NOTE 1 — RESTATEMENT

Certain balances in the financial statements as of and for the three and six months ended June 30, 2013 have been restated to correct misstatements in previously reported amounts by SAExploration Holdings, Inc. and its subsidiaries (collectively, “the Corporation”) in the accounting for the Former SAE’s share-based compensation expense and the improper capitalization of certain work-in-progress expenses attributable to the Corporation’s operations in Colombia. To correct the misstatements, an additional $986 was recorded in “Selling, general and administrative expenses” and “Additional paid-in capital” related to share-based compensation. $554 was reclassified from “Deferred costs on contracts” to “Direct operating expenses”. As a result of the recording these corrections there was an increase in the income tax benefit for the three months ended and then a decrease in the provision for the six months ended June 30, 2013.

The effects of the restatement on the Corporation’s financial statements as of and for the three and six months ended June 30, 2013 are summarized in the table. below.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

	As of June 30, 2013
	As Previously				As
	Reported		Adjustment		Restated
Deferred costs on contracts	$	2,158	$	(554)	$	1,604
Total current assets	$	77,234	$	(554)	$	76,680
Total assets	$	156,395	$	(554)	$	155,841
Income and other taxes payable	$	883	$	(466)	$	417
Total current liabilities	$	26,883	$	(466)	$	26,417
Total liabilities	$	119,871	$	(466)	$	119,405
Additional paid-in capital	$	26,301	$	986	$	27,287
Retained earnings	$	12,155	$	(1,074)	$	11,081
Total stockholders’ equity	$	36,524	$	(88)	$	36,436
Total liabilities and stockholders’ equity	$	156,395	$	(554)	$	155,841

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands)

	Three Months Ended June 30, 2013						Six Months Ended June 30, 2013
	As Previously					As	As Previously				As
	Reported		Adjustment		Restated		Reported		Adjustment		Restated
Direct operating expenses	$	32,142	$	554	$	32,696	$	96,910	$	554	$	97,464
Gross profit	$	10,238	$	(554)	$	9,684	$	30,236	$	(554)	$	29,682
Selling, general and administrative expenses	$	5,141	$	986	$	6,127	$	12,607	$	986	$	13,593
Income from operations	$	4,215	$	(1,540)	$	2,675	$	16,421	$	(1,540)	$	14,881
(Loss) income before income taxes	$	(1,362)	$	(1,540)	$	(2,902)	$	6,865	$	(1,540)	$	5,325
(Benefit) provision for income taxes	$	(1,117)	$	(466)	$	(1,583)	$	1,248	$	(466)	$	782
Net (loss) income	$	(245)	$	(1,074)	$	(1,319)	$	5,617	$	(1,074)	$	4,543

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

	Three Months Ended June 30, 2013						Six Months Ended June 30, 2013
	As Previously				As		As Previously				As
	Reported		Adjustment		Restated		Reported		Adjustment		Restated
Net (loss) income	$	(245)	$	(1,074)	$	(1,319)	$	5,617	$	(1,074)	$	4,543
Total other comprehensive (loss) income	$	(1,832)	$	(1,074)	$	(2,906)	$	3,327	$	(1,074)	$	2,253

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

	Six Months Ended June 30, 2013
	As Previously				As
	Reported		Adjustment		Restated
Net (loss) income	$	5,617	$	(1,074)	$	4,543
Changes in operating assets and liabilities, net of effects of acquisition:
Share-based compensation	$	114	$	986	$	1,100
Deferred costs on contracts	$	3,753	$	554	$	4,307
Income and other taxes payable	$	(5,013)	$	(466)	$	(5,479)