UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended

~~September~~June 30, ~~2021~~2022

☐

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to ______

Commission File Number: 001-34025

INTREPID POTASH, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		26-1501877
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
~~1001~~707 17th Street, Suite ~~1050~~4200
Denver,
Colorado	80202
(Address of principal executive offices)		(Zip Code)

(303) 296-3006

(Registrant’s telephone number, including area code)


~~N/A~~
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, par value $0.001 per share

IPI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☒No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐


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 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

As of ~~October 25, 2021,~~July 31, 2022, the registrant had outstanding ~~13,443,080~~13,610,993 shares of common stock, par value $0.001 per share.

Table of Contents

INTREPID POTASH, INC.

TABLE OF CONTENTS


						Page
			PART I - FINANCIAL INFORMATION			1
			ITEM 1. Condensed Consolidated Financial Statements (Unaudited)			1
			Condensed Consolidated Balance Sheets			1
			Condensed Consolidated Statements of Operations			2
			Condensed Consolidated Statements of Stockholders' Equity			3
			Condensed Consolidated Statements of Cash Flows			4
			Notes to Condensed Consolidated Financial Statements			6
			ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			20
			ITEM 3. Quantitative and Qualitative Disclosures About Market Risk			4241
			ITEM 4. Controls and Procedures			4241
			PART II - OTHER INFORMATION			4342
			ITEM 1. Legal Proceedings			4342
			ITEM 1A. Risk Factors			4443
			ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			4544
			ITEM 3. Defaults Upon Senior Securities			4544
			ITEM 4. Mine Safety Disclosures			4544
			ITEM 5. Other Information			4544
			ITEM 6. Exhibits			4645
			Signatures			4746

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

INTREPID POTASH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)


		September 30,		December 31,			June 30,		December 31,
		2021		2020			2022		2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	25,637	$	19,515	Cash and cash equivalents	$	81,927	$	36,452

Short-term investments						Short-term investments	5,980		—
Accounts receivable:	Accounts receivable:					Accounts receivable:
Trade, net	Trade, net	32,731		22,795		Trade, net	32,639		35,409
Other receivables, net	Other receivables, net	3,449		1,577		Other receivables, net	1,635		989

Refundable income taxes						Refundable income taxes	21		—
Inventory, net	Inventory, net	76,828		88,673		Inventory, net	82,644		78,856
Prepaid expenses and other current assets	Prepaid expenses and other current assets	4,539		3,228		Prepaid expenses and other current assets	4,379		5,144
Total current assets	Total current assets	143,184		135,788		Total current assets	209,225		156,850

Property, plant, equipment, and mineral properties, net	Property, plant, equipment, and mineral properties, net	339,986		355,497		Property, plant, equipment, and mineral properties, net	347,834		341,117

Water rights	Water rights	19,184		19,184		Water rights	19,184		19,184
Long-term parts inventory, net	Long-term parts inventory, net	29,067		28,900		Long-term parts inventory, net	26,622		29,251

Other assets, net	Other assets, net	10,403		10,819		Other assets, net	16,025		11,418

Non-current deferred tax asset, net						Non-current deferred tax asset, net	192,134		209,075
Total Assets	Total Assets	$	541,824	$	550,188	Total Assets	$	811,024	$	766,895
LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY					LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable	Accounts payable	$	9,593	$	7,278	Accounts payable	$	9,869	$	9,068

Income taxes payable						Income taxes payable	—		41
Accrued liabilities	Accrued liabilities	22,202		12,701		Accrued liabilities	12,775		22,938
Accrued employee compensation and benefits	Accrued employee compensation and benefits	8,466		4,422		Accrued employee compensation and benefits	6,038		6,805

Current portion of long-term debt, net		—		10,000

Other current liabilities	Other current liabilities	34,830		32,816		Other current liabilities	34,330		34,571
Total current liabilities	Total current liabilities	75,091		67,217		Total current liabilities	63,012		73,423

Advances on credit facility		—		29,817
Long-term debt, net		—		14,926

Asset retirement obligation	Asset retirement obligation	25,221		23,872		Asset retirement obligation	28,004		27,024
Operating lease liabilities	Operating lease liabilities	1,163		2,136		Operating lease liabilities	1,859		1,879
Other non-current liabilities	Other non-current liabilities	1,129		961		Other non-current liabilities	1,310		1,166
Total Liabilities	Total Liabilities	102,604		138,929		Total Liabilities	94,185		103,492
Commitments and Contingencies	Commitments and Contingencies	0		0		Commitments and Contingencies	0		0
Common stock, 0.001 par value; 40,000,000 shares authorized;	Common stock, 0.001 par value; 40,000,000 shares authorized;					Common stock, 0.001 par value; 40,000,000 shares authorized;
13,124,110 and 13,049,820 shares outstanding
at September 30, 2021, and December 31, 2020, respectively		13		13
13,265,813 and 13,149,315 shares outstanding						13,265,813 and 13,149,315 shares outstanding
at June 30, 2022, and December 31, 2021, respectively						at June 30, 2022, and December 31, 2021, respectively	13		13
Additional paid-in capital	Additional paid-in capital	658,825		656,837		Additional paid-in capital	657,453		659,147

Accumulated deficit		(219,618)		(245,591)
Retained earnings						Retained earnings	59,373		4,243
Total Stockholders' Equity	Total Stockholders' Equity	439,220		411,259		Total Stockholders' Equity	716,839		663,403
Total Liabilities and Stockholders' Equity	Total Liabilities and Stockholders' Equity	$	541,824	$	550,188	Total Liabilities and Stockholders' Equity	$	811,024	$	766,895

See accompanying notes to these condensed consolidated financial statements.

Table of Contents

INTREPID POTASH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Sales	Sales	$	59,153	$	38,078	$	198,504	$	148,512	Sales	$	91,740	$	67,888	$	196,139	$	139,351
Less:	Less:									Less:
Freight costs	Freight costs	7,911		7,802		30,104		28,397		Freight costs	9,227		10,115		19,464		22,193
Warehousing and handling costs	Warehousing and handling costs	2,066		2,315		7,076		7,284		Warehousing and handling costs	2,204		2,378		4,680		5,010
Cost of goods sold	Cost of goods sold	34,974		27,045		123,815		104,100		Cost of goods sold	38,498		41,196		83,008		88,841
Lower of cost or net realizable value inventory adjustments		—		1,224		—		4,015
Costs associated with abnormal production		3,594		—		3,594		—
Gross Margin (Deficit)		10,608		(308)		33,915		4,716

Gross Margin										Gross Margin	41,811		14,199		88,987		23,307

Selling and administrative	Selling and administrative	5,890		6,750		18,293		20,022		Selling and administrative	7,218		6,612		14,007		12,403
Accretion of asset retirement obligation	Accretion of asset retirement obligation	441		434		1,323		1,303		Accretion of asset retirement obligation	490		441		980		882

Litigation settlement		—		—		—		10,075

Loss (gain) on sale of assets	Loss (gain) on sale of assets	5		21		(2,560)		(4,441)		Loss (gain) on sale of assets	1,066		(2,567)		1,166		(2,565)
Other operating income (expense)		192		237		(385)		495
Operating Income (Loss)		4,080		(7,750)		17,244		(22,738)
Other operating expense (income)										Other operating expense (income)	1,242		(583)		975		(577)
Operating Income										Operating Income	31,795		10,296		71,859		13,164

Other Income (Expense)	Other Income (Expense)									Other Income (Expense)
Interest expense, net	Interest expense, net	(82)		(2,450)		(1,426)		(3,877)		Interest expense, net	(24)		(918)		(57)		(1,344)

Interest income										Interest income	15		—		17		—
Other income	Other income	25		25		42		129		Other income	11		8		539		17
Gain on extinguishment of debt	Gain on extinguishment of debt	—		—		10,113		—		Gain on extinguishment of debt	—		10,113		—		10,113

Income (Loss) Before Income Taxes		4,023		(10,175)		25,973		(26,486)
Income Before Income Taxes										Income Before Income Taxes	31,797		19,499		72,358		21,950

Income Tax Benefit		—		—		—		42
Net Income (Loss)		$	4,023	$	(10,175)	$	25,973	$	(26,444)
Income Tax Expense										Income Tax Expense	(8,089)		—		(17,228)		—
Net Income										Net Income	$	23,708	$	19,499	$	55,130	$	21,950

Weighted Average Shares Outstanding:	Weighted Average Shares Outstanding:									Weighted Average Shares Outstanding:
Basic	Basic	13,123		13,006		13,089		12,981		Basic	13,246		13,089		13,203		13,071
Diluted	Diluted	13,367		13,006		13,352		12,981		Diluted	13,620		13,338		13,690		13,335
Earnings Per Share:	Earnings Per Share:									Earnings Per Share:
Basic	Basic	$	0.31	$	(0.78)	$	1.98	$	(2.04)	Basic	$	1.79	$	1.49	$	4.18	$	1.68
Diluted	Diluted	$	0.30	$	(0.78)	$	1.95	$	(2.04)	Diluted	$	1.74	$	1.46	$	4.03	$	1.65

See accompanying notes to these condensed consolidated financial statements.

Table of Contents

INTREPID POTASH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share amounts)

Nine-Month Period Ended September 30, 2021
Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders' Equity
Shares Amount
Balance, December 31, 2020 13,049,820 $ 13 $ 656,837 $ (245,591) $ 411,259
Net income — — — 25,973 25,973
Stock-based compensation — — 2,289 — 2,289
Exercise of stock options 7,826 — 81 — 81
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting 66,464 — (382) — (382)
Balance, September 30, 2021 13,124,110 $ 13 $ 658,825 $ (219,618) $ 439,220
Three-Month Period Ended September 30, 2021
Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders' Equity
Shares Amount
Balance, June 30, 2021 13,121,087 $ 13 $ 658,163 $ (223,641) $ 434,535
Net income — — — 4,023 4,023
Stock-based compensation — — 634 — 634
Exercise of stock options 2,913 — 30 — 30
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting 110 — (2) — (2)
Balance, September 30, 2021 13,124,110 $ 13 $ 658,825 $ (219,618) $ 439,220
Nine-Month Period Ended September 30, 2020
Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders' Equity
Shares Amount
Balance, December 31, 2019 12,955,351 $ 13 $ 653,080 $ (218,437) $ 434,656
Net loss — — — (26,444) (26,444)
Stock-based compensation — — 2,981 — 2,981
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting 51,076 — (97) — (97)
Balance, September 30, 2020 13,006,427 $ 13 $ 655,964 $ (244,881) $ 411,096
Three-Month Period Ended September 30, 2020
Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders' Equity
Shares Amount
Balance, June 30, 2020 13,006,124 $ 13 $ 654,901 $ (234,706) $ 420,208
Net loss — — — (10,175) (10,175)
Stock-based compensation — — 985 — 985
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting 303 — 78 — 78
Balance, September 30, 2020 13,006,427 $ 13 $ 655,964 $ (244,881) $ 411,096


	Six-Month Period Ended June 30, 2022
	Common Stock			Additional Paid-in Capital		Retained Earnings		Total Stockholders' Equity
	Shares	Amount
Balance, December 31, 2021	13,149,315	$	13	$	659,147	$	4,243	$	663,403



Net income	—	—		—		55,130		55,130
Stock-based compensation	—	—		2,558		—		2,558
Exercise of stock options	10,718	—		110		—		110
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting	105,780	—		(4,362)		—		(4,362)
Balance, June 30, 2022	13,265,813	$	13	$	657,453	$	59,373	$	716,839

	Three-Month Period Ended June 30, 2022
	Common Stock			Additional Paid-in Capital		Retained Earnings		Total Stockholders' Equity
	Shares	Amount
Balance, March 31, 2022	13,218,875	$	13	$	657,590	$	35,665	$	693,268



Net income	—	—		—		23,708		23,708
Stock-based compensation	—	—		1,391		—		1,391
Exercise of stock options	1,991	—		20		—		20
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting	44,947	—		(1,548)		—		(1,548)
Balance, June 30, 2022	13,265,813	$	13	$	657,453	$	59,373	$	716,839

	Six-Month Period Ended June 30, 2021
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance, December 31, 2020	13,049,820	$	13	$	656,837	$	(245,591)	$	411,259



Net income	—	—		—		21,950		21,950
Stock-based compensation	—	—		1,655		—		1,655
Exercise of stock options	4,913	—		51		—		51
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting	66,354	—		(380)		—		(380)
Balance, June 30, 2021	13,121,087	$	13	$	658,163	$	(223,641)	$	434,535

	Three-Month Period Ended June 30, 2021
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance, March 31, 2021	13,065,654	$	13	$	657,566	$	(243,140)	$	414,439



Net income	—	—		—		19,499		19,499
Stock-based compensation	—	—		765		—		765
Exercise of stock options	725	—		7		—		7
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting	54,708	—		(175)		—		(175)
Balance, June 30, 2021	13,121,087	$	13	$	658,163	$	(223,641)	$	434,535

See accompanying notes to these condensed consolidated financial statements.

Table of Contents


INTREPID POTASH, INC.	INTREPID POTASH, INC.					INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS					CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)	(In thousands)					(In thousands)
		Nine Months Ended September 30,					Six Months Ended June 30,
		2021		2020			2022		2021
Cash Flows from Operating Activities:	Cash Flows from Operating Activities:					Cash Flows from Operating Activities:
Net income (loss)		$	25,973	$	(26,444)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income						Net income	$	55,130	$	21,950
Adjustments to reconcile net income to net cash provided by operating activities:						Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization	Depreciation, depletion and amortization	26,509		26,377		Depreciation, depletion and amortization	16,923		18,079
Accretion of asset retirement obligation	Accretion of asset retirement obligation	1,323		1,303		Accretion of asset retirement obligation	980		882
Amortization of deferred financing costs	Amortization of deferred financing costs	254		357		Amortization of deferred financing costs	120		194
Amortization of intangible assets	Amortization of intangible assets	241		241		Amortization of intangible assets	161		161
Stock-based compensation	Stock-based compensation	2,289		2,981		Stock-based compensation	2,558		1,655
Lower of cost or net realizable value inventory adjustments		—		4,015

Gain on disposal of assets		(2,560)		(4,441)

Loss (gain) on disposal of assets						Loss (gain) on disposal of assets	1,166		(2,565)

Gain on extinguishment of debt	Gain on extinguishment of debt	(10,113)		—		Gain on extinguishment of debt	—		(10,113)
Allowance for doubtful accounts		—		275

Allowance for parts inventory obsolescence	Allowance for parts inventory obsolescence	—		492		Allowance for parts inventory obsolescence	1,600		—
Other		—		(116)

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Trade accounts receivable, net	Trade accounts receivable, net	(9,936)		203		Trade accounts receivable, net	2,770		(235)
Other receivables, net	Other receivables, net	(1,872)		(1,328)		Other receivables, net	(646)		(893)

Inventory, net	Inventory, net	11,678		3,100		Inventory, net	(2,759)		13,767
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(1,148)		(313)		Prepaid expenses and other current assets	673		495
Deferred tax assets, net						Deferred tax assets, net	16,941		—
Accounts payable, accrued liabilities, and accrued employee compensation and benefits	Accounts payable, accrued liabilities, and accrued employee compensation and benefits	15,254		4,071		Accounts payable, accrued liabilities, and accrued employee compensation and benefits	(11,412)		6,023

Operating lease liabilities	Operating lease liabilities	(1,616)		(1,695)		Operating lease liabilities	(1,233)		(1,061)
Other liabilities	Other liabilities	3,147		9,409		Other liabilities	257		3,097
Net cash provided by operating activities	Net cash provided by operating activities	59,423		18,487		Net cash provided by operating activities	83,229		51,436

Cash Flows from Investing Activities:	Cash Flows from Investing Activities:					Cash Flows from Investing Activities:
Additions to property, plant, equipment, mineral properties and other assets	Additions to property, plant, equipment, mineral properties and other assets	(12,437)		(14,087)		Additions to property, plant, equipment, mineral properties and other assets	(22,774)		(6,626)

Long-term investment		—		(3,500)
Purchase of investments						Purchase of investments	(10,899)		—
Proceeds from sale of assets	Proceeds from sale of assets	6,042		4,786		Proceeds from sale of assets	46		6,042

Net cash used in investing activities	Net cash used in investing activities	(6,395)		(12,801)		Net cash used in investing activities	(33,627)		(584)

Table of Contents


INTREPID POTASH, INC.	INTREPID POTASH, INC.					INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS					CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)	(In thousands)					(In thousands)
		Nine Months Ended September 30,					Six Months Ended June 30,
		2021		2020			2022		2021
Cash Flows from Financing Activities:	Cash Flows from Financing Activities:					Cash Flows from Financing Activities:
Debt prepayment costs	Debt prepayment costs	(505)		(1,869)		Debt prepayment costs	—		(505)
Repayments of long-term debt	Repayments of long-term debt	(15,000)		(35,000)		Repayments of long-term debt	—		(15,000)
Proceeds from short-term borrowings on credit facility		—		10,000
Repayments of short-term borrowings on credit facility		(29,817)		—

Payments of financing lease	Payments of financing lease	(1,258)		—		Payments of financing lease	—		(1,258)
Capitalized debt fees		—		(36)

Employee tax withholding paid for restricted stock upon vesting	Employee tax withholding paid for restricted stock upon vesting	(382)		(96)		Employee tax withholding paid for restricted stock upon vesting	(4,362)		(380)
Proceeds from loan under CARES Act		—		10,000

Proceeds from exercise of stock options	Proceeds from exercise of stock options	81		—		Proceeds from exercise of stock options	110		51
Net cash used in financing activities	Net cash used in financing activities	(46,881)		(17,001)		Net cash used in financing activities	(4,252)		(17,092)

Net Change in Cash, Cash Equivalents and Restricted Cash	Net Change in Cash, Cash Equivalents and Restricted Cash	6,147		(11,315)		Net Change in Cash, Cash Equivalents and Restricted Cash	45,350		33,760
Cash, Cash Equivalents and Restricted Cash, beginning of period	Cash, Cash Equivalents and Restricted Cash, beginning of period	20,184		21,239		Cash, Cash Equivalents and Restricted Cash, beginning of period	37,146		20,184
Cash, Cash Equivalents and Restricted Cash, end of period	Cash, Cash Equivalents and Restricted Cash, end of period	$	26,331	$	9,924	Cash, Cash Equivalents and Restricted Cash, end of period	$	82,496	$	53,944

Supplemental disclosure of cash flow information	Supplemental disclosure of cash flow information					Supplemental disclosure of cash flow information
Net cash paid during the period for:	Net cash paid during the period for:					Net cash paid during the period for:
Interest	Interest	$	851	$	1,974	Interest	$	44	$	777
Income taxes	Income taxes	$	131	$	92	Income taxes	$	334	$	91
Amounts included in the measurement of operating lease liabilities	Amounts included in the measurement of operating lease liabilities	$	1,769	$	1,878	Amounts included in the measurement of operating lease liabilities	$	983	$	1,169
Accrued purchases for property, plant, equipment, and mineral properties	Accrued purchases for property, plant, equipment, and mineral properties	$	1,842	$	1,050	Accrued purchases for property, plant, equipment, and mineral properties	$	3,477	$	1,420
Right-of-use assets exchanged for operating lease liabilities	Right-of-use assets exchanged for operating lease liabilities	$	546	$	216	Right-of-use assets exchanged for operating lease liabilities	$	794	$	340

See accompanying notes to these condensed consolidated financial statements.

Table of Contents

INTREPID POTASH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1— COMPANY BACKGROUND

We are a diversified mineral company that delivers potassium, magnesium, sulfur, salt, and water products essential for customer success in agriculture, animal feed and the oil and gas industry. We are the only U.S. producer of muriate of potash (sometimes referred to as potassium chloride or potash), which is applied as an essential nutrient for healthy crop development, utilized in several industrial applications, and used as an ingredient in animal feed. In addition, we produce a specialty fertilizer, Trio®, which delivers three key nutrients, potassium, magnesium, and sulfate, in a single particle. We also provide water, magnesium chloride, brine and various oilfield products and services.

Our extraction and production operations are conducted entirely in the continental United States. We produce potash from 3 solution mining facilities: our HB solution mine in Carlsbad, New Mexico, our solution mine in Moab, Utah, and our brine recovery mine in Wendover, Utah. We also operate the North compaction facility in Carlsbad, New Mexico, which compacts and granulates product from the HB mine. We produce Trio® from our conventional underground East mine in Carlsbad, New Mexico.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico tothat support our mining and industrial operations. Water ~~we do~~that is not ~~use~~used to support our mining and industrial operations ~~we sell~~is primarily sold to support oil and gas development in the Permian Basin in New Mexico near our Carlsbad facilities. We continue to work to expand our ~~sales of water.~~water business. In May 2019, we acquired certain land, water rights, state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company. We refer to these assets and operations as "Intrepid South." Due to the strategic location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including restricted use agreements of surface or subsurface rights, to customers where such sales provide a solution to such customer's operations in the oil and gas industry. See Note 14—Commitments and Contingencies below for further information regarding our water rights.

