Item 1.01. Entry Into Material Definitive Agreements.
Amendment to Credit Facility
On September 30, 2022, Dawson Geophysical Company (the "Company") entered into a
Third Loan Modification Agreement (the "Third Modification") to the Loan and
Security Agreement (as amended by (i) that certain Loan Modification Agreement
dated as of September 30, 2020, (ii) that certain Second Loan Modification
Agreement dated as of September 30, 2021, and (iii) the Third Modification, the
"Loan Agreement") for the purpose of (a) amending and extending the maturity of
the Company's line of credit with its lender, Dominion Bank, a Texas state bank
(the "Lender"), 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 continues to provide for a secured revolving credit facility (the
"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 the Lender in the Company's collateral
account, including a certificate of deposit for $5,000,000. As of September 30,
2022, the Company has not borrowed any amounts under the Revolving Credit
Facility.
The Revolving Credit Facility now matures on September 30, 2023, which date was
extended in the Third Modification from a previous maturity of September 30,
2022. The Lender's commitment under the Loan Agreement is now $10,000,000. The
Company is now obligated under the Loan Agreement to maintain, as of the end of
each calendar quarter, a tangible net worth of not less than $38,000,000.
Additionally, the Company is now obligated under the Loan Agreement to maintain,
to be tested as of the end of each calendar quarter, unencumbered liquid assets
of not less than $5,000,000. The remaining terms and conditions of the Loan
Agreement generally continue in the form existing prior to the Third
Modification.
The foregoing description of the Third Modification is qualified in its entirety
by reference to the full text of the Third Modification, which is filed as
Exhibit 10.1 to this Current Report and is incorporated by reference herein.
Item 2.03. Creation of Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information provided in item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
EXHIBIT DESCRIPTION
NUMBER
10.1 - Third Loan Modification Agreement to Loan and Security
Agreement, by and between Dawson Geophysical Company and
Dominion Bank, dated September 30, 2022.
104 - Cover Page Interactive Data File, formatted in Inline XBRL,
and included as Exhibit 101.
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