##### Table of Contents





As filed with the Securities and Exchange Commission on
    July 13, 2011
 
 
 File
    No. 333-173559
 
 
   UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 
  Amendment No. 1
    to
 
 Form S-1
  REGISTRATION
    STATEMENT
 UNDER
 THE SECURITIES ACT OF
    1933
  NYTEX ENERGY HOLDINGS,
    INC.
  (Exact name of registrant as
    specified in its charter)
  Delaware(State or other
    jurisdiction
    of incorporation or organization)

84-1080045(I.R.S. Employer
    Identification Number)  1311
 (Primary Standard Industrial
 Classification Code Number)
 12222 Merit Drive, Suite 1850
  Dallas, Texas 75251
 972-770-4700
  (Address, including zip code,
    and telephone number, including area code, of registrants
    principal executive offices)
  Michael K. Galvis
    President and Chief Executive Officer
    NYTEX Energy Holdings, Inc.
    12222 Merit Drive, Suite 1850
    Dallas, Texas 75251972-770-4700(Name, address, including
    zip code, and telephone
    number, including area code, of agent for service)

Copies to:
    Kevin Woltjen
    Strasburger & Price, LLP
    901 Main Street, Suite 4400
    Dallas, Texas 75202
    214-651-4300   Approximate dates of commencement of proposed sale to
    public:
  þ
  o
  o
  o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller reporting
    company þ (Do not check if a smaller
    reporting company)
  Calculation
    of Registration Fee
  
 Proposed Maximum


Proposed Maximum


Amount ofTitle of Each Class


Amount to be


Offering


Aggregate


Registrationof Securities to be Registered


Registered


Price Per Unit(1)(2)


Offering Price


FeeCommon Stock, par value $.001 (Common
    Stock) issuable upon conversion of 12% convertible
    debenture (Debentures)


1,433,333


$5.50


$7,883,332


$915.25Common Stock issuable upon exercise of warrants issued to
    investors in conjunction with the Debentures


430,000


$5.50


$2,365,000


$274.58Common Stock issuable upon conversion of Series A preferred
    stock, par value $.001 (Series A Preferred
    Stock)


6,000,000


$5.50


$33,000,000


$3,831.30Common Stock issuable upon exercise of warrants issued to
    investors in conjunction with the Series A Preferred Stock


1,800,000


$5.50


$9,900,000


$1,149.40Total


9,663,333


$5.50


$53,148,331


$6,170.53  
  (1)
    
    The proposed maximum offering price
    per share is estimated solely for the purpose of calculating the
    registration fee pursuant to Rule 457(c) under the
    Securities Act. 
 (2)
    
    Based on the average of the bid and
    ask price of the Companys Common Stock as of July 12,
    2011. 
 
  The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section 8(a)
    of the Securities Act of 1933 or until the Registration
    Statement shall become effective on such date as the Commission,
    acting pursuant to said Section 8(a), may determine.




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##### Table of Contents



The
information in this Registration Statement is not complete and
may be changed. The Selling Security Holders may not sell these
securities until the Registration Statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where
an offer or sale is not permitted.


SUBJECT TO COMPLETION, DATED
    JULY 13, 2011
 
  NYTEX ENERGY HOLDINGS,
    INC.
  Up to 9,663,333 Shares of
    Common Stock
  (Selling
    Security Holders) (Common Stock) (Debentures) (Debenture
    Warrants) (Series A Preferred Stock) (Series A Warrants)
 
  Plan of
    Distribution
 
 
  (FINRA) over-the-counter
 
  Investing in our securities involves a high degree of risk.
    Certain risks associated with an investment in our securities
    are described in this prospectus and certain of our filings with
    the Securities and Exchange Commission, as described under
    Risk Factors,on page 2 of this prospectus.
  Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of our
    securities or passed upon the adequacy or accuracy of this
    prospectus. Any representation to the contrary is a criminal
    offense.




---



##### 



TABLE OF
    CONTENTS
   
 
 PagePROSPECTUS SUMMARY


1RISK FACTORS


2SPECIAL NOTE REGARDING FORWARD LOOKING
    STATEMENTS


12USE OF PROCEEDS


13DETERMINATION OF OFFERING PRICE


13MARKET PRICE OF OUR COMMON STOCK


13BUSINESS


15PROPERTIES


24MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


29EXECUTIVE OFFICERS, EXECUTIVE COMPENSATION AND
    DIRECTORS


43TRANSACTIONS WITH RELATED PERSONS AND CERTAIN
    CONTROL PERSONS


48SELLING SECURITY HOLDERS


50DESCRIPTION OF CAPITAL STOCK


55PLAN OF DISTRIBUTION


57INTERESTS OF NAMED EXPERTS AND COUNSEL


58LEGAL PROCEEDINGS


58SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT


59DISCLOSURE OF COMMISSION POSITION ON
    INDEMNIFICATION FOR SECURITIES ACT LIABILITIES


60WHERE YOU CAN FIND MORE INFORMATION


61INDEX TO FINANCIAL STATEMENTS


F-1EX-4.1EX-4.2EX-4.3EX-4.7EX-4.9EX-4.11EX-10.21EX-10.22EX-10.23EX-10.24EX-10.25EX-10.26EX-10.27EX-10.28EX-23.1EX-23.3




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##### Table of Contents



PROSPECTUS
    SUMMARY  Common
    Stock NYTEX
 
  Our
    Company
 
  (972) 770-4700.
 
    
    Fluid Drilling Services This segment
    conducted by our wholly owned subsidiary, Francis Drilling
    Fluids, Ltd. (FDF) (through our
    subsidiary NYTEX FDF Acquisition, Inc. (Acquisition
    Inc.)), consists of full service drilling,
    completion, and specialized fluids, dry drilling and completion
    products, technical services, industrial cleaning services and
    equipment rental for the oil & gas industry. Since the
    acquisition of FDF (FDF Acquisition),
    this segment represents substantially all of our revenues from
    operations.
    Oil and Gas Operations This segment conducted
    by our wholly owned subsidiary, NYTEX Petroleum, Inc.
    (NYTEX Petroleum), represents our oil
    and gas business. Prior to the FDF Acquisition,
    this segment generated virtually all of our revenues from
    operations.  The
    Offering
  (Selling Security
    Holders) (Debentures) (Debenture
    Warrants) (Series A Preferred
    Stock) (Series A
    Warrants)
 1




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##### Table of Contents



RISK
    FACTORS  An
    investment in our Common Stock involves a high degree of risk.
    Before making an investment decision, you should carefully
    consider all of the risks described or incorporated by reference
    in this prospectus. If any of the risks discussed in this
    prospectus actually occur, our business, financial condition and
    results of operations could be materially and adversely
    affected. If this were to happen the value of our Common Stock
    could decline significantly and you may lose all or a part of
    your investment.
 
 
  RISK
    FACTORS RELATING TO OUR OPERATIONS
 
 
  We are
    in default under our senior debt facility and our mezzanine debt
    agreement. If we are unable to reach an agreement with these
    lenders to resolve the defaults, these lenders can exercise
    remedies which ultimately could require us to curtail or cease
    our operations.
 
 
  (PNC)
 
 
  (WayPoint) (WayPoint Purchase Agreement)
 
 
 
 
  By
    virtue of having the right, and having exercised the right, to
    designate a majority of the board of directors of our
    subsidiary, Acquisition Inc., WayPoint may be deemed to have
    control over Acquisition Inc. and its subsidiaries, including
    FDF, our significant operating subsidiary. WayPoint also holds
    the sole outstanding share of our Series B Preferred Stock,
    entitling it to increase the size of our board of directors and
    to designate a majority of our board. While members of a board
    of directors owe fiduciary duties to all stockholders, WayPoint
    has interests that are in addition to, or different from the
    interests of our stockholders generally and that create
    potential conflicts of interest.
 
 
  The WayPoint Control Warrant allows for a
    change in control,
 
 2




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##### Table of Contents



Transactions with Related Persons and Certain Control
    Persons
 
 
   
 
   
 
  Our
    independent auditors have expressed doubt about our ability to
    continue our activities as a going concern, which may hinder our
    ability to obtain future financing.
 
 
   
 
   
 
   
 
  Our
    indebtedness and other payment obligations could restrict our
    operations and make us more vulnerable to adverse economic
    conditions.
 
 
  Liquidity and Capital
    Resources
 
 3




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##### Table of Contents




    impair our ability to make investments and obtain additional
    financing for working capital, capital expenditures,
    acquisitions or other general corporate purposes; 
 
  
    limit our ability to use operating cash flow in other areas of
    our business because we must dedicate a substantial portion of
    these funds to make principal and interest payments on our
    indebtedness; and 
 
  
    make us more vulnerable to a downturn in our business, our
    industry or the economy in general as a substantial portion of
    our operating cash flow will be required to make principal and
    interest payments. 
 
   
 
   
 
  We
    need additional capital, and the sale of additional shares or
    other equity securities could result in additional dilution to
    our stockholders.
 
 
   
 
  Our
    business depends on domestic spending by the oil and gas
    industry, and this spending and our business have been, and may
    continue to be, adversely affected by industry and financial
    market conditions that are beyond our control.
 
 
   
 
   
 4




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##### Table of Contents



If oil
    and gas prices remain volatile, or decline, the demand for our
    services could be adversely affected.
 
 
   
 
  Competition
    within the well services industry may adversely affect our
    ability to market our services.
 
 
   
 
  We
    depend on several significant customers, and a loss of one or
    more significant customers could adversely affect our results of
    operations.
 
 
   
 5




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##### Table of Contents



We may
    not be able to grow successfully through future acquisitions or
    successfully manage future growth, and we may not be able to
    effectively integrate the businesses we do
    acquire.
 
 
   
 
   
 
  Our
    industry has experienced a high rate of employee turnover. Any
    difficulty we experience replacing or adding personnel could
    adversely affect our business.
 
 
   
 
   
 
  Our
    success depends on key members of our management, the loss of
    any of whom could disrupt our business operations.
 
 
   
 
  Our
    operations are subject to inherent risks, some of which are
    beyond our control. These risks may be self-insured, or may not
    be fully covered under our insurance policies.
 
 
   
 
  
    personal injury or loss of life; 
 
  
    damage to or destruction of property and equipment (including
    the collateral securing our indebtedness) and the environment; 
 6




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##### Table of Contents




    suspension of our operations; and 
 
  
    lost profits. 
 
   
 
   
 
  We are
    subject to federal, state and local regulations regarding issues
    of health, safety and protection of the environment. Under these
    regulations, we may become liable for penalties, damages or
    costs of remediation. Any changes in these laws and government
    regulations could increase our costs of doing
    business.
 
 
   
 
  RISK
    FACTORS RELATING TO AN INVESTMENT IN OUR
    SECURITIES
 
 
  The
    WayPoint Warrants possess full anti-dilution provisions, and may
    result in a duplication of dilution.
 
 
  (Purchaser
    Warrant) Control Warrant WayPoint
    Warrants
 
 7




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##### Table of Contents



Exercise
    of the WayPoint Control Warrant would result in a change in
    control.
 
 
  Default Conditions Default Francis Group Change of Control
 
 8




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##### Table of Contents



The
    issuance of shares of Common Stock upon conversion of the
    Debentures and Series A Preferred Stock, as well as upon
    exercise of outstanding warrants may cause immediate and
    substantial dilution to our existing stockholders.
 
 
  NYTEX Petroleum Convertible
    Debentures
 
 
  We are
    required to register various securities with the SEC under
    agreements with certain of our security holders and may be
    subject to certain monetary penalties if we do not do
    so.
 
 
  Form S-1
 
 
   
 
   
 
 
 
  The
    terms of our indebtedness to PNC and our transaction with
    WayPoint restrict our operations.
 
 
   
 9




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##### Table of Contents



We are
    subject to the reporting requirements of federal securities
    laws, compliance with which is expensive.
 
 
   
 
  Our
    compliance with the Sarbanes Oxley Act and SEC rules concerning
    internal controls will be time consuming, difficult, and
    costly .
 
 
   
 
  If we
    fail to maintain the adequacy of our internal controls, our
    ability to provide accurate financial statements and comply with
    the requirements of the Sarbanes-Oxley Act could be impaired,
    which could cause the market price of our Common Stock to
    decrease substantially.
 
 
   
 
  Our
    stock price may be volatile, which may result in losses to our
    stockholders.
 
 
  Over-The-Counter
 
 
  
    variations in our operating results; 
 
  
    changes in expectations of our future financial performance,
    including financial estimates by securities analysts and
    investors; 
 
  
    changes in operating and stock price performance of other
    companies in our industry; 
 
  
    WayPoints exercise of the Purchase Warrant or the Control
    Warrant; 
 
  
    additions or departures of key personnel; 
 
  
    future sales of our Common Stock; and 
 
  
    general economic and political conditions. 
 10




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##### Table of Contents



and/or
 
 
  Our
    Common Stock has only recently begun trading. We expect our
    Common Stock to be thinly-traded. You may be unable to sell at
    or near ask prices or at all if you need to sell your shares to
    raise money or otherwise desire to liquidate such
    shares.
 
 
   
 
  Our
    Common Stock may be subject to penny stock rules, which may make
    it more difficult for our stockholders to sell their Common
    Stock.
 
 
   
 
  We do
    not anticipate paying any dividends.
 
 
   
 11




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Our indebtedness
    and other payment obligations could restrict our operations and
    make us more vulnerable to adverse economic
    conditions.
 
 
  We
    have a substantial number of authorized common shares available
    for future issuance that could cause dilution of our
    stockholders interest and adversely impact the rights of
    holders of our Common Stock.
 
 
  and/or
 
 
   
 
  OTHER
    RISK FACTORS
 
 
  Reserve
    data of our oil and gas operations are estimates based on
    assumptions that may be inaccurate.
 
 
   
 
   
 
   
 SPECIAL
    NOTE REGARDING FORWARD LOOKING STATEMENTS  The statements contained in all parts of this document
    relate to future events, including, but not limited to, any and
    all statements regarding future operations, financial results,
    business plans and cash needs and other statements that are not
    historical facts are forward looking statements. When used in
    this document, the words anticipate,
    budgeted, planned, targeted,
    potential, estimate, expect,
    may, project, believe and
    similar expressions are intended to be among the statements that
    identify forward looking statements. Such statements involve
    known and unknown risks and uncertainties, including, but not
    limited to, those relating to the current economic downturn and
    credit crisis, the volatility of natural gas and oil prices, our
    dependence on our key personnel, factors that affect our ability
    to manage our growth
 12




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##### Table of Contents



and achieve our business strategy, technological changes,
    our significant capital requirements, the potential impact of
    government regulations, adverse regulatory determinations,
    litigation, competition, business and equipment acquisition
    risks, availability of equipment, weather, availability of
    financing, financial condition of our industry partners, ability
    to obtain permits and other factors detailed herein. Some of the
    factors that could cause actual results to differ from those
    expressed or implied in forward-looking statements are described
    under Risk Factors and in other sections of this
    prospectus. Should one or more of these risks or uncertainties
    materialize, or should underlying assumptions prove incorrect,
    actual outcomes may vary materially from those indicated. All
    subsequent written and oral forward-looking statements
    attributable to us or persons acting on our behalf are expressly
    qualified in their entirety by reference to these risks and
    uncertainties. You should not place undue reliance on
    forward-looking statements. Each forward-looking statement
    speaks only as of the date of the particular statement and we
    undertake no obligation to update or revise any forward-looking
    statement.
 USE OF
    PROCEEDS   
   
 DETERMINATION
    OF OFFERING PRICE  Plan of Distribution
 
 
   
 MARKET
    PRICE OF OUR COMMON STOCK  Market
    Information
 
   
  Holders
 
   
  Warrants,
    Convertible Debenture Shares and Restricted Stock
    Grants
 
   
 13




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Rule 144 Shares
     
   
  Shares to
    be Registrable Pursuant to Registration Rights
    Agreements
 
   
 
   
 14




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##### Table of Contents



BUSINESS   
 
   
 
   
 
  http://www.fdfltd.com),
 
  Strategy
 
   
  
    Continuously improving the efficiency, productivity and quality
    of our products and services and their respective delivery in
    order to grow revenues and operating margins in all of our
    geographic markets at a rate exceeding underlying market
    activity;
    Further extending our infrastructure and U.S. leadership
    position throughout North America by acquiring, consolidating
    and integrating other oilfield fluid service and fracture
    proppant distribution companies at competitive acquisition costs;
    Preserving our dynamic, long tenured workforce by attracting,
    developing, and retaining the best talent; and
    Upholding our ethical and business standards and maintaining the
    highest standards of health, safety, and environmental
    performance. 15




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##### Table of Contents



Oilfield
    Services  FDF
    FDF
    Product Offerings
  Specialized
    fluids and specialty additive products
  24-hour
  Liquid
    Water-Based Mud
 
  24-hour
 
  Oil
    Water-Based Mud
 
   
  Completion
    Fluids
    
    sodium chloride (NaCl Solutions);
    potassium chloride (KCl Solutions);
    ammonium chloride;
    calcium chloride; and
    zinc bromide. 
  FDF Perfseal FDF Liquid HEC HEC 10 FDF Supersweep 298 FDF Supersweep OB FDF Supertron 62 Supertron 87, FDF
    Supertron 6200 FDF DEFOAM CF
 
 16




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##### Table of Contents



Specialized
    Mixing
    Barite &
    Hematite
 
  FDF Barite Bulk FDF Barite Sack FDF
    Hematite Bulk FDF Hematite Sack
 
  Viscosifiers
 
  FDF Benex FDF Bentonite DF
    Bentonite NT FDF Bentonite Bulk FDF
    Attipulgite FDF Vistek II FDF XCD Polymer
 
