17.

Leases

Leases are recorded in accordance with FASB ASC

842,

Leases which requires lessees to recognize a right-of-use (“ROU”) asset and an operating right of use liability for all leases with terms greater than

months and requires disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases.

The Company determines if an arrangement is a lease at inception. For leases where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do

not

provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments

The ROU asset also consists of any lease incentives received. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as depreciation expense and interest expense using the accelerated interest method of recognition. The Company has lease agreements which require payments for lease and non-lease components. The Company has elected to account for these as a single lease component with the exception of its real estate leases.

The components of lease expense were as follows:

	Thirteen Week Period Ended
	March 28, 2020		March 30, 2019

Operating lease cost	$	656	$	439

Finance lease cost
Amortization of ROU assets	$	78	$	73
Interest on lease liabilities	$	2		1
Total finance lease cost	$	80	$	74

Supplemental Cash Flow information related to leases was as follows:

	Thirteen Week Period Ended
	March 28, 2020		March 30, 2019

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	663	$	382
Operating cash flows from finance leases	$	2	$	2
Financing cash flows from finance leases	$	80	$	72

Right of use assets obtained in exchange for lease obligations
Operating leases	$	250	$	6,208
Finance leases		-		-

Supplemental Balance Sheet information as of

March 28, 2020

and

December 28, 2019

related to leases was as follows:

	March 28, 2020			December 28, 2019
Operating leases
Operating lease right of use assets	$	5,516		$	5,820

Operating right of use liability - current	$	(2,157	)	$	(2,134	)
Operating right of use liability - non-current		(3,615	)		(3,921	)
Total operating lease liabilities	$	(5,772	)	$	(6,055	)

Finance leases
Property and equipment - (ROU assets)	$	984		$	985
Accumulated depreciation		(552	)		(475	)
Property and equipment, net	$	432		$	510

Finance lease liability - current	$	(309	)	$	(315	)
Finance lease liability - non-current		(115	)		(189	)
Total finance lease liabilities	$	(424	)	$	(504	)

Weighted average remaining lease term
Operating leases		1.64 Years			2.54 Years
Finance leases		1.39 Years			1.62 Years

Weighted average discount rate
Operating leases		4.3	%		4.11	%
Finance leases		1.83	%		1.78	%

Maturities of lease liabilities are as follows:

Fiscal Year	Operating Leases			Finance Leases
2020	$	1,856		$	240
2021		1,831			169
2022		1,360			22
2023		905			-
2024		188			-
Thereafter		-			-

Total lease payments	$	6,140		$	431
Less: imputed interest		(368	)		(7	)
Total	$	5,772		$	424