3 unchanged sentences
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.
−Removed: Management has identified a material weakness involving the Company's review controls over significant estimates.
−Removed: The Company failed to detect an error related to our provision for doubtful accounts identified by the Company’s auditors during the audit of our financial statements for the fiscal year ended January 31, 2020.
−Removed: As described below, the Company will implement changes to internal control procedures intended to ensure that accounting estimates will be based on relevant, sufficient and reliable data which is adequately reviewed and approved by appropriate levels of authority to ensure such estimates are reasonable and appropriate.
−Removed: Notwithstanding the material weakness described above, the Company's management, including our principal executive officers and principal financial officer, have concluded that the financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, the Company's financial position, results of operations, and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.
+Added: Our principal executive officers and principal financial officer have concluded that our current disclosure controls and procedures were effective as of January 31, 2021 at the reasonable assurance level.
Management’s Report on Internal Control Over Financial Reporting
4 unchanged sentences
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
−Removed: As required by Rule 13a-15(c) under the Exchange Act, our management, including our principal executive officers and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of January 31, 2020.
−Removed: In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Integrated Framework in 2013.
−Removed: Based on this assessment, our management, including our principal executive officers and principal financial officer, identified a material weakness involving the Company's review controls over significant estimates.
+Added: As disclosed in Part II Item 9A Controls and Procedures in our Annual Report on Form 10-K for the fiscal year ended January 31, 2020, during which we identified a material weakness in internal control involving the Company’s review controls over significant estimates.
The Company failed to detect an error related to our provision for doubtful accounts identified by the Company’s auditors during the audit of our financial statements for the fiscal year ended January 31, 2020.
−Removed: Solely as a result of such material weakness, the Company’s executive officers determined that the Company’s internal control over financial reporting was not effective at the reasonable assurance level as of January 31, 2020.
Remediation Plan for the Material Weakness in Internal Control over Financial Reporting
−Removed: To address the material weakness regarding the failure to detect an error in significant estimates, the Company will do the following:
−Removed: Reinforce the importance of proper significant estimates through policy statements, regular communication and in periodic reviews and meetings with managers and staff;
−Removed: Establish policies and procedures to ensure the accumulation of relevant, sufficient, and reliable data on which to base significant estimates;
−Removed: Ensure adequate review and approval of the significant estimates by appropriate levels of authority, including the source of relevant factors, development of assumptions and the reasonableness of assumptions and resulting estimates;
−Removed: Perform comparison of prior significant estimates with subsequent results to assess the reliability of the process used to develop significant estimates;
+Added: During fiscal 2021, management implemented our previously disclosed remediation plan that included:
+Added: • Reinforcing the importance of proper significant estimates through policy statements, regular communication and in periodic reviews and meetings with managers and staff;
+Added: • Establishing policies and procedures to ensure the accumulation of relevant, sufficient, and reliable data on which to base significant estimates;
+Added: • Ensuring adequate review and approval of the significant estimates by appropriate levels of authority, including the source of relevant factors, development of assumptions and the reasonableness of assumptions and resulting estimates;
+Added: • Performing comparison of prior significant estimates with subsequent results to assess the reliability of the process used to develop significant estimates;
• Consideration by management of whether the resulting significant estimate is consistent with the operational plans of the entity.
−Removed: The Company anticipates the actions described above and resulting improvements in controls will strengthen the Company's processes, procedures and controls related to significant estimates and will address the related material weakness described above.
−Removed: However, the material weakness cannot be considered fully remediated until the remediation processes have been in operation for a period of time and successfully tested.
−Removed: Index to Financial Statements
+Added: As required by Rule 13a-15(c) under the Exchange Act, our management, including our principal executive officers and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of January 31, 2021.
+Added: In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Integrated Framework in 2013.
+Added: Based on this assessment, our management, including our principal executive officers and principal financial officer, concluded that, as of January 31, 2021, our internal control over financial reporting was effective based on those criteria.
+Added: As a result we have concluded the material weakness has been remediated as of January 30, 2021.
Changes in Internal Control over Financial Reporting
−Removed: Except for the material weakness discussed above, there was no change in our system of internal control over financial reporting during the quarter ended January 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
+Added: Except for the changes in connection with our implementation of the remediation plan discussed above, there was no change in our system of internal control over financial reporting during the quarter ended January 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Other Information
1 unchanged sentence
Directors, Executive Officers and Corporate Governance
−Removed: Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2020 Annual Meeting of Shareholders, which will be filed with the SEC within 120 business days of January 31, 2020.
+Added: Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC within 120 business days of January 31, 2021.
We have adopted a Code of Business Conduct and Ethics, which covers a wide range of business practices and procedures.
The Code of Business Conduct and Ethics represents the code of ethics applicable to our principal executive officers, principal financial officer, and principal accounting officer or controller and persons performing similar functions (“senior financial officers”).
−Removed: A copy of the Code of Business Conduct and Ethics is available on our website, http://www.mitchamindustries.com , and a copy will be mailed without charge, upon written request, to Mitcham Industries, Inc., 2002 Timberloch Place, Suite 400, The Woodlands, Texas, 77380, Attention:
−Removed: We intend to disclose any amendments to or waivers of the Code of Business Conduct and Ethics on behalf of our senior financial officers on our website, at http://www.mitchamindustries.com promptly following the date of the amendment or waiver.
+Added: A copy of the Code of Business Conduct and Ethics is available on our website, https://www.mind-technology.com , and a copy will be mailed without charge, upon written request, to MIND Technology, Inc., 2002 Timberloch Place, Suite 400, The Woodlands, Texas, 77380, Attention:
+Added: We intend to disclose any amendments to or waivers of the Code of Business Conduct and Ethics on behalf of our senior financial officers on our website, at https://www.mind-technology.com promptly following the date of the amendment or waiver.
Executive Compensation
−Removed: Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2020 Annual Meeting of Shareholders, which will be filed with the SEC within 120 business days of January 31, 2020.
−Removed: Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
−Removed: Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2020 Annual Meeting of Shareholders, which will be filed with the SEC within 120 business days of January 31, 2020.
+Added: Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC within 120 business days of January 31, 2021.
+Added: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
+Added: Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC within 120 business days of January 31, 2021.
Certain Relationships and Related Transactions and Director Independence
−Removed: Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2020 Annual Meeting of Shareholders, which will be filed with the SEC within 120 business days of January 31, 2020.
+Added: Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC within 120 business days of January 31, 2021.
Principal Accounting Fees and Services
−Removed: Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2020 Annual Meeting of Shareholders, which will be filed with the SEC within 120 business days of January 31, 2020.
+Added: Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2021 Annual Meeting of Stockholders, which will be filed with the SEC within 120 business days of January 31, 2021.
Index to Financial Statements
Exhibits, Financial Statement Schedules
−Removed: List of Documents Filed
−Removed: Financial Statements
+Added: (a) List of Documents Filed
+Added: (i) Financial Statements
The financial statements filed as part of this Form 10-K are listed in “Index to Consolidated Financial Statements” on page F-l.
−Removed: Financial Statement Schedules
+Added: (ii) Financial Statement Schedules
Schedule II – Valuation and Qualifying Accounts.
+Added: (iii) Exhibits
The exhibits required by Item 601 of Regulation S-K are listed in subparagraph (b) below.
1 unchanged sentence
The exhibits marked with the asterisk symbol (*) are management contracts or compensatory plans or arrangements filed pursuant to Item 601(b)(10)(iii) of Regulation S-K.
−Removed: Document Description
−Removed: Report or Registration Statement
−Removed: Amended and Restated Articles of Incorporation of Mitcham Industries, Inc.
−Removed: Incorporated by reference to Mitcham Industries, Inc.’s Registration Statement on Form S-8, filed with the SEC on August 9, 2001.
−Removed: Third Amended and Restated Bylaws of Mitcham Industries, Inc.
−Removed: Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on August 2, 2010.
−Removed: Certificate of Designations of Mitcham Industries, Inc.
−Removed: setting forth the Designation, Maturity, Ranking, Dividends, Liquidity Preference, Redemption, Conversion Rights, Voting Rights, Information Rights and Preemptive Rights of Series A Cumulative Preferred Stock, dated June 8, 2016.
−Removed: Incorporated by reference to Mitcham Industries, Inc.’s Form 8-K filed with the SEC on June 10, 2016.
−Removed: Certificate of Amendment to Certificate of Designations of Mitcham Industries, Inc.
−Removed: setting forth the Designation, Maturity, Ranking, Dividends, Liquidity Preference, Redemption, Conversion Rights, Voting Rights, Information Rights and Preemptive Rights of Series A Cumulative Preferred Stock, dated October 7, 2016
−Removed: Incorporated by reference to Mitcham Industries, Inc.’s Form 8-K filed with the SEC on October 7, 2016.
−Removed: Certificate of Second Amendment to Certificate of Designations of Mitcham Industries, Inc.
−Removed: setting forth the Designation, Maturity, Ranking, Dividends, Liquidity Preference, Redemption, Conversion Rights, Voting Rights, Information Rights and Preemptive Rights of Series A Cumulative Preferred Stock, dated February 7, 2018
−Removed: Incorporated by reference to Mitcham Industries, Inc.’s Form 8-K filed with the SEC on February 12, 2018.
+Added: Number Document Description Report or Registration Statement SEC File or
+Added: Number Exhibit
+Added: 1.1 Equity Distribution Agreement, dated as of September 25, 2020, by and between MIND Technology, Inc.
+Added: and Ladenburg Thalmann & Co.
+Added: Incorporated by reference to MIND Technology, Inc.’s Form 8-K filed with the SEC on September 25, 2020.
+Added: 001-13490 1.1
+Added: 2.1 Agreement and Plan of Merger dated as of August 3, 2020, by and between Mitcham Industries, Inc.
+Added: and MIND Technology, Inc.
+Added: Incorporated by reference to MIND Technology, Inc.’s Current Report on Form 8-K, filed with the SEC on August 7, 2020.
+Added: 001-13490 2.1
+Added: 3.1 Amended and Restated Certificate of Incorporation of MIND Technology, Inc.
+Added: Incorporated by reference to MIND Technology, Inc.’s Current Report on Form 8-K, filed with the SEC on August 7, 2020.
+Added: 3.2 Amended and Restated Bylaws of MIND Technology, Inc.
+Added: Incorporated by reference to MIND Technology, Inc.’s Current Report on Form 8-K, filed with the SEC on August 7, 2020.
+Added: 001-13490 3.4
+Added: 3.3 Certificate of Designations, Preferences and Rights of MIND Technology, Inc.
+Added: 9.00% Series A Cumulative Preferred Stock
+Added: Incorporated by reference to MIND Technology, Inc.’s Current Report on Form 8-K, filed with the SEC on August 7, 2020.
+Added: 001-13490 3.5
+Added: 3.4 Certificate of Amendment of Certificate of Designations, Preferences and Rights of MIND Technology, Inc.
+Added: 9.00% Series A Cumulative Preferred Stock
+Added: Incorporated by reference to MIND Technology, Inc.’s Form 8-K filed with the SEC on September 25, 2020.
+Added: 001-13490 3.1
+Added: 3.5 Texas Certificate of Merger, effective as of August 3, 2020
+Added: Incorporated by reference to MIND Technology, Inc.’s Current Report on Form 8-K, filed with the SEC on August 7, 2020.
+Added: 001-13490 3.1
+Added: 3.6 Delaware Certificate of Merger, effective as of August 3, 2020
+Added: Incorporated by reference to MIND Technology, Inc.’s Current Report on Form 8-K, filed with the SEC on August 7, 2020 001-13490 3.2
Index to Financial Statements
−Removed: Document Description
−Removed: Report or Registration Statement
+Added: Number Document Description Report or Registration Statement SEC File or
+Added: Number Exhibit
4.1 Form of Senior Indenture (including Form of Senior Note)
Incorporated by reference to Mitcham Industries, Inc.’s Registration Statement on Form S-3, filed with the SEC on March 18, 2011.
+Added: 333-172935 4.1
4.2 Form of Subordinated Indenture (including form of Subordinated Note)
Incorporated by reference to Mitcham Industries, Inc.’s Registration Statement on Form S-3, filed with the SEC on March 18, 2011.
−Removed: Description of Securities
−Removed: Amended and Restated Employment Agreement, dated September 8, 2015, between Mitcham Industries, Inc.
−Removed: Incorporated by reference to Mitcham Industries, Inc.’s Registration Statement on Form 8-K filed with the SEC on September 14, 2015.
+Added: 333-172935 4.2
+Added: Description of Description of Securities
10.1* Mitcham Industries, Inc.
1 unchanged sentence
Incorporated by reference to Mitcham Industries, Inc.’s Definitive Proxy Statement on Schedule 14A filed with the SEC on May 31, 2013.
+Added: 000-25142 Appendix A
10.2* First Amendment to the Mitcham Industries, Inc.
1 unchanged sentence
Incorporated by reference to Mitcham Industries, Inc.’s Definitive Proxy Statement on Schedule 14A filed with the SEC on May 16, 2016.
+Added: 000-25142 Appendix A
10.3* Second Amendment to the Mitcham Industries, Inc.
1 unchanged sentence
Incorporated by reference to Mitcham Industries, Inc.’s Form S-8 filed with the SEC on September 5, 2019.
