v3.26.1
Note 3 - Fair Value of Financial Instruments
9 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

3. Fair Value of Financial Instruments

 

The Company’s financial instruments generally include cash and cash equivalents, short-term investments, trade accounts and financing receivables and accounts payable. Due to the short-term maturities of cash and cash equivalents, trade accounts receivable and accounts payable, the carrying amounts of these financial instruments are deemed to approximate their fair value on the respective balance sheet dates.  The Company measures its contingent consideration at fair value on a recurring basis.

 

The following tables present the fair value of the Company’s recurring contingent consideration (in thousands):

 

  

As of June 30, 2026

 
  

(Level 1)

  

(Level 2)

  

(Level 3)

  

Totals

 

Contingent consideration liabilities:

                

Current portion

 $  $  $(1,788) $(1,788)

Non-current portion

        (962)  (962)
  $  $  $(2,750) $(2,750)

  

  

As of September 30, 2025

 
  

(Level 1)

  

(Level 2)

  

(Level 3)

  

Totals

 

Recurring:

                

Non-current contingent consideration

 $  $  $(2,540) $(2,540)

     

 

In connection with the Company's acquisition of Geovox in August 2025, it recorded an initial contingent earn-out liability of $2.5 million.  The Company engaged the services of a valuation firm to measure the fair value of the liability.  The primary inputs included revenue forecast, risk free rate, revenue volatility, revenue discount rate and payment discount rate (Level 3). Contingent payments, if any, will be based on eligible revenue generated during a four-year earn-out period.  The maximum amount of contingent payments is $3.3 million. The following table summarizes the changes in the fair value of the contingent consideration during the nine months ended June 30, 2026:

 

Balance at October 1, 2024

 $ 

Acquisition of Geovox

  2,540 

Balance at September 30, 2025

  2,540 

Fair value adjustments

  210 

Balance at June 30, 2026

  2,750 

Less current portion

  (1,788)

Non-current balance at June 30, 2026

 $962