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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q 

(Mark One)

 

☒

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

 

For the quarterly period ended October 31, 2024

 

or

 

☐

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

 

For the transition period from                          to                            

 

Commission File Number: 001-13490 

 

 

MIND TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

76-0210849

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2002 Timberloch Place

Suite 550

The Woodlands, Texas 77380

(Address of principal executive offices, including Zip Code)

(281) 353-4475

(Registrant’s telephone number, including area code) 

 

 

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

  

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock - $0.01 par value per share

MIND

The NASDAQ Stock Market LLC

 

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  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).       Yes  ☒    No  ☐

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

Large accelerated filer

☐

Accelerated filer

☐

    

Non-accelerated filer

☒

Smaller reporting company

☒

    

Emerging growth company

☐

  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 7,969,421 shares of common stock, $0.01 par value, were outstanding as of December 11, 2024.

 

 

 
Table of Contents

 

 

MIND TECHNOLOGY, INC.

Table of Contents

 

 

PART I. FINANCIAL INFORMATION
     

Item 1.

Financial Statements (Unaudited)

  
 

Condensed Consolidated Balance Sheets as of October 31, 2024 and January 31, 2024

1
 

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended October 31, 2024 and 2023

2
 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended October 31, 2024 and 2023

3
 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 31, 2024 and 2023

4
 

Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended October 31, 2024 and 2023

5
 

Notes to Condensed Consolidated Financial Statements

7
 

Cautionary Statement about Forward-Looking Statements

15
     

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16
     

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

21
     

Item 4.

Controls and Procedures

22
 

PART II. OTHER INFORMATION
     

Item 1.

Legal Proceedings

22
     

Item 1A.

Risk Factors

22
     

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

22
     

Item 3.

Defaults Upon Senior Securities

22
     

Item 4.

Mine Safety Disclosures

22
     

Item 5.

Other Information

22
     

Item 6.

Exhibits

23
     
 

Exhibit Index

23
     
 

Signatures

24

 

ii
Table of Contents

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

 

  

October 31, 2024

  

January 31, 2024

 

ASSETS

 

Current assets:

        

Cash and cash equivalents

 $3,505  $5,289 

Accounts receivable, net of allowance for credit losses of $332 at each of October 31, 2024 and January 31, 2024

  9,471   6,566 

Inventories, net

  17,249   13,371 

Prepaid expenses and other current assets

  1,039   3,113 

Total current assets

  31,264   28,339 

Property and equipment, net

  775   818 

Operating lease right-of-use assets

  1,526   1,324 

Intangible assets, net

  2,420   2,888 

Deferred tax asset

  122   122 

Total assets

 $36,107  $33,491 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Current liabilities:

        

Accounts payable

 $2,179  $1,623 

Deferred revenue

  248   203 

Customer deposits

  3,112   3,446 

Accrued expenses and other current liabilities

  1,742   2,140 

Income taxes payable

  2,093   2,114 

Operating lease liabilities - current

  660   751 

Total current liabilities

  10,034   10,277 

Operating lease liabilities - non-current

  866   573 

Total liabilities

  10,900   10,850 

Stockholders’ equity:

        

Preferred stock, $1.00 par value; 2,000 shares authorized; no shares issued and outstanding at October 31, 2024 and 1,683 shares issued and outstanding at January 31, 2024

  —   37,779 

Common stock, $0.01 par value; 40,000 shares authorized; 7,969 shares issued and outstanding at October 31, 2024 and 1,406 shares issued and outstanding at January 31, 2024

  80   14 

Additional paid-in capital

  135,572   113,121 

Accumulated deficit

  (110,479)  (128,307)

Accumulated other comprehensive gain

  34   34 

Total stockholders’ equity

  25,207   22,641 

Total liabilities and stockholders’ equity

 $36,107  $33,491 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

1
Table of Contents
 

 

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

   

For the Three Months Ended October 31,

    

For the Nine Months Ended October 31,

  
   

2024

    

2023

    

2024

    

2023

  

Revenues:

                                

Sales of marine technology products

   $ 12,105     $ 4,974       31,819       23,132  

Cost of sales:

                                

Sales of marine technology products

     6,684       2,721       17,402       13,402  

Gross profit

     5,421       2,253       14,417       9,730  

Operating expenses:

                                

Selling, general and administrative

     2,762       2,941       8,305       9,160  

Research and development

     562       508       1,352       1,479  

Depreciation and amortization

     221       257       724       892  

Total operating expenses

     3,545       3,706       10,381       11,531  

Operating income (loss)

     1,876       (1,453 )     4,036       (1,801 )

Other income (expense):

                                

Interest expense

     —       (169 )     —       (536 )

Other, net

     (189 )     25       320       336  

Total other income (expense)

     (189 )     (144 )     320       (200 )

Income (loss) from continuing operations before income taxes

     1,687       (1,597 )     4,356       (2,001 )

Provision for income taxes

     (396 )     (112 )     (1,313 )     (590 )

Net income (loss) from continuing operations

     1,291       (1,709 )     3,043       (2,591 )

Income from discontinued operations, net of income taxes

     —       2,277       —       1,424  

Net income (loss)

   $ 1,291     $ 568     $ 3,043     $ (1,167 )

Preferred stock dividends - declared

     —       (947 )     —       (947 )

Preferred stock dividends - undeclared

     (368 )     —       (2,262 )     (1,894 )

Effect of preferred stock conversion

     14,785       —       14,785       —  

Net Income (loss) attributable to common stockholders

   $ 15,708     $ (379 )   $ 15,566     $ (4,008 )

Net Income (loss) per common share - Basic and Diluted

                                

Continuing operations

   $ 2.87     $ (1.89 )   $ 5.62     $ (3.86 )

Discontinued operations

   $ —     $ 1.62     $ —     $ 1.01  

Net income (loss)

   $ 2.87     $ (0.27 )   $ 5.62     $ (2.85 )

Shares used in computing net income (loss) per common share:

                                

Basic and diluted

     5,473       1,406       2,772       1,406  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

2
Table of Contents
 

 

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

 

   

For the Three Months Ended October 31,

    

For the Nine Months Ended October 31,

  
   

2024

    

2023

    

2024

    

2023

  

Net income (loss)

   $ 1,291     $ 568     $ 3,043     $ (1,167 )

Comprehensive income (loss)

   $ 1,291     $ 568       3,043       (1,167 )

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3
Table of Contents
 

 

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

   

For the Nine Months Ended October 31,

  
   

2024

    

2023

  

Cash flows from operating activities:

                

Net income (loss)

   $ 3,043     $ (1,167 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

                

Depreciation and amortization

     724       1,230  

Stock-based compensation

     141       264  

Gain on sale of Klein

     —       (2,393 )

Provision for inventory obsolescence

     67       23  

Gross profit from sale of other equipment

     (457 )     (385 )

Changes in:

                

Accounts receivable

     (3,006 )     (688 )

Unbilled revenue

     164       51  

Inventories

     (3,944 )     (3,174 )

Prepaid expenses and other current and long-term assets

     2,076       566  

Income taxes receivable and payable

     (24 )     (21 )

Accounts payable, accrued expenses and other current liabilities

     98       (1,045 )

Deferred revenue and customer deposits

     (289 )     1,115  

Net cash used in operating activities

     (1,407 )     (5,624 )

Cash flows from investing activities:

                

Purchases of property and equipment

     (213 )     (199 )

Proceeds from the sale of Klein, net

     —       10,832  

Sale of other equipment

     457       385  

Net cash provided by investing activities

     244       11,018  

Cash flows from financing activities:

                

Preferred stock conversion transaction costs

     (619 )     —  

Net proceeds from short-term loan

     —       2,947  

Payment on short-term loan

     —       (3,750 )

Refund of prepaid interest on short-term loan

     —       214  

Net cash used in financing activities

     (619 )     (589 )

Effect of changes in foreign exchange rates on cash and cash equivalents

     (2 )     (14 )

Net change in cash and cash equivalents

     (1,784 )     4,791  

Cash and cash equivalents, beginning of period

     5,289       778  

Cash and cash equivalents, end of period

   $ 3,505     $ 5,569  

Supplemental cash flow information:

                

Interest paid

   $ —     $ 576  

Income taxes paid

   $ 1,411     $ 617  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

 

   

Common Stock

    

Preferred Stock

                            

Accumulated

          
                                    Additional                     Other          
                                   

Paid-In

    

Treasury

    

Accumulated

    

Comprehensive

          
   

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Stock

    

Deficit

    

Gain

    

Total

  

Balances, January 31, 2024

     1,406     $ 14       1,683     $ 37,779     $ 113,121     $ —     $ (128,307 )   $ 34     $ 22,641  

Net income

     —       —       —       —       —       —       954       —       954  

Stock-based compensation

     —       —       —       —       48       —       —       —       48  

Balances, April 30, 2024

     1,406     $ 14       1,683     $ 37,779     $ 113,169     $ —     $ (127,353 )   $ 34     $ 23,643  

Net income

     —       —       —       —       —       —       798       —       798  

Stock-based compensation

     —       —       —       —       46       —       —       —       46  

Balances, July 31, 2024

     1,406     $ 14       1,683     $ 37,779     $ 113,215     $ —     $ (126,555 )   $ 34     $ 24,487  

Net income

     —       —       —       —       —       —       1,291       —       1,291  

Preferred stock conversion

     6,563       66       (1,683 )     (37,779 )     22,310       —       14,785       —       (618 )

Stock-based compensation

     —       —       —       —       47       —       —       —       47  

Balances, October 31, 2024

     7,969     $ 80       —     $ —     $ 135,572     $ —     $ (110,479 )   $ 34     $ 25,207  

 

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MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

 

   

Common Stock

    

Preferred Stock

                            

Accumulated

          
   

As adjusted

    

See Note 14

                    

Additional

                    

Other

          
                                   

Paid-In

    

Treasury

    

Accumulated

    

Comprehensive

          
   

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Stock

    

Deficit

    

Gain

    

Total

  

Balances, January 31, 2023

     1,599     $ 16     $ 1,683     $ 37,779     $ 129,721     $ (16,863 )   $ (127,635 )   $ 34     $ 23,052  

Net loss

     —       —       —       —       —       —       (240 )     —       (240 )

Stock-based compensation

     —       —       —       —       50       —       —       —       50  

Balances, April 30, 2023

     1,599     $ 16     $ 1,683     $ 37,779     $ 129,771     $ (16,863 )   $ (127,875 )   $ 34     $ 22,862  

Net loss

     —       —       —       —       —       —       (1,494 )     —       (1,494 )

Stock-based compensation

     —       —       —       —       108       —       —       —       108  

Balances, July 31, 2023

     1,600     $ 16       1,683     $ 37,779     $ 129,879     $ (16,863 )   $ (129,369 )   $ 34     $ 21,476  

Net income

     —       —       —       —       —       —       568       —       568  

Retirement of treasury stock

     (193 )     (2 )     —       —       (16,861 )     16,863                       —  

Preferred stock dividends

     —       —       —       —       —       —       (947 )     —       (947 )

Stock-based compensation

     —       —       —       —       106       —       —       —       106  

Balances, October 31, 2023

     1,407     $ 14       1,683     $ 37,779     $ 113,124     $ —     $ (129,748 )   $ 34     $ 21,203  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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MIND TECHNOLOGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

 

 

1. Organization, Liquidity and Summary of Significant Accounting Policies

 

Organization—MIND Technology, Inc., a Delaware corporation (the “Company”), was incorporated in 1987. The Company, through its wholly owned subsidiaries, Seamap Pte Ltd, MIND Maritime Acoustics, LLC, Seamap (Malaysia) Sdn Bhd and Seamap (UK) Ltd, collectively “Seamap”, designs, manufactures and sells a broad range of proprietary products for the seismic, hydrographic and offshore industries with product sales and support facilities based in Singapore, Malaysia, the United Kingdom and the state of Texas. Prior to August 21, 2023, the Company, through its wholly owned subsidiary Klein Marine Systems, Inc. (“Klein”), designed, manufactured and sold a broad range of proprietary products for the seismic, hydrographic and offshore industries from its facility in the state of New Hampshire. Effective August 21, 2023, the Company sold Klein and retrospectively presented its prior period financial results as discontinued operations (see Note 2 – “Sale of a Subsidiary” for additional details).

 

Liquidity—As of October 31, 2024, the Company had working capital of approximately $21.2 million, including cash and cash equivalents of approximately $3.5 million, compared to working capital of approximately $18.1 million, including cash and cash equivalents of approximately $5.3 million as of January 31, 2024. The Company does not have a credit facility in place and depends on cash on hand and cash flows from operations to satisfy its liquidity needs.  However, the Company believes it will have adequate liquidity to meet its future operating requirements through a combination of cash on hand, cash expected to be generated from operations, disciplined working capital management, potential financing secured by company-owned real property, and potentially securing a credit facility or some other form of financing.

 

Summary of Significant Accounting Policies—We describe our significant accounting policies in Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024. During the nine months ended October 31, 2024, there were no changes to those accounting policies.

 

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2. Sale of Subsidiary

 

On August 21, 2023, the Company sold Klein pursuant to a Stock Purchase Agreement (the “SPA”) with General Oceans AS (the "Buyer"). In connection with the SPA, the Company granted the Buyer a license to its Spectral Ai software suite (“Spectral Ai”). The license is exclusive to the Buyer as it relates to side scan sonar. The Company and the Buyer also entered into a collaboration agreement for the further development of Spectral Ai and potentially other software projects. The foregoing transactions contemplated by the SPA are referred to as the “Sale of Klein”. The aggregate consideration to the Company consisted of a cash payment of $11.5 million, resulting in a gain of approximately $2.3 million. The SPA contained customary representations and warranties.

 

On August 22, 2023, following the closing of the Sale of Klein, all outstanding amounts due and owed, including principal, interest, and other charges, under the Loan (as defined below) were repaid in full and the Loan was terminated, and all liens and security interests granted thereunder were released and terminated (see Note 10 -"Notes Payable" for additional details).

 
 

3. Basis of Presentation

 

The condensed consolidated balance sheet as of January 31, 2024, for the Company has been derived from audited consolidated financial statements. The unaudited interim condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2024 (“fiscal 2024”). In the opinion of the Company’s management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position as of October 31, 2024, the results of operations for the three and nine months ended October 31, 2024 and 2023, the cash flows for the nine months ended October 31, 2024 and 2023, and the statement of stockholders’ equity for the three and nine months ended October 31, 2024 and 2023, have been included in these condensed consolidated financial statements. The foregoing interim results are not necessarily indicative of the results of operations to be expected for the full fiscal year ending January 31, 2025 (“fiscal 2025”).

 

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4. Discontinued Operations

 

On August 21, 2023, the Company sold Klein pursuant to the SPA with the Buyer. As a result, its results of operations are reported as discontinued operations for the three and nine-month period ended October 31, 2023.

