SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. To better understand the Business Combination and the proposals to be considered at the special meeting in lieu of an annual meeting, you should read this entire proxy statement carefully, including the annexes. See also “Where You Can Find More Information.”

Parties To The Business Combination

National Energy Services Reunited Corp.

National Energy Services Reunited Corp. (“NESR,” “we,” “our” “us” or the “Company”) is a blank check company formed in the British Virgin Islands on January 23, 2017, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination involving NESR and one or more businesses. NESR has developed a business plan to acquire two target companies – Gulf Energy S.A.O.C., centered in Oman, and NPS Holdings Ltd., centered in United Arab Emirates (together referenced herein as “Target Companies”).

National Energy Services Reunited Corporation

National Energy Services Reunited Corporation (the “Texas Subsidiary”) is a wholly owned subsidiary of NESR, which was formed in Texas primarily to provide services to NESR, under a service contract, and to employ any U.S. persons employed and providing services to NESR or the Target Companies. Under Oman law, an Oman S.A.O.C. company like GES must have at least 30% of its shares held by Oman persons. Under the U.S.-Oman Free Trade Agreement, U.S. persons, including corporations formed in the U.S., are treated as Oman persons for purposes of owning Oman companies provided the U.S. shareholders acquire 100% of the Oman S.A.O.C. Texas Sub will satisfy Oman law and regulations as a qualified shareholder. NESR has filed an application for an exemption with the Ministry of Commerce and Industry of Oman, so that NESR may acquire GES directly.   However, in the interim, NESR intends to use this Texas Subsidiary to acquire the GES shares.

NESR Holdings Ltd.

NESR Holdings, Ltd. (“NESR Holdings” or “Sponsor”) formed NESR and is owned by members of NESR’s senior management. NESR Holdings retains voting control with respect to all Founder Shares issued to our Sponsor but beneficial ownership of those shares is held by the key management persons that formed NESR and facilitated the organization of the Company and its IPO. To facilitate the acquisition of certain minority interests in GES pending finalization and shareholder approval of the Business Combination, NESR Holdings acquired 11.7% of the outstanding shares of GES. Additionally, NESR Holdings has agreed to a Shares Exchange Agreement by which it will assign all of its GES shares to NESR, and in exchange NESR agreed to assume the obligations to issue NESR ordinary shares to NESR Holdings in payment of the funds borrowed to purchase the GES Shares, upon shareholder approval of the Business Combination. NESR Holdings financed the acquisition of these GES shares with funds borrowed from the GES Investors, a series of private equity lenders, each of which has agreed to accept NESR ordinary shares in satisfaction of the loans, subject to and pending review of this Proxy Statement.

Gulf Energy S.A.O.C

Gulf Energy S.A.O.C. (“GES”) is an oil field service company that provides oil and gas field services including coil tubing, well testing, evaluation, rehabilitation, cementing and mud logging in Oman and surrounding countries. In addition, through its main subsidiaries, GES provides well engineering and inspection services, well drilling services, and distribution and leasing of oil and gas equipment.

SV3 Holdings Pte Ltd

SV3 Holdings Pte Ltd (“SV3”), was formed in Singapore by two private equity funds: SCF-VIII, L.P., a limited partnership formed under the laws of Delaware with a principal place of business in Houston, Texas d/b/a SCF Partners, and Viburnum Funds Pty Ltd., an investment manager with its lead office in Western Australia. Each of the owners of SV3 are independent of NESR. SV3 was formed for the purpose of acquiring a minority interest in GES. On or about October 20, 2017, SV3 invested $68.25 million into GES in exchange for 136,500 shares, or 27.3% of GES shares. On November 12, 2017, SV3 entered into a Contribution Agreement with NESR pursuant to which SV3 agreed to exchange its shares in GES for NESR ordinary shares at an exchange ratio equal to $10.00 per share for SV3’s net cost to acquire the shares, upon consummation of the Business Combination.

NPS Holdings Limited

NPS Holdings Limited (“NPS”), delivers drilling, customized well services and support to customers in the Middle East, North Africa & Far East Asia. NPS provides its distinctive customer solutions through subsidiaries and branches. For more information, see the section entitled “Information About NPS – Our Operations - Subsidiaries.” Service lines include well services, electric line logging, well testing, and integrated drilling and work over operations. NPS is recognized for both product quality and service deliverability, and is widely engaged by leading operators around the world.

Hana Investments Co. WLL, a member of The Olayan Group

Hana Investments Co. WLL (“Hana Investments”) a party to the NPS Stock Purchase Agreement, is incorporated in Bahrain and 100% legally and beneficially Gulf Cooperation Council (GCC) Company owned. Hana Investments is owned by The Olayan Group (“Olayan”). Olayan is an existing shareholder of NESR. In connection with NESR’s agreement to acquire all of the shares of NPS, Olayan (through Hana Investments) agreed to acquire a minority interest in NPS for $150 million to expedite the transaction, which was paid on or about January 14, 2018. In connection therewith, NESR has agreed to pay to Hana Investments interest on the $150 million up to a maximum of $4.7 million. Such interest shall be payable in cash or NESR shares at $11.244 per share.

Consideration for the Acquisition of NPS in the Business Combination

NESR will be purchasing 100% of the outstanding stock of NPS for $292.8 million in cash (to NPS Selling Stockholders) plus 25,077,276 ordinary shares (to NPS Selling Stockholders and Hana Investments), excluding possible future earn-outs of 3,343,408 ordinary shares and of $7,572,444 in cash (to NPS Selling Stockholders). Of the ordinary shares exchanged, 11,318,827 shares are exchanged at $10.00 per share with the NPS Selling Stockholders, and 13,340,448 shares are exchanged with Hana Investments at a value of $11.244 per share. In addition, NESR has agreed to pay an interest factor for each day after January 14, 2018, on the payment by Hana Investments not to exceed $4.7 million payable in cash or NESR shares at $11.244 per share for an equivalent of up to 418,001 shares, which number of shares are included in the estimated total share consideration of 25,077,276 shares. NESR may be required to pay the following additional consideration to the NPS Selling Stockholders: (i) a possible $7,572,444 cash bonus upon retention of a major customer contract and (ii) up to 3,343,408 NESR shares in post-closing earn-outs. NESR is also subject to additional payments for delays in receiving shareholder approval (“Ticker Fee”) to complete the Business Combination beyond December 31, 2017 pursuant to the NPS Stock Purchase Agreement. The amount of the Ticker Fee is being discussed with NPS Selling Stockholders. Pursuant to these discussions, the NPS Shareholders have agreed to waive the Ticker Fee associated with the Hana Investments payment of $150 million which was made on January 14, 2018 to purchase 83,660,878 NPS Shares. For the remaining cash payments, NESR has proposed an 8-week suspension of the Ticker Fee which would postpone its application to start from March 1, 2018. Based on the 8-week suspension, the Ticker Fee is estimated to total $11,200,606 assuming the Business Combination is completed on May 15, 2018.

Consideration for the Acquisition of GES in the Business Combination

NESR will acquire 100% of the outstanding shares of GES for 28,234,848 NESR ordinary shares. The NESR ordinary shares will be issued at a value of $10.00 per share for a total GES purchase price valued at $282.3 million, plus interest on the loans from GES Investors of approximately $1.25 million in cash. This includes 18,484,848 shares to be issued to the GES Selling Stockholders pursuant to the GES Stock Purchase Agreement, 6,825,000 shares to SV3 pursuant to a contribution agreement (“SV3 Contribution Agreement”), and 2,925,000 shares to Sponsor pursuant to the Shares Exchange Agreement. SV3 had acquired 27.3% of GES shares for $ 68.25 million shares and agreed to enter into the SV3 Contribution Agreement to exchange its GES shares for NESR ordinary shares at $10 per share. Our Sponsor acquired 11.7% of the outstanding GES shares to facilitate execution of the GES Stock Purchase Agreement. In order to fund this purchase, our Sponsor borrowed funds from the GES Investors pursuant to Loan Contracts in which the GES Investors agreed to accept either (i) NESR ordinary shares at $10.00 per share in repayment of the loans (subject to their independent consent after review of the proxy statement), or (ii) payment in cash or an assignment of the GES stock if any GES Investor elects not to accept NESR ordinary shares after the proxy statement is filed, plus interest on the loans of approximately $1.25 million payable in cash. All Loan Contracts, obligations and acquired GES shares are assigned to NESR under the Shares Exchange Agreement.

The consideration for the acquisition of NPS and GES is summarized in the table below :

⁽¹⁾ Part of the proceeds from the Forward Purchase Agreement will be used to help finance the cash consideration payable to the NPS Selling Stockholders.

⁽²⁾ Excludes possible Cash Earnout, Equity Earnout and Ticker Fee as described in the Consideration for the Acquisition of NPS.

⁽³⁾ Includes 418,001 NESR ordinary shares for $4.7 million interest accrued for Hana Investments.

⁽⁴⁾ Excludes interest on the loans of approximately $1.25 million payable in cash to the GES Investors.

Backstop Investor

In connection with the Business Combination, on April 27, 2018 the Company entered into a Forward Purchase Agreement with the Backstop Investor, pursuant to which the Company agreed to sell up to $150 million of the Company’s ordinary shares to the Backstop Investor or its designees and commonly controlled affiliates, including co-investment funds controlled by Backstop Investor or its affiliates. Such Backstop Commitment will consist of: (i) a primary placement to occur concurrently with the closing of the Business Combination, pursuant to which the Company shall sell 7,000,000 ordinary shares at $10.00 per share for a total drawdown of $70 million; and (ii) at the Company’s election, a secondary placement, pursuant to which the Company will have the option to draw, in one or more installments, up to an additional $80 million by selling up to 7,114,906 ordinary shares at $11.244 per share. If the Company elects to engage in a secondary placement, at least $30 million must be sold on the first draw and at least $12.5 million must be sold in subsequent draws. All draw notices must be given with 3-10 business days’ advance written notice, with the applicable closing to occur on or within 3 months after the Business Combination. Such proceeds will (i) offset any capital used for shareholder redemptions; (ii) fund the cash portion of the consideration to certain shareholders of NPS and transaction expenses in connection with the Business Combination; or (iii) be used for other corporate purposes, including satisfaction of its minimum cash requirements immediately following the Business Combination. The Company and the Backstop Investor also agreed to enter into a registration rights agreement to grant the Backstop Investor certain rights to register the resale of any shares issued in the Backstop Commitment after the Business Combination.

The Backstop Investor is wholly owned by Waha Capital. The Forward Purchase Agreement contains a similar provision as the WAHA Relationship Agreement, entitling the Backstop Investor to nominate one person to NESR’s board of directors for as long as it directly owns at least 7,057,453 ordinary shares and Adnan Ghabris is not otherwise nominated to the board; provided, however, that such nominating right shall terminate if and when the Backstop Investor fails to deliver the required purchase price in any drawdown of a secondary placement.

Organizational Structure

The following diagram illustrates the ownership structure of the Company immediately following the Business Combination. All entities are 100% owned.

The following diagram provides a further breakdown of the ownership of NESR upon consummation of the contemplated transactions, assuming no redemptions and utilization of the full $150 million Backstop Commitment.

Opinion of J.P. Morgan

On November 12, 2017, the Company’s Board of Directors received from J.P. Morgan Securities LLC (“J.P. Morgan”), financial advisor to the Company, a written opinion to the Company’s Board of Directors, dated November 12, 2017, that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the Consideration (as defined in the opinion) to be paid by the Company in the proposed Transactions (as defined in the opinion) was fair, from a financial point of view, to the Company, as more fully described below in the section entitled “The Business Combination Proposal — Opinion of J.P. Morgan”. The full text of the written opinion of J.P. Morgan, dated November 12, 2017, is attached to this proxy statement as Annex E.

The Company’s stockholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion is addressed to the Board, is directed only to the fairness, from a financial point of view, of the Consideration to be paid by the Company in the Transactions and does not constitute a recommendation to any Company stockholder as to how such stockholder should vote with respect to the Transactions. The summary of the opinion of J.P. Morgan set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion. For a more complete description of J.P. Morgan’s opinion, see the section entitled “The Business Combination Proposal—Opinion of J.P. Morgan” and Annex E to this proxy statement.

