As filed with the Securities and Exchange Commission on November
30, 2020
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________________
FLOTEK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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90-0023731 |
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(State or other jurisdiction |
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(I.R.S. Employer |
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of incorporation or organization) |
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Identification Number) |
8846 N. Sam Houston Parkway W.
Houston, Texas 77064
(713) 849-9911
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive
offices)
_____________________________
Nicholas J. Bigney
Senior Vice President, General Counsel & Corporate
Secretary
Flotek Industries, Inc.
8846 N. Sam Houston Pkwy W.
Houston, Texas 77064
(713) 849-9911
(Name and address, including zip code, and telephone
number,
including area code, of agent for service of process)
_____________________________
With copies to:
Robert C. Morris
Brandon T. Byrne
Norton Rose Fulbright US LLP
1301 McKinney, Suite 5100
Houston, Texas 77010
(713) 651-5161
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Approximate date of commencement of proposed sale to the
public:
From time to time after the effective date of this registration
statement.
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If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. ☐
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with the dividend or interest reinvestment plans, check
the following box. ☒
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same
offering. ☐
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that shall
become effective upon filing with the Commission pursuant to Rule
462(e) under the Securities Act, check the following
box. ☐
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to
register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the
following box. ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
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Large accelerated filer ☐
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Accelerated filer ☒
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Non-accelerated filer ☐
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Smaller reporting company ☒
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Emerging growth company ☐
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of Securities
Act. ☐
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CALCULATION OF REGISTRATION FEE |
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Title of Each Class of Securities to Be Registered |
Amount To Be Registered(1)
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Proposed Maximum Aggregate Offering Price Per
Unit(1)
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Proposed Maximum Aggregate Offering Price(1)
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Amount of Registration Fee(1)(2)
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Common Stock, par value $0.0001 per share |
11,500,000 |
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$2.13(3)
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$24,495,000 |
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$2,672.40(3)
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(1)Pursuant
to Rule 416 of the rules and regulations under the Securities Act
of 1933, as amended (the “Securities Act”), the shares being
registered hereunder include such indeterminate number of shares of
common
stock as may be issuable with respect to the shares being
registered hereunder as a result of stock splits, stock dividends,
or similar transactions.
(2)The
registrant previously paid a registration fee of $40,565.00
pursuant to the registrant’s registration statement on
Form S-3 (No. 333-219618) declared effective by
the Securities and Exchange Commission on October 11, 2017, and
originally filed on August 1, 2017 (the “2017 Registration
Statement”). Of the $350,000,000.00 of securities registered under
the 2017 Registration Statement, none were sold. In accordance with
Rule 457(p) under the Securities Act, the registration fee paid for
the unsold securities on the 2017 Registration Statement will be
used to offset the current registration fee due. Accordingly, the
amount of the registration fee for the securities for sale by the
registrant under this registration statement offset entirely by the
registration fee previously paid of $40,565.00, and as a result, a
filing fee of $0 is being paid herewith.
(3)Pursuant
to Rule 457(c) under the Securities Act, the offering
price and registration fee are computed based on the average of the
high and low prices reported for the registrant’s common stock
traded on the New York Stock Exchange on November 27,
2020.
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933, as amended, or until the registration statement shall become
effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
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Subject to Completion, dated November 30, 2020 |
The information in this prospectus is not complete and may be
changed. The selling stockholders may not sell these securities
until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
PROSPECTUS
11,500,000 Shares of Common Stock Offered by Selling
Stockholders
FLOTEK INDUSTRIES, INC.
____________________________
Up to 11,500,000 shares of our common stock may be offered and sold
from time to time by certain selling stockholders identified on
page 21 of this prospectus or any supplement to this prospectus. We
will not receive any proceeds from the sale of common stock by the
selling stockholders. The shares of common stock held by the
selling stockholders that are covered by this prospectus may be
offered and sold from time to time directly by the selling
stockholders or alternatively through underwriters, dealers, or
agents. Such shares of common stock may be sold in one or more
transactions, at fixed prices, at prevailing market prices at the
time of sale, or at negotiated prices.
Our common stock is traded on the New York Stock Exchange under the
symbol “FTK.” On November 27, 2020, the closing price of our common
stock was $2.09 per share.
The address of our principal executive offices is 8846 N. Sam
Houston Parkway W., Houston, Texas 77064. Our phone number is (713)
849-9911.
Investing in our securities involves significant risks. See “Risk
Factors” on page 1 of this prospectus, contained in any applicable
prospectus supplement, and in the documents incorporated by
reference herein and therein for a discussion of the factors you
should carefully consider before deciding to purchase our
securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
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The date of this prospectus is
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TABLE OF CONTENTS
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Risk Factors 1
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Cautionary Note Regarding Forward-Looking
Statements 7
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About this Prospectus 8
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Flotek Industries, Inc. 9
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Use of Proceeds 10
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Description of Capital Stock 11
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Supplemental Financial
Information 14
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Selling Stockholders 20
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Plan of Distribution 24
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Where You Can Find More
Information 26
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Incorporation of Certain Documents by
Reference 27
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Legal Matters 28
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Experts 29
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RISK FACTORS
Investing in our securities involves significant risks. Please see
the risk factors under the heading “Risk Factors” in any prospectus
supplement as well as in our most recent Annual Report on Form
10-K, in our Quarterly Reports on Form 10-Q filed subsequent to
such Annual Report on Form 10-K, and in our Current Reports on Form
8-K filed subsequent to the end of the fiscal year covered by such
Annual Report on Form 10-K, each of which are on file with the
Securities and Exchange Commission, or the SEC, and are
incorporated by reference in this prospectus and any prospectus
supplement in their entirety, as the same may be amended,
supplemented, or superseded from time to time by our filings under
the Securities Exchange Act of 1934, as amended, or the Exchange
Act. For more information see “Incorporation of Certain Documents
by Reference” and “Where You Can Find More Information.” Before
making an investment decision, you should carefully consider these
risks as well as other information we include or incorporate by
reference in this prospectus and any prospectus supplement. The
risks and uncertainties we have described are not the only ones
that we face. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also affect
our business, operating results, cash flows, financial condition,
or our securities. These risks, and additional risks not known to
us or that we currently believe are immaterial, could materially
and adversely affect our business, operating results, cash flows,
financial condition, or our securities and could result in a
partial or complete loss of your investment.
In addition to the risk factors incorporated by reference, these
following risk factors may also adversely affect your investment in
our securities:
Risks Related to the Company’s Securities
The market price of our common stock has been and may continue to
be volatile.
The market price of our common stock has historically been subject
to significant fluctuations. The following factors, among others,
could cause the price of our common stock to fluctuate due
to:
•variations
in our quarterly results of operations;
•changes
in market valuations of companies in our industry;
•fluctuations
in stock market prices and volume;
•fluctuations
in oil and natural gas prices;
•issuances
of common stock or other securities in the future;
•additions
or departures of key personnel;
•announcements
by us or our competitors of new business, acquisitions, or joint
ventures; and
•negative
statements made by external parties about our business in public
forums.
The stock market has experienced significant price and volume
fluctuations in recent years that have affected the price of common
stock of companies within many industries including the oil and
natural gas industry. The price of our common stock could fluctuate
based upon factors that have little to do with our operational
performance, and these fluctuations could materially reduce our
stock price. We could be a defendant in a legal case related to a
significant loss of value for the shareholders. This could be
expensive and divert management’s attention and our resources, as
well as have an adverse effect on our business, operating results,
cash flows, financial condition, or our securities.
If we cannot meet the New York Stock Exchange continued listing
requirements, the New York Stock Exchange may delist our common
stock.
Our common stock is currently listed on the New York Stock
Exchange. In the future, if we are not able to meet the continued
listing requirements of the New York Stock Exchange, which require,
among other things, that the average closing price of our common
stock be above $1.00 over 30 consecutive trading days, our common
stock may be delisted. If we are unable to satisfy the NYSE
criteria for continued listing, its common stock would be subject
to delisting. A delisting of its common stock could negatively
impact us by, among other things, reducing the liquidity and market
price of our common stock, reducing the number of investors willing
to hold or acquire our common stock, which could negatively impact
our ability to raise equity financing, decreasing the amount of our
news and analyst coverage, and limiting our ability to issue
additional securities or obtain additional financing in the future.
In addition, delisting from the New York Stock Exchange might
negatively impact our reputation and, as a consequence, our
business, operating results, cash flows, financial condition, or
our securities.
An active market for our common stock may not continue to exist or
may not continue to exist at current trading levels.
Trading volume for our common stock historically has been very
volatile when compared to companies with larger market
capitalizations. We cannot presume that an active trading market
for our common stock will continue or be sustained. Sales of a
significant number of shares of our common stock in the public
market could lower the market price of our common
stock.
We have no plans to pay dividends on our common stock, and,
therefore, investors will have to look to stock appreciation for
return on investments.
We do not anticipate paying any cash dividends on our common stock
within the foreseeable future. Any payment of future dividends will
be at the discretion of our board of directors and will depend,
among other things, on our earnings, financial condition, capital
requirements, level of indebtedness, statutory and contractual
restrictions applying to the payment of dividends, and other
considerations deemed relevant by our board of directors. Investors
must rely on sales of common stock held after price appreciation,
which may never occur, in order to realize a return on their
investment. The lack of plans for dividends may make our common
stock an unattractive investment for investors who are seeking
dividends.
Certain anti-takeover provisions of our certificate of
incorporation and applicable Delaware law could discourage or
prevent others from acquiring us, which may adversely affect the
market price of our common stock.
Our certificate of incorporation and bylaws contain provisions
that, among other things:
•permit
us to issue, without stockholder approval, shares of preferred
stock in one or more series and, with respect to each series, to
fix the designation, powers, preferences, and rights of the shares
of the series;
•prohibit
stockholders from calling special meetings;
•limit
the ability of stockholders to act by written consent;
•prohibit
cumulative voting; and
•require
advance notice for stockholder proposals and nominations for
election to our board of directors to be acted upon at meetings of
stockholders.
In addition, Section 203 of the Delaware General Corporation Law
limits business combinations with owners of more than 15% of our
voting stock without the approval of our board of directors.
Aforementioned provisions and other similar provisions make it more
difficult for a third party to acquire us exclusive of negotiation.
Our board of directors could choose not to negotiate with an
acquirer deemed not beneficial to or synergistic with our strategic
outlook. If an acquirer were discouraged from offering to acquire
us or prevented from successfully completing a hostile acquisition
by these anti-takeover measures, stockholders could lose the
opportunity to sell their shares at a favorable price.
Future issuance of additional shares of our common stock could
cause dilution of ownership interests and adversely affect our
common stock price.
We are currently authorized to issue up to 140,000,000 shares of
common stock. We may, in the future, issue previously authorized
and unissued shares of common stock, which would result in the
dilution of current stockholders ownership interests. Additional
shares are subject to issuance through various equity compensation
plans or through the exercise of currently outstanding equity
awards. The potential issuance of additional shares of common stock
may create downward pressure on the trading price of our common
stock. We may also issue additional shares of common stock or other
securities that are convertible into or exercisable for common
stock in order to raise capital or effectuate other business
purposes. Future sales of substantial amounts of common stock, or
the perception that sales could occur, could have an adverse effect
on the price of our common stock.
We may issue shares of preferred stock or debt securities with
greater rights than our common stock.
Subject to the rules of the New York Stock Exchange, our
certificate of incorporation authorizes our board of directors to
issue one or more additional series of preferred stock and to set
the terms of the issuance without seeking approval from holders of
our common stock. Currently, there are 100,000 preferred shares
authorized, with no shares currently outstanding. Any preferred
stock that is issued may rank senior to our common stock in terms
of dividends, priority, and liquidation premiums, and may have
greater voting rights than holders of our common
stock.
Our ability to use net operating loss carryforwards and tax
attribute carryforwards to offset future taxable income may be
limited.
Under section 382 of the Internal Revenue Code of 1986, as amended,
a corporation that undergoes an “ownership change” is subject to
limitations on the corporation’s ability to utilize pre-change net
operating losses (“NOLs”), and certain other tax attributes to
offset future taxable income. In general, an ownership change
occurs if the aggregate stock ownership of certain stockholders
increases by more than 50 percentage points over such stockholders’
lowest percentage ownership during the testing period (generally
three years). An ownership change could limit the corporation’s
ability to utilize existing NOLs and tax attribute carryforwards
for taxable years including or following an identified “ownership
change.” Transactions involving our common stock, even those
outside our control, such as purchases or sales by investors,
within the testing period could result in an “ownership
change.”
In addition, under the Tax Cuts and Jobs Act, the ability to carry
back NOLs to prior taxable years is generally eliminated, and while
NOLs arising in tax years beginning after 2017 may be carried
forward indefinitely, these post-2017 NOLs may only reduce 80% of
our taxable income in a tax year. Limitations imposed on the
ability to use NOLs and tax credits to offset future taxable income
could reduce or eliminate the benefit of the NOLs and tax
attributes and could require us to pay U.S. federal income taxes in
excess of that which would otherwise be required if such
limitations were not in effect. Similar rules and limitations may
apply for state income tax purposes.
If securities or industry analysts do not publish research or
reports about our business or publish negative reports, our
securities prices and trading volumes could decline and affect the
price at which you could sell your securities.
The trading market for our securities may be affected by the
research and reports that industry or securities analysts publish
about us or our business. We do not have any control over these
analysts. If analysts do not cover us on a regular basis or if one
or more analysts cease coverage of us or fail to regularly publish
reports about us, we could lose visibility in the financial
markets, which in turn could cause our securities prices or trading
volumes to decline. If one or more of such analysts publish
negative reports about us, our securities prices would likely
decline. These occurrences could affect the price you could receive
from the sale of your securities.
The sale of the securities registered in this offering could cause
our stock price to decline.
The sale of a significant amount of securities registered in this
offering at any given time could cause the trading price of our
common stock or other securities to decline or be highly
volatile.
We may issue a substantial amount of securities in connection with
future acquisitions, and the sale of those securities could
adversely affect the trading price of our common stock or other
securities.
As part of our growth strategy, we may issue additional securities,
or securities that have rights, preferences, and privileges senior
to our other securities. We may file future shelf registration
statements with the SEC that we may use to sell securities from
time to time in connection with acquisitions. To the extent that we
are able to grow through acquisitions and are able to pay for such
acquisitions with shares of our common stock or other securities,
the number of outstanding shares of common stock or other
securities that will be eligible for sale in the future is likely
to increase substantially. Persons receiving shares of our common
stock or other securities in connection with these acquisitions may
be more likely to sell large quantities of their common stock or
other securities, which may influence the price of our common stock
or other securities. In addition, the potential issuance of
additional shares of common stock or other securities in connection
with anticipated acquisitions could lessen demand for our common
stock or other securities and result in a lower price than would
otherwise be obtained.
Supplemental Risks Related to Our Business
Our sanitizer-related business may be materially and negatively
affected by uncertain market conditions and Covid-19 related
impacts.
The demand for our sanitizer products is dependent on many factors,
including human behavior in response to Covid-19 and market
participants in the premium sanitizer space. A change in general
behavior in response to widespread vaccine availability, relaxed
attitudes towards sanitization, unproven consumer reception of our
new products, or new entrants into the premium sanitizer market,
may materially and adversely affect the demand for our sanitizer
products.
Our Data Analytics segment may be materially and negatively
affected by government regulations and/or facility
disruptions.
The demand for our equipment and services offerings in our Data
Analytics segment could be materially affected by additional
regulations on the upstream, midstream, and downstream portions of
the oil and gas sectors. Additional regulation on oil and gas
production, transportation, or processing of hydrocarbons may
result in significantly reduced demand for our offerings, either
individually or as a result of a decline in the overall oil and gas
markets in the United States and abroad. In addition, our products
are subject to export control laws and regulations, and changes to
those laws and regulations may negatively impact our ability to
pursue international opportunities. Disruptions to pipelines and
refineries, whether due to regulation, weather, demand, or other
factors, may also have a materially adverse effect on our ability
to derive revenue from our Data Analytics segment. Adjustments to
our Data Analytics segment’s commercial strategy, with a shift
towards subscription revenue and away from equipment sales, and the
market’s response to that strategy, may materially and adversely
affect revenues in the near term, even if the strategic shift is
successful, due to longer payback periods on subscription
models.
Loss of key suppliers, the inability to secure raw materials on a
timely basis, or our inability to pass commodity price increases on
to our customers could have a material adverse effect on our
ability to service our customers’ needs and could result in a
significant loss of customers.
Materials used in servicing and manufacturing operations, as well
as those purchased for sale, are generally available on the open
market from multiple sources. Acquisition costs and transportation
of raw materials to our facilities have historically been impacted
by extreme weather conditions. Certain raw materials used by our
Chemistry Technologies segment are available only from limited
sources; accordingly, any disruptions to critical suppliers’
operations could materially and adversely impact our operations.
Prices paid for raw materials could be affected by energy products
and other commodity prices; weather and disease associated with our
crop dependent raw materials, specifically citrus greening; tariffs
and duties on imported materials; foreign currency exchange rates;
and phases of the general business cycle and global demand. Our
Chemistry Technologies segment secures short and long term supply
agreements for most of its critical raw materials from both
domestic and international vendors.
The prices of key raw materials are subject to market fluctuations,
which at times can be significant and unpredictable. Availability
of key raw materials weather events, natural disasters, and health
epidemics in countries from which we source our raw materials may
significantly impact prices. We may be unable to pass along price
increases to its customers, which could result in a materially
adverse impact on margins and operating profits. We currently use
purchasing strategies designed, where possible, to align the timing
of customer demand with our supply commitments. However, we
currently do not hedge commodity prices, but may consider such
strategies in the future, and there is no guarantee that our
purchasing strategies will prevent cost increases from resulting in
materially adverse impacts on margins and operating
profits.
Our Data Analytics segment is dependent on its ability to source
appropriate technical components for its Verax measurement system,
certain of which are specialty products that are sole-sourced and
are not easily replaceable with other sources. Any inability to
source appropriate components in the future could result in
significant difficulty supplying equipment or services to our
customers.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
or the Securities Act, and Section 21E of the Exchange Act. These
statements relate to our expectations for future events and time
periods. All statements other than statements of historical fact
are statements that could be deemed to be forward-looking
statements, including, but not limited to, statements
regarding:
•future
financial performance and growth targets or
expectations;
•market
and industry trends and developments; and
•the
benefits of our completed and future merger, acquisition, and
disposition transactions.
You can identify these and other forward-looking statements by the
use of words such as “aim,” “anticipates,” “expects,” “intends,”
“plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,”
“might,” “will,” “should,” “would,” “could,” “potential,” “future,”
“continue,” “ongoing,” “forecast,” “budget,” “project,”
“scheduled,” “target,” and similar expressions, and variations or
negatives of these words.
These forward-looking statements are based on information available
to us as of the date of this prospectus and our current
expectations, forecasts, and assumptions, and involve a number of
risks and uncertainties. Accordingly, forward-looking statements
should not be relied upon as representing our views as of any
subsequent date. Future performance cannot be ensured. Actual
results may differ materially from those in the forward-looking
statements. Some factors that could cause actual results to differ
include, without limitation, competitive factors, general economic
conditions, customer relations, relationships with suppliers,
employee turnover, fluctuations in oil and natural gas prices,
governmental regulation and supervision, litigation, seasonality,
distribution networks, product introduction and acceptance,
technological change, changes in accounting principles or
interpretations, changes in industry practices, onetime events, the
impact of acquisitions, joint ventures, or divestitures, the impact
of Covid-19, and other risks referenced from time to time in our
past and future filings with the SEC, including in our most recent
Annual Report on Form 10-K, in our Quarterly Reports on Form 10-Q
filed subsequent to our most recent Annual Report on Form 10-K, and
in our Current Reports on Form 8-K filed subsequent to the end of
the fiscal year covered by our most recent Annual Report on Form
10-K. Based upon changing conditions, should any one or more of
these risks or uncertainties materialize, or should any underlying
assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated,
expected, or intended.
You are cautioned not to place undue reliance on any
forward-looking statements, which speak only as of the date of this
prospectus. Except as required by law, we do not undertake any
obligation to update or release any revisions to these
forward-looking statements to reflect any events or circumstances,
whether as a result of new information, future events, changes in
assumptions, or otherwise, after the date of this prospectus. All
forward-looking statements, expressed or implied, included or
incorporated by reference in this prospectus are expressly
qualified in their entirety by this cautionary statement. This
cautionary statement should also be considered in connection with
any subsequent written or oral forward-looking statements that we
or persons acting on our behalf may issue.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3
that we filed with the Securities and Exchange Commission, or the
“SEC,” using a “shelf” registration process for the delayed
offering and sale of securities pursuant to Rule 415 under the
Securities Act. Under this shelf process, this prospectus may be
used from time to time by the selling stockholders to sell up to
11,500,000 shares of our common stock as described herein and under
the heading “Selling Stockholders.” The shares of our common stock
being offered by the selling stockholders pursuant to this
prospectus were acquired upon the consummation of our acquisition
of the ownership interests of JP3 Measurement, LLC, a
privately-held data and analytics technology company, on May 18,
2020.
The shares of common stock issued in the acquisition were privately
placed under Section 4(a)(2) of the Securities Act, and remain
subject to certain lock-up restrictions until December 31,
2020.
Any prospectus supplement may include a discussion of any risk
factors or other special considerations that apply to our common
stock. The prospectus supplement may also add, supplement, change,
update, supersede, or amend information included in this
prospectus. You should carefully read both this prospectus, any
prospectus supplement, any free writing prospectus that we
authorize to be distributed to you, and any information
incorporated by reference into the foregoing, together with
additional information described under the headings “Incorporation
of Certain Documents by Reference” and “Where You Can Find More
Information” before investing in any of the securities offered
under this prospectus.
We have not authorized anyone to give you any additional
information different from that contained in this prospectus, any
accompanying prospectus supplement or any free writing prospectus
provided in connection with an offering. We take no responsibility
for, and can provide no assurance as to the reliability of, any
other information that others may give you. We are not making an
offer to sell these securities in any jurisdiction where the offer
is not permitted.
We have not authorized anyone to give you any additional
information different from that contained in this prospectus, any
accompanying prospectus supplement or any free writing prospectus
provided in connection with an offering. We take no responsibility
for, and can provide no assurance as to the reliability of, any
other information that others may give you. We are not making an
offer to sell these securities in any jurisdiction where the offer
is not permitted.
This prospectus contains summaries of certain provisions contained
in some of the documents described herein, but reference is made to
the actual documents for complete information. All of the summaries
are qualified in their entirety by reference to the actual
documents.
The information contained in this prospectus, in any prospectus
supplement, or in any document incorporated by reference in the
foregoing is accurate only as of the date of such document
containing such information, regardless of when this prospectus or
any prospectus supplement is delivered or when any sale of our
securities occurs. Our business, operating results, cash
flows, financial condition, or prospects may have changed since
that date. If there is any inconsistency between the information in
this prospectus, in any prospectus supplement, or in any document
incorporated by reference in the foregoing, you should rely on the
information in the document with the most recent date.
This prospectus is not an offer to sell or solicitation of an offer
to buy our securities in any circumstances under which or
jurisdiction in which the offer or solicitation is unlawful.
Unless the context otherwise indicates, the terms “the Company,”
“we,” “our,” “ours,” and “us” refer to Flotek Industries, Inc. and
its consolidated subsidiaries. The phrase “this prospectus” refers
to this prospectus and any applicable prospectus supplement, unless
the context otherwise requires. In this prospectus, we sometimes
refer to the common stock as the “securities.”
FLOTEK INDUSTRIES, INC.
We are a global, technology-driven chemistry and data company that
develops and supplies engineered chemistry solutions, equipment,
data and analytical services to industrial, commercial and consumer
markets. Our common stock trades on the New York Stock Exchange
under the symbol “FTK.” We have two operating segments: Chemistry
Technologies and Data Analytics. Both segments are supported by our
continuing Research and Innovation advanced laboratory
capabilities.
Chemistry Technologies
Our Chemistry Technologies segment includes specialty chemistries,
logistics and technology services. We design, develop, manufacture,
package, distribute, deliver, and market reservoir-centric fluid
systems, including specialty and conventional chemistries, for use
in oil and gas well drilling, cementing, completion, remediation,
and stimulation activities designed to maximize recovery in both
new and mature fields. Customers of this product line of the
Chemistry Technologies business segment include major integrated
oil and gas companies, oilfield services companies, independent oil
and gas companies, pressure-pumping service companies, national and
state-owned oil companies, and international supply chain
management companies.
In the second quarter of 2020, we launched a line of sanitizers and
disinfectants for commercial and personal consumer use. These
products build on our historical expertise in chemistry and
leverage its infrastructure, personnel, competencies, supply chain,
research, and historic consumer market experiences yielding a
competitive product offering in this rapidly growing segment. Given
the increase in global demand for sanitizer products due to
Covid-19, our concentration of customers is shifting and
diversifying, which helps to reduce credit and business
risk.
Data Analytics
Our Data Analytics segment, created in conjunction with the
acquisition of JP3 Measurement, LLC, includes the design,
development, production, sale and support of equipment and services
that create and provide valuable information about the composition
of its energy customers’ hydrocarbon streams. JP3 is continuing its
transition to a Data-as-a-Service (DaaS) subscription model of
selling data generated by its line of Verax analyzers, deployed
remotely “at the edge” across the oil and gas sector, and software
services via its cloud-based Viper software platform. JP3 creates
and sells data systems and analytics services into the oil and gas
market. We sell equipment with a software license and (DaaS)
subscriptions. The data is provided in real time, every fifteen
seconds, at the point-of-use and via the cloud, to end use
customers. This composition and physical properties information
increases efficiency and decreases operating costs for producers,
midstream operators, refiners and distribution
companies.
The customers of JP3 span across the entire market, from production
upstream to midstream facilities to refineries and distribution
networks. To date, JP3 has focused sales solely on North American
markets. The Data Analytics segment provides real-time hydrocarbon
composition data that helps its customers generate additional
profit by enhancing blending, increasing efficiencies of towers,
enabling automation and robotization of fluid handling, and
reducing losses due to give-away.
Research and Innovation
Flotek Research and Innovation supports both of the foregoing
segments through formulations, technical support, basin &
reservoir studies, data analytics, and new technology projects. The
purpose of the organization is to supply the segments with enhanced
products and services that generate current and future revenues,
while advising company management on opportunities concerning
technology, environmental, and industry trends. The Research and
Innovation facilities support advances in chemistry performance,
detection, optimization, and manufacturing. Our corporate office is
located at 8846 N. Sam Houston Parkway W., Houston, Texas 77064.
