Note 4 - Commitments & Contingencies

6 Months Ended

Jul. 01, 2023

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(4)          Commitments & Contingencies

Commitments

Leases

The Company has one real estate lease expiring in February 2026. CPS also has a few other leases for equipment which are minor in nature and are generally short-term in duration. None of these equipment leases have been capitalized as the Company elected an accounting policy for short-term leases, which allows lessees to avoid recognizing right-of-use assets and liabilities for leases with terms of 12 months or fewer.

The real estate lease expiring in 2026 (the “Norton facility lease”) is included as a right-of-use lease asset and corresponding lease liability on the balance sheet. This asset and liability was recognized on March 1, 2021 based on the present value of lease payments over the lease term using the Company’s incremental borrowing rate at commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating Leases

The Norton facility lease comprises approximately 38 thousand square feet. The lease is triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities. The Company also has an option to renew the lease starting in March 2026 through February 2032. Annual rental payments range from $160 thousand to $165 thousand through maturity.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s capitalized operating lease as of July 1, 2023

(Dollars in Thousands)	July 1, 2023
Maturity of capitalized lease liabilities	Lease payments
2023		81
2024		165
2025		165
2026		28
Total undiscounted operating lease payments	$	439
Less: Imputed interest		(39	)
Present value of operating lease liability	$	400

Balance Sheet Classification
Current lease liability	$	158
Long-term lease liability		242
Total operating lease liability	$	400
Other Information
Remaining lease term for capitalized operating lease (months)		32
Discount rate for capitalized operating leases		6.6	%

Operating Lease Costs and Cash Flows

Operating lease cost and cash paid was $41 thousand during the second quarter of 2023 and $81 thousand for the six months ended July 1, 2023. These costs are related to its long-term operating lease. All other short-term leases were immaterial.

Finance Leases

The company does not have any finance leases.