Nabors Energy Transition Corp. II

Item 1A. Risk Factors.

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Form on Form 10-K/A filed with the SEC on April 2, 2025. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. Other than as set forth below and in the Definitive Proxy, as amended and supplemented, as of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Form on Form 10-K/A filed with the SEC on April 2, 2025, except we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

Potential new trade policiesThe Company may not receive payment under the Settlement Agreement or the Notes by either maturity date or at all and the Company may not receive payment if it enters into an initial business combination.

Our receipt of the payment of the amounts due under the Settlement Agreement or under the Notes at the applicable maturity date will be dependent upon e2s ability to pay its obligations under the Settlement Agreement and the Notes on the applicable payment date. If e2 becomes unable to meet its respective financial obligations as they become due, we may not receive any or all of the amount(s) payable under the terms of the Settlement Agreement or the Notes. While the Notes will be secured, the security interests will not vest until obligations owed to a priority creditor are paid in full and actions to perfect the security interest may not be able to be taken until the security interest vests. Our status as a secured creditor may be impaired by virtue of this delay. Whether as a result of being unsecured or otherwise, in the event of a default under the Notes, we may not be able to (or it may be impractical to) foreclose on the collateral securing the Notes and/or the value of such collateral may be less than the amount owed under the Notes.

If, at the time of a Trigger Event (as defined in the Settlement Agreement), the Company has entered into a definitive agreement for an initial business combination, but such initial business combination has not yet been consummated, then any Trigger Event Payment (as defined in the Settlement Agreement) shall instead be deposited by e2 into an escrow account. If such definitive agreement for an initial business combination is terminated, the Trigger Event Payment will be released to the Company, and if such initial business combination is consummated, the Trigger Event Payment will be released to e2.

The Notes will be secured by the equity interests of Mission Critical e2 LLC and Mission Critical e2 Limited (Mission Critical) (but, in each case, only upon repayment in full of a priority creditor), and such collateral is subject to a variety of risks associated with the Energy Services Agreement by and between Mission Critical and Herbata, such as tariffs, could adome of which are outside of our control.

Herbata Limited, an Irish land development company (Herbata), is party to that certain Put and Call Option Agreement by and among Herbata, Mission Critical, Moffett Investment Holdings Unlimited Company and the shareholders of Herbata party thereto, dated April 9, 2024, pursuant to which (i) within the period starting on the date on which Herbata receives the final grant of applicable planning permission by the relevant authority for construction, development, and operation of the Herbata Project (the Planning Permissions) and ending on the six month anniversely affecary of the date of the receipt of such Planning Permissions, Herbata has the option to require e2, through Mission Critical, to purchase the entire issued share capital of Herbata and the data center campus in Kildare County, Ireland on a three-hectare site which will include six two-story data center buildings at Jigginstown, Halverstown, and Newhall, Naas, adjacent to the M7 Business Park (the Herbata Project) that Herbata is developing (the Put Option) and (ii) provided that the Put Option is not exercised at the time, until the expiration of the six month anniversary of the date of the receipt our search f such Planning Permissions, e2 may purchase the entire issued share capital of Herbata and the Herbata Project site, together with all related Planning Permissions.

Additionally, we are subject to other risks, including:

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Ifor an initial  we are deemed to be an investment company under the Investment Company Act of 1940, as amended (the Investment Company Act), we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete an initial business combination and .

If we are deemed to be an investment company under the Investment Company targAct, our activities may be restricted, including,

In addition, wet  may have imposed upon us burdensome requirements, including:

In order not to business with which the e regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading investment securities constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not intend to spend a considerable amount of time actively managing the assets in the Trust Account for the primary purpose of achieving investment returns. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.

We do not believe that our anticipated principal activities will subject us to the Investment Company may ultimately consummate anAct. To this end, the Company intends to only hold the proceeds in the Trust Account and any payments under the Settlement Agreement and Notes as cash or cash equivalents but may decide to invest them in United States government securities within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations initial busin the future. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at winding up (rather than on buying and selling business combination.

es in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an investment company within the meaning of the Investment Company Act. The IPO was not intended for persons who are seeking a return on investments in government securities or investment securities. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act.

In the adopting release for the final rules which became effective on July 1, 2024, the SEC provided guidance that a SPACs potential status as an investment company depends on a variety of factors, such as a SPACs duration, asset composition, business purpose and activities and is a question of facts and circumstances requiring individualized analysis. If we were deemed to be subject to compliance with and regulation under the Investment Company Act, we would be subject to additional regulatory burdens and expenses for which we have not allotted funds. Unless we are able to modify our activities so that we would not be deemed an investment company, we would either register as an investment company or wind down and abandon our efforts to complete an initial business combination.

Potential new trade policies, such as tariffs, could adversely affect our search for an initial business combination and any target business with which the Company may ultimately consummate an initial business combination.

There is currently significant uncertainty regarding the future relationship between the United States and various other countries arising from changes that may be implemented by the new presidential administration, including with respect to trade policies, treaties, tariffs, taxes, and other limitations on cross-border operations. Any actions taken by the United States federal government that restrict or could impact the economics of tradeincluding additional tariffs, trade barriers, and other similar measurescould have the potential to disrupt existing supply chains and trigger retaliatory efforts by other countries, including the imposition of tariffs, raising taxation, setting foreign exchange or capital controls, or establishing embargos, sanctions, or other import/export restrictions, thereby negatively impacting our business, both directly and indirectly. These developments, or the perception that more of them could occur, may materially adversely affect the global economy and stability of global financial markets, potentially reducing trade and depressing economic activity. Such changes in international trade policies may adversely affect our search for an initial business combination and any target business with which the Company may ultimately consummate an initial business combination, which could adversely affect our financial condition. The extent of such impacts cannot be predicted at this time.

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