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Accounts payable and other noncurrent liabilities

3 Months Ended

Dec. 31, 2021

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 both 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 December 31, 2021 was $74 thousand. There was no interest expense during the three months ended December 31, 2020 due to these agreements being effective in the second quarter of fiscal year 2021.

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:


	December 31, 2021
	(Amounts in thousands)
Current	$	1,758
Less: discount		242
Accounts payable and accrued expenses	$	1,516

Noncurrent	$	4,773
Less: discount		268
Other noncurrent liabilities	$	4,505

The Company had a total of approximately $9.4 million due to one of these vendors as of December 31, 2021. This is approximately 49% 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.