NOTE 4—ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

The Company has historically experienced immaterial write-offs given the nature of the customers that receive credit. As of September 30, 2026, the Company had gross receivables of $1,315,000 and an allowance for credit losses of $195,000, including $185,000 related to receivables acquired in the Gen-Tracker Acquisition.

 SCHEDULE OF ACCOUNTS RECEIVABLE 

In connection with the Gen-Tracker Acquisition, the Company acquired trade accounts receivable with a contractual value of $370,000, a significant portion of which had been outstanding for one year or more as of the Acquisition Date. Because these receivables had experienced a more-than-insignificant deterioration in credit quality since origination, the Company accounted for them as purchased financial assets with credit deterioration. At the Acquisition Date, the Company recorded gross receivables of $370,000 and an allowance for credit losses of $185,000, which was netted against the gross receivable amount in the purchase price allocation rather than recognized as credit loss expense. There was no non-credit discount or premium.

The following is a tabular reconciliation of the Company’s allowance for credit losses:

 SCHEDULE OF ALLOWANCES FOR CREDIT LOSSES