What changed in this filing

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Item 1A. Risk Factors

2026-03-05 compared with 2025-03-04 · 171 added, 184 removed, 239 unchanged (60% of the section changed)

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Insurance may not be available to cover any or all of the risks to which we are subject, or, even if available, it may be inadequate, or insurance premiums or other costs could rise significantly in the future so as to make such insurance prohibitively expensive.

Seasonal weather conditions, climate change, severe weather events and natural disasters could severely disrupt normal operations and harm our business.

Our operations are located in different regions of the United States.

Some of these areas, including the Denver‑Julesburg Basin and the Bakken Shale, are adversely affected by seasonal weather conditions.

During periods of heavy snow, ice, wind or rain, we may be unable to move our equipment between locations, thereby reducing our ability to provide services and generate revenue, or we could suffer weather‑related damage to our facilities and equipment, resulting in delays in operations.

The E&P activities of our customers may also be affected during such periods of adverse weather conditions.

Additionally, extended drought conditions in our operating regions could impact our ability or our customers’ ability to source sufficient water or increase the cost for such water.

As a result, a natural disaster, severe weather event, or

inclement weather conditions could severely disrupt the normal operation of our business and adversely impact our financial condition and results of operations.

Moreover, climate change may result in various physical risks, such as the increased frequency or intensity of extreme weather events or changes in meteorological and hydrological patterns that could adversely impact our customers’ and our suppliers’ operations.

Such physical risks may result in damage to our customers’ facilities or otherwise adversely impact our operations, such as if facilities are subject to water use curtailments in response to drought, or demand for our customers’ products, such as to the extent warmer winters reduce the demand for energy for heating purposes, which may ultimately reduce demand for the products and services we provide.

Such physical risks may also impact our suppliers, which may adversely affect our ability to provide our products and services.

Extreme weather conditions can interfere with our operations and increase our costs, and damage resulting from extreme weather may not be fully insured.

Our business could be harmed by geographical and terrorist threats, armed conflicts or civil unrest.

The occurrence or threat of geographical or terrorist threats in the United States or other countries, anti-terrorist efforts and other armed conflicts involving the United States or other countries, including continued hostilities in the Middle East, Russia, or domestic civil unrest, may adversely affect the United States and global economies and could prevent us from meeting our financial and other obligations.

For example, on February 24, 2022, Russia launched a large-scale invasion of Ukraine that has led to significant armed hostilities.

As a result, the United States, the United Kingdom, the member states of the European Union and other public and private actors have levied severe sanctions on Russia.

The geopolitical and macroeconomic consequences of this invasion and associated sanctions cannot be predicted, and such events could severely impact the world economy.

If other current hostilities around the globe continue or escalate, or any other such events occur, the resulting political instability and societal disruption could reduce overall demand for oil and natural gas, potentially putting downward pressure on demand for our services and causing a reduction in our revenue.

Oil and natural gas‑related facilities could be direct targets of terrorist attacks, and our operations could be adversely impacted if infrastructure integral to our customers’ operations is destroyed or damaged.

Costs for insurance and other security may increase as a result of these threats, and some insurance coverage may become more difficult to obtain, if available at all.

Industry and Economic Conditions and Competition

A substantial portion of our operations is concentrated in the Permian Basin, which exposes us to regional risks.

A significant portion of our High Specification Rig operations and related services is concentrated in the Permian Basin.

As a result, our operating results are particularly sensitive to conditions affecting this geographic region.

Regional factors that may disproportionately impact us include:

• changes in drilling and completion activity specific to the Permian Basin;

• regional oil and natural gas pricing differentials;

• constraints in takeaway capacity or midstream infrastructure;

• water sourcing or disposal limitations;

• state regulatory developments in Texas or New Mexico;

• regional labor shortages or wage inflation;

• severe weather events affecting the region.

Any sustained downturn in activity levels, infrastructure constraints, adverse regulatory developments or other conditions specific to the Permian Basin could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

Industry, Economic Conditions and Competitive Risks

Our business depends on domestic capital spending by the oil and natural gas industry, and reductions in such capital spending could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

Our business is directly affected by our customers’ capital spending to explore for, develop and produce oil and natural gas in the United States.

Our business is directly affected by our customers’ capital spending to explore for, develop and produce oil and natural gas in the U.S.

A significant decline in oil and natural gas prices may cause a reduction in the exploration, development and production activities of most of our customers and their spending on our services.

