16400 Dallas Parkway
Dallas, TX 75248
(972) 392-6180

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)​

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and on completion of the business combination described in the enclosed proxy statement/prospectus/consent solicitation statement.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary proxy statement/prospectus/consent solicitation statement is not complete and may be changed. The securities described herein may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission is declared effective. This preliminary proxy statement/prospectus/consent solicitation statement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROXY STATEMENT/PROSPECTUS/CONSENT SOLICITATION STATEMENT — SUBJECT TO COMPLETION, DATED APRIL 21, 2023

PROXY STATEMENT OF
ROC ENERGY ACQUISITION CORP.

PROSPECTUS FOR UP TO 27,931,604
SHARES OF COMMON STOCK

Dear Stockholders of ROC Energy Acquisition Corp.:

You are cordially invited to attend the special meeting (the “special meeting”) in lieu of the 2023 annual meeting of stockholders of ROC Energy Acquisition Corp. (“ROC,” “we,” “our,” “us” or the “Company”), which will be held at 10:00 a.m., Eastern time, on      , 2023, via live webcast at the following address:      . At the special meeting, ROC stockholders will be asked to consider and vote upon the following proposals:

•

The Business Combination Proposal — To consider and vote upon a proposal to (a) approve and adopt the Agreement and Plan of Merger, dated as of February 13, 2023 (the “Business Combination Agreement”), among ROC, ROC Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of ROC (“Merger Sub”), and Drilling Tools International Holdings, Inc., a Delaware corporation (“DTI”), pursuant to which Merger Sub will merge with and into DTI, with DTI surviving the merger as a wholly owned subsidiary of ROC and (b) approve such merger and the other transactions contemplated by the Business Combination Agreement (the “business combination” and such proposal, the “Business Combination Proposal”) (Proposal No. 1). A copy of the Business Combination Agreement is attached to this proxy statement/prospectus/consent solicitation statement as Annex A. The majority owner of DTI is HHEP-Directional, L.P. (“HHEP”), a Delaware limited partnership and affiliate of Hicks Equity Partners LLC. As of the date hereof, HHEP owned 76% and 68% of DTI’s issued and outstanding shares on a non-diluted and fully diluted basis, respectively. Following the consummation of the business combination, HHEP will hold a significant percentage of the issued and outstanding shares of PubCo (as defined herein), which may exceed 50%. As a result PubCo may be a “controlled company” within the meaning of the applicable rules of Nasdaq and qualify for exemptions from certain corporate governance requirements. If PubCo relies on these exemptions, its stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.

​

•

The Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq Global Market, (a) the issuance of up to 23,253,533 shares of common stock, par value $0.0001 per share, of ROC (the “Common Stock”) pursuant to the Business Combination Agreement and (b) the issuance and sale of       shares of Common Stock in a private offering of securities to certain investors (the “Nasdaq Proposal”) (Proposal No. 2).

​

•

The Charter Proposal — To consider and vote upon a proposal to approve, assuming the Business Combination Proposal, and the Nasdaq Proposal are approved and adopted, the proposed amended and restated certificate of incorporation of ROC (the “Proposed Charter”), which will replace ROC’s Amended and Restated Certificate of Incorporation, dated December 1, 2021 (the “Current Charter”), and will be in effect upon the closing (the “Closing”) of the Business Combination (the

​

“Charter Proposal”) (Proposal No. 3). A copy of the Proposed Charter is attached to this proxy statement/prospectus/consent solicitation statement as Annex B.

•

The Incentive Plan Proposal — To consider and vote upon a proposal to approve, assuming the Business Combination Proposal, the Nasdaq Proposal, and the Charter Proposal are approved and adopted, the 2023 Omnibus Incentive Plan (the “2023 Plan”), a copy of which is attached to this proxy statement/prospectus/consent solicitation statement as Annex C, including the authorization of the initial share reserve under the 2023 Plan (the “Incentive Plan Proposal”) (Proposal No. 4).

​

•

The Director Election Proposal — To consider and vote upon a proposal to elect, assuming the Business Combination Proposal, the Nasdaq Proposal and the Charter Proposal are approved and adopted, seven (7) directors to serve staggered terms on the PubCo Board (as defined herein) effective upon the Closing until the 2024, 2025 and 2026 annual meetings of PubCo, as applicable, and until their respective successors are duly elected and qualified (the “Director Election Proposal”) (Proposal No. 5).

​

•

The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal, the Incentive Plan Proposal, or the Director Election Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal, the Incentive Plan Proposal, and the Director Election Proposal, the “Proposals”) (Proposal No. 6).

​

The special meeting will be completely virtual. There will be no physical meeting location and the special meeting will only be conducted via live webcast at the following address:      .

The board of directors of ROC (the “ROC Board”) recommends that ROC stockholders vote “FOR” each Proposal being submitted to a vote of the stockholders at the special meeting. When you consider the recommendation of the ROC Board in favor of each of the Proposals, you should keep in mind that certain of ROC’s directors and officers have interests in the business combination that may conflict with your interests as a stockholder. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

Each of the Proposals is more fully described in this proxy statement/prospectus/consent solicitation statement, which each ROC stockholder is encouraged to review carefully.

The shares of Common Stock and public rights are currently listed on Nasdaq under the symbols “ROC” and “ROCAR,” respectively. In addition, certain of our shares of Common Stock and rights currently trade as units consisting of one share of Common Stock and one right and are listed on Nasdaq under the symbol “ROCAU.” The units will automatically separate into the component securities upon consummation of the business combination and, as a result, will no longer trade as a separate security. Additionally, upon consummation of the business combination, each right will be exchanged for one-tenth of one share of Common Stock. In connection with the Closing, we intend to change our name from “ROC Energy Acquisition Corp.” to “Drilling Tools International Corporation,” and we have applied to list the shares of Common Stock of the post-combination company on Nasdaq under the symbol “DTI” following the Closing.

Pursuant to our Current Charter, we are providing the holders of shares of Common Stock originally sold as part of the units issued in our initial public offering (the “IPO” and such holders, the “public stockholders”) with the opportunity to redeem, upon the Closing, shares of Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds (including interest not previously released to ROC to pay its franchise and income taxes) from the IPO. For illustrative purposes, based on the fair value of cash and marketable securities held in the Trust Account as of March 31, 2023, of approximately $217.7 million, the estimated per share redemption price would have been approximately $10.52. Public stockholders may elect to redeem their shares whether or not they are holders as of the record date and whether or not they vote for the Business Combination Proposal. Notwithstanding the foregoing redemption rights, a public stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” ​(as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the outstanding shares of Common Stock sold in the IPO. Holders of ROC’s outstanding rights sold in the IPO do not have redemption rights

in connection with the business combination. Our Sponsor, officers and directors have agreed to waive their redemption rights in connection with the consummation of the business combination with respect to any shares of Common Stock they may hold. Currently, our Sponsor, officers and directors collectively own approximately 22.4% of our outstanding Common Stock. Our Sponsor, officers and directors have agreed to vote any shares of Common Stock owned by them in favor of the business combination.

In connection with the Business Combination ROC is engaged in the PIPE Financing (defined below). As of the date hereof, ROC has obtained an aggregate of $17 million in subscriptions to purchase shares of Common Stock at a price of $10.10 per share. The Sponsor has agreed to forfeit up to 50% of the Founder Shares (defined below) to ROC for reissuance to the PIPE Investors (defined below) in connection with the PIPE Financing, pursuant to the Sponsor Support Agreement (defined below). ROC’s Sponsor, directors, officers and their affiliates are participating in the PIPE Financing. Participation by affiliates of the Sponsor is reflected in the unaudited pro forma condensed combined financial information as “ROC Sponsor.” While Closing is not conditioned on ROC successfully raising a specific amount in connection with the PIPE Financing, ROC may need to rely on funds raised in connection with the PIPE Financing to meet the Minimum Cash Condition (defined below), which is a condition to Closing for all parties to the Business Combination Agreement. If ROC is unable to meet the Minimum Cash Condition by means of the PIPE Financing, funds remaining in the Trust Account (defined below), any other approved third-party financing or a combination of the foregoing, then DTI will have a right to terminate the Business Combination Agreement, provided DTI is not then in material breach of any of its representations, warranties, covenants or agreements in the Business Combination Agreement or the Company Support Agreements (defined below). As such, if the Minimum Cash Condition is not satisfied or waived by the parties to the Business Combination Agreement, the Business Combination will not be consummated.

ROC is providing this proxy statement/prospectus/consent solicitation statement and accompanying proxy card to its stockholders in connection with the solicitation of proxies to be voted at the special meeting and any adjournments or postponements of the special meeting. Your vote is very important. Whether or not you plan to attend the special meeting virtually, please submit your proxy card without delay.

We encourage you to read this proxy statement/prospectus/consent solicitation statement carefully. In particular, you should review the matters discussed under the section entitled “Risk Factors” beginning on page 43 of this proxy statement/prospectus/consent solicitation statement.

Approval of each of the Business Combination Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote (online or by proxy) of the holders of a majority of the outstanding shares of Common Stock entitled to vote and present at the special meeting. Approval of the Charter Proposal requires the affirmative vote (online or by proxy) of the holders of a majority of the outstanding shares of Common Stock entitled to vote. The approval of the election of each director nominee pursuant to the Director Election Proposal requires the affirmative vote of the holders of a plurality of the outstanding shares of Common Stock entitled to vote and actually cast thereon at the special meeting.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of Proposal Nos. 1, 2, 3, 4, 5, and 6. If you fail to return your proxy card or fail to submit your proxy by telephone or over the Internet, or fail to instruct your bank, broker or other nominee how to vote, and do not virtually attend the special meeting, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have no effect on the Business Combination Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Director Election Proposal, or the Adjournment Proposal. An abstention will have no effect on the Director Election Proposal. An abstention will have the same effect as a vote “AGAINST” the Business Combination Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Adjournment Proposal. A failure to vote or abstention will have the same effect as a vote “AGAINST” the Charter Proposal. If you are a stockholder of record and you virtually attend the special meeting and wish to vote, you may withdraw your proxy and vote online.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE ROC REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO ROC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DEPOSIT WITHDRAWAL AT CUSTODIAN (“DWAC”) SYSTEM. IF THE BUSINESS

COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

Thank you for your consideration of these matters.

Sincerely,

Daniel Jeffrey Kimes

Chief Executive Officer and Director

ROC Energy Acquisition Corp.

Whether or not you plan to attend the special meeting of ROC stockholders online, please submit your proxy by completing, signing, dating and mailing the enclosed proxy card in the pre-addressed postage paid envelope or by using the telephone or Internet procedures provided to you by your broker or bank. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting of ROC stockholders and vote online, you must obtain a proxy from your broker or bank.

Neither the Securities and Exchange Commission nor any state securities commission has passed upon the adequacy or accuracy of this proxy statement/prospectus/consent solicitation statement. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus/consent solicitation statement is dated         , 2023, and is first being mailed to ROC stockholders on or about         , 2023.

 

ROC ENERGY ACQUISITION CORP.

16400 Dallas Parkway
Dallas, TX 75248

NOTICE OF SPECIAL MEETING IN LIEU OF THE 2023
ANNUAL MEETING OF STOCKHOLDERS OF ROC
ENERGY ACQUISITION CORP.

To Be Held On      , 2023

To the Stockholders of ROC Energy Acquisition Corp.:

NOTICE IS HEREBY GIVEN that the special meeting (the “special meeting”) in lieu of the 2023 annual meeting of stockholders of ROC Energy Acquisition Corp. (“ROC,” “we,” “our,” “us” or the “Company”) will be held at 10:00 a.m., Eastern time, on      , 2023, via live webcast at the following address:      . At the special meeting, ROC stockholders will be asked to consider and vote upon the following proposals:

•

The Business Combination Proposal — To consider and vote upon a proposal to (a) approve and adopt the Agreement and Plan of Merger, dated as of February 13, 2023 (the “Business Combination Agreement”), among ROC, ROC Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of ROC (“Merger Sub”), and Drilling Tools International Holdings, Inc., a Delaware corporation (“DTI”), pursuant to which Merger Sub will merge with and into DTI, with DTI surviving the merger as a wholly owned subsidiary of ROC and (b) approve such merger and the other transactions contemplated by the Business Combination Agreement (the “business combination” and such proposal, the “Business Combination Proposal”) (Proposal No. 1). A copy of the Business Combination Agreement is attached to the accompanying proxy statement/prospectus/consent solicitation statement as Annex A.

​

•

The Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq Global Market, (a) the issuance of up to 23,253,533 shares of common stock, par value $0.0001 per share, of ROC (the “Common Stock”) pursuant to the Business Combination Agreement and (b) the issuance and sale of        shares of Common Stock in a private offering of securities to certain investors (the “Nasdaq Proposal”) (Proposal No. 2).

​

•

The Charter Proposal — To consider and vote upon a proposal to approve, assuming the Business Combination Proposal and Nasdaq Proposal are approved and adopted, the proposed amended and restated certificate of incorporation of ROC (the “Proposed Charter”), which will replace ROC’s Amended and Restated Certificate of Incorporation, dated December 1, 2021 (the “Current Charter”) and will be in effect upon the closing (the “Closing”) of the business combination (the “Charter Proposal”) (Proposal No. 3). A copy of the Proposed Charter is attached to this proxy statement/​prospectus/consent solicitation statement as Annex B.

​

•

The Incentive Plan Proposal — To consider and vote upon a proposal to approve, assuming the Business Combination Proposal, the Nasdaq Proposal and the Charter Proposal are approved and adopted, the 2023 Omnibus Incentive Plan (the “2023 Plan”), a copy of which is attached to this proxy statement/prospectus/consent solicitation statement as Annex C, including the authorization of the initial share reserve under the 2023 Plan (the “Incentive Plan Proposal”) (Proposal No. 4).

​

•

The Director Election Proposal — To consider and vote upon a proposal to elect, assuming the Business Combination Proposal, the Nasdaq Proposal and the Charter Proposal are approved and adopted, seven (7) directors to serve staggered terms on the PubCo Board (as defined herein) effective upon the Closing until the 2024, 2025 and 2026 annual meetings of PubCo, as applicable, and until their respective successors are duly elected and qualified (the “Director Election Proposal”) (Proposal No. 5).

​

•

The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal,

​

 

 

the Incentive Plan Proposal, or the Director Election Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal, the Incentive Plan Proposal, and the Director Election Proposal, the “Proposals”) (Proposal No. 6).

The special meeting will be completely virtual. There will be no physical meeting location and the special meeting will only be conducted via live webcast at the following address:      .

Only holders of record of Common Stock at the close of business on      , 2023 are entitled to notice of the special meeting and to vote at the special meeting and any adjournments or postponements thereof. A complete list of ROC’s stockholders of record entitled to vote at the special meeting will be available at the special meeting and for ten days before the special meeting at ROC’s principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.

