RELATED PARTY TRANSACTIONS	12 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]
NOTE 7 - RELATED PARTY TRANSACTIONS	From time-to-time, the Company engages in business transactions with related parties, including Pelican and PPF. *Former Controlling Shareholder – Pelican* Beginning January 31, 2017, upon completion of the Recapitalization, Pelican held the power to vote the substantial majority of the Company’s outstanding common stock. As of December 31, 2018, six of our seven board members, including two of our executive officers, and our Chief Financial Officer held an ownership interest in Pelican. On January 31, 2017, we issued 16,092 shares of Series A convertible preferred stock to Pelican in connection with the Recapitalization. On May 23, 2017, in consideration of the increase in the revolving credit facility and the extension of the final maturity date of the Related Party Credit Facility, the Company issued Pelican an amendment fee of 1,200 shares of Series A convertible preferred stock. Each share of Series A convertible preferred stock could be converted into 166.632 shares of the Company’s common stock at any time at the option of the shareholder and had a liquidation preference of $1,000 per share. All shares of the Series A convertible preferred stock voted on an “as if converted” basis. As of December 31, 2018 and 2017, Pelican owned 17,292 shares of Series A convertible preferred stock which was convertible into 2,881,400 common shares and carried a liquidation preference of $17.3 million. On an as-if-converted basis, Pelican owned approximately 75.4% and 80.7% of our common stock (excluding the impact of options) as of December 31, 2018 and 2017, respectively. As such, Pelican, who owned 100% of the Series A convertible preferred stock, controlled the substantial majority of votes of Aly Energy. On January 28, 2019, we executed an Agreement and Plan of Merger (“Merger Agreement”) with Pelican 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 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. Because the members and membership interests of PPF are the same as Pelican, PPF is a related party. See Note 4 – Long-Term Debt – Related Party for further detail on the Related Party Credit Facility. In connection with our Related Party Credit Facility, during each of the years ended December 31, 2018 and 2017, we recorded interest expense of approximately $0.4 million. In addition, approximately $0.3 million of expense was recorded during the year ended December 31, 2017 related to a debt modification fee in connection with Amendment No. 2 to the Related Party Credit Facility which was entered into on May 23, 2017. The fee consisted of 1,200 shares of our Series A convertible preferred stock. Approximately $0.2 million of the aggregate interest expense on the Related Party Credit Facility recorded during the year ended December 31, 2017 was included in the obligations exchanged as part of the Recapitalization. Our consolidated balance sheet includes accrued interest under the Related Party Credit Facility of approximately $31,000 and $26,000 as of December 31, 2018 and 2017, respectively. *Other Related Party Transactions* Tim Pirie, appointed as a director of the Company on March 3, 2015, holds a 30% ownership interest in Canadian Nitrogen Services, Ltd. (“CNS”), one of the sellers involved with an acquisition completed in April 2014. Part of the acquisition price was payable in contingent consideration and part of the purchase price was payable in redeemable preferred stock. On January 31, 2017, in connection with the Recapitalization, the remaining contingent consideration liability and the redeemable preferred stock were converted into 22,875 and 151,972 shares of the Company’s common stock, respectively, of which CNS received 46,032 shares.

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2018

From time-to-time, the Company engages in business transactions with related parties, including Pelican and PPF.

Former Controlling Shareholder – Pelican

Beginning January 31, 2017, upon completion of the Recapitalization, Pelican held the power to vote the substantial majority of the Company’s outstanding common stock. As of December 31, 2018, six of our seven board members, including two of our executive officers, and our Chief Financial Officer held an ownership interest in Pelican.

On January 31, 2017, we issued 16,092 shares of Series A convertible preferred stock to Pelican in connection with the Recapitalization. On May 23, 2017, in consideration of the increase in the revolving credit facility and the extension of the final maturity date of the Related Party Credit Facility, the Company issued Pelican an amendment fee of 1,200 shares of Series A convertible preferred stock. Each share of Series A convertible preferred stock could be converted into 166.632 shares of the Company’s common stock at any time at the option of the shareholder and had a liquidation preference of $1,000 per share. All shares of the Series A convertible preferred stock voted on an “as if converted” basis.

As of December 31, 2018 and 2017, Pelican owned 17,292 shares of Series A convertible preferred stock which was convertible into 2,881,400 common shares and carried a liquidation preference of $17.3 million. On an as-if-converted basis, Pelican owned approximately 75.4% and 80.7% of our common stock (excluding the impact of options) as of December 31, 2018 and 2017, respectively. As such, Pelican, who owned 100% of the Series A convertible preferred stock, controlled the substantial majority of votes of Aly Energy.

On January 28, 2019, we executed an Agreement and Plan of Merger (“Merger Agreement”) with Pelican 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 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. Because the members and membership interests of PPF are the same as Pelican, PPF is a related party. See Note 4 – Long-Term Debt – Related Party for further detail on the Related Party Credit Facility.

In connection with our Related Party Credit Facility, during each of the years ended December 31, 2018 and 2017, we recorded interest expense of approximately $0.4 million. In addition, approximately $0.3 million of expense was recorded during the year ended December 31, 2017 related to a debt modification fee in connection with Amendment No. 2 to the Related Party Credit Facility which was entered into on May 23, 2017. The fee consisted of 1,200 shares of our Series A convertible preferred stock. Approximately $0.2 million of the aggregate interest expense on the Related Party Credit Facility recorded during the year ended December 31, 2017 was included in the obligations exchanged as part of the Recapitalization.

Our consolidated balance sheet includes accrued interest under the Related Party Credit Facility of approximately $31,000 and $26,000 as of December 31, 2018 and 2017, respectively.

Other Related Party Transactions

Tim Pirie, appointed as a director of the Company on March 3, 2015, holds a 30% ownership interest in Canadian Nitrogen Services, Ltd. (“CNS”), one of the sellers involved with an acquisition completed in April 2014. Part of the acquisition price was payable in contingent consideration and part of the purchase price was payable in redeemable preferred stock. On January 31, 2017, in connection with the Recapitalization, the remaining contingent consideration liability and the redeemable preferred stock were converted into 22,875 and 151,972 shares of the Company’s common stock, respectively, of which CNS received 46,032 shares.

Aly Energy Services, Inc. 10-K