Our phone number is (713) 849-9911 and our website address is
www.flotekind.com. Information contained on our website does not
constitute part of this prospectus or any prospectus
supplement.
USE OF PROCEEDS
The common stock to be offered and sold pursuant to this prospectus
will be offered and sold by the selling stockholders. We will not
receive any proceeds in connection with the sale of any common
stock offered by the selling stockholders. The selling stockholders
will pay expenses of the selling stockholders incurred in
connection with the sale of common stock from time to
time.
DESCRIPTION OF CAPITAL STOCK
The following is a summary of the material terms of our common
stock and preferred stock, certain provisions of our Amended and
Restated Certificate of Incorporation, as amended (the “Certificate
of Incorporation”), and our Second Amended and Restated Bylaws (the
“Bylaws”), and certain provisions of Delaware law. This summary
does not purport to be complete and is qualified in its entirety by
the full text of our Certificate of Incorporation and Bylaws and by
such provisions of Delaware law. We encourage you to review
complete copies of our Certificate of Incorporation and Bylaws,
copies of which are filed as exhibits to the registration statement
of which this prospectus is a part. References in this section to
the “Company,” “we,” “us,” and “our” refer to Flotek Industries,
Inc. and not to any of its subsidiaries.
Authorized Capitalization
Our authorized capital stock consists of:
•140,000,000
shares of common stock, $0.0001 par value; and
•100,000
shares of preferred stock, $0.0001 par value.
Common Stock
Holders of common stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Because holders of
common stock do not have cumulative voting rights, the holders of a
majority of the shares of common stock can elect all of the members
of our board of directors standing for election. The holders of
common stock are entitled to receive dividends as may be declared
by our board of directors. Upon our liquidation, dissolution, or
winding up, and subject to any prior rights of outstanding
preferred stock, the holders of our common stock will be entitled
to share
pro rata
in the distribution of all of our assets available for distribution
to our stockholders after satisfaction of all of our liabilities
and the payment of the liquidation preference of any preferred
stock that may be outstanding. There are no redemption or sinking
fund provisions applicable to the common stock. All outstanding
shares of common stock are fully paid and non-assessable. The
holders of our common stock have no preemptive or other
subscription rights to purchase our common stock.
Preferred Stock
Subject to the provisions of the Certificate of Incorporation and
limitations prescribed by law, our board of directors has the
authority to issue up to 100,000 shares of preferred stock in one
or more series and to fix the rights, preferences, privileges, and
restrictions of the preferred stock, including dividend rights,
dividend rates, conversion rates, voting rights, terms of
redemption, redemption prices, liquidation preferences, and the
number of shares constituting any series or the designation of the
series, which may be superior to those of the common stock, without
further vote or action by the stockholders.
One of the effects of undesignated preferred stock may be to enable
our board of directors to render more difficult or to discourage an
attempt to obtain control of us by means of a tender offer, proxy
contest, merger, or otherwise and, as a result, protect the
continuity of our management. The issuance of shares of the
preferred stock under our board of directors’ authority described
above may adversely affect the rights of the holders of common
stock. For example, preferred stock issued by us may rank prior to
the common stock as to dividend rights, liquidation preference, or
both, may have full or limited voting rights and may be convertible
into shares of common stock. Accordingly, the issuance of shares of
preferred stock may discourage bids for the common stock or may
otherwise adversely affect the market price of the common
stock.
Liability and Indemnification of Officers and
Directors
Our Certificate of Incorporation and Bylaws provide that
indemnification shall be to the fullest extent permitted by the
DGCL for all current or former directors or officers of the
Company. As permitted by the DGCL, the Certificate of Incorporation
provides that directors of the Company will not be liable to the
Company or its stockholders for monetary damages for breach of
fiduciary duty as a director to the fullest extent of the law of
the
State of Delaware. If the DGCL is amended to authorize the further
elimination or limitation of directors’ liability, then the
liability of our directors will automatically be limited to the
fullest extent provided by law.
We have also agreed to obtain and maintain director and officer
liability insurance for the benefit of each of our officers and
directors. These policies include coverage for losses for wrongful
acts. Each of our officers and directors is named as an insured
under such policies and provided with the same rights and benefits
as are accorded to the most favorably insured of our directors and
officers.
Delaware Anti-Takeover Law, Certificate of Incorporation and Bylaw
Provisions
We are subject to the provisions of Section 203 of the DGCL. In
general, Section 203 prohibits a publicly held Delaware corporation
from engaging in a “business combination” with an “interested
stockholder” for a period of three years after the date of the
transaction in which the person became an interested stockholder,
unless the business combination is approved in a prescribed
manner.
Section 203 defines a “business combination,” among other things,
as a merger, asset sale, or other transaction resulting in a
financial benefit to the interested stockholders. Section 203
defines an “interested stockholder” as a person who, together with
affiliates and associates, owns, or, in some cases, within three
years prior, did own, 15% or more of the corporation’s voting
stock. Under Section 203, a business combination between us and an
interested stockholder is prohibited unless:
•our
board of directors approved either the business combination or the
transaction that resulted in the stockholder becoming an interested
stockholder prior to the date the person attained the
status;
•upon
consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder
owned at least 85% of our voting stock outstanding at the time the
transaction commenced, excluding, for purposes of determining the
voting stock outstanding, shares owned by persons who are directors
and also officers and employee stock plans, under which employee
participants do not have the right to; or
•the
business combination is approved by our board of directors on or
subsequent to the date the person became an interested stockholder
and authorized at an annual or special meeting of the stockholders
by the affirmative vote of the holders of at least 66 2/3% of the
outstanding voting stock that is not owned by the interested
stockholder.
This provision has an anti-takeover effect with respect to
transactions not approved in advance by our board of directors,
including discouraging takeover attempts that might result in a
premium over the market price for the shares of our common stock.
With approval of our stockholders, we could amend our Certificate
of Incorporation or Bylaws in the future to elect not to be
governed by the anti-takeover law. This election would generally be
effective 12 months after the adoption of the amendment and would
not apply to any business combination between us and any person who
became an interested stockholder on or before the adoption of the
amendment.
Provisions of Our Certificate of Incorporation and
Bylaws
Our Certificate of Incorporation and Bylaws provide that any action
required or permitted to be taken by our stockholders may be taken
at a duly called meeting of stockholders or by written consent of
the holders of all of the outstanding stock entitled to vote on
such action. Under Delaware law, the power to adopt, amend, or
repeal Bylaws is conferred upon the stockholders. A corporation
may, however, in its Certificate of Incorporation also confer upon
the board of directors the power to adopt, amend, or repeal its
bylaws. Our Certificate of Incorporation and Bylaws grant our board
the power to adopt, amend, and repeal our Bylaws on the affirmative
vote of a majority of the directors then in office. Our
stockholders may adopt, amend, or repeal our Bylaws, but only at
any regular or special meeting of stockholders by the holders of
not less than a majority of the outstanding shares of stock
entitled to vote. Also, our Bylaws do not grant our stockholders
the ability to call special meetings of stockholders. Advance
notice is required for stockholders to nominate directors or to
submit proposals for consideration at meetings of
stockholders.
The foregoing provisions of our Certificate of Incorporation and
Bylaws and the provisions of Section 203 of the DGCL could have the
effect of delaying, deferring, or preventing a change in control of
the Company.
Exclusive Forum Provision
Our Bylaws provide that, unless the Company consents in writing to
the selection of an alternative forum, the Court of Chancery (the
“Chancery Court”) of the State of Delaware (or, in the event that
the Chancery Court does not have jurisdiction, the federal district
court for the District of Delaware or other state courts of the
State of Delaware) shall, to the fullest extent permitted by law,
be the sole and exclusive forum for (a) any derivative action or
proceeding brought on behalf of the Company, (b) any action
asserting a claim of breach of a fiduciary duty owed by any
director, officer or other employee of the Company to the Company
or to the Company’s stockholders, (c) any action arising pursuant
to any provision of the DGCL or the Certificate of Incorporation or
the Bylaws (as either may be amended from time to time), or (d) any
action asserting a claim against the Company governed by the
internal affairs doctrine.
Listing of Common Stock
Our common stock is currently listed on the New York Stock Exchange
under the symbol “FTK.”
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is American
Stock Transfer & Trust Company, LLC.
SUPPLEMENTAL FINANCIAL INFORMATION
Set forth below is information from Note 18 (Revision of Prior
Financial Statements) to the condensed consolidated financial
statements included in our Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2020 and Note 21 (Revision of
Prior Financial Statements) to the condensed consolidated financial
statements included in our Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2020, each of which were previously
filed with the SEC and are incorporated into this prospectus by
reference:
Revision of Prior Financial Statements as previously disclosed in
our Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2020:
During the review of the Consolidated Balance Sheet during the
three months ended March 31, 2020, management noted two separate
errors that impact prior periods as follows:
•Trademarks
and brand names with a carrying value of $2.8 million that were
transferred in the sale of Florida Chemical to ADM on February 28,
2019 were not removed from the Consolidated Balance Sheet at the
time of the sale.
•Gross
profit in intercompany inventory was not properly relieved and
recorded as a reduction in cost of sales when the related inventory
was sold to third parties.
The revisions discussed above impacted the financial statements as
follows (in thousands):
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
Inventories, net |
|
$ |
34,358 |
|
$ |
1,019 |
$ |
35,377 |
|
|
Other intangible assets, net |
|
24,978 |
|
(2,760) |
22,218 |
|
|
Total Assets |
|
282,792 |
|
(1,741) |
281,051 |
|
|
Total Liabilities and Stockholders' Equity |
|
282,792 |
|
(1,741) |
281,051 |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
Operating expenses |
|
$ |
44,599 |
$ |
(631) |
$ |
43,968 |
|
Income tax benefit |
|
774 |
(463) |
311 |
|
Loss from continuing operations |
|
(15,380) |
168 |
(15,212) |
|
Income from discontinued operations, net of tax |
|
48,372 |
(2,298) |
46,074 |
|
Net income |
|
32,992 |
(2,130) |
30,862 |
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|
|
As of June 30, 2019 |
|
|
|
|
|
As previously reported |
Revisions |
As revised |
|
|
|
|
Inventories, net |
|
$ |
26,442 |
|
$ |
|
1,204 |
|
|
$ |
27,646 |
|
Other intangible assets, net |
|
24,290 |
|
(2,760) |
21,530 |
|
Total Assets |
|
263,816 |
|
(1,556) |
262,260 |
|
Total Liabilities and Stockholders' Equity |
|
263,816 |
|
(1,556) |
262,260 |
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|
|
|
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|
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|
|
|
|
|
|
For the three months ended June 30, 2019 |
|
For the six months ended June 30, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
As previously reported |
Revisions |
As revised |
|
Operating expenses |
|
$ |
38,306 |
$ |
(185) |
$ |
38,121 |
|
$ |
82,905 |
|
$ |
(816) |
$ |
82,089 |
|
Income tax benefit |
|
192 |
- |
192 |
|
966 |
|
(463) |
503 |
|
Loss from continuing operations |
|
(12,990) |
185 |
(12,805) |
|
(28,370) |
|
353 |
(28,017) |
|
(Loss) income from discontinued operations, net of tax |
|
(1,608) |
- |
(1,608) |
|
46,764 |
|
(2,298) |
44,466 |
|
Net (loss) income |
|
(14,598) |
185 |
(14,413) |
|
18,394 |
|
(1,945) |
16,449 |
|
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|
|
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|
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|
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|
|
|
|
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|
|
|
|
|
|
As of September 30, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
Inventories, net |
|
$ |
24,333 |
|
$ |
1,271 |
$ |
25,604 |
|
|
Other intangible assets, net |
|
23,578 |
|
(2,760) |
20,818 |
|
|
Total Assets |
|
249,357 |
|
(1,489) |
247,868 |
|
|
Total Liabilities and Stockholders' Equity |
|
249,357 |
|
(1,489) |
247,868 |
|
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|
|
|
|
|
|
|
|
|
For the three months ended September 30, 2019 |
|
For the nine months ended September 30, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
As previously reported |
Revisions |
As revised |
|
Operating expenses |
|
$ |
23,689 |
$ |
(67) |
$ |
23,622 |
|
$ |
106,594 |
$ |
(883) |
$ |
105,711 |
|
Income tax benefit |
|
191 |
- |
191 |
|
1,157 |
(463) |
694 |
|
Loss from continuing operations |
|
(11,227) |
67 |
(11,160) |
|
(39,597) |
420 |
(39,177) |
|
Income from discontinued operations, net of tax |
|
117 |
- |
117 |
|
46,881 |
(2,298) |
44,583 |
|
Net (loss) income |
|
(11,110) |
67 |
(11,043) |
|
7,284 |
(1,878) |
5,406 |
|
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|
|
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|
|
|
As of December 31, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
Inventories, net |
|
$ |
21,697 |
|
$ |
1,513 |
$ |
23,210 |
|
Other intangible assets, net |
|
23,083 |
|
(2,760) |
20,323 |
|
Total Assets |
|
231,847 |
|
(1,247) |
230,600 |
|
Total Liabilities and Stockholders' Equity |
|
231,847 |
|
(1,247) |
230,600 |
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|
|
For the three months ended December 31, 2019 |
|
For the year ended December 31, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
As previously reported |
Revisions |
As revised |
|
Operating expenses |
|
$ |
42,631 |
$ |
(242) |
$ |
42,389 |
|
$ |
149,225 |
$ |
(1,125) |
$ |
148,100 |
|
Income tax (expense) benefit |
|
(956) |
- |
(956) |
|
201 |
(463) |
(262) |
|
Loss from continuing operations |
|
(37,138) |
242 |
(36,896) |
|
(76,735) |
662 |
(76,073) |
|
(Loss) income from discontinued operations, net of tax |
|
(2,425) |
- |
(2,425) |
|
44,456 |
(2,298) |
42,158 |
|
Net loss |
|
(39,563) |
242 |
(39,321) |
|
(32,279) |
(1,636) |
(33,915) |
Management evaluated the impact on previously issued financial
statements and concluded the impact was not material.
Revision of Prior Financial Statements as previously disclosed in
our Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2020:
During preparation of June 30, 2020 financial statements, two
additional errors impacting the prior financial statements were
identified, as follows:
•Currency
Translation Adjustment and Other Comprehensive Income of $1.1
million was not recognized in earnings in connection with the
dissolution of the Company’s wholly owned foreign entity,
PetroValve International in 2015.
•Cash
flow presentation relating to proceeds received from the sale of
FCC (which occurred in the first quarter of 2019) and subsequent
release of escrow amounts in subsequent periods that were
improperly classified between operating and investing
activities.
Consolidated Balance Sheets -
The revision relating to currency translation discussed above had
no impact on total stockholders’ equity, but impacted the
components of stockholders’ equity as follows (in
thousands):
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|
|
As of December 31, 2018 |
|
|
As previously reported |
Revisions |
As revised |
|
Accumulated other comprehensive loss |
|
$ |
(1,116) |
$ |
1,147 |
$ |
31 |
|
Retained earnings (accumulated deficit) |
|
(107,176) |
(1,147) |
(108,323) |
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|
|
As of March 31, 2019 |
|
|
As previously reported* |
Revisions |
As revised |
|
Accumulated other comprehensive loss |
|
$ |
(1,022) |
$ |
1,147 |
$ |
125 |
|
Retained earnings (accumulated deficit) |
|
(76,314) |
(1,147) |
(77,461) |
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|
|
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|
|
As of June 30, 2019 |
|
|
As previously reported* |
Revisions |
As revised |
|
Accumulated other comprehensive loss |
|
$ |
(998) |
$ |
1,147 |
|
$ |
149 |
|
|
Retained earnings (accumulated deficit) |
|
(90,727) |
(1,147) |
|
(91,874) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2019 |
|
|
As previously reported* |
Revisions |
As revised |
|
Accumulated other comprehensive loss |
|
$ |
(962) |
$ |
1,147 |
$ |
185 |
|
Retained earnings (accumulated deficit) |
|
(101,770) |
(1,147) |
(102,917) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2019 |
|
|
As previously reported* |
Revisions |
As revised |
|
Accumulated other comprehensive loss |
|
$ |
(966) |
$ |
1,147 |
$ |
181 |
|
Retained earnings (accumulated deficit) |
|
(141,091) |
(1,147) |
(142,238) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2020 |
|
|
As previously reported* |
Revisions |
As revised |
|
Accumulated other comprehensive loss |
|
$ |
(1,089) |
$ |
1,147 |
$ |
58 |
|
Retained earnings (accumulated deficit) |
|
(205,058) |
(1,147) |
(206,205) |
*As previously reported numbers reflect the revised balances for
each of the periods as disclosed in the period ended March 31,
2020.
