What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-12-04 compared with 2020-09-15 · 126 added, 99 removed, 461 unchanged (33% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

July 31, 2020 January 31, 2020

October 31, 2020 January 31, 2020

Current assets:

2 unchanged sentences

Accounts receivable, net of allowance for doubtful accounts of $ 1,044 and $ 2,378

at July 31, 2020 and January 31, 2020, respectively

at October 31, 2020 and January 31, 2020, respectively

Inventories, net 11,880 12,656

25 unchanged sentences

2,000 shares authorized;

994 and 994 shares issued and

outstanding at July 31, 2020 and January 31, 2020, respectively

994 shares issued and

outstanding at October 31, 2020 and January 31, 2020

22,104 22,104

2 unchanged sentences

14,773 and 14,097 shares issued at

July 31, 2020 and January 31, 2020, respectively

October 31, 2020 and January 31, 2020, respectively

Additional paid-in capital

125,810 123,964

Treasury stock, at cost ( 1,929 shares at July 31, 2020 and January 31, 2020)

Treasury stock, at cost ( 1,929 shares at October 31, 2020 and January 31, 2020)

( 16,860 ) ( 16,860 )

7 unchanged sentences

(in thousands, except per share data)

For the Three Months Ended July 31, For the Six Months Ended July 31,

For the Three Months Ended October 31, For the Nine Months Ended October 31,

2020 2019 2020 2019

Sale of marine technology products

$ 6,541 $ 8,175 $ 14,814 $ 21,039

Total revenues 6,541 8,175 14,814 21,039

1 unchanged sentence

Sale of marine technology products

4,267 4,860 10,039 12,478

Total cost of sales 4,267 4,860 10,039 12,478

9 unchanged sentences

Other, net 12 ( 31 ) 68 145

Total other income — 136 56 176

Total other income (expense) 12 ( 31 ) 68 145

Loss from continuing operations before income taxes ( 2,261 ) ( 1,350 ) ( 10,772 ) ( 5,084 )

Benefit for income taxes 530 46 188 44

(Provision) benefit for income taxes ( 109 ) 31 79 75

Loss from continuing operations ( 2,370 ) ( 1,319 ) ( 10,693 ) ( 5,009 )

18 unchanged sentences

(in thousands)

For the Three Months Ended July 31, For the Six Months Ended July 31,

For the Three Months Ended October 31, For the Nine Months Ended October 31,

2020 2019 2020 2019

7 unchanged sentences

(in thousands)

For the Six Months Ended July 31,

For the Nine Months Ended October 31,

Cash flows from operating activities:

8 unchanged sentences

Gross profit from sale of lease pool equipment ( 1,326 ) ( 987 )

Gross profit from sale of other equipment ( 303 ) —

Deferred tax expense ( 32 ) 135

Non-current prepaid tax — ( 157 )

Accounts receivable 3,640 ( 1,020 )

11 unchanged sentences

Sale of used lease pool equipment 2,010 1,415

Sale of assets held for sale 734 —

Sale of business, net of cash sold — 239

Net cash provided by investing activities 1,598 622

Net cash provided by (used in) investing activities 2,570 ( 1,178 )

Cash flows from financing activities:

1 unchanged sentence

Net proceeds from preferred stock offering — 2,211

Net proceeds from common stock offering 1,291 —

Preferred stock dividends ( 1,118 ) ( 1,492 )

Proceed from PPP loans 1,607 —

Proceeds from PPP loans 1,607 —

Net cash provided by financing activities 1,780 744

7 unchanged sentences

Purchases of seismic equipment held for lease in accounts payable at end of period $ — $ 753

Purchase of seismic equipment held for lease through settlement of accounts receivable $ — $ 826

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

15 unchanged sentences

Foreign currency translation — — — — — — — 82 82

Equity Compensation — — — — — — — — —

Preferred stock offering — — — — — — — — —

Preferred stock dividends — — — — — — ( 559 ) — ( 559 )

1 unchanged sentence

Balances, July 31, 2020 14,097 $ 141 994 $ 22,104 $ 124,413 $ ( 16,860 ) $ ( 91,674 ) $ ( 4,436 ) $ 33,688

