SAExploration Holdings, Inc. - 10-Q filing on 2017-08-21

CREDIT CONCENTRATION	6 Months Ended
CREDIT CONCENTRATION	Jun. 30, 2017
Accounts, Notes, Loans and Financing Receivable, Classified [Abstract]
CREDIT CONCENTRATION	CREDIT CONCENTRATION At June 30, 2017, the Corporation's largest account receivable from one customer was $78.1 million, representing 88% of total consolidated accounts receivable. This customer was relying on monetization of tax credits under a State of Alaska tax credit program (“Tax Credits”), either from proceeds from the State of Alaska or from third party financing sources, to satisfy the accounts receivable. There remains substantial uncertainty regarding the timing of reimbursement from the State of Alaska and the availability of third party financing to the customer, or the Corporation, in order for the Corporation to collect its accounts receivable. Due to the customer’s inability to monetize the Tax Credits, the Corporation's customer has assigned $89.0 million of Tax Credits to the Corporation so that it can seek to monetize these Tax Credits and apply the resulting cash, as monetization occurs, toward the customer’s repayment of its overdue account receivable. The Corporation has recorded a total reduction of the accounts receivable balance of $3.5 million related to the monetization of Tax Credits during the three and six months ended June 30, 2017. Based upon the uncertainty regarding the timing to monetize the Tax Credits as of June 30, 2017, the Corporation has classified $44.0 million and $38.0 million as a long term accounts receivable as of June 30, 2017 and December 31, 2016, respectively. The Corporation reclassified an additional $6.0 million to long term in the three months ended June 30, 2017 due to delays in monetization of Tax Credit certificates related to the legislation discussed below. As of June 30, 2017, the State of Alaska has completed its audit of approximately $30.2 million of Tax Credit applications. This audit resulted in the Corporation receiving approximately $24.4 million of Tax Credit certificates during 2016 from the State of Alaska. The State of Alaska disallowed approximately $5.8 million of what the Corporation believes should otherwise be eligible expenditures. The Corporation's customer filed an appeal of this decision on October 18, 2016 seeking a reversal of the disallowed amount. As of the date of filing, the State of Alaska completed its audit of an additional $16.1 million of Tax Credit applications which resulted in the Corporation receiving approximately $16.1 million of Tax Credit certificates during July 2017. The Corporation expects additional Tax Credit certificates from the State of Alaska representing approximately $42.7 million to be issued during the remainder of 2017 and the beginning of 2018. There continues to be significant uncertainty regarding the timely payment by the State of Alaska of its obligations on issued Tax Credit certificates as well as the Corporation's ability to accurately estimate the timeframe for such payments. The Corporation continues to explore options to monetize the Tax Credit certificates, including the option to sell the certificates in the secondary market at a discount to purchasers that are able to apply the certificates to reduce their own Alaskan tax liabilities. There is a risk that any monetization of the Tax Credit certificates, however, will reflect a substantial discount and may be insufficient to fully repay the customer’s outstanding accounts receivable. Should this result, the Corporation may be required to record an impairment to the amount due from our customer. In addition, the Corporation believes the secondary market has been negatively impacted by the uncertainty about future political developments or legislative actions. This has currently delayed the Corporation's ability to monetize its Tax Credit certificates. The Corporation believes recent legislation actions should positively affect the secondary market, however, the Corporation does not control the timing or outcome of the actions in this market. The Corporation is relying on the secondary market to monetize the Tax Credit certificates and if it does not improve, the Corporation may be required to record an impairment to the amount due from its customer. The Corporation also believes that rising oil prices may increase the market for the Tax Credit certificates, but there can be no assurance that prices will increase sufficient to improve the market or when it might occur.