KLX Energy Services Holdings, Inc.

In addition to the information set forth in this Quarterly Report, you should carefully consider the risk factors previously described in Part I, Item IA. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Risks Related to the Rights Offering and the Backstop Exchange

The sale of substantial amounts of our Common Stock could adversely affect the price of our Common Stock.

Sales of substantial amounts of our Common Stock in the public market, and the availability of shares of our Common Stock for future sale, including shares of our Common Stock issued in the Rights Offering and the Backstop Exchange, could cause the market price of our Common Stock to remain low for a substantial amount of time.

We cannot foresee the impact of such potential sales on the market, but it is possible that if a significant percentage of such available shares of Common Stock were attempted to be sold within a short period of time, the market for shares of our Common Stock would be adversely affected. Even if a substantial number of sales do not occur within a short period of time, the mere existence of this “market overhang” could have a negative impact on the market for our Common Stock and our ability to raise additional capital. Any disposition by the Backstop Parties or any other substantial stockholders of our Common Stock in the public market, or the perception that such dispositions could occur, could adversely affect prevailing market prices of our Common Stock.

Certain of the Backstop Parties hold a significant ownership position in the Company, which may allow them to exert significant influence over corporate matters.

After giving effect to the Rights Offering and the Backstop Exchange, affiliates of Cross Ocean Partners Management LP (“Cross Ocean”) and Whitebox Advisors LLC (“Whitebox”) hold 22,495,104 and 13,055,633 shares of Common Stock, respectively (representing 21.3% and 12.4%, respectively, of our outstanding Common Stock as of October 31, 2026), according to Schedule 13D filings made by each of them on October 6, 2026.

As a result of their substantial ownership of our capital stock, Cross Ocean and Whitebox may be able to significantly influence matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our Company or our assets. This concentration of ownership may limit the ability of other stockholders to influence corporate matters and may cause us to make strategic decisions that could involve risks to you or that may not be aligned with your interests. Additionally, pursuant to the Backstop Agreement, each of Cross Ocean and Whitebox designated one individual that is independent under applicable listing standards, requirements and rules of the Nasdaq Global Select Market, and our Board of Directors appointed such designees, Franklin S. Edmonds, Jr. and E. Dirk Hallen, to our Board of Directors. For so long as each of Cross Ocean and Whitebox, together with its controlled affiliates, beneficially owns at least 7.5% of our outstanding Common Stock, it has the right to have its designee included in the slate of nominees recommended by our Board of Directors at each annual meeting of stockholders and to designate a replacement to fill any vacancy created by its designee ceasing to serve. This influence may adversely affect the market price of our Common Stock.

Our stockholder protection rights plan, or “poison pill,” includes terms and conditions that could discourage a takeover or other transaction that stockholders may consider favorable.

In order to provide the Board with time to make informed decisions that are in the best long-term interests of the Company and its stockholders, on September 23, 2026, our Board adopted a stockholder protection rights plan, which could discourage, delay or prevent an acquisition of the Company at a premium price. The rights plan provides for preferred stock purchase rights attached to each share of our Common Stock, which will cause substantial dilution to a person or group that becomes the beneficial owner of 10% or more of our outstanding Common Stock without the prior approval of our Board. As a result, the overall effect of the rights plan may be to render more difficult or discourage a merger, tender or exchange offer or other business combination involving our Company that is not approved by the Board even if the offer may be considered beneficial by some stockholders. The Rights will expire no later than the close of business on September 23, 2027, unless such date is extended by the Board prior to the expiration of the Rights.