CSP INC /MA/ 10-Q

Item 1. Financial Statements CSP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except par value) ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ September 30, ​ 2024 2023 ​ (unaudited) ​ ​ ​ ASSETS ​ ​ Current assets: ​ ​ Cash and cash equivalents $ 28,891 ​ $ 25,217 Accounts receivable, net of allowances of $ 63 and $ 100 9,436 ​ 12,955 Financing receivables, net of allowances of $ 25 and $ 0 8,710 ​ 7,171 Inventories 2,475 ​ 2,542 Other current assets 2,096 ​ 2,479 Total current assets 51,608 ​ 50,364 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property, equipment and improvements, net 482 ​ 525 Operating lease right-of-use assets ​ 615 ​ ​ 966 Intangibles, net 47 ​ 46 Financing receivables due after one year, net of allowances of $ 44 and $ 0 ​ 3,718 ​ 4,224 Deferred income taxes, net 2,584 ​ 2,346 Cash surrender value of life insurance 5,545 ​ 5,356 Pension benefits assets ​ 2,028 ​ ​ 1,958 Other assets 177 ​ 119 Total assets $ 66,804 ​ $ 65,904 ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ Current liabilities: ​ Accounts payable and accrued expenses $ 11,798 ​ $ 10,785 Line of credit ​ 829 ​ ​ 1,515 Note payable ​ — ​ ​ 449 Deferred revenue 1,571 ​ 1,898 Pension and retirement plans 78 ​ 98 Income taxes payable 327 ​ 914 Total current liabilities 14,603 ​ 15,659 Pension and retirement plans 1,180 ​ 1,251 Operating lease liabilities - noncurrent portion ​ 153 ​ ​ 482 Income taxes payable 359 ​ 513 Other noncurrent liabilities 2,369 ​ 1,851 Total liabilities 18,664 ​ 19,756 ​ ​ ​ ​ ​ ​ Shareholders’ equity: ​ Common stock, $ .01 par value per share; authorized, 20,000 shares; issued and outstanding 9,743 (1) and 9,456 (1) shares, respectively 98 ​ 94 Additional paid-in capital (1) 22,054 ​ 20,837 Retained earnings 31,832 ​ 31,311 Accumulated other comprehensive loss ( 5,844 ) ​ ( 6,094 ) Total shareholders’ equity 48,140 ​ 46,148 Total liabilities and shareholders’ equity $ 66,804 ​ $ 65,904 ​ ​ ​ ​ ​ ​ (1) Retroactively adjusted for the effects of a two for one stock split effected in the form of a 100% stock dividend (see Note 1) ​ ​ ​ ​ ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ 3 Table of Contents CSP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except for per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Nine Months Ended ​ ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ 2024 2023 2024 2023 ​ Sales: ​ ​ ​ ​ ​ Product ​ $ 7,845 ​ $ 12,934 ​ $ 27,710 ​ $ 36,143 ​ Services ​ 5,260 ​ 4,774 ​ 14,476 ​ 13,178 ​ Total sales ​ 13,105 ​ 17,708 ​ 42,186 ​ 49,321 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales: ​ ​ ​ ​ ​ Product ​ 6,523 ​ 9,960 ​ 21,167 ​ 27,311 ​ Services ​ 2,000 ​ 1,821 ​ 5,864 ​ 5,276 ​ Total cost of sales ​ 8,523 ​ 11,781 ​ 27,031 ​ 32,587 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit ​ 4,582 ​ 5,927 ​ 15,155 ​ 16,734 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ Engineering and development ​ 737 ​ 741 ​ 2,163 ​ 2,435 ​ Selling, general and administrative ​ 4,565 ​ 4,611 ​ 12,821 ​ 12,123 ​ Total operating expenses ​ 5,302 ​ 5,352 ​ 14,984 ​ 14,558 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating (loss) income ​ ( 720 ) ​ 575 ​ 171 ​ 2,176 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ ​ ​ Foreign exchange loss ​ ( 10 ) ​ ( 93 ) ​ ( 152 ) ​ ( 709 ) ​ Interest expense ​ ( 55 ) ​ ( 82 ) ​ ( 150 ) ​ ( 208 ) ​ Interest income ​ 523 ​ 401 ​ 1,497 ​ 987 ​ Other income, net ​ 2 ​ 21 ​ 37 ​ 62 ​ Total other income, net ​ 460 ​ 247 ​ 1,232 ​ 132 ​ (Loss) income before income taxes ​ ​ ( 260 ) ​ 822 ​ ​ 1,403 ​ 2,308 ​ Income tax (benefit) expense ​ ​ ( 75 ) ​ ( 1,692 ) ​ ​ 73 ​ ( 1,488 ) ​ Net (loss) income ​ $ ( 185 ) ​ $ 2,514 ​ $ 1,330 ​ $ 3,796 ​ Net (loss) income attributable to common shareholders ​ $ ( 185 ) ​ $ 2,355 ​ $ 1,244 ​ $ 3,564 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per common share - basic (1) ​ $ ( 0.02 ) ​ $ 0.27 ​ $ 0.14 ​ $ 0.41 ​ Weighted average common shares outstanding - basic (1) ​ 9,110 ​ 8,826 ​ 9,014 ​ 8,731 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per common share - diluted (1) ​ $ ( 0.02 ) ​ $ 0.26 ​ $ 0.13 ​ $ 0.40 ​ Weighted average common shares outstanding - diluted (1) ​ ​ 9,110 ​ ​ 9,032 ​ ​ 9,410 ​ ​ 8,870 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Retroactively adjusted for the effects of a two for one stock split effected in the form of a 100% stock dividend (see Note 1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ 4 Table of Contents CSP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Amounts in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Nine Months Ended ​ ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ 2024 2023 2024 2023 ​ Net (loss) income ​ $ ( 185 ) $ 2,514 ​ $ 1,330 $ 3,796 ​ Foreign currency translation gain adjustments, net ​ 10 ​ 166 ​ 250 ​ 1,008 ​ Total comprehensive (loss) income ​ $ ( 175 ) $ 2,680 ​ $ 1,580 $ 4,804 ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ 5 Table of Contents CSP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY For the three months ended June 30, 2024 and 2023 (Amounts in thousands, except per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ Total ​ ​ ​ ​ ​ ​ ​ Paid-in ​ Retained ​ comprehensive ​ Shareholders’ Three Months Ended June 30, 2024: Shares Amount Capital Earnings loss Equity Balance as of March 31, 2024 9,754 ​ $ 98 ​ $ 21,625 ​ $ 32,378 ​ $ ( 5,854 ) ​ $ 48,247 Net loss — ​ — ​ — ​ ( 185 ) ​ — ​ ( 185 ) Other comprehensive income — ​ — ​ — ​ — ​ 10 ​ 10 Stock-based compensation — ​ — ​ 429 ​ — ​ — ​ 429 Restricted stock cancellation ​ ( 6 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Purchase of common stock ( 5 ) ​ — ​ — ​ ( 70 ) ​ — ​ ( 70 ) Cash dividends paid on common stock ($ 0.03 per share) — ​ — ​ — ​ ( 291 ) ​ — ​ ( 291 ) Balance as of June 30, 2024 9,743 ​ $ 98 ​ $ 22,054 ​ $ 31,832 ​ $ ( 5,844 ) ​ $ 48,140 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ Total ​ ​ ​ ​ ​ ​ ​ Paid-in ​ Retained ​ comprehensive ​ Shareholders’ Three Months Ended June 30, 2023: Shares (1) Amount (1) Capital (1) Earnings loss Equity Balance as of March 31, 2023 9,422 ​ $ 94 ​ $ 20,067 ​ $ 27,773 ​ $ ( 6,486 ) ​ $ 41,448 Net income — ​ — ​ — ​ 2,514 ​ — ​ 2,514 Other comprehensive income — ​ — ​ — ​ — ​ 166 ​ 166 Stock-based compensation — ​ — ​ 293 ​ — ​ — ​ 293 Purchase of common stock ( 2 ) ​ ​ — ​ — ​ ( 6 ) ​ — ​ ( 6 ) Cash dividends paid on common stock ($ 0.02 per share) (1) — ​ — ​ — ​ ( 188 ) ​ — ​ ( 188 ) Balance as of June 30, 2023 9,420 ​ $ 94 ​ $ 20,360 ​ $ 30,093 ​ $ ( 6,320 ) ​ $ 44,227 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Retroactively adjusted for the effects of a two for one stock split effected in the form of a 100% stock dividend (see Note 1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ 6 Table of Contents CSP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY For the nine months ended June 30, 2024 and 2023 (Amounts in thousands, except per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ Total ​ ​ ​ ​ ​ ​ ​ Paid-in ​ Retained ​ comprehensive ​ Shareholders’ Nine months ended June 30, 2024: Shares (1) Amount (1) Capital (1) Earnings loss Equity Balance as of September 30, 2023 9,456 ​ $ 94 ​ $ 20,837 ​ $ 31,311 ​ $ ( 6,094 ) ​ $ 46,148 Adoption of Accounting Standards Update 2016-13 ​ — ​ ​ — ​ ​ — ​ ​ ( 15 ) ​ ​ — ​ ​ ( 15 ) Net income — ​ — ​ — ​ 1,330 ​ — ​ 1,330 Other comprehensive income — ​ ​ — ​ ​ — ​ ​ — ​ 250 ​ 250 Stock-based compensation — ​ ​ — ​ ​ 1,134 ​ ​ — ​ — ​ 1,134 Restricted stock cancellation ​ ( 6 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Restricted stock issuance 285 ​ ​ 3 ​ ​ — ​ ​ — ​ — ​ 3 Issuance of shares under employee stock purchase plan 13 ​ ​ 1 ​ ​ 83 ​ ​ — ​ — ​ 84 Purchase of common stock ​ ( 5 ) ​ ​ — ​ ​ — ​ ​ ( 70 ) ​ ​ — ​ ​ ( 70 ) Cash dividends paid on common stock ($ 0.075 per share) (1) — ​ ​ — ​ ​ — ​ ​ ( 724 ) ​ — ​ ( 724 ) Balance as of June 30, 2024 9,743 ​ $ 98 ​ $ 22,054 ​ $ 31,832 ​ $ ( 5,844 ) ​ $ 48,140 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ Total ​ ​ ​ ​ ​ ​ ​ Paid-in ​ Retained ​ comprehensive ​ Shareholders’ Nine months ended June 30, 2023: Shares (1) Amount (1) Capital (1) Earnings loss Equity Balance as of September 30, 2022 9,108 ​ $ 91 ​ $ 19,431 ​ $ 26,769 ​ $ ( 7,328 ) ​ $ 38,963 Net income — ​ — ​ — ​ 3,796 ​ — ​ 3,796 Other comprehensive income — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,008 ​ 1,008 Stock-based compensation — ​ ​ — ​ ​ 831 ​ ​ — ​ ​ — ​ 831 Restricted stock issuance 286 ​ ​ 3 ​ ​ — ​ ​ — ​ ​ — ​ 3 Issuance of shares under employee stock purchase plan 28 ​ ​ — ​ ​ 98 ​ ​ — ​ ​ — ​ 98 Purchase of common stock ​ ( 2 ) ​ ​ — ​ ​ — ​ ​ ( 6 ) ​ ​ — ​ ​ ( 6 ) Cash dividends paid on common stock ($ 0.05 per share) (1) — ​ ​ — ​ ​ — ​ ​ ( 466 ) ​ ​ — ​ ( 466 ) Balance as of June 30, 2023 9,420 ​ $ 94 ​ $ 20,360 ​ $ 30,093 ​ $ ( 6,320 ) ​ $ 44,227 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Retroactively adjusted for the effects of a two for one stock split effected in the form of a 100% stock dividend (see Note 1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ 7 Table of Contents CSP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ June 30, ​ June 30, ​ 2024 2023 Operating activities ​ ​ Net income ​ $ 1,330 ​ $ 3,796 ​ ​ ​ ​ ​ ​ ​ Adjustments to reconcile net income to net cash provided by (used in) operating activities: ​ ​ Depreciation ​ 223 ​ 258 Amortization of intangibles ​ 5 ​ 11 Foreign exchange loss ​ 152 ​ 709 Provision for credit losses - financing receivables ​ ( 13 ) ​ — Provision for credit losses - accounts receivable ​ ​ 30 ​ ​ 34 Provision for obsolete inventory ​ 165 ​ 103 Amortization of lease right-of-use assets ​ ​ 370 ​ ​ 451 Stock-based compensation expense on restricted stock awards ​ 1,134 ​ 831 Deferred income taxes ​ ( 237 ) ​ ( 2,053 ) Increase in cash surrender value of life insurance ​ ( 136 ) ​ ( 96 ) ​ ​ ​ ​ ​ ​ ​ Changes in operating assets and liabilities: ​ ​ Decrease (increase) in accounts receivable ​ 3,558 ​ ( 1,271 ) Increase in financing receivable ​ ​ ( 1,095 ) ​ ​ ( 248 ) (Increase) decrease in inventories ​ ( 91 ) ​ 89 Decrease in refundable income taxes ​ — ​ 906 Decrease in other assets ​ ​ 309 ​ ​ 2,217 Increase (decrease) in accounts payable and accrued expenses ​ 1,164 ​ ( 8,392 ) Decrease in interest payable ​ ​ ( 28 ) ​ ​ ( 94 ) Decrease in operating lease liabilities ​ ​ ( 475 ) ​ ​ ( 67 ) Decrease in deferred revenue ​ ( 327 ) ​ ( 561 ) Decrease in pension and retirement plans liabilities ​ ( 94 ) ​ ( 350 ) Decrease in income taxes payable ​ ( 741 ) ​ — Increase (decrease) in other noncurrent liabilities ​ 518 ​ ( 1,221 ) Net cash provided by (used in) operating activities ​ 5,721 ​ ( 4,948 ) ​ ​ ​ ​ ​ ​ ​ Investing activities ​ ​ Life insurance premiums paid ​ ( 53 ) ​ ( 64 ) Purchase of held-to-maturity investments ​ ​ — ​ ​ ( 3,533 ) Proceeds from maturities of held-to-maturity investments ​ ​ — ​ ​ 1,182 Additions of intangible assets ​ ​ ( 6 ) ​ ​ ( 51 ) Purchases of property, equipment and improvements ​ ( 179 ) ​ ( 215 ) Net cash used in investing activities ​ ( 238 ) ​ ( 2,681 ) ​ ​ ​ ​ ​ ​ ​ Financing activities ​ ​ Dividends paid ​ ( 724 ) ​ ( 466 ) Net borrowing under line-of-credit agreement ​ ​ ( 686 ) ​ ​ ( 1,816 ) Repayments on note payable ​ ​ ( 427 ) ​ ​ ( 406 ) Principal payments on finance leases ​ — ​ ( 4 ) Purchase of common stock ​ ​ ( 70 ) ​ ​ ( 6 ) Proceeds from issuance of shares under equity compensation plans ​ 83 ​ 98 Net cash used in financing activities ​ ( 1,824 ) ​ ( 2,600 ) Effects of exchange rate on cash, net ​ 15 ​ 95 Net increase (decrease) in cash and cash equivalents ​ 3,674 ​ ( 10,134 ) 8 Table of Contents Cash and cash equivalents beginning of period ​ ​ 25,217 ​ 23,982 Cash and cash equivalents end of period ​ $ 28,891 ​ $ 13,848 ​ ​ ​ ​ ​ ​ ​ Supplementary cash flow information: ​ ​ Cash paid for income taxes ​ $ 1,091 ​ $ 42 Cash paid for interest ​ $ 159 ​ $ 308 ​ ​ ​ ​ ​ ​ ​ Supplementary non-cash financing activities: ​ ​ ​ ​ ​ ​ Obtaining a right-of-use asset in exchange for a lease liability ​ $ 19 ​ $ 392 Customer financing for inventory sold (see Note 5 Financing receivables, net for details) ​ $ 4,901 ​ $ 5,436 ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ ​ 9 Table of Contents CSP INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ​ Organization and Business CSP Inc. ("CSPi" or "CSPI" or "the Company" or "we" or "our") was incorporated in 1968 and is based in Lowell, Massachusetts. CSPi and its subsidiaries develop and market IT integration solutions, advanced security products, managed IT services, purpose built network adapters, and high-performance cluster computer systems to meet the diverse requirements of its commercial and defense customers worldwide. The Company operates in two segments, its Technology Solutions (“TS”) segment and High Performance Products (“HPP”) segment. 1. Basis of Presentation and New Significant Accounting Policy Basis of Presentation The accompanying interim condensed consolidated financial statements have been prepared by the Company and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. All adjustments were of a normal recurring nature. Certain information and footnote disclosures normally included in the annual consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States, have been omitted. Accordingly, the Company believes that although the disclosures are adequate to make the information presented not misleading, the unaudited condensed consolidated financial statements should be read in conjunction with the notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Presentation – sales whose payment terms exceed one year Effective in fiscal year 2024 sales whose payment terms exceed one year is now presented as “Financing receivables, net of allowances” on the Consolidated Balance Sheets rather than being combined with Accounts receivable, net of allowances. The financial statement line item Long-term receivable is now labeled as “Financing receivables due after one year, net of allowances.” These changes are reflected retrospectively as of September 30, 2023. This change was made to provide more detail on the balance sheet related to these receivables and align with our notes to the unaudited condensed consolidated financial statements. Presentation – two-for-one stock split On February 21, 2024, the Board of Directors of CSP Inc. approved an amendment to the Company’s Articles of Organization to increase the total number of its authorized shares of Common Stock, par value $ 0.01 , from 7,500,000 shares to 9,753,900 shares (the “Amendment”). No shareholder approval was required under the Massachusetts Business Corporation Act with respect to the Amendment. The Amendment became effective upon filing with the Secretary of the Commonwealth of Massachusetts on February 21, 2024. ​ On June 26, 2024, the stockholders of CSP, Inc. approved an amendment to the Company's Articles of Organization, as amended (the "Articles of Organization"), to increase the number of authorized shares of Common Stock from 9,753,900 to 20,000,000 (the "Amendment"). On June 26, 2024, the Company filed an Articles of Amendment to the Articles of Organization with the Secretary of the Commonwealth of Massachusetts to effect the Amendment, which became effective immediately upon such filing. This amendment is included as Exhibit 3.1 and is incorporated herein by reference. ​ On February 21, 2024, the Company announced its Board of Directors approved and declared a two -for-one stock split to be effected in the form of a 100 % stock dividend. The stock dividend was paid on March 20, 2024 to shareholders of record as of the close of business on March 6, 2024. In accordance with ASC 505 Equity , specifically ASC 505-20-25-3 through ASC 505-20-25-6 , we have determined this had a material effect on reducing share market value and therefore was treated this event as a stock split for accounting purposes. 10 Table of Contents All common shares and per share amounts contained in these condensed interim financial statements and notes have been retrospectively restated to reflect this two -for-one stock split in the form a 100 % dividend in accordance with ASC 260 Earnings Per Share , specifically ASC 260-10-55-12 . Use of estimates The preparation of condensed consolidated interim financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates and assumptions are related to the allowance for credit losses for accounts receivable and financing receivables, reserves for inventory obsolescence, the impairment assessment of intangible assets, right-of-use assets and lease liabilities, and the calculation of standalone selling price for revenue recognition, the calculation of liabilities related to deferred compensation and retirement plans and the calculation of income tax liabilities. Actual results may differ from those estimates under different assumptions or conditions. Significant Accounting Policies Except for the change in certain accounting policies upon adoption of the accounting standard described below, there have been no significant changes to the Company's significant accounting policies described in PART II, Item 8, Note 1 Summary of Significant Accounting Policies , of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting standards update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326) , an amendment of the FASB