NOTE 12 — COMMITMENTS AND CONTINGENCIES

Torotel is obligated under several capital leases for the lease of various information technology equipment that expire at various dates during the next three years. All of these leases are non-cancellable and are presented in the accompanying consolidated financial statements as long-term debt. At January 31, 2019 and April 30, 2018, the gross amount of equipment under capital lease was $225,000. Related accumulated depreciation recorded under capital lease were $65,000 and $48,000, respectively.

Amortization of assets held under capital lease is included with depreciation expense.

On August 30, 2017, Torotel entered into a Third Amendment (“Amendment”) to the lease for its manufacturing facility located in Olathe, Kansas. The Amendment reconfigured the Suite 520 entry design, and granted Torotel a $37,500 lump sum net base rent abatement, applied at $18,750 per month from September 1, 2017 through October 31, 2017. The Amendment also reduced the letter of credit requirement from $350,000 to $300,000. The Amendment did not change the term of the lease, which continues through December 31, 2026 (subject to early termination options and two separate options to extend the lease term for additional five year periods).

Future minimum lease payments on the amended operating lease and future minimum capital lease payments as of January 31, 2019 are as follows:


	Capital		Operating
Fiscal Years Ending April 30,	Leases		Leases
2019	$	15,000	$	110,000
2020		75,000		415,000
2021		27,000		410,000
2022		—		430,000
2023		—		442,000
2024		—		452,000
2025		—		456,000
2026		—		467,000
2027		—		350,000
		117,000		3,532,000
Less: Amounts representing interest		(5,000)		—
Total	$	112,000	$	3,532,000