Redemption Rights

Pursuant to our Charter, holders of public shares (excluding our Sponsor and certain lead investors in our IPO) may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with our Charter. The pro rata amount of the funds available in the trust account for the public shares was approximately $10.10 per share as of April 30, 2018. If a holder exercises its redemption rights in connection with the Business Combination, then such holder will be exchanging its NESR ordinary shares for cash and will no longer own NESR ordinary shares and will not participate in the future growth of the Company, if any. NESR public shareholders are not required to affirmatively vote for or against the Business Combination in order to redeem their ordinary shares for cash. This means that public shareholders who hold NESR ordinary shares on or before May 16, 2018 (two (2) business days before the special meeting in lieu of an annual meeting) 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, so long as such holder properly demands redemption and delivers its shares (either physically or electronically) to our transfer agent in accordance with the procedures described herein. For more information, see the section entitled “Special Meeting in Lieu of an Annual Meeting of NESR Shareholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

Impact of the Business Combination on NESR’s Public Float

It is anticipated that, following completion of the Business Combination and assuming there are no redemptions, NESR’s public shareholders will retain an ownership interest of 23.8% in NESR and our Sponsor and affiliates will retain an ownership interest of 6.0% in NESR. These relative percentages assume NESR’s receipt of $150 million in cash proceeds from the proposed Commitment. In addition, if any of NESR’s shareholders exercise their redemption rights, the ownership interest in NESR of NESR’s public shareholders will decrease and the ownership interest in NESR of our Sponsor will increase. These ownership percentages with respect to NESR following the Business Combination do not take into account (i) the 22,921,700 public warrants to purchase up to a total of 11,460,850 NESR ordinary shares, or (ii) the 12,618,680 private warrants to purchase up to a total of 6,309,340 NESR ordinary shares that will remain outstanding following the Business Combination. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by NESR’s existing shareholders in NESR will be different.

In connection with the Business Combination, the Company has entered into a Forward Purchase Agreement for up to $150 million with the Backstop Investor, pursuant to which, concurrently with the closing of the Business Combination, the Company will draw down a minimum of $70 million at $10.00 per share, and will have the option to draw up to an additional $80 million at $11.244 per share, as needed, until three months following the Business Combination. The funds will be used to replace capital removed to pay shareholder redemptions, to help fund the cash portion of the consideration to the NPS Selling Stockholders and transaction expenses in the Business Combination, or other corporate purposes, such that the Company meets its minimum cash requirements immediately following the Business Combination.

To the extent the Backstop Commitment is fully utilized for a $150 million private placement of NESR ordinary shares, the ownership percentages of NESR’s public shareholders reflected above will decrease as shown below:

Any private placement of ordinary shares made pursuant to the Backstop Commitment is contingent upon shareholder approval of the NASDAQ Proposal. Any open market or privately negotiated transactions made by the Backstop Investor are not contingent on shareholder approval of the Business Combination Proposal or the NASDAQ Proposal.

Board of Directors of NESR Following the Business Combination

The existing Board of Directors, consisting of four Directors, will exercise its power under the Charter to expand the Board to nine directors. Our Board of Directors intends to fill the vacancies created by the increase in board size following closing of the Business Combination, with five persons, two (2) of whom will be nominated by NPS Selling Stockholders, two (2) of whom will be nominated by GES Selling Stockholders, and one (1) of whom will be nominated by SV3 to fill the vacancies created by the increase in board size. If all director nominees are elected and the Business Combination is consummated, our Board of Directors will consist of four (4) existing NESR directors, Sherif Foda, Thomas Wood, Antonio J. Campo Mejia, and Hala Zeibak, two nominated by NPS Selling Stockholders, Salim Al Noaimi and Adnan Ghabris, two nominated by GES Selling Stockholders, Yasser Al Barami and Hilal Al Busaidy and one nominated by SV3, Andrew L. Waite. For more information, see the sections entitled “Director Election Proposal” and “Management After the Business Combination—Management and Board of Directors.” The appointment of the five additional directors will be made by resolution of the board at or immediately after the closing of the Business Combination.

Accounting Treatment

The Business Combination will be accounted for under ASC 805. Pursuant to ASC 805, NESR has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

The preponderance of the evidence discussed above supports the conclusion that NESR is the accounting acquirer in the Business Combination.

NPS and GES both constitute businesses, with inputs, processes, and outputs. Accordingly, the acquisition of NPS and GES both constitute the acquisition of a business for purposes of ASC 805, and due to the change in control of each of NPS and GES, will be accounted for using the acquisition method. NESR will record the fair value of assets acquired and liabilities assumed from NPS and GES.

Appraisal Rights

Appraisal rights are not available to our shareholders in connection with the Business Combination under the structure as presently contemplated . Exercising the right to redeem the shares purchased pursuant to the Business Combination Proposal is the only remedy for a public shareholder.

Reasons for the Business Combination

We were organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses or entities. The Business Combination was the result of a thorough search for a potential transaction utilizing the extensive network and investing and operating experience of our management team and Board of Directors. The terms of the Business Combination were the result of thorough negotiations between the representatives of NESR, NPS and GES.

From the date of our IPO through execution of the Stock Purchase Agreements on November 12, 2017, we developed a list of approximately 70 Oilfield Services & Equipment companies and considered and conducted analysis of approximately 35 potential acquisition targets, of which we engaged in preliminary discussions with representatives of approximately 20 potential acquisition targets. In doing so, we have followed the initial set of criteria and guidelines outlined in our IPO prospectus, which we believed were important in evaluating prospective targets. Namely, we intended to focus our efforts on seeking and completing an initial Business Combination with one or more target entities that have an enterprise value of between $600 million and $1.25 billion, although a target entity with a smaller or larger enterprise value would be considered. We intended to use these criteria and guidelines in evaluating acquisition opportunities, but we also could decide to enter into our initial Business Combination with a target business that did not meet these criteria and guidelines. We intended to acquire companies that we believed:

The Board of Directors concluded that NPS and GES substantially met the above criteria. In particular, the Board of Directors considered the following positive factors, although not weighted or presented in any order of significance:

Attractively positioned in the oil-rich Middle East and North Africa (MENA region) . NESR’s CEO Sherif Foda has years of experience with Schlumberger in the MENA region. Substantially all of the operations of NPS and GES are in the MENA region, which has one of the lowest cost of production for oil and gas. The Target Company Group has extensive networks and customers throughout the MENA region. The Middle East remains among the most profitable regions for oil and gas services due to low development costs, which helps to insulate the services activity from large global price swings. Overall Middle East drilling activity has not declined materially over the last three years while, in comparison, the United States drilling rig count has dropped considerably, as evidenced by the February 2018 Baker Hughes World Wide Rig Count Report stating that the monthly average Middle East rig count has dropped less than 1% from January 2015 to December 2017 while the monthly average rig count in the United States dropped 50% over the same three-year period. Furthermore, short-term projections expect drilling activity to continue to increase with expected increases in spend by exploration and production companies across the region. This indicates that the fundamental drivers for activity will be strong in the region. The senior management teams of both NPS and GES are expected to remain in their respective companies and were keen to pursue the acquisition by NESR to gain access to new technologies and service methodologies/processes used in the United States. The synergies expected to be generated from the acquisitions are anticipated to cause value to be realized in the marketplace. The size of the Business Combination and proximity of operations offers attractive alternatives to potential customers in India and Asia.

From a macro market perspective, over the short term, the United States Energy Information Administration (“EIA”) in its Short Term Energy Outlook (“STEO”) report published in April 2018 (https://www.eia.gov/outlooks/steo/archives/apr18.pdf) estimates that U.S. crude oil production averaged 10.4 million barrels per day (“b/d”) in March 2018, up 260,000 b/d from the February 2018 level. Total U.S. crude oil production averaged 9.3 million b/d in 2017. EIA projects that U.S. crude oil production will average 10.7 million b/d in 2018, which would mark the highest annual average U.S. crude oil production level, surpassing the previous record of 9.6 million b/d set in 1970. EIA forecasts that 2019 crude oil production will again increase, averaging 11.4 million b/d. EIA also states that commercial crude oil inventories in the United States fell lower than the previous five-year average for the week ending March 16, 2018, the first time inventories were lower than the five year average since 2014. Large inventory declines in the United States during the past year contributed to the 267 million barrel decline in total petroleum inventories since January 2017 in countries in the Organization for Economic Cooperation and Development (“OECD”), which are estimated to be 2.8 billion barrels as of the end of March 2018. In the March STEO, EIA estimated that inventories of global petroleum and other liquid fuels declined by 0.6 million b/d in 2017. Despite these supply developments, EIA estimates that demand-side factors could have tempered some of the upward oil price pressures in recent weeks. Both the United States and China announced potential tariffs on several billion dollars’ worth of each other’s goods in March 2018. A slowdown in global trade could affect oil demand and presents downside risks to the global oil consumption forecast, although the forecast was revised higher from EIA’s previous STEO. EIA forecasts that global oil consumption will grow by 1.8 million b/d in both 2018 and 2019. EIA forecasts Brent spot prices will average about $63/b in both 2018 and 2019 and estimated in its March STEO that global inventories will grow by about 0.4 million b/d in 2018 and by another 0.3 million b/d in 2019.

Over the long term, in the EIA annual report on International Energy Outlook for 2017 (“IEO2017”), in the reference case used for projections in IEO2017 total world energy consumption rises by 28%.  It further projects that in the reference case most of the world’s energy growth will occur in countries outside of the OECD, where strong, long-term economic growth drives increasing demand for energy. In the long term, the IEO2017 projects increased world consumption of marketed energy from all fuel sources—except coal, where demand is essentially flat—through 2040. Global natural gas consumption increases by 1.4%/year. Abundant natural gas resources and rising production—including supplies of tight gas, shale gas, and coalbed methane—contribute to the strong competitive position of natural gas. Liquid fuels—mostly petroleum-based—remain the largest source of world energy consumption. However, the liquids share of world marketed energy consumption falls from 33% in 2015 to 31% in 2040, as oil prices rise steadily, leading many energy users to adopt more energy-efficient technologies and to switch away from liquid fuels when feasible.

IEO2017 projects world use of petroleum and other liquid fuels grows from 95 million b/d in 2015 to 104 million b/d in 2030 and to 113 million b/d in 2040. To satisfy the increase in world liquids demand in the IEO2017, petroleum and other liquid fuels production increases by 16.1 million b/d from 2015 to 2040. The IEO2017 assumes that countries in the Organization of Petroleum Exporting Countries (“OPEC”) will invest in incremental production capacity to maintain a 39%–44% share of total world liquids production through 2040, consistent with their share over the past 15 years with most of the increase coming from the Middle East. To meet the growth in natural gas demand projected in the IEO2017, the world’s natural gas producers increase supplies by 42% from 2015 to 2040. The largest increases in natural gas production from 2015 to 2040 occur in the Middle East, China, the United States and Russia. In Russia, production growth is supported primarily by increasing development of resources in the country’s Arctic and eastern regions. U.S. production growth comes mainly from shale resources. In China, most growth in the long-term comes from the country’s development of its shale resources, which are projected to account for more than half of its total natural gas production in 2040.

Comprehensive provider of services with scalable platform . Both the companies have a good match geographically and will complement each other in product lines which have footprints across key markets. This will allow cross selling and allow NESR to build on the considerable footprint of NPS as well as the services diversity of GES and strength of position in Oman. The combination will also provide several opportunities to grow with addition of new technologies and will have a multiplier effect on the existing portfolios. Each Target Company is at an inflection point in its development and is anticipated to exponentially benefit from innovative operating techniques that NESR executives identify as available to improve operational and financial performance. Both Target Companies have sound operations and their experienced management are expected to remain with NESR. Both Target Companies have developed as private companies without exposure to the technologies of larger international service companies, and thus NESR management believes that the inherent value of their businesses can be increased significantly with NESR’s guidance.

GES and NPS are a good match geographically . The Target Companies will complement each other’s product lines, which both have footprints across key markets. This will facilitate cross-selling and allow NESR to build on NPS’s considerable footprint as well as GES’s services diversity and strength of position in Oman. The combination will also provide several opportunities to grow with the addition of new technologies and will have a multiplier effect on the existing portfolios. NESR can expand that footprint.

MENA governments’ overall drive to promote activities which will benefit their respective economies. Both NPS and GES originate in the region and have contributed to the local economies, particularly in terms of in country value creation, employment and growth. Their future growth is also in line with the same paradigm. Today the local service industry is a very small part of the overall oilfield services market and has the potential to grow to about half of the total services market.

Top-tier performers well respected by Customers in their region of operations. Both Target Companies have grown significantly over the last decade and with their entrepreneurial spirit and enterprise, have created a notable position for themselves in the services market in the MENA region. Both Target Companies have weathered very well the oil price downturn that began in 2014 and have increased revenues over the last three years.

Terms of the Stock Purchase Agreements and Contribution Agreement. NESR’s Board of Directors reviewed the financial and other terms of the Stock Purchase Agreements and the Contribution Agreement and determined that they were the product of arm’s-length negotiations among the parties.

Shareholder approval. The NESR Board of Directors considered the fact that in connection with the Business Combination NESR shareholders have the option to (i) remain shareholders of the combined company, (ii) sell their shares on the open market or (iii) redeem their shares for the per share amount held in the Trust Account.

Backstop Commitment. NESR has negotiated an agreement with the Backstop Investor in which the Backstop Investor will commit to purchase additional NESR ordinary shares at a price of $10.00-$11.244 per share to help fund the Business Combination and to cover redemptions in the event that any public shareholders elect to have their NESR ordinary shares redeemed in connection with the Business Combination, up to a maximum of $150 million.

Strong liquidity profile. After giving effect to the Business Combination, NESR expects to have sufficient liquidity and financial flexibility to fund NPS’s and GES’s growth requirements and pursue opportunistic acquisitions

Synergies. Following management’s discussions with the Target Companies, management estimates that synergies generated from the acquisitions may create greater than $40 million in annual revenue and additional savings through operating and capital synergies which are expected to be realizable within three years of closing.

Opinion of J.P. Morgan . Our board of directors considered the written opinion of J.P. Morgan dated November 12, 2017, that, as of such date and based upon and subject to the various assumptions made, matters considered, and limitations described in its written opinion, the consideration (as defined in the opinion) to be paid by NESR in the proposed Transaction (as defined in the opinion) was fair, from a financial point of view, to the Company, as more fully described in the section “The Business Combination Proposal - Opinion of J.P. Morgan.” The full text of the opinion is included with this proxy statement.

Conditions to Closing of the Business Combination

When the NESR shareholders approve the Business Combination, there will be no other conditions to prevent NESR from closing. If shareholders of GES withdraw distributions in excess of permitted distributions or breach similar conditions resulting in an improper removal of assets, NESR could stop the acquisition, but such excess distribution also would constitute “Leakage” that would permit an adjustment to the purchase price. Furthermore, NPS Shareholders are not permitted to withdraw distributions in excess of permitted distributions or breach similar conditions resulting in an improper removal of assets.

Quorum and Required Vote for Proposals at the Special Meeting in Lieu of an Annual Meeting

A quorum of our shareholders is necessary to hold a valid meeting. A quorum will be present at the meeting if, at the commencement of the meeting, there are present in person or by proxy not less than 50% of the votes attaching to the ordinary shares entitled to vote on the resolutions at the meeting. Abstentions will count as present for the purposes of establishing a quorum. Broker non-votes will not be counted for the purpose of determining the existence of a quorum.

Approval of the Business Combination Proposal, the NASDAQ Proposal, the Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by shareholders present in person or represented by proxy at the special meeting in lieu of an annual meeting. Accordingly, a NESR shareholder’s failure to attend by proxy or in person at the special meeting in lieu of an annual meeting or the failure of a NESR shareholder who holds his or her shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee (a “broker non-vote”) will result in that shareholder’s shares not being counted towards the number of NESR ordinary shares required to validly establish a quorum, but if a valid quorum is otherwise established, it will have no effect on the outcome of any vote on the Business Combination Proposal, the NASDAQ Proposal, the Incentive Plan Proposal or the Adjournment Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the outcome of the Business Combination Proposal, the NASDAQ Proposal, the Incentive Plan Proposal or the Adjournment Proposal.

Approval of the Director Election Proposal requires the affirmative vote of a majority of the votes cast by shareholders present in person or represented by proxy at the special meeting in lieu of an annual meeting. This means that each of the two nominees will be elected if approved by the affirmative vote of a majority of the votes cast by shareholders present in person or represented by proxy at the meeting. Abstentions and broker non-votes will have no effect on the election of directors.

The transactions contemplated by the Stock Purchase Agreements will be consummated only if the Business Combination Proposal is approved at the Meeting. In addition, the Incentive Plan Proposal and the NASDAQ Proposal are conditioned on the approval of the Business Combination Proposal. The Director Election Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in this proxy statement. If we do not consummate the Business Combination and fail to complete an initial Business Combination by May 17, 2019 (or such earlier date as may be determined by the board in its sole discretion), we will be required to dissolve and liquidate our trust account by returning the then remaining funds in such account to the public shareholders, less liquidation costs permitted by our IPO.

Recommendation to NESR Shareholders

Our Board of Directors believes that each of the Business Combination Proposal, the Director Election Proposal, the NASDAQ Proposal, the Incentive Plan Proposal and the Adjournment Proposal to be presented at the special meeting in lieu of an annual meeting is in the best interests of the Company and our shareholders and recommends that our shareholders vote “FOR” each of these proposals.

Risk Factors

In evaluating the proposals set forth in this proxy statement, you should carefully read this proxy statement, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors” beginning on page 38, as well as in our Annual Report on Form 10-K for the year ended December 31, 2017.

SELECTED HISTORICAL FINANCIAL INFORMATION OF NESR

The following table shows selected historical financial information of NESR for the periods and as of the dates indicated. The selected historical financial information of NESR for the period from January 23, 2017 (inception) to December 31, 2017 and as of December 31, 2017 was derived from the audited historical financial statements of NESR included elsewhere in this proxy statement. The following table should be read in conjunction with “NESR Management’s Discussion and Analysis of Financial Condition and Results of Operations of NESR” and our historical financial statements and the notes and schedules related thereto, included elsewhere in this proxy statement.

SELECTED HISTORICAL FINANCIAL INFORMATION OF NPS  

We are providing the following selected financial information of NPS to assist you in your analysis of the financial aspects of the Business Combination. NPS reports its operations on a calendar year with its fiscal year ending on December 31. The consolidated statements of operations data for the years ended December 31, 2017, 2016 and 2015, and the balance sheet data as of December 31, 2017, 2016 and 2015 have been derived from NPS’s audited consolidated financial statements included elsewhere in this proxy statement.

The historical results presented below are not necessarily indicative of the results to be expected for any future period. This information should be read in conjunction with “Risk Factors,” “NPS Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and NPS’s consolidated financial statements and the related notes included elsewhere in this proxy statement.

SELECTED HISTORICAL FINANCIAL INFORMATION OF GES   

We are providing the following selected financial information of GES to assist you in your analysis of the financial aspects of the Business Combination. GES reports its operations on a calendar year with fiscal year ending on December 31, and the selected financial data of GES has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. The consolidated statements of operations data for the years ended December 31, 2017, 2016 and 2015, and the balance sheet data as of December 31, 2017, 2016 and 2015 have been derived from GES’s audited consolidated financial statements included elsewhere in this proxy statement.

The historical results presented below are not necessarily indicative of the results to be expected for any future period. This information should be read in conjunction with “Risk Factors,” “GES Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and GES’s consolidated financial statements and the related notes included elsewhere in this proxy statement. All amounts are denominated in Rial Omani (“RO”).

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION   

The following selected unaudited pro forma condensed combined financial information (the “selected pro forma data”) gives effect to the Business Combination and the Backstop Commitment described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” Each of the acquisitions of NPS and GES will be accounted for as a business combination using the acquisition method of accounting under the provisions of ASC 805. The selected unaudited pro forma condensed combined balance sheet data as of December 31, 2017 gives effect to the Business Combination and the Backstop Commitment as if they had occurred on December 31, 2017. The selected unaudited pro forma condensed combined statement of operations data for the year ended December 31, 2017 gives effect to the Business Combination and the Forward Purchase as if they had occurred on January 1, 2017.

The selected pro forma data have been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information appearing elsewhere in this proxy statement. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical consolidated financial statements and related notes of each of NESR, NPS and GES for the applicable periods included in this proxy statement. The selected pro forma data has been presented for informational purposes only and are not necessarily indicative of what the combined company’s financial position or results of operations would have been had the Business Combination and the Backstop Commitment been completed as of the dates indicated. In addition, the selected pro forma data do not purport to project the future financial position or operating results of the combined company. Also, as explained in more detail in the unaudited pro forma condensed combined financial information, the preliminary fair values of assets acquired, and liabilities assumed reflected in the selected pro forma data are subject to adjustment and may vary significantly from the fair values that will be recorded upon completion of the Business Combination and the Backstop Commitment.

NON-GAAP FINANCIAL MEASURE

Adjusted EBITDA is a non-GAAP financial measure and should not be considered as a substitute for net income (loss), operating income (loss) or any other performance measure derived in accordance with United States generally accepted accounting principles (“GAAP”) or as an alternative to net cash provided by operating activities as a measure of NESR, NPS or GES’s profitability or liquidity. NESR, NPS and GES’s management believes Adjusted EBITDA is useful because it allows external users of its financial statements, such as industry analysts, investors, lenders and rating agencies, to more effectively evaluate their operating performance, compare the results of their operations from period to period and against NESR, NPS and GES’s peers without regard to their financing methods and capital structure and because it highlights trends in their business that may not otherwise be apparent when relying solely on GAAP measures. NESR, NPS and GES define Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation, amortization and impairment. Furthermore, Free Cash Flow is defined as Net Income plus Depreciation and Amortization less Capital Expenditures. NESR, NPS and GES’s management believes Free Cash Flow is an important measure of liquidity and the company’s ability to fund their operations and growth in the future and is used by analysts, investors when comparing investment alternatives.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We make forward-looking statements in this proxy statement. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business, and the timing of and our ability to complete the Business Combination. Specifically, forward-looking statements may include statements relating to:

These forward-looking statements are based on information available as of the date of this proxy statement, and current expectations, estimates, projections, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. While we believe these expectations, and the estimates and projections on which they are based, are reasonable and were made in good faith, these statements are subject to numerous risks and uncertainties. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

You should not place undue reliance on these forward-looking statements in deciding how to vote your proxy, instruct how your vote should be cast or vote your shares on the proposals set forth in this proxy statement. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those described in the section entitled “Risk Factors.” Some factors that could cause actual results to differ include:

RISK FACTORS

The following risk factors apply to the business and operations of NPS. GES, NESR, the Business Combination and the business and operations of the combined company following the completion of the Business Combination. These risk factors are not exhaustive. Shareholders are encouraged to perform their own investigation with respect to the business, financial condition and prospects of NESR. You should carefully consider the following risk factors, as well as the other information included in this proxy statement. In particular, please refer to the section entitled “Cautionary Statement Regarding Forward-Looking Statements” in this proxy statement as well as in our Annual Report on Form 10-K for the year ended December 31, 2017. We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein. For the purposes of these risk factors, unless otherwise indicated, the term “NPS” refers to NPS Holdings Limited, together with its consolidated subsidiaries and consolidated affiliated entities, the term “GES” refers to Gulf Energy S.A.O.C., together with its consolidated subsidiaries and consolidated affiliated entities, the term “Target Companies” refer to NPS and GES, the terms “we,” “us,” “our” or “NESR” and the “Company” refer to National Energy Services Reunited Corp., and the term “combined company” refers to the combined company following the Business Combination.