Net loss — — — — — — ( 3,590 ) — ( 3,590 )

Foreign currency translation — — — — — — — 11 11

Preferred stock dividends — — — — — — ( 559 ) — ( 559 )

Common stock offerings 676 7 — — 1,284 — — — 1,291

Stock-based compensation — — — — 113 — — — 113

Balances, October 31, 2020 14,773 $ 148 994 $ 22,104 $ 125,810 $ ( 16,860 ) $ ( 95,823 ) $ ( 4,425 ) $ 30,954

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands)

Common Stock Preferred Stock Accumulated Other Comprehensive Loss

11 unchanged sentences

Foreign currency translation — — — — — — — ( 41 ) ( 41 )

Restricted stock issued — — — — — — — — —

Equity Compensation 9 1 — — 25 — — — 26

3 unchanged sentences

Balances, July 31, 2019 14,058 $ 141 917 $ 20,310 $ 123,452 $ ( 16,860 ) $ ( 70,495 ) $ ( 4,535 ) $ 52,013

Net loss — — — — — — ( 2,028 ) — ( 2,028 )

Foreign currency translation — — — — — — — 115 115

Restricted stock issued 39 — — — — — — — —

Preferred stock offering — — 11 230 — — — — 230

Preferred stock dividends — — — — — — ( 522 ) — ( 522 )

Stock-based compensation — — — — 270 — — — 270

Balances, October 31, 2019 14,097 $ 141 928 $ 20,540 123,722 $ ( 16,860 ) $ ( 73,045 ) $ ( 4,420 ) $ 50,078

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

2 unchanged sentences

MIND Technology, Inc., a Delaware corporation (the “Company”), formerly Mitcham Industries, Inc., a Texas corporation, was incorporated in 1987.

Effective August 3, 2020 the Company effectuated a reincorporation to the state of Delaware, name change to MIND Technology, Inc.

and increase in the number of shares of common stock and preferred stock authorized for issuance.

See Note 16 to the condensed consolidated financial statements.

The Company, through its wholly owned subsidiary, Seamap International Holdings Pte, Ltd.

Effective August 3, 2020 the Company effectuated a reincorporation to the state of Delaware.

Concurrent with the reincorporation the name of the Company was changed to MIND Technology, Inc.

and the number of shares of common stock and preferred stock authorized for issuance was increased.

See Note 16 - Corporate Restructuring, to the condensed consolidated financial statements.

The Company, through its wholly owned subsidiary, Seamap Pte, Ltd.

(“Seamap”), and its wholly owned subsidiary, Klein Marine Systems, Inc.

4 unchanged sentences

In February 2019 the Company sold its wholly owned Australian subsidiary Seismic Asia Pacific Pty Ltd (“SAP”).

See Note 14 to the condensed consolidated financial statements for more information.

See Note 14 - Sale of Subsidiaries to the condensed consolidated financial statements for more information.

All intercompany transactions and balances have been eliminated in consolidation.

During the second quarter of the fiscal year ending January 31, 2021 (“fiscal 2021”), management and the board of directors (the “Board”) of the Company determined to exit the land seismic leasing business, which comprises essentially all operations of the Equipment Leasing segment.

Accordingly, the results of operations for this segment are excluded from the Company’s continuing operations for fiscal 2021 and all comparative periods and presented as discontinued operations in the Company’s consolidated financial statements.

See Note 3 to the consolidated condensed financial statements for further details.

During the second quarter of the fiscal year ending January 31, 2021 (“fiscal 2021”), management and the board of directors (the “Board”) of the Company determined to exit the land seismic leasing business (the “Leasing Business”), which comprises essentially all operations of the Equipment Leasing segment.

See Note 3 - Assets Held for Sale and Discontinued Operations to the condensed consolidated financial statements for further details.

These condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

The Company has a history of losses, has had negative cash from operating activities in the last two years and may not have access to sources of capital that were available in prior periods.

