Summer Infant (SUMR) 10-Q 18 May 21 2021 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Apr. 03, 2021	May 14, 2021
Document and Entity Information
Entity Registrant Name	Summer Infant, Inc.
Document Type	10-Q
Document Period End Date	Apr. 3, 2021
Title of 12(b) Security	Common Stock, par value $0.0001
Trading Symbol	SUMR
Security Exchange Name	NASDAQ
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		2,167,520
Entity Central Index Key	0001314772
Current Fiscal Year End Date	--01-01
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 03, 2021	Jan. 02, 2021
CURRENT ASSETS
Cash and cash equivalents	$ 447	$ 510
Trade receivables, net of allowance for doubtful accounts	28,610	25,995
Inventory, net	16,554	25,123
Prepaids and other current assets	1,489	1,850
TOTAL CURRENT ASSETS	47,100	53,478
Property and equipment, net	4,494	4,789
Other intangible assets, net	11,629	11,739
Right of use assets, noncurrent	16,524	3,625
Deferred tax assets, net	1,006	1,001
Other assets	105	105
TOTAL ASSETS	80,858	74,737
CURRENT LIABILITIES
Accounts payable	21,618	27,986
Accrued expenses	6,557	6,064
Lease liabilities, current	2,534	2,349
Current portion of long term debt	2,321	2,125
TOTAL CURRENT LIABILITIES	33,030	38,524
Long-term debt, less current portion and unamortized debt issuance costs	26,401	27,536
Lease liabilities, noncurrent	14,216	1,493
Other liabilities	1,868	2,064
TOTAL LIABILITIES	75,515	69,617
STOCKHOLDERS' EQUITY
Preferred Stock, $0.0001 par value, 1,000,000 authorized, none issued or outstanding at April 3, 2021 and January 2, 2021, respectively
Common Stock $0.0001 par value, authorized, issued and outstanding of 49,000,000, 2,163,793 and 2,133,609 at April 3, 2021 and 49,000,000, 2,162,459, and 2,132,275 at January 2, 2021, respectively	2	2
Treasury Stock at cost (30,184 shares at April 3, 2021 and January 2, 2021)	(1,283)	(1,283)
Additional paid-in capital	77,981	77,979
Accumulated deficit	(69,930)	(70,190)
Accumulated other comprehensive loss	(1,427)	(1,388)
TOTAL STOCKHOLDERS' EQUITY	5,343	5,120
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 80,858	$ 74,737

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Apr. 03, 2021	Jan. 02, 2021
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)	$ 0.0001	$ 0.0001
Common Stock, authorized	49,000,000	49,000,000
Common Stock, issued	2,163,793	2,162,459
Common Stock, outstanding	2,133,609	2,132,275
Treasury Stock at cost, shares	30,184	30,184

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Mar. 28, 2020
Condensed Consolidated Statements of Operations
Net sales	$ 36,201	$ 40,338
Cost of goods sold	25,544	27,835
Gross profit	10,657	12,503
General and administrative expenses	7,027	8,147
Selling expense	2,407	3,444
Depreciation and amortization	560	967
Operating income (loss)	663	(55)
Interest expense, net	336	1,410
Income (loss) before income taxes	327	(1,465)
Provision (benefit) for income taxes	67	(255)
NET INCOME (LOSS)	$ 260	$ (1,210)
Net income (loss) per share:
BASIC	$ 0.12	$ (0.57)
DILUTED	$ 0.12	$ (0.57)
Weighted average shares outstanding:
BASIC	2,133,061	2,109,264
DILUTED	2,161,789	2,109,264

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Mar. 28, 2020
Condensed Consolidated Statements of Comprehensive Loss
Net income (loss)	$ 260	$ (1,210)
Other comprehensive loss:
Changes in foreign currency translation adjustments	(39)	(55)
Comprehensive income (loss)	$ 221	$ (1,265)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Mar. 28, 2020
Cash flows from operating activities:
Net income (loss)	$ 260	$ (1,210)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	560	967
Stock-based compensation expense, net of forfeitures	(7)	(11)
Provision for allowance for doubtful accounts	6	23
Amortization of deferred financing costs	58	182
Write off of unamortized deferred financing costs		266
Amortization of right of use assets	649	619
Changes in assets and liabilities
(Increase) decrease in trade receivables	(2,657)	2,099
Decrease in inventory	8,516	2,692
Decrease of lease liability	(639)	(673)
Decrease (increase) in prepaids and other assets	386	(49)
(Decrease) increase in accounts payable and accrued expenses	(5,805)	164
Net cash provided by operating activities	1,321	5,069
Cash flows from investing activities:
Acquisitions of property and equipment	(191)	(220)
Acquisitions of intangible assets		(25)
Net cash used in investing activities	(191)	(245)
Cash flows from financing activities:
Issuance of common stock upon exercise of stock options	9
Repayments of New Term Loan	(375)
Repayment of FILO Loan	(156)
Net repayment on financing arrangements	(662)	(4,705)
Net cash used in financing activities	(1,184)	(4,705)
Effect of exchange rate changes on cash and cash equivalents	(9)	179
Net (decrease) increase in cash and cash equivalents	(63)	298
Cash and cash equivalents, beginning of period	510	395
Cash and cash equivalents, end of period	447	693
Supplemental disclosure of cash flow information:
Cash paid for interest	302	877
Cash paid for income taxes	1	$ 2
Right of use asset acquired through operating lease	13,583
Lease liability acquired through operating lease	$ (13,583)

