Nine Energy Service (NINE) risk factors, FY2025 10-K

Nine Energy Service's FY2025 10-K, filed Mar 04, 2026, lists 59 risk factors in 8 groups. Against the prior year's 44: 23 new, 8 dropped, 9 substantially reworded.

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Risk factors listed
598 groups
New this year
23vs 44 last year
Dropped
8since the prior 10-K
Substantially reworded
9of those kept
Section length
18k wordsItem 1A

What the changes say

  • Nine Energy Service filed for Chapter 11 bankruptcy, wiping out common stock for zero consideration under a confirmed prepackaged plan.

What changed since the prior 10-K

New

  • NewRisks Related to the Chapter 11 Cases

    During the pendency of the Chapter 11 Cases, trading in our securities (including our common stock) is highly speculative and poses substantial risks, and the Plan contemplates that all shares of our common stock will be canceled for no consideration

    Trading in our common stock is highly speculative, and the Plan contemplates canceling all shares for zero consideration, leading to a complete loss.

  • NewRisks Related to the Chapter 11 Cases

    We are subject to risks and uncertainties attendant to the bankruptcy process

    Operating our business under Chapter 11 bankruptcy exposes us to risks regarding financial condition, liquidity, and maintaining third-party relationships.

  • NewRisks Related to the Chapter 11 Cases

    We cannot predict the amount of time spent in bankruptcy for the purpose of implementing the Plan, and a lengthy bankruptcy proceeding could have a material adverse effect on our business, financial condition, results of operations, and liquidity

    Lengthy bankruptcy proceedings could drain cash reserves for professional fees and distract management from core business operations.

  • NewRisks Related to the Chapter 11 Cases

    Material delays in, or negative events during the pendency of, the Chapter 11 Cases increase the risk of us being unable to reorganize our business and successfully emerge from bankruptcy and also increase our costs associated with the bankruptcy process

    Delays or negative events in Chapter 11 can strain relationships with customers and vendors, impairing normal credit terms and public perception.

  • NewRisks Related to the Chapter 11 Cases

    We may not be able to satisfy the conditions of the Plan or another Chapter 11 plan of reorganization

    The confirmed Plan remains subject to conditions precedent that must be met to become effective on March 5, 2026.

  • NewRisks Related to the Chapter 11 Cases

    If the Restructuring Support Agreement is terminated, our ability to consummate the Plan may be materially adversely affected

    Consenting stakeholders can terminate the Restructuring Support Agreement if milestones are missed, threatening the Plan's consummation.

  • NewRisks Related to the Chapter 11 Cases

    The Plan is based in large part upon assumptions and analyses developed by us. If these assumptions and analyses prove to be incorrect, we may not be able to achieve our stated goals and continue as a going concern

    Financial projections and assumptions underlying the Plan are speculative and may prove incorrect, risking our ability to continue as a going concern.

  • NewRisks Related to the Chapter 11 Cases

    Even if the Plan is consummated, we may not be able to achieve our stated goals and continue as a going concern

    Even post-emergence, prior bankruptcy status may harm our reputation, customer retention, and employee recruitment.

  • NewRisks Related to the Chapter 11 Cases

    Upon our emergence from bankruptcy, the composition of our board of directors (the “Board”) is expected to change

    The composition of our board of directors will change post-emergence, potentially altering our future strategy and plans.

  • NewRisks Related to the Chapter 11 Cases

    The DIP ABL Facility may be insufficient to fund our business operations or may be unavailable to us if we do not comply with certain covenants

    The DIP ABL Facility requires a minimum excess availability of $5.0 million and may be insufficient to fund operations if covenants are breached.

  • NewRisks Related to the Chapter 11 Cases

    We may be subject to claims that will not be discharged in the Chapter 11 Cases, which could have a material adverse effect on our business, cash flows, liquidity, financial condition, and results of operations

    Certain pre-petition claims may not be discharged in Chapter 11, adversely affecting post-reorganization cash flows and financial condition.

  • NewRisks Related to the Chapter 11 Cases

    Changes to our capital structure may have a material adverse effect on existing and future debt and security holders and will adversely impact holders of our common stock

    Our post-bankruptcy capital structure will change significantly, issuing new debt and equity while wiping out existing common stock.