We have 3 segments: potash, Trio®, and oilfield solutions. We account for sales of byproducts as revenue in the potash or Trio® segment based on which segment generates the byproduct. Intersegment sales prices are market based and are eliminated.

"Intrepid," "our," "we," or "us," means Intrepid Potash, Inc. and its consolidated subsidiaries.

Note 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Statement Presentation—Our unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of interim financial information, have been included. These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

~~Reverse Stock Split~~—On August 10, 2020, after receipt of stockholder approval, the Board of Directors approved an amendment to our Certificate of Incorporation to effect a reverse stock split of our common stock, par value $0.001 per share, by a ratio of one-for-10. The reverse stock split became effective August 14, 2020. Additionally, the total number of authorized shares of our common stock was reduced to 40,000,000 shares. Unless otherwise indicated, all share amounts, per share data, share prices, exercise prices and conversion rates set forth in these notes and the accompanying condensed consolidated financial statements have, where applicable, been adjusted retroactively to reflect this reverse stock split.

Recently Adopted Accounting Standards

—In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and ~~amending~~amends existing guidance to improve consistent application. Most amendments within this standard were required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We adopted this standard on January 1, 2021. The effect of the adoption of this standard ~~was~~had an immaterial impact on our condensed consolidated financial statements.

Pronouncements Issued But Not Yet Adopted—In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"), which provides optional exceptions to GAAP for certain transactions related to the transition away from The London Interbank Offered Rate ("LIBOR"). The amended guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements necessitated by the reference rate reform. Application of the guidance in ASU 2020-04 is optional, is only available in certain situations, and is only available for

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~~In June 2016,~~companies to apply until December 31, 2022. We are currently evaluating the ~~FASB issued~~impacts of reference rate reform and the guidance in ASU ~~No. 2016-13,~~ ~~Financial Instruments - (Topic 326): Measurement of Credit Losses on Financial Instruments~~, which we adopted on January 1, 2020. ASU No. 2016-13 changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life and required a cumulative-effect adjustment to the statement of financial position on January 1, 2020. The effect of the adoption of this standard was immaterial2020-04 on our ~~condensed~~ consolidated financial statements.

~~Reclassifications of Prior Period Presentation—Certain prior period amounts have been reclassified in order to conform to the current period presentation. These reclassifications had no effect on the reported results of operations.~~

Note 3— EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. For purposes of determining diluted earnings per share, basic weighted-average common shares outstanding is adjusted to include potentially dilutive securities, including restricted stock, stock options, and performance units. The treasury-stock method is used to measure the dilutive impact of potentially dilutive shares. Potentially dilutive shares are excluded from the diluted weighted-average shares outstanding computation in periods in which they have an anti-dilutive effect. The following table shows the calculation of basic and diluted earnings per share (in thousands, except per share amounts):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Net income (loss)		$	4,023	$	(10,175)	$	25,973	$	(26,444)
Net income										Net income	$	23,708	$	19,499	$	55,130	$	21,950

Basic weighted-average common shares outstanding	Basic weighted-average common shares outstanding	13,123		13,006		13,089		12,981		Basic weighted-average common shares outstanding	13,246		13,089		13,203		13,071
Add: Dilutive effect of restricted stock	Add: Dilutive effect of restricted stock	177		—		197		—		Add: Dilutive effect of restricted stock	209		185		245		199
Add: Dilutive effect of stock options	Add: Dilutive effect of stock options	67		—		66		—		Add: Dilutive effect of stock options	165		64		242		65

Diluted weighted-average common shares outstanding	Diluted weighted-average common shares outstanding	13,367		13,006		13,352		12,981		Diluted weighted-average common shares outstanding	13,620		13,338		13,690		13,335

Basic	Basic	$	0.31	$	(0.78)	$	1.98	$	(2.04)	Basic	$	1.79	$	1.49	$	4.18	$	1.68
Diluted	Diluted	$	0.30	$	(0.78)	$	1.95	$	(2.04)	Diluted	$	1.74	$	1.46	$	4.03	$	1.65

The following table shows the shares that have an anti-dilutive effect and are excluded from the diluted weighted-average shares outstanding computations (in thousands):


		Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended June 30,		Six Months Ended June 30,
		2021	2020	2021	2020		2022	2021	2022	2021
Anti-dilutive effect of restricted stock	Anti-dilutive effect of restricted stock	54	289	85	233	Anti-dilutive effect of restricted stock	38	96	11	80

Anti-dilutive effect of stock options outstanding	Anti-dilutive effect of stock options outstanding	224	310	180	310	Anti-dilutive effect of stock options outstanding	—	62	—	100

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Note 4— CASH, CASH EQUIVALENTS AND RESTRICTED CASH

We consider financial instruments with original maturities of three months of less to be cash equivalents. Total cash, cash equivalents and restricted cash, as shown on the condensed consolidated statements of cash flows are included in the following accounts at ~~September~~June 30, ~~2021,~~2022, and ~~2020~~2021 (in thousands):


		September 30, 2021		September 30, 2020			June 30, 2022		June 30, 2021
Cash and cash equivalents	Cash and cash equivalents	$	25,637	$	9,258	Cash and cash equivalents	$	81,927	$	53,250
Restricted cash included in other current assets	Restricted cash included in other current assets	175		150		Restricted cash included in other current assets	25		175
Restricted cash included in other long-term assets	Restricted cash included in other long-term assets	519		516		Restricted cash included in other long-term assets	544		519
Total cash, cash equivalents, and restricted cash as shown in the statement of cash flows	Total cash, cash equivalents, and restricted cash as shown in the statement of cash flows	$	26,331	$	9,924	Total cash, cash equivalents, and restricted cash as shown in the statement of cash flows	$	82,496	$	53,944

Restricted cash included in other current and long-term assets on the condensed consolidated balance sheets represents amounts whose use is restricted by contractual agreements with various entities, principally the Bureau of Land Management or the State of Utah, as security to fund future reclamation obligations at our sites.

Note 5— INVENTORY AND LONG-TERM PARTS INVENTORY

The following summarizes our inventory, recorded at the lower of weighted-average cost or estimated net realizable value, as of ~~September~~June 30, ~~2021,~~2022, and December 31, ~~2020~~2021 (in thousands):


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Finished goods product inventory	Finished goods product inventory	$	32,156	$	48,961	Finished goods product inventory	$	44,663	$	42,492
In-process inventory	In-process inventory	32,974		28,833		In-process inventory	27,135		27,211
Total product inventory	Total product inventory	65,130		77,794		Total product inventory	71,798		69,703
Current parts inventory, net	Current parts inventory, net	11,698		10,879		Current parts inventory, net	10,846		9,153
Total current inventory, net	Total current inventory, net	76,828		88,673		Total current inventory, net	82,644		78,856
Long-term parts inventory, net	Long-term parts inventory, net	29,067		28,900		Long-term parts inventory, net	26,622		29,251
Total inventory, net	Total inventory, net	$	105,895	$	117,573	Total inventory, net	$	109,266	$	108,107

Parts inventory is shown net of estimated allowances for obsolescence of ~~$1.1~~$2.9 million as of ~~September~~June 30, ~~2021,~~2022, and $3.2 million as of December 31, ~~2020.~~

Production was well below normal at our HB solar solution facility due to significant rainfall and lower evaporation rates, resulting in fewer harvestable tons of potash from our solar solution ponds. Accordingly, we recorded abnormal production costs of $3.6 million for the three and nine months ended September 30, 2021, and we may incur additional abnormal production costs in future periods. We did not incur any abnormal production costs during the three and nine months ended September 30, 2020.

As a result of routine assessments of the lower of weighted-average cost or estimated net realizable value of our finished goods product inventory, we recorded inventory charges of $1.2 million and $4.0 million for the three and nine months ended September 30, 2020, respectively. We recorded no such inventory charges during the three and nine months ended September 30, 2021.

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Note 6 — PROPERTY, PLANT, EQUIPMENT, AND MINERAL PROPERTIES

Property, plant, equipment, and mineral properties were comprised of the following (in thousands):


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Land	Land	$	24,136	$	27,263	Land	$	24,136	$	24,136
Ponds and land improvements	Ponds and land improvements	68,247		67,843		Ponds and land improvements	71,031		69,261
Mineral properties and development costs	Mineral properties and development costs	144,449		143,955		Mineral properties and development costs	144,279		144,255
Buildings and plant	Buildings and plant	82,923		81,692		Buildings and plant	84,834		84,268
Machinery and equipment	Machinery and equipment	270,556		265,121		Machinery and equipment	280,313		272,323
Vehicles	Vehicles	6,691		5,919		Vehicles	7,340		6,855
Office equipment and improvements	Office equipment and improvements	9,147		9,083		Office equipment and improvements	9,842		8,956
Operating lease ROU assets	Operating lease ROU assets	8,835		9,622		Operating lease ROU assets	5,340		7,763
Breeding stock	Breeding stock	278		260		Breeding stock	317		308
Construction in progress	Construction in progress	6,778		1,710		Construction in progress	21,690		11,469
Total property, plant, equipment, and mineral properties, gross	Total property, plant, equipment, and mineral properties, gross	$	622,040	$	612,468	Total property, plant, equipment, and mineral properties, gross	$	649,122	$	629,594
Less: accumulated depreciation, depletion, and amortization	Less: accumulated depreciation, depletion, and amortization	(282,054)		(256,971)		Less: accumulated depreciation, depletion, and amortization	(301,288)		(288,477)
Total property, plant, equipment, and mineral properties, net	Total property, plant, equipment, and mineral properties, net	$	339,986	$	355,497	Total property, plant, equipment, and mineral properties, net	$	347,834	$	341,117

In May 2021, we sold approximately 330 acres of land we owned in Texas for $6.0 million and recorded a gain of $2.8 million. ~~In March 2020, we sold approximately 320 acres of land for $4.8 million and recorded a gain of $4.7 million.~~

We incurred the following expenses for depreciation, depletion, and amortization, including expenses capitalized into inventory, for the following periods (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Depreciation	Depreciation	$	7,294	$	7,511	$	22,145	$	22,164	Depreciation	$	7,344	$	7,356	$	14,532	$	14,851
Depletion	Depletion	600		710		2,796		2,599		Depletion	286		721		1,430		2,196
Amortization of right of use assets	Amortization of right of use assets	536		527		1,568		1,614		Amortization of right of use assets	395		521		961		1,032
Total incurred	Total incurred	$	8,430	$	8,748	$	26,509	$	26,377	Total incurred	$	8,025	$	8,598	$	16,923	$	18,079

Note 7 — DEBT

��Revolving Credit Facility—We maintain a revolving credit facility with Bank of Montreal. As of ~~September~~June 30, ~~2021,~~2022, borrowings under the credit facility bear interest at LIBOR (London Interbank Offered Rate) plus an applicable margin of 1.25% to 2.00% per annum, based on our leverage ratio as calculated in accordance with the agreement governing the revolving credit facility. We have granted to Bank of Montreal a first lien on substantially all of our current and non-current assets. The obligations under the credit facility are unconditionally guaranteed by several of our subsidiaries.

We occasionally borrow and repay amounts under the revolving credit facility for near-term working capital needs or other purposes and may do so in the future. During the three and ~~nine~~six months ended ~~September~~June 30, 2022, and June 30, 2021, we made no borrowings and we made no repayments under the ~~facility. During the three and nine months ended September 30, 2021, we made repayments of $29.8 million under the~~revolving credit facility. As of ~~September~~June 30, 2022, and December 31, 2021, we had no borrowings outstanding and $1 million in outstanding letters of credit under ~~the~~this facility.

As of ~~September~~June 30, ~~2021,~~2022, we were in compliance with all applicable covenants under the revolving credit facility.

In August 2022, we amended the revolving credit facility to increase the amount available under the facility from $75 million to $150 million, and to extend the maturity date to August 4, 2027. Borrowings under the amended credit facility will bear interest at SOFR (Secured Overnight Financing Rate) plus an applicable margin 1.50% to 2.25% per annum, based on our leverage ratio as calculated in accordance with the amended agreement governing the revolving credit facility.

PPP Loan—In April 2020, we received a $10 million loan under the Paycheck Protection Program (the "PPP") under the CARES Act. We submitted our application for forgiveness of the full amount of the loan in November 2020. In June 2021, we received notice that the Small Business Administration had remitted funds to our bank to fully repay our PPP loan and accrued interest. Accordingly, we recognized a gain of $10.1 million related to the forgiveness of the PPP loan and the associated accrued interest on the PPP loan.

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Senior Notes—In June 2021 we repaid the remaining $15.0 million of principal outstanding on our Series B Senior Notes due April 14, 2023 (the "Series B Senior Notes") and satisfied all obligations under the Amended and Restated Note Purchase Agreement, dated as of October 31, 2016, by and among the Company and each of the purchasers named therein (as amended, the "Note Purchase Agreement"). In connection with this repayment, the Company paid in aggregate approximately $15.6 million, which consisted of (i) $15.0 million of remaining aggregate principal amount of Series B Senior Notes, (ii) approximately $0.1 million of accrued interest and (iii) a "make-whole" premium of $0.5 million. As a result of the repayment, the Note Purchase Agreement was terminated.

Interest Expense—Interest expense is recorded net of any capitalized interest associated with investments in capital projects. We incurred gross interest expense of $0.1 million and ~~$2.5~~$0.9 million for the three months ended ~~September~~June 30, 2022, and June 30, 2021, ~~and 2020,~~ respectively, and ~~$1.5~~$0.2 million and ~~$4.0~~$1.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020,~~June 30, 2021 respectively.

Amounts included in interest expense, net for the three and six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020,~~2021, were as follows (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Interest on debt borrowings	Interest on debt borrowings	$	50	$	386	$	717	$	1,748	Interest on debt borrowings	$	22	$	302	$	43	$	667
Make-whole payments	Make-whole payments	—		1,868		505		1,868		Make-whole payments	—		503		—		505
Amortization of deferred financing costs	Amortization of deferred financing costs	60		196		254		357		Amortization of deferred financing costs	60		126		120		194
Gross interest expense	Gross interest expense	110		2,450		1,476		3,973		Gross interest expense	82		931		163		1,366
Less capitalized interest	Less capitalized interest	(28)		—		(50)		(96)		Less capitalized interest	(58)		(13)		(106)		(22)
Interest expense, net	Interest expense, net	$	82	$	2,450	$	1,426	$	3,877	Interest expense, net	$	24	$	918	$	57	$	1,344

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Note 8 — INTANGIBLE ASSETS

We have water rights, recorded at $19.2 million at ~~September~~June 30, ~~2021,~~2022, and December 31, ~~2020.~~2021. Our water rights have indefinite lives and are not amortized. We evaluate our water rights at least annually on October 1 for impairment, or more frequently if circumstances require.

We account for other intangible assets as finite-lived intangible assets and amortize those intangible assets over the period of estimated benefit, using the straight-line method. The weighted average amortization period for the other intangible assets is approximately 1817 years. At ~~September~~June 30, ~~2021,~~2022, and December 31, ~~2020,~~2021, these intangible assets had a net book value of ~~$5.6~~$5.4 million and ~~$5.9~~$5.6 million, respectively, and are included in "Other assets, net" on the Condensed Consolidated Balance Sheets.

Note 9— FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS OF POSSIBLE FUTURE

PUBLIC DEBT

Intrepid Potash, Inc., as the parent company, has no independent assets or operations, and operations are conducted solely through its subsidiaries. Cash generated from operations is held at the parent-company level as cash on hand and cash equivalents and totaled ~~$25.6~~$81.9 million and ~~$19.5~~$36.5 million at ~~September~~June 30, ~~2021,~~2022, and December 31, ~~2020,~~2021, respectively. If one or more of our wholly-owned operating subsidiaries guarantee public debt securities in the future, those guarantees will be full and unconditional and will constitute the joint and several obligations of the subsidiary guarantors. The assets and liabilities of our other subsidiaries are immaterial. There are no restrictions on our ability to obtain cash dividends or other distributions of funds from the subsidiary guarantors, except those imposed by applicable law.

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Note 10 — ASSET RETIREMENT OBLIGATION

We recognize an estimated liability for future costs associated with the abandonment and reclamation of our mining properties. A liability for the fair value of an asset retirement obligation and a corresponding increase to the carrying value of the related long-lived asset are recorded as the mining operations occur or the assets are acquired. As of June 30, 2022, and December 31, 2021, our asset retirement obligation was $28.0 million, and $27.0 million, respectively.

Our asset retirement obligation is based on the estimated cost to abandon and reclaim the mining operations, the economic life of the properties, and federal and state regulatory requirements. The liability is discounted using credit adjusted risk-free rate estimates at the time the liability is incurred or when there are upward revisions to estimated costs. The credit adjusted risk-free rates used to discount our abandonment liabilities range from 6.9% to 9.7%. Revisions to the liability occur due to construction of new or expanded facilities, changes in estimated abandonment costs or economic lives, or if federal or state regulators enact new requirements regarding the abandonment or reclamation of mines.

Following is a table of the changes to our asset retirement obligation for the following periods (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Asset retirement obligation, at beginning of period	Asset retirement obligation, at beginning of period	$	24,780	$	23,003	$	23,872	$	22,250	Asset retirement obligation, at beginning of period	$	27,514	$	24,313	$	27,024	$	23,872
Liabilities settled		—		—		—		(116)

Changes in estimated obligations	Changes in estimated obligations	—		—		26		—		Changes in estimated obligations	—		26		—		26
Accretion of discount	Accretion of discount	441		434		1,323		1,303		Accretion of discount	490		441		980		882
Total asset retirement obligation, at end of period	Total asset retirement obligation, at end of period	$	25,221	$	23,437	$	25,221	$	23,437	Total asset retirement obligation, at end of period	$	28,004	$	24,780	$	28,004	$	24,780

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Note 11 — REVENUE

Revenue Recognition—We account for revenue in accordance with ASC Topic 606 Revenue from Contracts with Customers ("ASC 606"). Under ASC 606, we recognize revenue when control of the promised goods or services is transferred to customers in an amount that reflects the consideration we expect to be entitled in exchange for those goods or services. The timing of revenue recognition, billings, and cash collection may result in contract assets or contract liabilities.