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. 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		(11)				(11)
Net income ( 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
Balance, beginning of period at Jan. 02, 2021	$ 2	77,979	(1,283)	(70,190)	(1,388)	5,120
Balance, beginning of period (in shares) at Jan. 02, 2021	2,132,275
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted shares (in shares)	349
Issuance of common stock upon exercise of stock options		9				9
Issuance of common stock upon exercise of stock options (in shares)	985
Stock-based compensation		(7)				(7)
Net income ( loss) for the period				260		260
Foreign currency translation adjustment					(39)	(39)
Balance, end of period at Apr. 03, 2021	$ 2	$ 77,981	$ (1,283)	$ (69,930)	$ (1,427)	$ 5,343
Balance, end of period (in shares) at Apr. 03, 2021	2,133,609

BASIS OF PRESENTATION AND SUMMA

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Apr. 03, 2021
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 safety and convenience 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 monitoring, safety, nursery, and baby gear. Most products are sold under our core brand names of Summer™ and SwaddleMe ® . 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 January 2, 2021 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 January 2, 2021 included in its Annual Report on Form 10-K filed with the SEC on March 16, 2021. 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. Reclassification Previously reported amounts have been revised in the accompanying consolidated statement of cash flows to properly state the 2020 amortization of deferred financing costs. These revisions increased the Company’s net cash provided by operating activities and decreased the Company’s net cash provided by financing activities by $182. Net decrease in cash and cash equivalents remained unchanged. Revenue Recognition The Company applies FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The guidance sets forth a five-step revenue recognition model and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. 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 primarily 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. Cash and Cash Equivalents Cash flows, cash and cash equivalents include money market accounts and investments with an original maturity of three months or less. At times, the Company possesses cash balances in excess of federally-insured limits. 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 April 3, 2021 March 28, 2020 Allowance for doubtful accounts, beginning of period $ 197 $ 542 Charges to costs and expenses, net 6 23 Account write-offs — — Allowance for doubtful accounts, end of period $ 203 $ 565 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 full year forecast method of accounting for income taxes in the U.S. for the three months ended April 3, 2021 and utilized the discrete method for the three months ended March 28, 2020 as it believes the discrete method results in a more accurate representation of the income tax benefit for the quarter in 2020. 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. For the three months ended March 28, 2020 and 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. No discrete items are being recognized for the three months ended April 3, 2021. The tax rate for the three months ended April 3, 2021 includes an expected decrease in valuation allowance of $262 for the utilization of nondeductible interest expense from prior years. As of year ended January 2, 2021 and quarter ended April 3, 2021, the Company has uncertain tax positions of $7,543. Net Income/Loss Per Share Basic income or loss per share for the Company is computed by dividing net income or loss by the weighted-average number of shares of common stock outstanding during the period. Diluted income or loss per share includes the dilutive impact of outstanding stock options and unvested restricted shares. Translation of Foreign Currencies Assets and liabilities of the Company’s foreign subsidiaries whose functional currency is 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. Assets and liabilities of the Company’s foreign subsidiaries whose functional currency is the U.S. dollar are remeasured into U.S. dollars at their historical rates or the exchange rate in effect at the end of the quarter and the income and expense accounts of these affiliates have been remeasured at average rates prevailing during each respective quarter. Resulting remeasurement adjustments are made to the consolidated statement of operations. Foreign exchange transaction gains and losses are included in the accompanying interim, condensed consolidated statement of operations. 2021 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. Beginning in the first quarter of 2020, the COVID-19 pandemic negatively impacted the macroeconomic environment in the United States and globally, and the Company’s business. While our products are considered “essential” and our distribution center located in California continues to operate, some of our customers have been impacted and we have and may continue to see supply chain disruption. The ultimate impact of the COVID-19 pandemic will depend on numerous evolving factors that the Company may not be able to accurately predict, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions, consumer behavior in response to the pandemic and other economic and operational conditions the Company may face. 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 RECOGNITION

REVENUE RECOGNITION	3 Months Ended
	Apr. 03, 2021
REVENUE RECOGNITION
REVENUE RECOGNITION	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 April 3, 2021 March 28, 2020 United States $ 33,096 $ 35,778 All Other 3,105 4,560 Net Sales $ 36,201 $ 40,338 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 April 3, 2021 and three months ended March 28, 2020 fall under the provisions of the practical expedient and have therefore been expensed .

DEBT

DEBT	3 Months Ended
	Apr. 03, 2021
DEBT
DEBT	3. DEBT Loan Agreement with Bank of America. On October 15, 2020, the Company and its wholly owned subsidiary, Summer Infant (USA), Inc., became parties to a Third Amended and Restated Loan and Security Agreement (the “Loan Agreement”) with Bank of America, N.A. (“BofA”), as agent, that provides for (i) a $40,000 asset-based revolving credit facility, with a $5,000 unused letter of credit sub-line facility, (ii) a $7,500 term loan and (iii) a $2,500 FILO (first-in, last-out) loan. The Loan Agreement replaced the Company’s prior agreement with BofA and term loan with Pathlight Capital. Subsequent to quarter end, we entered into a letter agreement with BofA regarding certain eligible accounts as described below. Pursuant to the Loan Agreement, total borrowing capacity under the revolving credit facility is based on a borrowing base, which is generally defined as 85% of eligible receivables plus the lesser of (i) 70% of the value of eligible inventory (subject to certain limitations) or (ii) 85% of the net orderly liquidation value of eligible inventory, less applicable reserves. The scheduled maturity date of the loans under the revolving credit facility is October 15, 2025 (subject to customary early termination provisions). Loans under the revolving credit facility bear interest, at the Company’s option, at a base rate or at LIBOR, plus applicable margins based on average quarterly availability. Interest payments are due monthly, payable in arrears. The Company is also required to pay an annual non-use fee on unused amounts under the revolving credit facility, as well as other customary fees as are set forth in the Loan Agreement. As of April 3, 2021, the interest rate was 2.625% on LIBOR based revolver loans. At April 3, 2021, the amount outstanding on the revolving credit facility was $20,805, the total borrowing base was $28,174, and borrowing availability was $7,369. The principal of the term loan is to be repaid, on a quarterly basis, in installments of $375, until paid in full on termination and subject to mandatory repayment in certain circumstances. The scheduled maturity date of the term loan is October 15, 2025 or earlier, if the revolving credit facility is terminated. The term loan bears interest, at the Company’s option, at a base rate or at LIBOR, plus applicable margins, and interest payments are due monthly, in arrears. As of April 3, 2021, the interest rate on LIBOR based term loans and on base rate term loans was 3.875% and 5.750%, respectively. The amount outstanding on the term loan was $6,750 as of April 3, 2021. The total borrowing capacity under the FILO loan is the lesser of (i) the then applicable aggregate FILO commitment amount and (ii) a borrowing base, generally defined as a specific percentage of the value of eligible accounts, plus a specified percentage of the value of eligible inventory. The aggregate FILO commitment amount as of April 3, 2021 was $2,188 with no further availability, and such amount will be proportionately reduced each quarter until the FILO loan is terminated at maturity on October 15, 2024. There can be no voluntary repayment on the FILO loan as long as there are loans outstanding under the revolving credit facility, unless (i) there is an overadvance under the FILO loan, or (ii) such prepayment is accompanied by a permanent dollar for dollar reduction in the aggregate FILO commitment amount such that, after giving effect to such prepayment and reduction, the outstanding principal amount of the FILO loan is equal to but does not exceed the lesser of (A) the aggregate FILO commitment amount and (B) the FILO borrowing base. The FILO loan bears interest, at the Company’s option, at a base rate or at LIBOR, plus applicable margins, and interest payments are due monthly, in arrears. As of April 3, 2021, the interest rate on the LIBOR based FILO loans and on base rate FILO loans was 3.625% and 5.500%, respectively. All obligations under the Loan Agreement are secured by substantially all the assets of the Company, and the Company’s subsidiaries, Summer Infant Canada Limited and Summer Infant Europe Limited, are guarantors under the Loan Agreement. The Loan 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. Until the term loan and FILO loan have been repaid in full, the Company must maintain a fixed charge coverage ratio at the end of each fiscal month of at least 1.00 to 1.00 for the twelve-month period then ended. After the term loan and FILO loan have been repaid in full, the Company will be required to maintain the fixed charge coverage ratio if availability falls below $5,000. The Loan Agreement also contains customary events of default, including if the Company fails to comply with any required financial covenants, if there is an event of default under the PPP Loan (described below) and the occurrence of a change of control. In the event of a default, all of the obligations under the Loan Agreement may be declared