In addition, the COVID-19 pandemic and the decline in oil prices during the first six months of fiscal 2021 have created substantial doubt and could have a material adverse effect on the Company’s business, financial position, results of operations and liquidity.

The Company has a history of losses, has had negative cash from operating activities in the last two fiscal years and may not have access to sources of capital that were available in prior periods.

In addition, the COVID-19 pandemic and the decline in oil prices during the first nine months of fiscal 2021 have created substantial doubt and could have a material adverse effect on the Company’s business, financial position, results of operations and liquidity.

Accordingly, substantial doubt has arisen regarding the Company’s ability to continue as a going concern.

5 unchanged sentences

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, 2020.

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 July 31, 2020, the results of operations for the three and six months ended July 31, 2020 and 2019, the cash flows for the six months ended July 31, 2020 and 2019, and the statement of shareholders’ equity for the three and six months ended July 31, 2020 and 2019, have been included in these condensed consolidated financial statements.

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, 2020, the results of operations for the three and nine months ended October 31, 2020 and 2019, the cash flows for the nine months ended October 31, 2020 and 2019, and the statement of shareholders’ equity for the three and nine months ended October 31, 2020 and 2019, 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, 2021.

Assets Held for Sale and Discontinued Operations

On July 27, 2020, the Board determined to exit the land seismic leasing business, which comprises essentially all operations of the Equipment Leasing segment.

As a result, the assets, excluding cash, and liabilities of the Equipment Leasing segment are considered held for sale and the segment’s operations are reported as discontinued operations as of July 31, 2020 and for all comparative periods presented in these condensed consolidated financial statements.

The Company anticipates selling the discontinued operations within the next twelve months in a single transaction, or multiple transactions, which may involve the sale of legal entities or assets.

On July 27, 2020, the Board determined to exit the Leasing Business, which comprises essentially all operations of the Equipment Leasing segment.

As a result, the assets, excluding cash, and liabilities of the Equipment Leasing segment are considered held for sale and the segment’s operations are reported as discontinued operations as of October 31, 2020 and for all comparative periods presented in these condensed consolidated financial statements.

The Company anticipates selling the discontinued operations within twelve months from July 27, 2020 in a single transaction, or multiple transactions, which may involve the sale of legal entities or assets.

The assets reported as held for sale consist of the following:

July 31, 2020 January 31, 2020

October 31, 2020 January 31, 2020

Current assets of discontinued operations:

5 unchanged sentences

The liabilities reported as held for sale consist of the following:

July 31, 2020 January 31, 2020

October 31, 2020 January 31, 2020

Current liabilities of discontinued operations:

4 unchanged sentences

Total liabilities of discontinued operations 1,133 2,730

The results of operations from discontinued operations for the three and six months ended July 31, 2020 and 2019, consist of the following:

For the Three Months Ended July 31, For the Six Months Ended July 31,

The results of operations from discontinued operations for the three and nine months ended October 31, 2020 and 2019, consist of the following:

For the Three Months Ended October 31, For the Nine Months Ended October 31,

2020 2019 2020 2019

15 unchanged sentences

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

For the Six Months Ended July 31,

For the Nine Months Ended October 31,

Depreciation and amortization $ 1,771 $ 3,651

3 unchanged sentences

Sale of used lease pool equipment $ 2,010 $ 1,415

Sale of assets held for sale $ 734 $ —

Purchase of seismic equipment held for lease $ ( 110 ) $ ( 1,938 )

New Accounting Pronouncements

In December 2019, the FASB issued ASU No.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2019-12, Income Taxes (“Topic 740”):

14 unchanged sentences

The Company adopted the SEC’s amendment to interim disclosures in the first quarter of fiscal 2020 and has presented the changes in shareholders’ equity on an interim basis.

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) as modified by subsequently issued ASUs 2018-01, 2018-10, 2018-11 and 2018-20.

1 unchanged sentence

We have elected to apply the current period transition approach as introduced by ASU 2018-11 for our transition at February 1, 2019 and we have elected to apply several of the practical expedients in conjunction with accounting policy elections.

See Note 7 to our condensed consolidated financial statements for additional details.

