Dawson Geophysical (DWSN) 10-Q 6 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 04, 2015
Document and Entity Information
Entity Registrant Name	DAWSON GEOPHYSICAL CO
Entity Central Index Key	799,165
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		21,571,513
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 39,015,000	$ 14,644,000
Short-term investments	19,250,000	28,750,000
Accounts receivable, net of allowance for doubtful accounts of $250,000 at September 30, 2015 and December 31, 2014	37,443,000	37,133,000
Prepaid expenses and other assets	5,769,000	5,703,000
Current deferred tax asset	2,131,000	2,818,000
Total current assets	103,608,000	89,048,000
Property, plant and equipment	357,420,000	339,245,000
Less accumulated depreciation	(203,274,000)	(181,453,000)
Net property, plant and equipment	154,146,000	157,792,000
Intangibles, net	2,537,000
Total assets	260,291,000	246,840,000
Current liabilities:
Accounts payable	8,929,000	5,849,000
Accrued liabilities:
Payroll costs and other taxes	2,303,000	3,015,000
Other	4,911,000	3,158,000
Deferred revenue	6,705,000	1,752,000
Current maturities of notes payable and obligations under capital leases	8,158,000	6,018,000
Total current liabilities	31,006,000	19,792,000
Long-term liabilities:
Notes payable and obligations under capital leases less current maturities	4,025,000	4,209,000
Deferred tax liability	10,008,000	28,621,000
Other accrued liabilities	456,000
Total long-term liabilities	$ 14,489,000	$ 32,830,000
Commitments and contingencies
Stockholders' equity:
Preferred stock-par value $1.00 per share; 4,000,000 shares authorized, none outstanding
Common stock-par value $0.01 per share: 35,000,000 shares authorized, 21,571,513 and 14,216,540 issued and outstanding at September 30, 2015 and December 31, 2014, respectively	$ 216,000	$ 142,000
Additional paid-in capital	141,891,000	99,084,000
Retained earnings	73,997,000	95,336,000
Accumulated other comprehensive loss, net of tax	(1,308,000)	(344,000)
Total stockholders' equity	214,796,000	194,218,000
Total liabilities and stockholders' equity	$ 260,291,000	$ 246,840,000

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS
Allowance for doubtful accounts	$ 250,000	$ 250,000
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized	4,000,000	4,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	35,000,000	35,000,000
Common stock, shares issued	21,571,513	14,216,540
Common stock, shares outstanding	21,571,513	14,216,540
Treasury stock, shares	48,445	0

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Operating revenues	$ 62,498,000	$ 62,570,000	$ 179,555,000	$ 193,502,000
Operating costs:
Operating expenses	50,195,000	54,529,000	158,385,000	164,228,000
General and administrative	4,999,000	4,710,000	18,142,000	11,919,000
Depreciation and amortization	11,966,000	9,862,000	35,569,000	30,292,000
Operating expenses, total	67,160,000	69,101,000	212,096,000	206,439,000
Loss from operations	(4,662,000)	(6,531,000)	(32,541,000)	(12,937,000)
Other income (expense):
Interest income	35,000	19,000	84,000	56,000
Interest expense	(155,000)	(106,000)	(492,000)	(400,000)
Other income	502,000	417,000	515,000	515,000
Loss before income tax	(4,280,000)	(6,201,000)	(32,434,000)	(12,766,000)
Income tax benefit	1,410,000	2,319,000	11,095,000	3,043,000
Net loss	(2,870,000)	(3,882,000)	(21,339,000)	(9,723,000)
Other comprehensive loss:
Net unrealized loss on foreign exchange rate translation, net of tax	(890,000)	(152,000)	(964,000)	(217,000)
Comprehensive loss	$ (3,760,000)	$ (4,034,000)	$ (22,303,000)	$ (9,940,000)
Basic loss per share attributable to common stock	$ (0.13)	$ (0.28)	$ (1.05)	$ (0.70)
Diluted loss per share attributable to common stock	$ (0.13)	(0.28)	$ (1.05)	(0.70)
Cash dividend declared per share of common stock		$ 0.08		$ 0.24
Weighted average equivalent common shares outstanding	21,571,513	14,011,789	20,386,202	14,010,557
Weighted average equivalent common shares outstanding-assuming dilution	21,571,513	14,011,789	20,386,202	14,010,557

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (21,339,000)	$ (9,723,000)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	35,569,000	30,292,000
Noncash compensation	794,000	821,000
Deferred income tax benefit	(11,086,000)	(4,249,000)
Loss (gain) on disposal of assets	1,392,000	(225,000)
Other	431,000	(75,000)
Change in current assets and liabilities:
Decrease in accounts receivable	(14,141,000)	(15,659,000)
Decrease in prepaid expenses and other assets	(1,684,000)	(1,850,000)
(Decrease) increase in accounts payable	(2,787,000)	860,000
Decrease in accrued liabilities	(2,100,000)	(871,000)
Increase (decrease) in deferred revenue	1,179,000	(2,184,000)
Net cash provided by operating activities	17,878,000	32,155,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired from Merger	12,382,000
Capital expenditures, net of noncash capital expenditures summarized below	(5,123,000)	(11,446,000)
Proceeds from maturity of short-term investments	21,500,000	21,250,000
Acquisition of short-term investments	(12,000,000)	(22,250,000)
Proceeds from disposal of assets	1,094,000	2,682,000
Net cash provided by (used in) investing activities	17,853,000	(9,764,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from promissory note	5,144,000
Principal payments on notes payable	(14,152,000)	(8,510,000)
Principal payments on capital lease obligations	(1,165,000)	(726,000)
Excess tax benefit from share-based payment arrangement	(567,000)
Tax withholdings related to stock based compensation awards	(248,000)
Proceeds from exercise of stock options		18,000
Dividends paid		(1,935,000)
Net cash used in financing activities	(10,988,000)	(11,153,000)
Effect of exchange rate changes in cash and cash equivalents	(372,000)	(345,000)
Net increase in cash and cash equivalents	24,371,000	10,893,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	14,644,000	11,860,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD	39,015,000	22,753,000
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	491,000	420,000
Cash paid for income taxes	721,000	735,000
Cash received for income taxes	706,000
NONCASH INVESTING AND FINANCING ACTIVITIES:
Increase (decrease) in accrued purchases of property and equipment	136,000	(2,046,000)
Capital lease obligations incurred	126,000	$ 485,000
Stock consideration to consummate the Merger	$ 42,902,000