+Added: 333-233635 4.5
10.4* Form of Nonqualified Stock Option Agreement under the Mitcham Industries, Inc.
1 unchanged sentence
Incorporated by reference to Mitcham Industries, Inc.’s Report on Form 10-Q for the quarter ended July 31, 2006, filed with the SEC on September 12, 2006.
+Added: 000-25142 10.3
10.5* Form of Restricted Stock Agreement under the Mitcham Industries, Inc.
1 unchanged sentence
Incorporated by reference to Mitcham Industries, Inc.’s Report on Form 10-Q for the quarter ended July 31, 2006, filed with the SEC on September 12, 2006.
+Added: 000-25142 10.4
10.6* Form of Incentive Stock Option Agreement under the Mitcham Industries, Inc.
1 unchanged sentence
Incorporated by reference to Mitcham Industries, Inc.’s Report on Form 10-Q for the quarter ended July 31, 2006, filed with the SEC on September 12, 2006.
+Added: 000-25142 10.5
10.7* Form of Restricted Stock Agreement (Stock Awards Plan)
Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on September 8, 2004.
+Added: 000-25142 10.1
10.8* Form of Nonqualified Stock Option Agreement (Stock Awards Plan)
Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on September 8, 2004.
+Added: 000-25142 10.2
10.9* Form of Incentive Stock Option Agreement (Stock Awards Plan)
Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on September 8, 2004.
−Removed: Index to Financial Statements
−Removed: Document Description
−Removed: Report or Registration Statement
+Added: 000-25142 10.4
10.10* Form of Phantom Stock Award Agreement (Stock Awards Plan)
Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on September 8, 2004.
+Added: 000-25142 10.5
+Added: Index to Financial Statements
+Added: Number Document Description Report or Registration Statement SEC File or
+Added: Number Exhibit
10.11* Form of Stock Appreciation Rights Agreement (Stock Awards Plan)
Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on September 8, 2004.
+Added: 000-25142 10.6
10.12* Form of Incentive Stock Option Agreement (2000 Stock Option Plan)
Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on September 8, 2004.
+Added: 000-25142 10.7
10.13* Form of Nonqualified Stock Option Agreement (2000 Stock Option Plan)
Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on September 8, 2004.
+Added: 000-25142 10.8
10.14†* Summary of Non-Employee Director Compensation
−Removed: Facilities Agreement dated 15 August, 2014 between Seamap Pte Ltd as Company and Mitcham Industries, Inc.
−Removed: as Guarantor and The HongKong and Shanghai Banking Corporation Limited as Lender
−Removed: Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2014.
−Removed: Security Deed dated 15 August, 2014 between Seamap Pte Ltd as Chargor and The HongKong and Shanghai Banking Corporation Limited as Lender
−Removed: Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2014.
−Removed: Amended and Restated Equity Distribution Agreement, dated as of December 18, 2019, by and between Mitcham Industries, Inc.
+Added: 10.15 Employment Agreement between the Company and Robert P.
+Added: Capps, dated September 11, 2017.
+Added: Incorporated by reference to Mitcham Industries, Inc.'s Current Report on Form 8-K, filed with the SEC on September 15, 2017.
+Added: 001-13490 10.1
+Added: 10.16 Employment Agreement between the Company and Guy M.
+Added: Malden, dated September 11, 2017.
+Added: Incorporated by reference to Mitcham Industries, Inc.'s Current Report on Form 8-K, filed with the SEC on September 15, 2017.
+Added: 001-13490 10.2
+Added: 10.17 Employment Agreement between the Company and Dennis P.
+Added: Morris, dated April 21, 2020.
+Added: Incorporated by reference to Mitcham Industries, Inc.'s Current Report on Form 8-K, filed with the SEC on April 24, 2020.
+Added: 001-13490 10.1
+Added: 10.18 Amendment No.
+Added: Malden's Employment Agreement (dated June 19, 2020)
+Added: Incorporated by reference to Mitcham Industries, Inc.'s Form 8-K, filed with the SEC on June 25, 2020.
+Added: 001-13490 10.1
+Added: 10.19 Amended and Restated Equity Distribution Agreement, dated as of September 25, 2020, by and between MIND Technology, Inc.
and Ladenburg Thalmann & Co.
−Removed: Incorporated by reference to Mitcham Industries, Inc.’s Current Report on Form 8-K, filed with the SEC on December 18, 2019.
−Removed: Ratio of Earnings to Fixed Charges
−Removed: Subsidiaries of Mitcham Industries, Inc.
+Added: Incorporated by reference to MIND Technology, Inc.’s Current Report on Form 8-K, filed with the SEC on September 25, 2020.
+Added: 001-13490 1.1
+Added: 21.1† Subsidiaries of MIND Technology, Inc.
23.1† Consent of Moss Adams LLP
6 unchanged sentences
Index to Financial Statements
−Removed: Document Description
−Removed: Report or Registration Statement
−Removed: XBRL Instance Document
−Removed: XBRL Taxonomy Extension Schema Document
−Removed: XBRL Taxonomy Extension Calculation of Linkbase Document
−Removed: XBRL Taxonomy Extension Definition Linkbase Document
−Removed: XBRL Taxonomy Extension Label Linkbase Document
−Removed: XBRL Taxonomy Extension Presentation Linkbase Document
+Added: Number Document Description Report or Registration Statement SEC File or
+Added: Number Exhibit
+Added: 101.INS† XBRL Instance Document
+Added: 101.SCH† XBRL Taxonomy Extension Schema Document
+Added: 101.CAL† XBRL Taxonomy Extension Calculation of Linkbase Document
+Added: 101.DEF† XBRL Taxonomy Extension Definition Linkbase Document
+Added: 101.LAB† XBRL Taxonomy Extension Label Linkbase Document
+Added: 101.PRE† XBRL Taxonomy Extension Presentation Linkbase Document
Form 10-K Summary
2 unchanged sentences
Pursuant to the requirements of Section 13 or 15(d) 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, on the 16th day of April 2021.
−Removed: MITCHAM INDUSTRIES, INC.
+Added: MIND TECHNOLOGY, INC.
/s/ ROBERT P.
4 unchanged sentences
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
−Removed: Title/Capacity
−Removed: /s/ GUY MALDEN
−Removed: Co-Chief Executive Officer, Executive Vice
+Added: Signature Title/Capacity Date
+Added: /s/ GUY MALDEN Co-Chief Executive Officer, Executive Vice
President – Marine Systems
2 unchanged sentences
/s/ ROBERT P.
−Removed: Co-Chief Executive Officer,
+Added: CAPPS Co-Chief Executive Officer,
Executive Vice President – Finance, Chief Financial Officer and Director
1 unchanged sentence
April 16, 2021
−Removed: Vice President of Finance and Accounting
+Added: COX Vice President of Finance and Accounting
(Principal Accounting Officer)
April 16, 2021
−Removed: Non-Executive Chairman of the Board of Directors
−Removed: April 28, 2020
−Removed: /s/ THOMAS GLANVILLE
−Removed: April 28, 2020
−Removed: Thomas Glanville
+Added: BLUM Non-Executive Chairman of the Board of Directors April 16, 2021
+Added: /s/ THOMAS S.
+Added: GLANVILLE Director April 16, 2021
/s/ ROBERT J.
−Removed: April 28, 2020
−Removed: /s/ MARCUS ROWLAND
−Removed: April 28, 2020
+Added: ALBERS Director April 16, 2021
+Added: /s/ MARCUS ROWLAND Director April 16, 2021
Marcus Rowland
/s/ WILLIAM H.
−Removed: April 28, 2020
+Added: HILARIDES Director April 16, 2021
Index to Financial Statements
4 unchanged sentences
Consolidated Statements of Comprehensive Loss for the Years Ended January 31, 202 1 and 20 20
−Removed: Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended January 31, 2020, 2019 and 2018
+Added: Consolidated Statements of Changes in S tock holders’ Equity for the Years Ended January 31, 202 1 and 20 20
Consolidated Statements of Cash Flows for the Years Ended January 31, 202 1 and , 20 20
2 unchanged sentences
Report of Independent Registered Public Accounting Firm
−Removed: To the Shareholders and the Board of Directors of
−Removed: Mitcham Industries, Inc.
+Added: To the Stockholders and the Board of Directors of
+Added: MIND Technology, Inc.
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of Mitcham Industries, Inc.
−Removed: and subsidiaries (the Company) as of January 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, shareholders’ equity and cash flows for each of the three years in the period ended January 31, 2020, and the related notes and schedule (collectively referred to as the consolidated financial statements).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of January 31, 2020 and 2019, and the consolidated results of its operations and its cash flows for each of the three years in the period ended January 31, 2020 , in conformity with accounting principles generally accepted in the United States of America.
−Removed: Going Concern Uncertainty
−Removed: The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
−Removed: As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations, had negative cash flows from operations totaling $5,800,000 and $5,500,000 during fiscal 2020 and 2019 and currently does not have additional preferred shares authorized to sell, which has been a significant source of equity financing during fiscal 2020, 2019 and 2018.
−Removed: Additionally, the Company had to temporarily close two of its manufacturing locations and experienced delays in shipping orders related to the COVID-19 pandemic in 2020.
−Removed: These factors raise substantial doubt about its ability to continue as a going concern.
−Removed: Management’s plans in regard to these matters are also described in Note 3.
−Removed: The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
−Removed: Change in Accounting Principle
−Removed: As discussed in Note 9 to the consolidated financial statements, the Company changed its method of accounting for accounting for leases in 2020 due to the adoption of Accounting Standards Codification Topic No.
+Added: We have audited the accompanying consolidated balance sheets of MIND Technology, Inc.
+Added: and subsidiaries (the “Company”) as of January 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the years then ended, and the related notes and schedule (collectively referred to as the “consolidated financial statements”).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of January 31, 2021 and 2020, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
12 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
+Added: Critical Audit Matters
+Added: The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Allowance for Doubtful Accounts
+Added: As described in Note 1 to the consolidated financial statements, the Company’s allowance for doubtful accounts reflects management’s estimate of the amounts that will not be collected, based on the age of the receivable, payment history of the customer, general industry conditions, general financial condition of the customer, and any financial or operational leverage the Company may have in a particular situation.
+Added: The evaluation of these factors requires that management make significant judgments regarding these factors, which may significantly impact the estimated reserve.
+Added: The allowance for doubtful accounts for continuing operations was $948,345 and for discontinued operations was $827,940 as of January 31, 2021.
+Added: We identified the allowance for doubtful accounts as a critical audit matter as auditing management’s determination of qualitative factors, including probability and range of loss, involved a high degree of auditor judgment given the highly subjective nature of management’s judgement.
+Added: The primary procedures we performed to address this critical audit matter included:
+Added: • Obtaining an understanding and evaluating the design of controls over the Company’s allowance for doubtful accounts review process.
+Added: • Obtaining an understanding of management’s process and methodology used to develop the estimate of allowance for doubtful accounts.
+Added: • Evaluating the reasonableness of qualitative factor judgments assessed by management and their correlation to potential losses.
+Added: • Evaluating collections subsequent to the balance sheet date in assessing the reasonableness of management’s estimate.
+Added: Index to Financial Statements
+Added: • Performing a retrospective review of the allowance comparing current year write-offs and reserves to amounts estimated in the prior year.
+Added: Inventory Reserves - Seamap
+Added: The Company's inventories totaled $11,453,000 net of inventory reserves of $1,363,000, as of January 31, 2021.
+Added: Included in these amounts related to Seamap were $9,034,700, net of inventory reserves of $1,150,602.
+Added: As explained in Note 1 to the consolidated financial statements, the Company assesses the value of all inventories including raw materials, work-in-process, and finished goods in each reporting period.
+Added: Obsolete inventory is written down to its estimated market value if those amounts are determined to be less than cost.
+Added: Auditing management's estimates for obsolete and excess inventory involved subjective auditor judgement because the estimates rely on a number of factors that are affected by market and economic conditions outside the Company's control.
+Added: The primary procedures we performed to address this critical audit matter included:
+Added: • Evaluating the significant assumptions and the accuracy and completeness of the underlying data management used to value obsolete inventory.
+Added: • Performing inquiries of the Company’s management and obtaining documentation to evaluate the Company’s estimate.
+Added: • Performing procedures to compare recent sales transactions or market data to cost of inventories to assess that the carrying value of inventories was the lower of cost or net realizable value.
+Added: Liquidity and Going Concern
+Added: As described in note 4, the financial statements are prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations.
+Added: The Company has a history of losses and has had negative cash flows from operating activities in the last two years.
+Added: The Company may not have access to sources of capital that were available in prior periods.
+Added: In addition, the COVID-19 pandemic and the decline in oil prices during fiscal 2021 caused a disruption to the Company’s business and delays in some orders.
+Added: Currently management’s forecasts and related assumptions support their assertion that they have the ability to meet their obligations as they become due through the management of expenditures and, if necessary, accessing additional funding from the at-the-market program or other equity financing.
+Added: Should there be constraints on the ability to access capital under the at-the-market program or other equity financing, the Company has asserted that it can manage cash outflows to meet the obligations through reductions in capital expenditures and other operating expenditures.
+Added: Management made judgments to conclude that it is probable that the Company’s plans will be effectively implemented and will provide the necessary cash flows to fund the Company’s obligations as they become due.