Accounting Standards Codification. Additional updates were issued in 2018-2020. The amended guidance replaces the current incurred loss impairment methodology for measurement of credit losses on financial instruments with a methodology (the “current expected credit losses model,” or “CECL model”) that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Under the CECL model, the allowance for losses on financial assets, measured at amortized cost, reflects management’s estimate of credit losses over the remaining expected life of such assets. The Company adopted ASU 2016-13 (the “new CECL standard”) as of October 1, 2023 using the modified retrospective method, with a cumulative-effect adjustment to the opening balance of Shareholders’ equity as of October 1, 2023. The adoption primarily impacted the estimation of our Allowance for credit losses for Accounts receivable and Financing receivables. Additionally, it affected allowance for credit losses of contract assets with effects being immaterial. The total impact recorded on our initial adoption of ASU 2016-13 as of October 1, 2023 included an increase of Accounts receivable, net of $ 67 k and a decrease of Financing receivables, net in the amount of $ 82 k with the total adjustment decreasing retained earnings of $ 15 k. For the accounting policies adopted and details of impacts from adoption refer to Note 4 - Accounts receivable, net and Note 5 - Financing receivables, net . ​ Recently Accounting Pronouncements Not Yet Adopted Improvements to Reportable Segment Disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures. ​ ​ 2. Revenue We derive revenue from the sale of integrated hardware and software, third-party service contracts, professional services, managed services, financing of hardware and software, and other services. 11 Table of Contents We recognize revenue from hardware upon transfer of control, which is at a point in time typically upon shipment when title transfers. Revenue from software is recognized at a point in time when the license is granted. Professional services generally include implementation, installation, and training services. Professional services are considered a series of distinct services that form one performance obligation and revenue is recognized over time as services are performed. Revenue generated from managed services is recognized over the term of the contract. Certain managed services contracts include financing of hardware and software. Revenues from arrangements which include financing are allocated considering relative standalone selling prices of lease and non-lease components within the agreement. The lease component includes hardware, which is subject to ASC 842, Leases . The non-lease components are subject to ASC 606, Revenue from Contracts with Customers . Other services generally include revenue generated through our royalty, extended warranty, multicomputer repair, and maintenance contracts. Royalty revenue is sales-based and recognized on the date of subsequent sale of the product, which occurs on the date of customer shipment. Revenue from extended warranty contracts is recognized ratably over the warranty period. Multicomputer repair services revenue is recognized upon control transfer when the customer takes possession of the computer at time of shipping. Revenue generated from maintenance services is recognized evenly over the term of the contract. The right of return risk lies with the original manufacturer of the product. Managed service contracts contain the right to refund if canceled within 30 days of inception. Any products with a standard warranty are treated as a warranty obligation under ASC 460, Guarantees. The following policies are applicable to our major categories of segment revenue transactions: TS Segment Revenue TS Segment revenue is derived from the sale of hardware, software, professional services, third-party service contracts, maintenance contracts, managed services, and financing of hardware and software. Financing revenue pertaining to the portion of an arrangement containing a lease is recognized in accordance with ASC 842. Financing revenue related to the lease is recorded in revenue as equipment leasing is part of our operations. Third-party service contracts are evaluated to determine whether such service revenue should be recorded as gross or net sales and whether over time or at point in time. HPP Segment Revenue HPP segment revenue is derived from the sale of integrated hardware and software, maintenance, and other services through the Multicomputer, Myricom, and ARIA product lines. Myricom revenue is derived from the sale of products, which are comprised of both hardware and embedded software which is essential to the products’ functionality, and post contract maintenance and support. Post contract maintenance and support is considered immaterial in the context of the contract and therefore is not a separate performance obligation. Multicomputer revenue is derived from the sale of hardware, software, extended warranties, royalties, and repair services. ARIA Zero Trust Gateway (“AZT”) revenue contains two performance obligations: a software license and post contract support. The transaction price is generally fixed consideration and allocated based on relative stand-alone selling price. Software license revenue is recognized at a point in time, generally when the license is made available to the customer. Post contract support revenue is recognized ratably over the contractual period of generally one year. ​ 12 Table of Contents See disaggregated revenues below by products/services and divisions/segments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology Solutions Segment ​ ​ ​ ​ High ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products ​ United ​ ​ ​ ​ ​ ​ ​ Consolidated Three months ended June 30, Segment Kingdom U.S. Total Total ​ ​ (Amounts in thousands) 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product ​ $ 20 ​ $ 124 ​ $ 7,701 ​ $ 7,825 ​ $ 7,845 Service ​ ​ 559 ​ ​ 55 ​ ​ 4,646 ​ ​ 4,701 ​ ​ 5,260 Total sales ​ $ 579 ​ $ 179 ​ $ 12,347 ​ $ 12,526 ​ $ 13,105 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology Solutions Segment ​ ​ ​ ​ High ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products ​ United ​ ​ ​ ​ ​ ​ ​ Consolidated Three months ended June 30, Segment Kingdom U.S. Total Total ​ ​ (Amounts in thousands) 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product ​ $ 996 ​ $ 141 ​ $ 11,797 ​ $ 11,938 ​ $ 12,934 Service ​ ​ 339 ​ ​ 65 ​ ​ 4,370 ​ ​ 4,435 ​ ​ 4,774 Total sales ​ $ 1,335 ​ $ 206 ​ $ 16,167 ​ $ 16,373 ​ $ 17,708 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology Solutions Segment ​ ​ ​ ​ High ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products ​ United ​ ​ ​ ​ ​ ​ ​ Consolidated Nine months ended June 30, Segment Kingdom U.S. Total Total ​ ​ (Amounts in thousands) 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product ​ $ 2,535 ​ $ 497 ​ $ 24,676 ​ $ 25,173 ​ $ 27,708 Service ​ ​ 1,258 ​ ​ 184 ​ ​ 13,034 ​ ​ 13,218 ​ ​ 14,476 Finance * ​ ​ — ​ ​ — ​ ​ 2 ​ ​ 2 ​ ​ 2 Total sales ​ $ 3,793 ​ $ 681 ​ $ 37,712 ​ $ 38,393 ​ $ 42,186 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology Solutions Segment ​ ​ ​ ​ High ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products ​ United ​ ​ ​ ​ ​ ​ ​ Consolidated Nine months ended June 30, Segment Kingdom U.S. Total Total ​ ​ (Amounts in thousands) 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product ​ $ 4,130 ​ $ 507 ​ $ 31,504 ​ $ 32,011 ​ $ 36,141 Service ​ ​ 1,170 ​ ​ 244 ​ ​ 11,764 ​ ​ 12,008 ​ ​ 13,178 Finance * ​ ​ — ​ ​ — ​ ​ 2 ​ ​ 2 ​ ​ 2 Total sales ​ $ 5,300 ​ $ 751 ​ $ 43,270 ​ $ 44,021 ​ $ 49,321 * Finance revenue is related to equipment leasing and is not subject to the guidance on revenue from contracts with customers (ASC 606). Significant Judgments The input method using labor hours expended relative to the total expected hours is used to recognize revenue for professional services. Only the hours that depict our performance toward satisfying a performance obligation are used to measure progress. An estimate of hours for each professional service agreement is made at the beginning of each contract 13 Table of Contents based on prior experience and monitored throughout the performance of the services. This method is most appropriate as it depicts the measure of progress towards satisfaction of the performance obligation. A financing component exists when at contract inception the period between the transfer of a promised good and/or service to the customer differs from when the customer pays for the good and/or service. As a practical expedient, we have elected not to adjust the amount of consideration for effects of a significant financing component when it is anticipated the promised good or service will be transferred and the subsequent payment will be one year or less. ​ Certain contracts contain a financing component including managed services contracts with financing of hardware and software. The interest rate used reflects the approximate interest rate consistent with a separate financing transaction with the customer at the inception of the agreement. Revenues from arrangements which include financing are allocated considering relative standalone selling prices of lease and non-lease components within the agreement. The lease component includes hardware, which is subject to ASC 842, Leases . The non-lease components are subject to ASC 606, Revenue from Contracts with Customers . ​ When product and non-managed services are sold together, the allocation of the transaction price to each performance obligation is calculated based on the estimated relative selling price or a budgeted cost-plus margin approach, as appropriate. Due to the complex nature of these contracts, there is significant judgment in allocating the transaction price. These estimates are periodically reviewed by project managers, engineers, and other staff involved to ensure estimates remain appropriate. For items sold separately, including hardware, software, professional services, maintenance contracts, other services, and third-party service contracts, there is no allocation as there is one performance obligation. We recognize revenue from third-party service contracts as either gross sales or net sales depending on whether we are acting as a principal party to the transaction or simply acting as an agent or broker based on control and timing. We are a principal if we control the good or service before that good or service is transferred to the customer. We record revenue as gross when we are a principal party to the arrangement and net of cost when we are acting as a broker or agent for a third party. Under gross sales recognition, the entire selling price is recorded in revenue and our cost to the third-party service provider or vendor is recorded in cost of sales. Under net sales recognition, the cost to the third-party service provider or vendor is recorded as a reduction to revenue resulting in net sales equal to the gross profit on the transaction. Third-party service contracts are sold in different combinations with hardware, software, and services. When we are an agent, revenue is typically recorded at a point in time. When we are the principal, revenue is recognized over the contract term. We have concluded we are the agent in sales of third-party maintenance, software or hardware support, and certain security software that is sold with integral third-party delivered software maintenance that includes critical updates. Contract Assets and Liabilities When we have performed work but do not have an unconditional right to payment, a contract asset is recorded. When we have the right to bill a customer, accounts receivable is recorded as an unconditional right exists. Current contract assets were $ 0.8 million and $ 0.9 million as of June 30, 2024 and September 30, 2023, respectively. The current portion is recorded in other current assets on the condensed consolidated balance sheets. There were no noncurrent contract assets as of June 30, 2024 and September 30, 2023. The difference in the balances is due to regular timing differences between when work is performed and having an unconditional right to payment. Contract liabilities arise when payment is received before we transfer a good or service to the customer. Current contract liabilities were $ 1.6 million and $ 1.9 million as of June 30, 2024 and September 30, 2023, respectively. The current portion of contract liabilities is recorded in deferred revenue on the condensed consolidated balance sheets. There were no long-term contract liabilities as of June 30, 2024 and September 30, 2023, respectively. Revenue recognized for the three and nine months ended June 30, 2024 that was included in contract liabilities as of September 30, 2023 was $ 0.2 million and $ 1.3 million, respectively. Contract Costs Incremental costs of obtaining a contract involving customer transactions where the revenue and the related transfer of goods and services are equal to or less than a one year period, are expensed as incurred, utilizing the practical expedient in ASC 340-40-25-4 . For a period greater than one year, incremental contract costs are capitalized if we expect to recover these costs. The costs are amortized over the contract term and expected renewal periods. The period of amortization is generally three years . Incremental costs are related to commissions in the TS portion of the business. 14 Table of Contents Current capitalized contract costs are within the other current assets on the condensed consolidated balance sheets as of June 30, 2024 and September 30, 2023. The portion of current capitalized costs were $ 190 thousand and $ 172 thousand as of June 30, 2024 and September 30, 2023, respectively. There are no noncurrent capitalized costs on the condensed consolidated balance sheets as these commissions are paid annually even when the contract extends beyond a one year period. The amount of incremental costs amortized for the three months ended June 30, 2024 and 2023 were $ 122 thousand and $ 103 thousand, respectively. The amount of incremental costs amortized for the nine months ended June 30, 2024 and 2023 were $ 351 thousand and $ 302 thousand, respectively and is recorded in selling, general, and administrative expenses. There was no impairment related to incremental costs capitalized during the nine months ended June 30, 2024 and 2023. Costs to fulfill a contract are capitalized when the costs are related to a contract or anticipated contract, generate or enhance resources that will be used in satisfying performance obligations in the future, and costs are recoverable. Costs to fulfill a contract are related to the TS portion of the business and involve activities performed before managed services can be completed. The were no current capitalized costs as of June 30, 2024 or September 30, 2023. Other Projects are typically billed upon completion or at certain milestones. Product and services are typically billed when shipped or as services are being performed. Payment terms are typically 30 days to pay in full except in Europe where it could be up to 90 days . Most of our contracts are less than one year. There are certain contracts that contain a financing component. See Note 5 Financing receivables, net to the condensed consolidated financial statements for additional information. We elected to use the optional exemption to not disclose the aggregate amount of the transaction price allocated to performance obligations that have an original expected duration of one year or less. This is due to a low number of performance obligations, which are less than one year from being unsatisfied at each period end. Most of these contracts are related to product sales. We have certain contracts that have an original term of more than one year. The royalty agreement is longer than one year, but not included in the table below as the royalties are sales-based. Managed service contracts are generally longer than one year and revenue is recognized ratably over the contract term. For these contracts the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2024 is set forth in the table below: ​ ​ ​ ​ ​ Fiscal Year (Amounts in thousands) 2024 ​ $ 372 2025 ​ ​ 1,327 2026 ​ ​ 999 Thereafter ​ ​ 2,002 ​ ​ $ 4,700 ​ 3 . Earnings Per Share of Common Stock Basic net income (loss) per common share is computed by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net income per share includes the dilutive effect of restricted stock, if any, calculated using the treasury stock method. For unvested restricted stock, assumed proceeds under the treasury stock method would include unamortized compensation cost. Net losses are not allocated to participating share-based payment awards, which include the non-vested shares outstanding. We are required to present earnings per share (“EPS”), utilizing the two class method because we had outstanding, non-vested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, which are considered participating securities. Basic and diluted earnings per share computations for the Company’s reported net income attributable to common stockholders are as follows: ​ 15 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Nine Months Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2024 2023 2024 2023 ​ ​ (Amounts in thousands except per share data) Net (loss) income $ ( 185 ) $ 2,514 $ 1,330 $ 3,796 Less: net income attributable to nonvested common stock ​ — ​ ( 159 ) ​ ( 86 ) ​ ( 232 ) Net (loss) income attributable to common shareholders ​ $ ( 185 ) $ 2,355 ​ $ 1,244 $ 3,564 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average total shares outstanding - basic (1) ​ 9,110 9,420 ​ ​ 9,641 ​ ​ 9,301 Less: weighted average non–vested shares outstanding (1) ​ — ( 594 ) ​ ​ ( 627 ) ​ ​ ( 570 ) Weighted average number of common shares outstanding - basic (1) ​ 9,110 8,826 ​ ​ 9,014 ​ 8,731 Add: potential common shares from non-vested stock awards (1) ​ — 206 ​ ​ 396 ​ 139 Weighted average common shares outstanding - diluted (1) ​ 9,110 9,032 ​ $ 9,410 ​ 8,870 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per common share - basic (1) ​ $ ( 0.02 ) ​ $ 0.27 ​ $ 0.14 ​ $ 0.41 Net (loss) income per common share - diluted (1) ​ $ ( 0.02 ) ​ $ 0.26 ​ $ 0.13 ​ $ 0.40 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Retroactively adjusted for the effects of a two for one stock split effected in the form of a 100% stock dividend (see Note 1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Anti-dilutive securities include restricted stock, which are excluded from the diluted income per share computation. There were anti-dilutive securities for the three months ended June 30, 2024 of $ 193 thousand. ​ 4 . Accounts receivable, net Upon adoption of the new CECL standard as described in Note 1 Basis of Presentation and New Significant Accounting Policy , the Company recognizes an allowance for losses on accounts receivable in an amount equal to the current expected credit losses. The estimation of the allowance is based on an analysis of historical loss experience, management’s assessment of current conditions and reasonable and supportable expectation of future conditions as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible including reviewing the current receivables aging. This results in a general reserve and a specific reserve. The Company assesses collectability by pooling receivables where similar characteristics exist and evaluates receivables individually when specific customer balances no longer share those risk characteristics and are considered at risk or uncollectible. The expense associated with the allowance for expected credit losses is recognized in Selling, general, and administrative expenses in the Consolidated Statements of Operations. Amounts disclosed below for the three and nine months ended June 30, 2024 reflect adoption of the new CECL standard and the amounts disclosed for the three and nine months ended June 30, 2023 reflect superseded guidance. ​ ​ ​ ​ ​ ​ 16 Table of Contents The following table presents the changes in the allowance for accounts receivable for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ June 30, 2024 ​ June 30, 2023 ​ ​ (Amounts in thousands) Allowance for credit losses for accounts receivable: ​ ​ ​ ​ ​ ​ Balances at beginning of the period ​ $ 73 ​ $ 106 Charge-offs ​ ​ - ​ ​ ( 16 ) Provision for credit losses ​ ​ ( 10 ) ​ ​ 16 Balances at end of the period ​ $ 63 ​ $ 106 ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended ​ ​ June 30, 2024 ​ June 30, 2023 ​ ​ (Amounts in thousands) Allowance for credit losses for accounts receivable: ​ ​ ​ ​ ​ ​ Balances at beginning of the period ​ $ 100 ​ $ 88 Adjustment for adoption of new CECL standard ​ ​ ( 67 ) ​ ​ - Charge-offs ​ ​ - ​ ​ ( 16 ) Provision for credit losses ​ ​ 30 ​ ​ 34 Balances at end of the period ​ $ 63 ​ $ 106 ​ ​ ​ 5 . Financing receivables, net ​ In the TS US division financing of goods and services is offered to certain customers. This involves amounts due reflecting sales whose payment terms exceed one year. This financing is separate from agreements with a leasing component, see Note 7 Leases for financing through leases. Determining whether to offer financing involves looking at the customer’s payment history, economic conditions, and capacity to pay. The Company assigns an internal risk rating to each customer at inception, which groups customers into a portfolio based off this risk rating. A risk rating is assigned by analyzing a customer’s financial statements and the latest Fitch rating if publicly available as well as recent payment activity. The credit quality of customers is continually monitored by these items. Accounts rated low risk have the equivalent of a Fitch rating of BBB– or higher, while accounts rated moderate risk have the equivalent of BB. The Company does not offer financing for customers where the risk is classified as higher, which would be lower than the equivalent of a BB Fitch rating. Financing receivables, net carry an average weighted average interest rate of 7.1 %, which reflects the approximate interest rate consistent with a separate financing transaction with the customer at the inception of the agreement. The amount of interest income earned from sales whose payment terms exceed one year for the three months ended June 30, 2024 and 2023 was $ 177 thousand and $ 234 thousand, respectively. The amount of interest income earned from sales whose payment terms exceed one year for the nine months ended June 30, 2024 and 2023 was $ 528 thousand and $ 605 thousand, respectively. Interest income from these agreements is recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations. Amounts disclosed below as of June 30, 2024 reflect adoption of the new CECL standard and the amounts disclosed as of September 30, 2023 reflect superseded guidance. ​ ​ ​ 17 Table of Contents The following table presents the components of the Company’s Financing receivables, net segregated by portfolio (risk rating) for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2024 ​ As of September 30, 2023 ​ ​ Risk Rating ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ ​ ​ Low ​ ​ Moderate ​ ​ Total ​ ​ Low ​ ​ Moderate ​ ​ Total ​ ​ (Amounts in thousands) ​ (Amounts in thousands) Financing receivables, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financing receivables, gross ​ $ 10,248 ​ $ 3,042 ​ $ 13,290 ​ $ 8,893 ​ $ 3,361 ​ $ 12,254 Unearned interest income ​ ​ ( 389 ) ​ ​ ( 404 ) ​ ​ ( 793 ) ​ ​ ( 325 ) ​ ​ ( 534 ) ​ ​ ( 859 ) Allowance for credit losses ​ ​ ( 30 ) ​ ​ ( 39 ) ​ ​ ( 69 ) ​ ​ - ​ ​ - ​ ​ - Financing receivables, net ​ $ 9,829 ​ $ 2,599 ​ $ 12,428 ​ $ 8,568 ​ $ 2,827 ​ $ 11,395 Short-term ​ $ 7,616 ​ $ 1,094 ​ $ 8,710 ​ $ 6,281 ​ $ 890 ​ $ 7,171 Long-term ​ $ 2,213 ​ $ 1,505 ​ $ 3,718 ​ $ 2,287 ​ $ 1,937 ​ $ 4,224 ​ Amounts disclosed below for the three and nine months ended June 30, 2024 reflect adoption of the new CECL standard and the amounts disclosed for the three and nine months ended June 30, 2023 reflect superseded guidance. The following table presents the changes in Allowance for credit losses for Financing receivables, net for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ June 30, 2024 ​ June 30, 2023 ​ ​ Risk Rating ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ Low Moderate Total Low Moderate Total ​ ​ (Amounts in thousands) ​ (Amounts in thousands) Allowance for credit losses for financing receivables: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at beginning of the period ​ $ 16 ​ $ 54 ​ $ 70 ​ $ - ​ $ - ​ $ - Provision charged to Consolidated Statements of Operations ​ ​ 14 ​ ​ ( 15 ) ​ ​ ( 1 ) ​ ​ - ​ ​ - ​ ​ - Balances at end of the period ​ $ 30 ​ $ 39 ​ $ 69 ​ $ - ​ $ - ​ $ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended ​ ​ June 30, 2024 ​ June 30, 2023 ​ ​ Risk Rating ​ ​ ​ ​ Risk Rating ​ ​ ​ ​ Low Moderate Total Low Moderate Total ​ ​ (Amounts in thousands) ​ (Amounts in thousands) Allowance for credit losses for financing receivables: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances at beginning of the period ​ $ - ​ $ - ​ $ - ​ $ - ​ $ - ​ $ - Adjustment for adoption of new CECL standard ​ ​ 27 ​ ​ 55 ​ ​ 82 ​ ​ - ​ ​ - ​ ​ - Provision charged to Consolidated Statements of Operations ​ ​ 3 ​ ​ ( 16 ) ​ ​ ( 13 ) ​ ​ - ​ ​ - ​ ​ - Balances at end of the period ​ $ 30 ​ $ 39 ​ $ 69 ​ $ - ​ $ - ​ $ - ​ Upon adoption of the new CECL standard as described in Note 1 Basis of Presentation and New Significant Accounting Policy , the Company recognizes an allowance for credit losses for financing receivables in an amount equal to the probable losses net of recoveries. A probability method for calculating credit losses is used based on historical data of defaults of Fitch ratings and length of time. Various factors are also assessed in the allowance for credit losses including internal historical data as well as macroeconomic forecast assumptions and management judgments applicable to and through the expected life of the portfolios. Macroeconomic conditions include the level of gross domestic product (“GDP”) growth and unemployment rates, which directly correlate with our historical credit losses. The expense associated with the 18 Table of Contents allowance for expected credit losses is recognized in Selling, general, and administrative expenses in the Consolidated Statements of Operations. Financing receivables whose payment terms exceed one year are placed on non-accrual status, meaning interest income stops being recorded, when the customer has a past due amount in excess of 30 days or reasonable doubt exists in collecting all interest and principal. A payment due in excess of 30 days is considered delinquent. If a payment is received for a receivable on non-accrual status the payment is first applied to interest and then principal. Recording interest income resumes once no reasonable doubt exists regarding collecting all interest and principal. There were no financing receivables placed on non-accrual status as of June 30, 2024 or September 30, 2023. The following table presents Financing receivables, gross, including accrued interest and excluding any allowance, by credit quality indicator segregated by risk rating and year of origination as of June 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2024 ​ ​ Fiscal year of origination ​ ​ ​ Risk Rating 2024 2023 2022 2021 Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Moderate $ 480 ​ $ 2,284 ​ $ 278 ​ $ — ​ $ 3,042 Low 3,668 ​ ​ 753 ​ ​ 4,267 ​ ​ 1,560 ​ ​ 10,248 Total $ 4,148 ​ $ 3,037 ​ $ 4,545 ​ $ 1,560 ​ $ 13,290 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contractual maturities of outstanding financing receivables are as follows: ​ ​ ​ ​ ​ Fiscal year ending September 30: (Amounts in thousands) 2024 ​ $ 5,962 2025 ​ ​ 4,670 2026 ​ ​ 1,946 2027 ​ ​ 712 Total payments ​ $ 13,290 Less: unearned interest income ​ ​ ( 793 ) Less: allowance for credit losses ​ ​ ( 69 ) Total, net of unearned interest income and allowance for credit losses ​ $ 12,428 ​ ​ ​ ​ 6 . Inventories Inventories consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ September 30, ​ 2024 2023 ​ ​ (Amounts in thousands) Raw materials ​ $ 160 ​ $ 247 Work-in-process ​ 53 ​ ​ 36 Finished goods ​ 2,262 ​ ​ 2,259 Total ​ $ 2,475 ​ $ 2,542 ​ We evaluate inventory for obsolescence on at least a quarterly basis or more frequently if needed. Our HPP segment has a multi-faceted approach in determining obsolescence including reviewing inventory by product line, program, and individual part. In the TS segment, we seek to minimize obsolete inventory by having nearly all of our inventory purchased in conjunction with a sales agreement. From time to time, we do purchase certain inventory in bulk to receive discounts, but only when we anticipate selling this inventory. The inventory we purchase at the TS segment is in high demand, especially in the current environment, and has a limited risk of obsolescence. ​ 19 Table of Contents 7 . Leases Information related to both lessee and lessor The components of lease costs for the three months ended June 30, 2024 and 2023 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Condensed Consolidated Statements of Operations Location ​ June 30, 2024 June 30, 2023 ​ ​ ​ (Amounts in thousands) Operating Lease: ​ ​ ​ ​ ​ Operating lease cost Selling, general, and administrative ​ ​ 134 ​ ​ 162 Short-term lease cost Selling, general, and administrative ​ ​ 9 ​ ​ 15 Total lease costs ​ ​ $ 143 ​ $ 177 Less sublease interest income Revenue ​ ​ ( 1 ) ​ ​ — Total lease costs, net of sublease interest income ​ ​ $ 142 ​ $ 177 ​ The components of lease costs for the nine months ended June 30, 2024 and 2023 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended ​ Condensed Consolidated Statements of Operations Location ​ June 30, 2024 ​ June 30, 2023 ​ ​ ​ (Amounts in thousands) Finance Lease: ​ ​ ​ ​ ​ ​ ​ Interest on lease liabilities Interest expense ​ $ — ​ $ 1 Operating Lease: ​ ​ ​ ​ ​ Operating lease cost Selling, general, and administrative ​ ​ 398 ​ ​ 486 Short-term lease cost Selling, general, and administrative ​ ​ 26 ​ ​ 36 Total lease costs ​ ​ $ 424 ​ $ 523 Less sublease interest income Revenue ​ ​ ( 2 ) ​ ​ ( 2 ) Total lease costs, net of sublease interest income ​ ​ $ 422 ​ $ 521 ​ Supplemental cash flow information related to leases for the nine months ended June 30, 2024 and 2023 is below: ​ ​ ​ ​ ​ ​ ​ Nine months ended ​ June 30, 2024 June 30, 2023 ​ (Amounts in thousands) Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ Operating cash flows paid for operating leases $ 403 $ 495 Operating cash flows paid for short-term leases ​ 26 ​ 36 Operating cash flows paid for finance leases ​ 1 ​ 1 Financing cash flows paid for finance leases ​ — ​ 4 Cash received from subleases ​ ( 11 ) ​ ( 15 ) Lease assets obtained in exchange for new lease liabilities ​ ​ ​ ​ Operating leases ​ 19 ​ 392 ​ ​ 8 . Accounts payable and Other noncurrent liabilities The Company enters into certain multi-year agreements with vendors when also entering into some of the multi-year contracts the Company enters into with customers. See Note 5 Financing receivables, net for further information related to the multi-year agreements with customers. ​ 20 Table of Contents There was not an interest rate stated in the agreements and therefore interest was imputed under ASC 835 Interest as the payments in the exchange represented two elements: principal and interest. As of June 30, 2024 the average imputed interest rate for the agreements was determined to be 8.2 %. The rate was determined primarily based on the rate the Company could obtain by financing from other sources at the date of the transaction. ​ Interest expense related to these agreements for the three months ended June 30, 2024 and 2023 was $ 52 thousand and $ 74 thousand, respectively. Interest expense related to these agreements for the nine months ended June 30, 2024 and 2023 was $ 139 thousand and $ 185 thousand, respectively. ​ The amounts owed for these agreements are in Accounts payable and Other noncurrent liabilities because they are owed to vendors rather than banks or financial institutions for borrowings. See Note 9 Notes Payable and Line of Credit for amounts due to banks and other financial institutions for borrowings. ​ Below are details of the agreements with the vendors that contain imputed interest: ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2024 ​ September 30, 2023 ​ (Amounts in thousands) Current $ 2,477 ​ $ 1,718 Less: discount ​ ( 264 ) ​ ​ ( 140 ) Accounts payable and accrued expenses $ 2,213 ​ $ 1,578 ​ ​ ​ ​ ​ ​ Noncurrent $ 2,444 ​ $ 1,967 Less: discount ​ ( 158 ) ​ ​ ( 116 ) Other noncurrent liabilities $ 2,286 ​ $ 1,851 ​ ​ The Company had a total of approximately $ 1.4 million due (net of interest) to one of these vendors as of June 30, 2024. This is approximately 10 % of Accounts payable and other noncurrent liabilities. The Company had a total of approximately $ 3.3 million due (net of interest) to one of these vendors as of September 30, 2023. This is approximately 26 % of Accounts payable and other noncurrent liabilities. It was the same vendor as of June 30, 2024 and September 30, 2023 that only transacts with the US division of the TS segment. The TS segment has many vendors it transacts with and does not have any specific agreement with this vendor that it must purchase certain products from the vendor. Management believes other suppliers could provide similar products on comparable terms. ​ 9. Notes Payable and Line of Credit In October 2019, the Company borrowed $ 2.0 million with a 5.1 % rate of interest related to a multi-year agreement with a customer. ​ There was no interest expense related to the note payable for the nine months ended June 30, 2024. Interest expense related to the notes for the three and nine months ended June 30, 2023 was $ 5 thousand and $ 16 thousand, respectively. ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2024 ​ September 30, 2023 ​ (Amounts in thousands) Current $ — ​ $ 449 Less: notes discount ​ — ​ — Note payable - current portion $ — ​ $ 449 ​ As of June 30, 2024 and September 30, 2023, the Company maintained an inventory line of credit with a borrowing capacity of $ 15.0 million. It may be used by the TS and HPP segments in the US to purchase inventory from approved vendors with payment terms which exceed those offered by the vendors. No interest accrues under the inventory line of credit when advances are paid within terms, however, late payments are subject to an interest charge of Prime plus 5 %. The credit agreement for the inventory line of credit contains financial covenants which require the Company to maintain the following TS segment-specific financial ratios: (1) a minimum current ratio of 1.2 , (2) tangible net worth of no less than $ 4.0 million, and (3) a maximum ratio of total liabilities to total net worth of less than 5.0 :1. As of June 30, 2024 and September 30, 2023, Company borrowings, all from the TS segment, under the inventory line of credit were $ 0.8 21 Table of Contents million and $ 1.5 million, respectively, and the Company was in compliance with all financial covenants. As of June 30, 2024 and September 30, 2023, this line of credit also includes availability of a limited cash withdrawal of up to $ 1.0 million. As of June 30, 2024 and September 30, 2023 there were no cash withdrawals outstanding. ​ 10. Pension and Retirement Plans The Company’s operations have defined benefit and defined contribution plans in the UK and in the US. In the UK, the Company provides defined benefit pension plans and defined contribution plans for some of its employees. In the US, the Company provides benefits through supplemental retirement plans to certain former employees. The US supplemental retirement plans have life insurance policies which are not plan assets but were purchased by the Company as a vehicle to fund the costs of the plan. The Company also provides for officer death benefits through post-retirement plans to certain current officers of the Company in the US All the Company’s defined benefit plans are closed to newly hired employees and have been since September 2009. The Company funds its pension plans in amounts sufficient to meet the requirements set forth in applicable employee benefits laws and local tax laws. Liabilities for amounts in excess of these funding levels are accrued and reported in the condensed consolidated balance sheets. The Company’s pension plan in the UK is the only plan with plan assets. The plan assets consist of an investment in a commingled fund which in turn comprises a diversified mix of assets including corporate equity securities, government securities and corporate debt securities. The components of net periodic benefit costs related to the US and UK plans are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2024 ​ 2023 ​ U.K. U.S. Total U.K. U.S. Total ​ ​ (Amounts in thousands) Pension: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest cost ​ $ 112 ​ $ 2 ​ $ 114 ​ $ 110 ​ $ 4 ​ $ 114 Expected return on plan assets ​ ( 149 ) ​ — ​ ( 149 ) ​ ( 148 ) ​ — ​ ( 148 ) Amortization of past service costs ​ ​ 2 ​ ​ — ​ ​ 2 ​ ​ 1 ​ ​ — ​ ​ 1 Amortization of net gain ​ — ​ ( 1 ) ​ ( 1 ) ​ — ​ ( 1 ) ​ ( 1 ) Net periodic (benefit) cost ​ $ ( 35 ) ​ $ 1 ​ $ ( 34 ) ​ $ ( 37 ) ​ $ 3 ​ $ ( 34 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Post Retirement: ​ ​ ​ ​ ​ ​ Service cost ​ $ — ​ $ 5 ​ $ 5 ​ $ — ​ $ 6 ​ $ 6 Interest cost ​ — ​ 16 ​ 16 ​ — ​ 14 ​ 14 Amortization of net gain ​ — ​ ( 43 ) ​ ( 43 ) ​ — ​ ( 50 ) ​ ( 50 ) Net periodic benefit ​ $ — ​ $ ( 22 ) ​ $ ( 22 ) ​ $ — ​ $ ( 30 ) ​ $ ( 30 ) ​ ​ 22 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended June 30, ​ ​ 2024 ​ 2023 ​ U.K. U.S. Total U.K. U.S. Total ​ ​ (Amounts in thousands) Pension: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest cost ​ $ 333 ​ $ 8 ​ $ 341 ​ $ 321 ​ $ 11 ​ $ 332 Expected return on plan assets ​ ( 445 ) ​ — ​ ( 445 ) ​ ( 430 ) ​ — ​ ( 430 ) Amortization of past service costs ​ ​ 6 ​ ​ — ​ ​ 6 ​ ​ 5 ​ ​ — ​ ​ 5 Amortization of net gain ​ — ​ ( 4 ) ​ ( 4 ) ​ — ​ ( 3 ) ​ ( 3 ) Net periodic (benefit) cost ​ $ ( 106 ) ​ $ 4 ​ $ ( 102 ) ​ $ ( 104 ) ​ $ 8 ​ $ ( 96 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Post Retirement: ​ ​ ​ ​ ​ ​ Service cost ​ $ — ​ $ 17 ​ $ 17 ​ $ — ​ $ 18 ​ $ 18 Interest cost ​ — ​ 48 ​ 48 ​ — ​ 46 ​ 46 Amortization of net gain ​ — ​ ( 129 ) ​ ( 129 ) ​ — ​ ( 147 ) ​ ( 147 ) Net periodic benefit ​ $ — ​ $ ( 64 ) ​ $ ( 64 ) ​ $ — ​ $ ( 83 ) ​ $ ( 83 ) ​ The fair value of the assets held by the UK pension plan by asset category are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Values as of ​ ​ June 30, 2024 ​ September 30, 2023 ​ ​ Fair Value Measurements Using Inputs Considered as ​ Fair Value Measurements Using Inputs Considered as Asset Category Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 ​ ​ (Amounts in thousands) Cash on deposit ​ $ 64 ​ $ 64 ​ $ — ​ $ — ​ $ 428 ​ $ 428 ​ $ — ​ $ — Fixed income ​ ​ 9,565 ​ ​ 8,016 ​ ​ 1,549 ​ ​ — ​ ​ 8,703 ​ ​ 7,251 ​ ​ 1,452 ​ ​ — Equity ​ 881 ​ 247 ​ ​ 634 ​ ​ — ​ 903 ​ 266 ​ ​ 637 ​ ​ — Total plan assets ​ $ 10,510 ​ $ 8,327 ​ $ 2,183 ​ $ — ​ $ 10,034 ​ $ 7,945 ​ $ 2,089 ​ $ — ​ ​ 11. Income Taxes An income tax benefit of $ 75 thousand was recorded for the three months ended June 30, 2024 compared to an income tax benefit of $ 1.7 million in the same period of 2023. The estimated annualized effective income tax rate for the three months ended June 30, 2024 was 19.2 %, excluding the impacts of the UK entity which continues to experience losses and maintains a full valuation allowance, compared to the estimated annualized effective income tax rate of 51.7 % for the same period of 2023. The difference between our effective income tax rate and the U.S. federal statutory rate for the three months ending June 30, 2024 are the impact of state taxes and tax credits that we expect to be able to utilize against federal and state taxes. During the 3 months ending June 30, 2023, we released a significant portion of the valuation allowance against our U.S. deferred tax assets and switched from using the discrete effective tax rate method to calculate income taxes to the annualized effective tax rate method, resulting in the shift in the effective tax rate during the period. ​ The effective tax rate for the three months ended June 30, 2024 was 29.3 %, excluding the UK as previously mentioned, driven by excess tax benefits on restricted stock awards vesting during the period. The effective tax rate for the three months ended June 30, 2023 was ( 201.9 )%, excluding the UK, which was primarily driven by the release of a significant portion of the valuation allowance against our deferred tax assets in the U.S. ​ An income tax expense of $ 73 thousand was recorded for the nine months ended June 30, 2024 compared to an income tax benefit of $ 1.5 million in the same period of 2023. The estimated annualized effective income tax rate for the nine months ended June 30, 2024 was 19.2 %, excluding the impacts of the UK entity which continues to experience losses and maintains a full valuation allowance, compared to the estimated annualized effective income tax rate of 22.0 % for the nine months ended June 30, 2023. The difference between our effective income tax rate and the U.S. federal statutory rate for the three months ending June 30, 2024 and the same period of 2023 are the impact of state taxes and tax credits that we expect to be able to utilize against federal and state taxes. ​ The effective tax rate for the nine months ended June 30, 2024 was 4.9 %, excluding the UK as previously mentioned, driven by excess tax benefits on restricted stock awards vesting during the period. The effective tax rate for 23 Table of Contents the nine months ended June 30, 2023 was ( 51.4 %), excluding the UK, which was primarily driven by the release of a significant portion of the valuation allowance against our deferred tax assets in the U.S. ​ 12. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ September 30, ​ 2024 2023 ​ ​ (Amounts in thousands) Cumulative effect of foreign currency translation, net ​ $ ( 4,579 ) ​ $ ( 4,829 ) Cumulative unrealized loss on pension liability ​ ( 1,265 ) ​ ( 1,265 ) Accumulated other comprehensive loss, net ​ $ ( 5,844 ) ​ $ ( 6,094 ) ​ ​ 13. Fair Value of Financial Assets and Liabilities Under the fair value standards fair value is based on the exit price and defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement should reflect all the assumptions that market participants would use in pricing an asset or liability. A fair value hierarchy is established in the authoritative guidance outlined in three levels ranking from Level 1 to Level 3 with Level 1 being the highest priority. ​ Level 1: observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets ​ Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly ​ Level 3: unobservable inputs (e.g., a reporting entity’s or other entity’s own data) ​ The Company had no assets or liabilities measured at fair value on a recurring (except our pension plan assets and whole life insurance policies, see Note 10 Pension and Retirement Plans for pension plan assets) or non-recurring basis as of June 30, 2024 or September 30, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 24 Table of Contents To estimate fair value of the financial instruments below, quoted market prices are used when available and classified within Level 1. If this data is not available, we use observable market-based inputs to estimate fair value, which are classified within Level 2. If the preceding information is unavailable, we use internally generated data to estimate fair value which is classified within Level 3. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2024 ​ ​ As of September 30, 2023 ​ ​ ​ ​ ​ ​ Carrying Amount ​ ​ Fair Value ​ ​ Carrying Amount ​ ​ Fair Value ​ Fair Value Level ​ Reference ​ ​ (Amounts in thousands) ​ ​ ​ ​ Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 28,891 ​ $ 28,891 ​ $ 25,217 ​ $ 25,217 ​ 1 ​ Condensed Consolidated Balance Sheets Accounts receivable, net ​ 9,436 ​ ​ 9,436 ​ ​ 12,955 ​ ​ 12,955 ​ 2 ​ Note 4 Financing receivables, net ​ 12,428 ​ ​ 12,428 ​ ​ 11,395 ​ ​ 11,395 ​ 3 ​ Note 5 Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable and accrued expenses and other long-term liabilities* ​ 4,499 ​ ​ 4,499 ​ ​ 3,429 ​ ​ 3,429 ​ 3 ​ Note 8 Line of Credit ​ 829 ​ ​ 829 ​ ​ 1,515 ​ ​ 1,515 ​ 2 ​ Note 9 Note payable ​ — ​ ​ — ​ ​ 449 ​ ​ 449 ​ 3 ​ Note 9 ​ *Original maturity over one year ​ Cash and cash equivalents Carrying amount approximated fair value. ​ Accounts and long-term receivable with original maturity over one year Fair value was estimated by discounting future cash flows based on the current rate with similar terms. ​ Line of credit The fair value of our line of credit is based on borrowing rates currently available to a market participant for loans with similar terms or maturity. The carrying amount of our outstanding revolving line of credit approximates fair value because the base interest rate charged varies with market conditions and the credit spread is commensurate with current market spreads for issuers of similar risk. No interest accrues under the inventory line of credit when advances are paid within terms. ​ Notes Payable Fair value was estimated by discounting future cash flows based on the current rate the Company could get in another transaction with similar terms based on historical information. ​ Fair value of accounts receivable with an original maturity of one year or less and accounts payable was not materially different from their carrying values as of June 30, 2024 and September 30, 2023. ​ 25 Table of Contents 14. Segment Information The following tables present certain operating segment information for the three and nine months ended June 30, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology Solutions Segment ​ ​ ​ ​ ​ High ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products ​ United ​ ​ ​ ​ ​ ​ ​ Consolidated Three months ended June 30, Segment Kingdom U.S. Total Total ​ ​ (Amounts in thousands) 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product ​ $ 20 ​ $ 124 ​ $ 7,701 ​ $ 7,825 ​ $ 7,845 Service ​ 559 ​ 55 ​ 4,646 ​ 4,701 ​ 5,260 Total sales ​ $ 579 ​ $ 179 ​ $ 12,347 ​ $ 12,526 ​ $ 13,105 Operating (loss) income ​ $ ( 1,628 ) ​ $ ( 48 ) ​ $ 956 ​ $ 908 ​ $ ( 720 ) Interest expense ​ $ ( 4 ) ​ $ — ​ $ ( 51 ) ​ $ ( 51 ) ​ $ ( 55 ) Interest income ​ $ 15 ​ $ 55 ​ $ 453 ​ $ 508 ​ $ 523 Total assets ​ $ 10,574 ​ $ 7,620 ​ $ 48,610 ​ $ 56,230 ​ $ 66,804 Capital expenditures ​ $ ( 7 ) ​ $ — ​ $ ( 38 ) ​ $ ( 38 ) ​ $ ( 45 ) Depreciation and amortization ​ $ ( 24 ) ​ $ — ​ $ ( 50 ) ​ $ ( 50 ) ​ $ ( 74 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ ​ Product ​ $ 996 ​ $ 141 ​ $ 11,797 ​ $ 11,938 ​ $ 12,934 Service ​ 339 ​ 65 ​ 4,370 ​ 4,435 ​ ​ 4,774 Total sales ​ $ 1,335 ​ $ 206 ​ $ 16,167 ​ $ 16,373 ​ $ 17,708 Operating (loss) income ​ $ ( 850 ) ​ $ ( 10 ) ​ $ 1,435 ​ $ 1,425 ​ $ 575 Interest expense ​ $ ( 3 ) ​ $ — ​ $ ( 79 ) ​ $ ( 79 ) ​ $ ( 82 ) Interest income ​ $ 2 ​ $ 47 ​ $ 352 ​ $ 399 ​ $ 401 Total assets ​ $ 10,165 ​ $ 6,914 ​ $ 50,524 ​ $ 57,438 ​ $ 67,603 Capital expenditures ​ $ ( 27 ) ​ $ — ​ $ ( 7 ) ​ $ ( 7 ) ​ $ ( 34 ) Depreciation and amortization ​ $ ( 27 ) ​ $ — ​ $ ( 64 ) ​ $ ( 64 ) ​ $ ( 91 ) ​ 26 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Technology Solutions Segment ​ ​ ​ ​ ​ High ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products ​ United ​ ​ ​ ​ ​ ​ ​ Consolidated Nine months ended June 30, Segment Kingdom U.S. Total Total ​ ​ (Amounts in thousands) 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product ​ $ 2,535 ​ $ 497 ​ $ 24,678 ​ $ 25,175 ​ $ 27,710 Service ​ 1,258 ​ 184 ​ 13,034 ​ 13,218 ​ 14,476 Total sales ​ $ 3,793 ​ $ 681 ​ $ 37,712 ​ $ 38,393 ​ $ 42,186 Operating (loss) income ​ $ ( 2,707 ) ​ $ ( 101 ) ​ $ 2,979 ​ $ 2,878 ​ $ 171 Interest expense ​ $ ( 11 ) ​ $ — ​ $ ( 139 ) ​ $ ( 139 ) ​ $ ( 150 ) Interest income ​ $ 27 ​ $ 163 ​ $ 1,307 ​ $ 1,470 ​ $ 1,497 Total assets ​ $ 10,574 ​ $ 7,620 ​ $ 48,610 ​ $ 56,230 ​ $ 66,804 Capital expenditures ​ $ ( 125 ) ​ $ — ​ $ ( 54 ) ​ $ ( 54 ) ​ $ ( 179 ) Depreciation and amortization ​ $ ( 77 ) ​ $ — ​ $ ( 151 ) ​ $ ( 151 ) ​ $ ( 228 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ ​ ​ ​ ​ Sales: ​ ​ ​ ​ ​ Product ​ $ 4,130 ​ $ 507 ​ $ 31,506 ​ $ 32,013 ​ $ 36,143 Service ​ 1,170 ​ 244 ​ 11,764 ​ 12,008 ​ 13,178 Total sales ​ $ 5,300 ​ $ 751 ​ $ 43,270 ​ $ 44,021 ​ $ 49,321 Operating (loss) income ​ $ ( 1,641 ) ​ $ ( 6 ) ​ $ 3,823 ​ $ 3,817 ​ $ 2,176 Interest expense ​ $ ( 9 ) ​ $ — ​ $ ( 199 ) ​ $ ( 199 ) ​ $ ( 208 ) Interest income ​ $ 10 ​ $ 126 ​ $ 851 ​ $ 977 ​ $ 987 Total assets ​ $ 10,165 ​ $ 6,914 ​ $ 50,524 ​ $ 57,438 ​ $ 67,603 Capital expenditures ​ $ ( 67 ) ​ $ — ​ $ ( 148 ) ​ $ ( 148 ) ​ $ ( 215 ) Depreciation and amortization ​ $ ( 83 ) ​ $ — ​ $ ( 186 ) ​ $ ( 186 ) ​ $ ( 269 ) ​ Operating income (loss) consists of sales less cost of sales, engineering and development expenses, and selling, general and administrative expenses but is not affected by either other income (expense) or by income tax expense (benefit). Non-operating expenses/income consists principally of interest income from transactions with payment terms exceeding one year (see Note 5 Financing receivables, net for details) and interest income from money market accounts in fiscal year 2024 year as interest rates have increased significantly, and interest expense primarily from multi-year agreements with vendors (see Note 8 Accounts payable and other noncurrent liabilities ). All intercompany transactions have been eliminated. The following table lists customers from which the Company derived revenues of 10% or more of total revenues for the three and nine months ended June 30, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended June 30, ​ ​ Nine months ended June 30, ​ ​ ​ 2024 ​ ​ 2023 ​ ​ 2024 ​ ​ 2023 ​ ​ ​ (Amounts in millions) ​ ​ (Amounts in millions) ​ ​ ​ Customer ​ % of Total ​ ​ Customer ​ % of Total ​ ​ Customer ​ % of Total ​ ​ Customer ​ % of Total ​ ​ Revenues Revenues ​ Revenues Revenues ​ Revenues Revenues ​ Revenues Revenues ​ ​ (Amounts in millions) ​ Customer A ​ $ 0.4 ​ 3 % ​ $ 2.3 ​ 13 % ​ $ 1.0 ​ 2 % ​ $ 4.1 ​ 8 % ​ There was no customer with 10% or more of accounts receivable as of June 30, 2024 or September 30, 2023. A customer not listed above had a balance of $ 8.0 million, or 64 %, of financing receivables, net and $ 7.4 million, or 65 %, as of June 30, 2024 and September 30, 2023, respectively. A customer not listed above had a balance of $ 1.6 million, or 13 %, of financing receivables, net and $ 2.5 million, or 22 %, as of June 30, 2024 and September 30, 2023, respectively. A customer not listed above had a balance of $ 1.3 million, or 10 %, of financing receivables and $ 1.5 million, or 13 %, as of June 30, 2024 and September 30, 2023, respectively. There was no other customer with 10% or more of financing receivables, net as of June 30, 2024 or September 30, 2023. 27 Table of Contents ​ 15. Dividend On December 12, 2023 , the Company’s board of directors declared a cash dividend of $ 0.020 per share outstanding which was paid on January 9, 2024 to shareholders of record as of December 22, 2023 , the record date. On February 14, 2024 , the Company’s board of directors declared a cash dividend of $ 0.025 per share outstanding which was paid on March 8, 2024 to shareholders of record as of February 26, 2024 , the record date. On February 21, 2024, the Company announced its Board of Directors approved and declared a two -for-one stock split to be effected in the form of a 100 % stock dividend. The stock dividend was paid on March 20, 2024 to shareholders of record as of the close of business on March 6, 2024 . Cash dividend amounts per share in this note are adjusted retroactively for this stock split. On May 8, 2024 , the Company’s board of directors declared a cash dividend of $ 0.030 per share outstanding which was paid on June 12, 2024 to shareholders of record as of May 24, 2024 , the record date. ​ ​