LEASE COMMITMENTS

12 Months Ended

Jan. 02, 2016

Leases of Lessee Disclosure [Text Block]

11. LEASE COMMITMENTS

The Company leases office facilities, computer equipment and office furniture under various operating leases expiring at various dates through October 2021.

Following is a summary of future minimum payments under operating leases that have initial or remaining non-cancellable lease terms at January 2, 2016 (amounts in thousands):

	Operating
Fiscal Year	Leases
2016	$	1,093
2017		1,119
2018		933
2019		709
2020		621
Thereafter		549
Total minimum lease payments		5,024
Future minimum rentals to be received under non-cancellable subleases		-
Minimum lease payments net of amounts to be received under subleases	$	5,024

Total rental expense, net of subtenant rents received, was approximately $1,808,000 and $1,214,000 for fiscal years 2015 and 2014, respectively, and was recorded in selling, general and administrative expenses. The Company recorded $171,000 and $218,000, respectively, in rental income from subtenants during fiscal years 2015 and 2014. Rents received from subtenants are recorded as an offset to rental expense.

In June 2015, the Company took steps to discontinue use of its leased facilities in McLean, Virginia. The space is leased under an operating lease with a term expiring in July 2019. It is comprised of 4,823 square feet. Although the Company has clients in this geographic market, projects are performed from either client sites or other Company locations, and thus the space is not required or used by Company employees, and specifically not used for revenue-generating activities. The property is vacant and currently being marketed as a sublease. We accounted for the discontinuation of use of this property in accordance with FASB ASC 420, “Exit or Disposal Cost Obligations” and as such recorded a liability of approximately $256,000 during the second fiscal quarter of fiscal 2015. Based on updated probability-weighted cash flow analysis performed as of January 2, 2016, an additional liability of $72,000 was recorded. As of January 2, 2016, a liability of $300,000 is recorded of which $135,000 is recorded in Other accrued liabilities and $165,000 is recorded in Other noncurrent liabilities in the Condensed Consolidated Balance Sheets. The expense related to this liability is recorded in Selling, general and administrative expense on the Consolidated Statements of Operations and Comprehensive Loss. The amounts recorded were calculated using probability-weighted cash flow analysis and represent the present value, calculated using a credit-adjusted risk free rate, of our remaining costs under the remaining term of the lease, net of estimated subleases we are likely to obtain.