See Note 7 - Leases to our condensed consolidated financial statements for additional details.

In August 2018, the FASB issued ASU No.

11 unchanged sentences

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

Three Months Ended July 31, Six Months Ended July 31,

Three Months Ended October 31, Nine Months Ended October 31,

2020 2019 2020 2019

15 unchanged sentences

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

Three Months Ended July 31, Six Months Ended July 31,

Three Months Ended October 31, Nine Months Ended October 31,

2020 2019 2020 2019

6 unchanged sentences

Total revenue from contracts with customers $ 6,541 $ 8,312 $ 14,814 $ 21,039

As of July 31, 2020, and January 31, 2020, contract assets and liabilities consisted of the following:

July 31, 2020 January 31, 2020

As of October 31, 2020, and January 31, 2020, contract assets and liabilities consisted of the following:

October 31, 2020 January 31, 2020

Contract Assets:

7 unchanged sentences

Considering the products manufactured and sold by the businesses in our Marine Technology Products segment and the Company’s standard contract terms and conditions, we expect our contract assets and liabilities to turn over, on average, within a period of three to six months .

Pursuant to practical expedients and exemptions included in the New Revenue Standard, sales and transaction-based taxes are excluded from revenue.

Pursuant to practical expedients and exemptions included in ASU 2014-09, Revenue from Contracts with Customers, sales and transaction-based taxes are excluded from revenue.

Also, we do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

2 unchanged sentences

Balance Sheet

As of July 31, 2020 As of January 31, 2020

As of October 31, 2020 As of January 31, 2020

Current Long-term Total Current Long-term Total

2 unchanged sentences

Accounts receivable net of allowance for doubtful accounts $ 5,609 $ — $ 5,609 $ 6,623 $ — $ 6,623

July 31, 2020 January 31, 2020

October 31, 2020 January 31, 2020

(in thousands)

5 unchanged sentences

Total inventories, net $ 11,880 $ 12,656

July 31, 2020 January 31, 2020

October 31, 2020 January 31, 2020

(in thousands)

9 unchanged sentences

Subsequent to January 31, 2020, there was a significant deterioration in macroeconomic factors and a decline in the market value of the Company’s equity securities which indicated possible impairment of long-lived assets.

However, an analysis of the estimated recoverable value of these long-lived assets indicated that there was no impairment.

In February 2016, the FASB issued ASU No.

11 unchanged sentences

The Company adopted the New Lease Standard effective February 1, 2019.

We elected to apply the current period transition approach as introduced by ASU 2018-11 and we elected to apply the following practical expedients and accounting policy decisions.

We elected a package of transition expedients, which must be elected together, that allowed us to forgo reassessing certain conclusions reached under ASC 840.

We elected to apply the current period transition approach as introduced by ASU 2018-11 and we elected a package of transition expedients, which must be elected together, that allowed us to forgo reassessing certain conclusions reached under ASC 840.

All expedients in this package were applied together for all leases that commenced before the effective date, February 1, 2019, of the adoption of the New Lease Standard.

As a result, in transitioning to the New Lease Standard, for existing leases as of February 1, 2019, we continued to use judgments made under ASC 840 related to embedded leases, lease classification and accounting for initial direct costs.

In addition, we have chosen, as an accounting policy election by class of underlying asset, not to separate non-lease components from the

associated lease for all our leased asset classes, excluding for Real Estate related leases.

As a result, for classes of Automobiles, Office Equipment and Manufacturing Equipment, we account for each separate lease component and the non-lease components associated with that lease as a single lease component.

In addition, we have chosen, as an accounting policy election by class of underlying asset, not to separate non-lease components from the associated lease for all our leased asset classes, excluding for Real Estate related leases.

As a result, for classes

of Automobiles, Office Equipment and Manufacturing Equipment, we account for each separate lease component and the non-lease components associated with that lease as a single lease component.

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

2 unchanged sentences

The new standard did not have a material impact on our consolidated statements of operations or our statements of cash flows.

Lease expense for the three and six months ended July 31, 2020 was approximately $ 221,000 and $ 514,000 , respectively, and was recorded as a component of operating loss.

