Note

– Commitments and Contingencies

Operating Leases

Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments

not

yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments

not

yet paid, the Company uses the weighted average interest rate on its Credit Facility. Long-term leases typically contain rent escalations over the lease term. The Company recognizes expense for these leases on a straight-line basis over the lease term.

The Company has elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than

one

month and

months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of

months or less, that do

not

include an option to purchase the underlying asset that we are reasonably certain to exercise, are

not

recorded on the balance sheet.

The Company elected the expedient to account for lease and non-lease components as a single component for our entire population of operating lease assets.

As of

March

31, 2021,

the Company leases facilities and certain equipment under lease commitments that expire throu

June

2026.

uture minimum lease commitments for these operating lease commitments are as follows (in thousands):

Twelve Months Ending March 31,	Operating Leases			Finance Leases
2022	$	948		$	99
2023		709			20
2024		645			14
2025		399			6
2026		356			-
Thereafter		90			-
Total future lease commitments		3,147			139
Impact of discounting		(314	)		(35	)
Discounted value of lease obligations	$	2,833		$	104

The following table summarizes the components of our gross operating lease costs incurred during the

three

months ended

March 31, 2021

and

2020

(in thousands):

	Three Months Ended March 31,
	2021		2020
Operating lease expense:
Current lease cost	$	14	$	291
Long-term lease cost		257		20
Total operating lease cost	$	271	$	311
Finance lease expense:
Amortization of right-of-use assets	$	25	$	58
Interest on lease liabilities		16		7
Total lease cost	$	41	$	65

Our weighted-average lease term and discount rate used during the

three

months ended

March 31, 2021

and

2020

are as follows:

	Three Month Ended March 31,
	2021			2020
Operating
Weighted-average lease term (years)		3.90			4.35
Weighted-average discount rate		6.08	%		6.08	%
Finance
Weighted-average lease term (years)		1.91			1.91
Weighted-average discount rate		5.92	%		6.10	%

Self-Insurance

June 2015,

the Company became self-insured under its Employee Group Medical Plan, and currently is responsible to pay the

first

$50,000

in medical costs per indiv

idual participant for claims incurred in the calendar year up to a maximum of approximately

$1.8

million per year in the aggregate based on enrollment.

The Company had an accrued liability of approximately $

108,000

and

$150,000

as of

March

31, 2021

and

December 31, 2020,

respectively, for insurance claims that it anticipates paying in the future related to claims that occurred prior

December 31, 2020.

Effective

January 1, 2021,

the Company moved onto a traditional Employee Group Medical Plan and was

longer self-insured for claims occurring after that date.

Effective

April 1, 2015,

the Company had entered into a workers' compensation and employer's liability insurance policy with a term through

March 31, 2018.

Under the terms of the policy, the Company was required to pay premiums in addition to a portion of the cost of any claims made by our employees, up to a maximum of approximately

$1.8

million over the term of the policy (an amount that was variable with changes in annualized compensation amounts). As of

March 31, 2021,

a former employee of ours had an open claim relating to injuries sustained while in the course of employment, and the projected maximum cost of the policy as determined by the insurance carrier included estimated claim costs that have

not

yet been paid or incurred in connection with the claim. During the year ended

December 31, 2017,

our insurance carrier formally denied the workers' compensation claim and has moved to close the claim entirely. Per the terms of our insurance policy, through

March 31, 2021,

we had paid in approximately

$1.8

million of the projected maximum plan cost of

$1.8

million, and had recorded approximately

$1.6

million as expense over the term of the policy. In

September 2020,

the claim was officially denied by the Kansas Division of Workers Compensation Judicial Unit. As of

March 31, 2021,

appeal has been made and the Company expects to collect the remaining

$189,000

on deposit with the underwriter. Effective

April 1, 2018,

we entered into a new workers' compensation policy with a fixed premium amount determined annually, and therefore are

longer partially self-insured for workers' compensation and employer's liability.