Nasdaq Notice of
Non-Compliance
In connection with the Companys delayed Form
10-Q
filing, the Company expects to receive a formal notification
from the Listing Qualifications Department of the Nasdaq Capital Market stating that the Company is not in compliance with the requirements for continued listing under Nasdaq Listing Rule 5250(c)(1) because it did not timely file its Form
10-Q
for the quarterly period ended June 30, 2019. The Company expects to submit a plan to regain compliance with the exchanges listing rules as soon as practicable.
Discussions with Debt Holders
In connection with
the restatement, the Company is in discussions with holders of a majority of its outstanding debt, as to whether or not there are defaults under the debt agreements, with the goal of agreeing to a path forward in a way that is constructive for the
Company, its shareholders and employees and the debt holders. The agreements are the indenture under which the Company issued its 10.00% Senior Secured Second Lien Notes due 2019, as amended (of which there was approximately $7 million
outstanding as of March 31, 2019), the indenture under which the Company issued its 6.00% Senior Secured Convertible Notes due 2023 (of which there was approximately $60 million outstanding as of March 31, 2019), the Term Loan and
Security Agreement dated as of June 29, 2016 among the Company, as Borrower, the Guarantors Named Therein, as Guarantors, the Lenders From Time to Time Party Thereto and Delaware Trust Company, as Collateral Agent and Administrative Agent, as
amended (of which there were approximately $29 million in loans outstanding as of March 31, 2019) and the Third Amended and Restated Credit and Security Agreement dated as of September 26, 2018 among SAExploration, Inc., a subsidiary
of the Company, as Borrower, the Guarantors Named Therein, as Guarantors, the Lenders From Time to Time Party Thereto and Cantor Fitzgerald Securities, as Agent (of which there were approximately $22 million in loans outstanding as of
March 31, 2019). The Company cannot provide any assurance that the Company will be successful in coming to any agreement with its debt holders regarding these matters, quickly or at all or on what terms.
Press Release
On August 15, 2019, the
Company issued a press release with respect to the foregoing disclosures. A copy of the press release is attached hereto as Exhibit 99.1, and is incorporated herein by reference.
Forward-looking Statements
Except for statements of
historical fact, the matters discussed herein are forward-looking statements within the meaning of the applicable U.S. federal securities laws. The words may, possible, estimates, expects,
believes and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements, including statements regarding the possible
impact of the matters summarized in this Form, may or may not be realized, and differences between estimated results and those actually realized may be material.
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