mind20230411

SEC Form 10-Q filed by MIND Technology Inc.

mind20230411_10q.htm

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, 2023

☐	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 550

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: 13,788,738 shares of common stock, $0.01 par value, were outstanding as of June 13, 2023.

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MIND TECHNOLOGY, INC.

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PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of April 30, 2023 and January 31, 2023	1
	Condensed Consolidated Statements of Operations for the Three Months Ended April 30, 2023 and 2022	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended April 30, 2023 and 2022	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 30, 2023 and 2022	4
	Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended April 30, 2023 and 2022	5
	Notes to Condensed Consolidated Financial Statements	7
	Cautionary Statement about Forward-Looking Statements	14

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20

Item 4.	Controls and Procedures	21

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 3.	Defaults Upon Senior Securities	21

Item 4.	Mine Safety Disclosures	21

Item 5.	Other Information	21

Item 6.	Exhibits	22

	Exhibit Index	22

	Signatures	23

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

	*April 30, 2023*			*January 31, 2023*
*ASSETS*
Current assets:
Cash and cash equivalents	$	815		$	778
Accounts receivable, net of allowance for doubtful accounts of $504 at each of April 30, 2023 and January 31, 2023		7,390			3,993
Inventories, net		14,339			15,318
Prepaid expenses and other current assets		1,088			2,144
Total current assets		23,632			22,233
Property and equipment, net		3,787			3,945
Operating lease right-of-use assets		1,762			1,749
Intangible assets, net		4,664			4,931
Total assets	$	33,845		$	32,858
*LIABILITIES AND STOCKHOLDERS’ EQUITY*
Current liabilities:
Accounts payable	$	1,206		$	4,101
Deferred revenue		486			164
Accrued expenses and other current liabilities		2,638			2,247
Income taxes payable		1,723			1,516
Operating lease liabilities - current		753			903
Note payable, net		3,139			—
Total current liabilities		9,945			8,931
Operating lease liabilities - non-current		1,009			846
Deferred tax liability		29			29
Total liabilities		10,983			9,806
Stockholders’ equity:
Preferred stock, $1.00 par value; 2,000 shares authorized; 1,683 shares issued and outstanding at each of April 30, 2023 and January 31, 2023		37,779			37,779
Common stock, $0.01 par value; 40,000 shares authorized; 15,721 shares issued at each of April 30, 2023 and January 31, 2023		157			157
Additional paid-in capital		129,630			129,580
Treasury stock, at cost (1,933 shares at each of April 30, 2023 and January 31, 2023 )		(16,863	)		(16,863	)
Accumulated deficit		(127,875	)		(127,635	)
Accumulated other comprehensive gain		34			34
Total stockholders’ equity		22,862			23,052
Total liabilities and stockholders’ equity	$	33,845		$	32,858

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,*
	*2023*			*2022*
Revenues:
Sale of marine technology products	$	12,586		$	9,087
Total revenues		12,586			9,087
Cost of sales:
Sale of marine technology products		7,169			5,798
Total cost of sales		7,169			5,798
Gross profit		5,417			3,289
Operating expenses:
Selling, general and administrative		3,874			4,272
Research and development		773			1,014
Depreciation and amortization		481			479
Total operating expenses		5,128			5,765
Operating income (loss)		289			(2,476	)
Other expense:
Other, net		(111	)		(118	)
Total other expense		(111	)		(118	)
Income (loss) from continuing operations before income taxes		178			(2,594	)
Provision for income taxes		(418	)		(211	)
Net loss from continuing operations		(240	)		(2,805	)
Income from discontinued operations, net of income taxes		—			386
Net loss	$	(240	)	$	(2,419	)
Preferred stock dividends - declared		—			(947	)
Preferred stock dividends - undeclared		(947	)		—
Net loss attributable to common stockholders	$	(1,187	)	$	(3,366	)
Net loss per common share - Basic and Diluted
Continuing operations	$	(0.09	)	$	(0.27	)
Discontinued operations	$	—		$	0.03
Net loss	$	(0.09	)	$	(0.24	)
Shares used in computing net loss per common share:
Basic		13,789			13,775
Diluted		13,789			13,775

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,*
	*2023*			*2022*
Net loss	$	(240	)	$	(2,419	)
Change in cumulative translation adjustment		—			(3	)
Comprehensive loss	$	(240	)	$	(2,422	)

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,*
	*2023*			*2022*
Cash flows from operating activities:
Net loss	$	(240	)	$	(2,419	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		481			479
Stock-based compensation		50			236
Provision for inventory obsolescence		—			23
Gross profit from sale of other equipment		(138	)		(167	)
Changes in:
Accounts receivable		(3,462	)		(871	)
Unbilled revenue		11			(26	)
Inventories		979			(260	)
Prepaid expenses and other current and long-term assets		1,308			286
Income taxes receivable and payable		206			(66	)
Accounts payable, accrued expenses and other current liabilities		(2,788	)		(622	)
Deferred revenue and customer deposits		606			(115	)
Net cash used in operating activities		(2,987	)		(3,522	)
Cash flows from investing activities:
Purchases of property and equipment		(57	)		(107	)
Sale of other equipment		138			283
Net cash provided by investing activities		81			176
Cash flows from financing activities:
Purchase of treasury stock		—			(1	)
Net proceeds from short-term loan		2,945			—
Preferred stock dividends		—			(947	)
Net cash provided by (used in) financing activities		2,945			(948	)
Effect of changes in foreign exchange rates on cash and cash equivalents		(2	)		(3	)
Net increase (decrease) in cash and cash equivalents		37			(4,297	)
Cash and cash equivalents, beginning of period		778			5,114
Cash and cash equivalents, end of period	$	815		$	817
Supplemental cash flow information:
Interest paid	$	204		$	4
Income taxes paid	$	189		$	277

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

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MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

	*Common Stock*				*Preferred Stock*												*Accumulated*
									*Additional*								*Other*
									*Paid-In*		*Treasury*			*Accumulated*			*Comprehensive*
	*Shares*		*Amount*		*Shares*		*Amount*		*Capital*		*Stock*			*Deficit*			*Gain*		*Total*
Balances, January 31, 2023		15,721	$	157		1,683	$	37,779	$	129,580	$	(16,863	)	$	(127,635	)	$	34	$	23,052
Net loss		—		—		—		—		—		—			(240	)		—		(240	)
Stock-based compensation		—		—		—		—		50		—			—			—		50
Balances, April 30, 2023		15,721	$	157		1,683	$	37,779	$	129,630	$	(16,863	)	$	(127,875	)	$	34	$	22,862

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MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

	*Common Stock*				*Preferred Stock*												*Accumulated*
									*Additional*								*Other*
									*Paid-In*		*Treasury*			*Accumulated*			*Comprehensive*
	*Shares*		*Amount*		*Shares*		*Amount*		*Capital*		*Stock*			*Deficit*			*Loss*			*Total*
Balances, January 31, 2022		15,705	$	157	$	1,683	$	37,779	$	128,926	$	(16,862	)	$	(117,856	)	$	(1,881	)	$	30,263
Net loss		—		—		—		—		—		—			(2,419	)		—			(2,419	)
Foreign currency translation		—		—		—		—		—		—			—			(3	)		(3	)
Restricted stock issued		10		—		—		—		—		—			—			—			—
Restricted stock surrendered for tax withholding		—		—		—		—		—		(1	)		—			—			(1	)
Preferred stock dividends		—		—		—		—		—		—			(947	)		—			(947	)
Stock-based compensation		—		—		—		—		236		—			—			—			236
Balances, April 30, 2022		15,715	$	157	$	1,683	$	37,779	$	129,162	$	(16,863	)	$	(121,222	)	$	(1,884	)	$	27,129

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

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MIND TECHNOLOGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Organization and Liquidity

MIND Technology, Inc., a Delaware corporation (the “Company”), formerly Mitcham Industries, Inc., a Texas corporation, was incorporated in 1987. Effective August 3, 2020 the Company effectuated a reincorporation to the state of Delaware. Concurrent with the reincorporation the name of the Company was changed to MIND Technology, Inc.

The Company, through its wholly owned subsidiaries, Seamap Pte Ltd, MIND Maritime Acoustics, LLC, Seamap (Malaysia) Sdn Bhd and Seamap (UK) Ltd (collectively “Seamap”), and Klein Marine Systems, Inc. (“Klein”), designs, manufactures and sells a broad range of proprietary products for the seismic, hydrographic and offshore industries with product sales and support facilities based in Singapore, Malaysia, the United Kingdom and the states of New Hampshire and Texas. Prior to July 31, 2020, the Company, through its wholly owned Canadian subsidiary, Mitcham Canada, ULC (“MCL”), its wholly owned Hungarian subsidiary, Mitcham Europe Ltd. (“MEL”), and its branch operations in Colombia, provided full-service equipment leasing, sales and service to the seismic industry worldwide (the “Leasing Business”). Effective July 31, 2020, the Leasing Business has been classified as held for sale and the financial results reported as discontinued operations (see Note 3 – “Assets Held for Sale and Discontinued Operations” for additional details). All intercompany transactions and balances have been eliminated in consolidation.

These condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. The Company has a history of generating losses and negative cash from operating activities and may not have access to sources of capital that were available in prior periods. In addition, emerging supply chain disruptions and recent volatility in oil prices have created significant uncertainty in the global economy which could have a material adverse effect on the Company’s business, financial position, results of operations and liquidity. Accordingly, substantial doubt has arisen regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company not be able to continue as a going concern.

Management has identified the following mitigating factors regarding adequate liquidity and capital resources to meet its obligations:

•

The Company has no obligations or agreements containing “maintenance type” financial covenants.

•

The Company had working capital of approximately $13.7 million as of April 30, 2023, including cash of approximately $815,000.

•

Should revenues be less than projected, the Company believes it is able, and has plans in place, to reduce costs proportionately in order to maintain positive cash flow.

•

The majority of the Company’s costs are variable in nature, such as raw materials and personnel related costs. The Company has recently eliminated two executive level positions and other administrative positions, and additional reductions in operations, sales, and general and administrative headcount could be made, if deemed necessary by management.

•

The Company had a backlog of orders of approximately $22.6 million as of April 30, 2023. Production for certain of these orders was in process and included in inventory as of April 30, 2023, thereby reducing the liquidity needed to complete the orders.

•

There were no dividends declared or paid on the Company’s Preferred stock for the first quarter of fiscal 2024.The Company declared and paid the quarterly dividend on its Preferred Stock for the first quarter of fiscal 2023, but deferred all dividend payments for the subsequent quarters of fiscal 2023. The Company also has the option to defer future quarterly dividend payments if deemed necessary. The dividends are a cumulative dividend that accrue for payment in the future. During a deferral period, the Company is prohibited from paying dividends or distributions on its common stock or redeeming any of those shares. Further, if the Company does not pay dividends on its Series A Preferred Stock for six or more quarters, the holders of Series A Preferred Stock will have the right to appoint two directors to the Company's board.

•

In recent years, the Company has raised capital through the sale of Common Stock and Preferred Stock pursuant to the ATM Offering Program (as defined herein) and underwritten offerings on Form S-1. Currently, the Company is not eligible to issue securities pursuant to Form S-3 and accordingly cannot sell securities pursuant to the ATM Offering Program. However, the Company may sell securities pursuant to Form S-1 or in private transactions. Management expects to be able to raise further capital through these available means should the need arise.

•

Based on publicized transactions and preliminary discussions with potential funding sources, management believes that other sources of debt and equity financing are available. Such sources could include private or public issues of equity or debt securities, or a combination of such securities. Other sources could include secured debt financing, sale-leaseback transactions on owned real estate or investment from strategic industry participants. There can be no assurance that any of these sources will be available to the Company, available in adequate amounts, or available under acceptable terms should the need arise.

Notwithstanding the mitigating factors identified by management, there remains substantial doubt regarding the Company's ability to meet its obligations as they arise over the next twelve months.

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2. Basis of Presentation

The condensed consolidated balance sheet as of January 31, 2023, for the Company has been derived from audited consolidated financial statements. The unaudited interim condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2023 (“fiscal 2023”). In the opinion of the Company’s management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position as of April 30, 2023, the results of operations for the three-months ended April 30, 2023 and 2022, the cash flows for the three months ended April 30, 2023 and 2022, and the statement of stockholders’ equity for the three-months ended April 30, 2023 and 2022, have been included in these condensed consolidated financial statements. The foregoing interim results are not necessarily indicative of the results of operations to be expected for the full fiscal year ending January 31, 2024 (“fiscal 2024”).

3. Assets Held for Sale and Discontinued Operations

On July 27, 2020, the Board determined to exit the Leasing Business. As a result, the assets, excluding cash, and liabilities of the Leasing Business were considered held for sale and its results of operations were reported as discontinued operations through the fiscal year ended January 31, 2023. As of February 1, 2023, discontinued operations were considered materially completed.

