National Energy Services Reunited (NESR) risk factors, FY2025 10-K

Risks Related to Our Capital Structure

1. 01Other Risks Associated with Our Business

RISKS RELATING TO OUR BUSINESS AND OPERATIONS

1. 02Trends in oil and natural gas prices affect the level of exploration, development, and production activity of our customers and the demand for our services and products, which could have a material adverse effect on our business, results of operations, and financial condition
2. 03Our business is dependent on capital spending by our customers, and reductions in capital spending could have a material adverse effect on our business, results of operations, and financial condition
3. 04Our assets require capital for maintenance, upgrades and refurbishment and we may require significant capital expenditures for new equipment
4. 05We operate in multiple countries across the Middle East, North Africa, and Asia. Therefore, our operations will be subject to political and economic instability and risk of government actions that could have a material adverse effect on our business, results of operations, and financial condition
5. 06Conditions in the Middle East, including current uncertainty and instability resulting from the conflict between the United States, Israel and Iran, as well as other regional hostilities could adversely affect our business
6. 07The Company is subject to various laws and regulations in the regions in which it operates, and changes in such laws and regulations, failure to comply with existing or future laws and regulations, and disputes regarding compliance with such laws and regulations could adversely affect the Company’s business
7. 08Physical dangers are inherent in our operations and may expose us to significant potential liability and losses. Personnel and property may be harmed during the process of drilling for oil and natural gas
8. 09If we do not effectively or efficiently integrate the operations of businesses or companies we acquire, our future growth will be limited
9. 10We operate in a highly competitive industry, and many of our competitors are larger than us and have greater resources than we do
10. 11If we are unable to keep pace with technology developments in the industry, including advancements in artificial intelligence, this could adversely affect our ability to maintain or grow market share

FINANCIAL, REGULATORY, LEGAL AND COMPLIANCE RISKS

1. 12Impairment in the carrying value of goodwill could result in the incurrence of impairment charges
2. 13We may not be fully indemnified against financial losses in all circumstances where damage to or loss of property, personal injury, death or environmental harm occur
3. 14Further, our assets generally are not insured against loss from political violence such as war, terrorism or civil unrest. If any of our assets are damaged or destroyed as a result of an uninsured cause, we could recognize a loss of those assets
4. 15Changes in international tax laws and the ongoing implementation of global minimum tax rules could increase our tax liabilities and compliance costs and adversely affect our results of operations
5. 16Lack of consolidation of our fiscal results in a taxpaying jurisdiction prevents offsetting some losses against taxable profits
6. 17The owners of NESR ordinary shares are subject to tax risks due to the possibility of changes in tax rules and regulations in foreign countries
7. 18If our subsidiaries are unable to comply with the restrictions and covenants in their debt agreements, they could default under the terms of such agreements, which could result in an acceleration of repayment
8. 19To service our indebtedness, we may require a significant amount of cash, and our ability to generate cash will depend on many factors beyond our control
9. 20Our borrowings under our various loan agreements and other financing arrangements expose us to interest rate risk and such arrangements also include restrictive covenants that may impact our subsidiaries’ ability to make distributions to us
10. 21We are exposed to the credit risk of our customers and counterparties, and delay, non-payment, and/or non-performance by our customers could have an adverse effect on our financial condition, results of operations, or cash flows
11. 22Limitations on our ability to protect our intellectual property rights, including our trade secrets, could cause a loss in revenue and any competitive advantage
12. 23We may be subject to litigation if another party claims that we have infringed upon such party’s intellectual property rights
13. 24Environmental compliance costs and liabilities could reduce our earnings and cash available for operations
14. 25We could be subject to substantial liability claims, which could adversely affect our financial condition, results of operations, and cash flows
15. 26Demand for our products and services could be reduced by existing and future legislation or regulations
16. 27Increased attention to climate change, ESG matters and conservation measures by regulators and investors may adversely impact our business
17. 28Our failure to comply with complex U.S. and foreign laws and regulations could have a material adverse effect on our operations
18. 29We are subject to sanctions and export control regimes adopted by the U.S. and other jurisdictions
19. 30Our operations in the Middle East and other countries could require us to incur additional costs in order to comply with U.S., UK and EU sanctions-related regulations restricting or prohibiting activities with certain individuals and entities or in certain jurisdictions
20. 31We are subject to litigation risks that may not be covered by insurance
21. 32We may be unable to obtain, maintain or renew permits necessary for our operations, which could inhibit our ability to do business
22. 33We might require additional equity or debt financing to fund operations and/or future acquisitions
23. 34As of January 1, 2026, we were no longer a foreign private issuer and we are required to comply with the provisions of the Exchange Act, and the rules of Nasdaq, applicable to U.S. domestic issuers, which will continue to require us to incur significant expenses and expend time and resources

RISKS RELATED TO OUR CAPITAL STRUCTURE

1. 35The market price of our ordinary shares may decline
2. 36If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our securities adversely, the price and trading volume of our ordinary shares could decline
3. 37We are a holding company. Our sole material asset is our equity interest in our subsidiaries and we are accordingly dependent upon distributions from them to cover our corporate and other overhead expenses
4. 38We may sell additional securities in subsequent public or private offerings. On December 31, 2025, 100,787,173 ordinary shares were outstanding
5. 39Because we currently have no approved plans to pay cash dividends on our ordinary shares, you may not receive any return on investment unless you sell your ordinary shares for a price greater than what you paid for it
6. 40Cybersecurity risks and threats could adversely affect our business
7. 41We depend on our suppliers to provide services and equipment in a timely manner and any delays, interruptions or failures by suppliers could expose us to increased costs or inability to meet contractual obligations
8. 42We rely at times upon services and products supplied by related parties if no other suitable alternatives are available
9. 43The loss or unavailability of any of our executive officers or other key employees could have a material adverse effect on our business
10. 44Our growth potential and ability to operate could be materially and adversely affected if we cannot employ and retain technical personnel at a competitive cost
11. 45We are not subject to the supervision of the Financial Services Commission of the BVI and so our shareholders are not protected by any regulatory inspections in the BVI
12. 46An investment in our securities may result in uncertain U.S. federal income tax consequences
13. 47Substantially all of our assets are located outside the U.S.; therefore, investors may not be able to enforce U.S. federal securities laws or their other legal rights
14. 48Our Memorandum and Articles of Association, as amended and restated, permit the Board of Directors by resolution to create additional classes of securities, including shares with rights, preferences, designations and limitations as they determine which may have an anti-takeover effect