Business Context and Reporting Period
This Form 8-K, dated March 4, 2026, reports that Nine Energy Service, Inc. (the "Company") emerged from Chapter 11 bankruptcy on March 5, 2026 (the "Plan Effective Date"). The Company filed voluntary petitions on February 1, 2026, and the Bankruptcy Court confirmed the prepackaged Plan of Reorganization on March 4, 2026. Concurrently, the New York Stock Exchange filed a Form 25 to delist the Company's common stock, effective 90 days after filing.
Key Financial Metrics and Capital Structure
Debt and Liquidity:
- Exit ABL Facility: The Company established a new senior secured asset-based revolving credit facility with an aggregate principal amount of $135.0 million.
- Availability: Borrowings are subject to a borrowing base calculation involving eligible accounts receivable, inventory, machinery, and equipment. A portion up to $5.0 million is available for standby letters of credit.
- Interest Rate: SOFR (1-month) with a 1.50% floor, plus an applicable margin of 3.50% to 4.00% based on the fixed charge coverage ratio.
- Maturity: Three years from the Plan Effective Date.
- Covenants: Includes a minimum excess availability of $5.0 million and a minimum fixed charge coverage ratio of 1.10 to 1.00 (tested when excess availability falls below specific thresholds).
Assets and Liabilities (Pre-Emergence):
- As of December 31, 2025, total assets were $339.5 million and total liabilities were $454.4 million.
Equity:
- Old Common Stock: 43,310,777 shares were canceled for no consideration.
- New Common Stock: Approximately 13,950,000 shares were issued to former Senior Secured Noteholders, representing 100% of the outstanding equity.
Material Changes Versus Prior Period
- Debt Restructuring: The Company terminated its 13.000% Senior Secured Notes due 2028 and the Prepetition Loan and Security Agreement. These obligations were converted into the new Exit ABL Facility and equity.
- Change in Control: Former Senior Secured Noteholders now hold 100% of the Company's equity. All pre-bankruptcy equity holders received no consideration.
- Board Composition: The entire prior board of directors resigned. A new board was appointed, including Patrick J. Bartels, Sandy Esslemont, and J. Carney Hawks, alongside reappointed members Ann G. Fox, Jerome (Joey) D. Hall, and Darryl K. Willis.
- Corporate Governance: The Company adopted a new Certificate of Incorporation and Bylaws, declassifying the board (annual elections), lowering the threshold for director removal, and expanding indemnification rights.
Guidance, Outlook, and Risks
Management Commentary and Agreements:
- Voting Agreements: The Company entered into voting agreements with MacKay Shields LLC and Philosophy Distressed and Special Solutions Fund LP. These agreements cap the voting power of these entities at 10% of total voting power, with excess shares voted in proportion to other stockholders.
- Registration Rights: A Registration Rights Agreement was executed with new stockholders, granting them demand and piggyback rights for future underwritten offerings.
- Use of Proceeds: Proceeds from the Exit ABL Facility are designated for working capital, general corporate purposes, and refinancing the DIP facility.
Risks and Contingencies:
- Delisting: The Company faces delisting from the NYSE, which may impact liquidity and investor access.
- Covenant Compliance: The Company must maintain specific financial covenants, including minimum excess availability and fixed charge coverage ratios, to avoid default on the new facility.
Investor Verification Checklist
- Verify the exact terms of the Exit ABL Facility borrowing base calculation and current availability.
- Confirm the status of the NYSE delisting process and potential alternative trading venues.
- Review the composition of the new Board of Directors and the appointment of the additional director by the Ad Hoc Group.
- Assess the impact of the 10% voting cap agreements on future corporate governance and control dynamics.
- Examine the detailed financial statements in the referenced Form 10-K (filed March 4, 2026) for post-bankruptcy asset valuations.