UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM Amendment No. 1 |
(Mark One)
For the fiscal year ended:
or
For the transition period from __________ to __________
Commission file number:
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(Exact name of registrant as specified in its charter) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
The aggregate market value of the registrant’s Class A common stock, $0.01 par value per share, held by non-affiliates of the registrant as of June 30, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, was $
As of March 11, 2024, the registrant had
Auditor Name:
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement for the 2024 Annual Meeting of Stockholders, which will be filed with the U.S. Securities and Exchange Commission within 120 days after December 31, 2023, are incorporated by reference into Part III of this Annual Report on Form 10-K.
This Amendment No. 1 on Form 10-K (this “Amendment”) amends the Annual Report on the Form 10-K of ProFrac Holding Corp. (the “Company”) for the fiscal year ended December 31, 2023, which the Company originally filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2024 (the “Original Filing”). The Company is filing this Amendment to provide Schedule I – Condensed Financial Information of Registrant in Item 15 of Part IV as required by Rule 12-04 of Regulation S-X when the restricted net assets of consolidated subsidiaries exceed certain thresholds as of the end of the most recently completed fiscal year. This Amendment is being filed in accordance with General Instruction A(4) to Form 10-K, which permits financial statement schedules to be filed pursuant to an amendment to an annual report on Form 10-K not later than 30 days after the applicable due date of the Form 10-K.
This Amendment does not reflect events occurring after the filing of the 2023 Form 10-K, does not update disclosures contained in the 2023 Form 10-K and does not modify or amend the 2023 Form 10-K except as specifically described above. Accordingly, this Amendment should be read in conjunction with the Original Filing.
Pursuant to Rule 12b-15 of the Securities Exchange Act of 1934, as amended, this Amendment contains the complete text of Item 15. Exhibits and Financial Schedules and certifications of the Company’s Principal Executive Officer and Principal Financial Officer required under Items 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, dated as of the date of this Amendment, as well as updated inline XBRL exhibits. In connection with the filing of this Amendment, the consent of the independent registered public accounting firm is attached as an exhibit hereto.
PART IV
Item 15. Exhibit and Financial Statement Schedules.
(a) The following documents are filed as part of this Annual Report on Form 10-K:
The financial statements of the Company and its subsidiaries were previously filed with the Original Filing under Item 8 of the Original Filing.
Schedule I – Condensed Financial Information of Registrant. Other schedules have been omitted because they are either not required, not applicable or the information required to be presented is included in the Company’s consolidated financial statements and notes thereto.
Exhibit No. |
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Description |
2.1 |
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2.2 |
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2.3† |
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2.4 |
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3.1 |
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3.2 |
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3.3 |
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4.1 |
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4.2 |
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4.3 |
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4.4 |
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4.5 |
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4.6 |
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4.7 |
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4.8 |
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4.9 |
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4.10 |
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4.11 |
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4.12*** |
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4.13 |
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4.14 |
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10.1 |
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10.2 |
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10.3 |
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10.4 |
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10.5 |
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10.6 |
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10.7 |
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10.8 |
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10.9 |
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10.10 |
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10.11 |
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10.12 |
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10.13# |
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10.14 |
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10.15 |
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10.16^ |
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10.17^ |
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10.18 |
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10.19 |
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10.20 |
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10.21^ |
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10.22^ |
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10.23 |
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10.24 |
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10.25 |
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10.26 |
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10.27 |
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10.28# |
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10.29# |
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10.30# |
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10.31# |
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10.32# |
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10.33# |
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10.34# |
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10.35 |
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10.36 |
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10.37 |
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10.38 |
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10.39 |
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10.40 |
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10.41 |
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10.42 |
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10.43† |
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10.44 |
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10.45 |
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10.46 |
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10.47 |
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10.48 |
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10.49 |
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10.50 |
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10.51 |
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10.52 |
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10.53^ |
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10.54 |
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10.55 |
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10.56 |
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21.1*** |
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23.1*** |
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23.2* |
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23.3*** |
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31.1*** |
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31.2*** |
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31.3* |
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31.4* |
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32.1*** |
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32.2** |
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95*** |
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97*** |
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101.INS* |
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Inline XBRL Instance Document – The instance document does not appear in the interactive date file because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH* |
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Inline XBRL Taxonomy Extension Schema with Embedded Linkbases Document. |
104* |
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Cover Page Interactive Date File (embedded within the Inline XBRL document). |
____________________________
* Filed herewith.
