N.	Lease Liabilities

The Company leases certain office and warehouse space, as well as production and office equipment.

The Company determines if an arrangement is a lease at contract inception. The lease term begins upon lease commencement, which is when the Company takes possession of the asset, and

may

include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. As its lease agreements typically do

not

provide an implicit rate, the Company primarily uses an incremental borrowing rate based upon the information available at lease commencement. In determining the incremental borrowing rate, the Company considers its current borrowing rate, the term of the lease, and the economic environments where the lease activity is concentrated.

The components of lease expense were as follows:

	For the Quarter Ended						For the Two Quarters Ended
	December 27, 2019			December 28, 2018			December 27, 2019			December 28, 2018
Finance lease cost:
Amortization of right-of-use assets	$	43		$	1		$	79		$	1
Interest on lease liabilities		13			-			25			-
Operating lease cost		815			850			1,596			1,730
Short-term lease cost		9			12			26			22
Variable lease cost		8			(3	)		24			5
Total lease cost		888			860			1,750			1,758
Less: Sublease income		(54	)		(1	)		(107	)		(17	)
Net lease cost	$	834		$	859		$	1,643		$	1,741

Other information related to leases was as follows:

	For the Quarter Ended				For the Two Quarters Ended
	December 27, 2019		December 28, 2018		December 27, 2019			December 28, 2018
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	805	$	850	$	1,584		$	1,725
Operating cash flows from finance leases		38		1		68			2
Financing cash flows from finance leases		13		-		25			-
Right-of-use-assets obtained in exchange for lease obligations:
Operating leases		2,073		125		2,424			12,252
Finance leases		53		-		277			-
Weighted average remaining lease term (years):
Operating leases						11.0			11.2
Finance lease						4.4			3.5
Weighted average discount rate:
Operating leases						7.4	%		7.7	%
Finance leases						6.9	%		4.0	%

Approximate future minimum rental commitments under non-cancellable leases as of

December 27, 2019

were as follows:

	Operating Leases			Finance Leases
2020	$	1,553		$	103
2021		2,598			206
2022		2,096			206
2023		1,965			198
2024		1,792			166
Thereafter		12,455			8
Total future lease payments		22,459			887
Less: Amount representing interest		(7,270	)		(123	)
Present value of future payments	$	15,189		$	764

The following table provides a summary of leases recorded on the consolidated balance sheet.

	Balance Sheet Location	December 27, 2019		June 30, 2019
Lease Assets
Operating lease right-of-use assets	Property, plant and equipment, net	$	15,180	$	14,138
Finance lease right-of-use assets	Property, plant and equipment, net		746		545

Lease Liabilities
Operating lease liabilities	Accrued liabilites	$	1,936	$	1,933
Operating lease liabilities	Lease obligations		13,253		12,197
Finance lease liabilities	Accrued liabilites		167		104
Finance lease liabilities	Lease obligations		597		449