UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 16, 2017 (January 30, 2017)

 

Aly Energy Services, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

033-92894

75-2440201

(State of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

 

3 Riverway, Suite 920

Houston, Texas 77056

(Address of principal executive offices)

 

Registrant’s telephone number, including area code: 713-333-4000

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
 
 

Introductory Note: Aly Energy Services, Inc. has not filed any periodic reports under the Securities Exchange Act of 1934, as amended, since its report on Form 10-Q for the quarter ended March 31, 2016 and subsequent reports on Form 8-K dated May 23, May 26 and August 10, 2016. The Company intends to file all delinquent reports during 2017. The purpose of this Report on Form 8-K is to provide summary information to the Company’s stockholders regarding the material developments that have occurred since the most recently filed reports.

 

Item 1.01 Entry into a Material Definitive Agreement

 

In the last Report on Form 8-K, filed August 10, 2016, we had reported that we were not in compliance with certain financial covenants under our credit agreement with Wells Fargo Bank and had entered into a forbearance agreement with the lender, pursuant to which the lender agreed to a forbearance period expiring August 31, 2016. During August 2016, Tiger Finance, LLC (“Tiger”) commenced negotiations with Wells Fargo Bank for the purchase of our obligations under the credit agreement and the outstanding capital leases in favor of Wells Fargo’s equipment finance affiliate (collectively the “Aly Senior Obligations”). Although the forbearance period expired on August 31, 2016, Wells Fargo Bank continued to forebear from the exercise of any creditor remedies pending the resolution of its negotiations with Tiger.

 

On October 26, 2017, Tiger acquired the Aly Senior Obligations from Wells Fargo Bank. Simultaneously, Tiger entered into an assignment agreement with Permian Pelican, LLC (“Pelican”), a newly formed entity organized by certain of the Company’s principal stockholders. Tiger agreed to sell the Aly Senior Obligations to Pelican on the conditions that (i) Pelican provide up to $500,000 of unsecured working capital financing to the Company pending the closing and (ii) the Company transfer to Tiger (in consideration of Tiger’s reduction of the Aly Senior Obligations in the amount of $2 million) certain excess equipment and vehicles which the Company was not utilizing and did not consider as necessary for its operations. As part of this transaction and upon satisfaction of such conditions, Tiger extended the forbearance period to December 9, 2016.

 

On December 12, 2016, Pelican acquired the Aly Senior Obligations from Tiger. As the new holder of the Aly Senior Obligations, Pelican further extended the forbearance period for the Aly Senior Obligations to January 31, 2017, provided that the Company was successful in completing a recapitalization transaction (the “Recap”) prior to that date consisting of the following:

 

· Exchange of the Aly Operating preferred stock, Aly Centrifuge preferred stock, Aly Centrifuge subordinated debt and liability for a contingent payment into approximately 10% of our common stock on a fully diluted basis

 

 

· Pelican’s contribution of approximately $16.1 million of the Aly Senior Obligations into shares of Aly Energy convertible preferred stock that represents approximately 80% of our common stock on a fully diluted basis.

 

 

· Amendment of the remaining Aly Senior Obligations into a new credit agreement (consisting of a $5.1 million term loan and $1.0 million revolving credit arrangement) with an extended maturity date of December 31, 2018.

 

 
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Effective January 31, 2017, we completed the Recap as outlined above through the execution and delivery of a Securities Exchange Agreement and a Second Amended and Restated Credit Agreement.

 

Item 3.02 Unregistered Sales of Equity Securities

 

Effective January 31, 2017, we issued 7,111,981 shares of our common stock to the former holders of Aly Operating preferred stock, Aly Centrifuge preferred stock, Aly Centrifuge subordinated debt, and liability for contingent payment (a total of six persons). We also issued 16,092 shares of our preferred stock to Pelican as described in Item 1.01 above. The issuance of such shares was exempt from registration pursuant to the provisions of Section 4(2) of the Securities Act.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

We had previously reported that Christopher Quinn was elected as Chief Restructuring Officer on August 5, 2016 in connection with fulfilling our obligations under the Wells Fargo forbearance agreement. Mr. Quinn resigned from such role upon completion of the sale of the Aly Senior Obligations to Tiger and such officer position was eliminated.

 

Effective December 31, 2016, Mark Patterson’s employment agreement, as our President and Chief Operating Officer, was not renewed and his employment with the Company and its subsidiaries ceased.

 

Effective December 12, 2016, Nadine Smith resigned as a member of our board of directors.

