What changed in ProFrac Holding Corp.'s 2023 10-K compared to 2022?

Across the narrative sections we track, ProFrac Holding Corp. (ACDC) added 667 paragraphs, removed 839, and edited 360 between the 2022 and 2023 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+524/−614), Item 1A. Risk Factors (+139/−221), Item 3. Legal Proceedings (+4/−4).

Did ProFrac Holding Corp. add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 139 new/edited paragraphs and 221 removed paragraphs versus the 2022 10-K.

What changed in ProFrac Holding Corp.'s MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 524 new/edited paragraphs and 614 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did ProFrac Holding Corp.'s Legal Proceedings (Item 3) change in 2023?

Item 3 shows 4 added/edited paragraphs and 4 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this ACDC 10-K diff come from?

The source filings are ProFrac Holding Corp.'s official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in ProFrac Holding Corp.'s 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of ProFrac Holding Corp.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+667 added−839 removedSource: 10-K (2024-03-15) vs 10-K (2023-03-30)

Top changes in ProFrac Holding Corp.'s 2023 10-K

667 paragraphs added · 839 removed · 360 edited across 3 sections

Item 7. Management's Discussion & Analysis+524 / −614 · 291 edited
Item 1A. Risk Factors+139 / −221 · 65 edited
Item 3. Legal Proceedings+4 / −4 · 4 edited

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

65 edited+74 added−156 removed148 unchanged

2022 filing

2023 filing

Biggest changeSome of these provisions include, for example, the following: • until we cease to be a controlled company, allowing the members of our board of directors designated by the parties to the ProFrac Stockholders’ Agreement to have a majority of the voting power of our board of directors; • after we cease to be a controlled company, dividing our board of directors into three classes of directors, with each class serving staggered three-year terms; • after we cease to be a controlled company, and subject to the terms of our ProFrac Stockholders’ Agreement, providing that all vacancies, including newly created directorships, may, except as otherwise required by law or, if applicable, the rights of holders of a series of preferred stock, only be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum (prior to such time, vacancies may also be filled by stockholders holding a majority of the outstanding shares); • after we cease to be a controlled company, permitting any action by stockholders to be taken only at an annual meeting or special meeting rather than by a written consent of the stockholders, subject to the rights of any series of preferred stock with respect to such rights; • after we cease to be a controlled company, permitting special meetings of our stockholders to be called only by our Chief Executive Officer, our Executive Chairman and our board of directors pursuant to a resolution adopted by the affirmative vote of a majority of the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships; • after we cease to be a controlled company, and subject to the rights of the holders of shares of any series of our preferred stock and the terms of our ProFrac Stockholders’ Agreement, requiring the affirmative vote of the holders of at least 66 2/3% in voting power of all then outstanding common stock entitled to vote generally in the election of directors, voting together as a single class, to remove any or all of the directors from office at any time, and directors will be removable only for “cause”; • prohibiting cumulative voting in the election of directors; • establishing advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders; and • providing that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws.

Biggest changeThese provisions include, for example, the following: • from and after such time as the parties to the ProFrac Stockholders’ Agreement (including their permitted transferees) cease to beneficially own more than 50% of our then-outstanding shares of common stock (which we refer to as the Trigger Date), dividing our board of directors into three classes of directors, with each class serving staggered three-year terms; • from and after the Trigger Date, allowing the members of our board of directors designated by the parties to the ProFrac Stockholders’ Agreement to have a majority of the voting power of our board of directors; • from and after the Trigger Date, and subject to the terms of our ProFrac Stockholders’ Agreement, providing that all vacancies, including newly created directorships, may, except as otherwise required by law or, if applicable, the rights of holders of a series of preferred stock, only be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum (prior to such time, vacancies may also be filled by stockholders holding a majority of the outstanding shares); • from and after the Trigger Date, permitting any action by stockholders to be taken only at an annual meeting or special meeting rather than by a written consent of the stockholders, subject to the rights of any series of preferred stock with respect to such rights; • from and after the Trigger Date, permitting special meetings of our stockholders to be called only by our Chief Executive Officer, our Executive Chairman and our board of directors pursuant to a resolution adopted by the 33 Table of Contents affirmative vote of a majority of the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships; • from and after the Trigger Date, and subject to the rights of the holders of shares of any series of our preferred stock and the terms of our ProFrac Stockholders’ Agreement, requiring the affirmative vote of the holders of at least 66 2/3% in voting power of all then outstanding common stock entitled to vote generally in the election of directors, voting together as a single class, to remove any or all of the directors from office at any time, and directors will be removable only for “cause”; • prohibiting cumulative voting in the election of directors; • establishing advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders; and • providing that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws.

To the extent species that are listed under the ESA or similar state laws, or are protected under the MBTA, inhabit the areas where we or our customers operate, our operations and the operations of our customers could be adversely impacted.

To the extent species that are listed and protected under the ESA or similar state laws, or under the MBTA, inhabit the areas where we or our customers operate, our operations and the operations of our customers could be adversely impacted.

If we fail to upgrade and replace our fleet with the higher efficiency and more environmentally friendly equipment the industry increasingly demands, our competitive position will deteriorate, which may have a material adverse effect on our financial position, results of operations and cash flows.

If we fail to upgrade and replace our fleet with the higher efficiency and more environmentally friendly equipment the industry increasingly demands, our competitive position may deteriorate, which may have a material adverse effect on our financial position, results of operations and cash flows.

In addition, the determination of future tax reporting positions, the structuring of future transactions and the handling of any challenge by any taxing authority to our tax reporting positions may take into consideration tax or other considerations of the Wilks Parties which may differ from the considerations of us or our other stockholders. 31 Table of Contents Furthermore, in connection with our IPO, ProFrac entered into a Stockholders’ Agreement, dated as of May 17, 2022, with certain of the Wilks Parties (as amended on January 13, 2023, the “ProFrac Stockholders’ Agreement”), which addresses the right to designate nominees for election to the ProFrac board of directors.

In addition, the determination of future tax reporting positions, the structuring of future transactions and the handling of any challenge by any taxing authority to our tax reporting positions may take into consideration tax or other considerations of the Wilks Parties which may differ from the considerations of us or our other stockholders. 32 Table of Contents Furthermore, in connection with our IPO, ProFrac entered into a Stockholders’ Agreement, dated as of May 17, 2022, with certain of the Wilks Parties (as amended on January 13, 2023, the “ProFrac Stockholders’ Agreement”), which addresses the right to designate nominees for election to the ProFrac board of directors.

To the extent that ProFrac Holding Corp. is unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid. 29 Table of Contents Conflicts of interest could arise between us, on the one hand, and Dan Wilks and Farris Wilks and entities owned by or affiliated with them (collectively, the “Wilks Parties”), on the other hand, concerning among other things, business transactions, competitive business activities or business opportunities.

To the extent that ProFrac Holding Corp. is unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid. 30 Table of Contents Conflicts of interest could arise between us, on the one hand, and Dan Wilks and Farris Wilks and entities owned by or affiliated with them (collectively, the “Wilks Parties”), on the other hand, concerning among other things, business transactions, competitive business activities or business opportunities.

Such regulation of methane emission for new sources and the promulgation of further requirements for existing oil and gas customers could result in increased operational costs and adversely affect demand for our services.

Moreover, drilling activities may be delayed, restricted or precluded in protected habitat areas or during certain seasons, such as breeding and nesting seasons.

Moreover, drilling and mining activities may be delayed, restricted or precluded in protected habitat areas or during certain seasons, such as breeding and nesting seasons.

These uncertainties include: • geological and mining conditions and/or effects from prior mining that may not be fully identified by available data or that may differ from experience; • assumptions regarding the effectiveness of our mining, quality control and training programs; • assumptions concerning future prices of commercial silica products, operating costs, mining technology improvements, development costs and reclamation costs; and • assumptions concerning future effects of regulation, including the issuance of required permits and taxes by governmental agencies.

These uncertainties include: • geological and mining conditions and/or effects from prior mining that may not be fully identified by available data or that may differ from experience; • assumptions regarding the effectiveness of our mining, quality control and training programs; • assumptions concerning future prices of frac sand products, operating costs, mining technology improvements, development costs and reclamation costs; and • assumptions concerning future effects of regulation, including the issuance of required permits and taxes by governmental agencies.

For example, the significant decline in oil and natural gas prices that followed the outset of the COVID pandemic in 2020 caused a reduction in our customers’ spending and associated drilling and completion activities, all of which had an adverse effect on our revenue.

For example, the significant decline in oil and natural gas prices that followed the outset of the COVID pandemic in 2020 caused a reduction in our customers’ spending and associated drilling and 20 Table of Contents completion activities, all of which had an adverse effect on our revenue.

We also cannot ensure that any patents we currently own or may obtain in the future would provide us with any significant commercial benefit or would allow us to prevent our competitors from employing comparable technologies or processes. 25 Table of Contents If we fail to respond to our customers’ growing demand for environmentally sensitive equipment, our business will be adversely affected.

We also cannot ensure that any patents we currently own or may obtain in the future would provide us with any significant commercial benefit or would allow us to prevent our competitors from employing comparable technologies or processes. If we fail to respond to our customers’ growing demand for environmentally sensitive equipment, our business will be adversely affected.

Since the beginning of 2022, before the May 17 th closing of our initial public offering and the start of trading of our Class A Common Stock on the Nasdaq Global Select Market (“Nasdaq”), we have aggressively pursued our growth and vertical integration strategies through a series of acquisitions, investments and procurement arrangements that increased our total assets from $664.6 million at December 31, 2021, to $2.9 billion at the end of fiscal year 2022.

Any future decreases in the rate at which oil and natural gas reserves are discovered or developed, whether due to the passage of legislation, increased governmental regulation leading to limitations, or prohibitions on exploration and drilling activity, including hydraulic fracturing, or other factors, could have a material adverse effect on our business and financial condition, even in a stronger oil and natural gas price environment.

Any future decreases in the rate at which oil and natural gas reserves are discovered or developed, whether due to the passage of legislation, increased governmental regulation leading to limitations, or prohibitions on exploration and drilling activity, including hydraulic fracturing, or other factors, could reduce demand for our products and services and have a material adverse effect on our business and financial condition, even in a stronger oil and natural gas price environment.

We base our mineral reserve and resource estimates on engineering, economic and geological data assembled and analyzed by our mining engineers, which are reviewed periodically by outside firms. However, commercial silica reserve estimates are necessarily imprecise and depend to some extent on statistical inferences drawn from available drilling data, which may prove unreliable.

We base our frac sand mineral reserve and resource estimates on engineering, economic and geological data assembled and analyzed by our mining engineers, which are reviewed periodically by outside firms. However, frac sand reserve estimates are necessarily imprecise and depend to some extent on statistical inferences drawn from available drilling data, which may prove unreliable.

Additional restrictions on drilling activities intended to protect certain species of wildlife may adversely affect our ability to conduct completion activities. In the United States, the ESA restricts activities that may affect endangered or threatened species or their habitats and similar protections are offered to migratory birds under the MBTA.

If existing environmental, health and safety requirements or enforcement policies change, we may be required to make significant unanticipated capital and operating expenditures. 26 Table of Contents New and existing regulatory disclosure requirements may implicate our trade secrets and cause us competitive harm if such trade secrets become public.

If existing environmental, health and safety requirements or enforcement policies change, we may be required to make significant unanticipated capital and operating expenditures. New and existing regulatory disclosure requirements may implicate our trade secrets and cause us competitive harm if such trade secrets become public.

Both transactions are now closed. For a company of our size and resources, the pace and volume of the deal-making activity described above may create risks and uncertainties that can have a material adverse effect on the daily conduct of our business, and negatively impact our cash flows, financial condition and results of operations.

For a company of our size and resources, the pace and volume of the deal-making activity described above may create risks and uncertainties that can have a material adverse effect on the daily conduct of our business, and negatively impact our cash flows, financial condition and results of operations.

Additionally, a portion of our Alpine reserves are located on approximately 630 acres that we lease pursuant to a lease that terminates in 2052 and requires that we commence production from the leased premises by January 1, 2032.

Additionally, at our Kermit Sand Mine, a portion of our reserves are located on approximately 630 acres that we lease pursuant to a lease that terminates in 2052 and requires that we commence production from the leased premises by January 1, 2032.

In the event that the Tax Receivable Agreement is not terminated, the payments under the Tax Receivable Agreement are anticipated to commence in 2023 and to continue for 15 years after the date of the last redemption of the Units.

We may need to implement one or more alternatives, such as reducing or delaying planned expenses and capital expenditures, selling assets, restructuring debt, or obtaining additional equity or debt financing. These financing strategies may not be executed on satisfactory terms, if at all.

We may need to implement one or more alternatives, such as reducing or delaying planned business activities, expenses and capital expenditures, selling assets, restructuring debt, or obtaining additional equity or debt financing. These financing strategies may not be executed on satisfactory terms, if at all or on terms that would be advantageous to our stockholders.

The Wilks Parties have the ability to direct the voting of a majority of our voting stock, and their interests may conflict with those of our other stockholders. As of December 31, 2022, the Wilks Parties controlled approximately 81.1% of our total voting power.

The Wilks Parties have the ability to direct the voting of a majority of our voting stock, and their interests may conflict with those of our other stockholders. As of December 31, 2023, the Wilks Parties controlled approximately 84.4% of our total voting power.

Our ability to make payments on and to upsize our current facilities, refinance any of our outstanding indebtedness, and obtain additional financing, and to fund planned capital expenditures, strategic transactions and expansion efforts will depend on our ability to generate cash in the future.

Our ability to make payments on and to upsize our current facilities, refinance any of our outstanding indebtedness, obtain additional financing, and to fund planned capital expenditures, strategic transactions and expansion efforts will depend on, among other things, our financial and operating performance, including, our ability to generate cash in the future.

Our business may not be able to generate sufficient cash flows from operations, and there is no assurance that future borrowings will be available to us in amounts sufficient to enable us to make payments due on our indebtedness and to fund our other liquidity needs.

Our business may not be able to generate sufficient cash flows from operations and collect our receivables, and there is no assurance that our future cash flows from operations will be sufficient to enable us to make payments due on our current or future indebtedness and to fund our other liquidity needs.

Numerous factors beyond our control affect our customers’ decisions regarding their level of exploration and production activity at any given time and, therefore, have an impact on the level of demand for our services at such time, including: • the global supply of, and demand for, oil and natural gas; • the cost of exploring for, developing, producing and delivering oil and natural gas; • the supply of and demand for drilling and hydraulic fracturing equipment; • the expected decline rates of current production; • any actual or perceived difficulty or inability to acquire or maintain necessary permits or mining or water rights; • the social, political and economic conditions in oil and natural gas producing countries and regions; • any actions by the members of OPEC+ and other oil-producing countries with respect to oil production levels and announcements of potential changes in such levels; • the level of consumer acceptance of and demand for fossil fuel products; 22 Table of Contents • contractions in the credit market; • the strength or weakness of the U.S. dollar; • the availability of pipeline and other transportation capacity; • the levels of oil and natural gas storage; • any adverse weather conditions or natural disasters; • any technological advances affecting energy consumption; • the price and availability of alternative fuels and energy sources; • merger and divestiture activity among oil and natural gas producers; • competition among oilfield service and equipment providers; • changes in transportation regulations that result in increased costs or administrative burdens; and • overall domestic and global economic conditions.

Numerous factors beyond our control affect our customers’ decisions regarding their level of exploration and production activity at any given time and, therefore, have an impact on the level of demand for our services at such time, including: • the global supply of, and demand for, oil and natural gas; • the cost of exploring for, developing, producing and delivering oil and natural gas; • the supply of and demand for drilling and hydraulic fracturing equipment; • the expected decline of rates of current oil and gas production; • any actual or perceived difficulty or inability to acquire or maintain necessary permits or mining or water rights; • the social, political and economic conditions in oil and natural gas producing countries and regions, including developments related to the ongoing wars between Russia and Ukraine and Israel and Hamas; • any actions by the members of OPEC+ and other oil-producing countries with respect to oil production levels and announcements of potential changes in such levels; • the level of consumer acceptance of and demand for fossil fuel products; • negative shifts in investor sentiment of the oil and gas industry; • contractions in the credit market; • the strength or weakness of the U.S. dollar; • inflationary factors, such as increases in the labor costs, material costs and overhead costs; • the availability of pipeline and other transportation capacity; • the levels of oil and natural gas storage; • any adverse weather conditions or natural disasters; • any technological advances affecting energy consumption; • the price and availability of alternative fuels and energy sources; • merger and divestiture activity among oil and natural gas producers, including consolidation activity that may eliminate some of our customers or increase their leverage in negotiations with us; • competition among oilfield service and equipment providers; • changes in transportation regulations that result in increased costs or administrative burdens; and • overall domestic and global economic conditions.

In addition, a material weakness in the effectiveness of our internal control over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition. 30 Table of Contents Our stock price may be volatile, which could lead to losses by investors.

Consequently, unless we revise our dividend policy and are released of the provisions in our loan agreements that restrict the payment of dividends, your only opportunity to achieve a return on your investment in us will be if you sell your Class A Common Stock at a price greater than the price that you paid for it.

Consequently, unless we revise our dividend policy, receive permission from the holders of our Series A Preferred Stock pursuant to the Series A Certificate of Designation, and are released of the provisions in our loan agreements that restrict the payment of dividends, your only opportunity to achieve a return on your investment in us will be if you sell 34 Table of Contents your Class A Common Stock at a price greater than the price that you paid for it.

Even if we can obtain capital from alternative sources, the terms of such fundings may not be favorable to us. In particular, the terms of any debt financing may include covenants that significantly restrict our operations. Our inability to grow as planned may reduce our chances of maintaining and improving profitability.

The market price of our Class A Common Stock could vary significantly as a result of a number of factors, some of which are beyond ProFrac’s control.

Our stock price may be volatile, which could lead to losses by investors. The market price of our Class A Common Stock could vary significantly as a result of a number of factors, some of which are beyond ProFrac’s control.

Risks Related to our Growth Strategy To achieve our growth and vertical integration objectives, our management relies on a rapid succession of strategic acquisitions, investments and procurement arrangements the pace and scope of which may have the potential to adversely affect the day-to-day operation of our business, and our cash flows, financial condition and results of operations.

Additional risks and uncertainties not currently known to us, or that we currently deem immaterial, may also adversely affect our business, financial condition, results of operations, or cash flows. 17 Table of Contents Risks Related to our Growth Strategy To achieve our growth and vertical integration objectives, our management relies on a rapid succession of strategic acquisitions, investments and procurement arrangements the pace and scope of which may have the potential to adversely affect the day-to-day operation of our business, and our cash flows, financial condition and results of operations.

Such liability is commonly on a strict, joint and several liability basis, without regard to fault or negligence. Liability may be imposed as a result of our conduct that was lawful at the time it occurred or the conduct of, or conditions caused by, prior operators or other third parties.

Liability may be imposed as a result of our conduct that was lawful at the time it occurred or the conduct of, or conditions caused by, prior owners or operators or other third parties without regard to fault or the legality of the conduct at the time.

Disclosure of our proprietary chemical information to third parties or to the public, even if inadvertent, could diminish the value of our trade secrets or those of our chemical suppliers and could result in competitive harm to us, which could have an adverse impact on our business, financial condition, prospects and results of operations. 26 Table of Contents Supply chain issues, moratoriums, and increased regulatory requirements on our suppliers may impact the cost and availability of raw materials necessary to our operations.

We may have difficulty managing growth in our business, which could adversely affect our financial condition and results of operations. Growth in accordance with our business strategy, if achieved, could place a significant strain on our financial, operational and management resources.

Our inability to grow as planned may reduce our chances of maintaining and improving profitability. 18 Table of Contents We may have difficulty managing growth in our business, which could adversely affect our financial condition and results of operations. Growth in accordance with our business strategy, if achieved, could place a significant strain on our financial, operational and management resources.

There are numerous uncertainties inherent in estimating quantities and qualities of commercial silica reserves and non-reserve commercial silica deposits and costs to mine recoverable reserves, many of which are beyond our control and any of which could cause actual results to differ materially from our expectations.

There are numerous uncertainties inherent in estimating quantities and qualities of frac sand reserves and resources, many of which are beyond our control and any of which could cause actual results to differ materially from our expectations.

If we are unable to successfully or timely integrate acquired assets with our business, we may incur unanticipated liabilities and be unable to realize the anticipated benefits, and our business, results of operations and financial condition could be materially and adversely affected. 21 Table of Contents Our indebtedness and liquidity needs could restrict our operations and make us more vulnerable to adverse economic conditions.

For example, since we consummated our IPO, the closing sales price of our Class A Common Stock has fluctuated from a high of $25.72 per share on November 22, 2022, to a low of $11.04 per share on March 23, 2023.

For example, since we consummated our IPO, the closing sales price of our Class A Common 31 Table of Contents Stock has fluctuated from a high of $25.72 per share on November 22, 2022, to a low of $6.73 per share on February 14, 2024.

Finally, many scientists have concluded that increasing concentrations of GHG in the atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, and floods and other climate events that could have an adverse effect on our customers’ operations.

One or more of these developments could have a material adverse effect on our business, financial condition and results of operation. 27 Table of Contents Finally, many scientists have concluded that increasing concentrations of GHG in the atmosphere may have significant physical climate effects, such as increased frequency and severity of storms, droughts, and floods and other climate events that could have an adverse effect on our and our customers’ operations.

The loss of their services could adversely affect our business. In particular, the loss of the services of one or more members of our executive team, including our Chief Executive Officer, Executive Chairman, Chief Operating Officer, Chief Legal Officer and Chief Financial Officer, could disrupt our operations.

The loss of their services could adversely affect our business. In particular, the loss of the services of one or more members of our executive team, including our Chief Executive Officer, Executive Chairman, Chief Financial Officer and Chief Legal Officer, could disrupt our operations. We do not maintain “key person” life insurance policies on any of our employees.

Risks Related to Environmental and Regulatory Matters Our operations and the operations of our customers are subject to environmental, health and safety laws and regulations, and future compliance, claims, and liabilities relating to such matters may have a material adverse effect on our results of operations, financial position or cash flows.

In addition, we do not have the ability to access or deploy Flotek’s cash or liquidity in our operations, which may limit our ability to mitigate the impact of the inclusion of Flotek’s financial statements in our consolidated financial statements. 25 Table of Contents Risks Related to Environmental and Regulatory Matters Our operations and the operations of our customers are subject to environmental, health and safety laws and regulations, and future compliance, claims, and liabilities relating to such matters may have a material adverse effect on our results of operations, financial position or cash flows.

However, as of December 31, 2022, only 22.0% of our pumps rely on electric frac or Tier IV DGB technology (which we consider to be the most environmentally friendly currently available technologies used in our industry).

As of December 31, 2023, approximately 75% of our pumps rely on electric frac or natural gas burning engine technology (which we consider to be currently the most environmentally friendly available technologies used in our industry).

In addition, certain change of control events will have the effect of accelerating the payments due under the Tax Receivable Agreement, which could be substantial and accordingly serve as a disincentive to a potential acquirer of the Company. 32 Table of Contents Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

We do not presently anticipate paying cash dividends on our Class A Common Stock and our existing debt agreements place restrictions on our ability to do so. Consequently, your only opportunity to achieve a return on your shares of Class A Common Stock is if the price of our Class A Common Stock appreciates.

Consequently, your only opportunity to achieve a return on your shares of Class A Common Stock is if the price of our Class A Common Stock appreciates. While we look forward to the opportunity to pay dividends in the future, we do not presently anticipate paying any cash dividends on our Class A Common Stock in the foreseeable future.

Our certificate of incorporation authorizes our board of directors to, without stockholder approval, issue preferred stock in one or more series, and to fix the rights and preferences of each series. If our board of directors elects to issue preferred stock, it could be more difficult for a third party to acquire us.

If our board of directors elects to issue preferred stock in addition to the Series A Preferred Stock, it could be more difficult for a third party to acquire us.

For a discussion of the risks inherent in our mineral resource and reserve estimates, please refer to Item 1A, Risk Factors - Risks Related to Our Business - Inaccuracies in our estimates of mineral reserves and resource deposits, or deficiencies in our title to those deposits, could result in our inability to mine the deposits or require us to pay higher than expected costs.

Inaccuracies in our estimates of frac sand mineral reserves and resource deposits, or deficiencies in our title to those deposits, could result in our inability to mine the deposits or require us to pay higher than expected costs.

Enhanced climate disclosure requirements could accelerate the trend of certain stakeholders and lenders restricting or seeking more stringent conditions with respect to their investments in certain carbon intensive sectors. 27 Table of Contents Additionally, political, litigation and financial risks may result in our customers restricting or canceling production activities, incurring liability for infrastructure damages as a result of climatic changes, or impairing their ability to continue to operate in an economic manner, which also could reduce the demand for our services.

Additionally, political, litigation and financial risks may result in our customers restricting or canceling production activities, incurring liability for infrastructure damages as a result of climate change, or impairing their ability to continue to operate in an economic manner, which also could reduce the demand for our services and products.

Oil and natural gas companies’ operations using hydraulic fracturing are substantially dependent on the availability of water. Restrictions on the ability to obtain water for E&P activities and the disposal of flowback and produced water may impact their operations and have a corresponding adverse effect on our business, results of operations and financial condition.

Restrictions on the ability to obtain water and the disposal of flowback and produced water may impact their and our operations and have a corresponding adverse effect on our business, results of operations and financial condition. Water is an essential component of shale oil and natural gas production during both the drilling and hydraulic fracturing processes.

Our customers’ inability to locate or contractually acquire and sustain the receipt of sufficient amounts of water could adversely impact their E&P operations and have a corresponding adverse effect on our business, results of operations and financial condition. 23 Table of Contents Moreover, the imposition of new environmental regulations and other regulatory initiatives could include increased restrictions on our producing customers’ ability to dispose of flowback and produced water generated by hydraulic fracturing or other fluids resulting from E&P activities.

Moreover, the imposition of new environmental regulations and other regulatory initiatives could include increased restrictions on our producing customers’ ability to dispose of flowback and produced water generated by hydraulic fracturing or other fluids resulting from E&P activities.

Governmental agencies, citizen organizations, neighboring landowners and other third parties may file claims against us for personal injury or property damage allegedly caused by the release of pollutants into the environment. Costs associated with defending against these claims and any actual liabilities could impact our profitability. Changes in laws or government regulations could increase our costs of doing business.

The impact 28 Table of Contents of the changing demand for oil and natural gas services and products, and proposed laws and regulations, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

The impact of the changing demand for oil and natural gas services and products, and proposed laws and regulations, may have a material adverse effect on our business, financial condition, results of operations and cash flows. 28 Table of Contents The commercial development of economically viable non-fossil fuel energy sources and related products (such as electric vehicles, wind, solar, geothermal, tidal, fuel cells and biofuels) could have a similar effect.

As explained in greater detail under Item 1 ( Business ) above, these acquisitions, investments and transactions include: • Our $29.5 million procurement arrangements with, and investments in, Flotek Industries, Inc. in February and June of 2022, • Our $46.0 million additional investment in Basin Production and Completion LLC in February 2022, • Our $405.7 million acquisition of FTSI in March 2022, • Our $97.4 million acquisition of SP Silica of Monahans, LLC and SP Silica Sales, LLC in July 2022, • Our $479.1 million acquisition of USWS in November 2022, • Our $164.6 million acquisition of Monarch Silica, LLC and related real estate in December 2022, and • Our $145.2 million acquisition of REV in December 2022. 20 Table of Contents In addition, in December 2022 we also announced our agreements to acquire Producers and Performance Proppants for approximately $35.0 million and $475.0 million, respectively, in total consideration value.

These acquisitions, investments and transactions include: • Our $29.5 million procurement arrangements with, and investments in, Flotek Industries, Inc. in February and June of 2022, • Our $46.0 million additional investment in Basin Production and Completion LLC in February 2022, • Our $405.7 million acquisition of FTSI in March 2022, • Our $97.4 million acquisition of SP Silica of Monahans, LLC and SP Silica Sales, LLC in July 2022, • Our $479.1 million acquisition of USWS in November 2022, • Our $164.6 million acquisition of Monarch Silica, LLC and related real estate in December 2022, • Our $145.2 million acquisition of REV in December 2022, • Our $36.5 million acquisition of Producers Service Holdings LLC in January 2023, and • Our $462.8 million acquisition of Performance Proppants, LLC, Red River Land Holdings, LLC, Performance Royalty, LLC, Performance Proppants International, LLC and Sunny Point Aggregates, LLC in February 2023.

Limitation of investments in and financing for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities.

Limitation of investments in and financing for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities, which could reduce the demand for our services and products and have a material adverse effect on our business, financial condition and results of operation.

If we do not commence mining activities by January 1, 2032, our lease of this property would terminate and we would lose our interest in these reserves. We may be subject to claims for personal injury and property damage, which could materially adversely affect our financial condition and results of operations.

If we do not commence mining activities by January 1, 2032, our lease of this property would terminate and we would lose our interest in these reserves.

Such new species designations or more restrictive rules could materially restrict use of or access to federal, state and private lands.

Changes to existing rules could increase the portion of our or our customers’ operating areas that could be designated as critical habitat. Such new species designations or more restrictive rules could materially restrict use of or access to federal, state and private lands.

Environmental, health and safety laws and regulations are constantly evolving, and they may change in the future and become more stringent. Current and future claims and liabilities may have a material adverse effect on us because of potential adverse outcomes, defense costs, diversion of management resources, unavailability of insurance coverage and other factors.

Current and future claims and liabilities may have a material adverse effect on us because of potential adverse outcomes, defense costs, diversion of management resources, unavailability of insurance coverage and other factors. The ultimate costs of these liabilities are difficult to determine and may exceed any reserves we may have established.

The EPA already imposes limitations on methane emissions from new sources in the oil and gas sector through NSPS and the EPA’s November 2022 proposed rule seeks to further reduce emissions of methane and other air pollutants from both new and existing oil and gas operations.

The EPA already imposes limitations on methane emissions from new sources in the oil and gas sector through NSPS and the EPA’s final rule, announced on December 2, 2023, reduces emissions of methane and other air pollutants from both new and existing oil and natural gas operations and provides emissions guidelines for states to follow in designing and executing implementation plans to cover existing sources.

While we look forward to the opportunity to pay dividends in the future, we do not presently anticipate paying any cash dividends on our Class A Common Stock in the foreseeable future. In addition, our existing debt agreements place, and we expect our future debt agreements will place, restrictions on our ability to pay cash dividends.

We do not presently anticipate paying cash dividends on our Class A Common Stock and our existing debt agreements, as well as the Series A Certificate of Designation, place restrictions on our ability to do so.

In addition, we may issue in the future additional shares of our Class A Common Stock, or securities convertible into Class A Common Stock, which may further adversely affect the trading price of our shares and dilute existing shareholders. 33 Table of Contents ProFrac Holding Corp. is required to make payments under the Tax Receivable Agreement for certain tax benefits that it may claim, and the amounts of such payments could be significant.

Similarly, USWS, our recently acquired company, reported that for its fiscal years ended on December 31, 2021 and 2020, each of three and five customers, respectively, accounted for greater than 10.0% of its total consolidated revenues. It is likely that we will depend on a relatively small number of customers for a significant portion of our revenue in the future.

During the fiscal years ended on December 31, 2023, 2022 and 2021, our top ten customers represented, respectively, 41%, 35% and 63% of our consolidated revenues. 21 Table of Contents It is likely that we will depend on a relatively small number of customers for a significant portion of our revenue in the future.

One or more of these developments could have a material adverse effect on our business, financial condition and results of operation.

Any such pending or future claims or inadequacies of our insurance coverage could have a material adverse effect on our business, reputation, financial condition and results of operations.

There is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector.

There is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector. Enhanced climate disclosure requirements could accelerate the trend of certain stakeholders and lenders restricting or seeking more stringent conditions with respect to their investments in certain carbon intensive sectors.

