SAEXPLORATION HOLDIN

SAEX
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SAEXPLORATION HOLDINGS, INC. : Entry into a Material Definitive Agreement, Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing, Other Events, Financial Statements and Exhibits (form 8-K)

06/17/2020 | 08:52am

Item 1.01 Entry into a Material Definitive Agreement



On June 16, 2020, SAExploration Holdings, Inc. (the "Company") and certain of
its subsidiaries entered into a Fourth Supplemental Indenture (the "Supplemental
Indenture") with Wilmington Savings Fund Society, FSB, as trustee, in order to
make certain amendments to the senior secured convertible notes indenture (the
"2023 Notes Indenture") governing the Company's 6.00% Senior Secured Convertible
Notes due 2023 (the "2023 Notes").



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 New
York Stock Exchange
, The NASDAQ Global Select Market, The NASDAQ Global Market,
The NASDAQ Capital Market, the OTCQX Market or the OTCQB Market (or any of their
respective successors) shall not be deemed to have occurred as a result of such
delisting until the earlier of (i) August 31, 2020 or (ii) the termination date
of the forbearance period set forth in the existing forbearance agreement
regarding certain events of default under the 2023 Notes Indenture (the
"Fundamental Change Effective Date").



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 June 15, 2020, the Company received written notice from the Nasdaq Hearings
Panel
(the "Panel") that the Panel had determined to suspend trading in the
Company's common stock at the opening of business on June 17, 2020. The Panel
denied the Company's request for an exception to Listing Rule 5550(b)(1), which
requires a company to demonstrate at least $2.5 million of stockholders' equity
for continued listing on the NASDAQ Capital Market while it implements a plan of
compliance. The NASDAQ Stock Market will complete the delisting of the Company's
common stock from the NASDAQ Capital Market by filing a Form 25-NSE with the
Securities and Exchange Commission (the "SEC").



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 SEC.



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 $5.00 per share, trading in the Company's common
stock will also become subject to the requirements of certain rules promulgated
under the Securities Exchange Act of 1934, which require additional disclosure
by broker-dealers in connection with any trade involving a stock defined as a
"penny stock" (generally, any equity security not listed on a national
securities exchange or quoted on NASDAQ that has a market price of less than
$5.00 per share, subject to certain exceptions). Brokerage firms may be
reluctant to recommend low-priced stocks to their clients. Moreover, various
regulations and policies restrict the ability of stockholders to borrow against
or "margin" low-priced stocks, and declines in the stock price below certain
levels may trigger unexpected margin calls. Additionally, because brokers'
commissions on low-priced stocks generally represent a higher percentage of the
stock price than commissions on higher priced stocks, the current price of the
common stock can




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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 June 11, 2020, the Company was notified that the second year of a three-year
contract for onshore data acquisition services to be performed on the North
Slope
of Alaska was cancelled by the operator due to the COVID-19 coronavirus
pandemic and its impact on the worldwide economy and global demand for oil. The
Company anticipates being paid a fee due to the cancellation. The Company's work
under the second year of the contract was anticipated to be performed primarily
during the first quarter of 2021.



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," "will," "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 8-K, may or may not
be realized, and differences between estimated results and those actually
realized may be material.



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 of March 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;


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• the outcome of the investigations by the SEC, 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
allowing Alaska to sell bonds to purchase tax credit certificates and Alaska
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 the SEC, 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 the
Securities 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 U.S. federal securities
laws and the Company's determination that any such revised disclosure is
necessary or advisable to do.



Item 9.01. Financial Statements and Exhibits.






(d) Exhibits




4.1 Fourth Supplemental Indenture, dated as of June 16, 2020, among
SAExploration Holdings, Inc., the guarantors party thereto and Wilmington
Savings Fund Society
, FSB, as trustee














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