Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 08, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-13270 | |
Entity Incorporation, State | DE | |
Entity Tax Identification Number | 90-0023731 | |
Entity Address, Street | 8846 N. Sam Houston Parkway W. | |
Entity Address, City | Houston | |
Entity Address, State | TX | |
Entity Address, Postal Zip Code | 77064 | |
City Area Code | 713 | |
Local Phone Number | 849-9911 | |
Title of each class | Common Stock, $0.0001 par value | |
Trading Symbol(s) | FTK | |
Name of each exchange on which registered | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 79,617,743 | |
Entity Registrant Name | FLOTEK INDUSTRIES INC/CN | |
Entity Central Index Key | 0000928054 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 20,527 | $ 38,660 |
Restricted cash | 40 | 664 |
Accounts receivable, net of allowance for doubtful accounts of $743 and $1,316 at September 30, 2021 and December 31, 2020, respectively | 11,560 | 11,764 |
Inventories, net | 8,818 | 11,837 |
Income taxes receivable | 55 | 403 |
Other current assets | 4,811 | 3,127 |
Assets held for sale | 545 | 0 |
Total current assets | 46,356 | 66,455 |
Property and equipment, net | 7,769 | 9,087 |
Operating lease right-of-use assets | 2,099 | 2,320 |
Goodwill | 8,092 | 8,092 |
Deferred tax assets, net | 209 | 223 |
Other long-term assets | 29 | 33 |
TOTAL ASSETS | 64,554 | 86,210 |
Current liabilities: | ||
Accounts payable | 5,224 | 5,787 |
Accrued liabilities | 10,465 | 18,275 |
Income taxes payable | 38 | 21 |
Interest payable | 70 | 34 |
Current portion of operating lease liabilities | 586 | 636 |
Current portion of finance lease liabilities | 48 | 60 |
Current portion of long-term debt | 1,336 | 4,048 |
Total current liabilities | 17,767 | 28,861 |
Deferred revenue, long-term | 100 | 117 |
Long-term operating lease liabilities | 7,888 | 8,348 |
Long-term finance lease liabilities | 64 | 96 |
Long-term debt | 3,452 | 1,617 |
TOTAL LIABILITIES | 29,271 | 39,039 |
Commitments and contingencies (See Note 11) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value, 100,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.0001 par value, 140,000,000 shares authorized; 79,610,243 shares issued and 69,316,933 shares outstanding at September 30, 2021; 78,669,414 shares issued and 73,088,494 shares outstanding at December 31, 2020 | 8 | 8 |
Additional paid-in capital | 362,174 | 359,721 |
Accumulated other comprehensive income (loss) | 51 | (19) |
Accumulated deficit | (293,025) | (278,688) |
Treasury stock, at cost; 5,648,721 and 5,580,920 shares at September 30, 2021 and December 31, 2020, respectively | (33,925) | (33,851) |
Total stockholders’ equity | 35,283 | 47,171 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 64,554 | $ 86,210 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 743 | $ 1,316 |
Preferred stock, at par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000 | 100,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 140,000,000 | 140,000,000 |
Common stock, shares issued (in shares) | 79,610,243 | 78,669,414 |
Common stock, shares outstanding (in shares) | 69,316,933 | 73,088,494 |
Treasury stock, shares (in shares) | 5,648,721 | 5,580,920 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | ||||
Revenue from external customers | $ 8,847 | $ 12,739 | $ 29,782 | $ 41,035 |
Revenue from related party | 1,332 | 0 | 1,332 | 0 |
Total revenues | 10,179 | 12,739 | 31,114 | 41,035 |
Costs and expenses: | ||||
Operating expenses (excluding depreciation and amortization) | 5,418 | 29,466 | 31,330 | 63,939 |
Corporate general and administrative | 2,696 | 2,679 | 9,925 | 12,568 |
Depreciation and amortization | 233 | 518 | 793 | 3,177 |
Research and development | 1,186 | 1,480 | 4,194 | 5,673 |
Loss (Gain) on disposal of long-lived assets | 14 | (37) | (55) | (92) |
Impairment of goodwill | 0 | 11,706 | 0 | 11,706 |
Impairment of fixed, long-lived and intangible assets | 0 | 12,521 | 0 | 69,975 |
Total costs and expenses | 9,547 | 58,333 | 46,187 | 166,946 |
Income (loss) from operations | 632 | (45,594) | (15,073) | (125,911) |
Other (expense) income: | ||||
Paycheck protection plan loan forgiveness | 0 | 0 | 881 | 0 |
Gain on lease termination | 0 | 0 | 0 | 576 |
Interest expense | (18) | (19) | (53) | (40) |
Other (expense) income, net | (102) | 291 | (62) | 322 |
Total other (expense) income, net | (120) | 272 | 766 | 858 |
Income (loss) before income taxes | 512 | (45,322) | (14,307) | (125,053) |
Income tax (expense) benefit | (3) | 81 | (30) | 6,282 |
Net income (loss) | $ 509 | $ (45,241) | $ (14,337) | $ (118,771) |
Income (loss) per common share: | ||||
Basic (in dollars per share) | $ 0.01 | $ (0.66) | $ (0.21) | $ (1.75) |
Diluted (in dollars per share) | $ 0.01 | $ (0.66) | $ (0.21) | $ (1.75) |
Weighted average common shares: | ||||
Weighted average common shares used in computing basic income (loss) per common share (in shares) | 69,324 | 68,217 | 68,665 | 68,063 |
Weighted average common shares used in computing diluted income (loss) per common share (in shares) | 70,176 | 68,217 | 68,665 | 68,063 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 509 | $ (45,241) | $ (14,337) | $ (118,771) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 38 | (40) | 70 | (168) |
Comprehensive Income (loss) | $ 547 | $ (45,281) | $ (14,267) | $ (118,939) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (14,337) | $ (118,771) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of contingent consideration | (701) | 3,200 |
Depreciation and amortization | 793 | 3,177 |
Provision for doubtful accounts | (42) | 494 |
Inventory purchase commitment settlement | (7,633) | |
Provision for excess and obsolete inventory | 687 | 10,465 |
Impairment of goodwill | 0 | 11,706 |
Impairment of right-of-use assets | 0 | 7,434 |
Impairment of fixed assets | 0 | 30,178 |
Impairment of intangible assets | 0 | 32,363 |
Gain on sale of assets | (55) | (668) |
Non-cash lease expense | 221 | 299 |
Stock compensation expense | 2,710 | 2,208 |
Deferred income tax provision (benefit) | 13 | (199) |
Paycheck protection plan loan forgiveness | (881) | 0 |
Changes in current assets and liabilities: | ||
Accounts receivable, net | 111 | 4,714 |
Inventories, net | 2,330 | 3,186 |
Income taxes receivable | 405 | (140) |
Other current assets | (2,237) | 823 |
Other long-term assets | 541 | (16) |
Accounts payable | (604) | (11,906) |
Accrued liabilities | 414 | (17,689) |
Income taxes payable | (53) | 25 |
Interest payable | 36 | 22 |
Net cash used in operating activities | (18,282) | (39,095) |
Cash flows from investing activities: | ||
Capital expenditures | (31) | (836) |
Proceeds from sale of business | 0 | 9,907 |
Proceeds from sale of assets | 74 | 86 |
Purchase of JP3, net of cash acquired | 0 | (26,284) |
Abandonment of patents and other intangible assets | 0 | (8) |
Net cash provided by (used in) investing activities | 43 | (17,135) |
Cash flows from financing activities: | ||
Proceeds from paycheck protection plan loan | 0 | 4,788 |
Payments to tax authorities for shares withheld from employees | (161) | (123) |
(Payments) proceeds from issuance of stock | (246) | 416 |
Payments for finance leases | (44) | (152) |
Net cash (used in) provided by financing activities | (451) | 4,929 |
Effect of changes in exchange rates on cash and cash equivalents | (67) | (80) |
Net change in cash, cash equivalents and restricted cash | (18,757) | (51,381) |
Cash and cash equivalents at the beginning of period | 38,660 | 100,575 |
Restricted cash at the beginning of period | 664 | 663 |
Cash and cash equivalents and restricted cash at beginning of period | 39,324 | 101,238 |
Cash and cash equivalents at end of period | 20,527 | 49,193 |
Restricted cash at the end of period | 40 | 664 |
Cash, cash equivalents and restricted cash at end of period | $ 20,567 | $ 49,857 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | |
Beginning balance at Dec. 31, 2019 | $ 172,029 | $ 6 | $ (33,484) | $ 347,565 | $ 179 | $ (142,237) | |
Beginning balance (in shares) at Dec. 31, 2019 | 63,657 | 4,145 | |||||
Increase (Decrease) in Equity | |||||||
Net income (loss) | (118,771) | (118,771) | |||||
Foreign currency translation adjustment | (168) | (168) | |||||
Stock issued under employee stock purchase plan | 78 | 78 | |||||
Stock issued under employee stock purchase plan (in shares) | (50) | ||||||
Restricted stock granted | 338 | 338 | |||||
Restricted stock granted (in shares) | 2,815 | ||||||
Restricted stock forfeited (in shares) | (457) | ||||||
Treasury stock purchased | (123) | $ (123) | |||||
Treasury stock purchased (in shares) | 97 | ||||||
Stock compensation expense | 2,208 | 2,208 | |||||
Stock issued in JP3 acquisition | 8,538 | $ 1 | 8,537 | ||||
Stock issued in JP3 acquisition (shares) | 11,500 | ||||||
Ending balance at Sep. 30, 2020 | 64,129 | $ 7 | $ (33,607) | 358,726 | 11 | (261,008) | |
Ending balance (in shares) at Sep. 30, 2020 | 77,972 | 4,649 | |||||
Beginning balance at Jun. 30, 2020 | 108,706 | $ 7 | $ (33,566) | 357,981 | 51 | (215,767) | |
Beginning balance (in shares) at Jun. 30, 2020 | 77,626 | 4,459 | |||||
Increase (Decrease) in Equity | |||||||
Net income (loss) | (45,241) | (45,241) | |||||
Foreign currency translation adjustment | (40) | (40) | |||||
Stock issued under employee stock purchase plan | 58 | 58 | |||||
Stock issued under employee stock purchase plan (in shares) | (25) | ||||||
Restricted stock granted (in shares) | 346 | ||||||
Restricted stock forfeited (in shares) | (179) | ||||||
Treasury stock purchased | (41) | $ (41) | |||||
Treasury stock purchased (in shares) | 36 | ||||||
Stock compensation expense | 687 | 687 | |||||
Ending balance at Sep. 30, 2020 | 64,129 | $ 7 | $ (33,607) | 358,726 | 11 | (261,008) | |
Ending balance (in shares) at Sep. 30, 2020 | 77,972 | 4,649 | |||||
Beginning balance at Dec. 31, 2020 | 47,171 | $ 8 | $ (33,851) | 359,721 | (19) | (278,688) | |
Beginning balance (in shares) at Dec. 31, 2020 | 78,669 | 5,581 | |||||
Increase (Decrease) in Equity | |||||||
Net income (loss) | (14,337) | ||||||
Foreign currency translation adjustment | 70 | 70 | |||||
Stock issued under employee stock purchase plan | (246) | $ (110) | (136) | ||||
Stock issued under employee stock purchase plan (in shares) | (112) | ||||||
Restricted stock granted (in shares) | 1,694 | ||||||
Restricted stock forfeited | 76 | $ 72 | 4 | ||||
Restricted stock forfeited (in shares) | (140) | (34) | |||||
Stock compensation expense | 2,710 | 2,710 | |||||
Shares withheld to cover taxes | (161) | $ (36) | (125) | ||||
Shares withheld to cover taxes (in shares) | 146 | ||||||
Other (shares) | [1] | (613) | |||||
Stock issued in JP3 acquisition | 0 | ||||||
Ending balance at Sep. 30, 2021 | 35,283 | $ 8 | $ (33,925) | 362,174 | 51 | (293,025) | |
Ending balance (in shares) at Sep. 30, 2021 | 79,610 | 5,649 | |||||
Beginning balance at Jun. 30, 2021 | 33,894 | $ 8 | $ (34,017) | 361,424 | 13 | (293,534) | |
Beginning balance (in shares) at Jun. 30, 2021 | 79,607 | 5,628 | |||||
Increase (Decrease) in Equity | |||||||
Net income (loss) | 509 | 509 | |||||
Foreign currency translation adjustment | 38 | 38 | |||||
Stock issued under employee stock purchase plan | (69) | $ 20 | (89) | ||||
Stock issued under employee stock purchase plan (in shares) | (28) | ||||||
Restricted stock granted (in shares) | 9 | ||||||
Restricted stock forfeited | 11 | $ 8 | 3 | ||||
Restricted stock forfeited (in shares) | (6) | (4) | |||||
Stock compensation expense | 961 | 961 | |||||
Shares withheld to cover taxes | (61) | $ 64 | (125) | ||||
Shares withheld to cover taxes (in shares) | 45 | ||||||
Ending balance at Sep. 30, 2021 | $ 35,283 | $ 8 | $ (33,925) | $ 362,174 | $ 51 | $ (293,025) | |