 

The results of operations from discontinued operations for the three and nine months ended October 31, 2024 and 2023 consist of the following:

 

  

For the Three Months Ended October 31,

  

For the Nine Months Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 

Revenues:

 

(in thousands)

         

Revenue from discontinued operations

 $—  $140  $—  $3,318 

Cost of sales:

                

Cost of discontinued operations

  —   11   —   1,982 

Operating expenses:

                

Selling, general and administrative

  —   179   —   1,348 

Research and development

  —   45   —   689 

Depreciation and amortization

  —   18   —   324 

Total operating expenses

  —   242   —   2,361 

Operating loss

  —   (113)  —   (1,025)

Other income

  —   2      73 

Gain on sale of Klein

  —   2,393   —   2,393 

Income before income taxes from discontinued operations

  —   2,282   —   1,441 

Provision for income taxes from discontinued operations

  —   (5)  —   (17)

Net Income from discontinued operations

  —   2,277   —   1,424 

 

The significant operating and investing noncash items and capital expenditures related to discontinued operations are summarized below:

 

  

For the Nine Months Ended October 31,

 
  

2024

  

2023

 
  (in thousands) 

Depreciation and amortization

 $—  $324 

Gain on sale of Klein

 $—  $2,393 

 
 

5. New Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), to enhance the disclosures public entities provide regarding significant segment expenses so that investors can better understand an entity’s overall performance and assess potential future cash flows. ASU 2023-07 is effective for our annual periods beginning February 1, 2024 and interim periods within fiscal years beginning February 1, 2025. The Company is evaluating the new guidance to determine the impact it will have on the disclosures to its consolidated financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 seeks to improve transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures. The updated guidance is effective for the Company on February 1, 2025. The Company is currently evaluating the new guidance to determine the impact it will have on the disclosures to its consolidated financial statements.

 

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03"), to enhance the disclosures public entities provide regarding specified information about certain costs and expenses at each interim and annual reporting period so that investors can better understand an entity’s overall performance, including its cost structure, and assess potential future cash flows. ASU 2024-03 is effective for our annual periods beginning February 1, 2027 and interim periods within fiscal years beginning February 1, 2028. The Company is evaluating the new guidance to determine the impact it will have on the disclosures to its consolidated financial statements.

 

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6. Revenue from Contracts with Customers

 

The following table presents revenue from contracts with customers disaggregated by timing of revenue recognition:

 

  

Three Months Ended October 31,

  

Nine Months Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 

Revenue recognized at a point in time:

 

(in thousands)

 

Total revenue recognized at a point in time

 $11,405  $4,263  $30,443  $21,966 

Revenue recognized over time:

                

Total revenue recognized over time

  700   711   1,376   1,166 

Total revenue from contracts with customers

 $12,105  $4,974  $31,819  $23,132 

 

The revenue from products manufactured and sold by our Seamap business is generally recognized at a point in time, or when the customer takes possession of the product, based on the terms and conditions stipulated in our contracts with customers. However, from time to time our Seamap business provides repair and maintenance services, or performs upgrades, on customer owned equipment in which case revenue is recognized over time. In addition, our Seamap business provides annual Software Maintenance Agreements (“SMA”) to customers who have an active license for software embedded in Seamap products. The revenue from the SMAs is recognized over time, with the total value of the SMAs recognized in equal monthly amounts over the life of the contract.

 

The following table presents revenue from contracts with customers disaggregated by geography, based on the shipping location of our customers:

 

  

Three Months Ended October 31,

  

Nine Months Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

United States

 $595  $353  $1,432  $852 

Europe

  6,162   1,956   15,245   11,013 

Middle East & Africa

  4,952   1,653   13,442   10,085 

Other

  396   1,012   1,700   1,182 

Total revenue from contracts with customers

 $12,105  $4,974  $31,819  $23,132 

 

As of October 31, 2024, and January 31, 2024, contract assets and liabilities consisted of the following:

 

  

October 31, 2024

  

January 31, 2024

 

Contract Assets:

 

(in thousands)

 

Unbilled revenue - current

 $191  $26 

Total unbilled revenue

 $191  $26 

Contract Liabilities:

        

Deferred revenue & customer deposits - current

 $3,360  $3,649 

Total deferred revenue & customer deposits

 $3,360  $3,649 

 

Considering the products manufactured and sold by our Seamap business and the Company’s standard contract terms and conditions, we expect the Company's contract assets and liabilities to turn over, on average, within a period of three to nine months.

 

With respect to the disclosures above, sales and transaction-based taxes are excluded from revenue, and we do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Also, we expense costs incurred to obtain contracts because the amortization period would be one year or less. These costs are recorded in selling, general and administrative expenses.

 

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7. Balance Sheet

 

  

October 31, 2024

  

January 31, 2024

 
  

(in thousands)

 

Inventories:

        

Raw materials

 $9,409  $8,730 

Finished goods

  5,353   2,463 

Work in progress

  4,059   3,709 

Cost of inventories

  18,821   14,902 

Less allowance for obsolescence

  (1,572)  (1,531)

Total inventories, net

 $17,249  $13,371 

 

  

October 31, 2024

  

January 31, 2024

 
  

(in thousands)

 

Property and equipment:

        

Furniture and fixtures

 $9,058  $8,868 

Autos and trucks

  227   287 

Land and buildings

  997   997 

Cost of property and equipment

  10,282   10,152 

Accumulated depreciation and amortization

  (9,507)  (9,334)

Total property and equipment, net

 $775  $818 

 

As of January 31, 2024, the Company completed an annual review of property and equipment noting no indications that the recorded value of assets may not be recoverable, and no impairment was recorded for fiscal 2024. Since  January 31, 2024, there have been no changes to the market, economic or legal environment in which the Company operates or overall performance of the Company, that would, in the aggregate, indicate additional impairment analysis is necessary as of October 31, 2024.

 
 

8. Leases

 

The Company has certain non-cancelable operating lease agreements for office, production and warehouse space in Texas, Singapore, Malaysia, and the United Kingdom. 

 

Lease expense for the three and nine months ended October 31, 2024, was approximately $221,000 and $643,000, respectively, and during the three and nine months ended October 31, 2023, was approximately $198,000 and $621,000, respectively, and was recorded as a component of operating income (loss). Included in these costs was short-term lease expense of approximately$7,000 and $20,000, respectively for the three and nine months ended October 31, 2024, and approximately $2,000 and $5,000, respectively for the three and nine months ended October 31, 2023. 

 

Supplemental balance sheet information related to leases as of October 31, 2024 and January 31, 2024 was as follows:

 

Lease

 

October 31, 2024

  

January 31, 2024

 

Assets

 (in thousands)

Operating lease assets

 $1,526  $1,324 
         

Liabilities

        

Operating lease liabilities

 $1,526  $1,324 
         

Classification of lease liabilities

        

Current liabilities

 $660  $751 

Non-current liabilities

  866   573 

Total Operating lease liabilities

 $1,526  $1,324 

 

Lease-term and discount rate details as of October 31, 2024 and January 31, 2024 were as follows:

 

Lease term and discount rate

 

October 31, 2024

  

January 31, 2024

 

Weighted average remaining lease term (years)

        

Operating leases

  1.63   1.40 
         

Weighted average discount rate:

        

Operating leases

  13%  13%

 

The weighted average discount rate was calculated using the Company's weighted average cost of capital.

 

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Supplemental cash flow information related to leases was as follows:

 

  

For the Nine Months Ended October 31, 2024

 

Lease

 

2024

  

2023

 

Cash paid for amounts included in the measurement of lease liabilities:

 

(in thousands)

 

Operating cash flows from operating leases

 $(643) $(621)
         

Changes in lease balances resulting from new and modified leases:

        

Operating leases

 $834  $391 

 

Maturities of lease liabilities at October 31, 2024 were as follows:

 

  

October 31, 2024

 
  (in thousands) 

2025

 $267 

2026

  707 

2027

  526 

2028

  275 

2029

  35 

Thereafter

  — 

Total payments under lease agreements

 $1,810 
     

Less: imputed interest

  (284)

Total lease liabilities

 $1,526 

 
 

9. Intangible Assets

 

      

October 31, 2024

  

January 31, 2024

 
  

Weighted

                         
  

Average Life at

  

Gross Carrying

  

Accumulated

  

Net Carrying

  

Gross Carrying

  

Accumulated

  

Net Carrying

 
  

October 31, 2024

  

Amount

  

Amortization

  

Amount

  

Amount

  

Amortization

  

Amount

 
      

(in thousands)

  

(in thousands)

 

Proprietary rights

  4.1   7,473   (5,376)  2,097   7,473   (5,053)  2,420 

Customer relationships

  —   4,884   (4,884)  —   4,884   (4,852)  32 

Patents

  1.0   2,540   (2,267)  273   2,540   (2,190)  350 

Trade name

  1.6   134   (116)  18   134   (108)  26 

Other

  0.1   416   (384)  32   426   (366)  60 

Intangible assets

     $15,447  $(13,027) $2,420  $15,457  $(12,569) $2,888 

 

 

On January 31, 2024, the Company completed an annual review of amortizable intangible assets. Based on a review of qualitative factors, it was determined that there were no events or changes in circumstances indicating that the carrying value of amortizable intangible assets was not recoverable. During the nine months ended October 31, 2024, there have been no substantive indicators of impairment.

 

Aggregate amortization expense was approximately $146,000 and $491,000 for the three and nine months ended October 31, 2024, respectively, and approximately $173,000 and $591,000 for the three and nine months ended October 31, 2023, respectively. As of October 31, 2024, future estimated amortization expense related to amortizable intangible assets was estimated to be:

 

For fiscal years ending January 31,

  (in thousands) 

2025

 $204 

2026

  506 

2027

  367 

2028

  302 

2029

  220 

Thereafter

  821 

Total

 $2,420 

 

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10. Notes Payable

 

On February 2, 2023, we entered into a $3.75 million Loan and Security Agreement (“the Loan”). The Company incurred approximately $814,000 of debt acquisition costs associated with the loan, including approximately $254,000 in origination and other transaction fees and approximately $484,000 of prepaid interest, which is the interest due through maturity. These costs were recorded as a reduction to the carrying value of our debt and amortized to interest expense straight-line over the term of the Loan. Approximately $169,000 and $536,000 of amortization of debt acquisition costs were recorded as interest expense for the three and nine months ended October 31, 2023, respectively. On August 22, 2023, in connection with the Sale of Klein, the Loan was repaid in full (see Note 2- "Sale of Subsidiary" for additional details). 

 
 

11. Income Taxes

 

For the three- and nine-month periods ended October 31, 2024, the income tax expense from continuing operations was approximately $396,000 and $1.3 million, respectively, on pre-tax income from continuing operations of approximately $1.7 million and $4.4 million, respectively. For the three and nine- month period ended October 31, 2023, the income tax expense from continuing operations was approximately $112,000 and $590,000, respectively, on pre-tax losses from continuing operations of approximately $1.6 million and $2.0 million, respectively. The variance between our actual provision and the expected provision when applying the U.S. statutory rate of 21% is due primarily to the impact of income taxes accrued in certain foreign jurisdictions, mainly Singapore, which do not have net operating losses available to offset taxable income, and because valuation allowances have been recorded against increases in our deferred tax assets. Valuation allowances have been provided against all deferred tax assets in the United States and certain foreign jurisdictions, including Malaysia and the United Kingdom.

 

The Company files U.S. federal and state income tax returns as well as separate returns for its foreign subsidiaries within their local jurisdictions. The Company's U.S. federal tax returns are subject to examination by the Internal Revenue Service for fiscal years ended January 31, 2019 through 2024. The Company’s tax returns may also be subject to examination by state and local tax authorities for fiscal years ending  January 31, 2017 through 2024. The Company's Singapore income tax returns are subject to examination by the Singapore tax authorities for the fiscal years ended January 31, 2017, through 2024. The Company’s tax returns in other foreign jurisdictions are generally subject to examination for the fiscal years ended January 31, 2018 through 2024.

 

The Company has determined that the undistributed earnings of foreign subsidiaries are not deemed to be indefinitely reinvested outside of the United States as of October 31, 2024. Furthermore, the Company has concluded that any deferred taxes with respect to the undistributed foreign earnings would be immaterial. Therefore, the Company has not recorded a deferred tax liability associated with the undistributed foreign earnings as of October 31, 2024.

 

For the three- and nine-month periods ended October 31, 2024 and 2023, the Company did not recognize any tax expense or benefit related to uncertain tax positions.

 
 

12. Earnings per Share

 

Net income per basic common share is computed using the weighted average number of common shares outstanding during the period, excluding unvested restricted stock. Net income per diluted common share is computed using the weighted average number of common shares and dilutive potential common shares outstanding during the period using the treasury stock method. Potential common shares result from the assumed exercise of outstanding common stock options having a dilutive effect and from the assumed vesting of unvested shares of restricted stock. For the three and nine months ended October 31, 2024 and October 31, 2023, dilutive potential common shares outstanding were immaterial and had no effect on the calculation of earnings per share because shares were anti-dilutive. The total basic weighted average common shares outstanding for the three and nine months ended October 31, 2024, was approximately 5.5 million shares and 2.8 million shares, respectively. The total basic weighted average common shares outstanding for the three and nine months ended October 31, 2023, was approximately 1.4 million shares.

 

On September 4, 2024, all outstanding shares of our 9.00% Series A Cumulative preferred stock (the “Preferred Stock”) were converted into common stock and retired.  The Company issued approximately 6,600,000 shares of common stock in connection with the conversion (see Note 14- "Equity and Stock Based Compensation" for additional details).

 

On October 12, 2023, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Charter (the “Charter Amendment”) to effect a one-for-ten reverse stock split (the “Reverse Stock Split”). Outstanding shares in prior periods have been restated to reflect the impact of the Reverse Stock Split in calculating earnings per share (see Note 14- "Equity and Stock Based Compensation" for additional details).

 
 

13. Related Party Transaction

 

 Ladenburg Thalmann & Co. Inc. (“Ladenburg”) provided advisor and arrangement services for the Loan (See Note 10 - "Notes Payable" for additional details) and received $75,000 in fees for such services.  Additionally, Ladenburg provided advisory services related to the Sale of Klein (see Note 2-"Sale of Subsidiary" for additional details) and received $405,000 of fees for such services. The former Co-Chief Executive Officer and Co-President of Ladenburg is the Non-Executive Chairman of the Company's board of directors (the "Board"). Our Non-Executive Chairman of the Board received no portion of the above-mentioned compensation.

 

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14. Equity and Stock-Based Compensation

 

 At the virtual Special Meeting of Preferred Stockholders held on August 29, 2024, our preferred stockholders approved an amendment to our Certificate of Designations, Preferences and Rights of 9.00% Series A Cumulative preferred stock, to provide that each share of 9.00% Series A Cumulative Preferred Stock, $1.00 par value per share (the “Preferred Stock”) shall be converted into 3.9 shares of common stock, $0.01 par value per share (the “common stock”). On September 4, 2024, all outstanding shares of Preferred Stock were converted into common stock and retired.  The Company issued approximately 6,600,000 shares of common stock in connection with the conversion. Accordingly, the Company no longer has obligations regarding Preferred Stock dividends, including undeclared dividends from previous periods. The common stock issued was recorded at its market value at the date of issuance less transaction costs related to the conversion. The excess of the carrying value of the preferred stock over the market value of the common stock issued, which amounted to approximately $14.8 million, was credited directly to accumulated deficit and is reflected in the calculation of earnings per share attributable to common stockholders. 

 

On September 28, 2023, the Board approved the Reverse Stock Split at a ratio of one-for-ten. On October 12, 2023, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Charter (the "Charter Amendment") to effect the Reverse Stock Split. The Charter Amendment became effective on October 13, 2023.

 

As a result of the Charter Amendment and Reverse Stock Split, every ten shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, without any change in par value per share. Proportionate adjustments were also made to any outstanding securities or rights convertible into, or exchangeable or exercisable for, shares of common stock. Fractional shares were not issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive a fractional share were entitled to receive one full share of post-Reverse Stock Split common stock, in lieu of receiving such fractional shares. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s relative interest in the Company’s equity securities. The Reverse Stock Split reduced the number of shares of issued and outstanding common stock from approximately 13,788,738 shares to approximately 1,405,779 shares. Common stock and treasury stock shares have been retroactively adjusted to reflect the Reverse Stock Split in all periods presented. In connection with the reverse stock split, the Company retired all treasury stock.

 

Total compensation expense recognized for stock-based awards granted under the Company’s equity incentive plan during the three and nine-month periods ended October 31, 2024 was approximately $47,000, and $141,000, respectively, and during the three and nine-month periods ended October 31, 2023, was approximately $106,000 and $264,000, respectively.

 
 

15. Segment Reporting

 

Prior to August 22, 2023, the Company operated in two segments, Seamap and Klein.  On August 21, 2023, the Company completed the Sale of Klein. (see Note 2-"Sale of Subsidiary" for additional details). As a result, at October 31, 2024, Seamap is the Company’s sole reportable segment.

 

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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

 

Certain statements contained in this Quarterly Report on Form 10-Q (this “Form 10-Q”) may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “expect,” “may,” “will,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenues and operating results are based on our forecasts of our existing operations and do not include the potential impact of any future acquisitions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below:

 

 

•

risks associated with our manufacturing operations including availability and reliability of materials and components as well the reliability of the products that we manufacture and sell;
 

•

loss of significant customers;
 

•

the impact of disruptions in global supply chains due to various factors, including certain components and materials becoming unavailable, increased lead times for components and materials, as well as increased costs for such items;
  • demands from suppliers for advance payments could increase our need for working capital; inability to access such working capital could impede our ability to complete orders;
 

•

increased competition;
 

•

loss of key suppliers;
 

•

intellectual property claims by third parties;
 

•

the effect of uncertainty in financial markets on our customers’ and our ability to obtain financing;
 

•

our ability to successfully execute strategic initiatives to grow our business;
 

•

uncertainties regarding our foreign operations, including political, economic, currency, environmental regulation and export compliance risks;
 

•

seasonal fluctuations that can adversely affect our business;
 

•

fluctuations due to circumstances beyond our control or that of our customers;
 

•

defaults by customers on amounts due to us;
 

•

possible further impairment of our long-lived assets due to technological obsolescence or changes in anticipated cash flow generated from those assets;
 

•

inability to obtain funding or to obtain funding under acceptable terms;
 

•

fluctuations in demand for seismic data, which is dependent on the level of spending by oil and gas companies for exploration, production and development activities, and may potentially negatively impact the value of our assets held for sale;
  • inflation and price volatility in the global economy that could negatively impact our business and results of operations;
  • the consequences of future geopolitical events, which we cannot predict but which may adversely affect the markets in which we operate, our operations, or our results of operations; and
  • negative impacts to our business from security threats, including cybersecurity threats, and other disruptions.

 

For additional information regarding known material factors that could cause our actual results to differ materially from our projected results, please see (1) Part II, “Item 1A. Risk Factors” of this Form 10-Q, (2) Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, and (3) the Company’s other filings filed with the SEC from time to time.

 

There may be other factors of which the Company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement after the date they are made, whether as the result of new information, future events or otherwise, except as required by law. All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Overview

 

On August 21, 2023, the Company completed the Sale of Klein (see Note 2-"Sale of Subsidiary" in the accompanying financial statements for additional details). Effective with the Sale of Klein, we operate in one segment, Seamap. Our Seamap business designs, produces and sells seismic exploration and survey equipment. Its customers include foreign and domestic commercial marine survey companies and various governmental institutions. 

 

Management believes that the performance of our Seamap business is indicated by revenues from sales of products and by gross profit from those sales. Management monitors EBITDA and Adjusted EBITDA, both as defined and reconciled to the most directly comparable financial measures calculated and presented in accordance with United States generally accepted accounting principles (“GAAP”), in the following table, as key indicators of our overall performance and liquidity.

 

   

For the Three Months Ended October 31,

    

For the Nine Months Ended October 31,

  
   

2024

    

2023

    

2024

    

2023

  

Reconciliation of Net income (loss) to EBITDA and Adjusted EBITDA from continuing operations

  

(in thousands)

                  

Net income (loss)

   $ 1,291     $ 568     $ 3,043     $ (1,167 )

Interest expense, net

     —       169       —       536  

Depreciation and amortization

     221       290       724       1,230  

Provision for income taxes

     396       112       1,313       590  

EBITDA (1)

     1,908       1,139       5,080       1,189  

Stock-based compensation

     47       106       141       264  

Income from discontinued operations net of depreciation and amortization

     —       (2,308 )     —       (1,762 )

Adjusted EBITDA from continuing operations (1)

   $ 1,955     $ (1,063 )   $ 5,221     $ (309 )

Reconciliation of Net Cash Provided by (Used in) Operating Activities to EBITDA

                                

Net cash provided by (used in) operating activities

   $ 2,288     $ (2,147 )   $ (1,407 )   $ (5,624 )

Gain on Sale of Klein

     —       2,393       —       2,393  

Stock-based compensation

     (47 )     (106 )     (141 )     (264 )

Provision for inventory obsolescence

     (22 )     (23 )     (67 )     (23 )

Changes in accounts receivable (current and long-term)

     (115 )     (2,570 )     2,842       637  

Interest paid, net

     —       169       —       576  

Taxes paid, net of refunds

     473       192       1,411       617  

Gross profit from sale of other equipment

     —       49       457       385  

Changes in inventory

     (1,798 )     2,841       3,944       3,174  

Changes in accounts payable, accrued expenses and other current liabilities and deferred revenue

     2,161       (427 )     191       (70 )

Changes in prepaid expenses and other current and long-term assets

     (1,034 )     763       (2,076 )     (566 )

Other

     2       5       (74 )     (46 )

EBITDA (1)

   $ 1,908     $ 1,139     $ 5,080     $ 1,189  

 

 

(1)

EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA is defined as net income before (a) interest income and interest expense, (b) provision for (or benefit from) income taxes and (c) depreciation and amortization. Adjusted EBITDA excludes non-cash foreign exchange gains and losses, stock-based compensation, impairment of intangible assets and other non-cash tax related items. We consider EBITDA and Adjusted EBITDA to be important indicators for the performance of our business, but not measures of performance or liquidity calculated in accordance with GAAP. We have included these non-GAAP financial measures because management utilizes this information for assessing our performance and liquidity, and as indicators of our ability to make capital expenditures, service debt and finance working capital requirements and we believe that EBITDA and Adjusted EBITDA are measurements that are commonly used by analysts and some investors in evaluating the performance and liquidity of companies such as us. In particular, we believe that it is useful to our analysts and investors to understand this relationship because it excludes transactions not related to our core cash operating activities. We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations. EBITDA and Adjusted EBITDA are not measures of financial performance or liquidity under GAAP and should not be considered in isolation or as alternatives to cash flow from operating activities or to net income as indicators of operating performance or any other measures of performance derived in accordance with GAAP. In evaluating our performance as measured by EBITDA, management recognizes and considers the limitations of this measurement. EBITDA and Adjusted EBITDA do not reflect our obligations for the payment of income taxes, interest expense or other obligations such as capital expenditures. Accordingly, EBITDA and Adjusted EBITDA are only two of the measurements that management utilizes. Other companies in our industry may calculate EBITDA or Adjusted EBITDA differently than we do and EBITDA and Adjusted EBITDA may not be comparable with similarly titled measures reported by other companies.

 

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We design, manufacture and sell a variety of products used primarily in seismic and marine survey industries. Seamap’s primary products include (i) the GunLink seismic source acquisition and control systems; (ii) the BuoyLink RGPS tracking system used to provide precise positioning of seismic sources and streamers (marine recording channels that are towed behind a vessel) and (iii) SeaLink marine sensors and solid streamer systems (collectively, the “SeaLink” product line or “towed streamer products”). These towed streamer products are primarily designed for three-dimensional, high-resolution marine surveys in marine survey applications.

 

Our results of operations can experience fluctuations in activity levels due to a number of factors outside of our control. These factors include budgetary or financial concerns, supply chain issues, labor or political issues, inclement weather, and global pandemics. See Part II, Item 1A- “Risk Factors.”

 

Business Outlook

 

Our financial performance has improved significantly in recent periods. Although we had a history of generating operating losses prior to fiscal 2024, we generated operating income from continuing operations in fiscal 2024 and the first three quarters of fiscal 2025.  We believe this is due to increased demand within our primary markets and efforts to reduce costs and improve product margins.

 

On August 21, 2023, we completed the Sale of Klein for cash consideration of $11.5 million. In addition, in connection with the Sale of Klein, the Company granted the Buyer a license in its Spectral Ai software suite, exclusive to the Buyer as it relates to side scan sonar. The Company and the Buyer also entered into a collaboration agreement for the further development of Spectral Ai and potentially other software projects. The license and collaboration agreements provide opportunities for recurring licensing revenue and recovery of certain ongoing operating costs.  The Sale of Klein served to streamline the Company’s operations and provided needed working capital to address the financial requirements associated with the continuing growth of our Seamap business.

 

As of October 31, 2024, our backlog of firm orders was approximately $26.2 million, which is essentially flat with July 31, 2024. Our backlog totaled approximately $38.4 million as of January 31, 2024 and $37.4 million as of October 31, 2023. We believe a significant portion of our current backlog will be completed and shipped by the end of fiscal 2025. Additionally, we have a significant pipeline of pending and potential orders that we estimate total more than twice our backlog of firm orders. We believe these orders provide good visibility for the balance of this fiscal year and into the next year. However, the level of backlog at a particular point in time may not necessarily be indicative of results in subsequent periods as the size and delivery period of individual orders can vary significantly.

 

On September 4, 2024, all outstanding shares of preferred stock were converted into common stock and retired.  The Company issued approximately 6.6 million shares of common stock in connection with the conversion.  Accordingly, the Company no longer has obligations regarding preferred stock dividends, including undeclared dividends from previous periods (see Note 14- “Equity and Stock-Based Compensation” for additional details).

 

Our revenues tend to fluctuate from quarter to quarter due to delivery schedules and other factors. We currently expect revenue in fiscal 2025 to exceed that of fiscal 2024. However, no assurances of such results can be made, and there are a number of risks which could cause results to be less than anticipated. Those risks include the following:

 

 

•

Inability of our customers to accept delivery of orders as scheduled;

 

 

•

Cancellation of orders;

 

 

•

Production difficulties, including supply chain disruptions, which could delay the completion of orders as scheduled;

 

 

•

Anticipated orders not being received as expected; and

 

 

•

Other unanticipated delays beyond our control. 

 

In our Seamap business we address the following primary markets:

 

 

•

Marine Survey

 

 

•

Marine Exploration

 

We see a number of opportunities to add to our technology and to apply existing technology and products to new applications.

 

Revenue from our Spectral Ai software suite has been de-minimus to date.  However, feedback from customers has been very positive and we believe there are a number of other potential customers.  We are exploring ways in which we can more quickly address an expanded market for this technology.

 

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We also continue to pursue initiatives to further expand our product offerings. These initiatives include new internally developed technology, introduction of new products based on our existing technology, technology obtained through partnering arrangements with others and a combination of all of these. There can be no assurance that any of these initiatives will ultimately have a material impact on our financial position or results of operations. The Company is also pursuing certain business opportunities with governmental organizations. Because the sales cycle for these projects can be quite long and can be impacted by a variety of factors, including the level of competition and budget limitations, the timing of contract awards is often difficult to predict.

 

We believe there are certain developments within the marine technology industry that can have a significant impact on our business. These developments include the following:

 

 

•

Increased activity within the marine exploration space, including applications for alternative energy projects such as offshore windfarms and carbon capture projects; and

 

 

•

Demand for economical, commercially developed, technology for maritime security applications.

 

In response to these, and other, developments we have prioritized certain strategic initiatives to exploit the opportunities that we perceive. These initiatives include the following:

 

 

•

Adaptation of our SeaLink solid streamer technology to alternative applications, such as hydrographic surveys for windfarm and carbon capture projects; and

 

 

•

Application of our Spectral Ai software suite technology to side scan sonar systems and potentially other sensor systems.

 

We believe that the above applications expand our addressable markets and provide opportunities for further growth in our revenues.

 

In fiscal 2024, we eliminated two executive management positions and certain other administrative positions in order to further control general and administrative costs. We have eliminated certain other positions in fiscal 2025. The Sale of Klein has allowed us to further streamline our operations. Should future financial results fall below our expectation, we may take further steps to reduce costs. We believe many of our costs are variable in nature, such as raw materials and labor-related costs. Accordingly, we believe we can reduce such costs commensurate with any declines in our business.

 

General inflation levels have increased in recent years due in part to supply chain issues, increased energy costs and geopolitical uncertainty. In addition, shortages of certain components, such as electronic components, have caused prices for available components to increase in some cases. These factors have had a negative impact on our costs; however, the magnitude of such impact cannot be accurately determined.

 

Our revenues and results of operations have not been materially impacted by inflation or changing prices in the past two fiscal years, except as described above.

 

Results of Operations

 

Revenues for the three and nine months ended October 31, 2024 were approximately $12.1 million and $31.8 million, respectively, compared to approximately $5.0 million and $23.1 million for the three and nine months ended October 31, 2023, respectively. The revenue increase in the three and nine month periods ended October 31, 2024, compared to the prior year periods was primarily due to increased activity within the marine technology markets, including those activities related to energy exploration and alternative energy initiatives. For the three and nine months ended October 31, 2024, we generated operating income of approximately $1.9 million and $4.0 million, respectively, compared to an operating loss of approximately $1.5 million and $1.8 million for the three and nine months ended October 31, 2023. The increase in operating income in the current year was attributable to increased revenues, decreased selling, general and administrative costs and reduced research and development costs during the nine months ended October 31, 2024. A more detailed explanation of these variations follows.

 

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Revenues and Cost of Sales

 

Revenues and cost of sales for our Seamap business were as follows:

 

   

Three Months Ended

    

Nine Months Ended

  
   

October 31,

    

October 31,

  
   

2024

    

2023

    

2024

    

2023

  
   

(in thousands)

    

(in thousands)

  

Revenues:

                                

Seamap

   $ 12,105     $ 4,974     $ 31,819     $ 23,132  

Cost of sales:

                                

Seamap

     6,684       2,721       17,402       13,402  

Gross profit

   $ 5,421     $ 2,253     $ 14,417     $ 9,730  

Gross profit margin

     45 %     45 %     45 %     42 %

 

A significant portion of Seamap’s sales consist of large discrete orders, the timing of which is dictated by our customers. This timing generally relates to the availability of a vessel so that our products can be installed. Accordingly, there can be significant variation in sales from one period to another. During the three and nine month periods ended October 31, 2024 approximately 60% of our revenues related to the sale of new systems with the remaining 40% related to “after market” activity such as the sale of spare parts, repairs and training. The gross profit and gross profit margins for Seamap were approximately $5.4 million and 45% and $14.4 million and 45% for the three and nine-month periods ended October 31, 2024, respectively, compared to approximately $2.3 million and 45% and $9.7 million and 42% in the three and nine-month periods ended October 31, 2023, respectively. For the three month periods, the gross profit margins were comparable, despite significantly higher revenue in the fiscal 2025 period, due mainly to revenue mix.  The gross profit margins in first nine-months of fiscal 2025 improved from the comparable period in the prior fiscal year, due to price increases implemented in fiscal 2024 and increased production efficiencies. The increased production efficiencies were due primarily to higher overhead absorption from incremental activity levels and production and procurement efficiencies facilitated by increased order backlog. 

 

Operating Expenses

 

General and administrative expenses for the three and nine-months ended October 31, 2024, respectively, were approximately $2.8 million and $8.3 million, compared to approximately $2.9 million and $9.2 million for the three and nine-months ended October 31, 2023, respectively. The decrease from the prior periods is primarily the result of lower compensation expense due to headcount reductions, and the impact of broader cost control measures.

 

Research and development costs were approximately $562,000 and $1.4 million, in the three and nine-month periods ended October 31, 2024, respectively, compared to approximately $508,000 and $1.5 million, in the three and nine-month period ended October 31, 2023, respectively. Costs in each of the periods are related primarily to our next generation towed streamer system and ongoing development of our Spectral Ai software suite.

 

Depreciation and amortization expense, which includes depreciation of equipment, furniture and fixtures and the amortization of intangible assets, decreased primarily attributable to assets becoming fully depreciated and amortized over the year. These costs were approximately $221,000 and $724,000 in the three and nine-month periods ended October 31, 2024, respectively, as compared to approximately $257,000 and $892,000 in the three and nine-month periods ended October 31, 2023, respectively.

 

Interest Expense

 

Interest expense of approximately $169,000 and $536,000 in the three and nine-months ended October 31, 2023, respectively, was primarily due to interest on the Loan. The Loan was repaid in fiscal 2024 in connection with the Sale of Klein (see note 2-"Sale of Subsidiary" and note 10-"Notes Payable" for additional details).

 

Other Expense

 

Other expense primarily relates to gains on the sale of certain ancillary equipment, scrap sales and other income.

 

Provision for Income Taxes

 

For the three and nine-months ended October 31, 2024, we reported tax expense of approximately $396,000 and $1.3 million, respectively, on pre-tax income from continuing operations of approximately $1.7 million and $4.4 million, respectively. For the three and nine-month period ended October 31, 2023, our income tax expense was approximately $112,000 and $590,000, respectively, on pre-tax loss from continuing operations of approximately $1.6 million and $2.0 million, respectively. These amounts differed from the result expected when applying the U.S. statutory rate of 21% to our income or loss from continuing operations before income taxes for the respective periods due primarily to the impact of income taxes accrued in certain foreign jurisdictions, primarily Singapore, which do not have net operating losses available to offset taxable income, and because valuation allowances have been recorded against increases in our deferred tax assets. Valuation allowances have been provided against all deferred tax assets in the United States and certain foreign jurisdictions, including Malaysia and the United Kingdom.

 

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Liquidity and Capital Resources

 

Until recently, the Company had a history of generating operating losses and negative cash from operating activities and relied on cash from the sale of lease pool equipment and the sale of preferred stock and common stock. However, the Company’s operating results improved significantly in fiscal 2024 as compared to fiscal 2023 and prior years. The Company generated net income from operations and positive Adjusted EBITDA for the fiscal year ended January 31, 2024 and the three and nine month periods ended October 31, 2024. In addition, the Company sold its Klein business on August 21, 2023, generating net proceeds of approximately $7.3 million after settlement of closing costs and all outstanding amounts due and owed, including principal, interest, and other charges, on the Company’s $3.75 million loan. The Sale of Klein increased the Company’s working capital and improved its liquidity situation.

 

As of October 31, 2024, the Company had working capital of approximately $21.2 million, including cash and cash equivalents of approximately $3.5 million, compared to working capital of approximately $18.1 million, including cash and cash equivalents of approximately $5.3 million, as of January 31, 2024. The Company does not have a credit facility in place and depends on cash on hand and cash flows from operations to satisfy its liquidity needs.

 

The Company believes it will have adequate liquidity to meet its future operating requirements through a combination of cash on hand, cash expected to be generated from operations, potential financing secured by company owned real property, disciplined working capital commitments, and potentially securing a credit facility or some other form of financing. In the six months ended October 31, 2024, the Company generated positive cash from operating activities in the amount of approximately $3.3 million.

 

In addition, management believes there are a number of other factors and actions available to the Company to address any liquidity needs, including the following:

 

 

•

The Company has no obligations or agreements containing “maintenance type” financial covenants.

 

 

•

The Company had working capital of approximately $21.2 million as of October 31, 2024, including cash of approximately $3.5 million.

 

 

•

Should revenues be less than projected, the Company believes it is able, and has plans, to reduce costs proportionately in order to maintain positive cash flow.

 

 

•

The majority of the Company’s costs are variable in nature, such as raw materials and personnel related costs. In fiscal 2024, the Company eliminated two executive level positions and has made additional headcount reductions in fiscal 2025. Furthermore, additional reductions in operations, sales, and general and administrative headcount could be made, if deemed necessary by management.

 

 

•

The Company had a backlog of orders related to the Seamap segment of approximately $26.2 million as of October 31, 2024, as well as a substantial pipeline of other prospects. Production for certain of these orders was in process and included in inventory as of October 31, 2024, thereby reducing the liquidity needed to complete the orders.

 

 

•

 On September 4, 2024 all outstanding shares of preferred stock were converted into common stock and retired.  The Company issued approximately 6.6 million shares of common stock in connection with the conversion.  Accordingly, the Company no longer has obligations regarding preferred stock dividends, including undeclared dividends from previous periods.  The conversion of preferred stock into common stock was effected pursuant to an amendment to the Certificate of Designations, Preferences and Rights of the preferred stock.  The amendment was approved by preferred stockholders at a virtual special meeting held on August 29, 2024 (see Note 14- “Equity and Stock-Based Compensation” for additional details).

 

 

•

In recent years, the Company has raised capital through the sale of common stock and preferred stock pursuant to the at-the-market program (the "ATM Offering Program") and underwritten offerings on Form S-1. Currently, the Company is not eligible to issue securities pursuant to Form S-3 and accordingly cannot sell securities pursuant to the ATM Offering Program. However, with the elimination of the preferred stock dividends in arrears, the Company anticipates becoming eligible to utilize Form S-3 after the Company files its Form 10-K for fiscal 2025. Additionally, the Company may sell securities pursuant to Form S-1 or in private transactions.  Management expects to be able to raise further capital through these available means should the need arise.
     
  • The Company owns unencumbered real estate near Huntsville, Texas which could be used to generate capital if needed through a mortgage or sale lease transaction. The appraised value of this property is approximately $5.0 million. The Company demonstrated its ability to do this through a secured lending transaction in early fiscal 2024, which was repaid from the proceeds from the Sale of Klein.

  

 

Due to the rising level of sales and production activities there are increasing requirements for purchases of inventory and other production costs. Additionally, due to component shortages and long-lead times for certain items there are requirements in some cases to purchase items well in advance. Furthermore, some suppliers require prepayments in order to secure some items. All of these factors combine to increase the Company’s working capital requirements. Furthermore, Management believes there are opportunities to increase production capacity and efficiencies. However, some of these opportunities may require additional investments such as in production equipment or other fixed assets. If we are unable to meet suppliers' demands, we may not be able to produce products and fulfill orders from our customers. 

 

In order to fund future growth, we may explore sources of additional capital. Such sources include private or public issues of equity or debt securities, or a combination of such securities. Other sources could include secured debt financing, the sale of assets or investment from strategic industry participants.

 

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The following table sets forth selected historical information regarding cash flows from our Consolidated Statements of Cash Flows:

 

   

For the Nine Months Ended

  
   

October 31,

  
   

2024

    

2023

  
   

(in thousands)

  

Net cash used in operating activities

   $ (1,407 )   $ (5,624 )

Net cash provided by investing activities

     244       11,018  

Net cash used in financing activities

     (619 )     (589 )

Effect of changes in foreign exchange rates on cash and cash equivalents

     (2 )     (14 )

Net decrease in cash and cash equivalents

   $ (1,784 )   $ 4,791  

 

As of October 31, 2024, we had working capital of approximately $21.2 million, including cash and cash equivalents of approximately $3.5 million, as compared to working capital of approximately $18.1 million, including cash and cash equivalents of approximately $5.3 million, at January 31, 2024. 

 

Cash Flows from Operating Activities. Net cash used in operating activities was approximately $1.4 million in the first nine months of fiscal 2025 as compared to approximately $5.6 million in the first nine months of fiscal 2024. The decrease in net cash used in operating activities in the first nine months of fiscal 2025 compared to the prior year period was due mainly to an increase in net income.

 

Cash Flows from Investing Activities. Cash provided by investing activities during the first nine months of fiscal 2025 decreased approximately $10.8 million over the same period in fiscal 2024. The decrease relates primarily to proceeds from the sale of Klein in fiscal 2024, not recurring in fiscal 2025.

 

Cash Flows from Financing Activities. Net cash used in financing activities during the first nine months of fiscal 2025 consisted of approximately $619,000 of transaction costs associated with the conversion of preferred stock to common stock (see Note 14- "Equity and Stock-Based Compensation " for additional details). Net cash used in financing activities during the first nine months of fiscal 2024 consisted of approximately $589,000 of payments net of proceeds related to short-term loans (see Note 10 - "Notes Payable" for additional details).

 

We have determined that the undistributed earnings of foreign subsidiaries are not deemed indefinitely reinvested outside of the United States as of October 31, 2024. Furthermore, we have concluded that any deferred taxes with respect to the undistributed foreign earnings would be immaterial.

 

As of October 31, 2024, we had deposits in foreign banks equal to approximately $3.3 million, all of which we believe could be distributed to the United States without adverse tax consequences. However, in certain cases, the transfer of these funds may result in withholding taxes payable to foreign taxing authorities. If withholding taxes should become payable, we believe the amount of tax withheld would be immaterial.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

 

Critical Accounting Estimates

 

Information regarding our critical accounting estimates is included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended January 31, 2024. There have been no material changes to our critical accounting estimates during the three- and nine-month periods ended October 31, 2024.

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

We are exposed to market risk, which is the potential loss arising from adverse changes in market prices and rates. We have not entered, and do not intend to enter, into derivative financial instruments for hedging or speculative purposes.

 

Foreign Currency Risk

 

We operate in several foreign locations, which gives rise to risk from changes in foreign currency exchange rates. To the extent possible, we attempt to denominate our transactions in foreign locations in U.S. dollars. For those cases in which transactions are not denominated in U.S. dollars, we are exposed to risk from changes in exchange rates to the extent that non-U.S. dollar revenues exceed non-U.S. dollar expenses related to those transactions. Our non-U.S. dollar transactions are denominated primarily in British pounds, Singapore dollars and European Union euros. As a result of these transactions, we generally hold cash balances that are denominated in these foreign currencies. At October 31, 2024, our consolidated cash and cash equivalents included foreign currency denominated amounts equivalent to approximately $190,000 in U.S. dollars. A 10% increase in the U.S. dollar as compared to each of these currencies would result in a loss of approximately $19,000 in the U.S. dollar value of these deposits, while a 10% decrease would result in an equal amount of gain. We do not currently hold or issue foreign exchange contracts or other derivative instruments to hedge these exposures.

 

Interest Rate Risk

 

As of October 31, 2024, we had no debt.

 

21
Table of Contents

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officers and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officers and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Our principal executive officer and principal financial officer have concluded that our current disclosure controls and procedures were not effective as of October 31, 2024, due to a material weakness in our internal control over financial reporting relating to the existence of inventory that was disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024.

 

Remediation

 

As previously described in Part II, Item 9A, "Controls and Procedures" of our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, we are implementing a remediation plan to address the material weakness in our internal controls over the existence of inventory. The remediation plan envisages a year-end inventory count encompassing one hundred percent (100%) of our inventory in Singapore and Malaysia. The weakness will remain unresolved until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

 

Changes in Internal Control over Financial Reporting

 

Other than changes in connection with the remediation plan discussed above, there was no change in our system of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended October 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II

 

Item 1. Legal Proceedings

 

From time to time, we are a party to legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceedings, individually or collectively, that we believe could have a material adverse effect on our results of operations or financial condition or is otherwise material.

 

Item 1A. Risk Factors

 

In addition to the other information set forth elsewhere in this Form 10-Q, you should carefully consider the risks discussed in our Annual Report on Form 10-K for the year ended January 31, 2024, which risks could materially affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in our Annual Report on Form 10-K for the year ended January 31, 2024. The risks described in our Annual Report on Form 10-K for the year ended January 31, 2024, are not the only risks the Company faces. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, or future results.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

 

(a)

Not applicable.
 

(b)

Not applicable.
  (c) Not applicable.

 

Item 3. Defaults Upon Senior Securities

 

Not applicable.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

 

Item  5. Other Information

 

Not applicable.

