Note 8 - Leases

12 Months Ended

Jan. 03, 2021

Notes to Financial Statements

Lessee, Operating and Finance Leases [Text Block]

NOTE 8-LEASES

The Company entered into operating leases for office space for its headquarters, domestic and foreign subsidiaries and sales offices. Finance leases are primarily for engineering design software. Operating leases generally have lease terms of 1 year to 5 years. Finance leases are generally 2 years to 3 years. For the year ended January 3, 2021 the Company recognized right-of-use assets and lease liability of approximately 1.8 million and $1.9 million, respectively, related to the operating and finance leases signed for the premises of its headquarters in San Jose and its subsidiary SensiML in Oregon. For the year ended  December 29, 2019 the Company recognized right-of-use assets and lease liability of approximately $2.4 million and $2.3 million, respectively, relating to the operating and finance leases signed for the premises of its headquarters in San Jose, and its subsidiary SensiML in Oregon.

In October 2018, the Company leased a facility for research and development in San Diego, California, the lease of which expired in July 2020. The Company did not renew the lease agreement in San Diego and the office was closed.

On February 13, 2019, the Company entered into an agreement to lease approximately 24,164 square feet of premises located at 2220 Lundy Avenue, San Jose, CA 95131 for a period of five years, effective April 15, 2019 to relocate its headquarters.

In April 2019, the Company leased a facility for its SensiML subsidiary in Beaverton, Oregon, the lease of which expires in March 2021. The Company is currently considering several options including negotiating with the Landlord of its Oregon location for an extension.

The Company leases a 9,400 square foot facility in Bangalore, India for the purpose of software development, which is leased through June 2021. On July 10, 2020, the Company's Indian subsidiary leased a smaller office premises of 1,100 square feet for a period of 11 months to accommodate the reduced headcount resulting from our restructuring in 2020. Subsequently, the Company deemed the 9,400 square foot location to be abandoned and the Company recognized the rent expense of that facility in restructuring charges in December 2020. The remaining lease liability related to the prior office is classified within other accrued liabilities as of  January 3, 2021

In addition, the Company rents sales offices in Europe and Asia. Total rent expense during 2020, 2019 and 2018 was approximately $493,000, $798,000 and $881,000 respectively.

The following table provides the activity related to operating and finance leases (in thousands):

	Fiscal Year Ended		Fiscal Year Ended
	January 3, 2021		December 29, 2019
Operating lease costs:
Fixed	$	473	$	757
Variable		—		—
Short term		20		40
Total		493		797
Finance lease costs:
Amortization of ROU asset		315		388
Interest		38		18
Total	$	353	$	406

The following table provides the details of supplemental cash flow information (in thousands):

	Fiscal Year Ended		Fiscal Year Ended
	January 3, 2021		December 29, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	497	$	791
Operating cash flows used for finance leases		38		24
Financing cash flows used for financing leases		270		365
Total	$	805	$	1,180
Right-of-use assets obtained in exchange for obligations:
Operating leases	$	—	$	2,200
Finance leases		914		170
Total	$	914	$	2,370

The following table provides the details of right-of-use assets and lease liabilities as of January 3, 2021 (in thousands):

	January 3, 2021		December 29, 2019
Right-of-use assets:
Operating leases	$	1,134	$	2,200
Finance leases		705		170
Total	$	1,839	$	2,370
Lease liabilities:
Operating leases		1,212		1,816
Finance leases		670		471
Total	$	1,882	$	2,287

The following table provides the details of future lease payments for operating and finance leases as of January 3, 2021 and (in thousands):

Annual Fiscal Years	Operating			Finance
2021	$	402		$	375
2022		409			335
2023		422			—
2024		106			—
Total lease payments		1,339			710
Less: Interest		(127	)		(40	)
Present value of lease liabilities	$	1,212		$	670

The following table provides the details of lease terms and discount rates as of January 3, 2021:

	January 3, 2021
Right-of-use assets:
Weighted-average remaining lease term (years)
Operating leases		3.24
Finance leases		2.21
Weighted-average discount rates:
Operating leases		6.00	%
Finance leases		5.50	%