On July 8, 2009, the Company received a complaint filed in the United States District Court in Nevada (the “Court”) alleging that the Geospace Seismic Recorder (“GSR”), the Company’s newly developed wireless data acquisition system, infringes upon a patent held by Ascend Geo, LLC (“Ascend”). In addition to monetary damages, Ascend is requesting a preliminary injunction against future sales by the Company of the GSR system. The Company filed its response with the Court requesting that it deny Ascend’s request for a preliminary injunction. The Company strongly believes that the GSR system does not violate Ascend’s patent. The Company also believes that Ascend’s patent is not valid and intends to strongly contest its validity. The Company intends to vigorously defend itself in this matter; however, it is unable at this time to predict the outcome and effects of this claim.