Nabors SPAC Posts Q3 Loss, Terminates e2Companies Merger

TL;DR

**NETD is a busted SPAC, with its merger terminated and cash dwindling; get out now.**

AI Summary

Nabors Energy Transition Corp. II (NETD) reported a net loss of $2,288,322 for the three months ended September 30, 2025, a significant decline from a net income of $3,971,625 in the same period of 2024. For the nine months ended September 30, 2025, the company's net income dropped to $940,982 from $11,340,536 in 2024. This substantial decrease is primarily due to a sharp rise in general and administrative expenses, which surged to $7,341,098 for the nine months ended September 30, 2025, compared to $1,004,740 in the prior year. Interest earned on marketable securities held in the Trust Account also decreased to $8,282,080 from $12,345,276 year-over-year. The company's cash balance significantly decreased from $1,599,682 at December 31, 2024, to $629,566 at September 30, 2025. Total assets declined from $333,516,287 to $154,827,726, largely due to a reduction in cash and marketable securities held in the Trust Account from $331,781,130 to $154,158,677, driven by redemptions. The previously announced Business Combination Agreement with e2Companies, LLC was terminated on October 14, 2025, with NETD expecting settlement payments from e2.

Why It Matters

This 10-Q filing reveals a critical juncture for Nabors Energy Transition Corp. II (NETD) as its proposed business combination with e2Companies, LLC has been terminated. For investors, this means the SPAC is back to square one in its search for a target, increasing uncertainty and potentially leading to further redemptions. The significant decline in Trust Account assets from $331.8 million to $154.2 million due to redemptions indicates a lack of investor confidence in the SPAC's ability to execute its original plan. Competitively, this puts NETD at a disadvantage against other SPACs actively pursuing deals, as it now faces a tighter timeline and reduced capital. Employees and customers of potential target companies will also be impacted by the prolonged uncertainty.

Risk Assessment

Risk Level: high — The risk level is high due to the termination of the Business Combination Agreement with e2Companies, LLC on October 14, 2025, leaving the company without a target. The Trust Account balance has significantly decreased from $331,781,130 at December 31, 2024, to $154,158,677 at September 30, 2025, primarily due to redemptions, indicating substantial investor withdrawals and reduced capital for a future business combination. The company also reported a net loss of $2,288,322 for the three months ended September 30, 2025.

Analyst Insight

Investors should consider exiting their positions in NETD given the termination of its business combination and the significant reduction in its Trust Account. The company faces increased pressure to find a new target within its Combination Period, and the reduced capital makes a compelling deal less likely. Monitor for any new business combination announcements, but proceed with extreme caution.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$154,827,726

total Debt

$14,147,962

net Income

-$2,288,322

eps

N/A

gross Margin

N/A

cash Position

$629,566

revenue Growth

N/A

Key Numbers

• $2.29M — Net Loss (for the three months ended September 30, 2025, compared to $3.97M net income in 2024)
• $940.98K — Net Income (for the nine months ended September 30, 2025, down from $11.34M in 2024)
• $7.34M — General and Administrative Expenses (for the nine months ended September 30, 2025, up from $1.00M in 2024)
• $154.16M — Trust Account Balance (as of September 30, 2025, a decrease from $331.78M at December 31, 2024)
• 13,724,863 — Class A Ordinary Shares (subject to possible redemption as of September 30, 2025, down from 30,500,000 shares)
• $629,566 — Cash (as of September 30, 2025, down from $1,599,682 at December 31, 2024)
• $14.15M — Total Liabilities (as of September 30, 2025, down from $17.80M at December 31, 2024)
• $11.23 — Redemption Value per Share (as of September 30, 2025, up from $10.88 per share at December 31, 2024)
• 28 months — Combination Period (time from IPO closing to consummate a business combination)
• October 14, 2025 — Termination Date (of Business Combination Agreement with e2Companies, LLC)

Key Players & Entities

• Nabors Energy Transition Corp. II (company) — registrant
• e2Companies, LLC (company) — terminated business combination partner
• Liffey Merger Sub, LLC (company) — wholly owned subsidiary
• Nabors Energy Transition Sponsor II LLC (company) — Sponsor
• Continental Stock Transfer & Trust Company (company) — Trust Account trustee
• SEC (regulator) — U.S. Securities and Exchange Commission
• Nasdaq Stock Market LLC (regulator) — exchange where securities are registered
• $2,288,322 (dollar_amount) — net loss for three months ended September 30, 2025
• $154,158,677 (dollar_amount) — cash and marketable securities in Trust Account as of September 30, 2025
• $331,781,130 (dollar_amount) — cash and marketable securities in Trust Account as of December 31, 2024

