UNITED STATES
SECURITIES ANDEXCHANGECOMMISSIONWashington,D.C.20549
FORM 8-K
CurentReport
Pursuant to Section 13 or 15(d) ofThe Securities Exchange Act of1934
Date of Report (Date of earliestevent reported): August 5, 2015
National Energy Services, Inc.
(Exact nameof registrant as specified in its charter)
| Nevada | 000-53755 | 26-1639141 |
(Stateor other jurisdiction
of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
8965 S Eastern Ave. Ste 120E, Las Vegas, NV 89123
(Address of principal executive offices) (zip code)
(877)871-6400
(Registrant's telephonenumber, including area code)
Checkthe appropriate box below if the Form 8-K filing is intended to simultaneously satisfy thefiling obligation ofthe registrant under any ofthe following provisions:
☐Written communicationspursuant to Rule425 under theSecurities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under theExchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b)underthe ExchangeAct (17CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c)underthe Exchange Act (17 CFR240.13e-4(c))
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On August 5, 2015, management of National Energy Services, Inc. (the “Company”) concluded that it is necessary to amend and restate the unaudited condensed consolidated financial statements, including the notes thereto, included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 (the “Q1 2015 Form 10-Q”) and that such financial statements should no longer be relied upon due to the incorrect valuation of certain intangible assets of the Company’s subsidiary, JD Field Services (“JD”), that the Company acquired in February 2014.
In the unaudited condensed consolidated financial statements included in the Company’s Q1 2015 Form 10-Q, the Company reported its re-calculation of the fair value of the acquisition of JD based on a valuation report of certain intangible assets and the retrospective adjustment of the previously reported fair values. However, subsequent to the filing of the Q1 2015 Form 10-Q, the Company discovered that a number of the valuation metrics in the valuation report required amendment which ended up having a material impact on the intangible asset valuation performed, including in particular the customer relationships, requiring correction of the previously issued valuation of intangible assets in the unaudited condensed consolidated financial statements included in the Q1 2015 Form 10-Q.
The Company anticipates that it will file its amended Q1 2015 Form 10-Q to (i) restate the unaudited condensed consolidated financial statements for the quarter ended March 31, 2015 and 2014, (ii) correct the measurement period re-calculation of the fair value of the JD business acquisition at February 24, 2014 and the measurement period retroactive adjustment of the pro-forma financial statements, both included in Note 14 of Q1 2015 Form 10-Q, and (iii) to revise certain related information, including the discussion of internal controls and procedures, within one week of this Current Report on Form 8-K.
The preliminary effects of these adjustments are as follows:
| ASSETS | | As originally reported at
MAR 31, 2015 | | CORECTION Adjustments | | As corrected MAR 31, 2015 |
| Intangible assets, net | | | 4,574,857 | | | | 4,291,857(1) | | | | 283,000 | |
| Other assets | | | 19,017,711 | | | | — | | | | 19,017,711 | |
| TOTAL ASSETS | | $ | 23,592,568 | | | | | | | $ | 19,300,711 | |
| | | | | | | | | | | | | |
| TOTAL LIABILITIES | | $ | 19,185,422 | | | | | | | $ | 19,185,422 | |
| EQUITY | | | | | | | | | | | | |
| Common stock | | | 4,485 | | | | — | | | | 4,485 | |
| Additional paid in capital | | | 15,975,939 | | | | — | | | | 15,975,939 | |
| Stock payable | | | — | | | | — | | | | — | |
| Accumulated deficit | | | (11,573,278 | ) | | | (4,291,857)(1) | | | | (15,865,135 | ) |
| TOTAL EQUITY | | | 4,407,146 | | | | | | | | 115,289 | |
| TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | | $ | 23,592,568 | | | | | | | $ | 19,300,711 | |
| (1) | Adjustment reflects correction of an error. |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | | As originally reported
at MAR 31, 2015 | | CORECTION Adjustments | | As corrected MAR 31, 2015 |
| TOTAL OPERATING INCOME | | $ | 606,113 | | | $ | 136,536 | (1) | | $ | 742,649 | |
| | | | | | | | | | | | | |
| OTHER (INCOME) / EXPENSE | | | | | | | | | | | | |
| Interest expense, net | | | 669,713 | | | | — | | | | 669,713 | |
| Gain on bargain purchase of JD | | | — | | | | — | | | | — | |
| TOTAL OTHER (INCOME) / EXPENSE | | | 669,713 | | | | | | | | 669,713 | |
| NET INCOME | | $ | (63,600 | ) | | $ | 136,536 | | | $ | 72,936 | |
| BASIC (LOSS) INCOME PER SHARE | | $ | (0.02 | ) | | | | | | $ | 0.02 | |
| DILUTED (LOSS) INCOME PER SHARE | | $ | (0.02 | ) | | | | | | $ | 0.01 | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC | | | 3,819,223 | | | | | | | | 3,819,223 | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING DILUTIVE | | | 3,819,223 | | | | | | | | 5,260,318 | |
| (1) | Adjustment reflects correction of an error. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | | As originally reported at MAR 31, 2015 | | CORECTION Adjustments | | As corrected MAR 31, 2015 |
| Net (loss) income | | $ | (63,600 | ) | | | 136,536 | (1) | | $ | 72,936 | |
| Cash used by operating activities | | | | | | | | | | | | |
| Depreciation and amortization | | | 535,331 | | | | (136,536 | )(1) | | 398,795 | |
| Cash provided (used) by operating activities | | | 672,104 | | | | — | | | | 672,104 | |
| | | | | | | | | | | | | |
| Cash used for investing activities | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | |
| Cash (used) provided by financing activities | | | (630,982 | ) | | | — | | | | (630,982 | ) |
| | | | | | | | | | | | | |
| Increase (decrease) in cash | | | 41,122 | | | | — | | | | 41,122 | |
| Cash at beginning of the year | | | 72,165 | | | | — | | | | 72,165 | |
| Cash at the end of the year | | $ | 113,287 | | | | — | | | $ | 113,287 | |
| | | | | | | | | | | | | |
| (1) | Adjustment reflects correction of an error. |
SIGNATURE
Pursuant to therequirementsof the Securities ExchangeAct of 1934, the Registranthasduly caused thisreport to be signed on its behalf by theundersignedhereunto duly authorized.
| Dated: August 18, 2015 | National Energy Services, Inc. |
| | |
| | /s/ Robert W Chance |
| | By: Robert Chance |
| | Its: President and Chief Executive Officer |
