Drilling Tools plans 17.4M-share acquisition payment
The issuance requires stockholder approval, while closing also depends on director-election ratification or a final, non-appealable Section 205 order.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Drilling Tools International Corporation (DTI) is registering 17,355,139 common shares for issuance as equity consideration in its proposed acquisition of Saltire Energy Limited and Foxley Energy Limited. Under the October 8, 2026 agreement, DTI subsidiary Casing Technologies Group Limited would acquire 100% of both companies’ issued shares; the DTI shares would go to the Sellers other than Optimus Corporate Services Limited, trustee of the Cansco Limited Employee Trust 2007, at closing.
The consideration includes £60,289,856.60 in cash, approximately $81 million at the agreement’s $1.343-per-£1.00 exchange rate. Cash increases by £23,354 per day from July 1, 2026 until closing and is subject to agreed tax, leakage and employee-benefit-trust tax adjustments; the share count is fixed, and only the cash component is adjustable. DTI expects completion in the first quarter of 2027, subject to stockholder approval of the share issuance and ratification of prior director elections (or a final, non-appealable Section 205 order in lieu of ratification), financing and other conditions. The share issuance exceeds 20% of DTI’s outstanding common stock and would dilute existing holders.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- None.
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.If completed, the 17,355,139-share issuance would significantly dilute holders’ ownership and voting power.
Filing Explained
Seller shares face staged transfer restrictions for 24 months after closing, with one-third released at 12 and 24 months.
DTI’s preliminary Form S-4 seeks votes on its agreed Saltire and Foxley acquisition, which remains uncompleted; if it closes, issuing 17,355,139 shares would dilute existing holders. Closing also requires approval of the share issuance and ratification of the 2024–2026 director elections, or a final court order in place of ratification.
The filing says the registration statement must become effective before the shares can be distributed or issued, so the proposed issuance has not yet occurred.
After closing, the sellers may designate a board nominee if they collectively hold at least
The sellers’ shares are subject to transfer restrictions for
Key Figures
Key Terms
locked-box mechanism financial
Profit Ticker Amount financial
Consideration Loan Notes financial
Material Adverse Effect financial
W&I Policy financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What approvals are required to complete the DTI acquisition?
AI-generated analysis. How Rhea-AI works. Not financial advice.
As filed with the Securities and Exchange Commission on October 9, 2026
Registration No: 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________
DRILLING TOOLS INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
_______________________
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Delaware |
1389 |
87-2488708 |
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(State or Other Jurisdiction of |
(Primary Standard Industrial |
(I.R.S. Employer |
10370 Richmond Avenue #1000
Houston, Texas 77042
(832) 742-8500
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
_______________________
R. Wayne Prejean
Chairman and Chief Executive Officer
Drilling Tools International Corporation
10370 Richmond Ave #1000
Houston, Texas 77042
(832) 742-8500
(Name, address, including zip code, and telephone number, including area code, of agent for service)
_______________________
Copies to:
Michael J. Blankenship
Beniamin D. Smolij
Winston Taylor LLP
800 Capitol Street
Suite 2400
Houston, TX 77002
(713) 651-2678
_______________________
Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
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Exchange Act Rule 13e-4(i) (Cross - Border Issuer Tender Offer) |
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Exchange Act Rule 14d-1(d) (Cross - Border Third - Party Tender Offer) |
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The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. Drilling Tools International Corporation may not distribute or issue the securities being registered pursuant to this registration statement until the registration statement (of which this preliminary prospectus is a part), as filed with the Securities and Exchange Commission, is effective. The preliminary prospectus is not an offer to sell nor should it be considered a solicitation of an offer to buy the securities described herein in any state where the offer or sale is not permitted.
PRELIMINARY PROXY STATEMENT/PROSPECTUS DATED OCTOBER 9, 2026
SUBJECT TO COMPLETION
PROXY STATEMENT/PROSPECTUS
ACQUISITION PROPOSED — YOUR VOTE IS VERY IMPORTANT
_______________________
On behalf of the board of directors (the “DTI Board”) of Drilling Tools International Corporation, a Delaware corporation (“DTI”), we are pleased to enclose the accompanying proxy statement/prospectus relating to the acquisition of Saltire Energy Limited, a private limited company organized under the laws of Scotland, Company Number SC165384 (“Saltire”) and Foxley Energy Limited, a private limited company organized under the laws of Scotland, Company Number SC539080 (“Foxley” and together with Saltire, each a “Company” and, together with their respective subsidiaries, the “Group”). We are requesting that you take certain actions as a DTI stockholder.
On October 8, 2026, DTI and Casing Technologies Group Limited, a private limited company incorporated in Scotland and wholly owned subsidiary of DTI (the “Buyer”) entered into a Share Purchase Agreement (attached to this prospectus as Annex A, the “Share Purchase Agreement” or “SPA”) with Saltire, Foxley, the shareholders of the Group listed on the signature pages to the SPA (each, a “Seller,” and, collectively, the “Sellers”), and Jack William Loggie, solely in his capacity as the Seller Representative (the “Seller Representative”). DTI, Buyer, the Group, the Sellers, and the Seller Representative are collectively referred to herein as the “Parties” and individually as a “Party.”
Pursuant to the terms and subject to the conditions in the SPA, the Buyer will acquire 100% of the issued and outstanding share capital of each of Saltire and Foxley from the Sellers, free and clear of liens, at the Closing (the “Acquisition”). The date on which the Closing occurs is the “Closing Date.” If the Acquisition is completed, the Group will become indirect wholly owned subsidiaries of DTI, and their respective subsidiaries will become indirect subsidiaries of DTI.
The consideration payable to the Sellers pursuant to the SPA consists of a mix of (i) £60,289,856.60 in cash (approximately USD$81 million based on the exchange rate of $1.343 per £1.00 specified in the SPA) (the “Cash Consideration”) and (ii) unsecured loan notes to be issued by Buyer to the Sellers (other than Optimus Corporate Services Limited, solely in its capacity as trustee of the Cansco Limited Employee Trust 2007 (the “Trustee Seller”)) (the “Consideration Loan Notes”), which, pursuant to rollover loan note instruments and put and call option agreements among such Sellers, Buyer and certain subsidiaries of DTI (the “Rollover Documents”), will be exchanged at Closing for an aggregate of 17,355,139 shares of DTI common stock, par value $0.0001 per share (the “DTI Common Stock” and such shares, the “Equity Consideration” and together with the Cash Consideration, the “Consideration”). The Trustee Seller will receive its consideration entirely in cash, and the other Sellers will receive a correspondingly greater portion of their consideration in DTI Common Stock. Only the Cash Consideration is subject to adjustment under the SPA.
In connection with the Acquisition, DTI will issue 17,355,139 shares of DTI Common Stock to the Sellers (other than the Trustee Seller) as the Equity Consideration in exchange for the Consideration Loan Notes pursuant to the Rollover Documents. DTI stockholder approval of the share issuance is required under Nasdaq Listing Rule 5635(a), because the number of shares to be issued exceeds 20% of DTI’s outstanding common stock. DTI will hold a special meeting of stockholders in connection with the Acquisition (as may be adjourned or postponed from time to time, the “Special Meeting”), and, at the Special Meeting, DTI stockholders will be asked to consider and vote on proposals to (1) approve the issuance of DTI Common Stock to the Sellers pursuant to the SPA and the Rollover Documents (the “Share Issuance Proposal”), (2) approve the ratification of prior director elections pursuant to Section 204 of the DGCL (the “Ratification Proposal”), and (3) approve the adjournment of the Special Meeting to solicit additional proxies if there are not sufficient votes cast at the Special Meeting to approve the Share Issuance Proposal or the Ratification Proposal (the “Adjournment Proposal”). The DTI Board unanimously recommends that DTI stockholders vote “FOR” each of the proposals to be considered at the Special Meeting. Completion of the Acquisition is conditioned on the approval of the Share Issuance Proposal and the Ratification Proposal (or, in lieu of the Ratification Proposal, a final, non-appealable Section 205 order of the Delaware Court of Chancery shall have been obtained).
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DTI is providing this proxy statement/prospectus and accompanying proxy card to its stockholders in connection with the solicitation of proxies to be voted at the Special Meeting of DTI stockholders and any adjournments or postponements of the Special Meeting. Your vote is very important. Whether or not you plan to attend the Special Meeting virtually, please submit your proxy card without delay.
Investing in our securities involves risks. In reviewing this document, you should carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 13 of this document.
DTI Common Stock is listed on the Nasdaq Stock Market LLC under the symbol “DTI”.
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Sincerely, |
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R. Wayne Prejean |
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Chairman and Chief Executive Officer |
_______________________
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
_______________________
The date of this prospectus is [•], 2026, and it is first being mailed or otherwise delivered to DTI stockholders on or about [•], 2026.
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Drilling Tools International Corporation
10370 Richmond Avenue #1000
Houston, Texas 77042
(832) 742-8500
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [•], 2026
To the Stockholders of Drilling Tools International Corporation:
We are pleased to invite you to attend the special meeting of stockholders (the “Special Meeting”) of Drilling Tools International Corporation (“DTI”), which will be held via virtual webcast at www.virtualshareholdermeeting.com/DTI2026SM at [•] Central Time on [DATE], for the following purposes:
1. To vote on a proposal to approve the issuance of DTI’s common stock, par value $0.0001 per share (the “DTI Common Stock”) to shareholders (each, a “Seller” and, collectively, the “Sellers”) of Saltire Energy Limited, a Scottish private limited company (“Saltire”) and Foxley Energy Limited, a Scottish private limited company (“Foxley” and together with Saltire, each a “Company” and, together, the “Group”) in connection with the acquisition (the “Acquisition”) of the Group by DTI pursuant to the Share Purchase Agreement (the “Share Purchase Agreement” or “SPA”) dated as of October 8, 2026 by and among DTI, Casing Technologies Group Limited, a private limited company incorporated in Scotland and wholly owned subsidiary of DTI (the “Buyer”), the Group, the Sellers, and Jack William Loggie solely in his capacity as the Seller Representative (the “Seller Representative”), a copy of which is included as Annex A to the proxy statement/prospectus of which this notice is a part, for purposes of complying with Nasdaq Listing Rule 5635(a) (the “Share Issuance Proposal”);
2. To approve, pursuant to Section 204 of the Delaware General Corporation Law (the “DGCL”), the ratification of the elections of directors conducted at DTI’s 2024, 2025, and 2026 Annual Meetings of Stockholders (the “Prior Elections”), at which all of DTI’s directors were elected to one-year terms rather than the staggered three-year terms contemplated by Article V, Section A of DTI’s Second Amended and Restated Certificate of Incorporation (the “Charter” and such proposal, the “Ratification Proposal”). If approved, the ratification will be retroactive to the date of each of the Prior Elections; and
3. To approve the adjournment of the Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve the Share Issuance Proposal or the Ratification Proposal (the “Adjournment Proposal”).
DTI will conduct no other business at the Special Meeting except such business as may properly be brought before the Special Meeting by or at the direction of DTI’s Board of Directors (the “DTI Board”). References to the Special Meeting in the proxy statement/prospectus are to such Special Meeting as adjourned or postponed. Please refer to the proxy statement/prospectus of which this notice is a part for further information with respect to the business to be transacted at the Special Meeting.
The DTI Board has fixed the close of business on [•], 2026 as the record date for the Special Meeting (the “Record Date”). Only DTI stockholders of record at that time are entitled to receive notice of, and to vote at, the Special Meeting. A list of DTI stockholders of record entitled to vote at the Special Meeting will be available for examination by any stockholder, for any purpose germane to the Special Meeting, during ordinary business hours at DTI’s principal place of business for the 10-day period ending on the day before the Special Meeting.
Completion of the Acquisition is conditioned on approval of the Share Issuance Proposal and the Ratification Proposal (or, in lieu of the Ratification Proposal, a final, non-appealable order of the Delaware Court of Chancery under Section 205 of the DGCL). Approval of the Share Issuance Proposal requires the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the votes properly cast on such proposal. Approval of the Ratification Proposal, pursuant to Section 204(d)(4)(B) of the DGCL, requires the affirmative vote
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of a majority of the holders of shares of DTI Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote on the election of directors, excluding any putative stock. Abstentions, will have the same effect as a vote “AGAINST” the Ratification Proposal. Shares not present in person or represented by proxy will have no effect on the Ratification Proposal, assuming a quorum is present. The approval of the Adjournment Proposal is not a condition to the completion of the Acquisition. Approval of the Adjournment Proposal requires the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the outstanding shares of DTI Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote on the proposal, regardless of whether there is a quorum.
The DTI Board unanimously determined that the Acquisition and the transactions contemplated by the SPA are fair to, and in the best interests of, DTI and the holders of DTI Common Stock and approved and declared advisable the SPA and the transactions contemplated by the SPA, on the terms and subject to the conditions set forth in the SPA. The DTI Board also determined that it is in the best interests of the stockholders to ratify the Prior Elections. The DTI Board unanimously recommends that DTI stockholders vote “FOR” the Share Issuance Proposal, “FOR” the Ratification Proposal, and “FOR” the Adjournment Proposal.
Your vote is very important regardless of the number of shares you own. Whether or not you expect to attend the Special Meeting, to ensure your representation at the Special Meeting, we urge you to submit a proxy to vote your shares as promptly as possible by (i) accessing the internet site listed on the DTI proxy card, (ii) calling the toll-free number listed on the DTI proxy card, or (iii) submitting your DTI proxy card by mail using the provided self-addressed, stamped envelope. Submitting a proxy will not prevent you from voting at the Special Meeting, but it will help to secure a quorum and avoid added solicitation costs. Any eligible holder of DTI Common Stock who is present at the Special Meeting may vote in person (virtually), thereby cancelling any previous proxy. In any event, a proxy may be revoked at any time before the Special Meeting in the manner described in the accompanying proxy statement/prospectus. If your shares are held in the name of a bank, broker, or other nominee, please follow the instructions on the voting instruction card furnished by such bank, broker, or other nominee.
The enclosed proxy statement/prospectus provides a detailed description of the Acquisition, the SPA, and the other matters to be considered at the Special Meeting. We urge you to carefully read the proxy statement/prospectus, including any documents incorporated by reference, and the annexes in their entirety. If you have any questions concerning the Acquisition or the proxy statement/prospectus or if you would like additional copies or need help voting your shares of DTI Common Stock, please contact DTI at its principal executive offices, 10370 Richmond Avenue #1000, Houston, Texas 77042, telephone (832) 742-8500, or email InvestorRelations@drillingtools.com.
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BY ORDER OF THE DTI BOARD OF DIRECTORS, |
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R. Wayne Prejean |
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Chairman and Chief Executive Officer |
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[•], 2026 |
Table of Contents
TABLE OF CONTENTS
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Page |
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IMPORTANT NOTE ABOUT THIS PROSPECTUS |
iii |
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FREQUENTLY USED TERMS |
v |
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QUESTIONS AND ANSWERS ABOUT THE MEETING |
vii |
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SUMMARY |
1 |
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The Parties (See Pages 59 and 60) |
1 |
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The Acquisition and the Share Purchase Agreement (See Pages 50 and 57) |
2 |
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The Consideration (See Page 50) |
2 |
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The Special Meeting (See Page 38) |
3 |
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DTI Stockholder Approval Required (See Pages 42 and 44) |
3 |
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Recommendation of the DTI Board (See Page 50) |
3 |
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DTI Board’s Reasons for the Acquisition (See Page 50) |
3 |
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Opinion of DTI’s Financial Advisor (See Page 56) |
4 |
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Ownership of DTI After the Acquisition (See Page 42) |
4 |
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Directors and Executive Officers of DTI Upon the Consummation of the Acquisition (See Page 61) |
5 |
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Interests of Certain Persons in the Acquisition (See Page 65) |
5 |
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Conditions to the Completion of the Acquisition (See Page 57) |
5 |
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Termination of the SPA (See Page 57) |
6 |
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Expense Reimbursement (See Page 57) |
6 |
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Lock-up and Investor Rights Agreement (See Page 57) |
6 |
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Appraisal or Dissenters’ Rights (See Page 38) |
9 |
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Material U.S. Federal Income Tax Consequences (See Page 58) |
9 |
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Accounting Treatment of the Acquisition (See Page 55) |
9 |
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Nasdaq Listing (See Page 42) |
9 |
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Comparison of Stockholders’ Rights |
9 |
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Risk Factors (See Page 25) |
9 |
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MARKET PRICE AND DIVIDEND INFORMATION |
12 |
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Per Share Market Price and Dividend Information |
12 |
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RISK FACTORS |
13 |
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS |
28 |
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SPECIAL MEETING |
31 |
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SHARE ISSUANCE PROPOSAL |
35 |
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RATIFICATION PROPOSAL |
37 |
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adjournment proposal |
42 |
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THE ACQUISITION |
43 |
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Structure of the Acquisition |
43 |
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The Consideration |
43 |
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Background of the Acquisition |
43 |
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DTI Board’s Reasons for the Acquisition |
48 |
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The Group’s Reasons for the Acquisition |
51 |
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Regulatory Approvals |
52 |
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DTI Stockholder Approval of Share Issuance |
53 |
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Group Approval |
53 |
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Tax Treatment of the Acquisition |
53 |
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Accounting Treatment of the Acquisition |
53 |
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Opinion of DTI’s Financial Advisor |
54 |
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THE Share purchase agreement |
62 |
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U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE SPA |
66 |
i
Table of Contents
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INFORMATION ABOUT DTI |
67 |
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INFORMATION ABOUT the group |
68 |
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
76 |
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INFORMATION ABOUT dti UPON THE CONSUMMATION OF THE acquisition |
96 |
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Directors and Executive Officers of DTI Upon the Consummation of the Acquisition |
96 |
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unaudited pro forma condensed combined financial statements |
97 |
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CERTAIN RELATED PARTY TRANSACTIONS OF DTI |
112 |
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CERTAIN RELATED PARTY TRANSACTIONS OF THE COMPANIES |
113 |
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INTERESTS OF DIRECTORS AND OFFICERS IN THE acquisition |
114 |
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Interests of Directors and Executive Officers of DTI in the Acquisition |
114 |
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Interests of Directors and Executive Officers of the Group in the Acquisition |
114 |
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EXECUTIVE COMPENSATION OF DTI |
115 |
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SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND DIRECTORS AND EXECUTIVE OFFICERS OF DTI |
116 |
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SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND DIRECTORS AND EXECUTIVE OFFICERS OF the group |
120 |
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EXPERTS |
122 |
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LEGAL MATTERS |
122 |
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HOUSEHOLDING OF PROSPECTUS MATERIALS |
122 |
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WHERE YOU CAN FIND MORE INFORMATION |
123 |
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INDEX TO FINANCIAL STATEMENTS |
F-1 |
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SALTIRE ENERGY LIMITED |
F-2 |
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FOXLEY ENERGY LIMITED |
F-66 |
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ANNEX A SHARE PURCHASE AGREEMENT |
A-1 |
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ANNEX B OPINION OF EVERCORE |
B-1 |
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ANNEX C Ratification of Defective Corporate Acts Under Section 204 of the DGCL |
C-1 |
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ANNEX D DGCL Sections 204 and 205 |
D-1 |
ii
Table of Contents
IMPORTANT NOTE ABOUT THIS PROSPECTUS
This prospectus, which forms part of a registration statement on Form S-4 filed with the SEC by DTI (File No. 333-[•]), constitutes a prospectus of DTI under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of DTI Common Stock to be issued to the Sellers pursuant to the SPA.
This prospectus includes important business and financial information about DTI from other documents that DTI has filed with the SEC and that may not be included in or delivered with this prospectus. For where to find more information on DTI, please see the section entitled “Where You Can Find More Information” beginning on page 123 of this prospectus. DTI is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and accordingly files its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information with the SEC. As an electronic filer, DTI’s public filings are also maintained on the SEC’s Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The address of that website is https://www.sec.gov.
You may obtain any of the documents referred to above from the SEC, through the SEC’s website or from DTI, without charge, excluding any exhibits to them unless the exhibit is specifically listed as an exhibit to the registration statement on Form S-4 (the “Registration Statement”), of which this prospectus forms a part, by requesting such document(s) in writing, by telephone or by email at the following address:
Drilling Tools International Corporation
10370 Richmond Ave. #1000
Houston, TX 77042
(832) 742-8500
InvestorRelations@drillingtools.com
If you would like to request any documents, please do so by [•], 2026, which is five business days prior to the date of the Special Meeting, in order to receive them before the Special Meeting. To receive documents in a timely manner, it is suggested that you request such documents via email.
General information about DTI, including its annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments and exhibits to those reports, are available free of charge through DTI’s website at http://investors.drillingtools.com as soon as reasonably practicable after DTI files them with, or furnishes them to, the SEC. Information on DTI’s website is not incorporated into this prospectus and is not a part of this prospectus.
Except with respect to certain information provided by the Group on or prior to the date of this prospectus that pertains to subject matters not required to be included in this prospectus, neither DTI nor the Group have authorized anyone to give any information or make any representation about the Acquisition, DTI or the Group that is different from, or in addition to, what is contained in this prospectus or in any of the materials that have been incorporated by reference, and therefore, neither DTI nor the Group take any responsibility for, nor can provide any assurance as to the reliability of, any information other than the information contained in or incorporated by reference into this prospectus.
This prospectus is dated as of [•], 2026. The information contained in this prospectus is accurate only as of such date or, in the case of information in a document incorporated by reference, as of the date of such document, unless the information specifically indicates that another date applies. Neither the mailing nor delivery of this prospectus to the Sellers nor the issuance by DTI of shares of DTI Common Stock pursuant to the SPA will create any implication to the contrary.
This prospectus does not constitute an offer to sell, or the solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.
iii
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The information concerning DTI contained in or incorporated by reference into this prospectus has been provided by DTI, and the information concerning the Group contained in this prospectus has been provided by the Group.
DTI stockholder approval of the share issuance is required under Nasdaq Listing Rule 5635(a) because the issuance exceeds 20% of DTI’s outstanding common stock. DTI is soliciting proxies from its stockholders for the special meeting to approve that share issuance.
We are asking you for a proxy to vote on the proposed issuance of DTI Common Stock.
iv
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FREQUENTLY USED TERMS
• “Acquisition Documents” means the SPA, the Lock-up and Investor Rights Agreement, the W&I Policy, the employment and consulting arrangements, property leases, restrictive covenant agreements, disclosure letters, certificates and other ancillary agreements and documents entered into in connection with the Acquisition.
• “Adjusted Cash Consideration” means the Cash Consideration adjusted by the Profit Ticker Amount and reduced by the Agreed Tax Deduction and any Known Leakage Amount, with no completion accounts or post-Closing true-up.
• “Business Day” means any day other than a Saturday, Sunday or a day on which banks located in Houston, Texas or Edinburgh, United Kingdom are closed.
• “Buyer” means Casing Technologies Group Limited, a private company with limited liability, with its registered office at Unit 4 & 5 Enterprise Drive, Westhill Industrial Estate, Westhill, Scotland, AB32 6TQ Company Number SC328867.
• “Closing” means the closing and consummation of the transactions contemplated by the SPA.
• “Closing Date” means the date on which the Closing occurs, which date is currently January 5, 2027.
• “Cash Consideration” means £60,289,856.60 in cash (approximately $81 million based on the exchange rate of $1.343 per £1.00 specified in the SPA), subject to adjustment under the SPA.
• “Company Capital Stock” means all issued and outstanding shares of the capital stock of Saltire and Foxley.
• “Consideration Loan Notes” means the unsecured loan notes to be issued by Buyer at Closing to the Sellers (other than the Trustee Seller) under the Consideration Loan Note Instrument, which will be exchanged for the Equity Consideration pursuant to the Rollover Documents.
• “DGCL” means the General Corporation Law of the State of Delaware.
• “DTI Board” means the board of directors of DTI.
• “DTI Common Stock” means the common stock of DTI, par value $0.0001 per share.
• “Employee Plans” means all employment, consulting, bonus, incentive, pension, welfare, retirement, vacation, termination, severance and other compensation or benefit plans, arrangements and agreements maintained by the Group or any Subsidiary or under which the Group or any Subsidiary has any liability or obligation.
• “Equity Consideration” means the 17,355,139 shares of DTI Common Stock to be issued at Closing to the Sellers (other than the Trustee Seller) in exchange for the Consideration Loan Notes pursuant to the Rollover Documents.
• “GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, that are applicable to the circumstances of the date of determination, consistently applied.
• “Group” means Saltire Energy Limited and Foxley Energy Limited, together with their respective subsidiaries. Company numbers are Saltire SC165384 and Foxley SC539080.
• “Interim Period” means the period from the date of the SPA to the earlier of the Closing or termination of the SPA in accordance with its terms.
• “Lock-up and Investor Rights Agreement” means the agreement effective at Closing governing the lock-up, market arrangements, secondary-offering participation rights, Seller board designation rights, Seller board observation rights and standstill obligations applicable to the Sellers’ DTI Common Stock.
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• “Locked Box Accounts” means the balance sheet and related financial information of the Group as at the Locked Box Date used to calculate the Purchase Price and the cash-only adjustments.
• “Locked Box Date” means June 30, 2026.
• “Locked Box Period” means the period from the Locked Box Date through the Closing Date during which the Sellers are subject to the leakage covenant.
• “Purchase Price” means the aggregate consideration payable to the Sellers under the SPA, consisting of (i) the Adjusted Cash Consideration and (ii) the Equity Consideration.
• “Rollover Documents” means the rollover loan note instruments (including the Consideration Loan Note Instrument), the rollover loan notes issued thereunder (including the Consideration Loan Notes) and the put and call option agreements among the Sellers (other than the Trustee Seller), Buyer, Drilling Tools International Inc., Drilling Tools International Holdings Inc. and DTI, pursuant to which the Consideration Loan Notes will be exchanged at Closing for the Equity Consideration.
• “Sellers” means Michael David Loggie, Michael David John Loggie, Jack William Loggie, Michael David Loggie and Jack William Loggie, solely in their capacities as trustees of The Loggie Family Trust (the “Loggie Trustee Sellers”) and Optimus Corporate Services Limited, solely in its capacity as trustee of the Cansco Limited Employee Trust 2007.
• “Seller Representative” means Jack William Loggie, in his capacity as representative of the Sellers.
• “Trustee Seller” means Optimus Corporate Services Limited (formerly Tenon (IOM) Corporate Services Ltd), in its capacity as trustee of the Cansco Limited Employee Trust 2007.
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QUESTIONS AND ANSWERS ABOUT THE MEETING
The following are some questions that you, as a stockholder of DTI, may have regarding the Acquisition and the other matters being considered at the Special Meeting of DTI stockholders, and brief answers to those questions. You are urged to carefully read this proxy statement/prospectus and the other documents referred to in this proxy statement/prospectus in their entirety. Additional important information is contained in the annexes to, and the documents incorporated by reference into, this proxy statement/prospectus. You may obtain the information incorporated by reference in this proxy statement/prospectus for free by following the instructions in See the section entitled “Where You Can Find More Information.”
Q: Why am I receiving this proxy statement/prospectus?
A: You are receiving this proxy statement/prospectus, because on October 8, 2026, DTI and Buyer, a wholly owned subsidiary of DTI, entered into the SPA with the Group, the Sellers, and the Seller Representative. Pursuant to the SPA, the Buyer will acquire 100% of the issued and outstanding share capital of each of Saltire and Foxley from the Sellers in the Acquisition.
As part of the consideration for the Acquisition, DTI will issue 17,355,139 shares of DTI Common Stock to the Sellers (other than the Trustee Seller) in exchange for the Consideration Loan Notes pursuant to the Rollover Documents. Because this issuance exceeds 20% of the shares of DTI Common Stock outstanding immediately prior to the issuance, DTI stockholder approval of the share issuance is required under Nasdaq Listing Rule 5635(a).
DTI is holding the Special Meeting of stockholders to obtain that approval. This proxy statement/prospectus is being provided to you as both (i) a proxy statement of DTI to solicit your vote at the Special Meeting and (ii) a prospectus of DTI for the share of DTI Common Stock to be issued to the Sellers.
The SPA is attached to this proxy statement/prospectus as Annex A. You are encouraged to read the SPA carefully and in its entirety.
Q: What is the Acquisition?
A: The Acquisition is the purchase by the Buyer of 100% of the issued and outstanding share capital of each of Saltire and Foxley from the Sellers, free and clear of liens, pursuant to the SPA. This is a direct share purchase, not a merger. Upon completion of the Acquisition, the Group will become indirect wholly owned subsidiaries of DTI, and their respective subsidiaries will become indirect subsidiaries of DTI.
The consideration for the Group is payable in a combination of cash and a fixed number of shares of DTI Common Stock. The Acquisition is not subject to any earnout, or contingent payments. The Cash Consideration is subject to adjustments fixed at or before Closing (a daily profit ticker, known leakage, an agreed historic tax lease amount, and an agreed employee benefit trust tax adjustment), and Buyer may recover undisclosed leakage from the Sellers for 12 months after Closing.
Q: What will the Sellers receive in the Acquisition?
A: At the closing of the Acquisition, the Sellers will receive, in the aggregate:
• Cash Consideration: £60,289,856.60 in cash (approximately $81 million based on the exchange rate of $1.343 per £1.00 specified in the SPA), subject to adjustment under the SPA; and
• Equity Consideration: the Consideration Loan Notes, to be issued by Buyer to the Sellers (other than the Trustee Seller) and exchanged at Closing pursuant to the Rollover Documents for an aggregate of 17,355,139 shares of DTI Common Stock. The actual value of the Equity Consideration will depend on the market price of DTI Common Stock at Closing.
The number of shares of DTI Common Stock to be issued is fixed and will not fluctuate based on changes in the market price of DTI Common Stock between signing and Closing. The Trustee Seller will receive its consideration entirely in cash, and the other Sellers will receive a correspondingly greater portion of their consideration in DTI Common Stock. There is no earnout, contingent consideration, escrow, or holdback arrangement. A buyer-side warranty and indemnity insurance policy (the “W&I Policy”) serves as the primary recourse mechanism for representation and warranty claims in lieu of a traditional seller indemnification cap.
For more information, see the section entitled “The Acquisition — The Consideration.”
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Q: Who will own DTI following the Acquisition?
A: Upon completion of the Acquisition, based on [•] shares of DTI Common Stock outstanding as of the Record Date, and the issuance of 17,355,139 shares of DTI Common Stock as Equity Consideration, the Sellers would hold approximately [•]% of the outstanding shares of DTI Common Stock, and current DTI stockholders would hold approximately [•]% of the outstanding shares of DTI Common Stock. The exact ownership percentages will depend on the number of shares of DTI Common Stock outstanding immediately prior to the Closing.
For more information, see the section entitled “Information About DTI Upon Consummation.”
Q: What will be the composition of the DTI Board and management following the Acquisition?
A: Pursuant to the Lock-up and Investor Rights Agreement, the Sellers will be entitled to certain board designation and observation rights following the Closing.
The current DTI Board will remain unchanged following the completion of the Acquisition.
DTI’s executive management team, led by R. Wayne Prejean as Chairman and Chief Executive Officer and David R. Johnson as Chief Financial Officer, is expected to continue in their current roles following the completion of the Acquisition.
For more information, see the section entitled “The Acquisition — Board of Directors and Management of DTI Following the Acquisition.”
Q: How will DTI stockholders be affected by the Acquisition?
A: Upon completion of the Acquisition, each DTI stockholder will continue to hold the same number of shares of DTI Common Stock that such stockholder held immediately prior to the completion of the Acquisition. However, because DTI will be issuing 17,355,139 additional shares of DTI Common Stock to the Sellers as Equity Consideration, each share of DTI Common Stock outstanding immediately prior to the Acquisition will represent a smaller percentage of the aggregate number of shares of DTI Common Stock outstanding after the Acquisition.
As a result of the Acquisition, DTI stockholders will own shares in a larger company with expanded operations in the global oilfield services sector. The Group is Aberdeen, Scotland-based providers of downhole drilling tools, including BHA components, pipe and tubular products, and pressure control equipment, serving customers primarily in the Eastern Hemisphere. The Acquisition is expected to create a larger, more balanced, and resilient global platform by expanding DTI’s Eastern Hemisphere presence to approximately 40% of pro forma revenue, strengthening DTI’s Adjusted EBITDA margins and free cash flow generation from in the first year following Closing, and growing the combined rental tool fleet from approximately 63,000 to over 100,000 tools.
DTI Common Stock will continue to trade on Nasdaq under the symbol “DTI.”
Q: Where and when is the Special Meeting?
A: The Special Meeting will be held via virtual webcast at [TIME] Central Time on [•], 2026. You will be able to attend the Special Meeting online, vote your shares electronically, and submit questions during the Special Meeting by visiting www.virtualshareholdermeeting.com/DTI2026SM. There will be no physical location for the Special Meeting.
Q: What proposals will be voted on at the Special Meeting?
A: At the Special Meeting, DTI stockholders will be asked to consider and vote on the following proposals:
1. Share Issuance Proposal: To approve the issuance of shares of DTI Common Stock to the Sellers as Equity Consideration pursuant to the SPA, as required by Nasdaq Listing Rule 5635(a).
2. Ratification Proposal: To approve the ratification of the elections of directors conducted at DTI’s 2024, 2025, and 2026 Annual Meetings of Stockholders pursuant to Section 204 of the DGCL.
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3. Adjournment Proposal: To approve the adjournment of the Special Meeting to solicit additional proxies if there are not sufficient votes at the Special Meeting to approve the Share Issuance Proposal or the Ratification Proposal.
Completion of the Acquisition is conditioned on approval of the Share Issuance Proposal and the Ratification Proposal. Approval of the Adjournment Proposal is not a condition to completion of the Acquisition.
Q: Why is DTI stockholder approval required?
A: DTI stockholder approval is required under Nasdaq Listing Rule 5635(a), which requires stockholder approval prior to the issuance of securities in connection with the acquisition of the stock or assets of another company where the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance. Because the 17,355,139 shares of DTI Common Stock to be issued as Equity Consideration will exceed 20% of DTI’s outstanding common stock, DTI must obtain stockholder approval prior to issuing those shares.
Important: DTI stockholders are not being asked to approve the Acquisition itself or to adopt the SPA. The purpose of the vote on the Share Issuance Proposal is to satisfy the Nasdaq listing requirement for the share issuance, and DTI stockholders are separately being asked to approve the Ratification Proposal under Section 204 of the DGCL. Regardless of the vote outcome, DTI’s corporate existence, certificate of incorporation, and bylaws will not be directly affected by the Acquisition.
Q: How does the DTI Board recommend that I vote?
A: The DTI Board unanimously recommends that DTI stockholders vote “FOR” the Share Issuance Proposal, “FOR” the Ratification Proposal, and “FOR” the Adjournment Proposal.
For a discussion of the factors considered by the DTI Board in determining to recommend the Acquisition and the Share Issuance Proposal, see the section entitled “The Acquisition — DTI Board’s Reasons for the Acquisition.” For information on the DTI Board’s recommendation regarding the Ratification Proposal, see the section entitled “Ratification Proposal.”
Q: How important is my vote?
A: Your vote is very important. The Acquisition cannot be completed without the approval of the Share Issuance Proposal and the Ratification Proposal (or a Section 205 order in lieu of the Ratification Proposal) by DTI stockholders. Whether or not you expect to attend the Special Meeting, please submit your proxy as promptly as possible.
Q: What vote is required to approve the proposals?
A: Share Issuance Proposal: Approval requires the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the votes properly cast on such proposal. Assuming a quorum is present, shares that are not present in person or by proxy, abstentions, and broker non-votes (if any) will have no effect on the vote for this proposal.
Ratification Proposal: Approval requires, pursuant to Section 204(d)(4)(B) of the DGCL, the affirmative vote of the holders of a majority of the shares of DTI Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote on the election of directors, excluding any putative stock. Abstentions will have the same effect as a vote “AGAINST”) the Ratification Proposal. Assuming a quorum is present, shares that are not present in person or by proxy will have no effect on the Ratification Proposal. Because all proposals are non-routine, DTI does not expect any broker non-votes.
Adjournment Proposal: Approval requires the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the outstanding shares of DTI Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote on the proposal, regardless of whether there is a quorum. Shares that are not present in person or by proxy will have no effect on the vote for this proposal; however, abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal.
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Q: Who can vote at the Special Meeting, and what is the Record Date?
A: All DTI stockholders who hold shares of DTI Common Stock of record at the close of business on [•], 2026 (the “Record Date”) are entitled to receive notice of, and to vote at, the Special Meeting. As of the Record Date, there were [•] shares of DTI Common Stock outstanding and entitled to vote at the Special Meeting.
Q: How many votes can I cast?
A: Each issued and outstanding share of DTI Common Stock entitles its holder of record to one vote on each matter to be considered at the Special Meeting. The DTI stockholders of record on the Record Date are the only DTI stockholders that are entitled to receive notice of, and to vote at, the Special Meeting.
Q: What constitutes a quorum?
A: In order for business to be conducted at the Special Meeting, a quorum must be present. Holders of shares of DTI Common Stock representing a majority in voting power of the shares of DTI Common Stock issued and outstanding and entitled to vote at the Special Meeting, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Special Meeting.
Abstentions and broker non-votes will be included in determining whether a quorum is present at the Special Meeting. A “broker non-vote” occurs when a nominee (such as a broker) holding shares for a beneficial owner abstains from voting on a particular proposal because the nominee does not have discretionary voting power for that proposal and has not received instructions from the beneficial owner on how to vote those shares.
Q: What do I need to do now?
A: After you have carefully read and considered the information contained in or incorporated by reference into this proxy statement/prospectus, please submit your proxy via the internet or by telephone in accordance with the instructions set forth on the applicable proxy card or voting instruction form you received, or complete, sign, date, and return the applicable proxy card or voting instruction form in the self-addressed, stamped envelope provided as soon as possible so that your shares will be represented and voted at the Special Meeting.
For additional information on voting procedures, please see the section entitled “Special Meeting.”
Q: How will my proxy be voted?
A: If you submit your proxy via the internet, by telephone, or by completing, signing, dating, and returning the applicable proxy card or voting instruction form, your proxy will be voted in accordance with your instructions. If you sign your proxy card and return it without indicating how you would like to vote your shares, your proxy card will be voted in accordance with the recommendation of the DTI Board (i.e., “FOR” each of the proposals).
For additional information on voting procedures, please see the section entitled “Special Meeting.”
Q: What should I do if I receive more than one set of voting materials for the Special Meeting?
A: You may receive more than one set of voting materials for the Special Meeting, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction forms. For example, if you hold your shares of DTI Common Stock in more than one brokerage account, you will receive a separate voting instruction form for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please submit each separate proxy or voting instruction form that you receive by following the instructions set forth in each separate proxy or voting instruction form. If you fail to submit each separate proxy or voting instruction form that you receive, not all of your shares will be voted.
Q: What is the difference between holding shares as a record holder and holding shares as a beneficial owner?
A: If your shares of DTI Common Stock are registered directly in your name with DTI’s registrar and transfer agent, Continental Stock Transfer & Trust Company (“CST”), you are considered, with respect to those shares, to be the stockholder of record. If you are a stockholder of record, this proxy statement/prospectus and your proxy card have been sent directly to you by DTI.
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If your shares of DTI Common Stock are held through a bank, broker, or other nominee, you are considered, with respect to those shares, the beneficial owner, and those shares are held in “street name” by that organization. As the beneficial owner, you have the right to direct your bank, broker, or other nominee on how to vote your shares by using the voting instruction form provided by that organization.
Q: If my shares are held in “street name,” will my nominee automatically vote for me?
A: No. If you hold your shares in street name through a bank, broker, or other nominee, your nominee will not vote your shares unless you provide instructions on how to vote. You should instruct your nominee how to vote your shares by following the directions provided by your nominee. Under the rules of the Nasdaq Stock Market, the Share Issuance Proposal, the Ratification Proposal, and the Adjournment Proposal are “non-routine” matters for which brokers do not have discretionary authority to vote. If you do not instruct your nominee on how to vote, your shares will not be voted, which will have no effect on the outcome of the Share Issuance Proposal (assuming a quorum is present) but could reduce the number of shares counted for quorum purposes.
Q: What do I do if I want to revoke my proxy?
A: You may revoke your proxy at any time before the vote is taken at the Special Meeting. To revoke your proxy, you must either: (i) submit a new proxy by internet, telephone, or mail with a later date; (ii) send a written notice of revocation to DTI’s Corporate Secretary at Drilling Tools International Corporation, 10370 Richmond Ave. #1000, Houston, Texas 77042; or (iii) attend the Special Meeting virtually and vote in person (which will automatically revoke any previously submitted proxy). Simply attending the Special Meeting without voting will not revoke any proxy that you have previously submitted.
If you hold your shares through a bank, broker, or other nominee in street name, you should contact that organization to revoke a previously submitted voting instruction.
Q: What are the conditions to completing the Acquisition?
A: The obligations of the parties to complete the Acquisition are subject to the satisfaction or waiver of certain conditions, including, among others:
Mutual Conditions: (i) no order by any governmental authority prohibiting, restraining or making illegal the transactions contemplated by the SPA shall be in effect; (ii) the Form S-4 Registration Statement shall have become effective and no stop order shall be in effect; (iii) the Share Issuance Proposal and Ratification Proposal shall have been approved by DTI stockholders (or, in lieu of the Ratification Proposal, a final, non-appealable Section 205 order of the Delaware Court of Chancery shall have been obtained) (the “Parent Stockholder Approval”); and (iv) the shares of DTI Common Stock to be issued as Equity Consideration shall have been approved for listing on Nasdaq, subject to official notice of issuance.
Additional Conditions to Buyer’s Obligations: (i) the representations and warranties of the Sellers and the Group is true and correct (with applicable materiality qualifiers); (ii) the Sellers and the Group have performed their covenants in all material respects; (iii) no Material Adverse Effect shall have occurred since signing; and (iv) Buyer shall have obtained debt financing on terms consistent with the Agreed Financing Terms in an amount sufficient to pay the Adjusted Cash Consideration and all related fees and expenses.
Additional Conditions to Sellers’ Obligations: (i) the representations and warranties of Buyer and DTI are true and correct (with applicable materiality qualifiers); (ii) Buyer and DTI have performed their covenants in all material respects; (iii) the Lock-up and Investor Rights Agreement shall be in full force and effect; and (iv) the Sellers shall have received clearance (or confirmation that clearance is not required) from His Majesty’s Revenue and Customs in respect of the exchange of shares for loan notes.
For more information, see the section entitled “The Share Purchase Agreement — Conditions to Closing.”
Q: When do DTI and the Group expect to complete the Acquisition?
A: DTI currently expects to complete the Acquisition in the first quarter of 2027. However, neither DTI nor the Group can predict the actual date on which the Acquisition will be completed, nor can the parties ensure that the Acquisition will be completed, because completion is subject to conditions beyond the control of either
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party, including the receipt of Parent Stockholder Approval, the satisfaction of other closing conditions, and the obtainment of financing. If the Acquisition is not completed by March 31, 2027 (the “Outside Date”), either party may terminate the SPA (subject to certain limitations).
Please see the sections entitled “The Acquisition — Regulatory Approvals” and “The Share Purchase Agreement — Conditions to Closing.”
Q: What happens if the Acquisition is not completed?
A: If the Acquisition is not completed for any reason, the Sellers will not receive any consideration, DTI will not issue any shares of DTI Common Stock to the Sellers, and the Group will not become subsidiaries of DTI. DTI Common Stock will continue to be listed and traded on Nasdaq under the symbol “DTI.”
The SPA does not provide for the payment of a traditional termination fee by either party. However, if the SPA is terminated due to a breach by the Sellers or the Group (as agreed by the parties or determined by a court), or if the Seller Representative terminates the SPA for reasons other than a Buyer breach, and an Alternate Acquisition is completed within 12 months, the Sellers will reimburse Buyer’s documented third-party expenses, capped at £1,500,000.
For more information, see the section entitled “The Share Purchase Agreement — Termination of the Agreement.”
Q: Are there any termination fees?
A: No. The SPA does not provide for a traditional termination fee payable by either party to the other upon termination. In limited circumstances described above, the Sellers may be required to reimburse Buyer’s documented third-party expenses, subject to a cap of £1,500,000.
Q: What are the material U.S. federal income tax consequences of the Acquisition to DTI stockholders?
A: The issuance of shares of DTI Common Stock to the Sellers as Equity Consideration pursuant to the SPA is not expected to result in any material U.S. federal income tax consequences to existing DTI stockholders.
For a more complete discussion of the U.S. federal income tax consequences of the Acquisition, see the section entitled “U.S. Federal Income Tax Consequences of the SPA.” Each DTI stockholder is urged to consult with its own tax advisor regarding the particular U.S. federal, state, local, and non-U.S. income and other tax consequences of the Acquisition applicable to it.
Q: Are DTI stockholders entitled to appraisal or dissenters’ rights?
A: No. DTI stockholders are not entitled to appraisal rights under the DGCL in connection with the Acquisition. Because the Acquisition is structured as a share purchase of the Group’s stock by the Buyer, and not as a merger involving DTI, there is no statutory basis for appraisal rights under Section 262 of the DGCL. DTI stockholders are voting on the issuance of shares of DTI Common Stock under Nasdaq Listing Rule 5635(a), the ratification of the Prior Elections under Section 204 of the DGCL and the Adjournment Proposal, none of which triggers appraisal rights.
Q: Are there any risks that I should consider in connection with the Acquisition?
A: Yes. You should carefully read and consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 13 of this proxy statement/prospectus. You should also carefully consider the other information contained in or incorporated by reference into this proxy statement/prospectus.
Q: Do any officers or directors of DTI have interests in the Acquisition that differ from my interests as a DTI stockholder?
A: No. None of DTI’s directors or executive officers is a party to the SPA or the Rollover Documents, and none of them will receive any portion of the Consideration. The Acquisition will not constitute a change in control of DTI under any DTI plan or agreement, and no DTI director or executive officer will receive any change-in-control, severance, transaction or retention payment, any new or accelerated equity award, or any new employment or compensation arrangement in connection with the Acquisition. However, each of DTI’s
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current directors was elected at one or more of the Prior Elections that are the subject of the Ratification Proposal, and approval of the Ratification Proposal is a condition to the Acquisition. DTI’s directors and executive officers are expected to continue in their current roles following the Closing and will continue to be entitled to indemnification and insurance under DTI’s existing governing documents, indemnification agreements and directors’ and officers’ liability insurance. See “Ratification Proposal — Interests of Directors and Executive Officers.”
Q: What happens if I sell or transfer my shares of DTI Common Stock before the Special Meeting?
A: The Record Date is earlier than the date of the Special Meeting and the date on which the Acquisition is expected to be completed. If you sell or transfer your shares of DTI Common Stock after the Record Date but before the Special Meeting, you will retain your right to vote at the Special Meeting (provided you held shares as of the Record Date), but you will not hold shares of DTI Common Stock at the time the Acquisition is completed and therefore will not participate in the post-Acquisition company.
Q: Where can I find the voting results of the Special Meeting?
A: DTI intends to announce preliminary voting results at the Special Meeting and will publish final voting results in a Current Report on Form 8-K to be filed with the SEC within four business days after the date of the Special Meeting.
Q: How can I find more information about DTI and the Group?
A: You can find more information about DTI from the various sources described in the section entitled “Where You Can Find More Information.” DTI files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and other information with the SEC. These filings are available at the SEC’s website at www.sec.gov and at DTI’s website at http://investors.drillingtools.com.
Because the Group is private companies organized under the laws of Scotland, they do not file reports with the SEC. Information about the Group is set forth in the section entitled “Information About the Group” in this proxy statement/prospectus.
Q: Who can answer my questions?
A: If you have any questions concerning the Acquisition, the Special Meeting, or this proxy statement/prospectus, would like additional copies of this proxy statement/prospectus, or need help voting your shares, please contact DTI at its principal executive offices, 10370 Richmond Avenue #1000, Houston, Texas 77042, telephone (832) 742-8500, or email InvestorRelations@drillingtools.com.
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SUMMARY
This summary highlights selected information included in this prospectus and may not contain all of the information that is important to you. To better understand the Acquisition, you should carefully read this entire prospectus and its annexes and the other documents referred to in this prospectus. Additional important information about DTI and the Group is also contained in the annexes to, and the documents incorporated by reference into, this prospectus. For a description of, and instructions as to how to obtain, this information, see the section entitled “Where You Can Find More Information” elsewhere in this prospectus. Each item in this summary includes a page reference directing you to a more complete description of that item.
The Parties (See Pages 55 and 60)
Drilling Tools International Corporation (DTI)
DTI is a global oilfield services company that designs, engineers, manufactures, and rents downhole tools for horizontal and directional drilling. DTI’s operations are organized across its Directional Tool Rentals, Premium Tools, Wellbore Optimization Tools, and Other Products & Services segments. DTI maintains operations throughout the United States (Texas, Louisiana, Oklahoma, Pennsylvania, North Dakota, New Mexico, Utah, and Wyoming) and internationally (Canada, the United Kingdom, Europe, the Middle East, and Asia-Pacific). DTI Common Stock is listed on the Nasdaq Stock Market LLC under the symbol “DTI.” DTI’s principal executive offices are located at 10370 Richmond Avenue #1000, Houston, Texas 77042, and its telephone number is (832) 742-8500, or email InvestorRelations@drillingtools.com.
Additional information about DTI and its subsidiaries is included in the documents incorporated by reference into this prospectus. See the section entitled “Where You Can Find More Information” beginning on page 123 of this prospectus.
Buyer
Casing Technologies Group Limited, a private company with limited liability, with its registered office at Unit 4 & 5 Enterprise Drive, Westhill Industrial Estate, Westhill, Scotland, AB32 6TQ Company Number SC328867, and a direct, wholly-owned subsidiary of DTI, as formed for the purpose of consummating the Acquisition. Buyer has not carried on any activities other than those related to the Acquisition and has no other material assets or liabilities.
The Group
Saltire Energy Limited (Company Number SC165384) and Foxley Energy Limited (Company Number SC539080) are each private limited companies organized under the laws of Scotland. The Group is headquartered in Aberdeen, Scotland. The Group is a provider of downhole drilling tools, including bottomhole assembly (“BHA”) components, pipe and tubular products, and pressure control equipment, serving oil and gas exploration and production operators primarily in the Eastern Hemisphere, including the United Kingdom, continental Europe, the Middle East, and Africa. The Group maintains a rental tool fleet that, when combined with DTI’s existing fleet of approximately 63,000 tools, is expected to create a combined fleet of over 100,000 rental tools.
The Sellers
The Sellers are Michael David Loggie, Michael David John Loggie, Jack William Loggie, the Loggie Trustee Sellers (as trustees of The Loggie Family Trust) and Optimus Corporate Services Limited, solely in its capacity as trustee of the Cansco Limited Employee Trust 2007, who collectively hold 100% of the issued and outstanding share capital of the Group.
Seller Representative
Jack William Loggie serves as the Seller Representative under the SPA and the Lock-up and Investor Rights Agreement and is authorized to act on behalf of the Sellers with respect to certain matters under the SPA following the Closing and in exercising the Sellers’ rights under the Lock-up and Investor Rights Agreement.
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The Acquisition and the Share Purchase Agreement (See Pages 43 and 55)
On October 8, 2026, DTI and Buyer entered into the Share Purchase Agreement (the “SPA”) with the Group, the Sellers, and the Seller Representative. Pursuant to the SPA, Buyer will acquire 100% of the issued and outstanding share capital of each of Saltire and Foxley from the Sellers, free and clear of liens, at the Closing (the “Acquisition”). If the Acquisition is completed, the Group will become indirect wholly owned subsidiaries of DTI, and their respective subsidiaries will become indirect subsidiaries of DTI.
The Acquisition is structured as a direct share purchase, not a merger. DTI is not itself a party to a merger, and DTI’s corporate existence, certificate of incorporation, and bylaws will not be directly affected by the Acquisition. In connection with the Acquisition, DTI stockholders are being asked to approve the issuance of shares of DTI Common Stock as Equity Consideration to the Sellers, as required under Nasdaq Listing Rule 5635(a), and the Ratification Proposal, each of which is a condition to the Closing.
The SPA is attached to this proxy statement/prospectus as Annex A. You are encouraged to read the SPA in its entirety. See the section entitled “The Share Purchase Agreement” beginning on page 62 for a more detailed description of the terms of the SPA.
The Consideration (See Page 43)
The consideration payable to the Sellers consists of:
• Cash Consideration: £60,289,856.60 in cash (approximately $81 million based on the exchange rate of $1.343 per £1.00 specified in the SPA), increased by the Profit Ticker Amount of £23,354 for each day from July 1, 2026 until the Closing, reduced by the Agreed Tax Deduction and any Known Leakage Amounts, and increased or decreased by an agreed adjustment relating to an employee benefit trust tax liability (as adjusted, the “Adjusted Cash Consideration”); and
• Equity Consideration: the Consideration Loan Notes, to be issued by Buyer to the Sellers (other than the Trustee Seller) and exchanged at Closing pursuant to the Rollover Documents for an aggregate of 17,355,139 shares of DTI Common Stock. The actual value of the Equity Consideration will depend on the market price of DTI Common Stock at Closing.
The number of shares of DTI Common Stock to be issued as Equity Consideration is fixed and will not fluctuate based on changes in the market price of DTI Common Stock between signing and closing. The Trustee Seller will receive its consideration entirely in cash, and the other Sellers will receive a correspondingly greater portion of their consideration in DTI Common Stock. There are no earnout, contingent consideration, escrow, or holdback arrangements. Only the Cash Consideration is subject to adjustment, and only through the locked-box mechanism described below.
Loan Note Rollover. At Closing, Buyer will issue the Consideration Loan Notes to the Sellers (other than the Trustee Seller) in the proportions set out in the SPA. Pursuant to the Rollover Documents, the Consideration Loan Notes will be exchanged, through a series of rollover loan notes issued by Drilling Tools International Inc. and Drilling Tools International Holdings Inc., for the 17,355,139 shares of DTI Common Stock comprising the Equity Consideration, which DTI will deliver at Closing. The loan notes are transitory instruments intended to facilitate the Sellers’ U.K. tax treatment, and no loan notes are expected to remain outstanding following the Closing.
Locked-Box Mechanism. The Purchase Price was determined by reference to the financial position of the Group as at June 30, 2026 (the “Locked Box Date”). There are no post-closing completion accounts or true-up adjustments. Instead, the SPA employs a locked-box mechanism under which the Sellers covenant that no “Leakage” (as defined in the SPA) has occurred or will occur from the Locked Box Date through the Closing Date, subject to permitted leakage items. The locked-box mechanism is a standard pricing mechanism commonly used in UK and European M&A transactions as an alternative to a post-closing completion accounts process.
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The Special Meeting (See Page 31)
DTI will hold a special meeting of stockholders (the “Special Meeting”) on [•], 2026, at [•] Central Time. The Special Meeting will be held via virtual webcast at www.virtualshareholdermeeting.com/DTI2026SM. Only holders of DTI Common Stock of record as of the close of business on [•], 2026 (the “Record Date”) are entitled to notice of, and to vote at, the Special Meeting. As of the Record Date, there were [•] shares of DTI Common Stock outstanding and entitled to vote.
At the Special Meeting, DTI stockholders will be asked to consider and vote on the following proposals:
• Share Issuance Proposal: To approve the issuance of 17,355,139 shares of DTI Common Stock to the Sellers as Equity Consideration pursuant to the SPA, as required by Nasdaq Listing Rule 5635(a);
• Ratification Proposal: To approve the ratification of the elections of directors conducted at DTI’s 2024, 2025, and 2026 Annual Meetings of Stockholders pursuant to Section 204 of the DGCL; and
• Adjournment Proposal: To approve the adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of Special Meeting to approve the Share Issuance Proposal or the Ratification Proposal.
DTI Stockholder Approval Required (See Pages 42 and 44)
DTI stockholder approval of the share issuance is required under Nasdaq Listing Rule 5635(a), which requires stockholder approval prior to the issuance of securities in connection with the acquisition of stock or assets of another company where the number of shares to be issued equals or exceeds 20% of the common stock outstanding before the issuance. Because the 17,355,139 shares of DTI Common Stock to be issued as Equity Consideration exceed 20% of DTI’s currently outstanding common stock, DTI must obtain stockholder approval prior to issuing those shares.
Approval of the Share Issuance Proposal requires the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the votes properly cast on such proposal. Approval of the Ratification Proposal requires, pursuant to Section 204(d)(4)(B) of the DGCL, the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the shares of DTI Common Stock present in person or represented by proxy and entitled to vote on the election of directors, excluding any putative stock. Abstentions will have the same effect as a vote “AGAINST” the Ratification Proposal, and shares not present in person or represented by proxy will have no effect, assuming a quorum is present. Approval of the Adjournment Proposal requires the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the outstanding shares present in person or represented by proxy and entitled to vote.
Recommendation of the DTI Board (See Page 31)
The DTI Board unanimously recommends that DTI stockholders vote “FOR” the Share Issuance Proposal, “FOR” the Ratification Proposal, and “FOR” the Adjournment Proposal.
The DTI Board unanimously determined that the Acquisition and the transactions contemplated by the SPA are fair to, and in the best interests of, DTI and the holders of DTI Common Stock, and approved the SPA and the transactions contemplated thereby. Under the SPA, the DTI Board may not withdraw, qualify, or modify The DTI Board recommendation.
DTI Board’s Reasons for the Acquisition (See Page 49)
In evaluating and approving the Acquisition, the DTI Board considered a number of factors, including, among others:
• the strategic rationale for adding the Group’s products and services to DTI’s platform, including expanding DTI’s geographic reach and customer base;
• the contemplated benefits of the Acquisition, including revenue synergies, operational efficiencies, and enhanced scale;
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• the DTI Board’s knowledge of the Group’s business, operations, financial condition, and prospects based on extensive due diligence;
• the belief that the addition of the Group’s products and services will have a positive strategic impact on DTI’s ability to serve its customers;
• the financial terms of the Acquisition, including the Purchase Price and the mix of cash and equity consideration;
• the opinion of Evercore Group L.L.C. (“Evercore”) (see “— Opinion of DTI’s Financial Advisor” below); and
• the other terms and conditions of the SPA, including the parties’ representations, warranties, covenants, and conditions to closing.
The DTI Board also considered a number of countervailing factors and potential risks, including the risk that the Acquisition may not be completed, regulatory approval risks, potential integration difficulties, management attention diversion, compensation and personnel challenges, the risk that anticipated benefits may not be fully realized, stock price volatility, dilution to existing stockholders, and the impact on DTI’s existing business relationships.
After considering the totality of the information available, the DTI Board determined that the benefits of the Acquisition outweigh these risks and that the Acquisition is in the best interests of DTI and its stockholders.
For a more complete discussion of the DTI Board’s reasons for the Acquisition, see the section entitled “The Acquisition — DTI Board’s Reasons for the Acquisition” beginning on page 48.
Opinion of DTI’s Financial Advisor (See Page 54)
DTI retained Evercore to act as its financial advisor in connection with the Acquisition. As part of this engagement, the DTI Board requested that Evercore evaluate the fairness of the consideration to be paid to the Sellers in the Acquisition, from a financial point of view, to DTI. On October 5, 2026, Evercore rendered its oral opinion to the DTI Board that, as of such date and based upon and subject to the various assumptions, qualifications, and limitations set forth in its written opinion, the consideration (consisting of DTI Common Stock and £60,000,000.00 in cash) to be paid to the Sellers in the Acquisition was fair, from a financial point of view, to DTI. Evercore subsequently confirmed its oral opinion by delivery of a written opinion, dated October 8, 2026 that, as of such date and based upon and subject to the various assumptions, qualifications, and limitations set forth therein, the Consideration to be paid to the Sellers in the Acquisition was fair, from a financial point of view, to DTI.
The full text of the written opinion of Evercore, dated October 8, 2026, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex B and is incorporated herein by reference to this proxy statement/prospectus in its entirety. You are urged to read Evercore’s opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the DTI Board (solely in its capacity as such) in connection with its evaluation of the proposed Acquisition. The opinion does not constitute a recommendation to the DTI Board or to any other persons in respect of the Acquisition, including as to how any holder of shares of DTI Common Stock should vote or act in respect of the Acquisition. Evercore’s opinion does not address the relative merits of the Acquisition as compared to other business or financial strategies that might be available to DTI, nor does it address the underlying business decision of DTI to engage in the Acquisition.
For more information, see the section entitled “— Opinion of DTI’s Financial Advisor” beginning on page 54 and the full text of the written opinion of Evercore attached as Annex B to this proxy statement/prospectus.
Ownership of DTI After the Acquisition (See Page 42)
Based on [•] shares of DTI Common Stock outstanding as of the Record Date, and assuming the issuance of 17,355,139 shares of DTI Common Stock to the Sellers at Closing in exchange for the Consideration Loan Notes pursuant to the Rollover Documents:
• Existing DTI stockholders would hold approximately [•]% of the outstanding DTI Common Stock; and
• The Sellers would hold approximately [•]% of the outstanding DTI Common Stock.
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The foregoing pro forma ownership percentages do not give effect to any options, warrants, or convertible securities that may be outstanding or any shares that may be issued under DTI’s equity incentive plans following the Closing.
Directors and Executive Officers of DTI Upon the Consummation of the Acquisition (See Page 89)
Following the Closing, the DTI Board is not expected to change; however, pursuant to the Lock-up and Investor Rights Agreement, for so long as the Sellers collectively beneficially own at least 15% of DTI Common Stock outstanding as of the Closing, the Seller Representative will have the right to designate one individual for nomination to the DTI Board, which right must be exercised by the 12-month anniversary of the Closing, failing which it converts into a right to designate one non-voting observer. The observer is subject to customary limitations, including exclusion from executive sessions and matters involving conflicts of interest, privilege or competitively sensitive information. The existing management team of DTI is expected to continue in their current roles following the Acquisition.
Interests of Certain Persons in the Acquisition (See Page 65)
In considering the recommendation of the DTI Board that DTI stockholders vote in favor of the Share Issuance Proposal, DTI stockholders should be aware that, other than as described below, DTI’s directors and executive officers do not have any financial interests in the Acquisition that are different from, or in addition to, the interests of DTI stockholders generally. None of DTI’s directors or executive officers is a party to the SPA or the Rollover Documents or will receive any portion of the Consideration, and no DTI director or executive officer will receive any change-in-control, severance, transaction or retention payment, any new or accelerated equity award, or any new employment or compensation arrangement in connection with the Acquisition. Each current director was elected at one or more of the Prior Elections, which the Ratification Proposal (a condition to the Acquisition) would ratify. DTI’s directors and executive officers are expected to continue in their current roles following the Closing and will continue to benefit from DTI’s existing indemnification and directors’ and officers’ liability insurance arrangements, on the same basis as before the Acquisition. For a description of the interests of DTI’s directors in the Ratification Proposal, see the section entitled “Ratification Proposal — Interests of Directors and Executive Officers” beginning on page 41.
Conditions to the Completion of the Acquisition (See Page 57)
The obligations of the parties to complete the Acquisition are subject to the satisfaction or waiver of certain conditions, including among others:
Mutual Conditions:
• receipt of the Parent Stockholder Approval (approval of the Share Issuance Proposal and Ratification Proposal by DTI stockholders, or, in lieu of the Ratification Proposal, a final, non-appealable order of the Delaware Court of Chancery under Section 205 of the DGCL);
• the absence of any order of a governmental authority prohibiting, restraining or making illegal the consummation of the Acquisition; the Form S-4 Registration Statement having become effective with no stop order in effect; and the Equity Consideration shares having been approved for listing on Nasdaq, subject to official notice of issuance.
Additional Conditions to Buyer’s Obligations:
• the representations and warranties of the Sellers and the Group being true and correct (subject to specified materiality qualifiers);
• the Sellers having performed and complied in all material respects with their covenants and agreements;
• the absence of a Material Adverse Effect with respect to the Group;
• the Buyer having obtained debt financing on terms consistent with the Agreed Financing Terms attached to the SPA in an aggregate amount sufficient to pay the Adjusted Cash Consideration and all fees and expenses required to be paid by Buyer at or prior to the Closing; and
• delivery by the Sellers of the Closing deliverables, including share transfer and resignations.
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Additional Conditions to the Seller’s Obligations:
• the representations and warranties of Buyer are true and correct (subject to certain materiality qualifiers);
• Buyer having performed and complied in all material respects with its covenants and agreements;
• Buyer and Parent having performed their covenants in all material respects, including delivery of the Closing deliverables (the Cash Consideration, the Consideration Loan Notes, the executed Rollover Documents and the Equity Consideration);
• the Lock-up and Investor Rights Agreement being in full force and effect as of the Closing; and
• the Sellers having received clearance (or confirmation that clearance is not required) from His Majesty’s Revenue and Customs under section 138 of the Taxation of Chargeable Gains Act 1992 and/or section 701 of the Income Tax Act 2007 in respect of the exchange of shares for loan notes.
Termination of the SPA (See Page 57)
The SPA may be terminated at any time prior to the Closing under the following circumstances:
• by mutual written consent of Buyer and the Seller Representative;
• by Buyer or the Seller Representative if the Closing has not occurred by March 31, 2027, the Outside Date (subject to exceptions, including that Buyer may not terminate where the delay is primarily attributable to pending Section 205 proceedings);
• by Buyer or the Seller Representative if a final, non-appealable order permanently prohibits or restrains the Acquisition;
• by Buyer upon determining, acting reasonably, that a Material Adverse Effect has occurred, subject to a 20 Business Day cure period and, if disputed by the Seller Representative, resolution through negotiation and expert determination; by Buyer or the Seller Representative if Buyer has used all reasonable efforts to obtain the Financing and the Financing has not been obtained by the Outside Date; by either party if a closing condition has become incapable of being satisfied prior to the Outside Date; and
• following specified terminations, if the Group or any Seller enters into an Alternate Transaction within 12 months, the Sellers (other than the Trustee Seller) must reimburse Buyer’s reasonable documented third-party expenses, capped at £1,500,000, subject to the SPA’s exceptions.
For further discussion, please read the section entitled “The Share Purchase Agreement — Termination of the Share Purchase Agreement” beginning on page 64 of this prospectus.
Expense Reimbursement (See Page 57)
The SPA does not provide for a termination fee payable by either party. If (i) Buyer terminates the SPA as a result of a material breach by the Group or the Sellers that has been agreed by the parties or finally determined by a court, or (ii) the Seller Representative terminates the SPA other than for specified reasons (including a material breach by Buyer, mutual consent, failure to satisfy the Parent Stockholder Approval condition or financing conditions, or another failure of a closing condition primarily within Buyer’s or DTI’s control), and in either case the Group or any Seller enters into an Alternate Transaction within 12 months, the Sellers (other than the Trustee Seller) must reimburse Buyer’s reasonable and documented third-party expenses, up to £1,500,000. The SPA does not require DTI or Buyer to reimburse the Sellers’ expenses upon termination.
Lock-up and Investor Rights Agreement (See Page 57)
On October 8, 2026 DTI and Sellers entered into that certain Lock-up and Investor Rights Agreement (the “Lock-up and Investor Rights Agreement”), which will provide for, among other things:
• Lock-Up: The Sellers will be subject to restrictions on the transfer of the Equity Consideration for a period of 24 months following the Closing Date, with one-third (1/3) of the Equity Consideration shares being released from such restrictions on each of the 12-month, 18-month and 24-month anniversaries
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of the Closing Date, subject to certain customary permitted transfers. During the lock-up period, the Sellers may not engage in hedging, short sale or derivative transactions relating to the shares. Following the release of any tranche, open-market sales will be subject to volume limitations of no more than 10% of the average daily trading volume of Common Stock on Nasdaq over the trailing 20 trading-day period preceding such sale, which limitations do not apply to underwritten offerings, shelf takedowns, block trades, privately negotiated sales or transfers to permitted transferees. If DTI grants more favorable resale or registration terms to another 10% or greater stockholder while the Sellers hold at least 10%, the Sellers will automatically receive the benefit of those terms. Shares may be released early with DTI Board approval, and the lock-up will terminate automatically with respect to all Equity Consideration shares if the closing price of Common Stock exceeds 200% of the Reference Price (as defined in the Lock-up and Investor Rights Agreement) for more than 15 consecutive trading days. In addition, DTI will have the right to require the Sellers to participate in a DTI-led secondary offering to reduce the Sellers’ aggregate ownership to 19.9% of DTI’s issued and outstanding Common Stock, provided that the Sellers then own at least 20% and the offering price is at or above 105% of the Reference Price (as defined in the Lock-up and Investor Rights Agreement).
• Board Designation/Observation Right: For so long as the Sellers collectively beneficially own at least 15% of DTI’s issued and outstanding Common Stock as of the Closing, the Seller Representative will have the right to designate one individual for nomination to the DTI Board, provided that the right must be exercised by the 12-month anniversary of the Closing, failing which it lapses and converts into a non-voting observer right. If the Sellers’ collective ownership falls below 15% but remains at or above 10%, the designation right will convert to a non-voting observer right (and any Seller Designee will become the observer) entitling the observer to receive notice of and attend meetings of the DTI Board and to receive materials distributed to directors, subject to customary exclusions, including for conflicts of interest, privilege, executive sessions, competitively sensitive information and Regulation FD compliance. All board designation and observer rights will terminate upon the Sellers’ collective ownership falling below 10% of DTI’s issued and outstanding Common Stock as of the Closing.
• Standstill: For so long as the Sellers collectively own at least 15% of DTI’s issued and outstanding Common Stock, the Sellers will agree not to, without the prior approval of the DTI Board and among other things, (i) acquire securities that would result in aggregate beneficial ownership exceeding 35.0% of DTI’s issued and outstanding Common Stock, (ii) solicit proxies, call stockholder meetings, initiate stockholder proposals or seek board representation (other than through the Seller Designee), (iii) publicly propose any merger, acquisition, tender offer or other extraordinary transaction involving DTI, (iv) seek to control or influence DTI’s management, DTI’s Board or policies, or (v) form or participate in a group (within the meaning of Section 13(d)(3) of the Securities Exchange Act) with third parties, in each case subject to customary exceptions, including the right to privately communicate with the DTI Board and to make required securities filings. The standstill falls away upon certain change of control events involving DTI.
• Registration, Information and Participation Rights: As soon as reasonably practicable within thirty (30) days following the Closing, DTI will be required to use commercially reasonable efforts to file and maintain a shelf registration statement covering the Equity Consideration shares, and the Sellers will have demand (where no shelf is available) and piggyback registration rights, in each case subject to the lock-up release schedule. Until the 12-month anniversary of the Closing, the Seller Representative will receive copies of materials provided to the DTI Board, subject to confidentiality and insider trading restrictions. For so long as the Sellers own at least 10% of DTI Common Stock, they will have the right to participate in future DTI equity issuances (other than customary excluded issuances) to maintain their percentage ownership.
Financing (See Page 58)
Buyer expects to fund the Cash Consideration, together with related fees and expenses, through new debt and/or equity financing and borrowings under DTI’s existing credit facility. Based on the exchange rate of $1.343 per £1.00 specified in the SPA, the Cash Consideration is approximately $81 million, before giving effect to the adjustments described under “— The Consideration.” Buyer may assign its rights under the SPA to its financing sources as collateral.
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The SPA contains a financing condition as a condition precedent to Buyer’s obligation to close. This means that if Buyer is unable to obtain the Financing on terms consistent with the Agreed Financing Terms in an amount sufficient to pay the Adjusted Cash Consideration and related fees and expenses, Buyer is not obligated to consummate the Acquisition, and either Buyer or the Seller Representative may terminate the SPA if Buyer has used all reasonable efforts and the Financing has not been obtained by the Outside Date. For more information, see the section entitled “Risk Factors — The Acquisition is subject to a financing condition, and Buyer’s failure to obtain financing could prevent the Closing” beginning on page 13.
Until the Closing, Buyer must keep the Seller Representative reasonably informed of the status of the Financing, including through written updates at least every five Business Days regarding key milestones and any developments that could prevent or delay the Financing. If the Financing has not been obtained by November 30, 2026, the Seller Representative may require Buyer to enter into good faith discussions regarding the Financing for a period of not less than 10 Business Days, following which the Seller Representative may terminate the SPA if the Seller Representative and Buyer determine, acting reasonably and in good faith, that there is no reasonable prospect of the Financing being obtained by the Outside Date.
W&I Insurance (See Page 57)
In connection with the SPA, Buyer obtained a warranty and indemnity insurance policy (the “W&I Policy”) underwritten by certain Lloyd’s insurers, with DUAL Corporate Risks Limited acting as managing agent, which was issued on October 8, 2026, the date of the SPA. Buyer is the sole insured under the W&I Policy. The W&I Policy covers losses arising from breaches of the Fundamental Warranties, the Commercial Warranties (including the tax warranties) and the tax indemnity given by the Sellers in the SPA, subject to the terms, conditions, exclusions and limitations of the W&I Policy. Because Buyer’s recourse against the Sellers for warranty claims and most tax indemnity claims is limited to the W&I Policy, the W&I Policy is expected to be Buyer’s primary source of recovery for those claims.
