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Note 8 - Leases

9 Months Ended

Sep. 30, 2020

(8) Leases

The Company has operating and finance leases for offices, manufacturing plants, vehicles and certain office and manufacturing equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the right of use (“ROU”) assets or lease liabilities. These are expensed as incurred and recorded as variable lease expense. The Company determines if an arrangement is a lease at the inception of a contract. Operating and finance lease ROU assets and operating and finance lease liabilities are stated separately in the condensed consolidated balance sheet.

ROU assets represent the Company's right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the net present value of fixed lease payments over the lease term. The Company's lease term includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. ROU assets are also adjusted for any deferred or accrued rent. As the Company's leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

	Nine Months Ended
	September 30,
	($ in thousands)
	2020			2019
Lease Cost:
Finance lease cost:
Amortization of right of use assets	$	7		$	-
Interest on lease liabilities		1			-
Operating lease cost		907			918
Variable lease cost		164			167
Short-term lease cost		21			20
Total lease cost	$	1,100		$	1,105

Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	908		$	905
Financing cash flows from finance leases		7			-
ROU assets obtained in exchange for finance lease obligations		110			-

Weighted-average remaining lease term (years):
Finance		6.58			-
Operating		2.02			2.92
Weighted-average discount rate:
Finance		2.26	%		-
Operating		4.42	%		4.45	%

The aggregate future lease payments for leases as of September 30, 2020 are as follows
(in thousands):

	Finance			Operating
Remainder of 2020	$	4		$	304
2021		17			1,132
2022		17			959
2023		17			36
2024		17			-
Thereafter		40			-
Total lease payments		112			2,431
Less: Interest		(8	)		(107	)
Present value of lease liabilities	$	104		$	2,324

The aggregate future lease payments as of December 31, 2019 are as follows (in thousands):

	Operating
2020	$	1,173
2021		1,118
2022		957
2023		36
Total lease payments		3,284
Less: Interest		(194	)
Present value of lease liabilities	$	3,090