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• political and economic conditions in oil and natural gas producing countries;

• actions by the members of the Organization of Petroleum Exporting Countries (“OPEC”) and other countries, such as Russia and Saudi Arabia, with respect to oil production levels and announcements of potential changes in such levels, including the failure of such countries to comply with production cuts;

• actions by the members of the Organization of Petroleum Exporting Countries (“OPEC”) and other countries, such as Russia, Saudi Arabia and Venezuela, with respect to oil production levels and announcements of potential changes in such levels, including the failure of such countries to comply with production cuts;

• sanctions and other restrictions placed on oil producing countries, such as Iran and Venezuela;

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• uncertainty in capital and commodities markets.

Our business could be adversely affected by general economic conditions or a weakening of the broader energy industry, and inflation or recession may adversely affect our financial position and operating results.

A prolonged economic slowdown or recession, adverse events relating to the energy industry, or regional, national, or global economic conditions and factors, particularly a slowdown in the E&P industry, could negatively impact our operations and therefore adversely affect our results.

The risks associated with our business are more acute during periods of economic slowdown or recession because such periods may be accompanied by decreased spending by our customers and decreased demand and prices for oil and natural gas.

Inflationary factors, such as increases in labor costs, material costs, and overhead costs, may also adversely affect our financial position and operating results.

Reduced customer spending could curtail drilling programs and reduce demand for our services.

Any of these conditions could adversely affect our financial position and operating results.

The volatility of oil and natural gas prices may adversely affect the demand for our services and negatively impact our results of operations.

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Additionally, the increased competitiveness of alternative energy sources (such as wind, solar, geothermal, tidal, and biofuels) could reduce demand for hydrocarbons and therefore for our services, which would lead to a reduction in our revenue.

We face intense competition that may cause us to lose market share and could negatively affect our ability to market our services and expand our operations.

The oilfield services business is highly competitive and fragmented.

Some of our competitors are small companies capable of competing effectively in our markets on a local basis, while others have a broader geographic scope, greater financial and other resources, or other cost efficiencies.

Our competitors may be able to respond more quickly to new or emerging technologies and services and changes in customer requirements.

Our ability to maintain current revenue and cash flows, and our ability to market our services and expand our operations, could be adversely affected by the activities of our competitors and our customers.

If our competitors substantially increase the resources they devote to the development and marketing of competitive services or substantially decrease the prices at which they offer their services, we may be unable to effectively compete.

Many contracts are awarded on a bid basis, which may further increase competition based primarily on price.

The competitive environment may be further intensified by mergers and acquisitions among oil and natural gas companies or other events that have the effect of reducing the number of available customers.

All of these competitive pressures could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

Some of our larger competitors provide a broader range of services on a regional, national or worldwide basis.

These companies may have a greater ability to continue oilfield service activities during periods of low commodity prices and to absorb the burden of present and future federal, state, local and other laws and regulations.

Any inability to compete effectively could have a material adverse impact on our financial condition and results of operations.

Our customers may be forced to curtail or shut in production due to insufficient transportation and storage capacity.

The marketing of oil, natural gas and NGLs depends in large part on the availability, proximity and capacity of trucks, pipelines and storage facilities, gas gathering systems and other transportation, processing and refining facilities, as well as the existence of adequate markets.

Reduced demand for oil and natural gas and/or oversupply of oil and natural gas in the market may limit or fill available storage and transportation capacity for our customers’ production.

If there is insufficient capacity available on these systems, if these systems are unavailable to our customers, or if these systems are unavailable to our customers on commercially reasonable terms, the prices our customers receive for their production could be significantly depressed.

As a result of any further storage and/or transportation shortages, our customers could be forced to shut in some or all of their production or delay or discontinue drilling plans and commercial production following a discovery of hydrocarbons while they construct or purchase their own facilities or system.

If our customers are forced to shut in production, it would result in decreased demand for our services and lower utilization of our assets.

Seasonal weather conditions, climate change, severe weather events and natural disasters could disrupt our operations.

Our operations are located in different regions of the U.S.

Some of these areas, including the Denver‑Julesburg Basin and the Bakken Shale, are adversely affected by seasonal weather conditions.

The E&P activities of our customers may also be affected during such periods of adverse weather conditions.

Additionally, extended drought conditions in our operating regions could impact our ability or our customers’ ability to source sufficient water or increase the cost for such water.

As a result, a natural disaster, severe weather event, or inclement weather conditions could severely disrupt the normal operation of our business and adversely impact our financial condition and results of operations.

Such physical risks may also impact our suppliers, which may

adversely affect our ability to provide our products and services.

Extreme weather conditions can interfere with our operations and increase our costs, and damage resulting from extreme weather may not be fully insured.