ORGANIZATION AND NATURE OF OPER

ORGANIZATION AND NATURE OF OPERATIONS	9 Months Ended
	Sep. 30, 2015
ORGANIZATION AND NATURE OF OPERATIONS
ORGANIZATION AND NATURE OF OPERATIONS	1. ORGANIZATION AND NATURE OF OPERATIONS Founded in 1952, the Company acquires and processes 2-D, 3-D and multi-component seismic data for its clients, ranging from major oil and gas companies to independent oil and gas operators as well as providers of multi-client data libraries.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation In the opinion of management of the Company, the accompanying unaudited financial statements reflect all adjustments, consisting only of normal recurring accruals, necessary for a fair statement of the results for the periods presented. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q report pursuant to certain rules and regulations of the Securities and Exchange Commission (the “SEC”). These financial statements should be read with the financial statements and notes included in Exhibit 99.1 to the Company’s Form 8-K/A filed with the SEC on April 30, 2015. As discussed more fully in Note 3, on February 11, 2015, Legacy Dawson completed the merger with a wholly-owned subsidiary of Legacy TGC (“Merger Sub”), with Legacy Dawson continuing after the merger as the surviving entity and a wholly-owned subsidiary of Legacy TGC (the “Merger”). The Merger was accounted for as a purchase of Legacy TGC by Legacy Dawson in a “reverse acquisition” because the existing shareholders of Legacy TGC prior to the Merger did not have voting control of the combined entity after the Merger. In a reverse acquisition, the accounting treatment differs from the legal form of the transaction, as the continuing legal parent entity, Legacy TGC, is not assumed to be the acquirer and the financial statements of the combined entity are those of the accounting acquirer, Legacy Dawson, including any comparative prior year financial statements presented by the combined entity. Accordingly, the financial results of the Company for the three months ended September 30, 2015 presented in this Form 10-Q are compared to the results for Legacy Dawson for the three months ended September 30, 2014. The financial results for the nine months ended September 30, 2015 presented in this Form 10-Q reflect the operations of Legacy Dawson for the period January 1 through February 11, 2015 and the operations of the merged entity for the period February 12 through September 30, 2015. Such results are compared to the results for Legacy Dawson for the period January 1 through September 30, 2014. Additionally, all historical equity accounts and awards of Legacy Dawson, including par value per share, share and per share numbers, have been adjusted to reflect the number of shares received in the Merger. Further, in connection with the Merger, Legacy Dawson changed its fiscal year end from September 30 to December 31. The Company’s 2015 fiscal year will cover the period from January 1, 2015 through December 31, 2015. Significant Accounting Policies The preparation of the Company’s financial statements in conformity with generally accepted accounting principles requires that certain assumptions and estimates be made that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Because of the use of assumptions and estimates inherent in the reporting process, actual results could differ from those estimates. Principles of Consolidation. The consolidated financial statements for the three and nine months ended September 30, 2014 include the accounts of Legacy Dawson and its wholly-owned subsidiaries, Dawson Seismic Services Holdings, Inc. and Eagle Canada Seismic Services ULC, which was formerly known as Dawson Seismic Services ULC (collectively, the “Legacy Dawson Subsidiaries”). The consolidated financial statements for the three months ended September 30, 2015 include the accounts of the merged entity, including Legacy Dawson and the Legacy Dawson Subsidiaries, together with Tidelands Geophysical Co., Inc., Exploration Surveys, Inc. and Eagle Canada, Inc. (collectively, the “Legacy TGC Subsidiaries”). The consolidated financial statements for the nine months ended September 30, 2015 include (i) the accounts of Legacy Dawson and the Legacy Dawson Subsidiaries for the fiscal period from January 1, 2015 through February 11, 2015 and (ii) the accounts of the merged entity, including Legacy Dawson, the Legacy Dawson Subsidiaries and the Legacy TGC Subsidiaries for the fiscal period from February 12, 2015 through September 30, 2015. All significant intercompany balances and transactions have been eliminated in consolidation. Cash Equivalents. The Company considers demand deposits, certificates of deposit, overnight investments, money market funds and all highly liquid debt instruments purchased with an initial maturity of three months or less to be cash equivalents. Allowance for Doubtful Accounts. Management prepares its allowance for doubtful accounts receivable based on its review of past-due accounts, its past experience of historical write-offs and its current client base. While the collectability of outstanding client invoices is continually assessed, the inherent volatility of the energy industry’s business cycle can cause swift and unpredictable changes in the financial stability of the Company’s clients. Property, Plant and Equipment. As discussed more fully in Note 3, the Merger was accounted for as a reverse acquisition, and the Company accounted for the transaction by using Legacy Dawson’s historical information and accounting policies and adding the assets and liabilities of Legacy TGC as of the completion date of the Merger at their respective fair values. As a result, Legacy Dawson’s property, plant and equipment is capitalized at historical cost and depreciated over the useful life of the assets and Legacy TGC’s property, plant and equipment is capitalized at its estimated fair values as of the merger date and depreciated over the remaining useful life of the assets. Management’s estimation of the useful life of assets is based on circumstances that exist in the seismic industry and information available at the time of the purchase of the asset. As circumstances change and new information becomes available, these estimates could change. Depreciation is computed using the straight-line method. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the consolidated balance sheet, and any resulting gain or loss is reflected in the results of operations for the period. For purposes of measuring the estimated fair value of the Legacy TGC assets acquired in the Merger, the Company used the guidance in Accounting Standards Codification (“ASC”) No. 820, “Fair Value Measurement and Disclosure.” ASC No. 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, under ASC No. 820, fair value measurements for an asset assume the highest and best use of that asset by market participants. As a result, the Company may be required to value assets of Legacy TGC at fair value measures that do not reflect the Company’s intended use of those assets. Use of different estimates and judgments could yield different results. Impairment of Long-lived Assets. Long-lived assets are reviewed for impairment when triggering events occur that suggest deterioration in the assets’ recoverability or fair value. Recognition of an impairment charge is required if future expected undiscounted net cash flows are insufficient to recover the carrying value of the assets and the fair value of the assets is below the carrying value of the assets. Management’s forecast of future cash flows used to perform impairment analysis includes estimates of future revenues and expenses based on the Company’s anticipated future results while considering anticipated future oil and natural gas prices, which is fundamental in assessing demand for the Company’s services. If the carrying amounts of the assets exceed the estimated expected undiscounted future cash flows, the Company measures the amount of possible impairment by comparing the carrying amount of the assets to the fair value. Although the Company does not currently anticipate an impairment of its assets, if oil and natural gas prices remain at current levels for an extended period of time or decline further, the Company may be exposed to impairment charges in future periods, which could negatively affect the Company’s results of operations in a material manner in the period in which they are recorded. Leases. The Company leases certain equipment and vehicles under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. Any lease that does not meet the criteria for a capital lease is accounted for as an operating lease. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair market value of the related assets. Assets under capital leases are amortized using the straight-line method over the initial lease term. Amortization of assets under capital leases is included in depreciation expense. Intangibles. Acquired customer relationships and backlog are capitalized and amortized over useful lives ranging from five months to five years using the straight-line method of amortization. Amortization of intangibles is included in depreciation expense. Trademarks/tradenames resulting from a business combination are not subject to amortization. The Company tests for impairment on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Revenue Recognition . Services are provided under cancelable service contracts. These contracts are either “turnkey” or “term” agreements. Under both types of agreements, the Company recognizes revenues when revenue is realizable and services have been performed. Services are defined as the commencement of data acquisition or processing operations. Revenues are considered realizable when earned according to the terms of the service contracts. Under turnkey agreements, revenue is recognized on a per unit of data acquired rate as services are performed. Under term agreements, revenue is recognized on a per unit of time worked rate as services are performed. In the case of a cancelled service contract, revenue is recognized and the customer is billed for services performed up to the date of cancellation. The Company receives reimbursements for certain out-of-pocket expenses under the terms of the service contracts. Amounts billed to clients are recorded in revenue at the gross amount, including out-of-pocket expenses that are reimbursed by the client. In some instances, customers are billed in advance of services performed. In those cases, the Company recognizes the liability as deferred revenue. As services are performed, those deferred revenue amounts are recognized as revenue. In some instances, the contract contains certain permitting, surveying and drilling costs that are incorporated into the per unit of data acquired rate. In these circumstances, these set up costs that occur prior to initiating revenue recognition are capitalized and amortized as services are provided. Stock-Based Compensation. The Company measures all employee stock-based compensation awards, which include restricted stock, restricted stock units, stock options and common stock awards, using the fair value method and recognizes compensation cost, net of estimated forfeitures, in its consolidated financial statements. The Company records compensation expense as operating or general and administrative expense, as appropriate, in the consolidated statements of operations and comprehensive loss on a straight-line basis over the vesting period of the related restricted stock awards or stock options. Foreign Currency Translation. The U.S. Dollar is the reporting currency for all periods presented. The functional currency of the Company’s foreign subsidiaries is generally the local currency. All assets and liabilities denominated in a foreign currency are translated into U.S. Dollars at the exchange rate on the balance sheet date. Income and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. Adjustments resulting from translation are recorded as a separate component of accumulated other comprehensive loss in the consolidated balance sheets. Foreign currency gains (losses) are included in the consolidated statements of operations and comprehensive loss. Income Taxes. The Company accounts for income taxes by recognizing amounts of taxes payable or refundable for the current year and by using an asset and liability approach in recognizing the amount of deferred tax assets and liabilities for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Management determines deferred taxes by identifying the types and amounts of existing temporary differences, measuring the total deferred tax asset or liability using the applicable tax rate in effect for the year in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the year of an enacted rate change. The deferred tax asset is reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. Management’s methodology for recording income taxes requires judgment regarding assumptions and the use of estimates, including determining the annual effective tax rate and the valuation of deferred tax assets, which can create variances between actual results and estimates and could have a material impact on the Company’s provision or benefit for income taxes. The Company’s effective tax rates differ from the statutory federal rate of 35% for certain items such as state and local taxes, non-deductible expenses, discrete items and expenses related to share-based compensation that were not expected to result in a tax deduction. Use of Estimates in the Preparation of Financial Statements. Preparation of the accompanying financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Because of the use of assumptions and estimates inherent in the reporting process, actual results could differ from those estimates. Reclassifications. Certain reclassifications have been made to the 2014 consolidated financial statements to conform to the 2015 presentation. Recently Issued Accounting Pronouncements In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, “Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). ASU 2015-16 eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. The guidance is effective for public entities for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2015-16 during the quarter ended September 30, 2015. The adoption of ASU 2015-16 did not materially affect the Company’s consolidated results of operations, statement of financial position or financial statement disclosures. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern” (Subtopic 205-40). This ASU provides guidance on management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and in certain circumstances to provide related footnote disclosures. This ASU is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the new guidance and does not expect any material impact on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted, but only for fiscal years beginning after December 15, 2016. Entities have the option of using either a full retrospective or modified approach to adopt ASU 2014-09. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements and the method of adoption.

