Nine Energy Service, Inc.

Current report

We recently emerged from bankruptcy, which may adversely affect our business and relationships.

Current report

It is possible that our having filed for bankruptcy and our recent emergence from the Chapter 11 Cases could adversely affect our business and relationships with vendors, suppliers, service providers, customers, employees, and other third parties.

Current report

Many risks exist as a result of the Chapter 11 Cases and our emergence, including the following:

Current report

• key suppliers, vendors, customers or other contract counterparties could, among other things, renegotiate the terms of our agreements, attempt to terminate their relationships with us, or require financial assurances from us;

Current report

• our ability to renew existing contracts and obtain new contracts on reasonably acceptable terms and conditions may be adversely affected;

Current report

• we may have difficulty obtaining acceptable and sufficient financing to execute our business plan;

Current report

• our ability to attract, motivate and/or retain key executives and employees has been and may continue to be adversely affected; and

Current report

• competitors may take business away from us, and our ability to compete for new business and attract and retain customers may be negatively impacted.

Current report

The occurrence of one or more of these events could have a material and adverse effect on our operations, financial condition, and reputation. We cannot ensure that having been subject to bankruptcy protection will not adversely affect our operations in the future.

Current report

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.

Current report

In connection with the disclosure statement we filed with the Bankruptcy Court, and the hearing to consider confirmation of the Plan, we prepared projected financial information to demonstrate to the Bankruptcy Court the feasibility of the Plan and our ability to continue operations upon our emergence from bankruptcy. Those projections were prepared solely for the purpose of the bankruptcy proceedings and have not been, and will not be, updated on an ongoing basis and should not be relied upon by investors. At the time they were prepared, the projections reflected numerous assumptions concerning our anticipated future performance with respect to then prevailing and anticipated market and economic conditions that were and remain beyond our control and that may not materialize. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks and the assumptions underlying the projections or valuation estimates may prove to be wrong in material respects. Actual results may vary significantly from those contemplated by the projections. As a result, investors should not rely on these projections.

Current report

Our historical financial statements will not be comparable to the information contained in our financial statements after the application of fresh start accounting.

Current report

Upon emergence from bankruptcy, we met the criteria and were required to adopt fresh start accounting in accordance with ASC 852, which on the Plan Effective Date resulted in a new entity for financial reporting purposes, with no beginning retained earnings or deficit as of the fresh start reporting date. Fresh start accounting requires that new fair values be established for our assets, liabilities, and equity as of the Plan Effective Date. These new fair values differ materially from the recorded values on the historical balance sheets of the Predecessor. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the financial statements for the period after March 5, 2026 are not comparable with the financial statements prior to and including March 5, 2026. This will make it difficult for stockholders to assess our performance in relation to prior periods. See Note 3 – Emergence from Bankruptcy to our unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Current report

Pursuant to the Plan, upon our emergence from bankruptcy, the composition of our Board of Directors (“Board”) changed significantly.

Current report

Our Board is now made up of six directors, with a new non-executive Chairperson of the Board, and three individuals who have not previously served on the Board. The new directors have different backgrounds, experiences, and perspectives from those individuals who previously served on the Board and, thus, may have different views on the issues that will determine the future of the Company. There is no guarantee that the new Board will pursue, or will pursue in the same manner, our strategic plans as our prior Board. As a result, our future strategy and plans may differ materially from those of the past.

Current report

The ability to attract and retain key personnel is critical to the success of our business and has been and may continue to be affected by our emergence from bankruptcy.

Current report

The success of our business depends on key personnel. The ability to attract and retain these key personnel may be difficult in light of our emergence from bankruptcy, the uncertainties currently facing the business and changes we may make to the organizational structure to adjust to changing circumstances. We may need to enter into retention or other arrangements that could be costly to maintain. Subsequent to our emergence, certain officers and other key personnel resigned, and it is possible that additional officers or other key personnel may resign or retire; we may not be able to replace them in a timely manner and we could experience significant declines in productivity.

Previous report

We are currently out of compliance with certain NYSE continued listing standards and are at risk of the NYSE delisting our common stock; such a delisting could negatively impact us as it would likely reduce the liquidity and market price of our common stock, which in turn would, among other things, negatively impact our ability to raise equity financing.

Previous report

On October 21, 2024, we received written notification (the “Market Capitalization Notice”) from the NYSE that we no longer satisfy the continued listing standard set forth under Section 802.01B of the NYSE Listed Company Manual (the “NYSE Manual”) because our average global market capitalization was less than $50,000,000 over a consecutive 30 trading-day period that ended on October 18, 2024 and, at the same time, our last reported stockholders’ equity was less than $50,000,000. In accordance with applicable NYSE procedures, we developed and submitted a plan (the “Market Capitalization Plan”) to the NYSE demonstrating how we intend to regain compliance with such continued listing standard within 18 months of our receipt of the Market Capitalization Notice, which was reviewed and accepted by the Listings Operations Committee of the NYSE. We are subject to quarterly review for compliance with the Market Capitalization Plan, and if we fail to meet material aspects of the Market Capitalization Plan or any quarterly milestones contained in the Market Capitalization Plan, the NYSE may commence suspension and delisting procedures prior to the end of the cure period.

Previous report

On April 30, 2025, we received written notification from the NYSE that we no longer satisfy the continued listing standard set forth in Section 802.01C of the NYSE Manual (the “Price Criteria”) because, as of April 29, 2025, the average closing share price of our common stock was less than $1.00 over a consecutive 30 trading-day period. Under the NYSE’s rules, a listed company is generally afforded a six-month period following the receipt of such a notice from the NYSE to regain compliance. However, the NYSE’s rules provide for an exception to the six-month cure period if a company determines that, if necessary, it will cure the price condition by taking an action that will require approval of its stockholders; in such a case, the company must obtain the approval of its stockholders by no later than its next annual meeting and implement the action promptly thereafter, and the price condition will be deemed cured if the share price promptly exceeds $1.00 per share and the price remains above the level for at least the following 30 trading days. We intend to submit a proposal to approve a reverse split of our common stock at our 2026 Annual Meeting of Stockholders in order to cure the minimum share price deficiency; however, we can give no assurance that our stockholders will approve the proposal by the required vote or that we will be successful in regaining compliance with the Price Criteria after implementing a reverse stock split.

Previous report

If we do not regain compliance with the continued listing standards set forth under Section 802.01B and Section 802.01C of the NYSE Manual within the applicable cure periods, or we do not make progress consistent with the Market Capitalization Plan, the NYSE may initiate proceedings to delist our common stock. The NYSE may also commence accelerated delisting actions if our common stock trades at an “abnormally low” price or if our average market capitalization falls below $15 million over a 30 trading-day period.

Previous report

A delisting of our common stock from the NYSE could negatively impact us as it would likely reduce the liquidity and market price of our common stock and thus (i) reduce the number of investors willing to hold or acquire our common stock, which would negatively impact our ability to access equity markets and obtain financing, and (ii) impair our ability to provide equity incentives to our employees.