Cactus (WHD) risk factors, FY2024 10-K

Risks Related to the Oilfield Services Industry and Our Business

1. 01Demand for our products and services depends on oil and gas industry activity and customer expenditure levels, which are directly affected by trends in the demand for and price of crude oil and natural gas and availability of capital
2. 02U.S. drilling and completion activity could be adversely affected by any significant constraints in equipment, labor or takeaway capacity in the regions in which we operate
3. 03We may be unable to employ a sufficient number of skilled and qualified workers to sustain or expand our current operations
4. 04Our business is dependent on the continuing services of certain of our key managers and employees
5. 05Political, regulatory, economic and social disruptions in the countries in which we conduct business and globally could adversely affect our business or results of operations
6. 06We are dependent on a relatively small number of customers in a single industry. The loss of an important customer could adversely affect our results of operations and financial condition
7. 07Delays in obtaining, or inability to obtain or renew, permits or authorizations by our customers for their operations could impair our business
8. 08Competition within the oilfield services industry may adversely affect our ability to market our services
9. 09New technology may cause us to become less competitive
10. 10Increased costs, increased transit times, increased tariffs, or lack of availability, of raw materials and other components may result in increased operating expenses and adversely affect our results of operations and cash flows
11. 11We design, manufacture, sell, rent and install equipment that is used in oil and gas E&P activities, which may subject us to liability, including claims for personal injury, property damage and environmental contamination should such equipment fail to perform to specifications
12. 12Our operations are subject to hazards inherent in the oil and natural gas industry, which could expose us to substantial liability and cause us to lose customers and substantial revenue
13. 13Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us
14. 14Our operations require us to comply with various domestic and international regulations, violations of which could have a material adverse effect on our results of operations, financial condition and cash flows
15. 15Compliance with environmental laws and regulations may adversely affect our business and results of operations
16. 16Existing or future laws and regulations related to greenhouse gases and climate change and related public and governmental initiatives and additional compliance obligations could have a material adverse effect on our business, results of operations, prospects, and financial condition
17. 17The global outbreak of COVID-19 had, and similar pandemics in the future may have, an adverse impact on our business and operations
18. 18The ongoing conflicts in various parts of the world may adversely affect our business and results of operations

Risks Related to Our Class A Common Stock

1. 19Cactus WH Enterprises LLC has the ability to direct the voting of a significant percentage of the voting power of our common stock, and its interests may conflict with those of our other shareholders
2. 20Our amended and restated certificate of incorporation and amended and restated bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our Class A common stock
3. 21Future sales of our Class A common stock in the public market, or the perception that such sales may occur, could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us
4. 22We cannot predict the size of future issuances of our Class A common stock or securities convertible into Class A common stock or the effect, if any, that future issuances and sales of shares of our Class A common stock will have on the market price of our Class A common stock
5. 23Cactus Inc. will be required to make payments under the TRA for certain tax benefits that we may claim, and the amounts of such payments could be significant
6. 24In certain cases, payments under the TRA may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRA

Risks Related to the FlexSteel Business

1. 25We may not realize the anticipated benefits from the FlexSteel acquisition, and failure to realize the anticipated benefits could adversely impact our business and our operating results
2. 26We may experience difficulties in integrating the operations of FlexSteel into our business and in realizing the expected benefits of the Merger
3. 27FlexSteel may have liabilities that are not known to us and the indemnities negotiated in the Merger Agreement may not offer adequate protection
4. 28We will not be able to enforce claims with respect to the representations and warranties that the sellers of FlexSteel provided under the Merger Agreement

General Risks

1. 29A failure of our information technology infrastructure and cyberattacks could adversely impact us
2. 30We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could disrupt our business and adversely affect our results of operations
3. 31Our business is subject to complex and evolving laws and regulations regarding privacy and data protection (“data protection laws”)
4. 32Holders of our Class A common stock may not receive dividends on their Class A common stock