Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 27, 2015 | Feb. 15, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Optex Systems Holdings Inc | |
Entity Central Index Key | 1,397,016 | |
Trading Symbol | opxs | |
Current Fiscal Year End Date | --10-02 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 331,145 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 27, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 27, 2015 | Sep. 27, 2015 |
Current Assets | ||
Cash and Cash Equivalents | $ 1,405 | $ 683 |
Accounts Receivable, Net | 1,230 | 2,866 |
Net Inventory | 5,863 | 5,713 |
Prepaid Expenses | 264 | 170 |
Current Assets | 8,762 | 9,432 |
Property and Equipment, Net | 1,885 | 1,971 |
Other Assets | ||
Prepaid Royalties - Long Term | 113 | 120 |
Security Deposits | 23 | 23 |
Other Assets | 136 | 143 |
Total Assets | 10,783 | 11,546 |
Current Liabilities | ||
Accounts Payable | 655 | 575 |
Accrued Expenses | 796 | 812 |
Accrued Warranties | 28 | 28 |
Customer Advance Deposits - Short Term | 1,057 | 1,091 |
Credit Facility | 310 | 817 |
Current Liabilities | 2,846 | 3,323 |
Other Liabilities | ||
Customer Advance Deposits - Long Term | 65 | |
Other Liabilities | 65 | |
Total Liabilities | $ 2,846 | $ 3,388 |
Stockholders' Equity | ||
Common Stock - ($0.001 par, 2,000,000,000 authorized, 331,145 and 314,867 shares issued and outstanding, respectively) | ||
Additional Paid-in-capital | $ 26,418 | $ 26,394 |
Accumulated Deficit | (18,481) | (18,236) |
Stockholders' Equity | 7,937 | 8,158 |
Total Liabilities and Stockholders' Equity | $ 10,783 | $ 11,546 |
Series A Preferred Stock | ||
Stockholders' Equity | ||
Preferred Stock Value | ||
Series B Preferred Stock | ||
Stockholders' Equity | ||
Preferred Stock Value |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 27, 2015 | Sep. 27, 2015 | May. 27, 2015 | Sep. 28, 2014 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 | ||
Common stock, shares issued | 331,145 | 314,867 | 310,867 | |
Common stock, shares outstanding | 331,145 | 314,867 | ||
Series A Preferred Stock | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized | 5,000 | 5,000 | ||
Preferred stock, shares issued | 1,001 | 1,001 | ||
Preferred stock, shares outstanding | 1,001 | 1,001 | ||
Series B Preferred Stock | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 1,010 | 1,010 | 1,010 | |
Preferred stock, shares issued | 969 | 994 | 0 | |
Preferred stock, shares outstanding | 969 | 994 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Income Statement [Abstract] | ||
Revenue | $ 3,213 | $ 2,098 |
Cost of Sales | 2,746 | 1,719 |
Gross Margin | 467 | 379 |
General and Administrative Expense | 694 | 687 |
Operating Loss | (227) | (308) |
Gain on Purchased Asset | 2,110 | |
Change in Fair Value - Derivatives | 847 | |
Interest Expense | (18) | (5,479) |
Other Income and (Expense) | (18) | (2,522) |
Loss Before Taxes | $ (245) | $ (2,830) |
Deferred Income Taxes (Benefit) | ||
Net Loss After Taxes | $ (245) | $ (2,830) |
Basic and diluted loss per share (in dollars per share) | $ (0.75) | $ (9.10) |
Weighted Average Common Shares Outstanding (in share) | 326,122 | 310,867 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (245) | $ (2,830) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 86 | 66 |
Derivative valuation gains | (847) | |
Noncash interest expense | (6) | 5,479 |
Stock compensation expense | 24 | 67 |
(Increase) decrease of intangible assets | (342) | |
(Increase) decrease in accounts receivable | 1,636 | (130) |
(Increase) decrease in inventory (net of progress billed) | (150) | (1,175) |
(Increase) decrease in prepaid expenses | (94) | (1) |
Increase (decrease) in accounts payable and accrued expenses | 63 | 236 |
Increase (decrease) in accrued warranty costs | 3 | |
Increase (decrease) in customer advance deposits | (99) | (257) |
Total adjustments | 1,460 | 3,099 |
Net cash provided by operating activities | 1,215 | 269 |
Cash flows from investing activities | ||
Purchases of property and equipment | (2,088) | |
Decrease in prepaid royalties - long term | 7 | 7 |
Net cash provided by (used in) investing activities | 7 | (2,081) |
Cash flows from financing activities | ||
Proceeds from convertible notes issued | 1,560 | |
Debt issuance fees | (74) | |
Proceeds (to) from credit facility (net) | (500) | |
Net cash (used in) provided by financing activities | (500) | 1,486 |
Net increase (decrease) in cash | 722 | (326) |
Cash at beginning of period | 683 | 1,685 |
Cash at end of period | 1,405 | $ 1,359 |
Supplemental cash flow information: | ||
Cash paid for interest | $ 24 |
Organization and Operations
Organization and Operations | 3 Months Ended |
Dec. 27, 2015 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | |
Organization and Operations | Note 1 - Organization and Operations Optex Systems Holdings’ operations are based in Dallas and Richardson, Texas in leased facilities comprising approximately 93,733 square feet. As of December 27, 2015, Optex Systems Holdings operated with 85 full-time equivalent employees. Optex Systems Holdings manufactures optical sighting systems and assemblies, primarily for Department of Defense and foreign military applications. 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. Optex Systems Holdings 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. Optex Systems Holdings is an ISO 9001:2008 certified company. On November 3, 2014, Optex Systems, Inc. purchased the assets comprising the Applied Optics Products Line of L-3 Communications, Inc. (“L-3”), a thin film coating manufacturer for lenses used primarily in the defense industry. U.S. military spending has been significantly reduced as a result of the Congressional sequestration cuts to defense spending, which began in fiscal year 2013. As a result of lower U.S. government spending, we have continued to explore other opportunities for manufacturing outside of our traditional product lines for products which could be manufactured using our existing lines in order to fully utilize our existing capacity. Further, we continue to look for additional strategic businesses to acquire that will strengthen our existing product line, expand our operations and enter new markets. On October 7, 2015, we effected a 1:1000 reverse split of our issued and outstanding shares of common stock and all share numbers in these consolidated financial statements have been adjusted to give effect to this reverse split. |
Accounting Policies
Accounting Policies | 3 Months Ended |
Dec. 27, 2015 | |
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 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 Optex Systems Holdings believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and the notes thereto included in the Optex Systems Holdings’ Form 10-K for the year ended September 27, 2015 and other reports filed with the SEC. The accompanying unaudited interim 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. Use of Estimates: Inventory: (Thousands) December 27, 2015 September 27, 2015 Raw Material $ 4,129 $ 4,545 Work in Process 2,754 2,456 Finished Goods 572 304 Gross Inventory $ 7,455 $ 7,305 Less: Inventory Reserves (1,592 ) (1,592 ) Net Inventory $ 5,863 $ 5,713 Net inventory increased by $150 thousand during the three months ending December 27, 2015 in support of higher revenues in the current fiscal year. Revenue Recognition: The units-of-delivery method recognizes as revenue the contract price of units of a basic production product delivered during a period and as the cost of earned revenue the costs allocable to the delivered units. Costs allocable to undelivered units are reported in the balance sheet as inventory or work in progress. The method is used in circumstances in which an entity produces units of a basic product under production-type contracts in a continuous or sequential production process to buyers’ specifications. Optex Systems Holdings contracts are fixed price production type contracts whereby a defined order quantity is delivered to the customer during a continuous or sequential production process tailored to the buyer’s specifications (build to print). Optex Systems Holdings’ deliveries against these contracts generally occur in monthly increments across fixed delivery periods spanning from 3 to 36 months. Optex Systems Holdings may at times have contracts that allow for invoicing based on achievement of milestone events. In such cases, Optex Systems Inc. recognizes revenue based on the milestone method in accordance with FASB ASC 605-28, as applicable. On October 24, 2011, Optex Systems, Inc. was awarded an $8.0 million contract with General Dynamics Land Systems - Canada that provided for milestone invoices up to a total of $3.9 million. The terms of the contract extend through 2017 during which time we are required to purchase the necessary materials to fulfill the delivery of products required by the contract. Currently, there are no additional contracts providing for milestone payments. In accordance with FASB 605-28, Optex Systems, Inc. recognizes milestone payments as revenue upon completion of a substantive milestone as commensurate with the following guidelines: our performance to achieve the milestone, the milestone relates solely to past performance and is reasonable relative to all of the deliverables and payment terms within the arrangement. Milestones are not considered as substantive if any portion of the associated milestone consideration relates to the remaining deliverables in the unit of accounting. Non-substantive milestone payments are reported as a liability on the balance sheet as Short Term and Long Term Customer Advance Deposits. Pursuant to the contract, all substantive milestones events were completed as of September 30, 2012 and as such, there was zero revenue recognized for milestones in the three months ending December 27, 2015 and December 28, 2014 and no unpaid/invoiced customer deposits related to the completed milestone events, respectively. Customer Advance Deposits: Stock-Based Compensation: The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of FASB ASC 505-50 . Segment Reporting: Derivative Financial Instruments: “Derivatives and Hedging” “Embedded Derivatives” “Derivatives and Hedging – Contracts in Entity’s own Equity”. Fair Value of Financial Instruments: Intangible Assets: Intangible assets with indefinite lives are tested annually for impairment, during the fiscal fourth quarter and between annual periods, if impairment indicators exist, and are written down to fair value as required. Income Tax/Deferred Tax: Earnings per Share: The potentially dilutive securities that Optex Systems Holdings has outstanding are convertible preferred stock, convertible debt, stock options and warrants. In computing the dilutive effect of convertible preferred stock or debt, the numerator is adjusted to add back any convertible preferred dividends and interest on convertible debt, and the denominator is increased to assume the conversion of the number of additional common shares. Optex Systems Holdings uses the Treasury Stock Method to compute the dilutive effect of stock options and warrants. Convertible preferred stock, convertible debt, stock options and warrants that are anti-dilutive are excluded from the calculation of diluted earnings per common share. For the three months ended December 27, 2015, respectively, 1001 shares of Series A preferred stock, 969 shares of Series B preferred stock, 62,847 stock options and 1,000 warrants were excluded from the earnings per share calculation as anti-dilutive. For the three months ended December 28, 2014, respectively, 1,001 shares of Series A preferred stock, 447,732 shares of convertible debt, 62,912 stock options and 1,000 warrants were excluded from the earnings per share calculation as anti-dilutive. |
Purchase of Applied Optics Prod
Purchase of Applied Optics Products Line | 3 Months Ended |
Dec. 27, 2015 | |
Purchase Of Applied Optics Products Line [Abstract] | |
Purchase of Applied Optics Products Line | Note 3 Purchase of Applied Optics Products Line On November 3, 2014, Optex Systems, Inc. entered into a Purchase Agreement with L-3 Communications, Inc. (“L-3”) pursuant to which Optex purchased from L-3 the assets comprising L-3’s Applied Optics Products Line (“Purchased Assets”). Applied Optics (“AOC”) is primarily engaged in the production, marketing and sales of precision optical assemblies utilizing thin film coating capabilities for optical systems and components primarily used for military purposes. The Purchased Assets consist of personal property, inventory, books and records, contracts, prepaid expenses and deposits, intellectual property, and governmental contracts and licenses utilized in the business comprised of the Purchased Assets. The purchase price for the acquisition was $1,013.1 thousand, which was paid in full at closing, plus the assumption of certain liabilities associated with the Purchased Assets in the approximate amount of $270.7 thousand. The source of funds for the acquisition consisted of Optex working capital of $213.1 thousand and an advance of $800 thousand from accredited investors which was subsequently consummated on November 17, 2014 through the private placement of convertible notes issued by Optex Systems Holdings in a transaction exempt from registration under Section 4(2) of the Securities Act. See Note 8 “Issuance of Convertible Notes”. The asset acquisition met the definition of a business for business combinations under ASC 805-10-20. The following table reconciles the fair value of the acquired assets and assumed liabilities to the total purchase price of the Applied Optics Product Line Acquisition (in thousands): Fair Values as of Fixed Assets $ 2,064.7 Inventory 940.1 Prepaid Assets/Other 47.1 Liabilities (270.7 ) Net Assets Acquired 2,781.2 Intangible Asset: Customer Contracts/Backlog 342.2 Total Assets Acquired 3,123.4 Less: Cash Consideration (1,013.1 ) Gain on Bargain Purchase $ 2,110.3 The aggregate purchase consideration has been allocated to the assets and liabilities acquired, including identifiable intangible assets, based on their respective estimated fair values. The total assets acquired exceeded the total consideration paid, thus there is no goodwill associated with the asset purchase and the acquisition has been determined as a bargain purchase which requires immediate recognition of a gain on the purchased assets. The gain is reflected in earnings in Other Income on the Consolidated Statement of Operations as “Gain on Purchased Asset”. The intangible assets include finite-life intangibles associated with undelivered customer backlog as of the acquisition date and was valued using the income approach methodology that includes the discounted cash flow method as well as other generally accepted valuation methodologies, which requires significant judgment by management. The cash flow projections took into effect the expected net sales from the customer backlog as of November 3, 2014 and the corresponding expenses against those sales in the respective periods. The shipments against the customer backlog were delivered between January and June of 2015, and as such, the intangible amortization against those shipments was complete by June 2015. As of September 27, 2015 the balance in unamortized intangible assets was zero. The respective estimated fair values for property plant & equipment, and fixed assets were determined by an independent third-party appraisal firm. The appraisal methods employed by the firm in arriving at the final values on all of the equipment included a combination of the “Cost Approach” the “Market Data Approach” as well as “Income Approach” on specific high historical cost assets as presented by the seller. Certain assets which had very specific military manufacturing applications were operating at less than optimal capacity due to significantly reduced government spending from historical levels related to those processes. The excess or “idle” capacity on these unique assets was considered in the appraiser’s valuation, and the appraised values adjusted downward accordingly, in consideration of the reduced revenue and corresponding limited cash flow that could reasonably be generated from these assets under the current market conditions. Separate from the appraisal analysis, Optex completed a physical inventory of all raw material, work in process and finished goods inventories in their various stages of production as of the acquisition date, and conducted a thorough revaluation and review of the counted inventory carrying values giving downward consideration to any excess, obsolete, or other product inventories which were valued in excess of the expected net realizable values given the depressed market conditions. Based on the supplemental inventory review, combined with the income approach used on the excess and idle capacity assets applied by the appraiser, the company was satisfied that the third party appraisal fairly valued those assets. The total fair value appraisal for the purchased assets, before intangible assets and assumed liabilities approximated 73% of the net carrying values of those same assets on the sellers closing balance sheet as of November 3, 2014. Optex Systems Holdings believes that it was able to acquire the Applied Optics Product Line for less than the fair value of its assets because of (i) its unique position as a market leader in the industry segment that directly utilizes the manufactured components specific to the Applied Optics Product Line, (ii) a previous customer/supplier relationship with the acquisition target, (iii) L-3’s intent to exit the optical coating operations, and (iv) L-3’s desire to provide for continued employment of the Applied Optics workforce. The Applied Optics Product Line had a recent history of losses, and the seller approached Optex Systems in an effort to sell the product line and exit the optical coating manufacturing business that no longer fit its strategy. With the seller's intent to exit the business segment and Optex’s position as a market leader within the same industry segment utilizing the product line capability, Optex was able to agree on a favorable purchase price with L-3 Communications. As a result of the asset purchase, the company incurred additional acquisition-related costs of approximately $40.2 thousand during the three months ending December 28, 2014 for legal, accounting and valuation consulting fees which were expensed to general administrative costs. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Dec. 27, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 4 Segment Reporting Optex Systems Holdings, Inc. has two reportable segments which include Optex Systems (OPX)-Richardson, and Applied Optics Center (AOC) – Dallas. The accounting policies for each segment are the same as those described in the summary of significant accounting policies. Optex Systems Holdings, Inc. evaluates performance based on profit and loss from operations before income taxes excluding nonrecurring gains and losses. Optex Systems Holdings 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. 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 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 – Dallas, serves as the home office for both segments and shared general and administrative costs attributable to both segments are allocated directly to the segments based on the government costs accounting standard, CAS 403 – “Allocation of Home Office Expenses to Segments”. The purpose of CAS 403 is to provide criteria for allocating home office expenses to the segments of an organization based on the beneficial or causal relationships between the expenses and the receiving segments. Based on CAS 403, Optex Systems Holdings allocates home office expenses based on a three factor formula which is the average of the following three percentages for the each segments fiscal year: (1) The percentage of segment payroll dollars to total payroll dollars of all segments; (2) The percentage of the segment’s operating revenue to the total operating revenue of all segments (3) The percentage of the average net book value of the sum of the segment’s tangible capital assets plus inventories to the total average net book value of such assets of all segments. Optex Systems (OPX) – Richardson, Texas Optex Systems, Inc. manufactures optical sighting systems and assemblies, primarily for Department of Defense applications. Its products are installed on various types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, light armored and armored security vehicles and have been selected for installation on the Stryker family of vehicles. Optex Systems, Inc. also manufactures and delivers numerous periscope configurations, rifle and surveillance sights and night vision optical assemblies. We have capabilities which include machining, bonding, painting engraving and assembly and can perform both optical and environmental testing in-house. Optex Systems, Inc. products consist primarily of build-to-customer print products that are delivered both directly to the armed services and to other defense prime contractors. Optex Systems in Richardson is both a prime and sub-prime contractor to the Department of Defense. Sub-prime contracts are typically issued through major defense contractors such as General Dynamics Land Systems, Raytheon Corp., BAE, NorcaTec and others. Optex Systems is also a military supplier to foreign governments such as Israel, Australia and NAMSA and South American countries and as a subcontractor for several large U.S. defense companies serving foreign governments. During the three months ended December 27, 2015, 