 

On January 30, 2017 and in contemplation of the closing of the Recap, our board of directors implemented the following changes:

 

· Shauvik Kundagrami was elected Chief Executive Officer and a member of the board of directors; provided that, the effective date of his election as Chief Executive Officer will be determined at a later date, but prior to May 1, 2017.

 

 

· Micki Hidayatallah will serve as Chief Executive Officer until the effective date of Mr. Kundagrami’s election to the position. Mr. Hidayatallah will remain Executive Chairman of the Board.

 

 

· Ali Afdhal resigned as a member of the board of directors but will continue to assist the Company as an emeritus director.

 

 

· Bryan Dutt was added to the board of directors.

 

 

· Greg Price was elected as Chief Operating Officer.

 

 
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Shauvik Kundagrami, 53 years of age, has served as co-head of the energy group at RBC for the prior 10 years.

 

Bryan Dutt, 57 years of age, is the Founder and President of Ironman Energy Capital Management, LLC, which he founded in 1999. Ironman has three SEC registered private partnership funds which specialize in upstream energy securities.

 

Greg Price, 65 years of age, has served as a Special Advisor to the CEO of the Company since April 2016. Previously, from 2005 to 2016, Mr. Price served in various positions, including President of Directional Drilling Services and President of Rental Tubular Division, at Allis-Chalmers Energy Inc., which was acquired in 2011 and subsequently named Archer.

 

Item 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year

 

On February 10, 2017, we filed a certificate of designation to our certificate of incorporation to set forth the rights, preferences and designations of the series of preferred stock of the Company issued to Pelican in connection with the consummation of the Recap. A copy of this filing appears as Exhibit 3.1 to this Report on Form 8-K.

 

Item 8.01. Other Events.

 

We operate in the commodity-driven, cyclical oil and gas industry. From 2011 through mid-2014, the industry operated in an environment where crude oil prices were relatively stable and, except for comparatively short intervals, generally traded at prices at, or in excess of, $100 per barrel. During the second half of 2014, oil prices declined dramatically resulting in a significant reduction in the land-based drilling rig count in the United States. The downward trend in both oil prices and rig count continued throughout 2015 and into 2016. Many oil and natural gas exploration and production companies, including our customers, reduced their drilling-related activity and simultaneously sought and received significant price reductions from us and our competitors during this time. As such, we were faced with sharp declines in both utilization and pricing. Revenues for the year ended December 31, 2016 declined significantly compared to revenues for the year ended December 31, 2015 due primarily to decreased activity and pricing. In 2016, our decision to exit the directional drilling business and temporarily reduce our presence in the northeast to achieve operational efficiencies also contributed to the decline in revenues year-over-year.

 

During mid-2016, we began to see the price of oil and the drilling rig count stabilize and then slowly increase. In conjunction with these changes, we began to see increases in the demand for and utilization of our equipment, particularly equipment related to our surface rental product line. Although our activity level has picked up since mid-2016, we have not been able to significantly increase pricing to our customers and, in some cases, we have cut pricing even further to retain business.

 

Despite significant declines in revenue in 2016 when compared to 2015, we were successful at improving the efficacy of our sales organization, operating more efficiently, and implementing multiple rounds of cost cuts. We worked with multiple advisors during 2016, including Greg Price who has subsequently been appointed as President and Chief Operating Officer, to focus continuously on cost cutting initiatives. By the end of 2016, we had cut variable costs and fixed costs significantly by reducing headcount and fixed salaries, among other things.

 

 
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When comparing the fourth quarter of 2016 to the first quarter of 2016, revenues declined almost 50%, but the decline in revenue was more than offset by a decrease in variable and fixed costs (excluding the impact of non-cash and non-recurring items). We meaningfully decreased our cost of services as a percentage of revenue and we decreased selling, general and administrative expenses, excluding non-cash and non-recurring items, by over 50%. Although we have seen significant improvements in certain financial measures during the second half of 2016 when compared to the first half of 2016, market conditions are still depressed and there is no assurance that conditions will continue to improve.

 

Our cash balance as of January 31 was approximately $0.6 million. In addition, we have incremental borrowing availability of approximately $0.2 million under our revolving line of credit. The terms of our new credit agreement include minimal monthly interest payments and only require principal payments when free cash flow is available. In addition, the credit facility has no financial covenants, which makes it highly likely we will stay in compliance with our credit agreement even if market conditions do not improve further.

