In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02”), Leases (“Topic 842”). ASU 2016-02 establishes a right-of-use (“ROU”) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available.

ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company elects the practical expedients (which must be elected as a package and applied consistently to all of our leases) for which we will not reassess: (1) whether any expired or existing contracts are or contains leases, (2) the lease classification for any expired or existing leases and (3) the initial indirect costs for any existing leases. We have also elected the practical expedient to combine lease and non-lease components for all of our leases. We have adopted an accounting policy to not apply the requirements of Topic 842 to leases with a term of 12 months or less, which the Company has within our facility leases. Short-term leases will be reassessed if events occur that disqualify them from short-term status.

The new standard was effective for the Company on June 2, 2019. The FASB issued ASU 2018-11, targeted improvements to Topic 842, which includes an option to not restate comparative periods in transition and elect to use the effective date of Topic 842 as the date of initial application of transition. We adopted the new standard applying the new transition method allowed under ASU 2018-11. As a result of adopting Topic 842, at February 29, 2020, we recognized operating right-of-use assets of $3.3 million, financing right-of-use assets of $0.4 million, operating lease liabilities of $3.4 million and financing lease liabilities of $0.4 million. Existing deferred rent of $0.1 million was recorded as an offset to our gross operating lease right-of-use assets. Several leases include renewal clauses which vary in length and may not include specific rent renewal amounts. The Company will revise the value of the right of use assets and associated lease liabilities when the Company is reasonably certain it will renew the lease. The standard did not have a material impact on our results of operations or cash flows.

The gross amounts of assets and liabilities related to both operating and financing leases at February 29, 2020 were as follows (in thousands):

Lease Type	Amount
Operating lease ROU asset	$	3,303
Financing lease ROU asset		424
Total Lease ROU asset	$	3,727

Operating lease liability current	$	1,412
Financing lease liability current		154
Total lease liability current	$	1,566

Operating lease liability non-current	$	1,998
Financing lease liability non-current		206
Total lease liability non-current	$	2,204

Lease Type	Classification	Three Months Ended February 29, 2020		Nine Months Ended February 29, 2020
Consolidated operating lease expense	Operating expenses	$	481	$	1,427

Consolidated financing lease amortization	Operating expenses		23		39
Consolidated financing lease interest	Interest expense		4		18
Consolidated financing lease expense			27		57

Net lease cost		$	508	$	1,484

The Company recorded $0.4 million and $1.3 million of lease expense in the third quarter and first nine months of fiscal 2019, respectively.

The approximate future minimum lease payments under operating and financing leases at February 29, 2020 were as follows (in thousands):

Fiscal Year	Operating Leases		Financing Leases		Total
Remaining 2020	$	410	$	45	$	455
2021		1,470		181		1,651
2022		698		151		849
2023		468		—		468
2024		326		—		326
Thereafter		303		—		303
Total lease payments		3,675		377		4,052
Less imputed interest		265		17		282
Net minimum lease payments	$	3,410	$	360	$	3,770

The approximate future minimum lease payments under operating and financing leases at June 1, 2019 were as follows (in thousands):

Fiscal Year (1)	Operating Leases
2020	$	1,586
2021		1,367
2022		509
2023		340
2024		289
Thereafter		234

(1)

On June 2, 2019, the Company elected the modified retrospective method of transition to adopt the new lease standard Topic 842, which resulted in no restatement of prior period results. At June 1, 2019, prior to adoption of the new lease standard, operating lease obligations were not included as a liability on the balance sheet. Therefore, the operating lease obligations were included in the table for comparative purposes only and the total lease liability was not included as it is not applicable.

The weighted average remaining lease terms and interest rates of leases held by the Company as of February 29, 2020 were as follows:

The cash outflows of the leasing activity of the Company as lessee for the nine months ending February 29, 2020 were as follows (in thousands):

Cash Flow Source	Classification	Amount
Operating cash flows from operating leases	Operating activities	$	621
Operating cash flows from financing leases	Operating activities		108
Finance cash flows from financing leases	Financing activities		121