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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 1-31398
NATURAL GAS SERVICES GROUP, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 75-2811855
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2911 SCR 1260
Midland, Texas 79706
(Address of principal executive offices)
(432) 563-3974
(Issuer's Telephone number, including area code)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period than the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Outstanding at
Class March 31, 2004
----------------------------- -----------------------------
Common Stock, $.001 par value 5,379,835
-----------------------------
Transitional Small Business Disclosure Format (Check one): Yes No X
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NATURAL GAS SERVICES GROUP, INC.
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
-----------------------------
Unaudited Consolidated Balance Sheet......................................Page 1
Unaudited Consolidated Income Statements..................................Page 2
Unaudited Consolidated Statements of Cash Flows...........................Page 3
Notes to Unaudited Consolidated Financial Statements......................Page 4
Item 2. Management's Discussion and Analysis or Plan of Operation........Page 7
-------
Item 3. Control and Procedures...........................................Page 9
-------
Part II - OTHER INFORMATION
Item 1. Legal Proceedings...............................................Page 10
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Item 5. Other Information...............................................Page 10
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Item 6. Exhibits and Reports on Form 8-K................................Page 10
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Signatures...............................................................Page 13
Natural Gas Services Group, Inc.
Consolidated Balance Sheet
(unaudited)
March 31, 2004
ASSETS
Current Assets:
Cash and cash equivalents $ 196,138
Accounts receivable - trade 1,049,088
Accounts receivable - other 1,500,000
Inventory 3,263,642
Prepaid expenses 160,042
-----------
Total current assets 6,168,910
Lease equipment, net $20,942,965
Other property, plant and equipment, net 2,873,796
Goodwill, net 2,589,655
Patents, net 107,070
Other assets 103,400
-----------
Total assets $32,785,796
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt and capital lease $ 2,480,677
Line of Credit 119,251
Accounts payable and accrued liabilities 2,285,024
Unearned Income 3,111
-----------
Total current liabilities 4,888,063
Long term debt and capital lease, less current portion 8,063,394
Subordinated notes, net 1,425,583
Deferred income tax payable 2,094,204
-----------
Total liabilities 16,471,244
SHAREHOLDERS' EQUITY
Common stock 53,798
Paid in capital 11,228,899
Retained earnings 5,031,855
-----------
Total shareholders' equity 16,314,552
-----------
Total liabilities and shareholders' equity $32,785,796
===========
The accompanying notes are an integral part of the consolidated balance sheet
1
Natural Gas Services Group, Inc.
Consolidated Income Statements
(unaudited)
Three months ended March 31,
----------------------------
2004 2003
------------ ------------
Revenue:
Sales $ 889,965 $ 565,272
Service and maintenance income 423,602 377,310
Leasing income 2,254,784 1,401,163
------------ ------------
3,568,351 2,343,745
Cost of revenue:
Cost of sales 646,394 433,173
Cost of service and maintenance 336,250 335,301
Cost of leasing 568,409 360,917
------------ ------------
1,551,053 1,129,391
------------ ------------
Gross Margin 2,017,298 1,214,354
Operating Cost:
Selling expense 177,389 138,947
General and administrative expense 488,259 380,166
Depreciation and amortization 526,685 361,966
------------ ------------
1,192,334 881,079
------------ ------------
Operating income 824,964 333,275
Interest expense (180,608) (154,083)
Other income 1,501,081 22,547
------------ ------------
Income before income taxes 2,145,437 201,739
Provision for income tax 251,698 83,856
------------ ------------
Net income 1,893,739 117,883
Preferred dividends 27,922 31,010
------------ ------------
Net income available to common shareholders $ 1,865,817 $ 86,873
============ ============
Earnings per share:
Basic $ 0.37 $ 0.02
Diluted $ 0.36 $ 0.02
Weighted average Shares:
Basic 5,065,327 4,857,632
Diluted 5,221,441 5,059,456
The accompanying notes are an integral part of the consolidated income
statements.
2
Natural Gas Services Group, Inc.
Consolidated Statements of Cash Flows
(unaudited)
Three Months Three Months
Ended Ended
March 31, 2004 March 31, 2003
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,893,739 $ 117,883
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 526,686 361,966
Deferred taxes 251,698 83,856
Amortization of debt issuance costs 16,239 16,239
Gain on disposal of assets -- (14,979)
Changes in operating assets and liabilities:
Trade and other receivables (232,493) (335,448)
Accounts receivable - other (1,500,000) --
Inventory (709,403) (658,519)
Prepaid expenses and other (53,012) 128,264
Accounts payable and accrued liabilities 1,213,472 146,651
Deferred income (204,104) 106,385
Other 3,273 (85,659)
-------------- --------------
NET CASH PROVIDED BY (USED IN) OPERATING 1,206,095 (133,361)
ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (2,530,447) (3,143,155)
Distribution from equity method investment -- 291,843
Proceeds from sale of property and equipment -- 105,000
Decrease in lease receivable -- 23,171
-------------- --------------
NET CASH USED IN INVESTING ACTIVITIES (2,530,447) (2,723,141)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from bank loans and line of credit 1,952,778 2,225,623
Repayments of long term debt (604,143) (440,505)
Proceeds from warrants exercised
23,575 --
Dividends paid on preferred stock (27,922) (31,010)
-------------- --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,344,288 1,754,108
-------------- --------------
NET CHANGE IN CASH AND CASH EQUIVALENTS 19,936 (1,102,394)
CASH AT BEGINNING OF PERIOD 176,202 2,713,638
-------------- --------------
CASH AT END OF PERIOD $ 196,138 $ 1,611,244
============== ==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid $ 180,608 $ 154,083
The accompanying notes are an integral part of the consolidated statements of
cash flows.
3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying unaudited financial statements present the
consolidated results of our company taken from our books and records. In our
opinion, such information includes all adjustments, consisting of only normal
recurring adjustments, which are necessary to make our financial position at
March 31, 2004 and the results of our operations for the three months periods
ended March 31, 2004 and 2003 not misleading. As permitted by the rules and
regulations of the Securities and Exchange Commission (SEC) the accompanying
financial statements do not include all disclosures normally required by
accounting principles generally accepted in United States of America. These
financial statements should be read in conjunction with the financial statements
included in our Annual Report on Form 10-KSB on file with the SEC. In our
opinion, the consolidated financial statements are a fair presentation of the
financial position, results of operations and cash flows for the periods
presented.
The results of operations for the three months ended March 31, 2004 are
not necessarily indicative of the results of operations to be expected for the
full fiscal year ending December 31, 2004.
(2) Stock-based Compensation
Statement of Financial Accounting Standards No. 123, ("SFAS 123")
"Accounting for Stock-Based Compensation," encourages, but does not require, the
adoption of a fair value-based method of accounting for employee stock-based
compensation transactions. We have elected to apply the provisions of Accounting
Principles Board Opinion No. 25 ("Opinion 25"), "Accounting for Stock Issued to
Employees," and related interpretations, in accounting for our employee
stock-based compensation plans. Under Opinion 25, compensation cost is measured
as the excess, if any, of the quoted market price of our stock at the date of
the grant above the amount an employee must pay to acquire the stock.
Had compensation costs for options granted to our employees been
determined based on the fair value at the grant dates consistent with the method
proscribed by SFAS No. 123, our net income and earnings per share would have
been reduced to the pro forma amounts listed below:
Three Months Ended
March 31,
2004 2003
------------- -------------
Pro forma impact of fair value method
Net income available to common shareholders, as reported $ 1,865,817 $ 86,873
Pro-forma stock-based compensation costs under the fair value
method, net of related tax (10,000) (7,683)
Pro-forma income applicable to common shares under the
fair-value method 1,855,817 79,190
Earnings per common share
Basic earnings per share reported 0.37 0.02
Diluted earnings per share reported 0.36 0.02
Pro-forma basic earnings per share under the fair value method 0.37 0.02
Pro-forma diluted earnings per share under the fair value method 0.36 0.02
4
Weighted average Black-Scholes fair value assumptions:
Risk free rate 4.0%-5.2% 4.0%-5.2%
Expected life 5-10 yrs 5-10 yrs
Expected volatility 44% 50.0%
Expected dividend yield 0.0% 0.0%
(3) Merger
On January 1, 2004, we merged our subsidiaries, Rotary Gas Systems Inc,
NGE Leasing Inc, and Great Lakes Compression Inc. with the parent Company,
Natural Gas Services Group Inc. This had no effect on our consolidated financial
position or results of operations, with the exception of a small impact on our
state tax expenses.
(4) Preferred Stock Conversion
In accordance with the provisions of the Convertible Series A Preferred
Stock of Natural Gas Services Group, Inc., on March 26, 2004 each share of
Preferred Stock automatically converted to one share of Common Stock. The
conversion occurred after the closing market price of the stock was equal to or
higher than $6.50 for 20 consecutive trading days. 315,154 Preferred shares were
converted at that time. Dividends payable at the conversion date were
approximately $25,355.
(5) Earnings per common share
The following table reconciles the numerators and denominators of the
basic and diluted earnings per share computation.
Three Months Ended
March 31,
--------------------------
2004 2003
----------- -----------
Basic earnings per share Numerator:
Net income $ 1,893,739 $ 117,883
Less: dividends on preferred shares (27,922) (31,010)
----------- -----------
Net income available to common shareholders $ 1,865,817 $ 86,873
=========== ===========
Denominator -
Weighted average common shares outstanding 5,065,327 4,857,632
=========== ===========
Basic earnings per share $ 0.37 $ 0.02
=========== ===========
Diluted earnings per share Numerator:
Net income $ 1,893,739 $ 117,883
Less: dividends on preferred shares (1) (27,922) (31,010)
----------- -----------
Net income available to common shareholders $ 1,865,817 $ 86,873
=========== ===========
5
Denominator :
Weighted average common shares outstanding 5,065,327 4,857,632
Dilutive effect of common stock options
and warrants 156,114 201,824
Conversion of preferred shares (1) -- --
----------- -----------
5,221,441 5,059,456
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Diluted earnings per share $ 0.36 $ 0.02
=========== ===========
(1) Preferred shares were anti-dilutive for the three months ended
March 31, 2004 and 2003
(6) Other Income
On March 15, 2004 the President and C.E.O. of our company, Mr. Wayne L.
Vinson, passed away after a battle with cancer. The Company held 2 life
insurance policies on him, 1 for $1,000,000 and 1 for $500,000, with the Company
as the beneficiary. At March 31, 2004, the amounts were recorded in Accounts
Receivable-other. The proceeds were received in April 2004.
6
Item 2. Management's Discussion and Analysis, or Plan of Operation
Overview
Our company provides products and services to the oil and gas industry
and is engaged in (1) the manufacture, service, sale, and rental of natural gas
compressors to enhance the productivity of oil and gas wells, and (2) the
manufacture, sale and rental of flares and flare ignition systems for plant and
production facilities. On January 1, 2004, we merged our subsidiaries into us.
Critical Accounting Policies and New Accounting Pronouncements
See our December 31, 2003 Form 10-KSB for a discussion of our critical
accounting policies and new accounting pronouncements. There have been no
substantive changes since that time.
Liquidity and Capital Resources
We have funded our operations through public and private offerings of
our common and preferred stock, subordinated debt and bank debt. Proceeds were
primarily used to pay debt and to fund the manufacture and fabrication of
additional units for our rental fleet of natural gas compressors.
At March 31, 2004, we had cash and cash equivalents of approximately
$196,000, working capital of $1,281,000 and non-subordinated debt of $10,544,000
of which approximately $2,481,000 was classified as current. We had positive net
cash flow from operating activities of approximately $1,206,000 during the first
three months of 2004. This was primarily from net income of $1,894,000 plus
depreciation and amortization of $527,000, an increase in deferred taxes of
$252,000, an increase in accounts payable and accrued liabilities of $1,213,000,
offset by an increase in accounts receivable-other of $1,500,000, an increase in
accounts receivable-trade of $232,000, a decrease in deferred income of
$204,000, and an increase in inventory of $709,000.
Our line of credit for $750,000 with interest at 1% over prime for one
year expired March 15, 2004 but was extended until June 15, 2004. Funds have
been drawn under the line of credit as of March 31, 2004 totaling $119,251.
In accordance with the provisions of the Convertible Series A Preferred
Stock of Natural Gas Services Group, Inc., on March 26, 2004 each share of
Preferred Stock automatically converted to one share of Common Stock. The
conversion occurred after the closing market price of the stock was equal to or
higher than $6.50 for 20 consecutive trading days. 315,154 Preferred shares were
converted at that time. Dividends payable at the conversion date were
approximately $25,355. As a result the conversion we will have a reduction in
expected dividend payments of approximately $75,000 for the remainder of the
year 2004.
On November 24,2003 we completed a new $10 million senior credit
facility with a $7 million initial borrowing base. The credit facility is a
Multiple Advance Term Promissory Note arranged by Western National Bank,
Midland, Texas. The interest rate is one percent over Wall Street prime rate.
Funds have been drawn under this line as of March 31, 2004 totaling $2,865,000.
Results of Operations
Sales revenue from outside sources increased from $565,000 to $890,000,
or 58% for the three months ended March 31, 2004 compared to the same period
ended March 31, 2003. This increase was mainly the result of an improvement in
the sale of compressors and flare units compared to the same period in 2003.
Because our products are custom-built, fluctuations in revenue from outside
sources is not unusual.
7
[GRAPHIC OMITTED]
Service and maintenance revenue increased from $377,000 to $424,000, or
12% for the three months ended March 31, 2004 compared to the same period ended
March 31, 2003.
Leasing revenue increased from $1,401,000 to $2,255,000, or 61% for the
three months ended March 31, 2004 compared to the same period ended March 31,
2003. This increase was the result of additional units added to our rental unit
fleet and leased to third parties. The company ended the quarter with 444
compressor packages in its rental fleet, up from 399 units at December 31, 2003
and 348 units at March 31, 2003.
[GRAPHIC OMITTED]
The gross margin percentage increased from 52% for the three months
ended March 31, 2003, to 57% for the same period ended March 31, 2004. This
improvement resulted mainly from the relative increase in leasing revenue as a
percentage of the total revenue. Our rental fleet carries a gross margin
averaging 70%, and increases in rented units improve our gross margin.
8
Selling, general and administrative expense increased from $519,000 to
$666,000 or 28% for the three months ended March 31, 2003, as compared to the
same period ended March 31, 2004. This was mainly the result of the increase in
commissions from additional leasing contracts on gas compressors to third
parties and legal expenses related to an internal investigation that was settled
in April 2004.
Depreciation and amortization expense increased 46% from $362,000 to
$527,000 for the three months ended March 31, 2003, compared to the same period
ended March 31, 2004. This increase was the result of 96 new gas compressor
rental units being added to rental equipment from March 31, 2003 to March 31,
2004.
Other income increased approximately $1,479,000 for the three months
ended March 31, 2004 compared to the same period ended March 31, 2003. This
increase was due to the receipt of $1,500,000 in life insurance payable on Mr.
Wayne L. Vinson, our former President and C.E.O. His death on March 15, 2004
left the company as the beneficiary of two life insurance policies, one for
$1,000,000, and one for $500,000. These amounts were recorded as accounts
receivable-other at March 31, 2004 and were received in April 2004.
There was a slight increase in interest expense for the three months
ended March 31, 2004 compared to the same period ended March 31, 2003, mainly
due to the new loan balances on vehicles and rental equipment.
Provision for income tax increased $168,000, or 200%, primarily due to
the increase in net taxable income. The income from the life insurance proceeds
described above is not subject to federal income tax.
Item 3. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of our management,
including our chief executive officer and chief financial officer, we evaluated
the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of
1934) as of the end of the period covered by this report. Based upon that
evaluation, our chief executive officer and chief financial officer concluded
that, as of the end of the period covered by this report, our disclosure
controls and procedures are effective in timely alerting them to the material
information relating to us that are required to be included in our periodic
filings with the SEC.
(b) Changes in internal controls.
There were no significant changes made in our internal controls during
the period covered by this report or, to our knowledge, in other factors that
could significantly affect these controls subsequent to the date of their
evaluation.
9
PART II - OTHER INFORMATION
NATURAL GAS SERVICES GROUP, INC.
Item 1. Legal Proceedings
From time to time, we are a party to ordinary routine litigation
incidental to our business. We are not currently a party to any pending
litigation, and we are not aware of any threatened litigation.
Item 5. Other Information
The Nominating Committee of our Board of Directors will consider a
candidate for director proposed by a stockholder. A candidate must be highly
qualified in terms of business experience and be both willing and expressly
interested in serving on the Board. A stockholder wishing to propose a candidate
for the Committee's consideration should forward the candidate's name and
information about the candidate's qualifications to Natural Gas Services Group,
Inc., Nominating Committee, 2911 South County Road 1260, Midland, Texas 79706,
Attn.: Charles G. Curtis, Chairman. Submissions must include sufficient
biographical information concerning the recommended individual, including age,
employment history for at least the past five years indicating employer's names
and description of the employer's business, educational background and any other
biographical information that would assist the Committee in determining the
qualifications of the individual. The Committee will consider recommendations
received by a date not later than 120 calendar days before the date our proxy
statement was released to shareholders in connection with the prior year's
annual meeting for nomination at that annual meeting. The Committee will
consider nominations received beyond that date at the annual meeting subsequent
to the next annual meeting.
The Committee evaluates nominees for directors recommended by
stockholders in the same manner in which it evaluates other nominees for
directors. Minimum qualifications include the factors discussed above.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------
2.1 Purchase and Sale Agreement by and between Hy-Bon
Engineering Company, Inc. and NGE Leasing, Inc.(2)
3.1 Articles of incorporation.(3)
3.2 Amendment to articles of incorporation dated March 31, 1999,
and filed on May 25, 1999.(3)
3.3 Amendment to articles of incorporation dated July 25, 2001,
and filed on July 30, 2001.(3)
3.4 Amendment to articles of incorporation dated June 18, 2003,
and filed on June 19, 2003.(3)
10
Exhibit No. Description
----------- -----------
3.5 Articles of Merger filed on December 30, 2003 to be
effective January 1, 2004 merging NGE Leasing, Inc into
Natural Gas Services Group, Inc.(6)
3.6 Articles of Merger filed on December 30, 2003 to be
effective January 1, 2004 merging Rotary Gas Systems, Inc.
into Natural Gas Services Group, Inc.(6)
3.7 Articles of Merger filed on December 30, 2003 to be
effective January 1, 2004 merging Great Lakes Compression,
Inc. into Natural Gas Services Group, Inc.(6)
3.8 Bylaws.(3)
4.1 Form of warrant certificate.(3)
4.2 Form of warrant agent agreement.(3)
4.3 Form of lock-up agreement.(3)
4.4 Form of representative's option for the purchase of common
stock.(3)
4.5 Form of representative's option for the purchase of
warrants.(3)
10.1 1998 Stock Option Plan.(3)
10.2 Asset Purchase Agreement between Natural Gas Acquisition
Corporation and Great Lakes Compression, Inc. dated January
1, 2001.(3)
10.3 Amendment to Guaranty Agreement between Natural Gas Services
Group, Inc. and Dominion Michigan Production Services,
Inc.(3)
10.4 Form of Series A 10% Subordinated Notes due December 31,
2006.(3)
10.5 Form of Five-Year Warrants to Purchase Common Stock.(3)
10.6 Warrants issued to Berry-Shino Securities, Inc.(3)
10.7 Warrants issued to Neidiger, Tucker, Bruner, Inc.(3)
10.8 Form of warrant issued in March 2001 for guaranteeing
debt.(3)
10.9 Form of warrant issued in April 2002 for guaranteeing
debt.(3)
10.10 Exhibits 3(c)(1), 3(c)(2), 3(c)(3), 3(1)(4), 13(d)(1),
13(d)(2) and 13(d)(3) to Asset Purchase Agreement between
Natural Gas Acquisition Corporation and Great Lakes
Compression, Inc. dated January 1, 2001.(3)
10.11 Articles of Organization of Hy-Bon Rotary Compression,
L.L.C. dated April 17, 2000 and filed on April 20, 2001.(3)
10.12 Regulations of Hy-Bon Rotary Compression, L.L.C.(3)
10.13 First Amended and Restated Loan Agreement between Natural
Gas Services Group, Inc. and Western National Bank(4)
10.14 Termination of Employment Agreement Letter relating to the
Employment Agreement of Alan Kurus(5)
11
Exhibit No. Description
----------- -----------
10.15 Termination of Employment Agreement Letter relating to the
Employment Agreement of Wayne Vinson(5
10.16 Termination of Employment Agreement Letter relating to the
Employment Agreement of Earl R. Wait(5)
10.17 Lease Agreement dated June 1, 2003 with Steven J. &
Katherina L. Winer(6)
10.18 Lease Agreement dated June 19, 2003 with Wise Commercial
Properties(6)
31.1 Certification of Chief Executive Officer required by Section
302 of the Sarbanes-Oxley Act of 2002. (1)
31.2 Certification of Chief Financial Officer required by Section
302 of the Sarbanes-Oxley Act of 2002. (1)
32.1 Certification required by Section 906 of the Sarbanes-Oxley
Act of 2002. (1)
32.2 Certification required by Section 906 of the Sarbanes-Oxley
Act of 2002. (1)
--------------------------------------------------------------------------------
(1) Filed herewith.
(2) Exhibit 2.1 is incorporated by reference to Exhibit 2.1
filed as an exhibit to our Current Report on Form 8-K dated
February 28, 2003
(3) Exhibits 3.1 through 3.4 and 3.8 through 10.12 are
incorporated by reference to the exhibits filed as exhibits
to our Registration Statement No. 333-88314
(4) Exhibit 10.13 is incorporated by reference to our Current
Report on Form 8-K filed on April 14, 2003
(5) Exhibits 10.14, 10.15 and 10.16 are incorporated by
reference to exhibits 10.25, 10.26 and 10.27 to our Annual
Report on Form 10-KSB for the year ended December 31, 2002
(6) Exhibits 3.5, 3.6, 10.17, and 10.18 are incorporated by
reference to the same exhibits filed with our Annual Report
on Form 10-KSB for the year ended December 31, 2003.
(b) Reports on Form 8-K
On March 11, 2004, under Items 7 and 12 of Form 8-K, we filed our
earnings press release which announced our financial results for
the quarter and year ended December 31, 2003.
On March 16, 2004, under Item 5 of Form 8-K, we announced that our
President and Chief Executive Officer, Wayne L. Vinson, passed
away and that Wallace C. Sparkman had been appointed as interim
Chief Executive Officer.
12
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NATURAL GAS SERVICES GROUP, INC.
By: /s/ Wallace Sparkman
-----------------------------
Wallace Sparkman
President and Chief Executive
Officer
By: /s/ Earl R. Wait
-----------------------------
Earl R. Wait
Chief Financial Officer
And Treasurer
May 12, 2004
13
INDEX TO EXHIBITS:
Exhibit No. Description
----------- -----------
2.1 Purchase and Sale Agreement by and between Hy-Bon
Engineering Company, Inc. and NGE Leasing, Inc.(2)
3.1 Articles of incorporation.(3)
3.2 Amendment to articles of incorporation dated March 31, 1999,
and filed on May 25, 1999.(3)
3.3 Amendment to articles of incorporation dated July 25, 2001,
and filed on July 30, 2001.(3)
3.4 Amendment to articles of incorporation dated June 18, 2003,
3.5 Articles of Merger filed on December 30, 2003 to be
effective January 1, 2004 merging NGE Leasing, Inc into
Natural Gas Services Group, Inc.(6)
3.6 Articles of Merger filed on December 30, 2003 to be
effective January 1, 2004 merging Rotary Gas Systems, Inc.
into Natural Gas Services Group, Inc.(6)
3.7 Articles of Merger filed on December 30, 2003 to be
effective January 1, 2004 merging Great Lakes Compression,
Inc. into Natural Gas Services Group, Inc.(6)
3.8 Bylaws.(3)
4.1 Form of warrant certificate.(3)
4.2 Form of warrant agent agreement.(3)
4.3 Form of lock-up agreement.(3)
4.4 Form of representative's option for the purchase of common
stock.(3)
4.5 Form of representative's option for the purchase of
warrants.(3)
10.1 1998 Stock Option Plan.(3)
10.2 Asset Purchase Agreement between Natural Gas Acquisition
Corporation and Great Lakes Compression, Inc. dated January
1, 2001.(3)
10.3 Amendment to Guaranty Agreement between Natural Gas Services
Group, Inc. and Dominion Michigan Production Services,
Inc.(3)
10.4 Form of Series A 10% Subordinated Notes due December 31,
2006.(3)
10.5 Form of Five-Year Warrants to Purchase Common Stock.(3)
10.6 Warrants issued to Berry-Shino Securities, Inc.(3)
10.7 Warrants issued to Neidiger, Tucker, Bruner, Inc.(3)
10.8 Form of warrant issued in March 2001 for guaranteeing
debt.(3)
10.9 Form of warrant issued in April 2002 for guaranteeing
debt.(3)
14
Exhibit No. Description
----------- -----------
10.10 Exhibits 3(c)(1), 3(c)(2), 3(c)(3), 3(1)(4), 13(d)(1),
13(d)(2) and 13(d)(3) to Asset Purchase Agreement between
Natural Gas Acquisition Corporation and Great Lakes
Compression, Inc. dated January 1, 2001.(3)
10.11 Articles of Organization of Hy-Bon Rotary Compression,
L.L.C. dated April 17, 2000 and filed on April 20, 2001.(3)
10.12 Regulations of Hy-Bon Rotary Compression, L.L.C.(3)
10.13 First Amended and Restated Loan Agreement between Natural
Gas Services Group, Inc. and Western National Bank(4)
10.14 Termination of Employment Agreement Letter relating to the
Employment Agreement of Alan Kurus(5)
11
Exhibit No. Description
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10.15 Termination of Employment Agreement Letter relating to the
Employment Agreement of Wayne Vinson(5
10.16 Termination of Employment Agreement Letter relating to the
Employment Agreement of Earl R. Wait(5)
10.17 Lease Agreement dated June 1, 2003 with Steven J. &
Katherina L. Winer(6)
10.18 Lease Agreement dated June 19, 2003 with Wise Commercial
Properties(6)
31.1 Certification of Chief Executive Officer required by Section
302 of the Sarbanes-Oxley Act of 2002. (1)
31.2 Certification of Chief Financial Officer required by Section
302 of the Sarbanes-Oxley Act of 2002. (1)
32.1 Certification required by Section 906 of the Sarbanes-Oxley
Act of 2002. (1)
32.2 Certification required by Section 906 of the Sarbanes-Oxley
Act of 2002. (1)
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(1) Filed herewith.
(2) Exhibit 2.1 is incorporated by reference to Exhibit 2.1
filed as an exhibit to our Current Report on Form 8-K dated
February 28, 2003
(3) Exhibits 3.1 through 3.4 and 3.8 through 10.12 are
incorporated by reference to the exhibits filed as exhibits
to our Registration Statement No. 333-88314
(4) Exhibit 10.13 is incorporated by reference to our Current
Report on Form 8-K filed on April 14, 2003
(5) Exhibits 10.14, 10.15 and 10.16 are incorporated by
reference to exhibits 10.25, 10.26 and 10.27 to our Annual
Report on Form 10-KSB for the year ended December 31, 2002
(6) Exhibits 3.5, 3.6, 10.17, and 10.18 are incorporated by
reference to the same exhibits filed with our Annual Report
on Form 10-KSB for the year ended December 31, 2003.
15