 

Due to the pick-up in activity we are experiencing, a meaningful reduction in cost structure, and a restructured balance sheet, we believe that our cash flow from operations in 2017 will be sufficient to make interest payments on our indebtedness, fund our working capital needs and fund required capital expenditures. However, there is still a significant amount of uncertainty related to market conditions and there is no assurance that we will retain our current level of activity.

 

Micki Hidayatallah, the Chairman and CEO of the Company stated: “In 2016, Aly Energy felt the impact of the greatest and longest recession in oilfield activity in the last 20 years. We stayed true to our vision and survived the intense volatility of the cycle. We initiated a 3-prong strategy of cutting costs, maintaining market share, and preserving liquidity.

 

We never sought protection from our creditors through a bankruptcy proceeding and, thanks to the loyal support of our investors, a related party was formed to buy our senior secured debt and leases from Tiger. In conjunction with this transaction, we simplified our balance sheet through the conversion of all outstanding preferred stock, subordinated debt and contingency payments into common equity. Today, all of our debt is held by a related party and we have cash in the bank to meet our commitments in 2017 even if we do not see further improvements in the market until 2018. In 2018, we believe that our customers’ costs will be lowered sufficiently by new technology which will result in increased activity in all forms of drilling, completion and production in the domestic shale basins.

 

Our long-term business strategy still includes growth through the acquisition of other businesses. Currently, we believe that there are numerous acquisition candidates which would be attractive to us and would add value to the Company and we are considering all of these options.

 

It is a great privilege for me to be part of the management of Aly Energy and I want to thank the entire management team and all our dedicated and committed employees for their integrity and, most of all, their loyalty. The acquisition of the senior secured debt and capital leases by a related party and the financial restructuring of the Company would not have been possible without the determination and creativity of the entire Aly Energy team.”

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

3.1 Certificate of Designation of Preferred Stock

 

 
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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Aly Energy Services, Inc.

Dated: February 16, 2017

By:

/s/ Alya Hidayatallah

Name:

Alya Hidayatallah

Title:

Chief Financial Officer

 

 

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EXHIBIT 3.1

 

 

CERTIFICATE OF DESIGNATIONS OF

SERIES A CONVERTIBLE PREFERRED STOCK

OF ALY ENERGY SERVICES, INC.

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware, Aly Energy Services, Inc., a Delaware corporation (the “ Company ”), does hereby certify that:

 

A. the Certificate of Incorporation of the Company authorizes the Board of Directors of the Corporation to issue shares of preferred stock in one or more series with such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as are stated and expressed in the resolutions of the Board of Directors providing for the issue thereof, in accordance with Section 151 of the General Corporation Law of the State of Delaware.

 

B. On January 30, 2017, the Board of Directors of the Company has duly approved and adopted the following resolution on January 30, 2017 setting forth the designations of the Series A Preferred Stock of the Company, and the resolution was adopted by all necessary action on the part of the Company:

 

RESOLVED , that pursuant to the authority vested in the Board of Directors by the Certificate of Incorporation and Section 151 of the Delaware General Corporation Law, the Board of Directors does hereby designate, create, authorize and provide for the issue of a series of 20,000 shares of Preferred Stock, par value $.001 per share, having the designations, preferences, relative, participation, options and other special rights and the qualifications, limitations and restrictions thereof that are set forth in the Certificate of Incorporation and in this resolution as follows:

 

Section 1. Designation . The designation of the series of Preferred Stock is “Series A Convertible Preferred Stock” (the “ Series A Preferred Stock ”). Each share of the Series A Preferred Stock shall be identical in all respects to every other share of the Series A Preferred Stock. The Series A Preferred Stock shall be subordinate, and rank junior in right of payment, to all indebtedness of the Company and may only receive payments pursuant to this Certificate of Designations as provided for herein.

 

Section 2. Number of Shares . The authorized number of shares of Series A Preferred Stock shall be 20,000. Shares of Series A Preferred Stock that are redeemed, purchased or otherwise acquired by the Company, or converted into another series of Preferred Stock, shall revert to authorized but unissued shares of Preferred Stock ( provided that any such cancelled shares of Series A Preferred Stock may be reissued only as shares of any series other than Series A Preferred Stock).

 

 
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Section 3. Definitions . As used herein with respect to the Series A Preferred Stock:

 

“ Board of Directors ” shall mean the board of directors of the Company.

 

“ Bylaws ” shall mean the amended bylaws of the Company in effect on the date hereof, as they may be amended from time to time.

 

“ Business Day ” shall mean a day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which banking institutions in New York, New York generally are authorized or obligated by law, regulation or executive order to close.

 

“ Capital Stock ” shall mean any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by the Company.

