What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-05-01 compared with 2024-04-26 · 388 added, 297 removed, 1017 unchanged (40% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)) under the Exchange Act as of January 31, 2024 .

This evaluation included consideration of the controls, processes and procedures that are designed to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, the certifying officers have concluded that, as of the end of the period covered by this Annual Report on Form 10-K, our disclosure controls and procedures were not effective because of the material weaknesses described below under "Management's Annual Report on Internal Control Over Financial Reporting."

The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of January 31, 2025.

The Company's disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of January 31, 2025, our disclosure controls and procedures were not effective because of the material weaknesses in internal control over financial reporting, as described below.

Management's Annual Report on Internal Control Over Financial Reporting.

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act.

As required by Rule 13a-15(c) under the Exchange Act, the Company's management carried out an evaluation, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of its internal control over financial reporting as of January 31, 2024 .

As required by Rule 13a-15(c) under the Exchange Act, the Company's management carried out an evaluation, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's internal control over financial reporting as of

January 31, 2025

The framework on which such evaluation was based is contained in the report entitled "Internal Control-Integrated Framework" (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company's system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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.

Based on management's evaluation, management has concluded that we did not maintain effective internal control over financial reporting as of January 31, 2024, due to the material weaknesses identified below.

Based on management's evaluation, management has concluded that we did not maintain effective internal control over financial reporting as of

January 31, 2025, due to the material weaknesses identified below.

A material weakness is 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 Company's annual or interim financial statements will not be prevented or detected on a timely basis.

Material Weaknesses Identified in the Period Ended January 31, 2024.

We did not maintain effective information technology general controls ("ITGC") specifically related to the policies and procedures over the timely review of security management and monitoring, user access and security administration, password control, administrative access, program change management, data security and back up, review of third-party SOC 1 reports, and related management's review of the completeness and accuracy of certain system-generated reports.

Additionally, we did not maintain effective controls over certain entity level controls over financial reporting related to the review and approval of manual journal entries, the timely review of the financial close process, and timely review of certain financial policies and procedures and respective HR policies.

We also did not maintain effective controls at certain operating locations in the Middle East and North Africa ("MENA"), specifically we did not maintain sufficient documentation to support our evaluation that controls over business processes were operating effectively.

Material Weakness Identified in the Prior Year Ended January 31, 2023 and Continuing Remediation Plan.

As previously disclosed in the January 31, 2023 10-K, management had identified a material weakness in the Company's internal control over financial reporting regarding the design and operating effectiveness of controls related to the existence of inventory during the fiscal year ended January 31, 2023.

Specifically, the Company failed to appropriately perform cycle count procedures at one of the Company's operating facilities, resulting in a significant adjustment during the full physical inventory count at period end.

Further, management’s review of the process and resulting adjustments on a periodic basis failed to identify the issue.

The material weakness did not result in any material misstatements to the Company’s consolidated financial statements.

The Company's remediation plans progressed during the year ended January 31, 2024, and included hiring of an additional resource with inventory management expertise, engaged outside consultants for additional expertise to review current practices to assist in updating and monitoring inventory count policies and procedures, and performed physical counts periodically throughout the year at the Lebanon, Tennessee plant to supplement the cycle count process.

The Company has also redesigned cycle count parameters to ensure higher value and more active inventory parts are counted more frequently and include additional review by finance and accounting personnel to ensure any necessary adjustments are addressed in a timely manner;

and reviewed and updated physical organization of inventory to better identify and segregate inventory.

Management has determined that with its new control over quarterly physical counts at the plant, along with updated reviews, the Company has changed its controls over the existence of inventory.

As a result, the Company has determined that the material weakness over the existence of inventory at the above Lebanon plant has been remediated as of January 31, 2024.

Remediation Plan for the Material Weaknesses Identified in the Period Ended January 31, 2024.

The remediation plans related to ITGCs include:

(i) addressing the identified issues with control owners, including company leadership and IT personnel;

(ii) engage outside consultants with expertise relating to ITGCs to document processes, assist in addressing the design and operating business process controls, monitoring and testing reviews focusing on systems supporting our financial reporting process (iii) developing and maintaining documentation underlying ITGCs for knowledge transfer and function changes, including access control and change management;

(iv) outsource certain functions to third-party providers, specifically relating to servers and firewalls, and managed detection and response.

The remediation plans related to the entity level controls and business process controls over MENA locations include:

(i) addressing issues with control owners, including company leadership;

(ii) evaluating and updating the Company's evidence of internal control policies and procedures as needed and providing necessary guidance to applicable locations;

(iii) assessing the adequacy and determine whether enhancements are needed to the design of corporate and / or operating locations business process controls;

and (iv) augmenting our internal audit function by hiring an additional resource to assist in overseeing the remediation process, including updating policies and procedures, and implementing internal controls;

(v) engage outside consultants to conduct training sessions.

The Company anticipates the actions described above and resulting improvements in controls will strengthen the Company's processes, procedures and will address the related material weaknesses described above.

However, the material weaknesses cannot be considered fully remediated until the remediation processes have been in operation for a period of time and successfully tested.

The material weaknesses are as follows:

We did not design and maintain effective controls in response ot the risks of material misstatement.

Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement in financial reporting.

This contributed to the following material weaknesses;

We did not design and maintain effective certain controls over financial reporting relating to the review and approval of manual journal entries, review of the financial close process, including the statement of cash flows, and review of certain financial policies and procedures;

We did not design and maintain effective controls at operating locations in the Middle East and North Africa ("MENA"), including not maintaining sufficient documentation to support an evaluation that controls over business processes were designed and operating effectively.

These material weaknesses resulted in adjustments to property, plant, and equipment, net of accumulated depreciation, trade accounts payable, trade accounts receivable, and the statement of cash flows.

These adjustments resulted in a revision of the unaudited consolidated financial statements as of and for the period ended April 30, 2024, a restatement as of and for the period ended July 31, 2024 and material adjustments as of and for the period ended October 31, 2024.

We did not design and maintain effective controls over information technology general controls ("ITGCs"), specifically controls over the timely review of user access and administrative access to adequately restrict access, program change management, computer operations, and program development;

We did not design and maintain effective controls over managements review of the completeness and accuracy of certain system-generated reports.

These material weaknesses did not result in a misstatement to the Company's annual or interim financial statements.

Each of these material weaknesses could result in a material misstatement of substantially all accounts and disclosures in the Company's annual or interim financial statements that would not be prevented or detected on a timely basis.

Remediation Plan for the Material Weaknesses in Internal Control over Financial Reporting

To address these matters, the Company has begun implementing its remediation plan.

Our ongoing remediation plans include the following:

(i) performing an entity wide risk assessment to identify relevant risks and changes to those relevant risks to our financial reporting;

ii) designing and implementing controls to identify and evaluate changes in our business and the impact on our internal control over financial reporting;

(iii) engaging outside consultants with expertise relating to ITGCs to document processes, assist in addressing the design and operating ITGCs, monitoring and testing reviews focusing on systems supporting our financial reporting process (iv) designing and maintaining controls and documentation evidencing those ITGCs for knowledge transfer and function changes, including access and program control and change management, computer operations, and program development, (v) designing and maintaining effective controls to review the completeness and accuracy of certain system-generated reports;

and (vi) outsourcing certain functions to third-party providers, specifically relating to servers and firewalls, and managed detection and response.

Our remediation plans related to entity level controls, financial reporting controls, and business process controls include:

(i) enhancing the design of controls for the review of and posting of journal entries;

(ii) evaluating and updating documented formal accounting policies, financial reporting, processes and procedures;

and overall internal control procedures;

and (iii) updating the design of controls for the preparation and review of the financial close process, including the statement of cash flows.

In addition to the items noted above, our remediation plans related to our MENA locations include:

(i) evaluating and updating the Company's evidence of internal control policies and procedures;

(ii) enhancing the design of controls over business processes that are relevant to our MENA locations;

and (iii) formalizing our financial reporting processes and procedures.

The Company anticipates the actions described above will strengthen the Company's internal control over financial reporting and will address the related material weaknesses described above.

However, the material weaknesses cannot be considered fully remediated until the necessary controls have been appropriately designed and implemented.

The remediation processes and procedures will also need to be in operation for a period of time and management conclude through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting .

While the Company continues to implement design enhancements to our internal control procedures, we believe that, other than the changes described above regarding the ongoing remediation efforts, there were no changes to our internal control over financial reporting which were identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Exchange Act during the fourth quarter of the fiscal year ending January 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes to our internal control over financial reporting which were identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Exchange during the fourth quarter of the fiscal year ended January 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of Registered Public Accounting Firm.

This Annual Report does not contain an attestation report of our independent registered public accounting firm related to internal control over financial reporting because the rules for smaller reporting companies provide an exemption from the attestation requirement.

OTHER INFORMATION - Not applicable.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS - Not applicable.

OTHER INFORMATION

Not applicable.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

11 unchanged sentences

Equity compensation plans approved by stockholders

(1) The amounts shown in columns (a) and (b) of the above table do not include 222,852 outstanding shares of restricted stock granted under the Company's 2013 Omnibus Stock Incentive Plan as amended on June 14, 2013, the 2017 Omnibus Stock Incentive Plan as amended on June 13, 2017 ("2017 Plan") or the 2021 Omnibus Stock Incentive Plan dated May 26, 2021 ("2021 Plan").

(2) The 2017 Plan expired in June 2020.

The 2021 Plan will expire on May 26, 2024.

(1) The amounts shown in columns (a) and (b) of the above table do not include 229,771 outstanding shares of restricted stock granted under the Company's previous stock incentive plans, including the 2021 Omnibus Stock Incentive Plant dated May 26, 2021 ("2021 Plan") and the 2024 Omnibus Stock Incentive Plan dated July 2024 ("2024 Plan").

(2) The 2021 Plan expired on May 26, 2024.

The 2024 Plan will expire in July 2027.

The other information with respect to this item is incorporated herein by reference to the Company's definitive proxy statement for its 2025 annual meeting of stockholders.

1 unchanged sentence

Information with respect to this item is incorporated herein by reference to the Company's definitive proxy statement for its 2025 annual meeting of stockholders.

PRINCIPAL ACCOUNTING FEES AND SERVICES

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information with respect to this item is incorporated herein by reference to the Company's definitive proxy statement for its 2025 annual meeting of stockholders.

5 unchanged sentences

Schedule II - Valuation and Qualifying Accounts

(3) Report of Registered Public Accounting Firm ( PricewaterhouseCoopers LLP , Houston, Texas , Auditor Firm ID 238 )

(4) Report of Registered Public Accounting Firm (Grant Thornton LLP, Houston, Texas, Auditor Firm ID 248)

2 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Perma-Pipe International Holdings, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheet of Perma-Pipe International Holdings, Inc.

and its subsidiaries (the "Company") as of January 31, 2025, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for the year then ended, including the related notes and schedule of valuation and qualifying accounts for the year then ended appearing under Item 15, (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2025, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Specialty Piping Systems and Coating Revenue Recognition under the Input Method

As described in Notes 2 and 4 to the consolidated financial statements, approximately $46 million of the Company’s revenue for year ended January 31, 2025 relates to specialty piping systems and coating revenue recognized over time under the input method.

Under this approach, income is recognized in each reporting period based on the status of the uncompleted contracts and the current estimates of costs to complete.

The amount of revenue recognized is determined by the relationship of costs incurred to the total estimated costs of the contract.

Generally, these contracts are considered a single performance obligation satisfied over time and due to the custom nature of the goods and services, the "over time" method is the most accurate depiction of the Company’s performance as it measures the value of the goods and services transferred to the customer.

Costs include material, labor, and direct costs incurred to satisfy the performance obligations of the contract.

Revenue recognition begins when project costs are incurred.

The principal considerations for our determination that performing procedures relating to specialty piping systems and coating revenue recognition under the input method is a critical audit matter are (i) the significant judgment by management when developing the estimated total costs to complete the contracts and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the total costs to complete.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others, for certain open contracts (i) testing management’s process for developing the estimated total costs to complete and (ii) evaluating the reasonableness of the significant assumptions used by management related to the estimated total costs to complete.

Evaluating the reasonableness of the significant assumptions related to the estimated total costs to complete involved considering (i) the terms of the contracts and other documents that support those estimates ;

(ii) using actual costs to date to assess the reasonableness of the estimate of the remaining costs to complete the contract;

and (iii) performing a retrospective review of certain open contracts as of January 31, 2024 to evaluate actual costs incurred to estimated costs.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

We have served as the Company’s auditor since 2024.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

1 unchanged sentence

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Perma-Pipe International Holdings, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of January 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the two years in the period ended January 31, 2024, and the related notes and financial statement schedule included in Item 15(a) (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended January 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Perma-Pipe International Holdings, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of January 31, 2024, the related consolidated statement

of operations, comprehensive income, stockholders’ equity, and cash flows for the period ended January 31, 2024, and the related notes and financial statement schedule included in Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2024, and the results of its operations and its cash flow for the period ended January 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue at U.S.

operating entities for specialty piping systems and coating is recognized using the input method over time

As described further in Note 2 and 4 to the consolidated financial statements, the Company’s U.S.

operating entities record specialty piping and coating systems revenue over time based upon the costs incurred to date relative to the estimated total contract costs.

Significant changes in estimates could have a material effect on the Company’s results of operations.

We identified revenue being recognized using the input method over time as a critical audit matter.

The principal considerations for our determination that revenue recognition using the input method over time is a critical audit matter are the Company’s estimates include the forecasted costs to complete the contract that may vary significantly from past estimates due to changes in facts and circumstances.

These estimates are based on management’s assessment of the current status of the contract and historical results.

Our audit procedures included the following, among others:

• Obtained supporting documentation for a sample of contract costs incurred to date as well as recalculated revenue recognition based on the percentage of completion;

• Evaluated the reasonableness of management's estimates related to the cost to complete for contracts through testing of the key components of the estimated costs to complete;

• Performed a retrospective review to assess management's historical ability to accurately estimate the transaction price and cost to complete the contracts including investigating significant cost changes;

• Obtained confirmations of significant contract terms for certain significant new contracts.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2004.

We have served as the Company’s auditor from 2004 to 2024.

Houston, Texas

April 26, 2024

April 26, 2024 (except for Note 13, as to which the date is May 1, 2025)

PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

16 unchanged sentences

Interest expense

Other (expense) income

Other income (expense)

107 ( 1,202 )

Income before income tax

Income tax (benefit) expense

Income tax expense (benefit)

5,377 ( 3,320 )

13,091 13,211

Net income attributable to non-controlling interest

11 unchanged sentences

Year ended January 31,

$ 13,211 $ 5,945

Other comprehensive income (loss)

Other comprehensive income

Currency translation adjustments, net of tax

898 ( 4,592 )

Minimum pension liability adjustment, net of tax

Comprehensive income (loss)

$ 14,109 $ 2,600

Comprehensive income

Comprehensive income attributable to non-controlling interest

Total comprehensive income attributable to common stock

$ 11,369 $ 2,600

See accompanying Notes to Consolidated Financial Statements.

43 unchanged sentences

Long-term finance obligation

11,551 11,788

Deferred compensation liabilities

11 unchanged sentences

60,151 60,063

Treasury stock, 112 shares at January 31, 2024 and 3 shares at January 31, 2023

( 968 ) ( 26 )

Treasury stock, no shares at January 31, 2025 and 112 shares at January 31, 2024

Retained earnings

20,104 12,088

Accumulated other comprehensive loss

10 unchanged sentences

Additional Paid-in Capital

(Accumulated Deficit) Retained Earnings

Retained Earnings

Treasury Stock

8 unchanged sentences

- - - ( 942 ) - ( 942 )

Retirement of treasury stock

( 2 ) ( 2,033 ) 2,035 -

Stock-based compensation expense

- 913 - - - 913

Pension liability adjustment

Acquisition-related adjustment

- ( 3,138 ) - - - ( 3,138 )

6 unchanged sentences

1 ( 126 ) - - - ( 125 )

Repurchase of common stock

Retirement of treasury stock

( 1 ) - ( 967 ) 968 - -

1 unchanged sentence

- 860 - - - 860

Acquisition-related adjustment

Amount attributable to non-controlling interest

- ( 646 ) - - - ( 646 )

5 unchanged sentences

8,016,781 8,007,002

Treasury stock purchased

Treasury stock retired

( 112,015 ) -

Shares issued, net of shares used for tax withholding

1 unchanged sentence

Prior year adjustments

( 56,947 ) ( 234,281 )

Balance end of year

7 unchanged sentences

Operating activities

$ 13,211 $ 5,945

Adjustments to reconcile net income to net cash provided by (used in) operating activities

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

Deferred tax expense (benefit)

( 6,920 ) 479

Stock-based compensation expense

Non-cash pension termination

Provision on uncollectible accounts

(Gain) loss on disposal of fixed assets

Gain from insurance recovery

Changes in operating assets and liabilities

1 unchanged sentence

Accrued compensation and payroll taxes

( 830 ) ( 1,505 )

Proceeds from insurance recovery for inventory

Customers' deposits

2,315 ( 336 )

Income taxes receivable and payable

Prepaid expenses and other current assets

( 2,849 ) ( 123 )

Accounts receivable

( 4,859 ) ( 3,232 )

Costs and estimated earnings in excess of billings on uncompleted contracts

( 1,218 ) ( 351 )

Unbilled accounts receivable

( 5,053 ) ( 9,814 )

Other assets and liabilities

Net cash provided by (used in) operating activities

14,731 ( 1,241 )

Net cash provided by operating activities

Investing activities

Capital expenditures

( 11,106 ) ( 6,975 )

Proceeds from insurance recovery for property and equipment

1 unchanged sentence

Net cash used in investing activities

( 11,098 ) ( 6,382 )

Financing activities

Proceeds from revolving lines

155,706 96,903

Payments of debt on revolving lines

( 156,996 ) ( 91,438 )

Payments of principal on finance obligation

( 118 ) ( 88 )

Payments of other debt

( 243 ) ( 263 )

Decrease in drafts payable

Payments on finance lease obligations, net

( 193 ) ( 338 )

Repurchase of common stock

( 942 ) ( 69 )

Stock options exercised and taxes paid related to restricted shares vested

( 273 ) ( 206 )

Net cash (used in) provided by financing activities

( 3,256 ) 4,543

Net cash used in financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

447 ( 2,978 )

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash - beginning of period

Cash, cash equivalents and restricted cash - end of period

$ 7,240 $ 6,793

Supplemental cash flow information

Interest paid

$ 2,285 $ 2,045

Income taxes paid

Fixed assets acquired under capital leases - non-cash

Fixed assets acquired under financing leases - non-cash

Fixed assets acquired - non-cash

See accompanying notes to consolidated financial statements.

