What changed in this filing

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Item 1A. Risk Factors

2025-04-25 compared with 2024-04-30 · 48 added, 100 removed, 310 unchanged (32% of the section changed)

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All forward-looking statements made by us are qualified by the risk factors described below.

Risk Related to Our Financial Condition

The Company ’ s ability to continue as a going concern could impact our ability to obtain capital financing and adversely affect the price of our Common Stock and Preferred Stock.

The Company has a history of generating operating losses and negative cash flows from operating activities.

Due to our historical financial results and financial position, some suppliers may be reluctant to do business with us or may require prepayment for goods or services.

This could negatively impact our liquidity.

This could also impact our ability to obtain capital or other sources of financing.

Risks Related to the Operation of Our Business

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Contractual payment terms vary by customer and by contract and, under certain circumstances, we may grant extended payment terms to our customers.

We had an allowance for credit losses of approximately $332,000 related to accounts receivable from continuing operations.

For fiscal 2024 and fiscal 2023, we had no charges to our provision for credit losses related to continuing operations.

As of January 31, 2025, we had an allowance for credit losses of approximately $332,000 related to accounts receivable from continuing operations.

For fiscal 2025 and fiscal 2024, we had no charges to our provision for credit losses.

Significant payment defaults by our customers in excess of our allowance for credit losses would have a material adverse effect on our financial position and results of operations.

We derive a substantial amount of our revenues from foreign operations and sales, which pose additional risks including economic, political and other uncertainties.

We derive the majority

of our revenues from foreign operations and sales, which pose additional risks including economic, political and other uncertainties.

We conduct operations on a global scale.

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Our international operations are subject to a number of risks inherent to any business operating in foreign countries, and especially those with emerging markets.

As we continue to increase our presence in such countries, our operations will encounter the following risks, among others:

Such risks include, among others:

government instability, which can cause investment in capital projects by our potential clients to be withdrawn or delayed, reducing or eliminating the viability of some markets for our services;

potential expropriation, seizure, nationalization or detention of assets;

difficulty in repatriating foreign currency received in excess of local currency requirements;

fluctuations in foreign currency;

import/export quotas and evolving export license requirements;

civil uprisings, riots and war, which can make it unsafe to continue operations, adversely affect both budgets and schedules and expose us to losses;

availability of suitable personnel and equipment, which can be affected by government policy, or changes in policy, which limit the importation of qualified crewmembers or specialized equipment in areas where local resources are insufficient;

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political and economic uncertainties in certain countries which may cause delays or cancellation of projects;

the United States or foreign countries could enact legislation or impose regulations or other restrictions, including unfavorable labor regulations, tax policies, tariffs, trade restrictions, or economic sanctions, which could have an adverse effect on our ability to conduct business in or expatriate profits from the countries in which we operate;

environmental conditions and regulatory controls or initiatives in some countries that may impose additional or more stringent requirements than found in the United States and which may not be consistently applied or enforced;

unfavorable labor regulations, tax policies, tariffs, trade restrictions, or economic sanctions, enacted by the United States or foreign countries, which could have an adverse effect on our ability to conduct business in and expatriate profits;

environmental conditions and regulatory controls or initiatives, which may be additional to or more stringent than requirements in the United States and which may not be consistently applied or enforced;

regulations, laws or emergency measures taken or imposed by the United States or foreign state and local governments and municipalities in response to emergency or crisis situations, including natural disasters or pandemics, which could have an adverse effect on our business, our customers or our operations.

potential expropriation, seizure, nationalization or detention of assets;

difficulty in repatriating foreign currency received in excess of local currency requirements;

civil uprisings, riots and war, which can make it unsafe to continue operations, adversely affect both budgets and schedules and expose us to losses;

We cannot predict the nature and the likelihood of any such events.

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Our global operations expose us to risks associated with conducting business internationally, including failure to comply with United States laws that apply to international operations.

Some of our products are subject to export control regulations, including the International Traffic in Arms Regulations (“ITAR”) administered by the U.S.

Department of State’s Directorate of Defense Trade Controls (“DDTC”) and the Export Administration Regulations administered by the U.S.

Some of our products are subject to export control regulations, including the Export Administration Regulations administered by the U.S.

Department of Commerce’s Bureau of Industry and Security (“BIS”).

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Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), which restrict or prohibit our ability to transact with certain foreign countries, individuals and entities.

Under these regulations, the sale or transfer of certain equipment to a location outside the United States may require prior approval in the form of an export license issued by the BIS or DDTC.

Under these regulations, the sale or transfer of certain equipment to a location outside the United States may require prior approval in the form of an export license issued by the BIS.

Some potential international transactions may also be restricted or prohibited based on the location, nationality or identity of the potential end user, customer or other parties to the transaction or may require prior authorization in the form of an OFAC license.

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New technology and product developments may cause us to become less competitive.

New seismic data acquisition technologies may be developed.

New and enhanced products and services introduced by a competitor may gain market acceptance and, if not available to us, may adversely affect us.

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Sustained low oil prices or the failure of oil prices to rise in the future and the resulting downturns or lack of growth in the energy industry and energy‑related business, could have a negative impact on our results of operations and financial condition.

We rely on contractors and subcontractors for certain projects, which could affect our results of operations and reputation.

We may rely on contractors and subcontractors to complete or assist us with completion of certain projects.

We may rely on contractors and subcontractors for certain projects, which could affect our results of operations and reputation.

We may rely on contractors and subcontractors to complete or assist us with completion of certain projects, primarily research and development projects.

The quality and timing of production and services by our contractors and subcontractors is not totally under our control.

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The commerce we conduct in the international marketplace makes us subject to tariffs, trade restrictions and other taxes when the supplies that we purchase, and the products we ship, cross international borders.

Trade tensions between the United States and China, as well as those between the United States and Canada, Mexico and other countries have been escalating in recent years.

Trade tensions between the United States and China, as well as those between the United States and Canada, Mexico and other countries have escalated recently.

Trade tensions have led to a series of tariffs imposed by the United States on imports from China, as well as retaliatory tariffs imposed by China on imports from the United States.

We believe that certain supplies we purchase from China and other international suppliers could become subject to tariffs that could increase our operation costs.

Additionally, the current Trump presidential administration has announced plans to impose broad-based tariffs on imports from Canada and Mexico and countries in the European Union.

If supplies we purchase from China and other international suppliers become subject to tariffs, our operation costs could increase.

Products we sell into certain foreign markets could also become subject to similar retaliatory tariffs, making the products we sell uncompetitive to similar products not subjected to such import tariffs.

Further changes in United States trade policies, tariffs, taxes, export restrictions or other trade barriers or restrictions, may limit our ability to produce products, increase our manufacturing costs, decrease our profit margins, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase supplies, which could have a material adverse effect on our business, results of operations or financial conditions.

The majority of our imports are made in Singapore and Malaysia and, therefore, are not directly impacted by the current and proposed tariffs or trade restriction involving the United States.

We face significant inventory risk.

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We face significant competition for our products and services.

We have competitors who provide similar products and services, many of which have substantially greater financial resources than our own.

We have competitors who provide similar products and services, some of which have substantially greater financial resources than our own.

There are also several smaller competitors that, in the aggregate, generate significant revenues from the sale of products similar to those we offer.

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These factors include the following:

inclement weather conditions, natural disasters or pandemics, including the recent global pandemic;

inclement weather conditions, natural disasters or pandemics;

difficulties in obtaining permits and licenses;

labor or political unrest;

delays in obtaining access rights;

availability of required equipment;

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delays in payments to our customers from their clients.

Capital requirements for our business strategy can be large.

If we are unable to finance these requirements, we may not be able to maintain our competitive advantage or execute our strategy.

In recent periods we have funded our capital requirements with the issuance of Preferred Stock and Common Stock and proceeds from the sale of assets.

Our capital requirements may continue to increase.

If we were to expand our operations at a rate exceeding operating cash flow, or current demand or pricing of our services were to decrease substantially or if technical advances or competitive pressures required us to acquire new equipment faster than our cash flow could sustain, additional financing could be required.

Access to global financial markets and the terms under which capital is available can be uncertain and volatile.

As of January 31, 2024, under our Amended and Restated Articles of Incorporation, we are authorized to issue up to 40,000,000 shares of our Common Stock and 2,000,000 shares of Preferred Stock, of which 1,405,779 shares of Common Stock and 1,682,985 shares of Preferred Stock are issued and outstanding.

We cannot predict the availability, size or price of any future issuances of Preferred Stock or Common Stock or other instruments convertible into equity, and the effect, if any, that such future issuances and sales will have on the market price of our securities or our ability to raise additional capital through stock issuances.

