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Investment in Debt Security
12 Months Ended
Sep. 30, 2020
Investments Debt And Equity Securities [Abstract]  
Investment in Debt Security

4.  Investment in Debt Security         

     

On July 13, 2020, the Company received an interest in a senior secured bond issued from an international seismic marine customer.  The Company’s interest in the bond, which has a face value of $13.0 million, was received in exchange for $13.0 million of unpaid invoices and later fees owed by the customer.   The bond is secured by a third in line lien on the assets owned by the customer and has an 8% interest rate with bi-annual interest and possible principal payments based on available excess cash flows.  Interest payments can be made either in cash or in-kind payments in the form of additional debt security.  In-kind interest payments require an 8.8% interest rate.  The bond matures July 13, 2022.  The bond is listed on the Oslo Alternative Bond Market; however, the actual marketability is unknown at this time.

 

As of September 30, 2020, the Company performed a fair value assessment of the investment to determine the bond’s initial carrying amount.  In accordance with ASC 825, “Fair Value Instruments”, the Company has determined that the investment is a Level 3 primarily due to its current unknown marketability.  Because of the distressed financial condition of the customer, the Company believes the fair value of the bond is nominal. The Company has classified the investment as a held-to-maturity security.