10-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K/A
Amendment No.1

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2010

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-12691

ION Geophysical Corporation

(Exact Name of Registrant as Specified in Its Charter)

Delaware	22-2286646
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

2105 CityWest Blvd
Suite 400
Houston, Texas 77042-2839

(Address of Principal Executive Offices, Including Zip Code)

(281) 933-3339

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value Rights to Purchase Series A Junior Participating Preferred Stock	New York Stock Exchange New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act Yes o No þ

     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 þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).* Yes o No o

     * The registrant has not yet been phased into the interactive data requirements.

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

     As of June 30, 2010 (the last business day of the registrant’s second quarter of fiscal 2010), the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $495.25 million based on the closing sale price on such date as reported on the New York Stock Exchange.

     Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: common stock, $0.01 par value, 153,028,861 shares outstanding as of February 18, 2011.

DOCUMENTS INCORPORATED BY REFERENCE

Document	Parts Into Which Incorporated
Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held May 27, 2011	Part III

TABLE OF CONTENTS

Explanatory Note	3
PART IV	4
SIGNATURES	9
EXHIBIT INDEX	10
EX-23.2
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-99.1

2

Explanatory Note

     This Amendment No. 1 to Annual Report on Form 10-K/A amends the Annual Report on Form 10-K for the year ended December 31, 2010 of ION Geophysical Corporation (“ION”), which was filed with the Securities and Exchange Commission on February 24, 2011. This Form 10-K/A is being filed for the purpose of providing separate audited financial statements of INOVA Geophysical Equipment Limited in accordance with Rule 3-09 of Regulation S-X. The INOVA Geophysical Equipment Limited (“INOVA Geophysical”) Audited Financial Statements as of December 31, 2010 and for the period from March 26, 2010 (date of commencement) to December 31, 2010, and Report of Independent Registered Public Accounting Firm, are filed as Exhibit 99.1 and are included as financial statement schedules in Item 15. “Exhibits and Financial Statement Schedules” of this Form 10-K/A. ION owns a minority equity interest (49%) in INOVA Geophysical, which it accounts for under the equity method of accounting, and the financial statements of INOVA Geophysical as of and for the period ended December 31, 2010, were not available at the time that ION filed its Annual Report on Form 10-K in February 2011.

     The consent of Ernst & Young LLP, independent registered public accounting firm for INOVA Geophysical Equipment Limited, is also filed as an exhibit to this Amendment No. 1 to Annual Report on Form 10-K/A. In addition, this Form 10-K/A includes an updated exhibit index in respect thereof.

     Except as described above, this Amendment No. 1 on Form 10-K/A is not intended to update or modify any other information presented in ION’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as originally filed. This Amendment No. 1 does not update or modify in any way the financial position, results of operations, cash flows or related disclosures in ION’s Annual Report on Form 10-K, and does not reflect events occurring after the Form 10-K’s original filing date of February 24, 2011. Accordingly, this Form 10-K/A should be read in conjunction with our other filings made with the SEC subsequent to the filing of our Annual Report on Form 10-K for the year ended December 31, 2010.

3

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) List of Documents Filed

     (1) Financial Statements

     The financial statements were previously filed with the Annual Report on Form 10-K for the year ended December 31, 2010, filed on February 24, 2011.

     (2) Financial Statement Schedules

     The following financial statement schedule was previously filed with the Annual Report on Form 10-K for the year ended December 31, 2010, filed on February 24, 2011:

     Schedule II — Valuation and Qualifying Accounts

     The following financial statement schedules are included in this Amendment No. 1 to Annual Report on Form 10-K/A pursuant to Rule 3-09 of Regulation S-K:

     INOVA Geophysical Equipment Limited Audited Financial Statements as of and for the period ended December 31, 2010.

     All other schedules are omitted because they are not applicable or the requested information is shown in the financial statements or noted therein.

     (3) Exhibits

3.1	—	Restated Certificate of Incorporation dated September 24, 2007 filed on September 24, 2007 as Exhibit 3.4 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
3.2	—	Amended and Restated Bylaws of ION Geophysical Corporation filed on September 24, 2007 as Exhibit 3.5 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
3.3	—	Certificate of Ownership and Merger merging ION Geophysical Corporation with and into Input/Output, Inc. dated September 21, 2007, filed on September 24, 2007 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.1	—	Certificate of Rights and Designations of Series D-1 Cumulative Convertible Preferred Stock, dated February 16, 2005 and filed on February 17, 2005 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.2	—	Certificate of Elimination of Series B Preferred Stock dated September 24, 2007, filed on September 24, 2007 as Exhibit 3.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.3	—	Certificate of Elimination of Series C Preferred Stock dated September 24, 2007, filed on September 24, 2007 as Exhibit 3.3 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.4	—	Certificate of Designation of Series D-2 Cumulative Convertible Preferred Stock dated December 6, 2007, filed on December 6, 2007 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.5	—	Certificate of Designations of Series A Junior Participating Preferred Stock of ION Geophysical Corporation effective as of December 31, 2008, filed on January 5, 2009 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.6	—	Form of Senior Indenture, filed on December 19, 2008 as Exhibit 4.3 to the Company’s Registration Statement on Form S-3 (Registration No. 333-156362) and incorporated herein by reference.
4.7	—	Form of Senior Note, filed on December 19, 2008 as Exhibit 4.4 to the Company’s Registration Statement on Form S-3 (Registration No. 333-156362) and incorporated herein by reference.
4.8	—	Form of Subordinated Indenture, filed on December 19, 2008 as Exhibit 4.5 to the Company’s Registration Statement on

4

		Form S-3 (Registration No. 333-156362) and incorporated herein by reference.
4.9	—	Form of Subordinated Note, filed on December 19, 2008 as Exhibit 4.6 to the Company’s Registration Statement on Form S-3 (Registration No. 333-156362) and incorporated herein by reference.
**10.1	—	Amended and Restated 1990 Stock Option Plan, filed on June 9, 1999 as Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (Registration No. 333-80299), and incorporated herein by reference.
10.2	—	Office and Industrial/Commercial Lease dated June 2005 by and between Stafford Office Park II, LP as Landlord and Input/Output, Inc. as Tenant, filed on March 31, 2006 as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and incorporated herein by reference.
10.3	—	Office and Industrial/Commercial Lease dated June 2005 by and between Stafford Office Park District as Landlord and Input/Output, Inc. as Tenant, filed on March 31, 2006 as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and incorporated herein by reference.
**10.4	—	Input/Output, Inc. Amended and Restated 1996 Non-Employee Director Stock Option Plan, filed on June 9, 1999 as Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (Registration No. 333-80299), and incorporated herein by reference.
**10.5	—	Amendment No. 1 to the Input/Output, Inc. Amended and Restated 1996 Non-Employee Director Stock Option Plan dated September 13, 1999 filed on November 14, 1999 as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 1999 and incorporated herein by reference.
**10.6	—	Employment Agreement dated effective as of May 22, 2006 between Input/Output, Inc. and R. Brian Hanson, filed on May 1, 2006 as Exhibit 10.1 to the Company’s Form 8-K, and incorporated herein by reference.
**10.7	—	First Amendment to Employment Agreement dated as of August 20, 2007 between Input/Output, Inc. and R. Brian Hanson, filed on August 21, 2007 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.8	—	Second Amendment to Employment Agreement, dated as of December 1, 2008, between ION Geophysical Corporation and R. Brian Hanson, filed on January 29, 2009 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.9	—	Input/Output, Inc. Employee Stock Purchase Plan, filed on March 28, 1997 as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (Registration No. 333-24125), and incorporated herein by reference.
**10.10	—	Fifth Amended and Restated — 2004 Long-Term Incentive Plan, filed as Appendix A to the definitive proxy statement for the 2010 Annual Meeting of Stockholders of ION Geophysical Corporation, filed on April 21, 2010, and incorporated herein by reference.
10.11	—	Registration Rights Agreement dated as of November 16, 1998, by and among the Company and The Laitram Corporation, filed on March 12, 2004 as Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, and incorporated herein by reference.
**10.12	—	Input/Output, Inc. 1998 Restricted Stock Plan dated as of June 1, 1998, filed on June 9, 1999 as Exhibit 4.7 to the Company’s Registration Statement on S-8 (Registration No. 333-80297), and incorporated herein by reference.
**10.13	—	Input/Output Inc. Non-qualified Deferred Compensation Plan, filed on April 1, 2002 as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, and incorporated herein by reference.
**10.14	—	Input/Output, Inc. 2000 Restricted Stock Plan, effective as of March 13, 2000, filed on August 17, 2000 as Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2000, and incorporated herein by reference.
**10.15	—	Input/Output, Inc. 2000 Long-Term Incentive Plan, filed on November 6, 2000 as Exhibit 4.7 to the Company’s Registration Statement on Form S-8 (Registration No. 333-49382), and incorporated by reference herein.
**10.16	—	Employment Agreement dated effective as of March 31, 2003, by and between the Company and Robert P. Peebler, filed on March 31, 2003 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.17	—	First Amendment to Employment Agreement dated September 6, 2006, between Input/Output, Inc. and Robert P. Peebler, filed on September 7, 2006, as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.18	—	Second Amendment to Employment Agreement dated February 16, 2007, between Input/Output, Inc. and Robert P. Peebler, filed on February 16, 2007 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated

5

		herein by reference.
**10.19	—	Third Amendment to Employment Agreement dated as of August 20, 2007 between Input/Output, Inc. and Robert P. Peebler, filed on August 21, 2007 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.20	—	Fourth Amendment to Employment Agreement, dated as of January 26, 2009, between ION Geophysical Corporation and Robert P. Peebler, filed on January 29, 2009 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.21	—	Employment Agreement dated effective as of June 15, 2004, by and between the Company and David L. Roland, filed on August 9, 2004 as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, and incorporated herein by reference.
**10.22	—	Employment Agreement, dated as of December 1, 2008, between ION Geophysical Corporation and James R. Hollis, filed on January 29, 2009 as Exhibit 10.3 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.23	—	GX Technology Corporation Employee Stock Option Plan, filed on August 9, 2004 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, and incorporated herein by reference.
10.24	—	Concept Systems Holdings Limited Share Acquisition Agreement dated February 23, 2004, filed on March 5, 2004 as Exhibit 2.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
10.25	—	Registration Rights Agreement by and between ION Geophysical Corporation and 1236929 Alberta Ltd. dated September 18, 2008, filed on November 7, 2008 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q and incorporated herein by reference.
**10.26	—	Form of Employment Inducement Stock Option Agreement for the Input/Output, Inc. — Concept Systems Employment Inducement Stock Option Program, filed on July 27, 2004 as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Reg. No. 333-117716), and incorporated herein by reference.
**10.27	—	Form of Employee Stock Option Award Agreement for ARAM Systems Employee Inducement Stock Option Program, filed on November 14, 2008 as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (Registration No. 333-155378) and incorporated herein by reference.
10.28	—	Agreement dated as of February 15, 2005, between Input/Output, Inc. and Fletcher International, Ltd., filed on February 17, 2005 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.29	—	First Amendment to Agreement, dated as of May 6, 2005, between the Company and Fletcher International, Ltd., filed on May 10, 2005 as Exhibit 10.2 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.30	—	Input/Output, Inc. 2003 Stock Option Plan, dated March 27, 2003, filed as Appendix B of the Company’s definitive proxy statement filed with the SEC on April 30, 2003, and incorporated herein by reference.
10.31	—	Amended and Restated Credit Agreement dated as of July 3, 2008, by and among ION Geophysical Corporation, ION International S.À R.L., HSBC Bank USA, N.A., as administrative agent, joint lead arranger and joint bookrunner, ABN AMRO Incorporated, as joint lead arranger and joint bookrunner, and CitiBank, N.A., as syndication agent, filed on July 8, 2008 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.32	—	First Amendment to Amended and Restated Credit Agreement and Domestic Security Agreement, dated as of September 17, 2008, by and among ION Geophysical Corporation, ION International S.À R.L., HSBC Bank USA, N.A., as administrative agent, joint lead arranger and joint bookrunner, ABN AMRO Incorporated, as joint lead arranger and joint bookrunner, and CitiBank, N.A., as syndication agent, filed on September 23, 2008 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.33	—	Third Amendment to Amended and Restated Credit Agreement dated as of December 29, 2008, by and among ION Geophysical Corporation, ION International S.À R.L., the Guarantors and Lenders party thereto and HSBC Bank USA, N.A., as administrative agent, filed on January 5, 2009 as Exhibit 10.3 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.34	—	Fourth Amendment to Amended and Restated Credit Agreement and Foreign Security Agreement, Limited Waiver and Release dated as of December 30, 2008, by and among ION Geophysical Corporation, ION International S.À R.L., the Guarantors and Lenders party thereto and HSBC Bank USA, N.A., as administrative agent, filed on January 5, 2009 as Exhibit 10.4 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.35	—	Fifth Amendment to Amended and Restated Credit Agreement dated effective as of June 1, 2009 by and among ION

6

		Geophysical Corporation, ION International S.à r.l., certain other foreign and domestic subsidiaries of the ION Geophysical Corporation, HSBC Bank USA, N.A., as administrative agent, joint lead arranger and joint bookrunner, ABN AMRO Incorporated, as joint lead arranger and joint bookrunner, Citibank, N.A., as syndication agent, and the lenders party thereto, filed on August 6, 2009 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and incorporated herein by reference.
10.36	—	Sixth Amendment and Waiver to Amended and Restated Credit Agreement dated effective as of October 23, 2009 by and among ION Geophysical Corporation, ION International S.À R.L., the Guarantors and Lenders party thereto and HSBC Bank USA, N.A., as administrative agent filed on March 1, 2010 as Exhibit 10.36 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference.
**10.37	—	Form of Employment Inducement Stock Option Agreement for the Input/Output, Inc. — GX Technology Corporation Employment Inducement Stock Option Program, filed on April 4, 2005 as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Reg. No. 333-123831), and incorporated herein by reference.
**10.38	—	First Amendment to Consulting Services Agreement dated as of January 5, 2007, by and between GX Technology Corporation and Michael K. Lambert, filed on January 8, 2007 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.39	—	Letter agreement dated October 19, 2006, by and between the Company and Michael K. Lambert, filed on October 24, 2006 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.40	—	Severance Agreement dated as of December 1, 2008, between ION Geophysical Corporation and Charles J. Ledet, filed on December 5, 2008 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.41	—	Consulting Agreement dated as of December 1, 2008, between ION Geophysical Corporation and Charles J. Ledet, filed on December 5, 2008 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.42	—	Rights Agreement, dated as of December 30, 2008, between ION Geophysical Corporation and Computershare Trust Company, N.A., as Rights Agent, filed as Exhibit 4.1 to the Company’s Form 8-A (Registration No. 001-12691) and incorporated herein by reference.
**10.43	—	ION Stock Appreciation Rights Plan dated November 17, 2008, filed as Exhibit 10.47 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, and incorporated herein by reference.
10.44	—	Canadian Master Loan and Security Agreement dated as of June 29, 2009 by and among ICON ION, LLC, as lender, ION Geophysical Corporation and ARAM Rentals Corporation, a Nova Scotia corporation, filed on August 6, 2009 as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and incorporated herein by reference.
10.45	—	Master Loan and Security Agreement (U.S.) dated as of June 29, 2009 by and among ICON ION, LLC, as lender, ION Geophysical Corporation and ARAM Seismic Rentals, Inc., a Texas corporation, filed on August 6, 2009 as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and incorporated herein by reference.
10.46	—	Term Sheet dated as of October 23, 2009 by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation filed on March 1, 2010 as Exhibit 10.52 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference.
10.47	—	Warrant Issuance Agreement dated as of October 23, 2009 by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation filed on March 1, 2010 as Exhibit 10.53 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference.
10.48	—	Registration Rights Agreement dated as of October 23, 2009 by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation filed on March 1, 2010 as Exhibit 10.54 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference.
10.49	—	Stock Purchase Agreement dated as of March 19, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
10.50	—	Investor Rights Agreement dated as of March 25, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.2 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.

7

10.51	—	Share Purchase Agreement dated as of March 24, 2010, by and among ION Geophysical Corporation, INOVA Geophysical Equipment Limited and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.3 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
10.52	—	Joint Venture Agreement dated as of March 24, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.4 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
10.53	—	Credit Agreement dated as of March 25, 2010, by and among ION Geophysical Corporation, ION International S.À R.L. and China Merchants Bank Co., Ltd., New York Branch, as administrative agent and lender, filed on March 31, 2010 as Exhibit 10.5 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.54	—	Fifth Amendment to Employment Agreement dated June 1, 2010, between ION Geophysical Corporation and Robert P. Peebler, filed on June 1, 2010 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
*21.1	—	Subsidiaries of the Company.
*23.1	—	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
†23.2	—	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
*24.1	—	The Power of Attorney (included on the signature page of the Form 10-K filed on February 24, 2011).
†31.1	—	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a).
†31.2	—	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a).
†32.1	—	Certification of Chief Executive Officer Pursuant to 18 U.S.C. §1350.
†32.2	—	Certification of Chief Financial Officer Pursuant to 18 U.S.C. §1350.
†99.1	—	INOVA Geophysical Equipment Limited Audited Financial Statements as of December 31, 2010 and for the period from March 26, 2010 to December 31, 2010.

*	Filed with ION Geophysical Corporation’s Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on February 24, 2011.
**	Management contract or compensatory plan or arrangement.
†	Filed herewith.

(b) Exhibits required by Item 601 of Regulation S-K.

     Reference is made to subparagraph (a) (3) of this Item 15, which is incorporated herein by reference.

(c) Financial statement schedules.

The audited financial statements of INOVA Geophysical Equipment Limited referred to in subparagraph (a) (2) of this Item 15, are being filed herewith as financial statement schedules to this Amendment No. 1 to Annual Report on Form 10-K/A, in accordance with Rule 3-09 of Regulation S-X.

8

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Houston, State of Texas, on June 17, 2011.

ION GEOPHYSICAL CORPORATION
By	/s/ Robert P. Peebler
	Robert P. Peebler
	Chief Executive Officer and Director (Principal Executive Officer)

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Form 10-K/A (Amendment No. 1 to Annual Report on Form 10-K) has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name	Capacities	Date
/s/ ROBERT P. PEEBLER	Chief Executive Officer and Director	June 17, 2011
Robert P. Peebler	(Principal Executive Officer)
* R. BRIAN HANSON	Executive Vice President and Chief Financial	June 17, 2011
	Officer (Principal Financial Officer)
* MICHAEL L. MORRISON	Vice President and Corporate Controller	June 17, 2011
	(Principal Accounting Officer)
* JAMES M. LAPEYRE, JR.	Chairman of the Board of Directors and Director	June 17, 2011
* DAVID H. BARR	Director	June 17, 2011
* HAO HUIMIN	Director	June 17, 2011
* MICHAEL C. JENNINGS	Director	June 17, 2011
* FRANKLIN MYERS	Director	June 17, 2011
* S. JAMES NELSON, JR.	Director	June 17, 2011
* JOHN N. SEITZ	Director	June 17, 2011

* By:	/s/ Robert P. Peebler
	Robert P. Peebler
	Attorney-in-fact

9

EXHIBIT INDEX

3.1	—	Restated Certificate of Incorporation dated September 24, 2007 filed on September 24, 2007 as Exhibit 3.4 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
3.2	—	Amended and Restated Bylaws of ION Geophysical Corporation filed on September 24, 2007 as Exhibit 3.5 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
3.3	—	Certificate of Ownership and Merger merging ION Geophysical Corporation with and into Input/Output, Inc. dated September 21, 2007, filed on September 24, 2007 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.1	—	Certificate of Rights and Designations of Series D-1 Cumulative Convertible Preferred Stock, dated February 16, 2005 and filed on February 17, 2005 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.2	—	Certificate of Elimination of Series B Preferred Stock dated September 24, 2007, filed on September 24, 2007 as Exhibit 3.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.3	—	Certificate of Elimination of Series C Preferred Stock dated September 24, 2007, filed on September 24, 2007 as Exhibit 3.3 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.4	—	Certificate of Designation of Series D-2 Cumulative Convertible Preferred Stock dated December 6, 2007, filed on December 6, 2007 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.5	—	Certificate of Designations of Series A Junior Participating Preferred Stock of ION Geophysical Corporation effective as of December 31, 2008, filed on January 5, 2009 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
4.6	—	Form of Senior Indenture, filed on December 19, 2008 as Exhibit 4.3 to the Company’s Registration Statement on Form S-3 (Registration No. 333-156362) and incorporated herein by reference.
4.7	—	Form of Senior Note, filed on December 19, 2008 as Exhibit 4.4 to the Company’s Registration Statement on Form S-3 (Registration No. 333-156362) and incorporated herein by reference.
4.8	—	Form of Subordinated Indenture, filed on December 19, 2008 as Exhibit 4.5 to the Company’s Registration Statement on Form S-3 (Registration No. 333-156362) and incorporated herein by reference.
4.9	—	Form of Subordinated Note, filed on December 19, 2008 as Exhibit 4.6 to the Company’s Registration Statement on Form S-3 (Registration No. 333-156362) and incorporated herein by reference.
**10.1	—	Amended and Restated 1990 Stock Option Plan, filed on June 9, 1999 as Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (Registration No. 333-80299), and incorporated herein by reference.
10.2	—	Office and Industrial/Commercial Lease dated June 2005 by and between Stafford Office Park II, LP as Landlord and Input/Output, Inc. as Tenant, filed on March 31, 2006 as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and incorporated herein by reference.
10.3	—	Office and Industrial/Commercial Lease dated June 2005 by and between Stafford Office Park District as Landlord and Input/Output, Inc. as Tenant, filed on March 31, 2006 as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and incorporated herein by reference.
**10.4	—	Input/Output, Inc. Amended and Restated 1996 Non-Employee Director Stock Option Plan, filed on June 9, 1999 as Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (Registration No. 333-80299), and incorporated herein by reference.