immediately due and payable. For certain events of default relating to insolvency and receivership, all outstanding obligations become due and payable. On April 16, 2021, the Company, Summer Infant (USA), Inc., as borrowers, and certain subsidiaries of the Company as guarantors, entered into a letter agreement with BofA with respect to the Loan Agreement pursuant to which the maximum percentage of accounts owing from Wal-Mart that may be included in eligible accounts under the Loan Agreement was increased from 35% to 45%, effective from March 31, 2021 through July 31, 2021. Prior 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, the “Prior BofA Agreement”). The Prior BofA Agreement replaced the Company’s prior credit facility with Bank of America, and provided for an asset-based revolving credit facility, with a $5,000 letter of credit sub-line facility. The total borrowing capacity was based on a borrowing base, which was 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 Prior BofA Agreement was June 28, 2023 (subject to customary early termination provisions). On October 15, 2020, the Prior BofA Agreement was replaced by the Loan Agreement described above. Loans under the Prior BofA Agreement bore interest, at the Company’s option, at a base rate or at LIBOR, plus applicable margins based on average quarterly availability under the Prior BofA Agreement. Interest payments were due monthly, payable in arrears. Prior Term Loan Agreement. On June 28, 2018, the Company and Summer Infant (USA), Inc., as borrowers, entered into a Term Loan and Security Agreement (as amended, the “Term Loan Agreement”) with Pathlight Capital LLC, as agent, each lender from time to time a party to the Term Loan Agreement, and certain subsidiaries of the Company as guarantors, providing for a $17,500 term loan (the “Term Loan”). The principal of the Term Loan was 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, provided that, in connection with the amendments to the Term Loan Agreement, principal payments for March, June and September 2020 were suspended. The Term Loan was repaid in full on October 15, 2020. PPP Loan On August 3, 2020, the Company received loan proceeds of $1,956 (the "PPP Loan") pursuant to the Paycheck Protection Program ("PPP") administered by the U.S. Small Business Administration under the U.S. CARES Act. The PPP Loan, which was in the form of a promissory note (the "PPP Note"), between the Company and BofA, as the lender, matures on July 27, 2025 and bears interest at a fixed rate of 1% per annum. Monthly principal and interest payments are deferred until (i) the date on which the amount of forgiveness is remitted to the Company’s lender, (ii) the date on which the Company’s lender provides notice that the Company is not entitled to loan forgiveness, and (iii) if a borrower does not apply for loan forgiveness, 10 months after the date of the loan forgiveness covered period. The Company may voluntarily prepay the borrowings in full with no associated penalty or premium. Under the terms of the PPP, the principal and interest may be forgiven if the PPP Loan proceeds are used for qualifying expenses, including payroll costs, rent and utility costs. There is no guaranty that all or a portion of this loan will be forgiven. The PPP Note contains customary representations, warranties, and covenants for this type of transaction, including customary events of default relating to, among other things, payment defaults and breaches of representations and warranties or other provisions of the PPP Note. The occurrence of an event of default may result in, among other things, the Company becoming obligated to repay all amounts outstanding under the PPP Note. The PPP Loan balance of $1,956 of which $1,760 is included in Other liabilities and $196 is included in the Current portion of long-term debt on the consolidated balance sheet. On February 18, 2021, the Company applied for full forgiveness of the PPP loan through Bank of America. Bank of America has since reviewed the application and supporting documentation and they have forwarded the application to the Small Business Administration (“SBA”) for its review. Aggregate maturities of bank debt related to the Loan Agreement and the PPP Loan are as follows: Fiscal Year ending: 2021 1,692 2022 1,985 2023 2,516 2024 2,516 2025 and beyond 22,990 Total $ 31,699 Unamortized debt issuance costs were$1,217 at April 3, 2021 and $1,275 at January 2, 2021, and are presented as a direct deduction of long-term debt on the consolidated balance sheets.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	3 Months Ended
	Apr. 03, 2021
INTANGIBLE ASSETS
INTANGIBLE ASSETS	4. INTANGIBLE ASSETS Intangible assets consisted of the following: April 3, January 2, 2021 2021 Brand names $ 10,900 $ 10,900 Patents and licenses 4,125 4,125 Customer relationships 6,946 6,946 Other intangibles 1,882 1,882 23,853 23,853 Less: Accumulated amortization (12,114) Intangible assets, net $ 11,629 $ 11,739 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 April 3, 2021 and January 2, 2021.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Apr. 03, 2021