The majority of our revenue is generated from the provision of hydraulic fracturing services to a discrete number of recurring customers. During the fiscal years ended on December 31, 2022, 2021 and 2020, our top ten customers represented, respectively, 35%, 63% and 70% of our consolidated revenues.

The majority of our revenue is generated from the provision of hydraulic fracturing services to a discrete number of recurring customers.

As of March 23, 2023, we had 54,702,269 shares of our Class A Common Stock outstanding, approximately 2,542,708 shares of Class A Common Stock remained available for issuance under our long-term incentive plan, and the Wilks Parties owned 97,447,865 shares of our Class B Common Stock which are freely convertible into Class A Common Stock on a one-for-one basis, all of which we are required to register for resale upon their demand.

As of December 31, 2023, we had 159,388,841 shares of our Class A Common Stock outstanding, and approximately 2,542,708 shares of Class A Common Stock remained available for issuance under our long-term incentive plan. The Wilks Parties owned 134,458,994 shares of our outstanding Class A Common Stock at March 11, 2024.

That occurrence would substantially and adversely affect our ability to continue operating our business and would severely and adversely affect our cash flows and financial condition and results. We may not be able to generate sufficient cash flow to service all of our obligations, including our obligations under our credit and other financing facilities.

As a result, increases in interest rates could increase the cost of servicing such indebtedness and materially reduce our profitability, financial condition and cash flows. We may not be able to generate sufficient cash flow to service all of our obligations, including our obligations under our credit and other financing facilities.

The listing of new species under the ESA in the areas where our customers operate similarly has the potential to adversely impact our operations and demand for our services as a result of restrictions on oil and gas activities.

The listing of new species under the ESA or the designation of previously unidentified species in the areas where we or our customers operate similarly has the potential to adversely impact our operations and the operations of our customers, including by causing our operations to become subject to operating restrictions or bans and limiting future development activity in affected areas.

Our level of indebtedness may affect our operations in several ways, including: • increasing our vulnerability to general adverse economic and industry conditions; • limiting our ability to borrow additional funds, dispose of assets, pay dividends, or make certain investments; and • limiting our flexibility in planning for, and reacting to, changes in the economy and in our industry.

Our level of indebtedness may affect our operations in several ways, including: • increasing our vulnerability to general adverse economic and industry conditions; • requiring us to dedicate a substantial portion of cash flow from operations to making payments on our indebtedness, thereby reducing the availability of cash flow to fund working capital, acquisitions and capital expenditures; • restricting us from exploiting business opportunities; • making it more difficult to satisfy our financial obligations, including payments on our indebtedness; • placing us at a disadvantage compared to our competitors that have less debt obligations; • limiting our ability to refinance our current indebtedness or borrow additional funds for working capital, capital expenditures, acquisitions or certain investments or execute on our business strategy; and • limiting our flexibility in planning for, and reacting to, changes in the economy and in our industry.

Our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having the designations, preferences, limitations and relative rights, including preferences over our Class A Common Stock respecting dividends and distributions, that our board of directors may determine.

Our certificate of incorporation authorizes our board of directors to issue preferred stock without stockholder approval (other than the approval in certain circumstances of the holders of the Series A Preferred Stock) in one or more series, designate the number of shares constituting any series, and fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series.

In addition, we may lose market share or be unable to maintain or increase prices for our present services or to acquire additional business opportunities, which could also have a material adverse effect on our business, financial condition, results of operations and cash flows.

Such litigation against our customers could reduce the demand for our products and services, which could have a material adverse effect on our business, financial condition and results of operation.

Removed

Additional risks and uncertainties not currently known to us, or that we currently deem immaterial, may also adversely affect our business, financial condition, results of operations, or cash flows.

Added

Our indebtedness could adversely affect our financial flexibility and competitive position and make us more vulnerable to adverse economic conditions. As of December 31, 2023, we had outstanding principal indebtedness of $1,107.9 million.

Removed

Accordingly, it would be unwise for anyone to expect the recent recovery of the sector to be of unlimited duration, or to disregard the likelihood (even certainty) of turbulent times in the foreseeable future.

Added

See “Note 6 – Debt” in the notes to our consolidated financial statements for more details on our debt including the portion of our outstanding principal that matures in the year ending December 31, 2024.

Removed

Water is an essential component of shale oil and natural gas production during both the drilling and hydraulic fracturing processes.

Added

That occurrence would substantially and adversely affect our ability to continue operating our business and would severely and adversely affect our cash flows and financial condition and results. Restrictions in our debt agreements and any future financing agreements may limit our ability to finance future operations, meet capital needs or capitalize on potential acquisitions and other business opportunities.

Removed

We do not maintain “key person” life insurance policies on any of our employees.

Added

Our debt agreements contain, and any future financing agreements we may enter into will likely contain, operating and financial restrictions and covenants that may restrict our ability to finance future operations or capital needs, or to engage in, expand or pursue our business activities.

Removed

As a result, we are not insured against any losses resulting from the death of our key employees. 24 Table of Contents Inaccuracies in our estimates of mineral reserves and resource deposits, or deficiencies in our title to those deposits, could result in our inability to mine the deposits or require us to pay higher than expected costs.

Added

For example, our credit agreements restrict or limit our ability to: • grant liens; • incur additional indebtedness; • engage in a merger, consolidation or other fundamental transactions; • enter into transactions with affiliates or amend material agreements; • sell or otherwise dispose of assets, businesses and operations; • make acquisitions, investments and capital expenditures; and 19 Table of Contents • declare and pay distributions and dividends.

Removed

Added

Our compliance with these provisions may materially adversely affect our ability to react to changes in market conditions, take advantage of business opportunities we believe to be desirable, obtain future financing, fund needed capital expenditures, finance acquisitions, equipment purchases and development expenditures, or withstand a future downturn in our business.

Removed

The nature of our operations and those of our customers, including our pressure pumping operations and the handling, transporting and disposing of a variety of fluids and substances, including hydraulic fracturing fluids and other regulated substances, air emissions, and wastewater, stormwater, and groundwater discharges exposes us and our customers to some risk of environmental liability, including the release of pollutants from oil and natural gas wells and associated equipment to the environment.

Added

Furthermore, our debt agreements contain certain other operating and financial covenants. Our ability to comply with the covenants and restrictions contained in our debt agreements may be affected by events beyond our control, including prevailing economic, financial and industry conditions. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired.

Removed

We are also subject to laws and regulations associated with sand mining and equipment manufacturing operations, including the processing, and the related storage, handling, transportation and disposal of raw materials, products and wastes. The cost of compliance with these laws can be significant.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

4 edited+0 added−0 removed6 unchanged

2022 filing

2023 filing

Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Class A Common Stock and Warrants are currently quoted on Nasdaq under the symbols “ACDC” and “ACDCW,” respectively. There is no public market for our Class B Common Stock.

Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Class A Common Stock is currently quoted on Nasdaq under the symbol “ACDC.” There is no public market for our Class B Common Stock or our Series A Preferred Stock.

The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this Annual Report on Form 10-K. 44 Table of Contents PA RT II I t em 5.

Issuer Purchases of Equity Securities During the quarter ended December 31, 2022, we did not repurchase any of our equity securities. I t em 6. [Reserved] 45 Table of Contents

Issuer Purchases of Equity Securities During the quarter ended December 31, 2023, we did not repurchase any of our equity securities. I t em 6. [Reserved] 50 Table of Contents

Holders of our Class A Common Stock As of March 23, 2023, there were 51 holders of record of our Class A Common Stock and 7 holders of record of our Class B Common Stock.

Holders of our Class A Common Stock As of March 11, 2024, there were 58 holders of record of our Class A Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

291 edited+233 added−323 removed128 unchanged

2022 filing

2023 filing

Biggest changeCONSOLIDATED STATEMEN TS OF CHANGES IN EQUITY (in millions) Members' Class A Common Stock Class B Common Stock Additional Retained Earnings Accumulated Other Comprehensive Noncontrolling Total Equity Equity Shares Amount Shares Amount Paid-in Capital (Deficit) Income Interests (Deficit) Balance, December 31, 2019 $ 281.9 - $ - - $ - $ - $ - $ - $ 2.9 $ 284.8 Net loss ( 117.4 ) - - - - - - - ( 1.1 ) ( 118.5 ) Member contribution by debt retirement 10.5 - - - - - - - - 10.5 Balance, December 31, 2020 $ 175.0 - $ - - $ - $ - $ - $ - $ 1.8 $ 176.8 Net loss ( 42.4 ) - - - - - - - ( 1.1 ) ( 43.5 ) Member contribution by debt retirement 18.0 - - - - - - - - 18.0 Purchase of noncontrolling interests ( 3.6 ) - - - - - - - ( 0.9 ) ( 4.5 ) Noncontrolling interest of acquired business - - - - - - - - 1.2 1.2 Foreign currency translation - - - - - - - 0.1 - 0.1 Balance, December 31, 2021 $ 147.0 - $ - - $ - $ - $ - $ 0.1 $ 1.0 $ 148.1 Net income (loss) 73.6 - - - - - 91.5 - ( 28.4 ) 136.7 Member contributions 5.0 - - - - - - - - 5.0 Deemed distribution ( 3.7 ) - - - - - - - - ( 3.7 ) THRC related equity 72.9 - - - - - - - - 72.9 Issuance of Class A shares in IPO - 18.2 0.2 - - 227.5 - - - 227.7 Issuance of Class B shares - - - 101.1 1.0 - - - - 1.0 Effect of corporate reorganization and reclassification to redeemable noncontrolling interest ( 294.8 ) 20.9 0.2 - - ( 82.9 ) - - - ( 377.5 ) Adjustment of redeemable noncontrolling interest to redemption amount at IPO - - - - - ( 146.4 ) ( 1,291.9 ) - - ( 1,438.3 ) Class A shares issued to settle asset purchase - 2.1 - - - 16.7 - - - 16.7 Noncontrolling interest of acquired business - - - - - - - - 99.0 99.0 Purchase of noncontrolling interest - - - - - - - - ( 1.7 ) ( 1.7 ) Class A shares issued to acquire USWS - 12.9 0.1 - - 134.6 - - - 134.7 Class A shares issued for vested stock awards - - - - - 0.1 - - - 0.1 Tax withholding related to net share settlement of equity awards - ( 0.2 ) - - - ( 2.0 ) - - - ( 2.0 ) Class B shares issued to acquire REV - - - 3.1 - 20.4 - - - 20.4 Additional paid-in capital related to tax receivable agreement - - - - - 0.6 - - - 0.6 Stock-based compensation - - - - - 1.9 - - 2.2 4.1 Stock-based compensation related to deemed contribution - - - - - 17.7 - - - 17.7 Foreign currency translation adjustments - - - - - - - ( 0.1 ) 0.1 - Other - - - - - 0.1 - - - 0.1 Adjustment of redeemable noncontrolling interest to redemption amount - - - - - ( 188.3 ) 14.5 - - ( 173.8 ) Balance, December 31, 2022 $ - 53.9 $ 0.5 104.2 $ 1.0 $ - $ ( 1,185.9 ) $ - $ 72.2 $ ( 1,112.2 ) The accompanying notes are an integral part of these consolidated financial statements. 70 Table of Contents ProFrac Holding Corp.

Biggest changeCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in millions) Members' Class A Common Stock Class B Common Stock Additional Paid-in Accumulated Accumulated Other Comprehensive Noncontrolling Total Stockholders' Equity Equity Shares Amount Shares Amount Capital Deficit Income Interests (Deficit) Balance, December 31, 2020 $ 175.0 — $ — — $ — $ — $ — $ — $ 1.8 $ 176.8 Net loss ( 42.4 ) — — — — — — — ( 1.1 ) ( 43.5 ) Member contribution by debt retirement 18.0 — — — — — — — — 18.0 Purchase of noncontrolling interests ( 3.6 ) — — — — — — — ( 0.9 ) ( 4.5 ) Noncontrolling interest of acquired business — — — — — — — — 1.2 1.2 Foreign currency translation — — — — — — — 0.1 — 0.1 Balance, December 31, 2021 $ 147.0 — $ — — $ — $ — $ — $ 0.1 $ 1.0 $ 148.1 Net income (loss) 73.6 — — — — — 91.5 — ( 28.4 ) 136.7 Member contribution 5.0 — — — — — — — — 5.0 Deemed distribution ( 3.7 ) — — — — — — — — ( 3.7 ) THRC related equity 72.9 — — — — — — — — 72.9 Issuance of Class A shares in IPO — 18.2 0.2 — — 227.5 — — — 227.7 Issuance of Class B shares at par value for cash — — — 101.1 1.0 — — — — 1.0 Effect of corporate reorganization and reclassification to redeemable noncontrolling interest ( 294.8 ) 20.9 0.2 — — ( 82.9 ) — — — ( 377.5 ) Adjustment of redeemable noncontrolling interest to redemption amount at inception — — — — — ( 146.4 ) ( 1,291.9 ) — — ( 1,438.3 ) Class A shares issued to settle asset purchase — 2.1 — — — 16.7 — — — 16.7 Noncontrolling interest of consolidated business — — — — — — — — 99.0 99.0 Purchase of noncontrolling interest — — — — — — — — ( 1.7 ) ( 1.7 ) Class A shares issued to acquire USWS — 12.9 0.1 — — 134.6 — — — 134.7 Class A shares issued for vested stock awards — — — — — 0.1 — — — 0.1 Tax withholding related to net share settlement of equity awards — ( 0.2 ) — — — ( 2.0 ) — — — ( 2.0 ) Class B shares issued to acquire REV — — — 3.1 — 20.4 — — — 20.4 Additional paid-in capital related to tax receivable agreement — — — — — 0.6 — — — 0.6 Stock-based compensation — — — — — 1.9 — — 2.2 4.1 Stock-based compensation related to deemed contribution — — — — — 17.7 — — — 17.7 Foreign currency translation adjustments — — — — — — — ( 0.1 ) 0.1 — Other — — — — — 0.1 — — — 0.1 Adjustment of redeemable noncontrolling interest to redemption amount — — — — — ( 188.3 ) 14.5 — — ( 173.8 ) Balance, December 31, 2022 $ — 53.9 $ 0.5 104.2 $ 1.0 $ — $ ( 1,185.9 ) $ — $ 72.2 $ ( 1,112.2 ) The accompanying notes are an integral part of these consolidated financial statements. 72 Table of Contents ProFrac Holding Corp.

Our predecessor consists of ProFrac LLC and its subsidiaries, Best Pump & Flow LP (“Best Flow”) and Alpine Silica, LLC (“Alpine”), (which we refer to as “ProFrac Predecessor”) on a consolidated basis. Historical periods for ProFrac Predecessor had been presented on a consolidated and combined basis given the common control ownership the Wilks Parties.

We establish an allowance for credit losses to reduce the carrying value of our accounts receivable based on a number of factors, including the length of time that accounts receivable are past due, our previous loss history, and the customer’s creditworthiness. Losses are charged against the allowance when the customer accounts are determined to be uncollectible.

Allowance for Credit Losses We establish an allowance for credit losses to reduce the carrying value of our accounts receivable based on a number of factors, including the length of time that accounts receivable are past due, our previous loss history, and the customer’s creditworthiness. Losses are charged against the allowance when the customer accounts are determined to be uncollectible.

Adjustments to the fair values of assets acquired and liabilities assumed are made until we obtain all relevant information regarding the facts and circumstances that existed as of the acquisition date (the “measurement period”), not to exceed one year from the date of the acquisition.

The estimates of fair value are also subject to significant variability, are sensitive to changes in market conditions, and are reasonably likely to change in the future. A significant change in the observable and unobservable inputs and determination of fair value of the assets and liabilities acquired could significantly impact our consolidated financial statements.

Income Taxes Before May 17, 2022, the ProFrac Predecessor entities were organized as limited liability companies or a limited partnership and were treated as either a disregarded entity or a partnership for U.S. federal income tax purposes, whereby the ordinary business income or loss and certain deductions were passed-through and reported on the members’ income tax returns.

STOCK-BASED COMPENSATION Stock-based Compensation Related to Deemed Contributions In connection with the Company’s IPO, our majority shareholders, Farris Wilks (“Farris”) and Dan Wilks (“Dan”) (together with certain family members or entities they control), sold Units representing approximately 1 % of the equity interest in ProFrac LLC to an entity controlled by our Chief Executive Officer, Ladd Wilks (“Ladd”), and our Executive Chairman, Matt Wilks (“Matt”), respectively.

Stock-based Compensation Related to Deemed Contributions In connection with the Company’s IPO, our majority shareholders, Farris Wilks (“Farris”) and Dan Wilks (“Dan”) (together with certain family members or entities they control), sold Units representing approximately 1 % of the equity interest in ProFrac LLC to an entity controlled by our Chief Executive Officer, Ladd Wilks (“Ladd”), and our Executive Chairman, Matt Wilks (“Matt”), respectively.

INCOME TAXES Before May 17, 2022, the ProFrac Predecessor entities were organized as limited liability companies or a limited partnership and were treated as either a disregarded entity or a partnership for U.S. federal income tax purposes, whereby the ordinary business income or loss and certain deductions were passed-through and reported on the members’ income tax returns.

Amounts paid to Automatize include costs passed through to third-party trucking companies and a commission retained by Automatize. These payments are recorded in cost of revenues, exclusive of depreciation and depletion on our consolidated statements of operations. Cisco Logistics, LLC (“Cisco Logistics”) is a logistics company that delivers sand and equipment on behalf of its customers, including the Company.

Amounts paid to Automatize include costs passed through to third-party trucking companies and a commission retained by Automatize. These payments are recorded in cost of revenues, exclusive of depreciation and depletion in our consolidated statements of operations. • Cisco Logistics, LLC (“Cisco Logistics”) is a logistics company that delivers sand and equipment on behalf of its customers, including the Company.

(the “FTSI Merger Agreement”), ProFrac LLC distributed the 80.5 % of the FTSI equity it acquired in such merger to Farris Wilks and THRC Holdings in a manner that resulted in each of them owning 50.0 % of FTSI (the “FTSI Distribution”), with THRC Holdings receiving a smaller share of the FTSI Distribution and instead retaining certain preferred equity in ProFrac LLC in lieu of its redemption in connection with such distribution.

(the “FTSI Merger Agreement”), ProFrac LLC distributed the 80.5 % of the FTSI equity it acquired in such merger to Farris Wilks and THRC Holdings in a manner that resulted in each of them owning 50.0 % of FTSI (the “FTSI Distribution”), with THRC Holdings receiving a smaller share of the FTSI Distribution and instead receiving certain preferred equity in ProFrac LLC in lieu of its redemption in connection with such distribution.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission for annual financial information.

SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission for annual financial information.

The fair value of time-based restricted stock units is determined based on the number of units granted and the closing price of our Class A Common Stock on the date of grant. Stock-based awards with market conditions are valued using a Monte Carlo simulation analysis.

The fair value of time-based and performance-based restricted stock units is determined based on the number of units granted and the closing price of our Class A Common Stock on the date of grant. Stock-based awards with market conditions are valued using a Monte Carlo simulation analysis.

We did not audit the financial statements of Flotek Industries, Inc., a consolidated variable interest entity, which statements reflect total assets constituting 3% of consolidated total assets as of December 31, 2022, and total revenues of 2% of consolidated total revenues for the year then ended.

We did not audit the financial statements of Flotek Industries, Inc., a consolidated variable interest entity as of and for the period ended December 31, 2022, which statements reflect total assets constituting 3% of consolidated total assets as of December 31, 2022, and total revenues of 2% of consolidated total revenues for the year then ended.

The Company was in compliance with all covenants, and there were no existing defaults or events of default related to the 2022 ABL Credit Facility as of December 31, 2022.

The Company was in compliance with all covenants, and there were no existing defaults or events of default related to the 2022 ABL Credit Facility as of December 31, 2023.

While many of these matters involve inherent uncertainty, we believe that, other than as described below, the amount of the liability, if any, ultimately incurred with respect to proceedings or claims will not have a material adverse effect on our consolidated financial position as a whole or on our liquidity, capital resources or future annual results of operations. U.S.

The contract assets are tested for recoverability on a recurring basis 65 Table of Contents and the Company will recognize an impairment loss to the extent that the carrying amount of the contract assets exceeds the amount of revenue the Company expects to receive in the future for the transfer of goods under the long-term supply agreement and the amendment to that agreement (collectively, the ProFrac Agreement) less the direct costs that relate to providing those goods in the future.

The contract assets are tested for recoverability on a recurring 66 Table of Contents basis and the Company will recognize an impairment loss to the extent that the carrying amount of the contract assets exceeds the amount of revenue the Company expects to receive in the future for the transfer of goods under the long-term supply agreement and the amendment to that agreement (collectively, the ProFrac Agreement) less the direct costs that relate to providing those goods in the future.

The following table summarizes the fair value of consideration transferred in the Monarch Acquisition and the allocation of the purchase price to the fair values of assets acquired and liabilities assumed at the Monarch Acquisition Date: Total purchase consideration $ 164.6 Cash and cash equivalents 3.1 Accounts receivable 5.9 Inventories 1.3 Property, plant and equipment 147.9 Operating lease right-of-use assets 0.6 Intangible assets 6.1 Total identifiable assets acquired 164.9 Accounts payable 1.3 Accrued expenses 0.6 Current portion of operating lease liabilities 0.2 Long-term operating lease liabilities 0.4 Total liabilities assumed 2.5 Goodwill 2.2 Total purchase consideration $ 164.6 For the acquired property, plant and equipment, the valuation technique utilized was the cost approach, which adjusted estimates of replacement cost for the age, condition and utility of the associated assets.

The following table summarizes the fair value of consideration transferred in the Monarch Acquisition and the allocation of the purchase price to the fair values of assets acquired and liabilities assumed at the Monarch Acquisition Date: Total purchase consideration $ 166.5 Cash and cash equivalents 3.1 Accounts receivable 5.9 Inventories 1.3 Property, plant and equipment 147.9 Operating lease right-of-use assets 0.6 Intangible assets 6.1 Total identifiable assets acquired 164.9 Accounts payable 1.5 Accrued expenses 0.7 Current portion of operating lease liabilities 0.2 Long-term operating lease liabilities 0.4 Total liabilities assumed 2.8 Goodwill 4.4 Total purchase consideration $ 166.5 For the acquired property, plant and equipment, the valuation technique utilized was the cost approach, which adjusted estimates of replacement cost for the age, condition and utility of the associated assets.

In our opinion, based on our audits and the report of the other auditors, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, based on our audits and the report of the other auditors, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We adopted this guidance using a prospective method of transition, which did not result in a material impact on our consolidated financial statements. 3.

We adopted this guidance using a prospective method of transition, which did not result in a material impact on our consolidated financial statements.

Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the fourth quarter of 2022, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the fourth quarter of 2023, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We assessed the reasonableness of forecasted revenue and costs by considering whether such amounts were consistent with evidence obtained in other areas of the audit. /s/ KPMG LLP We have served as the Company’s auditor since 2021. Houston, Texas March 22, 2023 66 Table of Contents ProFrac Holding Corp.

The 2022 Plan originally allocated 3,120,708 shares of our Class A Common Stock in the form of incentive stock options, non-qualified stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights, or other stock-based awards. As of December 31, 2022 , up to 2,542,639 shares were available for future grants under the 2022 Plan.

The 2022 Plan originally allocated 3,120,708 shares of our Class A Common Stock in the form of incentive stock options, non-qualified stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights, or other stock-based awards. As of December 31, 2023, up to 2,542,708 shares were available for future grants under the 2022 Plan.

There was subjective auditor judgement in evaluating the key assumptions used in the Company’s contract asset recoverability assessment, specifically the forecasted product revenue and related forecasted costs to provide products over the term of the ProFrac Agreement . The following are the primary procedures we performed to address this critical audit matter.

There was subjective auditor judgment in evaluating the key assumptions used in the Company’s contract asset recoverability assessment, specifically the forecasted product revenue and related forecasted costs to provide products over the term of the ProFrac Agreement . The following are the primary procedures we performed to address this critical audit matter.

As a result, we track all stimulation services assets as one group and it would be impracticable to separately report FTSI revenues or pretax earnings subsequent to March 31, 2022. Consolidation of Flotek Industries, Inc. On February 2, 2022, we entered into an agreement with Flotek Industries, Inc.

As a result, we track all stimulation services assets as one group and it would be impracticable to separately report FTSI revenues or pretax earnings subsequent to March 31, 2022. Acquisition of Flotek Industries, Inc. On February 2, 2022, we entered into an agreement with Flotek Industries, Inc.

When preparing our estimates, we consider, among other factors, the progress of each legal proceeding and claim, our experience and the experience of others in similar legal proceedings and claims, and the opinions and views of legal counsel. Legal costs related to litigation contingencies are expensed as incurred. 101 Table of Contents ProFrac Holding Corp.

On February 4, 2022, THRC Holdings entered into a Rights Agreement with Encantor Properties LP, one of the sellers from whom the Company purchased the West Munger property, under which the related party was assigned rights to $ 8.1 million of the $ 30.0 million in consideration related to the West Munger Acquisition.

On February 4, 2022, THRC Holdings entered into a Rights Agreement with Encantar Properties LP, one of the sellers from whom the Company purchased the West Munger property, under which the related party was assigned rights to $ 8.1 million of the $ 30.0 million in consideration related to the West Munger Acquisition.

The following table summarizes the fair value of consideration transferred in the REV Acquisition and the allocation of the purchase price to the fair values of assets acquired and liabilities assumed at the REV Acquisition Date: Total purchase consideration $ 145.2 Cash and cash equivalents 0.2 Accounts receivable 10.7 Prepaid expense and other assets 1.5 Inventories 0.7 Property, plant and equipment 75.0 Intangible assets 53.0 Other assets 0.1 Total identifiable assets acquired 141.2 Accounts payable 14.1 Accrued expenses 2.4 Current portion of debt 1.9 Long-term debt 3.6 Total liabilities assumed 22.0 Goodwill 26.0 Total purchase consideration $ 145.2 For the acquired property, plant and equipment, the valuation technique utilized was the cost approach, which adjusted estimates of replacement cost for the age, condition and utility of the associated assets.

The following table summarizes the fair value of consideration transferred in the REV Acquisition and the allocation of the purchase price to the fair values of assets acquired and liabilities assumed at the REV Acquisition Date: Total purchase consideration $ 140.6 Cash and cash equivalents 0.2 Accounts receivable 10.0 Prepaid expense and other assets 1.5 Inventories 0.7 Property, plant and equipment 75.0 Intangible assets 53.0 Other assets 0.1 Total identifiable assets acquired 140.5 Accounts payable 14.1 Accrued expenses 2.4 Current portion of debt 1.9 Long-term debt 3.6 Total liabilities assumed 22.0 Goodwill 22.1 Total purchase consideration $ 140.6 For the acquired property, plant and equipment, the valuation technique utilized was the cost approach, which adjusted estimates of replacement cost for the age, condition and utility of the associated assets.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

The THRC FTSI Related Equity was the result of a transaction whereby THRC Holdings, which owned approximately 19.5 % of FTSI, agreed to retain that interest in FTSI in lieu of receiving cash pursuant to the FTSI Merger Agreement. 80 Table of Contents ProFrac Holding Corp.

(“Flotek”), pursuant to which Flotek will provide full downhole chemistry solutions for a minimum of ten hydraulic fleets for three years starting on April 1, 2022, at a price of cost plus 7.0 % (“Flotek Supply Agreement”).

(“Flotek”), pursuant to which Flotek would provide full downhole chemistry solutions for a minimum of ten hydraulic fleets for three years starting on April 1, 2022, at a price of cost plus 7.0 % (“Flotek Supply Agreement”).

Our equity ownership in Flotek on a fully diluted basis after the consummation of these transactions was approximately 43.0 %, and we are permitted to designate two additional directors, or up to four directors to Flotek’s board of directors.

Our equity ownership in Flotek on a fully diluted basis after the consummation of these transactions was approximately 43.0 %, and we were permitted to designate two additional directors, or up to four directors to Flotek’s board of directors.

The REV Acquisition was completed on December 30, 2022 (the “REV Acquisition Date”) for (i) equity consideration of 3.1 million shares (of which there is a Holdback Amount, as defined in the REV Purchase Agreement, equivalent to 31.8 thousand shares) of our Class B Common Stock valued at $ 78.0 million based on the REV Acquisition Date closing price of our Class A Common Stock of $ 25.20 , (ii) consideration in the form of a long-term secured note payable to REV Sellers’ Representative (the “REV Note”) valued at its estimated fair value of $ 35.4 million, (iii) contingent consideration with an estimated fair value of $ 6.6 million, and (iv) cash consideration of $ 25.2 million, which included payments of $ 17.4 million and $ 6.0 million for indebtedness and transaction costs, respectively, on behalf of REV.

The REV Acquisition was completed on December 30, 2022 (the “REV Acquisition Date”) for (i) equity consideration of 3.1 million shares (of which there is a Holdback Amount, as defined in the REV Purchase Agreement, equivalent to 31.8 thousand shares) of our Class B Common Stock valued at $ 78.0 million based on the REV Acquisition Date closing price of our Class A Common Stock of $ 25.20 , (ii) consideration in the form of a long-term secured note payable to REV Sellers’ Representative (the “REV Note”) valued at its estimated fair value of $ 36.1 million, (iii) contingent consideration with an estimated fair value of $ 6.6 million, and (iv) cash consideration of $ 19.9 million, which included payments of $ 17.4 million and $ 6.0 million for indebtedness and transaction costs, respectively, on behalf of REV.

Under this method of accounting, the statements of operations, comprehensive income, equity and cash flows have been adjusted to include all activities of the commonly controlled groups for all periods in which common control existed.

Under this method of accounting, the consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows have been adjusted to include all activities of the commonly controlled groups for all periods in which common control existed.

The following table summarizes the fair value of consideration transferred in the USWS Acquisition and the allocation of the purchase price to the fair values of assets acquired and liabilities assumed at the USWS Acquisition Date: Total purchase consideration $ 479.1 Cash and cash equivalents 19.4 Accounts receivable 34.3 Prepaid expense and other assets 9.9 Inventories 18.3 Property, plant and equipment 278.4 Operating lease right-of-use assets 40.9 Intangible assets 136.3 Other assets 0.4 Total identifiable assets acquired 537.9 Accounts payable 68.3 Accrued expenses 13.9 Current portion of debt 13.1 Current portion of operating lease liabilities 24.0 Current portion of finance lease liabilities 1.8 Warrant liabilities 15.6 Long-term debt 27.7 Long-term operating lease liabilities 16.9 Long-term finance lease liabilities 4.9 Total liabilities assumed 186.2 Goodwill 127.4 Total purchase consideration $ 479.1 For the acquired property, plant and equipment, the valuation technique utilized was the cost approach, which adjusted estimates of replacement cost for the age, condition and utility of the associated assets.

The following table summarizes the fair value of consideration transferred in the USWS Acquisition and the allocation of the purchase price to the fair values of assets acquired and liabilities assumed at the USWS Acquisition Date: Total purchase consideration $ 479.1 Cash and cash equivalents 19.4 Accounts receivable 34.3 Prepaid expense and other assets 9.9 Inventories 15.1 Property, plant and equipment 278.4 Operating lease right-of-use assets 40.9 Intangible assets 136.3 Other assets 0.4 Total identifiable assets acquired 534.7 Accounts payable 68.3 Accrued expenses and other current liabilities 19.9 Current portion of debt 13.1 Current portion of operating lease liabilities 24.0 Current portion of finance lease liabilities 1.8 Warrant liabilities 15.6 Long-term debt 27.7 Long-term operating lease liabilities 16.9 Long-term finance lease liabilities 4.9 Total liabilities assumed 192.2 Goodwill 136.6 Total purchase consideration $ 479.1 For the acquired property, plant and equipment, the valuation technique utilized was the cost approach, which adjusted estimates of replacement cost for the age, condition and utility of the associated assets.

