Quarterly report [Sections 13 or 15(d)]

Related Party Transactions

v3.26.3
Related Party Transactions
 9 Months Ended
Sep. 30, 2026
Related Party Transactions [Abstract]  
Related party transactions

13. RELATED PARTY TRANSACTIONS

In the normal course of business, we have entered into transactions with related parties where the Wilks Parties hold a controlling financial interest. For the three and nine months ended September 30, 2026 and 2025, the Company had related party transactions with the following related party entities:

 

•
Logistix IQ, LLC (“Logistix IQ”, formerly Automatize, LLC) is a logistics broker that facilitates the last-mile delivery of proppants on behalf of its customers, including the Company. Amounts paid to Logistix IQ include costs passed through to third-party trucking companies and a commission retained by Logistix IQ. These payments are recorded in cost of revenues, exclusive of depreciation and depletion in our unaudited condensed consolidated statements of operations.
•
PC Energy Credit I, LLC (“PC Energy”) is an investment company that provides financing to its customers, including the Company. Amounts paid to PC Energy are recorded in interest expense in our unaudited condensed consolidated statements of operations, and repayments of long-term debt in our unaudited condensed consolidated statements of cash flows. See “Note 4. Debt” for additional disclosures related to related party credit agreements.
•
Equify Financial, LLC (“Equify Financial”) is a finance company that provides equipment and other financing to its customers, including the Company, and acts as the servicing agent for THRC Holdings, LP (“THRC Holdings”) under an equipment sale-leaseback arrangement between us and THRC Holdings. Amounts paid to Equify Financial are
recorded in cost of revenue, interest expense in our unaudited condensed consolidated statements of operations, and repayments of long-term debt in our unaudited condensed consolidated statements of cash flows. See “Note 4. Debt” for additional disclosures related to related party credit agreements.
•
Wilks Brothers, LLC (“Wilks Brothers”) is a management company which provides administrative support to various businesses within its portfolio. Wilks Brothers and certain entities under its control will at times incur expenses on our behalf, billing us for these expenses at cost as well as certain management fees. Amounts paid to Wilks Brothers are generally recorded in selling, general and administrative expenses in our unaudited condensed consolidated statements of operations.
•
Interstate Explorations, LLC (“Interstate”) is an exploration and development company for which we perform pressure pumping services.
•
Flying A Pump Services, LLC (“Flying A”), along with its subsidiary MGB Manufacturing, LLC (“MG Bryan”), is an oilfield services company which provides pressure pumping, acid and cementing services. We rent and sell equipment and frac fleet components, and at times sell proppant, to Flying A. We also pay Flying A to rent, repair, or sell equipment or frac fleet components.
•
MC Estates, LLC, The Shops at Crown Park, LLC (d/b/a The Shops at Willow Park), FTSI Industrial, LLC, 6100 IH 20, LLC (f/k/a 420 Shops Blvd, LLC), and Wilks Ranch Texas, LLC (collectively, the “Related Lessors”) own various industrial parks and office space leased by us. Amounts paid to the Related Lessors are recorded in selling, general and administrative expenses in our unaudited condensed consolidated statements of operations.
•
Wilks Construction Company, LLC (“Wilks Construction”) is a construction company that has built and made renovations to several buildings for us. Amounts paid to Wilks Construction are recorded as capital expenditures in our unaudited condensed consolidated statements of cash flows.
•
Wilks Earthworks, LLC (“Wilks Earthworks”) is an oilfield services company that provides mining, wet and dry loading, hauling and other services and equipment to its customers, including us. These payments are recorded in cost of revenues, exclusive of depreciation and depletion in our unaudited condensed consolidated statements of operations.
•
Carbo Ceramics Inc. (“Carbo”) is a provider of ceramic proppant which will at times purchase conventional proppant from us to act as a broker for its customers. Additionally, we will at times purchase manufactured proppant from Carbo for the Stimulation Services segment.

The following table summarizes revenue from related parties:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Flying A

 

$

0.7

 

 

$

1.3

 

 

$

1.9

 

 

$

6.3

 

Total

 

$

0.7

 

 

$

1.3

 

 

$

1.9

 

 

$

6.3

 

 

The following table summarizes expenditures with related parties. The amounts for Logistix IQ for the three and nine months ended September 30, 2025 have been revised from amounts previously reported. This revision had no other effect on our previously issued unaudited condensed consolidated financial statements for these periods.

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Logistix IQ

 

$

41.6

 

 

$

31.1

 

 

$

130.0

 

 

$

104.3

 

Flying A

 

 

1.2

 

 

 

0.6

 

 

 

4.1

 

 

 

1.5

 

Wilks Brothers

 

 

1.8

 

 

 

2.2

 

 

 

5.4

 

 

 

6.2

 

Related Lessors

 

 

3.7

 

 

 

3.8

 

 

 

10.6

 

 

 

11.4

 

Wilks Construction

 

 

—

 

 

 

5.0

 

 

 

—

 

 

 

8.8

 

Wilks Earthworks

 

 

7.1

 

 

 

8.7

 

 

 

18.5

 

 

 

21.1

 

PC Energy

 

 

31.4

 

 

 

—

 

 

 

31.4

 

 

 

—

 

Equify Financial

 

 

3.6

 

 

 

4.4

 

 

 

12.3

 

 

 

13.6

 

Carbo

 

 

0.2

 

 

 

0.5

 

 

 

1.2

 

 

 

1.3

 

Total

 

$

90.6

 

 

$

56.3

 

 

$

213.5

 

 

$

168.2

 

The following table summarizes accounts receivable–related party:

 

 

September 30,
2026

 

 

December 31,
2025

 

Flying A

 

$

4.9

 

 

$

18.8

 

Wilks Construction

 

 

0.8

 

 

 

0.8

 

Interstate

 

 

0.3

 

 

 

0.3

 

Total

 

$

6.0

 

 

$

19.9

 

The following table summarizes accounts payable–related party:

 

 

September 30,
2026

 

 

December 31,
2025

 

Logistix IQ

 

$

26.5

 

 

$

27.6

 

Wilks Brothers (1)

 

 

2.0

 

 

 

5.5

 

Wilks Earthworks

 

 

6.7

 

 

 

5.2

 

Related Lessors

 

 

0.1

 

 

 

0.1

 

Equify Financial

 

 

1.0

 

 

 

—

 

Flying A

 

 

4.9

 

 

 

2.8

 

Carbo

 

 

0.1

 

 

 

1.0

 

Total

 

$

41.3

 

 

$

42.2

 
(1)
In 2025 the Company and Wilks Brothers agreed to settle the second, third and fourth quarter of 2025 management fee payments in shares of common stock under a service agreement. Approximately $5.0 million of the December 31, 2025 accounts payable balance was settled with 1.1 million shares of common stock that we issued in the second quarter of 2026.

In June 2023 and January 2024, we arranged to sell certain surplus equipment and inventory components and to assign certain pre-orders for equipment to Flying A, at prices which are consistent with fair market value, for a total consideration of $36.3 million and $8.4 million, respectively. We delivered $0.8 million, $2.4 million, $12.6 million and $28.9 million of these components to Flying A in 2026, 2025, 2024 and 2023, respectively. We accounted for the unapplied proceeds from these transactions as related party deposits presented as "Other current liabilities - related party" in our unaudited condensed consolidated balance sheets. As of September 30, 2026, all product had been delivered to Flying A.

In March 2026, we purchased certain hydraulic fracturing equipment from MG Bryan for total consideration of $17.6 million, which approximated fair value. In connection with this transaction, we recorded $15.9 million as a deemed distribution within our unaudited condensed consolidated statements of changes in equity. Certain balances of accounts receivable with related parties aggregating $15.0 million were settled against the purchase price of this equipment.

In September 2026 and in connection with the Alpine Term Loan September 2026 Amendment, (a) certain Wilks Parties purchased $60.0 million in principal amount of Alpine 2023 Term Loans, (b) ProFrac GDM, LLC, an indirect wholly owned subsidiary of the Company, transferred approximately 2.3 million shares of Flotek common stock to such Wilks Parties and (c) Alpine 2023 Term Loan lenders agreed that only such purchased term loans (including any prepayment premium or make-whole amount) were deemed to be repaid in full and cancelled. The remaining Alpine 2023 Term Loans remained outstanding.

In September 2026, the Company and Wilks Brothers agreed to amend the management services agreement. This amendment allows for the Wilks Brothers to elect on a quarterly basis to receive payment of the management fee in cash or in shares of common stock. If the Wilks Brothers elect to be paid in cash, the payment will be deferred until the 2023 Alpine Term Loan has been fully repaid unless the Wilks Brothers elect to offset some or all of the deferred payment against the Company's accounts receivable from Wilks Brothers or other related entities.

In September 2026 and in connection with the new Flotek Term Loan, PC Energy Credit I, LLC exchanged $12.5 million of the obligations under the Flotek PWRtek Note for an equal amount of Flotek Term Loans.

In September 2025, we sold certain nonessential assets originally acquired from AST to Flying A in exchange for cash consideration of $3.4 million. The cash consideration received was $0.9 million greater than the carrying value of these assets. Because this sale was to an affiliate under common control, we accounted for the $0.9 million as an equity transaction recorded as a deemed contribution within our unaudited condensed consolidated statements of changes in equity.