 

“ Certificate of Designations ” shall mean this Certificate of Designations relating to the Series A Preferred Stock, as it may be amended from time to time.

 

“ Certificate of Incorporation ” shall have the meaning ascribed to it in the recitals hereof.

 

“ Close of Business ” shall mean 5:00 p.m., New York City time, on any Business Day.

 

“ Common Stock ” shall mean the common stock, $.001 par value, of the Company.

 

“ Company ” shall have the meaning ascribed to it in the recitals.

 

“ Conversion Price ” shall mean the quotient of (i) $1,000 divided by (ii) the Conversion Rate.

 

“ Conversion Rate ” shall mean 3,332.64, subject to adjustment as set forth in Section 8.

 

“ Junior Stock ” shall mean the Common Stock and any other class or series of stock of the Company that ranks junior to the Series A Preferred Stock (1) as to the payment of dividends or (2) as to the distribution of assets on any liquidation, dissolution or winding up of the Company, or both.

 

“ Liquidation Preference ” shall mean $1,000 per share of Series A Preferred Stock.

 

“ Person ” shall mean any individual, company, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization, government or agency or political subdivision thereof or any other entity.

 

“ Preferred Stock ” shall mean any and all series of preferred stock of the Company, including the Series A Preferred Stock.

 

“ Qualified Public Offering ” means an underwritten public offering of Common Stock of the Company which such provide net proceeds to the Company of at least $20 million or such other event which results in the listing of the Common Stock of the Company on a nationally recognized securities exchange.

 

 
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“ Record Date ” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract, this Certificate of Designations or otherwise).

 

“ Series A Preferred Stock ” shall have the meaning ascribed to it in Section 1.

 

“ Trading Day ” shall mean any Business Day on which the Common Stock is traded, or able to be traded, on the principal national securities exchange on which the Common Stock is listed or admitted to trading.

 

Section 4. Dividends .

 

No dividends (other than dividends payable solely in Junior Stock) shall be paid or declared and set apart for payment on any Junior Stock, and no payment shall be made on account of the purchase, redemption, retirement, or other acquisition of Junior Stock (other than acquisitions thereof pursuant to employee or director incentive or benefit plans or arrangements, or in exchange solely for Junior Stock), at any time that the Series A Preferred Stock is outstanding.

 

Section 5. Liquidation Rights .

 

(a) Voluntary or Involuntary Liquidation . In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, holders of the Series A Preferred Stock shall be entitled to receive for each share of Series A Preferred Stock, out of the assets of the Company or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the Company, and after satisfaction of all liabilities and obligations to creditors of the Company, before any distribution of such assets or proceeds is made to or set aside for the holders of Junior Stock, an amount equal to the Liquidation Preference per share of the Series A Preferred Stock. To the extent such amount is paid in full to all holders of Series A Preferred Stock, the holders of other Capital Stock of the Company shall be entitled to receive all remaining assets of the Company (or proceeds thereof) according to their respective rights and preferences.

 

(b) Partial Payment . If in connection with any distribution described in Section 5(a) above the assets of the Company or proceeds thereof are not sufficient to pay the Liquidation Preferences in full to all holders of Series A Preferred Stock, the amounts paid to the holders of Series A Preferred Stock shall be paid pro rata in accordance with the respective aggregate Liquidation Preferences of the holders of Series A Preferred Stock.

 

 
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(c) Merger, Consolidation and Sale of Assets Not Liquidation . For purposes of this Section 5, the merger or consolidation of the Company with any other corporation or other entity, including a merger or consolidation in which the holders of Series A Preferred Stock receive cash, securities or other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the Company, shall not constitute a liquidation, dissolution or winding up of the Company.

 

Section 6. Voting Rights .

 

The holders of shares of Series A Preferred Stock shall be entitled to vote with the holders of the Common Stock on all matters submitted to a vote of stockholders of the Company, except as otherwise provided herein or by applicable law. Each holder of shares of Series A Preferred Stock shall be entitled to the number of votes equal to the largest number of whole shares of Common Stock into which all shares of Series A Preferred Stock held of record by such holder could then be converted pursuant to Section 7 at the Record Date for the determination of the stockholders entitled to vote on such matters or, if no such Record Date is established, at the date such vote is taken or any written consent of stockholders is first executed. The holders of shares of Series A Preferred Stock shall be entitled to notice of any stockholders’ meeting in accordance with the bylaws of the Company.

 

Section 7. Conversion .

