What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-09-09 compared with 2021-06-03 · 120 added, 92 removed, 389 unchanged (35% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

April 30, 2021 January 31, 2021

July 31, 2021 January 31, 2021

Current assets:

1 unchanged sentence

Accounts receivable, net of allowance for doubtful accounts of $ 481 and $ 948

at April 30, 2021 and January 31, 2021, respectively

at July 31, 2021 and January 31, 2021, respectively

Inventories, net 11,928 11,453

23 unchanged sentences

1,223 and 1,038 shares issued and

outstanding at April 30, 2021 and January 31, 2021, respectively

outstanding at July 31, 2021 and January 31, 2021, respectively

27,606 23,104

2 unchanged sentences

15,704 and 15,681 shares issued at

April 30, 2021 and January 31, 2021, respectively

July 31, 2021 and January 31, 2021, respectively

Additional paid-in capital

128,519 128,241

Treasury stock, at cost ( 1,931 and 1,929 shares at April 30, 2021 and January 31, 2021, respectively)

Treasury stock, at cost ( 1,931 and 1,929 shares at July 31, 2021 and January 31, 2021, respectively)

( 16,862 ) ( 16,860 )

7 unchanged sentences

(in thousands, except per share data)

For the Three Months Ended April 30,

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

2021 2020 2021 2020

Sale of marine technology products

3 unchanged sentences

Sale of marine technology products

4,583 3,069 8,234 5,772

Total cost of sales 4,583 3,069 8,234 5,772

2,224 2,017 2,767 2,501

Operating expenses:

9 unchanged sentences

Loss from continuing operations before income taxes ( 2,542 ) ( 2,426 ) ( 6,388 ) ( 8,511 )

Benefit (provision) for income taxes 145 ( 342 )

(Provision) benefit for income taxes ( 197 ) 530 ( 52 ) 188

Loss from continuing operations ( 2,739 ) ( 1,896 ) ( 6,440 ) ( 8,323 )

Loss from discontinued operations, net of income taxes ( 283 ) ( 215 )

Income (loss) from discontinued operations, net of income taxes 79 ( 4,708 ) ( 204 ) ( 4,923 )

Net loss $ ( 2,660 ) $ ( 6,604 ) $ ( 6,644 ) $ ( 13,246 )

16 unchanged sentences

(in thousands)

For the Three Months Ended April 30,

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

2021 2020 2021 2020

Net loss attributable to common stockholders $ ( 3,342 ) $ ( 7,163 ) $ ( 7,910 ) $ ( 14,364 )

5 unchanged sentences

(in thousands)

For the Three Months Ended April 30,

For the Six Months Ended July 31,

Cash flows from operating activities:

5 unchanged sentences

Impairment of intangible assets — 2,531

Recovery of doubtful accounts ( 453 ) —

Loss on disposal of discontinued operations — 1,859

(Recovery) provision for doubtful accounts, net of charge offs ( 453 ) 470

Provision for inventory obsolescence 350 234

1 unchanged sentence

Gross profit from sale of other equipment ( 155 ) —

Deferred tax expense — 263

Accounts receivable ( 140 ) 4,404

5 unchanged sentences

Deferred revenue ( 292 ) 87

Net cash (used in) provided by operating activities ( 2,807 ) 929

Net cash used in operating activities ( 7,191 ) ( 2,566 )

Cash flows from investing activities:

2 unchanged sentences

Sale of used lease pool equipment — 2,010

Sale of business, net of cash sold 187 —

Sale of assets held for sale 484 —

Sale of a business 761 —

Net cash provided by investing activities 1,231 1,598

4 unchanged sentences

Preferred stock dividends ( 1,160 ) ( 1,118 )

Net cash used in financing activities ( 33 ) ( 559 )

Proceeds from PPP loans — 1,607

Net cash provided by financing activities 3,383 489

Effect of changes in foreign exchange rates on cash, cash equivalents and restricted cash 22 ( 117 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 2,610 ) 1,471