 

22
Table of Contents
 
 

Item 6. Exhibits

 

Exhibits

 

The exhibits marked with the cross symbol (†) are filed (or furnished in the case of Exhibit 32.1) with this Form 10-Q.

 

Exhibit

  

Document Description

  

Form

  

Exhibit

Number

          

Reference

2.1

  

A Stock Purchase Agreement dated as of August 21, 2023, by and among General Oceans, Inc., Klein Marine Systems Inc. and MIND Technology, Inc.

  

Current Report on Form 8-K, filed with the SEC on August 21, 2023.

  

10.1

3.1

  

Amended and Restated Certificate of Incorporation of MIND Technology, Inc.

  

Current Report on Form 8-K, filed with the SEC on August 7, 2020.

  

3.3
3.2   Certificate of Amendment of Certificate of Incorporation of MIND Technology, Inc., effective as of October 12, 2023.   Current Report on Form 8-K, filed with the SEC on October 13, 2023.   3.1

3.3

  

Amended and Restated Bylaws of MIND Technology, Inc.

  

Current Report on Form 8-K, filed with the SEC on August 7, 2020.

  

3.4

3.4

  

Certificate of Designations, Preferences and Rights of MIND Technology, Inc. 9.00% Series A Cumulative Preferred Stock

  

Current Report on Form 8-K, filed with the SEC on August 7, 2020.

  

3.5

3.5

  

Certificate of Amendment of Certificate of Designations, Preferences and Rights of MIND Technology, Inc. 9.00% Series A Cumulative Preferred Stock

  

Form 8-K filed with the SEC on September 25, 2020.

  

3.1

3.6

  

Second Certificate of Amendment of Certificate of Designations, Preferences and Rights of MIND Technology, Inc. 9.00% Series A Cumulative Preferred Stock

  

Registration Statement on Form S-1 filed with the SEC on October 25, 2021.

  

3.5

3.7

  

Third Certificate of Amendment of Certificate of Designations, Preferences and Rights of MIND Technology, Inc. 9.00% Series A Cumulative Preferred Stock

  

Form 8-K filed with the SEC on November 4, 2021.

  

3.3
3.8   Fourth Certificate of Amendment of Certificate of Designations, Preferences and Rights of MIND Technology, Inc. 9.00% Series A Cumulative Preferred Stock   Form 8-K filed with the SEC on October 13, 2023.   3.2
3.9   Fifth Certificate of Amendment of Certificate of Designations, Preferences and Rights of MIND Technology, Inc. 9.00% Series A Cumulative Preferred Stock   Form 8-K filed with the SEC on September 5, 2024.   3.1

3.10

  

Texas Certificate of Merger, effective as of August 3, 2020

  

Current Report on Form 8-K, filed with the SEC on August 7, 2020.

  

3.1

3.11

  

Delaware Certificate of Merger, effective as of August 3, 2020

  

Current Report on Form 8-K, filed with the SEC on August 7, 2020.

  

3.2
             

31.1†

  

Certification of Robert P. Capps, Chief Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

        
             

31.2†

  

Certification of Mark A. Cox, Chief Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

        
             

32.1†

  

Certification of Robert P. Capps, Chief Executive Officer, and Mark A. Cox, Chief Financial Officer, under Section 906 of the Sarbanes Oxley Act of 2002, 18 U.S.C. § 1350

        
             

101.INS†

  

Inline XBRL Instance Document

        
             

101.SCH†

  

Inline XBRL Taxonomy Extension Schema Document

        
             

101.CAL†

  

Inline XBRL Taxonomy Extension Calculation of Linkbase Document

        
             

101.DEF†

  

Inline XBRL Taxonomy Extension Definition Linkbase Document

        
             

101.LAB†

  

Inline XBRL Taxonomy Extension Label Linkbase Document

        
             

101.PRE†

  

Inline XBRL Taxonomy Extension Presentation Linkbase Document

        
             

104†

  

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

        

 

23
Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

   
 

MIND TECHNOLOGY, INC.
   

Date: December 12, 2024

/s/ Robert P. Capps
 

Robert P. Capps
 

President and Chief Executive Officer
   
 

(Duly Authorized Officer)

 

24

Exhibit 31.1

 

CERTIFICATION

 

I, Robert P. Capps, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended October 31, 2024 of MIND Technology, Inc. (the “registrant”);

 

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(s) 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(s) 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.

 

/s/ Robert P. Capps                                       

Robert P. Capps

President, Chief Executive Officer and Director

(Principal Executive Officer)

December 12, 2024

 

 

Exhibit 31.2

 

CERTIFICATION

 

I, Mark A. Cox, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended October 31, 2024 of MIND Technology, Inc. (the “registrant”);

 

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(s) 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(s) 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.

 

/s/ Mark A. Cox                            

Mark A. Cox

Chief Financial Officer and Vice President of Finance and Accounting

(Principal Financial Officer)

December 12, 2024

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of MIND Technology, Inc. (the “Company”) on Form 10-Q for the quarterly period ended October 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Robert P. Capps, Chief Executive Officer of the Company, and Mark A. Cox, Chief Financial Officer of the Company, each hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

 

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Robert P. Capps                                   

Robert P. Capps

President, Chief Executive Officer and Director

(Principal Executive Officer)

December 12, 2024

 

/s/ Mark A. Cox                            

Mark A. Cox

Chief Financial Officer and Vice President of Finance and Accounting

(Principal Financial Officer)

December 12, 2024

 

 
v3.24.3
Document And Entity Information - shares
 9 Months Ended
Oct. 31, 2024
Dec. 10, 2024
Document Information [Line Items]    
Entity Central Index Key 0000926423  
Entity Registrant Name MIND TECHNOLOGY, INC  
Amendment Flag false  
Current Fiscal Year End Date --01-31  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2025  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Oct. 31, 2024  
Document Transition Report false  
Entity File Number 001-13490  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 76-0210849  
Entity Address, Address Line One 2002 Timberloch Place Suite 550  
Entity Address, City or Town The Woodlands  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 77380  
City Area Code 281  
Local Phone Number 353-4475  
Title of 12(b) Security Common Stock - $0.01 par value per share  
Trading Symbol MIND  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   7,969,421
v3.24.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Oct. 31, 2024
Jan. 31, 2024
Current assets:    
Cash and cash equivalents $ 3,505 $ 5,289
Accounts receivable, net of allowance for credit losses of $332 at each of October 31, 2024 and January 31, 2024 9,471 6,566
Inventories, net 17,249 13,371
Prepaid expenses and other current assets 1,039 3,113
Total current assets 31,264 28,339
Property and equipment, net 775 818
Operating lease right-of-use assets 1,526 1,324
Intangible assets, net 2,420 2,888
Deferred tax asset 122 122
Total assets 36,107 33,491
Current liabilities:    
Accounts payable 2,179 1,623
Deferred revenue 248 203
Customer deposits 3,112 3,446
Accrued expenses and other current liabilities 1,742 2,140
Income taxes payable 2,093 2,114
Operating lease liabilities - current 660 751
Total current liabilities 10,034 10,277
Operating lease liabilities - non-current 866 573
Total liabilities 10,900 10,850
Stockholders’ equity:    
Preferred stock, $1.00 par value; 2,000 shares authorized; no shares issued and outstanding at October 31, 2024 and 1,683 shares issued and outstanding at January 31, 2024 0 37,779
Common stock, $0.01 par value; 40,000 shares authorized; 7,969 shares issued and outstanding at October 31, 2024 and 1,406 shares issued and outstanding at January 31, 2024 80 14
Additional paid-in capital 135,572 113,121
Accumulated deficit (110,479) (128,307)
Accumulated other comprehensive gain 34 34
Total stockholders’ equity 25,207 22,641
Total liabilities and stockholders’ equity $ 36,107 $ 33,491
v3.24.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)
$ in Thousands
Oct. 31, 2024
Jan. 31, 2024
Allowance for credit losses $ 332 $ 332
Preferred stock, par value (in dollars per share) $ 1 $ 1
Preferred stock, shares authorized (in shares) 2,000,000 2,000,000
Preferred stock, shares issued (in shares) 0 1,683,000
Preferred stock, shares outstanding (in shares) 0 1,683,000
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, authorized (in shares) 40,000,000 40,000,000
Common stock, issued (in shares) 7,969,000 1,406,000
Common stock, outstanding (in shares) 7,969,000 1,406,000
v3.24.3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
shares in Thousands
 3 Months Ended 9 Months Ended
Oct. 31, 2024
Oct. 31, 2023
Oct. 31, 2024
Oct. 31, 2023
Revenues:        
Sales of marine technology products $ 12,105,000 $ 4,974,000 $ 31,819,000 $ 23,132,000
Cost of sales:        
Sales of marine technology products 6,684,000 2,721,000 17,402,000 13,402,000
Gross profit 5,421,000 2,253,000 14,417,000 9,730,000
Operating expenses:        
Selling, general and administrative 2,762,000 2,941,000 8,305,000 9,160,000
Research and development 562,000 508,000 1,352,000 1,479,000
Depreciation and amortization 221,000 257,000 724,000 892,000
Total operating expenses 3,545,000 3,706,000 10,381,000 11,531,000
Operating income (loss) 1,876,000 (1,453,000) 4,036,000 (1,801,000)
Other income (expense):        
Interest expense 0 (169,000) 0 (536,000)
Other, net (189,000) 25,000 320,000 336,000
Total other income (expense) (189,000) (144,000) 320,000 (200,000)
Income (loss) from continuing operations before income taxes 1,687,000 (1,597,000) 4,356,000 (2,001,000)
Provision for income taxes (396,000) (112,000) (1,313,000) (590,000)
Net income (loss) from continuing operations 1,291,000 (1,709,000) 3,043,000 (2,591,000)
Income from discontinued operations, net of income taxes 0 2,277,000 0 1,424,000
Net income (loss) 1,291,000 568,000 3,043,000 (1,167,000)
Preferred stock dividends - declared 0 (947,000) 0 (947,000)
Preferred stock dividends - undeclared (368,000) 0 (2,262,000) (1,894,000)
Effect of preferred stock conversion 14,785,000 0 14,785,000 0
Net Income (loss) attributable to common stockholders $ 15,708,000 $ (379,000) $ 15,566,000 $ (4,008,000)
Net Income (loss) per common share - Basic and Diluted        
Continuing operations (in dollars per share) $ 2.87 $ (1.89) $ 5.62 $ (3.86)
Discontinued operations (in dollars per share) 0 1.62 0 1.01
Net income (loss) (in dollars per share) $ 2.87 $ (0.27) $ 5.62 $ (2.85)
Shares used in computing net income (loss) per common share:        
Basic and diluted (in shares) 5,473 1,406 2,772 1,406
v3.24.3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Oct. 31, 2024
Oct. 31, 2023
Oct. 31, 2024
Oct. 31, 2023
Net income (loss) $ 1,291 $ 568 $ 3,043 $ (1,167)
Comprehensive income (loss) $ 1,291 $ 568 $ 3,043 $ (1,167)
v3.24.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 9 Months Ended
Oct. 31, 2024
Oct. 31, 2023
Cash flows from operating activities:    
Net income (loss) $ 3,043 $ (1,167)
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Depreciation and amortization 724 1,230
Stock-based compensation 141 264
Gain on sale of Klein 0 (2,393)
Provision for inventory obsolescence 67 23
Changes in:    
Accounts receivable (3,006) (688)
Unbilled revenue 164 51
Inventories (3,944) (3,174)
Prepaid expenses and other current and long-term assets 2,076 566
Income taxes receivable and payable (24) (21)
Accounts payable, accrued expenses and other current liabilities 98 (1,045)
Deferred revenue and customer deposits (289) 1,115
Net cash used in operating activities (1,407) (5,624)
Cash flows from investing activities:    
Purchases of property and equipment (213) (199)
Proceeds from the sale of Klein, net 0 10,832
Sale of other equipment 457 385
Net cash provided by investing activities 244 11,018
Cash flows from financing activities:    
Preferred stock conversion transaction costs (619) 0
Net proceeds from short-term loan 0 2,947
Payment on short-term loan 0 (3,750)
Refund of prepaid interest on short-term loan 0 214
Net cash used in financing activities (619) (589)
Effect of changes in foreign exchange rates on cash and cash equivalents (2) (14)
Net change in cash and cash equivalents (1,784) 4,791
Cash and cash equivalents, beginning of period 5,289 778
Cash and cash equivalents, end of period 3,505 5,569
Supplemental cash flow information:    
Interest paid 0 576
Income taxes paid 1,411 617
Other Machinery and Equipment [Member]    
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Gross profit from sale of equipment $ (457) $ (385)
v3.24.3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
Common Stock [Member]
Preferred Stock [Member]
Additional Paid-in Capital [Member]
Treasury Stock, Common and Preferred [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Total
Balances (in shares) at Jan. 31, 2023 1,599 1,683          
Balances at Jan. 31, 2023 $ 16 $ 37,779 $ 129,721 $ (16,863) $ (127,635) $ 34 $ 23,052
Net income (loss) 0 0 0 0 (240) 0 (240)
Stock-based compensation 0 0 50 0 0 0 50
Balances at Apr. 30, 2023 $ 16 $ 37,779 129,771 (16,863) (127,875) 34 22,862
Balances (in shares) at Apr. 30, 2023 1,599 1,683          
Balances (in shares) at Jan. 31, 2023 1,599 1,683          
Balances at Jan. 31, 2023 $ 16 $ 37,779 129,721 (16,863) (127,635) 34 23,052
Net income (loss)             (1,167)
Balances at Oct. 31, 2023 $ 14 $ 37,779 113,124 0 (129,748) 34 21,203
Balances (in shares) at Oct. 31, 2023 1,407 1,683          
Balances (in shares) at Apr. 30, 2023 1,599 1,683          
Balances at Apr. 30, 2023 $ 16 $ 37,779 129,771 (16,863) (127,875) 34 22,862
Net income (loss) 0 0 0 0 (1,494) 0 (1,494)
Stock-based compensation 0 0 108 0 0 0 108
Balances at Jul. 31, 2023 $ 16 $ 37,779 129,879 (16,863) (129,369) 34 21,476
Balances (in shares) at Jul. 31, 2023 1,600 1,683          
Net income (loss) $ 0 $ 0 0 0 568 0 568
Stock-based compensation 0 0 106 0 0 0 106
Balances at Oct. 31, 2023 $ 14 $ 37,779 113,124 0 (129,748) 34 21,203
Retirement of treasury stock (in shares) (193) 0          
Retirement of treasury stock $ (2) $ 0   16,863     0
Retirement of treasury stock     (16,861)        
Preferred stock dividends $ 0 $ 0 0 0 (947) 0 (947)
Balances (in shares) at Oct. 31, 2023 1,407 1,683          
Balances (in shares) at Jan. 31, 2024 1,406 1,683          
Balances at Jan. 31, 2024 $ 14 $ 37,779 113,121 0 (128,307) 34 22,641
Net income (loss) 0 0 0 0 954 0 954
Stock-based compensation 0 0 48 0 0 0 48
Balances at Apr. 30, 2024 $ 14 $ 37,779 113,169 0 (127,353) 34 23,643
Balances (in shares) at Apr. 30, 2024 1,406 1,683          
Balances (in shares) at Jan. 31, 2024 1,406 1,683          
Balances at Jan. 31, 2024 $ 14 $ 37,779 113,121 0 (128,307) 34 22,641
Net income (loss)             3,043
Balances at Oct. 31, 2024 $ 80 $ 0 135,572 0 (110,479) 34 25,207
Balances (in shares) at Oct. 31, 2024 7,969 0          
Balances (in shares) at Apr. 30, 2024 1,406 1,683          
Balances at Apr. 30, 2024 $ 14 $ 37,779 113,169 0 (127,353) 34 23,643
Net income (loss) 0 0 0 0 798 0 798
Stock-based compensation 0 0 46 0 0 0 46
Balances at Jul. 31, 2024 $ 14 $ 37,779 113,215 0 (126,555) 34 24,487
Balances (in shares) at Jul. 31, 2024 1,406 1,683          
Net income (loss) $ 0 $ 0 0 0 1,291 0 1,291
Stock-based compensation $ 0 $ 0 47 0 0 0 47
Preferred stock conversion (in shares) 6,563 (1,683)          
Preferred stock conversion $ 66 $ (37,779) 22,310 0   0 (618)
Preferred stock conversion         14,785    
Balances at Oct. 31, 2024 $ 80 $ 0 $ 135,572 $ 0 $ (110,479) $ 34 $ 25,207
Balances (in shares) at Oct. 31, 2024 7,969 0          
v3.24.3
Note 1 - Organization, Liquidity and Summary of Significant Accounting Policies
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Nature of Operations [Text Block]

