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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-K





(Mark one)

|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended: October 31, 2009

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number: 0-50089





NATIONAL ENERGY SERVICES COMPANY, INC.

(Exact name of small business issuer in its charter)







|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Nevada                                                         |  | 52-2082372                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)



|                                                  |  |           
|------------------------------------------------- |  | ----------
|3153 Fire Road, Suite 2C, Egg Harbor Township, NJ |  | 08234     
|(Address of principal executive offices)          |  | (Zip Code)

Issuers telephone number: (800) 758-9288





Securities
registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to
Section 12(g) of the Exchange Act: Common Stock, $.001 par value





Check if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act    Yes   ̈    No  x

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange
Act.    Yes   ̈    No  x

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Check whether the registrant has submitted electronically and posted on its corporate Website, if
any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of registrants knowledge,
in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ̈

Check whether the registrant is a large accelerated filer , an accelerated filer, a non-accelerated filer, or smaller reporting company.

Large accelerated filer   ̈        Accelerated filer   ̈        Non-accelerated
filer   ̈        Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ̈    No  x

The
aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within
the past 60 days was $225,476.

The number of shares outstanding of the issuers common stock, as of February 12, 2010 was
32,210,846.









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Contents



|         |  |                                                                                                                |  |   
|-------- |  | -------------------------------------------------------------------------------------------------------------- |  | --
|PART I   |  |                                                                                                               
|ITEM 1.  |  | DESCRIPTION OF BUSINESS                                                                                        |  | 2 
|ITEM 1A. |  | RISK FACTORS                                                                                                   |  | 7 
|ITEM 2.  |  | DESCRIPTION OF PROPERTY                                                                                        |  | 7 
|ITEM 3.  |  | LEGAL PROCEEDINGS                                                                                              |  | 7 
|ITEM 4.  |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                            |  | 8 
|         | 
|PART II  |  |                                                                                                               
|         |  |                                                                                                               
|ITEM 5.  |  | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES |  | 8 
|ITEM 6.  |  | SELECTED FINANCIAL DATA                                                                                        |  | 9 
|ITEM 7.  |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                          |  | 9 
|ITEM 7A. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                     |  | 13
|ITEM 8.  |  | FINANCIAL STATEMENT AND SUPPLEMENTARY DATA                                                                     |  | 13
|ITEM 9.  |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                           |  | 13
|ITEM 9A. |  | CONTROLS AND PROCEDURES                                                                                        |  | 13
|ITEM 9B. |  | OTHER INFORMATION                                                                                              |  | 15
|         | 
|PART III |  |                                                                                                               
|         |  |                                                                                                               
|ITEM 10. |  | DIRECTORS, OFFICERS AND CORPORATE GOVERNANCE                                                                   |  | 15
|ITEM 11. |  | EXECUTIVE COMPENSATION                                                                                         |  | 16
|ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                 |  | 18
|ITEM 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE                                       |  | 19
|ITEM 14. |  | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                         |  | 19
|         | 
|PART IV  |  |                                                                                                               
|         |  |                                                                                                               
|ITEM 15. |  | EXHIBITS                                                                                                       |  | 20



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PART I

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report contains certain forward-looking statements regarding National Energy Services Company, Inc., (National Energy
Services) its business and its financial prospects. These statements represent Managements present intentions and its present belief regarding the Companys future. Nevertheless, there are numerous risks and uncertainties that could
cause actual results to differ from the results suggested in this Report. Among the more significant factors are:



| |  |  | The Company has not been profitable in recent years. Although the Company implemented a number of programs to help us achieve profitability, they were
unsuccessful.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company lacks the capital necessary to significantly expand its business. Unless the expansion of business is sufficient enough that the gross
profit will exceed administrative costs, the Company will not achieve profitability.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Expansion of business will require that an expansion of accounting and other internal management systems. Such an expansion may lead to inefficiencies
that could prevent profitability.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company has sought to expand its business model and discontinue certain unprofitable business elements while expecting to expand other product
offerings.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

Because these and other risks may cause National Energy Services actual results to differ
from those anticipated by Management, the reader should not place undue reliance on any forward-looking statements that appear in this Report. Readers should also take note that National Energy Services will not necessarily make any public
announcement of changes affecting these forward-looking statements, which should be considered accurate on this date only.



|ITEM 1. | DESCRIPTION OF BUSINESS
|------- | -----------------------

Business of
the Company

National Energy Services Company, Inc. (NES) was incorporated on February 17, 1998 in Nevada
as Coastal Enterprises, Inc. Coastal Enterprises, Inc. and National Energy Services Company, Inc., an unaffiliated New Jersey formed in September 1994, entered into an Agreement and Plan of Share Exchange, dated October 19, 2001, immediately
changing the name of Coastal Enterprises, Inc. to National Energy Services Company, Inc. pursuant to which the shareholders of the New Jersey corporation were issued 10,000,000 common shares, par value $.001, of the Nevada corporation in exchange
for 100% of the issued and outstanding shares of the New Jersey corporation, which became a wholly-owned subsidiary of Nevada corporation. For accounting purposes, the transaction was accounted for as a reverse acquisition. National Energy Services
Company, Inc. of New Jersey operates as the sales and service subsidiary of National Energy Services Company, Inc. The subsidiarys New Jersey sales operations were closed in January 2010.



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Recent Developments

The Company entered into an agreement to purchase an alternative energy construction management contract on January 21, 2010, as filed on Form 8-K on January 26, 2010. The agreement required the
officers and directors to resign immediately except John ONeill, who remained as a director and Dr. John G. Kalogeris was seated as the new CEO, CFO, and director. Dr. John G Kalogeris is in search of additional directors and
officers and business expansion opportunities. A complete business plan and the determination of existing products and programs to be continued will be completed by the end of February 2010. Many of the current product offerings are feasible and
usable in the construction management business as all are energy efficient and therefore green as mandated in the construction management offerings. A change of voting control will take place on March 1, 2010 when all agreement and
escrow terms have been completed.

The ozone laundry business will not be continued as all business opportunities and warranty
contracts had been disposed before the negotiations for the agreement were begun.

The Company, through its subsidiary engaged
in the business of marketing a comprehensive energy management program for long-term care, hospitality, warehousing and distribution facilities. The program features lighting upgrades, an energy efficient laundry system, wireless energy management
for the monitoring and control of energy, lighting upgrades, group purchasing of natural gas, and improvements to heating, venting and air conditioning systems. The facilities generally recover the costs of these renovations through monthly energy
savings, resulting in no out-of-pocket expense to the facility.

Financing Arrangements

The Company has offered the Facilities several financing alternatives through various lending sources. In the past Facilities purchased the
upgrade equipment and obtained purchase financing from Charter Management, LLC (Charter) under the Energy Gatekeeper Program (Gatekeeper). Charter is owned by John ONeill and Deborah ONeill, who have a controlling
equity interest in National Energy Services as well. Under the Gatekeeper Program, the Company provided the Facility with all of its energy services and assisted the Facility in obtaining financing from Charter for the energy services. The
Gatekeeper Program was terminated in 2006.

The Company also has customers who fund these projects through their own capital
expenditure budgets and pay the Company directly.

Principal Products and Services

The principal products and services offered in the Program are the Ozone Laundry System (OLS), Lighting Upgrades, Mechanical Systems (HVAC),
Water/Sewer Conservation Methods and Energy Management.

Ozone Laundry System (OLS). OLS is a system that can reduce a
Facilitys laundering costs by more than 50%, primarily by eliminating the need for hot water during the washing process. The OLS injects activated oxygen (ozone) into the wash and rinse water, with the result that the laundry is cleaned and
completely disinfected. Ozone is a powerful oxidant that is more effective than chlorine, but without chlorines dangerous properties. Various studies have shown



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that using ozone in laundering is far more effective than conventional disinfectants against microorganisms and viruses. With ozone laundering, fewer cycles are required to clean, thus chemical
use is reduced. Energy bills are also greatly reduced because ozone is only active in cold water, eliminating the need to buy natural gas or other energy sources to heat the water. The savings to the Facility are substantial since laundering expense
is one of the most significant expense items in a Facilitys budget. This portion of the sales operations has been reflected as the discontinued operation on the Consolidated Statements of Operation for the year ended October 31, 2009 and
2008.

Lighting Upgrades. The Company provides Facilities with energy-efficient lighting upgrades or retrofits
(Lighting Upgrades). The Lighting Upgrades can reduce the Facilitys energy consumption and prevent pollution while delivering comparable or better lighting. For example, a Lighting Upgrade in a typical 120 bed nursing home can
reduce energy usage by 226,666 kilowatt hours per year, resulting in an annual savings of approximately $20,400. This calculation of average savings is based on our own engineering studies and actual results in more than 100 installations.

Although a Lighting Upgrade product may cost slightly more than the standard lighting product it replaces, the energy savings
are so significant that any incremental cost is rapidly recovered by the Facility. For example, compact fluorescent light bulbs use 70 percent less energy than standard incandescent light bulbs. By replacing just one 75-watt incandescent light bulb
with a 20-watt CFL, a Facility saves approximately $14 a year, assuming the bulb is used for 5,000 hours in the year. Further, compact fluorescent light bulbs last an average of 10,000 hours, compared to only 850 hours for a standard incandescent
light bulb.

Mechanical Systems/HVAC. The installation of state-of-the-art, energy conserving boilers, heating and air
conditioning units and other mechanical equipment can improve a Facilitys operating efficiency and increase its productivity. Retrofitting outdated systems with new equipment not only saves energy dollars, but reduces repair and maintenance
expense. The impact of environmental improvements such as improved air quality and increased comfort levels can make a noticeable positive impact on the Facilitys residents and employees.

Water and Sewer Conservation. The goal of an effective water conservation project is to reduce usage and maintain or improve the
water quality and fixture performance. The installation of low use, optimum performance fixtures is the key to an effective water conservation program. For example, the retrofit of a low-flush toilet can reduce water usage by more than 750,000
gallons annually in the average 120 bed nursing home. This reduction in usage has a significant impact on water/sewer costs. Depending on the local water/sewer rates, the annual savings can be as much as $5,000 per year with equipment life
expectancy of 15 to 20 years.

Marketing, Sales and Distribution

The Companys primary market has been the nursing home industry. There are approximately 17,000 nursing homes operating nationally, with
approximately 10,000 of them in the high cost energy regions of the East and West coasts. Nursing homes are a fertile area for our energy-saving Program for several reasons:



| |  |  | Nursing homes are under intense fiscal and regulatory pressures.
| | - |  | ----------------------------------------------------------------



| |  |  | Nursing homes have very few areas to conserve cash without compromising care.
| | - |  | -----------------------------------------------------------------------------



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| |  |  | Utility costs are among the five highest line items in the operating budget.
| | - |  | ----------------------------------------------------------------------------



| |  |  | Most nursing homes are operating outdated HVAC and lighting systems.
| | - |  | --------------------------------------------------------------------



| |  |  | The customer is well-defined and easy to reach.
| | - |  | -----------------------------------------------



| |  |  | Most long term care facilities are alike in construction, design and energy consumption.
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | Data about nursing home energy consumption is quickly and efficiently obtained.
| | - |  | -------------------------------------------------------------------------------



| |  |  | The Medicaid utilities reimbursement structure assures a Facilitys ability to pay.
| | - |  | -----------------------------------------------------------------------------------

In addition to capitalizing on the Companys track record in the skilled nursing facility industry, in 2007 the Company made its entry
into the hospitality industry, with a successful test for Hilton Hotels. As a result of that test, the Company is now in the process of gearing up its sales and marketing team in order to actively sell its Ozone Laundry System to Hilton. The Company
is also looking to sell its system to other hotel chains. The addressable market of approximately 30,000 hotels/motels is much larger than the skilled nursing industry. The Company is proceeding carefully, looking to field test equipment in several
locations with several chains, much in the way the nursing home market was initially approached. To assist in this area, the Company recently engaged a new salesperson, who has existing relationships in the hotel industry.

Additionally the Company is starting to penetrate the warehouse, freight distribution and manufacturing sectors, offering the T-5 lighting
system. This is a relatively new way to light traditional steel pre-fabricated buildings. This lighting system, which consumes 50% less energy than conventional metal halide and high-pressure sodium HID fixtures, also provides better quality of
light, increased productivity, and lower maintenance costs.

The Company believes that relationships are the cornerstone of
its marketing philosophy. The process of building and maintaining working relationships requires a commitment at all levels of the organization. Our marketing program includes: market research, feasibility studies, public and industry relations,
promotion, advertising, direct response, sales support, customer service, employee relations and training and education. As a result of the complexity of the products offered and the market, the Company works very hard to ensure that its employees
and representatives have a working knowledge of all products and processes.

The addition of construction management
operations provides the expansion to markets such alternative energy processing, medical treatment, and agricultural facilities.

Purchasing and Installation

The Company has developed solid relationships with major suppliers of industrial
lighting, mechanical equipment and other energy conservation products. The Company has preferred vendor or distributor status with several suppliers. This means that the Company enjoys the following: (i) preferred pricing, (ii) quantity
discounts, (iii) timely delivery, (iv) quality products, (v) exceptional warranties, (vi) superior customer service, (vii) product exclusivity, (viii) manufacturer sponsored training, and (ix) superior customer
service. The Company is dedicated to maintaining quality relationships with suppliers and makes a concentrated effort to expand its sphere of influence among manufacturers. This allows the Company to customize product lines and select the materials
that best fill the needs of its customers.

The installation of the products is the most delicate part of the entire process
and can place enormous strain on a customer relationship. The Companys selection of the right contractor to carry out the installation is critical to a successful installation. The Company has strict contractor criteria. The selected firm must
have a complete understanding of what is required to work in the health care or hospitality environment and be willing to complete the contractor compliance paperwork.



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Reliance On Major Customers and Suppliers

In the year ended October 31, 2009, we had a customer who provided $150,000 or 20% of our sales, representing no balance in our trade
receivable; and one customer who provided $87,717 or 11% of our sales, representing 100% of our trade receivables.

The
Company has a broad range of suppliers because of its varied business sales model. However, during the year ended October 31, 2009 one supplier accounted for 18% of purchases.

Competition

The principal markets in which the Company competes are
competitive and fragmented. No competitor known to us controls more than 3% of the nursing home market for any of the several services provided. There are competitors supplying energy, providing energy management services or financing, but few
providing a total package deal with no out-of-pocket cost to the facility. Increased competition could have a material adverse effect, as competitors may have far greater financial and other resources available to them.

Governmental Regulation

The government regulations applicable to the health care and hospitality industries are in many ways unique. State regulations include specifications for HVAC, lighting, water quality and laundry equipment. It is the Companys
responsibility to find supplies and equipment that meet and/or surpass the regulatory guidelines. Guidelines vary from state to state. It is critical to become familiar with each states regulations and policies regarding each energy
conservation measure (ECM) before we start to market and install the particular ECM in any given state.

The one
portion of the Companys Program that is most intensely affected by government regulation is the laundry process. The majority of states in which the Company markets have specific guidelines for laundry that is processed in an on-site laundry.
Typical regulations include guidelines mandating separate holding areas for soiled and clean linen, linen cart storage, having enough clean linen on hand to adequately service the facility, adequate soiled and clean linen storage, an area for
folding, mending and ironing the clean linen, proper storage for supplies, a deep sink for soaking and a separate hand washing sink. Policies, procedures and proper protocol to reduce bacteria in linens and to protect the staff and residents from
infection are required to be written and implemented by the facility.

The procedures and policy section is what most affects
the installation of the OLS. Since these procedures and policies are left to the individual Facility to develop, it is common practice to follow the manufacturers specifications when it comes to disinfection. Because standard laundering
procedures use chlorine bleach to disinfect the linen, the manufacturers specifications often require 160 degree water because that is the water temperature in which chlorine bleach is most effective. While most states do not define a
minimum water temperature, two states have a minimum wash water temperature in their respective regulations: Maryland and Massachusetts. To overcome the minimum wash water temperature requirements, the Company presented Maryland and Massachusetts
with the merits of using ozone in the wash water to clean and disinfect. The Company was successful in this endeavor and has received waivers from both states to install the OLS.



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Compliance with Environmental Laws

The Company is in compliance with all relevant environmental laws. The waste generated during a lighting upgrade that can be considered
hazardous is the Polychlorinated Biphenyls (PCBs) in the existing ballasts and the mercury in the existing fluorescent lamps. The Company uses federal and state licensed and fully insured recycling facilities and hazardous waste disposers.
This practice in some instances exceeds the minimum disposal requirements. But it is the Companys view that this practice will provide its clients and itself the greatest protection from any Super Fund or toxic waste liability issues.

The Companys practices are required to comply with the federal Toxic Substance Control Act (TSCA), which
regulates the disposal of PCBs. Fully complying with the TSCA removes the risk of liability under the federal Comprehensive Environmental Compliance and Liability Act of 1980 (CERCLA), which is also known as the Superfund Law. Under this
law, any release or threat of a release of a hazardous substance requires immediate cleanup and notification of all responsible parties. The Companys practices are also required to comply with the Resource Conservation and Recovery Act
(RCRA). RCRA requires generators of lamps to test a sample of mercury-containing lamps to determine if they should be treated as hazardous waste. Lamps must be managed as hazardous waste if the mercury concentration exceeds 0.2 mg per
liter. In addition, lamps must be managed as hazardous waste if they are not tested and proven non-hazardous. The Company treats all fluorescent lamps as hazardous and properly dispose and recycle them.

Employees

The Company, as
of February 6, 2010, employs one full time, no part time employees and two contractors to provide essential services. None of the Companys employees is represented by a labor union.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

None



|ITEM 2. | DESCRIPTION OF PROPERTY
|------- | -----------------------

The Company currently leases its executive offices at 3153 Fire Road, Suite 2C, Egg Harbor Township, New Jersey on a month-to-month basis. The property consists of approximately 1,800 square feet of finished office space, for which we pay
$2,000 per month.



|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

On
August 4, 2009 PPL Spectrum Inc. commenced a legal action against the Company entitled PPL Spectrum, Inc. and PPL Energy Services Holdings, LLC. v. National Energy Services Company, Inc., a New Jersey corporation the action in
Common Pleas Court in the County of Lehigh, State of Pennsylvania (Civil Action No. 2009-C-4006. The complaint alleges that National Energy Services has failed to make payments due to PPL Spectrum, and demands damages in the amount of $435,745.
National Energy Services, Inc. received a judgment in favor of PPL Spectrum on October 14, 2009.



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On December 17, 2009, Nutek International, Inc. filed for an injunction to enjoin an
employee of National Energy Services Company, Inc., a New Jersey corporation from continuing the services of the employee. The Company believes that the suit has no merit as the employee resigned from the subsidiary on December 22, 2009.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

None.

PART II



|ITEM 5. | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.
|------- | ---------------------------------------------------------------------------------------------------------------

The Companys common stock has been quoted on the OTC Bulletin Board under the symbol NEGS.OB since
September 26, 2006. Set forth below are the high and low bid prices for each quarterly period from November 1, 2008 through October 31, 2009. The reported bid quotations reflect inter-dealer prices without retail markup, markdown
or commissions, and may not necessarily represent actual transactions.



|                             |  |      |     |     |   |    
|---------------------------- |  | ---- | --- | --- | - | ---
|                             |  | Bid 
|                             |  | High |     | Low
|Nov. 1, 2007  Jan. 31, 2008 |  | $    | .30 |     | $ | .11
|Feb. 1, 2008  Apr. 30, 2008 |  | $    | .23 |     | $ | .08
|May 1, 2008  July 31, 2008  |  | $    | .12 |     | $ | .06
|Aug. 1, 2008  Oct. 31, 2008 |  | $    | .15 |     | $ | .03
|                             |  |     
|Nov. 1, 2008  Jan. 31, 2009 |  | $    | .08 |     | $ | .01
|Feb. 1, 2009  Apr. 30, 2009 |  | $    | .08 |     | $ | .03
|May 1, 2009  July 31, 2009  |  | $    | .05 |     | $ | .02
|Aug. 1, 2009  Oct. 31, 2009 |  | $    | .04 |     | $ | .01

Holders. There
are 137 holders of record of common stock.

Dividend Policy. The Company has not declared or paid cash dividends or
made distributions in the past, and does not anticipate paying cash dividends or making distributions in the foreseeable future. The Company currently intends to retain and reinvest future earnings, if any, to finance operations.

Recent Sales of Unregistered Securities.

On January 9, 2009 the Company issued 425,245 shares, with a fair market value of $30,511, to an investor relation agent for services performed.

On February 18, 2009, the Company issued 100,000 shares, with a fair market value of $5,000, for services.



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On March 11, 2009, the Company issued 350,000 shares for $17,500 in cash in four
separate subscription agreements.

On July 29, 2009, the Company issued 1,500,000 shares for $10,000 in cash in a
subscription agreement.



|ITEM 6. | SELECTED FINANCIAL DATA
|------- | -----------------------

None



|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------

Results of Operations

The
Companys revenue for the year ended October 31, 2009 was 51% lower than the revenues for the year ended October 31, 2008. During the year ended October 31, 2009, the Company realized revenue from three distinct sources:

Equipment Sales. Our revenue from sales of capital equipment was $698,773 for the year ended October 31, 2009,
which is 52% lower than the level of equipment sales for the year ended October 31, 2008. The 2009 sales represent 94% of our total revenue for the period.

Invoice Management Fees. Some of the Facilities that we service pay us fees for aggregating invoices from the utility companies and processing their payments. Our revenue from invoice management
services represented 2% of total revenue for the year ended October 31, 2009. It is expected that invoice management fees will continue to make only a minor contribution to revenue, as it is the intention of the Company to limit this relatively
labor-intense business to situations in which the services can be performed profitably.

