The statements contained under the caption MD&A and other information contained
elsewhere in this quarterly report, which can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "continue,"
"remains," "intend," "aim," "should," "prospects," "could," "future,"
"potential," "believes," "plans," "likely" and "probable" or the negative
thereof or other variations thereon or comparable terminology, constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, and are subject to the safe harbors created thereby. These
statements should be considered as subject to the many risks and uncertainties
that exist in the Company's operations and business environment. Such risks and
uncertainties could cause actual results to differ materially from those
projected as a result of many factors, including, but not limited to, those
under the heading Item 1A. Risk Factors included in the Company's latest Annual
Report on Form 10-K.



This MD&A should be read in conjunction with the Company's consolidated
financial statements, including the notes thereto, contained elsewhere in this
report. Percentages set forth below in the MD&A have been rounded to the nearest
percentage point, and may not exactly correspond to the comparative data
presented.

COVID-19 and Depressed Oil and Gas Market Impact





The Company's results of operations, financial condition, liquidity and cash
flow in 2020 and the three months ended April 30, 2021 were adversely affected
by the COVID-19 pandemic and the depressed market prices for oil and gas.
Subsequent to April 30, 2021, the Company has experienced fewer COVID-19 related
impacts and has seen oil and gas prices increase, which has resulted
in increased business activity and improved financial results for the
Company. Although the Company believes the general economic environment in which
the Company operates has improved since the onset of the COVID-19 pandemic, the
Company continues to experience supply chain difficulties as discussed below,
and may continue to be adversely affected by COVID-19 in future periods, the
extent to which remains unclear at this time. See Item 1A. Risk Factors included
in the Company's latest Annual Report on Form 10-K for additional information.



As of the date of filing this Form 10-Q, all of the Company's plants are
operating. The Company's global supply chains have been adversely affected by
the COVID-19 pandemic. The Company is taking steps to ensure continuity of
supply. Due to the unprecedented actions taken to stem the spread of the virus
and the uncertainty of the duration and impact of additional actions that may be
required, the resulting future disruptions to the Company's operations are
uncertain.



In response to the factors noted above that negatively impacted our business in
2020 and early 2021, the Company has updated its forecasts more frequently to
determine the continuing financial impact of these events on the Company's
results of operations, financial condition and liquidity. As a result of the
market conditions in 2020 and early 2021, the Company reduced headcount, planned
capital expenditures and non-essential operating expenses. As market conditions
have improved and business activity has increased, the Company has increased
headcount and resumed its global capital expenditure programs.



On May 1, 2020, the Company entered into a loan agreement under the PPP and
received proceeds of approximately $3.2 million. Interest on the loan accrued at
a fixed interest rate of 1.0%. Under Section 1106 of the CARES Act, borrowers
are eligible for forgiveness of principal and accrued interest on the loans to
the extent that the proceeds are used to cover eligible payroll costs, mortgage
interest costs, rent and utility costs, otherwise described as qualified
expenses. During the three months ended July 31, 2020, the Company used all of
the PPP loan proceeds to pay for qualified expenses, 100% of which were used for
payroll related expenses.  The Company submitted its application and supporting
documentation for forgiveness to its bank, which submitted the application and
supporting documents to the Small Business Administration ("SBA").



Based on the facts and circumstances of the Company's PPP loan and according to
the applicable accounting guidance described herein, the Company has elected
to account for the PPP loan proceeds as a grant that has reasonable assurance of
being forgiven. As such, the Company recognized the proceeds in earnings during
the year ended January 31, 2021. The amounts were recognized in other income in
the consolidated statements of operations. On June 24, 2021, the Company was
notified by its lender that its PPP loan had been forgiven by the SBA.



Beginning in April 2020, the Company's subsidiary, Perma-Pipe Canada, Ltd.
("PPCA"), applied for relief in the form of grants from the Canadian government
under the Canadian Emergency Wage Subsidy ("CEWS") program. Based on the program
rules, the grants are applied for each month and are granted based on the amount
of eligible employee expenses incurred over the previous month. Beginning in
October 2020, PPCA also applied for grants under the Canadian Emergency Rent
Subsidy ("CERS") program. PPCA was approved for and received approximately
$0.6 million and $0.1 million in grants under the CEWS and CERS programs,
respectively, during the nine months ended October 31, 2021. Grants to the
Company under both programs ended in the second quarter of 2021. The
proceeds from the CEWS and CERS programs were recognized in other income in the
consolidated statements of operations.