+Added: Specifically, the judgments with the highest degree of impact and subjectivity in determining that it is probable that the Company’s plans will be effectively implemented included the revenue growth and gross margin assumptions underlying its forecast of operating cash flows, its ability to reduce other operating expenditures if required, its ability to access funding from the at-the-market program or other equity financing, and its ability to sell its remaining leasepool equipment and collect on its outstanding notes receivable balances.
+Added: This required a high degree of auditor subjectivity and judgment to evaluate the audit evidence supporting management’s liquidity and going concern conclusions.
+Added: The primary procedures we performed to address this critical audit matter included:
+Added: • Evaluating the probability that the Company will be able to access funding from the at-the-market program by assessing the terms of the program and the Company’s history of using the program.
+Added: • Evaluating the probability that the Company will be able to sell its remaining leasepool equipment.
+Added: • Evaluating the probability that the Company will be able to collect the remaining amounts due from outstanding notes receivable.
+Added: • Assessing management’s plans in the context of other audit evidence obtained during the audit to determine whether it supported or contradicted the conclusion reached by management.
/s/ Moss Adams LLP
3 unchanged sentences
Index to Financial Statements
−Removed: MITCHAM INDUSTRIES, INC.
+Added: MIND TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
9 unchanged sentences
Total current assets 26,791 39,413
−Removed: Seismic equipment lease pool and property and equipment, net
+Added: Property and equipment, net 4,751 5,419
Operating lease right-of-use assets 1,471 2,300
Intangible assets, net 6,750 8,136
−Removed: Non-current prepaid income taxes
−Removed: Deferred tax asset
−Removed: Long-term receivables, net of allowance for doubtful accounts of $- and $- at
−Removed: January 31, 2020 and January 31, 2019, respectively
−Removed: Long-term assets held for sale
−Removed: LIABILITIES AND SHAREHOLDERS’ EQUITY
+Added: Goodwill — 2,531
+Added: Other assets — 429
+Added: Total assets $ 39,763 $ 58,228
+Added: LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
7 unchanged sentences
Operating lease liabilities - non-current 463 961
+Added: Notes payable 850 —
Other non-current liabilities — 967
2 unchanged sentences
Commitments and contingencies (Notes 10,17, and 21)
−Removed: Shareholders’ equity:
+Added: Stockholders’ equity:
Preferred stock, $ 1.00 par value;
2 unchanged sentences
outstanding at January 31, 2021, and 2020, respectively
+Added: 23,104 22,104
Common stock $ 0.01 par value;
4 unchanged sentences
Treasury stock, at cost ( 1,929 shares at January 31, 2021 and 2020)
+Added: ( 16,860 ) ( 16,860 )
Accumulated deficit ( 99,870 ) ( 77,310 )
Accumulated other comprehensive loss ( 4,356 ) ( 4,387 )
−Removed: Total shareholders’ equity
−Removed: Total liabilities and shareholders’ equity
+Added: Total stockholders’ equity 30,416 47,652
+Added: Total liabilities and stockholders’ equity $ 39,763 $ 58,228
The accompanying notes are an integral part of these consolidated financial statements.
Index to Financial Statements
−Removed: MITCHAM INDUSTRIES, INC.
+Added: MIND TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
−Removed: Years Ended January 31,
+Added: Year Ended January 31,
Sale of marine technology products
−Removed: Equipment leasing
−Removed: Sale of lease pool and other equipment
+Added: $ 21,215 $ 29,919
Total revenues 21,215 29,919
1 unchanged sentence
Sale of marine technology products
−Removed: Equipment leasing (including lease pool depreciation of $4,959, $9,186 and $14,370
−Removed: at January 31, 2020, 2019 and 2018, respectively)
−Removed: Equipment sales
+Added: 13,906 16,965
Total cost of sales 13,906 16,965
+Added: Gross profit 7,309 12,954
Operating expenses:
6 unchanged sentences
Operating loss ( 14,328 ) ( 6,290 )
−Removed: Other income (expense):
−Removed: Loss on sale (including $5,355 of cumulative translation loss)
−Removed: Reserve against non-current prepaid income taxes
−Removed: Interest (expense) income, net
−Removed: Total other expense
−Removed: Loss before income taxes
+Added: Other income:
+Added: Other income, net 862 100
+Added: Total other income 862 100
+Added: Loss from continuing operations before income taxes ( 13,466 ) ( 6,190 )
Provision for income taxes ( 536 ) ( 353 )
+Added: Loss from continuing operations ( 14,002 ) ( 6,543 )
+Added: Loss from discontinued operations, net of income taxes ( 6,304 ) ( 4,744 )
+Added: Net loss $ ( 20,306 ) $ ( 11,287 )
Preferred stock dividends ( 2,254 ) ( 2,050 )
−Removed: Net loss attributable to common shareholders
−Removed: Net loss per common share:
+Added: Net loss attributable to common stockholders $ ( 22,560 ) $ ( 13,337 )
+Added: Net loss per common share - Basic
+Added: Continuing operations $ ( 1.30 ) $ ( 0.71 )
+Added: Discontinued operations $ ( 0.50 ) $ ( 0.39 )
+Added: Net loss $ ( 1.80 ) $ ( 1.10 )
+Added: Net loss per common share - Diluted
+Added: Continuing operations $ ( 1.30 ) $ ( 0.71 )
+Added: Discontinued operations $ ( 0.50 ) $ ( 0.39 )
+Added: Net loss $ ( 1.80 ) $ ( 1.10 )
Shares used in computing loss per common share:
+Added: Basic 12,519 12,143
+Added: Diluted 12,519 12,143
The accompanying notes are an integral part of these consolidated financial statements.
Index to Financial Statements
−Removed: MITCHAM INDUSTRIES, INC.
+Added: MIND TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
−Removed: Years Ended January 31,
−Removed: Net loss attributable to common shareholders
−Removed: Change in cumulative translation adjustment for sale of foreign entities
+Added: Year Ended January 31,
+Added: Net loss attributable to common stockholders $ ( 22,560 ) $ ( 13,337 )
Other changes in cumulative translation adjustment 31 ( 343 )
2 unchanged sentences
Index to Financial Statements
−Removed: MITCHAM INDUSTRIES, INC.
−Removed: CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
+Added: MIND TECHNOLOGY, INC.
+Added: CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands)
−Removed: Years Ended January 31, 2018, 2019 and 2020
−Removed: Preferred Stock
+Added: Year Ended January 31, 2020 and 2021
+Added: Common Stock Preferred Stock Retained
+Added: Deficit) Accumulated
Comprehensive
Income (Loss)
−Removed: Balances, January 31, 2017
−Removed: Foreign currency translation
−Removed: Restricted stock forfeited for taxes
−Removed: Preferred stock offering
−Removed: Preferred stock dividends
−Removed: Stock-based compensation
+Added: Shares Amount Shares Amount Additional
+Added: Capital Treasury
Balances, January 31, 2019 14,049 140 830 18,330 123,085 ( 16,860 ) ( 63,973 ) ( 4,044 ) 56,678
+Added: Net loss — — — — ( 11,287 ) — ( 11,287 )
Foreign currency translation — — — — — — — ( 343 ) ( 343 )
+Added: Equity compensation 9 1 — — 25 — — — 26
Restricted stock issued 39 — — — — — — — —
4 unchanged sentences
Balances, January 31, 2020 14,097 $ 141 994 22,104 $ 123,964 $ ( 16,860 ) $ ( 77,310 ) $ ( 4,387 ) $ 47,652
+Added: Net loss — — — — — — ( 20,306 ) — ( 20,306 )
Foreign currency translation — — — — — — — 31 31
3 unchanged sentences
Preferred stock dividends — — — — — — ( 2,254 ) — ( 2,254 )
+Added: Common stock offerings 1,584 16 — — 3,569 — — — 3,585
+Added: Purchase of common stock — — — — — — — — —
Stock-based compensation — — — — 708 — — — 708
2 unchanged sentences
Index to Financial Statements
−Removed: MITCHAM INDUSTRIES, INC.
+Added: MIND TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
−Removed: Years Ended January 31,
+Added: Year Ended January 31,
Cash flows from operating activities:
−Removed: Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
+Added: Net loss $ ( 20,306 ) $ ( 11,287 )
+Added: Adjustments to reconcile net loss to net cash used in operating activities:
+Added: PPP loan forgiveness ( 757 ) —
Depreciation and amortization 4,627 7,768
1 unchanged sentence
Impairment of intangible assets 2,531 760
+Added: Loss on disposal of discontinued operations 1,859 —
Provision for doubtful accounts, net of charge offs 1,129 2,000
1 unchanged sentence
Gross profit from sale of lease pool equipment ( 1,326 ) ( 1,197 )
−Removed: Loss on sale of business
+Added: Gross profit from sale of other equipment ( 357 ) —
Deferred tax expense 32 503
2 unchanged sentences
Unbilled revenue 72 ( 327 )
+Added: Inventories 1,178 ( 2,810 )
+Added: Income taxes receivable and payable 767 —
Accounts payable, accrued expenses and other current liabilities ( 2,510 ) ( 178 )
−Removed: Prepaids expenses and other current assets, net
+Added: Prepaid expenses and other current and long-term assets 581 ( 506 )
Deferred revenue 459 ( 335 )
Foreign exchange losses net of gains — 313
−Removed: Net assets held for sale
−Removed: Net cash (used in) provided by operating activities
+Added: Net cash used in operating activities ( 6,360 ) ( 5,817 )
Cash flows from investing activities:
Purchases of seismic equipment held for lease ( 110 ) ( 2,955 )
−Removed: Acquisition of assets
+Added: Purchase of technology ( 366 ) —
Purchases of property and equipment ( 90 ) ( 1,036 )
−Removed: Sales of used lease pool equipment
+Added: Sale of used lease pool equipment 2,010 1,664
+Added: Sale of assets held for sale 1,506 —
Sale of business, net of cash sold 257 239
−Removed: Net cash (used in) provided by investing activities
+Added: Net cash provided by (used in) investing activities 3,207 ( 2,088 )
Cash flows from financing activities:
−Removed: Net payments on revolving line of credit
−Removed: Payments on term loan and other borrowings
Net proceeds from preferred stock offering 1,000 3,773
+Added: Net proceeds from common stock offering 3,584 —
Preferred stock dividends ( 1,677 ) ( 2,050 )
+Added: Proceeds from PPP loans 1,607 —
Proceeds from exercise of stock options — 26
−Removed: Net cash provided by (used in) financing activities
+Added: Net cash provided by financing activities 4,514 1,749
Effect of changes in foreign exchange rates on cash, cash equivalents and restricted cash 16 ( 159 )
−Removed: Net increase (decrease) in cash and cash equivalents including cash classified
−Removed: within current assets held for sale
−Removed: Net increase (decrease) in cash classified within current assets held for sale
−Removed: Net (decrease) increase in cash, cash equivalents and restricted cash
+Added: Net increase (decrease) in cash, cash equivalents and restricted cash 1,377 ( 6,315 )
Cash, cash equivalents and restricted cash, beginning of period 3,234 9,549
2 unchanged sentences
Index to Financial Statements
−Removed: Mitcham Industries, Inc.
+Added: MIND Technology, Inc.
Notes to Consolidated Financial Statements
Organization and Summary of Significant Accounting Policies
−Removed: Going Concern — These 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.
−Removed: As discussed in Note 3, 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.
−Removed: In addition, the COVID-19 pandemic and the decline in oil prices subsequent to January 31, 2020 have created significant uncertainty and could have a material adverse effect on the Company’s business, financial position, results of operations and liquidity.
−Removed: Accordingly, substantial uncertainty has arisen regarding the Company’s ability to continue as a going concern.
−Removed: These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company not be able to continue as a going concern.
−Removed: Organization —Mitcham Industries, Inc., a Texas corporation (the “Company”), was incorporated in 1987.
−Removed: The Company, through its wholly owned subsidiary, Seamap International Holdings Pte, Ltd.
−Removed: (“Seamap”), and its wholly owned subsidiary, Klein Marine Systems, Inc.
−Removed: (“Klein”), 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 New Hampshire, USA, Singapore and the United Kingdom.
−Removed: The Company, through its wholly owned Canadian subsidiary, Mitcham Canada, ULC (“MCL”), its wholly owned Hungarian subsidiary, Mitcham Europe Ltd.
−Removed: (“MEL”), its wholly owned Singaporean subsidiary, Mitcham Marine Leasing Pte.
−Removed: (“MML”), and its branch operations in Colombia, provides full-service equipment leasing, sales and service to the seismic industry worldwide.
+Added: Organization —MIND Technology, Inc., a Delaware corporation (the “Company”), formerly Mitcham Industries, Inc., a Texas corporation, was incorporated in 1987.
+Added: Effective August 3, 2020 the Company effectuated a reincorporation to the state of Delaware.
+Added: Concurrent with the reincorporation the name of the Company was changed to MIND Technology, Inc.
+Added: and the number of shares of common stock and preferred stock authorized for issuance was increased.
+Added: See Note 20 – Corporate Restructuring.
+Added: The Company, through its wholly owned subsidiaries, Seamap Pte Ltd, MIND Maritime Acoustics, LLC (formerly Seamap USA, LLC), Seamap (Malaysia) Sdn Bhd and Seamap (UK) Ltd, collectively “Seamap”, and its wholly owned subsidiary, Klein Marine Systems, Inc.
+Added: (“Klein”), 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 states of New Hampshire and Texas.
+Added: Prior to July 31, 2020, the Company, through its wholly owned Canadian subsidiary, Mitcham Canada, ULC (“MCL”), its wholly owned Hungarian subsidiary, Mitcham Europe Ltd.
+Added: (“MEL”), and its branch operations in Colombia, provided full-service equipment leasing, sales and service to the seismic industry worldwide.
+Added: Effective July 31, 2020, the Leasing Business has been classified as held for sale on the financial results reported as discontinued operations (see Note 2 – “Assets Held for Sale and Discontinued Operations” for additional details).
All intercompany transactions and balances have been eliminated in consolidation.
−Removed: During August 2018, the Company completed the sale of its wholly owned Russian subsidiary, Mitcham Seismic Eurasia (“MSE”) and no longer operates within Russia.
During February 2019, the Company completed the sale of its wholly owned Australian subsidiary, Seismic Asia Pacific Pty Ltd.
−Removed: (“SAP”) (see Note 22 - “Sale of Subsidiaries” for additional details related to this transaction).
+Added: (“SAP”) (see Note 23 - “Sale of Subsidiary” for additional details related to this transaction).
+Added: Revenue Recognition of Marine Technology Product Sales —Revenues and cost of sales from the sale of marine technology products are recognized upon acceptance of terms and completion of our performance obligations, which is typically when delivery has occurred, barring any question as to collectability.
+Added: Revenue Recognition of Long-term Projects —From time to time the Company enters into contracts whereby certain marine equipment is assembled or manufactured and sold, primarily to governmental entities.
+Added: Performance under these contracts generally occurs over a period of three to twelve months .
+Added: Revenue and costs related to these contracts are recognized “over time”, as each separately identified performance obligation is satisfied.
+Added: Revenue Recognition of Service Agreements —In some cases the Company provides on-going support services pursuant to contracts that generally have a term of 12 months.
+Added: The Company recognizes revenue from these contracts ratably over the term of the contract.
+Added: The Company may also provide support services on a time and material basis.
+Added: Revenue from these arrangements is recognized as the services are provided.
+Added: For certain new systems, the Company provides support services for up to 12 months at no additional charge.
+Added: Any amounts attributable to these support obligations are immaterial.
+Added: Revenues from service contracts for fiscal years ended 2021 and 2020 were not material and as a result are not presented separately in the financial statements.
Revenue Recognition of Leasing Arrangements —The Company leases various types of seismic equipment to seismic data acquisition companies.
5 unchanged sentences
Repairs or maintenance performed by the Company is charged to the lessee, generally on a time and materials basis.
−Removed: Repair and maintenance revenue are recognized as incurred.
−Removed: Revenue Recognition of Equipment Sales —Revenues and cost of sales from the sale of equipment are recognized upon acceptance of terms and when delivery has occurred, unless there is a question as to collectability.
−Removed: In cases where the equipment sold is manufactured by others, the Company reports revenues at gross amounts billed to customers because the Company:
−Removed: (a) is the obligor in the sales arrangement;
−Removed: (b) has full latitude in pricing the product for sale;
−Removed: (c) has general inventory risk should there be a problem with the equipment being sold to the customer or if the customer does not complete payment for the items purchased;
−Removed: (d) has discretion in supplier selection if the equipment ordered is not unique to one manufacturer;
−Removed: and (e) assumes credit risk for the equipment sold to its customers.
−Removed: Revenue Recognition of Long-term Projects —From time to time, Klein enters into contracts whereby they assemble and sell certain marine equipment, primarily to governmental entities.
−Removed: Performance under these contracts generally occurs over a period of several months.
−Removed: Revenue Recognition of Service Agreements —Seamap provides on-going support services pursuant to contracts that generally have a term of 12 months .
−Removed: The Company recognizes revenue from these contracts ratably over the term of the contract.
−Removed: In some cases, the Company will provide support services on a time and material basis.
−Removed: Revenue from these arrangements is recognized as the services are provided.
−Removed: For certain new systems that Seamap sells, the Company provides support services for up to 12 months at no additional charge.
−Removed: Any amounts attributable to these support obligations are immaterial.
−Removed: Revenues from service contracts for each of the three months ended January 31, 2020 were not material.
−Removed: Due to immateriality, service revenues are not presented separately in the financial statements.
+Added: Repair and maintenance revenues are recognized as incurred.
+Added: Effective July 31, 2020, the Leasing Business has been classified as held for sale on the financial results reported as discontinued operations (see Note 2 – “Assets Held for Sale and Discontinued Operations” for additional details).
Allowance for Doubtful Accounts —Trade receivables are uncollateralized customer obligations due under normal trade terms.
5 unchanged sentences
Short-term Investments— The Company considers all highly liquid investments with an original maturity greater than three months, but less than twelve months, to be short-term investments.
−Removed: Index to Financial Statements
−Removed: Inventories —Inventories are stated at the lower of average cost (which approximates first-in, first-out) or market.
+Added: Inventories —Inventories are stated at the lower of cost or market.
An allowance for obsolescence is maintained to reduce the carrying value of any materials or parts that may become obsolete.
Inventories are periodically monitored to ensure that the allowance for obsolescence covers any obsolete items.
−Removed: Seismic Equipment Lease Pool —Seismic equipment held for lease consists primarily of recording channels and peripheral equipment and is carried at cost, net of accumulated depreciation.
−Removed: Depreciation is computed on the straight-line method over the estimated useful lives of the equipment, which are five to seven years for channel boxes and two to 10 years for other peripheral equipment.
−Removed: As this equipment is subject to technological obsolescence and wear and tear, no salvage value is assigned to it.
−Removed: The Company continues to lease seismic equipment after it has been fully depreciated if it remains in acceptable condition and meets acceptable technical standards.
−Removed: This fully depreciated equipment remains in fixed assets on the Company’s books.
−Removed: The Company removes from its books the cost and accumulated depreciation of fully depreciated assets that are not expected to generate future revenues.
+Added: Index to Financial Statements
Property and Equipment —Property and equipment is carried at cost, net of accumulated depreciation.
8 unchanged sentences
Customer relationships are amortized over an eight-year period.
−Removed: Patents are amortized over an eight to nine -year period.
+Added: Patents are amortized over an eight to ten-year period.
Impairment —The Company reviews its long-lived assets, including its amortizable intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable .
22 unchanged sentences
• future sales and operating cost projections that will produce more than enough taxable income to realize the deferred tax asset based on existing sales prices and cost structures;
−Removed: Index to Financial Statements
• our earnings history exclusive of the loss that created the future deductible amount coupled with evidence indicating that the loss is an aberration rather than a continuing condition;
6 unchanged sentences
Actual results could differ from these estimates.
−Removed: Substantial judgment is necessary in the determination of the appropriate levels for the Company’s allowance for doubtful accounts because of the extended payment terms the Company often offers to its customers and the limited financial wherewithal of certain of these customers.
+Added: Index to Financial Statements
+Added: Substantial judgment is necessary in the determination of the appropriate levels for the Company’s allowance for doubtful accounts because of the extended payment terms the Company offers to its customers on occasion and the limited financial wherewithal of certain of these customers.
As a result, the Company’s allowance for doubtful accounts could change in the future, and such change could be material to the financial statements taken as a whole.
11 unchanged sentences
The Company measures the fair values of goodwill, intangibles and other long-lived assets on a recurring basis if required by impairment tests applicable to these assets.
−Removed: The Company utilized Level 3 inputs to value goodwill, intangibles and other long-lived assets as of January 31, 2020 .
+Added: The Company utilized Level 3 inputs to value intangibles and other long-lived assets as of January 31, 2021.
See Notes 10 and 11 to our consolidated financial statements.
−Removed: Foreign Currency Translation —All balance sheet accounts of the Canadian, Australian and United Kingdom resident subsidiaries have been translated at the current exchange rate as of the end of the accounting period.
+Added: Foreign Currency Translation —All balance sheet accounts of the Canadian resident subsidiary for fiscal 2021 and 2020, and for the United Kingdom resident subsidiaries for fiscal 2020, have been translated at the current exchange rate as of the end of the accounting period.
Statements of operations items have been translated at average currency exchange rates.
−Removed: The resulting translation adjustment is recorded as a separate component of comprehensive income within shareholders’ equity.
+Added: The resulting translation adjustment is recorded as a separate component of comprehensive income within stockholders’ equity.
Stock-Based Compensation —Stock-based compensation expense is recorded based on the grant date fair value of share-based awards.
7 unchanged sentences
Potential common shares result from the assumed exercise of outstanding common stock options having a dilutive effect using the treasury stock method, from unvested shares of restricted stock using the treasury stock method and from outstanding common stock warrants.
−Removed: For the fiscal years ended January 31, 2020 , 2019 and 2018 , the following table
−Removed: Index to Financial Statements
−Removed: sets forth the number of potentially dilutive shares that may be issued pursuant to options, restricted stock and warrants outstanding used in the per share calculations.
+Added: For the fiscal years ended January 31, 2021 and 2020, the following table sets forth the number of potentially dilutive shares that may be issued pursuant to options, restricted stock and warrants outstanding used in the per share calculations.
(in thousands)
5 unchanged sentences
These reclassifications had no effect on the results of operations or comprehensive income.
−Removed: New Accounting Pronouncements
−Removed: In June 2018, the FASB issued ASU No.
−Removed: 2018-07, Compensation – Stock Compensation (“Topic 718”):
−Removed: Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees except for certain circumstances.
−Removed: Any transition impact will be a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption.
−Removed: This ASU is effective for the annual period beginning after December 15, 2018, including interim periods within that annual period and early adoption is permitted.
−Removed: The Company adopted this ASU as of February 1, 2019.
−Removed: The adoption of ASU No.
−Removed: 2018-07 did not have a material effect on the Company’s condensed consolidated financial statements.
−Removed: In January 2017, the FASB issued Accounting Standards Update (“ASU”) No.
−Removed: 2017-04, Intangibles-Goodwill and Other (Topic 350):
−Removed: Simplifying the Test for Goodwill Impairment, to simplify impairment testing of goodwill and other intangible assets by eliminating step two of the impairment test.
−Removed: The Company adopted the provisions of ASU 2017-04 as of January 31, 2018.
−Removed: The adoption of ASU 2017-04 did not have a material effect on the Company’s condensed consolidated financial statements.
−Removed: In November 2016, the FASB issued ASU No.
−Removed: 2016-18, Statement of Cash Flows (Topic 230):
−Removed: Restricted Cash, to require that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.
−Removed: The Company adopted the provisions of ASU No.
−Removed: 2016-18 as of February 1, 2017.
−Removed: The adoption of ASU No.
−Removed: 2016-18 did not have a material effect on the Company’s condensed consolidated financial statements.
−Removed: In August 2016, the FASB issued ASU No.
−Removed: 2016-15, Statement of Cash Flows (Topic 230):
−Removed: Classification of Certain Cash Receipts and Cash Payments, to address how certain cash receipts and cash payments are presented and classified in the statement of cash flows.
−Removed: This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice.
−Removed: The Company adopted the provisions of ASU No.
−Removed: 2016-15 as of February 1, 2018.
−Removed: The adoption of ASU No.
−Removed: 2016-15 did not have a material effect on the Company’s condensed consolidated financial statements.
−Removed: In March 2016, the FASB issued ASU No.
−Removed: 2016-09, Compensation -Stock Compensation (Topic 718):
−Removed: Improvements to Employee Share-Based Payment Accounting , to reduce complexity in accounting standards involving several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.
−Removed: The Company adopted this new standard as of February 1, 2017, utilizing the prospective transition method.
−Removed: As a result, the Company now recognizes all excess tax charges or benefits as income tax expense or benefit in the accompanying Consolidated Statements of Operations and in the accompanying Consolidated Statements of Cash Flows as operating activities.
Index to Financial Statements
+Added: Assets Held for Sale and Discontinued Operations
+Added: On July 27, 2020, the Board determined to exit the Leasing Business.
+Added: As a result, the assets, excluding cash, and liabilities of the Leasing Business are considered held for sale and it's results of operations are reported as discontinued operations as of January 31, 2021 and for all comparative periods presented in these condensed consolidated financial statements.
+Added: The Company anticipates selling the discontinued operations within twelve months from July 27, 2020 in multiple transactions, which may involve the sale of legal entities or assets.
