Accounts and Long-Term Receivable

9 Months Ended

Jun. 30, 2022

Accounts and Long-Term Receivable

Accounts and Long-Term Receivable

6.            Accounts and Long-Term Receivable

Within Accounts receivable and Long-term receivable there are amounts due reflecting sales whose payment terms exceed one year. This financing is separate from agreements with a leasing component, see Note 8, “Leases” for financing through leases. These receivables are included in Accounts receivable and Long-term receivable in the amount of $4.9 million and $5.3 million as of June 30, 2022. These receivables are included in Accounts receivable and Long-term receivable in the amount of $6.5 million and $7.5 million as of September 30, 2021, respectively.

The receivables with a payment term exceeding one year carry an average weighted interest rate of 4.9%, which reflects the approximate interest rate consistent with a separate financing transaction with the customer at the inception of the agreement.

There is not an allowance for credit losses nor impairments for Accounts and Long-term receivables with a contractual maturity of over one year. All accounts have no past amounts due as of June 30, 2022 or September 30, 2021. There was no activity in the allowance for credit losses of these receivables for the nine months ended June 30, 2022 and 2021, respectively. All these agreements are looked at as one portfolio in determining credit losses. There are various factors that are considered in extending a customer payment terms longer than one year including payment history, economic conditions, and capacity to pay. The credit quality of customers is monitored by payment activity. The unearned income represents a rate similar to market at the inception of the agreement.

There was one new agreement effective in the first quarter of fiscal year 2022 causing an increase in Accounts and Long-term receivable. This agreement included approximately $0.5 million of payments to be received over the next 2 years from the effective date of the agreement. The net revenue from this transaction was approximately $0.1 million during the first quarter of fiscal year 2022.

There was one new agreement effective in the third quarter of fiscal year 2022 causing an increase in Accounts and Long-term receivable. This agreement included approximately $0.8 million of payments to be received over the next

3 years from the effective date of the agreement. The net revenue from this transaction was approximately $0.3 million during the third quarter of fiscal year 2022.

The amount of interest income earned from sales whose payment terms exceed one year for the three months ended June 30, 2022 and 2021 was $108 thousand and $169 thousand, respectively. The amount of interest income earned from sales whose payment terms exceed one year for the nine months ended June 30, 2022 and 2021 was $369 thousand and $387 thousand, respectively. Interest income from these agreements is recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations.

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.

Contractual maturities of outstanding financing with an original contractual maturity over one year are as follows:

Fiscal year ending September 30:	(Amounts in thousands)
2022	$	2,182
2023		5,108
2024		1,839
2025		1,560
Total payments		10,689
Less: unearned interest income		(454)
Total, net of unearned interest income	$	10,235