Note 8 - Leases

12 Months Ended

Jan. 02, 2022

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. These operating leases generally have lease terms of 1 year to 5 years. Finance leases are primarily for engineering design software, and are generally 2 years to 3 years. For the year ended January 2, 2022 the Company's had balances of right-of-use assets and lease liabilities, on its consolidated lance sheet, of approximately $1.5 million and $1.6 million, respectively, related to the operating leases signed for the premises of its headquarters in San Jose and its subsidiary SensiML in Oregon, and finance leases for engineering design software. During the year ended  January 3, 2021 the Company recognized right-of-use assets and lease liabilities of approximately $1.8 million and $1.9 million, respectively, relating to the operating leases signed for the premises of its headquarters in San Jose, and its subsidiary SensiML in Oregon, and finance leases for engineering design software.

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 expired in March 2021.  The Company subsequently entered into a new lease agreement for a 705 square foot facility in Beaverton Oregon with a lease term duration from  April 2021 until March 2023. 

The Company leased a 9,400 square foot facility in Bangalore, India for the purpose of software development, which was leased through June 2021.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 of approximately $196,000 related to the prior India office lease is classified within other accrued liabilities at   January 2, 2022  and at January 3, 2021 on the Company's Consolidated Balance Sheets due to ongoing settlement negotiations in relation to the exit.  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. The lease for the 1,100 square foot office was subsequently renewed to end in May 2022. 

In addition, the Company rents sales offices in Europe and Asia under short-term leases. Total rent expense during 2021, 2020 and 2019 was approximately $425,000, $493,000 and $798,000 respectively.

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

	Fiscal Year Ended		Fiscal Year Ended
	January 2, 2022		January 3, 2021
Operating lease costs:
Fixed	$	402	$	473
Variable		—		—
Short term		23		20
Total	$	425	$	493
Finance lease costs:
Amortization of ROU asset	$	700	$	315
Interest		69		38
Total	$	769	$	353

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

	Fiscal Year Ended		Fiscal Year Ended
	January 2, 2022		January 3, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	402	$	497
Operating cash flows used for finance leases		69		38
Financing cash flows used for financing leases		378		270
Total	$	849	$	805
Right-of-use assets obtained in exchange for obligations:
Operating leases	$	—	$	—
Finance leases		1,311		914
Total	$	1,311	$	914

The following table provides the details of right-of-use assets and lease liabilities (in thousands):

	January 2, 2022		January 3, 2021
Right-of-use assets:
Operating leases	$	809	$	1,134
Finance leases		720		705
Total	$	1,529	$	1,839
Lease liabilities:
Operating leases	$	873	$	1,212
Finance leases		690		670
Total	$	1,563	$	1,882

The following table provides the details of future lease payments for operating and finance leases as of January 2, 2022 and (in thousands):

Annual Fiscal Years	Operating		Finance
2022	$	409	$	475
2023		421		141
2024		106		106
2025		—		—
Total lease payments		936		722
Less: Interest		63		32
Present value of lease liabilities	$	873	$	690

The following table provides the details of lease terms and discount rates:

	January 2, 2022
Right-of-use assets:
Weighted-average remaining lease term (years)
Operating leases		2.25
Finance leases		2.15
Weighted-average discount rates:
Operating leases		6.00	%
Finance leases		4.57	%