NOTE

LEASES

We have operating leases for certain manufacturing sites, office space, and equipment. Most leases include the option to renew, with renewal terms that can extend the lease term from

one

five

years or more. Right-of-use lease assets and lease liabilities are recognized at the commencement date based on the present value of the remaining lease payments over the lease term which includes renewal periods we are reasonably certain to exercise. Our leases do

not

contain any material residual value guarantees or material restrictive covenants. At

December 31, 2020,

we do

not

have material lease commitments that have

not

commenced.

We have financing leases for certain property and equipment used in the normal course of business.

The components of lease expense were as follows:

	December 31,		December 31,
Lease Cost	2020		2019
Operating lease cost	$	1,643	$	1,014
Finance lease interest cost		102		69
Finance lease amortization expense		637		306
Total lease cost	$	2,382	$	1,389

Supplemental balance sheet information related to leases was as follows:

	Balance Sheet Location	December 31, 2020		December 31, 2019
Assets
Operating lease assets	Operating lease assets	$	8,998	$	4,827
Finance lease assets	Property, Plant and Equipment		2,330		2,447
Total leased assets		$	11,328	$	7,274

Liabilities
Current
Current operating lease liabilities	Current Portion of Operating Lease Obligations	$	688	$	858
Current finance lease liabilities	Current Portion of Finance Lease Obligations		660		557
Noncurrent
Long-term operating lease liabilities	Long Term Operating Lease Liabilities, Net		8,889		4,366
Long term finance lease liabilities	Long Term Finance Lease Obligations, Net		1,152		1,451
Total lease liabilities		$	11,389	$	7,232

Supplemental cash flow information related to leases was as follows:

	December 31,		December 31,
	2020		2019
Operating leases
Cash paid for amounts included in the measurement of lease liabilities	$	1,058	$	777
Right-of-use assets obtained in exchange for lease obligations	$	4,999	$	5,731

The right-of use-assets obtained in exchange in for lease obligations in the year ended

December 31, 2020

was largely due to the sale leaseback transaction we completed relating to the manufacturing facilities in Bemidji and Mankato, Minnesota.

Maturities of lease liabilities were as follows:

	Operating Leases			Finance Leases			Total
2021	$	1,388		$	738		$	2,126
2022		1,403			587			1,990
2023		1,406			333			1,739
2024		1,374			280			1,654
2025		1,205			29			1,234
Thereafter		8,282			-			8,282
Total lease payments	$	15,058		$	1,967		$	17,025
Less: Interest		(5,481	)		(155	)		(5,636	)
Present value of lease liabilities	$	9,577		$	1,812		$	11,389

The lease term and discount rate at

December 31, 2020

were as follows:

Weighted-average remaining lease term (years)
Operating leases	10.7
Finance leases	3.1
Weighted-average discount rate
Operating leases	7.5	%
Finance leases	5.2	%