  • NewRisks Related to the Chapter 11 Cases

    The negotiations regarding the Restructuring have consumed and will continue to consume a substantial portion of the time and attention of our management, which may have an adverse effect on our business and results of operations, and we may face increased levels of employee attrition

  • NewRisks Related to the Chapter 11 Cases

    Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict at this time

  • NewRisks Related to the Chapter 11 Cases

    Upon emergence from Chapter 11 bankruptcy, the Reorganized Company will be subject to risks related to its substantial indebtedness

  • NewRisks Related to the Chapter 11 Cases

    Our actual financial results after emergence from bankruptcy may not be comparable to our projections filed with the Bankruptcy Court in the course of the Chapter 11 Cases

  • NewRisks Related to the Chapter 11 Cases

    As a result of the Chapter 11 Cases, our financial results may not reflect historical trends, and our historical financial results may not be indicative of our future financial performance

  • NewRisks Related to the Chapter 11 Cases

    We may experience increased levels of employee attrition as a result of the Chapter 11 Cases

  • NewRisks Related to the Chapter 11 Cases

    Our ability to use net operating loss carryforwards (“NOLs”) may become subject to limitation, or may be reduced or eliminated, in connection with the implementation of the Plan. The Bankruptcy Court has entered an order that is designed to protect our NOLs until the Plan is consummated

  • NewRisks Related to the Chapter 11 Cases

    We will be required to reduce certain of our tax attributes due to the exclusion of cancellation of indebtedness (“COD”) income from gross income upon emergence from Chapter 11

  • NewOperational Risks

    Defects or other performance problems in the products that we sell or services that we offer could result in our

  • NewRegulatory, Compliance, and Legal Risks

    In recent years, oilfield services companies have been the subject of a significant volume of wage and hour-related litigation, including claims brought under the Fair Labor Standards Act, in which employee pay practices have been challenged

  • NewRegulatory, Compliance, and Legal Risks

    increased enforcement by the EPA, which will continue to regulate our industry in the years to come, potentially resulting in additional regulations that could have a material adverse impact on our business, prospects, or financial condition

Dropped

  • DroppedRisks Related to Our Industry

    appropriately or quickly enough to growing concern for ESG and sustainability issues, regardless of whether there is a regulatory or legal requirement to do so, we may suffer from reputational damage and our business, financial condition and/or stock price could be materially and adversely affected

  • DroppedRisks Related to Our Indebtedness

    Our substantial debt obligations could have significant adverse consequences on our business and future prospects

  • DroppedRisks Related to Our Indebtedness

    We may not be able to generate sufficient cash to service all of our indebtedness

  • DroppedRisks Related to Our Indebtedness

    business or the economy in general, or to otherwise conduct necessary corporate activities. We may also be prevented from taking advantage of business opportunities that arise because of the limitations that the restrictive covenants under our debt arrangements may impose on us

  • DroppedRisks Related to Technology

    equipment could make our equipment less competitive or require significant capital investments to keep our equipment competitive

  • DroppedOther Material Risks

    We do not intend to pay dividends on our common stock, and our debt agreements place restrictions on our ability to do so. Consequently, a stockholder’s only opportunity to achieve a return on his investment is if the price of our common stock appreciates

    Risks regarding ESG and sustainability compliance and reporting.

  • DroppedOther Material Risks

    The market price of our common stock could be adversely affected by, and our stockholders may experience dilution as a result of, sales of substantial amounts of common stock in the public or private markets, including sales by the Company or other large holders

    Substantial debt obligations including $300.0 million of 2028 Notes.

  • DroppedOther Material Risks

    As of December 31, 2024, we had federal and state income tax NOLs of approximately $498.7 million, which will

    Inability to generate sufficient cash to service all indebtedness.

Reworded

  • 85% rewrittenRisks Related to Our Industry

    Increased scrutiny of sustainability matters could have an adverse effect on our business and damage our reputation

    Updated to clarify potential reputational and stock price damage from ESG scrutiny regardless of legal requirements.

  • 84% rewrittenOther Material Risks

    A portion of our revenue is derived from sales to customers outside of the U.S., which exposes us to risks inherent in doing business internationally

    Updated international revenue percentage from 4.6% in 2024 to 5.2% in 2025.

  • 81% rewrittenRegulatory, Compliance, and Legal Risks

    If we do not perform our operations in accordance with government, industry, customer, or our own stringent occupational safety, health, and environmental standards, we could lose business from our customers, many of whom have an increased focus on environmental and safety issues

    Truncated the discussion regarding EPA Tier 4 emission standards and increased enforcement.

  • 71% rewrittenOperational Risks

    Our operations are subject to conditions inherent in the oilfield services industry

    Retained the identical list of oilfield services operational hazards.

  • 70% rewrittenRisks Related to Technology

    Our success may be affected by our ability to implement new technologies and services

    Added explicit reference to competitor equipment improvements potentially requiring significant capital investments.

  • 42% rewrittenRisks Related to the Chapter 11 Cases

    Restrictions in the Exit ABL Facility could limit our growth and our ability to engage in certain activities

    Shifted focus from historical ABL Credit Facility and 2028 Notes to future restrictions under the Exit ABL Facility.

