Cover
Cover - shares | 9 Months Ended | |
Jul. 03, 2022 | Aug. 12, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q/A | |
Amendment Flag | true | |
Amendment Description | This Amendment No. 1 to the Quarterly Report on Form 10-Q of Optex Systems Holdings, Inc. for the quarterly period ended July 3, 2022 (the “Original 10-Q”) is identical to the Original 10-Q except for the correction of a reference to net income, which should have been to Adjusted EBITDA (a non-GAAP financial measure), in the seventh paragraph of the Liquidity and Capital Resources section of “Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jul. 03, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --10-02 | |
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 | 8,320,865 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 03, 2022 | Oct. 03, 2021 | |
ASSETS | |||
Cash and Cash Equivalents | $ 5,169 | $ 3,900 | |
Accounts Receivable, Net | 1,918 | 3,183 | |
Inventory, Net | 8,559 | 7,583 | |
Prepaid Expenses | 324 | 262 | |
Current Assets | 15,970 | 14,928 | |
Property and Equipment, Net | 1,033 | 1,017 | |
Other Assets | |||
Deferred Tax Asset | 948 | 1,288 | |
Right-of-use Asset | 3,339 | [1] | 3,599 |
Security Deposits | 23 | 23 | |
Other Assets | 4,310 | 4,910 | |
Total Assets | 21,313 | 20,855 | |
Current Liabilities | |||
Accounts Payable | 838 | 551 | |
Operating Lease Liability | 599 | 528 | |
Accrued Expenses | 787 | 851 | |
Accrued Warranty Costs | 196 | 78 | |
Customer Deposits | 256 | ||
Current Liabilities | 2,676 | 2,008 | |
Operating Lease Liability, net of current portion | 2,875 | 3,133 | |
Total Liabilities | 5,551 | 5,141 | |
Commitments and Contingencies | |||
Stockholders’ Equity | |||
Common Stock – ($0.001 par, 2,000,000,000 authorized, 8,322,951 and 8,523,704 shares issued, and 8,322,951 and 8,488,149 outstanding, respectively) | 8 | 9 | |
Treasury Stock (at cost, zero and 35,555 shares held, respectively) | (69) | ||
Additional Paid in Capital | 25,426 | 25,752 | |
Accumulated Deficit | (9,672) | (9,978) | |
Stockholders’ Equity | 15,762 | 15,714 | |
Total Liabilities and Stockholders’ Equity | $ 21,313 | $ 20,855 | |
[1]Short-term and Long-term portion of Operating Lease Liability is $ 599 2,875 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 03, 2022 | Oct. 03, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 8,322,951 | 8,523,704 |
Common stock, shares outstanding | 8,322,951 | 8,488,149 |
Treasury stock, shares | 0 | 35,555 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2022 | Jun. 27, 2021 | Jul. 03, 2022 | Jun. 27, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 6,170 | $ 4,433 | $ 15,645 | $ 13,149 |
Cost of Sales | 4,902 | 3,687 | 12,838 | 11,190 |
Gross Margin | 1,268 | 746 | 2,807 | 1,959 |
General and Administrative Expense | 758 | 689 | 2,473 | 2,238 |
Operating Income (Loss) | 510 | 57 | 334 | (279) |
Gain on Change in Fair Value of Warrants | 1,167 | 2,025 | ||
Interest Expense | (4) | (9) | ||
Other Income | 1,163 | 2,016 | ||
Income Before Taxes | 510 | 1,220 | 334 | 1,737 |
Income Tax (Benefit) Expense, net | 82 | (154) | 28 | (122) |
Net Income | 428 | 1,374 | 306 | 1,859 |
Deemed dividends on participating securities | (464) | (622) | ||
Net income applicable to common shareholders | $ 428 | $ 910 | $ 306 | $ 1,237 |
Basic income per share | $ 0.05 | $ 0.11 | $ 0.04 | $ 0.15 |
Weighted Average Common Shares Outstanding - basic | 8,187,318 | 8,101,223 | 8,223,492 | 8,204,994 |
Diluted income per share | $ 0.05 | $ 0.11 | $ 0.04 | $ 0.15 |
Weighted Average Common Shares Outstanding – diluted | 8,285,996 | 8,138,106 | 8,297,341 | 8,292,544 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 03, 2022 | Jun. 27, 2021 | |
Cash Flows from Operating Activities: | ||
Net Income | $ 306 | $ 1,859 |
Adjustments to Reconcile Net Income to Net Cash provided by Operating Activities: | ||
Depreciation and Amortization | 221 | 195 |
Gain on Change in Fair Value of Warrants | (2,025) | |
Stock Compensation Expense | 127 | 171 |
Deferred Tax | 340 | (81) |
Accounts Receivable | 1,264 | 1,570 |
Inventory | (976) | 146 |
Prepaid Expenses | (62) | (95) |
Leases | 73 | 23 |
Accounts Payable and Accrued Expenses | 223 | (631) |
Accrued Warranty Costs | 118 | (15) |
Customer Advance Deposits | 256 | (1) |
Total Adjustments | 1,584 | (743) |
Net Cash provided by Operating Activities | 1,890 | 1,116 |
Cash Flows used in Investing Activities | ||
Purchases of Property and Equipment | (236) | (214) |
Net Cash used in Investing Activities | (236) | (214) |
Cash Flows used in Financing Activities | ||
Cash Paid for Taxes Withheld on Net Settled Restricted Stock Unit Shares Issued | (19) | (44) |
Stock Repurchase | (366) | (800) |
Net Cash used in Financing Activities | (385) | (844) |
Net Increase in Cash and Cash Equivalents | 1,269 | 58 |
Cash and Cash Equivalents at Beginning of Period | 3,900 | 4,700 |
Cash and Cash Equivalents at End of Period | 5,169 | 4,758 |
Non Cash Transactions: | ||
Right-of-Use Asset | 51 | 3,688 |
Operating Lease Liabilities | (51) | (3,688) |
Treasury Stock Retired | 435 | 1,000 |
Cash Transactions: | ||
Cash Paid for Taxes | 48 | |
Cash Paid for Interest | $ 9 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements 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. 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 | [2] | $ (1) | $ 1,000 | (1,000) | (1) | |
Cancellation of Treasury Shares, Shares | [2] | (519,266) | (519,266) | |||
Net Income | 1,859 | 1,859 | ||||
Vested Restricted Stock Units Issued Net of Tax Withholding | (44) | (44) | ||||
Vested Restricted Stock Units Issued Net of Tax Withholding, shares | 58,392 | |||||
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 | [2] | $ (1) | $ (1,000) | (1,000) | (1) | |
Cancellation of Treasury Shares, Shares | [2] | (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 | |||||
Beginning balance, value at Oct. 03, 2021 | $ 9 | $ (69) | 25,752 | (9,978) | 15,714 | |
Beginning balance, shares at Oct. 03, 2021 | 8,523,704 | 35,555 | ||||
Stock Compensation Expense | 127 | 127 | ||||
Common Stock Repurchase | [1] | $ (366) | (366) | |||
Common Stock Repurchase, Shares | [1] | 188,414 | ||||
Cancellation of Treasury Shares | [2] | $ (1) | $ 435 | (434) | ||
Cancellation of Treasury Shares, Shares | [2] | (223,969) | (223,969) | |||
Net Income | 306 | 306 | ||||
Vested Restricted Stock Units Issued Net of Tax Withholding | (19) | (19) | ||||
Vested Restricted Stock Units Issued Net of Tax Withholding, shares | 23,216 | |||||
Ending balance, value at Jul. 03, 2022 | $ 8 | 25,426 | (9,672) | 15,762 | ||
Ending balance, shares at Jul. 03, 2022 | 8,322,951 | |||||
Beginning balance, value at Apr. 03, 2022 | $ 8 | 25,534 | (10,100) | 15,442 | ||
Beginning balance, shares at Apr. 03, 2022 | 8,395,394 | |||||
Stock Compensation Expense | 36 | 36 | ||||
Common Stock Repurchase | [1] | $ (144) | (144) | |||
Common Stock Repurchase, Shares | [1] | 72,443 | ||||
Cancellation of Treasury Shares | [2] | $ 144 | (144) | |||
Cancellation of Treasury Shares, Shares | [2] | (72,443) | (72,443) | |||
Net Income | 428 | 428 | ||||
Ending balance, value at Jul. 03, 2022 | $ 8 | $ 25,426 | $ (9,672) | $ 15,762 | ||
Ending balance, shares at Jul. 03, 2022 | 8,322,951 | |||||
[1]Common shares repurchased in the open market during the respective period. Shares are repurchased to treasury stock using the cost method.[2]Treasury stock canceled during the respective period. |
Organization and Operations
Organization and Operations | 9 Months Ended |
Jul. 03, 2022 | |