Ending balance (in shares) at Sep. 30, 2021 | 79,610 | 5,649 | |||||
[1] | See Note 12, “Stockholders’ Equity” for further discussion. |
Organization and Significant Ac
Organization and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | Organization and Significant Accounting Policies Organization and Nature of Operations Flotek Industries, Inc. (“Flotek” or the “Company”) creates solutions to reduce the environmental impact of energy on air, water, land and people. A technology-driven, specialty green chemistry and data company, Flotek helps customers across industrial, commercial, and consumer markets improve their Environmental, Social, and Governance (ESG) performance . The Company’s Chemistry Technologies (“CT”) segment develops, manufactures, packages, distributes, delivers, and markets green specialty chemicals that enhance the profitability of hydrocarbon producers and cleans surfaces in both commercial and personal settings to help reduce the spread of bacteria, viruses and germs. The Company’s Data Analytics (“DA”) segment enables users to maximize the value of their hydrocarbon associated processes by providing analytics associated with the streams in seconds rather than minutes or days. The real-time access to information prevents waste, reduces reprocessing and allows users to pursue automation of their hydrocarbon streams to maximize their profitability, reducing their carbon footprint, energy consumption and emissions. The Company formed the DA segment during the second quarter of 2020, after acquiring JP3 Measurement, LLC (“JP3”). The Company’s two operating segments, CT and DA, are both supported by its continuing Research & Innovation advanced laboratory capabilities. For further discussion of our operations and segments, see Note 16, “Business Segment, Geographic and Major Customer Information.” For further discussion of the JP3 acquisition, see Note 3, “Business Acquisition.” The Company was initially incorporated under the laws of the Province of British Columbia in 1985. In October 2001, the Company changed its corporate domicile to the State of Delaware. Basis of Presentation The accompanying unaudited financial statements reflect all adjustments, in the opinion of management, necessary for fair statement of the financial condition and results of operations for the periods presented. All such adjustments are normal and recurring in nature. The financial statements, including selected notes, have been prepared in accordance with applicable rules and regulations of the SEC regarding interim financial reporting and do not include all information and disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for comprehensive financial statement reporting. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report. A copy of the 2020 Annual Report is available on the SEC’s website, www.sec.gov, under the Company’s ticker symbol (“FTK”) or on Flotek’s website, www.flotekind.com. The information contained on the Company’s website does not form a part of this Quarterly Report. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company does not have investments in any unconsolidated subsidiaries. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Sources and Uses of Liquidity The Company currently funds its operations and growth primarily from cash on hand. The ability of the Company to grow and be competitive in the marketplace is dependent on the availability of adequate capital. Access to capital is dependent, in large part, on the Company’s operating cash flows, the monetization of non-core assets, and the availability of and access to debt and equity financing. The Company has a history of losses and negative operating cash flows from operations and expects to utilize a significant amount of cash as we wrap up 2021 and begin 2022. While we believe that our cash and liquid assets will provide us with sufficient financial resources to fund operations and meet our capital requirements and anticipated obligations as they become due, a slower than expected recovery of oil and gas markets, or reduced spending by our customers could have a negative impact on our liquidity. Accordingly, while the Company believes that its existing cash will enable it to fund its operations and growth, the Company cannot guarantee the level of cash flows in the future. In the event that the Company’s existing cash on hand is not sufficient to fund operations, meet the Company’s capital requirements or satisfy the anticipated obligations as they become due, the Company expects to take further action to protect its liquidity position. Such actions may include, but are not limited to: • Raising equity either in the public markets or via a private placement offering; • Seeking Paycheck Protection Program (“PPP”) loan (“PPP loan”) forgiveness from the Small Business Administration; • Entry into a borrowing facility with one or more lenders; • Sale of excess inventory and/or raw materials; • Operating lease transaction of facilities; • Sale of non-core real estate properties; • Sale-leaseback transactions of facilities; • Sub-leasing certain facilities; • Renegotiating current lease facility terms and conditions; • Reducing executive salaries and/or board of directors’ fees, or making a portion of those fees or salaries in equity instead of cash; and • Reducing professional advisory fees and headcount. However, there can be no assurance that such matters can be implemented on acceptable terms or at all. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from these estimates. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassifications did not impact previously reported net loss and stockholders’ equity. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”). We evaluate the applicability and impact of all authoritative guidance issued by the FASB. Guidance not listed below was assessed and determined to be either not applicable, clarifications of items listed below, immaterial or already adopted by the Company. New Accounting Standards Issued But Not Adopted as of September 30, 2021 The FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes .” This standard removes specific exceptions to the general principles in Topic 740. The pronouncement is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, with early adoption permitted for public companies for periods in which financial statements have not yet been issued. The Company has evaluated the impact of this standard and determined that there is no impact on the consolidated financial statements and related disclosures. The FASB issued ASU No. 2016-13, “ Measurement of Credit Losses on Financial Instruments .” This standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects estimates of expected credit losses over their contractual life that are recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. The pronouncement is effective for smaller reporting companies for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of this standard, including subsequent amendments, on the consolidated financial statements and related disclosures. |
Business Acquisition
Business Acquisition | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisition | Business AcquisitionDuring the second quarter of 2020, the Company acquired 100% ownership of JP3, a privately-held data and analytics technology company, in a cash-and-stock transaction. JP3’s real-time data platforms combine the energy industry’s only field-deployable, inline optical analyzer with proprietary cloud visualization and analytics, targeting an increase of processing efficiencies and valuation of natural gas, crude oil and refined fuels. The use of data and analytics is a growing trend in all industries where technology is used to analyze large datasets of operational information to improve performance, as well as predictive maintenance, advanced safety measures and reduced environmental impact of operations. The transaction was valued at approximately $36.6 million as of the transaction closing date, comprised of $25.0 million in cash, subject to certain adjustments and contingent consideration as described below, and 11.5 million shares in Flotek common stock with an estimated fair value of $8.5 million, net of a discount for marketability due to a lock-up period. The payment of $25.0 million was subject to certain purchase price adjustments, and the total non-equity consideration at closing was comprised of $25.0 million plus net working capital in excess of the target net working capital of $1.9 million. Additionally, the Company was subject to contingent consideration with an estimated fair value of $1.2 million at acquisition date for two potential earn-out provisions totaling up to $5.0 million based on certain stock performance targets. The first and second earn-out provisions occur if the ten-day volume-weighted average share price equals or exceeds $2 per share and $3 per share, respectively, before May 18, 2025. See Note 9, “Fair Value Measurements,” for additional information on the current estimated fair value of the contingent consideration. The following table summarizes the fair value of JP3’s assets acquired as of the closing date of May 18, 2020 (in thousands): Tradenames and trademarks $ 1,100 Technology and know-how 5,000 Customer lists 6,800 Inventories 7,100 Cash 604 Net working capital, net of cash and inventories (1,063) Fixed assets 426 Long-term debt assumed and other assets (liabilities) (893) Goodwill 17,522 Net assets acquired $ 36,596 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Revenues are recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods or services. In recognizing revenue for products and services, the Company determines the transaction price of purchase orders or contracts with customers, which may consist of fixed and variable consideration. Determining the transaction price may require significant judgment by management, which includes identifying performance obligations, estimating variable consideration to include in the transaction price, and determining whether promised goods or services can be distinguished in the context of the contract. Variable consideration typically consists of product returns and is estimated based on the amount of consideration the Company expects to receive. Revenue accruals are recorded on an ongoing basis to reflect updated variable consideration information. The majority of the products from the CT segment are sold at a point in time and service contracts are short-term in nature. The DA segment recognizes revenue for sales of equipment at the time of sale. Revenue related to service and support is recognized over time. The Company bills sales on a monthly basis with payment terms customarily 30-60 days for domestic and 90 days f or international from invoice receipt. In addition, sales taxes are excluded from revenues. Disaggregation of Revenue The Company differentiates revenue based on whether the source of revenue is attributable to product sales (point-in-time revenue recognition) or service revenue (over-time revenue recognition). Product sales accounted for over 90% of total revenue for the three and nine months ended September 30, 2021 and 2020. Revenue disaggregated by revenue source is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Revenue: Products $ 9,494 $ 12,076 $ 29,017 $ 39,053 Services 685 663 2,097 1,982 $ 10,179 $ 12,739 $ 31,114 $ 41,035 Arrangements with Multiple Performance Obligations The CT and DA segments primarily sell chemicals and equipment recognized at a point in time based on when control transfers to the customer determined by agreed upon delivery terms. Additionally, both segments offer various services associated to products sold which includes field