Risks Relating to NPS’ and GES’ Business and Operations

Trends in oil and natural gas prices affect the level of exploration, development, and production activity of the customers of the Target Companies and the demand for their services and products, which could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

Demand for the services and products of the Target Companies is particularly sensitive to the level of exploration, development, and production activity of, and the corresponding capital spending by, oil and natural gas companies. The level of exploration, development, and production activity is directly affected by trends in oil and natural gas prices, which historically have been volatile and are likely to continue to be volatile. Prices for oil and natural gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty, and a variety of other economic factors that are beyond our control. Crude oil prices have fluctuated significantly since 2014, with West Texas Intermediate (“WTI”) oil spot prices declining from a high of $108 per barrel in June 2014 to a low of $26 per barrel in February 2016, a level which has not been experienced since 2003. The substantial decline in oil and natural gas prices has led to a significant decrease in spending by oil and natural gas companies and further declines in oil and natural gas prices could lead to further cuts in spending. Although crude oil prices increased during 2017 and 2018 and remained relatively steady, market reports indicate prices are not expected to increase materially higher in the remainder of 2018. The prolonged reduction in oil and natural gas prices depressed levels of exploration, development, and production activity from 2014 through 2017 and year to date 2018, and prolonged further reductions could have a material adverse effect the business of the Target Companies, their consolidated results of operations and their consolidated financial condition. Should current market conditions worsen or persist for an extended period of time, the Target Companies may be required to record additional asset impairments, which could have a material adverse impact on their operating results. Even the perception of longer-term lower oil and natural gas prices by oil and natural gas companies can result in the reduction or deferral of major expenditures given the long-term nature of many large-scale development projects.

Factors affecting the prices of oil and natural gas include:

The Target Companies operate in multiple countries across the Middle East, Asia and North Africa. Therefore, their operations will be subject to political and economic instability and risk of government actions that could have a material adverse effect on their businesses, consolidated results of operations, and consolidated financial condition. They will be exposed to risks inherent in doing business in each of the countries in which they operate. Their operations will be subject to various risks unique to each country that could have a material adverse effect on their businesses, consolidated results of operations, and consolidated financial condition. With respect to any particular country, these risks may include but are not limited to:

For example, due to the unsettled political conditions in many oil-producing countries, the operations, revenue, and profits of the Target Companies will be subject to the adverse consequences of war, the effects of terrorism, civil unrest, strikes, currency controls, and governmental actions. These and other risks described above could result in the loss of their personnel or assets, cause them to evacuate their personnel from certain countries, cause them to increase spending on security worldwide, cause them to cease operating in certain countries, disrupt financial and commercial markets, including the supply of and pricing for oil and natural gas, disrupt the supply of equipment required to operate in a country, result in labor shortages and generate greater political and economic instability in some of the geographic areas in which they operate. The Target Companies operate throughout the Middle East and in parts of Asia, and North Africa that have significant risk of instability. Any possible reprisals as a consequence of military or other action, such as acts of terrorism in the United States or elsewhere, could have a material adverse effect on our business, consolidated results of operations, and consolidated financial condition.

The Target Companies operate in multiple countries and earn revenue in different currencies and as such may be exposed to risks arising from fluctuating exchange rates and currency control restrictions which may limit their ability to reinvest earnings from operations in one country to fund the capital needs of their operations in other countries or to repatriate assets from some countries.

A sizable portion of the Target Companies’ consolidated revenue and consolidated operating expenses is in foreign currencies. As a result, the Target Companies will be subject to significant risks, including:

Changes in or new interpretations of tax laws and currency/repatriation controls could impact the determination of our income tax liabilities for a tax year.

The Target Companies have operations in approximately 12 countries. Consequently, they are subject to the jurisdiction of a significant number of taxing authorities. The income earned in these various jurisdictions is taxed on differing bases, including net income actually earned, net income deemed earned, and revenue-based tax withholding. The final determination of their income tax liabilities involves the interpretation of local tax laws, tax treaties, and related authorities in each jurisdiction, as well as the significant use of estimates and assumptions regarding the scope of future operations and results achieved and the timing and nature of income earned and expenditures incurred. Changes in the operating environment, including changes in or new interpretations of tax law and currency/repatriation controls, could impact the determination of the Target Companies’ income tax liabilities for the year. Moreover, some local tax benefits that may be available to companies formed in the Gulf Cooperation Council (GCC) countries, which may have been available to the Target Companies, may not be afforded to them after they are acquired by NESR.

In June 2016, the GCC countries agreed to impose a value added tax (“VAT”) across member states. In February 2017, Saudi Arabia ratified the GCC VAT framework and committed to introduce VAT effective January 1, 2018. VAT will be introduced at a standard rate of 5% across the GCC. However, some of the goods and services may be exempted from the charge of VAT or taxed at a rate of zero percent. Detailed bookkeeping requirements have also yet to be made available, but the FAQs confirm the anticipated need for businesses to factor into their processes the timeliness and completeness of their financial and business records. This includes collecting invoices and accounting for the goods or services bought and sold, as well as the VAT paid and charged going forward.

Lack of consolidation in a taxpaying jurisdiction prevents offsetting some losses against taxable profits.

NESR is a British Virgin Islands (“BVI”) corporation in a non-taxation country. Therefore, for tax purposes, annual losses in one Target Company cannot be offset against profits in another Target Company to reduce consolidated tax liabilities. Moreover, annual losses by subsidiaries of a Target Company may not be offset against taxable profits in another jurisdiction.

The owners of NESR ordinary shares are subject to tax risks due to the possibility of changes in tax rules and regulations in foreign countries.

The BVI does not impose income taxes on BVI companies for dividends received or subsidiary operating profits. The law could change to impose such taxes. In addition, the Target Companies operate in many countries that have different tax rates and systems which may change including jurisdictions that do not impose tax on corporations. U.S. shareholders must report on their tax returns all investments in foreign stocks, including ordinary shares.

The businesses of the Target Companies are dependent on capital spending by their customers, and reductions in capital spending could have a material adverse effect on their businesses, consolidated results of operations, and consolidated financial condition.

The businesses of the Target Companies are directly affected by changes in capital expenditures by their customers and reductions in their customers’ capital spending could reduce demand for services and products of the Target Companies and have a material adverse effect on their businesses, consolidated results of operations, and consolidated financial condition. Most of the contracts of the Target Companies can be cancelled or renegotiated by their customers at any time. Some of the items that may impact the Target Companies’ customer’s capital spending include:

As a result of the decreases in commodity prices, many of the customers of the Target Company businesses reduced capital spending in 2017 and may continue to reduce their capital spending budgets in 2018. The short-term tenor of most of our contracts and the extreme financial stress experienced by our customers have combined to generate demands by many of our customers for reductions in the prices of our products and services. With respect to national oil company customers, the Target Companies are also subject to risk of policy, regime, currency and budgetary changes, all of which may affect their capital expenditures. Commodity process are expected to remain range bound, with limited prospects for rising prices and continued risk of further reductions, which may result in further capital budget reductions in the future.

If the Target Companies are unable to comply with the restrictions and covenants in their debt agreements, they could default under the terms of such agreements, which could result in an acceleration of repayment.

If the Target Companies are unable to comply with the restrictions and covenants in their debt agreements, most of which are secured, they could default under the terms of these agreements. The Target Companies’ ability to comply with these restrictions and covenants, including meeting financial ratios and tests, may be affected by events beyond their control. As a result, the Target Companies cannot assure that they will be able to comply with these restrictions and covenants or meet such financial ratios and tests.

If the Target Companies are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium (if any), and interest on their indebtedness, or if the Target Companies otherwise fail to comply with the various covenants, including financial and operating covenants in the instruments governing their indebtedness they could default under the terms of the agreements governing such indebtedness. In the event of such a default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under the Target Companies’ debt agreements could terminate their commitments to lend, cease making further loans, seize collateral and institute foreclosure proceedings against their assets, and the Target Companies could be forced into bankruptcy or liquidation. If any of these events occur, the assets of the Target Companies might not be sufficient to repay in full all of their outstanding indebtedness and the Target Companies may be unable to find alternative financing. Even if the Target Companies could obtain alternative financing, it might not be on terms that are favorable or acceptable to the Target Companies. Additionally, the Target Companies may not be able to amend their debt agreements or obtain needed waivers on satisfactory terms.

To service their indebtedness, the Target Companies may require a significant amount of cash, and the Target Companies’ ability to generate cash will depend on many factors beyond their control.

The Target Companies’ ability to make payments on and to refinance their indebtedness and to fund planned capital expenditures depends in part on their ability to generate cash in the future. NPS’s and GES’s growth and capital expenditure plan require substantial capital, and any inability to obtain such capital could lead to a decline in the ability of the Target Companies to sustain their current business, access new service markets or grow their business. The ability of the Target Companies to service their indebtedness is, to a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond their control. The Target Companies cannot provide assurance that they will generate sufficient cash flow from operations that they will realize operating improvements on schedule, or that future borrowings will be available to them in an amount sufficient to enable them to service and repay their indebtedness or to fund their other liquidity needs. If the Target Companies are unable to satisfy their debt obligations, they may have to undertake alternative financing plans, such as:

For a period after the consummation of the Business Combination, collection of receivables from work performed may not be sufficient to fund working capital needs. NESR has arranged financing pursuant to the Forward Purchase Agreement in anticipation of the Target Companies’ projected cash requirements, but events beyond the Target Companies’ control could cause cash collection to be less than projected and cause the Target Companies not to meet their debt obligations.

The Target Companies cannot provide assurance that any additional refinancing or debt restructuring would be possible, that any assets could be sold or that, if sold, the timing of the sales and the amount of proceeds realized from those sales would be favorable to them or that additional financing could be obtained on acceptable terms. The Target Companies’ inability to generate sufficient cash flows to satisfy their debt obligations, or to obtain alternative financing, could materially and adversely affect their businesses, financial condition, results of operations and prospects.

Material weaknesses have been identified in the Target Companies internal control over financial reporting.

In connection with the preparation of Target Companies’ consolidated financial statements as of and for the years ended December 31, 2015, 2016 and 2017, management of NPS and separately GES identified material weaknesses in internal controls over their financial reporting that remain unremediated. Specifically, the Target Companies both have deficiencies in the financial statement close process. Furthermore, NPS and GES lack the expertise with respect to the application of US GAAP.

The Target Companies are not and were not required to perform an evaluation of internal control over financial reporting as of and for the years ended December 31, 2015, 2016 and 2017 in accordance with the provisions of the Sarbanes-Oxley Act. Had such an evaluation been performed, additional control deficiencies may have been identified by NPS and GES management, and those control deficiencies could have also represented one or more material weaknesses.  

If the abovementioned material weaknesses are not remediated prior to the closing of the Business Combination or if additional material weaknesses are identified in the future, a material weakness may exist in internal control over financial reporting of the post-combination company subsequent to the closing of the Business Combination.

The Target Companies have begun taking measures to remediate the underlying causes of the material weaknesses and intends to complete this remediation process as quickly as possible. However, the Target Companies cannot at this time estimate whether this remediation process will be complete prior to the closing of the Business Combination. If the Target Companies are unable to successfully remediate these material weaknesses prior to the closing of the Business Combination, the post-combination company could be unable to report financial results accurately on a timely basis. Any failure to timely provide required financial information could materially and adversely impact the post-combination company, including the loss of investor confidence or delisting and cause the market price of our common stock to decline. 

The failure of the Target Companies to maintain accounting controls and safeguards adequate for public company reporting prior to the consummation of the Business Combination could result in the discovery of losses not reflected in their financial statements .

The Target Companies do not maintain accounting policies and practices or internal controls over financial reporting commensurate with that of public companies in the United States. In addition, the Target Companies currently may not have a complement of personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States and US GAAP. The development and implementation of the standards and controls necessary for the Target Companies to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected by NESR. Furthermore, any failure to implement required policies, practices and improved controls over our financial processes and reporting, or difficulties encountered in the implementation of such policies, practices or improved controls, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior internal accounting controls could also cause shareholders and potential investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our shares.