MERGER

MERGER	9 Months Ended
	Sep. 30, 2015
MERGER
MERGER	3. MERGER On February 11, 2015, the Company completed the Merger. Immediately prior to the effective time of the Merger, Legacy TGC effected a reverse stock split with respect to its common stock, par value $0.01 per share (“Legacy TGC Common Stock”), on a one-for-three ratio (the “Reverse Stock Split”) to reduce the total number of shares of Legacy TGC Common Stock outstanding. After giving effect to the Reverse Stock Split, at the effective time of the Merger, without any action on the part of any shareholder, each issued and outstanding share of Legacy Dawson’s common stock, par value $0.33-1/3 per share (the “Legacy Dawson Common Stock”), including shares underlying Legacy Dawson’s outstanding equity awards (but excluding any shares of Legacy Dawson Common Stock owned by Legacy TGC, Merger Sub or Legacy Dawson or any wholly-owned subsidiary of Legacy Dawson), were converted into the right to receive 1.760 shares of Legacy TGC Common Stock (the “Exchange Ratio”). As described in Notes 2 a nd 3, the Merger was accounted for as a reverse acquisition under the acquisition method of accounting in accordance with ASC No. 805, “Business Combinations.” The Company accounted for the transaction by using Legacy Dawson’s historical information and accounting policies and adding the assets and liabilities of Legacy TGC at their respective fair values. Consequently, Legacy Dawson’s assets and liabilities retained their carrying values and Legacy TGC’s assets acquired and liabilities assumed by Legacy Dawson as the accounting acquirer in the Merger were recorded at their fair values measured as of February 11, 2015, the effective date of the Merger. The Company continues to evaluate the available information, and the purchase price allocation is subject to finalization of the Company’s analysis of the fair value of the assets and liabilities of Legacy TGC as of the effective date of the Merger. Accordingly, the purchase price allocation is preliminary and will be adjusted upon completion of the final valuation. Such adjustments could be material. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the Merger date: Estimated Fair Value (in 000’s) Stock consideration $ Interest bearing debt assumed Debt-free current liabilities Total purchase price consideration including liabilities assumed $ Value of Current Assets Current assets excluding cash and cash equivalents $ Cash and cash equivalents Total current assets $ Identified tangible assets Fair value of property, plant and equipment $ Total identified tangible assets $ Identified intangible assets Trademarks/trade names $ Customer relationships Backlog Total identified intangible assets $ Net deferred tax asset $ Total indicated value of assets $ The value of the stock consideration was determined based on the $5.85 closing price of Legacy TGC on the February 11, 2015 closing date and the 7,333,708 shares outstanding. As a result of the consideration transferred being less than the book value of net assets acquired, the Company was required to analyze the purchase price allocation and the potential reasonableness of reflecting a bargain purchase. Upon completing this analysis, the Company determined that the Merger was not an acquisition of a distressed business or a bargain purchase and accordingly reflected a substantial reduction in the property, plant and equipment to its fair value which was reflected by the value of the consideration transferred. Furthermore, in allocating the remainder of the purchase price to the indicated fair value of the property, plant and equipment, there was not any excess purchase price to be allocated to goodwill. Measurements used to determine fair value were deemed to be level 3 fair value measurements. Trade receivables and payables, as well as other current and non-current assets and liabilities were valued at the existing carrying values as they represented the fair value of those items at the time of the Merger, based on management’s judgments and estimates. Property , plant and equipment were valued using a combination of the income approach, the market approach and the cost approach which was based on current replacement and/or reproduction cost of the asset as new, less depreciation attributable to physical, functional, and economic factors. Useful lives of the property, plant and equipment were estimated to be between 2 and 15 years. Trademarks were valued using the relief from royalty method. Relief from royalty method under the income approach estimates the cost savings that accrue to the Company which would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. Trademarks are considered to have an indefinite life and as a result are not amortizable. Customer relationships and backlog were valued using the excess earnings method, where estimated margins, customer attrition, and contributory asset charge assumptions are used. The useful lives of customer relationships were estimated to be 5 years, and the estimated useful weighted average life of backlog was expected to be 5 months. At September 30, 2015, the gross carrying value of our customer relationships was approximately $1,799,000 and the accumulated amortization was approximately $206,000 and the gross carrying value of our backlog was approximately $491,000 and the accumulated amortization was approximately $491,000. Existing long term debt assumed in the Merger was recorded at fair valued based on a current market rate. Deferred income tax assets and liabilities as of the acquisition date represent the expected future tax consequences of temporary differences between the fair values of the assets acquired and liabilities assumed and their tax bases. At the acquisition date, the Company accrued $750,000 for contingencies related to certain tax matters. The Company incurred approximately $2,885,000 in merger-related costs on a pretax basis during the nine months ended September 30, 2015. The Company also incurred $1,198,000 related to severance and compensation arrangements pursuant to existing agreements with certain former employees in connection with the Merger. These amounts are reflected in the accompanying consolidated statements of operations and comprehensive loss. The Company has integrated the operations of Legacy TGC since the end of the first quarter, including the integration of revenue and payables reporting. Additionally, the Company operates in one segment and has a single company-wide management team that administers all service contracts as a whole rather than by discrete operating segments. The Company tracks only basic operational data by area and does not track results by legacy origin. Therefore, it is impracticable to disclose the amount of revenues and earnings or losses attributable to Legacy TGC during the three and nine months ended September 30, 2015. Pro Forma Information The following unaudited pro forma condensed financial information for the three and nine months ended September 30, 2015 and 2014 gives effect to the Merger as if it had occurred on January l, 2014. The unaudited pro forma condensed financial information has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the transactions taken place on the dates indicated and is not intended to be a projection of future results. The unaudited pro forma financial information reflects certain adjustments related to the acquisition, such as (1) to record certain incremental expenses resulting from purchase accounting adjustments, such as reduced depreciation and amortization expense in connection with the fair value adjustments to property, plant and equipment, and intangible assets; and (2) to record the related tax effects. Shares used in the calculations of earnings per share in the table below were 21,571,513 and 21,262,566 for the three months ended September 30, 2015 and 2014, respectively, and 21,521,707 and 21,306,724 for the nine months ended September 30, 2015 and 2014, respectively. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Pro forma total revenues $ $ $ $ Pro forma net loss $ ) $ ) $ ) $ ) Pro forma net loss per share Basic $ ) $ ) $ ) $ ) Diluted $ ) $ ) $ ) $ )

