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Item 1.02. Termination of a Material Definitive Agreement.
On March 26, 2021, Flotek Chemistry, LLC (“Flotek Chemistry”), a wholly-owned subsidiary of Flotek Industries, Inc. (the “Company”), delivered a notice of termination for the Supply Agreement (as amended, the “Supply Agreement”) between Flotek Chemistry and
Florida Chemical Company, LLC (“FCC”) dated February 28, 2019. The termination notice cites FCC’s refusal to allow Flotek Chemistry to exercise its contractual right to audit the books and records of FCC related to the cost of terpene purchased under the Supply Agreement.
Contemporaneously with the delivery of the notice of termination, Flotek Chemistry and the Company filed a lawsuit against Archer-Daniels-Midland, the parent company of FCC, and other parties, seeking damages related to the Supply Agreement.
The Company believes that, notwithstanding the termination of the Supply
Agreement, it has sufficient terpene inventory and alternate terpene supply sources to meet its requirements for the foreseeable future. The Company does not expect that termination of the Supply Agreement will have a material effect on its operations or ability to meet customer needs.
The material terms of the Supply Agreement were previously described in the Company’s Current Reports on Form 8-K filed on January 16, 2019 and March 3, 2020, and such descriptions are herein incorporated by reference. Such descriptions do not purport to be complete descriptions of the Supply
Agreement and are qualified in their entirety by reference to the full text thereof, which have been filed as Exhibit 10.11 to the Company’s Amendment No. 1 to the Annual Report on Form 10-K filed on March 16, 2020, and Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed on March 16, 2021, each of which is incorporated by reference herein.
Cautionary Note Related to Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking statements” within the meaning
of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the sufficiency of the Company’s terpene inventory and terpene supply sources and the effect of the termination of the Supply Agreement. Forward-looking statements are not historical facts, but instead represent the current assumptions and beliefs regarding future events of the Company, and are based on information available as of the date hereof. These forward-looking statements are identified by words including, but not limited to, “believes,”“expects,” and similar expressions. A detailed discussion of potential risks and uncertainties that could cause actual results and events to differ materially from forward-looking statements include, but are
not limited to, those discussed in Part I, Item 1A — “Risk Factors” our Annual Report on Form 10-K filed on March 16, 2021. The Company can give no assurance that its beliefs or expectations described herein will be attained, and such forward-looking statements speak only as of the date hereof. The Company has no obligation, and we disclaim any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information or future events, except as required by law.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