Energy Management Fees. A
number of the Facilities that the Company manages pay fees for monitoring their utility invoices to ensure correct charges and appropriate tariffs. Revenue from management services represented 4% of total revenue for the year ended October 31,
2009. As with invoice management services, the portion of revenue attributable to energy management fees will remain modest, as the intention is to limit this relatively labor-intense business to situations in which the services can be performed
profitably.

In the beginning of the 2007 fiscal year, the Company implemented a number of initiatives designed to increase
revenues in the coming months. The Company established a relationship with an equipment leasing company, so it could now offer prospective clients a choice of financing options. In addition, the Company revised its internal procedures for evaluation
of the credit worthiness of potential clients in order to substantially hasten the process, thus enabling the sales staff to close contracts more efficiently. The expectation was that these initiatives, combined with increased demand for services
due to the recent surge in energy prices, would enable the Company to expand its operations in the coming months. Due to the current economic climate, sales for the current year were not what was expected. The Company has worked to establish
relationships with new customer bases.

National Energy has also begun to explore new markets. To date the typical customer
has been the long term care facility. The Company is now quoting business to the warehouse, freight distribution, manufacturing and hospitality industries. These new areas will take some time to develop.



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Our gross margin during the year ended October 31, 2009 was 47%, compared to 49% gross
margin for the year ended October 31, 2008. In general, gross margin will depend on product mix and volume of business. The Company realizes a higher gross profit from sales of ozone laundry systems than from upgrades to lighting and HVAC
systems, although the profit is counterbalanced by the higher marketing costs attendant to sales of ozone laundry systems.

If
the Company is successful in increasing its volume of business, gross profit should increase as well, for a number of reasons. For one, each sale of equipment requires that field surveyors are sent to interested Facilities to determine the potential
energy savings so that a cost proposal can be presented to the Facility. That expense is incurred whether the sale closes or not, and the expense of failed contracts burdens the gross profit that is realized from successful marketing efforts. If the
Company is able to close more contracts and at a higher success rate, the burden on gross profit of costs from failed contracts will be proportionately reduced.

Our operating expenses for the year ended October 31, 2009 totaled $909,297, a decrease of $537,142 compared to the year ended October 31, 2008. Management decreased expenses by a reduction in
the employees, a decision to reduce all sales expenses and a careful examination of all administrative expenses.

Interest expense for the year ended October 31, 2009 was $24,599, compared to interest expense of $21,348 incurred in the year ended October 31, 2008. Interest expense should continue to decrease as debt is amortized unless
the Company secures new debt financing.

As a result of the factors listed above, the Company reported a net loss of
$591,109 for the year ended October 31, 2009, as compared to a net loss of $713,316 for the year ended October 31, 2008.

Liquidity and Capital Resources

During the years prior to fiscal 2009,, the Companys only significant
source of working capital financing was Charter Management, LLC, which is owned by two members of the Companys Board of Directors, John ONeill and Deborah ONeill.

The Companys working capital deficit increased by $528,566 during fiscal 2009, so that at October 31, 2009 the deficit was
$2,154,932. The Company has minimal liquidity and working capital is severely strained, as credit lines have been fully utilized. It is expected that there will continue to be a working capital deficit until revenues increase significantly.

Our working capital deficit is primarily a result of our poor operating results. However, working capital has also been
impaired, in part, by the nature of the Companys business contracts. In most of the sales arrangements, the Company must complete the job, pay for all costs incurred, and obtain a completion certificate before an invoice can be submitted for
reimbursement to the lender or lessor. Only then will the Company collect the cash payment for the job. This procedure creates a delay of approximately thirty days before funds are received. Until a level of operations is reached in which the
Company is completing jobs on a consistent basis, this delay in receiving payment for jobs will impair the ability to fund operations. The Company expects the change in the businesses that we participate with the acquisition of the construction
management contracts and their size and scope will bring profitability and financing opportunities that have not formerly been available.



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In 2004 PPL Spectrum, Inc. (PPL) terminated the arrangement under which it had
previously provided equipment financing to the Companys customers. Effective March 1, 2005 the Company assigned to PPL all of the notes receivable that arose from customer financing provided by PPL. In turn, PPL released the Company from
the corresponding notes payable to PPL.

In connection with the termination of the lending arrangement and assignment of the
notes, the Company did assume certain obligations to PPL:



| |  |  | The Company entered into a settlement agreement with PPL for aged payables. In February 2004 the payables were consolidated into a three-year
promissory note in the amount of $314,047, bearing interest at 18% per annum. Effective March 1, 2005, this note was renegotiated to bear interest rate at 8% per annum. The balance at March 1, 2005 was $219,473 payable over
seven years.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company contracted to pay $1,400 per month toward a reserve for any bad debts among the notes it assigned to PPL. The Company has recorded the
present value of that obligation on its balance sheet as a debt.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company also contracted to assume a contingent liability to reimburse PPL for the bad debts of certain customers if they filed for protection in
bankruptcy. The contingency occurred in June 2005, and the Company became obligated to fund $140,709 over 10 years with an imputed interest rate of 6%.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On August 4, 2009 PPL Spectrum Inc. commenced a legal action against the Company entitled PPL Spectrum, Inc. and PPL Energy Services
Holdings, LLC. v. National Energy Services Company, Inc. the action is pending in Common Pleas Court in the County of Lehigh, State of Pennsylvania (Civil Action No. 2009-C-4006. The complaint alleges that National Energy Services has
failed to make payments due to PPL Spectrum, and demands damages in the amount of $435,745. National Energy Services, Inc. received a judgment in favor of PPL Spectrum on October 14, 2009. The Company accrued additional interest from
October 14 through October 31, 2009 adding $1,275 and bringing the total to $437,020.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The table
below sets forth our debt service obligations as of October 31, 2009.



|                                   |  |       |           |                 |   |           |  |          |       |              |   |       |  |   |  
|---------------------------------- |  | ----- | --------- | --------------- | - | --------- |  | -------- | ----- | ------------ | - | ----- |  | - | -
|Contractual Obligations            |  | Total |           | Less than1 Year |   | 1-3Years  |  | 4-5Years |       | After 5Years
|Loans Payable  Settlement Payable |  | $     | 437,020   |                 | $ | 437,020   |  | $        | 0     |              | $ | 0     |  | $ | 0
|Sandbox Payable                    |  | $     | 22,500    |                 | $ | 22,500    |  | $        | 0     |              | $ | 0     |  | $ | 0
|BARS Payable                       |  | $     | 80,000    |                 | $ | 80,000    |  | $        | 0     |              | $ | 0     |  | $ | 0
|Charter Payable                    |  | $     | 1,339,558 |                 | $ | 1,339,558 |  | $        | 0     |              | $ | 0     |  | $ | 0
|Operating Leases                   |  | $     | 34,333    |                 | $ | 20,263    |  | $        | 8,263 |              | $ | 5,807 |  | $ | 0
|                                   |  |       |           |                 |   |           |  |          |       |              |   |       |  |   |  
|TOTAL                              |  | $     | 1,913,411 |                 | $ | 1,899,341 |  | $        | 8,263 |              | $ | 5,807 |  | $ | 0



11



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##### Table of Contents

Assets totaled $123,818 and $144,280 as of October 31, 2009 and 2008, respectively. On
both dates assets consisted primarily of notes receivable from our customers who financed through Charter Management and accounts receivable from current installations.

The addition of construction management operations provides the expansion to markets such alternative energy processing, medical treatment, and agricultural facilities. The contracts we have or are
negotiating are all cost plus based with the add on ranging from 8-11%. These new revenues and substantial profits are expected to bring us acceptable financing opportunities.

Off-Balance Sheet Arrangements

The Company does not have any off-balance
sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

Application of Critical Accounting Policies

In preparing the financial statements the Company is required to
formulate working policies regarding valuation of assets and liabilities and to develop estimates of those values. In the preparation of the financial statements for fiscal year 2009, there was one estimate made which were (a) subject to a high
degree of uncertainty and (b) material to our results.

The estimate was the determination, detailed in Note 9 to the
Financial Statements, that the Company should record a valuation allowance for the full value of the deferred tax asset created by the net operating loss carry-forward. The primary reason for the determination was the lack of certainty as to whether
the Company will carry on profitable operations in the future.

The Company made no material changes to critical accounting
policies in connection with the preparation of financial statements for the year ended October 31, 2009.

Impact of Accounting
Pronouncements

There were no recent accounting pronouncements that have had a material effect on the Companys
financial position or results of operations. There were two accounting pronouncements that may have a material effect on the Companys financial position or results of operations.

In July 2006, the FASB issued FASB Interpretation 48 Accounting for Uncertainty in Income Taxes  an interpretation
of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entitys financial statements in accordance with SFAS 109, Accounting for Income Taxes.FIN 48 prescribes a
recognition threshold and measurement attribute for financial statement disclosure of tax positions taken, or expected to be taken, on a tax return. This interpretation is effective for fiscal years beginning after December 15, 2006. To date,
the adoption of this interpretation has not impacted the Companys financial condition, results of operations, or cash flows.

On May 28, 2009, FASB issued ASC 855,Subsequent Events. The objective of this statement is to establish general standards of accounting for disclosure of events that occur after the balance sheet date but before
financial statements are issued or available to be issued. ASC 855 is not expected to have a material impact on the financial reporting of the Company.



12



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##### Table of Contents

|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|-------- | -----------------------------------------------------------

None



|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- | -------------------------------------------

The Companys financial statements, together with notes and the Report of the Independent Registered Public Accounting Firm, are set forth immediately following Item 15 of this Form 10-K.



|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|------- | -------------------------------------------------------------------------------------

None



|ITEM 9A. | CONTROLS AND PROCEDURES.
|-------- | ------------------------



|(a) | Evaluation of disclosure controls and procedures.
|--- | -------------------------------------------------

The term disclosure controls and procedures (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be
disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the Exchange Act) is recorded, processed, summarized and reported within required time periods. The Companys management, with the
participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Companys disclosure controls and procedures as of the end of the period covered by this annual report (the Evaluation
Date). In the course of that review, the Companys management were advised by our independent registered public accounting firm, that during its performance of review procedures with respect to the financial statements for the period
ended January 31, 2007, and subsequent reporting periods, it identified a material weakness (as defined in Public Company Accounting Oversight Board Standard No. 5) in our internal control over financial reporting. Friedman LLP identified
the same material weakness and reiterated the former advice.

The material weakness consisted of inadequate staffing and
supervision within the bookkeeping and accounting operations of our company. The relatively small number of employees who have bookkeeping and accounting functions prevents us from segregating duties within our internal control system. The
inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews. In light of the advice from
our independent registered public accounting firm, management has considered adding personnel to the Companys bookkeeping and accounting operations. However, as there has been no instance in which the company failed to identify or resolve a
disclosure matter or failed to perform a timely and effective review, management determined that the addition of personnel to our bookkeeping and accounting operations is not an efficient use of our limited resources at this time.

