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 $3,823,000, $500,000 and $3,376,000 as of September 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 the three months ended September 30, 2020.

Lease expense, recorded in the cost of sales and selling, general & administrative expense categories in the Consolidated Statement of Operations total $197,000 for the first quarter of fiscal 2021.

Cash paid for operating leases was $204,000 during the three months ended September 30, 2020 and is included in operating cash flows.

	September 30, 2020
Years Ending June 30,	Lease Payments
2021 (excluding the three months ended September 30, 2020)	$	573
2022		545
2023		424
2024		399
2025		340
After 2025		2,901
Future value of operating lease liabilities	$	5,182
Less: Imputed interest		(1,306	)
Present value of operating lease liabilities	$	3,876

The weighted average remaining lease term for operating leases was 7 years and the weighted average discount rate was 6.2% as of September 30, 2020.