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RESULTS OF OPERATIONS



The Company is engaged in the manufacture and sale of products in one reportable
segment. Since the Company focuses on large discrete projects, operating results
are significantly impacted as a result of large variations in the level of
project activity in reporting periods.



($ in thousands)                                                Three Months Ended October 31,                                                                     Nine Months Ended October 31,
                                                                                                              Change                                                                                             Change
                                            2021                              2020                   favorable/(unfavorable)                   2021                              2020                   favorable/(unfavorable)
                                              Percent of Net                    Percent of Net                                                   Percent of Net                    Percent of Net
                                 Amount            Sales           Amount            Sales                    Amount                Amount            Sales           Amount            Sales                    Amount
Net sales                       $  35,199                         $  20,294                         $                   14,905     $  99,426                         $  63,399                         $                   36,027

Gross profit                        7,629                  22 %       2,938                  14 %                        4,691        22,877                  23 %       8,769                  14 %                       14,108

General and administrative
expenses                            4,635                  13 %       4,528                  22 %                         (107 )      14,643                  15 %      13,320                  21 %                       (1,323 )

Selling expense                     1,303                   4 %       1,174                   6 %                         (129 )       3,397                   3 %       4,153                   7 %                          756

Interest expense, net                 270                               107                                               (163 )         717                               411                                               (306 )

Other income, net                      98                                (2 )                                              100           997                             3,672                                             (2,675 )

Income/(loss) from operations
before income taxes                 1,519                            (2,873 )                                            4,392         5,117                            (5,443 )                                           10,560

Income tax expense/(benefit)        1,024                               (23 )                                           (1,047 )       2,049                              (339 )                                           (2,388 )

Net income/(loss)                     495                            (2,850 )                                            3,345         3,068                            (5,104 )                                            8,172

Three months ended October 31, 2021 ("current quarter") vs. Three months ended October 31, 2020 ("prior year quarter")





Net sales:



Net sales were $35.2 million in the current quarter, an increase of
$14.9 million, or 73%, from $20.3 million in the prior year quarter. The
increase was a result of increased sales volumes in both North America and in
the Middle East, North Africa and India ("MENA") due to recovery from the
effects of the COVID-19 pandemic. In addition, the Company's United Arab
Emirates ("U.A.E.") business benefitted from the introduction of a new product
line subsequent to the third quarter of 2020.



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Gross profit:

Gross profit increased to $7.6 million, or 22% of net sales, in the current quarter from $2.9 million, or 14% of net sales, in the prior year quarter. This increase was driven by higher sales volumes and project and product mix.

General and administrative expenses:

General and administrative expenses were relatively consistent, increasing $0.1 million, or 2%, from the prior year quarter.





Selling expenses:

Selling expenses were relatively consistent, increasing slightly to $1.3 million in the current quarter, compared to $1.2 million in the prior year quarter.





Interest expense, net:



Net interest expense increased to $0.3 million in the current quarter from
$0.1 million in the prior year quarter. This increase was primarily related to
the sale leaseback transaction for our operating facility in Tennessee entered
into in April 2021.



Other income, net:



Other income, net remained relatively consistent, increasing to an income of
$0.1 million in the current quarter, compared to approximately zero in the prior
year quarter.

Income/(loss) from operations before income taxes:





Income/(loss) from operations before income taxes increased by $4.4 million to
income of $1.5 million in the current quarter from a loss of $(2.9) million in
the prior year quarter. The increase was a result of increased sales volumes in
both North America and MENA due to recovery from the effects of the COVID-19
pandemic. In addition, the Company's U.A.E. business benefitted from the
introduction of a new product line subsequent to the third quarter of 2020.