Included in these costs was short-term lease expense of approximately $ 10,000 and $ 10,000 , respectively, for the three and six months ended July 31, 2020.

Supplemental balance sheet information related to leases as of July 31, 2020 was as follows (in thousands):

Lease July 31, 2020 January 31, 2020

Lease expense for the three and nine months ended October 31, 2020 was approximately $ 313,000 and $ 828,000 , respectively, and was recorded as a component of operating loss.

Included in these costs was short-term lease expense of approximately $ 10,000 and $ 20,000 , respectively, for the three and nine months ended October 31, 2020.

Supplemental balance sheet information related to leases as of October 31, 2020 was as follows (in thousands):

Lease October 31, 2020 January 31, 2020

Operating lease assets

7 unchanged sentences

Total Operating lease liabilities $ 1,363 $ 2,300

Lease-term and discount rate details as of July 31, 2020 were as follows:

Lease term and discount rate July 31, 2020 January 31, 2020

Lease-term and discount rate details as of October 31, 2020 were as follows:

Lease term and discount rate October 31, 2020 January 31, 2020

Weighted average remaining lease term (years)

5 unchanged sentences

Supplemental cash flow information related to leases was as follows (in thousands):

Lease Six Months Ended July 31, 2020 Six Months Ended July 31, 2019

Lease Nine Months Ended October 31, 2020 Nine Months Ended October 31, 2019

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

3 unchanged sentences

Operating leases

Maturities of lease liabilities at July 31, 2020 were as follows (in thousands):

July 31, 2020

Maturities of lease liabilities at October 31, 2020 were as follows (in thousands):

October 31, 2020

Thereafter 20

3 unchanged sentences

Goodwill and Other Intangible Assets

Weighted Average Life at 7/31/2020 July 31, 2020 January 31, 2020

Weighted Average Life at 10/31/2020 October 31, 2020 January 31, 2020

Amount Accumulated

12 unchanged sentences

Based on a review of qualitative factors at that time, it was determined it was more likely than not that the fair value of our Seamap reporting unit was greater than its carrying value.

Based on a review of qualitative and quantitative factors at that time, it was determined it was more likely than not that the fair value of our Klein reporting unit was not greater than its carrying value.

Based on a review of qualitative and quantitative factors at that time, it was determined it was more likely than not that the fair value of our Klein reporting unit was less than it's carrying value.

Accordingly, we recorded an impairment of approximately $ 760,000 related to indefinite lived intangible assets in the Klein reporting unit as of January 31, 2020.

2 unchanged sentences

The impairment of goodwill indicated a possible impairment of other intangible assets.

Accordingly, the Company completed a quantitative analysis of the other intangible assets noting that the undiscounted future cash flows exceeded their carrying value and no related impairment has been recorded.

During the three months ended July 31, 2020 there have been no substantive indicators of additional impairment.

Aggregate amortization expense was $ 794,000 and $ 764,000 for the six months ended July 31, 2020 and 2019, respectively.

As of July 31, 2020, future estimated amortization expense related to amortizable intangible assets was estimated to be (in thousands):

Accordingly, the Company completed a quantitative analysis of the other intangible assets as of April 30, 2020, noting that the undiscounted future cash flows exceeded their carrying value and no related impairment was recorded.

Subsequent to April 30, 2020 there have been no substantive indicators of additional impairment.

Aggregate amortization expense was $ 1.3 million and $ 1.3 million for the nine months ended October 31, 2020 and 2019, respectively.

As of October 31, 2020, future estimated amortization expense related to amortizable intangible assets was estimated to be (in thousands):

For fiscal years ending January 31

2 unchanged sentences

Notes Payable

On May 5, 2020, the Company, together with its wholly owned subsidiary, Klein Marine Systems, Inc.

(collectively, the “Borrowers”), were granted loans (the “Loans”) from Bank of America, N.A.

in the aggregate amount of approximately $ 1.6 million, pursuant to the Paycheck Protection Program (the “PPP”), a component of the CARES Act which was enacted on March 27, 2020.

On May 5, 2020, the Company, and its wholly owned subsidiary, Klein (collectively, the “Borrowers”), were granted loans (the “Loans”) from Bank of America, N.A.

in the aggregate amount of approximately $ 1.6 million, pursuant to the Small Business Association's Paycheck Protection Program (the “PPP”), a component of the Coronavirus Aid, Relief, and Economic Security Act which was enacted on March 27, 2020.

The Loans, in the form of promissory notes (the “Notes”) dated May 1, 2020 issued by the Borrowers, mature on May 1, 2022 and bear interest at a rate of 1 % per annum, payable monthly commencing on November 1, 2020.

4 unchanged sentences

In addition, certain amounts of the Loan may be forgiven if the funds are used to pay qualifying expenses.

The Company believes it has used the proceeds from the Loans to pay qualifying expenses and that a significant portion of the Loans will be forgiven pursuant to the terms of the PPP, but cannot ensure that the Loans will be forgiven, in whole or in part.

For the six months ended July 31, 2020, the benefit for income taxes from continuing operations was approximately $ 188,000 on a pre-tax net loss from continuing operations of $ 8.5 million.

For the six months ended July 31, 2019, the benefit for income taxes from continuing operations was approximately $ 44,000 on a pre-tax net loss of $ 3.7 million.

The Company believes it has used the proceeds from the Loans to pay qualifying expenses and that a significant portion of the Loans will be forgiven pursuant to the terms of the PPP.

The Company has submitted applications for the forgiveness of the Loans but cannot ensure that the Loans will be forgiven, in whole or in part.

For the nine months ended October 31, 2020, the benefit for income taxes from continuing operations was approximately $ 79,000 on a pre-tax net loss from continuing operations of $ 10.8 million.

For the nine months ended October 31, 2019, the benefit for income taxes from continuing operations was approximately $ 75,000 on a pre-tax net loss of $ 5.1 million.

The variance between our actual provision and the expected provision based on the U.S.

5 unchanged sentences

In addition, the Company's tax returns filed in foreign jurisdictions are generally subject to examination for the fiscal years ended January 31, 2015 through 2020.

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 July 31, 2020.

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, 2020.

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 July 31, 2020.

For the six months ended July 31, 2020 and 2019, the Company did not recognize any tax expense or benefit related to uncertain tax positions.

Therefore, the Company has not recorded a deferred tax liability associated with the undistributed foreign earnings as of October 31, 2020.

For the nine months ended October 31, 2020 and 2019, the Company did not recognize any tax expense or benefit related to uncertain tax positions.

Earnings per Share

3 unchanged sentences

The following table presents the calculation of basic and diluted weighted average common shares used in the earnings per share calculation:

Three Months Ended July 31, Six Months Ended July 31,

Three Months Ended October 31, Nine Months Ended October 31,

2020 2019 2020 2019

5 unchanged sentences

Diluted weighted average common shares outstanding 12,400 12,204 12,257 12,217

For the three and six months ended July 31, 2020 and 2019, potentially dilutive common shares, underlying stock options and unvested restricted stock were anti-dilutive and were therefore not considered in calculating diluted loss per share for those periods.

For the three and nine months ended October 31, 2020 and 2019, potentially dilutive common shares, underlying stock options and unvested restricted stock were anti-dilutive and were therefore not considered in calculating diluted loss per share for those periods.

Related Party Transaction

1 unchanged sentence

(the “Agent”).

On December 18, 2019, the Company and Agent entered into an Amended and Restated equity distribution agreement (the “Equity Distribution

Pursuant to the Equity Distribution Agreement, the Company may sell up to 500,000 shares of 9.00 % Series A Cumulative Preferred Stock (the “Preferred Stock”), par value $ 1.00 per share through an at-the-market (“ATM”) offering program administered by the Agent.

On December 18, 2019, the Company and Agent entered into an Amended and Restated equity distribution agreement (the “1 st Equity Distribution Agreement”).

