Trade Accounts and Notes Receivable

3 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Trade Accounts and Notes Receivable

5.   Trade Accounts and Notes Receivable

Trade accounts receivable, net (excluding notes receivable) are reflected in the following table (in thousands):

	December 31, 2020			September 30, 2020
Trade accounts receivable	$	5,695		$	14,090
Allowance for doubtful accounts		(558	)		(496	)
Total	$	5,137		$	13,594

The allowance for doubtful accounts represents the Company’s best estimate of probable credit losses.  The Company determines the allowance based upon historical experience and a current review of its trade accounts receivable balances.  Trade accounts receivable balances are charged off against the allowance whenever it is probable that the receivable balance will not be recoverable.              

Notes receivable are reflected in the following table (in thousands):

	December 31, 2020			September 30, 2020
Notes receivable	$	13,373		$	184
Less current portion		(13,233	)		(184	)
Non-current notes receivable	$	140		$	—

Promissory notes receivable are generally collateralized by the products sold, and bear interest at rates ranging up to 8% per year.  The promissory notes receivable (including the unrecognized $10.0 million promissory note receivable disclosed below) mature at various times through January 2023.  The Company has, on occasion, extended or renewed notes receivable as they mature, but there is no obligation to do so.

During the second quarter of fiscal year 2020, the Company partially financed a $12.5 million product sale by entering into a $10.0 million secured promissory note with a customer.  The note has a three-year term and bears interest at 7% per year.   Principal and interest payments of $0.3 million are due monthly until maturity.  Due to the financial condition of the customer, the note receivable is not reflected on the Company’s consolidated balance sheet due to collectability concerns.  See Note 2 for more information on this matter.         

During the first quarter of fiscal year 2021, the Company entered into a $13.2 million short-term promissory note with a customer related to the sale of rental equipment and an outstanding receivable balance.   The note bears interest at 8% per annum and is due on or before March 31, 2021.  Principal payments due under the note of $6.0 million were received from the customer in January 2021.