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Annual Meeting of Shareholders. Thursday, June 26 th , 2014 Welcome. Forward Looking Statements.

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Annual meeting of shareholders
Annual Meeting of Shareholders

Thursday, June 26th, 2014


Forward Looking Statements

Statements contained herein and the information incorporated by reference herein may be forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as, but not limited to, "may," "will," "expect," "anticipate," "estimate," "would be," "believe," or "continue" or the negative or other variations of comparable terminology. Such statements (none of which are intended as a guarantee of performance) are subject to certain assumptions, risks and uncertainties, which could cause our actual future results, achievements or transactions to differ materially from those projected or anticipated. Such risks and uncertainties are set forth herein.

Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, or performance and underlying assumptions and other statements, which are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demands and acceptance, changes in technology, economic conditions, the impact of competition and pricing, and government regulation and approvals. TexCom cautions that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results, and the differences can be material. Some of the key factors which could cause actual results to vary from those TexCom expects include changes in oil prices, soybean prices, soybean oil prices, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating and forecasting production results, political conditions in Paraguay, the condition of the capital markets generally, as well as our ability to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting our business.

Our expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis, including without limitation, our examination of historical operating trends, data contained in our records and other data available from third parties. There can be no assurance, however, that our expectations, beliefs or projections will result, be achieved, or be accomplished. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no duty to update any forward-looking statements, except as required by law.

TexCom, headquartered in Houston, Texas, is a growth-oriented environmental services company with a primary focus on the disposal of nonhazardous wastes generated by the oil & gas industry.

A L growth-oriented environmental services company with a primary focus on the disposal of nonhazardous wastes generated by the oil & gas industry.ook Back on the Last Few Years

Accomplishments and

Milestones Achieved

Management and the Board have spent the past few years positioning the Company for future growth:

  • Commenced disposal operations of Eagle Ford Environmental Services (EFES) in the heart of the Eagle Ford Shale in January 2012. EFES has become our largest revenue and cash flow producer;

  • Refinanced the company’s historical non-bank high cost debt (15% - 18%) with low-cost bank debt at (4.5% - 6.5%);

  • Purchased Almac Environmental Services (now known as TexCom Environmental Services) in July 2013 to expand our NORM service offering; and,

  • Expanded EFES operation with drilling of second disposal well which became operational in November of 2013.

Management and the Board have spent the past few years positioning the Company for future growth:

  • Settled various accrued liabilities and extraordinary contractual obligations that were burdening the company;

  • Sold M.B. Environmental thereby eliminating onerous royalties and non-compete agreements that prohibited the company’s operational and locational growth;

  • Retired all bank debt; and,

  • Reached agreement to acquire disposal operations in Arkansas that will double our EBITDA.

With a new positioning the Company for future growth:loan from Green Bank in November 2012 (at 6.25%), we:

  • Paid off Matador Loan (15% interest rate);

  • Paid off Dutch-American Loan (18% interest rate);

  • Paid off various small notes (8.8% - 17% interest rates);

  • Settled Enhanced Payments to minority shareholders in M.B. Environmental; and,

  • Settled compensation claims from former officers.

With additional financing from Green Bank in 2012 positioning the Company for future growth:and 2013, we:

  • Acquired ALMAC (now TES);

  • Secured $1,809,000 for second well at EFES; and,

  • Established a $2 million line of credit (at 5.25%).

TexCom’s newfound ability to access traditional bank lending is yielding substantial savings to the company.

Financial Highlights lending is yielding substantial savings to the company.

TexCom lending is yielding substantial savings to the company.has generated several consecutive years of revenue and net income growth.

EBITDA has grown significantly but is likely reaching maximum capacity at each property.

Pre-Tax Net Income became our largest contributor.available to shareholders has increased substantially in recent years.

Eagle Ford Environmental Services, LLC became our largest contributor.

Our second disposal well at Eagle Ford Environmental Services came on line in November 2013.

Incremental revenue from the second EFES well totaled $300,000 per month through March 2014.

April Services came on line in November 2013.2014 Sale of Assets at M.B. Environmental Services

Overly burdensome royalties placed on M.B. Environmental severely taxed income from operations. With the sale of M.B. Environmental, we:

  • Received a reasonable price;

  • Resolved a dispute with Chambers-Black (a royalty holder);

  • Replaced a 5-state non-compete agreement with standard non-compete area;

  • Retired all bank debt; and,

  • Netted $4.2 million after taxes and retiring debt.

Royalties as a percentage of income c ontributed to texcom
Royalties as a Percentage of Income severely taxed income from operations. With the sale of M.B. Environmental, we:Contributed to TexCom

The royalties at M.B. Environmental consumed 41% of net income since 2011.

A L severely taxed income from operations. With the sale of M.B. Environmental, we:ook Ahead:

Future Goals and Objectives

Management and Board have positioned TexCom for growth, liquidity and enhanced shareholder value.

  • Consummate announced acquisition of Arkansas properties that provide substantive asset base and stable, predicable cash flows;

  • Use Arkansas properties’ cash flows to finance future acquisitions in high growth areas of E&P waste disposal;

  • Aggressively expand operations into growing resource plays in North America through development and acquisition;

  • Reach critical mass in EBITDA from current operations and acquisitions to meet criteria necessary for an initial public offering on a national stock exchange; and,

  • Achieve listing on a national stock exchange and fully-reporting ‘33 Act and ‘34 Act public company status.

Peak and bennett swds
Peak and Bennett SWDs liquidity and enhanced shareholder value.

On a pro forma basis (including adjusting for the sale of M.B. Environmental), the Arkansas properties substantially increase our balance sheet, book value and leverage capacity.

  • Properties purchased at a reasonable price - a combined $20.3 million with approximately 50% cash and 50% stock basis;

  • Board received fairness opinion from Hill Schwartz Spilker Keller LLC, a leading fairness opinion firm in the E&P waste disposal operations space;

  • Properties generate a stable annual cash flow (EBITDA) of approximately $3.7 million with operating margins exceeding 50%;

  • Our assets should increase from $17.7 million to $36.8 million; and,

  • Our balance sheet equity should increase from $15.8 million to $26.4 million.

Listing on a National Exchange: by Frisco Valuation Group,

  • Will allow TexCom the chance to receive a trading multiple in line with similar companies – TexCom currently trades at a multiple that is approximately 80% less than comparable, exchange-listed companies;

  • Requires TexCom to get to a critical mass in revenues and EBITDA in order to attract the attention of underwriters who will be willing to effect an IPO for the company;

  • Will provide TexCom shareholders with market breadth and depth of support, research/institutional coverage, liquidity and a stable base of institutional ownership that typically reduces stock price volatility; and,

  • Will enable TexCom to utilize high-value stock as currency for future acquisitions.

Listing on a National Exchange – What does it take to get by Frisco Valuation Group, there?

  • Assuming the proposed reverse stock split is approved, below represents indicative NASDAQ Capital Markets listing criteria.

Questions? by Frisco Valuation Group,