10. Operating Leases:

As of December 28, 2019, the Company leases its Minnesota corporate headquarters in a facility with an operating lease that expires in December 2029 as well as satellite office space in California with an operating lease that expires in August 2022. Our leases include both lease (fixed payments including rent) and non-lease components (common area or other maintenance costs and taxes) which are accounted for as a single lease component as we have elected the practical expedient to group lease and non-lease components for all leases. The corporate headquarters lease provides us the option to extend the lease for two additional five year periods. The California lease provides us an option to extend the lease for an additional three year period. The lease renewal options are at our sole discretion; therefore, the renewals to extend the lease term are not included in our right of use assets and lease liabilities as they are not reasonably certain of exercise. The weighted average remaining lease term for these leases is 9.9 years and the weighted average discount rate is 5.5%. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company recognized $1,358,000, $1,235,000 and $1,102,000 of rent expense for the periods ended December 28, 2019, December 29, 2018 and December 30, 2017, respectively.

Maturities of operating lease liabilities is as follows as of December 28, 2019:


Operating Lease Liabilities expected to be recognized in	Amount
2020	$	704,300
2021		783,600
2022		784,400
2023		763,300
2024		784,400
Thereafter		4,258,600
Total lease payments		8,078,600
Less imputed interest		(1,863,100)
Present value of lease liabilities	$	6,215,500

Of the $6.2 million operating lease liability outstanding at December 28, 2019, $0.4 million is included in Accrued liabilities in the Current liabilities section of the Consolidated Balance Sheets.

For leases that contain predetermined fixed escalations of the minimum rent, we recognize the related rent expense on a straight-line basis from the date we take possession of the property to the end of the initial lease term. We record any difference between the straight-line rent amounts and amounts payable under the leases as an adjustment to the amortization of the operating lease right of use assets and operating lease liabilities.

Cash or lease incentives received upon entering into certain leases (“tenant allowances”) are recognized on a straight-line basis as a reduction to rent from the date we take possession of the property through the end of the initial lease term. In 2019, we recorded a $2.1 million tenant allowance for non-cash landlord leasehold improvements received as a reduction to the operating lease right of use asset. The reduction in rent also causes a reduction in the amortization of the operating lease right of use asset through the end of the initial lease term.

The Company’s policy for leases with a term of twelve months or less is to exclude these short-term leases from our right of use assets and lease liabilities.

Supplemental cash flow information related to our operating leases is as follows for the period ended December 28, 2019:


	Year Ended
	December 28, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow outflow from operating leases	$	493,900

The following disclosures for the year ended December 29, 2018 were made in accordance with the accounting guidance for operating leases in effect at that time.

As of December 29, 2018 minimum rental commitments under noncancelable operating leases, exclusive of maintenance, insurance, taxes and other expenses, were as follows:


2019	$	503,700
2020		762,500
2021		783,600
2022		784,400
2023		763,300
Thereafter		5,042,900
Total	$	8,640,400

At December 29, 2018 total deferred rent included in our consolidated balance sheets was $0.3 million of which $0.2 million was included in other liabilities.