurred had the Merger been completed on the date indicated or of future operating results.

During the ~~adoption did not have~~three months ended March 31, 2022 and 2021, the Company incurred $4.7 million and $4.8 million, respectively, of merger and integration expense which consist primarily of legal fees, professional fees, integration, severance and other costs directly attributable to the Merger.

Below is a ~~material impact~~reconciliation of our liability balance associated with our severance plan initiated during 2021 related to the integration in connection with the Merger, which is included in “Other current liabilities” on our consolidated financial statements. The new credit loss standard is expected to accelerate recognition of credit losses on our accounts receivable. See Note 3—Accounts Receivable, net for additional information regarding allowance for credit losses on our accounts receivable.

~~Because FINV is a holding company with no operations of its own, its ability to make payments under the TRA is dependent on the ability of our operating subsidiaries to make distributions to it~~consideration from customers in an amount ~~sufficient~~that corresponds directly with the value to ~~cover FINV’s obligations under such agreement. The ability of certain of our operating subsidiaries to make such distributions will be subject to, among other things,~~ the applicable provisions of Dutch law that may limit the amount of funds available for distribution and restrictions in our debt instruments. To the extent that FINV is unable to make payments under the TRA for any reason (except in the case of an acceleration of payments thereunder occurring in connection with an early terminationcustomer of the ~~TRA or certain mergers or change~~performance completed to date.

Table of ~~control) such payments will be deferred and will accrue interest until paid, and FINV will be prohibited from paying dividends on its common stock.~~Contents

~~In connection with the Merger Agreement, FINV, FICV and Mosing~~

Expro Group Holdings entered into the A&R TRA, pursuant to which FINV, FICV and Mosing Holdings have agreed, among other things, to settle the early termination payment obligation that would otherwise be owed to Mosing Holdings under the TRA as a result of the Merger by the payment by FINV to Mosing Holdings of (i) $15 million cash at the closing of the Transactions and (ii) certain other contingent payments in the future in the event the Combined Company realizes cash tax savings from tax attributes covered under the TRA during the ten year period following the Closing Date (as defined in the Merger Agreement) in excess of $18,057,000, as more fully described in the A&R TRA. The terms of the A&R TRA are conditioned upon and subject to the closing of the Transactions and the payment to Mosing Holdings of the $15 million cash payment at the closing of the Transactions. If such conditions do not occur, the A&R TRA will be terminated and will be null and void, and the TRA will remain in effect in accordance with its terms. Please see Note 1—Basis of Presentation in the N.V.

Notes to ~~the~~ Unaudited Condensed Consolidated Financial Statements ~~for additional details regarding the Merger, the Merger Agreement and the Transactions.~~

~~Note 12—Loss Per Common Share~~

~~Basic loss per common share is determined by~~ ~~dividing~~ ~~net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is determined by~~ ~~dividing~~ ~~net loss by the weighted average number of common shares outstanding, assuming all potentially dilutive shares were issued. We apply the~~

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~treasury stock method to determine the dilutive weighted average common shares represented by unvested restricted stock units and employee stock purchase plan (“ESPP”) shares.~~

~~The following table summarizes the basic and diluted loss per share calculations (in thousands, except per share amounts):~~

Three Months Ended
March 31,
2021 2020
Numerator
Net loss $ (23,886) $ (85,978)
Denominator
Basic and diluted weighted average common shares (1)
227,019 225,505
Loss per common share:
Basic and diluted $ (0.11) $ (0.38)

(1) Approximate number of unvested restricted stock units and stock to be issued pursuant to the ESPP that have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive when results from operations are at a net loss position. 2,252 2,015

~~Note 13—Income Taxes~~

7.	Income taxes

For interim financial reporting, we estimate the annual tax rate based on projected pre-tax income (loss) before equity in income of joint ventures for the full year and record a quarterly income tax ~~provision~~expense (benefit) in accordance with accounting guidance for income taxes. As the year progresses, we refine the estimate of the year’s pre-tax income (loss) before equity in income of joint ventures as new information becomes available. The continual estimation process often results in a change to the expected effective tax rate for the year. When this occurs, we adjust the income tax ~~provision~~expense (benefit) during the quarter in which the change in estimate occurs so that the year-to-date ~~provision~~expense reflects the most current expected annual tax rate.

Our effective tax rates were (42.2)% and (11.6)% for the three months ended March 31, 2022 and 2021, respectively.

Our effective tax rate was ~~(4.7)%~~impacted primarily by changes in the mix of taxable profits between jurisdictions.

8.	Investment in joint ventures

We have investments in two joint venture companies, which together provide us access to certain Asian markets that otherwise would be challenging for us to penetrate or develop effectively on our own. COSL-Expro Testing Services (Tianjin) Co. Ltd (“CETS”), in which we have a 50% equity interest, has extensive offshore well testing and ~~15.3%~~completions capabilities and a reputation for providing technology-driven solutions in China. Similarly, PV Drilling Expro International Co. Ltd. (“PVD-Expro”) in which we have a 49% equity interest, offers the ~~three months ended~~ full suite of Expro products and services, including well testing and completions, in Vietnam. Both of these are strategic to our activities and offer the full capabilities and technology of Expro, but each company is independently managed.

The carrying value of our investment in joint ventures as of March 31, 2022 and December 31, 2021 was as follows (in thousands):

	*March 31,*		*December 31,*
	*2022*		*2021*
CETS	$	58,258	$	54,014
PVD-Expro		3,548		3,590
Total	$	61,806	$	57,604

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Expro Group Holdings N.V.

Notes to Unaudited Condensed Consolidated Financial Statements

9.	Accounts receivable, net

Accounts receivable, net consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):

	*March 31,*			*December 31,*
	*2022*			*2021*
Accounts receivable	$	339,323		$	340,209
Less: Expected credit losses		(9,612	)		(9,392	)
Total	$	329,711		$	330,817

Current		318,500			319,286
Non – current		11,211			11,531
Total	$	329,711		$	330,817

10.

Inventories

Inventories consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):

	*March 31,*		*December 31,*
	*2022*		*2021*
Finished goods	$	33,122	$	34,899
Raw materials, equipment spares and consumables		84,268		76,025
Work-in-progress		16,267		14,192
Total	$	133,657	$	125,116

11.

Other assets and liabilities

Other assets consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):

	*March 31,*		*December 31,*
	*2022*		*2021*
Cash surrender value of life insurance policies	$	11,210	$	18,857
Prepayments		24,000		19,891
Value-added tax receivables		21,916		22,524
Collateral deposits		1,660		1,599
Deposits		6,763		7,331
Other		8,576		9,197
Total	$	74,125	$	79,399

Current		55,871		52,938
Non – current		18,254		26,461
Total	$	74,125	$	79,399

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Notes to Unaudited Condensed Consolidated Financial Statements

Other liabilities consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):

	*March 31,*		*December 31,*
	*2022*		*2021*
Deferred revenue	$	11,330	$	17,038
Other tax and social security		25,638		27,893
Income tax liabilities - non-current portion		47,493		45,741
Deferred compensation plan		8,457		9,339
Other		49,604		49,739
Total	$	142,522	$	149,750

Current		63,358		74,213
Non – current		79,164		75,537
Total	$	142,522	$	149,750

Cash Surrender Value of Life Insurance Policies

We had $11.2 million and $18.9 million of cash surrender value of life insurance policies as of March 31, 2022 and December 31, 2021, respectively, that are held within a trust established to settle payment of future executive deferred compensation benefit obligations. The decrease in the cash surrender value of life insurance policies as of March 31, 2022 as compared to December 31, 2021 ~~and 2020, respectively. The quarterly variance in effective tax rates is~~was primarily due to a cash distribution from the ~~beneficial~~trust to reimburse the Company for benefits paid pursuant to the executive deferred compensation benefit plan, the impact of which is included in “Proceeds from sale of investments” on the condensed consolidated statements of cash flows. Loss associated with these policies is included in “Other income, net” on our condensed consolidated statements of operations. Loss on changes in the ~~prior year period from~~cash surrender value of life insurance policies was $0.5 million for three months ended March 31, 2022.

12.

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consisted of the ~~five-year~~following as of March 31, 2022 and December 31, 2021 (in thousands):

	*March 31,*		*December 31,*
	*2022*		*2021*
Accounts payable – trade	$	90,760	$	84,952
Payroll, vacation and other employee benefits		30,629		42,671
Accruals for goods received not invoiced		14,940		18,666
Other accrued liabilities		65,695		66,863
Total	$	202,024	$	213,152

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Expro Group Holdings N.V.

Notes to Unaudited Condensed Consolidated Financial Statements

13.

Property, plant and equipment, net

Property, plant and equipment, net ~~operating loss carryback provision~~consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):

	*March 31,*			*December 31,*
	*2022*			*2021*
Cost:
Land	$	21,860		$	21,580
Land improvements		3,056			3,054
Buildings and lease hold improvements		102,980			104,660
Plant and equipment		714,072			701,400
		841,968			830,694
Less: accumulated depreciation		(377,486	)		(352,114	)
Total	$	464,482		$	478,580

During the three months ended March 31, 2022, a building classified as assets held for sale was sold for net proceeds of $6.1 million.

The carrying amount of our property, plant and equipment recognized in respect of assets held under finance leases as of March 31, 2022 and December 31, 2021 and included in amounts above is as follows (in thousands):

	*March 31,*			*December 31,*
	*2022*			*2021*
Cost:
Buildings	$	18,623		$	18,623
Plant and equipment		1,275			1,275
Total		19,898			19,898
Less: accumulated amortization		(8,074	)		(7,733	)
Total	$	11,824		$	12,165

Depreciation expense relating to property, plant and equipment, including assets under finance leases, was $26.0 million and $21.4 million for the ~~Coronavirus Aid, Relief,~~ three months ended March 31, 2022 and ~~Economic Security Act~~2021, respectively.

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Expro Group Holdings N.V.

Notes to Unaudited Condensed Consolidated Financial Statements

14.

Intangible assets, net

The following table summarizes our intangible assets comprising of Customer Relationships & Contracts (“CR&C”), Trademarks, Technology and Software as of March 31, 2022 and December 31, 2021 (in thousands):

	March 31, 2022							December 31, 2021							March 31, 2022
	Gross carrying amount		Accumulated impairment and amortization			Net book value		Gross carrying amount		Accumulated impairment and amortization			Net book value		Weighted average remaining life (years)
CR&C	$	222,200	$	(103,259	)	$	118,941	$	222,200	$	(98,271	)	$	123,929		6.1
Trademarks		57,100		(30,275	)		26,825		57,100		(29,392	)		27,708		8.2
Technology		170,652		(63,162	)		107,490		159,458		(60,979	)		98,479		12.3
Software		8,754		(6,986	)		1,768		8,754		(5,817	)		2,937		0.5
Total	$	458,706	$	(203,682	)	$	255,024	$	447,512	$	(194,459	)	$	253,053

Amortization expense for intangible assets was $9.0 million and $6.4 million for the three months ended March 31, 2022 and 2021, respectively. During the first quarter of 2022, we acquired technology to bolster our well intervention and integrity product offering, resulting in an increase in intangible assets of $11.2 million which will be amortized over a five-year life. The impact of this asset acquisition is included in “Acquisition of technology” on the condensed consolidated statements of cash flows.

15.

Goodwill

Our reporting units are either our operating segments or components of our operating segments depending on the level at which segment management oversees the business. Prior to the Merger, Legacy Expro's reporting units included Europe and the Commonwealth of Independent States, Sub-Saharan Africa, MENA, Asia, North America and Latin America. During 2021, due to the Merger we changed our internal organization and reporting structure and as a result, our operating segments, NLA, ESSA, MENA and APAC, are also our reporting units.

The allocation of goodwill by operating segment as of March 31, 2022 and December 31, 2021 is as follows (in thousands):

NLA	$	93,608
ESSA		66,283
MENA		3,331
APAC		16,681
Total	$	179,903

As of March 31, 2022, we did not identify any triggering events that would represent an indicator of impairment of our goodwill. Accordingly, 0 impairment charges related to goodwill have been recorded during the three months ended March 31, 2022.

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Expro Group Holdings N.V.

Notes to Unaudited Condensed Consolidated Financial Statements

16.

Interest bearing loans

On October 1, 2021, in connection with the closing of the Merger, we entered into a new revolving credit facility (the ~~“CARES Act”~~“New Facility”) with DNB Bank ASA, London Branch, as agent (the “Agent”), with total commitments of $200.0 million, of which $130.0 million is available for drawdowns as loans and $70.0 million is available for letters of credit. Subject to the terms of the New Facility, the Company has the ability to increase the commitments to $250.0 million. Proceeds of the New Facility may be used for general corporate and working capital purposes.

All obligations under the New Facility are guaranteed jointly and severally by the Company and certain of the Company’s subsidiaries incorporated in the U.S., the U.K., the Netherlands, Norway, Hungary, Australia, Cyprus, the Cayman Islands and Guernsey. Going forward, the guarantors must comprise at least 80% of the EBITDA, as defined, and 70% of the consolidated assets of the Company and its subsidiaries, as well as subsidiaries individually representing 5% or more of the EBITDA or assets of the group, subject to customary exceptions and exclusions. In addition, the obligations under the New Facility are secured by first priority liens on certain assets of the borrowers and guarantors, including pledges of equity interests in certain of the Company’s subsidiaries, including all of the borrowers and subsidiary guarantors, material operating bank accounts, intercompany loans receivable and, in jurisdictions where customary, including the U.S., the U.K., Australia and the Cayman Islands, substantially all of the assets and property of the borrowers and guarantors incorporated in such jurisdictions, in each case subject to customary exceptions and exclusions.

Borrowings under the New Facility bear interest at a ~~change~~rate per annum of LIBOR, subject to a 0.00% floor, plus an applicable margin of 3.75% for cash borrowings or 3.00% for letters of credit. A 0.75% per annum fronting fee applies to letters of credit, and an additional 0.25% or 0.50% per annum utilization fee is payable on drawdowns as loans to the extent one-third or two-thirds, respectively, or more of commitments are drawn. The unused portion of the New Facility is subject to a commitment fee of 30% per annum of the applicable margin. Interest on loans is payable at the end of the selected interest period, but no less frequently than semiannually.

The New Facility contains various undertakings and affirmative and negative covenants which limit, subject to certain customary exceptions and thresholds, the Company and its subsidiaries’ ability to, among other things, (1) enter into asset sales; (2) incur additional indebtedness; (3) make investments, acquisitions, or loans and create or incur liens; (4) pay certain dividends or make other distributions; and (5) engage in transactions with affiliates. The New Facility also requires the Company to maintain (i) a minimum cash flow cover ratio of 1.5 to 1.0 based on the ratio of cash flow to debt service; (ii) a minimum interest cover ratio of 4.0 to 1.0 based on the ratio of EBITDA to net finance charges; and (iii) a maximum senior leverage ratio of 2.25 to 1.0 based on the ratio of total net debt to EBITDA, in each case tested quarterly on a last-twelve-months basis, subject to certain exceptions. In addition, the aggregate capital expenditure of the Company and its subsidiaries cannot exceed 110% of the forecasted amount in the ~~geographical mix of income. We are~~relevant annual budget, subject to ~~tax~~certain exceptions. If the Company fails to perform its obligations under the agreement that results in ~~many U.S.~~an event of default, the commitments under the New Facility could be terminated and ~~non-U.S. jurisdictions. In many non-U.S. jurisdictions~~any outstanding borrowings under the New Facility may be declared immediately due and payable. The New Facility also contains cross-default provisions that apply to the Company and its subsidiaries’ other indebtedness.

On March 31, 2022, the Agent, on behalf of the consenting lenders, countersigned a Consent Request Letter dated March 10, 2022 to the New Facility (the “Consent”). Pursuant to the Consent, the lenders consented to, among other things, an amendment to the New Facility permitting dividends or distributions by the Company, or the repurchase or redemption of the Company’s shares in an aggregate amount of $50.0 million over the life of the New Facility, subject to pro forma compliance with the 2.25 to 1.0 maximum senior leverage ratio financial covenant.

The Facility remained undrawn on a cash basis (i.e. 0 loans were outstanding), as of March 31, 2022 and December 31, 2021. We utilized $40.2 million and $33.4 million as of March 31, 2022 and December 31, 2021, respectively, for bonds and guarantees.

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Expro Group Holdings N.V.

Notes to Unaudited Condensed Consolidated Financial Statements

17.

Commitments and Contingencies

Commercial Commitments

During the normal course of business, we ~~are taxed on bases such as deemed profits or withholding taxes based on revenue. Consequently,~~enter into commercial commitments in the ~~level~~form of ~~correlation between our pre-tax income~~letters of credit and ~~our income tax provision varies from period~~bank guarantees to ~~period.~~

�� provide financial and performance assurance to third parties.

We ~~are under audit by certain non-U.S. jurisdictions~~entered into contractual commitments for the ~~years 2008 - 2019. We do not expect the results~~acquisition of ~~these audits to have any material effect on our financial statements.~~

Asproperty, plant and equipment totaling $41.4 million and $26.3 million as of March 31, 2022 and December 31, 2021, ~~there were no significant changes~~respectively.