Contract Balances: As of ~~September~~June 30, ~~2021,~~2022, and ~~September 30, 2020,~~December 31, 2021, we had ~~$33.7~~$34.1 million and ~~$26.5~~$33.8 million of contract liabilities, respectively, the majority of which are included in "Other current liabilities" on the Condensed Consolidated Balance Sheets, primarily related to cash advances received from a customer for water purchases. Customer advances received before we have satisfied our performance obligations are accounted for as a contract liability (sometimes referred to in practice as deferred revenue). We will recognize the deferred revenue at the time the customer calls for water delivery. See Note 14—Commitments and Contingencies below for additional information regarding our water rights. Our deferred revenue activity for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020~~2021 is shown below (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Beginning balance	Beginning balance	$	33,631	$	22,690	$	30,418	$	16,612	Beginning balance	$	34,023	$	33,842	$	33,788	$	30,418
Additions	Additions	146		3,883		4,119		13,529		Additions	241		—		590		3,972
Recognized as revenue during period	Recognized as revenue during period	(71)		(71)		(831)		(3,639)		Recognized as revenue during period	(154)		(211)		(268)		(759)
Ending balance	Ending balance	$	33,706	$	26,502	$	33,706	$	26,502	Ending balance	$	34,110	$	33,631	$	34,110	$	33,631

Disaggregation of Revenue: The tables below show the disaggregation of revenue by product and reconciles disaggregated revenue to segment revenue for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020.~~2021. We believe the disaggregation of revenue by products best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic conditions (in thousands):


		Three Months Ended September 30, 2021											Three Months Ended June 30, 2022
Product	Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total		Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total
Potash	Potash	$	26,573	$	—	$	—	$	(55)	$	26,518	Potash	$	43,885	$	—	$	—	$	(66)	$	43,819
Trio®	Trio®	—		19,495		—		—		19,495		Trio®	—		34,687		—		—		34,687
Water	Water	263		1,310		4,382		—		5,955		Water	363		724		3,692		—		4,779
Salt	Salt	2,540		22		—		—		2,562		Salt	2,658		56		—		—		2,714
Magnesium Chloride	Magnesium Chloride	1,921		—		—		—		1,921		Magnesium Chloride	1,199		—		—		—		1,199
Brine Water	Brine Water	376		—		301		—		677		Brine Water	722		—		648		—		1,370
Other	Other	—		—		2,025		—		2,025		Other	—		—		3,172		—		3,172
Total Revenue	Total Revenue	$	31,673	$	20,827	$	6,708	$	(55)	$	59,153	Total Revenue	$	48,827	$	35,467	$	7,512	$	(66)	$	91,740

		Nine Months Ended September 30, 2021											Six Months Ended June 30, 2022
Product	Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total		Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total
Potash	Potash	$	97,248	$	—	$	—	$	(177)	$	97,071	Potash	$	95,507	$	—	$	—	$	(161)	$	95,346
Trio®	Trio®	—		68,348		—		—		68,348		Trio®	—		74,303		—		—		74,303
Water	Water	1,942		2,808		9,507		—		14,257		Water	1,137		1,926		7,880		—		10,943
Salt	Salt	6,587		288		—		—		6,875		Salt	5,292		290		—		—		5,582
Magnesium Chloride	Magnesium Chloride	5,829		—		—		—		5,829		Magnesium Chloride	2,014		—		—		—		2,014
Brine Water	Brine Water	1,338		—		735		—		2,073		Brine Water	1,319		—		1,387		—		2,706
Other	Other	—		—		4,051		—		4,051		Other	—		—		5,245		—		5,245
Total Revenue	Total Revenue	$	112,944	$	71,444	$	14,293	$	(177)	$	198,504	Total Revenue	$	105,269	$	76,519	$	14,512	$	(161)	$	196,139

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		Three Months Ended September 30, 2020											Three Months Ended June 30, 2021
Product	Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total		Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total
Potash	Potash	$	18,575	$	—	$	—	$	(49)	$	18,526	Potash	$	32,881	$	—	$	—	$	(60)	$	32,821
Trio®	Trio®	—		11,441		—		—		11,441		Trio®	—		26,340		—		—		26,340
Water	Water	262		1,312		2,037		—		3,611		Water	520		514		1,783		—		2,817
Salt	Salt	1,995		137		—		—		2,132		Salt	2,008		70		—		—		2,078
Magnesium Chloride	Magnesium Chloride	1,127		—		—		—		1,127		Magnesium Chloride	1,880		—		—		—		1,880
Brine Water	Brine Water	228		—		105		—		333		Brine Water	404		—		229		—		633
Other	Other	—		—		908		—		908		Other	—		—		1,319		—		1,319
Total Revenue	Total Revenue	$	22,187	$	12,890	$	3,050	$	(49)	$	38,078	Total Revenue	$	37,693	$	26,924	$	3,331	$	(60)	$	67,888

		Nine Months Ended September 30, 2020											Six Months Ended June 30, 2021
Product	Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total		Product	Potash Segment		Trio® Segment		Oilfield Solutions Segment		Intersegment Eliminations		Total
Potash	Potash	$	69,942	$	—	$	—	$	(253)	$	69,689	Potash	$	70,675	$	—	$	—	$	(122)	$	70,553
Trio®	Trio®	—		51,474		—		—		51,474		Trio®	—		48,855		—		—		48,855
Water	Water	957		2,963		10,727		—		14,647		Water	1,679		1,498		5,125		—		8,302
Salt	Salt	5,792		285		—		—		6,077		Salt	4,047		266		—		—		4,313
Magnesium Chloride	Magnesium Chloride	2,838		—		—		—		2,838		Magnesium Chloride	3,908		—		—		—		3,908
Brine Water	Brine Water	975		—		297		—		1,272		Brine Water	961		—		434		—		1,395
Other	Other	—		—		2,515		—		2,515		Other	—		—		2,025		—		2,025
Total Revenue	Total Revenue	$	80,504	$	54,722	$	13,539	$	(253)	$	148,512	Total Revenue	$	81,270	$	50,619	$	7,584	$	(122)	$	139,351

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Note 12 — COMPENSATION PLANS

Equity Incentive Compensation Plan—Our Board of Directors and stockholders adopted a long-term incentive compensation plan called the Intrepid Potash, Inc. Amended and Restated Equity Incentive Plan (the "Plan"). The Plan was most recently amended and restated in May ~~2019.~~2022. We have issued common stock, restricted stock, performance units, and non-qualified stock option awards under the Plan. At ~~September~~June 30, ~~2021,~~2022, approximately ~~0.6~~1.1 million shares remained available for issuance under the Plan.

In ~~May 2021,~~March 2022, the Compensation Committee granted ~~16,535 shares of restricted stock to non-employee directors. The restricted shares vest~~ ~~one~~ ~~year after the date of grant, subject to continued employment. In March 2021, the Compensation Committee granted 42,445~~104,039 shares of restricted stock to executive officers and other key employees. These awards vest over three years, and in some cases, contain a market condition. In May 2022, the Compensation Committee granted 6,635 restricted shares to members of our Board of Directors. These awards vest over one year. As of ~~September~~June 30, ~~2021,~~2022, the following awards were outstanding under the Plan (in thousands):



						Outstanding as of ~~September~~June 30, ~~2021~~2022
Restricted Shares						~~321~~347

Non-qualified Stock Options						~~285~~273

Total share-based compensation expense was ~~$0.6~~$1.4 million and ~~$1.0~~$0.8 million for the three ~~months~~ ended ~~September~~June 30, ~~2021,~~2022, and ~~2020,~~2021, respectively, and ~~$2.3~~$2.6 million and ~~$3.0~~$1.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020,~~2021, respectively. As of ~~September~~June 30, ~~2021,~~2022, we had ~~$3.6~~$9.7 million of total remaining unrecognized compensation expense related to awards that is expected to be recognized over a weighted-average period of ~~1.4~~1.5 years.

Note 13 — INCOME TAXES

Our anticipated annual tax rate is impacted primarily by the amount of taxable income associated with each jurisdiction in which our income is subject to income tax, permanent differences between the financial statement carrying amounts and tax bases of assets and ~~liabilities.~~liabilities, and the benefit associated with the estimated effect of the percentage depletion deduction.

~~During the three months ended September 30, 2021, and 2020, we incurred no~~A summary of our provision for income tax expense. During the nine months ended September 30, 2021, we incurred no income tax expense. During the nine months ended September 30, 2020, we recognized an immaterial amount of income tax benefit.taxes is as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Current portion of income tax expense	$	148	$	—	$	287	$	—
Deferred portion of income tax expense	7,941		—		16,941		—
Total income tax expense	$	8,089	$	—	$	17,228	$	—

Our effective tax rate for the three months ended ~~September~~June 30, 2022, and 2021, was 25.4% and ~~2020,~~0%, respectively, and our effective tax rate for the ~~nine~~six months ended ~~September~~June 30, 2022, and 2021, was 23.8% and ~~2020, was~~ 0%., respectively. Our effective tax ~~rates~~rate differed from the statutory rate during ~~each~~this period primarily from the estimated permanent difference between book and tax income for 2022 for the percentage depletion deduction, as well as the effect of state income tax law changes enacted during the first half of 2022. Our effective tax rate for the three and six months ended June 30, 2021, was zero percent which differed from the statutory rate primarily due to ~~changes in~~ the valuation allowance that was established to offset our deferred tax assets.

We evaluate our deferred tax assets and liabilities each reporting period using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax liability or asset is expected to be settled or realized. The estimated statutory income tax rates that are applied to our current and deferred income tax calculations are impacted most significantly by the states in which we conduct business. Changing business conditions for normal business transactions and operations, as well as changes to state tax rates and apportionment laws, potentially alter our apportionment of income among the states for income tax purposes. These changes in apportionment laws result in changes in the calculation of our current and deferred income taxes, including the valuation of our deferred tax assets and liabilities. The effects of any such changes are recorded in the period of the adjustment. These adjustments can increase or decrease the net deferred tax asset on our condensed consolidated balance sheet. However, any resulting impact to the deferred tax benefit or deferred tax expense would be offset by a corresponding adjustment to the valuation allowance and would have no income statement effect.

As of September 30, 2021, we were in a near break-even cumulative three-year income position. Additionally, weather issues that have negatively affected potash production (see Note 5—Inventory for further information), outstanding legal issues which may have a material adverse effect on our future results of operations (see Note 14—Commitments for further information), supply chain issues that have driven near term supply shortages that have increased fertilizer prices along with the continued uncertainty from the ongoing COVID-19 pandemic make it difficult to accurately forecast sustained amounts of future income. These circumstances are significant negative evidence when evaluating the realizability of our deferred tax assets. This negative evidence continues to outweigh the positive evidence of profitability in 2018, and 2019, thereby requiring us to maintain the full valuation allowance as of September 30, 2021. However, we believe that if positive pricing and sales evidence trends continue and our future long-term forecasts show sustained profitability, it is possible that

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there may be sufficient positive evidence to release all or a portion of our valuation allowance within the next 12 months. The timing and amount of any valuation allowance release is subject to significant judgment that is considered with the timing and amounts of actual and future earnings. Release of any valuation allowance would result in a benefit to income tax expense in the period the release is recorded, which could have a material effect on net earnings.

Note 14 — COMMITMENTS AND CONTINGENCIES

Reclamation Deposits and Surety Bonds—As of ~~September~~June 30, ~~2021,~~2022, and December 31, ~~2020,~~2021, we had ~~$23.0~~$23.1 million of security placed principally with the State of Utah and the Bureau of Land Management for eventual reclamation of our various facilities. Of this total requirement, $0.5 million consisted of long-term restricted cash deposits reflected in "Other assets, net" on the condensed consolidated balance sheets and ~~$22.5~~$22.6 million was secured by surety bonds issued by an insurer. The surety bonds are held in place by an annual fee paid to the issuer and a letter of credit.

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We may be required to post additional security to fund future reclamation obligations as reclamation plans are updated or as governmental entities change requirements.

Legal—We are subject to claims and legal actions in the ordinary course of business. Legal costs are expensed as incurred. While there are uncertainties in predicting the outcome of any claim or legal action, except as noted below, we believe the ultimate resolution of these claims or actions is not reasonably likely to have a material adverse effect on our financial condition, results of operations, or cash flows.

~~Mosaic Settlement~~

In March 2020, we entered into a definitive settlement agreement with Mosaic Potash Carlsbad Inc. ("Mosaic") related to a complaint originally brought against us and Steve Gamble in February 2015. Mr. Gamble is a former employee of Intrepid and Mosaic. Under the terms of the settlement agreement, we paid Mosaic an aggregate of $10 million in May 2020 to dismiss all current and future claims arising from this matter against us and the matter is now closed.

Water Rights

In February 2019, ~~Pecos Valley Artesian Conservancy District, Carlsbad Irrigation District, and Otis Mutual Domestic Water Consumers & Sewage Works Association (together, the "Protestants") filed~~ an expedited inter se proceeding against us, Henry McDonald, Select Energy Services, LLC d/b/a Gregory Rockhouse Ranch, and Vision Resources, Inc. in the Fifth Judicial District Court for the County of Chaves in the State of New Mexico ("adjudication court"), which serves as the adjudication court for the Pecos Stream System, including the Pecos River. The Protestants challengedcommenced to determine the validity of our Pecos River water rights, representing approximately 20,000 acre feet per year. ~~A virtual trial began on~~On December ~~8, 2020 and concluded on December 18, 2020.~~

~~In August~~17, 2021, the adjudication court ~~issued~~entered its ~~rulings on the validity of our Pecos River water rights. The adjudication court entered~~ findings of fact and conclusions of law, ~~deciding~~which held that our predecessors in interest had forfeited all but approximately 5,800 acre feet of water per ~~year. The court further ruled~~year, and that of the remaining 5,800 acre feet of water that had not been forfeited, all but 150 acre feet of water had been abandoned prior to 2017. ~~The~~On March 17, 2022, the adjudication court entered the subfile order ~~based on these~~and partial final judgment and decree, which adopted the court's December 17, 2021 findings of fact and ~~conclusions~~conclusion of law ~~has not been entered~~ and specifies our right to 150 acre feet per annum of water for industrial-salt processing use. On April 15, 2022, we filed a notice of appeal of the adjudication court has requested and received further briefing on the impact of a decision by the New Mexico Court of Appeals which may have an impact on the current analysis in the findings of fact and conclusions of law. Once the adjudication court has determined this impact and made revisions and modifications (if any), we will determine whether to appeal the adjudication court’scourt's ruling on the validity of our water ~~rights.~~rights as well as motion to stay the effect of the adjudication court's ruling on any repayment requirement the New Mexico Office of State Engineer ("OSE") may seek to impose following entry of the subfile order and partial final decree. We ultimately withdrew our motion to stay on June 10, 2022, after the OSE indicated it would not seek immediate repayment of any water used pursuant to the emergency or preliminary authorizations, described below.

In 2017 and 2018 the ~~New Mexico Office of the State Engineer (“OSE”)~~OSE had granted us preliminary and emergency authorizations to sell approximately 5,700 ~~acre feet~~acre-feet of water ~~annually.~~per year from our Pecos River Water rights. The preliminary and emergency authorizations allowed for water sales to begin immediately, subject to repayment if the underlying water rights ~~are~~were ultimately found to be invalid. Since the adjudication court entered the subfile order and partial final decree based on its amended findings of fact and conclusion of law discussed above, if our appeal of the subfile order and partial final decree is unsuccessful, we may have to repay the water pumped under the preliminary authorizations. Repayment of this water ~~can~~could be up to two times the amount of water removed from the ~~river.~~Pecos River. Repayment is customarily made in-kind over a period of time but can take other forms including cash repayment. If the adjudication court's initial findings of fact and conclusions of law do not change and forms the basis of the adjudication court's order, the required volume and timing of repayment is unknown at this time. If we are not able to repay in-kind due to the lack of remaining water rights or logistical constraints, we ~~would~~may need to purchase water to meet this repayment or be subject to a cash repayment. We cannot reasonably estimate the potential volume, timing, or form of repayment, if any, and have not recorded a loss contingency in our statement of operations related to this legal matter.

In March 2021, we received notice from a customer of a default under the terms of a long-term sales contract because we have ~~not~~ been ~~able~~unable to deliver water to diversion points specified in the contract. We have relied primarily upon our Pecos River water rights to deliver water under this contract, the majority of which are currently unavailable due to the

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factors discussed above. ~~We are continuing to work with the customer to resolve this issue.~~ Under this contract we ~~have~~had previously received quarterly installments of approximately $3.9 million for the future delivery of water to the customer. In April 2021, we agreed to suspend the second quarter 2021 and future quarterly installments due from the customer as we continue to work to resolve the issue. IfIn December 2021, we amended our long-term sales agreement with the customer due to our inability to deliver water. Under the amendment, we agreed to suspend all rights and obligations of both parties under the agreement until July 1, 2022. During the suspension period, we have no obligation to deliver water and our customer has no obligation to take water, if available, or make quarterly payments to us. After the suspension period, our customer has the right to terminate the agreement for any reason with thirty days written notice at which time we would be required to repay any outstanding balance for undelivered water. Although we are ~~not able~~continuing to work with the customer to resolve ~~the~~this issue, we ~~may have~~believe it is likely we will need to repay the ~~$32.5~~$32.6 million outstanding contract liability we have with this customer as of ~~September~~June 30, ~~2021.~~2022. See Note 11—Revenue above for additional information.

In August 2021, NGL Energy Partners (NGL), our partner in ~~the~~a Joint Marketing Agreement (“JMA”) ~~that was entered into in May 2019,~~ filed suit against us alleging, amongst other items, we overcharged the JMA for various operating costs and that we used third party water to service certain fracs when JMA water should have been used in those fracs. ~~NGL is seeking to immediately terminate~~On June 22, 2022, the parties entered into a settlement agreement and the lawsuit was dismissed with prejudice on June 29, 2022. The settlement agreement did not have a material impact on our results of operations and the JMA ~~as well as compensatory damages. We are vigorously defending against the lawsuit. Because this matter is at an early stage, we are unable to reasonably estimate the potential amount of loss, if any.~~was terminated.

Note 15 — FAIR VALUE

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We measure our financial assets and liabilities in accordance with ASC Topic 820, Fair Value Measurements and Disclosures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation at the measurement date:

AsLevel 1 - Quoted market prices in active markets for identical assets or liabilities.

Level 2 - Inputs, other than Level 1, that are either directly or indirectly observable.

Level 3 - Unobservable inputs developed using estimates and assumptions which reflect those that market participants would use.

The classification of ~~September 30, 2021, and December 31, 2020, our cash consisted~~fair value measurement within the hierarchy is based upon the lowest level of ~~bank deposits.~~input that is significant to the measurement.

Other financial ~~assets and liabilities including~~instruments consist primarily of cash equivalents, accounts receivable, refundable income taxes, accounts payable, accrued liabilities, and, if any, advances under our credit ~~facility, and are carried at~~facility. With the exception of investment securities, we believe cost ~~which~~ approximates fair value for our financial instruments because of the short-term ~~nature~~natures of these instruments.

~~In May~~Cash Equivalents—As of ~~2020,~~June 30, 2022, and December 31, 2021, we ~~acquired~~had cash equivalents of $1.6 million and zero, respectively.

Held-to-Maturity Investments—As of June 30, 2022, we owned debt investment securities classified as held-to-maturity because we have the intent and ability to hold these investments to maturity. These debt securities are carried at amortized cost and consist of the following (amounts in thousands):


	As of June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Short-term
Corporate bonds	$	4,010	$	—	$	(7)	$	4,003
Government bonds	1,970		2		—		1,972
Total	$	5,980	$	2	$	(7)	$	5,975
Long-term
Corporate bonds	$	485	$	—	$	(1)	$	484
Government bonds	1,909		7		—		1,916
Total	$	2,394	$	7	$	(1)	$	2,400

Our long-term held to maturity investments are recorded in "Other assets, net" on the Consolidated Balance Sheets. As of December 31, 2021, we had no held-to-maturity debt investment securities. Our long-term held-to-maturity investments mature in less than 2 years.

Equity Investments without a Readily Determinable Fair Value—As of June 30, 2022, and December 31, 2021, we had a $3.5 million non-controlling ~~interest~~equity investment in W.D. Von Gonten Laboratories ("WDVGL") ~~for $3.5 million.~~. This investment is an equity investment without a readily determinable fair value and is recorded at cost with adjustments for observable changes in prices resulting from orderly transactions for the identical or a similar investment of the same issuer, or impairment (a Level 3 input), and is included in "Other assets, net" on the Condensed Consolidated Balance Sheets. We did not record any adjustments to the ~~$3.5 million~~ carrying value of the investment during the ~~first nine~~six months ended June 30, 2022, or the twelve months ended December 31, 2021.

We have committed to invest $4.0 million as a limited partner in PEP Ovation, LP ("Ovation"). Ovation invests in working interests of ~~2021.~~

oil and gas wells, located primarily in the Permian Basin. As of June 30, 2022, and December 31, ~~2020, the estimated~~2021, we had invested $3.5 million and $1.1 million, respectively, in Ovation. This investment is an equity investment without a readily determinable fair value and is recorded at cost with adjustments for observable changes in prices resulting from orderly transactions for the identical or a similar investment of ~~our outstanding Series B Senior Notes was $15 million. The fair~~the same issuer, or impairment (a Level 3 input), and is included in "Other assets, net" on the Condensed Consolidated Balance Sheets. We did not record any adjustments to the carrying value of ~~our Notes was estimated using a discounted cash flow analysis based on current borrowing rates for debt with similar remaining maturities and ratings (a Level 2 input) and is designed to approximate~~ the ~~amount at which~~investment during the ~~instruments could be exchanged in an arm's-length transaction between knowledgeable willing parties. In~~six months ended June ~~2021, we repaid~~30, 2022, or the ~~remaining $15.0 million of principal outstanding under the Series B Senior Notes.~~

twelve months ended December 31, 2021.

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Note 16 — BUSINESS SEGMENTS

Our operations are organized into 3 segments: potash, Trio® and oilfield solutions. The reportable segments are determined by management based on several factors including the types of products and services sold, production processes, markets served and the financial information available for our chief operating decision maker. We evaluate performance based on the gross margins of the respective business segments and do not allocate corporate selling and administrative expenses, among others, to the respective segments. Intersegment sales prices are market-based and are eliminated in the "Other" column. Information for each segment is provided in the tables that follow (in thousands).