The Target Companies’ borrowings under the Company Facility Agreement, Murabaha Facility Agreements, Ahli Bank Facility and the Tasneea Working Capital Facility exposes it to interest rate risk.

The Target Companies’ earnings are exposed to interest rate risk associated with borrowings under its Company Facilities Agreement, the $150 million Murabaha Facility Agreement, the Ahli Bank Facility, the Tasneea Working Capital Facility, and the $50 million Murabaha Facility Agreement. Each of these facilities requires the payment of floating interest rates based upon short-term interest rate indices. If interest rates increase, so will the Target Companies’ interest costs, which may have a material adverse effect on their financial condition and results of operations.

The geographic concentration of the customers of the Target Companies exposes them to the risks of the regional economy and other regional adverse conditions. The credit risks of the Target Companies’ concentrated customer base in the energy industry could result in losses. In addition, the Target Companies depend on a small number of customers for a significant portion of their revenues. Therefore, the loss of these customers could result in a decline in each company’s revenues and adversely affect each company’s financial condition, results of operations or cash flows.

The primary customers of the Target Companies are in the Middle East and North Africa and all are in the energy industry. Among the Target Companies’ customers are National Oil Companies (“NOC”). Given the importance of national oil companies, which dominate the regions petroleum industry, the operations of the Target Companies are more susceptible to regional economic, budgetary and political conditions than other more geographically diversified competitors. Any changes in market conditions, unforeseen circumstances, or other events affecting the area in which the Target Companies’ assets are located could have a material adverse effect on their businesses, operating result, and financial condition.

In addition, as of December 31, 2017, approximately 45% of NPS’ revenues came from one major customer in the region. Furthermore, during the years 2015, 2016 and 2017, a substantial portion of GES’s revenues came from one major customer. Given the terms of GES’s contracts with the major customer, there remains a risk that the major customer may terminate one or more of such contracts and/or not continue to engage GES in the same manner, or to the same level, as has been the case historically.   The loss of all or even a portion of the business from the major customer, the failure to extend or replace the contracts with the major customer, or the extension or replacement of such contracts on less favorable terms, as a result of competition or otherwise, could adversely affect GES’s financial condition, results of operations or cash flows. However, certain key personnel at GES, Messrs., Hilal Al Busaidy and Yasser Al Barami, who have established relationships with the major customer have agreed to remain on the Board of Directors of NESR and we expect that they will use their efforts to maintain these relationships.

Over 70% of the revenue of NPS and GES collectively are attributable to five major oil company customers. The loss of all or even a portion of the business from these key customers, the failure to extend or replace the contracts with these key customers, or the extension or replacement of such contracts on less favorable terms, as a result of competition or otherwise, could adversely affect the Target Companies’ financial condition, results of operations or cash flow.

NESR will assume loan obligations which will expose it to the risks and obligations contained in such loan agreements

Our Sponsor has borrowed funds from the GES Investors pursuant to Loan Contracts in order to purchase stock of GES. The terms of the loans allow our Sponsor to assign the loans to NESR, in which case NESR would assume the obligations of our Sponsor under the Loan Contracts. Under the Loan Contracts, the GES Investors may elect to have their loans repaid with NESR ordinary shares after shareholder approval of the Business Combination. If any GES Minority Shareholder elects not to receive NESR stock, then NESR may either transfer the GES stock to the GES Minority Shareholder or pay the loan principal and interest in cash, in which case different interest rates may apply. In the event that any or all of the GES Investors elect not to receive NESR ordinary shares at $10.00 per share, then NESR will be required to either pay cash to satisfy the Loan Contracts, or transfer GES shares to those GES Investors and be left owning less than 100% of GES. Repayment of the loans with cash has not been anticipated in cash flow projections because all of the GES Investors have expressed a preference for repayment in NESR ordinary shares.

The Target Companies are exposed to the credit risk of their customers and counterparties, and a general increase in the delay or nonpayment and nonperformance by their customers could have an adverse effect on their financial condition, results of operations or cash flows.

The Target Companies are subject to risks of loss resulting from non-payment or non-performance by their customers and other counterparties. For example, for NPS, day’s sales outstanding increased from 117 days in 2015 to 125 days in 2016. It decreased further to 110 days as of December 31, 2017. Customers may also delay payments by imposing complex administrative processes, by disputing or rejecting invoices, or through other means. Any increase in the non-payment and non-performance by the customers of the Target Companies could adversely affect their financial condition, results of operations or cash flows. Additionally, equity values for many of the customers of the Target Companies continue to be low. The combination of a reduction of cash flow resulting from lower commodity prices, a reduction in borrowing bases under reserve-based credit facilities and the lack of availability of debt or equity financing may result in a significant reduction in the liquidity of the Target Companies’ customers and their ability to make payment or perform on their obligations to the Target Companies. Furthermore, some of the customers of the Target Companies may be leveraged and subject to their own operating and regulatory risks, which increases the risk that they may default on their obligations to the Target Companies.

Actions of and disputes with any joint venture partners of the Target Companies could have a material adverse effect on their businesses and results of operations of their joint ventures and, in turn, their business and consolidated results of operations.

The Target Companies conduct some operations through joint ventures, where control may be shared with unaffiliated third parties. As with any joint venture arrangement, differences in views among the joint venture participants may result in delayed decisions or in failures to agree on major issues. The Target Companies also cannot control the actions of their joint venture partners, including any non-performance, default, or bankruptcy of their joint venture partners. These factors could have a material adverse effect on the business and results of operations of their joint ventures and, in turn, their business and consolidated results of operations.

If the Target Companies are unable to keep pace with technology developments in the industry, this could adversely affect their ability to maintain or grow market share.

NESR intends to introduce and integrate new technologies and procedures used by large U.S. based oil field service companies. The oilfield service industry is highly competitive and dominated by a few large players that have resources to invest in new technologies. The ability of the Target Companies to continually provide competitive technology and services can impact their ability to defend, maintain or increase prices for their services, maintain market share, and negotiate acceptable contract terms with their customers. If they are unable to continue to acquire or develop competitive technology or deliver it to their clients in a timely and cost-competitive manner in the various markets they serve, it could adversely affect their financial condition, results of operations and cash flows.

Limitations on the Target Companies’ ability to protect their intellectual property rights, including their trade secrets, could cause a loss in revenue and any competitive advantage.

Some of the Target Companies’ products or services, and the processes they use to produce or provide products and services, constitute trade secrets and confidential know how. The Target Companies may lose employees who have important trade secrets and who may not be prohibited in the relevant countries from using such trade secrets to compete. The businesses of the Target Companies may be adversely affected if any acquired patents are unenforceable, the claims allowed under their patents are not sufficient to protect their technology, their patent applications are denied, or their trade secrets are not adequately protected. In addition, competitors of the Target Companies may be able to develop technology independently that is similar to the technology used by the Target Companies without infringing on their patents or gaining access to their trade secrets, which could adversely affect their financial condition, results of operations and cash flows.

The Target Companies may be subject to litigation if another party claims that the Target Companies have infringed upon such third party’s intellectual property rights.

The tools, techniques, methodologies, programs and components that the Target Companies use to provide their services may infringe upon the intellectual property rights of others. Infringement claims generally result in significant legal and other costs and may distract management of the Target Companies from running their core businesses. Royalty payments under licenses from third parties, if available and developing non-infringing technologies would increase their costs. If a license were required and not available, Target Companies might not be able to continue providing a particular service or product, which could adversely affect their financial condition, results of operations and cash flows.

Environmental compliance costs and liabilities could reduce the Target Companies’ earnings and cash available for operations.

The Target Companies are subject to increasingly stringent laws and regulations relating to the importation and use of hazardous materials, radioactive materials, chemicals and explosives and to environmental protection, including laws and regulations governing air emissions, hydraulic fracturing, water and other discharges and waste management. The Target Companies expect to incur capital and operating costs to comply with environmental laws and regulations. The technical requirements of these laws and regulations are becoming increasingly complex, stringent and expensive to implement. These laws may provide for “strict liability” for remediation costs, damages to natural resources or threats to public health and safety. Strict liability can render a party liable for damages without regard to negligence or fault on the part of the party. Some environmental laws provide for joint and several strict liabilities for remediation of spills and releases of hazardous substances.

The Target Companies use and generate hazardous substances and wastes in their operations. Accordingly, they could become subject to material liabilities relating to the investigation and cleanup of potentially contaminated properties, and to claims alleging personal injury or property damage as the result of exposures to, or releases of, hazardous substances. In addition, stricter enforcement of existing laws and regulations, new laws and regulations, the discovery of previously unknown contamination or the imposition of new or increased requirements could require the Target Companies to incur costs, become the basis for new or increased liabilities, become subject to certain government-imposed penalties or have certain licenses revoked that could reduce their earnings and their cash available for operations.

The Target Companies could be subject to substantial liability claims, which could adversely affect their financial condition, results of operations and cash flows.

The technical complexities of the operations of the Target Companies expose them to a wide range of significant health, safety and environmental risks. Their products and service offerings involve production-related activities, radioactive materials, chemicals, explosives, and other equipment and services that are deployed in challenging exploration, development, and production environments. An accident involving these services or equipment, or a failure of a product, could cause personal injury, loss of life, damage to or destruction of property, equipment or the environment, or suspension of operations. The Target Companies’ insurance may not protect them against liability for certain kinds of events, including events involving pollution, or against losses resulting from business interruption. Moreover, the Target Companies may not be able to maintain insurance for certain risks or at levels of risk coverage or policy limits that they deem adequate. Any damages caused by their services or products that are not covered by insurance or are in excess of policy limits or subject to substantial deductibles, could adversely affect their financial condition, results of operations and cash flows.

Demand for the Target Companies’ products and services could be reduced by existing and future legislation or regulations.

Environmental advocacy groups and regulatory agencies in the United States and other countries have been focusing considerable attention on the emissions of carbon dioxide, methane and other greenhouse gasses and their potential role in climate change. Existing or future legislation and regulations related to greenhouse gas emissions and climate change, as well as government initiatives to conserve energy or promote the use of alternative energy sources, may significantly curtail demand for and production of fossil fuels such as oil and natural gas in areas of the world where the Target Companies’ customers operate and thus adversely affect future demand for their services. This may, in turn, adversely affect their financial condition, results of operations and cash flows.

Some international, national, state and local governments and agencies have also adopted laws and regulations or are evaluating proposed legislation and regulations that are focused on the extraction of shale gas or oil using hydraulic fracturing. Hydraulic fracturing is a stimulation treatment routinely performed on oil and gas wells in low-permeability reservoirs. Specially engineered fluids with proppants are pumped at high pressure and rate into the reservoir interval to be treated, causing cracks in the target formation. Future hydraulic fracturing-related legislation or regulations could limit or ban hydraulic fracturing, or lead to operational delays and increased costs, and therefore reduce demand for the Target Companies’ pressure pumping services. If such additional international, national, state or local legislation or regulations are enacted, it could adversely affect the Target Companies’ financial condition, results of operations and cash flows.

Some of the customers of the Target Companies may require bids for contracts in the form of long-term, fixed pricing contracts that may require them to assume additional risks associated with cost over-runs, operating cost inflation, labor availability and productivity, supplier and contractor pricing and performance, and potential claims for liquidated damages.

Some of the customers of the Target Companies, primarily NOCs, may require bids for contracts in the form of long-term, fixed pricing contracts that may require the Target Companies to provide integrated project management services outside the Target Companies’ normal discrete businesses to act as project managers as well as service providers, and may require them to assume additional risks associated with cost over-runs. These customers may provide the Target Companies with inaccurate information in relation to their reserves, which is a subjective process that involves location and volume estimation, that may result in cost over-runs, delays, and project losses. In addition, NOCs often operate in countries with unsettled political conditions, war, civil unrest, or other types of community issues that may also result in cost over-runs, delays, and project losses.