Pursuant to our Current Charter, we are providing the holders of shares of Common Stock originally sold as part of the units issued in our initial public offering (the “IPO” and such holders, the “public stockholders”) with the opportunity to redeem, upon the Closing, shares of Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds (including interest not previously released to ROC to pay its franchise and income taxes) from the IPO and a concurrent private placement of rights to ROC Energy Holdings, LLC, a Delaware limited liability company (our “Sponsor”), and certain of our independent directors. For illustrative purposes, based on the fair value of cash and marketable securities held in the Trust Account as of March 31, 2023, of approximately $217.7 million, the estimated per share redemption price would have been approximately $10.52. Public stockholders may elect to redeem their shares whether or not they are holders as of the record date and whether or not they vote for the Business Combination Proposal. Notwithstanding the foregoing redemption rights, a public stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” ​(as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the outstanding shares of Common Stock sold in the IPO. Holders of ROC’s outstanding rights sold in the IPO, which are exercisable for shares of Common Stock under certain circumstances, do not have redemption rights in connection with the business combination. Our Sponsor, officers and directors have agreed to waive their redemption rights in connection with the consummation of the business combination with respect to any shares of Common Stock they may hold.

Currently, our Sponsor, officers and directors collectively own approximately 22.4% of our outstanding Common Stock. Our Sponsor, officers and directors have agreed to vote any shares of Common Stock owned by them in favor of the business combination.

In connection with the Business Combination ROC is engaged in the PIPE Financing (defined below). As of the date hereof, ROC has obtained an aggregate of $17 million in subscriptions to purchase shares of Common Stock at a price of $10.10 per share. The Sponsor has agreed to forfeit up to 50% of the Founder Shares (defined below) to ROC for reissuance to the PIPE Investors (defined below) in connection with the PIPE Financing, pursuant to the Sponsor Support Agreement (defined below). ROC’s Sponsor, directors, officers and their affiliates are participating in the PIPE Financing. Participation by affiliates of the Sponsor is reflected in the unaudited pro forma condensed combined financial information as “ROC Sponsor.” While Closing is not conditioned on ROC successfully raising a specific amount in connection with the PIPE Financing, ROC may need to rely on funds raised in connection with the PIPE Financing to meet the Minimum Cash Condition (defined below), which is a condition to Closing for all parties to the Business Combination Agreement. If ROC is unable to meet the Minimum Cash Condition by means of the PIPE Financing, funds remaining in the Trust Account (defined below), any other approved third-party financing or a combination of the foregoing, then DTI will have a right to terminate the Business Combination Agreement, provided DTI is not then in material breach of any of its representations, warranties, covenants or agreements in the Business Combination Agreement or the Company Support Agreements (defined below). As such, if the Minimum Cash Condition is not satisfied or waived by the parties to the Business Combination Agreement, the Business Combination will not be consummated.

We may not consummate the business combination unless the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal, the Incentive Plan Proposal, and the Director Election Proposal are approved at the special meeting. The Adjournment Proposal is not conditioned on the approval of any other Proposal set forth in the accompanying proxy statement/prospectus/consent solicitation statement.

 

 

Your attention is directed to the proxy statement/prospectus/consent solicitation statement accompanying this notice (including the annexes thereto) for a more complete description of the proposed business combination and related transactions and each of our Proposals. We encourage you to read the accompanying proxy statement/prospectus/consent solicitation statement carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Morrow Sodali LLC, at (800) 662-5200 (banks and brokers call collect at (203) 658-9400, or by email at               ).

                         , 2023

By Order of the Board of Directors

Daniel Jeffrey Kimes

Chief Executive Officer and Director

 

 

 

 

ii

 

ABOUT THIS PROXY STATEMENT/PROSPECTUS/CONSENT SOLICITATION STATEMENT

This document, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission (“SEC”) by the Company (File No. 333-269763) (the “Registration Statement”), constitutes a prospectus of the Company under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”) with respect to the shares of Common Stock to be issued if the business combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) with respect to the special meeting of the Company’s stockholders at which the Company’s stockholders will be asked to consider and vote upon a proposal to approve the business combination by the approval and adoption of the Business Combination Agreement, among other matters. This document also constitutes a consent solicitation statement that Drilling Tools International Holdings, Inc. (“DTI”) is providing to the holders of DTI Common Stock and DTI Preferred Stock to solicit the required written consent to adopt and approve the Business Combination Agreement and approve the business combination.

This proxy statement/prospectus/consent solicitation statement incorporates important business and financial information about ROC Energy Acquisition Corp. (“ROC,” “we,” “us” or the “Company,” unless the context otherwise requires) that is not included in or delivered with the document.

This information is available without charge to you upon written or oral request. To make this request, you should contact our proxy solicitor at:

Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Individuals call toll-free (800) 662-5200
Banks and brokers call (203) 658-9400

To obtain timely delivery of requested materials, you must request the information no later than five business days prior to the date of the special meeting.

You may also obtain additional information about us from documents filed with the SEC by following the instruction in the section entitled “Where You Can Find Additional Information.”

 

iii

 

CERTAIN DEFINED TERMS

Unless the context otherwise requires, references in this proxy statement/prospectus/consent solicitation statement to:

•

“2023 Plan” are to the 2023 Omnibus Incentive Plan;

​

•

“Accumulation of PIK Preferred Dividends” are to the accumulation subsequent to December 31, 2022, of paid-in-kind dividends on DTI Preferred Stock;

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•

“Advisor” are to Hicks Holdings Operating LLC;

​

•

“Aggregate Company Cash Consideration” are to $11,000,002;

​

•

“Aggregate Company Preferred Stock Consideration” means a number of shares of PubCo Common Stock equal to the difference between: (i) the Per Share Company Common Stock Consideration multiplied by the As Converted Preferred Share Count; minus (ii) the Aggregate Company Cash Consideration divided by the Closing Share Price.

​

•

“Aggregate Company Stock Consideration” are to a number of shares of PubCo Common Stock equal to the sum of (a) the Company Equity Value divided by the Closing Share Price plus (b) the Variable Stock Amount;

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•

“ASC” are to Accounting Standards Codification;

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•

“As Converted Preferred Share Count” the number of shares of DTI Common Stock issuable upon conversion of all of the shares of DTI Preferred Stock issued and outstanding as of immediately prior to the Effective Time;

​

•

“Black-Scholes Model” are to Black-Scholes-Merton option-pricing model;

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•

“Bracewell” are to Bracewell LLP;

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•

“Business Combination” or “business combination” are to the Merger and other transactions contemplated by the Business Combination Agreement;

​

•

“Business Combination Agreement” are to that certain Agreement and Plan of Merger, dated as of February 13, 2023, by and among ROC, Merger Sub and DTI;

​

•

“Business Combination Proposal” are to a proposal to (a) approve and adopt the Business Combination Agreement pursuant to which Merger Sub will merge with and into DTI, with DTI surviving the merger as a wholly owned subsidiary of ROC and (b) approve such merger and the other transactions contemplated by the Business Combination Agreement;

​

•

“CFGI” are to CFGI LLC;

​

•

“Charter Proposal” are to a proposal to approve, assuming the Business Combination Proposal and Nasdaq Proposal are approved and adopted, the Proposed Charter, which will replace the Current Charter and will be in effect upon the Closing;

​

•

“Closing” are to the closing of the business combination;

​

•

“Closing Date” are to the date on which the Closing occurs;

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•

“Closing Share Price” are to $10.10;

​

•

“Code” are to Internal Revenue Code of 1986, as amended;

​

•

“Common Stock” are to prior to giving effect to the business combination, ROC’s common stock, par value $0.0001 per share;

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•

“COMPASS” are to DTI’s Customer Order Management Portal and Support System;

​

•

“Continental” or “transfer agent” are to Continental Stock Transfer & Trust Company, trustee of the Trust Account;

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iv

 

•

“Credit Facility Agreement” are to that certain Revolving Credit, Term Loan and Security Agreement entered into between Drilling Tools International, Inc. and certain of its subsidiaries, as borrowers, and PNC Bank, National Association, as lender and agent, on December 29, 2015, as amended from time to time;

​

•

“Charter” or “Current Charter” are to ROC’s Amended and Restated Certificate of Incorporation, dated December 1, 2021;

​

•

“DCF Analysis” are to the Discounted Cash Flow Analysis;

​

•

“DGCL” are to the General Corporation Law of the State of Delaware;

​

•

“Director Election Proposal” are to a proposal to elect, assuming the Business Combination Proposal, the Nasdaq Proposal and the Charter Proposal are approved and adopted, seven (7) directors to serve staggered terms on the PubCo Board (as defined herein) effective upon the Closing until the 2024, 2025 and 2026 annual meetings of PubCo, as applicable, and until their respective successors are duly elected and qualified;

​

•

“Director Nomination Agreement” are to that certain form of Director Nomination Agreement attached as Exhibit F to the Business Combination Agreement;

​

•

“Dissenting Shares” are to DTI Capital Stock, outstanding immediately prior to the Effective Time and owned by a DTI Stockholder who is entitled to demand and has properly demanded appraisal of such shares in accordance with, and who complies in all respects with, the DGCL;

​

•

“DTI Board” are to the board of directors of DTI;

​

•

“DTI Capital Stock” are to, as applicable, DTI Common Stock and DTI Preferred Stock;

​

•

“DTI Common Stock” are to the common stock, par value $0.01 per share, of DTI;

​

•

“DTI Equity Value” are to $209,273,033;

​

•

“DTI Options” are to each then-outstanding unexercised option (whether vested or exercisable) to purchase shares of DTI Common Stock granted under any DTI Stock Plan;

​

​

•

“DTI Optionholder” are to a holder of DTI Options;

​

•

“DTI Preferred Stock” are to shares of preferred stock, par value $0.01 per share, of DTI;

​

•

“DTI Stock Plan” are to the Directional Rentals Holdings, Inc. (now known as DTI) 2012 Nonqualified Stock Option Plan, as amended;

​

•

“DTI Stockholder” are to a holder of DTI Common Stock or DTI Preferred Stock;

​

•

“DTI Stockholder Lock-up Agreement” are to the lock-up agreements by and between ROC, and all existing DTI Stockholders holding greater than 5% of DTI’s share capital;

​

•

“DTI Stockholder Support Agreement” are to that certain support agreement by and between ROC and DTI’s majority stockholder;

​

•

“EarlyBirdCapital” or “EarlyBird” are to EarlyBirdCapital, Inc.;

​

•

“ECS” or “Energy Capital Solutions” are to Energy Capital Solutions LLC;

​

•

“Effective Time” are to the effective time of the Merger;

​

 

v

 

•

“Escrow Agreement” are to that certain Stock Escrow Agreement, by and among ROC, the Sponsor and the escrow agent named therein and, when amended and restated, to that Amended and Restated Stock Escrow Agreement by and among ROC, the Sponsor and the escrow agent named therein;

​

•

“ESG” are to environmental, social and governance matters;

​

•

“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

​

•

“Fairness Opinion” are to that certain Fairness Opinion of Energy Capital Solutions LLC, dated February 2, 2023;

​

•

“FASB” are to the Financial Accounting Standards Board;

​

•

“Fifth Partners” are to Fifth Partners, LLC;

​

•

“First Boston” are to First Boston Corporation;

​

•

“Founder Shares” are to 5,175,000 shares of Common Stock held or controlled by ROC’s insiders prior to the IPO;

​

•

“Forfeited Founder Share Merger Consideration” are to the number of shares of PubCo Common Stock issued to stockholders of ROC equal to the number of the Founder Shares required to be forfeited by the Sponsor pursuant to the Sponsor Support Agreement;

​

•

“Hicks” are to Hicks Equity Partners LLC, an affiliate of DTI’s majority owner, HHEP-Directional, L.P.;

​

•

“HM” are to Hicks, Muse, Tate, and Furst, Inc.;

​

•

“HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976;

​

•

“IFRS” are to the International Financial Reporting Standards, as issued by the International Accounting Standards Board;

​

•

“Incentive Plan Proposal” are to a proposal to approve, assuming the Business Combination Proposal, the Nasdaq Proposal and the Charter Proposal are approved and adopted, the 2023 Plan, a copy of which is attached to this proxy statement/prospectus/consent solicitation statement as Annex C, including the authorization of the initial share reserve under the 2023 Plan;

​

•

“initial business combination” are to our initial merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;

​

•

“IPO” are to ROC’s initial public offering of units, which closed on December 6, 2021;

​

•

“Investment Company Act” are to the Investment Company Act of 1940, as amended;

​

•

“Merger” are to the merger of Merger Sub (defined below) with and into DTI, with DTI surviving the merger as a wholly owned subsidiary of ROC;

​

 

vi

 

•

“Merger Consideration” means the consideration to be received by DTI Stockholders pursuant to the Business Combination Agreement;

​

•

“Merger Sub” are to ROC Merger Sub, Inc., a Delaware corporation, and a wholly owned subsidiary of ROC;

​

•

“Merger Sub Common Stock” are to Merger Sub’s common stock, par value $0.0001 per share;

​

​

•

“Minimum Cash Condition” are to the condition precedent to the obligation of all parties to the Business Combination Agreement that will only be satisfied if at least $55,000,000 cash is available to ROC at the Closing from either the Trust Account, the PIPE Financing, or a combination of the two (in any case, after giving effect to the redemption of any shares of Common Stock but prior to paying expenses of ROC and DTI, as set forth in the Business Combination Agreement);

​

•

“Monitor” are to Hicks Holdings Operating LLC;

​

•

“Monitoring Fee” are to the quarterly fee paid to Hicks Holdings Operating LLC by DTI pursuant to the Monitoring and Oversight Agreement;

​

•

“Monitoring and Oversight Agreement” are to the Monitoring and Oversight Agreement between DTI and Hicks Holdings Operating LLC, dated January 27, 2012;

​

•

“Nasdaq” are to the Nasdaq Global Market;

​

•

“Nasdaq Proposal” are to a proposal to consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, (a) the issuance of up to 23,253,533 shares of Common Stock pursuant to the Business Combination Agreement and (b) the issuance and sale of       shares of Common Stock in a private offering of securities to certain investors;

​

•

“Other Products & Services” are to DTI’s Other Products and Services division;

​

•

“PCAOB” are to the Public Company Accounting Oversight Board (United States);

​

•

“Per Share Company Common Stock Consideration” are to the number of shares of PubCo Common Stock equal to the quotient of (a) the Aggregate Company Stock Consideration divided by (b) the Company Fully Diluted Shares;

​

•

“Per Share Company Preferred Cash Consideration” are to the quotient of (a) the Aggregate Company Cash Consideration divided by (b) the number of issued and outstanding shares of DTI Preferred Stock as of immediately prior to the Effective Time;

​

•

“Per Share Company Preferred Stock Consideration” means a number of shares of PubCo Common Stock equal to (i) the Aggregate Company Preferred Stock Consideration divided by (ii) the number of issued and outstanding shares of DTI Preferred Stock as of immediately prior to the Effective Time;

​

•

“PIK” are to payable in kind;

​

•

“PIPE Financing” are to the proposed private investment in public equity that ROC is undertaking with respect to its Common Stock in connection with the Business Combination, pursuant to which PIPE Investors have committed to purchase PIPE Shares for a price per share of $10.10;

​

•

“PIPE Funds” are to the proceeds from the PIPE Financing;

​

•

“PIPE Investors” are to investors in the PIPE Financing, which include certain of ROC’s directors and officers, the Sponsor, or their respective affiliates;

​

 

vii

 

•

“PPP Loan” are to Payment Protection Plan loan;

​

•

“Preferred Dividends” are to the DTI redeemable convertible preferred stock entitled to receive cumulative dividends which accumulate at the rate of 7% annually;

​

•

“private rights” are to the rights included within the private units purchased by our Sponsor, directors and officers in the private placement and any rights included within private units issued upon conversion of working capital loans as described herein;