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	5. COMMITMENTS AND CONTINGENCIES Leases The Company leases office space and distribution centers primarily related to its United States, 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. In May 2020, the Company entered into a lease agreement amendment related to our headquarters in Woonsocket, Rhode Island. The agreement decreased the leased premises square footage and extended the current term, which was set to end in March 2021 prior to the amendment to June 2025. It additionally granted two 5-year term extension options. The Company was accounting for the lease in Woonsocket as a sale-leaseback with the building on the balance sheet as property and equipment, net and a corresponding financing obligation in long-term liabilities. Upon the execution of the lease amendment, the Company re-assessed the classification of the lease and determined it to be an operating lease, as the criteria for a sale had been met. As part of this re-classification, the Company derecognized the financing obligation of $2,390 from long-term liabilities and the amount related to the property and equipment, net of $2,357 from the balance sheet and recorded a ROU asset and lease liability of $1,457 respectively. The Company did not include either of the term extension options in the calculation of the ROU asset and lease liability. In April 2020, the Company entered into a twelve-month sublease agreement for a portion of the distribution warehouse located in Riverside, California. Fixed sublease payments received are recognized on a straight-line basis over the sublease term in general and administrative expenses. In February 2021, the Company extended the existing sublease through September 2021. In February 2021, Summer USA extended its lease at its Riverside, California distribution center. The existing lease was set to expire on September 30, 2021 and has been extended for 61 months through October 31, 2026. In addition, the amended lease grants a 60 month extension option. The company concluded that this is a modification to the existing lease and continues to be classified as operating. Upon the execution of the lease extension, the Company recorded an increase in ROU asset and lease liability of $13,583, respectively. The Company did not include the extension option in the calculation of the ROU asset and lease liability. 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 April 3, 2021, these leases had remaining lease terms between 0.6 and 5.6 years. The Canada lease has one 5-year extension option that has 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 April 3, 2021 and March 28, 2020 were as follows: For the three months ended April 3, 2021 March 28, 2020 Operating lease cost $ 782 $ 621 Variable lease cost 56 267 Less: sublease income — Total lease cost $ 588 $ 888 Weighted-average remaining lease term 5.3 years Weighted Average discount rate: 3.4 % Cash paid for amounts included in the measurement of the Company’s lease liabilities were $765 and $662 for the three months ended April 3, 2021 and March 28, 2020 respectively. As of April 3, 2021, the present value of maturities of the Company’s operating lease liabilities were as follows: Fiscal Year Ending: 2021 $ 2,185 2022 3,481 2023 3,405 2024 3,347 2025 3,284 Thereafter 2,672 Less imputed interest Total $ 16,750 The future fixed sublease receipts under non-cancelable operating sublease agreements as of April 3, 2021 are as follows: Fiscal Year Ending: 2021 500 Total $ 500 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
	Apr. 03, 2021
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION	6. SHARE BASED COMPENSATION The Company is currently authorized to issue up to 188,889 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. The Company was authorized to issue up to 333,334 shares for equity awards under its 2006 Performance Equity Plan (“2006 Plan”). In March 2017, the 2006 Plan expired and no additional equity awards can be granted under the 2006 Plan. 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 April 3, 2021 and March 28, 2020 was a credit of $7 and a credit of $11, 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 April 3, 2021, there were 90,267 stock options outstanding and 11,156 unvested restricted shares outstanding. During the three months ended April 3, 2021, the Company granted 42,000 stock options and did not grant any shares of restricted stock. The following table summarizes the weighted average assumptions used for stock options granted during the three months ended April 3, 2021. For the Three Months Ended April 3, 2021 Expected life (in years) 4.60 Risk-free interest rate 0.7 % Volatility 104.3 % Dividend yield 0 % Forfeiture rate 28.1 % As of April 3, 2021, there were 32,214 shares available to grant under the 2012 Plan.