Net decrease in cash, cash equivalents and restricted cash ( 2,555 ) ( 596 )

Cash, cash equivalents and restricted cash, beginning of period 4,611 3,234

3 unchanged sentences

Income taxes paid $ 147 $ 246

Purchases of seismic equipment held for lease in accounts payable at end of period $ — $ 702

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

17 unchanged sentences

Balances, April 30, 2021 15,704 $ 157 1,059 $ 23,607 $ 128,403 $ ( 16,862 ) $ ( 104,438 ) $ ( 4,299 ) $ 26,568

Net loss — — — — — — ( 2,660 ) — ( 2,660 )

Foreign currency translation — — — — — — — ( 23 ) ( 23 )

Preferred stock offering — — 164 3,999 — — — — 3,999

Common stock offerings — — — — 1 — — — 1

Preferred stock dividends — — — — — — ( 682 ) — ( 682 )

Stock-based compensation — — — — 115 — — — 115

Balances, July 31, 2021 15,704 $ 157 1,223 $ 27,606 $ 128,519 $ ( 16,862 ) $ ( 107,780 ) $ ( 4,322 ) $ 27,318

MIND TECHNOLOGY, INC.

11 unchanged sentences

Balances, April 30, 2020 14,097 $ 141 994 $ 22,104 $ 124,194 $ ( 16,860 ) $ ( 84,511 ) $ ( 4,518 ) $ 40,550

Net loss — — — — — — ( 6,604 ) — ( 6,604 )

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

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

Stock-based compensation — — — — 219 — — — 219

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

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

14 unchanged sentences

In addition, the Company has a history of operating losses and has had negative cash from operating activities.

However, the Company has no funded debt or obligations containing financial covenants, working capital of approximately $ 15.2 million, including cash of approximately $ 2.0 million, backlog of firm orders of approximately $ 11.0 million as of April 30, 2021, the ability, and plans, to reduce costs to maintain positive cash flow, additional equity available to raise further capital, and lease pool equipment being actively marketed for sale.

However, as of July 31, 2021, the Company has no funded debt or obligations containing financial covenants, working capital of approximately $ 16.1 million, including cash of approximately $ 2.1 million, backlog of firm orders of approximately $ 11.7 million, the ability, and plans, to reduce costs to maintain positive cash flow, additional equity available to raise further capital, and lease pool equipment being actively marketed for sale.

Based on these factors, management expects the Company to continue to meet its obligations as they arise over the next twelve months.

4 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 (“fiscal 2021”).

In the opinion of the Company’s management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position as of April 30, 2021, the results of operations for the three months ended April 30, 2021 and 2020, the cash flows for the three months ended April 30, 2021 and 2020, and the statement of stockholders’ equity for the three months ended April 30, 2021 and 2020, have been included in these condensed consolidated financial statements.

In the opinion of the Company’s management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position as of July 31, 2021, the results of operations for the three and six months ended July 31, 2021 and 2020, the cash flows for the six months ended July 31, 2021 and 2020, and the statement of stockholders’ equity for the three and six months ended July 31, 2021 and 2020, have been included in these condensed consolidated financial statements.

The foregoing interim results are not necessarily indicative of the results of operations to be expected for the full fiscal year ending January 31, 2022 (“fiscal 2022”).

3 unchanged sentences

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

As a result, the assets, excluding cash, and liabilities of the Equipment Leasing segment are considered held for sale and the segment’s operations are reported as discontinued operations as of April 30, 2021 and for all comparative periods presented in these condensed consolidated financial statements.

The Company originally anticipated selling the discontinued operations within twelve months from July 27, 2020, in multiple transactions, which may involve the sale of legal entities, assets, or a combination of both, but now anticipates completing the process within the next six months.

As a result, the assets, excluding cash, and liabilities of the Leasing Business are considered held for sale and the operations of the business are reported as discontinued operations as of July 31, 2021 and for all comparative periods presented in these condensed consolidated financial statements.

The Company originally anticipated selling the discontinued operations in multiple transactions, which may involve the sale of legal entities, assets, or a combination of both, within the twelve months ending July 31, 2021.

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

April 30, 2021 January 31, 2021

July 31, 2021 January 31, 2021

Current assets of discontinued operations:

5 unchanged sentences

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

April 30, 2021 January 31, 2021

July 31, 2021 January 31, 2021

Current liabilities of discontinued operations:

2 unchanged sentences

Accrued expenses and other current liabilities 611 831

Income taxes payable (receivable) ( 29 ) —

Total liabilities of discontinued operations 705 963

The results of operations from discontinued operations for the three months ended April 30, 2021 and 2020, consist of the following:

For the Three Months Ended April 30,

The results of operations from discontinued operations for the three and six months ended July 31, 2021 and 2020, consist of the following:

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

2021 2020 2021 2020

Revenue from discontinued operations $ 757 $ 1,230 $ 787 $ 5,418

3 unchanged sentences

Selling, general and administrative 378 1,476 720 3,176

Recovery of doubtful accounts ( 443 ) —

Provision for doubtful accounts ( 2 ) 470 ( 445 ) 470

Depreciation and amortization 2 41 3 85

Total operating expenses 378 1,987 278 3,731

Operating loss ( 243 ) ( 40 )

Operating income (loss) 47 ( 2,399 ) ( 196 ) ( 2,439 )

Other income (expenses) 35 72 ( 4 ) 75

Loss before income taxes ( 282 ) ( 37 )

Loss on disposal (including $ 2,745 of cumulative translation loss)

— ( 1,859 ) — ( 1,859 )

Income (loss) before income taxes 82 ( 4,186 ) ( 200 ) ( 4,223 )

Provision for income taxes ( 3 ) ( 522 ) ( 4 ) ( 700 )

Net loss ( 283 ) ( 215 )

Net income (loss) 79 ( 4,708 ) ( 204 ) ( 4,923 )

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

For the Three Months Ended April 30,

For the Six Months Ended July 31,

Depreciation and amortization $ — $ 1,771

Gross profit from sale of lease pool equipment $ — $ ( 1,324 )

Recovery of doubtful accounts $ 443 $ —

Purchase of seismic equipment held for lease $ — $ ( 110 )

(Recovery) provisions for doubtful accounts $ ( 445 ) $ 470

Loss on disposal of discontinued operations $ — $ 1,859

Sale of used lease pool equipment $ — $ 1,988

14 unchanged sentences

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

Three Months Ended April 30,

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

2021 2020 2021 2020

Revenue recognized at a point in time:

11 unchanged sentences

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

Three Months Ended April 30,

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

2021 2020 2021 2020

(in thousands)

United States $ 219 $ 686 $ 578 $ 1,786

Europe, Russia & CIS 2,582 1,376

Europe 3,520 1,604 6,102 2,980

Middle East & Africa 675 221 689 297

2 unchanged sentences

Total revenue from contracts with customers $ 6,807 $ 5,086 $ 11,001 $ 8,273

As of April 30, 2021, and January 31, 2020, contract assets and liabilities consisted of the following:

April 30, 2021 January 31, 2021

As of July 31, 2021, and January 31, 2021, contract assets and liabilities consisted of the following:

July 31, 2021 January 31, 2021

Contract Assets:

4 unchanged sentences

Deferred revenue & customer deposits - current $ 399 $ 691

Deferred revenue & customer deposits - non-current — —

Total deferred revenue & customer deposits $ 399 $ 691

5 unchanged sentences

Balance Sheet - Continuing Operations

As of April 30, 2021 As of January 31, 2021

Current Long-term Total Current Long-term Total

As of July 31, 2021 As of January 31, 2021

(in thousands)

Accounts receivable $ 5,581 $ 5,695

1 unchanged sentence

Accounts receivable net of allowance for doubtful accounts $ 5,100 $ 4,747

April 30, 2021 January 31, 2021

July 31, 2021 January 31, 2021

(in thousands)

5 unchanged sentences

Total inventories, net $ 11,928 $ 11,453

April 30, 2021 January 31, 2021

July 31, 2021 January 31, 2021

(in thousands)

7 unchanged sentences

Total property and equipment, net $ 4,440 $ 4,751

As of January 31, 2021, the Company completed an annual review of long-lived assets noting that the undiscounted future cash flows exceeded their carrying value and no impairment has been recorded.