1. Organization, Liquidity and Summary of Significant Accounting Policies

 

Organization—MIND Technology, Inc., a Delaware corporation (the “Company”), was incorporated in 1987. The Company, through its wholly owned subsidiaries, Seamap Pte Ltd, MIND Maritime Acoustics, LLC, Seamap (Malaysia) Sdn Bhd and Seamap (UK) Ltd, collectively “Seamap”, designs, manufactures and sells a broad range of proprietary products for the seismic, hydrographic and offshore industries with product sales and support facilities based in Singapore, Malaysia, the United Kingdom and the state of Texas. Prior to August 21, 2023, the Company, through its wholly owned subsidiary Klein Marine Systems, Inc. (“Klein”), designed, manufactured and sold a broad range of proprietary products for the seismic, hydrographic and offshore industries from its facility in the state of New Hampshire. Effective August 21, 2023, the Company sold Klein and retrospectively presented its prior period financial results as discontinued operations (see Note 2 – “Sale of a Subsidiary” for additional details).

 

Liquidity—As of October 31, 2024, the Company had working capital of approximately $21.2 million, including cash and cash equivalents of approximately $3.5 million, compared to working capital of approximately $18.1 million, including cash and cash equivalents of approximately $5.3 million as of January 31, 2024. The Company does not have a credit facility in place and depends on cash on hand and cash flows from operations to satisfy its liquidity needs.  However, the Company believes it will have adequate liquidity to meet its future operating requirements through a combination of cash on hand, cash expected to be generated from operations, disciplined working capital management, potential financing secured by company-owned real property, and potentially securing a credit facility or some other form of financing.

 

Summary of Significant Accounting Policies—We describe our significant accounting policies in Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024. During the nine months ended October 31, 2024, there were no changes to those accounting policies.

 
v3.24.3
Note 2 - Sale of Subsidiary
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Sale of Subsidiaries and Subsequent Events [Text Block]

2. Sale of Subsidiary

 

On August 21, 2023, the Company sold Klein pursuant to a Stock Purchase Agreement (the “SPA”) with General Oceans AS (the "Buyer"). In connection with the SPA, the Company granted the Buyer a license to its Spectral Ai software suite (“Spectral Ai”). The license is exclusive to the Buyer as it relates to side scan sonar. The Company and the Buyer also entered into a collaboration agreement for the further development of Spectral Ai and potentially other software projects. The foregoing transactions contemplated by the SPA are referred to as the “Sale of Klein”. The aggregate consideration to the Company consisted of a cash payment of $11.5 million, resulting in a gain of approximately $2.3 million. The SPA contained customary representations and warranties.

 

On August 22, 2023, following the closing of the Sale of Klein, all outstanding amounts due and owed, including principal, interest, and other charges, under the Loan (as defined below) were repaid in full and the Loan was terminated, and all liens and security interests granted thereunder were released and terminated (see Note 10 -"Notes Payable" for additional details).

 
v3.24.3
Note 3 - Basis of Presentation
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Basis of Accounting [Text Block]

3. Basis of Presentation

 

The condensed consolidated balance sheet as of January 31, 2024, for the Company has been derived from audited consolidated financial statements. The unaudited interim condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2024 (“fiscal 2024”). In the opinion of the Company’s management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position as of October 31, 2024, the results of operations for the three and nine months ended October 31, 2024 and 2023, the cash flows for the nine months ended October 31, 2024 and 2023, and the statement of stockholders’ equity for the three and nine months ended October 31, 2024 and 2023, have been included in these condensed consolidated financial statements. The foregoing interim results are not necessarily indicative of the results of operations to be expected for the full fiscal year ending January 31, 2025 (“fiscal 2025”).

 
v3.24.3
Note 4 - Discontinued Operations
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

4. Discontinued Operations

 

On August 21, 2023, the Company sold Klein pursuant to the SPA with the Buyer. As a result, its results of operations are reported as discontinued operations for the three and nine-month period ended October 31, 2023.

 

The results of operations from discontinued operations for the three and nine months ended October 31, 2024 and 2023 consist of the following:

 

  

For the Three Months Ended October 31,

  

For the Nine Months Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 

Revenues:

 

(in thousands)

         

Revenue from discontinued operations

 $—  $140  $—  $3,318 

Cost of sales:

                

Cost of discontinued operations

  —   11   —   1,982 

Operating expenses:

                

Selling, general and administrative

  —   179   —   1,348 

Research and development

  —   45   —   689 

Depreciation and amortization

  —   18   —   324 

Total operating expenses

  —   242   —   2,361 

Operating loss

  —   (113)  —   (1,025)

Other income

  —   2      73 

Gain on sale of Klein

  —   2,393   —   2,393 

Income before income taxes from discontinued operations

  —   2,282   —   1,441 

Provision for income taxes from discontinued operations

  —   (5)  —   (17)

Net Income from discontinued operations

  —   2,277   —   1,424 

 

The significant operating and investing noncash items and capital expenditures related to discontinued operations are summarized below:

 

  

For the Nine Months Ended October 31,

 
  

2024

  

2023

 
  (in thousands) 

Depreciation and amortization

 $—  $324 

Gain on sale of Klein

 $—  $2,393 

 
v3.24.3
Note 5 - New Accounting Pronouncements
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Accounting Standards Update and Change in Accounting Principle [Text Block]

5. New Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), to enhance the disclosures public entities provide regarding significant segment expenses so that investors can better understand an entity’s overall performance and assess potential future cash flows. ASU 2023-07 is effective for our annual periods beginning February 1, 2024 and interim periods within fiscal years beginning February 1, 2025. The Company is evaluating the new guidance to determine the impact it will have on the disclosures to its consolidated financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 seeks to improve transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures. The updated guidance is effective for the Company on February 1, 2025. The Company is currently evaluating the new guidance to determine the impact it will have on the disclosures to its consolidated financial statements.

 

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03"), to enhance the disclosures public entities provide regarding specified information about certain costs and expenses at each interim and annual reporting period so that investors can better understand an entity’s overall performance, including its cost structure, and assess potential future cash flows. ASU 2024-03 is effective for our annual periods beginning February 1, 2027 and interim periods within fiscal years beginning February 1, 2028. The Company is evaluating the new guidance to determine the impact it will have on the disclosures to its consolidated financial statements.

 
v3.24.3
Note 6 - Revenue From Contracts With Customers
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

6. Revenue from Contracts with Customers

 

The following table presents revenue from contracts with customers disaggregated by timing of revenue recognition:

 

  

Three Months Ended October 31,

  

Nine Months Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 

Revenue recognized at a point in time:

 

(in thousands)

 

Total revenue recognized at a point in time

 $11,405  $4,263  $30,443  $21,966 

Revenue recognized over time:

                

Total revenue recognized over time

  700   711   1,376   1,166 

Total revenue from contracts with customers

 $12,105  $4,974  $31,819  $23,132 

 

The revenue from products manufactured and sold by our Seamap business is generally recognized at a point in time, or when the customer takes possession of the product, based on the terms and conditions stipulated in our contracts with customers. However, from time to time our Seamap business provides repair and maintenance services, or performs upgrades, on customer owned equipment in which case revenue is recognized over time. In addition, our Seamap business provides annual Software Maintenance Agreements (“SMA”) to customers who have an active license for software embedded in Seamap products. The revenue from the SMAs is recognized over time, with the total value of the SMAs recognized in equal monthly amounts over the life of the contract.

 

The following table presents revenue from contracts with customers disaggregated by geography, based on the shipping location of our customers:

 

  

Three Months Ended October 31,

  

Nine Months Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

United States

 $595  $353  $1,432  $852 

Europe

  6,162   1,956   15,245   11,013 

Middle East & Africa

  4,952   1,653   13,442   10,085 

Other

  396   1,012   1,700   1,182 

Total revenue from contracts with customers

 $12,105  $4,974  $31,819  $23,132 

 

As of October 31, 2024, and January 31, 2024, contract assets and liabilities consisted of the following:

 

  

October 31, 2024

  

January 31, 2024

 

Contract Assets:

 

(in thousands)

 

Unbilled revenue - current

 $191  $26 

Total unbilled revenue

 $191  $26 

Contract Liabilities:

        

Deferred revenue & customer deposits - current

 $3,360  $3,649 

Total deferred revenue & customer deposits

 $3,360  $3,649 

 

Considering the products manufactured and sold by our Seamap business and the Company’s standard contract terms and conditions, we expect the Company's contract assets and liabilities to turn over, on average, within a period of three to nine months.

 

With respect to the disclosures above, sales and transaction-based taxes are excluded from revenue, and we do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Also, we expense costs incurred to obtain contracts because the amortization period would be one year or less. These costs are recorded in selling, general and administrative expenses.

 
v3.24.3
Note 7 - Balance Sheet
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Supplemental Balance Sheet Disclosures [Text Block]

7. Balance Sheet

 

  

October 31, 2024

  

January 31, 2024

 
  

(in thousands)

 

Inventories:

        

Raw materials

 $9,409  $8,730 

Finished goods

  5,353   2,463 

Work in progress

  4,059   3,709 

Cost of inventories

  18,821   14,902 

Less allowance for obsolescence

  (1,572)  (1,531)

Total inventories, net

 $17,249  $13,371 

 

  

October 31, 2024

  

January 31, 2024

 
  

(in thousands)

 

Property and equipment:

        

Furniture and fixtures

 $9,058  $8,868 

Autos and trucks

  227   287 

Land and buildings

  997   997 

Cost of property and equipment

  10,282   10,152 

Accumulated depreciation and amortization

  (9,507)  (9,334)

Total property and equipment, net

 $775  $818 

 

As of January 31, 2024, the Company completed an annual review of property and equipment noting no indications that the recorded value of assets may not be recoverable, and no impairment was recorded for fiscal 2024. Since  January 31, 2024, there have been no changes to the market, economic or legal environment in which the Company operates or overall performance of the Company, that would, in the aggregate, indicate additional impairment analysis is necessary as of October 31, 2024.

 
v3.24.3
Note 8 - Leases
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]

8. Leases

 

The Company has certain non-cancelable operating lease agreements for office, production and warehouse space in Texas, Singapore, Malaysia, and the United Kingdom. 

 

Lease expense for the three and nine months ended October 31, 2024, was approximately $221,000 and $643,000, respectively, and during the three and nine months ended October 31, 2023, was approximately $198,000 and $621,000, respectively, and was recorded as a component of operating income (loss). Included in these costs was short-term lease expense of approximately$7,000 and $20,000, respectively for the three and nine months ended October 31, 2024, and approximately $2,000 and $5,000, respectively for the three and nine months ended October 31, 2023. 

 

Supplemental balance sheet information related to leases as of October 31, 2024 and January 31, 2024 was as follows:

 

Lease

 

October 31, 2024

  

January 31, 2024

 

Assets

 (in thousands)

Operating lease assets

 $1,526  $1,324 
         

Liabilities

        

Operating lease liabilities

 $1,526  $1,324 
         

Classification of lease liabilities

        

Current liabilities

 $660  $751 

Non-current liabilities

  866   573 

Total Operating lease liabilities

 $1,526  $1,324 

 

Lease-term and discount rate details as of October 31, 2024 and January 31, 2024 were as follows:

 

Lease term and discount rate

 

October 31, 2024

  

January 31, 2024

 

Weighted average remaining lease term (years)

        

Operating leases

  1.63   1.40 
         

Weighted average discount rate:

        

Operating leases

  13%  13%

 

The weighted average discount rate was calculated using the Company's weighted average cost of capital.

 

Supplemental cash flow information related to leases was as follows:

 

  

For the Nine Months Ended October 31, 2024

 

Lease

 

2024

  

2023

 

Cash paid for amounts included in the measurement of lease liabilities:

 

(in thousands)

 

Operating cash flows from operating leases

 $(643) $(621)
         

Changes in lease balances resulting from new and modified leases:

        

Operating leases

 $834  $391 

 

Maturities of lease liabilities at October 31, 2024 were as follows:

 

  

October 31, 2024

 
  (in thousands) 

2025

 $267 

2026

  707 

2027

  526 

2028

  275 

2029

  35 

Thereafter

  — 

Total payments under lease agreements

 $1,810 
     

Less: imputed interest

  (284)

Total lease liabilities

 $1,526 

 
v3.24.3
Note 9 - Intangible Assets
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]

9. Intangible Assets

 

      

October 31, 2024

  

January 31, 2024

 
  

Weighted

                         
  

Average Life at

  

Gross Carrying

  

Accumulated

  

Net Carrying

  

Gross Carrying

  

Accumulated

  

Net Carrying

 
  

October 31, 2024

  

Amount

  

Amortization

  

Amount

  

Amount

  

Amortization

  

Amount

 
      

(in thousands)

  

(in thousands)

 

Proprietary rights

  4.1   7,473   (5,376)  2,097   7,473   (5,053)  2,420 

Customer relationships

  —   4,884   (4,884)  —   4,884   (4,852)  32 

Patents

  1.0   2,540   (2,267)  273   2,540   (2,190)  350 

Trade name

  1.6   134   (116)  18   134   (108)  26 

Other

  0.1   416   (384)  32   426   (366)  60 

Intangible assets

     $15,447  $(13,027) $2,420  $15,457  $(12,569) $2,888 

 

 

On January 31, 2024, the Company completed an annual review of amortizable intangible assets. Based on a review of qualitative factors, it was determined that there were no events or changes in circumstances indicating that the carrying value of amortizable intangible assets was not recoverable. During the nine months ended October 31, 2024, there have been no substantive indicators of impairment.

