Cover
Cover - shares | 9 Months Ended | |
Jun. 27, 2021 | Aug. 16, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 27, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --10-03 | |
Entity File Number | 000-54114 | |
Entity Registrant Name | OPTEX SYSTEMS HOLDINGS, INC. | |
Entity Central Index Key | 0001397016 | |
Entity Tax Identification Number | 90-0609531 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 1420 Presidential Drive | |
Entity Address, City or Town | Richardson | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75081-2439 | |
City Area Code | (972) | |
Local Phone Number | 764-5700 | |
Title of 12(b) Security | None. | |
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 | 8,483,295 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 27, 2021 | Sep. 27, 2020 | |
ASSETS | |||
Cash and Cash Equivalents | $ 4,758 | $ 4,700 | |
Accounts Receivable, Net | 1,382 | 2,953 | |
Inventory, Net | 8,645 | 8,791 | |
Prepaid Expenses | 324 | 229 | |
Current Assets | 15,109 | 16,673 | |
Property and Equipment, Net | 1,026 | 1,006 | |
Other Assets | |||
Deferred Tax Asset | 1,309 | 1,227 | |
Right-of-use Asset | 3,721 | [1] | 1,416 |
Security Deposits | 23 | 23 | |
Other Assets | 5,053 | 2,666 | |
Total Assets | 21,188 | 20,345 | |
Current Liabilities | |||
Accounts Payable | 408 | 833 | |
Credit Facility | 377 | ||
Operating Lease Liability | 529 | 417 | |
Accrued Expenses | 872 | 1,077 | |
Warrant Liability | 519 | 2,544 | |
Accrued Warranty Costs | 68 | 83 | |
Customer Advance Deposits | 1 | ||
Current Liabilities | 2,773 | 4,955 | |
Other Liabilities | |||
Credit Facility | 377 | ||
Operating Lease Liability, net of current portion | 3,254 | 1,037 | |
Other Liabilities | 3,254 | 1,414 | |
Total Liabilities | 6,027 | 6,369 | |
Commitments and Contingencies | |||
Stockholders’ Equity | |||
Common Stock – ($0.001 par, 2,000,000,000 authorized, 8,334,995 and 8,795,869 shares issued, and 8,334,995 and 8,690,136 outstanding, respectively) | 8 | 9 | |
Treasury Stock (at cost, zero and 105,733 shares held, respectively) | (200) | ||
Additional Paid in capital | 25,403 | 26,276 | |
Accumulated Deficit | (10,250) | (12,109) | |
Stockholders’ Equity | 15,161 | 13,976 | |
Total Liabilities and Stockholders’ Equity | $ 21,188 | $ 20,345 | |
[1] | Includes $62 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 27, 2021 | Sep. 27, 2020 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 2,000,000,000 | 2,000,000,000 |
Common Stock, Shares, Issued | 8,334,995 | 8,795,869 |
Common stock shares outstanding | 8,334,995 | 8,690,136 |
Treasury stock, shares | 0 | 105,733 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2021 | Jun. 28, 2020 | Jun. 27, 2021 | Jun. 28, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 4,433 | $ 5,849 | $ 13,149 | $ 18,682 |
Cost of Sales | 3,687 | 4,368 | 11,190 | 14,114 |
Gross Margin | 746 | 1,481 | 1,959 | 4,568 |
General and Administrative Expense | 689 | 855 | 2,238 | 2,442 |
Operating Income (Loss) | 57 | 626 | (279) | 2,126 |
Gain (Loss) on Change in Fair Value of Warrants | 1,167 | (585) | 2,025 | (504) |
Interest Expense | (4) | (5) | (9) | (17) |
Other Income (Expense) | 1,163 | (590) | 2,016 | (521) |
Income Before Taxes | 1,220 | 36 | 1,737 | 1,605 |
Income Tax Expense (Benefit), net | (154) | 131 | (122) | 435 |
Net Income (Loss) | 1,374 | (95) | 1,859 | 1,170 |
Deemed dividends on participating securities | (464) | (622) | (372) | |
Net income (loss) applicable to common shareholders | $ 910 | $ (95) | $ 1,237 | $ 798 |
Basic income (loss) per share | $ 0.11 | $ (0.01) | $ 0.15 | $ 0.09 |
Weighted Average Common Shares Outstanding - basic | 8,101,223 | 8,491,803 | 8,204,994 | 8,472,739 |
Diluted income (loss) per share | $ 0.11 | $ (0.01) | $ 0.15 | $ 0.09 |
Weighted Average Common Shares Outstanding - diluted | 8,138,106 | 8,491,803 | 8,292,544 | 8,596,745 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 27, 2021 | Jun. 28, 2020 | |
Cash Flows from Operating Activities: | ||
Net Income | $ 1,859 | $ 1,170 |
Adjustments to Reconcile Net Income to Net Cash provided by Operating Activities: | ||
Depreciation and Amortization | 195 | 185 |
(Gain) Loss on Change in Fair Value of Warrants | (2,025) | 504 |
Stock Compensation Expense | 171 | 120 |
Deferred Tax | (81) | 144 |
Accounts Receivable | 1,570 | 89 |
Inventory | 146 | 332 |
Prepaid Expenses | (95) | 69 |
Leases | 23 | (32) |
Accounts Payable and Accrued Expenses | (631) | (782) |
Accrued Warranty Costs | (15) | 65 |
Customer Advance Deposits | (1) | (3) |
Increase (Decrease) In Accrued Estimated Loss On Contracts | ||
Total Adjustments | (743) | 691 |
Net Cash provided by Operating Activities | 1,116 | 1,861 |
Cash Flows used in Investing Activities | ||
Purchases of Property and Equipment | (214) | (150) |
Net Cash used in Investing Activities | (214) | (150) |
Cash Flows provided by (used in) Financing Activities | ||
Cash Paid for Taxes Withheld On Net Settled Restricted Stock Unit Share Issue | (44) | (54) |
Borrowings from Credit Facility | 127 | |
Stock Repurchase | (800) | (64) |
Net Cash (used in) provided by Financing Activities | (844) | 9 |
Net Increase in Cash and Cash Equivalents | 58 | 1,720 |
Cash and Cash Equivalents at Beginning of Period | 4,700 | 1,068 |
Cash and Cash Equivalents at End of Period | 4,758 | 2,788 |
Non Cash Transactions: | ||
Right-of-Use Asset | 3,688 | 1,811 |
Operating Lease Liabilities | 3,688 | 1,894 |
Treasury stock retired | 1,000 | |
Cash Transactions: | ||
Cash Paid for Taxes | 48 | 289 |
Cash Paid for Interest | $ 9 | $ 16 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total | |
Beginning balance, value at Sep. 29, 2019 | $ 8 | $ 26,134 | $ (13,934) | $ 12,208 | ||
Beginning balance, shares at Sep. 29, 2019 | 8,436,422 | |||||
Stock Compensation Expense | 120 | 120 | ||||
Common Stock Repurchase | [1] | $ (64) | (64) | |||
Common Stock Repurchase, shares | [1] | 34,243 | ||||
Vested restricted stock units issued net of tax withholding | (54) | (54) | ||||
Vested restricted stock units issued net of tax withholding, shares | 59,447 | |||||
Restricted Board Shares Issued | [2] | $ 1 | (1) | |||
Restricted Board Shares Issued, shares | [2] | 300,000 | ||||
Net income | 1,170 | 1,170 | ||||
Ending balance, value at Jun. 28, 2020 | $ 9 | $ (64) | 26,199 | (12,764) | 13,380 | |
Ending balance, shares at Jun. 28, 2020 | 8,795,869 | 34,243 | ||||
Beginning balance, value at Mar. 29, 2020 | $ 8 | 26,137 | (12,669) | 13,476 | ||
Beginning balance, shares at Mar. 29, 2020 | 8,495,869 | |||||
Stock Compensation Expense | 63 | 63 | ||||
Common Stock Repurchase | [1] | $ (64) | (64) | |||
Common Stock Repurchase, shares | [1] | 34,243 | ||||
Restricted Board Shares Issued | [2] | $ 1 | (1) | |||
Restricted Board Shares Issued, shares | [2] | 300,000 | ||||
Net income | (95) | (95) | ||||
Ending balance, value at Jun. 28, 2020 | $ 9 | $ (64) | 26,199 | (12,764) | 13,380 | |
Ending balance, shares at Jun. 28, 2020 | 8,795,869 | 34,243 | ||||
Beginning balance, value at Sep. 27, 2020 | $ 9 | $ (200) | 26,276 | (12,109) | 13,976 | |
Beginning balance, shares at Sep. 27, 2020 | 8,795,869 | 105,733 | ||||
Stock Compensation Expense | 171 | 171 | ||||
Common Stock Repurchase | [1] | $ (800) | (800) | |||
Common Stock Repurchase, shares | [1] | 413,533 | ||||
Cancellation of Treasury Shares | $ (1) | $ 1,000 | (1,000) | (1) | ||
Cancellation of Treasury Shares, shares | (519,266) | (519,266) | ||||
Vested restricted stock units issued net of tax withholding | (44) | (44) | ||||
Vested restricted stock units issued net of tax withholding, shares | 58,392 | |||||
Net income | 1,859 | 1,859 | ||||
Ending balance, value at Jun. 27, 2021 | $ 8 | 25,403 | (10,250) | 15,161 | ||
Ending balance, shares at Jun. 27, 2021 | 8,334,995 | |||||
Beginning balance, value at Mar. 28, 2021 | $ 9 | $ (930) | 26,346 | (11,624) | 13,801 | |
Beginning balance, shares at Mar. 28, 2021 | 8,854,261 | 480,667 | ||||
Stock Compensation Expense | 57 | 57 | ||||
Common Stock Repurchase | [1] | $ (70) | (70) | |||
Common Stock Repurchase, shares | [1] | 38,599 | ||||
Cancellation of Treasury Shares | $ (1) | $ 1,000 | (1,000) | (1) | ||
Cancellation of Treasury Shares, shares | (519,266) | (519,266) | ||||
Net income | 1,374 | 1,374 | ||||
Ending balance, value at Jun. 27, 2021 | $ 8 | $ 25,403 | $ (10,250) | $ 15,161 | ||
Ending balance, shares at Jun. 27, 2021 | 8,334,995 | |||||
[1] | Common shares repurchased in the open market through June 27, 2021. Shares were held in treasury stock using the cost method and cancelled in June 2021. | |||||
[2] | 100,000 20% five year $525,000 300,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) - Independent Board Of Directors [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 28, 2020 | Jun. 27, 2021 | Jun. 28, 2020 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Restricted common shares issued, shares | 100,000 | 100,000 | |
Share-based compensation vesting percentage | 20.00% | 20.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | 5 years | |
Restricted common shares issued, value | $ 525,000 | $ 525,000 | |
Amortized over the vesting period, shares | 300,000 | 300,000 |
Organization and Operations
Organization and Operations | 9 Months Ended |