Accordingly, based on their evaluation of our disclosure controls and procedures as of October 31, 2009, the Companys Chief
Executive Officer and Chief Financial Officer (or persons performing similar functions) have concluded that, as of the Evaluation Date, such controls and procedures were effective.



13



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##### Table of Contents

|(b) | Changes in internal controls.
|--- | -----------------------------

The term
internal control over financial reporting (defined in SEC Rule 13a-15(f)) refers to the process of a company that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. The Companys management, with the participation of the Chief Executive Officer and Chief Financial Officer (or persons performing similar
functions), has evaluated any changes in the Companys internal control over financial reporting that occurred during the fourth quarter of the year covered by this annual report, and they have concluded that there was no change to the
Companys internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



|(c) | Managements Report on Internal Control over Financial Reporting
|--- | ----------------------------------------------------------------

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. We have
assessed the effectiveness of those internal controls as of October 31, 2009, using the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control  Integrated Framework as a basis for our
assessment.

Because of inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may
deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
presentation.

A material weakness in internal controls is a deficiency in internal control, or combination of control
deficiencies, that adversely affects the Companys ability to initiate, authorize, record, process, or report external financial data reliably in accordance with accounting principles generally accepted in the United States of America such that
there is more than a remote likelihood that a material misstatement of the Companys annual or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of making our assessment of the
effectiveness of internal controls over financial reporting, we identified one material weakness in our internal control over financial reporting. This material weaknesses consisted of:

a. Inadequate staffing and supervision within the accounting operations of our company. The relatively small number of employees who
are responsible for accounting functions prevents us from segregating duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and
disclosure matters or could lead to a failure to perform timely and effective reviews.

Because of the above condition,
managements assessment is that the Companys internal controls over financial reporting were not effective as of October 31, 2009.

This annual report does not include an attestation report of the Companys registered public accounting firm regarding internal control over financial reporting. Managements report was not
subject to attestation by the Companys registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only managements report in this annual report.



14



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##### Table of Contents

|ITEM 9B. | OTHER INFORMATION.
|-------- | ------------------

None.

PART III



|ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|-------- | ------------------------------------------------------

The officers and directors of the Company during the year ended October 31, 2009 were:



|                     |  |     |  |                                                                                  |  |              
|-------------------- |  | --- |  | -------------------------------------------------------------------------------- |  | -------------
|Name                 |  | Age |  | Position with the Company                                                        |  | DirectorSince
|John T. ONeill      |  | 52  |  | Chairman of the Board, Chief Executive Officer, Director                         |  | 2004         
|John A. Grillo       |  | 48  |  | President, Chief Financial Officer, Director                                     |  | 2001         
|Deborah ONeill      |  | 51  |  | Secretary, Treasurer, Director                                                   |  | 2004         
|Patricia A. Palmieri |  | 43  |  | Controller                                                                       |  |             
|John G Kalogeris     |  | 80  |  | Chairman of the Board, Director Chief Executive Officer, Chief Financial Officer |  | 2010         

All directors hold
office until the next annual meeting of shareholders and until their successors have been elected and qualify. Officers serve at the pleasure of the Board of Directors. All the officers and directors whose terms began before 2010 resigned on
January 21, 2010.

John T. ONeill. Mr. ONeill has been involved in the nursing home industry for
over forty years. For more than the past five years, Mr. ONeill has been employed as CEO of ONeill Management LLC., which is involved in the development, construction and operation of healthcare facilities. Mr. ONeill is
also the CEO of Charter Management, LLC, which provides financing programs for the development of long-term care facilities. Mr. ONeill attended Bowling Green State University and Ohio State University, where he completed the Core of
Knowledge for certification as a Licensed Nursing Home Administrator. Mr. ONeill is married to Deborah F. ONeill, the Companys Secretary and Treasurer.

John A. Grillo. Mr. Grillo organized National Energy Services in 1996, and has served as its Chief Executive Officer since that
time. Prior to organizing National Energy Services, Mr. Grillo was employed in a number of capacities in the field of electrical engineering. In 1996, Mr. Grillo conceived and co-authored the New Jersey Division of Medical Assistance and
Health Services Energy Efficient Lighting System Incentive, for the long-term care industry. He is an Environmental Protection Agency certified lighting surveyor. Mr. Grillo attended Northeastern Universitys School of Electrical
Engineering Technology from 1979 to 1983.

Deborah F. ONeill. Ms. ONeill is a Certified Public
Accountant with experience in auditing, income tax preparation and real estate development. For more than the past five years,



15



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##### Table of Contents

Ms. ONeill has been employed by ONeill Management LLC with responsibilities in financial management. She is also employed in the financial management of Charter Management, LLC.
Previously, Ms. ONeill was a founder and CFO of a software development company that offered turnkey accounting and medical computer systems to long term care facilities in Ohio, Pennsylvania, Connecticut and several other states.
Ms. ONeill graduated from Kent State University magna cum laude with a Bachelor of Business Administration degree in Accounting. Ms. ONeill is married to John T. ONeill, the Companys Chairman.

Patricia A. Palmieri. Ms. Palmieri has been employed as the Companys Controller since March 2004. Prior to joining the
Company, Ms. Palmieri had 14 years of accounting-related experience in industries such as home mortgages and auto financing. Specifically, from January 2003 until March 2004 Ms. Palmieri was an accountant for a soil remediation company. Prior
to 2003, Ms. Palmieri was the Assistant Controller for a landscaping company. Ms. Palmieri has a Bachelor of Arts in Accounting and a Masters in Business Administration.

Dr. John G. Kalogeris. Dr. Kalogeris assumed his positions on January 21, 2010. He spent the majority of his
professional life as an engineer beginning at General Dynamics where he participated in the development of supersonic pilot ejection systems that he tested and which are or were used on the B-1 Bomber, X-15 and the B-58 for the U.S. Air Force. He
was Reliability Manager for flight hardware used in the Mercury Manned Space Flight Program. He also participated in the development of trajectory software used in various space programs that utilized the theory of space bending velocity vectors to
propel space vehicles at extreme speeds without utilization of additional fuels. After retiring he has spent more than 40 years developing what came to be known as green technology and alternative energy systems. He currently serves as
technical advisor to the Board of Directors of Alternative Energy Systems. he is also the holder of several patents and many more patents pending mostly related to energy savings or alternative energy devices.

Nominating and Audit Committee

The Board of Directors has not appointed an Audit Committee or a Nominating Committee. The Board of Directors does not have an audit committee financial expert. The Board of Directors has not been able to recruit an audit committee
financial expert to join the Board of Directors because of the Companys poor financial condition.

Code of Ethics

The Company has adopted a written code of ethics applicable to its executive officers. A copy of the Code of Ethics was filed as an exhibit
to the Companys Annual Report on Form 10-KSB for the year ended October 31, 2003.

Section 16(a) Beneficial Ownership
Reporting Compliance

None of the officers, directors or beneficial owners of more than 10% of the Companys common
stock failed to file on a timely basis the reports required by Section 16(a) of the Exchange Act during the year ended October 31, 2009.



|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

The following table sets forth all compensation awarded to, earned by, or paid by National Energy Services, Inc. to John ONeill, its Chief Executive Officer, and John Grillo, its Chief Financial Officer for services rendered in all
capacities to the Company during the years



16



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##### Table of Contents

ended October 31, 2009, 2008, and 2007. There were no other executive officers whose total salary and bonus for the fiscal year ended October 31, 2009 exceeded $100,000.
Dr. Kalogeris currently serves without compensation until the additional members of the Board of Directors are seated and a compensation committee is formed to govern corporate salaries.



|                |  |              |  |        |         |          |       
|--------------- |  | ------------ |  | ------ | ------- | -------- | ------
|                |  | Compensation
|                |  | Year         |  | Salary |         | Other(1)
|John T. ONeill |  | 2009         |  | $      | 0       |          |       
|                |  | 2008         |  | $      | 0       |          |       
|                |  | 2007         |  | $      | 0       |          |       
|                |  |              | 
|John A. Grillo  |  | 2009         |  | $      | 109,672 |          | 13,754
|                |  | 2008         |  | $      | 139,248 |          | 13,105
|                |  | 2007         |  | $      | 124,677 |          | 12,686



|(1) | Compensation: Other includes certain health and life insurance benefits paid by the Company on behalf of the employee.
|--- | ------------------------------------------------------------------------------------------------------------------------

Employment Agreements

All employment arrangements with executives are on an at will basis.

Equity
Grants

The following tables set forth certain information regarding the stock options acquired by the Companys Chief
Executive Officer during the year ended October 31, 2009 and those options held by him on October 31, 2009.

Option Grants in the Last Fiscal Year



|             |  |                                            |  |                                                        |    |                         |     |                |  |                                                                                   |  |  
|------------ |  | ------------------------------------------ |  | ------------------------------------------------------ | -- | ----------------------- | --- | -------------- |  | --------------------------------------------------------------------------------- |  | -
|Name         |  | Number ofsecuritiesunderlyingoptiongranted |  | Percentof
totaloptionsgranted toemployeesin fiscalyear |    | ExercisePrice ($/share) |     | ExpirationDate |  | Potential realizablevalue at assumedannual rates ofappreciation of foroption term
|             |  |                                            |  |                                                        | 5% |                         | 10%
|John ONeill |  | 0                                          |  | N.A.                                                   |    | N.A.                    |     | N.A.           |  | 0                                                                                 |  | 0

Aggregated Fiscal Year-End Option
Values



|             |  |                                                                                            |  |                                                                               
|------------ |  | ------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------
|Name         |  | Number of securities underlyingunexercised options at fiscalyear-end (#) (All exercisable) |  | Value of unexercisedin-the-moneyoptions at fiscalyear-end ($)(All exercisable)
|John ONeill |  | 0                                                                                          |  | 0                                                                             



17



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##### Table of Contents

Remuneration of Directors

None of the members of the Board of Directors receives remuneration for service on the Board.



|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- | --------------------------------------------------------------

The following table sets forth information known with respect to the beneficial ownership of common stock as of the date of this prospectus by the following:

each shareholder known by the Company to own beneficially more than 5% of common stock;



| |  |  | John T. ONeill, Chief Executive Officer, and John A. Grillo, Chief Financial Officer
| | - |  | -------------------------------------------------------------------------------------



| |  |  | each director; and
| | - |  | ------------------



| |  |  | all directors and executive officers as a group.
| | - |  | ------------------------------------------------

There are 32,210,846 shares of common stock and no other equity securities outstanding on the date of this report. Except as otherwise indicated, it is believed that the beneficial owners of the common
stock listed below have sole voting power and investment power with respect to their shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange
Commission.