Three Months Ended September 30, 2021		Potash		Trio®		Oilfield Solutions		Other		Consolidated
Three Months Ended June 30, 2022												Three Months Ended June 30, 2022	Potash		Trio®		Oilfield Solutions		Other		Consolidated
Sales	Sales	$	31,673	$	20,827	$	6,708	$	(55)	$	59,153	Sales	$	48,827	$	35,467	$	7,512	$	(66)	$	91,740
Less: Freight costs	Less: Freight costs	3,928		4,038		—		(55)		7,911		Less: Freight costs	3,682		5,611		—		(66)		9,227
Warehousing and handling costs	Warehousing and handling costs	1,241		825		—		—		2,066		Warehousing and handling costs	1,209		995		—		—		2,204
Cost of goods sold	Cost of goods sold	18,385		10,528		6,061		—		34,974		Cost of goods sold	19,011		15,809		3,678		—		38,498

Costs associated with abnormal production		3,594		—		0		—		3,594

Gross Margin	Gross Margin	$	4,525	$	5,436	$	647	$	—	$	10,608	Gross Margin	$	24,925	$	13,052	$	3,834	$	—	$	41,811
Depreciation, depletion, and amortization incurred1	Depreciation, depletion, and amortization incurred1	$	6,257	$	1,321	$	818	$	114	$	8,510	Depreciation, depletion, and amortization incurred1	$	6,085	$	1,042	$	803	$	176	$	8,106

Nine Months Ended September 30, 2021		Potash		Trio®		Oilfield Solutions		Other		Consolidated
Six Months Ended June 30, 2022												Six Months Ended June 30, 2022	Potash		Trio®		Oilfield Solutions		Other		Consolidated
Sales	Sales	$	112,944	$	71,444	$	14,293	$	(177)	$	198,504	Sales	$	105,269	$	76,519	$	14,512	$	(161)	$	196,139
Less: Freight costs	Less: Freight costs	13,766		16,515		—		(177)		30,104		Less: Freight costs	7,705		11,920		—		(161)		19,464
Warehousing and handling costs	Warehousing and handling costs	4,004		3,072		—		—		7,076		Warehousing and handling costs	2,533		2,147		—		—		4,680
Cost of goods sold	Cost of goods sold	68,251		43,329		12,235		—		123,815		Cost of goods sold	41,041		33,261		8,706		—		83,008

Costs associated with abnormal production		3,594		—		—		—		3,594

Gross Margin	Gross Margin	$	23,329	$	8,528	$	2,058	$	—	$	33,915	Gross Margin	$	53,990	$	29,191	$	5,806	$	—	$	88,987
Depreciation, depletion, and amortization incurred1	Depreciation, depletion, and amortization incurred1	$	19,895	$	4,204	$	2,206	$	445	$	26,750	Depreciation, depletion, and amortization incurred1	$	13,033	$	2,050	$	1,590	$	411	$	17,084

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Three Months Ended September 30, 2020		Potash		Trio®		Oilfield Solutions		Other		Consolidated

Three Months Ended June 30, 2021												Three Months Ended June 30, 2021	Potash		Trio®		Oilfield Solutions		Other		Consolidated
Sales	Sales	$	22,187	$	12,890	$	3,050	$	(49)	$	38,078	Sales	$	37,693	$	26,924	$	3,331	$	(60)	$	67,888
Less: Freight costs	Less: Freight costs	3,973		3,878		—		(49)		7,802		Less: Freight costs	4,138		6,037		—		(60)		10,115
Warehousing and handling costs	Warehousing and handling costs	1,173		1,142		—		—		2,315		Warehousing and handling costs	1,306		1,072		—		—		2,378
Cost of goods sold	Cost of goods sold	14,928		8,754		3,363		—		27,045		Cost of goods sold	22,118		16,653		2,425		—		41,196
Lower of cost or net realizable value inventory adjustments		760		464		—		—		1,224

Gross Margin (Deficit)		$	1,353	$	(1,348)	$	(313)	$	—	$	(308)

Gross Margin												Gross Margin	$	10,131	$	3,162	$	906	$	—	$	14,199
Depreciation, depletion, and amortization incurred1	Depreciation, depletion, and amortization incurred1	$	6,430	$	1,531	$	657	$	210	$	8,828	Depreciation, depletion, and amortization incurred1	$	6,460	$	1,376	$	700	$	143	$	8,679

Nine Months Ended September 30, 2020		Potash		Trio®		Oilfield Solutions		Other		Consolidated
Six Months Ended June 30, 2021												Six Months Ended June 30, 2021	Potash		Trio®		Oilfield Solutions		Other		Consolidated
Sales	Sales	$	80,504	$	54,722	$	13,539	$	(253)	$	148,512	Sales	$	81,270	$	50,619	$	7,584	$	(122)	$	139,351
Less: Freight costs	Less: Freight costs	12,700		15,950		—		(253)		28,397		Less: Freight costs	9,838		12,477		—		(122)		22,193
Warehousing and handling costs	Warehousing and handling costs	3,673		3,611		—		—		7,284		Warehousing and handling costs	2,762		2,248		—		—		5,010
Cost of goods sold	Cost of goods sold	55,298		40,405		8,397		—		104,100		Cost of goods sold	49,867		32,801		6,173		—		88,841
Lower of cost or net realizable value inventory adjustments		1,130		2,885		—		—		4,015

Gross Margin (Deficit)		$	7,703	$	(8,129)	$	5,142	$	—	$	4,716

Gross Margin												Gross Margin	$	18,803	$	3,093	$	1,411	$	—	$	23,307
Depreciation, depletion and amortization incurred1	Depreciation, depletion and amortization incurred1	$	19,485	$	4,556	$	1,945	$	632	$	26,618	Depreciation, depletion and amortization incurred1	$	13,637	$	2,883	$	1,388	$	332	$	18,240

1 Depreciation, depletion, and amortization incurred for potash and Trio® excludes depreciation, depletion and amortization amounts absorbed in or relieved from inventory.

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ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (this "Quarterly Report") contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Securities Act of 1933, as amended. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in this Quarterly Report other than statements of historical fact are forward-looking statements. Forward-looking statements include statements about, among other things, our future results of operations and financial position, our business strategy and plans, our ESG (as defined below) initiatives and our objectives for future operations. In some cases, you can identify these statements by forward-looking words, such as "estimate," "expect," "anticipate," "project," "plan," "intend," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict," and "continue." Forward-looking statements are only predictions based on our current knowledge, expectations, and projections about future events.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including the following:

•changes in the price, demand, or supply of our products and services;

•challenges and legal proceedings related to our water rights;

•our ability to successfully identify and implement any opportunities to grow our business whether through expanded sales of water, Trio®, byproducts, and other non-potassium related products or other revenue diversification activities;

•the costs of, and our ability to successfully execute, any strategic projects;

•declines or changes in agricultural production or fertilizer application rates;

•declines in the use of potassium-related products or water by oil and gas companies in their drilling operations;

•our ability to prevail in outstanding legal proceedings against us;

•our ability to comply with the terms of our revolving credit facility, including the underlying covenants, to avoid a default under that agreement;

•further write-downs of the carrying value of assets, including inventories;

•circumstances that disrupt or limit production, including operational difficulties or variances, geological or geotechnical variances, equipment failures, environmental hazards, and other unexpected events or problems;

•changes in reserve estimates;

•currency fluctuations;

•adverse changes in economic conditions or credit markets;

•the impact of governmental regulations, including environmental and mining regulations, the enforcement of those regulations, and governmental policy changes;

•adverse weather events, including events affecting precipitation and evaporation rates at our solar solution mines;

•increased labor costs or difficulties in hiring and retaining qualified employees and contractors, including workers with mining, mineral processing, or construction expertise;

•changes in the prices of raw materials, including chemicals, natural gas, and power;

•our ability to obtain and maintain any necessary governmental permits or leases relating to current or future operations;

•interruptions in rail or truck transportation services, or fluctuations in the costs of these services;

•our inability to fund necessary capital investments;

•the impact of the COVID-19 pandemic on our business, operations, liquidity, financial condition and results of operations; and

•the other risks, uncertainties, and assumptions described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, as updated by our subsequent Quarterly Reports on Form 10-Q.

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In addition, new risks emerge from time to time. It is not possible for our management to predict all risks that may cause actual results to differ materially from those contained in any forward-looking statements we may make.

In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in these forward-looking statements. As a result, you should not place undue reliance on these forward-looking statements. We undertake no ~~duty~~obligation to update or revise publicly any forward-looking statements to conform those statements to actual results or to reflect new information or future events.

Throughout this Quarterly Report, we refer to average net realized sales price per ton, which is a non-GAAP financial measure. More information about this measure, including a reconciliation of this measure to the most directly comparable GAAP financial measure, is below under the heading "Non-GAAP Financial Measure."

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Company Overview

We are a diversified mineral company that delivers potassium, magnesium, sulfur, salt, and water products essential for customer success in agriculture, animal feed and the oil and gas industry. We are the only U.S. producer of muriate of potash (sometimes referred to as potassium chloride, KCl or potash), which is applied as an essential nutrient for healthy crop development, utilized in several industrial applications, and used as an ingredient in animal feed. In addition, we produce a specialty fertilizer, Trio®, which delivers three key nutrients, potassium, magnesium, and sulfate, in a single particle. We also provide water, magnesium chloride, brine and various oilfield products and services.

Our extraction and production operations are conducted entirely in the continental United States. We produce potash from three solution mining facilities: our HB solution mine in Carlsbad, New Mexico, our solution mine in Moab, Utah, and our brine recovery mine in Wendover, Utah. We also operate our North compaction facility in Carlsbad, New Mexico, which compacts and granulates product from the HB mine. We produce Trio® from our conventional underground East mine in Carlsbad, New Mexico. Until mid-2016, we also produced potash from our East and West mines in Carlsbad, New Mexico.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico ~~to support our mining and industrial operations. Water~~under which we ~~do not use to support our mining and industrial operations we~~ sell water primarily to support oil and gas development in the Permian Basin near our Carlsbad facilities. We continue to work to expand our sales of water. In May 2019, we acquired certain land, water rights, state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company. We refer to these assets and operations as "Intrepid South." Due to the strategic location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including restricted use agreements of surface or subsurface rights to customers, where such sales provide a solution to ~~such~~a customer's operations in the oil and gas industry.

We have three segments: potash, Trio®, and oilfield solutions. We account for the sale of byproducts as revenue in the potash or Trio® segment based on which segment generated the byproduct.

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~~ENVIRONMENTAL, SOCIAL, AND GOVERNANCE~~Environmental, Social, and Governance

We are committed to a goal of providing consistent returns to our shareholders while maintaining a strong sense of good corporate citizenship that places a high value on the welfare of our employees, the communities in which we operate, the customers we serve, and the world as a whole. We believe that prioritizing, improving, and managing our Environmental, Social, and Governance (“ESG”) goals will allow us to better create long-term value for our investors. We have made our ESG program a key initiative for our management team and we are committed to develop a plan tothat will provide focused reporting on ~~those~~ ESG issues that we believe are the most relevant to our business and that are the most important to our stakeholders. We understand that clearly disclosing the goals and metrics related to our ESG programs will allow our stakeholders to be informed about our progress and we look forward to expanding our ESG disclosures in future periods. A summary of our ESG goals under the United Nations Sustainable Development Goals framework is available on our website at intrepidpotash.com. An update on recent ESG highlights and initiatives is shown below.

Commitment to the Environment

We rely on the environments, resources and ecosystems surrounding our locations in all segments of our business. We work closely with our communities and make it a priority to protect the natural resources surrounding our operations.

–Full-Cycle Water Management - We are actively developing water treatment and recycling operations in the Delaware Basin. Recycled water will ~~help reduce the produced water traditionally used in oil and gas operations and~~ reduce the amount of produced water that is injected into produced water disposal wells.

–Solar solution mining potash - All of our potash is currently produced at solar solution mines, one of the most environmentally friendly and energy efficient mining techniques. We inject a naturally occurring, salt saturated brine solution into underground caverns or previously shuttered mine workings. This brine selectively dissolves the remaining potash, which is then pumped back to the surface and into evaporation ponds. During the spring and summer months, the brine naturally evaporates, leaving only the salt and potash solids in the ponds, which we then process into the products we sell. By using solar energy, we do not need to burn natural gas or coal to evaporate our brine ponds.

–Salt laydown at the Bonneville Salt Flats - We are committed to helping maintain the environments in which we operate, one of which is the Bonneville Salt Flats near our Wendover, UTUtah mine. Since 2005, we have donated free of cost to the ~~BLM~~Bureau of Land Management ("BLM") nearly 7 million tons of salt that has been deposited on the racetrack to help preserve this unique attraction in northwest Utah. We drilled an additional brackish well in 2021 to increase the brine available for the salt laydown project.

–We are the only OMRI-listed muriate of potash and langbeinite producer in the United States. We became OMRI-listed in 2007 for our langbeinite, or Trio®, product, and in 2018 for our potash products at our Moab and Wendover operating facilities. We are also registered in the Organic Input Material Program through the California Department of Food and Agriculture, a program which registers fertilizers that can be used in organic crop and food production.

–We work closely with the ~~Bureau of Land Management~~BLM and other government and regulatory agencies to preserve historical sites near our operations such as the Maroon Cliffs in Carlsbad, New Mexico and petroglyphs near our Utah operations. We also work with and have supported agencies dedicated to studying and protecting endangered species near our operations such as the sand dune lizards in New Mexico.

Our Social Impact and Supporting our Communities

Our employees live and work in small, tight-knit communities and we are deeply involved in volunteering and being active community members.

Our New Mexico operations have partnered with the United Way of Carlsbad and South Eddy County since 2004, participating in a variety of community-focused events and activities such as United Way's annual Day of Caring event. We encourage all our employees to volunteer in their communities and we offer all our full-time employees three paid volunteer days each year to support either a charitable organization of their choosing or participate in an Intrepid sponsored volunteer project.

We recently partnered with the Dead Horse Point State Park which overlooks our Moab, Utah facility to update information regarding our facilities and how we utilize the natural environment and climate in Moab to produce potash. In previous years, we proudly funded the construction of numerous bike trails in the park, known as the Intrepid Trail System.

Our Commitment to a Diverse Workforce

We are committed to ~~a recruitment~~recruiting and hiring ~~process~~processes that ~~emphasizes~~encourage and ~~embraces~~embrace diversity. We believe a diverse workforce leads to greater collaboration, innovation, and improves shareholder ~~returns and we~~returns. We celebrate the ~~great value the~~diversity and differences in our ~~people bring to our organization.~~employees. We support a variety of organizations within our communities including the

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Women's Leadership Foundation, a Colorado based organization with the goal of opening more board of director positions to women leaders in Colorado and beyond.

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Our Commitment to Safety

Safety audits are conducted across all our locations to ensure a thoughtful approach can be taken that increases the safe execution of all tasks. Through our audits and dialogue, we educate ourselves and understand the potential hazards present, create best practices that can be shared, and address areas where improvements can be made. Prior to each task, employees are required to: assemble the proper personal protection equipment, tools, permits, etc., ensure the area is safe for employees and contractors, discuss the task with all stakeholders, and understand how the task is related to the overall business.

We conduct safety audits of our operations on a monthly basis. The data from these safety audits is collected to analyze where, what, and why gaps exist, and to provide meaningful information that results in safer work for our employees.

In August 2021, our East Mine ~~operation~~ in Carlsbad, New Mexico received the National 2020 Sentinels of Safety Award in the large underground nonmetal category. The Sentinels of Safety Award is presented by the National Mining Association each year to recognize the outstanding safety achievements of mining operations across a variety of categories. Our East Mine was also awarded the Rocky Mountain Mining Institute's 2022 Safety Award for Large Underground Mines, an award given for the outstanding safety performance at the mine during 2021.

Business Ethics

Since inception, Intrepid has placed the highest emphasis on conducting its business with honesty and integrity. These standards are expected of management and employees alike, and we continuously strive to create a corporate culture of honesty, integrity, and trust.

The policies we have developed are intended to:

–Maintain and communicate our core value of integrity and disseminate our core values and the legal requirements applicable to good business conduct and ethical behavior.

–~~Annual~~Provide annual refresher training on company policies, values, interpreting laws, and handling a variety of potential company-related issues and situations.

–~~Resources~~Provide resources for employees to report any suspected violations of our company policies, including an anonymous employee hotline via phone and internet.

–Provide clear and well-defined procedures by which employees can easily obtain information, ask questions, and, if necessary, report any suspected violations of any of our Business Ethics policies.

–Maintain and communicate a Code of Business Conduct and Ethics which clearly articulates the company’s values, culture, and practices.

~~COVID-19 Response~~

We took quick and decisive action in early 2020 to limit the impacts of COVID-19 on our employees and operations. We instituted a work-from-home policy for employees when possible, providing additional resources to ensure our employees could be successful and supported in their new work environment. When work-from-home was not possible, we implemented strict social distancing measures at our operation facilities along with staggered schedules where possible.

~~Other actions included:~~

–~~Consistent review of staffing to ensure meeting state and federal guidelines~~

–~~Provided additional resources to employees for their continued physical, mental, and financial well-being~~

–~~Implemented strict visitor restrictions at our sites and limited corporate travel~~

–~~Additional cleaning protocols at all our sites~~

–~~Held on-site vaccination clinics at no cost to our employees~~

As vaccinations become readily available across the country we have begun to relax certain restrictions on our social distancing and work-from-home policies for vaccinated employees. We will continue to monitor state and federal guidelines and recommendations, issued by the Centers for Disease Control, World Health Organization and local governments and will revise our company policies accordingly.

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Significant Business Trends and Activities

~~As an essential business we continue to operate through-out the COVID-19 pandemic to produce potash and Trio~~® and serve oil and gas markets through our oilfield solutions business. The safety and protection of our workforce is our first and foremost priority. We continue to follow various procedures we implemented to help minimize the risks to our employees, including changes in our operating procedures to accommodate social distancing guidelines, additional cleaning and disinfection procedures and requiring those employees who can work from home to do so.

We continue to monitor the guidance from various authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations. There may be developments outside our control that would require us to adjust our operating plans.

Our 2020 results were materially impacted by the COVID-19 pandemic, particularly our oilfield solutions segment as many of the actions taken to help prevent the spread of COVID-19 decreased demand for oil. Economic activity has improved in 2021 with most cities and states reducing restrictions when compared to the summer of 2020. Given the dynamic nature of the COVID-19 pandemic, we cannot reasonably estimate the impacts of COVID-19, if any, on our financial condition, results of operations, liquidity or cash flows in the future. We expect that if governmental authorities increase other restrictive orders, such actions may have a material effect on revenue growth, financial condition, liquidity, and overall profitability in future reporting periods. In addition to restrictive orders, we are monitoring the potential of a vaccine mandate on private employers. Recent announcements by the Biden administration have suggested private employers with over 100 employees may be forced to require vaccinations for most employees, implement weekly testing for unvaccinated employees, or be subject to substantial fines. While we encourage all our employees to be vaccinated, we believe our vaccination rates approximate those of the counties in and around our various operations and a portion of our employees remain unvaccinated. At this time there are no guidelines for when or how a vaccine mandate or weekly testing would be implemented and we are unable to determine the effect, if any, on our operations. If we were unable to implement weekly testing of unvaccinated employees and are forced to require vaccinations, there could be a material negative effect on our operations and results such as increased overtime and hiring expenses, reduced shifts, or temporary shutdowns of our operating facilities.

Our financial results have been, or are expected to be, impacted by several significant trends and activities, ~~including impacts from the COVID-19 pandemic, as discussed~~which are described below. We expect that the trends described below may continue to impact our results of operations, cash flows, and financial position.

• Potash pricing and demand. ~~Sales volume increased 13% in first nine months~~Strong demand for potash continued into the second quarter of ~~2021 when compared to the prior year period. Fertilizer demand remains strong across the country~~2022 as higher commodity prices ~~support robust~~supported good application rates in most of our markets. ~~Our sales volumes into industrial markets continued to improve in the third quarter of 2021 compared~~Compared to the prior year, we saw minimal buying in the latter part of the second quarter as ~~oilfield activity continues~~buyers remain reluctant to ~~recover from COVID-19 related impacts. The majority~~hold inventory for future application at current price levels. Sales volume decreased 39% in both the second quarter and first half of ~~our industrial potash sales are into oil and gas markets and correlate~~2022, when compared to ~~drilling and completion activity, which slowed significantly during 2020~~the same prior year periods, due to the ~~containment actions taken~~minimal restock combined with reduced inventory levels across our facilities to ~~help reduce~~begin the ~~spread of COVID-19,~~year and ~~activity remains below pre-pandemic levels.~~less spring production due to a lower than average 2021 summer evaporation season.

Our potash average net realized sales price per ton increased to $738 for the three months ended June 30, 2022, compared to $319 for the same period in 2021, as multiple price increases announced over the last year continued to improve our realized pricing. We ~~have been successful in shifting sales towards~~expect current commodity prices and good farmer economics will continue to support application rates across our ~~growing animal feed and organic~~ markets and ~~also continuing~~we believe most customers see good value in potash in today's market. Inventory carryover after a compressed spring season and increased credit exposure due to ~~expand our~~current price levels has resulted in a slow start to third quarter sales, ~~into high-margin agricultural areas near our operations. Additional or renewed restrictions enacted~~although we expect demand will improve as harvest progresses. Sanctions on Belarusian potash are significantly limiting export opportunities for Belarusian product and we believe production rates in ~~response to~~Belarus will remain well-below normal rates for the ~~COVID-19 pandemic may impact our sales if such actions affect available labor, transportation logistics, or cause supply disruptions.~~

~~Global effective~~foreseeable future. In addition, the timeline for production capacity ~~continues to exceed demand and larger~~increases previously announced by Russian potash producers is becoming more uncertain. Canadian producers have ~~worked~~responded to ~~balance~~these production decreases with incremental production ramp-ups, but there are limited near-term supply increases available to replace the ~~market through production curtailments. Domestic~~tons we believe are currently offline and we expect global supply will be significantly below normal levels in 2022 and likely longer.

As a small producer, domestic pricing of our potash is influenced principally by the price established by our competitors. The interaction of global potash supply and demand, ocean, land, and barge freight rates, currency fluctuations, and crop commodity values and outlook, also influence pricing. ~~With potash sales comprising 49% of our total sales in the first nine months of 2021, potash prices continue to be a significant driver of our profitability.~~

Our potash average net realized sales price per ton increased to $381 for the three months ended September 30, 2021, compared to $238 for the same period in 2020 as price increases announced in recent quarters continued to improve our realized pricing compared to the prior year. We announced further potash price increases in August 2021, increasing agricultural pricing $80 per ton. After the price increase, we took orders for historical volumes for fourth quarter delivery. Potash price continued to increase during the third quarter as the market remains extremely tight due to limited supply and strong demand. Our price expectations could be affected by, among other things, weather, planting decisions, rail car availability, commodity price decreases ~~as a result of the COVID-19 pandemic,~~ and the price and availability of other potassium products.

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We experience seasonality in potash demand, with more purchases historically occurring in March through May and September through November when purchasers are looking to have product on hand for the spring and fall application seasons in the United States. Various factors affect potash sales and shipments, thereby increasing volatility of sales volumes from quarter to quarter and season to season. The specific timing of when farmers apply potash remains highly weather dependent and varies across the numerous growing regions within the U.S. The timing of potash sales is also significantly influenced by the marketing programs of potash producers, as well as storage volumes closer to the farm gate. Our sales volumes into the industrial market correlate to drilling activity in the oil and gas ~~market, which slowed significantly during 2020, due to the containment actions taken to help reduce the spread~~market. While most COVID-19 related restrictions have been lifted, reinstatement of ~~COVID-19. While~~such restrictions ~~continued to lessen during 2021, any further containment actions taken in response to the COVID-19 pandemic~~ may impact future fertilizer application seasons if such actions affect available labor, transportation logistics, or cause supply disruptions.

• ~~Potash production.~~ We experienced significant rain at our HB Solar Solution during 2021 evaporative season leading to reduced extraction rates, potash grade, and overall potash production in our pond system. As a result of the increased precipitation and reduced evaporation, we have significantly fewer tons available in our ponds. We expect to produce approximately 70,000 tons at our HB facility during our current harvest period, which is expected to end in mid-January. As a result, we recorded an abnormal production cost adjustment of $3.6 million in the third quarter and if we continue to have above average precipitation we may have abnormal production cost adjustments in future periods. In response to the reduced production, we plan to restart production in mid-March and continue through May capture to meet historical demand during the spring season.

• Trio® pricing and demand. ~~Our~~Second quarter 2022 Trio®average net realized sales price per ton increased 78% and 38% during the third quarter and first nine months of 2021, respectively, as compared to the same periods of 2020. Similar to our potash sales, our results ~~in both periods~~ benefited from the multiple price increases announced in recent ~~quarters. We increased our Trio~~® ~~price~~quarters, resulting in second quarter 2022 average net realized pricing of $493 per ton ~~by $50~~compared to $271 per ton in ~~August 2021 in response to~~ the ~~increased potash spot price as discussed above. We had minimal volumes committed prior to the price increase and expect the majority~~same period of this price increase will be realized in our fourth quarter results. Our ability to recognize the increased prices may be affected by, among other things, weather, planting decisions, rail car availability, commodity price decreases as a result of the COVID-19 pandemic, and the price and availability of other potassium products.

2021. Trio® sales volume ~~increased 15% and 6%~~ in the ~~third~~second quarter ~~and first nine months~~ of ~~2021, respectively, when~~2022 decreased 21% compared to the prior year ~~periods. Higher commodity pricing led~~period as higher prices limited restock late in the second quarter with most buyers positioning themselves to ~~strong demand in our domestic markets during~~hold minimal carryover inventory after the ~~first nine months of 2021 which more than offset reduced international sales. We expect to remain very selective in international markets as we focus on growing our domestic Trio~~® ~~sales.~~spring season.

We also experience seasonality in domestic Trio® demand, with more purchases coming in the first and second quarters in advance of the spring application season in the U.S. In turn, we generally have increased inventory levels in the third and fourth quarters in anticipation of expected demand for the following year. Further actions taken in response to the COVID-19 pandemic may also impact seasonal demand patterns if there is an effect on available labor, transportation logistics, or supply disruptions. We ~~added extra production days at our East mine beginning in September to respond to strong demand and expect we will~~ continue to operate an extra ~~shift utilizing contract labor. This added shift is expected~~underground shifts to ~~add another 50,000 tons~~increase our availability of ~~production over the next 12 months,~~Trio® in response to continued good demand and ~~we have the potential to add up to another 50,000 tons depending on market conditions.~~a favorable outlook.

• Water sales. In the ~~third~~second quarter of ~~2021,~~2022, total water sales were ~~$6.0~~$4.8 million compared to ~~$3.6~~$2.8 million during the same period of ~~2020. Oilfield activity is increasing in the areas we operate and we expect water sales will continue to improve in the coming quarters.~~2021. Rig counts, oil pricing, and oilfield activity ~~have increased from the summer of 2020~~continue to support drilling and ~~we expect oilfield~~completion activity ~~will improve as the year continues,~~near our operations, although economic uncertainty, the conflict in Ukraine, and the potential for future restrictions enacted by state and local governments resulting from the COVID-19 pandemic make forecasting future ~~drilling~~oilfield activities difficult.

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See Note 14 of our unaudited condensed consolidated financial statements included in "Item 1. Condensed Consolidated Financial Statements (Unaudited)" of this Quarterly Report on Form 10-Q regarding legal proceedings related to our water rights.

• Byproduct sales. We sell byproducts such as salt, magnesium chloride, brines, and water that are derived from our potash and Trio® operations. Byproduct sales were ~~$6.4~~$5.7 million during the second quarter of 2022, compared to $5.4 million for the three months ended September 30, 2021, compared to $5.1 million for the three months ended September 30, 2020, and $18.8 million for the nine months ended September 30, 2021, compared to $13.8 million for the comparable prior year period. The increase for both the three and nine month periods was driven by an improving economy during 2021 as economic activity continues to recover from COVID-19 related impacts.same period of 2021. Magnesium chlorides sales ~~also increased in both periods due to increased product availability~~decreased compared to the prior ~~year.~~year due to a mild winter and wet weather in early spring, which decreased road dedust sales to begin the quarter. Salt sales increased compared to the prior year period due to growth in the industrial salt market combined with higher realized pricing.

26• Inflation. Heightened levels of inflation have led to increased labor expense and other production costs. We have experienced increased costs for various supplies as suppliers have raised prices in response to inflationary pressures. During the first half of 2022, increases in our selling price per ton of potash and Trio® have outpaced our increased production costs. However, if potash and Trio®pricesremain flat or decline, inflation remains at current levels for an extended period of time, and we are unable to mitigate the impact of inflation, our production costs could increase further resulting in lower margins and net income.

~~Table~~• Weather impact. Evaporation rates in 2021 were below average across our facilities which led to decreased potash production in the second half of ~~Contents~~

~~Wet weather~~2021 and led to decreased potash production in the spring of 2022 when compared to the prior year. We received a significant amount of rainfall at our HB facility in Carlsbad, New Mexico late in the summer of ~~2019 significantly~~2021 which limited the amount of solids available in our ponds. As a result of the reduced potash production, we recorded abnormal production costs of ~~magnesium chloride and we had less product~~$6.0 million in the fiscal year 2021. We expect potash production rates will return to ~~sell~~normal rates in ~~2020.~~the third quarter of 2022, with production beginning in August 2022.

• Diversification of products and services. ~~We continue to diversify our products and services, particularly on our Intrepid South property.~~ In addition to ~~water sales,~~the products discussed above, Intrepid ~~South~~ generates revenue from right-of-way agreements, surface damages and easements, caliche sales, a produced water royalty, and sales of cattle. We are also currently negotiating water transfer agreements with customers throughout the basin to utilize our existing infrastructure.

We announced in the first quarter of 2022 that Intrepid has initiated a joint feasibility study alongside the New Mexico Produced Water Research Consortium ("NMPWRC") and the New Mexico Environment Department ("NMED") to evaluate the potential of using treated produced water from oil and gas operations as injectate for our HB solar solution mine. Intrepid has produced a pilot project scoping document which has been accepted by the NMPWRC. As part of the ~~Intrepid~~pilot project scope we continue to do laboratory work to identify constituents in produced water and the variability we are likely to encounter when sourcing produced water from different operators and formations. We have also engaged a third party to design equipment and processes related to the pilot project. We believe the earliest we would begin a pilot test is the second half of 2023. Further evaluation of produced water constituents and the treatment process necessary to use produced water at our HB solar solution mine may cause us to experience further delays to our schedule and we may decide to discontinue the project altogether.

We have begun the initial development planning for a frac sand opportunity on our strategically located South ~~acquisition, we acquired state grazing leases and submitted a comprehensive grazing plan~~Ranch. This project has the potential to produce over 600k tons per year of frac sand for sale into the Delaware Basin. Total capital investment is estimated at $16 million, which is ~~currently pending approval with~~expected to be split evenly between 2022 and 2023. Our goal is for operations to begin towards the ~~New Mexico State Land Office. In~~end of the ~~third~~first quarter of ~~2020, we purchased a 400-head commercial cattle herd which we plan~~2023.

We continue to ~~move to our grazing leases when we receive final approval.~~

In March 2020, we sold approximately 320 acres of fee land from our Intrepid South property for $4.8 million and recognized a gain on the sale of the land of $4.7 million. The terms of the sale were highly restrictive and only allow the buyer to drill Acid Gas Injection ("AGI") wells on the property to dispose of natural gas with high concentrations of hydrogen sulfide ("H2S"). No water rights were included in the land sale, we retained surface access, and we restricted the use of caliche located on the property to the acreage that was sold in order to prevent sales to third parties or decrease future sales to the buyer. Due to the strategic location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including restricted use agreements of surface or subsurface rights, to customers, where such sales provide a solution to such customer's operations in the oil and gas industry. We may have additional strategic sales of small parcels of land in the future.

In May 2021, we sold 326 acres of land in Texas for $6.0 million and recognized a gain on the sale of the land of $2.8 million. We purchased this land in May 2019 for the development of a produced water disposal facility and had permitted two disposal wells on the property. Unlike the strategic land sale completed in March 2020 discussed above, we did not include any restrictions on the buyer of this land.

In May 2020, we acquired an 11% equity stake in the W.D. Von Gonten Laboratories ("WDVGL"), a global industry leader in drilling and completion chemistry and a strong supporter of the use of potassium chloride in oil and gas drilling and completion activities. With this investment we plan to revitalize our industrial sales and high-speed mixing service given the poor performance of clay-inhibition chemical substitutes in certain formations. Our investment in WDVGL is also part of our strategyreview opportunities to leverage our existing oil and gas midstream businesses in southeast New Mexico and expand into additional oil and gas midstream and upstream activities. This expansion may be through organic growth, other strategic investments, partnerships, or acquisitions of complementary businesses that expand our product and service offerings beyond our existing assets or products. Additionally, we may expand into oil and natural gas exploration and production or into new products or services in our current industry or other industries.

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Consolidated Results


(in thousands, except per ton amounts)	(in thousands, except per ton amounts)	Three Months Ended September 30,				Nine Months Ended September 30,				(in thousands, except per ton amounts)	Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Sales1	Sales1	$	59,153	$	38,078	$	198,504	$	148,512	Sales1	$	91,740	$	67,888	$	196,139	$	139,351

Cost of goods sold	Cost of goods sold	$	34,974	$	27,045	$	123,815	$	104,100	Cost of goods sold	$	38,498	$	41,196	$	83,008	$	88,841

Gross Margin (Deficit)		$	10,608	$	(308)	$	33,915	$	4,716
Gross Margin										Gross Margin	$	41,811	$	14,199	$	88,987	$	23,307

Selling and administrative	Selling and administrative	$	5,890	$	6,750	$	18,293	$	20,022	Selling and administrative	$	7,218	$	6,612	$	14,007	$	12,403

Net Income (Loss)		$	4,023	$	(10,175)	$	25,973	$	(26,444)
Net Income										Net Income	$	23,708	$	19,499	$	55,130	$	21,950

Average net realized sales price per ton2	Average net realized sales price per ton2									Average net realized sales price per ton2
Potash	Potash	$	381	$	238	$	319	$	251	Potash	$	738	$	319	$	713	$	300
Trio®	Trio®	$	336	$	189	$	271	$	197	Trio®	$	493	$	271	$	476	$	251

1Sales include sales of byproducts which were ~~$6.4~~$5.7 million and ~~$5.1~~$5.4 million for the three months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020,~~2021, respectively, and ~~$18.8~~$12.0 million and ~~$13.8~~$12.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020,~~2021, respectively.

2Average net realized sales price per ton is a non-GAAP financial measure. More information about this non-GAAP financial measure is below under the heading "Non-GAAP Financial Measure."

Consolidated Results for the Three Months Ended ~~September~~June 30, ~~2021,~~2022, and ~~2020~~2021

Sales

Our total sales for the ~~three months ended September 30, 2021~~second quarter of 2022 increased ~~$21.1~~$23.9 million, or ~~55%~~35%, as compared to the ~~three months ended September 30, 2020.~~ second quarter of 2021, as potash sales increased $11.0 million, or 34%, Trio® sales increased $8.3 million, or 32%, oilfield solutions segment sales increased $4.2 million, and byproduct sales increased $0.3 million.

Our potash sales increased ~~$8.0~~$11.0 million ~~or 43%, during~~for the ~~three months ended September 30, 2021~~second quarter of 2022, as compared to the ~~three months ended September 30, 2020,~~second quarter of 2021, as our average net realized sales price per ton increased ~~60%~~131%, partially offset by a 6%39% decrease in tons sold. ~~Strong~~Good demand ~~in agricultural markets has~~and tight near-term inventory levels have led to multiple price increases ~~announced~~ since the ~~fourth~~second half of 2021. Our potash sales volumes decreased in the second quarter of ~~2020.~~2022, as compared to the second quarter of 2021, as potash customers have been reluctant to build inventory during the summer months for the fall application season. During the second quarter of 2021, a summer fill program was announced in May 2021, which incentivized customers to take delivery of product beginning late in the second quarter of 2021. A similar summer fill program was not offered by the major potash producers during the second quarter of 2022. Also, we had fewer potash tons to sell during the second quarter of 2022, compared to the second quarter of 2021. Below average evaporation rates across our facilities in 2021 led to decreased potash production during the second half of 2021 and the first half of 2022.

Our Trio® sales increased ~~$8.1~~$8.3 million, or ~~70%~~32%, in the ~~third~~second quarter of ~~2021,~~2022, as compared to the ~~third~~second quarter of ~~2020,~~2021, as our average net realized sales price per ton increased ~~78%~~82%, ~~combined with~~partially offset by a ~~15% increase~~21% decrease in tons sold. Our Trio® average net realized sales price per ton increased due to multiple price increases announced since the ~~fourth quarter~~second half of ~~2020.~~2021. Our Trio®product is primarily applied during the spring application season and similar to potash customers, Trio® ~~tons sold~~customers have been reluctant to build inventory for the spring 2023 application season.

Our oilfield solutions segment sales, which includes sales of water, brine water, surface use and easements, increased $4.2 million, or 126%, in the ~~third~~second quarter of ~~2021,~~2022, as compared to the ~~third~~second quarter of ~~2020, as customers see the relative value of Trio~~® ~~as compared to potash.~~

2021. Our ~~total~~ water sales ~~including byproduct water sales, increased $2.3 million, or 65%,~~recorded in the ~~third~~oilfield solutions segment increased 107% and our sales from surface use and easement agreements increased 198% during the second quarter of ~~2021,~~2022, compared to the ~~third~~second quarter of ~~2020.~~2021. The ~~overall~~ increase in ~~total water~~ sales was ~~due to higher~~driven by increased oil and gas activities near our Intrepid South property as oil prices ~~resulting~~were higher in ~~increased oilfield activities as~~ the ~~economic rebound from~~second quarter of 2022, compared to the ~~COVID-19 pandemic continues.~~second quarter of 2021.

Our total byproduct sales ~~excluding byproduct water sales,~~ increased ~~$1.4~~$0.3 million or ~~39%~~6% in the ~~third~~second quarter of 2022, as compared to the second quarter of 2021, ~~compared to the third quarter of 2020,~~ due to ~~a $0.8~~$0.6 million increase in ~~magnesium chloride~~salt sales, a ~~$0.4~~$0.3 million increase in byproduct ~~salt sales, and a $0.2 million increase in~~ brine water sales, partially offset by a $0.7 million decrease in magnesium chloride sales. Magnesium chloride sales improved as we had more product to sell during the third quarter of 2021, as compared to the third quarter of 2020, as above average evaporation during the summer of 2020 has resulted in more product to sell in 2021. ByproductOur salt sales increased due to an increase in ~~the third quarter of 2021, compared~~sales to the ~~third quarter of 2020, as we sold more~~industrial salt market and our byproduct brine water sales increased due to increased oil and gas ~~customers. Brine water~~ activities. Most of our magnesium chloride

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sales ~~increased~~during the second quarter are used as a dedusting agent. Wet weather in various parts of the ~~third quarter of 2021, compared to the third quarter of 2020, due to the increase~~U.S. in ~~oilfield activities.~~April reduced demand for dedusting products.

Cost of Goods Sold

Our total cost of goods sold ~~increased $7.9~~decreased $2.7 million, or ~~29%~~7%, during the ~~third~~second quarter of ~~2021~~2022, as compared to the ~~third~~second quarter of ~~2020.~~2021. Our potash cost of goods sold ~~increased~~decreased by ~~$3.5~~$3.1 million, or ~~23%~~14%, ~~during the third quarter~~and our Trio® cost of ~~2021 compared to the third quarter~~goods sold decreased $0.8 million, or 5%, partially offset by a $1.3 million increase in our oilfield solutions cost of ~~2020. While we~~goods sold. We sold 6%39% fewer tons of potash in the ~~third~~second quarter of 2022, compared to second quarter of 2021, ~~compared to third quarter of 2020,~~but our weighted average carrying cost per ton ~~was higher~~increased as production costs increased due ~~primarily~~ to ~~the~~inflation, and we produced fewer tons of potash due to below average evaporation ~~at our HB mine. For comparison, we had above average evaporation~~in 2021 across all of our potash ~~facilities, particularly at our HB mine, during the 2020 season.~~facilities. Most of our production costs are fixed and a decrease in tons produced increases our per ton weighted average cost. Our Trio® cost of goods sold ~~increased $1.8~~decreased $0.8 million, or ~~20%~~5%, ~~for~~during the ~~three months ended September 30, 2021~~second quarter of 2022, as compared to the ~~three months ended September 30, 2020,~~second quarter of 2021, due to a ~~15% increase~~21% decrease in Trio® tons ~~sold.~~sold partially offset by an increase in production costs due to inflation. Our cost of goods sold for the Oilfield Solutions ~~Segment~~segment increased ~~$2.7~~$1.3 million, or ~~80%~~52%, ~~for~~during the ~~three months ended September 30, 2021,~~second quarter of 2022, compared to the ~~three~~

~~Table~~second quarter of ~~Contents~~

~~months ended September 30, 2020,~~2021, as we incurred increased ~~third-party~~contract labor and rental costs related to the development of a full-cycle water ~~purchases~~management operation and ~~water transfer costs~~we also incurred increased royalty expense due to increased water ~~sales at Intrepid South.~~

~~Abnormal Production Costs~~

The Carlsbad, New Mexico area where our HB solar solution mining facility is located, received significant rainfall, well above the historical rainfall average during this period. Additionally, humidity was higher than normal and temperatures were cooler than average during this period which reduced our pond production and our ability to extract brine. Because of the wet, humid weather and cooler temperatures, we have fewer harvestable tons of potash from our HB solution ponds. Accordingly, we recorded abnormal production costs of $3.6 million during the three months ended September 30, 2021, and we may incur additional abnormal production costs in future periods. We did not incur any abnormal production costs during the three months ended September 30, 2020.sales.

Gross Margin

During the ~~third~~second quarter of ~~2021,~~2022, we generated gross margin of ~~$10.6~~$41.8 million compared to ~~a negative~~ gross margin of ~~$0.3~~$14.2 million during the ~~third~~second quarter of ~~2020,~~2021, due to the factors discussed above.

Selling and Administrative Expense

During the ~~third~~second quarter of ~~2021,~~2022, selling and administrative expenses ~~decreased 13% as~~increased 9% compared to the third quarter of 2020, driven mainly by a decrease in legal expenses. During the third quarter of 2020, we incurred additional legal expenses in preparation for the trial to determine the validity of our Pecos River water rights that was held in December 2020.

~~Interest Expense~~

~~During the third~~second quarter of 2021, our interest expense decreased $2.4 million as compared to the third quarter of 2020, as we repaid the outstanding balance of our Series B Senior Notes in June 2021, and we repaid the outstanding balance on our credit facility in early August 2021.

~~Net Income~~

We generated net income of $4.0 million for the three months ended September 30, 2021, compared to a net loss of $10.2 million for the three months ended September 30, 2020, due to the factors discussed above.

~~Consolidated Results for the Nine Months Ended September 30, 2021, and 2020~~

Our total sales for the nine months ended September 30, 2021, increased $50.0 million or 34%, as compared to the nine months ended September 30, 2020. Our potash sales during the nine months ended September 30, 2021 increased $27.3 million or 39%, compared to the same period in 2020. Our potash average net realized sales price per ton increased 27% in the first nine months of 2021, compared to the same period in 2021, as good demand and limited supply have driven multiple potash price increases since the fourth quarter of 2020. Our total tons of potash sold increased 13% during the nine-months ended September 30, 2021 as strong commodity prices has created strong demand for potash.

~~Our Trio~~® ~~sales increased $16.9 million or 33% during the first nine months of 2021, compared to the same period in 2020. Our Trio~~® average net realized sales price per ton increased 38% during the first nine months of 2021, compared to the same period in 2020, due to multiple price increases announced since the fourth quarter of 2020. We sold 6% more tons of Trio® ~~in the first nine months of 2021, as strong domestic demand was partially offset by selling fewer tons in the international market.~~

Our water sales, excluding byproduct water sales, decreased $1.2 million, or 11%, in the first nine months of 2021, compared to the same period in 2020. Our water sales declined substantially beginning in April 2020 due to the COVID-19 pandemic and related governmental control measures that were implemented. Oil and gas activities near our facilities in New Mexico have increased, but were still below pre-pandemic levels for most of the first nine months of 2021.

Our sales of other oilfield solution segment offerings, including caliche, brine water, right-of-way agreements, surface damages and easements, increased $1.5 million, or 61% in the first nine months of 2021, compared to the same period in 2020, driven by ~~a $1.0 million~~increases in labor and benefits expense, and an increase in ~~produced water royalties, and a $0.5 million increase in surface use and rights~~lease expenses.

Gain/(Loss) on Sale of way agreements as oil and gas operators have increased fracking activities near our facilities in New Mexico as oil prices have increased during 2021 as the economy rebounds from the COVID-19 pandemic.

Our total byproduct sales increased $5.0 million, or 36%, for the nine months ended September 30, 2021, compared to the first nine months 2020, as our byproduct magnesium chloride sales increased $3.0 million, or 105%, our byproduct water sales increased $0.8 million, or 21%, our byproduct salt sales increased $0.8 million, or 13%, and our byproduct brine water sales increased $0.4 million, or 37%. Our byproduct magnesium chloride sales increased as we had more product to sell during 2021 compared to 2020. Our byproduct water sales and our byproduct brine water sales increased as oil and gas activities

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~~increased in 2021 compared to 2020, particularly during the third quarter of 2021, as oilfield activities have increased as oil prices rise with the economic recovery after the COVID-19 pandemic.~~

~~Cost of Goods Sold~~

Our cost of goods sold increased $19.7 million, or 19%, during the first nine months of 2021 compared to the same period in 2020. Our potash cost of goods sold increased $13.0 million, or 23%, during the first nine months 2021, compared to the same period in 2020, as we sold 13% more tons of potash, but had below average evaporation at our HB mine, which increased our per ton cost of sales. Our Trio® ~~cost of goods sold increased $2.9 million, or 7%, during the first nine months of 2021, compared to the first nine months of 2020, as we sold 6% more tons of Trio~~®.

Our oilfield solutions cost of goods sold increased $3.8 million, or 46% during the first nine months of 2021, compared to the same period in 2020, due to increased third-party water purchases during 2021 to meet the significant daily refresh rates for certain frac jobs on our South ranch and increased water transfer costs due to increased water sales.

~~Abnormal Production Costs~~

A discussed above, we recorded $3.6 million in abnormal production costs during the third quarter of 2021 as wet weather and reduced evaporation rates decreased our production at our HB solar solution facility. We did not incur any abnormal production costs during the nine months ended September 30, 2020.

~~Gross Margin~~Assets

During the ~~first nine months~~second quarter of ~~2021,~~2022, we ~~generated gross margin~~disposed of ~~$33.9 million compared to gross margin~~various assets in the normal course of ~~$4.7 million for~~business and recorded a loss of $1.1 million. In the ~~same period in 2020, driven by a 34% increase in total sales, partially offset by a 19% increase in our total cost~~second quarter of ~~goods sold, as discussed above.~~

~~Gain on Sale of an Asset~~

~~In May~~ 2021, we sold 326 acres of land in Texas for $6.0 million and recognized a gain on the sale of the land of $2.8 million. We purchased this land in May 2019 for the development of a produced water disposal facility and had permitted two disposal wells on the property. ~~Unlike the strategic land sale completed in March 2020 discussed below, we did not include any restrictions~~The gain recorded on the ~~buyer~~sale of ~~this land.~~the land was partially offset by losses of $0.2 million related to the disposal of various other assets during the normal course of business.

Gain on Extinguishment of Debt

In June 2021, we recognized a gain of $10.1 million related to the forgiveness of a $10 million Payroll Protection Program ("PPP") loan and the associated accrued interest on the loan.

Interest Expense

During the second quarter of 2022, our interest expense decreased $0.9 million as compared to the second quarter of 2021, as we repaid the remaining $15.0 million outstanding principal balance on our Series B Senior Notes in June 2021, and we repaid the $10.0 million outstanding balance on our credit facility in early August 2021.

Income Tax Expense

During the second quarter of 2022, we incurred income tax expense of $8.1 million, and we incurred no income tax expense during the second quarter of 2021. As of June 30, 2021, we had a full valuation allowance against our deferred tax assets and any changes in our deferred tax assets were offset by a corresponding change in our valuation allowance. Since we released substantially all of our valuation allowance in the fourth quarter of 2021, changes in our deferred tax assets are no longer fully offset by a change in our valuation allowance.

Net Income

We generated net income of $23.7 million during the second quarter of 2022, compared to net income of $19.5 million for the second quarter of 2021, due to the factors discussed above.

Consolidated Results for the Six Months Ended June 30, 2022, and 2021

Our total sales for the six months ended June 30, 2022, increased $56.8 million, or 41%, as compared to the six months ended June 30, 2021. Our potash sales during the first half of 2022 increased $24.8 million, or 35%, compared to the first half of 2021 as our potash average net realized sales price per ton also increased 138% partially offset by a 39% decrease in tons sold. Our average net realized sales price per ton increased due to multiple price increases announced since second half of 2021. Our potash sales volumes decreased in the first half of 2022, compared to the first half of 2021, as we had fewer potash tons to sell during the first half of 2022. Below average evaporation rates across our facilities in 2021 led to decreased potash

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production during the second half of 2021 and the first half of 2022. Additionally, as discussed above, potash customers have been reluctant to build inventory during the summer months for the fall application season. During the second quarter of 2021, a summer fill program was announced in May 2021, which incentivized customers to take delivery of product beginning late in the second quarter of 2021. A similar summer fill program was not offered by the major potash producers during the second quarter of 2022.

~~In March 2020,~~Our Trio® sales increased $25.4 million or 52% during the first half of 2022, compared to the first half of 2021. Our Trio® average net realized sales price per ton increased 90% during the first half of 2022, compared to the first half of 2021, due to multiple price increases announced since the second half of 2021. We sold 10% fewer tons of Trio® in the first half of 2022, compared to the first half of 2021. As mentioned above, our Trio® product is primarily applied during the spring application season and similar to potash customers, Trio® customers have been reluctant to build inventory for the spring 2023 application season.

Our water sales, excluding byproduct water sales, and our brine water sales, excluding byproduct brine water sales, increased $2.8 million, and $1.0 million, respectively, in the first half of 2022, compared to the first half of 2021. Oil and gas activities increased during the first half of 2022, as oil prices were higher during the first half of 2022, compared to the first half of 2021.

Our sales of other oilfield solution segment offerings, including caliche, right-of-way agreements, surface damages and easements, increased $3.2 million, or 159% in the first half of 2022, compared to the first half of 2021, driven by a $2.3 million increase in surface use and easement revenues, a $0.5 million increase in produced water royalties, and a $0.4 million increase in surface mineral sales, as oilfield activities increased during the first half of 2022, compared to the first half of 2021.

Our total byproduct sales decreased $0.4 million, or 3%, in the first half of 2022, compared to the first half of 2021, as our byproduct magnesium chloride sales decreased $1.9 million, partially offset by a $1.3 million increase in our byproduct salt sales and a $0.4 million increase in our byproduct brine water sales. Our byproduct magnesium chloride product is used as a deicing agent during the winter months and as a dedusting agent during the spring and summer months. Our tons of magnesium chloride decreased due to mild winter weather during the first quarter of 2022, and a wet April in various parts of the U.S which reduced demand for dedusting agents. Our byproduct salt sales increased due to increased sales in the industrial salt market and our byproduct brine water sales increased as oilfield activities increased during the first half of 2022.

Cost of Goods Sold

Our cost of goods sold decreased $5.8 million, or 7%, during the first half of 2022 compared to the first half of 2021. Our potash cost of goods sold decreased $8.8 million, or 18%, during the first half of 2022, compared to the first half of 2021, as we sold ~~approximately 320~~39% fewer tons of potash, but our weighted average carrying cost per ton increased as production costs increased due to inflation and we produced fewer tons of potash due to below average evaporation across all of our potash facilities during 2021. Most of our potash production costs are fixed and a decrease in potash tons produced increases our per ton weighted average cost.

Our Trio® cost of goods sold increased $0.5 million, or 1%, during the first half of 2022, compared to the first half of 2021. While we sold 10% fewer tons of Trio®, our weighted average carrying cost per ton increased as production costs increased due to inflation.

Our oilfield solutions cost of goods sold increased $2.5 million, or 41% during the first half of 2022, compared to the first half of 2021, due mainly to increased royalties related to water sales and we incurred increased contract labor and other costs related to the development of a full-cycle water management operation.

Gross Margin

During the first half of 2022, we generated gross margin of $89.0 million compared to gross margin of $23.3 million for the first half of 2021, driven by a 41% increase in total sales, combined with a 7% decrease in our total cost of goods sold, as discussed above.

Gain/(Loss) on Sale of Assets

In the first half of 2022, we disposed of various assets in the normal course of business and recorded a loss of $1.2 million. In the first half of 2021, we sold 326 acres of ~~fee~~ land ~~from our Intrepid South property~~in Texas for ~~$4.8~~$6.0 million and recognized a gain on the sale of the land of ~~$4.7~~$2.8 million. ~~The terms~~We purchased this land in May 2019 for the development of ~~the sale were highly restrictive~~a produced water disposal facility and ~~only allow the buyer to drill AGI~~had permitted two disposal wells on the ~~property~~property. The gain recorded on the sale of the land was partially offset by losses of $0.2 million related to ~~dispose~~the disposal of ~~natural gas with high concentrations of H~~2~~S. No water rights were included~~various other assets in the ~~land sale, we retained surface access, and we restricted the use~~normal course of caliche located on the property to the acreage that was sold in order to prevent sales to third parties or decrease future sales to the buyer. Our long-term strategic operating plan for Intrepid South includes selling small parcels of land to other companies, where such sales provide a solution to a company's needs. We may have additional strategic sales of small parcels of land in the future.business.

Gain on Extinguishment of Debt

In June 2021, we received notice that the Small Business Administration ("SBA") had remitted funds to our bank to fully repay our $10 million loan we received in April 2020 under the Paycheck Protection Program (the "PPP") under the CARES Act. We elected to record the proceeds received under the PPP loan as debt and apply debt accounting prescribed under Accounting Standards Codification Topic 470. Accordingly, we recognized a gain of $10.1 million related to the forgiveness of the $10 million PPP loan and the associated accrued interest on the ~~loan.~~loan, as mentioned above.

~~Litigation Settlement~~

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~~In March 2020, we reached an agreement with Mosaic to settle ongoing litigation. As part of this matter we paid Mosaic an aggregate of $10 million to dismiss all claims against us in this litigation.~~

Selling and Administrative Expense

During the first ~~nine months~~half of ~~2021,~~2022, selling and administrative expenses ~~decreased 9%~~increased 13% as compared to the ~~same period 2020. We incurred more legal expenses in the~~ first ~~nine months~~half of ~~2020 related to the settlement of ongoing litigation discussed above.~~2021. The increase was driven by increased labor and benefits expense during 2022.

Net Income

We generated net income of ~~$26.0~~$55.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, as compared to a net ~~loss~~income of ~~$26.4~~$22.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, due to the factors discussed above.

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Potash Segment


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per ton amounts)	(in thousands, except per ton amounts)	2021		2020		2021		2020		(in thousands, except per ton amounts)	2022		2021		2022		2021
Sales1	Sales1	$	31,673	$	22,187	$	112,944	$	80,504	Sales1	$	48,827	$	37,693	$	105,269	$	81,270
Less: Freight costs	Less: Freight costs	3,928		3,973		13,766		12,700		Less: Freight costs	3,682		4,138		7,705		9,838
Warehousing and handling costs	Warehousing and handling costs	1,241		1,173		4,004		3,673		Warehousing and handling costs	1,209		1,306		2,533		2,762
Cost of goods sold	Cost of goods sold	18,385		14,928		68,251		55,298		Cost of goods sold	19,011		22,118		41,041		49,867
Lower of cost or net realizable value inventory adjustments		—		760		—		1,130
Costs associated with abnormal production		3,594		—		3,594		—

Gross Margin	Gross Margin	$	4,525	$	1,353	$	23,329	$	7,703	Gross Margin	$	24,925	$	10,131	$	53,990	$	18,803
Depreciation, depletion, and amortization incurred2	Depreciation, depletion, and amortization incurred2	$	6,257	$	6,430	$	19,895	$	19,485	Depreciation, depletion, and amortization incurred2	$	6,085	$	6,460	$	13,033	$	13,637

Potash sales volumes (in tons)	Potash sales volumes (in tons)	62		66		270		239		Potash sales volumes (in tons)	56		92		126		208
Potash production volumes (in tons)	Potash production volumes (in tons)	37		61		201		202		Potash production volumes (in tons)	25		51		128		164

Average potash net realized sales price per ton3	Average potash net realized sales price per ton3	$	381	$	238	$	319	$	251	Average potash net realized sales price per ton3	$	738	$	319	$	713	$	300

1 Sales include sales of byproducts which were ~~$5.1~~$4.9 million and ~~$3.6~~$4.8 million for the three months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020,~~2021, respectively, and ~~$15.7~~$9.8 million and $10.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020,~~2021, respectively.

2 Depreciation, depletion, and amortization incurred excludes depreciation, depletion, and amortization amounts absorbed in or (relieved from) inventory.

3Average net realized per ton sales price per ton is a non-GAAP financial measure. More information about this measure is below under the heading "Non-GAAP Financial Measure."

Three Months Ended ~~September~~June 30, 2022, and 2021

Potash sales recorded in the potash segment increased $11.0 million, or 33%, in the second quarter of 2022, compared to the second quarter of 2021, as our average net realized sales price per ton increased 131%. Strong demand and tight near-term inventory levels have led to multiple price increases since the second half of 2021. We sold fewer tons of potash in the second quarter of 2022, compared to the second quarter of 2021, as we had less potash available to sell. Below average evaporation rates across our facilities in 2021 led to decreased potash production during the second half of 2021, and ~~2020~~the first half of 2022. Additionally, potash customers have been reluctant to build potash inventory during the summer months for the fall application season. During the second quarter of 2021, a summer fill program was announced in May 2021, which incentivized potash customers to take delivery of product beginning late in the second quarter of 2021. A similar summer fill program was not offered by the major potash producers during the second quarter of 2022.

Our potash segment byproduct sales increased $0.1 million, or 3%, in the second quarter of 2022, compared to the second quarter of 2021. The increase in potash segment byproduct sales was driven by a $0.7 million increase in potash segment salt sales and a $0.3 million increase in potash segment brine sales, partially offset by a $0.7 million decrease in magnesium chloride sales, and a $0.2 million decrease in potash segment byproduct water sales. Potash segment byproduct salt sales increased due to an increase in sales to the industrial salt market. Our byproduct magnesium chloride product is used mainly as a dedusting agent during the spring and summer months. Our tons of magnesium chloride sold decreased as wet weather in April 2022 in various parts of the U.S reduced demand for dedusting agents. Water that is used in the production of potash and is then sold to customers is recorded as byproduct revenue in the potash segment, while water sold at Intrepid South is recorded in our oilfield solutions segment.

Potash segment ~~sales~~freight expense decreased 11% in the ~~third~~second quarter of 2022, compared to the second quarter of 2021, ~~increased 43%~~as a result of a 39% decrease in potash tons sold. Our potash freight expense is impacted by the geographic distribution of our potash and byproduct sales and by the proportion of customers arranging for and paying their own freight costs.

Our potash segment cost of goods sold decreased 14% in the second quarter of 2022, compared to the same period in ~~2020,~~2021. While we sold 39% fewer tons of potash in the second quarter of 2022, our weighted average carrying cost per ton was higher due to increased potash production costs caused by inflation and below average evaporation across our facilities in 2021, led to a 51% decrease in potash tons produced during the second quarter of 2022. Most of our potash production costs are fixed and a decrease in potash tons produced increases our per ton weighted average cost.

Our potash segment gross margin increased $14.8 million in the first quarter of 2022, compared to the same period in 2021, due to the factors discussed above.

Six Months Ended June 30, 2022, and 2021

Potash segment sales during the first half of 2022 increased $24.0 million compared to the same period in 2021, as potash sales increased $24.8 million, partially offset by a $0.8 million decrease in potash segment byproduct sales. Our potash

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sales increased due to a ~~60%~~138% increase in our average net realized sales price per ton, ~~a $1.5 million increase in byproduct sales,~~ partially offset by a 39% decrease ~~of 6%~~ in tons of potash sold. ~~Near-term~~As discussed above, our potash ~~shortages have led to multiple price increases since~~sales volumes decreased in the ~~fourth quarter~~first half of 2020 and driven the per ton price of potash to historical highs. Increased byproduct sales were driven by an increase of $0.8 million in magnesium chloride sales, a $0.6 million increase in salt sales and a $0.2 million increase in brine water sales. Our magnesium chloride sales increased as we had more product to sell in 2021 due to good evaporation during the summer of 2020. Byproduct salt and byproduct brine water sales increased due to the increased activity by oil and gas producers during the third quarter of 2021,2022, as compared to the ~~third~~first half of 2021, as we had fewer potash tons to sell during the first half of 2022. Below average evaporation rates across our facilities in 2021, led to decreased potash production during the second half of 2021 and the first half of 2022. Additionally, as discussed above, potash customers have been reluctant to build inventory during the summer months for the fall application season. During the second quarter of ~~2020.~~2021, a summer fill program was announced in May 2021, which incentivized customers to take delivery of product beginning late in the second quarter of 2021. A similar summer fill program was not offered by the major potash producers during the second quarter of 2022. Average net realized sales price per ton was higher due to price increases announced since the second half of 2021.

Potash segment freight expense decreased ~~slightly~~$2.1 million, or 22%, in the ~~third quarter~~first half of ~~2021,~~2022, compared to the ~~third quarter~~first half of ~~2020,~~2021, as a result of a 6%39% decrease in ~~potash tons sold.~~sales volume. Our freight expense is impacted by the geographic distribution of our potash and byproduct sales and by the proportion of customers arranging for and paying their own freight costs.

Our potash segment cost of goods sold ~~increased 23% in the third quarter of 2021,~~decreased $8.8 million, or 18%, compared to the ~~same period in 2020.~~prior year. While weour potash tons sold ~~6% fewer tons of potash in the third quarter of 2021, compared to third quarter of 2020,~~decreased 39%, our weighted average carrying cost per ton ~~was higher~~increased due to increased potash production costs caused by inflationary pressures and below average evaporation atrates across our ~~HB mine~~facilities in 2021, ~~compared~~led to ~~above average evaporation across our~~a 22% decrease in potash ~~facilities in 2020.~~tons produced during the first half of 2022. Most of our production costs are fixed and a decrease in tons produced increases our per ton weighted average cost.

During the three months ended September 30, 2021, we recorded abnormal production costs of $3.6 million. The Carlsbad, New Mexico area where our HB solar solution mining facility is located, experienced unusually wet, humid weather during the evaporation season. Because of the wet, humid weather, our evaporation and extraction rates were well below normal, resulting in fewer harvestable tons of potash from our HB solution ponds.

Our potash segment gross margin increased ~~$3.2~~$35.2 million in the ~~third quarter~~first six months of ~~2021,~~2022, compared to the same period in ~~2020, due to the factors discussed above.~~

~~Nine Months Ended September 30,~~ 2021, ~~and 2020~~

Potash segment sales increased 40% for the nine months ended September 30, 2021, as compared to the same period in 2020, due to a 27% increase in our average net realized sales price per ton, a 13% increase in tons of potash sold and a $5.1

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million increase in byproduct sales. Agricultural sales volume increased 15% as strong commodity prices drove increased potash demand. Industrial potash sales volume increased 43% as oil and gas activities increased in response to rising oil prices. Average potash net realized sales price per ton was higher as near-term supply shortages drove price increases during the first nine months of 2021. Byproduct sales increased as economic activity continues to improve from the COVID-19 pandemic.

Potash segment freight expense increased $1.1 million, or 8%, in the first nine months of 2021, compared to the first nine months of 2020 as a result of a 13% increase in potash tons sold. Our freight expense is impacted by the geographic distribution of our potash and byproduct sales and by the proportion of customers arranging for and paying their own freight costs.

Our potash segment cost of goods sold increased $13.0 million, or 23%, compared to the prior year due to the 13% increase in potash tons sold volume in 2021, and our weighted average carrying cost of potash increased due to below average evaporation at our HB mine in 2021, compared to above average evaporation across our potash facilities in 2020. Most of our production costs are fixed and a decrease in tons produced increases our per ton weighted average cost.

~~As discussed above, we recorded abnormal production costs of $3.6 million due to wet weather in the Carlsbad, New Mexico area during the 2021 evaporation season.~~

Potash production was flat in the first nine months of 2021 compared to the first nine months of 2020 as increased production during the first six months was offset by abnormally low production during the third quarter, as discussed above.

~~Our potash segment gross margin increased $15.6 million in the first nine months of 2021, compared to the same period in 2020,~~ due to the factors discussed above.

Additional Information Relating to Potash

The table below shows our potash sales mix for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020:~~2021:


		Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended June 30,		Six Months Ended June 30,
		2021	2020	2021	2020		2022	2021	2022	2021
Agricultural	Agricultural	69%	77%	80%	79%	Agricultural	68%	81%	72%	83%
Industrial	Industrial	10%	2%	5%	4%	Industrial	9%	5%	7%	4%
Feed	Feed	21%	21%	15%	17%	Feed	23%	14%	21%	13%

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Trio® Segment


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per ton amounts)	(in thousands, except per ton amounts)	2021		2020		2021		2020		(in thousands, except per ton amounts)	2022		2021		2022		2021
Sales1	Sales1	$	20,827	$	12,890	$	71,444	$	54,722	Sales1	$	35,467	$	26,924	$	76,519	$	50,619
Less: Freight costs	Less: Freight costs	4,038		3,878		16,515		15,950		Less: Freight costs	5,611		6,037		11,920		12,477
Warehousing and handling costs	Warehousing and handling costs	825		1,142		3,072		3,611		Warehousing and handling costs	995		1,072		2,147		2,248
Cost of goods sold	Cost of goods sold	10,528		8,754		43,329		40,405		Cost of goods sold	15,809		16,653		33,261		32,801
Lower of cost or net realizable value inventory adjustments		—		464		—		2,885

Gross Margin (Deficit)		$	5,436	$	(1,348)	$	8,528	$	(8,129)

Gross Margin										Gross Margin	$	13,052	$	3,162	$	29,191	$	3,093
Depreciation, depletion, and amortization incurred2	Depreciation, depletion, and amortization incurred2	$	1,321	$	1,531	$	4,204	$	4,556	Depreciation, depletion, and amortization incurred2	$	1,042	$	1,376	$	2,050	$	2,883

Sales volumes (in tons)	Sales volumes (in tons)	46		40		191		180		Sales volumes (in tons)	59		75		131		145
Production volumes (in tons)	Production volumes (in tons)	56		55		175		155		Production volumes (in tons)	58		63		123		119

Average Trio® net realized sales price per ton3	Average Trio® net realized sales price per ton3	$	336	$	189	$	271	$	197	Average Trio® net realized sales price per ton3	$	493	$	271	$	476	$	251

1 Sales include sales of byproducts which were ~~$1.3~~$0.8 million and ~~$1.4~~$0.6 million for the three months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020,~~2021, respectively, and ~~$3.1~~$2.2 million and ~~$3.2~~$1.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020,~~2021, respectively.

2 Depreciation, depletion, and amortization incurred excludes depreciation, depletion, and amortization amounts absorbed in or (relieved from) inventory.

3Average net realized per ton sales price per ton is a non-GAAP financial measure. More information about this measure, is below under the heading "Non-GAAP Financial Measure."

Three Months Ended ~~September~~June 30, ~~2021,~~2022, and ~~2020~~2021

Trio® segment sales increased ~~62% for~~32% during the ~~three months ended September 30, 2021, as~~second quarter of 2022, compared to the ~~same period in 2020. The increase was~~second quarter of 2021. Trio® sales increased $8.3 million and our Trio® segment byproduct sales increased $0.2 million. Trio® sales increased primarily due to a ~~78%~~82% increase in average net realized sales price per ton, ~~coupled with~~partially offset by a ~~15% increase~~21% decrease in Trio® tons sold. ~~Sales volumes increased as strong commodity prices and the economic rebound from the COVID-19 pandemic drove an increase in demand for Trio~~®. Our Trio® average net realized sales price per ton increased due to ~~the~~several price increases announced since the ~~fourth quarter~~second half of ~~2020.~~2021. Similar to our potash customers, our Trio® customers worked to end the spring season with minimal inventory on hand which slowed our sales towards the end of the second quarter. Our Trio® segment byproduct sales increased $0.2 million due to an increase in Trio® segment byproduct water sales.

Trio® freight costs ~~increased 4%~~decreased 7% in the ~~third~~first quarter of 2022, compared to the first quarter of 2021, ~~compared to the third quarter~~due a decrease of ~~2020, due to a 15% increase~~21% in Trio® tons sold. Our freight expense is impacted by the geographic distribution of our Trio® sales and by the proportion of customers arranging for and paying their own freight costs.

Our Trio® cost of goods sold ~~increased 23%~~decreased 5% in the ~~third~~second quarter of ~~2021,~~2022, compared to the ~~third~~second quarter of ~~2020, due mainly to a 15% increase in~~2021. While our tons of Trio® ~~tons sold.~~

~~Our~~sold decreased 21%, our weighted average carrying cost per ton increased due to increased Trio® production ~~volume was flat~~ costs caused by inflationary pressures and we produced 8% fewer tons of Trio® in the ~~third~~second quarter of ~~2021,~~2022, compared to the ~~third~~second quarter of ~~2020.~~2021. Most of our production costs are fixed and a decrease in tons produced increases our per ton weighted average cost.

Our Trio® segment ~~generated~~gross margin increased to $13.1 million in the second quarter of 2022, compared to gross margin of ~~$5.4~~$3.2 million in the ~~third~~second quarter of 2021, ~~compared to a negative gross margin of $1.3 million in the third quarter of 2020,~~ due mainly to the increase in average net realized sales price per ton and the other factors discussed ~~above, and we recorded a $0.5 million lower of cost or net realizable value inventory adjustment in the third quarter of 2020.~~above.

~~Nine~~Six Months Ended ~~September~~June 30, ~~2021,~~2022, and ~~2020~~2021

Trio® segment sales increased ~~31% for~~51% during the ~~nine months ended September 30, 2021, as~~first half of 2022, compared to the ~~same period in 2020. The increase was primarily~~first half of 2021. Trio® sales increased $25.4 million and our Trio® segment byproduct sales increased $0.5 million. Our Trio® sales increased due to a ~~38%~~90% increase in ~~Trio~~® our average net realized sales price per ton, ~~combined with~~partially offset by a ~~6% increase~~10% decrease in Trio® tons sold. Our Trio® average net realized sales price per ton increased due to ~~the~~several price increases announced since the ~~fourth quarter~~second half of ~~2020. Sales volumes increased as strong commodity prices and~~2021. Similar to our potash customers, our Trio® customers worked to end the ~~economic rebound from~~spring season with minimal inventory on hand which slowed our sales towards the ~~COVID-19 pandemic drove an increase in demand for~~end of the second quarter. Our Trio®. segment byproduct sales increased due primarily to $0.4 million increase in Trio® segment byproduct water sales.

Trio® freight costs ~~increased~~decreased 4% in the first ~~nine months~~half of ~~2021,~~2022, compared to the first ~~nine months~~half of ~~2020,~~2021, due ~~to the 6% increase~~a 10% decrease in Trio®tons ~~sold .~~sold. Our freight expense is impacted by the geographic distribution of our Trio® sales and by the proportion of customers arranging for and paying their own freight costs.

~~Our Trio~~® ~~cost of goods sold increased 7% in the first nine months of 2021, compared to the first nine months of 2020, as Trio~~® ~~sales volume increased 6%.~~

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Our Trio® ~~production volume~~cost of goods sold increased ~~13%~~1% in the first half of 2022, compared to the first ~~nine months~~half of ~~2020, as we converted more work-in-process inventory to premium~~2021. While our tons of Trio®. sold decreased 10% our weighted average carrying cost per ton increased due to increased production costs caused by inflationary pressures.

Our Trio® segment generated gross margin ~~of $8.5~~increased to $29.2 million in the first ~~nine months~~half of ~~2021,~~2022, compared to ~~a negative~~ gross margin of ~~$8.1~~$3.1 million in the first ~~nine months~~half of ~~2020,~~2021, due mainly to the increase in average net realized sales price per ton and the other factors discussed ~~above, and we recorded a $2.9 million lower of cost or net realizable value inventory adjustment in the first nine months of 2020.~~above.

Additional Information Relating to Trio®

The table below shows the percentage of Trio® tons sold into the domestic and export markets during the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020. Our percentage of Trio~~® ~~tons sold internationally decreased for the three and nine months ended September 30, 2021, as compared to the same periods in 2020, as we continued to focus on the domestic Trio~~® ~~market.~~2021.

United States Export
For the Three Months Ended September 30 2021 90% 10%
For the Nine Months Ended September 30, 2021 93% 7%
For the Three Months Ended September 30, 2020 88% 12%
For the Nine Months Ended September 30, 2020 84% 16%


	United States	Export
For the Three Months Ended June 30, 2022	90%	10%
For the Six Months Ended June 30, 2022	91%	9%

For the Three Months Ended June 30, 2021	94%	6%
For the Six Months Ended June 30, 2021	94%	6%

Oilfield Solutions Segment


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Sales	Sales	$	6,708	$	3,050	$	14,293	$	13,539	Sales	$	7,512	$	3,331	$	14,512	$	7,584

Cost of goods sold	Cost of goods sold	6,061		3,363		12,235		8,397		Cost of goods sold	3,678		2,425		8,706		6,173

Gross Margin	Gross Margin	$	647	$	(313)	$	2,058	$	5,142	Gross Margin	$	3,834	$	906	$	5,806	$	1,411
Depreciation, depletion, and amortization incurred	Depreciation, depletion, and amortization incurred	$	818	$	657	$	2,206	$	1,945	Depreciation, depletion, and amortization incurred	$	803	$	700	$	1,590	$	1,388

Three Months Ended ~~September~~June 30, ~~2021,~~2022, and ~~2020~~2021

Our oilfield solutions segment sales increased ~~$3.7~~$4.2 million in the ~~third~~second quarter of ~~2021,~~2022, compared to the same period in ~~2020,~~2021, due to a ~~$2.4~~$1.9 million increase in water sales, a ~~$0.5~~$1.4 million increase in surface use, rights-of-way and easement revenues, a $0.4 million increase in brine water sales, a $0.3 million increase in caliche sales, ~~a $0.4 million increase in produced water royalties,~~ and a $0.2 million increase in ~~surface use, right-of way and easement revenues.~~produced water royalties. The ~~increases~~increase in sales of our oilfield solutions products was due to the increased oil and gas activities as oil prices ~~increased.~~were higher in the second quarter of 2022, compared to the same period in 2021.

Our cost of goods sold increased ~~80%,~~$1.3 million, or ~~$2.7 million~~52%, for the ~~three months ended September 30, 2021,~~second quarter of 2022, compared to the ~~three months ended September 30, 2020, primarily as~~same period in 2021, due to increased contract labor expenses related to the development of a ~~result of~~full-cycle water management operation, increased ~~third-party water purchases~~royalty expense due to ~~meet the significant daily refresh rates for certain fracs on our South ranch.~~increased sales and increased fuel and electrical expenses due to inflationary pressures.

Gross margin for the ~~three months ended September 30, 2021,~~second quarter of 2022, increased ~~$1.0~~$2.9 million compared to the ~~prior year,~~second quarter of 2021, due to the factors discussed above.

~~Nine~~Six Months Ended ~~September~~June 30, ~~2021,~~2022, and ~~2020~~2021

Our oilfield solutions segment sales increased ~~$0.8~~$6.9 million, or 91%, during the ~~nine months ended September 30, 2021,~~first half of 2022, compared to the same period in ~~2020,~~2021, due to a ~~$0.9~~$2.8 million increase in water sales, a $2.3 million increase in surface use, rights-of-way and easement revenues, a $1.0 million increase in brine water sales, a $0.5 million increase in produced water royalty revenues and a ~~$0.5~~$0.4 million increase in ~~surface use, right-of way~~caliche sales. The increase in sales of our oilfield solutions products was due to the increased oil and easement revenues, an increase of $0.4 million in brine water sales, and an increase of $0.2 million in caliche sales, partially offset by $1.2 million decrease in water sales. These sales increases were driven by increased oilfieldgas activities as ~~a result of the increase in~~ oil ~~prices. While our water sales increased during the second and third quarters of 2021, our first quarter 2021 water sales recorded~~prices were higher in the ~~oilfield solutions segment decreased significantly, as~~first half of 2022, compared to the ~~first quarter of 2020, due to the negative economic effects from the COVID-19 pandemic. We expect our oilfield solutions water sales will to continue to improve during the fourth quarter~~same period in 2021.

Our cost of goods sold increased ~~46%~~$2.5 million, or 41%, ~~or $3.8 million for~~during the ~~nine months ended September 30, 2021,~~first half of 2022, compared to the ~~nine months ended September 30, 2020, primarily~~same period in 2021. Our cost of goods sold increased due to increased contract labor and rental expenses related to the development of a ~~result of~~full-cycle water management operation, increased ~~third-party water purchases~~royalty expense due to ~~meet the significant daily refresh rates for certain fracs on our South ranch.~~increased sales and increased fuel and electrical expenses due to inflationary pressures.

~~Our gross~~Gross margin for the ~~nine months ended September 30, 2021, decreased $3.1~~first half of 2022, increased $4.4 million compared to the same period in the prior year, due to the factors discussed above.

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Specific Factors Affecting Our Results

Sales

Our gross sales are derived from the sales of potash, Trio®, water, salt, magnesium chloride, brine water and various other products and services offered to oil and gas producers. Total sales are determined by the quantities of product we sell and the sales prices we realize. For potash, Trio® and salt, we quote prices to customers both on a delivered basis and on the basis of pick-up at our plants and warehouses. We incur freight costs on most of our potash, Trio® and salt sales, but some customers arrange and pay for their own freight directly. When we arrange and pay for freight, our quotes and billings are based on expected freight costs to the points of delivery. When we calculate our potash and Trio® average net realized sales price per ton, we deduct any freight costs included in sales before dividing by the number of tons sold. We believe the deduction of freight costs provides a more representative measure of our performance in the market due to variations caused by ongoing changes in the proportion of customers paying for their own freight, the geographic distribution of our products, and freight rates. Freight rates have been increasing, and if we are unable to pass the increased freight costs on to the customer, our average net realized sales price per ton is negatively affected. We manage our sales and marketing operations centrally and we work to achieve the highest average net realized sales price per ton we can by evaluating the product needs of our customers and associated logistics and then determining which of our production facilities can best satisfy these needs.

The volume of product we sell is determined by demand for our products and by our production capabilities. We operate our potash and Trio® facilities at production levels that approximate expected demand and take into account current inventory levels and expect to continue to do so for the foreseeable future.

Our water sales and other products and services offered through our oilfield solutions segment are driven by demand from oil and gas exploration companies drilling in the Permian Basin. As such, demand for our water is generally stronger during a cyclical expansion of oil and gas drilling. Likewise, a cyclical contraction of oil and gas drilling may decrease demand for our water and the other products and services offered through our oilfield solutions segment. ~~The~~Restrictions in place during the first half of 2021 to help contain the COVID-19 pandemic caused ~~an unprecedented~~a decrease in the demand for oil, resulting in lower prices and ~~significant decreases in~~decreased oil and gas ~~activity,~~activities. As most of those restrictions were lifted before the start of 2022, the demand for oil has recovered and ~~our total water sales, including byproduct water sales, decreased 3%~~prices have rebounded, which in the first nine months of 2021 compared to the first nine months of 2020 because total water sales during the first three months of 2020 were not affected by the COVID-19 pandemic. We have seen an economic rebound from the COVID-19 pandemic during the second and third quarters of 2021, and our total water sales for the second and third quarters of 2021, including byproduct water sales, increased 42% as compared to the second and third quarters of 2020. Rising oil prices haveturn has led to increased ~~oilfield activities since the summer~~drilling activities. Further, Russia's invasion of ~~2020 and we expect oilfield activity will continue to improve in the fourth quarter of 2021, although economic uncertainty~~Ukraine and the related sanctions imposed by several countries against Russia has the potential ~~for future restrictions enacted by state and local governments resulting from~~of reducing the ~~COVID-19 pandemic may negatively impact oilfield activities.~~global supply of oil in 2022.

Cost of Goods Sold

Our cost of goods sold reflects the costs to produce our products. Many of our production costs are largely fixed and, consequently, our cost of sales per ton on a facility-by-facility basis tends to move inversely with the number of tons we produce, within the context of normal production levels. Our principal production costs include labor and employee benefits, maintenance materials, contract labor, and materials for operating or maintenance projects, natural gas, electricity, operating supplies, chemicals, depreciation and depletion, royalties, and leasing costs. Inflationary pressures during the first half of 2022 have led to increases in our production costs. Certain elements of our cost structure associated with contract labor, consumable operating supplies, reagents, and royalties are variable, but these variable elements make up a smaller component of our total cost structure. Our costs often vary from period to period based on the fluctuation of inventory, sales, and production levels at our facilities.

Our production costs per ton are also impacted when our production levels change, due to factors such as changes in the grade of ore delivered to the plant, levels of mine development, plant operating performance, and downtime. Because all of our potash is produced from solution mining, weather has a significant impact on our potash production. We expect that our labor and contract labor costs in Carlsbad, New Mexico, will continue to be influenced most directly by the demand for labor in the local region where we compete for labor with another fertilizer company, companies in the oil and gas industry, and a nuclear waste processing and storage facility.

We pay royalties to federal, state, and private lessors under our mineral leases. These payments typically equal a percentage of sales (less freight) of minerals extracted and sold under the applicable lease. In some cases, federal royalties for potash are paid on a sliding scale that vary with the grade of ore extracted. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, our average royalty rate was 4.8%. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, our average royalty rate was ~~5.1~~4.6% and ~~4.8%~~4.7%, respectively.

Income Taxes

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We are subject to federal and state income taxes on our taxable income. Our effective tax rate for the ~~nine~~six months ended ~~September~~June 30, ~~2021 and 2020,~~2022, was ~~zero percent.~~23.8%. Our effective tax rate differed from the statutory rate during ~~each~~this period primarily from the estimated permanent difference between book and tax income for 2022 for the percentage depletion deduction as well as the effect of state income tax law changes enacted during the first half of 2022. Our effective tax rate for the six months ended June 30, 2021, was

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zero percent which differed from the statutory rate primarily due to the valuation allowance that was established to offset our deferred tax assets.

Our federal and state income tax returns are subject to examination by federal and state tax authorities.

For the ~~nine~~six months ended ~~September~~June 30, 2022, we incurred approximately $16.9 million of deferred income tax expense and $0.3 million of current income tax expense. Our current income tax expense is less than the total tax expense of $17.2 million due to the utilization of net operating losses. For the six months ended June 30, 2021 we incurred no income tax ~~expense and for the nine months ended September 30, 2020 we recognized an immaterial amount of income tax benefit.~~expense.

We evaluate our deferred tax assets and liabilities each reporting period using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax liability or asset is expected to be settled or realized. The estimated statutory income tax rates that are applied to our current and deferred income tax calculations are impacted most significantly by the states in which we conduct business. Changing business conditions for normal business transactions and operations, as well as changes to state tax ~~rate~~rates and apportionment laws, potentially alter our apportionment of income among the states for income tax purposes. These changes in apportionment laws result in changes in the calculation of our current and deferred income taxes, including the valuation of our deferred tax assets and liabilities. The effects of any such changes are recorded in the period of the adjustment. These adjustments can increase or decrease the net deferred tax asset on our condensed consolidated balance ~~sheet. However, any resulting impact to~~sheet, and thus increase or decrease the deferred tax benefit or deferred ~~tax expense would be offset by a corresponding adjustment to the valuation allowance and would have no income statement effect.~~

As of September 30, 2021, we were in a near break-even cumulative three-year income position. Additionally, weather issues which have negatively impacted our potash production, various legal issues which may have a material adverse effect on our future results of operations, supply chain issues that have driven near term potash supply shortages and have led to increased fertilizer prices, and the ongoing Covid-19 pandemic and any potential vaccine mandates, make it difficult to accurately forecast sustained amounts of future income. These circumstances are significant negative evidence when evaluating the realizability of our deferred tax assets. This negative evidence continues to outweigh the positive evidence of profitability in 2018, and 2019, thereby requiring us to maintain the full valuation allowance as of September 30, 2021. However, we believe that if positive pricing and sales evidence trends continue and our future long-term forecasts show sustained profitability, it is possible that there may be sufficient positive evidence to release all or a portion of our valuation allowance within the next 12 months. The timing and amount of any valuation allowance release is subject to significant judgement that is considered with the timing and amounts of actual and future earnings. Release of any valuation allowance would result in a benefit to income tax expense inon the ~~period the release is recorded, which could have a material effect on net earnings.~~income statement.

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Capital Investments

During the second quarter of 2022, and the first ~~nine months~~half of ~~2021,~~2022, cash paid for property, plant, equipment, mineral properties, intangible and other assets was ~~$12.4 million.~~$16.0 million and $22.8 million, respectively.

We now expect to make capital investments in ~~2021~~2022 of ~~$18~~$65 million to ~~$23 million, with~~$75 million. We anticipate spending approximately ~~$15~~$35 million on sustaining capital, ~~projects and~~which is towards the ~~remainder~~top end of our ~~estimated spending on~~previous range, as we continue to pull projects forward in response to supply chain and inflationary pressures. Planned opportunity ~~projects.~~capital includes an additional cavern at our Moab facility, the beginning of an improved pipeline system for our HB facility, and additional brackish and deep-brine wells at our Wendover facility. We may adjust our investment plans as our expectations for 2022 change. We anticipate our ~~2021~~2022 operating plans and capital programs will be funded out of operating cash flows and existing cash. We may also use our revolving credit facility, to the extent available, to fund capital investments.

Liquidity and Capital Resources

As of ~~September~~June 30, ~~2021,~~2022, we had cash ~~on hand~~and cash equivalents of ~~$25.6~~$81.9 million, compared with cash on-hand of ~~$19.5~~$36.5 million at December 31, ~~2020. In April 2020, we received a $10 million loan under~~2021. The increase in our cash balance during the ~~CARES Act Paycheck Protection Program (the "PPP"). We used~~first half of 2022 was driven mainly by increases in the ~~funds exclusively~~average net realized sales price per ton for ~~allowed payroll, benefits~~both Potash and other allowed expenses and in June 2021, we received notice that the Small Business Administration ("SBA") had remitted funds to our bank to fully repay our PPP loan and accrued interest. Accordingly, we recognized a gain of $10.1 million related to the forgiveness of the PPP loan and the associated accrued interest on the loan.

In June 2021, we repaid the remaining $15.0 million of principal outstanding on our Series B Senior Notes along with a make-whole payment of $0.5 million. During the third quarter of 2021, we also repaid the $29.8 million that was outstanding under our credit facility.Trio®.

Our operations have primarily been funded from cash on hand, cash generated by operations, borrowings under our revolving credit facility, and proceeds from debt and equity offerings. We continue to monitor our future sources and uses of cash and anticipate that we will adjust our capital allocation strategies when, and if, determined by our Board of Directors. We may, at any time we deem conditions favorable, attempt to improve our liquidity position by accessing debt or equity markets in accordance with our existing debt agreements. We also may raise capital in the future through the issuance of additional equity or debt securities, subject to prevailing market conditions. However, there is no assurance that we will be able to successfully raise additional capital on acceptable terms or at all. With our current cash on hand, the remaining availability under our credit facility, and the expected cash generated from operations, we believe we have sufficient liquidity to meet our obligations for the next twelve months.

The following summarizes our cash flow activity for the ~~nine~~three months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020~~2021 (in thousands):


		Nine Months Ended September 30,					Six Months Ended June 30,
		2021		2020			2022		2021
Cash flows provided by operating activities	Cash flows provided by operating activities	$	59,423	$	18,487	Cash flows provided by operating activities	$	83,229	$	51,436
Cash flows used in investing activities	Cash flows used in investing activities	$	(6,395)	$	(12,801)	Cash flows used in investing activities	$	(33,627)	$	(584)
Cash flows used in financing activities	Cash flows used in financing activities	$	(46,881)	$	(17,001)	Cash flows used in financing activities	$	(4,252)	$	(17,092)

Operating Activities

~~Total~~Net cash provided by operating activities through ~~September~~June 30, ~~2021,~~2022, was ~~$59.4~~$83.2 million, an increase of ~~$40.9~~$31.8 million compared with the first ~~nine months~~half of ~~2020~~2021, due to increased potash and Trio® sales.

Investing Activities

~~Total~~Net cash used in investing activities ~~decreased~~increased by ~~$6.4~~$33.0 million in the first ~~nine months~~half of ~~2021,~~2022, compared with the same period in ~~2020. Cash used for~~2021 due to a $16.1 million increase in capital investments ~~decreased by $1.7~~and a $10.9 million ~~compared to~~increase in investment purchases. During the first ~~nine months~~half of ~~2020 as~~2022, we ~~continue to prudently manage~~invested $8.4 million of our excess cash ~~flow~~on-hand in light of economic uncertainty caused by the COVID-19 pandemic. Proceeds from the sale of assets increased $1.3 million during the first nine months of 2021, driven by the sale of land we owned in Texas for $6.0 million, while during the same period in 2020, we received $4.8investment grade, highly-liquid, shorter-term debt instruments. We also invested an additional $2.5 million in ~~proceeds from~~ a ~~land sale from our Intrepid South ranch. Also, during the first nine months~~pool of ~~2020, we acquired~~working interests in oil and gas wells managed by a ~~non-controlling equity interest in W.D. Von Gonten Laboratories for $3.5 million.~~third party.

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Financing Activities

Revolving Credit Facility—We maintain a revolving credit facility with Bank of Montreal. As of ~~September~~June 30, ~~2021,~~2022, borrowings under the revolving credit facility bear interest at LIBOR (London Interbank Offered Rate) plus an applicable margin of 1.25% to 2.00% per annum, based on our leverage ratio as calculated in accordance with the agreement governing the revolving credit facility. We have granted to Bank of Montreal a first lien on substantially all of our current and non-current assets. The obligations under the revolving credit facility are unconditionally guaranteed by several of our subsidiaries.

We occasionally borrow and repay amounts under the facility for near-term working capital needs or other purposes and may do so in the future. During the ~~three and nine~~six months ended ~~September~~June 30, ~~2021,~~2022, we made no borrowings and we made ~~$29.8 million of~~no repayments under the revolving credit facility. As of ~~September~~June 30, ~~2021,~~2022, we had no borrowings outstanding ~~under our credit facility~~ and ~~we had $1.0~~$1 million in outstanding letters of credit under ~~our facility. Including the outstanding letters of credit, we had $74.0 million available under our facility as of September 30, 2021.~~

During the three months ended September 30, 2020, we made no borrowings or repayments under the facility. During the nine months ended September 30, 2020, we borrowed $10.0 million and made no repayments under the facility. As of December 31, 2020, we had $29.8 million of borrowings outstanding under our facility and we had $1.0 million in outstanding letters of credit under our thethis facility.

As of ~~September~~June 30, ~~2021,~~2022, we were in compliance with all applicable covenants under the revolving credit facility.

As of ~~October~~July 31, ~~2021,~~2022, we had ~~no borrowings outstanding and $1.0~~approximately $85 million in ~~outstanding letters~~cash and cash equivalents.

Share Repurchase Program

In February 2022, our Board of ~~credit~~Directors approved a $35 million share repurchase program. Under the share repurchase program, we may repurchase shares from time to time in the open market or in privately negotiated transactions. The timing, volume and nature of share repurchases, if any, will be at our sole discretion and will be dependent on market conditions, liquidity, applicable securities laws, and other factors. We may suspend or discontinue the share repurchase program at any time. As of June 30, 2022, we have not repurchased any shares under the ~~facility, and approximately $26.4 million in cash. Including the outstanding letters of credit, we had $74.0 million available to be borrowed under the facility.~~

~~PPP Loan~~—In April 2020, we received a $10 million loan under the PPP under the CARES Act. We submitted our application for forgiveness of the full amount of the loan in November 2020. In June 2021, we received notice that the SBA had remitted funds to our bank to fully repay our PPP loan and accrued interest. Accordingly, we recognized a gain of $10.1 million related to the forgiveness of the PPP loan and the associated accrued interest on the loan.

~~Senior Notes~~—In June 2021 we repaid the remaining $15.0 million of principal outstanding on our Series B Senior Notes and satisfied all obligations under the Note Purchase Agreement. In connection with this repayment, the Company paid in aggregate approximately $15.6 million, which consisted of (i) $15.0 million of remaining aggregate principal amount of Series B Senior Notes, (ii) approximately $0.1 million of accrued interest and (iii) a "make-whole" premium of $0.5 million. As a result of the repayment, the Note Purchase Agreement was terminated.

After the repayment of our Series B Senior Notes and the forgiveness of our PPP loan in June 2021, our long-term debt balance, was zero at September 30, 2021. Our outstanding long-term debt, excluding deferred financing costs, as of December 31, 2020, was as follows (in thousands):


	~~December 31, 2020~~
~~Notes and Payroll Protection Loan~~	$	~~25,000~~
~~Advances on credit facility~~	~~29,817~~
~~Less current portion of long-term debt~~	~~(10,000)~~
~~Long-term debt~~	$	~~44,817~~

~~Off-Balance Sheet Arrangements~~

~~As of September 30, 2021, we had no material off-balance sheet arrangements aside from the bonding obligations described in Note 14 to the condensed consolidated financial statements.~~share repurchase program.

Critical Accounting Policies and Estimates

Our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, describes the critical accounting policies that affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. We have not made any significant changes to our critical accounting policies since December 31, ~~2020.~~2021.

~~Table of Contents~~

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Non-GAAP Financial Measure

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, from time to time we use "average net realized sales price per ton," which is a non-GAAP financial measure. This non-GAAP financial measure should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, because the presentation of this non-GAAP financial measure varies among companies, our presentation of this non-GAAP financial measure may not be comparable to similarly titled measures used by other companies.

We believe average net realized sales price per ton, when used in conjunction with GAAP financial measures, provides useful information to investors for analysis of our business and operating results, enhances the overall understanding of past financial performance and future prospects, and allows for greater transparency with respect to the key metric we use in our financial and operational decision making. We use this non-GAAP financial measure as one of our tools in comparing period-over-period performance on a consistent basis and when planning, forecasting, and analyzing future periods. We believe this non-GAAP financial measure is used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the potash mining industry. Many investors use the published research reports of these professional research analysts and others in making investment decisions.

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Average Net Realized Sales Price per Ton

We calculate average net realized sales price per ton for each of potash and Trio®. Average net realized sales price per ton for potash is calculated as potash segment sales less potash segment byproduct sales and potash freight costs and then dividing that difference by the number of tons of potash sold in the period. Likewise, average net realized sales price per ton for Trio® is calculated as Trio® segment sales less Trio® segment byproduct sales and Trio® freight costs and then dividing that difference by Trio® tons sold. We consider average net realized sales price per ton to be useful, and believe it to be useful for investors, because it shows our potash and Trio® average per-ton pricing without the effect of certain transportation and delivery costs. When we arrange transportation and delivery for a customer, we include in revenue and in freight costs the costs associated with transportation and delivery. However, some of our customers arrange for and pay their own transportation and delivery costs, in which case these costs are not included in our revenue and freight costs. We use average net realized sales price per ton as a key performance indicator to analyze potash and Trio® sales and price trends.

Below is a reconciliation of average net realized sales price per ton to segment sales, the most directly comparable GAAP financial measure for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, and ~~2020:~~2021:


		Three Months Ended September 30,															Three Months Ended June 30,
		2021						2020									2022						2021
(in thousands, except per ton amounts)	(in thousands, except per ton amounts)	Potash				Trio®		Potash				Trio®		(in thousands, except per ton amounts)			Potash				Trio®		Potash		Trio®
Total Segment Sales	Total Segment Sales	$	31,673			$	20,827	$	22,187			$	12,890	Total Segment Sales			$	48,827			$	35,467	$	37,693	$	26,924
Less: Segment byproduct sales	Less: Segment byproduct sales	5,100				1,332		3,612				1,449		Less: Segment byproduct sales			4,942				780		4,812		584
Freight costs	Freight costs	2,879				4,038		2,891				3,878		Freight costs			2,563				5,609		3,486		6,037
Subtotal	Subtotal	$	23,694			$	15,457	$	15,684			$	7,563	Subtotal			$	41,322			$	29,078	$	29,395	$	20,303

Divided by:	Divided by:													Divided by:
Tons sold	Tons sold	62				46		66				40		Tons sold			56				59		92		75
Average net realized sales price per ton	Average net realized sales price per ton	$	381			$	336	$	238			$	189	Average net realized sales price per ton			$	738			$	493	$	319	$	271

		Nine Months Ended September 30,															Six Months Ended June 30,
		2021						2020									2022						2021
(in thousands, except per ton amounts)	(in thousands, except per ton amounts)	Potash				Trio®		Potash				Trio®		(in thousands, except per ton amounts)			Potash				Trio®		Potash		Trio®

Total Segment Sales	Total Segment Sales			$	112,944					$	71,444				$	80,504			$	54,722		Total Segment Sales	$	105,269	$	76,519	$	81,270	$	50,619
Less: Segment byproduct sales	Less: Segment byproduct sales	15,696				3,096		10,562				3,248		Less: Segment byproduct sales			9,762				2,216		10,595		1,764
Freight costs	Freight costs	11,174				16,515		10,021				15,935		Freight costs			5,687				11,919		8,295		12,477
Subtotal	Subtotal	$	86,074			$	51,833	$	59,921			$	35,539	Subtotal			$	89,820			$	62,384	$	62,380	$	36,378

Divided by:	Divided by:													Divided by:
Tons sold	Tons sold	270				191		239				180		Tons sold			126				131		208		145
Average net realized sales price per ton	Average net realized sales price per ton	$	319			$	271	$	251			$	197	Average net realized sales price per ton			$	713			$	476	$	300	$	251

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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Part II, Item 7A., "Quantitative and Qualitative Disclosure About Market Risk," of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, describes our exposure to market risk. There have been no significant changes to our market risk exposure since December 31, ~~2020.~~2021.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain "disclosure controls and procedures as defined in Rule 13a-15(e) of the Exchange Act." Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Our disclosure controls and procedures are also designed to ensure that this information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures as of ~~September~~June 30, ~~2021.~~2022. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2021,~~2022, at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the three months ended ~~September~~June 30, ~~2021,~~2022, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Intrepid have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

For information regarding litigation, other disputes and regulatory proceedings see Part I - Item1. Financial Statements, Note 14 - Commitments and Contingencies.

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ITEM 1A.RISK FACTORS

Our future performance is subject to a variety of risks and uncertainties that could materially and adversely affect our business, financial condition, results of operations, and the trading price of our common stock. These risks and uncertainties are described in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. There have been no material changes to these risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~Unregistered Sales of Equity Securities and Use of Proceeds~~


Issuer Purchases of Equity Securities	Issuer Purchases of Equity Securities						Issuer Purchases of Equity Securities
Period	Period	(a) Total Number of Shares Purchased1	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs	Period	(a) Total Number of Shares Purchased1	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs
July 1, 2021 through July 31, 2021		30	31.02		—	N/A
August 1, 2021 through August 31, 2021		30	$	30.30	—	N/A
September 1, 2021, through September 30, 2021		—	$	—	—	N/A
April 1, 2022 through April 30, 2022							April 1, 2022 through April 30, 2022	29,416	114.14		—	N/A
May 1, 2022 through May 31, 2022							May 1, 2022 through May 31, 2022	—	$	—	—	N/A
June 1, 2022 through June 30, 2022							June 1, 2022 through June 30, 2022	7,260	$	60.33	—	N/A
Total	Total	60	$	30.66	—	N/A	Total	36,676	$	103.49	—	N/A

1 Represents shares of common stock withheld by us as payment of withholding taxes due upon the vesting of restricted stock held by our employees.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

We are committed to providing a safe and healthy work environment. The objectives of our safety programs are to eliminate workplace accidents and incidents, preserve employee health, and comply with all safety- and health-based regulations. We seek to achieve these objectives by training employees in safe work practices; establishing, following, and improving safety standards; involving employees in safety processes; openly communicating with employees about safety matters; and recording, reporting, and investigating accidents, incidents, and losses to avoid recurrence. As part of our ongoing safety programs, we collaborate with the Mine Safety and Health Administration (“MSHA”) and the New Mexico Bureau of Mine Safety to identify and implement accident prevention techniques and practices.

Our East, West, and North facilities in New Mexico are subject to regulation by MSHA under the Federal Mine Safety and Health Act of 1977 and the New Mexico Bureau of Mine Safety. MSHA inspects these facilities on a regular basis and issues various citations and orders when it believes a violation has occurred under federal law. Exhibit 95.1 to this Quarterly Report on Form 10-Q provides the information concerning mine safety violations and other regulatory matters required by SEC rules. Our Utah and HB facilities are subject to regulation by the Occupational Health and Safety Administration and, therefore, are not required to be included in the information provided in Exhibit 95.1.

ITEM 5.OTHER INFORMATION

None.

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ITEM 6.EXHIBITS


Exhibit No.						Description


10.1						Intrepid Potash, Inc. Amended and Restated Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of our current Report on From 8-K filed on May 23, 2022).†
31.1						Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*

31.2						Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*

32.1						Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

32.2						Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

95.1						Mine Safety Disclosure Exhibit.*

101.INS						Inline XBRL Instance ~~Document.~~Document (Note that the instance document does not appear in the Interactive Date File because its XBRL tags are embedded within the Inline XBRL document).*

101.SCH						Inline XBRL Taxonomy Extension ~~Schema.~~Schema Document.*

101.CAL						Inline XBRL Extension Calculation ~~Linkbase.~~Linkbase Document.*

101.LAB						Inline XBRL Extension Label ~~Linkbase.~~Linkbase Document.*

101.PRE						Inline XBRL Extension Presentation ~~Linkbase.~~Linkbase Document.*

101.DEF						Inline XBRL Extension Definition ~~Linkbase.~~Linkbase Document.*

104						Cover page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101)

* Filed herewith.

** Furnished herewith.

† Management contract or compensatory plan or arrangement

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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 thereunto duly authorized.


						INTREPID POTASH, INC. (Registrant)

Dated: ~~November 2, 2021~~August 5, 2022						/s/ Robert P. Jornayvaz III
						Robert P. Jornayvaz III - Executive Chairman of the Board and Chief Executive Officer (Principal Executive Officer)




Dated: ~~November 2, 2021~~August 5, 2022						/s/ Matthew D. Preston
						Matthew D. Preston - ~~Vice President - Finance~~Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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	United States	Export
For the Three Months Ended September 30 2021	90%	10%
For the Nine Months Ended September 30, 2021	93%	7%

For the Three Months Ended September 30, 2020	88%	12%
For the Nine Months Ended September 30, 2020	84%	16%