As discussed in Note 2 to the consolidated financial statements, in the first quarter of 2018, the Company changed its method of accounting for revenue due to the adoption of Accounting Standards Codification Topic 606,
Revenue from Contracts with Customers
. Also as discussed in Note 2 to the consolidated financial statements, in the first quarter of 2018, the Company changed its method of accounting for income taxes due to the adoption of Accounting Standards Update 2016-16,
Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory
.
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
Notes to Consolidated Financial Statements
NOTE 1. ORGANIZATION AND NATURE OF BUSINESS
SAExploration Holdings, Inc. (“we,” “our” or “us) is a full–service provider of seismic data acquisition, logistical support, processing and integrated reservoir geosciences services in North America, South America, Asia Pacific and West Africa to customers in the oil and natural gas industry.
Our chief operating decision maker, our Chief Executive Officer, regularly reviews financial data by country to assess performance and allocate resources, resulting in the conclusion that each country in which we operate represents a reporting unit. As these reporting units are similar in terms of economic characteristics, nature of products, processes and type of customers, we have concluded that our seismic data contract services operations comprise one single reportable segment.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Our consolidated financial statements include our accounts and those of our subsidiaries which are wholly–owned or controlled by us. All significant intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Consolidated Financial Statements, except for Note 13 and Note 19, all dollar and share amounts in tabulations are in thousands of dollars and shares, respectively, unless otherwise indicated.
On September 14, 2018, we effected a one–for–twenty reverse stock split of our common stock. As of the effective time of the reverse stock split, every 20 shares of issued and outstanding common stock were converted into one share of common stock, without any change in par value. Any fractional shares were cashed out based on the closing price per share on the effective date of the reverse stock split. All references to shares of common stock, all per share data and all equity compensation activity for all periods presented in the consolidated financial statements and notes to the consolidated financial statements have been adjusted to reflect the reverse stock split on a retrospective basis.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. While we believe that the estimates and assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.
Cash and Cash Equivalents
We consider all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. All our cash and cash equivalents are maintained with several major financial institutions. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits; however, we have not experienced any losses in such accounts and we believe we are not exposed to any significant default risk.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are recorded at the invoiced amount and do not bear interest. We monitor our customers’ payment history and current credit worthiness to determine that collectability is reasonably assured. We also consider the overall business climate in which our customers operate. We utilize the specific identification method for establishing and maintaining the allowance for doubtful accounts. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
39
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Property and Equipment
Property and equipment is capitalized at historical cost or the fair value of assets acquired (see Note 3) and is depreciated using the straight–line method based on estimated economic lives. We expense costs for maintenance and repairs in the period incurred. Significant improvements and betterments are capitalized if they extend the useful life of the asset.
Impairment of Long–Lived Assets
We assess our long–lived assets, such and property and equipment and intangible assets, for possible impairment whenever events or circumstances indicate that the recorded carrying value of the long–lived asset may not be recoverable. If the carrying amount of the long–lived asset exceeds the sum of the estimated undiscounted future net cash flows, we recognize an impairment loss equal to the difference between the carrying value and the fair value of the long–lived asset, which is estimated through various valuation techniques including discounted cash flow models, quoted market prices and third–party appraisals.
We assess our goodwill, all of which resides in our Canadian operations reporting unit (the “Reporting Unit”), at least annually for impairment, or more frequently if facts and circumstances indicate that it is more likely than not impairment has occurred.
We have the option of first performing a qualitative assessment to determine if impairment may have occurred. If the qualitative assessment indicates that it is more likely than not that the fair value of the Reporting Unit is less than its carrying amount, then we would be required to perform the two–step impairment test.
Under the first step in the impairment test, we compare the fair value of the Reporting Unit with its carrying amount, including goodwill. If the carrying amount of the Reporting Unit exceeds its fair value, the second step of the goodwill impairment test is performed. Under the second step in the impairment test, the implied fair value of goodwill is compared with its carrying amount. The implied fair value of goodwill is calculated by subtracting the estimated fair values of the Reporting Unit’s assets net of liabilities from the fair value of the Reporting Unit. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss shall be recognized in an amount equal to that excess.
We determine the fair value of the Reporting Unit using a combination of the market approach and the income approach. Under the market approach, the fair value of the Reporting Unit is based on the Guideline Public Company (“GPC”) methodology using GPCs that are considered to be similar to us and whose stock are actively traded. Under the income approach, the fair value of the Reporting Unit is based on the expected present value of the future net cash flows.
Revenue Recognition
Our services are provided under cancelable service contracts that typically have an original expected duration of one year or less. These contracts are either fixed price agreements that provide for a fixed fee per unit of measure (“Turnkey”) or variable price agreements that provide for a fixed hourly, daily or monthly fee during the term of the project (“Term”). Under both types of agreements, we recognize revenue as the services are performed. We recognize revenue based upon quantifiable measures of progress, such as square or linear kilometers surveyed, each unit of data recorded or other methods using the total estimated revenue for the service contract.
We receive reimbursements for certain out–of–pocket expenses under the terms of the service contracts. The amounts billed to clients are included at their gross amount in the total estimated revenue for the service contract.
Clients are billed as permitted by the service contract. Contract assets and contract liabilities are the result of timing differences between revenue recognition, billing and cash collections. If billing occurs prior to the revenue recognition or if billing exceeds the revenue recognized, the amount is considered deferred revenue and a contract liability. Conversely, if the revenue recognition exceeds the billing, the exceeded amount is considered unbilled receivable and a contract asset. As services are performed, those deferred revenue amounts are recognized as revenue.
In some instances, third party permitting, surveying, drilling, helicopter, equipment rental and mobilization costs that directly relate to the contract are utilized to fulfill the contract obligations. These fulfillment costs are capitalized and a
mortized consistent with how the related revenue is recognized unless we determine the costs are no longer recoverable, at which time they are expensed.
40
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Estimates for our total revenue and total fulfillment cost on any service contract are based on significant qua
litative and quantitative judgments. Our management considers a variety of factors such as whether various components of the performance obligation will be performed internally or externally, cost of third party services, and facts and circumstances uniqu
e to the performance obligation in making these estimates.
As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update the estimates during each reporting period. We recognize these adju
stments in revenues under the cumulative catch–up method which recognizes the impact of the adjustment on revenue to date in the period the adjustment is identified. Revenue in future periods of performance is recognized using the adjusted estimate.
Foreign Exchange Gains and Losses
Assets and liabilities of non–U.S. operations with a functional currency other than the U.S. dollar have been translated at exchange rates in effect at the balance sheet dates, and revenues, expenses and cash flows have been translated at average exchange rates for the respective periods. Any resulting translation gains and losses are included in accumulated other comprehensive income (loss).
Gains and losses from foreign currency transactions, such as those resulting from transactions demoniated in a currency other than the functional currency of the entity involved and those resulting from remeasurements of monetary items, are included in our consolidated statements of operations.
Income Taxes
We use the liability method to determine our income tax provisions, under which current and deferred tax liabilities and assets are recorded in accordance with enacted tax laws and rates. Under this method, the amounts of deferred tax liabilities and assets at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered. Valuation allowances are established to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Concentration of Credit Risk
Our revenues are derived from a concentrated customer base; however, we are not substantially dependent on any one customer. Based on the nature of our contracts and customer projects, our significant customers can and typically do change from year to year and the largest customers in any one year may not be indicative of the largest customers in the future.
In 2018 and 2017, we had four customers and three customers, respectively, that individually exceeded 10% of our consolidated revenue from services and represented approximately 55% and 75%, respectively, of our consolidated revenue from services.
Recently Adopted Accounting Pronouncements
On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014–09,
Revenue from Contracts with Customers
, and the related amendments
.
This ASU amended the existing accounting standards for revenue recognition and requires companies to recognize revenue when control of the promised goods or services is transferred to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services.
We elected to adopt ASU 2014–09 using the modified retrospective approach applied to those contracts that were not completed as of January 1, 2018. Prior period amounts have not been adjusted and continue to be reflected in accordance with our historical accounting. The adoption did not have a material impact on either our consolidated balance sheet or consolidated statement of operations as of and for the year ended December 31, 2018.
On January 1, 2018, we adopted ASU 2016–16.
Intra–Entity Transfers of Assets Other Than Inventory
. ASU 2016–16 eliminated the deferral of tax effects of intra–entity asset transfers, other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes are recognized when the sale occurs even though the pre–tax effects of the transaction have not been recognized. We elected to adopt ASU 2016–16 using the modified retrospective approach and recorded a $0.3 million cumulative effect adjustment to beginning accumulated deficit.
41
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
On January 1, 2018, we adopted ASU 2017–01,
Clarifying the Definition of a Business
.
ASU 2017–01 clarified the defini
tion of a business by adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU provides a screen to determine when a set is not a business. If the scre
en is not met, ASU 2017–01 (i) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (ii) removes the evaluation of whether
a market participant could replace missing elements.
New Accounting Standards to be Adopted
In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016–02,
Leasing
. The new standard is intended to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities for virtually all leases and by requiring the disclosure of key information about leasing arrangements. In July 2018, the FASB issued two amendments to ASU 2016–02. ASU 2018–10,
Codification Improvements to Topic 842,
amends narrow aspects of the guidance in ASU 2016–02, and ASU 2018–11,
Targeted Improvements,
provides a new optional transition method under which comparative periods presented in financial statements in the period of adoption would not be restated. All these standards are effective for annual and interim periods beginning after December 15, 2018 and are to be applied using a modified retrospective approach. We adopted the new standards effective January 1, 2019 using the optional transition method under ASU 2018–11.
The new standards provide for certain practical expedients when adopting the new guidance. We have elected the practical expedient package outlined in ASU No. 2016–02 under which we can carryforward our previous classification of a lease as either an operating or capital lease, and we do not have to reassess previously recorded initial direct costs. Additionally, we made policy elections allowing us to exclude leases with original terms of 12 months or less from lease assets and liabilities and to not separate nonlease components from the associated lease component and instead account for both as a single lease component for all asset classes. We did not elect the practical expedient allowing us to use hindsight to determine the lease term and to assess any impairment of lease assets during the lookback period.
We currently expect the adoption of the new standards to result in the recognition of right–of–use assets between a range of approximately $7.5 million to $9.5 million and the corresponding lease liabilities between a range of approximately $7.5 million to $9.5 million. We do not expect the adoption of the new standards to have a material impact on our results of operations or cash flows.
In January 2017, the FASB issued ASU 2017–04,
Simplifying the Test for Goodwill Impairment
. ASU 2017–04 simplifies how an entity is required to test goodwill for impairment by eliminating step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. ASU 2017–04 is to be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. We will apply ASU 2017–04 to our goodwill impairment tests after the adoption date and we do not expect the adoption of ASU 2017–04 to have a material impact on our consolidated financial statements.
No other new accounting pronouncements issued or effective during the year ended December 31, 2018 have had or are expected to have a material impact on our consolidated financial statements.
NOTE 3. ASSET PURCHASE
In June 2018, we entered into a stalking horse asset purchase agreement (the “Asset Purchase Agreement”) with Geokinetics, Inc. (“GEOK”), pursuant to which we agreed to purchase substantially all of the assets of GEOK (the “Purchased Assets”) and acquire certain liabilities related thereto in a transaction to be effected in GEOK’s bankruptcy proceeding under Chapter 11 of Title 11 of the United States Bankruptcy Code.
In July 2018, the United States Bankruptcy Court for the Southern District of Texas approved the Asset Purchase Agreement, and we completed the acquisition of the Purchased Assets for $18.4 million. In connection with the closing, we entered into a new acquisition purchase money facility (the “PMF”) of approximately $23.4 million in aggregate principal amount of borrowings, secured by the Purchased Assets, to fund the acquisition and pay related transaction costs. Borrowings made under the PMF bore interest at a rate of 10.25% per annum. The PMF was repaid in full in September 2018.
42
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
The acquisition was accounted for as an asset acquisition, which requires that the total purchase price, including transaction costs, be allocated to the assets acquired
and the liabilities assumed based on their relative fair values.
The purchase price and the fair values of the acquired assets and assumed liabilities are as follows:
Purchase price
|
|
$
|
18,411
|
|
Transaction advisory fees and other acquisition costs
|
|
|
3,338
|
|
Total purchase price
|
|
$
|
21,749
|
|
|
|
|
|
|
Accounts receivable
|
|
$
|
8,589
|
|
Property and equipment
|
|
|
12,484
|
|
Intangible assets, net
|
|
|
3,642
|
|
Accrued liabilities
|
|
|
(110
|
)
|
Deferred revenue
|
|
|
(2,856
|
)
|
Net assets acquired
|
|
$
|
21,749
|
|
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment is comprised of the following at December 31:
|
|
Estimated
Useful Life
|
|
2018
|
|
|
2017
|
|
Field operating equipment
|
|
3 – 10 years
|
|
$
|
89,962
|
|
|
$
|
82,295
|
|
Transportation equipment
|
|
3 – 5 years
|
|
|
18,353
|
|
|
|
15,914
|
|
Leasehold improvements
|
|
2 – 5 years
|
|
|
461
|
|
|
|
328
|
|
Software
|
|
3 – 5 years
|
|
|
1,976
|
|
|
|
2,065
|
|
Computer equipment
|
|
3 – 5 years
|
|
|
5,584
|
|
|
|
4,055
|
|
Office equipment
|
|
3 – 10 years
|
|
|
902
|
|
|
|
938
|
|
|
|
|
|
|
117,238
|
|
|
|
105,595
|
|
Accumulated depreciation and amortization
|
|
|
|
|
(81,904
|
)
|
|
|
(72,649
|
)
|
Property and equipment, net
|
|
|
|
$
|
35,334
|
|
|
$
|
32,946
|
|
Depreciation expense relating to property and equipment was $11.4 million and $12.0 million in 2018 and 2017, respectively. Additional depreciation expense not related to cost of services was $0.3 million in both 2018 and 2017 and is included in “Selling, general and administrative expenses” in our consolidated statements of operations.
NOTE 5. GOODWILL AND INTANGIBLE ASSETS
Goodwill
Changes in the carrying value of goodwill were as follows for the years ended December 31:
|
|
2018
|
|
|
2017
|
|
Balance at beginning of year
|
|
$
|
1,832
|
|
|
$
|
1,711
|
|
Foreign currency translation adjustment
|
|
|
(145
|
)
|
|
|
121
|
|
Balance at end of year
|
|
$
|
1,687
|
|
|
$
|
1,832
|
|
As of December 31, 2018, we have not recorded any impairments related to our goodwill and we believe that our goodwill is recoverable; however, there can be no assurance that the goodwill will not be impaired in the future.
43
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Intangible Assets
Intangible assets are comprised of the following at December 31:
|
|
2018
|
|
|
2017
|
|
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
Customer relationships
|
|
$
|
1,356
|
|
|
$
|
(831
|
)
|
|
$
|
525
|
|
|
$
|
1,403
|
|
|
$
|
(732
|
)
|
|
$
|
671
|
|
Technology
|
|
|
3,642
|
|
|
|
(101
|
)
|
|
|
3,541
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
$
|
4,998
|
|
|
$
|
(932
|
)
|
|
$
|
4,066
|
|
|
$
|
1,403
|
|
|
$
|
(732
|
)
|
|
$
|
671
|
|
Intangible assets are amortized on a straight–line basis with estimated useful lives ranging from 13 to 15 years.
Amortization expense was $0.2 million and $0.1 million in 2018 and 2017, respectively.
Amortization expense is expected to be $0.3 million for each of the five years in the period ended December 31, 2023 and $2.6 million thereafter.
NOTE 6. LONG–TERM ACCOUNTS RECEIVABLE, NET
As of December 31, 2018, we have a $52.8 million accounts receivable, net of allowance for doubtful accounts of $19.0 million, from one customer. This is our single largest accounts receivable, constitutes the majority of our outstanding accounts receivable and is the largest single asset on our consolidated balance sheet as of December 31, 2018. We have classified this receivable as long–term because of the length of time we expect it will take for us to collect on it.
In 2018, our customer was successful in licensing and selling the seismic data and we received $3.6 million; however, at this time, we believe that it is unlikely that the customer will be able to fully satisfy the receivable directly. Our customer had historically relied on the monetization of exploration tax credits under an Alaska tax credit program (the “Tax Credits”), which monetization was accomplished by receipt of payments from Alaska or from third party financing sources. However, falling oil and natural gas prices have substantially reduced Alaska’s revenue from production taxes resulting in Alaska paying only statutorily established minimum amount of appropriations for Tax Credit certificates in the last several fiscal years rather than the amount to pay all the prior year’s Tax Credit certificates. In an effort to satisfy the accounts receivable, our customer originally assigned to us $89.0 million of Tax Credit certificates and applications. As of December 31, 2018, we have monetized approximately $17.6 million of Tax Credit certificates and have an estimated $62.3 million of Tax Credit certificates and applications remaining for future monetization, net of actual and estimated audit adjustments related to issued and anticipated Tax Credit certificates.
In February 2018, we were advised by Alaska that, so long as only the statutorily established minimum amount is paid each year, we will not receive any payments until fiscal year 2021 and should not expect to be paid in full until fiscal year 2024. In June 2018, Alaska passed legislation allowing Alaska to issue bonds to pay its estimated $1.0 billion liability for Tax Credit certificates. If issued, Alaska will use the proceeds from the bonds to purchase Tax Credit certificates. Seismic companies will have two options from which to pick on a program–by–program basis. One option allows for the purchase of the Tax Credit certificates at a 10% discount rate from the time the State would otherwise pay under the statutory minimum. The second option allows for the purchase of the Tax Credit certificates at Alaska’s cost of capital (estimated to be approximately 5.1%) but only if the seismic data is made publicly available.
In June 2018, based on assumptions made regarding the constitutionality of the bond issuance, the length of time until the bonds could be issued, the data that we want to remain confidential, and the likelihood of a discount on our pending Tax Credit application, we recorded a $19.0 million provision for doubtful accounts related to this receivable as the proceeds we expect to receive from the bond issuance and any other potential future monetizations will not be sufficient to fully repay our outstanding receivable.
44
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
While we continue to pursue other options to monetize the Tax Credits, at this time we believe that the most likely path to monetize the Tax Credit certificates
may be from proceeds that Alaska realizes from issuing its own
bonds.
This path, however, has
complexities and risks.
A lawsuit was filed asserting constitutional challenges to Alaska’s ability to issue the bonds; however, the Attorney General issued an opinion that the issuance of the bonds is not prohibited by the Alaskan constitution and an Ala
skan Superior Court judge threw out th
e
lawsuit
challenging the constitutionality of the issuance of bonds
. An appeal of the Superior Court’s ruling to the Alaska Supreme Court has been made.
The Revenue Department of the State of Alaska has indicated, h
owever, that until the courts have resolved the legal issues, which
we
estimate may
now
take
up
to
an additional 18
months, it will not go into the bond markets.
NOTE 7. LONG–TERM DEBT, NET
Long–term debt, net consisted of the following as of December 31:
|
|
2018
|
|
|
2017
|
|
Credit facility:
|
|
|
|
|
|
|
|
|
Principal outstanding
|
|
$
|
12,334
|
|
|
$
|
5,000
|
|
Unamortized debt issuance costs
|
|
|
(125
|
)
|
|
|
(599
|
)
|
Carrying amount
|
|
|
12,209
|
|
|
|
4,401
|
|
|
|
|
|
|
|
|
|
|
Senior loan facility - principal outstanding
|
|
|
29,000
|
|
|
|
29,995
|
|
|
|
|
|
|
|
|
|
|
6% senior secured convertible notes due 2023:
|
|
|
|
|
|
|
|
|
Principal outstanding
|
|
|
60,000
|
|
|
|
—
|
|
Unamortized debt discount and debt issuance costs
|
|
|
(15,906
|
)
|
|
|
—
|
|
Carrying amount
|
|
|
44,094
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
10% senior secured notes due 2019:
|
|
|
|
|
|
|
|
|
Principal outstanding
|
|
|
—
|
|
|
|
1,872
|
|
Unamortized debt issuance costs
|
|
|
—
|
|
|
|
(25
|
)
|
Carrying amount
|
|
|
—
|
|
|
|
1,847
|
|
|
|
|
|
|
|
|
|
|
10% senior notes due 2019:
|
|
|
|
|
|
|
|
|
Principal outstanding
|
|
|
6,957
|
|
|
|
85,239
|
|
Unamortized debt issuance costs
|
|
|
(4
|
)
|
|
|
(189
|
)
|
Carrying amount
|
|
|
6,953
|
|
|
|
85,050
|
|
|
|
|
|
|
|
|
|
|
Capital lease obligations
|
|
|
1,234
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
93,490
|
|
|
|
121,293
|
|
Current portion of long-term debt
|
|
|
(7,837
|
)
|
|
|
(995
|
)
|
Total long-term debt
|
|
$
|
85,653
|
|
|
$
|
120,298
|
|
Debt Exchange
In January 2018, we consummated an exchange offer and consent solicitation (the “Exchange”) related to our Senior Notes due 2019 (the “Senior Notes”). Pursuant to a restructuring support agreement with holders of approximately 85% of the par value our of Senior Notes, we exchanged $78.0 million of our Senior Notes and $7 thousand of our Senior Secured Notes due 2019 (the “Senior Secured Notes”) for (i) 0.04 million shares of common stock, (ii) 0.03 million shares of Series A preferred stock, (iii) 0.9 million shares of Series B preferred stock, and (iv) 8.3 million Series C warrants. The Exchange was accounted for as an extinguishment as we were legally released of our obligations upon delivery and acceptance of the respective equity securities and we recognized a gain of $0.1 million.
45
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Credit Facility
As of December 31, 2018, we have a $30.0 million credit facility that expires in August 2021. Under the terms of the credit facility, $22.0 million is immediately available with the remaining $8.0 million becoming available upon the
consent of lenders holding 66 ⅔% of the aggregate of advances and commitments under our credit facility
. Borrowings under the credit facility are secured primarily by substantially all our assets located in the United States, subject to certain exclusions. We may use borrowing under the credit facility for working capital purposes and general corporate purposes.
The credit facility does not require any repayments of amounts outstanding until it expires in August 2021; however, the credit facility does require a mandatory prepayment with the proceeds from any payment or monetization of the Tax Credits.
Borrowings under the credit facility bear interest at a rate of 11.75% through and including August 2020 and 12.75% thereafter.
Senior Loan Facility
As of December 31, 2018, we have a $30.0 million senior loan facility that expires in January 2020. Borrowings under the senior loan facility are secured primarily by substantially all the collateral securing the obligation under our credit facility. This security interest is junior to the security interest in the collateral securing the obligations under our credit facility.
The senior loan facility does not require any repayments of amounts outstanding until in expires in January 2020; however, the senior loan facility does require a mandatory prepayment with the proceeds from any payment or monetization of the Tax Credits once the credit facility has had cumulative prepayments of $30.0 million.
Borrowings under the senior loan facility bear interest at a rate of 11.50% through and including August 2019 and 12.50% thereafter.
6% Senior Secured Convertible Notes due 2023
In September 2018, we issued $60.0 million of 6% Senior Secured Convertible Notes due 2023 (the “2023 Notes”) under an indenture dated September 26, 2018 (the “2023 Indenture”). The 2023 Notes mature in September 2023, and interest is payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year.
We may not redeem the 2023 Notes prior to October 1, 2021. After that date, we may redeem all or part of the 2023 Notes, at our option, if the last reported sale price of our common stock has been at least 150% of the conversion price then in effect (i) on the trading day immediately preceding the date of which we provide notice of redemption and (ii) for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the 2023 Notes to be redeemed, payable in cash, plus accrued and unpaid interest and any make whole premium (as described in the 2023 Indenture).
In the event of a fundamental change, as defined in the 2023 Indenture, holders of the 2023 Notes may, subject to certain restrictions, require us to repurchase for cash all or a portion of their notes equal to $1,000 or a multiple of $1,000 at a fundamental change repurchase price equal to 100% of the principal amount of 2023 Notes, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date.
Upon the occurrence of an event of default, as defined in the 2023 Indenture, the trustee or the holders of at least 25% in aggregate principal amount of the 2023 Notes then outstanding may declare 100% of the principal of, and accrued and unpaid interest on, all the 2023 Notes to be due and payable immediately.
The 2023 Notes are convertible at the option of the holder into shares of common stock or, for certain holders (as defined in the 2023 Indenture), warrants to purchase an equal number of shares of common stock at an exercise price of $0.0001 per share, subject to customary adjustments. The initial conversion rate is 173.91304 shares of common stock or warrants per $1,000 principal amount, representing an initial conversion price of approximately $5.75 per share.
The conversion rate is subject to adjustment upon the occurrence of certain events, as defined in the 2023 Indenture. We can satisfy the conversion obligation, at our option, in either cash, shares of common stock, warrants or a combination thereof.
46
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
When the 20
23 Notes were issued, we accounted for the debt and equity components of the 2023 Notes separately, as we have the option to settle the conversion obligation in cash. At the date of issuance, we calculated the fair value of the 2023 Notes, excluding the c
onversion feature, based on the fair value of similar non–convertible debt instruments. The difference between the cash proceeds and the estimated fair value represented the value which was assigned to the equity component and recorded as a debt discount.
The debt discount is being amortized using the effective interest rate method over the period from issuance to the maturity date of September 26, 2023. The carrying amount of the equity component of the 2023 Notes reported in additional paid in capital
was initially valued at $15.4 million, which is net of $0.3 million of debt issuance costs allocated to the equity component.
As the closing price of our common stock at December 31, 2018 was less than the initial conversion price for the 2023 Notes, the if–converted value of the 2023 Notes would be less than the principal amount.
In 2018, we recorded interest expense of $1.6 million related to the 2023 Notes, of which $1.0 million related to contractual interest expense.
10% Senior Secured Notes due 2019
Our Senior Secured Notes were issued in July 2015 and were to mature in July 2019. Interest was payable semi–annually in arrears on January 15 and July 15 of each year. We repaid in full our Senior Secured Notes in July 2018.
10% Senior Notes due 2019
In July 2016, we issued our Senior Notes under an indenture dated July 27, 2016 (the “Senior Notes Indenture”). The Senior Notes mature in September 2019, and interest is payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year.
We had the election to pay interest on the Senior Notes in kind with additional Senior Notes for any interest payment dates through, and including, July 15, 2017 provided that, if we made this election, the interest on the Senior Notes for such in kind payments would accrue at 1% higher that the cash interest rate of 10%. In 2017, we elected to pay interest in kind of $4.8 million, which was capitalized within the Senior Notes balance.
Borrowings under the Senior Notes were secured primarily by substantially all the collateral securing the obligation under our credit facility and our senior loan facility, but the collateral was released in conjunction with the Exchange.
We may redeem up to $35.0 million of the Senior Notes at a redemption price of 100% of the principal amount of the Senior Notes out of proceeds from the payment or monetization of the Tax Credits provided that we have repaid in full our credit facility and senior loan facility.
In the event of a change in control, as defined in the Senior Notes Indenture, holders of the Senior Notes will have the right to require us to repurchase their notes for a cash purchase price equal to 101% of the principal amounts of the Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the repurchase date.
Upon the occurrence of an event of default, as defined within the Senior Notes Indenture, the trustee or the holders of at least 25% in aggregate principal amount of the Senior Notes then outstanding may declare 100% of the principal of, and accrued and unpaid interest on, all the Senior Notes to be due and payable immediately. In addition, an applicable premium, as defined in the Senior Notes Indenture, would also become immediately due and payable.
Debt Compliance
The credit agreements and indentures for our credit facility, senior loan facility, 2023 Notes and Senior Notes contain certain representations, warranties, covenants and other terms and conditions which are customary for agreements of these types. As of December 31, 2018, we were in compliance with these covenants.
47
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Maturities of Long–Term Debt
The maturities of our long–term debt, including capital leases, for each of the five years in the period ending December 31, 2023 are $7.8 million, $29.4 million, $12.3 million, $0.0 million and $60.0 million, respectively.
NOTE 8. COMMITMENTS AND CONTINGENCIES
Litigation
We are involved in various disputes or legal actions involving contractual and employment relationships, liability claims, and a variety of other matters arising in the ordinary course of business. We do not believe the outcome of such disputes or legal actions will have a material effect on our consolidated financial statements.
Operating Leases
We lease automobiles, office equipment and warehouse and office space under operating lease agreements that expire at various dates through 2024. Certain leases contain renewal options and escalation provisions and generally require us to pay utilities, insurance, taxes and other operating expenses.
Rental expense, net of sublease income, for all operating leases was $5.4 million and $4.7 million for 2018 and 2017, respectively.
As of December 31, 2018, future minimum annual rental commitments due under noncancelable leases for each of the five years in the period ending December 31, 2023 are $4.6 million, $2.9 million, $1.4 million, $1.1 million and $0.9 million, respectively, and $1.1 million in the aggregate thereafter
NOTE 9. WARRANTS
Series A and Series B
As of December 31, 2018, we have 0.2 million Series A warrants and 0.2 million Series B warrants outstanding, both with an expiration date of July 27, 2021. The Series A warrants and Series B warrants entitle the holders to purchase 0.05 shares of our common stock, have exercise prices of $10.30 and $12.88, respectively, and become exercisable 30 days in advance of their expiration date.
Series C
In January 2018, we issued 8.3 million Series C warrants as an element of the Exchange (see Note 7). Each Series C warrant entitles the holder to purchase 0.05 shares of our common stock, has an exercise price of $0.0001 and has no expiration date. The Series C warrants are immediately exercisable by the holder and are exercisable by us in connection with a full redemption of the Series A preferred stock and Series B preferred stock provided that it does not result in a holder owning 10% or more of our outstanding shares of common stock, or upon a change in control. The Series C warrants were recorded at $4.8 million based on an allocation of the Exchange consideration to the various share classes and securities based on their relative fair values.
In 2018, 0.4 million of the Series C warrants were exercised. As of December 31, 2018, there are 7.9 million Series C warrants outstanding.
48
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
S
eries D
In March 2018, we issued 14.1 million Series D warrants in connection with the conversion of the Series B preferred stock. Each warrant entitles the holder to purchase 0.05 shares of our common stock, has an exercise price of $0.0001 and has no expiration date. The Series D warrants are immediately exercisable by the holders and are exercisable us in connection with a full redemption of the Series A preferred stock and Series B preferred stock, provided that it does not result in a holder owning 10% or more of our outstanding shares of common stock, or upon a change in control. The Series D warrants were recorded at their fair value of $23.0 million, which was based on the price of our common stock as of the date of the conversion as the Series D warrants have a nominal strike price, no expiration date and no other relevant restrictions.
In 2018, 2.4 million of the Series D warrants were exercised. As of December 31, 2018, there are 11.7 million Series D warrants outstanding.
Series E
In September 2018, we issued 94.8 million Series E warrants in connection with the conversion of the Series A preferred stock. Each warrant entitles the holder to purchase 0.05 shares of our common stock, has an exercise price of $0.0001 and has no expiration date. The Series E warrants are immediately exercisable by the holders and are exercisable by us in connection with a full redemption of the Series A preferred stock, provided that it does not result in a holder owning 10% or more of our outstanding shares of common stock, or upon a change in control. The Series E warrants were recorded at their fair value of $54.0 million, which was based on the price of our common stock as of the date of the conversion as the Series E warrants have a nominal strike price, no expiration date and no other relevant restrictions.
In 2018, 27.0 million of the Series E warrants were exercised. As of December 31, 2018, there are 67.8 million Series E warrants outstanding.
NOTE 10.
STOCKHOLDERS’ EQUITY
Preferred Stock
We are authorized to issue 1.0 million shares of preferred stock with a par value of $0.0001 per share with such designations, rights and preferences as may be determined from time to time by our Board of Directors.
Series A
In January 2018, we issued 0.03 million shares of Series A preferred stock as an element of the Exchange (see Note 7). The Series A preferred stock had an 8.0% dividend payable quarterly in arrears and accumulated whether or not earned or declared beginning April 1, 2018. In 2018, we issued dividends in kind valued at $1.6 million. Each outstanding share of Series A preferred stock was convertible into 163.573 shares of common stock or, if an election was made by an eligible holder, into warrants representing the right to receive 163.573 shares of common stock. The Series A preferred stock was recorded at $62.0 million, less stock issuance costs of $3.6 million, based on an allocation of the Exchange consideration to the various share classes and securities based on their relative fair values.
We evaluated the nondetachable conversion option embedded in the Series A preferred stock and determined that a beneficial conversion feature (“BCF”) existed as of the closing date of the Exchange. As the intrinsic value of the BCF exceeded the value allotted to the Series A preferred stock, we separately recognized a discount of $62.0 million as a reduction to the value of the Series A preferred stock.
In September 2018, all the shares of the Series A preferred stock were converted into 0.7 million shares of common stock and 94.8 million Series E warrants with an exercise price of $0.0001. Upon conversion, the Series A preferred stock was derecognized, and we fully recognized the value of the BCF as a deemed dividend. As of December 31, 2018, there were no issued or outstanding shares of Series A preferred stock.
Series B
49
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
In January 2018, we issued 0.9 million shares of Series B preferred stock as an element of the Exchange (see Note
7
). The Series B preferred stock had no stated dividend and dividends were at the discretion of our Board of Directors. Each outstanding sh
are of Series B preferred stock was convertible into 1.08689 shares of common stock or, if an election was made by an eligible holder, into warrants representing the right to receive 1.08689 shares of common stock. The Series B preferred stock was senior
to our common stock and junior to the Series A preferred stock in the event of our liquidation. The Series B preferred stock was recorded at $10.8 million based on an allocation of the Exchange consideration to the various share classes and securities bas
ed on their relative fair values. Similar to the Series A preferred stock, we determined that a BCF existed for the Series B preferred stock. As the intrinsic value of the BCF exceeded the value allotted to the Series B preferred stock, we separately rec
ognized a discount of $10.8 million as a reduction in the value of the Series B preferred stock.
In March 2018, all the shares of the Series B preferred stock were converted into 0.2 million shares of common stock and 14.1 million Series D warrants with an exercise price of $0.0001. Upon conversion, the Series B preferred stock was derecognized, and we fully recognized the value of the BCF as a deemed dividend. As of December 31, 2018, there were no issued or outstanding shares of Series B preferred stock.
Common Stock
As of December 31, 2018, we are authorized to issue 40.0 million shares of common stock with a par value of $0.0001 per share.
The following table presents the changes in the number of shares outstanding for the years ended December 31:
|
|
2018
|
|
|
2017
|
|
Shares issued:
|
|
|
|
|
|
|
|
|
Balance at beginning of year
|
|
|
473
|
|
|
|
470
|
|
Issue of shares upon vesting of restricted stock units
|
|
|
268
|
|
|
|
3
|
|
Issue of shares on exercises of stock options
|
|
|
16
|
|
|
|
—
|
|
Issue of shares in the Exchange
|
|
|
41
|
|
|
|
—
|
|
Issue of shares on the conversion of the Series A preferred stock
|
|
|
704
|
|
|
|
—
|
|
Issue of shares on the conversion of the Series B preferred stock
|
|
|
225
|
|
|
|
—
|
|
Issue of shares on exercises of Series C warrants
|
|
|
16
|
|
|
|
—
|
|
Issue of shares on exercises of Series D warrants
|
|
|
117
|
|
|
|
—
|
|
Issue of shares on exercises of Series E warrants
|
|
|
1,351
|
|
|
|
—
|
|
Balance as of end of year
|
|
|
3,211
|
|
|
|
473
|
|
|
|
|
|
|
|
|
|
|
Shares held as treasury stock:
|
|
|
|
|
|
|
|
|
Balance at beginning of year
|
|
|
2
|
|
|
|
—
|
|
Purchase of treasury stock
|
|
|
109
|
|
|
|
2
|
|
Balance as of end of year
|
|
|
111
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding as of end of year
|
|
|
3,100
|
|
|
|
471
|
|
NOTE 11. VARIABLE INTEREST ENTITY
We have a 49.0% interest in a business venture with Kuukpik Corporation (“Kuukpik”) that performs contracts for the acquisition and development of geophysical and seismic data and for geophysical and seismic services and any and all related work anywhere on the North Slope of Alaska (onshore or offshore). The venture receives 10% of our gross revenues from all North Slope of Alaska contracts and will expire in December 2020.
50
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
This venture meets the definition of a variable interest entity (“VIE”). Based on our power to
influence the significant business activities of the business venture and our responsibility to absorb contract losses, we are deemed to be the primary beneficiary of this VIE; therefore, we have consolidated the operating results, assets and liabilities
of this VIE, with Kuukpik’s portion of equity presented as “Noncontrolling interest” on our consolidated balance sheets and Kuukpik’s portion of net income presented as “Net income attributable to noncontrolling interest” on our consolidated statements of
operations.
In August 2017, we completed our project with SAE Nigeria Limited (“SAE Nigeria”), which had previously meet the definition of a VIE, and all amounts due to us from SAE Nigeria were repaid. As a result, we no longer hold a variable interest in or have a controlling interest in SAE Nigeria and no longer include the results of SAE Nigeria in our consolidated financial statements.
NOTE 12. REVENUE FROM SERVICES
Deferred Costs on Contracts
In some instances, we incur third party costs that directly relate to the contract to fulfill the contract obligations. These fulfillment costs are capitalized and a
mortized consistent with how the related revenue is recognized. Changes in our deferred costs on contracts are as follows for the year ended December 31, 2018:
Balance at beginning of year
|
|
$
|
1,780
|
|
Fulfillment costs incurred
|
|
|
9,047
|
|
Amortization of fulfillment costs
|
|
|
(7,110
|
)
|
Balance at end of year
|
|
$
|
3,717
|
|
Deferred Revenue
Typically, our mobilization services are paid by the customer at the beginning of the contract while the revenue is recognized as control transfers to the customer, which can result in deferred revenue. Normally all other revenue is billed as work progresses, which generally will not result in significant deferred revenue except in those cases where a large mobilization is required for the contract. Changes in our deferred revenue are as follows for the year ended December 31, 2018:
Balance at beginning of year
|
|
$
|
1,477
|
|
Acquired from GEOK
|
|
|
2,856
|
|
Cash received, excluding amounts recognized as revenue from services
|
|
|
6,521
|
|
Amounts recognized as revenue from services
|
|
|
(6,556
|
)
|
Balance at end of year
|
|
$
|
4,298
|
|
Disaggregated Revenue
The following table disaggregates our revenue by major source for the year ended December 31, 2018:
|
|
North
America
|
|
|
South
America
|
|
|
Asia
Pacific
|
|
|
Total
|
|
Type of contract:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Turnkey
|
|
$
|
58,184
|
|
|
$
|
22,412
|
|
|
$
|
3,846
|
|
|
$
|
84,442
|
|
Term
|
|
|
8,283
|
|
|
|
912
|
|
|
|
967
|
|
|
|
10,162
|
|
Total
|
|
$
|
66,467
|
|
|
$
|
23,324
|
|
|
$
|
4,813
|
|
|
$
|
94,604
|
|
51
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Remaining Performance Obligation
s
As of December 31, 2018, we had $184.9 million of remaining performance obligations.
We expect to recognize revenue of approximately 99% of these performance obligations in 2019 and the remaining approximately 1% in 2020.
NOTE 13. EQUITY–BASED COMPENSATION
We have a long–term incentive plan for our directors, officers, employees, consultants and advisors. This plan allows for the issuance of stock options (both incentive and non–qualified), stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), other stock–based awards and cash–based awards. As of December 31, 2018, we have 2.8 million shares authorized for issuance under this plan, and 2.1 million shares remain available for grant.
Awards that expire or are cancelled without delivery of shares generally become available for issuance under this plan. Shares that are used or withheld to satisfy tax obligations are not available for issuance under this plan. We can either issue new shares, use shares held in treasury or purchase shares of our common stock to satisfy vesting of awards under this plan.
Stock Options
In 2016, we granted non–qualified stock options (“NQSOs”) to our senior management. The NQSOs were granted at an exercise price equal to the market value of our common stock on the grant date, and the fair value of the NQSOs was determined using a Black–Scholes option pricing model. The NQSOs have contractual terms of 10 years and were to vest in three equal annual installments. We did not grant any stock options in 2018 or 2017.
In January 2018, our Board accelerated the vesting of the NQSOs that were outstanding as of December 31, 2017, causing us to accelerate the recognition of $0.3 million in equity–based compensation costs.
Activity related to NQSOs is as follows:
|
|
Number of
Options
|
|
|
Weighted
Average
Exercise Price
|
|
Outstanding at January 1, 2018
|
|
|
15,575
|
|
|
$
|
203.80
|
|
Exercised
|
|
|
(15,575
|
)
|
|
|
203.80
|
|
Outstanding at December 31, 2018
|
|
|
—
|
|
|
$
|
—
|
|
The fair value of NQSOs vested in 2018 and 2017 was $0.8 million and $0.4 million, respectively.
Restricted Stock Units
An RSU is an award where each unit represents the right to receive the value of one share of our common stock at the date of vesting. RSUs may be settled by, at our discretion, either the issuance of our common stock, cash or a combination thereof based on the fair market value of the common stock on the date of exercise.
In January 2018, our Board accelerated the vesting of the RSUs that were outstanding as of December 31, 2017, causing us to accelerate the recognition of $0.6 million in equity–based compensation costs.
In August 2018, our Board accelerated the vesting of a portion of the RSUs that were granted to our senior management in 2018, causing us to accelerate the recognition of $5.1 million in equity–based compensation costs.
52
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
A
ctivity re
lated to RSUs is
as follows:
|
|
Number of
RSUs
|
|
|
Weighted
Average Grant
Date Fair
Value
|
|
Nonvested at January 1, 2018
|
|
|
10,383
|
|
|
$
|
157.00
|
|
Granted
|
|
|
622,274
|
|
|
|
22.78
|
|
Vested
|
|
|
(373,740
|
)
|
|
|
23.86
|
|
Nonvested at December 31, 2018
|
|
|
258,917
|
|
|
$
|
26.60
|
|
The fair value of RSUs granted in 2018 was $14.2 million. No RSUs were granted in 2017. The fair value of RSUs vested in 2018 and 2017 was $5.3 million and $0.3 million.
As of December 31, 2018, we had $5.1 million of unrecognized compensation cost related to unvested RSUs which is expected to be recognized over a weighted average period of 2.1 years.
Additionally, as of December 31, 2018, we have 0.1 million RSUs that are vested but have not yet settled. These RSUs were granted to our outside directors in 2018.
Equity–Based Compensation Cost
Equity–based compensation cost is measured at the date of grant based on the calculated fair value of the award and is generally recognized on a straight–line basis over the requisite service period, including those with graded vesting. Forfeitures are accounted for as they occur.
We recognized equity–based compensation costs of $10.1 million and $1.9 million in 2018 and 2017, respectively. These costs are included in “Selling, general and administrative expenses” on our consolidated statements of operations.
NOTE 14. EMPLOYEE BENEFIT PLANS
We have a defined contribution 401(k) plan for all eligible employees of our U.S. operations and a Retirement Registered Saving Plan for all eligible employees of our Canadian operations. These plans are discretionary and allow for the match of each employee’s contributions up to the maximum allowed under these plans. For 2018 and 2017, we made no matching contributions and had no expenses related to these plans.
NOTE 15
. INCOME TAXES
In December 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted into law. The Act, among other things, reduced the U.S. federal corporate tax rate from 35% to 21%, required companies to pay a transition tax of earnings of certain foreign subsidiaries that were previously not subject to U.S. tax and created new income taxes on certain foreign sourced earnings.
Given the significant complexity of the Act and the lack of clear tax and accounting guidance for the Act, the SEC
issued Staff Accounting Bulletin (“SAB”) No. 118 which provides guidance of accounting for the tax effects of the Act and allows for adjustments to provisional amounts during a measurement period of up to one year.
In 2017, pursuant to SAB No. 118, we made reasonable estimates related to (i) the remeaurement of U.S. deferred tax balances for the reduction in the tax rate, (ii) the liability for the transition tax and (iii) the taxes accrued relating to the change in permanent reinvestment assertion for unremitted earnings of certain foreign subsidiaries. As a result, we recognized a net provisional income tax benefit of $8.3 million in 2017 associated with these items, which was offset by a valuation allowance of the same amount.
In 2018, we revised these provisional amounts and recognized no additional income tax benefit. In determining the measurement period adjustments, we assessed regulatory guidance that was issued to determine the impact on the provisional estimates recognized in 2017. In addition, we gathered information and performed additional analysis on these estimates, including, but not limited to, the amount of earnings and profits subject to the transition tax, the calculation of foreign tax credits, the local tax treatment of future distributions of unremitted earnings and in regard to the remeasurement of U.S. deferred taxes, the filing of our 2017 federal and state income tax returns.
53
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
As of December 31, 2018, we have completed our accounting for the tax effects of the Act.
The provision for income taxes is comprised of the following for the years ended December 31:
|
|
2018
|
|
|
2017
|
|
Current:
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign
|
|
|
(190
|
)
|
|
|
3,783
|
|
Total current
|
|
$
|
(190
|
)
|
|
$
|
3,783
|
|
Deferred:
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign
|
|
|
2,614
|
|
|
|
530
|
|
Total deferred
|
|
|
2,614
|
|
|
|
530
|
|
Income taxes
|
|
$
|
2,424
|
|
|
$
|
4,313
|
|
The geographic sources of our loss before income taxes are as follows for the years ended December 31:
|
|
2018
|
|
|
2017
|
|
U.S.
|
|
$
|
(64,599
|
)
|
|
$
|
(33,327
|
)
|
Foreign
|
|
|
(15,672
|
)
|
|
|
(1,144
|
)
|
Total
|
|
$
|
(80,271
|
)
|
|
$
|
(34,471
|
)
|
The provision for income taxes differs from the amount computed by applying the U.S. statutory income tax rate to the loss before income taxes for the reasons set forth below for the years ended December 31:
|
|
2018
|
|
|
2017
|
|
Taxes at the U.S. federal statutory income tax rate
|
|
$
|
(16,857
|
)
|
|
$
|
(12,065
|
)
|
Change in federal statutory income tax rate
|
|
|
—
|
|
|
|
8,272
|
|
Nondeductible expenses
|
|
|
3,134
|
|
|
|
1,398
|
|
Change in valuation allowance
|
|
|
21,579
|
|
|
|
5,299
|
|
Effect of foreign operations
|
|
|
(1,654
|
)
|
|
|
1,865
|
|
Effect of U.S. operations
|
|
|
(3,778
|
)
|
|
|
—
|
|
Other
|
|
|
—
|
|
|
|
(456
|
)
|
Provision for income taxes
|
|
$
|
2,424
|
|
|
$
|
4,313
|
|
54
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of our temporary differences a
nd net operating losses (“NOL”) are as follows for the year
s
ended December 31:
|
|
2018
|
|
|
2017
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Operating loss carryforwards
|
|
$
|
36,727
|
|
|
$
|
22,404
|
|
Other accrued expenses
|
|
|
6,161
|
|
|
|
2,226
|
|
Tax credit carryforwards
|
|
|
2,240
|
|
|
|
2,087
|
|
Other
|
|
|
3,917
|
|
|
|
1,537
|
|
Total deferred tax asset
|
|
|
49,045
|
|
|
|
28,254
|
|
Valuation allowance
|
|
|
(44,233
|
)
|
|
|
(22,651
|
)
|
Total deferred tax asset, net
|
|
|
4,812
|
|
|
|
5,603
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
|
(1,822
|
)
|
|
|
(671
|
)
|
Intangible assets
|
|
|
(975
|
)
|
|
|
(340
|
)
|
Total deferred tax liabilities
|
|
|
(2,797
|
)
|
|
|
(1,011
|
)
|
Net deferred tax asset
|
|
$
|
2,015
|
|
|
$
|
4,592
|
|
At December 31, 2018, we had approximately $1.4 million of foreign tax credits which will start to expire in 2022 under applicable foreign law and $0.9 million of other credits, the majority of which will expire after 2038 under U.S. tax law.
As of December 31, 2018, we also had U.S. federal tax NOL carryforwards of $98.9 million, which begin to expire in 2034. These NOL carryforwards, subject to certain requirements and restrictions, including limitations on their use in the event of future ownership changes, may be used to offset future taxable income and thereby reduce our U.S. federal income taxes otherwise payable.
We record a valuation allowance when it is more likely than not that some portion of all the deferred tax assets will not be utilized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the future and in the appropriate taxing jurisdictions. At December 31, 2018, $44.2 million of valuation allowances are recorded against various deferred tax assets, including foreign NOLs of $11.2 million, U.S. federal and tax credit carryforwards of $2.2 million and other U.S. NOL carryforwards of $4.8 million.
As of December 31, 2018, we have $1.3 million of deferred tax assets related to foreign NOLs without a valuation allowance as we expect that the deferred tax assets will be realized within the carryforward period.
We have provided no deferred taxes for earnings of certain of our foreign subsidiaries as these earnings have been and, under current plans, will continue to be permanently reinvested in these foreign subsidiaries.
At December 31, 2018, we had $0.2 million of tax liabilities for total gross unrecognized tax benefits related to uncertain tax positions. The following table presents the changes in our gross unrecognized tax benefits for the years ended December 31:
|
|
2018
|
|
|
2017
|
|
Balance at beginning of year
|
|
$
|
192
|
|
|
$
|
—
|
|
Additions for tax positions taken in prior years
|
|
|
(23
|
)
|
|
|
192
|
|
Balance at end of year
|
|
$
|
169
|
|
|
$
|
192
|
|
We do not expect to recognize any significant increases or decreases in unrecognized tax benefits during the next twelve–month period. Interest and penalties, if any, related to unrecognized tax benefits are recorded in our provision for income taxes.
We conduct business in more than 15 countries and are subject to income taxes in most taxing jurisdictions in which we operate. We believe there are no jurisdictions in which the outcome of unresolved issues or claims is likely to be material to our results of operations, financial position or cash flows. We further believe that we have made adequate provision for all income tax uncertainties.
55
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
NOTE 16
. LOSS PER COMMON SHARE
Our Series C warrants, Series D warrants and Series E warrants are considered to be participating securities as they are entitled to dividends based on dividends paid on our common stock. Accordingly, beginning in 2018, we are now required to apply the two–class method to calculate basic and diluted loss per share. Under the two–class method, basic loss per share is computed by dividing net loss available to common stockholders, after deducting the amount allocated to participating securities, by the weighted average number of common shares outstanding during each period. Diluted loss per share is computed by dividing net loss available to common stockholders, after deducting the amount allocated to participating securities, by the sum of the weighted average number of shares outstanding during each period and the dilutive potential common shares outstanding during the period determined under the treasury stock method.
The computation of basic and diluted net loss per share is as follows for the years ended December 31:
|
|
2018
|
|
Net loss attributable to SAExploration
|
|
$
|
(83,600
|
)
|
Amortization of discount on Series A and Series B preferred stock
|
|
|
(72,762
|
)
|
Accretion of Series A preferred stock to redemption value
|
|
|
21,376
|
|
Dividends on Series A preferred stock
|
|
|
(1,614
|
)
|
Allocation of earnings to participating securities
(1)
|
|
|
—
|
|
Loss available to common stockholders of SAExploration
|
|
$
|
(136,600
|
)
|
|
|
|
|
|
Weighted average common shares outstanding (basic and diluted)
|
|
|
1,336
|
|
|
|
|
|
|
Loss per share available to common stockholders of SAExploration (basic and diluted)
|
|
$
|
(102.25
|
)
|
|
|
|
|
|
Potentially anti-dilutive shares excluded from diluted loss available to common stockholders
of SAExploration
(2)
|
|
|
15,083
|
|
|
|
2017
|
|
Net loss attributable to SAExploration
|
|
$
|
(40,756
|
)
|
|
|
|
|
|
Weighted average common shares outstanding (basic and diluted)
|
|
|
469
|
|
|
|
|
|
|
Net loss per share (basic and diluted)
|
|
$
|
(86.90
|
)
|
|
|
|
|
|
Potentially anti-dilutive shares excluded from diluted loss per share
(2)
|
|
|
26
|
|
(1)
|
Participating securities are not allocated losses as they do not participate in losses.
|
(2)
|
Includes warrants, unvested equity–based compensation and the shares underlying our 2023 Notes as their effect, if included, would have been anti–dilutive.
|
56
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
NOTE 1
7
. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets or liabilities. Level 2 refers to fair values determined based on quoted prices for similar assets or liabilities in active markets or inputs that are observable to the asset or liability, either directly or indirectly through market corroboration. Level 3 refers to fair values determined based on unobservable inputs used in the measurement of assets and liabilities at fair value.
The estimated fair values of our financial instruments have been determined at discrete points in time based on relevant market information. Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and long–term debt. The carrying amounts of our financial instruments, other than our 2023 Notes, Senior Secured Notes and Senior Notes, approximate fair value because of the short–term nature of the items.
As of December 31, 2018, the estimated aggregate fair value of our 2023 Notes and Senior Notes was $50.7 million, which differs from the aggregate carrying value of $51.0 million. As our 2023 Notes are not actively traded, the fair value determination of the 2023 Notes is categorized as Level 3 as the valuation was based on valuation techniques when observable market data is not available. The fair value determination of our Senior Notes is categorized as Level 2 as this valuation used dealer quoted prices in active markets obtained from independent third–party sources.
As of December 31, 2017, the estimated aggregate fair value of our Senior Secured Notes and Senior Notes was $32.3 million, which differs from the aggregate carrying value of $86.9 million. These fair value determinations are categorized as Level 2 as these valuations used dealer quoted prices in active markets obtained from independent third–party sources.
NOTE 18
. OTHER SUPPLEMENTAL INFORMATION
Cash, Cash Equivalents and Restricted Cash
Cash, cash equivalents and restricted cash are recorded in our consolidated balance sheets as follows at December 31:
|
|
2018
|
|
|
2017
|
|
Cash and cash equivalents
|
|
$
|
7,192
|
|
|
$
|
3,613
|
|
Restricted cash
|
|
|
271
|
|
|
|
41
|
|
Total cash, cash equivalents and restricted cash
|
|
$
|
7,463
|
|
|
$
|
3,654
|
|
Restricted cash primarily consists of cash collateral for labor claims, office rental and cash in another country restricted by exchange control regulations.
Accounts Receivable, net
Total accounts receivable, net is comprised of the following at December 31:
|
|
2018
|
|
|
2017
|
|
Trade receivables
|
|
$
|
95,219
|
|
|
$
|
82,115
|
|
Other receivables
|
|
|
1,977
|
|
|
|
2,104
|
|
Total accounts receivable
|
|
|
97,196
|
|
|
|
84,219
|
|
Less: allowance for doubtful accounts
|
|
|
(19,533
|
)
|
|
|
(12
|
)
|
Total accounts receivable, net
|
|
|
77,663
|
|
|
|
84,207
|
|
Current accounts receivable, net
|
|
|
24,859
|
|
|
|
6,105
|
|
Long-term accounts receivable, net
|
|
$
|
52,804
|
|
|
$
|
78,102
|
|
57
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Accrued Liabilities
Accrued liabilities are comprised of the following at December 31:
|
|
2018
|
|
|
2017
|
|
Accrued payroll liabilities
|
|
$
|
3,622
|
|
|
$
|
2,781
|
|
Accrued interest
|
|
|
306
|
|
|
|
1,877
|
|
Other accrued liabilities
|
|
|
6,570
|
|
|
|
1,653
|
|
Total accrued liabilities
|
|
$
|
10,498
|
|
|
$
|
6,311
|
|
Other accrued liabilities primarily consist of accruals for project related expenses.
Supplemental Cash Flows Information
Supplemental cash flows information is as follows for the years ended December 31:
|
|
2018
|
|
|
2017
|
|
Cash paid for interest
|
|
$
|
9,412
|
|
|
$
|
6,154
|
|
Cash paid for income taxes
|
|
|
2,487
|
|
|
|
7,668
|
|
Noncash Transactions
Noncash transactions are as follows at December 31:
|
|
2018
|
|
|
2017
|
|
Costs to issue stock included in prepaid expenses and other current assets
|
|
$
|
1,442
|
|
|
$
|
—
|
|
Costs for additions to property and equipment acquired in a capital lease
|
|
|
1,504
|
|
|
|
—
|
|
Costs for additions to property and equipment in accounts payable
|
|
|
—
|
|
|
|
49
|
|
Costs to issue debt included in accounts payable
|
|
|
—
|
|
|
|
550
|
|
NOTE 19. RELATED PARTY TRANSACTIONS
Mr. Hastings, our Chief Executive Officer and Chairman of the Board of Directors, owns and controls Speculative Seismic Investments, LLC (“SSI”), which holds 1,350 shares of our common stock, and controls CLCH, LLC, which holds 1,201 shares of our common stock.
As of December 31, 2018, SSI is a lender under our senior loan facility in the principal amount of $0.6 million. Mr. Hastings is also a lender under our credit facility in the principal amount of $0.8 million and was an initial purchaser of our 2023 Notes in the principal amount of $1.0 million.
58
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
NOTE
20
. GEOGRAPHIC AND RELATED INFORMATION
The following table presents consolidated revenue from services based on the location of the services provided for the years ended December 31, and long–lived assets, which includes property and equipment, goodwill, intangible assets and other assets, by its geographic location at December 31:
|
|
Revenue from Services
|
|
|
Long-Lived Assets
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
North America:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
45,657
|
|
|
$
|
40,504
|
|
|
$
|
39,068
|
|
|
$
|
33,647
|
|
Canada
|
|
|
20,810
|
|
|
|
14,459
|
|
|
|
3,888
|
|
|
|
3,625
|
|
Total
|
|
|
66,467
|
|
|
|
54,963
|
|
|
|
42,956
|
|
|
|
37,272
|
|
South America:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colombia
|
|
|
22,443
|
|
|
|
30,268
|
|
|
|
185
|
|
|
|
1,396
|
|
Other
|
|
|
881
|
|
|
|
2,404
|
|
|
|
62
|
|
|
|
1,844
|
|
Total
|
|
|
23,324
|
|
|
|
32,672
|
|
|
|
247
|
|
|
|
3,240
|
|
Asia Pacific:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Zealand
|
|
|
—
|
|
|
|
4,266
|
|
|
|
—
|
|
|
|
—
|
|
Other
|
|
|
4,813
|
|
|
|
—
|
|
|
|
599
|
|
|
|
471
|
|
Total
|
|
|
4,813
|
|
|
|
4,266
|
|
|
|
599
|
|
|
|
471
|
|
West Africa:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nigeria
|
|
|
—
|
|
|
|
35,121
|
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
|
—
|
|
|
|
35,121
|
|
|
|
—
|
|
|
|
—
|
|
Consolidated
|
|
$
|
94,604
|
|
|
$
|
127,022
|
|
|
$
|
43,802
|
|
|
$
|
40,983
|
|
NOTE 21.
SUPPLEMENTAL GUARANTOR INFORMATION
Our 2023 Notes and Senior Notes are fully and unconditionally guaranteed, jointly and severally, by all our wholly–owned U.S. subsidiaries (collectively, the “Guarantors”), and not by any of our foreign subsidiaries. Supplemental condensed consolidating financial information, including such information for the Guarantors, is presented below.
The following financial information should be read in conjunction with the consolidated financial statements herein. The financial information may not necessarily be indicative of financial position, results of operations or cash flows had the non–guarantor subsidiaries operated as independent entities.
Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial statements of the Guarantors are not provided as the consolidating financial information contained herein provides a more meaningful disclosure to allow investors to determine the nature of the assets held by, and the operations of, the combined groups.
59
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Condensed Consolidated Balance Sheets
|
|
December 31, 2018
|
|
|
|
SAExploration
Holdings, Inc.
|
|
|
The
Guarantors
|
|
|
Other
Subsidiaries
|
|
|
Consolidating
Adjustments
|
|
|
Total
Consolidated
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
28
|
|
|
$
|
4,223
|
|
|
$
|
2,941
|
|
|
$
|
—
|
|
|
$
|
7,192
|
|
Restricted cash
|
|
|
—
|
|
|
|
—
|
|
|
|
271
|
|
|
|
—
|
|
|
|
271
|
|
Accounts receivable, net
|
|
|
—
|
|
|
|
16,520
|
|
|
|
8,339
|
|
|
|
—
|
|
|
|
24,859
|
|
Deferred costs on contracts
|
|
|
—
|
|
|
|
3,491
|
|
|
|
226
|
|
|
|
—
|
|
|
|
3,717
|
|
Prepaid expenses and other current assets
|
|
|
63
|
|
|
|
460
|
|
|
|
2,290
|
|
|
|
—
|
|
|
|
2,813
|
|
Total current assets
|
|
|
91
|
|
|
|
24,694
|
|
|
|
14,067
|
|
|
|
—
|
|
|
|
38,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
—
|
|
|
|
32,839
|
|
|
|
2,495
|
|
|
|
—
|
|
|
|
35,334
|
|
Investment in subsidiaries
|
|
|
(101,642
|
)
|
|
|
33,628
|
|
|
|
7,499
|
|
|
|
60,515
|
|
|
|
—
|
|
Intercompany receivables
|
|
|
183,675
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(183,675
|
)
|
|
|
—
|
|
Goodwill
|
|
|
—
|
|
|
|
—
|
|
|
|
1,687
|
|
|
|
—
|
|
|
|
1,687
|
|
Intangible assets, net
|
|
|
—
|
|
|
|
3,541
|
|
|
|
525
|
|
|
|
—
|
|
|
|
4,066
|
|
Long-term accounts receivable, net
|
|
|
—
|
|
|
|
52,804
|
|
|
|
—
|
|
|
|
—
|
|
|
|
52,804
|
|
Deferred income taxes
|
|
|
—
|
|
|
|
—
|
|
|
|
2,015
|
|
|
|
—
|
|
|
|
2,015
|
|
Other assets
|
|
|
2,448
|
|
|
|
239
|
|
|
|
28
|
|
|
|
—
|
|
|
|
2,715
|
|
Total assets
|
|
$
|
84,572
|
|
|
$
|
147,745
|
|
|
$
|
28,316
|
|
|
$
|
(123,160
|
)
|
|
$
|
137,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
289
|
|
|
$
|
6,572
|
|
|
$
|
3,242
|
|
|
$
|
—
|
|
|
$
|
10,103
|
|
Accrued liabilities
|
|
|
906
|
|
|
|
6,761
|
|
|
|
2,831
|
|
|
|
—
|
|
|
|
10,498
|
|
Income and other taxes payable
|
|
|
210
|
|
|
|
359
|
|
|
|
2,762
|
|
|
|
—
|
|
|
|
3,331
|
|
Current portion of long-term debt
|
|
|
6,953
|
|
|
|
884
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,837
|
|
Deferred revenue
|
|
|
—
|
|
|
|
4,298
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,298
|
|
Total current liabilities
|
|
|
8,358
|
|
|
|
18,874
|
|
|
|
8,835
|
|
|
|
—
|
|
|
|
36,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany payables
|
|
|
—
|
|
|
|
126,678
|
|
|
|
56,998
|
|
|
|
(183,676
|
)
|
|
|
—
|
|
Long-term debt
|
|
|
73,094
|
|
|
|
12,559
|
|
|
|
—
|
|
|
|
—
|
|
|
|
85,653
|
|
Other long–term liabilities
|
|
|
300
|
|
|
|
—
|
|
|
|
80
|
|
|
|
—
|
|
|
|
380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
—
|
|
|
|
—
|
|
|
|
168
|
|
|
|
(168
|
)
|
|
|
—
|
|
Additional paid–in capital
|
|
|
232,661
|
|
|
|
43,861
|
|
|
|
22,109
|
|
|
|
(65,970
|
)
|
|
|
232,661
|
|
Accumulated deficit
|
|
|
(227,975
|
)
|
|
|
(58,452
|
)
|
|
|
(56,839
|
)
|
|
|
126,654
|
|
|
|
(216,612
|
)
|
Accumulated other comprehensive loss
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,035
|
)
|
|
|
—
|
|
|
|
(3,035
|
)
|
Treasury stock, at cost
|
|
|
(1,866
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,866
|
)
|
SAExploration stockholders’ equity (deficit)
|
|
|
2,820
|
|
|
|
(14,591
|
)
|
|
|
(37,597
|
)
|
|
|
60,516
|
|
|
|
11,148
|
|
Noncontrolling interest
|
|
|
—
|
|
|
|
4,225
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,225
|
|
Total stockholders’ equity (deficit)
|
|
|
2,820
|
|
|
|
(10,366
|
)
|
|
|
(37,597
|
)
|
|
|
60,516
|
|
|
|
15,373
|
|
Total liabilities and stockholders’ equity (deficit)
|
|
$
|
84,572
|
|
|
$
|
147,745
|
|
|
$
|
28,316
|
|
|
$
|
(123,160
|
)
|
|
$
|
137,473
|
|
60
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
|
|
December 31, 2017
|
|
|
|
SAExploration
Holdings, Inc.
|
|
|
The
Guarantors
|
|
|
Other
Subsidiaries
|
|
|
Consolidating
Adjustments
|
|
|
Total
Consolidated
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
8
|
|
|
$
|
1,097
|
|
|
$
|
2,508
|
|
|
$
|
—
|
|
|
$
|
3,613
|
|
Restricted cash
|
|
|
—
|
|
|
|
—
|
|
|
|
41
|
|
|
|
—
|
|
|
|
41
|
|
Accounts receivable, net
|
|
|
—
|
|
|
|
322
|
|
|
|
5,783
|
|
|
|
—
|
|
|
|
6,105
|
|
Deferred costs on contracts
|
|
|
—
|
|
|
|
144
|
|
|
|
1,636
|
|
|
|
—
|
|
|
|
1,780
|
|
Prepaid expenses and other current assets
|
|
|
3,162
|
|
|
|
240
|
|
|
|
3,320
|
|
|
|
—
|
|
|
|
6,722
|
|
Total current assets
|
|
|
3,170
|
|
|
|
1,803
|
|
|
|
13,288
|
|
|
|
—
|
|
|
|
18,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
—
|
|
|
|
28,143
|
|
|
|
4,803
|
|
|
|
—
|
|
|
|
32,946
|
|
Investment in subsidiaries
|
|
|
(32,901
|
)
|
|
|
51,210
|
|
|
|
7,500
|
|
|
|
(25,809
|
)
|
|
|
—
|
|
Intercompany receivables
|
|
|
134,502
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(134,502
|
)
|
|
|
—
|
|
Goodwill
|
|
|
—
|
|
|
|
—
|
|
|
|
1,832
|
|
|
|
—
|
|
|
|
1,832
|
|
Intangible assets, net
|
|
|
—
|
|
|
|
—
|
|
|
|
671
|
|
|
|
—
|
|
|
|
671
|
|
Long-term accounts receivable, net
|
|
|
—
|
|
|
|
78,102
|
|
|
|
—
|
|
|
|
—
|
|
|
|
78,102
|
|
Deferred income taxes
|
|
|
—
|
|
|
|
—
|
|
|
|
4,592
|
|
|
|
—
|
|
|
|
4,592
|
|
Other assets
|
|
|
5,352
|
|
|
|
150
|
|
|
|
32
|
|
|
|
—
|
|
|
|
5,534
|
|
Total assets
|
|
$
|
110,123
|
|
|
$
|
159,408
|
|
|
$
|
32,718
|
|
|
$
|
(160,311
|
)
|
|
$
|
141,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
(DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,782
|
|
|
$
|
590
|
|
|
$
|
2,179
|
|
|
$
|
—
|
|
|
$
|
4,551
|
|
Accrued liabilities
|
|
|
1,885
|
|
|
|
2,223
|
|
|
|
2,203
|
|
|
|
—
|
|
|
|
6,311
|
|
Income and other taxes payable
|
|
|
10
|
|
|
|
24
|
|
|
|
7,853
|
|
|
|
—
|
|
|
|
7,887
|
|
Current portion of long-term debt
|
|
|
995
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
995
|
|
Deferred revenue
|
|
|
—
|
|
|
|
—
|
|
|
|
1,477
|
|
|
|
—
|
|
|
|
1,477
|
|
Total current liabilities
|
|
|
4,672
|
|
|
|
2,837
|
|
|
|
13,712
|
|
|
|
—
|
|
|
|
21,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany payables
|
|
|
—
|
|
|
|
93,200
|
|
|
|
41,302
|
|
|
|
(134,502
|
)
|
|
|
—
|
|
Long-term debt
|
|
|
115,897
|
|
|
|
4,401
|
|
|
|
—
|
|
|
|
—
|
|
|
|
120,298
|
|
Other long-term liabilities
|
|
|
300
|
|
|
|
250
|
|
|
|
58
|
|
|
|
—
|
|
|
|
608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Additional paid–in capital
|
|
|
133,742
|
|
|
|
43,861
|
|
|
|
22,057
|
|
|
|
(65,918
|
)
|
|
|
133,742
|
|
(Accumulated deficit) retained earnings
|
|
|
(144,375
|
)
|
|
|
10,289
|
|
|
|
(39,329
|
)
|
|
|
40,109
|
|
|
|
(133,306
|
)
|
Accumulated other comprehensive loss
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,082
|
)
|
|
|
—
|
|
|
|
(5,082
|
)
|
Treasury stock, at cost
|
|
|
(113
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(113
|
)
|
SAExploration stockholders' (deficit) equity
|
|
|
(10,746
|
)
|
|
|
54,150
|
|
|
|
(22,354
|
)
|
|
|
(25,809
|
)
|
|
|
(4,759
|
)
|
Noncontrolling interest
|
|
|
—
|
|
|
|
4,570
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,570
|
|
Total stockholders’ (deficit) equity
|
|
|
(10,746
|
)
|
|
|
58,720
|
|
|
|
(22,354
|
)
|
|
|
(25,809
|
)
|
|
|
(189
|
)
|
Total liabilities and stockholders’ (deficit) equity
|
|
$
|
110,123
|
|
|
$
|
159,408
|
|
|
$
|
32,718
|
|
|
$
|
(160,311
|
)
|
|
$
|
141,938
|
|
61
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Condensed Consolidating Statements of Operations
|
|
Year Ended December 31, 2018
|
|
|
|
SAExploration
Holdings, Inc.
|
|
|
The
Guarantors
|
|
|
Other
Subsidiaries
|
|
|
Consolidating
Adjustments
|
|
|
Total
Consolidated
|
|
Revenue from services
|
|
$
|
—
|
|
|
$
|
48,346
|
|
|
$
|
46,258
|
|
|
$
|
—
|
|
|
$
|
94,604
|
|
Cost of services
|
|
|
—
|
|
|
|
42,284
|
|
|
|
43,781
|
|
|
|
—
|
|
|
|
86,065
|
|
Depreciation and amortization
|
|
|
—
|
|
|
|
8,247
|
|
|
|
2,864
|
|
|
|
—
|
|
|
|
11,111
|
|
Gross loss
|
|
|
—
|
|
|
|
(2,185
|
)
|
|
|
(387
|
)
|
|
|
—
|
|
|
|
(2,572
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
14,743
|
|
|
|
34,221
|
|
|
|
10,969
|
|
|
|
—
|
|
|
|
59,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(14,743
|
)
|
|
|
(36,406
|
)
|
|
|
(11,356
|
)
|
|
|
—
|
|
|
|
(62,505
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
|
53
|
|
|
|
(13,483
|
)
|
|
|
(4,336
|
)
|
|
|
—
|
|
|
|
(17,766
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes and equity in loss of
affiliates
|
|
|
(14,690
|
)
|
|
|
(49,889
|
)
|
|
|
(15,692
|
)
|
|
|
—
|
|
|
|
(80,271
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
169
|
|
|
|
143
|
|
|
|
2,112
|
|
|
|
—
|
|
|
|
2,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before equity in loss of affiliates
|
|
|
(14,859
|
)
|
|
|
(50,032
|
)
|
|
|
(17,804
|
)
|
|
|
—
|
|
|
|
(82,695
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in loss of affiliates
|
|
|
(68,741
|
)
|
|
|
(17,804
|
)
|
|
|
—
|
|
|
|
86,545
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(83,600
|
)
|
|
|
(67,836
|
)
|
|
|
(17,804
|
)
|
|
|
86,545
|
|
|
|
(82,695
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: net income attributable to noncontrolling
interest
|
|
|
—
|
|
|
|
905
|
|
|
|
—
|
|
|
|
—
|
|
|
|
905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to SAExploration
|
|
$
|
(83,600
|
)
|
|
$
|
(68,741
|
)
|
|
$
|
(17,804
|
)
|
|
$
|
86,545
|
|
|
$
|
(83,600
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
|
$
|
(83,600
|
)
|
|
$
|
(67,836
|
)
|
|
$
|
(15,757
|
)
|
|
$
|
86,545
|
|
|
$
|
(80,648
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: comprehensive income attributable to
noncontrolling interest
|
|
|
—
|
|
|
|
905
|
|
|
|
—
|
|
|
|
—
|
|
|
|
905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss attributable to SAExploration
|
|
$
|
(83,600
|
)
|
|
$
|
(68,741
|
)
|
|
$
|
(15,757
|
)
|
|
$
|
86,545
|
|
|
$
|
(81,553
|
)
|
62
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
|
|
Year Ended December 31, 2017
|
|
|
|
SAExploration
Holdings, Inc.
|
|
|
The
Guarantors
|
|
|
Other
Subsidiaries
|
|
|
Consolidating
Adjustments
|
|
|
Total
Consolidated
|
|
Revenue from services
|
|
$
|
—
|
|
|
$
|
75,625
|
|
|
$
|
51,397
|
|
|
$
|
—
|
|
|
$
|
127,022
|
|
Cost of services
|
|
|
—
|
|
|
|
51,244
|
|
|
|
41,985
|
|
|
|
—
|
|
|
|
93,229
|
|
Depreciation and amortization
|
|
|
—
|
|
|
|
8,019
|
|
|
|
3,706
|
|
|
|
—
|
|
|
|
11,725
|
|
Gross profit
|
|
|
—
|
|
|
|
16,362
|
|
|
|
5,706
|
|
|
|
—
|
|
|
|
22,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
3,943
|
|
|
|
11,052
|
|
|
|
10,601
|
|
|
|
—
|
|
|
|
25,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(3,943
|
)
|
|
|
5,310
|
|
|
|
(4,895
|
)
|
|
|
—
|
|
|
|
(3,528
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net
|
|
|
(16,569
|
)
|
|
|
(13,453
|
)
|
|
|
(921
|
)
|
|
|
—
|
|
|
|
(30,943
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes and equity in loss of
affiliates
|
|
|
(20,512
|
)
|
|
|
(8,143
|
)
|
|
|
(5,816
|
)
|
|
|
—
|
|
|
|
(34,471
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
(5
|
)
|
|
|
2,760
|
|
|
|
1,558
|
|
|
|
—
|
|
|
|
4,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before equity in loss of affiliates
|
|
|
(20,507
|
)
|
|
|
(10,903
|
)
|
|
|
(7,374
|
)
|
|
|
—
|
|
|
|
(38,784
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in loss of affiliates
|
|
|
(20,249
|
)
|
|
|
(7,297
|
)
|
|
|
—
|
|
|
|
27,546
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(40,756
|
)
|
|
|
(18,200
|
)
|
|
|
(7,374
|
)
|
|
|
27,546
|
|
|
|
(38,784
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: net income (loss) attributable to
noncontrolling interest
|
|
|
—
|
|
|
|
2,049
|
|
|
|
(77
|
)
|
|
|
—
|
|
|
|
1,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to SAExploration
|
|
$
|
(40,756
|
)
|
|
$
|
(20,249
|
)
|
|
$
|
(7,297
|
)
|
|
$
|
27,546
|
|
|
$
|
(40,756
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
|
$
|
(40,756
|
)
|
|
$
|
(18,200
|
)
|
|
$
|
(7,634
|
)
|
|
$
|
27,546
|
|
|
$
|
(39,044
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: comprehensive income (loss) attributable to
noncontrolling interest
|
|
|
—
|
|
|
|
2,049
|
|
|
|
(77
|
)
|
|
|
—
|
|
|
|
1,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss attributable to SAExploration
|
|
$
|
(40,756
|
)
|
|
$
|
(20,249
|
)
|
|
$
|
(7,557
|
)
|
|
$
|
27,546
|
|
|
$
|
(41,016
|
)
|
63
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
Condensed Consolidating Statements of Cash Flows
|
|
Year Ended December 31, 2018
|
|
|
|
SAExploration
Holdings, Inc.
|
|
|
The
Guarantors
|
|
|
Other
Subsidiaries
|
|
|
Consolidating
Adjustments
|
|
|
Total
Consolidated
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
$
|
(1,853
|
)
|
|
$
|
(13,465
|
)
|
|
$
|
(13,650
|
)
|
|
$
|
—
|
|
|
$
|
(28,968
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset purchase
|
|
|
—
|
|
|
|
(21,749
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(21,749
|
)
|
Purchase of property and equipment
|
|
|
—
|
|
|
|
(1,105
|
)
|
|
|
(157
|
)
|
|
|
—
|
|
|
|
(1,262
|
)
|
Proceeds from sale of property and
equipment
|
|
|
—
|
|
|
|
260
|
|
|
|
550
|
|
|
|
—
|
|
|
|
810
|
|
Investment in affiliate
|
|
|
—
|
|
|
|
(222
|
)
|
|
|
—
|
|
|
|
222
|
|
|
|
—
|
|
Net cash used in (provided by) investing
activities
|
|
|
—
|
|
|
|
(22,816
|
)
|
|
|
393
|
|
|
|
222
|
|
|
|
(22,201
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt repayments
|
|
|
(2,860
|
)
|
|
|
(56,347
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(59,207
|
)
|
Long-term debt borrowings
|
|
|
60,000
|
|
|
|
63,411
|
|
|
|
—
|
|
|
|
—
|
|
|
|
123,411
|
|
Debt issuance costs
|
|
|
(1,167
|
)
|
|
|
(1,548
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,715
|
)
|
Stock issuance costs
|
|
|
(3,174
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,174
|
)
|
Purchase of treasury stock
|
|
|
(1,753
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,753
|
)
|
Intercompany lending
|
|
|
(49,173
|
)
|
|
|
35,141
|
|
|
|
14,032
|
|
|
|
—
|
|
|
|
—
|
|
Contribution from affiliate
|
|
|
—
|
|
|
|
—
|
|
|
|
222
|
|
|
|
(222
|
)
|
|
|
—
|
|
Distribution to noncontrolling interest
|
|
|
—
|
|
|
|
(1,250
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,250
|
)
|
Net cash provided by financing activities
|
|
|
1,873
|
|
|
|
39,407
|
|
|
|
14,254
|
|
|
|
(222
|
)
|
|
|
55,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash
equivalents and restricted cash
|
|
|
—
|
|
|
|
—
|
|
|
|
(334
|
)
|
|
|
—
|
|
|
|
(334
|
)
|
Net change in cash, cash equivalents and
restricted cash
|
|
|
20
|
|
|
|
3,126
|
|
|
|
663
|
|
|
|
—
|
|
|
|
3,809
|
|
Cash, cash equivalents and restricted cash at
the beginning of year
|
|
|
8
|
|
|
|
1,097
|
|
|
|
2,549
|
|
|
|
—
|
|
|
|
3,654
|
|
Cash, cash equivalents and restricted cash at
the end of year
|
|
$
|
28
|
|
|
$
|
4,223
|
|
|
$
|
3,212
|
|
|
$
|
—
|
|
|
$
|
7,463
|
|
64
SAExploration Holdings, Inc.
Notes to Consolidated Financial Statements (continued)
|
|
Year Ended December 31, 2017
|
|
|
|
SAExploration
Holdings, Inc.
|
|
|
The
Guarantors
|
|
|
Other
Subsidiaries
|
|
|
Consolidating
Adjustments
|
|
|
Total
Consolidated
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating
activities
|
|
$
|
2,750
|
|
|
$
|
3,619
|
|
|
$
|
(6,180
|
)
|
|
$
|
(4,742
|
)
|
|
$
|
(4,553
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
—
|
|
|
|
(1,931
|
)
|
|
|
(739
|
)
|
|
|
—
|
|
|
|
(2,670
|
)
|
Proceeds from sale of property and
equipment
|
|
|
—
|
|
|
|
1,850
|
|
|
|
60
|
|
|
|
—
|
|
|
|
1,910
|
|
Net cash used in investing activities
|
|
|
—
|
|
|
|
(81
|
)
|
|
|
(679
|
)
|
|
|
—
|
|
|
|
(760
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt repayments
|
|
|
(614
|
)
|
|
|
(34,836
|
)
|
|
|
(17
|
)
|
|
|
—
|
|
|
|
(35,467
|
)
|
Long-term debt borrowings
|
|
|
—
|
|
|
|
33,401
|
|
|
|
—
|
|
|
|
—
|
|
|
|
33,401
|
|
Purchase of treasury stock
|
|
|
(113
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(113
|
)
|
Intercompany lending
|
|
|
(4,069
|
)
|
|
|
(3,359
|
)
|
|
|
7,428
|
|
|
|
—
|
|
|
|
—
|
|
Dividend payments to affiliates
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,742
|
)
|
|
|
4,742
|
|
|
|
—
|
|
Distribution to noncontrolling interest
|
|
|
—
|
|
|
|
(1,095
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,095
|
)
|
Net cash (used in) provided by financing
activities
|
|
|
(4,796
|
)
|
|
|
(5,889
|
)
|
|
|
2,669
|
|
|
|
4,742
|
|
|
|
(3,274
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash
equivalents and restricted cash
|
|
|
—
|
|
|
|
2
|
|
|
|
243
|
|
|
|
—
|
|
|
|
245
|
|
Net change in cash, cash equivalents and
restricted cash
|
|
|
(2,046
|
)
|
|
|
(2,349
|
)
|
|
|
(3,947
|
)
|
|
|
—
|
|
|
|
(8,342
|
)
|
Cash, cash equivalents and restricted cash at
the beginning of year
|
|
|
2,054
|
|
|
|
3,446
|
|
|
|
6,496
|
|
|
|
—
|
|
|
|
11,996
|
|
Cash, cash equivalents and restricted cash at
the end of year
|
|
$
|
8
|
|
|
$
|
1,097
|
|
|
$
|
2,549
|
|
|
$
|
—
|
|
|
$
|
3,654
|
|
NOTE 22. SUBSEQUENT EVENTS (UNAUDITED)
In February 2019, we borrowed an additional $9.7 million under our credit facility and now have $22.0 million outstanding. We also extended the maturity date of our senior loan facility to January 4, 2021.
As of March 19, 2019, we have issued 0.7 million shares of common stock through the exercise of our Series C warrants, Series D warrants and Series E warrants thus far in 2019.
We evaluated subsequent events for appropriate accounting and disclosure through the date these consolidated financial statements were issued and determined that there were no other material items that required recognition or disclosure in our consolidated financial statements.
65