|                                                                |  |                                          |     |  |                           |  
|--------------------------------------------------------------- |  | ---------------------------------------- | --- |  | ------------------------- | -
|Name and Address of Beneficial Owner(1)                         |  | Amount and Natureof Beneficial Ownership |     |  | AggregatePercent of Class |  
|John & Deborah ONeill                                          |  | 14,151,862                               | (2) |  | 43.9                      | %
|John A. Grillo                                                  |  | 2,941,320                                |     |  | 9.1                       | %
|Current executive officers and directors as a group (4 persons) |  | 17,353,182                               |     |  | 53.0                      | %



|(1) | The address of each shareholder, unless otherwise noted, is c/o National Energy Services Company, Inc., 3153 Fire Road, Suite 2C, Egg Harbor Township, NJ 08234.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes 14,151,862 shares owned by Charter Management LLC, of which Mr. and Mrs. ONeill are the sole members and managers.
|--- | ----------------------------------------------------------------------------------------------------------------------------

Equity Compensation Plan Information

The information set forth in the table below regarding equity compensation plans (which include individual compensation arrangements) was determined as of October 31, 2009.



|                                                           |  |                                                                                         |  |                                                                          |  |                                                                                         
|---------------------------------------------------------- |  | --------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------
|                                                           |  | Number of securitiesto be issued uponexercise ofoutstanding options,warrants and rights |  | Weighted averageexercise price ofoutstanding options,warrants and rights |  | Number of securitiesremaining availablefor future issuanceunder equitycompensation plans
|Equity compensation plans approved by security holders     |  | 0                                                                                       |  |                                                                         |  | 0                                                                                       
|Equity compensation plans not approved by security holders |  | 0                                                                                       |  |                                                                         |  | 1,158,703                                                                               
|Total                                                      |  | 0                                                                                       |  |                                                                         |  | 1,158,703                                                                               



|(1) | The Board of Directors adopted the 2007 Equity Incentive Plan in 2007. The Plan authorizes the Board to issue up to 1,500,000 common shares during the ten year period
of the Plan. The shares may be awarded to employees or directors of National Energy Services or its subsidiaries as well as to consultants to those entities. The shares may be awarded as outright grants or in the form of options, restricted stock or
performance shares. 1,158,703 shares remain available for issuance under the plan.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



18



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##### Table of Contents

|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|-------- | ------------------------------------------------------------------------

Related Party Transactions

John ONeill and Debbie ONeill who are directors of the Company are also officers of Charter Management, LLC. To date, Charter Management has funded the Company an aggregate amount of $1,338,639.

Director Independence

None of the members of our Board of Directors are independent, as independent is defined in the rules of the NASDAQ National Market System:



|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES
|-------- | --------------------------------------

Audit Fees

Bagell, Josephs, Levine & Company, LLC billed $36,875 to the Company for professional
services rendered for the audit of fiscal 2008 financial statements and review of the financial statements included in fiscal 2008 filings. Bagell, Josephs, Levine & Company, LLC billed $27,200 to the Company for professional services
rendered for the audit of fiscal 2007 financial statements and review of the financial statements included in fiscal 2007 10-QSB filings.

Audit-Related Fees

Bagell, Josephs, Levine & Company, LLC billed $0 to the Company during fiscal 2008
for assurance and related services that are reasonably related to the performance of the 2008 audit or review of the quarterly financial statements. Bagell, Josephs, Levine & Company, LLC billed $17,600 to the Company during fiscal 2007 for
assurance and related services that are reasonably related to the performance of the 2007 audit or review of the quarterly financial statements.

Tax Fees

Bagell, Josephs, Levine & Company, LLC billed $19,274 to the Company during fiscal 2008 for
professional services rendered for tax compliance, tax advice and tax planning. Bagell, Josephs, Levine & Company, LLC billed $7,275 to the Company during fiscal 2007 for professional services rendered for tax compliance, tax advice and tax
planning.

All Other Fees

Bagell, Josephs, Levine & Company, LLC billed $0 to the Company in fiscal 2008 and $0 in fiscal 2007 for services not described above.



19



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##### Table of Contents

It is the policy of the Companys Board of Directors that all services, other than
audit, review or attest services, must be pre-approved by the Board of Directors, acting in lieu of an audit committee. All of the services described above were approved by the Board of Directors.

PART IV



|ITEM 15. | EXHIBITS
|-------- | --------



|       |  |                                                                                                                                                                                                               
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3-a    |  | Articles of Incorporation filed February 17, 1998. (1)                                                                                                                                                        
|       | 
|3-a(1) |  | Certificate of Amendment of Articles of Incorporation filed October 29, 2001. (1)                                                                                                                             
|       | 
|3-a(2) |  | Certificate of Amendment of Articles of Incorporation, effective as of November 20, 2006  filed as an exhibit to the Current Report on Form 8-K dated November 20, 2006 and
incorporated herein by reference.
|       | 
|3-b    |  | Bylaws. (1)                                                                                                                                                                                                   
|       | 
|10-a   |  | Master Agreement with Charter Management LLC. (2)                                                                                                                                                             
|       | 
|14     |  | Code of Ethics and Business Conduct - Filed as an exhibit to the Companys Annual Report on Form 10KSB for the year ended October 31, 2003 and incorporated herein by reference.                              
|       | 
|31.1   |  | Rule 13a-14(a) Certification  CEO                                                                                                                                                                            
|       | 
|31.2   |  | Rule 13a-14(a) Certification  CFO                                                                                                                                                                            
|       | 
|32     |  | Rule 13a-14(b) Certifications                                                                                                                                                                                 



|(1) | Filed as an exhibit to the Companys Registration Statement on Form 10-SB on November 14, 2002 and incorporated herein by reference.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(2) | Filed as an exhibit to the Companys Amended Registration Statement on Form 10-SB on November 6, 2003 and incorporated herein by reference.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------



20



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##### Table of Contents

NATIONAL ENERGY SERVICES COMPANY, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                           |  |         
|---------------------------------------------------------------------------------------------------------- |  | --------
|Reports of Independent Registered Public Accounting Firms                                                  |  | F2 - F3 
|                                                                                                           | 
|Consolidated Balance Sheets at October 31, 2009 and 2008                                                   |  | F4      
|                                                                                                           | 
|Consolidated Statements of Operations for the years ended October 31, 2009 and
2008                        |  | F5      
|                                                                                                           | 
|Consolidated Statements of Changes in Stockholders Deficit for the years ended October 
31, 2009 and 2008 |  | F6      
|                                                                                                           | 
|Consolidated Statements of Cash Flows for the years ended October 31, 2009 and
2008                        |  | F7 - F8 
|                                                                                                           | 
|Notes to Consolidated Financial Statements                                                                 |  | F9 - F19



F1



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##### Table of Contents

LOGO

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

National
Energy Services Company, Inc.

Egg Harbor Township, New Jersey

We have audited the accompanying consolidated balance sheet of National Energy Services Company, Inc. (the Company), as of October 31, 2009 and the related consolidated statement of
operations, changes in stockholders deficit and cash flows for the year ended October 31, 2009. The Companys management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

We conducted our audit in accordance with standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of National Energy Services Company, Inc., as of October 31, 2009 and the consolidated results of its operations and cash flows for the year ended October 31,
2009, in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has experienced substantial net losses for the year ended October 31, 2009 that has
resulted in substantial accumulated deficits. The Companys financial position and operating results raise substantial doubt about its ability to continue as a going concern. Managements plans with regard to these matters are also
described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Friedman LLP

Marlton, New Jersey

February 16, 2010



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BAGELL, JOSEPHS, LEVINE & COMPANY, L.L.C.

Certified Public Accountants

406 Lippincott Drive

Suite J

Marlton, New Jersey 08053

(856) 355-5900    Fax (856) 396-0022

REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

National Energy Services Company, Inc.

Egg Harbor
Township, New Jersey

The Board of Directors and Stockholders

National Energy Services Company, Inc.

Egg Harbor Township, New Jersey

We have audited the accompanying consolidated balance sheets of National Energy Services Company, Inc., as of October 31, 2008 and 2007 and the related
consolidated statements of operations, changes in stockholders deficit and cash flows for each of the years in the two-year period ended October 31, 2008. National Energy Services Company, Incs management is responsible for these
financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We
conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of National Energy Services Company, Inc., as of October 31, 2008 and 2007 and the consolidated
results of its operations and its cash flows for each of the years in the two-year period ended October 31, 2008 in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to
the consolidated financial statements, the Company has experienced substantial net losses for the years ended October 31, 2008 and 2007 that has resulted in substantial accumulated deficits. The Companys financial position and operating
results raise substantial doubt about its ability to continue as a going concern. Managements plans with regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Bagell Josephs, Levine & Company, LLC

Bagell Josephs, Levine & Company, LLC

Marlton, New Jersey

January 18, 2009

The report is a copy of the previously issued report.

The predecessor auditor has
not reissued the report.



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NATIONAL ENERGY SERVICES COMPANY, INC.

CONSOLIDATED BALANCE SHEETS OCTOBER 31, 2009 AND 2008



|                                                                                                                                                             |  |                 |            |   |                 |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------- | ---------- | - | --------------- | - | ---------- | -
|                                                                                                                                                             |  | OCTOBER 31,2009 |            |   | OCTOBER 31,2008 |  
|ASSETS                                                                                                                                                       |  |                 |            |   |                 |   |            |  
|Current Assets:                                                                                                                                              |  |                 |            |   |                 |   |            |  
|Cash                                                                                                                                                         |  | $               | 4,724      |   |                 | $ | 6,736      |  
|Accounts receivable, net                                                                                                                                     |  |                 | 71,954     |   |                 |   | 47,716     |  
|Notes receivable                                                                                                                                             |  |                 |           |   |                 |   | 59,158     |  
|Prepaid expenses and other current assets                                                                                                                    |  |                 | 28,985     |   |                 |   | 12,983     |  
|                                                                                                                                                             |  |                 |            |   |                 |   |            |  
|Total current assets                                                                                                                                         |  |                 | 105,663    |   |                 |   | 126,593    |  
|Property and equipment, net                                                                                                                                  |  |                 | 18,155     |   |                 |   | 17,687     |  
|                                                                                                                                                             |  |                 |            |   |                 |   |            |  
|TOTAL ASSETS                                                                                                                                                 |  | $               | 123,818    |   |                 | $ | 144,280    |  
|                                                                                                                                                             |  |                 |            |   |                 |   |            |  
|                                                                                                                                                             |  |                
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                                                        |  |                 |            |   |                 |   |            |  
|LIABILITIES                                                                                                                                                  |  |                 |            |   |                 |   |            |  
|Current Liabilities:                                                                                                                                         |  |                 |            |   |                 |   |            |  
|Long-term debt - current portion                                                                                                                             |  | $               |           |   |                 | $ | 65,125     |  
|Notes payable - other                                                                                                                                        |  |                 | 102,500    |   |                 |   | 59,158     |  
|Notes payable - Related parties                                                                                                                              |  |                 | 1,339,558  |   |                 |   | 1,115,617  |  
|Settlement liability                                                                                                                                         |  |                 | 437,020    |   |                 |   |           |  
|Accounts payable and accrued expenses                                                                                                                        |  |                 | 381,517    |   |                 |   | 513,059    |  
|                                                                                                                                                             |  |                 |            |   |                 |   |            |  
|TOTAL LIABILITIES                                                                                                                                            |  |                 | 2,260,595  |   |                 |   | 1,752,959  |  
|                                                                                                                                                             |  |                 |            |   |                 |   |            |  
|                                                                                                                                                             |  |                
|STOCKHOLDERS DEFICIT                                                                                                                                        |  |                 |            |   |                 |   |            |  
|Preferred stock, Series A, $.001 Par Value, 500,000 shares authorized, 0 shares and 0 shares issued and outstanding at
October 31, 2009 and October 31, 2008 |  |                 |           |   |                 |   |           |  
|                                                                                                                                                             |  |                
|Common Stock, $.001 Par Value; 150,000,000 shares authorized; 32,210,846 and 29,835,601 issued and outstanding October 31, 2009
and October 31, 2008         |  |                 | 32,211     |   |                 |   | 29,835     |  
|Additional Paid-in-Capital                                                                                                                                   |  |                 | 3,247,338  |   |                 |   | 3,186,703  |  
|Accumulated deficit                                                                                                                                          |  |                 | (5,416,326 | ) |                 |   | (4,825,217 | )
|                                                                                                                                                             |  |                 |            |   |                 |   |            |  
|Total Stockholders Deficit                                                                                                                                  |  |                 | (2,136,777 | ) |                 |   | (1,608,679 | )
|                                                                                                                                                             |  |                 |            |   |                 |   |            |  
|TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                                                  |  | $               | 123,818    |   |                 | $ | 144,280    |  
|                                                                                                                                                             |  |                 |            |   |                 |   |            |  

The accompanying notes are an integral part of these consolidated financial statements.



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NATIONAL ENERGY SERVICES COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008



|                                                              |  |                 |            |   |                 |   |            |  
|------------------------------------------------------------- |  | --------------- | ---------- | - | --------------- | - | ---------- | -
|                                                              |  | OCTOBER 31,2009 |            |   | OCTOBER 31,2008 |  
|OPERATING REVENUES                                            |  |                 |            |   |                 |   |            |  
|Equipment sales                                               |  | $               | 698,773    |   |                 | $ | 1,450,947  |  
|Management revenue                                            |  |                 | 12,693     |   |                 |   | 23,403     |  
|Energy management revenue                                     |  |                 | 33,400     |   |                 |   | 59,150     |  
|                                                              |  |                 |            |   |                 |   |            |  
|Total Operating Revenues                                      |  |                 | 744,866    |   |                 |   | 1,533,500  |  
|                                                              |  |                
|COST OF SALES                                                 |  |                 | 402,079    |   |                 |   | 781,668    |  
|                                                              |  |                 |            |   |                 |   |            |  
|GROSS PROFIT                                                  |  |                 | 342,787    |   |                 |   | 751,832    |  
|                                                              |  |                 |            |   |                 |   |            |  
|OPERATING EXPENSES                                            |  |                 |            |   |                 |   |            |  
|Selling expenses                                              |  |                 | 98,899     |   |                 |   | 333,019    |  
|General and administrative expenses                           |  |                 | 799,806    |   |                 |   | 1,104,057  |  
|Depreciation and amortization                                 |  |                 | 10,592     |   |                 |   | 9,363      |  
|                                                              |  |                 |            |   |                 |   |            |  
|Total Operating Expenses                                      |  |                 | 909,297    |   |                 |   | 1,446,439  |  
|                                                              |  |                 |            |   |                 |   |            |  
|LOSS FROM OPERATIONS                                          |  |                 | (566,510   | ) |                 |   | (694,607   | )
|                                                              |  |                 |            |   |                 |   |            |  
|Interest income                                               |  |                 |           |   |                 |   | 2,639      |  
|Interest expense                                              |  |                 | (24,599    | ) |                 |   | (21,348    | )
|                                                              |  |                 |            |   |                 |   |            |  
|NET LOSS                                                      |  | $               | (591,109   | ) |                 | $ | (713,316   | )
|                                                              |  |                 |            |   |                 |   |            |  
|LOSS PER COMMON SHARE, BASIC AND DILUTED                      |  | $               | (0.02      | ) |                 | $ | (0.02      | )
|                                                              |  |                 |            |   |                 |   |            |  
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED |  |                 | 30,866,348 |   |                 |   | 29,746,536 |  
|                                                              |  |                 |            |   |                 |   |            |  

The accompanying notes are an integral part of these consolidated financial statements.



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NATIONAL ENERGY SERVICES COMPANY, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS DEFICIT

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008



|                                             |  |                 |  |              |  |                          |  |                   |        |  |                    |           |  |       |          |   |  |   |            |   |  |   |            |  
|-------------------------------------------- |  | --------------- |  | ------------ |  | ------------------------ |  | ----------------- | ------ |  | ------------------ | --------- |  | ----- | -------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                             |  | Preferred Stock |  | Common Stock |  | AdditionalPaid-inCapital |  | PrepaidConsulting |        |  | AccumulatedDeficit |           |  | Total |         
|Description                                  |  | Shares          |  | Amount       |  | Shares                   |  | Amount            |        |  |                    |          
|Balance October 31, 2007                     |  |                |  |             |  | 29,424,698               |  | $                 | 29,424 |  | $                  | 3,123,264 |  | $     | (150,000 | ) |  | $ | (4,111,901 | ) |  | $ | (1,109,213 | )
|                                             |  |                 |  |              |  |                          |  |                  
|Issuance of common stock for services        |  |                |  |             |  | 121,618                  |  |                   | 122    |  |                    | 19,478    |  |       |         |   |  |   |            |   |  |   | 19,600     |  
|Issuance of common stock for compensation    |  |                |  |             |  | 150,000                  |  |                   | 150    |  |                    | 24,600    |  |       |         |   |  |   |            |   |  |   | 24,750     |  
|Amortization of prepaid consulting fees      |  |                |  |             |  |                         |  |                   |       |  |                    |          |  |       | 150,000  |   |  |   |            |   |  |   | 150,000    |  
|Issuance of stock for repayment of debt      |  |                |  |             |  | 139,285                  |  |                   | 139    |  |                    | 19,361    |  |       |         |   |  |   |            |   |  |   | 19,500     |  
|Net loss for the year ended October 31, 2008 |  |                |  |             |  |                         |  |                   |       |  |                    |          |  |       |         |   |  |   | (713,316   | ) |  |   | (713,316   | )
|                                             |  |                 |  |              |  |                          |  |                   |        |  |                    |           |  |       |          |   |  |   |            |   |  |   |            |  
|Balance October 31, 2008                     |  |                |  |             |  | 29,835,601               |  | $                 | 29,835 |  | $                  | 3,186,703 |  | $     |         |   |  | $ | (4,825,217 | ) |  | $ | (1,608,679 | )
|                                             |  |                 |  |              |  |                          |  |                   |        |  |                    |           |  |       |          |   |  |   |            |   |  |   |            |  
|                                             |  |                 |  |              |  |                          |  |                  
|Issuance of common stock for services        |  |                |  |             |  | 525,245                  |  |                   | 526    |  |                    | 34,985    |  |       |         |   |  |   |           |   |  |   | 35,511     |  
|Stock issued for subscription agreement      |  |                |  |             |  | 1,850,000                |  |                   | 1,850  |  |                    | 25,650    |  |       |         |   |  |   |           |   |  |   | 27,500     |  
|Net loss for year Ended October 31, 2009     |  |                |  |             |  |                         |  |                   |       |  |                    |          |  |       |         |   |  |   | (591,109   | ) |  |   | (591,109   | )
|                                             |  |                 |  |              |  |                          |  |                   |        |  |                    |           |  |       |          |   |  |   |            |   |  |   |            |  
|Balance October 31, 2009                     |  |                |  |             |  | 32,210,846               |  | $                 | 32,211 |  | $                  | 3,247,338 |  | $     |         |   |  | $ | (5,416,326 | ) |  | $ | (2,136,777 | )
|                                             |  |                 |  |              |  |                          |  |                   |        |  |                    |           |  |       |          |   |  |   |            |   |  |   |            |  

The accompanying notes are an integral part of these consolidated financial statements.



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NATIONAL ENERGY SERVICES COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008



|                                                                           |  |                 |          |   |                 |   |          |  
|-------------------------------------------------------------------------- |  | --------------- | -------- | - | --------------- | - | -------- | -
|                                                                           |  | October 31,2009 |          |   | October 31,2008 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                       |  |                 |          |   |                 |   |          |  
|Net Loss                                                                   |  | $               | (591,109 | ) |                 | $ | (713,316 | )
|                                                                           |  |                 |          |   |                 |   |          |  
|Adjustments to reconcile net loss to net cash used in operating activities |  |                 |          |   |                 |   |          |  
|                                                                           |  |                
|Depreciation                                                               |  |                 | 10,592   |   |                 |   | 9,363    |  
|Common stock issued for services                                           |  |                 | 35,511   |   |                 |   | 19,600   |  
|Common stock issued for compensation                                       |  |                 |         |   |                 |   | 24,750   |  
|Amortization of prepaid consulting fees                                    |  |                 |         |   |                 |   | 150,000  |  
|                                                                           |  |                
|Changes in assets and liabilities                                          |  |                 |          |   |                 |   |          |  
|(Increase) Decrease in accounts receivable                                 |  |                 | (24,238  | ) |                 |   | 218,021  |  
|(Increase) Decrease in prepaid expenses and other current assets           |  |                 | (16,002  | ) |                 |   | 5,380    |  
|Increase in accounts payable and accrued expenses                          |  |                 | 242,731  |   |                 |   | 18,915   |  
|(Decrease) in deferred revenues                                            |  |                 |         |   |                 |   | (82,370  | )
|                                                                           |  |                 |          |   |                 |   |          |  
|Net cash used in operating activities                                      |  |                 | (342,515 | ) |                 |   | (349,657 | )
|                                                                           |  |                 |          |   |                 |   |          |  
|                                                                           |  |                
|CASH FLOWS FROM INVESTING ACTIVITIES                                       |  |                 |          |   |                 |   |          |  
|Acquisition of property and equipment                                      |  |                 | (11,060  | ) |                 |   |         |  
|                                                                           |  |                 |          |   |                 |   |          |  
|Net cash provided by investing activities                                  |  |                 | (11,060  | ) |                 |   |         |  
|                                                                           |  |                 |          |   |                 |   |          |  
|                                                                           |  |                
|CASH FLOWS FROM FINANCING ACTIVITIES                                       |  |                 |          |   |                 |   |          |  
|Repayments on note payable - bank                                          |  |                 | (2,378   | ) |                 |   | (28,571  | )
|Principal payments on long - term debt                                     |  |                 |         |   |                 |   | (58,412  | )
|Proceeds from notes receivable - other                                     |  |                 | 59,158   |   |                 |   | 153,525  |  
|Repayments of notes payable - other                                        |  |                 | (59,158  | ) |                 |   | (153,525 | )
|Proceeds from notes payable - related party                                |  |                 | 223,941  |   |                 |   | 160,809  |  
|Proceeds from note payable - other                                         |  |                 | 102,500  |   |                 |   |         |  
|Issuance of common stock                                                   |  |                 | 27,500   |   |                 |   |         |  
|                                                                           |  |                 |          |   |                 |   |          |  
|Net cash provided by financing activities                                  |  |                 | 351,563  |   |                 |   | 73,826   |  
|                                                                           |  |                 |          |   |                 |   |          |  
|                                                                           |  |                
|NET (DECREASE) IN CASH                                                     |  |                 | (2,012   | ) |                 |   | (275,831 | )
|                                                                           |  |                
|CASH - BEGINNING OF YEAR                                                   |  |                 | 6,736    |   |                 |   | 282,567  |  
|                                                                           |  |                 |          |   |                 |   |          |  
|CASH - END OF YEAR                                                         |  | $               | 4,724    |   |                 | $ | 6,736    |  
|                                                                           |  |                 |          |   |                 |   |          |  

The accompanying notes are an integral part of these consolidated financial statements.