WEIGHTED AVERAGE COMMON SHARES

WEIGHTED AVERAGE COMMON SHARES	3 Months Ended
	Apr. 03, 2021
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. A reconciliation of basic and diluted net income (loss) attributable to common stockholders is as follows: For the Three Months For the Three Ended Months Ended March Calculation of Basic and Diluted EPS April 3, 2021 28, 2020 Weighted-average common shares outstanding – basic 2,133,061 2,109,264 Dilutive effect of restricted shares 8,306 — Dilutive effect of stock options 20,422 — Weighted-average common shares outstanding – diluted 2,161,789 2,109,264 Earnings (loss) per share – basic $ 0.12 $ (0.57) Earnings (loss) per share – diluted $ 0.12 $ (0.57) The computation of diluted common shares for the three months ended April 3, 2021 excluded 69,845 stock options and 2,850 shares of restricted stock 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.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Apr. 03, 2021
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 other than described in Note 3 related to a letter agreement with BofA.

BASIS OF PRESENTATION AND SUM_2

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Apr. 03, 2021
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassification	Reclassification Previously reported amounts have been revised in the accompanying consolidated statement of cash flows to properly state the 2020 amortization of deferred financing costs. These revisions increased the Company’s net cash provided by operating activities and decreased the Company’s net cash provided by financing activities by $182. Net decrease in cash and cash equivalents remained unchanged.
Revenue Recognition	Revenue Recognition The Company applies FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The guidance sets forth a five-step revenue recognition model and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. 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 primarily 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.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash flows, cash and cash equivalents include money market accounts and investments with an original maturity of three months or less. At times, the Company possesses cash balances in excess of federally-insured limits.
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 April 3, 2021 March 28, 2020 Allowance for doubtful accounts, beginning of period $ 197 $ 542 Charges to costs and expenses, net 6 23 Account write-offs — — Allowance for doubtful accounts, end of period $ 203 $ 565
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 full year forecast method of accounting for income taxes in the U.S. for the three months ended April 3, 2021 and utilized the discrete method for the three months ended March 28, 2020 as it believes the discrete method results in a more accurate representation of the income tax benefit for the quarter in 2020. 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. For the three months ended March 28, 2020 and 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. No discrete items are being recognized for the three months ended April 3, 2021. The tax rate for the three months ended April 3, 2021 includes an expected decrease in valuation allowance of $262 for the utilization of nondeductible interest expense from prior years. As of year ended January 2, 2021 and quarter ended April 3, 2021, the Company has uncertain tax positions of $7,543.
Net Income/Loss Per Share	Net Income/Loss Per Share Basic income or loss per share for the Company is computed by dividing net income or loss by the weighted-average number of shares of common stock outstanding during the period. Diluted income or loss per share includes the dilutive impact of outstanding stock options and unvested restricted shares.
Translation of Foreign Currencies	Translation of Foreign Currencies Assets and liabilities of the Company’s foreign subsidiaries whose functional currency is 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. Assets and liabilities of the Company’s foreign subsidiaries whose functional currency is the U.S. dollar are remeasured into U.S. dollars at their historical rates or the exchange rate in effect at the end of the quarter and the income and expense accounts of these affiliates have been remeasured at average rates prevailing during each respective quarter. Resulting remeasurement adjustments are made to the consolidated statement of operations. Foreign exchange transaction gains and losses are included in the accompanying interim, condensed consolidated statement of operations.
2021 Plan and COVID-19 Pandemic	2021 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. Beginning in the first quarter of 2020, the COVID-19 pandemic negatively impacted the macroeconomic environment in the United States and globally, and the Company’s business. While our products are considered “essential” and our distribution center located in California continues to operate, some of our customers have been impacted and we have and may continue to see supply chain disruption. The ultimate impact of the COVID-19 pandemic will depend on numerous evolving factors that the Company may not be able to accurately predict, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions, consumer behavior in response to the pandemic and other economic and operational conditions the Company may face.

BASIS OF PRESENTATION AND SUM_3

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Apr. 03, 2021
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 April 3, 2021 March 28, 2020 Allowance for doubtful accounts, beginning of period $ 197 $ 542 Charges to costs and expenses, net 6 23 Account write-offs — — Allowance for doubtful accounts, end of period $ 203 $ 565

REVENUE RECOGNITION (Tables)

REVENUE RECOGNITION (Tables)	3 Months Ended
	Apr. 03, 2021
REVENUE RECOGNITION
Schedule of net sales by geographical area	For the three months ended April 3, 2021 March 28, 2020 United States $ 33,096 $ 35,778 All Other 3,105 4,560 Net Sales $ 36,201 $ 40,338 All Other consists of Canada, Europe, South America, Mexico, Asia, and the Middle East.

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Apr. 03, 2021
DEBT
Schedule of aggregate maturities of the Loan Agreement and the PPP Loan	Aggregate maturities of bank debt related to the Loan Agreement and the PPP Loan are as follows: Fiscal Year ending: 2021 1,692 2022 1,985 2023 2,516 2024 2,516 2025 and beyond 22,990 Total $ 31,699

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	3 Months Ended
	Apr. 03, 2021
INTANGIBLE ASSETS
Schedule of intangible assets	April 3, January 2, 2021 2021 Brand names $ 10,900 $ 10,900 Patents and licenses 4,125 4,125 Customer relationships 6,946 6,946 Other intangibles 1,882 1,882 23,853 23,853 Less: Accumulated amortization (12,114) Intangible assets, net $ 11,629 $ 11,739

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	3 Months Ended
	Apr. 03, 2021
COMMITMENTS AND CONTINGENCIES
Schedule of lease expense	The components of the Company’s lease expense for the three months ended April 3, 2021 and March 28, 2020 were as follows: For the three months ended April 3, 2021 March 28, 2020 Operating lease cost $ 782 $ 621 Variable lease cost 56 267 Less: sublease income — Total lease cost $ 588 $ 888 Weighted-average remaining lease term 5.3 years Weighted Average discount rate: 3.4 %
Schedule of present value of maturities of operating lease liabilities	As of April 3, 2021, the present value of maturities of the Company’s operating lease liabilities were as follows: Fiscal Year Ending: 2021 $ 2,185 2022 3,481 2023 3,405 2024 3,347 2025 3,284 Thereafter 2,672 Less imputed interest Total $ 16,750
Schedule of future fixed sublease receipts under non-cancelable operating lease agreements	The future fixed sublease receipts under non-cancelable operating sublease agreements as of April 3, 2021 are as follows: Fiscal Year Ending: 2021 500 Total $ 500

SHARE BASED COMPENSATION (Table

SHARE BASED COMPENSATION (Tables)	3 Months Ended
	Apr. 03, 2021
SHARE BASED COMPENSATION
Summary of weighted average assumptions used for stock options granted	For the Three Months Ended April 3, 2021 Expected life (in years) 4.60 Risk-free interest rate 0.7 % Volatility 104.3 % Dividend yield 0 % Forfeiture rate 28.1 %

WEIGHTED AVERAGE COMMON SHARES

WEIGHTED AVERAGE COMMON SHARES (Tables)	3 Months Ended
	Apr. 03, 2021
WEIGHTED AVERAGE COMMON SHARES
Schedule of reconciliation of basic and diluted net income (loss) attributable to common stockholders	For the Three Months For the Three Ended Months Ended March Calculation of Basic and Diluted EPS April 3, 2021 28, 2020 Weighted-average common shares outstanding – basic 2,133,061 2,109,264 Dilutive effect of restricted shares 8,306 — Dilutive effect of stock options 20,422 — Weighted-average common shares outstanding – diluted 2,161,789 2,109,264 Earnings (loss) per share – basic $ 0.12 $ (0.57) Earnings (loss) per share – diluted $ 0.12 $ (0.57)

BASIS OF PRESENTATION AND SUM_4

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	Aug. 03, 2020USD ($)	Mar. 31, 2020	Apr. 03, 2021USD ($)segment	Mar. 28, 2020USD ($)	Jan. 02, 2021USD ($)
Basis of Presentation and Principles of Consolidation
Reverse stock split		0.1111
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			$ 197	$ 542
Charges to costs and expenses, net			6	23
Allowance for doubtful accounts, end of period			203	565
Income Taxes
Tax benefit recognized related to increase in interest deduction from tax law changes				$ 262
Expected decrease in valuation allowance			262
Uncertain tax positions			7,543		$ 7,543
PPP Loan
2020 Plan and COVID-19 Pandemic
Loan proceeds	$ 1,956		$ 1,956

REVENUE RECOGNITION (Details)

REVENUE RECOGNITION (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Mar. 28, 2020
Net sales by geographical area
Net sales	$ 36,201	$ 40,338
Election of practical expedient, incremental cost of obtaining contracts	true
United States
Net sales by geographical area
Net sales	$ 33,096	35,778
All Other
Net sales by geographical area
Net sales	$ 3,105	$ 4,560

DEBT - Loan Agreement with Bank

DEBT - Loan Agreement with Bank of America (Details) $ in Thousands	Oct. 15, 2020USD ($)	Jun. 28, 2018USD ($)	Apr. 03, 2021USD ($)	Mar. 28, 2020USD ($)
DEBT
Write off of unamortized deferred financing costs				$ 266
Minimum
DEBT
Fixed charge coverage ratio at the end of each fiscal month			1
Credit Facility
DEBT
Amount outstanding			$ 20,805
FILO Facility
DEBT
Maximum borrowing capacity			$ 2,188
FILO Facility | LIBOR
DEBT
Interest rate during the period			3.625%
FILO Facility | Base rate
DEBT
Interest rate during the period			5.50%
Term Loan Facility
DEBT
Amount outstanding			$ 6,750
Term Loan Facility | LIBOR
DEBT
Interest rate during the period			3.875%
Term Loan Facility | Base rate
DEBT
Interest rate during the period			5.75%
Restated Bank of America Agreement | Credit Facility
DEBT
Borrowing availability			$ 7,369
Borrowing capacity			$ 28,174
Restated Bank of America Agreement | Credit Facility | LIBOR
DEBT
Interest rate during the period			2.625%
Restated Bank of America Agreement | Revolving Facility
DEBT
Maximum borrowing capacity	$ 40,000
Restated Bank of America Agreement | Letter of credit sub-line facility
DEBT
Maximum borrowing capacity	5,000
Restated Bank of America Agreement | FILO Facility
DEBT
Maximum borrowing capacity	2,500
Restated Bank of America Agreement | Term Loan Facility
DEBT
Maximum borrowing capacity	$ 7,500
Term Loan and Security Agreement | Term Loan Facility | Financial Covenant
DEBT
Interest rate basis		LIBOR
Prior Credit Facility | Revolving Facility
DEBT
Borrowing base as a percentage of eligible receivables	85.00%	85.00%
Borrowing base as a percentage of eligible inventory	70.00%	70.00%
Borrowing base as a percentage of net orderly liquidation value of eligible inventory and less reserves	85.00%	85.00%
Prior Credit Facility | Letter of credit sub-line facility
DEBT
Maximum borrowing capacity		$ 5,000

DEBT - Term Loan Agreement (Det

DEBT - Term Loan Agreement (Details) $ in Thousands	Mar. 30, 2021	Jun. 28, 2018USD ($)	Apr. 03, 2021USD ($)	Oct. 02, 2021
DEBT
Borrowing base as a percentage of eligible accounts under loan agreements	35.00%			45.00%
Minimum
DEBT
Fixed charge coverage ratio at the end of each fiscal month			1
Term Loan
DEBT
Face amount of loan		$ 17,500
Quarterly basis installment amount		$ 219	$ 375
Term Loan | Minimum
DEBT
Threshold availability to maintain minimum fixed charge coverage ratio			$ 5,000

DEBT - Aggregate maturities and

DEBT - Aggregate maturities and PPP Loan (Details) - USD ($) $ in Thousands	Aug. 03, 2020	Apr. 03, 2021	Jan. 02, 2021
Aggregate maturities of bank debt related to the Loan Agreement and the PPP Loan
2021		$ 1,692
2022		1,985
2023		2,516
2024		2,516
2025 and beyond		22,990
Total		31,699
Unamortized debt issuance costs		1,217	$ 1,275
PPP Loan
DEBT
Loan proceeds	$ 1,956	1,956
Period for loan forgiveness	10 months
PPP Loan | Other liabilities
DEBT
Loan proceeds		1,760
PPP Loan | Current portion of long-term debt
DEBT
Loan proceeds		$ 196

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Jan. 02, 2021
INTANGIBLE ASSETS
Intangible assets, gross	$ 23,853	$ 23,853
Less: Accumulated amortization	(12,224)	(12,114)
Intangible assets, net	11,629	11,739
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	$ 4,125	4,125
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	$ 10,900	$ 10,900

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Summary of Leases (Details) $ in Thousands	1 Months Ended
	Feb. 28, 2021USD ($)	May 31, 2020USD ($)item	Apr. 30, 2020	Apr. 03, 2021USD ($)item	Jan. 02, 2021USD ($)
Leases
Cash incentives from the landlord				$ 0
ROU asset				16,524	$ 3,625
Operating lease liability				$ 16,750
Woonsocket, RI
Leases
Derecognition of a building sale-leaseback financial obligation		$ 2,390
Derecognition of a building sale-leaseback fixed asset, net of depreciation		2,357
ROU asset		1,457
Operating lease liability		$ 1,457
Riverside, CA
Leases
Extension term	61 months
Sublease term			12 months
Increase to ROU Assets due to lease modification	$ 13,583
Increase to lease liabilities due to lease modification	$ 13,583
Canada
Leases
Number of options to extend | item				1
Extension term				5 years
Lease Amendment | Woonsocket, RI
Leases
Number of options to extend | item		2
Extension term		5 years
Lease Amendment | Riverside, CA
Leases
Extension term	60 months

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES - Additional disclosures (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Mar. 28, 2020
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	$ 765	$ 662
Components of lease expense
Operating lease cost	782	621
Variable lease cost	56	267
Less: sublease income	(250)
Total lease cost	$ 588	$ 888
Weighted-average remaining lease term (in years)	5 years 3 months 18 days
Weighted-average discount rate	3.40%
Maturities of the operating lease liabilities
2021	$ 2,185
2022	3,481
2023	3,405
2024	3,347
2025	3,284
Thereafter	2,672
Less imputed interest	(1,624)
Total	16,750
Future fixed sublease receipts under non-cancelable operating lease agreements
2021	500
Total	$ 500
Canada
Leases
Extension term	5 years
Minimum
Leases
Remaining lease term (in years)	7 months 6 days
Maximum
Leases
Remaining lease term (in years)	5 years 7 months 6 days

SHARE BASED COMPENSATION (Detai

SHARE BASED COMPENSATION (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Mar. 28, 2020	Mar. 31, 2017
Stock Options
SHARE BASED COMPENSATION
Stock options granted during the period (in shares)	42,000
Weighted average assumptions
Expected life (in years)	4 years 7 months 6 days
Risk-free interest rate	0.70%
Volatility	104.30%
Dividend yield	0.00%
Forfeiture rate	28.10%
2012 Plan
SHARE BASED COMPENSATION
Number of shares authorized under the plan	188,889
Shares available to grant	32,214
2012 Plan | General and Administrative Expense
SHARE BASED COMPENSATION
Share-based compensation expense	$ 7	$ 11
2012 Plan | Stock Options
SHARE BASED COMPENSATION
Stock options outstanding (in shares)	90,267
2012 Plan | Restricted Stock Awards
SHARE BASED COMPENSATION
Unvested restricted shares outstanding		11,156
2006 Plan
SHARE BASED COMPENSATION
Number of shares authorized under the plan			333,334

WEIGHTED AVERAGE COMMON SHARE_2

WEIGHTED AVERAGE COMMON SHARES - Reconciliation of Basic and Diluted Net Income (Loss) Attributable to Common Stockholders (Details) - $ / shares	3 Months Ended
	Apr. 03, 2021	Mar. 28, 2020
Calculation of Basic and Diluted EPS
Weighted-average common shares outstanding - basic	2,133,061	2,109,264
Dilutive effect of restricted shares	8,306
Dilutive effect of stock options	20,422
Weighted-average common shares outstanding - diluted	2,161,789	2,109,264
Earnings (loss) per share - basic	$ 0.12	$ (0.57)
Earnings (loss) per share - diluted	$ 0.12	$ (0.57)

WEIGHTED AVERAGE COMMON SHARE_3

WEIGHTED AVERAGE COMMON SHARES - Anti-dilutive securities (Details) - shares	3 Months Ended
	Apr. 03, 2021	Mar. 28, 2020
Stock Options
WEIGHTED AVERAGE COMMON SHARES
Anti-dilutive securities excluded from the computation of diluted earnings per share (in shares)	69,845	65,619
Restricted Stock Awards
WEIGHTED AVERAGE COMMON SHARES
Anti-dilutive securities excluded from the computation of diluted earnings per share (in shares)	2,850	13,669