SHORT-TERM INVESTMENTS

SHORT-TERM INVESTMENTS	9 Months Ended
	Sep. 30, 2015
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS	4. SHORT-TERM INVESTMENTS The Company had short-term investments at September 30, 2015 and December 31, 2014 consisting of certificates of deposit with original maturities greater than three months, but less than a year. Certificates of deposit are limited to one per banking institution and no single investment exceeded the FDIC insurance limit at September 30, 2015 or December 31, 2014.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	9 Months Ended
	Sep. 30, 2015
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS	5. FAIR VALUE OF FINANCIAL INSTRUMENTS At September 30, 2015 and December 31, 2014, the Company’s financial instruments included cash and cash equivalents, short-term investments in certificates of deposit, trade and other receivables, other current assets, accounts payable, other current liabilities and term notes (defined below). Due to the short-term maturities of cash and cash equivalents, trade and other receivables, other current assets, accounts payable and other current liabilities, the carrying amounts approximate fair value at the respective balance sheet dates. The carrying value of the term notes approximate their fair value based on a comparison with the prevailing market interest rate. Due to the short-term maturities of the Company’s investments in certificates of deposit, the carrying amounts approximate fair value at the respective balance sheet dates. The fair values of the Company’s term notes and investments in certificates of deposit are level 2 measurements in the fair value hierarchy.

DEBT

DEBT	9 Months Ended
	Sep. 30, 2015
DEBT
DEBT	6. DEBT Legacy Dawson and Legacy TGC each had a credit agreement in effect prior to the Merger (the “Legacy Dawson Credit Agreement” and the “Legacy TGC Credit Agreement,” respectively), which continued in effect as obligations of the Company following the Merger. On June 30, 2015, the Company entered into an amendment to the Legacy TGC Credit Agreement (as amended, the “Existing Credit Agreement”) for the purpose of renewing, extending and increasing the Company’s line of credit under such agreement. In connection with the amendment to the Legacy TGC Credit Agreement, the Company repaid in full and terminated the Legacy Dawson Credit Agreement and its master advance term note agreement in connection therewith (collectively, the “Legacy Dawson Credit Facilities”). Legacy Dawson Credit Agreement The Legacy Dawson Credit Facilities provided for a revolving line of credit and term loans to be made pursuant to notes. The Company did not utilize the line of credit available under the Legacy Dawson Credit Facilities prior to the termination of the Legacy Dawson Credit Facilities. Prior to termination of the Legacy Dawson Credit Facilities, the Company had three outstanding notes payable under the term loan feature of the Legacy Dawson Credit Agreement, which represented a remaining aggregate principal amount of $8,577,000 as of December 31, 2014. Interest on amounts outstanding under the Legacy Dawson Credit Agreement accrued at an annual rate equal to either the 30-day London Interbank Offered Rate (“LIBOR”), plus two and one-quarter percent, or the Prime Rate, minus three-quarters percent, as the Company directed monthly, subject to an interest rate floor of 4%. All amounts owed under the Legacy Dawson Credit Facilities were repaid using proceeds of the New Term Loan (as defined below) and totaled approximately $5,144,000. Existing Credit Agreement The Company has one outstanding note payable at September 30, 2015 under the term loan feature of the Existing Credit Agreement with a principal amount of $4,286,000. In addition, the Company has three outstanding notes payable that are not under the term loan feature of the Existing Credit Agreement, representing a remaining aggregate principal amount of $6,312,000 as of September 30, 2015. The Existing Credit Agreement also permits the Company to borrow, repay and re-borrow, from time to time until June 30, 2017, up to the lesser of $20.0 million or 80% of the Company’s eligible accounts receivable less the then-outstanding principal balance of the New Term Loan (the “Existing Line of Credit”). The term “New Term Loan” means the term loan entered into as of June 30, 2015 pursuant to a promissory note in the principal amount of $5,144,000. The Company has not utilized the Existing Line of Credit during the current year and has the full Existing Line of Credit available for borrowing. The Company’s obligations under the Existing Line of Credit are secured by a security interest in the Company’s accounts receivable, and the term notes are secured by certain of the Company’s core equipment. Interest on amounts outstanding under the Existing Credit Agreement accrues at the lesser of 4.5% or the prime rate (as quoted in the Wall Street Journal ), subject to an interest rate floor of 2.5%. The Existing Credit Agreement contains customary covenants for credit facilities of this type, including limitations on disposition of assets, mergers and other fundamental changes. The Company is also obligated to meet certain financial covenants, including (i) a ratio of (x) total liabilities minus subordinated debt to (y) tangible net worth plus subordinated debt not to exceed 1.00:1.00, (ii) a ratio of current assets to current liabilities of at least 1.50:1.00 and (iii) required tangible net worth of not less than $150,000,000. The Company was in compliance with all covenants under the Existing Credit Agreement, including specified ratios, as of September 30, 2015. Other Indebtedness The Company has one outstanding note, in the remaining principal amount of $11,000 at September 30, 2015 payable to a finance company for insurance. This note was paid off in October 2015. In addition, the Company leases vehicles and certain specialized seismic equipment under leases classified as capital leases. The Company’s balance sheet as of September 30, 2015 and December 31, 2014 includes capital lease obligations of $1,574,000 and $1,650,000, respectively. The following tables set forth the aggregate principal amount outstanding under our outstanding notes payable and the interest rates and monthly payments as of September 30, 2015 and December 31, 2014 with respect to the same. Information as of December 31, 2014 does not include indebtedness of Legacy TGC as of such date, due to the accounting treatment of the Merger as a reverse acquisition as described in Notes 2 and 3. September 30, 2015 December 31, 2014 Notes payable to commercial banks Aggregate principal amount outstanding $10,598,000 $8,577,000 Interest rates 3.5%-4.6% 3.16%-4.6% Monthly payments (excluding interest) $128,363-$285,757 $128,363-$290,938 September 30, 2015 December 31, 2014 Notes payable to finance company for insurance Aggregate principal amount outstanding $ — Interest rates % — The aggregate maturities of the notes payable at September 30, 2015 are as follows: October 2015 — September 2016 $ October 2016 — September 2017 $ The following is a schedule showing the future minimum lease payments under capital leases by years and the present value of the minimum lease payments as of September 30, 2015: October 2015 — September 2016 $ October 2016 — September 2017 October 2017 — September 2018 $ Interest rates on these leases ranged from 3.76% to 8.17%.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2015
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	7. COMMITMENTS AND CONTINGENCIES On December 22, 2014, Legacy Dawson received a letter dated December 18, 2014 from legal counsel for a purported shareholder demanding that the members of Legacy Dawson’s Board of Directors at the time the action was initiated (the “Legacy Dawson Board”) take appropriate legal action against the members of the Legacy Dawson Board (the “December Demand Letter”). The December Demand Letter alleged conflicts of interest on the part of certain of Legacy Dawson officers and directors in connection with the Merger, disclosure deficiencies by Legacy Dawson with respect to the Merger and the negotiations leading to the merger agreement and breaches of fiduciary duties by such persons in connection with such matters. The December Demand Letter also demanded that Legacy Dawson make various corrective disclosures concerning the Merger. In addition, on January 7, 2015, Andrew Speese, through his attorney, filed a purported shareholder class action and derivative action relating to the Merger on behalf of himself and Legacy Dawson’s other shareholders in the United States District Court for the Western District of Texas (Midland/Odessa Division), against Legacy Dawson, the Legacy Dawson Board, Legacy TGC and Merger Sub (the “Speese Lawsuit”). In connection with the filing of the Speese Lawsuit, on January 8, 2015, Legacy Dawson received a letter dated January 7, 2015 from legal counsel for Andrew Speese demanding that the Legacy Dawson Board take legal action to remedy alleged breaches of fiduciary duties in connection with the strategic business combination and to recover damages caused by such alleged breaches (the “Speese Demand Letter”). On March 16, 2015, Andrew Speese, through his attorney, dismissed the Speese Lawsuit without prejudice; however, counsel for Andrew Speese has not formally withdrawn the Speese Demand Letter. The Legacy Dawson Board formed a Special Litigation Committee (“SLC”), such committee was authorized to retain independent legal counsel, to investigate and make a final determination with respect to the claims in the demand letters and, prior to its dismissal, the Speese Lawsuit described above. On July 23, 2015, the SLC completed its review, determined that the evidence did not support the claims and rejected the demands. On November 3, 2015 the Board of Directors approved a resolution from the SLC for the SLC to be dissolved effective October 31, 2015. On May 25, 2015, flash flooding occurred in certain regions in Texas in which several of the Company’s data acquisition crews were operating. The flood waters destroyed approximately $593,000 net book value of the Company’s equipment. The Company believes its insurance coverage is adequate to cover losses related to the flooding. Further, from time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. Although the Company cannot predict the outcomes of any such legal proceedings, management believes that the resolution of pending legal actions will not have a material adverse effect on the Company’s financial condition, results of operations or liquidity, as the Company believes it is adequately indemnified and insured. The Company experiences contractual disputes with its clients from time to time regarding the payment of invoices or other matters. While the Company seeks to minimize these disputes and maintain good relations with its clients, the Company has in the past experienced, and may in the future experience, disputes that could affect its revenues and results of operations in any period. The Company has non-cancelable operating leases for office space in Midland, Houston, Plano, Denison, Denver, Oklahoma City and Calgary, Alberta. The following table summarizes payments due in specific periods related to the Company’s contractual obligations with initial terms exceeding one year as of September 30, 2015. Payments Due by Period (in 000’s) Total Within 1 Year 2-3 Years 4-5 Years After 5 Years Operating lease obligations (office space) $ $ $ $ $ Some of the Company’s operating leases contain predetermined fixed increases of the minimum rental rate during the initial lease term. For these leases, the Company recognizes the related expense on a straight-line basis and records deferred rent as the difference between the amount charged to expense and the rent paid. Rental expense under the Company’s operating leases with initial terms exceeding one year was $448,000 and $242,000 for the three months ended September 30, 2015 and 2014, respectively, and $1,253,000 and $725,000 for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, the Company had unused letters of credit totaling approximately $233,000. The Company’s letters of credit principally back obligations associated with Legacy Dawson’s self-insured retention on workers’ compensation claims outstanding prior to October 1, 2011. The Company is no longer self-insured for workers’ compensation claims after October 1, 2011.

