XML 22 R11.htm IDEA: XBRL DOCUMENT
v3.24.3

Contract Assets | 9 Months Ended
--- | ---
Sep. 30, 2024
Revenue Recognition [Abstract] |
Contract Assets | Revenue from Contracts with Customers Disaggregation of Revenue The Company differentiates revenue based on whether the source of revenue is attributable to product sales or service revenue. Product and service revenues include sales to related parties as described in Note 16, “Related Party Transactions.” Total revenue disaggregated by revenue source is as follows (in thousands):
| Three months ended September 30, |  | Nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Revenue: |  |  |  |  |  |  |
Products | $ | 48,243 |  |  | $ | 45,865 |  |  | $ | 132,052 |  |  | $ | 141,695 |
Services | 1,499 |  |  | 1,403 |  |  | 4,215 |  |  | 4,175 |
| $ | 49,742 |  |  | $ | 47,268 |  |  | $ | 136,267 |  |  | $ | 145,870 |
Disaggregation of Cost of Sales The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs which cannot be directly attributable to either tangible goods or services. Total cost of sales disaggregated is as follows (in thousands):
| Three months ended September 30, |  | Nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Cost of sales: |  |  |  |  |  |  |
Tangible goods sold | $ | 35,824 |  |  | $ | 33,350 |  |  | $ | 95,064 |  |  | $ | 116,755 |
Services | 91 |  |  | 128 |  |  | 273 |  |  | 425 |
Other | 4,708 |  |  | 4,743 |  |  | 13,822 |  |  | 13,857 |
| $ | 40,623 |  |  | $ | 38,221 |  |  | $ | 109,159 |  |  | $ | 131,037 |
Other cost of sales represent costs directly associated with the generation of revenue but which cannot be attributed directly to tangible goods sold or services. Examples of other costs of sales are certain personnel costs and equipment rental and insurance costs. Cost of sales, between external and related party, is as follows (in thousands):
| Three months ended September 30, |  | Nine months ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Cost of sales: |  |  |  |  |  |  |
Cost of sales for external customers | $ | 14,996 |  |  | $ | 14,399 |  |  | $ | 45,436 |  |  | $ | 42,471 |
Cost of sales for related parties | 25,627 |  |  | 23,822 |  |  | 63,723 |  |  | 88,566 |
| $ | 40,623 |  |  | $ | 38,221 |  |  | $ | 109,159 |  |  | $ | 131,037 |
Contract Assets Contract assets are as follows (in thousands):
| September 30, 2024 |  | December 31, 2023
Contract assets | $ | 83,060 |  |  | $ | 83,060 |
Less accumulated amortization | (12,745) |  |  | (8,404) |
Contract assets, net | 70,315 |  |  | 74,656 |
Less current contract assets | (6,480) |  |  | (5,836) |
Contract assets, long term | $ | 63,835 |  |  | $ | 68,820 |
In connection with entering into the Initial ProFrac Agreement and Amended ProFrac Agreement on February 2, 2022 and May 17, 2022, respectively, as discussed in Note 9, “Debt and Convertible Notes Payable” and Note 16, “Related Party Transactions,” the Company recognized contract assets of $10.0 million and $69.5 million, respectively, and associated fees of $3.6 million. As of September 30, 2024 and December 31, 2023, $63.8 million and $68.8 million, respectively, of the contract assets were classified as long term based upon our estimate of the forecasted revenues from the ProFrac Agreement which will not be realized within the next twelve months of the ProFrac Agreement. The Company’s estimate of the timing of the future contract revenues is evaluated on a quarterly basis. During the three months ended September 30, 2024 and 2023, the Company recognized $1.6 million and $1.3 million, respectively, of contract assets amortization which is recorded as a reduction of the transaction price included in the related party revenue in the consolidated statement of operations. During the nine months ended September 30, 2024 and 2023, the Company recognized $4.3 million and $3.7 million, respectively, of contract assets amortization. The below table reflects our estimated amortization per year (in thousands) based on the Company’s current forecasted revenues from the ProFrac Agreement.
Years ending December 31, |  | Amortization |  |
2024 (excluding the nine months ended September 30, 2024) | $ | 1,499 |  |  |
2025 |  | 6,833 |  |  |
2026 |  | 8,868 |  |  |
2027 |  | 10,117 |  |  |
2028 |  | 10,117 |  |  |
Thereafter through May 2032 |  | 32,881 |  |  |
Total contract assets |  | $ | 70,315 |  |  |
Based on our tests of recoverability, we did not recognize any impairment of such contract assets as of September 30, 2024.

X
- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org/606/tableOfContent + Details
Name: | us-gaap_RevenueFromContractWithCustomerTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_RevenueRecognitionAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration