Note 2 - Commitments

12 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Commitments Disclosure [Text Block]

2. Commitments

Leases

The Company has operating leases for corporate office space with various expiration dates. Our leases have remaining lease terms of up to three 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 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.

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 consolidated balance sheets and have a net carrying value of $19 thousand at September 30, 2022 and $90 thousand at September 30, 2021.

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 September 30, 2022, 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	$	1,182		$	10
2024		746			8
2025		81			4
2026		75			4
2027		59			—
Thereafter		37			—
Total		2,180			26
Less: imputed interest		(58	)		(1	)
Total	$	2,122		$	25

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

	Fiscal Year Ended
	September 30, 2022		September 30, 2021
Operating lease costs	$	1,370	$	1,493
Variable operating lease costs		23		(254	)
Total operating lease cost	$	1,393	$	1,239
Finance lease cost:
Amortization of right-of-use assets	$	69	$	121
Interest on lease liabilities		4		10
Total finance lease cost	$	73	$	131

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. The negative amount for variable operating lease costs for the year ended September 30, 2021, is due to the COVID-19 rent credit the Company received.

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

	Fiscal Year Ended
	September 30, 2022		September 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases	$	1,271	$	1,163
Operating cash outflows for finance leases		4		10
Financing cash outflows for finance leases		75		120

Other information related to leases was as follows:

	September 30, 2022			September 30, 2021
Weighted average remaining lease term (in years)
Operating leases		2.4			2.9
Finance leases		2.9			1.9
Weighted average discount rate
Operating leases		2.30	%		4.05	%
Finance leases		2.65	%		6.41	%

Other 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 Consolidated Balance Sheet. At  September 30, 2022, the Company has an obligation to purchase $3.5 million of Mediasite product and $664 thousand of services during fiscal year 2023, $500 thousand of services during fiscal year 2024, and $417 thousand in services during fiscal 2025.