Note 8 - Leases

12 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Leases Disclosure [Text Block]

8. Leases

As Lessee

The Company has elected not to record operating right-of-use assets or operating lease liabilities on its consolidated balance sheet for leases having a minimum term of 12 months or less. Such leases are expensed on a straight-line basis over the lease term. Variable lease payments are excluded from the measurement of operating right-of-use assets and operating liabilities and recognized in the period in which the obligation for those payments is incurred. As of September 30, 2023, the Company has two operating right-of use assets related to leased facilities in Austin, Texas and Melbourne, Florida.

Maturities of the operating lease liabilities as of September 30, 2023 were as follows (in thousands):

For fiscal years ending September 30,
2024		278
2025		186
2026		130
2027		134
2028		91
Future minimum lease payments	$	819
Less interest		(50	)
Present value of minimum lease payments	$	769
Less current portion		(257	)
Long-term portion	$	512

Lease costs recognized in the consolidated statements of operations for the fiscal years ended  September 30, 2023 and 2022 is as follows (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2023		2022
Right-of-use operating lease costs	$	272	$	272
Short-term lease costs		220		190
Total	$	492	$	462

Right-of-use operating lease costs and short-term lease costs are included as a component of total operating expenses.

Other information related to operating leases is as follows (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	270		$	262
Weighted average remaining lease term	3.9 years			4.7 years
Weighted average discount rate		3.25	%		3.25	%

The discount rate used on the operating right-of-use assets represented the Company’s incremental borrowing rate at lease inception.

As Lessor

Equipment

The Company leases equipment to customers which generally range from daily rentals to minimum rental periods of up to one year. All of the Company's current leasing arrangements, with the Company acting as lessor, are classified as operating leases. The majority of the Company’s rental revenue is generated from its marine-based wireless seismic data acquisition system.

The Company regularly evaluates the collectability of its lease receivables on a lease-by-lease basis. The evaluation primarily consists of reviewing past due account balances and other factors such as the credit quality of the customer, historical trends of the customer and current economic conditions. The Company suspends revenue recognition when the collectability of amounts due are no longer probable and concurrently records a direct write-off of the lease receivable to rental revenue to limit rental revenue recognized to the cash collections received. As of September 30, 2023, the Company’s trade accounts receivables included lease receivables of $9.0 million.

Rental revenue related to leased equipment for fiscal years 2023 and 2022 was $51.0 million and $24.9 million, respectively.

Future minimum lease obligations due from the Company's leasing customers as of September 30, 2023 were $29.6 million, the majority of which is due within the next 12 months.

Rental equipment consisted of the following (in thousands):

	AS OF SEPTEMBER 30,
	2023			2022
Rental equipment, primarily wireless recording equipment	$	82,926		$	83,153
Accumulated depreciation and impairment		(61,339	)		(54,954	)
	$	21,587		$	28,199

Rental equipment depreciation expense was $11.8 million and $13.7 million in fiscal years 2023 and 2022, respectively.

Property

During the first quarter of fiscal year 2022, the Company leased a portion of its property located in Calgary, Alberta, Canada and fully leased its warehouse in Bogotá, Colombia. The lease in Canada commenced in November 2021 and is for a five-year term. The lease on the warehouse in Bogotá commenced in December 2021 and is currently on a month-to-month basis.

Rental revenue related to these two properties was $0.2 million for each of fiscal years 2023 and 2022.

Future minimum lease payments due to the Company as of September 30, 2023 were as follows (in thousands):

For fiscal years ending September 30,
2024		128
2025		131
2026		132
2027		11
	$	402