Aly Energy Services, Inc. (OTCMKTS:ALYE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
In our report on Form 8-K dated February 16, 2017, we reported
that we had entered into a Second Amended and Restated Credit
Agreement with Permian Pelican, LLC, our majority stockholder,
consisting of a $5.1 million term loan and a $1.0 million
revolving credit arrangement, with an extended maturity date of
December 31, 2018.
We subsequently amended the new credit agreement to add a capital
expenditures facility of up to $500,000. Each advance under this
facility must be for the sole purpose of financing the purchase
of equipment that, on the date of purchase, has a useful life of
at least two years. Further, the amount of each advance (i) if
the proceeds thereof are to be applied to fund or refinance the
purchase of equipment from a vendor selling such equipment as
part of its inventory cannot exceed 80% of the net invoiced cost
of such equipment, and (ii) if the proceeds thereof are to be
applied to fund or refinance the purchase of equipment from a
person other than a vendor selling such equipment as part of its
inventory, may not exceed 80% of the net orderly liquidation
value of such equipment.
Effective May 23, 2017, we further amended the new credit
agreement to increase the maximum revolving credit amount from
$1.0 million to $1.75 million. Borrowings under the revolving
line are limited to the lesser of such maximum amount or 80% of
our eligible accounts receivable.
The capital expenditure facility and increased revolving credit
facility will add to the Companys liquidity to fund growth. We
intend to use the capital expenditure facility to fund the
expansion of the Companys rental inventory to meet increasing
customer demand. Similarly, the expanded revolving credit
facility will help support the Companys growing working capital
needs as its revenue base increases.
The interest rate for borrowings under the credit agreement are 6
month LIBOR 3% per annum. Interest is paid monthly on the last
business day of each month. The principal amount of the
borrowings under the credit agreement are due on December 31,
2018. However, the Company is required to prepay the term loan
portion in an amount equal to 50% of the excess cash flow (as
defined in the credit agreement) for the year ending December 31,
2017 (such prepayment due on the earlier of (i) the date which is
60 days after the end of such year or (ii) if applicable, the
date on which our independent auditors have completed their
review of our financial statements for such year).
The obligations under the credit agreement are guaranteed by all
of our subsidiaries and secured by substantially all of our
assets. The credit agreement contains customary events of default
and covenants including restrictions on our ability to incur
additional indebtedness, make capital expenditures, pay dividends
or make other distributions, grant liens and sell assets.
About Aly Energy Services, Inc. (OTCMKTS:ALYE)
Aly Energy Services, Inc. provides oilfield services, including surface equipment rental, solids control services and directional drilling services, to exploration and production companies. The Company provides a range of oilfield services to owners and operators of oil and gas wells. The Company offers services under various categories, including surface rental equipment, solids control systems, and directional drilling and measurement-while-drilling (MWD) services. The Company’s equipment and services are primarily designed for and used in land-based horizontal drilling. Its equipment includes centrifuges and auxiliary solids control equipment, mud circulating tanks (MCTs) and auxiliary surface rental equipment, portable mud mixing plants, containment systems, and MWD kits. The Company services the Permian Basin (in Texas and New Mexico), Eagle Ford Shale, Utica Shale, Marcellus Shale, Woodford Shale, Granite Wash, Mississippian Lime and Tuscaloosa Marine Shale. Aly Energy Services, Inc. (OTCMKTS:ALYE) Recent Trading Information
Aly Energy Services, Inc. (OTCMKTS:ALYE) closed its last trading session 00.0000 at 0.0800 with 1,000 shares trading hands.