3. LEASES

The Company’s wholesale segment leases certain warehouse facilities, office space, vehicles and office equipment. The Company’s retail segment leases store space in various shopping center complexes. Certain of the warehouse and retail store leases include one or more options to renew or terminate the applicable lease agreement, with the exercise of such options at the Company’s discretion. The Company’s leases do not contain any significant residual value guarantees nor do they impose any significant restrictions or covenants other than those customarily found in similar types of leases.

The operating right-of-use (ROU) lease assets and liabilities recorded on the Company’s consolidated balance sheet consist of fixed lease payments. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term. Additionally, certain leases contain variable payments such as vehicle leases with per-mile charges or retail leases with an additional rent payment based on store performance. These variable payments are expensed as incurred. The Company combines lease components and non-lease components for all asset classes for purposes of recognizing lease assets and liabilities. The Company determines its incremental borrowing rates based on information available at the lease commencement date in calculating the present value of lease payments.

Leases consist of the following:


Assets	Classification	March 2020
Operating	Operating lease right-of-use assets	$	19,689,507

Liabilities
Current:
Operating	Operating lease liabilities	$	5,433,800
Non-current:
Operating	Long-term operating lease liabilities		14,597,065
Total lease liabilities		$	20,030,865

The components of lease costs were as follows:



	Total
THREE MONTHS ENDED MARCH 2020
Operating lease cost	$	1,660,850
Short-term lease cost		83,936
Variable lease cost		79,954
Net lease cost	$	1,824,740



	Total
SIX MONTHS ENDED MARCH 2020
Operating lease cost	$	3,331,624
Short-term lease cost		167,441
Variable lease cost		169,227
Net lease cost	$	3,668,292

Maturities of lease liabilities as of March 2020 were as follows:


	Operating Leases
2020	$	6,124,577
2021		5,236,472
2022		3,882,209
2023		3,222,946
2024		1,873,836
2025 and thereafter		1,505,992
Total lease payments		21,846,032
Less: interest		(1,815,167)
Present value of lease liabilities	$	20,030,865

Weighted-average remaining lease term and weighted-average discount rate information regarding the Company’s leases were as follows:


Lease Term	March 2020
Weighted-average remaining lease term (years):
Operating	4.4
Discount Rate
Weighted-average discount rate:
Operating	4.04	%

Other information regarding the Company’s leases were as follows:


	For the six months ended March 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used by operating leases	$	3,304,184
Lease liabilities arising from obtaining new ROU assets:
Operating leases	$	732,287

Future minimum operating lease payments as of September 2019, as reported in the 2019 Form 10-K under ASC 840, were as follows:


	Operating
Fiscal Year Ending	Leases
2020	$	6,468,837
2021		5,418,617
2022		4,299,261
2023		3,216,671
2024		2,456,810
Thereafter		2,387,618
Total minimum lease payments	$	24,247,814