Note

- Leases

Finance Leases.

2019,

the Company obtained

two

finance leases for a total of CAD

1.1

million (approximately

$0.8

million at the prevailing exchange rates on the transaction dates) to finance vehicle equipment. The interest rates for these finance leases were

8.0%

per annum with monthly principal and interest payments of less than

$0.1

million. These leases mature in

August 2023.

2017,

the Company obtained

three

finance leases for a total of CAD

1.1

million (approximately

$0.8

million at the prevailing exchange rates on the transaction dates) to finance vehicle equipment. The interest rates for these finance leases range from

4.0%

7.8%

per annum with monthly principal and interest payments of less than

$0.1

million. These leases mature between

April

2021

September

2022.

August

2016,

the Company obtained a finance lease for

0.6

million Indian Rupees (approximately

thousand at the prevailing exchange rate on the transaction date) to finance vehicle equipment. The interest rate for this finance lease was

15.6%

per annum with monthly principal and interest payments of less than

thousand. This lease expired in

July

2019.

The Company has several significant operating lease agreements, with lease terms of

one

years, which consist of real estate, vehicles and office equipment leases. These leases do

not

require any contingent rental payments, impose any financial restrictions or contain any residual value guarantees. Certain of the Company's leases include renewal options and escalation clauses; renewal options have

not

been included in the calculation of the lease liabilities and ROU assets as the Company is

not

reasonably certain to exercise the options. Variable expenses generally represent the Company's share of the landlord's operating expenses. The Company does

not

have any arrangements where it acts as a lessor, other than

one

sub-lease arrangement.

July 31, 2020

, the Company had total operating lease liabilities of

$11.9

million and total operating ROU assets of

$10.9

million, which are reflected in the consolidated balance sheet. At

July 31, 2020

, the Company also had total finance lease liabilities of $

0.9

million included in current maturities of long-term debt and long-term debt less current maturities, and total finance ROU assets of $

1.0

million which were included in property plant and equipment, net of accumulated depreciation in the consolidated balance sheet.

Supplemental balance sheet information related to leases is as follows:

Operating and Finance leases:	July 31, 2020			January 31, 2020
Finance leases assets:
Property and Equipment - gross	$	1,659		$	1,696
Accumulated depreciation and amortization		(640	)		(551	)
Property and Equipment - net	$	1,019		$	1,145

Finance lease liabilities:
Finance lease liability short-term	$	375		$	417
Finance lease liability long-term		502			677
Total finance lease liabilities	$	877		$	1,094

Operating lease assets:
Operating lease ROU assets	$	10,889		$	11,475

Operating lease liabilities:
Operating lease liability short-term	$	1,338		$	1,040
Operating lease liability long-term		10,563			11,214
Total operating lease liabilities	$	11,901		$	12,254

Total lease costs consist of the following:

Lease costs	Consolidated Statements of Operations Classification	Three Months Ended July 31, 2020			Three Months Ended July 31, 2019			Six Months Ended July 31, 2020			Six Months Ended July 31, 2019
Finance Lease Costs
Amortization of ROU assets	Cost of sales	$	53		$	51		$	101		$	102
Interest on lease liabilities	Interest expense		18			8			37			17
Operating lease costs	Cost of sales, SG&A expenses		610			581			1,222			1,132
Short-term lease costs (1)	Cost of sales, SG&A expenses		213			82			236			266
Sub-lease income	SG&A expenses		(20	)		(20	)		(40	)		(40	)
Total Lease costs		$	874		$	702		$	1,556		$	1,477

(

) Includes variable lease costs, which are immaterial

Supplemental cash flow information related to leases is as follows:

	Six Months Ended July 31, 2020		Six Months Ended July 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	202	$	103
Operating cash flows from finance leases	$	37		17
Operating cash flows from operating leases	$	1,385		1,127

	Six Months Ended July 31, 2020
ROU Assets obtained in exchange for new lease obligations:
Finance leases liabilities	$	-
Operating leases liabilities		53

Weighted-average lease terms and discount rates are as follows:

	July 31, 2020
Weighted-average remaining lease terms (in years):
Finance leases		2.6
Operating leases		8.3

Weighted-average discount rates:
Finance leases		7.7	%
Operating leases		7.9	%

Maturities of lease liabilities as of

July 31, 2020

, are as follows:

Year:	Operating Leases			Finance Leases
For the six months ended January 31, 2021	$	949		$	239
For the year ended January 31, 2022		2,340			325
For the year ended January 31, 2023		2,229			264
For the year ended January 31, 2024		2,061			142
For the year ended January 31, 2025		1,330			-
For the year ended January 31, 2026		1,144			-

Thereafter		6,214			-
Total lease payments		16,267			970
Less: amount representing interest		(4,366	)		(93	)
Total lease liabilities at July 31, 2020	$	11,901		$	877

Rent expense on operating leases, which is recorded on straight-line basis, was

$0.8

million and

$0.7

million for the

three

months ended

July 31, 2020

and

2019

, and

$1.5

million and

$1.4

million for the

six

months ended

July 31, 2020

and

2019,

respectively.