National Energy Services Reunited Corp. (NESR) FY 2017 MD&A

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The
following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction
with the financial statements and the notes thereto contained elsewhere in this report.

References
to the “Company,” “us” or “we” refer to National Energy Services Reunited Corp.

Special
Note Regarding Forward-Looking Statements

All
statements other than statements of historical fact included in this Form 10-K including, without limitation, statements under
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s
financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.
When used in this Form 10-K, words such as “anticipate,” “believe,” “estimate,” “expect,”
“intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking
statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information
currently available to, the Company’s management. Actual results could differ materially from those contemplated by the
forward-looking statements as a result of certain factors detailed in our filings with the SEC.

The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with the
consolidated financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the
discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Overview

We
are a blank check company incorporated on January 23, 2017 in the British Virgin Islands and formed for the purpose of entering
into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination
with one or more target businesses. We intend to effectuate our initial business combination using cash from the proceeds of our
IPO and the sale of the private warrants that occurred simultaneously with the completion of our IPO, our capital stock, debt
or a combination of cash, stock and debt.

The
issuance of additional ordinary shares or preferred stock:

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Similarly,
if we issue debt securities, it could result in:

We
expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to
raise capital or to complete a business combination will be successful.

Recent
Events

On
November 12, 2017, we announced that we had entered into definitive agreements to acquire GES and NPS, leading regional oilfield
services companies offering a mix of drilling, completion and production services and equipment in the Middle East and North Africa
(“MENA”) and Asia Pacific regions. Following closing, our primary operating locations will be in Dammam, Saudi Arabia,
Muscat, Oman and Dubai, UAE with local headquarters in Houston, Texas. We will employ more than 3,000 people in more than a dozen
countries across the region. The transaction is subject to stockholder approval and other customary closing conditions. See our
Current Report on Form 8-K filed with the SEC on November 16, 2017 for further information.

Results
of Operations

We
have neither engaged in any operations nor generated any revenues to date. Our only activities from January 23, 2017 (inception)
through December 31, 2017 were organizational activities and those necessary to consummate the IPO, described below, identifying
a target company for a business combination and activities in connection with the proposed business combination. We do not expect
to generate any operating revenues until after the completion of our business combination. We expect to generate non-operating
income in the form of interest income on cash and marketable securities held after the IPO. We expect to incur increased expenses
as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due
diligence expenses.

For
the period from January 23, 2017 (inception) through December 31, 2017, we had net loss of $2,864,031 consisting of operating
costs of $4,214,790 and an unrealized loss on marketable securities held in our trust account of $2,800, offset by interest income
on marketable securities held in our trust account of $1,339,824, interest income on our operating account of $3,699 and the change
in the fair value of the deferred underwriting fee liability of $10,036.

Liquidity
and Capital Resources

On
May 17, 2017, we consummated the IPO of 21,000,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $210,000,000.
Simultaneously with the closing of the IPO, we consummated the sale of 11,850,000 Private Warrants to our Sponsor at a price of
$0.50 per warrant, generating gross proceeds of $5,925,000.

On
May 30, 2017, in connection with the underwriters’ partial exercise of their over-allotment option, we consummated the sale
of an additional 1,921,700 Units and the sale of an additional 768,680 Private Warrants, generating total gross proceeds of $19,601,340.

Following
the IPO and the partial exercise of the over-allotment option, a total of $229,217,000 was placed in the trust account. We incurred
$13,761,498 in IPO related costs, including $4,014,340 of underwriting fees, $9,032,265 of deferred underwriting fees and $714,893
of IPO costs.

As
of December 31, 2017, we had marketable securities held in the trust account of $230,554,024, substantially all of which is invested
in U.S. treasury bills with a maturity of 180 days or less. Interest income earned on the balance in the trust account
may be available to us to pay taxes. Through December 31, 2017, we have not withdrawn interest income from the trust account.

As of December 31, 2017, we had cash of $741,096
held outside the trust account, which is available for use by us to cover the costs associated with identifying a target business,
negotiating a business combination, due diligence procedures and other general corporate uses. In addition, as of December 31,
2017, we had accounts payable and accrued expenses of $3,473,511. We have entered into a fee arrangement with a service provider
pursuant to which certain fees incurred by us in connection with a potential business combination will be deferred and become
payable only if we consummate a business combination. If a business combination does not occur, we will not be required to pay
these contingent fees. As of December 31, 2017, the amount of these contingent fees was approximately $1,382,000. To the extent
a business combination is consummated, we anticipate incurring a significant amount of additional costs. There can be no assurances
that we will complete any business combination.

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For
the period from January 23, 2017 (inception) through December 31, 2017, cash used in operating activities amounted to $865,000,
mainly resulting from net loss of $2,864,031, interest earned on marketable securities held in the trust account of $1,339,824
and the change in the fair value of the deferred underwriting fee liability of $10,036, offset by an unrealized loss on marketable
securities held in the trust account of $2,800. Changes in our operating assets and liabilities provided cash of $3,346,091.

We
intend to use substantially all of the net proceeds of the IPO, including the funds held in the trust account, to acquire a target
business or businesses and to pay our expenses relating thereto. To the extent that our shares are used in whole or in part as
consideration to effect our initial business combination, the remaining proceeds held in the trust account as well as any other
net proceeds not expended will be used as working capital. Such working capital funds could be used in a variety of ways including
continuing or expanding the target business’s operations, for strategic acquisitions and for marketing, research and development
of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had
incurred prior to the completion of our initial business combination if the funds available to us outside of the trust account
were insufficient to cover such expenses.

We
intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business
due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target
businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses,
and structure, negotiate and complete a business combination.

In
order to finance transaction costs in connection with a business combination, our Sponsor or certain of our officers, directors
and affiliates may, but are not obligated to, loan us funds as may be required. If we complete a business combination, we would
repay such loaned amounts out of the proceeds of the trust account released to us. In the event that a business combination does
not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds
from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be converted into Private
Warrants of the post business combination entity at a price of $0.50 per warrant at the option of the lender. The terms of such
loans, if any, have not been determined and no written agreements exist with respect to such loans.

As
of December 31, 2017, we had $741,096 in cash and a working capital deficit of $2,605,984. We have not generated operating revenues,
nor do we expect to generate operating revenues until the consummation of an initial business combination. Our Sponsor or certain
of our officers and directors are not under any obligation to advance us funds, or to invest in us. Accordingly, we may not be
able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures
to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of
a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available
to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a
going concern.

Off-balance
sheet financing arrangements

We
have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in
transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest
entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered
into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments
of other entities, or purchased any non-financial assets.

Contractual
obligations

We
do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an
agreement to pay the Sponsor a monthly fee of $10,000 for office space, utilities and administrative support provided to the Company.
We began incurring these fees on May 17, 2017 and will continue to incur these fees monthly until the earlier of the completion
of the business combination and the Company’s liquidation.

Critical
Accounting Policies

The
preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the
United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income
and expenses during the periods reported. Actual results could materially differ from those estimates. The Company has identified
the following critical accounting policy:

Ordinary
shares subject to possible redemption

We
account for our ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification
(“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption
(if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including
ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon
the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary
shares are classified as shareholders’ equity. Our ordinary shares feature certain redemption rights that are considered
to be outside of our control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2017, ordinary
shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of
our balance sheet.

Recent
accounting pronouncements

Management
does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have
a material effect on the Company’s financial statements.