services, installation, maintenance, and other functions. Service revenue is recognized on an over time basis for CT as services are performed as the customer is simultaneously benefiting as the Company performs. For DA, services are recognized upon completion of commissioning and installation due to the short-term nature of the performance obligation. DA has additional performance obligations related to providing ongoing or reoccurring maintenance. Revenue for these types of arrangements is recognized ratably over time throughout the contract period. Additionally, DA may provide subscription-type arrangements with customers in which monthly reoccurring revenue is recognized ratably over time in accordance with agreed upon terms and conditions. Subscription-type arrangements were not a material revenue stream in the three and nine months September 30, 2021 and 2020. During the third quarter 2021, we entered into a bill-and-hold contract, where we invoice the customer for products even though we retain possession of the products until a point in time in the future when the products are shipped to the customer. In these contracts, the primary performance obligation is satisfied at a point in time when the product is segregated from our general inventory, it is ready for shipment to customer, and we do not have the ability to use the product or direct it to another customer. Additionally, we have a secondary performance obligation related to custodial costs, including storage and freight, which is satisfied over time once the product has been delivered to the customer. During the three and nine months ended September 30, 2021, we recognized $1.3 million of revenue related to a bill-and-hold arrangement with a related party. Contract Balances Under revenue contracts for both products and services, customers are invoiced once the performance obligations have been satisfied, at which point payment is unconditional. Contract liabilities associated with incomplete performance obligations are not material. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are as follows (in thousands): September 30, 2021 December 31, 2020 Raw materials $ 6,025 $ 7,190 Finished goods 13,451 15,705 Inventories 19,476 22,895 Less reserve for excess and obsolete inventory (10,658) (11,058) Inventories, net $ 8,818 $ 11,837 The provision recorded in the three and nine months ended September 30, 2021 were $0.1 million for the CT segment and nil for the DA segment and $0.5 million for the CT segment and $0.2 million of the DA segment, respectively. The provision recorded in the three and nine months ended September 30, 2020 were $5.9 million for the CT segment and $3.9 million for the DA segment and $2.0 million for the CT segment and $3.9 million for the DA segment, respectively. The decrease in excess and obsolescence during the nine months ended September 30, 2020 is attributable to the Company’s sales of excess and obsolescence inventory. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment are as follows (in thousands): September 30, 2021 December 31, 2020 Land $ 1,986 $ 2,415 Land improvements 861 867 Buildings and leasehold improvements 6,364 6,364 Machinery and equipment 7,753 7,760 Furniture and fixtures 649 649 Transportation equipment 1,043 1,190 Computer equipment and software 1,222 1,296 Property and equipment 19,878 20,541 Less accumulated depreciation (12,109) (11,454) Property and equipment, net $ 7,769 $ 9,087 Depreciation expense totaled $0.2 million and $0.5 million for the three months ended September 30, 2021 and 2020, and $0.8 million and $2.3 million for the nine months ended September 30, 2021 and 2020, respectively. During the first quarter of 2021, the Company classified its warehouse facility in Monahans, Texas, as held for sale based on the criteria outlined in Accounting Standard Codification (“ASC”) 360 , Property, Plant and Equipment . During the first quarter, the Company committed to a plan to sell the asset in its present condition. The Company engaged with a commercial real estate agent and is actively looking for a buyer. As such, the Company reclassified the related property, plant and equipment of $0.5 million as held for sale in the current assets of the consolidated balance sheet, as the Company expects to complete the asset sale within one year. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases In August 2021, the company entered into a five year triple net operating lease agreement to lease a warehouse facility in Monahans, TX. The tenant occupied the Company’s warehouse facility in Monahans, TX in September 2021. The company will recognize other rental income, including rent, taxes and insurance over the lease period. In July 2021, the Company entered into a long-term rental agreement with Resolute Oil to leverage capabilities and facilities to drive growth in adjacent green chemistry markets. The agreement includes options to renew until 2036. Through the agreement, Resolute Oil will fully utilize the Company’s entire 15-acre campus, including the 38,000 square foot chemical blending facility, based in Waller, TX, to manufacture United States Pharmacopeia-National Formulary (USP-NF)-grade white mineral oil distributed globally to customers in the agricultural, energy, food & beverage, cosmetic, and personal care markets. During the first quarter of 2020, the Company ceased use of the corporate headquarters leased offices and moved corporate employees to the Global Research and Innovation Center (“GRIC”) during the second quarter of 2020. In addition, the lease liability and corresponding right-of-use (“ROU”) assets for the corporate headquarters and GRIC were remeasured to remove the anticipated term extensions as the Company determined it was no longer reasonably certain to utilize the extension at the GRIC. The remeasurement resulted in adjustments to lease liabilities and ROU assets totaling of $6.2 million each as of March 31, 2020. During the second quarter of 2020, the Company terminated the lease of the corporate headquarters office and moved all employees to the GRIC facility effective June 29, 2020. In addition, during the three months ended March 31, 2020, the Company recorded an impairment of the ROU assets totaling $7.4 million. No impairment was recognized for the three and nine months ended September 30, 2021. The components of lease expense and supplemental cash flow information are as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Operating lease expense $ 247 $ 258 $ 735 $ 1,112 Finance lease expense: Amortization of right-of-use assets 4 4 11 13 Interest on lease liabilities 2 5 9 14 Total finance lease expense 6 9 20 27 Short-term lease expense 15 57 44 145 Total lease expense $ 268 $ 324 $ 799 $ 1,284 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 380 $ 317 $ 1,107 $ 2,312 Operating cash flows from finance leases 10 5 62 13 Financing cash flows from finance leases 2 51 8 152 Maturities of lease liabilities are as follows (in thousands): Years ending December 31, Operating Leases Finance Leases 2021 (excluding the nine months ended September 30, 2021) $ 285 $ 14 2022 1,254 47 2023 1,318 39 2024 1,348 23 2025 1,375 — Thereafter 6,870 — Total lease payments $ 12,450 $ 123 Less: Interest (3,976) (11) Present value of lease liabilities $ 8,474 $ 112 Supplemental balance sheet information related to leases is as follows (in thousands): September 30, 2021 December 31, 2020 Operating Leases Operating lease right-of-use assets $ 2,099 $ 2,320 Current portion of operating lease liabilities $ 586 $ 636 Long-term operating lease liabilities 7,888 8,348 Total operating lease liabilities $ 8,474 $ 8,984 Finance Leases Property and equipment $ 147 $ 147 Accumulated depreciation (33) (26) Property and equipment, net $ 114 $ 121 Current portion of finance lease liabilities $ 48 $ 60 Long-term finance lease liabilities 64 96 Total finance lease liabilities $ 112 $ 156 Weighted Average Remaining Lease Term Operating leases 9.1 years 9.9 years Finance leases 2.9 years 3.1 years Weighted Average Discount Rate Operating leases 8.9 % 8.9 % Finance leases 8.5 % 9.0 % |
Leases | Leases In August 2021, the company entered into a five year triple net operating lease agreement to lease a warehouse facility in Monahans, TX. The tenant occupied the Company’s warehouse facility in Monahans, TX in September 2021. The company will recognize other rental income, including rent, taxes and insurance over the lease period. In July 2021, the Company entered into a long-term rental agreement with Resolute Oil to leverage capabilities and facilities to drive growth in adjacent green chemistry markets. The agreement includes options to renew until 2036. Through the agreement, Resolute Oil will fully utilize the Company’s entire 15-acre campus, including the 38,000 square foot chemical blending facility, based in Waller, TX, to manufacture United States Pharmacopeia-National Formulary (USP-NF)-grade white mineral oil distributed globally to customers in the agricultural, energy, food & beverage, cosmetic, and personal care markets. During the first quarter of 2020, the Company ceased use of the corporate headquarters leased offices and moved corporate employees to the Global Research and Innovation Center (“GRIC”) during the second quarter of 2020. In addition, the lease liability and corresponding right-of-use (“ROU”) assets for the corporate headquarters and GRIC were remeasured to remove the anticipated term extensions as the Company determined it was no longer reasonably certain to utilize the extension at the GRIC. The remeasurement resulted in adjustments to lease liabilities and ROU assets totaling of $6.2 million each as of March 31, 2020. During the second quarter of 2020, the Company terminated the lease of the corporate headquarters office and moved all employees to the GRIC facility effective June 29, 2020. In addition, during the three months ended March 31, 2020, the Company recorded an impairment of the ROU assets totaling $7.4 million. No impairment was recognized for the three and nine months ended September 30, 2021. The components of lease expense and supplemental cash flow information are as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Operating lease expense $ 247 $ 258 $ 735 $ 1,112 Finance lease expense: Amortization of right-of-use assets 4 4 11 13 Interest on lease liabilities 2 5 9 14 Total finance lease expense 6 9 20 27 Short-term lease expense 15 57 44 145 Total lease expense $ 268 $ 324 $ 799 $ 1,284 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 380 $ 317 $ 1,107 $ 2,312 Operating cash flows from finance leases 10 5 62 13 Financing cash flows from finance leases 2 51 8 152 Maturities of lease liabilities are as follows (in thousands): Years ending December 31, Operating Leases Finance Leases 2021 (excluding the nine months ended September 30, 2021) $ 285 $ 14 2022 1,254 47 2023 1,318 39 2024 1,348 23 2025 1,375 — Thereafter 6,870 — Total lease payments $ 12,450 $ 123 Less: Interest (3,976) (11) Present value of lease liabilities $ 8,474 $ 112 Supplemental balance sheet information related to leases is as follows (in thousands): September 30, 2021 December 31, 2020 Operating Leases Operating lease right-of-use assets $ 2,099 $ 2,320 Current portion of operating lease liabilities $ 586 $ 636 Long-term operating lease liabilities 7,888 8,348 Total operating lease liabilities $ 8,474 $ 8,984 Finance Leases Property and equipment $ 147 $ 147 Accumulated depreciation (33) (26) Property and equipment, net $ 114 $ 121 Current portion of finance lease liabilities $ 48 $ 60 Long-term finance lease liabilities 64 96 Total finance lease liabilities $ 112 $ 156 Weighted Average Remaining Lease Term Operating leases 9.1 years 9.9 years Finance leases 2.9 years 3.1 years Weighted Average Discount Rate Operating leases 8.9 % 8.9 % Finance leases 8.5 % 9.0 % |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt In April 2020, the Company received a $4.8 million loan under the PPP, which was created through the Coronavirus Aid, Relief, and Economic Act (“CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). In connection with the acquisition of JP3 in May 2020, the Company assumed a PPP loan of $0.9 million obtained by JP3 in April 2020. The PPP loans have a fixed interest rate of 1% and have a two-year term, maturing in 2022. No payments of principal or interest were required during the year ended December 31, 2020, or the three and nine months ended September 30, 2021. A portion of the loans may be eligible for forgiveness by the SBA depending on the extent of proceeds used for payroll costs and other designated expenses incurred for up to 24 weeks following loan origination, subject to adjustments for headcount reductions and compensation limits and provided that at least 60% of the eligible costs incurred are used for payroll. Receipt of these funds required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support ongoing operations of the Company. This certification further required the Company to take into account current business activity and the ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. During the second quarter of 2021, the Company applied for forgiveness on the PPP loans. The receipt of these funds, and the forgiveness of the loans attendant to these funds, is dependent on the Company having initially qualified for the loans and qualifying for the forgiveness of such loans based on our past and future adherence to the forgiveness criteria. The PPP loans are subject to any new guidance and new requirements released by the Department of the Treasury, which initially indicated that all companies that have received funds in excess of $2.0 million will be subject to audit by the SBA to further ensure PPP loans are limited to eligible borrowers in need. In June 2021, the Company received notice from the SBA that the JP3 PPP loan and accrued interest was fully forgiven. Accordingly, during the second quarter, the Company recorded $0.9 million in other income on the consolidated statement of operations. The Company has submitted to the SBA for partial forgiveness on the Flotek PPP loan but as of the date of this filing, no conclusion from the SBA have been reached. In October 2021, the Company received notice that a request to extend the Flotek PPP loan maturity date from April 15, 2022 to April 15, 2025 was confirmed. Prior to the extension approval, the $4.8 million Flotek PPP loan balance was classified as a current liability. The maturity date extension amendment occurred before the third quarter 2021 balance sheet was issued, therefore, $3.5 million was reclassified to long-term debt, reducing the current portion of long-term debt from $4.8 million to $1.3 million as of September 30, 2021. Long-term debt, including current portion, is as follows (in thousands): September 30, 2021 December 31, 2020 Flotek paycheck protection plan loan $ 4,788 $ 4,788 JP3 paycheck protection plan loan — 877 Total 4,788 5,665 Less current maturities (1,336) (4,048) Total long-term debt, net of current portion $ 3,452 $ 1,617 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement. • Level 1 — Quoted prices in active markets for identical assets or liabilities; • Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entity’s assumptions about the inputs. Fair Value of Other Financial Instruments The carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these accounts. The PPP loan for Flotek approximates fair value as of September 30, 2021. Subsequent to the third quarter balance sheet date, the Company received notice that a request to extend the Flotek PPP loan maturity date from April 15, 2022 to April 15, 2025 was confirmed. Additionally, u pon receipt of the SBA’s final decision on the Company’s reimbursement request to forgive the FTK PPP loan, any remaining balances not forgiven by the SBA will be measured on a recurring basis. Liabilities Measured at Fair Value on a Recurring Basis The following table presents the Company’s liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy (in thousands): Balance at September 30, Balance at December 31, Level 1 Level 2 Level 3 2021 Level 1 Level 2 Level 3 2020 Contingent consideration $ — $ — $ 715 $ 715 $ — $ — $ 1,416 $ 1,416 On September 30, 2021, and December 31, 2020, the estimated fair value of the remaining stock performance earn-out provision, with respect to the JP3 transaction, was recorded as a contingent liability. The estimated fair value of the earn-out provision at the end of each period was valued using the Monte Carlo model analyzing 20,000 simulations performed using Geometric Brownian Motion with inputs such as risk-neutral expected growth and volatility. There were no transfers in or out of either Level 1, Level 2, or Level 3 fair value measurements during the periods ending September 30, 2021 and December 31, 2020. Assets Measured at Fair Value on a Nonrecurring Basis The Company’s non-financial assets, including property and equipment, goodwill and other intangible assets, are measured at fair value on a non-recurring basis and are subject to fair value adjustment in certain circumstances. During the three months ended March 31, 2020, the Company recorded an impairment of $57.5 million for impairment of long-lived assets. Management inputs used in fair value measurements were classified as Level 3. During the three months ended September 30, 2020, the Company recorded additional impairment expenses of $12.5 million. Total impairment expenses recorded during the nine months ended September 30, 2020 was $70.0 million of long-lived and intangible assets. Management inputs used in fair value measurements were classified as Level 3. Level 3 Rollforward for Assets and Liabilities Measured at Fair Value on a Recurring Basis In conjunction with the May 2020 acquisition of JP3, the Company recorded contingent consideration of $1.2 million. Management inputs used in the fair value measurement were classified as Level 3. During 2020, the first stock performance target for the contingent consideration was achieved and settled. The Company estimated the fair value of the remaining stock performance earn-out provision at September 30, 2021, and decreased the estimated fair value of the contingent liability to $0.7 million. The Company records changes in the fair value of the contingent consideration and achievement of performance targets in operating expenses. The following table presents the changes in contingent consideration balances classified as Level 3 balances for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Balance - beginning of period $ 1,115 $ 1,200 $ 1,416 $ — Additions / issuances — — — 1,200 Change in fair value (400) 3,200 (701) 3,200 Transfer out of Level 3 — (2,500) — (2,500) Balance - end of period $ 715 $ 1,900 $ 715 $ 1,900 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 U.S. federal statutory tax rate 21.0 % 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit — 0.2 (0.2) 0.1 Non-U.S. income taxed at different rates 0.8 (0.2) 0.3 — Increase (reduction) in tax benefit related to stock-based awards (0.3) 0.1 1.2 — Non-deductible expenses 5.8 (0.1) 1.1 — Research and development credit — — — 0.1 Increase in valuation allowance (27.3) (20.8) (23.6) (17.9) Effect of tax rate differences of NOL carryback — — — 1.7 Effective income tax rate — % 0.2 % (0.2) % 5.0 % Fluctuations in effective tax rates have historically been impacted by permanent tax differences with no associated income tax impact, changes in state apportionment factors, including the effect on state deferred tax assets and liabilities, and non-U.S. income taxed at different rates, except for the NOL carryback claim. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Terpene Supply Agreement At December 31, 2020, the Company’s balance sheet included an accrued liability of $9.4 million associated with the terpene supply agreement with FCC and the Company’s expected usage of terpene in blended products being less than the minimum quantities of terpene required to be purchased and expected selling prices of the excess terpene as such loss was not considered recoverable. The Company calculated the liability based on the Company’s expected usage of terpene in blended products being less than the minimum quantities of terpene required to be purchased and expected selling prices of the excess terpene as such loss was not considered recoverable. On March 26, 2021, the Company and Flotek Chemistry, LLC (“Flotek Chemistry”), a wholly-owned subsidiary of the Company, filed a lawsuit against Archer-Daniels-Midland Company (“ADM”), Florida Chemical Company, LLC (“FCC”) and other parties in state court in Harris County, Texas. The lawsuit claims damages relating to the terpene supply agreement between Flotek Chemistry and FCC and related breaches of fiduciary duty. Contemporaneously with the filing of the suit, Flotek Chemistry delivered a notice of termination of the terpene supply agreement. Subsequent to the lawsuit described above, on April 5, 2021, ADM and FCC filed a lawsuit in the Delaware Court of Chancery seeking to enjoin the lawsuit filed in Texas and claiming damages under the terpene supply agreement and other matters. On October 29, 2021, the Company and Flotek Chemistry reached agreement with all parties resolving all claims between the parties.(“the ADM Settlement”) On or before January 3, 2022, Flotek will pay to ADM a one-time payment of $1.75 million and the terpene supply agreement is confirmed terminated, eliminating the prior obligation to purchase 10.5 million pounds of terpene through 2023. As a result of the third quarter 2021 recognition of the ADM Settlement, operating expenses (excluding depreciation and amortization) for the three and nine months ended September 31, 2021 benefited by $7.6 million, excluding legal fees. The Company is subject to other routine litigation and other claims that arise in the normal course of business. Except as disclosed above, management is not aware of any pending or threatened lawsuits or proceedings that are expected to have a material effect on the Company’s financial position, results of operations or liquidity. Other Commitments and Contingencies The Company is subject to concentrations of credit risk within trade accounts receivable, as the Company does not generally require collateral as support for trade receivables. In addition, the majority of the Company’s cash is invested in three major U.S. financial institutions and balances often exceed insurable amounts. |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ EquityDuring the first quarter 2021, the Company identified 0.6 million shares that were improperly included in the December 31, 2020 issued share count, and the Company adjusted the issued share count presented on the statement of stockholders’ equity. This adjustment was not material to the December 31, 2020 consolidated financial statements or basic and diluted earnings per share. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. The three months ended September 30, 2021 diluted earnings per common share included 851,702 common share equivalents. Potentially dilutive securities were excluded from the calculation of diluted loss per share for the nine months ended September 30, 2021 and for the three and nine months ended September 30, 2020, since including them would have an anti-dilutive effect on loss per share due to the net loss incurred during the periods. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information is as follows (in thousands): Nine months ended September 30, 2021 2020 Supplemental cash payment information: Interest paid $ 17 $ 20 Income taxes (received) paid (351) 5,927 Supplemental non-cash activities: Employee retention credit $ 2,851 $ — Supplemental non-cash investing and financing activities: Equity issued - acquisition of JP3 $ — $ 8,538 Under the provisions of the CARES Act, the Company is eligible for a refundable employee retention credit subject to certain criteria. In connection with the CARES Act, the Company adopted a policy to recognize the employee retention credit when earned and to offset the credit against the related payroll tax liability. Accordingly, the Company recorded a $1.9 million employee retention credit during the three months ended June 30, 2021 in other current assets with the offset recorded in accrued liabilities. In the second quarter of 2021, the Company used $0.8 million of the total employee retention credit leaving a $1.1 million credit to be applied against payroll tax liabilities. In the third quarter of 2021, the Company used $0.9 million of the total employee retention credit leaving a $1.9 million credit to be applied against payroll tax liabilities. |
Related Party Transaction
Related Party Transaction | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Related Party TransactionIn January 2017, the Internal Revenue Service (“IRS”) notified the Company that it was examining the Company’s federal tax returns for the year ended December 31, 2014. As a result of this examination, the IRS informed the Company on May 1, 2019, that certain employment taxes related to the compensation of our former CEO, Mr. Chisholm, were not properly withheld in 2014 and proposed an adjustment. Mr. Chisholm’s affiliated companies through which he provided his services have agreed to indemnify the Company for any such taxes, and Mr. Chisholm executed a personal guaranty in favor of the Company, supporting this indemnification. In October 2019, an amendment to the employment agreement of Mr. Chisholm was executed, giving the Company the contractual right of offset for any amounts owed to the Company, and giving the Company the right to withhold payments equal to amounts reasonably estimated to potentially become due to the Company by the affiliated companies from any amounts owed under the employment agreement. At December 31, 2019, the Company netted the related party receivable against the severance payable and recorded $1.8 million for potential liability to the IRS. On January 5, 2020, Mr. Chisholm ceased to be an employee of the Company. In September 2020, the Company informed Mr. Chisholm it would cease payment of future severance. During first quarter of 2020, an additional accrual was recorded for $0.2 million related to potential penalties and interest on the IRS obligation. As of September 30, 2021 and December 31, 2020, the receivable from Mr. Chisholm was $1.4 million, which equaled the payable to the IRS and netted with Mr. Chisholm’s severance liability. Both the IRS and severance liabilities are recorded in accrued liabilities on the consolidated balance sheet. Mr. Ted D. Brown has been a Director of the Company since November of 2013 and has been the President and CEO of Confluence Resources LP (“Customer”), a private oil and gas exploration and production company formed in 2016. The Company entered into a $1.3 million bill-and-hold agreement with the Customer during the third quarter of 2021. The agreement between the Company and Customer is a related party transaction. The Company’s board was informed prior to the transaction and subsequently ratified the transaction as being in the best interests of the Company. For the three and nine months ended September 30, 2021, the Company’s revenues for chemical sales to Confluence Resources LP was $1.3 million. As of September 30, 2021, the customer owes $1.3 million to the Company and transaction is recorded in account receivables on the consolidated balance sheet. |
Business Segment, Geographic an
Business Segment, Geographic and Major Customer Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Business Segment, Geographic and Major Customer Information | Business Segment, Geographic and Major Customer Information Segment Information Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision-maker in deciding how to allocate resources and assess performance. The operations of the Company are categorized into the following reportable segments: CT and DA. Chemistry Technologies. The CT segment includes green specialty chemistries, logistics and technology services, which enable its customers to pursue improved efficiencies and performance throughout the life cycle of their wells, helping customers improve their ESG and operational goals. The Company designs, develops, manufactures, packages, distributes, delivers and markets optimized fluid systems, including specialty and conventional chemistries, for use in oil and gas well drilling, cementing, completion, remediation and stimulation activities designed to maximize recovery in both new and mature fields, as well as to reduce health and environmental risk by utilization of greener chemicals. Customers of the CT segment include major integrated oil and gas companies, oilfield services companies, independent oil and gas companies, national and state-owned oil companies, and international supply chain management companies . In 2020, the Company leveraged historical expertise, existing infrastructure, personnel, supply chain, research and resident consumer market experience to address the emerging demand for disinfectants, surface cleaners, degreasers and solvents for industrial, commercial and consumer use. The Company produces Food and Drug Administration and Environmental Protection Agency compliant products its ISO 9001:2015 certified facility in Marlow, Oklahoma. Today the Company has a portfolio of specialty chemical products to address the long-term challenges in the janitorial and sanitization (JanSan), food service and adjacent markets . Data Analytics. The DA segment, created in the second quarter of 2020 in conjunction with the acquisition of JP3 on May 18, 2020, includes the design, development, production, sale and support of equipment and services that create and provide valuable information on the composition and properties of energy customers’ hydrocarbon fluids. The real-time information on hydrocarbon composition and properties helps customers generate additional profits by enhancing their operations including crude/condensates stabilization, blending, optimization of transmix, increasing efficiencies of gas processing plants, ensuring product quality while enabling automation of fluid handling and reducing losses through giveaways (i.e., that portion of a product of higher value than what is specified). The customers of the DA segment span across the entire oil and gas market, from upstream production to midstream facilities to refineries and distribution networks. The Company evaluates performance based upon a variety of criteria. The primary financial measure is segment operating income. Various functions, including certain sales and marketing activities and general and administrative activities, are provided centrally by the corporate office. Costs associated with corporate office functions, other corporate income and expense items, and income taxes are not allocated to the reportable segment. Summarized financial information of the reportable segments is as follows (in thousands): For the three months ended September 30, Chemistry Technologies Data Analytics (1) Corporate and Other Total 2021 Revenue from external customers $ 8,044 $ 803 $ — $ 8,847 Revenue from related party 1,332 — — 1,332 Income (loss) from operations, including impairment 4,399 (1,071) (2,696) 632 Depreciation and amortization 215 17 1 233 Additions to long-lived assets — — — — 2020 Revenue from external customers $ 12,083 $ 656 $ — $ 12,739 Revenue from related party — — — — Loss from operations, including impairment (8,880) (34,035) (2,679) (45,594) Depreciation and amortization 244 274 — 518 Additions to long-lived assets 906 — — 906 (1) The Company formed the Data Analytics segment in the second quarter of 2020 upon acquiring JP3. For the nine months ended September 30, Chemistry Technologies Data Analytics (1) Corporate and Other Total 2021 Revenue from external customers $ 26,033 $ 3,749 $ — $ 29,782 Revenue from related party 1,332 — — 1,332 Loss from operations, including impairment (3,009) (2,138) (9,926) $ (15,073) Depreciation and amortization 739 52 2 793 Additions to long-lived assets 31 — — 31 2020 Revenue from external customers $ 39,462 $ 1,573 $ — $ 41,035 Revenue from related party — — — — Loss from operations, including impairment (75,137) (35,185) (15,589) (125,911) Depreciation and amortization 2,300 405 472 3,177 Additions to long-lived assets 906 — — 906 (1) The Company formed the DA segment in the second quarter of 2020 upon acquiring JP3. Assets of the Company by reportable segments are as follows (in thousands): September 30, 2021 December 31, 2020 Chemistry Technologies $ 47,625 $ 43,346 Data Analytics 15,960 13,201 Corporate and Other 969 29,663 Total assets $ 64,554 $ 86,210 Geographic Information Revenue by country is based on the location where services are provided and products are used. No individual countries other than the U.S. and the United Arab Emirates (“UAE”) accounted for more than 10% of revenue. Revenue by geographic location is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 U.S. $ 8,094 $ 9,928 $ 24,624 $ 32,639 UAE 1,319 1,473 3,741 3,781 Other countries 766 1,338 2,749 4,615 Total revenue $ 10,179 $ 12,739 $ 31,114 $ 41,035 Long-lived assets held in countries other than the U.S. are not considered material to the consolidated financial statements. Major Customers* Revenue from major customers, as a percentage of consolidated revenue, is as follows (in thousands): For the three months ended September 30, Chemistry Technologies % of Total Revenue 2021 Customer D $ 3,041 29.9 % Customer E - Related party 1,332 13.1 % 2020 Customer D $ 4,632 36.2 % Customer C 2,088 16.4 % For the nine months ended September 30, Chemistry Technologies % of Total Revenue 2021 Customer D $ 7,701 24.8 % Customer C 4,067 13.1 % 2020 Customer C $ 10,412 25.4 % Customer D 8,117 19.8 % Customer A 3,631 8.9 % * DA customer did not account for more than 10% of revenue during this period. The majority of t he Company’s revenue is derived from its CT segment, which consists predominantly of customers within the oil and gas industry and the surface cleaner and disinfectant industry. Customers within the oil and gas industry include oilfield services companies, integrated oil and natural gas companies, independent oil and natural gas companies, and state-owned national oil companies. Customers within the surface cleaner and disinfectant industry typically include industrial and consumer markets, including hospitals, travel and hospitality, food services, e-commerce and retail, sports and entertainment. The concentration in the oil and gas industry increases credit and business risk . See Note 16, “Business Segment, Geographic and Major Customer Information,” for concentration of segment revenue from major customers. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We have evaluated the effects of events that have occurred subsequent to September 30, 2021, and there have been no material events that would require recognition in our third quarter 2021 consolidated financial statements or disclosure in the Notes to the consolidated financial statements, except that on October 28, 2021, the Company also received a confirmation approving a request to extend the maturity date of Flotek’s PPP loan maturity date from April 15, 2022 to April 15, 2025. Additionally on October 29, 2021, the Company and Flotek Chemistry reached an agreement with all parties resolving all claims between the parties. The ADM settlement agreement and the Flotek PPP loan maturity date extension approval were considered to be recognizable subsequent events under U.S. GAAP and required adjustment to our third quarter 2021 consolidated financial statements. See Note 11 - Commitments and Contingencies and Note 8 - Debt for additional information. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying unaudited financial statements reflect all adjustments, in the opinion of management, necessary for fair statement of the financial condition and results of operations for the periods presented. All such adjustments are normal and recurring in nature. The financial statements, including selected notes, have been prepared in accordance with applicable rules and regulations of the SEC regarding interim financial reporting and do not include all information and disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for comprehensive financial statement reporting. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from these estimates. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassifications did not impact previously reported net loss and stockholders’ equity. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”). We evaluate the applicability and impact of all authoritative guidance issued by the FASB. Guidance not listed below was assessed and determined to be either not applicable, clarifications of items listed below, immaterial or already adopted by the Company. New Accounting Standards Issued But Not Adopted as of September 30, 2021 The FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes .” This standard removes specific exceptions to the general principles in Topic 740. The pronouncement is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, with early adoption permitted for public companies for periods in which financial statements have not yet been issued. The Company has evaluated the impact of this standard and determined that there is no impact on the consolidated financial statements and related disclosures. The FASB issued ASU No. 2016-13, “ Measurement of Credit Losses on Financial Instruments .” This standard replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects estimates of expected credit losses over their contractual life that are recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. The pronouncement is effective for smaller reporting companies for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of this standard, including subsequent amendments, on the consolidated financial statements and related disclosures. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement. • Level 1 — Quoted prices in active markets for identical assets or liabilities; • Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — Significant unobservable inputs that are supported by little or no market activity or that are based on the reporting entity’s assumptions about the inputs. |
Earnings (Loss) Per Share | Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. The three months ended September 30, 2021 diluted earnings per common share included 851,702 common share equivalents. Potentially dilutive securities were excluded from the calculation of diluted loss per share for the nine months ended September 30, 2021 and for the three and nine months ended September 30, 2020, since including them would have an anti-dilutive effect on loss per share due to the net loss incurred during the periods. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision-maker in deciding how to allocate resources and assess performance. The operations of the Company are categorized into the following reportable segments: CT and DA. Chemistry Technologies. The CT segment includes green specialty chemistries, logistics and technology services, which enable its customers to pursue improved efficiencies and performance throughout the life cycle of their wells, helping customers improve their ESG and operational goals. The Company designs, develops, manufactures, packages, distributes, delivers and markets optimized fluid systems, including specialty and conventional chemistries, for use in oil and gas well drilling, cementing, completion, remediation and stimulation activities designed to maximize recovery in both new and mature fields, as well as to reduce health and environmental risk by utilization of greener chemicals. Customers of the CT segment include major integrated oil and gas companies, oilfield services companies, independent oil and gas companies, national and state-owned oil companies, and international supply chain management companies . In 2020, the Company leveraged historical expertise, existing infrastructure, personnel, supply chain, research and resident consumer market experience to address the emerging demand for disinfectants, surface cleaners, degreasers and solvents for industrial, commercial and consumer use. The Company produces Food and Drug Administration and Environmental Protection Agency compliant products its ISO 9001:2015 certified facility in Marlow, Oklahoma. Today the Company has a portfolio of specialty chemical products to address the long-term challenges in the janitorial and sanitization (JanSan), food service and adjacent markets . Data Analytics. The DA segment, created in the second quarter of 2020 in conjunction with the acquisition of JP3 on May 18, 2020, includes the design, development, production, sale and support of equipment and services that create and provide valuable information on the composition and properties of energy customers’ hydrocarbon fluids. The real-time information on hydrocarbon composition and properties helps customers generate additional profits by enhancing their operations including crude/condensates stabilization, blending, optimization of transmix, increasing efficiencies of gas processing plants, ensuring product quality while enabling automation of fluid handling and reducing losses through giveaways (i.e., that portion of a product of higher value than what is specified). The customers of the DA segment span across the entire oil and gas market, from upstream production to midstream facilities to refineries and distribution networks. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of business acquisitions, by acquisition | The following table summarizes the fair value of JP3’s assets acquired as of the closing date of May 18, 2020 (in thousands): Tradenames and trademarks $ 1,100 Technology and know-how 5,000 Customer lists 6,800 Inventories 7,100 Cash 604 Net working capital, net of cash and inventories (1,063) Fixed assets 426 Long-term debt assumed and other assets (liabilities) (893) Goodwill 17,522 Net assets acquired $ 36,596 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | Revenue disaggregated by revenue source is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Revenue: Products $ 9,494 $ 12,076 $ 29,017 $ 39,053 Services 685 663 2,097 1,982 $ 10,179 $ 12,739 $ 31,114 $ 41,035 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of components of inventory | Inventories are as follows (in thousands): September 30, 2021 December 31, 2020 Raw materials $ 6,025 $ 7,190 Finished goods 13,451 15,705 Inventories 19,476 22,895 Less reserve for excess and obsolete inventory (10,658) (11,058) Inventories, net $ 8,818 $ 11,837 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment are as follows (in thousands): September 30, 2021 December 31, 2020 Land $ 1,986 $ 2,415 Land improvements 861 867 Buildings and leasehold improvements 6,364 6,364 Machinery and equipment 7,753 7,760 Furniture and fixtures 649 649 Transportation equipment 1,043 1,190 Computer equipment and software 1,222 1,296 Property and equipment 19,878 20,541 Less accumulated depreciation (12,109) (11,454) Property and equipment, net $ 7,769 $ 9,087 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of components of lease expense and supplemental cash flow information | The components of lease expense and supplemental cash flow information are as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Operating lease expense $ 247 $ 258 $ 735 $ 1,112 Finance lease expense: Amortization of right-of-use assets 4 4 11 13 Interest on lease liabilities 2 5 9 14 Total finance lease expense 6 9 20 27 Short-term lease expense 15 57 44 145 Total lease expense $ 268 $ 324 $ 799 $ 1,284 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 380 $ 317 $ 1,107 $ 2,312 Operating cash flows from finance leases 10 5 62 13 Financing cash flows from finance leases 2 51 8 152 |
Schedule of maturities of lease liabilities | Maturities of lease liabilities are as follows (in thousands): Years ending December 31, Operating Leases Finance Leases 2021 (excluding the nine months ended September 30, 2021) $ 285 $ 14 2022 1,254 47 2023 1,318 39 2024 1,348 23 2025 1,375 — Thereafter 6,870 — Total lease payments $ 12,450 $ 123 Less: Interest (3,976) (11) Present value of lease liabilities $ 8,474 $ 112 |
Schedule of maturities of lease liabilities | Maturities of lease liabilities are as follows (in thousands): Years ending December 31, Operating Leases Finance Leases 2021 (excluding the nine months ended September 30, 2021) $ 285 $ 14 2022 1,254 47 2023 1,318 39 2024 1,348 23 2025 1,375 — Thereafter 6,870 — Total lease payments $ 12,450 $ 123 Less: Interest (3,976) (11) Present value of lease liabilities $ 8,474 $ 112 |
Schedule of supplemental balance sheet information | Supplemental balance sheet information related to leases is as follows (in thousands): September 30, 2021 December 31, 2020 Operating Leases Operating lease right-of-use assets $ 2,099 $ 2,320 Current portion of operating lease liabilities $ 586 $ 636 Long-term operating lease liabilities 7,888 8,348 Total operating lease liabilities $ 8,474 $ 8,984 Finance Leases Property and equipment $ 147 $ 147 Accumulated depreciation (33) (26) Property and equipment, net $ 114 $ 121 Current portion of finance lease liabilities $ 48 $ 60 Long-term finance lease liabilities 64 96 Total finance lease liabilities $ 112 $ 156 Weighted Average Remaining Lease Term Operating leases 9.1 years 9.9 years Finance leases 2.9 years 3.1 years Weighted Average Discount Rate Operating leases 8.9 % 8.9 % Finance leases 8.5 % 9.0 % |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt, including current portion, is as follows (in thousands): September 30, 2021 December 31, 2020 Flotek paycheck protection plan loan $ 4,788 $ 4,788 JP3 paycheck protection plan loan — 877 Total 4,788 5,665 Less current maturities (1,336) (4,048) Total long-term debt, net of current portion $ 3,452 $ 1,617 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements, recurring | The following table presents the Company’s liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy (in thousands): Balance at September 30, Balance at December 31, Level 1 Level 2 Level 3 2021 Level 1 Level 2 Level 3 2020 Contingent consideration $ — $ — $ 715 $ 715 $ — $ — $ 1,416 $ 1,416 |
Schedule of fair value, liabilities measured on recurring basis, unobservable input reconciliation | The following table presents the changes in contingent consideration balances classified as Level 3 balances for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Balance - beginning of period $ 1,115 $ 1,200 $ 1,416 $ — Additions / issuances — — — 1,200 Change in fair value (400) 3,200 (701) 3,200 Transfer out of Level 3 — (2,500) — (2,500) Balance - end of period $ 715 $ 1,900 $ 715 $ 1,900 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective income tax rate reconciliation | A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 U.S. federal statutory tax rate 21.0 % 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit — 0.2 (0.2) 0.1 Non-U.S. income taxed at different rates 0.8 (0.2) 0.3 — Increase (reduction) in tax benefit related to stock-based awards (0.3) 0.1 1.2 — Non-deductible expenses 5.8 (0.1) 1.1 — Research and development credit — — — 0.1 Increase in valuation allowance (27.3) (20.8) (23.6) (17.9) Effect of tax rate differences of NOL carryback — — — 1.7 Effective income tax rate — % 0.2 % (0.2) % 5.0 % |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flow information | Supplemental cash flow information is as follows (in thousands): Nine months ended September 30, 2021 2020 Supplemental cash payment information: Interest paid $ 17 $ 20 Income taxes (received) paid (351) 5,927 Supplemental non-cash activities: Employee retention credit $ 2,851 $ — Supplemental non-cash investing and financing activities: Equity issued - acquisition of JP3 $ — $ 8,538 Under the provisions of the CARES Act, the Company is eligible for a refundable employee retention credit subject to certain criteria. In connection with the CARES Act, the Company adopted a policy to recognize the employee retention credit when earned and to offset the credit against the related payroll tax liability. Accordingly, the Company recorded a $1.9 million employee retention credit during the three months ended June 30, 2021 in other current assets with the offset recorded in accrued liabilities. In the second quarter of 2021, the Company used $0.8 million of the total employee retention credit leaving a $1.1 million credit to be applied against payroll tax liabilities. In the third quarter of 2021, the Company used $0.9 million of the total employee retention credit leaving a $1.9 million credit to be applied against payroll tax liabilities. |
Business Segment, Geographic _2
Business Segment, Geographic and Major Customer Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Financial information regarding reportable segments | Summarized financial information of the reportable segments is as follows (in thousands): For the three months ended September 30, Chemistry Technologies Data Analytics (1) Corporate and Other Total 2021 Revenue from external customers $ 8,044 $ 803 $ — $ 8,847 Revenue from related party 1,332 — — 1,332 Income (loss) from operations, including impairment 4,399 (1,071) (2,696) 632 Depreciation and amortization 215 17 1 233 Additions to long-lived assets — — — — 2020 Revenue from external customers $ 12,083 $ 656 $ — $ 12,739 Revenue from related party — — — — Loss from operations, including impairment (8,880) (34,035) (2,679) (45,594) Depreciation and amortization 244 274 — 518 Additions to long-lived assets 906 — — 906 (1) The Company formed the Data Analytics segment in the second quarter of 2020 upon acquiring JP3. For the nine months ended September 30, Chemistry Technologies Data Analytics (1) Corporate and Other Total 2021 Revenue from external customers $ 26,033 $ 3,749 $ — $ 29,782 Revenue from related party 1,332 — — 1,332 Loss from operations, including impairment (3,009) (2,138) (9,926) $ (15,073) Depreciation and amortization 739 52 2 793 Additions to long-lived assets 31 — — 31 2020 Revenue from external customers $ 39,462 $ 1,573 $ — $ 41,035 Revenue from related party — — — — Loss from operations, including impairment (75,137) (35,185) (15,589) (125,911) Depreciation and amortization 2,300 405 472 3,177 Additions to long-lived assets 906 — — 906 (1) The Company formed the DA segment in the second quarter of 2020 upon acquiring JP3. Assets of the Company by reportable segments are as follows (in thousands): September 30, 2021 December 31, 2020 Chemistry Technologies $ 47,625 $ 43,346 Data Analytics 15,960 13,201 Corporate and Other 969 29,663 Total assets $ 64,554 $ 86,210 |
Schedule of Revenue by geographic location | Revenue by geographic location is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 U.S. $ 8,094 $ 9,928 $ 24,624 $ 32,639 UAE 1,319 1,473 3,741 3,781 Other countries 766 1,338 2,749 4,615 Total revenue $ 10,179 $ 12,739 $ 31,114 $ 41,035 |
Schedule of Revenue by major customers | Revenue from major customers, as a percentage of consolidated revenue, is as follows (in thousands): For the three months ended September 30, Chemistry Technologies % of Total Revenue 2021 Customer D $ 3,041 29.9 % Customer E - Related party 1,332 13.1 % 2020 Customer D $ 4,632 36.2 % Customer C 2,088 16.4 % For the nine months ended September 30, Chemistry Technologies % of Total Revenue 2021 Customer D $ 7,701 24.8 % Customer C 4,067 13.1 % 2020 Customer C $ 10,412 25.4 % Customer D 8,117 19.8 % Customer A 3,631 8.9 % * DA customer did not account for more than 10% of revenue during this period. |
Organization and Significant _3
Organization and Significant Accounting Policies (Details) | 3 Months Ended |
Jun. 30, 2020segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operation segments (segments) | 2 |
Business Acquisition - Narrativ
Business Acquisition - Narrative (Details) - JP3 Measurement, LLC $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Jun. 30, 2020USD ($)provision$ / sharesshares | |
Business Acquisition | |
Ownership (in percentage) | 100.00% |
Aggregate value of consideration paid | $ 36.6 |
Payments to acquire business | $ 25 |
Shares issued to acquire business (in shares) | shares | 11.5 |
Fair value of shares used as consideration | $ 8.5 |
Excess working capital assumed | 1.9 |
Contingent consideration | $ 1.2 |
Number of earn-out provisions (provisions) | provision | 2 |
Additional earn-out based on appreciation of Flotek’s share price | $ 5 |
First earn out provision threshold (usd per share) | $ / shares | $ 2 |
Second earn out provision threshold (usd per share) | $ / shares | $ 3 |
Business Acquisition - Net Asse
Business Acquisition - Net Assets Acquired (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | May 18, 2020 |
Assets acquired: | |||
Goodwill | $ 8,092 | $ 8,092 | |
JP3 Measurement, LLC | |||
Assets acquired: | |||
Inventories | $ 7,100 | ||
Cash | 604 | ||
Net working capital, net of cash and inventories | (1,063) | ||
Fixed assets | 426 | ||
Long-term debt assumed and other assets (liabilities) | (893) | ||
Goodwill | 17,522 | ||
Net assets acquired | 36,596 | ||
JP3 Measurement, LLC | Tradenames and trademarks | |||
Assets acquired: | |||
Intangible assets other than goodwill | 1,100 | ||
JP3 Measurement, LLC | Technology and know-how | |||
Assets acquired: | |||
Intangible assets other than goodwill | 5,000 | ||
JP3 Measurement, LLC | Customer lists | |||
Assets acquired: | |||
Intangible assets other than goodwill | $ 6,800 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||||
Product sales as a percentage of total revenue (in percentage) | 90.00% | 90.00% | 90.00% | 90.00% |
Disaggregation of Revenue | ||||
Total revenues | $ 10,179 | $ 12,739 | $ 31,114 | $ 41,035 |
Revenue from related party | 1,332 | 0 | 1,332 | 0 |
Products | ||||
Disaggregation of Revenue | ||||
Total revenues | 9,494 | 12,076 | 29,017 | 39,053 |
Services | ||||
Disaggregation of Revenue | ||||
Total revenues | $ 685 | $ 663 | $ 2,097 | $ 1,982 |
Inventories - Components of inv
Inventories - Components of inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,025 | $ 7,190 |
Finished goods | 13,451 | 15,705 |
Inventories | 19,476 | 22,895 |
Less reserve for excess and obsolete inventory | (10,658) | (11,058) |
Inventories, net | $ 8,818 | $ 11,837 |
Inventories - Narratives (Detai
Inventories - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Inventory | ||||
Inventory write-down | $ 687 | $ 10,465 | ||
Chemistry Technologies | ||||
Inventory | ||||
Inventory write-down | $ 100 | $ 5,900 | 500 | 2,000 |
Data Analytics | ||||
Inventory | ||||
Inventory write-down | $ 0 | $ 3,900 | $ 200 | $ 3,900 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Components of Property, Plant and Equipment | ||
Property and equipment | $ 19,878 | $ 20,541 |
Less accumulated depreciation | (12,109) | (11,454) |
Property and equipment, net | 7,769 | 9,087 |
Land | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 1,986 | 2,415 |
Land improvements | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 861 | 867 |
Buildings and leasehold improvements | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 6,364 | 6,364 |
Machinery and equipment | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 7,753 | 7,760 |
Furniture and fixtures | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 649 | 649 |
Transportation equipment | ||
Components of Property, Plant and Equipment | ||
Property and equipment | 1,043 | 1,190 |
Computer equipment and software | ||
Components of Property, Plant and Equipment | ||
Property and equipment | $ 1,222 | $ 1,296 |
Property and Equipment - Narrat
Property and Equipment - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 200 | $ 500 | $ 800 | $ 2,300 | ||
Property, Plant and Equipment | ||||||
Assets held for sale | 545 | 545 | $ 0 | |||
Property and equipment, net | $ 7,769 | $ 7,769 | $ 9,087 | |||
Adjustment | ||||||
Property, Plant and Equipment | ||||||
Assets held for sale | $ 500 | |||||
Property and equipment, net | $ (500) |
Leases - Narratives (Details)
Leases - Narratives (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($) | Aug. 31, 2021 | Jul. 31, 2021a | Dec. 31, 2020USD ($) | |
Lessee, Lease, Description | ||||||
Operating lease, right-of-use asset | $ 8,474,000 | $ 8,474,000 | $ 8,984,000 | |||
Operating lease liability | 2,099,000 | 2,099,000 | $ 2,320,000 | |||
Impairment of right-of-use assets | $ 0 | $ 7,400,000 | $ 0 | |||
Warehouse facility in Monahans, TX | ||||||
Lessee, Lease, Description | ||||||
Operating lease term | 5 years | |||||
Property In Waller, TX | Land | ||||||
Lessee, Lease, Description | ||||||
Area of Land | a | 15 | |||||
Property In Waller, TX | Building | ||||||
Lessee, Lease, Description | ||||||
Area of property (sqft.) | a | 38,000 | |||||
Adjustment | ||||||
Lessee, Lease, Description | ||||||
Operating lease, right-of-use asset | 6,200,000 | |||||
Operating lease liability | $ 6,200,000 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense and Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease expense | $ 247 | $ 258 | $ 735 | $ 1,112 |
Finance lease expense: | ||||
Amortization of right-of-use assets | 4 | 4 | 11 | 13 |
Interest on lease liabilities | 2 | 5 | 9 | 14 |
Total finance lease expense | 6 | 9 | 20 | 27 |
Short-term lease expense | 15 | 57 | 44 | 145 |
Total lease expense | 268 | 324 | 799 | 1,284 |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | 380 | 317 | 1,107 | 2,312 |
Operating cash flows from finance leases | 10 | 5 | 62 | 13 |
Financing cash flows from finance leases | $ 2 | $ 51 | $ 8 | $ 152 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Operating Leases | ||
2021 (excluding the nine months ended September 30, 2021) | $ 285 | |
2022 | 1,254 | |
2023 | 1,318 | |
2024 | 1,348 | |
2025 | 1,375 | |
Thereafter | 6,870 | |
Total lease payments | 12,450 | |
Less: Interest | (3,976) | |
Present value of lease liabilities | 8,474 | $ 8,984 |
Finance Leases | ||
2021 (excluding the nine months ended September 30, 2021) | 14 | |
2022 | 47 | |
2023 | 39 | |
2024 | 23 | |
2025 | 0 | |
Thereafter | 0 | |
Total lease payments | 123 | |
Less: Interest | (11) | |
Present value of lease liabilities | $ 112 | $ 156 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Operating Leases | ||
Operating lease right-of-use assets | $ 2,099 | $ 2,320 |
Current portion of operating lease liabilities | 586 | 636 |
Long-term operating lease liabilities | 7,888 | 8,348 |
Total operating lease liabilities | 8,474 | 8,984 |
Finance Leases | ||
Property and equipment | 147 | 147 |
Accumulated depreciation | (33) | (26) |
Property and equipment, net | 114 | 121 |
Current portion of finance lease liabilities | 48 | 60 |
Long-term finance lease liabilities | 64 | 96 |
Total finance lease liabilities | $ 112 | $ 156 |
Weighted Average Remaining Lease Term | ||
Operating leases (in years) | 9 years 1 month 6 days | 9 years 10 months 24 days |
Finance leases (in years) | 2 years 10 months 24 days | 3 years 1 month 6 days |
Weighted Average Discount Rate | ||
Operating leases (in percentage) | 8.90% | 8.90% |
Finance leases (in percentage) | 8.50% | 9.00% |
Debt - Narratives (Details)
Debt - Narratives (Details) - USD ($) $ in Thousands | May 18, 2020 | Apr. 30, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 29, 2021 | Dec. 31, 2020 |
Debt Instrument | |||||||||
Other income | $ 0 | $ 900 | $ 0 | $ 881 | $ 0 | ||||
Current liability | 17,767 | 17,767 | $ 28,861 | ||||||
Long-term debt, less current portion | 3,452 | 3,452 | 1,617 | ||||||
Current portion of long-term debt | 1,336 | 1,336 | 4,048 | ||||||
Unsecured Debt | |||||||||
Debt Instrument | |||||||||
Long-term debt, less current portion | 3,452 | 3,452 | 1,617 | ||||||
Long-term debt | 4,788 | 4,788 | 5,665 | ||||||
Current portion of long-term debt | 1,336 | 1,336 | 4,048 | ||||||
Unsecured Debt | Flotek PPP loan | |||||||||
Debt Instrument | |||||||||
Proceeds from debt | $ 4,800 | ||||||||
Debt instrument stated interest rate (percent) | 1.00% | ||||||||
Debt instrument term (years) | 2 years | ||||||||
Percentage of cost allocable to payroll costs (percent) | 60.00% | ||||||||
Current liability | $ 4,800 | ||||||||
Long-term debt, less current portion | 3,500 | 3,500 | |||||||
Long-term debt | 4,788 | 4,788 | $ 4,788 | ||||||
Current portion of long-term debt | $ 1,300 | $ 1,300 | |||||||
JP3 Measurement, LLC | |||||||||
Debt Instrument | |||||||||
Assumed PPP loan | $ 900 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument | ||
Less current maturities | $ (1,336) | $ (4,048) |
Long-term debt | 3,452 | 1,617 |
Unsecured Debt | ||
Debt Instrument | ||
Total | 4,788 | 5,665 |
Less current maturities | (1,336) | (4,048) |
Long-term debt | 3,452 | 1,617 |
Unsecured Debt | Flotek paycheck protection plan loan | ||
Debt Instrument | ||
Total | 4,788 | 4,788 |
Less current maturities | (1,300) | |
Long-term debt | 3,500 | |
Unsecured Debt | JP3 paycheck protection plan loan | ||
Debt Instrument | ||
Total | $ 0 | $ 877 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring | ||
Contingent consideration | $ 715 | $ 1,416 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring | ||
Contingent consideration | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring | ||
Contingent consideration | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring | ||
Contingent consideration | $ 715 | $ 1,416 |
Fair Value Measurements - Narra
Fair Value Measurements - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | May 31, 2020 | |
JP3 Measurement, LLC | |||||||
Assets Measured at Fair Value on a Nonrecurring Basis | |||||||
Contingent consideration | $ 1,200 | ||||||
JP3 Measurement, LLC | Level 3 | |||||||
Assets Measured at Fair Value on a Nonrecurring Basis | |||||||
Contingent consideration | $ 1,200 | ||||||
Nonrecurring | |||||||
Assets Measured at Fair Value on a Nonrecurring Basis | |||||||
Impairment of fixed and long-lived assets | $ 12,500 | $ 57,500 | $ 70,000 | ||||
Recurring | |||||||
Assets Measured at Fair Value on a Nonrecurring Basis | |||||||
Contingent consideration | $ 715 | $ 1,416 | |||||
Recurring | Level 3 | |||||||
Assets Measured at Fair Value on a Nonrecurring Basis | |||||||
Contingent consideration | $ 715 | $ 1,416 |
Fair Value Measurements - Rollf
Fair Value Measurements - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||
Balance - beginning of period | $ 1,115 | $ 1,200 | $ 1,416 | $ 0 |
Additions / issuances | 0 | 0 | 0 | 1,200 |
Change in fair value | (400) | 3,200 | (701) | 3,200 |
Transfer out of Level 3 | 0 | (2,500) | 0 | (2,500) |
Balance - end of period | $ 715 | $ 1,900 | $ 715 | $ 1,900 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Rate (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
U.S. federal statutory tax rate | 21.00% | 21.00% | 21.00% | 21.00% |
State income taxes, net of federal benefit | 0.00% | 0.20% | (0.20%) | 0.10% |
Non-U.S. income taxed at different rates | 0.80% | (0.20%) | 0.30% | 0.00% |
Increase (reduction) in tax benefit related to stock-based awards | (0.30%) | 0.10% | 1.20% | 0.00% |
Non-deductible expenses | 5.80% | (0.10%) | 1.10% | 0.00% |
Research and development credit | 0.00% | 0.00% | 0.00% | 0.10% |
Increase in valuation allowance | (27.30%) | (20.80%) | (23.60%) | (17.90%) |
Effect of tax rate differences of NOL carryback | 0.00% | 0.00% | 0.00% | 1.70% |
Effective income tax rate | 0.00% | 0.20% | (0.20%) | 5.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Oct. 29, 2021USD ($)terpene | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Other Commitments | ||||||
Operating expenses (excluding depreciation and amortization) | $ 5,418 | $ 29,466 | $ 31,330 | $ 63,939 | ||
Terpene Supply Agreement | ||||||
Other Commitments | ||||||
Operating expenses (excluding depreciation and amortization) | $ 7,600 | $ 7,600 | ||||
Subsequent Event | Terpene Supply Agreement | ||||||
Other Commitments | ||||||
Litigation settlement, amount due to other party | $ 1,750 | |||||
Subsequent Event | Terpene Supply Agreement | Adjustment | ||||||
Other Commitments | ||||||
Reduction of purchase commitment to purchase terpene | terpene | 10,500,000 | |||||
Terpene Supply Agreement | ||||||
Other Commitments | ||||||
Accrued liabilities | $ 9,400 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2021shares | |
Equity [Abstract] | |
Other (shares) | 0.6 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) | 3 Months Ended |
Sep. 30, 2021shares | |
Earnings Per Share [Abstract] | |
Weighted average dilutive securities (in shares) | 851,702 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Supplemental cash payment information: | ||
Interest paid | $ 17 | $ 20 |
Income taxes (received) paid | (351) | 5,927 |
Supplemental non-cash activities: | ||
Employee retention credit | 2,851 | 0 |
Supplemental non-cash investing and financing activities: | ||
Equity issued - acquisition of JP3 | $ 0 | $ 8,538 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2021 | Jun. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | ||
Employee retention credit | $ 1.9 | |
Employee retention expense | $ 0.9 | 0.8 |
Employee retention credit available | $ 1.9 | $ 1.1 |
Related Party Transaction (Deta
Related Party Transaction (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction | |||||||
Accrual for potential penalties and interest | $ 200 | ||||||
Revenue from related party | $ 1,332 | $ 0 | $ 1,332 | $ 0 | |||
Confluence Resources LP | |||||||
Related Party Transaction | |||||||
Due from related party | 1,300 | 1,300 | |||||
Revenue from related party | 1,300 | 1,300 | |||||
Chief Executive Officer | Confluence Resources LP | |||||||
Related Party Transaction | |||||||
Amounts of transaction | 1,300 | ||||||
Chief Executive Officer | Affiliated Entity | |||||||
Related Party Transaction | |||||||
Due from related party | $ 1,400 | $ 1,400 | $ 1,400 | $ 1,800 |
Business Segment, Geographic _3
Business Segment, Geographic and Major Customer Information - Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Summarized financial information regarding reportable segments | ||||
Revenue from external customers | $ 8,847 | $ 12,739 | $ 29,782 | $ 41,035 |
Revenue from related party | 1,332 | 0 | 1,332 | 0 |
Income (loss) from operations, including impairment | 632 | (45,594) | (15,073) | (125,911) |
Depreciation and amortization | 233 | 518 | 793 | 3,177 |
Additions to long-lived assets | 0 | 906 | 31 | 906 |
Operating Segments | Chemistry Technologies | ||||
Summarized financial information regarding reportable segments | ||||
Revenue from external customers | 8,044 | 12,083 | 26,033 | 39,462 |
Revenue from related party | 1,332 | 0 | 1,332 | 0 |
Income (loss) from operations, including impairment | 4,399 | (8,880) | (3,009) | (75,137) |
Depreciation and amortization | 215 | 244 | 739 | 2,300 |
Additions to long-lived assets | 0 | 906 | 31 | 906 |
Operating Segments | Data Analytics | ||||
Summarized financial information regarding reportable segments | ||||
Revenue from external customers | 803 | 656 | 3,749 | 1,573 |
Revenue from related party | 0 | 0 | 0 | 0 |
Income (loss) from operations, including impairment | (1,071) | (34,035) | (2,138) | (35,185) |
Depreciation and amortization | 17 | 274 | 52 | 405 |
Additions to long-lived assets | 0 | 0 | 0 | 0 |
Corporate and Other | ||||
Summarized financial information regarding reportable segments | ||||
Revenue from external customers | 0 | 0 | 0 | 0 |
Revenue from related party | 0 | 0 | 0 | 0 |
Income (loss) from operations, including impairment | (2,696) | (2,679) | (9,926) | (15,589) |
Depreciation and amortization | 1 | 0 | 2 | 472 |
Additions to long-lived assets | $ 0 | $ 0 | $ 0 | $ 0 |
Business Segment, Geographic _4
Business Segment, Geographic and Major Customer Information - Assets by Reportable Segments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Segment Reporting Information | ||
Total assets | $ 64,554 | $ 86,210 |
Operating Segments | Chemistry Technologies | ||
Segment Reporting Information | ||
Total assets | 47,625 | 43,346 |
Operating Segments | Data Analytics | ||
Segment Reporting Information | ||
Total assets | 15,960 | 13,201 |
Corporate and Other | ||
Segment Reporting Information | ||
Total assets | $ 969 | $ 29,663 |
Business Segment, Geographic _5
Business Segment, Geographic and Major Customer Information - Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues from External Customers and Long-Lived Assets | ||||
Total revenues | $ 10,179 | $ 12,739 | $ 31,114 | $ 41,035 |
U.S. | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Total revenues | 8,094 | 9,928 | 24,624 | 32,639 |
UAE | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Total revenues | 1,319 | 1,473 | 3,741 | 3,781 |
Other countries | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Total revenues | $ 766 | $ 1,338 | $ 2,749 | $ 4,615 |
Business Segment, Geographic _6
Business Segment, Geographic and Major Customer Information - Major Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information | ||||
Revenue from external customers | $ 8,847 | $ 12,739 | $ 29,782 | $ 41,035 |
Revenue from related party | 1,332 | 0 | 1,332 | 0 |
Customer Concentration Risk | Sales | Customer D | Chemistry Technologies | ||||
Segment Reporting Information | ||||
Revenue from external customers | $ 3,041 | $ 4,632 | $ 7,701 | $ 8,117 |
Percentage of revenue by major customers (in percentage) | 29.90% | 36.20% | 24.80% | 19.80% |
Customer Concentration Risk | Sales | Customer E - Related party | Chemistry Technologies | ||||
Segment Reporting Information | ||||
Revenue from related party | $ 1,332 | |||
Percentage of revenue by major customers (in percentage) | 13.10% | |||
Customer Concentration Risk | Sales | Customer C | Chemistry Technologies | ||||
Segment Reporting Information | ||||
Revenue from external customers | $ 2,088 | $ 4,067 | $ 10,412 | |
Percentage of revenue by major customers (in percentage) | 16.40% | 13.10% | 25.40% | |
Customer Concentration Risk | Sales | Customer A | Chemistry Technologies | ||||
Segment Reporting Information | ||||
Revenue from external customers | $ 3,631 | |||
Percentage of revenue by major customers (in percentage) | 8.90% |