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NATIONAL ENERGY SERVICES COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008



|                                                  |  |                 |        |                 |   |       
|------------------------------------------------- |  | --------------- | ------ | --------------- | - | ------
|                                                  |  | October 31,2009 |        | October 31,2008
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |  |                 |        |                 |   |       
|                                                  |  |                
|CASH PAID DURING THE PERIOD FOR:                  |  |                 |        |                 |   |       
|Interest expense                                  |  | $               | 18,367 |                 | $ | 15,912
|                                                  |  |                 |        |                 |   |       
|                                                  |  |                
|SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:    |  |                 |        |                 |   |       
|Common stock issued for services                  |  | $               | 35,511 |                 | $ | 19,600
|                                                  |  |                 |        |                 |   |       
|Common stock issued for compensation              |  | $               |       |                 | $ | 24,750
|                                                  |  |                 |        |                 |   |       
|Common stock issued for repayment of debt         |  | $               |       |                 | $ | 19,500
|                                                  |  |                 |        |                 |   |       

The accompanying notes are an integral part of these
consolidated financial statements.



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NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008

NOTE 1 - NATURE OF BUSINESS

National Energy Services Company, Inc. (NES) was incorporated on February 17, 1998 in Nevada as Coastal
Enterprises, Inc. to engage in an internet-related business. The Company and National Energy Services Company, Inc., an unaffiliated New Jersey corporation formed in late 1995 (NESNJ), entered into an Agreement and Plan of Share
Exchange, dated October 19, 2001, pursuant to which the shareholders of NESNJ on October 19, 2001 were issued 10,000,000 shares of common stock of NES, par value $0.001 in exchange for one hundred percent (100%) of the issued and
outstanding shares of NESNJ, which became a wholly owned subsidiary of the Company. NESNJ operates the sales and service program of the Company. For accounting purposes, the transaction was accounted for as a reverse acquisition under the purchase
method of accounting.

The Company is engaged in the business of marketing a comprehensive energy management program for long-
term care and hospitality facilities. The program features an upgrade to lighting fixtures, improved heating, venting and air conditioning (HVAC) equipment, and ozone laundry support systems (OLSS). The facilities generally
recover the cost of these renovations through the monthly energy savings, resulting in no out-of-pocket costs to the facility.

In February of 2007, the Company began to offer an additional service. It provides telecommunications services to further assist in reducing its clients operating expenses. The Company is not affiliated with any one-service provider
and is able to quote from various sources. This allows the Company to obtain the best solution for improving service quality for its customer.

The Company entered into a agreement to purchase an alternative energy construction management contract on January 21, 2010 as filed on Form 8-K on January 26, 2010. agreement required the
officers and directors to resign except John ONeill remained as a director and a new CEO, Secretary and director were seated. The CEO, Dr. John G Kalogeris is in search of additional directors and officers and business expansion
opportunities. A complete business plan and the determination of existing products and programs to be continued will be completed by the end of February 2010. Many of the current product offerings are feasible and usable in the construction
management business as all are energy efficient and therefore green as mandated in the construction management offerings. A change of voting control will take place on March 1, 2010 when all agreement and escrow terms have been
completed.



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NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008

NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant inter-company
accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.

Going Concern

As shown in the accompanying consolidated financial statements, the Company incurred substantial net losses for the years
ended October 31, 2009 and 2008 and has sustained large accumulated deficits as well as negative cash flows from operations that raise substantial doubt about the Companys ability to continue as a going concern.

The Companys future success is dependent upon its ability to achieve profitable operations and management states that they are
confident that they can improve operations and raise the appropriate funds needed through the advancements in energy conservation over the past year. There is no guarantee whether the Company will be able to generate enough revenue and/or raise
capital to support those operations

The consolidated financial statements do not include any adjustments that might result
from the outcome of these uncertainties.

Revenue Recognition

The Company receives revenues according to agreements with its customers. Revenue is recognized when products are shipped or services are
rendered, evidence of a contract exists, the price is fixed or reasonably determinable, and collectability is reasonably assured.



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NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008

NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)

Property and Equipment

All property and equipment are recorded at cost and depreciated over their estimated useful lives, generally three, five or seven years,
using the straight-line method. Upon sale or retirement, the costs and related accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance
charges, which do not increase the useful lives of the assets, are charged to operations as incurred.

Income Taxes

The Company utilizes ASC 740, Income Taxes, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences
between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Loss Per Share of Common Stock

Historical net loss per common share is computed using the weighted
average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents are not
included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for the periods presented.

The following is a reconciliation of the computation for basic and diluted EPS:



|                                                     |  |                 |            |   |                 |   |            |  
|---------------------------------------------------- |  | --------------- | ---------- | - | --------------- | - | ---------- | -
|                                                     |  | October 31,2009 |            |   | October 31,2008 |  
|Net Loss                                             |  | $               | (591,109   | ) |                 | $ | (713,316   | )
|                                                     |  |                 |            |   |                 |   |            |  
|Weighted-average common shares outstanding (Basic)   |  |                 | 30,866,348 |   |                 |   | 29,746,536 |  
|Weighted-average common stock equivalents:           |  |                 |            |   |                 |   |            |  
|Stock options and warrants                           |  |                 |           |   |                 |   |           |  
|                                                     |  |                 |            |   |                 |   |            |  
|Weighted-average common shares outstanding (Diluted) |  |                 | 30,866,348 |   |                 |   | 29,746,536 |  
|                                                     |  |                 |            |   |                 |   |            |  



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NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008

NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)

Options and warrants outstanding to purchase stock were not included in the
computation of diluted EPS in 2009 and 2008 because inclusion would have been anti-dilutive. There were 1,000,000 options and warrants available at October 31, 2009 and 2008.

Fair Value of Financial Instruments

The carrying amount reported in the consolidated balance sheets for cash, accounts receivable, notes receivable, accounts payable, accrued expenses and notes payable approximate fair value because of the
immediate or short-term maturity of these financial instruments.

Advertising

Costs of advertising and marketing are expensed as incurred. Advertising and marketing costs were $1,667 and $15,371 for the years ended
October 31, 2009 and 2008, respectively.

Reclassification

Certain reclassifications were made to the October 31, 2008 consolidated financial statements to conform with the 2009
presentation. These had no effect on net loss or cash flow for the year ended October 31, 2008.

Subsequent Events

The Company evaluates Subsequent Events through the time of the filing of this Form 10-K on February 16, 2010. The Company
is not aware of any other significant events that would have a material impact on our consolidated financial statements. See NOTE - 12 below.

Recent Accounting Pronouncements

On May 28, 2009, FASB issued
ASC 855, Subsequent Events. The objective of this statement is to establish general standards of accounting for disclosure of events that occur after the balance sheet date but before financial statements are issued or available
to be issued. ASC 855 is not expected to have a material impact on the financial reporting of the Company.

In June 2009, the
Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 168, The FASB Accounting Standards Codification (ASC) 105 (formerly Statement of Financial Accounting Standards No. 168)
will become the single source of authoritative nongovernmental U.S. generally accepted account principals (GAAP), superseding existing FASB, America Institute of Certified Public Accountants (AICPA), Emerging Issues Task
Force (EITF), and related accounting literature. ASC 105 reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure. Also included is relevant Securities and
Exchange Commission guidance organized using the same topical structure in separate sections. ASC 105 will be effective for financial statements issued for reporting periods that end after September 15, 2009. All future referenced to
authoritative accounting literature in our financial statements issued for reporting periods that end after September 15, 2009 will be referenced in accordance to ASC 105.



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##### Table of Contents

NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008

NOTE 3- PROPERTY AND EQUIPMENT

Property and Equipment consist of the following at October 31, 2009 and 2008:



|                         |  |      |         |   |      |   |         |  
|------------------------ |  | ---- | ------- | - | ---- | - | ------- | -
|                         |  | 2009 |         |   | 2008 |  
|Office equipment         |  | $    | 67,982  |   |      | $ | 56,922  |  
|Furniture and fixtures   |  |      | 2,107   |   |      |   | 2,107   |  
|Leasehold improvements   |  |      | 2,900   |   |      |   | 2,900   |  
|                         |  |      |         |   |      |   |         |  
|                         |  |      | 72,989  |   |      |   | 61,929  |  
|                         |  |     
|Accumulated Depreciation |  |      | (54,834 | ) |      |   | (44,242 | )
|                         |  |      |         |   |      |   |         |  
|Total                    |  | $    | 18,155  |   |      | $ | 17,687  |  
|                         |  |      |         |   |      |   |         |  

Depreciation expense was $10,592 and $9,363 for the years ended October 31, 2009 and 2008.

NOTE 4- FAIR VALUE MEASUREMENTS

On January 1, 2008, the Company adopted ASC 820 which defines fair value measurement guidelines and the Company believes its application provides a consistent framework for measuring fair value under
Generally Accepted Accounting Principles and expands fair value financial statement disclosure requirements. ASC 820s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from
independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:

Level 1 Inputs- Quoted prices for identical instruments in active markets. Level 2 Inputs- Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in
markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 Inputs- Instruments with primarily unobservable value drivers.