​

•

“private shares” are to the shares of Common Stock included within the private units purchased by our Sponsor, directors and officers in the private placement and any additional shares of common stock included within private units issued upon conversion of working capital loans as described herein;

​

•

“private units” are to the units purchased by our Sponsor, directors and officers in the private placement that occurred simultaneously with the consummation of the IPO and any additional units issued upon conversion of extension loans and/or working capital loans as described herein, each private unit consisting of one share of common stock and one right to receive one-tenth of a share of common stock;

​

•

“Promissory Note” are to the Sponsor issued unsecured promissory note to ROC, dated September 2, 2021;

​

•

“Proposals” are to the Adjournment Proposal, the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal, the Incentive Plan Proposal, and the Director Election Proposal collectively;

​

•

“Proposed Bylaws” are to the proposed amended and restated bylaws of PubCo, which will be effective immediately prior to the completion of the business combination;

​

•

“Proposed Charter” are to the proposed amended and restated certificate of incorporation of PubCo, which will be effective immediately prior to the completion of the business combination;

​

•

“PTD” are to DTI’s Premium Tools division;

​

•

“PubCo” are to ROC at and after the Effective Time;

​

•

“PubCo Board” are to the board of directors of PubCo;

​

•

“PubCo Common Stock” are to shares of common stock, par value $0.0001 per share, of PubCo;

​

•

“PubCo Option” are to stock options to acquire shares of PubCo Common Stock;

​

•

“public rights” are to the rights sold as part of the units in the IPO;

​

•

“public shares” are to shares of Common Stock sold as part of the units in the IPO (whether they were purchased in the IPO or thereafter in the open market);

​

•

“public units” are to the units sold in the IPO, which consist of one public share and one right to receive one-tenth (1/10) of a share of Common Stock;

​

•

“RCF” are to the maximum revolving advance amount of $60.0 million;

​

•

“Redetermination Date” are to the date that the total number of such shares of PubCo Common Stock are finally determined in accordance with the Sponsor Support Agreement if stockholders of ROC are entitled to be issued additional shares of PubCo Common Stock after the Effective Time pursuant to the terms of the Sponsor Support Agreement;

​

•

“Registration Rights Agreement” are to that certain Amended and Restated Registration Rights Agreement, by and between certain stockholders of ROC, certain stockholders of DTI and ROC, to be effective upon Closing;

​

•

“ROC,” “we,” “our,” “us” or the “Company” are to ROC Energy Acquisition Corp., a Delaware corporation;

​

•

“ROC Board” are to the board of directors of ROC;

​

 

viii

 

•

“ROU” are to right of use;

​

•

“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002, as amended;

​

•

“Securities Act” are to the Securities Act of 1933, as amended;

​

•

“SIP” are to DTI’s Safe, Inspired, Productive incentive program;

​

•

“SPACs” are to special purpose acquisition companies;

​

•

“Sponsor” are to ROC Energy Holdings, LLC, a Delaware limited liability company;

​

•

“Sponsor Designee” are to that certain director of PubCo designated by the Sponsor to serve on the PubCo Board pursuant to the Business Combination Agreement;

​

•

“Sponsor Support Agreement” are to that certain Support Agreement by and among Sponsor, DTI and ROC, dated February 13, 2023;

​

•

“Surviving Corporation” are to DTI after the Merger;

​

•

“Target Management Projections” are to DTI’s internal documents relating to the history, current operations, and probable future outlook of DTI, including financial projections of the Company for the year 2023, prepared by management of DTI;

​

•

“Terminal Values” are to the net present value of all unlevered free cash flows for DTI after fiscal year 2025;

​

•

“Transactions” are to the transactions contemplated by the Business Combination Agreement, including the Merger;

​

•

“Transaction Fee” are to the fee paid to Hicks Holdings Operating LLC by DTI pursuant to the Transaction Services Agreement;

​

•

“Transaction Services Agreement” are to the transaction services agreement between DTI and Hicks Holdings Operating LLC, dated January 27, 2012;

​

•

“Trust Account” are to the U.S.-based trust account in which ROC deposited an initial amount of $209,070,000 consisting of the net proceeds of the sale of the public units and private units in connection with the IPO;

​

•

“USRPHC” are to United States real property holding corporation;

​

•

“Variable Stock Amount” are to, (i) for purposes of determining the Aggregate Company Stock Consideration as of the Closing Date, the Forfeited Founder Share Merger Consideration, as determined pursuant to the Sponsor Support Agreement; and (ii) for purposes of determining the Aggregate Company Stock Consideration as of the Redetermination Date, the Forfeited Founder Share Merger Consideration, as determined pursuant to the Sponsor Support Agreement plus any share of PubCo Common Stock to be issued to the stockholders of ROC after the Effective Time pursuant to the Sponsor Support Agreement;

​

•

“WACC” are to weighted average cost of capital;

​

•

“Working Capital Loans” are to certain prospective loans of Sponsor, or certain of ROC’s officers and directors, to ROC to fund working capital deficiencies or finance transaction costs in connection with a business combination;

​

All other capitalized but otherwise undefined terms contained herein shall have the meanings ascribed to them in the Business Combination Agreement.

 

ix

 

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR ROC STOCKHOLDERS

The following questions and answers briefly address some commonly asked questions about the Proposals to be presented at the special meeting of stockholders of the Company, including the proposed business combination. The following questions and answers do not include all the information that is important to the Company’s stockholders. We urge our stockholders to carefully read this entire proxy statement/prospectus/​consent solicitation statement, including the annexes and other documents referred to herein.

Q:

Why am I receiving this proxy statement/prospectus/consent solicitation statement?

​

A:

ROC stockholders are being asked to consider and vote upon, among other things, a proposal to (a) approve and adopt the Business Combination Agreement, pursuant to which Merger Sub will merge with and into DTI, with DTI surviving the merger as a wholly owned subsidiary of ROC, (b) approve such merger and the other transactions contemplated by the Business Combination Agreement and (c) approve, for purposes of complying with applicable listing rules of Nasdaq, (i) the issuance of up to 23,253,533 shares of Common Stock and (ii) the issuance and sale of      shares of Common Stock in the PIPE Financing.

​

A copy of the Business Combination Agreement is attached to this proxy statement/prospectus/​consent solicitation statement as Annex A. This proxy statement/prospectus/consent solicitation statement and its annexes contain important information about the proposed business combination and the other matters to be acted upon at the special meeting. You should read this proxy statement/​prospectus/consent solicitation statement and its annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus/consent solicitation statement and its annexes.

Q:

What is being voted on at the special meeting?

​

A:

ROC stockholders will vote on the following proposals at the special meeting.

​

•

The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Business Combination Agreement and the transactions contemplated thereby (Proposal No. 1).

​

•

The Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, (a) the issuance of up to 23,253,533 shares of Common Stock and (b) the issuance and sale of      shares of Common Stock in the PIPE Financing (Proposal No. 2).

​

•

The Charter Proposal.   To consider and vote upon a proposal to approve, assuming the Business Combination Proposal and Nasdaq Proposal are approved and adopted, the proposed amended and restated certificate of incorporation of ROC (the “Proposed Charter”), which will replace ROC’s Amended and Restated Certificate of Incorporation, dated December 1, 2021 (the “Current Charter”) and will be in effect upon the Closing of the Business Combination (the “Charter Proposal”) (Proposal No. 3). A copy of the Proposed Charter is attached to this proxy statement/prospectus/​consent solicitation statement as Annex B.

​

•

The Incentive Plan Proposal.   To consider and vote upon a proposal to approve, assuming the Business Combination Proposal, the Nasdaq Proposal and the Charter Proposal are approved and adopted, the 2023 Omnibus Incentive Plan (the “2023 Plan”), a copy of which is attached to this proxy statement/prospectus/consent solicitation statement as Annex C, including the authorization of the initial share reserve under the 2023 Plan (the “Incentive Plan Proposal”) (Proposal No. 4).

​

•

The Director Election Proposal — To consider and vote upon a proposal to elect, assuming the Business Combination Proposal, the Nasdaq Proposal and the Charter Proposal are approved and adopted seven (7) directors to serve staggered terms on the PubCo Board effective upon the Closing until the 2024, 2025 and 2026 annual meetings of PubCo, as applicable, and until their respective successors are duly elected and qualified (the “Director Election Proposal”) (Proposal No. 5).

​

•

The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation

​

 

1

 

and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal, the Incentive Plan Proposal, or the Director Election Proposal (Proposal No. 6).

Q:

Are the Proposals conditioned on one another?

​

A:

We may not consummate the business combination unless the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal, the Incentive Plan Proposal, and the Director Election Proposal are approved at the special meeting. The Nasdaq Proposal, the Charter Proposal, the Incentive Plan Proposal, and the Director Election Proposal are conditioned on the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other Proposal set forth in this proxy statement/prospectus/consent solicitation statement.

​

Q:

What will happen in the business combination?

​

A:

Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein, Merger Sub will merge with and into DTI, with DTI surviving the merger. After giving effect to the merger, DTI will become a wholly owned subsidiary of PubCo. At the Closing, up to 23,253,533 shares of Common Stock will be issued to the DTI Stockholders in the business combination in exchange for all outstanding shares of DTI Common Stock. For more information about the Business Combination Agreement and the business combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal.”

​

Q:

How were the transaction structure and consideration for the business combination determined?

​

The business combination was the result of an extensive search for a potential transaction utilizing the global network and investing and operating experience of ROC’s management team and the ROC Board. The transaction structure for the business combination was determined through observing market practice, advice of counsel and the discretion of the parties to the business combination. The consideration for the business combination was determined as a result of extensive negotiations between ROC, DTI and the other parties to the business combination. Please see the section entitled “The Business Combination — Background of the Business Combination” for more information.

Q:

What conditions must be satisfied to complete the business combination?

​

A:

There are several closing conditions in the Business Combination Agreement, including:

​

•

the approval by our stockholders of

​

◦

the Business Combination Proposal;

​

◦

the Nasdaq Proposal;

​

◦

the Charter Proposal;

​

◦

the Director Election Proposal; and

​

◦

the Incentive Plan Proposal.

​

•

ROC having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) under the Exchange Act);

​

•

the approval for listing of the PubCo Common Stock on Nasdaq subject only to official notice of issuance thereof;

​

​

•

satisfaction of the Minimum Cash Condition by ROC having at least $55.0 million cash, after giving effect to redemptions but prior to the payment of expenses in relation to the Business Combination, which may be met by means of the PIPE Financing, cash remaining in the Trust Account, or a combination of both; and

​

•

redemption by holders of public shares of less than ninety-five percent (95%) of the public shares issued and outstanding as of the date of the Business Combination Agreement.

​

 

2

 

For a full summary of the conditions that must be satisfied or waived prior to completion of the business combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Conditions to Closing of the Business Combination.”

Q:

How will we be managed and governed following the business combination?

​

Immediately after the Closing, the ROC Board will be divided into three separate classes, designated as follows:

•

Class III comprised of     ,      and    .

​

It is anticipated that     will be designated Chair of the Board upon the Closing.

Please see the section entitled “Management After the Business Combination.”

Q:

Will ROC obtain new financing in connection with the business combination?

​

A:

The PIPE Investors have committed to purchase from ROC 1,683,168 shares of Common Stock, for an aggregate purchase price of approximately $17 million in the PIPE Financing. PIPE Shares are being offered to potential PIPE Investors at a price of $10.10 per PIPE Share, while the IPO price per public unit was $10.00. Additionally, the Sponsor has agreed to forfeit up to 50% of the Founder Shares to ROC for reissuance to the PIPE Investors in connection with the PIPE Financing, pursuant to the Sponsor Support Agreement.

​

Q:

What equity stake will our current stockholders and the holders of our Founder Shares hold in PubCo following the consummation of the business combination?

​

A:

We anticipate that, upon the Closing, the ownership of PubCo will be as follows:

​

​

•

DTI Stockholders will own 17,985,520 shares of PubCo Common Stock, which will constitute 38% of the outstanding PubCo Common Stock;

​

​

•

the public stockholders will own 22,770,000 shares of PubCo Common Stock, which will constitute 48% of the outstanding PubCo Common Stock;

​

​

•

the PIPE Investors will own 198,019 shares of PubCo Common Stock, which will constitute less than 1% of the outstanding PubCo Common Stock; and

​

​

•

our Sponsor, directors, officers and other initial stockholders and their affiliates will own 6,939,499 shares of PubCo Common Stock, which would be valued at approximately $      , based on the closing price of our Common Stock of $      per share on      , 2023, the record date of the special meeting and will constitute 14% of the outstanding PubCo Common Stock.

​

The number of shares and the interests set forth above assume (a) that no public stockholders elect to have their public shares redeemed, (b) that there are no other issuances of equity interests of ROC or DTI, (c) that, based on the other assumptions and the participation by Sponsor and its affiliates in the PIPE Financing, the Sponsor is required to forfeit 776,250 of the 5,175,000 Founder Shares pursuant to the Sponsor Support Agreement to be included in the consideration to be received by DTI Stockholders and DTI Optionholders pursuant to the Business Combination Agreement, (d) no existing DTI Options are exercised prior to the Effective Time and each such DTI Option is converted at the Effective Time into a PubCo Option pursuant to the terms of the Business Combination Agreement, (e) the automatic conversion of public rights and private rights upon the consummation of the Business Combination and (f) the purchase of 1,485,149 shares of Common Stock by the Sponsor and its affiliates in the PIPE Financing (reflected as shares owned by the Sponsor and not the PIPE Investors).

In comparison, assuming that 95% of ROC stockholders redeem their public shares (it is a condition to Closing for all parties under the Business Combination Agreement that less than 95% of the public shares are redeemed as of the Closing), we anticipate that the ownership of PubCo will be as follows:

 

3

 

​

•

DTI Stockholders will own 18,329,920 shares of PubCo Common Stock, which will constitute 65% of the outstanding PubCo Common Stock;

​

​

•

the public stockholders will own 3,105,000 shares of PubCo Common Stock, which will constitute 11% of the outstanding PubCo Common Stock;

​

​

•

the PIPE Investors will own 198,019 shares of PubCo Common Stock, which will constitute 1% of the outstanding PubCo Common Stock; and

​

​

•

our Sponsor, directors, officers, other initial stockholders and their affiliates will own 6,551,374 shares of PubCo Common Stock, which would be valued at approximately $      , based on the closing price of our Common Stock of $       per share on            , 2023, the record date of the special meeting and will constitute 23% of the outstanding PubCo Common Stock.

