Item 8.01 Other Events.
On November 5, 2020, SAExploration Holdings, Inc. (the "Company") and the United
States Securities and Exchange Commission (the "SEC") filed with the United
States District Court for the Southern District of New York (the "Court") a
joint motion for entry of a consent judgment (the "Motion") and the Company's
consent (the "Consent") to resolve all allegations pertaining to the Company
with respect to the Civil Complaint described below. Pursuant the Consent,
without admitting or denying the allegations of the Civil Complaint, the Company
consented to the entry of a final judgment (the "Proposed Judgment") that
permanently enjoins it from violating the sections of the federal securities
laws listed in the Civil Complaint, but that does not impose any monetary
penalty on the Company. The Proposed Judgment, when entered, will resolve all
allegations pertaining to the Company with respect to the Civil Complaint.
As previously reported, the SEC has been conducting an investigation of certain
matters, including with respect to revenue recognition, accounts receivable and
tax credits. The Department of Justice (the "DOJ") is conducting a parallel
investigation with the SEC. The Company has been cooperating and intends to
continue to cooperate with the SEC and the DOJ in their litigations and/or
investigations.
On October 8, 2020, the SEC filed a complaint against the Company and its former
executive officers Jeffrey Hastings, Brent Whiteley, Brian Beatty, and Michael
Scott (the "Former Executives") in the Court captioned U.S. Securities and
Exchange Commission, v. SAExploration Holdings, Inc. et al. Civil Action No.
1:20-CV-8423 (the "Civil Complaint") arising out of the actions of the Former
Executives, which ultimately lead to the previously reported restatement of the
Company's financial statements. The Civil Complaint charged the Company and
charges the Former Executives with violating Section 17(a)(1) and (3) of the
Securities Act and Section 10(b) of the Exchange Act, and Rule 10b-5(a) and (c)
thereunder. It further charged the Company with violating Securities Act Section
17(a)(2) and Exchange Act Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), and
Rules 10b-5(b), 12b-20, 13a-1, 13a-11, 13a-13 thereunder, and that the Former
Executives aided and abetted those violations. Additionally, the Civil Complaint
charges the Former Executives with violating Exchange Act Section 13(b)(5) and
Rule 13b2-1 thereunder, and Messrs. Hastings, Whiteley, and Beatty with also
violating Exchange Act Rules 10b-5(b), 13a-14, and 13b2-2. The SEC sought a
permanent injunction against the Company from violating the aforementioned
provisions, but did not seek any monetary relief against the Company. From the
Former Executives, the SEC seeks permanent injunctions as well as civil
penalties, disgorgement of allegedly ill-gotten gains with prejudgment interest,
and officer-and-director bars against each of them. Additionally, the SEC seeks
to have Messrs. Hastings, Whiteley, and Beatty reimburse the Company for
incentive-based compensation pursuant to Section 304(a) of the Sarbanes-Oxley
Act of 2002. The DOJ also announced criminal charges against Mr. Hastings in a
parallel action on the same day.
The foregoing description of the Motion, Consent and Proposed Judgment
referenced above is qualified in its entirety by reference to such documents,
which are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively, and are
incorporated herein by reference.
Forward-Looking Statements
This Current Report includes information that constitutes forward-looking
statements. Such forward-looking statements often contain words such as
"believe," "expect," "anticipate," "intend," or "will," although not all
forward-looking statements contain these identifying words. By their nature,
forward-looking statements address matters that are subject to risks and
uncertainties. Examples of such forward-looking statements include, but are not
limited to, statements of the Company's expectations regarding the matters
described above.
These forward-looking statements are based on our current beliefs, assumptions
and expectations concerning future events, which, in turn, are based on
information currently available to the Company. Such forward-looking statements
include actions taken by the Company, the SEC or the Court with respect to the
matters covered by this Current Report. Although the Company believes that the
expectations underlying any of these forward-looking statements are reasonable,
these expectations may prove to be incorrect and all of these statements are
subject to risks and uncertainties. A variety of factors could cause actual
events or results to differ materially from those expressed or contemplated by
the forward-looking statements including, without limitation, additional
information that may become known to the Company in connection with the matters
that are the subject of this Current Report or that subsequent events may occur
that require the Company to take additional action with respect thereto.
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All forward-looking statements included in this Current Report are expressly
qualified in their entirety by these cautionary statements and the Company
undertakes no obligation to publicly update or revise any forward-looking
statement except to the extent required by applicable securities laws.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 Joint Motion for Entry of Consent Judgment Submitted by Plaintiff
Securities and Exchange Commission and Defendant SAExploration Holdings,
Inc. filed November 5, 2020
99.2 Consent of Defendant SAExploration Holdings, Inc. filed November 5,
2020
99.3 Proposed Judgment as to Defendant SAExploration Holdings, Inc.
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