Any additional issuances of Preferred Stock or Common Stock or securities convertible into, or exercisable or exchangeable for, such stock may ultimately result in dilution to the holders of stock, dilution in our future earnings per share and may have a material adverse effect upon the market price of the stock of the Company.

Due to these factors, we cannot be certain that funding will be available if and when needed and to the extent required, on acceptable terms or at all.

We may require capital to finance expansion.

If we cannot access additional capital, we may not be able to grow our business.

We may seek to access additional capital from entering into a sale/lease transaction regarding our Huntsville, Texas facility, by entering into other borrowing arrangement or by issuing debt or equity securities.

As of January 31, 2025, under our Amended and Restated Articles of Incorporation, we are authorized to issue up to 40,000,000 shares of our Common Stock and 2,000,000 shares of Preferred Stock, of which 7,969,421 shares of Common Stock and zero shares of Preferred Stock are issued and outstanding.

We cannot predict the availability, size or price of any future issuances of Common Stock or Preferred Stock or other instruments convertible into equity, and the effect, if any, that such future issuances and sales will have on the market price of our securities or our ability to raise additional capital through stock issuances.

Any additional issuances of Common Stock or securities convertible into, or exercisable or exchangeable for, such stock may ultimately result in dilution to the holders of stock, dilution in our future earnings per share and may have a material adverse effect upon the market price of the stock of the Company.

We cannot be certain that funding will be available if and when needed and to the extent required, on acceptable terms or at all.

If funding is not available when needed, or is available only on unfavorable terms, we may be unable to grow our existing business, complete acquisitions or otherwise take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our financial condition and results of operations.

Access to working capital and letters of credit may be limited.

From time to time, we may require access to working capital to meet overhead costs and operational expenditures, to finance inventory purchases, or to provide letters of credit or bankers’ guarantees to certain customers.

For the past several years we have not had a credit facility in place, and have used cash generated from our operations, sale of lease pool equipment and sale of our Series A Preferred Stock and Common Stock to meet our working capital needs.

There is no assurance that we will be able to negotiate a credit facility or continue to meet working capital needs with cash generated from our operations, sale of lease pool equipment or sale of our Series A Preferred Stock or Common Stock.

Many commercial banks in the United States have undertaken to reduce their exposure to companies engaged in oil and gas related activities, which limits our ability to obtain working capital financing.

Should we not have access to adequate working capital financing, we may not be able to pursue or complete some business opportunities or maintain an appropriate level of working capital to meet our overhead costs and operational expenditures.

Further, our failure to meet our projected financial results or achieve projected revenues and cash flows could lead to cash flow and working capital constraints that could limit our ability to meet the day-to-day needs of our business.

For the past several years we have not had a credit facility in place.

There is no assurance that we will be able to negotiate a credit facility or continue to meet working capital needs with cash generated from our operations, or the sale of debt or equity securities.

The majority of our revenues are generated by Seamap Pte.

Ltd., our Singapore-based subsidiary, and therefore the majority of our accounts receivable and inventory are located in Singapore.

This limits the ability for U.S.-based financial institutions to provide asset backed financing to us.

Additionally, many financial institutions in Singapore require partial local ownership in order to provide financing.

These factors limit our access to certain conventional sources of working capital financing.

If our cash flows and capital resources are insufficient to fund our operations, we may be forced to reduce or delay capital expenditures, sell assets, or seek additional capital, which may not be available on terms acceptable to us, or at all.

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Our long-lived assets may be subject to impairment.

We periodically assess our long-lived assets and other intangible assets for impairment.

We periodically assess our long-lived assets, including intangible assets, for impairment.

If the future cash flows anticipated to be generated from these assets fall below net book value, we may be required to write down the value of our long-lived assets.

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Foreign Corrupt Practices Act (the “ FCPA ” ) and the UK Bribery Act of 2010 (the “ UK Bribery Act ” ), could result in fines, criminal penalties, and other sanctions, and may adversely affect our business and operations.

The FCPA and the UK Bribery Act, and similar anti bribery laws in other jurisdictions, generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business.

The FCPA, the UK Bribery Act and similar anti-bribery laws in other jurisdictions, generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business.

We and our local partners operate in many parts of the world that have experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices.

If we are found to be liable for violations under the FCPA, the UK Bribery Act or other similar laws, either due to our acts or omissions or due to the acts or omissions of others, including our local or strategic partners, we could suffer from civil and criminal penalties or other sanctions, which could have a material adverse effect on our business, results of operations or financial condition.

In addition, investors could negatively view potential violations, inquiries or allegations of misconduct under the FCPA, the UK Bribery Act or similar laws, which could adversely affect our reputation and the market for our shares.

If we are found to be liable for violations under such anti-bribery laws, either due to our acts or omissions or due to the acts or omissions of others, including our local or strategic partners, we could suffer from civil and criminal penalties or other sanctions, which could have a material adverse effect on our business, results of operations or financial condition.

In addition, investors could negatively view potential violations, inquiries or allegations of misconduct under such anti-bribery laws, which could adversely affect our reputation and the market for our shares.

We also may be subject to competitive disadvantages to the extent that our competitors are able to secure business, licenses or other preferential treatment by making payments to government officials and others in positions of influence or using other methods that U.S.

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We are subject to stringent governmental laws and regulations both in the United States and in foreign countries relating to worker safety and health, protection of the environment and natural resources, and the handling of chemicals and materials used in our manufacturing processes as well as the recycling and disposal of wastes generated by those processes.

For additional information regarding costs and liabilities associated with environmental or worker safety and health matters, see Item 1 - “Regulation - Governmental and Environmental Regulation.” Compliance with or continuing to be subject to these applicable laws and regulations could have a material adverse effect on our business, financial condition or results of operations.

For additional information regarding costs and liabilities associated with environmental or worker safety and health matters, see Item 1 - “Business - Governmental Environmental Regulation.” Compliance with or continuing to be subject to these applicable laws and regulations could have a material adverse effect on our business, financial condition or results of operations.

In addition, increased environmental regulation of oil and gas exploration and production activities, whether in the United States or in any of the other countries in which our customers operate could cause them to incur increased costs or restrict, delay or cancel drilling, exploration or production programs or associated hydraulic fracturing activities, which in turn could result in reduced demand for our products and services and have a material adverse effect on our business, financial condition, results of operations, or cash flows.

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In addition, the EPA has adopted regulations requiring monitoring and annual reporting of GHG emissions from certain sources, including, among others, certain onshore and offshore oil and natural gas production facilities.

In 2016, the EPA finalized new regulations that set emission standards for methane and other volatile organic compounds for new and modified oil and natural gas production and natural gas processing and transmission facilities, known as New Source Performance Standards (“NSPS”) Subpart OOOOa.

Although EPA subsequently withdrew these requirements for certain sectors of the oil and gas industry, and the ultimate scope of these rules is uncertain due to ongoing court challenges of the rules and any potential changes to the rules by U.S.

President Biden’s Administration, the bulk of NSPS Subpart OOOOa is currently in effect.

Also, many of the other countries where we and our customers operate, including Canada and various countries in Europe, have adopted or are considering GHG reduction measures similar to those described above.

Many of the other countries where we and our customers operate, including Canada and various countries in Europe, have adopted or are considering similar GHG reduction measures.

Such measures, or any similar future proposals, have the potential to increase costs for the oil and gas industry, which in turn could result in reduced demand for the products and services we provide.

Although it is not possible at this time to predict how legislation or new regulations or other initiatives that may be adopted to address GHG emissions would impact our business, any such future laws, regulations or other legal requirements imposing reporting or permitting obligations on, or limiting emissions of GHGs from oil and gas exploration and production activities could have an adverse effect on the demand for our products and services.

In addition, spurred by increasing concerns regarding climate change, the oil and gas industry faces growing demand for corporate transparency and a demonstrated commitment to sustainability goals.

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If any such climatic events were to occur, they could have an adverse effect on our financial condition and results of operations and the financial condition and operations of our customers.

For additional risks related to climate or catastrophic events, please see risk factor “ Risks related to natural disasters and other catastrophic events ” below.

Notwithstanding potential risks related to climate change, the International Energy Agency estimates that oil and gas will continue to represent a substantial major share of global energy use through 2030, and other private sector studies project continued growth in demand for the next two decades.

However, recent activism directed at shifting funding away from companies with energy-related assets could result in limitations or restrictions on certain sources of funding for the energy sector.

Our business could be negatively affected by security threats, including cybersecurity threats, and other disruptions.

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however after consultation with counsel and cybersecurity consultants, Management does not believe any sensitive information was breached.

The potential for additional security threats and breaches subjects our operations to increased risks that could have a material adverse effect on our business.