Since January 31, 2021, there have been no significant changes to the market, economic or legal environment in which the Company operates that would indicate additional impairment analysis is necessary as of April 30, 2021.

As of January 31, 2021, the Company completed an annual review of long-lived assets noting that the undiscounted future cash flows exceeded their carrying value and no impairment was recorded.

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.

We negotiated the termination of our Colombia lease obligation during the current period.

Lease expense for the three months ended April 30, 2021 was approximately $ 309,000 and was recorded as a component of operating loss.

Included in these costs was short-term lease expense of approximately $ 10,000 for the three months ended April 30, 2021.

Supplemental balance sheet information related to leases as of April 30, 2021 and January 31, 2021 were as follows (in thousands):

Lease April 30, 2021 January 31, 2021

Lease expense for the three and six months ended July 31, 2021 was approximately $ 291,000 and $ 600,000 , respectively, and was recorded as a component of operating loss.

Included in these costs was short-term lease expense of approximately $ 10,000 and $ 10,000 , respectively, for the three and six months ended July 31, 2021.

Supplemental balance sheet information related to leases as of July 31, 2021 and January 31, 2021 were as follows (in thousands):

Lease July 31, 2021 January 31, 2021

Operating lease assets

7 unchanged sentences

Total Operating lease liabilities $ 1,568 $ 1,471

Lease-term and discount rate details as of April 30, 2021 and January 31, 2021 were as follows:

Lease term and discount rate April 30, 2021 January 31, 2021

Lease-term and discount rate details as of July 31, 2021 and January 31, 2021 were as follows:

Lease term and discount rate July 31, 2021 January 31, 2021

Weighted average remaining lease term (years)

4 unchanged sentences

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

Lease Three Months Ended April 30, 2021 Three Months Ended April 30, 2020

Lease Six Months Ended July 31, 2021 Six Months Ended July 31, 2020

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

3 unchanged sentences

Operating leases

Maturities of lease liabilities at April 30, 2021 were as follows (in thousands):

April 30, 2021

Maturities of lease liabilities at July 31, 2021 were as follows (in thousands):

July 31, 2021

Total payments under lease agreements $ 1,738

2 unchanged sentences

Goodwill and Other Intangible Assets

Weighted Average Life at 4/30/2021 April 30, 2021 January 31, 2021

Weighted Average Life at 7/31/2021 July 31, 2021 January 31, 2021

Amount Accumulated

Amortization Impairment Net

Amortization Accumulated Impairment Net

Amount Accumulated

10 unchanged sentences

As a result, no further review of goodwill is required.

On January 31, 2021, the Company completed an annual review of intangible assets.

Based on a review of qualitative factors it was determined it was more likely than not that the carrying value of intangible assets was greater than its fair market value.

During the three months ended April 30, 2021 there have been no substantive indicators of impairment.

Aggregate amortization expense was $ 412,000 and $ 460,000 for the three months ended April 30, 2021 and 2020, respectively.

As of April 30, 2021, future estimated amortization expense related to amortizable intangible assets was estimated to be (in thousands):

On January 31, 2021, the Company completed an annual review of amortizable intangible assets.

Based on a review of qualitative factors it was determined it was more likely than not that the fair market value of intangible assets was greater than its carrying value.

During the six months ended July 31, 2021, there have been no substantive indicators of impairment.

Aggregate amortization expense was $ 618,000 and $ 794,000 for the six months ended July 31, 2021 and 2020, respectively.

As of July 31, 2021, future estimated amortization expense related to amortizable intangible assets was estimated to be (in thousands):

For fiscal years ending January 31

4 unchanged sentences

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

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

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.