Income tax expense/(benefit):





The Company's worldwide effective tax rates ("ETR") were 67.6% and 0.8% in the
current quarter and the prior year quarter, respectively. The change in the ETR
from the prior year quarter to the current year quarter is largely due to
changes in the mix of income and loss in various jurisdictions and the absence
of recognizing tax benefits on losses in the United States due to a full
valuation allowance applied against its deferred tax assets.



The Company expects that future distributions from foreign subsidiaries will not
be subject to incremental U.S. federal tax as they will either be remittances of
previously taxed earnings and profits or eligible for a full dividends-received
deduction. Current and future earnings in the Company's subsidiaries in Canada
and Egypt are not permanently reinvested, and earnings in its Indian subsidiary
are partially permanently reinvested. The earnings from these subsidiaries will
be subject to tax in their local jurisdiction, and the impact of Indian,
Canadian and Egyptian withholding taxes will be recorded. As such, the Company
has accrued a liability of $0.8 million as of October 31, 2021 related to these
taxes.

For further information, see Note 5 - Income taxes, in the Notes to Consolidated Financial Statements.





Net income:

The resulting net income of $0.5 million in the current quarter was an
improvement of $3.4 million over the net loss of $(2.9) million in the prior
year quarter. The increase was a result of increased sales volumes in both North
America and MENA due to recovery from the effects of the COVID-19 pandemic. In
addition, the Company's U.A.E. business benefitted from the introduction of a
new product line subsequent to the third quarter of 2020.

Nine months ended October 31, 2021 ("current year-to-date") vs. Nine months ended October 31, 2020 ("prior year year-to-date")





Net sales:



Net sales were $99.4 million in the current year-to-date, an increase of
$36.0 million, or 57%, from $63.4 million in the prior year year-to-date. The
increase was a result of increased sales volumes in both North America and
MENA due to recovery from the effects of the COVID-19 pandemic. In addition, the
Company's U.A.E. business benefitted from the introduction of a new product line
subsequent to the third quarter of 2020.



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Gross profit:



Gross profit increased to $22.9 million, or 23% of net sales, in the current
year-to-date from $8.8 million, or 14% of net sales, in the prior year
year-to-date. This increase was driven by higher sales volumes and project and
product mix.

General and administrative expenses:

General and administrative expenses were $14.6 million in the current year-to-date, an increase of $1.3 million, or 10%, from $13.3 million in the prior year year-to-date. This increase was driven by an increase in personnel-related expenses corresponding to the increased business activity during the period.





Selling expenses:

Selling expenses decreased to $3.4 million in the current year-to-date, compared to $4.2 million in the prior year year-to-date due to organizational changes.





Interest expense, net:



Net interest expense increased from $0.4 million in the prior year year-to-date
to $0.7 million in the current year-to-date. This increase is primarily related
to the sale leaseback transaction for our operating facility in Tennessee
entered into in April 2021.



Other income, net:



Other income, net decreased to $1.0 million in the current year-to-date,
compared to $3.7 million in the prior year year-to-date. This decrease was
primarily the result of income recorded in the prior year for funds received
under the PPP program of $3.2 million. Funds received under the CEWS and
CERS programs in Canada during the current year were also less than in the prior
year. These decreases were offset by individually immaterial increases in our
North American businesses.

Income/(loss) from operations before income taxes:





Income/(loss) from operations before income taxes increased by $10.5 million to
an income of $5.1 million in the current year-to-date from a loss of
($5.4 million) in the prior year year-to-date. The increase was a result of
increased sales volumes in both North America and MENA due to recovery from the
effects of the COVID-19 pandemic. In addition, the Company's U.A.E. business
benefitted from the introduction of a new product line subsequent to the third
quarter of 2020.

Income tax expense/(benefit):





The Company's worldwide ETR's were 40.0% and 6.2% in the current year-to-date
and the prior year year-to-date, respectively. The change in the ETR from the
prior year to the current year was largely due to changes in the mix of income
and loss in various jurisdictions and the absence of recognizing tax benefits on
losses in the United States due to a full valuation allowance applied against
its deferred tax assets.



Net income/(loss):



The resulting net income of $3.1 million in the current year-to-date was an
improvement of approximately $8.2 million over the net loss of ($5.1 million) in
the prior year year-to-date. The increase was a result of increased sales
volumes in both North America and MENA due to recovery from the effects of
the COVID-19 pandemic. In addition, the Company's U.A.E. business benefitted
from the introduction of a new product line.

Liquidity and capital resources





Cash and cash equivalents as of October 31, 2021 were $10.0 million compared to
$7.2 million on January 31, 2021. On October 31, 2021, $2.6 million was held in
the U.S., and $7.4 million was held at the Company's foreign subsidiaries. The
Company's working capital was $38.2 million on October 31, 2021 compared to
$25.6 million on January 31, 2021. Of the working capital components, accounts
receivable increased by $12.8 million and cash and cash equivalents increased by
$2.8 million as the result of the movements discussed below. As of October 31,
2021, the Company had $5.9 million of borrowing capacity under its Senior Credit
Facility in North America and $9.4 million of borrowing capacity under its
foreign revolving credit agreements. The Company had no borrowings under
its Senior Credit Facility and $4.1 million borrowed under its foreign revolving
credit agreements at October 31, 2021.



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Net cash used in operating activities in the nine months ended October 31, 2021
was less than $0.1 million, as compared to net cash provided by operating
activities of $2.0 million in the prior year period. This decrease in cash from
operations was due primarily to increases in net working capital requirements in
the current period compared to the prior year period due to increased activity
as a result of post-COVID-19 economic recovery. The largest component of this
increase was an increase in accounts receivable resulting in cash used of
$13.5 million, partially offset by increases in net income and accounts payable
of $3.1 million and $5.9 million, respectively. All of these changes were the
result of the increase in business activity during the period.



Net cash used in investing activities in the nine months ended October 31, 2021
and in the prior year period was $1.9 million and $1.6 million, respectively.
This increase was due primarily to capital expenditures of the Company's
subsidiary in the U.A.E. during the period.



Net cash provided by financing activities in the nine months ended
October 31, 2021 was $5.3 million, as compared to net cash used in financing
activities of $7.2 million in the prior year period. The main source of cash
from financing activities during the period was net proceeds of $8.6 million as
a result of the sale and leaseback of the Company's land and buildings in
Lebanon, Tennessee during the period. This increase was also impacted by
increased net proceeds from borrowings of approximately $1.9 million under the
Senior Credit Facility, as compared to the prior year period, where net
repayments were approximately $6.4 million. Debt totaled $10.2 million and $13.2
million as of October 31, 2021 and January 31, 2021, respectively. For
additional information, see Note 9 - Debt, in the Notes to Consolidated
Financial Statements.



Treasury stock. On October 4, 2021, the Company's Board of Directors approved a
share repurchase program, which authorizes the Company to use up
to $3.0 million for the purchase of its outstanding shares of common stock.
Share repurchases are permitted to be executed through open market or privately
negotiated transactions over the course of 12 months, depending upon current
market conditions and other factors.

Revolving line - North America. On September 20, 2018, the Company and certain
of its U.S. and Canadian subsidiaries (collectively, together with the Company,
the "North American Loan Parties") entered into a Revolving Credit and Security
Agreement (the "Credit Agreement") with PNC Bank, National Association ("PNC"),
as administrative agent and lender, providing for a three-year $18.0 million
Senior Secured Revolving Credit Facility, subject to a borrowing base including
various reserves (the "Senior Credit Facility").

The Company used proceeds from the Senior Credit Facility for on-going working
capital needs and to fund capital expenditures, working capital needs and other
corporate purposes. Borrowings under the Senior Credit Facility bore interest at
a rate equal to an alternate base rate or London Interbank Offered Rate
("LIBOR"), plus, in each case, an applicable margin. The applicable margin was
based on average quarterly undrawn availability with respect to the Senior
Credit Facility. Additionally, the Company was required to pay a 0.375% per
annum facility fee on the unused portion of the Senior Credit Facility.

As of October 31, 2020, the Company and its subsidiaries failed to achieve the
necessary fixed charge coverage ratio ("FCCR") of 1.10 to 1.00 for the trailing
four-quarters ended October 31, 2020 under its Credit Agreement for both the
North American Loan Parties and the Company and its subsidiaries. On December
18, 2020, the Company entered into the First Amendment and Waiver to the
Revolving Credit and Security Agreement ("Amendment and Waiver") with PNC, which
(i) reflected PNC's waiver of the Company's failure to maintain an FCCR of 1.10
to 1.00 as of October 31, 2020 on a trailing four quarter basis as required
under the Company's Credit Agreement and (ii) further amended certain future
fixed charge coverage ratio covenants requirements under the Credit Agreement.
Additionally, the Company was also required to have received, and applied to
reduce the outstanding balance under the Credit Agreement, $1.0 million from one
of its foreign subsidiaries, Perma-Pipe Middle East FZC, in the U.A.E. The
transfer and repayment occurred on December 17, 2020 and did not cause the
Company to incur any additional fees or taxes, nor did it force the Company to
change any of its assertions with regards to permanent reinvestment in any of
its foreign subsidiaries. The Company incurred additional fees over the
remainder of the Amendment and Waiver of approximately $0.1 million. The
Amendment and Waiver also eliminated the Company's ability to make LIBOR
borrowings and reduced the overall availability by $2.0 million until maturity.

On September 17, 2021, the North American Loan Parties executed an extension of
the Credit Agreement with PNC, providing for a new five-year $18.0 million
senior secured revolving credit facility, subject to a borrowing base including
various reserves (the "Renewed Senior Credit Facility"). The
Company's obligations under the Renewed Senior Credit Facility are currently
guaranteed by Perma-Pipe Canada, Inc. Each of the North American Loan Parties
other than Perma-Pipe Canada, Inc. is a borrower under the Renewed Senior Credit
Facility (collectively, the "Borrowers").

The Borrowers will use borrowings under the Renewed Senior Credit Facility
(i) to fund future capital expenditures; (ii) to fund on-going working capital
needs; and (iii) for other corporate purposes, including potentially additional
share repurchases. Borrowings under the Renewed Senior Credit Facility bears
interest at a rate equal to an alternate base rate, the London Inter-Bank
Offered Rate ("LIBOR") or a LIBOR successor rate index, plus, in each case, an
applicable margin. The applicable margin will be based on an FCCR range.
Interest on alternate base rate borrowings will be the alternate base rate as
defined in the Renewed Senior Credit Facility plus an applicable margin ranging
from 1.00% to 1.50%, based on the FCCR in the most recently reported period.
Interest on LIBOR or LIBOR successor rate borrowings will be the LIBOR rate as
defined in the Renewed Senior Credit Facility plus an applicable margin ranging
from 2.00% to 2.50%, based on the FCCR in the most recently reported
period. Additionally, the Borrowers will pay a 0.25% per annum facility fee on
the unused portion of the Renewed Senior Credit Facility.

Subject to certain exceptions, borrowings under the Renewed Senior Credit
Facility will be secured by substantially all of the North American Loan
Parties' assets. The Renewed Senior Credit Facility will mature on September 20,
2026. Subject to certain qualifications and exceptions, the Renewed Senior
Credit Facility contains covenants that, among other things, restrict the North
American Loan Parties' ability to create liens, merge or consolidate, consummate
acquisitions, make investments, dispose of assets, incur debt, and pay dividends
and other distributions. In addition, the North American Loan Parties may not
make capital expenditures in excess of $5.0 million annually, plus a limited
carryover of unused amounts.

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The Renewed Senior Credit Facility also contains financial covenants
requiring the North American Loan Parties to achieve a ratio of its EBITDA to
the sum of scheduled cash principal payments on indebtedness for borrowed money
and interest payments on the advances under the Renewed Senior Credit
Facility to be not less than 1.10 to 1.00 if for any five consecutive days the
undrawn availability is less than $3.0 million or any day in which the undrawn
availability is less than $2.0 million. If the covenant is triggered it will be
tested for the nine-month period ending October 31, 2021 and the twelve-month
period ending January 31, 2022 and thereafter on a trailing twelve-month basis.
As of the most recent reporting date, the calculated ratio was substantially
greater than 1.10 to 1.00. In order to cure any future breach of the fixed
charge coverage ratio covenant by the North American Loan Parties, the Company
may repatriate cash from any of its foreign subsidiaries that are otherwise not
a party to the Credit Agreement in an amount which, when added to the amount of
the Company's Consolidated EBITDA, would result in pro forma compliance with the
covenant. The Company was in compliance with these covenants as of October 31,
2021.

The Renewed Senior Credit Facility contains customary events of default. If an
event of default occurs and is continuing, then PNC may terminate all
commitments to extend further credit and declare all amounts outstanding under
the Renewed Senior Credit Facility due and payable immediately. In addition, if
any of the North American Loan Parties or certain of their subsidiaries become
the subject of voluntary or involuntary proceedings under any bankruptcy,
insolvency or similar law, then any outstanding obligations under the Renewed
Senior Credit Facility will automatically become immediately due and payable.
Loans outstanding under the Renewed Senior Credit Facility will bear interest at
a rate of 2.00% per annum in excess of the otherwise applicable rate (i) while a
bankruptcy event of default exists or (ii) upon the lender's request, during the
continuance of any other event of default.

As of October 31, 2021, the Company had no borrowings and had $5.9 million
available under the Renewed Senior Credit Facility, before application of a $3.0
million availability block that can be reduced by the Company's financial
performance. As of January 31, 2021, the Company had borrowed an aggregate of
$2.8 million and had $1.7 million available under the Senior Credit Facility.

Revolving lines - foreign. The Company also has credit arrangements used by its Middle Eastern subsidiaries in the U.A.E. and Egypt as discussed further below.





The Company has a revolving line for 8.0 million U.A.E. Dirhams (approximately
$2.2 million at October 31, 2021) from a bank in the U.A.E. The facility has an
interest rate of approximately 3.46% and was originally set to
expire in November 2020, however, the expiration was extended due to
the COVID-19 pandemic and inability to finalize renewal documentation prior to
that time. The Company has submitted final documentation to complete the renewal
process, and is awaiting official notification from the bank of the renewal
completion. This process is expected to be completed in December 2021.

The Company has a second revolving line for 19.5 million U.A.E. Dirhams (approximately $5.3 million at October 31, 2021) from a bank in the U.A.E. The facility has an interest rate of approximately 4.5% and is set to expire in January 2022.

The Company has a third revolving line for 3.0 million U.A.E. Dirhams (approximately $0.8 million at October 31, 2021) from a bank in the U.A.E. The facility has an interest rate of approximately 4.5% and is set to expire in January 2022.





These credit arrangements are in the form of overdraft facilities and project
financing at rates competitive in the countries in which the Company operates.
The lines are secured by certain equipment, certain assets (such as accounts
receivable and inventory), and a guarantee by the Company. Some credit
arrangement covenants require a minimum tangible net worth to be maintained,
including maintaining certain levels of intercompany subordinated debt. In
addition, some of the revolving credit facilities restrict payment of dividends
or undertaking of additional debt.



In June 2021, 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 $6.4 million at October 31, 2021). This credit arrangement
is in the form of project financing at rates competitive in Egypt. The line was
secured by certain assets (such as accounts receivable) of the Company's
Egyptian subsidiary. 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. The facility has an
interest rate of approximately 10.8% and is set to expire in August 2022.



In January 2021, the Company entered into a credit arrangement for project
financing with a bank in Egypt for 46.2 million Egyptian Pounds (approximately
$2.9 million at October 31, 2021). 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 8.0% and is expected to expire in
December 2021 in connection with the completion of the project.



The Company's credit arrangements used by its Middle Eastern subsidiaries renew
on an annual basis. The Company guarantees the subsidiaries' debt including all
foreign debt.



The Company was in compliance with the covenants under the credit arrangements
in the U.A.E. and Egypt as of October 31, 2021. On October 31, 2021, interest
rates were based on 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, and based on the stated interest rate in the agreement
for the Egypt credit arrangement. Based on these base rates, as of October 31,
2021, the Company's interest rates ranged from 3.46% to 10.8%, with a weighted
average rate of 6.51%, and the Company had facility limits totaling
$17.6 million under these credit arrangements. As of October 31,
2021, $2.9 million of availability was used to support letters of credit to
guarantee amounts committed for inventory purchases and for performance
guarantees. Additionally, as of October 31, 2021, the Company had borrowed
$4.1 million, and had an additional $9.4 million of borrowing remaining
available under the foreign revolving credit arrangements. The foreign revolving
lines balances as of October 31, 2021 and January 31, 2021, were included as
current maturities of long-term debt in the Company's consolidated balance
sheets.



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Prior additional liquidity from the PPP



On May 1, 2020, the Company entered into a loan agreement under the PPP and
received proceeds of approximately $3.2 million. Interest on the loan accrued at
a fixed interest rate of 1.0%. Under Section 1106 of the CARES Act, borrowers
are eligible for forgiveness of principal and accrued interest on the loans to
the extent that the proceeds are used to cover eligible payroll costs, mortgage
interest costs, rent and utility costs, otherwise described as qualified
expenses. During the three months ended July 31, 2020, the Company used all of
the PPP loan proceeds to pay for qualified expenses, 100% of which were used for
payroll related expenses.  The Company submitted its application and supporting
documentation for forgiveness to its bank, which submitted the application and
supporting documents to the Small Business Administration ("SBA").



Based on the facts and circumstances of the Company's PPP loan and according to
the applicable accounting guidance described herein, the Company has elected
to account for the PPP loan proceeds as a grant that has reasonable assurance of
being forgiven. As such, the Company recognized the proceeds in earnings during
the year ended January 31, 2021. The amounts were recognized in other income in
the consolidated statements of operations. On June 24, 2021, the Company was
notified by its lender that its PPP loan had been forgiven by the SBA.

Prior additional liquidity from the CEWS Program



Beginning in April 2020, the Company's subsidiary, PPCA, applied for relief in
the form of grants from the Canadian government under the CEWS program. Based on
the program rules, the grants are applied for each month and are granted based
on the amount of eligible employee expenses incurred over the previous month.
Beginning in October 2020, PPCA also applied for grants under the CERS program.
PPCA was approved for and received approximately $0.6 million and $0.1
million in grants under the CEWS and CERS programs, respectively, during the
six months ended July 31, 2021. Grants to the Company under both programs ended
in the second quarter of 2021. The proceeds from CEWS and CERS were recognized
in other income in the consolidated statements of operations.

Accounts receivable:



In 2013, the Company started a project in the Middle East as a sub-contractor,
with billings in the aggregate amount of approximately $41.9 million. The
Company completed all of its deliverables in 2015 under the related contract,
but the system has not yet been commissioned by the customer. Nevertheless, the
Company has since then collected approximately $38.2 million as of October 31,
2021, with a remaining balance due in the amount of $3.7 million. Included in
this balance is an amount of $3.4 million, which pertains to retention clauses
within the agreements of the Company's customer (contractor), and which become
payable by the customer when this project is fully tested and commissioned. In
the absence of a firm date for the final commissioning of the project, and due
to the long-term nature of this receivable, $2.1 million of this retention
amount was reclassified to a long-term receivable account.



The Company has been engaged in ongoing active efforts to collect the
outstanding amount. During the first quarter of 2021, the Company received
approximately $0.1 million from the customer and additional receipts are
expected throughout the rest of 2021. The Company continues to engage with the
customer to ensure full payment of open balances, and during August 2021
received an updated acknowledgment of the outstanding balances and assurances of
payment from the customer. As a result, the Company did not reserve any
allowance against this amount as of October 31, 2021. 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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES





Critical accounting policies are described in Item 7. MD&A and in the Notes to
the Consolidated Financial Statements for the year ended January 31, 2021
contained in the Company's latest Annual Report on Form 10-K. Any new accounting
policies or updates to existing accounting policies as a result of new
accounting pronouncements have been discussed in the Notes to Consolidated
Financial Statements in this Quarterly Report on Form 10-Q. The application of
critical accounting policies may require management to make assumptions,
judgments and estimates about the amounts reflected in the Consolidated
Financial Statements. Management uses historical experience and all available
information to make these estimates and judgments, and different amounts could
be reported using different assumptions and estimates.



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