Our business could be harmed by geographical and terrorist threats, armed conflicts or civil unrest.

The occurrence or threat of geographical or terrorist threats in the U.S.

or other countries, anti-terrorist efforts and other armed conflicts involving the U.S.

or other countries, including continued hostilities in the Middle East, Russia, or domestic civil unrest, may adversely affect the U.S.

and global economies and could prevent us from meeting our financial and other obligations.

For example, on February 24, 2022, Russia launched a large-scale invasion of Ukraine that has led to significant armed hostilities.

As a result, the U.S., the United Kingdom, the member states of the European Union and other public and private actors have levied severe sanctions on Russia.

The geopolitical and macroeconomic consequences of this invasion and associated sanctions cannot be predicted, and such events could severely impact the world economy.

Costs for insurance and other security may increase as a result of these threats, and some insurance coverage may become more difficult to obtain, if available at all.

Growth, Integration and Execution Risks

We may incur significant capital expenditures for new equipment as we grow our operations and may be required to incur further capital expenditures as a result of environmental initiatives, new regulatory requirements, and advancements in oilfield services technologies.

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In addition, because the oilfield services industry is characterized by significant technological advancements and introductions of new products and services using new technologies, we may lose market share or be placed at a competitive disadvantage as competitors and others use or develop new technologies or technologies comparable to ours in the future.

Further, we may choose to implement or acquire certain new technologies at a substantial cost to support environmental

initiatives, respond to competitive pressure, meet new regulatory requirements, or satisfy customer requirements.

Further, we may choose to implement or acquire certain new technologies at a substantial cost to support environmental initiatives, respond to competitive pressure, meet new regulatory requirements, or satisfy customer requirements.

Some of our competitors may have greater financial, technical and personnel resources than we do, which may allow them to gain technological advantages or implement new technologies before we can.

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The failure to continue to upgrade our technical, administrative, operating and financial control systems or the occurrences of unexpected expansion difficulties, including the failure to recruit and retain experienced managers, engineers and other professionals in the oilfield services industry, could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects and our ability to successfully or timely execute our business plan.

We face intense competition that may cause us to lose market share and could negatively affect our ability to market our services and expand our operations.

The oilfield services business is highly competitive and fragmented.

Our competitors may be able to respond more quickly to new or emerging technologies and services and changes in customer requirements.

Many contracts are awarded on a bid basis, which may further increase competition based primarily on price.

All of these competitive pressures could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

Some of our larger competitors provide a broader range of services on a regional, national or worldwide basis.

Any inability to compete effectively could have a material adverse impact on our financial condition and results of operations.

Increasing competition for workers, as well as labor shortages, could adversely affect our business.

A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, increased competition for employees both within the oilfield service industry and the larger labor market, federal unemployment subsidies and government regulations.

Although we have not experienced any material labor shortages to date, we have observed an increasingly competitive labor market.

The increasing competition for employees could result in higher compensation costs and difficulties in maintaining a capable workforce to operate our equipment.

If we are unable to hire and retain employees, or if mitigation measures we may take to respond to a decrease in labor availability have unintended negative effects, our business could be adversely affected.

A sustained labor shortage, lack of skilled labor force, increased turnover, or labor cost inflation, as a result of general macroeconomic and other factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, which could negatively affect our ability to efficiently staff and operate our equipment, deploy additional assets to meet customer demand, and have other adverse effects on our results of operations and financial condition.

Customers and Employees

The growth of our business through potential future acquisitions or mergers may expose us to various risks, including those relating to difficulties in integrating businesses, assets and personnel, as well as difficulties in obtaining financing for targeted acquisitions and the potential for increased leverage or debt service requirements.

We will continue to pursue selected, accretive acquisitions of complementary assets and businesses.

Acquisitions and mergers involve numerous risks, including:

• unanticipated costs and exposure to liabilities assumed in connection with the acquired business or assets, including, but not limited to, environmental liabilities;

• difficulties in integrating the operations and assets of the acquired business and the acquired personnel;

• limitations on our ability to properly assess and maintain an effective internal control environment over an acquired business;

• potential losses of key employees and customers of the acquired business;

• risks of entering markets in which we have limited prior experience;

• increases in our expenses and working capital requirements.

Our ability to achieve the anticipated benefits of any acquisition will depend, in part, upon whether we can integrate the acquired or merged business and/or assets into our existing business in an efficient and effective manner.

The process of integrating an acquired or merged business, may involve unforeseen costs and delays or other operational, technical and financial difficulties and may require a significant amount of time and resources.

Our failure to incorporate the acquired or merged business and assets into our existing operations successfully or to minimize any unforeseen operational difficulties could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

Further, any acquisition may involve other risks that may cause our business to suffer, including:

• diversion of our management’s attention to evaluating, negotiating for and integrating acquired assets;

• the challenge and cost of integrating acquired assets with those of ours while carrying on our ongoing business;

• the failure to realize the full benefits anticipated from the acquisition or to realize these benefits within our expected time frame.

Because the historical utilization rates of any acquired assets may be lower than ours in recent periods, our utilization could decrease during the course of an initial integration period.

Accordingly, there can be no assurance the utilization for acquired assets will align with the utilization of our existing fleet or on our anticipated timeline or at all.

Furthermore, there is intense competition for acquisition opportunities in our industry.

Competition for acquisitions may increase the cost of, or cause us to refrain from, completing acquisitions.

In addition, we may not have sufficient capital resources to complete any additional acquisitions.

We may incur substantial indebtedness to finance future acquisitions and also may issue equity, debt or convertible securities in connection with such acquisitions.

Debt service requirements could represent a significant burden on our results of operations and financial condition, and the issuance of additional equity or convertible securities could be dilutive to our existing stockholders.

Furthermore, we may not be able to obtain additional financing as needed or on satisfactory terms.

Our ability to continue to grow through acquisitions or mergers and manage growth will require us to continue to invest in operational, financial and management information systems and to attract, retain, motivate and effectively manage our employees.

The inability to effectively manage the integration of acquisitions could reduce our focus on current operations, which, in turn, could negatively impact our earnings and growth.

Our financial position and results of operations may fluctuate significantly from period to period, based on whether or not significant acquisitions are completed in particular periods.

Customer Concentrations and Commercial Risks

Reliance upon a few large customers may adversely affect our revenue and operating results.

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During times when the natural gas or crude oil markets weaken, our customers are more likely to experience financial difficulties, including being unable to access debt or equity financing, which could result in a reduction in our customers’ spending for our services and their non‑payment or inability to perform obligations owed to us.

Further, if a customer was to enter into bankruptcy, it could also result in the cancellation of all or a portion of our service contracts with such customer at significant expense or loss of expected revenue to us.

Further, if a customer was to enter into bankruptcy, it could also result in the cancellation of all or a portion of our service contracts with

such customer at significant expense or loss of expected revenue to us.

If we were to lose any material customer, we may not be able to redeploy our equipment at similar utilization or pricing levels or within a short period of time and such loss could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects until the equipment is redeployed at similar utilization or pricing levels.

It is likely that we will continue to derive a significant portion of our revenue from a relatively small number of customers in the future.

During the year ended December 31, 2024, four customers accounted for approximately 22%, 13%, 13% and 11%, respectively, each of our consolidated revenues.

During the year ended December 31, 2025, three customers accounted for approximately 30%, 18%, and 11%, respectively, each of our consolidated revenue.

The table below presents the percentage of revenue, for each respective segment, from our top five customers for the years ended December 31, 2025 and 2024.

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Consolidated 73 % 65 %

Our customers may be forced to curtail or shut in production due to a lack of storage capacity.

Reduced demand for oil and natural gas and/or oversupply of oil and natural gas in the market may limit or fill available storage and transportation capacity for our customers’ production.

If our customers are forced to shut in production, it would result in decreased demand for our services and lower utilization of our assets.

Workforce, Safety, and Operational Hazards

Increasing competition for workers, as well as labor shortages, could adversely affect our business.

Although we have not experienced any material labor shortages to date, we have observed an increasingly competitive labor market.

The increasing competition for employees could result in higher compensation costs and difficulties in maintaining a capable workforce to operate our equipment.

Unsatisfactory safety performance may negatively affect our current and future customer relationships and, to the extent we fail to retain existing customers or attract new customers, adversely impact our revenue.

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However, we may have liability in such cases if we are negligent or commit willful acts.

Our customers generally agree to indemnify and defend us against claims relating to damage or loss of a well, reservoir, geological formation, underground strata, or water resources, or the loss of oil, gas, mineral, or water, but sometimes such indemnity and defense is subject to exceptions for claims for gross negligence or willful misconduct, or our assumption of capped liability.

Our customers generally agree to indemnify and defend us

against claims relating to damage or loss of a well, reservoir, geological formation, underground strata, or water resources, or the loss of oil, gas, mineral, or water, but sometimes such indemnity and defense is subject to exceptions for claims for gross negligence or willful misconduct, or our assumption of capped liability.