Consolidated Statements of Cash Flows -
The revision discussed above impacted the statement of cash flow as
follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
Adjustment to reconcile net cash in operating
activities |
|
|
|
|
|
|
|
|
Other current assets |
|
$ |
(18,661) |
|
$ |
14,219 |
|
$ |
(4,442) |
|
|
Other long-term assets |
|
- |
|
3,286 |
|
3,286 |
|
|
Net cash used in operating activities |
|
(25,721) |
|
17,505 |
|
(8,216) |
|
|
Proceeds from sale of business |
|
169,722 |
|
(17,505) |
|
152,217 |
|
|
Net cash provided by investing activities |
|
169,290 |
|
(17,505 |
|
151,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
Adjustment to reconcile net cash in operating
activities |
|
|
|
|
|
|
|
|
Other current assets |
|
$ |
(16,209) |
|
$ |
14,219 |
|
$ |
(1,990) |
|
|
Other long-term assets |
|
- |
|
3,286 |
|
3,286 |
|
|
Net cash used in operating activities |
|
(23,849) |
|
17,505 |
|
(6,344) |
|
|
Proceeds from sale of business |
|
169,722 |
|
(17,505) |
|
152,217 |
|
|
Net cash provided by investing activities |
|
168,868 |
|
(17,505) |
|
151,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
Adjustment to reconcile net cash in operating
activities |
|
|
|
|
|
|
|
|
Other current assets |
|
$ |
(14,974) |
|
$ |
10,938 |
|
$ |
(4,036) |
|
|
Other long-term assets |
|
- |
|
3,286 |
|
3,286 |
|
|
Net cash used in operating activities |
|
(14,348) |
|
14,224 |
|
(124) |
|
|
Proceeds from sale of business |
|
169,722 |
|
(14,224) |
|
155,498 |
|
|
Net cash provided by investing activities |
|
167,497 |
|
(14,224) |
|
153,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2019 |
|
|
As previously reported |
Revisions |
As revised |
|
Adjustment to reconcile net cash in operating
activities |
|
|
|
|
|
|
|
|
Other current assets |
|
$ |
(8,359) |
|
$ |
10,938 |
|
$ |
2,579 |
|
|
Other long-term assets |
|
1,131 |
|
3,286 |
|
4,417 |
|
|
Net cash used in operating activities |
|
(18,769) |
|
14,224 |
|
(4,545) |
|
|
Proceeds from sale of business |
|
169,722 |
|
(14,224) |
|
155,498 |
|
|
Net cash provided by investing activities |
|
166,937 |
|
(14,224) |
|
152,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2020 |
|
|
As previously reported |
Revisions |
As revised |
|
Adjustment to reconcile net cash in operating
activities |
|
|
|
|
|
|
|
|
Other current assets |
|
$ |
6,926 |
|
$ |
(3,281) |
|
$ |
3,645 |
|
|
Net cash used in operating activities |
|
(20,496) |
|
(3,281) |
|
(23,777) |
|
|
Proceeds from sale of business |
|
- |
|
3,281 |
|
3,281 |
|
|
Net cash provided by investing activities |
|
41 |
|
3,281 |
|
3,322 |
|
Management evaluated the impact of these errors, individually and
in the aggregate, on previously issued financial statements and
concluded the impact was not material. Due to the currency
translation error, net loss for the year ended December 31, 2015
was originally reported as $13.5 million and would be revised to
$14.6 million.
SELLING STOCKHOLDERS
The following table sets forth information as of November 30, 2020
about the beneficial ownership of our common stock by the selling
stockholders both before and immediately after the
offering.
We believe, based on the information furnished to us, that the
selling stockholders have sole voting and investment power with
respect to all of the shares of common stock reported, subject to
community property laws where applicable, unless otherwise
indicated.
The percent of beneficial ownership for the selling stockholders is
based on 73,094,901 shares of common stock issued and outstanding
as of November 13, 2020. Unless otherwise stated in the
footnotes to the table below and the information incorporated
herein by reference, to our knowledge, and based upon information
provided by the selling stockholders, none of the selling
stockholders has had a material relationship with us other than as
a stockholder at any time within the past three years or has ever
been one of our officers or directors.
Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial
ownership includes any shares of our common stock as to which a
stockholder has sole or shared voting power or investment power,
and also any shares of our common stock which the stockholder has
the right to acquire within 60 days, including upon exercise of
stock options or other rights to purchase shares of our common
stock.
The shares of common stock being offered pursuant to this
prospectus may be offered for sale from time to time during the
period the registration statement of which this prospectus is a
part remains effective, by or for the account of the selling
stockholders. After the date of effectiveness, the selling
stockholders may have sold or transferred, in transactions covered
by this prospectus or in transactions exempt from the registration
requirements of the Securities Act, some or all of their common
stock.
Except as described below, the selling stockholders are neither
broker-dealers nor affiliates, as defined in Rule 405, of
broker-dealers. The shares of our common stock being offered
by the selling stockholders pursuant to this prospectus were
acquired upon the consummation of our acquisition of the ownership
interests of JP3 Measurement, LLC, a privately-held data and
analytics technology company, on May 18, 2020. The shares of common
stock issued in the acquisition were privately placed under Section
4(a)(2) of the Securities Act, and remain subject to certain
lock-up restrictions until December 31, 2020. In connection with
the acquisition, we entered into a registration rights agreement
pursuant to which we agreed to file the registration statement of
which this prospectus is a part.
Information about the selling stockholders may change over
time. Any changed information will be set forth in an
amendment to the registration statement or supplement to this
prospectus, to the extent required by law.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Beneficially Owned
Prior to this Offering |
Shares
Offered by
this Prospectus |
Shares Beneficially Owned
After this Offering |
|
Name of Selling Stockholder |
Number |
Percent |
Number |
Percent |
|
Matthew Ray Thomas(1)
|
300,401 |
* |
223,651 |
76,750 |
* |
|
John Trust(2)
|
380,005 |
* |
380,005 |
0 |
— |
|
San Ambrosia Investments, Ltd.
(3)
|
1,018,329 |
1.39% |
1,018,329 |
0 |
— |
|
Justin William Little(4)
|
153,006 |
* |
153,006 |
0 |
— |
|
Jacey Lee Little Trust(5)
|
101,926 |
* |
101,926 |
0 |
— |
|
John Wolfe(6)
|
195,219 |
* |
195,219 |
0 |
— |
|
Entities affiliated with Douglas Maund
(7)
|
2,799,899 |
3.83% |
2,799,899 |
0 |
— |
|
Cardroth Equity, LLC(8)
|
984,752 |
1.35% |
984,752 |
0 |
— |
|
J.W. Sauder Trust(9)
|
373,161 |
* |
373,161 |
0 |
— |
|
JWT Resources I Ltd.(10)
|
86,294 |
* |
86,294 |
0 |
— |
|
Joe Little(11)
|
321,941 |
* |
321,941 |
0 |
— |
|
LOOFA Investments LLC(12)
|
2,078,708 |
2.84% |
2,078,708 |
0 |
— |
|
Tippett Family Limited Partnership(13)
|
86,294 |
* |
86,294 |
0 |
— |
|
John Sauder(14)
|
51,740 |
* |
51,740 |
0 |
— |
|
The Dos Rios Trust(15)
|
177,547 |
* |
177,547 |
0 |
— |
|
Passel Ltd(16)
|
1,344,661 |
1.84% |
1,344,661 |
0 |
— |
|
Six Mountain Partners, LP(17)
|
347,158 |
* |
347,158 |
0 |
— |
|
DWDTHD Land No.1, LLC(18)
|
146,863 |
* |
146,863 |
0 |
— |
|
Kevin W. Brown(19)
|
109,918 |
* |
28,285 |
0 |
— |
|
Joseph Paul Little III(20)
|
610,561 |
* |
600,561 |
10,000 |
* |
* Less than 1%.
(1) The number of shares of common stock being offered includes
73,246 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement. Mr. Thomas was our EVP, Data Analytics/President, JP3
until November 13, 2020.
(2) The number of shares of common stock being offered includes
82,801 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(3) The number of shares of common stock being offered includes
221,888 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(4) The number of shares of common stock being offered includes
33,339 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(5) The number of shares of common stock being offered includes
22,209 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(6) The number of shares of common stock being offered includes
42,537 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(7) Represents (a) 276,856 shares of common stock held by Jennifer
Lynn Maund 2008 Trust (“JLMT”), of which 60,325 shares are subject
to and are currently held in escrow pursuant to the terms of the
JP3 Measurement, LLC purchase agreement, (b) 276,856 shares of
common stock held by Megan Maund Houser 2008 Trust (“MMHT”), of
which 60,325 shares are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement, (c) 276,856 shares of common stock held by Erik Charles
Maund 2008 Trust (“ECMT”), of which 60,325 shares are subject to
and are currently held in escrow pursuant to the terms of the JP3
Measurement, LLC purchase agreement and (d) 1,969,331 shares of
common stock held by Maund Family LTD Partnership (“MF LP”), of
which 429,107 shares are subject to and are currently held in
escrow pursuant to the terms of the JP3 Measurement, LLC purchase
agreement. Douglas Maund is the sole trustee of each of JLMT, MMHT
and ECMT, and the managing member of the general partner of MF LP,
and, therefore, is deemed to have sole voting and investment power
over the securities held by each of JLMT, MMHT, ECMT and MF
LP.
(8) The number of shares of common stock being offered includes
214,572 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(9) The number of shares of common stock being offered includes
81,310 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(10) The number of shares of common stock being offered includes
18,803 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(11) The number of shares of common stock being offered includes
70,149 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(12) The number of shares of common stock being offered includes
452,939 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement. Thomas H. Daniel is a manager of LOOFA Investments, LLC.
The number of shares of common stock does not include the shares
held by Six Mountain Partners, LP (of which Mr. Daniel is the
Manager of the general partner) or DWDTHD Land No. 1, LLC (of which
Mr. Daniel is an executive officer).
(13) The number of shares of common stock being offered includes
18,803 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(14) The number of shares of common stock being offered includes
11,274 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement. Does not include the shares held by J.W. Sauder Trust
(of which Mr. Sauder is a beneficiary), John Trust (of which Mr.
Sauder is a co-trustee and beneficiary) and Passel Ltd (of which
Mr. Sauder is the President of the general partner).
(15) The number of shares of common stock being offered includes
38,686 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(16) The number of shares of common stock being offered includes
292,994 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(17) The number of shares of common stock being offered includes
75,644 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(18) The number of shares of common stock being offered includes
32,000 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement.
(19) The number of shares of common stock being offered includes
(a) 6,163 shares that are subject to and are currently held in
escrow pursuant to the terms of the JP3 Measurement, LLC purchase
agreement and (b) 81,633 shares of restricted stock that vest at
the Company’s next annual stockholders’ meeting. Kevin W. Brown
serves on our board of directors.
(20) The number of shares of common stock being offered includes
600,561 shares that are subject to and are currently held in escrow
pursuant to the terms of the JP3 Measurement, LLC purchase
agreement. Mr. Little is currently employed by the
Company.
PLAN OF DISTRIBUTION
Sales of Our Common Stock by Selling Stockholders
As of the date of this prospectus, we have not been advised by any
selling stockholder as to any plan of distribution. The selling
stockholders may choose not to sell any common stock. The common
stock offered by this prospectus may be sold from time to time to
purchasers:
•directly
by the selling stockholders or their successors, which includes
their donees, pledgees, assignees, or transferees or other
successors-in-interest; or
•through
underwriters, broker-dealers, or agents, who may receive
compensation in the form of discounts, commissions or agent’s
commissions from the selling stockholders or the purchasers of the
common stock. These discounts, concessions, or commissions may be
in excess of those customary in the types of transactions
involved.
The selling stockholders reserve the right to accept and, together
with their agents, to reject, any proposed purchases of common
stock to be made directly or through agents.
The selling stockholders and any underwriters, broker-dealers, or
agents who participate in the sale or distribution of the common
stock may be deemed to be “underwriters” within the meaning of the
Securities Act. If a selling stockholder is a registered
broker-dealer, such selling stockholder will be deemed to be an
underwriter. If a selling stockholder is deemed to be an
underwriter, any profits on the sale of the common stock by the
selling stockholder and any discounts, commissions or agent’s
commissions or concessions received by such selling stockholder may
be deemed to be underwriting discounts and commissions under the
Securities Act. If a selling stockholder is deemed to be an
“underwriter” within the meaning of Section 2(a)(11) of the
Securities Act, such selling stockholder will be subject to the
prospectus delivery requirements of the Securities Act.
Underwriters are subject to certain statutory liabilities,
including, but not limited to, Sections 11, 12, and 17 of the
Securities Act.
The common stock may be sold in one or more transactions
at:
•fixed
prices;
•prevailing
market prices at the time of sale;
•prices
related to such prevailing market prices;
•varying
prices determined at the time of sale; or
•negotiated
prices.
These sales may be effected in one or more
transactions:
•on
any national securities exchange or quotation on which the common
stock may be listed or quoted at the time of the sale;
•in
the over-the-counter market;
•in
transactions other than on such exchanges or services or in the
over-the-counter market;
•through
the writing of options (including the issuance by the selling
stockholder of derivative securities), whether the options or such
other derivative securities are listed on an options exchange or
otherwise;
•through
the settlement of short sales; or
•through
any combination of the foregoing.
These transactions may include block transactions or crosses.
Crosses are transactions in which the same broker acts as an agent
on both sides of the trade.
In connection with sales of the common stock, the selling
stockholders may enter into hedging transactions with
broker-dealers or other financial institutions which in turn
may:
•engage
in short sales of the common stock in the course of hedging their
positions;
•sell
the common stock short and deliver the common stock to close out
short positions;
•loan
or pledge the common stock to broker-dealers or other financial
institutions that in turn may sell the common stock;
•enter
into option or other transactions with broker-dealers or other
financial institutions that require the delivery to the
broker-dealer or other financial institution of the common stock,
which the broker-dealer or other financial institution may resell
under this prospectus; or
•enter
into transactions in which a broker-dealer makes purchases as a
principal for resale for its own account or through other types of
transactions.
The selling stockholders may from time to time transfer, pledge,
assign, or grant a security interest in some or all the shares of
common stock respectively owned by them and, if they default in the
performance of their secured obligations, the transferees,
pledgees, assignees or secured parties may offer and sell the
shares of common stock from time to time under this prospectus, or
under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act amending the list of
selling stockholders to include the transferee, pledgee, assignee,
or other successors in interest as selling stockholders under this
prospectus.
To our knowledge, there are currently no plans, arrangements or
understandings between the selling stockholders and any
underwriter, broker-dealer, or agent regarding the sale of the
common stock by the selling stockholders.
Our common stock is listed on the New York Stock Exchange under the
symbol “FTK.”
There can be no assurance that the selling stockholders will sell
any or all of the common stock under this prospectus. Further, we
cannot assure you that the selling stockholders will not transfer,
devise, or gift the common stock by other means not described in
this prospectus. In addition, any common stock covered by this
prospectus that qualifies for sale under Rule 144 or Rule 144A of
the Securities Act may be sold under Rule 144 or Rule 144A rather
than under this prospectus. The common stock covered by this
prospectus may also be sold to non-U.S. persons outside the U.S. in
accordance with Regulation S under the Securities Act rather than
under this prospectus.
The common stock may be sold in some states only through registered
or licensed brokers or dealers. In addition, in some states the
common stock may not be sold unless it has been registered or
qualified for sale or an exemption from registration or
qualification is available and complied with.
The selling stockholders and any other person participating in the
sale of the common stock will be subject to the Exchange Act. The
Exchange Act rules include, without limitation, Regulation M, which
may limit the timing of purchases and sales of the common stock by
the selling stockholders and any other such person. In addition,
Regulation M may restrict the ability of any person engaged in the
distribution of the common stock to engage in market-making
activities with respect to the particular common stock being
distributed. This may affect the marketability of the common stock
and the ability of any person or entity to engage in market-making
activities with respect to the common stock.
WHERE YOU CAN FIND MORE INFORMATION
We are currently subject to the information requirements of the
Exchange Act and in accordance therewith file periodic reports,
current reports, proxy statements, and other information with the
SEC. Our SEC filings are available to you on the SEC’s website
at
www.sec.gov.
Our website address is
www.flotekind.com.
Information on our website is not incorporated into this prospectus
or our other securities filings and is not a part of this
prospectus or any prospectus supplement.
We have filed with the SEC a registration statement on Form S-3
under the Securities Act with respect to the securities that may be
offered under this prospectus. This prospectus, which forms part of
the registration statement, does not contain all of the information
in the registration statement. We have omitted certain parts of the
registration statement, as permitted by the rules and regulations
of the SEC. For further information about us and our securities,
please see the registration statement and our other filings with
the SEC, including our annual, quarterly, and current reports and
proxy statements.
We will provide to each person, including any beneficial owner, to
whom a prospectus is delivered, upon a request for such information
in writing or by telephone, without charge, a copy of any or all of
the information incorporated by reference into this prospectus. Any
such request should be directed to:
Corporate Secretary
Flotek Industries, Inc.
8846 N. Sam Houston Parkway W.
Houston, Texas 77064
(713) 849-9911
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” certain information
into this prospectus, which means that we can disclose important
information about us by referring you to another document filed
separately with the SEC. The information incorporated by reference
is considered to be a part of this prospectus. Because we are
incorporating by reference future filings with the SEC, this
prospectus is continually updated and those future filings may
modify or supersede some of the information included or
incorporated in this prospectus. This means that you must carefully
review all of the SEC filings that we incorporate by reference to
determine if any of the statements in this prospectus or in any
document previously incorporated by reference have been modified or
superseded. However, we undertake no obligation to update or revise
any statements we make, except as required by law.
This prospectus incorporates by reference the documents listed
below and any filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
(in each case, other than those documents or the portions of those
documents not deemed to be filed, including information furnished
under Item 2.02 or Item 7.01 of Form 8-K and any corresponding
information furnished with respect to such Items under Item 9.01 or
as an exhibit) prior to the termination of the offering covered by
this prospectus and any prospectus supplement:
•the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, filed with the SEC on March 6,
2020;
•the
Company’s Amendment No. 1 to the Annual Report on Form 10-K/A for
the fiscal year ended December 31, 2019, filed with the SEC on
March 16, 2020;
•the
Company’s Amendment No. 2 to the Annual Report on Form 10-K/A for
the fiscal year ended December 31, 2019, filed with the SEC on June
11, 2020;
•the
Company’s Definitive Proxy Statement filed with the SEC on April 3,
2020 (to the extent the information therein is incorporated by
reference into the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2019);
•the
Company’s Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2020, filed with the SEC on June 12,
2020;
•the
Company’s Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2020, filed with the SEC on August 17,
2020;
•the
Company's Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2020, filed with the SEC on November 16,
2020;
•the
Company’s Current Reports on Form 8-K, filed with the SEC on
January 6, 2020, January 13, 2020, March 3, 2020, March 9, 2020,
March 17, 2020, March 31, 2020, April 3, 2020, April 13, 2020,
April 17, 2020, May 7, 2020, May 19, 2020, May 29, 2020, June 12,
2020, June 16, 2020, June 22, 2020, June 29, 2020, July 31, 2020,
August 6, 2020, November 12, 2020 and November 17, 2020 (except, in
each case, any information, including exhibits, furnished to the
SEC pursuant Items 2.02 and 7.01); and
•the
description of the Common Stock contained in the Company’s
Registration Statement on Form 8-A (File No. 001-13270), filed with
the SEC on December 26, 2007, including any amendment or report
filed for the purpose of updating such description.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus will be deemed to be
modified or superseded to the extent that a statement contained in
any subsequently filed document which is or is deemed to be
incorporated by reference in this prospectus modifies or supersedes
that statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part
of this prospectus.