The W&I Policy has an aggregate limit of liability of £15,000,000. Coverage for breaches of the Fundamental Warranties, the tax warranties and the tax indemnity runs for 84 months following the Closing, and coverage for breaches of the other Commercial Warranties runs for 36 months following the Closing. No retention or de minimis threshold applies to claims for breach of the Fundamental Warranties. For all other covered claims, the W&I Policy has an aggregate retention of £262,750 and a per-claim de minimis threshold of £20,000, except that higher retentions and de minimis thresholds apply to losses relating to two of the Group’s subsidiaries: Saltire Energy PTE Limited (retention of £1,000,000 and de minimis of £50,000) and Saltire Energy LLC (retention of £3,000,000 and de minimis of £100,000). Buyer bears the retention.
The total cost of the W&I Policy is £322,528, consisting of a premium of £265,650, insurance premium tax of £31,878 and an underwriting fee of £25,000. Under the SPA, the premium is borne equally by Buyer and the Sellers.
The W&I Policy contains customary exclusions, including for matters known to Buyer’s deal team before the policy was issued; breaches arising between signing and the Closing that the deal team first learns of during that period; and breaches (other than of the Fundamental Warranties) fairly disclosed in the SPA, the Disclosure Letter, the due diligence materials or public searches. The W&I Policy also excludes, among other things, leakage, transfer pricing, the condition of assets, environmental liabilities, anti-bribery, anti-corruption and sanctions matters, defective services, product liability, and a number of transaction-specific matters identified in due diligence. These include certain tax matters, liabilities relating to Saltire Energy (KSA) LLC, certain matters relating to the Group’s Malaysian and UAE subsidiaries, health and safety, environmental, employment and premises matters, and the subject matter of certain specific tax indemnities in the SPA. In addition, the W&I Policy deems certain of the warranties in the SPA to be qualified by knowledge or otherwise narrowed for coverage purposes. As a result, the W&I Policy may not cover all losses that Buyer may suffer from breaches of the warranties or the tax indemnity. See “Risk Factors — The W&I Policy may not cover all losses from breaches of representations and warranties, and the Sellers’ direct liability is limited” beginning on page 19.
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Appraisal or Dissenters’ Rights (See Page 38)
No appraisal or dissenters’ rights are available to DTI stockholders in connection with the Acquisition. The Acquisition is structured as a share purchase of the Group by Buyer, not as a merger or consolidation of DTI or involving DTI’s shares. Under the DGCL, appraisal rights under Section 262 are available only in connection with certain mergers or consolidations. Because the Acquisition does not involve a merger or consolidation of DTI, Section 262 does not apply, and DTI stockholders do not have appraisal rights in connection with the Acquisition.
DTI stockholders who vote against the Share Issuance Proposal will retain their existing shares of DTI Common Stock (which will be diluted upon the issuance of the Equity Consideration at Closing), but will not have any right to receive a cash payment for the “fair value” of their shares.
Material U.S. Federal Income Tax Consequences (See Page 58)
The issuance of shares of DTI Common Stock to the Sellers as Equity Consideration pursuant to the SPA is not expected to result in any material U.S. federal income tax consequences to existing DTI stockholders.
For additional information, please see the section entitled “U.S. Federal Income Tax Consequences of the SPA” beginning on page 66 of this prospectus. The tax consequences of the Acquisition to you will depend on your particular facts and circumstances. Please consult your own tax advisor as to the tax consequences of the Acquisition under your particular circumstances, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws.
Accounting Treatment of the Acquisition (See Page 53)
DTI expects to account for the Acquisition as a business combination using the acquisition method of accounting in accordance with Accounting Standards Codification Topic 805, “Business Combinations” (“ASC 805”). Under the acquisition method, the purchase price will be allocated to the assets acquired and liabilities assumed of the Group based on their estimated fair values as of the Closing Date, with the excess purchase price, if any, allocated to goodwill.
Nasdaq Listing (See Page 42)
DTI Common Stock trades on the Nasdaq Stock Market under the symbol “DTI.” An application will be made for Listing of Additional Shares covering the 17,355,139 shares to be issued as Equity Consideration. Listing of the Equity Consideration shares is expected to be approved prior to the Closing, subject to official notice of issuance. DTI Common Stock will continue to trade on Nasdaq following the Closing.
Comparison of Stockholders’ Rights
DTI is a Delaware corporation. Accordingly, the rights of holders of DTI Common Stock are governed by the DGCL, DTI’s Second Amended and Restated Certificate of Incorporation, and DTI’s Amended and Restated Bylaws. The Acquisition will not change these governing documents or the rights of existing DTI stockholders. Because the Group is private Scottish companies whose shares are not publicly traded, and the Sellers will become holders of DTI Common Stock following the Closing, the Acquisition does not involve the conversion of one class of publicly traded securities into another. Accordingly, no comparison of rights under Delaware law and Scottish law is necessary for purposes of this proxy statement/prospectus.
Risk Factors (See Page 13)
The Acquisition described in this prospectus involves various risks, and you should carefully read and consider the matters discussed under the section entitled “Risk Factors” beginning on page 13 of this prospectus, a summary of which is set forth below, and the documents incorporated herein by reference.
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The following is a summary of the material risks described in the section entitled “Risk Factors” beginning on page 13 of this prospectus and the risk factors incorporated by reference herein; this summary is qualified in its entirety by those more detailed discussions.
Risks Relating to the Acquisition
• The Acquisition may not be completed on the terms or timeline currently contemplated, or at all, because completion is subject to DTI stockholder approval of both the Share Issuance Proposal and Ratification Proposal, financing and other closing conditions.
• The Acquisition is subject to a financing condition. If Buyer cannot obtain financing sufficient to pay the Cash Consideration, Buyer will not be obligated to consummate the Acquisition.
• If the Acquisition is completed, DTI will issue 17,355,139 shares of DTI Common Stock to the Sellers, increasing the number of outstanding shares by approximately [•]% and significantly diluting existing DTI stockholders’ ownership, voting power and other per-share interests.
• The Equity Consideration consists of a fixed number of shares, so its value will fluctuate with the market price of DTI Common Stock. The SPA contains no price-based adjustment, collar or walk-away right.
• The Purchase Price was determined by reference to the Group’s financial position as of the Locked Box Date, and the SPA provides no post-closing completion accounts or true-up adjustment, other than for Leakage.
• The SPA does not provide the DTI Board with a “fiduciary out.” The DTI Board may not withdraw, qualify or modify its recommendation in response to a superior proposal.
• The SPA provides limited expense reimbursement protections and does not provide for a termination fee or a reverse termination fee. Sellers’ expense reimbursement is capped at £1,500,000.
• The SPA is governed by English law and disputes are subject to the courts of England and Wales, which may provide rights and remedies different from those available under Delaware or Texas law and may increase the cost and complexity of resolving disputes.
• Other than the listing of the Equity Consideration on Nasdaq and the effectiveness of the Registration Statement, no regulatory approvals are expected to be required; however, governmental authorities could seek to restrain the Acquisition
• While the Acquisition is pending, DTI may be unable to pursue other strategic transactions, business development opportunities or operational improvements because management attention and resources are devoted to the Acquisition.
Risks Relating to DTI’s Business Following the Acquisition
• DTI may fail to realize the anticipated benefits and synergies of the Acquisition, including expected revenue synergies, operational efficiencies and enhanced scale, because of integration difficulties, customer or employee losses, unexpected costs or adverse market conditions.
• Integration of the Group’s operations with DTI’s may be more difficult, costly or time-consuming than expected.
• DTI will incur significant indebtedness to fund the Cash Consideration which could reduce financial flexibility, increase vulnerability to adverse conditions, limit additional borrowing and strategic opportunities, require substantial cash flow for debt service and impose restrictive covenants.
• DTI may not be able to retain key employees of the Group following the Acquisition. Loss of key personnel could disrupt operations and customer relationships, cause loss of institutional knowledge and increase compensation costs.
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• The Acquisition could disrupt DTI’s and the Group’s relationships with customers, suppliers and other business partners, including through contract terminations or renegotiations, delayed purchasing decisions, loss of business to competitors or less favorable terms.
• Following the Acquisition, DTI will have increased foreign currency exposure, including a GBP/USD mismatch between the Group’s revenues and costs, DTI’s U.S.-dollar reporting and the U.S.-dollar financing and Cash Consideration.
• The W&I Policy may not provide adequate coverage for losses from breaches of representations and warranties because of coverage limits, retention amounts, exclusions, time limits, insurer disputes or insolvency.
• The Group may have unknown or contingent liabilities that were not identified or adequately assessed in due diligence, including environmental, tax, employment, intellectual property, litigation, contractual or regulatory liabilities.
• DTI’s management will devote significant time and attention to integrating the Group, which may distract from DTI’s ongoing operations, existing strategic initiatives, customer and employee relationships and response to competitive pressures.
Risks Relating to the Group’s Business
• The Group depends on activity levels in the oil and gas industry, which is cyclical and volatile and is affected by oil and natural gas prices, drilling activity, capital availability, government policies and general economic conditions.
• The Group may face concentration risks, including dependence on key customers and certain geographic markets, and operates in a highly competitive industry.
• The Group is exposed to foreign currency movements and extensive environmental, health and safety and other regulatory and compliance requirements in the United Kingdom and other jurisdictions.
Additional Risk Factors Relating to DTI’s Existing Business
• DTI’s existing business risks are incorporated by reference from DTI’s Form 10-K and Form 10-Q filings, including risks relating to the cyclical nature of the oil and gas industry, DTI’s operations and financial condition, competition, regulatory compliance, cybersecurity, supply chain, general market conditions and the market for DTI Common Stock.
Risks Relating to the Sellers
• Following the Closing, the Sellers will become significant stockholders of DTI and are expected to have board designation and observer rights under the Lock-up and Investor Rights Agreement. Their ability to influence corporate matters and their interests may not align with those of other DTI stockholders.
For a more complete discussion of these and other risks, you should carefully read the full section entitled “Risk Factors” beginning on page 13 of this prospectus, together with the risk factors incorporated by reference from DTI’s SEC filings.
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MARKET PRICE AND DIVIDEND INFORMATION
Per Share Market Price and Dividend Information
Market Prices
DTI Common Stock currently trades on the Nasdaq Stock Market under the symbol “DTI”. As of October 8, 2026, the latest practicable trading day before the date of this prospectus, there were 35,282,224 shares of DTI Common Stock outstanding.
The following table presents trading information for DTI Common Stock on October 7, 2026, the last trading day before the public announcement of the SPA and October 8, 2026, the latest practicable trading day before the date of this prospectus.
|
DTI Common Stock |
|||||||||
|
Date |
High |
Low |
Close |
||||||
|
October 7, 2026 |
$ |
2.40 |
$ |
2.28 |
$ |
2.36 |
|||
|
October 8, 2026 |
$ |
2.36 |
$ |
1.97 |
$ |
2.01 |
|||
The Group is privately held and there is no public trading market for the shares of Saltire or Foxley. As of the Record Date, there were approximately [_] holders of record of DTI Common Stock.
Dividend Information
DTI has not paid any cash dividends on the DTI Common Stock to date and does not intend to pay cash dividends prior to the completion of the Acquisition. The payment of any cash dividends after the consummation of the Acquisition will be dependent upon the revenue, earnings, and financial condition of DTI from time to time. The payment of any dividends subsequent to the Acquisition will be within the discretion of the DTI Board.
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RISK FACTORS
You should carefully consider the following risk factors, together with all of the other information included or incorporated by reference in this proxy statement/prospectus, including the matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements,” before deciding how to vote on the proposals presented at the Special Meeting. In addition, you should carefully consider the risks described in Part I, Item 1A, “Risk Factors,” of DTI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as updated by Part II, Item 1A, “Risk Factors,” of DTI’s subsequent Quarterly Reports on Form 10-Q, all of which are incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information.”
The risks described below and in DTI’s periodic reports are not the only risks facing DTI and the combined company following the Acquisition. Additional risks and uncertainties not presently known to DTI or that DTI currently deems immaterial may also impair DTI’s business operations. If any of the following risks actually occur, DTI’s business, financial condition, results of operations, or prospects could be materially and adversely affected. In such case, the trading price of DTI Common Stock could decline and you could lose all or part of your investment.
Risks Relating to the Acquisition
The Acquisition may not be completed on the terms or timeline currently contemplated, or at all.
The completion of the Acquisition is subject to a number of conditions, including, among others, the approval of the Share Issuance Proposal and the Ratification Proposal by DTI stockholders, the absence of any law or order prohibiting the Acquisition, and the satisfaction of various other closing conditions. There can be no assurance that all of the conditions to the Closing will be satisfied or waived in a timely manner, or at all. If any of these conditions are not satisfied or waived, the Acquisition will not be completed.
The Outside Date for the Acquisition is March 31, 2027. If the Closing has not occurred by the Outside Date, either Buyer or the Seller Representative may terminate the SPA, except under certain circumstances. Failure to complete the Acquisition by the Outside Date or at all could result in DTI incurring significant transaction costs without realizing the anticipated benefits of the Acquisition.
The Acquisition is subject to a financing condition, and Buyer’s failure to obtain financing could prevent the Closing.
The SPA includes a condition to Buyer’s obligation to close requiring that Buyer obtain financing in an amount sufficient to pay the Adjusted Cash Consideration.
Buyer expects to fund the Adjusted Cash Consideration and related fees and expenses through new debt financing and borrowings under DTI’s existing credit facility. As of the date of this proxy statement/prospectus, Buyer has not entered into definitive agreements for the new debt financing, and there can be no assurance that the Financing will be obtained on terms consistent with the Agreed Financing Terms, in a sufficient amount, or at all. If the Financing has not been obtained by November 30, 2026 and, following a prescribed period of good faith discussions, the Seller Representative and Buyer determine that there is no reasonable prospect of the Financing being obtained by the Outside Date, the Seller Representative may terminate the SPA. In addition, either Buyer or the Seller Representative may terminate the SPA if Buyer has not obtained the Financing by the Outside Date despite using all reasonable efforts. If Buyer is unable to obtain the Financing, Buyer will not be obligated to consummate the Acquisition, and DTI would not realize the anticipated benefits of the Acquisition while having incurred significant transaction costs.
Furthermore, disruptions in the credit markets, increases in interest rates, changes in DTI’s or the Group’s financial condition or business prospects, or other factors beyond DTI’s control could adversely affect Buyer’s ability to obtain financing on acceptable terms, which could delay or prevent the Closing.
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Failure to complete the Acquisition could negatively affect DTI’s business, financial condition, results of operations, and stock price.
If the Acquisition is not completed for any reason, DTI will be subject to a number of risks, including:
• DTI will have incurred significant transaction costs (including legal, financial advisory, accounting, and filing fees) that are generally non-recoverable regardless of whether the Acquisition is completed;
• DTI’s management will have devoted substantial time and resources to matters relating to the Acquisition that could otherwise have been devoted to pursuing other beneficial opportunities;
• the market price of DTI Common Stock may decline to the extent that the current market price reflects a market assumption that the Acquisition will be completed; and
• DTI’s relationships with its customers, suppliers, and employees may be adversely affected by uncertainty regarding the Acquisition.
DTI stockholders will experience significant dilution as a result of the issuance of Equity Consideration.
If the Acquisition is completed, DTI will issue 17,355,139 shares of DTI Common Stock to the Sellers as Equity Consideration. Based on [•] shares of DTI Common Stock outstanding as of the Record Date, the issuance of the Equity Consideration shares will represent an increase of approximately [•]% in the number of outstanding shares of DTI Common Stock. As a result, each existing DTI stockholders’ percentage ownership interest in DTI will be correspondingly reduced. This dilution could adversely affect, among other things, the voting power, earnings per share, and book value per share of existing DTI stockholders.
The Equity Consideration consists of a fixed number of shares (17,355,139) and is not subject to adjustment based on changes in the market price of DTI Common Stock. Accordingly, the dilutive effect on existing DTI stockholders is fixed regardless of whether the market price of DTI Common Stock increases or decreases between the date of this proxy statement/prospectus and the Closing.
The fixed number of shares to be issued as Equity Consideration means the value received by the Sellers is subject to market price fluctuations, while DTI bears dilution at any price.
The number of shares of DTI Common Stock to be issued as Equity Consideration is fixed at 17,355,139 shares. The actual value of the Equity Consideration will depend on the market price of DTI Common Stock at Closing. There is no price-based termination right, collar mechanism, or adjustment to the number of shares to be issued based on changes in the market price of DTI Common Stock. The SPA does not provide either party with the right to terminate or renegotiate the Equity Consideration if the market price of DTI Common Stock increases or decreases materially before the Closing.
Because the number of shares is fixed, the Sellers may receive shares with an aggregate market value that is more or less than the agreed deemed value of the Equity Consideration, depending on the market price of DTI Common Stock at the time of Closing. If the market price of DTI Common Stock is significantly lower than the Reference Price at the time of Closing, the Sellers will receive shares with an aggregate market value substantially less than the agreed deemed value of the Equity Consideration. Conversely, if the market price of DTI Common Stock is significantly higher than the Reference Price at the time of Closing, the Sellers will receive shares with an aggregate market value substantially greater than the agreed deemed value. In either scenario, DTI stockholders bear the same dilution (17,355,139 shares) regardless of the market price at Closing.
The Purchase Price was determined based on the financial position of the Group as of the Locked Box Date, and there will be no post-closing purchase price adjustment.
The Purchase Price was determined by reference to the financial position of the Group as of June 30, 2026 (the “Locked Box Date”). The SPA uses a locked-box mechanism, meaning there are no post-closing completion accounts or purchase price adjustments (other than for Leakage). This means that if the financial condition of the Group
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deteriorates between the Locked Box Date and the Closing Date (for example, through loss of a significant customer, adverse regulatory action, or general economic downturn), DTI and its stockholders will not receive a corresponding reduction in the Purchase Price. DTI’s protections against such deterioration are limited to: (a) the Material Adverse Effect condition (which sets a high threshold for non-closure); (b) the anti-leakage covenants (which prevent cash extraction but do not address operational deterioration); and (c) the Sellers’ representations and warranties (which are subject to the limitations of the W&I Policy). Although the locked-box pricing mechanism is customary in UK M&A practice, it differs from the post-closing completion accounts mechanism commonly used in US transactions, and US investors may be less familiar with the locked-box approach.
The SPA does not provide DTI’s Board with a “fiduciary out” to terminate the SPA or change its recommendation in response to a superior proposal.
Under the SPA, the DTI Board has covenanted not to withdraw, qualify, or modify its recommendation that DTI stockholders vote in favor of the Share Issuance Proposal. The SPA does not include a “fiduciary out” provision that would permit the DTI Board to change its recommendation or terminate the agreement in order to accept a superior proposal from a third party. As a result, even if a third party were to make a proposal to acquire DTI or enter into an alternative transaction that the DTI Board determined to be more favorable to DTI stockholders, the DTI Board would not be permitted to withdraw or change its recommendation in favor of the Share Issuance Proposal or terminate the SPA to pursue such alternative transaction. While “fiduciary out” provisions are standard in US public M&A transactions, they are not customary in UK-style share purchase agreements. The SPA, which is governed by English law, reflects customary UK transaction practice in this regard.
The termination fee and expense reimbursement protections under the SPA are limited.
The SPA does not provide for a termination fee payable by either party, and DTI and Buyer are not required to reimburse the Sellers’ expenses upon termination. The Sellers (other than the Trustee Seller) are required to reimburse Buyer’s reasonable and documented third-party expenses, up to £1,500,000, only in limited circumstances where the SPA is terminated and the Group or a Seller enters into an Alternate Transaction within 12 months. This limited protection means that if the Acquisition is not completed due to, for example, DTI stockholders’ failure to approve the Share Issuance Proposal or Buyer’s failure to obtain financing, DTI is unlikely to recover its transaction costs. In addition, because the SPA does not provide for a termination fee payable by the Sellers, if the Sellers breach the SPA, DTI’s remedies are limited to seeking specific performance or damages under English law, with associated uncertainty and cost.
The SPA is governed by English law, which may limit DTI’s rights and remedies in ways that differ from what would be available under Delaware or Texas law.
The SPA is governed by the laws of England and Wales, and disputes arising under the SPA are subject to the exclusive jurisdiction of the courts of England and Wales. English law differs from Delaware law (which governs DTI’s corporate affairs) and Texas law (where DTI is headquartered) in a number of material respects, including with respect to the interpretation of contractual provisions, the availability and scope of specific performance, the enforceability of indemnification provisions, the treatment of penalty clauses, and the allocation of litigation costs (England generally follows a “loser pays” cost-shifting regime). If a dispute were to arise under the SPA, DTI would be required to litigate in English courts applying English law, which could be more costly and time-consuming than domestic litigation and could produce results different from what would be available under US law.
Pending completion of the Acquisition, DTI may be unable to pursue other strategic opportunities.
While the Acquisition is pending, DTI’s management is devoting substantial time and resources to completing the Acquisition and planning for integration. This diversion of management attention could prevent DTI from pursuing other strategic transactions, business development opportunities, or operational improvements that might otherwise be beneficial. Additionally, the pendency of the Acquisition and uncertainty about DTI’s future strategy may cause potential counterparties to delay or decline to enter into transactions with DTI.
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Risks Relating to DTI’s Business Following the Acquisition
DTI may fail to realize the anticipated benefits and synergies of the Acquisition.
The success of the Acquisition will depend, in significant part, on DTI’s ability to realize the anticipated benefits from combining the operations of DTI and the Group. DTI may fail to realize these anticipated benefits for a variety of reasons, including:
• difficulties integrating the operations, technologies, products, and personnel of DTI and the Group;
• the inability to achieve anticipated revenue synergies from cross-selling opportunities and expanded geographic reach;
• the loss of key customers or suppliers as a result of the Acquisition;
• the loss of key employees during or following the integration period;
• the diversion of management’s attention from ongoing business operations;
• differences in business cultures, management philosophies, and operational practices;
• unexpected costs, charges, or expenses resulting from the Acquisition;
• the inability to coordinate research, development, and product strategies effectively; and
• adverse changes in market conditions, customer demand, or the competitive landscape following the Acquisition.
If DTI is unable to successfully integrate the Group’s operations and realize the anticipated benefits, the Acquisition could have a material adverse effect on DTI’s business, financial condition, and results of operations, and the market price of DTI Common Stock could decline.
The integration of the Group’s operations with DTI’s may be more difficult, costly, or time-consuming than expected.
The integration of the Group’s business with DTI’s will be a complex, time-consuming, and costly process. The Group’s operations are headquartered in Aberdeen, Scotland, and span multiple countries. Integrating a cross-border business involves additional challenges beyond those encountered in domestic acquisitions, including:
• differences in legal and regulatory regimes (UK and EU law vs. US law);
• different accounting standards and financial reporting frameworks (UK GAAP vs. US GAAP);
• cultural and language differences that may affect employee retention and workplace integration;
• the need to integrate information technology systems, enterprise resource planning systems, and operational platforms across different technology environments;
• coordination of supply chains, logistics, and inventory management across geographically dispersed operations;
• harmonization of human resources policies, compensation structures, and employee benefit plans across different jurisdictions; and
• time zone differences that may complicate management oversight and decision-making.
DTI has limited prior experience integrating international acquisitions of this scale. If the integration process takes longer than expected, requires greater resources, or encounters unforeseen difficulties, DTI’s financial performance and the anticipated benefits of the Acquisition could be adversely affected.
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DTI will incur significant indebtedness in connection with the Acquisition, which could adversely affect its financial flexibility and results of operations.
DTI expects to incur indebtedness to fund the Cash Consideration payable to the Sellers in connection with the Acquisition. The Cash Consideration is approximately $81 million (based on the exchange rate of $1.343 per £1.00 specified in the SPA), before giving effect to adjustments under the SPA and related fees and expenses, and is expected to be funded through new debt financing and borrowings under DTI’s existing credit facility. The increased indebtedness could have important consequences for DTI stockholders, including:
• increasing DTI’s vulnerability to general adverse economic and industry conditions;
• limiting DTI’s flexibility in planning for, or reacting to, changes in its business and the industry in which it operates;
• placing DTI at a competitive disadvantage relative to competitors with less indebtedness;
• limiting DTI’s ability to borrow additional funds or refinance existing indebtedness on favorable terms;
• requiring a substantial portion of DTI’s cash flows from operations to be dedicated to debt service payments, reducing the availability of cash for working capital, capital expenditures, dividends, acquisitions, and other general corporate purposes; and
• imposing restrictive covenants that may limit DTI’s operational flexibility, including restrictions on incurring additional debt, making acquisitions, paying dividends, or disposing of assets.
The Acquisition will result in significant goodwill and intangible assets that could become impaired.
DTI expects to account for the Acquisition as a business combination under ASC 805. The purchase price will be allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values, with the excess allocated to goodwill. DTI expects to record significant amounts of goodwill and identifiable intangible assets (such as customer relationships, trade names, and technology) as a result of the Acquisition.
Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment at least annually, or more frequently if events or circumstances indicate that the carrying value may exceed the fair value. Finite-lived intangible assets are amortized over their estimated useful lives. If the combined company’s operating performance deteriorates or market conditions decline, DTI may be required to recognize impairment charges with respect to goodwill or intangible assets, which could materially adversely affect DTI’s reported results of operations and financial condition. Impairment charges are non-cash but could affect DTI’s compliance with debt covenants and its ability to access capital markets.
DTI may not be able to retain key employees of the Group following the Acquisition.
The success of the Acquisition and the integration of the Group’s business will depend in part on DTI’s ability to retain the Group’s key employees, including management, technical personnel, and customer-relationship personnel. Key employees of the Group may be uncertain about their future roles in the combined company, may receive competing offers of employment, or may otherwise choose to leave following the Acquisition. Employment agreements with certain key personnel are expected to be entered into at Closing, but not all employees critical to the Group’s operations are subject to such arrangements.
The loss of key personnel of the Group could disrupt the Group’s operations, damage customer relationships, result in the loss of critical institutional knowledge, and impair DTI’s ability to realize the anticipated benefits of the Acquisition. Additionally, DTI may need to increase compensation and benefits to retain the Group’s employees, which could increase operating costs.
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The Acquisition could disrupt DTI’s and the Group’s relationships with customers, suppliers, and other business partners.
The announcement and pendency of the Acquisition, and the subsequent integration process, could disrupt DTI’s and the Group’s existing business relationships. Third parties with whom DTI or the Group have business relationships (customers, suppliers, distributors, joint venture partners, or other counterparties) may:
• terminate or renegotiate existing agreements pursuant to change-of-control provisions;
• delay or defer purchasing decisions or entering into new agreements pending resolution of uncertainty about the combined company’s direction and strategy;
• choose to do business with a competitor rather than the combined company; or
• require renegotiation of terms on less favorable bases.
Any significant loss of customers or deterioration in business relationships could adversely affect the combined company’s revenue, results of operations, and business prospects.
DTI’s international operations will expand significantly following the Acquisition, exposing DTI to additional international risks.
Following the Acquisition, DTI’s international operations will expand significantly, with the Group contributing operations in the United Kingdom, continental Europe, and other international markets. The expanded international footprint will expose DTI to heightened risks, including:
• compliance with foreign laws, regulations, and tax regimes, including UK/EU environmental, employment, data protection (GDPR), anti-bribery (UK Bribery Act), and trade sanctions laws;
• political instability, social unrest, and changes in government policies in countries where the Group operates;
• difficulties in staffing and managing geographically dispersed operations;
• challenges in enforcing contractual rights and protecting intellectual property in foreign jurisdictions;
• tariffs, trade barriers, export controls, and other restrictions that could affect the Group’s products and services;
• Brexit-related regulatory divergence between UK and EU frameworks affecting cross-border operations; and
• potential adverse changes in UK tax law or regulatory policy affecting the Group’s operations.
DTI will be subject to foreign currency exchange rate risks following the Acquisition.
Following the Acquisition, DTI will have significant operations denominated in British pounds sterling and potentially other foreign currencies. The Group’s costs are primarily denominated in GBP, while its revenues may be denominated in multiple currencies. DTI’s consolidated financial statements are reported in US dollars. Accordingly, fluctuations in exchange rates between the US dollar and the British pound (and other currencies in which the Group operates) will affect DTI’s reported revenue, costs, and profitability on a period-over-period basis. A significant strengthening of the US dollar against the British pound could adversely affect the US dollar value of the Group’s GBP-denominated revenues and assets, while a weakening of the US dollar could increase the US dollar equivalent of the Group’s GBP-denominated costs and liabilities.
Additionally, the Cash Consideration payable at Closing is denominated in GBP, and the financing obtained to pay the Cash Consideration will be US dollar-denominated, while the Group’s cash flow is primarily GBP-denominated. This currency mismatch between debt service obligations and operating cash flows creates ongoing foreign currency translation risk for the combined company.
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The W&I Policy may not cover all losses from breaches of representations and warranties, and the Sellers’ direct liability is limited.
Buyer has obtained a buy-side warranty and indemnity insurance policy, issued on October 8, 2026 (the “W&I Policy”), as its primary recourse for claims arising from breaches of the Sellers’ and the Group’ representations and warranties in the SPA and under the SPA’s tax indemnity. The Sellers’ aggregate direct liability for warranty claims (including Fundamental Warranties) and insured tax indemnity claims (other than fraud) is limited to a nominal amount of £1, with Buyer expected to look to the W&I Policy for recovery. Buyer and the Sellers will each bear 50% of the premium, taxes and fees for the W&I Policy, while any retention will be borne solely by Buyer.
The W&I Policy is subject to customary limitations, including:
• an aggregate coverage limit of £15,000,000 for the policy period, which may not fully cover all potential losses and which is allocated severally among the participating insurers;
• an aggregate retention of £262,750 for claims under the general warranties, tax warranties and tax indemnity (with no retention for the Fundamental Warranties), which must be exceeded before coverage attaches (after which the W&I Policy responds for the full amount of covered losses), and separate retentions of £1,000,000 and £3,000,000 for losses relating to the Group’s Singapore and UAE subsidiaries, respectively, together with a per-claim de minimis threshold of £20,000 (£50,000 and £100,000, respectively, for those subsidiaries);
• specific policy exclusions that may exclude coverage for certain categories of risks or known issues, including matters known to Buyer’s deal team, matters disclosed in the SPA, the disclosure letter or due diligence materials (other than for the Fundamental Warranties), leakage, environmental liabilities, product liability, transfer pricing, the condition of assets, sanctions matters, customs duties, certain identified matters relating to the Group’s Malaysian and UAE subsidiaries and the specific tax liabilities that are subject to a separate indemnity from the Sellers under the SPA, and certain warranties are covered only as modified by the W&I Policy;
• time limitations on the period during which claims may be brought under the policy, which expires 84 months after the Closing for the Fundamental Warranties, tax warranties and tax indemnity and 36 months after the Closing for the general warranties;
• conditions to the insurers’ obligations, including that the Closing occur on or prior to the Outside Date and that the total cost of the W&I Policy be paid within 20 Business Days after the Closing;
• the insurer’s right to subrogate against the Sellers only in cases of fraud; and
• the general risk that the insurer may dispute coverage, delay payment, or become insolvent.
If a material breach of a representation or warranty occurs that is not covered by the W&I Policy (due to exclusion, exhaustion of the coverage limit, or dispute), and the Sellers’ direct liability is nominal, DTI may have limited or no effective recourse for the resulting losses.
DTI may be exposed to unknown or contingent liabilities of the Group following the Acquisition.
Notwithstanding the due diligence investigation conducted by DTI and its advisors, the Group may have liabilities or obligations that were not discovered or adequately assessed during the due diligence process. These could include undisclosed or contingent environmental liabilities, tax liabilities, employment-related claims, intellectual property infringement claims, pending or threatened litigation, contractual disputes, or regulatory compliance deficiencies. The Sellers’ representations and warranties in the SPA are subject to materiality qualifiers, knowledge qualifiers, and survival limitations, and DTI’s primary recourse is through the W&I Policy (which is subject to the limitations described above).
To the extent any unknown liabilities of the Group materializes following the Closing and are not covered by the W&I Policy or the Sellers’ limited indemnification obligations, such liabilities could have a material adverse effect on DTI’s business, financial condition, and results of operations.
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DTI’s management will devote significant time and attention to integration efforts, which may distract from DTI’s ongoing business operations.
The integration of the Group’s operations will require substantial management time, attention, and resources for an extended period following the Closing. This diversion of management focus could adversely affect DTI’s ability to maintain its existing business operations, execute its pre-existing strategic initiatives, retain existing customers and employees, and respond to competitive pressures. If DTI’s existing business deteriorates as a result of management distraction during the integration period, it could offset the anticipated benefits of the Acquisition.
Risks Relating to the Group’s Business
The Group’s business is dependent on activity levels in the oil and gas industry, which is cyclical and volatile, and a sustained downturn in such activity could have a material adverse effect on the Group’s revenue and profitability.
The Group provides downhole oilfield equipment rental and related ancillary services (such as torquing and testing, pressure testing, repair and refurbishment) and tubular inspection and storage services to the upstream oil and gas industry. The Group’s revenues are substantially dependent on the level of capital expenditure by oil and gas exploration and production companies, which in turn is influenced by:
• prevailing and expected oil and natural gas prices;
• global supply and demand fundamentals for hydrocarbons;
• the level of drilling and completion activity, particularly in the United Kingdom, United Arab Emirates, Malaysia, Singapore and West Africa;
• the availability and cost of capital for exploration and production companies;
• governmental policies, including climate-related regulations and the pace of the energy transition;
• general economic conditions in the markets where the Group operates;
• production decisions by the Organization of the Petroleum Exporting Countries and other significant oil and gas producing nations, and market expectations regarding future production levels;
• geopolitical instability, military conflict, terrorism, and civil unrest in oil and gas producing regions, including the ongoing conflict in Ukraine, the US-Israel-Iran conflict and restricted access to the Strait of Hormuz, which can cause rapid and unpredictable movements in commodity prices and disrupt global energy supply chains;
• adverse weather conditions and natural disasters, including hurricanes, severe storms, and other events that can disrupt oil and gas production, transportation infrastructure, and offshore operations;
• the price, availability, and perceived desirability of alternative and renewable energy sources, and the pace at which energy consumers and markets transition away from oil and natural gas as primary energy sources; and
• advances in exploration, development, and production technologies, as well as technologies affecting energy consumption and efficiency, which may alter the nature and volume of oilfield services required by the Group’s customers.
A sustained decrease in oil and gas prices or a prolonged downturn in industry activity could cause the Group’s customers to reduce or defer spending on the products and services provided by the Group, which would adversely affect the Group’s revenue, profitability, and cash flows.
The Group may be dependent on a limited number of key customers.
The Group derives a significant portion of its revenue from a limited number of customers. For the most recent fiscal year, the Group’s top 10 customers, grouping affiliated entities within each of the four major oilfield services groups, accounted for approximately 60% of the Group’s total revenue. Schlumberger Limited (“SLB”), when its
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affiliates are aggregated, accounted for more than 25% of the Group’s consolidated revenues in the fiscal year ended June 30, 2026. The Group’s principal customers include the four largest oilfield services companies globally, SLB, Baker Hughes Company, Weatherford International plc, and Halliburton Company, together with operator and other industry customers including Abu Dhabi National Energy Company PJSC (TAQA), Ithaca Energy plc, and Sapura Energy Berhad. The loss of one or more of these key customers, or a significant reduction in their purchasing levels, could have a material adverse effect on the Group’s revenue and results of operations. Many of the Group’s customer contracts are short-term or terminable on relatively short notice, and there can be no assurance that the Group’s key customer relationships will continue following the change in ownership resulting from the Acquisition. Replacing any lost key customer may be difficult and time-consuming, and there can be no assurance that the Group would be able to do so on comparable terms or without material disruption to its operations and financial performance. In addition, the oil and gas industry has experienced significant consolidation, including among operators active in the North Sea and other markets in which the Group operates. Such consolidation may reduce the number of potential customers available to the Group, increase the negotiating leverage and purchasing power of consolidated operators, and result in reduced or discontinued use of the Group’s products and services. These factors could adversely affect the pricing and volume of work available to the Group and have a material adverse effect on its business, financial condition, and results of operations.
The Group’s business may be adversely affected by climate change, the energy transition, and related governmental policies.
The Group’s business is dependent on the continued demand for oil and natural gas as primary energy sources. Improvements in or new discoveries of alternative energy technologies, including solar, wind, hydrogen, and battery storage technologies, which increase the effectiveness, availability, or cost-competitiveness of alternative forms of energy could over time reduce global demand for oil and natural gas and, consequently, the level of exploration and production activity on which the Group’s business depends. The pace and extent of the global energy transition away from fossil fuels is uncertain and is influenced by governmental policy, technological development, consumer preferences, and the availability of capital for both conventional and renewable energy projects. Government policies, financial-sector lending restrictions, and broader investor pressure have, in a number of jurisdictions, increased costs for oil and gas operators and introduced uncertainty into long-term investment planning.
In the United Kingdom, the government has committed to achieving Net Zero greenhouse gas emissions by 2050 and has entered into the North Sea Transition Deal — co-published by the Department for Energy Security and Net Zero with Offshore Energies UK in March 2021, which sets out the plan for how the UK’s offshore oil and gas sector and the government will work together to meet greenhouse gas emission reduction targets — with the offshore oil and gas industry, which contemplates a managed decline in UK Continental Shelf production alongside investment in carbon capture, utilization, and storage and other transition technologies. A “climate compatibility checkpoint” was introduced into the 33rd UK Offshore Licensing Round in 2022 to determine whether future applications for oil and gas licenses in the North Sea align with wider climate change objectives, and the UK government has committed to a ban on issuing new onshore oil and gas licenses. The Energy Profits Levy, introduced in 2022 and subsequently increased, imposes an additional tax burden on oil and gas producers operating on the UK Continental Shelf, which may reduce operator capital expenditure and, in turn, demand for the Group’s products and services. Changes to NSTA licensing policy, including any moratorium on or restriction of new exploration licenses, could further reduce activity levels in the Group’s primary market.
In addition, increasing societal, investor, and regulatory focus on climate change and the environmental impact of fossil fuel extraction may result in reduced investment in oil and gas exploration and production, increased costs of compliance with environmental regulations, and reputational challenges for companies operating in the oil and gas supply chain. Any sustained reduction in global or regional demand for oil and natural gas, or any acceleration of the energy transition beyond current expectations, could have a material adverse effect on the Group’s business, financial condition, and results of operations.
The Group operates in a highly competitive market.
The oilfield services industry in which the Group operates is highly competitive. The Group primarily competes with Workstrings International, L.L.C., Archer Limited, and Odfjell Technology Ltd., each of which supplies comparable equipment and can be competitive across certain work scopes and geographies, on the basis of product quality, reliability, price, technology, service responsiveness, and geographic reach. Some of the Group’s
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competitors have significantly greater financial, technical, and marketing resources than the Group. Contracts are typically awarded through competitive tender or negotiation processes, and the Group’s ability to secure and retain work is therefore directly dependent on its ability to compete effectively on price and service quality in each such process. Increased competition, including from competitors that may consolidate or from new entrants to the market, could result in pricing pressure, loss of market share, or the need for significant additional capital investment to remain competitive. Consolidation among operators active in the North Sea and other markets in which the Group operates may further intensify competition by reducing the number of customers, increasing their purchasing power and bargaining leverage, and concentrating contract awards among fewer, larger service providers. Any of these factors could have a material adverse effect on the Group’s business, financial condition, and results of operations.
The Group faces risks from technological change and obsolescence.
New technologies may cause the tools, equipment, and services offered by the Group to become less competitive. The market for the Group’s tools, equipment, and services is characterized by continual technological developments that have resulted in, and will likely continue to result in, substantial improvements in functionality and performance. The Group may have to incur higher levels of capital expenditure to keep pace with such technological changes. Some of the Group’s competitors may have greater financial, technical, and personnel resources that may allow them to enjoy various competitive advantages in the development and implementation of new technologies. Limits on the Group’s ability to develop, bring to market, effectively use, and implement new and emerging technologies may have a material adverse effect on the Group’s business, results of operations, and financial condition.
The Group is subject to extensive environmental, health, and safety regulation in the United Kingdom and other jurisdictions.
The Group’s operations are subject to a wide range of environmental, health, and safety laws and regulations in the United Kingdom and other jurisdictions in which it operates, including the UK Environmental Protection Act 1990, the UK Health and Safety at Work Act 1974, the Management of Health and Safety at Work Regulations 1999, the Health and Safety (First Aid) Regulations 1981, the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013, the Provision and Use of Work Equipment Regulations 1998, the Lifting Operations and Lifting Equipment Regulations 1998, the Working at Height Regulations 2005, the Control of Noise at Work Regulations 2005, the Control of Substances Hazardous to Health Regulations 2002, the Manual Handling Operations Regulations 1992, the Fire (Scotland) Act 2005, the Fire Safety (Scotland) Regulations 2006, and the Water Environment and Water Services (Scotland) Act 2003, the Offshore Installations (Prevention of Fire and Explosion, and Emergency Response) Regulations 1995, the International Maritime Organization’s Code for the Construction and Equipment of Mobile Offshore Drilling Units, and applicable EU-origin regulations retained in UK law following Brexit. The Group’s offshore operations on the UK Continental Shelf are subject to regulatory oversight by the North Sea Transition Authority (“NSTA”) and the Health and Safety Executive’s Offshore Division. The Group’s Scottish onshore operations are also subject to the regulatory oversight of the Scottish Environment Protection Agency, including in relation to waste management and water discharge activities. These regulations impose requirements relating to:
• the handling, storage, transport, and disposal of hazardous materials and waste;
• workplace health and safety standards for employees and contractors;
• emissions, discharges, and releases into the environment;
• environmental remediation and contamination liability; and
• reporting and record-keeping obligations.
Compliance with environmental, health, and safety regulations requires ongoing capital and operating expenditures. The Group monitors and manages its compliance through a program of risk assessments, regular third-party inspections, waste management reporting, fire safety testing, and emergency drills, and conducts regular internal audits covering all HSE aspects of its business. Changes in applicable regulations or their interpretation, or the discovery of previously unknown contamination, could require the Group to incur significant additional costs or modify its operations. The Group cannot predict whether additional laws and regulations will be adopted, including
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changes in regulatory oversight, increases in taxes or inspection costs, or the effect any such changes may have on its operations or financial performance. Non-compliance could result in fines, penalties, operational restrictions, reputational damage, or civil liability.
The Group is exposed to counterparty credit risk.
Weak economic conditions, volatility in the banking sector and/or widespread financial distress could reduce the liquidity of the Group’s customers, making it more difficult for them to meet their obligations to the Group. Severe financial problems encountered by the Group’s customers could limit the Group’s ability to collect amounts owed to it or to enforce the performance of obligations owed to it under contractual arrangements and/or limit its ability to enter into future contractual arrangements with such customers. In the event that any of the Group’s customers were to enter into bankruptcy, the Group could lose all or a portion of the amounts owed to it by such customer, and the Group may be forced to cancel all or a portion of its contracts with such customer at significant expense to the Group.
The Group is dependent on key personnel.
Following the Closing, the continuing involvement and expertise of key Group personnel will be important to the integration process and the ongoing success of the Group’s business. Although employment agreements are a condition to Closing for certain key employees, there can be no assurance that these individuals will remain with the combined company beyond their contractual commitments. The Acquisition may create uncertainty among the Group’s employees regarding their future roles and career prospects, which could increase the risk of attrition among key personnel during the integration period. In addition, the Group depends on a number of experienced operations managers, field engineers, and other technical personnel who maintain deep customer relationships and possess specialized knowledge of the Group’s products and services. These individuals may not be covered by formal retention arrangements, and the loss of such personnel, particularly during the post-acquisition integration period, could adversely affect the Group’s customer relationships, operational capabilities, and strategic direction. There can be no assurance that the Group will be able to retain key personnel or attract suitable replacements on acceptable terms or in a timely manner.
The Group’s operations are concentrated in certain geographic markets.
The Group’s operations are concentrated in the United Kingdom, United Arab Emirates, Malaysia, Singapore and West Africa. This geographic concentration means that the Group’s financial performance is disproportionately affected by activity levels, regulatory developments, and economic conditions in these markets. A downturn in oil and gas activity in any of these regions, or adverse regulatory changes affecting those markets, could have a disproportionate effect on the Group’s revenue and profitability compared to a more geographically diversified competitor. The Group’s ability to expand into new geographic markets is subject to a number of risks, including the need to establish new customer relationships, comply with local regulatory requirements, and manage the logistical and operational challenges of operating in new jurisdictions. There can be no assurance that any such expansion would be successful or that it would offset any reduction in activity in the Group’s existing markets.
The Group’s operations on the UK Continental Shelf are subject to the regulatory oversight of the NSTA and to UK fiscal policy, including the Energy Profits Levy. Any further increases to the Energy Profits Levy or changes to its scope could reduce operator exploration and production activity on the UK Continental Shelf, thereby reducing demand for the Group’s products and services. Changes to NSTA licensing policy, including restrictions on the award of new exploration licenses, or changes to decommissioning policy affecting the economic viability of certain fields, could similarly reduce the level of activity in the Group’s primary market and have a material adverse effect on the Group’s business, financial condition, and results of operations.
The Group’s operations in the Middle East are subject to volatility as a result of geopolitical events. The conflict between the United States and Iran, and related geopolitical tensions across the Middle East had initially caused disruption to Saltire Energy’s operations in the region, which are principally located in the United Arab Emirates and the Kingdom of Saudi Arabia. The conflict and the associated challenges of moving personnel and equipment into and around the region created logistical difficulty and adversely affected the Group’s Middle Eastern operations during the fiscal year ended June 30, 2026. Saltire Energy Limited’s Middle East turnover on a consolidated basis declined from £2,709,473 in the fiscal year ended June 30, 2025 to £1,032,568 in the fiscal year
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ended June 30, 2026, a decrease of £1,676,905, and Foxley Energy Limited’s Middle East turnover on a consolidated basis declined from £12,043,738 in the fiscal year ended June 30, 2025 to £10,152,847 in the fiscal year ended June 30, 2026, a decrease of £1,890,891. Activity across the Group’s Middle Eastern operations has since returned to levels broadly consistent with those in place immediately prior to the onset of the conflict. However, any recurrence or escalation of such conflict, or any further deterioration in regional security conditions, including any restriction of access to the Strait of Hormuz, could similarly disrupt the Group’s operations, impair its ability to move personnel and equipment, and have a material adverse effect on its financial performance.
The Group’s operations and its customers’ operations are subject to hazards inherent in the oil and gas industry, which could expose the Group and its customers to substantial liability.
Risks inherent in the industry include the risks of equipment defects, installation errors, vehicle accidents, fires, explosions, blowouts, surface cratering, uncontrollable flows of gas or well fluids, pipe or pipeline failures, abnormally pressured formations and various environmental hazards such as oil spills and releases of, and exposure to, hazardous substances. The Group and its customers are also exposed to potential natural disasters, including blizzards, tornadoes, storms, floods, other adverse weather conditions and earthquakes. The occurrence of any of these events could result in substantial losses to the Group or its customers due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigations and penalties or other damage resulting in curtailment or suspension of the Group’s or its customers’ operations. If the occurrence of any of these events were caused by a failure of the Group’s tools, or a failure of its customers to maintain or operate the tools properly, a claim may also be brought against the Group that could have an adverse effect on its business, results of operations and cash flows.
The Group’s insurance coverage may not be adequate to cover all losses or liabilities.
The Group’s insurance may not be adequate to cover all losses or liabilities it may suffer. Furthermore, the Group may be unable to maintain or obtain insurance of the type and amount it desires at reasonable rates. Premiums and deductibles for certain of the Group’s insurance policies could also increase as a result of market conditions. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. If the Group were to incur a significant liability for which it is not fully insured, it could have a material adverse effect on the Group’s business, results of operations and financial condition.
The Group is subject to anti-bribery, anti-corruption, and sanctions laws and regulations.
The Group conducts operations internationally, including through entities in the United Arab Emirates, the Kingdom of Saudi Arabia, Malaysia, Singapore, and Romania, in addition to its principal UK entities, and is therefore subject to anti-bribery, anti-corruption, and sanctions laws and regulations in the jurisdictions in which it operates. This includes the UK Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977, and applicable economic sanctions regimes administered by the UK Office of Financial Sanctions Implementation, the US Office of Foreign Assets Control, and the European Union. These laws and regulations prohibit, among other things, the payment or offer of anything of value to government officials or other persons for the purpose of obtaining or retaining business or securing an improper advantage, and restrict dealings with sanctioned countries, entities, and individuals. Violations of anti-bribery, anti-corruption, or sanctions laws could result in severe criminal and civil penalties, including substantial fines, imprisonment of individuals, disgorgement of profits, injunctive relief, debarment from government contracts, and reputational harm. Even allegations of non-compliance could result in costly investigations and proceedings and could materially adversely affect the Group’s business, financial condition, and results of operations.
The Group is dependent on third-party suppliers and may be affected by supply chain disruptions.
The Group depends on third-party manufacturers and service providers for the timely supply of equipment and components, such as drill pipes, tubing and pup joints, and hydraulic mechanical jars, which the Group purchases to rent to customers and for the maintenance of the Group’s rental tool fleet. Disruptions to the Group’s supply chain, whether resulting from supplier financial distress, manufacturing delays, transportation disruptions, natural disasters, pandemics, geopolitical events, or other factors, could impair the Group’s ability to fulfil customer orders and maintain its rental fleet. In addition, the imposition of tariffs, export controls, trade sanctions, or other governmental trade restrictions, including tariffs on steel and industrial components as well as fluctuations in foreign
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currency exchange rates and inflationary cost pressures, could increase the cost of equipment or restrict the Group’s ability to source equipment from preferred suppliers. Supplier concentration, where the Group is dependent on a limited number of suppliers for critical equipment or components, could exacerbate these risks. While the Group does not believe it is dependent on any one supplier, there can be no assurance that alternative sources of supply will be available on acceptable terms or in a timely manner in the event of a disruption affecting a key supplier. Any significant supply disruption, cost increase, or inability to source key equipment or components on acceptable terms could have a material adverse effect on the Group’s business, financial condition, and results of operations.
The Group is subject to cybersecurity risks and depends on information technology systems.
The Group depends on information technology systems and networks to manage its operations, process transactions, communicate with customers and suppliers, and store sensitive business and employee data. The Group’s IT systems may be vulnerable to disruption or compromise from cyber-attacks, including ransomware, phishing, denial-of-service attacks, and other malicious activities, as well as from human error, system failures, or natural disasters.
A successful cyber-attack or other IT disruption could result in the unauthorized access to, or loss or disclosure of, confidential business information, customer data, or employee personal data, and could disrupt the Group’s operations, damage its reputation, and expose it to regulatory penalties and civil liability, including under the UK General Data Protection Regulation and the Data Protection Act 2018. The frequency, sophistication, and severity of cyber-attacks continue to increase globally, and there can be no assurance that the Group’s existing cybersecurity measures will be sufficient to prevent or mitigate all such attacks. Any material cybersecurity incident could have a material adverse effect on the Group’s business, financial condition, and results of operations.
The Group’s operations are subject to foreign currency risks.
The Group derives revenue in multiple currencies across its international operations, including in the United Arab Emirates, Malaysia, Singapore and West Africa. The Group seeks to mitigate its exposure to foreign currency exchange rate risk by transacting in local currencies in these regions, which provides the Group with a degree of natural hedging by aligning the currency of the Group’s revenues and costs within each region. However, the financial statements of overseas subsidiary undertakings are translated into pounds sterling at the balance sheet date. As a result, adverse fluctuations in foreign exchange rates may have a negative impact on translation variances in the Group’s reported results when converting to its reporting currency in pounds sterling.
In addition, following the Acquisition, DTI’s consolidated financial statements will be reported in US dollars, while the Group’s operations are primarily GBP-denominated, which will create foreign currency translation risk for the combined company. The Cash Consideration payable at Closing is denominated in GBP, and the financing obtained to pay the Cash Consideration will be US dollar-denominated, while the Group’s cash flow is primarily GBP-denominated, creating an ongoing currency mismatch between debt service obligations and operating cash flows.
Risks Relating to Ownership of DTI Common Stock
The market price of DTI Common Stock may decline as a result of the Acquisition or the issuance of Equity Consideration.
The market price of DTI Common Stock may fluctuate significantly in connection with the Acquisition and thereafter. Factors that could cause the market price of DTI Common Stock to decline include:
• the issuance of 17,355,139 additional shares of DTI Common Stock at Closing, representing significant dilution to existing stockholders;
• market perception that the Purchase Price is too high or that the Acquisition will not be accretive to DTI’s financial performance;
• failure to meet market expectations regarding the integration timeline or synergy realization;
• downward revisions to analyst estimates or negative changes in analyst recommendations;
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• announcement of the Acquisition’s failure to close or regulatory challenges;
• sales of DTI Common Stock by the Sellers following expiration of the lock-up period; and
• general market and economic conditions affecting oilfield services companies.
Sales of substantial amounts of DTI Common Stock by the Sellers following expiration of the lock-up period could depress the market price.
At Closing, the Sellers (other than the Trustee Seller) will receive 17,355,139 shares of DTI Common Stock as Equity Consideration in exchange for the Consideration Loan Notes pursuant to the Rollover Documents. These shares will be subject to transfer restrictions under the Lock-up and Investor Rights Agreement for a period of 24 months following the Closing Date, with one-third of the shares released on each of the 12-, 18- and 24-month anniversaries of the Closing, and the lock-up will terminate early if the closing price of DTI Common Stock exceeds 200% of the Reference Price for more than 15 consecutive trading days or shares are released with DTI Board approval. Following release, open-market sales are subject to volume limitations of no more than 10% of the average daily trading volume of Common Stock on Nasdaq over the trailing 20 trading-day period preceding such sale, which limitations do not apply to underwritten offerings, block trades or privately negotiated sales. Sales of a substantial number of shares, or the perception that such sales are likely to occur, could cause the market price of DTI Common Stock to decline significantly.
Additionally, the Sellers have been granted shelf, demand and piggyback registration rights under the Lock-up and Investor Rights Agreement, and DTI is required to use commercially reasonable efforts to file a shelf registration statement covering the Sellers’ shares as soon as reasonably practicable within thirty (30) days following the Closing, which will facilitate the public resale of their shares. The filing of a registration statement covering the Sellers’ shares, even before actual sales occur, could create downward pressure on the market price.
The Sellers will become significant stockholders of DTI and may have interests that conflict with those of other stockholders.
Following the Closing, the Sellers are expected to hold approximately 33% of DTI’s outstanding Common Stock, making them DTI’s largest stockholders. Under the Lock-up and Investor Rights Agreement, the Sellers are expected to receive DTI Board designation and observer rights. This significant ownership position and governance rights could allow the Sellers to exercise meaningful influence over matters submitted to DTI stockholder vote, including the election of directors, approval of significant corporate transactions, and other matters of corporate policy.
The Sellers’ interests as significant stockholders may not always align with those of DTI’s other stockholders. For example, the Sellers may prefer strategies that preserve the value of their equity stake (such as avoiding dilutive transactions) or that provide liquidity for their shares, even if alternative strategies might better serve the interests of DTI’s other stockholders.
DTI does not expect to pay dividends on its Common Stock in the foreseeable future, and its ability to pay dividends may be further restricted following the Acquisition.
DTI does not currently pay dividends on its Common Stock and does not expect to pay dividends in the foreseeable future. Following the Acquisition, DTI’s ability to pay dividends may be further restricted by the terms of the indebtedness incurred to finance the Cash Consideration, which is expected to contain customary restrictions on the payment of dividends and distributions. Any future determination to pay dividends will be at the discretion of the DTI Board and will depend upon, among other factors, DTI’s results of operations, financial condition, capital requirements, contractual restrictions, business prospects, and such other factors as the DTI Board considers relevant.
Additional Risk Factors Relating to DTI’s Existing Business
In addition to the risks described above, you should carefully review the risk factors described in Part I, Item 1A, “Risk Factors,” of DTI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 6, 2026, as updated by Part II, Item 1A, “Risk Factors,” of DTI’s Quarterly Report on
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Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 8, 2026, and as may be further updated by DTI’s subsequent Quarterly Reports on Form 10-Q, all of which are incorporated by reference into this proxy statement/prospectus. Those risk factors address risks relating to DTI’s existing business, operations, and financial condition that will continue to apply to DTI following the completion of the Acquisition, including risks relating to:
• the cyclical nature of the oil and gas industry and DTI’s dependence on capital spending by exploration and production companies;
• competition in the oilfield services market;
• technology and product development risks;
• environmental, health, and safety regulatory compliance;
• cybersecurity and information technology risks;
• supply chain disruptions;
• general economic, political, and market conditions; and
• risks related to DTI’s corporate governance structure and anti-takeover provisions.
See the section entitled “Where You Can Find More Information” beginning on page 123 for information about how to obtain copies of these documents.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus, including the annexes hereto, and the documents incorporated by reference herein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are based on DTI’s current expectations, estimates, forecasts, and projections about the Acquisition, the expected benefits thereof, the business, results of operations, financial condition, and prospects of DTI, the Group, and the combined company following the Acquisition, and the beliefs and assumptions of DTI’s management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed or implied in any forward-looking statements.
Forward-looking statements can generally be identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “endeavor,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “might,” “objective,” “opportunity,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “target,” “will,” and “would,” as well as variations of these words and similar expressions (or the negative versions of such words or expressions). However, the absence of these words or expressions does not mean that a statement is not forward-looking.
Forward-looking statements in this proxy statement/prospectus and the documents incorporated by reference herein include, but are not limited to, statements about:
• whether and when the Acquisition will be completed and the expected timing of the Closing;
• the expected benefits of the Acquisition, including anticipated revenue and growth synergies, cost savings, and operational efficiencies;
• the expected costs and financing of the Acquisition, including the terms and availability of debt financing;
• DTI’s plans for the integration of the Group’s operations following the Acquisition;
• the combined company’s expected future results of operations, financial condition, cash flows, and capital expenditures;
• pro forma financial information relating to the combined company;
• DTI’s post-Acquisition strategy, plans, and objectives for future operations; and
• any other statements that relate to non-historical facts or events.
These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond DTI’s control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the following:
• the possibility that the Acquisition may not be consummated on the terms or timeline currently contemplated, or at all, including due to the failure to satisfy one or more conditions to Closing set forth in the SPA;
• the risk that DTI stockholders may not approve the Share Issuance Proposal or the Ratification Proposal at the Special Meeting, which is a condition to the Closing of the Acquisition, and that failure to approve the Ratification Proposal could leave the Prior Elections subject to challenge;
• the risk that Buyer may be unable to obtain debt and/or equity financing in an amount sufficient to pay the Adjusted Cash Consideration on terms consistent with the Agreed Financing Terms, which would prevent the Closing given the financing condition in the SPA;
• the occurrence of any event, change, or other circumstance that could give rise to the termination of the SPA, including failure to close by the Outside Date of March 31, 2027;
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• the risk that the SPA does not provide DTI’s Board with a “fiduciary out” to change its recommendation or terminate the SPA in response to a superior proposal, limiting DTI’s flexibility;
• the limited termination fee and expense reimbursement protections under the SPA, which may not adequately compensate DTI for costs and losses incurred if the Acquisition fails to close;
• the fact that the SPA is governed by English law and subject to the jurisdiction of English courts, which may affect DTI’s rights and remedies in ways that differ from US law;
• the failure to realize the expected benefits and synergies of the Acquisition, including anticipated revenue and growth synergies, or the risk that such benefits may be more difficult to realize, take longer to achieve, or cost more than anticipated;
• the risk that the integration of the Group’s operations with DTI’s may be more complex, costly, or time-consuming than expected, particularly given the cross-border nature of the integration (Scotland/UK and United States), differences in legal and regulatory regimes, accounting standards (UK GAAP vs. US GAAP), and business cultures;
• the risk of significant or unexpected transaction and integration-related costs, charges, or expenses in connection with the Acquisition, or the assumption of unknown or inestimable liabilities of the Group;
• the potential impact of the announcement, pendency, or consummation of the Acquisition on DTI’s and the Group’s relationships with customers, suppliers, business partners, and employees, including the risk that third parties may terminate, modify, or decline to renew existing contracts or arrangements;
• any failure to attract, motivate, and retain management personnel and other key employees of DTI or the Group, which could diminish the anticipated benefits of the Acquisition, particularly during the integration period;
• the risk that DTI’s increased indebtedness following the Acquisition may adversely affect its financial flexibility, limit its ability to pursue other strategic opportunities, and impose restrictive covenants on its operations;
• the risk that the significant goodwill and intangible assets expected to be recorded in connection with the Acquisition may become impaired, resulting in non-cash charges that could materially affect DTI’s reported results;
• the risk that the W&I Policy obtained by Buyer may not cover all losses arising from breaches of representations and warranties, due to policy exclusions, coverage limits, retention amounts, or insurer disputes, and that the Sellers’ direct liability is limited to a nominal amount;
• the risk that the Purchase Price was determined based on the financial position of the Group as of the Locked Box Date (June 30, 2026), and the locked-box mechanism provides no post-closing purchase price adjustment for deterioration in the Group’s business between the Locked Box Date and the Closing Date;
• the risk that the fixed number of shares (17,355,139) to be issued as Equity Consideration means that the value of the consideration will fluctuate with changes in the market price of DTI Common Stock, without any price-based adjustment mechanism, collar, or walk-away right;
• the risk that foreign currency exchange rate fluctuations (particularly between the US dollar and British pound sterling) may adversely affect the combined company’s reported results, the US dollar value of the Group’s operations, and the economics of the acquisition financing;
• general economic, business, financial market, and political conditions that affect DTI, the Group, and the combined company, including conditions affecting the oil and gas industry, commodity prices, drilling activity levels, and capital spending by exploration and production operators;
• the cyclical and volatile nature of the oil and gas services industry, and the risk that a sustained downturn in oil and gas activity could adversely affect the revenue and profitability of the combined company;
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• the risk that pro forma financial information included in this proxy statement/prospectus may not be indicative of the actual results that would have been achieved or that will be achieved in the future by the combined company;
• the risk that the Group’s operations are subject to extensive environmental, health, and safety regulations in the United Kingdom and other jurisdictions, and that compliance costs, regulatory changes, or environmental liabilities may be greater than anticipated;
• the potential tax consequences of the Acquisition, including risks associated with Section 338(g) elections, cross-border tax structuring, transfer pricing, and changes in tax law or its interpretation in the United States, the United Kingdom, or other jurisdictions;
• the risk that DTI’s international operations will expand significantly following the Acquisition, exposing DTI to heightened political, regulatory, sanctions, trade restriction, and compliance risks in the United Kingdom, continental Europe, and other markets;
• the risk of difficulties in integrating the information technology systems and cybersecurity frameworks of DTI and the Group, including the potential for increased vulnerability to cyberattacks during the transition period;
• the risk that the market price of DTI Common Stock may decline as a result of the Acquisition, the issuance of Equity Consideration, or market perception of the terms or prospects of the combined company;
• the risk that sales of substantial amounts of DTI Common Stock by the Sellers following expiration of the lock-up period under the Lock-up and Investor Rights Agreement could depress the market price of DTI Common Stock;
• the risk that the Sellers will become significant stockholders of DTI with board designation and observation rights under the Lock-up and Investor Rights Agreement, and their interests may not align with those of other DTI stockholders;
• the risk that DTI’s status as an emerging growth company and smaller reporting company may result in reduced public disclosure, making DTI Common Stock less attractive to certain investors; and
• the risk that the due diligence investigation conducted by DTI and its advisors with respect to the Group (which are private Scottish companies with no prior public reporting obligations) may not have identified all risks, liabilities, or adverse conditions associated with the Group’s business.
The foregoing list of factors is not exhaustive. Additional risks and uncertainties not presently known to DTI, or that DTI currently deems immaterial, may also adversely affect DTI’s business, financial condition, results of operations, and prospects. You should also carefully consider the risks described or referred to in the section entitled “Risk Factors” beginning on page 13 of this proxy statement/prospectus, as well as the risk factors described in Part I, Item 1A, “Risk Factors,” of DTI’s most recent Annual Report on Form 10-K, as updated by Part II, Item 1A, “Risk Factors,” of any subsequent Quarterly Reports on Form 10-Q, all of which are incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 123.
All forward-looking statements attributable to DTI or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. You should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. DTI undertakes no obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances, or otherwise, except to the extent required by applicable law, including United States federal securities laws. All subsequent written and oral forward-looking statements attributable to DTI, or any person acting on DTI’s behalf, are expressly qualified in their entirety by the cautionary statements contained in this section and elsewhere in this proxy statement/prospectus.
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SPECIAL MEETING
General
This proxy statement/prospectus is being provided to stockholders of DTI, as part of a solicitation of proxies by DTI’s Board of Directors for use at the Special Meeting, and any adjournments or postponements thereof. It contains important information about the Special Meeting and should be read carefully in its entirety.
Date, Time and Place of the Special Meeting
The Special Meeting will be held via virtual webcast at [•] Central Time on [•], 2026, at www.virtualshareholdermeeting.com/DTI2026SM. There will be no physical location for the Special Meeting. You will be able to attend the Special Meeting online, vote your shares electronically and submit questions during the Special Meeting by visiting www.virtualshareholdermeeting.com/DTI2026SM.
Purpose of the Special Meeting
At the Special Meeting, DTI stockholders will be asked to consider and vote on the following proposals:
1. Share Issuance Proposal: To approve the issuance of 17,355,139 shares of DTI Common Stock to the Sellers as Equity Consideration pursuant to the SPA, as required under Nasdaq Listing Rule 5635(a).
2. Ratification Proposal: To approve the ratification of the elections of directors conducted at DTI’s 2024, 2025, and 2026 Annual Meetings of Stockholders pursuant to Section 204 of the DGCL.
3. Adjournment Proposal: To approve the adjournment of the Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve the Share Issuance Proposal or the Ratification Proposal.
Completion of the Acquisition is conditioned on approval of the Share Issuance Proposal and the Ratification Proposal. Approval of the Adjournment Proposal is not a condition to the completion of the Acquisition.
Recommendation of the DTI Board
The DTI Board unanimously recommends that DTI stockholders vote “FOR” the Share Issuance Proposal, “FOR” the Ratification Proposal, and “FOR” the Adjournment Proposal.
Voting by Directors and Executive Officers
As of the record date described below, DTI’s directors and executive officers, as a group, beneficially owned and were entitled to vote [•] shares of DTI Common Stock, or approximately [•]% of the issued and outstanding shares of DTI Common Stock.
DTI currently expects that all of its directors and executive officers will vote their shares “FOR” the Share Issuance Proposal, “FOR” the Ratification Proposal, and “FOR” the Adjournment Proposal.
Record Date
The DTI Board has fixed the close of business on [•], 2026 as the record date for the Special Meeting (the “Record Date”). Only DTI stockholders of record at the close of business on the Record Date are entitled to receive notice of, and to vote at, the Special Meeting.
Outstanding Shares and Voting Rights of DTI Stockholders
As of the Record Date, [•] shares of DTI Common Stock were issued and outstanding. Each share of DTI Common Stock outstanding on the Record Date is entitled to one vote on each proposal and any other matter properly coming before the Special Meeting.
Continental Stock Transfer & Trust Company (“CST”) is the transfer agent and registrar for DTI Common Stock.
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Stockholder List
A list of DTI stockholders of record who are entitled to vote at the Special Meeting will be available electronically during the Special Meeting for examination by any stockholder attending the Special Meeting virtually.
Quorum
No business may be transacted at the Special Meeting unless a quorum is present. Holders of shares of DTI Common Stock representing a majority in voting power of the shares of DTI Common Stock issued and outstanding and entitled to vote at the Special Meeting, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Special Meeting.
Abstentions and broker non-votes will be included in determining whether a quorum is present at the Special Meeting. A broker non-vote occurs when a nominee, such as a broker, holding shares for a beneficial owner does not have discretionary voting power for a particular proposal and has not received instructions from the beneficial owner on how to vote those shares.
Adjournment
The Special Meeting may be adjourned from time to time by the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the outstanding shares of DTI Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote thereon, regardless of whether a quorum is present, without further notice other than an announcement made during the Special Meeting.
If a quorum is not present at the Special Meeting, or if a quorum is present but there are not sufficient votes at the time of the Special Meeting to approve the Share Issuance Proposal, DTI stockholders may be asked to approve the Adjournment Proposal to adjourn the Special Meeting in order to permit the further solicitation of proxies. Regardless of whether a quorum is present, the chairperson of the Special Meeting may also adjourn the Special Meeting.
Vote Required
The required votes to approve the proposals are as follows:
• Share Issuance Proposal requires the affirmative vote of the holders of shares of DTI Common Stock representing a majority of votes properly cast on that proposal. Assuming a quorum is present, shares that are not present in person or by proxy, abstentions and broker non-votes, if any, will have no effect on the vote for this proposal.
• Ratification Proposal requires, pursuant to Section 204(d)(4)(B) of the DGCL, the affirmative vote of the holders of a majority of the shares of DTI Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote at the election of directors, excluding any putative stock. Shares that are not present in person or by proxy will have no effect on the vote for this proposal, assuming a quorum is present; however, abstentions and any broker non-votes will have the same effect as a vote “AGAINST” the approval of the Ratification Proposal.
• Adjournment Proposal requires the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the outstanding shares of DTI Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote on the proposal, regardless of whether there is a quorum. Shares that are not present in person or by proxy and broker non-votes, if any, will have no effect on the vote for this proposal; however, abstentions will have the same effect as a vote “AGAINST” the approval of the Adjournment Proposal.
The Share Issuance Proposal, the Ratification Proposal, and the Adjournment Proposal are “non-routine” matters under Nasdaq rules. Accordingly, brokers, banks and other nominees do not have discretionary authority to vote shares held in “street name” on any of these proposals.
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Voting of Proxies by Holders of Record
If you were a record holder of DTI Common Stock at the close of business on the Record Date, a proxy card is enclosed for your use. DTI requests that you vote your shares as promptly as possible by (i) accessing the internet site listed on the DTI proxy card, (ii) calling the toll-free number listed on the DTI proxy card, or (iii) submitting your DTI proxy card by mail using the provided self-addressed, stamped envelope. Information and applicable deadlines for voting through the internet or by telephone are set forth on the proxy card.
When a proxy is returned properly executed, the shares of DTI Common Stock represented by it will be voted at the Special Meeting in accordance with the instructions contained in the proxy card. Your internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you had marked, signed and returned a proxy card.
If a proxy is returned without an indication as to how the shares of DTI Common Stock represented by it are to be voted with regard to a particular proposal, the DTI Common Stock represented by the proxy will be voted in accordance with the recommendation of the DTI Board and, therefore, “FOR” the Share Issuance Proposal, “FOR” the Ratification Proposal, and “FOR” the Adjournment Proposal.
Your vote is important. Accordingly, if you were a record holder of DTI Common Stock on the Record Date, please submit your proxy by internet, telephone or mail regardless of whether you plan to attend the Special Meeting virtually. Submitting a proxy will not prevent you from voting at the Special Meeting, but it will help secure a quorum and avoid added solicitation costs.
Shares Held in Street Name
If you hold shares of DTI Common Stock through a broker, bank or other nominee, you are considered the “beneficial owner” of the shares held for you in what is known as “street name.” The record holder of those shares is your broker, bank or other nominee, and not you, and you must provide the record holder with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or other nominee.
You may not vote shares held in street name by returning a proxy card directly to DTI or by voting at the virtual Special Meeting unless you have a “legal proxy,” which you must obtain from your broker, bank or other nominee. Because the Share Issuance Proposal, the Ratification Proposal, and the Adjournment Proposal are non-routine matters, brokers, banks and other nominees may not vote those shares without specific instructions from you. If you do not instruct your broker, bank or other nominee on how to vote your shares, your shares will not be voted on any of these proposals.
Voting in Person (Virtually)
If you plan to attend the Special Meeting virtually and wish to vote in person, you will be able to vote your shares electronically during the virtual webcast by following the instructions provided at www.virtualshareholdermeeting.com/DTI2026SM. Simply attending the Special Meeting virtually without voting will not revoke a proxy previously submitted.
If you are a registered stockholder, please be prepared to provide the identification or other information requested in the virtual meeting instructions. If your shares are held in street name, you must obtain a legal proxy from the record holder of your shares authorizing you to vote at the Special Meeting and follow the instructions for virtual attendance and voting.
Proxies and Revocation
DTI stockholders of record may revoke their proxies at any time before their shares of DTI Common Stock are voted at the Special Meeting in any of the following ways:
• submitting a new proxy with a later date by internet, telephone or mail;
• delivering written notice of revocation of the proxy to DTI’s Corporate Secretary at 10370 Richmond Ave. #1000, Houston, Texas 77042; or
• attending the Special Meeting virtually and voting in person.
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Attending the Special Meeting virtually without voting will not, in and of itself, revoke a valid proxy previously delivered. A proxy will be revoked only when the replacement proxy or written notice is received before the vote is taken or when the stockholder votes during the virtual meeting.
If your shares are held in street name and you have delivered voting instructions to your broker, bank or other nominee, you may revoke or change those instructions only in accordance with the procedures provided by that organization.
Solicitation of Proxies
DTI will pay the costs of soliciting proxies relating to the Special Meeting. In addition to mailing or making available this proxy statement/prospectus and related materials, some of DTI’s directors, officers and other employees may solicit proxies by telephone, mail, e-mail or online. R. Wayne Prejean, DTI’s Chairman and Chief Executive Officer, may participate in these solicitations. None of DTI’s directors, officers or employees will receive any additional compensation for their solicitation services. DTI will reimburse banks, brokers and other nominees for their reasonable expenses in forwarding proxy materials to beneficial owners and obtaining voting instructions.
Other Matters
At this time, DTI knows of no other matters to be submitted at the Special Meeting. If any other matter is properly presented at the Special Meeting for consideration, it is intended that the persons named in the enclosed form of proxy and acting thereunder will vote in accordance with their best judgment on that matter.
Questions and Additional Information
If you have any questions about the Acquisition, the Special Meeting or this proxy statement/prospectus, or if you would like additional copies of these materials or need help voting your shares, please contact DTI at its principal executive offices, 10370 Richmond Avenue #1000, Houston, Texas 77042, telephone (832) 742-8500, or email InvestorRelations@drillingtools.com.
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SHARE ISSUANCE PROPOSAL
DTI stockholders are being asked to approve the issuance of 17,355,139 shares of DTI Common Stock, par value $0.0001 per share, to the sellers of Saltire and Foxley as the Equity Consideration in connection with the Acquisition, as required under Nasdaq Listing Rule 5635(a).
On October 8, 2026, DTI and its wholly owned subsidiary, the Buyer, entered into the SPA with Saltire, Foxley, the Sellers, as the Seller Representative.
Under the SPA, the Buyer will acquire 100% of the issued and outstanding share capital of each of Saltire and Foxley from the Sellers at the Closing. The Acquisition is structured as a direct share purchase of the Group, not a merger. Upon the Closing, the Group will become indirect wholly owned subsidiaries of DTI, and their respective subsidiaries will become indirect subsidiaries of DTI. DTI stockholders are not being asked to approve the Acquisition itself or to adopt the SPA. For more information, see the section entitled “The Acquisition.”
The consideration payable to the Sellers pursuant to the SPA consists of a mix of (i) £60,289,856.60 in cash (approximately $81 million based on the exchange rate of $1.343 per £1.00 specified in the SPA) (the “Cash Consideration”) and (ii) unsecured loan notes to be issued by Buyer to the Sellers (other than the Trustee Seller) (the “Consideration Loan Notes”), which, pursuant to rollover loan note instruments and put and call option agreements among such Sellers, Buyer and certain subsidiaries of DTI (the “Rollover Documents”), will be exchanged at Closing for an aggregate of 17,355,139 shares of DTI common stock, par value $0.0001 per share (the “DTI Common Stock” and such shares, the “Equity Consideration” and together with the Cash Consideration, the “Consideration”). The Trustee Seller will receive its consideration entirely in cash. The number of shares to be issued is fixed and is not subject to adjustment based on changes in the market price of DTI Common Stock; only the Cash Consideration is subject to adjustment under the SPA.
Under Nasdaq Listing Rule 5635(a), a company listed on Nasdaq is required to obtain stockholder approval before issuing securities in connection with the acquisition of the stock or assets of another company if the number of shares of common stock to be issued is equal to or exceeds 20% of the number of shares of common stock outstanding before the issuance. Because the 17,355,139 shares of DTI Common Stock to be issued as Equity Consideration represents approximately 49.2% of DTI’s outstanding common stock, DTI must obtain approval of its stockholders before issuing those shares.
The purpose of the vote on the Share Issuance Proposal is to satisfy the Nasdaq listing requirement for the issuance of the Equity Consideration. DTI stockholders are not being asked to approve the Acquisition or adopt the SPA. If the Share Issuance Proposal is approved but the Acquisition is not completed, DTI will not issue any shares of DTI Common Stock pursuant to that approval. Completion of the Acquisition is conditioned on approval of the Share Issuance Proposal and the Ratification Proposal.
If the Acquisition is completed, the issuance of the Equity Consideration will dilute the percentage ownership and voting power of existing DTI stockholders. Based on [•] shares of DTI Common Stock outstanding as of the Record Date, the issuance of 17,355,139 additional shares would represent an increase of approximately [•]% in the number of outstanding shares of DTI Common Stock. Immediately following the issuance, existing DTI stockholders would hold approximately [•]% of the outstanding DTI Common Stock, and the Sellers would hold approximately [•]%. The exact percentages will depend on the number of shares of DTI Common Stock outstanding immediately before the Closing.
Each existing DTI stockholder will continue to own the same number of shares of DTI Common Stock that such stockholder owned immediately before the Closing, but each such share will represent a smaller percentage of the aggregate outstanding DTI Common Stock after the issuance. The issuance may also affect the voting power, earnings per share and book value per share of existing DTI stockholders. Because the number of shares to be issued is fixed, the dilutive effect will not change based on changes in the market price of DTI Common Stock between the date of this proxy statement/prospectus and the Closing.
The Acquisition will not directly affect DTI’s corporate existence, certificate of incorporation, bylaws or the rights of shares currently held by DTI stockholders; the existing shares will not be exchanged, cancelled or converted. No appraisal or dissenters’ rights are available to DTI stockholders in connection with the Acquisition. Because the Acquisition is a direct share purchase of the Group and not a merger or consolidation involving DTI or DTI Common Stock, Section 262 of the DGCL does not apply.
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DTI Common Stock is listed on the Nasdaq Stock Market LLC under the symbol “DTI.” DTI will apply for a Listing of Additional Shares covering the 17,355,139 shares of DTI Common Stock to be issued as Equity Consideration. Approval of the listing is expected before the Closing, subject to official notice of issuance. Following the Closing, DTI Common Stock will continue to trade on Nasdaq under the symbol “DTI.”
The DTI Board unanimously recommends that DTI stockholders vote “FOR” the Share Issuance Proposal. The DTI Board has unanimously determined that the Acquisition and the transactions contemplated by the SPA are fair to, and in the best interests of, DTI and its stockholders. Under the SPA, the DTI Board may not withdraw, qualify or modify its recommendation that DTI stockholders vote “FOR” the Share Issuance Proposal. For information about the DTI Board’s recommendation on the Ratification Proposal, see the section entitled “Ratification Proposal.”
Approval of the Share Issuance Proposal requires the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the votes properly cast on the proposal. Assuming a quorum is present, shares that are not present in person or by proxy, abstentions and broker non-votes, if any, will have no effect on the outcome of the vote. Completion of the Acquisition is conditioned on approval of the Share Issuance Proposal and the Ratification Proposal; if the proposals are not approved, the Acquisition cannot be completed and DTI will not issue the Equity Consideration shares.
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RATIFICATION PROPOSAL
The DTI Board is asking DTI’s stockholders to approve the ratification, pursuant to Section 204 of the DGCL, of the elections of directors conducted at DTI’s 2024, 2025 and 2026 Annual Meetings of Stockholders (the “Prior Elections”), at which all directors were elected to serve one-year terms rather than for staggered three-year terms as provided in Article V, Section A of the Charter. The DTI Board has unanimously determined that the ratification of the Prior Elections is advisable and in the best interests of DTI and its stockholders.
Background and Reasons for the Proposal
DTI was originally incorporated in Delaware as ROC Energy Acquisition Corp (“ROC Energy”), a special purpose acquisition company. On June 20, 2023, DTI completed a business combination (the “Business Combination”) with Drilling Tools International Holdings, Inc. (“DTI Holdings”) and, in connection therewith, changed its name to Drilling Tools International Corporation.
In connection with the Business Combination, DTI adopted, and DTI’s stockholders approved, the Second Amended and Restated Certificate of Incorporation of DTI (the “Charter”). Article V, Section A of the Charter provides that The DTI Board of DTI shall be divided into three classes of directors, designated as Class I, Class II and Class III, as nearly equal in number as possible, with each class of directors serving staggered three-year terms (the “Classified Board Structure”). Specifically, under the Charter:
• the initial Class I directors were to serve for a term expiring at the first annual meeting of stockholders following the adoption of the Charter;
• the initial Class II directors were to serve for a term expiring at the second annual meeting of stockholders following the adoption of the Charter; and
• the initial Class III directors were to serve for a term expiring at the third annual meeting of stockholders following the adoption of the Charter.
Thereafter, the successors of the class of directors whose term expires at each annual meeting were to be elected for three-year terms expiring at the annual meeting of stockholders held in the third year following the year of their election.
Despite the Classified Board Structure set forth in the Charter, at each of DTI’s 2024, 2025 and 2026 Annual Meetings of Stockholders (collectively, the “Prior Elections”), all directors were nominated and elected to serve one-year terms, rather than only the class of directors whose term was expiring being nominated and elected for staggered three-year terms as contemplated by the Charter. As a result, DTI did not implement the Classified Board Structure at the Prior Elections.
On September 15, 2026, DTI received a stockholder demand letter (the “Stockholder Demand”) from counsel to a stockholder of DTI, alleging that DTI violated the Charter by failing to implement the Classified Board Structure at the Prior Elections and demanding, among other things, that DTI correct the allegedly defective elections through the use of Section 204 or Section 205 of the General Corporation Law of the State of Delaware (the “DGCL”).
The DTI Board takes this matter seriously and is acting proactively and cooperatively in response to the Stockholder Demand. The DTI Board and management believe that the underlying director elections at the Prior Elections were valid, that the directors have served in good faith, and that DTI has been well-governed at all times. Importantly, the practical effect of this inconsistency is that DTI’s stockholders were given more voting rights than the Charter technically required. Every director stood for election every year, rather than only approximately one-third of the DTI Board standing for election at each annual meeting. The DTI Board and DTI’s stockholders clearly intended to elect directors at each annual meeting, and DTI’s operations and governance at all times have been conducted by directors duly acting in good faith on behalf of DTI and its stockholders.
Notwithstanding The DTI Board’s belief in the validity of the Prior Elections, the DTI Board has determined that it is advisable and in the best interests of DTI and its stockholders to ratify the Prior Elections pursuant to Section 204 of the DGCL (the “Ratification Proposal”) as a curative, protective measure, to avoid potential future
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litigation risk, and to eliminate any uncertainty as to the effectiveness of the Prior Elections. The DTI Board has determined that this was a technical, procedural error, not a substantive governance failure, and that the ratification of the Prior Elections is in the best interests of DTI and its stockholders.
In addition, DTI intends to seek stockholder approval at its next annual meeting of stockholders to amend the Charter to declassify the DTI Board and provide for the annual election of all directors going forward.
Description of the Defective Acts to Be Ratified
The “Prior Elections” are the elections of directors conducted at DTI’s 2024, 2025 and 2026 Annual Meetings of Stockholders. At each of these meetings, all directors were elected to serve one-year terms, rather than being elected for staggered three-year terms in accordance with the Classified Board Structure set forth in Article V, Section A of the Charter. As a result, the Prior Elections may constitute “defective corporate acts” within the meaning of Section 204(h)(1) of the DGCL, due to a “failure of authorization” as defined in Section 204(h)(2) of the DGCL, specifically, the failure to elect directors in the manner and for the terms specified in the Charter.
The specific elections constituting the Prior Elections are described below:
2024 Annual Meeting of Stockholders (May 14, 2024).
At the 2024 Annual Meeting, the following seven directors were elected for one-year terms expiring at the 2025 Annual Meeting: Curtis L. Crofford, John D. “Jack” Furst, Thomas O. Hicks, Eric C. Neuman, Thomas M. “Roe” Patterson, R. Wayne Prejean, and C. Richard Vermillion.
2025 Annual Meeting of Stockholders (May 13, 2025).
At the 2025 Annual Meeting, the following seven directors were elected for one-year terms expiring at the 2026 Annual Meeting: Curtis L. Crofford, John D. “Jack” Furst, Thomas O. Hicks, Eric C. Neuman, Thomas M. “Roe” Patterson, R. Wayne Prejean, and C. Richard Vermillion.
2026 Annual Meeting of Stockholders (April 28, 2026).
At the 2026 Annual Meeting, the following seven directors were elected for one-year terms expiring at the 2027 Annual Meeting: Curtis L. Crofford, John D. “Jack” Furst, Ira H. Green, Jr., Daniel J. Kimes, Eric C. Neuman, R. Wayne Prejean, and Jeremy D. Thigpen.
Nature of the Failure of Authorization
The failure of authorization underlying the Prior Elections consists of the election of all directors to one-year terms at each of the 2024, 2025 and 2026 Annual Meetings of Stockholders, rather than electing only the class of directors whose terms were expiring for staggered three-year terms as required by Article V, Section A of the Charter. This constitutes a potential “defective corporate act” within the meaning of Section 204(h)(1) of the DGCL due to a “failure of authorization” as defined in Section 204(h)(2) of the DGCL, namely, the failure of the Prior Elections to be effected in accordance with the provisions of the Charter governing the election of directors.
Importantly, this was a technical, procedural error. The stockholders of DTI were given more voting rights than the Charter technically required. All directors stood for election at each annual meeting, rather than only approximately one-third of the DTI Board standing for election at each annual meeting. Neither the validity of any individual director’s service nor the DTI Board’s authority to manage the business and affairs of DTI is in question. The DTI Board and DTI’s stockholders clearly intended to elect directors at each annual meeting, and all directors have served in good faith.
The Board believes that DTI and its directors acted in good faith in conducting the Prior Elections. At each annual meeting, stockholders were afforded the opportunity to vote on the election of every director, rather than only the directors in the class whose terms were expiring. DTI is seeking ratification to reduce uncertainty concerning the Prior Elections and related corporate actions. Separately, as a good corporate governance practice, DTI intends to seek stockholder approval to amend the Charter to provide for annual election of all directors going forward.
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Matters Related to Section 204 of the DGCL
Section 204 of the DGCL provides a statutory mechanism by which a Delaware corporation may ratify defective corporate acts. Subject to the provisions of Section 204(f) of the DGCL, no defective corporate act or putative stock shall be void or voidable solely as a result of a failure of authorization if ratified in accordance with Section 204 or validated by the Court of Chancery of the State of Delaware (the “Court of Chancery”) in a proceeding brought under Section 205 of the DGCL. A ratification of a defective corporate act under Section 204 is retroactive to the date on which the defective corporate act was originally taken.
Board Resolutions
On October 5, 2026, the DTI Board adopted resolutions (the “Ratification Resolutions”) in accordance with Section 204(b)(1) of the DGCL, which, among other things:
• identify the defective corporate acts to be ratified (i.e., the Prior Elections);
• state the dates of each of the defective corporate acts (i.e., the dates of the 2024, 2025 and 2026 Annual Meetings);
• describe the nature of the failure of authorization in respect of each defective corporate act to be ratified (i.e., the election of all directors to one-year terms rather than staggered three-year terms in accordance with the Charter); and
• approve the ratification of the Prior Elections.
The Ratification Resolutions further direct that the Ratification Proposal be submitted to the stockholders of DTI for approval at this Special Meeting in accordance with Section 204(d) of the DGCL.
The information required by Section 204(b)(1) of the DGCL with respect to the Ratification Resolutions is set forth in Annex C to this proxy statement. The full text of Sections 204 and 205 of the DGCL is attached to this proxy statement as Annex D. Stockholders are urged to carefully read Annex C and Sections 204 and 205 of the DGCL in their entirety.
Notice
Pursuant to Section 204(g) of the DGCL, prompt notice of the ratification of a defective corporate act and the stockholder vote thereon must be given to holders of valid stock and putative stock, whether voting or nonvoting, as of the record date for the meeting and as of the date of the defective corporate act. No putative stock was issued in connection with any of the Prior Elections. For corporations listed on a national securities exchange, such notice may be deemed given if the information is disclosed in a document publicly filed by the corporation with the SEC pursuant to Section 13, 14, or 15(d) of the Securities Exchange Act of 1934, as amended. DTI intends for this proxy statement to constitute such notice.
Effect of Ratification
If the Ratification Proposal is approved by the requisite vote of stockholders, from and after the validation effective time (as defined in Section 204(h)(6) of the DGCL), each of the Prior Elections shall no longer be deemed void or voidable as a result of the failure of authorization described in the Ratification Resolutions, and such effect shall be retroactive to the time of each of the Prior Elections. Specifically:
• The election of directors at each of the 2024, 2025 and 2026 Annual Meetings of Stockholders will be confirmed as having been validly effected;
• Each person purportedly elected at the Prior Elections will be deemed to have been duly elected as a director of DTI as of the date of the applicable Prior Election, for a one-year term, and each director elected at the 2026 Election will continue in office until the 2027 annual meeting of stockholders and until he or she is re-elected or his or her successor is duly elected and qualified, or his or her earlier death, resignation or removal;
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• Each Board Act, including acts of the DTI Board, its committees and officers acting under delegated authority since May 14, 2024, will be ratified as of its date to the extent its validity may be affected by any failure of authorization in respect of the Prior Elections will be confirmed as having been validly taken by a duly constituted Board; and
• DTI’s corporate actions and governance will no longer be subject to challenge on the basis that the directors were not validly elected at the Prior Elections.
Notwithstanding stockholder approval of the Ratification Proposal, the DTI Board may abandon the Ratification Resolutions, in whole or in part, at any time prior to the validation effective time without further action of the stockholders.
Filing of Certificate(s) of Validation
Section 204 of the DGCL provides that, in connection with the ratification of a defective corporate act that would have required the filing of a certificate with the Secretary of State of the State of Delaware, a certificate of validation must be filed with the Delaware Secretary of State. Because the Prior Elections involved the election of directors and did not involve the filing of any certificate with the Delaware Secretary of State, DTI does not believe that the filing of a certificate of validation is required in connection with the ratification of the Prior Elections. In such case, the validation effective time would be the latest of (a) the time at which the Ratification Resolutions were adopted by the DTI Board, (b) the time at which stockholders approve the Ratification Proposal, and (c) the satisfaction or waiver of any condition to the ratification specified in the Ratification Resolutions.
Time Limitations on Legal Challenges
Under Sections 204 and 205 of the DGCL, any claim that a defective corporate act ratified pursuant to Section 204 is void or voidable due to the failure of authorization identified in the Ratification Resolutions, or that the Court of Chancery should declare in its discretion that the ratification in accordance with Section 204 not be effective or be effective only on certain conditions, must be brought within 120 days from the later of (i) the validation effective time of the ratification and (ii) the time that notice is given in accordance with Section 204(g) of the DGCL. After the expiration of such 120-day period, any such claim will be time-barred, except that, pursuant to Section 205(f) of the DGCL, this limitation does not apply to (a) an action asserting that the ratification was not accomplished in accordance with Section 204 of the DGCL or (b) any person to whom notice of the ratification was required to have been given pursuant to Section 204(d) or 204(g) of the DGCL but to whom such notice was not given.
Consequences if the Ratification Proposal Is Not Approved
If the Ratification Proposal is not approved by the requisite vote of stockholders, the Prior Elections will not be ratified pursuant to Section 204 of the DGCL. In that event:
• DTI may be exposed to potential claims that the directors elected at the Prior Elections were not validly elected in accordance with the Charter and achieved only “de facto” status, rather than “de jure” status, as directors of DTI;
• Corporate actions taken by such directors, or by any committee of The DTI Board composed of such directors, could potentially be challenged on the basis that the directors lacked valid authority;
• DTI may experience ongoing uncertainty regarding its corporate governance, the validity of the Prior Elections and the authority of The DTI Board, which could have adverse effects on DTI’s business, operations and reputation;
• DTI could become subject to litigation relating to the validity of the Prior Elections and the actions taken by The DTI Board following such elections, including potential claims by stockholders or other parties, which litigation could be costly and distracting to management; and
• DTI may need to seek validation of the Prior Elections through a proceeding before the Court of Chancery under Section 205 of the DGCL, which would involve additional costs and uncertainty.
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For these reasons, The DTI Board believes the ratification of the Prior Elections pursuant to Section 204 of the DGCL is advisable and in the best interests of DTI and its stockholders.
Interests of Directors and Executive Officers of DTI
Except to the extent of their roles as directors and officers of DTI, no director or executive officer of DTI has any material interest in the Ratification Proposal that is different from or in addition to the interests of DTI’s stockholders generally. Each of DTI’s current directors was elected at one or more of the Prior Elections, and the ratification would confirm that each person purportedly elected was duly elected as of the applicable election date for a one-year term, with the directors elected at the 2026 Election continuing until the 2027 annual meeting and until re-elected or their successors are duly elected and qualified, or their earlier death, resignation or removal. The DTI Board does not believe that these interests constitute material interests that are different from or in addition to the interests of DTI’s stockholders generally, as the ratification is intended to benefit all stockholders by eliminating uncertainty regarding DTI’s corporate governance.
Vote Required
Pursuant to Section 204(d)(4)(B) of the DGCL, the approval of the ratification of the election of a director requires the affirmative vote of a majority of shares present at the meeting, in person or represented by proxy, and entitled to vote on the election of such director. Accordingly, the approval of the Ratification Proposal requires the affirmative vote of the holders of a majority of the shares of DTI Common Stock present at the Special Meeting, in person or represented by proxy, and entitled to vote on the election of directors, excluding any putative stock.
Effect of Abstentions
An abstention will have the same effect as a vote “AGAINST” the Ratification Proposal because abstentions are counted as shares present and entitled to vote.
Effect of Broker Non-Votes
We do not expect any “broker non-votes” on the Ratification Proposal, but if any such votes were to be received, they would have the same effect as a vote “AGAINST” the Ratification Proposal because broker non-votes are counted as shares present and entitled to vote for purposes of this proposal.
Board Recommendation
The DTI Board has unanimously determined that the Ratification Proposal is advisable and in the best interests of DTI and its stockholders, and unanimously recommends that stockholders vote “FOR” the Ratification Proposal.
THE DTI BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION PROPOSAL.
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adjournment proposal
The Adjournment Proposal allows the DTI Board to submit a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation of proxies in the event, based on the tabulated votes, there are not sufficient votes at the time of the Special Meeting to approve the Share Issuance Proposal or the Ratification Proposal. In addition to an adjournment of the Special Meeting upon approval of the Adjournment Proposal, the DTI Board is empowered under the DGCL to postpone the Special Meeting at any time prior to the meeting being called to order. In such event, DTI will issue a press release and take such other steps as it believes are necessary and practical in the circumstances to inform its stockholders of the postponement.
Consequences if the Adjournment Proposal is not Approved.
If an Adjournment Proposal is presented to the Special Meeting and is not approved by the DTI stockholders, DTI may be unable to adjourn the Special Meeting by stockholder vote to a later date in the event that, based on the tabulated votes, there are not sufficient votes at the time of the Special Meeting to approve the Share Issuance Proposal or the Ratification Proposal. However, under DTI’s bylaws, the DTI Board and the chairperson of the Special Meeting each have independent authority to adjourn the Special Meeting from time to time, whether or not a quorum is present, without a vote of the DTI stockholders. The chairperson of the Special Meeting may also recess or adjourn the Special Meeting for any or no reason, subject to any rules adopted by the DTI Board. Accordingly, even if the Adjournment Proposal is not approved, the Special Meeting may still be adjourned to solicit additional proxies. If the Special Meeting is not adjourned and there are not sufficient votes to approve the Share Issuance Proposal or the Ratification Proposal, the Acquisition would not be completed.
Required Vote and Recommendation of the DTI Board.
Adoption of the Adjournment Proposal requires the affirmative vote of the holders of shares of DTI Common Stock representing a majority of the outstanding shares of DTI Common Stock present in person or represented by proxy at the Special Meeting and entitled to vote on the proposal, regardless of whether there is a quorum. Adoption of the Adjournment Proposal is not conditioned upon the adoption of the Share Issuance Proposal. Accordingly, a DTI stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting and broker non-votes with regard to the Adjournment Proposal will have no effect on such proposal. Abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal.
Recommendation of the DTI Board.
THE DTI BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE ADJOURNMENTPROPOSAL.
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THE ACQUISITION
The following is a description of certain material aspects of the Acquisition. This description may not contain all of the information that is important to you. DTI and the Group encourage you to carefully read this entire prospectus, including the SPA attached to this prospectus as Annex A, for a more complete understanding of the Acquisition.
Structure of the Acquisition
The SPA provides, among other matters, for a direct purchase by the Buyer of 100% of the issued and outstanding share capital of Saltire and Foxley from the Sellers.
The Consideration
The consideration payable to the Sellers pursuant to the SPA consists of a mix of (i) £60,289,856.60 in cash (approximately $81 million based on the exchange rate of $1.343 per £1.00 specified in the SPA) (the “Cash Consideration”) and (ii) unsecured loan notes to be issued by Buyer to the Sellers (other than the Trustee Seller) (the “Consideration Loan Notes”), which, pursuant to rollover loan note instruments and put and call option agreements among such Sellers, Buyer and certain subsidiaries of DTI (the “Rollover Documents”), will be exchanged at Closing for an aggregate of 17,355,139 shares of DTI common stock, par value $0.0001 per share (the “DTI Common Stock” and such shares, the “Equity Consideration” and together with the Cash Consideration, the “Consideration”). The Trustee Seller will receive its consideration entirely in cash. The number of shares to be issued is fixed and is not subject to adjustment based on changes in the market price of DTI Common Stock; only the Cash Consideration is subject to adjustment under the SPA.
Background of the Acquisition
The following chronology summarizes the key meetings and events that led to the signing of the SPA. The following chronology does not purport to catalogue every conversation among DTI, the Group, the Sellers, their advisors or any other person.
On October 31, 2025, DTI and Evercore entered into an engagement letter pursuant to which DTI engaged Evercore as its financial advisor in connection with the Acquisition.
On February 10, 2026, DTI delivered to the Sellers a non-binding letter of intent with respect to a potential acquisition of the Group for a combination of cash and shares of DTI Common Stock (the “Original LOI”).
On August 10, 2026, Jameson Parker, DTI’s Vice President of Corporate Development, informed representatives of Evercore, DTI’s financial advisor, and Winston Taylor LLP (“Winston Taylor”), DTI’s legal counsel, that DTI had approved the submission of a revised letter of intent to the Sellers that would increase the cash consideration by £5.1 million and fix the number of shares of DTI Common Stock to be issued.
On August 11, 2026, Winston Taylor circulated a draft amendment to the Original LOI providing for consideration of £60 million in cash and a fixed 17,355,139 shares of DTI Common Stock, based on an exchange rate of $1.343 per £1.00.
On August 18, 2026, representatives of DTI and Winston Taylor met to review the transaction timeline and workstreams, including a targeted signing of the SPA in mid- to late September 2026, a meeting of DTI stockholders in late November or early December 2026 and a Closing in early January 2027. At that meeting, DTI management also reported that it had begun discussions regarding warranty and indemnity insurance.
During late August 2026, DTI and its advisors finalized an initial draft of the SPA for delivery to Pinsent Masons LLP (“Pinsent Masons”), legal counsel to the Sellers, and continued their due diligence review of the Group, including financial, tax, legal and real estate due diligence with the assistance of Grant Thornton Advisors LLC, KPMG LLP and local counsel in the United Kingdom, Scotland, Malaysia, Singapore, Romania and the United Arab Emirates. By August 31, 2026, the Sellers had delivered responses to DTI’s due diligence request list.
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On September 7, 2026, representatives of Winston Taylor and Pinsent Masons met to negotiate the SPA, including the financing condition, the mechanics for obtaining the Parent Stockholder Approval, the definition of Material Adverse Effect, the timing and scope of the W&I Policy and the locked-box provisions. During that meeting, Pinsent Masons indicated that the Sellers should not bear an expense reimbursement obligation if the Acquisition failed to close solely because the Financing or the Parent Stockholder Approval was not obtained. Over the following weeks, the parties continued to negotiate the Material Adverse Effect definition, with the Sellers proposing objective, financial-based triggers and an independent expert dispute resolution mechanism, and DTI seeking broader protection.
On September 8, 2026, Winston Taylor summarized for DTI the Sellers’ principal positions on the SPA. The Sellers sought to have the W&I Policy bound at signing, to limit the repetition of warranties at the Closing to the Fundamental Warranties, to eliminate Buyer’s right to terminate for interim warranty breaches, to add a buyer-knowledge exclusion and to treat the contents of the data room as disclosed against the warranties. DTI sought to retain meaningful interim protections and to require specific disclosure against individual warranties, and Winston Taylor recommended consulting DTI’s insurance broker before responding.
On September 16, 2026, Winston Taylor informed Pinsent Masons that DTI’s broker, Miller Insurance Services LLP (“Miller”), had confirmed that the W&I Policy could be bound at the Closing but would not then cover interim breaches, and proposed that the Sellers either stand behind that exposure or share the cost of separate interim coverage. Winston Taylor also noted that enhancements removing the data room and due diligence reports from general disclosure were available for an additional premium to be shared equally, provided Miller’s indicative terms from three insurers and proposed that the Material Adverse Effect definition combine quantitative benchmarks with a qualitative standard.
On September 20, 2026, Winston Taylor delivered to DTI a revised draft of the SPA reflecting the negotiations to date, including a locked-box purchase price mechanism by reference to a June 30, 2026 balance sheet, a profit ticker adjustment, an indemnification structure based on the W&I Policy, a Material Adverse Effect termination process involving an independent expert, an Outside Date of March 31, 2027 and expense reimbursement capped at £1,500,000.
On September 28, 2026, representatives of DTI, the Sellers and their respective advisors held an all-hands call, during which the parties discussed, among other things, refining the Material Adverse Effect definition by reference to measurable financial outcomes, confirmed the expectation that the W&I Policy would be bound at signing and noted the conclusion that no material regulatory filings were expected to be required in connection with the Acquisition.
On September 29, 2026, Pinsent Masons delivered a revised draft of the SPA reflecting the Sellers’ comments. Among other things, the draft limited the Material Adverse Effect definition to specified thresholds relating to the Group’s EBITDA, net assets and third-party claims, provided that the Group’s and the Sellers’ warranties would be given only at signing (with only the Fundamental Warranties repeated at the Closing), added a condition requiring tax clearance from His Majesty’s Revenue and Customs, deleted the condition that the W&I Policy be in force at the Closing on the basis that it would be bound at signing, retained the financing condition by reference to the Agreed Financing Terms and requested demand and shelf registration rights for the Sellers.
On September 30, 2026, the parties discussed a proposed cap of approximately £2.5 million on the Sellers’ liability for certain specific tax matters and the status of the Financing, including term sheets for contemplated financing and new debt capital structures as well as a new asset-based lending facility.
On October 1, 2026, Winston Taylor circulated revised drafts of the SPA and the disclosure letter. Around this time, the parties agreed that Casing Technologies Group Limited would act as Buyer, and the Sellers’ tax advisors confirmed that the requested clearance from His Majesty’s Revenue and Customs had been received. During an all-hands call on October 2, 2026, the parties negotiated the terms of the Lock-up and Investor Rights Agreement and reached preliminary agreement on information rights, a 12-month election window for the Sellers’ board designation and observer rights, and the removal of certain transfer restrictions. During that call, the Sellers also informed DTI of a potential restructuring of their ownership for tax and estate planning purposes.
On October 2, 2026, the DTI Board discussed the Acquisition and management provided a presentation regarding the financial forecasts for DTI and the Group.
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On October 3, 2026, Evercore submitted to the DTI Board a customary relationship disclosure letter.
On October 5, 2026, the DTI Board met with representatives of DTI management, Evercore and Winston Taylor to review the terms of the SPA. At that meeting, representatives of Evercore presented their financial analysis and rendered Evercore’s oral opinion that, as of such date and based upon and subject to the various assumptions, qualifications, and limitations set forth in Evercore’s written opinion, the consideration (consisting of DTI Common Stock and £60,000,000.00 in cash) to be paid to the Sellers in the Acquisition was fair, from a financial point of view, to DTI. Following discussion, the DTI Board approved the SPA and the Acquisition. Evercore subsequently confirmed its oral opinion by delivery of a written opinion, dated October 8, 2026 that, as of such date and based upon and subject to the various assumptions, qualifications, and limitations set forth therein, the Consideration to be paid to the Sellers in the Acquisition was fair, from a financial point of view, to DTI.
On October 5, 2026, Winston Taylor reviewed with DTI a further revised draft of the SPA received from Pinsent Masons, which, among other things, replaced the agreed deemed value of the share consideration with a fixed share count and exchange rate, fixed the profit ticker at £23,354 per day from July 1, 2026, and added a proposed Buyer warranty confirming no awareness of facts that could support a warranty or W&I Policy claim, which Winston Taylor recommended that DTI reject. The Sellers also confirmed their position that the tax clearance condition be retained.
On October 5, 2026, the parties discussed remaining open items, including the W&I Policy, the rollover documentation and the Material Adverse Effect definition, and agreed on January 5, 2027 as the targeted date for the Closing. On October 6, 2026, following receipt of comments from Pinsent Masons, Winston Taylor delivered to DTI a revised draft of the SPA that, among other things, (i) restructured the share consideration as loan notes to be exchanged for DTI Common Stock at the Closing, (ii) added The Loggie Family Trust as an additional Seller, (iii) reinstated the Sellers’ tax clearance closing condition and (iv) provided for financing discussions and a related Seller Representative termination right if the Financing had not been obtained by November 30, 2026.
On October 7, 2026, representatives of DTI, the Sellers and their respective advisors held a final all-hands call, at which the parties agreed that no material commercial issues remained and that the remaining work related to drafting refinements, the disclosure letter and execution logistics.
Following the October 7 call, the parties finalized the SPA. As executed, the SPA (i) defines Material Adverse Effect as an event that both (A) would have result in Buyer not entering into the SPA had it been known before signing and (B) results in the Group’s EBITDA in any forward-looking 12-month period during the 36 months after signing being, or being reasonably expected to be, less than £12,000,000, its consolidated net assets falling below £85,300,000 or third-party claims of £15,000,000 or more, in each case excluding the effects of, among other things, general economic, political, and industry conditions (including armed conflict), announcement of the transaction, changes in law or accounting standards, natural disasters, and any failure, in and of itself, to meet projections, (ii) provides that the Commercial Warranties are given only at signing, with inaccuracies disregarded for purposes of the closing conditions unless they would reasonably be expected to have a Material Adverse Effect, (iii) limits the Sellers’ liability for warranty and insured tax claims to £1 and for specified excluded tax claims to £2,500,000, (iv) provides for cash consideration of £60,289,856.60, subject to adjustment, and (v) allocates the consideration among the Sellers by percentage.
On October 8, 2026, DTI, Buyer, the Group, the Sellers and the Seller Representative executed the SPA, and the Sellers executed the Lock-up and Investor Rights Agreement. On the same date, the W&I Policy was issued to Buyer.
Forecasts
Certain Unaudited Prospective Financial Information
DTI does not ordinarily publish long-term forecasts or projections of its future financial performance, revenues, earnings or other results because the underlying assumptions and estimates are inherently uncertain, and DTI is particularly cautious about forecasts covering extended periods. In connection with the DTI Board’s evaluation of the Acquisition, however, DTI management prepared certain unaudited prospective financial information for DTI on a standalone basis for the fiscal years ending December 31, 2026 through December 31, 2030 (the “DTI Forecasts”) and for the Group for the same periods (the “Group Forecasts” and, together with the
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DTI Forecasts, the “Forecasts”). The Forecasts were prepared in or around September 2026. DTI management prepared the Group Forecasts with the input of the Group’s management, using historical financial information and other information provided by the Group’s management during DTI’s due diligence review, together with DTI management’s own estimates and judgments. The Group’s management did not approve the Group Forecasts, and none of the Group, the Sellers, or their respective representatives has adopted the Group Forecasts or makes any representation as to their accuracy. DTI management presented the Forecasts to, and the DTI Board reviewed and discussed the Forecasts at its October 2, 2026 meeting and considered the Forecasts in connection with its evaluation of the Acquisition. The Forecasts were also provided to Evercore, DTI’s financial advisor, and approved by DTI management for Evercore’s use and reliance in connection with its financial analyses and the opinion described under “— Opinion of DTI’s Financial Advisor.” DTI has included a summary of the Forecasts in this proxy statement/prospectus, because the Forecasts were made available to the DTI Board and Evercore in connection with the Acquisition. The inclusion of this summary is not intended to influence any DTI stockholder’s decision whether to vote for the Share Issuance Proposal or any other proposal.
The Forecasts were prepared by, and are the responsibility of, DTI management. The Forecasts were not prepared with a view toward public disclosure or toward complying with GAAP, UK GAAP, the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. None of DTI’s independent registered public accounting firm, the Group’s independent auditors or any other independent accountants has audited, reviewed, compiled, examined or performed any procedures with respect to the Forecasts, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and they assume no responsibility for, and disclaim any association with, the Forecasts. The reports of the independent accountants included or incorporated by reference in this proxy statement/prospectus relate to historical financial information only, do not extend to the Forecasts and should not be read to do so.
The Forecasts constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and reflect numerous estimates and assumptions made by DTI management as of the date they were prepared with respect to general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to the businesses of DTI and the Group, all of which are difficult to predict and many of which are beyond DTI’s and the Group’s control. Important factors that may affect actual results and cause the Forecasts not to be achieved include, among others, the level of drilling and capital spending activity in the oil and gas industry, rig counts and commodity prices, geopolitical conditions in the Middle East and political and fiscal conditions affecting activity in the United Kingdom North Sea, demand for and utilization and pricing of DTI’s and the Group’s rental tools and services, the loss of or changes to material customer contracts (including as a result of change of control provisions triggered by the Acquisition), competition, cost inflation (including an increase in health insurance premiums) and supply chain conditions, fluctuations in the exchange rate between the British pound sterling and the U.S. dollar, changes in tax rates and laws, interest rates and access to capital, and the other risks described in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.” The Forecasts also reflect assumptions as to certain business decisions that are subject to change. Because the Forecasts cover multiple years, such information by its nature becomes less predictive with each successive year. Accordingly, there can be no assurance that the Forecasts will be realized, and actual results may differ materially from those reflected in the Forecasts.
Material Assumptions
In preparing the DTI Forecasts, DTI management assumed, among other things, (i) approximately 24 additional active U.S. drilling rigs; (ii) annual price increases of approximately 3%; (iii) improving activity in the Middle East beginning in 2028 and in the United Kingdom beginning in 2029; (iv) generally flat gross margins and EBITDA Margins through 2030, notwithstanding an increased fixed cost base and increasing health insurance premiums; (v) annual capital expenditures of approximately $25 million for maintenance and modest growth; (vi) that the DTI Forecasts for 2026 are generally consistent with DTI’s current internal forecast for 2026; and (vii) for 2027 and subsequent years, no revenue from DTI’s RotoSteer product line. The DTI Forecasts reflect DTI becoming debt-free in 2029. DTI management characterized these growth assumptions as conservative.
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The DTI Forecasts for 2026 reflect revenue of $160 million and EBITDA of $37 million, each within DTI’s publicly announced full-year 2026 guidance ranges of $155 million to $170 million of revenue and $35 million to $45 million of Adjusted EBITDA as of August 6, 2026. EBITDA as defined for purposes of the Forecasts is calculated differently from Adjusted EBITDA as presented in DTI’s public guidance and periodic reports and is not directly comparable.
The DTI Forecasts were prepared on a standalone basis, and the Group Forecasts were prepared on a standalone basis, in each case without giving effect to the Acquisition, including any revenue or cost synergies, commercial pull-through, transaction expenses, purchase accounting adjustments, the incurrence of indebtedness to fund the Cash Consideration, the issuance of the Equity Consideration or any changes to DTI’s or the Group’s operations or strategy that may be implemented following the Closing. In addition, the Forecasts do not take into account any circumstances or events occurring after the date they were prepared, including the execution of the SPA on October 8, 2026.
The inclusion of the Forecasts in this proxy statement/prospectus should not be regarded as an indication that DTI, the DTI Board, Evercore, the Group, the Sellers or any of their respective affiliates, officers, directors, advisors or other representatives considered or now considers the Forecasts to be necessarily predictive of actual future events, and the Forecasts should not be relied upon as such. None of DTI, the Group or any of their respective affiliates, officers, directors, advisors or other representatives has made or makes any representation to any DTI stockholder or other person regarding the ultimate performance of DTI or the Group compared to the information contained in the Forecasts, and none of them intends to, and each of them expressly disclaims any obligation to, update or otherwise revise the Forecasts. DTI will not refer back to the Forecasts in its future periodic reports filed under the Exchange Act. The Forecasts should not be viewed as public guidance, and DTI stockholders are cautioned not to place undue reliance on the Forecasts. In light of the foregoing factors and the uncertainties inherent in the Forecasts, DTI stockholders should read the Forecasts together with the historical financial statements and other information regarding DTI and the Group included or incorporated by reference in this proxy statement/prospectus.
Use of Non-GAAP Financial Measures
The Forecasts include EBITDA, EBITDA Margin, EBIT, NOPAT, Unlevered Cash Flow and Unlevered Operating Cash Flow, which are financial measures not calculated in accordance with GAAP (“non-GAAP financial measures”). For purposes of the Forecasts: “EBITDA” means revenue less cost of sales and operating, selling, general and administrative expenses, before interest, taxes, depreciation and amortization; “EBITDA Margin” means EBITDA divided by revenue; “EBIT” means EBITDA less depreciation and amortization; “NOPAT” means EBIT less taxes; and “Unlevered Cash Flow” means NOPAT plus depreciation and amortization, less changes in net working capital and less capital expenditures. For purposes of the Forecasts, “Unlevered Operating Cash Flow” means EBITDA less taxes and less changes in net working capital (or, equivalently, Unlevered Cash Flow before capital expenditures), and is calculated before interest expense. Unlevered Operating Cash Flow is not calculated in accordance with GAAP and differs from, and should not be considered a substitute for, net cash provided by operating activities as presented in the statements of cash flows of DTI or the Group. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP, and non-GAAP financial measures as used by DTI may not be comparable to similarly titled measures used by other companies, including Adjusted EBITDA and Adjusted Free Cash Flow as presented by DTI in its public disclosures. Financial measures included in forecasts provided to a financial advisor in connection with a business combination transaction are excluded from the definition of non-GAAP financial measures under applicable SEC rules and, therefore, are not subject to SEC rules regarding disclosures of non-GAAP financial measures that would otherwise require a reconciliation to the most directly comparable GAAP financial measure. Reconciliations of the non-GAAP financial measures in the Forecasts were not provided to or relied upon by the DTI Board or Evercore. Accordingly, no reconciliation of the non-GAAP financial measures included in the Forecasts is provided in this proxy statement/prospectus.
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DTI Forecasts
The following table presents a summary of the DTI Forecasts (in millions of U.S. dollars, except percentages):
|
Line item |
2026E |
2027E |
2028E |
2029E |
2030E |
||||||||||
|
Revenue |
$ |
160 |
$ |
174 |
$ |
186 |
$ |
192 |
$ |
196 |
|||||
|
EBITDA(1) |
$ |
37 |
$ |
46 |
$ |
51 |
$ |
53 |
$ |
55 |
|||||
|
NOPAT(1) |
$ |
9 |
$ |
14 |
$ |
18 |
$ |
20 |
$ |
21 |
|||||
|
Unlevered Cash Flow(1) |
$ |
3 |
$ |
14 |
$ |
19 |
$ |
22 |
$ |
24 |
|||||
____________
(1) Non-GAAP financial measure. See “— Use of Non-GAAP Financial Measures” above. Amounts may not sum due to rounding.
Group Forecasts
The following table presents a summary of the Group Forecasts (in millions of U.S. dollars, except percentages). The Group Forecasts were prepared in British pounds sterling and converted into U.S. dollars at an exchange rate of $1.343 per £1.00 specified in the SPA and used to determine the number of shares comprising the Equity Consideration and to convert the Cash Consideration. The Group Forecasts assume (i) a return of the Group’s business to a normal run rate in 2027, with growth from 2027 through 2030, (ii) that the Group’s tubular facility is budgeted separately as a part of the Group’s Africa region, (iii) no synergies or pull-through of the Group’s products into DTI’s customer relationships, and (iv) an effective tax rate of 25%, which DTI management viewed as a conservative assumption. Depreciation and amortization were not separately forecast for the Group, and changes in net working capital reflect an assumption of net working capital equal to 20.0% of revenue.
|
Line item |
2026E |
2027E |
2028E |
2029E |
2030E |
||||||||||
|
Revenue |
$ |
50 |
$ |
56 |
$ |
62 |
$ |
65 |
$ |
67 |
|||||
|
EBITDA(1) |
$ |
22 |
$ |
28 |
$ |
31 |
$ |
33 |
$ |
33 |
|||||
|
NOPAT(1) |
$ |
13 |
$ |
17 |
$ |
19 |
$ |
20 |
$ |
20 |
|||||
|
Unlevered Cash Flow(1) |
$ |
13 |
$ |
14 |
$ |
16 |
$ |
17 |
$ |
17 |
|||||
____________
(1) Non-GAAP financial measure. See “— Use of Non-GAAP Financial Measures” above. Because depreciation and amortization were not separately forecast for the Group, EBIT is equal to EBITDA in the Group Forecasts, and taxes and NOPAT in the Group Forecasts are therefore calculated on EBITDA. Amounts may not sum due to rounding.
The Forecasts were prepared prior to the execution of the SPA. Under the SPA as executed on October 8, 2026, the Closing Date Cash Consideration is £60,289,856.60, subject to adjustment as described under “The Share Purchase Agreement.”
EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAWS, BY INCLUDING IN THIS PROXY STATEMENT/PROSPECTUS A SUMMARY OF THE FORECASTS, NEITHER DTI NOR THE GROUP UNDERTAKES ANY OBLIGATION, AND EACH EXPRESSLY DISCLAIMS ANY RESPONSIBILITY, TO UPDATE OR REVISE, OR PUBLICLY DISCLOSE ANY UPDATE OR REVISION TO, THE FORECASTS TO REFLECT CIRCUMSTANCES OR EVENTS, INCLUDING UNANTICIPATED EVENTS, THAT MAY HAVE OCCURRED OR THAT MAY OCCUR AFTER THE PREPARATION OF THE FORECASTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FORECASTS ARE SHOWN TO BE IN ERROR OR CHANGE. DTI WILL, HOWEVER, CONSIDER WHETHER ADDITIONAL DISCLOSURE IS REQUIRED IF IT BECOMES AWARE THAT THE FORECASTS HAVE BECOME MATERIALLY MISLEADING PRIOR TO THE SPECIAL MEETING. DTI STOCKHOLDERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE FORECASTS.
DTI Board’s Reasons for the Acquisition
In evaluating the Acquisition, the DTI Board reviewed and approved the Acquisition and the SPA. The DTI Board, in consultation with DTI’s financial and legal advisors received certain materials for review and consideration prior to the execution of the SPA.
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After due consideration and consultation with its financial and legal advisors, at a meeting held on October 5, 2026, the DTI Board (i) determined that the transactions contemplated by the SPA and the Acquisition Documents were advisable and in the best interests of DTI and its stockholders, and (ii) approved the Acquisition, including the SPA and the Acquisition Documents, upon the terms and subject to the conditions set forth therein.
In reaching its decision to approve the Acquisition, the DTI Board considered a variety of factors, including, but not limited to, the strategic rationale, contemplated transaction benefits, knowledge of the Group’s business, operations, financial condition, results of operations and prospects, as well as the risks in achieving those prospects, including uncertainties associated with achieving financial forecasts. The DTI Board also considered a variety of other factors, including, among others, the significant factors listed below in support of the decision (which are not necessarily described in any order of relative importance):
• Strategy: the belief that the addition of the Group’s products and services to DTI’s platform will have a positive strategic impact on customers and increase DTI’s ability to serve growing global demand through a one-stop-shop platform, expand its Eastern Hemisphere presence, and capitalize on increasing global rig count activity and energy security trends;
• Scale and Diversification: the Acquisition will expand DTI’s combined rental tool fleet from approximately 63,000 to over 100,000 tools, increase international revenue exposure with Eastern Hemisphere revenue growing to approximately 40% of pro forma revenue, and broaden DTI’s customer relationships across wider markets with limited customer overlap;
• Financial Enhancement: the transaction is expected to be accretive to DTI’s Adjusted EBITDA margins and Adjusted Free Cash Flow per share in the first year following the Closing, without assuming cost synergies, with the combined company’s strengthened cash flow generation supporting a deleveraging path to a target net leverage ratio of approximately 1.0x within 24 months of closing from an estimated net leverage ratio of approximately 2.2x at closing (in each case, net debt to trailing twelve-month Adjusted EBITDA); and
• Seller Alignment: the fact that the Loggie family, will hold an approximately 33% pro forma ownership stake in the combined company, subject to staggered lock-up restrictions, reflecting a shared conviction that the businesses are stronger together and that meaningful value creation remains ahead.
• Opinion of DTI’s Financial Advisor: The oral opinion of Evercore rendered to the DTI Board on October 5, 2026, that, as of such date and based upon and subject to the various assumptions, qualifications, and limitations set forth in its written opinion, the consideration (consisting of DTI Common Stock and £60,000,000.00 in cash) to be paid to the Sellers in the Acquisition was fair, from a financial point of view, to DTI. Evercore subsequently confirmed its oral opinion by delivery of a written opinion, dated October 8, 2026 that, as of such date and based upon and subject to the various assumptions, qualifications, and limitations set forth therein, the Consideration to be paid to the Sellers in the Acquisition was fair, from a financial point of view, to DTI, as more fully described below in the section entitled “— Opinion of DTI’s Financial Advisor” beginning on page 54 and the full text of the written opinion of Evercore attached as Annex B to this proxy statement/prospectus.
The DTI Board also considered a number of countervailing uncertainties and risks in its deliberations concerning the Acquisition, including, but not limited to, the following (which are not necessarily described in any order of relative importance):
• Risks of Failure to Complete the Acquisition: the possibility that the Acquisition may not be completed or may be unduly delayed despite the parties’ efforts, including the possibility that the conditions to the parties’ obligations to complete the Acquisition (which include certain conditions that are not within the control of DTI and/or the Group) may not be satisfied, and any resulting adverse impacts on DTI or its business;
• Risks Relating to Regulatory Approvals: the potential length of the regulatory review process and the risk that applicable governmental entities may impose terms and conditions on DTI and/or the Group that are unexpected or could jeopardize or delay the completion of, or reduce or delay the anticipated benefits of, the Acquisition, as more fully described in the section entitled “The Acquisition — Regulatory Approvals” beginning on page 52 of this prospectus;
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• Risks Relating to Termination: the circumstances under which the SPA could be terminated and the impact of any such termination;
• Risks Relating to Integration: the inherent difficulties, as well as unanticipated complexities, costs, burdens or compliance requirements (including new or heightened existing vulnerabilities) that may arise, in integrating or maintaining the businesses, operations and employees of the Group with those of DTI, including the possible challenges of blending separate corporate cultures, harmonizing compensation policies and the potential loss of key personnel, customers, suppliers and business partners of the Group prior to and following the Acquisition;
• Risks Relating to the Benefits of the Acquisition: the risk that the expected benefits of the Acquisition (including anticipated cost savings, synergies and enhanced revenue opportunities) may be more difficult to realize or may take longer to achieve than anticipated;
• Impact on Existing Relationships: the potential for diversion of management attention and internal resources during the Interim Period, and the possible effect of the Acquisition on DTI’s existing business and relations with customers, suppliers and strategic partners;
• Stock Price: the potential for adverse effects on the market price of DTI Common Stock and DTI’s operating results or financial condition due to any failure to consummate the Acquisition, or the impact of potential large sales of DTI Common Stock into the market following the release of the Equity Consideration from the staggered lock-up under the Lock-up and Investor Rights Agreement;
• Dilution: the impact of the issuance of shares of DTI Common Stock as part of the Consideration payable to the Sellers, which may cause existing DTI stockholders to experience dilution of their ownership interests and have the effect of depressing the market price of DTI Common Stock, through dilution of earnings per share or otherwise; and
• Other Risks: various other risks and uncertainties associated with the Acquisition and the businesses of DTI, the Group and the combined company following the completion of the Acquisition described in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 13 and 28, respectively, of this prospectus.
The DTI Board determined that the anticipated benefits expected to be achieved for DTI and its stockholders as a result of the Acquisition outweighed these potential risks and uncertainties. The DTI Board recognized that there can be no assurance of future results, including results considered or expected as disclosed in this section of the prospectus. Ultimately, the DTI Board determined that the Acquisition was in the best interests of DTI and its stockholders.
The foregoing discussion of the factors considered by the DTI Board in its assessment of the SPA and the Acquisition is not intended to be exhaustive but rather includes certain illustrative material factors considered by the DTI Board. In light of the wide variety of factors considered by the DTI Board in connection with its evaluation of the SPA and the Acquisition and the complexity of these matters in reaching its decision to approve the Acquisition, the DTI Board did not quantify or assign relative weights to the specific factors considered. The DTI Board based its position on the information available to it and the factors presented to and considered by it. However, some individual directors may have given different weight to different factors and/or considered other factors altogether. After considering the applicable factors as a whole within the context of the Acquisition, including through thorough discussions with DTI’s financial and legal advisors, the DTI Board overall considered such factors to be favorable to, and to support, its determination.
This discussion of the DTI Board’s reasons for the Acquisition is forward-looking in nature and involves risks and uncertainties that could result in the expectations contained in such forward-looking statements not to occur. Therefore, this should be read in conjunction with those factors discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 13 and 28, respectively, of this prospectus.
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The Group’s Reasons for the Acquisition
In evaluating and ultimately approving the Acquisition, the Group’s shareholders, in consultation with the Group’s financial and legal advisors, engaged in numerous discussions regarding the Acquisition, held meetings, received materials for their review and consideration, and considered a variety of factors, including, among others, the significant factors listed below in support of the decision (which are not necessarily described in any order of relative importance):
• Economic Value: the fact that the consideration proposed by DTI reflected extensive negotiations between the parties and their respective advisors, and the Group’s belief that the agreed consideration represented the best proposal and economic value available to the Group Stockholders, based upon an overall assessment of the net present value of the risk-adjusted returns that are likely to accrue to the Group Stockholders;
• The Group’s Valuation: the value of the consideration;
• Stockholder Liquidity: the fact that the cash component of the consideration offers the Group Stockholders an opportunity to realize immediate value upon the Closing for a portion of their investment and provides a level of price certainty, liquidity and downside protection for such portion;
• Potential Stockholder Upside: the fact that the DTI Common Stock component of the consideration offers the Group Stockholders an opportunity to participate in future potential upside in DTI Common Stock following the Acquisition, subject to the lock-up restrictions described in the section entitled “The Share Purchase Agreement” beginning on page 62 of this prospectus;
• Greater Growth Opportunities: the opportunity to offer the Group’s products to a large installed base of qualified customers at DTI and grow and expand its reach faster than would be possible as an independent company;
• Other Courses of Action: the expectation that the Acquisition will result in greater stockholder value than engaging in other potential courses of action available to the Group, including seeking an alternative transaction with another third party, remaining independent private companies, pursuing additional capital through sales of the Group Capital Stock in a private transaction or an initial public offering, or through debt financing, in each case, considering the potential for the Group Stockholders to share in any future earnings growth of the Group’s business and the overall assessment of the net present value of the risk-adjusted returns that are likely to accrue to the Group Stockholders;
• Understanding of the Group’s Business: the Group’s Management’s familiarity with, and understanding of, the Group’s business, assets, financial condition, results of operations, current business strategy, competitive position, prospects and the risks facing the Group;
• Financial and Legal Advice: the financial advice provided by Piper Sandler, which included a review of the key economic terms of various other analogous transactions, as well as the review by the Group with its legal and financial advisors of the structure of the Acquisition and the financial and other terms of the SPA and related documents; and
• Terms and Conditions: the terms of the SPA as described in the section entitled “The Share Purchase Agreement” beginning on page 62 of this prospectus, including the customary nature of the warranties and covenants of the Group, the customary nature of the closing conditions to the Acquisition, and the limited nature of post-closing exposure of the Group Stockholders for indemnification or other liabilities in light of Buyer obtaining warranty and indemnity insurance.
In the course of its deliberations, the Group’s shareholders also considered a variety of risks and other potentially negative factors, including, but not limited to, the following (which are not necessarily described in any order of relative importance):
• Risks of Failure to Complete the Acquisition: the possibility that the Acquisition may not be completed or that completion may be unduly delayed for reasons beyond the control of the Group or DTI, including the potential length of the regulatory review process and the risk that applicable antitrust and competition authorities may prohibit or enjoin the Acquisition or otherwise impose conditions on the Group and/or DTI in order to obtain clearance for the Acquisition;
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• Stock Price: the fact that the SPA provides for a purchase price calculated by reference to the Locked Box Accounts as of June 30, 2026, indicating that the Group Stockholders could be adversely affected by a decrease in the trading price of DTI Common Stock during the Interim Period;
• Impact on Existing Relationships: the potential for diversion of management and employee attention and for increased employee attrition during the Interim Period, and the potential effect of the Acquisition on the Group’s business and relations with customers, suppliers and strategic partners;
• Risks Relating to the Interim Period: the restrictions on the conduct of the Group’s business during the Interim Period, requiring the Group to use its reasonable best efforts to conduct its business in the ordinary course consistent with past practice, subject to specific limitations, which could delay or prevent the Group from undertaking business opportunities that may arise pending completion of the Acquisition and could negatively impact the Group’s ability to attract and retain employees, customers, and strategic partners;
• Risks Relating to Acquisition Costs: the transaction costs and other related retention costs to be incurred in connection with the Acquisition, regardless of whether the Acquisition is completed;
• Risks Relating to Resources: the fact that if the Acquisition is not completed, the Group will have expended significant human and financial resources on a failed transaction; and
• Other Risks: various other risks associated with the Acquisition and the business of the Group described in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 13 and 28, respectively, of this prospectus.
Each member of the Group’s shareholders concluded that the potentially negative factors associated with the Acquisition were outweighed by the potential benefits that it expected the Group and the Group Stockholders to achieve as a result of entering into the Acquisition. Accordingly, the Group’s shareholders determined that the Acquisition was in the best interests of, and fair to, the Group and the Group Stockholders.
The foregoing discussion of the factors considered by the Group’s shareholders is not intended to be exhaustive, but, rather, includes certain illustrative material factors considered by the Group’s shareholders. In view of the wide variety of factors considered by the Group’s shareholders in connection with its evaluation of the Acquisition and the complexity of these matters, in reaching its decision to approve the Acquisition, the Group’s shareholders did not quantify or assign any relative weights to the factors considered, and individuals may have given different weights to different factors and/or considered other factors altogether. The Group’s shareholders considered each of the applicable factors as a whole in context of the Acquisition, including with the use of thorough discussions with, and questioning of, the Group’s financial and legal advisors, and overall considered such factors to be favorable to, and in support of, their determination. In considering the factors described above and any other factors, individuals may have viewed factors differently or given different weight or merit to different factors.
This discussion of the Group’s shareholders’ reasons for the Acquisition contains forward-looking statements and involves risks and uncertainties that could result in the expectations contained in such forward-looking statements not to occur. Therefore, this should be read in conjunction with those factors discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 13 and 28, respectively, of this prospectus.
Regulatory Approvals
The following sets forth a summary of the material regulatory requirements for the consummation of the Acquisition.
HSR Act
The Acquisition is not subject to the notification and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). Accordingly, neither DTI nor the Group is required to file a notification and report form with the Federal Trade Commission or the Antitrust Division of the U.S. Department of Justice in connection with the Acquisition, and no waiting period under the HSR Act is required to expire or be terminated prior to the consummation of the Acquisition.
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SEC and Other Filings
In connection with the Acquisition, the parties intend to make all required filings with the SEC, the Delaware Secretary of State and Nasdaq, as well as any required filings with foreign, state or local governmental authorities, as applicable.
Pursuant to the terms of the SPA, each of the parties agrees to use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Acquisition and to obtain satisfaction of the conditions precedent to the Acquisition.
There can be no assurances that all regulatory approvals will be obtained and, if obtained, there can be no assurances as to the timing of any such approvals. See the section entitled “The Share Purchase Agreement — Conditions to Closing” beginning on page 63 of this prospectus for a discussion of the conditions to the completion of the Acquisition.
DTI Stockholder Approval of Share Issuance
The issuance of 17,355,139 shares of DTI Common Stock requires the affirmative approval of DTI stockholders under Nasdaq Listing Rule 5635(a) because the issuance exceeds 20% of DTI’s outstanding common stock.
Group Approval
Prior to the execution of the SPA, the board of directors of each of Saltire and Foxley passed resolutions approving entry into the SPA, under which each of Saltire and Foxley provided warranties set forth in Article IV of the SPA relating to the Group. The trustees of the Cansco Limited Employee Trust 2007 (being a Seller) approved resolutions authorizing entry into the SPA and the other Acquisition Documents to which they are a party, as applicable. At the Closing, the board of directors of each of Saltire and Foxley will pass further resolutions approving the transfer of shares contemplated by the SPA and authorizing the company secretary and/or legal advisers of each Company to take all actions necessary to effect the Closing.
Tax Treatment of the Acquisition
The Acquisition is structured as a direct share purchase of the Group by Buyer and will be treated as a taxable acquisition for U.S. federal income tax purposes, pursuant to which Buyer will take a cost basis in the equity purchased from the Sellers under Section 1012 of the Internal Revenue Code of 1986, as amended (the “Code”). The Acquisition does not involve a merger, consolidation, or reorganization of DTI. DTI stockholders are not exchanging, converting, or otherwise disposing of their shares of DTI Common Stock in connection with the Acquisition. Accordingly, existing DTI stockholders will not recognize gain or loss and will not be required to include any amount of income, solely as a result of the issuance of the Equity Consideration shares to the Sellers. For a more detailed discussion, see the section entitled “U.S. Federal Income Tax Consequences of the SPA” beginning on page 66 of this prospectus.
ALL HOLDERS OF DTI COMMON STOCK ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE ACQUISITION, INCLUDING THE APPLICABILITY AND EFFECT OF ANY U.S. FEDERAL, STATE, LOCAL, NON-U.S. AND OTHER TAX LAWS.
Accounting Treatment of the Acquisition
DTI prepares its financial statements in accordance with GAAP. DTI expects to account for the Acquisition as a business combination using the acquisition method of accounting in accordance with Accounting Standards Codification Topic 805, “Business Combinations”. Under the acquisition method, the purchase price will be allocated to the assets acquired and liabilities assumed of the Group based on their estimated fair values as of the Closing Date, with the excess of the purchase price over the estimated fair value of the net assets acquired, if any, allocated to goodwill. If the estimated fair value of the net assets acquired exceeds the purchase price, the excess will be recognized as a gain on bargain purchase. The final allocation of the purchase price will be determined after the Closing based on a detailed valuation of the Group’s assets and liabilities.
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Opinion of DTI’s Financial Advisor
The Acquisition — Opinion of the Financial Advisor to the DTI Board
DTI retained Evercore to act as its financial advisor in connection with the DTI Board’s evaluation of strategic and financial alternatives with respect to the Acquisition. As part of this engagement, the DTI Board requested that Evercore evaluate the fairness of the Consideration to be paid to the Sellers in the Acquisition, from a financial point of view, to DTI. On October 5, 2026, Evercore rendered its oral opinion to the DTI Board that, as of such date and based upon and subject to the various assumptions, qualifications, and limitations set forth in its written opinion, the consideration (consisting of DTI Common Stock and £60,000,000.00 in cash) to be paid to the Sellers in the Acquisition was fair, from a financial point of view, to DTI. Evercore subsequently confirmed its oral opinion by delivery of a written opinion, dated October 8, 2026 that, as of such date and based upon and subject to the various assumptions, qualifications, and limitations set forth therein, the Consideration to be paid to the Sellers in the Acquisition was fair, from a financial point of view, to DTI.
The full text of the written opinion of Evercore, dated October 8, 2026, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex B and is incorporated herein by reference to this proxy statement/prospectus in its entirety. You are urged to read Evercore’s opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the DTI Board (solely in its capacity as such) in connection with its evaluation of the proposed Acquisition. The opinion does not constitute a recommendation to the DTI Board or to any other persons in respect of the Acquisition, including as to how any holder of shares of DTI Common Stock should vote or act in respect of the Acquisition. Evercore’s opinion does not address the relative merits of the Acquisition as compared to other business or financial strategies that might be available to DTI, nor does it address the underlying business decision of DTI to engage in the Acquisition.
In connection with rendering its opinion Evercore, among other things:
• reviewed certain publicly available business and financial information relating to the Group and DTI that Evercore deemed to be relevant, including publicly available research analysts’ estimates relating to DTI;
• reviewed certain internal projected financial data relating to the Group prepared and furnished to Evercore by management of DTI and certain internal projected financial data relating to DTI prepared and furnished to Evercore by management of DTI, each as approved for Evercore’s use by DTI (the “Forecasts”);
• discussed with managements of DTI and the Group their assessment of the past and current operations of the Group, the current financial condition and prospects of the Group and the Forecasts relating to the Group, and discussed with management of DTI their assessment of the past and current operations of DTI, the current financial condition and prospects of DTI, and the Forecasts;
• reviewed the reported prices and the historical trading activity of DTI Common Stock;
• compared the financial performance of the Group and DTI and DTI’s stock market trading multiples with those of certain other publicly traded companies that Evercore deemed relevant;
• compared the financial performance of the Group and the valuation multiples relating to the Acquisition with the financial terms, to the extent publicly available, of certain other transactions that Evercore deemed relevant;
• reviewed the financial terms and conditions of the Share Purchase Agreement; and
• performed such other analyses and examinations and considered such other factors that Evercore deemed appropriate.
For purposes of Evercore’s analysis and opinion, Evercore assumed and relied upon the accuracy and completeness of the financial and other information publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by Evercore, without any independent verification of
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such information (and Evercore did not assume responsibility or liability for any independent verification of such information), and further relied upon the assurances of the management of DTI that they are not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the Forecasts, Evercore assumed with the consent of the DTI Board that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of DTI as to the future financial performance of DTI and the Group and the other matters covered thereby. Evercore expressed no view as to the Forecasts or the assumptions on which they were based.
For purposes of Evercore’s analysis and opinion, Evercore assumed, in all respects material to its analysis that the representations and warranties of each party contained in the Share Purchase Agreement were true and correct, that each party would perform all of the covenants and agreements required to be performed by it under the Share Purchase Agreement and that all conditions to the consummation of the Acquisition would be satisfied without waiver or modification thereof. Evercore further assumed, in all respects material to its analysis, that all governmental, regulatory or other consents, approvals or releases necessary for the consummation of the Acquisition would be obtained without any delay, limitation, restriction or condition that would have an adverse effect on the Group, DTI or the consummation of the Acquisition or reduce the contemplated benefits to DTI of the Acquisition.
Evercore did not conduct a physical inspection of the properties or facilities of the Group or DTI and did not make or assume any responsibility for making any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or other off-balance sheet assets and liabilities) of the Group or DTI, nor was Evercore furnished with any such valuations or appraisals, nor did Evercore evaluate the solvency or fair value of the Group or DTI under any state or federal laws relating to bankruptcy, insolvency or similar matters. Evercore’s opinion was necessarily based upon information made available to Evercore as of October 8, 2026 and financial, economic, market and other conditions as they existed and as could be evaluated as of that date. Subsequent developments could affect Evercore’s opinion and Evercore did not and does not have any obligation to update, revise or reaffirm its opinion.
Evercore was not asked to pass upon, and expressed no opinion with respect to, any matter other than the fairness to DTI, from a financial point of view, of the Consideration. Evercore did not express any view on, and its opinion did not address, the fairness of the proposed transaction to, or any consideration received in connection therewith by, the holders of any class of securities, creditors or other constituencies of the Group, nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of DTI or the Group, or any class of such persons, whether relative to the Consideration or otherwise. Evercore was not asked to, nor did it express any view on, and its opinion did not address, any other term or aspect of the Share Purchase Agreement or the Acquisition, including, without limitation, the structure or form of the Acquisition, or any term or aspect of any other agreement or instrument contemplated by the Share Purchase Agreement or entered into or amended in connection with the Share Purchase Agreement, including the Rollover Documents. Evercore’s opinion did not address the relative merits of the Acquisition as compared to other business or financial strategies that might be available to DTI, nor does it address the underlying business decision of DTI to engage in the Acquisition. Evercore did not express any view on, and its opinion did not address, what the value of DTI Common Stock actually will be when issued or the prices at which DTI Common Stock will trade at any time, including following announcement or consummation of the Acquisition, as to the potential effects of volatility in the credit, financial and stock markets on DTI, the Group or the Acquisition or as to the impact of the Acquisition on the solvency or viability of DTI or the Group or the ability of DTI or the Group to pay their respective obligations when they come due. Evercore’s opinion did not constitute a recommendation to the DTI Board or to any other persons in respect of the Acquisition, including as to how any holder of shares of DTI Common Stock should vote or act in respect of the Acquisition. Evercore is not a legal, regulatory, accounting or tax expert and assumed the accuracy and completeness of assessments by DTI and its advisors with respect to legal, regulatory, accounting and tax matters.
Set forth below is a summary of the material financial analyses reviewed by Evercore with the DTI Board on October 5, 2026, in connection with rendering its opinion. The following summary, however, does not purport to be a complete description of the analyses performed by Evercore. The order of the analyses described and the results of these analyses do not represent relative importance or weight given to these analyses by Evercore. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data that existed on or before October 1, 2026, and is not necessarily indicative of current market conditions.
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For purposes of its analyses and reviews, Evercore considered general business, economic, market and financial conditions, industry sector performance, and other matters, as they existed and could be evaluated as of the date of its opinion, many of which are beyond the control of DTI and the Group. The estimates contained in Evercore’s analyses and reviews, and the ranges of valuations resulting from any particular analysis or review, are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by Evercore’s analyses and reviews. In addition, analyses and reviews relating to the value of companies, businesses or securities do not purport to be appraisals or to reflect the prices at which companies, businesses or securities actually may be sold. Accordingly, the estimates used in, and the results derived from, Evercore’s analyses and reviews are inherently subject to substantial uncertainty.
The following summary of Evercore’s financial analyses includes information presented in tabular format. In order to fully understand the analyses, the tables should be read together with the full text of each summary. The tables are not intended to stand alone and alone do not constitute a complete description of Evercore’s financial analyses. Considering the tables below without considering the full narrative description of Evercore’s financial analyses, including the methodologies and assumptions underlying such analyses, could create a misleading or incomplete view of such analyses.
Summary of Evercore’s Financial Analyses
Discounted Cash Flow Analysis
The Group
Evercore performed a discounted cash flow analysis of the Group to calculate ranges of implied present values of the enterprise value of the Group utilizing estimates of the standalone unlevered, after-tax free cash flows that the Group were forecasted to generate over the period from July 1, 2026, through December 31, 2030, based on the Forecasts. Evercore calculated terminal values for the Group using two methods: (i) an exit multiple method — under which Evercore calculated terminal values for the Group by applying a range of total enterprise values (which is referred to as “TEV”) to the last twelve months (which is referred to as “LTM”) earnings before interest, taxes, depreciation and amortization (which is referred to as “EBITDA”) multiples of 3.5x to 5.5x, which range was selected based on Evercore’s professional judgment and experience, to an estimate of the Group’s 2030 EBITDA based on the Forecasts and (ii) a perpetuity growth method — under which Evercore calculated terminal values for the Group by applying a range of perpetuity growth rates of 1.0% to 3.0%, which range was selected based on Evercore’s professional judgment and experience, to an estimate of the unlevered, after-tax free cash flows that the Group were forecasted to generate in the terminal year based on the Forecasts.
The cash flows and terminal values in each case were then discounted to present value as of June 30, 2026 using discount rates ranging from 14.0% to 16.0%, representing an estimate of the Group’s weighted average cost of capital, as estimated by Evercore based on its professional judgment and experience, to derive implied enterprise value reference ranges for the Group. This analysis indicated ranges of implied enterprise values of the Group as set forth in the table below, as compared to an implied value of the Consideration of $124.4 million, based on 17,355,139 shares of DTI Common Stock having a deemed value of approximately $43.5 million, calculated using the 20-day volume weighted average price of the DTI Common Stock of $2.50 per share on October 1, 2026 (the “$2.50 DTI Common Stock 20-day VWAP”):
|
Methodology |
Implied |
|
|
Exit Multiple Method |
$110 – $154 |
|
|
Perpetuity Growth Rate Method |
$111 – $143 |
DTI
Evercore performed a discounted cash flow analysis of DTI to calculate ranges of implied present values of the per share equity value of DTI utilizing estimates of the standalone unlevered, after-tax free cash flows that DTI was forecasted to generate over the period from July 1, 2026, through December 31, 2030, based on the Forecasts. Evercore calculated terminal values for DTI using two methods: (i) an exit multiple method — under which Evercore
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calculated terminal values for DTI by applying a range of TEV to the LTM EBITDA multiples of 3.0x to 5.0x, which range was selected based on Evercore’s professional judgment and experience, to an estimate of DTI’s 2030 EBITDA based on the Forecasts and (ii) a perpetuity growth method — under which Evercore calculated terminal values for DTI by applying a range of perpetuity growth rates of 1.0% to 3.0%, which range was selected based on Evercore’s professional judgment and experience, to an estimate of the unlevered, after-tax free cash flows that DTI was forecasted to generate in the terminal year based on the Forecasts.
The cash flows and terminal values in each case were then discounted to present value as of June 30, 2026 using discount rates ranging from 14.0% to 16.0%, representing an estimate of DTI’s weighted average cost of capital, as estimated by Evercore based on its professional judgment and experience, to derive implied enterprise value reference ranges for DTI. Based on these ranges of implied enterprise values, DTI’s estimated net debt as of June 30, 2026 based on the Forecasts, and the number of fully diluted shares outstanding of DTI Common Stock as of June 30, 2026, based on DTI’s filings as approved for Evercore’s use by management of DTI, this analysis indicated ranges of implied equity values per share of DTI Common Stock as set forth in the table below, as compared to the $2.50 DTI Common Stock 20-day VWAP:
|
Methodology |
Implied |
|
|
Exit Multiple Method |
$2.65 – $4.54 |
|
|
Perpetuity Growth Rate Method |
$2.39 – $3.47 |
Publicly Traded Companies Analysis
The Group
Evercore reviewed and compared certain financial information of the Group to corresponding financial multiples and ratios for the following selected publicly traded companies in the oilfield services industry:
• ACT Energy Technologies Ltd.
• Expro Group Holdings N.V.
• Innovex International, Inc.
• KLX Energy Services Holdings, Inc.
• National Energy Services Reunited Corp.
• PHX Energy Services Corp.
• Ranger Energy Services, Inc.
• RPC, Inc.
For each of the selected companies, Evercore calculated enterprise value as a multiple of estimated calendar years 2026 and 2027 EBITDA (which is referred to as “EV/EBITDA”) based on information obtained from FactSet.
The results of these calculations were as follows:
|
Benchmark |
Low to High |
Median |
||
|
EV/EBITDA (2026E) |
3.7x – 8.6x |
4.8x |
||
|
EV/EBITDA (2027E) |
3.2x – 7.1x |
4.3x |
Based on the multiples it derived for the selected companies and its professional judgment and experience, Evercore applied EV/EBITDA multiple reference ranges of 4.00x to 5.00x and 3.50x to 4.50x to an estimate of the Group’s calendar year 2026 EBITDA and calendar year 2027 EBITDA, respectively, in each case based on the Forecasts, to derive implied enterprise value reference ranges for the Group. This analysis indicated implied
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enterprise value reference ranges for the Group as set forth in the table below, as compared to an implied value of the Consideration of $124.4 million, based on 17,355,139 shares of DTI Common Stock having a deemed value of approximately $43.5 million, calculated using the $2.50 DTI Common Stock 20-day VWAP:
|
Metric |
Implied |
||
|
EV/EBITDA (2026E) (Forecasts) |
$ |
90 – $112 |
|
|
EV/EBITDA (2027E) (Forecasts) |
$ |
98 – $126 |
|
Although none of these companies is directly comparable to the Group, Evercore selected these companies because they are publicly traded companies in the oilfield services industry with operations and business characteristics that Evercore, in its professional judgment and experience, considered generally relevant to the Group for purposes of its financial analyses. In evaluating the selected companies, Evercore made judgments and assumptions with regard to general business, economic and market conditions affecting the selected companies and other matters, as well as differences in the selected companies’ financial, business and operating characteristics. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments regarding many factors that could affect the relative values of the selected companies and the multiples derived from the selected companies. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful method of using the data of the selected companies.
DTI
Evercore reviewed and compared certain financial information of DTI to corresponding financial multiples and ratios for the selected publicly traded companies in the oilfield services industry as described in the section above under the caption “— Publicly Traded Companies Analysis — The Group”.
Based on the multiples it derived for the selected companies and its professional judgment and experience, as described in the section above under the caption “— Publicly Traded Companies Analysis — The Group”, Evercore applied EV/EBITDA multiple reference ranges of 3.50x to 4.50x and 3.00x to 4.00x to an estimate of DTI’s calendar year 2026 EBITDA and calendar year 2027 EBITDA, respectively, in each case based on the Forecasts, to derive implied enterprise value reference ranges for DTI. Based on these ranges of implied enterprise values, DTI’s estimated net debt as of June 30, 2026 based on the Forecasts, and the number of fully diluted shares outstanding of DTI Common Stock as of June 30, 2026, based on DTI’s filings as approved for Evercore’s use by management of DTI, this analysis indicated ranges of implied equity values per share of DTI Common Stock as set forth in the table below, as compared to the $2.50 DTI Common Stock 20-day VWAP:
|
Metric |
Implied |
|
|
EV/EBITDA (2026E) (Forecasts) |
$2.11 – $3.11 |
|
|
EV/EBITDA (2027E) (Forecasts) |
$2.34 – $3.58 |
Although none of these companies is directly comparable to DTI, Evercore selected these companies because they are publicly traded companies in the oilfield services industry with operations and business characteristics that Evercore, in its professional judgment and experience, considered generally relevant to DTI for purposes of its financial analyses. In evaluating the selected companies, Evercore made judgments and assumptions with regard to general business, economic and market conditions affecting the selected companies and other matters, as well as differences in the selected companies’ financial, business and operating characteristics. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments regarding many factors that could affect the relative values of the selected companies and the multiples derived from the selected companies. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful method of using the data of the selected companies.
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Precedent Transaction Analysis
Evercore reviewed publicly available information related to the following selected precedent oilfield services transactions announced since 2018.
|
Date Announced |
Target |
Acquiror |
||
|
July 2026 |
Sonic Holdings, LLC |
Superior Energy Services |
||
|
June 2026 |
TCO Group AS |
Innovex International, Inc. |
||
|
May 2026 |
Enhanced Well Technologies Group AS |
Expro Group Holdings N.V. |
||
|
February 2026 |
Valiant Artificial Lift Solutions, LLC |
Flowco Holdings Inc. |
||
|
August 2025 |
Quail Tools LLC |
Superior Energy Services |
||
|
July 2025 |
Iron Horse Energy Services |
Trican Well Service Ltd. |
||
|
June 2025 |
Flexible Engineered Solutions (Group) Holdings Limited |
Hunting PLC |
||
|
June 2025 |
The Surface Pressure Control business of Baker Hughes Company |
Cactus, Inc. |
||
|
June 2025 |
Citadel Casing Solutions |
Innovex International, Inc. |
||
|
December 2024 |
Downhole Well Solutions, LLC |
Innovex International, Inc. |
||
|
October 2024 |
Parker Drilling Company |
Nabors Industries Ltd |
||
|
March 2024 |
RMSpumptools Limited |
ChampionX Corporation |
||
|
February 2024 |
Coretrax Global Limited |
Expro Group Holdings N.V. |
||
|
November 2023 |
Rathmay Limited |
Ashtead Technology Holdings plc |
||
|
November 2023 |
Variperm Energy Services |
Forum Energy Technologies |
||
|
July 2023 |
Ulterra Drilling Technologies |
Patterson-UTI Energy, Inc. |
||
|
January 2023 |
FlexSteel Technologies Holdings, Inc. |
Cactus, Inc. |
||
|
December 2022 |
Hiretech Limited |
Ashtead Technology Holdings plc |
||
|
February 2020 |
Enpro Subsea Limited |
Hunting PLC |
||
|
October 2018 |
MOTI Holdco, LLC (formerly Magnum Oil Tools International) |
Nine Energy Service, Inc. |
For each selected transaction, Evercore calculated the EV/EBITDA for the target company or business in the applicable transaction based on information obtained from public filings, MergerMarket and CapitalIQ.
The results of these calculations were as follows:
|
Benchmark |
Low to High |
Median |
||
|
EV/EBITDA |
2.6x – 9.7x |
4.7x |
Based on the multiples it derived from the selected transactions and its professional judgment and experience, Evercore derived implied enterprise values for the Group by applying a selected reference range of EV/2026E EBITDA multiples of 4.0x to 6.0x and applied this range of multiples to an estimate of the Group’s calendar year 2026 EBITDA, based on the Forecasts, to derive implied enterprise value reference ranges for the Group.
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This analysis indicated implied enterprise value reference ranges for the Group of $90 million to $135 million, as compared to an implied value of the Consideration of $124.4 million, based on 17,355,139 shares of DTI Common Stock having a deemed value of approximately $43.5 million, calculated using the $2.50 DTI Common Stock 20-day VWAP.
Although none of the target companies or businesses reviewed in the selected transactions analysis is directly comparable to the Group and none of the selected transactions is directly comparable to the Acquisition, Evercore selected these transactions because they involve companies or businesses that Evercore, in its professional judgment and experience, considered generally relevant to the Group for purposes of its financial analyses. In evaluating the selected transactions, Evercore made judgments and assumptions with regard to general business, economic and market conditions and other factors existing at the time of the selected transactions, and other matters, as well as differences in financial, business and operating characteristics and other factors relevant to the target companies or businesses in the selected transactions. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments regarding many factors that could affect the relative values of the target companies or businesses in the selected transactions and the multiples derived from the selected transactions. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful method of using the data of the selected transactions.
Other Factors
Evercore also noted certain other factors, which were not considered material to its financial analyses with respect to its opinion, but were referenced for informational purposes only, including, among other things, the following:
Analysts Price Targets
Evercore reviewed selected publicly available share price targets of research analysts’ estimates known to Evercore as of October 1, 2026, noting that the low and high share price targets ranged from $2.80 to $6.00 for DTI Common Stock, as compared to the $2.50 DTI Common Stock 20-day VWAP. Public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for the shares of DTI Common Stock and these target prices and the analysts’ earnings estimates on which they were based are subject to risk and uncertainties, including factors affecting the financial performance of DTI and future general industry and market conditions.
52-Week Trading Range Analysis
Evercore reviewed historical trading prices of shares of DTI Common Stock during the 52-week period ended October 1, 2026, noting that low and high prices (based on closing values) during such period ranged from $1.93 to $4.49 per share of DTI Common Stock, as compared to the $2.50 DTI Common Stock 20-day VWAP.
Miscellaneous
The foregoing summary of Evercore’s financial analyses does not purport to be a complete description of the analyses or data presented by Evercore to the DTI Board. In connection with the review of the Acquisition by the DTI Board, Evercore performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary described above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Evercore’s opinion. In arriving at its fairness determination, Evercore considered the results of all the analyses and did not draw, in isolation, conclusions from or with regard to any one analysis or factor considered by it for purposes of its opinion. Rather, Evercore made its determination as to fairness on the basis of its professional judgment and experience after considering the results of all the analyses. In addition, Evercore may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above should not be taken to be the view of Evercore with respect to the actual value of the shares of DTI Common Stock. Further, Evercore’s analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other
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values of the companies used, including judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of DTI or its advisors. Rounding may result in total sums set forth in this section not equaling the total of the figures shown.
Evercore prepared these analyses for the purpose of providing an opinion to the DTI Board as to the fairness of the Consideration to be paid to the Sellers in the Acquisition, from a financial point of view, to DTI. These analyses do not purport to be appraisals or to necessarily reflect the prices at which the business or securities actually may be sold. Any estimates contained in these analyses are not necessarily indicative of actual future results, which may be significantly more or less favorable than those suggested by such estimates. Accordingly, estimates used in, and the results derived from, Evercore’s analyses are inherently subject to substantial uncertainty, and Evercore assumes no responsibility if future results are materially different from those forecasted in such estimates.
Evercore’s financial advisory services and its opinion were provided for the information and benefit of the DTI Board (in its capacity as such) in connection with its evaluation of the proposed Acquisition. The issuance of Evercore’s opinion was approved by an Opinion Committee of Evercore.
Evercore did not recommend any specific amount of consideration to the DTI Board or DTI management or that any specific amount of consideration constituted the only appropriate consideration in the transaction for the DTI stockholders.
Pursuant to the terms of Evercore’s engagement letter with DTI, DTI has agreed to pay Evercore a fee for its services in the aggregate amount of $2.25 million, of which (i) $150,000 was payable upon the execution of the Letter of Intent with respect to the Acquisition and is fully creditable against any fee payable upon the consummation of the Acquisition, (ii) $500,000 was payable upon delivery of Evercore’s opinion in connection with the Share Purchase Agreement and is fully creditable against any fee payable upon the consummation of the Acquisition and (iii) the remainder will be payable contingent upon the consummation of the Acquisition. DTI has also agreed to reimburse Evercore for its expenses and to indemnify Evercore against certain liabilities arising out of its engagement.
During the two year period prior to the date of Evercore’s opinion, Evercore and its affiliates have not been engaged to provide financial advisory or other services to DTI unrelated to the Acquisition and Evercore has not received any compensation from DTI during such period, other than the fee set forth in clause (i) of the immediately preceding paragraph. In addition, during the two year period prior to the date of Evercore’s opinion, Evercore and its affiliates have not been engaged to provide financial advisory or other services to Hicks Equity Partners LLC or its affiliate HEP Partners LLC, the controlling shareholder of Parent, and Evercore has not received any compensation from Hicks Equity Partners LLC or HEP Partners LLC, during such period. In addition, during the two year period prior to the date of Evercore’s opinion, Evercore and its affiliates have not been engaged to provide financial advisory or other services to the Group and Evercore has not received any compensation from the Group during such period. Evercore may provide financial advisory or other services to DTI, Hicks Equity Partners LLC, HEP Partners LLC and the Group in the future, and in connection with any such services Evercore may receive compensation. In addition, Evercore and/or its affiliates are also having active discussions with DTI to provide investment banking advisory, capital markets and/or underwriting services unrelated to Evercore’s engagement with DTI in connection with the Acquisition, for which Evercore would expect to receive customary fees if it is engaged and the transactions are consummated.
Evercore and its affiliates engage in a wide range of activities for its and their own accounts and the accounts of customers, including corporate finance, mergers and acquisitions, equity sales, trading and research, private equity, placement agent, asset management and related activities. In connection with these businesses or otherwise, Evercore and its affiliates and/or its or their respective employees, as well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly, hold long or short positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or equity securities, senior loans and/or derivative products or other financial instruments of or relating to DTI, the Group, potential parties to the Acquisition and/or any of their respective affiliates or persons that are competitors, customers or suppliers of DTI or the Group.
DTI engaged Evercore to act as a financial advisor based on Evercore’s qualifications, experience and reputation. Evercore is an internationally recognized investment banking firm and regularly provides fairness opinions in connection with mergers and acquisitions, leveraged buyouts and valuations for corporate and other purposes.
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THE Share purchase agreement
The following section summarizes certain material provisions of the SPA, which is included in this prospectus as Annex A and is incorporated by reference herein. The summary of the SPA below and elsewhere in this prospectus is qualified in its entirety by reference to the SPA. This summary does not purport to be complete and may not contain all of the information about the SPA that is important to you. This section is not intended to provide you with any factual information about DTI or the Group. The rights and obligations of DTI and the Group are governed by the SPA and not by this summary or any other information contained in or incorporated by reference into this prospectus. You are urged to read the SPA carefully and in its entirety, as well as this prospectus and the information incorporated by reference into this prospectus.
Explanatory Note Regarding the SPA
Factual disclosures about DTI and the Group contained in this proxy statement/prospectus or in documents incorporated by reference may supplement, update or modify the factual disclosures about DTI or the Group contained in the SPA. The representations, warranties and covenants made in the SPA were negotiated for the principal purpose of allocating risk between the parties and establishing circumstances in which a party may have the right not to consummate the Acquisition if the representations and warranties of another party are untrue, and were not intended to be a characterization of the actual state of facts or condition of any party. The representations and warranties are subject to contractual standards of materiality and knowledge, the disclosure letters and other qualifications set forth in the SPA. You should not rely on the representations and warranties as characterizations of the actual state of facts or condition of DTI, Buyer, the Group or the Sellers. For a discussion of the Acquisition and related risks, see the sections entitled “The Acquisition” and “Risk Factors,” beginning on pages 43 and 13, respectively.
Parties; Structure of the Acquisition
On October 8, 2026, DTI entered into the SPA with Buyer, the Group, Michael David Loggie, Michael David John Loggie and Jack William Loggie; Michael David Loggie and Jack William Loggie, solely in their capacity as trustees of The Loggie Family Trust (the “Loggie Trustee Sellers”); the Trustee Seller; and the Seller Representative. Under the SPA, and subject to its terms and conditions, Buyer will acquire from the Sellers all of the issued share capital of the Group, consisting of 1,240 ordinary shares of £1.00 each of Saltire and 100 ordinary shares of £1.00 each of Foxley. Upon the Closing, the Group will become indirect wholly owned subsidiaries of DTI, and their respective subsidiaries will become indirect subsidiaries of DTI.
Consideration
The aggregate consideration payable to the Sellers at Closing consists of (i) the Cash Consideration and (ii) the Consideration Loan Notes, which, pursuant to the Rollover Documents, will be exchanged at Closing for the Equity Consideration. The Cash Consideration reflects an equity value agreed by reference to the Locked Box Accounts and the EV to Equity Bridge (as defined in the SPA) of the Group as of the Locked Box Date and is subject to the adjustments described in the SPA, including (a) an increase by a daily profit ticker of £23,354 for each day from July 1, 2026 until the Closing (the “Profit Ticker Amount”), (b) reductions for any agreed known leakage (the “Known Leakage Amounts”) and for an agreed amount in respect of historic lease taxes (the “Agreed Tax Deduction”), and (c) an increase or decrease for an agreed adjustment relating to an employee benefit trust tax liability. Any amounts owed by the Sellers and their related persons to the Group as of the Closing will be repaid to the Group out of the Adjusted Cash Consideration.
The number of shares of DTI Common Stock comprising the Equity Consideration is fixed and will not be adjusted for changes in the market price of DTI Common Stock before the Closing. There is no escrow, earnout or post-Closing true-up. The Trustee Seller will receive its consideration entirely in cash, and the other Sellers will receive a correspondingly greater portion of their consideration in DTI Common Stock. Following the Closing, and assuming the exchange of the Consideration Loan Notes pursuant to the Rollover Documents, the Sellers are expected to own approximately 33% of the outstanding DTI Common Stock based on 35,282,224 shares outstanding as of October 8, 2026.
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Warranties
The Sellers and the Group have made customary fundamental warranties (the “Fundamental Warranties”) and commercial warranties (the “Commercial Warranties”) regarding the Sellers, the Group and their businesses, qualified by a disclosure letter delivered by the Sellers (the “Disclosure Letter”). Buyer and DTI have made customary warranties. Buyer has obtained the W&I Policy. The premium for the W&I Policy will be borne equally by Buyer and the Sellers, and Buyer will bear the retention.
Covenants
During the Interim Period, the Sellers have agreed to use commercially reasonable efforts to conduct the businesses of the Group in the ordinary course, subject to specified exceptions, and not to solicit, encourage or engage in discussions regarding alternative transactions.
DTI has agreed, among other things, to (i) file an additional listing application with Nasdaq for the Equity Consideration; (ii) prepare and file with the SEC, within 45 days after the date of the SPA, the Form S-4 Registration Statement, of which this proxy statement/prospectus forms a part, and use its reasonable best efforts to have it declared effective; (iii) duly call and hold the Special Meeting to obtain the Parent Stockholder Approval; and (iv) include in this proxy statement/prospectus the recommendation of the DTI Board that DTI stockholders vote in favor of the Share Issuance Proposal and the Ratification Proposal, which recommendation may not be withdrawn or modified in a manner adverse to the Sellers. If a quorum is not present or sufficient proxies have not been received, DTI is required to adjourn or postpone the Special Meeting for up to 30 days, but not to a date later than three Business Days before the Outside Date as provided in Section 7.13(i) of the SPA.
The SPA does not include a “fiduciary out” permitting the DTI Board to withdraw or modify its recommendation in response to a superior proposal, and the SPA does not provide a specific termination right if DTI stockholders fail to provide the Parent Stockholder Approval. However, either Buyer or the Seller Representative may terminate the SPA if a mutual closing condition (including the Parent Stockholder Approval) becomes incapable of being satisfied before the Outside Date. If the Share Issuance Proposal is approved but the Ratification Proposal is not, DTI must file a petition with the Delaware Court of Chancery under Section 205 of the DGCL within 15 Business Days and use its reasonable best efforts to obtain a final, non-appealable validation order before the Outside Date, and DTI and Buyer may not terminate the SPA at the Outside Date if the failure to close is primarily attributable to the pendency of those proceedings. The absence of a “fiduciary out” provision is consistent with customary UK M&A practice, where share purchase agreements do not typically include provisions permitting a party to terminate or modify its recommendation in order to accept a superior third-party proposal.
After the Closing, DTI has agreed to remain current in its reporting obligations for purposes of Rule 144(c) under the Securities Act until 24 months after the expiration of the Lock-Up Period, to remove restrictive legends within five Business Days after a written request following expiration of the Lock-Up Period, and to maintain the listing of DTI Common Stock on Nasdaq.
Parent Stockholder Approval
Under the SPA, the Parent Stockholder Approval means approval by DTI stockholders of (i) the Share Issuance Proposal, as required by Nasdaq Listing Rule 5635(a), and (ii) the Ratification Proposal under Section 204 of the DGCL; provided that clause (ii) will be deemed satisfied if, in lieu of such ratification, a final, non-appealable order of the Delaware Court of Chancery validating the Prior Elections and related acts is obtained under Section 205 of the DGCL. See the section entitled “Ratification Proposal” beginning on page 37 of this prospectus.
Conditions to Closing
The obligation of each party to complete the Acquisition is subject to (i) the absence of any law or order restraining or prohibiting the Acquisition; (ii) the Form S-4 Registration Statement having been declared effective; (iii) receipt of the Parent Stockholder Approval; and (iv) Nasdaq approval of the listing of the Equity Consideration.
Buyer’s obligation is further subject to (a) the Fundamental Warranties being true and accurate, other than de minimis inaccuracies, at signing and at Closing; (b) the Commercial Warranties being true and accurate as of the date of the SPA, except where the failure to be true and accurate would not reasonably be expected to have a material
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adverse effect on the Group; (c) performance of the Sellers’ and the Group’s covenants in all material respects; (d) the absence of a material adverse effect in respect of each Company (a “Material Adverse Effect”); and (e) Buyer having obtained debt and/or equity financing (the “Financing”) on terms consistent with the agreed financing terms in the SPA (the “Agreed Financing Terms”), in an aggregate amount sufficient to pay the Adjusted Cash Consideration and related fees and expenses.
The Sellers’ obligation is further subject to (a) the warranties of Buyer and DTI being true and accurate, except where the failure to be true and accurate would not reasonably be expected to have a material adverse effect on the ability of Buyer or DTI to consummate the Acquisition; (b) performance of Buyer’s and DTI’s covenants in all material respects; (c) the Lock-up and Investor Rights Agreement being in full force and effect as of Closing; and (d) His Majesty’s Revenue and Customs having confirmed in writing under section 138 of the Taxation of Chargeable Gains Act 1992 and section 701 of the Income Tax Act 2007 (as applicable) that no counteraction notice will be issued in respect of the disposal of the shares of the Group or the exchange of the Consideration Loan Notes for DTI Common Stock, and that the exchange of shares for loan notes will be effected without arrangements to which section 137 of the Taxation of Chargeable Gains Act 1992 applies.
Termination of the Share Purchase Agreement
The SPA may be terminated (i) by mutual written consent of Buyer and the Seller Representative; (ii) by Buyer or the Seller Representative if the Closing has not occurred by the Outside Date, except under certain circumstances; (iii) by Buyer or the Seller Representative if a final, non-appealable order permanently prohibits the Acquisition; (iv) by Buyer upon the occurrence of a Material Adverse Effect, subject to a 20 Business Day cure period, a dispute resolution process with the Seller Representative and an expert determination procedure; (v) by the Seller Representative if the Financing has not been obtained by November 30, 2026, the parties have completed a prescribed period of good faith discussions regarding the Financing, and the Seller Representative and Buyer determine, acting reasonably and in good faith, that there is no reasonable prospect of the Financing being obtained by the Outside Date; (vi) by Buyer or the Seller Representative if Buyer has not obtained the Financing by the Outside Date despite using all reasonable efforts; or (vii) by Buyer or the Seller Representative if a condition to Closing becomes incapable of satisfaction prior to the Outside Date.
Expense Reimbursement
The SPA does not provide for a termination fee payable by either party. If the SPA is terminated in specified circumstances and, within 12 months after termination, the Group or the Sellers enter into an alternate transaction (an “Alternate Transaction”), the Sellers (other than the Trustee Seller) must reimburse Buyer’s documented out-of-pocket expenses, up to £1,500,000.
Indemnification; Release; Remedies
The Sellers (other than the Trustee Seller) have agreed to indemnify Buyer for unprovided pre-Closing taxes of the Group and certain specified tax liabilities (including tax liabilities relating to historic Scottish leases, an employee benefit trust and the voluntary dissolution of a Romanian subsidiary of the Group (“Saltire Romania”)), and to pay Buyer for any leakage, in each case subject to the limitations and survival periods in the SPA. Recourse for warranty claims and most tax indemnity claims is limited to the W&I Policy.
The Sellers’ aggregate liability for warranty claims and most tax indemnity claims is capped at £1, their aggregate liability for certain excluded tax claims is capped at £2,500,000, and their aggregate liability for all other claims (other than leakage, excluded tax and fraud claims) is capped at the Adjusted Cash Consideration received by them. The tax warranties and tax indemnities survive for five years following the Closing (or, for the tax liability relating to Saltire Romania, until the later of five years and the resolution of the related proceedings and dissolution), while leakage claims survive for 12 months. At Closing, the Sellers will release the Group from specified claims. The parties are entitled to specific performance. Buyer may assign its rights under the SPA to its financing sources as collateral.
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Lock-up and Investor Rights Agreement
Concurrently with the execution of the SPA, DTI and the Sellers entered into the Lock-up and Investor Rights Agreement, which will become effective as of the Closing. The Lock-up and Investor Rights Agreement provides for, among other things, (i) lock-up restrictions on transfers of the Equity Consideration during the Lock-Up Period, with tranches of shares released at 12, 18 and 24 months following the Closing, subject to an early release mechanism; (ii) limitations on sales volume and restrictions on transfers to certain prohibited transferees; (iii) the Sellers’ right to participate in certain secondary offerings conducted by DTI; and (iv) the right of the Seller Representative to designate either a director or a non-voting observer to the DTI Board, subject to specified fall-away thresholds based on the Sellers’ ownership percentage. The Lock-up and Investor Rights Agreement is attached to the Form S-4 Registration Statement as Exhibit 10.2.
Financing
Buyer expects to fund the Cash Consideration through new debt financing and borrowings under DTI’s existing credit facility. The SPA requires Buyer to keep the Seller Representative reasonably informed of the status of the Financing, including by providing written updates no less frequently than every five Business Days regarding key milestones and any developments that could prevent or delay the Financing.
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U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE SPA
The following is a general discussion of the material U.S. federal income tax consequences of the Acquisition to holders of DTI Common Stock. This discussion does not address any tax consequences arising under the laws of any U.S. state or local or non-U.S. jurisdiction, or under any U.S. federal laws other than those pertaining to income tax. This discussion is based upon the Code, the regulations promulgated under the Code and court and administrative rulings and decisions, all as in effect on the date hereof. These laws may change, possibly retroactively, and any such change could affect the accuracy of the statements and conclusions set forth in this discussion.
The Acquisition is structured as a direct share purchase by Buyer of 100% of the issued and outstanding share capital of each of Saltire and Foxley from the Sellers, which will be treated as a taxable acquisition described in Code Section 1001 pursuant to which Buyer will take a cost basis in the equity purchased from the Sellers. DTI is not itself a party to a merger, and DTI’s corporate existence, certificate of incorporation, bylaws and currently outstanding shares of DTI Common Stock will not be directly affected by the Acquisition. Existing DTI stockholders are not exchanging, converting, or otherwise disposing of any shares of DTI Common Stock solely as a result of the Acquisition. In connection with the Acquisition, DTI stockholders are being asked to approve the issuance of shares of DTI Common Stock to the Sellers as Equity Consideration under Nasdaq Listing Rule 5635(a) and the Ratification Proposal.
Accordingly, there will be no material U.S. federal income tax consequences to existing holders of DTI Common Stock solely as a result of the consummation of the Acquisition and the issuance of the Equity Consideration to the Sellers. Existing DTI stockholders will not recognize any gain or loss and will not be required to include any amount in income, for U.S. federal income tax purposes solely as a result of the Acquisition.
The tax consequences of the Acquisition to holders of DTI Common Stock will depend on each holder’s particular facts and circumstances.
ALL HOLDERS OF DTI COMMON STOCK ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE ACQUISITION, INCLUDING THE APPLICABILITY AND EFFECT OF ANY U.S. FEDERAL, STATE, LOCAL, NON-U.S. AND OTHER TAX LAWS AND OF POTENTIAL CHANGES IN SUCH LAWS.
The preceding discussion is intended only as a summary of the material U.S. federal income tax consequences of the Acquisition to holders of DTI Common Stock. It is not a complete analysis or discussion of all potential tax effects that may be important to a particular holder. Each holder of DTI Common Stock is strongly encouraged to consult its own tax advisor regarding the specific tax consequences of the Acquisition to such holder, including U.S. federal, state, local, non-U.S. and other tax consequences.
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INFORMATION ABOUT DTI
Drilling Tools International Corporation
Drilling Tools International Corporation is a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of downhole tools for use in onshore and offshore horizontal and directional drilling operations, as well as other solutions across the well life cycle. DTI operates through its Directional Tool Rentals, Premium Tools and Wellbore Optimization Tools divisions, together with its Other Products & Services offerings, and serves diversified oilfield service companies and exploration and production operators from locations across North America and international service and support centers in Europe, the Middle East and Asia-Pacific. DTI Common Stock is listed on the Nasdaq Stock Market LLC under the symbol “DTI.”
DTI’s principal executive offices are located at 10370 Richmond Avenue, Suite 1000, Houston, Texas 77042, and its telephone number is (832) 742-8500, or email InvestorRelations@drillingtools.com. Additional information about DTI and its subsidiaries is included in the documents incorporated by reference into this prospectus. See the section entitled “Where You Can Find More Information.”
Buyer
Casing Technologies Group Limited is a full-service, down-hole tool rental company for land and offshore operations focused on wellbore construction rental items for both traditional hydrocarbon extraction and geothermal industries. Buyer’s primary operations are located in the United Kingdom, Europe, and Africa.
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INFORMATION ABOUT the group
Unless otherwise indicated or the context otherwise requires, all references in this section to “Group,” “Saltire Energy,” and other similar terms refer to Saltire Energy Limited, Foxley Energy Limited and their respective subsidiaries prior to the consummation of the Acquisition, which will be the business of DTI and its consolidated subsidiaries after giving effect to the Acquisition.
DESCRIPTION OF BUSINESS
The Group
Saltire Energy is a specialist provider of downhole oilfield equipment rental and related ancillary services to the upstream oil and gas industry, with operations spanning the United Kingdom, Africa, Middle East and the Far East. The Group’s principal activities comprise the provision of drilling equipment rental, torquing and testing, pressure testing, and repair and refurbishment services to oil and gas operators, drilling contractors, and oilfield services companies across the full well lifecycle, from exploration and appraisal drilling through to well completion, workover, intervention, and plugging and abandonment. Saltire Energy provides a range of well-construction equipment that forms part of the drill string, enabling offshore crews to drill safely and efficiently. The Group’s core product lines include drill pipe and drill collars, tubing and wash pipe, drilling jars, and pressure-control equipment and blowout-prevention-related equipment. The Group also provides a suite of supporting services, including pressure testing, torque-and-test services, repair, refurbishment, remanufacturing, machining, and welding, all of which are critical in maintaining equipment integrity and verifying that tools can withstand the high loads and pressures encountered during drilling and well operations. The Group has also established a new tubular inspection and storage business line, which commenced commercial operations in May 2026. In the fiscal year ended June 30, 2026, the Group generated revenue from customers operating across 55 countries, with the United Kingdom and the United Arab Emirates representing the largest contributors to consolidated revenues. In the fiscal year ended June 30, 2026, Saltire Energy Limited and Foxley Energy Limited generated a turnover of £22,153,375 and £12,594,343 on a consolidated basis, respectively, as compared to £27,930,691 and £14,500,030 respectively for the prior fiscal year. As of June 30, 2026, the Group had 109 employees.
The Group comprises Saltire Energy Limited, Foxley Energy Limited and their respective subsidiaries. Saltire Energy Limited was incorporated as a private limited company in Edinburgh, Scotland on May 3, 1996 under the name International Rig & Equipment Limited and has since changed its name to Saltire Energy Limited on June 23, 2008. Saltire Energy Limited’s subsidiaries include (i) Saltire Energy SDN. BHD., a private limited company incorporated in Malaysia, (ii) Saltire Energy PTE Limited, a private limited company incorporated in Singapore, (iii) Saltire Pressure Control Limited, a private limited company incorporated in Scotland, (iv) Saltire Energy (Norway) Ltd, a private limited company incorporated in Scotland, which is also in the process of being voluntarily struck off the register, and (v) Saltire Drilling Tools Limited, a private limited company incorporated in Scotland, which is currently in the process of being voluntarily struck off the register. Foxley Energy Limited was incorporated as a private limited company in Edinburgh, Scotland on June 28, 2016. Foxley Energy Limited’s subsidiaries include (i) Saltire Energy LLC, a limited liability company incorporated in the United Arab Emirates, (ii) Saltire Energy (KSA) LLC, a limited liability company incorporated in the Kingdom of Saudi Arabia, (iii) Saltire Energy Tubular Services Limited, a private limited company incorporated in Scotland, and (iv) Saltire Energy Europe SRL, a private limited company registered in Romania.
Industry Overview
The Role of Rental Tool Companies in Upstream Oil and Gas
The upstream oil and gas industry requires a broad and specialized range of equipment and technical services to drill, complete, maintain, and ultimately abandon wells. Rental tool companies such as Saltire Energy are specialist suppliers to this industry, providing equipment and associated services across the full well lifecycle, from exploration and appraisal drilling through to plugging, abandonment, and decommissioning.
Oil and gas operators and drilling contractors typically do not own every item of specialized equipment required for each well program. Renting equipment from specialist providers allows them to avoid tying up capital in assets that are used intermittently, to scale their equipment fleets up or down as activity levels change, and to access
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equipment across different operating regions without incurring the logistical cost and time required to mobilize owned assets. This model underpins sustained demand for rental tool companies across commodity and activity cycles.
Key Demand Drivers
Saltire Energy operates within the global downhole drilling tools market, which Spears & Associates, Inc. estimated to be approximately $4.3 billion in 2026. Demand for rental equipment and related equipment services is fundamentally driven by the level of upstream oil and gas activity, whereby the most important underlying driver is upstream capital expenditure. When oil and gas producers sanction new field developments or increase drilling budgets, demand for rental tools and related services increases correspondingly. Conversely, periods of lower commodity prices, elevated interest rates, cost inflation, or sustained investor pressure on oil and gas companies can cause operators to defer wells, reduce well counts, or curtail rig programs, directly reducing rental demand. Other key underlying drivers include:
• Number of wells drilled — demand rises when operators and drilling contractors undertake more projects, including exploration wells, appraisal wells, development wells, and infill drilling programs;
• Length and complexity of wells drilled — longer, higher-pressure, or more technically complex wells typically require greater volumes of rental equipment and more intensive service activity;
• Brownfield maintenance and well intervention — mature producing basins generate ongoing demand for workovers, sidetracks, well integrity work, and production-enhancement projects, providing a degree of demand continuity independent of new drilling activity;
• Well abandonment and decommissioning activity — regulatory obligations to plug and abandon end-of-life wells create a structural and growing source of demand, particularly in mature regions such as the United Kingdom Continental Shelf (“UKCS”); and
• Safety, testing, and certification requirements — regulatory and operator-driven requirements generate demand for services such as equipment inspection, pressure testing and certification support.
The latest Baker Hughes Company worldwide rig count reports 1,919 rigs for September 2026, up 13 rigs from August 2026 and up 107 rigs from September 2025, a 5.9% year-on-year increase which reflects renewed drilling activity and broader recovery in global drilling activity whilst hydrocarbons prices have been elevated compared to prior year averages.
Recent Global Events
Geopolitical events can have a direct and material impact, both positive and negative, on oil and gas prices and, in turn, on the level of upstream activity and demand for rental equipment and services. A number of significant geopolitical events in recent years, including the Russia-Ukraine conflict, the Israel-Hamas conflict, the US-Israel-Iran conflict (including restricted access to the Strait of Hormuz), have generally tightened global oil and gas supply. This has, in turn, created upward pressure on commodity prices and driven increased global drilling activity and capital expenditure levels, providing a positive trend for rental tool companies like Saltire Energy. However, the conflict between the United States and Iran, and related regional tensions across the Middle East, had initially caused a disruption to Saltire Energy’s operations in the region, which are principally located in the United Arab Emirates and the Kingdom of Saudi Arabia. The conflict and the associated challenges of moving personnel and equipment into and around the region created logistical difficulty and adversely impacted the Group’s Middle Eastern operations during the fiscal year ended June 30, 2026. Saltire Energy Limited’s Middle East turnover on a consolidated basis declined from £2,709,473 in the fiscal year ended June 30, 2025 to £1,032,568 in the fiscal year ended June 30, 2026, a decrease of £1,676,905, and Foxley Energy Limited’s Middle East turnover on a consolidated basis declined from £12,043,738 in the fiscal year ended June 30, 2025 to £10,152,847 in the fiscal year ended June 30, 2026, a decrease of £1,890,891. Activity across the Group’s Middle Eastern operations has since returned to levels broadly consistent with performance immediately prior to the onset of the conflict.
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Energy Transition
The global energy transition, encompassing national net-zero commitments, growth in renewable energy capacity, and increasing regulatory pressure on fossil fuel production, represents an evolving backdrop for the upstream oil and gas services industry. Government policies, financial-sector lending restrictions, and broader investor pressure have, in a number of jurisdictions, increased costs for oil and gas operators and introduced uncertainty into long-term investment planning.
The most notable region in which the impact of regulatory developments relating to energy transition has been relevant for Saltire Energy’s business is the United Kingdom. In light of the UK’s 2050 net zero target, in March 2021, the Department for Energy Security and Net Zero co-published with Offshore Energies UK the North Sea Transition Deal which sets out the plan for how the UK’s offshore oil and gas sector and the government will work together to meet greenhouse gas emission reduction targets. A “climate compatibility checkpoint” was introduced in 2022 to determine the compatibility of future oil and gas licensing with the wider climate change objectives, such as the reduction of greenhouse gas emissions. The UK government has committed to a ban on issuing new onshore oil and gas licenses, helping to meet the UK government’s energy commitments. These developments could materially impact the level of upstream operations activity within the UKCS. However, any such negative impact has been partially offset by an increase in decommissioning and plugging-and-abandonment activity, reflecting the maturity of the basin and the regulatory obligations placed on operators to abandon end-of-life infrastructure, which in turn create increased demand for Saltire Energy’s service capabilities.
Operating Activities
Saltire Energy is a specialist provider of downhole oilfield equipment rental and related ancillary services (such as torquing and testing, pressure testing, repair and refurbishment) as well as tubular inspection and storage services to the upstream oil and gas industry. The Group supplies equipment and technical services across the full well lifecycle, from exploration and appraisal drilling through to well completion, workover, intervention, and plugging and abandonment. Saltire Energy serves customers across the United Kingdom North Sea, Africa, the Middle East, and the Far East.
Equipment Rental
Saltire Energy’s principal business is the rental of downhole oilfield equipment to oil and gas operators, drilling contractors, and oilfield service companies. The Group owns an extensive fleet of downhole tools across a broad range of sizes, weights, and material specifications, enabling it to satisfy a wide range of customer requirements across different well types, depths, and operating environments. The Group has operational bases in Aberdeen, Abu Dhabi, Malaysia and Singapore.
The key operating equipment within Saltire Energy’s rental fleet are as follows:
• Drill pipe — connects the rig to the bottom-hole assembly, transmits rotation and torque, and carries drilling fluid to the bit;
• Heavyweight drill pipe — adds weight and stiffness to the drill string, helping apply controlled force to the bit and reduce stress concentrations during drilling;
• Tubing and wash pipe — conveys fluids and supports drilling, completion, workover, and well-servicing operations;
• Drill collars — heavy tubulars placed near the bit to provide weight-on-bit and stiffness to the bottom-hole assembly;
• Non-magnetic drill collars — allow reliable measurement-while-drilling and directional-survey readings by minimizing magnetic interference with downhole survey tools;
• Stabilizers — maintain centralization of the bottom-hole assembly, assist in controlling wellbore trajectory, and dampen vibration during drilling;
• Float subs — help prevent drilling fluid or formation fluids from flowing backward through the drill string;
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• Hole openers — enlarge an existing wellbore to the required diameter;
• Drilling jars and accelerators — deliver impact forces to help free stuck drill pipe or other downhole tools;
• Blowout preventers and pressure-control equipment — help contain and control wellbore pressure at surface during drilling and well intervention operations; and
• Handling equipment — safely runs, retrieves, and supports tubulars and downhole assemblies during rig floor operations.
The Group’s rental fleet had a total asset value of approximately £123 million as at June 30, 2026. The Group replaces equipment on an as-needed basis and all rental equipment is refurbished following each deployment to maintain operational readiness and equipment integrity.
Tubular Inspection and Storage
In 2026, Saltire Energy established a tubular inspection and storage business line, supported by the opening of a new facility in Aberdeen and which commenced commercial operations in May 2026. The Aberdeen facility provides a strategic hub for North Sea operations, offering customers a single location for the storage, inspection, and management of downhole tubulars. Since its inception, this new service line has secured contracts that have filled the facility close to its full operating capacity. The tubular inspection and storage offering is complementary to Saltire Energy’s core rental business and is expected to deepen relationships with existing customers as well as attract new customers.
Business Strategy
Saltire Energy’s strategy is to drive profitable growth across each of its operating regions, deepen its service offering within established markets, and selectively expand into new geographies where it identifies compelling market opportunities. The Group seeks to be a technically specialized, one-stop rental and equipment-services provider for well drilling and abandonment projects, differentiating itself through the depth and breadth of its rental inventory, the quality and condition of its equipment fleet, its in-house refurbishment and repair capability, its integrated testing and inspection services, its storage capacity, and the standard of its customer support.
The Group intends to execute its strategy through the following:
• Maintaining and strengthening its position as a one-stop provider in core markets — Saltire Energy intends to continue to grow within each region it operates. In the United Kingdom, the Group sees opportunities for further growth as certain larger market participants leave the market, creating supply gaps in certain equipment and service needs that the Group is well-positioned to fill. For example, Saltire Energy has recently expanded its service offering within the UK through its investment in Saltire Tubular Services, a new tubular inspection and storage facility established in 2026 in Aberdeen. This facility provides the Group direct operational control over its extensive tubular inventory and provides a platform to offer inspection and storage services to a broader customer base, including oil country tubular goods suppliers and other customers operating across the UKCS. The facility also supports Saltire Energy’s participation in the long-term plugging and abandonment (“P&A”) market. The Group has invested in additional tubular inventory to fulfil a substantial program of P&A work, which it expects will provide a sustained and growing source of demand over the next decade as the UKCS basin continues to mature and as regulatory abandonment obligations increase.
• Continued investment in the Middle East and Far East — Saltire Energy views the Middle East and Far East as highly attractive markets as these regions remain very active in oil and gas activity. The Group continues to commit capital expenditure in both regions with the objective of increasing its market share, building on its established operational presence and customer relationships in the United Arab Emirates, the Kingdom of Saudi Arabia, and the Far East. In the fiscal years ended June 30, 2026, 2025 and 2024, the Group’s percentage of turnover derived from the Middle East geographical market were 32.2%, 34.8% and 31.9% respectively.
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• Diversifying geographically into Norway, continental Europe, and Africa — Saltire Energy is pursuing a strategy of selective geographic diversification, with Norway, continental Europe, and Africa identified as priority target markets. These markets are being served from the Group’s existing UK entities, allowing the Group to leverage its established infrastructure, inventory, and operational expertise without requiring material upfront investment in new in-country facilities. The Group has been successful in securing long-term projects in testing and drilling across these geographies with a broad range of drill-pipe, tubulars and Bottom-Hole Assembly equipment being provided. Norway is a particularly attractive market to the Group, given the scale and sustained activity level of the Norwegian Continental Shelf and the operational similarities with the UKCS.
• Leveraging expected synergies from consummation of the Acquisition — The proposed Acquisition complements the Group’s broader strategy for growth as it will provide the Group with a platform to enter more markets, particularly the North American market. The strategic rationale for the transaction rests on a number of identified synergies, including: the complementarity of each party’s rental equipment fleet across different geographies, enabling the combined Group to serve customers requiring equipment across a broader range of regions without the need for costly cross-border asset mobilization; the overlap in key customer relationships between the two businesses, providing an immediate opportunity to offer a fuller range of services to existing counterparties and to cross-sell into each other’s customer bases; and a shared operating philosophy centered on exceptional service quality, which the Group considers an important factor in the integration and long-term success of the combined business.
Suppliers
Saltire Energy relies principally on third-party manufacturers and suppliers for the equipment that comprises its rental fleet and for the components and parts required to maintain and refurbish the fleet. The Group does not source or process raw materials directly but instead procures finished or semi-finished equipment and components from a network of specialist oilfield equipment manufacturers and suppliers across its operating regions, with a typical lead time of three months and up to five months for certain specialized tubular equipment. The prices paid for equipment and components or the lead time to reach such equipment or components may be affected by, among other things, tariffs and duties on imported materials, foreign currency exchange rates, inflation, and supply chain disruptions due to geopolitical events. The Group has developed both domestic and international sourcing connections and arrangements, and while the Group maintains established relationships with its current suppliers, alternative sources of supply exist and the Group is not dependent on any one supplier.
Competition
Saltire Energy operates in a competitive market characterized by high capital requirements, evolving regulatory requirements and challenges in securing and retaining customer trust, with competitors comprised of small or regionally focused companies and large or international companies. The Group’s main competitors are Workstrings International, L.L.C., Archer Limited, and Odfjell Technology Ltd., each of which supplies comparable equipment and can be competitive across certain work scopes and geographies. Competition in the rental tool market is based primarily on the breadth and availability of inventory, equipment quality and condition, speed of mobilization, service reliability, safety and price.
The Group believes it differentiates itself from its competitors primarily through the scale and depth of its rental inventory and the quality of its customer service. Saltire Energy’s extensive asset base, with a fleet valued at approximately £123 million as at June 30, 2026, enables it to serve a broader range of customers and well programs simultaneously, and to provide rapid equipment turnarounds without being dependent on the return of tools from other active operations. The Group has also invested in its facilities with the objective of maximizing operational efficiency and reducing its reliance on third-party service providers, including through the internalization of repair and refurbishment activities. This integrated capability (which combines rental inventory, in-house maintenance, testing, and inspection services) allows Saltire Energy to offer customers a comprehensive, single-source solution that the Group considers difficult for smaller or less well-capitalized competitors to replicate.
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Customers
Saltire Energy serves a diversified customer base across the upstream oil and gas industry, comprising oil and gas operators, drilling contractors, oilfield service companies, and tubular manufacturers. The Group’s customers are principally large, well-capitalized organizations operating across multiple geographies, and the Group does not consider itself dependent on any single customer for the continuity of its business. The Group’s principal customers include the four largest oilfield services companies globally, SLB, Baker Hughes Company, Weatherford International plc, and Halliburton Company, together with operator and other industry customers including Abu Dhabi National Energy Company PJSC (TAQA), Ithaca Energy plc, and Sapura Energy Berhad. The Group’s top ten customers, grouping affiliated entities within each of the four major oilfield services groups, accounted for approximately 60% of the Group’s total revenue for the fiscal year ended June 30, 2026. SLB, when its affiliated entities are aggregated, accounted for more than 25% of the Group’s consolidated revenues in the fiscal year ended June 30, 2026, and the loss of, or a significant reduction in business from, SLB could have a material adverse effect on the Group.
The Group’s customer contracts are typically structured as master service agreements, under which individual projects are executed by way of purchase orders called off against the relevant framework. The Group may also enter into contractual arrangements with its customers on a standalone basis for specific projects by way of individual purchase orders.
Seasonality
Saltire Energy’s business is not materially impacted by seasonality. Whilst certain operating regions may experience localized and temporary reductions in activity arising from adverse weather conditions, in particular winter weather in the North Sea and the extreme summer heat in parts of the Middle East, these regional patterns broadly offset one another across the Group’s diversified geographic footprint.
Cyclicality
Saltire Energy’s business is subject to cyclicality linked to the broader oil and gas price cycle and the upstream capital expenditure trends of operators and drilling contractors. As described in the “— Industry Overview” section above, the most important underlying driver of demand for Saltire Energy’s equipment and services is the level of upstream capital spending. When oil and gas prices are sustained at levels that support operator investment, drilling programs expand, well counts increase, and demand for rental equipment and associated services rises accordingly. Conversely, periods of sustained low commodity prices, elevated interest rates, or heightened investor pressure on oil and gas producers to constrain capital expenditure can result in the deferral or cancellation of drilling programs and a corresponding reduction in demand for the Group’s services.
Government Regulation and Environmental, Health and Safety Measures
Saltire Energy’s operations are subject to a broad range of environmental, health and safety (“EHS”), and other regulatory requirements in the United Kingdom and across its international operating regions. The principal UK legislative and regulatory frameworks to which the Group is subject include the Health and Safety at Work etc. Act 1974, the Management of Health and Safety at Work Regulations 1999, the Health and Safety (First Aid) Regulations 1981, the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013, the Provision and Use of Work Equipment Regulations 1998, the Lifting Operations and Lifting Equipment Regulations 1998, the Working at Height Regulations 2005, the Control of Noise at Work Regulations 2005, the Control of Substances Hazardous to Health Regulations 2002, the Manual Handling Operations Regulations 1992, the Environmental Protection Act 1990, the Fire (Scotland) Act 2005, the Fire Safety (Scotland) Regulations 2006, and the Water Environment and Water Services (Scotland) Act 2003. The Group is also subject to the regulatory oversight of the Scottish Environment Protection Agency in respect of its Scottish operations, including in relation to waste management and water discharge activities. The Group maintains compliance with applicable recycling and waste management legislation across its operations.
In the international jurisdictions in which Saltire Energy operates, the Group’s activities are subject to regulatory frameworks administered by national oil companies and government regulations. In the United Arab Emirates, the Group is required to maintain registration and prequalification with the Abu Dhabi National Oil Company (“ADNOC”) in order to participate in ADNOC-related projects and is also subject to the UAE
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Government’s In-Country Value program, which requires contractors and suppliers to demonstrate a minimum level of local economic contribution as a condition of eligibility for certain government and government-related contracts. In the Kingdom of Saudi Arabia, the Group is subject to Saudi Aramco’s Supplier Code of Conduct, which sets out compliance, ethical, and operational standards applicable to Aramco’s supply chain participants, as well as the Saudi Arabian Government’s In-Kingdom Total Value Add program, which establishes localization requirements for goods and services procured in connection with the Kingdom’s oil and gas sector. In Malaysia, the Group’s operations are subject to the regulatory oversight of Petroliam Nasional Berhad (“PETRONAS”), including compliance with the PETRONAS Licensing Management System, which governs the registration and licensing of service providers operating within Malaysia’s upstream oil and gas sector, as well as the environmental regulatory requirements administered by the Department of Environment under the Ministry of Natural Resources and Environmental Sustainability. In Singapore, the Group is subject to applicable workplace safety and health regulations and environmental protection requirements administered by the relevant governmental authorities.
The Group monitors and manages its compliance with applicable EHS regulations through a program of risk assessments, regular third-party inspections, waste management reporting, fire safety testing, and emergency drills. The Group maintains comprehensive risk assessments across all of its operational processes, which are regularly reviewed and updated as applicable. The Group conducts regular internal audits covering all HSE aspects of its business and is additionally subject to HSE audits conducted by its customers. While the Group is not currently aware of any new environmental, health and safety regulations expected to come into force in the near term that would have a material impact on its operations or financial performance, the Group cannot predict whether additional laws and regulations will be adopted, including changes in regulatory oversight, increases in taxes, increases in inspection costs, or the effect such changes may have on the Group, its operations or financial performance.
The Group also has an anti-bribery and anti-corruption (“ABC”) policy in place. The ABC policy expressly addresses compliance with the UK Bribery Act 2010, which creates a corporate offence of failure to prevent bribery and requires the Group to implement adequate controls to prevent bribery both at home and abroad. The Group is also subject to anti-bribery, anti-corruption, and sanctions laws and regulations in other jurisdictions in which it operates, including the US Foreign Corrupt Practices Act of 1977 and applicable economic sanctions regimes. See “Risk Factors — The Group is subject to anti-bribery, anti-corruption, and sanctions laws and regulations” for further detail.
Insurance
The Group maintains insurance coverage of types and amounts that it believes to be customary and reasonable for companies of its size and with similar operations. In accordance with industry practice, however, the Group does not maintain insurance coverage against all of the operating risks to which the business is exposed. Therefore, there is a risk its insurance program may not be sufficient to cover any particular loss or all losses.
The Group’s current insurance program includes, among other things, general liability, pollution liability, clean-up costs, directors’ and officers’ liability, employer’s liability, vehicle, cyber, workers’ compensation and equipment coverage. The insurance includes various limits and deductibles or retentions, which must be met prior to or in conjunction with recovery.
Employees
As of June 30, 2026, the Group had 109 employees. In addition to its permanent workforce, the Group engaged two contractors as at the same date, one in its UK operating entity and one in its UAE operating entity. The Group’s employees are not represented by any labor union, and the Group has not experienced any work stoppages. The Group considers its relations with its employees to be satisfactory, and benefits from low staff turnover across its operations. The Group maintains a program of workplace safety measures designed to keep incident rates low.
Description of Property
As of the date hereof, the Group operated out of 15 facilities across 4 countries, comprising 7 in the United Kingdom, 4 in the United Arab Emirates, 2 in Singapore and 2 in Malaysia. The Group’s properties comprise office, yard, workshop, and storage facilities, 100% of which are leased. The Group’s principal place of business and registered office is located at Saltire Energy Hub, Badentoy Road, Aberdeen, AB12 4YD, which is leased
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from Loxley (Aberdeen) Limited, a related party of the Group, further details of which are set out in “Certain Related Party Transactions of the Group”. The Group considers its existing facilities to be adequate for its current operational requirements.
Please see the table below for additional information on the Group’s properties:
|
Location |
Type (i.e. Service Centre, Office, |
Own/Lease |
||
|
United Kingdom |
||||
|
Portlethen, Scotland |
Warehouse and office |
Lease |
||
|
Portlethen, Scotland |
Warehouse |
Lease |
||
|
Portlethen, Scotland |
Warehouse and office |
Lease |
||
|
Portlethen, Scotland |
Offices, warehouse & yard |
Lease |
||
|
Portlethen, Scotland |
Warehouse and office |
Lease |
||
|
Portlethen, Scotland |
Warehouse |
Lease |
||
|
Aberdeen, Scotland |
Warehouse |
Lease |
||
|
Middle East and Far East |
||||
|
Abu Dhabi, United Arab Emirates |
Workshop |
Lease |
||
|
Abu Dhabi, United Arab Emirates |
Workshop |
Lease |
||
|
Abu Dhabi, United Arab Emirates |
Workshop |
Lease |
||
|
Abu Dhabi, United Arab Emirates |
Office |
Lease |
||
|
Kuala Lumpur, Malaysia |
Office |
Lease |
||
|
Labuan, Malaysia |
Storage container |
Lease |
||
|
Singapore |
Open Yard |
Lease |
||
|
Singapore |
Office |
Lease |
Legal Proceedings
From time to time, the Group may be subject to various legal proceedings and claims arising in the ordinary course of its business. The Group is not currently a party to any material legal proceedings, and to management’s knowledge, none is threatened.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the results of operations, financial condition and liquidity position of the Group for the years ended June 30, 2026, 2025 and 2024 should be read in conjunction with the accompanying financial statements and related notes of the Group included elsewhere in this proxy statement/prospectus. The following discussion contains forward-looking statements that reflect the Group’s future plans, estimates, beliefs and expected performance. The following discussion and analysis of the financial condition and results of operations of the Group covers periods prior to the consummation of the Acquisition described elsewhere in this proxy statement/prospectus and does not reflect its effect on future periods. For an understanding of pro forma financial information including the effect of the Acquisition, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements” of this proxy statement/prospectus. The following discussion and analysis contains forward-looking statements that are based on management’s current expectations, estimates and projections about the Group’s business and operations, and involve risks and uncertainties. Actual results may differ materially from those currently anticipated and expressed in such forward-looking statements because of various factors, including those described in the sections titled “Cautionary Statement Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in this proxy statement/prospectus, all of which are difficult to predict. The Group does not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. References in this section to the “Group” are to Saltire Energy Limited, Foxley Energy Limited and their respective subsidiaries before giving effect to the Acquisition, unless the context otherwise requires or as otherwise indicated.
The combined financial statements of Saltire Energy Limited and Foxley Energy Limited included elsewhere in this proxy statement/prospectus have been prepared in accordance with generally accepted accounting practice in the United Kingdom (“UK GAAP”) defined as FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”). As qualifying entities under FRS 102, Saltire Energy Limited and Foxley Energy Limited have availed themselves of certain disclosure exemptions permitted thereunder with respect to parent company information, including, but not limited to, presentation of a statement of cash flow and related notes and disclosures and reduced related-party transaction disclosures in relation to compensation for key management personnel. UK GAAP differs in certain significant respects from accounting principles generally accepted in the United States of America (“US GAAP”). For a description of the differences and their effects on each of Saltire Energy Limited’s and Foxley Energy Limited’s consolidated profit and total comprehensive income and total equity, please refer to the note titled “Summary of significant differences between UK GAAP and US GAAP” to each of Saltire Energy Limited’s and Foxley Energy Limited’s annual financial statements for the year ended June 30, 2026 and June 30, 2025 included elsewhere in this proxy statement/prospectus. The financial statements presented in this proxy statement/prospectus include supplemental information not contained in the UK statutory accounts as filed with Companies House, including U.S. GAAP reconciliation notes, in order to comply with the requirements of the U.S. Securities and Exchange Commission.
Overview
The Group is a specialist provider of downhole oilfield equipment rental and related ancillary services to the upstream oil and gas industry, with operations spanning the United Kingdom, Africa, Middle East and the Far East. The Group’s principal activities comprise the provision of drilling equipment rental, torquing and testing, pressure testing, and repair and refurbishment services to oil and gas operators, drilling contractors, and oilfield services companies across the full well lifecycle, from exploration and appraisal drilling through to well completion, workover, intervention, and plugging and abandonment. The Group provides a range of well-construction equipment that forms part of the drill string, enabling offshore crews to drill safely and efficiently. The Group’s core product lines include drill pipe and drill collars, tubing and wash pipe, drilling jars, and pressure-control equipment and blowout-prevention-related equipment. The Group also provides a suite of supporting services, including pressure testing, torque-and-test services, repair, refurbishment, remanufacturing, machining, and welding, all of which are critical in maintaining equipment integrity and verifying that tools can withstand the high loads and pressures encountered during drilling and well operations. The Group has also established a new tubular inspection and storage business line, which commenced commercial operations
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in May 2026. In the fiscal year ended June 30, 2026, the Group generated revenue from customers operating across 55 countries, with the United Kingdom and the United Arab Emirates representing the largest contributors to consolidated revenues. In the fiscal year ended June 30, 2026, Saltire Energy Limited and Foxley Energy Limited generated a turnover of £22,153,375 and £12,594,343 on a consolidated basis, respectively, as compared to £27,930,691 and £14,500,030 respectively for the prior fiscal year. As of June 30, 2026, the Group had 109 employees.
The Group comprises Saltire Energy Limited, Foxley Energy Limited and their respective subsidiaries. Saltire Energy Limited was incorporated as a private limited company in Edinburgh, Scotland on May 3, 1996 under the name International Rig & Equipment Limited and has since changed its name to Saltire Energy Limited on June 23, 2008. Saltire Energy Limited’s subsidiaries include (i) Saltire Energy SDN. BHD., a private limited company incorporated in Malaysia, (ii) Saltire Energy PTE Limited, a private limited company incorporated in Singapore, (iii) Saltire Pressure Control Limited, a private limited company incorporated in Scotland, (iv) Saltire Energy (Norway) Ltd, a private limited company incorporated in Scotland, which is also in the process of being voluntarily struck off, and (v) Saltire Drilling Tools Limited, a private limited company incorporated in Scotland, which is currently in the process of being voluntarily struck off the register. Foxley Energy Limited was incorporated as a private limited company in Edinburgh, Scotland on June 28, 2016. Foxley Energy Limited’s subsidiaries include (i) Saltire Energy LLC, a limited liability company incorporated in the United Arab Emirates, (ii) Saltire Energy (KSA) LLC, a limited liability company incorporated in the Kingdom of Saudi Arabia, (iii) Saltire Energy Tubular Services Limited, a private limited company incorporated in Scotland, and (iv) Saltire Energy Europe SRL, a private limited company registered in Romania.
Market Factors and Trends
The Group’s business is driven by the level of upstream oil and gas activity, with upstream capital expenditure being the most important underlying factor. Increased drilling budgets and new field developments boost demand for rental tools and services, while lower commodity prices, higher interest rates, cost inflation, or investor pressure can lead operators to reduce activity, directly lowering rental demand. Other key underlying drivers include the number, length and complexity of wells drilled, brownfield maintenance and intervention work, decommissioning activity, and safety and certification requirements. The latest Baker Hughes worldwide rig count reports 1,919 rigs for September 2026, up 13 rigs from August 2026 and up 107 rigs from September 2025, a 5.9% year-on-year increase which reflects renewed drilling activity and broader recovery in global drilling activity whilst hydrocarbons prices have been elevated compared to prior year averages.
Recent geopolitical events, including the ongoing conflict in Ukraine and the US-Israel-Iran conflict, have tightened global oil and gas supply, creating upward pressure on commodity prices and driving increased drilling activity. However, the US-Israel-Iran conflict and the associated challenges of moving personnel and equipment into and around the region created logistical difficulty and adversely affected the Group’s Middle Eastern operations during the fiscal year ended June 30, 2026. Saltire Energy Limited’s Middle East turnover on a consolidated basis declined from £2,709,473 in the fiscal year ended June 30, 2025 to £1,032,568 in the fiscal year ended June 30, 2026, a decrease of £1,676,905, and Foxley Energy Limited’s Middle East turnover on a consolidated basis declined from £12,043,738 in the fiscal year ended June 30, 2025 to £10,152,847 in the fiscal year ended June 30, 2026, a decrease of £1,890,891. The US-Israel-Iran conflict has continued to evolve, and the ongoing geopolitical uncertainty may continue to cause volatility in oil and gas markets, supply chain disruptions, and broader macroeconomic impacts that could result in higher inflation worldwide.
Key Metrics
The Group uses a variety of financial and operating metrics to analyze the performance of its business, including:
• Turnover. The Group’s turnover is generated from the sale and rental of drilling equipment across its geographic markets. The Group analyzes the amount of turnover generated annually, as turnover is an indicator of overall business activity and demand for the Group’s products and services.
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During the years ended June 30, 2026, 2025 and 2024, Saltire Energy Limited’s turnover on a consolidated basis was £22,153,375, £27,930,691 and £29,770,879, respectively. During the years ended June 30, 2026, 2025 and 2024, Foxley Energy Limited’s turnover on a consolidated basis was £12,594,343, £14,500,030 and £13,504,733, respectively.
• Group Operating Profit. The Group analyzes the amount of operating profit generated annually, as operating profit is an indicator of profit derived from the Group’s core business operations. The Group tracks operating profit on an absolute nominal basis and as a percentage of turnover. During the year ended June 30, 2026, with respect to Saltire Energy Limited, operating profit was also evaluated on both a pre- and post-exceptional items basis.
During the year ended June 30, 2026, Saltire Energy Limited’s operating profit on a consolidated basis was £9,382,649 before exceptional items and £3,006,201 after exceptional items. During the years ended June 30, 2025 and 2024, Saltire Energy Limited’s operating profit on a consolidated basis was £14,406,324 and £14,182,847, respectively. During the years ended June 30, 2026, 2025 and 2024, Foxley Energy Limited’s operating profit on a consolidated basis was £3,625,378, £5,760,720 and £5,405,161, respectively.
• Equity Shareholders’ Funds. Equity shareholders’ funds represent the Group’s net assets and is an indicator of the Group’s overall financial health and capital base. The Group monitors equity shareholders’ funds to assess its ability to absorb losses, fund future growth and sustain long-term value for its shareholders. With respect to Foxley Energy Limited, equity shareholders’ funds include both equity attributable to owners of the parent company and non-controlling interests.
During the years ended June 30, 2026, 2025 and 2024, Saltire Energy Limited’s equity shareholders’ funds on a consolidated basis were £86,286,480, £85,055,305 and £75,570,171, respectively. During the years ended June 30, 2026, 2025 and 2024, Foxley Energy Limited’s equity shareholders’ funds on a consolidated basis were £27,496,637, £24,437,616 and £21,307,120, respectively.
Key Factors Affecting the Group’s Financial Condition and Results of Operations
The Group’s financial condition and results of operations depend to a significant extent on the following factors:
• Oil Price. The Group’s profitability is significantly influenced by prevailing oil prices and market expectations regarding future movements in oil price, as these factors directly affect the level of upstream capital expenditure and drilling activity undertaken by operators across the Group’s key geographic markets. Sustained periods of low or declining oil prices have historically led to reduced drilling budgets, lower rig utilization rates and deferrals of new field development programs, each of which reduces demand for the Group’s rental equipment and services and results in downward pressure on rental rates and turnover. Conversely, periods of elevated oil prices have generally supported increased drilling activity and higher demand for the Group’s products and services, although the Group’s ability to capitalize on such conditions may be constrained by the availability of equipment, supply chain capacity and the lead time required to mobilize assets to meet incremental demand. Oil price volatility, whether driven by changes in global supply and demand fundamentals, OPEC+ production decisions, macroeconomic conditions or geopolitical developments, introduces significant uncertainty into the Group’s forward planning.
• Economic Conditions. Broader macroeconomic conditions, including inflation, interest rate movements, currency fluctuations and recessionary pressures in the Group’s key markets, may reduce upstream operators’ willingness to commit capital expenditure to drilling programs, thereby reducing demand for the Group’s rental equipment and services. In particular, the United Kingdom government’s Energy Profits Levy (commonly referred to as the “windfall tax”) on oil and gas producers operating in the UK Continental Shelf has acted as a significant deterrent to future investment by North Sea operators, contributing to reduced drilling activity and project deferrals in a market that represents a material portion of the Group’s turnover. Changes in fiscal policy, tax regimes, regulatory frameworks or environmental legislation in any of the jurisdictions in which
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the Group operates may similarly discourage upstream investment, increase the Group’s cost of compliance or restrict the scope of permissible drilling activity, each of which could reduce the Group’s addressable market.
• Geopolitical Events. International conflicts, including the ongoing Russia-Ukraine conflict and hostilities in the Middle East, have caused and may continue to cause significant volatility in global oil and gas commodity prices and supply dynamics, which directly affects the level of upstream drilling activity upon which the Group’s turnover depends. Such conflicts may also result in the imposition of international sanctions, trade restrictions, supply chain disruptions and inflationary pressures that increase the Group’s operating costs and impair its ability to procure, transport and deploy equipment in affected regions. The Group has experienced temporary disruptions to its operations in certain geographic markets as a result of regional conflict, and any escalation or prolongation of such conflict could lead to further operational interruptions, reduced customer activity and delays in capital expenditure by operators, each of which would adversely affect the Group’s turnover and operating profit.
• Competition. The Group operates in a competitive market and competes with a number of established suppliers, certain of which are significantly larger and possess greater financial and operational resources. This competitive dynamic exerts downward pressure on pricing and margins, which may adversely affect the Group’s turnover and operating profit in periods of intensified competition or reduced drilling activity. The Group seeks to differentiate itself through product availability, breadth of equipment offering and a commitment to customer service, which management believes enables the Group to maintain and, where possible, expand its market share.
• Customer Concentration. The Group derives a significant portion of its revenue from a limited number of customers. For the year ended June 30, 2026, the Group’s top 10 customers, grouping affiliated entities within the major oilfield services groups, accounted for approximately 60% of the Group’s total revenue. SLB, when its affiliates are aggregated, accounted for more than 25% of the Group’s consolidated revenues in fiscal year 2026. The loss of, or a significant reduction in purchasing activity by, any one or more of these key customers could have a material adverse effect on the Group’s turnover, operating profit and cash flows. Many of the Group’s customer contracts are short-term in nature or terminable on relatively short notice, and the Group’s key customers’ own capital expenditure and drilling programs are subject to fluctuations driven by commodity prices, budgetary constraints and strategic priorities over which the Group has no control. A decision by any such customer to reduce its drilling activity, consolidate its supply chain, award contracts to competing suppliers or not renew its arrangements with the Group could result in a significant decline in turnover. The Group’s dependence on a concentrated customer base may also constrain its negotiating leverage with respect to pricing and commercial terms, which could limit the Group’s ability to pass through cost increases.
Components of Results of Operations
Saltire Energy Limited
Below is an explanation of certain key line items that appear in the consolidated statements of comprehensive income of Saltire Energy Limited.
Turnover
Turnover represents net income receivable from the sale and rental of drilling equipment. Turnover from the sale of drilling equipment is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Turnover in respect of the rental of drilling equipment is recognized on a straight line basis over the rental period.
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Cost of sales
Cost of sales comprises the direct costs associated with the sale and rental of drilling equipment, including direct materials, freight and logistics costs, refurbishment and maintenance expenditure incurred in restoring rental plant to operational condition following return from hire, and other direct costs attributable to the generation of turnover.
Distribution costs
Distribution costs comprise costs incurred in connection with the delivery and transportation of drilling equipment to and from customer locations.
Administrative expenses
Administrative expenses comprise staff costs (including wages and salaries, social security costs and pension contributions), professional and advisory fees (including audit and legal fees), premises-related costs, foreign exchange gains and losses arising on the retranslation of monetary assets and liabilities denominated in foreign currencies, operating lease charges, depreciation of non-rental tangible fixed assets, and other general and administrative overheads incurred in the ordinary course of business.
Other operating income
Other operating income represents sundry income that does not form part of Saltire Energy Limited’s principal trading activities.
Gain on sale of fixed assets
Gain on sale of fixed assets represents the net gain arising on the disposal of tangible fixed assets, being the excess of sale proceeds over the carrying value of the assets disposed of. Saltire Energy Limited periodically disposes of rental plant and other tangible fixed assets in the ordinary course of business as part of its ongoing fleet management and asset optimization activities.
Exceptional items
Exceptional items represent significant charges or credits that, by virtue of their nature, size or incidence, are presented separately in the consolidated statement of comprehensive income in order to provide a clearer understanding of the entity’s underlying financial performance. Such items may include, but are not limited to, costs arising from legacy employer pension and trust arrangements and write-downs of tangible fixed assets following periodic reconciliation exercises.
Interest receivable and similar income
Interest receivable and similar income represents interest on bank deposits.
Interest payable and similar expenses
Interest payable and similar expenses represents interest on bank overdrafts and loans, other interest on financial liabilities, and interest on finance leases and hire purchase contracts.
Total tax charge on profit
Total tax charge represents the sum of the tax currently payable and deferred tax. Current tax is based on taxable profit for the year and is calculated using tax rates that have been enacted or substantively enacted by the reporting end date. Deferred tax liabilities are generally recognized for all timing differences and deferred tax assets are recognized to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognized if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at
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each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized.
Foxley Energy Limited
Below is an explanation of certain key line items that appear in the consolidated statements of comprehensive income of Foxley Energy Limited.
Turnover
Turnover represents net income receivable from the sale and rental of drilling equipment. Turnover from the sale of drilling equipment is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Turnover in respect of the rental of drilling equipment is recognized on a straight line basis over the rental period.
Cost of sales
Cost of sales comprises the direct costs associated with the sale and rental of drilling equipment, including direct materials, freight and logistics costs, refurbishment and maintenance expenditure incurred in restoring rental plant and equipment to operational condition following return from hire, and other direct costs attributable to the generation of turnover.
Administrative expenses
Administrative expenses comprise staff costs (including wages and salaries, social security costs and pension contributions), professional and advisory fees (including audit fees), foreign exchange gains and losses arising on the retranslation of monetary assets and liabilities denominated in foreign currencies, depreciation of non-rental tangible fixed assets, bad debt provisions and write-offs, and other general and administrative overheads incurred in the ordinary course of business.
Other operating income
Other operating income represents sundry income that does not form part of Foxley Energy Limited’s principal trading activities.
Interest receivable and similar income
Interest receivable and similar income represents other interest income.
Interest payable and similar expenses
Interest payable and similar expenses represents interest on finance leases and hire purchase contracts.
Tax on profit
Tax on profit represents the sum of the tax currently payable and deferred tax. Current tax is based on taxable profit for the year and is calculated using tax rates that have been enacted or substantively enacted by the reporting end date. Deferred tax liabilities are generally recognized for all timing differences and deferred tax assets are recognized to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognized if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized.
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Currency translation differences
Transactions in currencies other than pounds sterling are recorded at the exchange rates prevailing at the dates of the transactions, and monetary assets and liabilities denominated in foreign currencies are retranslated at the rates prevailing at each reporting end date, with resulting gains and losses recognized in the statement of comprehensive income. The financial statements of overseas subsidiary undertakings are translated at the exchange rate ruling at the balance sheet date, with exchange differences arising on the retranslation of opening net assets and from the translation of the income and expenditure of foreign operations recognized in reserves through other comprehensive income.
Factors Affecting the Comparability of the Group’s Results
The Group’s historical financial condition and results of operations for the periods presented may not be comparable, either from period to period or going forward due to recognition of several exceptional items.
• During the year ended June 30, 2026, Saltire Energy Limited incurred exceptional costs of £1,879,350 in relation to historic employer pension and trust arrangements. In particular, this reflects the legacy inheritance tax (“IHT”) charges, including interest accrued, recognized during the period and which arose from the employee benefit trusts (“EBTs”) established by Saltire Energy Limited and one of its subsidiaries, Saltire Pressure Control Limited. During the same period, following a comprehensive exercise to ensure that tangible fixed assets on hand supported underlying records and remained in suitable condition for operational requirements, the directors of the company recognized a loss on disposal of fixed assets of £4,497,098 (which includes exceptional depreciation of £350,406 charged in connection with that exercise, in respect of assets with a net book value of £4,146,692) in the period.
• During the year ended June 30, 2024, Foxley Energy Limited recognized exceptional income of £1,245,770 due to a VAT repayment from HMRC following the conclusion of a HMRC review in connection with Foxley Energy Limited’s VAT registration and related inter-group transactions.
As a result of these significant expenses and income, the periods presented in the Group’s historical financial statements may not be comparable to one another and the Group’s future results of operations and financial results may also differ as a result.
Results of Operations
Comparison of the Year Ended June 30, 2026 to the Year Ended June 30, 2025
Saltire Energy Limited
The following table sets forth Saltire Energy Limited’s consolidated results of operations for the periods presented:
|
Year Ended June 30, |
||||||
|
2026 |
2025 |
|||||
|
£ |
||||||
|
Turnover |
22,153,375 |
|
27,930,691 |
|
||
|
Cost of sales |
(7,302,172 |
) |
(8,927,007 |
) |
||
|
Gross profit |
14,851,203 |
|
19,003,684 |
|
||
|
Distribution costs |
(121,503 |
) |
(36,660 |
) |
||
|
Administrative expenses |
(5,451,912 |
) |
(5,264,255 |
) |
||
|
Other operating income |
3,474 |
|
— |
|
||
|
Gain on sale of fixed assets |
101,387 |
|
703,555 |
|
||
|
Operating profit before exceptional items |
9,382,649 |
|
14,406,324 |
|
||
|
Exceptional items |
(6,376,448 |
) |
— |
|
||
|
Operating profit after exceptional items |
3,006,201 |
|
14,406,324 |
|
||
|
Interest receivable and similar income |
50,892 |
|
7,730 |
|
||
|
Interest payable and similar expenses |
(602,136 |
) |
(290,191 |
) |
||
|
Profit before taxation |
2,454,957 |
|
14,123,863 |
|
||
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|
Year Ended June 30, |
||||||
|
2026 |
2025 |
|||||
|
£ |
||||||
|
Current tax |
|
|
||||
|
Total current tax |
(1,010,177 |
) |
(3,756,572 |
) |
||
|
Deferred tax |
|
|
||||
|
Origination and reversal of timing differences |
228,104 |
|
(882,157 |
) |
||
|
Adjustment in respect of prior periods |
(441,709 |
) |
— |
|
||
|
Total deferred tax |
(213,605 |
) |
(882,157 |
) |
||
|
Total tax charge on profit |
(1,223,782 |
) |
(4,638,729 |
) |
||
|
Profit and total comprehensive income for the financial year |
1,231,175 |
|
9,485,134 |
|
||
Saltire Energy Limited’s results of operations for the year ended June 30, 2026 include operating profit presented on both a pre- and post-exceptional items basis. Operating profit before exceptional items is not a measure recognized under UK GAAP and should not be considered as an alternative to operating profit or any other measure of financial performance derived in accordance with UK GAAP. Management believes that presenting operating profit before exceptional items provides useful supplemental information to investors because it excludes significant charges that may obscure the underlying performance of the business. The following table reconciles operating profit before exceptional items to operating profit, the most directly comparable UK GAAP measure:
|
Year Ended June 30, |
|||||
|
2026 |
2025 |
||||
|
£ |
|||||
|
Operating profit before exceptional items |
9,382,649 |
|
14,406,324 |
||
|
Exceptional items |
(6,376,448 |
) |
— |
||
|
Operating profit after exceptional items |
3,006,201 |
|
14,406,324 |
||
Turnover
Turnover decreased by £5,777,316, or 20.7%, to £22,153,375 for the year ended June 30, 2026, as compared with £27,930,691 for the year ended June 30, 2025. The decrease was primarily driven by a £4,478,180 reduction in turnover derived from the United Kingdom geographical market, reflecting uncertainty in the regulatory environment, including the impact of the Energy Profits Levy (commonly referred to as the “windfall tax”) on UK oil and gas operators, together with a reduction in operator investment and activity levels in the region driven by anticipated changes in government energy policy. Turnover derived from the Middle East geographical market decreased by £1,676,905, primarily as a result of the US-Israel-Iran conflict and the associated challenges of moving personnel and equipment into and around the region, which created logistical difficulty and adversely affected the Group’s Middle Eastern operations. Elevated shipping costs during the period also rendered certain operations less economically viable, further contributing to the decline in turnover. Turnover derived from the Europe and the Americas geographical markets also decreased by £418,237 and £421,898, respectively. These declines were partially offset by increases in turnover derived from the Far East geographical market (which increased by £604,141) and the Africa geographical market (which increased by £613,763), reflecting improved activity levels in those regions during the period.
The following table analyzes turnover by geographical market for the periods presented:
|
Year Ended June 30, |
||||
|
2026 |
2025 |
|||
|
£ |
||||
|
United Kingdom |
11,216,906 |
15,695,086 |
||
|
Europe |
2,936,233 |
3,354,470 |
||
|
Middle East |
1,032,568 |
2,709,473 |
||
|
The Americas |
222,542 |
644,440 |
||
|
Far East |
4,098,351 |
3,494,210 |
||
|
Africa |
2,646,775 |
2,033,012 |
||
|
Total |
22,153,375 |
27,930,691 |
||
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Cost of sales
Cost of sales decreased by £1,624,835, or 18.2%, to £7,302,172 for the year ended June 30, 2026, as compared with £8,927,007 for the year ended June 30, 2025. The decrease was primarily attributable to lower direct costs associated with reduced levels of equipment rental and sale activity across the Group’s key geographic markets, including lower direct materials, freight and logistics costs, and reduced refurbishment and maintenance expenditure, consistent with the overall decline in turnover during the period.
Distribution costs
Distribution costs increased by £84,843, or 231.5%, to £121,503 for the year ended June 30, 2026, as compared with £36,660 for the year ended June 30, 2025. The increase was primarily due to higher freight and transportation costs incurred in connection with the shipping of equipment between locations for specific use in upcoming jobs during the period.
Administrative expenses
Administrative expenses increased by £187,657, or 3.6%, to £5,451,912 for the year ended June 30, 2026, as compared with £5,264,255 for the year ended June 30, 2025. The increase was primarily due to an increase of approximately £250,000 in property-related costs (reflecting the impact of a full year of rental costs associated with a facility acquired in June 2025), an increase of approximately £113,000 in professional fees (part of which were incurred in connection with the Acquisition), an increase of approximately £230,000 in sundry and general expenses, partially offset by a favorable swing in foreign exchange differences from a loss of £339,057 in the prior year to a gain of £22,963 in the current year.
Other operating income
Other operating income was £3,474 for the year ended June 30, 2026, as compared with £nil for the year ended June 30, 2025. Other operating income for the year ended June 30, 2026 comprised sundry income received during the period.
Gain on sale of fixed assets
Gain on sale of fixed assets decreased by £602,168, or 85.6%, to £101,387 for the year ended June 30, 2026, as compared with £703,555 for the year ended June 30, 2025. The decrease was primarily due to a lower volume and value of asset disposals in the ordinary course of business during the period, as distinct from the exceptional asset write-off described separately below.
Exceptional items
Exceptional items was £6,376,448 for the year ended June 30, 2026, as compared with £nil for the year ended June 30, 2025. During the year ended June 30, 2026, following a comprehensive exercise to ensure that tangible fixed assets on hand supported underlying records and remained in suitable condition for operational requirements, the directors recognized a loss on disposal of fixed assets of £4,497,098 (which includes exceptional depreciation of £350,406 charged in connection with that exercise, in respect of assets with a net book value of £4,146,692). Additionally, exceptional costs of £1,879,350 in relation to historic employer pension and trust arrangements were also incurred.
Interest receivable and similar income
Interest receivable and similar income increased by £43,162, or 558.4%, to £50,892 for the year ended June 30, 2026, as compared with £7,730 for the year ended June 30, 2025. The increase was primarily due to a significant increase in interest on bank deposits.
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Interest payable and similar expenses
Interest payable and similar expenses increased by £311,945, or 107.5%, to £602,136 for the year ended June 30, 2026, as compared with £290,191 for the year ended June 30, 2025. The increase was primarily driven by a significant increase in interest on finance leases and hire purchase contracts, which increased from £161,911 to £594,000 (an increase of £432,089), reflecting a reallocation of hire purchase charges to a group entity in the prior year, which lowered the prior year figure. This increase was partially offset by decreases in interest on bank overdrafts and loans (from £52,322 to £8,136) and other interest on financial liabilities (from £75,958 to £nil), the latter reflecting the repayment of the director’s loan during the year.
Total tax charge on profit
Total tax charge on profit decreased by £3,414,947, or 73.6%, to £1,223,782 for the year ended June 30, 2026, as compared with £4,638,729 for the year ended June 30, 2025. The decrease was primarily due to significant decreases in current tax (as a result of decrease in UK corporation tax on profits for the current period, favorable adjustments in UK taxes in respect of prior periods, and a significantly smaller amount of adjustments in foreign tax charge in respect of prior periods as compared to the previous financial year) and deferred tax.
Foxley Energy Limited
The following table sets forth Foxley Energy Limited’s consolidated results of operations for the periods presented:
|
Year Ended June 30, |
||||||
|
2026 |
2025 |
|||||
|
£ |
||||||
|
Turnover |
12,594,343 |
|
14,500,030 |
|
||
|
Cost of sales |
(5,825,677 |
) |
(7,550,743 |
) |
||
|
Gross profit |
6,768,666 |
|
6,949,287 |
|
||
|
Administrative expenses |
(3,164,011 |
) |
(1,225,616 |
) |
||
|
Other operating income |
20,723 |
|
37,049 |
|
||
|
Operating profit |
3,625,378 |
|
5,760,720 |
|
||
|
Interest receivable and similar income |
186 |
|
— |
|
||
|
Interest payable and similar expenses |
(199,475 |
) |
(214,033 |
) |
||
|
Profit before taxation |
3,426,089 |
|
5,546,687 |
|
||
|
Tax on profit |
(964,836 |
) |
(1,063,308 |
) |
||
|
Profit for the financial year |
2,461,253 |
|
4,483,379 |
|
||
|
Other comprehensive income/(expenditure) |
|
|
||||
|
Currency translation differences |
597,768 |
|
(1,352,883 |
) |
||
|
Total comprehensive income for the year |
3,059,021 |
|
3,130,496 |
|
||
Turnover
Turnover decreased by £1,905,687, or 13.1%, to £12,594,343 for the year ended June 30, 2026, as compared with £14,500,030 for the year ended June 30, 2025. The decrease was primarily due to an approximately £1.9 million decrease in turnover derived from the Middle East market as a result of the ongoing conflict in the Middle East which had impacted the operational capacity and resource shipment ability of certain neighboring countries. Elevated shipping costs during the period also rendered certain operations less economically viable, further contributing to the decline in turnover. Turnover derived from the United Kingdom and Europe geographical markets also decreased by £430,424 and £101,349, respectively. These declines were partially offset by an increase in turnover derived from the Far East geographical market, which increased by £516,977, reflecting improved activity levels in the region during the period.
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The following table analyzes turnover by geographical market for the periods presented:
|
Year Ended June 30, |
||||
|
2026 |
2025 |
|||
|
£ |
||||
|
United Kingdom |
1,558,351 |
1,988,775 |
||
|
Middle East |
10,152,847 |
12,043,738 |
||
|
Far East |
883,145 |
366,168 |
||
|
Europe |
— |
101,349 |
||
|
Total |
12,594,343 |
14,500,030 |
||
Cost of sales
Cost of sales decreased by £1,725,066, or 22.8%, to £5,825,677 for the year ended June 30, 2026, as compared with £7,550,743 for the year ended June 30, 2025. The decrease was primarily attributable to lower direct costs associated with reduced levels of equipment rental and sale activity, particularly in the Middle East market, including lower direct materials, freight and logistics costs, and reduced refurbishment and maintenance expenditure, consistent with the overall decline in turnover during the period.
Administrative expenses
Administrative expenses increased by £1,938,395, or 158.2%, to £3,164,011 for the year ended June 30, 2026, as compared with £1,225,616 for the year ended June 30, 2025. The increase was primarily due to (i) a bad debt write-off of approximately £534,000 in respect of EDI, (ii) net foreign currency loss of approximately £150,000 in the year ended June 30, 2026 as compared with net foreign currency gain of approximately £604,000 in the prior year, (iii) an increase of approximately £243,000 in respect of employee salaries for the new tubular inspection and storage business line and end-of-service gratuity costs for certain other employees, and (iv) an increase of approximately £419,000 in property-related costs, predominantly as a result of the opening of a new facility in Aberdeen to support the new tubular inspection and storage business line.
Other operating income
Other operating income decreased by £16,326, or 44.1%, to £20,723 for the year ended June 30, 2026, as compared with £37,049 for the year ended June 30, 2025. The decrease was primarily due to a decrease in sundry income.
Interest receivable and similar income
Interest receivable and similar income was £186 for the year ended June 30, 2026, as compared with £nil for the year ended June 30, 2025. The interest receivable and similar income for the year ended June 30, 2026 was due to other interest income.
Interest payable and similar expenses
Interest payable and similar expenses decreased by £14,558, or 6.8%, to £199,475 for the year ended June 30, 2026, as compared with £214,033 for the year ended June 30, 2025. The decrease was primarily due to a decrease in interest on finance leases and hire purchase contracts.
Tax on profit
Tax on profit decreased by £98,472, or 9.3%, to £964,836 for the year ended June 30, 2026, as compared with £1,063,308 for the year ended June 30, 2025. The decrease was primarily due to a significant decrease in deferred tax, which was partially offset by an increase in current tax.
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Currency translation differences
Currency translation differences was a gain of £597,768 for the year ended June 30, 2026, as compared with a loss of £1,352,883 for the year ended June 30, 2025. The movement from a translation loss to a translation gain was primarily attributable to favorable movements in foreign exchange rates on the retranslation of the net assets of Foxley Energy Limited’s overseas subsidiary undertakings, principally Saltire Energy LLC (denominated in UAE dirhams) and Saltire Energy Company (denominated in Saudi riyals), at the balance sheet date.
Comparison of the Year Ended June 30, 2025 to the Year Ended June 30, 2024
Saltire Energy Limited
The following table sets forth Saltire Energy Limited’s consolidated results of operations for the periods presented:
|
Year Ended June 30, |
||||||
|
2025 |
2024 |
|||||
|
£ |
||||||
|
Turnover |
27,930,691 |
|
29,770,879 |
|
||
|
Cost of sales |
(8,927,007 |
) |
(10,457,292 |
) |
||
|
Gross profit |
19,003,684 |
|
19,313,587 |
|
||
|
Distribution costs |
(36,660 |
) |
(40,637 |
) |
||
|
Administrative expenses |
(5,264,255 |
) |
(5,473,247 |
) |
||
|
Gain on sale of fixed assets |
703,555 |
|
383,144 |
|
||
|
Operating profit |
14,406,324 |
|
14,182,847 |
|
||
|
Interest receivable and similar income |
7,730 |
|
7 |
|
||
|
Interest payable and similar expenses |
(290,191 |
) |
(1,523,004 |
) |
||
|
Amounts written off investments |
— |
|
(282,000 |
) |
||
|
Profit before taxation |
14,123,863 |
|
12,377,850 |
|
||
|
Current tax |
|
|
||||
|
Total current tax |
(3,756,572 |
) |
(1,204,046 |
) |
||
|
Deferred tax |
|
|
||||
|
Origination and reversal of timing differences |
(882,157 |
) |
(1,304,143 |
) |
||
|
Adjustment in respect of prior periods |
— |
|
(828,031 |
) |
||
|
Total deferred tax |
(882,157 |
) |
(2,132,174 |
) |
||
|
Total tax charge on profit |
(4,638,729 |
) |
(3,336,220 |
) |
||
|
Profit and total comprehensive income for the financial year |
9,485,134 |
|
9,041,630 |
|
||
Turnover
Turnover decreased by £1,840,188, or 6.2%, to £27,930,691 for the year ended June 30, 2025, as compared with £29,770,879 for the year ended June 30, 2024. The decrease was primarily attributable to fluctuations in market demand and the timing of project completions and commencements across the various geographical markets.
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The following table analyzes turnover by geographical market for the periods presented:
|
Year Ended June 30, |
||||
|
2025 |
2024 |
|||
|
£ |
||||
|
United Kingdom |
15,695,086 |
16,042,257 |
||
|
Europe |
3,354,470 |
3,071,951 |
||
|
Middle East |
2,709,473 |
2,903,042 |
||
|
The Americas |
644,440 |
263,373 |
||
|
Far East |
3,494,210 |
4,988,744 |
||
|
Africa |
2,033,012 |
2,498,680 |
||
|
Other |
— |
2,832 |
||
|
Total |
27,930,691 |
29,770,879 |
||
Cost of sales
Cost of sales decreased by £1,530,285, or 14.6%, to £8,927,007 for the year ended June 30, 2025, as compared with £10,457,292 for the year ended June 30, 2024. The decrease was primarily attributable to lower direct costs associated with reduced levels of equipment rental and sale activity across the Group’s key geographic markets, including lower direct materials, freight and logistics costs, and reduced refurbishment and maintenance expenditure, consistent with the overall decline in turnover during the period.
Distribution costs
Distribution costs decreased by £3,977, or 9.8%, to £36,660 for the year ended June 30, 2025, as compared with £40,637 for the year ended June 30, 2024. The decrease was primarily due to lower freight and transportation costs incurred during the period, consistent with the overall reduction in activity levels.
Administrative expenses
Administrative expenses decreased by £208,992, or 3.8%, to £5,264,255 for the year ended June 30, 2025, as compared with £5,473,247 for the year ended June 30, 2024. The decrease was primarily due to a reduction in general and administrative overheads, reflecting Saltire Energy Limited’s continued focus on maintaining a tight cost base in response to prevailing market conditions.
Gain on sale of fixed assets
Gain on sale of fixed assets increased by £320,411, or 83.6%, to £703,555 for the year ended June 30, 2025, as compared with £383,144 for the year ended June 30, 2024. The increase was primarily due to a higher volume and value of asset disposals in the ordinary course of business during the period as part of Saltire Energy Limited’s ongoing fleet management and asset optimization activities.
Interest receivable and similar income
Interest receivable and similar income increased by £7,723 to £7,730 for the year ended June 30, 2025, as compared with £7 for the year ended June 30, 2024. The increase was primarily due to a significant increase in interest on bank deposits.
Interest payable and similar expenses
Interest payable and similar expenses decreased by £1,232,813, or 80.9%, to £290,191 for the year ended June 30, 2025, as compared with £1,523,004 for the year ended June 30, 2024. The decrease was primarily due to a significant decrease in interest on finance leases and hire purchase contracts (as a result of reallocation of hire purchase charges within the Group in the 2025 fiscal year, as well as expiry of certain hire purchase agreements which reached the end of their contractual terms), together with reductions in other interest on financial liabilities following a partial repayment of the director’s loan (which carried a balance of £3,446,748 as of June 30, 2025 as compared to £5,191,460 as of June 30, 2024) and in interest on bank overdrafts and loans.
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Amount written off investments
Amount written off investments was £nil for the year ended June 30, 2025, as compared with £282,000 for the year ended June 30, 2024. The amount written off investments for the year ended June 30, 2024 related to an impairment of the carrying value of a fixed asset investment in a subsidiary undertaking.
Total tax charge on profit
Total tax charge on profit increased by £1,302,509, or 39%, to £4,638,729 for the year ended June 30, 2025, as compared with £3,336,220 for the year ended June 30, 2024. The increase was primarily due to a significant increase in current tax (primarily as a result of an increase in UK corporation tax on profits for the current period and adverse adjustments in both UK and foreign taxes in respect of prior periods), which was partially offset by a decrease in deferred tax.
Foxley Energy Limited
The following table sets forth Foxley Energy Limited’s consolidated results of operations for the periods presented:
|
Year Ended June 30, |
||||||
|
2025 |
2024 |
|||||
|
£ |
||||||
|
Turnover |
14,500,030 |
|
13,504,733 |
|
||
|
Cost of sales |
(7,550,743 |
) |
(7,336,412 |
) |
||
|
Gross profit |
6,949,287 |
|
6,168,321 |
|
||
|
Administrative expenses |
(1,225,616 |
) |
(2,056,127 |
) |
||
|
Other operating income |
37,049 |
|
47,197 |
|
||
|
Exceptional item |
— |
|
1,245,770 |
|
||
|
Operating profit |
5,760,720 |
|
5,405,161 |
|
||
|
Interest payable and similar expenses |
(214,033 |
) |
(195,166 |
) |
||
|
Profit before taxation |
5,546,687 |
|
5,209,995 |
|
||
|
Tax on profit |
(1,063,308 |
) |
(997,382 |
) |
||
|
Profit for the financial year |
4,483,379 |
|
4,212,613 |
|
||
|
Other comprehensive income/(expenditure) |
|
|
||||
|
Currency translation differences |
(1,352,883 |
) |
59,261 |
|
||
|
Total comprehensive income for the year |
3,130,496 |
|
4,271,874 |
|
||
Turnover
Turnover increased by £995,297, or 7.4%, to £14,500,030 for the year ended June 30, 2025, as compared with £13,504,733 for the year ended June 30, 2024. The increase was primarily due to a significant increase in turnover in the Middle East market, which was partially offset by a decrease in turnover in the Europe market. The growth in the Middle East market was principally driven by the acceleration of long-term capacity and production expansion programs by state-owned oil companies in the region, whilst the contraction in the Europe market was attributable to a reduction in drilling activity, primarily as a result of an increasingly onerous fiscal regime.
The following table analyzes turnover by geographical market for the periods presented:
|
Year Ended June 30, |
||||
|
2025 |
2024 |
|||
|
£ |
||||
|
United Kingdom |
1,988,775 |
1,815,636 |
||
|
Middle East |
12,043,738 |
10,884,397 |
||
|
Far East |
366,168 |
332,069 |
||
|
Europe |
101,349 |
472,631 |
||
|
Total |
14,500,030 |
13,504,733 |
||
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Cost of sales
Cost of sales increased by £214,331, or 2.9%, to £7,550,743 for the year ended June 30, 2025, as compared with £7,336,412 for the year ended June 30, 2024. The increase was broadly in line with the growth in turnover during the period, reflecting higher direct costs associated with increased levels of equipment rental and sale activity, particularly in the Middle East market.
Administrative expenses
Administrative expenses decreased by £830,511, or 40.4%, to £1,225,616 for the year ended June 30, 2025, as compared with £2,056,127 for the year ended June 30, 2024. The decrease was primarily due to a favorable swing in foreign exchange differences, with a net foreign currency gain of approximately £604,000 recognized in the year ended June 30, 2025 as compared with a net foreign currency loss of approximately £250,000 in the prior year.
Other operating income
Other operating income decreased by £10,148, or 21.5%, to £37,049 for the year ended June 30, 2025, as compared with £47,197 for the year ended June 30, 2024. The decrease was primarily due to a decrease in sundry income.
Exceptional item
There was no exceptional item recognized for the year ended June 30, 2025, as compared with £1,245,770 for the year ended June 30, 2024. The exceptional item for the year ended June 30, 2024 was due to a VAT repayment from HMRC following the conclusion of a HMRC review in connection with Foxley Energy Limited’s VAT registration and related inter-group transactions.
Interest payable and similar expenses
Interest payable and similar expenses increased by £18,867, or 9.7%, to £214,033 for the year ended June 30, 2025, as compared with £195,166 for the year ended June 30, 2024. The increase was primarily due to reallocation of hire purchase charges within the Group in the 2025 fiscal year, the impact of which was partially offset by a change in the basis of recognition of hire purchase interest from the net method to the straight-line method during the same period.
Tax on profit
Tax on profit increased by £65,926, or 6.6%, to £1,063,308 for the year ended June 30, 2025, as compared with £997,382 for the year ended June 30, 2024. The increase was primarily due to an increase in foreign current tax on profits for the current period, which was partially offset by a decrease in deferred tax, reflecting the reversal of timing differences principally arising from accelerated capital allowances on Foxley Energy Limited’s tangible fixed asset base.
Currency translation differences
Currency translation differences was a loss of £1,352,883 for the year ended June 30, 2025, as compared with a gain of £59,261 for the year ended June 30, 2024. The movement from a translation gain to a translation loss was primarily attributable to adverse movements in foreign exchange rates on the retranslation of the net assets of Foxley Energy Limited’s overseas subsidiary undertakings, principally Saltire Energy LLC (denominated in UAE dirhams), at the balance sheet date.
Liquidity and Capital Resources
As of June 30, 2026, Saltire Energy Limited had £1,747,312 of cash and cash equivalents (on a consolidated basis) while Foxley Energy Limited had £616,400 of cash and cash equivalents (on a consolidated basis). The Group’s primary sources of liquidity and capital resources are existing cash, cash flows generated by operating activities, and if necessary, borrowings under the Overdraft Facility. The Group also utilizes hire purchase agreements to finance the acquisition of plant, equipment and motor vehicles, enabling the Group to preserve
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its cash resources while continuing to invest in its rental tool fleet and operational infrastructure. For more information on the Group’s finance lease obligations, see “— Contractual Obligations and Commitments” below. The Group’s principal liquidity needs have been, and are expected to continue to be, working capital, capital expenditures and debt service. The Group believes that its existing cash, cash flows generated by operating activities and available borrowings under the Overdraft Facility will be sufficient for at least the next 12 months to meet working capital requirements and anticipated capital expenditures.
Cash Flows
Saltire Energy Limited
The following table provides a summary of Saltire Energy Limited’s cash flow activity for the periods indicated:
|
Year Ended June 30, |
|||||||||
|
2026 |
2025 |
2024 |
|||||||
|
£ |
|||||||||
|
Net cash provided by (used in) operating activities |
(1,219,186 |
) |
4,430,601 |
|
9,066,400 |
|
|||
|
Net cash provided by (used in) investing activities |
6,451,928 |
|
1,260,954 |
|
1,062,026 |
|
|||
|
Net cash provided by (used in) financing activities |
(4,775,726 |
) |
(5,870,734 |
) |
(5,472,002 |
) |
|||
|
Net increase (decrease) in cash and cash equivalents |
457,016 |
|
(179,179 |
) |
4,656,424 |
|
|||
Cash Flows (Used In) Provided by Operating Activities
Net cash used in operating activities for the year ended June 30, 2026 was £1,219,186, compared with net cash provided by operating activities of £4,430,601 for the prior year. The change in cash (used in) provided by operating activities was primarily driven by a £7,527,098 reduction in cash generated from operations, along with an increase of £387,903 in interest paid, partially offset by a £2,265,214 reduction in income taxes paid. The significant decrease in cash generated from operations was due to a decrease in profit after tax, reflecting a lower turnover due to lower activity levels in the United Kingdom and Middle East, and recognition of exceptional items consisting of exceptional costs of £1,879,350 in relation to historic employer pension and trust arrangements and a loss on disposal of fixed assets of £4,497,098 (including exceptional depreciation of £350,406).
Net cash provided by operating activities for the year ended June 30, 2025 was £4,430,601, compared with £9,066,400 for the prior year. The £4,635,799 decrease was primarily due to a £3,939,766 reduction in cash generated from operations, an increase of £1,801,885 in income taxes paid, partially offset by a £1,105,852 reduction in interest paid. The reduction in cash generated from operations was primarily driven by adverse movements in working capital as a result of an increase in cash outflow relating to payables to creditors (decrease in creditors was £11,459,029 for the year ended June 30, 2025 as compared with £598,953 for the prior year).
Cash Flows (Used In) Provided by Investing Activities
Net cash provided by investing activities for the year ended June 30, 2026 was £6,451,928, compared with £1,260,954 for the prior year. The £5,190,974 increase was primarily driven by an increase of £4,407,146 in proceeds on disposal of tangible fixed assets, an increase of £43,162 in interest received and a decrease of £740,666 in purchase of tangible fixed assets.
Net cash provided by investing activities for the year ended June 30, 2025 was £1,260,954, compared with £1,062,026 for the prior year. The £198,928 increase was primarily driven by a £722,125 increase in proceeds on disposal of tangible fixed assets and a slight increase of £7,723 in interest received, partially offset by an increase of £531,460 in purchase of tangible fixed assets.
Cash Flows (Used In) Provided by Financing Activities
Net cash used in financing activities for the year ended June 30, 2026 was £4,775,726, compared with £5,870,734 for the prior year. The £1,095,008 reduction was driven by an equivalent decrease in payment of finance lease obligations.
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Net cash used in financing activities for the year ended June 30, 2025 was £5,870,734, compared with £5,472,002 for the prior year. The £398,732 increase was driven by a slight increase of £2,741 in payment of finance leases obligations and the £395,991 cash inflow derived from the refinancing of tangible fixed assets that was recognized in the prior year but which did not recur in the year ended June 30, 2025.
Foxley Energy Limited
The following table provides a summary of Foxley Energy Limited’s cash flow activity for the periods indicated:
|
Year Ended June 30, |
|||||||||
|
2026 |
2025 |
2024 |
|||||||
|
£ |
|||||||||
|
Net cash provided by (used in) operating activities |
7,245,036 |
|
7,322,009 |
|
5,634,990 |
|
|||
|
Net cash provided by (used in) investing activities |
(7,405,577 |
) |
(3,299,700 |
) |
(2,017,834 |
) |
|||
|
Net cash provided by (used in) financing activities |
(1,078,647 |
) |
(2,466,550 |
) |
(3,543,813 |
) |
|||
|
Net increase (decrease) in cash and cash equivalents |
(1,239,188 |
) |
1,555,759 |
|
73,343 |
|
|||
Cash Flows (Used In) Provided by Operating Activities
Net cash provided by operating activities for the year ended June 30, 2026 was £7,245,036, compared with £7,322,009 for the prior year. The £76,973 decrease was primarily driven by an increase of £164,109 in income taxes paid, partially offset by an increase of £72,578 in cash generated from operations and a £14,558 reduction in interest paid.
Net cash provided by operating activities for the year ended June 30, 2025 was £7,322,009, compared with £5,634,990 for the prior year. The £1,687,019 increase was primarily driven by an increase of £1,977,822 in cash generated from operations, partially offset by an increase of £18,867 in interest paid and an increase of £271,936 in income taxes paid. The increase in cash generated from operations was primarily due to favorable movements in working capital, principally reflecting an increase in trade and other payables during the period, which management attributes to the timing of supplier payments in the ordinary course of business (increase in creditors was £4,644,621 for the year ended June 30, 2025, compared with £1,510,489 for the year ended June 30, 2024).
Cash Flows (Used In) Provided by Investing Activities
Net cash used in investing activities for the year ended June 30, 2026 was £7,405,577, compared with £3,299,700 for the prior year. The £4,105,877 increase was primarily driven by an increase of £3,830,810 in purchase of tangible fixed assets, reflecting significant investment in the rental tool fleet and a decrease of £275,253 in proceeds on disposal of tangible fixed assets, partially offset by an increase of £186 in interest received.
Net cash used in investing activities for the year ended June 30, 2025 was £3,299,700, compared with £2,017,834 for the prior year. The £1,281,866 increase was primarily driven by an increase of £2,549,579 in purchase of tangible fixed assets, reflecting continued investment in the rental tool fleet, partially offset by £1,267,713 of proceeds on disposal of tangible fixed assets.
Cash Flows (Used In) Provided by Financing Activities
Net cash used in financing activities for the year ended June 30, 2026 was £1,078,647, compared with £2,466,550 for the prior year. The £1,387,903 decrease was entirely attributable to an equivalent decrease in payment of finance lease obligations.
Net cash used in financing activities for the year ended June 30, 2025 was £2,466,550, compared with £3,543,813 for the prior year. The £1,077,263 decrease was entirely attributable to an equivalent decrease in payment of finance lease obligations.
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Overdraft Facility
In June 2022, Saltire Energy Limited and certain of its subsidiaries (together, the “Borrowers”), entered into an uncommitted facility agreement with HSBC UK Bank plc (the “Overdraft Facility”). The Overdraft Facility provides for a multi-currency overdraft (with balance offset for sterling) with a maximum borrowing limit of £3,900,000, available to all of the Borrowers. Interest on sterling debit balances is charged at 2.250% per annum over the Bank of England Base Rate, and interest on non-sterling debit balances is charged at 2.250% per annum over the applicable currency base rate. The Overdraft Facility is secured by liens on substantially all of the fixed assets of the Borrowers. The Overdraft Facility contains customary covenants, including as to delivery of annual financial statements and quarterly management accounts, maintenance of assets, and valuation of any obligor’s assets subject to security in the lender’s favor. As of June 30, 2026, the Overdraft Facility remained undrawn.
Capital Expenditure
The Group’s capital expenditure primarily relates to capital investment in the Group’s rental tool fleet to increase or maintain rental or repair capacity, extend the useful life of drilling tools and related infrastructure, and acquire or upgrade property, plant and equipment. The amount of the Group’s capital expenditures is influenced by, among other things, demand for services, recovery of lost or damaged tools, schedules for refurbishing its various rental tools and equipment, cash flow generated by operations, and cash required for other purposes. The Group determines and allocates its budget for capital expenditure on an annual basis, and during growth cycles may invest in replacing end-of-life equipment and increasing the total size of the fleet, while in downturns the Group tends to restrict capital expenditure to essential replacements and, as a result, conserve cash.
Contractual Obligations and Commitments
The Group’s material contractual obligations arise from finance lease obligations, primarily hire purchase finance agreements, which are secured by standard securities as well as a floating charge over the group’s assets. Finance lease payments represent rentals payable by the company or group for certain items of plant and equipment and motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The standard lease term is 2 or 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. As of June 30, 2026, Saltire Energy Limited and Foxley Energy Limited had £4,041,031 and £634,186 of finance lease obligations on a consolidated basis, respectively. See Note 21, Finance lease obligations, to Saltire Energy Limited’s annual financial statements for the year ended June 30, 2026 and June 30, 2025 and Note 18, Finance lease obligations, to Foxley Energy Limited’s annual financial statements for the year ended June 30, 2026 and June 30, 2025.
The Group also has certain capital expenditure commitments in relation to acquisition of tangible fixed assets. As of June 30, 2026, Saltire Energy Limited’s and Foxley Energy Limited’s capital commitments on a consolidated basis were £1,677,016 and £129,643, respectively.
Off-Balance Sheet Arrangements
Save as described below, the Group does not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on the Group’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.
Saltire Energy Limited and Foxley Energy Limited are each party to an unlimited cross guarantee alongside each other and certain subsidiaries, including Saltire Pressure Control Limited, Saltire Drilling Tools Limited and Saltire Energy LLC. Under this arrangement, each party has guaranteed the obligations of the other parties to the cross guarantee. As of June 30, 2026, the potential liability under the cross guarantee was £nil for both Saltire Energy Limited and Foxley Energy Limited. See Note 26, Financial commitments, guarantees and contingent liabilities, to Saltire Energy Limited’s annual financial statements for the year ended June 30, 2026 and Note 23, Financial commitments, guarantees and contingent liabilities, to Foxley Energy Limited’s annual financial statements for the year ended June 30, 2026. While there was no potential liability as of June 30, 2026, any future borrowings by Saltire Energy Limited, Foxley Energy Limited, or any other party to the cross-guarantee arrangement could give rise to contingent liabilities for the other guarantor parties under the arrangement.
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Related Party Transactions
For a discussion of certain related party transactions of the Group, see the section entitled “Certain Related Party Transactions of the Group.”
Critical Accounting Policies and Estimates
The historical financial statements of the Group have been prepared in accordance with UK GAAP defined as FRS 102 and in its functional currency of the British pound sterling. The Group’s significant accounting policies are discussed in Note 1 “Accounting policies” in the notes to the Group’s audited combined financial statements included in this proxy statement/prospectus.
The preparation of financial statements in accordance with UK GAAP requires management to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. These estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant and are reviewed on an ongoing basis. Actual results may differ from those estimates.
Management considers the below estimates and assumptions to have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities. This discussion and analysis should be read in conjunction with the Group’s consolidated financial statements and related notes included elsewhere in this proxy statement/prospectus.
Carrying value of rental plant & equipment
Rental plant and equipment includes drilling equipment that the Group rents to its customers. These assets are continually refurbished to a very high standard on return from hire and this amongst other factors is reflected in their high residual values and low depreciation. The assessment of residual value requires the Group’s directors to exercise judgement including an annual reassessment based on current market conditions. A reduction in the estimated residual values of rental plant and equipment would result in higher depreciation charges being recognized over the remaining useful lives of the assets, which could have a material adverse effect on the Group’s reported operating profit. Given the significance of the rental plant and equipment asset base to the Group’s consolidated balance sheet, the directors consider this to be an area of significant estimation uncertainty.
Amounts due from related parties
Amounts owed from related parties are stated in the accounts at their transaction price less any appropriate provision for irrecoverable amounts. In determining if a provision is required, the Group’s directors exercise judgement, considering any specific indicators that the recoverability of the balance may be in doubt. As of June 30, 2026, the Group’s related party receivables represented a material balance on the consolidated balance sheet. As of June 30, 2026, Saltire Energy Limited and Foxley Energy Limited had £16,356,996 and £1,012,046 of related party receivables on a consolidated basis, respectively. The directors assess the recoverability of these amounts on an ongoing basis with reference to the financial condition of the relevant counterparties, the terms of the underlying arrangements, and any specific indicators that recovery may be in doubt.
Quantitative and Qualitative Disclosures About Market Risk
Foreign Currency Exchange Rate Risk
The Group’s international operations expose the Group to foreign currency exchange rate risk. During the years ended June 30, 2026 and 2025, approximately 36% and 31%, respectively, of the Group’s revenues were denominated in foreign currencies. The Group seeks to mitigate its exposure to foreign currency exchange rate risk by transacting in widely used local currencies, where possible, in each international jurisdiction in which it operates. This approach provides a degree of natural hedging by aligning the currency of the Group’s revenues and costs within each region, thereby reducing the Group’s net exposure to foreign currency fluctuations. Transactions in currencies other than pounds sterling are recorded at the prevailing exchange
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rates, and the financial statements of overseas subsidiary undertakings are translated into pounds sterling at the balance sheet date. As a result, fluctuations in foreign exchange rates may give rise to adverse or favorable translation variances in the Group’s reported results when converting to its reporting currency in pounds sterling.
Interest Rate Risk
The Group is exposed to changes in interest rates through its fixed rate finance lease obligations, which primarily comprise hire purchase finance agreements. As the Group’s finance lease obligations bear interest at fixed rates, changes in prevailing interest rates do not affect the Group’s cash interest payments in respect of those obligations during their term. However, the Group may be exposed to interest rate risk upon refinancing or entering into new finance lease arrangements at prevailing market rates. The Group is exposed to changes in market interest rates in relation to any borrowings under the Overdraft Facility. The terms of the Overdraft Facility do not obligate the Group to hedge interest rate exposure.
Commodity Price Risk
The market for the Group’s services is indirectly exposed to fluctuations in the prices of oil and natural gas to the extent such fluctuations impact drilling activity levels and thus impact the activity levels of the Group’s customers in the upstream oil and gas industry. The Group does not currently intend to hedge its indirect exposure to commodity price risk.
Credit Risk
The Group’s customers are primarily oil and gas operators, oilfield services companies, drilling contractors and tubular manufacturers. This concentration of counterparties operating in a single industry may increase the Group’s overall exposure to credit risk in that the counterparties may be similarly affected by changes in economic, regulatory or other conditions. The Group manages credit risk by carrying out due diligence on potential customers prior to agreeing to new contracts and by looking to work with well-established counterparties.
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INFORMATION ABOUT dti UPON THE CONSUMMATION OF THE acquisition
Directors and Executive Officers of DTI Upon the Consummation of the Acquisition
Upon the consummation of the Acquisition, the directors and executive officers of DTI are expected to remain unchanged as disclosed in Part III, Item 10 of DTI’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 6, 2026, which is incorporated by reference and supplemented by the following information:
Effective as of the conclusion of DTI’s 2026 Annual Meeting of Stockholders held on April 28, 2026, the DTI Board consists of seven directors: R. Wayne Prejean (Chairman of The DTI Board), John D. “Jack” Furst (Lead Independent Director), Curtis L. Crofford, Ira H. Green, Jr., Daniel J. Kimes, Eric C. Neuman and Jeremy D. Thigpen, each serving a one-year term expiring at DTI’s 2027 Annual Meeting of Stockholders. Ira H. Green, Jr., Daniel J. Kimes and Jeremy D. Thigpen were elected, and Messrs. Prejean, Crofford, Furst and Neuman were re-elected, at the 2026 Annual Meeting; Thomas M. “Roe” Patterson and C. Richard Vermillion ceased serving as directors upon the expiration of their terms at the 2026 Annual Meeting. DTI’s executive officers are R. Wayne Prejean (Chairman and Chief Executive Officer), David R. Johnson (Chief Financial Officer) and Michael W. Domino, Jr. (President, Directional Tool Rentals Division).
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unaudited pro forma condensed combined financial statements
The following unaudited pro forma condensed combined financial statements and the accompanying notes (collectively, the “Pro Forma Financial Information”) have been prepared to illustrate the estimated effects of the Acquisition contemplated by the SPA, dated October 8, 2026 and other activities described below.
The following transactions are expected to occur in accordance with the SPA at the Closing Date:
• Casing Technologies Group Limited, a private limited company incorporated in Scotland and wholly owned subsidiary of DTI will acquire 100% of the issued and outstanding share capital of Saltire and Foxley. Following consummation of the Acquisition, the Group and their respective subsidiaries will become indirect wholly owned subsidiaries of DTI.
• In exchange, the Buyer will transfer to the Sellers the Adjusted Closing Date Cash Consideration and the Closing Date Loan Note Consideration. The Adjusted Closing Date Cash Consideration payable to the Sellers will consist of Closing Date Cash Consideration of £60.3 million, adjusted by the Profit Ticker Amount and Agreed EBT Tax Liability Adjustment Amount, and reduced by any Known Leakage Amount and the Agreed Historic Lease Tax Amount (collectively, the “Cash Consideration Adjustments”). At Closing, the Closing Date Loan Note Consideration will be redeemed for 17,355,139 shares of DTI Common Stock, par value $0.0001 per share. The number of shares of DTI Common Stock is fixed and will not fluctuate based on changes in the market price of DTI Common Stock between signing and closing.
The following activities are anticipated to occur in connection with the Acquisition:
• In connection with the Acquisition, the Buyer will enter into new, long-term lease arrangements for operational properties owned by a related party of the Sellers. Prior to the closing of the Acquisition, the informal lease arrangements relating to these properties under the Historic Scottish Leases will be terminated with effect immediately before the commencement of the corresponding Property Lease upon or shortly following the closing of the Acquisition (the “Loxley Leases”). The properties include operational, warehouse, training, and pressure control locations utilized by the Group’s businesses.
• In connection with the Acquisition, DTI expects to (i) issue $135.0 million aggregate principal amount of senior secured bonds through a private placement (the “Bond Issuance”) and (ii) amend and restate its existing asset-based revolving line of credit facility (the “Revolving Line of Credit”, and collectively with the Bond Issuance, the “Financing”). Net proceeds from the Bond Issuance, together with an expected $3.3 million draw against the Revolving Line of Credit, are expected to be used to extinguish DTI’s existing single draw term loan (the “Term Loan”), repay the drawn portion of the pre-modification Revolving Line of Credit, finance a portion of the Adjusted Closing Date Cash Consideration and pay transaction expenses.
The Pro Forma Financial Information has been prepared under the following assumptions:
• The unaudited pro forma condensed combined balance sheet as of June 30, 2026 assumes that the Acquisition, Loxley Leases, and Financing had occurred on June 30, 2026.
• The unaudited pro forma condensed combined statements of income for the six months ended June 30, 2026 and for the year ended December 31, 2025 assume that the Acquisition, Loxley Leases, and Financing had occurred on January 1, 2025, the beginning of the earliest period presented.
The Pro Forma Financial Information has been compiled using, and should be read in conjunction with, the following:
• The historical unaudited consolidated financial statements and notes of DTI as of and for the six months ended June 30, 2026, included in the Quarterly Report on Form 10-Q filed by DTI with the SEC on August 7, 2026;
• The historical audited consolidated financial statements and notes of DTI as of and for the year ended December 31, 2025, included in the Annual Report on Form 10-K filed by DTI with the SEC on March 6, 2026;
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• The historical audited consolidated financial statements and notes of Saltire as of and for the years ended June 30, 2025 and June 30, 2026, included elsewhere in this proxy statement/prospectus;
• The historical audited consolidated financial statements and notes of Foxley as of and for the years ended June 30, 2025 and June 30, 2026, included elsewhere in this proxy statement/prospectus;
The Pro Forma Financial Information is for informational purposes only and is not necessarily indicative of what the actual combined results of operations and financial position of the combined company would have been had the Acquisition, Loxley Leases, and Financing taken place on the dates indicated, nor is it indicative of future combined results of operations or financial position of the combined company. The Pro Forma Financial Information is based on information available to management at the time of preparation and assumptions that management believes are reasonable and supportable. The pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. It is likely that the actual adjustments upon the finalization of the purchase price accounting will differ from the pro forma adjustments, and it is possible the differences may be material.
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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 2026
|
(In thousands) |
Drilling Tools |
Saltire and |
Transaction Accounting Adjustments |
Combined |
|||||||||||||||||||
|
Acquisition |
Other |
||||||||||||||||||||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Current assets |
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Cash |
$ |
2,520 |
|
$ |
3,133 |
$ |
(87,366 |
) |
(3A) |
$ |
131,625 |
|
(4A) |
$ |
14,508 |
|
|||||||
|
|
|
|
|
10,054 |
|
(3B) |
|
(48,605 |
) |
(4B) |
|
|
|||||||||||
|
|
|
|
|
— |
|
|
3,147 |
|
(4C) |
|
|
||||||||||||
|
Accounts receivable, net |
|
43,494 |
|
|
13,403 |
|
— |
|
|
— |
|
|
56,897 |
|
|||||||||
|
Related party note receivable, current |
|
1,541 |
|
|
10,452 |
|
(10,054 |
) |
(3B) |
|
— |
|
|
1,939 |
|
||||||||
|
Inventories |
|
20,160 |
|
|
868 |
|
— |
|
|
— |
|
|
21,028 |
|
|||||||||
|
Prepaid expenses and other current assets |
|
6,073 |
|
|
1,392 |
|
— |
|
|
— |
|
|
7,465 |
|
|||||||||
|
Total current assets |
|
73,788 |
|
|
29,248 |
|
(87,366 |
) |
|
86,167 |
|
|
101,837 |
|
|||||||||
|
Property, plant and equipment, net |
|
71,815 |
|
|
166,564 |
|
(92,641 |
) |
(3C) |
|
— |
|
|
145,738 |
|
||||||||
|
Operating lease right-of-use asset |
|
24,458 |
|
|
831 |
|
(100 |
) |
(3C) |
|
8,255 |
|
(4D) |
|
33,444 |
|
|||||||
|
Intangible assets, net |
|
38,143 |
|
|
34 |
|
35,716 |
|
(3C) |
|
— |
|
|
73,893 |
|
||||||||
|
Goodwill, net |
|
14,543 |
|
|
— |
|
23,771 |
|
(3C) |
|
— |
|
|
38,314 |
|
||||||||
|
Deferred financing costs, net |
|
512 |
|
|
— |
|
— |
|
|
125 |
|
(4C) |
|
637 |
|
||||||||
|
Related party note receivable, less current portion |
|
4,019 |
|
|
— |
|
— |
|
|
— |
|
|
4,019 |
|
|||||||||
|
Deposits and other long-term assets |
|
1,313 |
|
|
— |
|
— |
|
|
— |
|
|
1,313 |
|
|||||||||
|
Total assets |
$ |
228,591 |
|
$ |
196,677 |
$ |
(120,620 |
) |
$ |
94,547 |
|
$ |
399,195 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Current liabilities |
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Accounts payable |
$ |
14,544 |
|
$ |
3,863 |
$ |
— |
|
$ |
— |
|
$ |
18,407 |
|
|||||||||
|
Accrued expenses and other current |
|
8,759 |
|
|
5,567 |
|
4,343 |
|
(3D) |
|
(668 |
) |
(4B) |
|
18,001 |
|
|||||||
|
Current portion of operating lease liabilities |
|
4,639 |
|
|
304 |
|
— |
|
|
1,973 |
|
(4D) |
|
6,916 |
|
||||||||
|
Current maturities of long-term debt |
|
5,932 |
|
|
4,574 |
|
(4,574 |
) |
(3E) |
|
(5,000 |
) |
(4B) |
|
932 |
|
|||||||
|
Total current liabilities |
|
33,874 |
|
|
14,308 |
|
(231 |
) |
|
(3,695 |
) |
|
44,256 |
|
|||||||||
|
Operating lease liabilities, less current |
|
20,552 |
|
|
416 |
|
11 |
|
(3C) |
|
6,282 |
|
(4D) |
|
27,261 |
|
|||||||
|
Revolving line of credit |
|
39,330 |
|
|
— |
|
— |
|
|
(36,433 |
) |
(4B) |
|
6,169 |
|
||||||||
|
|
|
|
|
— |
|
|
3,272 |
|
(4C) |
|
|
||||||||||||
|
Long-term debt, less current portion |
|
8,957 |
|
|
1,624 |
|
(1,624 |
) |
(3E) |
|
131,625 |
|
(4A) |
|
134,078 |
|
|||||||
|
|
|
|
|
— |
|
|
(6,504 |
) |
(4B) |
|
|
||||||||||||
|
Deferred tax liabilities, net |
|
6,157 |
|
|
29,608 |
|
(9,672 |
) |
(3F) |
|
— |
|
|
26,093 |
|
||||||||
|
Total liabilities |
|
108,870 |
|
|
45,956 |
|
(11,516 |
) |
|
94,547 |
|
|
237,857 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Shareholders’ equity |
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Common stock |
|
4 |
|
|
1 |
|
(1 |
) |
(3C) |
|
— |
|
|
6 |
|
||||||||
|
|
|
|
|
2 |
|
(3A) |
|
— |
|
|
|
||||||||||||
|
Less: Treasury stock, at cost |
|
(2,192 |
) |
|
— |
|
— |
|
|
— |
|
|
(2,192 |
) |
|||||||||
|
Additional paid-in-capital |
|
132,528 |
|
|
— |
|
40,956 |
|
(3A) |
|
— |
|
|
173,484 |
|
||||||||
|
Accumulated deficit |
|
(10,670 |
) |
|
145,718 |
|
(145,718 |
) |
(3C) |
|
— |
|
|
(15,013 |
) |
||||||||
|
|
|
|
|
(4,343 |
) |
(3D) |
|
— |
|
|
|
||||||||||||
|
Accumulated other comprehensive income |
|
41 |
|
|
— |
|
— |
|
|
— |
|
|
41 |
|
|||||||||
|
Total Drilling Tools International shareholders’ equity |
|
119,711 |
|
|
145,719 |
|
(109,104 |
) |
|
— |
|
|
156,326 |
|
|||||||||
|
Non-controlling interest |
|
10 |
|
|
5,002 |
|
— |
|
|
— |
|
|
5,012 |
|
|||||||||
|
Total equity |
|
119,721 |
|
|
150,721 |
|
(109,104 |
) |
|
— |
|
|
161,338 |
|
|||||||||
|
Total liabilities and shareholders’ equity |
$ |
228,591 |
|
$ |
196,677 |
$ |
(120,620 |
) |
$ |
94,547 |
|
$ |
399,195 |
|
|||||||||
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Table of Contents
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2026
|
(In thousands, except share and per share data) |
Drilling Tools |
Saltire |
Transaction Accounting Adjustments |
Combined |
||||||||||||||||||||||
|
Acquisition |
Other |
|||||||||||||||||||||||||
|
Revenue, net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Tool rental |
$ |
58,482 |
|
$ |
18,807 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
77,289 |
|
|||||||||
|
Product sale |
|
17,549 |
|
|
3,658 |
|
|
— |
|
|
|
— |
|
|
|
21,207 |
|
|||||||||
|
Total revenue, net |
|
76,031 |
|
|
22,465 |
|
|
— |
|
|
|
— |
|
|
|
98,496 |
|
|||||||||
|
Costs and other deductions: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Cost of tool rental revenue |
|
15,405 |
|
|
5,158 |
|
|
— |
|
|
|
— |
|
|
|
20,563 |
|
|||||||||
|
Cost of product sale revenue |
|
6,620 |
|
|
1,593 |
|
|
— |
|
|
|
— |
|
|
|
8,213 |
|
|||||||||
|
Selling, general, and administrative expense |
|
40,122 |
|
|
5,693 |
|
|
— |
|
|
|
(148 |
) |
(4AA |
) |
|
45,667 |
|
||||||||
|
Depreciation and amortization expense |
|
13,843 |
|
|
— |
|
|
6,873 |
|
(3AA |
) |
|
— |
|
|
|
20,716 |
|
||||||||
|
Interest expense, net |
|
2,124 |
|
|
972 |
|
|
(487 |
) |
(3BB |
) |
|
6,461 |
|
(4BB |
) |
|
9,070 |
|
|||||||
|
Gain on asset disposal |
|
(2 |
) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|||||||||
|
Other operating and non-operating expense, |
|
1,882 |
|
|
2,351 |
|
|
— |
|
|
|
— |
|
|
|
4,233 |
|
|||||||||
|
Total costs and other deductions |
|
79,994 |
|
|
15,767 |
|
|
6,386 |
|
|
|
6,313 |
|
|
|
108,460 |
|
|||||||||
|
Income (loss) before income tax expense |
|
(3,963 |
) |
|
6,698 |
|
|
(6,386 |
) |
|
|
(6,313 |
) |
|
|
(9,964 |
) |
|||||||||
|
Income tax benefit (expense) |
|
633 |
|
|
(1,138 |
) |
|
1,085 |
|
(3CC |
) |
|
1,422 |
|
(4CC |
) |
|
2,002 |
|
|||||||
|
Net income (loss) |
$ |
(3,330 |
) |
$ |
5,560 |
|
$ |
(5,301 |
) |
|
$ |
(4,891 |
) |
|
$ |
(7,962 |
) |
|||||||||
|
Less: Net income (loss) attributable to non-controlling interest |
|
(2 |
) |
|
354 |
|
|
(344 |
) |
(3DD |
) |
|
— |
|
|
|
8 |
|
||||||||
|
Net income (loss) attributable to Drilling Tools International shareholders |
$ |
(3,328 |
) |
$ |
5,206 |
|
$ |
(4,957 |
) |
|
$ |
(4,891 |
) |
|
$ |
(7,970 |
) |
|||||||||
|
Basic loss per share |
$ |
(0.09 |
) |
|
|
|
|
|
|
|
|
$ |
(0.15 |
) |
||||||||||||
|
Diluted loss per share |
$ |
(0.09 |
) |
|
|
|
|
|
|
|
|
$ |
(0.15 |
) |
||||||||||||
|
Basic weighted-average common shares outstanding |
|
35,202,327 |
|
|
|
|
|
|
|
|
|
|
52,557,466 |
|
||||||||||||
|
Diluted weighted-average common shares outstanding |
|
35,202,327 |
|
|
|
|
|
|
|
|
|
|
52,557,466 |
|
||||||||||||
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Table of Contents
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2025
|
(In thousands, except share and per share data) |
Drilling Tools |
Saltire |
Transaction Accounting Adjustments |
Combined |
||||||||||||||||||||||
|
Acquisition |
Other |
|||||||||||||||||||||||||
|
Revenue, net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Tool rental |
$ |
129,562 |
|
$ |
39,034 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
168,596 |
|
|||||||||
|
Product sale |
|
30,064 |
|
|
5,827 |
|
|
— |
|
|
|
— |
|
|
|
35,891 |
|
|||||||||
|
Total revenue, net |
|
159,626 |
|
|
44,861 |
|
|
— |
|
|
|
— |
|
|
|
204,487 |
|
|||||||||
|
Costs and other deductions: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Cost of tool rental revenue |
|
28,911 |
|
|
13,587 |
|
|
— |
|
|
|
— |
|
|
|
42,498 |
|
|||||||||
|
Cost of product sale revenue |
|
12,369 |
|
|
2,564 |
|
|
— |
|
|
|
— |
|
|
|
14,933 |
|
|||||||||
|
Selling, general, and administrative expense |
|
82,239 |
|
|
9,125 |
|
|
— |
|
|
|
(290 |
) |
(4AA |
) |
|
91,074 |
|
||||||||
|
Depreciation and amortization expense |
|
27,290 |
|
|
— |
|
|
13,746 |
|
(3AA |
) |
|
— |
|
|
|
41,036 |
|
||||||||
|
Interest expense, net |
|
5,053 |
|
|
822 |
|
|
(784 |
) |
(3BB |
) |
|
13,054 |
|
(4BB |
) |
|
18,145 |
|
|||||||
|
Loss on asset disposal |
|
65 |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
65 |
|
|||||||||
|
Goodwill impairment |
|
1,901 |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
1,901 |
|
|||||||||
|
Other operating and non-operating expense, |
|
4,654 |
|
|
(938 |
) |
|
4,343 |
|
(3EE |
) |
|
— |
|
|
|
8,059 |
|
||||||||
|
Total costs and other deductions |
|
162,482 |
|
|
25,160 |
|
|
17,305 |
|
|
|
12,764 |
|
|
|
217,711 |
|
|||||||||
|
Income (loss) before income tax expense |
|
(2,856 |
) |
|
19,701 |
|
|
(17,305 |
) |
|
|
(12,764 |
) |
|
|
(13,224 |
) |
|||||||||
|
Income tax benefit (expense) |
|
(905 |
) |
|
(3,121 |
) |
|
3,010 |
|
(3CC |
) |
|
2,874 |
|
(4CC |
) |
|
1,858 |
|
|||||||
|
Net income (loss) |
$ |
(3,761 |
) |
$ |
16,580 |
|
$ |
(14,295 |
) |
|
$ |
(9,890 |
) |
|
$ |
(11,366 |
) |
|||||||||
|
Less: Net income (loss) attributable to non-controlling interest |
|
— |
|
|
892 |
|
|
(687 |
) |
(3DD |
) |
|
— |
|
|
|
205 |
|
||||||||
|
Net income (loss) attributable to Drilling Tools International shareholders |
$ |
(3,761 |
) |
$ |
15,688 |
|
$ |
(13,608 |
) |
|
$ |
(9,890 |
) |
|
$ |
(11,571 |
) |
|||||||||
|
Basic loss per share |
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
$ |
(0.22 |
) |
||||||||||||
|
Diluted loss per share |
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
$ |
(0.22 |
) |
||||||||||||
|
Basic weighted-average common shares outstanding |
|
35,533,268 |
|
|
|
|
|
|
|
|
|
|
52,888,407 |
|
||||||||||||
|
Diluted weighted-average common shares outstanding |
|
35,533,268 |
|
|
|
|
|
|
|
|
|
|
52,888,407 |
|
||||||||||||
101
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. Basis of Pro Forma Presentation
The Pro Forma Financial Information has been prepared in accordance with Article 11 of Regulation S-X (“Article 11 of Regulation S-X”), and the assumptions set forth herein. The pro forma adjustments include transaction accounting adjustments, which reflect the application of required accounting for the Acquisition, Loxley Leases, and Financing. Article 11 of Regulation S-X permits presentation of reasonably estimable synergies and dis-synergies that have occurred or are reasonably expected to occur (“Management’s Adjustments”). DTI has elected not to present Management’s Adjustments as the specificity of the timing and nature of such items is still under evaluation as of the date of this proxy statement/prospectus.
The historical consolidated financial statements of DTI were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reported in U.S. dollars (“USD”). The historical consolidated financial statements of Saltire and Foxley were prepared in accordance with Financial Reporting Standard 102, as issued by the Financial Reporting Council of the United Kingdom and Republic of Ireland (“U.K. GAAP” or “FRS 102”) and reported in British Pounds Sterling (“GBP”). Refer to Note 2 for the adjustments identified by management to convert Saltire’s and Foxley’s historical consolidated financial statements prepared in accordance with U.K. GAAP to DTI’s basis of accounting under U.S. GAAP.
DTI has a fiscal year-end of December 31. Saltire and Foxley have a fiscal year-end of June 30. Under Reg S-X Rule 11-02(c)(3), if the fiscal year end of an acquired entity differs from the acquirer’s fiscal year end by more than one fiscal quarter, the acquired entity’s income statement must be brought up to within one fiscal quarter of the acquirer’s fiscal year end, if practicable. Accordingly, financial information of Saltire and Foxley for the six months ended June 30, 2026, and the year ended December 31, 2025, has been prepared for purposes of the preparation of the unaudited pro forma condensed combined financial statements.
The unaudited pro forma condensed combined statements of income were prepared using:
• The historical unaudited condensed consolidated statement of comprehensive income of DTI for the six months ended June 30, 2026;
• The historical audited consolidated statement of comprehensive income of DTI for the year ended December 31, 2025;
• The historical unaudited combined statements of income of Saltire and Foxley for the six months ended June 30, 2026, which have been derived by taking the historical audited consolidated statement of income for the fiscal year ended June 30, 2026 and subtracting the historical unaudited consolidated statement of income for the six months ended December 31, 2025; and
• The historical unaudited combined statements of income of Saltire and Foxley for the year ended December 31, 2025, which have been derived by taking the historical audited consolidated statement of income for the fiscal year ended June 30, 2025, subtracting the historical unaudited consolidated statement of income for the six months ended December 31, 2024, and adding the historical unaudited consolidated statement of income for the six months ended December 31, 2025.
All dollar figures in this section are presented in thousands, except per share information, unless otherwise stated.
Accounting for the Acquisition
The Acquisition will be accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”). The Acquisition will be accounted for as a single business combination because the acquisition of Saltire and Foxley is contemplated under a single SPA with the same shareholders, who collectively own 100% of the issued and outstanding share capital of both entities, and provides for a single aggregate purchase price. The Acquisition is expected to occur concurrently at the Closing Date and was negotiated as a single transaction.
102
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In accordance with the criteria of ASC 805, DTI will be treated as the accounting acquirer, as it is transferring cash and issuing equity interests as consideration for the Acquisition. In addition, DTI’s shareholders will retain a majority voting interest in the combined entity, and the combined entity’s board of directors and senior management will be substantially the same as those of DTI prior to the Acquisition. When combined with the other indicators considered, these factors result in DTI being the accounting acquirer. Accordingly, Saltire’s and Foxley’s tangible and identifiable intangible assets acquired, and their liabilities assumed, will be recorded at their estimated fair values on the Closing Date and the excess of the purchase price over the estimated fair value of the net assets acquired will be recorded as goodwill.
Preliminary purchase price consideration
The preliminary purchase price consideration expected to be transferred on the Closing Date is primarily comprised of the estimated fair values of the Adjusted Closing Date Cash Consideration and 17,355,139 shares of DTI Common Stock. The number of shares of DTI Common Stock to be issued is fixed and will not fluctuate based on changes in the market price of DTI Common Stock between the signing and closing. The calculation of the preliminary purchase price consideration is as follows (in thousands, except share and per share amounts):
|
Adjusted Closing Date Cash Consideration(1) |
£ |
61,411 |
|
|
Payoff of Company Debt(2) |
|
4,675 |
|
|
Preliminary cash consideration in GBP |
£ |
66,086 |
|
|
Foreign exchange rate(3) |
|
1.322 |
|
|
Preliminary cash consideration in USD |
$ |
87,366 |
|
|
Shares of DTI Common Stock to be issued |
|
17,355,139 |
|
|
DTI share price |
$ |
2.36 |
|
|
Closing Date Loan Note Consideration(4) |
$ |
40,958 |
|
|
Preliminary purchase price consideration |
$ |
128,324 |
____________
(1) The Adjusted Closing Date Cash Consideration payable to the Sellers will consist of £60.3 million, adjusted by the Profit Ticker Amount and Agreed EBT Tax Liability Adjustment Amount, and reduced by any Known Leakage Amount, and the Agreed Historic Lease Tax Amount (collectively, the “Cash Consideration Adjustments”).
(2) Represents the settlement of Saltire’s and Foxley’s Company Debt, consisting of finance lease obligations, in cash at the Closing Date of the Acquisition.
(3) Closing GBP to USD exchange rate as of October 5, 2026.
(4) Represents the estimated fair value of 17,355,139 shares of DTI Common Stock to be issued at the Closing Date of the Acquisition in settlement of the Consideration Loan Notes, calculated using the per share price of DTI Common Stock as of October 5, 2026.
The purchase price consideration applied in the Pro Forma Financial Information is preliminary and subject to modification based on the final purchase price. This will likely result in a difference from the preliminary purchase consideration calculated above, and that difference may be material. For example, with other assumptions held constant, an increase or decrease of 20% in the price per DTI Common Stock will produce the following purchase price consideration and the corresponding goodwill (in thousands, except stock price):
|
Changes in Stock Price |
DTI |
Estimated |
Estimated |
||||||
|
As presented |
$ |
2.36 |
$ |
128,324 |
$ |
23,771 |
|||
|
20% increase |
$ |
2.83 |
$ |
136,516 |
$ |
31,963 |
|||
|
20% decrease |
$ |
1.89 |
$ |
120,132 |
$ |
15,579 |
|||
Preliminary purchase price allocation
The allocation of the purchase price consideration, including any related tax effects, is preliminary and pending finalization of various estimates, inputs and analyses used in the valuation assessment of the specifically identifiable tangible and intangible assets acquired. This preliminary determination is subject to further assessment and adjustments pending additional information sharing between the parties, more detailed third-party appraisals, and other potential adjustments. In accordance with ASC 805, any changes to the preliminary allocation will be
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Table of Contents
limited to information relating to facts and circumstances that existed as of the Closing Date that, if known, would have affected the measurement of the amounts recognized as of that date. The purchase accounting is expected to be finalized during the ASC 805 measurement period, which will not exceed one year from the Closing Date. Any resulting measurement period adjustments may be material and could result in changes to the amounts allocated to acquired assets, assumed liabilities, deferred taxes and goodwill.
The preliminary allocation of the purchase price consideration is as follows (in thousands):
|
Estimated |
|||
|
Cash |
$ |
13,187 |
|
|
Accounts receivable, net |
|
13,403 |
|
|
Related party note receivable, current |
|
398 |
|
|
Inventories |
|
868 |
|
|
Prepaid expenses and other current assets |
|
1,392 |
|
|
Property, plant and equipment, net(1) |
|
73,923 |
|
|
Operating lease right-of-use asset |
|
731 |
|
|
Intangible assets, net(2) |
|
35,750 |
|
|
Total assets acquired |
|
139,652 |
|
|
Accounts payable |
|
3,863 |
|
|
Accrued expenses and other current liabilities |
|
5,567 |
|
|
Current portion of operating lease liabilities |
|
304 |
|
|
Operating lease liabilities, less current portion |
|
427 |
|
|
Deferred tax liabilities, net |
|
19,936 |
|
|
Total liabilities assumed |
|
30,097 |
|
|
Non-controlling interest |
|
5,002 |
|
|
Net assets acquired |
|
104,553 |
|
|
Goodwill, net |
|
23,771 |
|
|
Total preliminary purchase price allocation |
$ |
128,324 |
|
____________
(1) Property, plant and equipment, net includes downhole drilling tools, pipe and tubular products, and pressure control equipment (collectively “Rental Tools”), vehicles, and other ancillary machinery and equipment. Substantially all of the fair value of the Property, plant and equipment, net is attributable to Rental Tools, valued using the indirect method under the cost approach. The estimated weighted average remaining useful life for Rental Tools is 6.4 years.
(2) Identifiable intangible assets include customer relationships and tradenames. The customer relationships were valued using the multi-period excess earnings method under the income approach and tradenames using a relief from royalty method under the income approach. Preliminary fair values of the customer relationships and tradenames are $2.7 million and $33.1 million, respectively, with estimated remaining useful lives of 15 years and 25 years.
2. Saltire and Foxley Combined, As Adjusted
The tables below present the historical financial information of Saltire and Foxley on a combined basis, reflecting eliminations for historical transactions between the two entities, adjustments to conform the historical financial information to U.S. GAAP, reclassifications to conform to the presentation of DTI’s consolidated financial statements, and conversion of the historical financial statements reporting currency from GBP to USD.
The elimination adjustments reflect the historical sales and purchases between Saltire and Foxley which are intercompany transactions when Saltire and Foxley are presented on a combined basis. Therefore, these are eliminated in the Pro Forma Historical Financial Information.
The U.S. GAAP adjustments reflect the material adjustments necessary to convert Saltire’s and Foxley’s historical financial information prepared in accordance with U.K. GAAP to U.S. GAAP. Upon the consummation of the Acquisition, management will perform a comprehensive review of the entities’ respective accounting policies. The adjustments presented below are preliminary and are subject to change as additional information becomes available and as additional analysis is performed.
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For purposes of the unaudited pro forma condensed combined financial information, the historical financial information of Saltire and Foxley was translated from GBP to USD using the following historical exchange rates:
|
Period of Exchange Rate |
£-to-$ |
|
|
Closing exchange rate at June 30, 2026 |
1.3257 |
|
|
Average exchange rate for the six months ended June 30, 2026 |
1.3450 |
|
|
Average exchange rate for the year ended December 31, 2025 |
1.3181 |
As Adjusted Balance Sheet
As of June 30, 2026
|
Drilling Tools International Corporation |
Historical |
Historical |
Historical |
Elimination |
Reclassification |
U.S. GAAP |
Saltire |
|||||||||||||||||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Current assets |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Cash |
Cash at bank and in hand |
£ |
1,747 |
£ |
616 |
£ |
— |
|
£ |
— |
|
£ |
— |
|
|
$ |
3,133 |
|||||||||
|
Accounts receivable, net |
|
— |
|
— |
|
— |
|
|
10,254 |
|
|
(145 |
) |
(2a |
) |
|
13,403 |
|||||||||
|
Related party note receivable, current |
|
— |
|
— |
|
— |
|
|
7,884 |
|
|
— |
|
|
|
10,452 |
||||||||||
|
Inventories |
Stocks |
|
29 |
|
618 |
|
— |
|
|
8 |
|
|
— |
|
|
|
868 |
|||||||||
|
Prepaid expenses and other current assets |
|
— |
|
— |
|
— |
|
|
1,136 |
|
|
(86 |
) |
(2b |
) |
|
1,392 |
|||||||||
|
Debtors |
|
24,340 |
|
6,070 |
|
(11,128 |
) |
|
(19,282 |
) |
|
— |
|
|
|
— |
||||||||||
|
Total current assets |
|
26,116 |
|
7,304 |
|
(11,128 |
) |
|
— |
|
|
(231 |
) |
|
|
29,248 |
||||||||||
|
Property, plant and equipment, net |
Tangible assets |
|
88,669 |
|
36,973 |
|
— |
|
|
— |
|
|
— |
|
|
|
166,564 |
|||||||||
|
Operating lease right-of-use asset |
|
— |
|
— |
|
— |
|
|
— |
|
|
627 |
|
(2b |
) |
|
831 |
|||||||||
|
Intangible assets, net |
Intangible assets |
|
— |
|
— |
|
— |
|
|
— |
|
|
26 |
|
(2c |
) |
|
34 |
||||||||
|
Total assets |
£ |
114,785 |
£ |
44,277 |
£ |
(11,128 |
) |
£ |
— |
|
£ |
422 |
|
|
$ |
196,677 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Accounts payable |
£ |
— |
£ |
— |
£ |
— |
|
£ |
2,914 |
|
£ |
— |
|
|
$ |
3,863 |
||||||||||
|
Accrued expenses and other current liabilities |
|
— |
|
— |
|
— |
|
|
4,229 |
|
|
(30 |
) |
(2d |
) |
|
5,567 |
|||||||||
|
Current portion of operating lease liabilities |
|
— |
|
— |
|
— |
|
|
— |
|
|
229 |
|
(2b |
) |
|
304 |
|||||||||
|
Current maturities of long-term debt |
|
— |
|
— |
|
— |
|
|
3,450 |
|
|
— |
|
|
|
4,574 |
||||||||||
|
Creditors: amounts falling due within one year |
|
8,363 |
|
13,358 |
|
(11,128 |
) |
|
(10,593 |
) |
|
— |
|
|
|
— |
||||||||||
|
Total current liabilities |
|
8,363 |
|
13,358 |
|
(11,128 |
) |
|
— |
|
|
199 |
|
|
|
14,308 |
||||||||||
|
Operating lease liabilities, less current portion |
|
— |
|
— |
|
— |
|
|
— |
|
|
314 |
|
(2b |
) |
|
416 |
|||||||||
|
Long-term debt, less current portion |
|
— |
|
— |
|
— |
|
|
1,225 |
|
|
— |
|
|
|
1,624 |
||||||||||
|
Deferred tax liabilities, net |
Deferred tax liability |
|
19,139 |
|
3,195 |
|
— |
|
|
— |
|
|
— |
|
|
|
29,608 |
|||||||||
|
Creditors: amounts falling due after more than one year |
|
997 |
|
228 |
|
— |
|
|
(1,225 |
) |
|
— |
|
|
|
— |
||||||||||
|
Total liabilities |
|
28,499 |
|
16,781 |
|
(11,128 |
) |
|
— |
|
|
513 |
|
|
|
45,956 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Common stock |
Called up share capital |
|
1 |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
|
1 |
|||||||||
|
Accumulated deficit |
Profit and loss reserves |
|
86,285 |
|
23,716 |
|
— |
|
|
— |
|
|
(84 |
) |
(2e |
) |
|
145,718 |
||||||||
|
Non-controlling interest |
Non-controlling interests |
|
— |
|
3,780 |
|
— |
|
|
— |
|
|
(7 |
) |
(2f |
) |
|
5,002 |
||||||||
|
Total equity |
|
86,286 |
|
27,496 |
|
— |
|
|
— |
|
|
(91 |
) |
|
|
150,721 |
||||||||||
|
Total liabilities and shareholders’ equity |
£ |
114,785 |
£ |
44,277 |
£ |
(11,128 |
) |
£ |
— |
|
£ |
422 |
|
|
$ |
196,677 |
||||||||||
105
Table of Contents
U.S. GAAP Adjustments
(2a) Represents the adjustment to measure the estimated credit loss allowance on the historical trade receivables under a current expected credit loss (“CECL”) model in accordance with ASC 326, Financial Instruments — Credit Losses (“ASC 326”). The adjustment reflects the incremental difference from the historical incurred-loss provision recognized under FRS 102.
(2b) Represents the recognition of operating lease right-of-use (“ROU”) assets and corresponding lease liabilities in accordance with ASC 842, Leases (“ASC 842”), and the derecognition of the historical prepayments recognized under FRS 102. There is no impact to the combined statements of income as operating lease expense is recognized on a straight-line basis under both ASC 842 and FRS 102.
(2c) Represents the derecognition of historical goodwill amortization recognized under FRS 102. In accordance with ASC 350, Intangibles — Goodwill and Other (“ASC 350”), goodwill is indefinite-lived and not amortized.
(2d) Represents the income tax effects of the U.S. GAAP adjustments described above using the statutory corporate tax rate applicable to the specific Saltire or Foxley entity in which each adjustment arises.
(2e) Represents the cumulative effect on accumulated deficit for the U.S. GAAP adjustments discussed within this section.
(2f) Represents the portion of the U.S. GAAP adjustments above attributable to non-controlling interests on the combined balance sheet.
106
Table of Contents
As Adjusted Statements of Income
For the Six Months Ended June 30, 2026
|
Drilling Tools International Corporation |
Historical |
Historical |
Historical |
Elimination |
Reclassification |
U.S. GAAP |
Saltire |
||||||||||||||||||||||
|
Revenue, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Tool rental |
£ |
— |
|
£ |
— |
|
£ |
— |
|
£ |
13,983 |
|
£ |
— |
|
|
$ |
18,807 |
|
||||||||||
|
Product sale |
|
— |
|
|
— |
|
|
— |
|
|
2,720 |
|
|
— |
|
|
|
3,658 |
|
||||||||||
|
Turnover |
|
10,902 |
|
|
6,353 |
|
|
(1,349 |
) |
|
(15,906 |
) |
|
— |
|
|
|
— |
|
||||||||||
|
Total revenue, net |
|
10,902 |
|
|
6,353 |
|
|
(1,349 |
) |
|
797 |
|
|
— |
|
|
|
22,465 |
|
||||||||||
|
Costs and other deductions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Cost of tool rental revenue |
|
— |
|
|
— |
|
|
— |
|
|
3,835 |
|
|
— |
|
|
|
5,158 |
|
||||||||||
|
Cost of product sale revenue |
|
— |
|
|
— |
|
|
— |
|
|
1,184 |
|
|
— |
|
|
|
1,593 |
|
||||||||||
|
Cost of sales |
|
2,753 |
|
|
3,059 |
|
|
(1,349 |
) |
|
(4,463 |
) |
|
— |
|
|
|
— |
|
||||||||||
|
Distribution costs |
|
66 |
|
|
— |
|
|
— |
|
|
(66 |
) |
|
— |
|
|
|
— |
|
||||||||||
|
Selling, general, and administrative |
Administrative expenses |
|
3,387 |
|
|
1,834 |
|
|
— |
|
|
(704 |
) |
|
(284 |
) |
(2aa |
) |
|
5,693 |
|
||||||||
|
Interest expense, net |
|
— |
|
|
— |
|
|
— |
|
|
723 |
|
|
— |
|
|
|
972 |
|
||||||||||
|
Gain on asset disposal |
Gain on sale of fixed assets |
|
(137 |
) |
|
— |
|
|
— |
|
|
137 |
|
|
— |
|
|
|
— |
|
|||||||||
|
Other operating and non-operating expense, net |
Other operating income |
|
— |
|
|
— |
|
|
— |
|
|
1,748 |
|
|
— |
|
|
|
2,351 |
|
|||||||||
|
Exceptional items |
|
1,273 |
|
|
— |
|
|
— |
|
|
(1,273 |
) |
|
— |
|
|
|
— |
|
||||||||||
|
Interest receivable and similar income |
|
(38 |
) |
|
— |
|
|
— |
|
|
38 |
|
|
— |
|
|
|
— |
|
||||||||||
|
Interest payable and similar expenses |
|
277 |
|
|
85 |
|
|
— |
|
|
(362 |
) |
|
— |
|
|
|
— |
|
||||||||||
|
Total costs and other deductions |
|
7,581 |
|
|
4,978 |
|
|
(1,349 |
) |
|
797 |
|
|
(284 |
) |
|
|
15,767 |
|
||||||||||
|
Income before income tax expense |
Profit before taxation |
|
3,321 |
|
|
1,375 |
|
|
— |
|
|
— |
|
|
284 |
|
|
|
6,698 |
|
|||||||||
|
Income tax expense |
|
— |
|
|
— |
|
|
|
|
(809 |
) |
|
(37 |
) |
(2bb |
) |
|
(1,138 |
) |
||||||||||
|
Tax on profit |
|
(542 |
) |
|
(267 |
) |
|
— |
|
|
809 |
|
|
— |
|
|
|
— |
|
||||||||||
|
Net income |
Profit and total comprehensive income for the financial year |
£ |
2,779 |
|
£ |
1,108 |
|
£ |
— |
|
£ |
— |
|
£ |
247 |
|
|
$ |
5,560 |
|
|||||||||
|
Less: Net income attributable to non-controlling interest |
Non-controlling interests |
£ |
— |
|
£ |
225 |
|
£ |
— |
|
£ |
— |
|
£ |
38 |
|
(2cc |
) |
$ |
354 |
|
||||||||
|
Net income attributable to Drilling Tools International shareholders |
£ |
2,779 |
|
£ |
883 |
|
£ |
— |
|
£ |
— |
|
£ |
209 |
|
|
$ |
5,206 |
|
||||||||||
107
Table of Contents
For the Year Ended December 31, 2025
|
Drilling Tools International Corporation |
Historical |
Historical |
Historical |
Elimination |
Reclassification |
U.S. GAAP |
Saltire |
||||||||||||||||||||||
|
Revenue, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Tool rental |
£ |
— |
|
£ |
— |
|
£ |
— |
|
£ |
29,614 |
|
£ |
— |
|
|
$ |
39,034 |
|
||||||||||
|
Product sale |
|
— |
|
|
— |
|
|
— |
|
|
4,421 |
|
|
— |
|
|
|
5,827 |
|
||||||||||
|
Turnover |
|
24,416 |
|
|
13,667 |
|
|
(4,585 |
) |
|
(33,498 |
) |
|
— |
|
|
|
— |
|
||||||||||
|
Total revenue, net |
|
24,416 |
|
|
13,667 |
|
|
(4,585 |
) |
|
537 |
|
|
— |
|
|
|
44,861 |
|
||||||||||
|
Costs and other deductions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Cost of tool rental revenue |
|
— |
|
|
— |
|
|
— |
|
|
10,308 |
|
|
— |
|
|
|
13,587 |
|
||||||||||
|
Cost of product sale revenue |
|
— |
|
|
— |
|
|
— |
|
|
1,945 |
|
|
— |
|
|
|
2,564 |
|
||||||||||
|
Cost of sales |
|
9,132 |
|
|
7,370 |
|
|
(4,585 |
) |
|
(11,917 |
) |
|
— |
|
|
|
— |
|
||||||||||
|
Distribution costs |
|
79 |
|
|
— |
|
|
— |
|
|
(79 |
) |
|
— |
|
|
|
— |
|
||||||||||
|
Selling, general, and administrative |
Administrative expenses |
|
5,481 |
|
|
1,332 |
|
|
— |
|
|
418 |
|
|
(308 |
) |
(2aa |
) |
|
9,125 |
|
||||||||
|
Interest expense, net |
|
— |
|
|
— |
|
|
— |
|
|
624 |
|
|
— |
|
|
|
822 |
|
||||||||||
|
Gain on asset disposal |
Gain on sale of fixed assets |
|
(520 |
) |
|
— |
|
|
— |
|
|
520 |
|
|
— |
|
|
|
— |
|
|||||||||
|
Other operating and non-operating expense, net |
Other operating income |
|
— |
|
|
(35 |
) |
|
— |
|
|
(677 |
) |
|
— |
|
|
|
(938 |
) |
|||||||||
|
Exceptional items |
|
12 |
|
|
— |
|
|
— |
|
|
(12 |
) |
|
— |
|
|
|
— |
|
||||||||||
|
Interest receivable and similar income |
|
(19 |
) |
|
— |
|
|
— |
|
|
19 |
|
|
— |
|
|
|
— |
|
||||||||||
|
Interest payable and similar expenses |
|
284 |
|
|
328 |
|
|
— |
|
|
(612 |
) |
|
— |
|
|
|
— |
|
||||||||||
|
Total costs and other deductions |
|
14,449 |
|
|
8,995 |
|
|
(4,585 |
) |
|
537 |
|
|
(308 |
) |
|
|
25,160 |
|
||||||||||
|
Income before income tax expense |
Profit before taxation |
|
9,967 |
|
|
4,672 |
|
|
— |
|
|
— |
|
|
308 |
|
|
|
19,701 |
|
|||||||||
|
Income tax expense |
|
— |
|
|
— |
|
|
— |
|
|
(2,334 |
) |
|
(34 |
) |
(2bb |
) |
|
(3,121 |
) |
|||||||||
|
Tax on profit |
|
(1,482 |
) |
|
(852 |
) |
|
— |
|
|
2,334 |
|
|
— |
|
|
|
— |
|
||||||||||
|
Net income |
Profit and total comprehensive income for the financial year |
£ |
8,485 |
|
£ |
3,820 |
|
£ |
— |
|
£ |
— |
|
£ |
274 |
|
|
$ |
16,580 |
|
|||||||||
|
Less: Net income attributable to non-controlling interest |
Non-controlling interests |
£ |
— |
|
£ |
628 |
|
£ |
— |
|
£ |
— |
|
£ |
49 |
|
(2cc |
) |
$ |
892 |
|
||||||||
|
Net income attributable to Drilling Tools International shareholders |
£ |
8,485 |
|
£ |
3,192 |
|
£ |
— |
|
£ |
— |
|
£ |
225 |
|
|
$ |
15,688 |
|
||||||||||
U.S. GAAP Adjustments
(2aa) Represents the estimated credit loss on the historical trade receivables recognized under the CECL model in accordance with ASC 326. The adjustment reflects the incremental difference from the historical incurred-loss provision recognized under FRS 102.
(2bb)Represents the income tax effects of the U.S. GAAP adjustments described above using the statutory corporate rate applicable to the specific Saltire or Foxley entity in which each adjustment arises.
(2cc) Represents the portion of the U.S. GAAP adjustments above related to profit attributable to non-controlling interests on the combined statements of income.
3. Acquisition Accounting Adjustments
Unaudited Pro Forma Condensed Combined Balance Sheet
(3A) Represents the estimated Adjusted Closing Date Cash Consideration and Closing Date Loan Note Consideration to be paid to the Sellers upon consummation of the Acquisition.
(3B) Represents the settlement of Saltire’s and Foxley’s Outstanding Receivables Amount for related-party financing arrangements that will be settled in cash at the Closing Date of the Acquisition.
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Table of Contents
(3C) Represents preliminary fair value adjustments to the Saltire and Foxley combined historical balance sheet, including property, plant and equipment, net, leases, intangible assets, net and goodwill in connection with the application of the acquisition method of accounting and the preliminary purchase price allocation described in Note 1.
(3D) Represents the accrual of estimated transaction costs directly attributable to the Acquisition that are expected to be incurred by DTI subsequent to June 30, 2026. These transaction costs are preliminary estimates; the final amounts and the resulting effect on DTI’s financial position may differ significantly.
(3E) Represents the settlement of Saltire’s and Foxley’s Company Debt, consisting of finance lease obligations, in cash at the Closing Date of the Acquisition.
(3F) Represents the pro forma adjustments to income tax related accounts on the balance sheet as a result of the Acquisition. The net decrease in deferred tax liabilities, net, is primarily driven by the tax effect from the fair value adjustments resulting from the preliminary purchase price allocation described in Note 1.
Unaudited Pro Forma Condensed Combined Statements of Income
(3AA) Represents the increase to depreciation and amortization expense based on the preliminary fair value adjustment and the estimated weighted average useful lives of the acquired property, plant and equipment, net and intangible assets, net.
(3BB) Represents the removal of the historical interest expense associated with finance lease liabilities settled in cash at the Closing Date of the Acquisition. Refer to tickmark (3E).
(3CC) Represents the pro forma income tax effect of the adjustments related to the Acquisition. The tax effect of the adjustments in tickmarks (3AA) and (3BB) was calculated by applying an estimated weighted blended statutory tax rate of 17.0% and 15.8% for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively, which reflects the jurisdictions in which the Group operates. The tax effect of the adjustment in tickmark (3EE) was calculated by applying the DTI U.S. blended statutory tax rate of 22.0%. Management believes this approach provides a reasonable basis for the pro forma income tax adjustments; however, the effective tax rate of the combined company could be significantly different depending on the mix of activities. This preliminary estimate is subject to further assessment and adjustments as additional information becomes available.
(3DD) Represents changes in the pro forma income attributable to non-controlling interests due to the acquisition accounting adjustments presented herein.
(3EE) Represents the estimated transaction costs of $4.3 million to be incurred by DTI subsequent to June 30, 2026, primarily consisting of investment banking, legal, and accounting advisory fees directly attributable to the Acquisition. These transaction costs are nonrecurring and will not affect the combined company’s statements of income beyond twelve months after the closing of the Acquisition. Transaction costs of $1.2 million are included in the historical statements of income of DTI for the six months ended June 30, 2026. DTI incurred less than $0.1 million of transaction costs for the year ended December 31, 2025. Transaction costs of $0.1 million related to the Acquisition are included in the historical unaudited statements of income of the Group for the six months ended June 30, 2026. Saltire and Foxley did not incur transaction costs for the year ended December 31, 2025.
4. Other Adjustments
Unaudited Pro Forma Condensed Combined Balance Sheet
(4A) Represents the net proceeds from the issuance of $135.0 million aggregate principal amount of senior secured bonds, net of $3.4 million of estimated debt issuance costs, resulting in net proceeds of $131.6 million and a corresponding increase in long-term debt.
(4B) Represents the repayment of $48.6 million of existing indebtedness, including DTI’s existing Term Loan, outstanding borrowings under its Revolving Line of Credit, and related accrued interest.
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(4C) Represents a $3.3 million draw under DTI’s modified Revolving Line of Credit, resulting in net proceeds of $3.2 million and $0.1 million of estimated debt issuance costs.
(4D) Represents the recognition of operating lease ROU assets and corresponding lease liabilities related to the Loxley Leases expected to become effective upon or shortly following the closing of the Acquisition.
Unaudited Pro Forma Condensed Combined Statements of Income
(4AA) Represents the adjustment to operating lease expense resulting from the recognition of the Loxley Leases expected to become effective upon or shortly following the closing of the Acquisition.
(4BB) Represents the estimated interest expense associated with the $135.0 million senior secured bonds and the $3.3 million draw under DTI’s modified Revolving Line of Credit, elimination of historical interest expense, including related deferred financing cost amortization and commitment fees associated with DTI’s existing Term Loan and pre-modification Revolving Line of Credit, which will be repaid in connection with Financing, as if transaction had occurred on January 1, 2025. The estimated net adjustment to interest expense is as follows:
|
Six Months |
Year Ended |
|||||||
|
Removal of historical interest expense associated with DTI’s existing Term Loan and Revolving Line of Credit |
$ |
(1,840 |
) |
$ |
(4,126 |
) |
||
|
Estimated interest expense associated with the senior secured bonds, including amortization of estimated debt issuance costs |
|
8,134 |
|
|
16,845 |
|
||
|
Estimated interest expense and commitment fees associated with the modified Revolving Line of Credit |
|
167 |
|
|
335 |
|
||
|
Net adjustment to Interest expense, net |
$ |
6,461 |
|
$ |
13,054 |
|
||
Interest expense on the senior secured bonds is based on an assumed annual interest rate of 12.0%, which reflects management’s current estimate as the terms of the senior secured bonds have not yet been finalized. The modified Revolving Line of Credit is expected to bear interest at the lower of (i) SOFR plus a 2.0% applicable margin or (ii) the applicable bank base rate plus a 1.0% margin. For purposes of the Pro Forma Financial Information, interest expense was calculated using an assumed annual interest rate of 5.89%, based on SOFR as of October 5, 2026 plus the applicable margin.
As the interest rate applicable to the senior secured bonds has not been finalized, and given that the interest rate applicable to the modified Revolving Line of Credit is variable, the following table presents the estimated effect of a change in the assumed annual interest rates:
|
Financing Arrangement |
Current |
Sensitivity |
Six Months |
Year Ended |
|||||||
|
Senior secured bonds ($135.0 million principal balance) |
12.00 |
% |
1.0% increase (decrease) |
$ |
647 |
$ |
1,341 |
||||
|
Revolving Line of Credit ($3.3 million borrowing) |
5.89 |
% |
0.125% increase (decrease) |
$ |
2 |
$ |
4 |
||||
(4CC) Represents the pro forma income tax effect of the adjustments related to the Financing, which was calculated by applying the DTI U.S. blended statutory tax rate of 22.0%. Management believes this approach provides a reasonable basis for the pro forma income tax adjustments; however, the effective tax rate of the combined company could be significantly different depending on the mix of activities. This preliminary estimate is subject to further assessment and adjustments as additional information becomes available.
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Table of Contents
5. Earnings per Share
As the unaudited pro forma condensed combined statements of income assume that the Acquisition had occurred on January 1, 2025, the beginning of the earliest period presented, the calculation of weighted-average shares outstanding for basic and diluted earnings per share assumes that the shares issuable relating to the Acquisition have been outstanding for the entirety of the period presented.
The table below presents the components of the pro forma earnings per share calculation (in thousands, except share and per share amounts):
|
Six Months |
Year Ended |
|||||||
|
Numerator: |
|
|
|
|
||||
|
Pro forma net loss attributable to Drilling Tools International stockholders – basic and diluted |
$ |
(7,970 |
) |
$ |
(11,571 |
) |
||
|
Denominator: |
|
|
|
|
||||
|
DTI historical weighted-average shares outstanding |
|
35,202,327 |
|
|
35,533,268 |
|
||
|
Shares issued in exchange for Company Capital Stock |
|
17,355,139 |
|
|
17,355,139 |
|
||
|
Pro forma weighted-average shares used in computing earnings per share – basic and diluted |
|
52,557,466 |
|
|
52,888,407 |
|
||
|
Loss per share – basic and diluted |
$ |
(0.15 |
) |
$ |
(0.22 |
) |
||
As of June 30, 2026 and December 31, 2025, DTI’s potentially dilutive securities consisted of options to purchase DTI Common Stock as well as restricted stock units. DTI excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net income per share for the periods presented because including them would have had an anti-dilutive effect:
|
Six Months |
Year Ended |
|||
|
Performance-based options outstanding |
534,064 |
534,063 |
||
|
Time-based options outstanding |
4,366,236 |
4,429,563 |
||
|
Time-based restricted stock units outstanding |
1,111,113 |
1,022,451 |
||
|
Total |
6,011,413 |
5,986,077 |
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Table of Contents
CERTAIN RELATED PARTY TRANSACTIONS OF DTI
Information regarding transactions with related persons of DTI is incorporated by reference from information contained in DTI’s Definitive Proxy Statement on Schedule 14A for its 2026 Annual Meeting of Stockholders filed with the SEC on March 13, 2026 under the section entitled “Certain Relationships and Related Party Transactions”.
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Table of Contents
CERTAIN RELATED PARTY TRANSACTIONS OF THE COMPANIES
Quipco
Quipco International Oil & Natural Gas Equipment LLC (“Quipco”) is managed by the brother of Craig Cameron, the managing director of Saltire Energy LLC (UAE), a subsidiary of Foxley Energy Limited. The Group engages Quipco in the ordinary course of its Middle Eastern operations for the manufacture and repair of equipment. During the year ended June 30, 2026, the Group paid Quipco $1,165,784 for equipment supply and repair services, and had an outstanding balance of $150,854 due to Quipco as at June 30, 2026. Additionally, as at June 30, 2026, Quipco had an outstanding balance of $398,281 due to Saltire Energy LLC in respect of equipment purchased from Saltire Energy LLC.
Cults Hotel
Saltire Energy Limited extended a loan in 2015 to Cults Hotel Limited (“Cults Hotel”), of which Michael David Loggie is a director, and as at June 30, 2026, the amount owed by Cults Hotel to Saltire Energy Limited was approximately £602,000. The loan has no maturity date, is non-interest bearing and is personally guaranteed by Michael David Loggie.
Loxley (Aberdeen) Limited
With respect to the Group’s real properties in Scotland, the Group leases these premises from Loxley (Aberdeen) Limited (“Loxley”), a company owned by Jack William Loggie, Michael David John Loggie and the landlord of the leased real properties. The occupation of these leased real properties in Scotland has been on a long-standing informal basis, and there are currently no formal leases entered into between the Group and Loxley. Formal leases will be put in place prior to or at Closing. During the year ended June 30, 2026, the Group recognized rent and related charges to Loxley of approximately £1,136,000 in respect of the leased real properties in Scotland.
Directors’ Loans
During the year ended June 30, 2026, Saltire Energy Limited maintained an outstanding loan to Michael David Loggie (the “MDL Loan”). As at June 30, 2026, the outstanding balance under the MDL Loan was approximately £747,000. The MDL Loan is interest-bearing, is unsecured, and is expected to be repaid prior to Closing.
Policy on Related Party Transactions
As private limited companies domiciled and incorporated in Scotland, Saltire Energy Limited and Foxley Energy Limited do not have a standalone written related party transaction policy. Any transaction, agreement or arrangement with a related party (being any director, senior manager, significant shareholder, or an immediate family member of any of the foregoing) is reviewed by the board of directors, who are required to consider the nature and terms of the transaction, the related party’s interest, the actual or apparent conflict of interest of the related party, whether the terms are comparable to those available from an unrelated third party, and confirm whether the transaction is in the best interests of the Group and its shareholders. Following Closing, the Group will be subject to DTI’s related party transactions review and approval procedures.
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Table of Contents
INTERESTS OF DIRECTORS AND OFFICERS IN THE acquisition
Interests of Directors and Executive Officers of DTI in the Acquisition
In considering the recommendation of the DTI Board that DTI stockholders vote in favor of the Share Issuance Proposal, DTI stockholders should be aware that, other than as described below, DTI’s directors and executive officers do not have any financial interests in the Acquisition that are different from, or in addition to, the interests of DTI stockholders generally. None of DTI’s directors or executive officers is a party to the SPA or the Rollover Documents or will receive any portion of the Consideration, and no DTI director or executive officer will receive any change-in-control, severance, transaction or retention payment, any new or accelerated equity award, or any new employment or compensation arrangement in connection with the Acquisition. Each current director was elected at one or more of the Prior Elections, which the Ratification Proposal (a condition to the Acquisition) would ratify. DTI’s directors and executive officers are expected to continue in their current roles following the Closing and will continue to benefit from DTI’s existing indemnification and directors’ and officers’ liability insurance arrangements, on the same basis as before the Acquisition.
Interests of Directors and Executive Officers of the Group in the Acquisition
In considering the Acquisition, the boards of directors of Saltire Energy Limited and Foxley Energy Limited were aware that the directors and executive officers of the Group had interests in the Acquisition that may be different from, or in addition to, the interests of the Saltire Stockholders and Foxley Stockholders generally, and the boards considered these interests in approving the Acquisition. These interests include (i) the receipt of Acquisition consideration for equity interests held directly and through the Loggie Family Trust and the Cansco Limited Employee Trust 2007, (ii) potential continued employment of Michael David Loggie and Jack William Loggie following the Closing; and (iii) transaction-related cash bonuses for certain directors and executive officers of the Group, with an aggregate amount payable under these arrangements not exceeding £400,000, and payment conditioned on the consummation of the Acquisition and, for certain individuals, continued employment until the Closing.
Employment of the Founders
Representatives of DTI and the Group have discussed the potential continued employment of Michael David Loggie and Jack William Loggie following the Closing. As of the date of this prospectus, no employment, retention, or severance arrangements have been entered into, and no compensation terms have been agreed. Any continued employment would be subject to mutually acceptable terms and conditions and the consummation of the acquisition.
114
Table of Contents
EXECUTIVE COMPENSATION OF DTI
Information regarding DTI’s executive compensation is incorporated by reference from the information contained in DTI’s Definitive Proxy Statement on Schedule 14A for its 2026 Annual Meeting of Stockholders filed with the SEC on March 13, 2026 under the sections entitled “Director Compensation,” “Equity Compensation Plan Information” and “Executive Compensation.”
115
Table of Contents
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND DIRECTORS AND
EXECUTIVE OFFICERS OF DTI
The following table sets forth the beneficial ownership of DTI’s Common Stock as of October 8, 2026 by the following individuals or entities: (i) each person or entity who is known by DTI to beneficially own 5% or more of the outstanding shares of DTI Common Stock, (ii) each named executive officer of DTI, (iii) each current member of the DTI Board, and (iv) all current executive officers and directors of DTI as a group.
Beneficial ownership is determined in accordance with the rules of the SEC, is not necessarily indicative of beneficial ownership for any other purpose, and does not constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares. As of October 8, 2026, there were 35,282,224 shares of DTI Common Stock issued and outstanding.
In computing the number of shares of DTI Common Stock beneficially owned by a person and the percentage ownership of that person, shares of DTI Common Stock that are subject to stock options or other rights held by that person that are currently exercisable or that will vest or become exercisable, as applicable, within 60 days of October 8, 2026, are deemed outstanding. These shares are not, however, deemed outstanding for the purpose of computing the percentage ownership of any other person.
|
Name and Address of Beneficial Owner |
Number of |
Percentage of |
|||
|
Five Percent Holders: |
|
||||
|
Sammons Capital, Inc.(1) |
2,512,366 |
7.1 |
% |
||
|
R. Wayne Prejean(2) |
2,359,615 |
6.7 |
% |
||
|
Jeffrey L. Gendell(3) |
2,439,737 |
6.9 |
% |
||
|
Michael W. Domino, Jr.(4) |
2,000,270 |
5.7 |
% |
||
|
|
|||||
|
Directors and Executive Officers: |
|
||||
|
Curtis L. Crofford(5) |
145,395 |
* |
|
||
|
John D. “Jack” Furst(6) |
694,996 |
2.0 |
% |
||
|
Ira H. Green, Jr.(7) |
17,207 |
* |
|
||
|
Daniel J. Kimes(8) |
216,575 |
* |
|
||
|
Eric C. Neuman(9) |
341,522 |
1.0 |
% |
||
|
R. Wayne Prejean(2) |
2,359,615 |
6.7 |
% |
||
|
Jeremy D. Thigpen(10) |
— |
— |
|
||
|
David R. Johnson(11) |
453,139 |
1.3 |
% |
||
|
Michael W. Domino, Jr.(4) |
2,000,270 |
5.7 |
% |
||
|
All Current Executive Officers and Directors as a Group (Nine Persons) |
6,228,719 |
17.7 |
% |
||
____________
* Less than 1%.
(1) Based on information obtained from a Schedule 13G filed with the SEC on May 13, 2026 by Sammons Capital, Inc. Sammons Capital Inc. has sole voting and dispositive power with respect to 2,512,366 shares of DTI Common Stock, representing approximately 7.1% of the outstanding shares of DTI Common Stock.
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Table of Contents
(2) Includes 438,529 shares of DTI Common Stock owned by Mr. Prejean directly, vested options to purchase 1,868,539 shares of DTI Common Stock, and 52,547 vested restricted stock units. Does not include 333,333 shares of DTI Common Stock subject to options held by Mr. Prejean, which vest on February 14, 2027. Does not include 213,270 unvested restricted stock units held by Mr. Prejean, which vest in substantially equal installments on February 28, 2027, 2028, and 2029. Does not include 85,721 unvested restricted stock units held by Mr. Prejean, which vest in substantially equal installments on February 27, 2027, 2028 and 2029. Does not include 257,162 unvested performance stock units held by Mr. Prejean, which are eligible to vest in substantially equal installments on February 27, 2027, 2028, and 2029 if the applicable performance goals are achieved. The address for Mr. Prejean is 10370 Richmond Avenue, Suite 1000, Houston, TX 77042.
(3) Based on information obtained from a Schedule 13G/A jointly filed with the SEC on February 6, 2026 by Tontine Financial Partners, L.P. (“TFP”), Tontine Management, L.L.C. (“TM”) and Jeffrey L. Gendell (collectively, the “Tontine Reporting Persons”), the Tontine Reporting Persons have shared voting and dispositive power with respect to 2,439,737 shares of DTI Common Stock, representing approximately 6.9% of the outstanding shares of DTI Common Stock, consisting of 2,065,233 shares of DTI Common Stock held directly by TFP and 374,504 shares of DTI Common Stock held directly by Tontine Capital Overseas Master Fund II, L.P. (“TCOM II”), in each case for which the Tontine Reporting Persons may be deemed to be the beneficial owners. TFP and TM each beneficially own, and have shared voting and dispositive power over, the 2,065,233 shares of DTI Common Stock held directly by TFP. TM is the general partner of TFP and has the power to direct the affairs of TFP, including directing the receipt of dividends from, or the proceeds from the sale of, the shares of DTI Common Stock directly owned by TFP. Mr. Gendell is the managing member of TM and in that capacity directs its operations. Mr. Gendell is also the managing member of Tontine Asset Associates, LLC, the general partner of TCOM II, and in that capacity directs its operations and has the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of DTI Common Stock directly owned by TCOM II. Each of the Tontine Reporting Persons may be deemed to beneficially own the shares of DTI Common Stock reported herein, but each disclaims beneficial ownership of such shares except to the extent of its or his pecuniary interest therein. The address of the principal business office of each of the Tontine Reporting Persons is 1 Sound Shore Drive, Suite 304, Greenwich, Connecticut 06830-7251.
(4) Includes 1,412,224 shares of DTI Common Stock owned by Mr. Domino directly, 17,782 vested restricted stock units, and vested options to purchase 570,264 shares of DTI Common Stock held by Mr. Domino. Does not include 100,000 shares of DTI Common Stock subject to options held by Mr. Domino, which vest on February 14, 2027. Does not include 75,829 unvested restricted stock units held by Mr. Domino, which vest in substantially equal installments on February 28, 2027, 2028 and 2029. Does not include 22,859 unvested restricted stock units held by Mr. Domino, which vest in substantially equal installments on February 27, 2027, 2028 and 2029. Does not include 68,577 unvested performance stock units held by Mr. Domino, which are eligible to vest in substantially equal installments on February 27, 2027, 2028, and 2029 if the applicable performance goals are achieved. The address for Mr. Domino is 10370 Richmond Avenue, Suite 1000, Houston, TX 77042.
(5) Includes 103,057 shares of DTI Common Stock and 42,338 vested restricted stock units. Does not include 23,438 unvested restricted stock units held by Mr. Crofford that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing.
(6) Includes 60,948 vested restricted stock units held by Mr. Furst, 118,252 shares of DTI Common Stock owned by Oak Stream Investors II, Ltd. (“Oak Stream”), and 458,737 shares of DTI Common Stock owned by JDF Long Term Trust (“JDF”). Includes vested options to purchase 57,059 shares of DTI Common Stock held by Mr. Furst. Does not include 23,438 unvested restricted stock units held by Mr. Furst that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing. Mr. Furst disclaims any beneficial ownership of any shares of DTI Common Stock held by Oak Stream and JDF, other than his pecuniary interest therein.
(7) Includes 17,207 shares of DTI Common Stock held by Mr. Green directly. Does not include 23,438 unvested restricted stock units held by Mr. Green that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing.
(8) Includes 216,575 shares of DTI Common Stock held by Mr. Kimes directly. Does not include 23,438 unvested restricted stock units held by Mr. Kimes that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing.
(9) Includes 280,574 shares of DTI Common Stock and 60,948 vested restricted stock units held by Mr. Neuman directly. Does not include 23,438 unvested restricted stock units held by Mr. Neuman that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing.
(10) Does not include 23,438 unvested restricted stock units held by Mr. Thigpen that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing.
(11) Includes 45,647 shares of DTI Common Stock owned by Mr. Johnson directly, 21,783 vested restricted stock units, and vested options to purchase 385,709 shares of DTI Common Stock held by Mr. Johnson. Does not include 126,666 shares of DTI Common Stock subject to options held by Mr. Johnson, which vest on February 14, 2027. Does not include 92,891 unvested restricted stock units held by Mr. Johnson, which vest in substantially equal installments on February 28, 2027, 2028, and 2029. Does not include 37,336 unvested restricted stock units held by Mr. Johnson, which vest in substantially equal installments on February 27, 2027, 2028 and 2029. Does not include 112,009 unvested performance stock units held by Mr. Johnson, which are eligible to vest in substantially equal installments on February 27, 2027, 2028, and 2029 if the applicable performance goals are achieved.
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Share Ownership of Certain Beneficial Owners and Directors and Executive Officers of DTI Upon Closing
The following table sets forth information regarding the expected beneficial ownership of DTI Common Stock as of immediately following the consummation of the transactions contemplated by the SPA, by the following individuals or entities: (i) each person or entity who is known by DTI and expected to beneficially own 5% or more of the outstanding shares of DTI Common Stock as of immediately following the consummation of the transactions contemplated by the SPA, (ii) each director and named executive officer of DTI, and (iii) all of the executive officers and directors of DTI as a group upon consummation of the transactions contemplated by the SPA.
Beneficial ownership is determined in accordance with the rules of the SEC, is not necessarily indicative of beneficial ownership for any other purpose, and does not constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares, or will be upon the consummation of the transactions contemplated by the SPA.
The information set forth in the table below has been determined assuming that the transactions contemplated by the SPA were consummated on October 8, 2026 and that there will be 52,637,363 shares of DTI Common Stock outstanding immediately following the consummation of the transactions contemplated by the SPA, based on the number of shares of DTI Common Stock outstanding as of October 8, 2026 and the 17,355,139 shares of DTI Common Stock that are issuable pursuant to the terms of the SPA.
In computing the number of shares of DTI Common Stock beneficially owned by a person and the percentage ownership of that person, shares of DTI Common Stock that are subject to stock options or other rights held by that person that are currently exercisable or that will vest or become exercisable, as applicable, within 60 days of October 8, 2026, are deemed outstanding; however, these shares are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
|
Name and Address of Beneficial Owner |
Number of |
Percentage of |
|||
|
Five Percent Holders: |
|
||||
|
[Saltire Group(1)] |
[17,355,139] |
[33.0] |
% |
||
|
|
|||||
|
Directors and Executive Officers: |
|
||||
|
Curtis L. Crofford(2) |
145,395 |
* |
|
||
|
John D. “Jack” Furst(3) |
694,996 |
1.3 |
% |
||
|
Ira H. Green, Jr.(4) |
17,207 |
* |
|
||
|
Daniel J. Kimes(5) |
216,575 |
* |
|
||
|
Eric C. Neuman(6) |
341,522 |
* |
|
||
|
R. Wayne Prejean(7) |
2,359,615 |
4.5 |
% |
||
|
Jeremy D. Thigpen(8) |
— |
— |
|
||
|
David R. Johnson(9) |
453,139 |
* |
|
||
|
Michael W. Domino, Jr.(10) |
2,000,270 |
3.8 |
% |
||
|
All Current Executive Officers and Directors as a Group (Nine Persons) |
6,228,719 |
11.8 |
% |
||
____________
* Less than 1%.
(1) [_].
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Table of Contents
(2) Includes 103,057 shares of DTI Common Stock and 42,338 vested restricted stock units. Does not include 23,438 unvested restricted stock units held by Mr. Crofford that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing.
(3) Includes 60,948 vested restricted stock units held by Mr. Furst, 118,252 shares of DTI Common Stock owned by Oak Stream Investors II, Ltd. (“Oak Stream”), and 458,737 shares of DTI Common Stock owned by JDF Long Term Trust (“JDF”). Includes vested options to purchase 57,059 shares of DTI Common Stock held by Mr. Furst. Does not include 23,438 unvested restricted stock units held by Mr. Furst that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing. Mr. Furst disclaims any beneficial ownership of any shares of DTI Common Stock held by Oak Stream and JDF, other than his pecuniary interest therein.
(4) Includes 17,207 shares of DTI Common Stock held by Mr. Green directly. Does not include 23,438 unvested restricted stock units held by Mr. Green that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing.
(5) Includes 216,575 shares of DTI Common Stock held by Mr. Kimes directly. Does not include 23,438 unvested restricted stock units held by Mr. Kimes that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing.
(6) Includes 280,574 shares of DTI Common Stock and 60,948 vested restricted stock units held by Mr. Neuman directly. Does not include 23,438 unvested restricted stock units held by Mr. Neuman that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing.
(7) Includes 438,529 shares of DTI Common Stock owned by Mr. Prejean directly, vested options to purchase 1,868,539 shares of DTI Common Stock, and 52,547 vested restricted stock units. Does not include 333,333 shares of DTI Common Stock subject to options held by Mr. Prejean, which vest on February 14, 2027. Does not include 213,270 unvested restricted stock units held by Mr. Prejean, which vest in substantially equal installments on February 28, 2027, 2028, and 2029. Does not include 85,721 unvested restricted stock units held by Mr. Prejean, which vest in substantially equal installments on February 27, 2027, 2028 and 2029. Does not include 257,162 unvested performance stock units held by Mr. Prejean, which are eligible to vest in substantially equal installments on February 27, 2027, 2028, and 2029 if the applicable performance goals are achieved. The address for Mr. Prejean is 10370 Richmond Avenue, Suite 1000, Houston, TX 77042.
(8) Does not include 23,438 unvested restricted stock units held by Mr. Thigpen that are scheduled to vest in full on April 29, 2027, which is more than 60 days after the date of this filing.
(9) Includes 45,647 shares of DTI Common Stock owned by Mr. Johnson directly, 21,783 vested restricted stock units, and vested options to purchase 385,709 shares of DTI Common Stock held by Mr. Johnson. Does not include 126,666 shares of DTI Common Stock subject to options held by Mr. Johnson, which vest on February 14, 2027. Does not include 92,891 unvested restricted stock units held by Mr. Johnson, which vest in substantially equal installments on February 28, 2027, 2028, and 2029. Does not include 37,336 unvested restricted stock units held by Mr. Johnson, which vest in substantially equal installments on February 27, 2027, 2028 and 2029. Does not include 112,009 unvested performance stock units held by Mr. Johnson, which are eligible to vest in substantially equal installments on February 27, 2027, 2028, and 2029 if the applicable performance goals are achieved.
(10) Includes 1,412,224 shares of DTI Common Stock owned by Mr. Domino directly, 17,782 vested restricted stock units, and vested options to purchase 570,264 shares of DTI Common Stock held by Mr. Domino. Does not include 100,000 shares of DTI Common Stock subject to options held by Mr. Domino, which vest on February 14, 2027. Does not include 75,829 unvested restricted stock units held by Mr. Domino, which vest in substantially equal installments on February 28, 2027, 2028 and 2029. Does not include 22,859 unvested restricted stock units held by Mr. Domino, which vest in substantially equal installments on February 27, 2027, 2028 and 2029. Does not include 68,577 unvested performance stock units held by Mr. Domino, which are eligible to vest in substantially equal installments on February 27, 2027, 2028, and 2029 if the applicable performance goals are achieved. The address for Mr. Domino is 10370 Richmond Avenue, Suite 1000, Houston, TX 77042.
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SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND DIRECTORS AND
EXECUTIVE OFFICERS OF the group
Foxley
The following table and the related notes set forth, to the best of Foxley’s knowledge, information on the beneficial ownership of Foxley’s Capital Stock as of the close of business on October 8, 2026 by:
• each Foxley Stockholder, or group of affiliated Foxley Stockholders, known by Foxley to beneficially own more than five percent (5%) of any class of Foxley’s Capital Stock on an as-converted to Common Stock basis;
• each of Foxley’s current directors;
• each of Foxley’s named executive officers; and
• all of Foxley’s current directors and executive officers as a group.
The percentage of ownership is based on 100 ordinary shares of £1.00 each outstanding on October 8, 2026. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Shares of Common Stock subject to Options that are currently exercisable or exercisable within sixty (60) days of October 8, 2026 are deemed to be outstanding and to be beneficially owned by the person holding such Option for the purpose of computing the percentage ownership of that person. These shares are not deemed to be outstanding, however, for the purpose of computing the percentage ownership of any other person. Further, the unvested Restricted Shares that are subject to vesting conditions are deemed outstanding and beneficially owned by the person holding such shares for the purpose of computing the percentage ownership of each person.
Except as indicated in the footnotes to this table, Foxley believes that the Foxley Stockholders named in this table have sole voting and investment power with respect to all shares of Common Stock shown to be beneficially owned by them, based on information provided to Foxley by such stockholders. Unless otherwise indicated, the address for each Foxley Stockholder listed below pre-Acquisition is c/o Foxley Energy Limited, 100 Union Street, Aberdeen, United Kingdom, AB10 1QR, and post-Acquisition is 10370 Richmond Avenue, Suite 1000, Houston, Texas 77042.
|
Name |
Number of |
Percentage |
|||
|
Directors and Named Executive Officers |
|
||||
|
Jack William Loggie |
50 |
50% |
|
||
|
Michael David John Loggie |
50 |
50 |
% |
||
|
All current executive officers and directors as a group (two persons) |
100 |
100 |
% |
||
Saltire
The following table and the related notes set forth, to the best of Saltire’s knowledge, information on the beneficial ownership of Saltire’s Capital Stock as of the close of business on October 8, 2026 by:
• each Saltire Stockholder, or group of affiliated Saltire Stockholders, known by Saltire to beneficially own more than five percent (5%) of any class of Saltire’s Capital Stock on an as-converted to Common Stock basis;
• each of Saltire’s current directors;
• each of Saltire’s named executive officers; and
• all of Saltire’s current directors and executive officers as a group.
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Table of Contents
The percentage of ownership is based on 1,240 ordinary shares of £1.00 each outstanding on October 8, 2026. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Shares of Common Stock subject to Options that are currently exercisable or exercisable within sixty (60) days of October 8, 2026 are deemed to be outstanding and to be beneficially owned by the person holding such Option for the purpose of computing the percentage ownership of that person. These shares are not deemed to be outstanding, however, for the purpose of computing the percentage ownership of any other person. Further, the unvested Restricted Shares that are subject to vesting conditions are deemed outstanding and beneficially owned by the person holding such shares for the purpose of computing the percentage ownership of each person.
Except as indicated in the footnotes to this table, Saltire believes that the Saltire Stockholders named in this table have sole voting and investment power with respect to all shares of Common Stock shown to be beneficially owned by them, based on information provided to Saltire by such stockholders. Unless otherwise indicated, the address for each Saltire Stockholder listed below pre-Acquisition is c/o Saltire Energy Limited, 100 Union Street, Aberdeen, United Kingdom, AB10 1QR, and post-Acquisition is 10370 Richmond Avenue, Suite 1000, Houston, Texas 77042.
|
Name |
Number of |
Percentage |
||
|
5% Stockholders |
||||
|
Cansco Limited Employee Trust 2007(1) |
620 |
50% |
||
|
The Loggie Family Trust(2) |
186 |
15% |
||
|
Directors and Named Executive Officers |
||||
|
Michael David Loggie |
434 |
35% |
||
|
All current executive officers and directors as a group (person) |
434 |
35% |
____________
(1) Optimus Corporate Services Limited serves as the corporate trustee service provider. Richard Brent Thomas and Pritesh Ramesh Desai, directors of Optimus Corporate Services Limited, are the co-trustees and hold full voting and dispositive power with respect to the shares held by the trust. The trust’s beneficiaries include the Michael David Loggie’s children, who do not have voting or dispositive power over such shares.
(2) Michael David Loggie and Jack William Loggie are co-trustees and share voting and dispositive power with respect to the shares held by the trust. The trust’s beneficiaries include Michael David Loggie’s children, who do not have voting or dispositive power over such shares.
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EXPERTS
The financial statements incorporated by reference in this prospectus and elsewhere in the registration statement have been so incorporated by reference in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing.
The financial statements of Saltire Energy Limited and Foxley Energy Limited included in this prospectus have been included in reliance on the report of AAB Audit & Accountancy Limited, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
LEGAL MATTERS
Winston Taylor LLP, counsel for DTI, will provide an opinion regarding the validity of the shares of DTI Common Stock to be issued in connection with the Acquisition and an opinion regarding certain legal matters relating to the U.S. federal tax treatment of the SPA with respect to DTI.
HOUSEHOLDING OF PROSPECTUS MATERIALS
Under SEC rules, a single prospectus may be sent to any household at which two or more shareholders reside if they appear to be members of the same family. This procedure, referred to as “householding,” reduces the volume of duplicate information that shareholders receive and reduces mailing and printing costs. In accordance with a notice sent to certain shareholders who share a single address, only one prospectus will be sent to that address unless any shareholder at that address requested that multiple sets of documents be sent.
DTI will promptly deliver to any DTI stockholder, upon written or oral request and without charge, a separate copy of this prospectus. If you received only one copy of this prospectus and wish to receive a separate copy for each DTI stockholder at your household, please contact DTI at the address or telephone number identified below. If you hold shares in street name, please contact your bank, brokerage firm or other nominee to request information on householding.
Drilling Tools International Corporation
Attention: Investor Relations
10370 Richmond Ave #1000
Houston, Texas 77042
(832) 742-8500
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Table of Contents
WHERE YOU CAN FIND MORE INFORMATION
The SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers, including DTI, who file electronically with the SEC. The address of that site is www.sec.gov.
You may also consult DTI’s website for more information concerning the Acquisition described in this prospectus. DTI’s website is https://www.drillingtools.com/. The information contained on DTI’s website and the SEC (except for the filings described below) is expressly not incorporated by reference into this prospectus.
DTI has filed with the SEC a registration statement, of which this prospectus forms a part. The Registration Statement registers the shares of DTI Common Stock to be issued to the Sellers in connection with the SPA. The Registration Statement, including the attached exhibits, contains additional relevant information about the shares of DTI Common Stock. The rules and regulations of the SEC allow DTI and the Group to omit certain information included in the Registration Statement from this prospectus.
In addition, the SEC allows DTI to disclose important information to you by referring you to other documents filed separately with the SEC. This information is considered to be a part of this prospectus, except for any information that is superseded or updated by information included directly in this prospectus.
This prospectus incorporates by reference the documents listed below that DTI has previously filed or will file with the SEC (other than information furnished pursuant to Item 2.02 or Item 7.01 of a Current Report on Form 8-K). They contain important information about DTI, its financial condition and other matters.
• Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 6, 2026.
• Quarterly Report on Form 10-Q for the quarters ended March 31, 2026 and June 30, 2026, filed with the SEC on May 8, 2026 and August 7, 2026, respectively.
• Current Reports on Form 8-K filed with the SEC on January 27, 2026, March 5, 2026, May 1, 2026, May 7, 2026, August 6, 2026, and October 8, 2026, respectively (other than the portions of those documents deemed to be furnished and not filed).
• Definitive Proxy Statement for the 2026 Annual Stockholder Meeting on Schedule 14A filed with the SEC on March 13, 2026.
• The description of DTI Common Stock filed as Exhibit 4.2 to DTI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 14, 2025.
In addition, DTI incorporates by reference any future filings it makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than information furnished pursuant to Item 2.02 or Item 7.01 of a Current Report on Form 8-K) (i) after the date of the initial filing and prior to the effectiveness of the Registration Statement and (ii) after the date of this prospectus and prior to the Closing. Such documents are considered to be a part of this prospectus, effective as of the date such documents are filed. In the event of conflicting information in these documents, the information in the latest filed document should be considered correct.
You may obtain any of the documents listed above from the SEC, through the SEC’s website or from DTI by requesting them in writing or by telephone at the following address:
Drilling Tools International Corporation
Attention: Investor Relations
10370 Richmond Ave. #1000
Houston, TX 77042; (832) 742-8500
These documents are available from DTI without charge, excluding any exhibits to them unless the exhibit is specifically listed as an exhibit to the Registration Statement of which this prospectus forms a part.
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Table of Contents
Except with respect to certain information provided by the Group on or prior to the date of this prospectus that pertains to subject matters not required to be included in this prospectus, you should rely only on the information contained or incorporated by reference in this prospectus, and neither DTI nor the Group has authorized anyone to give any information or make any representation about the Acquisition, DTI or the Group that is different from, or in addition to, that contained in this prospectus or in any of the materials that DTI and the Group have incorporated by reference into this prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. The information contained in this prospectus speaks only as of the date of this prospectus unless the information specifically indicates that another date applies. Neither the mailing nor delivery of this prospectus to the holders of shares of Group shares, nor the issuance by DTI of shares of DTI Common Stock, will create any implication to the contrary.
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Table of Contents
INDEX TO FINANCIAL STATEMENTS
SALTIRE ENERGY LIMITED
|
Page |
||
|
FINANCIAL STATEMENTS (NON-STATUTORY) FOR THE YEAR ENDED 30 JUNE 2025 |
||
|
Directors’ Responsibilities Statement |
F-3 |
|
|
Independent Auditor’s Report |
F-4 |
|
|
Group Statement of Comprehensive Income |
F-8 |
|
|
Group Balance Sheet |
F-9 |
|
|
Company Balance Sheet |
F-10 |
|
|
Group Statement of Changes in Equity |
F-11 |
|
|
Company Statement of Changes in Equity |
F-12 |
|
|
Group Statement of Cash Flows |
F-13 |
|
|
Notes to the Financial Statements |
F-14 |
|
|
FINANCIAL STATEMENTS (NON-STATUTORY) FOR THE YEAR ENDED 30 JUNE 2026 |
||
|
Directors’ Responsibilities Statement |
F-35 |
|
|
Independent Auditor’s Report |
F-36 |
|
|
Group Statement of Comprehensive Income |
F-39 |
|
|
Group Balance Sheet |
F-40 |
|
|
Company Balance Sheet |
F-41 |
|
|
Group Statement of Changes in Equity |
F-42 |
|
|
Company Statement of Changes in Equity |
F-43 |
|
|
Group Statement of Cash Flows |
F-44 |
|
|
Notes to the Financial Statements |
F-45 |
FOXLEY ENERGY LIMITED
|
FINANCIAL STATEMENTS (NON-STATUTORY) FOR THE YEAR ENDED 30 JUNE 2025 |
||
|
Directors’ Responsibilities Statement |
F-67 |
|
|
Independent Auditor’s Report |
F-68 |
|
|
Group Statement of Comprehensive Income |
F-72 |
|
|
Group Balance Sheet |
F-73 |
|
|
Company Balance Sheet |
F-74 |
|
|
Group Statement of Changes in Equity |
F-75 |
|
|
Company Statement of Changes in Equity |
F-76 |
|
|
Group Statement of Cash Flows |
F-77 |
|
|
Notes to the Financial Statements |
F-78 |
|
|
FINANCIAL STATEMENTS (NON-STATUTORY) FOR THE YEAR ENDED 30 JUNE 2026 |
||
|
Directors’ Responsibilities Statement |
F-98 |
|
|
Independent Auditor’s Report |
F-99 |
|
|
Group Statement of Comprehensive Income |
F-102 |
|
|
Group Balance Sheet |
F-103 |
|
|
Company Balance Sheet |
F-104 |
|
|
Group Statement of Changes in Equity |
F-105 |
|
|
Company Statement of Changes in Equity |
F-106 |
|
|
Group Statement of Cash Flows |
F-107 |
|
|
Notes to the Financial Statements |
F-108 |
F-1
Table of Contents
|
SALTIRE ENERGY LIMITED COMPANY INFORMATION |
|
Directors |
M D Loggie |
|||
|
J W Loggie |
||||
|
S Hamilton |
||||
|
M Harper |
(Appointed 8 December 2025) |
|||
|
J Scott |
(Appointed 23 February 2026) |
|||
|
Secretary |
Peterkins Solicitors |
|||
|
Company number |
SC165384 |
|||
|
Registered office |
100 Union Street |
|||
|
Aberdeen |
||||
|
AB10 1QR |
||||
|
Auditor |
AAB Audit & Accountancy Limited |
|||
|
Prime Four Business Park Kingswells |
||||
|
Aberdeen |
||||
|
United Kingdom |
||||
|
AB15 8PU |
F-2
Table of Contents
|
SALTIRE ENERGY LIMITED DIRECTORS’ RESPONSIBILITIES STATEMENT FOR THE YEAR ENDED 30 JUNE 2025 |
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
F-3
Table of Contents
|
SALTIRE ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SALTIRE ENERGY LIMITED |
Opinion
We have audited the financial statements of Saltire Energy Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2025 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Saltire Energy Limited as at 30 June 2025 and the results in the statement of comprehensive income for the years ended 30 June 2025 in accordance with accounting principles generally accepted, being the financial reporting framework referred to above.
Basis for opinion
We conducted our audit in accordance with the national auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
As discussed in Note 32 to the financial statements, the Company prepares its financial statements in accordance with United Kingdom Accounting Standards, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice), which differs from accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s and parent company’s ability to continue as a going concern for a period of at least twelve months from the end of the reporting period of the financial statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the
F-4
Table of Contents
|
SALTIRE ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT (CONTINUED) TO THE MEMBERS OF SALTIRE ENERGY LIMITED |
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a fair presentation, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognize non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company and the sector in which they operate, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
• Companies Act 2006;
• UK Tax legislation;
F-5
Table of Contents
|
SALTIRE ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT (CONTINUED) TO THE MEMBERS OF SALTIRE ENERGY LIMITED |
• Health and safety regulation; and
• UK Generally Accepted Accounting Practice.
We identified the greatest risk of material impact on the financial statements from irregularities including fraud to be:
• Management override of controls to manipulate the group and parent company’s key performance indicators to meet targets;
• Timing and completeness of revenue recognition;
• Management judgement applied in calculating provisions; and
• Compliance with relevant laws and regulations which directly impact the financial statements and those that the group and parent company needs to comply with for the purpose of trading.
Our audit procedures to respond to those risks included:
• Testing of journal entries and other adjustments for appropriateness;
• Testing a sample of sales transactions and reviewing revenue recognition around the year end;
• Evaluating the business rationale of significant transactions outside the normal course of business;
• Reviewing judgements made by management in their calculation of accounting estimates for potential management bias;
• Enquiries of management about litigation and claims and inspection of relevant correspondence; and
• Reviewing legal and professional fees to identify indications of actual or potential litigation, claims and any non-compliance with laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation.
In performing an audit in accordance with US GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group or Company’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
F-6
Table of Contents
|
SALTIRE ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT (CONTINUED) TO THE MEMBERS OF SALTIRE ENERGY LIMITED |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Use of our report
This report is made solely to the company’s members, as a body. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
|
AAB Audit & Accountancy Limited |
Date: _______________ |
|
|
Registered Auditor |
Kingshill View |
|
|
Prime Four Business Park |
||
|
Kingswells |
||
|
Aberdeen |
||
|
United Kingdom |
||
|
AB15 8PU |
F-7
Table of Contents
|
SALTIRE ENERGY LIMITED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2025 |
|
Notes |
2025 |
2024 |
||||||
|
£ |
£ |
|||||||
|
Turnover |
3 |
27,930,691 |
|
29,770,879 |
|
|||
|
Cost of sales |
(8,927,007 |
) |
(10,457,292 |
) |
||||
|
Gross profit |
19,003,684 |
|
19,313,587 |
|
||||
|
Distribution costs |
(36,660 |
) |
(40,637 |
) |
||||
|
Administrative expenses |
(5,264,255 |
) |
(5,473,247 |
) |
||||
|
Gain on sale of fixed assets |
703,555 |
|
383,144 |
|
||||
|
Operating profit |
4 |
14,406,324 |
|
14,182,847 |
|
|||
|
Interest receivable and similar income |
8 |
7,730 |
|
7 |
|
|||
|
Interest payable and similar expenses |
9 |
(290,191 |
) |
(1,523,004 |
) |
|||
|
Amounts written off investments |
— |
|
(282,000 |
) |
||||
|
Profit before taxation |
14,123,863 |
|
12,377,850 |
|
||||
|
|
|
|||||||
|
Current tax |
|
|
||||||
|
Total current tax |
(3,756,572 |
) |
(1,204,046 |
) |
||||
|
|
|
|||||||
|
Deferred tax |
|
|
||||||
|
Origination and reversal of timing differences |
(882,157 |
) |
(1,304,143 |
) |
||||
|
Adjustment in respect of prior periods |
— |
|
(828,031 |
) |
||||
|
Total deferred tax |
(882,157 |
) |
(2,132,174 |
) |
||||
|
Total tax charge on profit |
10 |
(4,638,729 |
) |
(3,336,220 |
) |
|||
|
Profit and total comprehensive income for the financial year |
24 |
9,485,134 |
|
9,041,630 |
|
|||
Profit and total comprehensive income for the financial year is all attributable to the owners of the parent company.
The group statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
F-8
Table of Contents
|
SALTIRE ENERGY LIMITED GROUP BALANCE SHEET AS AT 30 JUNE 2025 |
|
Notes |
2025 |
2024 |
||||||
|
as restated |
||||||||
|
£ |
£ |
|||||||
|
Fixed assets |
|
|
||||||
|
Tangible assets |
12 |
96,198,487 |
|
94,251,903 |
|
|||
|
|
|
|||||||
|
Current assets |
|
|
||||||
|
Stocks |
15 |
42,709 |
|
49,501 |
|
|||
|
Debtors |
16 |
20,780,278 |
|
26,586,475 |
|
|||
|
Cash at bank and in hand |
1,290,296 |
|
1,508,584 |
|
||||
|
22,113,283 |
|
28,144,560 |
|
|||||
|
Creditors: amounts falling due within one year |
17 |
(10,098,937 |
) |
(21,520,474 |
) |
|||
|
Net current assets |
12,014,346 |
|
6,624,086 |
|
||||
|
Total assets less current liabilities |
108,212,833 |
|
100,875,989 |
|
||||
|
Creditors: amounts falling due after more than one year |
18 |
(4,232,399 |
) |
(7,262,846 |
) |
|||
|
|
|
|||||||
|
Provisions for liabilities |
|
|
||||||
|
Deferred tax liability |
21 |
18,925,129 |
|
18,042,972 |
|
|||
|
(18,925,129 |
) |
(18,042,972 |
) |
|||||
|
Net assets |
85,055,305 |
|
75,570,171 |
|
||||
|
|
|
|||||||
|
Capital and reserves |
|
|
||||||
|
Called up share capital |
23 |
1,240 |
|
1,240 |
|
|||
|
Profit and loss reserves |
24 |
85,054,065 |
|
75,568,931 |
|
|||
|
Total equity |
85,055,305 |
|
75,570,171 |
|
||||
The financial statements were approved by the board of directors and authorised for issue on ___________ and are signed on its behalf by:
|
|
||
|
M D Loggie |
||
|
Director |
F-9
Table of Contents
|
SALTIRE ENERGY LIMITED COMPANY BALANCE SHEET AS AT 30 JUNE 2025 |
|
Notes |
2025 |
2024 |
||||||
|
as restated |
||||||||
|
£ |
£ |
|||||||
|
Fixed assets |
|
|
||||||
|
Tangible assets |
12 |
80,971,651 |
|
78,023,559 |
|
|||
|
Investments |
13 |
157,802 |
|
157,802 |
|
|||
|
81,129,453 |
|
78,181,361 |
|
|||||
|
Current assets |
|
|
||||||
|
Stocks |
15 |
29,997 |
|
35,848 |
|
|||
|
Debtors |
16 |
18,611,797 |
|
24,505,674 |
|
|||
|
Cash at bank and in hand |
1,079,860 |
|
1,394,455 |
|
||||
|
19,721,654 |
|
25,935,977 |
|
|||||
|
Creditors: amounts falling due within one year |
17 |
(11,678,186 |
) |
(23,564,050 |
) |
|||
|
Net current assets |
8,043,468 |
|
2,371,927 |
|
||||
|
Total assets less current liabilities |
89,172,921 |
|
80,553,288 |
|
||||
|
Creditors: amounts falling due after more than one year |
18 |
(742,047 |
) |
(1,915,279 |
) |
|||
|
|
|
|||||||
|
Provisions for liabilities |
|
|
||||||
|
Deferred tax liability |
21 |
15,219,896 |
|
14,086,859 |
|
|||
|
(15,219,896 |
) |
(14,086,859 |
) |
|||||
|
Net assets |
73,210,978 |
|
64,551,150 |
|
||||
|
|
|
|||||||
|
Capital and reserves |
|
|
||||||
|
Called up share capital |
23 |
1,240 |
|
1,240 |
|
|||
|
Profit and loss reserves |
24 |
73,209,738 |
|
64,549,910 |
|
|||
|
Total equity |
73,210,978 |
|
64,551,150 |
|
||||
The company has not presented its own profit and loss account and related notes. The company’s profit for the year was £8,659,828 (2024 — £7,262,594 profit).
The financial statements were approved by the board of directors and authorised for issue on ___________ and are signed on its behalf by:
|
|
||
|
M D Loggie |
||
|
Director |
Company Registration No. SC165384
F-10
Table of Contents
|
SALTIRE ENERGY LIMITED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2025 |
|
Notes |
Share |
Profit |
Total |
|||||
|
£ |
£ |
£ |
||||||
|
As restated for the period ended 30 June 2024: |
||||||||
|
Balance at 1 July 2023 |
1,240 |
66,048,152 |
66,049,392 |
|||||
|
Prior period adjustment |
31 |
— |
479,149 |
479,149 |
||||
|
As restated |
1,240 |
66,527,301 |
66,528,541 |
|||||
|
Year ended 30 June 2024: |
||||||||
|
Profit and total comprehensive income for the year |
— |
9,041,630 |
9,041,630 |
|||||
|
Balance at 30 June 2024 |
1,240 |
75,568,931 |
75,570,171 |
|||||
|
Year ended 30 June 2025: |
||||||||
|
Profit and total comprehensive income for the year |
— |
9,485,134 |
9,485,134 |
|||||
|
Balance at 30 June 2025 |
1,240 |
85,054,065 |
85,055,305 |
F-11
Table of Contents
|
SALTIRE ENERGY LIMITED COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2025 |
|
Share |
Profit |
Total |
||||
|
£ |
£ |
£ |
||||
|
Balance at 1 July 2023 |
1,240 |
57,287,316 |
57,288,556 |
|||
|
Year ended 30 June 2024: |
||||||
|
Profit and total comprehensive income for the year |
— |
7,262,594 |
7,262,594 |
|||
|
Balance at 30 June 2024 |
1,240 |
64,549,910 |
64,551,150 |
|||
|
Year ended 30 June 2025: |
||||||
|
Profit and total comprehensive income for the year |
— |
8,659,828 |
8,659,828 |
|||
|
Balance at 30 June 2025 |
1,240 |
73,209,738 |
73,210,978 |
F-12
Table of Contents
|
SALTIRE ENERGY LIMITED GROUP STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2025 |
|
Notes |
2025 |
2024 |
||||||
|
£ |
£ |
|||||||
|
Cash flows from operating activities |
|
|
||||||
|
Cash generated from operations |
29 |
8,904,068 |
|
12,843,834 |
|
|||
|
Interest paid |
(214,233 |
) |
(1,320,085 |
) |
||||
|
Income taxes paid |
(4,259,234 |
) |
(2,457,349 |
) |
||||
|
Net cash inflow from operating activities |
4,430,601 |
|
9,066,400 |
|
||||
|
|
|
|||||||
|
Investing activities |
|
|
||||||
|
Purchase of tangible fixed assets |
(760,289 |
) |
(229,369 |
) |
||||
|
Proceeds on disposal of tangible fixed assets |
2,013,513 |
|
1,291,388 |
|
||||
|
Interest received |
7,730 |
|
7 |
|
||||
|
Net cash generated from investing activities |
1,260,954 |
|
1,062,026 |
|
||||
|
|
|
|||||||
|
Financing activities |
|
|
||||||
|
Refinancing of tangible fixed assets |
— |
|
395,991 |
|
||||
|
Payment of finance leases obligations |
(5,870,734 |
) |
(5,867,993 |
) |
||||
|
Net cash used in financing activities |
(5,870,734 |
) |
(5,472,002 |
) |
||||
|
Net (decrease)/increase in cash and cash equivalents |
(179,179 |
) |
4,656,424 |
|
||||
|
Cash and cash equivalents at beginning of year |
1,469,475 |
|
(3,186,949 |
) |
||||
|
Cash and cash equivalents at end of year |
1,290,296 |
|
1,469,475 |
|
||||
|
|
|
|||||||
|
Relating to: |
|
|
||||||
|
Cash at bank and in hand |
1,290,296 |
|
1,508,584 |
|
||||
|
Bank overdrafts included in creditors payable within one year |
— |
|
(39,109 |
) |
||||
F-13
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies
Company information
Saltire Energy Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 100 Union Street, Aberdeen, AB10 1QR.
The group consists of Saltire Energy Limited and all of its subsidiaries (collectively known as “the group”).
1.1 Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”).
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements (where applicable):
• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2 Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Saltire Energy Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 June 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
F-14
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies (cont.)
1.3 Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4 Turnover
Turnover represents net income receivable from the sale and rental of drilling equipment.
Turnover from the sale of drilling equipment is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Turnover in respect of the rental of drilling equipment is recognised on a straight line basis over the rental period.
1.5 Intangible fixed assets — goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 20 years.
At each reporting date, goodwill is assessed to determine whether there is any indication of impairment. If any such indication exists, goodwill is formally tested for impairment by comparing its carrying value with its recoverable amount.
1.6 Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
|
Leasehold improvements |
over the life of lease |
|||
|
Plant & machinery |
not depreciated |
|||
|
Fixtures, fittings & equipment |
15/20% straight line |
|||
|
Motor vehicles |
25% straight line |
Plant and machinery includes drilling equipment that the group rents to its customers. These assets are continually refurbished to a very high standard on return from hire and this is reflected in their high residual values and in the absence of a depreciation charge. Residual values are however periodically reassessed and depreciation applied to any depreciable amount arising following reassessment at rates between 10% and 25% straight line. Refurbishment costs are charged to the statement of comprehensive income. The directors believe this approach fairly reflects the consumption of economic benefits in relation to the rental assets.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of comprehensive income.
F-15
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies (cont.)
1.7 Fixed asset investments
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.8 Impairment of fixed assets
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.9 Stocks
Stocks and work in progress are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
1.10 Cash at bank and in hand
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.11 Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group’s balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include certain debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
F-16
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies (cont.)
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the statement of comprehensive income.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the statement of comprehensive income.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including certain creditors and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group’s contractual obligations expire or are discharged or cancelled.
1.12 Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
F-17
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies (cont.)
1.13 Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15 Retirement benefits
The group operates a defined contribution scheme for the benefit of its employees. The assets of the scheme are held separately from those of the group. Contributions payable are charged to the statement of comprehensive income in the year they are payable.
1.16 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
F-18
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies (cont.)
Assets held under finance leases are recognised as assets at the lower of the asset’s fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the statement of comprehensive income so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to the statement of comprehensive income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.17 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the statement of comprehensive income for the period.
2 Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Carrying value of plant & machinery
Plant and machinery includes drilling equipment that the group rents to its customers. These assets are continually refurbished to a very high standard on return from hire and this amongst other factors is reflected in their high residual values and low depreciation. The assessment of residual value requires the directors to exercise judgement including an annual reassessment based on current market conditions. The directors are satisfied no revision is required to the residual value assessments in the current year and hence no depreciation has been charged.
The carrying value of plant and machinery is outlined in the tangible fixed asset note at note 12.
Amounts due from related parties
Amounts owed from related parties are stated in the accounts at their transaction price less any appropriate provision for irrecoverable amounts. In determining if a provision is required, the directors exercise judgement, considering any specific indicators that the recoverability of the balance may be in doubt.
Details of amounts owed to the group from related parties is outlined at note 16.
F-19
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
3 Turnover and other revenue
An analysis of the group’s turnover is as follows:
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Turnover analysed by class of business |
||||
|
Sale and hire rental of drilling equipment |
27,930,691 |
29,770,879 |
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Turnover analysed by geographical market |
||||
|
United Kingdom |
15,695,086 |
16,042,257 |
||
|
Europe |
3,354,470 |
3,071,951 |
||
|
Middle East |
2,709,473 |
2,903,042 |
||
|
The Americas |
644,440 |
263,373 |
||
|
Asia, Far East and Australasia |
3,494,210 |
4,988,744 |
||
|
Africa |
2,033,012 |
2,498,680 |
||
|
Other |
— |
2,832 |
||
|
27,930,691 |
29,770,879 |
4 Operating profit
|
2025 |
2024 |
|||||
|
£ |
£ |
|||||
|
Operating profit for the year is stated after charging/(crediting): |
|
|
||||
|
Exchange differences |
339,057 |
|
137,112 |
|
||
|
Depreciation of owned tangible fixed assets |
— |
|
43,835 |
|
||
|
Profit on disposal of tangible fixed assets |
(703,555 |
) |
(383,144 |
) |
||
|
Operating lease charges |
36,515 |
|
33,156 |
|
||
5 Auditor’s remuneration
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Fees payable to the company’s auditor and associates: |
||||
|
For audit services |
||||
|
Audit of the financial statements of the group and company |
65,260 |
63,000 |
||
|
Audit of the financial statements of the company’s subsidiaries |
9,100 |
11,700 |
||
|
74,360 |
74,700 |
F-20
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
6 Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
Number |
Number |
Number |
Number |
|||||
|
Production staff |
31 |
34 |
20 |
22 |
||||
|
Administrative staff |
15 |
15 |
13 |
15 |
||||
|
Management staff |
10 |
6 |
7 |
3 |
||||
|
Total |
56 |
55 |
40 |
40 |
||||
Their aggregate remuneration comprised:
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Wages and salaries |
2,947,509 |
3,064,933 |
1,812,713 |
2,173,338 |
||||
|
Social security costs |
248,267 |
239,215 |
189,007 |
173,135 |
||||
|
Pension costs |
115,789 |
108,058 |
82,969 |
78,782 |
||||
|
3,311,565 |
3,412,206 |
2,084,689 |
2,425,255 |
|||||
7 Directors’ remuneration
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Remuneration for qualifying services |
214,787 |
225,423 |
||
|
Company pension contributions to defined contribution schemes |
14,386 |
15,599 |
||
|
229,173 |
241,022 |
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2024 — 4).