During these periods, these customer actions materially adversely affected our business, financial condition and results of operations. Our customers consist primarily of E&P companies in the continental United States. For the year ended December 31, 2022, no individual customer represented more than 10% of our consolidated revenues.

During these periods, these customer actions materially adversely affected our business, financial condition and results of operations. Our customers consist primarily of E&P companies in the continental United States. For the years ended December 31, 2023 and 2022, no individual customer represented more than 10% of our consolidated revenues.

Amounts paid to the Related Lessors are recorded in selling, general and administrative expenses on our consolidated statements of operations. Wilks Construction Company, LLC (“Wilks Construction”) is a construction company that has built and made renovations to several buildings for the Company, including construction of a new sand plant.

Amounts paid to the Related Lessors are recorded in selling, general and administrative expenses in our 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, including construction of a new sand plant in 2022.

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 years ended December 31, 2021 and 2020 have been retrospectively adjusted to present the operations of ProFrac LLC, Best Flow and Alpine on a combined basis.

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 grant date fair value of this award was estimated to be $ 45.2 million and will be recognized over the estimated derived service period of approximately one year .

The grant date fair value of this award was estimated to be $ 45.3 million and will be recognized over the estimated derived service period of approximately one year .

The primary positive evidence we noted was: • Our income before income taxes in 2022 was $ 351.8 million. • We are forecasting that 2023 will be a profitable year.

The primary positive evidence we noted was: • Our income before income taxes in 2022 was $ 351.8 million. • We are forecasting that 2024 will be a profitable year.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion.

Notwithstanding the shift to three-year cumulative income, we concluded that a valuation allowance was still required at December 31, 2022, because it is more likely than not that the deferred tax assets will not be realized. We based this conclusion on the positive and negative evidence discussed below.

Notwithstanding this three-year cumulative income, we concluded that a valuation allowance was still required at December 31, 2023, because it is more likely than not that the deferred tax assets will not be realized. We based this conclusion on the positive and negative evidence discussed below.

In January 2023, USWS filed amended answers to these patent infringement suits counterclaiming for declaratory judgment of invalidity of Halliburton’s patents asserted against USWS in this matter and willful infringement of two additional USWS’ U.S. patents based on Halliburton’s “All-Electric Fracturing Fleet.” In February 2023, Halliburton filed inter partes review petitions against these USWS patents.

These include long-lived assets and liabilities acquired through our business combination activities and purchase consideration in the form of seller-financed long-term notes payable, the fair values of which were determined using applicable valuation models based on significant unobservable inputs classified as level 3 in the fair value hierarchy. See “Note 4 - Business Combinations and Asset Acquisition,” for additional information.

These include long-lived assets and liabilities acquired through our business combination activities and purchase consideration in the form of seller-financed long-term notes payable, the fair values of which were determined using applicable valuation models based on significant unobservable inputs classified as Level 3 in the fair value hierarchy. See “Note 4 – Business Combinations” for additional information.

In exchange for our entry into the amendment to the Flotek Supply Agreement (the “Flotek Supply Agreement Amendment”), Flotek agreed to issue us $ 50.0 million in initial principal amount of Flotek Convertible Notes that will be convertible into Flotek common stock.

In exchange for entry into the Flotek Supply Agreement, we received $ 10.0 million in initial principal amount of convertible notes payable (“Flotek Convertible Notes”) and acquired an additional $ 10.0 million in principal amount of Flotek Convertible Notes in the PIPE Transaction.

The results of operations are not necessarily indicative of results that would have been achieved had we controlled USWS, FTSI, Flotek, Monahans, REV, and Monarch during the periods presented.

The results of operations are not necessarily indicative of results that would have been achieved had we controlled Performance Proppants, Producers, USWS, FTSI, Flotek, Monahans, REV, and Monarch during the periods presented.

Amounts paid to Wilks Construction are recorded in capital expenditures on our consolidated statements of cash flows. 3 Twenty-Three, LLC (“3 Twenty-Three”) is a payroll administrator which performs payroll services on behalf of its customers, including the Company.

Amounts paid to Wilks Construction are recorded as capital expenditures in our consolidated statements of cash flows. • 3 Twenty-Three, LLC (“3 Twenty-Three”) is a payroll administrator which performs payroll services on behalf of its customers, including us.

Financial Statements and Supplementary Data INDEX TO FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) 63 Report of Independent Registered Public Accounting Firm (PCAOB ID Number 185 ) 65 Consolidated Balance Sheets 67 Consolidated Statements of Operations 68 Consolidated Statements of Comprehensive Income (Loss) 69 Consolidated Statements of Changes in Equity (Deficit) 70 Consolidated Statements of Cash Flows 71 Notes to Consolidated Financial Statements 72 62 Table of Contents REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders ProFrac Holding Corp.

Financial Statements and Supplementary Data INDEX TO FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) 63 Report of Independent Registered Public Accounting Firm (PCAOB ID Number 185 ) 66 Consolidated Balance Sheets 68 Consolidated Statements of Operations 69 Consolidated Statements of Comprehensive Income (Loss) 70 Consolidated Statements of Changes in Equity (Deficit) 71 Consolidated Statements of Cash Flows 73 Notes to Consolidated Financial Statements 74 62 Table of Contents REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders ProFrac Holding Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Amounts in millions, except per share amounts, or where otherwise noted) 1. ORGANIZATION AND DESCRIPTION OF BUSINESS ProFrac Holding Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Amounts in millions, except per share amounts, or where otherwise noted) 1. ORGANIZATION AND DESCRIPTION OF BUSINES S ProFrac Holding Corp.

Pro f orma amounts presented below are for illustrative purposes only and does not reflect future events that occurred after December 31, 2022 or any operating efficiencies or inefficiencies that may result from these significant acquisitions.

Pro f orma amounts presented below are for illustrative purposes only and do not reflect future events that occurred after December 31, 2023 or any operating efficiencies or inefficiencies that may result from these significant acquisitions.

We noted that for the three years ended December 31, 2022, we recorded cumulative income before income taxes of $ 190.1 million as a result of income reported in 2022.

We noted that for the three years ended December 31, 2023, we recorded cumulative income before income taxes of $ 250.1 million as a result of income reported in 2022.

The First Financial Loan has a maturity date of January 1, 2024 with an interest rate of LIBOR plus 3.5 %, and the loan is to be repaid by equal payments of principal and interest beginning in February 2022 .

The First Financial Loan had a maturity date of January 1, 2024 with an interest rate of LIBOR plus 3.5 %, and the loan was to be repaid by equal payments of principal and interest beginning in February 2022.

The information required by this Item is incorporated by reference to our Proxy Statement for the 2023 Annual Meeting of Stockholders, which is expected to be filed with the SEC within 120 days of December 31, 2022 (the “2023 Proxy Statement”).

The information required by this Item is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders, which is expected to be filed with the SEC within 120 days of December 31, 2023 (the “2024 Proxy Statement”).

In May 2022, the Western District of Texas ruled certain claims of five of the USWS patents are invalid.

In May 2023, the Western District of Texas ruled certain claims of five of the USWS patents are invalid.

In connection with the IPO in May 2022, the Company reorganized and ProFrac LLC became partially owned by ProFrac Corp., a C-Corporation. ProFrac Corp. is a taxable entity and is required to account for income taxes under the asset and liability method for periods subsequent to May 17, 2022.

Because of our power to appoint directors to the board of directors without a direct equity interest in Flotek, we determined that Flotek is a VIE. We further determined that we are the primary beneficiary of the VIE, due to our ability to appoint four of seven directors to Flotek’s board of directors.

Because of our power to appoint directors to the board of directors without a direct equity interest in Flotek, we determined that Flotek was a VIE. We further determined that we were the primary beneficiary of the VIE, due to our ability to appoint four of seven directors to Flotek’s board of directors.

BUSINESS COMBINATIONS AND ASSET ACQUISITION FTS International, Inc. (“FTSI”) On March 4, 2022 (“FTSI Acquisition Date”), we acquired all of the outstanding stock of FTSI (the “FTSI Acquisition”) for a purchase price of $ 405.7 million, consisting of cash consideration of $ 332.8 million, and THRC Holdings, LP (“THRC Holdings”) equity interest of $ 72.9 million (“THRC FTSI Related Equity”).

(“FTSI”) On March 4, 2022 (“FTSI Acquisition Date”), we acquired all of the outstanding stock of FTSI (the “FTSI Acquisition”) for a purchase price of $ 405.7 million, consisting of cash consideration of $ 332.8 million, and THRC Holdings, LP (“THRC Holdings”) equity interest of $ 72.9 million (“THRC FTSI Related Equity”).

The goodwill in this acquisition was primarily attributable to REV’s organized workforce and potential or expected synergies. We recognized this goodwill in the stimulation services segment. A portion of the recorded goodwill is tax deductible. Our consolidated results included an immaterial amount of revenue and pretax earnings from this acquisition in 2022.

Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

The maximum availability of credit under the 2022 ABL Credit Facility is limited at any time to the lesser of the lenders committed amounts or a borrowing base. The borrowing base is based on percentages of eligible accounts receivable and eligible inventory and is subject to certain reserves.

We base these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. Actual results could differ materially from those estimates.

Monarch Note In connection with our acquisition of Monarch on December 23, 2022 , $ 87.5 million of the purchase price was financed through a seller-financed note (the “Monarch Note”, see “Note 4 - Business Combinations and Asset Acquisition” for additional information). The Monarch Note matures on December 23, 2024 and bears interest at an annual rate of 2.5 %.

Monarch Note In connection with our acquisition of Monarch in December 2022 , $ 87.5 million of the purchase price was financed through a seller-financed note (the “Monarch Note”, see “Note 4 - Business Combinations” for additional information). The Monarch Note matures in December 2024 and bears interest at an annual rate of 2.5 %.

We may assess our goodwill for impairment initially using a qualitative approach to determine whether conditions exist that indicate it is more likely than not that a reporting unit’s carrying value is greater than its fair value, and if such conditions are identified, then a quantitative analysis will be performed to determine if there is any impairment. 75 Table of Contents ProFrac Holding Corp.

The goodwill in this acquisition was primarily attributable to Monarch’s organized workforce and potential or expected synergies, and is tax deductible. We recognized this goodwill in the proppant production segment. Our consolidated results included an immaterial amount of revenue and pretax earnings from this acquisition in 2022.

The Monarch Note requires minimum quarterly payments of $ 10.9 million. We have an option to prepay the loan in whole or in part without penalty or premium. The Monarch Note is secured by our equity interest in Monarch, substantially all of the assets of Monarch, and real property acquired in connection with the Monarch Acquisition.

The Monarch Note requires minimum quarterly payments of $ 10.9 million. Alpine has an option to prepay the loan in whole or in part without penalty or premium. The Monarch Note is secured by Alpine’s equity interest in Monarch, substantially all of the assets of Monarch, and real property acquired in connection with the Monarch Acquisition.

Randle agreed to provide general operational advice to ProFrac Corp. and its direct and indirect operating subsidiaries for an annual fee of $ 0.2 million. Pursuant to the consulting agreement, ProFrac Corp. will also pay healthcare insurance premiums on behalf of Mr. Randle and will allow Mr. Randle to use a Company vehicle for the duration of the consulting agreement.

Randle agreed to provide general operational advice to ProFrac Corp. and its direct and indirect operating subsidiaries for an annual fee of $ 0.2 million. Pursuant to the consulting agreement, ProFrac Corp. paid healthcare insurance premiums on behalf of Mr. Randle and allowed Mr. Randle to use a Company vehicle for the duration of the consulting agreement.

Dallas, Texas March 30, 2023 64 Table of Contents REPORT OF INDEPENDENT REGI STERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors Flotek Industries, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Flotek Industries, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, cash flows, and stockholders’ equity for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements).

Dallas, Texas March 15, 2024 65 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors Flotek Industries, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Flotek Industries, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, cash flows, and stockholders’ equity for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements).

The increase was primarily due to $640.7 in net cash paid for acquisitions and higher capital expenditures of $268.8 million related to dual fuel engine upgrades, engine standby controller installations, and our electric frac fleet build program. These uses of cash were partially offset by cash proceeds from the FTSI Sale Leaseback of real property. Financing Activities.

The change from 2021 to 2022 was primarily due to $640.7 in net cash paid for acquisitions and higher capital expenditures of $268.8 million related to dual fuel engine upgrades, engine standby controller installations, and our electric frac fleet build program. These uses of cash were partially offset by cash proceeds from a sale-leaseback of real property.

This model replaces the multiple existing impairment models previously used under GAAP, which generally require that a loss be incurred before it is recognized. The new standard also applies to financial assets arising from revenue transactions such as contract assets and accounts receivable. 78 Table of Contents ProFrac Holding Corp.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates .

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The Company utilized valuation specialists to assist in developing the estimates of fair value of acquired assets and liabilities.

The Company utilized valuation specialists to assist in developing the estimates of fair value 63 Table of Contents of acquired assets and liabilities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Amounts in millions, except per share amounts, or where otherwise noted) The following table summarizes related party accounts payable: December 31, 2022 2021 Automatize $ 8.8 $ 11.2 Wilks Brothers 7.1 10.0 Wilks Construction 7.9 0.1 Carbo 0.2 - Total accounts payable—related party $ 24.0 $ 21.3 Additionally, in January and February of 2021, ProFrac LLC executed two agreements with one of ProFrac LLC’s members for the sale of certain lots of equipment, in exchange for $ 8.7 million in cash, an amount that approximates the net book value of the assets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Amounts in millions, except per share amounts, or where otherwise noted) The following table summarizes accounts receivable–related party: December 31, 2023 2022 Flying A $ 5.9 $ 1.5 Carbo 0.5 0.1 Interstate 0.4 0.3 Other — 0.2 Total accounts receivable — related party $ 6.8 $ 2.1 The following table summarizes accounts payable–related party: December 31, 2023 2022 Automatize $ 11.6 $ 8.8 Wilks Brothers 7.8 7.1 Wilks Construction — 7.9 Wilks Earthworks 1.1 — Related Lessors 0.1 — Equify 0.3 — Carbo 1.0 0.2 Total accounts payable — related party $ 21.9 $ 24.0 Additionally, in January and February of 2021, ProFrac LLC executed two agreements with one of ProFrac LLC’s members for the sale of certain lots of equipment, in exchange for $ 8.7 million in cash, an amount that approximates the net book value of the assets.

Our fair value assessment incorporates a variety of considerations, including: (i) the short-term duration of the instruments and (ii) our historical incurrence of and expectations of future credit losses. The book value of our floating rate debt approximates fair value because of its floating rate structure. 77 Table of Contents ProFrac Holding Corp.

As of December 31, 2022 , restricted cash consisted of $ 2.8 million, which consisted of cash used as collateral for our credit card program and to support our workers’ compensation obligations.

As of December 31, 2022, restricted cash consisted of cash used as collateral for our credit card program and to support our workers’ compensation obligations.

The following table summarizes the rollforward of our allowance for credit losses: December 31, 2022 2021 Balance at beginning of period $ ( 0.7 ) $ ( 1.9 ) Provision for credit losses, net of recoveries ( 1.9 ) 1.2 Write-offs - - Balance at end of period $ ( 2.6 ) $ ( 0.7 ) Inventories Inventories, which consist of proppants and chemicals that are used to provide hydraulic fracturing services and maintenance parts that are used to service our hydraulic fracturing equipment, are carried at the lower of cost or net realizable value.

The following table summarizes the rollforward of our allowance for credit losses: Year Ended December 31, 2023 2022 Balance at beginning of period $ ( 2.6 ) $ ( 0.7 ) Provision for credit losses, net of recoveries ( 0.1 ) ( 1.9 ) Write-offs — — Balance at end of period $ ( 2.7 ) $ ( 2.6 ) Inventories Inventories, which consist of proppants and chemicals that are used in the hydraulic fracturing process and maintenance parts for oilfield services equipment, are carried at the lower of cost or net realizable value.

The primary negative evidence we noted was: • 2022 was the first profitable year for the Company since 2018. • FTSI recorded losses before income taxes in 2020 and 2021. • USWS recorded losses before income taxes in 2020, 2021 and in 2022 before being acquired by us. • The forecasts of our results and the consensus forecasts of the hydraulic fracturing industry have been historically volatile due to the up-and-down cycles experienced by the industry. • The price of oil has fluctuated significantly over the past three years.

The primary negative evidence we noted was: • In 2023 we recorded a loss before income taxes of $ 58.0 million. • Our income before income taxes in 2023 was substantially below our annual budget. • 2022 was the first profitable year for the Company since 2018. • FTSI recorded losses before income taxes in 2021. • USWS recorded losses before income taxes in 2021 and in 2022 before being acquired by us. • The forecasts of our results and the consensus forecasts of the hydraulic fracturing industry have been historically volatile due to the up-and-down cycles experienced by the industry. • The price of oil has fluctuated significantly over the past three years.

RELATED PARTY TRANSACTIONS In the normal course of business, the Company has entered into transactions with related parties where the Wilks Parties hold a controlling financial interest.

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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Amounts in millions, except per share amounts, or where otherwise noted) The following table summarizes the fair value of consideration transferred in the Monahans Acquisition and the allocation of the purchase price to the fair values of assets acquired and liabilities assumed at the Monahans Acquisition Date: Total purchase consideration $ 97.4 Cash and cash equivalents 0.1 Accounts receivable 11.1 Prepaid expense and other assets 0.6 Inventories 3.2 Property, plant and equipment 115.7 Intangible assets 6.2 Other assets 8.9 Total identifiable assets acquired 145.8 Accounts payable 8.2 Accrued expenses 1.0 Other current liabilities 4.4 Other non-current liabilities 38.1 Total liabilities assumed 51.7 Goodwill 3.3 Total purchase consideration $ 97.4 For the acquired property, plant and equipment, the valuation technique utilized was the cost approach, which adjusted estimates of replacement cost for the age, condition and utility of the associated assets.

The following table summarizes the fair value of consideration transferred in the Monahans Acquisition and the allocation of the purchase price to the fair values of assets acquired and liabilities assumed at the Monahans Acquisition Date: Total purchase consideration $ 97.4 Cash and cash equivalents 0.1 Accounts receivable 11.7 Prepaid expense and other assets 0.6 Inventories 3.2 Property, plant and equipment 115.7 Intangible assets 6.2 Other assets 9.2 Total identifiable assets acquired 146.7 Accounts payable 8.2 Accrued expenses 1.0 Other current liabilities 4.4 Other non-current liabilities 38.1 Total liabilities assumed 51.7 Goodwill 2.4 Total purchase consideration $ 97.4 For the acquired property, plant and equipment, the valuation technique utilized was the cost approach, which adjusted estimates of replacement cost for the age, condition and utility of the associated assets.

During the year ended December 31, 2022, we recorded adjustments to the value of our redeemable noncontrolling interests as shown below: Redeemable Noncontrolling Interests Balance as of December 31, 2021 $ - Effect of corporate reorganization and reclassification to redeemable noncontrolling interest 377.5 Adjustment of redeemable noncontrolling interest to redemption amount at IPO (1) 1,438.3 Net income 206.0 Class A Common Stock issued to settle asset purchase 21.4 Class A shares issued to acquire USWS 147.4 Class A shares issued for vested stock awards ( 0.1 ) Tax withholding related to net share settlement of equity awards ( 1.9 ) Class B shares issued to acquire REV 57.6 Change in accrued distribution related to income taxes ( 2.8 ) Stock-based compensation 4.0 Stock-based compensation related to deemed contribution 41.6 Foreign currency translation adjustments 0.1 Adjustment of redeemable noncontrolling interest to redemption amount (2) 173.8 Balance as of December 31, 2022 $ 2,462.9 (1) Based on 101.1 million shares of Class B Common Stock outstanding and the $ 18.00 per share IPO price.

Activity related to the redeemable noncontrolling interest is as follows: Redeemable Noncontrolling Interests Balance, December 31, 2021 $ - Effect of corporate reorganization and reclassification to redeemable noncontrolling interest 377.5 Adjustment of redeemable noncontrolling interest to redemption amount at IPO (1) 1,438.3 Net income 206.0 Class A Common Stock issued to settle asset purchase 21.4 Class A shares issued to acquire USWS 147.4 Class A shares issued for vested stock awards ( 0.1 ) Tax withholding related to net share settlement of equity awards ( 1.9 ) Class B shares issued to acquire REV 57.6 Change in accrued distribution related to income taxes ( 2.8 ) Stock-based compensation 4.0 Stock-based compensation related to deemed contribution 41.6 Foreign currency translation adjustments 0.1 Adjustment of redeemable noncontrolling interest to redemption amount (2) 173.8 Balance, December 31, 2022 $ 2,462.9 Class A shares issued in acquisitions 9.5 Net income 41.8 Stock-based compensation 2.0 Stock-based compensation related to deemed contribution 7.3 Foreign currency translation adjustments 0.1 Adjustment of redeemable noncontrolling interest to redemption amount (3) ( 1,210.3 ) Conversion of Class B common stock to Class A common stock ( 1,313.3 ) Balance, December 31, 2023 $ — (1) Based on 101.1 million shares of Class B Common Stock outstanding and the $ 18.00 per share IPO price.

Those statements were audited by other auditors, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Flotek Industries, Inc., is based solely on the report of the other auditors.

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Top changes in ProFrac Holding Corp.'s 2023 10-K

Item 1A. Risk Factors

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