The following discussion should be read in conjunction with the 2025 Annual Report and the unaudited condensed consolidated financial statements and accompanying notes included herein. Comparative segment revenues and related financial information are discussed herein and are presented in Note 17 to our unaudited condensed consolidated financial statements. See “Forward-Looking Statements” in this Quarterly Report and “Risk Factors” included in our filings with the SEC, including our Quarterly Reports on Form 10-Q and our 2025 Annual Report, for a description of important factors that could cause actual results to differ from expected results. Our historical financial information may not be indicative of our future performance. Executive Summary Flotek strives to be the collaborative partner of choice for solutions that reduce the environmental impact of energy on air, water, land and people. An advanced technology-driven, chemical and data analytics company, Flotek seeks to provide unique and innovative solutions to its customers in both the domestic and international energy markets. The Company is committed to delivering products and services that endeavor to maximize customer returns by leveraging chemistry as the common value creation platform. The Company has two operating segments, Chemistry Technologies (“CT”) and Data Analytics (“DA”), which are both supported by the Company’s continuing Research and Innovation (“R&I”) advanced laboratory capabilities. Recent Events On March 3, 2026, the Company announced that it had been awarded its first contract to deliver power services for utilities infrastructure support. Under the agreement, the Company expects to coordinate the installation of up to 50 megawatts (“MW”) of power generation equipment including the Company’s gas distribution and conditioning assets to support critical federal disaster recovery initiatives (the “Utility Support Contract”). The initial term of the Utility Support Contract is for six months, with customer option to extend to four years. During the three and six months ended June 30, 2026, the Company recorded $5.9 million and $6.6 million, respectively, in revenue related to the Utility Support Contract. Initial power generation under the Utility Support Contract has been paused due to infrastructure delays. The Company and the customer are evaluating options to extend the Utility Support Contract beyond the initial term, but there is no assurance that the Utility Support Contract will be extended or that the delays will be resolved. On March 12, 2026, the Company and ProFrac Holding Corp (“ProFrac”) entered into an agreement (as amended, the “OSP Agreement”) regarding the settlement of 2025 Contract Shortfall Fees payable to the Company under the ProFrac Agreement for the measurement period of January 1, 2025 to December 31, 2025. The OSP Agreement provides for the payment of an aggregate of $19.7 million of consideration (which amount represents $27.4 million of 2025 Contract Shortfall Fees, net of a $7.2 million offset against the 2025 Contract Shortfall Fee (the “OSP Offset”) amount due under the ProFrac Agreement and other minor adjustments) to the Company as follows: $7.2 million to be paid in cash and $12.5 million to be satisfied through an equipment construction and rental credit (the “Equipment Credit”). Under the OSP Agreement, the Company has committed to purchase and/or rent $12.5 million of equipment from ProFrac to be used for opportunities within the DA segment, with the costs of such equipment to be offset by the Equipment Credit. Pursuant to the OSP Agreement, during the first quarter of 2026, the Company received $5 million in cash and utilized $0.7 million of the Equipment Credit. The Company received the remaining $2.2 million in cash in April 2026 and utilized $2.3 million of the Equipment Credit during the second quarter of 2026. The Company expects to utilize the remaining Equipment Credit during the second half of 2026, however any unused amounts would be available for use in 2027 until the full credit is utilized. On July 31, 2026, the Company was notified by the Puerto Rico Electric Power Authority (“PREPA”), the electric utility for the Commonwealth of Puerto Rico, that the Company had been awarded a 10-year contract to support natural gas-fired grid enhancement initiatives for PREPA (the “PREPA Contract”). Under the PREPA Contract, the Company is providing its proprietary PWRtek platform, including up to 40 MW of primary power generation capacity and up to six pairs of smart conditioning and distribution skids. At full deployment, annual revenue is expected to total approximately $40 million, with a potential 10-year revenue backlog of approximately $400 million. Support equipment is expected to begin deployment in the fourth quarter of 2026, with the initial power generation equipment and conditioning and distribution skids expected by the end of the first quarter of 2027. 29 Company Overview Chemistry Technologies The Company’s CT segment provides sustainable, optimized chemistry solutions that we believe maximize our customers’ value by improving return on invested capital, lowering operational costs and providing tangible environmental benefits. The Company’s proprietary chemistries, specialty chemistries, logistics and technology services seek to enable our customers to pursue improved efficiencies and performance throughout the life cycle of their desired chemical applications program. The Company designs, develops, manufactures, packages, distributes and markets optimized chemistry solutions that are designed to accelerate existing sustainability practices to reduce the environmental impact of energy on the air, water, land and people. Customers of the CT segment include energy-related companies, such as our related party ProFrac Services, LLC (“ProFrac Services”), with whom we have a long-term chemistry supply agreement, as well as industrial companies. Major integrated oil and gas companies, oilfield services companies, independent oil and gas companies, national and state-owned oil companies, geothermal energy companies, solar energy companies and advanced alternative energy companies may benefit from our best-in-class technology, field operations, and continuous improvement exercises that go beyond existing sustainability practices. ProFrac Supply Agreement On February 2, 2022, the Company entered into a Chemical Products Supply Agreement with ProFrac Services, which was subsequently amended on May 17, 2022 and February 1, 2023 (as amended, the “ProFrac Agreement”). The ProFrac Agreement contains minimum requirements for chemistry purchases. If the minimum volume purchases are not achieved within the applicable measurement period, ProFrac Services is required to pay to the Company, as liquidated damages, an amount equal to twenty-five percent (25%) of the difference between (i) the aggregate purchase price of the quantity of products comprising the minimum purchase obligation and (ii) the actual purchased volume during the measurement period (“Contract Shortfall Fees”). The measurement period for Contract Shortfall Fees during 2025 was January 1, 2025 through December 31, 2025. Related party revenues for the six months ended June 30, 2025 reflect Contract Shortfall Fees of $15.2 million. The current measurement period for Contract Shortfall Fees is January 1, 2026 through December 31, 2026. The Company does not expect that the minimum purchase requirements will be met during the current measurement period, and as a result, related party revenues for the six months ended June 30, 2026 reflect Contract Shortfall Fees of $3.9 million. Data Analytics The Company’s Data Analytics (“DA”) segment delivers real-time information and insights to its customers designed to enable optimization of operations and reduction of emissions and their carbon intensity. The Company’s technologies are founded upon an industry leading field-deployable, in-line optical near-infrared spectrometer that measures the quality, quantity and composition of hydrocarbon flows. The instrument’s response is processed with advanced chemometrics modeling, artificial intelligence and machine learning algorithms to deliver valuable insights to our customers every 5-15 seconds. The DA segment generates revenues through a combination of short and long-term equipment rentals (service revenue) and capital sales (product revenue). Customers of the DA segment span across the oil and gas industry, including oil and gas supermajors, some of the largest midstream oil and gas companies, large gas processing plants, independent exploration and production companies and oil field service companies that provide hydraulic fracturing services. We believe customers using our technology may obtain significant benefits, including additional profits, by enhancing operations in crude/condensates stabilization, enhancing blending operations, reducing time impacting transmix operations and increasing efficiencies and optimization of gas plants. The DA segment has expanded its presence in providing mobile power generation solutions which facilitates the use of significantly lower-cost field gas, as a replacement to diesel, to generate power, lower emissions and protect equipment through the continuous measurement of gas quality. Research & Innovation R&I supports both our business segments through chemistry formulation, specialty chemical formulations and EPA regulatory guidance, technical support, basin and reservoir studies, data analytics and new technology projects. The purpose of R&I is to supply the Company’s business segments with enhanced products and services that generate current and future revenues, while advising Company management on opportunities concerning technology, environmental and industry trends. The R&I facilities support advances in CT and DA segment performance, optimization and manufacturing. For each of the three months ended June 30, 2026 and 2025, the Company incurred $0.5 million of research and development expense. For the six months ended June 30, 2026 and 2025, the Company incurred $0.9 million and $0.8 million, respectively, of research and development expense. The Company expects that its 2026 research and development investments will continue to support new product development, especially in support of enhanced environmental demands and customization initiatives for its clients. 30 Outlook Our business is subject to numerous variables that impact our outlook and expectations given the shifting conditions of the oil and gas industry. Revenue during the six months ended June 30, 2026 increased 49% as compared to the 2025 period. We expect to grow revenues from the CT and DA segments through the remainder of 2026, as compared to 2025. Our outlook is based upon market conditions we perceive today. The oil and gas industry is highly cyclical. Energy Industry The demand for oil and gas and related services fluctuates due to numerous factors including weather and macroeconomic and geopolitical conditions. Despite the near-term volatility in commodity pricing, partially attributable to the ongoing conflicts in the Middle East and numerous supply and demand factors, we believe the fundamentals for energy-related services remain stable. Independent exploration and production companies operate the majority of U.S. land rigs and react quickly to changing commodity prices. In the current commodity price environment, we generally expect these companies, as well as major exploration and production companies, to maintain current activity levels over the next 12 months. We are continuing to monitor developments with respect to the ongoing military conflicts in the region including the impact on global commodity prices, potential shipping and logistics disruptions as well as the impact to the cost of certain raw materials. Chemistry Technologies The CT segment is actively advancing integrated solutions to enhance capital efficiency for exploration and production (“E&P”) operators and service companies. Our approach combines technical leadership, exceptional service quality, reliable delivery and a strong safety record. We believe that we have optimized service delivery across key North American basins and are well-positioned to adapt to fluctuations in activity levels. Revenues from the CT segment during the first half of 2026 increased 33% as compared to the first half of 2025. Based upon our results during the first half of 2026, and customer commitments, we anticipate stable demand for our chemistry during the remainder of 2026. Our expectations are in part based upon our current outlook on oil and gas prices, as well as an assumption that the scope of the ongoing conflicts in the Middle East does not materially expand. As a result of the continued growth in the exportation of natural gas, as well as the increased utilization of natural gas to generate electricity, we expect the demand for natural gas to continue to increase over the next twelve to thirty-six months. Higher natural gas prices would likely increase activity in the Haynesville shale basin, an area where we expect our established presence, expertise and capabilities could provide growth. Internationally, we are seeing an increase in unconventional activity in the Middle East and Argentina, where we expect demand for our chemistry to grow throughout 2026. During the first half of 2026, revenue from international customers totaled $12.3 million as compared to $7.8 million during the first half of 2025. Our outlook for growth in the Middle East could be impacted by the ongoing military conflicts. We remain focused on driving innovation between the CT and DA segments, promoting opportunities in upstream applications designed to deliver enhanced efficiencies for E&P operators and service companies. We believe that these initiatives will lead to deeper integration between our CT and DA segments, creating a pathway for future growth. Data Analytics The use of data and digital analytics is a growing trend in industries where technology is leveraged to analyze large operational datasets to improve performance, as well as for predictive maintenance, advanced safety measures and reduction in the environmental impact of operations. We believe our suite of measurement technologies including the VERACAL®,Verax™, XSPCTTM and Raman analyzers have gained a foothold in North American markets for critical applications where compositional information is needed in real-time. These technologies deliver insight on valuable operational data, including vapor pressure, boiling point, flash point, octane level, API (American Petroleum Institute) gravity, viscosity, BTU (British Thermal Unit) and more, simultaneously. To drive recurring revenue, we continue to build on the modular nature of our sensor and analysis packages with new data processing techniques designed to further enhance the value of our installations. Automated Interface Detection Algorithm (“AIDA”) provides real-time detection of interfaces in a pipeline without the need for additional sampling or chemometric modeling. Our application can identify products such as refined fuels, crude and NGLs with its advanced machine learning algorithms and detect interfaces real-time compared to traditional manual lab analysis. We believe this allows customers to cut batches quickly and accurately, reduce transmix times and minimize off-spec product that requires downgrades. As evidenced by and in connection with the transactions with ProFrac and ProFrac GDM described above under “Item 1. Financial Statements - Note 16,” as well as the Utility Support Contract, we are gaining traction leveraging the Verax™ in 31 applications where operators, service companies and power providers are using lower cost field gas as a substitute for diesel or compressed natural gas in dual fuel engines as the market moves to Tier 4 equipment and electric powered drilling rigs and frack equipment. Analyzing gas quality in real-time is designed to allow companies to maximize the field gas substitution rate providing significant cost savings while lowering emissions, reducing fuel consumption/costs and protecting equipment from damage. In addition, we believe the Acquired Assets (as described under “Item 1. Financial Statements - Note 16”) and similar assets being constructed utilizing the Equipment Credit can support numerous vertical markets, including areas outside of the oil and gas industry, such as grid and emergency remote power support and power needs associated with data centers. The Lease Agreement described under “Item 1. Financial Statements - Note 16” above has had and we expect it to continue to have a significant impact on the future financial results of our DA segment. We expect full-year 2026 revenues from just the Lease Agreement to total approximately $27.0 million, as compared to $27.5 million in total DA revenues from all sources for the year ended December 31, 2025. During the first half of 2026, DA segment revenue increased 245% as compared to the first half of 2025. We expect our DA segment revenue during the second half of 2026 to continue to exceed prior year results. The DA segment continues to innovate and enhance its hardware, software and artificial intelligence platforms. These advancements are expected to enable complex lab-grade measurements in challenging environments, which is required for oil and gas valuation at custody transfer points. The Company’s recent deployment and GPA 2172 qualification of the XSPCT analyzers, along with its proven fleet of VERAX analyzers, will support the oil and gas industry’s digital shift while enhancing transparency in valuation, taxation and commodity forecasting. We believe that the lower-cost, rugged measurement points provided by our analyzers will help pave the way for digital measurement to become the standard for custody transfer. Consolidated Results of Operations (in thousands) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Revenue Revenue from external customers $ 43,225 $ 25,182 $ 61,390 $ 49,605 Revenue from related party 56,142 33,168 108,028 64,107 Total revenues 99,367 58,350 169,418 113,712 Cost of sales 75,584 43,943 130,094 86,856 Cost of sales % 76.1 % 75.3 % 76.8 % 76.4 % Gross profit 23,783 14,407 39,324 26,856 Gross profit % 23.9 % 24.7 % 23.2 % 23.6 % Selling general and administrative 7,736 6,796 14,661 13,078 Selling general and administrative % 7.8 % 11.6 % 8.7 % 11.5 % Asset acquisition expenses — 4,195 — 4,195 Depreciation 664 374 1,295 626 Research and development 497 455 893 810 Gain on sale of property and equipment — — — (7) Income from operations 14,886 2,587 22,475 8,154 Operating margin % 15.0 % 4.4 % 13.3 % 7.2 % Interest and other (expense) income, net (1,352) (802) (2,668) (925) Income before income taxes 13,534 1,785 19,807 7,229 Income tax expense (3,581) (17) (5,190) (81) Net income $ 9,953 $ 1,768 $ 14,617 $ 7,148 Net income % 10.0 % 3.0 % 8.6 % 6.3 % For the three months ended June 30, 2026 and 2025 Consolidated revenue for the three months ended June 30, 2026 increased $41.0 million, or 70%, versus the same period of 2025, driven by increased external customer product sales, including international chemistry, increased sales volumes under the ProFrac Agreement, a $3.6 million increase in revenue attributable to the Lease Agreement and $5.9 million in revenue attributable to the Utility Support Contract, partially offset by a decrease in accrued Contract Shortfall Fees of $6.5 million. Related party revenues in the CT segment are net of $2.4 million and $1.4 million of contract assets amortization for the three months ended June 30, 2026 and 2025, respectively. 32 Consolidated cost of sales for the three months ended June 30, 2026 increased $31.6 million, or 72%, versus the same period of 2025, primarily due to increased product sales and increased costs related to the Lease Agreement and Utility Support Contract. Consolidated cost of sales as a percentage of revenue was 76% and 75% for the three months ended June 30, 2026 and 2025, respectively. SG&A expenses for the three months ended June 30, 2026 increased $0.9 million, or 14%, versus the same period of 2025. The increase relates primarily to increased stock compensation expense and increased professional fees. Income from operations increased $12.3 million for the three months ended June 30, 2026, versus the same period in 2025. The increase was primarily driven by a $9.4 million increase in gross profit and asset acquisition expenses of $4.2 million for the three months ended June 30, 2025 with no corresponding activity for 2026. The increase in income from operations was partially offset by a $0.9 million increase in SG&A expenses and a $0.3 million increase in depreciation expenses during the three months ended June 30, 2026 as compared to the same period of 2025. Interest and other expense for the three months ended June 30, 2026 increased $0.5 million driven by increases in interest payments as a result of the PWRtek Note compared to the same period of 2025. The Company had income tax expense of $3.6 million and $17 thousand for the three months ended June 30, 2026 and 2025, respectively. The increase in tax expense includes the impact of the partial release of the valuation allowance during the third quarter of 2025 as described under “Item 1. Financial Statements - Note 11.” For the six months ended June 30, 2026 and 2025 Consolidated revenue for the six months ended June 30, 2026 increased $55.7 million, or 49%, versus the same period of 2025, driven by increased sales volumes under the ProFrac Agreement, including international chemistry, a $10.5 million increase in revenue attributable to the Lease Agreement for six months ended June 30, 2026 compared to the same period of 2025, and $6.6 million in revenue attributable to the Utility Support Contract. Increases in revenues for the period were partially offset by a decrease in accrued Contract Shortfall Fees of $3.5 million. Related party revenues in the CT segment are net of $4.7 million and $2.9 million of contract assets amortization for the six months ended June 30, 2026 and 2025, respectively. Consolidated cost of sales for the six months ended June 30, 2026 increased $43.2 million, or 50%, versus the same period of 2025, primarily due to increased product sales and increased costs related to the Lease Agreement and Utility Support Contract. Consolidated cost of sales as a percentage of revenue was 77% and 76% for the six months ended June 30, 2026 and 2025, respectively. SG&A expenses for the six months ended June 30, 2026 increased $1.6 million, or 12%, versus the same period of 2025. The increase relates primarily to increased salaries, stock compensation expense and increased professional fees. As a percentage of revenue, SG&A declined to 8.7% during the six months ended June 30, 2026, as compared to 11.5% during the 2025 six-month period. Income from operations increased $14.3 million for the six months ended June 30, 2026, versus the same period in 2025. The increase was primarily driven by a $12.5 million increase in gross profit and asset acquisition expenses of $4.2 million for the six months ended June 30, 2025 with no corresponding activity for 2026. The increase in income from operations was partially offset by a $1.6 million increase in SG&A expenses and a $0.7 million increase in depreciation expenses during the six months ended June 30, 2026 as compared to the same period of 2025. Interest and other expense for the six months ended June 30, 2026 increased $1.7 million driven by an increase in interest payments as a result of the PWRtek Note compared to the same period of 2025. The Company had income tax expense of $5.2 million and $81 thousand for the six months ended June 30, 2026 and 2025, respectively. The increase in tax expense includes the impact of the partial release of the valuation allowance during the third quarter of 2025 as described under “Item 1. Financial Statements - Note 11.” 33 Results by Segment (in thousands): Chemistry Technologies Results of Operations: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Revenue from external customers $ 31,114 $ 22,543 $ 45,856 $ 44,552 Revenue from related party 49,071 29,877 94,012 60,606 Income from operations 8,786 8,049 13,914 16,940 CT revenue from external customers for the three months ended June 30, 2026 increased $8.6 million, or 38%, compared to the same period of 2025 driven primarily by increased product volumes, including international sales. Revenue from related party for the three months ended June 30, 2026 increased $19.2 million compared to the same period of 2025, primarily driven by increased product volumes, partially offset by decreased accrued Contract Shortfall Fees and increased contract amortization. CT revenue from external customers for the six months ended June 30, 2026 increased $1.3 million, or 3%, compared to the same period of 2025 driven primarily by increased product volumes. Revenue from related party for the six months ended June 30, 2026 increased $33.4 million compared to the same period of 2025, primarily driven by increased product volumes, partially offset by decreased accrued Contract Shortfall Fees and increased contract amortization. Income from operations for the CT segment for the three months ended June 30, 2026 increased $0.7 million compared to the same period of 2025. The increase was driven by a $1.1 million increase in gross profit for the three months ended June 30, 2026, which included a $6.5 million decrease in Contract Shortfall Fees. Income from operations for the CT segment for the six months ended June 30, 2026 decreased $3.0 million compared to the same period of 2025. The decrease was driven by a $2.5 million decrease in gross profit for the six months ended June 30, 2026, which included a $3.5 million decrease in Contract Shortfall Fees as compared to the 2025 six-month period. Data Analytics Results of Operations: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Revenue from external customers 12,111 $ 2,639 $ 15,534 $ 5,053 Revenue from related party 7,071 3,291 14,016 3,501 Income (loss) from operations 10,163 (1,919) 16,297 (2,044) DA revenue from external customers for the three months ended June 30, 2026 increased $9.5 million, or 359%, compared to the same period of 2025 primarily due to $5.9 million in revenue attributable to the Utility Support Contract in 2026, with no corresponding contract for the same period of 2025, and increased product volumes. Revenue from related party for the three months ended June 30, 2026 increased $3.8 million compared to the same period of 2025 primarily due to the Lease Agreement in 2026. The Lease Agreement closed in late-April 2025, limiting the impact during the second quarter of 2025. DA revenue from external customers for the six months ended June 30, 2026 increased $10.5 million, or 207%, compared to the same period of 2025 primarily due to increased volumes, increased service revenue and $6.6 million in revenue attributable to the Utility Support Contract in 2026 with no corresponding contract for the same period of 2025. Revenue from related party for the six months ended June 30, 2026 increased $10.5 million compared to the same period of 2025 primarily due to the Lease Agreement in 2026. The Lease Agreement closed in late-April 2025, limiting the impact during the six-month 2025 period. Income from operations for the DA segment for the three months ended June 30, 2026 increased $12.1 million compared to the same period for 2025 primarily driven by the Lease Agreement, Utility Support Contract and increased activity, partially offset by increased materials costs. Income from operations for the DA segment for the six months ended June 30, 2026 increased $18.3 million compared to the same period for 2025 primarily driven by the Lease Agreement, Utility Support Contract and increased activity, partially offset by increased materials costs. 34 Corporate and Other Results of Operations: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Loss from operations $ (4,063) $ (3,543) $ (7,736) $ (6,742) Loss from operations for the three months ended June 30, 2026 increased $0.5 million, or 15%, compared to the same period of 2025 primarily attributable to increased administrative costs. Loss from operations for the six months ended June 30, 2026 increased $1.0 million, or 15%, compared to the same period of 2025 primarily attributable to increased administrative costs. Capital Resources and Liquidity Overview The Company’s working capital requirements relate to the acquisition and maintenance of equipment and funding obligations as they become due. During the six months ended June 30, 2026, the Company funded working capital requirements with cash on hand, borrowings under the ABL (defined below) and cash flow from operations. We believe our cash and cash equivalents, cash generated from operating activities, the collection of future Contract Shortfall Fees as described below, and availability under the ABL will be sufficient to fund our capital requirements and anticipated obligations as they become due over the next twelve months. However, sustained weakness in the oil and gas markets, and the resulting potential impact on our customers’ ability to pay their obligations to us in a timely manner could have a negative impact on our liquidity. In addition, the availability of capital is dependent on the Company’s operating cash flow, which is currently expected to be principally derived from the ProFrac Agreement and the Lease Agreement. The minimum purchase requirements under the ProFrac Agreement were not met during 2025 and, as a result, related party revenues for the year ended December 31, 2025 reflect 2025 Contract Shortfall Fees totaling $27.4 million. As described in “Recent Events” above, on March 12, 2026, the Company and ProFrac entered into the OSP Agreement regarding the settlement of 2025 Contract Shortfall Fees. The current measurement period for Contract Shortfall Fees is January 1, 2026 through December 31, 2026. The Company does not expect that the minimum purchase requirements will be met during the current measurement period, and as a result, related party revenues for the six months ended June 30, 2026 reflect Contract Shortfall Fees of $3.9 million. As of June 30, 2026 and December 31, 2025, the Company had unrestricted cash and cash equivalents of $4.4 million and $5.7 million, respectively. In addition, as of August 3, 2026, the Company had approximately $15 million in available borrowings under the ABL. During the six months ended June 30, 2026, the Company had $22.5 million of operating income, $6.6 million of cash used in operating activities, $1.2 million of cash used in investing activities and $6.4 million of cash provided by financing activities. Asset Based Loan In August 2023, the Company entered into a 24-month revolving loan and security agreement in connection with an Asset Based Loan, which was amended in October 2023, August 2024, April 2025 and July 2026 (as amended, the “ABL”). The July 2026 amendment extended the maturity to October 31, 2026 and provides the Company with the option, upon at least thirty days’ written notice prior to the October 2026 maturity, to either (i) extend the term of the Loan Agreement for an additional twelve months from the October 2026 maturity or (ii) terminate the ABL at maturity. The ABL provides up to $20.0 million of credit availability, which is limited by a borrowing base consisting of (i) 85% of eligible accounts receivable, plus (ii) 60% of the value of eligible inventory not to exceed 100% of the eligible accounts receivable, plus (iii) 60% of the value of certain real estate holdings. As of June 30, 2026, the Company had $10.4 million outstanding under the ABL. During the six months ended June 30, 2026, the Company incurred $1.0 million in interest and fees related to the ABL. As of June 30, 2026, the Company recorded $0.1 million of unamortized deferred financing costs related to the ABL. 35 Borrowings under the ABL bear interest at the Wall Street Journal Prime Rate (subject to a floor of 5.50%) plus 2.0% per annum. For the six months ended June 30, 2026, the weighted-average interest rate was 8.75%. The ABL contains an annual commitment fee equal to 1.0% of the ABL’s borrowing base. Additionally, the Company will be assessed a non-usage fee of 0.25% per quarter based on the difference between the average daily outstanding balance and the borrowing base limit of the ABL. If the ABL is terminated at the October 2026 maturity, the Company is required to pay an early termination fee of $50 thousand. If the ABL is extended for an additional twelve months from the October 2026 maturity and is terminated prior to the end of its extended term, the Company is required to pay an early termination fee of 1.5% of the borrowing base limit of the ABL. The ABL contains customary representations, warranties, covenants and events of default, the occurrence of which would permit the lender to accelerate the payment of any amounts borrowed. The ABL requires the Company to maintain a minimum Tangible Net Worth (as defined in the ABL) of not less than $11 million. In addition, the ABL provides the lender a blanket security interest on all or substantially all of the Company’s assets, excluding the Acquired Assets. Cash Flows Consolidated cash flows by type of activity are noted below (in thousands): Six months ended June 30, 2026 2025 Net cash (used in) provided by operating activities $ (6,580) $ 2,822 Net cash used in investing activities (1,239) (1,302) Net cash provided by (used in) financing activities 6,433 (740) Effect of changes in exchange rates on cash and cash equivalents 57 (155) Net change in cash and cash equivalents and restricted cash $ (1,329) $ 625 Operating Activities Net cash used in operating activities was $6.6 million during the six months ended June 30, 2026 compared to net cash provided by operating activities of $2.8 million for the same period of 2025. Consolidated net income for the six months ended June 30, 2026 was $14.6 million compared to consolidated net income of $7.1 million for the six months ended June 30, 2025. During the six months ended June 30, 2026, non-cash adjustments to net income totaled $14.6 million as compared to $5.9 million for the same period of 2025. •For the six months ended June 30, 2026, non-cash adjustments included a $4.7 million tax expense, $2.0 million of stock compensation expense, $4.7 million amortization of contract assets, a $1.1 million increase in the provision for excess and obsolete inventory and $0.4 million of non-cash lease expense. •For the six months ended June 30, 2025, non-cash adjustments included non-cash positive adjustments of $1.1 million of stock compensation expense, $2.9 million amortization of contract assets and $0.6 million of non-cash lease expense. During the six months ended June 30, 2026, changes in working capital used $35.8 million of cash as compared to $10.2 million for the same period of 2025. •For the six months ended June 30, 2026, changes in working capital resulted primarily from increased third party accounts receivable of $24.6 million, an increase in related party accounts receivable of $19.5 million, increases in net inventories of $16.6 million, operating lease liabilities of $0.7 million and decreased accrued liabilities of $1.1 million partially offset by an increase in accounts payable of $26.2 million. •For the six months ended June 30, 2025, changes in working capital resulted primarily from an increase in related party accounts receivable of $2.5 million, increased third party accounts receivable of $5.1 million, decreased accrued liabilities and operating lease liabilities of $1.9 million and $0.9 million, respectively, and decreases in accounts payable of $1.7 million, partially offset by a decrease in net inventories of $1.4 million along with an increase in interest payable of $0.7 million. 36 Investing Activities Net cash used in investing activities for the six months ended June 30, 2026 and 2025 was $1.2 million and $1.3 million, respectively, primarily driven by $1.2 million and $1.3 million in capital expenditures for the six months ended June 30, 2026 and 2025, respectively. Capital expenditures for the six months ended June 30, 2026 are net of the $3.0 million of Equipment Credit used for the period. Financing Activities Net cash provided by financing activities for the six months ended June 30, 2026 was $6.4 million and relates primarily to $7.1 million in net proceeds from the ABL, and proceeds from the issuance of stock under the Company’s Employee Stock Purchase Plan and stock option exercises, partially offset by payments to tax authorities for shares withheld from employees and payments for finance leases. Net cash used in financing activities was $0.7 million for the six months ended June 30, 2025, and relates primarily to $0.3 million in net payments on the ABL, payments for loan origination costs on the PWRtek Note, the issuance cost of the April 2025 Warrant and payments to tax authorities for shares withheld from employees, partially offset by proceeds from the issuance of stock under the Company’s Employee Stock Purchase Plan and stock option exercises. Critical Accounting Policies and Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions, and estimates that affect the amounts reported. Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the 2025 Annual Report describes the critical accounting policies and estimates used in the preparation of the Company’s consolidated financial statements. Note 2, “Summary of Significant Accounting Policies,” of the Notes to Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2025 Annual Report describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements. Additionally, the Company believes the following are critical accounting policies and estimates used in preparation of the Company’s consolidated financial statements due to the significant subjective and complex judgments and estimates required when preparing the Company’s consolidated financial statements. Leases — Lessor Accounting We lease equipment to customers under operating lease arrangements. At contract inception we perform an evaluation to determine if a lease arrangement conveys the right to control the use of an identified asset. To the extent such rights of control are conveyed, we further make an assessment as to the applicable lease classification. The determination of appropriate lease classification (sales-type lease or operating lease) may require the use of management judgment, including the economic life of the leased equipment, the rate implicit in the lease used to determine the fair value of lease payments, and the fair value of leased equipment. Contract Assets The Company’s contract assets represent consideration which was issued in the form of convertible notes (Contract Consideration Convertible Notes Payable as discussed in Note 18 - “Related Party Transactions” in Part II, Item 8 of the 2025 Annual Report) and other incremental costs related to obtaining the ProFrac Agreement in 2022. The contract assets are amortized over the term of the ProFrac Agreement based on forecasted revenues. As goods are transferred to ProFrac Services, LLC, the amortization is presented as a reduction of the transaction price included in related party revenue in the consolidated statements of operations. The contract assets are tested for recoverability on a recurring basis and the Company will recognize an impairment loss to the extent that the carrying amount of the contract assets exceeds the amount of consideration the Company expects to receive in the future for the transfer of goods under the contract less the direct costs that relate to providing those goods in the future. The amount of consideration the Company expects to receive in the future for the transfer of goods under the contract and the direct costs that relate to providing those goods used in the Company’s contract assets recoverability analysis consider both historical and anticipated purchases by ProFrac over the remaining life of the ProFrac Agreement, taking into account the effect of the Contract Shortfall Fee that is payable to the Company if the annual minimum purchase obligation is not met. The Contract Shortfall Fee mitigates the impact of a failure to meet the expected annual minimum purchase obligation by providing the Company consideration to offset the gross profit lost as a result of ProFrac’s purchases not meeting the annual minimum purchase obligation. Due to the Contract Shortfall Fee, if actual purchases under the ProFrac Agreement are less than the annual minimum purchase obligation, there is negligible impact on the amount of gross profit generated by the ProFrac Agreement. As a result, the Company believes there is minimal sensitivity to amounts purchased under the ProFrac Agreement to the ProFrac Agreement’s expected profitability when considering the contract assets recoverability assessment. 37