 

Aggregate amortization expense was approximately $146,000 and $491,000 for the three and nine months ended October 31, 2024, respectively, and approximately $173,000 and $591,000 for the three and nine months ended October 31, 2023, respectively. As of October 31, 2024, future estimated amortization expense related to amortizable intangible assets was estimated to be:

 

For fiscal years ending January 31,

  (in thousands) 

2025

 $204 

2026

  506 

2027

  367 

2028

  302 

2029

  220 

Thereafter

  821 

Total

 $2,420 

 
v3.24.3
Note 10 - Notes Payable
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Long-Term Debt [Text Block]

10. Notes Payable

 

On February 2, 2023, we entered into a $3.75 million Loan and Security Agreement (“the Loan”). The Company incurred approximately $814,000 of debt acquisition costs associated with the loan, including approximately $254,000 in origination and other transaction fees and approximately $484,000 of prepaid interest, which is the interest due through maturity. These costs were recorded as a reduction to the carrying value of our debt and amortized to interest expense straight-line over the term of the Loan. Approximately $169,000 and $536,000 of amortization of debt acquisition costs were recorded as interest expense for the three and nine months ended October 31, 2023, respectively. On August 22, 2023, in connection with the Sale of Klein, the Loan was repaid in full (see Note 2- "Sale of Subsidiary" for additional details). 

 
v3.24.3
Note 11 - Income Taxes
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

11. Income Taxes

 

For the three- and nine-month periods ended October 31, 2024, the income tax expense from continuing operations was approximately $396,000 and $1.3 million, respectively, on pre-tax income from continuing operations of approximately $1.7 million and $4.4 million, respectively. For the three and nine- month period ended October 31, 2023, the income tax expense from continuing operations was approximately $112,000 and $590,000, respectively, on pre-tax losses from continuing operations of approximately $1.6 million and $2.0 million, respectively. The variance between our actual provision and the expected provision when applying the U.S. statutory rate of 21% is due primarily to the impact of income taxes accrued in certain foreign jurisdictions, mainly Singapore, which do not have net operating losses available to offset taxable income, and because valuation allowances have been recorded against increases in our deferred tax assets. Valuation allowances have been provided against all deferred tax assets in the United States and certain foreign jurisdictions, including Malaysia and the United Kingdom.

 

The Company files U.S. federal and state income tax returns as well as separate returns for its foreign subsidiaries within their local jurisdictions. The Company's U.S. federal tax returns are subject to examination by the Internal Revenue Service for fiscal years ended January 31, 2019 through 2024. The Company’s tax returns may also be subject to examination by state and local tax authorities for fiscal years ending  January 31, 2017 through 2024. The Company's Singapore income tax returns are subject to examination by the Singapore tax authorities for the fiscal years ended January 31, 2017, through 2024. The Company’s tax returns in other foreign jurisdictions are generally subject to examination for the fiscal years ended January 31, 2018 through 2024.

 

The Company has determined that the undistributed earnings of foreign subsidiaries are not deemed to be indefinitely reinvested outside of the United States as of October 31, 2024. Furthermore, the Company has concluded that any deferred taxes with respect to the undistributed foreign earnings would be immaterial. Therefore, the Company has not recorded a deferred tax liability associated with the undistributed foreign earnings as of October 31, 2024.

 

For the three- and nine-month periods ended October 31, 2024 and 2023, the Company did not recognize any tax expense or benefit related to uncertain tax positions.

 
v3.24.3
Note 12 - Earnings Per Share
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Earnings Per Share [Text Block]

12. Earnings per Share

 

Net income per basic common share is computed using the weighted average number of common shares outstanding during the period, excluding unvested restricted stock. Net income per diluted common share is computed using the weighted average number of common shares and dilutive potential common shares outstanding during the period using the treasury stock method. Potential common shares result from the assumed exercise of outstanding common stock options having a dilutive effect and from the assumed vesting of unvested shares of restricted stock. For the three and nine months ended October 31, 2024 and October 31, 2023, dilutive potential common shares outstanding were immaterial and had no effect on the calculation of earnings per share because shares were anti-dilutive. The total basic weighted average common shares outstanding for the three and nine months ended October 31, 2024, was approximately 5.5 million shares and 2.8 million shares, respectively. The total basic weighted average common shares outstanding for the three and nine months ended October 31, 2023, was approximately 1.4 million shares.

 

On September 4, 2024, all outstanding shares of our 9.00% Series A Cumulative preferred stock (the “Preferred Stock”) were converted into common stock and retired.  The Company issued approximately 6,600,000 shares of common stock in connection with the conversion (see Note 14- "Equity and Stock Based Compensation" for additional details).

 

On October 12, 2023, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Charter (the “Charter Amendment”) to effect a one-for-ten reverse stock split (the “Reverse Stock Split”). Outstanding shares in prior periods have been restated to reflect the impact of the Reverse Stock Split in calculating earnings per share (see Note 14- "Equity and Stock Based Compensation" for additional details).

 
v3.24.3
Note 13 - Related Party Transaction
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]

13. Related Party Transaction

 

 Ladenburg Thalmann & Co. Inc. (“Ladenburg”) provided advisor and arrangement services for the Loan (See Note 10 - "Notes Payable" for additional details) and received $75,000 in fees for such services.  Additionally, Ladenburg provided advisory services related to the Sale of Klein (see Note 2-"Sale of Subsidiary" for additional details) and received $405,000 of fees for such services. The former Co-Chief Executive Officer and Co-President of Ladenburg is the Non-Executive Chairman of the Company's board of directors (the "Board"). Our Non-Executive Chairman of the Board received no portion of the above-mentioned compensation.

 
v3.24.3
Note 14 - Equity and Stock-based Compensation
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Shareholders' Equity and Share-Based Payments [Text Block]

14. Equity and Stock-Based Compensation

 

 At the virtual Special Meeting of Preferred Stockholders held on August 29, 2024, our preferred stockholders approved an amendment to our Certificate of Designations, Preferences and Rights of 9.00% Series A Cumulative preferred stock, to provide that each share of 9.00% Series A Cumulative Preferred Stock, $1.00 par value per share (the “Preferred Stock”) shall be converted into 3.9 shares of common stock, $0.01 par value per share (the “common stock”). On September 4, 2024, all outstanding shares of Preferred Stock were converted into common stock and retired.  The Company issued approximately 6,600,000 shares of common stock in connection with the conversion. Accordingly, the Company no longer has obligations regarding Preferred Stock dividends, including undeclared dividends from previous periods. The common stock issued was recorded at its market value at the date of issuance less transaction costs related to the conversion. The excess of the carrying value of the preferred stock over the market value of the common stock issued, which amounted to approximately $14.8 million, was credited directly to accumulated deficit and is reflected in the calculation of earnings per share attributable to common stockholders. 

 

On September 28, 2023, the Board approved the Reverse Stock Split at a ratio of one-for-ten. On October 12, 2023, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Charter (the "Charter Amendment") to effect the Reverse Stock Split. The Charter Amendment became effective on October 13, 2023.

 

As a result of the Charter Amendment and Reverse Stock Split, every ten shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, without any change in par value per share. Proportionate adjustments were also made to any outstanding securities or rights convertible into, or exchangeable or exercisable for, shares of common stock. Fractional shares were not issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive a fractional share were entitled to receive one full share of post-Reverse Stock Split common stock, in lieu of receiving such fractional shares. The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s relative interest in the Company’s equity securities. The Reverse Stock Split reduced the number of shares of issued and outstanding common stock from approximately 13,788,738 shares to approximately 1,405,779 shares. Common stock and treasury stock shares have been retroactively adjusted to reflect the Reverse Stock Split in all periods presented. In connection with the reverse stock split, the Company retired all treasury stock.

 

Total compensation expense recognized for stock-based awards granted under the Company’s equity incentive plan during the three and nine-month periods ended October 31, 2024 was approximately $47,000, and $141,000, respectively, and during the three and nine-month periods ended October 31, 2023, was approximately $106,000 and $264,000, respectively.

 
v3.24.3
Note 15 - Segment Reporting
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

15. Segment Reporting

 

Prior to August 22, 2023, the Company operated in two segments, Seamap and Klein.  On August 21, 2023, the Company completed the Sale of Klein. (see Note 2-"Sale of Subsidiary" for additional details). As a result, at October 31, 2024, Seamap is the Company’s sole reportable segment.

 
v3.24.3
Insider Trading Arrangements
 3 Months Ended 9 Months Ended
Oct. 31, 2024
Oct. 31, 2024
Insider Trading Arr Line Items    
Material Terms of Trading Arrangement [Text Block]  

Item  5. Other Information

 

Not applicable.

 
Rule 10b5-1 Arrangement Adopted [Flag] false  
Non-Rule 10b5-1 Arrangement Adopted [Flag] false  
Rule 10b5-1 Arrangement Terminated [Flag] false  
Non-Rule 10b5-1 Arrangement Terminated [Flag] false  
v3.24.3
Note 4 - Discontinued Operations (Tables)
 9 Months Ended
Oct. 31, 2024
Klein [Member]  
Notes Tables  
Disposal Groups, Including Discontinued Operations [Table Text Block]
  

For the Three Months Ended October 31,

  

For the Nine Months Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 

Revenues:

 

(in thousands)

         

Revenue from discontinued operations

 $—  $140  $—  $3,318 

Cost of sales:

                

Cost of discontinued operations

  —   11   —   1,982 

Operating expenses:

                

Selling, general and administrative

  —   179   —   1,348 

Research and development

  —   45   —   689 

Depreciation and amortization

  —   18   —   324 

Total operating expenses

  —   242   —   2,361 

Operating loss

  —   (113)  —   (1,025)

Other income

  —   2      73 

Gain on sale of Klein

  —   2,393   —   2,393 

Income before income taxes from discontinued operations

  —   2,282   —   1,441 

Provision for income taxes from discontinued operations

  —   (5)  —   (17)

Net Income from discontinued operations

  —   2,277   —   1,424 
  

For the Nine Months Ended October 31,

 
  

2024

  

2023

 
  (in thousands) 

Depreciation and amortization

 $—  $324 

Gain on sale of Klein

 $—  $2,393 
v3.24.3
Note 6 - Revenue From Contracts With Customers (Tables)
 9 Months Ended
Oct. 31, 2024
Notes Tables  
Disaggregation of Revenue [Table Text Block]
  

Three Months Ended October 31,

  

Nine Months Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 

Revenue recognized at a point in time:

 

(in thousands)

 

Total revenue recognized at a point in time

 $11,405  $4,263  $30,443  $21,966 

Revenue recognized over time:

                

Total revenue recognized over time

  700   711   1,376   1,166 

Total revenue from contracts with customers

 $12,105  $4,974  $31,819  $23,132 
  

Three Months Ended October 31,

  

Nine Months Ended October 31,

 
  

2024

  

2023

  

2024

  

2023

 
  

(in thousands)

 

United States

 $595  $353  $1,432  $852 

Europe

  6,162   1,956   15,245   11,013 

Middle East & Africa

  4,952   1,653   13,442   10,085 

Other

  396   1,012   1,700   1,182 

Total revenue from contracts with customers

 $12,105  $4,974  $31,819  $23,132 
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]
  

October 31, 2024

  

January 31, 2024

 

Contract Assets:

 

(in thousands)

 

Unbilled revenue - current

 $191  $26 

Total unbilled revenue

 $191  $26 

Contract Liabilities:

        

Deferred revenue & customer deposits - current

 $3,360  $3,649 

Total deferred revenue & customer deposits

 $3,360  $3,649 
v3.24.3
Note 7 - Balance Sheet (Tables)
 9 Months Ended
Oct. 31, 2024
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
  

October 31, 2024

  

January 31, 2024

 
  

(in thousands)

 

Inventories:

        

Raw materials

 $9,409  $8,730 

Finished goods

  5,353   2,463 

Work in progress

  4,059   3,709 

Cost of inventories

  18,821   14,902 

Less allowance for obsolescence

  (1,572)  (1,531)

Total inventories, net

 $17,249  $13,371 
Property, Plant and Equipment [Table Text Block]
  

October 31, 2024

  

January 31, 2024

 
  

(in thousands)

 

Property and equipment:

        

Furniture and fixtures

 $9,058  $8,868 

Autos and trucks

  227   287 

Land and buildings

  997   997 

Cost of property and equipment

  10,282   10,152 

Accumulated depreciation and amortization

  (9,507)  (9,334)

Total property and equipment, net

 $775  $818 
v3.24.3
Note 8 - Leases (Tables)
 9 Months Ended
Oct. 31, 2024
Notes Tables  
Assets and Liabilities, Lessee [Table Text Block]

Lease

 

October 31, 2024

  

January 31, 2024

 

Assets

 (in thousands)

Operating lease assets

 $1,526  $1,324 
         

Liabilities

        

Operating lease liabilities

 $1,526  $1,324 
         

Classification of lease liabilities

        

Current liabilities

 $660  $751 

Non-current liabilities

  866   573 

Total Operating lease liabilities

 $1,526  $1,324 
Lease, Cost [Table Text Block]

Lease term and discount rate

 

October 31, 2024

  

January 31, 2024

 

Weighted average remaining lease term (years)

        

Operating leases

  1.63   1.40 
         

Weighted average discount rate:

        

Operating leases

  13%  13%
  

For the Nine Months Ended October 31, 2024

 

Lease

 

2024

  

2023

 

Cash paid for amounts included in the measurement of lease liabilities:

 

(in thousands)

 

Operating cash flows from operating leases

 $(643) $(621)
         

Changes in lease balances resulting from new and modified leases:

        

Operating leases

 $834  $391 
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]
  

October 31, 2024

 
  (in thousands) 

2025

 $267 

2026

  707 

2027

  526 

2028

  275 

2029

  35 

Thereafter

  — 

Total payments under lease agreements

 $1,810 
     

Less: imputed interest

  (284)

Total lease liabilities

 $1,526 
v3.24.3
Note 9 - Intangible Assets (Tables)
 9 Months Ended
Oct. 31, 2024
Notes Tables  
Schedule of Intangible Assets and Goodwill [Table Text Block]
      

October 31, 2024

  

January 31, 2024

 
  

Weighted

                         
  

Average Life at

  

Gross Carrying

  

Accumulated

  

Net Carrying

  

Gross Carrying

  

Accumulated

  

Net Carrying

 
  

October 31, 2024

  

Amount

  

Amortization

  

Amount

  

Amount

  

Amortization

  

Amount

 
      

(in thousands)

  

(in thousands)

 

Proprietary rights

  4.1   7,473   (5,376)  2,097   7,473   (5,053)  2,420 

Customer relationships

  —   4,884   (4,884)  —   4,884   (4,852)  32 

Patents

  1.0   2,540   (2,267)  273   2,540   (2,190)  350 

Trade name

  1.6   134   (116)  18   134   (108)  26 

Other

  0.1   416   (384)  32   426   (366)  60 

Intangible assets

     $15,447  $(13,027) $2,420  $15,457  $(12,569) $2,888 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

For fiscal years ending January 31,

  (in thousands) 

2025

 $204 

2026

  506 

2027

  367 

2028

  302 

2029

  220 

Thereafter

  821 

Total

 $2,420 
v3.24.3
Note 1 - Organization, Liquidity and Summary of Significant Accounting Policies (Details Textual) - USD ($)
$ in Thousands
Oct. 31, 2024
Jan. 31, 2024
Working Capital (Deficit) $ 21,200 $ 18,100
Cash and Cash Equivalents, at Carrying Value $ 3,505 $ 5,289
v3.24.3
Note 2 - Sale of Subsidiary (Details Textual) - USD ($)
$ in Thousands
 9 Months Ended
Aug. 21, 2023
Oct. 31, 2024
Oct. 31, 2023
Gain (Loss) on Disposition of Business   $ (0) $ 2,393
Klein Marine Services, Inc. [Member]      
Disposal Group, Including Discontinued Operation, Consideration $ 11,500    
Gain (Loss) on Disposition of Business $ 2,300    
v3.24.3
Note 4 - Discontinued Operations - Held for Sale and Discontinued Operations (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Aug. 21, 2023
Oct. 31, 2024
Oct. 31, 2023
Oct. 31, 2024
Oct. 31, 2023
Net Income from discontinued operations   $ 0 $ 2,277 $ 0 $ 1,424
Gain on sale of Klein       (0) 2,393
Klein Marine Services, Inc. [Member]          
Gain on sale of Klein $ 2,300        
Discontinued Operations, Disposed of by Sale [Member]          
Revenue from discontinued operations   0 140 0 3,318
Cost of discontinued operations   0 11 0 1,982
Selling, general and administrative   0 179 0 1,348
Research and development   0 45 0 689
Depreciation and amortization   0 18 0 324
Total operating expenses   0 242 0 2,361
Operating loss   0 (113) 0 (1,025)
Other income   0 2 73
Gain on sale of Klein   0 2,393 0 2,393
Income before income taxes from discontinued operations   0 2,282 0 1,441
Provision for income taxes from discontinued operations   0 (5) 0 (17)
Net Income from discontinued operations   $ 0 $ 2,277 0 1,424
Depreciation and amortization       0 324
Discontinued Operations, Disposed of by Sale [Member] | Klein Marine Services, Inc. [Member]          
Gain on sale of Klein       $ 0 $ 2,393
v3.24.3
Note 6 - Revenue From Contracts With Customers (Details Textual)
 9 Months Ended
Oct. 31, 2024
Minimum [Member]  
Contract with Customers, Turn Over Period (Month) 3 months
Maximum [Member]  
Contract with Customers, Turn Over Period (Month) 9 months
v3.24.3
Note 6 - Revenue From Contracts With Customers - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Oct. 31, 2024
Oct. 31, 2023
Oct. 31, 2024
Oct. 31, 2023
Total revenue from contracts with customers $ 12,105 $ 4,974 $ 31,819 $ 23,132
Sales of marine technology products 12,105 4,974 31,819 23,132
Transferred at Point in Time [Member]        
Total revenue from contracts with customers 11,405 4,263 30,443 21,966
Sales of marine technology products 11,405 4,263 30,443 21,966
Transferred over Time [Member]        
Total revenue from contracts with customers 700 711 1,376 1,166
Sales of marine technology products 700 711 1,376 1,166
UNITED STATES        
Total revenue from contracts with customers 595 353 1,432 852
Sales of marine technology products 595 353 1,432 852
Europe [Member]        
Total revenue from contracts with customers 6,162 1,956 15,245 11,013
Sales of marine technology products 6,162 1,956 15,245 11,013
Middle East and Africa [Member]        
Total revenue from contracts with customers 4,952 1,653 13,442 10,085
Sales of marine technology products 4,952 1,653 13,442 10,085
Other Countries [Member]        
Total revenue from contracts with customers 396 1,012 1,700 1,182
Sales of marine technology products $ 396 $ 1,012 $ 1,700 $ 1,182
v3.24.3
Note 6 - Revenue From Contracts With Customers - Contract Assets and Liabilities (Details) - USD ($)
$ in Thousands
Oct. 31, 2024
Jan. 31, 2024
Unbilled revenue - current $ 191 $ 26
Total unbilled revenue 191 26
Deferred revenue & customer deposits - current 3,360 3,649
Total deferred revenue & customer deposits $ 3,360 $ 3,649
v3.24.3
Note 7 - Balance Sheet (Details Textual) - USD ($)
$ in Thousands
 9 Months Ended
Jan. 31, 2024
Oct. 31, 2024
Impairment, Long-Lived Asset, Held-for-Use $ 0 $ 0
v3.24.3
Note 7 - Balance Sheet - Schedule of Inventories (Details) - USD ($)
$ in Thousands
Oct. 31, 2024
Jan. 31, 2024
Raw materials $ 9,409 $ 8,730
Finished goods 5,353 2,463
Work in progress 4,059 3,709
Cost of inventories 18,821 14,902
Less allowance for obsolescence (1,572) (1,531)
Total inventories, net $ 17,249 $ 13,371
v3.24.3
Note 7 - Balance Sheet - Schedule of Property, Plant and Equipment (Details) - USD ($)
$ in Thousands
Oct. 31, 2024
Jan. 31, 2024
Property and equipment, gross $ 10,282 $ 10,152
Accumulated depreciation and amortization (9,507) (9,334)
Total property and equipment, net 775 818
Furniture and Fixtures [Member]    
Property and equipment, gross 9,058 8,868
Vehicles [Member]    
Property and equipment, gross 227 287
Land and Building [Member]    
Property and equipment, gross $ 997 $ 997
v3.24.3
Note 8 - Leases (Details Textual) - USD ($)
 3 Months Ended 9 Months Ended
Oct. 31, 2024
Oct. 31, 2023
Oct. 31, 2024
Oct. 31, 2023
Lease, Cost $ 221,000 $ 198,000 $ 643,000 $ 621,000
Short-Term Lease, Cost $ 7,000 $ 2,000 $ 20,000 $ 5,000
v3.24.3
Note 8 - Leases - Supplemental Balance Sheet Information (Details) - USD ($)
$ in Thousands
Oct. 31, 2024
Jan. 31, 2024
Operating lease assets $ 1,526 $ 1,324
Operating lease liabilities 1,526 1,324
Current liabilities 660 751
Non-current liabilities 866 573
Total Operating lease liabilities $ 1,526 $ 1,324
v3.24.3
Note 8 - Leases - Supplemental Cash Flow Information (Details) - USD ($)
$ in Thousands
 9 Months Ended
Oct. 31, 2024
Oct. 31, 2023
Jan. 31, 2024
Weighted average remaining lease term, Operating leases (Year) 1 year 7 months 17 days   1 year 4 months 24 days
Weighted average discount rate, Operating leases 13.00%   13.00%
Operating cash flows from operating leases $ (643) $ (621)  
Right-of-use assets obtained in exchange for lease liabilities, Operating leases $ 834 $ 391  
v3.24.3
Note 8 - Leases - Maturities of Lease Liabilities (Details) - USD ($)
$ in Thousands
Oct. 31, 2024
Jan. 31, 2024
2025 $ 267  
2026 707  
2027 526  
2028 275  
2029 35  
Thereafter 0  
Total payments under lease agreements 1,810  
Less: imputed interest (284)  
Total lease liabilities $ 1,526 $ 1,324
v3.24.3
Note 9 - Intangible Assets (Details Textual) - USD ($)
 3 Months Ended 9 Months Ended
Oct. 31, 2024
Oct. 31, 2023
Oct. 31, 2024
Oct. 31, 2023
Amortization of Intangible Assets $ 146,000 $ 173,000 $ 491,000 $ 591,000
v3.24.3
Note 9 - Intangible Assets - Schedule of Goodwill and Other Intangible Assets (Details) - USD ($)
$ in Thousands
Oct. 31, 2024
Jan. 31, 2024
Amortizable intangible assets, gross carrying amount $ 15,447 $ 15,457
Amortizable intangible assets, accumulated amortization (13,027) (12,569)
Intangible assets, net 2,420 2,888
Proprietary Rights [Member]    
Amortizable intangible assets, gross carrying amount 7,473 7,473
Amortizable intangible assets, accumulated amortization (5,376) (5,053)
Intangible assets, net $ 2,097 2,420
Proprietary Rights [Member] | Weighted Average [Member]    
Weighted average life (Year) 4 years 1 month 6 days  
Customer Relationships [Member]    
Amortizable intangible assets, gross carrying amount $ 4,884 4,884
Amortizable intangible assets, accumulated amortization (4,884) (4,852)
Intangible assets, net 0 32
Patents [Member]    
Amortizable intangible assets, gross carrying amount 2,540 2,540
Amortizable intangible assets, accumulated amortization (2,267) (2,190)
Intangible assets, net $ 273 350
Patents [Member] | Weighted Average [Member]    
Weighted average life (Year) 1 year  
Trade Names [Member]    
Amortizable intangible assets, gross carrying amount $ 134 134
Amortizable intangible assets, accumulated amortization (116) (108)
Intangible assets, net $ 18 26
Trade Names [Member] | Weighted Average [Member]    
Weighted average life (Year) 1 year 7 months 6 days  
Other Intangible Assets [Member]    
Amortizable intangible assets, gross carrying amount $ 416 426
Amortizable intangible assets, accumulated amortization (384) (366)
Intangible assets, net $ 32 $ 60
Other Intangible Assets [Member] | Weighted Average [Member]    
Weighted average life (Year) 1 month 6 days  
v3.24.3
Note 9 - Intangible Assets - Future Estimated Amortization Expense (Details) - USD ($)
$ in Thousands
Oct. 31, 2024
Jan. 31, 2024
Total $ 2,420 $ 2,888
Intangibles Excluding Technology Development Projects Not Yet Completed [Member]    
2025 204  
2026 506  
2027 367  
2028 302  
2029 220  
Thereafter 821  
Total $ 2,420  
v3.24.3
Note 10 - Notes Payable (Details Textual) - The Loan [Member] - USD ($)
 3 Months Ended 9 Months Ended
Feb. 02, 2023
Oct. 31, 2023
Oct. 31, 2023
Proceeds from Notes Payable $ 3,750,000    
Amortization of Debt Issuance Costs 814,000    
Loan Processing Fee 254,000    
Prepaid Interest $ 484,000    
Interest Expense, Debt   $ 169,000 $ 536,000
v3.24.3
Note 11 - Income Taxes (Details Textual) - USD ($)
 3 Months Ended 9 Months Ended
Oct. 31, 2024
Oct. 31, 2023
Oct. 31, 2024
Oct. 31, 2023
Income Tax Expense (Benefit) $ 396,000 $ 112,000 $ 1,313,000 $ 590,000
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest 1,687,000 (1,597,000) 4,356,000 (2,001,000)
Deferred Tax Liabilities, Undistributed Foreign Earnings 0   0  
Unrecognized Tax Benefits $ 0 $ 0 $ 0 $ 0
v3.24.3
Note 12 - Earnings Per Share (Details Textual)
 3 Months Ended 9 Months Ended
Sep. 04, 2024
shares
Oct. 12, 2023
Sep. 28, 2023
Oct. 31, 2024
shares
Oct. 31, 2023
shares
Oct. 31, 2024
shares
Oct. 31, 2023
shares
Weighted Average Number of Shares Outstanding, Basic (in shares)       5,473,000 1,406,000 2,772,000 1,406,000
Reverse Stock Split [Member]              
Stockholders' Equity Note, Stock Split, Conversion Ratio   10 10        
Conversion of Series A Preferred Stock Into Common Stock [Member]              
Conversion of Stock, Shares Issued (in shares) 6,600,000            
v3.24.3
Note 13 - Related Party Transaction (Details Textual) - USD ($)
 3 Months Ended
Oct. 31, 2023
Feb. 02, 2023
Ladenburg Thalmann and Co. Inc. [Member] | Advisory Services Related to Sale of Klein [Member]    
Related Party Transaction, Amounts of Transaction $ 405,000  
The Loan [Member]    
Debt Instrument, Fee Amount   $ 75,000
v3.24.3
Note 14 - Equity and Stock-based Compensation (Details Textual)
 3 Months Ended 9 Months Ended
Sep. 04, 2024
USD ($)
shares
Oct. 12, 2023
Sep. 28, 2023
shares
Oct. 31, 2024
USD ($)
$ / shares
shares
Oct. 31, 2023
USD ($)
Oct. 31, 2024
USD ($)
$ / shares
shares
Oct. 31, 2023
USD ($)
Aug. 29, 2024
$ / shares
Jan. 31, 2024
$ / shares
shares
Sep. 27, 2023
shares
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares       $ 1   $ 1   $ 1 $ 1  
Preferred Stock, Convertible, Conversion Ratio               3.9    
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares       $ 0.01   $ 0.01   $ 0.01 $ 0.01  
Treasury Stock Reissued at Lower than Repurchase Price, Conversion of Convertible Securities | $ $ 14,800,000                  
Common Stock, Shares, Issued (in shares)     1,405,779 7,969,000   7,969,000     1,406,000 13,788,738
Share-Based Payment Arrangement, Expense | $       $ 47,000 $ 106,000 $ 141,000 $ 264,000      
Common Stock, Shares, Outstanding (in shares)     1,405,779 7,969,000   7,969,000     1,406,000 13,788,738
Reverse Stock Split [Member]                    
Stockholders' Equity Note, Stock Split, Conversion Ratio   10 10              
Conversion of Series A Preferred Stock Into Common Stock [Member]                    
Conversion of Stock, Shares Issued (in shares) 6,600,000                  
v3.24.3
Note 15 - Segment Reporting (Details Textual)
 6 Months Ended
Aug. 21, 2023
Jul. 31, 2024
Number of Operating Segments 2  
Seamap Marine Products [Member]    
Number of Operating Segments   1
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