​

The number of shares and the interests set forth above assume (a) that public stockholders holding 95% of the public shares elect to have 19,665,000 public shares redeemed, (b) that there are no other issuances of equity interests of ROC or DTI, (c) that, based on the other assumptions and the participation by Sponsor and its affiliates in the PIPE Financing, the Sponsor is required to forfeit 1,164,375 of the 5,175,000 Founder Shares pursuant to the Sponsor Support Agreement to be included in the consideration to be received by the DTI Stockholders and DTI Optionholders pursuant to the Business Combination Agreement, (d) no existing DTI Options are exercised prior to the Effective Time and each such DTI Option is converted at the Effective Time into a PubCo Option pursuant to the terms of the Business Combination Agreement, (e) the automatic conversion of public rights and private rights upon the consummation of the Business Combination and (f) the purchase of 1,485,149 shares of Common Stock by the Sponsor and its affiliates in the PIPE Financing (reflected as shares owned by the Sponsor and not the PIPE Investors). While Closing is not conditioned on ROC successfully raising a specific amount in connection with the PIPE Financing, ROC may need to rely on funds raised in connection with the PIPE Financing to meet the Minimum Cash Condition, which is a condition to Closing for all the parties to the Business Combination Agreement. If ROC is unable to meet the Minimum Cash Condition by means of the PIPE Financing, funds remaining in the Trust Account, any other approved third-party financing or a combination of the foregoing, then DTI will have a right to terminate the Business Combination Agreement, provided DTI is not then in material breach of any of its representations, warranties, covenants or agreements in the Business Combination Agreement or the Company Support Agreements (defined below). As such, if ROC is unable to meet the Minimum Cash Condition, it will be unable to consummate the Business Combination unless it obtains a waiver of the Minimum Cash Condition from DTI. Based on the foregoing assumptions, DTI will have a right to terminate the Business Combination Agreement and, if the Minimum Cash Condition is not satisfied or waived by the parties to the Business Combination Agreement, the Business Combination will not be consummated.

Please see the sections entitled “Summary of the Proxy Statement/Prospectus/Consent Solicitation Statement — Ownership of PubCo After the Closing,” “Summary of the Proxy Statement/Prospectus/​Consent Solicitation Statement — Voting and Implied Ownership of PubCo Upon Consummation of the Business Combination” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

Q:

Why is ROC proposing the Nasdaq Proposal?

​

A:

ROC is proposing the Nasdaq Proposal in order to comply with listing standards of Nasdaq, which require stockholder approval of certain transactions that result in the issuance of 20% or more of a company’s outstanding voting power or shares of common stock outstanding before the issuance of stock or securities. In connection with the business combination and PIPE Financing, we will issue to the DTI Stockholders and the PIPE Investors a combined      shares of Common Stock which would constitute 20% or more of our outstanding voting power and outstanding Common Stock. As a result, we are required to obtain stockholder approval of such issuances pursuant to listing standards of Nasdaq. See the section entitled “Proposal No. 2 — The Nasdaq Proposal” for additional information.

​

 

4

 

Q:

Did the ROC Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the business combination?

​

A:

Yes. The ROC Board has obtained a fairness opinion from Energy Capital Solutions LLC, dated February 2, 2023. The ROC Board has not obtained, nor will it obtain, an additional updated fairness opinion prior to the Closing. The operations and prospects of DTI and its subsidiaries, general market and economic conditions, and other factors that may be beyond the control of ROC and DTI, and on which the Energy Capital Solutions’ opinion was based, may alter the value of ROC or DTI or the price of ROC’s securities by the time the Business Combination is completed. Energy Capital Solutions’ opinion does not speak to any date other than the date of such opinion, and as such, the opinion will not address the fairness of the Merger Consideration, from a financial point of view, at any date after the date of such opinion, including at the time the Business Combination is completed.

​

An owner of Energy Capital Solutions is a limited partner in HHEP-Directional, L.P., which owns a majority of DTI’s voting securities. Accordingly, this individual has an indirect ownership interest in DTI and will benefit from the business combination. The ROC Board was aware of this ownership interest and determined that it did not impair the independence of Energy Capital Solutions in conducting its financial analysis and delivering its Opinion. Energy Capital Solutions advised ROC that the conflicted owner would not participate in any aspect of the preparation and delivery of the fairness opinion. ROC retained Energy Capital Solutions after considering the potential conflict of interest, due to its execution expertise, market knowledge related to traditional energy companies and competitive pricing. Energy Capital Solutions provides merger and acquisition advisory services, fairness opinions, and private capital raising services, all focused on the energy industry. ROC also selected Energy Capital Solutions, because it maintains a strong presence in the oilfield services subsector of the energy industry, including recently providing financial advisory services related to an acquisition for a public oilfield services company.

Energy Capital Solutions’ Opinion addressed the fairness, from a financial point of view, of the merger consideration to be paid by ROC in the Business Combination to ROC. Energy Capital Solutions was not engaged to, and the opinion did not, address the fairness of the merger consideration to ROC stockholders unaffiliated with ROC, the Sponsor or its affiliates. The ROC Board did not obtain an opinion that distinguished the fairness of the merger consideration to be paid by ROC to unaffiliated stockholders versus its fairness to ROC as the acquiror generally. The Sponsor and certain of ROC’s directors and officers have interests that may be different from, or in addition to, those of unaffiliated ROC stockholders, and such differing or additional interests may have informed their evaluation of the merit of the Business Combination. See “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination” for further information on the potentially differing interests of certain persons.

Q:

What are some of the positive and negative factors that the ROC Board considered when determining to enter into the Business Combination Agreement and its rationale for approving the transaction?

​

A:

The factors considered by the ROC Board include, but were not limited to, the following:

​

•

Meets the acquisition criteria that ROC had established to evaluate prospective business combination targets.   The ROC Board determined that DTI satisfies a number of the criteria and guidelines that ROC established at its IPO, including its attractive growth prospects, industry fragmentation ripe for consolidation, its proven, durable and sustainable unit economics, a strong and defensible market position, excellent balance sheet, its experienced management team and its public-company ready financial controls and infrastructure.

​

•

Exposure to an attractive market.   The ROC Board believes that the oil field services industry has extremely strong secular tailwinds due to significant underinvestment in future hydrocarbon supply combined with growing consumption trends for oil, gas and NGLs. Increased future drilling activity should benefit oil field service companies, especially once exposed to the drilling of new oil and gas wells.

​

•

Experienced management team.   The ROC Board believes that DTI’s executive management team is an excellent asset. The DTI executives have been working together for approximately a decade

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5

 

consecutively and is extremely strong given they have been through multiple industry downturns, have completed numerous transactions, have strengthened their customer base and improved cash flow margins.

•

Market positioning.   DTI operates in major producing oil and gas basins in the North America, allowing it to service customers across multiple basins and expand its rental tool fleet easily.

​

•

Strong sponsor.   Hicks has significant investing experience across industries, and has successfully invested in energy for over two decades. This includes an investment in a similar oil field services company.

​

•

Results of the fairness opinion issued by Energy Capital Solutions LLC.   The opinion issued by Energy Capital Solutions that, as of the date of such opinion, subject to and based on the assumptions made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in the opinion, the Merger Consideration to be paid by ROC to DTI Stockholders in the Business Combination pursuant to the Business Combination Agreement was fair, from a financial point of view, to ROC.

​

•

Attractive financial profile.   DTI currently produces and is anticipated to produce strong free cash flow given its already strong EBITDA margins and the attractive industry tailwinds, all while having a very strong balance sheet.

​

•

Other alternatives.   The ROC Board’s belief that, after a thorough review of other business combination opportunities reasonably available to ROC, that the Business Combination represents the best potential business combination for ROC and the most attractive opportunity for ROC’s management to accelerate its business plan based upon the process utilized to evaluate and assess other potential business combination targets, and the ROC Board’s belief that such process has not presented a better alternative.

​

•

Negotiated transaction.   The financial and other terms of the Business Combination Agreement and the fact that such terms and conditions were the product of arm’s length negotiations between ROC and DTI.

​

•

Financial analysis conducted by ROC’s management team and valuation.   The financial analysis conducted by ROC’s management team and reviewed by the ROC Board supported the equity valuation of DTI.

​

•

Value to Stockholders.   The Business Combination implies a $319 million pre-closing enterprise value which represents a sizeable discount to public trading market valuations of comparable companies across other oil field service companies. The set of comparable companies to DTI was selected based on the existing universe of publicly traded companies at the time of approval of the transaction.

​

In addition, the ROC Board determined that the business combination satisfies the investment criteria that the ROC Board identified in connection with the IPO. For more information, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Background of the Business Combination.”

In the course of its deliberations, the ROC Board also considered a variety of uncertainties, risks and other potentially negative factors relevant to the business combination, including the following:

•

Benefits Not Achieved.   The risk that the potential benefits of the Business Combination may not be fully achieved, or may not be achieved within the expected timeframe.

​

•

Liquidation of ROC.   The risks and costs to ROC if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in ROC being unable to effect a business combination by ROC’s liquidation date and thus force a liquidation.

​

•

Exclusivity.   The fact that the Business Combination Agreement includes an exclusivity provision that prohibits ROC from soliciting other business combination proposals, which restricts ROC’s ability, so long as the Business Combination Agreement is in effect, to consider other potential business combinations.

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6

 

•

Shareholder vote.   The risk that DTI Stockholders may fail to provide the votes necessary to effect the Business Combination.

​

•

Future financial performance.   The risk that the future financial performance of DTI may not meet the ROC Board’s expectations due to factors in DTI’s control, including management execution, or out of its control, including economic cycles or other macroeconomic factors.

​

•

Closing conditions.   The fact that completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within ROC’s control, including approval by ROC’s stockholders and approval by Nasdaq of the initial listing application in connection with the Business Combination.

​

•

Litigation.   The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination.

​

•

Fees and expenses.   The fees and expenses associated with completing the Business Combination.

​

•

Other risks.   Various other risks associated with the Business Combination, the business of ROC and the business of DTI described under the section entitled “Risk Factors.”

​

In addition to considering the factors described above, the ROC Board also considered that the officers and directors of ROC, as well as the Sponsor, may have interests in the business combination as individuals that are in addition to, and that may be different from, the interests of ROC’s stockholders. ROC’s independent directors reviewed and considered these interests during the negotiation of the business combination and in evaluating and unanimously approving, as members of the ROC Board, the Business Combination Agreement and the business combination. For more information, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

The ROC Board concluded that the potential benefits that it expects ROC and its stockholders to achieve as a result of the business combination outweigh the potentially negative factors associated with the business combination. Accordingly, the ROC Board, based on its consideration of the specific factors listed above, unanimously (a) determined that the business combination and the other transactions contemplated by the Business Combination Agreement are fair to, and in the best interests of, ROC’s stockholders, (b) approved, adopted and declared advisable the Business Combination Agreement and the transactions contemplated thereby and (c) recommended that the stockholders of ROC approve each of the Proposals.

The above discussion of the material factors considered by the ROC Board is not intended to be exhaustive but does set forth the principal factors considered by the ROC Board.

Q:

What happens if I sell my shares of Common Stock before the special meeting?

​

A:

The record date for the special meeting is earlier than the date that the business combination is expected to be completed. If you transfer your shares of Common Stock after the record date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your shares of Common Stock because you will no longer be able to deliver them for cancellation upon consummation of the business combination in accordance with the provisions described in this proxy statement/prospectus/consent solicitation statement. If you transfer your shares of Common Stock prior to the record date, you will have no right to vote those shares at the special meeting or seek redemption of those shares.

​

Q:

How has the announcement of the business combination affected the trading price of ROC’s units, Common Stock and rights?

​

A:

On February 13, 2023, the last trading date before the public announcement of the business combination, ROC’s public units, Common Stock and public rights closed at $10.48, $10.32 and $0.18, respectively. On February 13, 2023, the trading date immediately prior to the date of this proxy statement/prospectus/

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7

 

consent solicitation statement, ROC’s public units, Common Stock and rights closed at $10.48, $10.33 and $0.18, respectively.

Q:

Following the business combination, will ROC’s securities continue to trade on a stock exchange?

​

A:

Yes. We have applied to begin the listing of PubCo Common Stock on Nasdaq under the new symbol “DTI” following the Closing.

​

Our units will automatically separate into the component securities upon consummation of the business combination and, as a result, will no longer trade as separate securities following the business combination. Additionally, upon consummation of the business combination, each right will be exchanged for one-tenth of one share of Common Stock.

Q:

What vote is required to approve the Proposals presented at the special meeting?

​

A:

Approval of each of the Business Combination Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote (online or by proxy) of the holders of a majority of the outstanding shares of Common Stock entitled to vote and present at the special meeting. Approval of the Charter Proposal requires the affirmative vote (online or by proxy) of the holders of a majority of the outstanding shares of Common Stock entitled to vote. The approval of the election of each director nominee pursuant to the Director Election Proposal requires the affirmative vote of the holders of a plurality of the outstanding shares of Common Stock entitled to vote and actually cast thereon at the special meeting.

​

Q:

May ROC or ROC’s Sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in connection with the business combination?

​

A:

In connection with the stockholder vote to approve the Business Combination Proposal, our Sponsor, directors, officers, advisors and any of their respective affiliates may privately negotiate transactions to purchase public shares from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per share pro rata portion of the Trust Account. Our Sponsor, directors, officers, advisors and any of their respective affiliates will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller of such public shares or during a restricted period under Regulation M under the Exchange Act. Such a purchase could include a contractual acknowledgement that such stockholder, although still the record holder of such public shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights and could include a contractual provision that directs such stockholder to vote such shares in a manner directed by the purchaser. In the event that our Sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the per share pro rata portion of the Trust Account. The purpose of any such purchases of public shares could be to satisfy the closing condition in the Business Combination Agreement pursuant to which ROC is required to have a certain amount of cash at Closing, where it appears that such requirement would otherwise not be met.

​

Q:

How many votes do I have at the special meeting?

​

A:

Our stockholders are entitled to one vote at the special meeting for each share of Common Stock held of record as of            , 2023, the record date for the special meeting. As of the close of business on the record date, there were      outstanding shares of Common Stock, which are held by our public stockholders, our Sponsor and certain directors and officers.

​

Q:

What constitutes a quorum at the special meeting?

​

A:

Holders of a majority in voting power of Common Stock issued and outstanding and entitled to vote at the special meeting, virtually present or represented by proxy, constitute a quorum. In the absence of a quorum, the chairman of the meeting has the power to adjourn the special meeting. As of the

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8

 

record date for the special meeting,      shares of Common Stock would be required to achieve a quorum. Abstentions will count as present for the purposes of establishing a quorum with respect to each Proposal.

Q:

How will ROC’s Sponsor, directors and officers vote?

​

A:

Our Sponsor, directors and officers have agreed to vote any shares of Common Stock owned by them in favor of the business combination. Currently, our Sponsor, directors and officers own approximately 22.4% of our issued and outstanding shares of Common Stock.

​

Q:

What interests do ROC’s officers and directors and the Sponsor have in the business combination?

​

A:

In considering the recommendation of the ROC Board to vote in favor of the business combination, stockholders should be aware that, aside from their interests as stockholders, our Sponsor and certain of our directors and officers have interests in the business combination that are different from, or in addition to, those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the business combination, and in recommending to stockholders that they approve the business combination. Stockholders should take these interests into account in deciding whether to approve the business combination. These interests include, among other things:

​

•

the fact that our Sponsor may convert any working capital loans that it may make to us into up to an additional 150,000 private units at the price of $10.00 per unit;

​

•

the fact that our Sponsor, officers and directors have agreed not to redeem any of the shares of our Common Stock held by them in connection with a stockholder vote to approve the business combination;

​

•

the fact that our Sponsor, directors and officers paid an aggregate of $25,000 for the Founder Shares and that such securities will have a significantly higher value at the time of the business combination, which if unrestricted and freely tradable would be valued at approximately $      , based on the closing price of our Common Stock of $      per share on      , 2023, the record date for the special meeting, resulting in a theoretical gain of $      ;

​

•

the fact that certain of ROC’s officers and directors collectively own, directly or indirectly, a material interest in our Sponsor;

​

•

the anticipated appointment of Daniel Kimes, a member of the ROC Board and ROC’s Chief Executive Officer, as a director on the PubCo Board in connection with the Closing;

​

•

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser amount per public share as is in the Trust Account on the liquidation date, by the claims of (a) any third party (other than our independent public accountants) for services rendered or products sold to us or (b) a prospective target business with which we have entered into an acquisition agreement, but only if such a third party or target business has not executed a waiver of all rights to seek access to the Trust Account;

​

•

the fact that our Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to stockholders rather than liquidate;

​

•

the fact that our Sponsor and its affiliates can earn a positive rate of return on their investment, even if other ROC stockholders experience a negative rate of return in the post-business combination company;

​

•

the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations; and

​

•

the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination is not completed.

