Commitments and Contingencies

6 Months Ended

Jun. 27, 2020

Commitments and Contingencies Disclosure [Abstract]

5. Commitments and Contingencies

Operating Leases

We leased our offices and production facility under a

non-cancelable

operating lease in Austin, Texas that expired in March 2020. The lease contained minimum rent escalation clauses that require additional rental amounts after the first year. This lease contained one five-year renewal option. We leased certain other, less significant, vehicles and equipment. Our operating lease expense was recognized on a straight line basis over the lease terms.

For the three and six months ended June 27, 2020, operating lease expense was $0 and $143,000.

As of March 28, 2020 we had no remaining operating lease obligations.

Patents and Licenses

We had entered into various licensing agreements requiring royalty payments ranging from 0.13% to 2.5% of specified product sales. Certain of these agreements contained provisions for the payment of guaranteed or minimum royalty amounts. Our minimum license obligations were $10,000 per year through 2025. In the event that we fail to pay minimum annual royalties, these licenses may automatically become

non-exclusive

or be terminated. These royalty obligations terminated at various times from 2020 to 2025. Royalty expense totaled $0 and $11,000 and $10,000 and $10,000, respectively, for the three and six months ended June 27, 2020 and June 29, 2019. During the three month period ending March 28, 2020 we ceased production of our Conductus wire and have not incurred addition royalty expense. Under the terms of certain royalty agreements, royalty payments made may be subject to audit. There have been no audits to date and we do not expect future audit adjustments to be significant.