Pursuant to the 1 st Equity Distribution Agreement, the Company may sell up to 500,000 shares of 9.00 % Series A Cumulative Preferred Stock (the “Preferred Stock”), par value $ 1.00 per share through an at-the-market (the “1 st ATM”) offering program administered by the Agent.

The Co-Chief Executive Officer and Co-President of the Agent is the Non-Executive Chairman of the Board.

Under the Equity Distribution Agreement, the Agent will be entitled to compensation of up to 2.0 % of the gross proceeds from the sale of Preferred Stock under the ATM offering program.

As of January 31, 2020, we had issued 994,046 shares of our Series A Preferred Stock.

The 994,046 shares represent 100 % of the Series A Preferred Stock available for sale through our ATM offering program and therefore no shares were available for issuance subsequent to January 31, 2020.

For the three and six months ended July 31, 2019, the Company issued 70,282 and 86,938 shares of Preferred Stock under the ATM offering program, respectively.

Gross proceeds from these sales for the three and six months ended July 31, 2019 were approximately $ 1.7 million and $ 2.1 million, respectively, and the Agent received compensation of approximately $ 34,000 and $ 42,000 , respectively.

Under the 1 st Equity Distribution Agreement, the Agent was entitled to compensation of up to 2.0 % of the gross proceeds from the sale of Preferred Stock under the 1 st ATM offering program.

As of January 31, 2020, we had issued 994,046 shares which represent 100 % of the Series A Preferred Stock available for sale through the 1 st Equity Distribution Agreement.

For the three and nine months ended October 31, 2019, the Company issued 70,282 and 86,938 shares of Preferred Stock under the 1 st ATM offering program, respectively.

Gross proceeds from these sales for the three and nine months ended October 31, 2019 were approximately $ 1.7 million and $ 2.1 million, respectively, and the Agent received compensation of approximately $ 34,000 and $ 42,000 , respectively.

The Non-Executive Chairman of the Board received no portion of this compensation.

In September 2020 we entered into a new equity distribution agreement (the “2 nd Equity Distribution Agreement”) with the Agent with economic terms essentially identical to the initial agreement.

Pursuant to the 2 nd Equity Distribution Agreement, the Company may sell up to 500,000 shares of Preferred Stock and 5,000,000 shares of $ 0.01 par value common stock (“Common Stock”) through a new at-the-market (the “2 nd ATM”) offering program.

During the three months ended October 31, 2020 the Company sold 676,283 shares of Common Stock under the ATM program, resulting in net proceeds to the Company of approximately $ 1.3 million.

Compensation to the Agent during this period was approximately $ 30,500 , none of which was received by the Non-Executive Chairman of the Board.

Equity and Stock-Based Compensation

During the three months ended July 31, 2020, the Board declared quarterly dividends of $ 0.5625 per share for our Preferred Stock.

The Board did not approve the grant of any non-qualified stock options or shares of restricted stock during the second quarter of fiscal 2021.

Total compensation expense recognized for stock-based awards granted under the Company’s equity incentive plan during the three and six months ended July 31, 2020 was approximately $ 219,000 and $ 449,000 , respectively, and during the three and six months ended July 31, 2019 was approximately $ 169,000 and $ 341,000 , respectively.

During the three months ended October 31, 2020, the Board declared quarterly dividends of $ 0.5625 per share for our Preferred Stock.

The Board also approved the grant of 70,000 non-qualified stock options during the third quarter of fiscal 2021 at an average option price of $ 2.27 per share.

Total compensation expense recognized for stock-based awards granted under the Company’s equity incentive plan during the three and nine months ended October 31, 2020 was approximately $ 113,000 and $ 562,000 , respectively, and during the three and nine months ended October 31, 2019 was approximately $ 270,000 and $ 612,000 , respectively.

Sale of Subsidiaries

2 unchanged sentences

dollars of which the Company received approximately $ 240,000 in cash at closing and an unsecured, non-interest bearing two year note receivable in the amount of $ 420,000 .

The agreement also included a working capital adjustment of approximately $ 114,000 payable to the Company.

We received payment of the working capital adjustment in August of 2019.

