ARCIS RESOURCES CORPORATION | |
(Exact name of registrant as specified in its charter)
|
|
Nevada
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37-1563401
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(State of other jurisdiction of
|
(IRS Employer
|
incorporation or organization
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Identification No.)
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4320 Eagle Point Parkway, Suite A, Birmingham Alabama
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35242
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(Address of principal executive offices)
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(Zip Code)
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(205) 453-9650 | |
(Registrant’s telephone number including area code) |
Item 1.01
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Entry into a Material Definitive Agreement
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Item 2.01
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Completion of Acquisition of Assets
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Item 2.03
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Creation of a Direct Financial Obligation
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Item 3.02
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Unregistered Sale of Equity Securities
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Compensatory Arrangements of Certain Officers
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3-a
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Amended and Restated Bylaws of Arcis Resources Corporation
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10-a
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Amended and Restated Exchange Agreement dated July 15, 2011 among Arcis Resources Corporation, the members of American Plant Services, LLC, and the shareholders of Mobile Fluid Recovery, Inc.
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10-b
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Amended and Restated Executive Employment Agreement, amended on July 15, 2011, between Arcis Resources Corporation and Kenneth A. Flatt, Jr.
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10-c
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Amended and Restated Executive Employment Agreement, amended on July 15, 2011, between Arcis Resources Corporation and Trevis Lyon.
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10-d
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Amended and Restated Executive Employment Agreement, amended on July 15, 2011, between Arcis Resources Corporation and Robert Di Marco.
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Dated: July 15, 2011
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Arcis Resources Corporation
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By: Kenneth A. Flatt, Jr.
|
|
Kenneth A. Flatt, Jr.
Chief Executive Officer
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PAGE
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FINANCIAL STATEMENTS
|
|
YEARS ENDED DECEMBER 31, 2010 AND 2009
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|
REPORT OF INDEPENDENT AUDITOR
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F-1
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BALANCE SHEETS
|
F-2-3
|
STATEMENTS OF OPERATIONS
|
F-4
|
STATEMENTS OF CHANGES IN OWNERS’ EQUITY
|
F-5
|
STATEMENTS OF CASH FLOWS
|
F-6-7
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NOTES TO FINANCIAL STATEMENTS
|
F-8-21
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SIX MONTHS ENDED JUNE 30, 2011 AND 2010
|
|
BALANCE SHEETS
|
F-22-23 |
STATEMENTS OF OPERATIONS | F-24 |
STATEMENTS OF CHANGES IN OWNERS' EQUITY | F-25 |
STATEMENTS OF CASH FLOW | F-26 |
NOTES TO FINANCIAL STATEMENTS | F-27-38 |
ASSETS
|
||||||||
2010
|
2009
|
|||||||
Current Assets
|
||||||||
Cash
|
$ | 17,094 | $ | 9,421 | ||||
Accounts receivable, net of allowance for doubtful
|
||||||||
accounts of $25,000 and $0 for 2010 and 2009
|
1,709,041 | 2,060,075 | ||||||
Prepaid expenses
|
6,277 | - | ||||||
Other current assets
|
- | 793 | ||||||
Total current assets
|
1,732,412 | 2,070,289 | ||||||
Property and Equipment
|
||||||||
Building
|
151,534 | 151,534 | ||||||
Land
|
38,000 | 38,000 | ||||||
Computer equipment
|
123,014 | 96,597 | ||||||
Furniture and fixtures
|
77,126 | 61,339 | ||||||
Machinery and equipment
|
10,295,550 | 10,173,435 | ||||||
Trucks and automobiles
|
1,406,238 | 1,198,832 | ||||||
12,091,462 | 11,719,737 | |||||||
Less: Accumulated depreciation
|
(6,020,375 | ) | (4,708,479 | ) | ||||
Property and equipment, net
|
6,071,087 | 7,011,258 | ||||||
Other Assets
|
||||||||
Loan costs, net of accumulated amortization of
|
||||||||
$30,385 and $25,119 in 2010 and 2009,
|
34,453 | 39,719 | ||||||
Patents, net of accumulated amortization of
|
||||||||
$3,762 in 2010
|
66,073 | - | ||||||
Other assets
|
4,985 | 14,102 | ||||||
Total other assets
|
105,511 | 53,821 | ||||||
TOTAL ASSETS
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$ | 7,909,010 | $ | 9,135,368 |
LIABILITIES AND OWNERS' EQUITY
|
||||||||
2010
|
2009
|
|||||||
Current Liabilities
|
||||||||
Accounts payable and accrued expenses
|
$ | 880,779 | $ | 764,035 | ||||
Note payable
|
1,350,227 | 1,383,922 | ||||||
Current portion of long-term debt
|
1,769,768 | 1,447,895 | ||||||
Current portion of capital lease obligations
|
143,362 | 286,524 | ||||||
Income tax payable
|
19,919 | - | ||||||
Due to related parties
|
14,995 | - | ||||||
Other current liabilities
|
144,705 | 33,316 | ||||||
Total current liabilities
|
4,323,755 | 3,915,692 | ||||||
Long-term Liabilities
|
||||||||
Long-term debt, less current portion
|
2,725,720 | 4,115,227 | ||||||
Capital lease obligations, less current portion
|
309,410 | 561,399 | ||||||
Deferred income taxes
|
31,514 | - | ||||||
Total long-term liabilities
|
3,066,644 | 4,676,626 | ||||||
Total liabilities
|
7,390,399 | 8,592,318 | ||||||
Owners' Equity
|
||||||||
American Plant Servies, LLC members' equity
|
503,214 | 543,050 | ||||||
Noncontrolling interest in consolidated subsidiary
|
15,397 | - | ||||||
Total owners' equity
|
518,611 | 543,050 | ||||||
TOTAL LIABILITIES AND
|
||||||||
OWNERS' EQUITY
|
$ | 7,909,010 | $ | 9,135,368 |
2010
|
2009
|
|||||||
Sales
|
$ | 11,503,132 | $ | 8,756,904 | ||||
Cost of Sales
|
7,664,481 | 6,184,415 | ||||||
Gross Profit
|
3,838,651 | 2,572,489 | ||||||
Operating Expenses
|
2,740,178 | 1,883,087 | ||||||
Income From Operations
|
1,098,473 | 689,402 | ||||||
Other Income (Expense)
|
||||||||
Miscellaneous income (expense)
|
24,362 | (4,377 | ) | |||||
Interest expense
|
(651,743 | ) | (704,846 | ) | ||||
Gain (loss) on sale of equipment
|
5,762 | (1,223 | ) | |||||
Total other income (expense)
|
(621,619 | ) | (710,446 | ) | ||||
Income (loss) before provision for income taxes
|
476,854 | (21,044 | ) | |||||
Provision for Income Taxes
|
51,433 | - | ||||||
Net Income (Loss)
|
425,421 | (21,044 | ) | |||||
Non-controlling Interest
|
(10,985 | ) | - | |||||
Net Income (Loss) Attributable to American Plant
|
||||||||
Services, LLC.
|
$ | 414,436 | $ | (21,044 | ) |
Members' Equity
|
Non-Controlling Interest
|
||||||||
Balance, December 31, 2008
|
$ | 814,556 | $ | - | |||||
Net income (loss)
|
(21,044 | ) | - | ||||||
Distributions
|
(250,462 | ) | - | ||||||
Balance, December 31, 2009
|
$ | 543,050 | $ | - | |||||
Non-controlling interest at
|
|||||||||
acquisition date
|
- | 4,412 | |||||||
Net income (loss)
|
414,436 | 10,985 | |||||||
Distributions
|
(454,272 | ) | - | ||||||
Balance, December 31, 2010
|
$ | 503,214 | $ | 15,397 |
2010
|
2009
|
|||||||
Cash Flows From Operating Activities
|
||||||||
Net income (loss)
|
$ | 425,421 | $ | (21,044 | ) | |||
Adjustments to reconcile net income (loss) to
|
||||||||
cash provided by operating activities:
|
||||||||
Depreciation
|
1,333,936 | 1,395,711 | ||||||
Amortization
|
9,028 | 6,118 | ||||||
Provision for bad debts
|
30,594 | 34,457 | ||||||
(Gain) loss on sale of equipment
|
(5,762 | ) | 1,223 | |||||
Provision for deferred income taxes
|
31,514 | - | ||||||
(Increase) decrease in:
|
||||||||
Accounts receivable
|
326,355 | (922,145 | ) | |||||
Prepaid expenses
|
(5,777 | ) | ||||||
Other current assets
|
793 | 3,108 | ||||||
Other assets
|
9,117 | - | ||||||
Increase (decrease) in:
|
||||||||
Accounts payable and accrued expense
|
71,071 | 393,125 | ||||||
Due to related parties
|
- | |||||||
Income tax payable
|
19,919 | - | ||||||
Other current liabilities
|
111,389 | (2,757 | ) | |||||
Net cash provided by operating activities
|
2,357,598 | 887,796 | ||||||
Cash Flows From Investing Activities
|
||||||||
Proceeds from sale of fixed assets
|
29,322 | 190,517 | ||||||
Note receivable collection
|
- | 57,500 | ||||||
Purchase of subsidiary, net of $2,910 cash acquired
|
(22,090 | ) | - | |||||
Purchases of property and equipment
|
(116,645 | ) | (53,095 | ) | ||||
Net cash (used) provided by investing activities
|
(109,413 | ) | 194,922 |
2010 | 2009 | |||||||
Cash Flows From Financing Activities
|
||||||||
Increase (decrease) in notes payable
|
(33,695 | ) | 703,480 | |||||
Repayments on long-term debt
|
(1,357,394 | ) | (1,103,763 | ) | ||||
Repayments on capital lease obligations
|
(395,151 | ) | (432,129 | ) | ||||
Loan costs paid
|
- | (1,272 | ) | |||||
Distributions to members
|
(454,272 | ) | (250,462 | ) | ||||
Net cash used in financing activities
|
(2,240,512 | ) | (1,084,146 | ) | ||||
Net increase (decrease) in cash
|
7,673 | (1,428 | ) | |||||
Cash, beginning of year
|
9,421 | 10,849 | ||||||
Cash, end of year
|
$ | 17,094 | $ | 9,421 |
Building
|
39 years
|
Computer equipment
|
3 - 5 years
|
Furniture and fixtures
|
5 - 7 years
|
Machinery and equipment
|
5 - 10 years
|
Trucks and automobiles
|
5 years
|
Purchase price
|
$ | 25,000 | ||
Liabilities assumed
|
111,770 | |||
$ | 136,770 | |||
Allocation of purchase amount:
|
||||
Cash
|
$ | 2,910 | ||
Accounts receivable
|
5,915 | |||
Other assets
|
500 | |||
Property and equipment
|
81,746 | |||
Patents
|
69,835 | |||
160,906 | ||||
Ownership Percentage
|
85 | % | ||
$ | 136,770 |
Long-term debt consists of the following:
|
||||||||
2010
|
2009
|
|||||||
Note payable to a commercial lender and the U.S. Small Business
|
$ | 1,111,332 | $ | 1,255,604 | ||||
Administration ("SBA") in which the SBA guaranteed 75% of the
|
||||||||
loan for $1,782,000, secured by real property, equipment with a book
|
||||||||
value of approximately $260,000 and guarantees of the members,
|
||||||||
payable in monthly installments of $21,493, including interest at the
|
||||||||
Wall Street Journal's prime rate plus 2.75%, which was 6.00% at
|
||||||||
December 31, 2010, maturing in January 2017
|
||||||||
Note payable to a bank, secured by the personal guarantees of two
|
63,286 | - | ||||||
members, payable in monthly installments of $1,531, including
|
||||||||
interest at 5.50%, maturing in October 2014.
|
||||||||
Notes payable to a finance company, secured by vehicles, with a book
|
376,280 | 328,008 | ||||||
value of approximately $386,900, payable in monthly installments
|
||||||||
ranging from $487 to $1,305, including interest ranging from 0.00%
|
||||||||
to 8.99% with maturity dates varying through September 2015.
|
2010
|
2009
|
|||||||
Notes payable to a finance company, secured by equipment, with a book
|
774,473 | 1,067,161 | ||||||
value of approximately $544,500, payable in monthly installments ranging
|
||||||||
from $1,060 to $15,679, including interest ranging from 6.39% to 8.23%,
|
||||||||
with maturity dates varying through August 2013.
|
||||||||
Notes payable to a finance company, secured by equipment, with a book
|
179,451 | 229,031 | ||||||
value of approximately $126,900, payable in monthly installments ranging
|
||||||||
from $2,111 to $4,807, including interest of 16.65%, maturing in July 2013
|
||||||||
Notes payable to a finance company, secured by equipment, with a book
|
209,852 | 289,444 | ||||||
value of approximately $308,800, payable in monthly installments of
|
||||||||
$8,091, including interest of 6.95%, maturing in April 2013
|
||||||||
Note payable to a finance company, secured by a vehicle, payable in
|
- | 1,843 | ||||||
monthly installments of $620, including interest of 6.29%. The loan
|
||||||||
was repaid in March 2010.
|
||||||||
Note payable to a finance company, secured by equipment, payable in
|
- | 6,807 | ||||||
monthly installments of $211, including interest of 17.54%. The loan
|
||||||||
was repaid in July 2010.
|
||||||||
Note payable to a finance company, secured by equipment, with a book
|
16,936 | 21,833 | ||||||
value of approximately $22,600, payable in monthly installments of $731,
|
||||||||
including interest of 17,42%, maturing in October 2013.
|
||||||||
Note payable to a finance company, secured by equipment, with a book
|
1,763,878 | 2,363,391 | ||||||
value of approximately $1,570,600, payable in monthly installments of
|
||||||||
$79,357, including interest of 11.10%, maturing in November 2012.
|
||||||||
4,495,488 | 5,563,122 | |||||||
Less current portion
|
1,769,768 | 1,447,895 | ||||||
$ | 2,725,720 | $ | 4,115,227 |
2011
|
$ | 1,769,768 | ||
2012
|
1,519,726 | |||
2013
|
491,238 | |||
2014
|
246,902 | |||
2015
|
232,753 | |||
Thereafter
|
235,101 | |||
Total
|
$ | 4,495,488 |
2010
|
2009
|
|||||||
Machinery and equipment
|
$ | 901,996 | $ | 901,996 | ||||
Trucks and automobiles
|
323,488 | 323,488 | ||||||
Computer equipment
|
66,499 | 67,916 | ||||||
Less: Accumulated depreciation
|
(680,812 | ) | (495,652 | ) | ||||
Net Book Value
|
$ | 611,171 | $ | 797,748 |
2011
|
$ | 226,077 | ||
2012
|
197,137 | |||
2013
|
94,747 | |||
517,961 | ||||
Less: Amount representing interest
|
(65,189 | ) | ||
Present value of minimum lease payments
|
$ | 452,772 |
2011
|
$ | 91,500 | ||
2012
|
59,200 | |||
2013
|
3,600 | |||
2014
|
- | |||
2015
|
- | |||
Total
|
$ | 154,300 |
2010
|
2009
|
|||||||
Current:
|
||||||||
Federal
|
$ | 15,434 | $ | - | ||||
State
|
4,485 | - | ||||||
19,919 | - | |||||||
Deferred
|
31,514 | - | ||||||
Totals
|
$ | 51,433 | $ | - |
2010
|
2009
|
|||||||
Property and equipment
|
$ | 18,299 | $ | - | ||||
Patents
|
13,215 | - | ||||||
Totals
|
$ | 31,514 | $ | - |
2010
|
2009
|
|||||||
Cash paid during the year for interest
|
$ | 651,743 | $ | 704,846 | ||||
Equipment acquired through long-term debt
|
$ | 218,934 | $ | - |
2010
|
2009
|
|||||||
Acquisition of Mobile Fluid Recovery, Inc.
