Note

- Leases

Operating Leases.

August 2020,

the Company entered into a new lease in Abu Dhabi for land upon which the Company intends to build a facility. The annual payments are initially expected to be approximately

1.2

million Dirhams (approximately

$0.3

million at

October 31, 2020),

inclusive of rent and common charges, with escalation clauses in the agreement. Rent payments are deferred until

August 2022.

The lease expires in

August 2050.

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. Two of these leases matured in

April

2021

and new leases have been entered into in

May 2021

to replace the matured leases. The remaining lease matures in

September

2022.

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 right-of-use ("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.

April 30, 2021

, the Company had total operating lease liabilities of

$13.5

million and total operating ROU assets of

$12.2

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

April 30, 2021

, the Company also had total finance lease liabilities of $

0.6

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

0.7

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 (in thousands):

Operating and Finance leases:	April 30, 2021			January 31, 2021
Finance leases assets:
Property and Equipment - gross	$	1,061		$	879
Accumulated depreciation and amortization		(311	)		(96	)
Property and Equipment - net	$	750		$	783

Finance lease liabilities:
Finance lease liability short-term	$	262		$	300
Finance lease liability long-term		350			401
Total finance lease liabilities	$	612		$	701

Operating lease assets:
Operating lease ROU assets	$	12,178		$	13,384

Operating lease liabilities:
Operating lease liability short-term	$	1,311		$	1,402
Operating lease liability long-term		12,185			13,174
Total operating lease liabilities	$	13,496		$	14,576

Total lease costs consist of the following (in thousands):

Lease costs	Consolidated Statements of Operations Classification	Three Months Ended April 30, 2021			Three Months Ended April 30, 2020
Finance Lease Costs
Amortization of ROU assets	Cost of sales	$	54		$	48
Interest on lease liabilities	Interest expense		13			19
Operating lease costs	Cost of sales, SG&A expenses		648			612
Short-term lease costs (1)	Cost of sales, SG&A expenses		93			23
Sub-lease income	SG&A expenses		(20	)		(20	)
Total Lease costs		$	788		$	682

(

) Includes variable lease costs, which are immaterial

Supplemental cash flow information related to leases is as follows (in thousands):

	Three Months Ended April 30, 2021		Three Months Ended April 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash outflows from finance leases	$	117	$	105
Operating cash outflows from finance leases		13		19
Operating cash outflows from operating leases		501		954

	Three Months Ended April 30, 2021		Three Months Ended April 30, 2020
ROU Assets obtained in exchange for new lease obligations:
Finance leases liabilities	$	-	$	-
Operating leases liabilities		52		27

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

	April 30, 2021
Weighted-average remaining lease terms (in years):
Finance leases		2.3
Operating leases		13.4

Weighted-average discount rates:
Finance leases		7.7	%
Operating leases		7.5	%

Maturities of lease liabilities as of

April 30, 2021

, are as follows (in thousands):

Year:	Operating Leases			Finance Leases
For the nine months ended January 31, 2022	$	1,676		$	224
For the year ended January 31, 2023		2,279			288
For the year ended January 31, 2024		2,265			156
For the year ended January 31, 2025		1,516			-
For the year ended January 31, 2026		1,326			-
For the year ended January 31, 2027		1,333			-

Thereafter		12,322			-
Total lease payments		22,717			668
Less: amount representing interest		(9,221	)		(56	)
Total lease liabilities at April 30, 2021	$	13,496		$	612

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

$0.7

million for the

three

months ended

April 30, 2021

and

2020

, respectively.