ION GEOPHYSICAL CORP

ION GEOPHYSICAL CORP's exchange filed to remove a class of its securities from listing.

listing compliance notice

On May 18, 2022 NYSE Regulation moved to delist ION's common stock because its average market value over 30 trading days fell below the $15M minimum, and trading on the NYSE was suspended after the close that day. The stock may trade on the OTC Expert Market as IOGPQ. ION has a right to ask an NYSE board committee to review, and NYSE will apply to the SEC to delist after the procedures, including any appeal. This follows the Chapter 11 filing; the filing is labelled Item 2.04 but the content is a listing notice.

debt financing

ION and three subsidiaries filed voluntary Chapter 11 cases in the Southern District of Texas on Apr 12, 2022, after signing a Restructuring Support Agreement with credit facility lenders (about 100% of the loans) and holders of about 80% of the 2025 notes. This ends the forbearance talks. The plan contemplates either a debt-for-equity exchange paired with possible asset sales, or a sale of substantially all assets, funded by a $2.5M super-priority debtor-in-possession loan from some of the supporting creditors. The filing accelerated $15.6M under the credit agreement and $116.2M of 2025 notes (enforcement is stayed). The company warns shareholders could see a significant or complete loss, but the filing does not set out a specific treatment for common stock.

bankruptcy or receivership

On Apr 4, 2022 the credit facility lenders and holders of over 79% of the 2025 notes again extended forbearance on the unpaid Dec 15, 2021 interest, this time only to Apr 10, 2022. The Dec 2021 interest remains unpaid, and ION says it is still discussing a sale, business combination or asset sales, possibly in or out of court. The short extension is an inference-level sign that the talks have not been settled.

debt financing

ION extended forbearance on Feb 15, 2022 to Mar 8, then PNC sold its entire credit facility position to certain holders of the 2025 notes (assignment dated Mar 7, 2022), with Ankura Trust Company replacing PNC as agent. ION released and indemnified PNC. The new lenders, and holders of over 79% of the 2025 notes, extended forbearance on the missed Dec 15, 2021 interest to Apr 4, 2022. The senior credit facility is now held by some of the same holders as the second-priority notes, though the filing does not say what this means for the restructuring outcome.

debt financing

On Jan 31, 2022 the NYSE told ION its average closing share price had been under $1.00 for 30 trading days; the average to Jan 28, 2022 was $0.94. ION has six months to get back above $1.00, possibly longer if shareholder approval is needed, and must tell the NYSE within 10 business days whether it intends to cure. Shares keep trading, but the NYSE would start delisting steps if compliance is not restored. This is a second listing problem alongside the December 2021 market value and equity notice.

listing compliance notice

On Jan 14, 2022 ION got forbearance (a promise not to act on a default) until Feb 15, 2022 from PNC and from holders of over 79% of the 2025 notes, over the unpaid Dec 15, 2021 interest. PNC's deal waives a cross default; ION pays down $2.5M, cutting the facility commitment to $16.85M, with interest moving to a 6.25% base rate from February. The filing says ION is discussing strategic alternatives including a sale, a business combination or asset sales, in or out of court. It also furnished a press release on expected Q4 2021 revenue, but the amounts are not in this text.

debt financing

On Dec 20, 2021 the NYSE told ION it is below listing standards because its average market value is under $50M and its stockholders' equity is also under $50M. This is the same kind of notice received in March 2020, whose cure period was in the context. ION plans to tell the NYSE by Jan 4, 2022 that it will submit a plan to cure the shortfall within six months of the notice; the plan is due within 45 days, and the NYSE then has 45 days to accept or reject it. Shares keep trading meanwhile, but the filing gives no assurance the listing is kept.

listing compliance notice

ION chose not to pay the Dec 15, 2021 due date on its old 9.125% notes ($7.7M principal and interest combined) or the $4.6M interest on the 8.00% 2025 notes. The company says the 2021 notes miss does not trigger a cross default on its other debt or credit facility, and the 2025 notes carry a 30-day grace period. ION ties the deferral to the strategic alternatives review announced Sept 15, 2021, which it says may lead to transactions to improve its capital structure. This reverses the April 2021 restructuring, which was meant to settle the 2021 maturity.