|
||||||||
Accounts receivable
|
$ | 5,915 | $ | - | ||||
Prepaid expense
|
500 | - | ||||||
Property and equipment
|
81,746 | |||||||
Patents
|
69,835 | - | ||||||
Accounts payable
|
(45,673 | ) | ||||||
Due to related parties
|
(14,995 | ) | ||||||
Lont-term debt assumed
|
(70,826 | ) | - | |||||
Non-controlling interest
|
(4,412 | ) | ||||||
$ | 22,090 | $ | - |
AMERICAN PLANT SERVICES, LLC AND SUBSIDIARY
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
JUNE 30, 2011 AND DECEMBER 31, 2010
|
||||||||
ASSETS
|
||||||||
As of
June 30,
2010
|
As of
December 31,
2010
|
|||||||
(unaudited)
|
(audited)
|
|||||||
Current Assets
|
||||||||
Cash
|
$ | 53,124 | $ | 17,094 | ||||
Accounts receivable, net of allowance for doubtful
|
||||||||
accounts of $25,000 for June 30,2011 and
|
||||||||
December 31, 2010
|
1,422,134 | 1,709,041 | ||||||
Prepaid expenses
|
155,489 | 6,277 | ||||||
Other current assets
|
26,051 | - | ||||||
Total current assets
|
1,656,798 | 1,732,412 | ||||||
Property and Equipment
|
||||||||
Building
|
151,534 | 151,534 | ||||||
Land
|
38,000 | 38,000 | ||||||
Computer equipment
|
123,014 | 123,014 | ||||||
Furniture and fixtures
|
77,126 | 77,126 | ||||||
Machinery and equipment
|
10,365,440 | 10,295,550 | ||||||
Trucks and automobiles
|
1,381,736 | 1,406,238 | ||||||
12,136,850 | 12,091,462 | |||||||
Less: Accumulated depreciation
|
(6,639,376 | ) | (6,020,375 | ) | ||||
Property and equipment, net
|
5,497,474 | 6,071,087 | ||||||
Other Assets
|
||||||||
Loan costs, net of accumulated amortization
|
34,570 | 34,453 | ||||||
Patents, net of accumulated amortization of
|
||||||||
$7,524 for June 30, 2011 and $3,762 for
|
||||||||
December 31, 2010
|
62,311 | 66,073 | ||||||
Other assets
|
4,985 | 4,985 | ||||||
Total other assets
|
101,866 | 105,511 | ||||||
TOTAL ASSETS
|
$ | 7,256,138 | $ | 7,909,010 |
AMERICAN PLANT SERVICES, LLC AND SUBSIDIARY
|
||||||||
CONSOLIDATED BALANCE SHEETS-CONTINUED
|
||||||||
AS OF JUNE 30, 2011 AND DECEMBER 31, 2010
|
||||||||
LIABILITIES AND OWNERS' EQUITY
|
||||||||
As of
June 30,
2010
|
As of
December 31,
2010
|
|||||||
(unaudited)
|
(audited)
|
|||||||
Current Liabilities
|
||||||||
Accounts payable and accrued expenses
|
$ | 1,508,247 | $ | 880,779 | ||||
Note payable
|
1,458,096 | 1,350,227 | ||||||
Current portion of long-term debt
|
4,018,711 | 1,769,768 | ||||||
Current portion of capital lease obligations
|
376,957 | 143,362 | ||||||
Income tax payable
|
19,919 | 19,919 | ||||||
Due to related parties
|
14,995 | 14,995 | ||||||
Lawsuit judgement
|
72,000 | - | ||||||
Other current liabilities
|
140,349 | 144,705 | ||||||
Total current liabilities
|
7,609,274 | 4,323,755 | ||||||
Long-term Liabilities
|
||||||||
Long-term debt, less current portion
|
39,924 | 2,725,720 | ||||||
Capital lease obligations, less current portion
|
- | 309,410 | ||||||
Deferred income taxes
|
31,514 | 31,514 | ||||||
Total long-term liabilities
|
71,438 | 3,066,644 | ||||||
Total liabilities
|
7,680,712 | 7,390,399 | ||||||
Owners' Equity
|
||||||||
American Plant Servies, LLC members' equity
|
(431,802 | ) | 503,214 | |||||
Noncontrolling interest in consolidated subsidiary
|
7,228 | 15,397 | ||||||
Total owners' equity
|
(424,574 | ) | 518,611 | |||||
TOTAL LIABILITIES AND
|
||||||||
OWNERS' EQUITY
|
$ | 7,256,138 | $ | 7,909,010 |
AMERICAN PLANT SERVICES, LLC AND SUBSIDIARY | ||||||||
STATEMENT OF OPERATIONS
|
||||||||
FOR THE SIX MONTHS ENDING JUNE 30, 2011 (CONSOLIDATED) | ||||||||
AND 2010 (UNCONSOLIDATED)
|
||||||||
Six Months Ending June 30,
|
||||||||
2011
|
2010
|
|||||||
(unaudited)
|
(unaudited)
|
|||||||
Sales
|
$ | 4,664,694 | $ | 6,080,090 | ||||
Cost of Sales
|
4,245,649 | 4,508,522 | ||||||
Gross Profit
|
419,045 | 1,571,568 | ||||||
Operating Expenses
|
991,909 | 501,613 | ||||||
Income From Operations
|
(572,864 | ) | 1,069,955 | |||||
Other Income (Expense)
|
||||||||
Miscellaneous income (expense)
|
(56,879 | ) | 43,031 | |||||
Interest expense
|
(139,111 | ) | (350,905 | ) | ||||
Gain (loss) on sale of equipment
|
- | 5,762 | ||||||
Total other income (expense)
|
(195,990 | ) | (302,112 | ) | ||||
