Aly Energy Services (ALYE) 10-Q 13 Nov 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 13, 2019
Document And Entity Information
Entity Registrant Name	Aly Energy Services, Inc.
Entity Central Index Key	0000946822
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2019
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2019
Entity Common Stock Shares Outstanding		3,822,329

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets
Cash	$ 474	$ 1,615
Restricted cash	30	30
Receivables, net	3,019	2,910
Prepaid expenses and other current assets	245	621
Total current assets	3,768	5,176
Property and equipment, net	27,086	25,808
Intangible assets, net	2,787	3,349
Other assets	502	13
Total assets	34,143	34,346
Current liabilities
Accounts payable and accrued expenses	1,987	2,602
Accounts payable and other liabilities - related party	98	31
Current portion of long-term debt - related party	1,093	1,000
Total current liabilities	3,178	3,633
Operating lease liabilities - related party, net of current portion	215
Long-term debt - related party, net of current portion	5,478	5,185
Other long-term liabilities	110	13
Total liabilities	8,981	8,831
Commitments and contingencies
Stockholders' equity
Preferred stock value
Common stock of $0.001 par value Authorized-15,000,000; issued and outstanding-3,822,329 as of September 30, 2019 Authorized-15,000,000; issued and outstanding-940,918 as of December 31, 2018	4	1
Additional paid-in-capital	61,017	54,265
Accumulated deficit	(35,859)	(35,506)
Total stockholders' equity	25,162	25,515
Total liabilities and stockholders' equity	34,143	34,346
Series A convertible preferred stock [Member]
Stockholders' equity
Preferred stock value		$ 6,755

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Stockholders' equity
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, authorized	15,000,000	15,000,000
Common stock, shares issued	3,822,329	940,918
Common stock, shares outstanding	3,822,329	940,918
Preferred stock, shares par value	$ 0.001	$ 0.001
Preferred stock, authorized	4,980,000	4,980,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series A Preferred Stock [Member]
Stockholders' equity
Preferred stock, shares par value	$ 0.001	$ 0.001
Preferred stock, authorized	0	20,000
Preferred stock, shares issued	0	17,292
Preferred stock, shares outstanding	0	17,292
Preferred stock, liquidation preference	$ 0	$ 17,292

UNAUDITED CONDENSED CONSOLIDATE

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 3,997	$ 4,518	$ 12,219	$ 13,242
Expenses:
Operating expenses	2,487	2,473	7,338	7,612
Operating lease expense - related party	11		11
Depreciation and amortization	849	841	2,538	2,578
Selling, general and administrative expenses	805	836	2,381	2,726
Total expenses	4,152	4,150	12,268	12,916
Income (loss) from operations	(155)	368	(49)	326
Other expense:
Interest expense, net	5	3	14	12
Interest expense - related party, net	86	92	265	270
Total other expense	91	95	279	282
Income (loss) before income taxes	(246)	273	(328)	44
Income tax expense (benefit)	10	(30)	31	12
Net income (loss)	$ (256)	$ 303	$ (359)	$ 32
Basic earnings (loss) per share information:
Net income (loss) available to common stockholders	$ (0.07)	$ 0.38	$ (0.10)	$ 0.04
Weighted-average shares - basic	3,822,329	802,331	3,526,800	728,460
Diluted earnings (loss) per share information:
Net income (loss) available to common stockholders	$ (0.07)	$ 0.07	$ (0.10)	$ 0.01
Weighted-average shares - diluted	3,822,329	4,414,234	3,526,800	4,415,012

UNAUDITED CONDENSED CONSOLIDA_2

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Series A Preferred Shares[Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Treasury Stock [Member]
Balance, shares at Dec. 31, 2017		690,907	17,292
Balance, amount at Dec. 31, 2017	$ 24,672	$ 1	$ 6,755	$ 53,767	$ (35,849)	$ (2)
Net Income (Loss)	$ 8				$ 8
Balance, shares at Mar. 31, 2018		690,907	17,292
Balance, amount at Mar. 31, 2018	$ 24,680	$ 1	$ 6,755	$ 53,767	$ 35,841	$ (2)
Net Income (Loss)	$ (279)				$ (279)
Reinstatement of treasury shares, shares		11
Reinstatement of treasury shares, amount				$ (2)		$ 2
Balance, shares at Jun. 30, 2018		690,918	17,292
Balance, amount at Jun. 30, 2018	$ 24,401	$ 1	$ 6,755	$ 53,765	$ (36,120)
Net Income (Loss)	303				$ 303
Exercise of options, shares		250,000
Exercise of options, amount	$ 500			$ 500
Balance, shares at Sep. 30, 2018		940,918	17,292
Balance, amount at Sep. 30, 2018	$ 25,204	$ 1	$ 6,755	$ 54,265	$ (35,817)
Balance, shares at Dec. 31, 2018		940,918	17,292
Balance, amount at Dec. 31, 2018	$ 25,515	$ 1	$ 6,755	$ 54,265	$ (35,506)
Net Income (Loss)	(162)				162
Cancellation of Series A convertible preferred stock in connection with the Merger, shares			(17,292)
Issuance of common stock in connection with the Merger, shares		2,881,411
Issuance of common stock in connection with the Merger, amount	6,755	$ 3		$ 6,752
Cancellation of Series A convertible preferred stock in connection wiith the Merger, amount	(6,755)		(6,755)
Impact of adoption of ASC 842 Standard, amount	$ 6				$ 6
Balance, shares at Mar. 31, 2019		3,822,329
Balance, amount at Mar. 31, 2019	$ 25,359	$ 4		$ 61,017	$ (35,662)
Net Income (Loss)	$ 59				$ 59
Balance, shares at Jun. 30, 2019		3,822,329
Balance, amount at Jun. 30, 2019	$ 25,418	$ 4		$ 61,017	$ (35,603)
Net Income (Loss)	$ (256)				$ (256)
Balance, shares at Sep. 30, 2019		3,822,329
Balance, amount at Sep. 30, 2019	$ 25,162	$ 4		$ 61,017	$ (35,859)

UNAUDITED CONDENSED CONSOLIDA_3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities
Net income (loss)	$ (359)	$ 32
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	2,538	2,578
Operating lease amortization	104
Operating lease amortization - related party	8
Bad debt expense	72	66
Non-cash interest expense	2
Changes in operating assets and liabilities:
Receivables	(181)	443
Prepaid expenses and other assets	376	(15)
Accounts payable, accrued expenses, operating lease and other liabilities	(839)	(220)
Accounts payable and other liabilities - related party	8	4
Net cash provided by operating activities	1,729	2,888
Cash flows from investing activities:
Purchases of property and equipment	(2,788)	(1,686)
Net cash used in investing activities	(2,788)	(1,686)
Cash flows from financing activities:
Proceeds from exercise of options		500
Borrowings on long-term debt - related party	675	250
Repayment of long-term debt - related party	(750)	(167)
Repayment of finance leases - related party	(7)
Net cash provided by (used in) financing activities	(82)	583
Net increase (decrease) in cash and restricted cash	(1,141)	1,785
Cash and restricted cash, beginning of period	1,645	233
Cash and restricted cash, end of period	504	2,018
Supplemental disclosure of cash flow information:
Cash paid for interest - related party	269	265
Cash paid for interest	9	7
Cash paid (received) for income taxes, net	44	21
Non-cash financing activities:
Cancellation of preferred stock and issuance of common stock in connection with the Merger	$ 6,755

