ION announces revised record date for Rights Offering for new convertible Second Lien Notes or common stock

Rhea-AI Summary

ION Geophysical Corporation (NYSE: IO) is advancing its rights offering for New Second Lien Convertible Notes as part of its restructuring transactions, approved by shareholders on February 23, 2021. The registration statement has been filed with the SEC, expecting effectiveness before launching the offering. The Record Date has been rescheduled to March 22, 2021, allowing shareholders to purchase New Notes or Common Stock. A Backstop Commitment exceeding $20 million ensures funding for the offering. Details will follow in a prospectus after SEC clearance.

Positive

• Rights offering aims to raise at least $20 million to support restructuring.
• Backstop agreements in place with commitments over $20 million to secure funding.
• Shareholders can participate based on their holdings as of the Record Date.

Negative

• Dependence on obtaining at least $20 million in net proceeds may indicate financial vulnerability.
• Restructuring transactions raise concerns about the company's ongoing financial health.

HOUSTON, March 09, 2021 (GLOBE NEWSWIRE) -- ION Geophysical Corporation (NYSE: IO) announced today that it is proceeding with steps to launch its previously announced rights offering (“Rights Offering”) for its New Second Lien Convertible Notes (“New Notes”) or its Common Stock, as part of its restructuring transactions (the “Restructuring Transactions”) approved by shareholders on February 23, 2021. The Company has filed a registration statement on Form S-1 with the Securities and Exchange Commission (“SEC”). The Company expects to launch the Rights Offering after the Registration Statement is declared effective by the SEC.

The original record date of March 15, 2021 has been rescheduled to March 22, 2021 (the “Record Date”). Each of our shareholders as of the Record Date will receive one non-transferable subscription right (“Right”) for each share of our Common Stock they own. Each Right will entitle a holder to purchase (i) a principal amount of our New Notes equal to $50,000,000 divided by the number of shares of our Common Stock outstanding as of the Record Date, at a purchase price of 100% of the principal amount thereof or (ii) a number of shares of our Common Stock equal to $50,000,000 divided by the purchase price of $2.57 per share divided by the number of shares of our Common Stock outstanding as of the Record Date, at a purchase price of $2.57 per whole share of Common Stock; provided that any New Notes will only be issued in minimum increments of $1,000 and any exercise of Rights therefore will be rounded down to the nearest whole increment of $1,000 and any shares of Common Stock will only be issued in whole numbers of shares with any fractional shares of our Common Stock rounded down to the nearest whole share.

As of March 9, 2021, we had 17,960,434 shares of Common Stock outstanding such that each Right would entitle a holder to purchase (i) $2.78 principal amount of our New Notes or (ii) 1.08 shares of our Common Stock. Each holder of a Right will be entitled to an over-subscription privilege to purchase additional securities that may remain unsubscribed as a result of any unexercised rights. We expect to distribute the certificates evidencing the Rights and other materials related to the Rights Offering shortly after the Record Date.

In connection with the Rights Offering, as of March 2, 2021, we have entered into backstop agreements (the “Backstop Agreements”) with several parties (the “Backstop Providers”) pursuant to which the Backstop Providers have agreed, in the aggregate, to purchase in excess of $20,000,000 of New Notes at par or shares of Common Stock at $2.57 per share (the “Backstop Commitment”). The Backstop Agreements are subject to customary terms and conditions, including payment, in principal amount of New Notes or shares of Common Stock at $2.57 per share, of a backstop fee in an amount up to five percent (5%) of the Backstop Commitment. To complete the Rights Offering and effect the Restructuring Transactions, we must receive net proceeds of at least $20,000,000 from the Rights Offering. The current Backstop Commitment will allow ION to satisfy this condition.

Further details of the Rights Offering will be publicly announced and a prospectus supplement containing the detailed terms of the Rights Offering will be filed with the SEC following clearance of the registration statement by the SEC. For additional details regarding the Restructuring Transactions, including the Exchange Offer and the Rights Offering, please see our Current Report on Form 8-K filed with the SEC on February 12, 2021.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission, but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. The information in this press release is not complete and is subject to change. This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities, nor shall there be any offer, solicitation or sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful under the securities laws of such state or jurisdiction. The Rights Offering will be made only by means of prospectus. Copies of the prospectus, when it becomes available, will be distributed to all eligible stockholders as of the Rights Offering Record Date and may also be obtained free of charge on the SEC website at www.sec.gov or by contacting the information agent, D.F. King & Co., Inc., for the Rights Offering.

About ION
Leveraging innovative technologies, ION delivers powerful data-driven decision-making to offshore energy and maritime operations markets, enabling clients to optimize investments and results through access to our data, software and distinctive analytics. Learn more at iongeo.com.

Contact
Mike Morrison
Executive Vice President and Chief Financial Officer
+1.281.879.3615

The information herein contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements may include information and other statements that are not of historical fact. Actual results may vary materially from those described in these forward-looking statements. All forward-looking statements reflect numerous assumptions and involve a number of risks and uncertainties. These risks and uncertainties include the risks associated with the timing and development of ION Geophysical Corporation's products and services; pricing pressure; decreased demand; changes in oil prices; agreements made or adhered to by members of OPEC and other oil producing countries to maintain production levels; the COVID-19 pandemic; our ability to complete the Restructuring Transactions and other related matters in a timely manner, if at all; and political, execution, regulatory, and currency risks. For additional information regarding these various risks and uncertainties, see our Form 10-K for the year ended December 31, 2020, filed on February 12, 2021, and our Forms S-1 and S-4, filed on January 29, 2021, and amended on February 12, 2021 and March 3, 2021. Additional risk factors, which could affect actual results, are disclosed by the Company in its filings with the Securities and Exchange Commission ("SEC"), including its Form 10-K, Form 10-Qs and Form 8-Ks filed during the year. The Company expressly disclaims any obligation to revise or update any forward-looking statements.

FAQ

What is the purpose of ION's rights offering announced on March 9, 2021?

ION aims to raise funds through a rights offering for its New Second Lien Convertible Notes as part of its restructuring.

What is the new Record Date for ION's rights offering?

The new Record Date is March 22, 2021.

How much will each right entitle ION shareholders to purchase?

Each right will permit purchasing approximately $2.78 in New Notes or 1.08 shares of Common Stock.

What financial backing has ION secured for its rights offering?

ION has secured a Backstop Commitment of over $20 million to support the rights offering.

When can shareholders expect more details about the rights offering?

Additional details will be provided following the SEC's clearance of the registration statement.