FAQ

Risk Factors

• Termination of Business Combination Agreement [high — financial]: The termination of the Business Combination Agreement with e2Companies, LLC on October 14, 2025, significantly impacts the company's forward-looking strategy and financial projections. While settlement payments are expected, the failure to complete the combination introduces uncertainty and potential delays in achieving its business objectives.
• Significant Decline in Trust Account Balance [high — financial]: The Trust Account balance has decreased from $331.78 million at December 31, 2024, to $154.16 million at September 30, 2025. This reduction is primarily driven by redemptions, indicating a loss of investor confidence or a lack of viable business combination opportunities.
• Surge in General and Administrative Expenses [high — financial]: General and administrative expenses for the nine months ended September 30, 2025, increased to $7.34 million from $1.00 million in the prior year. This substantial rise, coupled with a net loss of $2.29 million for the quarter, indicates deteriorating operational efficiency and cost control.
• Decreased Interest Income [medium — financial]: Interest earned on marketable securities in the Trust Account has fallen from $12.35 million in the first nine months of 2024 to $8.28 million in the same period of 2025. This decline, while expected with a lower Trust Account balance, further reduces the company's income generation capacity.
• Reduced Cash Position [medium — financial]: The company's cash balance has significantly decreased from $1.60 million at December 31, 2024, to $629,566 at September 30, 2025. This shrinking liquidity could constrain operational flexibility and the ability to pursue new opportunities.
• Expiration of Combination Period [high — financial]: The company has a limited combination period of 28 months from its IPO to consummate a business combination. The termination of the e2Companies agreement brings the company closer to this deadline without a confirmed path forward, increasing the risk of liquidation.

Industry Context

Nabors Energy Transition Corp. II operates within the Special Purpose Acquisition Company (SPAC) sector, which has seen increased scrutiny and reduced deal flow. The market for SPACs is highly competitive, with many entities vying for attractive acquisition targets. Recent trends indicate a shift towards more established companies and a greater emphasis on due diligence, making it challenging for SPACs to complete business combinations within their mandated timelines.

Regulatory Implications

As a SPAC, Nabors Energy Transition Corp. II is subject to SEC regulations governing financial reporting and disclosure. The termination of its business combination agreement and the significant redemptions highlight potential investor concerns that could attract regulatory attention. Failure to complete a business combination within the specified period could lead to dissolution and return of funds to shareholders, impacting the company's operational continuity.

What Investors Should Do

1. Monitor the company's progress in identifying and negotiating a new business combination target, given the termination of the e2Companies agreement.
2. Analyze the impact of ongoing redemptions on the Trust Account balance and the company's ability to fund a future transaction.
3. Evaluate the sustainability of the company's current operational expenses in light of the significant increase in G&A and the declining net income.
4. Assess the potential outcomes and timelines associated with the expected settlement payments from e2Companies, LLC.

Key Dates

• 2025-10-14: Termination of Business Combination Agreement with e2Companies, LLC — This marks a significant setback, requiring the company to seek alternative business combination targets or face potential liquidation. Investors are concerned about the company's ability to find a suitable merger partner within its remaining timeframe.
• 2025-09-30: End of Third Quarter — Reporting period for the 10-Q, showing a substantial net loss and a significantly reduced Trust Account balance due to redemptions.
• 2024-12-31: End of Fiscal Year — Prior period comparison point, showing a much larger Trust Account balance and net income, highlighting the deterioration in financial performance and investor confidence.

Glossary

Trust Account

A segregated account, typically holding U.S. Treasury securities or money market funds, where proceeds from an initial public offering (IPO) of a special purpose acquisition company (SPAC) are held until a business combination is completed. (The balance in the Trust Account is a primary indicator of the company's available capital for a business combination and is subject to redemptions by shareholders.)

Class A Ordinary Shares Subject to Possible Redemption

Shares issued by a SPAC that holders have the right to redeem for cash upon the occurrence of certain events, typically the completion or failure of a business combination. (The significant number of these shares and their redemption value directly impact the company's cash position and the amount of capital available for a business combination.)

Business Combination Agreement

A contract outlining the terms and conditions under which a SPAC will merge with or acquire an operating company. (The termination of this agreement with e2Companies, LLC is a critical event that necessitates a new strategy for the SPAC.)