** Furnished herewith.
*** Filed or furnished, as applicable, with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2024 and incorporated herein by reference.
# Compensatory plan or arrangement.
† The schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such schedules, or any section thereof, to the SEC upon request.
^ Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The registrant agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
ProFrac Holding Corp.
Opinion on financial statement schedule
We have audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) the consolidated financial statements of ProFrac Holding Corp. and subsidiaries (the “Company”) referred to in our report dated March 15, 2024, which is included in the Annual Report on Form 10-K. Our audits of the consolidated financial statements also included the audit of the financial statement schedule listed in the index appearing under Item 15(a)(2). In our opinion, this financial statement schedule, when considered in relation to the consolidated financial statements as a whole, presents fairly, in all material respects, the information set forth therein.
Basis for opinion
This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statement schedule based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
/s/ GRANT THORNTON LLP
Dallas, Texas
April 15, 2024
Schedule I - Condensed Financial Information of Registrant
ProFrac Holding Corp.
PARENT COMPANY BALANCE SHEETS
(in millions, except per share amounts or where otherwise noted)
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December 31, |
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2023 |
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2022 |
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ASSETS |
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Current assets: |
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Income tax receivable |
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$ |
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$ |
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Total current assets |
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Investment in subsidiaries |
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Total assets |
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$ |
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$ |
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LIABILITIES, TEMPORARY EQUITY, AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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Current liabilities: |
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Income tax payable |
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— |
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Current portion of tax receivable agreement liability |
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Total current liabilities |
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Tax receivable agreement liability |
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— |
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Total liabilities |
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Temporary equity: |
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Series A preferred stock, $ |
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— |
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Redeemable noncontrolling interest |
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— |
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Stockholders' equity (deficit): |
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Preferred stock, $ |
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Class A common stock, $ |
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Class B common stock, $ |
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— |
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Additional paid-in capital |
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— |
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Accumulated deficit |
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( |
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( |
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Accumulated other comprehensive income |
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— |
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Total stockholders' equity (deficit) attributable to ProFrac Holding Corp. |
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( |
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Total liabilities, temporary equity, and stockholders' equity (deficit) |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed financial statements.
ProFrac Holding Corp.
PARENT COMPANY STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
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Year Ended December 31, |
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2023 |
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2022 |
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2021 |
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Revenues |
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$ |
— |
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$ |
— |
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$ |
— |
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Operating costs and expenses |
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— |
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— |
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— |
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Income before income taxes and equity in income (loss) of subsidiaries |
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— |
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— |
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— |
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Income tax benefit (expense) |
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( |
) |
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— |
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Income (loss) before equity in income (loss) of subsidiaries |
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( |
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— |
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Equity in income (loss) of subsidiaries, net of tax |
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( |
) |
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( |
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Net income (loss) |
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( |
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( |
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Less: net (income) loss attributable to ProFrac Predecessor |
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— |
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( |
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Less: net income attributable to redeemable noncontrolling interests |
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( |
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( |
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— |
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Net income (loss) attributable to ProFrac Holding Corp. |
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$ |
( |
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$ |
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$ |
— |
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Net income (loss) attributable to Class A common shareholders |
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$ |
( |
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$ |
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$ |
— |
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Earnings (loss) per Class A common share (basic and diluted) |
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$ |
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$ |
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$ |
— |
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Weighted average Class A common shares outstanding: |
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Basic |
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— |
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Diluted |
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— |
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The accompanying notes are an integral part of these condensed financial statements.
ProFrac Holding Corp.