+Added: The assets reported as held for sale consist of the following:
+Added: As of January 31,
+Added: Current assets of discontinued operations:
+Added: Accounts receivable, net
+Added: Inventories, net 352 605
+Added: Prepaid expenses and other current assets 150 227
+Added: Seismic equipment lease pool and property and equipment, net 2,151 8,382
+Added: Total assets of discontinued operations $ 4,321 $ 14,913
+Added: The liabilities reported as held for sale consist of the following:
+Added: As of January 31,
+Added: Current liabilities of discontinued operations:
+Added: Accounts payable $ 59 $ 884
+Added: Deferred revenue 73 34
+Added: Accrued expenses and other current liabilities 831 1,886
+Added: Income taxes payable 479 ( 74 )
+Added: Total liabilities of discontinued operations $ 1,442 $ 2,730
+Added: The results of operations from discontinued operations for the twelve months ended January 31, 2021 and 2020, consist of the following:
+Added: Twelve Months Ended January 31,
+Added: Revenue from discontinued operations $ 5,747 $ 12,756
+Added: Cost of sales:
+Added: Cost of discontinued operations 4,537 9,089
+Added: Operating expenses:
+Added: Selling, general and administrative 4,589 5,576
+Added: Provision for doubtful accounts 470 2,000
+Added: Depreciation and amortization 132 176
+Added: Total operating expenses 5,191 7,752
+Added: Operating loss ( 3,981 ) ( 4,085 )
+Added: Other income (expenses) 201 ( 134 )
+Added: Loss on disposal (including $ 2,745 of cumulative translation loss)
+Added: Loss before income taxes ( 5,639 ) ( 4,219 )
+Added: Provision for income taxes ( 665 ) ( 525 )
+Added: Net loss ( 6,304 ) ( 4,744 )
+Added: Index to Financial Statements
+Added: The significant operating and investing noncash items and capital expenditures related to discontinued operations are summarized below:
+Added: As of January 31,
+Added: Depreciation and amortization $ 1,830 $ 4,818
+Added: Gross profit from sale of lease pool equipment $ ( 1,326 ) $ ( 1,145 )
+Added: Provisions for doubtful accounts $ 470 $ 2,000
+Added: Loss on disposal of discontinued operations $ 1,859 $ —
+Added: Sale of used lease pool equipment $ 2,010 $ 1,415
+Added: Sale of assets held for sale $ 1,506 $ —
+Added: Purchase of seismic equipment held for lease $ ( 110 ) $ ( 2,955 )
+Added: New Accounting Pronouncements
In February 2016, the FASB issued ASU No.
14 unchanged sentences
The adoption did not have a material impact on its results of operations nor any material impact on its cash flows.
−Removed: In July 2015, the FASB issued ASU No.
−Removed: 2015-11, Inventory:
−Removed: (Topic 330) , to provide guidance on measurement of inventory.
−Removed: ASU 2015-11 requires that inventories utilizing the first-in, first-out (FIFO) method be measured at lower of cost or net realizable value.
−Removed: The Company has adopted the provisions of ASU 2015-11 as of February 1, 2017.
−Removed: The adoption of ASU 2015-11 did not have an impact on the Company’s consolidated financial statements as the Company’s inventory is determined using the average cost and standard cost methods.
−Removed: In May 2014, the FASB issued ASU No.
−Removed: 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition.
−Removed: ASU 2014-09 was later amended by ASU No.
−Removed: 2016-10 Revenue from Contracts with Customers (Topic 606):
−Removed: Identifying Performance Obligations and Licensing, and ASU No.
−Removed: 2016-12, Revenue from Contracts with Customers (Topic 606):
−Removed: Narrow-Scope Improvements and Practical Expedients.
−Removed: ASU 2014-09, as amended, (the “New Revenue Standard”) supersedes most industry specific guidance and intends to enhance comparability of revenue recognition practices across entities and industries by providing a principle-based, comprehensive framework for addressing revenue recognition issues.
−Removed: The Company adopted the New Revenue Standard as of February 1, 2018 using the modified retrospective method.
−Removed: The adoption of the New Revenue Standard did not have a material impact on the Company’s consolidated financial statements.
−Removed: Subsequent Events and Liquidity
−Removed: The COVID-19 pandemic has created significant uncertainty in the global economy which could have a material adverse effect on the Company’s business, financial position, results of operations and liquidity.
+Added: The global pandemic has created significant uncertainty in the global economy which could have a material adverse effect on the Company’s business, financial position, results of operations and liquidity.
The time frame for which disruptions related to the pandemic will continue is uncertain as is the magnitude of any adverse impacts.
We were required to temporarily shut-down our facilities in Malaysia and Singapore on March 17, 2020 and April 7, 2020, respectively.
−Removed: Although both locations have now reopened for limited operations, they are not yet operating at full capacity.
−Removed: Our other facilities have been allowed to operate, although at reduced efficiencies as certain employees have worked remotely.
+Added: Both locations have now reopened and are operating at essentially full capacity.
+Added: Our other facilities have been allowed to operate, although at reduced efficiencies, in some cases some employees have worked remotely.
Management believes that any negative impacts will be temporary, but there can be no assurance of that.
−Removed: Additionally, oil prices have declined sharply during the first quarter of 2020 and continuing in the second quarter in response to the economic effects of the COVID-19 pandemic and the recent announcement of Saudi Arabia’s abandonment of output restraints.
−Removed: This decline could have an adverse effect on our customers in the energy industry, which could in turn cause them to cancel or delay projects and orders with us and could impair their ability to make payments to us.
−Removed: The Company has a history of losses, has had negative cash from operating activities in each of the last two years and its cash balance as of January 31, 2020 is significantly lower than at January 31, 2019.
−Removed: For the past three years, the Company has generated significant cash from the sale of preferred stock pursuant to an “at the market” program.
−Removed: That program has been completed and no further preferred shares can be sold pursuant to it.
−Removed: Furthermore, the amount of authorized preferred stock available for other financing transactions is limited.
−Removed: While the Company has plans to increase the authorized shares, such increase requires shareholder approval and there can be no assurance such approval will be obtained.
+Added: The Company has a history of operating losses and has had negative cash from operating activities.
The above factors create substantial uncertainty regarding the Company’s future financial results and liquidity.
Management has identified the following mitigating factors regarding adequate liquidity and capital resources to meet its obligations.:
−Removed: The Company has no funded debt or other outstanding obligations, outside of normal trade obligations.
+Added: • The Company has no funded debt, excluding the PPP Loan granted to Klein which has been completely forgiven in February 2021, or other outstanding obligations, outside of normal trade obligations.
• The Company has no obligations or agreements containing “maintenance type” financial covenants.
• The Company has working capital of approximately $ 19.0 million as of January 31, 2021, including cash of approximately $ 4.6 million.
−Removed: Index to Financial Statements
• 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.
1 unchanged sentence
The Company has already terminated or furloughed certain employees and contractors.
−Removed: Despite the temporary suspension of operations in Malaysia and Singapore, operations have continued uninterrupted at other locations.
−Removed: Certain of these operations have been deemed “essential businesses” by authorities.
−Removed: There can be no assurance that there will not be further suspensions in the future.
−Removed: The Company has a backlog of orders of approximately $8.9 million as of January 31, 2020 that is primarily related to customers not engaged in the energy industry.
+Added: Index to Financial Statements
+Added: • The Company has a backlog of orders of approximately $ 14.2 million (unaudited) as of January 31, 2021, as compared to approximately $ 8.9 million (unaudited) as of January 31, 2020.
Production for certain of these orders was in process and included in inventory as of January 31, 2021, thereby reducing the liquidity needed to complete the orders.
−Removed: There are various government sponsored grant or loan programs, both in the United States and in certain foreign locations which are available to the Company and for which the Company has applied.
−Removed: Although the initial funding for one such program has been depleted, the Company has pending applications for approximately $1.6 million in government sponsored loans.
−Removed: Management believes additional funding will become available for these programs.
−Removed: Despite the present difficulties in world energy markets, Management believes there are opportunities sell assets such as lease pool equipment and have completed such transactions recently.
+Added: • Despite difficulties in world energy markets, the Company has been able to generate cash from the sale of lease pool equipment and collection of accounts receivable related to its discontinued operations.
+Added: Management expects to generate additional liquidity from the sale of lease pool equipment in fiscal 2022.
• The Company has declared the quarterly dividend on the its Series A Preferred Stock for the quarter ending April 30, 2021, but such quarterly dividends could be suspended in the future.
−Removed: Based on publicized transactions and inquiries received from potential funding sources, Management believes that other sources of debt and equity financing are available should the need arise.
−Removed: Notwithstanding the mitigating factors identified by management, there remains substantial uncertainty regarding the Company's ability to meet its obligations as they arise over the next twelve months.
+Added: • Despite the challenging economic environment in the year ended January 31, 2021, the Company was successful expanding its authorized capital stock (See Note 20 - Corporate Restructuring) and raising approximately $ 4.6 million in new capital through the sale of common and preferred stock pursuant to the 2 nd ATM offering program.
+Added: Management expects to be able to raise further capital through the 2 nd ATM offering program should the need arise.
+Added: • Based on publicized transactions and discussions with potential funding sources, Management believes that other sources of debt and equity financing are available should the need arise.
+Added: For the factors discussed above, Management expects the Company to continue to meet its obligations as they arise over the next twelve months.
Revenue from Contracts with Customers
−Removed: Effective February 1, 2018 the Company adopted the New Revenue Standard using the modified retrospective method applied to those contracts which were not completed as of February 1, 2018.
−Removed: Results for reporting periods beginning after January 31, 2018 are presented under Topic 606.
−Removed: Under the New Revenue Standard, revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
−Removed: The Company has determined that the New Revenue Standard applies to contracts performed by the businesses in our Marine Technology Products segment, but not to contracts performed by our Equipment Leasing segment which are within the scope of other revenue recognition standards.
−Removed: The impact of adopting the New Revenue Standard was not material, as the analysis of our contracts under the New Revenue Standard supported the recognition of revenue at a point in time for the majority of our contracts, consistent with our historic revenue recognition model.
−Removed: As a result, the Company did not record an adjustment to opening retained earnings as a result of the adoption of the New Revenue Standard.
The following table presents revenue from contracts with customers disaggregated by product line and timing of revenue recognition:
2 unchanged sentences
(in thousands)
+Added: Seamap $ 16,304 $ 21,617
+Added: Klein 4,145 7,468
Total revenue recognized at a point in time $ 20,449 $ 29,186
Revenue recognized over time:
+Added: Seamap $ 766 $ 733
Total revenue recognized over time 766 733
Total revenue from contracts with customers $ 21,215 $ 29,919
−Removed: Index to Financial Statements
The revenue from products manufactured and sold by our Seamap and Klein businesses, as well as the revenue from products marketed and sold by our SAP 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.
8 unchanged sentences
Middle East & Africa 1,226 1,576
+Added: Asia-Pacific 6,523 5,377
Canada & Latin America 1,267 3,784
Total revenue from contracts with customers $ 21,215 $ 29,919
+Added: Index to Financial Statements
As of January 31, 2021, contract assets and liabilities consisted of the following:
−Removed: January 31, 2020
−Removed: January 31, 2019
+Added: January 31, 2021 January 31, 2020
Contract Assets:
7 unchanged sentences
Total deferred revenue & customer deposits $ 691 $ 232
−Removed: 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 three to six -month period .
−Removed: Pursuant to practical expedients and exemptions included in the New Revenue Standard, sales and transaction-based taxes are excluded from revenue.
−Removed: Also, we do not disclose the value of unsatisfied performance obligations for contacts with an original expected duration of one year or less.
−Removed: Additionally, we expense costs incurred to obtain contracts when incurred because the amortization period would have been one year or less.
+Added: Considering the products manufactured and sold by our Marine Technology Products business and the Company’s standard contract terms and conditions, we expect our contract assets and liabilities to turn over, on average, within a three to six-month period.
+Added: 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 contacts with an original expected duration of one year or less.
+Added: 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.
−Removed: Acquisition of Assets
−Removed: In February 2018 the Company completed the acquisition of intellectual property and certain other assets from Hydroscience Technologies, Inc.
−Removed: and Solid Seismic LLC (collectively “Hydroscience”).
−Removed: Hydroscience designed, manufactured and sold marine sensors and solid streamer technology products primarily for the hydrographic and seismic industries.
−Removed: In April 2017, Hydroscience filed for bankruptcy protection.
−Removed: Mitcham acquired the assets pursuant to an Asset Purchase Agreement and Sale Order (collectively the “Agreement”) that were approved by the bankruptcy court on January 31, 2018.
−Removed: Under the terms of the Agreement, Mitcham acquired certain specified intangible and tangible assets free and clear of all prior claims and encumbrances, and assumed no liabilities, contracts or prior warranty obligations.
−Removed: Details of the purchase price and the allocation of the purchase price to the assets acquired are as follows (in thousands):
−Removed: Index to Financial Statements
−Removed: Purchase Price:
−Removed: Release of claims against Hydroscience
−Removed: Transaction costs
−Removed: Total purchase price
−Removed: Allocation of purchase price:
−Removed: Tangible assets (mainly manufacturing equipment)
−Removed: Intangible assets (including patents, designs & software)
−Removed: Total purchase price
−Removed: The cash portion of the purchase price and other related costs were financed with the sale of 174,046 shares of our 9% Series A Cumulative Preferred Stock to MHI for $4.0 million .
Supplemental Statements of Cash Flows Information
Supplemental disclosures of cash flows information for the fiscal years ended January 31, 2021 and 2020 were as follows (in thousands):
−Removed: Years Ended January 31,
+Added: Year Ended January 31,
Interest paid $ 40 $ 63
1 unchanged sentence
Seismic equipment purchases included in accounts payable at year-end — 812
−Removed: Inventories consisted of the following (in thousands):
+Added: Inventories from continuing operations consisted of the following (in thousands):
As of January 31,
6 unchanged sentences
Accounts Receivables
−Removed: Accounts receivables consisted of the following (in thousands):
−Removed: As of January 31, 2020
−Removed: As of January 31, 2019
+Added: Accounts receivables from continuing operations consisted of the following (in thousands):
+Added: As of January 31, 2021 As of January 31, 2020
+Added: Current Total Current Total
Accounts receivable $ 5,695 $ 5,695 $ 9,001 $ 9,001
2 unchanged sentences
Index to Financial Statements
−Removed: As of January 31, 2020, the Company has structured payment agreements with two customers totaling $1.9 million and three customers totaling $3.0 million as of January 31, 2020 and 2019 , respectively.
−Removed: These structured payment agreements are collateralized by the equipment sold and allow the customer to pay monthly amounts for a time period less than one year.
−Removed: The balance of structured payment receivables bear interest at an average rate of 2.5% and 3.6% for January 31, 2020 and 2019 , respectively.
−Removed: The remaining repayment terms range from zero to eighteen months as of January 31, 2020 .
−Removed: Seismic Equipment Lease Pool and Property and Equipment
−Removed: Seismic equipment lease pool and property and equipment consisted of the following (in thousands)
+Added: Property and Equipment
+Added: Property and equipment from continuing operations consisted of the following (in thousands)
As of January 31,
−Removed: Recording channels
−Removed: Other peripheral equipment
−Removed: Cost of seismic equipment lease pool
+Added: Marine seismic service equipment 5,969 8,341
Land and buildings 4,354 4,274
2 unchanged sentences
Cost of property and equipment 20,564 22,470
−Removed: Cost of seismic equipment lease pool and property and equipment
Less accumulated depreciation ( 15,813 ) ( 17,051 )
−Removed: Net book value of seismic equipment lease pool and property and equipment
−Removed: As of January 31, 2020 and 2019 , the Company completed an annual review of long-lived assets by comparing undiscounted future cash flows to be generated by our lease pool assets to the carrying value of our lease pool assets noting that the undiscounted future cash flows exceeded the carrying value.
−Removed: Therefore, and no impairment has been recorded.
−Removed: Location of seismic equipment lease pool and property and equipment (in thousands):
+Added: Net book value of property and equipment $ 4,751 $ 5,419
+Added: Location of property and equipment (in thousands):
As of January 31,
United States $ 3,133 $ 3,379
−Removed: Latin America
−Removed: Net book value of seismic equipment lease pool and property and equipment
+Added: Singapore 480 773
+Added: Malaysia 1,051 1,189
+Added: Net book value of property and equipment $ 4,751 $ 5,419
In February 2016, the FASB issued ASU No.
12 unchanged sentences
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.
−Removed: Index to Financial Statements
We elected a package of transition expedients, which must be elected together, that allowed us to forgo reassessing certain conclusions reached under ASC 840.
3 unchanged sentences
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.
−Removed: 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.
+Added: The Company has certain non-cancelable operating lease agreements for office, production and warehouse space in Texas, Hungary, Singapore, Malaysia, United Kingdom and Canada.
Adoption of the New Lease Standard did have a material impact on our consolidated balance sheet as we recorded right-of-use assets and the corresponding lease liabilities related to our operating leases of approximately $ 3.0 million, each.
1 unchanged sentence
The new standard did not have a material impact on our consolidated statements of operations or our statements of cash flows.
−Removed: Lease expense for the twelve months ended January 31, 2020 was approximately $1.2 million and was recorded as a component of operating loss.
−Removed: Included in these costs was short-term lease expense of approximately $30,000 for the twelve months ended January 31, 2020.
−Removed: Supplemental balance sheet information related to leases as of January 31, 2020 was as follows (in thousands):
−Removed: January 31, 2020
−Removed: Impact of ASC 842 Transition
+Added: Index to Financial Statements
+Added: Lease expense for the twelve months ended January 31, 2021 and 2020 was approximately $ 828,000 and $ 1.2 million, respectively, and was recorded as a component of operating loss.
+Added: Included in these costs was short-term lease expense of approximately $ 20,000 and $ 30,000 for the twelve months ended January 31, 2021 and 2020, respectively.
+Added: Supplemental balance sheet information related to leases as of January 31, 2021 and 2020 was as follows (in thousands):
+Added: As of January 31,
+Added: Lease 2021 2020
Operating lease assets
+Added: $ 1,471 $ 2,300
Operating lease liabilities
+Added: $ 1,471 $ 2,300
Classification of lease liabilities
Current liabilities
+Added: $ 1,008 $ 1,339
Non-current liabilities
Total Operating lease liabilities $ 1,471 $ 2,300
−Removed: Lease-term and discount rate details as of January 31, 2020 were as follows:
+Added: Lease-term and discount rate details as of January 31, 2021 and 2020 were as follows:
+Added: As of January 31,
Lease term and discount rate 2021 2020
−Removed: January 31, 2020
Weighted average remaining lease term (years)
3 unchanged sentences
The incremental borrowing rate was calculated using the Company’s weighted average cost of capital.
−Removed: Supplemental cash flow information related to leases was as follows (in thousands):
−Removed: Twelve Months Ended January 31, 2020
+Added: Supplemental cash flow information related to leases at January 31, 2021 and 2020 was as follows (in thousands):
+Added: As of January 31,
+Added: Lease 2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
2 unchanged sentences
Operating leases $ — $ 635
−Removed: Index to Financial Statements
−Removed: Maturities of lease liabilities at January 31, 2020 were as follows (in thousands):
−Removed: January 31, 2020
+Added: Maturities of lease liabilities at January 31, 2021 and 2020 were as follows (in thousands):
+Added: As of January 31,
+Added: 2021 $ 1,007 $ 1,338
+Added: Thereafter — 21
Total payments under lease agreements $ 1,620 $ 2,569
1 unchanged sentence
Total lease liabilities $ 1,471 $ 2,300
−Removed: The Company leases seismic equipment to customers under operating leases with non-cancelable terms of one year or less.
−Removed: These leases are generally renewable on a month-to-month basis.
−Removed: All taxes (other than income taxes) and assessments are the contractual responsibility of the lessee.
−Removed: To the extent that foreign taxes are not paid by the lessee, the relevant foreign taxing authorities might seek to collect such taxes from the Company.
+Added: Prior to July 31, 2020, the Company leased seismic equipment to customers under operating leases with non-cancelable terms of one year or less.
+Added: These leases were generally renewable on a month-to-month basis.
+Added: All taxes (other than income taxes) and assessments were the
+Added: Index to Financial Statements
+Added: contractual responsibility of the lessee.
+Added: To the extent that foreign taxes were not paid by the lessee, the relevant foreign taxing authorities might seek to collect such taxes from the Company.
Under the terms of its lease agreements, any amounts paid by the Company to such foreign taxing authorities may be billed and collected from the lessee.
The Company is not aware of any foreign tax obligations as of January 31, 2021 and 2020 that are not reflected in the accompanying consolidated financial statements.
−Removed: The Company leases seismic equipment, as well as other equipment from others under operating leases.
−Removed: Lease expense incurred by the Company in connection with such leases amounted to approximately $2.5 million , $1.9 million and $774,000 for the fiscal years ended January 31, 2020 , 2019 and 2018 , respectively.
−Removed: The Company leases its office and warehouse facilities in Canada, Texas, Singapore, United Kingdom, Hungary, Colombia and Malaysia under operating leases.
−Removed: Facility lease expense for the fiscal years ended January 31, 2020 , 2019 and 2018 was approximately $1.2 million , $1.3 million and $1.2 million , respectively.
+Added: The Company leases its office and warehouse facilities in Canada, Texas, Singapore, United Kingdom, Hungary and Malaysia under operating leases.
+Added: Facility lease expense for the fiscal years ended January 31, 2021 and 2020 was approximately $ 1.2 million and $ 1.2 million, respectively.
Goodwill and Other Intangible Assets
−Removed: January 31, 2020
−Removed: January 31, 2019
−Removed: (in thousands)
−Removed: (in thousands)
+Added: Goodwill and other intangible assets from continuing operations consisted of the following:
+Added: 1/31/20 January 31, 2021 January 31, 2020
+Added: Amount Accumulated
+Added: Amortization Impairment Net
+Added: Amount Accumulated
+Added: Amortization Impairment Net
+Added: (in thousands) (in thousands)
+Added: Goodwill $ 7,060 $ — $ ( 7,060 ) $ — $ 7,060 $ — $ ( 4,529 ) $ 2,531
Proprietary rights 7.2 $ 7,781 $ ( 3,688 ) — 4,093 $ 9,247 $ ( 4,950 ) — 4,297
Customer relationships 0.8 5,024 ( 4,513 ) — 511 5,024 ( 3,831 ) — 1,193
+Added: Patents 3.6 2,440 ( 1,528 ) — 912 2,440 ( 1,277 ) — 1,163
+Added: Trade name 5.3 894 ( 74 ) ( 760 ) 60 894 ( 63 ) ( 760 ) 71
Developed technology 4.9 1,430 ( 727 ) — 703 1,430 ( 584 ) — 846
+Added: Other 3.4 684 ( 213 ) — 471 653 ( 87 ) — 566
Amortizable intangible assets $ 18,253 $ ( 10,743 ) $ ( 760 ) $ 6,750 $ 19,688 $ ( 10,792 ) $ ( 760 ) $ 8,136
−Removed: As of January 31, 2020 , the Company completed its annual review of goodwill and indefinite lived intangible assets.
+Added: As of January 31, 2021, the Company completed its annual review of intangible assets.
Based on a review of qualitative factors it was determined it was more likely than not that the fair value of our Seamap reporting unit was greater than its carrying value.
−Removed: Based on a review of qualitative and quantitative factors 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.
−Removed: Accordingly, we recorded an impairment of approximately $760,000 related to indefinite lived intangible assets in the Klein reporting unit.
+Added: Based on a review of qualitative and quantitative factors it was determined it was more likely than not that the fair value of our Klein reporting unit was greater than its carrying value.
+Added: Accordingly, we did no t record an impairment charge related to intangible assets in the Seamap and Klein reporting units.
+Added: Due to the economic impact of the global pandemic, the decline in oil prices during the three months ended April 30, 2020 and a decline in the market value of the Company’s equity securities, the Company performed a quantitative review of the Seamap reporting unit and concluded that goodwill had been impaired.
+Added: As a result, the Company recorded an impairment expense of approximately $ 2.5 million related to goodwill in the Seamap reporting unit during the quarter ended April 30, 2020.
As of January 31, 2020, the Company completed its annual review of goodwill and indefinite lived intangible assets.
−Removed: Based on a review of qualitative factors it was determined it was more likely than not that the fair value of our Seamap and Klein reporting units were greater than their carrying values.
−Removed: On January 31, 2018 , the Company completed an annual review of goodwill.
Based on a review of qualitative factors 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 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.
−Removed: Accordingly, we recorded an impairment of approximately $1.5 million related to goodwill in the Klein reporting unit.
−Removed: Index to Financial Statements
−Removed: Aggregate amortization expense was $1.8 million , $1.8 million and $1.5 million for the fiscal years ended January 31, 2020 , 2019 and 2018 , respectively.
+Added: Accordingly, we recorded an impairment of approximately $ 760,000 related to indefinite lived intangible assets in the Klein reporting unit.
+Added: Aggregate amortization expense was $ 1.8 million, and $ 1.8 million for the fiscal years ended January 31, 2021 and 2020, respectively.
As of January 31, 2021, future estimated amortization expense related to amortizable intangible assets is estimated to be (in thousands):
−Removed: For fiscal years ending January 31:
+Added: For fiscal year ending January 31:
+Added: Thereafter 1,884
+Added: Total $ 6,750
+Added: Index to Financial Statements
Accrued Expenses and Other Current Liabilities
−Removed: Accrued expenses and other current liabilities consisted of the following (in thousands):
+Added: Accrued expenses and other current liabilities from continuing operations consisted of the following (in thousands):
As of January 31,
3 unchanged sentences
Accrued inventory — 229
+Added: Other 883 552
Accrued Expenses and Other Liabilities $ 2,912 $ 1,565
−Removed: Shareholders’ Equity
+Added: Notes Payable
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The Notes stipulate various restrictions customary with this type of transaction including representations, warranties, and covenants, in addition to events of default, breaches of representation and warranties or other provisions of the Notes.
+Added: In the event of default, the Borrowers may become obligated to repay all amounts outstanding under the Notes.
+Added: The Borrowers may prepay the Notes at any time prior to maturity with no prepayment penalties.
+Added: Under the terms of the PPP, funds from the Loans may only be used for payroll costs, rent, utilities and interest on other debt obligations incurred prior to February 15, 2020.
+Added: In addition, certain amounts of the Loan may be forgiven if the funds are used to pay qualifying expenses.
+Added: In January 2021, the Loan related to the Company in the amount of approximately $ 757,000 was forgiven resulting in other income of that amount.
+Added: In February 2021, the Loan related to Klein in the amount of approximately $ 850,000 was forgiven.
+Added: Stockholders’ Equity
The Company has 2,000,000 shares of preferred stock authorized.
8 unchanged sentences
Holders of the Series A Preferred Stock generally have no voting rights except for limited voting rights if dividends payable on the outstanding Series A Preferred Stock are in arrears for six or more consecutive or non-consecutive quarterly dividend periods, or if the Company fails to maintain the listing of the Series A Preferred Stock on a national securities exchange for a period continuing for more than 180 days.