LEGAL MATTERS
The validity of any securities offered from time to time by this
prospectus and any related prospectus supplement will be passed
upon for us by Norton Rose Fulbright US LLP, Houston, Texas. Any
underwriters, dealers, or agents will be advised about other issues
relating to any offering by their own legal counsel named in the
applicable prospectus supplement.
EXPERTS
Our consolidated financial statements as of December 31, 2019 and
2018, and for each of the three years in the period ended December
31, 2019, and the effectiveness of internal control over financial
reporting as of December 31, 2019, have been incorporated by
reference herein in reliance upon the report (which report
expresses an unqualified opinion on such consolidated financial
statements, includes an explanatory paragraph relating to a change
in accounting principle, and expresses an adverse opinion on our
internal control over financial reporting) of Moss Adams LLP,
independent registered public accounting firm, incorporated by
reference herein, and upon the authority of such firm as experts in
accounting and auditing.
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11,500,000
Shares of Common Stock Offered by Selling Stockholders
FLOTEK INDUSTRIES, INC.
_______________________
PROSPECTUS
_______________________
November 30, 2020
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an estimate (except in the case of the
registration fee) of the amount of fees and expenses to be incurred
in connection with the issuance and distribution of the offered
securities, other than underwriting discounts and commissions. The
selling stockholders will not bear any portion of the below
expenses.
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SEC Registration fee |
$2,672.40 |
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FINRA filing fees |
* |
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Printing expenses |
* |
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Legal fees and expenses |
* |
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Accounting fees and expenses |
* |
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Transfer agent’s fees and expenses |
* |
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Miscellaneous fees and expenses |
* |
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Total |
* |
*These fees are calculated based on the number of issuances and
amount of securities offered and accordingly cannot be estimated at
this time.
Item 15. Indemnification of Directors and Officers.
The Company is incorporated in the State of Delaware. Section 145
of the General Corporation Law of the State of Delaware (the
“DGCL”) empowers a Delaware corporation to indemnify any person who
was or is a party to or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (other
than an action by or in the rights of the corporation) by reason of
the fact that such person is or was a director, officer, employee,
or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other
enterprise. The indemnity may include expenses (including
attorneys’ fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by such person. The statute
provides that it is not exclusive of other rights to which those
seeking indemnification may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise.
Section 145 further provides that a corporation has the power to
purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee, or agent of the corporation, or
is or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability
asserted against such person and incurred by such person in any
such capacity, or arising out of such person’s status as such,
whether or not the corporation would have the power to indemnify
such person against such liability under Section 145.
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the
personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision shall not eliminate or limit
the liability of a director: (i) for any breach of the director’s
duty of loyalty to the corporation or its stockholders; (ii) for
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (iii) for payments of
unlawful dividends or unlawful stock purchases or redemptions; or
(iv) for any transaction from which the director derived an
improper personal benefit. In accordance with Section 102(b)(7) of
the DGCL, our Amended and Restated Certificate of Incorporation, as
amended, contains a provision that generally eliminates the
personal liability of directors for monetary damages for breaches
of their fiduciary duty, subject to the limitations of Section
102(b)(7).
Furthermore, our Amended and Restated Certificate of Incorporation,
as amended, and our Second Amended and Restated Bylaws: (i) provide
for the indemnification of our directors and officers to the
fullest extent permitted by applicable law; (ii) provide that the
right to indemnification includes the right to be paid or
reimbursed by us for the reasonable expenses incurred in advance of
a proceeding’s final disposition; (iii) provide that the Company
may pay or reimburse expenses incurred by a director or officer in
connection with their appearance as a witness or other
participation in a proceeding at a time when they are not a named
defendant or respondent in the proceeding; and (iv) provide that
the Company may purchase insurance by us to protect us and any
person who is or was serving as our director, officer, employee, or
agent. The Company maintains insurance policies that provide
coverage to our directors and officers against certain
liabilities.
The foregoing description of the Company’s Amended and Restated
Certificate of Incorporation, as amended, the Company’s Second
Amended and Restated Bylaws, the DGCL, and agreements providing for
indemnification is not intended to be exhaustive and is qualified
in its entirety by reference to the Amended and Restated
Certificate of Incorporation, as amended, the Second Amended and
Restated Bylaws, such agreements, as filed with the SEC, and to
such statutory provisions.
Item 16. Exhibits.
EXHIBIT INDEX
The following is a list of exhibits filed as part of this
registration statement.
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Exhibit |
Description |
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1.1* |
Form of Underwriting Agreement |
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2.1 |
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3.1 |
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3.2 |
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3.3 |
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3.4 |
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4.1 |
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5.1** |
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23.1** |
Consent of Norton Rose Fulbright US LLP (included in
Exhibit 5.1) |
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23.2** |
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24.1** |
Power of Attorney (included on the signature page
hereto) |
* To be filed if necessary, subsequent to
the effectiveness of this registration statement by an amendment to
this registration statement or incorporated by reference pursuant
to a Current Report on Form 8-K in connection with the offering of
securities.
** Filed herewith.
Item 17. Undertakings
(a)The
undersigned registrant hereby undertakes:
(i)To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(1)To
include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(2)To
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective registration
statement;
(3)To
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
Provided,
however,
that the undertakings set forth in paragraphs (a)(1)(i),
(a)(1)(ii) and (a)(1)(iii) of this section do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or
furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement or is contained in a form of prospectus
filed pursuant to Rule 424(b) that is a part of the
registration statement.
(ii)That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial
bona fide
offering thereof.
(iii)To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(iv)That, for the purpose of determining liability under the
Securities Act of 1933 to any purchaser:
(a)Each
prospectus filed by the registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement;
and
(b)Each
prospectus required to be filed pursuant to Rule 424(b)(2),
(b)(5), or (b)(7) as part of a registration statement in
reliance on Rule 430B relating to an offering made pursuant to
Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the
Securities Act of 1933 shall be deemed to be part of and included
in the registration statement as of the earlier of the date such
form of prospectus is first used after effectiveness or the date of
the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability
purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective date
of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the
offering of such securities at that time shall be deemed to be the
initial
bona fide
offering thereof.
Provided,
however,
that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a
time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such effective date.
(b)The
undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant’s annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee
benefit plan’s annual or transition report pursuant to
Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial
bona fide
offering thereof.
(c)The
undersigned registrant hereby undertakes that: (i) for
purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of the registration statement in reliance upon Rule 430A
and contained in the form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
the registration statement as of the time it was declared
effective; and (ii) for the purpose of determining any
liability under the Securities Act, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial
bona fide
offering thereof.
(d)Insofar
as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933
and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act of 1933, and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-3 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Houston, State of Texas, on November 30,
2020.
FLOTEK INDUSTRIES, INC.
By: /s/
John W. Gibson,
Jr.
Name: John W. Gibson, Jr.
Title: President, Chief Executive Officer,
and Chairman of the Board (Principle Executive
Officer)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John W. Gibson, Jr. and
Nicholas J. Bigney, and each of them, as his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution for him or her and in his or her name, place and
stead, in any and all capacities, to sign any and all amendments
(including any and all post-effective amendments) to this
registration statement on Form S-3 and any registration statement
for the same offering filed pursuant to Rule 462 under the
Securities Act of 1933, as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite
and necessary to be done, as fully to all intents and purposes as
he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed below by the
following persons in the capacities and on the dates
indicated.
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SIGNATURES |
TITLE |
DATE |
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/s/ John W. Gibson Jr.
John W. Gibson, Jr.
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President, Chief Executive Officer, and Chairman of the Board
(Principal Executive Officer) |
November 30, 2020 |
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/s/ Michael E. Borton
Michael E. Borton
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Chief Financial Officer (Principal Financial and Accounting
Officer) |
November 30, 2020 |
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/s/ Michelle M. Adams
Michelle M. Adams
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Director |
November 30, 2020 |
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/s/ Harsha V. Agadi
Harsha V. Agadi
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Director |
November 30, 2020 |
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/s/ Kevin W. Brown
Kevin W. Brown
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Director |
November 30, 2020 |
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/s/ Ted D. Brown
Ted D. Brown
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Director |
November 30, 2020 |
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/s/ Michael Fucci
Michael Fucci
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Director |
November 30, 2020 |
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/s/ Paul W. Hobby
Paul W. Hobby
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Director |
November 30, 2020 |
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/s/ David Nierenberg
David Nierenberg
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Director |
November 30, 2020 |