The results of operations from discontinued operations for the three-months ended April 30, 2023 and 2022 consist of the following:

	*For the Three Months Ended April 30,*
	*2023*		*2022*
Revenues:	(in thousands)
Revenue from discontinued operations	$	—	$	—
Cost of sales:
Cost of discontinued operations		—		25
Operating expenses:
Selling, general and administrative		—		113
Total operating expenses		—		113
Operating loss		—		(138	)
Other income		—		524
Income before income taxes from discontinued operations		—		386
Net income from discontinued operations		—		386

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

	*For the Three Months Ended April 30,*
	*2023*		*2022*
	(in thousands)
Gross profit from sale of assets held-for-sale	$	—	$	(280	)
Sale of assets held for sale	$	—	$	283

4. New Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, to address timing on recognition of credit losses on loans and other financial instruments. This update requires all organizations to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 was effective during the three months ended April 30, 2023. The adoption of this standard did not have a material effect on the Company’s financial statements.

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5. Revenue from Contracts with Customers

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

	*Three Months Ended April 30,*
	*2023*		*2022*
Revenue recognized at a point in time:	(in thousands)
Seamap	$	10,405	$	7,994
Klein		1,472		1,008
Total revenue recognized at a point in time	$	11,877	$	9,002
Revenue recognized over time:
Seamap	$	192	$	85
Klein	$	517	$	—
Total revenue recognized over time		709		85
Total revenue from contracts with customers	$	12,586	$	9,087

The revenue from products manufactured and sold by our Seamap and Klein businesses, is generally recognized at a point in time, or when the customer takes possession of the product, based on the terms and conditions stipulated in our contracts with customers. However, from time to time our Seamap and Klein businesses provide repair and maintenance services, or perform upgrades, on customer owned equipment in which case revenue is recognized over time. In addition, our Seamap business provides annual Software Maintenance Agreements (“SMA”) to customers who have an active license for software embedded in Seamap products. The revenue from SMA is recognized over time, with the total value of the SMA recognized in equal monthly amounts over the life of the contract.

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

	*Three Months Ended April 30,*
	*2023*		*2022*
	(in thousands)
United States	$	1,342	$	2,253
Europe		7,035		4,612
Asia-Pacific		3,953		2,184
Other		256		38
Total revenue from contracts with customers	$	12,586	$	9,087

As of April 30, 2023, and January 31, 2023, contract assets and liabilities consisted of the following:

	*April 30, 2023*		*January 31, 2023*
Contract Assets:	(in thousands)
Unbilled revenue - current	$	13	$	2
Total unbilled revenue	$	13	$	2
Contract Liabilities:
Deferred revenue & customer deposits - current	$	1,178	$	571
Total deferred revenue & customer deposits	$	1,178	$	571

Considering the products manufactured and sold by our Seamap and Klein businesses and the Company’s standard contract terms and conditions, we expect our contract assets and liabilities to turn over, on average, within a period of three to nine months.

With respect to the disclosures above, sales and transaction-based taxes are excluded from revenue, and we do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Also, we expense costs incurred to obtain contracts because the amortization period would be one year or less. These costs are recorded in selling, general and administrative expenses.

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6. Balance Sheet

	*April 30, 2023*			*January 31, 2023*
	(in thousands)
Inventories:
Raw materials	$	8,341		$	8,480
Finished goods		3,657			4,156
Work in progress		4,079			4,422
Cost of inventories		16,077			17,058
Less allowance for obsolescence		(1,738	)		(1,740	)
Total inventories, net	$	14,339		$	15,318

	*April 30, 2023*			*January 31, 2023*
	(in thousands)
Property and equipment:
Furniture and fixtures	$	10,021		$	9,896
Autos and trucks		358			358
Land and buildings		4,767			4,880
Cost of property and equipment		15,146			15,134
Accumulated depreciation and amortization		(11,359	)		(11,189	)
Total property and equipment, net	$	3,787		$	3,945

As of January 31, 2023, the Company completed an annual review of property and equipment noting no indications that the recorded value of assets may not be recoverable and no impairment was recorded for fiscal 2023. Since January 31, 2023, there have been no changes to the market, economic or legal environment in which the Company operates or overall performance of the Company in the three months ended April 30, 2023, that would, in the aggregate, indicate additional impairment analysis is necessary as of April 30, 2023.

