Accounts payable and other noncurrent liabilities

9 Months Ended

Jun. 30, 2022

Accounts payable and other noncurrent liabilities

Accounts payable and other noncurrent liabilities

9.            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 6, “Accounts and Long-Term Receivable” for further information related to the multi-year agreements with customers.

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. The imputed interest rate for the agreements was determined to be 5.0%. 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, 2022 and 2021 was $57 thousand and $92 thousand, respectively. Interest expense related to these agreements for the nine months ended June 30, 2022 and 2021 was $203 thousand and $121 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 10, “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, 2022		June 30, 2021
	(Amounts in thousands)
Current	$	1,758	$	1,468
Less: discount		203		246
Accounts payable and accrued expenses	$	1,555	$	1,222
Noncurrent	$	3,226	$	4,403
Less: discount		177		353
Other noncurrent liabilities	$	3,049	$	4,050

The Company had a total of approximately $6.5 million due to one of these vendors as of June 30, 2022. This is approximately 38% of Accounts payable and other noncurrent liabilities. 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.