Item 1.01 Entry into a Material Definitive Agreement
On
Pursuant to the Supplemental Indenture, the 2023 Notes Indenture was amended at
the direction and with the consent of all of the holders of the 2023 Notes to,
among other things, provide that a fundamental change resulting from the
delisting of the Company's common stock from any of the NYSE American,
The foregoing description of the Supplemental Indenture is a summary only and is qualified in its entirety by reference to the complete text of the Supplemental Indenture, attached as Exhibit 4.1 hereto.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On
Following the suspension of trading in the Company's common stock on the NASDAQ
Capital Market, trading of the Company's common stock will be conducted in the
over-the-counter market on an electronic bulletin board established for unlisted
securities such as the OTC Bulletin Board or OTC Markets Pink Open Market. The
Company does not expect such transition to the over-the-counter market to have
an immediate effect on the Company's business operations. Following such
transition to the over-the-counter market, the Company expects to remain a
reporting company under the Securities Exchange Act of 1934 and generally to
continue to file periodic and other reports with the
Once the Company's common stock ceases to be listed or quoted on the NASDAQ Capital Market for a period of five consecutive trading days (which period has been extended as a result of the Supplemental Indenture as described above), such event will constitute a "fundamental change" under the terms of the 2023 Notes Indenture on the Fundamental Change Effective Date. In such event, the Company will be required to provide notice (the "Notice") to the holders of the 2023 Notes of such fundamental change on or before the 20th calendar day after the Fundamental Change Effective Date and could be required, at the option of such holders, to repurchase for cash all of their 2023 Notes on the date specified by the Company that is not less than 20 calendar days or more than 35 calendar days following the date of the Notice at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the repurchase date. If the Company is unable to obtain a waiver of this fundamental change from the holders of the 2023 Notes prior to the Fundamental Change Effective Date and if the Company is required by such holders to repurchase some or all of the 2023 Notes for cash, the Company does not expect that it would have sufficient funds to make such repurchase and therefore may need to seek bankruptcy protection, which would have a material adverse effect on the Company's business, financial condition and results of operations.
Following the delisting of the Company's common stock from NASDAQ, if the
trading price remains below
1
--------------------------------------------------------------------------------
result in an individual stockholder paying transaction costs that represent a higher percentage of total share value than would be the case if the Company's share price were higher. This factor may also limit the willingness of institutions to purchase the Company's common stock. Finally, the additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers from facilitating trades in the Company's common stock, which could severely limit the market liquidity of the stock and the ability of investors to trade the Company's common stock. As a result, the ability of the Company's stockholders to resell their shares of common stock, and the price at which they could sell their shares, could be adversely affected. The delisting of the Company's stock from NASDAQ will also make it more difficult for the Company to raise additional capital.
Item 8.01 Other Events.
On
Forward-Looking Statements
Except for statements of historical fact, the matters discussed herein are
"forward-looking statements" within the meaning of the applicable
Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, risks relating to known and unknown uncertainties, including:
• the Company's ability to identify, evaluate and complete any strategic alternative with respect to its capital structure; • the impact of the announcement of the Company's review of strategic alternatives on the Company's business, including its financial and operating results, or its employees, suppliers and customers; • substantial doubt about the Company's ability to continue as a going concern as ofMarch 31, 2020 ; • the impact of the outbreak of the COVID-19 coronavirus on the Company's business, financial condition and results of operations; • fluctuations in the levels of exploration and development activity in the oil and natural gas industry; • delays, reductions or cancellations of project awards and the Company's ability to realize revenue projected in the Company's backlog; • continuing events of default outstanding under the Company's debt instruments, including the risk that the holders of the debt take action to accelerate the maturity date of the applicable debt and exercise their other respective rights and remedies, such as foreclosure, among other things; • risks arising from the holders of the Company's debt taking other actions against the Company, including by seeking a bankruptcy filing; • the potential need for the Company to seek bankruptcy protection; • the impact of the restatement of the Company's previously issued consolidated financial statements; • the identified material weaknesses in the Company's internal control over financial reporting and the Company's ability to remediate those material weaknesses; 2
--------------------------------------------------------------------------------
• the outcome of the investigations by theSEC , the DOJ and the DOR with respect to the circumstances giving rise to the restatement of the Company's previously issued consolidated financial statements, which could include sanctions or other actions against the Company and its officers and directors, civil lawsuits, and penalties; • the outcome of the Company's internal investigation of the circumstances giving rise to the restatement of the Company's previously issued consolidated financial statements; • developments with respect to the Alaskan oil and natural gas tax credit system that continue to affect the Company's ability to timely monetize tax credits, including litigation over the constitutionality of the legislation allowingAlaska to sell bonds to purchase tax credit certificates andAlaska budget constraints driven primarily by oil prices; • the availability of liquidity and capital resources, including the Company's need to obtain additional working capital for upfront expenditures for upcoming projects, and the potential impact this has the Company's business and competitiveness; • risks related to the Company's delisting from the NASDAQ Capital Market; • costs and outcomes of pending and future litigation; • the time and expense required for the Company to respond to theSEC , DOJ and DOR investigations and for the Company to complete its internal investigation, which expenses have been and are likely to continue to be material and are likely to have a material adverse impact on the Company's cash balance, cash flow and liquidity; and • other risks described more fully in the Company's filings with theSecurities and Exchange Commission that relate to matters not covered in this Current Report on Form 8-K.
Each of these risks, and the known and unknown consequences of these risks,
could have a material negative impact on the Company, its business and
prospects. As of the date of this Current Report on Form 8-K, the Company cannot
make any assurances regarding the impact or outcome of these risks.
Forward-looking statements reflect the views of the Company as of the date
hereof. The Company does not undertake to revise these statements to reflect
subsequent developments, other than in compliance with
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits 4.1 Fourth Supplemental Indenture, dated as ofJune 16, 2020 , amongSAExploration Holdings, Inc. , the guarantors party thereto andWilmington Savings Fund Society , FSB, as trustee 3
--------------------------------------------------------------------------------
© Edgar Online, source