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 for the nine months ended July 3, 2022 were derived from the U.S. government ( 13% 25% 15% 8% 21% 18% 94% 6% 93,967 83 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; impacts on our supply chain; actions by governments, businesses and individuals taken in response to the pandemic; the length of time of the pandemic and the possibility of its reoccurrence; the success of global vaccination efforts; the eventual impact of the pandemic and actions taken in response to the pandemic on global and regional economies; and the pace of recovery as the pandemic subsides. Beginning in April 2020 through October 3, 2021, we experienced a significant reduction in new orders and ending customer backlog in our Optex Richardson segment, resulting in an overall decrease in backlog of 40% between September 29, 2019 and October 3, 2021 While the Applied Optics Center segment experienced a significant decline in orders during the second half of fiscal year 2020, the segment saw a sizable increase in new orders during the fiscal year ended October 3, 2021 as a result of increased military spending in Army infantry optical equipment, a larger customer base and higher customer demand for commercial optical assemblies. As of October 3, 2021, the Applied Optics Center segment backlog had increased by 153% as compared to the level on September 29, 2019 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Jul. 03, 2022 | |
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 October 3, 2021 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. Inventory Schedule of Inventory July 3, 2022 October 3, 2021 (Thousands) July 3, 2022 October 3, 2021 Raw Material $ 5,172 $ 4,926 Work in Process 3,505 2,664 Finished Goods 536 629 Gross Inventory $ 9,213 $ 8,219 Less: Inventory Reserves (654 ) (636 ) Net Inventory $ 8,559 $ 7,583 Concentration of Credit Risk 11% 18% 16% 15% 9% 6% 17% 8% Accrued Warranties 196 78 Schedule of Warranty Reserves Three months ended Nine months ended July 3, 2022 June 27, 2021 July 3, 2022 June 27, 2021 Beginning balance $ 155 $ 63 $ 78 $ 83 Incurred costs for warranties satisfied during the period (1 ) (4 ) (3 ) (71 ) Warranty Expenses: Warranties reserved for new product shipped during the period (1) 52 9 131 18 Change in estimate for pre-existing warranty liabilities (2) (10 ) - (10 ) 38 Warranty Expense 42 9 122 56 Ending balance $ 196 $ 68 $ 196 $ 68 (1) Warranty expenses accrued to cost of sales (based on current period shipments and historical warranty return rate.) (2) Changes in estimated warranty liabilities recognized in cost of sales associated with: the period end customer returned warranty backlog, or the actual costs of repaired/replaced warranty units which were shipped to the customer during the current 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 120 352 120 359 During the three- and nine-month periods ended July 3, 2022, there were no zero 1 256 Income Tax/Deferred Tax ($0.8) 1.7 0.9 ($0.8) 2.1 1.3 0.3 Earnings per Share A significant number of our warrants outstanding through August 26, 2021 were participating securities, which shared dividend distributions and the allocation of any undistributed earnings (deemed dividends) with our common shareholders. Since the warrants expired in accordance with their terms on August 26, 2021, during the three and nine months ended July 3, 2022, there were no declared dividends and no allocated undistributed earnings attributable to the participating warrants, respectively. During the three and nine months ended June 27, 2021, there were no 464 622 The Company has potentially dilutive securities outstanding, which include unvested restricted stock units, stock options and, for the three and nine months ended June 27, 2021, 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 ended July 3, 2022, 66,000 180,000 98,678 99,000 240,000 36,883 For the nine months ended July 3, 2022, 66,000 180,000 73,849 99,000 240,000 87,550 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Jul. 03, 2022 | |
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 87% 13% 42% 13% 18% 8% 3% Optex Systems is located in Richardson Texas, with leased premises consisting of approximately 49,100 45 Applied Optics Center (AOC) – Dallas, Texas The Applied Optics Center serves primarily domestic U.S. customers. Sales to commercial customers represent approximately 21% 79% 93% 7% 58% 15% 7% 21% 15% The Applied Optics Center is located in Dallas, Texas with leased premises consisting of approximately 44,867 38 The financial tables below present information on the reportable segments’ profit or loss for each period, as well as segment assets as of each period end. The Company does not allocate interest expense, income taxes or unusual items to segments. Schedule of Segment Reporting Information Reportable Segment Financial Information (thousands) As of and for the three months ended July 3, 2022 Optex Systems Richardson Applied Optics Center Dallas Other (non-allocated costs and intersegment eliminations) Consolidated Total Revenues from external customers $ 2,653 $ 3,517 $ - $ 6,170 Intersegment revenues - 258 (258 ) - Total revenue $ 2,653 $ 3,775 $ (258 ) $ 6,170 Interest expense $ - $ - $ - $ - Depreciation and amortization $ 8 $ 66 $ - $ 74 Income (loss) before taxes $ 185 $ 361 $ (36 ) $ 510 Other significant noncash items: Allocated home office expense $ (268 ) $ 268 $ - $ - Stock compensation expense $ - $ - $ 36 $ 36 Warranty expense $ - $ 42 $ - $ 42 Segment assets $ 14,676 $ 6,637 $ - $ 21,313 Expenditures for segment assets $ 49 $ 69 $ - $ 118 Reportable Segment Financial Information (thousands) As of and for the three months ended June 27, 2021 Optex Systems Richardson Applied Optics Center Dallas Other (non-allocated costs and intersegment eliminations) Consolidated Total 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 (thousands) As of and for the nine months ended July 3, 2022 Optex Systems Richardson Applied Optics Center Dallas Other (non-allocated costs and intersegment eliminations) Consolidated Total Revenues from external customers $ 6,588 $ 9,057 $ - $ 15,645 Intersegment revenues - 693 (693 ) - Total revenue $ 6,588 $ 9,750 $ (693 ) $ 15,645 Interest expense $ - $ - $ - $ - Depreciation and amortization $ 28 $ 193 $ - $ 221 Income (loss) before taxes $ (276 ) $ 737 $ (127 ) $ 334 Other significant noncash items: Allocated home office expense $ (802 ) $ 802 $ - $ - Stock compensation expense $ - $ - $ 127 $ 127 Warranty expense $ - $ 122 $ - $ 122 Segment assets $ 14,676 $ 6,637 $ - $ 21,313 Expenditures for segment assets $ 55 $ 181 $ - $ 236 Reportable Segment Financial Information (thousands) As of and for the nine months ended June 27, 2021 Optex Systems Richardson Applied Optics Center Dallas Other (non-allocated costs and intersegment eliminations) Consolidated Total 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 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jul. 03, 2022 | |
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 location and the Applied Optics Center Dallas address location. The Company also leases certain office equipment under non-cancellable operating leases. The leased facility under Optex Systems Inc. located at 1420 Presidential Drive, Richardson, Texas consists of 49,100 square feet of space at the premises. The previous lease term for this location expired March 31, 2021 and 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 the 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% on April 1 each year thereafter The leased facility under the Applied Optics Center located at 9839 and 9827 Chartwell Drive, Dallas, Texas, consists of 44,867 October 31, 2021 the monthly base rent was $21.9 thousand through the end of the lease. On January 11, 2021 the Company executed a first amendment extending the terms of the 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% on January 1 each year thereafter. 