Remuneration disclosed above includes the following amounts paid to the highest paid director:
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Remuneration for qualifying services |
86,659 |
89,327 |
||
|
Company pension contributions to defined contribution schemes |
10,665 |
8,933 |
8 Interest receivable and similar income
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Interest income |
||||
|
Interest on bank deposits |
7,730 |
7 |
F-21
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
9 Interest payable and similar expenses
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Interest on bank overdrafts and loans |
52,322 |
178,766 |
||
|
Other interest on financial liabilities |
75,958 |
326,125 |
||
|
Interest on finance leases and hire purchase contracts |
161,911 |
1,018,113 |
||
|
Total finance costs |
290,191 |
1,523,004 |
10 Taxation
|
2025 |
2024 |
|||||
|
£ |
£ |
|||||
|
Current tax |
|
|
||||
|
UK corporation tax on profits for the current period |
2,459,514 |
|
1,867,154 |
|
||
|
Adjustments in respect of prior periods |
185,060 |
|
(763,285 |
) |
||
|
Double tax relief |
(238,123 |
) |
(189,470 |
) |
||
|
Total UK current tax |
2,406,451 |
|
914,399 |
|
||
|
Foreign current tax on profits for the current period |
705,200 |
|
299,541 |
|
||
|
Adjustments in foreign tax in respect of prior periods |
644,921 |
|
(9,894 |
) |
||
|
Total current tax |
3,756,572 |
|
1,204,046 |
|
||
|
|
|
|||||
|
Deferred tax |
|
|
||||
|
Origination and reversal of timing differences |
882,157 |
|
1,304,143 |
|
||
|
Adjustment in respect of prior periods |
— |
|
828,031 |
|
||
|
Total deferred tax |
882,157 |
|
2,132,174 |
|
||
|
|
|
|||||
|
Total tax charge |
4,638,729 |
|
3,336,220 |
|
||
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
|
2025 |
2024 |
|||||
|
£ |
£ |
|||||
|
Profit before taxation |
14,123,863 |
|
12,377,850 |
|
||
|
|
|
|||||
|
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%) |
3,530,966 |
|
3,094,463 |
|
||
|
Tax effect of expenses that are not deductible in determining taxable profit |
59,382 |
|
272,896 |
|
||
|
Tax effect of income not taxable in determining taxable profit |
— |
|
(153,559 |
) |
||
|
Adjustments in respect of prior years |
829,981 |
|
(773,179 |
) |
||
|
Other permanent differences |
(10,966 |
) |
(11,271 |
) |
||
|
Deferred tax adjustments in respect of prior years |
— |
|
828,031 |
|
||
|
Other tax adjustments, reliefs and transfers |
(162,126 |
) |
(102,774 |
) |
||
|
Foreign tax credits |
361,940 |
|
139,972 |
|
||
|
Chargeable gains |
29,552 |
|
41,641 |
|
||
|
Taxation charge |
4,638,729 |
|
3,336,220 |
|
||
F-22
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
11 Intangible fixed assets
|
Group |
Goodwill |
|
|
£ |
||
|
Cost |
||
|
At 1 July 2024 and 30 June 2025 |
25,760 |
|
|
Amortisation and impairment |
||
|
At 1 July 2024 and 30 June 2025 |
25,760 |
|
|
Carrying amount |
||
|
At 30 June 2025 |
— |
|
|
At 30 June 2024 |
— |
The company had no intangible fixed assets at 30 June 2025 or 30 June 2024.
12 Tangible fixed assets
|
Group |
Leasehold |
Plant & |
Fixtures, |
Motor |
Total |
|||||||
|
£ |
£ |
£ |
£ |
£ |
||||||||
|
Cost |
|
|
||||||||||
|
At 1 July 2024 – as restated |
17,937 |
113,218,401 |
|
414,998 |
203,566 |
113,854,902 |
|
|||||
|
Additions |
15,735 |
4,605,648 |
|
5,795 |
— |
4,627,178 |
|
|||||
|
Disposals |
— |
(3,222,177 |
) |
— |
— |
(3,222,177 |
) |
|||||
|
At 30 June 2025 |
33,672 |
114,601,872 |
|
420,793 |
203,566 |
115,259,903 |
|
|||||
|
|
|
|||||||||||
|
Depreciation and impairment |
|
|
||||||||||
|
At 1 July 2024 |
19,137,109 |
|
414,998 |
50,892 |
19,602,999 |
|
||||||
|
Eliminated in respect of disposals |
|
(541,583 |
) |
— |
— |
(541,583 |
) |
|||||
|
At 30 June 2025 |
— |
18,595,526 |
|
414,998 |
50,892 |
19,061,416 |
|
|||||
|
|
|
|||||||||||
|
Carrying amount |
|
|
||||||||||
|
At 30 June 2025 |
33,672 |
96,006,346 |
|
5,795 |
152,674 |
96,198,487 |
|
|||||
|
At 30 June 2024 – as restated |
17,937 |
94,081,292 |
|
— |
152,674 |
94,251,903 |
|
|||||
F-23
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
12 Tangible fixed assets (cont.)
|
Company |
Plant & |
Fixtures, |
Motor |
Total |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Cost |
|
|
||||||||
|
At 1 July 2024 – as restated |
93,880,621 |
|
463,628 |
154,246 |
94,498,495 |
|
||||
|
Additions |
4,529,033 |
|
2,880 |
— |
4,531,913 |
|
||||
|
Disposals |
(1,818,718 |
) |
— |
— |
(1,818,718 |
) |
||||
|
At 30 June 2025 |
96,590,936 |
|
466,508 |
154,246 |
97,211,690 |
|
||||
|
|
|
|||||||||
|
Depreciation and impairment |
|
|
||||||||
|
At 1 July 2024 |
16,039,909 |
|
396,465 |
38,562 |
16,474,936 |
|
||||
|
Eliminated in respect of disposals |
(234,897 |
) |
— |
— |
(234,897 |
) |
||||
|
At 30 June 2025 |
15,805,012 |
|
396,465 |
38,562 |
16,240,039 |
|
||||
|
|
|
|||||||||
|
Carrying amount |
|
|
||||||||
|
At 30 June 2025 |
80,785,924 |
|
70,043 |
115,684 |
80,971,651 |
|
||||
|
At 30 June 2024 – as restated |
77,840,712 |
|
67,163 |
115,684 |
78,023,559 |
|
||||
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Plant & machinery |
14,631,413 |
16,287,586 |
14,374,076 |
15,886,370 |
||||
13 Fixed asset investments
|
Group |
Company |
|||||||||
|
Notes |
2025 |
2024 |
2025 |
2024 |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Investments in subsidiaries |
14 |
— |
— |
157,802 |
157,802 |
|||||
|
Movements in fixed asset investments |
Shares in |
|
|
£ |
||
|
Cost or valuation |
||
|
At 1 July 2024 and 30 June 2025 |
157,802 |
|
|
Carrying amount |
||
|
At 30 June 2025 |
157,802 |
|
|
At 30 June 2024 |
157,802 |
F-24
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
14 Subsidiaries
Details of the company’s subsidiaries at 30 June 2025 are as follows:
|
Name of undertaking |
Registered |
Nature of business |
Class of |
% Held |
||||
|
Saltire Drilling Tools Limited |
See below |
Dormant |
Ordinary |
100.00 |
||||
|
Saltire Energy (Norway) Limited |
See below |
Dormant |
Ordinary |
100.00 |
||||
|
Saltire Energy PTE Limited |
See below |
Provision of oilfield drilling equipment and services |
Ordinary |
100.00 |
||||
|
Saltire Pressure Control Limited |
See below |
Provision of oilfield drilling equipment and services |
Ordinary |
100.00 |
||||
|
Saltire Energy SDN. BHD. |
See below |
Provision of oilfield drilling equipment and services |
Ordinary |
100.00 |
The registered office of Saltire Drilling Tools Limited, Saltire Energy (Norway) Limited and Saltire Pressure Control Limited is 100 Union Street, Aberdeen, AB10 1QR.
The registered office of Saltire Energy PTE Limited is 30 Cecil Street, 19-08, Prudential Tower, Singapore 049712.
The registered office of Saltire Energy SDN. BHD. is 152, Dinasti Sentral, Jalan Kuchai Maju 18, Off Jalan Kuchai Lama, 58200 Kuala Lumpur W.P. Kuala Lumpur Malaysia.
15 Stocks
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Finished goods and goods for resale |
42,709 |
49,501 |
29,997 |
35,848 |
||||
16 Debtors
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
as restated |
£ |
as restated |
|||||
|
Amounts falling due within one year: |
||||||||
|
Trade debtors |
5,651,257 |
5,995,982 |
4,477,472 |
4,642,957 |
||||
|
Gross amounts owed by contract |
329,662 |
316,261 |
— |
— |
||||
|
Corporation tax recoverable |
— |
523,297 |
159,617 |
— |
||||
|
Amounts owed by group undertakings |
— |
— |
52,425 |
498,154 |
||||
|
Amounts owed by related parties |
13,675,799 |
18,457,705 |
13,297,494 |
18,814,313 |
||||
|
Other debtors |
129,763 |
201 |
130,219 |
— |
||||
|
Prepayments and accrued income |
993,797 |
1,293,029 |
494,570 |
550,250 |
||||
|
20,780,278 |
26,586,475 |
18,611,797 |
24,505,674 |
|||||
Amounts owed by related parties are interest free and have no formal repayment date.
F-25
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
17 Creditors: amounts falling due within one year
|
Group |
Company |
|||||||||
|
Notes |
2025 |
2024 |
2025 |
2024 |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Bank loans and overdrafts |
19 |
— |
39,109 |
— |
39,109 |
|||||
|
Obligations under finance leases |
20 |
4,497,448 |
5,215,558 |
4,361,466 |
4,980,361 |
|||||
|
Trade creditors |
2,067,575 |
2,407,697 |
1,470,332 |
1,508,393 |
||||||
|
Amounts owed to group undertakings |
— |
— |
2,820,460 |
1,099,162 |
||||||
|
Amounts owed to related parties |
151,145 |
8,871,713 |
151,145 |
11,676,181 |
||||||
|
Corporation tax payable |
301,293 |
1,327,252 |
— |
1,286,077 |
||||||
|
Other taxation and social security |
76,160 |
87,586 |
53,149 |
61,276 |
||||||
|
Other creditors |
1,361,376 |
1,517,062 |
1,343,091 |
1,498,932 |
||||||
|
Accruals and deferred income |
1,643,940 |
2,054,497 |
1,478,543 |
1,414,559 |
||||||
|
10,098,937 |
21,520,474 |
11,678,186 |
23,564,050 |
|||||||
Obligations under finance lease agreements are secured by standard securities as well as a floating charge over the group’s assets.
Included within other creditors of the group and company is £1,329,638 (2024 — £1,253,680) relating to tax settlements on the winding up of historic employer pension and trust arrangements.
Amounts owed to related parties and group undertakings are interest free and have no formal repayment date.
18 Creditors: amounts falling due after more than one year
|
Group |
Company |
|||||||||
|
Notes |
2025 |
2024 |
2025 |
2024 |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Obligations under finance |
20 |
785,651 |
2,071,386 |
742,047 |
1,915,279 |
|||||
|
Other borrowings |
19 |
3,446,748 |
5,191,460 |
— |
— |
|||||
|
4,232,399 |
7,262,846 |
742,047 |
1,915,279 |
|||||||
Other borrowings are in respect of a director’s loan. Details of movements in the year are outlined at note 27.
Obligations under finance lease agreements are secured by standard securities as well as a floating charge over the group’s assets.
19 Loans and overdrafts
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Bank overdrafts |
— |
39,109 |
— |
39,109 |
||||
|
Other borrowings |
3,446,748 |
5,191,460 |
— |
— |
||||
|
3,446,748 |
5,230,569 |
— |
39,109 |
|||||
|
Payable within one year |
— |
39,109 |
— |
39,109 |
||||
|
Payable after one year |
3,446,748 |
5,191,460 |
— |
— |
||||
F-26
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
19 Loans and overdrafts (cont.)
Bank overdrafts are secured by standard securities as well as a floating charge over the assets of the group and cross guarantees between Saltire Energy Limited, Saltire Pressure Control Limited, Saltire Drilling Tools Limited, Foxley Energy Limited and Saltire Energy LLC.
Other borrowings are unsecured.
20 Finance lease obligations
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Future minimum lease payments due under finance leases: |
||||||||
|
Within one year |
4,497,448 |
5,215,558 |
4,361,466 |
4,980,361 |
||||
|
In two to five years |
785,651 |
2,071,386 |
742,047 |
1,915,279 |
||||
|
5,283,099 |
7,286,944 |
5,103,513 |
6,895,640 |
|||||
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
21 Deferred taxation
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
|
Group |
Liabilities |
Liabilities |
|||
|
£ |
£ |
||||
|
Fixed asset timing differences |
18,918,644 |
18,064,022 |
|
||
|
Short term timing differences |
6,485 |
(21,050 |
) |
||
|
18,925,129 |
18,042,972 |
|
|||
|
Company |
Liabilities |
Liabilities |
|||
|
£ |
£ |
||||
|
Fixed asset timing differences |
15,214,129 |
14,107,313 |
|
||
|
Short term timing differences |
5,767 |
(20,454 |
) |
||
|
15,219,896 |
14,086,859 |
|
|||
|
Movements in the year: |
Group |
Company |
||
|
£ |
£ |
|||
|
Restated liability at 1 July 2024 |
18,042,972 |
14,086,859 |
||
|
Charge to profit or loss |
882,157 |
1,133,037 |
||
|
Liability at 30 June 2025 |
18,925,129 |
15,219,896 |
F-27
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
21 Deferred taxation (cont.)
Deferred tax balances are not expected to reverse within the next 12 months.
The group has estimated unrecognised tax losses of £2m (2024 — £2m) available for offset against future profits.
22 Retirement benefit schemes
|
Defined contribution schemes |
2025 |
2024 |
||
|
£ |
£ |
|||
|
Charge to profit or loss in respect of defined contribution schemes |
115,789 |
108,058 |
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
23 Share capital
|
Group and company |
2025 |
2024 |
2025 |
2024 |
||||
|
Number |
Number |
£ |
£ |
|||||
|
Ordinary share capital |
||||||||
|
Issued and fully paid |
||||||||
|
Ordinary shares of £1 each |
1,240 |
1,240 |
1,240 |
1,240 |
24 Reserves
Profit and loss reserves
Profit and loss reserves represent the total comprehensive income for the year and prior periods less dividends paid.
25 Financial commitments, guarantees and contingent liabilities
The company is party to an unlimited cross guarantee alongside Saltire Pressure Control Limited, Saltire Drilling Tools Limited, Foxley Energy Limited and Saltire Energy LLC. The potential liability to the company at 30 June 2025 was £nil (2024 — £nil) relating to the borrowings of other entities party to the cross guarantee.
26 Related party transactions
Remuneration of key management personnel
The directors of the company are regarded as the group’s key management personnel. Details of remuneration paid to directors is outlined at note 7.
F-28
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
26 Related party transactions (cont.)
Transactions with related parties
During the year the group entered into the following transactions with related parties:
|
Sales |
Purchases |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Group |
||||||||
|
Other related parties |
3,818,999 |
5,199,038 |
3,774,433 |
2,456,021 |
||||
|
Company |
||||||||
|
Other related parties |
2,398,557 |
3,671,793 |
2,839,200 |
1,716,165 |
||||
Purchases from related parties include £989,874 (2024 — £Nil) in respect of tangible fixed assets acquired by the company and group.
|
Rent paid |
Sale of assets |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Group |
||||||||
|
Other related parties |
888,000 |
780,000 |
1,712,155 |
— |
||||
|
Company |
||||||||
|
Other related parties |
648,000 |
540,000 |
341,519 |
— |
||||
Company
The company has taken advantage of disclosure exemptions available under Section 33 of FRS 102 whereby it has not disclosed transactions entered into with any wholly-owned subsidiary of the group.
The following amounts were outstanding at the reporting end date:
|
Amounts due to related parties |
2025 |
2024 |
||
|
£ |
£ |
|||
|
Group |
||||
|
Other related parties |
151,145 |
8,871,713 |
||
|
Company |
||||
|
Other related parties |
151,145 |
11,676,181 |
The following amounts were outstanding at the reporting end date:
|
Amounts due from related parties |
2025 |
2024 |
||
|
£ |
as restated |
|||
|
Group |
||||
|
Other related parties |
13,675,799 |
18,457,705 |
||
|
Company |
||||
|
Other related parties |
13,297,494 |
18,814,313 |
F-29
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
27 Directors’ transactions
An interest free loan has been granted by a director to the group with the following amounts repaid to the director in the year:
|
Description |
% Rate |
Opening |
Amounts |
Closing |
|||||
|
£ |
£ |
£ |
|||||||
|
Director’s Loan |
— |
5,191,460 |
(1,744,712 |
) |
3,446,748 |
||||
|
5,191,460 |
(1,744,712 |
) |
3,446,748 |
||||||
The director’s loan is repayable a year and a day after notice being given and a postponement has been granted in favour of the group’s bankers.
28 Controlling party
The company is controlled by M D Loggie, director.
29 Cash generated from group operations
|
2025 |
2024 |
|||||
|
£ |
£ |
|||||
|
Profit for the year after tax |
9,485,134 |
|
9,041,630 |
|
||
|
|
|
|||||
|
Adjustments for: |
|
|
||||
|
Taxation charged |
4,638,729 |
|
3,336,220 |
|
||
|
Finance costs |
290,191 |
|
1,523,004 |
|
||
|
Investment income |
(7,730 |
) |
(7 |
) |
||
|
Gain on disposal of tangible fixed assets |
(703,555 |
) |
(383,144 |
) |
||
|
Depreciation and impairment of tangible fixed assets |
— |
|
43,835 |
|
||
|
Write off of fixed asset investments |
— |
|
282,000 |
|
||
|
|
|
|||||
|
Movements in working capital: |
|
|
||||
|
Decrease/(increase) in stocks |
6,792 |
|
(7,018 |
) |
||
|
Decrease/(increase) in debtors |
6,653,536 |
|
(152,851 |
) |
||
|
Decrease in creditors |
(11,459,029 |
) |
(598,953 |
) |
||
|
HMRC settlement creditor |
— |
|
(240,882 |
) |
||
|
Cash generated from operations |
8,904,068 |
|
12,843,834 |
|
||
30 Analysis of changes in net debt — group
|
1 Jul |
Cash |
New finance |
30 Jun |
|||||||||
|
£ |
£ |
£ |
£ |
|||||||||
|
Cash at bank and in hand |
1,508,584 |
|
(218,288 |
) |
— |
|
1,290,296 |
|
||||
|
Bank overdrafts |
(39,109 |
) |
39,109 |
|
— |
|
— |
|
||||
|
1,469,475 |
|
(179,179 |
) |
— |
|
1,290,296 |
|
|||||
|
Borrowings excluding overdrafts |
(5,191,460 |
) |
1,744,712 |
|
— |
|
(3,446,748 |
) |
||||
|
Obligations under finance leases |
(7,286,944 |
) |
5,870,734 |
|
(3,866,889 |
) |
(5,283,099 |
) |
||||
|
(11,008,929 |
) |
7,436,267 |
|
(3,866,889 |
) |
(7,439,551 |
) |
|||||
F-30
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
31 Prior period adjustment
The prior period adjustment relates to the duplication of assets across related party companies being amended. The impact of the adjustment on financial statement line items of both the group and parent company is outlined below.
Changes to the balance sheet — group
|
As |
Adjustment |
As |
|||||
|
£ |
£ |
£ |
|||||
|
Fixed assets |
|
||||||
|
Tangible assets |
88,815,294 |
5,436,609 |
|
94,251,903 |
|||
|
|
|||||||
|
Current assets |
|
||||||
|
Debtors due within one year |
31,543,935 |
(4,957,460 |
) |
26,586,475 |
|||
|
Net assets |
75,091,022 |
479,149 |
|
75,570,171 |
|||
|
|
|||||||
|
Capital and reserves |
|
||||||
|
Profit and loss reserves |
75,089,782 |
479,149 |
|
75,568,931 |
|||
Changes to the profit and loss account — group
|
Period ended 30 June 2024 |
As |
Adjustment |
As |
|||
|
£ |
£ |
£ |
||||
|
Profit after taxation |
9,041,630 |
— |
9,041,630 |
Changes to the balance sheet — company
|
As |
Adjustment |
As |
|||||
|
£ |
£ |
£ |
|||||
|
Fixed assets |
|
||||||
|
Tangible assets |
73,066,099 |
4,957,460 |
|
78,023,559 |
|||
|
|
|||||||
|
Current assets |
|
||||||
|
Debtors due within one year |
29,463,134 |
(4,957,460 |
) |
24,505,674 |
|||
|
Net assets |
64,551,150 |
— |
|
64,551,150 |
|||
|
|
|||||||
|
Capital and reserves |
|
||||||
|
Profit and loss reserves |
64,549,910 |
— |
|
64,549,910 |
|||
Changes to the profit and loss account — company
|
Period ended 30 June 2024 |
As |
Adjustment |
As |
|||
|
£ |
£ |
£ |
||||
|
Profit after taxation |
7,262,594 |
— |
7,262,594 |
F-31
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
32 Summary of significant differences between UK GAAP and US GAAP
The consolidated group financial statements have been prepared in accordance with generally accepted accounting practice in the United Kingdom (“UK GAAP”) defined as FRS 102 in Note 1.1, which differ in certain significant respects from accounting principles generally accepted in the United States of America (“US GAAP”). A description of the differences and their effects on the group’s profit and total comprehensive income and total equity are set out below.
Significant adjustments to consolidated profit and total comprehensive income
Effect of differences between UK GAAP and US GAAP on the group’s profit and total comprehensive income for the year ended 30 June 2025 and 2024:
|
References |
2025 |
2024 |
||||||
|
£ |
£ |
|||||||
|
Profit and total comprehensive income for the consolidated statement of comprehensive income in accordance with UK GAAP |
9,485,134 |
|
9,041,630 |
|
||||
|
US GAAP adjustments – increase/(decrease) due to: |
|
|
||||||
|
Bad debt provision |
a |
2,731 |
|
18,948 |
|
|||
|
Income taxes |
c |
(683 |
) |
(4,737 |
) |
|||
|
2,048 |
|
14,211 |
|
|||||
|
Profit and total comprehensive income in accordance with US GAAP |
9,487,182 |
|
9,055,841 |
|
||||
Significant adjustments to consolidated group balance sheet and statement of changes in equity
Effect of differences between UK GAAP and US GAAP on the group’s total equity at 30 June 2025 and 2024:
|
References |
2025 |
2024 |
||||||
|
£ |
£ |
|||||||
|
Total equity for the consolidated group balance sheet in accordance with UK GAAP |
85,055,305 |
|
75,570,171 |
|
||||
|
US GAAP adjustments – increase/(decrease) due to: |
|
|
||||||
|
Trade debtors |
a |
(182,691 |
) |
(185,782 |
) |
|||
|
Intangible fixed assets – goodwill |
b |
25,760 |
|
25,760 |
|
|||
|
Income taxes |
c |
47,475 |
|
48,158 |
|
|||
|
(109,456 |
) |
(111,864 |
) |
|||||
|
Total equity in accordance with US GAAP |
84,945,849 |
|
75,458,307 |
|
||||
Significant adjustments to consolidated group statement of cash flows
There were no significant differences to the group statement of cash flows under US GAAP.
Description of differences between UK GAAP and US GAAP
a. Estimated credit losses
Under UK GAAP, financial assets are assessed for indicators of impairment at each reporting end date. An impairment loss is recognised in the statement of comprehensive income when there is objective evidence that, as a result of one or more events that occurred after initial recognition of the financial asset, the estimated future cash flows have been affected.
F-32
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
32 Summary of significant differences between UK GAAP and US GAAP (cont.)
Under US GAAP, the current expected credit loss (CECL) model is utilized to estimate credit losses on financial assets. The CECL model requires the recognition of an allowance for lifetime expected credit losses upon initial recognition, even if the risk of loss is remote. The estimate of expected credit losses considers current conditions, reasonable and supportable forecasts of future conditions, and historical loss experience.
b. Intangible fixed assets — goodwill
Under UK GAAP, goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over its expected life, which is 20 years for the group.
Under US GAAP, goodwill is recognised at cost and is subsequently measured at cost less accumulated impairment losses. As an indefinite-lived asset, goodwill is not amortised.
c. Income taxes
The tax effects of the adjustments described above are calculated using the standard rate of corporation tax in the UK of 25.00%, charged or credited to the consolidated profit and total comprehensive income.
F-33
Table of Contents
|
SALTIRE ENERGY LIMITED COMPANY INFORMATION |
|
Directors |
M D Loggie |
|||
|
J W Loggie |
||||
|
S Hamilton |
||||
|
M Harper |
(Appointed 8 December 2025) |
|||
|
J Scott |
(Appointed 23 February 2026) |
|||
|
Secretary |
Peterkins Solicitors |
|||
|
Company number |
SC165384 |
|||
|
Registered office |
100 Union Street |
|||
|
Aberdeen |
||||
|
AB10 1QR |
||||
|
Auditor |
AAB Audit & Accountancy Limited |
|||
|
Kingshill View |
||||
|
Prime Four Business Park Kingswells |
||||
|
Aberdeen |
||||
|
United Kingdom |
||||
|
AB15 8PU |
F-34
Table of Contents
|
SALTIRE ENERGY LIMITED DIRECTORS’ RESPONSIBILITIES STATEMENT FOR THE YEAR ENDED 30 JUNE 2026 |
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with applicable law. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
F-35
Table of Contents
|
SALTIRE ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SALTIRE ENERGY LIMITED |
Opinion
We have audited the financial statements of Saltire Energy Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2026 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Saltire Energy Limited as at 30 June 2026 and the results in the statement of comprehensive income for the years ended 30 June 2026 in accordance with accounting principles generally accepted, being the financial reporting framework referred to above.
Basis for opinion
We conducted our audit in accordance with the national auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
As discussed in Note 33 to the financial statements, the Company prepares its financial statements in accordance with United Kingdom Accounting Standards, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice), which differs from accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears
F-36
Table of Contents
|
SALTIRE ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT (CONTINUED) TO THE MEMBERS OF SALTIRE ENERGY LIMITED |
to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company and the sector in which they operate, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
• Companies Act 2006;
• UK Tax legislation;
• Health and safety regulation; and
• UK Generally Accepted Accounting Practice.
F-37
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SALTIRE ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT (CONTINUED) TO THE MEMBERS OF SALTIRE ENERGY LIMITED |
We identified the greatest risk of material impact on the financial statements from irregularities including fraud to be:
• Management override of controls to manipulate the group and parent company’s key performance indicators to meet targets;
• Timing and completeness of revenue recognition;
• Management judgement applied in calculating provisions; and
• Compliance with relevant laws and regulations which directly impact the financial statements and those that the group and parent company needs to comply with for the purpose of trading.
Our audit procedures to respond to those risks included:
• Testing of journal entries and other adjustments for appropriateness;
• Testing a sample of sales transactions and reviewing revenue recognition around the year end;
• Evaluating the business rationale of significant transactions outside the normal course of business;
• Reviewing judgements made by management in their calculation of accounting estimates for potential management bias;
• Enquiries of management about litigation and claims and inspection of relevant correspondence; and
• Reviewing legal and professional fees to identify indications of actual or potential litigation, claims and any non-compliance with laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involved intentional concealment, forgery, collusion, omission or misrepresentation.
Use of our report
This report is made solely to the company’s members, as a body. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
|
AAB Audit & Accountancy Limited |
Date: |
|
||||
|
Registered Auditor |
Kingshill View |
|||||
F-38
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|
SALTIRE ENERGY LIMITED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2026 |
|
Notes |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Turnover |
3 |
22,153,375 |
|
27,930,691 |
|
|||
|
Cost of sales |
(7,302,172 |
) |
(8,927,007 |
) |
||||
|
Gross profit |
14,851,203 |
|
19,003,684 |
|
||||
|
Distribution costs |
(121,503 |
) |
(36,660 |
) |
||||
|
Administrative expenses |
(5,451,912 |
) |
(5,264,255 |
) |
||||
|
Other operating income |
3,474 |
|
— |
|
||||
|
Gain on sale of fixed assets |
101,387 |
|
703,555 |
|
||||
|
Operating profit before exceptional items |
4 |
9,382,649 |
|
14,406,324 |
|
|||
|
Exceptional items |
5 |
(6,376,448 |
) |
— |
|
|||
|
Operating profit after exceptional items |
3,006,201 |
|
14,406,324 |
|
||||
|
Interest receivable and similar income |
9 |
50,892 |
|
7,730 |
|
|||
|
Interest payable and similar expenses |
10 |
(602,136 |
) |
(290,191 |
) |
|||
|
Profit before taxation |
2,454,957 |
|
14,123,863 |
|
||||
|
Current tax |
|
|
||||||
|
Total current tax |
(1,010,177 |
) |
(3,756,572 |
) |
||||
|
Deferred tax |
|
|
||||||
|
Origination and reversal of timing differences |
228,104 |
|
(882,157 |
) |
||||
|
Adjustment in respect of prior periods |
(441,709 |
) |
— |
|
||||
|
Total deferred tax |
(213,605 |
) |
(882,157 |
) |
||||
|
Total tax charge on profit |
11 |
(1,223,782 |
) |
(4,638,729 |
) |
|||
|
Profit and total comprehensive income for the financial year |
25 |
1,231,175 |
|
9,485,134 |
|
|||
Profit and total comprehensive income for the financial year is all attributable to the owners of the parent company.
The group statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
F-39
Table of Contents
|
SALTIRE ENERGY LIMITED GROUP BALANCE SHEET AS AT 30 JUNE 2026 |
|
Notes |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Fixed assets |
|
|
||||||
|
Tangible assets |
13 |
88,669,255 |
|
96,198,487 |
|
|||
|
|
|
|||||||
|
Current assets |
|
|
||||||
|
Stocks |
16 |
29,018 |
|
42,709 |
|
|||
|
Debtors |
17 |
24,339,445 |
|
20,780,278 |
|
|||
|
Cash at bank and in hand |
1,747,312 |
|
1,290,296 |
|
||||
|
26,115,775 |
|
22,113,283 |
|
|||||
|
Creditors: amounts falling due within one year |
18 |
(8,362,725 |
) |
(10,098,937 |
) |
|||
|
Net current assets |
17,753,050 |
|
12,014,346 |
|
||||
|
Total assets less current liabilities |
106,422,305 |
|
108,212,833 |
|
||||
|
Creditors: amounts falling due after more than one year |
19 |
(997,091 |
) |
(4,232,399 |
) |
|||
|
|
|
|||||||
|
Provisions for liabilities |
|
|
||||||
|
Deferred tax liability |
22 |
19,138,734 |
|
18,925,129 |
|
|||
|
(19,138,734 |
) |
(18,925,129 |
) |
|||||
|
Net assets |
86,286,480 |
|
85,055,305 |
|
||||
|
|
|
|||||||
|
Capital and reserves |
|
|
||||||
|
Called up share capital |
24 |
1,240 |
|
1,240 |
|
|||
|
Profit and loss reserves |
25 |
86,285,240 |
|
85,054,065 |
|
|||
|
Total equity |
86,286,480 |
|
85,055,305 |
|
||||
The financial statements were approved by the board of directors and authorised for issue on and are signed on its behalf by:
|
|
||
|
M D Loggie |
||
|
Director |
F-40
Table of Contents
|
SALTIRE ENERGY LIMITED COMPANY BALANCE SHEET AS AT 30 JUNE 2026 |
|
Notes |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Fixed assets |
|
|
||||||
|
Tangible assets |
13 |
74,778,234 |
|
80,971,651 |
|
|||
|
Investments |
14 |
157,802 |
|
157,802 |
|
|||
|
74,936,036 |
|
81,129,453 |
|
|||||
|
Current assets |
|
|
||||||
|
Stocks |
16 |
15,808 |
|
29,997 |
|
|||
|
Debtors |
17 |
23,673,063 |
|
18,611,797 |
|
|||
|
Cash at bank and in hand |
1,426,463 |
|
1,079,860 |
|
||||
|
25,115,334 |
|
19,721,654 |
|
|||||
|
Creditors: amounts falling due within one year |
18 |
(7,760,229 |
) |
(11,678,186 |
) |
|||
|
Net current assets |
17,355,105 |
|
8,043,468 |
|
||||
|
Total assets less current liabilities |
92,291,141 |
|
89,172,921 |
|
||||
|
Creditors: amounts falling due after more than one year |
19 |
(997,091 |
) |
(742,047 |
) |
|||
|
|
|
|||||||
|
Provisions for liabilities |
|
|
||||||
|
Deferred tax liability |
22 |
15,643,466 |
|
15,219,896 |
|
|||
|
(15,643,466 |
) |
(15,219,896 |
) |
|||||
|
Net assets |
75,650,584 |
|
73,210,978 |
|
||||
|
|
|
|||||||
|
Capital and reserves |
|
|
||||||
|
Called up share capital |
24 |
1,240 |
|
1,240 |
|
|||
|
Profit and loss reserves |
25 |
75,649,344 |
|
73,209,738 |
|
|||
|
Total equity |
75,650,584 |
|
73,210,978 |
|
||||
The company has not presented its own profit and loss account and related notes. The company’s profit for the year was £2,439,606 (2025 — £8,659,828 profit).
The financial statements were approved by the board of directors and authorised for issue on and are signed on its behalf by:
|
|
||
|
M D Loggie |
||
|
Director |
||
|
Company Registration No. SC165384 |
||
F-41
Table of Contents
|
SALTIRE ENERGY LIMITED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2026 |
|
Share |
Profit |
Total |
||||
|
£ |
£ |
£ |
||||
|
Balance at 1 July 2024 |
1,240 |
75,568,931 |
75,570,171 |
|||
|
Year ended 30 June 2025: |
||||||
|
Profit and total comprehensive income for the year |
— |
9,485,134 |
9,485,134 |
|||
|
Balance at 30 June 2025 |
1,240 |
85,054,065 |
85,055,305 |
|||
|
Year ended 30 June 2026: |
||||||
|
Profit and total comprehensive income for the year |
— |
1,231,175 |
1,231,175 |
|||
|
Balance at 30 June 2026 |
1,240 |
86,285,240 |
86,286,480 |
F-42
Table of Contents
|
SALTIRE ENERGY LIMITED COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2026 |
|
Share |
Profit |
Total |
||||
|
£ |
£ |
£ |
||||
|
Balance at 1 July 2024 |
1,240 |
64,549,910 |
64,551,150 |
|||
|
Year ended 30 June 2025: |
||||||
|
Profit and total comprehensive income for the year |
— |
8,659,828 |
8,659,828 |
|||
|
Balance at 30 June 2025 |
1,240 |
73,209,738 |
73,210,978 |
|||
|
Year ended 30 June 2026: |
||||||
|
Profit and total comprehensive income for the year |
— |
2,439,606 |
2,439,606 |
|||
|
Balance at 30 June 2026 |
1,240 |
75,649,344 |
75,650,584 |
F-43
Table of Contents
|
SALTIRE ENERGY LIMITED GROUP STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2026 |
|
Notes |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Cash flows from operating activities |
|
|
||||||
|
Cash generated from operations |
31 |
1,376,970 |
|
8,904,068 |
|
|||
|
Interest paid |
(602,136 |
) |
(214,233 |
) |
||||
|
Income taxes paid |
(1,994,020 |
) |
(4,259,234 |
) |
||||
|
Net cash (outflow)/inflow from operating activities |
(1,219,186 |
) |
4,430,601 |
|
||||
|
|
|
|||||||
|
Investing activities |
|
|
||||||
|
Purchase of tangible fixed assets |
(19,623 |
) |
(760,289 |
) |
||||
|
Proceeds on disposal of tangible fixed assets |
6,420,659 |
|
2,013,513 |
|
||||
|
Interest received |
50,892 |
|
7,730 |
|
||||
|
Net cash generated from investing activities |
6,451,928 |
|
1,260,954 |
|
||||
|
|
|
|||||||
|
Financing activities |
|
|
||||||
|
Payment of finance leases obligations |
(4,775,726 |
) |
(5,870,734 |
) |
||||
|
Net cash used in financing activities |
(4,775,726 |
) |
(5,870,734 |
) |
||||
|
Net increase/(decrease) in cash and cash equivalents |
457,016 |
|
(179,179 |
) |
||||
|
Cash and cash equivalents at beginning of year |
1,290,296 |
|
1,469,475 |
|
||||
|
Cash and cash equivalents at end of year |
1,747,312 |
|
1,290,296 |
|
||||
F-44
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
1 Accounting policies
Company information
Saltire Energy Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 100 Union Street, Aberdeen, AB10 1QR.
The group consists of Saltire Energy Limited and all of its subsidiaries (collectively known as “the group”).
1.1 Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements (where applicable):
• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income; and
• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2 Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Saltire Energy Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 June 2026. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
F-45
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
1 Accounting policies (cont.) |
1.3 Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4 Turnover
Turnover represents net income receivable from the sale and rental of drilling equipment.
Turnover from the sale of drilling equipment is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Turnover in respect of the rental of drilling equipment is recognised on a straight line basis over the rental period.
1.5 Intangible fixed assets — goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 20 years.
At each reporting date, goodwill is assessed to determine whether there is any indication of impairment. If any such indication exists, goodwill is formally tested for impairment by comparing its carrying value with its recoverable amount.
1.6 Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
|
Leasehold improvements |
over the life of lease |
|||
|
Rental plant |
not depreciated |
|||
|
Fixtures, fittings & equipment |
15/20% straight line |
|||
|
Non-rental plant |
10% straight line |
|||
|
Motor vehicles |
25% straight line |
Rental plant includes drilling equipment that the group rents to its customers. These assets are continually refurbished to a very high standard on return from hire and this is reflected in their high residual values and in the absence of a depreciation charge. Residual values are however periodically reassessed and depreciation applied to any depreciable amount arising following reassessment at rates between 10% and 25% straight line. Refurbishment costs are charged to the statement of comprehensive income. The directors believe this approach fairly reflects the consumption of economic benefits in relation to the rental assets.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of comprehensive income.
F-46
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
1 Accounting policies (cont.) |
1.7 Fixed asset investments
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.8 Impairment of fixed assets
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.9 Stocks
Stocks and work in progress are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
1.10 Cash at bank and in hand
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.11 Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group’s balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include certain debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
F-47
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
1 Accounting policies (cont.) |
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the statement of comprehensive income.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the statement of comprehensive income.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including certain creditors and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group’s contractual obligations expire or are discharged or cancelled.
1.12 Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
F-48
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
1 Accounting policies (cont.) |
1.13 Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15 Retirement benefits
The group operates a defined contribution scheme for the benefit of its employees. The assets of the scheme are held separately from those of the group. Contributions payable are charged to the statement of comprehensive income in the year they are payable.
F-49
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|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
1 Accounting policies (cont.) |
1.16 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the asset’s fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the statement of comprehensive income so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to the statement of comprehensive income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.17 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the statement of comprehensive income for the period.
2 Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Carrying value of rental plant
Rental plant includes drilling equipment that the group rents to its customers. These assets are continually refurbished to a very high standard on return from hire and this amongst other factors is reflected in their high residual values and low depreciation. The assessment of residual value requires the directors to exercise judgement including an annual reassessment based on current market conditions. The directors are satisfied no revision is required to the residual value assessments in the current year and hence no depreciation has been charged.
The carrying value of rental plant is outlined in the tangible fixed asset note at note 13.
F-50
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
2 Judgements and key sources of estimation uncertainty (cont.) |
Amounts due from related parties
Amounts owed from related parties are stated in the accounts at their transaction price less any appropriate provision for irrecoverable amounts. In determining if a provision is required, the directors exercise judgement, considering any specific indicators that the recoverability of the balance may be in doubt.
Details of amounts owed to the group from related parties is outlined at note 17.
3 Turnover and other revenue
An analysis of the group’s turnover is as follows:
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Turnover analysed by class of business |
||||
|
Sale and hire rental of drilling equipment |
22,153,375 |
27,930,691 |
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Turnover analysed by geographical market |
||||
|
United Kingdom |
11,216,906 |
15,695,086 |
||
|
Europe |
2,936,233 |
3,354,470 |
||
|
Middle East |
1,032,568 |
2,709,473 |
||
|
The Americas |
222,542 |
644,440 |
||
|
Asia, Far East and Australasia |
4,098,351 |
3,494,210 |
||
|
Africa |
2,646,775 |
2,033,012 |
||
|
22,153,375 |
27,930,691 |
4 Operating profit
|
2026 |
2025 |
|||||
|
£ |
£ |
|||||
|
Operating profit before exceptional items for the year is stated after charging/(crediting): |
|
|
||||
|
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss |
(22,963 |
) |
339,057 |
|
||
|
Depreciation of owned tangible fixed assets |
5,564 |
|
— |
|
||
|
Profit on disposal of tangible fixed assets |
(101,387 |
) |
(703,555 |
) |
||
|
Operating lease charges |
20,958 |
|
36,515 |
|
||
5 Exceptional items
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Expenditure |
||||
|
Loss on disposal of fixed assets |
4,497,098 |
— |
||
|
Historic pension and trust arrangements |
1,879,350 |
— |
||
|
6,376,448 |
— |
F-51
Table of Contents
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SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
5 Exceptional items (cont.) |
During the year, the group incurred exceptional costs of £1,879k in relation to historic employer pension and trust arrangements.
Also during the year, having undertaken a comprehensive exercise to compare fixed assets on hand and available for rental with the underlying records, the directors have recognised exceptional depreciation of £350k and a loss on disposal of assets with net book value of £4,147k in the current year.
6 Auditor’s remuneration
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Fees payable to the company’s auditor and associates: |
||||
|
For audit services |
||||
|
Audit of the financial statements of the group and company |
64,750 |
65,260 |
||
|
Audit of the financial statements of the company’s subsidiaries |
14,250 |
9,100 |
||
|
79,000 |
74,360 |
7 Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
Number |
Number |
Number |
Number |
|||||
|
Production staff |
28 |
31 |
19 |
20 |
||||
|
Administrative staff |
28 |
15 |
12 |
13 |
||||
|
Management staff |
10 |
10 |
7 |
7 |
||||
|
Total |
66 |
56 |
38 |
40 |
||||
Their aggregate remuneration comprised:
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Wages and salaries |
2,959,556 |
2,947,509 |
1,756,012 |
1,812,713 |
||||
|
Social security costs |
301,237 |
248,267 |
208,863 |
189,007 |
||||
|
Pension costs |
121,908 |
115,789 |
85,443 |
82,969 |
||||
|
3,382,701 |
3,311,565 |
2,050,318 |
2,084,689 |
|||||
8 Directors’ remuneration
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Remuneration for qualifying services |
266,333 |
214,787 |
||
|
Company pension contributions to defined contribution schemes |
4,916 |
14,386 |
||
|
271,249 |
229,173 |
F-52
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|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
8 Directors’ remuneration (cont.) |
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2025 — 3).
Remuneration disclosed above includes the following amounts paid to the highest paid director:
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Remuneration for qualifying services |
73,333 |
86,659 |
||
|
Company pension contributions to defined contribution schemes |
— |
10,665 |
9 Interest receivable and similar income
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Interest income |
||||
|
Interest on bank deposits |
50,892 |
7,730 |
10 Interest payable and similar expenses
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Interest on bank overdrafts and loans |
8,136 |
52,322 |
||
|
Other interest on financial liabilities |
— |
75,958 |
||
|
Interest on finance leases and hire purchase contracts |
594,000 |
161,911 |
||
|
Total finance costs |
602,136 |
290,191 |
11 Taxation
|
2026 |
2025 |
|||||
|
£ |
£ |
|||||
|
Current tax |
|
|
||||
|
UK corporation tax on profits for the current period |
1,141,448 |
|
2,459,514 |
|
||
|
Adjustments in respect of prior periods |
(534,001 |
) |
185,060 |
|
||
|
Double tax relief |
(241,378 |
) |
(238,123 |
) |
||
|
Total UK current tax |
366,069 |
|
2,406,451 |
|
||
|
Foreign current tax on profits for the current period |
580,893 |
|
705,200 |
|
||
|
Adjustments in foreign tax in respect of prior periods |
63,215 |
|
644,921 |
|
||
|
Total current tax |
1,010,177 |
|
3,756,572 |
|
||
|
|
|
|||||
|
Deferred tax |
|
|
||||
|
Origination and reversal of timing differences |
(228,104 |
) |
882,157 |
|
||
|
Adjustment in respect of prior periods |
441,709 |
|
— |
|
||
|
Total deferred tax |
213,605 |
|
882,157 |
|
||
|
Total tax charge |
1,223,782 |
|
4,638,729 |
|
||
F-53
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
11 Taxation (cont.) |
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
|
2026 |
2025 |
|||||
|
£ |
£ |
|||||
|
Profit before taxation |
2,454,957 |
|
14,123,863 |
|
||
|
|
|
|||||
|
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2025: 25.00%) |
613,739 |
|
3,530,966 |
|
||
|
Tax effect of expenses that are not deductible in determining taxable profit |
837,362 |
|
59,382 |
|
||
|
Tax effect of income not taxable in determining taxable profit |
(292 |
) |
— |
|
||
|
Adjustments in respect of prior years |
(470,786 |
) |
829,981 |
|
||
|
Other permanent differences |
7,222 |
|
(10,966 |
) |
||
|
Deferred tax adjustments in respect of prior years |
441,709 |
|
— |
|
||
|
Fixed asset differences |
(333,125 |
) |
— |
|
||
|
Other tax adjustments, reliefs and transfers |
3,758 |
|
(162,126 |
) |
||
|
Foreign tax credits |
124,195 |
|
361,940 |
|
||
|
Chargeable gains |
— |
|
29,552 |
|
||
|
Taxation charge |
1,223,782 |
|
4,638,729 |
|
||
12 Intangible fixed assets
|
Group |
Goodwill |
|
|
£ |
||
|
Cost |
||
|
At 1 July 2025 and 30 June 2026 |
25,760 |
|
|
Amortisation and impairment |
||
|
At 1 July 2025 and 30 June 2026 |
25,760 |
|
|
Carrying amount |
||
|
At 30 June 2026 |
— |
|
|
At 30 June 2025 |
— |
The company had no intangible fixed assets at 30 June 2026 or 30 June 2025.
F-54
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
13 Tangible fixed assets |
|
Group |
Leasehold |
Rental plant |
Fixtures, |
Non-rental |
Motor |
Total |
||||||||||||
|
£ |
£ |
£ |
£ |
£ |
£ |
|||||||||||||
|
Cost or valuation |
|
|
|
|
|
|
||||||||||||
|
At 1 July 2025 |
33,672 |
|
114,601,872 |
|
420,793 |
|
— |
|
203,566 |
|
115,259,903 |
|
||||||
|
Transfer between asset classes |
— |
|
(1,995,161 |
) |
(185,559 |
) |
1,911,011 |
|
269,709 |
|
— |
|
||||||
|
Additions |
— |
|
3,274,513 |
|
18,189 |
|
— |
|
— |
|
3,292,702 |
|
||||||
|
Disposals |
(27,752 |
) |
(14,377,574 |
) |
(2,915 |
) |
(382,938 |
) |
— |
|
(14,791,179 |
) |
||||||
|
At 30 June 2026 |
5,920 |
|
101,503,650 |
|
250,508 |
|
1,528,073 |
|
473,275 |
|
103,761,426 |
|
||||||
|
|
|
|
|
|
|
|||||||||||||
|
Depreciation and impairment |
|
|
|
|
|
|
||||||||||||
|
At 1 July 2025 |
— |
|
18,595,526 |
|
414,998 |
|
— |
|
50,892 |
|
19,061,416 |
|
||||||
|
Transfer between asset classes |
— |
|
435,027 |
|
(396,465 |
) |
— |
|
(38,562 |
) |
— |
|
||||||
|
Depreciation charged in the year |
— |
|
— |
|
5,564 |
|
— |
|
— |
|
5,564 |
|
||||||
|
Eliminated in respect of disposals |
— |
|
(4,325,215 |
) |
— |
|
— |
|
— |
|
(4,325,215 |
) |
||||||
|
Exceptional depreciation charged in the year |
— |
|
350,406 |
|
— |
|
— |
|
— |
|
350,406 |
|
||||||
|
At 30 June 2026 |
— |
|
15,055,744 |
|
24,097 |
|
— |
|
12,330 |
|
15,092,171 |
|
||||||
|
|
|
|
|
|
|
|||||||||||||
|
Carrying amount |
|
|
|
|
|
|
||||||||||||
|
At 30 June 2026 |
5,920 |
|
86,447,906 |
|
226,411 |
|
1,528,073 |
|
460,945 |
|
88,669,255 |
|
||||||
|
At 30 June 2025 |
33,672 |
|
96,006,346 |
|
5,795 |
|
— |
|
152,674 |
|
96,198,487 |
|
||||||
The group engaged with an external valuer to obtain a valuation as at 30 June 2026 of all fixed assets categories, excluding Rental plant. The valuations were used to ensure there were no impairment in asset values and that items were categorised correctly.
The valuations, which are less than original cost, are reflected in the net book value above and includes reclassifications and transfer between categories to ensure presented appropriately.
F-55
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
13 Tangible fixed assets (cont.) |
|
Company |
Rental plant |
Fixtures, |
Non-rental |
Motor |
Total |
||||||||||
|
£ |
£ |
£ |
£ |
£ |
|||||||||||
|
Cost or valuation |
|
|
|
|
|
||||||||||
|
At 1 July 2025 |
96,590,936 |
|
466,508 |
|
— |
|
154,246 |
|
97,211,690 |
|
|||||
|
Transfer between asset classes |
(1,029,361 |
) |
(196,249 |
) |
1,071,411 |
|
154,199 |
|
— |
|
|||||
|
Additions |
3,273,079 |
|
12,207 |
|
— |
|
— |
|
3,285,286 |
|
|||||
|
Disposals |
(13,416,692 |
) |
— |
|
(382,938 |
) |
— |
|
(13,799,630 |
) |
|||||
|
At 30 June 2026 |
85,417,962 |
|
282,466 |
|
688,473 |
|
308,445 |
|
86,697,346 |
|
|||||
|
|
|
|
|
|
|||||||||||
|
Depreciation and impairment |
|
|
|
|
|
||||||||||
|
At 1 July 2025 |
15,805,012 |
|
396,465 |
|
— |
|
38,562 |
|
16,240,039 |
|
|||||
|
Transfer between asset classes |
435,027 |
|
(396,465 |
) |
— |
|
(38,562 |
) |
— |
|
|||||
|
Depreciation charged in the year |
— |
|
4,288 |
|
— |
|
— |
|
4,288 |
|
|||||
|
Eliminated in respect of disposals |
(4,325,215 |
) |
— |
|
— |
|
— |
|
(4,325,215 |
) |
|||||
|
At 30 June 2026 |
11,914,824 |
|
4,288 |
|
— |
|
— |
|
11,919,112 |
|
|||||
|
|
|
|
|
|
|||||||||||
|
Carrying amount |
|
|
|
|
|
||||||||||
|
At 30 June 2026 |
73,503,138 |
|
278,178 |
|
688,473 |
|
308,445 |
|
74,778,234 |
|
|||||
|
At 30 June 2025 |
80,785,924 |
|
70,043 |
|
— |
|
115,684 |
|
80,971,651 |
|
|||||
The company engaged with an external valuer to obtain a valuation as at 30 June 2026 of all fixed assets categories, excluding Rental plant. The valuations were used to ensure there were no impairment in asset values and that items were categorised correctly.
The valuations, which are less than original cost, are reflected in the net book value above and includes reclassifications and transfer between categories to ensure presented appropriately.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Rental plant |
10,743,045 |
14,631,413 |
10,718,545 |
14,374,076 |
||||
14 Fixed asset investments
|
Group |
Company |
|||||||||
|
Notes |
2026 |
2025 |
2026 |
2025 |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Investments in subsidiaries |
15 |
— |
— |
157,802 |
157,802 |
|||||
F-56
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
14 Fixed asset investments (cont.) |
|
Movements in fixed asset investments |
Shares in |
|
|
£ |
||
|
Cost or valuation |
||
|
At 1 July 2025 and 30 June 2026 |
157,802 |
|
|
Carrying amount |
||
|
At 30 June 2026 |
157,802 |
|
|
At 30 June 2025 |
157,802 |
15 Subsidiaries
Details of the company’s subsidiaries at 30 June 2026 are as follows:
|
Name of undertaking |
Registered |
Nature of business |
Class of |
% Held |
||||
|
Saltire Drilling Tools Limited |
See below |
Dormant |
Ordinary |
100.00 |
||||
|
Saltire Energy (Norway) Limited |
See below |
Dormant |
Ordinary |
100.00 |
||||
|
Saltire Energy PTE Limited |
See below |
Provision of oilfield drilling equipment and services |
Ordinary |
100.00 |
||||
|
Saltire Pressure Control Limited |
See below |
Provision of oilfield drilling equipment and services |
Ordinary |
100.00 |
||||
|
Saltire Energy SDN. BHD. |
See below |
Provision of oilfield drilling equipment and services |
Ordinary |
100.00 |
The registered office of Saltire Drilling Tools Limited, Saltire Energy (Norway) Limited and Saltire Pressure Control Limited is 100 Union Street, Aberdeen, AB10 1QR.
The registered office of Saltire Energy PTE Limited is 30 Cecil Street, 19-08, Prudential Tower, Singapore 049712.
The registered office of Saltire Energy SDN. BHD. is 152, Dinasti Sentral, Jalan Kuchai Maju 18, Off Jalan Kuchai Lama, 58200 Kuala Lumpur W.P. Kuala Lumpur Malaysia.
16 Stocks
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Finished goods and goods for resale |
29,018 |
42,709 |
15,808 |
29,997 |
||||
F-57
Table of Contents
|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
17 Debtors
|
Group |
Company |
|||||||
|
Amounts falling due within one year: |
2026 |
2025 |
2026 |
2025 |
||||
|
£ |
£ |
£ |
£ |
|||||
|
Trade debtors |
5,398,056 |
5,651,257 |
4,305,960 |
4,477,472 |
||||
|
Gross amounts owed by contract customers |
7,819 |
329,662 |
— |
— |
||||
|
Corporation tax recoverable |
682,550 |
— |
1,048,609 |
159,617 |
||||
|
Amounts owed by group undertakings |
— |
— |
294,514 |
52,425 |
||||
|
Amounts owed by related parties |
16,356,996 |
13,675,799 |
16,711,488 |
13,297,494 |
||||
|
Other debtors |
755,619 |
129,763 |
746,582 |
130,219 |
||||
|
Prepayments and accrued income |
1,138,405 |
993,797 |
565,910 |
494,570 |
||||
|
24,339,445 |
20,780,278 |
23,673,063 |
18,611,797 |
|||||
Amounts owed by related parties are interest free and have no formal repayment date.
Other debtors include £746,582 (2025 — £Nil) in respect of a director’s loan. Details of movements in the year are outlined at note 29.
18 Creditors: amounts falling due within one year
|
Notes |
Group |
Company |
||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Obligations under finance leases |
21 |
3,043,940 |
4,497,448 |
3,000,336 |
4,361,466 |
|||||
|
Trade creditors |
1,693,664 |
2,067,575 |
1,314,614 |
1,470,332 |
||||||
|
Amounts owed to group undertakings |
— |
— |
920,706 |
2,820,460 |
||||||
|
Amounts owed to related parties |
142,341 |
151,145 |
142,341 |
151,145 |
||||||
|
Corporation tax payable |
— |
301,293 |
— |
— |
||||||
|
Other taxation and social security |
292,276 |
76,160 |
194,283 |
53,149 |
||||||
|
Other creditors |
1,930,499 |
1,361,376 |
1,231,141 |
1,343,091 |
||||||
|
Accruals and deferred income |
1,260,005 |
1,643,940 |
956,808 |
1,478,543 |
||||||
|
8,362,725 |
10,098,937 |
7,760,229 |
11,678,186 |
|||||||
Obligations under finance lease agreements are secured by standard securities as well as a floating charge over the group’s assets.
Included within other creditors of the group and company is £1,907,611 (2025 — £1,329,638) relating to tax settlements on the winding up of historic employer pension and certain trust arrangements.
Amounts owed to related parties and group undertakings are interest free and have no formal repayment date.
F-58
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|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
19 Creditors: amounts falling due after more than one year
|
Group |
Company |
|||||||||
|
Notes |
2026 |
2025 |
2026 |
2025 |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Obligations under finance leases |
21 |
997,091 |
785,651 |
997,091 |
742,047 |
|||||
|
Other borrowings |
20 |
— |
3,446,748 |
— |
— |
|||||
|
997,091 |
4,232,399 |
997,091 |
742,047 |
|||||||
Obligations under finance lease agreements are secured by standard securities as well as a floating charge over the group’s assets.
20 Loans and overdrafts
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Other borrowings |
— |
3,446,748 |
— |
— |
||||
|
Payable after one year |
— |
3,446,748 |
— |
— |
||||
Other borrowings are in respect of a director’s loan which is unsecured. During the current year, amounts owed were repaid with further details outlined at note 29.
21 Finance lease obligations
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Future minimum lease payments due under finance leases: |
||||||||
|
Within one year |
3,043,940 |
4,497,448 |
3,000,336 |
4,361,466 |
||||
|
In two to five years |
997,091 |
785,651 |
997,091 |
742,047 |
||||
|
4,041,031 |
5,283,099 |
3,997,427 |
5,103,513 |
|||||
Finance lease payments represent rentals payable by the company or group for certain items of plant. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
22 Deferred taxation
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
|
Group |
Liabilities |
Liabilities |
|||
|
£ |
£ |
||||
|
Fixed asset timing differences |
19,140,511 |
|
18,918,644 |
||
|
Short term timing differences |
(1,777 |
) |
6,485 |
||
|
19,138,734 |
|
18,925,129 |
|||
F-59
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|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
22 Deferred taxation (cont.) |
|
Company |
Liabilities |
Liabilities |
|||
|
£ |
£ |
||||
|
Fixed asset timing differences |
15,644,594 |
|
15,214,129 |
||
|
Short term timing differences |
(1,128 |
) |
5,767 |
||
|
15,643,466 |
|
15,219,896 |
|||
|
Movements in the year: |
Group |
Company |
||
|
£ |
£ |
|||
|
Liability at 1 July 2025 |
18,925,129 |
15,219,896 |
||
|
Charge to profit or loss |
213,605 |
423,570 |
||
|
Liability at 30 June 2026 |
19,138,734 |
15,643,466 |
Deferred tax balances are not expected to reverse within the next 12 months.
The group has estimated unrecognised tax losses of £Nil (2025 — £2m) available for offset against future trading profits.
23 Retirement benefit schemes
|
Defined contribution schemes |
2026 |
2025 |
||
|
£ |
£ |
|||
|
Charge to profit or loss in respect of defined contribution schemes |
121,908 |
115,789 |
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Contributions totalling £22,887 (2025: £19,481) were payable to the fund at the year end and are included in creditors.
24 Share capital
|
Group and company |
2026 |
2025 |
2026 |
2025 |
||||
|
Number |
Number |
£ |
£ |
|||||
|
Ordinary share capital |
||||||||
|
Issued and fully paid |
||||||||
|
Ordinary shares of £1 each |
1,240 |
1,240 |
1,240 |
1,240 |
All issued Ordinary shares carry equal voting rights with shareholders entitled to one vote per share held. The holders of Ordinary shares are entitled to receive dividends in proportion to shareholdings as well as to participate in the distribution of assets in a winding up event.
25 Reserves
Profit and loss reserves
Profit and loss reserves represent the total comprehensive income for the year and prior periods less dividends paid.
F-60
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|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
26 Financial commitments, guarantees and contingent liabilities
The company is party to an unlimited cross guarantee alongside Saltire Pressure Control Limited, Saltire Drilling Tools Limited, Foxley Energy Limited and Saltire Energy LLC. The potential liability to the company at 30 June 2026 was £Nil (2025 — £Nil) relating to the borrowings of other entities party to the cross guarantee.
27 Capital commitments
Amounts contracted for but not provided in the financial statements:
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Acquisition of tangible fixed assets |
1,677,016 |
— |
1,677,016 |
— |
||||
28 Related party transactions
Remuneration of key management personnel
The directors of the company are regarded as the group’s key management personnel. Details of remuneration paid to directors is outlined at note 8.
Transactions with related parties
During the year the group entered into the following transactions with related parties:
|
Sales and recharges |
Purchases and recharges |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Group |
||||||||
|
Other related parties |
1,188,825 |
3,818,999 |
2,535,311 |
3,774,433 |
||||
|
Company |
||||||||
|
Other related parties |
997,326 |
2,398,557 |
1,515,609 |
2,839,200 |
||||
Purchases and recharges from related parties include £113,970 (2025 — £989,874) in respect of tangible fixed assets acquired by the group (company — £108,138 (2025 — £989,874)).
|
Rent paid |
Sale of assets |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Group |
||||||||
|
Other related parties |
1,136,000 |
888,000 |
5,995,503 |
1,712,155 |
||||
|
Company |
||||||||
|
Other related parties |
776,000 |
648,000 |
5,995,503 |
341,519 |
||||
F-61
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|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
28 Related party transactions (cont.) |
Company
The company has taken advantage of disclosure exemptions available under Section 33 of FRS 102 whereby it has not disclosed transactions entered into with any wholly-owned subsidiary of the group.
The following amounts were outstanding at the reporting end date:
|
Amounts due to related parties |
2026 |
2025 |
||
|
£ |
£ |
|||
|
Group |
||||
|
Other related parties |
142,341 |
151,145 |
||
|
Company |
||||
|
Other related parties |
142,341 |
151,145 |
The following amounts were outstanding at the reporting end date:
|
Amounts due from related parties |
2026 |
2025 |
||
|
£ |
£ |
|||
|
Group |
||||
|
Other related parties |
16,356,996 |
8,718,339 |
||
|
Company |
||||
|
Other related parties |
16,711,488 |
8,340,034 |
29 Directors’ transactions
The following amounts have been repaid to/advanced to the director in the year:
|
Description |
% Rate |
Opening |
Amounts |
Amounts |
Closing |
||||||||
|
£ |
£ |
£ |
£ |
||||||||||
|
Director’s loan |
— |
3,446,748 |
(746,582 |
) |
(3,446,748 |
) |
(746,582 |
) |
|||||
|
3,446,748 |
(746,582 |
) |
(3,446,748 |
) |
(746,582 |
) |
|||||||
30 Controlling party
The company is controlled by M D Loggie, director.
F-62
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|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
31 Cash generated from group operations
|
2026 |
2025 |
|||||
|
£ |
£ |
|||||
|
Profit for the year after tax |
1,231,175 |
|
9,485,134 |
|
||
|
|
|
|||||
|
Adjustments for: |
|
|
||||
|
Taxation charged |
1,223,782 |
|
4,638,729 |
|
||
|
Finance costs |
602,136 |
|
290,191 |
|
||
|
Investment income |
(50,892 |
) |
(7,730 |
) |
||
|
Gain on disposal of tangible fixed assets |
(101,387 |
) |
(703,555 |
) |
||
|
Depreciation and impairment of tangible fixed assets |
5,564 |
|
— |
|
||
|
Exceptional items |
6,376,448 |
|
— |
|
||
|
|
|
|||||
|
Movements in working capital: |
|
|
||||
|
Decrease in stocks |
13,691 |
|
6,792 |
|
||
|
(Increase)/decrease in debtors |
(2,925,445 |
) |
6,653,536 |
|
||
|
Decrease in creditors |
(4,998,102 |
) |
(11,459,029 |
) |
||
|
Cash generated from operations |
1,376,970 |
|
8,904,068 |
|
||
32 Analysis of changes in net debt — group
|
1 July |
Cash |
New finance |
30 June |
||||||||
|
£ |
£ |
£ |
£ |
||||||||
|
Cash at bank and in hand |
1,290,296 |
|
457,016 |
— |
|
1,747,312 |
|
||||
|
Borrowings excluding overdrafts |
(3,446,748 |
) |
3,446,748 |
— |
|
— |
|
||||
|
Obligations under finance leases |
(5,283,099 |
) |
4,775,726 |
(3,533,658 |
) |
(4,041,031 |
) |
||||
|
(7,439,551 |
) |
8,679,490 |
(3,533,658 |
) |
(2,293,719 |
) |
|||||
33 Summary of significant differences between UK GAAP and US GAAP
The consolidated group financial statements have been prepared in accordance with generally accepted accounting practice in the United Kingdom (“UK GAAP”) defined as FRS 102 in Note 1.1, which differ in certain significant respects from accounting principles generally accepted in the United States of America (“US GAAP”). A description of the differences and their effects on the group’s profit and total comprehensive income and total equity are set out below.
F-63
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|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
33 Summary of significant differences between UK GAAP and US GAAP (cont.) |
Significant adjustments to consolidated profit and total comprehensive income
Effect of differences between UK GAAP and US GAAP on the group’s profit and total comprehensive income for the year ended 30 June 2026 and 2025:
|
References |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Profit and total comprehensive income for the consolidated statement of comprehensive income in accordance with UK GAAP |
1,231,175 |
|
9,485,134 |
|
||||
|
US GAAP adjustments – increase/(decrease) due to: |
|
|
||||||
|
Bad debt provision |
a |
84,820 |
|
2,731 |
|
|||
|
Income taxes |
c |
(21,205 |
) |
(683 |
) |
|||
|
63,615 |
|
2,048 |
|
|||||
|
Profit and total comprehensive income in accordance with US GAAP |
1,294,790 |
|
9,487,182 |
|
||||
Significant adjustments to consolidated group balance sheet and statement of changes in equity
Effect of differences between UK GAAP and US GAAP on the group’s total equity at 30 June 2026 and 2025:
|
References |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Total equity for the consolidated group balance sheet in accordance with UK GAAP |
86,286,480 |
|
85,055,305 |
|
||||
|
US GAAP adjustments – increase/(decrease) due to: |
|
|
||||||
|
Trade debtors |
a |
(88,533 |
) |
(182,691 |
) |
|||
|
Intangible fixed assets – goodwill |
b |
25,760 |
|
25,760 |
|
|||
|
Income taxes |
c |
26,270 |
|
47,475 |
|
|||
|
(36,503 |
) |
(109,456 |
) |
|||||
|
Total equity in accordance with US GAAP |
86,249,977 |
|
84,945,849 |
|
||||
Significant adjustments to consolidated group statement of cash flows
There were no significant differences to the group statement of cash flows under US GAAP.
Description of differences between UK GAAP and US GAAP
a. Estimated credit losses
Under UK GAAP, financial assets are assessed for indicators of impairment at each reporting end date. An impairment loss is recognised in the statement of comprehensive income when there is objective evidence that, as a result of one or more events that occurred after initial recognition of the financial asset, the estimated future cash flows have been affected.
Under US GAAP, the current expected credit loss (CECL) model is utilized to estimate credit losses on financial assets. The CECL model requires the recognition of an allowance for lifetime expected credit losses upon initial recognition, even if the risk of loss is remote. The estimate of expected credit losses considers current conditions, reasonable and supportable forecasts of future conditions, and historical loss experience.
F-64
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|
SALTIRE ENERGY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
|
33 Summary of significant differences between UK GAAP and US GAAP (cont.) |
b. Intangible fixed assets — goodwill
Under UK GAAP, goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over its expected life, which is 20 years for the group.
Under US GAAP, goodwill is recognised at cost and is subsequently measured at cost less accumulated impairment losses. As an indefinite-lived asset, goodwill is not amortised.
c. Income taxes
The tax effects of the adjustments described above are calculated using the standard rate of corporation tax in the UK of 25.00%, charged or credited to the consolidated profit and total comprehensive income.
F-65
Table of Contents
|
FOXLEY ENERGY LIMITED COMPANY INFORMATION |
|
Directors |
Mr M D Loggie Mr J W Loggie Mr M D J Loggie Jnr |
|
|
Secretary |
Peterkins Solicitors |
|
|
Company number |
SC539080 |
|
|
Registered office |
100 Union Street Aberdeen AB10 1QR |
|
|
Auditor |
AAB Audit & Accountancy Limited Kingshill View Prime Four Business Park Kingswells Aberdeen AB15 8PU |
F-66
Table of Contents
|
FOXLEY ENERGY LIMITED DIRECTORS’ RESPONSIBILITIES STATEMENT FOR THE YEAR ENDED 30 JUNE 2025 |
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
F-67
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|
FOXLEY ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FOXLEY ENERGY LIMITED |
Opinion
We have audited the financial statements of Foxley Energy Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2025 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Foxley Energy Limited as at 30 June 2025 and the results in the statement of comprehensive income for the years ended 30 June 2025 in accordance with accounting principles generally accepted, being the financial reporting framework referred to above.
Basis for opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
As discussed in Note 29 to the financial statements, the Company prepares its financial statements in accordance with United Kingdom Accounting Standards, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice), which differs from accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s and parent company’s ability to continue as a going concern for a period of at least twelve months from the end of the reporting period of the financial statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our
F-68
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|
FOXLEY ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT (CONTINUED) TO THE MEMBERS OF FOXLEY ENERGY LIMITED |
responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a fair presentation, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit is considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company and the sector in which they operate, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
• Companies Act 2006;
• UK Tax legislation;
F-69
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|
FOXLEY ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT (CONTINUED) TO THE MEMBERS OF FOXLEY ENERGY LIMITED |
• Health and safety regulation; and
• UK Generally Accepted Accounting Practice.
We identified the greatest risk of material impact on the financial statements from irregularities including fraud to be:
• Management override of controls to manipulate the group and parent company’s key performance indicators to meet targets;
• Timing and completeness of revenue recognition;
• Management judgement applied in calculating provisions; and
• Compliance with relevant laws and regulations which directly impact the financial statements and those that the group and parent company needs to comply with for the purpose of trading.
Our audit procedures to respond to those risks included:
• Testing of journal entries and other adjustments for appropriateness;
• Testing a sample of sales transactions and reviewing revenue recognition around the year end;
• Evaluating the business rationale of significant transactions outside the normal course of business;
• Reviewing judgements made by management in their calculation of accounting estimates for potential management bias;
• Enquiries of management about litigation and claims and inspection of relevant correspondence; and
• Reviewing legal and professional fees to identify indications of actual or potential litigation, claims and any non-compliance with laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation.
In performing an audit in accordance with US GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group or Company’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
F-70
Table of Contents
|
FOXLEY ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT (CONTINUED) TO THE MEMBERS OF FOXLEY ENERGY LIMITED |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Use of our report
This report is made solely to the company’s members, as a body. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
AAB Audit & Accountancy Limited
Registered Auditor
Kingshill View
Prime Four Business Park
Kingswells
Aberdeen
AB15 8PU
Date: _______________
F-71
Table of Contents
|
FOXLEY ENERGY LIMITED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2025 |
|
Notes |
2025 |
2024 |
||||||
|
£ |
£ |
|||||||
|
Turnover |
3 |
14,500,030 |
|
13,504,733 |
|
|||
|
Cost of sales |
(7,550,743 |
) |
(7,336,412 |
) |
||||
|
Gross profit |
6,949,287 |
|
6,168,321 |
|
||||
|
Administrative expenses |
(1,225,616 |
) |
(2,056,127 |
) |
||||
|
Other operating income |
37,049 |
|
47,197 |
|
||||
|
Exceptional item |
4 |
— |
|
1,245,770 |
|
|||
|
Operating profit |
5 |
5,760,720 |
|
5,405,161 |
|
|||
|
Interest payable and similar expenses |
9 |
(214,033 |
) |
(195,166 |
) |
|||
|
Profit before taxation |
5,546,687 |
|
5,209,995 |
|
||||
|
Tax on profit |
10 |
(1,063,308 |
) |
(997,382 |
) |
|||
|
Profit for the financial year |
22 |
4,483,379 |
|
4,212,613 |
|
|||
|
|
|
|||||||
|
Other comprehensive (expenditure)/income |
|
|
||||||
|
Currency translation differences |
(1,352,883 |
) |
59,261 |
|
||||
|
Total comprehensive income for the year |
3,130,496 |
|
4,271,874 |
|
||||
|
|
|
|||||||
|
Profit for the financial year is attributable to: |
|
|
||||||
|
– Owners of the parent company |
4,047,676 |
|
3,914,939 |
|
||||
|
– Non-controlling interests |
435,703 |
|
297,674 |
|
||||
|
4,483,379 |
|
4,212,613 |
|
|||||
|
|
|
|||||||
|
Total comprehensive income for the year is attributable to: |
|
|
||||||
|
– Owners of the parent company |
2,964,894 |
|
3,961,677 |
|
||||
|
– Non-controlling interests |
165,602 |
|
310,197 |
|
||||
|
3,130,496 |
|
4,271,874 |
|
|||||
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
F-72
Table of Contents
|
FOXLEY ENERGY LIMITED GROUP BALANCE SHEET AS AT 30 JUNE 2025 |
|
Notes |
2025 |
2024 |
||||||
|
£ |
as restated |
|||||||
|
Fixed assets |
|
|
||||||
|
Tangible assets |
11 |
28,510,976 |
|
25,731,021 |
|
|||
|
|
|
|||||||
|
Current assets |
|
|
||||||
|
Stocks |
14 |
425,177 |
|
339,917 |
|
|||
|
Debtors |
15 |
9,119,974 |
|
7,451,384 |
|
|||
|
Cash at bank and in hand |
1,792,437 |
|
256,352 |
|
||||
|
11,337,588 |
|
8,047,653 |
|
|||||
|
Creditors: amounts falling due within one year |
16 |
(12,137,853 |
) |
(8,636,191 |
) |
|||
|
Net current liabilities |
(800,265 |
) |
(588,538 |
) |
||||
|
Total assets less current liabilities |
27,710,711 |
|
25,142,483 |
|
||||
|
Creditors: amounts falling due after more than one year |
17 |
(545,217 |
) |
(1,849,578 |
) |
|||
|
|
|
|||||||
|
Provisions for liabilities |
|
|
||||||
|
Deferred tax liability |
19 |
2,727,878 |
|
1,985,785 |
|
|||
|
(2,727,878 |
) |
(1,985,785 |
) |
|||||
|
Net assets |
24,437,616 |
|
21,307,120 |
|
||||
|
|
|
|||||||
|
Capital and reserves |
|
|
||||||
|
Called up share capital |
21 |
100 |
|
100 |
|
|||
|
Profit and loss reserves |
22 |
21,189,860 |
|
18,224,966 |
|
|||
|
Equity attributable to owners of the parent company |
21,189,960 |
|
18,225,066 |
|
||||
|
Non-controlling interests |
3,247,656 |
|
3,082,054 |
|
||||
|
24,437,616 |
|
21,307,120 |
|
|||||
The financial statements were approved by the board of directors and authorised for issue on _________ and are signed on its behalf by:
|
|
||
|
Mr J W Loggie |
F-73
Table of Contents
|
FOXLEY ENERGY LIMITED COMPANY BALANCE SHEET AS AT 30 JUNE 2025 |
|
Notes |
2025 |
2024 |
||||||
|
£ |
as restated |
|||||||
|
Fixed assets |
|
|
||||||
|
Tangible assets |
11 |
20,827,059 |
|
21,850,052 |
|
|||
|
Investments |
12 |
16,271 |
|
16,271 |
|
|||
|
20,843,330 |
|
21,866,323 |
|
|||||
|
|
|
|||||||
|
Current assets |
|
|
||||||
|
Debtors |
15 |
1,362,059 |
|
2,812,335 |
|
|||
|
Cash at bank and in hand |
3,629 |
|
3,494 |
|
||||
|
1,365,688 |
|
2,815,829 |
|
|||||
|
Creditors: amounts falling due within one year |
16 |
(11,386,042 |
) |
(15,669,201 |
) |
|||
|
Net current liabilities |
(10,020,354 |
) |
(12,853,372 |
) |
||||
|
Total assets less current liabilities |
10,822,976 |
|
9,012,951 |
|
||||
|
Creditors: amounts falling due after more than one year |
17 |
(110,254 |
) |
(1,377,094 |
) |
|||
|
|
|
|||||||
|
Provisions for liabilities |
|
|
||||||
|
Deferred tax liability |
19 |
2,727,878 |
|
1,985,785 |
|
|||
|
(2,727,878 |
) |
(1,985,785 |
) |
|||||
|
Net assets |
7,984,844 |
|
5,650,072 |
|
||||
|
|
|
|||||||
|
Capital and reserves |
|
|
||||||
|
Called up share capital |
21 |
100 |
|
100 |
|
|||
|
Profit and loss reserves |
22 |
7,984,744 |
|
5,649,972 |
|
|||
|
Total equity |
7,984,844 |
|
5,650,072 |
|
||||
The company has not presented its own profit and loss account and related notes. The company’s profit for the year was £2,334,772 (2024 — £2,531,330 profit).
