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Note 6 - Leases

9 Months Ended

Oct. 01, 2023

Lessee, Operating and Finance Leases [Text Block]

Note 6 — Leases

The Company's principal research and development and corporate facilities are leased office buildings located in the United States. These lease facilities are classified as operating leases and have lease terms of one to five years. The Company maintains sales offices out of which it conducts sales and marketing activities in various countries outside of the United States which are rented under short-term leases. The Company has elected the practical expedient to apply to recognition requirements to short-term leases and recognizes rent payments on short-term leases on a straight-line basis over the lease term. Finance leases are primarily for engineering design software and have leases terms of generally two to three years. Total rent expenses were $0.1 million and $0.3 million for the three and nine months ended October 1, 2023 and $0.1 million and $0.3 million for the three and nine months ended October 2, 2022, respectively.

Right-of-use assets were approximately $1.1 million and $1.4 million as of October 1, 2023 and January 1, 2023, respectively. Lease liabilities were approximately $1.1 million and $1.4 million as of October 1, 2023 and January 1, 2023, respectively.

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

	*Three Months Ended*				*Nine Months Ended*
	*October 1, 2023*		*October 2, 2022*		*October 1, 2023*		*October 2, 2022*
Operating lease costs:
Fixed	$	100	$	100	$	301	$	300
Short term		4		4		13		16
Total	$	104	$	104	$	314	$	316
Finance lease costs:
Amortization of ROU asset	$	163	$	109	$	486	$	328
Interest		18		5		59		18
Total	$	181	$	114	$	545	$	346

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 1, 2023 and October 2, 2022 was $445 thousand and $0, respectively.

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

	*Nine Months Ended*
	*October 1, 2023*		*October 2, 2022*
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	315	$	306
Operating cash flows used for finance leases		59		18
Financing cash flows used for finance leases		435		299
Total	$	809	$	623

Non-cash ROU assets related to operating leases included in the operating cash flows for the nine months ended October 1, 2023 and October 2, 2022 were $274 thousand and $257 thousand, respectively. Non-cash ROU assets related to finance leases included in the financing cash flows for the nine months ended October 1, 2023 and October 2, 2022 were $486 thousand and $328 thousand, respectively.

The following table provides the details of right-of-use assets and lease liabilities as of October 1, 2023 and January 1, 2023 (in thousands):

	*October 1, 2023*		*January 1, 2023*
Right-of-use assets:
Operating leases	$	190	$	464
Finance leases		892		933
Total right-of-use assets	$	1,082	$	1,397
Lease liabilities:
Operating leases	$	208	$	507
Finance leases		897		887
Total lease liabilities	$	1,105	$	1,394

The following table provided the details of future lease payments for operating and finance leases as of October 1, 2023 (in thousands):

	*Operating Leases*			*Finance Leases*
2023 (remaining period)	$	106		$	165
2024		106			624
2025		—			168
Total lease payments		212			957
Less: Interest		(4	)		(60	)
Present value of lease liabilities	$	208		$	897

The following table provides the details of lease terms and discount rates as of October 1, 2023 and January 1, 2023:

	*October 1, 2023*			*January 1, 2023*
Right-of-use assets:
Weighted-average remaining lease term (years)
Operating leases⁽¹⁾		0.50			1.25
Finance leases		1.84			1.91
Weighted-average discount rates:
Operating leases		6.00	%		6.00	%
Finance leases		6.77	%		5.95	%

⁽¹⁾ The operating lease relates to the Company's headquarters in San Jose, CA. On October 24, 2023, the Company renewed its lease at its current location for an additional three years. The amended lease term will expire on April 14, 2027 with no change in terms.