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NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008

NOTE 4- FAIR VALUE MEASUREMENTS
(continued)

The following table represents the fair value hierarchy for those financial assets and
liabilities measured at fair value on a recurring basis as of October 31, 2009.



|                              |  |         |   |         |   |           |  |   |  
|----------------------------- |  | ------- | - | ------- | - | --------- |  | - | -
|                              |  | Level 1 |   | Level 2 |   | Level 3  
|Assets                        |  |         |   |         |   |           |  |   |  
|Notes Receivable              |  | $       | 0 |         | $ | 0         |  | $ | 0
|                              |  |         |   |         |   |           |  |   |  
|Total Assets                  |  | $       | 0 |         | $ | 0         |  | $ | 0
|                              |  |         |   |         |   |           |  |   |  
|                              |  |         |  
|Liabilities                   |  |         |   |         |   |           |  |   |  
|Notes Payable                 |  | $       | 0 |         | $ | 102,500   |  | $ | 0
|Notes Payable Related Parties |  |         | 0 |         |   | 1,339,558 |  |   | 0
|Long Term Debt                |  |         | 0 |         |   | 0         |  |   | 0
|                              |  |         |   |         |   |           |  |   |  
|Total Liabilities             |  | $       | 0 |         | $ | 1,442,058 |  | $ | 0
|                              |  |         |   |         |   |           |  |   |  



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NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

OCTOBER 31, 2009 AND 2008



NOTE 5 - DEBT

The Company had a $200,000 note, which carried an
interest rate of the issuing banks prime rate plus 1% (6.00% at October 31, 2008). The loan was originally a line of credit when acquired in February 2004, and converted into a 4-year loan. As of October 31, 2008 the balance was
$2,377 which was classified as current. The loan was secured by substantially all corporate assets and a shareholder/officer guarantee. The loan was repaid in 2009.

Debt also consists of residual liabilities arising from the Companys now-terminated financing arrangements with PPL Spectrum, Inc. (PPL). In prior fiscal years, PPL provided financing to
the Companys clients in connection with the Companys Energy Gatekeeper Program. Under its arrangement with PPL, the Company executed notes payable to PPL for the amount of the financing, and took notes receivable from the client in like
amount.

Effective March 1, 2005, the Company entered into an agreement with PPL in which the Company assigned the client
notes to PPL, and PPL released the Company from liability under its notes to PPL. That transaction reduced the Companys assets by $3,062,257, the amount of the notes assigned to PPL, and reduced the Companys liabilities by the same
amount, representing the Companys obligation on the note released by PPL. At the same time, however, the Company contracted to pay $1,400 per month toward a reserve for any bad debts among the notes it assigned to PPL. The Company has recorded
the present value of that obligation on its balance sheet as a debt.

Additionally, the Company has also contracted to fund a
contingent liability to reimburse PPL for bad debts of certain customers should the customer file for protection in bankruptcy. The agreement was consummated in June 2005, and the Company became obligated to fund $140,709 over a ten (10) year
period. This obligation carries an imputed interest rate of 6%.

During its 2004 fiscal year, the Company entered into a
settlement agreement with PPL with respect to certain aged obligations from the Company to PPL. The payables were consolidated into a three-year promissory note in the amount of $314,047 bearing interest at 18% per annum. Effective
March 1, 2005, this note was renegotiated to lower the interest rate to 8%. The balance due on the note at March 1, 2005 was $219,473 payable over seven years.

On August 4, 2009 PPL Spectrum Inc. commenced a legal action against the Company entitled PPL Spectrum, Inc. and PPL Energy Services Holdings, LLC. v. National Energy Services Company,
Inc. the action in Common pleas Court in the County of Lehigh, State of Pennsylvania (Civil Action No. 2009-C-4006.



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NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

OCTOBER 31, 2009 AND 2008



NOTE 5 - DEBT (continued)

The complaint alleges that National
Energy Services has failed to make payments due to PPL Spectrum, and demands damages in the amount of $435,745. National Energy Services, Inc. received a judgment in favor of PPL Spectrum on October 14, 2009. The Company accrued $1,275 interest
from October 14, 2009 to October 31, 2009 in accordance with the terms of the judgment, bringing the liability to $437,020,

NOTE
6 - RELATED PARTY TRANSACTIONS

Notes Payable

Charter Management, LLC has funded the operations of the Company. Charter is related to the Company through common ownership. The balance of
the payable to Charter is $1,339,558 and $1,115,617 as of October 31, 2009 and 2008, respectively.

In addition, Charter
Management, LLC has provided financing for the Companys various customers. The Company records the various receivables from the customers and a corresponding payable to the related party and acted as an agent for collection and payment for/to
the related party. Initially, the Company had consulted FIN 45 for clarification as to the proper recording and inclusion of these amounts in the financial statements. However, the Company had signed separate financing agreements with the related
party, thereby negating the exception for exclusion of the amounts. These notes receivable/payable range from between 4 and 5 years with an interest rate between 8% and 9%. The outstanding balance at October 31, 2009 and 2008 is $0 and $59,158.

NOTE 7 - STOCKHOLDERS DEFICIT

During the year ending October 31, 2009, the following transactions occurred:

On January 9, 2009 the Company issued 425,245 shares, with a fair market value of $30,511 to an investor relation agent for services performed.

On February 18, 2009, the Company issued 100,000 shares, with a fair market value of $5,000 paid for services.

On March 11, 2009, the Company issued 350,000 shares for $17,500 in cash in four separate subscription agreements.

On July 29, 2009, the Company issued 1,500,000 shares for $10,000 in cash in a subscription agreement.



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NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

OCTOBER 31, 2009 AND 2008



NOTE 7 - STOCKHOLDERS (DEFICIT) (cont.)

During the year
ending October 31, 2008, the following transactions occurred:

On November 2, 2007 and January 17, 2008 the
Company issued 75,000 and 75,000 shares, with a market value of $.19 and $.14 respectively per share, to an employee as part of an employment agreement. The total fair market value is $24,750.

On January 17, 2008, the Company issued 15,000 shares, with a fair market value of $2,100, to an investor relation agent for services to
be performed over one year.

On January 17, 2008, the Company issued 139,285 shares of common stock, with a fair market
value of $.14 per share to repay the related part debt of $19,500.

On February 4, 2008 the Company issued 44,118 shares,
with a fair market value of $7,500, to an investor relation agent for services performed in January 2008.

On April 10,
2008 the Company issued 62,500 shares, with a fair market value of $10,000, to an investor relation agent for services performed in February 2008.

NOTE 8 - COMMITMENTS

Leases - Office

The Company currently leases its New Jersey office space on a month to month lease. Payments under this lease were $24,000 and $23,342 for
the years ended October 31, 2009 and 2008, respectively.

The Company also has various lease agreements for certain office
equipment, expiring in 2012. Payments under these leases were $4,110 and $7,948 for the years ended October 31, 2009 and 2008, respectively.

The Company is leasing an upgrade to its sales management software. The lease was signed on July 22, 2007 and expires in 2012. Payments under this lease were $5,125 and $4,851 for the years ended
October 31, 2009 and 2008, respectively.

Future lease commitments at October 31, 2009:



|                  |  |   |       
|----------------- |  | - | ------
|2010              |  | $ | 20,263
|2011              |  |   | 8,263 
|2012              |  |   | 5,807 
|                  |  |   |       
|Total lease costs |  | $ | 34,333
|                  |  |   |       



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NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

OCTOBER 31, 2009 AND 2008



NOTE 9 - PROVISION FOR INCOME TAXES

The Company utilizes ASC 740,
Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income
taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the
periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

NOTE 10 - LEGAL

On
August 4, 2009 PPL Spectrum Inc. commenced a legal action against the Company entitled PPL Spectrum, Inc. and PPL Energy Services Holdings, LLC. v. National Energy Services Company, Inc., a New Jersey corporation the action in
Common Pleas Court in the County of Lehigh, State of Pennsylvania (Civil Action No. 2009-C-4006. The complaint alleges that National Energy Services has failed to make payments due to PPL Spectrum, and demands damages in the amount of $435,745.
National Energy Services, Inc. received a judgment in favor of PPL Spectrum on October 14, 2009. The Company has accrued interest in the amount of $1,275 from October 14 through October 31, 2009 bringing the reported balance to
$437,020.

On December 17, 2009, Nutek International, Inc. filed for an injunction to enjoin an employee of National
Energy Services Company, Inc., a New Jersey corporation from continuing the services of the employee. The Company believes that the suit has no merit as the employee resigned from the subsidiary December 22, 2009.

NOTE 11 - MAJOR CUSTOMERS AND SUPPLIERS

Major Customers

In the year ended October 31, 2009 we had a customer who
provided $150,000 or 20% and another who provided $81,717 or 11% of our sales during the year ended October 31, 2009.

Major Suppliers

During the year ended October 31, 2009 one supplier accounted for 18% of purchases.



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NATIONAL ENERGY SERVICES COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

OCTOBER 31, 2009 AND 2008



NOTE 12 - SUBSEQUENT EVENTS

On January 21, 2010 the Company
acquired a contract to manage the construction of solar/thermal site in California as evidenced by a Form 8K filed with the Securities and Exchange Commission on January 29, 2010. The acquisition agreement required the current management to
transfer to the seller 13,000,000 of the common shares they held and the Company to provide a 10,000 shares Series B Convertible Preferred Stock with a value of $400,000 and a voting preference as if it held 50.1% of the outstanding votes of the
Company.

The agreement also required the resignation of all current officers and directors and the placement of a new director
and officer to operate the Company.

Further requirements cause the shares for the transaction to be placed in escrow until all
sales tax debts are paid or have been negotiated for payment and the payment of certain debts to prior management and a counsel to the Company have been paid on or before March 1, 2010. When these requirements are met the Company will have a
reduction in the notes payable - related parties to $400,000 that is expected to result in a reduction of debt of approximately $940,000 that will be reported in the first quarter of fiscal year 2010.

The sales operations related to ozone laundry of our New Jersey subsidiary ceased in January 2010. Management has not determined which of the
businesses that have operated in this subsidiary might be continued.

The new business model is being developed that will
incorporate various opportunities to participate in green building projects, alternative energy production and related equipment sales.

Pro-forma information for the operations discontinued in 2010 were as follows for the years ended October 31,



|                   |  |      |         |   |      |   |         |  
|------------------ |  | ---- | ------- | - | ---- | - | ------- | -
|                   |  | 2009 |         |   | 2008 |  
|Operating Revenues |  | $    | 276,217 |   |      | $ | 756,272 |  
|Cost of Sales      |  |      | 211,639 |   |      |   | 451,128 |  
|Operating Expenses |  |      | 119,346 |   |      |   | 372,827 |  
|Net Loss           |  |      | (54,768 | ) |      |   | (67,683 | )



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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



National Energy Services Company, Inc.By:

/s/ John G. KalogerisJohn G. Kalogeris, Chief Executive Officer


In accordance with the Exchange Act, this Report has been signed below on February 16, 2010 by the following persons, on behalf of the Registrant and in the capacities and on the dates indicated.



|                            
|----------------------------
|/s/ John G. Kalogeris       
|John G. Kalogeris, Director,
|Chief Executive Officer,    
|                            
|/s/ John G. Kalogeris       
|John G. Kalogeris, Director,
|Chief Financial Officer,