Our customers also generally assume responsibility for claims arising from their employees’ personal injury or death, or the damage or loss of their property, to the extent that, in the case of our operations, their employees are injured or their properties are damaged by such operations, but sometimes such indemnity and defense is subject to exceptions for claims, resulting from our gross negligence or willful misconduct.

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As a result, we may incur substantial losses which could materially and adversely affect our financial condition and results of operation.

Regulatory and Environmental Risks

We provide services to customers who operate on federal and tribal lands, which are subject to additional regulations.

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Depending on the ultimate outcome of any agency reviews and pending litigation, these regulations could result in increased compliance costs or additional operating restrictions for us and our customers, and could have a material adverse effect on our business, liquidity position, cash flows, financial condition, results of operations, prospects and demand for our services.

Governmental and Regulatory Matters

Increases in the scope or pace of midstream infrastructure development, or decreased federal or state regulation of natural gas pipelines, could decrease demand for our services.

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In addition, there has recently been increasing public controversy regarding construction of new natural gas pipelines and the stringency of current regulation of natural gas pipelines, creating uncertainty as to the probability and timing of such construction.

Decreases to the stringency of regulation of existing natural gas pipelines at either the state or federal level

could reduce the demand for our services and could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

Decreases to the stringency of regulation of existing natural gas pipelines at either the state or federal level could reduce the demand for our services and could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

Delays or restrictions in obtaining permits by us for our operations or by our customers for their operations could impair our business.

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In addition, some of our customers’ drilling and completion activities may take place on federal land or Native American lands, requiring leases and other approvals from the federal government or Native American tribes to conduct such drilling and completion activities or other regulated activities.

Under certain circumstances, federal agencies may cancel proposed leases for federal lands and refuse to grant or delay required approvals.

Therefore, our customers’ operations in certain areas of the United States may be interrupted or suspended for varying lengths of time, causing a loss of revenue to us and adversely affecting our results of operations in support of those customers.

Under certain circumstances, federal agencies may cancel proposed leases for federal lands and

refuse to grant or delay required approvals.

Therefore, our customers’ operations in certain areas of the U.S.

may be interrupted or suspended for varying lengths of time, causing a loss of revenue to us and adversely affecting our results of operations in support of those customers.

Federal or state legislative and regulatory initiatives related to induced seismicity could result in operating restrictions or delays in the drilling and completion of oil and natural gas wells that may reduce demand for our services and could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

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We are subject to environmental and occupational health and safety laws and regulations that may expose us to significant costs and liabilities.

Our operations are subject to numerous federal, regional, state and local laws and regulations relating to protection of natural resources and the environment, occupational health and safety, air emissions and water discharges, and the management, transportation and disposal of solid and hazardous wastes and other materials.

These laws and regulations impose numerous obligations that may impact our operations, including the acquisition of permits to conduct regulated activities, the imposition of restrictions on the types, quantities and concentrations of various substances that can be released into the environment or injected in formations in connection with oil and natural gas drilling and production activities, the incurrence of capital expenditures to mitigate or prevent releases of materials from our equipment, facilities or from customer locations where we are providing services, the imposition of substantial liabilities for pollution resulting from our operations, and the application of specific health and safety standards or criteria addressing worker protection.

Our operations are subject to numerous federal, regional, state and local laws and regulations relating to environmental protection, occupational health and safety, air emissions and water discharges, and the management, transportation and disposal of solid and hazardous wastes and other materials.

These laws and regulations impose obligations that may impact our operations, including the acquisition of permits to conduct regulated activities, the imposition of restrictions on the types, quantities and concentrations of various substances that can be released into the environment or injected in formations in connection with oil and natural gas drilling and production activities, the incurrence of capital expenditures to mitigate or prevent releases of materials from our equipment, facilities or from customer locations where we are providing services, the imposition of substantial liabilities for pollution resulting from our operations, and the application of specific health and safety standards or criteria addressing worker protection.

Any failure on our part or the part of our customers to comply with these laws and regulations could result in prohibitions or restrictions on operations, assessment of sanctions including administrative, civil and criminal penalties, issuance of corrective action orders requiring the performance of investigatory, remedial or curative activities or enjoining performance of some or all of our operations in a particular area, the occurrence of delays in the permitting or performance of projects and/or government or private claims for personal injury or property or natural resources damages.

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Some environmental laws and regulations may impose strict liability, which means that in some situations we could be exposed to liability even if our conduct was lawful at the time it occurred or the alleged damages resulted from the conduct of, or conditions caused by, prior operators or other third parties.

enforcement policies that result in more stringent and costly regulatory requirements could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects if we are unable to pass on such increased compliance costs to our customers.

