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Note 6 - Leases

9 Months Ended

Oct. 02, 2022

Lessee, Operating and Finance Leases [Text Block]

Note 6 — Leases

The Company entered into operating leases for office space for its headquarters. The Company has elected the practical expedient to apply to recognition requirements to short-term leases for its domestic and foreign subsidiaries and for its sales offices and recognized rent payments on short-term leases on a straight-line basis over the lease term. Finance leases are primarily for engineering design software. Operating leases generally have lease terms of one to five years. Finance leases are generally two to three years. As of October 2, 2022 and January 2, 2022, the balance of right-of-use assets was approximately $0.9 million and $1.5 million, respectively, and the lease liability was approximately $1 million and $1.6 million, respectively, for operating and finance leases for the headquarters in San Jose and for the operating subsidiaries of SensiML in Oregon and the Company's subsidiary in India. Total rent expense was $0.1 million and $0.3 million for the three and nine months ended October 2, 2022 and October 3, 2021, respectively.

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

	*Three Months Ended*				*Nine Months Ended*
	*October 2, 2022*		*October 3, 2021*		*October 2, 2022*		*October 3, 2021*
Operating lease costs:
Fixed	$	100	$	101	$	300	$	306
Short term		4		4		16		13
Total	$	104	$	105	$	316	$	319
Finance lease costs:
Amortization of ROU asset	$	109	$	87	$	328	$	591
Interest		5		6		18		57
Total	$	114	$	93	$	346	$	648

The following table provides the details of supplemental cash flow information. Right-of-use assets obtained in exchange for new finance and operating lease liabilities represent the new operating and finance leases entered into during the nine months ended October 2, 2022 and the nine months ended October 3, 2021 were $0 and $0.4 million, respectively (in thousands):

	*Nine Months Ended*
	*October 2, 2022*		*October 3, 2021*
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	306	$	100
Operating cash flows used for finance leases		18		9
Financing cash flows used for finance leases		299		231
Total	$	623	$	340

Right-of-use assets obtained in exchange for finance lease obligations	$	—	$	397

The following table provides the details of right-of-use assets and lease liabilities as of October 2, 2022 and January 2, 2022 (in thousands):

	*October 2, 2022*		*January 2, 2022*
Right-of-use assets:
Operating leases	$	552	$	809
Finance leases		392		720
Total right-of-use assets	$	944	$	1,529
Lease liabilities:
Operating leases	$	601	$	873
Finance leases		391		690
Total lease liabilities	$	992	$	1,563

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

	*Operating Leases*			*Finance Leases*
2022 (remaining period)	$	103		$	159
2023		421			141
2024		106			105
Total lease payments		630			405
Less: Interest		(29	)		(14	)
Present value of lease liabilities	$	601		$	391

The following table provides the details of lease terms and discount rates as of October 2, 2022 and January 2, 2022:

	*October 2, 2022*			*January 2, 2022*
Right-of-use assets:
Weighted-average remaining lease term (years)
Operating leases		1.50			2.25
Finance leases		1.77			2.15
Weighted-average discount rates:
Operating leases		6.00	%		6.00	%
Finance leases		4.29	%		4.57	%