NET LOSS PER SHARE ATTRIBUTABLE

NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCK	9 Months Ended
	Sep. 30, 2015
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCK.
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCK	8. NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCK Net loss per share attributable to common stock is calculated using the two-class method. The two-class method is an allocation method of calculating loss per share when a company’s capital structure includes participating securities that have rights to undistributed earnings. The Company’s employees and officers that hold unvested restricted stock are entitled to receive dividends declared by the Company. The Company’s basic net loss per share attributable to common stock is computed by reducing the Company’s net loss by the net income allocable to unvested restricted stockholders that have a right to participate in earnings. The Company’s employees and officers that hold unvested restricted stock do not participate in losses because they are not contractually obligated to do so. The undistributed earnings are allocated based on the relative percentage of the weighted average unvested restricted stock awards. The basic net loss per share attributable to common stock is computed by dividing the net loss attributable to common stock by the weighted average shares outstanding. The weighted average shares outstanding for the three months ended September 30, 2015 was calculated by weighting the share activity for the Company by the number of days the shares were outstanding in the quarter. The weighted average number of shares outstanding for the nine months ended September 30, 2015 was calculated by totaling (i) the product of (x) the weighted shares of Legacy Dawson Common Stock outstanding at the beginning of the period multiplied by (y) the Exchange Ratio, plus (ii) the number of shares associated with awards of Legacy Dawson restricted stock and restricted stock units that vested in conjunction with the Merger, weighted as of February 11, 2015, plus (iii) the number of shares of Legacy TGC Common Stock outstanding immediately prior to the Merger, weighted to reflect that such shares were outstanding from February 11, 2015 until the end of the period. The weighted average number of shares outstanding for the three and nine months ended September 30, 2014 was calculated as if the change of Legacy Dawson’s fiscal year end from September 30 to December 31 had occurred at the beginning of the period in calendar 2014 and the components of the weighted average shares calculation were multiplied by the Exchange Ratio. The Company’s dilutive net loss per share attributable to common stock is computed by adjusting basic net loss per share attributable to common stock by diluted income allocable to unvested restricted stock, if any, divided by weighted average diluted shares outstanding. A reconciliation of the basic and diluted loss per share attributable to common stock is as follows: Net Loss per Share Attributable to Common Stock Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (in 000’s) (in 000’s) Net loss $ ) $ ) $ ) $ ) Income allocable to unvested restricted stock — ) — ) Basic loss attributable to common stock $ ) $ ) $ ) $ ) Reallocation of participating earnings — — — — Diluted loss attributable to common stock $ ) $ ) $ ) $ ) Weighted average common shares outstanding: Basic Dilutive common stock options and restricted stock units — — — — Diluted Basic loss attributable to a share of common stock $ ) $ ) $ ) $ ) Diluted loss attributable to a share of common stock $ ) $ ) $ ) $ ) The Company had a net loss in each of the three and nine months ended September 30, 2015 and 2014. As a result, all stock options and restricted stock units were anti-dilutive and excluded from weighted average shares used in determining the diluted loss attributable to a share of common stock for the respective periods. The following weighted average numbers of stock options and restricted stock units have been excluded from the calculation of diluted loss per share attributable to common stock, as their effect would be anti-dilutive for each of the three and nine months ended September 30, 2015 and 2014: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Stock options Restricted stock units Total There was no unvested restricted stock included in common stock outstanding at September 30, 2015. There were 182,160 shares of unvested restricted stock at September 30, 2014 included in common stock outstanding as such shares had a non-forfeitable right to participate in any dividends that might be declared and have the right to vote.

QUARTERLY DIVIDEND

QUARTERLY DIVIDEND	9 Months Ended
	Sep. 30, 2015
QUARTERLY DIVIDEND
QUARTERLY DIVIDEND	9. QUARTERLY DIVIDEND On February 3, 2014, the Legacy Dawson Board approved the commencement of the payment of an $0.08 per share quarterly cash dividend to shareholders, subject to capital availability and a determination that cash dividends continue to be in the best interest of Legacy Dawson. Quarterly dividends were paid on February 24, 2014, May 30, 2014, August 29, 2014 and December 8, 2014 to Legacy Dawson’s shareholders of record at the close of business on February 14, 2014, May 16, 2014, August 15, 2014 and November 24, 2014, respectively, representing an aggregate dividend of approximately $645,000 based on the number of issued and outstanding shares of Legacy Dawson Common Stock as of the declaration date, or approximately $2,580,000 on an annualized basis. Following the Merger, the merged Company’s Board of Directors, after consideration of general economic and market conditions affecting the energy industry in general, and the oilfield services business in particular, determined that the Company would not pay a dividend for the foreseeable future. Payment of any dividends in the future will be at the discretion of the Company’s Board of Directors and will depend on the Company’s financial condition, results of operations, capital and legal requirements, and other factors deemed relevant by the Board of Directors.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2015
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	10. SUBSEQUENT EVENTS On October 1, 2015, the Company entered into an agreement with AON Premium Finance, LLC to finance certain insurance policies for the 2015/2016 policy period. The amount financed was $1,045,280 and accrues interest at a rate of 2.35%. This note is payable over the next ten months.

