SEC Filing | MIND Technology, Inc.

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mind-20201031

Table of Contents

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 October 31, 2020


☐			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: 12,875,221 shares of common stock, $0.01 par value, were outstanding as of December 3, 2020.

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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 October 31, 2020 and January 31, 2020	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended October 31, 2020 and 2019	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended O cto ber 31, 2020 and 2019	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 31, 2020 and 2019	4
	Condensed Consolidated Statements of Shareholders' Equity for the Three and Nine Months Ended October 31, 2020 and 2019	6
	Notes to Condensed Consolidated Financial Statements	8
	Cautionary Statement about Forward-Looking Statements	17

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	28

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults Upon Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	29

	Exhibit Index	29

	Signatures	32

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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)


	October 31, 2020		January 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	2,664	$	3,090
Restricted cash	—		144
Accounts receivable, net of allowance for doubtful accounts of $1,044 and $2,378 at October 31, 2020 and January 31, 2020, respectively	5,609		6,623

Inventories, net	11,880		12,656

Prepaid expenses and other current assets	1,278		1,987
Assets held for sale	5,440		14,913
Total current assets	26,871		39,413
Property and equipment, net	4,954		5,419
Operating lease right-of-use assets	1,363		2,300
Intangible assets, net	6,831		8,136
Goodwill	—		2,531



Other assets	774		429

Total assets	$	40,793	$	58,228
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,441	$	1,767

Deferred revenue	205		731
Accrued expenses and other current liabilities	2,468		1,565
Income taxes payable	691		316
Operating lease liabilities - current	280		1,339
Liabilities held for sale	1,133		2,730
Total current liabilities	6,218		8,448
Operating lease liabilities - non-current	1,083		961
Notes payable	1,607		—
Other non-current liabilities	797		967
Deferred tax liability	134		200
Total liabilities	9,839		10,576
Shareholders’ equity:
Preferred stock, $1.00 par value; 2,000 shares authorized; 994 shares issued and outstanding at October 31, 2020 and January 31, 2020	22,104		22,104
Common stock, $0.01 par value; 40,000 shares authorized; 14,773 and 14,097 shares issued at October 31, 2020 and January 31, 2020, respectively	148		141
Additional paid-in capital	125,810		123,964
Treasury stock, at cost (1,929 shares at October 31, 2020 and January 31, 2020)	(16,860)		(16,860)
Accumulated deficit	(95,823)		(77,310)
Accumulated other comprehensive loss	(4,425)		(4,387)
Total shareholders’ equity	30,954		47,652
Total liabilities and shareholders’ equity	$	40,793	$	58,228

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 October 31,				For the Nine Months Ended October 31,
	2020		2019		2020		2019
Revenues:
Sale of marine technology products	$	6,541	$	8,175	$	14,814	$	21,039


Total revenues	6,541		8,175		14,814		21,039
Cost of sales:
Sale of marine technology products	4,267		4,860		10,039		12,478



Total cost of sales	4,267		4,860		10,039		12,478
Gross profit	2,274		3,315		4,775		8,561
Operating expenses:
Selling, general and administrative	2,973		3,401		8,915		10,538
Research and development	912		629		2,077		1,442

Impairment of intangible assets	—		—		2,531		—
Depreciation and amortization	662		604		2,092		1,810
Total operating expenses	4,547		4,634		15,615		13,790
Operating loss	(2,273)		(1,319)		(10,840)		(5,229)
Other income (expense):