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 rental rate. Our obligations to make payments under the lease are secured by a $125,000 standby letter of credit 7.9 Execution of the new lease amendments for the Dallas and Richardson facilities on January 11, 2021 resulted in the balance sheet recognition of a right-of-use asset of $ 3.7 3.7 The Company had one non-cancellable office equipment lease with a commencement date of October 1, 2018 and a term of 39 51 As of July 3, 2022, the remaining minimum lease and estimated CAM payments under the non-cancelable facility space leases are as follows: Schedule of Non-cancellable Operating Leases Minimum Payments (Thousands) Optex Richardson Applied Optics Center Office Equipment Consolidated Fiscal Year Facility Lease Payments Facility Lease Payments Lease Payments Total Lease Payments Total Variable CAM Estimate 2022 Base year lease $ 78 $ 71 $ 4 $ 153 $ 58 2023 Base year lease 317 288 15 620 235 2024 Base year lease 327 296 15 638 240 2025 Base year lease 336 305 15 656 245 2026 Base year lease 346 313 3 662 249 2027 Base year lease 357 322 - 679 254 2028 Base year lease 242 330 - 572 184 2029 Base year lease - 83 - 83 27 Total base lease payments $ 2,003 $ 2,008 $ 52 $ 4,063 $ 1,492 Imputed interest on lease payments (1) (279 ) (305 ) (5 ) (589 ) Total Operating Lease Liability (2) $ 1,724 $ 1,703 $ 47 $ 3,474 Right-of-use Asset (3) $ 1,647 $ 1,645 $ 47 $ 3,339 (1) Assumes a discount borrowing rate of 5.0% January 11, 2021 (2) Includes $ 135 (3) Short-term and Long-term portion of Operating Lease Liability is $ 599 2,875 Total expense under both facility lease agreements for the three months ended July 3, 2022 and June 27, 2021 was $ 215 207 7 6 Total expense under both facility lease agreements for the nine months ended July 3, 2022 and June 27, 2021 was $ 635 569 19 17 |
Debt Financing
Debt Financing | 9 Months Ended |
Jul. 03, 2022 | |
Debt Disclosure [Abstract] | |
Debt Financing | Note 5 - Debt Financing Credit Facility — PNC Bank (formerly BBVA, USA) On April 12, 2022, the Company and its subsidiary, Optex Systems, Inc. (“Optex”, and with the Company, the “Borrowers”), entered into an Amended and Restated Loan Agreement (the “Loan Agreement”) with PNC Bank, National Association, successor to BBVA USA (the “Lender”), pursuant to which the Borrowers’ existing revolving line of credit facility was decreased from $ 2.25 1.125 the maturity date was extended from April 15, 2022 to April 15, 2023 0.25 The Loan Agreement contains customary events of default and negative covenants, including but not limited to those governing indebtedness, liens, fundamental changes, investments, and restricted payments. The Loan Agreement also requires the Borrowers to maintain a fixed charge coverage ratio of at least 1.25:1. The credit facility is secured by substantially all of the operating assets of the Borrowers as collateral. The Borrowers’ obligations under the credit facility are subject to acceleration upon the occurrence of an event of default as defined in the Loan Agreement The outstanding balance on the Facility was zero zero 4 9 |
Warrant Liabilities
Warrant Liabilities | 9 Months Ended |
Jul. 03, 2022 | |
Warrant Liabilities | |
Warrant Liabilities | Note 6 - Warrant Liabilities On August 26, 2016, Optex Systems Holdings, Inc. issued 4,323,135 1.50 “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 Warrant Liabilities Assumptions Used Valuation Assumptions Period ended September 27, 2020 Period ended June 27, 2021 Exercise Price (1) $ 1.50 $ 1.50 Warrant Expiration Date (1) 8/26/2021 8/26/2021 Stock Price (2) $ 1.96 $ 1.53 Interest Rate (annual) (3) 0.12 % 0.06 % Volatility (annual) 51.67 % 44.35 % Time to Maturity (Years) 0.9 0.2 Calculated fair value per share $ 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 end 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 9/27/2020 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 Fair Value as of period ended 10/3/2021 - $ - $ - Gain on Change in Fair Value of Warrant Liability - Fair Value as of period ended 7/3/2022 - $ - $ - During the three and nine months ended July 3, 2022 and June 27, 2021, there were no The warrant liabilities were considered Level 3 liabilities on the fair value hierarchy as the determination of fair value included 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 |
Jul. 03, 2022 | |
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 zero Restricted Stock and Restricted Stock Units issued to Officers and Employees The following table summarizes the status of Optex Systems Holdings’ aggregate non-vested restricted stock and restricted stock units, with the latter granted under the Company’s 2016 Restricted Stock Unit Plan: Schedule of Aggregate Non-vested Restricted Stock and Restricted Stock Units Granted Restricted Stock Units Weighted Average Restricted Weighted Average 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 October 3, 2021 99,000 $ 1.59 240,000 $ 1.75 Granted — — — — Vested (33,000 ) 1.73 (60,000 ) 1.75 Forfeited — — — — Outstanding at July 3, 2022 66,000 $ 1.52 180,000 $ 1.75 On January 2, 2019, the Company granted 150,000 50,000 34 33 1.32 264 The Company entered into an amended and restated employment agreement with Danny Schoening dated December 1, 2021. The updated employment agreement also served to amend Mr. Schoening’s RSU Agreement, dated January 2, 2019, by changing the third and final vesting date for the restricted stock units granted under such agreement from January 1, 2022 to the “change of control date,” that being the first of the following to occur with respect to the Company: (i) any “Person,” as that term is defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with certain exclusions, is or becomes the “Beneficial Owner” (as that term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities; or (ii) the Company is merged or consolidated with any other corporation or other entity, other than: (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (B) the Company engages in a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “Person” (as defined above) acquires fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities. The amended RSU Agreement contains certain exceptions to the definition of change of control As of the December 1, 2021 modification date related to the third and final vesting date of the 49,500 5 On February 17, 2020, the Company granted 50,000 three-year 34 33 2.13 107 On January 2, 2021, the Company issued 58,392 44 83,000 On January 4, 2022, the Company issued 23,216 19 33,000 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 to $ 36,000 with an effective date of January 1, 2020, in addition to granting 100,000 restricted shares to each independent director which shall vest at a rate of 20% per year (20,000 shares) each January 1 st The total market value for the 300,000 shares is $ 525 thousand based on the stock price of $ 1.75 as of April 30, 2020. The Company amortizes the grant date fair value to stock compensation expense on a straight-line basis across the five-year vesting period beginning on April 30, 2020. On each of January 1, 2021 and January 1, 2022, 60,000 of the restricted director shares vested. 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 restricted 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 July 3, 2022 June 27, July 3, 2022 June 27, July 3, October 3, Restricted Shares $ 27 $ 26 $ 79 $ 79 $ 262 $ 341 Restricted Stock Units 9 31 48 92 18 66 Total Stock Compensation $ 36 $ 57 $ 127 $ 171 $ 280 $ 407 |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Jul. 03, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 8 - Stockholders’ Equity Dividends As of the three and nine months ended July 3, 2022 and the twelve months ended October 3, 2021, there were no Common stock On June 8, 2020 the Company announced authorization of a $ 1 105,733 519,266 On September 22, 2021 the Company announced authorization of an additional $ 1 223,969 435 During the nine months ended July 3, 2022, there were 188,414 366 Summary of Purchases Under Plan Fiscal Period Total number Total Average price Maximum dollar 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 1.80 311 January 25, 2021 through February 21, 2021 52,180 101 1.94 210 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 - September 23, 2021 through October 1, 2021 35,555 $ 69 $ 1.93 $ 931 Total shares repurchased for year ended October 3, 2021 449,088 $ 869 $ 1.93 $ - October 4, 2021 through October 31, 2021 18,265 $ 37 $ 2.01 $ 894 November 1, 2021 through November 28, 2021 4,415 9 2.04 885 November 29, 2021 through January 2, 2022 14,558 28 1.93 857 January 3, 2022 through January 30, 2022 15,585 29 1.89 828 January 31, 2022 through February 27, 2022 27,618 49 1.75 779 February 28, 2022 through April 3, 2022 35,530 70 1.98 709 April 4, 2022 through May 1, 2022 12,304 27 2.22 682 May 2, 2022 through May 29, 2022 10,482 22 2.11 660 May 30, 2022 through July 3, 2022 49,657 95 1.90 565 Total shares repurchased for nine months ended July 3, 2022 188,414 $ 366 $ 1.94 $ 565 As of October 3, 2021, and July 3, 2022, the total outstanding common shares were 8,488,149 8,322,951 35,555 zero As of October 3, 2021, and July 3, 2022, the total issued common shares were 8,523,704 8,322,951 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jul. 03, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9 - Subsequent Events None. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Jul. 03, 2022 | |