Contingencies

Certain conditions may exist as of the date our unaudited condensed consolidated financial statements are issued that may result in a loss to us, but which will only be resolved when one or more future events occur or fail to occur. Our management, with input from legal counsel, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings pending against us or unasserted claims that may result in proceedings, our ~~uncertain tax positions~~management, with input from legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as ~~reported~~well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates it is probable a material loss has been incurred and the amount of liability can be reasonably estimated, then the estimated liability would be accrued in our ~~audited~~unaudited condensed consolidated financial ~~statements for~~statements. If the ~~year ended December 31, 2020.~~

~~Note 14—Commitments~~assessment indicates a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and ~~Contingencies~~

material, is disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

We are the subject of lawsuits and claims arising in the ordinary course of business from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. We had no0 material accruals for loss contingencies, individually or in the aggregate, as of March 31, ~~2021~~2022 and December 31, ~~2020.~~ 2021. We believe the probability is remote that the ultimate outcome of these matters would have a material adverse effect on our financial position, results of operations or cash flows.

We are conducting an internal investigation of the operations of certain of our foreign subsidiaries in West Africa including possible violations of the U.S. Foreign Corrupt Practices Act (“FCPA”), our policies and other

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

applicable laws. In June 2016, we voluntarily disclosed the existence of our extensive internal review to the SEC, the U.S. Department of Justice (“DOJ”) and other governmental entities. It is our intent to continue to fully cooperate with these agencies and any other applicable authorities in connection with any further investigation that may be conducted in connection with this matter. While our review has not indicated that there has been any material impact on our previously filed financial statements, we have continued to collect information and cooperate with the authorities, but at this time are unable to predict the ultimate resolution of these matters with these ~~agencies.~~

agencies (including any financial impact on us, which could be material).

As disclosed above, our investigation into possible violations of the FCPA remains ongoing, and we will continue to cooperate with the SEC, DOJ and other relevant governmental entities in connection therewith. ~~At this time, we are unable to predict the ultimate resolution~~Our board of ~~these matters with these agencies, including any financial impact to us. Our Board~~directors and management are committed to continuously enhancing our internal controls that support improved compliance and transparency throughout our global operations.

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Expro Group Holdings N.V.

Notes to Unaudited Condensed Consolidated Financial Statements

~~Note 15—Severance~~

18.

Post-retirement benefits

Amounts recognized in the unaudited condensed consolidated statements of operations in respect of the defined benefit schemes were as follows (in thousands):

	*Three Months Ended March 31,*
	*2022*			*2021*

Amortization of prior service credit	$	61		$	61
Interest cost		(1,054	)		(837	)
Expected return on plan assets		1,428			1,181
Total	$	435		$	405

The Company contributed $1.3 million and ~~Other Charges, net~~

~~We recognize severance~~$0.9 million for the three months ended March 31, 2022 and 2021, respectively, to defined benefit schemes.

Amortization of prior service credit, interest cost and expected return on plan assets have been recognized in “Other income, net” in the unaudited condensed consolidated statements of operations.

Executive Deferred Compensation Plan

The Company maintains the Executive Deferred Compensation Plan (the “EDC Plan”) for certain current and former Frank’s employees. Effective during 2015, this plan was closed to new entrants. The purpose of the EDC Plan was to provide participants with an opportunity to defer receipt of a portion of their salary, bonus, and other ~~charges~~specified cash compensation. Participant contributions were immediately vested. Company contributions vested after five years of service. Participant benefits under the EDC Plan are paid from the general funds of the Company or a grantor trust, commonly referred to as a Rabbi Trust, created for ~~costs~~the purpose of informally funding the EDC Plan. The assets of the EDC Plan’s trust are invested in corporate-owned, split-dollar life insurance policies and mutual funds.

As of March 31, 2022, the total liability related to the EDC Plan was $8.5 million and was included in “Other non-current liabilities” on the unaudited condensed consolidated balance sheet. As of March 31, 2022, the cash surrender value of life insurance policies that are held within a Rabbi Trust for the purpose of paying future executive deferred compensation benefit obligations was $11.2 million.

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Expro Group Holdings N.V.

Notes to Unaudited Condensed Consolidated Financial Statements

19.

Loss per share

Basic loss per share attributable to Company stockholders is calculated by dividing net loss attributable to the Company by the weighted-average number of common shares outstanding for the period. Diluted loss per share attributable to Company stockholders is computed giving effect to all potential dilutive common stock, unless there is a net loss for the period. We apply the treasury stock method to determine the dilutive weighted average common shares represented by unvested restricted stock units and Employee Stock Purchase Program (“ESPP”) shares.

The calculation of basic and diluted loss per share attributable to Company stockholders for the three months ended March 31, 2022 and 2021, respectively, are as follows (in thousands, except shares outstanding and per share amounts):

	*Three Months Ended March 31,*
	*2022*			*2021*
Net loss	$	(11,132	)	$	(20,392	)
Basic and diluted weighted average number of shares outstanding		109,266,988			70,889,753
Total basic and diluted loss per share	$	(0.10	)	$	(0.29	)

Approximately 673,809 shares of unvested restricted stock units and stock to be issued pursuant to the ESPP have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive for the three months ended March 31, 2022.

Additionally, since the conditions upon which shares were issuable for our outstanding warrants and stock options were not satisfied as of March 31, 2021, assuming the balance sheet date is the end of the contingency period. Accordingly, they have not been included in determining the number of anti-dilutive shares.

20.

Related party disclosures

Our related parties consist primarily of CETS and PVD-Expro, the two companies in which we exert significant influence, and Mosing Holdings LLC, a company that is owned by D. Keith Mosing, a member of our board of directors, and affiliates. During the three months ended March 31, 2022 and 2021, we provided goods and services to CETS and PVD-Expro totaling $0.9 million and $2.7 million, respectively. Additionally, we entered into various operating lease agreements to lease facilities with affiliated companies. Rent expense associated with ~~workforce reductions, facility closures, exiting or reducing~~ our ~~footprint~~related party leases was $0.2 million for the three months ended March 31, 2022.

As of March 31, 2022 and December 31, 2021 amounts receivable from the related parties were $1.1 million and $1.6 million, respectively, and amounts payable to related parties were $1.9 million and $2.1 million as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022, $1.2 million of our operating lease right-of-use assets and $1.2 million of our lease liabilities were associated with related party leases. As of December 31, 2021, $1.3 million of our operating lease right-of-use assets and $1.3 million of our lease liabilities were associated with related party leases.

Tax Receivable Agreement

Mosing Holdings, LLC, a Delaware limited liability company (“Mosing Holdings”), converted all of its shares of Frank’s Series A convertible preferred stock into shares of Frank’s common stock on August 26, 2016, in connection with its delivery to Frank’s of all of its interests in Frank’s International C.V. (“FICV”) (the “Conversion”).

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Expro Group Holdings N.V.

Notes to Unaudited Condensed Consolidated Financial Statements

The tax receivable agreement (the “Original TRA”) that Frank’s entered into with FICV and Mosing Holdings in connection with Frank’s initial public offering (“IPO”) generally provided for the payment by Frank’s to Mosing Holdings of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Frank’s actually realized (or were deemed to be realized in certain ~~countries, asset impairments~~circumstances) in periods after the IPO as a result of (i) tax basis increases resulting from the Conversion and (ii) imputed interest deemed to be paid by Frank’s as a result of, and additional tax basis arising from, payments under the ~~retirement~~Original TRA. Frank’s retained the benefit of ~~excess machinery~~the remaining 15% of these cash savings, if any.

In connection with the Merger Agreement, Frank’s, FICV and ~~equipment based~~Mosing Holdings entered into the Amended and Restated Tax Receivable Agreement, dated as of March 10, 2021 (the “A&R TRA”). Pursuant to the A&R TRA, on ~~economic utility. As~~October 1, 2021, the Company made a payment of $15 million to settle the early termination payment obligations that would otherwise have been owed to Mosing Holdings under the Original TRA as a result of the ~~downturn~~Merger. As the payment was a condition precedent to effect the Merger, it was included in the determination of Merger consideration exchanged. Refer to Note 3 “Business combinations and dispositions” for more details. The A&R TRA also provides for other contingent payments to be made by the Company to Mosing Holdings in the future in the event the Company realizes cash tax savings from tax attributes covered under the Original TRA during the ten year period following October 1, 2021 in excess of $18.1 million.

21.

Stock-based compensation

The Company recognized $2.7 million of stock-based compensation expense attributable to the Management Incentive Plan ("MIP") stock options during the three months ended March 31, 2022. NaN stock-based compensation expense attributable to the MIP stock options was recognized during the three months ended March 31, 2021 as the performance conditions within the stock option agreements were deemed to be improbable. Stock-based compensation expense relating to the Long-Term Incentive Plan ("LTIP"), including restricted stock units ("RSUs") and performance restricted stock units ("PRSUs") for the three months ended March 31, 2022 was $3.1 million. NaN stock-based compensation expense relating to LTIP RSUs and PRSUs was recognized during the three months ended March 31, 2021.

During the first quarter of 2022, 743,665 RSUs were granted to employees at a grant date fair value of $17.17.

22.

Supplemental cash flow

	*Three Months Ended March 31,*
	*2022*		*2021*
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net of refunds	$	7,716	$	1,408
Cash paid for interest, net	$	903	$	981
Change in accounts payable and accrued expenses related to capital expenditures	$	5,583	$	1,650

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Form 10-Q and the audited consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report. Management believes the comparison of the most recently completed quarter to the immediately preceding quarter provides more relevant information needed to understand and analyze the business as given the cyclical nature of our industry over the past decade, we believe a sequential discussion provides a more relevant analysis of our business results. As such, pursuant to Item 303(c)(2)(ii) of Regulation S-K, we have elected to discuss any material changes in our results of operations by including a comparison of our most recently completed quarter to the immediately preceding quarter.

This section contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in any forward-looking statement because of various factors, including those described in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” of this Form 10-Q.

Unless otherwise indicated, references to the terms “Frank’s” refers to Frank’s International N.V., the predecessor reporting entity prior to the Merger, references to “Legacy Expro” refer to Expro Group Holdings International Limited, the entity acquired by the Company in the Merger, and references to “Expro,” the “Company,”“we,”“our,” and “us” refer to Expro Group Holdings N.V., following the consummation of the Merger and unless the context otherwise required, Frank’s prior to the consummation of the Merger.

Overview of Business

Working for clients across the entire well life cycle, we are a leading provider of energy services, offering cost-effective, innovative solutions and what we consider to be best-in-class safety and service quality. The Company’s extensive portfolio of capabilities spans well construction, well flow management, subsea well access, and well intervention and integrity solutions.

With roots dating to 1938, we have approximately 7,200 employees and provide services and solutions to leading exploration and production companies in both onshore and offshore environments in approximately 60 countries.

Our broad portfolio of products and services are designed to enhance production and improve recovery across the well lifecycle from exploration through abandonment, including:

Well Construction

•

Our well construction products and services support customers’ new wellbore drilling, wellbore completion and recompletion, and wellbore plug and abandonment requirements. In particular, we offer advanced technology solutions in drilling, tubular running services, cementing and tubulars. With a focus on innovation, we are continuing to advance the way wells are constructed by optimizing process efficiency on the rig floor, developing new methods to handle and install tubulars and mitigating well integrity risks.

Well Management

Our well management offerings consist of well flow management, subsea well access and well intervention and integrity services:

•

Well flow management: We gather valuable well and reservoir data, with a particular focus on well-site safety and environmental impact. We provide global, comprehensive well flow management systems for the safe production, measurement and sampling of hydrocarbons from a well during the exploration and appraisal phase of a new field; the flowback and clean-up of a new well prior to production; and in-line testing of a well during its production life. We also provide early production facilities to accelerate production; production enhancement packages to enhance reservoir recovery rates through the realization of production that was previously locked within the reservoir; and metering and other well surveillance technologies to monitor and measure flow and other characteristics of wells.

•

Subsea well access: With over 35 years of experience providing a wide range of fit-for-purpose subsea well access solutions, our technology aims to ensure safe well access and optimized production throughout the lifecycle of the well. We provide what we believe to be the most reliable, efficient and cost-effective subsea well access systems for exploration and appraisal, development, intervention and abandonment, including an extensive portfolio of standard and bespoke Subsea Test Tree Assemblies, a rig-deployed Intervention Riser System and a vessel-deployed, wire through water Riserless Well Intervention System. We also provide systems integration and project management services.

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•

Well intervention and integrity: We provide well intervention solutions to acquire and interpret well data, ensure well bore integrity and improve production. In addition to our extensive fleet of mechanical and cased hole wireline units, we have recently introduced a number of cost-effective, innovative well intervention services, including CoilHose™, a lightweight, small-footprint solution for wellbore lifting, cleaning and chemical treatments; Octopoda™, for fluid treatments in wellbore annuli; and Galea™, an autonomous well intervention solution. We also possess several other distinct technical capabilities, including non-intrusive metering technologies and wireless telemetry systems for reservoir monitoring.

We operate a global business and have a diverse and stable customer base that is comprised of national oil companies (“NOC”), international oil companies (“IOC”), independent exploration and production companies (“Independents”) and service partners. We have strong relationships with a number of the world’s largest NOCs and IOCs, some of which have been our customers for decades. We are dedicated to safely and sustainably delivering maximum value to our customers.

We organize and manage our operations on a geographical basis. Our reporting structure and the key financial information used by our management team is organized around our four operating segments: (i) North and Latin America (“NLA”), (ii) Europe and Sub Saharan Africa (“ESSA”), (iii) Middle East and North Africa (“MENA”) and (iv) Asia-Pacific (“APAC”).

How We Generate OurRevenue

Our revenue is derived primarily from providing services in well construction, well flow management, subsea well access and well intervention and integrity services to operators globally. Our revenue includes equipment service charges, personnel charges, run charges and consumables. Some of our contracts allow us to charge for additional deliverables, such as the costs of mobilization of people and equipment and customer specific engineering costs associated with a project. We also procure products and services on behalf of our customers that are provided by third parties for which we are reimbursed with a mark-up or in connection with an integrated services contract. We also design, manufacture and sell equipment, which is typically done in connection with a related operations and maintenance arrangement with a particular customer. In addition, we also generate revenue from the sale of certain well construction products.

Market Conditions and Price of Oil and Gas

As a full-cycle energy services company, our services span the full life of an oil and gas field from appraisal, development, completion and production through eventual abandonment. While the first quarter of 2022 has continued to be challenged in certain geographies by COVID-19 constraints and the impact of the Russian-Ukrainian conflict, the market is showing positive signs of recovery. There are a number of market factors that have had, and may continue to have, an effect on our business, including:

•

The market for oilfield services and our business are substantially dependent on the condition of the oil and gas industry and, in particular, the willingness of oil and gas companies to make expenditures on exploration, drilling and production operations.

•

Oil demand in 2022 is forecast to exceed 2021 as the overall economic backdrop improves through the COVID-19 pandemic recovery with liquids demand growing by an estimated 2.4 million barrels per day (“b/d”) in 2022, up from 97.4 million b/d in 2021, rising by an additional 1.9 million b/d in 2023 to 101.7 million b/d (which would surpass 2019 levels of 101.5 million b/d). Due to the production curtailments by Organization of Petroleum Exporting Countries (“OPEC”) and certain non-OPEC nations (“OPEC+”) members, investment restraint from U.S. and other oil producers, and other supply disruptions during the pandemic, oil demand has outpaced production for over a year. Following Russia’s invasion of Ukraine, Brent prices spiked stemming from fears over supply disruptions due to sanctions imposed on Russia. Despite this, following reaffirmation from OPEC+ members they will increase production again, the Energy Information Administration (“EIA”) forecast that global oil production will outpace demand during both 2022 and 2023, resulting in rising global oil inventories and downward pressures on oil prices. However, the ultimate impact of sanctions on Russian exports, energy security concerns resulting from the Russian-Ukrainian conflict, and the impact of new COVID-19 variants on economic activity are unknown and as a result uncertainty remains in the global oil markets.

•

Despite the multi-year underinvestment in new reserves, we expect that operators will continue to exercise fiscal discipline in the near-term and continue to exercise caution as a result of the potential impact of new COVID-19 variants on their activities. As a result, Expro and other oilfield services companies continue to have limited visibility through 2022 and into 2023 on customer spending plans and the timing of an expected further increase in activity levels.

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•

In addition, increases in activity are not expected to be uniform across geo-markets or type of activity, at least in the early stages of a market recovery, although international and deepwater activity is expected to continue to improve throughout 2022. We expect that the demand for services related to brownfield and production enhancement and in field development will also show increased demand.

•

The clean energy transition continues to gain momentum. However, hydrocarbons will play a vital role in the transition towards more sustainable energy resources, and the existing expertise and future innovation within the oilfield services sector, both to reduce emissions by and enhance efficiency within the energy industry, will be critical. We are already active in the early-stage carbon capture and storage sector and have established operations and developed technologies within the geothermal and flare recovery segments. We continue to develop technologies to enhance the sustainability of our customers’ operations which, along with our digital transformation initiatives, are expected to enable us to continue to support our customers’ commercial and environmental initiatives. As the industry changes, we continue to evolve our approach to adapt and help our customers address the energy transition.

•

Increased expectations of host countries in regard to local content is another multi-year trend, which gained additional momentum during the last two years. Our commitment to developing local capabilities and in-country personnel has reduced our dependence on international staff, which has also allowed us to mitigate some of the operational challenges associated with travel restrictions related to COVID-19. These efforts have enabled us to continue to service our customers in their ongoing operations throughout the pandemic.

A major factor that affects our business activity is the price of oil and, to a lesser extent, the regional price of gas, which are both driven by market supply and demand. Changes in oil and gas prices impact customer spending on exploration and appraisal, development, production and abandonment activities. The extent of the impact of a change in oil and gas prices on these activities varies extensively between geographic regions, types of customers, types of activities and the financial returns of individual projects.

Outlook

Demand continues to improve in the face of volatile oil prices, and activity in 2022 is forecast to be higher than in 2021, with oil demand forecast to return to pre-pandemic levels in late 2022 or 2023.

The EIA estimates that global liquid fuels consumption will grow to 99.8 million b/d in 2022, up from 97.4 million b/d in 2021, rising to 101.7 million b/d in 2023 (which would surpass 2019 levels of 101.5 million b/d). Counterbalancing consumption growth, the EIA expects continuing production increases from OPEC (+2.7 million b/d compared to 2021) and an acceleration in U.S. oil production in 2022 (rising to 12.0 million b/d in 2022 and 13.0 million b/d in 2023, the highest annual average U.S. crude oil production on record) that, along with other supply increases, will outpace global oil consumption growth and contribute to declining oil prices in the mid-term. As a result, the EIA forecasts Brent crude oil spot prices to average $104 per barrel in 2022 and $92 per barrel in 2023 compared to an average $71 per barrel in 2021.

In addition to the improving oil market outlook, weglobal natural gas demand is increasing due to a combination of rising economic activity, lower inventory in storage, extreme weather events at the beginning of the quarter, and concerns of European supply curtailments from Russia which has resulted in a renewed focus on energy security, particularly in Europe. The EIA expects Henry Hub spot prices to average $5.62 per million British thermal unit (“MMBtu”) in the second quarter of 2022, $5.23/MMBtu for all of 2022 and $3.95/MMBtu in 2023 as U.S. gas production recovers. Rystad forecasts the European and Asian liquified natural gas (“LNG”) spot price to trade at approximately $25/MMBtu in 2022, maintaining the higher rates achieved in 2021 with slight downward pricing pressure in 2023 as new supplies to Europe materialize and LNG production ramps up.

The outlook for 2022 indicates a continuing modest recovery in exploration and production expenditures, albeit at different rates in individual countries, rather than a significant increase in activity in response to the higher oil and gas prices. Ongoing recovery is dependent on a range of factors, including increasing crude production offset by a slower rate of demand growth due to increasing commodity prices as a result of the Russian-Ukrainian conflict, slower jet fuel recovery, investor pressure on operators to exercise capital discipline, uncertainty on COVID-19 recovery and the impact of any new variants.

We expect demand for our services and solutions to continue to ~~take actions~~trend positively throughout 2022.

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How We EvaluateOur Operations

We use a number of financial and operational measures to ~~adjust~~routinely analyze and evaluate the performance of our business, including Revenue, Adjusted EBITDA, Adjusted Cash Flow from Operations and Cash Conversion.

Revenue: We analyze our performance by comparing actual monthly revenue by operating segments and areas of capabilities to our internal projections for each month. Our revenue is primarily derived from well construction, well flow management, subsea well access and well intervention and integrity solutions.

Adjusted EBITDA: We regularly evaluate our financial performance using Adjusted EBITDA. Our management believes Adjusted EBITDA is a useful financial performance measure as it excludes non-cash charges and other transactions not related to our core operating activities and allows more meaningful analysis of the trends and performance of our core operations.

Adjusted Cash Flow from Operations: We regularly evaluate our operating cash flow performance using Adjusted Cash Flow from Operations. Our management believes Adjusted Cash Flow from Operations is a useful tool to measure the operating cash performance of the Company as it excludes exceptional payments, interest payments and non-cash charges not related to our core operating activities and allows more meaningful analysis of the trends and performance of our core operations.

Cash Conversion: We regularly evaluate our efficiency of generating cash from operations using Cash Conversion which provides a useful tool to measure Adjusted Cash Flow from Operations as a percentage of Adjusted EBITDA.

Adjusted EBITDA, Adjusted Cash Flow from Operations and ~~cost~~Cash Conversion are non-GAAP financial measures. Please refer to the section titled “Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable financial performance measure calculated and presented in accordance with GAAP and a reconciliation of Adjusted Cash Flow from Operations to net cash provided by operating activities, the most directly comparable liquidity measure calculated and presented in accordance with GAAP.

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Executive Overview

Three months ended March 31, 2022 compared to three months ended December 31, 2021

Certain highlights of our financial results and other key developments include:


	•	Revenue for the three months ended March 31, 2022 decreased by $15.2 million, or 5.1%, to $280.5 million, compared to $295.7 million for the three months ended December 31, 2021. The reduction in revenue was driven by lower activity across ESSA and APAC, partially offset by an increase in activity in NLA and MENA. COVID-19-related project delays, particularly in APAC, also contributed to the sequential decrease in revenue. Revenue for our segments is discussed separately below under the heading “Operating Segment Results.”

	•	We reported a net loss for the three months ended March 31, 2022 of $11.1 million, compared to a net loss of $91.2 million for the three months ended December 31, 2021. The overall decrease in net loss was primarily due to a combination of sequentially lower merger and integration expense of $23.8 million, stock-based compensation expense of $48.2 million and income tax expense of $3.4 million.

	•	Adjusted EBITDA for the three months ended March 31, 2022 decreased by $13.7 million, or 27.1%, to $36.8 million from $50.6 million for the three months ended December 31, 2021. The decrease of $13.7 million is attributable to lower activity during the three months ended March 31, 2022, partially offset by lower corporate costs. Adjusted EBITDA margin decreased to 13.1% during the three months ended March 31, 2022, as compared to 17.1% during the three months ended December 31, 2021.

	•	Net cash used in operating activities for the three months ended March 31, 2022 was $14.2 million, compared to cash provided by operating activities of $15.7million for the three months ended December 31, 2021.

	•	Adjusted Cash Flow from Operations and Cash Conversion for the three months ended March 31, 2022 was $(1.4) million and (4)%, respectively, compared to $41.1 million and 81%, respectively, for the three months ended December 31, 2021.

Non-GAAP Financial Measures

We include in this Form 10-Q the non-GAAP financial measures Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Cash Flow from Operations and Cash Conversion. We provide reconciliations of net loss, the most directly comparable financial performance measure calculated and presented in accordance with GAAP, to Adjusted EBITDA. We also provide a reconciliation of Adjusted Cash Flow from Operations to net cash provided by operating activities, the most directly comparable liquidity measure calculated and presented in accordance with GAAP.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Cash Flow from Operations and Cash Conversion are used as supplemental financial measures by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others. These non-GAAP financial measures allow our management and others to assess our financial and operating performance as compared to those of other companies in our industry, without regard to the effects of our capital structure, ~~to reflect current~~asset base, items outside the control of management and ~~expected activity levels. Depending on future market conditions, further actions may be necessary to adjust our operations, which may result in additional charges.~~

~~Our~~other charges outside the normal course of business.

We define Adjusted EBITDA as net loss adjusted for (a) income tax expense (benefit), (b) depreciation and amortization expense, (c) impairment expense, (d) severance and other ~~charges,~~expense, net, ~~are summarized below~~(e) stock-based compensation expense, (f) merger and integration expense, (g) gain on disposal of assets, (h) other income, net, (i) interest and finance (income) expense, net and (j) foreign exchange (gain) loss. Adjusted EBITDA margin reflects our Adjusted EBITDA as a percentage of revenues.

We define Adjusted Cash Flow from Operations as net cash provided by operating activities adjusted for cash paid during the period for interest, net, severance and other expense and merger and integration expense. We define Cash Conversion as Adjusted Cash Flow from Operations divided by Adjusted EBITDA.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Cash Flow from Operations and Cash Conversion have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. As Adjusted EBITDA, Adjusted Cash Flow from Operations and Cash Conversion may be defined differently by other companies in our industry, our presentation of Adjusted EBITDA, Adjusted Cash Flow from Operations and Cash Conversion may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

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The following table presents a reconciliation of net loss to Adjusted EBITDA for each of the three months presented (in thousands):

	Three Months Ended
	March 31, 2022			December 31, 2021			March 31, 2021
Net loss	$	(11,132	)	$	(91,204	)	$	(20,392	)

Income tax expense	$	4,549		$	7,944		$	2,545
Depreciation and amortization expense		35,012			44,111			27,759
Merger and integration expense		4,725			28,450			4,823
Severance and other expense		1,494			1,729			555
Gain on disposal of assets		-			(1,000	)		-
Other income, net (1)		(996	)		(2,681	)		(239	)
Stock-based compensation expense (2)		6,018			54,162			-
Foreign exchange (gain) loss		(2,816	)		2,804			748
Interest and finance (income) expense, net		(13	)		6,242			1,627
Adjusted EBITDA	$	36,841		$	50,557		$	17,426

Adjusted EBITDA Margin		13.1	%		17.1	%		11.1	%

(1)	Other income, net, is comprised of immaterial, unusual or infrequently occurring transactions which, in management’s view, do not provide useful measures of the underlying operating performance of the business.
(2)	Non-cash, stock-based compensation expense of $54.2 million for the three months ended December 31, 2021 includes the acceleration of $42.1 million associated with Legacy Expro stock options and restricted stock units recognized as a result of the completion of the Merger.

The following table provides a reconciliation of net cash provided by operating activities to Adjusted Cash Flow from Operations for each of the three months presented (in thousands):

	Three Months Ended
	March 31, 2022			December 31, 2021			March 31, 2021
Net cash (used in) provided by operating activities	$	(14,162	)	$	15,690		$	9,641
Cash paid during the three months for interest, net		903			1,176			981
Cash paid during the three months for merger and integration expense		11,632			22,390			4,524
Cash paid during the three months for severance and other expense		207			1,836			492
Adjusted Cash Flow from Operations	$	(1,420	)	$	41,092		$	15,638

Adjusted EBITDA	$	36,841		$	50,557		$	17,426

Cash Conversion		(4	)%		81	%		90	%

Three Months Ended March 31,
2021 2020
Severance and other costs $ 265 $ 538
Mergers and acquisition expense 6,804 0
Fixed asset impairments and retirements 171 15,479
Inventory write-offs 136 0
Intangible asset impairments 0 4,708
$ 7,376 $ 20,725

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~~Severance~~

Results of Operations

Operating Segment Results

The following table shows revenue by segment and ~~other costs: We incurred~~revenue as a percentage of total revenue by segment for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021:

	Three months ended						Percentage
(in thousands)	March 31, 2022		December 31, 2021		March 31, 2021		March 31, 2022			December 31, 2021			March 31, 2021
NLA	$	103,861	$	100,394	$	30,363		37.0	%		34.0	%		19.4	%
ESSA		82,071		94,322		53,630		29.3	%		31.9	%		34.3	%
MENA		50,715		49,464		41,155		18.1	%		16.7	%		26.4	%
APAC		43,830		51,489		31,147		15.6	%		17.4	%		19.9	%
Total Revenue	$	280,477	$	295,669	$	156,295		100.0	%		100.0	%		100.0	%

The following table shows Segment EBITDA and Segment EBITDA margin by segment and reconciliation to loss before income taxes for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021:

	Three months ended									Segment EBITDA Margin
(in thousands)	March 31, 2022			December 31, 2021			March 31, 2021			March 31, 2022			December 31, 2021			March 31, 2021
NLA	$	21,827		$	21,162		$	2,428			21.0	%		21.1	%		8.0	%
ESSA		11,874			19,859			5,366			14.5	%		21.1	%		10.0	%
MENA		15,465			16,076			15,058			30.5	%		32.5	%		36.6	%
APAC		5,438			12,206			5,166			12.4	%		23.7	%		16.6	%
Total Segment EBITDA		54,604			69,303			28,018
Corporate costs (1)		(21,965	)		(23,985	)		(14,684	)
Equity in income of joint ventures		4,202			5,239			4,092
Gain on disposal of assets		-			1,000			-
Depreciation and amortization expense		(35,012	)		(44,111	)		(27,759	)
Merger and integration expense		(4,725	)		(28,450	)		(4,823	)
Severance and other expense		(1,494	)		(1,729	)		(555	)
Stock-based compensation expense		(6,018	)		(54,162	)		-
Foreign exchange gain (loss)		2,816			(2,804	)		(748	)
Other income, net		996			2,681			239
Interest and finance (expense) income, net		13			(6,242	)		(1,627	)
Loss before income taxes	$	(6,583	)	$	(83,260	)	$	(17,847	)

⁽¹⁾	Corporate costs include the costs of running our corporate head office and other central functions that support the operating segments, including research, engineering and development, logistics, sales and marketing and health and safety and are not attributable to a particular operating segment.

Three months ended March 31, 2022 compared to three months ended December 31, 2021

NLA

Revenue for the NLA segment was $103.9 million for the three months ended March 31, 2022, an increase of $3.5 million, or 3.5%, compared to $100.4 million for the three months ended December 31, 2021.The increase was primarily due to higher demand for well construction services in the U.S. and Mexico driven by higher customer activity and equipment sales during the three months ended March 31, 2022. The increase in revenues was partially offset by lower subsea well access and well flow management revenues in the U.S. due to lower activity and non-recurring subsea equipment sales.

Segment EBITDA for the NLA segment was $21.8 million, or 21.0% of revenues, during the three months ended March 31, 2022, compared to $21.2 million or 21.1% of revenues during the three months ended December 31, 2021. The increase of $0.6 million is attributable to higher activity during the three months ended March 31, 2022.

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ESSA

Revenue for the ESSA segment was $82.1 million for the three months ended March 31, 2022, a decrease of $12.3 million, or 13.0%, compared to $94.3 million for the three months ended December 31, 2021. The decrease of $12.3 million in revenues was primarily driven by lower well flow management and well construction services revenue in Mozambique, United Kingdom, Azerbaijan, and Angola due to a ~~continued effort~~combination of lower customer activity levels and project delays, as well as non-recurring equipment sales in Norway.

Segment EBITDA for the ESSA segment was $11.9 million, or 14.5% of revenues, for the three months ended March 31, 2022, a decrease of $8.0 million, or 40.2%, compared to ~~adjust our cost base, including reducing our workforce~~$19.9 million, or 21.1% of revenues, for the three months ended December 31, 2021. The decrease of $8.0 million is primarily attributable to ~~meet~~lower activity levels and a less favorable activity mix during the ~~depressed demand~~three months ended March 31, 2022.

MENA

Revenue for the MENA segment was $50.7 million for the three months ended March 31, 2022, an increase of $1.2 million, or 2.5%, compared to $49.5 million for the three months ended December 31, 2021. The increase in revenue was driven by equipment sales related to well flow management in the ~~industry.~~

~~Mergers~~United Arab Emirates and ~~acquisition expense:~~ ~~During~~Saudi Arabia.

Segment EBITDA for the MENA segment was $15.5 million, or 30.5% of revenues, for the three months ended March 31, 2022, a reduction of $0.6 million, or 3.8%, compared to $16.1 million, or 32.5% of revenues, for the three months ended December 31, 2021. The reduction in Segment EBITDA was primarily due to lower activity on higher margin contracts and a less favorable activity mix.

APAC

Revenue for the APAC segment was $43.8 million for the three months ended March 31, 2022, a decrease of $7.7 million, or 14.9%, compared to $51.5 million for the three months ended December 31, 2021. The decrease in revenue was primarily due to a combination of lower customer activities, non-recurring equipment sales and completion of certain projects during the previous quarter in Brunei, Thailand, Malaysia, India and Indonesia across all product lines. This decrease was partially offset by higher subsea well access revenues in Australia.

Segment EBITDA for the APAC segment was $5.4 million, or 12.4% of revenues, for the three months ended March 31, 2022, a decrease of $6.8 million, or 55.4%, compared to $12.2 million, or 23.7% of revenues, for the three months ended December 31, 2021. The reduction was primarily due to a less favorable activity mix and upfront mobilization costs incurred during the current quarter related to a COVID-19-delayed start-up of a subsea project, as well as lower activity on higher margin contracts.

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Merger and integration expense

Merger and integration expense for the three months ended March 31, 2022 decreased by $23.8 million, to $4.7 million as compared to $28.5 million for the three months ended December 31, 2021. The decrease is primarily attributable to lower legal and other professional fees related to the Merger incurred during the three months ended March 31, 2022 as compared to the three months ended December 31, 2021.

Stock-based compensation expense

Stock-based compensation expense for the three months ended March 31, 2022 decreased by $48.2 million, to $6.0 million as compared to $54.2 million for the three months ended December 31, 2021. The decrease is primarily driven by the recognition of stock-based compensation expense of $42.1 million during the three months ended December 31, 2021 associated with Legacy Expro stock options and restricted stock units as a result of the completion of the Merger, as well as the acceleration of certain legacy Frank’s equity awards in connection with the Merger.

Interest and finance (expense) income, net

Interest and finance expense, net, decreased by $6.3 million for the three months ended March 31, 2022 as compared to the three months ended December 31, 2021, primarily due to non-recurring expenses of $4.6 million incurred with respect to the New Facility during the three months ended December 31, 2021.

Income tax expense

Income tax expense for the three months ended March 31, 2022 decreased by $3.4 million to $4.5 million from $7.9 million for the three months ended December 31, 2021, primarily due to changes in the mix of taxable profits between jurisdictions.

Three months ended March 31, 2022 compared to three months ended March 31, 2021

NLA

Revenue for the NLA segment was $103.9 million for the three months ended March 31, 2022, an increase of $73.5 million, or 242.1%, compared to $30.4 million for the three months ended March 31, 2021. The increase was primarily attributable to the Merger, which contributed to an increase of $73.6 million in well construction revenue during the current quarter.

Segment EBITDA for the NLA segment was $21.8 million, or 21.0% of revenues, during the three months ended March 31, 2022, compared to $2.4 million or 8.0% of revenues during the three months ended March 31, 2021, ~~we incurred $6.8~~an increase of $19.4 million. The increase was primarily attributable to the Merger, which contributed an increase of $19.3 million ~~of costs, primarily related to legal and consulting services, associated with~~in Segment EBITDA.

ESSA

Revenue for the ~~pending merger with Expro.~~

~~Fixed asset impairments and retirements: During~~ESSA segment was $82.1 million for the three months ended March 31, ~~2020, we recognized $15.5~~2022, an increase of $28.5 million, or 53.0%, compared to $53.6 million for the three months ended March 31, 2021. Of the total increase of $28.5 million for the three months ended March 31, 2022, $24.2 million is attributable to the Merger and the remainder of the increase is primarily ~~associated with construction~~attributable to higher well intervention and integrity services revenue in ~~progress in our Cementing Equipment segment. During~~the United Kingdom, Mozambique and Tanzania.

Segment EBITDA for the ESSA segment was $11.9 million, or 14.5% of revenues, during the three months ended March 31, 2022, compared to $5.4 million or 10.0% of revenues during the three months ended March 31, 2021, ~~we recognized a $0.2~~an increase of $6.5 million. The increase was primarily attributable to the Merger, which contributed to an increase of $6.7 million ~~impairment associated our with construction~~ in ~~progress in our Tubular Running Services segment. Please see Note 5—Property, Plant and Equipment~~Segment EBITDA.

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MENA

Revenue for ~~additional details.~~

~~Inventory write-offs:~~ ~~During~~the MENA segment was $50.7 million for the three months ended March 31, ~~2021, certain inventories in our Tubular Running Services segment were determined~~2022, an increase of $9.5 million, or 23.2%, compared to ~~have costs that exceeded their net realizable values, resulting in a charge of $0.1 million.~~

~~Intangible asset impairments:~~ ~~During~~$41.2 million for the three months ended March 31, ~~2020, we identified certain intangible assets where~~2021. Of the ~~carrying value exceeded~~total increase of $9.5 million for the ~~fair value~~three months ended March 31, 2022, $6.3 million is attributable to the Merger and the remaining increase in revenue was driven by equipment sales related to well flow management in the ~~Cementing Equipment~~United Arab Emirates and Saudi Arabia.

Segment EBITDA for the MENA segment ~~resulting in an~~

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~impairment charge~~was $15.5 million, or 30.5% of ~~$4.7 million. NaN impairment was recorded~~revenues, during the three months ended March 31, 2022, compared to $15.1 million or 36.6% of revenues during the three months ended March 31, 2021. ~~Please see Note 6—Goodwill~~The increase was primarily attributable to the Merger, which contributed an increase of $0.3 million in Segment EBITDA. The reduction in Segment EBITDA margin was primarily due to lower activity on higher margin contracts and ~~Intangible Assets~~an unfavorable activity mix.

APAC

Revenue for ~~additional details.~~

~~Note 16—~~the APAC segment was $43.8 million for the three months ended March 31, 2022, an increase of $12.7 million, or 40.7%, compared to $31.1 million for the three months ended March 31, 2021. Of the total increase of $12.7 million for the three months ended March 31, 2022, $7.3 million is attributable to the Merger and the remaining increase is primarily attributable to higher subsea well access and well flow management revenue in Australia, Brunei and Malaysia.

Segment ~~Information~~

~~Reporting Segments~~

~~Operating segments are defined as components~~EBITDA for the APAC segment was $5.4 million, or 12.4% of revenues, during the three months ended March 31, 2022, compared to $5.2 million or 16.6% of revenues during the three months ended March 31, 2021. The Merger contributed an ~~enterprise~~increase of $0.2 million in Segment EBITDA.

Stock-based compensation expense

Stock-based compensation expense for ~~which separate financial information is available that is regularly evaluated by~~the three months ended March 31, 2022 was $6.0 million. No stock-based compensation expense was recognized during the three months ended March 31, 2021. The expense for the current quarter primarily relates to the Company’s ~~chief operating decision maker ("CODM")~~ ~~in deciding how to allocate resources and assess performance. We are comprised of 3~~ ~~reportable segments: Tubular Running Services (“TRS”) segment, Tubulars segment and Cementing Equipment (“CE”) segment.~~

~~The TRS segment provides tubular running services globally. Internationally,~~Long-Term Incentive Plan which was not present during the TRS segment operates in the majority of the offshore oil and gas markets and also in several onshore regions with operations in approximately 40 countries on 6 continents. In the U.S., the TRS segment provides services in the active onshore oil and gas drilling regions, including the Permian Basin, Eagle Ford Shale, Haynesville Shale, Marcellus Shale and Utica Shale, and in the U.S. Gulf of Mexico. Our customers are primarily large exploration and production companies, including international oil and gas companies, national oil and gas companies, major independents and other oilfield service companies.

~~The Tubulars segment designs, manufactures and distributes connectors and casing attachments for large~~ ~~outside diameter (“OD”)~~ ~~heavy wall pipe.~~three months ended March 31, 2021. Additionally, the Tubulars segment sells large OD pipe originally manufactured by various pipe mills, as plain end or fully fabricated with proprietary welded or thread-direct connector solutions and provides specialized fabrication and welding services in support of offshore deepwater projects, including drilling and production risers, flowlines and pipeline end terminations, as well as long-length tubular assemblies up to 400 feet in length. The Tubulars segmentcurrent quarter also specializes in the development, manufacture and supply of proprietary drilling tool solutions that focus on improving drilling productivity through eliminating or mitigating traditional drilling operational risks.

The CE segment provides specialty equipment to enhance the safety and efficiency of rig operations. It provides specialized equipment, services and products utilized in the construction of the wellbore in both onshore and offshore environments. The product portfolio includes casing accessories that serve to improve the installation of casing, centralization and wellbore zonal isolation, as well as enhance cementing operations through advance wiper plug and float equipment technology. The CE segment also provides services and products utilized in the construction, completion or abandonment of the wellbore. These solutions are primarily used to isolate portions of the wellbore through the setting of barriers downhole to allow for rig evacuation in case of inclement weather, maintenance work on other rig equipment, squeeze cementing, pressure testing within the wellbore and temporary and permanent abandonments. These offerings improve operational efficiencies and limit non-productive time if unscheduled events are encountered at the wellsite.

~~Revenue~~

We disaggregate our revenue from contracts with customers by geography for each of our segments, as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Intersegment revenue is immaterial.

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~The following tables presents our revenue disaggregated by geography, based on the location where our services were provided and products sold (in thousands):~~

Three Months Ended March 31, 2021
Tubular Running Services Tubulars Cementing Equipment Consolidated
United States $ 18,367 $ 7,993 $ 9,345 $ 35,705
International 47,918 3,676 7,512 59,106
Total Revenue $ 66,285 $ 11,669 $ 16,857 $ 94,811
Three Months Ended March 31, 2020
Tubular Running Services Tubulars Cementing Equipment Consolidated
United States $ 30,169 $ 9,797 $ 13,531 $ 53,497
International 59,328 2,745 7,922 69,995
Total Revenue $ 89,497 $ 12,542 $ 21,453 $ 123,492

~~Revenue by geographic area were as follows (in thousands):~~

Three Months Ended
March 31,
2021 2020
United States $ 35,705 $ 53,497
Europe/Middle East/Africa 28,254 35,434
Latin America 21,934 20,925
Asia Pacific 7,653 9,569
Other countries 1,265 4,067
Total Revenue $ 94,811 $ 123,492

~~Adjusted EBITDA~~

We define Adjusted EBITDA as net income (loss) before interest income, net, depreciation and amortization, income tax benefit or expense, asset impairments, gain or loss on disposal of assets, foreign currency gain or loss, equity-based compensation, unrealized and realized gain or loss, net severance and other charges, other non-cash adjustments and other charges. We review Adjusted EBITDA on both a consolidated basis and on a segment basis. We use Adjusted EBITDA to assess our financial performance because it allows us to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), income tax, foreign currency exchange rates and other charges and credits. Adjusted EBITDA has limitations as an analytical tool and should not be considered as an alternative to net income (loss), operating income (loss), cash flow from operating activities or any other measure of financial performance presented in accordance with GAAP.

~~Our CODM uses Adjusted EBITDA as the primary measure of segment reporting performance.~~

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~The following table presents a reconciliation of Segment Adjusted EBITDA to net loss (in thousands):~~

Three Months Ended
March 31,
2021 2020
Segment Adjusted EBITDA:
Tubular Running Services $ 8,128 $ 13,305
Tubulars 639 1,396
Cementing Equipment 4,795 2,544
Corporate (1)
(6,909) (10,186)
6,653 7,059
Goodwill impairment 0 (57,146)
Severance and other charges, net (7,376) (20,725)
Interest income (expense), net (287) 533
Depreciation and amortization (16,107) (19,718)
Income tax (expense) benefit (1,070) 15,563
Gain (loss) on disposal of assets 182 (60)
Foreign currency loss (2,868) (9,892)
Charges and credits (2)
(3,013) (1,592)
Net loss $ (23,886) $ (85,978)

~~(1)~~ ~~Includes certain~~ expenses ~~not attributable to a particular segment, such as costs~~ related to ~~support functions and corporate executives.~~

~~(2)~~ ~~Comprised of Equity-based compensation~~stock options under the Management Incentive Plan (“MIP”). No expense ~~(for~~was recognized under the MIP during the three months ended March 31, 2021, as the performance conditions within the stock option agreements were deemed to be improbable.

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Liquidity and ~~2020: $2,872~~Capital Resources

Liquidity

Our financial objectives include the maintenance of sufficient liquidity, adequate financial resources and ~~$2,146, respectively)~~financial flexibility to fund our business. As of March 31, 2022, total available liquidity was $348.4 million, including cash and cash equivalents and restricted cash of $218.4 million and $130.0 million available for borrowings under our New Facility. Our primary sources of liquidity have been cash flows from operations. Our primary uses of capital have been for capital expenditures and acquisitions. We monitor potential capital sources, including equity and debt financing, in order to meet our investment and liquidity requirements.

Our total capital expenditures are estimated to range between $80 million and $90 million for the remainder of 2022. Our total capital expenditures were $10.6 million for the three months ended March 31, 2022, of which approximately 90% were used for the purchase and manufacture of equipment to directly support customer-related activities and approximately 10% for other property, plant and equipment, inclusive of software costs. In addition, we used $8.0 million of cash during the first quarter to acquire technology to enhance our well intervention and integrity business. Total capital expenditures were $28.0 million for the three months ended December 31, 2021, which were generally used for equipment required to provide services in connection with awarded contracts. We continue to focus on preserving and protecting our strong balance sheet, optimizing utilization of our existing assets and, where practical, limiting new capital expenditures.

The prior board of directors of the Company authorized a program to repurchase Company Common Stock from time to time. Approximately $38.5 million remained authorized for repurchases as of March 31, 2022, subject to the limitation set in our shareholder authorization for repurchases of our Company Common Stock, which is currently 10% of the common stock outstanding as of August 3, 2021. From the inception of this program in February 2020 to date, 95,007 shares of common stock were repurchased for a total cost of approximately $1.5 million.

Credit Facility

Revolving Credit Facility

On October 1, 2021, in connection with the closing of the Merger, we entered into a new revolving credit facility (the “New Facility”) with DNB Bank ASA, London Branch, as agent (the “Agent”), ~~Unrealized~~with total commitments of $200.0 million, of which $130.0 million is available for drawdowns as loans and ~~realized gains (losses) (for~~$70.0 million is available for letters of credit. Subject to the terms of the New Facility, the Company has the ability to increase the commitments to $250.0 million. Proceeds of the New Facility may be used for general corporate and working capital purposes.

On March 31, 2022, the Agent, on behalf of the consenting lenders, countersigned a Consent Request Letter dated March 10, 2022 to the New Facility (the “Consent”). Pursuant to the Consent, the lenders consented to, among other things, an amendment to the New Facility permitting dividends or distributions by the Company, or the repurchase or redemption of the Company’s shares in an aggregate amount of $50.0 million over the life of the New Facility, subject to pro forma compliance with the 2.25 to 1.0 maximum senior leverage ratio financial covenant.

Please see Note 16 “Interest bearing loans” in the Notes to the Unaudited Condensed Consolidated Financial Statements for additional information.

Cash flow from operating, investing and financing activities

Cash flows provided by (used in) our operations, investing and financing activities are summarized below (in thousands):

	Three Months Ended
	March 31, 2022			March 31, 2021
Net cash (used in) provided by operating activities	$	(14,162	)	$	9,641
Net cash used in investing activities		(5,008	)		(19,168	)
Net cash used in financing activities		(2,394	)		(802	)
Effect of exchange rate changes on cash activities		133			(272	)
Net decrease to cash and cash equivalents and restricted cash	$	(21,431	)	$	(10,601	)

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Analysis of cash flow changes between the three months ended March 31, 2022 and March 31, 2021

Net cash (used in) provided by operating activities

Net cash used in operating activities was $14.2 million during the three months ended March 31, 2022 as compared to net cash provided by operating activities of $9.6 million during the three months ended March 31, 2021. The increase of $23.8 million in net cash used in operating activities for the three months ended March 31, 2022 was primarily due to an increase in net working capital of $30.4 million, higher tax payments of $6.0 million and higher payments for merger and integration and severance expenses of $6.8 million, partially offset by an increase in Adjusted EBITDA of $19.4 million for the three months ended March 31, 2022.

Adjusted cash flows from operation during the three months ended March 31, 2022 was $(1.4) million as compared to adjusted cash flows from operation of $15.6 million during the three months ended March 31, 2021. Our primary uses of cash from operating activities were capital expenditures and funding obligations related to our financing arrangements.

Net cash used in investing activities

Net cash used in investing activities was $5.0 million during the three months ended March 31, 2022 as compared to $19.2 million during the three months ended March 31, 2021, a decrease of $14.2 million. Our principal recurring investing activity is our capital expenditures. The decrease in net cash used in investing activities was primarily due to proceeds from sale of investments related to the Frank's executive deferred compensation plan of $7.1 million, proceeds from disposal of assets of $6.4 million and ~~2020: $(99) and $1,704, respectively) and Investigation-related matters (for~~lower capital expenditures of $8.6 million for the three months ended March 31, ~~2021~~2022, partially offset by an acquisition of technology for $8.0 million.

Net cash used infinancing activities

Net cash used in financing activities was $2.4 million during the three months ended March 31, 2022 as compared to $0.8 million during the three months ended March 31, 2021. The increase of $1.6 million in cash used in financing activities is primarily due to payments of withholding taxes on stock-based compensation plans of $1.1 million and ~~2020: $42~~financed insurance premium of $1.0 million, partially offset by lower cash pledged for collateral deposits of $0.2 million and ~~$1,150, respectively).~~

~~The following tables set forth certain~~lower repayments of finance leases of $0.2 million during the three months ended March 31, 2022.

New accounting pronouncements

See Note 2 “Basis of presentation and significant accounting policies” in our unaudited condensed consolidated financial ~~information with respect~~statements under the heading “Recent accounting pronouncements.”

Critical accounting policies and estimates

There were no changes to our ~~reportable segments (in thousands):~~

Tubular Running Services Tubulars Cementing Equipment Corporate Total
Three Months Ended March 31, 2021
Revenue from external customers $ 66,285 $ 11,669 $ 16,857 $ 0 $ 94,811
Operating income (loss) (5,452) (875) 1,993 (15,452) (19,786)
Adjusted EBITDA 8,128 639 4,795 (6,909) *
Three Months Ended March 31, 2020
Revenue from external customers $ 89,497 $ 12,542 $ 21,453 $ 0 $ 123,492
Operating income (loss) (1,315) 651 (77,498) (16,046) (94,208)
Adjusted EBITDA 13,305 1,396 2,544 (10,186) *

* Non-GAAP financial measure not disclosed.

critical accounting policies and estimates from those disclosed in our Annual Report.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) includes 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 and our current expectations with respect to, among other things:

•~~our business strategy and prospects for growth;~~

•~~The merger with Expro Group Holdings International Limited (“Expro”), (the “Merger”);~~

•~~our cash flows and liquidity;~~

•~~our financial strategy, budget, projections and operating results;~~

•

●

our business strategy and prospects for growth;

●

post-Merger integration;

●

our cash flows and liquidity;

●

our financial strategy, budget, projections and operating results;

●

the amount, nature and timing of capital expenditures;

●

the availability and terms of capital;

●

the exploration, development and production activities of our customers;

●

the market for our existing and future products and services;

●

competition and government regulations; and

●

general economic and political conditions, including political tensions, conflicts and war (such as the ongoing conflict in Ukraine).

Table of ~~capital expenditures;~~Contents

•~~the availability and terms of capital;~~

•~~competition and government regulations; and~~

•~~general economic conditions.~~

~~Our~~

These forward-looking statements are generally accompanied by words such as “anticipate,” “believe,” “estimate,” “expect,” “goal,” “plan,” “intend,” “potential,” “predict,” “project,” “may,” “outlook,” or other terms that convey the uncertainty of future events or outcomes, although not all forward-looking statements contain such identifying words. The forward-looking statements in this Form 10-Q speak only as of the date of this report; we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. 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:

•continuing uncertainty relating to global crude oil demand and crude oil prices that correspondingly may lead to further significant reductions in domestic oil and gas activity, which in turn could result in further significant declines in demand for our products and services;

•

●

uncertainty relating to global crude oil demand and crude oil prices that correspondingly may lead to significant reductions in oil and gas activity, which in turn could result in significant declines in demand for our products and services;

●

uncertainty regarding the extent and duration of the remaining restrictions in the United States and globally on various commercial and economic activities due to COVID-19, including uncertainty regarding the re-imposition of restrictions due to resurgences in infection rates;

●

uncertainty regarding the timing, pace and extent of an economic recovery in the United States and elsewhere, which in turn will likely affect demand for crude oil and therefore the demand for the products and services we provide and the commercial opportunities available to us;

●

the impact of current and future laws, rulings, governmental regulations, accounting standards and statements, and related interpretations;

●

unique risks associated with our offshore operations;

●

political, economic and regulatory uncertainties in our international operations, including the impact of actions taken by OPEC and OPEC+ with respect to production levels and the effects thereof;

●

our ability to develop new technologies and products;

●

our ability to protect our intellectual property rights;

●

our ability to attract, train and retain key employees and other qualified personnel;

●

operational safety laws and regulations;

●

international trade laws and sanctions;

●

severe weather conditions and natural disasters, and other operating interruptions (including explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, spills and releases and other environmental risks);

●

policy or regulatory changes;

●

the overall timing and level of transition of the global energy sector from fossil-based systems of energy production and consumption to more renewable energy sources;

●

perception related to our environmental, social and governance (“ESG”) performance as well as current and future ESG reporting requirements; and

●

uncertainty with respect to integration and realization of expected synergies following completion of the Merger.

The impact of the ~~remaining restrictions in the United States~~COVID-19 pandemic and ~~globally on various commercial~~related economic, business and ~~economic activities due~~market disruptions continue to ~~the COVID-19 virus, including uncertainty regarding the re-imposition of restrictions due to resurgences in infection rates; such restrictions~~evolve, and its future effects are ~~designed to protect public health but also have the effect of significantly reducing demand for oil and gas, which may correspondingly decrease demand for our products and services;~~

•uncertainty regarding the timing, pace and extent of an economic recovery in the United States and elsewhere, which in turn will likely affect demand for crude oil and therefore the demand for the products and services we provide and the commercial opportunities available to us;

•~~the~~uncertain. The continued impact of ~~current~~COVID-19 on the Company’s business will depend on many factors, many of which are beyond management’s control and knowledge. It is therefore difficult for management to assess or predict with accuracy the broad future ~~laws, rulings, governmental regulations, accounting standards~~effects of this health crisis on the global economy, the energy industry or the Company’s business. As additional information becomes available, events or circumstances change and ~~statements, and related interpretations;~~

•~~unique risks associated with our offshore operations;~~

•~~political, economic and regulatory uncertainties in our international operations;~~

•~~our ability to develop new technologies and products;~~

•~~our ability to protect our intellectual property rights;~~

•~~our ability to employ and retain skilled and qualified workers;~~

•~~the level of competition in our industry;~~

•strategic and/or operational ~~safety laws and regulations;~~

•~~international trade laws and sanctions;~~

•~~weather conditions and natural disasters;~~

•~~global or national health concerns, including health epidemics, including COVID-19;~~

•~~policy or regulatory changes domestically in the United States;~~

•~~risks and conditions that apply to Expro, which~~decisions are made by management, further adjustments may be ~~different from risks that apply to us;~~

•~~unforeseen consequences~~required which could have a material adverse impact on the Company’s consolidated financial position, results of ~~the Merger;~~

•~~failure to complete the Merger or changes in the expected timing of the completion of the Merger;~~

•~~completion of the Merger following unforeseen changes in circumstance;~~

•~~uncertainty with respect to integration~~operations and ~~realization of expected cost synergies following completion of the Merger; and~~

•~~litigation risk associated with the Merger.~~

cash flows.

These and other important factors that could affect our operating results and performance are described in (1) “Risk Factors” in Part II, Item 1A of this Form 10-Q, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of this Form 10-Q, and elsewhere within this Form 10-Q, (2) our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the SEC on March ~~1, 2021~~8, 2022 (our “Annual Report”), (3) our other reports and filings we make with the SEC from time to time and (4) other announcements we make from time to time. Should one or more of the risks or uncertainties described in the documents above or in this Form 10-Q 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 Form 10-Q are expressly qualified in their entirety by the cautionary statements in this section.

~~Item 2.~~ ~~Management’s Discussion and Analysis~~Table of ~~Financial Condition and Results of Operations~~

This section contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in any forward-looking statement because of various factors, including those described in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” of this Form 10-Q.

~~Overview of Business~~

We are a global provider of highly engineered tubular services, tubular fabrication and specialty well construction and well intervention solutions to the oil and gas industry and have been in business for over 80 years. We provide our services and products to leading exploration and production companies in both offshore and onshore environments, with a focus on complex and technically demanding wells.

~~We conduct our business through three operating segments:~~

•~~Tubular Running Services.~~ ~~The Tubular Running Services (“TRS”) segment~~ provides tubular running services globally. Internationally, the TRS segment operates in the majority of the offshore oil and gas markets and also in several onshore regions with operations in approximately 40 countries on six continents. In the U.S., the TRS segment provides services in the active onshore oil and gas drilling regions, including the Permian Basin, Eagle Ford Shale, Haynesville Shale, Marcellus Shale and Utica Shale, as well as in the U.S. Gulf of Mexico. Our customers in these markets are primarily large exploration and production companies, including international oil and gas companies, national oil and gas companies, major independents and other oilfield service companies.

•~~Tubulars.~~ ~~The Tubulars segment designs, manufactures and distributes connectors and casing attachments for large~~ ~~outside diameter (“OD”)~~ heavy wall pipe. Additionally, the Tubulars segment sells large OD pipe originally manufactured by various pipe mills, as plain end or fully fabricated with proprietary welded or thread-direct connector solutions and provides specialized fabrication and welding services in support of offshore deepwater projects, including drilling and production risers, flowlines and pipeline end terminations, as well as long-length tubular assemblies up to 400 feet in length. The Tubulars segment also specializes in the development, manufacture and supply of proprietary drilling tool solutions that focus on improving drilling productivity through eliminating or mitigating traditional drilling operational risks.

•~~Cementing Equipment.~~ The Cementing Equipment (“CE”) segment provides specialty equipment to enhance the safety and efficiency of rig operations. It provides specialized equipment, services and products utilized in the construction of the wellbore in both onshore and offshore environments. The product portfolio includes casing accessories that serve to improve the installation of casing, centralization and wellbore zonal isolation, as well as enhance cementing operations through advance wiper plug and float equipment technology. The CE segment also provides services and products utilized in the construction, completion or abandonment of the wellbore. These solutions are primarily used to isolate portions of the wellbore through the setting of barriers downhole to allow for rig evacuation in case of inclement weather, maintenance work on other rig equipment, squeeze cementing, pressure testing within the wellbore, hydraulic fracturing and temporary and permanent abandonments. These offerings improve operational efficiencies and limit non-productive time if unscheduled events are encountered at the wellsite.

26Contents

~~Merger Agreement with Expro~~

On March 10, 2021, FINV and Merger Sub, a direct wholly owned subsidiary of FINV, entered into the Merger Agreement with Expro, pursuant to which Expro will merge with and into Merger Sub, with Merger Sub surviving the merger as a direct, wholly owned subsidiary of FINV. If the Merger is completed, each of the Expro Ordinary Shares, issued and outstanding immediately prior to the Effective Time, will be converted into the right to receive a number of shares of Frank’s common stock equal to the Exchange Ratio. Upon consummation of the transactions contemplated by the Merger Agreement and the Plan of Merger (as defined in the Merger Agreement), FINV expects that its current shareholders will own approximately 35% of the Combined Company after the completion of the Merger and related transactions, and current Expro shareholders will own approximately 65% of the Combined Company. Following the Merger, the name of FINV will be changed to “Expro Group Holdings N.V.” The closing of the Transactions, which is expected to occur during the third quarter of 2021, is subject to the satisfaction or waiver of closing conditions, including, among others, the requisite approval of the shareholders of each of FINV and Expro pursuant to the terms of the Merger Agreement.

In connection with the Merger Agreement, FINV, FICV and Mosing Holdings have entered into an Amended and Restated Tax Receivable Agreement (the “A&R TRA”), that amends and restates the TRA. See Note 1—Basis of Presentation in the Notes to the Unaudited Condensed Consolidated Financial Statements for additional information regarding the Merger Agreement and the A&R TRA.

~~Outlook~~

As we look toward recovery from the COVID-19 pandemic and balancing of OPEC-driven oversupply, we believe there may be a slow but steady drawdown of supply stockpiles over the next 18 months, driven by increasing demand as lockdown measures loosen with vaccine rollouts.

In the short term, uncertainty around further lockdowns may temper continued activity improvement. However, current indicators are supportive of improved market conditions for the remainder of 2021 as compared to the same period in 2020. We expect that crude oil demand and associated customer activity will continue to ramp up in the mid to long term toward pre-pandemic levels. However, we remain vigilant to the uncertainty that OPEC-controlled supply and U.S. activity levels can have on the market.

While the Gulf of Mexico is expected to remain relatively flat through 2022, operators will continue to look to Frank’s digital and automated technologies to drive operational efficiencies with reduced personnel. Our recent successes in bolstering our market share in the Gulf of Mexico with digital and automated technology that removes personnel from the rig site sets a blueprint for duplicating this success in international offshore markets.

We anticipate our U.S. land business will continue to improve through at least 2022, supported by recent commercialization of performance drilling technologies and digital solutions that increase operation efficiency. In international markets, we expect offshore markets to see continued moderate growth in line with market trends.

~~How We Evaluate Our Operations~~

We use a number of financial and operational measures to routinely analyze and evaluate the performance of our business, including revenue, Adjusted EBITDA, Adjusted EBITDA margin and safety performance.

~~Revenue~~

We analyze our revenue growth by comparing actual monthly revenue to our internal projections for each month to assess our performance. We also assess incremental changes in our monthly revenue across our operating segments to identify potential areas for improvement.

~~Adjusted EBITDA and Adjusted EBITDA Margin~~

We define Adjusted EBITDA as net income (loss) before interest income, net, depreciation and amortization, income tax benefit or expense, asset impairments, gain or loss on disposal of assets, foreign currency gain or loss, equity-based compensation, unrealized and realized gains or losses, the effects of the tax receivable agreement (“TRA”), other non-cash adjustments and other charges or credits. Adjusted EBITDA margin reflects our Adjusted EBITDA as a percentage of our revenue. We review Adjusted EBITDA and Adjusted EBITDA margin on both a consolidated basis and on a segment basis. We use Adjusted EBITDA and Adjusted EBITDA margin to assess our financial performance because it allows us to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), income tax, foreign currency exchange rates and other charges and credits. Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and should not be considered as an alternative to net income (loss), operating income (loss), cash flow from operating activities or any other measure of financial performance presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”).

~~The following table presents a reconciliation of net loss to Adjusted EBITDA and Adjusted EBITDA margin for each of the periods presented (in thousands):~~

Three Months Ended
March 31,
2021 2020
Net loss $ (23,886) $ (85,978)
Goodwill impairment — 57,146
Severance and other charges, net 7,376 20,725
Interest (income) expense, net 287 (533)
Depreciation and amortization 16,107 19,718
Income tax expense (benefit) 1,070 (15,563)
(Gain) loss on disposal of assets (182) 60
Foreign currency loss 2,868 9,892
Charges and credits (1)
3,013 1,592
Adjusted EBITDA $ 6,653 $ 7,059
Adjusted EBITDA margin 7.0 % 5.7 %

~~(1)~~ Comprised of Equity-based compensation expense (for the three months ended March 31, 2021 and 2020: $2,872 and $2,146, respectively), Unrealized and realized (gains) losses (for the three months ended March 31, 2021 and 2020: $99 and $(1,704), respectively), and Investigation-related matters (for the three months ended March 31, 2021 and 2020: $42 and $1,150, respectively).

~~For a reconciliation of our Adjusted EBITDA on a segment basis to the most comparable measure calculated in accordance with GAAP, see “Operating Segment Results.”~~

~~Safety and Quality Performance~~

Safety is one of our primary core values. Maintaining a strong safety record is a critical component of our operational success. Many of our customers have safety standards we must satisfy before we can perform services. As a result, we continually monitor our safety performance through the evaluation of safety observations, job and customer surveys, and safety data. The primary measure for our safety performance is the tracking of the Total Recordable Incident Rate which is reviewed on both a monthly and rolling twelve-month basis.

~~Consolidated Results of Operations~~

~~The following table presents our consolidated results for the periods presented (in thousands):~~

Three Months Ended
March 31,
2021 2020
(Unaudited)
Revenue:
Services $ 81,523 $ 105,083
Products
13,288 18,409
Total revenue 94,811 123,492
Operating expenses:
Cost of revenue, exclusive of depreciation and amortization
Services 63,935 79,380
Products
10,914 13,988
General and administrative expenses 16,447 26,683
Depreciation and amortization 16,107 19,718
Goodwill impairment — 57,146
Severance and other charges, net 7,376 20,725
(Gain) loss on disposal of assets (182) 60
Operating loss (19,786) (94,208)
Other income (expense):
Other income, net 125 2,026
Interest income (expense), net (287) 533
Foreign currency loss (2,868) (9,892)
Total other expense (3,030) (7,333)
Loss before income taxes (22,816) (101,541)
Income tax expense (benefit) 1,070 (15,563)
Net loss $ (23,886) $ (85,978)

~~Three Months Ended~~ ~~March 31, 2021~~ ~~Compared to Three Months Ended~~ ~~March 31, 2020~~

~~Revenue.~~ Revenue from external customers, excluding intersegment sales, for the three months ended March 31, 2021 decreased by $28.7 million, or 23.2%, to $94.8 million from $123.5 million for the three months ended March 31, 2020. Revenue decreased across all segments due to the COVID-19 pandemic and the sharp decline in oil prices. Revenue for our segments is discussed separately below under the heading “~~Operating Segment Results.~~”

~~Cost of revenue, exclusive of depreciation and amortization.~~ Cost of revenue for the three months ended March 31, 2021 decreased by $18.6 million, or 19.9%, to $74.8 million from $93.4 million for the three months ended March 31, 2020. The decrease was driven by lower activity levels and mix of work in the TRS, Tubulars and CE segments.

~~General and administrative expenses.~~ ~~General and administrative expenses for the three months ended March 31, 2021 decreased by $10.3 million, or 38.6%, to $16.4 million from $26.7 million for the three months ended March 31, 2020~~ ~~due to the restructuring and cost cutting measures we implemented during 2020.~~

~~Depreciation and amortization.~~ Depreciation and amortization for the three months ended March 31, 2021 decreased by $3.6 million, or 18.3%, to $16.1 million from $19.7 million for the three months ended March 31, 2020, as a result of ~~a lower depreciable base and less intangible asset amortization.~~

~~Goodwill impairment.~~ ~~There was no goodwill impairment charge during the~~ ~~three months ended March 31, 2021. We recognized a goodwill impairment of $57.1 million during the three months ended~~ ~~March 31, 2020. See Note 6—Goodwill and Intangible Assets in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.~~

~~Severance and other charges, net. Severance and other charges, net for the three months ended March 31, 2021 decreased by $13.3 million to $7.4 million from $20.7 million for the three months ended March 31, 2020.~~ ~~Severance and other charges, net for the~~ ~~three months endedMarch 31, 2020~~ was unfavorably impacted by fixed asset impairment charges of $15.5 million and intangible asset impairments of $4.7 million, primarily driven by COVID-19-related activity disruptions and customer spending cuts in response to falling oil prices. Severance and other charges, net for the ~~three months ended March 31, 2021 includes~~ ~~$6.8 million of mergers and acquisition costs associated with the pending merger with Expro.See Note 15—Severance and Other Charges, net in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.~~

~~Foreign currency loss~~. Foreign currency loss for the three months ended March 31, 2021 decreased by $7.0 million, to $2.9 million compared to $9.9 million for the three months ended March 31, 2020. The change in foreign currency results year-over-year was primarily driven by reduced strengthening of the U.S. dollar in the current period as compared to the prior year period.

~~Income tax expense (benefit).~~ ~~Income tax expense for the three months ended March 31, 2021 changed by $16.7 million to an expense of $1.1 million from a benefit of $15.6 million for the three months ended March 31, 2020.~~ The variance in effective tax rates compared to the same period last year is due to the beneficial impact in the prior year period from the 5-year net operating loss carryback provision included in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) as well as a change in the geographical mix of income.

~~Operating Segment Results~~

~~The following table presents revenue and Adjusted EBITDA by segment (in thousands):~~

Three Months Ended
March 31,
2021 2020
Revenue:
Tubular Running Services $ 66,285 $ 89,497
Tubulars 11,669 12,542
Cementing Equipment 16,857 21,453
Total $ 94,811 $ 123,492
Segment Adjusted EBITDA (1):
Tubular Running Services $ 8,128 $ 13,305
Tubulars 639 1,396
Cementing Equipment 4,795 2,544
Corporate (2)
(6,909) (10,186)
$ 6,653 $ 7,059

~~(1)~~Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. (For a reconciliation of our Adjusted EBITDA, see “~~Adjusted EBITDA and Adjusted EBITDA Margin~~”).

~~(2)Includes certain expenses not attributable to a particular segment, such as costs related to support functions and corporate executives.~~

~~Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020~~

~~Tubular Running Services~~

~~Revenue for the TRS segment was $66.3 million for the~~ ~~three months ended March 31, 2021, a decrease of $23.2 million, or 25.9%, compared to $89.5 million for the same period in 2020. The decrease was driven by customer spending cuts in most offshore markets and the U.S. land market.~~

~~Adjusted EBITDA for the TRS segment was $8.1 million for the~~ ~~three months ended March 31, 2021~~, a decrease of $5.2 million, or 39.1%, compared to $13.3 million for the same period in 2020. Segment results were negatively impacted by activity declines across most offshore markets and the U.S. land market.

~~Tubulars~~

~~Revenue for the Tubulars segment was $11.7 million for the~~ ~~three months ended March 31, 2021, a decrease of $0.8 million, or 6.4%, compared to $12.5 million for the same period in 2020, primarily as a result of lower drilling tools activity and lower tubular sales during the current period.~~

~~Adjusted EBITDA for the Tubulars segment was $0.6 million for the~~ ~~three months ended March 31, 2021, a decrease of $0.8 million, or 57.1%, compared to $1.4 million for the same period in 2020. A decrease in high margin drilling tools activity and lower tubular sales impacted the current period.~~

~~Cementing Equipment~~

~~Revenue for the CE segment was $16.9 million for the~~ ~~three months ended March 31, 2021, a decrease of $4.6 million, or 21.4%, compared to $21.5 million for the same period in 2020, driven by lower drilling activity and product sales in the U.S.~~

~~Adjusted EBITDA for the CE segment was $4.8 million for the~~ ~~three months ended March 31, 2021, an increase of $2.3 million, or 92.0%, compared to $2.5 million for the same period in 2020, primarily due to cost cutting measures that more than offset lower revenue.~~

~~Corporate~~

~~Adjusted EBITDA for Corporate was a loss of $6.9 million for the~~ ~~three months ended March 31, 2021, an improvement of $3.3 million, or 32.4%, compared to a loss of $10.2 million for the same period in 2020, primarily due to lower costs as a result of restructuring and cost cutting measures.~~

~~Liquidity and Capital Resources~~

~~Liquidity~~

At March 31, 2021, we had cash and cash equivalents and and short-term investments of $193.6 million and no debt. Our primary sources of liquidity to date have been cash flows from operations. Our primary uses of capital have been for organic growth capital expenditures. We continually monitor potential capital sources, including equity and debt financing, in order to meet our investment and target liquidity requirements. The COVID-19 pandemic has significantly reduced economic activity levels across the globe, which has resulted in lower demand for oil and natural gas, as well as for our services and products. The reduced demand for our services and products has had, and may continue to have, a material adverse impact on our business, results of operations and financial condition. In consideration of these risks, we are undertaking additional measures to protect liquidity. These

~~measures include increased focus on collection of receivables, enhanced customer credit review, special measures to reduce risks of high-cost inventory items, and enhanced cash reporting requirements.~~

Our Board has authorized a program to repurchase our common stock from time to time. Approximately $38,502,322 remained authorized for repurchases as of March 31, 2021; subject to the limitation set in our shareholder authorization for repurchases of our common stock, which is currently 10% of the common stock outstanding as of April 30, 2020. From the inception of this program in February 2020 to date, we repurchased 570,044 shares of our common stock for a total cost of approximately $1.5 million. This program was suspended during the second quarter of 2020 due to the impacts of COVID-19 and commodity price declines and will be revisited when market conditions stabilize sufficiently to provide greater clarity to anticipated business results. We expect that following the Merger, the board of directors of the Combined Company will reevaluate this program.

Our total capital expenditures are estimated to be approximately $25.0 million in 2021, of which we expect approximately 90% will be used for the purchase and manufacture of equipment and 10% for other property, plant and equipment. The actual amount of capital expenditures for the manufacture of equipment may fluctuate based on market conditions and timing of deliveries. During the three months ended March 31, 2021 and 2020, cash expenditures related to property, plant and equipment were $2.3 million and $10.0 million, respectively, all of which were funded from internally generated funds. We believe our cash on hand should be sufficient to fund our capital expenditure and liquidity requirements for the remainder of 2021. We expect that following the Merger, the board of directors of the Combined Company will reevaluate our capital expenditures plan.

~~Credit Facility~~

~~Asset Based Revolving Credit Facility~~

On November 5, 2018, FICV, Frank’s International, LLC and Blackhawk, as borrowers, and FINV, certain of FINV’s subsidiaries, including FICV, Frank’s International, LLC, Blackhawk, Frank’s International GP, LLC, Frank’s International, LP, Frank’s International LP B.V., Frank’s International Partners B.V., Frank’s International Management B.V., Blackhawk Intermediate Holdings, LLC, Blackhawk Specialty Tools, LLC, and Trinity Tool Rentals, L.L.C., as guarantors, entered into a five-year senior secured revolving credit facility (the “ABL Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent (the “ABL Agent”), and other financial institutions as lenders with total commitments of $100.0 million including up to $15.0 million available for letters of credit. Subject to the terms of the ABL Credit Facility, we have the ability to increase the commitments to $200.0 million. The maximum amount that the Company may borrow under the ABL Credit Facility is subject to a borrowing base, which is based on a percentage of certain eligible accounts receivable and eligible inventory, subject to customary reserves and other adjustments.

All obligations under the ABL Credit Facility are fully and unconditionally guaranteed jointly and severally by FINV’s subsidiaries, including FICV, Frank’s International, LLC, Blackhawk, Frank’s International GP, LLC, Frank’s International, LP, Frank’s International LP B.V., Frank’s International Partners B.V., ~~Frank’s International Management B.V.,~~ Blackhawk Intermediate Holdings, LLC, Blackhawk Specialty Tools, LLC, and Trinity Tool Rentals, L.L.C., subject to customary exceptions and exclusions. In addition, the obligations under the ABL Credit Facility are secured by first priority liens on substantially all of the assets and property of the borrowers and guarantors, including pledges of equity interests in certain of FINV’s subsidiaries, subject to certain exceptions. Borrowings under the ABL Credit Facility bear interest at FINV’s option at either (a) the Alternate Base Rate (“~~ABR~~”) (as defined therein), calculated as the greatest of (i) the rate of interest publicly quoted by the Wall Street Journal, as the “prime rate,” subject to each increase or decrease in such prime rate effective as of the date such change occurs, (ii) the federal funds effective rate that is subject to a 0.00% interest rate floor plus 0.50%, and (iii) the one-month Adjusted LIBO Rate (as defined therein) plus 1.00%, or (b) the Adjusted LIBO Rate, plus, in each case, an applicable margin. The applicable interest rate margin ranges from 1.00% to 1.50% per annum for ABR loans and 2.00% to 2.50% per annum for Eurodollar loans and, in each case, is based on FINV’s leverage ratio. The unused portion of the ABL Credit Facility is subject to a commitment fee that varies from 0.250% to 0.375% per

annum, according to average daily unused commitments under the ABL Credit Facility. Interest on Eurodollar loans is payable at the end of the selected interest period, but no less frequently than quarterly. Interest on ABR loans is payable monthly in arrears.

The ABL Credit Facility contains various covenants and restrictive provisions which limit, subject to certain customary exceptions and thresholds, FINV’s ability to, among other things, (1) enter into asset sales; (2) incur additional indebtedness; (3) make investments, acquisitions, or loans and create or incur liens; (4) pay certain dividends or make other distributions and (5) engage in transactions with affiliates. The ABL Credit Facility also requires FINV to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 based on the ratio of (a) consolidated EBITDA (as defined therein) minus unfinanced capital expenditures to (b) Fixed Charges (as defined therein), when either (i) an event of default occurs under the ABL Credit Facility or (ii) availability under the ABL Credit Facility falls for at least two consecutive calendar days below the greater of (A) $12.5 million and (B) 15% of the lesser of the borrowing base and aggregate commitments (a “FCCR Trigger Event”). Accounts receivable received by FINV’s U.S. subsidiaries that are parties to the ABL Credit Facility will be deposited into deposit accounts subject to deposit control agreements in favor of the ABL Agent. After a FCCR Trigger Event, these deposit accounts would be subject to “springing” cash dominion. After a FCCR Trigger Event, the Company will be subject to compliance with the fixed charge coverage ratio and “springing” cash dominion until no default exists under the ABL Credit Facility and availability under the facility for the preceding thirty consecutive days has been equal to at least the greater of (x) ~~$12.5 million~~ ~~and (y)~~ ~~15%~~ ~~of the lesser of the borrowing base and the aggregate commitments.~~ If FINV fails to perform its obligations under the agreement that results in an event of default, the commitments under the ABL Credit Facility could be terminated and any outstanding borrowings under the ABL Credit Facility may be declared immediately due and payable. The ABL Credit Facility also contains cross default provisions that apply to FINV’s other indebtedness.

As of March 31, 2021, FINV had no borrowings outstanding under the ABL Credit Facility, letters of credit outstanding of $10.3 million and availability of $23.5 million. At this time, due to our expected abilityto fund our capital expenditure and liquidity requirements from cash on hand, we do not anticipate a need to borrow under the ABL Credit Facility during the remainder of 2021. Further, we do not believe that an FCCR Trigger Event will occur in the remainder of 2021.

In connection with the closing of the Merger, Frank’s expects that the Combined Company will enter into a new revolving credit facility and terminate or otherwise replace the existing Frank’s and Expro credit facilities.

~~Tax Receivable Agreement and Amended & Restated Tax Receivable Agreement~~

We entered into the TRA with FICV and Mosing Holdings in connection with our IPO. The TRA generally provides for the payment by FINV to Mosing Holdings of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that FINV actually realizes (or is deemed to realize in certain circumstances) in periods after our IPO as a result of (i) tax basis increases resulting from the Conversion and (ii) imputed interest deemed to be paid by FINV as a result of, and additional tax basis arising from, payments under the TRA. We will retain the benefit of the remaining 15% of these cash savings, if any. Payments FINV makes under the TRA will be increased by any interest accrued from the due date (without extensions) of the corresponding tax return to the date of payment specified by the TRA. The payments under the TRA will not be conditioned upon a holder of rights under the TRA having a continued ownership interest in FINV. As of April 29, 2021, based on the best information available to us, the Mosing family collectively owns approximately 47% of our common shares.

The payment obligations under the TRA are FINV’s obligations and are not obligations of FICV. The term of the TRA commenced upon the completion of the IPO and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless FINV elects to exercise its right to terminate the TRA (or the TRA is terminated due to other circumstances, including our breach of a material obligation thereunder or certain mergers or other changes of control), and FINV makes the termination payment specified by the TRA or FINV otherwise settles its obligations under the TRA.

If FINV elects to terminate the TRA early, which it may do in its sole discretion (or if it terminates early as a result of our breach), it would be required to make a substantial, immediate lump-sum payment equal to the present value of the hypothetical future payments that could be required to be paid under the TRA (based upon certain assumptions and deemed events set forth in the TRA, including the assumption that it has sufficient taxable income to fully utilize such benefits), determined by applying a discount rate equal to the long-term Treasury rate in effect on the applicable date plus 300 basis points. Any early termination payment may be made significantly in advance of the actual realization, if any, of such future benefits. In addition, payments due under the TRA will be similarly accelerated following certain mergers or other changes of control.

In certain circumstances, FINV may be required to make payments under the TRA that it has entered into with Mosing Holdings. In most circumstances, these payments will be associated with the actual cash savings that FINV recognizes from tax benefits resulting from the Conversion, which would reduce the actual tax benefit to FINV. If FINV was to elect to exercise its sole right to terminate the TRA early or enter into certain change of control transactions, FINV may incur payment obligations prior to the time it actually incurs any tax benefit. In those circumstances, FINV would need to pay the amounts out of cash on hand, finance the payments or refrain from incurring the obligation (including by not entering into a change of control transaction). Though we do not have any present intention of incurring an advance payment under the TRA (other than as described below with respect to the

A&R TRA), based on our current liquidity and our expected ability to access debt and equity financing, we believe FINV would be able to make such a payment if necessary. Any such payment could reduce our cash on hand and our borrowing availability, however, which would also reduce the amount of cash available to operate our business, to fund capital expenditures and to be paid as dividends to our stockholders, among other things.

In connection with the Merger Agreement, FINV, FICV and Mosing Holdings have entered into the A&R TRA. Pursuant to the A&R TRA, FINV, FICV and Mosing Holdings have agreed, among other things to settle the early termination payment obligation that would otherwise be owed to Mosing Holdings under the TRA as a result of the Merger by the payment by FINV to Mosing Holdings of (i) $15 million cash at the closing of the Transactions and (ii) certain other contingent payments in the future in the event the Combined Company realizes cash tax savings from tax attributes covered under the TRA during the ten year period following the Closing Date in excess of $18,057,000, as more fully described in the A&R TRA. The terms of the A&R TRA are conditioned upon and subject to the closing of the Transactions and the payment to Mosing Holdings of the $15 million cash payment at the closing of the Transactions. If such conditions do not occur, the A&R TRA will be terminated and will be null and void, and the TRA will remain in effect in accordance with its terms. Please see Note 11—Related Party Transactions in the Notes to Unaudited Condensed Consolidated Financial Statements.

~~Cash Flows from Operating, Investing and Financing Activities~~

~~Cash flows from our operations, investing and financing activities are summarized below (in thousands):~~

Three Months Ended
March 31,
2021 2020
Operating activities $ (15,481) $ (22,252)
Investing activities (1,956) (10,039)
Financing activities (2,165) (1,521)
(19,602) (33,812)
Effect of exchange rate changes on cash 1,350 9,327
Net decrease in cash, cash equivalents and restricted cash $ (18,252) $ (24,485)

Statements of cash flows for entities with international operations that use the local currency as the functional currency exclude the effects of the changes in foreign currency exchange rates that occur during any given year, as these are noncash changes. As a result, changes reflected in certain accounts on the condensed consolidated

~~statements of cash flows may not reflect the changes in corresponding accounts on the condensed consolidated balance sheets.~~

~~Operating Activities~~

Cash flow used in operating activities was $15.5 million for the three months ended March 31, 2021 compared to $22.3 million for the same period in 2020. The change in cash flow from operating activities of $6.8 million was primarily a result of favorable changes in accounts receivable of $9.3 million and accounts payable and accrued liabilities of $24.1 million, partially offset by unfavorable changes in inventories of $10.6 million.

~~Investing Activities~~

Cash flow used in investing activities was $2.0 million for the three months ended March 31, 2021 compared to $10.0 million in the same period in 2020, a year-over-year decrease of $8.0 million, primarily due to a $7.6 million decrease in the purchases of property, plant, equipment.

~~Financing Activities~~

Cash flow used in financing activities was $2.2 million for the three months ended March 31, 2021 compared to $1.5 million in the same period in 2020. The increase in cash flow used in financing activities of $0.7 million was due to increased treasury shares withheld for employee taxes of $0.8 million and increased repayment of borrowings of $0.7 million, partially offset by repurchases under our publicly announced share repurchase program of $1.0 million during the three months ended March 31, 2020 that did not reoccur during 2021.

~~Off-Balance Sheet Arrangements~~

~~We do not have any material off-balance sheet arrangements with the exception of purchase obligations.~~

~~Critical Accounting Policies~~

~~There were no changes to our significant accounting policies from those disclosed in our Annual Report.~~

~~Impact of Recent Accounting Pronouncements~~

~~Refer to Note 1—Basis of Presentation in the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of accounting standards we recently adopted or will be required to adopt.~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in ~~our~~the Annual Report. Our exposure to market risk has not changed materially since December 31, ~~2020.~~

2021.

Item 4. Controls and Procedures

~~(a) Evaluation of Disclosure Controls and Procedures.~~

a)	Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the ~~period~~three months covered by this Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure, and such information is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon ~~the~~our evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of March 31, ~~2021~~2022 at the reasonable assurance level.

~~(b) Change in Internal Control Over Financial Reporting.~~

b)	Change in Internal Control Over Financial Reporting

Except as described below, the Company’s management, ~~including the Company’s Chief Executive Officer and Chief Financial Officer,~~ has determined that there were no changes in ~~the Company’s~~our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, these internal controls over financial reporting during the ~~period~~three months covered by this quarterly report.

~~During~~

As described in Part II, Item 9A of our Annual Report on Form 10-K for the ~~first quarter of~~year ended December 31, 2021, the ~~Company implemented~~Merger was completed on October 1, 2021, and represented a new enterprise resource planning (“ERP”) system. In connection with this ERP system, we have updated our internal controls over financial reporting to accommodate modifications to our business processes and accounting procedures. As with all new information systems, this ERP system and the related internal controls over financial reporting will require testing for effectiveness. We do not believe that the transition to this ERP system will have an adverse effect on ourchange in internal control over financial reporting.

Management continues to consolidate and integrate the Company's system of controls. The processes and controls for significant areas including business combinations, intangibles and goodwill valuations, income taxes, treasury, consolidations and the preparation of financial statements and related disclosures, and entity level controls have been substantially impacted by the ongoing integration activities. The primary changes in these areas are related to the consolidation of process owner leadership and control owners, and where required, the modification of inputs, processes and associated systems. For all areas of change noted, management believes the control design and implementation thereof are being appropriately modified to address underlying risks. The above ongoing integration activities to the Company's internal control over financial reporting are reasonably likely to materially affect its internal control over financial reporting in 2022.

Table of Contents

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

We are ~~the~~ subject of lawsuits and claims arising in the ordinary course of business from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. We had no material accruals for loss contingencies, individually or in the aggregate, as of March 31, ~~2021 and~~2022 or December 31, ~~2020. We believe~~2021. Company management believes the probability is remote that the ultimate outcome of these matters would have a material adverse effect on our financial position, results of operations or cash flows. ~~Please see Note 14—Commitments~~

We have been conducting, and ~~Contingencies in~~ the ~~Notes~~combined company will continue to ~~Unaudited Condensed Consolidated Financial Statements~~.

~~We are conducting~~conduct, an internal investigation of the operations of certain of ~~our~~its foreign subsidiaries in West Africa including possible violations of the U.S. Foreign Corrupt Practices Act (“FCPA”), ~~our~~its policies and other applicable laws. In June 2016, we voluntarily disclosed the existence of ~~our~~its extensive internal review to the ~~U.S. Securities and Exchange Commission (“SEC”),~~SEC, the U.S. Department of Justice (“DOJ”) and other governmental entities. It is ~~our~~the Company’s intent to continue to fully cooperate with these agencies and any other applicable authorities in connection with any further investigation that may be conducted in connection with this matter. While ~~our~~the review has not indicated that there has been any material impact on our previously filed financial statements, we have continued to collect information and cooperate with the ~~authorities, but at this time are unable to predict the ultimate resolution of these matters with these agencies.~~

authorities.

As disclosed above, ~~our~~the investigation into possible violations of the FCPA remains ongoing, and wethe Company will continue to cooperate with the SEC, DOJ and other relevant governmental entities in connection therewith. At this time, we are unable to predict the ultimate resolution of these matters with these agencies, including any financial impact to ~~us. Our~~the Company. The Company’s Board of Directors (the “Board”) and management are committed to continuously enhancing ~~our~~the Company’s internal controls that support improved compliance and transparency throughout ~~our~~the Company’s global operations.

Item 1A.Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risks discussed ~~below and~~ under the heading “Risk Factors” in our Annual Report, which risks could materially affect our business, financial condition or future results. These risks are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations.

~~Risk Factors Relating to the Merger~~

~~The Exchange Ratio will not be adjusted in the event of any change in the stock price of Frank’s.~~

At the Effective Time, each Expro Ordinary Share outstanding immediately prior to the Effective Time, other than shares owned by Expro, Frank’s, Merger Sub or any subsidiary of Frank’s (but including, for the avoidance of doubt, any such shares held by any wholly-owned subsidiary of Expro), will be converted into the right to receive a number of shares of our common stock equal to the Exchange Ratio. The Exchange Ratio will not be adjusted for changes in the market price of our common stock between the date of signing the Merger Agreement and completion of the Merger. Changes in the price of our common stock prior to the Merger will affect the value of our common stock that Expro shareholders will receive on the date of the Merger. Stock price changes may result from a variety of factors (many of which are out of our control), including the following:

•~~changes in the respective businesses, operations and prospects of Frank’s and Expro;~~

•~~changes in market assessments of the business, operations and prospects of Frank’s and Expro;~~

•~~investor behavior and strategies, including market assessments of the likelihood that the Merger will be completed;~~

•~~interest rates, general market and economic conditions and other factors generally affecting the price of our common stock; and~~

•~~legislation, governmental regulation and legal developments in the businesses in which Frank’s and Expro operate.~~

~~The price~~Table of our common stock on the Closing Date may vary from its price on the date the Merger Agreement was executed, on the date of the proxy statement/prospectus and on the date of the 2021 annual general meeting of our shareholders (the “Annual Meeting”). As a result, the value represented by the Exchange Ratio will also vary, and you will not know or be able to calculate at the time of the Annual Meeting the market value of the merger consideration Expro shareholders will receive upon completion of the Merger.

In addition, the Merger might not be completed until a significant period of time has passed after the Annual Meeting. Because the Exchange Ratio will not be adjusted to reflect any changes in the market value of our common stock, the market value of the our common stock issued in connection with the Merger may be higher or lower than the value of those shares on earlier dates. Stock price changes may result from, among other things, changes in the business, operations or prospects of Frank’s and Expro prior to or following the Merger, litigation or regulatory considerations, general business, market, industry or economic conditions and other factors both within and beyond the control of Frank’s. Neither Frank’s nor Expro is permitted to terminate the Merger Agreement solely because of changes in the market price or value of either company’s equity securities.

~~Current Frank’s shareholders will have a reduced ownership and voting interest in the Combined Company after the Merger, and such reduced ownership could have negative Dutch tax consequences.~~

Frank’s will issue approximately 426,146,247 shares of our common stock to Expro shareholders in the Merger. As a result of these issuances, Expro shareholders are expected to hold up to approximately 65% of the Combined Company’s outstanding common stock immediately following completion of the Merger.

Frank’s shareholders currently have the right to vote for its directors and on other matters affecting Frank’s. Each Frank’s shareholder will remain a shareholder of Frank’s with a percentage ownership of the Combined Company that will be smaller than the shareholder’s percentage of Frank’s prior to the Merger. As a result of these reduced ownership percentages, Frank’s shareholders will have less voting power in the Combined Company than they now have with respect to Frank’s.

As a result of the Merger, the interest held by current Frank’s shareholders in the Combined Company could fall below certain thresholds relevant for Dutch tax purposes, such as the threshold relevant in respect of the Dutch substantial interest rules, which could give rise to Dutch taxes on income and capital gains. In addition, the Merger will impact the average paid-in capital of Frank’s common stock held by current Frank’s shareholders as recognized for purposes of Dutch dividend withholding tax, which may have tax consequences in relation to future liquidation proceeds of redemption of Frank’s common stock or proceeds of repurchases of Frank’s common stock derived by current Frank’s shareholders. For further information, see the “Material Dutch Tax Consequences” section of the Registration Statement on Form S-4 filed with the SEC on April 26, 2021. Each Frank’s shareholder should seek tax advice from his own tax advisors about the potential tax consequences to it of holding and disposing of shares of our common stock (some of which could be material) following the merger.

~~The Merger is subject to conditions, including certain conditions that may not be satisfied, or completed on a timely basis, if at all.~~

The Merger is subject to a number of conditions beyond the control of Frank’s and Expro that may prevent, delay or otherwise materially adversely affect its completion. We cannot predict whether and when these conditions will be satisfied. Any delay in completing the Merger could cause the Combined Company not to realize some or all of the benefits that we expect to achieve if the Merger is successfully completed within its expected time frame.

~~Failure to complete the Merger could negatively impact the future business and financial results of Frank’s.~~

38Contents

Neither Frank’s nor Expro can make any assurances that it will be able to satisfy all of the conditions to the Merger or succeed in any litigation brought in connection with the Merger. If the Merger is not completed, the financial results of Frank’s may be adversely affected and Frank’s will be subject to several risks, including but not limited to:

•Frank’s being required to pay Expro a termination fee of $37.5 million or Expro being required to pay Frank’s a termination fee of $71.5 million, in each case under certain circumstances provided in the Merger Agreement;

•~~payment of costs relating to the Merger, such as legal, accounting, financial advisor and printing fees, regardless of whether the Merger is completed;~~

•~~the focus of our management team on the Merger instead of the pursuit of other opportunities that could have been beneficial to Frank’s; and~~

•~~the potential occurrence of litigation related to any failure to complete the Merger.~~

In addition, if the Merger is not completed, Frank’s may experience negative reactions from the financial markets and from its customers and employees. If the Merger is not completed, Frank’s cannot assure its shareholders that these risks will not materialize and will not materially and adversely affect the business, financial results of Frank’s or the stock price of our common stock.

The Merger Agreement contains provisions that limit each party’s ability to pursue alternatives to the Merger, could discourage a potential competing acquiror of either Frank’s or Expro from making a favorable alternative transaction proposal and, in specified circumstances, could require either party to pay a termination fee to the other party.

The Merger Agreement contains “non-solicitation” provisions that, subject to limited exceptions, restrict Frank’s or Expro’s ability to, among other things, directly or indirectly initiate, solicit, knowingly encourage or knowingly facilitate or take any action designed to lead to the inquiry, making, or submission of a proposal competing with the transactions contemplated by the Merger Agreement. In addition, while each of the Frank’s Board and the Expro Board has the ability, in certain circumstances, to change its recommendation of the transaction to its shareholders, neither party can terminate the Merger Agreement to accept an alternative proposal, and the other party generally has an opportunity to modify the terms of the Merger and Merger Agreement in response to any alternative proposals that may be made before such board of directors may withdraw or modify its recommendation. Moreover, in certain circumstances, Frank’s or Expro may be required to pay up to $5.5 million of the other party’s expenses, respectively, or a termination fee of $37.5 million or $71.5 million, respectively.

These provisions could discourage a potential third party that might have an interest in acquiring all or a significant portion of Frank’s or Expro from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share cash or market value than the market value proposed to be received or realized in the Merger. In addition, these provisions might result in a potential third party acquirer proposing to pay a lower price to the shareholders than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.

If the Merger Agreement is terminated and either Frank’s or Expro determines to seek another business combination, it may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger.

~~Members of Frank’s management and the Frank’s Board have interests in the Transactions that are different from, or in addition to, those of other Frank’s shareholders.~~

In considering whether to approve the Transactions, holders of our common stock should recognize that members of Frank’s management and the Frank’s Board have interests in the Transactions that differ from, or are in addition to, their interests as shareholders of Frank’s.

Frank’s and Expro may be unable to obtain the regulatory clearances and approvals required to complete the Merger or, in order to do so, Frank’s and Expro may be required to comply with material restrictions or conditions.

Consummation of the Merger is subject to obtaining approval under certain antitrust and foreign investment laws. Regulatory entities may impose certain requirements or obligations as conditions for their approval or in connection with their review. The Merger Agreement may require Frank’s or Expro to accept conditions from these regulators that could adversely impact the Combined Company without either of them having the right to refuse to close the Merger on the basis of those regulatory conditions. Neither Frank’s nor Expro can provide any assurance that they will obtain the necessary clearances or approvals, or that any required conditions will not have a material adverse effect on the Combined Company following the Merger or result in the abandonment of the Merger.

Additionally, even after completion of the Merger, governmental authorities could seek to challenge the Merger. Frank’s or Expro may not prevail and may incur significant costs in defending or settling any action under the antitrust laws.

~~The pendency of the Merger could adversely affect the business and operations of Frank’s.~~

In connection with the pending Merger, some customers or vendors of Frank’s may delay or defer decisions, which could negatively affect the revenues, earnings, cash flows and expenses of Frank’s, regardless of whether the Merger is completed. Similarly, current and prospective employees of Frank’s may experience uncertainty about their future roles with the Combined Company following the Merger, which may materially adversely affect the ability of Frank’s to attract, retain and motivate key personnel during the pendency of the Merger and which may materially adversely divert attention from the daily activities of Frank’s existing employees.

In addition, due to operating covenants in the Merger Agreement, Frank’s may be unable, during the pendency of the Merger, to pursue strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions that are not in the ordinary course of business, even if such actions would prove beneficial to Frank’s. Further, the process of seeking to accomplish the Merger could also divert the focus of management of Frank’s from pursuing other opportunities that could be beneficial to it, without realizing any of the benefits which might have resulted had the Merger been completed.

~~The COVID-19 outbreak may adversely affect Frank’s and Expro’s ability to timely consummate the Merger.~~

COVID-19 and the various precautionary measures attempting to limit its spread taken by many governmental authorities worldwide has had a severe effect on global markets and the global economy. The extent to which the COVID-19 pandemic impacts Frank’s and Expro’s respective business operations will depend on future developments, which are highly uncertain and cannot be predicted, including but not limited to new information which may emerge concerning the severity of COVID-19 and the nature and extent of governmental actions taken to contain it or treat its impact, the availability of effective treatments and vaccines, the ultimate duration of the pandemic, and how quickly and to what extent normal economic and operating conditions can resume. COVID-19 and official actions in response to it have made it more challenging for Frank’s, Expro and relevant third parties to adequately staff their respective businesses and operations, and may cause delay in the companies’ ability to obtain the relevant approvals for the consummation of the Merger.

~~The Merger may be completed even though material adverse changes subsequent to the announcement of the Merger, such as industry-wide changes or other events, may occur.~~

In general, either party can refuse to complete the Merger if there is a material adverse change affecting the other party. However, some types of changes do not permit either party to refuse to complete the Merger, even if such changes would have a material adverse effect on either of the parties. For example, a worsening of Frank’s or Expro’s financial condition or results of operations due to a decrease in commodity prices or general economic conditions would not give the other party the right to refuse to complete the Merger. If adverse changes occur that

~~affect either party but the parties are still required to complete the Merger, Frank’s share price, business and financial results after the Merger may suffer.~~

~~The opinion obtained by Frank’s Board from Moelis does not and will not reflect changes in circumstances after the date of such opinion.~~

On March 10, 2021, Moelis & Company LLC (“Moelis”), Frank’s financial advisor in connection with the Merger, delivered an opinion to Frank’s Board as to the fairness, as of the date of the opinion and subject to the assumptions made, procedures followed, matters considered and other limitations set forth in the opinion, of the Exchange Ratio in the Merger to Frank’s. Changes in the operations and prospects of Frank’s or Expro, general market and economic conditions and other factors that may be beyond the control of Frank’s or Expro, and on which the opinion of Moelis was based, may alter the value of Frank’s or Expro or the price of our common stock by the time the Merger is completed. Frank’s has not obtained, and does not expect to request, an updated opinion from Moelis. Moelis’s opinion does not speak to the time when the Merger will be completed or to any date other than the date of such opinion. As a result, the opinion does not and will not address the fairness, from a financial point of view, of the Exchange Ratio at the time the Merger is completed or at any time other than March 10, 2021.

~~Item 2.~~ ~~Unregistered Sales of Equity Securities and Use of Proceeds~~

~~Following is a summary of our repurchases of our common stock during the three months ended March 31, 2021.~~

~~Period~~

~~Total Number~~

~~of Shares Purchased~~ ~~(1)~~

Average
Price Paid per Share

~~Total Number of~~

~~Shares Purchased as~~

~~Part of Publicly~~

~~Announced Plans or~~

~~Programs~~ ~~(2)~~

~~Maximum Number (or~~

~~Approximate Dollar Value)~~

~~of Shares that may yet~~

~~be Purchased Under the~~

~~Program~~ ~~(2)~~

~~January 1 - January 31~~

—

~~38,502,322~~

~~February 1 - February 28~~

—

~~38,502,322~~

~~March 1 - March 31~~

—

~~38,502,322~~

~~Total~~

—

~~(1)~~This table excludes shares withheld from employees to satisfy tax withholding requirements on equity-based transactions. The Company administers cashless settlements and does not repurchase stock in connection with cashless settlements.

~~(2)~~Our Board has authorized a program to repurchase our common stock from time to time. Approximately $38,502,322 remained authorized for repurchases as of March 31, 2021; subject to the limitation set in our shareholder authorization for repurchases of our common stock, which is currently 10% of the common stock outstanding as of April 30, 2020. From the inception of this program in February 2020 to date, we repurchased 570,044 shares of our common stock for a total cost of approximately $1.5 million. This program was suspended during the second quarter of 2020.

Item 6.Exhibits

The exhibits required to be filed by Item 6 are set forth in the Exhibit Index included below.

EXHIBIT INDEX

Exhibit Number			Description
~~Exhibit~~ ~~Number~~	~~Description~~
2 .1		~~Agreement and Plan of Merger, dated as of March 10, 2021, by and among Frank’s International N.V., New Eagle Holdings Limited and Expro Group Holdings International Limited(incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021)~~.
3.1		Deed of Amendment to Articles of Association of ~~Frank’s International~~Expro Group Holdings N.V., dated ~~May 19, 2017~~October 1, 2021 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-36053), filed on ~~May 25, 2017)~~October 1, 2021).
410.1 .1	~~Registration Rights Agreement, dated as of March 10, 2021, by~~Expro Group Holdings N.V. Amended and ~~among Frank’s International N.V. and the shareholders party thereto(incorporated~~Restated Employee Stock Purchase Plan (incorporated by reference to Exhibit ~~4.1~~10.16 to the ~~Current~~Annual Report on Form ~~8-K~~10-K (File No. 001-36053), filed on March ~~10, 2021)~~8, 2022).
~~4.2~~*10.2	~~Amendment to Registration Rights Agreement,~~Consent Request Letter, dated ~~as of~~ March 10, ~~2021,~~2022, to the Revolving Facility Agreement by and among, ~~Frank’s International~~inter alios, Expro Group Holdings N.V., as parent, the borrowers and ~~the shareholders~~guarantor party thereto, and DNB Bank ASA, London Branch as agent.~~(incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021)~~.
~~10.1~~*31.1	~~Form of Voting and Support Agreement(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021)~~.
~~10.2~~		~~Form of Director Nomination Agreement(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021)~~.
~~10.3~~		~~Amended and Restated Tax Receivable Agreement, dated as of March 10, 2021, by and among Frank’s International N.V., Frank’s International C.V. and Mosing Holdings, LLC(incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021)~~.
†~~10.4~~		~~Amended and Restated Employment Offer Letter for Michael C. Kearney, effective as of March 10, 2021.~~
†~~10.5~~		~~First Amendment to the Frank’s International N.V. Amended and Restated U.S. Executive Change-in-Control Severance Plan.~~
†~~10.~~6		~~Amendment to Frank’s International N.V. Employee Restricted Stock Unit (RSU) Agreement (2013 Long-Term Incentive Plan).~~
*~~31.1~~		Certification of Chief Executive Officer pursuant to Rule 13a-14 (a) under the Securities Exchange Act of 1934.
*31.2 ~~31.2~~	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
**32.1 ~~32.1~~	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
**32.2 ~~32.2~~	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
*101.1	The following materials from ~~Frank’s International~~Expro Group Holdings N.V.’s Quarterly Report on Form 10-Q for the period ended March 31, ~~2021~~2022 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated ~~Balance Sheets; (ii) Condensed Consolidated~~ Statements of Operations; ~~(iii)~~(ii) Condensed Consolidated Statements of Comprehensive Loss; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Cash Flows; (v) Condensed Consolidated Statements of Stockholders’ Equity; ~~(v) Condensed Consolidated Statements of Cash Flows;~~ and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.
*104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

~~† Represents management contract or compensatory plan or arrangement.~~

* Filed herewith.

** Furnished herewith.

4239

Table of Contents

SIGNATURES

Pursuant to the requirements 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.

					EXPRO GROUP HOLDINGS N.V.
			~~FRANK’S INTERNATIONAL N.V.~~
Date:	May 5, 2022	By:	/s/ Quinn P. Fanning
~~Date:~~	~~May 4, 2021~~	~~By:~~	~~/s/ Melissa Cougle~~ Quinn P. Fanning
			~~Melissa Cougle~~
				~~Senior Vice President and~~ Chief Financial Officer
			(Principal Financial Officer)

4340


Title of each class			Trading Symbol(s)	Name of each exchange on which registered
Common Stock, ~~€0.01 par~~€0.06 nominal value	FI XPRO	New York Stock Exchange


~~TABLE OF CONTENTS~~
				~~Page~~
PART I. FINANCIAL INFORMATION

Item 1.	*Financial Statements*
	~~Condensed Consolidated Balance Sheets (Unaudited) at March 31, 2021 and December 31, 2020~~	3
			Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	41
	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	52
	Condensed Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021	3
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2022 and 2021	4
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	65
	~~Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2021 and 2020~~	7
			Notes to the Unaudited Condensed Consolidated Financial Statements	86

Item 2.	~~Management’s~~ *Management’s Discussion and Analysis of Financial Condition and*
			Results of Operations	2624

Item 3.	*Quantitative and Qualitative Disclosures About Market Risk*	3537

Item 4.	*Controls and Procedures*	3637

PART II. OTHER INFORMATION

Item 1.	*Legal Proceedings*	3738

Item 1A.	*Risk Factors*	3738

Item 2.6.	~~Unregistered Sales of Equity Securities and Use of Proceeds~~ *Exhibits*	4139

~~Item 6.~~ *Signatures*	~~Exhibits~~	4140

~~Signatures~~				43


FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

	March 31,		December 31,
	2021		2020
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	191,339	$	209,575
Restricted cash	1,656		1,672
Short-term investments	2,252		2,252
Accounts receivables, net	116,581		110,607
Inventories, net	94,738		81,718
Assets held for sale	3,681		2,939
Other current assets	8,416		7,744
Total current assets	418,663		416,507

Property, plant and equipment, net	255,401		272,707
Goodwill	42,785		42,785
Intangible assets, net	11,062		7,897
Deferred tax assets, net	16,482		18,030
Operating lease right-of-use assets	27,972		28,116
Other assets	30,907		30,859
Total assets	$	803,272	$	816,901

Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities	$	107,085	$	99,986
Current portion of operating lease liabilities	8,066		7,832
Deferred revenue	640		586
Other current liabilities	960		1,674
Total current liabilities	116,751		110,078

Deferred tax liabilities	0		1,548
Non-current operating lease liabilities	20,766		21,208
Other non-current liabilities	25,257		22,818
Total liabilities	162,774		155,652

Commitments and contingencies (Note 14)	0		0

Stockholders’ equity:
Common stock, €0.01 par value, 798,096,000 shares authorized, 230,761,910 and 228,806,301 shares issued and 227,712,419 and 226,324,559 shares outstanding	2,890		2,866
Additional paid-in capital	1,091,028		1,087,733
Accumulated deficit	(401,232)		(377,346)
Accumulated other comprehensive loss	(30,250)		(31,966)
Treasury stock (at cost), 3,049,491 and 2,481,742 shares	(21,938)		(20,038)
Total stockholders’ equity	640,498		661,249
Total liabilities and equity	$	803,272	$	816,901

	*Three Months Ended March 31,*
	*2022*			*2021*
Net loss	$	(11,132	)	$	(20,392	)
Other comprehensive loss:
Amortization of prior service credit		(61	)		(61	)
Other comprehensive loss		(61	)		(61	)
Comprehensive loss	$	(11,193	)	$	(20,453	)


FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)

	Three Months Ended
	March 31,
		2021		2020

Net loss		$	(23,886)	$	(85,978)
Other comprehensive income:
Foreign currency translation adjustments		1,716		424

Total other comprehensive income		1,716		424
Comprehensive loss		$	(22,170)	$	(85,554)


FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

	Three Months Ended
	March 31,
		2021		2020
Revenue:
Services		$	81,523	$	105,083
Products		13,288		18,409
Total revenue		94,811		123,492

Operating expenses:
Cost of revenue, exclusive of depreciation and amortization
Services		63,935		79,380
Products		10,914		13,988
General and administrative expenses		16,447		26,683
Depreciation and amortization		16,107		19,718
Goodwill impairment		0		57,146
Severance and other charges, net		7,376		20,725
(Gain) loss on disposal of assets		(182)		60
Operating loss		(19,786)		(94,208)

Other income (expense):

Other income, net		125		2,026
Interest income (expense), net		(287)		533

Foreign currency loss		(2,868)		(9,892)
Total other expense		(3,030)		(7,333)

Loss before income taxes		(22,816)		(101,541)
Income tax expense (benefit)		1,070		(15,563)
Net loss		$	(23,886)	$	(85,978)



Loss per common share:

Basic and diluted		$	(0.11)	$	(0.38)

Weighted average common shares outstanding:

Basic and diluted		227,019		225,505

	Three Months Ended March 31,
	2022			2021
Cash flows from operating activities:
Net loss	$	(11,132	)	$	(20,392	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization expense		35,012			27,759
Equity in income of joint ventures		(4,202	)		(4,092	)
Stock-based compensation expense		6,018			0
Change in fair value of investments		1,502			0
Elimination of unrealized profit on sales to joint ventures		0			5
Deferred taxes		(2,448	)		(656	)
Unrealized foreign exchange		(2,503	)		1,255
Changes in assets and liabilities:
Accounts receivable, net		2,163			(3,679	)
Inventories		(6,232	)		(2,766	)
Other assets		(3,492	)		1,410
Accounts payable and accrued liabilities		(13,194	)		4,288
Other liabilities		(11,501	)		6,324
Income taxes, net		(719	)		1,794
Other		(3,434	)		(1,609	)
Net cash (used in) provided by operating activities		(14,162	)		9,641
Cash flows from investing activities:
Capital expenditures		(10,577	)		(19,168	)
Acquisition of technology		(7,973	)		0
Proceeds from disposal of assets		6,422			0
Proceeds from sale of investments		7,120			0
Net cash used in investing activities		(5,008	)		(19,168	)
Cash flows from financing activities:
Cash pledged for collateral deposits		(61	)		(287	)
Payments of loan issuance and other transaction costs		(95	)		(175	)
Payment of withholding taxes on stock-based compensation plans		(1,104	)		0
Repayment of financed insurance premium		(980	)		0
Repayments of finance leases		(154	)		(340	)
Net cash used in financing activities		(2,394	)		(802	)
Effect of exchange rate changes on cash and cash equivalents		133			(272	)
Net decrease to cash and cash equivalents and restricted cash		(21,431	)		(10,601	)
Cash and cash equivalents and restricted cash at beginning of period		239,847			120,709
Cash and cash equivalents and restricted cash at end of period	$	218,416		$	110,108

	*Three Months Ended March 31, 2021*
											*Accumulated*
									*Additional*		*other*						*Total*
	*Common*						*Treasury*		*paid-in*		*comprehensive*			*Accumulated*			*stockholders’*
	*stock*				*Warrants*		*Stock*		*capital*		*loss*			*deficit*			*equity*
Balance at January 1, 2021		70,890	$	585	$	10,530	$	0	$	1,006,100	$	(1,494	)	$	(403,737	)	$	611,984
Net loss		-		0		0		0		0		0			(20,392	)		(20,392	)
Other comprehensive loss		-		0		0		0		0		(61	)		0			(61	)
Balance at March 31, 2021		70,890	$	585	$	10,530	$	0	$	1,006,100	$	(1,555	)	$	(424,129	)	$	591,531

	*Three Months Ended March 31, 2022*
													*Accumulated*
											*Additional*		*other*						*Total*
	*Common*							*Treasury*			*paid-in*		*comprehensive*			*Accumulated*			*stockholders’*
	*stock*					*Warrants*		*Stock*			*capital*		*income*			*deficit*			*equity*
Balance at January 1, 2022		109,143		$	7,844	$	0	$	(22,785	)	$	1,827,782	$	20,358		$	(535,628	)	$	1,297,571
Net loss		-			0		0		0			0		0			(11,132	)		(11,132	)
Other comprehensive loss		-			0		0		0			0		(61	)		0			(61	)
Stock-based compensation expense		-			0		0		0			6,018		0			0			6,018
Common shares issued upon vesting of share-based awards		336			24		0		0			378		0			0			402
Treasury shares withheld		(100	)		0		0		(1,506	)		0		0			0			(1,506	)
Balance at March 31, 2022		109,379		$	7,868	$	0	$	(24,291	)	$	1,834,178	$	20,297		$	(546,760	)	$	1,291,292

			*Per share*		*Amount*
	*Shares issued*		*price*		*(in thousands)*
Issuance of common stock attributable to Frank’s stockholders		38,066,216	$	18.90	$	719,452
Replacement of Frank’s equity awards						7,830
Cash payment to Mosing Holdings LLC pursuant to the amended and restated tax receivable agreement						15,000
Total Merger Consideration Exchanged					$	742,282

	Amount

Cash and cash equivalents	$	187,178
Restricted cash		2,561
Accounts receivables, net		112,234
Inventories		69,567
Assets held for sale		10,061
Income tax receivables		2,030
Other current assets		23,908
Property, plant and equipment		212,639
Goodwill		154,399
Intangible assets		104,791
Operating lease right-of-use assets		27,406
Other assets		20,494
Total assets		927,268
Accounts payable and accrued liabilities		81,959
Operating lease liabilities		8,344
Current income tax liabilities		8,932
Other current liabilities		19,918
Deferred tax liabilities		5,673
Non-current operating lease liabilities		19,607
Other non-current liabilities		40,553
Total Liabilities		184,986

Total Merger Consideration Exchanged	$	742,282

	*Three Months Ended March 31,*
	*2021*
Unaudited pro forma revenues	$	251,106
Unaudited pro forma net loss	$	41,589


	Estimated Useful Lives in Years	March 31, 2021		December 31, 2020
Land	—	$	31,080	$	30,869
Land improvements	8-15	7,688		7,620
Buildings and improvements	13-39	118,592		121,105
Rental machinery and equipment	2-7	906,117		897,398
Machinery and equipment - other	7	54,869		54,842
Furniture, fixtures and computers	3-5	19,756		16,928
Automobiles and other vehicles	5	25,894		25,948
Leasehold improvements	7-15, or lease term if shorter	12,754		12,773
Construction in progress - machinery and equipment	—	12,412		24,381
		1,189,162		1,191,864
Less: Accumulated depreciation		(933,761)		(919,157)
Total property, plant and equipment, net		$	255,401	$	272,707


	March 31, 2021						December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Total		Gross Carrying Amount		Accumulated Amortization		Total
Customer Relationships	$	28,300	$	(26,917)	$	1,383	$	28,300	$	(26,324)	$	1,976

Intellectual Property	18,136		(8,457)		9,679		13,860		(7,939)		5,921

Total intangible assets	$	46,436	$	(35,374)	$	11,062	$	42,160	$	(34,263)	$	7,897


	Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
March 31, 2021
Assets:

Investments:
Cash surrender value of life insurance policies - deferred compensation plan	$	0	$	26,586	$	0	$	26,586
Marketable securities - other	2		0		0		2
Liabilities:

Deferred compensation plan	0		20,125		0		20,125

December 31, 2020
Assets:

Investments:
Cash surrender value of life insurance policies - deferred compensation plan	$	0	$	26,167	$	0	$	26,167
Marketable securities - other	3		0		0		3
Liabilities:

Deferred compensation plan	0		20,271		0		20,271

	*March 31, 2022*
	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets:
Investments:
Cash surrender value of life insurance policies-
Deferred compensation plan	$	0	$	11,210	$	0	$	11,210
Non-current accounts receivable, net		0		11,211		0		11,211
Liabilities:
Deferred compensation plan		0		8,457		0		8,457
Finance lease liabilities		0		16,553		0		16,553

	*December 31, 2021*
	*Level 1*		*Level 2*		*Level 3*		*Total*
Assets:
Investments:
Cash surrender value of life insurance policies-
Deferred compensation plan	$	0	$	18,857	$	0	$	18,857
Non-current accounts receivable, net		0		11,531		0		11,531
Liabilities:
Deferred compensation plan		0		9,339		0		9,339
Finance lease liabilities		0		16,919		0		16,919



(1)	Approximate number of unvested restricted stock units and stock to be issued pursuant to the ESPP that have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive when results from operations are at a net loss position.	2,252	2,015














	Three Months Ended March 31, 2021
	Tubular Running Services		Tubulars		Cementing Equipment		Consolidated
United States	$	18,367	$	7,993	$	9,345	$	35,705
International	47,918		3,676		7,512		59,106
Total Revenue	$	66,285	$	11,669	$	16,857	$	94,811

	Three Months Ended March 31, 2020
	Tubular Running Services		Tubulars		Cementing Equipment		Consolidated
United States	$	30,169	$	9,797	$	13,531	$	53,497
International	59,328		2,745		7,922		69,995
Total Revenue	$	89,497	$	12,542	$	21,453	$	123,492