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

one

year to

three

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

five

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, to 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

October 31, 2020

were as follows (in thousands):

	Fiscal Year Ended
	October 31, 2020
Operating lease cost	$	1,001
Short-term lease cost		1

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

	October 31, 2020
Supplemental Cash Flows Information
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	1,421

Weighted Average Remaining Lease Term
Operating leases (in months)		22.94

Weighted Average Discount Rate
Operating leases		3.54	%

Future minimum lease payments under non-cancellable leases as of

October 31, 2020

were as follows (in thousands):

Year ended October 31,	Operating Leases
2021	$	920
2022		532
2023		166
2024		-
Thereafter		-
Total future minimum lease payments		1,618
Less imputed interest		(109	)
Total	$	1,509

Reported as of October 31, 2020	Operating Leases
Other current liabilities	$	874
Operating lease liabilities		635
Finance lease liabilities		-
Total	$	1,509

As of

October 31, 2020,

operating lease ROU asset was

$1.4

million and operating lease liability totaled

$1.5

million, of which

$874,000

is classified as current. There were

finance leases as of

October 31, 2020.