IPO and Offering Details - The company completed its Initial Public Offering on July 18, 2023, issuing 30,500,000 units at $10.00 per unit, generating gross proceeds of approximately $305.0 million[22]. - Offering costs incurred were approximately $18.0 million, including $10.7 million in deferred underwriting commissions[22]. - A private placement of 9,540,000 private placement warrants was executed simultaneously, generating gross proceeds of $9.5 million[23]. - Nabors raised approximately $276.0 million through its initial public offering in November 2021, selling about 27.6 million units[42]. Business Strategy and Focus - The business strategy focuses on the energy transition, targeting sectors such as alternative energy, energy storage, emissions reduction, and carbon capture[32][33]. - The company plans to leverage Nabors' expertise in energy transition and technology to identify and execute investment opportunities[33]. - The initial business combination strategy will target opportunities with meaningful growth prospects and market leadership[36]. - The company intends to prioritize environmental, social, and governance (ESG) factors in its operations[32]. - The company aims to focus on acquisition opportunities that benefit from access to public capital markets and Nabors' operational expertise[36]. - The company aims to focus on acquisition targets that can scale technology globally and have operational systems in place, targeting markets that account for 80% of hydrocarbon production[43]. - The company intends to focus on target businesses in emissions reduction, carbon capture, renewable energy, and mobile assets, but may pursue opportunities outside these sectors[196]. Acquisition Criteria and Process - Nabors has established criteria for acquisition candidates, including low-cost manufacturing capacity and expertise in modular, automation, and remote-controlled systems[43]. - The initial business combination must involve target businesses with a fair market value of at least 80% of the net assets held in trust[49]. - The company expects to conduct a thorough due diligence review of prospective target businesses, which may include meetings with management and document reviews[81]. - The company may pursue an initial business combination with a target that is affiliated with its sponsor, officers, or directors, provided an independent opinion is obtained[75]. - The company will seek shareholder approval for its initial business combination if required by law or applicable stock exchange rules[87]. Financial Position and Trust Account - The company has $331.8 million available in trust for a business combination as of December 31, 2024, assuming no redemptions[68]. - The anticipated pro rata redemption price for public shares is approximately $10.10 per share if the initial business combination is not completed within the specified period[48]. - The anticipated cash amount in the trust account is expected to be $10.10 per public share upon completion of the initial business combination[100]. - The company has approximately $1.6 million in cash outside the trust account as of December 31, 2024, which may be insufficient to fund its search for a target business[187]. - If the net proceeds from the Initial Public Offering and other sources are insufficient, public shareholders may only receive approximately $10.10 per share upon liquidation[185]. Redemption and Shareholder Rights - Public shareholders will have the opportunity to redeem their Class A ordinary shares regardless of their voting stance on the initial business combination[104]. - A minimum of 11,437,501 public shares, representing 37.5% of the 30,500,000 public shares sold in the Initial Public Offering, is required for approval of the initial business combination[106]. - Shareholders holding more than 15% of the shares sold in the Initial Public Offering will be restricted from redeeming excess shares without prior consent[113]. - The company will only complete an initial business combination in which it owns or acquires 50% or more of the outstanding voting securities of the target[78]. - If public shareholders tender more shares than the company is permitted to redeem, the tender offer will be withdrawn, and the initial business combination will not be completed[112]. Risks and Challenges - The company faces intense competition from other entities, including blank check companies and private equity groups, which may limit its ability to acquire larger target businesses[138]. - Regulatory review, such as by CFIUS, may delay or prohibit the initial business combination, limiting potential targets[170]. - The company may face increased competition for attractive targets due to the rise in special purpose acquisition companies, potentially raising costs[174]. - The company may not be able to find a suitable target business within the required timeframe, leading to liquidation[167]. - The ability of public shareholders to exercise redemption rights could increase the likelihood of an unsuccessful initial business combination[164]. Operational and Financial Obligations - The company is required to file periodic reports with the SEC, including annual and quarterly reports containing audited financial statements[140]. - The company may need additional financing to complete its initial business combination if the transaction requires more cash than available from the trust account[71]. - The company may need to reserve cash in the trust account to meet closing conditions, which could limit the ability to complete the most desirable business combination[163]. - The company may face complex tax obligations as a result of its initial business combination, potentially increasing the tax burden on shareholders and warrantholders[211]. - The company may need to use a substantial portion of its cash flow to service debt, limiting funds available for dividends and other corporate purposes[218]. Future Outlook and Conditions - The company has a 24-month timeframe from the closing of the Initial Public Offering to complete its initial business combination, or an earlier liquidation date as approved by the board of directors[122]. - If the initial business combination is not completed, public shareholders will receive a per-share redemption amount of approximately $10.10, based on the trust account balance, subject to claims from creditors[128]. - The company may seek to complete its initial business combination with a private company, which could result in unexpected profitability issues due to limited available information[217]. - Changes in laws or regulations may adversely affect the company's ability to negotiate and complete its initial business combination[191]. - The SEC has adopted new rules effective July 1, 2024, which may adversely affect the company's ability to engage financial advisors and complete initial business combinations[192].
Nabors Energy Transition Corp. II(NETDU) - 2024 Q4 - Annual Report