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ALY ENERGY SERVICES, INC. FILES (8-K/A) Disclosing Financial Statements and Exhibits

June 25, 2014

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired

Unaudited Condensed Balance Sheet as of March 31, 2014 and 2013

Unaudited Condensed Statements of Operations for the three months ended March

31, 2014 and 2013

Unaudited Condensed Statement of Members' Equity for the three months ended

March 31, 2014 and 2013

Unaudited Condensed Statements of Cash Flows for the three months ended March

31, 2014 and 2013

Notes to Unaudited Condensed Financial Statements for the three months ended

March 31, 2014 and 2013 (b) Pro Forma Financial Information



Unaudited Pro Forma Condensed Consolidated Balance Sheet of Aly Energy

Services, Inc. as of March 31, 2014

Unaudited Pro Forma Condensed Consolidated Statement of Income of Aly Energy

Services, Inc. for the three months ended March 31, 2014

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements of Aly

Energy Services, Inc. 2

-------------------------------------------------------------------------------- UNITED CENTRIFUGE USA, LLC CONDENSED FINANCIAL STATEMENTS FOR THE PERIOD ENDING MARCH 31, 2014 C O N T E N T S Page Condensed Balance Sheets 5 Condensed Statements of Operations 6



Condensed Statements of Members' Equity 7

Condensed Statements of Cash Flows 8



Notes to Condensed Financial Statements 9- 13

3 --------------------------------------------------------------------------------

UNITED CENTRIFUGE USA, LLC CONDENSED BALANCE SHEETS March 31, December 31, 2014 2013 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 155,841$ 456,216 Accounts receivable 2,800,565 1,975,152 Unbilled receivables 513,690 716,462 Prepaid expenses and deposits 119,589 15,200 Advances to related parties 34,778 103,549 TOTAL CURRENT ASSETS 3,624,463 3,266,579 PROPERTY, PLANT AND EQUIPMENT, net 2,187,666 2,039,050 TOTAL ASSETS $ 5,812,129$ 5,305,629 LIABILITIES AND MEMBERS' EQUITY CURRENT LIABILITIES Line of credit $ 500,000$ 472,000 Accounts payable and accrued expenses 642,849



778,171

Advances from related parties 1,452,595



1,417,780

Current portion of long-term debt 236,857



314,519

Current portion of capital lease obligations 84,914



75,410

TOTAL CURRENT LIABILITIES 2,917,215



3,057,880

LONG-TERM DEBT, net of current portion 618,607



618,607

CAPITAL LEASE OBLIGATIONS, net of current portion 218,513 209,685 TOTAL LIABILITIES 3,754,335 3,886,172



COMMITMENTS AND CONTINGENCIES

MEMBERS' EQUITY 2,057,794



1,419,457

TOTAL LIABILITIES AND MEMBERS' EQUITY $ 5,812,129$ 5,305,629 See notes to condensed financial statements. 4

-------------------------------------------------------------------------------- UNITED CENTRIFUGE USA, LLC CONDENSED STATEMENTS OF OPERATIONS Three Months Ended March 31, 2014 2013 (Unaudited) (Unaudited) SALES $ 4,105,263$ 2,188,221 COST OF SERVICES 3,213,690 2,197,227 GROSS PROFIT (LOSS) 891,573 (9,006 ) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 237,746 113,617 INCOME (LOSS) FROM OPERATIONS 653,827 (122,623 ) INTEREST EXPENSE 9,370 53 INCOME (LOSS) BEFORE INCOME TAX EXPENSE 644,457 (122,676 ) STATE INCOME TAXES 6,120 - NET INCOME (LOSS) $ 638,337$ (122,676 ) See notes to condensed financial statements. 5 -------------------------------------------------------------------------------- UNITED CENTRIFUGE USA, LLC CONDENSED STATEMENTS OF MEMBERS' EQUITY Balance, January 1, 2014 $ 1,419,457 Net income 638,337 Balance, March 31, 2014 $ 2,057,794 See notes to condensed financial statements. 6 -------------------------------------------------------------------------------- UNITED CENTRIFUGE USA, LLC CONDENSED STATEMENTS OF CASH FLOWS Three Months Ended March 31, 2014 2013 (Unaudited) (Unaudited)



CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) $ 638,337$ (122,676 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation 74,357 39,021 Changes in operating assets and liabilities: Accounts receivable (825,413 ) (1,455,308 ) Unbilled receivables 202,772 228,150 Advances to/from related parties 103,586 1,181,909 Prepaid expenses and deposits (104,389 ) (1,500 ) Accounts payable and accrued expenses (135,322 ) 257,805 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES



(46,072 ) 127,401

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property and equipment (186,366 ) (58,912 ) NET CASH USED IN INVESTING ACTIVITIES



(186,366 ) (58,912 )

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from line of credit 28,000 - Repayments of long-term debt (77,662 ) - Repayments of capital lease obligations (18,275 ) - NET CASH USED IN FINANCING ACTIVITIES (67,937 ) - NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (300,375 ) 68,489 CASH AND CASH EQUIVALENTS, beginning of period 456,216 753 CASH AND CASH EQUIVALENTS, end of period $



155,841 $ 69,242

SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the year for interest $



19,044 $ -

Purchase of equipment through capital leases $ 36,600 $ - See notes to condensed financial statements. 7

-------------------------------------------------------------------------------- UNITED CENTRIFUGE USA, LLC NOTES TO CONDENSED FINANCIAL STATEMENTS MARCH 31, 2014 AND 2013



NOTE A - ORGANIZATION AND NATURE OF BUSINESS

United Centrifuge, USA, LLC ("United" or the "Company"), was incorporated as a limited liability corporation in the State of Texas on February 28, 2012 and provides centrifuge equipment and rental services to oil and natural gas exploration and production companies in North Dakota, Wyoming, Texas, Oklahoma, Ohio and Pennsylvania.



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: The accompanying condensed financial statements of the Company have not been audited by the Company's independent registered public accounting firm, except that the balance sheet at December 31, 2013 is derived from audited financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for fair presentation have been included. These condensed financial statements have been prepared pursuant to the rules and regulations of the American Institute of Certified Public Accountants for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. Therefore, these condensed financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 2013. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. Cash and Cash Equivalents: For the purpose of the condensed statement of cash flows, the Company includes all short term investments purchased with original maturities of three months or less as of the date of the purchase as cash equivalents. Accounts Receivable: Accounts receivable represent amounts due from customers. Accounts receivable are recognized at invoiced amounts, net of allowance, and do not bear interest. The Company uses its best estimate to determine the required allowance for doubtful accounts based on a variety of factors, including the length of time the receivables are past due, economic trends, and conditions affecting its customer base. Specific provisions are recorded for individual receivables when the Company becomes aware of a customer's inability to meet financial obligations. The Company reviews the adequacy of its allowance annually. Receivables balances greater than 30 days past due are individually reviewed for collectability and if deemed uncollectible; are charged off against the allowance account after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $0 as of March 31, 2014 and December 31, 2013. Property, Plant and Equipment: Property, plant and equipment are recorded at cost, less accumulated depreciation and any impairment. Maintenance and repairs which do not improve or extend the life of the related assets are charged to expense when incurred. Refurbishments and renewals are capitalized when the value of the equipment is enhanced for an extended period. When property and equipment is sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operating income. 8

-------------------------------------------------------------------------------- UNITED CENTRIFUGE USA, LLC NOTES TO CONDENSED FINANCIAL STATEMENTS MARCH 31, 2014 AND 2013



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The cost of property and equipment currently in service is depreciated on a straight-line basis over their estimated useful lives. Major classifications of property and equipment and their estimated useful lives are as follows:

Estimated Useful Lives Centrifuge equipment 7 years Furniture and fixtures 5 years Leasehold improvements Remaining life of lease Office computers 3-4 years Trailers 3-4 years Trucks under capital lease 3-4 years Impairment of Long-lived Assets: The carrying values of long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of the asset by estimating the undiscounted future net cash flows expected to result from the asset, including eventual disposition. If the undiscounted future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value. No impairment loss has been recognized for the three months ended March 31, 2014 or March 31, 2013. Revenue Recognition: The Company provides rental equipment and oilfield services to its customers at per-day contractual rates. Revenue is recognized when it is realized or realizable and collectability is reasonably assured. As disclosed in Note G, the Company has negotiated a revenue and cost sharing agreement with related parties for the rental of certain centrifuge equipment not owned by the Company; however, all revenue is recognized as described above. Income Taxes: The Company has elected under the Internal Revenue Code and related state provisions to be a flow through entity. In lieu of corporate income taxes, the members of a limited liability company are taxed on their proportionate share of the Company's taxable income. Therefore, no provision or liability for federal income taxes has been included in the condensed financial statements.



The Company is subject to a tax mandated by the State of Texas based on a defined calculation of gross margin (the "margin tax"). The margin tax is calculated by applying a tax rate to a base that considers both revenue and expenses and therefore has the characteristics of an income tax.

Use of Estimates: The preparation of condensed 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 revenues and expenses during the period, the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements. Actual results could differ from those estimates. 9 -------------------------------------------------------------------------------- UNITED CENTRIFUGE USA, LLC NOTES TO CONDENSED FINANCIAL STATEMENTS MARCH 31, 2014 AND 2013



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentrations of Credit Risk: Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. The Company maintains cash with one financial institution which, at times, exceed federally insured limits. The Company monitors the financial condition of the banks and has experienced no losses associated with the accounts. The Company is not party to any financial instruments which would have off-balance sheet credit or interest rate risk.



NOTE C - PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consist of the following:

March 31, December 31, 2014 2013 (Unaudited) Centrifuge equipment $ 2,010,214$ 1,828,069 Furniture and fixtures 10,574 10,574 Leasehold improvements 10,655 10,654 Office computers 9,184 9,184 Trailers 3,990 3,990 Trucks under capital lease 327,073 290,474 2,371,690 2,152,945



Less: accumulated depreciation and amortization (184,024 ) (113,895 )

Property, plant and equipment, net $ 2,187,666 $



2,039,050

Depreciation expense was $74,357 and $39,021 for the three months ended March 31, 2014 and 2013, respectively.

NOTE D - LINE OF CREDIT

The Company maintains an operating line of credit of $500,000, is due August 30, 2014 and bears interest at a floating rate of the Wall Street Journal ("WSJ") prime rate plus 1.5% per annum (4.75% at March 31, 2014). As of March 31, 2014 and December 31, 2013, the balance was $500,000 and $472,000, respectively, and the line of credit and term loan (Note E) are secured by a general security agreement on all the assets of the Company. The Company is required to maintain certain financial ratios and other affirmative and negative covenants as described in the line of credit and term loan agreements. As of March 31, 2014 the Company was in compliance with the credit agreements, except for the requirement that the Company receive written consent from the financial institution prior to entering into capital lease agreements. The Company received a waiver of this covenant on April 2, 2014. 10 -------------------------------------------------------------------------------- UNITED CENTRIFUGE USA, LLC NOTES TO CONDENSED FINANCIAL STATEMENTS MARCH 31, 2014 AND 2013



NOTE E - LONG-TERM DEBT

Long-term debt consists of the following:

March 31, December 31, 2014 2013 (Unaudited) Term loan payable in monthly blended installments of $29,495, bearing interest at a fixed rate of WSJ prime rate plus 1.75% per annum (5% at December 31, 2013), maturing September 2016. $ 855,464$ 933,126 Less: current portion (236,857 ) (314,519 ) $ 618,607$ 618,607



NOTE F - CAPITAL LEASE OBLIGATIONS

The Company accounts for certain long-term lease transactions related to the financing of various equipment as capital leases. Capital lease obligations reflect the present value of future rental payments, less an interest amount implicit in the lease. A corresponding amount is capitalized as property and equipment, and amortized over the individual asset's estimated useful life. Depreciation of assets under capital lease obligations is included in depreciation and amortization expense and amounted to $19,332 and $0 for the three months ended March 31, 2014 and 2013, respectively. Future minimum lease payments required under the capital leases are as follows: March 31, December 31, 2014 2013 (Unaudited) Various capital leases payable in monthly installments of $6,072, including interest at a rate of 3.775% per annum, maturing between January and February 2018, secured by trucks. $ 303,427$ 285,095 Less: current portion (84,914 ) (75,410 ) $ 218,513$ 209,685 11

-------------------------------------------------------------------------------- UNITED CENTRIFUGE USA, LLC NOTES TO CONDENSED FINANCIAL STATEMENTS MARCH 31, 2014 AND 2013



NOTE F - CAPITAL LEASE OBLIGATIONS (Continued)

The assets held under capital leases are as follows:

March 31, December 31, 2014 2013 (Unaudited) Capitalized costs $ 327,073$ 290,474 Less: accumulated depreciation (24,871 ) (5,539 ) Net book value $ 302,202$ 284,935



NOTE G - RELATED PARTY TRANSACTIONS

The Company conducted transactions with entities related by common control in the normal course of operations and are measured at their exchange amount, which represents the amount of consideration established and agreed to by the related parties.



The Company negotiated a revenue and cost sharing agreement with certain entities related by common control by which revenues earned on certain centrifuge equipment owned by such related parties is split on a 60%/40% basis to the related parties and Company, respectively.

Purchases from related parties of the Company totaled approximately $1,478,000 and $496,000 for the three months ended March 31, 2014 and 2013, respectively. Sales to related parties totaled approximately $35,000 and $0 for the three months ended March 31, 2014 and 2013, respectively. Advances to related parties of the Company totaled approximately $35,000 and $103,000 at March 31, 2014 and December 31, 2013, respectively. Advances from related parties of the Company totaled approximately $1,452,000 and $1,418,000 at March 31, 2014 and December 31, 2013, respectively.



NOTE H - COMMITMENTS AND CONTINGENCIES

Contractual Commitments - The Company has numerous contractual commitments in the ordinary course of business including debt service requirements and operating leases. The Company leases land and other facilities from an affiliate and leases equipment from non-affiliates, which expire through 2018.



Litigation - The Company is subject to certain claims arising in the ordinary course of business. Management does not believe that any claims will have a material adverse effect on the Company's financial position or results of operations.

NOTE I - SUBSEQUENT EVENTS

On April 11, 2014, all the Company outstanding stock was purchased by Aly Energy Services, Inc.

12 --------------------------------------------------------------------------------

ALY ENERGY SERVICES, INC. UNAUDITED PRO FORMA FINANCIAL STATEMENTS INTRODUCTION On April 16, 2014, Aly Energy Services, Inc. (the "Company", "we", "us" or "our") filed a Current Report on Form 8-K (as amended by the report on 8-k/A filed on May 16, 2014, the "Original Report"), reporting, among other things, the entry into an Asset Purchase, Stock Purchase and Merger Agreement (the "Centrifuge Acquisition Agreement"), dated as of April 11, 2014, by and among the Company, Aly Centrifuge Inc., (a newly formed subsidiary of the Company), United Centrifuge USA, LLC ("United"), United Oilfield, Inc. ("UOI"), Canadian Nitrogen Services Ltd. ("CNS"), and various affiliates of United and the consummation of the transaction contemplated in the Centrifuge Acquisition Agreement on April 15, 2014. Pursuant to the Centrifuge Acquisition Agreement, we acquired the business conducted by United in the solids control and fluids management sectors of the oilfield services and rental equipment industry for a purchase price of approximately $25 million, as further described in the Original Report. The transaction ("United Acquisition") consisted of the purchase of certain assets used by United that were owned by UOI and CNS, the purchase of certain of the membership interests of United and the merger of United with and into Aly Centrifuge Inc. The following are the unaudited pro forma condensed consolidated financial statements of Aly Energy Services, Inc. ("we," "us" or "our") as of and for the three months ended March 31, 2014. The unaudited pro forma condensed consolidated balance sheet assumes that the United Acquisition occurred as of March 31, 2014. The unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 2014 assumes that the United Acquisition occurred on January 1, 2014. These transaction adjustments are presented in the notes to the unaudited pro forma condensed consolidated



financial statements. Unaudited pro forma consolidated financial statements as of and for the year ended December 31, 2013 are set forth in the Original Report.

The pro forma financial statements reflect the following transactions:

the United Acquisition for which the total purchase price is consideration

for two simultaneous transactions: o our acquisition of the business conducted by United in the solids control and fluids management sectors of the oilfield services and rental equipment industry reflected in the columns labeled United Centrifuge, LLC on the pro forma balance sheet and income statement, and o our purchase of certain assets used by United that were owned by UOI and CNS reflected in the columns labeled Asset Purchase from UOI and CNS



our borrowings of $25.0 million under an amended and restated credit

facility to fund a portion of the purchase price of the United Acquisition

and to repay borrowings under the initial credit facility our issuance of preferred stock of Aly Centrifuge Inc. as part of the consideration for the United Acquisition; and,



our obligation to pay up to $5.0 million of contingent consideration based

upon the revenues of United for each of the 12 month periods ending on March 31, 2015, 2016 and 2017. The unaudited pro forma condensed consolidated balance sheet and unaudited pro forma condensed consolidated statement of operations were derived by adjusting our historical financial statements. The adjustments are based on currently available information and certain estimates and assumptions and, therefore, the actual adjustments may differ from the pro forma adjustments. However, management believes that the adjustments provide a reasonable basis for presenting the significant effects of the transactions. The unaudited pro forma condensed consolidated financial statements do not purport to present our financial position or results of operations had the United Acquisition actually been completed as of the dates indicated. Moreover, the statements do not project our financial position or results of operations for any future date or period. 13

-------------------------------------------------------------------------------- Aly Energy Services, Inc. Unaudited Pro Forma Condensed Consolidated Balance Sheet As of March 31, 2014 (in thousands, except for share and per share amounts) Aly Energy Aly Energy Services, Inc. United Asset Purchase Services, Inc. Historical Centrifuge, LLC from UOI and CNS Adjustments Pro Forma Assets Current Assets Cash and Cash Equivalents $ 984 $ 156 $ (156 ) (A) (830 ) (B) Accounts Receivable, Net of Allowance for Doubtful Accounts of $117 3,438 2,801 6,239 Unbilled Receivables 1,138 514 1,652 Inventory 58 - 58 Advances to Related Parties - 35 35 Prepaid Expenses and Other Current Assets 454 120 574 Total Current Assets 6,072 3,626 (986 ) 8,712 . . .


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