PARENT COMPANY STATEMENTS OF CASH FLOWS
(in millions)
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Year Ended December 31, |
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2023 |
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2022 |
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2021 |
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Cash flows from operating activities: |
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Net income (loss) |
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$ |
( |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Equity in loss (income) of subsidiaries, net of tax |
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Deferred tax expense |
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— |
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— |
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Distributions received from ProFrac Holdings, LLC |
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— |
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Changes in operating assets and liabilities: |
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Income tax receivable |
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( |
) |
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— |
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Income tax payable |
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( |
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— |
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Net cash provided by operating activities |
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— |
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— |
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Cash flows from investing activities: |
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Contributions to ProFrac Holdings, LLC |
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( |
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( |
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— |
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Net cash used in investing activities |
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( |
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— |
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Cash flows from financing activities: |
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Proceeds from issuance of Series A preferred stock |
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— |
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— |
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Payment of Series A preferred stock issuance costs |
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( |
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— |
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— |
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Proceeds from issuance of common stock |
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— |
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— |
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Payment of common stock issuance costs |
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— |
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( |
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— |
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Payment of THRC related equity |
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— |
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( |
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— |
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Net cash provided by financing activities |
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— |
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Net increase in cash, cash equivalents, and restricted cash |
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— |
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— |
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Cash, cash equivalents, and restricted cash beginning of period |
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— |
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— |
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Cash, cash equivalents, and restricted cash end of period |
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$ |
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$ |
— |
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$ |
— |
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Supplemental cash flow information: |
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Cash payments (refunds received) for income taxes, net |
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$ |
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$ |
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$ |
— |
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The accompanying notes are an integral part of these condensed financial statements.
ProFrac Holding Corp.
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
ProFrac Holding Corp. (“ProFrac Corp.”) is a holding company with substantially all of its assets and operations held by ProFrac Holdings, LLC (“ProFrac LLC”), which is a vertically integrated and innovation-driven energy services company providing hydraulic fracturing, completion services and other complementary products and services to leading upstream oil and gas companies engaged in the exploration and production of North American unconventional oil and natural gas resources.
Mr. Dan Wilks and Mr. Farris Wilks are brothers and are the founders and principal stockholders of the Company. Their sons, Mr. Matthew D. Wilks and Mr. Johnathan Ladd Wilks, are the Company’s Executive Chairman and Chief Executive Officer, respectively. In the normal course of business, we enter into transactions with related parties where Mr. Dan Wilks and Mr. Farris Wilks and entities owned by or affiliated with them (collectively, the “Wilks Parties”) hold a controlling financial interest. See “Notes to the Consolidated Financial Statements—Note 16 – Related Party Transactions” included in the Company’s Annual Report on Form 10-K for further discussion of these related party transactions.
Basis of Presentation
These condensed parent company financial statements reflect the unconsolidated financial position of ProFrac Corp. as the parent company to ProFrac LLC. Given that certain of our subsidiaries are restricted in their ability to transfer funds to us as a result of their debt covenants, we have prepared these condensed parent company financial statements in accordance with Rules 5-04 and 12-04 of Regulation S-X, as the restricted net assets of ProFrac LLC and its consolidated subsidiaries exceed
Company Formation
ProFrac Corp. was incorporated as a Delaware corporation on August 17, 2021, to become a holding corporation for ProFrac LLC and its subsidiaries upon completion of a corporate reorganization in conjunction with a planned initial public offering (“IPO”). On May 17, 2022, ProFrac Corp. completed its IPO and corporate reorganization and became the managing member of ProFrac LLC.
The condensed parent company financial statements presented herein are those of ProFrac Corp. subsequent to the corporate reorganization on May 17, 2022, and ProFrac LLC before that date. In these notes to parent company financial statements, ProFrac Corp. and ProFrac LLC together are also referred to as “we,” “us,” “our,” or the “Company” and ProFrac LLC is also referred to as “ProFrac Predecessor.” For all periods presented, the parent company financial statements presented herein include the controlled subsidiaries of ProFrac LLC, which include Best Pump & Flow LP (“Best Flow”) and Alpine Silica, LLC (“Alpine”).
