Commitments and Contingencies |
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| Commitments and Contingencies | Note 9. Commitments and Contingencies Operating Leases The Company leases its office space and manufacturing facilities and equipment under operating lease agreements. The base lease terms expire at various dates from 2022 to 2025. While each of the leases include renewal options, the Company has only included the base lease term in its calculation of lease assets and liabilities. The Company does not have any finance leases. Balance sheet information related to operating leases is as follows (in thousands):
Rent expense is included in Cost of goods sold in the Company’s Consolidated Statements of Operations and totaled approximately $0.6 million for both fiscal 2020 and fiscal 2019. The Company did not have any variable lease costs or short-term lease costs for the year ended February 29, 2020. Cash paid for amounts included in the measurement of operating lease liabilities was approximately $0.6 for the year ended February 29, 2020. The Company did not modify any existing leases or execute any new leases during the fiscal year ended February 29, 2020. Weighted average information associated with the measurement of the Company’s remaining operating lease obligations is as follows:
The following table summarizes the maturity of the Company’s operating lease liabilities as of February 29, 2020 (in thousands):
The Company subleases certain of its warehousing space and also leases a building that it owns in Pennsylvania. The sublease expires concurrently with the head lease in March 2022. The Pennsylvania lease expires in August 2023. Sublease income and lease income are included in Other income, net in the Company’s Consolidated Statements of Operations and totaled approximately $0.4 million for the year ended February 29, 2020. Lease payments to be received as of February 29, 2020 are as follows (in thousands):
Related Party Leases Included above are leases for manufacturing and warehouse facilities leased from the Company’s chief executive officer and Ordway Properties, LLC (an entity in which the chief executive officer has an ownership interest in) under operating leases expiring at various dates through 2025. Rent expense under these leases totaled approximately $0.4 million in fiscal 2020 and $0.6 million in fiscal 2019. On July 3, 2017, the Company and Ordway Properties, LLC purchased Honeyhill Properties, LLC which is the owner of the building at 510 Henry Clay Blvd. in Lexington, KY for $1,500,000. Video Display Corporation invested $500,000 towards the purchase price and accounted for the investment under the cost method since Ordway Properties, LLC was the majority owner. During the Fiscal 2018, the Company reduced its share in the LLC by $125,000, selling to Ordway Properties, LLC. In addition, during Fiscal , the Company’s sold its remaining $375,000 ownership interest to Ordway Properties, LLC receiving $166,457 in cash and $208,543 in forgiveness of rent that was accrued and owed. There was no gain or loss on the sale. The building is the facility for the Company’s Lexel Imaging subsidiary, which had previously signed a five (5) year lease agreement with Honeyhill Properties, LLC on June 15, 2017. 2019 Future minimum rental payments due under leases with related parties are as follows (in thousands):
Legal Proceedings The Company is involved in various legal proceedings relating to claims arising in the ordinary course of business. |
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