Note

10:

Leases

The Company’s leases are recorded under ASC Topic

842,

“Leases”. The Company examines its contracts to determine whether they are or contain a lease. A contract with a lease is further examined to determine whether the lease is a short-term, operating or finance lease. Right-of-use assets and lease liabilities are recognized for operating and finance leases. As permitted by ASC Topic

842,

the Company elected

not

to recognize right-of-use assets and lease liabilities for short-term leases, defined by the standard as leases with terms of

months or less. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease.

Lease payments

Lease payments for short-term leases are recognized as lease expense on a straight-line basis over the lease term, or for variable lease payments, in the period in which the obligation was incurred. Payments for leases with terms longer than

months are included in the determination of the lease liability. Payments

may

be fixed for the term of the lease or variable. If the lease agreement provides a known escalator, such as a specified percentage increase per year or a stated increase at a specified time, the variable payment is included in the cash flows used to determine the lease liability. If the variable payment is based upon an unknown escalator, such as the consumer price index at a future date, the increase is

not

included in the cash flows used to determine the lease liability. The Company elected the practical expedient provided by Topic

842

not

to allocate consideration in a contract between lease and non-lease components

Two of the Company’s leases provide known escalators that are included in the determination of the lease liability. One lease has an annual escalator based on the consumer price index-urban ("CPI-U"). The remaining leases do

not

have variable payments during the term of the lease.

Options to Extend

, Residual Value Guarantees, and Restrictions and Covenants

Of the Company’s

six

operating leases,

three

leases offer the option to extend the lease term. Each of the

three

leases provides

two

options of

five

years each. For

one

of the leases, the Company is reasonably certain it will exercise

one

option of

five

years and has included the additional time and lease payments in the calculation of the lease liability. The lease agreement provides that the lease payment will increase at the exercise date based on the CPI-U. Because the CPI-U at the exercise date is unknown, the increase is

not

included in the cash flows determining the lease liability.

None

of the Company’s leases provide for residual value guarantees and

none

provide restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The following tables present information about leases:

	March 31, 2020			December 31, 2019
Lease liability	$	2,214		$	2,286
Right-of-use asset	$	2,202		$	2,277
Weighted average remaining lease term (in years)		6.69			6.90
Weighted average discount rate		3.03	%		3.02	%

	For the Three Months Ended March 31,
	2020		2019
Lease Expense
Operating lease expense	$	93	$	59
Short-term lease expense		1		39
Total lease expense	$	94	$	98

Cash paid for amounts included in lease liabilities	$	91	$	56
Right-of-use assets obtained in exchange for operating lease liabilities commencing during the period	$	---	$	1,553

The following table presents a maturity schedule of undiscounted cash flows that contribute to the lease liability:

Undiscounted Cash Flow the Period	As of March 31, 20 20
Nine months ending December 31, 2020	$	264
Twelve months ending December 31, 2021		345
Twelve months ending December 31, 2022		349
Twelve months ending December 31, 2023		351
Twelve months ending December 31, 2024		333
Twelve months ending December 31, 2025		244
Thereafter		608
Total undiscounted cash flows	$	2,494
Less: discount		(280	)
Lease liability	$	2,214

The contracts in which the Company is lessee are with parties external to the Company and

not

related parties. The Company has a small lease relationship with a director in which the Company is lessor.