Prior to December 21, 2021, the Wilks Parties held a controlling interest in each of ProFrac LLC, Best Flow and Alpine. Historical periods for ProFrac Predecessor had been presented on a consolidated and combined basis given the common control ownership by the Wilks Parties. On December 21, 2021, all of the then-outstanding membership interests in Best Flow and Alpine were contributed to ProFrac LLC in exchange for membership interests in ProFrac LLC. Accordingly, the results for the year ended December 31, 2021 have been retrospectively adjusted to present the operations of ProFrac LLC, Best Flow and Alpine on a combined basis. The acquisitions of Best Flow and Alpine have been accounted for in a manner consistent with the pooling of interest method of accounting, as the transaction was a combination of entities under common control. Under this method of accounting, the parent company statements of operations and parent company statements of cash flows have been adjusted to include all activities of the commonly controlled groups for all periods in which common control existed.
Initial Public Offering
In the second quarter of 2022, ProFrac Corp. completed its IPO of
Redeemable Noncontrolling Interests
ProFrac Corp.’s only material asset is an equity interest consisting of units representing limited liability company interests in ProFrac LLC (the “Units”). As the sole managing member of ProFrac LLC, ProFrac Corp. consolidates the financial results of ProFrac LLC and its subsidiaries and reports a noncontrolling interest related to the portion of Units not owned by ProFrac Corp. Historically, the holders of Units not owned by ProFrac Corp. also held shares of ProFrac Corp.’s Class B common stock, such that a single share of Class B common stock was issued for each Unit not owned by ProFrac Corp.
Pursuant to the Third Amended and Restated Limited Liability Company Agreement of ProFrac LLC and the Second Amended and Restated Certificate of Incorporation of ProFrac Corp., certain members of ProFrac LLC had the right to cause ProFrac LLC to redeem all or a portion of each such member's Units, together with the surrender of the same number of each such member's shares of Class B common stock, for an equivalent number of shares of Class A common stock or, at the election of our board of directors, cash. In connection with the exercise of such redemption, a corresponding number of shares of Class B common stock would be canceled. The redemption election was not considered to be within our control because the holders of Class B common stock and their affiliates controlled us through direct representation on our board of directors. As a result, we have historically presented the noncontrolling interests in ProFrac LLC as redeemable noncontrolling interests outside of permanent equity.
In April 2023, all the eligible holders of the Units (the “Redeeming Members”) submitted redemption notices with respect to all of their Units, representing an aggregate of
In April 2023, we delivered a written notice to ProFrac LLC and the Redeeming Members setting forth our election to exercise our right to purchase directly and acquire the Redeemed Units, together with the surrender and delivery of the same number of shares of our Class B common stock from the Redeeming Members.
We subsequently acquired the Redeemed Units from the Redeeming Members by issuing an aggregate of
2. PREFERRED STOCK
For details regarding our preferred stock, see “Notes to the Consolidated Financial Statements—NOTE 8 – Preferred Stock” included in the Company’s Annual Report on Form 10-K.
3. INCOME TAXES
For details regarding income taxes, see “Notes to the Consolidated Financial Statements—NOTE 11 – Income Taxes” included in the Company’s Annual Report on Form 10-K.
4. COMMITMENTS AND CONTINGENCIES
For details regarding contingencies related to litigation, see "Notes to the Consolidated Financial Statements—NOTE 13 – Commitments and Contingencies" included in the Company’s Annual Report on Form 10-K. For details regarding guarantees of certain debt instruments of our indirectly owned subsidiaries and our consolidated schedule of debt maturities, see "Notes to the Consolidated Financial Statements—NOTE 6 – Debt" included in the Company’s Annual Report on Form 10-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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PROFRAC HOLDING CORP. |
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Date: April 15, 2024 |
By: |
/s/ Matthew D. Wilks |
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Name: Matthew D. Wilks |
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Title: Executive Chairman and Director (Principal Executive Officer) |