8. LEASE OBLIGATIONS, OTHER COMMITMENTS AND CONTINGENCIES 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 finance 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, we recognized operating right-of-use assets of $3.6 million, finance right-of-use assets of $0.5 million, operating lease liabilities of $3.8 million and finance lease liabilities of $0.5 million. Existing deferred rent of $0.2 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 finance leases at August 31, 2019 were as follows (in thousands) : Lease Type Amount Operating lease ROU asset $ 3,643 Finance lease ROU asset 464 Total Lease ROU asset $ 4,107 Operating lease liability current $ 1,390 Finance lease liability current 151 Total lease liability current $ 1,541 Operating lease liability non-current $ 2,386 Finance lease liability non-current 292 Total lease liability non-current $ 2,678 The components of lease costs were as follows (in thousands) : Lease Type Classification Three Months Ended August 31, 2019 Consolidated operating lease expense Operating expenses $ 478 Consolidated finance lease amortization Operating expenses  Consolidated finance lease interest Interest expense 9 Consolidated finance lease expense 9 Net lease cost $ 487 The Company recorded $0.4 million of lease expense in the first quarter of fiscal 2019. The approximate future minimum lease payments under operating and finance leases at August 31, 2019 were as follows (in thousands) : Fiscal Year Operating Leases Finance Lease Total Remaining 2020 $ 1,164 $ 136 $ 1,300 2021 1,354 181 1,535 2022 598 151 749 2023 417  417 2024 309  309 Thereafter 241  241 Total lease payments 4,083 468 4,551 Less imputed interest 307 25 332 Net minimum lease payments $ 3,776 $ 443 $ 4,219 The approximate future minimum lease payments under operating and finance 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 August 31, 2019 were as follows: Lease Type Weighted Average Remaining Lease Term in Years Weighted Average Interest Rate Operating leases 3.5 4.6% Finance lease 2.6 4.6% The cash outflows of the leasing activity of the Company as lessee for the three months ending August 31, 2019 were as follows (in thousands) : Cash Flow Source Classification Amount Operating cash flows from operating leases Operating activities $ 256 Operating cash flows from finance lease Operating activities 25 Finance cash flows from finance lease Financing activities 30