Note 4 - Trade Accounts and Financing Receivables

6 Months Ended

Mar. 31, 2026

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

4. Trade Accounts and Financing Receivables

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

	*March 31, 2026*			*September 30, 2025*
Trade accounts receivable	$	6,162		$	12,725
Allowance for credit losses		(27	)		(63	)
Total trade accounts receivable	$	6,135		$	12,662

The Company determines the allowance for credit losses through a review of several factors, including historical collection experience, customer credit worthiness, current aging of customer accounts and current financial conditions of its customers. Trade accounts receivable balances are charged off against the allowance whenever it is probable that the receivable balance will not be recoverable.

Allowance for credit losses related to trade accounts receivable are reflected in the following table (in thousands):

	*Three Months Ended*						*Six Months Ended*
	*March 31, 2026*			*March 31, 2025*			*March 31, 2026*			*March 31, 2025*
Allowance for credit losses:
Beginning of period	$	42		$	4		$	63		$	4
Provision for credit losses		42			19			47			19
Recoveries		(13	)		—			(39	)		—
Charge-offs		(44	)		(2	)		(44	)		(2	)
End of period	$	27		$	21		$	27		$	21

Financing receivables, net, are reflected in the following table (in thousands):

	*March 31, 2026*			*September 30, 2025*
Promissory notes	$	25,367		$	19,149
Sales-type lease		975			5,302
Total financing receivables		26,342			24,451
Discount to fair value and unearned income		(804	)		(914	)
Total financing receivables, net		25,538			23,537
Less current portion		(13,209	)		(15,347	)
Non-current financing receivables	$	12,329		$	8,190

In January 2026, the Company entered into a $0.3 million promissory note with a customer related to a product sale. The note bears interest at 10.00% per annum and matures in January 2027. Principal and interest installments of $28,000 are due monthly until maturity. The note is collateralized by the product sold.

In January 2026, the Company entered into a $2.7 million promissory note with a customer related to a product sale. The note bears interest at 8.75% per annum and matures in January 2029. Principal and interest installments of $0.1 million are due monthly until maturity. The note is collateralized by the product sold.

During the first quarter of fiscal year 2026, the Company entered into three promissory notes totaling $7.9 million with a customer related to product sales. The notes bear interest at 8.75% per annum and mature during the first quarter of fiscal year 2029. Principal and interest installments totaling $0.3 million are due monthly until maturity. The notes are collateralized by the products sold.

During the fourth quarter of fiscal year 2025, The Company entered into two promissory notes totaling $7.5 million with a customer related to product sales. The notes bear interest at 8.75% per annum and mature during the fourth quarter of fiscal year 2028. Principal and interest installments totaling $0.2 million are due monthly until maturity. The notes are collateralized by the products sold.

In November 2024, the Company entered into a sales-type lease with a customer on ocean bottom equipment from its rental fleet. The lease, which matured in October 2025, had a remaining unpaid principal balance of $1.0 million at March 31, 2026. Ownership of the equipment will transfer to the customer when the unpaid principal has been paid. Interest income recognized on the lease for the fiscal year ended September 30, 2025 and for the six months ended March 31, 2026 was $0.6 million and $6,000, respectively.

In August 2024, the Company entered into a $9.4 million promissory note with a customer related to a product sale. The note bears interest at 9.5% per annum and matures in November 2026. Principal and interest installments of $0.9 million are due monthly beginning in January 2025. The note is collateralized by the product sold.

In August 2024, the Company entered into a $3.5 million promissory note with the buyer of its Russian subsidiary. The note bears interest at 5% per annum and is for a 10-year term. Principal and interest installments of $37,000 are due monthly beginning in November 2024. Based on a fair value analysis performed at the date of sale, a discount to fair value of $0.9 million was placed on the note. Interest income on the amortization of the discount is being recognized under the effective interest method.

Credit quality indicators used for the financing receivables consisted of historical collection experience, internal credit risk grades and collateral. The Company determined the allowance for credit losses through a review of several factors, including historical collection experience, customer credit worthiness, current aging of customer accounts and current financial conditions of its customers.

GEOSPACE TECHNOLOGIES CORP 10-Q