Other, net	12		(31)		68		145
Total other income (expense)	12		(31)		68		145
Loss from continuing operations before income taxes	(2,261)		(1,350)		(10,772)		(5,084)
(Provision) benefit for income taxes	(109)		31		79		75
Loss from continuing operations	(2,370)		(1,319)		(10,693)		(5,009)
Loss from discontinued operations, net of income taxes	(1,220)		(709)		(6,143)		(2,570)
Net loss	$	(3,590)	$	(2,028)	$	(16,836)	$	(7,579)
Preferred stock dividends	(559)		(522)		(1,677)		(1,492)
Net loss attributable to common shareholders	$	(4,149)	$	(2,550)	$	(18,513)	$	(9,071)
Net loss per common share - Basic
Continuing operations	$	(0.24)	$	(0.15)	$	(1.01)	$	(0.54)
Discontinued operations	$	(0.10)	$	(0.06)	$	(0.50)	$	(0.21)
Net loss	$	(0.34)	$	(0.21)	$	(1.51)	$	(0.75)
Net loss per common share - Diluted
Continuing operations	$	(0.24)	$	(0.15)	$	(1.01)	$	(0.54)
Discontinued operations	$	(0.10)	$	(0.06)	$	(0.50)	$	(0.21)
Net loss	$	(0.34)	$	(0.21)	$	(1.51)	$	(0.75)
Shares used in computing net loss per common share:
Basic	12,313		12,158		12,223		12,135
Diluted	12,313		12,158		12,223		12,135

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 October 31,				For the Nine Months Ended October 31,
	2020		2019		2020		2019
Net loss attributable to common shareholders	$	(4,149)	$	(2,550)	$	(18,513)	$	(9,071)
Change in cumulative translation adjustment for sale of foreign entity	—		—		—		(331)
Other changes in cumulative translation adjustment	11		115		(38)		(45)
Comprehensive loss	$	(4,138)	$	(2,435)	$	(18,551)	$	(9,447)

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 Nine Months Ended October 31,
	2020		2019
Cash flows from operating activities:
Net loss	$	(16,836)	$	(7,579)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	3,920		5,806
Stock-based compensation	562		612
Impairment of intangible assets	2,531		—
Loss on disposal of discontinued operations	1,859		—
Provision for doubtful accounts, net of charge offs	470		23
Provision for inventory obsolescence	256		—
Gross profit from sale of lease pool equipment	(1,326)		(987)
Gross profit from sale of other equipment	(303)		—

Deferred tax expense	(32)		135
Non-current prepaid tax	—		(157)
Changes in:
Accounts receivable	3,640		(1,020)
Unbilled revenue	(6)		(302)
Inventories	762		(2,835)
Prepaid expenses and other current and long-term assets	1,065		240

Income taxes receivable and payable	390		—
Accounts payable, accrued expenses and other current liabilities	(1,827)		(392)

Deferred revenue	72		1,979
Foreign exchange losses net of gains	—		230
Net cash used in operating activities	(4,803)		(4,247)
Cash flows from investing activities:
Purchases of seismic equipment held for lease	(110)		(1,939)

Purchases of property and equipment	(64)		(893)
Sale of used lease pool equipment	2,010		1,415
Sale of assets held for sale	734		—
Sale of business, net of cash sold	—		239
Net cash provided by (used in) investing activities	2,570		(1,178)
Cash flows from financing activities:


Proceeds from exercise of stock options	—		25
Net proceeds from preferred stock offering	—		2,211
Net proceeds from common stock offering	1,291		—
Preferred stock dividends	(1,118)		(1,492)
Proceeds from PPP loans	1,607		—
Net cash provided by financing activities	1,780		744
Effect of changes in foreign exchange rates on cash, cash equivalents and restricted cash	(117)		(69)
Net decrease in cash, cash equivalents and restricted cash	(570)		(4,750)
Cash, cash equivalents and restricted cash, beginning of period	3,234		9,549
Cash, cash equivalents and restricted cash, end of period	$	2,664	$	4,799
Supplemental cash flow information:
Interest paid	$	34	$	40
Income taxes paid	$	219	$	325
Purchases of seismic equipment held for lease in accounts payable at end of period	$	—	$	753
Purchase of seismic equipment held for lease through settlement of accounts receivable	$	—	$	826

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

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MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands)

(unaudited)


	Common Stock			Preferred Stock									Accumulated Other Comprehensive Loss
	Shares	Amount		Shares	Amount		Additional Paid-In Capital		Treasury Stock		Accumulated Deficit				Total
Balances, January 31, 2020	14,097	$	141	994	$	22,104	$	123,964	$	(16,860)	$	(77,310)	$	(4,387)	$	47,652
Net loss	—	—		—	—		—		—		(6,642)		—		(6,642)
Foreign currency translation	—	—		—	—		—		—		—		(131)		(131)



