Flotek Industries (FTK) risk factors, FY2025 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 and Lease Agreement, both with affiliates of ProFrac, could adversely impact our financial condition, results of operations and cash flows54% rewritten
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 available25% rewritten
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 revenue23% rewritten
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. 10Changes in U.S. trade policy and the impact of tariffs may have a material adverse effect on our business and results of operationsNew
11. 11our returns on investment. Higher materials costs could also diminish our ability to develop new products at acceptable returns, particularly during times of economic uncertainty, and limit our ability to pursue growth opportunitiesNew
12. 12Failure 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
13. 13Cyberattacks may have a significant and adverse impact on the Company’s operations and related financial condition
14. 14Our business is subject to complex and evolving laws and regulations regarding data privacy and cybersecurityNew
15. 15Unforeseen contingencies such as litigation could adversely affect the Company’s financial condition
16. 16The Company’s current insurance policies may not adequately protect the Company’s business from all potential risks
17. 17If the Company does not manage the potential difficulties associated with expansion successfully, the Company’s operating results could be adversely affected
18. 18The Company may pursue strategic acquisitions, joint ventures and strategic divestitures, which could have an adverse impact on the Company’s business
19. 19The 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
20. 20The 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
21. 21The 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
22. 22If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impairedNew
23. 23Regulatory 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
24. 24Changes 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. 25General 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. 26A 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. 27The 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. 28Our DA segment may be negatively affected by government regulations
5. 29Severe weather could have an adverse impact on the Company’s business
6. 30A terrorist attack or armed conflict could harm the Company’s business

Risks Related to the Company’s Securities

1. 31The market price of the Company’s common stock has been and may continue to be volatile
2. 32The 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. 33The Company’s relationship with ProFrac Services and ProFrac GDM and certain of their affiliates may create a conflict of interest51% rewritten
4. 34Future issuance of additional shares of common stock could cause dilution of ownership interests and adversely affect the Company’s common stock price
5. 35The 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
6. 36The Company may issue shares of preferred stock or debt securities with greater rights than the Company’s common stock
7. 37Certain 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
8. 38The 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
9. 39If the Company loses the services of key members of management, the Company may not be able to manage operations and implement growth strategies
10. 40Disclaimer of Obligation to Update