The trend in environmental regulation has been to place more restrictions and limitations on activities that may adversely affect the environment, and thus any changes in environmental laws and regulations or reinterpretation of enforcement policies that result in more stringent and costly regulatory requirements could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects if we are unable to pass on such increased compliance costs to our customers.

Our customers may also incur increased costs or delays or restrictions in permitting or operating activities as a result of more stringent environmental laws and regulations, which may result in a curtailment of exploration, development or production activities that would reduce the demand for our services.

Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays as well as adversely affect demand for our support services.

Hydraulic fracturing is an important and common practice that is used to stimulate production of natural gas and/or oil from dense subsurface rock formations.

The hydraulic fracturing process involves the injection of water, sand and chemicals under pressure into the formation to fracture the surrounding rock and stimulate production.

While we do not perform hydraulic fracturing, many of our customers do.

Although we do not perform hydraulic fracturing, many of our customers rely on this practice.

Hydraulic fracturing typically is regulated by state oil and natural gas commissions, but the EPA has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act over certain hydraulic fracturing activities involving the use of diesel fuel and issued permitting guidance that applies to such activities.

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The adoption and implementation of any new laws or regulations that restrict our customers’ ability to dispose of produced water could result in increased operating costs for the customer, which in turn could indirectly reduce demand for our services.

Local governments also may seek to adopt ordinances within their jurisdictions regulating the time, place and manner of drilling activities in general or hydraulic fracturing activities in particular or prohibit the performance of well drilling in general or hydraulic fracturing in particular.

Local governments also may seek to adopt ordinances within their jurisdictions regulating the time, place and manner of drilling activities in general or

hydraulic fracturing activities in particular or prohibit the performance of well drilling in general or hydraulic fracturing in particular.

If new federal, state or local laws or regulations that significantly restrict hydraulic fracturing are adopted, such legal requirements could result in delays, eliminate certain drilling and injection activities and make it more difficult or costly to perform hydraulic fracturing.

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Our operations, and those of our customers, are subject to a series of risks arising from climate change.

The threat of climate change continues to attract considerable attention in the United States and in foreign countries.

Numerous proposals have been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit existing GHG emissions, as well as to restrict or eliminate future emissions.

As a result, our operations as well as the operations of our oil and natural gas E&P customers are subject to a series of regulatory, political, litigation, and financial risks associated with the production and processing of fossil fuels and emission of GHG.

In the United States, no comprehensive climate change legislation has been implemented at the federal level.

However, there are a number of proposed federal initiatives for climate change legislation that may be passed into law.

Moreover, following the U.S.

Supreme Court finding that GHG emissions constitute a pollutant under the CAA, the EPA has adopted rules that, among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States, and together with the DOT, implement GHG emissions limits on vehicles manufactured for operation in the United States.

The federal regulation of methane emissions from oil and gas facilities has been subject to substantially controversy in recent years.

Additionally, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of emissions.

International developments focused on restricting GHG emissions include the United Nations Framework Convention on Climate Change, which includes implementation of

the Paris Agreement and the Kyoto Protocol by the signatories.

Caps or fees on carbon emissions, including in the U.S., have been and may continue to be established and the cost of such caps or fees could disproportionately affect the fossil-fuel sectors.

The implementation of these agreements and other existing or future regulatory mandates, may adversely affect the demand for our products and services, require us or our customers to reduce GHG emissions or impose taxes on us or our customers, all of which could have a material adverse effect on our operations and results.

Litigation risks are also increasing, as a number of parties have sought to bring suit against certain oil and natural gas companies in state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to climate change or alleging that companies have been aware of the adverse effects of climate change for some time but defrauded their investors or customers by failing to adequately disclose those impacts.

There are also increasing financial risks for companies in the fossil fuel sector as stockholders currently invested in fossil fuel energy companies concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-fossil fuel related sectors.

Institutional lenders who provide financing to fossil fuel energy companies also have become more attentive to sustainable lending practices and some of them may elect not to provide funding for fossil fuel energy companies.

There is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector.

Limitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities.

Additionally, the Securities and Exchange Commission has proposed new rules relating to the disclosure of a range of climate-related risks.

We are currently assessing this rule but, at this time, we cannot predict the costs of implementation or any potential adverse impacts resulting from the rule.

To the extent this rule is finalized, we could incur increased costs related to the assessment and disclosure of climate-related risks.

In addition, enhanced climate disclosure requirements could accelerate the trend of certain stakeholders and lenders restricting or seeking more stringent conditions with respect to their investments in certain carbon intensive sectors.