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9

 

In addition, on January 16, 2022, we issued an unsecured promissory note in the principal amount of up to $800,000 to FP SPAC 2, LLC, a Delaware limited liability company (“FP SPAC 2”) and an affiliate of our Sponsor. The note does not bear interest and is repayable in full upon consummation of an initial business combination. If we do not complete an initial business combination, the note will not be repaid, and all amounts owed under it will be forgiven. Upon the consummation of an initial business combination, FP SPAC 2 will have the option, but not the obligation, to convert all or a portion of the unpaid principal balance of the note into shares of Common Stock equal to the principal amount of the note. The note is subject to customary events of default, the occurrence of which automatically trigger the unpaid principal balance of the note and all other sums payable with regard to the note becoming immediately due and payable.

Further, as of the date of this proxy statement/prospectus/consent solicitation statement, there has been no reimbursement to our Sponsor, officers or directors for any out-of- pocket expenses incurred in connection with activities on our behalf, and no such amounts have been incurred as of the date of this proxy statement/prospectus/consent solicitation statement. However, as of the date of this proxy statement/prospectus/consent solicitation statement, an affiliate of our Sponsor has incurred approximately $     of expenses on ROC’s behalf, of which approximately $     has been repaid by ROC to the affiliate of our Sponsor. The balance will be repaid by ROC at the Closing.

The ROC Board did not obtain a fairness opinion that opined as to the fairness of the merger consideration to be paid by ROC, from a financial point of view, to unaffiliated stockholders, but rather obtained one that opined as to its fairness to ROC generally.

Q:

What happens if I vote against the Business Combination Proposal?

​

A:

Under our Charter, if the Business Combination Proposal is not approved and we do not otherwise consummate an alternative business combination by June 6, 2023 or such later liquidation date as may be approved by our stockholders, we will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to our public stockholders.

​

Q:

Do I have redemption rights?

​

​

A:

If you are a holder of public shares, you may elect to have your public shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the business combination, including interest not previously released to us to pay our franchise and income taxes, by (b) the total number of then outstanding shares of Common Stock included as part of the units sold in the IPO; provided that we will not redeem any public shares to the extent that such redemption would result in ROC having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) under the Exchange Act) of less than $5,000,001 unless our Common Stock otherwise does not constitute “penny stock” as such term is defined in Rule 3a51-1 under the Exchange Act. Because we anticipate that the Common Stock will be listed on Nasdaq at the Closing, and such listing would mean that the Common Stock would not constitute “penny stock” as such term is defined in Rule 3a51-1 under the Exchange Act, we do not anticipate the $5,000,001 net tangible asset threshold being applicable. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” ​(as defined under Section 13(d)(3) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the public shares (the “20% threshold”). Unlike some other blank check companies, other than the net tangible asset requirement and the 20% threshold described above, we have no specified maximum redemption threshold and there is no other limit on the number of public shares that you can redeem. Holders of our outstanding public rights do not have redemption rights in connection with the business combination. Our Sponsor, officers and directors have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the business combination. For illustrative purposes, based on the fair value of cash and marketable securities held in the Trust Account as of March 31, 2023 of approximately $217.7 million, the estimated per share redemption price would have been approximately $10.52. Additionally, shares properly tendered for redemption will only be redeemed if the business combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the

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10

 

Trust Account (including interest but net of franchise and income taxes payable) (a) in connection with a stockholder vote to approve an amendment to our Charter that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination by June 6, 2023 or such later liquidation date as may be approved by our stockholders, or with respect to any other provision relating to the rights of holders of Common Stock or pre-initial business combination activity, (b) in connection with the liquidation of the Trust Account or (c) if we subsequently complete a different business combination on or before June 6, 2023.

Q:

Will how I vote affect my ability to exercise redemption rights?

​

A:

No. You may exercise your redemption rights whether you vote your shares of Common Stock for or against or abstain from voting on the Business Combination Proposal or any other Proposal described in this proxy statement/prospectus/consent solicitation statement. As a result, the business combination can be approved by stockholders who will redeem their shares and no longer remain stockholders.

​

Q:

How do I exercise my redemption rights?

​

A:

In order to exercise your redemption rights, you must (a) if you hold your shares of Common Stock through units, elect to separate your units into the underlying public shares and public rights prior to exercising your redemption rights with respect to the public shares, and (b) prior to 5:00 p.m., Eastern time, on            , 2023 (two business days before the special meeting), tender your shares physically or electronically and submit a request in writing that we redeem your public shares for cash to Continental Stock Transfer & Trust Company, our transfer agent, at the following address:

​

Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004-1561
Attention:
Email:

A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to his, her or its shares or, if part of such a group, the group’s shares, in excess of the 20% threshold. Accordingly, all public shares in excess of the 20% threshold beneficially owned by a public stockholder or group will not be redeemed for cash. Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent.

However, we do not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Holders of our outstanding units must separate the underlying public shares and public rights prior to exercising redemption rights with respect to the public shares. If you hold units registered in your own name, you must deliver the certificate for such units or deliver such units electronically to Continental Stock Transfer & Trust Company with written instructions to separate such units into public shares and public rights. This must be completed far enough in advance to permit the mailing of the public share certificates or electronic delivery of the public shares back to you so that you may then exercise your redemption rights with respect to the public shares following the separation of such public shares from the units.

If a broker, dealer, commercial bank, trust company or other nominee holds your units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using The Depository Trust Company’s (“DTC”) deposit withdrawal at custodian (“DWAC”) system, a withdrawal of the relevant units and a deposit of the corresponding number of public shares and

 

11

 

public rights. This must be completed far enough in advance to permit your nominee to exercise your redemption rights with respect to the public shares following the separation of such public shares from the units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the vote is taken with respect to the business combination. If you delivered your shares for redemption to the transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that the transfer agent return the shares (physically or electronically). You may make such request by contacting our transfer agent at the email address or address listed under the question “Who can help answer my questions?” below.

Q:

What are the material U.S. federal income tax consequences to the ROC stockholders as a result of the business combination?

​

A:

ROC stockholders will retain their shares of Common Stock, will not receive any merger consideration and will not receive any additional shares of Common Stock in the business combination. As a result, there will be no material U.S. federal income tax consequences to the current ROC stockholders as a result of the business combination, regardless of whether the business combination qualifies as a “reorganization” within the meaning of Section 368(a) of the Code.

​

Q:

What are the material U.S. federal income tax consequences of the business combination to DTI Stockholders?

​

​

A:

The parties to the Business Combination Agreement intend for the business combination to qualify as a “reorganization” within the meaning of Section 368(a) of the Code for U.S. federal income tax purposes. Although it is not a condition to closing that an opinion of counsel regarding the tax treatment of the business combination be provided, Bracewell is providing, in connection with the filing of the Registration Statement, its opinion of counsel to the effect (i) that the business combination will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) the disclosure contained in this proxy statement/prospectus/consent solicitation statement under the heading “Material U.S. Federal Income Tax Considerations — Tax Treatment to U.S. Holders of DTI Capital Stock” constitutes its opinion insofar as it expresses conclusions as to the application of U.S. federal income tax law. Such opinion is based on representations and assumptions as to factual matters made by DTI and ROC and on current law. Provided that the business combination qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, no gain or loss generally will be recognized by a U.S. Holder (as defined below) of DTI Capital Stock for U.S. federal income tax purposes on the exchange of its shares of DTI Capital Stock for Common Stock in the business combination, except in connection with the receipt of cash by the U.S. Holder. For a more complete discussion of the material U.S. federal income tax consequences of the business combination, please carefully review the information set forth in the section titled “Material U.S. Federal Income Tax Considerations  — Tax Treatment to U.S. Holders of DTI Capital Stock” of this proxy statement/prospectus/consent solicitation statement. The tax consequences of the business combination to any particular DTI Stockholder will depend on that stockholder’s particular facts and circumstances. Accordingly, DTI Stockholders are urged to consult with, and rely solely upon, their own tax advisors as to the specific tax consequences of the business combination, including the effects of U.S. federal, state or local, or non-U.S. tax laws.

​

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

​

A:

The receipt of cash by a holder of Common Stock in redemption of such stock will be a taxable event for U.S. federal income tax purposes in the case of a U.S. Holder (as defined below) and could be a taxable event for U.S. federal income tax purposes in the case of a Non-U.S. Holder (as defined below). Please see the discussion below under the caption “Proposal No. 1 — The Business Combination Proposal — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders” or “Proposal No. 1 — The Business Combination Proposal — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of Non-U.S. Holders,” as applicable, for

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12

 

additional information. All holders considering the exercise of their redemption rights should consult with, and rely solely upon, their own tax advisors with respect to the U.S. federal income tax consequences of exercising such redemption rights.

Q:

Do ROC stockholders have appraisal rights if I object to the proposed business combination?

​

A:

No. There are no appraisal rights available to holders of Common Stock in connection with the business combination.

​

Q:

What happens to the funds deposited in the Trust Account after consummation of the business combination?

​

A:

If the Business Combination Proposal is approved, we intend to use a portion of the funds held in the Trust Account to pay (a) a portion of our aggregate costs, fees and expenses in connection with the consummation of the business combination, (b) tax obligations and (c) for any redemptions of public shares. The remaining balance in the Trust Account, together with the proceeds of the PIPE Financing, will be used for general corporate purposes of PubCo. See the section entitled “Proposal No. 1 — The Business Combination Proposal” for additional information.

​

Q:

What happens if the business combination is not consummated or is terminated?

​

A:

There are certain circumstances under which the Business Combination Agreement may be terminated. See the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Termination” for additional information regarding the parties’ specific termination rights. In accordance with our Charter, if an initial business combination is not consummated by June 6, 2023 (or by such other date approved by our stockholders as reflected in an amendment to the Charter), we will (a) cease all operations except for the purpose of winding up, (b) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of such net interest to pay dissolution expenses and net of taxes payable), divided by the number of then-outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (c) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the ROC Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

​

We expect that the amount of any distribution our public stockholders will be entitled to receive upon our dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the business combination, subject in each case to our obligations under the DGCL to provide for claims of creditors and other requirements of applicable law. Holders of our Founder Shares are not entitled to liquidating distributions with respect to those shares.

In the event of liquidation, there will be no distribution with respect to our outstanding rights. Accordingly, in such an event, the rights will expire worthless.

Q:

When is the business combination expected to be consummated?

​

A:

It is currently anticipated that the business combination will be consummated promptly following the special meeting of our stockholders to be held on            , 2023, provided that all the requisite stockholder approvals are obtained and other conditions to the consummation of the business combination have been satisfied or waived. For a description of the conditions for the completion of the business combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Conditions to Closing of the Business Combination.”

​

 

13

 

Q:

What do I need to do now?

​

A:

You are urged to read carefully and consider the information contained in this proxy statement/​prospectus/consent solicitation statement, including the section entitled “Risk Factors” and the annexes attached to this proxy statement/prospectus/consent solicitation statement, and to consider how the business combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus/consent solicitation statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

​

Q:

How do I vote?

​

A:

If you were a holder of record of Common Stock on      , 2023, the record date for the special meeting of our stockholders, you may vote with respect to the Proposals online at the special meeting or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to virtually attend the special meeting and vote online, obtain a proxy from your broker, bank or nominee.

​

Q:

What will happen if I abstain from voting or fail to vote at the special meeting?

​

A:

At the special meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for purposes of determining whether a quorum is present. For purposes of approval, failure to vote will have no effect on the Business Combination Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, the Director Election Proposal, or the Adjournment Proposal. An abstention will have no effect on the Director Election Proposal. An abstention will have the same effect as a vote “AGAINST” the Business Combination Proposal, the Nasdaq Proposal, the Incentive Plan Proposal, and the Adjournment Proposal. A failure to vote or an abstention will have the same effect as a vote “AGAINST” the Charter Proposal.

​

Q:

What will happen if I sign and submit my proxy card without indicating how I wish to vote?

​

A:

Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a Proposal will be voted “FOR” each Proposal being submitted to a vote of the stockholders at the special meeting.

​

Q:

If I am not going to attend the special meeting online, should I submit my proxy card instead?

​

A:

Yes. Whether you plan to attend the special meeting or not, please read the enclosed proxy statement/​prospectus/consent solicitation statement carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

​

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

​

A:

No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. We believe the Proposals presented to our stockholders will be considered non-discretionary and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

​

 

14

 

Q:

May I change my vote after I have submitted my executed proxy card?

​

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to us at the address listed below so that it is received by us prior to the special meeting or by attending the special meeting online and voting there. You also may revoke your proxy by sending a notice of revocation to us, which must be received prior to the special meeting.

​

Q:

What should I do if I receive more than one set of voting materials?

​

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement/​prospectus/consent solicitation statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

​

Q:

Who can help answer my questions?

​

A:

If you have questions about the Proposals or if you need additional copies of the proxy statement/​prospectus/consent solicitation statement or the enclosed proxy card you should contact:

​

Daniel Kimes, Chief Executive Officer and Director
c/o ROC Energy Acquisition Corp.
16400 Dallas Parkway
Dallas, TX 75248
Email:
Tel: (972) 392-6180

You may also contact our proxy solicitor at:

Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Individuals call toll-free (800) 662-5200
Banks and brokers call (203) 658-9400

Email:

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the special meeting.

You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find Additional Information.”

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your shares (either physically or electronically) to our transfer agent at least two business days prior to the special meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your shares, please contact:

Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004-1561
Attention:
Email:

Q:

Who will solicit and pay the cost of soliciting proxies?

​

​

A:

The ROC Board is soliciting your proxy to vote your shares of Common Stock on all matters scheduled to come before the special meeting. We will pay the cost of soliciting proxies for the special meeting.

​

 

15

 

We have engaged Morrow Sodali LLC to assist in the solicitation of proxies for the special meeting. We have agreed to pay Morrow Sodali LLC a fee of $     , plus disbursements. We will reimburse Morrow Sodali LLC for reasonable out-of-pocket expenses and will indemnify Morrow Sodali LLC and its affiliates against certain claims, liabilities, losses, damages and expenses. We will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of Common Stock for their expenses in forwarding soliciting materials to beneficial owners of Common Stock and in obtaining voting instructions from those owners. Our directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q:

Are there any federal or state regulatory requirements that must be complied with or approvals obtained in connection with the business combination?

​

A:

Neither ROC nor DTI is aware of any material regulatory approvals or actions that are required for completion of the business combination other than those required under the HSR Act. See “Proposal No. 1 — The Business Combination Proposal — Regulatory Matters.”

​

 

16

 

 

18

 

19

 

20

 

21

 

22

 

​

23

 

24

 

25

 

 

​

​

​

No Redemption Scenario(1)

​

​

25% Redemption Scenario(2)

​

​

50% Redemption Scenario(3)

​

​

80% Redemption Scenario(4)(5)

​

​

​

​

PubCo Common Stock

​

​

Voting Power and Implied Ownership (%)

​

​

PubCo Common Stock

​

​

Voting Power and Implied Ownership (%)

​

​

PubCo Common Stock

​

​

Voting Power and Implied Ownership (%)

​

​

PubCo Common Stock

​

​

Voting Power and Implied Ownership (%)

​

Public Stockholders(6)

​

​

​

​

22,770,000

​

​

​

​

​

45

​

​

​

​

​

17,595,000

​

​

​

​

​

39

​

​

​

​

​

12,420,000

​

​

​

​

​

31

​

​

​

​

​

6,135,517

​

​

​

​

​

18

​

​

Sponsor and other initial stockholders(7)(10)​

​

​

​

​

6,939,499(8)(9)

​

​

​

​

​

14

​

​

​

​

​

6,939,499(8)(9)

​

​

​

​

​

15

​

​

​

​

​

6,939,499(8)(9)

​

​

​

​

​

17

​

​

​

​

​

6,939,499(8)(9)

​

​

​

​

​

20

​

​

DTI Stockholders

​

​

​

​

20,407,243(9)

​

​

​

​

​

41

​

​

​

​

​

20,407,243(9)

​

​

​

​

​

45

​

​

​

​

​

20,407,243(9)

​

​

​

​

​

51

​

​

​

​

​

20,407,243(9)

​

​

​

​

​

61

​

​

PIPE Investors(10)​

​

​

​

​

198,019

​

​

​

​

​

*

​

​

​

​

​

198,019

​

​

​

​

​

*

​

​

​

​

​

198,019

​

​

​

​

​

*

​

​

​

​

​

198,019

​

​

​

​

​

1

​

​

Total(11)​

​

​

​

​

50,314,761

​

​

​

​

​

100

​

​

​

​

​

45,139,761

​

​

​

​

​

100

​

​

​

​

​

39,964,761

​

​

​

​

​

100

​

​

​

​

​

33,680,278

​

​

​

​

​

100

​

​

​

​

*

Less than 1%

​

​

27

 

​

28

 

29

 

30

 

The number of shares and the interests set forth above assume (a) that public stockholders holding 95% of the public shares elect to have 19,665,000 public shares redeemed, (b) that there are no other issuances of equity interests of ROC or DTI, (c) that, based on the other assumptions and the participation by Sponsor and its affiliates in the PIPE Financing, the Sponsor is required to forfeit 1,164,375 of the 5,175,000 Founder Shares pursuant to the Sponsor Support Agreement to be included in the consideration to be received by the DTI Stockholders and DTI Optionholders pursuant to the Business Combination Agreement, (d) no existing DTI Options are exercised prior to the Effective Time and each such DTI Option is converted at the Effective Time into a PubCo Option pursuant to the terms of the Business Combination Agreement, (e) the automatic conversion of public rights and private rights upon the consummation of the Business Combination and (f) the purchase of 1,485,149 shares of Common Stock by the Sponsor and its affiliates in the PIPE Financing (reflected as shares owned by the Sponsor and not the PIPE Investors). While Closing is not conditioned on ROC successfully raising a specific amount in connection with the PIPE Financing, ROC may need to rely on funds raised in connection with the PIPE Financing to meet the Minimum Cash Condition, which is a condition to Closing for all the parties to the Business Combination Agreement. If ROC is unable to meet the Minimum Cash Condition by means of the PIPE Financing, funds remaining in the Trust Account, any other approved third-party financing or a combination of the foregoing, then DTI will have a right to terminate the Business Combination Agreement, provided DTI is not then in material breach of any of its representations, warranties, covenants or agreements in the Business Combination Agreement or the Company Support Agreements (defined below). As such, if ROC is unable to meet the Minimum Cash Condition, it will be unable to consummate the Business Combination unless it obtains a waiver of the Minimum Cash Condition from DTI. Based on the foregoing assumptions, DTI will have a right to terminate the Business Combination Agreement and, if the Minimum Cash Condition is not satisfied or waived by the parties to the Business Combination Agreement, the Business Combination will not be consummated.

The following table illustrates the potential impact of redemptions on the per share value of the shares owned by non-redeeming stockholders at the following redemption levels, as based on the fair value of cash and marketable securities held in the Trust Account as of March 31, 2023, of approximately $217.7 million:

​

​

​

Redemption Level

​

​

​

​

80%

​

​

50%

​

​

25%

​

​

0%

​

Implied Value per public share – Pre-Closing

​

​

​

$

10.52

​

​

​

​

$

10.52

​

​

​

​

$

10.52

​

​

​

​

$

10.52

​

​

Implied Value per public share – Impact of Founder Shares, public rights, private shares and private rights

​

​

​

$

4.30

​

​

​

​

$

6.37

​

​

​

​

$

7.60

​

​

​

​

$

7.93

​

​

Please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

Board of Directors of PubCo Following the Business Combination

Upon completion of the Business Combination, the board of directors of PubCo will consist of seven directors, five of whom will be designated by DTI, one of whom will be PubCo’s Chief Executive Officer

31

 

​

32

 

33

 

​

34

 

​

35

 

​

36

 

​

37

 

 

 

40

 

 

•

changes in applicable laws or regulations;

​

•

the ability of DTI to execute its business model; and

​

•

the possibility that ROC or the post-combination company may be adversely affected by other economic, business or competitive factors.

​

Should one or more of the risks or uncertainties described in this proxy statement/prospectus/consent solicitation statement materialize, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact the operations and projections discussed herein can be found in the section entitled “Risk Factors.”

 

42

 

 

•

supply disruptions in key oil producing regions;

​

•

terrorist attacks and armed conflicts, including the current conflict between Russia and Ukraine, which could cause temporary price increases, thereby dampening demand; and

​

•

global pandemics.

​

The oil and gas industry is cyclical and has historically experienced periodic downturns. These downturns have been characterized by diminished demand for our products and services and downward pressure on the prices we charge. These downturns generally cause many E&P companies to reduce their capital budgets and drilling activity. Any future downturn or expected downturn could result in a significant decline in demand for oilfield services and adversely affect our business, results of operations and cash flows.

Customer expenditure levels could also drop if our customers face difficulty in accessing capital. If commodity prices drop, our customers may face liquidity constraints and the deterioration of their respective credit worthiness. Moreover, our customers may have limited viable financing alternatives in light of unfavorable lending and investment policies held by financial institutions associated with concerns about environmental impacts of the oil and gas industry or its products. Similarly, certain institutional investors have divested themselves of investments in this industry. If any of our customers experience any of these challenges, they may reduce spending, which could adversely affect our business, results of operations and cash flows.

Growth in U.S. drilling activity, and our ability to benefit from such growth, could be adversely affected by any significant constraints in equipment, labor or takeaway capacity in the regions in which we operate.

Growth in U.S. drilling activity may be impacted by, among other things, the availability and cost of drilling equipment, pipeline capacity, and material and labor shortages. Significant growth in drilling activity could strain availability of the equipment, materials and labor required to drill and complete a well, together with the ability to move the produced oil and natural gas to market. Should significant constraints develop that materially impact the efficiency and economics of oil and gas producers, growth in U.S. drilling activity could be adversely affected. This would have an adverse impact on the demand for the products we sell and rent, which could have a material adverse effect on our business, results of operations and cash flows.

We depend on a relatively small number of customers in a single industry. The loss of an important customer could adversely affect our business, results of operations and financial condition.

Our customers are primarily diversified oilfield service companies and E&P operators. Historically, we have been dependent on a relatively small number of customers for our revenues. In 2021 and 2022, our largest customer accounted for approximately 15.2% and 13.7% of our revenue, respectively. In 2021 and 2022, our ten largest customers accounted for approximately 70.2% and 57.7% of our revenue, respectively. Our business, results of operations and financial condition could be materially adversely affected if an important customer ceases to engage us for our services on favorable terms, or at all, or fails to pay or delays paying us significant amounts of our outstanding receivables.

We have operated under a first call supply agreement with our largest customer since 2013. We and our customer have agreed to multiple extensions of this agreement, and we are currently negotiating an extension beyond 2022. If we are unable to successfully negotiate this extension, then our ability to do business with this customer may be greatly reduced. Moreover, the supply agreements that we have entered into with our other customers are also of limited duration and require periodic extensions. Similarly, a failure to agree such extensions may hinder our ability to do business with these customers.

Additionally, the E&P industry is characterized by frequent consolidation activity. Changes in ownership of our customers may result in the loss of, or reduction in, business from those customers. Moreover, customers may use their size and purchasing power to seek economies of scale and pricing concessions. Consolidation may also result in reduced capital spending by some of our customers, which may lead to a decreased demand for our services and equipment. We cannot assure you that we will be able to maintain our level of sales to a customer that has consolidated or replace that revenue with increased business activity

 

44

 

with other customers. As a result, the acquisition of one or more of our primary customers may have a significant negative impact on our business, results of operations, financial condition or cash flows. We are unable to predict what effect consolidations in the industry may have on price, capital spending by our customers, our market share and selling strategies, our competitive position, our ability to retain customers or our ability to negotiate favorable agreements with our customers.

Termination of, or failure to comply with, the terms of our non-exclusive distribution agreement with Superior Drilling Products, Inc. (“SDPI”) could have a material adverse effect on our business.

In 2016, we entered into an exclusive distribution agreement with SDPI with respect to the Drill-N-Ream™. In 2017, SDPI determined that we did not meet defined market share goals, and as a result our distribution rights with respect to the Drill-N-Ream™ are no longer contractually exclusive. Accordingly, SDPI could choose to distribute the Drill-N-Ream™ through other companies who will then compete with us in this space. These risks could be exacerbated if SDPI were to enter into an exclusive distribution agreement with, or sell the intellectual property rights to the Drill-N-Ream™ to, one of our competitors, or if one of our competitors were to acquire SDPI. While we remain the Drill-N-Ream™’s sole North American distributor, we cannot guarantee that this will remain the case. Our inability to remain the sole North American distributor of the Drill-N-Ream™ could have a material adverse effect on our business, results of operations and cash flows.

We may be unable to employ a sufficient number of skilled and qualified workers to sustain or expand our current operations.

The delivery of our products and services requires personnel with specialized skills and experience. Our ability to be productive and profitable will depend upon our ability to attract and retain skilled workers. In addition, our ability to expand our operations depends in part on our ability to increase the size of our skilled labor force. The demand for skilled workers is high, and the cost to attract and retain qualified personnel has increased. During industry downturns, skilled workers may leave the industry, reducing the availability of qualified workers when conditions improve. In addition, a significant increase in the wages paid by competing employers both within and outside of our industry could result in increases in the wage rates that we must pay. Throughout 2021 and 2022, our expenses related to salaries and wages increased materially, especially those expenses related to certain key oil and gas producing regions, as we sought to meet increasing customer demand. If we are not able to employ and retain skilled workers, our ability to respond quickly to customer demands or strong market conditions may inhibit our growth, which could have a material adverse effect on our business, results of operations and cash flows.

Our business depends on the continuing services of certain of our key managers and employees.

We depend on key personnel. The loss of key personnel could adversely impact our business if we are unable to implement our strategy and successfully manage our business in their absence. The loss of qualified employees or an inability to retain and motivate additional highly-skilled employees required for the operation and expansion of our business could hinder our ability to successfully maintain and expand our market share.

Equity interests in us are a substantial portion of the net worth of our executive officers and several of our other senior managers. Following the expiration of the lock-up period following the completion of the Business Combination, such equity interests will be more liquid than they are now. As a result, those executive officers and senior managers may have less incentive to remain employed by us if they were to sell their equity interests. After terminating their employment with us, some of them may become employed by our competitors.

We are an emerging growth company and smaller reporting company and as such are subject to various risks unique only to emerging growth companies and smaller reporting companies, including but not limited to, no requirement to provide an assessment of the effectiveness of internal controls over financial reporting.

We are an “emerging growth company” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (i) December 31, 2026, the last day of the fiscal year following the fifth anniversary of the date of the first sale of the IPO; (ii) the last day of the fiscal year in which we have total

 

45

 

annual gross revenues of $1 billion or more; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under applicable SEC rules.

We expect that we will remain an emerging growth company for the foreseeable future but cannot retain our emerging growth company status indefinitely and will no longer qualify as an emerging growth company on or before December 31, 2026. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

•

being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

​

•

not being required to comply with the requirement of auditor attestation of our internal controls over financial reporting;

​

•

not being required to comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

​

•

reduced disclosure obligations regarding executive compensation; and

​

•

not being required to hold a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

​

Additionally, as an emerging growth company and smaller reporting company our status as such carries various unique risks such as the risk that our financial statements may not be comparable to those of other public companies, and the risk that we will not be required to provide an assessment of the effectiveness of our internal controls over financial reporting until our second annual report following our initial public offering.

For as long as we continue to be an emerging growth company, we expect that we will take advantage of the reduced disclosure obligations available to us as a result of that classification. We have taken advantage of certain of those reduced reporting burdens in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

An emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we will not be required to adopt new or revised accounting standards on the dates on which adoption of such standards is required for other public reporting companies.

We are also a “smaller reporting company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and have elected to take advantage of certain of the scaled disclosure available for smaller reporting companies.

The lack of availability of the tools we purchase to rent to our customers and inflation may increase our cost of operations beyond what we can recover through price increases.

Our ability to source tools, such as drill collars, stabilizers, crossover subs, wellbore conditioning tools, drill pipe, hevi-wate drill pipe and tubing, at reasonable cost is critical to our ability to successfully compete. Due to a shortage of steel caused primarily by production disruptions during the COVID-19 pandemic and increased demand as economies rebounded, steel and assembled component prices have been and continue to be elevated. Our business and results of operations may be adversely affected by our inability to manage rising costs and the availability of the tools that we rent to our customers. Additionally, freight

 

46

 

costs, specifically ocean freight costs, have risen significantly due to a number of factors including, but not limited to, a scarcity of shipping containers, congested seaports, a shortage of commercial drivers, capacity constraints on vessels or lockdowns in certain markets. We cannot assure you that we will be able to continue to purchase and move these tools on a timely basis or at commercially viable prices, nor can we be certain of the impact of changes to tariffs and future legislation that may impact trade with China or other countries. Should our current suppliers be unable to provide the necessary tools or otherwise fail to deliver such tools timely and in the quantities required, resulting delays in the provision of rentals to our customers could have a material adverse effect on our business, results of operations and cash flows.

Currently, the United States is experiencing the highest inflation in decades primarily due to supply-chain issues, a shortage of labor and a build-up of demand for goods and services. The most noticeable adverse impact to our business has been increased freight, materials and vehicle-related costs as well as higher salaries and wages. To date, we do not believe that inflation has had a material impact on our financial condition or results of operations because we have been able to increase the prices we receive from our customers. We cannot be sure how long elevated inflation rates will continue. We cannot be confident that all costs will return to the lower levels experienced in prior years even as the rate of inflation abates. Our business and results of operations may be adversely affected by these rising costs to the extent we are unable to recoup them from our customers.

