Flotek Industries (FTK) risk factors, FY2024 10-K

Risks Related to the Company’s Business

1. 01Volatile commodity prices could adversely impact the activity levels of the Company’s customers
2. 02The Company’s reliance on the ProFrac Agreement could adversely impact our financial condition, results of operations and cash flows
3. 03The Company’s inability to develop and/or introduce new products or differentiate existing products could have an adverse effect on its ability to be responsive to customers’ needs and could result in a loss of customers, as well as adversely affecting the Company’s future success and profitability
4. 04The Company’s business, financial condition, operating results and ability to grow and compete may be affected adversely if adequate capital is not available
5. 05Increased competition could exert downward pressure on prices charged for the Company’s products and services
6. 06If the Company is unable to adequately protect intellectual property rights or is found to infringe upon the intellectual property rights of others, or is unable to maintain the registrations and certifications of its products and facilities, the Company’s business is likely to be adversely affected
7. 07The loss of key customers could have an adverse impact on the Company’s results of operations and could result in a decline in the Company’s revenue
8. 08Loss of key suppliers, the inability to secure raw materials on a timely basis, or the Company’s inability to pass commodity price increases on to its customers could have a material adverse effect on the Company’s ability to service its customers’ needs and could result in a significant loss of customers
9. 09Furthermore, if key suppliers were to experience significant cash flow constraints or become insolvent, a reduction or interruption in supplies or a significant increase in the price of supplies could occur, adversely impacting the Company’s results of operations and cash flows
10. 10The new Trump Administration may make substantial changes to fiscal, tax, and international trade policies that may adversely affect our business, financial condition, and results of operations
11. 11Failure to collect for goods and services sold to key customers could have an adverse effect on the Company’s financial results, liquidity and cash flows
12. 12Cyberattacks may have a significant and adverse impact on the Company’s operations and related financial condition
13. 13Unforeseen contingencies such as litigation could adversely affect the Company’s financial condition
14. 14The Company’s current insurance policies may not adequately protect the Company’s business from all potential risks
15. 15If the Company does not manage the potential difficulties associated with expansion successfully, the Company’s operating results could be adversely affected
16. 16The Company may pursue strategic acquisitions, joint ventures and strategic divestitures, which could have an adverse impact on the Company’s business
17. 17The Company’s ability to use net operating losses and tax attribute carryforwards to offset future taxable income became limited due to an “ownership change” in 2023
18. 18The Company is subject to complex foreign, federal, state and local environmental, health, and safety laws and regulations, which expose the Company to liabilities that could adversely affect the Company’s business, financial condition, and results of operations
19. 19The Company and the Company’s customers are subject to risks associated with doing business outside of the U.S., including political risk, foreign exchange risk, and other uncertainties
20. 20Regulatory pressures, environmental activism, and legislation could result in reduced demand for the Company’s products and services, increase the Company’s costs, and adversely affect the Company’s business, financial condition and results of operations
21. 21Changes in laws and regulations relating to hydraulic fracturing may have a negative effect on the Company’s operations

Risks Related to the Company’s Industry

1. 22General economic declines or recessions, limits to credit availability, and industry specific factors could have an adverse effect on energy industry activity resulting in lower demand for the Company’s products and services
2. 23A continuous period of swings in oil and natural gas prices could result in further reductions in demand for the Company’s products and services and adversely affect the Company’s business, financial condition, and results of operations
3. 24The Company’s industry has a high rate of employee turnover. Difficulty attracting or retaining personnel or agents could adversely affect the Company’s business
4. 25Our DA segment may be negatively affected by government regulations
5. 26Severe weather could have an adverse impact on the Company’s business
6. 27A terrorist attack or armed conflict could harm the Company’s business

Risks Related to the Company’s Securities

1. 28The market price of the Company’s common stock has been and may continue to be volatile
2. 29The Company’s common stock is thinly traded; therefore, our stock price may fluctuate more than the stock market as a whole and it may be difficult to sell large numbers of our shares at prevailing trading prices
3. 30The Company’s relationship with ProFrac Services, LLC and certain of its affiliates may create a conflict of interest
4. 31If the Company cannot meet the New York Stock Exchange (“NYSE”) continued listing requirements, the NYSE may delist the Company’s common stock
5. 32Future issuance of additional shares of common stock could cause dilution of ownership interests and adversely affect the Company’s common stock price
6. 33The Company may issue a substantial amount of securities in connection with future acquisitions, and the sale of those securities could adversely affect the trading price of our common stock or other securities
7. 34The Company may issue shares of preferred stock or debt securities with greater rights than the Company’s common stock
8. 35Certain anti-takeover provisions of the Company’s certificate of incorporation and applicable Delaware law could discourage or prevent others from acquiring the Company, which may adversely affect the market price of the Company’s common stock
9. 36The Company has no current plans to pay dividends on the Company’s common stock, and, therefore, investors will have to look to stock appreciation for return on investments
10. 37If the Company loses the services of key members of management, the Company may not be able to manage operations and implement growth strategies
11. 38Disclaimer of Obligation to Update