1084991--3/31/2006--NATURAL_GAS_SERVICES_GROUP

related topics

{acquisition, growth, future}

{stock, price, share}

{debt, indebtedness, cash}

{customer, product, revenue}

{competitive, industry, competition}

{financial, litigation, operation}

{condition, economic, financial}

{cost, regulation, environmental}

{stock, price, operating}

{cost, operation, labor}

{tax, income, asset}

{control, financial, internal}

{personnel, key, retain}

The intense competition in our industry could result in reduced profitability and loss of market share for us. Our industry is highly cyclical, and our results of operations may be volatile. We are subject to extensive environmental laws and regulations that could require us to take costly compliance actions that could harm our financial condition. Risks Associated With Our Company We might be unable to employ adequate technical personnel, which could hamper our plans for expansion or increase our costs. We could be subject to substantial liability claims that could harm our financial condition. We will require a substantial amount of capital to expand our compressor rental fleet and grow our business. Our current debt level is high and may negatively impact our current and future financial stability. If we are unable to service our debt, we will likely be forced to take remedial steps that are contrary to our business plan. Our current bank loan agreement contains covenants that limit our operating and financial flexibility and, if breached, could expose us to severe remedial provisions. If we fail to acquire or successfully integrate additional businesses, our growth may be limited and our results of operations may suffer. As of December 31, 2005, a significant majority of our compressor rentals were for terms of six months or less which, if terminated or not renewed, would adversely impact our revenue and our ability to recover our initial equipment costs. The loss of one or more of our current customers could adversely affect our results of operations. It is likely that we will not continue to receive the same level of revenues we have received in the past from one of our customers. Loss of key members of our management could adversely affect our business. Failure to effectively manage our growth and expansion could adversely affect our business and operating results and our internal controls. Liability to customers under warranties may materially and adversely affect our earnings. Failure to maintain effective internal controls could have a material adverse effect on our operations. We must evaluate our intangible assets annually for impairment. Risks Associated With Our Common Stock The price of our common stock may fluctuate which may cause our common stock to trade at a substantially lower price than the price which you paid for our common stock. Future sales of our common stock could adversely affect our stock price. If securities analysts downgrade our stock or cease coverage of us, the price of our stock could decline.

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1084991--3/31/2006--NATURAL_GAS_SERVICES_GROUP_INC