Delays in obtaining, or inability to obtain or renew, permits or authorizations by our customers for their operations could impair our business.

Our customers are required to obtain permits or authorizations from one or more governmental agencies or other third parties to perform drilling and completion activities, including hydraulic fracturing. Such permits or approvals are typically required by state agencies but can also be required by federal and local governmental agencies or other third parties. The requirements for such permits or authorizations vary depending on the location where such drilling and completion activities will be conducted. As with most permitting and authorization processes, there is a degree of uncertainty as to whether a permit will be granted, the time it will take for a permit or approval to be issued and the conditions which may be imposed in connection with the granting of the permit. In some jurisdictions, certain regulatory authorities have delayed or suspended the issuance of permits or authorizations while the potential environmental impacts associated with issuing such permits can be studied and appropriate mitigation measures evaluated.

In Texas, rural water districts have begun to impose restrictions on water use and may require permits for water used in drilling and completion activities. In addition, in January 2021, President Biden indefinitely suspended new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review and reconsideration of federal oil and gas permitting and leasing practices. Although the moratorium was enjoined nationwide in June 2021, and again in August 2022 after the U.S. Court of Appeals for the Fifth Circuit vacated the June 2021 injunction, the Biden Administration may take further actions to limit new oil and natural gas leases.

In November 2021, the Department of the Interior completed its review and issued a report on the federal oil and gas leasing program. The Department of the Interior’s report recommends several changes to federal leasing practices, including changes to royalty payments, bidding and bonding requirements. The effects of this report or other initiatives to reform the federal leasing process could result in additional restrictions or limitations on the issuance of federal leases and permits for drilling on public lands. Permitting, authorization or renewal delays, the inability to obtain new permits or the revocation of current permits could impact our customers’ operations and cause a loss of revenue and potentially have a materially adverse effect on our business, results of operations and cash flows.

Competition within the oil and gas drilling tool rental industry may adversely affect our ability to market our services.

The oil and gas drilling tool rental tool industry is highly competitive and fragmented. The number of rental tool companies active in a given market may exceed the corresponding demand therefor, which could result in active price competition. Some oil and gas drilling companies prioritize rental prices when choosing to contract with a rental tool company, which may further increase competition based primarily on price. In addition, adverse market conditions lower demand for drilling equipment, which results in excess

 

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equipment and lower utilization rates. If market conditions in our operating areas deteriorate from current levels or if adverse market conditions persist, the prices we are able to charge and utilization rates may decline. Moreover, our customers may choose to purchase some or all of the tools that they typically rent from us, thereby reducing the volume of business that we conduct with such customers. Any significant future increase in overall market capacity for the rental equipment or services that we offer could adversely affect our business, results of operations and cash flows.

We may fail to fully execute, integrate, or realize the benefits expected from acquisitions, which may require significant management attention, disrupt our business and adversely affect our results of operations.

As part of our business strategy and to remain competitive, we continually evaluate acquiring or making investments in complementary companies, products or technologies. We may not be able to find suitable acquisition candidates or complete such acquisitions on favorable terms. We may incur significant expenses, divert employee and management time and attention from other business-related tasks and our organic strategy and incur other unanticipated complications while engaging with potential target companies where no transaction is eventually completed.

If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals or expected growth, and any acquisitions we complete could be viewed negatively by our customers, or we could experience unexpected competition from market participants. Any integration process may require significant time and resources. We may not be able to manage the process successfully and may experience a decline in our profitability as we incur expenses prior to fully realizing the benefits of the acquisition. We could also expend significant cash and incur acquisition related costs and other unanticipated liabilities associated with the acquisition, the product or the technology, such as contractual obligations, potential security vulnerabilities of the acquired company and its products and services and potential intellectual property infringement. In addition, any acquired technology or product may not comply with legal or regulatory requirements and may expose us to regulatory risk and require us to make additional investments to make them compliant.

We may not successfully evaluate or utilize the acquired technology or personnel, or accurately forecast the financial impact of an acquisition transaction, including accounting charges and tax liabilities. We could become subject to legal claims following an acquisition or fail to accurately forecast the potential impact of any claims. Any of these issues could have a material adverse impact on our business and results of operations.

New technology may cause us to become less competitive.

New technology that enhances the functionality, performance reliability and design of downhole drilling tools currently on the market may become prevalent in the oilfield services industry. We may face difficulty obtaining these new tools for the purpose of renting them to our customers. Although we believe our fleet of rental equipment currently gives us a competitive advantage, if competitors develop fleets that are more technically advanced than ours, we may lose market share or be placed at a competitive disadvantage. Further, we may face competitive pressure to acquire certain new tools at a substantial cost. Some of our competitors have greater financial, technical and personnel resources that may allow them to enjoy various competitive advantages in the acquisition of new tools. We cannot be certain that we will be able to continue to acquire new tools or convert our existing tools to meet new performance requirements. Such an inability may have a material adverse effect on our business, results of operations and cash flows, including a reduction in the value of assets, and the rates that may be charged for their rental.

We rent tools used in the drilling of oil and gas wells. This equipment may subject us to liability, including claims for personal injury, property damage and environmental contamination, or reputational harm if it fails to perform to specifications.

We rent tools used in oil and gas exploration, development and production. Some of these tools are designed to operate in high-temperature and/or high-pressure environments, and some tools are designed for use in hydraulic fracturing operations. Because of applications to which our tools are exposed, particularly those involving high pressure environments, a failure of such tools, or a failure of our customers to maintain or operate the tools properly, could cause damage to the tools, damage to the property of customers

 

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and others, personal injury and environmental contamination and could lead to a variety of claims against us or reputational harm that could have an adverse effect on our business, results of operations and cash flows.

We indemnify our customers against certain claims and liabilities resulting or arising from our provision of goods or services to them. In addition, we rely on customer indemnifications, generally, and third-party insurance as part of our risk mitigation strategy. However, our insurance may not be adequate to cover our liabilities. In addition, our customers may be unable to satisfy indemnification claims against them. Further, insurance companies may refuse to honor their policies, or insurance may not generally be available in the future, or if available, premiums may not be commercially justifiable. We could incur substantial liabilities and damages that are either not covered by insurance or that are in excess of policy limits, or incur liability at a time when we are not able to obtain liability insurance. Such potential liabilities could have a material adverse effect on our business, results of operations and cash flows.

Our operations, and those of our customers, are subject to hazards inherent in the oil and natural gas industry, which could expose us, and our customers, to substantial liability and cause us to lose substantial revenue.

Risks inherent in our industry include the risks of equipment defects, installation errors, the presence of multiple contractors at the wellsite over which we have no control, vehicle accidents, fires, explosions, blowouts, surface cratering, uncontrollable flows of gas or well fluids, pipe or pipeline failures, abnormally pressured formations and various environmental hazards such as oil spills and releases of, and exposure to, hazardous substances. For example, our operations are subject to risks associated with hydraulic fracturing, including any mishandling, surface spillage or potential underground migration of fracturing fluids, including chemical additives. Both we and our customers are subject to these risks.

The occurrence of any of these events could result in substantial losses to us or to our customers due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigations and penalties, suspension of operations and repairs required to resume operations. The cost of managing such risks may be significant. The frequency and severity of such incidents will affect operating costs, insurability and relationships with customers, employees and regulators.

Should these risks materialize for us, our customers may elect not to rent our tools or utilize our services if they view our environmental or safety record as unacceptable, which could cause us to lose customers and substantial revenues. Should these risks materialize for our customers, they may also suffer similar negative consequences with respect to their own customers and clients. If this were to happen, our customers may no longer be in a position to do business with us, thereby adversely affecting our business, results of operations and cash flows.

Our insurance may not be adequate to cover all losses or liabilities we may suffer. Also, insurance may no longer be available to us or its availability may be at premium levels that do not justify its purchase. The occurrence of a significant uninsured claim, a claim in excess of the insurance coverage limits maintained by us or a claim at a time when we are not able to obtain liability insurance could have a material adverse effect on our ability to conduct normal business operations and on our business, results of operations, financial condition and cash flows. In addition, we may not be able to secure additional insurance or bonding that might be required by new governmental regulations. This may cause us to restrict our operations, which might severely impact our business, results of operations and cash flows.

The global outbreak of COVID-19 and associated responses have had, and are expected to continue to have, an adverse impact on our business and operations.

The ongoing COVID-19 pandemic has negatively affected, and could continue to negatively affect, our revenues and operations. We have experienced, and may experience in the future, slowdowns or temporary idling of certain of our facilities due to a number of factors, including implementing additional safety measures, testing of our team members, team member absenteeism and governmental orders. A prolonged closure could have a material adverse impact on our ability to operate our business and on our results of operations. We have also experienced disruption and volatility in our supply chain, which has resulted, and may continue to result, in increased costs for certain goods. In addition, we have experienced significant delays in shipments of raw materials and finished goods from various vendors. To date, these delays have

 

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not caused us to fail to be able to meet the demands of our customers, though it has encouraged us to diversify our supply chain. We do not expect that supply chain disruptions related to the COVID-19 pandemic will have a materially adverse impact on our business or operations going forward. The spread of COVID-19 has also disrupted and may continue to disrupt logistics necessary to import, export and deliver products to us and our customers. Further, we might experience temporary shortages of labor, making it difficult to provide in-house inspection and machining services to our DTR, Premium Tools and DNR divisions. The duration of the pandemic and its continued adverse impact on our business are unknown and impossible to predict with certainty. Despite the availability of applicable vaccines and boosters, the extent of future impacts of COVID-19 and any new variants thereof on general economic conditions and on our business, operations and results of operations remains uncertain.

Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us.

We typically enter into agreements with our customers governing the provision of our services, which usually include certain indemnification provisions for losses resulting from operations. Such agreements may require each party to indemnify the other against certain claims regardless of the negligence or other fault of the indemnified party. However, many states place limitations on contractual indemnity agreements, particularly agreements that indemnify a party against the consequences of its own negligence. Furthermore, certain states, including Louisiana, New Mexico, Texas and Wyoming, have enacted statutes generally referred to as “oilfield anti-indemnity acts” expressly prohibiting certain indemnity agreements contained in or related to oilfield services agreements. Such oilfield anti-indemnity acts may restrict or void a party’s indemnification of us, which could have a material adverse effect on our business, results of operations and cash flows.

We may incur indebtedness to execute our long-term growth strategy, which may reduce our profitability.

Maintaining a relevant rental fleet requires significant capital. We may require additional capital in the future to maintain and refresh our fleet. For the years ended December 31, 2022, and 2021, we spent $23.8 million, and $11.4 million, respectively, to purchase property, plant and equipment. Historically, we have financed these investments through cash flows from operations and external borrowings. These sources of capital may not be available to us in the future. If we are unable to fund capital expenditures for any reason, we may not be able to capture available growth opportunities or effectively maintain our existing assets and any such failure could have a material adverse effect on our business, results of operations and financial condition. If we incur additional indebtedness, our profitability may be reduced.

Political, regulatory, economic and social disruptions in the countries in which we conduct business could adversely affect our business or results of operations.

In addition to our facilities in the United States, we operate stocking points in Scotland and Germany and facilities in Canada and the United Arab Emirates. Additionally, we provide rentals of downhole drilling tools in Ukraine to Ukraine-based directional drilling companies and drilling contractors through Denimex, which acts as our representative in Ukraine. Instability and unforeseen changes in any of the markets in which we conduct business could have an adverse effect on the demand for, or supply of, the products that we rent and the services that we provide, which in turn could have an adverse effect on our business, results of operations and cash flows. These factors include, but are not limited to:

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nationalization and expropriation;

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potentially burdensome taxation;

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inflationary and recessionary markets, including capital and equity markets;

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civil unrest, labor issues, political instability, natural disasters, terrorist attacks, cyber-terrorism, military activity and wars;

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outbreaks of pandemic or contagious diseases;

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supply disruptions in key oil producing countries;

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tariffs, trade restrictions, trade protection measures or price controls;

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foreign ownership restrictions;

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import or export licensing requirements;

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restrictions on operations, trade practices, trade partners and investment decisions resulting from domestic and foreign laws and regulations;

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changes in, and the administration of, laws and regulations;

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inability to repatriate income or capital;

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reductions in the availability of qualified personnel;

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development and implementation of new technologies;

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foreign currency fluctuations or currency restrictions; and

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fluctuations in the interest rate component of forward foreign currency rates.

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Changes in tax laws or tax rates, adverse positions taken by taxing authorities and tax audits could impact our operating results.

We are subject to the jurisdiction of numerous domestic and foreign taxing authorities. Changes in tax laws or tax rates, the resolution of tax assessments or audits by various tax authorities could impact our operating results. In addition, we may periodically restructure our legal entity organization. If taxing authorities were to disagree with our tax positions in connection with any such restructurings, our effective income tax rate could be impacted. The final determination of our income tax liabilities involves the interpretation of local tax laws, tax treaties and related authorities in each taxing jurisdiction, as well as the significant use of estimates and assumptions regarding future operations and results and the timing of income and expenses. We may be audited and receive tax assessments from taxing authorities that may result in assessment of additional taxes that are ultimately resolved with the authorities or through the courts. We believe these assessments may occasionally be based on erroneous and even arbitrary interpretations of local tax law. Resolution of any tax matter involves uncertainties and there are no assurances that the outcomes will be favorable. If U.S. or foreign tax authorities change applicable tax laws, our overall taxes could increase, and our business, financial condition or results of operating may be adversely impacted.

We may not be able to manage our growth successfully.

The growth of our operations will depend upon our ability to expand our customer base in our existing markets and to enter new markets in a timely manner at reasonable costs, organically or through acquisitions. In order for us to recover expenses incurred in entering new markets and obtaining new customers, we must attract and retain customers on economic terms and for extended periods. Customer growth depends on several factors outside of our control, including economic and demographic conditions, such as population changes, job and income growth, housing starts, new business formation and the overall level of economic activity. We may experience difficulty managing our growth, integrating new customers and employees, and complying with applicable regulations. Expanding our operations also may require continued development of our operating and financial controls and may place additional stress on our management and operational resources. We may be unable to manage our growth and development successfully.

A failure of our information technology infrastructure and cyberattacks could adversely impact us.

We depend on our information technology (“IT”) systems, in particular our Customer Order Management Portal and Support System (“COMPASS”), for the efficient operation of our business. Accordingly, we rely upon the capacity, reliability and security of our IT hardware and software infrastructure and our ability to expand and update this infrastructure in response to our changing needs. Despite our implementation of security measures, our systems are vulnerable to damage from computer viruses, natural disasters, incursions by intruders or hackers, failures in hardware or software, power fluctuations, cyber terrorists and other similar disruptions. Moreover, we cannot guarantee that COMPASS, or features thereof, are not the protected intellectual property of third parties. If this is the case, these third parties may seek to protect their respective intellectual property rights, thereby hindering, or completely eliminating, our ability to use COMPASS and leverage its benefits.

 

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Additionally, we rely on third parties to support the operation of our IT hardware and software infrastructure, and in certain instances, utilize web-based applications. We also provide proprietary and client data to certain third parties, and such third parties may be the subject of IT failures or cyberattacks. The failure of our IT systems or those of our vendors or third parties to whom we disclose certain information to perform as anticipated for any reason or any significant breach of security could disrupt our business and result in numerous adverse consequences, including reduced effectiveness and efficiency of operations, inappropriate disclosure of confidential and proprietary information, reputational harm, increased overhead costs and loss of important information, which could have a material adverse effect on our business and results of operations. In addition, we may be required to incur significant costs to protect against damage caused by these disruptions or security breaches in the future.

Adverse and unusual weather conditions may affect our operations.

Our operations may be materially affected by severe weather conditions in areas where we operate. Severe weather, such as hurricanes, high winds and seas, blizzards and extreme temperatures may cause evacuation of personnel, curtailment of services and suspension of operations, inability to deliver tools to customers in accordance with contract schedules and loss of or damage to our tools and facilities. In addition, variations from normal weather patterns can have a significant impact on demand for oil and natural gas, thereby reducing demand for our tools and services.

Risks Related to Legal and Regulatory Matters

For the purposes of this subsection, “we”, “our” and “us” refer to Drilling Tools International Holdings, Inc. and its subsidiaries.

Our operations require us to comply with various domestic and international regulations, violations of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

We are exposed to a variety of federal, state, local and international laws and regulations relating to matters such as environmental, workplace, health and safety, labor and employment, customs and tariffs, export and re-export controls, economic sanctions, currency exchange, bribery and corruption and taxation. These laws and regulations are complex, frequently change and have tended to become more stringent over time. They may be adopted, enacted, amended, enforced or interpreted in such a manner that the incremental cost of compliance could adversely impact our business, results of operations and cash flows.

In addition to our U.S. operations, we operate stocking points in Scotland and Germany and facilities in Canada and the United Arab Emirates. Additionally, we provide rentals of downhole drilling tools in Ukraine to Ukraine-based directional drilling companies and drilling contractors through Denimex, which acts as our representative in Ukraine. Our operations outside of the United States require us to comply with numerous anti-bribery and anti-corruption regulations. The U.S. Foreign Corrupt Practices Act, among others, applies to us and our operations. Our policies, procedures and programs may not always protect us from reckless or criminal acts committed by our employees or agents, and severe criminal or civil sanctions may be imposed as a result of violations of these laws. We are also subject to the risks that our employees and agents outside of the United States may fail to comply with applicable laws.

In addition, we purchase tools for use in the United States, Canada, the United Kingdom, Germany, the United Arab Emirates and Ukraine for use in such countries. Most movement of these tools involves imports and exports. As a result, compliance with multiple trade sanctions, embargoes and import/export laws and regulations pose a constant challenge and risk to us since a portion of our business is conducted outside of the United States through our subsidiaries. Our failure to comply with these laws and regulations could materially affect our business, results of operations and cash flows.

Compliance with environmental laws and regulations may adversely affect our business and results of operations.

Environmental laws and regulations in the United States and foreign countries affect the services we provide and the equipment we rent and service, as well as the facilities we operate. Such laws and regulations also impact the oil and gas industry more broadly, thereby impacting demand for our products and equipment. For example, we may be affected by such laws as the Resource Conservation and Recovery Act,

 

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the Comprehensive Environmental Response, Compensation, and Liability Act, the Clean Water Act, the Clean Air Act and the Occupational Safety and Health Act of 1970. Further, our customers may be subject to a range of laws and regulations governing hydraulic fracturing, drilling and greenhouse gas emissions.

We are required to invest financial and managerial resources to comply with environmental laws and regulations and believe that we will continue to be required to do so in the future. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of remedial and mitigation obligations, and the issuance of orders enjoining operations. These laws and regulations, as well as the finalizing of other new laws and regulations affecting our operations or the exploration and production and transportation of crude oil and natural gas by our customers, could adversely affect our business and operating results by increasing our costs of compliance, increasing the costs of compliance and costs of doing business for our customers, limiting the demand for our products and services, or restricting our operations. Increased regulation or a move away from the use of fossil fuels caused by additional regulation could also reduce demand for our products and services.

Existing 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.

Changes in environmental requirements related to greenhouse gas emissions may negatively impact demand for our products and services. For example, oil and natural gas E&P may decline as a result of environmental requirements or laws, regulations and policies promoting the use of alternative forms of energy, including land use policies and other actions to restrict oil and gas leasing and permitting in response to environmental and climate change concerns. In January 2021, the Acting Secretary of the Department of the Interior issued an order suspending new leasing and drilling permits for fossil fuel production on federal lands and waters for 60 days. President Biden then issued an executive order indefinitely suspending new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review and reconsideration of federal oil and gas permitting and leasing practices. Several states filed lawsuits challenging the suspension and in June 2021, a judge in the U.S. District Court for the Western District of Louisiana issued a nationwide temporary injunction blocking the suspension. The Department of the Interior successfully appealed the U.S. District Court’s ruling in August 2022, but the moratorium was again enjoined that month. However, the Biden Administration may take further actions to limit new oil and natural gas leases. Further, to the extent that the Department of Interior’s report or other initiatives to reform federal leasing practices result in the development of additional restrictions on drilling, limitations on the availability of leases, or restrictions on the ability to obtain required permits, it could impact our customers’ opportunities and reduce demand for our products and services in the aforementioned areas.

Federal, state and local agencies continue to evaluate climate-related legislation and other regulatory initiatives that would restrict emissions of greenhouse gases in areas in which we conduct business. Because our business depends on the level of activity in the oil and natural gas industry, existing or future laws and regulations related to greenhouse gases could have a negative impact on our business if such laws or regulations reduce demand for oil and natural gas. Likewise, such laws or regulations may result in additional compliance obligations with respect to the release, capture, sequestration and use of greenhouse gases. These additional obligations could increase our costs and have a material adverse effect on our business, results of operations, prospects and financial condition. Additional compliance obligations could also increase costs of compliance and costs of doing business for our customers, thereby reducing demand for our products and services. Finally, increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce climate changes that could have significant physical effects, such as increased frequency and severity of storms, droughts, floods and other climatic events; if such effects were to occur, they could have an adverse impact on our operations.

Many of our customers utilize hydraulic fracturing in their operations. Environmental concerns have been raised regarding the potential impact of hydraulic fracturing on underground water supplies and seismic activity. These concerns have led to several regulatory and governmental initiatives in the United States to restrict the hydraulic fracturing process, which could have an adverse impact on our customers’ production activities. Although we do not conduct hydraulic fracturing, increased regulation and attention given to the hydraulic fracturing process could lead to greater opposition to oil and gas production activities using

 

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hydraulic fracturing techniques. In December 2021, the Texas Railroad Commission, which regulates the state’s oil and gas industry, suspended the use of deep wastewater disposal wells in four oil-producing counties in West Texas. The suspension is intended to mitigate earthquakes thought to be caused by the injection of waste fluids, including saltwater, that are a byproduct of hydraulic fracturing into disposal wells. The ban will require oil and gas production companies to find other options to handle the wastewater, which may include piping or trucking it longer distances to other locations not under the ban. The finalization of new laws or regulations at the federal, state, local or foreign level imposing reporting obligations on, or otherwise limiting, delaying or banning, the hydraulic fracturing process or other processes on which hydraulic fracturing and subsequent hydrocarbon production relies, such as water disposal, could make it more difficult to complete oil and natural gas wells. Further, it could increase our customers’ costs of compliance and doing business, and otherwise adversely affect the hydraulic fracturing services they perform, which could negatively impact demand for our products.

Increasing attention by the public and government agencies to climate change and environmental, social and governance (“ESG”) matters could also negatively impact demand for our products and services and the products of our oil and gas producing customers. In recent years, increasing attention has been given to corporate activities related to ESG in public discourse and the investment community. A number of advocacy groups, both domestically and internationally, have campaigned for governmental and private action to promote change at public companies related to ESG matters, including through the investment and voting practices of investment advisers, public pension funds, universities and other members of the investing community. These activities include increasing attention and demands for action related to climate change and energy rebalancing matters, such as promoting the use of substitutes to fossil fuel products and encouraging the divestment of fossil fuel equities, as well as pressuring lenders and other financial services companies to limit or curtail activities with fossil fuel companies. If this were to continue, it could have a material adverse effect on the valuation of our Common Stock and our ability to access equity capital markets.

In addition, our business could be impacted by initiatives to address greenhouse gases and climate change and incentives to conserve energy or use alternative energy sources. For example, the Inflation Reduction Act of 2022, signed into law by President Biden in August 2022, includes financial and other incentives to increase wind and solar electric generation and encourage consumers to use these alternative energy sources. Additional similar state or federal initiatives to incentivize a shift away from fossil fuels could reduce demand for hydrocarbons, thereby reducing demand for our products and services and negatively impacting our business.

If we are unable to fully protect our intellectual property rights or trade secrets, we may suffer a loss in revenue or any competitive advantage or market share we hold, or we may incur costs in litigation defending intellectual property rights.

While we have some patents and others pending, we do not have patents relating to many of our key processes and technology. If we are not able to maintain the confidentiality of our trade secrets, or if our competitors are able to replicate our technology or services, our competitive advantage would be diminished. We also cannot provide any assurance that any patents we may obtain in the future would provide us with any significant commercial benefit or would allow us to prevent our competitors from employing comparable technologies or processes. We may initiate litigation from time to time to protect and enforce our intellectual property rights. In any such litigation, a defendant may assert that our intellectual property rights are invalid or unenforceable. Third parties from time to time may also initiate litigation against us by asserting that our businesses infringe, impair, misappropriate, dilute or otherwise violate another party’s intellectual property rights. We may not prevail in any such litigation, and our intellectual property rights may be found invalid or unenforceable or our products and services may be found to infringe, impair, misappropriate, dilute or otherwise violate the intellectual property rights of others. The results or costs of any such litigation may have an adverse effect on our business, results of operations and financial condition. Any litigation concerning intellectual property could be protracted and costly, is inherently unpredictable and could have an adverse effect on our business, regardless of its outcome.

Moreover, third parties on whom we rely for certain tools may be subject to litigation to defend their intellectual property rights. If such litigation ends adversely for the third party with whom we deal, our ability to obtain such tools could be significantly limited or restricted. This could have a material adverse effect on our business.

 

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Risks Related to Ownership of PubCo Securities

The financial projections in this proxy statement/prospectus/consent solicitation statement may not prove to be reflective of actual future results.

This proxy statement/prospectus/consent solicitation statement contains projections and forecasts prepared by DTI and ROC. None of the projections and forecasts included in this proxy statement/prospectus/​consent solicitation statement have been prepared with a view toward public disclosure other than to certain parties involved in the Business Combination or toward complying with SEC guidelines or GAAP. Accordingly, such projections and forecasts should not be viewed as public guidance. The projections and forecasts were prepared based on numerous variables and assumptions which are inherently uncertain and may be beyond the control of DTI and ROC and exclude, among other things, transaction-related expenses. Important factors that may affect actual results and results of PubCo’s operations following the Business Combination, or could lead to such projections and forecasts not being achieved include, but are not limited to: customer demand for PubCo’s products, an evolving competitive landscape, rapid technological change, margin shifts in the industry, regulatory changes, successful management and retention of key personnel, unexpected expenses and general economic conditions. While DTI and ROC assume responsibility for the accuracy and completeness of the projections and forecasts to the extent included in this proxy statement/prospectus/consent solicitation statement, investors are cautioned not to place undue reliance on the projections, as the projections may be materially different than actual results.

If PubCo fails to maintain an effective system of disclosure controls and internal control over financial reporting, PubCo’s ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in PubCo and, as a result, the market price of PubCo Common Stock.

As a public company, PubCo will be required to comply with the requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), including, among other things, that PubCo maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by PubCo in the reports that PubCo will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act, is accumulated and communicated to PubCo’s management, including PubCo’s principal executive and financial officers.

We must continue to improve our internal control over financial reporting. PubCo will be required to make a formal assessment of the effectiveness of its internal control over financial reporting and once PubCo ceases to be an emerging growth company, PubCo will be required to include an attestation report on internal control over financial reporting issued by PubCo’s independent registered public accounting firm. To achieve compliance with these requirements within the prescribed time period, PubCo will be engaging in a process to document and evaluate PubCo’s internal control over financial reporting, which is both costly and challenging. In this regard, PubCo will need to continue to dedicate internal resources, potentially engage outside consultants, hire new employees with the requisite skillset and experience, and adopt a detailed work plan to assess and document the adequacy of PubCo’s internal control over financial reporting, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. There is a risk that PubCo will not be able to conclude, within the prescribed time period or at all, that PubCo’s internal control over financial reporting is effective as required by Section 404 of the Sarbanes-Oxley Act. Moreover, PubCo’s testing, or the subsequent testing by PubCo’s independent registered public accounting firm, may reveal additional deficiencies in PubCo’s internal control over financial reporting that are deemed to be material weaknesses.

Any failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including the identification of one or more material weaknesses, could cause investors to lose confidence in the accuracy and completeness of PubCo’s financial statements and reports, which would likely adversely affect the market price of PubCo common stock. In addition, PubCo could be subject to sanctions or investigations by the stock exchange on which PubCo Common Stock is listed, the SEC and other regulatory authorities.

 

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Following the Closing, PubCo will incur significant increased expenses and administrative burdens as a public company, which could have an adverse effect on its business, financial condition and operating results.

Following the consummation of the Business Combination, PubCo will face increased legal, accounting, administrative and other costs and expenses as a public company that DTI does not incur as a private company and these expenses may increase even more after PubCo is no longer an “emerging growth company.” The Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the PCAOB and the securities exchanges and the listing standards of the Nasdaq, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time consuming. A number of those requirements will require PubCo to carry out activities DTI has not done previously. For example, PubCo will create new board committees, enter into new insurance policies and adopt new internal controls and disclosure controls and procedures. In addition, expenses associated with SEC reporting requirements will be incurred. PubCo may be required to expand its staff to ensure that its workforce has the requisite experience to implement these changes.

Furthermore, if any issues in complying with those requirements are identified (for example, if management or PubCo’s independent registered public accounting firm identifies a material weakness in the internal control over financial reporting), PubCo could incur additional costs rectifying those issues, the existence of those issues could adversely affect PubCo’s reputation or investor perceptions of it and it may be more expensive to obtain director and officer liability insurance. Risks associated with PubCo’s status as a public company may make it more difficult to attract and retain qualified persons to serve on the PubCo Board or as executive officers.

In addition, as a public company, PubCo may be subject to stockholder activism, which can lead to substantial costs, distract management and impact the manner in which PubCo operates its business in ways DTI does not currently anticipate. As a result of disclosure of information in this proxy statement/prospectus/​consent solicitation statement and in filings required of a public company, PubCo’s business and financial condition will become more visible, which may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, PubCo’s business and results of operations could be materially adversely affected and even if the claims do not result in litigation or are resolved in PubCo’s favor, these claims and the time and resources necessary to resolve them could divert the resources of PubCo’s management and adversely affect its business and results of operations. The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require PubCo to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

Restrictive covenants in the Credit Facility Agreement, and any similar agreement that we may enter into following the Business Combination, could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.

The Credit Facility Agreement imposes, and any similar agreement that we may enter into following the Business Combination may impose, operating and financial restrictions. Unless all loans are paid off and the Credit Facility Agreement is terminated in connection with the Business Combination, these restrictions limit the ability to, among other things, subject to permitted exceptions:

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incur additional indebtedness;

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make investments or loans;

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create liens;

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consummate mergers and similar fundamental changes;

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make certain capital expenditures, dividends and distributions; and

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