KLX Energy Services Holdings Inc

Below is a summary of the material risk factors that make an investment in our Common Stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found in Item 1A “Risk Factors” and should be carefully considered, together with other information in this Annual Report, before making investment decisions regarding our Common Stock.

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

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

•We may be unable to maintain existing prices or implement price increases on our services.

•We have been expanding our available products and services in recent periods. Our inability to properly manage or support future expansion of our business may have a material adverse effect on our business, financial condition, and results of operations and could cause the market value of our Common Stock to decline.

•If we lose significant customers, significant customers materially reduce their purchase orders or significant programs on which we rely are delayed, scaled back or eliminated, our business, financial condition and results of operations may be adversely affected.

•Our past acquisition activity and any future acquisitions may not be successful in delivering expected performance post-acquisition, which could have a material adverse effect on our business, financial condition and results of operations.

•Global pandemics have previously, may continue to, and may in the future adversely impact our business.

•Our business involves many hazards and operational risks that could adversely affect our business, financial condition and results of operations.

•Increased labor costs, the unavailability of skilled workers or labor-related litigation could hurt our business, financial condition and results of operations.

•We operate in highly competitive markets and our failure to compete effectively may negatively impact our business, financial condition and results of operations.

•We have operated at a loss, and there is no assurance of our profitability in the future.

•We may need to obtain additional capital or financing to fund expansion of our asset base, which could increase our financial leverage, or we may not be able to finance our capital needs.

•Our assets require capital for maintenance, upgrades and refurbishment, and we may require capital expenditures for new equipment.

•We have substantial indebtedness, and efforts to refinance our indebtedness may or may not be successful, which could adversely impact our business, financial condition and results of operations.

•Our significant level of indebtedness may limit our ability to borrow additional funds or capitalize on acquisition or other business opportunities. The indenture that governs the Senior Notes and the credit agreement that governs the asset-based lending facility (the “ABL Facility”) have significant financial and operating restrictions that may have an adverse effect on our business, financial condition and results of operations.

•We may experience future impairment charges.

•Customer payment delays of outstanding receivables and customer bankruptcies could have a material adverse effect on our liquidity, results of operations, and consolidated financial condition.

•Shortages or increases in the costs of the equipment we use in our operations could adversely affect our operations in the future.

•We are dependent on a small number of suppliers for key goods and services that we use in our operations.

•If suppliers are unable to supply us with the products used in our operations in a timely manner, in adequate quantities and/or at a reasonable cost, we may be unable to meet the demands of our customers, which could have a material adverse effect on our business, financial condition and results of operations.

•Our inability to develop, obtain, maintain or implement new technology may cause us to become less competitive.

•Our success may be affected by our ability to use and protect our proprietary technology as well as our ability to enter into license agreements.

•Our operations rely on an extensive network of IT resources and a failure to maintain, upgrade and protect such systems could adversely impact our business, financial condition and results of operations. Our operations are subject to cybersecurity risks that could have a material adverse effect on our business, financial condition and results of operations.

•Changes in trucking regulations may increase our transportation costs and negatively impact our business, financial condition and results of operations.

•Legal requirements relating to hydraulic fracturing could increase our customers’ costs of doing business, limit the areas in which our customers can operate and reduce oil and natural gas production by our customers, which could adversely impact our business, financial condition and results of operations.

•We and our customers are subject to environmental and occupational health and safety laws and regulations that could increase our or our customers’ costs of doing business and adversely impact our business, financial condition and results of operations.

•Our and our customers’ operations are subject to a number of risks arising out of the threat of climate change, energy conservation measures, or initiatives that stimulate demand for alternative forms of energy, which could result in increased operating and capital costs for us and our customers, limit the areas in which oil and gas production may occur and reduce demand for the products and services we provide.

•The federal Endangered Species Act (the "ESA") and comparable laws intended to protect certain species of wildlife govern our and our oil and natural gas exploration and production ("E&P") customers’ operations, 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.

Part I