mind-20210430

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM			10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-13490

MIND TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)


Delaware						76-0210849
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

2002 Timberloch Place

Suite 400

The Woodlands, Texas 77380

(Address of principal executive offices, including Zip Code)

(281) 353-4475

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock - $0.01 par value per share	MIND	The NASDAQ Stock Market LLC
Series A Preferred Stock - $1.00 par value per share	MINDP	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 13,773,742 shares of common stock, $0.01 par value, were outstanding as of June 2, 2021.

Table of Contents

MIND TECHNOLOGY, INC.

Table of Contents


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of April 30, 2021 and January 31, 2021	1
	Condensed Consolidated Statements of Operations for the Three Months Ended April 30, 2021 and 2020	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended April 30, 2021 and 2020	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 30, 2021 and 2020	4
	Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended April 30, 2021 and 2020	5
	Notes to Condensed Consolidated Financial Statements	7
	Cautionary Statement about Forward-Looking Statements	15

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 3.	Defaults Upon Senior Securities	26

Item 4.	Mine Safety Disclosures	26

Item 5.	Other Information	26

Item 6.	Exhibits	26

	Exhibit Index	26

	Signatures	28

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)


	April 30, 2021		January 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	2,001	$	4,611

Accounts receivable, net of allowance for doubtful accounts of $952 and $948 at April 30, 2021 and January 31, 2021, respectively	3,649		4,747

Inventories, net	12,169		11,453

Prepaid expenses and other current assets	1,555		1,659
Assets held for sale	4,086		4,321
Total current assets	23,460		26,791
Property and equipment, net	4,586		4,751
Operating lease right-of-use assets	1,138		1,471
Intangible assets, net	6,337		6,750






Total assets	$	35,521	$	39,763
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,142	$	1,704

Deferred revenue	563		208
Accrued expenses and other current liabilities	3,038		2,912
Income taxes payable	902		1,041
Operating lease liabilities - current	665		1,008
Liabilities held for sale	972		963
Total current liabilities	8,282		7,836
Operating lease liabilities - non-current	473		463
Notes payable	—		850

Deferred tax liability	198		198
Total liabilities	8,953		9,347
Stockholders’ equity:
Preferred stock, $1.00 par value; 2,000 shares authorized; 1,059 and 1,038 shares issued and outstanding at April 30, 2021 and January 31, 2021, respectively	23,607		23,104
Common stock, $0.01 par value; 40,000 shares authorized; 15,704 and 15,681 shares issued at April 30, 2021 and January 31, 2021, respectively	157		157
Additional paid-in capital	128,403		128,241
Treasury stock, at cost (1,931 and 1,929 shares at April 30, 2021 and January 31, 2021, respectively)	(16,862)		(16,860)
Accumulated deficit	(104,438)		(99,870)
Accumulated other comprehensive loss	(4,299)		(4,356)
Total stockholders’ equity	26,568		30,416
Total liabilities and stockholders’ equity	$	35,521	$	39,763

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

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MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	For the Three Months Ended April 30,
	2021		2020
Revenues:
Sale of marine technology products	$	4,194	$	3,187


Total revenues	4,194		3,187
Cost of sales:
Sale of marine technology products	3,651		2,703



Total cost of sales	3,651		2,703
Gross profit	543		484
Operating expenses:
Selling, general and administrative	3,817		2,954
Research and development	853		410

Impairment of intangible assets	—		2,531
Depreciation and amortization	666		730
Total operating expenses	5,336		6,625
Operating loss	(4,793)		(6,141)
Other income:


Other, net	947		56
Total other income	947		56
Loss from continuing operations before income taxes	(3,846)		(6,085)
Benefit (provision) for income taxes	145		(342)
Loss from continuing operations	(3,701)		(6,427)
Loss from discontinued operations, net of income taxes	(283)		(215)
Net loss	$	(3,984)	$	(6,642)
Preferred stock dividends	(584)		(559)
Net loss attributable to common stockholders	$	(4,568)	$	(7,201)
Net loss per common share - Basic
Continuing operations	$	(0.31)	$	(0.57)
Discontinued operations	$	(0.02)	$	(0.02)
Net loss	$	(0.33)	$	(0.59)
Net loss per common share - Diluted
Continuing operations	$	(0.31)	$	(0.57)
Discontinued operations	$	(0.02)	$	(0.02)
Net loss	$	(0.33)	$	(0.59)
Shares used in computing net loss per common share:
Basic	13,759		12,172
Diluted	13,759		12,172

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

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MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


	For the Three Months Ended April 30,
	2021		2020
Net loss attributable to common stockholders	$	(4,568)	$	(7,201)

Changes in cumulative translation adjustment	57		(131)
Comprehensive loss	$	(4,511)	$	(7,332)

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

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MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	For the Three Months Ended April 30,
	2021		2020
Cash flows from operating activities:
Net loss	$	(3,984)	$	(6,642)
Adjustments to reconcile net loss to net cash used in operating activities:
PPP loan forgiveness	(850)		—
Depreciation and amortization	668		1,701
Stock-based compensation	121		230
Impairment of intangible assets	—		2,531

Recovery of doubtful accounts	(453)		—

Provision for inventory obsolescence	327		22
Gross profit from sale of lease pool equipment	—		(850)
Gross profit from sale of other equipment	(80)		—



Changes in:
Accounts receivable	1,602		3,728
Unbilled revenue	51		(9)
Inventories	(739)		(

SEC Form 10-Q filed by MIND Technology, Inc.