ProFrac Holding Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Fair Value of Financial Instruments (Tables)

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2022

Summary of Fair Value Hierarchy of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the placement in the fair value hierarchy of assets and liabilities that were measured at fair value on a recurring basis at December 31, 2022. There were no assets or liabilities measured at fair value on a recurring basis at December 31, 2021.


	Fair value measurements using
	Level 1		Level 2		Level 3
Assets:
BPC Investment	$	-	$	-	$	53.6
Liabilities:
Earnout Payments	$	-	$	-	$	6.6
Public warrants		1.1		-		-
Total liabilities	$	1.1	$	-	$	6.6

Reconciliation of Beginning and Ending Balances for assets Measures at Fair Value on a Recurring Basis

The following is a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from inception to December 31, 2022:


Fair value as of January 1, 2022	$	-
Acquisition of Flotek Convertible Notes		20.0
Acquisition of investment in BPC		47.2
Transfer of cost method BPC investment to Level 3 fair value measurement		4.2
Change in Flotek fair value up to acquisition date		10.2
Elimination of Flotek Convertible Notes at acquisition date		(30.2	)
Change in BPC fair value		2.2
Fair value as of December 31, 2022	$	53.6

Fair Value Measurement Key Inputs

The key inputs into the Monte Carlo simulation used to estimate the fair value the Flotek Convertible Notes were as follows:


	May 17, 2022
Risk-free interest rate		1.82	%
Expected volatility		90.0	%
Term until liquidation (years)		0.72
Stock price	$	1.29