HOUSTON, Aug. 15, 2019 /PRNewswire/ -- SAExploration
Holdings, Inc. (NASDAQ: SAEX, OTCQB: SXPLW) ("SAE" or the
"Company") announced today that the Securities and Exchange
Commission (the "SEC") is conducting an investigation of the
Company relating to certain accounting matters that arose in
2015-2016. The Company has been cooperating, and will
continue to cooperate, in good faith with the SEC and has retained
legal counsel and an accounting advisor to assist the Company with
respect to this matter. The Company's Board of Directors has
established a Special Committee of independent directors to oversee
the Company's own internal investigation and response to the
SEC.
The Company will restate its previously issued financial
statements for the fiscal years ended December 31, 2015 - 2018 and for the quarters
starting ended June 30, 2015 -
March 31, 2019 (collectively, the
"Non-Reliance Periods") and, as a result, will delay filing its
10-Q for the quarter ended June 30,
2019. As a result, the financial statements for the
Non-Reliance Period should no longer be relied upon. The
Board's decision to restate these financial statements arose from
the Company's re-evaluation of its relationship with Alaska Seismic
Ventures, LLC ("ASV"). The Company has determined that ASV
was a variable interest entity and that the Company had a
controlling financial interest in ASV that required it to
consolidate ASV during the Non-Reliance Periods in accordance with
accounting principles generally accepted in the United States. As a result of the above,
the Company has determined that a material weakness exists in the
Company's internal control over financial reporting and that
disclosure controls and procedures were ineffective during the
Non-Reliance Periods. Accordingly, the Company will amend any
disclosures pertaining to its evaluation of such controls and
procedures as appropriate in connection with the restated filings.
ASV is a data library company and the Company performed seismic
services for ASV in 2015 and 2016. The need for restatement does
not arise from SAE's current operating activities. The Company's
Audit Committee has discussed the foregoing matters with
Pannell Kerr Forster of Texas, P.C., the Company's independent
registered public accounting firm, who supports the Company's
determination. In connection with the restatement, the Company is
in discussions with holders of a majority of its outstanding debt,
as to whether or not there are defaults under the debt agreements,
with the goal of agreeing to a path forward in a way that is
constructive for the Company, its shareholders and employees, and
the debt holders.
Michael Faust has been named
Chairman of the Board, replacing Jeff
Hastings, who has been placed on administrative leave and
resigned as Chairman of the Board. The Company expects to name a
new Chief Executive Officer in the near future. Kevin Hubbard, C.P.A. and Partner at Ham,
Langston & Brezina, has been named Interim Chief Financial
Officer, replacing Brent Whiteley,
who has been terminated.
"We have taken swift action on each of these matters and will
continue to do so until they are resolved," said Michael Faust, Chairman of the Board. "This does
not impact our day-to-day operations which have been delivering
outstanding results for our customers and investors. We remain
committed to our customers, whose missions we make our own, and we
are grateful to the devoted men and women of SAExploration and the
contributions they make every day to our customers and our company.
We have a strong pipeline of committed projects, an excellent team
to deliver those projects, and are poised for continued
success."
Mr. Faust brings to SAE deep industry experience, combined with
a working knowledge of our operations, customers and employees.
Prior to being appointed Chairman of the Board he was serving as
the lead independent director. Since March
2019, Mr. Faust has served as the Interim President and
Chief Executive Officer of Obsidian Energy Ltd., a Canadian-listed
public company in the oil and natural gas industry, and has also
served on its Board of Directors since April
2018. Since March 2019, Mr.
Faust has served on the Board of Directors of Parker Drilling
Company, a U.S.-listed provider of drilling services and rental
tools to the energy industry in the U.S. and international markets.
Previously, Mr. Faust had a long career of increasing
responsibilities with ExxonMobil and ConocoPhillips. Mr.
Faust earned his Master of Arts degree in Geophysics from the
University of Texas at Austin in 1984,
after receiving his Bachelor of Science degree in Geology from the
University of Washington in 1981.
For more information, see the Company's Current Report on Form
8-K filed with the SEC on August 16,
2019.
About SAExploration Holdings, Inc.
SAE is an
international oilfield services company offering a full range of
vertically-integrated seismic data acquisition, data processing and
interpretation, and logistical support services throughout
North America, South America, Asia
Pacific, Africa and the
Middle East. In addition to the
acquisition of 2D, 3D, time-lapse 4D and multi-component seismic
data on land, in transition zones and offshore in depths reaching
3,000 meters, SAE offers a full suite of data processing and
interpretation services utilizing its proprietary, patent-protected
software, and also provides in-house logistical support services,
such as program design, planning and permitting, camp services and
infrastructure, surveying, drilling, environmental assessment and
reclamation, and community relations. SAE operates crews around the
world, performing major projects for its blue-chip customer base,
which includes major integrated oil companies, national oil
companies and large independent oil and gas exploration companies.
With its global headquarters in Houston,
Texas, SAE supports its operations through a multi-national
presence in the United States,
United Kingdom, Canada, Peru,
Colombia, Bolivia, Malaysia, Singapore, and Australia. For more information, please visit
SAE's website at www.saexploration.com.
Forward Looking Statements
Except for statements of
historical fact, the matters discussed herein are "forward-looking
statements" within the meaning of the applicable U.S. federal
securities laws. The words "may," "possible," "estimates",
"expects," "believes" and similar expressions are intended to
identify forward-looking statements, although not all
forward-looking statements contain these identifying words.
Forward-looking statements, including statements regarding the
possible impact of the matters summarized in this press release,
may or may not be realized, and differences between estimated
results and those actually realized may be material.
Factors that could cause actual results to differ materially
from those in the forward-looking statements include, but are not
limited to, risks relating to the following known and unknown
things:
- the outcome of the SEC investigation, which could include
sanctions against the Company and its officers and directors, civil
lawsuits and criminal penalties;
- the impact of the restatement and conclusion of the Company
regarding the effectiveness of its internal controls and disclosure
controls and procedures, among other things;
- the outcome of the Company's own investigation into the matters
summarized in this press release;
- additional risks may arise in the process of completing the
restatement and related disclosures to be revised;
- the possible impact on payments received from the State of Alaska regarding completed tax
credits and pending applications;
- risks related to a possible delisting from the Nasdaq Capital
Market;
- risks related to the Company's debt agreements;
- the impact that the disclosure in this press release, as well
as possible future filings and disclosures may have on the
Company's business, including customers, employees and others;
- the impact of the placement on administrative leave of Mr.
Hastings and the termination of Mr. Whiteley, as summarized
above;
- the time and expense required to complete the restatement,
revised disclosures, respond to the SEC and for the Company to
complete its own investigation, which expenses are likely to be
material and are likely to have a material adverse impact on the
Company's cash balance, cash flow and liquidity; and
- other risks described more fully in the Company's filings with
the SEC that relate to matters not covered in this press
release.
Each of these risks, and the known and unknown consequences of
these risks, could have a material negative impact on the Company,
its business and prospects. As of the date of this press release,
the Company cannot make any assurances regarding the impact or
outcome of these risks. Forward-looking statements reflect the
views of the Company as of the date hereof. The Company does not
undertake to revise these statements to reflect subsequent
developments, other than in compliance with U.S. federal securities
laws and the Company's determination that any such revised
disclosure is necessary or advisable to do.
Contact:
Ryan Abney
Vice President, Finance
(281) 258-4409
rabney@saexploration.com
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SOURCE SAExploration Holdings, Inc.