SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from TO
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Commission File Number 0-9268
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GEOKINETICS INC.
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(Exact name of small business issuer as specified in its charter)
DELAWARE 94-1690082
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
8401 WESTHEIMER, SUITE 150 HOUSTON, TEXAS 77063
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(Address of principal executive offices) (Zip Code)
Small Business Issuer's telephone number, including area code (713) 850-7600
------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
On June 30, 2000, there were 18,992,156 shares of Registrant's common stock
($.01 par value) outstanding.
<PAGE>
GEOKINETICS INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
--------
Item 1. Financial Statements........................... 3
Condensed Statements of Financial Position
June 30, 2000 and December 31, 1999.......... 3
Condensed Statements of Operations
Three Months and Six Months Ended
June 30, 2000 and 1999....................... 5
Condensed Statements of Cash Flows
Six Months Ended June 30, 2000 and 1999...... 6
Notes to Interim Financial Statements.......... 7
Item 2. Management's Discussion and
Analysis or Plan of Operation................ 10
PART II. OTHER INFORMATION
Item 5. Other Information............................. 13
Item 6. Exhibits and Reports on Form 8-K.............. 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GEOKINETICS INC.
Condensed Statements of Financial Position
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
UNAUDITED AUDITED
--------------- ---------------
<S> <C> <C>
Current Assets:
Cash ............................................................................... $ 1,694,290 $ 2,677,996
Receivables ........................................................................ 2,433,841 3,272,110
Prepaid expenses ................................................................... 409,453 411,489
Current portion of note receivable ................................................. 76,785 --
--------------- ---------------
Total Current Assets ........................................................... 4,614,369 6,361,595
Property and Equipment:
Equipment, net of depreciation ..................................................... 8,990,092 11,586,033
Buildings, net of depreciation ..................................................... 258,721 268,444
Land ............................................................................... 23,450 23,450
--------------- ---------------
Total Property and Equipment ................................................... 9,272,263 11,877,927
Other Assets:
Note receivable, net of current portion ............................................ 173,216 --
Deferred charges ................................................................... 201,678 44,534
Restricted investments ............................................................. 121,700 106,700
Other assets ....................................................................... 48,319 78,097
Goodwill ........................................................................... 23,585,484 25,781,443
--------------- ---------------
Total Other Assets ............................................................. 24,130,397 26,010,774
--------------- ---------------
Total Assets ............................................................... $ 38,017,029 $ 44,250,296
=============== ===============
</TABLE>
3
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
UNAUDITED AUDITED
--------------- ---------------
<S> <C> <C>
Current Liabilities:
Current maturities of long-term debt ................................................. $ 461,728 $ 713,280
Current portion of capital lease ..................................................... 300,449 --
Accounts payable ..................................................................... 1,253,798 1,182,144
Accrued liabilities .................................................................. 5,571,395 4,229,882
Notes payable ........................................................................ 79,087 398,109
Advances for lease bank .............................................................. 185,500 185,500
Other current liabilities ............................................................ 9,838 21,418
--------------- ---------------
Total Current Liabilities ........................................................ 7,861,795 6,730,333
Long-Term Liabilities:
Long-term debt, net of current maturities ............................................ 54,169,137 51,267,997
Capital lease, net of current maturities ............................................. 106,335 --
--------------- ---------------
Total Long-Term Liabilities ...................................................... 54,275,472 51,267,997
Other Liabilities:
Deferred gain ........................................................................ -- 359,974
--------------- ---------------
Total Liabilities ............................................................... 62,137,267 58,358,304
Stockholders' Equity:
Common stock, $.01 par value, 100,000,000 shares
authorized, 19,367,156 shares issued at
June 30, 2000, 19,367,156 issued at
December 31, 1999 ................................................................ 193,672 193,672
Additional paid in capital .......................................................... 33,019,248 33,019,248
Accumulated deficit ................................................................. (57,190,658) (47,320,928)
--------------- ---------------
(23,977,738) (14,108,008)
Less common stock in treasury at cost -- 375,000 shares in 2000 ..................... (142,500) --
--------------- ---------------
Total Stockholders' Equity ....................................................... (24,120,238) (14,108,008)
--------------- ---------------
Total Liabilities and Stockholders' Equity ................................... $ 38,017,029 $ 44,250,296
=============== ===============
</TABLE>
4
<PAGE>
GEOKINETICS INC.
Condensed Statements of Operations
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
(UNAUDITED) (UNAUDITED)
------------ ------------ ------------ ------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Seismic revenue .................................. $ 1,408,334 $ 1,268,750 $ 1,776,579 $ 3,241,791
Data processing revenue .......................... 1,266,682 1,818,889 3,221,863 4,828,420
------------ ------------ ------------ ------------
Total Revenues ........................... 2,675,016 3,087,639 4,998,442 8,070,211
Expenses:
General and administrative ....................... 505,732 705,223 1,060,577 1,490,458
Seismic operating expense ........................ 2,149,707 1,795,426 3,364,778 4,378,111
Data processing expense .......................... 1,288,094 1,636,695 2,766,708 3,253,871
Amortization expense ............................. 1,002,269 935,489 2,004,537 1,866,672
Depreciation expense ............................. 1,000,209 1,660,121 2,000,418 3,316,769
------------ ------------ ------------ ------------
Total Expenses ........................... 5,946,011 6,732,954 11,197,018 14,305,881
============ ============ ============ ============
Loss from Operations ............................... (3,270,995) (3,645,315) (6,198,576) (6,235,670)
Other Income (Expense):
Interest income .................................. 25,655 25,362 54,537 55,008
Other income ..................................... 83,820 858 88,485 3,626
Interest expense ................................. (1,950,512) (1,580,178) (3,814,174) (3,211,083)
------------ ------------ ------------ ------------
Total Other (Expense) .................... (1,841,037) (1,553,958) (3,671,152) (3,152,449)
Loss before provision for income tax ............... (5,112,032) (5,199,273) (9,869,728) (9,388,119)
Provision for income tax ........................... -- -- -- --
------------ ------------ ------------ ------------
Loss before discontinued operations ................ (5,112,032) (5,199,273) (9,869,728) (9,388,119)
Income from Discontinued Operations:
Income (loss) from oil & gas operations .......... -- 10,781 -- (60,580)
------------ ------------ ------------ ------------
Net Loss ........................................... $ (5,112,032) $ (5,188,492) $ (9,869,728) $ (9,448,699)
============ ============ ============ ============
Earning (Loss) per common share-Basic
Loss from continuing operations .................. $ (0.27) $ (0.27) $ (0.52) $ (0.49)
Income from discontinued operations .............. 0.00 0.00 0.00 0.00
------------ ------------ ------------ ------------
Net Loss ........................................... $ (0.27) $ (0.27) $ (0.52) $ (0.49)
============ ============ ============ ============
Weighted average common shares and
equivalents outstanding .......................... 18,992,156 19,322,480 19,101,359 19,322,480
============ ============ ============ ============
</TABLE>
5
<PAGE>
GEOKINETICS INC.
Condensed Statements of Cash Flows
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
(UNAUDITED)
----------------------------------------
2000 1999
------------------ ------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Loss ............................................................................... $ (9,869,728) $ (9,448,699)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities
Depreciation and amortization ..................................................... 4,004,955 5,191,943
Deferred gain, net of write-down .................................................. (116,544) --
Changes in operating assets and liabilities
Accounts receivable and work in progress ...................................... 380,305 4,555,741
Prepaid expenses and other assets ............................................. (254,137) 2,090
Accounts payable .............................................................. 275,619 (3,154,505)
Accrued liabilities and deferred revenue ...................................... 5,360,428 2,373,152
------------------ ------------------
Net cash (used) in operating activities ................................... (219,102) (480,278)
INVESTING ACTIVITIES
Receipt of deposits and other ..................................................... 52,742 --
Proceeds from insurance settlement ................................................ -- 21,504
Purchases of capital assets ....................................................... (12,268) (117,705)
------------------ ------------------
Net cash provided (used) in investing activities .......................... 40,474 (96,201)
FINANCING ACTIVITIES
Proceeds from short term debt ..................................................... -- 765,493
Principal paid on capital lease ................................................... (175,391) --
Principal paid on long term debt .................................................. (480,048) (520,124)
Principal paid on short term debt ................................................. (160,498) (754,154)
------------------ ------------------
Net cash (used) in financing activities ................................... (815,937) (508,785)
Net (decrease) in cash ................................................................. (994,565) (1,085,264)
Cash deficit of subsidiary sold ........................................................ 10,859 --
Cash at beginning of period ............................................................ 2,677,996 2,705,581
------------------ ------------------
Cash at end of period .................................................................. $ 1,694,290 $ 1,620,317
================== ==================
</TABLE>
6
<PAGE>
NOTES TO INTERIM FINANCIAL STATEMENTS
1. METHOD AND BASIS OF PRESENTATION
The interim financial statements contained herein have been prepared in
accordance with the instructions to Form 10-QSB and include all adjustments
which are, in the opinion of management, necessary to provide a fair statement
of the financial position and results of operations for the interim period
reported. The financial statements are condensed and should be read in
conjunction with the financial statements and related notes included in the
Registrant's Form 10-KSB filed with the Securities and Exchange Commission for
the fiscal year ended December 31, 1999. A summary of accounting policies and
other significant information is included therein.
These financial statements are prepared assuming that the Company will
continue as a going concern. They do not include any adjustments relating to the
recoverability and classification of recorded assets or the amounts and
classification of liabilities that would be necessary in the event the Company
cannot continue in existence.
During 1999 the seismic service industry experienced an unprecedented
downturn which severely constrained the Company's working capital position.
During this period, management developed a financial and operational plan to
carry the Company's operations through the year 2000. One component of this plan
included a restructuring of the Company's long term debt, which was completed in
the fourth quarter of 1999. The restructuring provided the Company with
additional funding, in the amount of $5,895,000, and the option, during 2000, to
make interest payments due on its 13.5% Senior Secured Notes either in cash or
by issuing additional notes. The plan also included disposing of the Company's
oil and gas operations and one of its seismic acquisitions subsidiaries.
As a result of the above outlined conditions and plan implementation, the
Company incurred a loss of approximately $30.4 million during 1999 and a loss of
approximately $9.9 million incurred in the first six months of 2000. These
results have left the Company with a deficit equity position of approximately
$24 million at June 30, 2000.
Management believes that this plan, along with the deferral of certain
accrued expenses, will provide sufficient liquidity to continue operations
through 2000. As noted above, the Company has the option to avoid making cash
interest payments on its 13.5% Senior Secured Notes during 2000. As presently
structured, the Company will be required to make a cash interest payment of
approximately $3.9 million on March 15, 2001. Under current conditions,
continued operations by the Company through the due date for this payment will
be dependent upon a continued forbearance by the holders of the Company's 13.5%
Senior Secured Notes.
7
<PAGE>
2. LONG TERM DEBT
At June 30, 2000, the Company's long term debt was $54,630,865, including
$461,728 in current maturities. Long term debt is presented net of unamortized
Original Issue Discount, totaling $3,178,438. Long term debt consists primarily
of (i) 13 1/2% SenioR Secured Notes, due 2005, in the amount of $48,164,526,
(ii) 13 1/2% Senior Secured Notes, due 2002, in the amount of $6,239,616 and
(iii) a note to a financial institution, bearing interest at prime plus 1 1/2%,
in the amount of $3,405,161.
3. SALE OF SUBSIDIARY
The Company sold its wholly-owned subsidiary Reliable Exploration, Inc.
(Reliable) on February 23, 2000, effective January 1, 2000. The Company
continues its seismic acquisition operations through Quantum Geophysical, Inc.
An impairment reserve and loss of $2.14 million was recorded at December
31, 1999 to reflect Reliable's net assets and related goodwill at their net
realizable values.
The Company's condensed financial statements at June 30, 1999 included the
following related to Reliable:
Total assets (net of intercompany activity) $ 524,209
Total liabilities (net of intercompany activity) $1,327,991
Seismic revenue $ 998,984
Net income (loss) $ (271,793)
Net loss per share $ (0.01)
8
<PAGE>
4. SEGMENT INFORMATION
The following table sets forth the Company's significant information from
reportable segments:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED JUNE 30, 2000
--------------------------------------------------------------------
SEISMIC DATA
ACQUISITION PROCESSING TOTALS
-------------------- -------------------- --------------------
<S> <C> <C> <C>
Revenues from external customers ........................... $ 1,408,334 $ 1,266,681 $ 2,675,015
Segment Profit (Loss) ...................................... (2,619,426) (2,312,556) (4,932,052)
Segment Assets, net of intercompany......................... 11,455,071 34,105,875 45,560,946
<CAPTION>
FOR THE QUARTER ENDED JUNE 30, 1999
--------------------------------------------------------------------
SEISMIC DATA
ACQUISITION PROCESSING TOTALS
-------------------- -------------------- --------------------
<S> <C> <C> <C>
Revenues from external customers ........................... $ 1,268,749 $ 1,818,889 $ 3,087,638
Segment Profit (Loss) ...................................... (3,131,268) (1,769,219) (4,900,487)
Segment Assets, net of intercompany......................... 26,588,519 30,592,227 57,180,746
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 2000
--------------------------------------------------------------------
SEISMIC DATA
ACQUISITION PROCESSING TOTALS
-------------------- -------------------- --------------------
<S> <C> <C> <C>
Revenues from external customers ........................... $ 1,776,579 $ 3,221,863 $ 4,998,442
Segment Profit (Loss) ...................................... (5,349,345) (4,124,266) (9,473,611)
Segment Assets, net of intercompany......................... 11,455,071 34,105,875 45,560,946
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1999
--------------------------------------------------------------------
SEISMIC DATA
ACQUISITION PROCESSING TOTALS
-------------------- -------------------- --------------------
<S> <C> <C> <C>
Revenues from external customers ........................... $ 3,241,790 $ 4,828,420 $ 8,070,210
Segment Profit (Loss) ...................................... (6,372,410) (2,332,149) (8,704,559)
Segment Assets, net of intercompany......................... 26,588,519 30,592,227 57,180,746
</TABLE>
9
<PAGE>
The following table reconciles reportable segment losses to consolidated losses:
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED JUNE 30
-----------------------------------------
2000 1999
------------------ ------------------
<S> <C> <C>
PROFIT OR LOSS
Total profit or loss for reportable segments ......................................... $ (4,932,052) $ (4,900,487)
Unallocated amounts:
Corporate expenses net of interest earnings ..................................... (172,642) (272,283)
Corporate interest expense ...................................................... (6,750) (3,129)
Amortization and depreciation ................................................... (588) (23,374)
Income from discontinued oil and gas segment ......................................... -- 10,781
------------------ ------------------
Total Consolidated Loss .................................................... $ (5,112,032) $ (5,188,492)
================== ==================
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30
-----------------------------------------
2000 1999
------------------ ------------------
<S> <C> <C>
PROFIT OR LOSS
Total profit or loss for reportable segments ......................................... $ (9,473,611) $ (8,704,559)
Unallocated amounts:
Corporate expenses net of interest earnings ..................................... (381,272) (637,326)
Corporate interest expense ...................................................... (13,669) (489)
Amortization and depreciation ................................................... (1,176) (45,745)
Loss from discontinued oil and gas segment ........................................... -- (60,580)
------------------ ------------------
Total Consolidated Loss .................................................... $ (9,869,728) $ (9,448,699)
================== ==================
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
At June 30, 2000, the Company's financial position reflects (i) the
seismic acquisition services being conducted by Quantum Geophysical, Inc., and
(ii) the seismic data processing, software and consultation services being
provided by Geophysical Development Corporation.
The ongoing downturn in the seismic service sector continues to negatively
impact the Company's financial results. While energy prices have rebounded
significantly from their lows attained in early 1999, demand for the Company's
services has not, as yet, been positively affected. During the quarter ended
June 30, 2000, the Company operated one seismic acquisition crew. The Company
has the capacity to operate as many as three seismic acquisition crews. During
the quarter, the Company's data processing segment had a significant portion of
its computing capability unutilized. The Company anticipates that third quarter
results will continue to be negatively impacted by the ongoing industry slump.
10
<PAGE>
RESULTS OF OPERATIONS
Revenues for the six months ended June 30, 2000 were $4,998,442 as
compared to $8,070,211 for the same period of fiscal 1999, a decrease of 38%.
For the three months ended June 30, 2000, revenues totaled $2,675,016 as
compared to $3,087,639 for the same period of fiscal 1999, a decrease of 13%.
Revenues declined due to a continuing weakness in demand for the Company's
services as well as a continuing difficult pricing environment.
Operating expenses for the six month period ended June 30, 2000 were
$6,131,486 as compared to $7,631,982 for the same period of fiscal 1999, a
decrease of 20%. For the three month period ended June 30, operating expenses
increased from $3,432,121 in 1999 to $3,437,801 in 2000, an increase of $5,680.
During the fourth quarter of 1999, the Company completed a restructuring of its
debt obligations to its principal equipment supplier for its seismic acquisition
operations. As a result of this restructuring, current payments are treated as
operating expenses for financial reporting purposes. Prior to the restructuring,
the effects of such payments were reflected in depreciation and interest expense
in the Company's financial statements. Operating expenses for the six months
ended June 30, 1999, on a pro forma basis, would have been $8,930,886 had this
restructuring occurred on January 1, 1999. On this basis, operating expenses for
the six months ended June 30, 2000 decreased 31% from the same period in 1999.
This decrease in operating expenses is a result of the Company's ongoing efforts
to control internal costs and limit third party expenditures as well as a
continued weakness in demand for the Company's services.
General and administrative expenses for the six months ended June 30
decreased from $1,490,458 in 1999 to $1,060,577 in 2000, a decrease of 29%. For
the three months ended June 30, 2000, general and administrative expenses
totaled $505,732 as compared to $705,223 for the same period of fiscal 1999, a
decrease of 28%. The decrease in general and administrative expenses is a result
of the Company's continuing efforts to contain costs by limiting third party
expenditures. The Company had previously instituted staff reductions to reduce
its costs and continues to operate at reduced staffing levels.
Depreciation and amortization expense for the six months ended June 30,
2000 totaled $4,004,955 as compared to $5,183,441 for the same period of fiscal
1999, a decrease of 23%. For the three months ended June 30, 2000, depreciation
and amortization expense decreased from $2,595,610 in 1999 to $2,002,478 in
2000, a decrease of 23%. The decrease in depreciation and amortization expense
is a result of a restructuring of the Company's debt obligations to the
principal equipment supplier for its seismic acquisition operations, the sale of
Reliable effective January 1, 2000, and the discontinuance of the Company's oil
and gas operations which occurred in mid 1999.
Interest expense (net of interest income) for the six months ended June
30, 2000 totaled $3,671,152 as compared to $3,152,449 for the period ended June
30, 1999, an increase of 16%. For the three months ended June 30, 2000 interest
expense totaled $1,841,037, an increase of 18% from the same period of fiscal
1999. On October 1, 1999, the Company completed a restructuring of its
$40,000,000 12% Senior Subordinated Notes due 2005 by exchanging those notes for
its 13.5% Senior Secured Notes due 2005. Concurrently with this transaction, the
Company received
11
<PAGE>
additional funds totaling $5,895,000 and issued $5,895,000 of its 13.5%
Senior Secured Notes due 2002. These transactions are responsible for the
increase in interest expense for the six months ended June 30, 2000.
The Company had a net loss of $9,869,728, or $(0.52) per share, for the
six months ended June 30, 2000 as compared to a net loss of $9,448,699, or
$(0.49) per share, for the six months ended June 30, 1999. For the three months
ended June 30, 2000 the Company had a net loss of $5,112,032, or $(0.27) per
share, as compared to a net loss of $5,188,492, or $(0.27) per share, for the
three months ended June 30, 1999. These results are due to the continuing weak
demand for the Company's services.
LIQUIDITY AND CAPITAL RESOURCES
During 1999, the seismic service industry experienced an unprecedented
downturn which severely constrained the Company's working capital position.
These conditions continued in the first half of 2000. As a result of these
conditions, the Company incurred a loss of approximately $30.4 million during
1999 and a loss of approximately $9.9 million in the first half of 2000. These
results have left the Company with an equity deficit of approximately $24
million at June 30, 2000.
On October 1, 1999 the Company entered into a Securities Purchase
Agreement ("Purchase Agreement") with DLJ Partners, L.P. ("DLJ") and certain
additional investors (collectively, the "Purchasers"), pursuant to which the
Company completed a restructuring of its $40,000,000 12% Senior Subordinated
Notes due April 2005 ("Prior Notes") and received an additional $4,000,000 from
the Purchasers, the holders of the Prior Notes, and $1,000,000 from other
sources. On November 30, 1999, the Company received an additional $895,000 from
other investors. The restructuring involved the Company exchanging the Prior
Notes for its 13.5% Senior Secured Notes due 2005 in the aggregate principal
amount of $45,358,000 (the "2005 Notes") and the Company issuing $5,895,000 of
its 13.5% Senior Secured Notes due 2002 (the "2002 Notes") for the additional
funding received on October 1, 1999 and November 30, 1999. This transaction
provided the Company with the option, during 2000, to make interest payments due
on the 13.5% Senior Secured Notes either in cash or by issuing additional notes.
On March 15, 2000, the Company elected to issue an additional $3,151,142 of
13.5% Senior Secured Notes, ($2,806,526 due 2005 and $344,616 due 2002) in
satisfaction of the interest payment which came due on that date.
At June 30, 2000, the Company had cash balances of $1,694,290. The Company
believes this cash, anticipated cash flow from its seismic acquisition and
seismic data processing operations, and the continued deferral of certain
accrued expenses will be sufficient to meet its working capital requirements for
the immediate future. As noted above, the Company has the option to avoid making
cash interest payments on its 13.5% Senior Secured Notes during 2000. As
presently structured, the Company will be required to make a cash interest
payment of approximately $3.9 million on March 15, 2001. Under current
conditions, continued operations by the Company through the due date for this
payment will be dependent upon a continued forbearance by the holders of the
Company's 13.5% Senior Secured Notes.
12
<PAGE>
The Company's ability to expand its business operations is dependent upon
the availability of internally generated cash flow and external financing
activities. Such financing may consist of bank or commercial debt, equity or
debt securities or any combination thereof. There can be no assurance that the
Company will be successful in obtaining additional financing when required. Any
substantial alteration or increase in the Company's capitalization through the
issuance of debt or equity securities or otherwise may significantly decrease
the financial flexibility of the Company. Due to uncertainties regarding the
changing market for seismic services, technological changes, and other matters
associated with the Company's operations, the Company is unable to estimate the
amount of any financing that it may need to acquire, upgrade and maintain its
equipment. If the Company is unable to obtain such financing when needed, it
will be forced to curtail its business objectives, and to finance its business
activities with only such internally generated funds as may then be available.
PART II OTHER INFORMATION
ITEM 5. OTHER INFORMATION
As of July 31, 2000, the Company had not experienced any materially
important business disruption or systems failures as a result of year 2000
issues, nor was it aware of any year 2000 issues that impacted its suppliers or
other third parties to an extent significant to the Company. However, year 2000
compliance has many elements and potential consequences, some of which may not
be foreseeable or may be realized in future periods. Consequently, there can be
no assurance that unforeseen circumstances may not arise, or that the Company
will not in the future identify equipment or systems which are not year 2000
compliant.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K:
None
13
<PAGE>
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GEOKINETICS INC.
(Registrant)
Date: August 11, 2000 __________________________________________
Thomas J. Concannon
Vice President and Chief Financial Officer
14