3 unchanged sentences

YEARS ENDED JANUARY 31, 2025 AND 2024

(In thousands, except per share data, or unless otherwise specified)

(Tabular amounts in thousands, except per share data, or unless otherwise specified)

Note 1 - Business information

Perma-Pipe International Holdings, Inc.

("PPIH", the "Company", or the "Registrant") was incorporated in Delaware on October 12, 1993.

("PPIH", the "Company", "we", "our" or the "Registrant") was incorporated in Delaware on October 12, 1993.

The Company is engaged in the manufacture and sale of products in one distinct segment:

43 unchanged sentences

Shipping and handling costs are included in cost of sales, and the amounts invoiced to customers relating to shipping and handling are included in net sales.

Sales tax is reported on a net basis in the consolidated financial statements.

Operating cycle.

8 unchanged sentences

dollars at exchange rates in effect at year-end.

Revenues and expenses are translated at weighted average exchange rates prevailing during the year.

Revenues and expenses are translated at average exchange rates prevailing during the year.

The resulting translation adjustments are included in stockholders' equity as part of accumulated other comprehensive loss.

9 unchanged sentences

All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents.

Cash and cash equivalents were $ 5.8 million as of January 31, 2024 and 2023 , respectively.

Cash and cash equivalents was $ 15.7 million and $ 5.8 million as of January 31, 2025 and 2024 , respectively.

On January 31, 2025 , $ 0.3 million was held in the United States and $ 15.4 million was held by foreign subsidiaries.

16 unchanged sentences

Standard payment terms are generally net 30 to 60 days.

The allowance for doubtful accounts is based on specifically identified amounts in customers' accounts, where future collectability is deemed uncertain.

Management may exercise its judgment in adjusting the provision as a consequence of known items, such as current economic factors and credit trends.

The Company maintains an allowance for credit losses for accounts receivable.

The assessment of the allowance for credit losses involves certain judgments and estimates.

Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts.

The Company may also establish an allowance for credit losses for specific receivables when it is probable that a specific receivable will not be collected and the loss can be reasonably estimated.

Past due trade accounts receivable balances are written off when the Company's collection efforts have been unsuccessful in collecting the amount due and the amount is deemed uncollectible.

The write off is recorded against the allowance for doubtful accounts.

The write off is recorded against the allowance for credit losses.

For the years ended January 31, 2025 and 2024 , respectively, no one customer accounted for greater than 10% of the Company's consolidated net sales.

8 unchanged sentences

Accumulated other comprehensive loss.

Accumulated other comprehensive loss represents the change in equity from non-owner transactions and consisted of foreign currency translation and minimum pension liability.

Accumulated other comprehensive loss represents the change in equity from non-owner transactions and consists of foreign currency translation.

Equity adjustment foreign currency, gross

$ ( 8,522 ) $ ( 5,804 )

Minimum pension liability, gross

Subtotal excluding tax effect

( 5,804 ) ( 6,707 )

Tax effect of equity adjustment foreign currency

Tax effect of minimum pension liability

Total accumulated other comprehensive loss

34 unchanged sentences

The Company's assessment of long-lived assets and other identifiable intangibles is based upon factors that market participants would use in accordance with the accounting guidance for the fair value measurement of assets.

At January 31, 2024 , the Company performed an assessment to determine whether there were any triggering events that may have occurred which could indicate that the carrying value of the Company's long-lived assets are not recoverable, and an impairment may exist.

Based on this assessment, the Company did not identify any triggering events that would indicate that the carrying amounts may not be recoverable with respect to long-lived assets for the year ended January 31, 2024 .

The Company will continue testing for potential impairment at least annually or as otherwise required by applicable accounting standards.

At January 31, 2025 , the Company performed an assessment to determine whether there were any triggering events that may have occurred which could indicate that the carrying value of the Company's long-lived assets are not recoverable.

Based on this assessment, the Company did not identify any triggering events that would indicate that the carrying amounts may not be recoverable with respect to long-lived assets.

Accordingly, there was no impairment charge for the year ended January 31, 2025 .

The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recorded as goodwill.

8 unchanged sentences

The Company performs an impairment assessment of goodwill annually as of January 31, or more frequently if triggering events occur, based on the estimated fair value of the related reporting unit or intangible asset.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

At January 31, 2024 , the Company performed a qualitative assessment to determine whether there were any triggering events that may have occurred which could indicate that more likely than not that the fair value of the reporting unit did not exceed its carrying value, resulting in an impairment.

At January 31, 2025 , the Company performed a qualitative assessment to determine whether there were any triggering events that may have occurred which could indicate that more likely than not that the fair value of the reporting unit did not exceed its carrying amount.

Based on this assessment, the Company did not identify any triggering events that would indicate that the fair value is less than the carrying value of the reporting unit for the year ended January 31, 2025 .

The Company will continue testing for impairment at least annually as of January 31, or as otherwise required by applicable accounting standards.

Accordingly, performing a quantitative goodwill impairment test was not required.

Other intangible assets with definite lives.

4 unchanged sentences

Accumulated amortization was approximately $ 2.6 million as of January 31, 2025 and 2024 .

Amortization over the next five fiscal years will be less than $ 0.1 million and less than $0.1 million thereafter.

Amortization over the next five fiscal years will be less than $ 0.1 million and an insignificant amount thereafter.

Amortization expense is expected to be recognized over the weighted-average period of 9.1 years.

7 unchanged sentences

The Company assesses its deferred tax assets and liabilities for realizability at each reporting period.

A valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

The Company recognizes a tax position in its consolidated financial statements only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

6 unchanged sentences

Fair value of financial instruments .

The carrying values of cash and cash equivalents, accounts receivable and accounts payable are based upon reasonable estimates of their fair value due to their short-term nature.

The Company classifies cash and cash equivalents, accounts receivable, and accounts payable based on carrying values that approximate their fair value due to the short-term nature of these instruments.

The carrying amount of the Company's short-term debt, revolving line of credit and long-term debt approximate fair value because the majority of the amounts outstanding accrue interest at variable rates.

2 unchanged sentences

The Company reported net income in 2024 and 2023 .

Therefore, the Company adjusted for dilutive shares in 2023 and 2022 , assuming conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect on earnings per share.

The Company adjusted for dilutive shares in 2024 and 2023 , assuming conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect on earnings per share.

The dilutive shares are in the following table:

5 unchanged sentences

Canceled options during the year

( 17 ) ( 11 )

Restricted stock and stock options with an exercise price below the average stock price

11 unchanged sentences

See Note 11 - Treasury stock for further detail.

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker ("CODM") in making decisions regarding resource allocation and assessing performance the Company’s Chief Executive Officer is the CODM, and he uses a combination of several management reports, including the Company's financial information in determining how to allocate resources and assess performance.

The Company has determined that it operates in one segment.

The Company’s Chief Executive Officer is the CODM, and he uses the Company's consolidated financial information in determining how to allocate resources and assess performance.

The Company has determined that it operates as one segment.

Recent accounting pronouncements .

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

2016 - 13, Financial Instruments-Credit Losses ( Topic 326 ):

Measurement of Credit Losses on Financial Instruments .

The new guidance affects loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash.

The amended guidance requires the application of a current expected credit loss ("CECL") model, which measures credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts.

This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and as subsequently amended and extended to December 15, 2022.

The Company adopted this guidance effective February 1, 2023, which did not have a material impact on the consolidated financial statements.

In November 2023, the FASB issued ASU No.

3 unchanged sentences

The additional segment disclosures are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company is still evaluating the impact of these updated disclosure requirements on its consolidated financial statements.

The Company adopted this standard update in fiscal 2024.

The standard adoption resulted in additional disclosures but did not have a material impact on the consolidated financial statements.

See Note 13 - Segment reporting, in the Notes to Consolidated Financial Statements for related disclosures.

In December 2023, the FASB issued ASU No.

2 unchanged sentences

Pursuant to this standard update, companies are required to provide additional information, which is primarily attributable to the rate reconciliation and income taxes paid.

The new income tax disclosures are effective for fiscal years beginning after December 15, 2024.

The standard update is to be applied prospectively, with retrospective application permitted.

The new income tax disclosures are effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is still evaluating this standard update but does not expect it to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024 - 03, Income Statement - Disaggregation of Income Statement Expenses (Subtopic 220 - 40 ) .

The standard update requires additional disclosures related to the disaggregation of income statement expenses.

The disaggregation of income statement expense disclosures set forth in this standard update is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is still evaluating the impact this standard update but does not expect it to have a material impact on its consolidated financial statements.

Note 3 - Retention

A retention receivable is a portion of an outstanding receivable balance amount withheld by a customer until a contract is fully completed as specified in the contract.

Retention receivables of $ 2.5 million and $ 2.4 million were included in the balance of trade accounts receivable as of January 31, 2024 and 2023 , respectively.

A retention receivable of $ 1.7 million and $ 2.9 million was included in the balance of other long-term assets as of January 31, 2024 and 2023 , respectively, due to the long-term nature of the receivables.

As of January 31, 2025 and 2024 , the Company had short-term retention receivables of $ 3.3 million and $ 2.4 million, respectively, which were included as a component of trade accounts receivable.

Additionally, the Company had long-term retention receivables of $ 2.6 million and $ 1.7 million as of January 31, 2025 and 2024 , respectively.

The long-term retention receivable balances were included as a component of other long-term assets in the Company's consolidated balance sheets.

See Note 2 - Accounts receivable for further information regarding the future realization of these long-term balances.

In 2015, the Company completed a project in the Middle East with billings in the aggregate amount of approximately $ 41.9 million.

The system has not yet been commissioned by the customer.

2015, the Company completed a project in the Middle East with billings in the aggregate amount of approximately

$ 41.9 million.

The system has

not yet been commissioned by the customer.

Nevertheless, the Company has settled approximately $

40.1 million as of

January 31, 2024

, with a remaining balance due in the amount of $

January 31, 2025 , with a remaining balance due in the amount of $

1.8 million, all of which pertains to retention clauses within the agreements with the Company's customer, and which become payable by the customer when this project is fully tested and commissioned.

1 unchanged sentence

1.2 million is classified as a long-term asset.

The Company has been actively involved in ongoing efforts to collect the outstanding amount.

The Company continues to engage with the customer to ensure full payment of open balances, and at various times throughout 2023 and in June 2022, the Company received a partial payment to settle $ 0.6 million and $ 0.9 million of the customer's outstanding balances, respectively.

Further, the Company has been engaged by the customer to perform additional work in

under customary trade terms that supports the continued cooperation between the Company and the customer.

As a result, the Company did not reserve any allowance against the remaining outstanding balances as of

January 31, 2024

However, if the Company’s efforts to collect on this account are not successful, the Company may recognize an allowance for all, or substantially all, of any such then uncollected amounts.

The Company has been actively engaged in ongoing collection efforts with the customer to ensure full payment of open balances, and at various times throughout 2025 and 2024 , the Company received a partial payment to settle $ 0.4 million and $ 0.6 million of the customer's outstanding balances, respectively, including an additional $ 0.6 million that was received subsequent to the end of the year.

Additionally, the Company has been engaged by the customer to perform additional work in 2025 under customary trade credit terms that support the continued cooperation between the Company and the customer.

As a result, the Company did not reserve any allowance against this outstanding receivable as of January 31, 2025 .

However, if the Company's efforts to collect on this account are not successful, the Company may recognize an allowance for all, or substantial all, of any such uncollected amounts.

For further information regarding accounts receivable, see Note 2 - Significant accounting policies, in the Notes to Consolidated Financial Statements.

18 unchanged sentences

$ 158,384 100 % $ 150,668 100 %

The input method as noted in ASC 606 - 10 - 55 - 20 is used by certain operating entities to measure revenue by the costs incurred to date relative to the estimated costs to satisfy the contract over time.

Generally, these contracts are considered a single performance obligation satisfied over time and due to the custom nature of the goods and services, the "over time" method is the most faithful depiction of the Company’s performance as it measures the value of the goods and services transferred to the customer.

The input method is used by certain operating entities to measure revenue by the costs incurred to date relative to the estimated costs to satisfy the contract over time.

Costs include all material, labor, and direct costs incurred to satisfy the performance obligations of the contract.

Revenue recognition begins when projects costs are incurred.

The output method as noted in ASC 606 - 10 - 55 - 17 is used by all other operating entities to measure revenue by the direct measurement of the outputs produced relative to the remaining goods promised under the contract.

The output method is used by all other operating entities to measure revenue by the direct measurement of the outputs produced relative to the remaining goods promised under the contract.

Due to the types of end customers, generally these contracts require formal inspection protocols or specific export documentation for units produced, or produced and shipped, therefore, the output method is the most faithful depiction of the Company’s performance.

4 unchanged sentences

Provisions are made for estimated losses on uncompleted contracts in the contract liabilities account in the period in which such losses are determined.

The transaction price associated with the Company's contracts with customers are generally determined based on the fixed amount of consideration as specified in a contract.

This may also include variable consideration in certain instances where it is considered probable that a significant reversal of cumulative revenue recognized will not occur.

As a result, the amount of consideration ultimately received from the customer can fluctuate due to the variability of future events stated in a contract.

Therefore, the aggregate amount of the transaction price includes the fixed consideration contained in a contract that is generally not subject to change and excludes sales and value added taxes, or amounts collected on behalf of third parties, along with any variable consideration.

The total transaction price is then allocated to the performance obligations which is eventually recognized as revenue based on the project type and the method that is used to measure the transfer of promised goods and services to customers.

The transaction price associated with the Company's contracts with customers are generally determined based on the fixed amount of consideration as specified in a contract that is generally not subject to change.

Additionally, from time to time the transaction price may also include variable consideration in certain instances where it is deemed probable that a significant reversal of cumulative revenue recognized will not occur.

The aggregate of these amounts represents the total transaction price, which excludes amounts that are attributable to sales and value added taxes, or amounts collected on behalf of third parties.

The total transaction price is then allocated to the performance obligations that is eventually recognized as revenue based on the project type and the method that is used to measure the transfer of promised goods and services to customers.

Additionally, transaction prices relating to cost-plus contracts are determined by applying the applicable profit margin to costs incurred on contracts, whereas transaction prices relating to fixed price contracts are determined on a lump-sum basis.

34 unchanged sentences

Costs to obtain a contract are not considered to be incremental or material, and project duration generally does not span more than one year.

Accordingly, the Company applies the practical expedient for these types of costs and as such, are expensed in the period incurred.

Accordingly, the Company applies a practical expedient for these types of costs and as such, are expensed in the period incurred.

As a result of the Company's contracts having a duration of less than one year, a practical expedient was applied regarding disclosure of the aggregate amount and future timing of performance obligations that are unsatisfied or partially satisfied as of the end of the reporting period.

4 unchanged sentences

Revolving lines - foreign

Term loan - foreign

Loan payable to GIG

8 unchanged sentences

$ 9,253 $ 9,590

Unamortized debt issuance costs

Total short-term debt

$ 9,253 $ 9,590

The following table summarizes the Company's scheduled maturities on January 31:

The following table summarizes the Company's scheduled maturities in each of the next five fiscal years:

Revolving line - North America

42 unchanged sentences

Finance obligation - buildings and land.

On April 14, 2021, the Company entered into a purchase and sale agreement (the "Purchase and Sale Agreement").

On April 14, 2021, the Company entered into a purchase and sale agreement (the "Purchase and Sale Agreement") to sell its land and building in Lebanon, Tennessee (the "Property").

Pursuant to the terms of the Purchase and Sale Agreement, the Company sold the Property for $ 10.4 million.

4 unchanged sentences

Under the Lease Agreement, the Company has four consecutive options to extend the term of the lease by five years for each such option.

As of January 31, 2024 and 2023 , the Company had a net book value relating to this asset of $ 1.9 million and $ 2.1 million, respectively.

As of January 31, 2025 and 2024 , the Company had a net book value relating to this asset o f $ 1.8 million and $ 1.9 million, respectively.

In accordance with ASC 842, Leases , this transaction was recorded as a failed sale and leaseback as the present value of lease payments exceeded substantially all of the fair value of the underlying asset.

2 unchanged sentences

The net carrying amount of the financial liability and remaining assets will be zero at the end of the lease term.

Revolving lines - foreign .

Revolving lines -

The Company also has credit arrangements used by its Middle Eastern subsidiaries in the U.A.E., Egypt, and Saudi Arabia as further described below:

3 unchanged sentences

Dirhams (approximately $

2.2 million at

January 31, 2025 ) from a bank in the U.A.E.

January 31, 2025 , the facility has an interest rate of approximately

7.9 % and expires in

The Company had borrowed an aggregate of

$ 0.4 million and

$ 0.2 million

as of January 31, 2025 and

January 31, 2024 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

January 31, 2025 and

January 31, 2024 , the Company had unused borrowing availability of approximately

$ 1.6 million and

$ 1.9 million, respectively.

The Company has a revolving line for

65.2 million U.A.E.

Dirhams (approximately $

17.7 million at

January 31, 2025 ) from a bank in the U.A.E.

January 31, 2025 , the facility has an interest rate of approximately

7.9 % and expires

in August 2025.

The Company had borrowed an aggregate of $ 0.1 million as of January 31, 2025 and January 31, 2024 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

January 31, 2025 and

January 31, 2024 , the Company had unused borrowing availability of approximately

$ 9.0 million and

$ 1.0 million, respectively.

June 2021, and as renewed or amended subsequently thereafter, the Company's Egyptian subsidiary entered into a credit arrangement with a bank in Egypt for a revolving line of

100.0 million Egyptian Pounds (approximately $

2.0 million at

January 31, 2025 ).

) from a bank in the U.A.E.

as of January 31, 2024 , the facility has an interest rate of approximately

and is set to expire in May 2024.

The Company had borrowed an aggregate of $ 0.2 million and $ 0.6 million as of January 31, 2024 and January 31, 2023 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

As of January 31, 2024 and January 31, 2023 , the Company had unused borrowing availability of approximately $ 1.9 million and $ 1.6 million, respectively.

The Company has a revolving line for 20.5 million U.A.E.

Dirhams (approximately $ 5.6 million at January 31, 2024 ) from a bank in the U.A.E.

as of January 31, 2024 , the facility has an interest rate of approximately 9.00 % and is set to expire in May 2024.

The Company had borrowed an aggregate of $ 0.1 million and $ 1.0 million as of January 31, 2024 and January 31, 2023 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

As of January 31, 2024 and January 31, 2023 , the Company had unused borrowing availability of approximately $ 1.0 million and $ 1.8 million, respectively.

In June 2021, and as renewed or amended subsequently thereafter, the Company's Egyptian subsidiary entered into a credit arrangement with a bank in Egypt for a revolving line of 100.0 million Egyptian Pounds (approximately $ 3.2 million at January 31, 2024 ).

This credit arrangement is in the form of project financing at rates competitive in Egypt.

1 unchanged sentence

Among other covenants, the credit arrangement established a maximum leverage ratio allowable and restricted the Company's Egyptian subsidiary's ability to undertake any additional debt.

As of January 31, 2024 , the facility has an interest rate of approximately 20.75 % and expired in August 2023.

This credit arrangement was subsequently renewed in November 2023 with substantially the same terms and conditions and expires in November 2024.

The Company had borrowed an aggregate of $ 1.4 million and $ 3.1 million as of January 31, 2024 and January 31, 2023 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

Further, as of January 31, 2024 and January 31, 2023 , the Company had unused borrowing capacity of $ 3.2 million and $ 2.0 million, respectively.

In December 2021, the Company entered into a credit arrangement for project financing with a bank of Egypt for 28.2 million Egyptian Pounds.

As this project has progressed and the Company received collections, the facility has decreased to a current amount of 2.1 million Egyptian Pounds (approximately $ 0.1 million at January 31, 2024 ).

January 31, 2025 , the facility has an interest rate of approximately

Additionally, this credit arrangement was renewed in

November 2024 with substantially the same terms and conditions and expires in

January 31, 2025 , the Company had an immaterial amount outstanding with respect to this credit arrangement, and approximately

$ 1.4 million outstanding at

January 31, 2024 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

Further, as of

January 31, 2025 and

January 31, 2024

, the Company had unused borrowing capacity of $ 2.0 million and $ 3.2 million, respectively.

December 2021, the Company entered into a credit arrangement for project financing with a bank of Egypt for

28.2 million Egyptian Pounds.

As this project has progressed and the Company received collections, the facility has decreased to a current amount of

2.1 million Egyptian Pounds (approximately

$ 0.1 million at

January 31, 2025 ).

This credit arrangement is in the form of project financing at rates competitive in Egypt.

The line is secured by the contract for a project being financed by the Company's Egyptian subsidiary.

The facility has an interest rate of approximately 20.75 % and, as of November 2022, is no longer available for borrowings by the Company.

The facility has an interest rate of approximately

20.8 % and, as of

November 2022, is

no longer available for borrowings by the Company.

The facility will expire in connection with final customer balance collections and the completion of the project.

The Company had approximately $ 0.1 million and $ 0.4 million outstanding as of January 31, 2024 and January 31, 2023 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

In March 2022, the Company's Saudi Arabian subsidiary entered into a credit arrangement with a bank in Saudi Arabia for a revolving line of 37.0 million Saudi Riyal (approximately $ 9.9 million at January 31, 2024 .) This credit arrangement is in the form of project financing at rates competitive in Saudi Arabia.

The line is secured by certain assets (such as accounts receivable) of the Company's Saudi Arabian subsidiary, and as of January 31, 2024 , the facility has an interest rate of approximately 9.50 % and is set to expire in May 2024.

January 31, 2025 , the Company had an insignificant amount outstanding, and approximately $

0.1 million outstanding at

January 31, 2024 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

In March 2022, the Company's Saudi Arabian subsidiary entered into a credit arrangement with a bank in Saudi Arabia for a revolving line of

million Saudi Riyal (approximately $

January 31, 2025

This credit arrangement is in the form of project financing at rates competitive in Saudi Arabia.

The line is secured by certain assets (such as accounts receivable) of the Company's Saudi Arabian subsidiary.

The facility was renewed in May 2024 with substantially the same terms and conditions and expires in May 2025.

January 31, 2025

, the facility has an interest rate of approximately

The Company had borrowed an aggregate of $ 1.5 million and $ 3.2 million as of January 31, 2025 and January 31, 2024 , respectively, and is presented as a component of current maturities of long-term debt in the Company's consolidated balance sheets.

The unused borrowing availability attributable to this credit arrangement at January 31, 2024 and January 31, 2023 , was $ 6.1 million and $ 2.3 million, respectively.

The unused borrowing availability attributable to this credit arrangement at

January 31, 2025 and

January 31, 2024 , was

$ 3.0 million and

$ 6.1 million, respectively.

These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates.

3 unchanged sentences

The Company guarantees only a portion of the subsidiaries' debt, including foreign debt.

The amount of foreign subsidiary debt guaranteed by the Company was approximately $ 0.1 at January 31, 2024 and January 31, 2023 , respectively.

The Company was in compliance with the covenants under the credit arrangements in the U.A.E., Egypt and Saudi Arabia as of January 31, 2024 , with the exception of those arrangements that may have expired and have not yet been renewed.

Although certain of the arrangements may have expired and the borrowings could be required to be repaid immediately by the banks, the Company is in regular communication with the respective banks throughout the renewal process and all of the arrangements have continued without interruption or penalty.

As of January 31, 2024 , interest rates were based on (i) the Emirates Inter Bank Offered Rate plus 3.0 % to 3.5 % per annum for the U.A.E.

credit arrangements, two of which have a minimum interest rate of 4.5 % per annum;

(ii) either the Central Bank of Egypt corporate loan rate plus 1.5 % to 3.5 % per annum or the stated interest rate in the agreements for the Egypt credit arrangements;

and (iii) the Saudi Inter Bank Offered Rate plus 3.5 % for the Saudi Arabia credit arrangement.

Based on these rates, as of January 31, 2024 , the Company's interest rates ranged from 8.00 % to 20.75 % , with a weighted average rate of 10.71 % , and the Company had facility limits totaling $ 24.5 million under these credit arrangements.

As of January 31, 2024 , $ 8.3 million of availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees.

Additionally, the Company had borrowed approximately $ 6.4 million and had an additional $ 15.4 million of remaining borrowing capacity available under the foreign revolving credit arrangements.

The foreign revolving line balances were included as current maturities of long-term debt in the Company's consolidated balance sheets as of January 31, 2024 and January 31, 2023 , respectively.

In June 2023, the Company assumed a promissory note of approximately $ 2.8 million in connection with the formation of the joint venture with GIG.

In accordance with the promissory note, all principal is due and payable on the maturity date of April 9, 2026, with the option to prepay, in whole or in part, at any time prior to the maturity date, without premium or penalty.

The amount of foreign subsidiary debt guaranteed by the Company was approximately

$ 10 million at

January 31, 2025 and

January 31, 2024 .

The Company was in compliance with the covenants under the credit arrangements in the U.A.E., Egypt and Saudi Arabia as of

January 31, 2025

I nterest rates were based on (i) the Emirates Inter Bank Offered Rate plus

3.5 % per annum for the U.A.E.

credit arrangements,

two of which have a minimum interest rate of

4.5 % per annum;

(ii) either the Central Bank of Egypt corporate loan rate plus

3.5 % per annum or the stated interest rate in the agreements for the Egypt credit arrangements;

and (iii) the Saudi Inter Bank Offered Rate plus

3.5 % for the Saudi Arabia credit arrangement.

Based on these rates, as of

January 31, 2025 , the Company's interest rates ranged from

20.8 %, with a weighted average rate of

11.6 %, and the Company had facility limits totaling $

34.6 million under these credit arrangements.

January 31, 2025 , $

16.9 million of availability was used to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees.

Additionally, the Company had borrowed approximately $

2.1 million and had an additional $

15.6 million of remaining borrowing capacity available under the foreign revolving credit arrangements.

The foreign revolving line balances were included as current maturities of long-term debt in the Company's consolidated balance sheets

as of January 31, 2025 and

January 31, 2024 .

June 2023, the Company assumed a promissory note of approximately $

2.8 million in connection with the formation of the joint venture with GIG.

In accordance with the promissory note, all principal is due and payable on the maturity date of

April 9, 2026, with the option to prepay, in whole or in part, at any time prior to the maturity date, without premium or penalty.

On July 28, 2016, the Company entered into a mortgage agreement secured by the Company's manufacturing facility located in Alberta, Canada that matures on December 23, 2042.

1 unchanged sentence

The interest rate is variable, and was 7.1 % at January 31, 2025 .

The principal balance is included as a component of long-term debt, less current maturities in the Company's consolidated balance sheets and is presented net of issuance costs of $ 0.1 million as of January 31, 2024 and January 31, 2023 , respectively.

Note 6 - Leases

21 unchanged sentences

The Company served the Notices of Termination in connection with the Company's intended relocation to a different facility in Abu Dhabi.

The Company vacated portions of the leased space in December 2022 and is expected to vacate the remaining space in December 2024.

The Company vacated portions of the leased space in December 2022 and the remaining space was vacated in December 2024.

The first Notice of Termination required that the Company pay an additional amount equal to three months' rent after that termination to enable the lessor to prepare the assets for lease by another party.

5 unchanged sentences

Finance Leases.

The Company has several significant lease agreements, with lease terms of one to thirty years, which consist of real estate, vehicles and office equipment leases.

The Company has several lease agreements, with lease terms of one to fifteen years, which consist of real estate, vehicles and office equipment leases.

These leases do not require any contingent rental payments, impose any financial restrictions or contain any residual value guarantees.

10 unchanged sentences

Property and Equipment - gross

$ 970 $ 1,161

Accumulated depreciation and amortization

3 unchanged sentences

Finance lease liability short-term

Finance lease liability long-term

Total finance lease liabilities

4 unchanged sentences

Operating lease liability short-term

$ 1,071 $ 914

Operating lease liability long-term

16 unchanged sentences

SG&A expenses

( 61 ) ( 81 )

Total Lease costs

31 unchanged sentences

Total lease liabilities at January 31, 2025

$ 7,184 $ 113

Rent expense on operating leas es, which is recorded on a straight-line basis, was $ 2.5 million and $ 2.4 millio n for the years ended January 31, 2025 and 2024 , respectively.

Note 7 - Income taxes

Income (loss) from continuing operations before income taxes

Income from continuing operations before income taxes

$ ( 4,682 ) $ ( 8,541 )

2 unchanged sentences

( 1 ) The domestic loss from continuing operations before income taxes includes corporate overhead costs.

Components of income tax (benefit) expense

Components of income tax expense (benefit)

$ ( 4 ) $ ( 21 )

1 unchanged sentence

Total current income tax expense

State and other

Total deferred income tax (benefit) expense

1,048 ( 7,311 )

Total deferred income tax expense (benefit)

1,617 ( 6,920 )

Total income tax expense

8 unchanged sentences

Earnings from these subsidiaries are subject to tax in their local jurisdiction, and withholding taxes in these jurisdictions are considered.

The Company's liability was $ 0.8 million and $ 0.6 million as of January 31, 2024 and 2023 , respectively, related to these taxes.

The Company's liability was $ 0.8 million as of January 31, 2025 and 2024 , related to these taxes.

income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested outside the United States.

2 unchanged sentences

Unremitted earnings of $ 25.9 million in the United Arab Emirates would not be subject to withholding tax in the event of a distribution, and $ 24.7 million of unremitted earnings in Saudi Arabia would be subject to withholding tax of $ 1.2 million.

The Company has not recorded a deferred tax liability related to any financial reporting basis over tax basis in connection with the Company's investment in these foreign subsidiaries as it is not practical to estimate.

The difference between the provision for income taxes and the amount computed by applying the U.S.

4 unchanged sentences

Domestic return to provision

Deferred compensation adjustment

Domestic valuation allowance

( 468 ) ( 8,065 )

Domestic return to provision

Global Intangible Low-Taxed Income inclusion

2 unchanged sentences

Valuation allowance for state NOLs

( 1,314 ) 133

Differences in foreign tax rate

4 unchanged sentences

Research tax credit

Pension Settlement

All other, net expense

( 108 ) ( 5 )

Total income tax (benefit) expense

1 unchanged sentence

The Company's worldwide effective tax rates ("ETR") were 29.1 % and ( 33.6 %) in the year ended January 31, 2025 and 2024 , respectively.

The change in the ETR was largely due to a partial release of the domestic valuation allowance, changes in the mix of income and loss in various tax jurisdictions, and the global intangible low-taxed income inclusion.

The change in the ETR was largely due to changes in the mix of income and loss in various tax jurisdictions, and the release of the partial domestic valuation allowance in the prior year.

Components of deferred income tax assets

24 unchanged sentences

( 999 ) ( 855 )

( 70 ) ( 73 )

Total deferred tax liabilities

$ ( 2,489 ) $ ( 2,175 )

Deferred tax assets (liabilities), net

Deferred tax assets, net

$ 5,319 $ 6,702

4 unchanged sentences

( 1,320 ) ( 1,217 )

Total deferred tax assets (liabilities), net of valuation allowances

Total deferred tax assets, net of valuation allowances

$ 5,319 $ 6,702

2 unchanged sentences

Of this amount, $ 16.4 million will begin to expire between tax years 2036 and 2037 , with the remainder not subject to expiration.

As of January 31, 2024 and 2023 , the Company had deferred tax assets of $ 1.5 million and $ 2.7 million, respectively, related to gross state NOLs of $ 21.0 million and $ 45.5 million, respectively, that expire between 2024 and 2032 .

As of January 31, 2025 and 2024 , the Company had deferred tax assets of $ 1.5 million related to gross state NOLs of $ 21.9 million and $ 21.0 million, respectively, that expire between 2025 and 2044 .

The Company has released the valuation allowance recorded against U.S.

Federal NOLs and continues to maintain a valuation allowance against its state NOLs.

As of January 31, 2024 and 2023 , the Company had deferred tax assets of $ 0.3 million related to gross foreign NOLs of $ 1.3 million and $ 1.6 million, respectively, for its subsidiary in Saudi Arabia, which can be carried forward indefinitely and does not have a valuation allowance recorded against it.

Federal NOLs during the year ended January 31, 2024 , and continues to maintain a valuation allowance against its state NOLs.

As of January 31, 2025 and 2024 , the Company had deferred tax assets of $ 0.3 million related to gross foreign NOLs of $ 1.3 million for its subsidiary in Saudi Arabia, which can be carried forward indefinitely and does not have a valuation allowance recorded against it.

The ultimate realization of the tax benefit is dependent upon the future generation of taxable income in the respective tax jurisdictions.

1 unchanged sentence

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of the existing deferred tax assets.

A significant piece of objective evidence previously evaluated was the domestic cumulative loss incurred over the three -year period.

The Company has achieved three years of cumulative income in the U.S.

A significant piece of objective negative evidence previously evaluated was the domestic cumulative loss incurred over a three -year period.

The Company achieved three years of cumulative income in the U.S.

federal tax jurisdiction as of the period ended January 31, 2024 .

As such, management has determined that certain deferred tax assets are more likely than not to be realized and have partially released the valuation allowance accordingly during the period ended January 31, 2024 .

As such, management determined that the domestic deferred tax assets are more likely than not to be realized and have released the valuation allowance accordingly during the period ended January 31, 2024 .

The Company continues to maintain a valuation allowance against certain domestic deferred tax assets including its foreign tax credit carryovers, R&D credit carryovers, and state deferred tax assets.

Management has released $ 0.2 million of valuation allowance related to R&D credit carryovers in the period ending January 31, 2025 based upon expectations of future taxable income.

The amount of the domestic deferred tax assets considered realizable, however, could be increased if there are changes to the objective positive and negative evidence considered.

The valuation allowance decreased $ 10.3 million during the period ended January 31, 2024 .

The Company has a deferred tax asset of $ 2.6 million for U.S.

6 unchanged sentences

Decreases in positions taken in a prior period

( 3 ) ( 256 )

Increases in positions taken in a current period

Decreases due to lapse of statute of limitations

( 131 ) ( 21 )

Decreases due to settlements

2 unchanged sentences

$ 1,409 $ 1,433

Included in the total UTP liability were estimated accrued interest and penalties of $ 0.4 million and $ 0.3 million as of January 31, 2024 and 2023 , respectively.

Included in the total UTP liability were estimated accrued interest and penalties of $ 0.4 million as of each of January 31, 2025 and 2024 .

These non-current income tax liabilities are recorded in other long-term liabilities in the consolidated balance sheets and recognized as an expense during the period.

8 unchanged sentences

Tax years related to January 31, 2022, 2023, and 2024 are open for federal and state tax purposes.

In addition, federal and state tax years January 31, 2004 through January 31, 2010 , are subject to adjustment on audit, up to the amount of research tax credit generated in those years.

In addition, federal and state tax years related to January 31, 2005 through January 31, 2010 , are subject to adjustment on audit, up to the amount of research tax credit generated in those years.

Any NOL carryover can still be adjusted by the Internal Revenue Service in future year audits.

8 unchanged sentences

The Company matches 100 % of each participant's payroll deferral contributions up to 1 % of their compensation, plus 50 % of each participant's payroll deferral contributions on the next 5 % of compensation.

Contributions to the 401 (k) plan were $ 0.4 million and $ 0.3 million in the years ended January 31, 2024 and 2023 , respectively.

Contributions to the 401 (k) plan were $ 0.4 million in the years ended January 31, 2025 and 2024 , respectively.

Multi-employer plans

16 unchanged sentences

Note 9 - Stock-based compensation

The Company’s 2017 Omnibus Stock Incentive Plan dated June 13, 2017, as amended, which the Company's stockholders approved in June 2017 ( "2017 Plan"), expired in June 2020.

The Company has prior incentive plans under which previously granted awards remain outstanding, including the 2017 Plan, but under which no new awards may be granted.

At January 31, 2024 , the Company had reserved a total of 245,150 shares for grants and issuances under these incentive stock plans, which includes a reserve for issuances pursuant to unvested or unexercised prior awards.

While the 2017 Plan provided for the grant of deferred shares, non-qualified stock options, incentive stock options, restricted shares, restricted stock units, and performance-based restricted stock units intended to qualify under section 422 of the Internal Revenue Code, the Company issued only restricted shares and restricted stock units under the 2017 Plan.

The 2017 Plan authorized awards to officers, employees, consultants, and independent directors.

The Company's 2021 Omnibus Stock Incentive Plan dated May 26, 2021 was approved by the Company's stockholders in May 2021 ( "2021 Plan").

The 2021 Plan will expire in May 2024.

The Company has prior incentive plans under which previously granted awards remain outstanding, but under which no new awards may be granted, including the Company's 2021 Omnibus Stock Incentive Plan, which expired in May 2024.

At January 31, 2025 , the Company had reserved a total of 122,814 shares for grants and issuances under these incentive plans, including issuances pursuant to unvested or unexercised prior awards.

The Company's 2024 Omnibus Stock Incentive Plan dated May 28, 2024 was approved by the Company's stockholders in July 2024 ( "2024 Plan").

The 2024 Plan will expire in July 2027.

The 2024 Plan authorizes awards to officers, employees, consultants and independent directors.

Grants were made to the Company's employees, officers and independent directors under the 2021 Plan, as described below.

The 2024 Plan provides for the grant of deferred shares, non-qualified stock options, incentive stock options, restricted shares, restricted stock units, and performance-based restricted stock units intended to qualify under section 422 of the Internal Revenue Code.

Grants were made in connection with the 2024 Plan and the prior incentive plans to employees, officers, and independent directors, as further described below:

Stock compensation expense

2 unchanged sentences

Restricted stock based compensation expense

$ 913 $ 1,002

Total stock-based compensation expense

$ 913 $ 1,002

Stock options

The Company did not grant any stock options during the years ended January 31, 2025 or 2024 .

The following tables summarizes the Company's stock option activity:

The following table summarizes the Company's stock option activity:

Weighted average exercise price

10 unchanged sentences

Outstanding on January 31, 2025

22 11.15 0.7 6

Options exercisable on January 31, 2025

7 unchanged sentences

During the year ended January 31, 2025 , no deferred stock units were distributed.

There were approximately 62,926 deferred stock units outstanding included in the restricted stock activity shown below as of January 31, 2024 and 2023 , respectively.

There were approximately 62,926 deferred stock units outstanding included in the restricted stock activity shown below as of January 31, 2025 and 2024 .

Restricted stock

2 unchanged sentences

The Company calculates restricted stock compensation expense based on the grant date fair value and recognizes expense on a straight-line basis over the vesting period.

The following table summarizes restricted stock activity for the years ended January 31, 2024 and 2023 , respectively:

The following table summarizes the Company's restricted stock activity:

Restricted shares

Weighted average price

Weighted average price per share

Weighted average grant date fair value

8 unchanged sentences

The fair value of vested restricted stock was $ 0.9 million and $ 1.1 million in the year ended January 31, 2025 and 2024 respectively.

Additionally, t here was $ 1.0 million and $ 1.1 million of unrecognized compensation cost related to unvested restricted stock granted under the plans as of January 31, 2024 and 2023 , respectively.

Additionally, there was $ 1.0 million of unrecognized compensation cost related to unvested restricted stock granted under the plans as of January 31, 2025 and 2024 .

These costs are expected to be recognized over the weighted-average period of 1.7 years and 1.8 years, respectively.

10 unchanged sentences

During the 12 months ended January 31, 2024, the Company used the remaining $ 1.0 million of the $ 3.0 million authorized to repurchase its outstanding shares of common stock.

The following table sets forth information with respect to repurchases by the Company of its shares of common stock during 2022 and 2023 :

Accordingly, there was no repurchase activity with respect to the Company's shares of common stock during the twelve months ended January 31, 2025.

The following table sets forth information with respect to repurchases by the Company of its shares of common stock during 2023 :

Total number of shares purchased

2 unchanged sentences

Approximate dollar value of shares that may yet be purchased under the plans or programs

January 1, 2022 - January 31, 2022

98 $ 8.81 98 $ 1,008

July 1, 2023 - July 31, 2023

December 1, 2022 - December 31, 2022

July 1, 2023 - July 31, 2023

37 8.51 37 628

2 unchanged sentences

September 1, 2023 - September 30, 2023

August 29, 2024, the Company retired all remaining treasury stock previously acquired under the stock repurchase program.

The retirement was recorded as a reduction to common stock based on the par value of the shares, and the excess over par value was recorded as a decrease in retained earnings in accordance with ASC

Equity - Treasury Stock .

Note 12 - Joint venture and non-controlling interest

1 unchanged sentence

The JV is a limited liability company named Perma Pipe Gulf Arabia Industry and is a closed joint stock company established under laws of the Kingdom of Saudi Arabia.

The Company’s capital is comprised of ordinary shares with 60% owned by the Company and remaining 40 % owned by GIG.

The JV's capital is comprised of ordinary shares with 60% owned by the Company and the remaining 40 % owned by GIG.

The Company expects this collaborative business arrangement to result in expanding its market presence in Saudi Arabia, Kuwait, and Bahrain.

1 unchanged sentence

The other party to this business arrangement acquired a 40% non-controlling interest in the JV by contributing assets (i.e.

acquired by the Company) of approximately $ 6.8 million in fair value, mainly consisting of an idle building and equipment.

acquired by the JV) of approximately $ 6.8 million in fair value, mainly consisting of an idle building and equipment.

The fair value of the net assets contributed was determined through the use of a third -party appraiser using the indirect cost method.

Pursuant to the applicable guidance in ASC 805, Business Combinations and Noncontrolling Interests , the Company determined that the transaction did not meet the necessary conditions to be considered a business as the set of assets acquired did not contain an organized workforce and therefore was recorded as an asset acquisition.

The assets transferred by the Company to JV were recorded at historical cost, and no gain was recognized as a result of this exchange since the Company has a controlling interest in the JV.

The assets transferred by the Company to the JV were recorded at historical cost, and no gain was recognized as a result of this exchange since the Company has a controlling interest in the JV.

The Company’s measurement of the acquired assets is comprised of the fair value of the contributed net assets given up by the Company and the fair value of the non-controlling interest, excluding the contributed assets.

3 unchanged sentences

The principal amount is presented within the Long-term debt, less current maturities caption in the Company's consolidated balance sheets.

The Company also has a promissory note due from the JV that was issued as part of the formation of the JV in the amount of approximately $ 4.2 million and eliminates in consolidation.

The Company also has a promissory note due from the JV that was issued as part of the formation of the JV in the amount of approximately $ 4.2 million, which is eliminated in consolidation.

The Company has a 60% controlling financial interest in the joint venture which is not considered a wholly owned subsidiary.

1 unchanged sentence

Pursuant to the applicable guidance contained in ASC 810, Consolidations , the balance sheets and operating activities of this investment are included in the Company's consolidated financial statements.

The carrying amount of the assets and liabilities of the JV that are consolidated by the Company totaled $ 27.3 million and $ 19.8 , respectively, as of January 31, 2024 .

As of January 31, 2025 , the carrying amount of the assets and liabilities of the JV that are consolidated by the Company totaled $ 39.1 million and $ 22.1 million, respectively.

The Company adjusts net income in the consolidated statements of operations to exclude the proportionate share of results that is attributable to the non-controlling interest.

1 unchanged sentence

This mezzanine presentation is the result of the non-controlling interest being subject to a put option that is not solely within the Company's control and in connection with the equity shares of the business arrangement that is redeemable any time after five years following the date of incorporation.

The redemption amount per the JV agreement is at fair value of the non-controlling interest which is the fair value of ordinary shares of JV owned by GIG.

Further, neither the call option or put option contained in the business arrangement met the definition of a derivative as a result of not containing a net settlement provision and the shares not being readily convertible to cash, thereby being considered embedded with respect to non-controlling interest and not a freestanding instrument.

The redemption amount per the JV Agreement is at fair value of the non-controlling interest which is the fair value of ordinary shares of the JV owned by GIG.

Further, neither the call option nor put option contained in the JV Agreement met the definition of a derivative as a result of not containing a net settlement provision and the shares not being readily convertible to cash, thereby being considered embedded with respect to non-controlling interest and not a freestanding instrument.

As a result of the non-controlling interest being subject to redemption rights that are not entirely within the Company's control, it was concluded that the necessary conditions were met to be accounted for in accordance with ASC 480, Distinguishing Liabilities from Equity .

12 unchanged sentences

The 60% equity ownership of the JV by the Company allows it to receive its proportionate share of losses and residual returns.

The non-controlling interest is measured at fair value was $ 6.3 million and $ 0.0 million recorded within temporary equity at January 31, 2024 and 2023 , respectively.

The change in non-controlling interest consists of an initial measurement of the JV of approximately $ 1.0 million, $ 2.7 million in current year net income attributable to non-controlling interest, and approximately $ 2.5 million as an adjustment in the carrying value of the redeemable non-controlling interest pertaining to the business arrangement.

The non-controlling interest is measured at fair value and was $ 11.0 million and $ 6.3 million recorded within temporary equity at January 31, 2025 and 2024 , respectively.

The change in non-controlling interest consists of approximately $ 4.1 million in current year net income attributable to non-controlling interest, and approximately $ 0.6 million as an adjustment in the carrying value of the redeemable non-controlling interest pertaining to the business arrangement.

In addition, there were no dividends or any other form of distributions from non-controlling interest for the year ended January 31, 2025 and 2024 , respectively.

Note 13 - Subsequent events

On February 1, 2024, the Company entered into a settlement agreement ("Settlement Agreement") due to a legal proceeding that arose in 2018 regarding a series of projects executed during years ended 2015 - 2016 for an existing customer.

Pursuant to this Settlement Agreement, the Company will pay the counter party approximately $ 0.8 million to resolve the matter, subject to certain terms and conditions therein, including a limitation on future claims that pertain to the projects contained in this legal proceeding.

In connection with this Settlement Agreement, the Company recognized an expense of approximately $ 0.8 million which is presented as a component of other expense in the Company's consolidated statement of operations for the year ended January 31, 2024 .

Additionally, this amount is presented as a component of other accrued liabilities within the Company's consolidated balance sheets as of January 31, 2024 .

The Company has evaluated subsequent events through April 26, 2024 , the date the financial statements were issued.

Apart from what is described above, there were no other identified material subsequent events that occurred during this time that required to be recognized and/or disclosed in the Company's consolidated financial statements.

Note 13 - Segment reporting

The Company operates under

Piping Systems.

The results are presented on an consolidated basis to the Chief Executive Officer who serves as the chief operating decision maker ("CODM").

The accounting policies of the Company's segment are the same as those described in the summary of significant accounting policies.

For further information, see Note 2 - Significant accounting policies, in the Notes to Consolidated Financial Statements.

The CODM regularly reviews consolidated revenues, significant expenses, and consolidated net income attributable to common stock to make operating decisions and assess performance.

The CODM uses this information in making company-wide decisions when determining how to allocate resources.

Significant expenses represent amounts that are regularly provided to the CODM and included in consolidated net income attributable to common stock.

Additionally, the CODM regularly reviews asset information by our reporting segment in a manner that is consistent with the presentation on the Company's accompanying consolidated balance sheets.

The following table summarizes the Company's revenues, net income attributable to common stock, and significant expenses:

Year ended January 31,

$ 158,384 $ 150,668

Cost of sales

23,109 19,048

59,036 64,973

Depreciation and amortization

Other costs of sales

19,887 21,627

Total Cost of sales

105,136 109,210

Operating expenses

Salaries and wages

16,295 14,043

Depreciation and amortization

Other general and administrative expense

General and administrative expenses

28,000 22,591

Selling expense

Total operating expenses

32,947 28,099

Income from operations

20,301 13,359

Interest expense

Other income (expense)

107 ( 1,202 )

Income before income tax

Income tax expense (benefit)

5,377 ( 3,320 )

13,091 13,211

Net income attributable to non-controlling interest

Net income attributable to common stock

$ 8,983 $ 10,471

Perma-Pipe International Holdings, Inc.

17 unchanged sentences

612 123 ( 36 ) - 699

( 1 ) The release of valuation allowances related to deferred tax assets.

( 1 ) Uncollectible accounts written off.

( 2 ) Impact on allowance due to foreign currency translation for the year ended January 31, 2025 .

( 3 ) The release of valuation allowances related to deferred tax assets for the year ended January 31, 2024 .

EXHIBIT INDEX

7 unchanged sentences

[Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on March 20, 2017]

Fifth Amended and Restated By-Laws of Perma-Pipe International Holdings, Inc.

[Incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on May 6, 2019]

Seventh Amended and Restated By-Laws of Perma-Pipe International Holdings, Inc.

[Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on April 4, 2025]

Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 [Incorporated by reference to Exhibit 4(d) to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2020 filed on April 21, 2020]

7 unchanged sentences

Perma-Pipe International Holdings, Inc.

2021 Omnibus Stock Incentive Plan [Incorporated by reference to Appendix A to the Company's Definitive Proxy Statement on Schedule 14A filed on April 16, 2021]*

2024 Omnibus Stock Incentive Plan [Incorporated by reference to Appendix A to the Company's Definitive Proxy Statement on Schedule 14A filed on June 21, 2024]*

Lease dated March 15, 2021, between the Company and Nash88 [Incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K/A filed on April 22, 2021]

Form of Restricted Stock and Performance Award Agreement under the 2021 Omnibus Stock Incentive Plan [Incorporated by reference to Exhibit 10.20 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2022 filed on April 19, 2022] *

Form of Non-Employee Director Restricted Stock Unit Agreement under the 2021 Omnibus Stock Incentive Plan [Incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2022 filed on April 19, 2022] *

Form of Employee Restricted Stock Unit Agreement under the 2021 Omnibus Stock Incentive Plan [Incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2022 filed on April 19, 2022] *

Form of Restricted Stock and Performance Award Agreement under the 2024 Omnibus Stock Incentive Plan *

Form of Non-Employee Director Restricted Stock Unit Agreement under the 2024 Omnibus Stock Incentive Plan *

Executive Employment Agreement, dated March 31, 2025, by and between the Company and Saleh Sagr [Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 4, 2025]*

Code of Conduct [Incorporated by reference to Exhibit 14 of the Company's Annual Report on Form 10-K/A for the fiscal year ended January 31, 2004 filed on June 1, 2004]

Insider Trading Policy

Subsidiaries of Perma-Pipe International Holdings, Inc.

Consent of Independent Registered Public Accounting Firm - PricewaterhouseCoopers LLP

Consent of Independent Registered Public Accounting Firm - Grant Thornton LLP

Power of Attorney executed by directors and officers of the Company

Rule 13a - 14(a)/15d - 14(a) Certifications

Rule 13a - 14(a)/15d - 14(a) Certification

(1) Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Rule 13a - 14(a)/15d - 14(a) Certification

(2) Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Section 1350 Certifications(1) Chief Executive Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(2) Chief Financial Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Recoupment of Incentive Compensation Following a Restatement

Section 1350 Certifications (1) Chief Executive Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and (2) Chief Financial Officer certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Recoupment of Incentive Compensation Following a Restatement [Incorporated by reference to Exhibit 97 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2024 filed on April 26, 2024]

Inline XBRL Instance

6 unchanged sentences

*Management contracts and compensatory plans or agreements

FORM 10-K SUMMARY - None.

FORM 10-K SUMMARY

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.

Perma-Pipe International Holdings, Inc.

April 26, 2024

Director, President and Chief Executive Officer

Director, and Chief Executive Officer

(Principal Executive Officer)

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 and in the capacities and on the date indicated.

Director, President and Chief Executive Officer (Principal Executive Officer)

Director, and Chief Executive Officer (Principal Executive Officer)

Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

April 26, 2024

CYNTHIA BOITER*

ROBERT MCNALLY*

IBRAHIM JAHAM AL KUWARI*

Director and Chairman of the Board of Directors

1 unchanged sentence

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 9A. Controls and Procedures