Target Hospitality (TH) risk factors, FY2025 10-K

Operational Risks

1. 01Our operations are and will be exposed to operational economic, political and regulatory risks
2. 02We face significant competition as a provider of specialty rental and hospitality services in the specialty rental sector. If we are unable to compete successfully, we could lose customers and our revenue and profitability could decline
3. 03The loss of any one of our largest customers in any of our business segments could adversely affect our results of operations93% rewritten
4. 04As several of these customers are new and operate in emerging or rapidly evolving industries, we may face increased risks related to contract execution, project delays, or changes in customer capital spendingNew
5. 05Our natural resource development customers are exposed to a number of unique operating risks and challenges which could also adversely affect us52% rewritten
6. 06Our business also depends on activity levels in critical mineral development and data center infrastructure industries, and reductions or delays in these projects could adversely affect our results of operationsNew
7. 07We are subject to fluctuations in occupancy levels, and a decrease in occupancy levels could cause a decrease in revenues and profitability
8. 08We may be adversely affected if customers reduce their specialty rental and hospitality services outsourcing23% rewritten
9. 09Expansion into new markets exposes us to operational, regulatory, and execution risksNew
10. 10Our operations could be subject to natural disasters and other business disruptions, which could materially adversely affect our future revenue and financial condition and increase its costs and expenses
11. 11Construction risks exist which may adversely affect our results of operations
12. 12Demand for our products and services is sensitive to changes in demand within a number of key industry end-markets and geographic regions26% rewritten
13. 13Certain of our major communities are located on land subject to leases. If we are unable to renew a lease, we could be materially and adversely affected
14. 14Third parties may fail to provide necessary services and materials for our communities and other sites
15. 15It may become difficult for us to find and retain qualified employees, and failure to do so could impede our ability to execute our business plan and growth strategy
16. 16Significant increases in operating costs, including raw material and labor costs, could increase our operating costs significantly and harm our profitability
17. 17Our future operating results may fluctuate, fail to match past performance, or fail to meet expectations24% rewritten
18. 18We are exposed to various possible claims relating to our business, and our insurance may not fully protect us
19. 19Public health crises such as pandemics and their impact on business and economic conditions and government requirements could adversely affect our business, financial condition or results of operations

Financial Accounting Risks

1. 20If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which would negatively impact our reported operating results24% rewritten
2. 21A failure to maintain food safety or comply with government regulations related to food and beverages may subject us to liability
3. 22We may be unable to recognize deferred tax assets and, as a result, lose future tax savings, which could have a negative impact on our liquidity and financial positionNew
4. 23Unanticipated changes in our tax obligations, the adoption of a new tax legislation, or exposure to additional income tax liabilities could affect profitability
5. 24We are subject to various anti-corruption laws and we may be subject to other liabilities which could have a material adverse effect on our business, results of operations and financial condition
6. 25We may be exposed to certain regulatory and financial risks related to climate change and other environmental laws and regulations
7. 26We may be subject to litigation, judgments, orders or regulatory proceedings that could materially harm our business
8. 27We are subject to evolving public disclosure, financial reporting and corporate governance expectations and regulations that impact compliance costs and risks of noncompliance
9. 28We may not be able to successfully acquire and integrate new operations, which could cause our business to suffer
10. 29Global, national or local economic movements could have a material adverse effect on our business
11. 30Any failure of our management information systems could disrupt our business and result in decreased revenue and increased overhead costs
12. 31Our business could be negatively impacted by security threats, including cybersecurity threats and other disruptions

Risks Related to Our Indebtedness

1. 32Global capital and credit markets conditions could materially adversely affect our ability to access the capital and credit markets or the ability of key counterparties to perform their obligations to it39% rewritten
2. 33As of December 31, 2025, we had $0 of total indebtedness, excluding finance lease obligationsNew
3. 34Restrictions in Arrow Bidco’s existing and future debt agreements could limit our growth and our ability to respond to changing conditions
4. 35Credit rating downgrades could adversely affect our businesses, cash flows, financial condition and operating results

Risks Related to Ownership of Our Common Stock

1. 36Our stock price has been and may continue to be subject to volatility, and this and other factors may affect elements of our capital allocation strategy such as share repurchases, acquisitions and debt reduction
2. 37We have incurred and expect to continue to incur significantly increased costs as a result of operating as a public company, and our management is required to devote substantial time to compliance efforts
3. 38Our principal stockholder has substantial control over our business, which may be disadvantageous to other stockholders