The financial statements were approved by the board of directors and authorised for issue on _________ and are signed on its behalf by:
|
|
||
|
Mr J W Loggie |
||
|
Company Registration No. SC539080 |
||
F-74
Table of Contents
|
FOXLEY ENERGY LIMITED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2025 |
|
Notes |
Share |
Profit |
Total |
Non- |
Total |
|||||||||||
|
£ |
£ |
£ |
£ |
£ |
||||||||||||
|
As restated for the period ended 30 June 2024: |
|
|
|
|
||||||||||||
|
|
|
|
|
|||||||||||||
|
Balance at 1 July 2023 |
100 |
14,529,093 |
|
14,529,193 |
|
2,771,857 |
|
17,301,050 |
|
|||||||
|
Prior period adjustments |
28 |
— |
(265,804 |
) |
(265,804 |
) |
— |
|
(265,804 |
) |
||||||
|
As restated |
100 |
14,263,289 |
|
14,263,389 |
|
2,771,857 |
|
17,035,246 |
|
|||||||
|
|
|
|
|
|||||||||||||
|
Year ended 30 June 2024: |
|
|
|
|
||||||||||||
|
Profit for the year |
— |
3,914,939 |
|
3,914,939 |
|
297,674 |
|
4,212,613 |
|
|||||||
|
Other comprehensive income: |
|
|
|
|
||||||||||||
|
Currency translation differences |
— |
59,261 |
|
59,261 |
|
— |
|
59,261 |
|
|||||||
|
Amounts attributable to non-controlling interests |
— |
(12,523 |
) |
(12,523 |
) |
12,523 |
|
— |
|
|||||||
|
Total comprehensive income for the year |
— |
3,961,677 |
|
3,961,677 |
|
310,197 |
|
4,271,874 |
|
|||||||
|
Balance at 30 June 2024 |
100 |
18,224,966 |
|
18,225,066 |
|
3,082,054 |
|
21,307,120 |
|
|||||||
|
|
|
|
|
|||||||||||||
|
Year ended 30 June 2025: |
|
|
|
|
||||||||||||
|
Profit for the year |
— |
4,047,676 |
|
4,047,676 |
|
435,703 |
|
4,483,379 |
|
|||||||
|
Other comprehensive expenditure: |
|
|
|
|
||||||||||||
|
Currency translation differences |
— |
(1,352,883 |
) |
(1,352,883 |
) |
— |
|
(1,352,883 |
) |
|||||||
|
Amounts attributable to non-controlling interests |
— |
270,101 |
|
270,101 |
|
(270,101 |
) |
— |
|
|||||||
|
Total comprehensive income for the year |
— |
2,964,894 |
|
2,964,894 |
|
165,602 |
|
3,130,496 |
|
|||||||
|
Balance at 30 June 2025 |
100 |
21,189,860 |
|
21,189,960 |
|
3,247,656 |
|
24,437,616 |
|
|||||||
F-75
Table of Contents
|
FOXLEY ENERGY LIMITED COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2025 |
|
Notes |
Share |
Profit |
Total |
|||||||
|
£ |
£ |
£ |
||||||||
|
As restated for the period ended 30 June 2024: |
|
|
||||||||
|
|
|
|||||||||
|
Balance at 1 July 2023 |
100 |
3,384,446 |
|
3,384,546 |
|
|||||
|
Prior period adjustments |
28 |
— |
(265,804 |
) |
(265,804 |
) |
||||
|
As restated |
100 |
3,118,642 |
|
3,118,742 |
|
|||||
|
|
|
|||||||||
|
Year ended 30 June 2024: |
|
|
||||||||
|
Profit and total comprehensive income for the year |
— |
2,531,330 |
|
2,531,330 |
|
|||||
|
Balance at 30 June 2024 |
100 |
5,649,972 |
|
5,650,072 |
|
|||||
|
|
|
|||||||||
|
Year ended 30 June 2025: |
|
|
||||||||
|
Profit and total comprehensive income for the year |
— |
2,334,772 |
|
2,334,772 |
|
|||||
|
Balance at 30 June 2025 |
100 |
7,984,744 |
|
7,984,844 |
|
|||||
F-76
Table of Contents
|
FOXLEY ENERGY LIMITED GROUP STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2025 |
|
Notes |
2025 |
2024 |
||||||
|
£ |
£ |
|||||||
|
Cash flows from operating activities |
|
|
||||||
|
Cash generated from operations |
26 |
7,807,978 |
|
5,830,156 |
|
|||
|
Interest paid |
(214,033 |
) |
(195,166 |
) |
||||
|
Income taxes paid |
(271,936 |
) |
— |
|
||||
|
Net cash inflow from operating activities |
7,322,009 |
|
5,634,990 |
|
||||
|
|
|
|||||||
|
Investing activities |
|
|
||||||
|
Purchase of tangible fixed assets |
(4,567,413 |
) |
(2,017,834 |
) |
||||
|
Proceeds on disposal of tangible fixed assets |
1,267,713 |
|
— |
|
||||
|
Net cash used in investing activities |
(3,299,700 |
) |
(2,017,834 |
) |
||||
|
|
|
|||||||
|
Financing activities |
|
|
||||||
|
Payment of finance leases obligations |
(2,466,550 |
) |
(3,543,813 |
) |
||||
|
Net cash used in financing activities |
(2,466,550 |
) |
(3,543,813 |
) |
||||
|
Net increase in cash and cash equivalents |
1,555,759 |
|
73,343 |
|
||||
|
Cash and cash equivalents at beginning of year |
256,352 |
|
182,537 |
|
||||
|
Effect of foreign exchange rates |
(19,674 |
) |
472 |
|
||||
|
Cash and cash equivalents at end of year |
1,792,437 |
|
256,352 |
|
||||
F-77
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies
Company information
Foxley Energy Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 100 Union Street, Aberdeen, Scotland, AB10 1QR.
The group consists of Foxley Energy Limited and all of its subsidiaries.
1.1 Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”).
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements (where applicable):
• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2 Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Foxley Energy Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 June 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
F-78
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies (cont.)
1.3 Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4 Turnover
Turnover represents net income receivable from the sale and rental of drilling equipment.
Turnover from the sale of drilling equipment is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Turnover in respect of the rental of drilling equipment is recognised on a straight line basis over the rental period.
1.5 Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
|
Plant and equipment |
see below |
|||
|
Fixtures and fittings |
25% straight line |
|||
|
Motor vehicles |
25% straight line |
The group depreciates its plant and equipment following an assessment of the depreciable amount of the underlying assets. Where the depreciable amount is above zero, the group depreciates this element on a 25% straight line basis. Plant and equipment includes drilling equipment that the group rents to its customers. These assets are continually refurbished to a very high standard on return from hire and this is reflected in the high residual values for much of the group’s assets and in the absence of a depreciation charge on certain equipment. The directors believe this approach fairly reflects the consumption of economic benefits in relation to certain rental assets. Refurbishment costs are charged to the statement of comprehensive income.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of comprehensive income.
1.6 Fixed asset investments
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
F-79
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies (cont.)
1.7 Impairment of fixed assets
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of comprehensive income.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the statement of comprehensive income.
1.8 Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the statement of comprehensive income. Reversals of impairment losses are also recognised in the statement of comprehensive income.
1.9 Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.10 Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group’s balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
F-80
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies (cont.)
Basic financial assets
Basic financial assets, which include certain debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the statement of comprehensive income.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the statement of comprehensive income.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including certain creditors and loans from related party undertakings, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
F-81
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies (cont.)
Derecognition of financial liabilities
Financial liabilities are derecognised when the group’s contractual obligations expire or are discharged or cancelled.
1.11 Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
1.12 Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
F-82
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|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
1 Accounting policies (cont.)
1.14 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the asset’s fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to the statement of comprehensive income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.16 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in the statement of comprehensive income.
The financial statements of overseas subsidiary undertakings are translated at the rate of exchange ruling at the balance sheet date. The exchange difference arising on the retranslation of opening net assets is taken to reserves through other comprehensive income. The income and expenditure of foreign operations are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions. Exchange differences arising from this translation of foreign operations are taken to reserves through other comprehensive income.
2 Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
F-83
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FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
2 Judgements and key sources of estimation uncertainty (cont.)
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Carrying value of plant & equipment
Plant and equipment includes drilling equipment that the group rents to its customers. These assets are continually refurbished to a very high standard on return from hire and this amongst other factors is reflected in their high residual values and low depreciation. The assessment of residual value requires the directors to exercise judgement including an annual reassessment based on current market conditions.
The carrying value of plant and equipment is outlined in the fixed asset note at note 11.
Amounts due from related parties
Amounts owed from related parties are stated in the accounts at their transaction price less any appropriate provision for irrecoverable amounts. In determining if a provision is required, the directors exercise judgement, considering any specific indicators that the recoverability of the balance may be in doubt.
Details of amounts owed to the group from related parties is outlined at note 15.
3 Turnover and other revenue
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Turnover analysed by class of business |
||||
|
Sale and hire rental of drilling equipment |
14,500,030 |
13,504,733 |
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Turnover analysed by geographical market |
||||
|
UK |
1,988,775 |
1,815,636 |
||
|
Middle East |
12,043,738 |
10,884,397 |
||
|
Far East |
366,168 |
332,069 |
||
|
Europe |
101,349 |
472,631 |
||
|
14,500,030 |
13,504,733 |
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Other significant revenue |
||||
|
Sundry income |
37,049 |
47,197 |
4 Exceptional item
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Income |
||||
|
VAT receipt on conclusion of HMRC review |
— |
1,245,770 |
F-84
Table of Contents
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FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
5 Operating profit
|
2025 |
2024 |
||||
|
£ |
£ |
||||
|
Operating profit for the year is stated after charging/(crediting): |
|
||||
|
Exchange differences |
(603,661 |
) |
249,199 |
||
|
Depreciation of owned tangible fixed assets |
33,595 |
|
19,467 |
||
|
Profit on disposal of tangible fixed assets |
(147,643 |
) |
— |
||
6 Auditor’s remuneration
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Fees payable to the company’s auditor and associates: |
||||
|
For audit services |
||||
|
Audit of the financial statements of the group and company |
30,576 |
28,000 |
7 Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
Number |
Number |
Number |
Number |
|||||
|
Production staff |
30 |
25 |
— |
— |
||||
|
Management |
3 |
3 |
3 |
3 |
||||
|
Total |
33 |
28 |
3 |
3 |
||||
Their aggregate remuneration comprised:
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Wages and salaries |
1,306,704 |
873,963 |
— |
— |
||||
|
Pension costs |
2,310 |
28,747 |
— |
— |
||||
|
1,309,014 |
902,710 |
— |
— |
|||||
8 Directors’ remuneration
No company director received remuneration from the group during the current or prior reporting period.
9 Interest payable and similar expenses
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Interest on finance leases and hire purchase contracts |
214,033 |
195,166 |
F-85
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FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
10 Taxation
|
2025 |
2024 |
|||
|
£ |
£ |
|||
|
Current tax |
||||
|
Foreign current tax on profits for the current period |
321,215 |
147,194 |
||
|
Deferred tax |
||||
|
Origination and reversal of timing differences |
742,093 |
850,188 |
||
|
Total tax charge |
1,063,308 |
997,382 |
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
|
2025 |
2024 |
|||||
|
£ |
£ |
|||||
|
Profit before taxation |
5,546,687 |
|
5,209,995 |
|
||
|
|
|
|||||
|
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%) |
1,386,672 |
|
1,302,499 |
|
||
|
Tax effect of expenses that are not deductible in determining taxable profit |
136 |
|
— |
|
||
|
Change in unrecognised deferred tax assets |
9,006 |
|
— |
|
||
|
Effect of overseas tax rates |
(302,102 |
) |
(305,117 |
) |
||
|
Other tax adjustments, reliefs and transfers |
(30,404 |
) |
— |
|
||
|
Taxation charge |
1,063,308 |
|
997,382 |
|
||
11 Tangible fixed assets
|
Group |
Plant and |
Fixtures and |
Motor |
Total |
||||||||
|
£ |
£ |
£ |
£ |
|||||||||
|
Cost |
|
|
|
|
||||||||
|
At 1 July 2024 – as restated |
25,836,079 |
|
23,629 |
|
22,067 |
|
25,881,775 |
|
||||
|
Additions |
4,564,840 |
|
2,573 |
|
— |
|
4,567,413 |
|
||||
|
Disposals |
(1,120,070 |
) |
— |
|
— |
|
(1,120,070 |
) |
||||
|
Exchange adjustments |
(643,941 |
) |
(2,025 |
) |
(3,812 |
) |
(649,778 |
) |
||||
|
At 30 June 2025 |
28,636,908 |
|
24,177 |
|
18,255 |
|
28,679,340 |
|
||||
|
|
|
|
|
|||||||||
|
Depreciation and impairment |
|
|
|
|
||||||||
|
At 1 July 2024 |
116,935 |
|
11,752 |
|
22,067 |
|
150,754 |
|
||||
|
Depreciation charged in the year |
27,256 |
|
6,339 |
|
— |
|
33,595 |
|
||||
|
Exchange adjustments |
(10,872 |
) |
(1,301 |
) |
(3,812 |
) |
(15,985 |
) |
||||
|
At 30 June 2025 |
133,319 |
|
16,790 |
|
18,255 |
|
168,364 |
|
||||
|
|
|
|
|
|||||||||
|
Carrying amount |
|
|
|
|
||||||||
|
At 30 June 2025 |
28,503,589 |
|
7,387 |
|
— |
|
28,510,976 |
|
||||
|
At 30 June 2024 – as restated |
25,719,144 |
|
11,877 |
|
— |
|
25,731,021 |
|
||||
F-86
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
11 Tangible fixed assets (cont.)
|
Company |
Plant and |
||
|
£ |
|||
|
Cost |
|
||
|
At 1 July 2024 – as restated |
21,850,052 |
|
|
|
Disposals |
(1,022,993 |
) |
|
|
At 30 June 2025 |
20,827,059 |
|
|
|
|
|||
|
Depreciation and impairment |
|
||
|
At 1 July 2024 and 30 June 2025 |
— |
|
|
|
|
|||
|
Carrying amount |
|
||
|
At 30 June 2025 |
20,827,059 |
|
|
|
At 30 June 2024 – as restated |
21,850,052 |
|
|
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Plant and equipment |
5,548,652 |
9,581,944 |
5,548,652 |
9,581,944 |
||||
12 Fixed asset investments
|
Group |
Company |
|||||||||
|
Notes |
2025 |
2024 |
2025 |
2024 |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Investments in subsidiaries |
13 |
— |
— |
16,271 |
16,271 |
|||||
|
Movements in fixed asset investments |
Shares in |
|
|
£ |
||
|
Cost |
||
|
At 1 July 2024 and 30 June 2025 |
16,271 |
|
|
Carrying amount |
||
|
At 30 June 2025 |
16,271 |
|
|
At 30 June 2024 |
16,271 |
13 Subsidiaries
Details of the company’s subsidiaries at 30 June 2025 are as follows:
|
Name of undertaking |
Registered office |
Class of |
% Held |
|||
|
Saltire Energy LLC |
P.O. Box: 53161, Abu Dhabi, U.A.E |
Ordinary |
49.00 |
|||
|
Saltire Energy Tubular Services Limited (formerly Saltire Energy Torque and Test Limited) |
100 Union Street, Aberdeen, AB10 1QR |
Ordinary |
100.00 |
|||
|
Saltire Energy Europe SRL |
SOS. BUCURESTI-PLOIESTI NR. 19-21 ET. 6, SECTORUL 1 Bucuresti, Bucuresti Romania |
Ordinary |
100.00 |
While legal ownership of Saltire Energy LLC is at 49%, Foxley Energy Limited is entitled to 80% of the economic benefits of ownership.
F-87
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
14 Stocks
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Finished goods and goods for resale |
425,177 |
339,917 |
— |
— |
||||
15 Debtors
|
Group |
Company |
|||||||
|
Amounts falling due within one year: |
2025 |
2024 |
2025 |
2024 |
||||
|
£ |
£ |
£ |
£ |
|||||
|
Trade debtors |
6,184,391 |
4,075,012 |
— |
— |
||||
|
Corporation tax recoverable |
83,362 |
75,890 |
— |
— |
||||
|
Amounts owed by group undertakings |
— |
— |
— |
1,823,821 |
||||
|
Amounts owed by related party undertakings |
1,360,709 |
842,053 |
1,360,709 |
988,414 |
||||
|
Other debtors |
74,138 |
614,828 |
100 |
100 |
||||
|
Prepayments and accrued income |
1,417,374 |
1,843,601 |
1,250 |
— |
||||
|
9,119,974 |
7,451,384 |
1,362,059 |
2,812,335 |
|||||
Amounts owed by related party undertakings are interest free and have no formal repayment date.
16 Creditors: amounts falling due within one year
|
Group |
Company |
|||||||||
|
Notes |
2025 |
2024 |
2025 |
2024 |
||||||
|
£ |
as restated |
£ |
as restated |
|||||||
|
Obligations under finance leases |
18 |
1,053,483 |
2,253,193 |
1,053,483 |
2,253,193 |
|||||
|
Trade creditors |
1,236,611 |
978,086 |
35,040 |
2,718 |
||||||
|
Amounts owed to group undertakings |
— |
— |
2,789,221 |
— |
||||||
|
Amounts owed to related party undertakings |
8,768,190 |
4,540,917 |
7,199,303 |
13,115,856 |
||||||
|
Corporation tax payable |
203,353 |
146,602 |
— |
— |
||||||
|
Other taxation and social security |
289,021 |
243,781 |
258,996 |
259,434 |
||||||
|
Other creditors |
186,430 |
166,491 |
— |
— |
||||||
|
Accruals and deferred income |
400,765 |
307,121 |
49,999 |
38,000 |
||||||
|
12,137,853 |
8,636,191 |
11,386,042 |
15,669,201 |
|||||||
Obligations under finance lease agreements are secured by floating charges over the assets held under these agreements.
Amounts owed to related party undertakings are interest free and have no formal repayment date.
F-88
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
17 Creditors: amounts falling due after more than one year
|
Group |
Company |
|||||||||
|
Notes |
2025 |
2024 |
2025 |
2024 |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Obligations under finance leases |
18 |
110,254 |
1,377,094 |
110,254 |
1,377,094 |
|||||
|
Other creditors |
434,963 |
472,484 |
— |
— |
||||||
|
545,217 |
1,849,578 |
110,254 |
1,377,094 |
|||||||
Other creditors are in respect of a director’s loan. Details of movements in the year are outlined at note 25.
Obligations under finance lease agreements are secured by floating charges over the assets held under these agreements.
18 Finance lease obligations
|
Group |
Company |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
as restated |
£ |
as restated |
|||||
|
Future minimum lease payments due under finance leases: |
||||||||
|
Within one year |
1,053,483 |
2,253,193 |
1,053,483 |
2,253,193 |
||||
|
In two to five years |
110,254 |
1,377,094 |
110,254 |
1,377,094 |
||||
|
1,163,737 |
3,630,287 |
1,163,737 |
3,630,287 |
|||||
Finance lease payments represent rentals payable by the company or group for certain items of plant and equipment. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19 Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
|
Group |
Liabilities |
Liabilities |
||||
|
£ |
as restated |
|||||
|
Accelerated capital allowances |
3,612,894 |
|
3,263,020 |
|
||
|
Tax losses |
(885,016 |
) |
(1,277,235 |
) |
||
|
2,727,878 |
|
1,985,785 |
|
|||
|
Company |
Liabilities |
Liabilities |
||||
|
£ |
as restated |
|||||
|
Accelerated capital allowances |
3,612,894 |
|
3,263,020 |
|
||
|
Tax losses |
(885,016 |
) |
(1,277,235 |
) |
||
|
2,727,878 |
|
1,985,785 |
|
|||
F-89
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
19 Deferred taxation (cont.)
|
Movements in the year: |
Group |
Company |
||
|
£ |
£ |
|||
|
Liability at 1 July 2024 |
1,985,785 |
1,985,785 |
||
|
Charge to profit or loss |
742,093 |
742,093 |
||
|
Liability at 30 June 2025 |
2,727,878 |
2,727,878 |
The group has estimated UK tax losses of £3.5m (2024 — £5.1m) available for offset against future trading profits.
20 Retirement benefit schemes
|
Defined contribution schemes |
2025 |
2024 |
||
|
£ |
£ |
|||
|
Charge to profit or loss in respect of defined contribution schemes |
2,310 |
28,747 |
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
21 Share capital
|
Group and company |
2025 |
2024 |
2025 |
2024 |
||||
|
Number |
Number |
£ |
£ |
|||||
|
Ordinary share capital |
||||||||
|
Issued and fully paid |
||||||||
|
Ordinary shares of £1 each |
100 |
100 |
100 |
100 |
22 Reserves
Profit and loss reserves
Profit and loss reserves represent the total comprehensive income for the year and prior periods less dividends paid.
23 Financial commitments, guarantees and contingent liabilities
The company is party to an unlimited cross guarantee alongside Saltire Energy Limited, Saltire Pressure Control Limited, Saltire Drilling Tools Limited and Saltire Energy LLC. The potential liability to the company at 30 June 2025 was £nil (2024 — £nil) relating to the borrowings of other entities party to the cross guarantee.
F-90
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
24 Related party transactions
Transactions with related parties
During the year the group entered into the following transactions with related parties:
|
Sales |
Purchases |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Group |
||||||||
|
Other related parties |
3,774,433 |
2,456,021 |
3,818,999 |
5,199,038 |
||||
|
Company |
||||||||
|
Entities over which the company has control, joint control or significant influence |
1,143,440 |
1,109,758 |
— |
— |
||||
|
Other related parties |
2,740,243 |
1,652,069 |
2,126 |
— |
||||
Sales to related parties include £989,874 (2024 — £Nil) in respect of tangible fixed assets sold by the company and group.
|
Rent paid |
Purchase of assets |
|||||||
|
2025 |
2024 |
2025 |
2024 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Group |
||||||||
|
Other related parties |
120,000 |
120,000 |
1,712,155 |
— |
||||
The following amounts were outstanding at the reporting end date:
|
Amounts due to related parties |
2025 |
2024 |
||
|
£ |
as restated |
|||
|
Group |
||||
|
Other related parties |
8,768,190 |
4,540,917 |
||
|
Company |
||||
|
Other related parties |
7,199,303 |
13,115,856 |
The following amounts were outstanding at the reporting end date:
|
Amounts due from related parties |
2025 |
2024 |
||
|
£ |
£ |
|||
|
Group |
||||
|
Other related parties |
1,360,709 |
842,053 |
||
|
Company |
||||
|
Entities over which the company has control, joint control or significant influence |
— |
1,823,821 |
||
|
Other related parties |
1,360,709 |
988,414 |
F-91
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
24 Related party transactions (cont.)
Other information
Sales to related parties include £989,874 (2024 — £Nil) in respect of tangible fixed assets sold by the company and group.
The company has taken advantage of disclosure exemptions available under Section 33 of FRS 102 whereby it has not disclosed transactions entered into with any wholly-owned subsidiary of the group.
25 Directors’ transactions
An interest free loan has been granted by a director to the group as follows:
|
Description |
% Rate |
Opening |
Impact of |
Closing |
|||||
|
£ |
£ |
£ |
|||||||
|
Director’s Loan |
— |
472,484 |
(37,521 |
) |
434,963 |
||||
|
472,484 |
(37,521 |
) |
434,963 |
||||||
The director’s loan is repayable a year and a day after notice being given.
26 Cash generated from group operations
|
2025 |
2024 |
|||||
|
£ |
£ |
|||||
|
Profit for the year after tax |
4,483,379 |
|
4,212,613 |
|
||
|
|
|
|||||
|
Adjustments for: |
|
|
||||
|
Taxation charged |
1,063,308 |
|
997,382 |
|
||
|
Finance costs |
214,033 |
|
195,166 |
|
||
|
Gain on disposal of tangible fixed assets |
(147,643 |
) |
— |
|
||
|
Depreciation and impairment of tangible fixed assets |
33,595 |
|
19,467 |
|
||
|
Currency translation differences |
(736,937 |
) |
51,242 |
|
||
|
|
|
|||||
|
Movements in working capital: |
|
|
||||
|
Increase in stocks |
(85,260 |
) |
(264,081 |
) |
||
|
Increase in debtors |
(1,661,118 |
) |
(892,122 |
) |
||
|
Increase in creditors |
4,644,621 |
|
1,510,489 |
|
||
|
Cash generated from operations |
7,807,978 |
|
5,830,156 |
|
||
27 Analysis of changes in net funds/(debt) — group
|
1 July |
Cash |
Exchange |
30 June |
||||||||
|
£ |
£ |
£ |
£ |
||||||||
|
Cash at bank and in hand |
256,352 |
|
1,555,759 |
(19,674 |
) |
1,792,437 |
|
||||
|
Obligations under finance leases |
(3,630,287 |
) |
2,466,550 |
— |
|
(1,163,737 |
) |
||||
|
(3,373,935 |
) |
4,022,309 |
(19,674 |
) |
628,700 |
|
|||||
F-92
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
28 Prior period adjustment
The prior period adjustments relate to;
• The duplication of assets across related party companies being amended; and
• A correction to obligations under finance leases which were previously overstated.
The impact of the adjustments on financial statement line items of both the group and parent company are outlined below.
Changes to the balance sheet — group
|
As |
Adjustment |
As |
|||||
|
£ |
£ |
£ |
|||||
|
Fixed assets |
|
||||||
|
Tangible assets |
31,167,630 |
(5,436,609 |
) |
25,731,021 |
|||
|
|
|||||||
|
Creditors |
|
||||||
|
Creditors due within one year |
13,806,996 |
(5,170,805 |
) |
8,636,191 |
|||
|
|
|||||||
|
Capital and reserves |
|
||||||
|
Profit and loss reserves |
18,490,770 |
(265,804 |
) |
18,224,966 |
|||
Changes to the profit and loss account — group
|
Period ended 30 June 2024 |
As |
Adjustment |
As |
|||
|
£ |
£ |
£ |
||||
|
Profit after taxation |
4,212,613 |
— |
4,212,613 |
Changes to the balance sheet — company
|
As |
Adjustment |
As |
|||||
|
£ |
£ |
£ |
|||||
|
Fixed assets |
|
||||||
|
Tangible assets |
27,286,661 |
(5,436,609 |
) |
21,850,052 |
|||
|
|
|||||||
|
Creditors |
|
||||||
|
Creditors due within one year |
20,840,006 |
(5,170,805 |
) |
15,669,201 |
|||
|
|
|||||||
|
Capital and reserves |
|
||||||
|
Profit and loss reserves |
5,915,776 |
(265,804 |
) |
5,649,972 |
|||
F-93
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
28 Prior period adjustment (cont.)
Changes to the profit and loss account — company
|
Period ended 30 June 2024 |
As |
Adjustment |
As |
|||
|
£ |
£ |
£ |
||||
|
Profit after taxation |
2,531,330 |
— |
2,531,330 |
29 Summary of significant differences between UK GAAP and US GAAP
The consolidated group financial statements have been prepared in accordance with generally accepted accounting practice in the United Kingdom (“UK GAAP”) defined as FRS 102 in Note 1.1, which differ in certain significant respects from accounting principles generally accepted in the United States of America (“US GAAP”). A description of the differences and their effects on the group’s profit and total comprehensive income and total equity are set out below.
Significant adjustments to consolidated profit and total comprehensive income
Effect of differences between UK GAAP and US GAAP on the group’s profit and total comprehensive income for the year ended 30 June 2025 and 2024:
|
References |
2025 |
2024 |
||||||
|
£ |
£ |
|||||||
|
Profit for the consolidated statement of comprehensive income in accordance with UK GAAP |
4,483,379 |
|
4,212,613 |
|
||||
|
US GAAP adjustments – increase/(decrease) due to: |
|
|
||||||
|
Bad debt provision |
b |
161,412 |
|
(30,840 |
) |
|||
|
Income taxes |
c |
(14,527 |
) |
2,776 |
|
|||
|
146,885 |
|
(28,064 |
) |
|||||
|
Profit in accordance with US GAAP |
4,630,264 |
|
4,184,549 |
|
||||
|
|
|
|||||||
|
Total comprehensive income in accordance with UK GAAP |
3,130,496 |
|
4,271,874 |
|
||||
|
US GAAP adjustments |
146,885 |
|
(28,064 |
) |
||||
|
Total comprehensive income in accordance with US GAAP |
3,277,381 |
|
4,243,810 |
|
||||
|
|
|
|||||||
|
Non-controlling interests – US GAAP adjustments |
d |
27,406 |
|
(5,507 |
) |
|||
|
|
|
|||||||
|
Profit for the fiscal year is attributable to: |
|
|
||||||
|
– Owners of the parent company |
4,167,155 |
|
3,892,382 |
|
||||
|
– Non-controlling interests |
463,109 |
|
292,167 |
|
||||
|
4,630,264 |
|
4,184,549 |
|
|||||
|
Total comprehensive income for the fiscal year is attributable to: |
|
|
||||||
|
– Owners of the parent company |
3,084,373 |
|
3,939,120 |
|
||||
|
– Non-controlling interests |
193,008 |
|
304,690 |
|
||||
|
3,277,381 |
|
4,243,810 |
|
|||||
F-94
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
29 Summary of significant differences between UK GAAP and US GAAP (cont.)
Significant adjustments to consolidated group balance sheet and statement of changes in equity
Effect of differences between UK GAAP and US GAAP on the group’s total equity at 30 June 2025 and 2024:
|
References |
2025 |
2024 |
||||||
|
£ |
£ |
|||||||
|
Total equity for the consolidated group balance sheet in accordance with UK GAAP |
24,437,616 |
|
21,307,120 |
|
||||
|
US GAAP adjustments: |
|
|
||||||
|
Tangible fixed assets |
a |
774,173 |
|
358,806 |
|
|||
|
Creditors: amounts falling due within one year |
a |
(220,721 |
) |
(88,909 |
) |
|||
|
Creditors: amounts falling due after more than one year |
a |
(471,202 |
) |
(203,216 |
) |
|||
|
Prepayments |
a |
(79,936 |
) |
(66,545 |
) |
|||
|
Trade debtors |
b |
(846,446 |
) |
(916,591 |
) |
|||
|
Income taxes |
c |
74,259 |
|
88,786 |
|
|||
|
(769,873 |
) |
(827,669 |
) |
|||||
|
Total equity in accordance with US GAAP |
23,667,743 |
|
20,479,451 |
|
||||
|
|
|
|||||||
|
Non-controlling interests – US GAAP adjustments |
d |
(150,168 |
) |
(177,574 |
) |
|||
|
|
|
|||||||
|
Equity attributable to owners of the parent company |
20,570,255 |
|
17,574,971 |
|
||||
|
Non-controlling interests |
3,097,488 |
|
2,904,480 |
|
||||
|
23,667,743 |
|
20,479,451 |
|
|||||
Significant adjustments to consolidated group statement of cash flows
There were no significant differences to the group statement of cash flows under US GAAP other than additional non-cash disclosures for the measurement of operating right of use assets and lease liabilities.
Description of differences between UK GAAP and US GAAP
a. Leases
Under UK GAAP, a lessee classifies a lease as either finance or operating. Rentals payable under operating leases, including any lease incentives received, are charged to the statement of comprehensive income on a straight line basis over the lease term. For operating leases, the group was not required to recognise right-of-use assets and lease liabilities on the balance sheet.
Under US GAAP, the lease liability is measured at the present value of the future lease payments, discounted using the interest rate implicit in the lease, if the rate is readily determinable, or the group’s incremental borrowing rate. The incremental borrowing rate represents the risk-adjusted rate on a secured basis, at which the group would borrow funds to satisfy the scheduled lease payments commensurate with the lease term. The right-of-use (“ROU”) asset for operating leases with a lease term greater than 12 months is recognised on the balance sheet and initially measured at the same amount as the lease liability, adjusted for any lease payments made at or before the commencement date, any lease incentives received, and any initial direct costs. The ROU asset is subsequently amortised on a straight line basis over the lease term.
F-95
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2025 |
29 Summary of significant differences between UK GAAP and US GAAP (cont.)
b. Estimated credit losses
Under UK GAAP, financial assets are assessed for indicators of impairment at each reporting end date. An impairment loss is recognised in the statement of comprehensive income when there is objective evidence that, as a result of one or more events that occurred after initial recognition of the financial asset, the estimated future cash flows have been affected.
Under US GAAP, the current expected credit loss (CECL) model is utilized to estimate credit losses on financial assets. The CECL model requires the recognition of an allowance for lifetime expected credit losses upon initial recognition, even if the risk of loss is remote. The estimate of expected credit losses considers current conditions, reasonable and supportable forecasts of future conditions, and historical loss experience.
c. Income taxes
The tax effects of the adjustments described above are calculated using the standard corporate rate applicable to the subsidiary in which the underlying adjustment arises, and are charged or credited to the consolidated profit and total comprehensive income. The estimated credit losses adjustment relates to Saltire Energy LLC, which is subject to the provisions of the U.A.E Corporate Tax Law, and tax-effected at the standard corporate rate of 9.00%, rather than the UK rate of 25.00% applicable to the parent company.
d. Non-controlling interests
Non-controlling interests is adjusted for each of the above listed adjustments.
F-96
Table of Contents
|
FOXLEY ENERGY LIMITED COMPANY INFORMATION |
|
Directors |
Mr M D Loggie |
|
|
Mr J W Loggie |
||
|
Mr M D J Loggie Jnr |
||
|
Secretary |
Peterkins Solicitors |
|
|
Company number |
SC539080 |
|
|
Registered office |
100 Union Street |
|
|
Aberdeen |
||
|
AB10 1QR |
||
|
Auditor |
AAB Audit & Accountancy Limited |
|
|
Kingshill View |
||
|
Prime Four Business Park |
||
|
Kingswells |
||
|
Aberdeen |
||
|
AB15 8PU |
F-97
Table of Contents
|
FOXLEY ENERGY LIMITED DIRECTORS’ RESPONSIBILITIES STATEMENT FOR THE YEAR ENDED 30 JUNE 2026 |
The directors are responsible for preparing the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with applicable law. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
F-98
Table of Contents
|
FOXLEY ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FOXLEY ENERGY LIMITED |
Opinion
We have audited the financial statements of Foxley Energy Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2026 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Foxley Energy Limited as at 30 June 2026 and the results in the statement of comprehensive income for the years ended 30 June 2026 in accordance with accounting principles generally accepted, being the financial reporting framework referred to above.
Basis for opinion
We conducted our audit in accordance the national auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
As discussed in Note 29 to the financial statements, the Company prepares its financial statements in accordance with United Kingdom Accounting Standards, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice), which differs from accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
F-99
Table of Contents
|
FOXLEY ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT (CONTINUED) TO THE MEMBERS OF FOXLEY ENERGY LIMITED |
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Extent to which the audit is considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company and the sector in which they operate, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
• Companies Act 2006;
• UK Tax legislation;
F-100
Table of Contents
|
FOXLEY ENERGY LIMITED INDEPENDENT AUDITOR’S REPORT (CONTINUED) TO THE MEMBERS OF FOXLEY ENERGY LIMITED |
• Health and safety regulation; and
• UK Generally Accepted Accounting Practice.
We identified the greatest risk of material impact on the financial statements from irregularities including fraud to be:
• Management override of controls to manipulate the group and parent company’s key performance indicators to meet targets;
• Timing and completeness of revenue recognition;
• Management judgement applied in calculating provisions; and
• Compliance with relevant laws and regulations which directly impact the financial statements and those that the group and parent company needs to comply with for the purpose of trading.
Our audit procedures to respond to those risks included:
• Testing of journal entries and other adjustments for appropriateness;
• Testing a sample of sales transactions and reviewing revenue recognition around the year end;
• Evaluating the business rationale of significant transactions outside the normal course of business;
• Reviewing judgements made by management in their calculation of accounting estimates for potential management bias;
• Enquiries of management about litigation and claims and inspection of relevant correspondence; and
• Reviewing legal and professional fees to identify indications of actual or potential litigation, claims and any non-compliance with laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involved intentional concealment, forgery, collusion, omission or misrepresentation.
Use of our report
This report is made solely to the company’s members, as a body. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
|
AAB Audit & Accountancy Limited |
Date: ____________ |
|
|
Registered Auditor |
Kingshill View |
|
|
Prime Four Business Park |
||
|
Kingswells |
||
|
Aberdeen |
||
|
AB15 8PU |
F-101
Table of Contents
|
FOXLEY ENERGY LIMITED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2026 |
|
Notes |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Turnover |
3 |
12,594,343 |
|
14,500,030 |
|
|||
|
Cost of sales |
(5,825,677 |
) |
(7,550,743 |
) |
||||
|
Gross profit |
6,768,666 |
|
6,949,287 |
|
||||
|
Administrative expenses |
(3,164,011 |
) |
(1,225,616 |
) |
||||
|
Other operating income |
20,723 |
|
37,049 |
|
||||
|
Operating profit |
4 |
3,625,378 |
|
5,760,720 |
|
|||
|
Interest receivable and similar income |
8 |
186 |
|
— |
|
|||
|
Interest payable and similar expenses |
9 |
(199,475 |
) |
(214,033 |
) |
|||
|
Profit before taxation |
3,426,089 |
|
5,546,687 |
|
||||
|
Tax on profit |
10 |
(964,836 |
) |
(1,063,308 |
) |
|||
|
Profit for the financial year |
22 |
2,461,253 |
|
4,483,379 |
|
|||
|
|
|
|||||||
|
Other comprehensive income/(expenditure) |
|
|
||||||
|
Currency translation differences |
597,768 |
|
(1,352,883 |
) |
||||
|
Total comprehensive income for the year |
3,059,021 |
|
3,130,496 |
|
||||
|
|
|
|||||||
|
Profit for the financial year is attributable to: |
|
|
||||||
|
– Owners of the parent company |
2,049,463 |
|
4,047,676 |
|
||||
|
– Non-controlling interests |
411,790 |
|
435,703 |
|
||||
|
2,461,253 |
|
4,483,379 |
|
|||||
|
|
|
|||||||
|
Total comprehensive income for the year is attributable to: |
|
|
||||||
|
– Owners of the parent company |
2,526,771 |
|
2,964,894 |
|
||||
|
– Non-controlling interests |
532,250 |
|
165,602 |
|
||||
|
3,059,021 |
|
3,130,496 |
|
|||||
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
F-102
Table of Contents
|
FOXLEY ENERGY LIMITED GROUP BALANCE SHEET AS AT 30 JUNE 2026 |
|
Notes |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Fixed assets |
|
|
||||||
|
Tangible assets |
11 |
36,973,273 |
|
28,510,976 |
|
|||
|
|
|
|||||||
|
Current assets |
|
|
||||||
|
Stocks |
14 |
617,659 |
|
425,177 |
|
|||
|
Debtors |
15 |
6,069,829 |
|
9,119,974 |
|
|||
|
Cash at bank and in hand |
616,400 |
|
1,792,437 |
|
||||
|
7,303,888 |
|
11,337,588 |
|
|||||
|
Creditors: amounts falling due within one year |
16 |
(13,357,588 |
) |
(12,137,853 |
) |
|||
|
Net current liabilities |
(6,053,700 |
) |
(800,265 |
) |
||||
|
Total assets less current liabilities |
30,919,573 |
|
27,710,711 |
|
||||
|
Creditors: amounts falling due after more than one year |
17 |
(227,965 |
) |
(545,217 |
) |
|||
|
|
|
|||||||
|
Provisions for liabilities |
|
|
||||||
|
Deferred tax liability |
19 |
3,194,971 |
|
2,727,878 |
|
|||
|
(3,194,971 |
) |
(2,727,878 |
) |
|||||
|
Net assets |
27,496,637 |
|
24,437,616 |
|
||||
|
|
|
|||||||
|
Capital and reserves |
|
|
||||||
|
Called up share capital |
21 |
100 |
|
100 |
|
|||
|
Profit and loss reserves |
22 |
23,716,631 |
|
21,189,860 |
|
|||
|
Equity attributable to owners of the parent company |
23,716,731 |
|
21,189,960 |
|
||||
|
Non-controlling interests |
3,779,906 |
|
3,247,656 |
|
||||
|
27,496,637 |
|
24,437,616 |
|
|||||
The financial statements were approved by the board of directors and authorised for issue on ____________ and are signed on its behalf by:
|
|
||
|
|
||
|
Mr J W Loggie |
||
|
Director |
||
F-103
Table of Contents
|
FOXLEY ENERGY LIMITED COMPANY BALANCE SHEET AS AT 30 JUNE 2026 |
|
Notes |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Fixed assets |
|
|
||||||
|
Tangible assets |
11 |
20,133,639 |
|
20,827,059 |
|
|||
|
Investments |
12 |
16,271 |
|
16,271 |
|
|||
|
20,149,910 |
|
20,843,330 |
|
|||||
|
Current assets |
|
|
||||||
|
Debtors |
15 |
955,341 |
|
1,362,059 |
|
|||
|
Cash at bank and in hand |
631 |
|
3,629 |
|
||||
|
955,972 |
|
1,365,688 |
|
|||||
|
Creditors: amounts falling due within one year |
16 |
(8,602,602 |
) |
(11,386,042 |
) |
|||
|
Net current liabilities |
(7,646,630 |
) |
(10,020,354 |
) |
||||
|
Total assets less current liabilities |
12,503,280 |
|
10,822,976 |
|
||||
|
Creditors: amounts falling due after more than one year |
17 |
(8,923 |
) |
(110,254 |
) |
|||
|
|
|
|||||||
|
Provisions for liabilities |
|
|
||||||
|
Deferred tax liability |
19 |
3,194,971 |
|
2,727,878 |
|
|||
|
(3,194,971 |
) |
(2,727,878 |
) |
|||||
|
Net assets |
9,299,386 |
|
7,984,844 |
|
||||
|
|
|
|||||||
|
Capital and reserves |
|
|
||||||
|
Called up share capital |
21 |
100 |
|
100 |
|
|||
|
Profit and loss reserves |
22 |
9,299,286 |
|
7,984,744 |
|
|||
|
Total equity |
9,299,386 |
|
7,984,844 |
|
||||
The company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,314,542 (2025 — £2,334,772 profit).
The financial statements were approved by the board of directors and authorised for issue on ____________ and are signed on its behalf by:
|
|
|
|||
|
|
|
|||
|
Mr J W Loggie |
||||
|
Director |
||||
Company Registration No. SC539080
F-104
Table of Contents
|
FOXLEY ENERGY LIMITED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2026 |
|
Notes |
Share |
Profit |
Total |
Non- |
Total |
|||||||||||
|
£ |
£ |
£ |
£ |
£ |
||||||||||||
|
Balance at 1 July 2024 |
100 |
18,224,966 |
|
18,225,066 |
|
3,082,054 |
|
21,307,120 |
|
|||||||
|
|
|
|
|
|||||||||||||
|
Year ended 30 June 2025: |
|
|
|
|
||||||||||||
|
Profit for the year |
— |
4,047,676 |
|
4,047,676 |
|
435,703 |
|
4,483,379 |
|
|||||||
|
Other comprehensive expenditure: |
|
|
|
|
||||||||||||
|
Currency translation differences |
— |
(1,352,883 |
) |
(1,352,883 |
) |
— |
|
(1,352,883 |
) |
|||||||
|
Amounts attributable to non-controlling interests |
— |
270,101 |
|
270,101 |
|
(270,101 |
) |
— |
|
|||||||
|
Total comprehensive income for the year |
— |
2,964,894 |
|
2,964,894 |
|
165,602 |
|
3,130,496 |
|
|||||||
|
Balance at 30 June 2025 |
100 |
21,189,860 |
|
21,189,960 |
|
3,247,656 |
|
24,437,616 |
|
|||||||
|
|
|
|
|
|||||||||||||
|
Year ended 30 June 2026: |
|
|
|
|
||||||||||||
|
Profit for the year |
— |
2,049,463 |
|
2,049,463 |
|
411,790 |
|
2,461,253 |
|
|||||||
|
Other comprehensive income: |
|
|
|
|
||||||||||||
|
Currency translation differences |
— |
597,768 |
|
597,768 |
|
— |
|
597,768 |
|
|||||||
|
Amounts attributable to non-controlling interests |
— |
(120,460 |
) |
(120,460 |
) |
120,460 |
|
— |
|
|||||||
|
Total comprehensive income for the year |
— |
2,526,771 |
|
2,526,771 |
|
532,250 |
|
3,059,021 |
|
|||||||
|
Balance at 30 June 2026 |
100 |
23,716,631 |
|
23,716,731 |
|
3,779,906 |
|
27,496,637 |
|
|||||||
F-105
Table of Contents
|
FOXLEY ENERGY LIMITED COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2026 |
|
Notes |
Share |
Profit |
Total |
|||||
|
£ |
£ |
£ |
||||||
|
Balance at 1 July 2024 |
100 |
5,649,972 |
5,650,072 |
|||||
|
Year ended 30 June 2025: |
||||||||
|
Profit and total comprehensive income for the year |
— |
2,334,772 |
2,334,772 |
|||||
|
Balance at 30 June 2025 |
100 |
7,984,744 |
7,984,844 |
|||||
|
Year ended 30 June 2026: |
||||||||
|
Profit and total comprehensive income for the year |
— |
1,314,542 |
1,314,542 |
|||||
|
Balance at 30 June 2026 |
100 |
9,299,286 |
9,299,386 |
F-106
Table of Contents
|
FOXLEY ENERGY LIMITED GROUP STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2026 |
|
Notes |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Cash flows from operating activities |
|
|
||||||
|
Cash generated from operations |
27 |
7,880,556 |
|
7,807,978 |
|
|||
|
Interest paid |
(199,475 |
) |
(214,033 |
) |
||||
|
Income taxes paid |
(436,045 |
) |
(271,936 |
) |
||||
|
Net cash inflow from operating activities |
7,245,036 |
|
7,322,009 |
|
||||
|
|
|
|||||||
|
Investing activities |
|
|
||||||
|
Purchase of tangible fixed assets |
(8,398,223 |
) |
(4,567,413 |
) |
||||
|
Proceeds on disposal of tangible fixed assets |
992,460 |
|
1,267,713 |
|
||||
|
Interest received |
186 |
|
— |
|
||||
|
Net cash used in investing activities |
(7,405,577 |
) |
(3,299,700 |
) |
||||
|
|
|
|||||||
|
Financing activities |
|
|
||||||
|
Payment of finance leases obligations |
(1,078,647 |
) |
(2,466,550 |
) |
||||
|
Net cash used in financing activities |
(1,078,647 |
) |
(2,466,550 |
) |
||||
|
Net (decrease)/increase in cash and cash equivalents |
(1,239,188 |
) |
1,555,759 |
|
||||
|
Cash and cash equivalents at beginning of year |
1,792,437 |
|
256,352 |
|
||||
|
Effect of foreign exchange rates |
63,151 |
|
(19,674 |
) |
||||
|
Cash and cash equivalents at end of year |
616,400 |
|
1,792,437 |
|
||||
F-107
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
1 Accounting policies
Company information
Foxley Energy Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 100 Union Street, Aberdeen, Scotland, AB10 1QR.
The group consists of Foxley Energy Limited and all of its subsidiaries.
1.1 Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements (where applicable):
• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2 Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Foxley Energy Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 June 2026. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
F-108
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
1 Accounting policies (cont.)
1.3 Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4 Turnover
Turnover represents net income receivable from the sale and rental of drilling equipment.
Turnover from the sale of drilling equipment is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Turnover in respect of the rental of drilling equipment is recognised on a straight line basis over the rental period.
1.5 Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
|
Rental plant and equipment |
see below |
|||
|
Non-rental plant and equipment |
10% straight line |
|||
|
Fixtures and fittings |
25% straight line |
|||
|
Motor vehicles |
25% straight line |
The group depreciates its rental plant and equipment following an assessment of the depreciable amount of the underlying assets. Where the depreciable amount is above zero, the group depreciates this element on a 25% straight line basis. Rental plant and equipment includes drilling equipment that the group rents to its customers. These assets are continually refurbished to a very high standard on return from hire and this is reflected in the high residual values and in the absence of a depreciation charge on certain equipment. The directors believe this approach fairly reflects the consumption of economic benefits in relation to certain rental assets. Refurbishment costs are charged to the statement of comprehensive income.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of comprehensive income.
1.6 Fixed asset investments
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
F-109
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
1 Accounting policies (cont.)
1.7 Impairment of fixed assets
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of comprehensive income.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the statement of comprehensive income.
1.8 Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the statement of comprehensive income. Reversals of impairment losses are also recognised in the statement of comprehensive income.
1.9 Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.10 Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group’s balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
F-110
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
1 Accounting policies (cont.)
Basic financial assets
Basic financial assets, which include certain debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the statement of comprehensive income.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the statement of comprehensive income.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including certain creditors and loans from related party undertakings, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
F-111
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
1 Accounting policies (cont.)
Derecognition of financial liabilities
Financial liabilities are derecognised when the group’s contractual obligations expire or are discharged or cancelled.
1.11 Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
1.12 Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
F-112
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
1 Accounting policies (cont.)
1.14 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the asset’s fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to the statement of comprehensive income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.16 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in the statement of comprehensive income.
The financial statements of overseas subsidiary undertakings are translated at the rate of exchange ruling at the balance sheet date. The exchange difference arising on the retranslation of opening net assets is taken to reserves through other comprehensive income. The income and expenditure of foreign operations are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions. Exchange differences arising from this translation of foreign operations are taken to reserves through other comprehensive income.
2 Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
F-113
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
2 Judgements and key sources of estimation uncertainty (cont.)
Carrying value of rental plant & equipment
Rental plant and equipment includes drilling equipment that the group rents to its customers. These assets are continually refurbished to a very high standard on return from hire and this amongst other factors is reflected in their high residual values and low depreciation. The assessment of residual value requires the directors to exercise judgement including an annual reassessment based on current market conditions.
The carrying value of plant and equipment, which includes the group’s rental plant and equipment, is outlined in the fixed asset note at note 11.
Amounts due from related parties
Amounts owed from related parties are stated in the accounts at their transaction price less any appropriate provision for irrecoverable amounts. In determining if a provision is required, the directors exercise judgement, considering any specific indicators that the recoverability of the balance may be in doubt.
Details of amounts owed to the group from related parties is outlined at note 15.
3 Turnover and other revenue
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Turnover analysed by class of business |
||||
|
Sale and hire rental of drilling equipment |
12,594,343 |
14,500,030 |
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Turnover analysed by geographical market |
||||
|
UK |
1,558,351 |
1,988,775 |
||
|
Middle East |
10,152,847 |
12,043,738 |
||
|
Far East |
883,145 |
366,168 |
||
|
Europe |
— |
101,349 |
||
|
12,594,343 |
14,500,030 |
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Other significant revenue |
||||
|
Interest income |
186 |
— |
||
|
Sundry income |
20,723 |
37,049 |
4 Operating profit
|
2026 |
2025 |
|||||
|
£ |
£ |
|||||
|
Operating profit for the year is stated after charging/(crediting): |
|
|
||||
|
Exchange differences |
149,695 |
|
(603,661 |
) |
||
|
Depreciation of owned tangible fixed assets |
41,560 |
|
33,595 |
|
||
|
Profit on disposal of tangible fixed assets |
(115,121 |
) |
(147,643 |
) |
||
F-114
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
5 Auditor’s remuneration
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Fees payable to the company’s auditor and associates: |
||||
|
For audit services |
||||
|
Audit of the financial statements of the group and company |
35,500 |
30,576 |
6 Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
Number |
Number |
Number |
Number |
|||||
|
Production staff |
40 |
30 |
— |
— |
||||
|
Management |
3 |
3 |
3 |
3 |
||||
|
Total |
43 |
33 |
3 |
3 |
||||
Their aggregate remuneration comprised:
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Wages and salaries |
1,327,410 |
1,306,704 |
— |
— |
||||
|
Social security costs |
36,210 |
— |
— |
— |
||||
|
Pension costs |
13,187 |
2,310 |
— |
— |
||||
|
1,376,807 |
1,309,014 |
— |
— |
|||||
7 Directors’ remuneration
No company director received remuneration from the group during the current or prior reporting period.
8 Interest receivable and similar income
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Interest income |
||||
|
Other interest income |
186 |
— |
9 Interest payable and similar expenses
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Interest on finance leases and hire purchase contracts |
199,475 |
214,033 |
F-115
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
10 Taxation
|
2026 |
2025 |
|||
|
£ |
£ |
|||
|
Current tax |
||||
|
Foreign current tax on profits for the current period |
446,984 |
321,215 |
||
|
Adjustments in foreign tax in respect of prior periods |
50,759 |
— |
||
|
Total current tax |
497,743 |
321,215 |
||
|
Deferred tax |
||||
|
Origination and reversal of timing differences |
445,763 |
742,093 |
||
|
Adjustment in respect of prior periods |
21,330 |
— |
||
|
Total deferred tax |
467,093 |
742,093 |
||
|
Total tax charge |
964,836 |
1,063,308 |
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
|
2026 |
2025 |
|||||
|
£ |
£ |
|||||
|
Profit before taxation |
3,426,089 |
|
5,546,687 |
|
||
|
|
|
|||||
|
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2025: 25.00%) |
856,522 |
|
1,386,672 |
|
||
|
Tax effect of expenses that are not deductible in determining taxable profit |
405 |
|
136 |
|
||
|
Change in unrecognised deferred tax assets |
207,774 |
|
9,006 |
|
||
|
Adjustments in respect of prior years |
50,759 |
|
— |
|
||
|
Effect of overseas tax rates |
(172,547 |
) |
(302,102 |
) |
||
|
Deferred tax adjustments in respect of prior years |
21,330 |
|
— |
|
||
|
Other tax adjustments, reliefs and transfers |
593 |
|
(30,404 |
) |
||
|
Taxation charge |
964,836 |
|
1,063,308 |
|
||
11 Tangible fixed assets
|
Group |
Plant and |
Fixtures and |
Motor |
Total |
|||||||
|
£ |
£ |
£ |
£ |
||||||||
|
Cost |
|
|
|
||||||||
|
At 1 July 2025 |
28,636,908 |
|
24,177 |
|
18,255 |
28,679,340 |
|
||||
|
Additions |
8,726,898 |
|
39,175 |
|
181,246 |
8,947,319 |
|
||||
|
Disposals |
(877,339 |
) |
— |
|
— |
(877,339 |
) |
||||
|
Exchange adjustments |
438,509 |
|
(5,227 |
) |
651 |
433,933 |
|
||||
|
At 30 June 2026 |
36,924,976 |
|
58,125 |
|
200,152 |
37,183,253 |
|
||||
|
|
|
|
|||||||||
|
Depreciation and impairment |
|
|
|
||||||||
|
At 1 July 2025 |
133,319 |
|
16,790 |
|
18,255 |
168,364 |
|
||||
|
Depreciation charged in the year |
32,822 |
|
7,228 |
|
1,510 |
41,560 |
|
||||
|
Exchange adjustments |
4,924 |
|
(5,518 |
) |
650 |
56 |
|
||||
|
At 30 June 2026 |
171,065 |
|
18,500 |
|
20,415 |
209,980 |
|
||||
|
|
|
|
|||||||||
|
Carrying amount |
|
|
|
||||||||
|
At 30 June 2026 |
36,753,911 |
|
39,625 |
|
179,737 |
36,973,273 |
|
||||
|
At 30 June 2025 |
28,503,589 |
|
7,387 |
|
— |
28,510,976 |
|
||||
F-116
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
11 Tangible fixed assets (cont.)
|
Company |
Plant and |
||
|
£ |
|||
|
Cost |
|
||
|
At 1 July 2025 |
20,827,059 |
|
|
|
Additions |
42,839 |
|
|
|
Disposals |
(734,117 |
) |
|
|
At 30 June 2026 |
20,135,781 |
|
|
|
|
|||
|
Depreciation and impairment |
|
||
|
At 1 July 2025 |
— |
|
|
|
Depreciation charged in the year |
2,142 |
|
|
|
At 30 June 2026 |
2,142 |
|
|
|
|
|||
|
Carrying amount |
|
||
|
At 30 June 2026 |
20,133,639 |
|
|
|
At 30 June 2025 |
20,827,059 |
|
|
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Plant and equipment |
2,510,401 |
5,548,652 |
2,148,682 |
5,548,652 |
||||
|
Motor vehicles |
179,737 |
— |
— |
— |
||||
|
2,690,138 |
5,548,652 |
2,148,682 |
5,548,652 |
|||||
12 Fixed asset investments
|
Group |
Company |
|||||||||
|
Notes |
2026 |
2025 |
2026 |
2025 |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Investments in subsidiaries |
13 |
— |
— |
16,271 |
16,271 |
|||||
|
Movements in fixed asset investments |
Shares in |
|
|
£ |
||
|
Cost |
||
|
At 1 July 2025 and 30 June 2026 |
16,271 |
|
|
Carrying amount |
||
|
At 30 June 2026 |
16,271 |
|
|
At 30 June 2025 |
16,271 |
F-117
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
13 Subsidiaries
Details of the company’s subsidiaries at 30 June 2026 are as follows:
|
Name of undertaking |
Registered office |
Class of |
% Held |
|||||
|
Direct |
Indirect |
|||||||
|
Saltire Energy LLC |
P.O. Box: 53161, Abu Dhabi, U.A.E |
Ordinary |
49.00 |
— |
||||
|
Saltire Energy Tubular Services Limited |
100 Union Street, Aberdeen, AB10 1QR |
Ordinary |
100.00 |
— |
||||
|
Saltire Energy Europe SRL |
SOS. BUCURESTI-PLOIESTI NR. 19-21 ET. 6, SECTORUL 1 Bucuresti, Bucuresti Romania |
Ordinary |
100.00 |
— |
||||
|
Saltire Energy Company |
3141 Anas Ibn Malik Rd, Al Malqa, Riyadh 13521, Saudi Arabia |
Ordinary |
— |
49.00 |
||||
While legal ownership of Saltire Energy LLC and its subsidiary Saltire Energy Company is at 49%, Foxley Energy Limited is entitled to 80% of the economic benefits of ownership and has the power to govern the financial and operating policies of the entity so as to obtain these economic benefits.
14 Stocks
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Finished goods and goods for resale |
617,659 |
425,177 |
— |
— |
||||
15 Debtors
|
Group |
Company |
|||||||
|
Amounts falling due within one year: |
2026 |
2025 |
2026 |
2025 |
||||
|
£ |
£ |
£ |
£ |
|||||
|
Trade debtors |
3,666,445 |
6,184,391 |
— |
— |
||||
|
Corporation tax recoverable |
— |
83,362 |
— |
— |
||||
|
Amounts owed by group undertakings |
— |
— |
291,045 |
— |
||||
|
Amounts owed by related party undertakings |
1,012,046 |
1,360,709 |
662,946 |
1,360,709 |
||||
|
Other debtors |
322,330 |
74,138 |
100 |
100 |
||||
|
Prepayments and accrued income |
1,069,008 |
1,417,374 |
1,250 |
1,250 |
||||
|
6,069,829 |
9,119,974 |
955,341 |
1,362,059 |
|||||
Amounts owed by group and related party undertakings are interest free and have no formal repayment date.
F-118
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
16 Creditors: amounts falling due within one year
|
Group |
Company |
|||||||||
|
Notes |
2026 |
2025 |
2026 |
2025 |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Obligations under finance leases |
18 |
406,221 |
1,053,483 |
131,673 |
1,053,483 |
|||||
|
Trade creditors |
1,203,154 |
1,236,611 |
428 |
35,040 |
||||||
|
Amounts owed to group undertakings |
— |
— |
— |
2,789,221 |
||||||
|
Amounts owed to related party undertakings |
10,389,758 |
8,768,190 |
8,355,525 |
7,199,303 |
||||||
|
Corporation tax payable |
181,689 |
203,353 |
— |
— |
||||||
|
Other taxation and social security |
35,506 |
289,021 |
65,890 |
258,996 |
||||||
|
Other creditors |
7,624 |
186,430 |
— |
— |
||||||
|
Accruals and deferred income |
1,133,636 |
400,765 |
49,086 |
49,999 |
||||||
|
13,357,588 |
12,137,853 |
8,602,602 |
11,386,042 |
|||||||
Obligations under finance lease agreements are secured by floating charges over the assets held under these agreements.
Amounts owed to group and related party undertakings are interest free and have no formal repayment date.
17 Creditors: amounts falling due after more than one year
|
Group |
Company |
|||||||||
|
Notes |
2026 |
2025 |
2026 |
2025 |
||||||
|
£ |
£ |
£ |
£ |
|||||||
|
Obligations under finance leases |
18 |
227,965 |
110,254 |
8,923 |
110,254 |
|||||
|
Other creditors |
— |
434,963 |
— |
— |
||||||
|
227,965 |
545,217 |
8,923 |
110,254 |
|||||||
Other creditors in the comparative reporting period related to a director’s loan. Details of movements in the year are outlined at note 26.
Obligations under finance lease agreements are secured by floating charges over the assets held under these agreements.
18 Finance lease obligations
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Future minimum lease payments due under finance leases: |
||||||||
|
Within one year |
406,221 |
1,053,483 |
131,673 |
1,053,483 |
||||
|
In two to five years |
227,965 |
110,254 |
8,923 |
110,254 |
||||
|
634,186 |
1,163,737 |
140,596 |
1,163,737 |
|||||
Finance lease payments represent rentals payable by the company or group for certain items of plant and equipment and motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
F-119
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
19 Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
|
Group |
Liabilities |
Liabilities |
||||
|
£ |
£ |
|||||
|
Accelerated capital allowances |
4,326,338 |
|
3,612,894 |
|
||
|
Tax losses |
(1,131,045 |
) |
(885,016 |
) |
||
|
Other timing differences |
(322 |
) |
— |
|
||
|
3,194,971 |
|
2,727,878 |
|
|||
|
Company |
Liabilities |
Liabilities |
||||
|
£ |
£ |
|||||
|
Accelerated capital allowances |
4,160,479 |
|
3,612,894 |
|
||
|
Tax losses |
(965,508 |
) |
(885,016 |
) |
||
|
3,194,971 |
|
2,727,878 |
|
|||
|
Movements in the year: |
Group |
Company |
||
|
£ |
£ |
|||
|
Liability at 1 July 2025 |
2,727,878 |
2,727,878 |
||
|
Charge to profit or loss |
467,093 |
467,093 |
||
|
Liability at 30 June 2026 |
3,194,971 |
3,194,971 |
The group has estimated UK tax losses of £5.4m (2025 — £3.5m) available for offset against future trading profits.
20 Retirement benefit schemes
|
Defined contribution schemes |
2026 |
2025 |
||
|
£ |
£ |
|||
|
Charge to profit or loss in respect of defined contribution schemes |
13,187 |
2,310 |
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
21 Share capital
|
Group and company |
2026 |
2025 |
2026 |
2025 |
||||
|
Number |
Number |
£ |
£ |
|||||
|
Ordinary share capital |
||||||||
|
Issued and fully paid |
||||||||
|
Ordinary shares of £1 each |
100 |
100 |
100 |
100 |
F-120
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
22 Reserves
Profit and loss reserves
Profit and loss reserves represent the total comprehensive income for the year and prior periods less dividends paid.
23 Financial commitments, guarantees and contingent liabilities
The company is party to an unlimited cross guarantee alongside Saltire Energy Limited, Saltire Pressure Control Limited, Saltire Drilling Tools Limited and Saltire Energy LLC. The potential liability to the company at 30 June 2026 was £nil (2025 — £nil) relating to the borrowings of other entities party to the cross guarantee.
24 Capital commitments
Amounts contracted for but not provided in the financial statements:
|
Group |
Company |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Acquisition of tangible fixed assets |
129,643 |
— |
— |
— |
||||
25 Related party transactions
Transactions with related parties
During the year the group entered into the following transactions with related parties:
|
Sales and recharges |
Purchases and recharges |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Group |
||||||||
|
Other related parties |
2,528,111 |
3,774,433 |
1,188,825 |
3,818,999 |
||||
|
Company |
||||||||
|
Entities over which the company has control, joint control or significant influence |
1,007,567 |
1,143,440 |
— |
— |
||||
|
Other related parties |
1,789,268 |
2,740,243 |
42,839 |
2,126 |
||||
Sales and recharges to other related parties include £113,970 (2025 — £989,874) in respect of tangible fixed assets sold by the company and group.
F-121
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
25 Related party transactions (cont.)
Sales and recharges to entities over which the company has control, joint control or significant influence include £479,388 (2025 — £Nil) in respect of tangible fixed assets sold by the company to subsidiary undertakings not wholly owned.
|
Rent paid |
Purchase of assets |
|||||||
|
2026 |
2025 |
2026 |
2025 |
|||||
|
£ |
£ |
£ |
£ |
|||||
|
Group |
||||||||
|
Other related parties |
282,333 |
120,000 |
6,469,452 |
1,712,155 |
||||
The following amounts were outstanding at the reporting end date:
|
Amounts due to related parties |
2026 |
2025 |
||
|
£ |
£ |
|||
|
Group |
||||
|
Other related parties |
10,389,758 |
8,768,190 |
||
|
Company |
||||
|
Other related parties |
8,355,525 |
7,199,303 |
The following amounts were outstanding at the reporting end date:
|
Amounts due from related parties |
2026 |
2025 |
||
|
£ |
£ |
|||
|
Group |
||||
|
Other related parties |
1,012,046 |
1,360,709 |
||
|
Company |
||||
|
Other related parties |
662,946 |
1,360,709 |
Other information
The company has taken advantage of disclosure exemptions available under Section 33 of FRS 102 whereby it has not disclosed transactions entered into with any wholly-owned subsidiary of the group.
26 Directors’ transactions
An interest free loan has been granted by a director to the group as follows:
|
Description |
% Rate |
Opening |
Amounts |
Closing |
|||||
|
£ |
£ |
£ |
|||||||
|
Director’s Loan |
— |
434,963 |
(434,963 |
) |
— |
||||
|
434,963 |
(434,963 |
) |
— |
||||||
F-122
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
27 Cash generated from group operations
|
2026 |
2025 |
|||||
|
£ |
£ |
|||||
|
Profit for the year after tax |
2,461,253 |
|
4,483,379 |
|
||
|
|
|
|||||
|
Adjustments for: |
|
|
||||
|
Taxation charged |
964,836 |
|
1,063,308 |
|
||
|
Finance costs |
199,475 |
|
214,033 |
|
||
|
Investment income |
(186 |
) |
— |
|
||
|
Gain on disposal of tangible fixed assets |
(115,121 |
) |
(147,643 |
) |
||
|
Depreciation and impairment of tangible fixed assets |
41,560 |
|
33,595 |
|
||
|
Currency translation differences |
100,740 |
|
(736,937 |
) |
||
|
|
|
|||||
|
Movements in working capital: |
|
|
||||
|
Increase in stocks |
(192,482 |
) |
(85,260 |
) |
||
|
Decrease/(increase) in debtors |
2,966,783 |
|
(1,661,118 |
) |
||
|
Increase in creditors |
1,453,698 |
|
4,644,621 |
|
||
|
Cash generated from operations |
7,880,556 |
|
7,807,978 |
|
||
28 Analysis of changes in net funds/(debt) — group
|
1 July |
Cash flows |
New finance |
Exchange |
30 June |
||||||||||
|
£ |
£ |
£ |
£ |
£ |
||||||||||
|
Cash at bank and in hand |
1,792,437 |
|
(1,239,188 |
) |
— |
|
63,151 |
616,400 |
|
|||||
|
Obligations under finance leases |
(1,163,737 |
) |
1,078,647 |
|
(549,096 |
) |
— |
(634,186 |
) |
|||||
|
628,700 |
|
(160,541 |
) |
(549,096 |
) |
63,151 |
(17,786 |
) |
||||||
29 Summary of significant differences between UK GAAP and US GAAP
The consolidated group financial statements have been prepared in accordance with generally accepted accounting practice in the United Kingdom (“UK GAAP”) defined as FRS 102 in Note 1.1, which differ in certain significant respects from accounting principles generally accepted in the United States of America (“US GAAP”). A description of the differences and their effects on the group’s profit and total comprehensive income and total equity are set out below.
F-123
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
29 Summary of significant differences between UK GAAP and US GAAP (cont.)
Significant adjustments to consolidated profit and total comprehensive income
Effect of differences between UK GAAP and US GAAP on the group’s profit and total comprehensive income for the year ended 30 June 2026 and 2025:
|
References |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Profit for the consolidated statement of comprehensive income in accordance with UK GAAP |
2,461,253 |
|
4,483,379 |
|
||||
|
US GAAP adjustments – increase/(decrease) due to: |
|
|
||||||
|
Bad debt provision |
b |
786,092 |
|
161,412 |
|
|||
|
Income taxes |
c |
(70,748 |
) |
(14,527 |
) |
|||
|
715,344 |
|
146,885 |
|
|||||
|
|
|
|||||||
|
Profit in accordance with US GAAP |
3,176,597 |
|
4,630,264 |
|
||||
|
|
|
|||||||
|
Total comprehensive income in accordance with UK GAAP |
3,059,021 |
|
3,130,496 |
|
||||
|
US GAAP adjustments |
715,344 |
|
146,885 |
|
||||
|
Total comprehensive income in accordance with US GAAP |
3,774,365 |
|
3,277,381 |
|
||||
|
|
|
|||||||
|
Non-controlling interests – US GAAP adjustments |
d |
143,236 |
|
27,406 |
|
|||
|
|
|
|||||||
|
Profit for the fiscal year is attributable to: |
|
|
||||||
|
– Owners of the parent company |
2,621,571 |
|
4,167,155 |
|
||||
|
– Non-controlling interests |
555,026 |
|
463,109 |
|
||||
|
3,176,597 |
|
4,630,264 |
|
|||||
|
|
|
|||||||
|
Total comprehensive income for the fiscal year is attributable to: |
|
|
||||||
|
– Owners of the parent company |
3,098,879 |
|
3,084,373 |
|
||||
|
– Non-controlling interests |
675,486 |
|
193,008 |
|
||||
|
3,774,365 |
|
3,277,381 |
|
|||||
F-124
Table of Contents
|
FOXLEY ENERGY LIMITED NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 |
29 Summary of significant differences between UK GAAP and US GAAP (cont.)
Significant adjustments to consolidated group balance sheet and statement of changes in equity
Effect of differences between UK GAAP and US GAAP on the group’s total equity at 30 June 2026 and 2025:
|
References |
2026 |
2025 |
||||||
|
£ |
£ |
|||||||
|
Total equity for the consolidated group balance sheet in accordance with UK GAAP |
27,496,637 |
|
24,437,616 |
|
||||
|
US GAAP adjustments: |
|
|
||||||
|
Tangible fixed assets |
a |
627,453 |
|
774,173 |
|
|||
|
Creditors: amounts falling due within one year |
a |
(228,722 |
) |
(220,721 |
) |
|||
|
Creditors: amounts falling due after more than one year |
a |
(313,500 |
) |
(471,202 |
) |
|||
|
Prepayments |
a |
(85,538 |
) |
(79,636 |
) |
|||
|
Trade debtors |
b |
(56,154 |
) |
(846,446 |
) |
|||
|
Income taxes |
c |
3,511 |
|
74,259 |
|
|||
|
(52,950 |
) |
(769,873 |
) |
|||||
|
Total equity in accordance with US GAAP |
27,433,687 |
|
23,667,743 |
|
||||