In particular, our implementation of various procedures and controls to monitor and mitigate security threats and to increase security for our information, facilities and infrastructure may result in increased capital and operating costs.

Moreover, although we have implemented procedures and controls designed to address prior breaches and prevent and mitigate future threats, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring again.

The occurrence of any future breaches of our information systems could lead to losses of sensitive information, critical infrastructure or capabilities essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations or cash flows.

Since the outbreak of the global pandemic and continuing through most of fiscal 2022, we allowed some employees to work from home on a more frequent basis.

As a result, we have experienced, and continue to experience, increased cybersecurity and data security risks, due to increased use of home Wi-Fi networks and virtual private networks.

The United States Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency has warned that cybercriminals will take advantage of the disruption and uncertainty created by the global pandemic in their cyberattacks.

While we continue to implement and improve information technology controls to reduce the risk of a cybersecurity or data security breach, there is no guarantee that these measures will be adequate to safeguard all systems with an increased number of employees working remotely.

Cybersecurity attacks in particular are becoming more sophisticated and include, but are not limited to, malicious software, attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in critical systems, disruption of our customers’ operations, loss or damage to our data delivery systems, unauthorized release of confidential or otherwise protected information, corruption of data, and increased costs to prevent, respond to or mitigate cybersecurity events.

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Any failure by us, or a company we acquire, to comply with such laws and regulations could result in reputational harm, loss of goodwill, penalties, liabilities and/or mandated changes in our business practices.

We may grow through acquisitions and our failure to properly plan and manage those acquisitions may adversely affect our performance.

We may seek to grow through acquisitions and our failure to properly plan and manage those acquisitions may adversely affect our performance.

We plan to expand not only through organic growth but may also do so through the strategic acquisition of companies and assets.

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Encountering any of these or any unforeseen problems in completing acquisitions could have a material adverse effect on our ability to compete, financial condition and results of operations, and could prevent us from achieving the increases in revenues and profitability that we hope to realize through acquisitions.

Our failure to properly develop and manage strategic initiatives may adversely affect our financial position and results of operations.

We have initiated, and may in the future initiate, strategic initiatives in order to focus and expand our product offerings.

The initiatives we have initiated include (i) the introduction of our Sea Serpent passive sonar arrays for use in maritime security applications, such as anti-submarine warfare;

and (ii) implementation of our Spectral Ai technology.

There can be no assurance that we will realize the anticipated benefits of such initiatives or that any of the strategic initiatives will ultimately have a material impact on our financial position or results of operations.

The pursuit of the strategic initiatives presents a number of risks, including but not limited to, the length of development, increased competition, the diversion of management’s attention from existing operations or other priorities, the unavailability of equipment, budget limitations and the ability to sell our lease pool equipment on favorable terms, if at all, all of which could adversely affect our financial condition and results of operations.

We face risks related to health epidemics and other outbreaks, such as the COVID-19 or novel coronavirus, or fear of such an event.

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While we seek to minimize our exposure to third-party losses of our cash and cash equivalents, we hold our balances in a number of large financial institutions.

Notwithstanding, such allocation, we are subject to the risk of bank failure.

For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was unable to continue its operations and the Federal Deposit Insurance Corporation was appointed as receiver for SVB and created the National Bank of Santa Clara to hold the deposits of SVB.

Subsequently, Signature Bank failed on March 12, 2023, UBS took over Credit Suisse on March 19, 2023 and First Republic closed on May 1, 2023, selling most of its deposits and assets to JPMorgan Chase.

None of our cash and cash equivalents was held at the failed banks aforementioned and we do not expect further developments with such failed banks to have a material impact on our cash and cash equivalents balance, expected results of operations, or financial performance for the foreseeable future.

However, if the banks where we hold deposits were to experience a similar failure, we could experience additional risk.

Any such loss or limitation on our cash and cash equivalents would adversely affect our business.

If the banks where we hold deposits were to experience a failure, any such loss or limitation on our cash and cash equivalents would adversely affect our business.

Risks Related to Human Capital Management

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If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, additional reporting requirements and oversight if subject to an agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could substantially disrupt our operations.

Risk Related to Our Common and Preferred Stock

Risk Related to Our Common Stock

Our stock prices are subject to volatility.

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Accordingly, investors must rely on sales of their Common Stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

The Company has deferred payment of dividends on its Series A Preferred Stock, which restricts our ability to undertake certain actions.