 

(a) Optional Conversion . Each share of Series A Preferred Stock may be converted on any date, from time to time, at the option of the holder thereof, into the number of shares of Common Stock equal to the Conversion Rate in effect at such time. The right of conversion attaching to any shares of Series A Preferred Stock may be exercised by the holders thereof by delivering the shares to be converted to the office of the Company, accompanied by a duly signed and completed notice of conversion in form reasonably satisfactory to the Company. The conversion date shall be the date on which the shares of Series A Preferred Stock and the duly signed and completed notice of conversion are received by the Company. The Person entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Stock as of such conversion date, and such Person or Persons shall cease to be a record holder of the Series A Preferred Stock on that date. As promptly as practicable on or after the conversion date (and in any event no later than three Trading Days thereafter), the Company shall issue the number of whole shares of Common Stock issuable upon conversion, with any fractional shares (after aggregating all Series A Preferred Stock being converted on such date) rounded down to whole shares. Such delivery shall be made, at the option of the applicable holder, in certificated form or by book-entry. Any such certificate or certificates shall be delivered by the Company to the appropriate holder on a book-entry basis or by mailing certificates evidencing the shares to the holders at their respective addresses as set forth in the conversion notice.

 

 
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(b) Mandatory Conversion . Upon the consummation of a Qualified Public Offering, each share of Series A Preferred Stock will automatically be converted into the number of shares of Common Stock equal to the Conversion Rate in effect at such time. The conversion date shall be the date on which such offering has been consummated. The Person entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Stock as of such conversion date, and such Person or Persons shall cease to be a record holder of the Series A Preferred Stock on that date. As promptly as practicable on or after the conversion date (and in any event no later than three Trading Days thereafter), the Company shall issue the number of whole shares of Common Stock issuable upon conversion, with any fractional shares (after aggregating all Series A Preferred Stock being converted on such date) rounded down to whole shares. Such delivery shall be made, at the option of the applicable holder, in certificated form or by book-entry. Any such certificate or certificates shall be delivered by the Company to the appropriate holder on a book-entry basis or by mailing certificates evidencing the shares to the holders at their respective addresses as set forth in the stock records of the Company.

 

(c) Reservation of Common Stock . Commencing as promptly as practicable prior to the consummation of a Qualified Public Offering or other conversion of the Series A Preferred Stock, the Company shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon the conversion of the Series A Preferred Stock, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all of the shares of Series A Preferred Stock then outstanding. Any shares of Common Stock issued upon conversion of Series A Preferred Stock shall be (i) duly authorized, validly issued and fully paid and nonassessable, (ii) shall rank pari passu with the other shares of Common Stock outstanding from time to time and (iii) shall be approved for listing on the principal national securities exchange on which the Common Stock is listed or admitted to trading.

 

(d) Transfer Taxes . The Company shall pay any and all taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of Series A Preferred Stock. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the Series A Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.

 

Section 8. Dilution Adjustments . In the event the outstanding shares of Common Stock shall be subdivided by stock split, stock dividend, reclassification or otherwise, into a greater number of shares of Common Stock or the Company declares a dividend payable in any right to acquire Common Stock for no consideration, the Conversion Rate immediately prior to such event shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Common Stock shall be combined or consolidated by reclassification or otherwise into a lesser number of shares of Common Stock, the Conversion Rate then in effect shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 8, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Series A Preferred Stock a certificate setting forth such adjustment or readjustment (as well as the corresponding adjustment in the Conversion Rate) and showing in detail the facts upon which such adjustment or readjustment is based.

 

 
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Section 9. Record Holders . To the fullest extent permitted by applicable law, the Company may deem and treat the record holder of any share of the Series A Preferred Stock as the true and lawful owner thereof for all purposes, and the Company shall not be affected by any notice to the contrary.

 

Section 10. Notices . All notices or communications in respect of the Series A Preferred Stock shall be sufficiently given if given in writing and delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Certificate of Incorporation or Bylaws or by applicable law or regulation.

 

Section 11. Replacement Certificates . The Company shall replace any mutilated certificate at the holder’s expense upon surrender of that certificate to the Company. The Company shall replace certificates that become destroyed, stolen or lost at the holder’s expense upon delivery to the Company of reasonably satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Company.

 

***********************

 
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IN WITNESS WHEREOF, ALY ENERGY SERVICES, INC. has caused this certificate to be signed by Alya Hidayatallah, its Chief Financial Officer, this February 10, 2017.

 

  Aly Energy Services, Inc.
       
By:

 

 

Alya Hidayatallah  
    Chief Financial Officer  
       

 

 
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