The adoption and implementation of new or more stringent international, federal or state legislation, regulations or other regulatory initiatives that impose more stringent standards for GHG emissions from the oil and natural gas sector or otherwise restrict the areas in which this sector may produce oil and natural gas or generate GHG emissions could result in increased costs of compliance or costs of consuming, and thereby reduce demand for, oil and natural gas, which could reduce demand for our services and products.

Additionally, political, litigation and financial risks may result in our oil and natural gas customers restricting or cancelling production activities, incurring liability for infrastructure damages as a result of climatic changes, or impairing their ability to continue to operate in an economic manner, which also could reduce demand for our services and products.

One or more of these developments could have a material adverse effect on our business, financial condition and results of operation.

Climate change continues to attract considerable attention in the United States and in foreign countries.

Numerous proposals have been made and may continue to be made at the international, national, regional and state levels of government to monitor and limit existing emissions of GHG as well as to restrict or eliminate future emissions.

As a result, our operations, as well as the operations of our oil and natural gas E&P customers, are subject to regulatory, political, litigation and financial risks associated with the production and processing of fossil fuels and the emission of GHG.

At the federal level, the U.S.

EPA has finalized regulations intended to reduce methane emissions from certain oil and natural gas facilities.

In addition, pursuant to the Inflation Reduction Act of 2022, a methane emissions fee is being implemented for certain oil and natural gas facilities that exceed specified emissions thresholds.

These requirements generally apply to oil and natural gas operators rather than to oilfield service providers;

however, increased regulatory compliance costs, monitoring requirements or fees imposed on our customers could reduce drilling and completion activity or otherwise decrease demand for our services.

Various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives focused on GHG cap-and-trade programs, carbon taxes, reporting and tracking programs, emissions reduction targets and related disclosure requirements.

International developments focused on restricting GHG emissions include efforts under the United Nations Framework Convention on Climate Change, including implementation of the Paris Agreement.

Caps or fees on carbon emissions, including in the United States, have been and may continue to be established, and the cost of such caps or fees could disproportionately affect the fossil fuel sector.

The implementation of these initiatives or other existing or future regulatory mandates may adversely affect demand for our services, require us or our customers to reduce GHG emissions, or impose taxes or fees on us or our customers, any of which could have a material adverse effect on our operations and results.

Litigation risks are also evolving, as various governmental entities and private parties have sought to bring suit against certain oil and natural gas companies in state or federal court alleging, among other things, that such companies contributed to climate change-related harms or failed to adequately disclose climate-related risks.

While we are not currently a party to such litigation, similar claims could be asserted in the future.

There are also increasing financial risks for companies in the fossil fuel sector.

Certain investors and financial institutions have adopted policies that seek to limit or condition investment in fossil fuel-related businesses or require enhanced environmental, social and governance disclosures.

These practices could increase our cost of capital or limit access to financing and could result in the restriction, delay or cancellation of drilling or development activities by our customers.

In 2024, the SEC adopted final rules relating to climate-related disclosures;

however, the rules are currently stayed pending judicial review.

The ultimate scope, timing and applicability of any final requirements, including the extent to which such requirements would apply to smaller reporting companies such as us, remain uncertain.

If implemented and applicable to us, such rules could result in additional legal, accounting and compliance costs.

The adoption and implementation of new or more stringent international, federal or state legislation, regulations or other regulatory initiatives that impose more stringent standards for GHG emissions from the oil and natural gas sector or otherwise restrict the areas in which this sector may produce oil and natural gas could increase compliance costs, reduce demand for oil and natural gas, and reduce demand for our services.

Political, litigation and financial developments related to climate change could also impair our customers’ ability to operate economically, restrict or cancel production activities, or result in asset impairments, any of which could have a material adverse effect on our business, financial condition and results of operations.

For more information, see our risk factor titled “Seasonal weather conditions, climate change, severe weather events and natural disasters could disrupt normal operations and harm our business.”

Increased attention to sustainability, environmental, social, and governance (“ESG”) matters and conservation measures may adversely impact our or our customers’ business.

Increasing attention to, and societal expectations on companies to address, climate change and other environmental and social impacts, investor and societal expectations regarding voluntary sustainability and ESG disclosures, and consumer demand for alternative forms of energy may result in increased costs, reduced demand for our customers’ products, reduced profits, increased investigations and litigation, and negative impacts on our stock price and access to capital markets.

Increased attention to sustainability, environmental, social, and governance matters and conservation measures may adversely impact our or our customers’ business.