7. Leases

The Company has certain non-cancelable operating lease agreements for office, production and warehouse space in Texas, Singapore, Malaysia, and the United Kingdom. Our lease obligation in Canada was terminated as of March 31, 2022, and our lease obligation in Hungary was terminated November 30, 2022.

Lease expense for the three months ended April 30, 2023 was approximately $221,000, and during the three months ended April 30, 2022 was approximately $203,000, and were recorded as a component of operating income (loss). Included in these costs was short-term lease expense of approximately $2,000 for the three months ended April 30, 2023, and during the three months ended April 30, 2022 was approximately $9,000.

Supplemental balance sheet information related to leases as of April 30, 2023 and January 31, 2023 were as follows:

Lease	*April 30, 2023*		*January 31, 2023*
Assets	(in thousands)
Operating lease assets	$	1,762	$	1,749

Liabilities
Operating lease liabilities	$	1,762	$	1,749

Classification of lease liabilities
Current liabilities	$	753	$	903
Non-current liabilities		1,009		846
Total Operating lease liabilities	$	1,762	$	1,749

Lease-term and discount rate details as of April 30, 2023 and January 31, 2023 were as follows:

The incremental borrowing rate was calculated using the Company's weighted average cost of capital.

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Supplemental cash flow information related to leases was as follows:

Lease	*Three Months Ended April 30, 2023*			*Three Months Ended April 30, 2022*
Cash paid for amounts included in the measurement of lease liabilities:	(in thousands)
Operating cash flows from operating leases	$	(221	)	$	(203	)

Changes in lease balances resulting from new and modified leases:
Operating leases	$	223		$	—

Maturities of lease liabilities at April 30, 2023 were as follows:

	*April 30, 2023*
	(in thousands)
2024	$	753
2025		691
2026		294
2027		188
2028		188
Thereafter		15
Total payments under lease agreements	$	2,129

Less: imputed interest		(367	)
Total lease liabilities	$	1,762

8. Intangible Assets

		*April 30, 2023*										*January 31, 2023*
	*Weighted*	*Gross*								*Net*		*Gross*								*Net*
	*Average Life at*	*Carrying*		*Accumulated*						*Carrying*		*Carrying*		*Accumulated*						*Carrying*
	*April 30, 2023*	*Amount*		*Amortization*			*Impairment*			*Amount*		*Amount*		*Amortization*			*Impairment*			*Amount*
		(in thousands)										(in thousands)
Proprietary rights	4.9		8,238		(4,722	)		—			3,516		8,238		(4,606	)		—			3,632
Customer relationships	0.1		5,024		(4,919	)		—			105		5,024		(4,894	)		—			130
Patents	1.8		2,540		(2,090	)		—			450		2,540		(2,027	)		—			513
Trade name	3.1		894		(99	)		(760	)		35		894		(97	)		(760	)		37
Developed technology	2.7		1,430		(1,049	)		—			381		1,430		(1,013	)		—			417
Other	1.1		714		(537	)		—			177		705		(503	)		—			202
Intangible assets		$	18,840	$	(13,416	)	$	(760	)	$	4,664	$	18,831	$	(13,140	)	$	(760	)	$	4,931

Approximately $923,000 of the gross carrying amount of intangible assets, primarily in proprietary rights, are related to technology development projects that have not yet been completed. As a result, these intangible assets are not currently being amortized.

On January 31, 2023, the Company completed an annual review of amortizable intangible assets. Based on a review of qualitative factors it was determined that there were no events or changes in circumstances indicating that the carrying value of amortizable intangible assets was not recoverable. During the three months ended April 30, 2023, there have been no substantive indicators of impairment.

Aggregate amortization expense was $276,000 and $271,000 for the three months ended April 30, 2023 and 2022, respectively. As of April 30, 2023, future estimated amortization expense related to amortizable intangible assets was estimated to be:

For fiscal years ending January 31,		(in thousands)
2024	$	757
2025		728
2026		628
2027		349
2028		283
Thereafter		996
Total	$	3,741

Table of Contents

Lease term and discount rate

April 30, 2023

January 31, 2023

Weighted average remaining lease term (years)

Operating leases

Weighted average discount rate:

Operating leases