SUMMARY OF SIGNIFICANT ACCOUN16

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation	Principles of Consolidation. The consolidated financial statements for the three and nine months ended September 30, 2014 include the accounts of Legacy Dawson and its wholly-owned subsidiaries, Dawson Seismic Services Holdings, Inc. and Eagle Canada Seismic Services ULC, which was formerly known as Dawson Seismic Services ULC (collectively, the “Legacy Dawson Subsidiaries”). The consolidated financial statements for the three months ended September 30, 2015 include the accounts of the merged entity, including Legacy Dawson and the Legacy Dawson Subsidiaries, together with Tidelands Geophysical Co., Inc., Exploration Surveys, Inc. and Eagle Canada, Inc. (collectively, the “Legacy TGC Subsidiaries”). The consolidated financial statements for the nine months ended September 30, 2015 include (i) the accounts of Legacy Dawson and the Legacy Dawson Subsidiaries for the fiscal period from January 1, 2015 through February 11, 2015 and (ii) the accounts of the merged entity, including Legacy Dawson, the Legacy Dawson Subsidiaries and the Legacy TGC Subsidiaries for the fiscal period from February 12, 2015 through September 30, 2015. All significant intercompany balances and transactions have been eliminated in consolidation.
Cash Equivalents	Cash Equivalents. The Company considers demand deposits, certificates of deposit, overnight investments, money market funds and all highly liquid debt instruments purchased with an initial maturity of three months or less to be cash equivalents.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts. Management prepares its allowance for doubtful accounts receivable based on its review of past-due accounts, its past experience of historical write-offs and its current client base. While the collectability of outstanding client invoices is continually assessed, the inherent volatility of the energy industry’s business cycle can cause swift and unpredictable changes in the financial stability of the Company’s clients.
Property, Plant and Equipment	Property, Plant and Equipment. As discussed more fully in Note 3, the Merger was accounted for as a reverse acquisition, and the Company accounted for the transaction by using Legacy Dawson’s historical information and accounting policies and adding the assets and liabilities of Legacy TGC as of the completion date of the Merger at their respective fair values. As a result, Legacy Dawson’s property, plant and equipment is capitalized at historical cost and depreciated over the useful life of the assets and Legacy TGC’s property, plant and equipment is capitalized at its estimated fair values as of the merger date and depreciated over the remaining useful life of the assets. Management’s estimation of the useful life of assets is based on circumstances that exist in the seismic industry and information available at the time of the purchase of the asset. As circumstances change and new information becomes available, these estimates could change. Depreciation is computed using the straight-line method. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the consolidated balance sheet, and any resulting gain or loss is reflected in the results of operations for the period. For purposes of measuring the estimated fair value of the Legacy TGC assets acquired in the Merger, the Company used the guidance in Accounting Standards Codification (“ASC”) No. 820, “Fair Value Measurement and Disclosure.” ASC No. 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, under ASC No. 820, fair value measurements for an asset assume the highest and best use of that asset by market participants. As a result, the Company may be required to value assets of Legacy TGC at fair value measures that do not reflect the Company’s intended use of those assets. Use of different estimates and judgments could yield different results.
Impairment of Long-lived Assets	Impairment of Long-lived Assets. Long-lived assets are reviewed for impairment when triggering events occur that suggest deterioration in the assets’ recoverability or fair value. Recognition of an impairment charge is required if future expected undiscounted net cash flows are insufficient to recover the carrying value of the assets and the fair value of the assets is below the carrying value of the assets. Management’s forecast of future cash flows used to perform impairment analysis includes estimates of future revenues and expenses based on the Company’s anticipated future results while considering anticipated future oil and natural gas prices, which is fundamental in assessing demand for the Company’s services. If the carrying amounts of the assets exceed the estimated expected undiscounted future cash flows, the Company measures the amount of possible impairment by comparing the carrying amount of the assets to the fair value. Although the Company does not currently anticipate an impairment of its assets, if oil and natural gas prices remain at current levels for an extended period of time or decline further, the Company may be exposed to impairment charges in future periods, which could negatively affect the Company’s results of operations in a material manner in the period in which they are recorded.
Leases	Leases. The Company leases certain equipment and vehicles under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. Any lease that does not meet the criteria for a capital lease is accounted for as an operating lease. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair market value of the related assets. Assets under capital leases are amortized using the straight-line method over the initial lease term. Amortization of assets under capital leases is included in depreciation expense.
Intangibles	Intangibles. Acquired customer relationships and backlog are capitalized and amortized over useful lives ranging from five months to five years using the straight-line method of amortization. Amortization of intangibles is included in depreciation expense. Trademarks/tradenames resulting from a business combination are not subject to amortization. The Company tests for impairment on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.
Revenue Recognition	Revenue Recognition . Services are provided under cancelable service contracts. These contracts are either “turnkey” or “term” agreements. Under both types of agreements, the Company recognizes revenues when revenue is realizable and services have been performed. Services are defined as the commencement of data acquisition or processing operations. Revenues are considered realizable when earned according to the terms of the service contracts. Under turnkey agreements, revenue is recognized on a per unit of data acquired rate as services are performed. Under term agreements, revenue is recognized on a per unit of time worked rate as services are performed. In the case of a cancelled service contract, revenue is recognized and the customer is billed for services performed up to the date of cancellation. The Company receives reimbursements for certain out-of-pocket expenses under the terms of the service contracts. Amounts billed to clients are recorded in revenue at the gross amount, including out-of-pocket expenses that are reimbursed by the client. In some instances, customers are billed in advance of services performed. In those cases, the Company recognizes the liability as deferred revenue. As services are performed, those deferred revenue amounts are recognized as revenue. In some instances, the contract contains certain permitting, surveying and drilling costs that are incorporated into the per unit of data acquired rate. In these circumstances, these set up costs that occur prior to initiating revenue recognition are capitalized and amortized as services are provided.
Stock-Based Compensation	Stock-Based Compensation. The Company measures all employee stock-based compensation awards, which include restricted stock, restricted stock units, stock options and common stock awards, using the fair value method and recognizes compensation cost, net of estimated forfeitures, in its consolidated financial statements. The Company records compensation expense as operating or general and administrative expense, as appropriate, in the consolidated statements of operations and comprehensive loss on a straight-line basis over the vesting period of the related restricted stock awards or stock options.
Foreign Currency Translation	Foreign Currency Translation. The U.S. Dollar is the reporting currency for all periods presented. The functional currency of the Company’s foreign subsidiaries is generally the local currency. All assets and liabilities denominated in a foreign currency are translated into U.S. Dollars at the exchange rate on the balance sheet date. Income and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. Adjustments resulting from translation are recorded as a separate component of accumulated other comprehensive loss in the consolidated balance sheets. Foreign currency gains (losses) are included in the consolidated statements of operations and comprehensive loss.
Income Taxes	Income Taxes. The Company accounts for income taxes by recognizing amounts of taxes payable or refundable for the current year and by using an asset and liability approach in recognizing the amount of deferred tax assets and liabilities for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Management determines deferred taxes by identifying the types and amounts of existing temporary differences, measuring the total deferred tax asset or liability using the applicable tax rate in effect for the year in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the year of an enacted rate change. The deferred tax asset is reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. Management’s methodology for recording income taxes requires judgment regarding assumptions and the use of estimates, including determining the annual effective tax rate and the valuation of deferred tax assets, which can create variances between actual results and estimates and could have a material impact on the Company’s provision or benefit for income taxes. The Company’s effective tax rates differ from the statutory federal rate of 35% for certain items such as state and local taxes, non-deductible expenses, discrete items and expenses related to share-based compensation that were not expected to result in a tax deduction.
Use of Estimates in the Preparation of Financial Statements	Use of Estimates in the Preparation of Financial Statements. Preparation of the accompanying financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Because of the use of assumptions and estimates inherent in the reporting process, actual results could differ from those estimates.
Reclassifications	Reclassifications. Certain reclassifications have been made to the 2014 consolidated financial statements to conform to the 2015 presentation.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, “Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). ASU 2015-16 eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. The guidance is effective for public entities for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2015-16 during the quarter ended September 30, 2015. The adoption of ASU 2015-16 did not materially affect the Company’s consolidated results of operations, statement of financial position or financial statement disclosures. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern” (Subtopic 205-40). This ASU provides guidance on management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and in certain circumstances to provide related footnote disclosures. This ASU is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the new guidance and does not expect any material impact on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted, but only for fiscal years beginning after December 15, 2016. Entities have the option of using either a full retrospective or modified approach to adopt ASU 2014-09. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements and the method of adoption.