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

Stock-based compensation	—	—		—	—		230		—		—		—		230
Balances, April 30, 2020	14,097	$	141	994	$	22,104	$	124,194	$	(16,860)	$	(84,511)	$	(4,518)	$	40,550
Net loss	—	—		—	—		—		—		(6,604)		—		(6,604)
Foreign currency translation	—	—		—	—		—		—		—		82		82



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

Stock-based compensation	—	—		—	—		219		—		—		—		219
Balances, July 31, 2020	14,097	$	141	994	$	22,104	$	124,413	$	(16,860)	$	(91,674)	$	(4,436)	$	33,688
Net loss	—	—		—	—		—		—		(3,590)		—		(3,590)
Foreign currency translation	—	—		—	—		—		—		—		11		11




Preferred stock dividends	—	—		—	—		—		—		(559)		—		(559)
Common stock offerings	676	7		—	—		1,284		—		—		—		1,291

Stock-based compensation	—	—		—	—		113		—		—		—		113
Balances, October 31, 2020	14,773	$	148	994	$	22,104	$	125,810	$	(16,860)	$	(95,823)	$	(4,425)	$	30,954

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MIND TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands)

(unaudited)


	Common Stock			Preferred Stock									Accumulated Other Comprehensive Loss
	Shares	Amount		Shares	Amount		Additional Paid-In Capital		Treasury Stock		Accumulated Deficit				Total
Balances, January 31, 2019	14,049	$	140	830	$	18,330	$	123,085	$	(16,860)	$	(63,973)	$	(4,044)	$	56,678
Net loss	—	—		—	—		—		—		(2,415)		—		(2,415)
Foreign currency translation	—	—		—	—		—		—		—		(450)		(450)


Preferred stock offering	—	—		17	409		—		—		—		—		409
Preferred stock dividends	—	—		—	—		—		—		(471)		—		(471)

Stock-based compensation	—	—		—	—		172		—		—		—		172
Balances, April 30, 2019	14,049	$	140	847	$	18,739	$	123,257	$	(16,860)	$	(66,859)	$	(4,494)	$	53,923
Net loss	—	—		—	—		—		—		(3,137)		—		(3,137)
Foreign currency translation	—	—		—	—		—		—		—		(41)		(41)

Equity Compensation	9	1		—	—		25		—		—		—		26
Preferred stock offering	—	—		70	1,571		—		—		—		—		1,571
Preferred stock dividends	—	—		—	—		—		—		(499)		—		(499)

Stock-based compensation	—	—		—	—		170		—		—		—		170
Balances, July 31, 2019	14,058	$	141	917	$	20,310	$	123,452	$	(16,860)	$	(70,495)	$	(4,535)	$	52,013
Net loss	—	—		—	—		—		—		(2,028)		—		(2,028)
Foreign currency translation	—	—		—	—		—		—		—		115		115
Restricted stock issued	39	—		—	—		—		—		—		—		—

Preferred stock offering	—	—		11	230		—		—		—		—		230
Preferred stock dividends	—	—		—	—		—		—		(522)		—		(522)

Stock-based compensation	—	—		—	—		270		—		—		—		270
Balances, October 31, 2019	14,097	$	141	928	$	20,540	123,722		$	(16,860)	$	(73,045)	$	(4,420)	$	50,078

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

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. and the number of shares of common stock and preferred stock authorized for issuance was increased. See Note 16 - Corporate Restructuring, to the condensed consolidated financial statements.

The Company, through its wholly owned subsidiary, Seamap Pte, Ltd. (“Seamap”), and its wholly owned subsidiary, 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 New Hampshire, Singapore, Malaysia, the United Kingdom and Texas. Prior to July 31, 2020, the Company, together with 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. In February 2019 the Company sold its wholly owned Australian subsidiary Seismic Asia Pacific Pty Ltd (“SAP”). See Note 14 - Sale of Subsidiaries to the condensed consolidated financial statements for more information. All intercompany transactions and balances have been eliminated in consolidation.

During the second quarter of the fiscal year ending January 31, 2021 (“fiscal 2021”), management and the board of directors (the “Board”) of the Company determined to exit the land seismic leasing business (the “Leasing Business”), which comprises essentially all operations of the Equipment Leasing segment. Accordingly, the results of operations for this segment are excluded from the Company’s continuing operations for fiscal 2021 and all comparative periods and presented as discontinued operations in the Company’s condensed consolidated financial statements. See Note 3 - Assets Held for Sale and Discontinued Operations to the condensed consolidated financial statements for further details.