Providing services on an integrated basis or long-term may also require the Target Companies to assume additional risks associated with operating cost inflation, labor availability and productivity, supplier pricing and performance, and potential claims for liquidated damages. The Target Companies might rely on third-party subcontractors and equipment providers to assist them with the completion of these types of contracts. To the extent that the Target Companies cannot engage subcontractors or acquire equipment or materials in a timely manner and on reasonable terms or on terms consistent with the customer contract, their ability to complete a project in accordance with stated deadlines or at a profit may be impaired. If the amount they are required to pay for these goods and services exceeds the amount they have estimated in bidding for fixed-price work, they could experience losses in the performance of these contracts. These delays and additional costs may be substantial, and the Target Companies may be required to compensate their customers for these delays. This may reduce the profit to be realized or result in a loss on a project and adversely affect the Target Companies’ financial condition, results of operations and cash flows.

The loss or unavailability of any of the executive officers of the Target Companies or other key employees could have a material adverse effect on their businesses.

The Target Companies depend on the efforts of their executive officers and other key employees to manage their operations. The loss or unavailability of any of their executive officers or other key employees could have a material adverse effect on their business.

Although we expect all of such key personnel to remain with the Target Companies following the Business Combination, it is possible that we will lose some key personnel, the loss of which could negatively impact the operations and profitability of our post-combination business. Furthermore, while we have scrutinized individuals we intend to engage to stay with the Target Companies following the Business Combination, our assessment of these individuals may not prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.

The Target Companies’ ability to operate and their growth potential could be materially and adversely affected if they cannot employ and retain technical personnel at a competitive cost.

Many of the services that the Target Companies provide and the products that they sell are complex and highly engineered and often must perform in harsh conditions. The Target Companies believe that their success depends upon their ability to employ and retain technical personnel with the ability to design, utilize, and enhance these services and products. A significant increase in the wages paid by competing employers could result in increased competition for the skilled labor force that the Target Companies require, increases in the wage rates that the Target Companies must pay, or both. If either of these events were to occur, the cost structures of the Target Companies could increase, their margins could decrease, and any growth potential could be impaired.

Our failure to comply with complex U.S. and foreign laws and regulations could have a material adverse effect on our operations.

NESR is subject to complex US and foreign laws and regulations, such as the U.S. Foreign Corrupt Practices Act and various other anti-bribery and anti-corruption laws. At this time, the U.K. Bribery Act has not been adopted to apply to British Virgin Islands companies, but does apply to any employees of NESR or the Target Companies that are U.K. citizens and any future subsidiaries formed in the U.K. We may also be subject to trade control regulations and trade sanctions laws that restrict the movement of certain goods to, and certain operations in, various countries or with certain persons. For example, in June 2017, Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt imposed an embargo on Qatar. This diplomatic dispute creates uncertainty over the GCC as a whole. Thus, our ability to transfer people and products among certain countries will be subject to maintaining required licenses and complying with these laws and regulations. The internal controls, policies and procedures, and employee training and compliance programs we expect to implement to deter prohibited practices may not be effective in preventing employees, contractors or agents from violating or circumventing such internal policies or violating applicable laws and regulations. Any determination that we have violated or are responsible for violations of anti-bribery, trade control, trade sanctions or anti-corruption laws could have a material adverse effect on our financial condition and may result in fines and penalties, administrative remedies or restrictions on business conduct, and could have a material adverse effect on our reputation and our business.

Recent regulatory enforcement and accountability mechanisms have steadily changed the financial landscape for companies organized in the British Virgin Islands. One major regulatory change comes from the implementation of a key anti-money laundering treaty with the United States, known as the Foreign Account Tax Compliance Act (“FATCA”). FATCA implementation began on June 30, 2014, and it requires foreign entities to identify and report specific information to the United States Internal Revenue Service (“IRS”) about U.S. taxpayers holding foreign accounts and assets.

Another key regulatory change began on September 1, 2017, with the BVI’s full integration of the “Common Reporting Standard” (“CRS”) into its banking system. The CRS is specifically designed to fight against tax evasion and money laundering. Under the CRS system, banks in the CRS jurisdiction are required to determine where the individual is a “tax resident,” and if the individual is banking outside their country of residence, the banks may report information about the accounts to the national tax authority in the country where the account is held, who then may share that information with the individual’s country of residency.

NESR’s acquisition of GES, a company based in Oman, may require ownership by a U.S. subsidiary.

The Laws of Oman require that at least 30% of an Oman corporation be owned by an Oman person, unless the government grants an exemption. An exception to this rule is pursuant to the U.S.-Oman Free Trade Agreement that permits U.S. persons to have 100% ownership. NESR has formed National Energy Services Reunited Corporation, a Texas wholly owned subsidiary (“Texas Sub”), which will employ all U.S. based people that are providing services for NESR, which will be compensated by NESR for the services provided for those employees pursuant to a services agreement. NESR has requested that Oman grant an exemption from the general rule to permit NESR to hold the GES stock, but if that exemption is not granted by the date of closing after receiving shareholder approval for the Business Combination, NESR will cause the stock of GES to be owned directly by the Texas Sub in order to comply with Oman law. NESR expects that the exemption would ultimately be granted, but there is a risk that the shares may continue to be owned by the Texas Sub, in which case future dividends or activity could be subject to U.S. taxation coming to the Texas Sub. The amount of any U.S. taxes, or the year in which the dividends might be received, cannot be ascertained at this time.

NESR and U.S. persons working for NESR are subject to sanctions regimes adopted by the United States and other jurisdictions.

NESR and U.S. persons working for NESR are subject to laws, reporting requirements or sanctions imposed by the United States or by other jurisdictions where we do business that may restrict or even prohibit NESR, U.S. persons, or certain of its affiliates from doing business in certain countries, or with designated companies in the oil and natural gas sector. Such restrictions may provide a competitive advantage to competitors formed in or operating from countries that may not impose comparable restrictions. The Middle East, Asia, and Africa are locations in which from time to time the United States, the United Nations or the European Union has imposed economic sanctions to restrict or impede contracting in identified sanctioned countries. The U.S. Commerce Department or State Department regulates the types of technologies that can be sold or used in some countries. NESR cannot predict what sanctions might be imposed against any country in which the Target Companies might operate or might receive contracts for performing services. Trade restrictions and sanctions could adversely impact our potential income, or our ability to pursue new undeveloped business objectives.

The United States government has implemented mechanisms to collect information on companies registered on the U.S. stock exchange related to business activities that might be sanctionable under the various U.S. sanctions programs if the foreign companies or its subsidiaries are U.S. companies. Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 requires annual or quarterly “219 Report” to the SEC by any company registered on a U.S. stock exchange to disclose as if the listed company were a U.S. entity, certain business activities relating to any country subject to U.S. sanctions, which in most cases includes the energy sector, even if the activity is not prohibited by U.S. sanctions by the foreign company. Such reporting of any future activities that might be engaged in by the Target Companies, even though not prohibited by the sanctions, could initiate an investigation by the U.S. government and require the Company to engage counsel to monitor or respond to such investigations. Generally, 219 Report disclosures include activities that constitute an investment in the energy sector of $5 million each, or in the aggregate of over $20 million in a 12-month period. A 219 Report also requires reporting of any transaction with a person or entity identified to the SDN List. The risk of an investigation or inadvertent action that relates to sanctioned activity could increase costs and have an adverse impact on financial conditions and results of operations.

The Company’s operations in Middle Eastern countries will require the Company to incur additional costs in order to comply with U.S., U.K. and EU sanctions-related regulations.

The United States government, the UK government and the EU have established lists of corporations, and people in the case of the United States, with which engaging in business by a U.S. person is prohibited without a license and disclosure is required in a 219 Report. These lists in the United States are referred to as the List of Specially Designated Nationals (“SDN List”). There are no discernible qualifications or objective standards for determining when a person might be identified to an SDN List, other than the opinion of the Office of Foreign Assets Control that there is some cause or connection to believe that such foreign person may have been doing business with or for a sanctioned country or person already on the SDN List. There is no advance notice or due process for the listed person. If any person were to be identified to an SDN List, no U.S. persons can be involved in contracting or providing services to or with such listed person without a license. If a Target Company affiliate were to be performing a contract with a person that becomes named to the SDN List, the contract may have to be terminated and/or disclosed, which could result in additional costs or losses.

Although NESR cannot be assured that no person or company in the Middle East with which one of the Target Companies has done business will not be identified on an SDN List in the future, NESR has confirmed that none of the Target Companies, their subsidiaries, their key employees, key vendors, or any company with which they are currently conducting business are listed on the SDN List or similar lists in the EU and UK. If any customer, employee or vendor were to be listed on an SDN List in the future, NESR will need to incur costs to seek legal advice to determine whether any further business could be conducted with such person or whether all business relationships with such person must cease.

Litigation may adversely affect Target Company business, financial condition or results of operations of the Target Companies.

Prior to the Business Combination, lawsuits have been filed against the Target Companies in the ordinary course of their business. No known material litigation claims remain outstanding against either Target Company.

However, the outcome of any such litigation in the future is inherently uncertain. An indemnity in favour of the Company has been included in the GES Stock Purchase Agreement covering certain existing claims; however, such indemnity only applies to the extent that liabilities exceed $7 million. If future litigation claims are made after the closing of the Business Combination, they may adversely affect GES’s business, financial condition, or results of operations.

The Target Companies are subject to litigation risks that may not be covered by insurance.

In the ordinary course of business, the Target Companies become the subject of various claims, lawsuits, and administrative proceedings seeking damages or other remedies concerning their commercial operations, employees, and other matters. The Target Companies maintain insurance to cover many of their potential losses, and they are subject to various self-insurance retentions and deductibles under their insurance policies. It is possible, however, that a judgment could be rendered against them in cases in which they could be uninsured and beyond the amounts that they currently have reserved or anticipate incurring for such matters. If NESR were to be sued under any of the agreements related to the Business Combination or if NESR were made a party to lawsuits to which the Target Companies are currently a party, NESR could be exposed to one or more judgments that are in excess of what NESR management may believe that it should pay and would not likely be covered by insurance.

The Target Companies may be unable to maintain their current Gulf Cooperation Council (GCC) ownership status or obtain or renew permits necessary for their operations, which could inhibit their ability to do business.

Performance of the Target Companies’ operations require that they obtain and maintain a number of government permits, licenses and approvals with terms and conditions containing a significant number of prescriptive limits and performance standards in order to operate. For example, the NPS entities are currently considered to be wholly GCC owned and operate as such in the various GCC jurisdictions, due to the specific shareholding arrangements implemented at the shareholder level. As a result of the Business Combination, NPS and its subsidiaries will no longer be able to maintain their current GCC ownership status. While this is a common scenario for foreign investors operating in the region, NESR will need to ensure that relevant foreign ownership restrictions and/or applicable licenses, permits, and approvals for the operation of foreign owned entities in the jurisdictions of the GCC are complied with. The GCC has made efforts to increase local content and in country value requirements. The loss of GCC ownership status may cause NOCs not to view the Target Companies as a local content provider vis-à-vis other regional competitors. All the permits, licenses, approval limits, and standards require a significant amount of monitoring, record keeping, and reporting in order to demonstrate compliance with the underlying permit, license, approval limit or standard. Noncompliance or incomplete documentation of the Target Companies’ compliance status may result in the imposition of fines, penalties and injunctive relief. A decision by a government agency to deny or delay the issuance of a new or existing material permit or other approval, or to revoke or substantially modify an existing permit or other approval, could adversely affect the Target Companies’ ability to initiate or continue operations at the affected location or facility and on the Target Companies’ financial condition, results of operations and cash flows.

In addition, the Target Companies are currently considered to be wholly GCC owned and operate as such in the various GCC jurisdictions. As a consequence of the Business Combination the Target Companies will become foreign owned entities and therefore lose their GCC ownership status. A restructuring of the Target Companies will be required in order to continue their operations in specific jurisdictions of the GCC, including Qatar and, depending on the activities to be undertaken, Bahrain. In Saudi Arabia, the relevant NPS subsidiaries will be required to seek recognition as 100% foreign owned entities, whereas the Target Companies shareholding arrangements in Oman and UAE must be maintained in order to ensure compliance with applicable foreign ownership restrictions.

The Target Companies operate in a highly competitive industry, and many of their competitors are larger and have greater resources.

Several of the Target Companies’ primary competitors are diversified multinational companies with substantially larger operating staffs and greater capital resources. If these competitors substantially increase the resources they devote to developing and marketing competitive products and services, the Target Companies may not be able to compete effectively. Similarly, consolidation among their competitors could enhance their product and service offerings and financial resources, further intensifying competition.

Cybersecurity risks and threats could adversely affect our business.

We rely heavily on information systems to conduct our business. There can be no assurance that the systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect such incidents or attacks, or to avoid a material impact on our systems when such incidents or attacks do occur. If our systems for protecting against cybersecurity risks are circumvented or breached, this could result in the loss of our intellectual property or other proprietary information, including customer data, and disruption of our business operations.

Target Companies depend on their suppliers to provide services and equipment in a timely manner and any delays, interruptions or failures by suppliers could expose Target Companies to increased costs or inability to meet contractual obligations.

Both GES and NPS rely on suppliers of equipment and spare parts as well as suppliers of technical labor to perform their contractual obligations with clients. Failure by suppliers to provide goods and services in a timely manner could lead to delays by Target Companies in fulfilling contractual obligations, to the inability to fulfill such obligations or to additional costs in seeking replacement suppliers.

The consummation of the Business Combination depends on the fulfillment by third parties of their contractual obligations.

There is a risk that any party to the Business Combination breaks its obligations and does not close. There is a risk that NPS Selling Stockholders withdraw if the Business Combination does not close by June 30, 2018 which grants NPS a right to terminate.

The Target Companies have engaged in a large number of related party transactions, the termination of which may inhibit business.

The Target Companies have relied upon services and products supplied by related parties. If these relationships are discontinued, it could result in a disruption of certain potentially beneficial provisions and require time for replacement of suppliers.

Following the consummation of the Business Combination, we might require additional equity or debt financing to fund operations and/ or future acquisitions .

Although NESR has entered into a Forward Purchase Agreement for up to $150 million with the Backstop Investor pursuant to which NESR will draw a minimum of $70 million concurrently with the closing of the Business Combination and potentially as much as $150 million in funds within three months following the Business Combination as a backstop to cover redemptions by public shareholders, to help fund the Business Combination and related expenses, as well as for working capital, NESR may still need access to additional debt or equity capital to fund operations or to fund potential acquisitions. If additional capital is required, NESR may not be able to obtain debt and/or equity financing on terms favorable to it, or at all. The failure to obtain additional funding could result in a curtailment of NESR’s operations and future development, which in turn could adversely affect NESR’s business, results of operations, and financial condition.

If NESR does not effectively or efficiently integrate the operations of the Target Companies, its future growth will be limited.

We may not achieve expected returns and other benefits as a result of various factors, including integration and collaboration challenges. The success of any acquisition is subject to various risks, including:

The assessment by NESR’s management of these risks is inexact and may not reveal or resolve all existing and potential risks associated with the Business Combination. Realization of any of these risks could adversely affect NESR’s financial condition, results of operations and cash flows.

Risk Factors Relating to NESR and the Business Combination

Following the consummation of the Business Combination, our only significant asset will be ownership of 100% of the stock of NPS and GES.

Following the consummation of the Business Combination, we will have no direct operations and no significant assets other than the ownership of 100% of the stock of NPS and GES. We will depend on the Target Companies for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company, to service any outstanding debt, and to pay any dividends with respect to our ordinary shares. Legal restrictions, as well as the financial condition and operating requirements of the Target Companies, may limit our ability to obtain cash from the Target Companies. Any future dividend payments are within the absolute discretion of our Board of Directors and will depend on, among other things, our results of operations, working capital requirements, capital expenditure requirements, financial condition, level of indebtedness, contractual restrictions with respect to payment of dividends, business opportunities, anticipated cash needs, provisions of applicable law and other factors that our Board of Directors may deem relevant.

We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002.

We are required to establish and maintain internal controls over financial reporting and disclosure controls and procedures and to comply with other requirements of the Sarbanes-Oxley Act and the rules promulgated by the SEC. Following the Business Combination, the combined company will be required to provide management’s report of its assessment of the Company’s internal controls commencing with the Company’s annual report for the year ending December 31, 2018, or such earlier date as is required under the Sarbanes-Oxley Act of 2002. The standards required for a public company under Section 404 of the Sarbanes-Oxley Act are significantly more stringent than those required of the Target Companies as privately-held companies. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the regulatory compliance and reporting requirements that will be applicable to the Company after the Business Combination. If we are not able to implement the additional requirements of Section 404 in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our ordinary shares.

If we fail to establish and maintain an effective system of internal controls, we may not be able to report our financial results accurately and on a timely basis. Any inability to report and file our financial results accurately and timely could harm our business and adversely affect the trading price of our common stock.

We are required to establish and maintain internal controls over financial reporting and disclosure controls and procedures and to comply with other requirements of the Sarbanes-Oxley Act and the rules promulgated by the SEC. Our management, including our Chief Executive Officer and Chief Financial Officer, cannot guarantee that our internal controls and disclosure controls and procedures will prevent all possible errors. Because of the inherent limitations in all control systems, no system of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the possibility that judgments in decision-making can be faulty and subject to simple error or mistake. Furthermore, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Subsequent to the consummation of the Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and share price, which could cause you to lose some or all of your investment.

Although we have conducted due diligence on the Target Companies, we cannot assure you that this diligence revealed all material issues that may be present in the Target Companies’ business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of our and the Target Companies’ control will not later arise. As a result, we may be forced to later write down or write-off assets, restructure its operations, or incur impairment or other charges that could result in losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report these charges could contribute to negative market perceptions about the combined company or its securities. In addition, such charges may cause us to be unable to obtain future financing on favorable terms or at all or impact our listing on the NASDAQ Capital Market.

Our Sponsor has agreed to vote in favor of our initial Business Combination, regardless of how our public shareholders vote.

Unlike many other blank check companies in which the Sponsor agrees to vote its ordinary shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial Business Combination, our Sponsor has agreed to vote any NESR ordinary shares owned by it in favor of our initial Business Combination. As of the date hereof, our Sponsor and affiliates, together with the underwriter in our IPO, own shares equal to 20% of our issued and outstanding ordinary shares. As a result, we would need only 8,595,638 shares, or 37.5% of the 22,921,700 public shares sold in the IPO, to be voted in favor of the Business Combination in order to have such transaction approved.

We have incurred significant transaction and transition costs in connection with the Business Combination. If we fail to consummate the Business Combination, we may not have sufficient cash available to pay such costs.

We have incurred significant, non-recurring costs in connection with consummating the Business Combination. Some of these costs are payable regardless of whether the Business Combination is completed. NESR’s transaction expenses as a result of the Business Combination are currently estimated at approximately $18.4 million, which is comprised of (i) approximately $9 million payable to the underwriters as the deferred underwriting fees (Maxim Group LLC and NBCF) (consisting of approximately $7 million in cash and approximately 0.2 million ordinary shares with a market value of approximately $2 million to the underwriters, (ii) an estimated $8.9 million in other financial advisory and legal fees and expenses, and (iii) approximately $0.5 million relating to other fees and expenses incurred relating to the Business Combination. Additionally, this amount includes the expenses incurred in connection with the filing, printing and mailing of this proxy statement and the solicitation of the approval of our shareholders, and all filing and other fees paid to the SEC, which is estimated at approximately $0.2 million. If NESR and Selling Stockholders do not consummate the Business Combination, each party will be required to pay its own fees and expenses, and NESR will likely not have sufficient cash available to pay its fees and expenses unless and until it completes a subsequent Business Combination transaction. If the Company has not completed its initial Business Combination by May 17, 2019, the Company will distribute the aggregate amount then on deposit in the trust account, pro rata, to its public shareholders by way of redemption and cease all operations except for purposes of the winding up of its affairs.

The unaudited pro forma financial information included in this document may not be indicative of what our actual financial position or results of operations would have been.

The unaudited pro forma financial information in this proxy statement is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated. See “Unaudited Pro Forma Condensed Combined Financial Statements” for more information.

NESR will only have limited protection under the liability and indemnification provisions contained in the Stock Purchase Agreements in the event that any of the representations and warranties made by the Selling Stockholders or NPS and GES in the Stock Purchase Agreements ultimately prove to be inaccurate or incorrect.

Except for certain fundamental representations which survive indefinitely, NESR and its shareholders’ recourse against NPS, GES and/or the Selling Stockholders for misrepresentations or breaches of the representations and warranties and the covenants made in the Stock Purchase Agreements is limited through maximum caps of liability exposure, through limited indemnity provisions and through an expiry date on the duration of such representations and warranties. As a result, NESR and its shareholders may not be able to seek or obtain full redress or compensation for breaches of the representations and warranties and the covenants in the Stock Purchase Agreements.

We may waive one or more of the conditions to the Business Combination.

We may agree to waive, in whole or in part, some of the conditions to our obligations to complete the Business Combination, to the extent permitted by our Charter and applicable laws. For example, it is a condition to our obligations to close the Business Combination that the Target Companies’ representations and warranties are true and correct in all respects as of the Closing Date, except for such inaccuracies that, individually or in the aggregate, would not result in a Material Adverse Effect (as defined in the Stock Purchase Agreements). However, if our Board of Directors determines that it is in the shareholders’ best interest to waive any such breach, then the Board of Directors may elect to waive that condition and close the Business Combination. We are not able to waive the condition that our shareholders approve the Business Combination.

Even if we consummate the Business Combination, there is no guarantee that the public warrants will ever be in the money, and they may expire worthless and the terms of our warrants may be amended.

The exercise price for our warrants is $5.75 per one-half of one share ($11.50 per whole share), subject to adjustment. Warrants may be exercised only for a whole number of NESR’s ordinary shares. No fractional shares will be issued upon exercise of the warrants. There is no guarantee that the public warrants will ever be in the money prior to their expiration, and they may expire worthless.

In addition, the warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision but requires the approval by the holders of at least a majority of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding public warrants approve of such amendment. Examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of ordinary shares purchasable upon exercise of a warrant.

Our Sponsor, directors and officers have a conflict of interest in determining to pursue the acquisition of the Target Companies, since certain of their interests, and certain interests of their affiliates and associates, are different from or in addition to, and which may conflict with, the interests of our shareholders.

Our Sponsor, including our Sponsor and our officers and directors, have interests in and arising from the Business Combination that are different from or in addition to, and which may conflict with, the interests of our public shareholders, which may result in a conflict of interest. These interests include:

These interests may influence our directors in making their recommendation that you vote in favor of the Business Combination Proposal, and the transactions contemplated thereby.

Since our Sponsor, executive officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses if the Business Combination is not completed, a conflict of interest may arise in determining whether the Target Companies are appropriate for our initial Business Combination.

At the closing of the Business Combination, our Sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any 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. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on our behalf. These financial interests of our Sponsor, executive officers and directors may have influenced their motivation in identifying and selecting the Target Companies for the Business Combination.

Concentration of ownership after the Business Combination may have the effect of delaying or preventing a change in control.

It is anticipated that, following completion of the Business Combination and assuming there are no redemptions, NESR’s public shareholders will retain an ownership interest of 23.8% in NESR and our Sponsor and affiliates will retain an ownership interest of 6.0% in NESR. These relative percentages assume NESR’s receipt of the full $150 million in cash proceeds from the proposed investment pursuant to the Forward Purchase Agreement. These ownership percentages with respect to NESR following the Business Combination do not take into account (i) the exercise of 22,921,700 public warrants to purchase up to a total of 11,460,850 NESR ordinary shares, or (ii) the 12,618,680 private warrants to purchase up to a total of 6,309,340 NESR ordinary shares that will remain outstanding following the Business Combination. As a result, the Selling Stockholders will, in all likelihood, have the ability to determine the outcome of corporate actions of the Company requiring shareholder approval. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our ordinary shares.

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

Following the Business Combination, the price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination, limited float and general market and economic conditions. An active trading market for our securities following the Business Combination may never develop or, if developed, it may not be sustained. In addition, the price of our securities after the Business Combination can vary due to general economic conditions and forecasts, our general business condition, limited float, and the release of our financial reports. Additionally, if our securities are not listed on, or become delisted from, the NASDAQ Capital Market for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on the NASDAQ Capital Market or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

Although we expect our ordinary shares and warrants will remain listed on NASDAQ after the Business Combination, there can be no assurance that our ordinary shares and warrants will continue to be so listed or, if listed, that we will be able to comply with the continued listing standards of NASDAQ.

We intend to apply to continue listing our ordinary shares and warrants on the NASDAQ Capital Market subsequent to the closing of the Business Combination. To continue listing our securities on the NASDAQ Capital Market subsequent to the closing of the Business Combination, we will be required to demonstrate compliance with NASDAQ’s initial listing standards, which are more rigorous than NASDAQ’s continued listing requirements. For instance, we must maintain a minimum number of holders (300 round-lot holders). We cannot assure you that we will be able to meet those initial listing standards at that time.

If, after the Business Combination, the NASDAQ Capital Market delists our ordinary shares or warrants from trading on its exchange due to our failure to meet the NASDAQ Capital Market’s initial and/or continued listing standards, we and our security holders could face significant material adverse consequences including:

If the Business Combination’s benefits do not meet the expectations of investors, shareholders or securities analysts, the market price of our securities may decline.

We believe that the Business Combination will accelerate EBITDA growth though synergies, increased market share and a broad portfolio of services. If the benefits of the Business Combination do not meet the expectations of investors, shareholders or securities analysts, the market price of the Company’s securities following the closing of the Business Combination may decline. The market values of our securities at the time of and following the consummation of the Business Combination may vary significantly from their prices on the date the Stock Purchase Agreements were executed, the date of this proxy statement, or the date on which our shareholders vote on the Business Combination.

In addition, following the Business Combination, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for NPS and GES’s stock and trading in the NESR ordinary shares has not been active. Accordingly, the valuation ascribed to the Target Companies and our ordinary shares in the Business Combination may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for our securities develops and continues, the trading price of our securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our securities and our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of the Company’s securities following the Business Combination may include:

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general, and the NASDAQ Capital Market in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to the Company could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Following the Business Combination, the Company’s business and share and warrant prices may suffer as a result of its lack of public company operating experience and, if securities or industry analysts do not publish or cease publishing research or reports about the Company, its business, or its market, or if they change their recommendations regarding our ordinary shares adversely, the price and trading volume of our ordinary shares and warrants could decline.

Prior to the completion of the Business Combination, the Target Companies have been privately-held companies. The Company’s lack of public company operating experience may make it difficult to forecast and evaluate its future prospects. If the Company is unable to execute its business strategy, either as a result of its inability to manage effectively its business in a public company environment or for any other reason, the Company’s business, prospects, financial condition and operating results may be harmed.

The trading market for our ordinary shares and warrants will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. Securities and industry analysts do not currently, and may never, publish research on the Company. If no securities or industry analysts commence coverage of the Company, our share and warrant prices and trading volume would likely be negatively impacted. If any of the analysts who may cover the Company change their recommendation regarding our shares adversely, or provide more favorable relative recommendations about our competitors, the price of our ordinary shares and warrants would likely decline. If any analyst who may cover the Company were to cease coverage of the Company or fail to regularly publish reports on it, we could lose visibility in the financial markets, which could cause our share and warrant prices or trading volume to decline.

We have not registered our ordinary shares issuable upon exercise of the public warrants under the Securities Act or state securities laws at this time, and such registration may not be in place when an investor desires to exercise such warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless.

We have not registered the public shares issuable upon exercise of the public warrants under the Securities Act or any state securities laws at this time. We have agreed to use our best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the ordinary shares issuable upon exercise of the public warrants as soon as practicable after the closing of the Business Combination and cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants. Beginning the later of May 17, 2018 or 30 days following the closing of the Business Combination and until such time as the shares issuable upon exercise of public warrants are registered under the Securities Act, we will be required to permit holders to exercise their public warrants on a cashless basis under certain circumstances specified in the warrant agreement. However, no public warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise such warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, unless an exemption is available. In no event will we be required to issue cash, securities or other compensation in exchange for the public warrants in the event that we are unable to register or qualify the shares underlying the public warrants under the Securities Act or applicable state securities laws. If the issuance of the shares upon exercise of the public warrants is not so registered or qualified, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their public warrants as part of a purchase of units will have paid the full unit purchase price solely for the ordinary shares and rights included in the units.

The future exercise of registration rights may adversely affect the market price of our ordinary shares.

Our ordinary shares will be subject to registration rights agreements. Sales of restricted securities pursuant to these agreements may substantially depress the market price of our ordinary shares. NESR, the Selling Stockholders, the Backstop Investor, and certain shareholders of GES and NPS will enter into one or more registration rights agreements that provide for the registration of the ordinary shares that we will issue. We are also obligated to register Founder Shares and private warrants pursuant to a registration rights agreement signed in connection with our IPO.

Warrants will become exercisable for our ordinary shares, which would increase the number of shares eligible for future resale in the public market and result in dilution to our shareholders.

Outstanding public warrants to purchase an aggregate of 11,460,850 ordinary shares will become exercisable upon the later of May 17, 2018 or 30 days following the completion of the Business Combination. Each warrant entitles the holder thereof to purchase one-half of one ordinary share at a price of $5.75 per half share ($11.50 per whole share), subject to adjustment. Warrants may be exercised only for a whole number of NESR’s ordinary shares. No fractional shares will be issued upon exercise of warrants. To the extent such warrants are exercised, additional ordinary shares will be issued, which will result in dilution to the then existing holders of ordinary shares of the Company and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our ordinary shares.

Our public shareholders may experience dilution as a consequence of, among other transactions, the Business Combination, the issuance of shares pursuant to the Forward Purchase Agreement, the exercise of outstanding warrants and the issuance of additional equity to fund operations or future acquisitions. Having a minority share position may reduce the influence that our current shareholders have on the management of the Company.

It is anticipated that, following completion of the Business Combination and assuming there are no redemptions, NESR’s public shareholders will retain an ownership interest of 23.8% in NESR and our Sponsor will control the vote of 6% in NESR. These relative percentages assume NESR’s receipt of $150 million in cash proceeds from the proposed Commitment and that no ordinary shares are redeemed. In addition, if any of NESR’s shareholders exercise their redemption rights, the ownership interest in NESR of NESR’s public shareholders will decrease and the ownership interest in NESR of our initial shareholder, namely our Sponsor, will increase. These ownership percentages with respect to NESR following the Business Combination do not take into account 22,921,700 public warrants to purchase up to a total of 11,460,850 NESR ordinary shares. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by NESR’s existing shareholders in NESR will be different. See “Unaudited Pro Forma Condensed Combined Financial Information” for further information. To the extent that any of the warrants are exercised for NESR ordinary shares, current shareholders may experience substantial dilution. Such dilution could, among other things, limit the ability of our current shareholders to influence management of the Company through the election of directors following the Business Combination.

Furthermore, to the extent that we cannot obtain additional debt financing, we may be required to issue additional shares to fund growth which could result in further dilution to our shareholders.

We may redeem public warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their warrants worthless.

We will have the ability to redeem the remaining public warrants prior to their expiration at a price of $0.01 per warrant, provided that (i) the last reported sale price of our ordinary shares equals or exceeds $21.00 per share for any 20 trading days within the 30 trading-day period ending on the third business day before we send the notice of such redemption (on March 29, 2018, the last reported sale price for warrants was $0.90 and (ii) on the date we give notice of redemption and during the entire period thereafter until the time the warrants are redeemed, there is an effective registration statement under the Securities Act covering the ordinary shares issuable upon exercise of the public warrants and a current prospectus relating to them is available unless warrants are exercised on a cashless basis. Redemption of the outstanding public warrants could force holders of public warrants:

Our Charter permits the board of directors by resolution to amend our Charter, including to create additional classes of securities, including shares with rights, preferences, designations and limitations as they determine which may have an anti-takeover effect.

Our Charter permits the board of directors by resolution to amend the Charter including to designate rights, preferences, designations and limitations attaching to the preferred shares as they determine in their discretion, without shareholder approval with respect the terms or the issuance. If issued, the rights, preferences, designations and limitations of the preferred shares would be set by the board of directors and could operate to the disadvantage of the outstanding ordinary shares the holders of which would not have any pre-emption rights in respect of such an issue of preferred shares. Such terms could include, among others, preferences as to dividends and distributions on liquidation, or could be used to prevent possible corporate takeovers. Notwithstanding the foregoing, we and our directors and officers have agreed not to propose any amendment to our Charter that would affect the substance and timing of our obligation to redeem our public shares if we are unable to consummate our initial Business Combination by the deadline set forth in the Charter, except that, as contemplated by the Stock Purchase Agreements, we may seek the consent of our shareholders to amend our Charter to extend the date by which we must consummate our initial Business Combination.

Activities taken by affiliates of the Company to purchase, directly or indirectly, public shares will increase the likelihood of approval of the Business Combination Proposal and other proposals and may affect the market price of the Company’s securities during the buyback period.

Our Sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions either prior to or following the consummation of the Business Combination. None of our Sponsor, directors, officers, advisors or their affiliates will make any such purchases when such parties are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Although none of our Sponsor, directors, officers, advisors or their affiliates currently anticipate paying any premium purchase price for such public shares, in the event such parties do, the payment of a premium may not be in the best interest of those shareholders not receiving any such additional consideration. There is no limit on the number of shares that could be acquired by our Sponsor, directors, officers, advisors or their affiliates, or the price such parties may pay.

If such transactions are effected, the consequence could be to cause the Business Combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the Business Combination Proposal and other proposals and would likely increase the chances that such proposals would be approved. If the market does not view the Business Combination positively, purchases of public shares may have the effect of counteracting the market’s view, which would otherwise be reflected in a decline in the market price of our securities. In addition, the termination of the support provided by these purchases may materially adversely affect the market price of our securities.

As of the date of this proxy statement, no agreements with respect to the private purchase of public shares by the Company or the persons described above have been entered into with any such investor or holder. We will file a Current Report on Form 8-K or other required forms with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or other proposals.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments, including non-U.S. governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.

We are dependent upon our executive officers and directors and their departure could adversely affect our ability to complete the Business Combination.

Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our executive officers and directors, at least until we have completed the Business Combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including assessing the potential Business Combination and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could adversely impact our ability to complete the Business Combination.

If we liquidate, distributions, or part of them, may be delayed while the liquidator determines the extent of potential creditor claims.

Pursuant to, among other documents, our Charter, if we do not complete our initial Business Combination by May 17, 2019, this will trigger an automatic redemption of our ordinary shares using the available funds in the trust account pursuant to our Charter, resulting in our repayment of available funds in the trust account. Following which, we will proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company. In connection with such a voluntary liquidation, the liquidator would give notice to our creditors inviting them to submit their claims for payment, by notifying known creditors (if any) who have not submitted claims and by placing a public advertisement in at least one newspaper published in the British Virgin Islands and in at least one newspaper circulating in the location where the Company has its principal place of business, and taking any other steps he considers appropriate, after which our remaining assets would be distributed.

As soon as our affairs are fully wound-up, if we were to liquidate, the liquidator must complete his statement of account and will then notify the Registrar of Corporate Affairs in the British Virgin Islands (the “Registrar”) that the liquidation has been completed. However, the liquidator may determine that he or she requires additional time to evaluate creditors’ claims (particularly if there is uncertainty over the validity or extent of the claims of any creditors). Also, a creditor or shareholder may file a petition with the British Virgin Islands Court, which, if successful, may result in our liquidation being subject to the supervision of that court. Such events might delay distribution of some or all of our remaining assets.