Note 2 - Sale of a Subsidiary and Discontinued Operations

12 Months Ended

Jan. 31, 2025

Notes to Financial Statements

Sale of Subsidiaries and Subsequent Events [Text Block]

2. Sale of a Subsidiary and Discontinued Operations

On August 21, 2023, the Company sold Klein pursuant to a Stock Purchase Agreement (the “SPA”) with General Oceans AS (“the Buyer"). In connection with the SPA, the Company granted the Buyer a license to its Spectral Ai software suite (“Spectral Ai”). The license is exclusive to the Buyer as it relates to side scan sonar. The Company and the Buyer also entered into a collaboration agreement for the further development of Spectral Ai and potentially other software projects. The foregoing transactions contemplated by the SPA are referred to as the “Sale of Klein”. The aggregate consideration to the Company consisted of a cash payment of $10.8 million, resulting in a gain of approximately $2.3 million. The SPA contained customary representation and warranties. On August 22, 2023, following the closing of the Sale of Klein, all outstanding amounts due and owed, including principal, interest, and other charges, under the Loan were repaid in full and the Loan was terminated, and all liens and security interests granted thereunder were released and terminated (see Note 11 - "Notes Payable" for additional details). As a result of the sale, there are no assets or liabilities and the results of operations are reported as discontinued operations for the years ended  January 31, 2024.

The results of operations from discontinued operations for the twelve months ended January 31, 2025 and 2024, consist of the following:

	Twelve Months Ended January 31,
	2025		2024
Revenues:	(in thousands)
Revenue from discontinued operations	$	—	$	3,315
Cost of sales:
Cost of discontinued operations		—		1,979
Operating expenses:
Selling, general and administrative		—		2,022
Depreciation and amortization		—		338
Total operating expenses		—		2,360
Operating loss		—		(1,024	)
Other income, including $2.3 million gain on sale of Klein		—		2,415
Income before income taxes from discontinued operations		—		1,391
Provision for income taxes from discontinued operations		—		(17	)
Net income from discontinued operations		—		1,374

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

	Twelve Months Ended January 31,
	2025		2024
	(in thousands)
Depreciation and amortization	$	—	$	338
Gain on sale of Klein	$	—	$	2,343