In the event of default, the Borrowers may become obligated to repay all amounts outstanding under the Notes.

The Borrowers may prepay the Notes at any time prior to maturity with no prepayment penalties.

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.

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

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

The Notes stipulated 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.

In the event of default, the Borrowers would have become obligated to repay all amounts outstanding under the Notes.

The Borrowers were permitted to prepay the Notes at any time prior to maturity with no prepayment penalties.

Under the terms of the PPP, funds from the Loans could only be used for payroll costs, rent, utilities and interest on other debt obligations incurred prior to February 15, 2020.

In addition, certain amounts of the Loans could be forgiven if the funds were used to pay qualifying expenses.

In January 2021, the Loan granted to the Company in the amount of approximately $ 757,000 was forgiven resulting in other income of that amount.

In February 2021, the Loan granted to Klein in the amount of approximately $ 850,000 was also forgiven, resulting in other income of that amount.

As of April 30, 2021, the Company had no outstanding balance under the Loans.

For the three months ended April 30, 2021, the benefit for income taxes from continuing operations was approximately $ 145,000 on a pre-tax net loss from continuing operations of $ 3.8 million.

For the three months ended April 30, 2020, the expense for income taxes from continuing operations was approximately $ 342,000 on a pre-tax net loss from continuing operations of $ 6.1 million.

As of July 31, 2021, the Company had no outstanding balance under the Loans.

For the six months ended July 31, 2021, the income tax expense from continuing operations was approximately $ 52,000 on a pre-tax net loss from continuing operations of $ 6.4 million.

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

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

3 unchanged sentences

The Company's U.S.

federal tax returns are subject to examination by the Internal Revenue Service for fiscal years ended January 31, 2017 through 2021.

The Company’s tax returns may also be subject to examination by state and local tax authorities for fiscal years ended

January 31, 2015 through 2021.

federal tax returns are subject to examination by the Internal Revenue Service for fiscal years ended January

31, 2018 through 2021.

The Company’s tax returns may also be subject to examination by state and local tax authorities for fiscal years ended January 31, 2016 through 2021.

In addition, the Company's tax returns filed in foreign jurisdictions are generally subject to examination for the fiscal years ended January 31, 2016 through 2021.

The Company has determined that the undistributed earnings of foreign subsidiaries are not deemed to be indefinitely reinvested outside of the United States as of April 30, 2021.

The Company has determined that the undistributed earnings of foreign subsidiaries are not deemed to be indefinitely reinvested outside of the United States as of July 31, 2021.

Furthermore, the Company has concluded that any deferred taxes with respect to the undistributed foreign earnings would be immaterial.

Therefore, the Company has no t recorded a deferred tax liability associated with the undistributed foreign earnings as of April 30, 2021.

For the three months ended April 30, 2021 and 2020, the Company did no t recognize any tax expense or benefit related to uncertain tax positions.

Therefore, the Company has no t recorded a deferred tax liability associated with the undistributed foreign earnings as of July 31, 2021.

For the six months ended July 31, 2021 and 2020, the Company did no t recognize any tax expense or benefit related to uncertain tax positions.

Earnings per Share

3 unchanged sentences

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

Three Months Ended April 30,

(in thousands)

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

2021 2020 2021 2020

(in thousands) (in thousands)

Basic weighted average common shares outstanding 13,774 12,182 13,767 12,177

3 unchanged sentences

Diluted weighted average common shares outstanding 13,882 12,195 13,843 12,183

For the three and months ended April 30, 2021 and 2020, potentially dilutive common shares underlying stock options and unvested restricted stock were anti-dilutive and were therefore not considered in calculating diluted loss per share for those periods.

For the three and six months ended July 31, 2021 and 2020, potentially dilutive common shares underlying stock options and unvested restricted stock were anti-dilutive and were therefore not considered in calculating diluted loss per share for those periods.