debt financing

On Apr 20, 2021 ION completed the restructuring. Holders of $113.5M (about 94.1%) of the $120.6M old notes exchanged them for $84.7M of new 8.00% notes due Dec 15, 2025, 6.1M shares and $20.7M of cash. The rights offering raised $41.8M, and the backstop parties got 5% fees in kind. In total $116.2M of new notes and 10.9M shares were issued, leaving 28.8M shares outstanding, and ION expects about $14M of net proceeds. The 95% tender condition was apparently waived or reduced (inference). This resolves the 2021 maturity, but the new notes convert at about $3.00, the holder of one Series A preferred share can appoint two independent directors, and the share count is far higher than before.

capital raising announcement

On Feb 16, 2021 ION agreed to sell 2,990,001 new common shares at $3.50 each in a registered direct offering, for about $10.5M gross, to be used for working capital and general corporate purposes. A.G.P./Alliance Global Partners is placement agent and gets a 6% cash fee. This is new equity separate from the restructuring's $2.57 rights offering, and it dilutes existing shareholders.

material agreement

On Feb 11, 2021 ION signed an amended restructuring support agreement with holders of about 90% of the second lien notes, and with James Lapeyre Jr., bringing committed tenders to about 92%. It fixed the new-share deal price at $2.57 and the new notes' conversion price at $3.00 per share. ION also signed a support agreement with PNC, its revolving lender, to amend the credit agreement at closing so the new notes and cash payments can be made. This firms up the December plan; shareholder dilution is possible (inference), and the exchange has not yet closed.

debt financing

ION filed Amendment No. 1 to its S-4 for the exchange of its $120.6M 9.125% second lien notes due 2021 into new 8.00% second priority notes due 2025. Support from noteholders has grown from about 84% to about 90%, and with a separate agreement with James Lapeyre Jr. the committed tender rate is 92%, against the 95% needed. Terms are unchanged ($150 cash, $850 of new notes, and $35 in cash, stock at $2.57 or new notes), the rights offering of up to $50M continues, and dates are still blank, so nothing has closed.

business combination

On Jan 29, 2021 ION filed an S-4 registering the exchange offer from the December 2020 restructuring agreement. It offers to exchange all $120.6M of 9.125% second lien notes due 2021 for $150 cash, $850 of new 8.00% senior secured second priority notes due 2025 and $35 in cash, stock at $2.57 per share, or new notes, with up to $106.7M of new notes registered. A rights offering for up to $50M of new notes or stock at $2.57 per share is run alongside. The offer needs at least 95% of old notes tendered, and holders of about 84% have committed to tender. The filing is a preliminary prospectus with dates left blank, so nothing has closed yet. Note the filing calls the new notes 8.00% senior secured second priority notes, while the December 8-K called them convertible notes. Christopher Usher now signs as President and CEO, replacing Brian Hanson.

business combination

On Dec 23, 2020 ION signed a Restructuring Support Agreement with holders of about 84% of its 9.125% second lien notes due 2021 ($120.6M outstanding). Each $1,000 note would get $150 cash, $850 of new 8.0% second lien convertible notes due Dec 15, 2025, and $35 in cash, stock or new notes at ION's option, plus accrued interest. Shareholders would also get a rights offering for up to $50M of new convertible notes or stock. Conversion price is a 25% premium to the deal price, between $1.80 and $3.00. Noteholders get the right to name two independent directors, and ION will seek approval to raise authorized shares at a special meeting planned for February. This addresses the Dec 2021 maturity that the Aug 2018 PNC extension was conditioned on; for shareholders it means probable dilution from conversion and stock issuance (inference), and completion is still subject to conditions.

debt financing

On Apr 7, 2020 ION settled its decade-long patent lawsuit with WesternGeco. WesternGeco dismisses the suit, licenses the patents and lifts the injunction blocking US manufacture of DigiFIN. In return ION will pay from future multi-client library revenue: a small percent of 2D late sales for 10 years and a majority of ION's revenue share on the joint Mexico reimaging product. This resolves the WesternGeco litigation thread; no cash sum is stated, and the cost shows up as lost future revenue.

material agreement

On Mar 30, 2020 the NYSE told ION it is below continued listing standards because its average market cap was under $50M over 30 trading days and stockholders' equity was also under $50M. ION says its market cap was above $50M before the COVID-19 market decline. It plans to submit a plan within 45 days to regain compliance within 18 months; shares keep trading on the NYSE meanwhile, but delisting is possible if the plan is not accepted. This is a second NYSE low-value notice after the Jul 2017 one, whose outcome the earlier context did not show.

listing compliance notice

ION reported Q3 2018 results: revenue of $47.2M (down 23% from $61.1M), net loss of $7.5M ($0.54 per share), and Adjusted EBITDA of $13.0M versus $27.1M a year earlier. The company attributes the drop to the Panama license round not yet being announced, a pause in Mexico spending after the presidential election, and cautious E&P spending. Liquidity was $72.8M ($30.0M cash plus $42.8M undrawn availability on the amended $50.0M revolver). The release confirms the Feb 2018 equity offering netted $47.0M, the $28.5M third lien notes were retired and the $10.0M revolver balance repaid, leaving $120.6M of second lien notes due Dec 2021 as the main long-term debt. This resolves the open thread on repaying the 2018 notes. The filing is an earnings release; no asset was bought or sold.

asset acquisition disposition

On Aug 16, 2018 ION and PNC signed a Third Amendment to the PNC revolving credit facility. It pushes maturity from Aug 22, 2019 to Aug 16, 2023 (conditional on retiring or extending the 9.125% second lien notes due Dec 15, 2021), raises the maximum from $40.0M to $50.0M, lifts the multi-client data library borrowing limit from $15.0M to $28.5M, and adds the Mexican subsidiary as a borrower (up to $5.0M of receivables). Interest rate maximums stay at 3.00% (domestic) and 4.00% (LIBOR), with room to fall to 2.00% and 3.00% depending on leverage. This continues the PNC facility history (Aug 2014, First Amendment Aug 2015, Second Amendment Apr 2016) and gives ION more borrowing room and a later deadline, though the extension depends on dealing with the 2021 second lien notes.

debt financing

On Feb 16, 2018 ION priced an underwritten public offering of 1,820,000 shares plus warrants for 1,820,000 more shares, sold together at $27.50 per share and warrant, for expected gross proceeds of $50,050,000. The warrants are exercisable at $33.60 and expire March 21, 2019. Proceeds are meant to repay the Senior Secured Third-Priority Lien Notes due May 15, 2018 (an inference: these are the $28.5M of old notes left after the 2016 exchange), with the rest for general corporate purposes. This adds new shares and warrants for existing holders to absorb. The $27.50 price implies a reverse share split since the 2015 sub-$1 price (an inference, not stated in the filing).

material agreement

On July 20, 2017 the NYSE told ION it is below continued-listing standards because its average market value was under $50M over 30 trading days and its last reported shareholders' equity was also under $50M. ION plans to submit a plan within 45 days to regain compliance within 18 months. Shares keep trading meanwhile, but if the NYSE rejects the plan, suspension and delisting procedures would follow. This is a new listing issue, separate from the 2015 $1.00 price notice, whose outcome was not seen.

listing compliance notice

The exchange closed on April 28, 2016. ION accepted $146,503,000 of the $175M old notes (about 83.72%). It swapped $120,569,000 for the same amount of new 9.125% notes due Dec 15, 2021 plus 1,205,477 new shares, and paid $15M cash to buy back $25,934,000 of old notes. $28,497,000 of old notes remain outstanding, now with a third-priority lien and most covenants removed. ION received no cash proceeds. By simple arithmetic (an inference), note face value fell from $175M to about $149.1M, with most of it pushed out to 2021. This resolves the exchange thread.

capital raising announcement

ION formally launched the noteholder exchange agreed in February, on revised terms. Holders of the 8.125% 2018 notes get $1,000 of new 9.125% second-priority notes due 2021 plus 7 shares per $1,000, or 10 shares if tendered by April 11, 2016 (the Feb deal said 10 shares flat). The offer expires April 25, 2016, and the old notes' lien would drop to third priority rather than being removed. The $15.0M cash option (Dutch auction at $430-$600 per $1,000) is unchanged. The filing also reports that S&P cut ION to CC on March 1 because it saw the exchange as a potential selective default, and that Wilmington Savings Fund Society replaced Wilmington Trust as trustee. This continues the Support Agreement thread.

material agreement

On Feb 26, 2016 ION signed a support agreement with holders of over two-thirds of its $175M 2018 second-priority notes, who agreed to tender in a proposed exchange offer. Each $1,000 of old notes would get $1,000 of new 9.125% second-priority notes due 2021 plus ten ION common shares, with up to $15.0M cash buyback via a Dutch auction at $430-$600 per $1,000, and the old notes' collateral released. This would dilute existing shareholders through new share issuance (an inference from the ten-shares-per-note term); it needs 90% participation and is not guaranteed to close.

material agreement

The NYSE notified ION on Aug 11, 2015 that its 30-trading-day average share price ($0.98 as of Aug 7) was below the $1.00 minimum. ION has six months to regain compliance (possibly longer if shareholder approval is needed); shares keep trading meanwhile, but failing to cure would lead the NYSE to start delisting procedures.

listing compliance notice

ION cut its PNC revolver from $80.0M to $40.0M, raised borrowing margins (base-rate margin 1.50% to 2.50%; LIBOR margin 2.50% to 3.50%), added a 0.75% unused line fee, and dropped the maximum senior secured leverage covenant; nothing was drawn. The same filing carried Q2 2015 results: revenue $36.8M, adjusted net loss $44.7M, net income $56.1M helped by $100.8M of special items mainly a partial reversal of a litigation reserve, cash $117.1M. The WesternGeco lawsuit is named as a risk to results and liquidity. Brian Hanson is now President and CEO.

debt financing

On August 22, 2014, ION signed a new PNC Bank-led credit facility replacing the 2010 China Merchants Bank facility. It allows up to $175.0M in total: a $125.0M revolver (lenders committed $80.0M, with $45.0M subject to accordion provisions and a borrowing base) plus an uncommitted term facility of up to $50.0M. Nothing was drawn at filing; revolver matures at the earlier of Aug 22, 2019 or 90 days before the 2018 notes mature (unless refinanced). It is secured by substantially all assets of the borrowers and limits dividends and buybacks.

debt financing

On Nov 12, 2013 ION said its Q1 and first-half 2013 cash flow statements should no longer be relied on, because spending on its multi-client seismic data libraries was shown under operating rather than investing activities (e.g., Q1 operating cash flow restated from $34.3M to $49.6M). The company says balance sheets, income statements, cash balances and liquidity are unaffected, but it reported a material weakness in controls over cash flow statements and delayed its Q3 10-Q (expected by Nov 18, 2013). This is a new accounting issue, separate from the 2009 China sales restatement.

financial restatement

ION completed a private sale of $175M of 8.125% Senior Secured Second Priority Notes due May 15, 2018 on May 13, 2013, secured behind the China Merchants Bank credit facility and guaranteed by three US subsidiaries. Proceeds are intended to repay outstanding borrowings under that bank facility and for general purposes, including possible further capital contributions to its GeoRXT B.V. seabed seismic joint venture. ION also agreed to register an exchange offer for the notes.

security holder rights change

ION amended its March 2010 senior credit facility with China Merchants Bank (which replaced the old HSBC-led facility) on May 29, 2012. The $98.25M term loan was converted into revolving debt, total revolving capacity rose to $175.0M (from $100.0M), interest margins fell (2.5% to 1.4% and 3.5% to 2.4%), and ION Sàrl and other foreign subsidiaries were released. The INOVA JV (49% ION, with BGP) still provides a stand-by letter of credit backing ION's obligations.

debt financing

ION GEOPHYSICAL CORP terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

ION GEOPHYSICAL CORP's exchange filed to remove a class of its securities from listing.

listing compliance notice

The BGP deal closed on March 25, 2010. ION issued BGP 23,789,536 shares at $2.80 (10,204,082 from converting the domestic convertible note and 13,585,454 bought for about $38.0 million cash), leaving BGP with about 16.62% of ION. ION and BGP formed the INOVA Geophysical joint venture, with BGP taking 51%. The old bank credit facility was refinanced with a new one, and the warrant and the October 2009 registration rights agreement were terminated. BGP gets a board seat (Guo Yueliang, expected around April 1, 2010), pre-emptive rights to keep its ownership share, and a standstill until March 25, 2014. This resolves the October 2009 term sheet and the bridge financing, and existing holders are diluted by the new shares (inference).

asset acquisition disposition

On March 19 and 24, 2010 ION signed the final BGP agreements, which replace the October 2009 term sheet. BGP will buy 23,789,536 ION shares at $2.80 and 51% of the INOVA Geophysical land-equipment joint venture for $108.5 million cash plus 49% of a BGP subsidiary. Of the shares, 10,204,082 come from converting the $28.6 million domestic convertible note (now assigned from Bank of China to BGP) and 13,585,454 are bought for about $38.0 million cash. BGP would hold about 16.62% of ION and may nominate a director. A new bank credit facility will refinance the existing one at closing, expected around March 25, 2010. This continues and firms up the October 2009 deal.

material agreement termination

ION said its unaudited second-quarter 2009 results can no longer be relied on and will be restated. It had booked revenue on a FireFly land seismic system sale in China that should not have been recognized, because a sales employee did not forward all the documentation. This lowers Q2 revenue by about $11.3 million and widens the Q2 operating loss from about $0.2 million to $7.5 million. About $3.3 million of extra stock compensation expense for 2006-2008 is also included. The problem surfaced during due diligence for the BGP deal; the customer has accepted the system and payment is expected in Q4 2009. A 10-Q/A is expected by November 9, 2009, and Ernst & Young has not audited the adjustments.

financial restatement

On October 23, 2009 ION signed a binding term sheet with BGP (a China National Petroleum Corporation subsidiary and long-time customer) for a joint venture in ION's land-based seismic equipment business. BGP would pay $108.5 million cash for 51% of the JV, buy shares at $2.80 to reach 19.99% held with any shares from the bridge loan and warrant, and arrange a new $100.0 million credit line and a refinancing of the term loan (about $106.3 million outstanding at Sept 30, 2009). Alongside, the sixth credit amendment raised the revolver from $100.0 million to $140.0 million, added Bank of China as a lender, and relaxed or waived some covenants. ION drew a $40.0 million convertible bridge loan from Bank of China on Oct 27, 2009 and issued BGP a warrant. Closing is subject to US and Chinese approvals including CFIUS review, with an outside date of March 31, 2010 and a $5.0 million break-up fee for either side. This follows the mid-2009 financing scramble (Jefferies bridge repaid, share placement, ICON loan) and is a new strategic partner. Existing holders face dilution (inference).

capital raising announcement

ION's ARAM subsidiaries took a $20.0 million secured equipment loan from ICON ION, LLC ($12.5 million advanced June 29, 2009, up to $7.5 million more due July 17), secured by ARAM seismic rental equipment and guaranteed by ION. It carries a fixed 15% interest rate, matures July 31, 2014, and is for working capital and general corporate purposes. This is the optional equipment financing the credit amendment had allowed.

debt financing

On June 9, 2009 ION repaid the full $40.8 million Jefferies Bridge Loan (due January 31, 2010), using about $3.0 million of cash and about $38.0 million from the share sale. This closes out the bridge debt from the 2008 ARAM acquisition financing.

material agreement termination

ION agreed to sell 18,500,000 new shares at $2.20 each (about $40.7 million gross, about $38.0 million net) to seven investors, versus a $3.04 closing price that day, to repay the Jefferies bridge loan along with about $3.0 million of cash. It also amended its bank credit agreement (fifth amendment) with looser financial covenants and higher interest margins if leverage exceeds 2.25 to 1.0. The filing says management expected it would probably breach covenants by September 30, 2009 without action. Existing shareholders face dilution from the new shares (inference).

capital raising announcement

the New York Stock Exchange certified ION GEOPHYSICAL CORP's securities for listing, clearing them to begin trading.

listing compliance notice

ION refinanced the debt taken on for the September 2008 ARAM acquisition: a new $40.8 million Bridge Loan from Jefferies replaced the short-term note, the $35.0 million senior seller note was restated as a subordinated note now due September 2013 (previously September 2009), and the $10.0 million subordinated seller note was cancelled in exchange for a Canadian tax refund claim. The planned $175 million senior notes offering could not be completed because of credit market conditions, so ION repaid $72.0 million of revolver debt from its own cash. The senior credit facility was amended again, including higher interest margins (175 to 287.5 basis points) and permission to adopt a shareholder rights plan. The $35.0 million purchase price escrow was ended and the sellers released from certain indemnity obligations.

security holder rights change

ION's 20-day average share price ($4.3280) fell below the $4.4517 minimum in its agreement with Fletcher International, which holds all of its Series D preferred stock. ION chose to reset the conversion price to $4.4517 and end Fletcher's right to redeem the preferred, so dividends must now be paid in cash. Fletcher also gave notice raising the cap on shares it can receive to 9,669,434 from Feb 1, 2009 (about 8.85% of outstanding common stock).

security holder rights change