SPAC (Special Purpose Acquisition Company)

A shell company that is formed to raise capital through an IPO for the purpose of acquiring an existing company. (Nabors Energy Transition Corp. II is a SPAC, and its financial performance and reporting are dictated by the SPAC structure and regulatory requirements.)

Year-Over-Year Comparison

Compared to the prior year, Nabors Energy Transition Corp. II has experienced a dramatic shift from net income to net loss. For the nine months ended September 30, 2025, the company reported a net income of $940,982, a sharp decline from $11,340,536 in 2024. This is primarily driven by a substantial increase in general and administrative expenses, which rose to $7.34 million from $1.00 million year-over-year. Concurrently, the Trust Account balance has more than halved, from $331.78 million to $154.16 million, reflecting significant shareholder redemptions and a decrease in interest income earned on these securities.

Key Financial Figures

• $0.0001 — nsisting of one Class A ordinary share, $0.0001 par value, and one-half of one warrant
• $11.50 — ordinary share at an exercise price of $11.50 per share NETDW The Nasdaq Stock Ma

Filing Documents

• netd-20250930x10q.htm (10-Q) — 1078KB
• netd-20250930xex31d1.htm (EX-31.1) — 14KB
• netd-20250930xex31d2.htm (EX-31.2) — 14KB
• netd-20250930xex32d1.htm (EX-32.1) — 9KB
• netd-20250930xex32d2.htm (EX-32.2) — 7KB
• 0001104659-25-111099.txt ( ) — 5592KB
• netd-20250930.xsd (EX-101.SCH) — 53KB
• netd-20250930_cal.xml (EX-101.CAL) — 21KB
• netd-20250930_def.xml (EX-101.DEF) — 221KB
• netd-20250930_lab.xml (EX-101.LAB) — 360KB
• netd-20250930_pre.xml (EX-101.PRE) — 317KB
• netd-20250930x10q_htm.xml (XML) — 886KB

Financial Information

Part I. Financial Information

Financial Statements

Item 1. Financial Statements 1 Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 1 Condensed Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 2 Condensed Unaudited Consolidated Statements of Changes in Shareholders' Deficit for the three and nine months ended September 30, 2025 and 2024 3 Condensed Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 4 Notes to Condensed Unaudited Consolidated Financial Statements 5

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 23

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 27

Controls and Procedures

Item 4. Controls and Procedures 27

Other Information

Part II. Other Information

Legal Proceedings

Item 1. Legal Proceedings 28

Risk Factors

Item 1A. Risk Factors 28

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 30

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 30

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 30

Other Information

Item 5. Other Information 30

Exhibits

Item 6. Exhibits 31

Signatures

Signatures 32 i Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. NABORS ENERGY TRANSITION CORP. II CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2025 2024 (Unaudited) Assets Current assets Cash $ 629,566 $ 1,599,682 Prepaid expenses 28,750 5,000 Short-term prepaid insurance 10,733 130,475 Total current assets 669,049 1,735,157 Cash and marketable securities held in Trust Account 154,158,677 331,781,130 Total Assets $ 154,827,726 $ 333,516,287 Liabilities, Class A Ordinary Shares Subject to Possible Redemptions, and Shareholders' Deficit Current liabilities Accounts payable and accrued expenses $ 2,967,156 $ 296,368 Due to affiliate — 17,351 Total current liabilities 2,967,156 313,719 Overfunding and extension convertible notes - related party 3,800,000 3,050,000 Deferred legal fees 7,380,806 3,759,253 Deferred underwriting fee payable — 10,675,000 Total Liabilities 14,147,962 17,797,972 Commitments and Contingencies (Note 6) Class A ordinary shares subject to possible redemption, 13,724,863 and 30,500,000 shares at redemption value of $ 11.23 and $ 10.88 per share as of September 30, 2025 and December 31, 2024, respectively 154,158,677 331,781,130 Shareholders' Deficit Preference shares, $ 0.0001 par value; 5,000,000 shares authorized; none issued or outstanding as of September 30, 2025 and December 31, 2024 — — Class A ordinary shares, $ 0.0001 par value; 500,000,000 shares authorized; none issued or outstanding (excluding 13,724,863 and 30,500,000 shares subject to possible redemption) as of September 30, 2025 and December 31, 2024, respectively — — Class B ordinary shares, $ 0.0001 par value; 50,000,000 shares authorized; none issued or outstanding as of September 30, 2025 and December 31, 2024 — — Class F ordinary shares, $ 0.0001 par value; 50,000,000 shares authorized; 7,625,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024 7

View Full Filing

View this 10-Q filing on SEC EDGAR