10

**10.5	—	Amendment No. 1 to the Input/Output, Inc. Amended and Restated 1996 Non-Employee Director Stock Option Plan dated September 13, 1999 filed on November 14, 1999 as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 1999 and incorporated herein by reference.
**10.6	—	Employment Agreement dated effective as of May 22, 2006, between Input/Output, Inc. and R. Brian Hanson filed on May 1, 2006 as Exhibit 10.1 to the Company’s Form 8-K, and incorporated herein by reference.
**10.7	—	First Amendment to Employment Agreement dated as of August 20, 2007 between Input/Output, Inc. and R. Brian Hanson, filed on August 21, 2007 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.8	—	Second Amendment to Employment Agreement, dated as of December 1, 2008, between ION Geophysical Corporation and R. Brian Hanson, filed on January 29, 2009 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.9	—	Input/Output, Inc. Employee Stock Purchase Plan, filed on March 28, 1997 as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (Registration No. 333-24125), and incorporated herein by reference.
**10.10	—	Fifth Amended and Restated 2004 Long-Term Incentive Plan, filed as Appendix A to the definitive proxy statement for the 2010 Annual Meeting of Stockholders of ION Geophysical Corporation, filed on April 21, 2010, and incorporated herein by reference.
10.11	—	Registration Rights Agreement dated as of November 16, 1998, by and among the Company and The Laitram Corporation, filed on March 12, 2004 as Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, and incorporated herein by reference.
**10.12	—	Input/Output, Inc. 1998 Restricted Stock Plan dated as of June 1, 1998, filed on June 9, 1999 as Exhibit 4.7 to the Company’s Registration Statement on S-8 (Registration No. 333-80297), and incorporated herein by reference.
**10.13	—	Input/Output Inc. Non-qualified Deferred Compensation Plan, filed on April 1, 2002 as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, and incorporated herein by reference.
**10.14	—	Input/Output, Inc. 2000 Restricted Stock Plan, effective as of March 13, 2000, filed on August 17, 2000 as Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2000, and incorporated herein by reference.
**10.15	—	Input/Output, Inc. 2000 Long-Term Incentive Plan, filed on November 6, 2000 as Exhibit 4.7 to the Company’s Registration Statement on Form S-8 (Registration No. 333-49382), and incorporated by reference herein.
**10.16	—	Employment Agreement dated effective as of March 31, 2003, by and between the Company and Robert P. Peebler, filed on March 31, 2003, as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.17	—	First Amendment to Employment Agreement dated September 6, 2006, between Input/Output, Inc. and Robert P. Peebler, filed on September 7, 2006, as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.18	—	Second Amendment to Employment Agreement dated February 16, 2007, between Input/Output, Inc. and Robert P. Peebler, filed on February 16, 2007 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.19	—	Third Amendment to Employment Agreement dated as of August 20, 2007 between Input/Output, Inc. and Robert P. Peebler, filed on August 21, 2007 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.20	—	Fourth Amendment to Employment Agreement, dated as of January 26, 2009, between ION Geophysical Corporation and Robert P. Peebler, filed on January 29, 2009 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.21	—	Employment Agreement dated effective as of June 15, 2004, by and between the Company and

11

		David L. Roland, filed on August 9, 2004 as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, and incorporated herein by reference.
**10.22	—	Employment Agreement, dated as of December 1, 2008, between ION Geophysical Corporation and James R. Hollis, filed on January 29, 2009 as Exhibit 10.3 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
**10.23	—	GX Technology Corporation Employee Stock Option Plan, filed on August 9, 2004 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, and incorporated herein by reference.
10.24	—	Concept Systems Holdings Limited Share Acquisition Agreement dated February 23, 2004, filed on March 5, 2004 as Exhibit 2.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
10.25	—	Registration Rights Agreement by and between ION Geophysical Corporation and 1236929 Alberta Ltd. dated September 18, 2008, filed on November 7, 2008 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q and incorporated herein by reference.
**10.26	—	Form of Employment Inducement Stock Option Agreement for the Input/Output, Inc. — Concept Systems Employment Inducement Stock Option Program, filed on July 27, 2004 as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Reg. No. 333-117716), and incorporated herein by reference.
**10.27	—	Form of Employee Stock Option Award Agreement for ARAM Systems Employee Inducement Stock Option Program, filed on November 14, 2008 as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (Registration No. 333-155378) and incorporated herein by reference.
10.28	—	Agreement dated as of February 15, 2005, between Input/Output, Inc. and Fletcher International, Ltd., filed on February 17, 2005 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.29	—	First Amendment to Agreement, dated as of May 6, 2005, between the Company and Fletcher International, Ltd., filed on May 10, 2005 as Exhibit 10.2 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.30	—	Input/Output, Inc. 2003 Stock Option Plan, dated March 27, 2003, filed as Appendix B of the Company’s definitive proxy statement filed with the SEC on April 30, 2003, and incorporated herein by reference.
10.31	—	Amended and Restated Credit Agreement dated as of July 3, 2008, by and among ION Geophysical Corporation, ION International S.À R.L., HSBC Bank USA, N.A., as administrative agent, joint lead arranger and joint bookrunner, ABN AMRO Incorporated, as joint lead arranger and joint bookrunner, and CitiBank, N.A., as syndication agent, filed on July 8, 2008 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.32	—	First Amendment to Amended and Restated Credit Agreement and Domestic Security Agreement, dated as of September 17, 2008, by and among ION Geophysical Corporation, ION International S.À R.L., HSBC Bank USA, N.A., as administrative agent, joint lead arranger and joint bookrunner, ABN AMRO Incorporated, as joint lead arranger and joint bookrunner, and CitiBank, N.A., as syndication agent, filed on September 23, 2008 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.33	—	Third Amendment to Amended and Restated Credit Agreement, dated as of December 29, 2008, by and among ION Geophysical Corporation, ION International S.À R.L., the Guarantors and Lenders party thereto and HSBC Bank USA, N.A., as administrative agent, filed on January 5, 2009 as Exhibit 10.3 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.34	—	Fourth Amendment to Amended and Restated Credit Agreement and Foreign Security Agreement, Limited Waiver and Release dated as of December 30, 2008, by and among ION Geophysical Corporation, ION International S.À R.L., the Guarantors and Lenders party thereto and HSBC Bank USA, N.A., as administrative agent, filed on January 5, 2009 as Exhibit 10.4 to the Company’s Current Report on Form 8-K and incorporated herein by reference.

12

10.35	—	Fifth Amendment to Amended and Restated Credit Agreement dated effective as of June 1, 2009 by and among ION Geophysical Corporation, ION International S.à r.l., certain other foreign and domestic subsidiaries of the ION Geophysical Corporation, HSBC Bank USA, N.A., as administrative agent, joint lead arranger and joint bookrunner, ABN AMRO Incorporated, as joint lead arranger and joint bookrunner, Citibank, N.A., as syndication agent, and the lenders party thereto, filed on August 6, 2009 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and incorporated herein by reference.
10.36	—	Sixth Amendment and Waiver to Amended and Restated Credit Agreement dated effective as of October 23, 2009 by and among ION Geophysical Corporation, ION International S.À R.L., the Guarantors and Lenders party thereto and HSBC Bank USA, N.A., as administrative agent filed on March 1, 2010 as Exhibit 10.36 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference.
**10.37	—	Form of Employment Inducement Stock Option Agreement for the Input/Output, Inc. — GX Technology Corporation Employment Inducement Stock Option Program, filed on April 4, 2005 as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Reg. No. 333-123831), and incorporated herein by reference.
**10.38	—	First Amendment to Consulting Services Agreement dated as of January 5, 2007, by and between GX Technology Corporation and Michael K. Lambert, filed on January 8, 2007 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.39	—	Letter agreement dated October 19, 2006, by and between the Company and Michael K. Lambert, filed on October 24, 2006 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.40	—	Severance Agreement dated as of December 1, 2008, between ION Geophysical Corporation and Charles J. Ledet, filed on December 5, 2008 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.41	—	Consulting Agreement dated as of December 1, 2008, between ION Geophysical Corporation and Charles J. Ledet, filed on December 5, 2008 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
10.42	—	Rights Agreement, dated as of December 30, 2008, between ION Geophysical Corporation and Computershare Trust Company, N.A., as Rights Agent, filed as Exhibit 4.1 to the Company’s Form 8-A (Registration No. 001-12691) and incorporated herein by reference.
**10.43	—	ION Stock Appreciation Rights Plan dated November 17, 2008, filed as Exhibit 10.47 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, and incorporated herein by reference.
10.44	—	Canadian Master Loan and Security Agreement dated as of June 29, 2009 by and among ICON ION, LLC, as lender, ION Geophysical Corporation and ARAM Rentals Corporation, a Nova Scotia corporation, filed on August 6, 2009 as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and incorporated herein by reference.
10.45	—	Master Loan and Security Agreement (U.S.) dated as of June 29, 2009 by and among ICON ION, LLC, as lender, ION Geophysical Corporation and ARAM Seismic Rentals, Inc., a Texas corporation, filed on August 6, 2009 as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and incorporated herein by reference.
10.46	—	Term Sheet dated as of October 23, 2009 by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation filed on March 1, 2010 as Exhibit 10.52 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference.
10.47	—	Warrant Issuance Agreement dated as of October 23, 2009 by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation filed on March 1, 2010 as Exhibit 10.53 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference.
10.48	—	Registration Rights Agreement dated as of October 23, 2009 by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation filed on March 1, 2010 as

13

		Exhibit 10.54 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference.
10.49	—	Stock Purchase Agreement dated as of March 19, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
10.50	—	Investor Rights Agreement dated as of March 25, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.2 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
10.51	—	Share Purchase Agreement dated as of March 24, 2010, by and among ION Geophysical Corporation, INOVA Geophysical Equipment Limited and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.3 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
10.52	—	Joint Venture Agreement dated as of March 24, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.4 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
10.53	—	Credit Agreement dated as of March 25, 2010, by and among ION Geophysical Corporation, ION International S.À R.L. and China Merchants Bank Co., Ltd., New York Branch, as administrative agent and lender, filed on March 31, 2010 as Exhibit 10.5 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
**10.54	—	Fifth Amendment to Employment Agreement dated June 1, 2010, between ION Geophysical Corporation and Robert P. Peebler, filed on June 1, 2010 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
*21.1	—	Subsidiaries of the Company.
*23.1	—	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
†23.2	—	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
*24.1	—	The Power of Attorney (included on the signature page of the Form 10-K filed on February 24, 2011).
†31.1	—	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a).
†31.2	—	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a).
†32.1	—	Certification of Chief Executive Officer Pursuant to 18 U.S.C. §1350.
†32.2	—	Certification of Chief Financial Officer Pursuant to 18 U.S.C. §1350.
†99.1	—	INOVA Geophysical Equipment Limited Audited Financial Statements as of December 31, 2010 and for the period from March 26, 2010 to December 31, 2010.

*	Filed with ION Geophysical Corporation’s Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on February 24, 2011.
**	Management contract or compensatory plan or arrangement.
†	Filed herewith.

14

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements of ION Geophysical Corporation:

(1)	Registration Statement (Form S-8 No. 33-54394) pertaining to the Input/Output, Inc. Amended 1990 Stock Option Plan and Amended and Restated 1991 Outside Directors’ Stock Option Plan,
(2)	Registration Statement (Form S-8 No. 33-46386) pertaining to the Input/Output, Inc. 1990 Restricted Stock Plan, 1990 Stock Option Plan and 1991 Directors’ Stock Option Plan,
(3)	Registration Statement (Form S-8 No. 33-85304) pertaining to the Input/Output, Inc. Amended 1990 Stock Option Plan and the Input/Output, Inc. Amended and Restated 1991 Outside Directors Stock Option Plan,
(4)	Registration Statement (Form S-8 No. 333-14231) pertaining to the Input/Output, Inc. 1996 Non-Employee Director Stock Option Plan,
(5)	Registration Statement (Form S-8 No. 333-24125) pertaining to the Input/Output, Inc. Employee Stock Purchase Plan,
(6)	Registration Statement (Form S-8 No. 333-80297) pertaining to the Input/Output, Inc. 1998 Restricted Stock Plan,
(7)	Registration Statement (Form S-8 No. 333-80299) pertaining to the Input/Output, Inc. Amended and Restated 1990 Stock Option Plan and the Input/Output, Inc. Amended and Restated 1996 Non-Employee Director Stock Option Plan,
(8)	Registration Statement (Form S-8 No. 333-36264) pertaining to the Input/Output, Inc. 2000 Restricted Stock Plan,
(9)	Registration Statement (Form S-8 No. 333-49382) pertaining to the Input/Output, Inc. 2000 Long-Term Incentive Plan,
(10)	Registration Statement (Form S-8 No. 333-60950) pertaining to the Input/Output, Inc. Non-Employee Directors’ Retainer Plan,
(11)	Registration Statement (Form S-8 No. 333-112677) pertaining to the Input/Output, Inc. 2003 Employee Stock Option Plan,
(12)	Registration Statement (Form S-8 No. 333-116355) pertaining to the GX Technology Corporation Employee Stock Option Plan,
(13)	Registration Statement (Form S-8 No. 333-117716) pertaining to the Input/Output, Inc. Concept Systems Employment Inducement Stock Option Program,
(14)	Registration Statement (Form S-8 No. 333-123831) pertaining to the Input/Output, Inc. GX Technology Corp. Employment Inducement Stock Option Program and the Input/Output, Inc. April 2005 Inducement Equity Program,
(15)	Registration Statement (Form S-8 No. 333-125655) pertaining to the Input/Output, Inc. 2004 Long-Term Incentive Plan,
(16)	Registration Statement (Form S-8 No. 333-135775) pertaining to the Input/Output, Inc. Second Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan,
(17)	Registration Statement (Form S-3 No. 333-112263) of Input/Output, Inc.,
(18)	Registration Statement (Form S-3 No. 333-115345) of Input/Output, Inc.,
(19)	Registration Statement (Form S-3 No. 333-123632) of Input/Output, Inc.,
(20)	Registration Statement (Form S-8 No. 333-145274) pertaining to the Third Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan,
(21)	Registration Statement (Form S-3 No. 333-148235) of ION Geophysical Corporation,
(22)	Registration Statement (Form S-3 No. 333-149458) of ION Geophysical Corporation,
(23)	Registration Statement (Form S-8 No. 333-155378) pertaining to the Fourth Amended and Restated 2004 Long-Term Incentive Plan and the ARAM Systems Employee Inducement Stop Options Program,
(24)	Registration Statement (Form S-3 No. 333-155387) of ION Geophysical Corporation,
(25)	Registration Statement (Form S-3 No. 333-156362) of ION Geophysical Corporation,
(26)	Registration Statement (Form S-3 No. 333-156363) of ION Geophysical Corporation,
(27)	Registration Statement (Form S-3 No. 333-159898) of ION Geophysical Corporation,
(28)	Registration Statement (Form S-8 No. 333-167943) pertaining to the Fifth Amended and Restated 2004 Long-Term Incentive Plan and the ION Geophysical Corporation Employee Stock Purchase Plan, and
(29)	Registration Statement (Form S-3 No. 333-166200) of ION Geophysical Corporation,

of our report dated June 17, 2011, with respect to the consolidated financial statements of INOVA Geophysical Equipment Limited and subsidiaries as of December 31, 2010 and for the period from March 26, 2010 to December 31, 2010, included in this Form 10-K/A — Amendment No. 1 to Annual Report on Form 10-K of ION Geophysical Corporation for the year ended December 31, 2010.

Ernst and Young LLP
 

Calgary, Alberta
June 17, 2011

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

I, Robert P. Peebler, certify that:

1.	I have reviewed this Amendment No. 1 to Annual Report on Form 10-K/A for the year ended December 31, 2010 of ION Geophysical Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 17, 2011	/s/ Robert P. Peebler
	Robert P. Peebler
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

I, R. Brian Hanson, certify that:

1.	I have reviewed this Amendment No. 1 to Annual Report on Form 10-K/A for the year ended December 31, 2010 of ION Geophysical Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 17, 2011	/s/ R. Brian Hanson
	R. Brian Hanson
	Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. §1350

     In connection with this Amendment No. 1 to Annual Report of ION Geophysical Corporation (the “Company”) on Form 10-K/A for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert P. Peebler, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 17, 2011	/s/ Robert P. Peebler
	Robert P. Peebler
	Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. §1350

     In connection with this Amendment No. 1 to Annual Report of ION Geophysical Corporation (the “Company”) on Form 10-K/A for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, R. Brian Hanson, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 17, 2011	/s/ R. Brian Hanson
	R. Brian Hanson
	Executive Vice President and Chief Financial Officer

EX-99.1

EXHIBIT 99.1

Report of Independent Registered Public Accounting Firm

The Board of Directors of INOVA Geophysical Equipment Limited

     We have audited the accompanying consolidated balance sheet of INOVA Geophysical Equipment Limited and subsidiaries at December 31, 2010, and the related consolidated statements of operations, cash flows, and owners’ equity and comprehensive loss for the period from March 26, 2010 to December 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of INOVA Geophysical Equipment Limited and subsidiaries at December 31, 2010, and the consolidated results of their operations and their cash flows for the period from March 26, 2010 to December 31, 2010, in conformity with U.S. generally accepted accounting principles.

Ernst and Young LLP
Chartered Accountants

Calgary, Alberta
June 17, 2011

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INOVA GEOPHYSICAL EQUIPMENT LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
As at December 31, 2010
(In thousands)

ASSETS
Current assets:
Cash and cash equivalents	$	10,329
Accounts receivable from third parties, net		16,177
Accounts receivable from related parties		16,477
Notes receivable		6,671
Inventories		74,487
Prepaid expenses and other current assets		5,300
Total current assets		129,441
Property, plant and equipment, net		19,020
Seismic rental equipment, net		42,146
Goodwill		25,148
Intangible assets, net		35,100
Total assets	$	250,855
LIABILITIES AND OWNERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	4,019
Accounts payable		10,635
Accrued expenses		13,421
Accounts payable to related parties		4,618
Deferred revenue		2,313
Total current liabilities		35,006
Long term debt, net of current maturities (related party — $10,000)		23,164
Related party loan guarantee		1,000
Total liabilities		59,170
Commitments and contingencies
Owners’ equity:
Owners’ investment		241,810
Accumulated deficit		(51,107	)
Accumulated other comprehensive income		982
Total owners’ equity		191,685
Total liabilities and owners’ equity	$	250,855

See accompanying Notes to Consolidated Financial Statements.

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INOVA GEOPHYSICAL EQUIPMENT LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Period from March 26, 2010 to December 31, 2010
(In thousands)

Revenues from third parties	$	70,164
Revenues from related parties		22,924
Net revenues		93,088
Cost of sales (including excess and obsolete inventory charge of $20,238)		103,516
Gross profit (loss)		(10,428	)
Operating expenses:
Research, development and engineering		17,178
Marketing and sales		7,062
General and administrative		11,012
Costs charged by a related party		2,492
Costs incurred by a related party for the benefit of INOVA		510
Total operating expenses		38,254
Loss from operations		(48,682	)
Interest expense, net		(2,126	)
Other income		1,170
Loss before income taxes		(49,638	)
Income tax expense		1,469
Net loss	$	(51,107	)

See accompanying Notes to Consolidated Financial Statements.

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INOVA GEOPHYSICAL EQUIPMENT LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Period from March 26, 2010 to December 31, 2010
(In thousands)

Cash flows from operating activities:
Net loss	$	(51,107	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		20,608
Excess & obsolete inventory expense		20,238
Bad debt expense		629
Amortization of debt premium		(397	)
Costs incurred by a related party for the benefit of INOVA		510
Profits and (gains) losses on sale of property, plant, equipment and seismic rental equipment		(9,308	)
Purchase of seismic rental equipment		(710	)
Proceeds from sale of seismic rental equipment		17,819
Change in operating assets and liabilities:
Accounts and notes receivable		3,090
Inventories		16,670
Accounts payable and accrued expenses		(7,150	)
Deferred revenue		(304	)
Due to/from related parties		(11,860	)
Other assets and liabilities		(3,137	)
Net cash used in operating activities		(4,409	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(2,839	)
Cash from acquired business		4,552
Net cash provided by investing activities		1,713
Cash flows from financing activities:
Borrowings under revolving credit facility		20,000
Repayments under revolving credit facility		(10,000	)
Borrowings from owners		11,500
Repayments to owners		(11,500	)
Payments on secured equipment financing		(2,331	)
Repayment of capital lease obligations		(2,369	)
Net cash provided by financing activities		5,300
Effect of change in foreign currency exchange rates on cash and cash equivalents		1,460
Net increase in cash and cash equivalents		4,064
Cash and cash equivalents at beginning of period		6,265
Cash and cash equivalents at end of period	$	10,329
Non-cash items from investing and financing activities:
Net non-cash assets contributed by owners	$	226,371
INOVA assumption of BGP guarantee of ION debt	$	1,000
Costs incurred by BGP for the benefit of INOVA	$	510
Property, plant and equipment additions from prepaid expenses	$	1,180
Supplemental disclosure of cash flow information:
Interest paid, net	$	1,643
Income taxes received	$	199

See accompanying Notes to Consolidated Financial Statements.

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INOVA GEOPHYSICAL EQUIPMENT LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OWNERS’ EQUITY AND
COMPREHENSIVE LOSS
Period from March 26, 2010 to December 31, 2010
(In thousands)

									Accumulated
									Other		Total
	Owners’ Investment					Accumulated			Comprehensive		Owners’
	BGP			ION		Deficit			Income		Equity
Balance at March 25, 2010	$	11,377		$	—	$	—		$	—	$	11,377
Owners’ contributions		112,196			118,727		—			—		230,923
INOVA assumption of BGP guarantee of ION debt		(1,000	)		—		—			—		(1,000	)
BGP costs incurred for benefit of INOVA		510			—		—			—		510
Comprehensive loss:
Net loss		—			—		(51,107	)		—		(51,107	)
Translation adjustment		—			—		—			982		982
Total comprehensive loss												(50,125	)
Balance at December 31, 2010	$	123,083		$	118,727	$	(51,107	)	$	982	$	191,685

See accompanying Notes to Consolidated Financial Statements.

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INOVA GEOPHYSICAL EQUIPMENT LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

     General Description and Principles of Consolidation

     INOVA Geophysical Equipment Limited and its wholly owned subsidiaries offer products and services for land seismic data acquisition for the petroleum industry worldwide. The consolidated financial statements include the accounts of INOVA Geophysical Equipment Limited and its wholly-owned subsidiaries (collectively referred to as the “Company” or “INOVA”) and are in accordance with U.S. generally accepted accounting principles. Inter-company balances and transactions have been eliminated.

     INOVA was formed on March 25, 2010, and is 51% owned by BGP, Inc., China National Petroleum Corporation (“BGP”) and 49% owned by ION Geophysical Corporation (“ION”) and is governed by a 30 year renewable agreement. The Company is headquartered and incorporated in Beijing, China. The consolidated statements of operations, cash flows and owners’ equity and comprehensive loss reflect all net assets and operations contributed to INOVA by both BGP and ION for the period from March 26, 2010 to December 31, 2010.

     Overview of Formation of INOVA

     On March 24, 2010, BGP and ION entered into a Share Purchase Agreement (the “Share Purchase Agreement”), under which ION agreed to sell to BGP a 51% interest in an entity created by ION. Subsequently, ION contributed certain land seismic assets, liabilities and operations (the “ION Assets”) into this entity in exchange for cash consideration of $108.5 million and a 49% interest in a Chinese entity containing certain assets and operations being contributed by BGP (the “BGP Assets”). BGP and ION then contributed their respective interests in the entity containing the BGP Assets into the entity containing the ION Assets to form INOVA. These formation steps were completed on March 25, 2010.

     The net assets contributed by BGP and ION included land seismic recording systems technologies, inventory, fixed assets, certain intellectual property rights and contract rights necessary to or principally used in the conduct or operation of the land equipment businesses as conducted or operated by BGP and ION, respectively, prior to closing. INOVA combines ION’s land seismic equipment business and related technologies with BGP’s expertise and experience in land seismic operations thereby creating a new enterprise with the resources, technologies and experience required to provide advanced products and services on a global basis.

     For further discussion regarding accounting for the formation of INOVA and the assets and liabilities contributed by BGP and ION, see Note 2 “— INOVA Formation”.

     Use of Estimates

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates are made at discrete points in time based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of judgment and, therefore, cannot be determined with precision. Areas involving significant estimates include, but are not limited to, accounts receivable, notes receivable, inventory valuation, goodwill and intangible asset valuation, property, plant, equipment and seismic rental equipment valuation, deferred taxes and accrued warranty costs. Actual results could materially differ from those estimates.

     Cash and Cash Equivalents

     The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

     Accounts and Notes Receivable

     Accounts and notes receivable are recorded at cost, less the related allowance for doubtful accounts. The Company considers current information and events regarding the customers’ ability to repay their obligations, such as the length of time the receivable balance is outstanding, the customers’ credit worthiness and historical collection experience. The Company considers an account or

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note to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms. When a note receivable is considered impaired, the amount of the impairment is measured based on the present value of expected future cash flows or the fair value of collateral. Impairment losses (recoveries) are included in the allowance for doubtful accounts and notes through an increase (decrease) in bad debt expense.

     Notes receivable are generally collateralized by the products sold and bear interest at contractual rates of up to 11.5% per year. If a note receivable was deemed impaired, cash receipts would be applied to reduce the principal amount of such notes until the principal has been recovered and are recognized as interest income thereafter. The Company records interest income on notes receivable on the accrual basis of accounting. The Company does not accrue interest on impaired loans where collection of interest according to the contractual terms is considered doubtful. Among the factors the Company considers in making an evaluation of the collectability of interest are: (i) the status of the loan; (ii) the fair value of the underlying collateral; (iii) the financial condition of the borrower; and (iv) anticipated future events.

     Inventories

     Inventories are stated at the lower of cost (primarily first-in, first-out method) or market. Cost of inventories include the cost of materials and component parts and labor and overhead costs related to the production of finished products. The Company provides reserves for estimated obsolescence or excess inventory equal to the difference between cost of inventory and its estimated market value based upon assumptions about future demand for the Company’s products and market conditions.

     Property, Plant, Equipment and Seismic Rental Equipment

     Property, plant, equipment and seismic rental equipment are stated at cost. Depreciation expense is provided on a straight-line basis over the following estimated useful lives:

	Years
Machinery and equipment		3-15
Buildings		5-20
Seismic rental equipment		2-7
Leased equipment and other		3-5

     Expenditures for renewals and betterments are capitalized; repairs and maintenance are charged to expense as incurred. The cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the accounts and any gain or loss is reflected in operating expenses.

     The Company evaluates the recoverability of long-lived assets, including property, plant, equipment and seismic rental equipment, when indicators of impairment exist, relying on a number of factors including operating results, business plans, economic projections, and anticipated future cash flows. Impairment in the carrying value of an asset held for use is recognized whenever anticipated future cash flows (undiscounted) from an asset are estimated to be less than its carrying value. The amount of the impairment recognized is the difference between the carrying value of the asset and its fair value. There were no significant impairment charges with respect to the Company’s property, plant, equipment and seismic rental equipment during 2010.

     Financial Instruments

     Fair value estimates are made at discrete times based on relevant market information. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. The Company believes that the carrying amount of its cash and cash equivalents, accounts and notes receivable, and accounts payable approximate their fair values at those dates. The fair market value of the Company’s outstanding non-related party long-term debt was determined to be $18.5 million at December 31, 2010 compared to a carrying value of $17.2 million. The difference in the carrying value and fair value of the Company’s outstanding non-related party long-term debt relates to secured equipment financing, the fair value for which was calculated using an estimated interest rate for unsecured debt. The carrying value of the Company’s related party long term debt and loan guarantee are $10.0 million and $1.0 million, respectively.

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     Goodwill and Other Intangible Assets

     Goodwill is allocated to reporting units, which are either the operating segment or one reporting level below the operating segment. For purposes of performing the impairment test for goodwill as required by Accounting Standards Codification (“ASC”) 350 “Intangibles — Goodwill and Other,” (“ASC 350”) the Company established the following reporting units: Canada, U.S.A, and China. To determine the fair value of these reporting units, the Company primarily uses a discounted future returns valuation method supplemented by comparison analysis of relevant market participants.

     The reporting units established by management represent the geographic locations from which the manufacture and sale and rental of separate and distinct land seismic technologies occurs. Specifically, the Canada reporting unit contains the Company’s ARIES land seismic system technology and related assets and operations; the U.S.A. reporting unit contains the Company’s Scorpion and Firefly land seismic systems technologies and vibrator and vibrator related technologies and related assets and operations; and, the China reporting unit contains the land seismic technologies and related assets and operations contributed with the BGP Assets.

     In accordance with ASC 350, the Company is required to evaluate the carrying value of its goodwill at least annually for impairment, or more frequently if facts and circumstances indicate that it is more likely than not impairment has occurred. The Company formally evaluates the carrying value of its goodwill for impairment as of September 30th for each of its reporting units. If the carrying value of a reporting unit of an entity that includes goodwill is determined to be more than the fair value of the reporting unit, there exists the possibility of impairment of goodwill. Impairment of goodwill is measured in two steps by first allocating the fair value of the reporting unit to the net assets and liabilities including recorded and unrecorded other intangible assets to determine the implied carrying value of goodwill. The next step is to measure the difference between the carrying value of goodwill and the implied carrying value of goodwill, and, if the implied carrying value of goodwill is less than the carrying value of goodwill, an impairment loss is recorded equal to the difference. Refer to Note 6 “— Goodwill” for further discussion.

     Intangible assets other than goodwill relate to patents and trademarks that are amortized over the estimated periods of benefit (ranging from 5 to 14 years). Costs to renew or extend these patents and trademarks are expensed as incurred. Following the guidance of ASC 360 “Accounting for the Impairment and Disposal of Long-Lived Assets,” the Company reviews the carrying values of these intangible assets for impairment if events or changes in the facts and circumstances indicate that their carrying value may not be recoverable. Any impairment determined is recorded in the current period and is measured by comparing the fair value of the related asset to its carrying value. Refer to Note 7 “— Intangible Assets” for further discussion.

     Intangible assets amortized on a straight-line basis are:

	Estimated Useful Life
	(Years)
Trademarks		12-14
Patents		5-14

     Fair Value Measurements

     ASC 820-10, “Fair Value Measurements,” defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This standard establishes a fair value hierarchy based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions about the assumptions market participants would use, which are broken out into three levels. Level 1 inputs are quoted prices from active markets for identical assets and liabilities at the measurement date, while Level 2 inputs are inputs other than quoted prices that are observable, either directly or indirectly. Level 3 inputs are unobservable and relate to assets and liabilities whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques reflecting the Company’s own assumptions and requiring significant management judgment.

     INOVA Formation — As discussed in Note 2 “— INOVA Formation”, the formation of INOVA has been accounted for as an acquisition of the majority interest in INOVA by BGP wherein the Company performed a valuation to determine the fair value of the ION Assets (refer to “Overview of Formation of INOVA” above). This valuation was performed primarily using a discounted cash flow model, which included a variety of Level 3 inputs. The key inputs to the model included operational five-year forecasts and market discount factors.

     Goodwill — In September 2010, the Company performed its annual goodwill impairment test. This test was performed using a discounted cash flow model, which included a variety of Level 3 inputs. The key inputs for the model included the operational five-year forecast for the Company, the current market discount factor and the forecasted cash flows related to each reporting unit. The forecasted operational and cash flow amounts were determined using the current activity levels in the Company as well as the current

8

and expected short-term market conditions. Refer to Note 6 “— Goodwill” for further discussion.

     ION Loan Guarantee — Upon assumption by the Company of BGP’s guarantee of ION’s credit facility, the Company performed a valuation of the guarantee using Level 3 inputs. The fair value was estimated using weighted probabilities of payouts, which included a variety of inputs. The key inputs for the analysis included estimated payouts and respective probabilities of occurrence as determined by the contractual terms of the guarantee and an analysis of ION’s financial position. Refer to Note 10 “— Guarantee of ION Credit Facility” for further discussion.

     Revenue Recognition

     The Company derives revenue from the sale and rental of acquisition systems and other seismic equipment.

     Sale of Acquisition Systems and Other Seismic Equipment — For the sales of acquisition systems and other seismic equipment, the Company follows the requirements of ASC 605-10 “Revenue Recognition” and recognizes revenue when (a) evidence of an arrangement exists; (b) the price to the customer is fixed and determinable; (c) collectability is reasonably assured; and (d) the acquisition system or other seismic equipment is delivered to the customer and risk of ownership has passed to the customer, or, in the limited case where a substantive customer-specified acceptance clause exists in the contract, the later of delivery or when the customer-specified acceptance is obtained.

     Rental of Acquisition Systems and Other Seismic Equipment — The Company receives rental income from the rental of seismic equipment and other seismic equipment. These rentals are in the form of operating leases under which the lease terms range from a couple of days to several months. Rental revenue is recognized on a straight-line basis over the term of the operating lease.

     Multi-element Arrangements — When separate elements (such as an acquisition system and/or other seismic equipment) are contained in a single sales arrangement, or in related arrangements with the same customer, the Company follows the requirements of ASC 605-25 “Accounting for Multiple-Element Revenue Arrangement” (“ASC 605-25”). The multiple element arrangements guidance codified in ASC 605-25 was modified as a result of the final consensus reached in Accounting Standards Update (“ASU”) 2009-13, “Revenue Arrangements with Multiple Deliverables.” The Company elected to early adopt this new guidance in 2010.

     This guidance eliminated the residual method of allocation for multiple-deliverable revenue arrangements and requires that arrangement consideration be allocated at the inception of an arrangement to all deliverables using the relative selling price method. Per the provisions of this guidance, the Company allocates arrangement consideration to each deliverable qualifying as a separate unit of accounting in an arrangement based on its relative selling price. The Company determines its selling price using vendor specific objective evidence (“VSOE”), if it exists, or otherwise third-party evidence (“TPE”). If neither VSOE nor TPE of selling price exists for a unit of accounting, the Company uses estimated selling price (“ESP”). The Company generally expects that it will not be able to establish TPE due to the nature of the markets in which the Company competes, and, as such, the Company typically will determine its selling price using VSOE or, if not available, ESP. VSOE is generally limited to the price charged when the same or similar product is sold on a standalone basis. If a product is seldom sold on a standalone basis, it is unlikely that the Company can determine VSOE for the product.

     The objective of ESP is to determine the price at which the Company would transact if the product were sold by the Company on a standalone basis. The Company’s determination of ESP involves a weighting of several factors based on the specific facts and circumstances of the arrangement. Specifically, the Company will consider the anticipated margin on the particular deliverable, the selling price and profit margin for similar products and the Company’s ongoing pricing strategy and policies.

     A typical arrangement might involve the sale of various products of the Company’s acquisition systems and other seismic equipment. Products under these arrangements are often delivered to the customer within the same period, but in certain situations, depending upon product availability and the customer’s delivery requirements, the products could be delivered to the customer at different times. In these situations, the Company considers its products to be separate units of accounting provided the delivered product has value to the customer on a standalone basis. The Company considers a deliverable to have standalone value if the product is sold separately by the Company or another vendor or could be resold by the customer. Further, the Company’s revenue arrangements generally do not include a general right of return relative to the delivered products.

     Product Warranty — The Company generally warrants that its manufactured equipment will be free from defects in workmanship, materials and parts. Warranty periods generally range from six months to two years from the date of original purchase, depending on the product. The Company provides for estimated warranty as a charge to costs of sales at the time of sale.

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     Research, Development and Engineering

     Research, development and engineering costs primarily relate to activities that are intended to improve the quality of the subsurface image and overall acquisition economics of the Company’s customers. The costs associated with these activities are expensed as incurred. These costs include prototype material and field testing expenses, along with the related salaries, facility costs, consulting fees, tools and equipment usage, and other miscellaneous expenses associated with these activities.

     Income Taxes

     Income taxes are accounted for under the liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company reserves for all of its net deferred tax assets and will continue to do so until there is sufficient evidence to warrant reversal. Refer to Note 11“— Income Taxes” for further discussion.

     Comprehensive Net Loss

     Comprehensive net loss, consisting of net loss and foreign currency translation adjustments is presented in the Consolidated Statements of Owners’ Equity and Comprehensive Loss. The balance in Accumulated Other Comprehensive Income as shown in the Consolidated Balance Sheet as at December 31, 2010, consists of foreign currency translation adjustments.

     Foreign Currency Gains and Losses

     Management has determined that the Company’s functional currency is U.S. dollars. Assets and liabilities of the Company’s subsidiaries operating in a functional currency other than U.S. dollars have been translated to U.S. dollars using the exchange rate in effect at the balance sheet date. Results of foreign operations have been translated using the average exchange rate during the periods of operation. Resulting translation adjustments have been recorded as a component of Accumulated Other Comprehensive Income. Foreign currency transaction gains and losses are included in the Consolidated Statement of Operations as they occur. Total foreign currency transaction gains were $1.0 million for the period from March 26, 2010 to December 31, 2010.

     Concentration of Credit and Foreign Sales Risks

     Sales to BGP (a related party) and Tesla Exploration and certain of their respective subsidiary or affiliated entities represented approximately 23.4% and 11.8% of the Company’s consolidated net revenues for the period from March 26, 2010 to December 31, 2010, respectively. The loss of these significant customers or deterioration in the Company’s relationship with these customers could have a material adverse effect on the Company’s results of operations and financial condition.

     For the period from March 26, 2010 to December 31, 2010, the Company recognized $31.7 million of sales to customers in North America, $25.6 million of sales to customers in Asia Pacific, $24.3 million of sales to customers in Africa and the Middle East, $7.7 million of sales to customers in the Commonwealth of Independent States, or former Soviet Union (CIS), $1.9 million of sales to customers in Latin American countries and $1.9 million of sales to customers in Europe. The majority of the Company’s sales are denominated in U.S. dollars. For a number of years, the CIS and certain Latin American countries have experienced economic problems and uncertainties. Political and economic instability have also plagued many countries in Africa and the Middle East. To the extent that world events or economic conditions negatively affect the Company’s future sales to customers in these and other regions of the world or the collectability of the Company’s existing receivables, the Company’s future results of operations, liquidity, and financial condition would be adversely affected.

     Recent Accounting Pronouncements

     In January 2010, the Financial Accounting Standards Board issued ASU No. 2010-06, “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”). ASU 2010-06 amends the disclosure guidance with respect to fair value measurements. Specifically, the new guidance requires disclosure of amounts transferred in and out of Levels 1 and 2 fair value measurements, a reconciliation presented on a gross basis rather than a net basis of activity in Level 3 fair value measurements, greater disaggregation of the assets and liabilities for which fair value measurements are presented and more robust disclosure of the valuation techniques and inputs used to measure Level 2 and 3 fair value measurements. ASU 2010-06 is

10

effective for reporting periods beginning after December 15, 2009, with the exception of the new guidance around the Level 3 activity reconciliations, which is effective for fiscal years beginning after December 15, 2010. The adoption of ASU 2010-06 did not have a material impact to the Company’s financial position, results of operation or cash flows.

(2) INOVA Formation

     As discussed at Note 1 “— Summary of Significant Accounting Policies — Overview of Formation of INOVA”, on March 25, 2010, BGP purchased a 51% equity interest in the ION Assets for cash consideration of $108.5 million and BGP transferred to ION a 49% equity interest in a Chinese entity containing the BGP Assets. This Chinese entity was then jointly contributed to INOVA by BGP and ION. As part of these transactions, INOVA assumed certain liabilities related to the businesses contributed by ION. Among these liabilities was $18.4 million relating to the secured equipment financing also contributed to INOVA by ION as well as a $2.4 million in capital lease obligation (refer to Note 9 “— Long-Term Debt” for further discussion).

     The acquisition of the majority interest in INOVA by BGP has been accounted for using the purchase method following the guidance of ASC 805 “Business Combinations” (“ASC 805”). The purchase price was allocated to the fair value of assets purchased and liabilities assumed. The allocation of the purchase price for the acquisition is as follows (in thousands):

Fair values of assets and liabilities:
Net current assets	$	126,482
Property, plant, equipment and seismic rental equipment		64,292
Net other long-term assets		238
Intangible assets (trademarks and patents)		37,100
Goodwill		25,102
Secured equipment financing and capital lease liability		(22,291	)
Total allocated purchase price		230,923
Less cash of acquired business		(4,552	)
Owners’ investment contributed, net of cash acquired	$	226,371

     Following the guidance of ASC 805, BGP is considered the acquiring entity. As such, the BGP Assets were recorded on the date of INOVA’s formation on March 25, 2010 using BGP’s historical carrying values for those assets which were comprised of approximately $6.8 million relating to cash and other current assets and approximately $4.6 million relating to property and equipment. These assets and their respective carrying amounts are excluded from the above purchase price allocation.

     Goodwill recognized on acquisition of the ION Assets relates to operational synergies and other intangible benefits resulting from combining the assets, technologies and operations contributed by ION with the assets and experience contributed by BGP the effect of which do not meet the criteria for separate accounting under ASC 805. No amount of this goodwill is expected to be deductible for tax purposes.

     The fair value of net current assets recognized on formation of INOVA includes inventory step-downs of approximately $20.0 million resulting primarily from the write-off of inventory deemed to be excessive based on the five-year revenue forecasts used in determining the fair value of the ION assets.

     The fair value of property, plant, equipment and seismic rental equipment recognized on formation of INOVA includes fair value step-ups of $10.1 million resulting from $6.0 million increases to the carrying value of seismic rental equipment to reflect market values attributed to sales of comparable used land seismic equipment and $4.1 million relating to other property, plant and equipment to reflect the cost to replace equipment of similar composition and utility.

     The fair value of the secured equipment financing recognized on formation of INOVA includes a fair value step-up of $1.5 million resulting from the use of an estimated market interest rate of 11% compared to the 15% under the ICON loan agreement. Refer to Note 9 “— Long-Term Debt” for further discussion.

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(3) Accounts and Notes Receivable

     A summary of accounts receivable as at December 31, 2010 is as follows (in thousands):

Accounts receivable, principally trade	$	16,769
Less allowance for doubtful accounts		(592	)
Accounts receivable, net	$	16,177

     The activity in the allowance for doubtful accounts for the period from March 26, 2010 to December 31, 2010 is as follows (in thousands):

Balance at March 25, 2010	$	—
Additions charged to bad debt expense		(629	)
Write-offs charged against the allowance		37
Balance at December 31, 2010	$	(592	)

     As at December 31, 2010, the allowance for doubtful notes receivable is $NIL.

(4) Inventories

     A summary of inventories as at December 31, 2010 is as follows (in thousands):

Raw materials and subassemblies	$	48,402
Work-in-process		4,422
Finished goods		41,825
Reserve for excess and obsolete inventories		(20,162	)
Total	$	74,487

     The Company provides for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and its estimated market value based upon assumptions about future demand for the Company’s products and market conditions. Cost of sales for the period from March 26, 2010 to December 31, 2010 includes inventory obsolescence and excess inventory charges of approximately $20.2 million relating primarily to technological developments occurring subsequent to the formation of INOVA which resulted in the write-off of certain excess raw materials and subassemblies.

(5) Property, Plant, Equipment and Seismic Rental Equipment

     A summary of property, plant, equipment and seismic rental equipment as at December 31, 2010 is as follows (in thousands):

Land	$	25
Buildings		1,110
Machinery and equipment		12,751
Seismic rental equipment		63,563
Furniture and fixtures		981
Other		376
Total		78,807
Less accumulated depreciation		(17,641	)
Property, plant, equipment and seismic rental equipment, net	$	61,166

     Total depreciation expense for the period from March 26, 2010 to December 31, 2010 was $18.4 million.

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(6) Goodwill

     On September 30, 2010, the Company completed its annual test of the carrying value of goodwill in the Canada and U.S.A. reporting units and noted no impairments. The annual impairment test for 2010 indicated that the fair value of these two reporting units exceeded their carrying values. However, if the estimates or related projections associated with the reporting units significantly change in the future, the Company may be required to record impairment charges. An interim impairment test at December 31, 2010 was not required.

     The following is a summary of the changes in the carrying amount of goodwill for the period from March 26, 2010 to December 31, 2010 (in thousands):

	Canada		U.S.A.		Total
Balance at March 25, 2010	$	—	$	—	$	—
Goodwill acquired during the year		1,863		23,239		25,102
Impact of foreign currency translation adjustments		46		—		46
Balance at December 31, 2010	$	1,909	$	23,239	$	25,148

(7) Intangible Assets

     A summary of intangible assets, net, as at December 31, 2010 is as follows (in thousands):

	Weighted
	Average
	Amortization		Gross		Accumulated
	Period		Amount		Amortization			Net
Trademarks		13	$	15,802	$	(890	)	$	14,912
Patents		12		21,530		(1,342	)		20,188
Total		13	$	37,332	$	(2,232	)	$	35,100

     Total amortization expense for intangible assets for the period from March 26, 2010 to December 31, 2010 was $2.2 million. A summary of the estimated amortization expense for the next five years is as follows (in thousands):

Years Ended December 31,
2011	$	2,956
2012	$	2,956
2013	$	2,956
2014	$	2,956
2015	$	2,881

(8) Accrued Expenses

     A summary of accrued expenses as at December 31, 2010 is as follows (in thousands):

Compensation, including compensation-related taxes and commissions	$	3,480
Accrued taxes (primarily income taxes)		6,118
Product warranty		2,497
Other		1,326
Total accrued expenses	$	13,421

     The Company generally warrants that all manufactured equipment will be free from defects in workmanship, materials, and parts. Warranty periods generally range from six months to two years from the date of original purchase, depending on the product. The Company provides for estimated warranty as a charge to cost of sales at time of sale, which is when estimated future expenditures associated with such contingencies become probable and reasonably estimable. However, new information may become available, or circumstances (such as applicable laws and regulations) may change, thereby resulting in an increase or decrease in the amount required to be accrued for such matters (and therefore a decrease or increase in reported net income in the period of such change). A summary of warranty activity for the period from March 26, 2010 to December 31, 2010 is as follows (in thousands):

Balance at March 25, 2010	$	—
Warranty obligations acquired during the period		2,573
Accruals (expirations) for warranties issued/expired during the period		116
Settlements made (in cash or in kind) during the period		(192	)
Balance at December 31, 2010	$	2,497

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(9) Long-term Debt

     A summary of long-term debt as at December 31, 2010 is as follows (in thousands)

$40.0 million related party revolving credit facility	$	10,000
Secured equipment financing		16,047
Unamortized non-cash debt premium		1,136
Total		27,183
Current portion of long-term debt		(4,019	)
Non-current portion of long-term debt	$	23,164

     Revolving Credit Facility

     On August 6, 2010, INOVA’s Luxembourg subsidiary, INOVA Exploration Holdings S.à r.l. (“INOVA Sàrl”) entered into the credit facility (the “Credit Facility”) with CNPC Finance (HK) Limited (“CNPC Finance”). The terms of the Credit Facility are set forth in a credit agreement dated as of August 6, 2010 (the “Credit Agreement”), between INOVA Sàrl and CNPC Finance. The obligations of INOVA under the Credit Facility are guaranteed by BGP. CNPC Finance is a wholly owned subsidiary of BGP’s parent company, China National Petroleum Corporation (“CNPC”). In return for this guarantee, the Company is obligated to pay BGP fees at a rate of 1.4% per annum of the outstanding Credit Facility payable semi-annually on June 21^st and December 21^st of each year.

     Under the Credit Facility, up to $40.0 million is available for revolving line of credit borrowings to fund the working capital needs of INOVA and its subsidiaries for a duration of thirty-six months from the first draw down date. The first draw down under the Credit Facility occurred on August 9, 2010, and as such, the Credit Facility matures on August 9, 2013. Interest on the Credit Facility is calculated based on the London Interbank Offered Rate (“LIBOR”) plus 160 basis points and is payable semi-annually on June 21^st and December 21^st of each year. As at December 31, 2010, INOVA had $10.0 million indebtedness outstanding under the revolving line of credit. The effective interest rate, including fees paid to BGP as discussed above, was 3.6% as at December 31, 2010. Total interest expense recognized during the period from March 26, 2010 to December 31, 2010 relating to the Credit Facility amounted to $0.2 million all of which was paid prior to December 31, 2010.

     The Credit Agreement contains customary events of default provisions which result in penalties of 30% to 50% additional interest calculated based on LIBOR plus 160 basis points in the event of failure to make interest or principal payments or use of the credit facility for purposes other than funding working capital requirements.

     Secured Equipment Financing

     In conjunction with the acquisition of the ION Assets on March 25, 2010, the Company assumed from ION the outstanding principal balance ($18.4 million) of a secured equipment financing. The terms of this secured equipment financing are outlined in two master loan agreements (collectively, the “ICON Loan Agreements”) dated as of June 29, 2009 originally entered into with ICON ION LLC (“ICON”), ION and two wholly owned subsidiaries of INOVA: (i) ARAM Rentals Corporation, a Nova Scotia unlimited company (“ARC”), and (ii) ARAM Seismic Rentals, Inc., a Texas corporation (“ASRI”). All indebtedness under the ICON Loan Agreements is scheduled to mature on July 31, 2014.

     The indebtedness under the ICON Loan Agreements is secured by first-priority liens in (a) certain seismic rental equipment owned by ARC or ASRI located in the United States and Canada (subject to certain exceptions), and certain additional and replacement seismic equipment owned by such subsidiaries from time to time, (b) written leases or other agreements evidencing payment obligations relating to the leasing by ARC or ASRI of this equipment to their respective customers, including their related receivables, (c) the cash or cash equivalents held by such subsidiaries and (d) any proceeds thereof.

     Under both ICON Loan Agreements, interest on the outstanding principal amount accrues at a fixed interest rate of 15% per annum calculated monthly, and is payable monthly on the first day of each month. Principal and interest are payable, commencing on September 1, 2009, in 60 monthly installments until the maturity date, when all remaining outstanding principal and interest will be due and payable. Pursuant to the ICON Loan Agreements, ICON will receive an administrative fee equal to 0.5% of the aggregate principal amount of advances under the ICON Loan Agreements, payable at the end of each of the first four years during their terms.

     Beginning on August 1, 2012, and continuing until January 31, 2014, the outstanding principal balances of the loans may be prepaid in full by giving ICON 30 days’ prior written notice and paying a prepayment fee equal to 3.0% of the then-outstanding principal amount of the loans. Commencing on February 1, 2014, the loans may be prepaid in full by giving ICON 30 days’ prior written notice and without any prepayment penalty or fee.

     The repayment obligations of each of ARC and ASRI under the ICON Loan Agreements were guaranteed by ION under a Guarantee dated as of June 29, 2009 (the “Guarantee”). ION remains liable on its Guarantee, however, certain INOVA subsidiaries

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have entered into back-up guarantees in favor of ION from the Company with respect to any defaults on this transferred indebtedness for which ION is called upon to remedy.

     In conjunction with the formation of INOVA, the Company recorded a $1.5 million premium on the ICON indebtedness. This premium reflects a fair value adjustment resulting from an estimated interest rate of 11% for a debt instrument having the same or similar characteristics as the ICON indebtedness as of March 25, 2010.

     Capital Lease Obligations

     In connection with the acquisition of the ION Assets on March 25, 2010, the Company assumed from ION the outstanding principal balance ($2.4 million) of certain capital lease obligations. All indebtedness under these obligations was repaid in full prior to December 31, 2010.

(10) Guarantee of ION Credit Facility

     In conjunction with the formation of INOVA, BGP and ION had originally contemplated that INOVA would be an additional guarantor or provider of credit support under ION’s Credit Agreement (the “ION Credit Agreement”), dated March 25, 2010, with China Merchant Bank, New York (“CMB”). However, due to the time required to obtain necessary Chinese governmental approvals for such credit support from INOVA, ION’s Credit Agreement instead provided that BGP enter into an agreement to guarantee the indebtedness under ION’s Credit Facility, which INOVA’s guarantee would replace when the applicable governmental approvals were obtained. In June 2010, the applicable governmental approvals were obtained and BGP was then released from its guarantee obligations, and these obligations were assumed by INOVA as originally contemplated under ION’s Credit Agreement. In addition, ION’s credit support agreement with BGP was terminated. INOVA’s guarantee of ION’s credit facility is in the form of a $215 million standby letter of credit with CMB. A liability of $1.0 million is reflected on the balance sheet as at December 31, 2010 in respect of this guarantee.

     The ION Credit Agreement provides ION with a revolving line of credit of up to $100 million in borrowings (including borrowings for letters of credit) and a term loan of $106.3 million. As of December 31, 2010, ION had no indebtedness outstanding under the revolving line of credit and $103.3 million indebtedness under the term loan.

     ION’s credit indebtedness and term loan indebtedness under the ION Credit Agreement are each scheduled to mature on March 24, 2015. The $106.3 million original principal amount under the term loan is subject to scheduled quarterly amortization payments, commencing on June 30, 2010, of $1.0 million per quarter until the maturity date, with the remaining unpaid principal amount of the term loan due upon the maturity date. The indebtedness under the Credit Facility may mature sooner on a date that is 18 months after the earlier of (i) any dissolution of INOVA, or (ii) the administrative agent determining in good faith that INOVA is unable to perform its obligations under its guarantee.

     The ION Credit Agreement requires compliance with certain financial covenants, including requirements commencing on June 30, 2011 and for each fiscal quarter thereafter for ION and its U.S. subsidiaries to:

• Maintain a minimum fixed charge coverage ratio in an amount equal to at least 1.125 to 1;

• Not exceed a maximum leverage ratio of 3.25 to 1; and

• Maintain a minimum tangible net worth of at least 60% of ION’s tangible net worth as of March 31, 2010, as defined.

     ION’s fixed charge coverage ratio is defined as the ratio of (i) ION’s consolidated EBITDA less cash income tax expense and non-financed capital expenditures, to (ii) the sum of scheduled payments of lease payments and payments of principal indebtedness, interest expense actually paid and cash dividends, in each case for the four consecutive fiscal quarters most recently ended. ION’s leverage ratio is defined as the ratio of total funded consolidated debt, capital lease obligations and issued letters of credit (net of cash collateral) to consolidated EBITDA of ION for the four consecutive fiscal quarters most recently ended. These financial covenants become effective on June 30, 2011.

     The ION Credit Agreement contains customary event of default provisions (including a “change of control” event affecting ION), the occurrence of which could lead to an acceleration of ION’s obligations under the ION Credit Agreement. The ION Credit

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Agreement also provides that certain acts of bankruptcy, insolvency or liquidation of INOVA would constitute additional events of default under the ION Credit Facility.

(11) Income Taxes

     The sources of loss before income taxes for the period from March 26, 2010 to December 31, 2010 are as follows (in thousands):

Domestic (China)	$	(4,883	)
Foreign		(44,755	)
Total	$	(49,638	)

     Income tax expense for the period from March 26, 2010 to December 31, 2010 of $1.5 million is comprised of $1.6 million taxes payable in Canada less $0.1 million of net income tax recoveries from various jurisdictions. A reconciliation of the expected income tax expense on loss before income taxes using the statutory China income tax rate of 25% to income tax expense for the period from March 26, 2010 to December 31, 2010 is as follows (in thousands):

Expected income tax benefit at 25%	$	(12,410	)
Foreign taxes (tax rate differential and foreign tax differences)		(6,127	)
Nondeductible expenses and other		(225	)
Deferred tax asset valuation allowance:
Deferred tax asset valuation allowance on operations		20,231
Total income tax expense	$	1,469

     The tax effects of the cumulative temporary differences are as follows (in thousands):

Current deferred:
Deferred income tax assets:
Accrued expenses	$	929
Allowance accounts		278
Inventory		7,445
Total current deferred income tax asset		8,652
Valuation allowance		(8,652	)
Net current deferred income tax asset	$	—
Non-current deferred:
Deferred income tax assets:
Net operating loss carry-forward	$	36,117
Basis in research and development		23,167
Tax credit carry-forwards and other		794
Total non-current deferred income tax asset		60,078
Valuation allowance		(52,064	)
Net non-current deferred income tax asset		8,014
Deferred income tax liabilities:
Basis in identified intangibles		(2,515	)
Basis in property, plant, equipment and seismic rental equipment		(5,499	)
Net non-current deferred income tax asset	$	—

     The Company has established a valuation allowance for all of its net deferred tax assets. The valuation allowance was calculated in accordance with the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires that a valuation allowance be established or maintained when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. The Company will continue to reserve for net deferred tax assets of $60.7 million until there is sufficient evidence to warrant reversal. At December 31, 2010, the Company had net operating loss carry-forwards of approximately $122 million, the majority of which expire beyond 2027.

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     As of December 31, 2010, the Company has no significant unrecognized tax benefits and does not expect to recognize any significant increases in unrecognized tax benefits during the next twelve month period. Interest and penalties, if any, related to unrecognized tax benefits are recorded in income tax expense.

     The Company’s tax returns in various jurisdictions for 2007 and subsequent years remain subject to examination by tax authorities.

     Income taxes have not been provided on the cumulative undistributed earnings of the Company’s foreign subsidiaries in the amount of approximately $0.4 million as it is the Company’s intention to reinvest such earnings indefinitely. These foreign earnings could become subject to additional tax if remitted, or deemed remitted as a dividend; however, it is not practicable to estimate the additional amount of taxes payable.

(12) Operating Leases

     The Company leases certain offices and warehouse space under non-cancelable operating leases. Rental expense was $2.0 million for the period from March 26, 2010 to December 31, 2010. A summary of future rental commitments over the next five years under non-cancelable operating leases is as follows (in thousands):

Years Ended December 31,
2011	$	3,183
2012		1,868
2013		1,510
2014		1,266
2015		1,270
Total	$	9,097

(13) Benefit Plans

     The Company has a 401(k) retirement savings plan, which covers certain employees of its US businesses. Employees may voluntarily contribute up to 60% of their compensation, as defined, to the plan. Effective March 26, 2010, the Company adopted a company matching contribution to the 401(k) plan. The Company matched the employee contribution at a rate of 50% of the first 6% of compensation contributed to the plan. Company contributions to the plan were $0.2 million during the period from March 26, 2010 to December 31, 2010.

(14) Legal Matters

     The Company has been named in certain lawsuits or threatened actions that are incidental to its ordinary business. Litigation is inherently unpredictable. Any claims against the Company, whether meritorious or not, could be time-consuming, cause the Company to incur costs and expenses, require significant amounts of management time and result in the diversion of significant operational resources. The results of these lawsuits and actions cannot be predicted with certainty. The Company currently believes that the ultimate resolution of these matters will not have a material adverse impact on the financial condition, results of operations or liquidity of the Company.

(15) Certain Relationships and Related Party Transactions

     The Company has entered into support and transition agreements with ION to receive certain administrative services including tax, legal, information technology, treasury, human resources, bookkeeping, facilities and marketing services. The terms of these arrangements provide for the Company to pay approximately $0.3 million per month (beginning in April 2010) for services and to reimburse third-party and lease costs incurred by ION directly related to the administrative support of the Company. The terms of these agreements are for two years and will automatically renew for one-year periods, unless either party provides notice of its intent to terminate the agreement. During the period from March 26, 2010 to December 31, 2010 the Company recorded $2.5 million relating to these administrative services provided by ION and approximately $3.0 million for third party cost reimbursements to ION. At December 31, 2010, the Company owed approximately $1.1 million to ION under these support and transition agreements and has reflected this liability in accounts payable to related parties on the consolidated balance sheet.

     The Company receives certain administrative services including information technology, accounting and administration services from BGP. These services are provided at no cost to INOVA. The Company has estimated the value of these services to be $0.5 million

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for the period from March 26, 2010 to December 31, 2010 and has reflected this charge as an increase in BGP contributed owners’ equity.

     In April 2010, BGP advanced $5.0 million to the Company for its short-term capital purposes under a short-term promissory note. The note was scheduled to mature on July 31, 2010 and accrued interest at an annual rate equal to the London Interbank Offered Rate (“LIBOR”) plus 350 basis points. The Company repaid the outstanding balance on this note of $5.0 million in July 2010.

     In April 2010, ION advanced $5.0 million to the Company for its short-term capital purposes under a short-term promissory note. The note was scheduled to mature on August 31, 2010 and accrued interest at an annual rate equal to the London Interbank Offered Rate (“LIBOR”) plus 350 basis points. The Company repaid the outstanding balance on this note of $5.0 million in July 2010.

     In May 2010, the Company entered into a second promissory note arrangement with ION providing for potential borrowings up to $4.5 million, under which the Company borrowed $1.5 million. This note matured on July 30, 2010 and accrued interest at an annual rate equal to LIBOR plus 350 basis points. The Company repaid the outstanding balance on this note of $1.5 million in July 2010. The purpose of these advances was to provide the Company with short-term capital prior to obtaining a line of credit, which the Company obtained in August 2010.

     In conjunction with the formation of INOVA, ION contributed to INOVA cash of $1.5 million which is to be used to purchase the shares of a Russian legal entity containing certain land seismic assets with ascribed value $1.5 million as at March 25, 2010 under the Share Purchase Agreement. INOVA is obligated to purchase the shares of this Russian entity from ION for cash consideration of $1.5 million upon completion of certain corporate restructuring steps. A liability in this amount is included in accounts payable to related parties on the consolidated balance sheet.

     During the period from March 26, 2010 to December 31, 2010, INOVA purchased certain materials and services from BGP and reimbursed BGP for certain costs incurred on behalf of INOVA. These purchases, services and cost reimbursements amounted to $1.8 million and have been recorded at their respective exchange amounts. Accounts payable to related parties includes $1.6 million owing to BGP for these purchases and reimbursements.

     During the period from March 26, 2010 to December 31, 2010 INOVA purchased certain land seismic equipment from ION for resale to INOVA’s customers. These purchases amounted to approximately $1.6 million and have been recorded at the exchange amount. Accounts payable to related parties includes $0.4 million owing to ION for these purchases as at December 31, 2010.

     During the period from March 26, 2010 to December 31, 2010, the Company recorded revenues from wholly owned subsidiaries of BGP and ION of $21.5 million and $1.4 million, respectively. Accounts receivable from related parties of $16.5 million represents the amount owing from BGP and ION for these revenues as at December 31, 2010.

     In conjunction with the formation of INOVA, the company is obligated to pay construction costs for certain office and manufacturing facilities in China not to exceed $5.8 million.

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