  Fluid
    Conditioners
 
  D/FLOC-L FDF CLS FDF
    CLS Chrome Free Desco FDF
    Lignite FDF Sapp FDF Envirocal FDF Polyplex
 
  Filtration
    Control Agents
 
  CM Starch Starlose FDF Pac Regular FDF Pac S/L FDF CMC High Vis FDF CMC Low Vis
 
  Shale
    Stabilizers
 
  FDF NO-PHALT Soltex FDF PHPA FDF PHPA
 
  Lubricants,
    Detergents, & Defoamers
 
  FDF Detergent FDF DMS FDF LUBE
    II FDF DEFOAM
 
  Alkalinity
    Control
 
  FDF KOH FDF Caustic Soda FDF Gypsum FDF Lime
 
  Lost
    Circulation & Sealing Products
 
  Diaseal M.D.E Kwik-Seal FDF Mica (F.M.C.) DELTA P FDF
    NUT PLUG (F.M.C.) VENLUBE II MAGNAFIBER REGULAR MAGNAFIBER FINE FDF
    VISPLUG
 
  FDF
    Service Offerings
  Equipment
    Rentals
   17




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##### Table of Contents



Transportation
  24-hour
   
   
  

Vacuum Trucks



Warehouse Management

Winch Trucks



Logistical Support

Pneumatic Hauling



Super Vacs

Specialized Hauling   Transloading
    Services
 
   
  

Faster Transit Times



Timely Delivery of Products

Reliable Delivery



Product Integrity

Online Reporting



Contract Warehousing

Inventory Control



Railcar Loading/Unloading

Single Point Accountability



Computerized Inventory Control  
   
  
 

Clinton, OK



Alice, TX



Odessa, TX

Weatherford, OK



Kermit, TX



Rock Springs, WY

Lake Charles, LA



Jefferson, TX



Plaza, ND  
  Technical
    Services
 
  on-site
 
  

Drilling Fluids Engineering



In-House Tech Support

Completion Fluids Engineering



Certified Tankerman

Fluid Auditing   Environmental
    Support
   18




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##### Table of Contents



Fluids
    Services
 
  on-site
 
  

Water-based Liquid Mud



Completion Fluids

Liquid Mud Storage



Completion Fluids Chemicals

Specialized Mixing



Casing Scrubs

Water-Based Chemicals



Corrosion Inhibitors   Cleaning
    Services
 
   
    

Industrial Cleaning



Barge Cleaning



Rig Cleaning

Vessel Cleaning



Tank Cleaning



Equipment Cleaning   Specialized
    Cleaning Equipment
    FDF Hydro
    Excavator  HV-56 GapVax Industrial Vacuum Loader w/
    Hydro Excavation Package
    FDF
    SuperVac  VTX-820 GAPVAX Tractor  Mounted
    Vacuum System
    FDF
    SuperVac II  HV-57 GAPVAX Vacuum Loader
    Airmover
    FDF Hot
    Water Washer
   19




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##### Table of Contents



FDF Hydro
    Blaster
    FDF Super
    Wash II
  FDF SUPERWASH II
    FDF
    Mobile Cleaning Unit
    Oil
    and Gas  NYTEX Petroleum
 
   
  and/or
   
  Other
    Business Activities  NYTEX Petroleum
 
 
  Simpson
    Agreement Simpson Boom
 
 20




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##### Table of Contents



Participants
    Agreements Participant
    Payout
 
  Supreme
    Vacuum
 
  on-site
 
      Other
    Business Data
  FDF
    Locations
    Competitive
    Edge
     21




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##### Table of Contents



state-of-the-art
  Environmental
    Regulations
    Seasonality
    Government
    Regulations
    Competition
    and Other External Factors
     22




---



##### Table of Contents



Raw
    materials
    Customers
 
   
  Employees
 
   
 23




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##### Table of Contents



PROPERTIES      
 Leased or


Approximate


ApproximateLocation

Owned


Sq. Ft.


Acreage


Facility TypeAda, OK


Leased



100



1.00


Trucking Terminal, OfficeAlice, TX


Leased



53,700



8.87


Office, Warehouses, Mud Plant, Tanks, SilosMixing Pits, Trucking Terminal, Wash Rack,Alice, TX


Owned



100,000



20.00


WarehouseBerwick, LA


Leased



18,984



2.25


Warehouse, Office, Mobile Residences, Docks,Mud Plant, Tanks, Mixing Pits, Wash RackCameron, LA


Leased



11,841



3.50


Mud Plant, Office Building, Tanks, Mixing PitsDocks, Residential QuartersClinton, OK


Owned



9,600



6.26


Office, Mechanics Garage, Silos, Weigh StationRail Spur, Trucking TerminalCoushatta, LA


Owned



3,510



17.00


Rail Spur, Wash Rack, Mud PlantCrowley, LA


Owned



65,542



31.60


Office Building, Warehouses, Mechanics Garage,Mud Plant, Tanks, Mixing Pits, Wash Rack,Blasting ShedCrowley, LA


Leased



12,800



2.08


Airstrip and hangarDayton, TX


Owned



8,200



6.00


Mud Plant, Warehouse, Mixing Pits, Wash Rack,Mobile Residence/Office, Mixing Pits, TanksFourchon, LA


Leased



18,593



3.70


Mud Plant, Office building, Mud Plant, Tanks,Mobile Residences, Mixing Pits, DocksIntracoastal City, LA


Leased



5,109



2.38


Warehouse, Mud Plants, Mud Tanks, Dock,Mixing PitsJefferson, TX


Managed
(1)


300



3.50


Trucking Terminal, Rail Spur, Weigh StationKermit, TX


Leased



300



5.50


Rail Spur, Weigh Station, SilosLake Charles, LA


Leased



5,109



2.38


Office and Warehouse, Trucking TerminalLake Charles Port, LA


Leased



140,000






Warehouse, Docks, SilosLafayette, LA


Leased



9,000






Office spaceOdessa, TX


Owned



12,750



43.44


Office and Warehouse, Rail Spur, Weigh Station,Silos, Trucking TerminalPlaza, ND


Leased










Rail Spur, YardRock Springs, WY


Owned



12,800



5.58


Office and Warehouse, Silos, Weigh Station,Rail Spur, Trucking TerminalRock Springs, WY


Leased



40



5.90


Rail Spur, Weigh StationSallisaw, OK


Owned



11,140



6.00


Office and Warehouse, Trucking Terminal,Mechanics GarageVictoria, TX


Owned



11,300



3.83


Office and Warehouse, Mud Plant, Wash Rack,Tanks, Mixing Pits, Residential QuartersWeatherford, OK


Leased







3.60


Rail Spur, YardDallas, TX


Leased



2,415






Corporate office space  
 24




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##### Table of Contents



(1)
    
    This property is owned by Santrol Proppants, an unrelated party,
    through we manage it on their behalf. 
 
  Oil and Natural Gas
    Reserves
 
    Reserve
    Rule Changes
  Reserve
    Ruling FASB No. 2010-03 ASU
    2010-03 2010-03 Form 10-K 2010-03
  
    Expanding the definition of oil- and gas-producing activities to
    include the extraction of saleable hydrocarbons, in the solid,
    liquid or gaseous state, from oil sands, coalbeds, or other
    nonrenewable natural resources that are intended to be upgraded
    into synthetic oil or gas, and activities undertaken with a view
    to such extraction;
    Amending the definition of proved oil and gas reserves to
    require the use of an average of the
    first-day-of-the-month
    commodity prices during the
    12-month
    period ending on the balance sheet date rather than the
    period-end commodity prices;
    Adding to and amending other definitions used in estimating
    proved oil and gas reserves, such as reliable
    technology and reasonable certainty;
    Broadening the types of technology that a reporter may use to
    establish reserves estimates and categories; and
    Changing disclosure requirements and providing formats for
    tabular reserve disclosures. 25




---



##### Table of Contents



Oil
    and Natural Gas Reserves
    2010

2009

2008ProductionAverage gas sales price per mcf

$
4.10


$
5.61


$
9.28Average oil sales price per bbl

$
73.79


$
66.71


$
91.65Average production cost per boe

$
27.82


$
39.97


$
5.90Net oil production (bbl)


3,751



1,666



251Net gas production (mcf)


8,709



8,468



4,212Productive wells  oilGross


12



12



2Net


7



7



Productive wells  gasGross


21



21



17Net


3



3



Developed acreageGross


5,605



5,485



5,157Net


541



541



301Undeveloped acreageGross






12,000



12,000Net






2,400



2,400Drilling activityNet productive exploratory wells drilled










10Net dry exploratory wells drilled










1   (PDnP)
   26




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##### Table of Contents



PV-10 Supplemental Disclosure of Oil & Gas
    Operations to the Notes to Consolidated Financial
    Statements
 
    Rule 4-10(a) Regulation S-X
  PV-10
  Table
    1
 TOTAL PROVED RESERVES
    (12/31/2010
    as of date)
  Net Proved Developed


Net Proved Undeveloped


Net Total ProvedPDP & PDnP


PUD


PDP, PDnP & PUDPV 10








PV 10








PV 10($)








($)








($)Oil (bbl)


Gas (mcf)


(1)(2)


Oil (bbl)


Gas (mcf)


(1)(2)


Oil (bbl)


Gas (mcf)


(1)(2)Misc. Non-Operated


1,911



2,181



43,250



0



0



0



1,911



2,181



43,250Panhandle Field


114,190



172,180



4,108,339



0



0



0



114,190



172,180



4,108,339TOTALS:


116,101



174,361



4,151,589



0



0



0



116,101



174,361



4,151,589  27




---



##### Table of Contents



TABLE
    1A
    TOTAL PROVED RESERVES WITH BOE
    (12/31/2010
    as of date, 6 mcf per barrel of oil)
  Net Proved Developed


Net Proved Undeveloped


Net Total ProvedPDP & PDnP


PUD


PDP, PDnP & PUDOil (bbl)


Gas (mcf)


BOE


Oil (bbl)


Gas (mcf)


BOE


Oil (bbl)


Gas (mcf)


BOEMisc. Non-Operated


1,911



2,181



2,275



0



0



0



1,911



2,181



2,275Panhandle Field


114,190



172,180



142,887



0



0



0



114,190



172,180



142,887TOTALS:


116,101



174,361



145,162



0



0



0



116,101



174,361



145,162     (1)
    
    The PV-10
    value as of December 31, 2010 is pre-tax and was determined
    utilizing the twelve-month
    un-weighted
    arithmetic average of the first day of the month price for the
    period January through December 2010. Gas prices are
    referenced to a Henry Hub (HH) price of $4.38 per MMBtu, as
    published in Platts Gas Daily, and are adjusted for energy
    content, transportation fees, and regional price differentials.
    Oil and NGL prices are referenced to a West Texas Intermediate
    (WTI) crude oil price of $75.96 per barrel, as posted by Plains
    Marketing, L.P., and are adjusted for gravity, crude quality,
    transportation fees, and regional price differentials. These
    reference prices are held constant in accordance with SEC
    guidelines. The weighted average prices after adjustments over
    the life of the properties are $75.15 per barrel for oil, $4.37
    per mcf for gas, and $52.66 per barrel for NGL. Management
    believes that the presentation of
    PV-10 value
    may be considered a non-GAAP financial measure as defined in
    Item 10(e) of
    Regulation S-K.
    Therefore, we have included a reconciliation of the measure to
    the most directly comparable GAAP financial measure
    (standardized measure of discounted future net cash flows in
    footnote (2) below). Management believes that the
    presentation of
    PV-10 value
    provides useful information to investors because it is widely
    used by professional analysts and sophisticated investors in
    evaluating oil and gas companies. Because many factors that are
    unique to each individual company may impact the amount of
    future income taxes to be paid, the use of the pre-tax measure
    provides greater comparability when evaluating companies. It is
    relevant and useful to investors for evaluating the relative
    monetary significance of NYTEX Petroleums oil and natural
    gas properties. Further, investors may utilize the measure as a
    basis for comparison of the relative size and value of NYTEX
    Petroleums reserves to other companies. Management also
    uses this pre-tax measure when assessing the potential return on
    investment related to its oil and natural gas properties and in
    evaluating acquisition candidates. The
    PV-10 value
    is not a measure of financial or operating performance under
    GAAP, nor is it intended to represent the current market value
    of the estimated oil and natural gas reserves owned by NYTEX
    Petroleum.
    PV-10 value
    should not be considered in isolation or as a substitute for the
    standardized measure of discounted future net cash flows as
    defined under GAAP.(2)
    
    Future income taxes and present value discounted (10%) future
    income taxes were $1,064,010 and $930,029, respectively.
    Accordingly, the after-tax
    PV-10 value
    of Net Total Proved Reserves (or Standardized Measure of
    Discounted Future Net Cash Flows) is $3,221,560. 28




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##### Table of Contents



MANAGEMENTS
    DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS    Overview
 
   
   
  Oilfield Services
 
  Oil and Gas
    Oilfield
    Services
  Acquisition
    of FDF
   
   
 29




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##### Table of Contents



Oil
    and Gas
    (Lakeview Shallow
    Prospect) (CBM)
       
   
 
  (Purchaser Agreements) Boom
    Buyers
 
 30




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##### Table of Contents



Supreme
    Vacuum
  Supreme Vacuum Shares
  Results
    of Operations
 
   
  Selected
    Data
  
 Year Ended December 31,


Three Months Ended March 31,2010


2009


2011


2010Financial ResultsRevenues  Oilfield Services

$
7,090,463


$



$
18,551,902


$
Revenues  Oil and Gas


781,887



567,559



154,770



88,747Total revenues


7,872,350



567,559



18,706,672



88,747Total operating expenses


11,806,228



2,857,421



20,875,990



215,629Total other (income) expense


15,713,688



1,067,634



15,043,350



175,070Loss before income taxes


(19,647,566
)


(3,357,496
)


(17,212,668
)


(301,952
)Income tax benefit (provision)


(3,299
)






412,284



Net loss

$
(19,650,865
)

$
(3,357,496
)

$
(16,800,384
)

$
(301,952
)Loss per share  basic and diluted

$
(0.98
)

$
(0.18
)

$
(0.65
)

$
(0.02
)Weighted average shares outstanding  basic and diluted


20,149,999



18,688,976



26,224,480



19,199,554Operating ResultsAdjusted EBITDA  Oilfield Services

$
918,869



(2)


$
2,015,429



(2)Adjusted EBITDA  Oil and Gas


(1,443,047
)


(2)



(1,512,305
)


(2)Adjusted EBITDA  Corporate and Intersegment
    Eliminations


(3,818,411
)


(2)



(521,156
)


(2)Consolidated Adjusted EBITDA(1)

$
(4,342,589
)

$
(2,956,079
)

$
(18,032
)

$
(228,299
)  
 31




---



##### Table of Contents



(1)
    
    See Results of Operations  Adjusted EBITDA on
    page 34 of this prospectus for a description of Adjusted
    EBITDA, which is not a U.S. Generally Accepted Accounting
    Principles measure, and a reconciliation of Adjusted EBITDA to
    net loss, which is presented in accordance with GAAP. 
 
  (2)
    
    We operated as a single segment for the year ended
    December 31, 2009 and for the three months ended
    March 31, 2010. 
 
  Three
    months ended March 31, 2011 compared to the three months
    ended March 31, 2010
 
 
  Revenues.
 
 
  Oil & gas lease operating
    expenses.
 
 
  Depreciation, depletion, and
    amortization.
 
 
  Selling, general, and administrative
    expenses.
 
 
  Litigation loss on settlement.
 
 
  Gain on sale of assets, net.
 
 
  Interest expense.
 
 
  Change in fair value of derivative
    liabilities.
 
 
  Accretion of preferred stock liability.
 
 32




---



##### Table of Contents



Equity in loss of unconsolidated
    subsidiaries.
 
  Year
    ended December 31, 2010 compared to the year ended
    December 31, 2009
  Revenues.
  Oil & gas lease operating
    expenses.
 
  Depreciation, depletion, and
    amortization.
 
 
  Selling, general, and administrative
    expenses.
 
  Gain on sale of assets, net.
  Interest expense.
  Change in fair value of derivative
    liabilities.
  Accretion of preferred stock
    liability.
  Equity in loss of unconsolidated
    subsidiaries.
  Loss on sale of unconsolidated subsidiary.
 33




---



##### Table of Contents



Adjusted
    EBITDA
  Adjusted
    EBITDA
 
   
  
 Year Ended December 31,


Three Months Ended March 31,2010


2009


2011


2010Reconciliation of Adjusted EBITDA to GAAP Net Loss:Net loss to common stockholders

$
(19,650,865
)

$
(3,357,496
)

$
(16,800,384
)

$
(301,952
)Income tax provision (benefit)


3,299







(412,284
)


Interest expense


832,164



170,486



1,220,613



58,979DD&A


772,826



83,457



2,164,667



14,674Impairment of long-lived assets






147,474







Change in fair value of derivative liabilities


13,301,755







12,866,174



Accretion of preferred stock liability


398,232







943,182



Consolidated Adjusted EBITDA

$
(4,342,589
)

$
(2,956,079
)

$
(18,032
)

$
(228,299
)  
  Liquidity
    and Capital Resources
 
   
 
 
  Defaults
    Under Financing Arrangements
   34




---



##### Table of Contents



35




---



##### Table of Contents



$2.15
    Million Debenture Offering
 
   
  WayPoint
    Transaction
 
   
 
  Default
    Conditions Default Change of
    control
 
 36




---



##### Table of Contents



Senior
    Revolving Credit and Term Loan Facility
     37




---



##### Table of Contents



Private
    Placement  Series A Preferred
    Stock
 
   
 
  one-to-one.
 
 
   
  9%
    Convertible Debenture of NYTEX Petroleum
 
  wholly-owned
 
 
   
  Other
    Financings
 
  (Facility)
 
 38




---



##### Table of Contents



(Bridge Loans),
 
      Cash
    Flows
 
   
  
 December 31,


Three Months Ended March 31,2010


2009


2011


2010Cash flow provided by (used in) operating activities

$
(1,063,089
)

$
(2,096,089
)

$
2,159,147


$
(402,391
)Cash flow provided by (used in) investing activities


(41,566,581
)


(1,156,031
)


(2,354,379
)


380,726Cash flow provided by financing activities


42,821,032



2,970,172



(3,579
)


3,529Net increase (decrease) in cash and cash equivalents


191,362



(281,948
)


(198,811
)


(18,136
)Beginning cash and cash equivalents


18,136



300,084



209,498



18,136Ending cash and cash equivalents

$
209,498


$
18,136


$
10,687


$
  
 
  Three
    months ended March 31, 2011 compared to three months ended
    March 31, 2010
 
 
   
 
   
 39




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##### Table of Contents



Year
    ended December 31, 2010 compared to the year ended
    December 31, 2009
 
        Off-Balance
    Sheet Arrangements
    Contractual
    Obligations
    
 Obligations by PeriodMore than1 Year


2 -3 Years


4 -5 Years


5 Years


TotalTotal DebtPrincipal  current borrowings

$
22,516,398


$



$



$



$
22,516,398Principal  long-term borrowings






492,390



992,014



20,750,000



22,234,404Interest on borrowings


5,808,592



6,020,942



5,978,847



1,153,931



18,962,312Operating lease obligations


1,634,670



2,025,132



1,457,756



971,247



6,088,805Asset retirement obligations






9,060







41,018



50,078Total

$
29,959,660


$
8,547,524


$
8,428,617


$
22,916,196


$
69,851,997  
 40




---



##### Table of Contents



Critical
    Accounting Policies
  Use of
    Estimates
    Accounts
    Receivable
    Inventory
  first-in, first-in,
  Property,
    plant, and equipment
      Long-lived
    Assets
   41




---



##### Table of Contents



property-by-property
  Wells
    in Progress
    Goodwill
    and Acquired Intangible Assets
      Asset
    Retirement Obligations
    Fair
    Value Measurements
     42




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##### Table of Contents



Revenue
    Recognition
      Share
    Based Compensation
  and/or
  Income
    Taxes
     
 EXECUTIVE
    OFFICERS, EXECUTIVE COMPENSATION AND DIRECTORS  Executive
    Officers
 
   
  
 Name

Age

PositionMichael K. Galvis


54


President, Chief Executive Officer and Director of NYTEXKenneth K. Conte


52


Executive Vice President and Chief Financial Officer of NYTEXMichael G. Francis


63


President and Chief Executive Officer of FDFWilliam G. Brehmer


53


Former Chief Operating Officer and DirectorJude Gregory


43


Chief Financial Officer of FDF  
 43




---



##### Table of Contents



Michael K. Galvis
 
  Kenneth K. Conte Series 7-General
 
  Michael G. Francis (1995-2001) (1993-94);
 
  William G. Brehmer
 
 
  Jude N. Gregory
 44




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##### Table of Contents



Involvement
    of a Director in Certain Legal Proceedings
 
 
   
 
   
 
  Subsidiary
    Executive Officers, Directors and Managers
 
 
   
 
   
 45




---



##### Table of Contents



Summary
    Compensation Table
    Stock

All OtherName and Principal Position(1)

Year

Salary ($)

Bonus ($)(2)

Awards ($)(3)

Compensation ($)(8)

Total ($)Michael K. Galvis,


2010


$
407,217


$
205,000


$
52,000


$
36,975


$
701,192President and CEO(4)


2009


$
478,000


$
0


$
0


$
37,800


$
515,800Georgianna Hanes,


2010


$
152,900


$
35,000


$
0


$
4,800


$
192,700CFO, Treasurer & Secretary(5)


2009


$
168,000


$
0


$
0


$
4,800


$
172,800Kenneth K. Conte,


2010


$
91,666


$
20,000


$
312,000


$
2,586


$
423,666EVP & CFO(6)William G. Brehmer,


2010


$
35,467


$
0


$
0


$
4,800


$
40,267VP & COO(7)


2009


$
168,000


$
0


$
0


$
4,800


$
172,800     (1)
    
    On November 23, 2010 we consummated the FDF Acquisition. In
    connection therewith, FDF entered into an employment agreement
    with Michael G. Francis to act as President and CEO of FDF.
    Under his employment agreement Mr. Francis will receive an
    annual base salary of $200,000 and a $2,500 bonus for each key
    employee FDF retains for one year from the date of execution.
    Had we acquired FDF at the beginning of the fiscal year,
    Mr. Francis would have been considered a named executive
    officer. In addition to his base annual salary and bonus set
    forth above, Mr. Francis is eligible to receive stock
    grants, bonus awards and deferred compensation.Also in connection with the FDF Acquisition, FDF entered into an
    employment agreement with Jude Gregory to remain as Chief
    Financial Officer of FDF. Like Mr. Francis, had the FDF
    Acquisition taken place at the beginning of the fiscal year,
    Mr. Gregory would have been considered a named executive
    officer. Mr. Gregorys annual base salary is $150,000
    as well as is eligible to receive quarterly and annual bonuses
    as well as stock grants under performance based criteria set by
    the management of FDF.(2)
    
    All bonuses are discretionary based on each individual
    executives performance as determined by us.(3)
    
    Stock awards are valued at $1.04 per share of Common Stock for
    purposes of this annual report. 
  (4)
    
    Michael Galvis base salary is comprised of $275,000 under
    an employment agreement with us for his role as our President
    and CEO. 
 
  (5)
    
    Georgianna Hanes ceased being our CFO on June 1, 2010, and
    as our Secretary and Treasurer on April 30, 2011. 
  (6)
    
    Kenneth K. Conte became our Executive Vice President and CFO on
    June 1, 2010.(7)
    
    William Brehmer ceased being our COO on March 24, 2010 but
    remains as a Director.(8)
    
    Michael K. Galviss NYTEX Employment Agreement contemplates
    a car and health insurance allowance which equals in the
    aggregate $2,375 per month. Georgianna Hanes and William G.
    Brehmer received a health insurance allowance of approximately
    $400 per month. Kenneth K. Contes employment agreement
    provides for car allowance which in 2010 was equal to $431 per
    month.  Executive
    Employment Agreements
   
  Agreements with Michael K. Galvis. NYTEX Employment
    Agreement
 
 46




---



##### Table of Contents



Agreement with Kenneth K. Conte.
 
 
 
  
  Outstanding Equity Awards at Fiscal Year-End:
    Stock AwardsNumber of

Market or PayoutMarket Value of

Unearned Shares,

Value of UnearnedNumber of Shares or

Shares or Units of

Units or Other

Shares, Units orUnits That Have

Stock That Have

Rights That Have

Other Rights ThatName

Not Vested

Not Vested

Not Vested

Have Not VestedMichael K. Galvis,


33,333


$
61,999



150,000


$
279,000President and CEO of NYTEX(1)    
  (1)
    
    On November 23, 2010, Mr. Galvis was awarded
    50,000 shares of Common Stock which vest over three years
    in equal installments. 
  Option Exercises and Stock Vested
    Stock AwardsNumber of Shares

Value RealizedName

Acquired on Vesting

on VestingMichael K. Galvis,


16,667


$
31,001President & CEOKenneth K. Conte,


300,000


$
312,000EVP & CFO   Board
    of Directors
 
   
  
 Name

Age

PositionMichael K. Galvis


54


President, Chief Executive Officer and Director of NYTEX;
    Chairman of FDFWilliam G. Brehmer


53


DirectorJonathan Rich


42


Director  
 
  Michael K. Galvis. Executive
    Officers
 
 
  William G. Brehmer. Executive
    Officers
 
  Jonathan Rich
 47




---



##### Table of Contents



2010 Director
    Compensation
    Director
    Independence
  mother-in-law, daughter-in-law
   
 TRANSACTIONS
    WITH RELATED PERSONS AND CERTAIN CONTROL PERSONS  WayPoint,
    Thomas W. Drechsler and John Henry Moulton
 
 
   
 
   
 48




---



##### Table of Contents



Default Conditions default Change of Control
 
 
   
 
  (Put Notice)
 
 49




---



##### Table of Contents



SELLING
    SECURITY HOLDERS    
    the number of shares owned by the Selling Security Holders prior
    to this offering; and
    the total number of shares of Common Stock that are to be
    offered by the Selling Security Holders.      Series A Preferred Stockholders:
  Amount of Shares of

Amount of Shares ofCommon Stock Owned

Common Stock to beby Selling Security

Offered by theHolder Prior To

Selling SecurityName of Selling Security Holder

Offering

HolderApplebaum Family LTD Partnership(1)


32,500



32,500Alan and Lois Bauer


130,000



130,000 50




---



##### Table of Contents



Amount of Shares of

Amount of Shares ofCommon Stock Owned

Common Stock to beby Selling Security

Offered by theHolder Prior To

Selling SecurityName of Selling Security Holder

Offering

HolderAlfred L. Bell


32,500



32,500NFS/FMTC FBO Robin M. Bell IRA


32,500



32,500John J. Blum Jr.


65,000



65,000Eliot Brown


32,500



32,500Dwight Burton IRA


65,000



65,000Wayland Dwight Burton Jr. and Edie M. Burton


32,500



32,500Gary and Roxanne Case


32,500



32,500Chuck and Jane Cazett


78,000



78,000Douglas P. Cerretti


32,500



32,500William Coney


45,500



45,500Marilyn Ann Daniels Davis


130,000



130,000Greg Dawe


130,000



130,000Derm Surgery Associates, Dr. Leonard Goldberg(2)


97,500



97,500Robert S. Duncan IRA


32,500



32,500Arthur D. Dunkin


32,500



32,500Charles and Sibyl Eckert


130,000



130,000Edward & Elaine Epstein


32,500



32,500Chester W. Fox


65,000



65,000Thomas James Giftos


78,000



78,000Ralph Gitz


260,000



260,000Glendenning Investment Group(3)


130,000



130,000Baiju Gohil


32,500



32,500Marc Goldstein


32,500



32,500Edward A. Grimm and Iris J.M. Grimm


260,000



260,000Robert and Judy Harder


65,000



65,000Thomas and Lily Hauke


650,000



650,000Martin Herman


32,500



32,500John A. Jaecker


65,000



65,000Robert Kaufman


260,000



260,000Brian Gregory Kiernan


32,500



32,500Gregory P Kusnick & Karen Jo Gustafson


130,000



130,000Veronica & William Kwake


32,500



32,500Moe H. Leichter


65,000



65,000M. Butte Ltd.(4)


390,000



390,000Earl & Gloria Martin


260,000



260,000Lender Rev. Liv. Trust of Karl & Lillian R. Martinez
    U/A 7/20/89(5)


97,500



97,500Alex Mayers


130,000



130,000Richard McClowry


39,000



39,000The Charles and Bettye L. Middleton Revocable Living Trust(6)


65,000



65,000Don Morgenroth


97,500



97,500Jeremiah Murphy


65,000



65,000 51




---



##### Table of Contents



Amount of Shares of

Amount of Shares ofCommon Stock Owned

Common Stock to beby Selling Security

Offered by theHolder Prior To

Selling SecurityName of Selling Security Holder

Offering

HolderCarol R. Nagy and Edwin E. Meyer


97,500



97,500George W. Naylor IRA


65,000



65,000NFS/FMTC FBO Roger Nesbitt IRA


65,000



65,000Roger D. Nesbitt


130,000



130,000Michael Padgett


130,000



130,000Ranjan Pai


65,000



65,000David R Parker and Sunny H. Parker


130,000



130,000Ashar Qureshi


130,000



130,000Maurice Robson


65,000



65,000Dyke Rogers


130,000



130,000Samuel Rosenberg


65,000



65,000Steven D. Schmeichel


19,500



19,500John E. Schuler


32,500



32,500SE Scrap Investments, Inc.(7)


65,000



65,000Jagesh Jack Sharma


65,000



65,000Paul Smolk


32,500



32,500Bernice Staub


32,500



32,500Wayne Tackabury IRA


32,500



32,500Avraham and Susan Tahari


650,000



650,000Greer C. Tidwell


65,000



65,000John Y. Trent


32,500



32,500Elston Tsuda


32,500



32,500Theo Vafakos


32,500



32,500David Dahl Walter


39,000



39,000Peter Weiss


32,500



32,500Trust U/W Renee Weiss(8)


65,000



65,000Joan Wolf Loving Trust(9)


32,500



32,500Steven Wallitt


65,000



65,000Herbert Y. Aiwohi Revocable Trust(10)


32,500



32,500Robert S. Hanley Trust DTD 1/20/2006(11)


32,500



32,500Shawn R. McAllister


65,000



65,000Dennis Terry


65,000



65,000Brent Womack & Martha Womack


130,000



130,000William F. Adkins/Mary Ellen Adkins


58,500



58,500TDB Associates, Inc.(12)


199,375



65,000Richard T. Grimm Revocable Living Trust(13)


32,500



32,500Robert MacGillivray


195,000



195,000Rocking W Investments, Inc.(14)


65,000



65,000Wharton Turf-Grass, Inc.(15)


65,000



65,000Joe A. and Judy L. Bryant


65,000



65,000     (1)
    
    Irving Applebum has sole voting and investment control of the
    shares of Common Stock. 52




---



##### Table of Contents



(2)
    
    Dr. Leonard Goldberg has sole voting and investment control
    of the shares of Common Stock.(3)
    
    William Glendenning has sole voting and investment control of
    the shares of Common Stock.(4)
    
    Donald G. Moes has sole voting and investment control of the
    shares of Common Stock.(5)
    
    Kay Leslie, Trustee of the Trust, has sole voting and investment
    control of the shares of Common Stock.(6)
    
    Charles and Betty Middleton, Trustees of the Trust, have shared
    voting and investment control of the shares of Common Stock.(7)
    
    Morris Heider has sole voting and investment control of the
    shares of Common Stock.(8)
    
    Peter Weiss, Trustee of the Trust, has sole voting and
    investment control of the shares of Common Stock.(9)
    
    Joan and John Wolf, Trustees of the Trust, have shared voting
    and investment control of the shares of Common Stock.(10)
    
    Herbert Y. Aiwohi, Trustee of the Trust, has sole voting and
    investment control of the shares of Common Stock.(11)
    
    Robert S. Hanley, Trustee of the Trust, has sole voting and
    investment control of the shares of Common Stock.(12)
    
    Thomas B. Doolan has sole voting and investment control of the
    shares of Common Stock.(13)
    
    Richard T. Grimm, Trustee of the Trust, has sole voting and
    investment control of the shares of Common Stock.(14)
    
    Lynn A. Barringer has sole voting and investment control of the
    shares of Common Stock.(15)
    
    Charles A. Davis, Jr. has sole voting and investment control of
    the shares of Common Stock. 53




---



##### Table of Contents



Debenture
    Holders:
  Amount of Shares of

Amount of Shares ofCommon Stock Owned

Common Stock to beby Selling Security

Offered by theHolder Before the

Selling SecurityName of Selling Security Holder

Offering

HolderRodger Maechtlen


21,667



21,667Walter Kittrell


21,667



21,667Ronnie Lewis


193,334



173,334Sandra Schaffer


52,000



52,000Rich Pecunia


65,000



65,000Dr. Paul Clayman/Sterling Trust(1)


43,334



43,334Gjermund Kvalem


86,667



86,667Harold Pecunia


86,667



86,667Wayne Schrock


43,334



43,334Lenny Friedman


48,334



43,334Doug Capra


48,334



43,334George Evans


48,334



43,334Myrtus Outlaw


108,334



108,334Jay Olansen


86,667



86,667Charles Davis


108,334



108,334Stewart Lee  Entrust IRA


21,667



21,667Bailey C. Moseley, Jr.


43,334



43,334Brent Womack


43,334



43,334Wayne Jones


43,334



43,334Bailey C Moseley


43,334



43,334Mike Adams


26,000



26,000Billy Nolan


26,000



26,000Glen Adams


26,000



26,000John Christianson


21,667



21,667Roger Jungemann-Entrust IRA


21,667



21,667Madison Moseley


43,334



43,334Sam Moseley


43,334



43,334Carey Joy Moseley


43,334



43,334Scott McCleskey


21,667



21,667Stan Conley/Conley Business Pension Plan


86,667



86,667Bert Belk


86,667



86,667Myrtis Outlar


48,334



43,334Charles Davis


48,334



43,334Wayne Schrock


21,667



21,667Lynn Barringer


43,334



43,334Don Tredtin


21,667



21,667     (1)
    
    Dr. Paul Clayman, Trustee, holds voting and investment
    control of the shares of Common Stock. 54




---



##### Table of Contents



DESCRIPTION
    OF CAPITAL STOCK    Common
    Stock
 
   
 
   
 
  Our indebtedness and other payment
    obligations could restrict our operations and make us more
    vulnerable to adverse economic conditions.
 
 
   
 
   
 
  (Put Notice)
 
 55




---



##### Table of Contents



Disclosure
    of Commission Position on Indemnification For Securities Act
    Liabilities
 
  (212) 509-4000.
  Preferred
    Stock
      Series A
    Preferred Stock
 
   
 
  pari passu
 
 56




---



##### Table of Contents



Series B
    Preferred Stock
 
   
 PLAN
    OF DISTRIBUTION  over-the-counter
  
    ordinary brokerage transactions and transactions in which the
    broker-dealer solicits purchasers;
    block trades in which the broker-dealer will attempt to sell the
    shares as agent but may position and resell a portion of the
    block as principal to facilitate the transaction;
    purchases by a broker-dealer as principal and resale by the
    broker-dealer for its account;
    an exchange distribution in accordance with the rules of the
    applicable exchange;
    privately negotiated transactions;
    short sales;
    broker-dealers may agree with the Selling Security Holders to
    sell a specified number of such shares at a stipulated price per
    share;
    a combination of any such methods of sale; and
    any other method permitted pursuant to applicable law.         57




---



##### Table of Contents



LEGAL
    MATTERS
 
 
   
 INTERESTS
    OF NAMED EXPERTS AND COUNSEL   LEGAL
    PROCEEDINGS   
  (Plaintiffs) No. 10-122 Panhandle Field Producing
    Property Purchase
    Document
 
 58




---



##### Table of Contents



Settlement
 
 SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT   
  
 Amount and NatureName and Address of

of Beneficial

PercentTitle of Class

Beneficial Owner

Ownership

of ClassBeneficial Owners of More than 5% of Companys EquityCommon Stock

WayPoint Nytex, LLC
    555 Theodore Fremd Ave.,
    Suite C207 
    Rye, NY 10580


41,694,964
(1)


51.0
%(1)Series B Redeemable
    Preferred Stock

WayPoint Nytex, LLC
    555 Theodore Fremd Ave.,
    Suite C207
    Rye, NY 10580


1



100
%Common Stock

Diana Istre Francis
    416 North Avenue K 
    Crowley, LA 70526


2,058,125



7.8
%Common Stock

Richard Buccellato
    9 Hidden Hollow Terrace 
    Holmdel, NJ 07733


1,976,179
(2)


7.5
%Executive Officers and Directors of the CompanyCommon Stock

Michael K. Galvis
    Director, President and CEO of 
    NYTEX 
    12222 Merit Drive
    Suite 1850 
    Dallas, TX 75251


9,016,667



34.4
%Common Stock

Michael G. Francis
    Director of NYTEX,
    President and CEO of FDF 
    240 Jasmine Road 
    Crowley, LA 70526


2,822,063



10.8
%Common Stock

William Brehmer
    Director of NYTEX 
    12222 Merit Drive 
    Suite 1850 
    Dallas, TX 75251


1,013,425



3.9
%Common Stock

Jonathan Rich
    Director of NYTEX 
    330 Madison Ave., 18th Floor
    New York, NY 10017


0



0
% 
 59




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##### Table of Contents



Amount and NatureName and Address of

of Beneficial

PercentTitle of Class

Beneficial Owner

Ownership

of ClassCommon Stock

Kenneth K. Conte
    Executive Vice 
    President and CFO of
    NYTEX 
    12222 Merit Drive 
    Suite 1850 
    Dallas, TX 75251


300,000



1.1
%All officers and
    directors as a group 
    (5 persons)


13,152,155



50.4
%  
   
  (1)
    
    WayPoint Nytex, LLC, holds a Purchaser Warrant and a Control
    Warrant. The Purchaser Warrant entitles WayPoint to purchase
    that number of shares of Common Stock to equal 35% of the then
    outstanding shares of our Common Stock on a fully-diluted basis.
    The Control Warrant allows WayPoint the right to purchase a
    sufficient number of shares of our Common Stock at $0.01 per
    share so that, measured at the time of exercise, the number of
    shares of Common Stock issued or issuable pursuant to the
    WayPoint Warrants represent 51% of our outstanding Common Stock
    on a fully-diluted basis. This Control Warrant is exercisable
    because of the existence of certain default conditions set forth
    in the WayPoint Purchase Agreement, as more fully set forth
    under Transactions with Related Persons and Certain
    Control Persons on page 48. WayPoint Nytex,
    LLC has shared voting power of the shares of Common Stock
    issuable upon exercise of the Purchase Warrant and the Control
    Warrant with John Henry Moulton, former Director of NYTEX. 
  (2)
    
    The shares are held of record by Buccel, LLC, a wholly owned
    company of Richard Buccellato. 
  Changes
    In Control
 
 
  Transactions with Related Persons and
    Certain Control Persons
 
 DISCLOSURE
    OF COMMISSION POSITION ON
    INDEMNIFICATION FOR SECURITIES ACT LIABILITIES  Limitations
    on Liability and Indemnification of Directors and
    Officers
  DGCL
     60




---



##### Table of Contents



WHERE
    YOU CAN FIND MORE INFORMATION  972-770-4700. www.nytexenergyholdings.com
 
  Form 10-K, Form 10-Q, Form 8-K, 1-800-SEC-0330. www.sec.gov
 
 61




---



##### 



INDEX TO
    FINANCIAL STATEMENTS   
 
 PageNYTEX Energy Holdings, Inc.Unaudited Consolidated Financial Statements:Consolidated Balance Sheets as of March 31,
    2011 and December 31, 2010


F-2Consolidated Statements of Operations for the
    Three Months Ended March 31, 2011 and 2010


F-3Consolidated Statement of Equity (Deficit) for
    the Three Months Ended March 31, 2011 and 2010


F-4Consolidated Statements of Cash Flows for the
    Three Months Ended March 31, 2011 and 2010


F-5Notes to Consolidated Financial Statements


F-6Consolidated Financial Statements:Report of Independent Registered Public
    Accounting Firm


F-20Consolidated Balance Sheets as of
    December 31, 2010 and 2009


F-21Consolidated Statements of Operations for the
    Years Ended December 31, 2010 and 2009


F-22Consolidated Statements of Stockholders
    Equity (Deficit) for the Years Ended December 31, 2010 and
    2009


F-23Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2010 and 2009


F-24Notes to Consolidated Financial Statements


F-25Francis Drilling Fluids, Ltd.Independent Auditors Report


F-61Balance Sheets


F-62Statements of Income


F-63Statements of Retained Earnings


F-64Statements of Cash Flow


F-65Notes to Financial Statements


F-66Independent Auditors Report on the Supplemental
    Information


F-72Schedules of Selling Expenses


F-73Schedules of General and Administrative
    Expenses


F-74Schedules of Other Income (Expense)


F-75NYTEX Energy Holdings, Inc.Unaudited Pro Forma Combined Financial
    Information


F-76Pro Forma Combined Statement of Operations
    (Unaudited) for the Year Ended December 31, 2010


F-77Notes to Unaudited Pro Forma Combined Financial
    Statement


F-78  
  F-1




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Consolidated Balance Sheets
 
  
 March 31,


December 31,2011


2010(Unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
10,687


$
209,498Accounts receivable, net


11,496,013



12,230,782Inventories


1,296,719



1,237,149Prepaid expenses and other


1,428,483



2,028,968Deferred tax asset, net


11,612



13,487Total current assets


14,243,514



15,719,884Property, plant, and equipment, net


44,816,468



45,156,873Other assets:Deferred financing costs


1,915,440



2,014,561Intangible assets, net


13,949,414



14,322,604Goodwill


4,558,394



4,558,394Deposits and other


172,164



169,752Total assets

$
79,655,394


$
81,942,068LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Accounts payable

$
9,281,894


$
7,907,001Accrued expenses


3,060,797



3,327,030Revenues payable


31,670



36,345Wells in progress


502,157



403,415Deferred revenue


46,665



46,665Derivative liabilities  current portion


46,340,000



32,554,826Debt  current portion


21,267,652



22,516,398Total current liabilities


80,530,835



66,791,680Other liabilities:Debt


2,043,496



1,127,980Senior Series A redeemable preferred stock


1,341,414



398,232Derivative liabilities


773,000



1,573,560Asset retirement obligations


52,685



50,078Deferred tax liabilities


13,730,917



14,215,838Total liabilities


98,472,347



84,157,368Commitments and contingencies (Note 9)Stockholders deficit:Preferred stock, Series A convertible, $0.001 par
    value; 10,000,000 shares
    authorized; 6,000,000 and 5,580,000 shares issued and
    outstanding at
    March 31, 2011 and December 31, 2010, respectively


6,000



5,580Preferred stock, Series B, $0.001 par value;
    1 share authorized;
    1 share issued and outstanding at March 31, 2011 and
    December 31, 2010, respectively






Common stock, $0.001 par value; 200,000,000 shares
    authorized; 26,236,332 and 26,219,665 shares issued and
    outstanding at March 31, 2011 and 2010, respectively


26,236



26,219Additional paid-in capital


25,081,394



24,750,200Accumulated deficit


(43,930,583
)


(26,997,299
)Total stockholders deficit


(18,816,953
)


(2,215,300
)Total liabilities and stockholders deficit

$
79,655,394


$
81,942,068  
 
   
 F-2




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Consolidated
    Statements of Operations
 
 
 
  
 For the Three Months Ended March 31,2011


2010(Unaudited)Revenues:Oilfield services

$
16,532,098


$
Drilling fluids


2,019,804



Oil and gas


78,345



63,798Other


76,425



24,949Total revenues


18,706,672



88,747Operating expenses:Cost of goods sold  drilling fluids


510,700



Oil & gas lease operating expenses


37,764



42,652Depreciation, depletion, and amortization


2,164,667



14,674Selling, general, and administrative expenses


17,259,552



452,273Loss on litigation settlement


965,065



Gain on sale of assets, net


(61,758
)


(293,970
)Total operating expenses


20,875,990



215,629Loss from operations


(2,169,318
)


(126,882
)Other income (expense):Interest income


284



2Interest expense


(1,220,613
)


(58,979
)Change in fair value of derivative liabilities


(12,866,174
)


Accretion of preferred stock liability


(943,182
)


Equity in loss of unconsolidated subsidiaries






(116,093
)Other


(13,665
)


Total other expense


(15,043,350
)


(175,070
)Loss before income taxes


(17,212,668
)


(301,952
)Income tax benefit


412,284



Net loss


(16,800,384
)


(301,952
)Preferred stock dividends


(132,900
)


Net loss to common stockholders

$
(16,933,284
)

$
(301,952
)Net loss per share, basic and diluted

$
(0.65
)

$
(0.02
)Weighted average shares outstanding, basic and diluted


26,224,480



19,199,554  
 
   
 F-3




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Consolidated
    Statements of Stockholders Equity (Deficit)
 
  
 Series A Convertible


Series BPreferred Stock


Preferred Stock


Common StockAdditionalPaid-In


AccumulatedShares


Amounts


Shares


Amounts


Shares


Amounts


Capital


Deficit


Total(Unaudited)Balance at December 31, 2009





$







$




19,129,123


$
19,129


$
7,911,434


$
(7,293,154
)

$
637,409Issuance of common stock and warrants


















43,700



44



86,056







86,100Shares to be issued at maturity of loan


















59,375



59



(59
)






Net loss






























(301,952
)


(301,952
)Balance at March 31, 2010





$







$




19,232,198


$
19,232


$
7,997,431


$
(7,595,106
)

$
421,557Balance at December 31, 2010


5,580,000


$
5,580



1


$




26,219,665


$
26,219


$
24,750,200


$
(26,997,299
)

$
(2,215,300
)Issuance of Series A Convertible Preferred Stock


420,000



420



















369,050







369,470Shares issued for share-based compensation and services


















16,667



17



80,584







80,601Issuance of warrant derivative


























(118,440
)






(118,440
)Dividend declared






























(132,900
)


(132,900
)Net loss






























(16,800,384
)


(16,800,384
)Balance at March 31, 2011


6,000,000


$
6,000



1


$




26,236,332


$
26,236


$
25,081,394


$
(43,930,583
)

$
(18,816,953
)  
 
   
 F-4




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Consolidated
    Statements of Cash Flows
 
  
 For the Three Months EndedMarch 31,2011


2010(Unaudited)Cash flows from operating activities:Net loss

$
(16,800,384
)

$
(301,952
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation, depletion, and amortization


2,164,667



14,674Equity in loss of unconsolidated subsidiaries






116,093Bad debt expense


48,570



Share-based compensation


80,601



Deferred income taxes


(483,047
)


Accretion of discount on asset retirement obligations


2,607



1,355Amortzation of debt discount


39,819



Amortization of deferred financing fees


99,121



11,757Accretion of Senior Series A redeemable preferred stock
    liability


943,182



Change in fair value of derivative liabilities


12,866,174



Loss on litigation settlement


965,065



Gain on sale of assets


(61,758
)


(293,970
)Change in working capital:Accounts receivable


686,199



6,042Inventories


(59,570
)


Prepaid expenses and other


598,073



Accounts payable and accrued expenses


975,761



(63,905
)Other liabilities


94,067



107,515Net cash provided by (used in) operating activities


2,159,147



(402,391
)Cash flows from investing activities:Investments in oil and gas properties






(719
)Investments in unconsolidated subsidiaries






(100,000
)Additions to property, plant, and equipment


(2,575,155
)


Proceeds from sale of property, plant, and equipment


220,776



481,445Net cash provided by (used in) investing activities


(2,354,379
)


380,726Cash flows from financing activities:Proceeds from the issuance of common stock and warrants






86,100Proceeds from the issuance of Series A convertible
    preferred stock


369,470



Proceeds from the issuance of 9% convertible debentures


973,471



Borrowings under notes payable


20,450,082



Payments on notes payable


(21,796,602
)


(103,735
)Bank overdraft






21,164Net cash provided by (used in) financing activities


(3,579
)


3,529Net decrease in cash and cash equivalents


(198,811
)


(18,136
)Cash and cash equivalents at beginning of year


209,498



18,136Cash and cash equivalents at end of year

$
10,687


$
Supplemental disclosures of cash flow information:Total cash paid for interest

$
353,030


$
8,039Cash paid for interest  related party

$
2,475


$
7,800Supplemental disclosure of non-cash information:Exchange of working interest in oil and gas properties to retire
    debt

$



$
62,388Exchange of wells in progress funds to retire debt

$



$
37,612Exchange of wells in progress funds to satsify accrued interest

$



$
12,500Issuance of dervivative liability

$
118,440Dividend declared

$
132,900


$
  
 
   
 F-5




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes
    to Consolidated Financial Statements
 
 
  NOTE 1.
    NATURE OF
    BUSINESS 
 
   
 
  Liquidity
    and Events of Default
 
 
   
 
   
 
   
 F-6




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
   
 
   
 
   
 
  NOTE 2.
    PRINCIPLES
    OF CONSOLIDATION AND BASIS OF PRESENTATION 
 
   
 
   
 
  Form 10-K
 
 
  one-for-two
 
 
  NOTE 3.
    INVENTORY 
 
  first-in, first-in,
 
 F-7




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
   
 
  NOTE 4.
    BUSINESS
    COMBINATION 
 
   
 
   
 
   
  
 Revenue

$
15,476,237Net loss

$
(9,016,906
)Net loss per share, basic and diluted

$
(0.37
)  
 
  NOTE 5.
    GOODWILL
    AND ACQUIRED INTANGIBLE ASSETS 
 
   
 
   
  
 Gross





NetCarrying


Accumulated


Carrying


AmortizationAmount


Amortization


Amount


ExpenseNon-compete agreements

$
6,033,000


$
(436,686
)

$
5,596,314


$
327,515Customer relationships


3,654,000



(60,900
)


3,593,100



45,675$
9,687,000


$
(497,586
)

$
9,189,414


$
373,190  
 
   
 F-8




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
   
  
 April 1  December 31, 2011

$
1,119,5672012


1,492,7572013


1,086,0572014


795,5572015


795,5572016 and thereafter


3,899,919  
 
  NOTE 6.
    WAYPOINT
    TRANSACTION 
 
   
 
   
 
  Initial
    Accounting
 
 
   
 
   
 F-9




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
   
 
   
 
  Default
    Under WayPoint Purchase Agreement
 
 
   
 
   
 
  NOTE 7.
    DERIVATIVE
    LIABILITIES 
 
   
  
 March 31,


December 31,2011


2010WayPoint Warrant Derivative  Purchaser Warrant

$
29,040,000


$
32,554,826WayPoint Warrant Derivative  Control Warrant


17,300,000



Warrants  Series A Convertible Preferred Stock


773,000



1,573,560Balance at end of period

$
47,113,000


$
34,128,386  
 
   
 
   
 F-10




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
   
 
   
 
  NOTE 8.
    DEBT 
 
   
  
 March 31,


December 31,2011


201018% Bridge Loan due July 2011

$
192,398


$
234,9199% Demand Notes due February 2011






237,4580% Secured Equipment Loan due March 2011






2,0983.75% Secured Equipment Loan due June 2011


697,596



1,388,8076% Related Party Loan due September 2011


159,000



168,00012% Convertible Debentures due October 2011


2,090,407



2,064,8675.5% Mortgage Note due July 2012


339,782



343,6967.41% Secured Equipment Loan due November 2013


9,358



10,1495.75% Secured Equipment Loan due November 2013


39,669



43,0869% Convertible Debentures due February 2014


973,013



7.41% Secured Equipment Loan due July 2015






19,765Francis Promissory Note (non-interest bearing) due October 2015


472,363



478,710Senior Facility  Term Loan due November 2015


11,428,571



11,857,144Senior Facility  Revolver due November 2015


5,696,731



5,895,5796% Secured Equipment Loan due December 2015


877,812



900,1007.5% Secured Equipment Loan due February 2016


31,461



6.34% Secured Equipment Loan due April 2016


302,987



Total debt


23,311,148



23,644,378Less: current maturities


(21,267,652
)


(22,516,398
)Total long-term debt

$
2,043,496


$
1,127,980  
 
   
 
  Senior
    Revolving Credit and Term Loan Facility
 
 
   
 F-11




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
   
 
   
 
  Other
 
 
   
 F-12




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
  NOTE 9.
    COMMITMENTS
    AND CONTINGENCIES 
 
  Leases
 
 
   
  
 April 1, 2011  December 31, 2011

$
1,693,7912012


1,827,2162013


1,531,3702014


1,403,8982015


1,128,826Thereafter


1,013,956$
8,599,057  
 
   
 
  Litigation
 
 
   
 
  Plaintiffs th No. 10-122 th Purchase Document
 
 
   
 F-13




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
  NOTE 10.
    STOCKHOLDERS
    EQUITY 
 
   
 
   
 
  Private
    Placement  Series A Convertible Preferred
    Stock
 
 
   
 
  one-to-one.
 
 
  Warrants
 
 
   
 
   
 
   
 F-14




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
  time-to-liquidity
 
  
 Three Months Ended March 31,2011


2010Weighted Average





Weighted AverageWarrants


Exercise Price


Warrants


Exercise PriceOutstanding at beginning of period


44,061,330


$
0.18



5,798,502


$
0.50Issued


142,800



1.88



87,400



0.50Exercised














Forfeited or expired














Outstanding at end of period


44,204,130


$
0.18



5,885,902


$
0.50  
 
  NOTE 11.
    FAIR
    VALUE MEASURMENTS 
 
   
 
  
    Level 1  Quoted prices in active markets
    for identical assets or liabilities. These are typically
    obtained from real-time quotes for transactions in active
    exchange markets involving identical assets. 
 
  
    Level 2  Quoted prices for similar assets
    and liabilities in active markets; quoted prices included for
    identical or similar assets and liabilities that are not active;
    and model-derived valuations in which all significant inputs and
    significant value drivers are observable in active markets.
    These are typically obtained from readily-available pricing
    sources for comparable instruments. 
 
  
    Level 3  Unobservable inputs, where there
    is little or no market activity for the asset or liability.
    These inputs reflect the reporting entitys own beliefs
    about the assumptions that market participants would use in
    pricing the asset or liability, based on the best information
    available in the circumstances. 
 
   
 
   
 F-15




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
   
  
 Carrying Amount

Level 1

Level 2

Level 3Derivative liabilities

$
47,113,000


$



$



$
47,113,000  
 
   
  
 Balance, December 31, 2010

$
34,128,386Change in derivative liabilities


12,866,174Issuance of warrant derivative


118,440Balance, March 31, 2011

$
47,113,000  
 
   
 
  NOTE 12.
    INCOME
    TAXES 
 
   
 
   
 
  NOTE 13.
    LOSS PER
    SHARE 
 
  260-45 Participating Securities and the Two Class Method
 
 
   
 F-16




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
 
   
  
 For the Three Months EndedMarch 31,2011


2010Numerator:Net loss

$
(16,800,384
)

$
(301,952
)Attributable to participating securities


(132,900
)


Net loss used in calculating basic and diluted loss per share

$
(16,933,284
)

$
(301,952
)Denominator:Weighted average common shares outstanding, basic


26,224,480



19,199,554Attributable to participating securities






Shares used in calcuating basic and diluted loss per share


26,224,480



19,199,554Basic and diluted loss per share

$
(0.65
)

$
(0.02
)  
 
  NOTE 14.
    SEGMENT
    INFORMATION 
 
   
 
   
 
   
  F-17




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
  
 Corporate andOil Field





IntersegmentServices


Oil & Gas


Eliminations


TotalAs of March 31, 2011:Current Assets

$
13,993,847


$
249,667


$



$
14,243,514Property, plant, and equipment, net


43,924,813



891,655







44,816,468Goodwill/intangible assets


18,507,808











18,507,808Deferred financing cost


701,661







1,213,779



1,915,440Other assets


112,868



59,296







172,164Total assets

$
77,240,997


$
1,200,618


$
1,213,779


$
79,655,394Current liabilities

$
76,693,563


$
1,224,284


$
2,612,988


$
80,530,835Long-term debt


1,084,017



637,115



322,364



2,043,496Senior Series A redeemable preferred stock


1,341,414











1,341,414Warrant derivative










773,000



773,000Asset retirement obligation






52,685







52,685Deferred income taxes


14,350,927







(620,010
)


13,730,917Stockholders deficit


(16,228,924
)


(713,466
)


(1,874,563
)


(18,816,953
)Total liabilities and stockholders deficit

$
77,240,997


$
1,200,618


$
1,213,779


$
79,655,394Additions to long-lived assets

$
2,501,974


$
73,181


$



$
2,575,155  
  F-18




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 
  
 Corporate andOil Field





IntersegmentServices


Oil and Gas


Eliminations


TotalThree Months Ended March 31, 2011:Revenues:Oil field services

$
16,532,098


$



$



$
16,532,098Drilling fluids


2,019,804











2,019,804Oil & gas






78,345







78,345Other






76,425







76,425Total Revenues


18,551,902



154,770







18,706,672Expenses and other, net:Cost of goods sold  drilling fluids


510,700











510,700Lease operating expenses






37,764







37,764Depreciation, depletion, and amortization


2,131,699



32,968







2,164,667Selling, general and administrative expenses


16,076,970



661,142



521,440



17,259,552Loss on litigation settlement






965,065







965,065(Gain) loss on sale of assets


(64,862
)


3,104







(61,758
)Interest income










(284
)


(284
)Interest expense


1,007,815



16,358



196,440



1,220,613Accretion of preferred stock


943,182











943,182Change in fair value of derivative


13,785,174







(919,000
)


12,866,174Other


13,665











13,665Total expenses and other, net


34,404,343



1,716,401



(201,404
)


35,919,340Loss before income taxes


(15,852,441
)


(1,561,631
)


201,404



(17,212,668
)Income tax benefit


412,284











412,284Net loss

$
(15,440,157
)

$
(1,561,631
)

$
201,404


$
(16,800,384
)  
 
  *****
 
 F-19




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM              
    F-20




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Consolidated Balance Sheets
  At December 31,2010


2009ASSETSCurrent assets:Cash and cash equivalents

$
209,498


$
18,136Accounts receivable, net


12,230,782



82,124Inventories


1,237,149



Prepaid expenses and other


2,028,968



Deferred tax asset, net


13,487



Total current assets


15,719,884



100,260Property, plant, and equipment, net


45,156,873



1,075,468Other assets:Deferred financing costs


2,014,561



Intangible assets


14,322,604



Goodwill


4,558,394



Investments in unconsolidated subsidiaries






1,479,159Deposits and other


169,752



68,640Total assets

$
81,942,068


$
2,723,527LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable

$
7,907,001


$
511,624Accrued expenses


3,327,030



131,201Revenues payable


36,345



33,684Wells in progress


403,415



163,891Deferred revenue


46,665



46,665Derivative liability  current portion


32,554,826



Debt  current portion


22,516,398



1,148,363Total current liabilities


66,791,680



2,035,428Other liabilities:Debt


1,127,980



9,807Senior Series A redeemable preferred stock


398,232



Derivative liabilities


1,573,560



Asset retirement obligations


50,078



40,883Deferred tax liabilities


14,215,838



Total liabilities


84,157,368



2,086,118Commitments and contingencies (Note 12)Stockholders equity (deficit):Preferred stock, Series A convertible, $0.001 par
    value; 10,000,000 shares authorized; 5,580,000 and no
    shares issued and outstanding at December 31, 2010 and
    2009, respectively


5,580



Preferred stock, Series B, $0.001 par value;
    1 share authorized; 1 and no shares issued and outstanding
    at December 31, 2010 and 2009, respectively






Common stock, $0.001 par value; 200,000,000 shares
    authorized; 26,219,665 and 19,129,123 shares issued and
    outstanding at December 31, 2010 and 2009, respectively


26,219



19,129Additional paid-in capital


24,750,200



7,911,434Accumulated deficit


(26,997,299
)


(7,293,154
)Total stockholders equity (deficit)


(2,215,300
)


637,409Total liabilities and stockholders equity (deficit)

$
81,942,068


$
2,723,527    F-21




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Consolidated Statements of
    Operations
  Years Ended December 31,2010


2009Revenues:Oilfield services

$
6,031,455


$
Drilling fluids


1,059,008



Oil and gas


204,906



206,026Other


576,981



361,533Total revenues


7,872,350



567,559Operating expenses:Cost of goods sold  drilling fluids


437,230



Oil & gas lease operating expenses


143,361



331,893Depreciation, depletion, and amortization


772,826



83,457Selling, general, and administrative expenses


10,919,713



2,294,597Impairment of long-lived assets






147,474Gain on sale of assets, net


(466,902
)


Total operating expenses


11,806,228



2,857,421Loss from operations


(3,933,878
)


(2,289,862
)Other income (expense):Interest income


1,230



686Interest expense


(832,164
)


(170,486
)Change in fair value of derivative liabilities


(13,301,755
)


Accretion of preferred stock liability


(398,232
)


Equity in loss of unconsolidated subsidiaries


(317,158
)


(897,834
)Loss on sale of unconsolidated subsidiary


(870,750
)


Other


5,141



Total other expense


(15,713,688
)


(1,067,634
)Loss before income taxes


(19,647,566
)


(3,357,496
)Income tax benefit (provision)


(3,299
)


Net loss


(19,650,865
)


(3,357,496
)Preferred stock dividends


(53,280
)


Net loss attributable to common stockholders

$
(19,704,145
)

$
(3,357,496
)Net loss per share, basic and diluted

$
(0.98
)

$
(0.18
)Weighted average shares outstanding, basic and diluted


20,149,999



18,688,976    F-22




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Consolidated Statement of Stockholders
    Equity (Deficit)
  
 Series A Convertible


Series B








AdditionalPreferred Stock


Preferred Stock


Common Stock


Paid-In


AccumulatedShares


Amounts


Shares


Amounts


Shares


Amounts


Capital


Deficit


TotalBalance at December 31, 2008





$







$




18,068,372


$
18,068


$
5,734,956


$
(3,935,658
)

$
1,817,366Issuance of common stock and warrants


















1,060,751



1,061



2,105,941







2,107,002Shares to be issued at maturity of loan


























70,537







70,537Net loss






























(3,357,496
)


(3,357,496
)Balance at December 31, 2009


















19,129,123



19,129



7,911,434



(7,293,154
)


637,409Issuance of common stock and warrants


















91,200



91



181,009







181,100Shares issued for share-based compensation and services


















871,337



871



1,014,654







1,015,525Shares and warrants issued with 12% convertible debenture


















45,000



45



207,661







207,706Shares issued in connection with acquisitions


















6,023,630



6,024



11,197,928







11,203,952Shares issued at maturity of debt


















59,375



59



(59
)






Warrants issued to private placement agent


























778,769







778,769Warrants issued for short-term loan


























8,934







8,934Issuance of Series A Convertible Preferred Stock


5,580,000



5,580



















3,449,869







3,455,449Issuance of Series B preferred stock in connection with
    acquisition










1















1







1Dividends on Series A convertible preferred stock






























(53,280
)


(53,280
)Net loss






























(19,650,865
)


(19,650,865
)Balance at December 31, 2010


5,580,000


$
5,580



1


$




26,219,665


$
26,219


$
24,750,200


$
(26,997,299
)

$
(2,215,300
)  
   F-23




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Consolidated Statements of Cash
    Flows
  
 Years Ended December 31,2010


2009Cash flows from operating activities:Net loss

$
(19,650,865
)

$
(3,357,496
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation, depletion, and amortization


772,826



83,457Equity in loss of unconsolidated subsidiaries


317,158



897,834Impairment of long-lived assets






147,474Bad debt expense


21,272



Share-based compensation


1,015,525



Deferred income taxes


(10,311
)


Accretion of discount on asset retirement obligations


4,080



27,652Amortization of debt discount


134,073



Amortization of deferred financing fees


35,766



58,781Accretion of Senior Series A redeemable preferred stock
    liability


398,232



Change in fair value of derivative liabilities


13,301,755



Loss on disposal, net


403,848



Change in working capital:Accounts receivable


1,111,958



(47,629
)Inventories


103,050



Prepaid expenses and other


10,305



(52,529
)Accounts payable and accrued expenses


827,136



523,380Other liabilities


150,037



(377,013
)Net cash used in operating activities


(1,054,155
)


(2,096,089
)Cash flows from investing activities:Acquisitions, net of cash acquired


(40,802,873
)


Investments in oil and gas properties


(28,161
)


(855,168
)Investments in unconsolidated subsidiaries


(108,750
)


(283,796
)Additions to property, plant, and equipment


(1,886,205
)


(17,067
)Proceeds from divestitures


1,259,408



Net cash used in investing activities


(41,566,581
)


(1,156,031
)Cash flows from financing activities:Proceeds from the issuance of common stock and warrants


181,100



2,107,002Proceeds from the issuance of Series A convertible
    preferred stock


5,029,011



Proceeds from the issuance of 12% convertible debentures


2,150,000



Proceeds from the issuance of derivative liability


19,253,071



Borrowings under notes payable


27,684,343



963,450Payments on notes payable


(10,213,869
)


(100,280
)Issuance costs


(1,271,558
)


Net cash provided by financing activities


42,812,098



2,970,172Net increase (decrease) in cash and cash equivalents


191,362



(281,948
)Cash and cash equivalents at beginning of year


18,136



300,084Cash and cash equivalents at end of year

$
209,498


$
18,136  
   F-24




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes
    to Consolidated Financial Statements
  NOTE 1.
    NATURE OF
    BUSINESS            Liquidity
    and Events of Default
   F-25




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
          NOTE 2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Principles
    of Consolidation and Basis of Presentation
      one-for-two
 F-26




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Use of
    Estimates
      Cash
    and Cash Equivalents
    Accounts
    Receivable
    Inventory
  first-in, first-in,
  Property,
    plant, and equipment
     F-27




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Long-lived
    Assets
    property-by-property
  Wells
    in Progress
    Goodwill
    and Acquired Intangible Assets
      Asset
    Retirement Obligations
   F-28




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Fair
    Value Measurements
            Revenue
    Recognition
     F-29




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Selling,
    General, and Administrative Expenses
    
 December 31,2010


2009Salary, wages, and benefits

$
4,051,119


$
1,114,674Legal, accounting, and professional fees


1,945,787



659,356Acquisition-related expenses


1,247,997



Contract labor


254,917



72,490Rent and operating lease expenses


253,957



60,113Insurance


326,461



28,274Fuel


806,752



Other


2,032,723



359,690$
10,919,713


$
2,294,597  
  Share
    Based Compensation
  and/or
  Income
    Taxes
      Net
    Loss Per Common Share
   F-30




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  one-for-two
  Recently
    Issued Accounting Standards
    NOTE 3.
    ACCOUNTS
    RECEIVABLE    December 31,2010


2009Trade receivables

$
11,833,532


$
4,342Other


418,522



77,782Total accounts receivable


12,252,054



82,124Allowance for doubtful accounts


(21,272
)


Accounts receivable, net

$
12,230,782


$
82,124   NOTE 4.
    PROPERTY,
    PLANT, AND EQUIPMENT    December 31,2010


2009Land

$
2,180,000


$
Plant, machinery & equipment


36,587,798



50,055Construction in progress


5,165,424



Oil and gas properties


1,951,312



1,133,370Total property, plant, & equipment


45,884,534



1,183,425Accumulated DD&A


(727,661
)


(107,957
)Property, plant, & equipment, net

$
45,156,873


$
1,075,468    F-31




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  NOTE 5.
    BUSINESS
    COMBINATIONS  Francis
    Drilling Fluids
    Proceeds from the issuance of Series A Convertible
    Preferred Stock of NYTEX Energy(1)

$
2,887,597Proceeds from the issuance of Series B Preferred Stock of
    NYTEX Energy


1Proceeds from the issuance of Senior Series A Redeemable
    Preferred Stock of Acquisition Inc.(2)


19,253,071Proceeds from long-term debt(3)


19,159,222Total cash consideration

$
41,299,891     (1)
    
    Represents a portion of the proceeds, net of offering costs and
    fair value of the embedded warrant, from the private placement
    of our Series A Convertible Preferred Stock concluded in
    January 2011 for gross proceeds of $6,000,000. See Note 13.(2)
    
    Along with Acquisition Inc., we entered into a Preferred Stock
    and Warrant Purchase Agreement with a third party, whereby, in
    exchange for $20,000,001 (net of offering costs), we issued to
    them 20,750 shares of Acquisition Inc. 14% Senior
    Series A Redeemable Preferred Stock, one share of
    Series B Preferred Stock of NYTEX Energy, a warrant
    (Purchaser Warrant) to purchase up to 35% of the
    then outstanding shares of our Common Stock, and a warrant
    (Control Warrant) to purchase additional shares of
    our outstanding Common Stock such that when combined with the
    Purchaser Warrant, provides WayPoint with an aggregate 51% of
    the total outstanding Common Stock. Further, such warrant
    becomes exercisable only if certain conditions of default are
    met as set forth in the Preferred Stock and Warrant Purchase
    Agreement. See Note 9.(3)
    
    Acquisition Inc. and FDF, as co-borrowers, entered into a
    revolving credit and term loan facility with a third-party
    lender providing for loans up to $24,000,000.   F-32




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Pro Forma for the Year Ended December 31,2010

2009Revenue

$
75,853,294


$
53,451,289Net loss

$
(7,608,055
)

$
(10,723,311
)Net loss per share, basic and diluted

$
(0.31
)

$
(0.47
)     
    Additional depreciation and amortization expense of
    approximately $8,325,000 and $8,241,000 for the years ended
    December 31, 2010 and 2009, respectively;
    Additional interest expense of approximately $3,046,000 and
    $3,243,000 for the years ended December 31, 2010 and 2009,
    respectively, related to the incremental debt we incurred to
    finance the acquisition;
    Accretion expense of approximately $3,773,000 for each of the
    years ended December 31, 2010 and 2009, related to the
    $20,750,000 face amount of Acquisition Inc. redeemable preferred
    stock over the term of the instrument of approximately
    5.5 years; and
    Elimination of approximately $4,839,000 and $4,972,000 of lease
    expenses incurred for the years ended December 31, 2010 and
    2009, respectively, related to operating leases that were
    terminated and
    paid-in-full
    at acquisition.   F-33




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    
 Estimated fair value of assets acquired and liabilities assumed:Cash and cash equivalents

$
497,018Accounts receivable


13,281,888Inventory


1,340,199Prepaid expenses and other


2,273,834Property and equipment


38,692,890Construction in Progress


3,308,270Identifiable intangible assets


14,447,000Other assets acquired


112,868Accounts payable


(7,065,761
)Accrued expenses


(2,912,987
)Francis Group debt assumed


(2,240,949
)Deferred tax liability


(14,458,978
)Subtotal of estimated fair value of net assets acquired

$
47,275,292Goodwill

$
4,558,394  
        Panhandle
    Field Producing Property
     F-34




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Lease and well equipment

$
41,000Proved properties


672,231Total assets acquired


713,231Asset retirement obligation


(13,231
)Net assets acquired

$
700,000     Pro Formafor theYear EndedDecember 31,2009Revenue

$
678,047Net loss

$
(3,336,731
)Net loss per share, basic and diluted

$
(0.18
)           Lease and well equipment

$
93,536Proved properties


1,389,040Total assets acquired


1,482,576Asset retirement obligation


(30,718
)Net assets acquired

$
1,451,858  F-35




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Pro Formafor theYear EndedDecember 31,2010Revenue

$
8,014,070Net loss

$
(20,150,727
)Net loss per share, basic and diluted

$
(0.97
)   NOTE 6.
    INVESTMENTS
    IN UNCONSOLIDATED SUBSIDIARIES  Waterworks
    Supreme
    Vacuum
     F-36




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    
 Year EndedDecember 31,2009Operating results:Service revenue

$
2,780,613Operating expenses


3,666,556Loss from operations

$
(885,943
)Net loss

$
(1,170,122
)  
  December 31,2009Balance Sheet:Current assets

$
668,506Non-current assets


4,078,930Total assets

$
4,747,436Current liabilities

$
1,559,880Non-current liabilities


2,111,605Total liabilities


3,671,485Equity


1,075,951Total liabilities and equity

$
4,747,436   NOTE 7.
    GOODWILL
    AND ACQUIRED INTANGIBLE ASSETS      Gross





NetCarrying


Accumulated


Carrying


AmortizationAmount


Amortization


Amount


ExpenseNon-compete agreements

$
6,033,000


$
(109,171
)

$
5,923,829


$
109,171Customer relationships


3,654,000



(15,225
)


3,638,775



15,225$
9,687,000


$
(124,396
)

$
9,562,604


$
124,396    F-37




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    2011

$
1,492,7572012


1,492,7572013


1,086,0572014


795,5572015


795,5572016 and thereafter


3,899,919   NOTE 8.
    ASSET
    RETIREMENT OBLIGATION    December 31,2010


2009Asset retirement obligation as of beginning of year

$
40,883


$
Liabilities incurred


30,718



38,780Liabilities settled


(25,603
)


(25,549
)Revision of estimated obligation






Accretion expense


4,080



27,652Asset retirement obligation as of end of year

$
50,078


$
40,883   NOTE 9.
    WAYPOINT
    TRANSACTION    14%
    Senior Series A Redeemable Preferred Stock
  day-to-day,
   F-38




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Series B
    Preferred Stock
    Warrants
      Other
    Obligations
     F-39




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Initial
    Accounting
      Default
    Under WayPoint Purchase Agreement
    NOTE 10.
    DERIVATIVE
    LIABILITIES    WayPoint Warrant Derivative

$
32,554,826Warrrants  Series A Convertible Preferred Stock


1,573,560Total derivative liabilities at December 31, 2010

$
34,128,386    F-40




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
        NOTE 11.
    DEBT    December 31,2010


200925% Bridge Loan due January 2010

$



$
100,00025% Bridge Loan due July 2011






100,00018% Bridge Loan due December 2010






150,00018% Bridge Loan due July 2011


234,919



600,0009% Demand Notes due February 2011


237,458



0% Secured Equipment Loan due March 2011


2,098



3.75% Secured Equipment Loan due June 2011


1,388,807



6% Related Party Loan due September 2011


168,000



195,00012% Convertible Debentures due October 2011


2,064,867



5.5% Mortgage Note due July 2012


343,696



7.41% Secured Equipment Loan due November 2013


10,149



13,1705.75% Secured Equipment Loan due November 2013


43,086



7.41% Secured Equipment Loan due July 2015


19,765



Francis Promissory Note (non-interest bearing) due October 2015


478,710



Senior Facility  Term Loan due November 2015


11,857,144



Senior Facility  Revolver due November 2015


5,895,579



6% Secured Equipment Loan due December 2015


900,100



Total debt


23,644,378



1,158,170Less: current maturities


(22,516,398
)


(1,148,363
)Total long-term debt

$
1,127,980


$
9,807    F-41




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    
 2011

$
22,516,3982012


244,0322013


248,3582014


235,3642015


756,6502016 and thereafter


Unamortized Discount


(356,424
)$
23,644,378  
  Senior
    Revolving Credit and Term Loan Facility
      $2.15
    Million Debentures
   F-42




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Francis
    Promissory Note
    Related
    Party Loan
      Other
    Debentures and Loans
     F-43




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
      NOTE 12.
    COMMITMENTS
    AND CONTINGENCIES  Leases
    
 2011

$
1,634,6702012


1,120,1212013


905,0112014


845,4982015


612,258Thereafter


971,247$
6,088,805  
    Litigation
    (Plaintiffs) No. 10-122 Panhandle
    Property Purchase Document
  Environmental
   F-44




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  and/or
  NOTE 13.
    STOCKHOLDERS
    EQUITY      Private
    Placement  Common Stock
    Other
    Common Stock Issuances
         F-45




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Private
    Placement  Series A Convertible Preferred
    Stock
    one-to-one.
  Warrant
    Issuances
             F-46




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  12-month
    time-to-liquidity
  WeightedAverageWarrants


Exercise PriceOutstanding at December 31, 2009


2,899,251


$
1.00Issued


41,162,079



0.12Exercised






Forfeited or expired






Outstanding at December 31, 2010


44,061,330


$
0.18   NOTE 14.
    FAIR
    VALUE MEASURMENTS    
    Level 1  Quoted prices in active markets
    for identical assets or liabilities. These are typically
    obtained from real-time quotes for transactions in active
    exchange markets involving identical assets.
    Level 2  Quoted prices for similar assets
    and liabilities in active markets; quoted prices included for
    identical or similar assets and liabilities that are not active;
    and model-derived valuations in which all significant inputs and
    significant value drivers are observable in active markets.
    These are typically obtained from readily-available pricing
    sources for comparable instruments. F-47




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
   
    Level 3  Unobservable inputs, where there
    is little or no market activity for the asset or liability.
    These inputs reflect the reporting entitys own beliefs
    about the assumptions that market participants would use in
    pricing the asset or liability, based on the best information
    available in the circumstances.        CarryingAmount

Level 1

Level 2

Level 3Derivative liabilities

$
34,128,386


$



$



$
34,128,386     Balance, December 31, 2009

$
Issuance of derivative instruments


20,826,631Change in derivative liabilities


13,301,755Balance, December 31, 2010

$
34,128,386   NOTE 15.
    OIL
    CONTAINMENT BOOM ACTIVITIES     F-48




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
          NOTE 16.
    INCOME
    TAXES   
   
 F-49




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    December 31,2010


2009Expected income tax benefit based on U.S. statutory rate of 34%

$
(6,680,172
)

$
(1,141,549
)State income taxes (net of federal income tax benefit)


13,609



Net book/tax differences on unconsolidated subsidiaries


(308,981
)


281,577Acquisition costs


407,749



Other


5,502



2,997Valuation allowance


6,565,592



856,975Income tax provison (benefit)

$
3,299


$
     December 31,2010


2009Deferred tax assets:Net operating loss carryforwards

$
3,667,779


$
1,361,839Impairment of oil and gas properties


249,099



219,876Intangible assets


383,048



Fair value of derivative


5,123,679



Accretion expense






13,900Deferred revenue






15,866Other


367,074



Valuation allowance on deferred tax assets


(9,124,025
)


(1,455,496
)Total deferred tax assets


666,654



155,985Deferred tax liabilities:Property, plant, and equipment


(9,094,577
)


(155,985
)Intangible assets


(5,691,850
)


Other


(82,578
)


Total deferred tax liabilities


(14,869,005
)


(155,985
)Net deferred tax liability

$
(14,202,351
)

$
     December 31,2010


2009Current deferred tax asset, net

$
13,487


$
155,985Non-current deferred tax liability, net


(14,215,838
)


(155,985
)$
(14,202,351
)

$
    F-50




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  and/or
  NOTE 17.
    LOSS PER
    SHARE  260-45 Participating Securities and the Two Class Method
    
 December 31,2010


2009Numerator:Net loss

$
(19,650,865
)

$
(3,357,496
)Attributable to participating securities


(53,280
)


Net loss used in calculating basic and diluted loss per share

$
(19,704,145
)

$
(3,357,496
)Denominator:Weighted average common shares outstanding, basic


20,149,999



18,688,976Attributable to participating securities






Shares used in calculating basic and diluted loss per share


20,149,999



18,688,976Basic and diluted loss per share

$
(0.98
)

$
(0.18
)  
  NOTE 18.
    SEGMENT
    INFORMATION   F-51




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
      Corporate andOil Field





IntersegmentServices


Oil and Gas


Eliminations


TotalYear Ended December 31, 2010:Revenues:Oil field services

$
6,031,455


$



$



$
6,031,455Drilling fluids


1,059,008











1,059,008Oil & gas






204,906







204,906Other






576,981







576,981Total Revenues


7,090,463



781,887







7,872,350Expenses and other, net:Cost of goods sold  drilling fluids


437,230











437,230Production cost  oil & gas






14,489







14,489Lease operating expenses






128,872







128,872Depreciation, depletion, and amortization


690,369



82,457







772,826Selling, general and administrative expenses


5,739,505



2,539,725



2,640,483



10,919,713Gain on sale of assets






(466,902
)






(466,902
)Interest income










(1,230
)


(1,230
)Interest expense


427,117



21,687



383,360



832,164Accretion of preferred stock


398,232











398,232Equity in loss of unconsolidated subsidiaries






8,750



308,408



317,158Loss on sale of unconsolidated subsidiary










870,750



870,750Change in fair value of derivative


13,301,755











13,301,755Other income


(5,141
)










(5,141
)Total expenses and other, net


20,989,067



2,329,078



4,201,771



27,519,916Loss before income taxes


(13,898,604
)


(1,547,191
)


(4,201,771
)


(19,647,566
)Income tax benefit (provision)


(3,299
)










(3,299
)Net loss

$
(13,901,903
)

$
(1,547,191
)

$
(4,201,771
)

$
(19,650,865
)   F-52




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  
 Corporate andOil Field





IntersegmentServices


Oil & Gas


Eliminations


TotalAs of December 31, 2010:Current Assets

$
15,311,299


$
243,185


$
165,400


$
15,719,884Property, plant, and equipment, net


43,295,611



1,861,262







45,156,873Goodwill / intangible assets


18,880,998











18,880,998Deferred financing cost


735,612







1,278,949



2,014,561Other assets


112,868



56,884







169,752Total assets

$
78,336,388


$
2,161,331


$
1,444,349


$
81,942,068Current liabilities

$
62,694,911


$
1,183,510


$
2,913,259


$
66,791,680Long-term debt


861,581



22,822



243,577



1,127,980Senior Series A redeemable preferred stocki


398,232











398,232Warrant derivative










1,573,560



1,573,560Asset retirement obligation






50,078







50,078Deferred income taxes


14,215,838











14,215,838Stockholders equity (deficit)


165,826



904,921



(3,286,047
)


(2,215,300
)Total liabilities and stockholders equity

$
78,336,388


$
2,161,331


$
1,444,349


$
81,942,068Additions to long-lived assets

$
1,864,622


$



$
21,583


$
1,886,205Acquisition of proved properties

$



$
1,451,858


$



$
1,451,858  
  NOTE 19.
    SUPPLEMENTAL
    CASH FLOW INFORMATION    Years Ended December 31,2010


2009Interest paid

$
362,940


$
13,747Non-cash investing and financing activities:Additions to property and asset retirement obligations

$
5,115


$
38,780Additions to property, plant, and equipment through issuance of
    common stock and debt

$
1,425,795


$
Exchange of interests in oil and gas properties

$
42,036


$
Common stock issued in connection with acquisitions

$
11,203,951


$
Debt issued/assumed in acquisitions

$
3,228,407


$
Common stock issued for debt

$



$
70,537Issuance of derivative liability

$
1,573,560


$
  F-53




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  NOTE 20.
    CONDENSED
    PARENT COMPANY ONLY FINANCIAL STATEMENTS       F-54




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  NYTEX
    ENERGY HOLDINGS, INC.
    Condensed Balance Sheets
  At December 31,2010


2009ASSETSCurrent assets:Cash and cash equivalents

$
165,400


$
1,407Total current assets


165,400



1,407Deferred financing costs


1,278,949



Investment in subsidiaries


1,136,542



221,748Investments in unconsolidated subsidiaries






1,479,159Total assets

$
2,580,891


$
1,702,314LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accrued expenses

$
444,135


$
126,661Debt  current portion


2,534,919



938,244Total current liabilities


2,979,054



1,064,905Debt


243,577



Derivative liabilities


1,573,560



Total liabilities


4,796,191



1,064,905Stockholders equity:Preferred stock, Series A


5,580



Preferred stock, Series B






Common stock


26,219



19,129Additional paid-in capital


24,750,200



7,911,434Accumulated deficit


(26,997,299
)


(7,293,154
)Total stockholders equity


(2,215,300
)


637,409Total liabilities and stockholders equity

$
2,580,891


$
1,702,314  F-55




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  NYTEX
    ENERGY HOLDINGS, INC.
    Condensed Statements of Operations
  Years Ended December 31,2010


2009Revenues

$
62,500


$
Operating expenses:Selling, general, and administrative expenses


2,640,483



27,850Total operating expenses


2,640,483



27,850Loss from operations


(2,577,983
)


(27,850
)Other income (expense):Interest income


1,230



600Interest expense


(383,360
)


(157,739
)Equity in loss of subsidiaries


(15,511,594
)


(2,344,338
)Equity in loss of unconsolidated subsidiaries


(308,408
)


(828,169
)Loss on sale of unconsolidated subsidiary


(870,750
)


Total other expense


(17,072,882
)


(3,329,646
)Net loss

$
(19,650,865
)

$
(3,357,496
)  F-56




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  NYTEX
    ENERGY HOLDINGS, INC.
    Condensed Statements of Cash Flows
  Years Ended December 31,2010


2009Cash flows from operating activities:Net loss

$
(19,650,865
)

$
(3,357,496
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Equity in loss of unconsolidated subsidiaries


308,408



828,169Equity in loss of subsidiaries


15,511,594



2,344,338Share-based compensation


1,015,525



Amortization of deferred financing fees


35,766



Loss on disposal, net


870,750



Change in working capital:Accounts payable and accrued expenses


276,694



126,661Net cash used in operating activities


(1,632,128
)


(58,328
)Cash flows from investing activities:Investments in subsidiaries


(4,621,335
)


(3,303,001
)Investments in unconsolidated subsidiaries


(99,999
)


Proceeds from divestitures


400,000



Net cash used in investing activities


(4,321,334
)


(3,303,001
)Cash flows from financing activities:Proceeds from the issuance of common stock and warrants


181,100



2,177,538Proceeds from the issuance of Series A convertible
    preferred stock


5,029,011



Proceeds from the issuance of 12% convertible debentures


2,150,000



Borrowings under notes payable






938,244Payments on notes payable


(706,710
)


Issuance costs


(535,946
)


Net cash provided by financing activities


6,117,455



3,115,782Net increase (decrease) in cash and cash equivalents


163,993



(245,547
)Cash and cash equivalents at beginning of year


1,407



246,954Cash and cash equivalents at end of year

$
165,400


$
1,407  F-57




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  NOTE 21.
    SUPPLEMENTAL
    DISCLOSURE OF OIL & GAS OPERATIONS 
    (Unaudited)  Extractive Activities  Oil and Gas
  Costs
    Incurred
    2010


2009Acquisition of proved properties

$
1,451,858


$
714,995Development costs

$



$
178,953Exploration costs

$



$
47,744   Results
    of Operations for Producing Activities
    2010


2009Revenues

$
204,906


$
206,026Production costs


(143,361
)


(284,149
)Exploration expenses






(47,744
)Depreciation, depletion, and valuation provisions


(61,865
)


(224,485
)(320
)


(350,352
)Income tax expenses






Results of operations from producing activities

$
(320
)

$
(350,352
)   Reserve
    Quantity Information
     F-58




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
      Oil


Gas(Bbls)


(Mcf)Proved developed and undeveloped reserves:Balance at December 31, 2008


4,940



155,090Revisions of previous estimates


(10,150
)


65,282Purchase of minerals in place


129,730



239,990Production


(1,610
)


(6,702
)Balance at December 31, 2009


122,910



453,660Revisions of previous estimates


5,565



(34,469
)Purchase of minerals in place


64,688



105,761Sales of minerals in place


(75,081
)


(340,306
)Production


(1,981
)


(10,285
)Balance at December 31, 2010


116,101



174,361Proved developed reserves:December 31, 2009


121,620



453,660December 31, 2010


116,101



174,361Proved undeveloped reserves:December 31, 2009


1,290



December 31, 2010






   Standardized
    Measure of Discounted Future Net Cash Flows and Changes Therein
    Relating to Proved Oil and Gas Reserves
    12-month first-day-of-the-month
 F-59




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  last-day-of-the-period
    2010


2009Future cash inflows

$
9,621,827


$
9,386,770Future production and development costs


(3,923,945
)


(4,233,130
)Future income taxes


(1,064,010
)


(1,122,580
)Future net cash flows


4,633,872



4,031,06010% annual discount for estimated timing of cash flows


(1,412,312
)


(1,297,540
)Standardized measure of discounted net cash flows

$
3,221,560


$
2,733,520     2010


2009Beginning of year

$
2,733,520


$
379,050Sales of oil and gas produced, net of operating costs


(61,545
)


78,123Net change in prices and production costs


1,859,690



(1,204,160
)Purchases and sales of minerals in place


(198,690
)


3,126,030Estimated future development costs


(132,990
)


118,870Revisions of previous estimates


(729,963
)


(445,173
)Accretion of discount


(261,193
)


373,240Net change in income taxes


12,731



307,540End of year

$
3,221,560


$
2,733,520  
   
  F-60




---



##### Table of Contents



103 N. Ave.
    F
 
 
 Crowley, Louisiana
    70526
 
 
 phone:
    (337) 783-5693
 
 
 fax:
    (337) 783-5115
 
 
 www.bplb.com
 
 
  Other Offices:
 
 
  Lafayette, LA
 
 
 (337) 988-4930
 
 
  Opelousas, LA
 
 
 (337) 942-5217
 
 
  New Iberia, LA
 
 
 (337) 364-4554
 
   
  Frank A. Stagno, CPA*
 
 
 Scott J. Broussard,
    CPA*
 
 
 L. Charles Abshire,
    CPA*
 
 
 P. John Blanchet, III,
    CPA*
 
 
 Martha B. Wyatt, CPA*
 
 
 Mary A. Castille,
    CPA*
 
 
 Joey L. Breaux, CPA*
 
 
 Craig J. Viator, CPA*
 
 
 Stacey E. Singleton,
    CPA*
 
 
 John L. Istre, CPA*
 
 
 Mary T. Miller, CPA*
 
 
 Elizabeth J. Moreau,
    CPA*
 
 
 Frank D. Bergeron,
    CPA*
 
 
 Lonnie J. Hebert,
    CPA*
 
   
  R e t i r e d :
 
 
  Sidney L. Broussard, CPA
    1925-2005
 
 
 Leon K. Poché, CPA
    1984
 
 
 James H. Breaux, CPA
    1987
 
 
 Erma R. Walton, CPA
    1988
 
 
 George A. Lewis, CPA
    1992
 
 
 Geraldine J. Wimberley, CPA
    1995
 
 
 Lawrence A. Cramer, CPA
    1999
 
 
 Ralph Friend, CPA
    2002
 
 
 Donald W. Kelley, CPA
    2005
 
 
 George J. Trappey, III,
    CPA 2007
 
 
 Terrel P. Dressel, CPA
    2007
 
 
 Herbert Lemoine II, CPA
    2008
 
 
  Members of American Institute
    of
 
 
 Certified Public
    Accountants
 
 
 Society of Louisiana
    Certified
 
 
 Public Accountants
 
 
  * A Professional Accounting
    Corporation
 
 
 
 INDEPENDENT
    AUDITORS REPORT   
 
  
 
  
 
   
 
   
 
   
 
  
   
 
  
 F-61




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
 
 
 BALANCE
    SHEETS
    August 31, 2010 and 2009  
 2010


2009ASSETSCURRENT ASSETSCash and cash equivalents

$
7,301


$
6,719Trade receivables, less allowance for doubtful accounts of
    $297,221 for 2010 and $87,738 for 2009


14,217,324



7,740,509Notes receivables  officer


222,976



233,919Other receivables


1,050



1,050Deferred tax asset


210,443



210,791Inventories


1,396,441



1,194,515Income tax receivable






257,618Prepaid expenses


2,937,251



2,932,503Total current assets

$
18,992,786


$
12,577,624DEPRECIABLE ASSETS, net of accumulated depreciation of
    $29,617,337 for 2010 and $26,948,420 for 2009

$
18,465,603


$
20,146,594Land


1,442,515



1,229,857$
19,908,118


$
21,376,451OTHER ASSETSAdvance to stockholder

$
288,005


$
288,005Other assets


139,757



116,960$
427,762


$
404,965Total assets

$
39,328,666


$
34,359,040LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESNotes payable, due in one year

$
9,705,265


$
12,458,192Accounts payable


7,561,836



4,908,099Income taxes payable






1,278,602Accrued expenses


1,116,691



746,004Total current liabilities

$
19,662,394


$
18,112,295LONG-TERM LIABILITIESNotes payable, less current maturities

$
2,139,280


$
1,550,048Deferred tax liability


2,486,593



2,646,284$
4,625,873


$
4,196,332Total liabilities

$
24,288,267


$
22,308,627STOCKHOLDERS EQUITYCommon stock, no par value, 1,000 shares
    authorized, issued, and outstanding

$
1,000


$
1,000Retained earnings


15,039,399



12,049,413Total stockholders equity

$
15,040,399


$
12,050,413Total liabilities and stockholders equity

$
39,328,666


$
34,359,040  
 
   
 F-62




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
 
 
 STATEMENTS
    OF INCOME
    Years Ended August 31, 2010 and 2009  
 2010


2009Net sales

$
67,127,416


$
58,916,231Cost of goods sold


4,914,246



3,778,624Gross profit

$
62,213,170


$
55,137,607Operating expenses:Selling

$
1,840,809


$
2,437,483General and administrative


55,342,582



54,287,389Total operating expenses

$
57,183,391


$
56,724,872Operating income (loss)

$
5,029,779


$
(1,587,265
)Other expense, net


(59,907
)


(350,427
)Income (loss) before income taxes

$
4,969,872


$
(1,937,692
)Income tax expense (benefit)


1,979,886



(495,496
)Net income (loss)

$
2,989,986


$
(1,442,196
)  
 
   
 F-63




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
 
 
 STATEMENTS
    OF RETAINED EARNINGS
    Years Ended August 31, 2010 and 2009  
 2010


2009Balance, beginning

$
12,049,413


$
13,491,609Net (loss) income


2,989,986



(1,442,196
)Balance, ending

$
15,039,399


$
12,049,413  
 
   
 F-64




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
 
 
 STATEMENTS
    OF CASH FLOW
    Years Ended August 31, 2010 and 2009  
 2010


2009CASH FLOWS FROM OPERATING ACTIVITIESNet (loss) income

$
2,989,986


$
(1,442,196
)Adjustments to reconcile net (loss) income to net cash provided
    by operating activities:Depreciation and amortization

$
3,422,699


$
3,572,802Provision for deferred income taxes


(159,343
)


(237,878
)Gain on disposal of property


(511,123
)


(259,402
)(Increase) decrease in Accounts receivable


(6,476,815
)


6,284,173Notes receivable  officers


10,943



34,026Income taxes payable


257,618



(257,618
)Prepaid expenses


2,295,334



1,817,140Inventory


(201,926
)


225,592Other assets


(22,797
)


(6,185
)Increase (decrease) in Accounts payable


2,653,737



(2,463,563
)Income taxes payable


1,278,602



(160,860
)Accrued expenses


370,687



(185,514
)Total adjustments

$
2,917,616


$
8,362,713Net cash provided by operating activities

$
5,907,602


$
6,920,517CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of property

$
998,676


$
474,798Capital expenditures


(1,771,579
)


(2,888,539
)Net cash used in investing activities

$
(772,903
)

$
(2,413,741
)CASH FLOWS FROM FINANCING ACTIVITIESNet advances from line of credit

$
(961,365
)

$
111,845Principal payments on long-term debt


(4,172,752
)


(4,622,139
)Net cash used in financing activities

$
(5,134,117
)

$
(4,510,294
)Net (decrease) increase in cash and cash equivalents

$
582


$
(3,518
)Cash and cash equivalents at beginning of year


6,719



10,237Cash and cash equivalents at end of year

$
7,301


$
6,719SUPPLEMENTAL CASH FLOW DISCLOSURESInterest paid

$
591,882


$
628,325Taxes paid

$
898,500


$
160,860SUPPLEMENTAL NON-CASH INVESTING AND FINANCINGFixed assets financed with new debt

$
670,340


$
785,645Increase in prepaid expenses due to financing of insurance
    premiums

$
2,300,082


$
2,002,650  
 
   
 F-65




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
  NOTES TO
    FINANCIAL STATEMENTS
 
 
  NOTE 1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES 
 
  Nature
    of operations:
 
 
   
 
  Revenue
    recognition:
 
 
   
 
  Cash
    and cash equivalents:
 
 
   
 
  Trade
    accounts receivable:
 
 
   
 
  Inventories:
 
 
  first-in, first-in,
 
 
  Property,
    plant and machinery:
 
 
   
 
  Use of
    estimates:
 
 
   
 F-66




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
 
 
  Income
    taxes:
 
 
  ASC 740-10/Statement
 
 
  Advertising:
 
 
   
 
  Cash
    on deposit and uninsured cash balances:
 
 
   
 
  Impairment
    of long-lived assets:
 
 
   
 
  NOTE 2.
    ADVANCE
    TO STOCKHOLDER 
 
   
 
  NOTE 3.
    DEPRECIABLE
    ASSETS 
 
   
  
 2010


2009Office building

$
1,048,280


$
1,048,280Plants, machinery and equipment


47,034,660



46,046,734$
48,082,940


$
47,095,014Less accumulated depreciation


(29,617,337
)


(26,948,420
)$
18,465,603


$
20,146,594  
 
   
 F-67




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
 
 
  NOTE 4.
    NOTES PAYABLE 
  
 2010


2009Revolving line of credit; maximum $6,500,000; interest is
    variable at 2.00% plus LIBOR; (2.026% at August 31, 2010
    and 2.026% at August 31, 2009); interest due monthly and
    principal reductions made daily from lockbox collections;
    collateralized by inventory, accounts receivable, contract
    rights, general tangibles, assignment of life insurance, and
    continuing guarantee from shareholder; matures annually on
    February 28

$
6,574,025


$
7,535,391Note payable, original amount $6,500,000; interest at variable
    at 2.00% plus Index (2.056% at August 31,2010 and 2.056% at
    August 31, 2009); interest due monthly and principal
    reductions made daily from lockbox collections; collateralized
    by inventory, accounts receivable, contract rights, general
    tangibles, assignment of life insurance, and continuing
    guarantee from shareholder; matured on March 11, 2009






1,424,951Note payable, due in aggregate monthly installments of $7,772
    including interest at 7.250%; original term 60 months;
    secured by vehicles and maturing dates from February 6,2012
    to May 7, 2012


143,454



222,969Note payable, due in monthly installments of principal $2,686;
    including interest at 7.320%; secured by buildings maturing on
    April 30, 2017


168,769



187,712Note payable, due in monthly installments of $5,439; including
    interest at 7.320%, secured by plant equipment, maturing on
    April 30, 2012


101,590



157,068Note payable, due in monthly installments of $1,743; interest at
    0.0%, securing equipment, matured on September 1, 2009






1,744Non-revolving line of credit; maximum $650,000; interest is
    variable and is currently at 2.51%; interest due monthly and
    matures on August 29, 2016


519,125



600,000Non-revolving line of credit; maximum $450,000; interest is
    variable and is currently at 2.51%; interest due monthly and
    matures on July 1, 2014


259,331



324,645Note payable, due in aggregate monthly installments of $3,360
    including interest at 4.21%; original term 60 months;
    secured by equipment and maturing on December 31, 2012


72,805



111,221Note payable, due in monthly installments of $1,230 including
    interest at 5.00%; secured by equipment and maturing on
    March 17, 2012


22,415



35,675Note payable, due in aggregate monthly installments of $6,991;
    interest at 0.00%; original term 60 months; secured by
    vehicles and maturing dates from August 15, 2007 to
    July 20, 2011


4,896



24,722Note payable, due in monthly installments of $4,679 including
    interest at 6.25%; original term 60 months; secured by
    equipment, maturing on July 13, 2011


49,604



100,832Note payable, due in monthly installments of $10,376 including
    interest at 4.21%; original term 84 months; secured by
    Clear Fluids Plant, maturing on March 29, 2015


489,865



603,142Note payable financing insurance premiums, due in monthly
    installments of $206,364 including interest at 3.972% beginning
    August 29,2010, secured by unexpired premiums


2,300,082



2,002,650Note payable, due in monthly installments of $4,900 including
    interest at 3.52%; original terms 60 months; secured by
    Kermit silos, maturing on May 31, 2015


250,815



 
 F-68




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  2010


2009Note payable, due in monthly installments of $1,340; interest at
    5.75%; original term 48 months; secured by equipment and
    maturing on November 13, 2013


47,566



Note payable, due in monthly installments of $2,875 with one
    irregular payment including interest at 5.50%; original term
    24 months; secured by real estate, maturing on
    July 25, 2012


348,730



Note payable, due in monthly installments of $11,612 including
    interest at 4.71%; original term 60 months; secured by
    Dayton, Texas facility, maturing on August 31, 2013


356,587



492,365Note payable, due in monthly installments of $4,874 including
    interest at 6.25%; original term 60 months; secured by 1979
    Cessna 421, maturing on February 20, 2013


134.886



183.153$
11,844,545


$
14,008,240Less current maturities


9,705,265



12,458,192Long-term portion

$
2,139,280


$
1,550,048  
 
   
  
 2011

$
9,705,2652012


1,058,4582013


474,4512014


296,1892015 and later


310,182$
11,844,545  
 
   
 
   
 
  NOTE 5.
    ACCOUNTS
    PAYABLE 
 
   
  
 2010


2009Accounts payable  trade

$
4,227,221


$
2,708,913Mud in storage


2,211,706



2,065,836Excess of outstanding checks over bank balance


996,247



34,554Other


126,662



98,796$
7,561,836


$
4,908,099  
 F-69




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
 
 
  NOTE 6.
    LEASE
    COMMITMENT AND RENTAL EXPENSE 
 
   
 
   
 
   
 
   
  
 2011

$
3,894,4552012


2,778,1392013


2,040,5742014


638,2542015


380,390Later years


1,009,021$
10,740,833  
 
  NOTE 7.
    INCOME
    TAXES 
 
   
 
   
  
 2010


2009Current tax expense (benefit)


$2,139,231



$(257,618
)Deferred tax expense (benefit)


(159,345
)


(237,878
)$ 1,979,886



$(495,496
)  
 
   
 
   
 
   
 
  NOTE 8.
    RELATED
    PARTY TRANSACTIONS 
 
   
 
  NOTE 9.
    EMPLOYEE
    RETIREMENT PLAN 
 
   
 F-70




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
 
 
   
 
  NOTE 10.
    CONCENTRATION
    OF CREDIT RISK 
 
   
 
  NOTE 11.
    CONTINGENCIES 
 
   
 
  NOTE 12.
    SUBSEQUENT
    EVENTS 
 
   
 F-71




---



##### Table of Contents



103 N. Ave.
    F
 
 
 Crowley, Louisiana
    70526
 
 
 phone:
    (337) 783-5693
 
 
 fax:
    (337) 783-5115
 
 
 www.bplb.com
 
 
  Other Offices:
 
 
  Lafayette, LA
 
 
 (337) 988-4930
 
 
  Opelousas, LA
 
 
 (337) 942-5217
 
 
  New Iberia, LA
 
 
 (337) 364-4554
 
   
  Frank A. Stagno, CPA*
 
 
 Scott J. Broussard,
    CPA*
 
 
 L. Charles Abshire,
    CPA*
 
 
 P. John Blanchet, III,
    CPA*
 
 
 Martha B. Wyatt, CPA*
 
 
 Mary A. Castille,
    CPA*
 
 
 Joey L. Breaux, CPA*
 
 
 Craig J. Viator, CPA*
 
 
 Stacey E. Singleton,
    CPA*
 
 
 John L. Istre, CPA*
 
 
 Mary T. Miller, CPA*
 
 
 Elizabeth J. Moreau,
    CPA*
 
 
 Frank D. Bergeron,
    CPA*
 
 
 Lonnie J. Hebert,
    CPA*
 
   
  R e t i r e d :
 
 
  Sidney L. Broussard, CPA
    1925-2005
 
 
 Leon K. Poché, CPA
    1984
 
 
 James H. Breaux, CPA
    1987
 
 
 Erma R. Walton, CPA
    1988
 
 
 George A. Lewis, CPA
    1992
 
 
 Geraldine J. Wimberley, CPA
    1995
 
 
 Lawrence A. Cramer, CPA
    1999
 
 
 Ralph Friend, CPA
    2002
 
 
 Donald W. Kelley, CPA
    2005
 
 
 George J. Trappey, III,
    CPA 2007
 
 
 Terrel P. Dressel, CPA
    2007
 
 
 Herbert Lemoine II, CPA
    2008
 
 
  Members of American Institute
    of
 
 
 Certified Public
    Accountants
 
 
 Society of Louisiana
    Certified
 
 
 Public Accountants
 
 
  * A Professional
    Accounting Corporation
 
 
 
  INDEPENDENT
    AUDITORS REPORT
    ON THE SUPPLEMENTARY INFORMATION
 
 
   
 
  
 
  
 
   
 
  
   
 
  
 F-72




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##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
 
 
  SCHEDULES
    OF SELLING EXPENSES
    Years Ended August 31, 2010 and 2009
 
  
 2010


2009Advertising

$
33,283


$
45,676Meals


238,352



356,084Promotional


31,474



107,826Travel expense


694,402



784,500Salaries


843,298



1,143,397$
1.840.809


$
2.437.483  
 F-73




---



##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
 
 
  SCHEDULES
    OF GENERAL AND ADMINISTRATIVE EXPENSES
    Years Ended August 31, 2010 and 2009
 
  
 2010


2009Accounting and legal

$
207,573


$
163,535Air service


48,546



44,534Bad debt expense


137,232



592,027Beepers and mobile phones


230,337



246,160Building and ground maintenance


227,503



267,700Compensation claims paid


74,448



99,997Contractor service


155,870



113,319Depreciation


3,422,699



3,572,802Diesel, gas and oil


8,472,025



7,301,544Disposal charges


39,357



102,018Donations


102,013



116,288Dues and subscriptions


20,427



34,235Employee physicals


91,919



74,910Employee relocation costs


26,453



3,228Extra labor


1,116,263



760,034Group insurance


1,638,730



1,670,948Wages-hourly
    employees


13,264,786



12,715,676Insurance


2,481,521



2,314,262Janitorial


23,073



40,788Laboratory supplies


8,093



8,146Lease expense


5,681,417



5,589,969Computer leases


66,978



128,986Licenses and taxes


970,678



750,434Office expense


220,726



255,962Payroll taxes


1,518,382



1,565,099Permits


63,513



76,681401(-k) plan expense


10,941



284,783Plant supplies


322,752



362,367Equipment rental


6,172,490



4,583,391Repairs and maintenance


2,638,098



2,525,186Safety and training


143,801



250,935Safety consulting


29,941



28,888Salaries other


4,686,262



6,003,791Salaries officers


370,500



951,450Telephone


142,556



163,569Utilities


403,776



423,143Uniforms


110,903



100,604$
55,342,582


$
54,287,389  
 F-74




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##### Table of Contents



FRANCIS
    DRILLING FLUIDS, LTD.
 
 
 SCHEDULES
    OF OTHER INCOME (EXPENSE)
    Years Ended August 31, 2010 and 2009  
 2010


2009Interest income

$
9,127


$
45,662Interest expense


(577,131
)


(628,385
)Gain on sale of fixed assets


511,123



259,402Other income


(3,026
)


(27,106
)$
(59,907
)

$
(350,427
)  
 
   
 F-75




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Unaudited
    Pro Forma Combined Financial Information
 
 
   
 
   
 
  Form 10-K and/or
 
 F-76




---



##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.Pro Forma Combined Statement of
    OperationsFor the Year Ended December 31, 2010
    (Unaudited)
 
  
 HistoricalNYTEX


FrancisEnergy


DrillingHoldings, Inc.


Fluids, Ltd.


Pro Forma


Pro Forma(a)


(b)


Adjustments


CombinedRevenues:Drilling fluids

$
1,059,008


$
12,199,438


$
(1,270,078
)(c)

$
11,988,368Oilfield services


6,031,455



60,511,233



(6,299,800
)(c)


60,242,888Oil and gas


204,906











204,906Other


576,981











576,981Total revenues


7,872,350



72,710,671



(7,569,878
)


73,013,143Operating expenses:Cost of goods sold  drilling fluids


437,230



4,723,758



(491,789
)(c)


4,669,199Oil & gas lease operating expenses


143,361











143,361Depreciation, depletion, and amortization


772,826



3,434,811



(3,434,811
)(d)


7,824,1437,051,317
(e)Selling, general and administrative expenses


10,919,713



58,096,780



(1,150,857
)(c)


62,968,061(4,897,575
)(f)Gain on sale of assets


(466,902
)


(438,481
)






(905,383
)Total operating expenses


11,806,228



65,816,868



(2,923,715
)


74,699,381Earnings (loss) from operations


(3,933,878
)


6,893,803



(4,646,163
)


(1,686,238
)Other income (expense):Interest income


1,230



9,143



(952
)(c)


9,421Interest expense


(832,164
)


(583,567
)


552,389
(g)


(4,582,212
)(3,331,311
)(h)(387,559
)(i)Change in fair value of derivative liabilities


(13,301,755
)










(13,301,755
)Accretion of preferred stock liability


(398,232
)






(3,292,929
)(j)


(3,691,161
)Equity in loss of unconsolidated subsidiaries


(317,158
)










(317,158
)Loss on sale of unconsolidated subsidiary


(870,750
)










(870,750
)Other


5,141



(2,110
)






3,031Total other income (expense)


(15,713,688
)


(576,534
)


(6,460,362
)


(22,750,585
)Earnings (loss) before income taxes


(19,647,566
)


6,317,269



(11,106,525
)


(24,436,823
)Income tax benefit (provision)


(3,299
)


(2,514,273
)


4,420,397
(k)


1,902,825Net income (loss)


(19,650,865
)


3,802,996



(6,686,128
)


(22,533,998
)Preferred stock dividends


(53,280
)






(426,420
)(l)


(479,700
)Net income (loss) attributable to common stockholders


(19,704,145
)


3,802,996



(7,112,548
)


(23,013,698
)Net income (loss) per share, basic and diluted

$
(0.98
)









$
(0.92
)Weighted average shares outstanding, basic and diluted


20,149,999











24,965,687  
 
   
 F-77




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##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes
    to Unaudited Pro Forma Combined Financial
    Statement
 
 
  Note 1.
    Description
    of Transaction and Basis of Pro Forma Presentation 
 
   
  
 Cash paid

$
41,299,891Fair value of common stock issued


10,057,651Promissory note


476,144Total fair value of consideration transferred

$
51,833,686  
 
   
 
  
    Acquisition, Inc. and Francis Group, as co-borrowers, entered
    into a revolving credit and term loan facility with a
    third-party lender providing for loans up to $24 million; 
 
  
    The Company and Acquisition Inc., entered into a Preferred Stock
    and Warrant Purchase Agreement with WayPoint Nytex, LLC
    (WayPoint), a third party, whereby, in exchange for
    $20 million from WayPoint, (i) Acquisition, Inc.
    issued to WayPoint 20,750 shares of Acquisition Inc.
    14% Senior Series A Redeemable Preferred Stock, and
    (ii) the Company issued to WayPoint one share of its
    Series B Preferred Stock, a warrant to purchase up to 35%
    of the then outstanding shares of the Companys common
    stock, and a warrant to purchase up to an additional number of
    shares of the Companys common stock such that, measured at
    the time of exercise, the number of shares of common stock
    issued provides WayPoint an aggregate 51% of NYTEX Energys
    outstanding common stock on a fully-diluted basis with such
    warrant becoming exercisable only if certain conditions of
    default are met as set forth in the Preferred Stock and Warrant
    Purchase Agreement; and 
 
  
    The Company concluded an interim closing of the private
    placement of its Series A Convertible Preferred Stock for
    gross proceeds of $5.3 million. 
 
  Note 2.
    Unaudited
    Pro Forma Combined Statement of Operations 
 
   
 
   
 
   
 
   
 
   
 
   
 F-78




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##### Table of Contents



NYTEX
    ENERGY HOLDINGS, INC.
  Notes to
    Unaudited Pro Forma Combined Financial
    Statement  (Continued)
 
 
   
 
   
  
 Pro FormaInterest ExpenseFor the periodfromFace


Interest


1/1/2010 toAmount


Rate


11/22/2010Term loan

$
12,000,000



4.01
%

$
435,346Revolving credit facility


7,500,988



3.01
%


204,201Senior Series A Redeemable Preferred Stock


20,750,000



14.00
%


2,630,639Promissory note to seller


750,000



9.00
%


61,125$
3,331,311  
 
   
 
   
 
   
 
   
 
   
 F-79




---



##### Table of Contents



PART II 
    INFORMATION NOT REQUIRED IN PROSPECTUS
 
  Item 13.
    Other
    Expenses of Issuance and Distribution 
  
 Securities and Exchange Commission Registration Fee

$
5,750Legal Fees and Expenses

$
125,000Accounting Fees and Expenses

$
20,000Total Expenses

$
150,750  
 
 
  Item 14.
    Indemnification
    of Directors and Officers           II-1




---



##### Table of Contents



Item 15.
    Recent
    Sales of Unregistered Securities 
   
  1.
    Francis
    Group Transaction 
   
    2.
    WayPoint
    Preferred Stock and Warrant Transaction    A.
    Company Rights and Obligations
     
   
   II-2




---



##### Table of Contents



B.
    Acquisition Inc.s Rights and
    Obligations
 
 
  (Stated Amount)
 
 
   
 
   
  3.
    Private
    Placement of Series A Preferred Stock  A.
    Private Placement
 
   
  one-to-one.
     II-3




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##### Table of Contents



4.
    Other
    Issuances 
 
   
 
   
 
 
 
   
 
   
 
   
  Item 16.
    Exhibits
    and Financial Statement Schedules    Item 17.
    Undertakings 
   
 
   
 
   
 II-4




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##### Table of Contents



Calculation of Registration Fee
 
 
   
 
   
 
   
 
   
 II-5




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##### Table of Contents



SIGNATURES
      By: /s/
    Michael K. Galvis   
   
 
 
 
  POWER OF
    ATTORNEY
 
 
   
  
 /s/  Michael
    K. GalvisMichael
    K. Galvis

President, Chief Executive Officer, and Director
    (Principal Executive Officer)

July 13, 2011/s/  Kenneth
    K. ConteKenneth
    K. Conte

Executive Vice President and Chief Financial Officer
    (Principal Financial and Accounting Officer)

July 13, 2011/s/  William
    G. BrehmerWilliam
    G. Brehmer

Director

July 13, 2011/s/  Jonathan
    RichJonathan
    Rich

Director

July 13, 2011  
 II-6




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##### Table of Contents



EXHIBIT INDEX
  
 Exhibit

Document2
.1

Membership Interests Purchase Agreement by and among NYTEX
    Energy Holdings, Inc. (the Company),
    Francis Drilling Fluids, Ltd., Francis Oaks, L.L.C. and the
    Members of Francis Oaks, L.L.C. dated November 23, 2010
    (filed as Exhibit 10.1 to the Companys
    Form 8-K
    filed November 30, 2010 and incorporated herein by
    reference)3
.1

Certificate of Incorporation of the Company, as amended (filed
    as Exhibit 3.1 to the Companys
    Form 10-12G/A
    filed August 12, 2010 and incorporated herein by reference)3
.2

Bylaws of the Company, as amended (filed as Exhibit 3.2 to
    the Companys
    Form 10-12G/A
    filed August 12, 2010 and incorporated herein by reference)4
.1

Form of stock certificate for shares of Common Stock of the
    Company filed herewith4
.2

Form of stock certificate for Series A Preferred Stock of
    the Company filed herewith4
.3

Form of stock certificate for Series B Preferred Stock of the
    Company filed herewith4
.4

Form of purchaser warrant (filed as Exhibit 10.7 to the
    Companys
    Form 8-K
    filed November 30, 2010 and incorporated herein by
    reference)4
.5

Form of control warrant (filed as Exhibit 10.7 to the
    Companys
    Form 8-K
    filed November 30, 2010 and incorporated herein by
    reference)4
.6

Form of Registration Rights Agreement between WayPoint Nytex,
    LLC and the Company dated November 23, 2010 (filed as
    Exhibit 10.8 to the Companys
    Form 8-K
    filed November 30, 2010 and incorporated herein by
    reference)4
.7

Form of warrant issued in connection with the issuance of
    Series A Preferred Stock dated November 23, 2010 filed
    herewith4
.8

Form of warrant issued in connection with the issuance of
    12% Convertible Debentures of the Company dated
    November 23, 2010 (filed as Exhibit 10.2 to the
    Companys
    Form 8-K
    filed November 10, 2010 and incorporated herein by
    reference)4
.9

Form of Registration Rights Agreement between the Company and
    the holders of Series A Preferred Stock dated
    November 23, 2010 filed herewith4
.10

Form of Registration Rights Agreement between the Company and
    the holders of the Debentures dated August 13, 2010 (filed
    as Exhibit 10.4 to the Companys
    Form 8-K
    filed November 10, 2010 and incorporated herein by
    reference)4
.11

Certificate of Designation in respect of Series A
    Convertible Preferred Stock of the Company dated
    November 19, 2010 filed herewith4
.12

Certificate of Designation in respect of Series B Preferred
    Stock of the Company (filed as Exhibit 10.10 to the
    Companys
    Form 8-K
    filed November 30, 2010 and incorporated herein by
    reference)4
.13

Amended and Restated Certificate of Designation in respect of
    Senior Series A Redeemable Preferred Stock of NYTEX FDF
    Acquisition Inc. (filed as Exhibit 10.9 to the
    Companys
    Form 8-K
    filed November 30, 2010 and incorporated herein by
    reference)5
.1

Legal Opinion of Strasburger & Price, LLP to be filed
    by amendment10
.1

Revolving Credit, Term Loan and Security Agreement among the
    Company, Francis Oaks, L.L.C., Francis Drilling Fluids, Ltd. and
    PNC Bank, National Association, dated November 23, 2010
    (filed as Exhibit 10.5 to the Companys
    Form 8-K
    filed November 30, 2010 and incorporated herein by
    reference)10
.2

Preferred Stock and Warrant Purchase Agreement among the
    Company, NYTEX FDF Acquisition, Inc. and WayPoint NYTEX, LLC,
    dated November 23, 2010 (filed as Exhibit 10.6 to the
    Companys
    Form 8-K
    filed November 30, 2010 and incorporated herein by
    reference)10
.3

Placement Agency Agreement between the Company and National
    Securities Corporation, dated October 8, 2010. (filed as
    Exhibit 10.3 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.4

Form of Securities Purchase Agreement between the Company and
    holders of 12% Convertible Debentures dated
    October 12, 2010 (filed as Exhibit 10.3 to the
    Companys
    Form 8-K
    filed November 10, 2010 and incorporated herein by
    reference)




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##### Table of Contents



Exhibit

Document10
.5

Form of 12% Convertible Debenture issued by the Company to
    holders thereof dated October 12, 2010 (filed as
    Exhibit 10.3 to the Companys
    Form 8-K
    filed November 10, 2010 and incorporated herein by
    reference)10
.6

Lease with Capital One Bank, N.A., Account Number 3109321057
    (filed as Exhibit 10.4 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.7

Lease with Capital One Bank, N.A., Account Number 3109321058
    (filed as Exhibit 10.5 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.8

Lease with Capital One Bank, N.A., Account Number 3109321059
    (filed as Exhibit 10.6 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.9

Lease with Capital One Bank, N.A., Account Number 3109321061
    (filed as Exhibit 10.7 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.10

Lease with Capital One Bank, N.A., Account Number 3109321063
    (filed as Exhibit 10.8 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.11

Lease with PACCAR Financial Services, LLC, Account Number
    900-651-600-00006063374
    (filed as Exhibit 10.9 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.12

Lease with PACCAR Financial Services, LLC, Account Number
    900-651-600-00006068985
    (filed as Exhibit 10.10 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.13

Lease with PACCAR Financial Services, LLC, Account Number
    900-681-600-00006070502
    (filed as Exhibit 10.11 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.14

Employment Agreement between the Company and Michael K. Galvis,
    dated April 28, 2009 (filed as Exhibit 10.1 to the
    Companys
    Form 10-12G/A
    filed August 12, 2010 and incorporated herein by reference)10
.15

Employment Agreement between Francis Drilling Fluids, Ltd. and
    Michael K. Galvis, dated November 23, 2010 (filed as
    Exhibit 10.13 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.16

Employment Agreement between the Company and Kenneth K. Conte,
    dated June 1, 2010 (filed as Exhibit 10.1 to the
    Companys
    Form 8-K
    filed on October 8, 2010 and incorporated herein by
    reference)10
.17

Employment Agreement between the Company and Georgianna Hanes,
    dated April 28, 2009 (filed as Exhibit 10.2 to the
    Companys
    Form 10-12G/A
    filed August 12, 2010 and incorporated herein by reference)10
.18

Employment Agreement between the Company and William G. Brehmer,
    dated April 28, 2009 (filed as Exhibit 10.3 to the
    Companys
    Form 10-12G/A
    filed August 12, 2010 and incorporated herein by reference)10
.19

Employment Agreement between Francis Drilling Fluids, Ltd. and
    Michael G. Francis, dated November 23, 2010 (filed as
    Exhibit 10.3 to the Companys
    Form 8-K
    filed November 30, 2010 and incorporated herein by
    reference)10
.20

Employment Agreement between Francis Drilling Fluids, Ltd. and
    Jude Gregory, dated November 23, 2010 (filed as
    Exhibit 10.18 to the Companys
    Form 10-K
    filed April 15, 2011 and incorporated herein by reference)10
.21

Indemnification Agreement between the Company and Thomas
    Drechsler, dated November 23, 2010 filed herewith10
.22

Indemnification Agreement between the Company and John Henry
    Moulton, dated November 23, 2010 filed herewith10
.23

Indemnification Agreement between the Company and Jonathan Rich,
    dated April 1, 2011 filed herewith10
.24

Indemnification Agreement between the Company and Michael K.
    Galvis, dated April 1, 2011 filed herewith10
.25

Indemnification Agreement between the Company and William
    Brehmer, dated April 1, 2011 filed herewith




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##### Table of Contents



Exhibit

Document10
.26

Indemnification Agreement between the Company and Michael G.
    Francis, dated April 14, 2011 filed herewith10
.27

Indemnification Agreement between the Company and Kenneth K.
    Conte, dated April 1, 2011 filed herewith10
.28

Form of Amendment to 12% Convertible Debenture issued by the
    Company to holders thereof dated February 8, 2011 filed
    herewith21
.1

List of Subsidiaries of Company (filed as Exhibit 21 to the
    Companys Form 10-K for the period ended December 31,
    2010 filed on April 15, 2011 and incorporated herein by
    reference)23
.1

Consent of Whitley Penn LLP filed herewith23
.2

Consent of Strasburger & Price, LLP (included in
    Exhibit 5.1)23
.3

Consent of Broussard, Poche, Lewis & Breaux, L.L.P. filed
    herewith24
.1

Power of Attorney (included in Signature Page of original
    Form S-1)*99


Report of LaRoche Petroleum Consultants, Ltd. dated
    March 3, 2011 (filed as Exhibit 99 to the
    Companys
    Form 10-K
    for period ended December 31, 2010 filed on April 15,
    2011 and incorporated herein by reference)  
 
 
   
  *
    
    Previously filed with original
    Form S-1
    dated April 15, 2011.