The note receivable was recorded as other current assets as of July 31, 2020 and as other non-current assets as of January 31, 2020.

The agreement also included a working capital adjustment of approximately $ 114,000 payable to the Company which was received in August of 2019.

The note receivable was recorded as other current assets as of October 31, 2020 and as other non-current assets as of January 31, 2020.

During the three months ended October 31, 2020 the Company received a prepayment of $ 125,000 related to the note.

Segment Reporting

2 unchanged sentences

Manufacturing, support and sales facilities are maintained in the United Kingdom, Singapore, Malaysia and the states of New Hampshire and Texas.

Subsequent Event

On August 3, 2020, the Company, formerly Mitcham Industries, Inc., completed the reincorporation of the Company from the State of Texas to the State of Delaware, including a name change to MIND Technology, Inc..

The change in legal domicile and company name were approved by the affirmative vote of the holders of more than two-thirds of the votes of the Company’s common stock and Series A Preferred Stock, voting separately, at the Annual Meeting of Shareholders held on July 27, 2020.

As part of the reincorporation merger, the shareholders approved an increase in the number of authorized shares of capital stock from 21,000,000 shares to 42,000,000 shares, consisting of (i) 40,000,000 shares of Company’s common stock (up from 20,000,000 shares), and (ii) 2,000,000 shares of the Company’s preferred stock, par value $ 1.00 per share (up from 1,000,000 shares).

Pursuant to the terms of the reincorporation merger, each outstanding share of common stock and each share of Series A Preferred Stock of Mitcham Industries, Inc., the Texas corporation, automatically converted into one share of common stock and one share of Series A Preferred Stock, respectively, of MIND Technology, Inc., the Delaware corporation.

Corporate Restructuring

On August 3, 2020, the Company, formerly Mitcham Industries, Inc., completed the reincorporation from the State of Texas to the State of Delaware, including a name change to MIND Technology, Inc.

The change in legal domicile and company name were approved by the affirmative vote of the holders of more than two-thirds of the votes of the Company’s Common Stock and Preferred Stock, voting separately, at the Annual Meeting of Shareholders held on July 27, 2020.

As part of the reincorporation merger, the shareholders approved an increase in the number of authorized shares of capital stock from 21,000,000 shares to 42,000,000 shares, consisting of (i) 40,000,000 shares of Common Stock (up from 20,000,000 shares), and (ii) 2,000,000 shares of Preferred Stock(up from 1,000,000 shares).

Pursuant to the terms of the reincorporation merger, each outstanding share of Common Stock and each share of Preferred Stock of Mitcham Industries, Inc., the Texas corporation, automatically converted into one share of Common Stock and one share of Series A Preferred Stock, respectively, of MIND Technology, Inc., the Delaware corporation.

Stockholders who hold physical stock certificates are not required to, but may, exchange stock certificates as a result of the reincorporation.

The Company’s common stock and Series A Preferred Stock continued to trade on the NASDAQ Global Select Market under their ticker symbols, “MIND” and “MINDP”, respectively.

The Company’s common stock was assigned a new CUSIP number of 602566 101 and the Company’s Series A Preferred Stock was assigned a new CUSIP number of 602566 200.

The Company’s Common Stock and Preferred Stock continued to trade on the NASDAQ Global Select Market under their ticker symbols, “MIND” and “MINDP”, respectively.

The Company’s Common Stock was assigned a new CUSIP number of 602566 101 and the Company’s Preferred Stock was assigned a new CUSIP number of 602566 200.

No changes have been made to the Board, management, business or operations of the Company as a result of the reincorporation.

The corporate headquarters will remain in Texas.

The Company’s corporate headquarters remains in Texas.

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

13 unchanged sentences

• 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;

• local and global impacts of the COVID-19 virus, including effects of responses of governmental authorities and companies to reduce the spread of COVID-19, such as shutdowns, travel restrictions and work-from-home mandates;

8 unchanged sentences

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, 2020, and (3) the Company’s other filings filed with the SEC from time to time.

Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2020, (3) Part II,“Item 1A.

Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended July 31, 2020 and (4) 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.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements