Summer Infant (SUMR) 10-Q 12 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 28, 2020	May 03, 2020
Document and Entity Information
Entity Registrant Name	Summer Infant, Inc.
Document Type	10-Q
Document Period End Date	Mar. 28, 2020
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,111,427
Entity Central Index Key	0001314772
Current Fiscal Year End Date	--01-02
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 28, 2020	Dec. 28, 2019
CURRENT ASSETS
Cash and cash equivalents	$ 693	$ 395
Trade receivables, net of allowance for doubtful accounts of $542 and $304 at December 28, 2019 and December 29, 2018, respectively	30,471	32,787
Inventory, net	25,170	28,056
Prepaids and other current assets	3,034	2,946
TOTAL CURRENT ASSETS	59,368	64,184
Property and equipment, net	8,118	8,788
Intangible assets, net	12,799	12,896
Right of use assets, noncurrent	3,959	4,578
Deferred tax assets, net	1,243	996
Other assets	94	101
TOTAL ASSETS	85,581	91,543
CURRENT LIABILITIES
Accounts payable	25,530	25,396
Accrued expenses	7,446	7,289
Lease liabilities, current	2,523	2,495
Current portion of long-term debt	219	875
TOTAL CURRENT LIABILITIES	35,718	36,055
Long-term debt, less current portion and unamortized debt issuance costs	41,759	45,359
Lease liabilities, noncurrent	1,844	2,546
Other liabilities	1,953	2,000
TOTAL LIABILITIES	81,274	85,960
STOCKHOLDERS' EQUITY
Preferred Stock, $0.0001 par value, 1,000,000 authorized, none issued or outstanding at March 28, 2020 and December 28, 2019, respectively
Common Stock $0.0009 par value, authorized, issued and outstanding of 5,444,445, 2,141,612 and 2,111,427 at March 28, 2020 and 5,444,445, 2,138,928, and 2,108,743 at December 28, 2019, respectively	2	2
Treasury Stock at cost (30,185 shares at March 28, 2020 and December 28, 2019)	(1,283)	(1,283)
Additional paid-in capital	77,704	77,715
Accumulated deficit	(70,298)	(69,088)
Accumulated other comprehensive loss	(1,818)	(1,763)
TOTAL STOCKHOLDERS' EQUITY	4,307	5,583
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 85,581	$ 91,543

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 28, 2020	Dec. 28, 2019
Condensed Consolidated Balance Sheets
Preferred Stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred Stock, authorized	1,000,000	1,000,000
Preferred Stock, issued	0	0
Preferred Stock, outstanding	0	0
Common Stock, par value (in dollars per share)	$ 0.0009	$ 0.0009
Common Stock, authorized	5,444,445	5,444,445
Common Stock, issued	2,141,612	2,138,928
Common Stock, outstanding	2,111,427	2,108,743
Treasury Stock at cost, shares	30,185	30,185

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 28, 2020	Mar. 30, 2019
Condensed Consolidated Statements of Operations
Net sales	$ 40,338	$ 42,538
Cost of goods sold	27,835	29,088
Gross profit	12,503	13,450
General and administrative expenses	8,147	9,379
Selling expense	3,444	3,353
Depreciation and amortization	967	937
Operating loss	(55)	(219)
Interest expense, net	1,410	1,249
Loss before income taxes	(1,465)	(1,468)
Benefit for income taxes	(255)	(70)
NET LOSS	$ (1,210)	$ (1,398)
Net loss per share:
BASIC (in dollars per share)	$ (0.57)	$ (0.67)
DILUTED (in dollars per share)	$ (0.57)	$ (0.67)
Weighted average shares outstanding:
BASIC (in shares)	2,109,264	2,092,574
DILUTED (in shares)	2,109,264	2,092,574

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 28, 2020	Mar. 30, 2019
Condensed Consolidated Statements of Comprehensive Loss
Net loss	$ (1,210)	$ (1,398)
Other comprehensive (loss) income:
Changes in foreign currency translation adjustments	(55)	165
Comprehensive loss	$ (1,265)	$ (1,233)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 28, 2020	Mar. 30, 2019
Cash flows from operating activities:
Net loss	$ (1,210)	$ (1,398)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	967	904
Stock-based compensation expense , net of forfeitures	(11)	48
Provision for allowance for doubtful accounts	23	9
Write off of unamortized deferred financing costs	266
Amortization of right of use assets	619	496
Changes in assets and liabilities:
Decrease (increase) in trade receivables	2,099	(3,198)
Decrease in inventory	2,692	2,273
Decrease in lease liabilities	(673)	(532)
Increase in prepaids and other assets	(49)	(313)
Increase (decrease) in accounts payable and accrued expenses	164	(5,808)
Net cash provided by (used in) operating activities	4,887	(7,519)
Cash flows from investing activities:
Acquisitions of property and equipment	(220)	(748)
Acquisitions of intangible assets	(25)	(64)
Net cash used in investing activities	(245)	(812)
Cash flows from financing activities:
Repayment of term loan facility		(219)
Net (repayments) borrowings on revolving facility	(4,523)	8,891
Net cash (used in) provided by financing activities	(4,523)	8,672
Effect of exchange rate changes on cash and cash equivalents	179	(146)
Net increase in cash and cash equivalents	298	195
Cash and cash equivalents, beginning of period	395	721
Cash and cash equivalents, end of period	693	916
Supplemental disclosure of cash flow information:
Cash paid for interest	877	986
Cash paid for income taxes	$ 2	$ 3

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid in Capital	Treasury Stock	Accumulated Deficit	Accumulated Comprehensive Loss	Total
Balance, beginning of period at Dec. 29, 2018	$ 2	$ 77,396	$ (1,283)	$ (64,924)	$ (1,921)	$ 9,270
Balance, beginning of period (in shares) at Dec. 29, 2018	2,091,178
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted shares (in shares)	6,167
Stock-based compensation, net of forfeitures		48				48
Net loss for the period				(1,398)		(1,398)
Foreign currency translation adjustment					165	165
Balance, end of period at Mar. 30, 2019	$ 2	77,444	(1,283)	(66,322)	(1,756)	8,085
Balance, end of period (in shares) at Mar. 30, 2019	2,097,345
Balance, beginning of period at Dec. 28, 2019	$ 2	77,715	(1,283)	(69,088)	(1,763)	5,583
Balance, beginning of period (in shares) at Dec. 28, 2019	2,108,743
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted shares (in shares)	1,064
Fractional Share Issuance upon reverse stock split	1,620
Stock-based compensation, net of forfeitures		(11)				(11)
Net loss for the period				(1,210)		(1,210)
Foreign currency translation adjustment					(55)	(55)
Balance, end of period at Mar. 28, 2020	$ 2	$ 77,704	$ (1,283)	$ (70,298)	$ (1,818)	$ 4,307
Balance, end of period (in shares) at Mar. 28, 2020	2,111,427

BASIS OF PRESENTATION AND SUMMA

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 28, 2020
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations The Company designs, markets and distributes branded juvenile health, safety and wellness products that are sold globally to large national retailers as well as independent retailers, primarily in North America. The Company currently markets its products in several product categories including safety, nursery, monitoring, and baby gear. Most products are sold under our core brand names of Summer™, SwaddleMe®, and born free®. When used herein, the terms the “Company,” “we,” “us,” and “our” mean Summer Infant, Inc. and its consolidated subsidiaries. Basis of Presentation and Principles of Consolidation The accompanying interim condensed consolidated financial statements of the Company are unaudited, but in the opinion of management, reflect all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results for the interim periods. Accordingly, they do not include all information and notes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. The results of operations for interim periods are not necessarily indicative of results to be expected for the entire fiscal year or any other period. The balance sheet at December 28, 2019 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. These interim condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes for the year ended December 28, 2019 included in its Annual Report on Form 10-K filed with the SEC on March 18, 2020, as amended on April 24, 2020. It is the Company’s policy to prepare its financial statements on the accrual basis of accounting in conformity with GAAP. The interim condensed consolidated financial statements include the accounts of its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the consolidation. All dollar amounts included in the Notes to Condensed Consolidated Financial Statements are in thousands of U.S. dollars, except share and per share amounts. In March 2020, the Company completed a 1-for-9 reverse stock split of the Company's issued and outstanding shares of common stock in order to regain compliance with Nasdaq's minimum bid price requirement. Accordingly, information in the financial statements and accompanying notes included in this Quarterly Report on Form 10-Q related to fiscal 2019 give effect to the reverse stock split as if it occurred at the beginning of the first period presented. Reclassification Previously reported amounts have been revised in the accompanying condensed consolidated statement of cash flows to properly state certain right to use assets and lease liabilities. These revisions had no impact on the company’s net cash provided by or used in operating activites. Revenue Recognition The Company recognizes revenue to depict the transfer of promised goods to customers in an amount that reflects what it expects to receive in exchange for the goods. The Company’s principal activities from which it generates its revenue is product sales. The Company has one reportable segment of business. Revenue is measured based on consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation in a contract by transferring control over a product to a customer when product delivery occurs. Consideration is typically paid approximately 60 days from the time control is transferred. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in selling costs. A performance obligation is a promise in a contract to transfer a distinct product to the customer, which for the Company is transfer of juvenile products to its customers. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. A transaction price is the amount of consideration the Company expects to receive under the arrangement. The Company is required to estimate variable consideration (if any) and to factor that estimation into the determination of the transaction price. The Company conducts its business with customers through valid purchase or sales orders each of which is considered a separate contract because individual orders are not interdependent on one another. Product transaction prices on a purchase or sale order are discrete and stand-alone. Purchase or sales orders may be issued under either a customer master service agreement or a reseller allowance agreement. Purchase or sales orders, master service agreements, and reseller allowance agreements, which are specific and unique to each customer, may include product price discounts, markdown allowances, return allowances, and/or volume rebates which reduce the consideration due from customers. Variable consideration is estimated using the most likely amount method, which is based on historical experience as well as current information such as sales forecasts. Contracts may also include cooperative advertising arrangements where the Company allows a discount from invoiced product amounts in exchange for customer purchased advertising that features the Company’s products. These allowances are generally based upon product purchases or specific advertising campaigns. Such allowances are accrued when the related revenue is recognized. These cooperative advertising arrangements provide a distinct benefit and fair value and are accounted for as direct selling expenses. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain reported amounts of revenues, expenses, assets, liabilities and related disclosures. These estimates are based on management’s best knowledge as of the date the financial statements are published of current events and actions the Company may undertake in the future. Accordingly, actual results could differ from those estimates. Trade Receivables Trade receivables are carried at their outstanding unpaid principal balances reduced by an allowance for doubtful accounts. The Company estimates doubtful accounts based on historical bad debts, factors related to specific customers’ ability to pay and current economic trends. The Company writes off accounts receivable against the allowance when a balance is determined to be uncollectible. Amounts are considered to be uncollectable based upon historical experience and management’s evaluation of outstanding accounts receivable. Changes in the allowance for doubtful accounts are as follows: For the three months ended March 28, 2020 March 30, 2019 Allowance for doubtful accounts, beginning of period $ 542 $ 304 Charges to costs and expenses, net 23 9 Account write-offs — — Allowance for doubtful accounts, end of period $ 565 $ 313 Inventory Valuation Inventory is comprised mostly of finished goods and some component parts and is stated at the lower of cost using the first-in, first-out (“FIFO”) method, or net realizable value. The Company regularly reviews slow-moving and excess inventories, and writes down inventories to net realizable value if the expected net proceeds from the disposals of excess inventory are less than the carrying cost of the merchandise. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the Company’s condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company’s uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The components of a lease should be split into three categories: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, maintenance, consumables, etc.), and non-components (e.g., property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components. Although separation of lease and non-lease components is required, certain practical expedients are available to entities. Entities electing the practical expedient would not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. The Company’s facilities operating leases have lease and non-lease components to which the Company has elected to apply the practical expedient and account for each lease component and related non-lease component as one single component. The lease component results in a ROU asset being recorded on the balance sheet. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Income Taxes Income taxes are computed using the asset and liability method of accounting. Under the asset and liability method, a deferred income tax asset or liability is recognized for estimated future tax effects attributable to temporary differences and carry-forwards. The measurement of deferred income tax assets is adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to the extent, based on available evidence, that it is more likely than not that such benefits will be realized. The net deferred tax assets and liabilities are presented as noncurrent. The Company utilized the discrete method of accounting for income taxes in the U.S. for the three months ended March 28, 2020 and the three months ended March 30, 2019 as it believes the discrete method results in a more accurate representation of the income tax benefit for the quarter. The Company follows the appropriate guidance relative to uncertain tax positions. This standard provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Uncertain tax positions must meet a recognition threshold of more-likely-than-not in order for those tax positions to be recognized in the financial statements. On March 27, 2020, the U.S. CARES Act was enacted, which provided a substantial tax-and-spending package intended to provide additional economic stimulus to address the impact of the COVID-19 pandemic. The U.S. CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain refundable employee retention credits. As a result of the U.S. CARES Act tax law changes, we recognized a $262 tax benefit related to the increase in interest deduction occurring during the fiscal year ended December 28, 2019 which was fully reserved for. The impact of the CARES Act in prospective periods may differ from our estimate as of March 28, 2020 due to changes in interpretations and assumptions, guidance that may be issued and actions the Company may take in response to the CARES Act. The CARES Act is highly detailed, and the Company will continue to assess the impact that various provisions will have on its business. Net Loss Per Share Basic loss per share for the Company is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share includes the dilutive impact of outstanding stock options and unvested restricted shares. Translation of Foreign Currencies All assets and liabilities of the Company’s foreign subsidiaries, each of whose functional currency is in its local currency, are translated into U.S. dollars at the exchange rate in effect at the end of the quarter and the income and expense accounts of these affiliates have been translated at average rates prevailing during each respective quarter. Resulting translation adjustments are made to a separate component of stockholders’ equity within accumulated other comprehensive loss. Foreign exchange transaction gains and losses are included in the accompanying interim, condensed consolidated statement of operations. 2020 Plan and COVID-19 Pandemic The Company believes that its existing plan will generate sufficient cash which, along with its existing cash and availability under its facilities, will enable it to fund operations through at least the next 12 months. However, should the Company require additional cash, or should the impact from the COVID-19 pandemic discussed below be more severe than expected, the Company would identify other cost reductions or seek additional resources. In March 2020, the COVID-19 outbreak was declared a global pandemic and became widespread in the U.S. While our products are considered “essential” and our distribution center located in California continues to operate, some of our customers have been impacted and, to the extent they operated retail stores, have been required to close their stores and curtail operations. We began to see an impact on orders at the end of March and may continue to see lower demand in the near term as governmental restrictions on businesses remain in place. Due to the uncertainty with respect to when governmental restrictions may be lifted and the widespread nature of the pandemic, we cannot currently predict how it will impact our business in the long term. The Company is not currently aware of any events or circumstances arising from the COVID-19 pandemic that would require us to update any estimates, judgments or materially revise the carrying value of our assets or liabilities. The Company’s estimates may change, however, as events evolve and additional information is obtained, and any such changes will be recognized in the consolidated financial statements.

REVENUE

REVENUE	3 Months Ended
	Mar. 28, 2020
REVENUE
REVENUE	2. REVENUE Disaggregation of Revenue The Company’s revenue is primarily from distinct fixed-price product sales in the juvenile product market, to similar customers and channels utilizing similar types of contracts that are short term in nature (less than one year). The Company does not sell service agreements or goods over a period of time and does not sell or utilize customer financing arrangements or time-and-material contracts. The following is a table that presents net sales by geographical area: For the three months ended March 28, 2020 March 30, 2019 United States $ 35,778 $ 36,236 All Other 4,560 6,302 Net Sales $ 40,338 $ 42,538 All Other consists of Canada, Europe, South America, Mexico, Asia, and the Middle East. Contract Balances The Company does not have any contract assets such as work-in-process or contract liabilities such as customer advances. All trade receivables on the Company's condensed consolidated balance sheets are from contracts with customers. Contract Costs Costs incurred to obtain a contract are capitalized unless short term in nature. As a practical expedient, costs to obtain a contract that are short term in nature are expensed as incurred. All contract costs incurred in the three months ended March 28, 2020 and three months ended March 30, 2019 fall under the provisions of the practical expedient and have therefore been expensed .

DEBT

DEBT	3 Months Ended
	Mar. 28, 2020
DEBT
DEBT	3. DEBT Bank of America Credit Facility. On June 28, 2018, the Company and Summer Infant (USA), Inc., as borrowers, entered into a Second Amended and Restated Loan and Security Agreement with Bank of America, N.A., as agent, the financial institutions party to the agreement from time to time as lenders, and certain subsidiaries of the Company as guarantors, as amended in January and March (as amended, the “Restated BofA Agreement”). The Restated BofA Agreement replaced the Company’s prior credit facility with Bank of America, and provides for an asset-based revolving credit facility with a letter of credit sub-line facility. As of March 28, 2020, total revolver commitments under the credit facility were $48,000. The total borrowing capacity is based on a borrowing base, which is defined as 85% of eligible receivables plus the lesser of (i) 70% of the value of eligible inventory or (ii) 85% of the net orderly liquidation value of eligible inventory, less applicable reserves. The scheduled maturity date of loans under the Restated BofA Agreement is June 28, 2023 (subject to customary early termination provisions). As a result of the amendments made to the Restated BofA Agreement in January and March 2020, (i) the definition of Financial Covenant Trigger Amount was modified, (ii) the lenders' aggregate revolver commitments were reduced, (iii) the definition of EBITDA was amended to exclude certain fees and expenses , (iv) the Company is required to meet certain minimum net sales amounts for each period of three consecutive fiscal months through the three-month period ending December 31, 2020, (v) the Company is required to meet a certain minimum EBITDA (as defined in the Restated BofA Agreement) as of the end of each fiscal month, calculated on a trailing 12-month period, (vi) the applicable margin and applicable unused line fee rate were increased, and (vii) certain reporting requirements were modified. All obligations under the Restated BofA Agreement are secured by substantially all the assets of the Company, including a first priority lien on accounts receivable and inventory and a junior lien on certain assets subject to the Term Loan lender’s first priority lien described below. Summer Infant Canada Limited and Summer Infant Europe Limited, subsidiaries of the Company, are guarantors under the Restated BofA Agreement. Proceeds from the loans were used to satisfy existing debt, pay fees and transaction expenses associated with the closing of the Restated BofA Agreement and may be used to pay obligations under the Restated BofA Agreement, and for lawful corporate purposes, including working capital. Loans under the Restated BofA Agreement bear interest, at the Company’s option, at a base rate or at LIBOR, plus applicable margins based on average quarterly availability under the Restated BofA Agreement. Interest payments are due monthly, payable in arrears. The Company is also required to pay an annual non-use fee on unused amounts, as well as other customary fees as are set forth in the Restated BofA Agreement. The Restated BofA Agreement contains customary affirmative and negative covenants. Among other restrictions, the Company is restricted in its ability to incur additional debt, make acquisitions or investments, dispose of assets, or make distributions unless in each case certain conditions are satisfied. The Company is also required to meet certain financial covenants through the end of fiscal 2020, specifically (a) a minimum net sales amount for each period of three consecutive fiscal months, measured at the end of each month, and (b) a trailing, 12-month minimum adjusted EBITDA amount (as defined in the Restated BofA Agreement), measured at the end of each fiscal month. In addition, if availability falls below the following amounts, a springing covenant would be in effect requiring the Company to maintain a fixed charge coverage ratio at the end of each fiscal month of at least 1.0 to 1.0 for the twelve-month period then ended: (i) $3,000 through May 31, 2020, (ii) $3,500 from June 1 through June 30, 2020, (iii) $3,750 from July 1 through August 31, 2020, (iv) $4,000 from September 1 through September 30, 2020, (v) $4,250 from October 1 through October 31, 2020, (vi) $4,500 from November 1 through November 30, 2020, and (vii) $5,000 at any time from and after December 1, 2020. The Restated BofA Agreement also contains customary events of default, including a cross default with the Term Loan Agreement or the occurrence of a change of control. In the event of a default, the lenders may declare all of the obligations of the Company and its subsidiaries under the Restated BofA Agreement immediately due and payable. For events of default relating to insolvency and receivership, all outstanding obligations automatically become due and payable without any action on the part of the lenders. As of March 28, 2020, under the Restated BofA Agreement, the rate on base-rate loans was 5.0% and the rate on LIBOR-rate loans was 3.5%. The amount outstanding on the Restated BofA Agreement at March 28, 2020, was $28,063 and borrowing availability was $5,626. The amendments executed in the three months ended March 28, 2020 were evaluated, to determine the proper accounting treatment for the transactions. Accordingly, debt extinguishment accounting was used to account for the reduction in the total revolver commitments under the credit facility, resulting in the write off of $266 in remaining unamortized deferred financing costs during the three months ended March 28, 2020. Subsequent to fiscal quarter end, on April 29, the Company entered into further amendments to the Restated BofA Agreement. See Note 8 for information regarding these amendments. Term Loan Agreement. On June 28, 2018, the Company and Summer Infant (USA), Inc., as borrowers, entered into a Term Loan and Security Agreement with Pathlight Capital LLC, as agent, each lender from time to time a party thereto , and certain subsidiaries of the Company as guarantors, as amended in January and March 2020 (as amended, the “Term Loan Agreement”) providing for a $17,500 term loan (the “Term Loan”). Proceeds from the Term Loan were used to satisfy existing debt, pay fees and transaction expenses associated with the closing of the Term Loan and may be used to pay obligations under the Term Loan Agreement, and for lawful corporate purposes, including working capital. The Term Loan is secured by a lien on certain assets of the Company, including a first priority lien on intellectual property, machinery and equipment, and a pledge of (i) 100% of the ownership interests of domestic subsidiaries and (ii) 65% of the ownership interests in certain foreign subsidiaries of the Company, and a junior lien on certain assets subject to the liens under the Restated BofA Agreement described above. The Term Loan matures on June 28, 2023. Summer Infant Canada Limited and Summer Infant Europe Limited, subsidiaries of the Company, are guarantors under the Term Loan Agreement. As a result of the amendments made to the Term Loan Agreement in January and March 2020, (i) the definition of IP Advance Rate Reduction was modified, (ii) the definition of Term Loan Borrowing Base was modified to deduct a specified equipment reserve amount from the calculation of the borrowing base, (iii) the definitions of Financial Covenant trigger and EBITDA were amended consistent with the Restated BofA Agreement, (iv) consistent with the Restated BofA Agrement, the Company is required to meet certain minimum net sales amounts for each period of three consecutive fiscal months through the three-month period ending December 31, 2020; and certain minimum EBITDA as of the end of each fiscal month, calculated on a trailing 12-month period, (v) principal payments on the term loan were suspended for 2020, such payments to resume in March 2021, and (vi) certain reporting requirements were modified. In addition, as described below, beginning March 10, 2020, the term loan began to bear additional interest, to be paid in kind ("PIK interest") at annual rate of 4.0%. The principal of the Term Loan is being repaid, on a quarterly basis, in installments of $219, with the first installment having been paid on December 1, 2018, until paid in full on termination. In connection with the March 2020 amendment, principal payments on the Term Loan were suspended for 2020, to resume in March 2021. The Term Loan bears interest at an annual rate equal to LIBOR, plus 9.0%. Interest payments are due monthly, in arrears. In addition, the Term Loan began to accrue PIK (payment in kind) interest at an annual rate of 4.0% in March 2020, which interest will become payable upon the earlier to occur of (i) the repayment of the Term Loan in full, (ii) a sale or merger of the Company, (iii) the occurrence of default or event of default under the Term Loan Agreement, or (iv) the Company achieving adjusted EBITDA of $12 million (calculated on a trailing, 12-month basis). If, and only if, the PIK interest becomes due and payable as a result of the Company achieving the adjusted EBITDA event noted in clause (iv), then the Company will pay all PIK interest then due and thereafter, PIK interest will continue to accrue and be paid on each subsequent anniversary of such event. Obligations under the Term Loan Agreement are also subject to a prepayment penalty if the Term Loan is repaid prior to the third anniversary of the closing of the Term Loan. The Term Loan Agreement contains customary affirmative and negative covenants that are substantially the same as the Restated BofA Agreement. Consistent with the Restated BofA Agreement, the Company is also required to meet certain financial covenants through the end of fiscal 2020, specifically (a) a minimum net sales amount for each period of three consecutive fiscal months, measured at the end of each month, and (b) a trailing, 12-month minimum adjusted EBITDA amount (as defined in the Restated BofA Agreement), measured at the end of each fiscal month. In addition, consistent with the Restated BofA Agreement, if availability falls below a specified amount as described above, then the Company must maintain a fixed charge coverage ratio at the end of each fiscal month of at least 1.0 to 1.0 for the twelve-month period then ended. The Term Loan Agreement also contains events of default, including a cross default with the Restated BofA Agreement or the occurrence of a change of control. In the event of a default, the lenders may declare all of the obligations of the Company and its subsidiaries under the Term Loan Agreement immediately due and payable. For events of default relating to insolvency and receivership, all outstanding obligations automatically become due and payable without any action on the part of the lenders. As of March 28, 2020, the interest rate on the Term Loan was 10.6% of cash interest and 4.0% of PIK interest. The amount outstanding on the Term Loan at March 28, 2020 was $16,406. Aggregate maturities related to the Restated BofA Agreement and the Term Loan Agreement are as follows: Fiscal Year ending: 2020 2021 875 2022 875 2023 42,719 Total $ 44,469 Unamortized debt issuance costs were $2,491 at March 28, 2020 and $2,398 at December 28, 2019, and are presented as a direct deduction of long-term debt on the consolidated balance sheets. Subsequent to fiscal quarter end, on April 29, the Company entered into further amendments to the Term Loan Agreement. See Note 8 for information regarding these amendments. Due to the uncertainty with respect to the duration of the COVID-19 pandemic and its impact on the U.S. economy in the short and long term, it is possible that demand for our products may decrease and, as a result, we may be unable to meet the financial covenants under the Restated BofA Agreement and Term Loan Agreement. In such a case, the Company would seek to mitigate such an impact through cost reductions, restructuring its existing indebtedness, or amending or seeking relief from these covenants from its lenders.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	3 Months Ended
	Mar. 28, 2020
INTANGIBLE ASSETS
INTANGIBLE ASSETS	4. INTANGIBLE ASSETS Intangible assets consisted of the following: March 28, December 28, 2020 2019 Brand names $ 11,819 $ 11,819 Patents and licenses 4,126 4,101 Customer relationships 6,946 6,946 Other intangibles 1,882 1,882 24,773 24,748 Less: Accumulated amortization (11,974) (11,852) Intangible assets, net $ 12,799 $ 12,896 The amortization period for the majority of the intangible assets ranges from 5 to 20 years for those assets that have an estimated life; certain of the assets have indefinite lives (brand names). Total of intangibles not subject to amortization amounted to $8,400 as of March 28, 2020 and December 28, 2019.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 28, 2020
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	5. COMMITMENTS AND CONTINGENCIES Leases The Company leases office space and distribution centers primarily related to its Riverside California, Canada, United Kingdom, and Hong Kong operations. In connection with these leases, there were no cash incentives from the landlord to be used for the construction of leasehold improvements within the facility. Our headquarters in Woonsocket, Rhode Island continues to be accounted for as a sale-leaseback lease. Beginning in April 2020, the Company subleased a portion of its Riverside warehouse lease. The sub-lease has an initial term of one year, with an option to extend on a month to month basis for the remainder of the head lease. The Company will record the sublease income net of lease expense. The Company identified and assessed the following significant assumptions in recognizing the right-of-use asset and corresponding liabilities: · Expected lease term – The expected lease term includes both contractual lease periods and, when applicable, cancelable option periods when it is reasonably certain that the Company would exercise such options. As of March 28, 2020, these leases had remaining lease terms between 1.5 and 3.3 years. The Canada lease has one 5-year extension option that has also not been included in the lease term. · Incremental borrowing rate – The Company’s lease agreements do not provide an implicit rate. As the Company does not have any external borrowings for comparable terms of its leases, the Company estimated the incremental borrowing rate based on secured borrowings available to the Company for the next 5 years. This is the rate the Company would have to pay if borrowing on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. · Lease and non - lease components – In certain cases the Company is required to pay for certain additional charges for operating costs, including insurance, maintenance, taxes, and other costs incurred, which are billed based on both usage and as a percentage of the Company’s share of total square footage. The Company determined that these costs are non-lease components and they are not included in the calculation of the lease liabilities because they are variable. Payments for these variable, non-lease components are considered variable lease costs and are recognized in the period in which the costs are incurred. The components of the Company’s lease expense for the three months ended March 28, 2020 and March 30, 2019 were as follows: For the three months ended March 28, 2020 March 30, 2019 Operating lease cost $ 621 $ 623 Variable lease cost 267 362 Total lease cost $ 888 $ 985 Weighted-average remaining lease term years Weighted Average discount rate: % Cash paid for amounts included in the measurement of the Company’s lease liabilities were $662 and $648 for the three months ended March 28, 2020 and March 30, 2019 respectively. As of March 28, 2020, the present value of maturities of the Company’s operating lease liabilities were as follows: Fiscal Year Ending: 2020 $ 2,005 2021 2,136 2022 299 2024 143 2024 Less imputed interest (216) Total $ 4,367 Subsequent to fiscal quarter end, on April 24, 2020, the Company entered into an amendment to the lease for its Woonsocket headquarters. See Note 8 for information regarding this amendment. Litigation The Company is a party to various routine claims, litigation and administrative complaints incidental to its business, including claims involving product liability, employee matters and other general liability claims, most of which are covered by insurance. We are not aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, results of operations or financial condition.

SHARE BASED COMPENSATION

SHARE BASED COMPENSATION	3 Months Ended
	Mar. 28, 2020
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION	6. SHARE BASED COMPENSATION The Company is currently authorized to issue up to 1,700,000 shares for equity awards under the Company’s 2012 Incentive Compensation Plan (as amended, “2012 Plan”). Periodically, the Company may also grant equity awards outside of its 2012 Plan as inducement grants for new hires. Under the 2012 Plan, awards may be granted to participants in the form of non-qualified stock options, incentive stock options, restricted stock, deferred stock, restricted stock units and other stock-based awards. Subject to the provisions of the plans, awards may be granted to employees, officers, directors, advisors and consultants who are deemed to have rendered or are able to render significant services to the Company or its subsidiaries and who are deemed to have contributed or to have the potential to contribute to the Company’s success. The Company accounts for options under the fair value recognition standard. Share-based compensation expense, net of forfeitures, for the three months ended March 28, 2020 and March 30, 2019 was a credit of $11 and expense of $48, respectively. Share based compensation expense is included in general and administrative expenses. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the table below. The Company uses the simplified method to estimate the expected term of the options, but used an estimate for grants of “plain vanilla” stock options based on a formula prescribed by the Securities and Exchange Commission. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Share-based compensation expense recognized in the consolidated financial statements is based on awards that are ultimately expected to vest. As of March 28, 2020, there were 65,619 stock options outstanding and 13,669 unvested restricted shares outstanding. During the three months ended March 28, 2020, the Company did not grant stock options or shares of restricted stock. The following table summarizes the weighted average assumptions used for stock options granted during the three months ended March 30, 2019. For the Three Months Ended March 30, 2019 Expected life (in years) Risk-free interest rate % Volatility % Dividend yield % Forfeiture rate % As of March 28, 2020, there were 93,244 shares available to grant under the 2012 Plan.

WEIGHTED AVERAGE COMMON SHARES

WEIGHTED AVERAGE COMMON SHARES	3 Months Ended
	Mar. 28, 2020
WEIGHTED AVERAGE COMMON SHARES
WEIGHTED AVERAGE COMMON SHARES	7. WEIGHTED AVERAGE COMMON SHARES Basic and diluted earnings or loss per share (“EPS”) is based upon the weighted average number of common shares outstanding during the period. Diluted weighted average number of common shares outstanding also included common stock equivalents such as stock options and restricted shares. The Company does not include the anti-dilutive effect of common stock equivalents in the calculation of dilutive common shares outstanding. The computation of diluted common shares for the three months ended March 28, 2020 excluded 65,619 stock options and 13,669 shares of restricted stock outstanding. The computation of diluted common shares for the three months ended March 30, 2019 excluded 115,179 stock options and 22,856 shares of restricted stock outstanding.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 28, 2020
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	8. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the filing date of this Quarterly Report on Form 10-Q and determined that no subsequent events occurred that would require recognition in the consolidated financial statements or disclosure in the notes thereto except as follows: Amendments to Restated BofA Agreement On April 29, 2020, the Company and Summer Infant (USA), Inc., as borrowers and certain subsidiaries of the Company as guarantors, entered into Amendment No. 5 to the Restated BofA Agreement. The amendment modified the terms of the Restated BofA Agreement to (a) increase the applicable margins; (b) add a LIBOR floor of 0.75% and (c) with respect to the financial covenants (i) for the months ending April through August 2020, adjusted the minimum net sales amounts the Company must meet for each period of three consecutive fiscal months, and (ii) for the months ending April through December 2020, adjusted the minimum EBITDA (as defined in the Restated BofA Agreement) the Company must meet as of the end of each fiscal month, calculated on a trailing 12-month period. Amendments to Term Loan Agreement On April 29, 2020, the Company and Summer Infant (USA), Inc., as borrowers, and certain subsidiaries of the Company as guarantors, entered into a letter agreement amending Amendment No. 4 to the Term Loan Agreement. The letter agreement modified the terms of Amendment No. 4 to the Term Loan Agreement to (a) add a LIBOR floor of 0.75% and (b) modify the financial covenants consistent with Amendment No. 5 to the BofA Amendment. Amendment to Lease On April 24, 2020, Summer Infant (USA), Inc. (“Summer USA”), a wholly-owned subsidiary of the Company, entered into the Third Amendment to Lease (the “Amendment”) with Faith Realty II, LLC (the “Landlord”) dated March 24, 2009. The Landlord is a company owned by Jason Macari, a former officer and director of the Company and a holder of more than ten percent of the Company’s outstanding common stock. The Amendment modified the lease to, among other things, (i) extend the current term of the lease to June 2025, (ii) reduce the premises occupied by Summer USA under the lease, (iii) reduce the annual base rent payments for the term of the lease and (iv) provide Summer USA two options to extend the term of the lease for an additional period of five-year terms upon prior written notice. Sublease of Warehouse Space Effective April 1, 2020, the Company subleased a portion of its warehouse located in Riverside, California. The initial term of the sublease is one year, and thereafter shall continue on a month-to-month basis until the termination of the master lease or, if earlier, if terminated upon 30 days’ prior written notice of the Company or the sublessor. The Company will receive base rent of $83 per month for the initial term of the sublease.

BASIS OF PRESENTATION AND SUM_2

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 28, 2020
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassification	Reclassification Previously reported amounts have been revised in the accompanying condensed consolidated statement of cash flows to properly state certain right to use assets and lease liabilities. These revisions had no impact on the company’s net cash provided by or used in operating activites.
Revenue Recognition	Revenue Recognition The Company recognizes revenue to depict the transfer of promised goods to customers in an amount that reflects what it expects to receive in exchange for the goods. The Company’s principal activities from which it generates its revenue is product sales. The Company has one reportable segment of business. Revenue is measured based on consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation in a contract by transferring control over a product to a customer when product delivery occurs. Consideration is typically paid approximately 60 days from the time control is transferred. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in selling costs. A performance obligation is a promise in a contract to transfer a distinct product to the customer, which for the Company is transfer of juvenile products to its customers. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. A transaction price is the amount of consideration the Company expects to receive under the arrangement. The Company is required to estimate variable consideration (if any) and to factor that estimation into the determination of the transaction price. The Company conducts its business with customers through valid purchase or sales orders each of which is considered a separate contract because individual orders are not interdependent on one another. Product transaction prices on a purchase or sale order are discrete and stand-alone. Purchase or sales orders may be issued under either a customer master service agreement or a reseller allowance agreement. Purchase or sales orders, master service agreements, and reseller allowance agreements, which are specific and unique to each customer, may include product price discounts, markdown allowances, return allowances, and/or volume rebates which reduce the consideration due from customers. Variable consideration is estimated using the most likely amount method, which is based on historical experience as well as current information such as sales forecasts. Contracts may also include cooperative advertising arrangements where the Company allows a discount from invoiced product amounts in exchange for customer purchased advertising that features the Company’s products. These allowances are generally based upon product purchases or specific advertising campaigns. Such allowances are accrued when the related revenue is recognized. These cooperative advertising arrangements provide a distinct benefit and fair value and are accounted for as direct selling expenses.
Use of Estimates	Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain reported amounts of revenues, expenses, assets, liabilities and related disclosures. These estimates are based on management’s best knowledge as of the date the financial statements are published of current events and actions the Company may undertake in the future. Accordingly, actual results could differ from those estimates.
Trade Receivables	Trade Receivables Trade receivables are carried at their outstanding unpaid principal balances reduced by an allowance for doubtful accounts. The Company estimates doubtful accounts based on historical bad debts, factors related to specific customers’ ability to pay and current economic trends. The Company writes off accounts receivable against the allowance when a balance is determined to be uncollectible. Amounts are considered to be uncollectable based upon historical experience and management’s evaluation of outstanding accounts receivable. Changes in the allowance for doubtful accounts are as follows: For the three months ended March 28, 2020 March 30, 2019 Allowance for doubtful accounts, beginning of period $ 542 $ 304 Charges to costs and expenses, net 23 9 Account write-offs — — Allowance for doubtful accounts, end of period $ 565 $ 313
Inventory Valuation	Inventory Valuation Inventory is comprised mostly of finished goods and some component parts and is stated at the lower of cost using the first-in, first-out (“FIFO”) method, or net realizable value. The Company regularly reviews slow-moving and excess inventories, and writes down inventories to net realizable value if the expected net proceeds from the disposals of excess inventory are less than the carrying cost of the merchandise.
Leases	Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the Company’s condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company’s uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The components of a lease should be split into three categories: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, maintenance, consumables, etc.), and non-components (e.g., property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components. Although separation of lease and non-lease components is required, certain practical expedients are available to entities. Entities electing the practical expedient would not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. The Company’s facilities operating leases have lease and non-lease components to which the Company has elected to apply the practical expedient and account for each lease component and related non-lease component as one single component. The lease component results in a ROU asset being recorded on the balance sheet. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Income Taxes	Income Taxes Income taxes are computed using the asset and liability method of accounting. Under the asset and liability method, a deferred income tax asset or liability is recognized for estimated future tax effects attributable to temporary differences and carry-forwards. The measurement of deferred income tax assets is adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to the extent, based on available evidence, that it is more likely than not that such benefits will be realized. The net deferred tax assets and liabilities are presented as noncurrent. The Company utilized the discrete method of accounting for income taxes in the U.S. for the three months ended March 28, 2020 and the three months ended March 30, 2019 as it believes the discrete method results in a more accurate representation of the income tax benefit for the quarter. The Company follows the appropriate guidance relative to uncertain tax positions. This standard provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Uncertain tax positions must meet a recognition threshold of more-likely-than-not in order for those tax positions to be recognized in the financial statements. On March 27, 2020, the U.S. CARES Act was enacted, which provided a substantial tax-and-spending package intended to provide additional economic stimulus to address the impact of the COVID-19 pandemic. The U.S. CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain refundable employee retention credits. As a result of the U.S. CARES Act tax law changes, we recognized a $262 tax benefit related to the increase in interest deduction occurring during the fiscal year ended December 28, 2019 which was fully reserved for. The impact of the CARES Act in prospective periods may differ from our estimate as of March 28, 2020 due to changes in interpretations and assumptions, guidance that may be issued and actions the Company may take in response to the CARES Act. The CARES Act is highly detailed, and the Company will continue to assess the impact that various provisions will have on its business.
Net Loss Per Share	Net Loss Per Share Basic loss per share for the Company is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share includes the dilutive impact of outstanding stock options and unvested restricted shares.
Translation of Foreign Currencies	Translation of Foreign Currencies All assets and liabilities of the Company’s foreign subsidiaries, each of whose functional currency is in its local currency, are translated into U.S. dollars at the exchange rate in effect at the end of the quarter and the income and expense accounts of these affiliates have been translated at average rates prevailing during each respective quarter. Resulting translation adjustments are made to a separate component of stockholders’ equity within accumulated other comprehensive loss. Foreign exchange transaction gains and losses are included in the accompanying interim, condensed consolidated statement of operations.
2020 Plan and COVID-19 Pandemic	2020 Plan and COVID-19 Pandemic The Company believes that its existing plan will generate sufficient cash which, along with its existing cash and availability under its facilities, will enable it to fund operations through at least the next 12 months. However, should the Company require additional cash, or should the impact from the COVID-19 pandemic discussed below be more severe than expected, the Company would identify other cost reductions or seek additional resources. In March 2020, the COVID-19 outbreak was declared a global pandemic and became widespread in the U.S. While our products are considered “essential” and our distribution center located in California continues to operate, some of our customers have been impacted and, to the extent they operated retail stores, have been required to close their stores and curtail operations. We began to see an impact on orders at the end of March and may continue to see lower demand in the near term as governmental restrictions on businesses remain in place. Due to the uncertainty with respect to when governmental restrictions may be lifted and the widespread nature of the pandemic, we cannot currently predict how it will impact our business in the long term. The Company is not currently aware of any events or circumstances arising from the COVID-19 pandemic that would require us to update any estimates, judgments or materially revise the carrying value of our assets or liabilities. The Company’s estimates may change, however, as events evolve and additional information is obtained, and any such changes will be recognized in the consolidated financial statements.

BASIS OF PRESENTATION AND SUM_3

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 28, 2020
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary of changes in the allowance for doubtful accounts	Changes in the allowance for doubtful accounts are as follows: For the three months ended March 28, 2020 March 30, 2019 Allowance for doubtful accounts, beginning of period $ 542 $ 304 Charges to costs and expenses, net 23 9 Account write-offs — — Allowance for doubtful accounts, end of period $ 565 $ 313

REVENUE (Tables)

REVENUE (Tables)	3 Months Ended
	Mar. 28, 2020
REVENUE
Schedule of net sales by geographical area	The following is a table that presents net sales by geographical area: For the three months ended March 28, 2020 March 30, 2019 United States $ 35,778 $ 36,236 All Other 4,560 6,302 Net Sales $ 40,338 $ 42,538

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Mar. 28, 2020
DEBT
Schedule of aggregate maturities of the Restated BofA Agreement and the Term Loan Agreement	Fiscal Year ending: 2020 2021 875 2022 875 2023 42,719 Total $ 44,469

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 28, 2020
INTANGIBLE ASSETS
Schedule of intangible assets	March 28, December 28, 2020 2019 Brand names $ 11,819 $ 11,819 Patents and licenses 4,126 4,101 Customer relationships 6,946 6,946 Other intangibles 1,882 1,882 24,773 24,748 Less: Accumulated amortization (11,974) (11,852) Intangible assets, net $ 12,799 $ 12,896

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	3 Months Ended
	Mar. 28, 2020
COMMITMENTS AND CONTINGENCIES
Schedule of lease expense	The components of the Company’s lease expense for the three months ended March 28, 2020 and March 30, 2019 were as follows: For the three months ended March 28, 2020 March 30, 2019 Operating lease cost $ 621 $ 623 Variable lease cost 267 362 Total lease cost $ 888 $ 985 Weighted-average remaining lease term years Weighted Average discount rate: %
Schedule of maturities of the operating lease liabilities	As of March 28, 2020, the present value of maturities of the Company’s operating lease liabilities were as follows: Fiscal Year Ending: 2020 $ 2,005 2021 2,136 2022 299 2024 143 2024 Less imputed interest (216) Total $ 4,367

SHARE BASED COMPENSATION (Table

SHARE BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 28, 2020
SHARE BASED COMPENSATION
Summary of weighted average assumptions used for stock options granted	For the Three Months Ended March 30, 2019 Expected life (in years) Risk-free interest rate % Volatility % Dividend yield % Forfeiture rate %

BASIS OF PRESENTATION AND SUM_4

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 28, 2020USD ($)segment	Mar. 30, 2019USD ($)	Dec. 28, 2019USD ($)
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Tax benefit recognized related to increase in interest deduction from tax law changes			$ 262
Revenue Recognition
Number of reportable segments | segment	1
Days in accounts receivable	P60D
Changes in the allowance for doubtful accounts
Allowance for doubtful accounts, beginning of period	$ 542	$ 304	304
Charges to costs and expenses	23	9
Allowance for doubtful accounts, end of period	565	$ 313	542
Recently Issued Accounting Pronouncements
Operating lease, right-to-use asset	3,959		$ 4,578
Operating lease liability	$ 4,367

REVENUE (Details)

REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 28, 2020	Mar. 30, 2019
Net sales by geographical area
Net sales	$ 40,338	$ 42,538
United States
Net sales by geographical area
Net sales	35,778	36,236
All Other
Net sales by geographical area
Net sales	$ 4,560	$ 6,302

DEBT - Bank of America Credit F

DEBT - Bank of America Credit Facility (Details) $ in Thousands	3 Months Ended
	Mar. 28, 2020USD ($)
DEBT
Write off of unamortized deferred financing costs	$ 266
Restated Bank of America Agreement | Credit Facility
DEBT
Amount outstanding on credit facility	28,063
Borrowing availability	5,626
Write off of unamortized deferred financing costs	$ 266
Restated Bank of America Agreement | Credit Facility | Financial Covenant | Minimum
DEBT
Fixed charge coverage ratio at the end of each fiscal month	1
Restated Bank of America Agreement | Credit Facility | Twelve-Month Period ending on May 31, 2020
DEBT
Financial covenant trigger amount	$ 3,000
Restated Bank of America Agreement | Credit Facility | June 1 through June 30, 2020
DEBT
Financial covenant trigger amount	3,500
Restated Bank of America Agreement | Credit Facility | July 1 through August 31, 2020
DEBT
Financial covenant trigger amount	3,750
Restated Bank of America Agreement | Credit Facility | September 1 through September 30, 2020
DEBT
Financial covenant trigger amount	4,000
Restated Bank of America Agreement | Credit Facility | October 1 through October 31, 2020
DEBT
Financial covenant trigger amount	4,250
Restated Bank of America Agreement | Credit Facility | November 1 through November 30, 2020
DEBT
Financial covenant trigger amount	4,500
Restated Bank of America Agreement | Credit Facility | From December 1, 2020 and later
DEBT
Financial covenant trigger amount	$ 5,000
Restated Bank of America Agreement | Credit Facility | LIBOR
DEBT
Interest rate during the period	3.50%
Restated Bank of America Agreement | Credit Facility | Base rate
DEBT
Interest rate during the period	5.00%
Restated Bank of America Agreement | Revolving Facility
DEBT
Maximum borrowing capacity	$ 48,000
Borrowing base as a percentage of eligible receivables	85.00%
Borrowing base as a percentage of eligible inventory	70.00%
Borrowing base as a percentage of net orderly liquidation value of eligible inventory and less reserves	85.00%

DEBT - Term Loan Agreement (Det

DEBT - Term Loan Agreement (Details) $ in Thousands	Jun. 28, 2018USD ($)	Mar. 28, 2020USD ($)
DEBT
PIK interest		4.00%
Term Loan
DEBT
Face amount of loan	$ 17,500
Percentage of ownership interests of domestic subsidiaries pledged	100.00%
Percentage of ownership interests of foreign subsidiaries pledged	65.00%
Quarterly basis installment amount		$ 219
Interest rate on borrowings		10.60%
Accrued PIK interest annual rate		4.00%
Adjusted EBITDA		$ 12,000
Amount outstanding		$ 16,406
Term Loan | Minimum
DEBT
Fixed charge coverage ratio at the end of each fiscal month		1
Term Loan | LIBOR
DEBT
Interest rate basis		LIBOR
Applicable margin (as a percent)		9.00%

DEBT - Aggregate maturities (De

DEBT - Aggregate maturities (Details) - USD ($) $ in Thousands	Mar. 28, 2020	Dec. 28, 2019
Aggregate maturities related to the Restated BofA Agreement and the Term Loan Agreement
2020	$ 0
2021	875
2022	875
2023	42,719
Total	44,469
Unamortized debt issuance costs	$ 2,491	$ 2,398

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 28, 2020	Dec. 28, 2019
INTANGIBLE ASSETS
Intangible assets, gross	$ 24,773	$ 24,748
Less: Accumulated amortization	(11,974)	(11,852)
Intangible assets, net	12,799	12,896
Intangibles not subject to amortization	$ 8,400	8,400
Minimum
INTANGIBLE ASSETS
Amortization period of intangible assets	5 years
Maximum
INTANGIBLE ASSETS
Amortization period of intangible assets	20 years
Patents and licenses
INTANGIBLE ASSETS
Intangible assets, gross	$ 4,126	4,101
Customer relationships
INTANGIBLE ASSETS
Intangible assets, gross	6,946	6,946
Other intangibles
INTANGIBLE ASSETS
Intangible assets, gross	1,882	1,882
Brand names
INTANGIBLE ASSETS
Intangible assets, gross	$ 11,819	$ 11,819

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 28, 2020USD ($)	Mar. 30, 2019USD ($)	Sep. 28, 2019item
Leases
Term of secured borrowings used to estimate incremental borrowing rate (in years)			5 years
Cash paid for amounts included in the measurement of the Company's lease liabilities	$ 662	$ 648
Components of the lease expense (Topic 842)
Operating lease cost	621	623
Variable lease cost	267	362
Total lease cost	$ 888	$ 985
Weighted-average remaining lease term (in years)	1 year 10 months 6 days
Weighted Average discount rate:	5.00%
Maturities of the operating lease liabilities (Topic 842)
2020	$ 2,005
2021	2,136
2022	299
2023	143
2024	0
Less imputed interest	(216)
Total	$ 4,367
Minimum
Leases
Remaining lease term (in years)			1 year 6 months
Maximum
Leases
Remaining lease term (in years)			3 years 3 months 18 days
Canada
Leases
Operating lease, option to extend			True
Number of options to extend | item			1
Extension term (in years)			5 years

SHARE BASED COMPENSATION (Detai

SHARE BASED COMPENSATION (Details) - 2012 Plan - USD ($) $ in Thousands	3 Months Ended
	Mar. 28, 2020	Mar. 30, 2019
SHARE BASED COMPENSATION
Number of shares authorized under the plan	1,700,000
Shares available to grant	93,244
Weighted average assumptions
Expected life (in years)	4 years 9 months 18 days
Risk-free interest rate	2.50%
Volatility	66.90%
Dividend yield	0.00%
Forfeiture rate	23.80%
General and Administrative Expense
SHARE BASED COMPENSATION
Share-based compensation expense	$ (11)	$ 48
Stock Options
SHARE BASED COMPENSATION
Stock options outstanding (in shares)	65,619
Restricted Stock Awards
SHARE BASED COMPENSATION
Unvested restricted shares outstanding		13,669

WEIGHTED AVERAGE COMMON SHARES

WEIGHTED AVERAGE COMMON SHARES (Details) - shares	3 Months Ended
	Mar. 28, 2020	Mar. 30, 2019
Stock Options
WEIGHTED AVERAGE COMMON SHARES
Anti-dilutive securities excluded from the computation of diluted earnings per share (in shares)	65,619	115,179
Restricted Stock Awards
WEIGHTED AVERAGE COMMON SHARES
Anti-dilutive securities excluded from the computation of diluted earnings per share (in shares)	13,669	22,856

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Subsequent events $ in Thousands	Apr. 29, 2020	Apr. 24, 2020item	Apr. 01, 2020USD ($)
Subsequent events
Initial term of sublease (in years)			1 year
Base rent per month for sublease | $			$ 83
Lease Amendment
Subsequent events
Percentage of Company stock held by a related party		10.00%
Extension term (in years)		5 years
Number of options to extend lease | item		2
Amendments to Restated BofA Agreement | LIBOR | Minimum
Subsequent events
Interest rate during the period	0.75%
Amendments to Term Loan Agreement | LIBOR | Minimum
Subsequent events
Interest rate during the period	0.75%