Jun. 27, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | Organization and Operations Optex Systems Holdings, Inc. (the “Company”) manufactures optical sighting systems and assemblies for the U.S. Department of Defense, foreign military applications and commercial markets. Its products are installed on a variety of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, light armored and advanced security vehicles, and have been selected for installation on the Stryker family of vehicles. The Company also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. Optex Systems Holdings’ products consist primarily of build to customer print products that are delivered both directly to the military and to other defense prime contractors or commercial customers. The Company’s consolidated revenues are derived from the U.S. government, 28.3% 29.7% 12.4% 6.0% 6.8% 16.8% 90.5% 9.5% 93,967 We may be at risk as a result of the current COVID-19 pandemic. Risks that could affect our business include the duration and scope of the COVID-19 pandemic and the impact on the demand for our products; actions by governments, businesses and individuals taken in response to the pandemic; the length of time of the COVID-19 pandemic and the possibility of its reoccurrence; the timing required to develop effective treatments and distribute vaccines in the event of future outbreaks; the eventual impact of the pandemic and actions taken in response to the pandemic on global and regional economies; and the pace of recovery when the COVID-19 pandemic subsides. During the last twelve months, we have experienced a significant reduction in new orders and ending customer backlog across all but one of our product lines. We attribute the lower orders to a combination of factors including a COVID-19 driven slow-down of contract awards for both U.S. military sales and foreign military sales (FMS), combined with some shifting in defense spending budget allocations in US military sales and FMS away from Army ground system vehicles toward other military agency applications. Due to the significant level of uncertainty surrounding the pandemic and its impact to our customers and the defense supply chain, we are unable to ascertain the impact further delays in contract awards and customer orders may have on the next twelve months. We have experienced a reduction of 29.6% in revenue volume during the first nine months of fiscal year 2021 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Jun. 27, 2021 | |
Accounting Policies [Abstract] | |
Accounting Policies | Note 2 - Accounting Policies Basis of Presentation Principles of Consolidation The condensed consolidated financial statements of Optex Systems Holdings included herein have been prepared by Optex Systems Holdings, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in conjunction with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and the notes thereto included in the Optex Systems Holdings’ Form 10-K for the year ended September 27, 2020 and other reports filed with the SEC. The accompanying unaudited interim condensed consolidated financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of Optex Systems Holdings for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole. Certain information that is not required for interim financial reporting purposes has been omitted. Leases $3.7 $3.7 Inventory Schedule of Inventory June 27, 2021 September 27, 2020 (Thousands) June 27, 2021 September 27, 2020 Raw Material $ 4,724 $ 5,506 Work in Process 3,768 3,214 Finished Goods 720 638 Gross Inventory $ 9,212 $ 9,358 Less: Inventory Reserves (567 ) (567 ) Net Inventory $ 8,645 $ 8,791 Concentration of Credit Risk 19% 14% 14% 11% 10% 8% 6% 15% 3% Accrued Warranties $68 $83 Schedule of Warranty Reserves June 27, 2021 June 28, 2020 June 27, 2021 June 28, 2020 Three months ended Nine months ended June 27, 2021 June 28, 2020 June 27, 2021 June 28, 2020 Beginning balance $ 63 $ 105 $ 83 $ 46 Incurred costs for warranties satisfied during the period (4 ) (16 ) (71 ) (16 ) Warranty Expenses: Warranties reserved for new product shipped during the period (1) 9 22 18 78 Change in estimate for pre-existing warranty liabilities (2) - - 38 3 Warranty Expense 9 22 56 81 Ending balance $ 68 $ 111 $ 68 $ 111 (1) Warranty expenses accrued to cost of sales (based on current period shipments and historical warranty return rate. (2) Changes in estimated warranty liabilities for associated with the period end customer returned warranty backlog or repaired/replaced warranty units which were shipped to the customer during the period. Use of Estimates Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable and accounts payable, are carried at, or approximate, fair value as of the reporting date because of their short-term nature. The credit facility is reported at fair value as it bears market rates of interest. Fair values for the Company’s warrant liabilities and derivatives are estimated by utilizing valuation models that consider current and expected stock prices, volatility, dividends, market interest rates, forward yield curves and discount rates. Such amounts and the recognition of such amounts are subject to significant estimates that may change in the future. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value and requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions. The accounting guidance establishes a hierarchy which requires an entity to maximize the use of quoted market prices and minimize the use of unobservable inputs. An asset or liability’s level is based on the lowest level of input that is significant to the fair value measurement. Fair value estimates are reviewed at the origination date and again at each applicable measurement date and interim or annual financial reporting dates, as applicable for the financial instrument, and are based upon certain market assumptions and pertinent information available to management at those times. The methods and significant inputs and assumptions utilized in estimating the fair value of the warrant liabilities, as well as the respective hierarchy designations are discussed further in Note 6 “Warrant Liabilities”. The warrant liability measurement is considered a Level 3 measurement based on the availability of market data and inputs and the significance of any unobservable inputs as of the measurement date. Revenue Recognition $120 $359 $113 $339 During the three- and nine-month periods ended June 27, 2021 and June 28, 2020, there was zero $1 zero $3 Income Tax/Deferred Tax : As of June 27, 2021 and September 27, 2020, Optex Systems, Inc. has a deferred tax asset valuation allowance of $ 1.0 million against deferred tax assets of $ 2.3 1.3 Earnings per Share A significant number of our outstanding warrants are participating securities which share dividend distributions and the allocation of any undistributed earnings (deemed dividends) with our common shareholders. During the three and nine months ended June 27, 2021, there were no declared dividends and $464 and $622 thousand in allocated undistributed earnings attributable to the participating warrants, respectively. During the three and nine months ended June 28, 2020, there were no declared dividends, and zero and $372 thousand in undistributed earnings attributable to participating warrants, respectively. The Company has potentially dilutive securities outstanding which include unvested restricted stock units, stock options and warrants. In computing the dilutive effect of warrants, the numerator is adjusted to add back any deemed dividends on participating securities (warrants) and the denominator is increased to assume the conversion of the number of additional incremental common shares. The Company uses the Treasury Stock Method to compute the dilutive effect of any dilutive shares. Unvested restricted stock units, stock options and warrants that are anti-dilutive are excluded from the calculation of diluted earnings per common share. For the three months and nine months ended June 27, 2021, 99,000 240,000 36,883 87,550 For the three months ended June 28, 2020, 182,000 300,000 210,112 182,000 300,000 124,006 For the three and nine-months ended June 27, 2021 and the three and nine-months ended June 28, 2020, 4,125,200 warrants were excluded from the diluted earnings per share calculation due to the antidilutive effect of the undistributed earnings. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Jun. 27, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 3 - Segment Reporting The Company’s reportable segments are strategic businesses offering similar products to similar markets and customers; however, the companies are operated and managed separately due to differences in manufacturing technology, equipment, geographic location, and specific product mix. Applied Optics Center was acquired as a unit, and the management at the time of the acquisition was retained. Both the Applied Optics Center and Optex Systems – Richardson operate as reportable segments under the Optex Systems, Inc. corporate umbrella. The Applied Optics Center segment also serves as the key supplier of laser coated filters used in the production of periscope assemblies for the Optex Systems-Richardson (“Optex Systems”) segment. Intersegment sales and transfers are accounted for at annually agreed to pricing rates based on estimated segment product cost, which includes segment direct manufacturing and general and administrative costs, but exclude profits that would apply to third party external customers. Optex Systems (OPX) – Richardson, Texas The Optex Systems segment revenue is comprised of approximately 86.5 % domestic military customers and 13.5 foreign military customers. For the nine months ending June 27, 2021, the Optex segment revenue is derived from the U.S. government, 28% , and two major U.S. defense contractors representing 22% and 12% , of the Company’s consolidated revenue, respectively. Optex Systems is located in Richardson Texas, with leased premises consisting of approximately 49,100 Applied Optics Center (AOC) – Dallas, Texas The Applied Optics Center serves primarily domestic U.S. customers. Sales to commercial customers represent 29% 71% 82% 18% 8% 6% 7% The Applied Optics Center is located in Dallas, Texas with leased premises consisting of approximately 44,867 The financial tables below present the information for each of the reportable segment’s profit or loss as well as segment assets for each year. The Company does not allocate interest expense, income taxes or unusual items to segments. Schedule of Segment Reporting Information Reportable Segment Financial Information Three months ended June 27, 2021 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 3,126 $ 1,307 $ - $ 4,433 Intersegment revenues - 41 (41 ) - Total Revenue $ 3,126 $ 1,348 $ (41 ) $ 4,433 Interest expense $ - $ - $ 4 $ 4 Depreciation and Amortization $ 10 $ 57 $ - $ 67 Income (loss) before taxes $ 328 $ (214 ) $ 1,106 $ 1,220 Other significant noncash items: Allocated home office expense $ (177 ) $ 177 $ - $ - Gain on change in fair value of warrants $ - $ - $ (1,167 ) $ (1,167 ) Stock compensation expense $ - $ - $ 57 $ 57 Warranty Expense $ - $ 9 $ - $ 9 Segment Assets $ 14,690 $ 6,498 $ - $ 21,188 Expenditures for segment assets $ (3 ) $ 89 $ - $ 86 Reportable Segment Financial Information Three months ended June 28, 2020 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 3,851 $ 1,998 $ - $ 5,849 Intersegment revenues - 421 (421 ) - Total Revenue $ 3,851 $ 2,419 $ (421 ) $ 5,849 Interest expense $ - $ - $ 5 $ 5 Depreciation and Amortization $ 10 $ 51 $ - $ 61 Income before taxes $ 97 $ 592 $ (653 ) $ 36 Other significant noncash items: Allocated home office expense $ (170 ) $ 170 $ - $ - Loss on Change in Fair Value of Warrants $ - $ - $ 585 $ 585 Stock option compensation expense $ - $ - $ 63 $ 63 Warranty Expense $ - $ 22 $ - $ 22 Segment Assets $ 13,602 $ 6,522 $ - $ 20,124 Expenditures for segment assets $ 54 $ - $ - $ 54 Reportable Segment Financial Information Nine months ended June 27, 2021 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 8,958 $ 4,191 $ - $ 13,149 Intersegment revenues - 937 (937 ) - Total Revenue $ 8,958 $ 5,128 $ (937 ) $ 13,149 Interest expense $ - $ - $ 9 $ 9 Depreciation and Amortization $ 31 $ 164 $ - $ 195 Income (loss) before taxes $ 351 $ (459 ) $ 1,845 $ 1,737 Other significant noncash items: Allocated home office expense $ (530 ) $ 530 $ - $ - Gain on change in fair value of warrants $ - $ - $ (2,025 ) $ (2,025 ) Stock compensation expense $ - $ - $ 171 $ 171 Warranty expense $ - $ 56 $ - $ 56 Segment Assets $ 14,690 $ 6,498 $ - $ 21,188 Expenditures for segment assets $ 17 $ 197 $ - $ 214 Reportable Segment Financial Information Nine months ended June 28, 2020 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 11,917 $ 6,765 $ - $ 18,682 Intersegment revenues - 1,202 (1,202 ) - Total Revenue $ 11,917 $ 7,967 $ (1,202 ) $ 18,682 Interest expense $ - $ - $ 17 $ 17 Depreciation and Amortization $ 24 $ 161 $ - $ 185 Income before taxes $ 1,148 $ 1,098 $ (641 ) $ 1,605 Other significant noncash items: Allocated home office expense $ (510 ) $ 510 $ - $ - Loss on change in fair value of warrants $ - $ - $ 504 $ 504 Stock option compensation expense $ - $ - $ 120 $ 120 Warranty Expense $ - $ 81 $ - $ 81 Segment Assets $ 13,602 $ 6,522 $ - $ 20,124 Expenditures for segment assets $ 100 $ 50 $ - $ 150 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 27, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 4 - Commitments and Contingencies Non-cancellable Operating Leases Optex Systems Holdings leases its office and manufacturing facilities for the Optex Systems, Inc., Richardson address and the Applied Optics Center Dallas address, as well as certain office equipment under non-cancellable operating leases. The leased facility under Optex Systems Inc. at 1420 Presidential Drive, Richardson, Texas consists of 49,100 March 31, 2021 the monthly base rent was $24.6 thousand through March 31, 2021. On January 11, 2021 the Company executed a sixth amendment extending the terms of its Optex Systems, Richardson location lease for eighty-six (86) months, commencing on April 1, 2021 and ending on May 31, 2028. The initial base rent is set at $25.3 thousand and escalates 3% each year thereafter on April 1, each year. $11.6 The leased facility under the Applied Optics Center at 9839 and 9827 Chartwell Drive, Dallas, Texas, consists of 44,867 October 31, 2021 The monthly base rent is $21.9 thousand through October 31, 2021. the Company executed a first amendment extending the terms of its current Applied Optics Center, Dallas location lease for eighty-six (86) months, commencing on November 1, 2021 and ending on December 31, 2028. The initial base rent is set at $23.6 2.75% $7.8 The Company has one non-cancellable office equipment lease with a commencement date of October 1, 2018 and a term of 39 months. The lease cost for the equipment is $1.5 Optex Systems Holdings adopted the provisions of ASC Topic 842 “Leases” as of the fiscal year beginning on September 30, 2019. Optex Systems Holdings has two significant operating facilities leases and one equipment lease which extends beyond twelve months and fall under the guidance of ASC Topic 842. Adoption of ASC Topic 842 resulted in the balance sheet recognition of a right-of-use asset of $1.8 $1.9 five $3.7 $3.7 As of June 27, 2021, the remaining minimum lease and estimated CAM payments under the non-cancelable office and facility space leases are as follows: Schedule of Non-cancellable Operating Leases Minimum Payments Non-cancellable Operating Leases (Thousands) Optex Richardson Applied Optics Center Office Equipment Consolidated Fiscal Year Facility Facility Lease Payments Total Lease Payments Total Variable CAM Estimate 2021 Base year lease 76 66 5 147 58 2022 Base year lease 308 234 5 547 237 2023 Base year lease 317 288 605 242 2024 Base year lease 327 296 623 247 2025 Base year lease 336 305 641 252 2026 Base year lease 346 313 659 257 2027 Base year lease 357 322 679 262 2028 Base year lease 241 330 571 188 2029 Base year lease - 83 83 27 Total base lease payments 2,308 $ 2,237 $ 10 4,555 $ 1,770 Imputed interest on lease payments (1) (363 ) (408 ) (1 ) (772 ) Total Operating Lease Liability (2) $ 1,945 $ 1,829 $ 9 $ 3,783 Right-of-use Asset (3) $ 1,889 $ 1,823 $ 9 $ 3,721 (1) Assumes a discount borrowing rate of 5.0% October 31, 2021 (2) Short-term and Long-term portion of Operating Lease Liability is $529 $3,254 (3) Includes $62 Total facilities rental and CAM expense for both facility lease agreements as of the three and nine months ended June 27, 2021 was $207 $569 $187 $541 Total office equipment rentals included in operating expenses was $6 $17 $7 $19 |
Debt Financing
Debt Financing | 9 Months Ended |
Jun. 27, 2021 | |
Debt Disclosure [Abstract] | |
Debt Financing | Note 5 - Debt Financing Credit Facility On April 16, 2020, the Company terminated its facility with Avidbank and entered into a new facility with BBVA USA. On April 16, 2020, Optex Systems Holdings, Inc. and its subsidiary, Optex Systems, Inc. (and with the Company, the “Borrower”) entered into a line of credit facility (the “Facility”) with BBVA, USA (“BBVA”) The substantive terms are as follows: ● The principal amount of the Facility is $2.25 April 15, 2022 -0.250% 3% ● There are commercially standard covenants including, but not limited to, covenants regarding maintenance of corporate existence, not incurring other indebtedness except trade debt, not changing more than 25% stock ownership of Borrower, and a Fixed Charge Coverage Ratio of 1.25:1, with the Fixed Charge Coverage Ratio defined as (earnings before taxes, depreciation, amortization and rent expense less cash taxes, distribution, dividends and fair value of warrants) divided by (current maturities on long term debt plus interest expense plus rent expense). As of June 27, 2021, the Company was in compliance with the covenants. ● The Facility contains commercially standard events of default including, but not limited to, not making payments when due; incurring a judgment of $10,000 ● The Facility is secured by a first lien on all of the assets of Borrower. The outstanding balance on the facility was $377 |
Warrant Liabilities
Warrant Liabilities | 9 Months Ended |
Jun. 27, 2021 | |
Warrant Liabilities | |
Warrant Liabilities | Note 6- Warrant Liabilities On August 26, 2016, Optex Systems Holdings, Inc. issued 4,323,135 $1.50 August 26, 2021 “Distinguishing Liabilities from Equity” The fair value of the warrant liabilities presented below were measured using a Black Scholes Merton (BSM) valuation model. Significant inputs into the respective model at the reporting period measurement dates are as follows: Schedule of Fair Value Warrant Liabilities Valuation Assumptions Period ended September 29, 2019 Period ended September 27, 2020 Period ended June 28, 2020 Period ended June 27, 2021 Exercise Price (1) $ 1.50 $ 1.50 $ 1.50 $ 1.50 Warrant Expiration Date (1) 8/26/2021 8/26/2021 8/26/2021 8/26/2021 Stock Price (2) $ 1.56 $ 1.96 $ 1.90 $ 1.53 Interest Rate (annual) (3) 1.63 % 0.12 % 0.17 % 0.06 % Volatility (annual) 53.66 % 51.67 % 52.82 % 44.35 % Time to Maturity (Years) 1.9 0.9 1.2 0.2 Calculated fair value per share $ 0.49 $ 0.62 $ 0.62 $ 0.13 (1) Based on the terms provided in the warrant agreement to purchase common stock of Optex Systems Holdings, Inc. dated August 26, 2016. (2) Based on the trading value of common stock of Optex Systems Holdings, Inc. as of each presented period ended date. (3) Interest rate for U.S. Treasury Bonds as each presented period ended date, as published by the U.S. Federal Reserve. The warrants outstanding and fair values at each of the respective valuation dates are summarized below: Summary of Warrants Outstanding and Fair Values Warrant Liability Warrants Outstanding Fair Value per Share Fair Value (000’s) Fair Value as of period ended 9/29/2019 4,125,200 $ 0.49 $ 2,036 Loss on Change in Fair Value of Warrant Liability 504 Fair Value as of period ended 6/28/2020 4,125,200 $ 0.62 2,540 Fair Value as of period ended 9/27/2020 4,125,200 $ 0.62 $ 2,544 Gain on Change in Fair Value of Warrant Liability (2,025 ) Fair Value as of period ended 6/27/2021 4,125,200 $ 0.13 $ 519 During the three and nine months ended June 27, 2021 and June 28, 2020, there were no new issues or exercises of existing warrants. The warrant liabilities are considered Level 3 liabilities on the fair value hierarchy as the determination of fair value includes various assumptions about future activities and the Company’s stock prices and historical volatility as inputs. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Jun. 27, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | Note 7- Stock Based Compensation Stock Options issued to Employees, Officers and Directors The Optex Systems Holdings 2009 Stock Option Plan provides for the issuance of up to 75,000 no Restricted Stock Units issued to Officers and Employees The following table summarizes the status of Optex Systems Holdings’ aggregate non-vested restricted stock units granted under the Company’s 2016 Restricted Stock Unit Plan: Schedule of Aggregate Non-vested Restricted Stock Units Granted Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Shares Weighted Average Grant Date Fair Value Outstanding at September 29, 2019 216,500 $ 1.29 — — Granted 50,000 $ 2.13 300,000 $ 1.75 Vested (84,500 ) $ 1.25 — — Forfeited - — — — Outstanding at September 27, 2020 182,000 $ 1.54 300,000 $ 1.75 Granted — — — — Vested (83,000 ) $ 1.49 (60,000 ) $ 1.75 Forfeited — — — — Outstanding at June 27, 2021 99,000 $ 1.59 240,000 $ 1.75 On February 17, 2020, the Company granted 50,000 three 34 33 2.13 107 three On January 7, 2020, the Company issued 59,447 54 84,500 On January 2, 2021, the Company issued 58,392 44 83,000 On April 30, 2020, the Optex Systems Holdings, Inc. Board of Directors held a meeting and voted to increase the annual board compensation for the three independent directors from $ 22,000 36,000 100,000 20 st five years 300,000 525 1.75 five 60,000 Stock Based Compensation Expense Equity compensation is amortized based on a straight-line basis across the vesting or service period as applicable. The recorded compensation costs for options and shares granted and restricted stock units awarded as well as the unrecognized compensation costs are summarized in the table below: Schedule of Unrecognized Compensation Costs Stock Compensation (thousands) Recognized Compensation Expense Unrecognized Compensation Expense Three months ended Nine months ended As of period ended June 27, 2021 June 28, 2020 June 27, 2021 June 28, 2020 June 27, 2021 September 27, Restricted Shares $ 26 $ 31 $ 79 $ 31 $ 368 $ 446 Restricted Stock Units 31 32 92 89 96 188 Total Stock Compensation $ 57 $ 63 $ 171 $ 120 $ 464 $ 634 |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Jun. 27, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 8 Stockholders’ Equity Dividends As of the nine months ended June 27, 2021 and the twelve months ended September 27, 2020, there were no declared or outstanding dividends payable. Common stock On June 8, 2020 the Company announced authorization for a $ 1 413,533 800 519,266 1.0 (Thousands, except share and price per share data) Summary of Purchases Under Plan Fiscal Period Total number of shares purchased Total purchase cost Average price paid per share (with commission) Maximum dollar value that may yet be purchased under the plan May 24, 2020 through June 28, 2020 34,243 $ 63 $ 1.84 $ 937 June 29, 2020 through July 26, 2020 6,806 13 1.89 924 July 27, 2020 through August 23, 2020 10,688 21 1.96 903 August 23, 2020 through September 27, 2020 53,996 103 1.90 800 Total shares repurchases as of September 27, 2020 105,733 $ 200 1.89 800 - September 28, 2020 through October 25, 2020 20,948 42 2.01 758 October 26, 2020 through November 22, 2020 129,245 265 2.05 493 November 23, 2020 through December 27, 2020 58,399 109 1.86 384 December 28, 2020 through January 24, 2021 40,362 73 1.80 312 January 25, 2021 through February 21, 2021 52,180 101 1.94 211 February 22, 2021 through March 28, 2021 73,800 140 1.90 70 March 29, 2021 through April 19, 2021 38,599 70 1.82 - Total shares repurchased as of June 27, 2021 519,266 $ 1,000 $ 1.93 $ - As of September 27, 2020, and June 27, 2021, the total outstanding common shares were 8,690,136 8,334,995 As of September 27, 2020, and June 27, 2021, the total issued common shares were 8,795,869 8,334,995 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 27, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9 Subsequent Events July 2021 Ransomware Attack On July 13, 2021, the Company experienced a ransomware attack. The Company isolated the source of the attack and restored normal operations with no material day-to-day impact to the Company or the Company’s ability to access its data. Sensitive data may have been breached, and the Company’s investigation of the attack is ongoing with assistance from outside experts and the Company is also working with the appropriate US Government officials. On August 10, 2021, the Company issued 148,300 1.50 222,450 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Jun. 27, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements of Optex Systems Holdings included herein have been prepared by Optex Systems Holdings, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in conjunction with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and the notes thereto included in the Optex Systems Holdings’ Form 10-K for the year ended September 27, 2020 and other reports filed with the SEC. The accompanying unaudited interim condensed consolidated financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of Optex Systems Holdings for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole. Certain information that is not required for interim financial reporting purposes has been omitted. |
Leases | Leases $3.7 $3.7 |
Inventory | Inventory Schedule of Inventory June 27, 2021 September 27, 2020 (Thousands) June 27, 2021 September 27, 2020 Raw Material $ 4,724 $ 5,506 Work in Process 3,768 3,214 Finished Goods 720 638 Gross Inventory $ 9,212 $ 9,358 Less: Inventory Reserves (567 ) (567 ) Net Inventory $ 8,645 $ 8,791 |
Concentration of Credit Risk | Concentration of Credit Risk 19% 14% 14% 11% 10% 8% 6% 15% 3% |
Accrued Warranties | Accrued Warranties $68 $83 Schedule of Warranty Reserves June 27, 2021 June 28, 2020 June 27, 2021 June 28, 2020 Three months ended Nine months ended June 27, 2021 June 28, 2020 June 27, 2021 June 28, 2020 Beginning balance $ 63 $ 105 $ 83 $ 46 Incurred costs for warranties satisfied during the period (4 ) (16 ) (71 ) (16 ) Warranty Expenses: Warranties reserved for new product shipped during the period (1) 9 22 18 78 Change in estimate for pre-existing warranty liabilities (2) - - 38 3 Warranty Expense 9 22 56 81 Ending balance $ 68 $ 111 $ 68 $ 111 (1) Warranty expenses accrued to cost of sales (based on current period shipments and historical warranty return rate. (2) Changes in estimated warranty liabilities for associated with the period end customer returned warranty backlog or repaired/replaced warranty units which were shipped to the customer during the period. |
Use of Estimates | Use of Estimates |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable and accounts payable, are carried at, or approximate, fair value as of the reporting date because of their short-term nature. The credit facility is reported at fair value as it bears market rates of interest. Fair values for the Company’s warrant liabilities and derivatives are estimated by utilizing valuation models that consider current and expected stock prices, volatility, dividends, market interest rates, forward yield curves and discount rates. Such amounts and the recognition of such amounts are subject to significant estimates that may change in the future. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value and requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions. The accounting guidance establishes a hierarchy which requires an entity to maximize the use of quoted market prices and minimize the use of unobservable inputs. An asset or liability’s level is based on the lowest level of input that is significant to the fair value measurement. Fair value estimates are reviewed at the origination date and again at each applicable measurement date and interim or annual financial reporting dates, as applicable for the financial instrument, and are based upon certain market assumptions and pertinent information available to management at those times. The methods and significant inputs and assumptions utilized in estimating the fair value of the warrant liabilities, as well as the respective hierarchy designations are discussed further in Note 6 “Warrant Liabilities”. The warrant liability measurement is considered a Level 3 measurement based on the availability of market data and inputs and the significance of any unobservable inputs as of the measurement date. |
Revenue Recognition | Revenue Recognition $120 $359 $113 $339 During the three- and nine-month periods ended June 27, 2021 and June 28, 2020, there was zero $1 zero $3 |
Income Tax/Deferred Tax | Income Tax/Deferred Tax : As of June 27, 2021 and September 27, 2020, Optex Systems, Inc. has a deferred tax asset valuation allowance of $ 1.0 million against deferred tax assets of $ 2.3 1.3 |
Earnings per Share | Earnings per Share A significant number of our outstanding warrants are participating securities which share dividend distributions and the allocation of any undistributed earnings (deemed dividends) with our common shareholders. During the three and nine months ended June 27, 2021, there were no declared dividends and $464 and $622 thousand in allocated undistributed earnings attributable to the participating warrants, respectively. During the three and nine months ended June 28, 2020, there were no declared dividends, and zero and $372 thousand in undistributed earnings attributable to participating warrants, respectively. The Company has potentially dilutive securities outstanding which include unvested restricted stock units, stock options and warrants. In computing the dilutive effect of warrants, the numerator is adjusted to add back any deemed dividends on participating securities (warrants) and the denominator is increased to assume the conversion of the number of additional incremental common shares. The Company uses the Treasury Stock Method to compute the dilutive effect of any dilutive shares. Unvested restricted stock units, stock options and warrants that are anti-dilutive are excluded from the calculation of diluted earnings per common share. For the three months and nine months ended June 27, 2021, 99,000 240,000 36,883 87,550 For the three months ended June 28, 2020, 182,000 300,000 210,112 182,000 300,000 124,006 For the three and nine-months ended June 27, 2021 and the three and nine-months ended June 28, 2020, 4,125,200 warrants were excluded from the diluted earnings per share calculation due to the antidilutive effect of the undistributed earnings. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 9 Months Ended |