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 October 3, 2021 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. |
Inventory | Inventory Schedule of Inventory July 3, 2022 October 3, 2021 (Thousands) July 3, 2022 October 3, 2021 Raw Material $ 5,172 $ 4,926 Work in Process 3,505 2,664 Finished Goods 536 629 Gross Inventory $ 9,213 $ 8,219 Less: Inventory Reserves (654 ) (636 ) Net Inventory $ 8,559 $ 7,583 |
Concentration of Credit Risk | Concentration of Credit Risk 11% 18% 16% 15% 9% 6% 17% 8% |
Accrued Warranties | Accrued Warranties 196 78 Schedule of Warranty Reserves Three months ended Nine months ended July 3, 2022 June 27, 2021 July 3, 2022 June 27, 2021 Beginning balance $ 155 $ 63 $ 78 $ 83 Incurred costs for warranties satisfied during the period (1 ) (4 ) (3 ) (71 ) Warranty Expenses: Warranties reserved for new product shipped during the period (1) 52 9 131 18 Change in estimate for pre-existing warranty liabilities (2) (10 ) - (10 ) 38 Warranty Expense 42 9 122 56 Ending balance $ 196 $ 68 $ 196 $ 68 (1) Warranty expenses accrued to cost of sales (based on current period shipments and historical warranty return rate.) (2) Changes in estimated warranty liabilities recognized in cost of sales associated with: the period end customer returned warranty backlog, or the actual costs of repaired/replaced warranty units which were shipped to the customer during the current 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 120 352 120 359 During the three- and nine-month periods ended July 3, 2022, there were no zero 1 256 |
Income Tax/Deferred Tax | Income Tax/Deferred Tax ($0.8) 1.7 0.9 ($0.8) 2.1 1.3 0.3 |
Earnings per Share | Earnings per Share A significant number of our warrants outstanding through August 26, 2021 were participating securities, which shared dividend distributions and the allocation of any undistributed earnings (deemed dividends) with our common shareholders. Since the warrants expired in accordance with their terms on August 26, 2021, during the three and nine months ended July 3, 2022, there were no declared dividends and no allocated undistributed earnings attributable to the participating warrants, respectively. During the three and nine months ended June 27, 2021, there were no 464 622 The Company has potentially dilutive securities outstanding, which include unvested restricted stock units, stock options and, for the three and nine months ended June 27, 2021, 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 ended July 3, 2022, 66,000 180,000 98,678 99,000 240,000 36,883 For the nine months ended July 3, 2022, 66,000 180,000 73,849 99,000 240,000 87,550 |
Accounting Policies (Tables)
Accounting Policies (Tables) | 9 Months Ended |
Jul. 03, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | Schedule of Inventory July 3, 2022 October 3, 2021 (Thousands) July 3, 2022 October 3, 2021 Raw Material $ 5,172 $ 4,926 Work in Process 3,505 2,664 Finished Goods 536 629 Gross Inventory $ 9,213 $ 8,219 Less: Inventory Reserves (654 ) (636 ) Net Inventory $ 8,559 $ 7,583 |
Schedule of Warranty Reserves | Schedule of Warranty Reserves Three months ended Nine months ended July 3, 2022 June 27, 2021 July 3, 2022 June 27, 2021 Beginning balance $ 155 $ 63 $ 78 $ 83 Incurred costs for warranties satisfied during the period (1 ) (4 ) (3 ) (71 ) Warranty Expenses: Warranties reserved for new product shipped during the period (1) 52 9 131 18 Change in estimate for pre-existing warranty liabilities (2) (10 ) - (10 ) 38 Warranty Expense 42 9 122 56 Ending balance $ 196 $ 68 $ 196 $ 68 (1) Warranty expenses accrued to cost of sales (based on current period shipments and historical warranty return rate.) (2) Changes in estimated warranty liabilities recognized in cost of sales associated with: the period end customer returned warranty backlog, or the actual costs of repaired/replaced warranty units which were shipped to the customer during the current period. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Jul. 03, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The financial tables below present information on the reportable segments’ profit or loss for each period, as well as segment assets as of each period end. The Company does not allocate interest expense, income taxes or unusual items to segments. Schedule of Segment Reporting Information Reportable Segment Financial Information (thousands) As of and for the three months ended July 3, 2022 Optex Systems Richardson Applied Optics Center Dallas Other (non-allocated costs and intersegment eliminations) Consolidated Total Revenues from external customers $ 2,653 $ 3,517 $ - $ 6,170 Intersegment revenues - 258 (258 ) - Total revenue $ 2,653 $ 3,775 $ (258 ) $ 6,170 Interest expense $ - $ - $ - $ - Depreciation and amortization $ 8 $ 66 $ - $ 74 Income (loss) before taxes $ 185 $ 361 $ (36 ) $ 510 Other significant noncash items: Allocated home office expense $ (268 ) $ 268 $ - $ - Stock compensation expense $ - $ - $ 36 $ 36 Warranty expense $ - $ 42 $ - $ 42 Segment assets $ 14,676 $ 6,637 $ - $ 21,313 Expenditures for segment assets $ 49 $ 69 $ - $ 118 Reportable Segment Financial Information (thousands) As of and for the three months ended June 27, 2021 Optex Systems Richardson Applied Optics Center Dallas Other (non-allocated costs and intersegment eliminations) Consolidated Total 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 (thousands) As of and for the nine months ended July 3, 2022 Optex Systems Richardson Applied Optics Center Dallas Other (non-allocated costs and intersegment eliminations) Consolidated Total Revenues from external customers $ 6,588 $ 9,057 $ - $ 15,645 Intersegment revenues - 693 (693 ) - Total revenue $ 6,588 $ 9,750 $ (693 ) $ 15,645 Interest expense $ - $ - $ - $ - Depreciation and amortization $ 28 $ 193 $ - $ 221 Income (loss) before taxes $ (276 ) $ 737 $ (127 ) $ 334 Other significant noncash items: Allocated home office expense $ (802 ) $ 802 $ - $ - Stock compensation expense $ - $ - $ 127 $ 127 Warranty expense $ - $ 122 $ - $ 122 Segment assets $ 14,676 $ 6,637 $ - $ 21,313 Expenditures for segment assets $ 55 $ 181 $ - $ 236 Reportable Segment Financial Information (thousands) As of and for the nine months ended June 27, 2021 Optex Systems Richardson Applied Optics Center Dallas Other (non-allocated costs and intersegment eliminations) Consolidated Total 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 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Jul. 03, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Non-cancellable Operating Leases Minimum Payments | As of July 3, 2022, the remaining minimum lease and estimated CAM payments under the non-cancelable facility space leases are as follows: Schedule of Non-cancellable Operating Leases Minimum Payments (Thousands) Optex Richardson Applied Optics Center Office Equipment Consolidated Fiscal Year Facility Lease Payments Facility Lease Payments Lease Payments Total Lease Payments Total Variable CAM Estimate 2022 Base year lease $ 78 $ 71 $ 4 $ 153 $ 58 2023 Base year lease 317 288 15 620 235 2024 Base year lease 327 296 15 638 240 2025 Base year lease 336 305 15 656 245 2026 Base year lease 346 313 3 662 249 2027 Base year lease 357 322 - 679 254 2028 Base year lease 242 330 - 572 184 2029 Base year lease - 83 - 83 27 Total base lease payments $ 2,003 $ 2,008 $ 52 $ 4,063 $ 1,492 Imputed interest on lease payments (1) (279 ) (305 ) (5 ) (589 ) Total Operating Lease Liability (2) $ 1,724 $ 1,703 $ 47 $ 3,474 Right-of-use Asset (3) $ 1,647 $ 1,645 $ 47 $ 3,339 (1) Assumes a discount borrowing rate of 5.0% January 11, 2021 (2) Includes $ 135 (3) Short-term and Long-term portion of Operating Lease Liability is $ 599 2,875 |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 9 Months Ended |
Jul. 03, 2022 | |
Warrant Liabilities | |
Schedule of Warrant Liabilities Assumptions Used | 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 Warrant Liabilities Assumptions Used Valuation Assumptions Period ended September 27, 2020 Period ended June 27, 2021 Exercise Price (1) $ 1.50 $ 1.50 Warrant Expiration Date (1) 8/26/2021 8/26/2021 Stock Price (2) $ 1.96 $ 1.53 Interest Rate (annual) (3) 0.12 % 0.06 % Volatility (annual) 51.67 % 44.35 % Time to Maturity (Years) 0.9 0.2 Calculated fair value per share $ 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 end 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 9/27/2020 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 Fair Value as of period ended 10/3/2021 - $ - $ - Gain on Change in Fair Value of Warrant Liability - Fair Value as of period ended 7/3/2022 - $ - $ - |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Jul. 03, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Aggregate Non-vested Restricted Stock and Restricted Stock Units Granted | The following table summarizes the status of Optex Systems Holdings’ aggregate non-vested restricted stock and restricted stock units, with the latter granted under the Company’s 2016 Restricted Stock Unit Plan: Schedule of Aggregate Non-vested Restricted Stock and Restricted Stock Units Granted Restricted Stock Units Weighted Average Restricted Weighted Average 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 October 3, 2021 99,000 $ 1.59 240,000 $ 1.75 Granted — — — — Vested (33,000 ) 1.73 (60,000 ) 1.75 Forfeited — — — — Outstanding at July 3, 2022 66,000 $ 1.52 180,000 $ 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 July 3, 2022 June 27, July 3, 2022 June 27, July 3, October 3, Restricted Shares $ 27 $ 26 $ 79 $ 79 $ 262 $ 341 Restricted Stock Units 9 31 48 92 18 66 Total Stock Compensation $ 36 $ 57 $ 127 $ 171 $ 280 $ 407 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Jul. 03, 2022 | |
Equity [Abstract] | |
Summary of Purchases Under Plan | Summary of Purchases Under Plan Fiscal Period Total number Total Average price Maximum dollar 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 1.80 311 January 25, 2021 through February 21, 2021 52,180 101 1.94 210 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 - September 23, 2021 through October 1, 2021 35,555 $ 69 $ 1.93 $ 931 Total shares repurchased for year ended October 3, 2021 449,088 $ 869 $ 1.93 $ - October 4, 2021 through October 31, 2021 18,265 $ 37 $ 2.01 $ 894 November 1, 2021 through November 28, 2021 4,415 9 2.04 885 November 29, 2021 through January 2, 2022 14,558 28 1.93 857 January 3, 2022 through January 30, 2022 15,585 29 1.89 828 January 31, 2022 through February 27, 2022 27,618 49 1.75 779 February 28, 2022 through April 3, 2022 35,530 70 1.98 709 April 4, 2022 through May 1, 2022 12,304 27 2.22 682 May 2, 2022 through May 29, 2022 10,482 22 2.11 660 May 30, 2022 through July 3, 2022 49,657 95 1.90 565 Total shares repurchased for nine months ended July 3, 2022 188,414 $ 366 $ 1.94 $ 565 |
Organization and Operations (De
Organization and Operations (Details Narrative) | 9 Months Ended |
Jul. 03, 2022 ft² Integer | |
Product Information [Line Items] | |
Area of land | ft² | 93,967 |
Number of employees | Integer | 83 |
Revenue decrease in backlog, description | Beginning in April 2020 through October 3, 2021, we experienced a significant reduction in new orders and ending customer backlog in our Optex Richardson segment, resulting in an overall decrease in backlog of 40% between September 29, 2019 and October 3, 2021 |
Applied Optics Center [Member] | |
Product Information [Line Items] | |
Revenue decrease in backlog, description | As of October 3, 2021, the Applied Optics Center segment backlog had increased by 153% as compared to the level on September 29, 2019 |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | UNITED STATES | |
Product Information [Line Items] | |
Concentration risk, percentage | 94% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Foreign Customers [Member] | |
Product Information [Line Items] | |
Concentration risk, percentage | 6% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Major Commercial Customer [Member] | |
Product Information [Line Items] | |
Concentration risk, percentage | 21% |
U.S. Government [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |
Product Information [Line Items] | |
Concentration risk, percentage | 13% |
U.S. Defense Contractor One [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |
Product Information [Line Items] | |
Concentration risk, percentage | 25% |
U.S. Defense Contractor Two [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |
Product Information [Line Items] | |
Concentration risk, percentage | 15% |
U.S. Defense Contractor Three [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |
Product Information [Line Items] | |
Concentration risk, percentage | 8% |
All Other Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |
Product Information [Line Items] | |
Concentration risk, percentage | 18% |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) $ in Thousands | Jul. 03, 2022 | Oct. 03, 2021 |
Accounting Policies [Abstract] | ||
Raw Material | $ 5,172 | $ 4,926 |
Work in Process | 3,505 | 2,664 |
Finished Goods | 536 | 629 |
Gross Inventory | 9,213 | 8,219 |
Less: Inventory Reserves | (654) | (636) |
Net Inventory | $ 8,559 | $ 7,583 |
Schedule of Warranty Reserves (
Schedule of Warranty Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 03, 2022 | Jun. 27, 2021 | Jul. 03, 2022 | Jun. 27, 2021 | ||
Accounting Policies [Abstract] | |||||
Beginning balance | $ 155 | $ 63 | $ 78 | $ 83 | |
Incurred costs for warranties satisfied during the period | (1) | (4) | (3) | (71) | |
Warranties reserved for new product shipped during the period(1) | [1] | 52 | 9 | 131 | 18 |
Change in estimate for pre-existing warranty liabilities (2) | [2] | (10) | (10) | 38 | |
Warranty Expense | 42 | 9 | 122 | 56 | |
Ending balance | $ 196 | $ 68 | $ 196 | $ 68 | |
[1]Warranty expenses accrued to cost of sales (based on current period shipments and historical warranty return rate.)[2]Changes in estimated warranty liabilities recognized in cost of sales associated with: the period end customer returned warranty backlog, or the actual costs of repaired/replaced warranty units which were shipped to the customer during the current period. |
Accounting Policies (Details Na
Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Jul. 03, 2022 | Jun. 27, 2021 | Jul. 03, 2022 | Jun. 27, 2021 | Apr. 03, 2022 | Oct. 03, 2021 | Mar. 28, 2021 | Sep. 27, 2020 | |
Product Information [Line Items] | ||||||||
Warranty reserve | $ 196,000 | $ 68,000 | $ 196,000 | $ 68,000 | $ 155,000 | $ 78,000 | $ 63,000 | $ 83,000 |
Revenue from customer deposit liabilities | 0 | $ 0 | 0 | $ 1,000 | ||||
Deferred revenue | 256,000 | 256,000 | ||||||
Deferred tax assets, valuation allowance | (800,000) | (800,000) | (800,000) | |||||
Deferred tax assets. gross | 1,700,000 | 1,700,000 | 2,100,000 | |||||
Deferred tax assets. net | $ 900,000 | 900,000 | $ 1,300,000 | |||||
Cash recovered | $ 300,000 | |||||||
Unvested Rectricted Stock Units [Member] | ||||||||
Product Information [Line Items] | ||||||||
Dilutive securities included in caluculation of earning per share | 66,000 | 99,000 | 66,000 | 99,000 | ||||
Unvested Rectricted Stock [Member] | ||||||||
Product Information [Line Items] | ||||||||
Dilutive securities included in caluculation of earning per share | 180,000 | 240,000 | 180,000 | 240,000 | ||||
Number of incremental shares | 98,678 | 36,883 | 73,849 | 87,550 | ||||
Warrant [Member] | ||||||||
Product Information [Line Items] | ||||||||
Dividends | $ 0 | $ 0 | ||||||
Undistributed earnings | 464,000 | 622,000 | ||||||
Service [Member] | ||||||||
Product Information [Line Items] | ||||||||
Revenue recognized over time | $ 120,000 | $ 120,000 | $ 352,000 | $ 359,000 | ||||
U.S. Government Agencies [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk percentage | 11% | |||||||
Major U.S. Defense Contractor One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk percentage | 18% | |||||||
Major U.S. Defense Contractor Two [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk percentage | 16% | |||||||
Major U.S. Defense Contractor Three [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk percentage | 15% | |||||||
Major U.S. Defense Contractor Four [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk percentage | 9% | |||||||
Major U.S. Defense Contractor Five [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk percentage | 6% | |||||||
One Commercial Customer [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk percentage | 17% | |||||||
All Other Customers [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk percentage | 8% |
Schedule of Segment Reporting I
Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2022 | Jun. 27, 2021 | Jul. 03, 2022 | Jun. 27, 2021 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 6,170 | $ 4,433 | $ 15,645 | $ 13,149 |
Interest expense | 4 | 9 | ||
Depreciation and amortization | 74 | 67 | 221 | 195 |
Income (loss) before taxes | 510 | 1,220 | 334 | 1,737 |
Allocated home office expense | ||||
Stock compensation expense | 36 | 57 | 127 | 171 |
Warranty expense | 42 | 9 | 122 | 56 |
Segment assets | 21,313 | 21,188 | 21,313 | 21,188 |
Expenditures for segment assets | 118 | 86 | 236 | 214 |
Gain on change in fair value of warrants | (1,167) | (2,025) | ||
Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | (258) | (41) | (693) | (937) |
Interest expense | 4 | 9 | ||
Depreciation and amortization | ||||
Income (loss) before taxes | (36) | 1,106 | (127) | 1,845 |
Allocated home office expense | ||||
Stock compensation expense | 36 | 57 | 127 | 171 |
Warranty expense | ||||
Segment assets | ||||
Expenditures for segment assets | ||||
Gain on change in fair value of warrants | (1,167) | (2,025) | ||
Optex Systems (OPX) - Richardson, Texas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 2,653 | 3,126 | 6,588 | 8,958 |
Interest expense | ||||
Depreciation and amortization | 8 | 10 | 28 | 31 |
Income (loss) before taxes | 185 | 328 | (276) | 351 |
Allocated home office expense | (268) | (177) | (802) | (530) |
Stock compensation expense | ||||
Warranty expense | ||||
Segment assets | 14,676 | 14,690 | 14,676 | 14,690 |
Expenditures for segment assets | 49 | (3) | 55 | 17 |
Gain on change in fair value of warrants | ||||
Applied Optics Center (AOC) - Dallas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 3,775 | 1,348 | 9,750 | 5,128 |
Interest expense | ||||
Depreciation and amortization | 66 | 57 | 193 | 164 |
Income (loss) before taxes | 361 | (214) | 737 | (459) |
Allocated home office expense | 268 | 177 | 802 | 530 |
Stock compensation expense | ||||
Warranty expense | 42 | 9 | 122 | 56 |
Segment assets | 6,637 | 6,498 | 6,637 | 6,498 |
Expenditures for segment assets | 69 | 89 | 181 | 197 |
Gain on change in fair value of warrants | ||||
Revenues from External Customers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 6,170 | 4,433 | 15,645 | 13,149 |
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 | 2,653 | 3,126 | 6,588 | 8,958 |
Revenues from External Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 3,517 | 1,307 | 9,057 | 4,191 |
Intersegment revenues [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | ||||
Intersegment revenues [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | (258) | (41) | (693) | (937) |
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 | $ 258 | $ 41 | $ 693 | $ 937 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 9 Months Ended |
Jul. 03, 2022 ft² Integer | |
Revenue, Major Customer [Line Items] | |
Leased facilities | ft² | 93,967 |
Number of employees | Integer | 83 |
Optex Systems (OPX) - Richardson, Texas [Member] | |
Revenue, Major Customer [Line Items] | |
Leased facilities | ft² | 49,100 |
Number of employees | Integer | 45 |
Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Leased facilities | ft² | 44,867 |
Number of employees | Integer | 38 |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 42% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 58% |
Domestic Military Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 87% |
Foreign Military Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 13% |
U.S. Government [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 13% |
One Major US Defense Contractor [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 18% |
Two Major US Defense Contractor [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 8% |
All Other Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 3% |
All Other Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 15% |
Commercial Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 21% |
Subcontracted Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 79% |
Revenues from External Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 93% |
Military Contracts [Member] | Intersegment Sales Revenue [Member] | Customer Concentration Risk [Member] | Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 7% |
One Major Defense Contractor [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 15% |
Two Major Defense Contractors [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 7% |
One Commercial Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Applied Optics Center (AOC) - Dallas [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk percentage | 21% |
Schedule of Non-cancellable Ope
Schedule of Non-cancellable Operating Leases Minimum Payments (Details) - USD ($) $ in Thousands | Jul. 03, 2022 | Oct. 03, 2021 | ||
Loss Contingencies [Line Items] | ||||
2022 Base year lease | $ 153 | |||
2023 Base year lease | 620 | |||
2024 Base year lease | 638 | |||
2025 Base year lease | 656 | |||
2026 Base year lease | 662 | |||
2027 Base year lease | 679 | |||
2028 Base year lease | 572 | |||
2029 Base year lease | 83 | |||
Total base lease payments | 4,063 | |||
Imputed interest on lease payments | [1] | (589) | ||
Operating Lease, Liability | [2] | 3,474 | ||
Operating Lease, Right-of-Use Asset | 3,339 | [3] | $ 3,599 | |
Common Area Maintenance Estimate [Member] | ||||
Loss Contingencies [Line Items] | ||||
2022 Base year lease | 58 | |||
2023 Base year lease | 235 | |||
2024 Base year lease | 240 | |||
2025 Base year lease | 245 | |||
2026 Base year lease | 249 | |||
2027 Base year lease | 254 | |||
2028 Base year lease | 184 | |||
2029 Base year lease | 27 | |||
Total base lease payments | 1,492 | |||
Optex Richardson [Member] | ||||
Loss Contingencies [Line Items] | ||||
2022 Base year lease | 78 | |||
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 | 242 | |||
2029 Base year lease | ||||
Total base lease payments | 2,003 | |||
Imputed interest on lease payments | [1] | (279) | ||
Operating Lease, Liability | [2] | 1,724 | ||
Operating Lease, Right-of-Use Asset | [3] | 1,647 | ||
Applied Optics Center [Member] | ||||
Loss Contingencies [Line Items] | ||||
2022 Base year lease | 71 | |||
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 | 2,008 | |||
Imputed interest on lease payments | [1] | (305) | ||
Operating Lease, Liability | [2] | 1,703 | ||
Operating Lease, Right-of-Use Asset | [3] | 1,645 | ||
Office Equipment Lease [Member] | ||||
Loss Contingencies [Line Items] | ||||
2022 Base year lease | 4 | |||
2023 Base year lease | 15 | |||
2024 Base year lease | 15 | |||
2025 Base year lease | 15 | |||
2026 Base year lease | 3 | |||
2027 Base year lease | ||||
2028 Base year lease | ||||
2029 Base year lease | ||||
Total base lease payments | 52 | |||
Imputed interest on lease payments | [1] | (5) | ||
Operating Lease, Liability | [2] | 47 | ||
Operating Lease, Right-of-Use Asset | [3] | $ 47 | ||
[1]Assumes a discount borrowing rate of 5.0% January 11, 2021 135 599 2,875 |
Schedule of Non-cancellable O_2
Schedule of Non-cancellable Operating Leases Minimum Payments (Details) (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 03, 2022 | Oct. 03, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Borrowing discount rate | 5% | |
Lease effective date | Jan. 11, 2021 | |
Deferred Rent | $ 135 | |
Short-term operating lease | 599 | $ 528 |
Long-term operating lease | $ 2,875 | $ 3,133 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | 3 Months Ended | 9 Months Ended | ||||||
Jul. 03, 2022 USD ($) ft² | Jun. 27, 2021 USD ($) | Jul. 03, 2022 USD ($) ft² | Jun. 27, 2021 USD ($) | Oct. 03, 2021 USD ($) | ||||
Area of land | ft² | 93,967 | 93,967 | ||||||
Right of use asset | $ 3,339,000 | [1] | $ 3,339,000 | [1] | $ 3,599,000 | |||
Operating lease liability | [2] | 3,474,000 | 3,474,000 | |||||
Facility Lease Agreement [Member] | ||||||||
Operating lease cost | 215,000 | $ 207,000 | 635,000 | $ 569,000 | ||||
Rent expenses | 7,000 | $ 6,000 | $ 19,000 | $ 17,000 | ||||
One Non-cancellable Office Equipment Lease [Member] | ||||||||
Lease description | The Company had 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 was $1.5 thousand per month from October 1, 2018 through December 31, 2021. The lease was renewed on November 18, 2021 for an additional 48 months at a cost of $1.2 thousand per month. The start of the lease was delayed until April 2022 due to temporary equipment shortages. The lease renewal resulted in the recognition of an additional right of use asset and a lease liability of $51 thousand, respectively during the three months ended July 3, 2022 | |||||||
Right of use asset | 51,000 | $ 51,000 | ||||||
Operating lease liability | $ 51,000 | $ 51,000 | ||||||
Lease term | 39 months | 39 months | ||||||
Optex Systems (OPX) - Richardson, Texas [Member] | ||||||||
Area of land | ft² | 49,100 | 49,100 | ||||||
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 the 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% on April 1 each year thereafter | |||||||
Applied Optics Center (AOC) - Dallas [Member] | ||||||||
Area of land | ft² | 44,867 | 44,867 | ||||||
Expiration date | Oct. 31, 2021 | |||||||
Lease description | the monthly base rent was $21.9 thousand through the end of the lease. On January 11, 2021 the Company executed a first amendment extending the terms of the 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% on January 1 each year thereafter. 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 rental rate. Our obligations to make payments under the lease are secured by a $125,000 standby letter of credit | |||||||
Maintenance fee | $ 7,900 | |||||||
Dallas and Richardson Facilities [Member] | ||||||||
Right of use asset | 3,700,000 | |||||||
Operating lease liability | $ 3,700,000 | |||||||
[1]Short-term and Long-term portion of Operating Lease Liability is $ 599 2,875 135 |
Debt Financing (Details Narrati
Debt Financing (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Apr. 12, 2022 | Jul. 03, 2022 | Jun. 27, 2021 | Jul. 03, 2022 | Jun. 27, 2021 | Oct. 03, 2021 | |
Line of Credit Facility [Line Items] | ||||||
Maturity date description | the maturity date was extended from April 15, 2022 to April 15, 2023 | |||||
Interest expenses | $ 0 | $ 4,000 | $ 0 | $ 9,000 | ||
Revolving Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Outstanding principal balance | $ 0 | $ 0 | $ 0 | |||
Revolving Credit Facility [Member] | BBVA [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Description of term period | The Loan Agreement contains customary events of default and negative covenants, including but not limited to those governing indebtedness, liens, fundamental changes, investments, and restricted payments. The Loan Agreement also requires the Borrowers to maintain a fixed charge coverage ratio of at least 1.25:1. The credit facility is secured by substantially all of the operating assets of the Borrowers as collateral. The Borrowers’ obligations under the credit facility are subject to acceleration upon the occurrence of an event of default as defined in the Loan Agreement | |||||
Revolving Credit Facility [Member] | BBVA [Member] | Prime Rate [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit interest percentage | 0.25% | |||||
Revolving Credit Facility [Member] | BBVA [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit principle amount | $ 2,250,000 | |||||
Revolving Credit Facility [Member] | BBVA [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit principle amount | $ 1,125,000 |
Schedule of Warrant Liabilities
Schedule of Warrant Liabilities Assumptions Used (Details) | Jun. 27, 2021 $ / shares | Sep. 27, 2020 $ / shares | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrant expiration date | [1] | Aug. 26, 2021 | Aug. 26, 2021 |
Time to maturity | 2 months 12 days | 10 months 24 days | |
Warrant [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Calculated fair value per share | $ 0.13 | $ 0.62 | |
Measurement Input, Exercise Price [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value measurement input | [1] | 1.50 | 1.50 |
Measurement Input, Share Price [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value measurement input | [2] | 1.53 | 1.96 |
Measurement Input, Risk Free Interest Rate [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value measurement input | [3] | 0.06 | 0.12 |
Measurement Input, Price Volatility [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value measurement input | 44.35 | 51.67 | |
[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 end 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 | ||
Jul. 03, 2022 | Jun. 27, 2021 | Jul. 03, 2022 | Jun. 27, 2021 | |
Gain on change in fair value of warrant liability | $ (1,167) | $ (2,025) | ||
Warrant [Member] | ||||
Warrant liability, fair value outstanding, beginning | 4,125,200 | |||
Fair value per share, beginning | $ 0.62 | |||
Fair value of warrant liability, beginning | $ 2,544 | |||
Gain on change in fair value of warrant liability | $ (2,025) | |||
Warrant liability, fair value outstanding, ending | 4,125,200 | 4,125,200 | ||
Fair value per share, ending | $ 0.13 | $ 0.13 | ||
Fair value of warrant liability, ending | $ 519 | $ 519 |
Warrant Liabilities (Details Na
Warrant Liabilities (Details Narrative) - $ / shares | Jul. 03, 2022 | Jun. 27, 2021 | Aug. 26, 2016 |
Warrant [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Issues or exercises of existing warrants | 0 | 0 | |
New Shareholders [Member] | Underwriter [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Issues or exercises of existing warrants | 4,323,135 | ||
Class of warrant or right exercise price of warrants or rights | $ 1.50 |
Schedule of Aggregate Non-veste
Schedule of Aggregate Non-vested Restricted Stock and Restricted Stock Units Granted (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Jul. 03, 2022 | Oct. 03, 2021 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares, outstanding | 99,000 | 182,000 |
Weighted average grant date fair value, outstanding | $ 1.59 | $ 1.54 |
Shares, granted | ||
Weighted average grant date fair value, granted | ||
Shares, vested | (33,000) | (83,000) |
Weighted average grant date fair value, vested | $ 1.73 | $ 1.49 |
Shares, forfeited | ||
Weighted average grant date fair value, forfeited | ||
Shares, outstanding | 66,000 | 99,000 |
Weighted average grant date fair value, outstanding | $ 1.52 | $ 1.59 |
Restricted Stock [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares, outstanding | 240,000 | 300,000 |
Weighted average grant date fair value, outstanding | $ 1.75 | $ 1.75 |
Shares, granted | ||
Weighted average grant date fair value, granted | ||
Shares, vested | (60,000) | (60,000) |
Weighted average grant date fair value, vested | $ 1.75 | $ 1.75 |
Shares, forfeited | ||
Weighted average grant date fair value, forfeited | ||
Shares, outstanding | 180,000 | 240,000 |
Weighted average grant date fair value, outstanding | $ 1.75 | $ 1.75 |
Schedule of Unrecognized Compen
Schedule of Unrecognized Compensation Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 03, 2022 | Jun. 27, 2021 | Jul. 03, 2022 | Jun. 27, 2021 | Oct. 03, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Recognized compensation expense | $ 36 | $ 57 | $ 127 | $ 171 | |
Unrecognized compensation expense | 280 | 280 | $ 407 | ||
Restricted Stock [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Recognized compensation expense | 27 | 26 | 79 | 79 | |
Unrecognized compensation expense | 262 | 262 | 341 | ||
Restricted Stock Units (RSUs) [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Recognized compensation expense | 9 | $ 31 | 48 | $ 92 | |
Unrecognized compensation expense | $ 18 | $ 18 | $ 66 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) | Jan. 04, 2022 | Jan. 01, 2022 | Dec. 01, 2021 | Jan. 02, 2021 | Jan. 01, 2021 | Apr. 30, 2020 | Feb. 17, 2020 | Jan. 02, 2019 | Jul. 03, 2022 | Oct. 03, 2021 |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Unrecognized compensation cost | $ 280,000 | $ 407,000 | ||||||||
Employment Agreement [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Employment agreement description | The updated employment agreement also served to amend Mr. Schoening’s RSU Agreement, dated January 2, 2019, by changing the third and final vesting date for the restricted stock units granted under such agreement from January 1, 2022 to the “change of control date,” that being the first of the following to occur with respect to the Company: (i) any “Person,” as that term is defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with certain exclusions, is or becomes the “Beneficial Owner” (as that term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities; or (ii) the Company is merged or consolidated with any other corporation or other entity, other than: (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (B) the Company engages in a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “Person” (as defined above) acquires fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities. The amended RSU Agreement contains certain exceptions to the definition of change of control | |||||||||
Directors and Officers [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Issuance of shares | 23,216 | 58,392 | ||||||||
Restricted stock value shares issued net | $ 19,000 | $ 44,000 | ||||||||
Vested restricted stock units | 33,000 | 83,000 | ||||||||
Three Independent Directors [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Vesting period of shares | 5 years | |||||||||
Restricted shares description | an effective date of January 1, 2020, in addition to granting 100,000 restricted shares to each independent director which shall vest at a rate of 20% per year (20,000 shares) each January 1st, over the next five years, through January 1, 2025. | |||||||||
Shares issued payment arrangement, before forfeiture | 300,000 | |||||||||
Shares issued, value payment arrangement, before forfeiture | $ 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] | ||||||||||
Employee benefits and share based compensation | $ 22,000 | |||||||||
Three Independent Directors [Member] | Maximum [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Employee benefits and share based compensation | $ 36,000 | |||||||||
Director [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Share based compensation payment vested in period | 60,000 | 60,000 | ||||||||
2009 Stock Option Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Number of authorized shares | 75,000 | |||||||||
Fully vested stock options outstanding | 0 | |||||||||
2016 Restricted Stock Unit Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Unvested restricted stock units | 49,500 | |||||||||
Unrecognized compensation cost | $ 5,000 | |||||||||
2016 Restricted Stock Unit Plan [Member] | Chief Executive Officer [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Shares, granted | 150,000 | |||||||||
Amortization of grant date fair market value | $ 264,000 | |||||||||
2016 Restricted Stock Unit Plan [Member] | Chief Financial Officer [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Shares, granted | 50,000 | |||||||||
2016 Restricted Stock Unit Plan [Member] | Bill Gates [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Shares, granted | 50,000 | |||||||||
Vesting percentage, next twelve months | 34% | |||||||||
Vesting percentage, thereafter | 33% | |||||||||
Share price | $ 1.32 | |||||||||
Amortization of grant date fair market value | $ 107,000 | |||||||||
Vesting period of shares | 3 years | |||||||||
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 | 9 Months Ended | 12 Months Ended | |||||||||||||||||
Jul. 03, 2022 | Oct. 01, 2021 | Jul. 03, 2022 | May 29, 2022 | May 01, 2022 | Apr. 03, 2022 | Feb. 27, 2022 | Jan. 30, 2022 | Jan. 02, 2022 | Nov. 28, 2021 | Oct. 31, 2021 | Apr. 19, 2021 | Mar. 28, 2021 | Feb. 21, 2021 | Jan. 24, 2021 | Dec. 27, 2020 | Nov. 22, 2020 | Oct. 25, 2020 | Jul. 03, 2022 | Oct. 03, 2021 | |
Equity [Abstract] | ||||||||||||||||||||
Total number of shares purchased | 35,555 | 49,657 | 10,482 | 12,304 | 35,530 | 27,618 | 15,585 | 14,558 | 4,415 | 18,265 | 38,599 | 73,800 | 52,180 | 40,362 | 58,399 | 129,245 | 20,948 | 188,414 | 449,088 | |
Total purchase cost | $ 435 | $ 69 | $ 95 | $ 22 | $ 27 | $ 70 | $ 49 | $ 29 | $ 28 | $ 9 | $ 37 | $ 70 | $ 140 | $ 101 | $ 73 | $ 109 | $ 265 | $ 42 | $ 366 | $ 869 |
Average price paid per share (with commission) | $ 1.93 | $ 1.90 | $ 2.11 | $ 2.22 | $ 1.98 | $ 1.75 | $ 1.89 | $ 1.93 | $ 2.04 | $ 2.01 | $ 1.82 | $ 1.90 | $ 1.94 | $ 1.80 | $ 1.86 | $ 2.05 | $ 2.01 | $ 1.94 | $ 1.93 | |
Maximum dollar value that may yet be purchased under the plan | $ 931 | $ 565 | $ 660 | $ 682 | $ 709 | $ 779 | $ 828 | $ 857 | $ 885 | $ 894 | $ 70 | $ 210 | $ 311 | $ 384 | $ 493 | $ 758 | $ 565 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||
Jul. 03, 2022 | Oct. 01, 2021 | Sep. 27, 2020 | Jul. 03, 2022 | May 29, 2022 | May 01, 2022 | Apr. 03, 2022 | Feb. 27, 2022 | Jan. 30, 2022 | Jan. 02, 2022 | Nov. 28, 2021 | Oct. 31, 2021 | Apr. 30, 2021 | Apr. 19, 2021 | Mar. 28, 2021 | Feb. 21, 2021 | Jan. 24, 2021 | Dec. 27, 2020 | Nov. 22, 2020 | Oct. 25, 2020 | Jul. 03, 2022 | Jul. 03, 2022 | Oct. 03, 2021 | Sep. 22, 2021 | Jun. 08, 2020 | |
Dividends Payable [Line Items] | |||||||||||||||||||||||||
Number of shares purchased | 223,969 | ||||||||||||||||||||||||
Total purchase cost | $ 435,000 | $ 69,000 | $ 95,000 | $ 22,000 | $ 27,000 | $ 70,000 | $ 49,000 | $ 29,000 | $ 28,000 | $ 9,000 | $ 37,000 | $ 70,000 | $ 140,000 | $ 101,000 | $ 73,000 | $ 109,000 | $ 265,000 | $ 42,000 | $ 366,000 | $ 869,000 | |||||
Total number of shares purchased | 35,555 | 49,657 | 10,482 | 12,304 | 35,530 | 27,618 | 15,585 | 14,558 | 4,415 | 18,265 | 38,599 | 73,800 | 52,180 | 40,362 | 58,399 | 129,245 | 20,948 | 188,414 | 449,088 | ||||||
Common shares outstanding | 8,322,951 | 8,322,951 | 8,322,951 | 8,322,951 | 8,488,149 | ||||||||||||||||||||
Treasury stock, shares | 0 | 0 | 0 | 0 | 35,555 | ||||||||||||||||||||
Common stock, shares, issued | 8,322,951 | 8,322,951 | 8,322,951 | 8,322,951 | 8,523,704 | ||||||||||||||||||||
Stock Repurchase Plan [Member] | |||||||||||||||||||||||||
Dividends Payable [Line Items] | |||||||||||||||||||||||||
Stock repurchase program authorized amount | $ 1,000,000 | $ 1,000,000 | |||||||||||||||||||||||
Number of shares purchased | 519,266 | ||||||||||||||||||||||||
June 2020 Stock Repurchase Plan [Member] | |||||||||||||||||||||||||
Dividends Payable [Line Items] | |||||||||||||||||||||||||
Number of shares purchased | 105,733 | ||||||||||||||||||||||||
Dividend Paid [Member] | |||||||||||||||||||||||||
Dividends Payable [Line Items] | |||||||||||||||||||||||||
Dividends | $ 0 | $ 0 | $ 0 |