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 losses, has had negative cash from operating activities in the last two fiscal years and may not have access to sources of capital that were available in prior periods. In addition, the COVID-19 pandemic and the decline in oil prices during the first nine months of fiscal 2021 have created substantial doubt and 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 condensed 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.

2. Basis of Presentation

The condensed consolidated balance sheet as of January 31, 2020 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, 2020. 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 October 31, 2020, the results of operations for the three and nine months ended October 31, 2020 and 2019, the cash flows for the nine months ended October 31, 2020 and 2019, and the statement of shareholders’ equity for the three and nine months ended October 31, 2020 and 2019, 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, 2021.

3. Assets Held for Sale and Discontinued Operations

On July 27, 2020, the Board determined to exit the Leasing Business, which comprises essentially all operations of the Equipment Leasing segment. As a result, the assets, excluding cash, and liabilities of the Equipment Leasing segment are considered held for sale and the segment’s operations are reported as discontinued operations as of October 31, 2020 and for all comparative periods presented in these condensed consolidated financial statements. The Company anticipates selling the discontinued operations within twelve months from July 27, 2020 in a single transaction, or multiple transactions, which may involve the sale of legal entities or assets.

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


	October 31, 2020		January 31, 2020
Current assets of discontinued operations:


Accounts receivable, net	1,963		5,699

Inventories, net	359		605

Prepaid expenses and other current assets	141		227


Seismic equipment lease pool and property and equipment, net	2,977		8,382








Total assets of discontinued operations	$	5,440	$	14,913

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


	October 31, 2020		January 31, 2020
Current liabilities of discontinued operations:
Accounts payable	$	71	$	884

Deferred revenue	18		34
Accrued expenses and other current liabilities	1,044		1,886
Income taxes payable	—		(74)






Total liabilities of discontinued operations	1,133		2,730

The results of operations from discontinued operations for the three and nine months ended October 31, 2020 and 2019, consist of the following:


	For the Three Months Ended October 31,				For the Nine Months Ended October 31,
	2020		2019		2020		2019
Revenues:
Revenue from discontinued operations	$	313	$	2,488	$	5,731	$	8,379
Cost of sales:
Cost of discontinued operations	263		1,752		4,389		6,266
Operating expenses:
Selling, general and administrative	1,146		1,305		4,322		4,195
Provision for doubtful accounts	—		—		470		—
Depreciation and amortization	43		41		128		136
Total operating expenses	1,189		1,346		4,920		4,331
Operating loss	(1,139)		(610)		(3,578)		(2,218)
Other income (expenses)	(75)		(8)		—		(114)
Loss on disposal (including $2,745 of cumulative translation loss)	—		—		(1,859)		—
Loss before income taxes	(1,214)		(618)		(5,437)		(2,332)
Provision for income taxes	(6)		(91)		(706)		(238)
Net loss	(1,220)		(709)		(6,143)		(2,570)

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


	For the Nine Months Ended October 31,
		2020		2019
Depreciation and amortization		$	1,771	$	3,651
Gross profit from sale of lease pool equipment		$	(1,326)	$	(987)
Provisions for doubtful accounts		$	470	$	—
Loss on disposal of discontinued operations		$	1,859	$	—
Sale of used lease pool equipment		$	2,010	$	1,415
Sale of assets held for sale		$	734	$	—

Purchase of seismic equipment held for lease		$	(110)	$	(1,938)

4. New Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (“Topic 740”): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating certain exceptions to the general principles in Topic 740 and by clarifying and amending existing guidance to improve consistent application. This ASU is effective for the annual period beginning after December 15, 2020, including interim periods within that annual period. Certain amendments within this ASU are required to be applied on a retrospective basis for all periods presented; others are to be applied using a modified retrospective approach with a cumulative-effect adjustment to retained earnings, if any, as of the beginning of the first reporting period in which the guidance is adopted; and yet others are to be applied using either basis. All other amendments not specified in the ASU should be applied on a prospective basis. Early adoption is permitted. An entity that elects to early adopt in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The Company is currently evaluating the new guidance to determine the impact it will have on its condensed consolidated financial statements.

