Note

–

Commitments

We adopted ASU

2016

November 1, 2019,

and elected the practical expedient modified retrospective method whereby the lease qualification and classification was carried over from the accounting for leases under ASC

840.

The lease contracts for the corporate headquarters, RF Connector division manufacturing facilities, Cables Unlimited, Rel-Tech, and C Enterprises commenced prior to the effective date of

November 1, 2019,

and were determined to be operating leases. All other new contracts have been assessed for the existence of a lease and for the proper classification into operating leases. The rate implicit in the leases was undeterminable, and therefore, the discount rate used in all lease contracts is our incremental borrowing rate.

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of

year to

years, some of which include options to extend the leases for up to

years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, whom we make rent payments totaling

$14,000

per month.

We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the period ending

April 30, 2020

were as follows (in thousands):

	Three Months Ended		Six Months Ended
	April 30, 2020		April 30, 2020
Operating lease cost	$	250	$	504

Other information related to leases was as follows (in thousands):

	April 30, 2020
Supplemental Cash Flows Information
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	1,904

Weighted Average Remaining Lease Term
Operating leases (in months)		30.31

Weighted Average Discount Rate
Operating leases		3.54	%

Future minimum lease payments under non-cancellable leases as of

April 30, 2020

were as follows:

Year ended October 31,	Operating Leases

2020 (excluding six months ended April 30, 2020)	$	507
2021		919
2022		532
2023		166
2024		-
Thereafter		-
Total future minimum lease payments		2,124
Less imputed interest		(124	)
Total	$	2,000

Reported as of April 30, 2020	Operating Leases
Other current liabilities	$	977
Operating lease liabilities		1,023
Finance lease liabilities		-
Total	$	2,000

As of

April 30, 2020,

operating lease ROU asset was

$1.9

million and operating lease liability totaled

$2.0

million, of which

$977,000

is classified as current. There were

finance leases as of

April 30, 2020.