XML 22 R11.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Note 4 - Fair Value Measurement and Fair Value of Financial Instruments | 3 Months Ended
--- | ---
Dec. 31, 2023
Notes to Financial Statements |
Fair Value Disclosures [Text Block] | 4. Fair Value Measurement and Fair Value of Financial Instruments The Company’s financial instruments consist principally of accounts receivable, accounts payable, warrant liabilities, contingent consideration and long-term debt arrangements. The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, under U.S. GAAP, companies are required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows: Level 1—Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly. Level 3—Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date. The carrying value of the Company’s accounts receivable and accounts payable approximates fair value due to their short-term nature. As of December 31, 2023 and September 30, 2023, the aggregate fair values of long-term debts were $0.6 million and $0.6 million, respectively, with an aggregate carrying value of $0.6 million and $0.7 million, respectively. The fair value is based on interest rates that are currently available to the Company for issuance of debt with similar terms and remaining maturities. If measured at fair value in the financial statements, the debt would be classified as Level 2 in the fair value hierarchy. The Company’s warrant liabilities are measured at fair value at each reporting period with changes in fair value recognized in earnings during the period. The fair value of the Company’s warrant liabilities are valued utilizing Level 3 inputs. Warrant liabilities are valued using a Monte Carlo option-pricing model, which takes into consideration the volatilities of comparable public companies, due to the relatively low trading volume of the Company’s common stock. The Monte Carlo option-pricing model uses certain assumptions, including expected life and annual volatility. The range and weighted average volatilities of comparable public companies utilized was 22.3% - 81.9% and 41.9%, respectively, as of December 31, 2023, and 27.7% - 84.5% and 45.5%, respectively, as of September 30, 2023. The volatility utilized in the Monte Carlo option-pricing model was determined by weighing 60% to the Company-specific volatility and 40% on comparable public companies. The significant inputs and assumptions utilized were as follows:
|  | As of December 31, 2023 |  |  | As of September 30, 2023 |
|  | Montage Capital |  |  | Series C Preferred |  |  | Series D Preferred |  |  | Montage Capital |  |  | Series C Preferred |  |  | Series D Preferred |
Volatility |  |  | 56.8 | % |  |  | 49.3 | % |  |  | 72.1 | % |  |  | 60.7 | % |  |  | 51.7 | % |  |  | 73.6 | %
Risk-free rate |  |  | 4.4 | % |  |  | 5.1 | % |  |  | 4.0 | % |  |  | 5.0 | % |  |  | 5.5 | % |  |  | 4.8 | %
Stock price |  | $ | 0.87 |  |  | $ | 0.87 |  |  | $ | 0.87 |  |  | $ | 0.83 |  |  | $ | 0.83 |  |  | $ | 0.83 |
The Company recognized a gain of $18 thousand and $0.3 million for the three months ended December 31, 2023 and 2022, respectively, related to the change in fair value of warrant liabilities. The changes in fair value of warrant liabilities were due to changes in inputs, primarily a change in the stock price, to the Monte Carlo option-pricing model. The Company reviews and re-assesses the estimated fair value of contingent consideration liabilities at each reporting period and the updated fair value could differ materially from the initial estimates. The Company measures contingent consideration recognized in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified as Level 3 inputs. The Company uses a simulation-based model to estimate the fair value of contingent consideration on the acquisition date and at each reporting period. The simulation model uses certain inputs and assumptions, including revenue projections, an estimate of revenue discount and volatility rate based on comparable public companies’ data, and risk-free rate. Significant increases or decreases to either of these inputs in isolation could result in a significantly higher or lower liability with a higher liability limited to the contractual maximum of the contingent consideration liabilities. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate on the acquisition date and each reporting period and the amount paid will be recognized in earnings. Assets and liabilities of the Company measured at fair value on a recurring basis as of December 31, 2023 and September 30, 2023, are as follows:
|  | As of December 31, 2023 |  |  |  |  |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Warrant liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Montage |  | $ | - |  |  | $ | - |  |  | $ | 12 |  |  | $ | 12 |
Series A and C |  |  | - |  |  |  | - |  |  |  | 11 |  |  |  | 11 |
Series D |  |  | - |  |  |  | - |  |  |  | 133 |  |  |  | 133 |
Total warrant liabilities |  | $ | - |  |  | $ | - |  |  | $ | 156 |  |  | $ | 156 |
|  | As of September 30, 2023 |  |  |  |  |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill, net |  | $ | - |  |  | $ | - |  |  | $ | 8,468 |  |  | $ | 8,468 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Warrant liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Montage |  |  | - |  |  |  | - |  |  |  | 12 |  |  |  | 12 |
Series A and C |  |  | - |  |  |  | - |  |  |  | 11 |  |  |  | 11 |
Series D |  |  | - |  |  |  | - |  |  |  | 151 |  |  |  | 151 |
Total warrant liabilities |  | $ | - |  |  | $ | - |  |  | $ | 174 |  |  | $ | 174 |
The following table provides a rollforward of the fair value, as determined by Level 3 inputs, as follows:
|  | Warrant Liabilities |
Balance at beginning of period, October 1, 2023 |  | $ | 174 |
Additions |  |  | - |
Payments or exercises |  |  | - |
Adjustment to fair value |  |  | (18 | )
Balance at end of period, December 31, 2023 |  | $ | 156 |

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration