Note 6 - Fair Value Measurements

12 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Fair Value Disclosures [Text Block]

6. FAIR VALUE MEASUREMENTS

The Company’s financial instruments consist principally of cash equivalents, short and long-term marketable securities, accounts receivable, and accounts payable. The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:

Level 1: Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date.

Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are not active near the measurement date.

Level 3: Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.

The fair value of the Company’s cash equivalents and marketable securities were determined based on Level 1 and Level 2 inputs. The valuation techniques used to measure the fair value of the “Level 2” instruments were valued based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data. The Company believes that the recorded values of its other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. The Company did not have any marketable securities in the Level 3 category as of September 30, 2021 or September 30, 2020. There have been no changes in Level 1, Level 2, and Level 3 and no changes in valuation techniques for financial instruments measured at fair value on a recurring basis for the years ended September 30, 2021 and 2020.

Instruments Measured at Fair Value on a Recurring Basis

Cash equivalents and marketable securities: The following tables present the Company’s cash equivalents and marketable securities’ costs, gross unrealized gains and losses, and fair value by major security type recorded as cash equivalents or short-term or long-term marketable securities as of September 30, 2021 and 2020. Unrealized gains and losses from the remeasurement of marketable securities are recorded in accumulated other comprehensive income (loss) until recognized in earnings upon the sale or maturity of the security.

	September 30, 2021
	Cost Basis		Unrealized Gain (Loss)			Fair Value		Cash Equivalents		Short-term Securities		Long-term Securities
Level 1:
Money Market Funds	$	932	$	-		$	932	$	932	$	-	$	-
Level 2:
Certificates of deposit		1,494		-			1,494		-		694		800
Municipal securities		5,139		(1	)		5,138		-		4,205		933
Corporate bonds		928		1			929		-		787		142
Subtotal		7,561		-			7,561		-		5,686		1,875
Total	$	8,493	$	-		$	8,493	$	932	$	5,686	$	1,875

	September 30, 2020
	Cost Basis		Unrealized Gain		Fair Value		Cash Equivalents		Short-term Securities		Long-term Securities
Level 1:
Money Market Funds	$	365	$	-	$	365	$	365	$	-	$	-
Level 2:
Certificates of deposit		1,195		-		1,195		-		-		1,195
Municipal securities		3,777		4		3,781		-		2,431		1,350
Corporate bonds		3,091		3		3,094		-		1,834		1,260
Subtotal		8,063		7		8,070		-		4,265		3,805
Total	$	8,428	$	7	$	8,435	$	365	$	4,265	$	3,805

Instruments measured at Fair Value on a Non-Recurring Basis

Nonfinancial assets: Nonfinancial assets such as goodwill, other intangible assets, long-lived assets held and used, and right-of-use assets (“ROU assets”) are measured at fair value when there is an indicator of impairment and recorded at fair value only when impairment is recognized or for a business combination. 

Goodwill and intangible assets are recognized at fair value during the period in which an acquisition is completed, from updated estimates during the measurement period, or when they are considered to be impaired. These non-recurring fair value measurements, primarily for intangible assets acquired, were based on Level 3 inputs. The Company estimates the fair value of these long-lived assets on a non-recurring basis based on a market valuation approach, engaging independent valuation experts to assist in the determination of fair value.

The following table presents nonfinancial assets that were subject to fair value measurement during the twelve months ended September 30, 2021. There were no business combinations or indicators of impairment for the twelve months ended September 30, 2020. Certain intangible assets, operating lease ROU assets and goodwill are subject to foreign currency translation adjustments.

	Carrying Value		Level 1		Level 2		Level 3
Goodwill from Zonehaven acquisition	$	15,538	$	-	$	-	$	15,538
Intangible assets from Zonehaven acquisition	$	9,594	$	-	$	-	$	9,594
Goodwill from Amika Mobile asset purchase	$	5,853	$	-	$	-	$	5,853
Intangibles from Amika Mobile asset purchase	$	2,531	$	-	$	-	$	2,531
Operating lease ROU asset from Amika Mobile asset purchase	$	248	$	-	$	-	$	248
Holdback liability from Amika Mobile asset purchase	$	687	$	-	$	-	$	687

Holdback Liability: In connection with the Amika Mobile asset purchase, the Company recorded a holdback liability related to potential future adjustments to assets and liabilities, misrepresentations and indemnifications against third-party claims. Adjustments of up to CAD$1,000 (USD$787) will be deducted from the asset purchase holdback liability for up to three years from the closing date. The holdback liability was recorded at the present value which was the fair value at the acquisition date. The Company engaged independent valuation experts to assist in determining the present value of the holdback liability. The expected future payment was discounted using a rate representative of the Company’s payment risk and credit rating. Accretion is recorded in each subsequent reporting period based on the discount factor used to arrive at the original fait value. This change in fair value is recorded in the accompanying consolidated statement of operations. The changes in the carrying amount of the holdback liability is as follows:

Balance at acquisition date	$	613
Accretion		46
Currency translation		28
Balance at September 30, 2021	$	687

Foreign currency forward contract: In August 2020, the Company entered into a foreign currency forward contract as an economic hedge against exposure to changes in the Canadian dollar in connection with the Amika Mobile asset purchase. As of September 30, 2020, the notional value of the foreign currency forward contract was CAD$6,955 with a maturity date in October 2020. The foreign currency forward contract was classified under Level 2 of the fair value hierarchy. The valuation techniques used to measure the fair value were based on quoted market prices. On October 1, 2020, the foreign currency forward contract was settled for CAD$6,955 (USD$5,281), resulting in a realized loss of $48 on the contract that was recorded in earnings as other income (expense). The foreign currency forward contract liability of $76 was recorded in accrued liabilities in the consolidated balance sheet as of September 30, 2020.