The Company has deferred payment of the quarterly dividend on its Series A Preferred Stock for seven fiscal quarters, including the fourth quarter of fiscal 2024 and the fist quarter of fiscal 2025.

Prior to the declaration and payment of dividends our board of directors must determine, among other things, that funds are available out of the surplus of the Company and that the payment would not render us insolvent or compromise our ability to pay our obligations as they come due in the ordinary course of business.

As a result, although the Series A Preferred Stock will continue to earn a right to receive dividends, the Company’s ability to pay dividends will depend, among other things, upon our ability to generate excess cash.

During a deferral period, the Company is prohibited from paying dividends or distributions on its Common Stock or redeeming any of those shares.

Further, since the Company has not paid dividends on its Series A Preferred Stock for six or more quarters, the holders of Series A Preferred Stock have the right to appoint two directors to the Company’s board.

Additionally, while there are dividends in arears, we are ineligible to utilize certain forms of registration statements with the SEC.

This could inhibit our ability to raise additional capital.

We may issue securities with rights senior to that of our Common Stock or Preferred Stock in liquidation which could dilute or negatively affect the value of those securities.

As of January 31, 2024, 1,682,985 shares of the Series A Preferred Stock were outstanding, with a liquidation preference of $25.00 per share.

The Company has 2,000,000 shares of Preferred Stock authorized.

The Preferred Stock may be issued in multiple series with various terms, as authorized by the Company’s board of directors.

The Series A Preferred Stock has a liquidation preference senior to that of our Common Stock.

In order to raise additional capital, in the future, we may issue other debt securities or equity securities with a liquidation preference senior to that of our Common Stock or debt securities with a liquidation preference senior to that of our Preferred Stock.

In the event of our liquidation, our lenders and holders of our debt and preferred securities could receive a distribution of our available assets before distributions to the holders of our Common Stock.

We may issue securities with rights senior to that of our Common Stock in liquidation which could dilute or negatively affect the value of such securities .

In order to raise additional capital, in the future, we may issue other debt securities or equity securities with a liquidation preference senior to that of our Common Stock.

In the event of our liquidation, the lenders and holders of such senior debt or equity securities could receive a distribution of our available assets before distributions to the holders of our Common Stock.

The issuance of these securities could dilute or negatively affect the value of our Common Stock.

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Internal control over financial reporting is not intended to impart absolute assurance that the Company can prevent or detect misstatements of its financial statement or fraud due to its inherent limitations.

As of January 31, 2024, the Company’s executive officers determined that the Company’s internal control over financial reporting was not effective due to an identified material weakness.

The material weakness involved the Company’s controls over the existence of inventory at its subsidiary location in Singapore.

The Company performed a less-than-complete physical inventory at year-end because it placed reliance on other compensating controls during the year, including cycle counts and controls involving receipt and disbursement of inventory See further discussion of the material weakness, including the Company's remediation procedures, in Item 9A - "Controls and Procedures."

As of January 31, 2023, the Company’s executive officers determined that the Company’s internal control over financial reporting was not effective due to an identified material weakness.

The material weakness involved the Company’s insufficient level of review performed in connection with the analysis of the aggregation of operating segments, which resulted in a misapplication of ASC 280, Segment Reporting.

For the year ended January 31, 2023, we correctly reported segment activity pursuant to the provisions of ASC 280.

In Fiscal 2024, see further discussion of the material weakness, including the Company's remediation procedures, in Item 9A - "Controls and Procedures."

A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

If the current material weakness is not remediated, or if additional material weaknesses or significant deficiencies in the Company’s internal control over financial reporting are discovered or occur in the future, the Company’s consolidated financial statements may contain material misstatements and the Company could be required to restate its financial results.

If a material weakness is identified and not remediated, or if significant deficiencies in the Company’s internal control over financial reporting are discovered or occur in the future, the Company’s consolidated financial statements may contain material misstatements and the Company could be required to restate its financial results.

The failure to maintain an effective system of internal control over financial reporting could limit the Company’s ability to report its financial results accurately and in a timely manner or to detect and prevent fraud and could also cause a loss of investor confidence and decline in the market price of the Company’s Common Stock.

See further discussion of the material weakness, including the Company's remediation procedures, in Item 9A.- “Controls and Procedures.”

See further discussion in Item 9A.- “Controls and Procedures.”

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

What changed 10-K

Item 1A. Risk Factors