Increasing attention to climate change, environmental conservation and other sustainability matters, as well as investor and societal expectations regarding voluntary sustainability disclosures, and consumer demand for alternative forms of energy may result in increased costs, reduced demand for our customers’ products, reduced profits, increased investigations and litigation, and negative impacts on our stock price and access to capital markets.

Increasing attention to climate change and environmental conservation, for example, may result in demand shifts for oil and natural gas products and additional governmental investigations and private litigation against us or our customers.

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For more information, see our risk factor titled “Our operations, and those of our customers, are subject to a series of risks arising from climate change.”

Moreover, while we may create and publish voluntary disclosures regarding sustainability and ESG matters from time to time, certain statements in those voluntary disclosures may be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.

Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many sustainability and ESG matters.

Additionally, we may announce various targets or product and service

offerings in an attempt to improve our sustainability and ESG profile.

However, we cannot guarantee that we will be able to meet any such targets or that such targets or offerings will have the intended results on our ESG profile, including but not limited to as a result of unforeseen costs, consequences, or technical difficulties associated with such targets or offerings.

Also, despite any voluntary actions, we may receive pressure from certain investors, lenders, or other groups to adopt more aggressive climate or other sustainability and ESG-related goals or policies, but we cannot guarantee that we will be able to implement such goals because of potential costs or technical or operational obstacles.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to sustainability and ESG matters.

Moreover, while we may create and publish voluntary disclosures regarding sustainability matters from time to time, certain statements in those voluntary disclosures may be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.

Additionally, we may announce various targets or product and service offerings in an attempt to improve our sustainability profile.

However, we cannot guarantee that we will be able to meet any such targets or that such targets or offerings will have the intended results on our sustainability profile, including but not limited to as a result of unforeseen costs, consequences, or technical difficulties associated with such targets or offerings.

Also, despite any voluntary actions, we may receive pressure from certain investors, lenders, or other groups to adopt more aggressive climate or other sustainability-related goals or policies, but we cannot guarantee that we will be able to implement such goals because of potential costs or technical or operational obstacles.

Such ratings are used by some investors to inform their investment and voting decisions.

Unfavorable sustainability and ESG ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.

Additionally, to the extent sustainability and ESG matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations.

Unfavorable sustainability ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.

Additionally, to the extent sustainability matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations.

The Endangered Species Act and Migratory Bird Treaty Act and other restrictions intended to protect certain species of wildlife govern our and our customers’ operations and additional restrictions may be imposed in the future, which constraints could have an adverse impact on our ability to expand some of our existing operations or limit our customers’ ability to develop new oil and natural gas wells.

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Such anti‑indemnity acts may restrict or void a party’s indemnification of us, which could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

Cybersecurity and Data Privacy

Technology and Cybersecurity Risks

We may be subject to interruptions or failures in our information technology systems.

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A cyber incident could negatively impact the Company in a number of ways, including but not limited to;

(i) remediation costs, such as liability for stolen assets

or information and repairs of system damage;

(i) remediation costs, such as liability for stolen assets or information and repairs of system damage;

(ii) increased cybersecurity protection costs, which may include the costs of making organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants;

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Our insurance coverage for cyberattacks may not be sufficient to cover all the losses we may experience as a result of such cyberattacks.

Risks Related to Our Ownership and Capital Structure

Financial Leverage and Liquidity

Financial Leverage and Liquidity Risks

We have debt obligations, and any additional future indebtedness, could adversely affect our financial condition.

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If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired.

Further, the borrowing base of our Wells Fargo Revolving Credit Facility is dependent upon our receivables and unbilled revenue less certain reserves, which may be significantly lower in the future due to reduced activity levels or decreases in pricing for our services.

levels or decreases in pricing for our services.

Changes to our operational activity levels have an impact on our total eligible accounts receivable, which could result in significant changes to our borrowing base and therefore our availability under our Wells Fargo Revolving Credit Facility.

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Our Wells Fargo Revolving Credit Facility contains certain financial and other restrictive covenants, including a minimum fixed charge coverage ratio during certain testing periods.

The Wells Fargo Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves.

The Wells Fargo Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable and eligible unbilled revenue, less certain reserves.

The Company’s eligible accounts receivable serve as collateral for the borrowings under the Wells Fargo Revolving Credit Facility, which is scheduled to mature on May 31, 2028.

The Wells Fargo Revolving Credit Facility includes an acceleration clause and cash dominion provisions under certain circumstances that permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay our obligations under the Wells Fargo Revolving Credit Facility.