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Note 5 - Fair Value Measurements
 12 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
Fair Value Disclosures [Text Block]
5.
FAIR VALUE MEASUREMENTS
 
 
The Company's financial instruments consist principally of cash equivalents, short and long-term marketable securities, accounts receivable, foreign currency forward contract and accounts payable. The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. Assets and liabilities measured at fair value are categorized based on whether or
not
the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into
three
levels (with Level
3
being the lowest) defined as follows:
 
 
Level
1:
Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date.
 
 
Level
2:
Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are
not
active near the measurement date.
 
 
Level
3:
Inputs include management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument's valuation.
 
The fair value of the majority of the Company's cash equivalents and marketable securities was determined based on “Level
1”
inputs. The fair value of certain marketable securities, long-term debt, hedge fund investments, and derivative contracts were determined based on “Level
2”
inputs. The valuation techniques used to measure the fair value of the “Level
2”
instruments were valued based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data. The Company does
not
have any financial instruments measured at fair value on a recurring basis in the “Level
3”
category.
 
There have been
no
changes in Level
1,
Level
2,
and Level
3
and
no
changes in valuation techniques for financial instruments measured at fair value on a recurring basis for the years ended
September 30, 2020
and
2019.
 
Instruments Measured at Fair Value
on a Recurring Basis
 
Cash equivalents and marketable securities
: The following tables present the Company's cash equivalents and marketable securities' costs, gross unrealized gains and losses, and fair value by major security type recorded as cash equivalents or short-term or long-term marketable securities as of
September 30, 2020
and
2019.
Unrealized gains and losses from the remeasurement of marketable securities are recorded in accumulated other comprehensive income (loss) until recognized in earnings upon the sale or maturity of the security.
 
   
September 30, 2020
  
   
Cost Basis
    
Unrealized
Gain
    
Fair Value
    
Cash
Equivalents
    
Short-term
Securities
    
Long-term
Securities
  
Level 1:
                                                
Money Market Funds
   $
365
     $
-
     $
365
     $
365
     $
-
     $
-
  
                                                 
Level 2:
                                                
Certificates of deposit
    
1,195
      
-
      
1,195
      
-
      
-
      
1,195
  
Municipal securities
    
3,777
      
4
      
3,781
      
-
      
2,432
      
1,350
  
Corporate bonds
    
3,091
      
3
      
3,094
      
-
      
1,833
      
1,260
  
Subtotal
    
8,063
      
7
      
8,070
      
-
      
4,265
      
3,805
  
                                                 
Total
   $
8,428
     $
7
     $
8,435
     $
365
     $
4,265
     $
3,805
  
 
 
   
September 30, 2019
  
   
Cost Basis
    
Unrealized
Gain
    
Fair Value
    
Cash
Equivalents
    
Short-term
Securities
    
Long-term
Securities
  
Level 1:
                                                
Money Market Funds
   $
276
     $
-
     $
276
     $
276
     $
-
     $
-
  
                                                 
Level 2:
                                                
Certificates of deposit
    
972
      
-
      
972
      
-
      
499
      
473
  
Municipal securities
    
240
      
-
      
240
      
-
      
80
      
160
  
Corporate bonds
    
3,857
      
11
      
3,868
      
-
      
3,116
      
752
  
Subtotal
    
5,069
      
11
      
5,080
      
-
      
3,695
      
1,385
  
                                                 
Total
   $
5,345
     $
11
     $
5,356
     $
276
     $
3,695
     $
1,385
  
 
Foreign currency forward contract
: In
August 2020,
the Company entered into a foreign currency forward contract as an economic hedge against exposure to changes in the Canadian dollar in connection with the acquisition of Amika Mobile Corporation (“Amika Mobile”). The notional value of the foreign currency forward contract was
CAD$6,955
with a maturity date in
October 2020.
The foreign currency forward contract is classified under Level
2
of the fair value hierarchy. The valuation techniques used to measure the fair value were based on quoted market prices. The foreign currency forward contract asset is recorded in prepaid expenses and the related liability is recorded in accrued liabilities in the Consolidated Balance Sheet as of
September 30, 2020.
Unrealized gains or losses from the remeasurement of the foreign currency forward contract are recorded in earnings in other income (expense) as this was
not
designated as a cash flow hedge. On
October 1, 2020,
the foreign currency forward contract was settled for
CAD$6,955
(
$5,281
), resulting in a realized loss of
$48
thousand on the contract. There were
no
forward contracts during the year ended
September 30, 2019.
The following table summarizes the foreign currency forward contract asset and liability as of
September 30, 2020:
 
Derivatives not designated as hedging instruments
  
Asset
position
    
Unrealized
loss
    
Liability
Position
  
Foreign currency forward contract
   $
5,205
     $
(76
 )   $
5,281