Related Party Transaction

2 unchanged sentences

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

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

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

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

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

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

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

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

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

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

During the three months ended April 30, 2021, the Company sold 20,960 shares of Series A Preferred Stock under the 2 nd ATM Offering Program, resulting in net proceeds to the Company of approximately $ 503,000 .

Compensation to the Agent during this period was approximately $ 10,000 , none of which was received by the Non-Executive Chairman of the Board.

During the three months ended April 30, 2021, the Company sold 18,053 shares of Common Stock under the 2 nd ATM Offering Program, resulting in net proceeds to the Company of approximately $ 42,000 .

During the three- and six-month periods ended July 31, 2021, the Company sold 163,780 and 184,740 shares of Preferred Stock under the 2 nd ATM Offering Program, respectively.

Net proceeds from these sales for the three and six months ended July 31, 2021, were approximately $ 4.0 million and $ 4.5 million, respectively, and the Agent received compensation of approximately $ 82,000 and 92,000 ,respectively.

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

During the three- and six-month periods ended July 31, 2021, the Company sold 362 and 18,415 shares of Common Stock under the 2 nd ATM Offering Program, respectively.

Net proceeds from these sales for the three and six months ended July 31, 2021, were approximately $ 1,000 and $ 43,000 .

Compensation to the Agent during this period was approximately $ 1,000 , none of which was received by the Non-Executive Chairman of the Board.

Equity and Stock-Based Compensation

During the three months ended April 30, 2021, the Board declared quarterly dividends of $ 0.5625 per share for our Preferred Stock.

See Note 12 to our condensed consolidated financial statements.

Total compensation expense recognized for stock-based awards granted under the

Company’s equity incentive plan during the three months ended April 30, 2021 and 2020 was approximately $ 109,000 and $ 230,000 , respectively.

During the three months ended July 31, 2021, the Board declared quarterly dividends of $ 0.5625 per share for our Preferred Stock.

As of July 31, 2021, there are 1,223,000 shares of Preferred Stock outstanding with an aggregate liquidation preference of approximately $ 30.6 million.

Total compensation expense recognized for stock-based awards granted under the Company’s equity incentive plan during the three and six months ended July 31, 2021 was approximately $ 115,000 and $ 224,000 , respectively, and during the three and six months ended July 31, 2020 was approximately $ 219,000 and $ 449,000 , respectively.

Segment Reporting

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.

The Marine Technology Products segment is engaged in the design, manufacture and sale of state-of-the-art seismic and offshore telemetry systems.

As a result, no segment reporting is required.

The Marine Technology Products business is engaged in the design, manufacture and sale of state-of-the-art seismic and offshore telemetry systems.

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

9 unchanged sentences

The Company’s corporate headquarters remains in Texas.

Subsequent Event

Subsequent to July 31,2021, we completed an agreement for the sale of lease pool equipment reported as Assets Held for Sale (see Note 3 – “Assets Held for Sale and Discontinued Operations” for additional details) in our condensed consolidated financial statements.

Under the terms of the agreement the Company will receive total proceeds of approximately $ 4.5 million, with approximately $ 2.5 million paid at closing and the balance of approximately $ 2.0 million paid before the end of fiscal 2022.

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

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Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below :

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

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

• loss of significant customers;

• the impact of disruptions in global supply chains due to the COVID-19 pandemic, including increased lead times for components and materials, as well as increased costs for such items;

• the impact of disruptions in global supply chains due to the COVID-19 pandemic and other factors, including certain components and materials becoming unavailable, increased lead times for components and materials, as well as increased costs for such items;

• increased competition;

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

• demand for seismic data is not assured and depends on the level of spending by oil and gas companies for exploration, production and development activities, thereby potentially negatively impacted the value of our assets held for sale.

• fluctuations in demand for seismic data, which is dependent on the level of spending by oil and gas companies for exploration, production and development activities, and may potentially negatively impact the value of our assets held for sale.

For additional information regarding known material factors that could cause our actual results to differ materially from our projected results, please see (1) Part II, “Item 1A.

6 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements