Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 09, 2023 | Jun. 30, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-32472 | ||
Entity Registrant Name | DAWSON GEOPHYSICAL COMPANY | ||
Entity Incorporation, State or Country Code | TX | ||
Entity Tax Identification Number | 74-2095844 | ||
Entity Address, Address Line One | 508 West Wall, Suite 800 | ||
Entity Address, City or Town | Midland | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 79701 | ||
City Area Code | 432 | ||
Local Phone Number | 684-3000 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | DWSN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 8,135,000 | ||
Entity Common Stock, Shares Outstanding | 23,812,329 | ||
Auditor Name | RSM US LLP | ||
Auditor Firm ID | 49 | ||
Auditor Location | Houston, Texas | ||
Entity Central Index Key | 0000799165 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 13,914,000 | $ 25,376,000 |
Restricted cash | 5,000,000 | 5,000,000 |
Short-term investments | 265,000 | 265,000 |
Accounts receivable, net of allowance for doubtful accounts of $250 at December 31, 2022 and 2021 | 6,945,000 | 8,905,000 |
Employee retention credit receivable | 3,035,000 | |
Prepaid expenses and other current assets | 8,876,000 | 3,313,000 |
Total current assets | 38,035,000 | 42,859,000 |
Property and equipment | 244,830,000 | 253,066,000 |
Less accumulated depreciation | (226,703,000) | (226,717,000) |
Property and equipment, net | 18,127,000 | 26,349,000 |
Right-of-use assets | 4,010,000 | 4,435,000 |
Intangibles, net | 369,000 | 395,000 |
Total assets | 60,541,000 | 74,038,000 |
Current liabilities: | ||
Accounts payable | 4,015,000 | 2,580,000 |
Accrued liabilities: | ||
Payroll costs and other taxes | 1,973,000 | 1,066,000 |
Other | 1,178,000 | 1,338,000 |
Deferred revenue | 7,199,000 | 1,344,000 |
Current maturities of notes payable and finance leases | 275,000 | 302,000 |
Current maturities of operating lease liabilities | 1,118,000 | 961,000 |
Total current liabilities | 15,758,000 | 7,591,000 |
Long-term liabilities: | ||
Notes payable and finance leases, net of current maturities | 207,000 | 8,000 |
Operating lease liabilities, net of current maturities | 3,331,000 | 3,942,000 |
Deferred tax liabilities, net | 136,000 | 20,000 |
Total long-term liabilities | 3,674,000 | 3,970,000 |
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, 23,812,329 and 23,692,379 shares issued, and 23,812,329 and 23,643,934 shares outstanding at December 31, 2022 and December 31, 2021, respectively | 238,000 | 237,000 |
Additional paid-in capital | 155,413,000 | 155,268,000 |
Accumulated deficit | (112,469,000) | (92,018,000) |
Treasury stock, at cost; 0 and 48,445 shares at December 31, 2022 and 2021, respectively | ||
Accumulated other comprehensive loss, net | (2,073,000) | (1,010,000) |
Total stockholders' equity | 41,109,000 | 62,477,000 |
Total liabilities and stockholders' equity | $ 60,541,000 | $ 74,038,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
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 | 23,812,329 | 23,692,379 |
Common stock, shares outstanding | 23,812,329 | 23,643,934 |
Treasury stock, shares | 0 | 48,445 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
Operating revenues | $ 37,480 | $ 24,695 |
Operating costs: | ||
Operating expenses | 37,910 | 29,016 |
General and administrative | 13,785 | 12,046 |
Depreciation and amortization | 9,795 | 12,863 |
Total cost and expenses | 61,490 | 53,925 |
Loss from operations | (24,010) | (29,230) |
Other income (expense): | ||
Interest income | 316 | 220 |
Interest expense | (31) | (21) |
Other income (expense), net | 415 | (86) |
Gain from employee retention credit | 2,966 | |
Loss before income tax | (20,344) | (29,117) |
Income tax benefit (expense): | ||
Current | 9 | 27 |
Deferred | (116) | (1) |
Income tax benefit | (107) | 26 |
Net loss | (20,451) | (29,091) |
Other comprehensive (loss) income: | ||
Net unrealized (loss) income on foreign exchange rate translation | (1,063) | 190 |
Comprehensive loss | $ (21,514) | $ (28,901) |
Basic loss per share of common stock | $ (0.86) | $ (1.23) |
Diluted loss per share of common stock | $ (0.86) | $ (1.23) |
Weighted average equivalent common shares outstanding | 23,782,796 | 23,570,455 |
Weighted average equivalent common shares outstanding - assuming dilution | 23,782,796 | 23,570,455 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Total |
Balance at beginning of period at Dec. 31, 2020 | $ 235 | $ 154,866 | $ (62,927) | $ (1,200) | $ 90,974 |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 23,526,517 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (29,091) | (29,091) | |||
Unrealized income (loss) on foreign exchange rate translation | 190 | 190 | |||
Issuance of common stock under stock compensation plans | $ 2 | (2) | |||
Issuance of common stock under stock compensation plans (in shares) | 174,000 | ||||
Stock-based compensation expense | 419 | 419 | |||
Issuance of common stock as compensation | 60 | 60 | |||
Issuance of common stock as compensation (in shares) | 23,272 | ||||
Shares exchanged for taxes on stock-based compensation | (75) | (75) | |||
Shares exchanged for taxes on stock-based compensation (in shares) | (31,410) | ||||
Balance at end of period at Dec. 31, 2021 | $ 237 | 155,268 | (92,018) | (1,010) | $ 62,477 |
Balance at end of period (in shares) at Dec. 31, 2021 | 23,692,379 | 23,643,934 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (20,451) | $ (20,451) | |||
Cash settlement of RSUs | (301) | (301) | |||
Unrealized income (loss) on foreign exchange rate translation | (1,063) | (1,063) | |||
Issuance of common stock under stock compensation plans | $ 1 | (1) | |||
Issuance of common stock under stock compensation plans (in shares) | 155,000 | ||||
Stock-based compensation expense | 413 | 413 | |||
Treasury Stock Sale | 113 | 113 | |||
Shares exchanged for taxes on stock-based compensation | (79) | (79) | |||
Shares exchanged for taxes on stock-based compensation (in shares) | (35,050) | ||||
Balance at end of period at Dec. 31, 2022 | $ 238 | $ 155,413 | $ (112,469) | $ (2,073) | $ 41,109 |
Balance at end of period (in shares) at Dec. 31, 2022 | 23,812,329 | 23,812,329 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (20,451) | $ (29,091) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 9,795 | 12,863 |
Operating lease cost | 998 | 1,066 |
Non-cash compensation | 413 | 479 |
Deferred income tax expense | 116 | 1 |
Gain on disposal of assets | (219) | (198) |
Remeasurement and other | (18) | (278) |
Change in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | 1,311 | (1,272) |
Increase in employee retention credit receivable | (3,035) | |
(Increase) decrease in prepaid expenses and other assets | (4,382) | 1,397 |
Increase in accounts payable | 873 | 983 |
Increase (decrease) in accrued liabilities | 802 | (453) |
Decrease in operating lease liabilities | (1,026) | (1,112) |
Increase (decrease) in deferred revenue | 5,862 | (435) |
Net cash used in operating activities | (8,961) | (16,050) |
Cash flows from investing activities: | ||
Capital expenditures, net of non-cash capital expenditures summarized below (if applicable) | (894) | (505) |
Proceeds from maturity of short-term investments | 318 | |
Proceeds from disposal of assets | 225 | 451 |
Net cash (used in) provided by investing activities | (669) | 264 |
Cash flows from financing activities: | ||
Proceeds from notes payable | 787 | |
Principal payments on notes payable | (1,253) | (562) |
Principal payments on finance leases | (47) | (55) |
Tax withholdings related to stock-based compensation awards | (79) | (75) |
Cash settlement of RSUs | (301) | |
Sale of treasury stock | 113 | |
Net cash (used in) provided by financing activities | (1,567) | 95 |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (265) | 112 |
Net decrease in cash and cash equivalents and restricted cash | (11,462) | (15,579) |
Cash and cash equivalents and restricted cash at beginning of period | 30,376 | 45,955 |
Cash and cash equivalents and restricted cash at end of period | 18,914 | 30,376 |
Supplemental cash flow information: | ||
Cash paid for interest | 31 | 20 |
Cash paid for income taxes | 81 | |
Cash received for income taxes | 7 | 21 |
Non-cash operating, investing and financing activities: | ||
Increase in accrued purchases of property and equipment | 605 | |
Finance leases incurred | 279 | |
Increase in right-of-use assets and operating lease liabilities | 598 | $ 1 |
Financed insurance premiums | $ 1,193 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Organization and Nature of Operations The Company is a leading provider of onshore seismic data acquisition and processing services. 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. The Company operates in the lower 48 states of the U.S. and in Canada. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Dawson Operating LLC, Dawson Seismic Services Holdings, Inc., Eagle Canada, Inc., Eagle Canada Seismic Services ULC and Exploration Surveys, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Cash Equivalents For purposes of the consolidated financial statements, 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 The Company’s allowance for doubtful accounts reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument and is determined based on a number of factors. Management determines the need for any allowance for doubtful accounts receivable based on its review of past-due accounts, its past experience of historical write-offs, its current client base, when customer accounts exceed 90 days past due and specific customer account reviews. 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. With the adoption of ASU No. 2016-13 in 2020, the Company made an accounting policy election to write off accrued interest amounts by reversing interest income. The Company's allowance for doubtful accounts was $250,000 at December 31, 2022 and 2021. Employee Retention Credit Receivable Under the provisions of the CARES Act, the Company was eligible and, in April 2022, applied for a refundable employee retention credit subject to program conditions and requirements. The Company recognizes these credits as a gain when all uncertainties have been met and the amounts are realizable in accordance with similar gain contingencies. The Company recognized $2,966,000 as a gain in other income and $69,000 as interest income in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2022 and recognized $3,035,000 as an employee retention credit receivable in the Consolidated Balance Sheet as of December 31, 2022. Payments were received in January 2023. No additional credits are expected to be received. Property and Equipment Property and equipment is capitalized at historical cost or the fair value of assets acquired in a business combination and is depreciated over the useful life of the asset. Management’s estimation of this useful life 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. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment when triggering events occur suggesting 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. No impairment charges were recognized for the years ended December 31, 2022 and 2021. Leases The Company leases certain vehicles, seismic recording equipment, real property and office equipment under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating lease or a finance lease for financial reporting purposes. The Company is the lessee in a lease contract when we obtain the right to control the asset. The majority of our operating leases are non-cancelable operating leases for office, shop and warehouse space in Midland, Plano, Houston, Oklahoma City and Calgary, Alberta. The assets and liabilities under finance 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 finance leases are amortized using the straight-line method over the initial lease term. Amortization of assets under finance leases is included in depreciation expense. For operating leases, where readily determinable, the Company uses the implicit interest rate in determining the present value of future minimum lease payments. In the absence of an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date. The Company gives consideration to its outstanding debt, as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The ROU assets are amortized to operating lease cost over the lease terms on a straight-line basis and is included in operating expense. The Company does not recognize leases with an initial term of 12 months or less and does not separate lease and non-lease components. Several of the Company’s leases include options to renew, with renewal terms that can extend from one Intangibles The Company has intangible assets consisting primarily of trademarks/tradenames (which are not amortized) resulting from a business combination. The Company tests for impairment on an annual basis during the fourth quarter, 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. No impairment charges were recognized for the years ended December 31, 2022 and 2021. Revenue Recognition Services are provided under cancelable service contracts which usually have an original expected duration of one year or less. These contracts are either turnkey or term agreements. Under both types of agreements, the Company recognizes revenues as the services are performed. Revenue is generally recognized based on square miles of data recorded compared to total square miles anticipated to be recorded on the survey using the total estimated revenue for the service contract. In the case of a cancelled service contract, the client is billed and revenue is recognized for any third party charges and square miles of data recorded up to the date of cancellation. The Company receives reimbursements for certain out-of-pocket expenses under the terms of the service contracts. The amounts billed to clients are included at their gross amount in the total estimated revenue for the service contract. Clients are billed as permitted by the service contract. Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and cash collections. If billing occurs prior to the revenue recognition or billing exceeds the revenue recognized, the amount is considered deferred revenue and a contract liability. Conversely, if the revenue recognition exceeds the billing, the excess is considered an unbilled receivable and a contract asset. As services are performed, those deferred revenue amounts are recognized as revenue. In some instances, third-party permitting, surveying, drilling, helicopter, equipment rental and mobilization costs that directly relate to the contract are utilized to fulfill the contract obligations. These fulfillment costs are capitalized in other current assets and generally amortized based on the total square miles of data recorded compared to total square miles anticipated to be recorded on the survey using the total estimated fulfillment costs for the service contract. Estimates for total revenue and total fulfillment cost on any service contract are based on certain qualitative and quantitative judgments supported by underlying facts. Management considers a variety of factors such as whether various components of the performance obligation will be performed internally or externally, cost of third party services, and facts and circumstances unique to the performance obligation in making these estimates. Additionally, the Company’s policy includes (i) ignoring the financing component when estimating the transaction price for service contracts completed within one year, (ii) excluding sales tax collected from the customer when determining the transaction price, and (iii) expensing incremental costs to obtain a customer contract if the amortization period for those costs would otherwise be one year or less. Stock-Based Compensation The Company measures all stock-based compensation awards, which include stock options, restricted stock, restricted stock units and common stock awards, using the fair value method and recognizes compensation expense, net of actual forfeitures, 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 awards. 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. Any transactions denominated in a currency other than the functional currency are remeasured with the resulting unrealized gain or loss recognized in the Consolidated Statements of Operations and Comprehensive Loss as other income (expense). All assets and liabilities in the functional currency are then translated into U.S. Dollars at the exchange rate on the consolidated balance sheet date. Income and expenses are translated using the exchange rate applicable to each transaction. Equity transactions are translated using historical exchange rates. Adjustments resulting from translation are recorded as a separate component of accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. Realized foreign currency transaction gains (losses) are included in the Consolidated Statements of Operations and Comprehensive Loss as other income (expense). 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 consolidated 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 of 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. Due to recent operating losses and valuation allowances, the Company may recognize reduced or no tax benefits on future losses on the Consolidated Statements of Operations and Comprehensive Loss. The Company’s effective tax rates differ from the statutory federal rate of 21% for certain items such as state and local taxes, valuation allowances, non-deductible expenses and discrete items. Use of Estimates in the Preparation of Financial Statements Preparation of the accompanying consolidated financial statements in conformity with GAAP 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 consolidated 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. |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2022 | |
Short-Term Investments | |
Short-Term Investments | 2. Short-Term Investments The Company had short-term investments at December 31, 2022 and 2021 consisting of certificates of deposit with original maturities greater than three months but less than a year. Certificates of deposit with any given banking institution did not exceed the FDIC insurance limit at December 31, 2022 or 2021. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 3. Fair Value of Financial Instruments At December 31, 2022 and 2021, the Company’s financial instruments included cash and cash equivalents, restricted cash, short-term investments in certificates of deposit, accounts receivable, employee retention credit receivable, other current assets, accounts payable, other current liabilities, notes payable, finance leases and operating lease liabilities. Due to the short-term maturities of cash and cash equivalents, restricted cash, accounts receivable, employee retention credit receivable, 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 notes payable, finance leases and operating lease liabilities approximate their fair value based on a comparison with the prevailing market interest rates. 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 notes payable, finance leases, operating lease liabilities and investments in certificates of deposit are level 2 measurements in the fair value hierarchy. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Property and Equipment | 4. Property and Equipment Net book value of property and equipment (in thousands) decreased $8,222 or 31.1% from December 31, 2021 to December 31, 2022. This is primarily due to capital expenditure purchases of $1,778 during the year ended December 31, 2022 offset by depreciation expense of $9,795 for the same period. Property and equipment (in thousands), together with the related estimated useful lives at December 31, 2022 and 2021, were as follows: December 31, 2022 2021 Useful Lives Land, building and other $ 12,553 $ 15,156 3 to 40 years Recording equipment 147,675 148,330 5 to 10 years Vibrator energy sources 64,110 69,239 5 to 15 years Vehicles 20,492 20,341 1.5 to 10 years 244,830 253,066 Less accumulated depreciation (226,703) (226,717) Property and equipment, net $ 18,127 $ 26,349 |
Supplemental Consolidated Finan
Supplemental Consolidated Financial Statement Information | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Consolidated Financial Statement Information | |
Supplemental Consolidated Financial Statement Information | 5. Supplemental Consolidated Financial Statement Information Other Current Assets and Other Current Liabilities (in thousands) Prepaid expenses and other current assets consist of the following at December 31, 2022 and 2021: December 31, 2022 2021 Contract assets $ 5,433 $ 972 Prepaid expenses 2,252 1,101 Other assets 1,191 1,240 Other current assets $ 8,876 $ 3,313 The Company did not have any specific account within other current liabilities that accounted for more than 5% of total current liabilities at December 31, 2022. The Company had accrued self-insurance reserves of approximately $599 and other accrued expenses and current liabilities of $739 at December 31, 2021. Related Party Transactions (in thousands) As of December 31, 2022, the Company had accounts receivable due from related parties of $121. This receivable is due from Breckenridge Geophysical, LLC, which is a wholly owned subsidiary of Wilks Brothers, LLC, the holder of approximately 74.46% of the Company’s outstanding common stock. This receivable is primarily related to rental of seismic equipment to Breckenridge. For the year ended December 31, 2022, the Company received approximately $2,200 of related party revenue from Breckenridge. All outstanding receivables from Breckenridge have been received as of the filing of this 10-K. During 2021, the Company did not have any related party revenue. Disaggregated Revenues (in thousands) The Company has one line of business, acquiring and processing seismic data in North America. Our chief operating decision maker (President and CEO) makes operating decisions and assesses performance based on the Company as a whole. Accordingly, the Company is considered to be in a single reportable segment. The following table presents the Company’s operating revenues disaggregated by geographic region: Year Ended December 31, 2022 2021 Operating Revenues United States $ 22,202 $ 17,772 Canada 15,278 6,923 Total $ 37,480 $ 24,695 Deferred Costs (in thousands) Deferred costs were $972 and $1,847 at January 1, 2022 and 2021, respectively. The Company’s prepaid expenses and other current assets at December 31, 2022 and 2021 included deferred costs incurred to fulfill contracts with customers of $5,433 and $972, respectively. Deferred costs at December 31, 2022 compared to January 1, 2022 increased primarily as a result of new projects for clients with significant deferred fulfillment costs at December 31, 2022. Deferred costs at December 31, 2021 compared to January 1, 2021 decreased primarily as a result of the completion of several projects for clients with significant deferred fulfillment costs at the beginning of 2021. The amount of total deferred costs amortized for the years ended December 31, 2022 and 2021 was $6,824 and $6,563, respectively. There were no material impairment losses incurred during these periods. Deferred Revenue (in thousands) Deferred revenue was $1,344 and $1,779 at January 1, 2022 and 2021, respectively. The Company’s deferred revenue at December 31, 2022 and 2021 was $7,199 and $1,344, respectively. Deferred revenue at December 31, 2022 compared to January 1, 2022 increased primarily as a result of new projects for clients with large third party reimbursables where data has not yet been recorded. Deferred revenue at December 31, 2021 compared to January 1, 2021 decreased primarily as a result of completing multiple large projects for clients throughout 2021. Revenue recognized for the year ended December 31, 2022 that was included in the contract liability balance at the beginning of 2022 was $1,092. Revenue recognized for the year ended December 31, 2021 that was included in the contract liability balance at the beginning of 2021 was $1,779. Deferred revenue not recognized during 2022 relates to projects that have not yet started or were cancelled. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt | |
Debt | 6 . Debt Dominion Loan Agreement On September 30, 2019, the Company entered into a Loan and Security Agreement with Dominion Bank. On September 30, 2022, the Company entered into a Third Loan Modification Agreement to the Loan and Security Agreement for the purpose of (a) amending and extending the maturity of its line of credit with Dominion Bank by one year, (b) amending the principal amount under the Loan Agreement, (c) amending the interest rate under the Loan Agreement, (d) amending the Company’s obligation to maintain a certain tangible net worth and (e) adding the Company’s obligation to maintain a minimum liquidity amount. The Loan Agreement provides for a secured revolving credit facility in an amount up to the lesser of (i) $10,000,000 or (ii) a sum equal to (a) 80% of the Company’s eligible accounts receivable plus (b) 100% of the amount on deposit with Dominion Bank in the Company’s collateral account, including a restricted IntraFi Network Deposit account of $5,000,000. As of December 31, 2022, the Company has not borrowed any amounts under the Revolving Credit Facility and has approximately $9,017,000 available for withdrawal. Under the Revolving Credit Facility, interest will accrue at an annual rate equal to the lesser of (i) 7.75% and (ii) the greater of (a) the prime rate as published from time to time in The Wall Street Journal or (b) 4.75%. The Company will pay a commitment fee of 0.10% per annum on the difference of (a) $10,000,000 minus the Deposit minus (b) the daily average usage of the Revolving Credit Facility. The Loan Agreement contains customary covenants for credit facilities of this type, including limitations on disposition of assets. The Company is also obligated to meet certain financial covenants under the Loan Agreement, including maintaining a tangible net worth of not less than $38,000,000 and, to be tested as of the end of each calendar quarter, unencumbered liquid assets of not less than $5,000,000, and specified ratios with respect to current assets and liabilities and debt to tangible net worth. The Company received a limited waiver from Dominion Bank with respect to any non-compliance with the tangible net worth covenant for the period ended December 31, 2022. The Company’s obligations under the Loan Agreement are secured by a security interest in the collateral account (including the Deposit) with Dominion Bank and future accounts receivable and related collateral. The maturity date of the Loan Agreement is September 30, 2023. The Company does not currently have any notes payable under the Revolving Credit Facility. Dominion Letters of Credit As of December 31, 2022, Dominion Bank has issued one letter of credit in the amount of $265,000 to support the Company’s workers compensation insurance. The letter of credit is secured by a certificate of deposit with Dominion Bank. Other Indebtedness As of December 31, 2022, the Company has one note payable to a finance company for various insurance premiums totaling $205,000. In addition, the Company leases certain seismic recording equipment and vehicles under leases classified as finance leases. The Company’s Consolidated Balance Sheets as of December 31, 2022 and 2021 include finance leases of $277,000 and $45,000, respectively. Maturities of Debt The Company’s aggregate principal amount (in thousands) of outstanding notes payable and the interest rates and monthly payments as of December 31, 2022 and 2021 are as follows: December 31, 2022 December 31, 2021 Notes payable to finance company for insurance Aggregate principal amount outstanding $ 205 $ 265 Interest rate 8.24% 4.99% The Company’s aggregate maturities of finance leases (in thousands) at December 31, 2022 are as follows: January 2023 - December 2023 $ 70 January 2024 - December 2024 68 January 2025 - December 2025 139 Obligations under finance leases $ 277 Interest rates on these leases ranged from 5.37% to 7.66%. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 7. Leases The Company leases certain vehicles, seismic recording equipment, real property and office equipment under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating lease or finance lease for financial reporting purposes. The Company is the lessee in a lease contract when we obtain the right to control the asset. The majority of our operating leases are non-cancelable operating leases for office, shop and warehouse space in Midland, Plano, Houston, Oklahoma City and Calgary, Alberta. The components of lease cost (in thousands) for the years ended December 31, 2022 and 2021 were as follows: Year Ended December 31, 2022 2021 Finance lease cost Amortization of right-of-use assets $ 1,273 $ 1,350 Interest on lease liabilities 3 4 Total finance lease cost 1,276 1,354 Operating lease cost 1,242 1,338 Short-term lease cost — — Total lease cost $ 2,518 $ 2,692 Supplemental cash flow information related to leases (in thousands) for the years ended December 31, 2022 and 2021 was as follows: Year Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (1,271) $ (1,375) Operating cash flows from finance leases $ (3) $ (5) Financing cash flows from finance leases $ (47) $ (55) Right-of-use assets obtained in exchange for lease obligations Operating leases $ 598 $ 1 Finance leases $ — $ — Supplemental balance sheet information related to leases (in thousands) as of December 31, 2022 and 2021 was as follows: December 31, 2022 2021 Operating leases Operating lease right-of-use assets $ 4,010 $ 4,435 Operating lease liabilities - current $ 1,118 $ 961 Operating lease liabilities - long-term 3,331 3,942 Total operating lease liabilities $ 4,449 $ 4,903 Finance leases Property and equipment, at cost $ 8,942 $ 8,663 Accumulated depreciation (7,336) (6,293) Property and equipment, net $ 1,606 $ 2,370 Finance lease liabilities - current $ 70 $ 37 Finance lease liabilities - long-term 207 8 Total finance lease liabilities $ 277 $ 45 Weighted average remaining lease term Operating leases 3.9 years 4.8 years Finance leases 2.8 years 0.8 years Weighted average discount rate Operating leases 5.03% 5.04% Finance leases 7.21% 5.04% Maturities of lease liabilities (in thousands) at December 31, 2022 are as follows: Operating Leases Finance Leases January 2023 - December 2023 $ 1,316 $ 88 January 2024 - December 2024 1,311 81 January 2025 - December 2025 1,002 145 January 2026 - December 2026 1,021 — January 2027 - December 2027 267 — Thereafter — — Total payments under lease agreements 4,917 314 Less imputed interest (468) (37) Total lease liabilities $ 4,449 $ 277 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 8. Stock-Based Compensation Since the date of its effectiveness on May 5, 2016, the Company issues new grants of stock-based awards pursuant to the Dawson Geophysical Company 2016 Stock and Performance Incentive Plan (the “2016 Plan”). All of the Company’s prior plans have expired pursuant to their terms and no awards previously granted under prior plans remain outstanding. The awards outstanding and available under the 2016 Plan, as restated in 2020, and their associated accounting treatment are discussed below. In 2016, the Company adopted the 2016 Plan, which provides for the issuance of up to 1,000,000 shares of authorized Company common stock, which authorized amount was increased to 1,050,000 as a result of the 5% stock dividend approved by the Board on May 1, 2018. At the annual shareholders’ meeting on June 9, 2020, the Company’s shareholders approved a restated version of the 2016 Plan (the “Restated 2016 Plan”), which authorized an additional 1,000,000 shares. The total aggregate numbers of shares of Common Stock reserved under the Restated 2016 Plan is 2,050,000 shares. As of December 31, 2022, there were approximately 1,264,487 shares available for future issuance. The Restated 2016 Plan provides for the issuance of stock-based compensation awards, including stock options, common stock, restricted stock, restricted stock units and other forms. Stock option grant prices awarded under the Restated 2016 Plan may not be less than the fair market value of the common stock subject to such option on the grant date, and the term of stock options shall extend no more than ten years after the grant date. The Restated 2016 Plan terminates June 9, 2030. The Company’s employees and officers that hold unvested restricted stock awarded during 2016 or thereafter are not entitled to dividends when the Company pays dividends. Impact of Stock-Based Compensation The following table summarizes stock-based compensation expense (in thousands), which is included in operating or general and administrative expense, as appropriate, in the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Restricted stock unit awards $ 413 $ 419 Common stock awards — 60 Total compensation expense $ 413 $ 479 Stock Options There was no stock option activity during the years ended December 31, 2022 and 2021. There were no outstanding stock options as of December 31, 2022 or 2021. Restricted Stock Awards There was no restricted stock award activity during the years ended December 31, 2022 and 2021. Restricted Stock Unit Awards The Company did not grant any restricted stock unit awards during the year ended December 31, 2022. The Company granted 335,000 restricted stock unit awards during the year ended December 31, 2021 with a weighted average grant date fair value of $1.98. The fair value of restricted stock unit awards equals the market price of the Company’s stock on the grant date and generally vest in one A summary of the Company’s nonvested restricted stock unit awards as of December 31, 2022 and activity during the year then ended is as follows: Number of Restricted Stock Unit Awards Weighted Average Grant Date Fair Value Nonvested as of December 31, 2021 335,000 $ 1.98 Granted — $ — Vested (155,000) $ 1.98 Cash Settlement (180,000) $ 1.98 Forfeited — $ — Nonvested as of December 31, 2022 — $ — As of December 31, 2022, there was no unrecognized compensation cost related to nonvested restricted stock unit awards. The aggregate vesting date fair value of restricted stock units for the years ended December 31, 2022 and 2021 was $351,000 and $416,000, respectively. The aggregate cash settlement date fair value of restricted stock units for the years ended December 31, 2022 and 2021 was $301,000 and $0, respectively. An additional 5% over fair value of restricted stock units was issued for those who chose the cash settlement option with an aggregate value for the years ended December 31, 2022 and 2021 of $15,000 and $0, respectively. Common Stock Awards The Company granted common stock awards with immediate vesting to outside directors during the years ended December 31, 2022 and 2021 as follows: Number of Common Stock Awards Weighted Average Grant Date Fair Value Year ended December 31, 2022 — $ — Year ended December 31, 2021 23,272 $ 2.58 |
Dividends
Dividends | 12 Months Ended |
Dec. 31, 2022 | |
Dividends | |
Dividends | 9. Dividends The Company did not issue any stock dividends during calendar years 2022 or 2021. The Company has not paid cash dividends during calendar years 2022 and 2021. While there are currently no restrictions prohibiting the Company from paying cash dividends, the Board of Directors, after consideration of 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 cash dividend in respect of the Company’s common stock for the foreseeable future. Payment of any type of dividend in the future will be at the discretion of the Company’s board and will depend on the Company’s financial condition, results of operations, capital and legal requirements, and other factors deemed relevant by the board. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Employee Benefit Plans | |
Employee Benefit Plans | 10. Employee Benefit Plans The Company provides a 401(k) plan as part of its employee benefits package in order to retain quality personnel. The Company elected to match 100% of the employee contributions up to a maximum of 6% of the participant’s applicable compensation under its 401(k) plan for the years ended December 31, 2022 and 2021. The Company’s matching contributions under its 401(k) plan for the years ended December 31, 2022 and 2021 were approximately $537,000 and $483,000, respectively. |
Advertising Costs
Advertising Costs | 12 Months Ended |
Dec. 31, 2022 | |
Advertising Costs | |
Advertising Costs | 11. Advertising Costs Advertising costs are charged to expense as incurred. Advertising costs for the years ended December 31, 2022 and 2021 totaled $29,000 and $28,000, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | 12. Income Taxes The Company’s components of loss before income tax (in thousands) were as follows: Year Ended December 31, 2022 2021 Domestic $ (20,566) $ (25,931) Foreign 222 (3,186) Loss before income tax $ (20,344) $ (29,117) The Company’s components of income tax benefit (expense) (in thousands) were as follows: Year Ended December 31, 2022 2021 Current federal benefit $ 9 $ 21 Current state benefit — 6 Deferred federal expense (109) (159) Deferred state (expense) benefit (7) 158 Income tax (expense) benefit $ (107) $ 26 The income tax provision (in thousands) differs from the amount computed by applying the statutory federal income tax rate to loss before income tax as follows: Year Ended December 31, 2022 2021 Tax benefit computed at statutory rate of 21% $ 4,272 $ 6,047 Change in valuation allowance 15,352 (6,632) State income tax (expense) benefit, net of federal tax (5) 130 Foreign losses 70 706 Section 382 limited NOL (19,904) — Other 108 (225) Income tax (expense) benefit $ (107) $ 26 The CARES Act was enacted on March 27, 2020 resulting in tax law changes that impacted the Company by accelerating the AMT credit owed to the Company and allowed for a temporary change in NOL taxable income limitations. For tax years beginning January 1, 2018 and those prior to 2021, an NOL deduction equal to 100% of taxable income is allowed. Tax years 2021 and forward will revert back to the 80% limitation established by the 2017 Tax Cuts and Jobs Act. The Consolidated Appropriations Act, 2021 (“The ACT”) was enacted by Congress on December 27, 2020. The ACT did not have a material impact to the Company’s consolidated financial statements. The principal components of the Company’s net deferred tax assets (liabilities) (in thousands) were as follows: December 31, 2022 2021 Deferred tax assets: Federal tax net operating loss ("NOL") carryforward $ 13,373 $ 30,649 Foreign tax NOL carryforward 6,423 6,947 State tax NOL carryforward 1,398 2,194 Other comprehensive income 458 235 Deferred revenue 379 — Foreign deferred taxes 252 197 Right-of-use assets 80 125 Canadian start-up costs 74 90 Restricted stock and restricted stock unit awards — 55 Other 52 48 Self-insurance 37 45 Workers’ compensation 8 11 Gross deferred tax assets 22,534 40,596 Less valuation allowances (21,184) (37,571) Net deferred tax assets 1,350 3,025 Deferred tax liabilities: Property and equipment (1,486) (3,045) Net deferred tax liabilities $ (136) $ (20) Domestic deferred tax liabilities $ (136) $ (20) Foreign deferred tax liabilities — — Net deferred tax liabilities $ (136) $ (20) At December 31, 2022, the Company had a gross NOL for U.S. federal income tax purposes of approximately $158,460,000 but expects approximately $94,779,000 to expire unused due to the 382 event discussed below. The remaining NOL will begin to expire in 2027. Losses incurred after the year ended December 31, 2017 have no expiration. The Company will carry forward the tax benefits related to federal net NOL of approximately $13,373,000. The Company also had state net NOLs that will affect state taxes of approximately $1,398,000 at December 31, 2022. State NOLs began to expire in 2015 and continue to expire each year. The Company also had a Canadian gross NOL of $24,702,000 that will begin to expire in 2037. On January 14, 2022, the Company was subject to an Internal Revenue Code section 382 event that limited some of our NOL utilization in future periods. The 382 limitation rendered a substantial portion of the NOLs unusable and caused the Company to write off approximately $19,904,000 of the federal net NOLs against the valuation allowance. It also caused the Company to adjust the valuation allowance so we are still in a naked credit position domestically, but it did not have a material impact on tax expense. In evaluating the possible sources of taxable income during 2022, the Company determined it is more likely than not that the remaining deferred tax assets will not be realizable. As a result, the Company recorded full valuation allowance against foreign deferred tax assets and its federal and state deferred tax assets with the exception of its trademark intangible. At December 31, 2022 and 2021, the Company did not have any uncertain tax positions. The Company’s policy is to recognize interest and penalties related to an uncertain tax position in income tax expense. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2022 | |
Net Loss per Share | |
Net Loss per Share | 13. Net Loss per Share Basic net loss per share is computed by dividing the net loss by the weighted average shares outstanding. Diluted loss per share is computed by dividing the net loss by the weighted average diluted shares outstanding. The computation of basic and diluted loss per share (in thousands, except share and per share data) was as follows: Year Ended December 31, 2022 2021 Net loss $ (20,451) $ (29,091) Weighted average common shares outstanding Basic 23,782,796 23,570,455 Dilutive common stock options, restricted stock unit awards and restricted stock awards — — Diluted 23,782,796 23,570,455 Basic loss per share of common stock $ (0.86) $ (1.23) Diluted loss per share of common stock $ (0.86) $ (1.23) The Company had a net loss in the years ended December 31, 2022 and 2021. As a result, all stock options, restricted stock unit awards, and restricted stock awards were anti-dilutive and excluded from weighted average shares used in determining the diluted loss per share of common stock for the respective periods. The following weighted average numbers of stock options, restricted stock unit awards, and restricted stock awards have been excluded from the calculation of diluted loss per share of common stock, as their effect would be anti-dilutive for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Stock options — — Restricted stock units 147,191 197,687 Restricted stock awards — — Total 147,191 197,687 |
Major Clients
Major Clients | 12 Months Ended |
Dec. 31, 2022 | |
Major Clients | |
Major Clients | 14. Major Clients The Company operates in only one business segment, contract seismic data acquisition and processing services. Sales to these clients, as a percentage of operating revenues that exceeded 10%, were as follows: Year Ended December 31, 2022 2021 A 13% — B 12% — C 10% 12% D — 30% E — 23% |
Areas of Operation
Areas of Operation | 12 Months Ended |
Dec. 31, 2022 | |
Areas of Operation | |
Areas of Operation | 15. Areas of Operation The U.S. and Canada are the only countries of operation for the Company. The following tables present the Company’s operating revenues, net property and equipment, and right-of-use assets (in thousands) by area of operation: Year Ended December 31, 2022 2021 Operating Revenues United States $ 22,202 $ 17,772 Canada 15,278 6,923 Total $ 37,480 $ 24,695 Year Ended December 31, 2022 2021 Net Property and Equipment United States $ 15,370 $ 22,446 Canada 2,757 3,903 Total $ 18,127 $ 26,349 Year Ended December 31, 2022 2021 Right-of-use Assets United States $ 3,722 $ 3,977 Canada 288 458 Total $ 4,010 $ 4,435 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 16. Commitments and Contingencies 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 consolidated financial condition, results of operations or liquidity, as the Company believes it is adequately indemnified and insured. The Company is also party to the following legal proceeding: On April 1, 2019, Weatherford International, LLC and Weatherford U.S., L.P. (collectively, “Weatherford”) filed a petition in state district court for Midland County, Texas, in which the Company and eighteen other parties were named as defendants, alleging the Company and/or the other named defendants contributed to or caused contamination of groundwater at and around property owned by Weatherford. Weatherford is seeking declaratory judgment, recovery and contribution for past and future costs incurred in responding to or correcting the contamination at and around the property from each defendant. The Company disputes Weatherford’s allegations with respect to the Company and intends to vigorously defend itself in this case. Subsequent to the filing of the petition, Weatherford filed for bankruptcy protection on July 1, 2019. While the outcome and impact of this legal proceeding on the Company cannot be predicted with certainty, based on currently available information, management believes that the resolution of this proceeding will not have a material adverse effect on our consolidated financial condition, results of operations or liquidity. Additionally, 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 experienced in the past, and may experience in the future, disputes that could affect its revenues and results of operations in any period. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2022 | |
Recently Issued Accounting Pronouncements | |
Recently Issued Accounting Pronouncements | 17. Recently Issued Accounting Pronouncements None. |
Concentrations of Credit Risk
Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2022 | |
Concentrations of Credit Risk | |
Concentrations of Credit Risk | 18. Concentrations of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk at any given time may consist of cash and cash equivalents, restricted cash, money market funds and overnight investment accounts, short-term investments in certificates of deposit, trade and other receivables and other current assets. At December 31, 2022 and 2021, the Company had deposits with domestic and international banks in excess of federally insured limits. Management believes the credit risk associated with these deposits is minimal. Money market funds seek to preserve the value of the investment, but it is possible to lose money investing in these funds. The Company’s sales are to clients whose activities relate to oil and natural gas exploration and production. The Company generally extends unsecured credit to these clients; therefore, collection of receivables may be affected by the economy surrounding the oil and natural gas industry or other economic conditions. The Company closely monitors extensions of credit and may negotiate payment terms that mitigate risk. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Organization and Nature of Operations | Organization and Nature of Operations The Company is a leading provider of onshore seismic data acquisition and processing services. 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. The Company operates in the lower 48 states of the U.S. and in Canada. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Dawson Operating LLC, Dawson Seismic Services Holdings, Inc., Eagle Canada, Inc., Eagle Canada Seismic Services ULC and Exploration Surveys, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. |
Cash Equivalents | Cash Equivalents For purposes of the consolidated financial statements, 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 The Company’s allowance for doubtful accounts reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument and is determined based on a number of factors. Management determines the need for any allowance for doubtful accounts receivable based on its review of past-due accounts, its past experience of historical write-offs, its current client base, when customer accounts exceed 90 days past due and specific customer account reviews. 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. With the adoption of ASU No. 2016-13 in 2020, the Company made an accounting policy election to write off accrued interest amounts by reversing interest income. The Company's allowance for doubtful accounts was $250,000 at December 31, 2022 and 2021. |
Employee Retention Credit Receivable | Employee Retention Credit Receivable Under the provisions of the CARES Act, the Company was eligible and, in April 2022, applied for a refundable employee retention credit subject to program conditions and requirements. The Company recognizes these credits as a gain when all uncertainties have been met and the amounts are realizable in accordance with similar gain contingencies. The Company recognized $2,966,000 as a gain in other income and $69,000 as interest income in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2022 and recognized $3,035,000 as an employee retention credit receivable in the Consolidated Balance Sheet as of December 31, 2022. Payments were received in January 2023. No additional credits are expected to be received. |
Property and Equipment | Property and Equipment Property and equipment is capitalized at historical cost or the fair value of assets acquired in a business combination and is depreciated over the useful life of the asset. Management’s estimation of this useful life 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. |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment when triggering events occur suggesting 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. No impairment charges were recognized for the years ended December 31, 2022 and 2021. |
Leases | Leases The Company leases certain vehicles, seismic recording equipment, real property and office equipment under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating lease or a finance lease for financial reporting purposes. The Company is the lessee in a lease contract when we obtain the right to control the asset. The majority of our operating leases are non-cancelable operating leases for office, shop and warehouse space in Midland, Plano, Houston, Oklahoma City and Calgary, Alberta. The assets and liabilities under finance 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 finance leases are amortized using the straight-line method over the initial lease term. Amortization of assets under finance leases is included in depreciation expense. For operating leases, where readily determinable, the Company uses the implicit interest rate in determining the present value of future minimum lease payments. In the absence of an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date. The Company gives consideration to its outstanding debt, as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The ROU assets are amortized to operating lease cost over the lease terms on a straight-line basis and is included in operating expense. The Company does not recognize leases with an initial term of 12 months or less and does not separate lease and non-lease components. Several of the Company’s leases include options to renew, with renewal terms that can extend from one |
Intangibles | Intangibles The Company has intangible assets consisting primarily of trademarks/tradenames (which are not amortized) resulting from a business combination. The Company tests for impairment on an annual basis during the fourth quarter, 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. No impairment charges were recognized for the years ended December 31, 2022 and 2021. |
Revenue Recognition | Revenue Recognition Services are provided under cancelable service contracts which usually have an original expected duration of one year or less. These contracts are either turnkey or term agreements. Under both types of agreements, the Company recognizes revenues as the services are performed. Revenue is generally recognized based on square miles of data recorded compared to total square miles anticipated to be recorded on the survey using the total estimated revenue for the service contract. In the case of a cancelled service contract, the client is billed and revenue is recognized for any third party charges and square miles of data recorded up to the date of cancellation. The Company receives reimbursements for certain out-of-pocket expenses under the terms of the service contracts. The amounts billed to clients are included at their gross amount in the total estimated revenue for the service contract. Clients are billed as permitted by the service contract. Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and cash collections. If billing occurs prior to the revenue recognition or billing exceeds the revenue recognized, the amount is considered deferred revenue and a contract liability. Conversely, if the revenue recognition exceeds the billing, the excess is considered an unbilled receivable and a contract asset. As services are performed, those deferred revenue amounts are recognized as revenue. In some instances, third-party permitting, surveying, drilling, helicopter, equipment rental and mobilization costs that directly relate to the contract are utilized to fulfill the contract obligations. These fulfillment costs are capitalized in other current assets and generally amortized based on the total square miles of data recorded compared to total square miles anticipated to be recorded on the survey using the total estimated fulfillment costs for the service contract. Estimates for total revenue and total fulfillment cost on any service contract are based on certain qualitative and quantitative judgments supported by underlying facts. Management considers a variety of factors such as whether various components of the performance obligation will be performed internally or externally, cost of third party services, and facts and circumstances unique to the performance obligation in making these estimates. Additionally, the Company’s policy includes (i) ignoring the financing component when estimating the transaction price for service contracts completed within one year, (ii) excluding sales tax collected from the customer when determining the transaction price, and (iii) expensing incremental costs to obtain a customer contract if the amortization period for those costs would otherwise be one year or less. |
Stock-Based Compensation | Stock-Based Compensation The Company measures all stock-based compensation awards, which include stock options, restricted stock, restricted stock units and common stock awards, using the fair value method and recognizes compensation expense, net of actual forfeitures, 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 awards. |
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. Any transactions denominated in a currency other than the functional currency are remeasured with the resulting unrealized gain or loss recognized in the Consolidated Statements of Operations and Comprehensive Loss as other income (expense). All assets and liabilities in the functional currency are then translated into U.S. Dollars at the exchange rate on the consolidated balance sheet date. Income and expenses are translated using the exchange rate applicable to each transaction. Equity transactions are translated using historical exchange rates. Adjustments resulting from translation are recorded as a separate component of accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. Realized foreign currency transaction gains (losses) are included in the Consolidated Statements of Operations and Comprehensive Loss as other income (expense). |
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 consolidated 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 of 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. Due to recent operating losses and valuation allowances, the Company may recognize reduced or no tax benefits on future losses on the Consolidated Statements of Operations and Comprehensive Loss. The Company’s effective tax rates differ from the statutory federal rate of 21% for certain items such as state and local taxes, valuation allowances, non-deductible expenses and discrete items. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements Preparation of the accompanying consolidated financial statements in conformity with GAAP 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 consolidated 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. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Schedule of property and equipment | Net book value of property and equipment (in thousands) decreased $8,222 or 31.1% from December 31, 2021 to December 31, 2022. This is primarily due to capital expenditure purchases of $1,778 during the year ended December 31, 2022 offset by depreciation expense of $9,795 for the same period. Property and equipment (in thousands), together with the related estimated useful lives at December 31, 2022 and 2021, were as follows: December 31, 2022 2021 Useful Lives Land, building and other $ 12,553 $ 15,156 3 to 40 years Recording equipment 147,675 148,330 5 to 10 years Vibrator energy sources 64,110 69,239 5 to 15 years Vehicles 20,492 20,341 1.5 to 10 years 244,830 253,066 Less accumulated depreciation (226,703) (226,717) Property and equipment, net $ 18,127 $ 26,349 |
Supplemental Consolidated Fin_2
Supplemental Consolidated Financial Statement Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Consolidated Financial Statement Information | |
Summary of prepaid expenses and other current assets | December 31, 2022 2021 Contract assets $ 5,433 $ 972 Prepaid expenses 2,252 1,101 Other assets 1,191 1,240 Other current assets $ 8,876 $ 3,313 |
Schedule of operating revenues disaggregated by geographic region | The following table presents the Company’s operating revenues disaggregated by geographic region: Year Ended December 31, 2022 2021 Operating Revenues United States $ 22,202 $ 17,772 Canada 15,278 6,923 Total $ 37,480 $ 24,695 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt | |
Schedule of aggregate principal amount of outstanding notes payable and the interest rates | The Company’s aggregate principal amount (in thousands) of outstanding notes payable and the interest rates and monthly payments as of December 31, 2022 and 2021 are as follows: December 31, 2022 December 31, 2021 Notes payable to finance company for insurance Aggregate principal amount outstanding $ 205 $ 265 Interest rate 8.24% 4.99% |
Schedule of aggregate maturities of finance leases | December 31, 2022 December 31, 2021 Notes payable to finance company for insurance Aggregate principal amount outstanding $ 205 $ 265 Interest rate 8.24% 4.99% |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of lease cost, cash flow information and balance sheet information related to operating and finance leases | The components of lease cost (in thousands) for the years ended December 31, 2022 and 2021 were as follows: Year Ended December 31, 2022 2021 Finance lease cost Amortization of right-of-use assets $ 1,273 $ 1,350 Interest on lease liabilities 3 4 Total finance lease cost 1,276 1,354 Operating lease cost 1,242 1,338 Short-term lease cost — — Total lease cost $ 2,518 $ 2,692 Supplemental cash flow information related to leases (in thousands) for the years ended December 31, 2022 and 2021 was as follows: Year Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (1,271) $ (1,375) Operating cash flows from finance leases $ (3) $ (5) Financing cash flows from finance leases $ (47) $ (55) Right-of-use assets obtained in exchange for lease obligations Operating leases $ 598 $ 1 Finance leases $ — $ — Supplemental balance sheet information related to leases (in thousands) as of December 31, 2022 and 2021 was as follows: December 31, 2022 2021 Operating leases Operating lease right-of-use assets $ 4,010 $ 4,435 Operating lease liabilities - current $ 1,118 $ 961 Operating lease liabilities - long-term 3,331 3,942 Total operating lease liabilities $ 4,449 $ 4,903 Finance leases Property and equipment, at cost $ 8,942 $ 8,663 Accumulated depreciation (7,336) (6,293) Property and equipment, net $ 1,606 $ 2,370 Finance lease liabilities - current $ 70 $ 37 Finance lease liabilities - long-term 207 8 Total finance lease liabilities $ 277 $ 45 Weighted average remaining lease term Operating leases 3.9 years 4.8 years Finance leases 2.8 years 0.8 years Weighted average discount rate Operating leases 5.03% 5.04% Finance leases 7.21% 5.04% |
Schedule of maturities of lease liabilities - Operating Leases | Maturities of lease liabilities (in thousands) at December 31, 2022 are as follows: Operating Leases Finance Leases January 2023 - December 2023 $ 1,316 $ 88 January 2024 - December 2024 1,311 81 January 2025 - December 2025 1,002 145 January 2026 - December 2026 1,021 — January 2027 - December 2027 267 — Thereafter — — Total payments under lease agreements 4,917 314 Less imputed interest (468) (37) Total lease liabilities $ 4,449 $ 277 |
Schedule of maturities of lease liabilities - Finance Leases | Maturities of lease liabilities (in thousands) at December 31, 2022 are as follows: Operating Leases Finance Leases January 2023 - December 2023 $ 1,316 $ 88 January 2024 - December 2024 1,311 81 January 2025 - December 2025 1,002 145 January 2026 - December 2026 1,021 — January 2027 - December 2027 267 — Thereafter — — Total payments under lease agreements 4,917 314 Less imputed interest (468) (37) Total lease liabilities $ 4,449 $ 277 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation | |
Summary of stock-based compensation expense | The following table summarizes stock-based compensation expense (in thousands), which is included in operating or general and administrative expense, as appropriate, in the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Restricted stock unit awards $ 413 $ 419 Common stock awards — 60 Total compensation expense $ 413 $ 479 |
Summary of the Company's nonvested restricted stock unit awards | A summary of the Company’s nonvested restricted stock unit awards as of December 31, 2022 and activity during the year then ended is as follows: Number of Restricted Stock Unit Awards Weighted Average Grant Date Fair Value Nonvested as of December 31, 2021 335,000 $ 1.98 Granted — $ — Vested (155,000) $ 1.98 Cash Settlement (180,000) $ 1.98 Forfeited — $ — Nonvested as of December 31, 2022 — $ — |
Summary of common stock awards with immediate vesting to outside directors | The Company granted common stock awards with immediate vesting to outside directors during the years ended December 31, 2022 and 2021 as follows: Number of Common Stock Awards Weighted Average Grant Date Fair Value Year ended December 31, 2022 — $ — Year ended December 31, 2021 23,272 $ 2.58 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of components of loss before income tax | The Company’s components of loss before income tax (in thousands) were as follows: Year Ended December 31, 2022 2021 Domestic $ (20,566) $ (25,931) Foreign 222 (3,186) Loss before income tax $ (20,344) $ (29,117) |
Schedule of components of income tax benefit (expense) | The Company’s components of income tax benefit (expense) (in thousands) were as follows: Year Ended December 31, 2022 2021 Current federal benefit $ 9 $ 21 Current state benefit — 6 Deferred federal expense (109) (159) Deferred state (expense) benefit (7) 158 Income tax (expense) benefit $ (107) $ 26 |
Schedule of the difference between the income tax provision and the amount computed by applying the statutory federal income tax rate to loss before income tax | The income tax provision (in thousands) differs from the amount computed by applying the statutory federal income tax rate to loss before income tax as follows: Year Ended December 31, 2022 2021 Tax benefit computed at statutory rate of 21% $ 4,272 $ 6,047 Change in valuation allowance 15,352 (6,632) State income tax (expense) benefit, net of federal tax (5) 130 Foreign losses 70 706 Section 382 limited NOL (19,904) — Other 108 (225) Income tax (expense) benefit $ (107) $ 26 |
Schedule of the principal components of the Company's net deferred tax assets (liabilities) | The principal components of the Company’s net deferred tax assets (liabilities) (in thousands) were as follows: December 31, 2022 2021 Deferred tax assets: Federal tax net operating loss ("NOL") carryforward $ 13,373 $ 30,649 Foreign tax NOL carryforward 6,423 6,947 State tax NOL carryforward 1,398 2,194 Other comprehensive income 458 235 Deferred revenue 379 — Foreign deferred taxes 252 197 Right-of-use assets 80 125 Canadian start-up costs 74 90 Restricted stock and restricted stock unit awards — 55 Other 52 48 Self-insurance 37 45 Workers’ compensation 8 11 Gross deferred tax assets 22,534 40,596 Less valuation allowances (21,184) (37,571) Net deferred tax assets 1,350 3,025 Deferred tax liabilities: Property and equipment (1,486) (3,045) Net deferred tax liabilities $ (136) $ (20) Domestic deferred tax liabilities $ (136) $ (20) Foreign deferred tax liabilities — — Net deferred tax liabilities $ (136) $ (20) |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Net Loss per Share | |
Schedule of computation of basic and diluted loss per share | The computation of basic and diluted loss per share (in thousands, except share and per share data) was as follows: Year Ended December 31, 2022 2021 Net loss $ (20,451) $ (29,091) Weighted average common shares outstanding Basic 23,782,796 23,570,455 Dilutive common stock options, restricted stock unit awards and restricted stock awards — — Diluted 23,782,796 23,570,455 Basic loss per share of common stock $ (0.86) $ (1.23) Diluted loss per share of common stock $ (0.86) $ (1.23) |
Schedule of weighted average numbers of stock options, restricted stock unit awards, and restricted stock awards that have been excluded from the calculation of diluted loss per share of common stock | Year Ended December 31, 2022 2021 Stock options — — Restricted stock units 147,191 197,687 Restricted stock awards — — Total 147,191 197,687 |
Major Clients (Tables)
Major Clients (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Major Clients | |
Schedule of sales to major clients, as a percentage of operating revenues | Year Ended December 31, 2022 2021 A 13% — B 12% — C 10% 12% D — 30% E — 23% |
Areas of Operation (Tables)
Areas of Operation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Areas of Operation | |
Schedule of operating revenues, net property and equipment, and right-of-use assets by area of operation | The following tables present the Company’s operating revenues, net property and equipment, and right-of-use assets (in thousands) by area of operation: Year Ended December 31, 2022 2021 Operating Revenues United States $ 22,202 $ 17,772 Canada 15,278 6,923 Total $ 37,480 $ 24,695 Year Ended December 31, 2022 2021 Net Property and Equipment United States $ 15,370 $ 22,446 Canada 2,757 3,903 Total $ 18,127 $ 26,349 Year Ended December 31, 2022 2021 Right-of-use Assets United States $ 3,722 $ 3,977 Canada 288 458 Total $ 4,010 $ 4,435 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Number of states in which the Company operates | item | 48 | |
Threshold period of past due (in days) | 90 days | |
Allowance for doubtful accounts | $ 250,000 | $ 250,000 |
Gain from employee retention credit | 2,966,000 | |
Employee retention credit receivable | 3,035,000 | |
Additional credits expected to be received | 0 | |
Impairment of long-lived assets | $ 0 | 0 |
Option to extend | true | |
Impairment of intangibles | $ 0 | $ 0 |
Maximum original expected duration of cancelable service contracts (in years) | 1 year | |
Practical expedient, financing component | true | |
Statutory federal rate (as a percent) | 21% | 21% |
Other income | ||
Gain from employee retention credit | $ 2,966,000 | |
Interest income | ||
Gain from employee retention credit | $ 69,000 | |
Minimum | ||
Renewal terms (in years) | 1 year | |
Maximum | ||
Renewal terms (in years) | 10 years |
Short-Term Investments (Details
Short-Term Investments (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Minimum | ||
Maturity period of certificates of deposit | 3 months | 3 months |
Maximum | ||
Maturity period of certificates of deposit | 1 year | 1 year |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment | ||
Net book value of property and equipment decreased | $ 8,222 | |
Net book value of property and equipment decreased (as a percent) | 31.10% | |
Capital expenditure purchases | $ 1,778 | |
Depreciation expense | 9,795 | |
Property and equipment, Gross | 244,830 | $ 253,066 |
Less accumulated depreciation | (226,703) | (226,717) |
Property and equipment, net | 18,127 | 26,349 |
Land, building and other | ||
Property, Plant and Equipment | ||
Property and equipment, Gross | $ 12,553 | $ 15,156 |
Land, building and other | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful lives of property and equipment (in years) | 3 years | 3 years |
Land, building and other | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful lives of property and equipment (in years) | 40 years | 40 years |
Recording equipment | ||
Property, Plant and Equipment | ||
Property and equipment, Gross | $ 147,675 | $ 148,330 |
Recording equipment | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful lives of property and equipment (in years) | 5 years | 5 years |
Recording equipment | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful lives of property and equipment (in years) | 10 years | 10 years |
Vibrator energy sources | ||
Property, Plant and Equipment | ||
Property and equipment, Gross | $ 64,110 | $ 69,239 |
Vibrator energy sources | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful lives of property and equipment (in years) | 5 years | 5 years |
Vibrator energy sources | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful lives of property and equipment (in years) | 15 years | 15 years |
Vehicles | ||
Property, Plant and Equipment | ||
Property and equipment, Gross | $ 20,492 | $ 20,341 |
Vehicles | Minimum | ||
Property, Plant and Equipment | ||
Estimated useful lives of property and equipment (in years) | 1 year 6 months | 1 year 6 months |
Vehicles | Maximum | ||
Property, Plant and Equipment | ||
Estimated useful lives of property and equipment (in years) | 10 years | 10 years |
Supplemental Consolidated Fin_3
Supplemental Consolidated Financial Statement Information - Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Supplemental Consolidated Financial Statement Information | ||
Contract assets | $ 5,433 | $ 972 |
Prepaid expenses | 2,252 | 1,101 |
Other assets | 1,191 | 1,240 |
Other current assets | $ 8,876 | $ 3,313 |
Supplemental Consolidated Fin_4
Supplemental Consolidated Financial Statement Information - Other Current Liabilities (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Other current liabilities | |
Accrued self-insurance reserves | $ 599 |
Other accrued expenses and current liabilities | $ 739 |
Supplemental Consolidated Fin_5
Supplemental Consolidated Financial Statement Information - Related party transactions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Breckenridge Geophysical, LLC | |
Related Party Transaction [Line Items] | |
Accounts receivable due from related parties | $ 121 |
Related party revenue | $ 2,200 |
Wilks Brothers, LLC | Dawson Geophysical Company | |
Related Party Transaction [Line Items] | |
Percentage of common stock owned | 74.46% |
Supplemental Consolidated Fin_6
Supplemental Consolidated Financial Statement Information - Disaggregated Revenues (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
Number of business segments | segment | 1 | |
Operating Revenues | $ 37,480 | $ 24,695 |
United States | ||
Operating Revenues | 22,202 | 17,772 |
Canada | ||
Operating Revenues | $ 15,278 | $ 6,923 |
Supplemental Consolidated Fin_7
Supplemental Consolidated Financial Statement Information - Deferred Costs and Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2022 | Jan. 01, 2021 | |
Deferred costs | $ 972 | $ 1,847 | ||
Total deferred costs amortized | $ 6,824 | $ 6,563 | ||
Deferred costs impairment losses | 0 | 0 | ||
Deferred revenue | 7,199 | 1,344 | $ 1,344 | $ 1,779 |
Revenue recognized that was included in deferred revenue balances at beginning of period | 1,092 | 1,779 | ||
Prepaid expenses and other current assets | ||||
Deferred costs | $ 5,433 | $ 972 |
Debt (Details)
Debt (Details) | 1 Months Ended | ||
Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) instrument item | Dec. 31, 2021 USD ($) | |
DEBT | |||
Restricted IntraFi Network account | $ 5,000,000 | $ 5,000,000 | |
Finance lease | 277,000 | 45,000 | |
Dominion Loan Agreement | |||
DEBT | |||
Maturity of line of credit extended | 1 year | ||
Maximum borrowing capacity | $ 10,000,000 | ||
Percentage of maximum borrowing capacity on eligible accounts receivable | 80% | ||
Percentage of maximum borrowing capacity on deposit with lender | 100% | ||
Restricted IntraFi Network account | $ 5,000,000 | ||
Available for withdrawal | $ 9,017,000 | ||
Commitment fee (as a percent) | 0.10% | ||
Minimum tangible net worth | $ 38,000,000 | ||
Minimum unencumbered liquid assets | $ 5,000,000 | ||
Dominion Loan Agreement | Minimum | |||
DEBT | |||
Interest rate (as a percent) | 4.75% | ||
Dominion Loan Agreement | Maximum | |||
DEBT | |||
Interest rate (as a percent) | 7.75% | ||
Dominion Letters of Credit | |||
DEBT | |||
Number of letters of credit | item | 1 | ||
Amount of letter of credit | $ 265,000 | ||
Notes payable to finance companies for insurance | |||
DEBT | |||
Aggregate principal amount outstanding | $ 205,000 | $ 265,000 | |
Interest rate (as a percent) | 8.24% | 4.99% | |
Number of notes payable | instrument | 1 | ||
Total insurance premiums | $ 205,000 |
Debt - Aggregate principal amou
Debt - Aggregate principal amount and interest rates (Details) - Notes payable to finance companies for insurance - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
DEBT | ||
Aggregate principal amount outstanding | $ 205 | $ 265 |
Interest rate (as a percent) | 8.24% | 4.99% |
Debt - Maturities (Details)
Debt - Maturities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Aggregate maturities of finance leases | ||
January 2023 - December 2023 | $ 70,000 | |
January 2024 - December 2024 | 68,000 | |
January 2025 - December 2025 | 139,000 | |
Obligations under finance leases | $ 277,000 | $ 45,000 |
Minimum | ||
Aggregate maturities of finance leases | ||
Interest rate on leases | 5.37% | |
Maximum | ||
Aggregate maturities of finance leases | ||
Interest rate on leases | 7.66% |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Amortization of right-of-use assets | $ 1,273 | $ 1,350 |
Interest on lease liabilities | 3 | 4 |
Total finance lease cost | 1,276 | 1,354 |
Operating lease cost | 1,242 | 1,338 |
Total lease cost | $ 2,518 | $ 2,692 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Operating cash flows from operating leases | $ (1,271) | $ (1,375) |
Operating cash flows from finance leases | (3) | (5) |
Financing cash flows from finance leases | (47) | (55) |
Right-of-use assets obtained in exchange for operating leases | $ 598 | $ 1 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating leases | ||
Operating lease right-of-use assets | $ 4,010,000 | $ 4,435,000 |
Operating lease liabilities - current | 1,118,000 | 961,000 |
Operating lease liabilities - long-term | 3,331,000 | 3,942,000 |
Total operating lease liabilities | 4,449,000 | 4,903,000 |
Finance leases | ||
Property and equipment, at cost | 8,942,000 | 8,663,000 |
Accumulated depreciation | (7,336,000) | (6,293,000) |
Property and equipment, net | $ 1,606,000 | $ 2,370,000 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization |
Finance lease liabilities - current | $ 70,000 | $ 37,000 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Long-term Debt and Capital Lease Obligations, Current | Long-term Debt and Capital Lease Obligations, Current |
Finance lease liabilities - long-term | $ 207,000 | $ 8,000 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term Debt and Capital Lease Obligations | Long-term Debt and Capital Lease Obligations |
Obligations under finance leases | $ 277,000 | $ 45,000 |
Weighted average remaining lease term: | ||
Operating leases | 3 years 10 months 24 days | 4 years 9 months 18 days |
Finance leases | 2 years 9 months 18 days | 9 months 18 days |
Weighted average discount rate: | ||
Operating leases | 5.03% | 5.04% |
Finance leases | 7.21% | 5.04% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
January 2023 - December 2023 | $ 1,316,000 | |
January 2024 - December 2024 | 1,311,000 | |
January 2025 - December 2025 | 1,002,000 | |
January 2026 - December 2026 | 1,021,000 | |
January 2027 - December 2027 | 267,000 | |
Total payments under lease agreements | 4,917,000 | |
Less imputed interest | (468,000) | |
Total lease liabilities | 4,449,000 | $ 4,903,000 |
Finance Leases | ||
January 2023 - December 2023 | 88,000 | |
January 2024 - December 2024 | 81,000 | |
January 2025 - December 2025 | 145,000 | |
Total payments under lease agreements | 314,000 | |
Less imputed interest | (37,000) | |
Total lease liabilities | $ 277,000 | $ 45,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Jun. 09, 2020 | May 01, 2018 | May 05, 2016 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2016 | |
Stock-Based Compensation Plans | ||||||
Number of awards previously granted under prior plans remains outstanding | 0 | |||||
Stock-based compensation expense | $ 413 | $ 479 | ||||
Restricted stock units | ||||||
Stock-Based Compensation Plans | ||||||
Stock-based compensation expense | $ 413 | 419 | ||||
Common stock awards | ||||||
Stock-Based Compensation Plans | ||||||
Stock-based compensation expense | $ 60 | |||||
The 2016 Plan | ||||||
Stock-Based Compensation Plans | ||||||
Number of shares authorized | 1,050,000 | 1,000,000 | ||||
Percentage of stock dividend approved by the board | 5% | |||||
Restated 2016 Plan | ||||||
Stock-Based Compensation Plans | ||||||
Number of shares authorized | 2,050,000 | |||||
Number of additional shares authorized | 1,000,000 | |||||
Shares available for future issuance | 1,264,487 | |||||
Option expiration term | 10 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-Based Compensation | ||
Outstanding stock options | 0 | 0 |
Options granted (in shares) | 0 | 0 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards, Restricted Stock Unit Awards and Common Stock Awards (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted stock | ||
Number of Restricted Stock Unit Awards | ||
Granted (in shares) | 0 | 0 |
Restricted stock units | ||
Number of Restricted Stock Unit Awards | ||
Nonvested restricted shares outstanding, beginning balance (in shares) | 335,000 | |
Granted (in shares) | 0 | 335,000 |
Vested (in shares) | (155,000) | |
Cash Settlement (in shares) | (180,000) | |
Nonvested restricted shares outstanding, ending balance (in shares) | 335,000 | |
Weighted Average Grant-Date Fair Value | ||
Nonvested restricted shares outstanding, beginning balance (in dollars per share) | $ 1.98 | |
Vested (in dollars per share) | 1.98 | |
Cash Settlement (in dollars per share) | $ 1.98 | |
Nonvested restricted shares outstanding, ending balance (in dollars per share) | $ 1.98 | |
Additional disclosures | ||
Annual increment period | 3 years | |
Unrecognized compensation cost | $ 0 | |
Aggregate vesting date fair value of restricted awards | 351,000 | $ 416,000 |
Aggregate cash settlement date fair value | $ 301,000 | 0 |
Additional percentage over fair value of restricted stock units issued for those who chose the cash settlement option | 5% | |
Aggregate value | $ 15,000 | $ 0 |
Restricted stock units | Minimum | ||
Additional disclosures | ||
Vesting period | 1 year | |
Restricted stock units | Maximum | ||
Additional disclosures | ||
Vesting period | 3 years | |
Common stock awards | ||
Number of Restricted Stock Unit Awards | ||
Granted (in shares) | 23,272 | |
Weighted Average Grant-Date Fair Value | ||
Granted (in dollars per share) | $ 2.58 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Benefit Plans | ||
Employer matching contribution, percent matched | 100% | 100% |
Percentage of employees gross pay that is matched | 6% | 6% |
Matching contribution to the plan | $ 537,000 | $ 483,000 |
Advertising Costs (Details)
Advertising Costs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Advertising Costs | ||
Advertising costs | $ 29,000 | $ 28,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 14, 2022 | |
Loss before income taxes | |||
Domestic | $ (20,566,000) | $ (25,931,000) | |
Foreign | 222,000 | (3,186,000) | |
Loss before income tax | (20,344,000) | (29,117,000) | |
Income tax (expense) benefit | |||
Current federal benefit | 9,000 | 21,000 | |
Current state benefit | 6,000 | ||
Deferred federal expense | (109,000) | (159,000) | |
Deferred state (expense) benefit | (7,000) | 158,000 | |
Income tax (expense) benefit | $ (107,000) | $ 26,000 | |
Reconciliation of income tax provision | |||
Federal income tax rate (as a percent) | 21% | 21% | |
Tax benefit computed at statutory rate of 21% | $ 4,272,000 | $ 6,047,000 | |
Change in valuation allowance | 15,352,000 | (6,632,000) | |
State income tax (expense) benefit, net of federal tax | (5,000) | 130,000 | |
Foreign losses | 70,000 | 706,000 | |
Section 382 limited NOL | (19,904,000) | ||
Other | 108,000 | (225,000) | |
Income tax (expense) benefit | (107,000) | 26,000 | |
Deferred tax assets: | |||
Federal tax net operating loss ("NOL") carryforward | 13,373,000 | 30,649,000 | |
Foreign tax NOL carryforward | 6,423,000 | 6,947,000 | |
State tax NOL carryforward | 1,398,000 | 2,194,000 | |
Other comprehensive income | 458,000 | 235,000 | |
Deferred revenue | 379,000 | ||
Foreign deferred taxes | 252,000 | 197,000 | |
Right-of-use assets | 80,000 | 125,000 | |
Canadian start-up costs | 74,000 | 90,000 | |
Restricted stock and restricted stock unit awards | 55,000 | ||
Other | 52,000 | 48,000 | |
Self-insurance | 37,000 | 45,000 | |
Workers' compensation | 8,000 | 11,000 | |
Gross deferred tax assets | 22,534,000 | 40,596,000 | |
Less valuation allowances | (21,184,000) | (37,571,000) | |
Net deferred tax assets | 1,350,000 | 3,025,000 | |
Deferred tax liabilities: | |||
Property and equipment | (1,486,000) | (3,045,000) | |
Net deferred tax liabilities | (136,000) | (20,000) | |
Unrecognized Tax Benefits | 0 | 0 | |
Canada | |||
Deferred tax liabilities: | |||
Net operating loss carry forwards | 24,702,000 | ||
Federal | |||
Deferred tax liabilities: | |||
Net deferred tax liabilities | (136,000) | $ (20,000) | |
Net operating loss carry forwards | 158,460,000 | ||
Amount expects to expire unused | 94,779,000 | ||
Write off of NOLs against the valuation allowance | $ 19,904,000 | ||
Tax benefits carry forward | 13,373,000 | ||
State | |||
Deferred tax liabilities: | |||
Net operating loss carry forwards | $ 1,398,000 |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net Loss per Share | ||
Net loss | $ (20,451) | $ (29,091) |
Weighted average common shares outstanding: | ||
Basic | 23,782,796 | 23,570,455 |
Diluted | 23,782,796 | 23,570,455 |
Basic loss per share of common stock | $ (0.86) | $ (1.23) |
Diluted loss per share of common stock | $ (0.86) | $ (1.23) |
Net Loss per Share - Anti-Dilut
Net Loss per Share - Anti-Dilutive Awards Excluded from Calculation (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Anti-dilutive Securities Excluded from Calculation of Earnings Per Share | ||
Number of securities excluded from calculation | 147,191 | 197,687 |
Restricted stock units | ||
Anti-dilutive Securities Excluded from Calculation of Earnings Per Share | ||
Number of securities excluded from calculation | 147,191 | 197,687 |
Major Clients (Details)
Major Clients (Details) - segment | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration Risk [Line Items] | ||
Number of business segments | 1 | |
Customer concentration risk | Revenues | A | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 13% | |
Customer concentration risk | Revenues | B | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 12% | |
Customer concentration risk | Revenues | C | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10% | 12% |
Customer concentration risk | Revenues | D | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 30% | |
Customer concentration risk | Revenues | E | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 23% |
Areas of Operation (Details)
Areas of Operation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Areas of Operation | ||
Operating Revenues | $ 37,480 | $ 24,695 |
Net Property and Equipment | 18,127 | 26,349 |
Right-of-use Assets | 4,010 | 4,435 |
United States | ||
Areas of Operation | ||
Operating Revenues | 22,202 | 17,772 |
Net Property and Equipment | 15,370 | 22,446 |
Right-of-use Assets | 3,722 | 3,977 |
Canada | ||
Areas of Operation | ||
Operating Revenues | 15,278 | 6,923 |
Net Property and Equipment | 2,757 | 3,903 |
Right-of-use Assets | $ 288 | $ 458 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Apr. 01, 2019 defendant |
Weatherford Litigation | |
OPERATING COMMITMENTS AND CONTINGENCIES | |
Number of other parties named as defendants | 18 |