The Company leases office space for its manufacturing, sales and service operations, vehicles and office equipment under operating leases. All of the Company’s leases are operating leases.

In accordance with Accounting Standard Codification Topic 842 (“ASC 842”), the Company has elected not to apply ASC 842 to arrangements with lease terms less than 12 months.

Operating lease right-of-use assets and liabilities are reflected within the captions “Right-of-use assets”, “Short-term operating lease liability” and “Long-term operating lease liability”, respectively, on the Consolidated Balance Sheet. Right-of-use assets, Short-term operating lease liability and Long-term operating lease liability were $3,668,000, $475,000 and $3,245,000 as of June 30, 2020, respectively.

When readily determinable, the discount rate used to calculate the lease liability is the rate implicit in the lease. Otherwise the Company applied judgement and used its incremental borrowing rate based on the information available at lease commencement.

Some of the leases include one or more renewal or termination options at the Company’s discretion, which are included in the determination of the lease term if the Company is reasonably certain to exercise the option.

There were no Right-of-use leased assets obtained in exchange for new operating lease liabilities for fiscal year 2020.

Lease expense, recorded in the cost of sales and selling, general & administrative expense categories in the Consolidated Statement of Operations total $704,000 the fiscal year ended June 30, 2020.

Cash paid for operating leases was $737,000 for fiscal year 2020 and is included in the line changes in other assets and liabilities in the operating cash flows.

Years Ending June 30,	Minimum Rentals
2021	$	679
2022		484
2023		372
2024		354
2025		314
2026 and beyond		2,780
	$	4,983
Less: Imputed interest		(1,263	)
Present value of operating lease liabilities	$	3,720

The weighted average remaining lease term for operating leases was 7 years and the weighted average discount rate was 6.1% as of June 30, 2020.

The following is a summary, as of June 30, 2019, of the future minimum annual lease payments required under our operating leases having initial or remaining non-cancelable terms in excess of one year (in thousands):

Years Ending June 30,	Minimum Rentals
2020	$	834
2021		711
2022		492
2023		398
2024 and beyond		1,888
	$	4,323