NATURE OF OPERATIONS AND BASIS

NATURE OF OPERATIONS AND BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2019
NATURE OF OPERATIONS AND BASIS OF PRESENTATION
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION	Nature of Operations Aly Energy Services, Inc., together with its subsidiaries (“Aly Energy” or the “Company”), is a provider of oilfield services to oil and gas exploration and production (“E&P”) companies operating in the United States (“U.S.”). Generally, the services we offer fall within two broad categories: surface rental equipment and solids control equipment and services. Our surface rental equipment includes a wide variety of large capacity tanks with circulating systems, associated pumps, and ancillary equipment. Our solids control equipment mainly consists of large centrifuges and ancillary components that can be integrated into a closed loop mud system. We operate in the U.S., primarily in Texas, Oklahoma, and New Mexico. Throughout this report, we may also refer to Aly Energy and its subsidiaries as “we”, “our” or “us”. Basis of Presentation Aly Energy has two wholly-owned subsidiaries with active operations: Aly Operating, Inc. and Aly Centrifuge Inc. Aly Operating, Inc. has one wholly-owned subsidiary, Austin Chalk Petroleum Services Corp. We operate as one business segment which services customers within the U.S. The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Aly Energy and each of its subsidiaries. All significant intercompany transactions and account balances have been eliminated upon consolidation. Reverse Stock Split On August 7, 2018, the Company effected a 1-for-20 reverse stock split of its common stock (“Reverse Split”), as approved by its Board of Directors and stockholders. All information in this Quarterly Report on Form 10-Q relating to the number of common shares, price per share and per share amounts, including such information related to options and the conversion feature of the Series A convertible preferred stock, have been retroactively restated to give effect to the Reverse Split. Please see Note 6 – Stockholders’ Equity Interim Financial Information The unaudited condensed consolidated balance sheet as of December 31, 2018 has been derived from our audited financial statements. The unaudited condensed consolidated financial statements of the Company as of and for the periods presented are prepared in conformity with U.S. GAAP for interim financial reporting. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, these condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting only of normal, recurring adjustments) which are, in our opinion, necessary for a fair presentation of the information as of and for the periods presented. Interim results for the three and nine months ended September 30, 2019 may not be indicative of results that will be realized for the full year ending December 31, 2019. Reclassifications Certain reclassifications have been made to prior period unaudited condensed consolidated financial statements to conform to the current period presentation. These reclassifications had no effect on our consolidated financial position, results of operations or cash flows. Merger with Related Party On January 28, 2019, we executed an Agreement and Plan of Merger (“Merger Agreement”) with Permian Pelican Inc. (“Pelican”), a related party, pursuant to which Pelican merged with and into the Company (the “Merger”). By virtue of the Merger, each issued and outstanding share of Pelican common stock, 7,429 shares in aggregate, was converted into 387.858 shares of our common stock and each share of Series A convertible preferred stock was canceled. We issued an aggregate of 2,881,411 new shares of our common stock, representing approximately 75.4% of our outstanding common stock, with a value of approximately $14.4 million in consideration for all of the shares of Pelican common stock outstanding as of the Merger on January 28, 2019. The new shares of our common stock were issued directly to the individual shareholders of Pelican and, as a result, effective January 28, 2019, we no longer had a controlling shareholder. Please see Note 7 – Related Party Transactions Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, and the amounts of revenue and expenses recognized during the reporting period. Areas where critical accounting estimates are made by management include: · Revenue recognition, · Allowance for doubtful accounts, · Depreciation and amortization of property and equipment and intangible and other assets, · Impairment of property and equipment and intangible and other assets, · Litigation settlement accruals, · Stock-based compensation, and · Income taxes. The Company analyzes its estimates based on historical experience and various other indicative assumptions it believes to be reasonable under the circumstances. Under different assumptions or conditions, the actual results could differ, possibly materially, from those previously estimated. Many of the conditions impacting these assumptions are outside of the Company’s control.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	9 Months Ended
	Sep. 30, 2019
RECENT ACCOUNTING PRONOUNCEMENTS
NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS	Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), which we adopt as of the specified effective date. Unless otherwise discussed, management believes the impact of recently issued standards, which are not yet effective, will not have a material impact on our consolidated financial statements upon adoption. Accounting Standard Adopted in 2019 Leases. · The package of practical expedients permitted under the transition guidance within the new standard which, among other things, allowed the Company to carry forward the historical lease classification; · The short-term lease practical expedient which allowed the Company to exclude short-term leases from recognition in the unaudited condensed consolidated balance sheets; and, · The bifurcation of lease and non-lease components practical expedient which did not require the Company to bifurcate lease and non-lease components, if any, for all classes of assets. The adoption of this accounting standard resulted in the recording of operating right-of-use (“ROU”) assets and operating lease liabilities of approximately $0.3 million as of January 1, 2019. The difference between the operating ROU assets and operating lease liabilities of approximately $6,000 was recorded as an adjustment to accumulated deficit. Please see Note 4 – Leases Revenue recognition. Performance Obligations A performance obligation arises under contracts with customers to render services or provide rentals and is the unit of account. The Company accounts for services rendered and rentals provided separately if they are distinct and the service or rental is separately identifiable from other items provided to a customer and if a customer can benefit from the services rendered or rentals provided on its own or with other resources that are readily available to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. A contract’s standalone selling prices are determined based on the prices that the Company charges for its services rendered and rentals provided. Most of the Company’s performance obligations are satisfied over time, generally over a period measured in days or months. The Company’s payment terms vary by the type of products or services offered. The term between invoicing and when the payment is due is typically 30 days. We invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our revenue contracts do not give rise to contract assets or liabilities. Rentals revenue Services revenue The Company expenses sales commissions when incurred because the relevant amortization period would be one year or less. The following table presents our revenue disaggregated by revenue source (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Rental services $ 2,579 $ 3,160 $ 7,912 $ 9,408 Transportation services 762 702 2,282 1,982 Rig-up/rig-down services 634 618 1,969 1,771 Other 22 38 56 81 Total $ 3,997 $ 4,518 $ 12,219 $ 13,242 Accounting Standards Issued But Not Yet Adopted Fair Value Measurement Disclosure Financial Instruments—Credit Losses.

DETAIL OF CERTAIN BALANCE SHEET

DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS	9 Months Ended
	Sep. 30, 2019
DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS
NOTE 3 - DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS	Property and Equipment Major classifications of property and equipment are as follows (in thousands): September 30, 2019 December 31, 2018 Machinery and equipment $ 36,927 $ 33,503 Vehicles, trucks and trailers 4,300 4,242 Office furniture, fixtures and equipment 567 567 Right-of-use assets - finance leases 466 - Buildings 212 212 Leasehold improvements 63 63 42,535 38,587 Less: Accumulated depreciation and amortization (15,465 ) (13,490 ) 27,070 25,097 Assets not yet placed in service 16 711 Property and equipment, net $ 27,086 $ 25,808 Depreciation and amortization expense related to property and equipment for the three months ended September 30, 2019 and 2018 (restated) was $0.6 million and $0.7 million, respectively. Depreciation and amortization expense related to property and equipment for the nine months ended September 30, 2019 and 2018 (restated) was $2.0 million. Intangible Assets, Net As of September 30, 2019 and December 31, 2018, intangible assets of $2.8 million and $3.3 million, respectively, included assets associated with a trade name and customer relationships. Amortization expense was $0.2 million for the three months ended September 30, 2019 and 2018. Amortization expense was $0.6 million for the three months ended September 30, 2019 and 2018. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consists of the following (in thousands): September 30, 2019 December 31, 2018 Accounts payable $ 1,021 $ 1,098 Accrued compensation 225 384 Sales tax payable 187 211 Current portion of operating lease liabilities 115 - Accrued property taxes 114 1 Insurance payable 60 366 Accrued severance - 281 Other accrued expenses 265 261 Total accrued expenses $ 1,987 $ 2,602

LEASES

LEASES	9 Months Ended
	Sep. 30, 2019
LEASES
NOTE 4 - LEASES	The Company adopted ASU 2016-02 and the related amendments on January 1, 2019. The Company leases certain equipment and facilities under both operating and finance leases expiring on various dates through 2023. The nature of these leases generally fall into two categories: real estate leases and equipment leases for surface rental equipment used in our operations such as tanks and pumps. The leases for surface rental equipment are with a related party, Permian Pelican Rentals, LLC (“PPR”). Please see Note 7 – Related Party Transactions For leases with initial terms greater than 12 months, we consider the leased assets as our right-of-use assets and record the related asset and obligation at the present value of lease payments over the term. We estimate our incremental borrowing rate, which is used to discount the lease payments, based on information available at lease commencement. For leases with initial terms equal to or less than 12 months, we do not consider the leased assets as right-of-use assets and instead we record them as short-term lease costs that are recognized on a straight-line basis over the lease term. Some of our leases include escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when it is reasonably certain the Company will exercise such options. Operating and Finance Leases with a Related Party On May 21, 2019, the Company entered into a leasing arrangement with PPR for 40 500bbl tanks. All the tanks are required to be upgraded and modified by Aly Energy prior to being placed in service. Aly Energy then bills PPR for all costs incurred to modify and upgrade the tanks. As of September 30, 2019, the company had completed the upgrades and modifications on 14 tanks. The remainder of the tanks will be delivered to the Company and completed within the next six months. Each tank incurs daily rental charges based on a 365 (or 366) day year regardless of equipment utilization. The lease commences on the day that each completely refurbished tank is ready for shipment to a customer’s site. Each tank is a separate identified asset that is capable of being used independently of the other tanks. As such, the Company records a separate lease for each piece of equipment under the PPR leasing arrangement. Subsequent to May 21, 2019, PPR and Aly Energy entered into three amendments to the leasing agreement as follows: · Amendment No. 1 – July 1, 2019- Amended the start date of the lease payments to commence on the first calendar day of the month after such equipment has been readied for shipment to the customer. The amendment was accounted for as a modification. All leases that commenced prior to July 1, 2019 were assessed initially under the terms of the unmodified lease and again on July 1 using the modified terms. The reassessment of each lease did not result in any changes to lease classification. The difference between the calculated lease liability using the amended terms of the lease and the recorded lease liability as of the amendment date was not material. · Amendment No. 2 – July 24, 2019 – Amended the lease agreement to include six diesel mud pumps (“DMPs”) at a stated daily rate. This amendment was treated as a separate lease agreement for purposes of lease classification. Each DMP is a separate identified asset that is capable of being used independently of the other DMPs. As such, the Company considers each DMP a separate lease. · Amendment No. 3 – August 15, 2019 – Amended the lease term to extend the maturity date from December 31, 2022 to December 31, 2023. Each equipment lease in effect as of August 15, 2019 was reassessed for classification. All the leases that were in effect as of August 15, 2019 were initially classified as operating leases and continued to be classified as operating leases after the amendment. The difference between the calculated lease liability using the amended lease maturity date and the recorded lease liability as of the amendment date was recorded as an adjustment to the operating right-of-use asset and the operating lease liability. As a result of the amendment, total operating right-of-use assets and operating lease liabilities increased by approximately $27,000. Based on the Company’s assessments of lease classification, each of the tank leases were classified as operating leases and each of the DMP leases were classified as finance leases. The DMPs were classified as financing leases because the present value of the lease payments aggregate to an amount equal to substantially all the estimated fair value of the DMPs. The estimated fair value of the frac tanks was determined based on quoted market prices for similar tanks, as adjusted for differences in configuration. The estimated fair value for the DMPs was determined based on the cost of a new DMP, as adjusted for the upgrades added by the Company. The estimated incremental borrowing rate is based on the Company’s estimate of the rate at which a third-party lender would finance the purchase of equipment under a secured loan of a similar term to the leasing arrangement. During the three and nine months ended September 30, 2019, we added $0.2 million of operating lease liabilities and $0.5 million of finance lease liabilities as a result of the commencement of 14 operating leases and six finance leases under the PPR leasing arrangement. Balance Sheet Classification The table below presents the lease-related assets and liabilities included on the balance sheet (in thousands): Leases Classification on Balance Sheet September 30, 2019 Assets Operating right-of-use assets Other assets $ 223 Operating right-of-use assets - related party Other assets 266 Finance right-of-use assets - related party Property and equipment, net 453 Liabilities Current Operating lease liabilities Accounts payable and accrued expenses 115 Operating lease liabilities - related party Accrued expenses and current liabilities - related party 54 Finance lease liabilities - related party Current portion of long-term debt - related party 93 Non-Current Operating lease liabilities Other long-term liabilities 110 Operating lease liabilities - related party Operating lease liabilities - related party, net of current portion 215 Finance lease liabilities - related party Long-term debt - related party, net of current portion 368 Lease Costs Rent expense is included in operating expenses or selling, general, and administrative expenses on the unaudited condensed consolidated statements of operations depending on the use of the asset being rented. The table below presents the rent expense recognized for the three and nine months ended September 30, 2019 and 2018 (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Rent expense: Operating right-of-use assets $ 39 $ - $ 116 $ - Operating right-of-use assets - related party 11 - 11 - Long-term operating leases - 19 - 48 Month-to-month operating leases 11 26 31 48 Operating leases maturing within twelve months and other 8 15 24 44 Total rent expense $ 69 $ 60 $ 182 $ 140 Amortization expense and interest expense related to finance leases are included in depreciation and amortization and interest expense – related party, net, respectively, on the unaudited condensed consolidated statements of operations. The table below presents the interest expense and amortization expense recognized in connection with finance right-of-use assets for the three and nine months ended September 30, 2019: For the Three and Nine Months Ended September 30, 2019 Finance leases - related party: Amortization expense $ 13 Interest expense 5 Total expense $ 18 The table below presents cash paid for operating leases and finance leases during the three and nine months ended September 30, 2019 (in thousands): For the Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 109 Operating cash flows from operating leases - related party 1 Non-cash activities resulting from new leasing arrangements and modifications to existing lease arrangements: New operating right-of-use assets and operating lease liabilities - related party $ 247 Modification of existing operating right-of-use assets and operating lease liabilities - related party 27 New finance right-of-use assets and finance lease liabilities- related party 466 Non-cash activities from adoption of ASC 842 as of January 1, 2019: Operating right-of-use assets $ 327 Operating lease liabilities 334 Other long-term liabilities 13 Retained earnings 6 Other Information The tables below present supplemental information related to leases as of September 30, 2019: As of September 30, 2019 Weighted average remaining lease term (years) Operating leases 2.17 Operating leases - related party 4.25 Finance leases - related party 4.25 Weighted average discount rate Operating leases 5.56 % Operating leases - related party 9.21 % Finance leases - related party 9.21 % Maturities of Lease Liabilities The table below reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet as of September 30, 2019: As of September 30, 2019 Operating Leases Operating Leases - Related Party Finance Leases - Related Party Remainder of 2019 $ 40 $ 19 $ 33 2020 106 77 132 2021 68 77 131 2022 26 77 131 2023 - 77 131 Total lease payments 240 327 558 Less: imputed interest (15 ) (58 ) (97 ) Present value of future minimum lease payments $ 225 $ 269 $ 461 Less: current lease obligations (115 ) (54 ) (93 ) Long-term lease obligations $ 110 $ 215 $ 368 As of September 30, 2019, under the equipment lease with PPR, we had approximately $0.5 million of operating right-of use assets and operating lease liabilities which had not yet commenced. These leases are expected to commence on or prior to March 31, 2020.

LONG TERM DEBT RELATED PARTY

LONG TERM DEBT RELATED PARTY	9 Months Ended
	Sep. 30, 2019
LONG TERM DEBT RELATED PARTY
NOTE 5 - LONG-TERM DEBT - RELATED PARTY	Long-term debt – related party consists of the following (in thousands): September 30, 2019 December 31, 2018 Current Long-Term Current Long-Term Credit facility Term loan $ 1,000 $ 3,435 $ 1,000 $ 4,185 Revolving credit facility - 1,675 - 1,000 Finance lease obligations 93 368 - - Total $ 1,093 $ 5,478 $ 1,000 $ 5,185 On June 30, 2018, the Company entered into the Third Amended and Restated Credit Agreement with Pelican (“Related Party Credit Facility”) which, among other things, (i) combined the outstanding balances on the delayed draw term loan and the term loan and initiated a required monthly principal payment of approximately $83,000 on the aggregate outstanding balance of the term loan, (ii) expanded availability on the revolving credit facility by $0.7 million while simultaneously reducing the aggregate availability under the other lines of the facility by the same amount, and (iii) extended the maturity date of the facility to June 30, 2021. Borrowings under the Related Party Credit Facility are subject to monthly interest payments at an annual base rate of the six-month LIBOR rate on the last day of the calendar month plus a margin of 3.0%. The obligations under the Related Party Credit Facility are guaranteed by all our subsidiaries and secured by substantially all our assets. The Related Party Credit Facility contains customary events of default and covenants including restrictions on our ability to incur additional indebtedness, pay dividends or make other distributions, grant liens and sell assets. The Related Party Credit Facility does not include any financial covenants. Effective June 30, 2018, Pelican assigned and transferred its rights under the Related Party Credit Facility to an affiliated entity, PPF. Due to the common ownership interests of PPF and the Company, PPF is a related party. Under the revolving credit facility, the Company has the ability to borrow the lesser of 80% of eligible receivables, as defined in the credit agreement, and $1.7 million. As of September 30, 2019, the Company had $1.7 million of borrowings outstanding and had no further borrowing availability under the revolving credit facility. On July 24, 2019, a pre-existing leasing arrangement with Permian Pelican Rentals, LLC (“PPR”), a related party and a wholly-owned subsidiary of PPF, was amended to include the leasing of six DMPs. Based on the Company’s assessment, the leases for the DMPs are finance leases and, during the three months ended September 30, 2019, the Company recorded $0.5 million of finance ROU assets and finance lease liabilities in connection with the DMP leases.

STOCKHOLDERS EQUITY

STOCKHOLDERS EQUITY	9 Months Ended
	Sep. 30, 2019
Stockholders' equity
NOTE 6 - STOCKHOLDERS' EQUITY	Common Shares On August 7, 2018, the Company effected the Reverse Split, a 1-for-20 reverse stock split of its common stock, as approved by its Board of Directors and stockholders. Under the terms of the Reverse Split, each 20 shares of common stock issued and outstanding as of such effective date was automatically reclassified and changed into one share of common stock without further action by the stockholder. In lieu of issuing fractional shares in connection with the Reverse Split, holders received the proportionate fraction of $7.00 per share in cash. The aggregate payment for all fractional shares was $231.35. Shares of common stock previously issued and held as treasury shares were escheated to applicable governmental authorities and, in connection with the Reverse Split, were reinstated as outstanding shares of common stock. All share and per share amounts in these unaudited condensed consolidated financial statements, including such amounts related to options and the conversion feature of the Series A convertible preferred stock, have been retroactively restated to reflect the Reverse Split. On August 7, 2018, we filed an amendment to our certificate of formation reducing our authorized common shares from 25,000,000 to 15,000,000. On August 20, 2018, our former Chief Executive Officer, Shauvik Kundagrami, exercised options to purchase 250,000 shares of common stock for an exercise price of $2.00 per share, or $500,000 in aggregate. On January 28, 2019, in connection with the Merger, we issued an aggregate of 2,881,411 new shares of our common stock, representing approximately 75.4% of our outstanding common stock, in consideration for all of the shares of Pelican common stock outstanding as of the effective date of the Merger. Please see Note 7 – Related Party Transactions. Preferred Shares On August 7, 2018, we filed an amendment to our certificate of formation reducing our aggregate authorized preferred stock from 10,000,000 to 5,000,000 shares. Previously, the Company allocated 20,000 of the authorized preferred shares to be authorized Series A convertible preferred shares. On January 28, 2019, by virtue of the Merger, each issued and outstanding share of our Series A convertible preferred stock was canceled. Authorized preferred shares, with a par value of $0.001 per share, total 4,980,000 as of September 30, 2019 and December 31, 2018, respectively, of which, none were issued and outstanding as of September 30, 2019 and December 31, 2018.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2019
RELATED PARTY TRANSACTIONS
NOTE 7 - RELATED PARTY TRANSACTIONS	Former Controlling Shareholder – Pelican Beginning on January 31, 2017, Pelican had the power to vote the substantial majority of the Company’s outstanding common stock. Five of our seven board members, including two of our executive officers, and our chief financial officer held an ownership interest in Pelican. As of December 31, 2018, Pelican owned 17,292 shares of Series A convertible preferred stock which was convertible into 2,881,400 common shares. On an as-if-converted basis, Pelican owned approximately 75.4% of our common stock (excluding the impact of options) as of December 31, 2018. The shares of Series A convertible preferred stock carried a liquidation preference of $1,000 per share or $17.3 million. On January 28, 2019, we executed the Merger with Pelican pursuant to which Pelican merged with and into the Company and, as a result, effective January 28, 2019, we no longer have a controlling shareholder. Related Party Lender – PPF In January 2017, we entered into the Related Party Credit Facility with Pelican. Effective June 30, 2018, Pelican assigned and transferred its rights under the Related Party Credit Facility to PPF. Due to the common ownership interests of PPF and the Company, PPF is a related party. In connection with our Related Party Credit Facility, during the three months ended September 30, 2019, we recorded principal payments and interest expense of $0.3 million and approximately $81,000, respectively. During the three months ended September 30, 2018, we recorded principal payments and interest expense of $0.2 million and approximately $92,000, respectively. In connection with our Related Party Credit Facility, during the nine months ended September 30, 2019, we recorded principal payments and interest expense of $0.8 million and $0.3 million, respectively, and we borrowed an additional $0.7 million under the revolving credit facility thereby reducing availability under the facility to zero. During the nine months ended September 30, 2018, we recorded principal payments and interest expense of $0.2 million and $0.3 million, respectively. Our consolidated balance sheet includes accrued interest under the Related Party Credit Facility of approximately $26,000 and $31,000 as of September 30, 2019 and December 31, 2018, respectively. Related Party Vendor – Permian Pelican Rentals, LLC PPR is a wholly-owned subsidiary of PPF, a related party. During the three and nine months ended September 30, 2019, the Company has entered into various leases with PPR to sub-rent tanks and pumps.

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Sep. 30, 2019
EARNINGS PER SHARE
NOTE 8 - EARNINGS PER SHARE	Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional shares of common stock that could have been outstanding assuming the exercise of outstanding stock options and restricted stock or other convertible instruments, as appropriate. Due to the net loss incurred by the Company for the three and nine months ended September 30, 2019, the effect of incremental shares is antidilutive so the diluted earnings per share will be the same as the basic earnings per share. The calculations of basic and diluted earnings per share for the three and nine months ended September 30, 2018 are shown below (unaudited and in thousands, except for shares and per share data): For the Three Months Ended September 30, 2018 For the Nine Months Ended September 30, 2018 (restated) (restated) Numerator: Net income available to common stockholders $ 303 $ 32 Denominator: Weighted average shares used in basic earnings per share 802,331 728,460 Series A convertible preferred stock 2,881,400 2,881,400 Stock options issued under the 2017 Plan 730,503 805,152 Weighted average shares used in diluted earnings per share 4,414,234 4,415,012 Basic earnings per share $ 0.38 $ 0.04 Diluted earnings per share $ 0.07 $ 0.01 Unvested stock options under the 2013 Plan are excluded from the computation of basic and diluted earnings per share because they vest upon the occurrence of certain events as defined in the 2013 Plan. As of September 30, 2019, there were 11,706 stock options outstanding and unvested under the 2013 Plan. Please see our Annual Report on Form 10-K for the year ended December 31, 2018 for additional detail on the options issued under the 2013 Plan and for detail on options issued under the 2017 Plan.

RESTATEMENT OF PRIOR YEAR FINAN

RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS	9 Months Ended
	Sep. 30, 2019
RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS
NOTE 9 - RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS	Prior to the issuance of the Company’s consolidated financial statements for the year ended December 31, 2018, the Company concluded that its previously issued consolidated financial statements for the years ended December 31, 2017 and 2016 and for the quarters ending March 31, 2018 and 2017, June 30, 2018 and 2017 and September 30, 2018 and 2017 should be restated due to accounting errors discovered in conjunction with certain remediation activities for our internal controls over financial reporting. During the first quarter of 2019, we reviewed our existing fixed asset inventory, our current and historical fixed asset records, and the accounting for a significant transaction in 2016 in which we sold assets with a net book value of $18.6 million to Tiger Finance, LLC (“Tiger”). As a result of this review, we (i) identified certain assets which were included in the asset purchase agreement with Tiger and had not been written off in connection with the sale, and (ii) identified certain other assets which had been disposed of on or prior to December 31, 2016 which had not been written off at the time of disposal. We determined it would be necessary to restate the financial statements for the years ended December 31, 2017 and 2016 and the quarters ended March 31, 2018 and 2017, June 30, 2018 and 2017 and September 30, 2018 and 2017. The adjustments to the consolidated statements of operations consist of an increased impairment and increased loss on disposal of assets in 2016 and a reduction in depreciation expense during all periods from November 1, 2016 through September 30, 2018. The adjustments to the consolidated balance sheet consist of a reduction of property and equipment, net in all periods to reflect the write-off of certain assets in 2016. The Company’s consolidated statements of cash flows had no changes to net cash flows from operating, investing or financing activities as a result of the restatement. The impact of the restatement to the unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2018 was as follows (in thousands except per share data): Unaudited Condensed Consolidated Statements of Operations For the Three Months Ended For the Nine Months Ended September 30, 2018 September 30, 2018 As Reported Adjustment As Restated As Reported Adjustment As Restated Depreciation and amortization $ 862 $ (21 ) $ 841 $ 2,641 $ (63 ) $ 2,578 Total expenses 4,171 (21 ) 4,150 12,979 (63 ) 12,916 Income from operations 347 21 368 263 63 326 Income (loss) before income taxes 252 21 273 (19 ) 63 44 Net income (loss) $ 282 $ 21 $ 303 $ (31 ) $ 63 $ 32 Income (loss) per common share - basic $ 0.35 $ 0.03 $ 0.38 $ (0.04 ) $ 0.08 $ 0.04 Income (loss) per common share - diluted $ 0.06 $ 0.01 $ 0.07 $ (0.04 ) $ 0.01 $ 0.01

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2019
SUBSEQUENT EVENTS
NOTE 10 - SUBSEQUENT EVENTS	On October 9, 2019, we filed an amendment to our certificate of formation reducing our authorized common shares from 15,000,000 to 5,000,000 and reducing our authorized preferred stock from 5,000,000 to 1,000,000. On October 23, 2019, we executed a new real estate lease for our corporate office. The lease is expected to commence on February 1, 2020.

NATURE OF OPERATIONS AND BASI_2

NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Policies)	9 Months Ended
	Sep. 30, 2019
NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Policies)
Nature of Operations	Aly Energy Services, Inc., together with its subsidiaries (“Aly Energy” or the “Company”), is a provider of oilfield services to oil and gas exploration and production (“E&P”) companies operating in the United States (“U.S.”). Generally, the services we offer fall within two broad categories: surface rental equipment and solids control equipment and services. Our surface rental equipment includes a wide variety of large capacity tanks with circulating systems, associated pumps, and ancillary equipment. Our solids control equipment mainly consists of large centrifuges and ancillary components that can be integrated into a closed loop mud system. We operate in the U.S., primarily in Texas, Oklahoma, and New Mexico. Throughout this report, we may also refer to Aly Energy and its subsidiaries as “we”, “our” or “us”.
Basis of Presentation	Aly Energy has two wholly-owned subsidiaries with active operations: Aly Operating, Inc. and Aly Centrifuge Inc. Aly Operating, Inc. has one wholly-owned subsidiary, Austin Chalk Petroleum Services Corp. We operate as one business segment which services customers within the U.S. The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Aly Energy and each of its subsidiaries. All significant intercompany transactions and account balances have been eliminated upon consolidation.
Reverse Stock Split	On August 7, 2018, the Company effected a 1-for-20 reverse stock split of its common stock (“Reverse Split”), as approved by its Board of Directors and stockholders. All information in this Quarterly Report on Form 10-Q relating to the number of common shares, price per share and per share amounts, including such information related to options and the conversion feature of the Series A convertible preferred stock, have been retroactively restated to give effect to the Reverse Split. Please see Note 6 – Stockholders’ Equity
Interim Financial Information	The unaudited condensed consolidated balance sheet as of December 31, 2018 has been derived from our audited financial statements. The unaudited condensed consolidated financial statements of the Company as of and for the periods presented are prepared in conformity with U.S. GAAP for interim financial reporting. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, these condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting only of normal, recurring adjustments) which are, in our opinion, necessary for a fair presentation of the information as of and for the periods presented. Interim results for the three and nine months ended September 30, 2019 may not be indicative of results that will be realized for the full year ending December 31, 2019.
Reclassifications	Certain reclassifications have been made to prior period unaudited condensed consolidated financial statements to conform to the current period presentation. These reclassifications had no effect on our consolidated financial position, results of operations or cash flows.
Merger with Related Party	On January 28, 2019, we executed an Agreement and Plan of Merger (“Merger Agreement”) with Permian Pelican Inc. (“Pelican”), a related party, pursuant to which Pelican merged with and into the Company (the “Merger”). By virtue of the Merger, each issued and outstanding share of Pelican common stock, 7,429 shares in aggregate, was converted into 387.858 shares of our common stock and each share of Series A convertible preferred stock was canceled. We issued an aggregate of 2,881,411 new shares of our common stock, representing approximately 75.4% of our outstanding common stock, with a value of approximately $14.4 million in consideration for all of the shares of Pelican common stock outstanding as of the Merger on January 28, 2019. The new shares of our common stock were issued directly to the individual shareholders of Pelican and, as a result, effective January 28, 2019, we no longer had a controlling shareholder. Please see Note 7 – Related Party Transactions
Use of Estimates	The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, and the amounts of revenue and expenses recognized during the reporting period. Areas where critical accounting estimates are made by management include: · Revenue recognition, · Allowance for doubtful accounts, · Depreciation and amortization of property and equipment and intangible and other assets, · Impairment of property and equipment and intangible and other assets, · Litigation settlement accruals, · Stock-based compensation, and · Income taxes. The Company analyzes its estimates based on historical experience and various other indicative assumptions it believes to be reasonable under the circumstances. Under different assumptions or conditions, the actual results could differ, possibly materially, from those previously estimated. Many of the conditions impacting these assumptions are outside of the Company’s control.

RECENT ACCOUNTING PRONOUNCEME_2

RECENT ACCOUNTING PRONOUNCEMENTS (Tables)	9 Months Ended
	Sep. 30, 2019
RECENT ACCOUNTING PRONOUNCEMENTS (Tables)
Schedule of revenue disaggregated by revenue source	For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Rental services $ 2,579 $ 3,160 $ 7,912 $ 9,408 Transportation services 762 702 2,282 1,982 Rig-up/rig-down services 634 618 1,969 1,771 Other 22 38 56 81 Total $ 3,997 $ 4,518 $ 12,219 $ 13,242

DETAIL OF CERTAIN BALANCE SHE_2

DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS (Tables)	9 Months Ended
	Sep. 30, 2019
DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS (Tables)
Schedule of major classifications of property and equipment	September 30, 2019 December 31, 2018 Machinery and equipment $ 36,927 $ 33,503 Vehicles, trucks and trailers 4,300 4,242 Office furniture, fixtures and equipment 567 567 Right-of-use assets - finance leases 466 - Buildings 212 212 Leasehold improvements 63 63 42,535 38,587 Less: Accumulated depreciation and amortization (15,465 ) (13,490 ) 27,070 25,097 Assets not yet placed in service 16 711 Property and equipment, net $ 27,086 $ 25,808
Schedule of accounts payable and accrued expenses	September 30, 2019 December 31, 2018 Accounts payable $ 1,021 $ 1,098 Accrued compensation 225 384 Sales tax payable 187 211 Current portion of operating lease liabilities 115 - Accrued property taxes 114 1 Insurance payable 60 366 Accrued severance - 281 Other accrued expenses 265 261 Total accrued expenses $ 1,987 $ 2,602

LEASES (Tables)

LEASES (Tables)	9 Months Ended
	Sep. 30, 2019
LEASES
Schedule of lease assets and liablities	Leases Classification on Balance Sheet September 30, 2019 Assets Operating right-of-use assets Other assets $ 223 Operating right-of-use assets - related party Other assets 266 Finance right-of-use assets - related party Property and equipment, net 453 Liabilities Current Operating lease liabilities Accounts payable and accrued expenses 115 Operating lease liabilities - related party Accrued expenses and current liabilities - related party 54 Finance lease liabilities - related party Current portion of long-term debt - related party 93 Non-Current Operating lease liabilities Other long-term liabilities 110 Operating lease liabilities - related party Operating lease liabilities - related party, net of current portion 215 Finance lease liabilities - related party Long-term debt - related party, net of current portion 368
Schedule of operating lease expense	For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Rent expense: Operating right-of-use assets $ 39 $ - $ 116 $ - Operating right-of-use assets - related party 11 - 11 - Long-term operating leases - 19 - 48 Month-to-month operating leases 11 26 31 48 Operating leases maturing within twelve months and other 8 15 24 44 Total rent expense $ 69 $ 60 $ 182 $ 140
Schedule of finance lease expense	For the Three and Nine Months Ended September 30, 2019 Finance leases - related party: Amortization expense $ 13 Interest expense 5 Total expense $ 18
Schedule of supplemental cash flow information for leases	For the Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 109 Operating cash flows from operating leases - related party 1 Non-cash activities resulting from new leasing arrangements and modifications to existing lease arrangements: New operating right-of-use assets and operating lease liabilities - related party $ 247 Modification of existing operating right-of-use assets and operating lease liabilities - related party 27 New finance right-of-use assets and finance lease liabilities- related party 466 Non-cash activities from adoption of ASC 842 as of January 1, 2019: Operating right-of-use assets $ 327 Operating lease liabilities 334 Other long-term liabilities 13 Retained earnings 6
Schedule of lease disclosure	As of September 30, 2019 Weighted average remaining lease term (years) Operating leases 2.17 Operating leases - related party 4.25 Finance leases - related party 4.25 Weighted average discount rate Operating leases 5.56 % Operating leases - related party 9.21 % Finance leases - related party 9.21 %
Schedule of operating lease liabilities	As of September 30, 2019 Operating Leases Operating Leases - Related Party Finance Leases - Related Party Remainder of 2019 $ 40 $ 19 $ 33 2020 106 77 132 2021 68 77 131 2022 26 77 131 2023 - 77 131 Total lease payments 240 327 558 Less: imputed interest (15 ) (58 ) (97 ) Present value of future minimum lease payments $ 225 $ 269 $ 461 Less: current lease obligations (115 ) (54 ) (93 ) Long-term lease obligations $ 110 $ 215 $ 368

LONG-TERM DEBT RELATED PARTY (T

LONG-TERM DEBT RELATED PARTY (Tables)	9 Months Ended
	Sep. 30, 2019
LONG-TERM DEBT RELATED PARTY (Tables)
Schedule of long-term debt related party	Long-term debt – related party consists of the following (in thousands): September 30, 2019 December 31, 2018 Current Long-Term Current Long-Term Credit facility Term loan $ 1,000 $ 3,435 $ 1,000 $ 4,185 Revolving credit facility - 1,675 - 1,000 Finance lease obligations 93 368 - - Total $ 1,093 $ 5,478 $ 1,000 $ 5,185

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	9 Months Ended
	Sep. 30, 2019
EARNINGS PER SHARE (Tables)
Schedule of basic and diluted earnings per share	For the Three Months Ended September 30, 2018 For the Nine Months Ended September 30, 2018 (restated) (restated) Numerator: Net income available to common stockholders $ 303 $ 32 Denominator: Weighted average shares used in basic earnings per share 802,331 728,460 Series A convertible preferred stock 2,881,400 2,881,400 Stock options issued under the 2017 Plan 730,503 805,152 Weighted average shares used in diluted earnings per share 4,414,234 4,415,012 Basic earnings per share $ 0.38 $ 0.04 Diluted earnings per share $ 0.07 $ 0.01

RESTATEMENT OF PRIOR YEAR FIN_2

RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS (Tables)	9 Months Ended
	Sep. 30, 2019
RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS (Tables)
Schedule of restatement to prior year financial statements	Unaudited Condensed Consolidated Statements of Operations For the Three Months Ended For the Nine Months Ended September 30, 2018 September 30, 2018 As Reported Adjustment As Restated As Reported Adjustment As Restated Depreciation and amortization $ 862 $ (21 ) $ 841 $ 2,641 $ (63 ) $ 2,578 Total expenses 4,171 (21 ) 4,150 12,979 (63 ) 12,916 Income from operations 347 21 368 263 63 326 Income (loss) before income taxes 252 21 273 (19 ) 63 44 Net income (loss) $ 282 $ 21 $ 303 $ (31 ) $ 63 $ 32 Income (loss) per common share - basic $ 0.35 $ 0.03 $ 0.38 $ (0.04 ) $ 0.08 $ 0.04 Income (loss) per common share - diluted $ 0.06 $ 0.01 $ 0.07 $ (0.04 ) $ 0.01 $ 0.01

NATURE OF OPERATIONS AND BASI_3

NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands	Aug. 07, 2018	Jan. 28, 2019	Sep. 30, 2019	Dec. 31, 2018
Reverse stock split, description	1-for-20
Common stock, shares issued			3,822,329	940,918
Common stock, value issued			$ 4	$ 1
Pelican [Member] | Merger Agreement [Member]
Common stock, shares issued		2,881,411
Common stock, value issued		$ 14,400
Ownership percentage		75.40%
Merger agreement description		By virtue of the Merger, each issued and outstanding share of Pelican common stock, 7,429 shares in aggregate, was converted into 387.858 shares of our common stock and each share of Series A convertible preferred stock was canceled.

RECENT ACCOUNTING PRONOUNCEME_3

RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Total	$ 3,997	$ 4,518	$ 12,219	$ 13,242
Rental Services [Member]
Total	2,579	3,160	7,912	9,408
Transportation services [Member]
Total	762	702	2,282	1,982
Rig-up Rig-down Services [Member]
Total	634	618	1,969	1,771
Other [Member]
Total	$ 22	$ 38	$ 56	$ 81

RECENT ACCOUNTING PRONOUNCEME_4

RECENT ACCOUNTING PRONOUNCEMENTS (Details Narrative) $ in Thousands	9 Months Ended
	Sep. 30, 2019USD ($)
Retained earnings	$ 6
January 1, 2019 [Member]
Operating lease liabilities, net	$ 300

DETAIL OF CERTAIN BALANCE SHE_3

DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Property plant and equipment gross	$ 42,535	$ 38,587
Less: Accumulated depreciation and amortization	(15,465)	(13,490)
Property and equipment, net of depreciation and amortization	27,070	25,097
Assets not yet placed in service	16	711
Property and equipment, net	27,086	25,808
Machinery and equipment [Member]
Property plant and equipment gross	36,927	33,503
Vehicles trucks & trailers [Member
Property plant and equipment gross	4,300	4,242
Office furniture, fixtures and equipment [Member]
Property plant and equipment gross	567	567
Buildings [Member]
Property plant and equipment gross	212	212
Leasehold improvements [Member]
Property plant and equipment gross	63	63
Right-of-use assets - finance leases [Member]
Property plant and equipment gross	$ 466

DETAIL OF CERTAIN BALANCE SHE_4

DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS (Details 1) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS (Details 1)
Accounts payable	$ 1,021	$ 1,098
Accrued compensation	225	384
Sales tax payable	187	211
Current portion of operating lease liabilities	115
Accrued property taxes	114	1
Insurance payable	60	366
Accrued severance		281
Other accrued expenses	265	261
Total accrued expenses	$ 1,987	$ 2,602

DETAIL OF CERTAIN BALANCE SHE_5

DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS (Details Narrative)
Property and equipment, depreciation and amortization expense	$ 600	$ 700	$ 2,000	$ 2,000
Intangible assets	2,800		2,800		$ 3,300
Intangible assets, amortization expense	$ 200	$ 200	$ 600	$ 600

LEASES (Details)

LEASES (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Non-Current
Operating lease liabilities - related party	$ 215
Leases [Member]
Operating right-of-use assets	223
Operating right-of-use assets - related party	266
Finance right-of-use assets - related party	453
Current
Operating lease liabilities	115
Operating lease liabilities - related party	54
Finance lease liabilities - related party	93
Non-Current
Operating lease liabilities	110
Operating lease liabilities - related party	215
Finance lease liabilities - related party	$ 368

LEASES (Details 1)

LEASES (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Rent expense:
Operating right-of-use assets			$ 327
Lease Costs [Member]
Rent expense:
Operating right-of-use assets	$ 39		116
Operating right-of-use assets - related party	11		11
Long-term operating leases		19		48
Month-to-month operating leases	11	26	31	48
Operating leases maturing within twelve months and other	8	15	24	44
Total rent expense	$ 69	$ 60	$ 182	$ 140

LEASES (Details 2)

LEASES (Details 2) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Finance lease - related party
Amortization expense	$ 13	$ 13
Interest expense	5	5
Total expense	$ 18	$ 18

LEASES (Details 3)

LEASES (Details 3) $ in Thousands	9 Months Ended
	Sep. 30, 2019USD ($)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 109
Operating cash flows from operating leases - related party	1
Non-cash activities resulting from new leasing arrangements and modifications to existing lease arrangements:
New operating right-of-use assets and operating lease liabilities - related party	247
Modification of existing operating right-of-use assets and operating lease liabilities - related party	27
New finance right-of-use assets and finance lease liabilities- related party	466
Non-cash activities from adoption of ASC 842
Operating right-of-use assets	327
Operating lease liabilities	334
Other long-term liabilities	13
Retained earnings	$ 6

LEASES (Details 4)

LEASES (Details 4)	9 Months Ended
	Sep. 30, 2019
Weighted average remaining lease term (years)
Operating leases	2 years 2 months 1 day
Operating leases - related party	4 years 2 months 30 days
Finance leases - related party	4 years 2 months 30 days
Weighted average discount rate
Operating leases	5.56%
Operating leases - related party	9.21%
Finance leases - related party	9.21%

LEASES (Details 5)

LEASES (Details 5) $ in Thousands	Sep. 30, 2019USD ($)
Operating Lease [Member]
Remainder of 2019	$ 40
2020	106
2021	68
2022	26
2023
Total lease payments	240
Less: imputed interest	(15)
Present value of future minimum lease payments	225
Less: current lease obligations	(115)
Long-term lease obligations	110
Operating Lease Related Party [Member]
Remainder of 2019	19
2020	77
2021	77
2022	77
2023	77
Total lease payments	327
Less: imputed interest	(58)
Present value of future minimum lease payments	269
Less: current lease obligations	(54)
Long-term lease obligations	215
Finance Lease Related Party [Member]
Remainder of 2019	33
2020	132
2021	131
2022	131
2023	131
Total lease payments	558
Less: imputed interest	(97)
Present value of future minimum lease payments	461
Less: current lease obligations	(93)
Long-term lease obligations	$ 368

LEASES (Details Narrative)

LEASES (Details Narrative) $ in Thousands	1 Months Ended	9 Months Ended
	May 21, 2019	Sep. 30, 2019USD ($)integer
Operating right-of-use assets		$ 327
Modification of existing operating right-of-use assets and operating lease liabilities - related party		$ 27
Permian Pelican Rentals, LLC [Member]
Number of commencement of finance lease liabilities | integer		6
Number of commencement of operating lease liabilities | integer		14
Finance lease liabilities		$ 500
Operating lease liabilities		200
Description of lease arrangement	the Company entered into a leasing arrangement with PPR for 40 500bbl tanks. All the tanks are required to be upgraded and modified by Aly Energy prior to being placed in service. Aly Energy then bills PPR for all costs incurred to modify and upgrade the tanks. As of September 30, 2019, the company had completed the upgrades and modifications on 14 tanks.
Permian Pelican Rentals, LLC [Member] | Equipment Lease [Member]
Operating right-of-use assets		$ 500
Description for amendment to lease term		These leases are expected to commence on or prior to March 31, 2020.
Permian Pelican Rentals, LLC [Member] | Amendment No. 3 [Member]
Description for amendment to lease term	maturity date from December 31, 2022 to December 31, 2023.
Description of lease arrangement	Amended the lease term to extend the maturity date from December 31, 2022 to December 31, 2023. Each equipment lease in effect as of August 15, 2019 was reassessed for classification. All the leases that were in effect as of August 15, 2019 were initially classified as operating leases and continued to be classified as operating leases after the amendment. The difference between the calculated lease liability using the amended lease maturity date and the recorded lease liability as of the amendment date was recorded as an adjustment to the operating right-of-use asset and the operating lease liability. As a result of the amendment, total operating right-of-use assets and operating lease liabilities increased by approximately $27,000.
Modification of existing operating right-of-use assets and operating lease liabilities - related party		$ 27

LONG-TERM DEBT RELATED PARTY (D

LONG-TERM DEBT RELATED PARTY (Details) - Related party [Member] - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current [Member]
Term loan	$ 1,000	$ 1,000
Revolving credit facility
Finance lease obligations	93
Total	1,093	1,000
Long-term Debt [Member]
Term loan	3,435	4,185
Revolving credit facility	1,675	1,000
Finance lease obligations	368
Total	$ 5,478	$ 5,185

LONG-TERM DEBT RELATED PARTY _2

LONG-TERM DEBT RELATED PARTY (Details Narrative) - Third Amendment and Restated Credit Agreement [Member] - Pelican [Member] - Credit Facility [Member] - USD ($) $ in Thousands	4 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2019
Finance assets and lease liabilities, commencing subsequent to 9/30/2019		$ 500
Credit facility, periodic payments	$ 83
Frequency of periodic payments	Monthly
Description for terms of amendment to agreement	(i) combined the outstanding balances on the delayed draw term loan and the term loan and initiated a required monthly principal payment of approximately $83,000 on the aggregate outstanding balance of the term loan, (ii) expanded availability on the revolving credit facility by $0.7 million while simultaneously reducing the aggregate availability under the other lines of the facility by the same amount, and (iii) extended the maturity date of the facility to June 30, 2021. Borrowings under the Related Party Credit Facility are subject to monthly interest payments at an annual base rate of the six-month LIBOR rate on the last day of the calendar month plus a margin of 3.0%
Revolving credit facility availability	$ 0
Description for borrowing capacity		Under the revolving credit facility, the Company has the ability to borrow the lesser of 80% of eligible receivables, as defined in the credit agreement, and $1.7 million
Credit facility remaining borrowing capacity		$ 0
Outstanding borrowing amount		$ 1,700

STOCKHOLDERS EQUITY (Details Na

STOCKHOLDERS EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	Aug. 07, 2018	Aug. 20, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 28, 2019	Dec. 31, 2018
Reverse stock split	1-for-20
Proportionate fraction per share paid due to reverse stock split	$ 7
Aggregate payment for fractional shares	The aggregate payment for all fractional shares was $231.35
Common stock, shares issued			3,822,329			940,918
Preferred stock, authorized shares			4,980,000			4,980,000
Preferred stock, par value			$ 0.001			$ 0.001
Preferred stock, issued shares			0			0
Preferred stock, outstanding shares			0			0
Proceeds from exercise of stock option				$ 500
Common Stock [Member]
Description for amendment to certificate of formation	On August 7, 2018, we filed an amendment to our certificate of formation reducing our authorized common shares from 25,000,000 to 15,000,000
Preferred Stock [Member]
Description for amendment to certificate of formation	On August 7, 2018, we filed an amendment to our certificate of formation reducing our aggregate authorized preferred stock from 10,000,000 to 5,000,000 shares
2017 Stock Option Plan | Chief Executive Officer [Member]
Stock option, exercise price		2.00
Stock option exercised		250,000
Proceeds from exercise of stock option		$ 500
Series A Preferred Shares[Member]
Preferred stock, authorized shares	20,000
Preferred stock, par value	$ 0.001
Pelican [Member] | Merger Agreement [Member]
Common stock, shares issued					2,881,411
Ownership percentage					75.40%

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Accrued interest - related party	$ 26		$ 26		$ 31
Interest expense	5	$ 3	14	$ 12
PPF [Member]
Principal payments	300	200	800	200
Interest expense	$ 81	$ 92	300	$ 300
Additional borrowing			$ 700
Pelican [Member] | Series A Preferred Stock [Member]
Convertible preferred stock, shares					17,292
Shares issuable upon exercise of preferred stock					2,881,400
Preferred Stock, Liquidation Preference, Per Share					$ 1,000
Preferred Stock, Liquidation Preference, Value					$ 17,300
Pelican [Member] | Common Stock [Member]
Ownership percentage hold by related party on as-if-converted basis					75.40%

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Numerator:
Net income available to common stockholders	$ (256)	$ 303	$ (359)	$ 32
Denominator:
Weighted average shares used in basic earnings per share		802,331		728,460
Series A convertible preferred stock		2,881,400		2,881,400
Stock options issued under the 2017 Plan		730,503		805,152
Weighted average shares used in diluted earnings per share		4,414,234		4,415,012
Basic earnings per share	$ (0.07)	$ 0.38	$ (0.10)	$ 0.04
Diluted earnings per shares	$ (0.07)	$ 0.07	$ (0.10)	$ 0.01

RESTATEMENT OF PRIOR YEAR FIN_3

RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Depreciation and amortization		$ 867		$ 1,737
Total expenses	$ 4,152	4,150	$ 12,268	12,916
Loss from operations	(155)	368	(49)	326
Loss before income taxes	(246)	273	(328)	44
Net income available to common stockholders	$ (256)	$ 303	$ (359)	$ 32
Income (loss) per common share - basic	$ (0.07)	$ 0.38	$ (0.10)	$ 0.04
Diluted earnings per shares	$ (0.07)	$ 0.07	$ (0.10)	$ 0.01
As Reported [Member]
Depreciation and amortization		$ 862		$ 2,641
Total expenses		4,171		12,979
Loss from operations		347		263
Loss before income taxes		252		(19)
Net income available to common stockholders		$ 282		$ (31)
Income (loss) per common share - basic		$ 0.35		$ (0.04)
Diluted earnings per shares		$ 0.06		$ (0.04)
Adjustment [Member]
Depreciation and amortization		$ (21)		$ (63)
Total expenses		(21)		(63)
Loss from operations		21		63
Loss before income taxes		21		63
Net income available to common stockholders		$ 21		$ 63
Income (loss) per common share - basic		$ 0.03		$ 0.08
Diluted earnings per shares		$ 0.01		$ 0.01
As Restated [Member]
Depreciation and amortization		$ 841		$ 2,578
Total expenses		4,150		12,916
Loss from operations		368		326
Loss before income taxes		273		44
Net income available to common stockholders		$ 303		$ 32
Income (loss) per common share - basic		$ 0.38		$ 0.04
Diluted earnings per shares		$ 0.07		$ 0.01

RESTATEMENT OF PRIOR YEAR FIN_4

RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS (Details Narrative) $ in Thousands	Dec. 31, 2016USD ($)
Tiger [Member]
Sale of assets to Tiger	$ 18,600

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - shares	1 Months Ended
	Oct. 09, 2019	Sep. 30, 2019	Dec. 31, 2018
Preferred stock, authorized		4,980,000	4,980,000
Common stock, authorized		15,000,000	15,000,000
Subsequent Event [Member]
Preferred stock, authorized	1,000,000	5,000,000	5,000,000
Common stock, authorized	5,000,000	15,000,000	15,000,000
Description for amendment to certificate of formation	We filed an amendment to our certificate of formation reducing our authorized common shares from 15,000,000 to 5,000,000 and reducing our authorized preferred stock from 5,000,000 to 1,000,000.