In August 2018, the SEC adopted amendments to simplify certain disclosure requirements, as set forth in Securities Act Release No. 33-10532, Disclosure Update and Simplification, which includes a requirement for entities to present the changes in shareholders’ equity in the interim financial statements in quarterly reports on Form 10-Q. This amendment is effective for all filings made on or after November 5, 2018. Considering the timing of effectiveness of the amendment and proximity to the filing date for most filers’ quarterly reports, the SEC has allowed for a filer’s first presentation of the changes in shareholders’ equity to be included in its Form 10-Q for the quarter that begins after the effective date. The Company adopted the SEC’s amendment to interim disclosures in the first quarter of fiscal 2020 and has presented the changes in shareholders’ equity on an interim basis.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) as modified by subsequently issued ASUs 2018-01, 2018-10, 2018-11 and 2018-20. The Company adopted the standard effective February 1, 2019. We have elected to apply the current period transition approach as introduced by ASU 2018-11 for our transition at February 1, 2019 and we have elected to apply several of the practical expedients in conjunction with accounting policy elections. See Note 7 - Leases to our condensed consolidated financial statements for additional details.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurement by removing, modifying and adding certain disclosures. This ASU is effective for the annual period beginning after December 15, 2019, including interim periods within that annual period. The Company adopted this guidance effective February 1, 2020. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (“Topic 718”): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees except for certain circumstances. The Company adopted this guidance in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.

5. Revenue from Contracts with Customers

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

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	Three Months Ended October 31,				Nine Months Ended October 31,
	2020		2019		2020		2019
Revenue recognized at a point in time:	(in thousands)
Seamap	$	5,196	$	5,694	$	11,066	$	14,648
Klein	1,150		2,380		3,152		5,778
SAP	—		—		—		101
Total revenue recognized at a point in time	$	6,346	$	8,074	$	14,218	$	20,527
Revenue recognized over time:
Seamap	$	195	$	238	$	596	$	512


Total revenue recognized over time	195		238		596		512
Total revenue from contracts with customers	$	6,541	$	8,312	$	14,814	$	21,039

The revenue from products manufactured and sold by our Seamap and Klein businesses, as well as the revenue from products marketed and sold by our SAP business, 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. Our Seamap business also provides Software Maintenance Agreements (“SMA”) to customers who have an active license for software embedded in Seamap products. The revenue from SMA’s is recognized over time, with the total value of the SMA amortized in equal monthly amounts over the life of the contract, which is typically twelve months. The Company sold SAP during the first quarter of fiscal 2020. See Note 14 to our condensed consolidated financial statements for more information.

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


	Three Months Ended October 31,				Nine Months Ended October 31,
	2020		2019		2020		2019
	(in thousands)
United States	$	282	$	1,453	$	2,068	$	3,293
Europe, Russia & CIS	2,001		3,769		4,981		8,936
Middle East & Africa	757		810		1,054		1,359
Asia-Pacific	3,342		1,308		5,841		4,417
Canada & Latin America	159		972		870		3,034
Total revenue from contracts with customers	$	6,541	$	8,312	$	14,814	$	21,039

As of October 31, 2020, and January 31, 2020, contract assets and liabilities consisted of the following:


	October 31, 2020		January 31, 2020
Contract Assets:	(in thousands)
Unbilled revenue - current	$	7	$	13

Total unbilled revenue	$	7	$	13
Contract Liabilities:
Deferred revenue & customer deposits - current	$	304	$	220
Deferred revenue & customer deposits - non-current	—		12
Total deferred revenue & customer deposits	$	304	$	232

Considering the products manufactured and sold by the businesses in our Marine Technology Products segment 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 six months.

Pursuant to practical expedients and exemptions included in ASU 2014-09, Revenue from Contracts with Customers, sales and transaction-based taxes are excluded from revenue. Also, we do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Additionally, we expense costs incurred to obtain contracts when incurred because the amortization period would have been one year or less. These costs are recorded in selling, general and administrative expenses.

6. Balance Sheet

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