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Note 12 - Commitments | 9 Months Ended
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Jul. 31, 2022
Notes to Financial Statements |
Commitments Disclosure [Text Block] | Note 12 – Commitments We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of 1 year to 10 years, some of which include options to extend the leases for up to 5 years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments totaling $16,000 per month. We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the period ended July 31, 2022 were as follows (in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | July 31, 2022 |  |  | July 31, 2022 |
Operating lease cost |  | $ | 477 |  |  | $ | 1,048 |
Short-term lease cost |  |  | - |  |  |  | 1 |
Other information related to leases was as follows (in thousands):
|  | July 31, 2022 |  |  | October 31, 2021 |
Supplemental Cash Flows Information |  |  |  |  |  |  |  |
ROU assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |
Operating leases |  | $ | 13,967 |  |  | $ | 1,453 |
Weighted Average Remaining Lease Term |  |  |  |  |  |  |  |
Operating leases (in months) |  |  | 116.40 |  |  |  | 25.26 |
Weighted Average Discount Rate |  |  |  |  |  |  |  |
Operating leases |  |  | 3.75 | % |  |  | 3.54 | %
Future minimum lease payments under non-cancellable leases as of July 31, 2022 were as follows:
Year ending October 31, |  | Operating Leases |
2022 (excluding nine months ended July 31, 2022) |  | $ | 267 |
2023 |  |  | 2,286 |
2024 |  |  | 1,991 |
2025 |  |  | 1,796 |
2026 |  |  | 1,835 |
Thereafter |  |  | 12,123 |
Total future minimum lease payments |  |  | 20,298 |
Less imputed interest |  |  | (3,459 | )
Total |  | $ | 16,839 |
Reported as of July 31, 2022 |  | Operating Leases |
Other current liabilities |  | $ | 1,576 |
Operating lease liabilities |  |  | 15,263 |
Finance lease liabilities |  |  | - |
Total |  | $ | 16,839 |
As of July 31, 2022, operating lease ROU asset was $14 million and operating lease liability totaled $16.8 million, of which $1.6 million is classified as current. There were no finance leases as of July 31, 2022. The Cables and Connectors facilities, consisting of four buildings for a total of 21,908 square feet, are leased by RF Industries, Ltd. We renewed the lease effective as of effective August 1, 2022, for 6 month term expiring on January 31, 2023. The monthly rental payment under the new lease currently is $33,957.40 per month. The Cables and Connectors and C Enterprises facilities will relocate and consolidate into one building consisting of a total86,952 square feet, which is leased by RF Industries, Ltd. The lease will commence December 1, 2022, for a 120-month term expiring November 30, 2032. The monthly rental payments under the lease will be $139,123 per month for the first year and will increase annually. During the three months ended July 31, 2022, the Company obtained possession of the building to begin construction and renovation, which resulted in a lease liability of $15.6 million ($14.9 million in long-term and $726,000 in current lease liability), a right of use asset of $12.8 million and other receivables related to tenant improvement allowance of $2.7 million being recorded. The discount rate used to calculate the lease liability was 3.76%. Further, as a result of the early possession, the Company recognized additional rent expense of $135,000 for the three months ended July 31, 2022.

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- Definition The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI https://asc.fasb.org/topic&trid=2144648 + Details
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