−Removed: The Company has 20,000,000 shares of common stock authorized, of which 14,097,000 and 14,049,000 were issued as of January 31, 2020 and 2019 , respectively.
+Added: The Company has 40,000,000 shares of common stock authorized, of which 15,681,000 and 14,049,000 were issued as of January 31, 2021 and 2020, respectively, including 1,929,000 treasury shares.
During the fiscal years ended January 31, 2021, and 2020 there were no shares surrendered in exchange for payment of taxes due upon vesting of restricted shares.
−Removed: During fiscal year ended January 31, 2018 , approximately 359 shares were surrendered in exchange for payment of taxes due upon the vesting of restricted shares.
−Removed: The fiscal year ended January 31, 2018 shares had an average fair value of $4.79 .
Index to Financial Statements
2 unchanged sentences
(the “Agent”).
−Removed: On December 18, 2019, the Company and Agent entered into an Amended and Restated equity distribution agreement (the “Equity Distribution Agreement”).
−Removed: Pursuant to the Equity Distribution Agreement, the Company may sell up to 500,000 shares of the Series A Preferred Stocked through the Agent through an at the market (“ATM”) offering program.
−Removed: 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 Series A Preferred Stock under the ATM program.
−Removed: For the twelve months ended January 31, 2020 , the Company issued 163,674 shares of Series A Preferred Stock under the ATM offering program.
+Added: On December 18, 2019, the Company and Agent entered into an Amended and Restated equity distribution agreement (the “1 st Equity Distribution Agreement”).
+Added: Pursuant to the 1 st Equity Distribution Agreement, the Company may sell up to 500,000 shares of the Series A Preferred Stock through the Agent through the 1 st ATM offering program.
+Added: The Co-Chief Executive Officer and Co-President of the Agent is the Non-Executive Chairman of the Board.
+Added: Under the Equity Distribution Agreement, the Agent was entitled to compensation of up to 2.0 % of the gross proceeds from the sale of Series A Preferred Stock under the 1 st ATM offering program.
+Added: As of January 31, 2021, 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.
+Added: 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.
+Added: 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 the 2 nd ATM offering program.
+Added: For the twelve months ended January 31, 2021, the Company issued 44,186 shares of Series A Preferred Stock under the 2 nd ATM offering program.
Gross proceeds from these sales were approximately $ 1.0 million and the Agent received compensation of approximately $ 20,408 , resulting in net proceeds to the Company of $ 1.0 million for the twelve months ended January 31, 2021.
−Removed: For the three months ended January 31, 2020 , the Company issued 66,436 shares of Series A Preferred stock under the ATM offering program.
−Removed: Gross proceeds from these sales were approximately $1.6 million and the Agent received compensation of approximately $31,902 , resulting in net proceeds to the Company of $1.6 million for the three months ended January 31, 2020 .
−Removed: The Co-Chief Executive Officer and Co-President of Ladenburg Thalmann & Co.
−Removed: Inc is the Non-Executive Chairman of the Company’s board of directors.
The Non-Executive Chairman of the Company received no portion of this compensation.
+Added: For the twelve months ended January 31, 2021, the Company issued 1,584,556 shares of Common Stock under the 2 nd ATM offering program.
+Added: Gross proceeds from these sales were approximately $ 4.0 million, the Agent received compensation of approximately $ 79,307 resulting in net proceeds to the Company, after deducting underwriting discounts and offering costs, of approximately $ 3.6 million for the twelve months ended January 31, 2021.
+Added: The Non-Executive Chairman of the Company received no portion of this compensation.
At January 31, 2021, the Company has an outstanding obligation payable to the beneficiary of the estate of our former CEO.
−Removed: The obligation, which bears interest at 4% per annum, totals approximately $1.2 million , of which approximately $967,000 is classified as long-term on the Company’s Consolidated Balance Sheet as of January 31, 2020 .
−Removed: Years Ended January 31,
+Added: The obligation, which bears interest at 4 % per annum, totals approximately $ 968,000 and is included in accrued expenses and other current liabilities on the Company’s Consolidated Balance Sheet as of January 31, 2021.
+Added: Year Ended January 31,
(in thousands)
−Removed: (Loss) income before income taxes is attributable to the following jurisdictions:
−Removed: The components of income tax expense (benefit) were as follows:
+Added: (Loss) income from continuing operations before income taxes is attributable
+Added: to the following jurisdictions:
+Added: Domestic $ ( 8,851 ) $ ( 7,550 )
+Added: Foreign ( 4,615 ) 1,360
+Added: Total $ ( 13,466 ) $ ( 6,190 )
+Added: The components of income tax expense (benefit) for continuing operations
+Added: were as follows:
+Added: Domestic $ 22 $ 27
+Added: Foreign 515 58
+Added: Foreign ( 1 ) 268
Income tax expense $ 536 $ 353
Index to Financial Statements
−Removed: The following is a reconciliation of expected to actual income tax expense:
−Removed: Years Ended January 31,
+Added: The following is a reconciliation of expected to actual income tax expense (benefit) for continuing operations:
+Added: Year Ended January 31,
(in thousands)
−Removed: Federal income tax at 21%, 21%, 32.9%, respectively
+Added: Federal income tax at 21 %
+Added: $ ( 2,828 ) $ ( 1,300 )
Changes in tax rates ( 50 ) 50
1 unchanged sentence
Foreign effective tax rate differential 66 ( 80 )
−Removed: Foreign withholding taxes, foreign branch taxes, including penalties and interest
+Added: Foreign withholding taxes, including penalties and interest 29 34
Tax effect of book loss on disposition of subsidiaries — 79
1 unchanged sentence
Excess tax deficiency for share-based payments under ASU 2016-09 66 284
−Removed: The components of the Company’s deferred taxes consisted of the following:
+Added: The components of the Company’s deferred taxes for continuing operations consisted of the following:
As of January 31,
5 unchanged sentences
Allowance for doubtful accounts — 229
−Removed: Allowance for inventory obsolescence
+Added: Inventory 565 525
Accruals not yet deductible for tax purposes 281 357
+Added: Fixed assets 232 105
Intangible assets 445 337
+Added: Other 599 561
Gross deferred tax assets 20,156 16,597
2 unchanged sentences
Deferred tax liabilities:
−Removed: Intangible assets
+Added: Other ( 198 ) ( 200 )
Deferred tax liabilities ( 198 ) ( 200 )
1 unchanged sentence
Total deferred tax (liabilities) assets, net ( 198 ) $ ( 200 )
−Removed: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic.
+Added: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the global pandemic.
The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021.
In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes.
−Removed: The Company is currently evaluating the impact of the CARES Act and believes, based on preliminary analysis, that the legislation will not have a material impact on the Company’s future income tax expense or the related tax assets and liabilities.
−Removed: On December 22, 2017, the United States enacted legislation commonly known as the TCJA.
−Removed: The TCJA contains (i) significant changes to corporate taxation, including reduction of the highest corporate tax rate from 35% to 21%, (ii) limitations on the deductibility of interest expense, business entertainment expenses, and executive compensation, and (iii) significant changes to U.S.
−Removed: international taxation, including a one-time repatriation tax on undistributed earnings of foreign subsidiaries, the exemption from U.S.
−Removed: tax of certain foreign earnings upon their distribution to U.S.
−Removed: corporate shareholders, and the addition of a base erosion and anti-abuse tax.
−Removed: Index to Financial Statements
−Removed: The Company’s effective federal income tax rate was 21%, 21% and 32.9% for the fiscal year ended January 31, 2020 , 2019 and 2018 , respectively.
−Removed: The reduction in the effective federal income tax rate is due to the TCJA reducing the corporate rate to 21%, effective January 1, 2018.
−Removed: For fiscal 2018, the Company was required by U.S.
−Removed: generally accepted accounting principles to re-value its deferred tax assets and liabilities as a result of the reduction of the corporate tax rate to 21%.
−Removed: The change is required to be reported as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment.
−Removed: The impact of revaluation was a decrease of approximately $7.0 million in value of the Company’s U.S.
−Removed: deferred tax assets.
−Removed: The decrease in value of the U.S.
−Removed: deferred tax assets was directly offset by a corresponding reduction in the valuation allowance related to deferred tax assets.
−Removed: Therefore, no tax expense was recorded for fiscal year 2018 as a result of the change in the corporate tax rate.
−Removed: In fiscal 2018 the Company also recognized approximately $11.2 million of estimated U.S.
−Removed: taxable income due to the one-time repatriation of previously untaxed foreign earnings and profits imposed by the TCJA.
−Removed: The repatriated foreign earnings were reported as a permanent difference and were entirely offset by current year U.S.
−Removed: net operating losses.
−Removed: As a result, the one-time repatriation of foreign earnings did not result in a tax liability for the Company.
−Removed: As of January 31, 2019 , the Company classified SAP, its Australian subsidiary, as held for sale.
−Removed: Included in the assets held for sale were deferred tax assets totaling $1.5 million .
−Removed: These deferred tax assets were offset by a full valuation allowance resulting in a net zero balance in deferred tax assets classified as held for sale.
−Removed: The Company has determined that, due to fundamental shifts in its business strategy to emphasize its Marine Technology Products business and the potential requirement for additional investment and working capital to achieve its objectives, the undistributed earnings of foreign subsidiaries as of January 31, 2020 , should no longer be deemed indefinitely reinvested outside of the United States.
+Added: The Company does not believe the CARES Act will have a material impact on the Company’s future income tax expense or the related tax assets and liabilities.
+Added: The Company has determined that, due to the potential requirement for additional investment and working capital to achieve its objectives, the undistributed earnings of foreign subsidiaries as of January 31, 2021, are not deemed indefinitely reinvested outside of the United States.
Furthermore, the Company has concluded that any deferred taxes with respect to the undistributed foreign earnings would be immaterial, particularly in light of the one-time repatriation of foreign earnings imposed by the TCJA and recorded in fiscal 2019.
−Removed: Therefore, the Company has not recorded a deferred tax liability associated with the undistributed foreign earnings as of January 31, 2020 .
+Added: Therefore, the Company has no t recorded a deferred tax liability associated with the undistributed foreign earnings as of January 31, 2021.
Included in deferred tax assets is approximately $ 700,000 related to stock-based compensation, including non-qualified stock options.
1 unchanged sentence
Recent market prices for the Company’s common stock remain below the exercise price of a number of options outstanding as of January 31, 2021.
−Removed: Should the market price of the Company’s common stock remain below the exercise price of the options, these stock options will expire without exercise.
+Added: Should the market price of the Company’s common stock remain below the exercise price of the
+Added: Index to Financial Statements
+Added: options, these stock options will expire without exercise.
In accordance with the provisions of ASC 718-740-10, a valuation allowance has not been computed based on the decline in stock price.
−Removed: As of January 31, 2020 , the Company has recorded valuation allowances of approximately $23.2 million related to deferred tax assets.
+Added: As of January 31, 2021, the Company has recorded valuation allowances of approximately $ 20.2 million related to deferred tax assets for continuing operations.
These deferred tax assets relate primarily to net operating loss carryforwards in the United States and other jurisdictions.
1 unchanged sentence
The judgment was based on an evaluation of available evidence, both positive and negative.
−Removed: At January 31, 2020 , the Company had tax credit carry forwards of approximately $724,000 , which amounts can be carried forward through at least 2021 .
+Added: At January 31, 2021, the Company had tax credit carry forwards for continuing operations of approximately $ 139,000 , which amounts can be carried forward through at least 2026.
As of January 31, 2021, and 2020 the company had no unrecognized tax benefits attributable to uncertain tax positions.
The Company recognizes interest and penalties related to income tax matters as a component of income tax expense.
−Removed: The Company prospectively adopted the provisions of ASU 2016-09 beginning February 1, 2017.
−Removed: Accordingly, all excess tax benefits and deficiencies related to employee share-based payments are recognized as income tax benefits or expense in the accompanying Consolidated Statement of Operations and in the accompanying Consolidated Statement of Cash Flows as operating activities.
−Removed: For fiscal 2020 , the excess tax deficiency for share-based payments recognized as tax expense was approximately $284,000 .
The Company files U.S.
3 unchanged sentences
The Company’s tax returns may also be subject to examination by state and local revenue authorities for fiscal years ended January 31, 2015 through 2021.
−Removed: The Company’s Canadian income tax returns are subject to examination by the Canadian tax authorities for fiscal years ended January 31, 2016 through 2020 .
+Added: The Company’s Singapore income tax returns are subject to examination by the Singapore tax authorities for fiscal years ended January 31, 2015 through 2021.
The Company’s tax returns in other foreign jurisdictions are generally subject to examination for the fiscal years ended January 31, 2015 through January 31, 2021.
−Removed: Index to Financial Statements
Commitments and Contingencies
+Added: During fiscal 2021 we entered into an agreement (the “Agreement”) with a major European defense contractor (the “Co-developer”) for the joint development and marketing of synthetic aperture sonar (“SAS”) systems.
+Added: Under the terms of the Agreement, we are obligated to make payments upon completion of certain developmental milestones related to a license for use of the Co-developer’s underlying technology.
+Added: Our total potential commitment, assuming achievement of all milestones contemplated in the Agreement, is approximately $ 1.6 million, of which approximately $ 300,000 was paid in January 2021.
Purchase Obligations —At January 31, 2021, the Company had approximately $ 3.9 million in purchase orders outstanding.
−Removed: Customs and Performance Guarantees —As of January 31, 2020 , the Company had provided customs and performance guarantees totaling approximately $144,000 which, were secured by cash deposits to a banking institution.
Stock Option Plans
12 unchanged sentences
Weighted average Black-Scholes-Merton fair value assumptions
−Removed: Years Ending January 31,
+Added: Year Ending January 31,
Risk free interest rate 0.34 % - 0.37 %
−Removed: Expected life
−Removed: 3.98 - 6.00 yrs
−Removed: 4.00 - 6.86 yrs
−Removed: 4.87 - 6.87 yrs
+Added: 1.47 % - 2.53 %
+Added: Expected life 3.97 years - 5.97 years
+Added: 3.98 years - 6.00 years
Expected volatility 53 % - 64 %
2 unchanged sentences
The Company had no excess tax benefits during the fiscal years ended January 31, 2021 and 2020.
−Removed: The Company has share-based awards outstanding under five different plans:
−Removed: the 1994 Stock Option Plan (“1994 Plan”), the 1998 Amended and Restated Stock Awards Plan (“1998 Plan”), the 2000 Stock Option Plan (“2000 Plan”), the Mitcham Industries, Inc.
−Removed: Stock Awards Plan (“2006 Plan”) and the 1994 Non-Employee Director Plan (“Director Plan”), (collectively, the “Plans”).
−Removed: Stock options granted and outstanding under each of the plans generally vest evenly over three years (except for the Director Plan, under which options generally vest after one year ) and have a 10 -year contractual term.
+Added: Index to Financial Statements
+Added: The Company has share-based awards outstanding under, the MIND Technology, Inc.
+Added: Stock Awards Plan (“the Plan”).
+Added: Stock options granted and outstanding under the Plan generally vest evenly over three years and have a 10 -year contractual term.
The exercise price of a stock option generally is equal to the fair market value of the Company’s common stock on the option grant date.
−Removed: All Plans except for the 2006 Plan have been closed for future grants.
−Removed: All shares available but not granted under the 1998 Plan and the 2000 Plan as of the date of the approval of the 2006 Plan were transferred to the 2006 Plan.
As of January 31, 2021, there were approximately 615,000 shares available for grant under the Plan.
The Plan provides for awards of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units and phantom stock.
−Removed: New shares are issued for restricted stock and upon the exercise of options.
−Removed: Index to Financial Statements
+Added: New shares are issued upon vesting for restricted stock and upon exercise for options.
Stock Based Compensation Activity
The following table presents a summary of the Company’s stock option activity for the fiscal year ended January 31, 2021:
−Removed: (in thousands)
+Added: (in thousands) Weighted
+Added: Price Weighted
+Added: (in years) Aggregate
(in thousands)
Outstanding, January 31, 2020 2,440 $ 4.51 7.08 $ 20
+Added: Granted 320 1.47
+Added: Exercised — —
+Added: Forfeited ( 41 ) 4.63
+Added: Expired ( 133 ) 5.31
Outstanding, January 31, 2021 2,586 $ 4.09 6.58 $ 223
3 unchanged sentences
This amount changes based upon the market value of the Company’s common stock.
+Added: No options were exercised during fiscal year ended January 31, 2021.
There was no intrinsic value of the 9,000 options exercised during the fiscal year ended January 31, 2020.
−Removed: No options were exercised during the fiscal years ended January 31, 2019 , and 2018 .
The fair value of options that vested during the fiscal years ended January 31, 2021 and 2020 was approximately $ 950,000 and $ 650,000 , respectively.
For the fiscal year ended January 31, 2021, approximately 500,000 options vested.
−Removed: As of January 31, 2020 , there was approximately $1.0 million of total unrecognized compensation expense related to unvested stock options granted under the Company’s share-based compensation plans.
+Added: As of January 31, 2021, there was approximately $ 482,228 of total unrecognized compensation expense related to unvested stock options granted under the Company’s share-based compensation plans.
That expense is expected to be recognized over a weighted average period of 1.3 years.
1 unchanged sentence
Year Ended January 31, 2021
−Removed: (in thousands)
−Removed: Weighted Average
+Added: (in thousands) Weighted Average
Grant Date Fair
Unvested, beginning of period 37 $ 3.98
+Added: Granted 15 1.25
+Added: Vested ( 12 ) 3.98
Unvested, end of period 40 $ 2.94
1 unchanged sentence
Segment Reporting
−Removed: The Marine Technology Products segment is engaged in the design, manufacture and sale of state-of-the-art seismic and offshore telemetry systems.
−Removed: Manufacturing, support and sales facilities are maintained in the UK, Singapore, Malaysia and New Hampshire, and Huntsville, Texas.
−Removed: The Equipment Leasing segment offers for lease or sale, new and “experienced” seismic equipment to seismic contractors in the oil and gas industry.
−Removed: The Equipment Leasing segment is headquartered in Huntsville, Texas, with sales and services offices in Calgary, Canada and Singapore.
−Removed: Financial information by business segment is set forth below net of any allocations (in thousands):
−Removed: Index to Financial Statements
−Removed: As of January 31, 2020
−Removed: As of January 31, 2019
−Removed: As of January 31, 2018
−Removed: Marine Technology Products
−Removed: Marine Technology Products
−Removed: Marine Technology Products
−Removed: Fixed assets, net
−Removed: Intangible assets, net
−Removed: As of January 31, 2020
−Removed: As of January 31, 2019
−Removed: As of January 31, 2018
−Removed: Marine Technology Products
−Removed: Marine Technology Products
−Removed: Marine Technology Products
−Removed: Interest expense, net
−Removed: Operating loss
−Removed: Capital expenditures
−Removed: Depreciation and amortization expense
−Removed: Approximately $110,000 , $209,000 and $216,000 related to sales from Marine Technology Products to the Equipment Leasing segment is eliminated in the consolidated revenues for the fiscal years ended January 31, 2020 , 2019 and 2018 , respectively.
−Removed: A reconciliation of operating income is as follows (in thousands):
−Removed: Years Ended January 31,
−Removed: Marine Technology Products
−Removed: Equipment Leasing
−Removed: Corporate Expenses
−Removed: Reconciling items:
−Removed: Elimination of loss from inter-company sales
−Removed: Consolidated operating income
+Added: With the designation of the Equipment Leasing segment as discontinued operations as of July 31, 2020, the Company operates in one segment, Marine Technology Products.
+Added: The Marine Technology Products business is engaged in the design, manufacture and sale of state-of-
Index to Financial Statements
−Removed: Quarterly Financial Data (Unaudited)
−Removed: Quarters Ended
−Removed: Net revenues:
−Removed: Gross profit:
−Removed: Loss before income taxes:
−Removed: Incomes taxes (benefit):
−Removed: Loss per common share – basic:
−Removed: Loss per common share – diluted:
+Added: the-art seismic and offshore telemetry systems.
+Added: Manufacturing, support and sales facilities are maintained in the United Kingdom, Singapore, Malaysia and the states of New Hampshire and Texas.
+Added: Corporate Restructuring
+Added: 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.
+Added: 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 Stockholders held on July 27, 2020.
+Added: As part of the reincorporation merger, the stockholders 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).
+Added: 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.
+Added: Stockholders who hold physical stock certificates are not required to, but may, exchange stock certificates as a result of the reincorporation.
+Added: 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.
+Added: 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.
+Added: No changes have been made to the Board, management, business or operations of the Company as a result of the reincorporation.
+Added: The Company’s corporate headquarters remains in Texas.
Concentrations
−Removed: Credit Risk —As of January 31, 2020 , no customers exceeded 10% of consolidated accounts receivable.
−Removed: During fiscal year ended 2019 , one customer amounted to an aggregate of approximately $2.2 million .
+Added: Credit Risk — As of January 31, 2021, we had three customers that exceeded 10 % of consolidated accounts receivable.
+Added: During our fiscal year ended 2020, no customer exceeded 10% of consolidated accounts receivable.
The Company maintains deposits and certificates of deposit with banks which may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit and money market accounts which are not FDIC insured.
1 unchanged sentence
Management believes the risk of loss in connection with these accounts is minimal.
−Removed: Industry Concentration —The majority of the Company’s revenues are derived from seismic equipment leased and sold to companies providing seismic acquisition services.
−Removed: The seismic industry has historically been subject to cyclical activity and is dependent, in large part, on the expected future prices of oil and natural gas.
−Removed: Should the industry experience a decline in the price of oil and natural gas, the Company could be subject to significantly greater credit risk and declining demand for its products and services.
−Removed: Supplier Concentration —The Company purchases the majority of its seismic equipment for its lease pool from a small number of suppliers, each being an industry leader for its product.
−Removed: The Company believes that two of its suppliers manufacture most of the land-based seismic systems and equipment in use.
−Removed: The Company has satisfactory relationships with its suppliers.
+Added: Supplier Concentration —The Company has satisfactory relationships with its suppliers.
However, should those relationships deteriorate, the Company may have difficulty in obtaining new technology requested by its customers and maintaining the existing equipment in accordance with manufacturers’ specifications.
Sales and Major Customers
−Removed: A summary of the Company’s revenues from customers by geographic region, outside the U.S., is as follows (in thousands):
−Removed: Years Ended January 31,
+Added: A summary of the Company’s revenues, from continuing operations, from customers by geographic region, outside the U.S., is as follows (in thousands):
+Added: Year Ended January 31,
+Added: UK/Europe $ 8,005 $ 14,975
+Added: Canada 1,267 3,519
Latin America — 262
Asia/South Pacific 6,523 5,377
−Removed: During the fiscal years ended January 31, 2020 and 2019 no individual customer exceeded 10% of total revenue.
−Removed: During fiscal year ended 2018 , two individual customers exceeded 10% of total revenues.
−Removed: Index to Financial Statements
−Removed: Sale of Subsidiaries
+Added: Eurasia 507 290
+Added: Other 1,226 1,576
+Added: Total $ 17,528 $ 25,999
+Added: During each of the fiscal years ended 2021 and 2020, no individual customer exceeded 10% of total revenue.
+Added: Sale of Subsidiary
In February 2019, the Company completed the sale of its wholly owned Australian subsidiary, Seismic Asia Pacific Pty Ltd.
1 unchanged sentence
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 .
−Removed: The agreement also included a working capital adjustment of approximately $114,000 payable to the Company.
−Removed: We received payment of the working capital adjustment in August of 2019.
−Removed: The note receivable was recorded as other non-current assets as of January 31, 2020.
−Removed: In August 2018, the Company completed the sale of its wholly owned Russian subsidiary, MSE, to an unrelated third party (the “Buyer”) for total contractual proceeds of approximately $1.2 million U.S.
−Removed: Our agreement with the Buyer stipulated a series of eight ( 8 ) payments totaling the contractual proceeds, plus interest accruing at a rate of 9% per annum, with the final payment to be received on or before August 31, 2019.
−Removed: Through January 31, 2020, the Buyer has made payments totaling approximately $705,000 .
−Removed: Although we did not receive all the stipulated payments before August 31, 2019, we are working with the Buyer and expect the balance of contractual proceeds, together with applicable interest, to be paid in full.
−Removed: The amounts due from Buyer were recorded in accounts receivable at January 31, 2020.
−Removed: As a result of the sale of MSE, the Company recorded a loss of approximately $4.9 million , including recognition of approximately $5.4 million of cumulative translation losses which had been historically recorded in Accumulated Other Comprehensive Loss, a component of equity.
+Added: The agreement also included a working capital adjustment of approximately $ 114,000 payable to the Company which was received in August of 2019.
+Added: In fiscal 2021, the Company received a payment of approximately $ 124,000 that was applied against the note receivable..
+Added: The note receivable is recorded in other current assets as of January 31, 2021, and in other non-current assets as of January 31, 2020.
Index to Financial Statements
−Removed: MITCHAM INDUSTRIES, INC.
+Added: MIND TECHNOLOGY, INC.
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
−Removed: Balance at End
+Added: Description Balance at
+Added: of Period Charged to
+Added: Expenses Charged
+Added: Accounts Deductions
+Added: Describe Balance at End
Allowance for doubtful accounts
−Removed: January 31, 2020
−Removed: January 31, 2019
−Removed: January 31, 2018
+Added: January 31, 2021 $ 4,054 1,129 ( 43 ) (a) ( 3,364 ) (b) $ 1,776
+Added: January 31, 2020 $ 2,113 2,000 — (a) ( 59 ) (b) $ 4,054
Allowance for obsolete equipment and inventory
−Removed: January 31, 2020
−Removed: January 31, 2019
−Removed: January 31, 2018
−Removed: Represents translation differences.
−Removed: Represents recoveries and uncollectible accounts written off.
−Removed: Represents sale or scrap of inventory and obsolete equipment.
+Added: January 31, 2021 $ 1,404 321 1 (a) ( 66 ) (c) $ 1,660
+Added: January 31, 2020 $ 1,222 298 1 (a) ( 117 ) (c) $ 1,404
+Added: (a) Represents translation differences.
+Added: (b) Represents recoveries and uncollectible accounts written off.
+Added: (c) Represents sale or scrap of inventory and obsolete equipment.
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.