FLOTEK INDUSTRIES INC/CN/

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors contained in “Item 1A. Risk Factors” in our 2025 Annual Report, which could materially affect our business, financial condition and/or future results. As of September 30, 2026, there have been no material changes in our risk factors from those set forth in the 2025 Annual Report, other than the risks factors set forth below. The risks described in the 2025 Annual Report are not the only risks facing our company. Additional risks and uncertainties not currently known to us or those we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or future results.

Our power services contracts are subject to significant risks and uncertainties, including termination by governmental counterparties, that could prevent us from realizing expected revenues.

We have entered into, and may continue to pursue, contracts to provide power generation services and equipment in connection with infrastructure and utility projects, including the Utility Support Contract announced in March 2026, under which we are coordinating the installation of power generation equipment to support federal disaster recovery initiatives. Our ability to generate and sustain revenue under these contracts depends on the successful execution and continued operation of projects that involve third-party participants over whom we have limited or no control, and on continued governmental approval of, and funding for, those projects. For example, on July 31, 2026, we were assigned certain responsibilities under the PREPA Contract, a 10-year agreement relating to a 400 MW natural gas-fired power generation project for PREPA, under which we expected to generate approximately $40 million of annual revenue at full deployment. On August 18, 2026, less than three weeks later, PREPA terminated the PREPA Contract, effective immediately. PREPA cited the consortium’s failure to furnish required performance security and the Oversight Board’s revocation of its approval of the PREPA Contract and its direction to terminate. We did not generate any revenue under the PREPA Contract. We may not be able to replace the expected revenue from the PREPA Contract, and its termination, together with related publicity, has adversely affected and may continue to adversely affect our reputation, our ability to obtain similar contracts and the market price of our common stock. With respect to the Utility Support Contract, the initial term was six months and is subject to extension at the customer’s option; initial power generation under the contract has been paused due to infrastructure delays, and we remain in discussions to extend the contract beyond the initial term. We cannot make any assurances that this project will be extended. Power services contracts are subject to numerous risks and contingencies outside of our control and contractual scope, including, but not limited to: termination, modification or invalidation of contracts by governmental counterparties or oversight authorities; the failure of us or other project participants to satisfy bonding, performance security and financing requirements; securing adequate and uninterrupted fuel supply; obtaining and maintaining permits and governmental approvals; establishing and maintaining grid interconnection; timely delivery of third-party equipment; construction execution and scheduling by other project participants; disputes among project participants; power interruptions and grid instability; integration of systems provided by multiple contractors; changes in government policy, funding priorities, or utility governance; geopolitical instability or armed conflict; and hurricanes, tropical storms, landslides, flooding, and other severe weather events. Any one or more of these factors could result in significant delays, increased costs, contract termination, or failure to complete a project, which could materially impair or eliminate our ability to generate revenue under these contracts and could expose us to costs that we may not recover. There can be no assurance that any of these projects will be completed on the anticipated timeline or at all, or that, even if completed, they will generate the expected level of revenues over their respective contract terms. Our power services business is an emerging line of business for the Company, and we have limited operating history in providing infrastructure-scale power generation services. As we pursue additional power services opportunities, including potential expansion into grid power, data center support, and other infrastructure verticals, we could encounter similar third-party execution and governmental counterparty risks, as well as risks related to scaling operations, managing capital commitments for equipment, and entering new regulatory environments.

We are subject to a securities class action lawsuit, the outcome of which is uncertain, and which could result in significant costs and divert management’s attention.

On August 26, 2026, a putative securities class action lawsuit captioned Saad Bashir v. Flotek Industries, Inc., et al., Case No. 1:26-cv-07285 (the “Securities Class Action”), was filed in the United States District Court for the Southern District of New York against the Company and certain of its current officers. The complaint alleges, among other things, that the defendants made materially false and/or misleading statements in violation of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder regarding the PREPA Contract and related matters described in a short seller report published on August 17, 2026. The complaint seeks unspecified compensatory damages, interest, attorneys’ fees and costs on behalf of a putative class of persons and entities that purchased or otherwise acquired the Company’s common stock between August 3, 2026 and August 17, 2026. Although the Company believes the claims are without merit the Securities Class Action is at an early stage, and we therefore cannot predict its outcome or reasonably estimate the amount or range of any possible loss.

Securities litigation is inherently uncertain, and regardless of its merit or ultimate outcome, defending the Securities Class Action and any related or future lawsuits could result in significant legal fees and other costs and could divert the attention and resources of our management and board of directors from the operation of our business. An unfavorable outcome, or a settlement, could require us to pay damages or settlement amounts. Although we maintain directors’ and officers’ liability insurance, the insurance may not be sufficient to cover all of our defense costs, settlement amounts or damages; is subject to retentions, deductibles, exclusions and coverage limits; and may be subject to dispute by our insurers. Any amounts not covered by insurance could be material. Further, such litigation could increase our insurance premiums, make it more difficult to obtain directors’ and officers’ liability insurance on acceptable terms or at all, and make it more difficult to attract and retain qualified directors and officers. The pendency of the Securities Class Action, negative publicity regarding it, and any adverse developments could harm our reputation, our relationships with customers, suppliers, lenders and other counterparties, and the market price of our common stock, and could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We and certain of our current and former directors and officers are defendants in shareholder derivative litigation, which could result in significant costs and divert management’s attention.

On September 23, 2026, another purported Flotek shareholder, Felicia Marti, filed a related complaint in the United States District Court for the Southern District of New York, derivatively on behalf of the Company and against certain of the Company’s officers and directors (the “Derivative Action”). The complaint alleges, among other things, that the defendants breached their fiduciary duties by allowing the Company to make the same allegedly false or misleading statements alleged in the Securities Class Action. The complaint seeks unspecified damages (to be awarded to Flotek), purported corporate governance reforms, costs, attorneys’ fees, and other relief. The underlying factual allegations of the Derivative Action are substantially the same as those alleged in the Securities Class Action, which the Company believes to be without merit. The Derivative Action is at an early stage, and we therefore cannot predict its outcome or reasonably estimate the amount or range of any possible loss.

Although any recovery in a derivative action would generally inure to the benefit of the Company, we cannot predict the outcome of the Derivative Action. We may be required to advance legal fees and expenses to, and may have indemnification obligations to, the individual defendants under our certificate of incorporation, bylaws, indemnification agreements and Delaware law, and those amounts may not be fully covered by insurance. In addition, the Company typically bears the cost of any corporate governance reforms adopted, and of any plaintiffs’ attorneys’ fees awarded, in connection with a settlement. Defending and resolving the Derivative Action, together with the Securities Class Action, could require significant management time and attention, cause us to incur significant expenses, and adversely affect our reputation and the market price of our common stock. Any of these effects could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Unregistered Sales of Equity Securities

None.

Issuer Repurchases of Equity Securities

The Company’s stock compensation plans allow employees to elect to have shares withheld to satisfy their tax liabilities related to non-qualified stock options exercised or restricted stock vested or to pay the exercise price of the options. When this settlement method is elected by the employee, the Company repurchases the shares withheld upon vesting or exercise of the award. Repurchases of the Company’s equity securities during the three months ended September 30, 2026 that the Company made or were made on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act are as follows:

(1) The Company purchases shares of its common stock (a) to satisfy tax withholding requirements and payment remittance obligations related to period vesting of restricted shares and exercise of non-qualified stock options and (b) to satisfy payments required for common stock upon the exercise of stock options.

None.

Not applicable.

Trading Arrangements

During the quarter ended September 30, 2026, no director or officer (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934)adopted orterminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (in each case, as defined in Item 408(a) of Regulation S-K).

SIGNATURES

Date: November 6, 2026