Note 3 - Commitments

6 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Commitments Disclosure [Text Block]

3. Commitments

Purchase Commitments

The Company enters into unconditional purchase commitments on a regular basis for the supply of Mediasite product for hardware inventory, as well as services to support our hosting environment, which are not recorded on the Company's condensed consolidated balance sheet. At March 31, 2023, the Company had an obligation to purchase $1.8 million of Mediasite product and $315 thousand of services during fiscal 2023, $500 thousand of services during fiscal 2024, and $417 thousand of services during fiscal 2025.

Leases

The Company has operating leases for corporate office space with various expiration dates. Our leases have remaining lease terms of up to ten years, some of which include escalation clauses, renewal options for up to twelve years or termination options within one year.

We determine if an arrangement is a lease upon contract inception. The Company has both operating and finance leases. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments according to the arrangement.

A contract contains a lease if the contract conveys the right to control the use of the identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms.

Lease right-of-use assets and lease liabilities are recognized as of the commencement date based on the present value of the lease payments over the lease term. The lease right-of use asset is reduced for tenant incentives and includes any initial direct costs incurred. We use the implicit interest rate when it is readily determinable. Otherwise, the present value of future minimum lease payments is determined using the Company's incremental borrowing rate. The incremental borrowing rate is based on the interest rate of the Company's most recent borrowing.

The lease term we use for the valuation of our right-of-use assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. Lease expense is recognized on a straight-line basis over the expected lease term for operating leases. Amortization expense of the right-of-use asset for finance leases is recognized on a straight-line basis over the lease term and interest expense for finance leases is recognized based on the incremental interest rate. As of March 31, 2023, three unexercised renewal options for operating leases have been recognized into the respective ROU asset and lease liability.

Right-of-use assets and lease liabilities are recognized for our leases. Right-of-use assets under finance leases are included in property and equipment on the condensed consolidated balance sheets and have a net carrying value of $19 thousand at September 30, 2022, and$16 thousand at March 31, 2023.

We have operating lease arrangements with lease and non-lease components. The non-lease components in our arrangements are not significant when compared to the lease components. For all operating leases, we account for the lease and non-lease components as a single component. 

As of  March 31, 2023, future maturities of operating and finance lease liabilities for the fiscal years ended September 30 are as follows (in thousands):

	Operating Leases			Finance Leases
2023 (remaining)	$	619		$	5
2024		782			8
2025		112			4
2026		91			3
2027		57			—
Thereafter		40			—
Total		1,701			20
Less: imputed interest		(38	)		(1	)
Total	$	1,663		$	19

Supplemental information related to leases is as follows (in thousands, except lease term and discount rate):

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2023		2022		2023		2022
Operating lease costs	$	311	$	297	$	620	$	764
Variable operating lease costs		—		4		—		21
Total operating lease cost	$	311	$	301	$	620	$	785
Finance lease cost:
Amortization of right-of-use assets	$	2	$	19	$	3	$	40
Interest on lease liabilities		—		1		—		3
Total finance lease cost	$	2	$	20	$	3	$	43

Variable lease costs include operating costs for U.S. office lease based on square footage and Consumer Price Index ("CPI") rent escalation and related VAT for office lease in the Netherlands, and COVID-19 rent credit.

Supplemental cash flow information related to operating and finance leases were as follows (in thousands):

	Six Months Ended March 31, 2023		Six Months Ended March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases	$	605	$	696
Operating cash outflows for finance leases		—		3
Financing cash outflows for finance leases		7		43

Other information related to leases was as follows:

	March 31, 2023			March 31, 2022
Weighted average remaining lease term (in years)
Operating leases		2.2			2.4
Finance leases		2.6			1.9
Weighted average discount rate
Operating leases		2.41	%		2.10	%
Finance leases		2.33	%		5.59	%