Jun. 27, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | Schedule of Inventory June 27, 2021 September 27, 2020 (Thousands) June 27, 2021 September 27, 2020 Raw Material $ 4,724 $ 5,506 Work in Process 3,768 3,214 Finished Goods 720 638 Gross Inventory $ 9,212 $ 9,358 Less: Inventory Reserves (567 ) (567 ) Net Inventory $ 8,645 $ 8,791 |
Schedule of Warranty Reserves | Schedule of Warranty Reserves June 27, 2021 June 28, 2020 June 27, 2021 June 28, 2020 Three months ended Nine months ended June 27, 2021 June 28, 2020 June 27, 2021 June 28, 2020 Beginning balance $ 63 $ 105 $ 83 $ 46 Incurred costs for warranties satisfied during the period (4 ) (16 ) (71 ) (16 ) Warranty Expenses: Warranties reserved for new product shipped during the period (1) 9 22 18 78 Change in estimate for pre-existing warranty liabilities (2) - - 38 3 Warranty Expense 9 22 56 81 Ending balance $ 68 $ 111 $ 68 $ 111 (1) Warranty expenses accrued to cost of sales (based on current period shipments and historical warranty return rate. (2) Changes in estimated warranty liabilities for associated with the period end customer returned warranty backlog or repaired/replaced warranty units which were shipped to the customer during the period. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Jun. 27, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The financial tables below present the information for each of the reportable segment’s profit or loss as well as segment assets for each year. The Company does not allocate interest expense, income taxes or unusual items to segments. Schedule of Segment Reporting Information Reportable Segment Financial Information Three months ended June 27, 2021 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 3,126 $ 1,307 $ - $ 4,433 Intersegment revenues - 41 (41 ) - Total Revenue $ 3,126 $ 1,348 $ (41 ) $ 4,433 Interest expense $ - $ - $ 4 $ 4 Depreciation and Amortization $ 10 $ 57 $ - $ 67 Income (loss) before taxes $ 328 $ (214 ) $ 1,106 $ 1,220 Other significant noncash items: Allocated home office expense $ (177 ) $ 177 $ - $ - Gain on change in fair value of warrants $ - $ - $ (1,167 ) $ (1,167 ) Stock compensation expense $ - $ - $ 57 $ 57 Warranty Expense $ - $ 9 $ - $ 9 Segment Assets $ 14,690 $ 6,498 $ - $ 21,188 Expenditures for segment assets $ (3 ) $ 89 $ - $ 86 Reportable Segment Financial Information Three months ended June 28, 2020 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 3,851 $ 1,998 $ - $ 5,849 Intersegment revenues - 421 (421 ) - Total Revenue $ 3,851 $ 2,419 $ (421 ) $ 5,849 Interest expense $ - $ - $ 5 $ 5 Depreciation and Amortization $ 10 $ 51 $ - $ 61 Income before taxes $ 97 $ 592 $ (653 ) $ 36 Other significant noncash items: Allocated home office expense $ (170 ) $ 170 $ - $ - Loss on Change in Fair Value of Warrants $ - $ - $ 585 $ 585 Stock option compensation expense $ - $ - $ 63 $ 63 Warranty Expense $ - $ 22 $ - $ 22 Segment Assets $ 13,602 $ 6,522 $ - $ 20,124 Expenditures for segment assets $ 54 $ - $ - $ 54 Reportable Segment Financial Information Nine months ended June 27, 2021 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 8,958 $ 4,191 $ - $ 13,149 Intersegment revenues - 937 (937 ) - Total Revenue $ 8,958 $ 5,128 $ (937 ) $ 13,149 Interest expense $ - $ - $ 9 $ 9 Depreciation and Amortization $ 31 $ 164 $ - $ 195 Income (loss) before taxes $ 351 $ (459 ) $ 1,845 $ 1,737 Other significant noncash items: Allocated home office expense $ (530 ) $ 530 $ - $ - Gain on change in fair value of warrants $ - $ - $ (2,025 ) $ (2,025 ) Stock compensation expense $ - $ - $ 171 $ 171 Warranty expense $ - $ 56 $ - $ 56 Segment Assets $ 14,690 $ 6,498 $ - $ 21,188 Expenditures for segment assets $ 17 $ 197 $ - $ 214 Reportable Segment Financial Information Nine months ended June 28, 2020 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 11,917 $ 6,765 $ - $ 18,682 Intersegment revenues - 1,202 (1,202 ) - Total Revenue $ 11,917 $ 7,967 $ (1,202 ) $ 18,682 Interest expense $ - $ - $ 17 $ 17 Depreciation and Amortization $ 24 $ 161 $ - $ 185 Income before taxes $ 1,148 $ 1,098 $ (641 ) $ 1,605 Other significant noncash items: Allocated home office expense $ (510 ) $ 510 $ - $ - Loss on change in fair value of warrants $ - $ - $ 504 $ 504 Stock option compensation expense $ - $ - $ 120 $ 120 Warranty Expense $ - $ 81 $ - $ 81 Segment Assets $ 13,602 $ 6,522 $ - $ 20,124 Expenditures for segment assets $ 100 $ 50 $ - $ 150 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Jun. 27, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Non-cancellable Operating Leases Minimum Payments | As of June 27, 2021, the remaining minimum lease and estimated CAM payments under the non-cancelable office and facility space leases are as follows: Schedule of Non-cancellable Operating Leases Minimum Payments Non-cancellable Operating Leases (Thousands) Optex Richardson Applied Optics Center Office Equipment Consolidated Fiscal Year Facility Facility Lease Payments Total Lease Payments Total Variable CAM Estimate 2021 Base year lease 76 66 5 147 58 2022 Base year lease 308 234 5 547 237 2023 Base year lease 317 288 605 242 2024 Base year lease 327 296 623 247 2025 Base year lease 336 305 641 252 2026 Base year lease 346 313 659 257 2027 Base year lease 357 322 679 262 2028 Base year lease 241 330 571 188 2029 Base year lease - 83 83 27 Total base lease payments 2,308 $ 2,237 $ 10 4,555 $ 1,770 Imputed interest on lease payments (1) (363 ) (408 ) (1 ) (772 ) Total Operating Lease Liability (2) $ 1,945 $ 1,829 $ 9 $ 3,783 Right-of-use Asset (3) $ 1,889 $ 1,823 $ 9 $ 3,721 (1) Assumes a discount borrowing rate of 5.0% October 31, 2021 (2) Short-term and Long-term portion of Operating Lease Liability is $529 $3,254 (3) Includes $62 |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 9 Months Ended |
Jun. 27, 2021 | |
Warrant Liabilities | |
Schedule of Fair Value Warrant Liabilities | The fair value of the warrant liabilities presented below were measured using a Black Scholes Merton (BSM) valuation model. Significant inputs into the respective model at the reporting period measurement dates are as follows: Schedule of Fair Value Warrant Liabilities Valuation Assumptions Period ended September 29, 2019 Period ended September 27, 2020 Period ended June 28, 2020 Period ended June 27, 2021 Exercise Price (1) $ 1.50 $ 1.50 $ 1.50 $ 1.50 Warrant Expiration Date (1) 8/26/2021 8/26/2021 8/26/2021 8/26/2021 Stock Price (2) $ 1.56 $ 1.96 $ 1.90 $ 1.53 Interest Rate (annual) (3) 1.63 % 0.12 % 0.17 % 0.06 % Volatility (annual) 53.66 % 51.67 % 52.82 % 44.35 % Time to Maturity (Years) 1.9 0.9 1.2 0.2 Calculated fair value per share $ 0.49 $ 0.62 $ 0.62 $ 0.13 (1) Based on the terms provided in the warrant agreement to purchase common stock of Optex Systems Holdings, Inc. dated August 26, 2016. (2) Based on the trading value of common stock of Optex Systems Holdings, Inc. as of each presented period ended date. (3) Interest rate for U.S. Treasury Bonds as each presented period ended date, as published by the U.S. Federal Reserve. |
Summary of Warrants Outstanding and Fair Values | The warrants outstanding and fair values at each of the respective valuation dates are summarized below: Summary of Warrants Outstanding and Fair Values Warrant Liability Warrants Outstanding Fair Value per Share Fair Value (000’s) Fair Value as of period ended 9/29/2019 4,125,200 $ 0.49 $ 2,036 Loss on Change in Fair Value of Warrant Liability 504 Fair Value as of period ended 6/28/2020 4,125,200 $ 0.62 2,540 Fair Value as of period ended 9/27/2020 4,125,200 $ 0.62 $ 2,544 Gain on Change in Fair Value of Warrant Liability (2,025 ) Fair Value as of period ended 6/27/2021 4,125,200 $ 0.13 $ 519 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Jun. 27, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Aggregate Non-vested Restricted Stock Units Granted | Schedule of Aggregate Non-vested Restricted Stock Units Granted Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Shares Weighted Average Grant Date Fair Value Outstanding at September 29, 2019 216,500 $ 1.29 — — Granted 50,000 $ 2.13 300,000 $ 1.75 Vested (84,500 ) $ 1.25 — — Forfeited - — — — Outstanding at September 27, 2020 182,000 $ 1.54 300,000 $ 1.75 Granted — — — — Vested (83,000 ) $ 1.49 (60,000 ) $ 1.75 Forfeited — — — — Outstanding at June 27, 2021 99,000 $ 1.59 240,000 $ 1.75 |
Schedule of Unrecognized Compensation Costs | Schedule of Unrecognized Compensation Costs Stock Compensation (thousands) Recognized Compensation Expense Unrecognized Compensation Expense Three months ended Nine months ended As of period ended June 27, 2021 June 28, 2020 June 27, 2021 June 28, 2020 June 27, 2021 September 27, Restricted Shares $ 26 $ 31 $ 79 $ 31 $ 368 $ 446 Restricted Stock Units 31 32 92 89 96 188 Total Stock Compensation $ 57 $ 63 $ 171 $ 120 $ 464 $ 634 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Jun. 27, 2021 | |
Equity [Abstract] | |
Summary of Purchases Under Plan | Summary of Purchases Under Plan Fiscal Period Total number of shares purchased Total purchase cost Average price paid per share (with commission) Maximum dollar value that may yet be purchased under the plan May 24, 2020 through June 28, 2020 34,243 $ 63 $ 1.84 $ 937 June 29, 2020 through July 26, 2020 6,806 13 1.89 924 July 27, 2020 through August 23, 2020 10,688 21 1.96 903 August 23, 2020 through September 27, 2020 53,996 103 1.90 800 Total shares repurchases as of September 27, 2020 105,733 $ 200 1.89 800 - September 28, 2020 through October 25, 2020 20,948 42 2.01 758 October 26, 2020 through November 22, 2020 129,245 265 2.05 493 November 23, 2020 through December 27, 2020 58,399 109 1.86 384 December 28, 2020 through January 24, 2021 40,362 73 1.80 312 January 25, 2021 through February 21, 2021 52,180 101 1.94 211 February 22, 2021 through March 28, 2021 73,800 140 1.90 70 March 29, 2021 through April 19, 2021 38,599 70 1.82 - Total shares repurchased as of June 27, 2021 519,266 $ 1,000 $ 1.93 $ - |
Organization and Operations (De
Organization and Operations (Details Narrative) | 9 Months Ended |
Jun. 27, 2021ft² | |
Product Information [Line Items] | |
Leased facility | 93,967 |
Revenue description | We have experienced a reduction of 29.6% in revenue volume during the first nine months of fiscal year 2021 |
Revenue Benchmark [Member] | UNITED STATES | |
Product Information [Line Items] | |
Percentage of revenue | 90.50% |
Revenue Benchmark [Member] | Foreign Customers [Member] | |
Product Information [Line Items] | |
Percentage of revenue | 9.50% |
U.S. government [Member] | Revenue Benchmark [Member] | |
Product Information [Line Items] | |
Percentage of revenue | 28.30% |
U.S Defense Contractor One [Member] | Revenue Benchmark [Member] | |
Product Information [Line Items] | |
Percentage of revenue | 29.70% |
U.S Defense Contractor Two [Member] | Revenue Benchmark [Member] | |
Product Information [Line Items] | |
Percentage of revenue | 12.40% |
U.S Defense Contractor Three [Member] | Revenue Benchmark [Member] | |
Product Information [Line Items] | |
Percentage of revenue | 6.00% |
U.S Defense Contractor Four [Member] | Revenue Benchmark [Member] | |
Product Information [Line Items] | |
Percentage of revenue | 6.80% |
All Other Customers [Member] | Revenue Benchmark [Member] | |
Product Information [Line Items] | |
Percentage of revenue | 16.80% |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) $ in Thousands | Jun. 27, 2021 | Sep. 27, 2020 |
Accounting Policies [Abstract] | ||
Raw Material | $ 4,724 | $ 5,506 |
Work in Process | 3,768 | 3,214 |
Finished Goods | 720 | 638 |
Gross Inventory | 9,212 | 9,358 |
Less: Inventory Reserves | (567) | (567) |
Net Inventory | $ 8,645 | $ 8,791 |
Schedule of Warranty Reserves (
Schedule of Warranty Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 27, 2021 | Jun. 28, 2020 | Jun. 27, 2021 | Jun. 28, 2020 | ||
Accounting Policies [Abstract] | |||||
Beginning balance | $ 63 | $ 105 | $ 83 | $ 46 | |
Incurred costs for warranties satisfied during the period | (4) | (16) | (71) | (16) | |
Warranties reserved for new product shipped during the period | [1] | 9 | 22 | 18 | 78 |
Standard and Extended Product Warranty Accrual, Increase (Decrease) for Preexisting Warranties | [2] | 38 | 3 | ||
Warranty Expense | 9 | 22 | 56 | 81 | |
Ending balance | $ 68 | $ 111 | $ 68 | $ 111 | |
[1] | Warranty expenses accrued to cost of sales (based on current period shipments and historical warranty return rate. | ||||
[2] | Changes in estimated warranty liabilities for associated with the period end customer returned warranty backlog or repaired/replaced warranty units which were shipped to the customer during the period. |
Accounting Policies (Details Na
Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||
Jun. 27, 2021 | Jun. 28, 2020 | Jun. 27, 2021 | Jun. 28, 2020 | Mar. 28, 2021 | Sep. 27, 2020 | Mar. 29, 2020 | Sep. 29, 2019 | Sep. 27, 2019 | |||
Product Information [Line Items] | |||||||||||
Right-of-use asset | $ 3,721 | [1] | $ 3,721 | [1] | $ 1,416 | $ 1,800 | |||||
Lease liability | 3,783 | [2] | 3,783 | [2] | $ 1,900 | ||||||
Warranty reserve | 68 | $ 111 | 68 | $ 111 | $ 63 | 83 | $ 105 | $ 46 | |||
Revenue | 4,433 | 5,849 | 13,149 | 18,682 | |||||||
Deferred tax asset valuation allowance | 1,000 | 1,000 | 1,000 | ||||||||
Deferred tax assets | 2,300 | 2,300 | 2,300 | ||||||||
Net deferred tax asset | 1,300 | 1,300 | $ 1,300 | ||||||||
Warrant [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Dividends | 0 | 0 | |||||||||
Undistributed earnings | $ 464 | $ 0 | $ 622 | $ 372 | |||||||
Number of stock option were excluded as dilutive | 4,125,200 | 4,125,200 | |||||||||
Unvested Restricted Stock Units [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Number of stock option were included as dilutive | 99,000 | 99,000 | 182,000 | ||||||||
Number of stock units were incremental dilutive shares | 36,883 | 210,112 | 36,883 | 124,006 | |||||||
Number of stock option were excluded as dilutive | 182,000 | ||||||||||
Unvested Restricted Stock [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Number of stock option were included as dilutive | 240,000 | 240,000 | 300,000 | ||||||||
Number of stock units were incremental dilutive shares | 87,550 | 210,112 | 87,550 | 124,006 | |||||||
Number of stock option were excluded as dilutive | 300,000 | ||||||||||
Service Contract [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenue recognized over time | $ 113 | $ 359 | $ 339 | ||||||||
Service Contract [Member] | Transferred over Time [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenue recognized over time | $ 120 | ||||||||||
Customer Deposit Liabilities [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenue | 0 | $ 0 | $ 1 | $ 3 | |||||||
Revenue Benchmark [Member] | One Commercial Customer [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk percentage | 15.00% | ||||||||||
Revenue Benchmark [Member] | U.S. Government Agencies [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk percentage | 19.00% | ||||||||||
Revenue Benchmark [Member] | Major U.S Defense Contractor One [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk percentage | 14.00% | ||||||||||
Revenue Benchmark [Member] | Major U.S Defense Contractor Two [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk percentage | 14.00% | ||||||||||
Revenue Benchmark [Member] | Major U.S Defense Contractor Three [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk percentage | 11.00% | ||||||||||
Revenue Benchmark [Member] | Major U.S Defense Contractor Four [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk percentage | 10.00% | ||||||||||
Revenue Benchmark [Member] | Major U.S Defense Contractor Five [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk percentage | 8.00% | ||||||||||
Revenue Benchmark [Member] | Major U.S Defense Contractor Six [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk percentage | 6.00% | ||||||||||
Revenue Benchmark [Member] | All Other Customers [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration risk percentage | 3.00% | ||||||||||
November 1, 2021 [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Right-of-use asset | 3,700 | $ 3,700 | |||||||||
Lease liability | $ 3,700 | $ 3,700 | |||||||||
[1] | Includes $62 | ||||||||||
[2] | Short-term and Long-term portion of Operating Lease Liability is $529 $3,254 |
Schedule of Segment Reporting I
Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 27, 2021 | Jun. 28, 2020 | Jun. 27, 2021 | Jun. 28, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 4,433 | $ 5,849 | $ 13,149 | $ 18,682 |
Interest expense | 4 | 5 | 9 | 17 |
Depreciation and Amortization | 67 | 61 | 195 | 185 |
Income (loss) before taxes | 1,220 | 36 | 1,737 | 1,605 |
Allocated home office expense | ||||
Gain on change in fair value of warrants | (1,167) | (2,025) | ||
Stock compensation expense | 57 | 63 | 171 | 120 |
Warranty Expense | 9 | 22 | 56 | 81 |
Segment Assets | 21,188 | 20,124 | 21,188 | 20,124 |
Expenditures for segment assets | 86 | 54 | 214 | 150 |
Loss on change in fair value of warrants | 585 | 504 | ||
Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | (41) | (421) | (937) | (1,202) |
Interest expense | 4 | 5 | 9 | 17 |
Depreciation and Amortization | ||||
Income (loss) before taxes | 1,106 | (653) | 1,845 | (641) |
Allocated home office expense | ||||
Gain on change in fair value of warrants | (1,167) | (2,025) | ||
Stock compensation expense | 57 | 63 | 171 | 120 |
Warranty Expense | ||||
Segment Assets | ||||
Expenditures for segment assets | ||||
Loss on change in fair value of warrants | 585 | 504 | ||
Optex Systems (OPX) - Richardson, Texas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 3,126 | 3,851 | 8,958 | 11,917 |
Interest expense | ||||
Depreciation and Amortization | 10 | 10 | 31 | 24 |
Income (loss) before taxes | 328 | 97 | 351 | 1,148 |
Allocated home office expense | (177) | (170) | (530) | (510) |
Gain on change in fair value of warrants | ||||
Stock compensation expense | ||||
Warranty Expense | ||||
Segment Assets | 14,690 | 13,602 | 14,690 | 13,602 |
Expenditures for segment assets | (3) | 54 | 17 | 100 |
Loss on change in fair value of warrants | ||||
Applied Optics Center (AOC) - Dallas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 1,348 | 2,419 | 5,128 | 7,967 |
Interest expense | ||||
Depreciation and Amortization | 57 | 51 | 164 | 161 |
Income (loss) before taxes | (214) | 592 | (459) | 1,098 |
Allocated home office expense | 177 | 170 | 530 | 510 |
Gain on change in fair value of warrants | ||||
Stock compensation expense | ||||
Warranty Expense | 9 | 22 | 56 | 81 |
Segment Assets | 6,498 | 6,522 | 6,498 | 6,522 |
Expenditures for segment assets | 89 | 197 | 50 | |
Loss on change in fair value of warrants | ||||
Revenues from External Customers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 4,433 | 5,849 | 13,149 | 18,682 |
Revenues from External Customers [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | ||||
Revenues from External Customers [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 3,126 | 3,851 | 8,958 | 11,917 |
Revenues from External Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 1,307 | 1,998 | 4,191 | 6,765 |
Intersegment revenues [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | ||||
Intersegment revenues [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | (41) | (421) | (937) | (1,202) |
Intersegment revenues [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | ||||
Intersegment revenues [Member] | Applied Optics Center (AOC) - Dallas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 41 | $ 421 | $ 937 | $ 1,202 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 9 Months Ended |
Jun. 27, 2021ft² | |
Revenue, Major Customer [Line Items] | |
Leased facilities | 93,967 |
Optex Systems (OPX) - Richardson, Texas [Member] | |
Revenue, Major Customer [Line Items] | |
Leased facilities | 49,100 |
Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Leased facilities | 44,867 |
Domestic Military Customers [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 86.50% |
Foreign Military Customers [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 13.50% |
U.S. government [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 28.30% |
U.S. government [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 28.00% |
U.S. government [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 18.00% |
U.S Defense Contractor One [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 29.70% |
U.S Defense Contractor One [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 22.00% |
U.S Defense Contractor Two [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 12.40% |
U.S Defense Contractor Two [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 12.00% |
Commercial Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 29.00% |
Subcontracted Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 71.00% |
Revenues from External Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 82.00% |
One Major Commercial Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 8.00% |
Two Major Defense Contractors [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 6.00% |
Three Major Defense Contractors [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue Benchmark [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue | 7.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | Jan. 11, 2021USD ($) | Jun. 27, 2021USD ($)ft² | Jun. 28, 2020USD ($) | Jun. 27, 2021USD ($)ft² | Jun. 28, 2020USD ($) | Sep. 27, 2020USD ($) | Sep. 27, 2019USD ($) | |||
LeaseDisclosureLineItem [Line Items] | ||||||||||
Area of land | ft² | 93,967 | 93,967 | ||||||||
Expiration date | Oct. 31, 2021 | |||||||||
Monthly base rent | $ 62,000 | |||||||||
Least cost for equipment | $ 6,000 | $ 7,000 | 17,000 | $ 19,000 | ||||||
Right of use asset | 3,721,000 | [1] | 3,721,000 | [1] | $ 1,416,000 | $ 1,800,000 | ||||
Operating lease liability | 3,783,000 | [2] | $ 3,783,000 | [2] | $ 1,900,000 | |||||
October 1, 2018 through December 31, 2021 [Member] | ||||||||||
LeaseDisclosureLineItem [Line Items] | ||||||||||
Lease description | The Company has one non-cancellable office equipment lease with a commencement date of October 1, 2018 and a term of 39 months. The lease cost for the equipment is $1.5 thousand per month from October 1, 2018 through December 31, 2021. | |||||||||
Least cost for equipment | $ 1,500 | |||||||||
November 1, 2021 [Member] | ||||||||||
LeaseDisclosureLineItem [Line Items] | ||||||||||
Right of use asset | 3,700,000 | 3,700,000 | ||||||||
Operating lease liability | 3,700,000 | $ 3,700,000 | ||||||||
Renewal term, decsription | five | |||||||||
Current Lease Agreement [Member] | ||||||||||
LeaseDisclosureLineItem [Line Items] | ||||||||||
Lease description | the Company executed a first amendment extending the terms of its current Applied Optics Center, Dallas location lease for eighty-six (86) months, commencing on November 1, 2021 and ending on December 31, 2028. The initial base rent is set at $23.6 thousand as of January 1, 2022 and escalates 2.75% each year thereafter on January 1, each year. The initial term includes 2 months of rent abatement for November and December of 2021. The amendment provides for a five-year renewal option at the end of the lease term at the greater of the then “prevailing rental rate” or the then current base rent rate. | |||||||||
Monthly base rent | $ 23,600 | |||||||||
Esclated percentage | 2.75% | |||||||||
Facility Lease Agreement [Member] | ||||||||||
LeaseDisclosureLineItem [Line Items] | ||||||||||
Rent expenses | 207,000 | 187,000 | $ 569,000 | 541,000 | ||||||
Rent expenses | $ 207,000 | $ 187,000 | $ 569,000 | $ 541,000 | ||||||
Optex Systems (OPX) - Richardson, Texas [Member] | ||||||||||
LeaseDisclosureLineItem [Line Items] | ||||||||||
Area of land | ft² | 49,100 | 49,100 | ||||||||
Right of use asset | [1] | $ 1,889,000 | $ 1,889,000 | |||||||
Operating lease liability | [2] | $ 1,945,000 | $ 1,945,000 | |||||||
Applied Optics Center (AOC) - Dallas [Member] | ||||||||||
LeaseDisclosureLineItem [Line Items] | ||||||||||
Area of land | ft² | 44,867 | 44,867 | ||||||||
Expiration date | Mar. 31, 2021 | |||||||||
Lease description | the monthly base rent was $24.6 thousand through March 31, 2021. On January 11, 2021 the Company executed a sixth amendment extending the terms of its Optex Systems, Richardson location lease for eighty-six (86) months, commencing on April 1, 2021 and ending on May 31, 2028. The initial base rent is set at $25.3 thousand and escalates 3% each year thereafter on April 1, each year. | |||||||||
Monthly base rent | $ 11,600 | |||||||||
Right of use asset | [1] | $ 1,823,000 | 1,823,000 | |||||||
Operating lease liability | [2] | $ 1,829,000 | $ 1,829,000 | |||||||
Optex Systems (OPX) - Chartwell Drive, Dallas, Texas [Member] | ||||||||||
LeaseDisclosureLineItem [Line Items] | ||||||||||
Area of land | ft² | 44,867 | 44,867 | ||||||||
Expiration date | Oct. 31, 2021 | |||||||||
Lease description | The monthly base rent is $21.9 thousand through October 31, 2021. | |||||||||
Monthly base rent | $ 7,800 | |||||||||
[1] | Includes $62 | |||||||||
[2] | Short-term and Long-term portion of Operating Lease Liability is $529 $3,254 |
Schedule of Non-cancellable Ope
Schedule of Non-cancellable Operating Leases Minimum Payments (Details) - USD ($) $ in Thousands | Jun. 27, 2021 | Sep. 27, 2020 | Sep. 27, 2019 | ||
Loss Contingencies [Line Items] | |||||
2021 Base year lease | $ 147 | ||||
2022 Base year lease | 547 | ||||
2023 Base year lease | 605 | ||||
2024 Base year lease | 623 | ||||
2025 Base year lease | 641 | ||||
2026 Base year lease | 659 | ||||
2027 Base year lease | 679 | ||||
2028 Base year lease | 571 | ||||
2029 Base year lease | 83 | ||||
Total base lease payments | 4,555 | ||||
Imputed interest on lease payments | [1] | (772) | |||
Total Operating Lease Liability | 3,783 | [2] | $ 1,900 | ||
Right-of-use Asset | 3,721 | [3] | $ 1,416 | $ 1,800 | |
Common Area Maintenance Estimate [Member] | |||||
Loss Contingencies [Line Items] | |||||
2021 Base year lease | 58 | ||||
2022 Base year lease | 237 | ||||
2023 Base year lease | 242 | ||||
2024 Base year lease | 247 | ||||
2025 Base year lease | 252 | ||||
2026 Base year lease | 257 | ||||
2027 Base year lease | 262 | ||||
2028 Base year lease | 188 | ||||
2029 Base year lease | 27 | ||||
Office Equipment [Member] | |||||
Loss Contingencies [Line Items] | |||||
2021 Base year lease | 5 | ||||
2022 Base year lease | 5 | ||||
Total base lease payments | 10 | ||||
Imputed interest on lease payments | [1] | (1) | |||
Total Operating Lease Liability | [2] | 9 | |||
Right-of-use Asset | [3] | 9 | |||
Optex Systems (OPX) - Richardson, Texas [Member] | |||||
Loss Contingencies [Line Items] | |||||
2021 Base year lease | 76 | ||||
2022 Base year lease | 308 | ||||
2023 Base year lease | 317 | ||||
2024 Base year lease | 327 | ||||
2025 Base year lease | 336 | ||||
2026 Base year lease | 346 | ||||
2027 Base year lease | 357 | ||||
2028 Base year lease | 241 | ||||
2029 Base year lease | |||||
Total base lease payments | 2,308 | ||||
Imputed interest on lease payments | [1] | (363) | |||
Total Operating Lease Liability | [2] | 1,945 | |||
Right-of-use Asset | [3] | 1,889 | |||
Applied Optics Center (AOC) - Dallas [Member] | |||||
Loss Contingencies [Line Items] | |||||
2021 Base year lease | 66 | ||||
2022 Base year lease | 234 | ||||
2023 Base year lease | 288 | ||||
2024 Base year lease | 296 | ||||
2025 Base year lease | 305 | ||||
2026 Base year lease | 313 | ||||
2027 Base year lease | 322 | ||||
2028 Base year lease | 330 | ||||
2029 Base year lease | 83 | ||||
Total base lease payments | 2,237 | ||||
Imputed interest on lease payments | [1] | (408) | |||
Total Operating Lease Liability | [2] | 1,829 | |||
Right-of-use Asset | [3] | $ 1,823 | |||
[1] | Assumes a discount borrowing rate of 5.0% October 31, 2021 | ||||
[2] | Short-term and Long-term portion of Operating Lease Liability is $529 $3,254 | ||||
[3] | Includes $62 |
Schedule of Non-cancellable O_2
Schedule of Non-cancellable Operating Leases Minimum Payments (Details) (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 27, 2021 | Sep. 27, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Lease options exercised description | Assumes a discount borrowing rate of 5.0% on the new lease amendments effective as of January 11, 2021 and 7.5% on the remaining lease term for the Applied Optics Dallas facility through October 31, 2021. | |
Borrowing discount rate | 5.00% | |
Lease term expiring | Oct. 31, 2021 | |
Short-term operating lease | $ 529 | $ 417 |
Long-term operating lease | 3,254 | $ 1,037 |
Rent | $ 62 |
Debt Financing (Details Narrati
Debt Financing (Details Narrative) - Revolving Credit Facility [Member] - USD ($) $ in Thousands | Apr. 16, 2020 | Jun. 27, 2021 | Sep. 27, 2020 |
Line of Credit Facility [Line Items] | |||
Outstanding principal balance | $ 377 | $ 377 | |
Common Area Maintenance Estimate [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit principle amount | $ 2,250 | ||
Maturity date | Apr. 15, 2022 | ||
Line of credit interest percentage | (3.00%) | ||
Line of credit interest percentage | 3.00% | ||
Description of term period | There are commercially standard covenants including, but not limited to, covenants regarding maintenance of corporate existence, not incurring other indebtedness except trade debt, not changing more than 25% stock ownership of Borrower, and a Fixed Charge Coverage Ratio of 1.25:1, with the Fixed Charge Coverage Ratio defined as (earnings before taxes, depreciation, amortization and rent expense less cash taxes, distribution, dividends and fair value of warrants) divided by (current maturities on long term debt plus interest expense plus rent expense). As of June 27, 2021, the Company was in compliance with the covenants. | ||
Litigation Fee | $ 10,000 | ||
Common Area Maintenance Estimate [Member] | Prime Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit interest percentage | (0.25%) | ||
Line of credit interest percentage | 0.25% |
Schedule of Fair Value Warrant
Schedule of Fair Value Warrant Liabilities (Details) - Warrant [Member] | Jun. 27, 2021$ / shares | Sep. 27, 2020$ / shares | Jun. 28, 2020$ / shares | Sep. 29, 2019$ / shares | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Exercise Price | [1] | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 |
Warrant Expiration Date | [1] | Aug. 26, 2021 | Aug. 26, 2021 | Aug. 26, 2021 | Aug. 26, 2021 |
Stock Price | [2] | $ 1.53 | $ 1.96 | $ 1.90 | $ 1.56 |
Time to Maturity (Years) | 2 months 12 days | 10 months 25 days | 1 year 2 months 12 days | 1 year 10 months 25 days | |
Calculated fair value per share | $ 0.13 | $ 0.62 | $ 0.62 | $ 0.49 | |
Measurement Input, Risk Free Interest Rate [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Fair value measurement input | [3] | 0.0006 | 0.0012 | 0.0017 | 0.0163 |
Measurement Input, Price Volatility [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Fair value measurement input | 0.4435 | 0.5167 | 0.5282 | 0.5366 | |
[1] | Based on the terms provided in the warrant agreement to purchase common stock of Optex Systems Holdings, Inc. dated August 26, 2016. | ||||
[2] | Based on the trading value of common stock of Optex Systems Holdings, Inc. as of each presented period ended date. | ||||
[3] | Interest rate for U.S. Treasury Bonds as each presented period ended date, as published by the U.S. Federal Reserve. |
Summary of Warrants Outstanding
Summary of Warrants Outstanding and Fair Values (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jun. 27, 2021 | Jun. 28, 2020 | Jun. 27, 2021 | Jun. 28, 2020 | Sep. 27, 2020 | Sep. 29, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
(Gain) Loss on Change in Fair Value of Warrant Liability | $ (1,167) | $ 585 | $ (2,025) | $ 504 | ||
Warrant [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Warrant liability, fair value outstanding beginning | 4,125,200 | 4,125,200 | ||||
Fair Value per Share, beginning | $ 0.62 | $ 0.49 | ||||
Fair value of warrant liability, ending | $ 519 | $ 2,540 | $ 519 | $ 2,540 | $ 2,544 | $ 2,036 |
(Gain) Loss on Change in Fair Value of Warrant Liability | $ (2,025) | $ 504 | ||||
Warrant liability, fair value outstanding ending | 4,125,200 | 4,125,200 | 4,125,200 | 4,125,200 | ||
Fair Value per Share, ending | $ 0.13 | $ 0.62 | $ 0.13 | $ 0.62 | ||
Warrant liability, fair value outstanding ending | 4,125,200 | 4,125,200 | 4,125,200 | 4,125,200 | 4,125,200 | 4,125,200 |
Fair Value per Share, ending | $ 0.13 | $ 0.62 | $ 0.13 | $ 0.62 | $ 0.62 | $ 0.49 |
Warrant Liabilities (Details Na
Warrant Liabilities (Details Narrative) - Intersegment revenues [Member] - Underwriter [Member] | Aug. 26, 2016$ / sharesshares |
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |
Warrants issued | shares | 4,323,135 |
Exercise price of warrants | $ / shares | $ 1.50 |
Termination date | Aug. 26, 2021 |
Schedule of Aggregate Non-veste
Schedule of Aggregate Non-vested Restricted Stock Units Granted (Details) - 2016 Restricted Stock Unit Plan [Member] - $ / shares | 9 Months Ended | 12 Months Ended | |
Jun. 27, 2021 | Sep. 27, 2020 | Sep. 30, 2019 | |
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted Stock Unit Shares, Ending balance | 182,000 | 216,500 | |
Weighted Average Grant Date Fair Value, Ending balance | $ 1.54 | $ 1.29 | |
Weighted Average Grant Date Fair Value, Beginning balance | $ 1.59 | $ 1.54 | |
Restricted Stock Unit Shares, Granted | 50,000 | ||
Weighted Average Grant Date Fair Value, Granted | $ 2.13 | ||
Restricted Stock Unit Shares, Vested | (83,000) | (84,500) | |
Weighted Average Grant Date Fair Value, Vested | $ 1.49 | $ 1.25 | |
Restricted Stock Unit Shares, Vested | 83,000 | 84,500 | |
Restricted Stock Unit Shares, Forfeited | |||
Weighted Average Grant Date Fair Value, Forfeited | |||
Restricted Stock Unit Shares, Ending balance | 99,000 | 182,000 | |
Weighted Average Grant Date Fair Value, Ending balance | $ 1.59 | $ 1.54 | |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted Stock Unit Shares, Ending balance | 300,000 | ||
Weighted Average Grant Date Fair Value, Ending balance | $ 1.75 | ||
Weighted Average Grant Date Fair Value, Beginning balance | $ 1.75 | $ 1.75 | |
Restricted Stock Unit Shares, Granted | 300,000 | ||
Weighted Average Grant Date Fair Value, Granted | $ 1.75 | ||
Restricted Stock Unit Shares, Vested | (60,000) | ||
Weighted Average Grant Date Fair Value, Vested | $ 1.75 | ||
Restricted Stock Unit Shares, Vested | 60,000 | ||
Restricted Stock Unit Shares, Forfeited | |||
Weighted Average Grant Date Fair Value, Forfeited | |||
Restricted Stock Unit Shares, Ending balance | 240,000 | 300,000 | |
Weighted Average Grant Date Fair Value, Ending balance | $ 1.75 | $ 1.75 |
Schedule of Unrecognized Compen
Schedule of Unrecognized Compensation Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 27, 2021 | Jun. 28, 2020 | Jun. 27, 2021 | Jun. 28, 2020 | Sep. 27, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Recognized Compensation Expense | $ 57,000 | $ 63,000 | $ 171,000 | $ 120,000 | |
Unrecognized Compensation Expense | 464,000 | 464,000 | $ 634,000 | ||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Recognized Compensation Expense | 26,000 | 31,000 | 79,000 | 31,000 | |
Unrecognized Compensation Expense | 368,000 | 368,000 | 446 | ||
Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Recognized Compensation Expense | 31,000 | $ 32,000 | 92,000 | $ 89,000 | |
Unrecognized Compensation Expense | $ 96,000 | $ 96,000 | $ 188,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) | Jan. 02, 2021 | Apr. 30, 2020 | Feb. 17, 2020 | Jan. 07, 2020 | Jan. 02, 2020 | Jun. 28, 2021 |
One Directors and Two Officers [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares issued during the period, shares | 59,447 | |||||
Vested restricted stock units issued net of tax withholding | $ 54,000 | |||||
Vested restricted stock units issued net of tax withholding, shares | 84,500 | |||||
Directors and Officers [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares issued during the period, shares | 58,392 | |||||
Vested restricted stock units issued net of tax withholding | $ 44,000 | |||||
Vested restricted stock units issued net of tax withholding, shares | 83,000 | |||||
Three Independent Directors [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of non-vested shares granted | 100,000 | |||||
Vesting period of shares | 5 years | 5 years | ||||
Vesting percentage | 20.00% | |||||
Stock issued during period shares share based compensation | 300,000 | |||||
Stock issued during period value share based compensation | $ 525,000 | |||||
Shares issued price per share | $ 1.75 | |||||
Three Independent Directors [Member] | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Board fees | $ 22,000 | |||||
Three Independent Directors [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Board fees | $ 36,000 | |||||
Director [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vested restricted stock units issued net of tax withholding, shares | 60,000 | |||||
Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options, shares granted | 0 | |||||
2009 Stock Option Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of share authorized | 75,000 | |||||
2016 Restricted Stock Unit Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period of shares | 3 years | |||||
Amortization of grant date fair market value | $ 107,000 | |||||
2016 Restricted Stock Unit Plan [Member] | Loss On Contract | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of non-vested shares granted | 50,000 | |||||
Vesting period of shares | 3 years | |||||
Vesting percentage, next twelve months | 34.00% | |||||
Vesting percentage, thereafter | 33.00% | |||||
Stock price at grant date | $ 2.13 |
Summary of Purchases Under Plan
Summary of Purchases Under Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
Apr. 19, 2021 | Apr. 19, 2021 | Mar. 28, 2021 | Mar. 27, 2021 | Feb. 21, 2021 | Jan. 24, 2021 | Dec. 27, 2020 | Nov. 22, 2020 | Oct. 25, 2020 | Sep. 27, 2020 | Aug. 23, 2020 | Jul. 26, 2020 | Jun. 28, 2020 | Jan. 24, 2021 | Jun. 27, 2021 | Sep. 27, 2020 | Jun. 28, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Total number of shares purchased | 38,599 | 73,800 | 52,180 | 40,362 | 58,399 | 129,245 | 20,948 | 53,996 | 10,688 | 6,806 | 34,243 | ||||||
Total purchase cost | $ 70 | $ 140 | $ 101 | $ 73 | $ 109 | $ 265 | $ 42 | $ 103 | $ 21 | $ 13 | $ 63 | ||||||
Average price paid per share | $ 1.90 | $ 1.94 | $ 1.80 | $ 1.86 | $ 2.05 | $ 2.01 | $ 1.90 | $ 1.96 | $ 1.89 | $ 1.84 | $ 1.80 | $ 1.90 | $ 1.82 | ||||
Maximum dollar value that may yet be purchased under the plan | $ 70 | $ 211 | $ 384 | $ 493 | $ 758 | $ 800 | $ 903 | $ 924 | $ 937 | $ 312 | |||||||
Shares Repurchased [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Total number of shares purchased | 519,266 | 105,733 | |||||||||||||||
Total purchase cost | $ 1,000 | $ 200 | |||||||||||||||
Average price paid per share | $ 1.89 | $ 1.93 | $ 1.89 | ||||||||||||||
Maximum dollar value that may yet be purchased under the plan | $ 800 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||||
Jun. 27, 2021 | Jun. 28, 2020 | Jun. 28, 2021 | Jun. 27, 2021 | Jun. 28, 2020 | Sep. 27, 2020 | Jun. 08, 2020 | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Stock repurchase program, authorized amount | $ 1,000 | |||||||||||
Common Stock Repurchase | [1] | $ 70 | $ 64 | $ 800 | $ 64 | |||||||
Common stock, shares outstanding | 8,334,995 | 8,334,995 | 8,690,136 | |||||||||
Common stock, shares issued | 8,334,995 | 8,334,995 | 8,795,869 | |||||||||
Stock Repurchase Plan [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Stock repurchased during the period | 519,266 | |||||||||||
Treasury Stock [Member] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Stock repurchased during the period | [1] | 38,599 | 34,243 | 413,533 | 34,243 | |||||||
Common Stock Repurchase | $ 70 | [1] | $ 64 | [1] | $ 800 | $ 800 | [1] | $ 64 | [1] | |||
[1] | Common shares repurchased in the open market through June 27, 2021. Shares were held in treasury stock using the cost method and cancelled in June 2021. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Investor [Member] | Aug. 10, 2021USD ($)$ / sharesshares |
Subsequent Event [Line Items] | |
Number of stock isssued on exercise of warrants | shares | 148,300 |
Warrant exercise price | $ / shares | $ 1.50 |
Value of stock isssued on exercise of warrants | $ | $ 222,450 |