Income (loss) before provision for income taxes
|
(768,854 | ) | 767,843 | |||||
Provision for Income Taxes
|
- | - | ||||||
Net Income (Loss)
|
(768,854 | ) | 767,843 | |||||
Non-controlling Interest
|
8,169 | - | ||||||
Net Income (Loss) Attributable to American Plant
|
||||||||
Services, LLC.
|
$ | (760,685 | ) | $ | 767,843 |
AMERICAN PLANT SERVICES, LLC AND SUBSIDIARY
|
|||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS EQUITY
|
|||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED) AND
|
|||||||||
THE YEAR ENDED DECEMBER 31, 2010 (AUDITED)
|
|||||||||
Members' Equity
|
Non-Controlling
Interest
|
||||||||
Balance, December 31, 2009
|
$ | 543,050 | $ | - | |||||
Non-controlling interest at
|
|||||||||
acquisition date
|
- | 4,412 | |||||||
Net income (loss)
|
414,436 | 10,985 | |||||||
Distributions
|
(454,272 | ) | - | ||||||
Balance, December 31, 2010
|
$ | 503,214 | $ | 15,397 | |||||
Net income (loss)
|
(760,685 | ) | (8,169 | ) | |||||
Distributions
|
(174,331 | ) | |||||||
Balance, June 30, 2011
|
$ | (431,802 | ) | $ | 7,228 |
AMERICAN PLANT SERVICES, LLC AND SUBSIDIARY
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
||||||||
FOR THE SIX MONTHS ENDING JUNE 30, 2011 AND 2010
|
||||||||
Six Months Ending June 30,
|
||||||||
2011
|
2010
|
|||||||
Cash Flows From Operating Activities
|
||||||||
Net income (loss)
|
$ | (768,854 | ) | $ | 767,843 | |||
Adjustments to reconcile net income (loss) to
|
||||||||
cash provided by operating activities:
|
||||||||
Depreciation
|
619,001 | 606,531 | ||||||
Amortization
|
3,645 | - | ||||||
(Increase) decrease in:
|
||||||||
Accounts receivable
|
286,907 | 173,686 | ||||||
Prepaid expenses
|
(149,212 | ) | (57,193 | ) | ||||
Other current assets
|
(26,051 | ) | (66,816 | ) | ||||
Other assets
|
- | (4,985 | ) | |||||
Increase (decrease) in:
|
||||||||
Accounts payable and accrued expense
|
627,468 | (212,415 | ) | |||||
Lawsuit judgement
|
72,000 | - | ||||||
Other current liabilities
|
(4,356 | ) | 47,869 | |||||
Net cash provided by operating activities
|
660,548 | 1,254,520 | ||||||
Cash Flows From Investing Activities
|
||||||||
Proceeds from sale of fixed assets
|
- | 4,449 | ||||||
Purchases of property and equipment
|
(45,388 | ) | - | |||||
Net cash (used) provided by investing activities
|
(45,388 | ) | 4,449 | |||||
Cash Flows From Financing Activities
|
||||||||
Increase (decrease) in notes payable
|
107,869 | (156,363 | ) | |||||
Repayments on long-term debt
|
(436,853 | ) | (731,684 | ) | ||||
Repayments on capital lease obligations
|
(75,815 | ) | (149,865 | ) | ||||
Distributions to members
|
(174,331 | ) | (211,226 | ) | ||||
Net cash used in financing activities
|
(579,130 | ) | (1,249,138 | ) | ||||
Net increase (decrease) in cash
|
36,030 | 9,831 | ||||||
Cash, beginning of year
|
17,094 | 9,421 | ||||||
Cash, as of June 30, 2011 and 2010
|
$ | 53,124 | $ | 19,252 |
Building
|
39 years
|
Computer equipment
|
3 - 5 years
|
Furniture and fixtures
|
5 - 7 years
|
Machinery and equipment
|
5 - 10 years
|
Trucks and automobiles
|
5 years
|
Purchase price
|
$ | 25,000 | ||
Liabilities assumed
|
111,770 | |||
$ | 136,770 | |||
Allocation of purchase amount:
|
||||
Cash
|
$ | 2,910 | ||
Accounts receivable
|
5,915 | |||
Other assets
|
500 | |||
Property and equipment
|
81,746 | |||
Patents
|
69,835 | |||
160,906 | ||||
Ownership Percentage
|
85 | % | ||
$ | 136,770 |
June 30,
2011
|
December 31,
2010
|
|||||||
Note payable to a commercial lender and the U.S. Small Business
|
$ | 1,075,211 | $ | 1,111,332 | ||||
Administration ("SBA") in which the SBA guaranteed 75% of the
|
||||||||
loan for $1,782,000, secured by real property, equipment with a
|
||||||||
book value of approximately $260,000 and guarantees of the members,
|
||||||||
payable in monthly installments of $21,493, including interest at the
|
||||||||
Wall Street Journal's prime rate plus 2.75%, which was 6.00% at
|
||||||||
June 30, 2011 and December 31, 2010. As of the current date
|
||||||||
the lender has declared the loan in default, and the Company is
|
||||||||
working with the lender to reach an accommodation.
|
||||||||
Note payable to a bank, secured by the personal guarantees of two
|
55,201 | 63,286 | ||||||
members, payable in monthly installments of $1,531, including
|
||||||||
interest at 5.50%, maturing in October 2014.
|
||||||||
Notes payable to a finance company, secured by vehicles, with a book
|
318,328 | 376,280 | ||||||
value of approximately $386,900, payable in monthly installments
|
||||||||
ranging from $487 to $1,305, including interest ranging from 0.00%
|
||||||||
to 8.99% with maturity dates varying through September 2015.
|
||||||||
As of the current date the lender has declared the loans in default,
|
||||||||
and the Company is working with the lender to reach an accommodation.
|
||||||||
Notes payable to a finance company, secured by equipment, with a
|
700,088 | 774,473 | ||||||
book value of approximately $544,500, payable in monthly installments
|
||||||||
ranging from $1,060 to $15,679, including interest ranging from
|
||||||||
6.39% to 8.23%, with maturity dates varying through August 2013.
|
||||||||
As of the current date the lender has declared the loans in default,
|
||||||||
and the Company is working with the lender to reach an accommodation.
|
||||||||
Notes payable to a finance company, secured by equipment, with a
|
146,619 | 179,451 | ||||||
book value of approximately $126,900, payable in monthly installments
|
||||||||
ranging from $2,111 to $4,807, including interest of 16.65%, maturing in
|
||||||||
in July 2013.As of the current date the lender has declared the loans
|
||||||||
in default, and the Company is working with the lender to reach an
|
||||||||
accommodation.
|
June 30,
2011
|
December 31,
2010
|
|||||||
Notes payable to a finance company, secured by equipment, with a book
|
196,089 | 209,852 | ||||||
value of approximately $308,800, payable in monthly installments of
|
||||||||
$8,091, including interest of 6.95%, maturing in April 2013
|
||||||||
As of the current date the lender has declared the loans in default,
|
||||||||
and the Company is working with the lender to reach an accommodation.
|
||||||||
Note payable to a finance company, secured by equipment, with a book
|
15,297 | 16,936 | ||||||
value of approximately $22,600, payable in monthly installments of $731,
|
||||||||
including interest of 17,42%, maturing in October 2013.
|
||||||||
As of the current date the lender has declared the loan in default,
|
||||||||
and the Company is working with the lender to reach an accommodation.
|
||||||||
Note payable to a finance company, secured by equipment, with a book
|
1,551,802 | 1,763,878 | ||||||
value of approximately $1,570,600, payable in monthly installments of
|
||||||||
$79,357, including interest of 11.10%, maturing in November 2012.
|
||||||||
As of the current date the lender has declared the loan in default,
|
||||||||
and the Company is working with the lender to reach an
|
||||||||
accommodation.
|
||||||||
4,058,635 | 4,495,488 | |||||||
Less current portion
|
4,018,711 | 1,769,768 | ||||||
Long-term debt
|
$ | 39,924 | $ | 2,725,720 |
2011
|
$ | 4,018,711 | ||
2012
|
15,735 | |||
2013
|
16,600 | |||
2014
|
7,589 | |||
2015
|
- | |||
Total
|
$ | 4,058,635 |
June 30,
2011
|
December 31,
2010
|
|||||||
Machinery and equipment
|
$ | 901,996 | $ | 901,996 | ||||
Trucks and automobiles
|
323,488 | 323,488 | ||||||
Computer equipment
|
66,499 | 66,499 | ||||||
Less: Accumulated depreciation
|
(770,812 | ) | (680,812 | ) | ||||
Net book Value
|
$ | 521,171 | $ | 611,171 |
June 30,
2011
|
December 31,
2010
|
|||||||
Current:
|
||||||||
Federal
|
$ | - | $ | 15,434 | ||||
State
|
- | 4,485 | ||||||
- | 19,919 | |||||||
Deferred
|
- | 31,514 | ||||||
Total | $ | - | $ |
51,433
|
June 30,
2011
|
December 31,
2010
|
|||||||
Property and equipment
|
$ | - | $ | 18,299 | ||||
Patents
|
- | 13,215 | ||||||
|
||||||||
Totals
|
$ | - | $ | 31,514 |
i.
|
execute and deliver to ARCS an amendment to the Articles of Organization of APS, suitable for recording in the Alabama Probate Court, which shall transfer all of the membership interests in APS to ARCS; and
|
ii.
|
deliver to ARCS certificates for all of the outstanding shares of MFR not owned by APS, duly endorsed for transfer to APS.
|
a.
|
At the Closing the Equity Holders shall deliver to ARCS the following:
|
A.
|
The security instruments described in Section 2(a) of this Agreement.
|
B.
|
The APS Note described in Section 2(d) of this Agreement.
|
C.
|
IRS Form 8832 described in Section 2(d) of this Agreement.
|
D.
|
The Certification of the Chief Executive Officer of APS described in Section 7b(A) hereof.
|
E.
|
A certificate of good standing for each of the Acquired Companies, issued by the domiciliary jurisdiction no less than 60 days prior to the Closing Date.
|
F.
|
All of the books and records of the Acquired Companies.
|
b.
|
At the Closing, ARCS shall deliver to the Equity Holders the following:
|
A.
|
The stock certificates described in Section 2(b) of this Agreement.
|
B.
|
The Notes described in Section 2(c) of this Agreement.
|
C.
|
The Certification of the Designated Agent of ARCS described in Section 7a(A) hereof.
|
·
|
On the Closing Date, one million (1,000,000) shares multiplied by the Remaining Percentage on the Closing Date.
|
·
|
On the date that is 120 days after the Closing Date, five hundred thousand (500,000) shares multiplied by the Remaining Percentage on that date.
|
·
|
On the date that is 180 days after the Closing Date, five hundred thousand (500,000) shares multiplied by the Remaining Percentage on that date.
|
|
(b)
|
If personally delivered, when delivered.
|
|
Robert Brantl, Esq.
|
|
52 Mulligan Lane
|
|
Irvington, NY 10533
|
|
Facsimile: 914-693-1807
|
Acquired Company
|
Equity Holder
|
ARCS Shares to be Issued
|
8% Note Holders
|
APS
|
Kenneth A. Flatt, Jr.
|
3,051,125
|
$450,000
|
Deborah K. Flatt
|
4,794,625
|
--
|
|
Trevis Lyon
|
435,875
|
$25,000
|
|
James Goins
|
435,875
|
$25,000
|
|
MFR
|
Clifford Briggs
|
47,143
|
--
|
David Briggs
|
35,357
|
--
|
·
|
The closing date of any sale of equity or debt securities by the Payor from which gross proceeds of no less than four million dollars are obtained (including any such sale that, with prior sales, aggregates four million dollars or more);
|
·
|
Any date on which the net cash provided by operations of the Company (determined in accordance with generally accepted accounting principles) for the period from and after the Closing Date is a positive number, except that accrued interest and, then, principal shall be due only to the extent of such positive cash flow, which shall be allocated among all Notes issued in this template in proportion to their principal amount; or
|
·
|
July 15, 2012.
|
_______________________________
|
|
Robert Di Marco
|
|
Designated agent on behalf of
|
|
Arcis Resources Corporation
|
|
(a)
|
The Executive shall be paid a salary (the “Salary”) for the period commencing on the Closing Date at an annual rate of One Hundred Eighty Thousand Dollars ($180,000.00), payable in equal installments in accordance with the Company’s payroll policies. Upon the Completion of a Secondary Offering or achievement of the Net Income Threshold, the Executive’s Salary shall be increased to an annual rate of Four Hundred Thousand Dollars ($420,000.00) for the duration of the Employment Period. The Salary shall be pro-rated for any Fiscal Year hereunder which is less than a full Fiscal Year. The Salary will be subject to annual rate increases of 5% per year to compensate for inflation and cost of living expense increases. The Executive will not be required to relocate from his existing location in Birmingham, Alabama. In the event that relocation is deemed to be in the best interest of the Company, then an increased revised compensation package and relocation package will be required and will be negotiated at that time.
|
|
(b)
|
American Plant Services Compensation. Until the increase in compensation provided Section 5(a), APS shall pay the Executive additional salaried compensation. The additional compensation shall equal the lesser of (i) $120,000 or (ii) APS revenue generated cash flow during the period for which compensation is being paid. .
|
Number of Stock Options
|
Vesting Date
|
|
200,000 shares
|
September 15, 2011
|
|
150,000 shares
|
September 15, 2012 | |
150,000 shares
|
September 15, 2013
|
|
If to the Company:
|
Arcis Resources Corporation
|
4320 Eagle Point Pkwy Suite A
|
|
Birmingham, Al 35242
|
|
With a copy to
|
Robert Brantl, Esq.
|
52 Mulligan Lane
|
|
Irvington, NY 10533
|
|
If to Executive:
|
Kenneth A Flatt Jr.
|
1079 Legacy Drive
|
|
Birmingham, AL 35242
|
EXECUTIVE:
|
|
/s/ Kenneth A. Flatt, Jr.
|
|
Kenneth A Flatt Jr.
|
|
COMPANY:
|
|
Arcis Resources Corporation
|
|
By: /s/ Trevis Lyon
|
|
Trevis Lyon
|
|
Its: President
|
Name of Optionee:
|
Kenneth A Flatt Jr.
|
|
Number of Shares
|
||
Subject to Option:
|
500,000
|
|
Option Price Per Share:
|
$.30
|
|
Date of Grant:
|
July 15, 2011
|
|
Exercise Period
|
|||
Number of Shares
|
|||
Subject to Option
|
Vesting Date
|
Expiration Date
|
|
200,000
|
September 15, 2011
|
September 15, 2015
|
|
150,000
|
September 15, 2012
|
September 15, 2015
|
|
150,000
|
September 15, 2013
|
September 15, 2015
|
ARCIS RESOURCES CORPORATION
|
|
By: _______________________________
|
|
Trevis Lyon, President and C.O.O.
|
|
The undersigned hereby accepts the foregoing Option and the terms and conditions hereof.
|
|
__________________________________
|
|
Kenneth A Flatt Jr.
|
Number of Stock Options
|
Vesting Date
|
200,000 shares
|
September 15, 2011
|
150,000 shares
|
September 15, 2012
|
150,000 shares
|
September 15, 2013
|
Number of Stock Options
|
Vesting Date
|
300,000 shares
|
September 15, 2011
|
200,000 shares
|
September 15, 2013
|
If to the Company:
|
Arcis Resources Corporation.
|
|
4320 Eagle Point Pkwy Suite A
|
||
Birmingham, Al 35242
|
||
With a copy to
|
Robert Brantl, Esq.
|
|
52 Mulligan Lane
|
||
Irvington, NY 10533
|
||
If to Executive:
|
Trevis Lyon
|
|
1081 Inverness Cove Way
|
||
Birmingham, AL 35242
|
EXECUTIVE:
|
|
/s/ Trevis M. Lyon
|
|
Trevis M. Lyon
|
|
COMPANY:
|
|
Arcis Resources Corporation
|
|
By: /s/ Kenneth A. Flatt, Jr.
|
|
Kenneth A. Flatt, Jr.
|
|
Its: Chief Executive Officer
|
|
Number of Shares Subject to Option
|
500,000
|
500,000
|
Option Price Per Share
|
$.30
|
$.50
|
Date of Grant
|
July 15, 2011
|
July 15, 2011
|
Exercise Period
|
|||
Number of Shares
|
|||
Subject to Option
|
Vesting Date
|
Expiration Date
|
|
200,000/300,000
|
September 15, 2011
|
September 15, 2015
|
|
150,000
|
September 15, 2012
|
September 15, 2015
|
|
150,000/200,000
|
September 15, 2013
|
September 15, 2015
|
ARCIS RESOURCES CORPORATION
|
|
By: _______________________________
|
|
Kenneth Flatt Jr, Chief Executive Officer
|
__________________________________
|
|
Trevis M. Lyon
|
Number of Stock Options
|
Vesting Date
|
200,000 shares
|
September 15, 2011
|
150,000 shares
|
September 15, 2012
|
150,000 shares
|
September 15, 2013
|
If to the Company:
|
Arcis Resources Corporation
|
||
4320 Eagle Point Pkwy Suite A
|
|||
Birmingham, Al 35242
|
|||
With a copy to
|
Robert Brantl, Esq.
|
||
52 Mulligan Lane
|
|||
Irvington, NY 10533
|
|||
If to Executive:
|
Robert Di Marco
|
||
6247 Indian Forest Circle
|
|||
Lake Worth, Fl 33467
|
EXECUTIVE:
|
|
/s/ Robert Di Marco
|
|
Robert Di Marco
|
|
COMPANY:
|
|
Arcis Resources Corporation
|
|
By: /s/ Kenneth A. Flatt, Jr.
|
|
Kenneth A. Flatt, Jr.
|
|
Its: Chief Executive Officer
|
Name of Optionee:
|
Robert Di Marco
|
Number of Shares
|
|
Subject to Option:
|
500,000
|
Option Price Per Share:
|
$.30
|
Date of Grant:
|
July 15, 2011
|
Exercise Period
|
|||
Number of Shares
|
|||
Subject to Option
|
Vesting Date
|
Expiration Date
|
|
200,000
|
September 15, 2011
|
September 15, 2015
|
|
150,000
|
September 15, 2012
|
September 15, 2015
|
|
150,000
|
September 15, 2013
|
September 15, 2015
|
Arcis Resources Corporation
|
|
By: _______________________________
|
|
Trevis Lyon, President
|
__________________________________
|
|
Robert Di Marco
|