Note 4 - Fair Value of Financial Instruments

9 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Fair Value Disclosures [Text Block]

4. Fair Value of Financial Instruments

The Company’s financial instruments generally include cash and cash equivalents, short-term investments, trade accounts and notes receivable and accounts payable. Due to the short-term maturities of cash and cash equivalents, trade accounts and notes 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 valuation technique used to measure the fair value of the contingent consideration was based on internal estimates and the use of internal projections of future revenue.

The Company measures its short-term investments and contingent consideration at fair value on a recurring basis.

The following tables present the fair value of the Company’s short-term investments and contingent consideration by valuation hierarchy and input (in thousands):

	As of September 30, 2022
	Quoted Prices in		Significant
	Active Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	(Level 1)		(Level 2)		(Level 3)		Totals
Short-term investments:
Corporate bonds	$	—	$	894	$	—	$	894
Total assets	$	—	$	894	$	—	$	894
Contingent consideration liabilities:	$	—	$	—	$	175	$	175
Total liabilities	$	—	$	—	$	175	$	175

The Company had no short-term investments or contingent consideration payable at June 30, 2023. 

The following table summarizes changes in the fair value of the Company’s Level 3 financial instruments for the nine months ended June 30, 2023 and 2022 (in thousands):

Contingent consideration balance at October 1, 2022	$	175
Fair value adjustments		—
Payment of contingent consideration		(175	)
Contingent consideration at June 30, 2023	$	—
Contingent consideration balance at October 1, 2021	$	6,017
Fair value adjustments		(5,042	)
Payment of contingent consideration		(807	)
Contingent consideration balance at June 30, 2022	$	168

Adjustments to the fair value of the contingent consideration were based on internal estimates and management assessments regarding potential future scenarios which involved significant judgment.