Note 12 - Commitments

We currently lease our corporate headquarters and RF connector and cable assembly manufacturing facilities in San Diego, California. At that location, we lease three buildings with a total of approximately 21,908 square feet of office, warehouse and manufacturing space, that houses our corporate administration, sales and marketing, and engineering departments. The buildings also are used for production and warehousing by the RF Connector division. The term of the lease expires on July 31, 2022, and the rental payments under the lease currently are $26,176 per month. The San Diego lease also requires the payment of our pro rata share of real estate taxes and insurance, maintenance and other operating expenses related to the facilities.

(i)

The Cables Unlimited division leases its 12,000 square foot manufacturing facility in Yaphank, New York, from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited. Cables Unlimited’s monthly rent expense under the lease is $13,000 per month, plus payments of all utilities, janitorial expenses, routine maintenance costs and costs of insurance for Cables Unlimited’s business operations and equipment. The current lease expires on June 30, 2021.

(ii)

The Rel-Tech Electronic division leases an approximately 13,750 square feet located in Milford, Connecticut. The old lease expired in August 2019. On September 1, 2019, Rel-Tech extended its lease term for an additional two years to August 31, 2021, with escalating rent payments over the two years. The net monthly rent payments currently are $8,969 per month.

(iii)

On November 1, 2018, the Cables Unlimited division entered into a lease agreement with 100 Bellport Avenue, LLC, as landlord, for approximately 7,500 square feet located in Yaphank, New York, with a monthly rent expense of $5,625. On February 1, 2019, Cables Unlimited entered into an amendment to this lease to increase the leased space by an additional 5,000 square feet and increase the monthly rent by $3,750, resulting in a total rent expense of $9,375 per month. The lease expired on October 31, 2019 and was converted to a month-to-month lease at the same monthly rental amount.

(iv)

The C Enterprises division leases approximately 24,014 square feet of office, warehouse, and manufacturing space located in Vista, California. The term of the lease expires on June 30, 2023, and the rental payments under the lease currently are $18,491 per month, plus payments of real estate taxes, management fee, property insurance and other operating expenses related to the facilities.

(v)

The Schrofftech facilities, consisting of two buildings for a total of 10,700 square feet, are leased by RF Industries, Ltd. under two leases that were renewed effective February 1, 2020 for two years expiring January 31, 2022. The aggregate monthly rental payment under the new leases currently is $6,525 per month.

(vi)

On February 15, 2020, the RF Connector and Cable Assembly division entered into a lease for approximately 625 square feet located in Towson, Maryland and expires on February 28, 2022. The rental payments under the lease currently are $1,016 per month, plus estimated monthly payments of $143 for common area maintenance fees.

Additionally, on January 1, 2020, the Cables Unlimited division began making rental payments for various storage units located at the Yaphank facility. Monthly rental payments are approximately $1,000 and made to K&K Unlimited, the company owned by Darren Clark, former owner and current President of Cables Unlimited. Upon inception of this arrangement, it was determined that there was no physically distinct identified asset and therefore, the arrangement does not constitute a lease. The rental payments, however, remain as rental expense.

For the three months ended January 31, 2020, the aggregate monthly rental payments for all of our facilities was approximately $83,000 per month, plus utilities, maintenance and insurance.

Upon adoption of ASU 2016-02 on November 1, 2019, we adopted the practical expedient 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 had commenced prior to the effective date of November 1, 2019. These contracts, therefore, were determined to contain 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 also have other operating leases for certain equipment. The components of our operating lease expenses were as follows (in thousands):


	Three Months Ended
	January 31, 2020
Operating lease cost	$	254

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


	Three Months Ended
	January 31, 2020
Supplemental Cash Flows Information
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	2,024

Weighted Average Remaining Lease Term
Operating leases		30.49	months

Weighted Average Discount Rate
Operating leases		3.54	%

Future minimum lease payments under non-cancellable leases as of January 31, 2020 were as follows:


Year ended October 31,	Operating Leases

2020 (excluding three months ended January 31, 2020)	$	719
2021		854
2022		507
2023		166
2024		—
Thereafter		—
Total future minimum lease payments		2,246
Less imputed interest		(122)
Total	$	2,124


Reported as of January 31, 2020	Operating Leases
Other current liabilities	$	933
Operating lease liabilities		1,191
Finance lease liabilities		—
Total	$	2,124

As of January 31, 2020, operating lease ROU asset was $2.0 million and operating lease liability totaled $2.1 million, of which $933,000 is classified as current. There were no finance leases as of January 31, 2020. We have additional operating leases that have not yet commenced as of January 31, 2020 of $178,000. These operating leases will commence in February 2020 with lease terms of 24 months.