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Note 11 - Accrued and Other Liabilities

3 Months Ended

Dec. 31, 2023

Current and Noncurrent Accrued Liabilities [Text Block]

11. ACCRUED AND OTHER LIABILITIES

Accrued liabilities consisted of the following:

	December 31,		September 30,
	2023		2023
Payroll and related	$	2,104	$	2,237
Deferred revenue		2,991		2,703
Customer deposits		1,222		766
Accrued contract costs		897		825
Warranty reserve		110		132
Asset purchase holdback liability		-		736
Acquisition holdback liability		235		-
Acquisition contingent consideration liability		936		-
Other		123		67
Total	$	8,618	$	7,466

Other liabilities-noncurrent consisted of the following:

December 31,

September 30,

2023

Deferred revenue

509

551

Payroll and related

Payroll and related consisted primarily of accrued vacation, bonus, sales commissions and benefits.

Deferred revenue

Deferred revenue as of December 31, 2023, included prepayments from customers for services, including extended warranty, scheduled to be performed in the twelve months ending December 31, 2024.

Customer deposits

Customer deposits represent amounts paid by customers as a down payment on hardware orders to be delivered in the twelve months ending December 31, 2024.

Accrued contract costs

Accrued contract costs consisted of accrued expenses for contracting a third-party service provider to fulfill repair and maintenance obligations required under a contract with a foreign military for units sold in the year ended September 30, 2011. Payments to the service provider will be made annually upon completion of each year of service. A new contract was signed with the customer in May 2019 to continue repair and maintenance services through May 2024. These services are being recorded in cost of revenues to correspond with the revenues for these services.

Warranty reserve

Changes in the warranty reserve and extended warranty were as follows:

	December 31,			September 30,
	2023			2023
Beginning balance	$	132		$	159
Warranty provision		(22	)		40
Warranty settlements		-			(67	)
Ending balance	$	110		$	132

The Company establishes a warranty reserve based on anticipated warranty claims at the time product revenue is recognized. Factors affecting warranty reserve levels include the number of units sold, anticipated cost of warranty repairs and anticipated rates of warranty claims. The Company evaluates the adequacy of the provision for warranty costs each reporting period and adjusts the accrued warranty liability to an amount equal to estimated warranty expense for products currently under warranty.

Asset purchase holdback liability

In connection with the Amika Mobile asset purchase, the Company recorded a holdback liability related to potential future adjustments to assets and liabilities, misrepresentations and indemnifications against third-party claims. The holdback liability was paid to the seller of the Amika Mobile assets on October 6, 2023. The liability was recorded at fair value as of September 30, 2023.

Acquisition holdback liability

In connection with the Evertel acquisition, the Company recorded a holdback liability related to potential misrepresentations and indemnifications against third-party claims. The holdback liability will be released twelve months from the closing date, subject to amounts withheld for actual, pending or potential claims. The holdback liability was recorded at the present value which was the fair value at the acquisition date. Accretion is recorded in each subsequent reporting period based on the discount factor used to arrive at the original fait value. This change in fair value is recorded in the accompanying condensed consolidated statement of operations.

Contingent consideration liability

In connection with the Evertel acquisition, the Company recorded a liability related to future performance criteria, The contingent consideration liability was recorded at the fair value at the acquisition date. The liability has and will be adjusted at each reporting period as progress towards the contingent consideration criteria is achieved.

Deferred extended warranty revenue

Deferred extended warranty revenue consisted of warranties purchased in excess of the Company’s standard warranty. Extended warranties typically range from one to two years.