    Was: Restrictions in our debt agreements could limit our growth and our ability to engage in certain activities

  • 30% rewrittenRisks Related to Technology

    We may be adversely affected by disputes regarding intellectual property rights, and the value of our intellectual property rights is uncertain

    Removed mention of pending appeal regarding the BreakThru Casing Flotation Device patent litigation verdict.

  • 30% rewrittenOther Material Risks

    Our charter and bylaws contain provisions that could delay, discourage, or prevent a takeover attempt even if a takeover might be beneficial to our stockholders, and such provisions may adversely affect the market price of our common stock

    Capitalized references to 'Board' instead of board of directors.

  • 28% rewrittenRegulatory, Compliance, and Legal Risks

    We may be subject to claims for personal injury and property damage or other litigation, which could materially adversely affect our financial condition, prospects, and results of operations

All 59 risk factors

Headings as the filing states them, in filing order.

Risks Related to the Chapter 11 Cases

  1. 01During the pendency of the Chapter 11 Cases, trading in our securities (including our common stock) is highly speculative and poses substantial risks, and the Plan contemplates that all shares of our common stock will be canceled for no considerationNew
  2. 02We are subject to risks and uncertainties attendant to the bankruptcy processNew
  3. 03We cannot predict the amount of time spent in bankruptcy for the purpose of implementing the Plan, and a lengthy bankruptcy proceeding could have a material adverse effect on our business, financial condition, results of operations, and liquidityNew
  4. 04Material delays in, or negative events during the pendency of, the Chapter 11 Cases increase the risk of us being unable to reorganize our business and successfully emerge from bankruptcy and also increase our costs associated with the bankruptcy processNew
  5. 05We may not be able to satisfy the conditions of the Plan or another Chapter 11 plan of reorganizationNew
  6. 06If the Restructuring Support Agreement is terminated, our ability to consummate the Plan may be materially adversely affectedNew
  7. 07The Plan is based in large part upon assumptions and analyses developed by us. If these assumptions and analyses prove to be incorrect, we may not be able to achieve our stated goals and continue as a going concernNew
  8. 08Even if the Plan is consummated, we may not be able to achieve our stated goals and continue as a going concernNew
  9. 09Upon our emergence from bankruptcy, the composition of our board of directors (the “Board”) is expected to changeNew
  10. 10The DIP ABL Facility may be insufficient to fund our business operations or may be unavailable to us if we do not comply with certain covenantsNew
  11. 11We may be subject to claims that will not be discharged in the Chapter 11 Cases, which could have a material adverse effect on our business, cash flows, liquidity, financial condition, and results of operationsNew
  12. 12Changes to our capital structure may have a material adverse effect on existing and future debt and security holders and will adversely impact holders of our common stockNew
  13. 13The negotiations regarding the Restructuring have consumed and will continue to consume a substantial portion of the time and attention of our management, which may have an adverse effect on our business and results of operations, and we may face increased levels of employee attritionNew
  14. 14Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict at this timeNew
  15. 15Upon emergence from Chapter 11 bankruptcy, the Reorganized Company will be subject to risks related to its substantial indebtednessNew
  16. 16Restrictions in the Exit ABL Facility could limit our growth and our ability to engage in certain activities42% rewritten
  17. 17Our actual financial results after emergence from bankruptcy may not be comparable to our projections filed with the Bankruptcy Court in the course of the Chapter 11 CasesNew
  18. 18As a result of the Chapter 11 Cases, our financial results may not reflect historical trends, and our historical financial results may not be indicative of our future financial performanceNew
  19. 19We may experience increased levels of employee attrition as a result of the Chapter 11 CasesNew
  20. 20Our ability to use net operating loss carryforwards (“NOLs”) may become subject to limitation, or may be reduced or eliminated, in connection with the implementation of the Plan. The Bankruptcy Court has entered an order that is designed to protect our NOLs until the Plan is consummatedNew
  21. 21We will be required to reduce certain of our tax attributes due to the exclusion of cancellation of indebtedness (“COD”) income from gross income upon emergence from Chapter 11New

Risks Related to Our Industry

  1. 22Our business is cyclical and depends on capital spending and well completions by the onshore oil and natural gas industry, and the level of such activity is volatile. Our business has been, and may continue to be, adversely affected by industry and financial market conditions that are beyond our control
  2. 23A decline in oil and natural gas commodity prices may adversely affect the demand for our products and services and the rates we are able to charge
  3. 24Our business could be adversely affected by a decline in general economic conditions or a weakening of the broader energy industry, and inflation may adversely affect our financial position and operating results
  4. 25Negative public perception of the oil and gas industry could adversely affect our operations and our ability to raise debt and equity capital
  5. 26Increased scrutiny of sustainability matters could have an adverse effect on our business and damage our reputation85% rewritten
  6. 27We may be unable to maintain existing prices or implement price increases on our products and services
  7. 28The completion services industry is intensely competitive. We compete with major domestic and international oilfield services companies, many of which have greater market recognition and substantially greater financial, technical, marketing, distribution, and other resources than we do
  8. 29Our current and potential competitors may have longer operating histories, significantly greater financial or technical resources, and greater name recognition than we do

Operational Risks

  1. 30Our operations are subject to conditions inherent in the oilfield services industry71% rewritten
  2. 31Defects or other performance problems in the products that we sell or services that we offer could result in ourNew
  3. 32Our assets require capital for maintenance, upgrades, and refurbishment, and we may require capital expenditures for new equipment
  4. 33Seasonal and adverse weather conditions and the physical risks arising from climate change may have a negative impact on our business and result of operations, including by impacting operations, increasing costs, and adversely affecting demand for our products and services

Risks Related to Our Customers and Suppliers

  1. 34We are exposed to the credit risk of our customers, and the deterioration of the financial condition of our customers could adversely affect our financial results
  2. 35We are dependent on customers in a single industry. The loss of one or more significant customers could adversely affect our financial condition, prospects, and results of operations
  3. 36Certain of our product lines are subject to the risk of supplier concentration, and certain of our product lines are subject to exclusive distribution arrangements, which we may not be able to maintain
  4. 37Tariffs and other trade measures could adversely affect our business, results of operations, financial position, and cash flows

Regulatory, Compliance, and Legal Risks

  1. 38Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us
  2. 39We may be subject to claims for personal injury and property damage or other litigation, which could materially adversely affect our financial condition, prospects, and results of operations28% rewritten
  3. 40In recent years, oilfield services companies have been the subject of a significant volume of wage and hour-related litigation, including claims brought under the Fair Labor Standards Act, in which employee pay practices have been challengedNew
  4. 41Delays or restrictions in obtaining, or inability to obtain or renew, permits or authorizations by our customers for their operations or by us for our operations could impair our business
  5. 42If we do not perform our operations in accordance with government, industry, customer, or our own stringent occupational safety, health, and environmental standards, we could lose business from our customers, many of whom have an increased focus on environmental and safety issues81% rewritten
  6. 43increased enforcement by the EPA, which will continue to regulate our industry in the years to come, potentially resulting in additional regulations that could have a material adverse impact on our business, prospects, or financial conditionNew
  7. 44Federal, state, and local legislative and regulatory initiatives relating to hydraulic fracturing could prohibit, restrict, or limit hydraulic fracturing operations, or increase our operating costs
  8. 45Studies by either state or federal agencies demonstrating a correlation between earthquakes and oil and natural gas activities could result in increased regulatory and operational burdens
  9. 46We are subject to complex U.S. and foreign laws and regulations governing anti-corruption and export controls and economic sanctions
  10. 47Changes in transportation regulations may increase our costs and negatively impact our results of operations

Risks Related to Technology

  1. 48Our success may be affected by the use and protection of our proprietary technology as well as our ability to enter into license agreements. There are limitations to our intellectual property rights and, thus, our right to exclude others from the use of our proprietary technology
  2. 49We may be adversely affected by disputes regarding intellectual property rights, and the value of our intellectual property rights is uncertain30% rewritten
  3. 50Our success may be affected by our ability to implement new technologies and services70% rewritten
  4. 51We rely on a limited number of manufacturers to produce the proprietary products used in the provision of our services, which exposes us to risks
  5. 52Our operations are subject to cybersecurity risks that could have a material adverse effect on our results of operations and financial condition

Risks Related to Human Capital

  1. 53Our executive officers and certain key personnel are critical to our business, and these officers and key personnel may not remain with us in the future
  2. 54We may be unable to employ, or maintain the employment of, a sufficient number of key employees, technical personnel, and other skilled and qualified workers

Other Material Risks

  1. 55We have operated at a loss in the past, and there is no assurance of our profitability in the future
  2. 56Our future financial condition and results of operations could be adversely impacted by long-lived assets or other asset impairment charges
  3. 57A terrorist attack or armed conflict could harm our business
  4. 58A portion of our revenue is derived from sales to customers outside of the U.S., which exposes us to risks inherent in doing business internationally84% rewritten
  5. 59Our charter and bylaws contain provisions that could delay, discourage, or prevent a takeover attempt even if a takeover might be beneficial to our stockholders, and such provisions may adversely affect the market price of our common stock30% rewritten

Other Nine Energy Service 10-Ks

  • FY2024 10-K risk factors
    44 risks

    Nine Energy Service faces significant cyclicality, commodity price volatility, and heavy dependence on onshore oil and gas completion activity. The company carries substantial debt, including $300.0 million in senior notes and an ABL credit facility. Operations are exposed to stringent environmental regulations, hydraulic fracturing restrictions, intense competition, and customer concentration risks.

    Filed Mar 06, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.