MERGER (Tables)

MERGER (Tables) - Legacy TGC	9 Months Ended
	Sep. 30, 2015
Summary of assets acquired and liabilities assumed at merger date	Estimated Fair Value (in 000’s) Stock consideration $ Interest bearing debt assumed Debt-free current liabilities Total purchase price consideration including liabilities assumed $ Value of Current Assets Current assets excluding cash and cash equivalents $ Cash and cash equivalents Total current assets $ Identified tangible assets Fair value of property, plant and equipment $ Total identified tangible assets $ Identified intangible assets Trademarks/trade names $ Customer relationships Backlog Total identified intangible assets $ Net deferred tax asset $ Total indicated value of assets $
Summary of pro forma information	Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Pro forma total revenues $ $ $ $ Pro forma net loss $ ) $ ) $ ) $ ) Pro forma net loss per share Basic $ ) $ ) $ ) $ ) Diluted $ ) $ ) $ ) $ )

DEBT (Tables)

DEBT (Tables)	9 Months Ended
	Sep. 30, 2015
DEBT
Schedule of components of notes payable	September 30, 2015 December 31, 2014 Notes payable to commercial banks Aggregate principal amount outstanding $10,598,000 $8,577,000 Interest rates 3.5%-4.6% 3.16%-4.6% Monthly payments (excluding interest) $128,363-$285,757 $128,363-$290,938 September 30, 2015 December 31, 2014 Notes payable to finance company for insurance Aggregate principal amount outstanding $ — Interest rates % —
Schedule of aggregate maturities of notes payable	The aggregate maturities of the notes payable at September 30, 2015 are as follows: October 2015 — September 2016 $ October 2016 — September 2017 $
Schedule of future minimum lease payments	The following is a schedule showing the future minimum lease payments under capital leases by years and the present value of the minimum lease payments as of September 30, 2015: October 2015 — September 2016 $ October 2016 — September 2017 October 2017 — September 2018 $

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	Sep. 30, 2015
COMMITMENTS AND CONTINGENCIES.
Schedule of company's contractual obligations	The following table summarizes payments due in specific periods related to the Company’s contractual obligations with initial terms exceeding one year as of September 30, 2015. Payments Due by Period (in 000’s) Total Within 1 Year 2-3 Years 4-5 Years After 5 Years Operating lease obligations (office space) $ $ $ $ $

NET (LOSS) INCOME PER SHARE ATT

NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO COMMON STOCK (Tables)	9 Months Ended
	Sep. 30, 2015
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCK.
Schedule of reconciliation of the basic and diluted loss per share attributable to common stock	Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (in 000’s) (in 000’s) Net loss $ ) $ ) $ ) $ ) Income allocable to unvested restricted stock — ) — ) Basic loss attributable to common stock $ ) $ ) $ ) $ ) Reallocation of participating earnings — — — — Diluted loss attributable to common stock $ ) $ ) $ ) $ ) Weighted average common shares outstanding: Basic Dilutive common stock options and restricted stock units — — — — Diluted Basic loss attributable to a share of common stock $ ) $ ) $ ) $ ) Diluted loss attributable to a share of common stock $ ) $ ) $ ) $ )
Schedule of weighted average numbers of stock options and restricted stock units have been excluded from the calculation of diluted loss per share attributable to common stock	Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Stock options Restricted stock units Total

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	9 Months Ended
	Sep. 30, 2015
Significant Accounting Policies
Federal statutory effective income tax rate	35.00%
Minimum
Significant Accounting Policies
Useful lives	5 months
Maximum
Significant Accounting Policies
Useful lives	5 years

MERGER (Details)

MERGER (Details)	Feb. 11, 2015USD ($)$ / sharesshares	Feb. 10, 2015$ / shares	Sep. 30, 2015USD ($)$ / sharesshares	Sep. 30, 2014USD ($)$ / sharesshares	Sep. 30, 2015USD ($)segment$ / sharesshares	Sep. 30, 2014USD ($)$ / sharesshares	Dec. 31, 2014$ / sharesshares
Common stock, par value (in dollars per share) | $ / shares			$ 0.01		$ 0.01		$ 0.01
Common stock, shares outstanding | shares			21,571,513		21,571,513		14,216,540
Business Acquisition, Pro Forma Information
Shares used in calculation of earnings per share | shares			21,571,513	21,262,566	21,521,707	21,306,724
Pro forma total revenues			$ 62,498,000	$ 88,665,000	$ 193,165,000	$ 286,635,000
Pro forma net loss			$ (2,870,000)	$ (6,556,000)	$ (25,316,000)	$ (7,533,000)
Pro forma net loss per share
Basic | $ / shares			$ (0.13)	$ (0.31)	$ (1.18)	$ (0.35)
Diluted | $ / shares			$ (0.13)	$ (0.31)	$ (1.18)	$ (0.35)
Minimum
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities
Useful lives					5 months
Maximum
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities
Useful lives					5 years
Legacy TGC
Common stock, par value (in dollars per share) | $ / shares	$ 0.33	$ 0.01
Reverse stock split ratio		0.33
Common stock, shares outstanding | shares	7,333,708
Split-effected Common Stock | shares	1.760
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities
Stock consideration	$ 42,902,000
Interest bearing debt assumed	12,048,000
Debt-free current liabilities	12,647,000
Total purchase price consideration including liabilities assumed	67,597,000
Current assets excluding cash and cash equivalents	16,156,000
Cash and cash equivalents	12,382,000
Total current assets	28,538,000
Fair value of property, plant and equipment	28,812,000
Total identified tangible assets	28,812,000
Identified intangible assets	3,353,000
Net deferred tax asset	6,894,000
Total indicated value of assets	$ 67,597,000
Closing price per share | $ / shares	$ 5.85
Accrued taxes	$ 750,000
Pre-tax merger-related costs					$ 2,885,000
Severance and compensation arrangements					$ 1,198,000
Number of operating segments | segment					1
Legacy TGC | Minimum
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities
Property, Plant and Equipment, Useful Life	2 years
Legacy TGC | Maximum
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities
Property, Plant and Equipment, Useful Life	15 years
Legacy TGC | Trademarks/trade names
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities
Identified intangible assets	$ 1,063,000
Legacy TGC | Customer relationships
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities
Identified intangible assets	$ 1,799,000
Useful lives	5 years
Gross carrying value			$ 1,799,000		$ 1,799,000
Accumulated Amortization			206,000		206,000
Legacy TGC | Backlog
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities
Identified intangible assets	$ 491,000
Gross carrying value			491,000		491,000
Accumulated Amortization			$ 491,000		$ 491,000
Legacy TGC | Backlog | Weighted Average
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities
Useful lives	5 months

SHORT-TERM INVESTMENTS (Details

SHORT-TERM INVESTMENTS (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2015USD ($)item	Dec. 31, 2014USD ($)item
SHORT-TERM INVESTMENTS
Maturity Period of certificates of deposit, minimum	3 months	3 months
Maturity Period of certificates of deposit, maximum	1 year	1 year
Number of certificates of deposit limited to banking institution	1	1
Investments exceeding FDIC limit | $	$ 0	$ 0

DEBT (Details)

DEBT (Details)	Jun. 30, 2015USD ($)	Sep. 30, 2015USD ($)$ / sharesitem	Dec. 31, 2014USD ($)item
Debt Instruments
Aggregate principal amount		$ 10,609,000
Capital lease obligations		1,574,000	$ 1,650,000
Notes payable
Aggregate principal amount outstanding		10,609,000
Aggregate maturities of notes payable
October 2015 - September 2016		7,175,000
October 2016 - September 2017		3,434,000
Total		10,609,000
Future minimum lease payments
October 2015 - September 2016		983,000
October 2016 - September 2017		535,000
October 2017 - September 2018		56,000
Total minimum lease payments required		$ 1,574,000
Minimum
Future minimum lease payments
Interest rate (as a percent)		3.76%
Maximum
Future minimum lease payments
Interest rate (as a percent)		8.17%
Legacy Dawson Credit Agreement
Debt Instruments
Number of notes payable | item			3
Aggregate principal amount			$ 8,577,000
Interest rate floor	4.00%
Repayments of notes payable	$ 5,144,000
Notes payable
Aggregate principal amount outstanding			8,577,000
Aggregate maturities of notes payable
Total			8,577,000
Legacy Dawson Credit Agreement | LIBOR
Debt Instruments
Variable interest rate basis	30-day LIBOR
Spread on variable rate (as a percent)	2.25%
Legacy Dawson Credit Agreement | Prime rate
Debt Instruments
Variable interest rate basis	Prime Rate
Spread on variable rate (as a percent)	(0.75%)
Existing Credit Agreement
Debt Instruments
Number of notes payable | item		1
Aggregate principal amount		$ 4,286,000
Number of notes payable not covered under term loan feature | $ / shares		3
Aggregate principal amount not covered under term loan feature outstanding		$ 6,312,000
Borrowing, repaying and reborrowing capacity		$ 20,000,000
Percentage of maximum borrowing capacity on eligible accounts receivable		80.00%
Minimum tangible net worth		$ 150,000,000
Notes payable
Aggregate principal amount outstanding		4,286,000
Aggregate maturities of notes payable
Total		$ 4,286,000
Existing Credit Agreement | Minimum
Debt Instruments
Ratio of current assets to current liabilities		1.50
Existing Credit Agreement | Maximum
Debt Instruments
Interest rate		4.50%
Debt to tangible net worth ratio		1
Existing Credit Agreement | Maximum | Prime rate
Debt Instruments
Interest rate floor		2.50%
Notes payable to commercial banks
Debt Instruments
Aggregate principal amount		$ 10,598,000	8,577,000
Notes payable
Aggregate principal amount outstanding		$ 10,598,000	$ 8,577,000
Minimum interest rate (as a percent)		3.50%	3.16%
Maximum interest rate (as a percent)		4.60%	4.60%
Aggregate maturities of notes payable
Total		$ 10,598,000	$ 8,577,000
Notes payable to commercial banks | Minimum
Notes payable
Monthly payments (excluding interest)		128,363	128,363
Notes payable to commercial banks | Maximum
Notes payable
Monthly payments (excluding interest)		$ 285,757	$ 290,938
Notes Payable to finance companies for insurance notes
Debt Instruments
Number of notes payable | item		1
Aggregate principal amount		$ 11,000
Notes payable
Aggregate principal amount outstanding		$ 11,000
Interest rate (as a percent)		4.09%
Aggregate maturities of notes payable
Total		$ 11,000

COMMITMENTS AND CONTINGENCIES25

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Sep. 30, 2015	May. 25, 2015
Operating Lease Obligations
Operating lease obligations (office space), Within 1 Year	$ 1,550,000
Operating lease obligations (office space), 2-3 Years	2,476,000
Operating lease obligations (office space), 4-5 Years	1,766,000
Operating lease obligations (office space), After 5 Years	5,194,000
Operating lease obligations (office space), Total	$ 10,986,000
Carrying amount of equipment damaged due to flash flooding		$ 593,000

COMMITMENTS AND CONTINGENCIES26

COMMITMENTS AND CONTINGENCIES (Details 2) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
COMMITMENTS AND CONTINGENCIES.
Rental expense under operating leases with initial terms exceeding one year	$ 448,000	$ 242,000	$ 1,253,000	$ 725,000
Unused letters of credit, total	$ 233,000		$ 233,000

NET LOSS PER SHARE ATTRIBUTAB27

NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCK (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCK.
Net loss	$ (2,870,000)	$ (3,882,000)	$ (21,339,000)	$ (9,723,000)
Income allocable to unvested restricted stock		(15,000)		(44,000)
Basic loss attributable to common stock	(2,870,000)	(3,897,000)	(21,339,000)	(9,767,000)
Diluted loss attributable to common stock	$ (2,870,000)	$ (3,897,000)	$ (21,339,000)	$ (9,767,000)
Weighted average common shares outstanding:
Basic	21,571,513	14,011,789	20,386,202	14,010,557
Diluted	21,571,513	14,011,789	20,386,202	14,010,557
Basic loss attributable to a share of common stock	$ (0.13)	$ (0.28)	$ (1.05)	$ (0.70)
Diluted loss attributable to a share of common stock	$ (0.13)	$ (0.28)	$ (1.05)	$ (0.70)

NET LOSS PER SHARE ATTRIBUTAB28

NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCK (Details 2) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Anti-dilutive Securities Excluded from Calculation of Earnings Per Share
Weighted average number of securities excluded from calculation	287,979	199,830	285,562	201,370
Stock options
Anti-dilutive Securities Excluded from Calculation of Earnings Per Share
Weighted average number of securities excluded from calculation	158,732	161,275	159,860	161,884
Restricted stock units
Anti-dilutive Securities Excluded from Calculation of Earnings Per Share
Weighted average number of securities excluded from calculation	129,247	38,555	125,702	39,486

NET LOSS PER SHARE ATTRIBUTAB29

NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCK (Details 3) - shares	Sep. 30, 2015	Sep. 30, 2014
Restricted
Net Loss Per Share Attributable To Common Stock
Unvested restricted stock included in common stock outstanding	0	182,160

QUARTERLY DIVIDEND (Details)

QUARTERLY DIVIDEND (Details) - USD ($)	Dec. 08, 2014	Aug. 29, 2014	May. 30, 2014	Feb. 24, 2014	Feb. 03, 2014
QUARTERLY DIVIDEND
Dividend payable per share					$ 0.08
Quarterly dividend paid amount	$ 645,000	$ 645,000	$ 645,000	$ 645,000
Dividend paid amount on annualized basis	$ 2,580,000

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details) - Subsequent Events. - Notes payable to AON Premium Finance, LLC	Oct. 01, 2015USD ($)
SUBSEQUENT EVENT
Interest rate (as a percent)	2.35%
Maturity term of notes payable	10 months
Amount financed	$ 1,045,280