97% of Optex Systems – Richardson revenues were in support of prime and subcontracted military customers. The Optex Systems segment serves domestic military customers, 68%, foreign military customers, 29%, and domestic commercial customers of 3%. The Optex Systems segment revenue for the three months ending December 27, 2015 was derived from external customers consisting of General Dynamics, 20%, the U.S. government, 59%, International Parts Supply Co (IPS) 10%, and other external customers, 11%. Optex Systems is located in Richardson, Texas, with leased premises consisting of approximately 49,100 square feet. As of December 27, 2015, the Richardson facility operated with 51 full time equivalent employees in a single shift operation. Optex Systems in Richardson serves as the home office for both the Optex Systems (OPX) and Applied Optics Center (AOC) segments. Applied Optics Center (AOC) – Dallas On November 3, 2014, Optex Systems, Inc. entered into a Purchase Agreement with L-3 pursuant to which Optex Systems, Inc. purchased from L-3 the assets comprising L-3’s Applied Optics Center Products Line (see Note 3). Applied Optics Center is engaged in the production, marketing and sales of precision optical assemblies and components which utilize thin film coating technologies. Most of the AOC products and services are directly related to the deposition of thin-film coatings. AOC is both a prime and sub-prime contractor to the Department of Defense. Sub-prime contracts are typically issued through major defense contractors such as General Dynamics Land Systems, Raytheon Corp., L-3 Communications, Harris Corporation and others. AOC also creates a new sector of opportunity for commercial products. Globally, commercial optical products use thin film coatings to create product differentiation and performance levels. These coatings can be used for redirecting light (mirrors), blocking light (laser protection), absorbing select light (desired wavelengths), and many other combinations. They are used in telescopes, rifle scopes, binoculars, microscopes, range finders, protective eyewear, photography, etc. The Applied Optics Center is a key supplier to Nightforce Optics, Inc. and provides optical assembly components to their markets of interest in commercial sporting optics and select military optics. Given this broad potential, the commercial applications are a key opportunity going forward. The Applied Optics Center segment also serves as the key supplier of the laser coated filters used in the production of periscope assemblies at the Optex Systems Richardson segment. The Applied Optics Center serves primarily domestic U.S. customers. During the three months ended December 27, 2015, sales to commercial customers represent 33%, military sales to prime and subcontracted customers represent 49% and foreign sales represent 1% of the total segment revenue. Intersegment sales to Optex Systems – Richardson, comprised 17% of the total segments revenue and was primarily in support of military contracts. The Applied Optics Center external customer revenue for the three months ending December 27, 2015 was derived from L3 Communications, 49%, Nightforce Optics, Inc., 36%, the U.S. government 9% and other external customers, 6%. The Applied Optics Center (AOC), is located in Dallas, Texas with leased premises consisting of approximately 56,633 square feet of space, of which 12,000 square feet is currently subleased to L3 Mobile Vision. As of December 27, 2015, AOC operated with 34 full time equivalent employees in a single shift operation. The financial table below presents the information for each of the reportable segments profit or loss as well as segment assets for each year. Optex Systems Holdings, Inc. does not allocate interest expense, income taxes or unusual items to segments. Reportable Segment Financial Information Three months ending December 27, 2015 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 2,167 $ 1,046 $ - $ 3,213 Intersegment revenues - 221 (221 ) - Total Revenue $ 2,167 $ 1,267 $ (221 ) $ 3,213 Interest expense - - 18 $ 18 Depreciation and Amortization 19 67 - 86 Income (Loss) before taxes 15 (242 ) (18 ) (245 ) Other significant noncash items: Allocated home office expense (188 ) 188 - - Stock compensation expense 24 - - 24 Royalty expense amortization 7 - - 7 Provision for contract losses - (15 ) - (15 ) Segment Assets 6,842 3,941 - 10,783 Expenditures for segment assets - - - - Reportable Segment Financial Information Three months ending December 28, 2014 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 1,756 $ 342 $ - $ 2,098 Intersegment revenues - - - - Total Revenue $ 1,756 $ 342 $ - $ 2,098 Interest expense - - 5,479 $ 5,479 Depreciation and Amortization 22 44 - 66 Income (Loss) before taxes (115 ) 1,917 (4,632 ) (2,830 ) Other significant noncash items: Allocated home office expense (67 ) 67 - - (Gain) on purchased asset - AOC - 2,110 - 2,110 Change in Fair Value - Derivatives 847 847 Stock option compensation expense 67 - - 67 Royalty expense amortization 7 - - 7 Provision for contract losses (11 ) - - (11 ) Segment Assets 8,261 3,891 - 12,152 Expenditures for segment assets 23 2,065 - 2,088 (1) The Applied Optics Center was acquired on November 3, 2014. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Dec. 27, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 5 – Intangible Assets On November 3, 2014, Optex Systems, Inc. purchased the assets comprising L-3 Communications’ Applied Optics Products Line (“Purchased Assets”) in exchange for $1,013.1 thousand and the assumption of approximately $270.7 thousand of liabilities (see Note 3 “Purchase of Applied Optics Product Line”). Optex Systems, Inc. has allocated the consideration for the acquisition of the purchased assets among tangible and intangible assets acquired and liabilities assumed based upon their fair values as of the acquisition date. Assets that met the criteria for recognition as intangible assets apart from goodwill were also valued at their fair values. The purchase price was assigned to the acquired interest in the assets and liabilities of Optex Systems Holdings as of November 3, 2014 as follows: (Thousands) Assets: Current assets, consisting primarily of inventory of $940.1 thousand and prepaid assets of $47.1 thousand $ 987.2 Identifiable intangible assets 342.2 Other non-current assets, principally property and equipment 2,064.7 Total assets $ 3,394.1 Liabilities: Current liabilities, consisting of accounts payable of $119.4 thousand and accrued liabilities of $151.3 thousand $ (270.7 ) Acquired net assets $ 3,123.4 The fair values of the intangible assets as of the asset transfer date consisted primarily of $342.2 thousand of undelivered customer order backlog with contracted delivery dates that is essentially fulfilled as of quarter ended June 28, 2015. The amortization of identifiable intangible assets associated with the acquisition will be amortized on a straight line basis over the six month period beginning on December 29, 2014 at a rate of $57.0 thousand per month pursuant to the expected order deliveries. The intangible amortization is allocable to operating expenses as manufacturing cost of sales and general and administrative expenses at a rate of $145.5 thousand and $25.5 thousand per quarter, respectively, through quarter ending June 28, 2015. The identifiable intangible assets are amortized over 15 years for income tax purposes. There were no unamortized intangible assets or amortization expenses incurred in the three months ending December 27, 2015. As of three months ending December 28, 2014 the total unamortized balance of intangible assets was $342.2 thousand. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 6 - Commitments and Contingencies Rental Payments under Non-cancellable Operating Leases Optex Systems Holdings leases its office and manufacturing facilities for the Optex Systems, Inc., Richardson address and the Applied Optics Center Dallas address, under non-cancellable operating leases. The leased facility under Optex Systems Inc. at 1420 Presidential Drive, Richardson, Texas consists of 49,100 square feet of space and expires March 31, 2021. Pursuant to the terms of the most recent amendment to the Richardson site facilities lease, there was no base rent payment due from January 1, 2014 through March 31, 2014, with payments beginning April 2014, and annual rental payment inflationary increases between 3.4% and 4.8% occurring each year beginning in 2016. As of December 27, 2015 the unamortized deferred rent was $107 thousand as compared to $106 thousand as of September 27, 2015. Deferred rent expense is amortized monthly over the life of the lease. The leased facility under the Applied Optics Center at 9839 and 9827 Chartwell Drive, Dallas, Texas, consists of 56,633 square feet of space at the premises. The term of the lease expires September 30, 2016, and there are four renewal options available to the tenant, each with a renewal term duration of five years. Approximately 12,000 square feet covered under the Applied Optics Center lease, is subleased under a separate Memorandum of Understanding dated October 27, 2014, to L-3 Communications Mobile Vision Inc. The sublease term is for November, 2014 through September, 2016. Optex expects to begin negotiations for lease renewal with L-3 Communications Mobile Vision Inc. during the next 90 days. The sublease is treated as a reduction in the company facilities rental and CAM expenses in the statement of operations. As of December 27, 2015, the remaining minimum lease and estimated adjusted common area maintenance (CAM) payments under the non-cancelable office and facility space leases are as follows: Non-cancellable Operating Leases Minimum Payments (Thousands) Optex Systems Applied Optics Center Applied Optics Center Fiscal Year Lease CAM Lease CAM Lease CAM Total 2016 $ 196 $ 65 $ 215 $ 60 $ (46 ) $ (24 ) $ 466 2017 266 88 - - - - 354 2018 271 90 - - - - 361 2019 281 92 - - - - 373 2020 291 94 - - - - 385 2021 148 48 - - - - 196 Total minimum lease payments $ 1,453 $ 477 $ 215 $ 60 $ (46 ) $ (24 ) $ 2,135 Total facilities rental and CAM expense for both facility lease agreements as of the three months ended December 27, 2015 was $154 thousand. Total expense under facility lease agreements as of the three months ended December 28, 2014 was $104 thousand. |
Prepaid Royalties
Prepaid Royalties | 3 Months Ended |
Dec. 27, 2015 | |
Prepaid Expense, Noncurrent [Abstract] | |
Prepaid Royalties Disclosure | Note 7 – Prepaid Royalties Prepaid royalties represent payments made for the purchase of non-transferable, non-exclusive patent rights associated with a patent license. The patent license allows for development of current and future products in our digital line of periscopes. We completed our first international shipment utilizing this technology in 2014 and are currently in production to support a U.S. Government Foreign Military Sale contract awarded in January 2016. We estimate the commercial life of the patent at seven years. As of December 27, 2015, the balance of the patent license is $112.8 thousand net of accumulated amortization. The royalty expenses for the associated patent license are amortized on a straight line basis starting in fiscal year 2013. The amortized royalty expense for the three months ending December 27, 2015 and December 28, 2014 was $7.5 thousand, respectively. |
Debt Financing
Debt Financing | 3 Months Ended |
Dec. 27, 2015 | |
Debt Disclosure [Abstract] | |
Debt Financing | Note 8 - Debt Financing Related Parties Acquisition by Sileas Corporation on February 20, 2009 On February 20, 2009, Sileas purchased 100% of the equity and debt interest held by Longview, which represented 90% of the Optex Systems, Inc. (Delaware) outstanding equity on that date. Currently, Sileas is the majority owner of Optex Systems Holdings. Sileas Secured Promissory Note Due on May 29, 2021 to Longview Fund, LP As a result of the transaction described above between Sileas and Longview on February 20, 2009, Sileas, the new majority owner of Optex Systems, Inc. (Delaware), executed and delivered to Longview, a Secured Promissory Note in an original principal amount of $13,524,405 and bearing simple interest at the rate of 4% per annum. On June 5, 2015, Sileas Corp. amended its Secured Note, with Longview Fund, L.P., as lender, as follows: • The principal amount was increased to $18,022,329 to reflect the original principal amount plus all accrued and unpaid interest to date, and the Secured Note ceased to bear interest as of that date; • The maturity date of the note was extended to May 29, 2021; and • A conversion feature was added to the Secured Note by which the principal amount of the Secured Note can be converted into our Series A preferred stock, which is owned by Sileas, at the stated value of our Series A preferred stock. Simultaneously therewith, Sileas entered into a Blocker Agreement with us pursuant to which the Series A preferred stock shall not be convertible by Sileas into our common stock, and we shall not effect any conversion of the Series A Stock or otherwise issue any shares of our common stock pursuant hereto, to the extent (but only to the extent) that after giving effect to such conversion or other share issuance hereunder Sileas (together with its affiliates) would beneficially own in excess of 9.99% our common stock. Sileas also agreed to not vote any of its shares of Series A preferred stock in excess of 9.99% of our common stock. Credit Facility — Avidbank (formerly known as Peninsula Bank Business Funding) On May 22, 2014, the Company amended its revolving credit facility with Avidbank. The new renewable revolving maturity date is May 21, 2016. The facility provides up to $1 million in financing against eligible receivables and subject to meeting certain covenants including an asset coverage ratio test for up to two years. The company is in compliance with all debt covenants for the periods presented. The material terms of the amended revolving credit facility are as follows: • The interest rate for all advances shall be the greater of 7.0% and the then in effect prime rate plus 2.5%. The additional minimum interest payment requirement per six month period is $10,000. • Interest shall be paid monthly in arrears. • The loan period is from May 22nd through May 21st of the following year, beginning with the period of May 22, 2014 through May 21, 2015 and a revolving loan maturity date of May 21, 2016, at which time any outstanding advances, and accrued and unpaid interest thereon, will be due and payable. • A renewal fee of $5,000 is due on the one year anniversary of the date of the loan agreement. • The obligations of Optex Systems, Inc. to Avidbank are secured by a first lien on all of its assets (including intellectual property assets should it have any in the future) in favor of Avidbank. • The facility contains customary events of default. Upon the occurrence of an event of default that remains uncured after any applicable cure period, Avidbank’s commitment to make further advances may terminate, and Avidbank would also be entitled to pursue other remedies against Optex Systems, Inc. and the pledged collateral. • Pursuant to a guaranty executed by Optex Systems Holdings in favor of Avidbank, Optex Systems Holdings has guaranteed all obligations of Optex Systems, Inc. to Avidbank. As of December 27, 2015 and September 27, 2015, the outstanding principal and accrued interest balance on the line of credit was $310 thousand and $817 thousand, respectively. For the three months ended December 27, 2015 and December 28, 2014, the total interest expense against the outstanding line of credit balance was $18 thousand and $5 thousand, respectively. Issuance of Convertible Notes On November 17, 2014, Optex Systems Holdings entered into a Subscription Agreement (the “Agreement”) to sell up to $2.1 million principal amount of convertible promissory notes (“Notes”) to several accredited investors (the “Investors”) in a private placement pursuant to which the Investors purchased a series of Notes with an aggregate principal amount of $1,550 thousand. An additional convertible promissory note for $10 thousand was issued to the placement agency in consideration for placement services on the transaction. Optex Systems, Inc. incurred $74 thousand in debt issuance costs, for investment banking, legal and placements fee services, inclusive of the $10 thousand supplemental convertible note issued for placement fees. These costs are reflected in the December 28, 2014 cash flow statement as debt issuance costs and are amortized to interest expense across the term of the notes based on the effective interest method. For the three months ending December 27, 2015 and December 28, 2014 the amortized interest expense related to the debt was zero and $5 thousand, respectively. As of December 27, 2015 the unamortized debt issuance costs were zero. On March 26, 2015, Optex Systems Holdings filed a Certificate of Designation with respect to its Certificate of Incorporation to authorize a series of preferred stock known as “Series B Preferred Stock” under Article FOURTH thereof, with 1010 shares of Series B Preferred Stock issuable thereunder. The amendment was approved by the Company’s Board of Directors under Article FOURTH of its Certificate of Incorporation, as amended. The stated value of each share of Series B Preferred Stock is $1,629, and each share of Series B Preferred Stock is convertible into shares of the Company’s common stock at a conversion price of $0.0025. Effective as of October 7, 2015, the conversion price has been reset to $2.50 per share pursuant to the 1000:1 reverse stock split on common shares. Holders of the Series B Preferred Stock receive preferential rights in the event of liquidation to other classes of preferred and common stock of the Company other than the Company’s Series A Preferred Stock. Additionally, the holders of the Series B Preferred Stock are entitled to vote together with the common stock and the Series A Preferred Stock on an “as-converted” basis. On March 29, 2015, the holders of the Company’s $1,560,000 principal amount of convertible promissory notes, issued on or about November 17, 2014, converted the entire principal amount thereof and all accrued and unpaid interest thereon, into 1,000 shares of the Company’s Series B Preferred Stock. Conversion Feature Derivative Optex Systems Holdings reviewed the convertible note features in relation to the applicable GAAP standards and determined that the conversion option did not meet the criteria as a freestanding financial instrument under the scope of ASC 480-10, as the conversion option was not entered into separately from the notes and was not separately exercisable from the notes. Based on guidance within FASB ASC 815 “ Derivatives and Hedging” “Embedded Derivatives” “Contracts in Entity’s own Equity”, “Fair Value in Financial Instruments”. The derivative liabilities are recognized in the consolidated balance sheet at fair value and marked to market on each conversion and reporting period. The estimated fair value of the derivative liabilities is calculated using the Monte Carlo simulation model and such estimates are revalued at each balance sheet date, with changes in fair value charged to other income or expense. The convertible notes were valued at note issuance as of December 28, 2014 with the following assumptions: · The stock projections are based on the historical volatilities for each date. These were November 17, 2014 – 202% and December 28, 2014 – 197%. The stock price projection was modeled such that it follows a geometric Brownian motion with constant drift and a constant volatility, starting with the market stock price at each valuation date. · Conversion of the notes to stock would occur after the registration requirements were met (within 120 days of issuance) and the stock price exceeded the conversion price by 200% and thereafter on a monthly basis subject to the ownership limits. · Stock Issuances which may trigger reset events would occur annually beginning June 15, 2015. · Default events would occur starting at 0% increasing by 0.25% per month to a maximum of 5%. · Interest payments would be paid in stock at the time of conversion or at maturity. · Discount rates were based on risk-free rates in effect based on the remaining term and date of each valuation and ranged from 0.54% to 0.73%. On March 29, 2015, the holders of the Company’s $1,560,000 principal amount of convertible promissory notes, issued on or about November 17, 2014, converted the entire principal amount thereof and all accrued and unpaid interest thereon, into 1,000 shares of the Company’s Series B Preferred Stock. The recommended fair value for the derivative liabilities related to the convertible notes as of December 27, 2015 was zero. The recommended fair value for the derivative liabilities related to the convertible notes at issuance and as of December 28, 2014 is as follows: Valuation Dates (Thousands) 11/17/2014 11/17/2014 12/28/2014 Investors Brokers Total Notes $ 1,550 $ 10 $ 1,560 Derivative Value 6,929 45 6,127 Change in Fair Value – Derivatives (Mark to Market) - - (847 ) For the three months ending December 27, 2015 the change in fair value for derivatives was zero. For the three months ending December 28, 2014, the change in fair value of $847 thousand was recorded in other expenses as a change in fair value for derivatives. As a result of the March 29, 2015 conversion of convertible notes to preferred Series B shares, the total expense reflected in the consolidated statement of operations related to the notes was zero for the three months ending December 27, 2015. A summary of the total expenses reflected in the consolidated statement of operations related to the convertible notes for the three months ending December 28, 2014 is as follows: (Thousands) Interest Expense for three months ending December 28, 2014: Fair market value of derivatives – $ 6,929 Fair market value of derivatives – 45 Less: Debt discount on convertible notes – (1,550 ) Less: Debt discount on convertible notes – (10 ) Fair value adjustment on convertible notes issued November 17, 2014 $ 5,414 Debt discount amortization 33 Note interest at 12% per annum 23 Debt issuance cost amortization 4 Total Interest Expense (Convertible Notes) $ 5,474 Change in Fair Value – Derivatives gain $ (847 ) As of November 17, 2014, at note inception, the fair market value of the conversion derivative exceeded the value of the convertible notes, thus a debt discount equal to the face value of the notes was established at ($1,560) thousand and the beginning note balance net of the discount was zero. The debt discount is amortized across the life of the notes using the effective interest method. As of December 27, 2015, as a result of the March 29, 2015 conversion of the notes to 1,000 shares of the company’s Preferred Series B stock, the note balance and unamortized debt discount was zero. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Dec. 27, 2015 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | |
Stock Based Compensation | Note 9-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 shares to Optex Systems Holdings officers, directors, employees and to independent contractors who provide services to Optex Systems Holdings as either incentive or nonstatutory stock options determined at the time of grant. As of December 27, 2015, Optex Systems Holdings has granted stock options to officers and employees as follows: Date of Shares Exercise Shares Outstanding Expiration Vesting Grant Granted Price As of 12/27/15 Date Period 03/30/09 1,415 $ 150.00 1,415 03/29/2016 3 years 05/14/09 1,267 $ 150.00 1,072 05/13/2016 4 years 12/09/11 46,070 $ 10.00 35,360 12/08/2018 4 years 12/19/13 25,000 $ 10.00 25,000 12/18/2020 4 years Total 73,752 62,847 Optex Systems Holdings recorded compensation costs for options and shares granted under the plan amounting to for $24 thousand and $67 thousand for the three months ended December 27, 2015 and December 28, 2014, respectively. The $67 thousand of compensation expense recorded during the three months ending December 28, 2014 included $57 thousand of expenses directly attributable to the early vesting of 7,500 shares on the resignation of the Chairman of the Board on November 19, 2014. The following table summarizes the status of Optex Systems Holdings’ aggregate stock options granted under the incentive stock option plan: Number Weighted of Shares Average Weighted Aggregate Remaining Fair Average Value Subject to Exercise Options Value Life (Years) (Thousands) Outstanding as of September 28, 2014 62,912 $ — 3.41 — Granted – 2015 — $ $ Forfeited – 2015 (54 ) $ — Exercised – 2015 — $ — Outstanding as of September 27, 2015 62,858 2.32 $ — Granted – 2016 — $ $ Forfeited – 2016 (11 ) $ — Exercised – 2016 — $ — Outstanding as of December 27, 2015 62,847 2.08 $ — Exercisable as of September 27, 2015 40,266 $ — 1.45 $ — Exercisable as of December 27, 2015 55,347 $ — 1.76 $ — As of December 27, 2015, the intrinsic value of the outstanding options was zero. There were zero options granted in the three months ended December 27, 2015 and December 28, 2014, respectively. The following table summarizes the status of Optex Systems Holdings’ aggregate non-vested shares granted under the 2009 Stock Option Plan: Number of Weighted- Non-vested as of September 28, 2014 42,710 $ 7.58 Non-vested granted — year ended September 27, 2015 — $ — Vested — year ended September 27, 2015 (20,064 ) $ 7.50 Forfeited — year ended September 27, 2015 (54 ) $ — Non-vested as of September 27, 2015 22,592 $ 7.66 Non-vested granted — three months ended December 27, 2015 — — Vested — three months ended December 27, 2015 (15,081 ) Forfeited — three months ended December 27, 2015 (11 ) Non-vested as of December 27, 2015 7,500 As of December 27, 2015, the unrecognized compensation cost for non-vested share based compensation arrangements granted under the stock option plan was approximately $111 thousand. These costs are expected to be recognized on a straight line basis through December 2017. There were no other equity instruments issued to consultants and vendors during the three months ended December 27, 2015 and December 28, 2014. Warrant Agreements Optex Systems Holdings calculates the fair value of warrants issued with debt or preferred stock using the Black-Scholes-Merton valuation method. The total proceeds received in the sale of debt or preferred stock and related warrants are allocated among these financial instruments based on their relative fair values. The discount arising from assigning a portion of the total proceeds to the warrants issued is recognized as interest expense for debt from the date of issuance to the earlier of the maturity date of the debt or the conversion dates using the effective yield method. As of December 27, 2015, Optex Systems Holdings had the following warrants outstanding: Grant Date Warrants Granted Exercise Price Outstanding as of 12/27/15 Expiration Date Term Avidbank — Line of Credit 3/4/2010 1,000 $ 100.00 1,000 3/3/2016 6 years Total Warrants 1,000 1,000 As of December 27, 2015 and September 27, 2015, the outstanding warrants have an unamortized interest balance of zero. The intrinsic value of the outstanding warrants is zero as of December 27, 2015. |
Stockholders Equity
Stockholders Equity | 3 Months Ended |
Dec. 27, 2015 | |
Stockholders Equity Note [Abstract] | |
Stockholder's Equity | Note 10 Stockholders’ Equity Common stock On August 31, 2015, the Optex Systems board of directors approved a reverse stock split of our common stock, in a ratio to be determined by the board of directors, of not less than 1-for-400 nor more than 1-for-1000. On October 6, 2015, 20 calendar days had passed since the mailing to our shareholders of the Definitive Schedule 14C filed on September 11, 2015 regarding the approval by the board of the reverse stock split. On October 7, 2015, we effected a 1-for-1000 reverse split of our common stock. Pursuant to the reverse split, all shareholders of less than 100,000 pre-split common shares, were issued a round lot quantity of 100 common shares post-split. The total share round up quantity related to the reverse split resulted in an additional issue of 139,953 common shares post-split. All share and related option information has been retroactively adjusted to reflect the decrease in shares resulting from this action. Additional funds were reclassified from the common stock to additional paid in capital to reflect the change in total par value represented by the lower common shares after the reverse split. The par value of the common stock outstanding shall remain at $0.001 per share subsequent to the reverse split action. As of September 28, 2014, Optex Systems had 170,914 common shares outstanding. Pursuant to an October 7, 2015 reverse split, there was an additional 139,953 shares issued to preserve round lots of 100 shares for all lot holders holding less than 100,000 pre-split, or 100 post-split shares common shares. An adjustment to common stock par value and additional paid in capital was recorded to reflect the change in values as a result of the reverse split. On May 27, 2015 a private investor converted $10 thousand, or 6 shares of the Series B preferred stock at a stated value of $1,629 per share, for 4,000 shares of common stock. The outstanding common shares as of September 27, 2015 were 314,867. On October 23, 2015 a private investor converted $40 thousand, or 25 shares of the Series B preferred stock at a stated value of $1,629 per share, for 16,031 shares of common stock. On December 8, 2015 Optex Systems issued an additional 247 common shares to certain beneficial holders to correct Depository Trust and Clearing Corporation (DTC) rounding errors occurring from the October 7, 2015 reverse split. The table below reflects the retroactive changes to common shares and equity accounts as a result of the 1000:1 reverse split and subsequent share issues as of December 27, 2015. Common Shares Outstanding Common shares outstanding as of September 28, 2014 pre-split 170,913,943 Common shares after 1000:1 reverse split effective October 7, 2015 170,914 Roundup quantity for holders less than 100 shares 139,953 Common shares outstanding post reverse split as of September 28, 2014 310,867 Conversion of Series B Preferred Shares May 27, 2015 4,000 Common shares outstanding as of September 27, 2015 314,867 Conversion of Series B Preferred Shares October 23, 2015 16,031 Issuance of shares on December 8, 2015 for DTC roundup correction 247 Common shares outstanding as of December 27, 2015 331,145 There were no other issuances of common or preferred stock during the three months ended December 27, 2015 or December 28, 2014. On December 15, 2015, our board of directors and the shareholders holding a majority of our issued and outstanding Common Stock approved an amendment to our Certificate of Incorporation, as amended, to effect a reverse stock split which combines the outstanding shares of our common stock into a lesser number of outstanding shares. Our board of directors will have the sole discretion to effect the amendment and reverse stock split at any time prior to June 30, 2016, and to fix the specific ratio for the combination, provided that the ratio would be not less than 1-for-2 and not more than 1-for-3. Our board of directors will also have discretion to abandon the amendment prior to its effectiveness. We do not have current plans to effect this reverse stock split. Series A preferred stock Optex Systems Holdings has filed a Certificate of Designation with the Secretary of State of the State of Delaware authorizing a series of preferred stock, under its articles of incorporation, known as “Series A preferred stock”. The Certificate of Designation currently sets forth the following terms for the Series A preferred stock: (i) number of authorized shares: 1,027; (ii) per share stated value: $6,860; (iii) liquidation preference per share: stated value; (iv) conversion price: $0.15 per share as adjusted from time to time; and (v) voting rights: votes along with the common stock on an as converted basis with one vote per share (vi) par value $0.001 per share. The conversion price was subsequently reset to $2.50 per share as discussed below. The Series A preferred stock entitles the holders to receive cumulative dividends at the rate of 6% per annum, payable in cash at the discretion of Board of Directors. Each share of preferred stock is immediately convertible into common shares at the option of the holder which entitles the holder to receive the equivalent number of common shares equal to the stated value of the preferred shares divided by the conversion price, which was initially set at $0.15 per share. The dividends were subsequently waived and the price per share was reset to $0.01 on February 21, 2012 as discussed below. On November 17, 2014 an exercise price per share ratchet was triggered by the issuance of convertible notes with a lower conversion price and the exercise price was reset to $0.0025 per common share Effective as of October 7, 2015, the conversion price has been reset to $2.50 per share pursuant to the 1000:1 reverse stock split on common shares. Holders of preferred shares receive preferential rights in the event of liquidation. Additionally, the preferred stock shareholders are entitled to vote together with the common stock on an “as-converted” basis. As of April 1, 2012, the preferred shareholders agreed to waive the past dividends in arrears through June 29, 2014 of $884 thousand in exchange for an increase in the stated value to $6,860. On February 21, 2012, in connection with the purchase of the 5,000 shares of common stock of Optex Systems Holdings by Alpha Capital, the preferred shareholders executed an irrevocable waiver for any and all previously accrued and outstanding dividends and the right to receive any future dividends on the Series A Preferred Stock. The per share conversion price of the Optex Systems Holdings’ Series A Preferred Stock was automatically reset to $0.01 per share in accordance with the reset provision as set forth in paragraph 4(d)(ii) of the Series Designation for the Optex Systems Holdings’ Series A Preferred Stock. The total amount of dividends waived as a result of the February 21, 2012 waiver is $213 thousand. As a result of the executed waiver dated February 21, 2012, there were no dividends in arrears on preferred shares and no future dividends will accrue on the preferred shares. For the three months ending December 27, 2015 and December 28, 2014, there were no preferred dividends booked or preferred dividends payable in arrears. On March 19, 2013, Alpha Capital Anstalt converted 7.29 shares of Series A preferred stock at a stated value of $6,860 into 5,000 shares of its Common Stock for a total converted value of $50,000. On February 11, 2014 and March 24, 2014, Alpha Capital Anstalt converted 7.29 shares of Series A preferred stock at a stated value of $6,860 into 5,000 shares of its Common Stock for a converted value of $50,000 each transaction, respectively. As a result of the conversions, Optex Systems Holdings had 1,001 of preferred shares outstanding as of December 27, 2015 and 1,001 of preferred shares outstanding as of September 27, 2015 respectively. As of April 3, 2015, a majority in interest of the holders of the Series A preferred stock has waived the right to convert its Series A preferred stock into Company common shares until such a time as a reverse stock split of the Company’s stock is effected in sufficient ratio to accommodate full conversion of both Series A and Series B preferred stock from authorized and unissued shares. On October 7, 2015, we effected a 1-for-1000 reverse split of our common stock. Based on the price reset to $2.50 per common share, there are 75.5 shares of preferred stock with a beneficial conversion feature, “in the money”, which are subject to immediate conversion at the discretion of the holder. In the year ending September 27, 2015, Optex Systems Holdings has recognized a $1.5 million adjustment to retained earnings for dividends for the intrinsic value of the beneficial conversion feature for the 75.5 preferred shares issued and not covered by the conversion waiver and blocker agreement. The remaining 926 outstanding Series A preferred shares will become convertible to common shares based on a future event. During the three months ending December 27, 2015 and December 28, 2014 there were no dividends booked to retained earnings related to the beneficial conversion feature on Series A preferred shares. Based on the market price of the common stock of $2.76 as of December 27, 2015, these preferred shares are subject to an additional $0.7 million of retained earnings adjustment for dividends on the earliest potential conversion date as they become convertible. As these shares are subject to the potential for further adjustments to the conversion ratio based on future occurrences, any new conversion price reset may trigger recognition of an additional beneficial conversion feature on occurrence. Series B Preferred Stock On March 26, 2015, Optex Systems Holdings filed a Certificate of Designation with the Secretary of State of the State of Delaware authorizing a series of preferred stock, under its articles of incorporation, known as “Series B preferred stock”. The Certificate of Designation currently sets forth the following terms for the Series B preferred stock: (i) number of authorized shares: 1,010; (ii) per share stated value: $1,629 (iii) liquidation preference per share, other than Series A preferred stock: stated value; (iv) conversion price: $0.0025 per share as adjusted from time to time; (v) voting rights: votes along with the common stock on an as converted basis with one vote per share; and (vi) par value of $0.001 per share. Effective as of October 7, 2015, the conversion price has been reset to $2.50 per share pursuant to the 1000:1 reverse stock split on common shares. On June 28, 2015, the holders of the Company’s $1,560,000 principal amount of convertible promissory notes, issued on or about November 17, 2014, converted the entire principal amount thereof and all accrued and unpaid interest thereon, into 1,000 shares of the Company’s Series B Preferred Stock. Each share of preferred stock is immediately convertible into common shares at the option of the holder which entitles the holder to receive the equivalent number of common shares equal to the stated value of the preferred shares divided by the conversion price, which is initially set at $0.0025 per share and was reset to $2.50 per share pursuant to the October 7, 2015 1000:1 reverse stock split. On May 27, 2015 a private investor converted $10 thousand, or 6 shares of the Series B preferred stock at a stated value of $1,629 per share, for 4,000 shares of common stock. As of September 27, 2015, there were 994 shares of Series B preferred shares outstanding. On October 23, 2015 a private investor converted $40 thousand, or 25 shares of the Series B preferred stock at a stated value of $1,629 per share, for 16,031 shares of common stock. As of December 27, 2015, there were 969 shares of Series B preferred shares outstanding. At the time of issuance, the market value of the common stock was $10.00 ($0.01 pre-split). As the conversion rate of $2.50 ($0.0025 pre-split) was below the market price, the issued preferred series B stock contained a beneficial conversion feature. As the series B preferred stock is immediately convertible with no stated maturity date, Optex Systems Holdings recognized a retained earnings and additional paid in capital adjustment for the intrinsic value, “in the money portion”, of the conversion options at inception. During the year ending September 27, 2015 Optex Systems Holdings recognized a retained earnings dividends and additional paid in capital adjustment of $4.9 million, which represented the intrinsic value of the options at the June 28, 2015 commitment date. There were no retained earnings dividends booked during the three months ending December 27, 2015 or December 28, 2014 for the beneficial conversion feature on the Series B preferred stock. As these shares are subject to the potential for further adjustments to the conversion ratio based on future occurrences, any new conversion price reset may trigger recognition of an additional beneficial conversion feature on occurrence. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Dec. 27, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 Subsequent Events On January 21, 2016, the Optex Systems Board of Directors Compensation Committee held a meeting and approved the following compensation changes: · A base salary increase of 10% for Danny Schoening, CEO, and Karen Hawkins, CFO. · A bonus payment of $7.5 thousand awarded to Karen Hawkins for 2015 performance. · A $10 thousand monthly director fee for Peter Benz, Chairman, effective for calendar 2016. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Dec. 27, 2015 | |
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 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 Optex Systems Holdings believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and the notes thereto included in the Optex Systems Holdings’ Form 10-K for the year ended September 27, 2015 and other reports filed with the SEC. The accompanying unaudited interim 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. |
Use of Estimates | Use of Estimates: |
Inventory | Inventory: (Thousands) December 27, 2015 September 27, 2015 Raw Material $ 4,129 $ 4,545 Work in Process 2,754 2,456 Finished Goods 572 304 Gross Inventory $ 7,455 $ 7,305 Less: Inventory Reserves (1,592 ) (1,592 ) Net Inventory $ 5,863 $ 5,713 Net inventory increased by $150 thousand during the three months ending December 27, 2015 in support of higher revenues in the current fiscal year. |
Revenue Recognition | Revenue Recognition: The units-of-delivery method recognizes as revenue the contract price of units of a basic production product delivered during a period and as the cost of earned revenue the costs allocable to the delivered units. Costs allocable to undelivered units are reported in the balance sheet as inventory or work in progress. The method is used in circumstances in which an entity produces units of a basic product under production-type contracts in a continuous or sequential production process to buyers’ specifications. Optex Systems Holdings contracts are fixed price production type contracts whereby a defined order quantity is delivered to the customer during a continuous or sequential production process tailored to the buyer’s specifications (build to print). Optex Systems Holdings’ deliveries against these contracts generally occur in monthly increments across fixed delivery periods spanning from 3 to 36 months. Optex Systems Holdings may at times have contracts that allow for invoicing based on achievement of milestone events. In such cases, Optex Systems Inc. recognizes revenue based on the milestone method in accordance with FASB ASC 605-28, as applicable. On October 24, 2011, Optex Systems, Inc. was awarded an $8.0 million contract with General Dynamics Land Systems - Canada that provided for milestone invoices up to a total of $3.9 million. The terms of the contract extend through 2017 during which time we are required to purchase the necessary materials to fulfill the delivery of products required by the contract. Currently, there are no additional contracts providing for milestone payments. In accordance with FASB 605-28, Optex Systems, Inc. recognizes milestone payments as revenue upon completion of a substantive milestone as commensurate with the following guidelines: our performance to achieve the milestone, the milestone relates solely to past performance and is reasonable relative to all of the deliverables and payment terms within the arrangement. Milestones are not considered as substantive if any portion of the associated milestone consideration relates to the remaining deliverables in the unit of accounting. Non-substantive milestone payments are reported as a liability on the balance sheet as Short Term and Long Term Customer Advance Deposits. Pursuant to the contract, all substantive milestones events were completed as of September 30, 2012 and as such, there was zero revenue recognized for milestones in the three months ending December 27, 2015 and December 28, 2014 and no unpaid/invoiced customer deposits related to the completed milestone events, respectively. |
Customer Advance Deposits | Customer Advance Deposits: |
Stock-Based Compensation | Stock-Based Compensation: The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of FASB ASC 505-50 . |
Segment Reporting | Segment Reporting: |
Derivative Financial Instruments | Derivative Financial Instruments: “Derivatives and Hedging” “Embedded Derivatives” “Derivatives and Hedging – Contracts in Entity’s own Equity”. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: |
Intangible Assets | Intangible Assets: Intangible assets with indefinite lives are tested annually for impairment, during the fiscal fourth quarter and between annual periods, if impairment indicators exist, and are written down to fair value as required. |
Income Tax/Deferred Tax | Income Tax/Deferred Tax: |
Earnings per Share | Earnings per Share: The potentially dilutive securities that Optex Systems Holdings has outstanding are convertible preferred stock, convertible debt, stock options and warrants. In computing the dilutive effect of convertible preferred stock or debt, the numerator is adjusted to add back any convertible preferred dividends and interest on convertible debt, and the denominator is increased to assume the conversion of the number of additional common shares. Optex Systems Holdings uses the Treasury Stock Method to compute the dilutive effect of stock options and warrants. Convertible preferred stock, convertible debt, stock options and warrants that are anti-dilutive are excluded from the calculation of diluted earnings per common share. For the three months ended December 27, 2015, respectively, 1001 shares of Series A preferred stock, 969 shares of Series B preferred stock, 62,847 stock options and 1,000 warrants were excluded from the earnings per share calculation as anti-dilutive. For the three months ended December 28, 2014, respectively, 1,001 shares of Series A preferred stock, 447,732 shares of convertible debt, 62,912 stock options and 1,000 warrants were excluded from the earnings per share calculation as anti-dilutive. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 3 Months Ended |
Dec. 27, 2015 | |
Accounting Policies [Abstract] | |
Schedule of inventory | (Thousands) December 27, 2015 September 27, 2015 Raw Material $ 4,129 $ 4,545 Work in Process 2,754 2,456 Finished Goods 572 304 Gross Inventory $ 7,455 $ 7,305 Less: Inventory Reserves (1,592 ) (1,592 ) Net Inventory $ 5,863 $ 5,713 |
Purchase of Applied Optics Pr19
Purchase of Applied Optics Products Line (Tables) | 3 Months Ended |
Dec. 27, 2015 | |
Purchase Of Applied Optics Products Line [Abstract] | |
Schedule of fair value of the acquired assets and assumed liabilities | Fair Values as of Fixed Assets $ 2,064.7 Inventory 940.1 Prepaid Assets/Other 47.1 Liabilities (270.7 ) Net Assets Acquired 2,781.2 Intangible Asset: Customer Contracts/Backlog 342.2 Total Assets Acquired 3,123.4 Less: Cash Consideration (1,013.1 ) Gain on Bargain Purchase $ 2,110.3 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Dec. 27, 2015 | |
Segment Reporting [Abstract] | |
Summary of information for each of the reportable segments profit or loss as well as segment assets for each year | Reportable Segment Financial Information Three months ending December 27, 2015 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 2,167 $ 1,046 $ - $ 3,213 Intersegment revenues - 221 (221 ) - Total Revenue $ 2,167 $ 1,267 $ (221 ) $ 3,213 Interest expense - - 18 $ 18 Depreciation and Amortization 19 67 - 86 Income (Loss) before taxes 15 (242 ) (18 ) (245 ) Other significant noncash items: Allocated home office expense (188 ) 188 - - Stock compensation expense 24 - - 24 Royalty expense amortization 7 - - 7 Provision for contract losses - (15 ) - (15 ) Segment Assets 6,842 3,941 - 10,783 Expenditures for segment assets - - - - Reportable Segment Financial Information Three months ending December 28, 2014 Optex Systems Applied Optics Center Other Consolidated Revenues from external customers $ 1,756 $ 342 $ - $ 2,098 Intersegment revenues - - - - Total Revenue $ 1,756 $ 342 $ - $ 2,098 Interest expense - - 5,479 $ 5,479 Depreciation and Amortization 22 44 - 66 Income (Loss) before taxes (115 ) 1,917 (4,632 ) (2,830 ) Other significant noncash items: Allocated home office expense (67 ) 67 - - (Gain) on purchased asset - AOC - 2,110 - 2,110 Change in Fair Value - Derivatives 847 847 Stock option compensation expense 67 - - 67 Royalty expense amortization 7 - - 7 Provision for contract losses (11 ) - - (11 ) Segment Assets 8,261 3,891 - 12,152 Expenditures for segment assets 23 2,065 - 2,088 (1) The Applied Optics Center was acquired on November 3, 2014. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Dec. 27, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of purchase price was assigned to the acquired interest in the assets and liabilities | (Thousands) Assets: Current assets, consisting primarily of inventory of $940.1 thousand and prepaid assets of $47.1 thousand $ 987.2 Identifiable intangible assets 342.2 Other non-current assets, principally property and equipment 2,064.7 Total assets $ 3,394.1 Liabilities: Current liabilities, consisting of accounts payable of $119.4 thousand and accrued liabilities of $151.3 thousand $ (270.7 ) Acquired net assets $ 3,123.4 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Dec. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of remaining minimum lease payments under the non-cancelable operating leases for equipment, office and facility space | Non-cancellable Operating Leases Minimum Payments (Thousands) Optex Systems Applied Optics Center Applied Optics Center Fiscal Year Lease CAM Lease CAM Lease CAM Total 2016 $ 196 $ 65 $ 215 $ 60 $ (46 ) $ (24 ) $ 466 2017 266 88 - - - - 354 2018 271 90 - - - - 361 2019 281 92 - - - - 373 2020 291 94 - - - - 385 2021 148 48 - - - - 196 Total minimum lease payments $ 1,453 $ 477 $ 215 $ 60 $ (46 ) $ (24 ) $ 2,135 |
Debt Financing (Tables)
Debt Financing (Tables) | 3 Months Ended |
Dec. 27, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of fair value for the derivative liabilities related to the convertible notes | Valuation Dates (Thousands) 11/17/2014 11/17/2014 12/28/2014 Investors Brokers Total Notes $ 1,550 $ 10 $ 1,560 Derivative Value 6,929 45 6,127 Change in Fair Value – Derivatives (Mark to Market) - - (847 ) |
Schedule of the total expenses related to the convertible notes | (Thousands) Interest Expense for three months ending December 28, 2014: Fair market value of derivatives – $ 6,929 Fair market value of derivatives – 45 Less: Debt discount on convertible notes – (1,550 ) Less: Debt discount on convertible notes – (10 ) Fair value adjustment on convertible notes issued November 17, 2014 $ 5,414 Debt discount amortization 33 Note interest at 12% per annum 23 Debt issuance cost amortization 4 Total Interest Expense (Convertible Notes) $ 5,474 Change in Fair Value – Derivatives gain $ (847 ) |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Dec. 27, 2015 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | |
Schedule of stock options granted to officers and employees | Date of Shares Exercise Shares Outstanding Expiration Vesting Grant Granted Price As of 12/27/15 Date Period 03/30/09 1,415 $ 150.00 1,415 03/29/2016 3 years 05/14/09 1,267 $ 150.00 1,072 05/13/2016 4 years 12/09/11 46,070 $ 10.00 35,360 12/08/2018 4 years 12/19/13 25,000 $ 10.00 25,000 12/18/2020 4 years Total 73,752 62,847 |
Schedule of aggregate stock options granted under the incentive stock option plan | Number Weighted of Shares Average Weighted Aggregate Remaining Fair Average Value Subject to Exercise Options Value Life (Years) (Thousands) Outstanding as of September 28, 2014 62,912 $ — 3.41 — Granted – 2015 — $ $ Forfeited – 2015 (54 ) $ — Exercised – 2015 — $ — Outstanding as of September 27, 2015 62,858 2.32 $ — Granted – 2016 — $ $ Forfeited – 2016 (11 ) $ — Exercised – 2016 — $ — Outstanding as of December 27, 2015 62,847 2.08 $ — Exercisable as of September 27, 2015 40,266 $ — 1.45 $ — Exercisable as of December 27, 2015 55,347 $ — 1.76 $ — |
Schedule of aggregate non-vested shares granted under the 2009 Stock Option Plan | Number of Weighted- Non-vested as of September 28, 2014 42,710 $ 7.58 Non-vested granted — year ended September 27, 2015 — $ — Vested — year ended September 27, 2015 (20,064 ) $ 7.50 Forfeited — year ended September 27, 2015 (54 ) $ — Non-vested as of September 27, 2015 22,592 $ 7.66 Non-vested granted — three months ended December 27, 2015 — — Vested — three months ended December 27, 2015 (15,081 ) Forfeited — three months ended December 27, 2015 (11 ) Non-vested as of December 27, 2015 7,500 |
Schedule of warrants outstanding | Grant Date Warrants Granted Exercise Price Outstanding as of 12/27/15 Expiration Date Term Avidbank — Line of Credit 3/4/2010 1,000 $ 100.00 1,000 3/3/2016 6 years Total Warrants 1,000 1,000 |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 3 Months Ended |
Dec. 27, 2015 | |
Stockholders Equity Note [Abstract] | |
Schedule of changes to common shares and equity accounts | Common Shares Outstanding Common shares outstanding as of September 28, 2014 pre-split 170,913,943 Common shares after 1000:1 reverse split effective October 7, 2015 170,914 Roundup quantity for holders less than 100 shares 139,953 Common shares outstanding post reverse split as of September 28, 2014 310,867 Conversion of Series B Preferred Shares May 27, 2015 4,000 Common shares outstanding as of September 27, 2015 314,867 Conversion of Series B Preferred Shares October 23, 2015 16,031 Issuance of shares on December 8, 2015 for DTC roundup correction 247 Common shares outstanding as of December 27, 2015 331,145 |
Organization and Operations (De
Organization and Operations (Detail Textuals) | Oct. 07, 2015 | Dec. 27, 2015ft²Employee | Sep. 28, 2014 |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | |||
Leased facility (in Square Feet) | ft² | 93,733 | ||
Entity Number of Employees | Employee | 85 | ||
Reverse stock split ratio | 1-for-1000 | 1:1000 | 1000:1 |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Thousands | Dec. 27, 2015 | Sep. 27, 2015 |
Accounting Policies [Abstract] | ||
Raw Material | $ 4,129 | $ 4,545 |
Work in Process | 2,754 | 2,456 |
Finished Goods | 572 | 304 |
Gross Inventory | 7,455 | 7,305 |
Less: Inventory Reserves | (1,592) | (1,592) |
Net Inventory | $ 5,863 | $ 5,713 |
Accounting Policies (Detail Tex
Accounting Policies (Detail Textuals) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Oct. 24, 2011 | Dec. 27, 2015 | Dec. 28, 2014 | Sep. 27, 2015 | Nov. 03, 2014 | |
Accounting Policies [Line Items] | |||||
Net increase (decrease) inventory | $ 150,000 | ||||
Method of amortization of intangible assets | straight line basis | ||||
Revenue recognized for milestones | $ 0 | $ 0 | |||
Customer advances and deposits | $ 1,100,000 | ||||
Applied Optics Product Line | |||||
Accounting Policies [Line Items] | |||||
Identified intangible assets acquired | $ 342,200 | ||||
Unamortized Balance | $ 342,200 | ||||
Applied Optics Product Line | Customer backlog | |||||
Accounting Policies [Line Items] | |||||
Finite-lived intangible asset, initial useful life | less than one year | ||||
Unamortized Balance | $ 0 | $ 0 | |||
Minimum | |||||
Accounting Policies [Line Items] | |||||
Delivery period | 3 months | ||||
Maximum | |||||
Accounting Policies [Line Items] | |||||
Delivery period | 36 months | ||||
General Dynamics | |||||
Accounting Policies [Line Items] | |||||
Contract amount in milestone event | $ 8,000,000 | ||||
Maximum amount of invoices for milestone event | $ 3,900,000 | ||||
Series A Preferred Stock | |||||
Accounting Policies [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share, amount | 1,001 | 1,001 | |||
Convertible Debt | |||||
Accounting Policies [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share, amount | 447,732 | ||||
Stock Options | |||||
Accounting Policies [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share, amount | 62,847 | 62,912 | |||
Warrants | |||||
Accounting Policies [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share, amount | 1,000 | 1,000 | |||
Series B Preferred Stock | |||||
Accounting Policies [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share, amount | 969 |
Purchase of Applied Optics Pr29
Purchase of Applied Optics Products Line (Details) - Applied Optics Product Line | Nov. 03, 2014USD ($) |
Business Acquisition [Line Items] | |
Fixed Assets | $ 2,064,700 |
Inventory | 940,100 |
Prepaid Assets/Other | 47,100 |
Liabilities | (270,700) |
Net Assets Acquired | 2,781,200 |
Intangible Asset: | |
Customer Contracts/Backlog | 342,200 |
Total Assets Acquired | 3,123,400 |
Less: Cash Consideration | (1,013,100) |
Gain on Bargain Purchase | $ 2,110,300 |
Purchase of Applied Optics Pr30
Purchase of Applied Optics Products Line (Detail Textuals) - L-3 Communications Applied Optics Products Line ("Purchased Assets") | Nov. 03, 2014USD ($) |
Business Acquisition [Line Items] | |
Purchase price paid | $ 1,013,100 |
Liabilities assumed | 270,700 |
Working capital surplus | 213,100 |
Advance from accredited investors | $ 800,000 |
Approximate percentage of net carrying value of assets for fair value appraisal | 73.00% |
Acquisition-related costs | $ 40,200 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Dec. 27, 2015 | Dec. 28, 2014 | |||
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 3,213 | $ 2,098 | ||
Interest expense | 18 | 5,479 | ||
Depreciation and Amortization | 86 | 66 | ||
Income (Loss) before taxes | $ (245) | $ (2,830) | ||
Other significant noncash items: | ||||
Allocated home office expense | ||||
(Gain) on purchased asset - AOC | $ 2,110 | |||
Change in Fair Value - Derivatives | 847 | |||
Stock compensation expense | $ 24 | 67 | ||
Royalty expense amortization | 7 | 7 | ||
Provision for contract losses | (15) | (11) | ||
Segment Assets | 10,783 | 12,152 | ||
Expenditures for segment assets | 2,088 | |||
Other (non allocated costs and intersegment eliminations) | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | (221) | |||
Interest expense | $ 18 | $ 5,479 | ||
Depreciation and Amortization | ||||
Income (Loss) before taxes | $ (18) | $ (4,632) | ||
Other significant noncash items: | ||||
Allocated home office expense | ||||
(Gain) on purchased asset - AOC | ||||
Change in Fair Value - Derivatives | $ 847 | |||
Stock compensation expense | ||||
Royalty expense amortization | ||||
Provision for contract losses | ||||
Segment Assets | ||||
Expenditures for segment assets | ||||
Optex Systems Richardson | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 2,167 | $ 1,756 | ||
Interest expense | ||||
Depreciation and Amortization | $ 19 | $ 22 | ||
Income (Loss) before taxes | 15 | (115) | ||
Other significant noncash items: | ||||
Allocated home office expense | $ (188) | $ (67) | ||
(Gain) on purchased asset - AOC | ||||
Stock compensation expense | $ 24 | $ 67 | ||
Royalty expense amortization | 7 | 7 | ||
Provision for contract losses | (11) | |||
Segment Assets | 6,842 | 8,261 | ||
Expenditures for segment assets | 23 | |||
Applied Optics Center Dallas | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 1,267 | $ 342 | [1] | |
Interest expense | [1] | |||
Depreciation and Amortization | $ 67 | $ 44 | [1] | |
Income (Loss) before taxes | (242) | 1,917 | [1] | |
Other significant noncash items: | ||||
Allocated home office expense | $ 188 | 67 | [1] | |
(Gain) on purchased asset - AOC | [1] | $ 2,110 | ||
Stock compensation expense | [1] | |||
Royalty expense amortization | [1] | |||
Provision for contract losses | $ (15) | [1] | ||
Segment Assets | 3,941 | $ 3,891 | [1] | |
Expenditures for segment assets | [1] | 2,065 | ||
External customers | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 3,213 | $ 2,098 | ||
Other significant noncash items: | ||||
Expenditures for segment assets | ||||
External customers | Other (non allocated costs and intersegment eliminations) | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | ||||
External customers | Optex Systems Richardson | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 2,167 | $ 1,756 | ||
External customers | Applied Optics Center Dallas | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 1,046 | $ 342 | [1] | |
Intersegment revenues | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | ||||
Intersegment revenues | Other (non allocated costs and intersegment eliminations) | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 221 | |||
Intersegment revenues | Optex Systems Richardson | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | ||||
Intersegment revenues | Applied Optics Center Dallas | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 221 | [1] | ||
[1] | The Applied Optics Center was acquired on November 3, 2014. |
Segment Reporting (Details Text
Segment Reporting (Details Textuals) | 3 Months Ended |
Dec. 27, 2015ft²EmployeeSegments | |
Segment Reporting Information [Line Items] | |
Entity Number of Employees | Employee | 85 |
Number of reportable segments | Segments | 2 |
Optex Systems Richardson | Operating Segments | |
Segment Reporting Information [Line Items] | |
Area of Land | ft² | 49,100 |
Entity Number of Employees | Employee | 51 |
Applied Optics Center Dallas | Operating Segments | |
Segment Reporting Information [Line Items] | |
Area of Land | ft² | 56,633 |
Entity Number of Employees | Employee | 34 |
Area of subleased to L3 Mobile Vision | ft² | 12,000 |
External customers | Applied Optics Center Dallas | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 6.00% |
Domestic Military Customers | Optex Systems Richardson | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 68.00% |
Foreign Military Customers | Optex Systems Richardson | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 29.00% |
General Dynamics | Optex Systems Richardson | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 20.00% |
U S Government | Optex Systems Richardson | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 59.00% |
U S Government | Applied Optics Center Dallas | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 9.00% |
International Parts Supply Co (IPS) | Optex Systems Richardson | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 10.00% |
Other External Customers | Optex Systems Richardson | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 11.00% |
Prime And Subcontracted Military Customers | Optex Systems Richardson | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 97.00% |
Prime And Subcontracted Military Customers | Applied Optics Center Dallas | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 49.00% |
Commercial Customers | Optex Systems Richardson | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 3.00% |
Commercial Customers | Applied Optics Center Dallas | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 33.00% |
Foreign Sales | Applied Optics Center Dallas | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 1.00% |
Military Contracts | Applied Optics Center Dallas | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 17.00% |
L3 Communications | Applied Optics Center Dallas | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 49.00% |
Nightforce Optics, Inc. | Applied Optics Center Dallas | Operating Segments | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 36.00% |
Intangible Assets (Details)
Intangible Assets (Details) - Applied Optics Product Line | Nov. 03, 2014USD ($) |
Assets: | |
Current assets, consisting primarily of inventory of $940.1 thousand and prepaid assets of $47.1 thousand | $ 987,200 |
Identifiable intangible assets | 342,200 |
Other non-current assets, principally property and equipment | 2,064,700 |
Total assets | 3,394,100 |
Liabilities: | |
Current liabilities, consisting of accounts payable of $119.4 thousand and accrued liabilities of $151.3 thousand | (270,700) |
Total Assets Acquired | $ 3,123,400 |
Intangible Assets (Parenthetica
Intangible Assets (Parentheticals) (Details) - Applied Optics Product Line | Nov. 03, 2014USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Inventory | $ 940,100 |
Prepaid assets | 47,100 |
Accounts payable | 119,400 |
Accrued liabilities | $ 151,300 |
Intangible Assets (Detail Textu
Intangible Assets (Detail Textuals) - Applied Optics Product Line | Nov. 03, 2014USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Purchase price paid | $ 1,013,100 |
Liabilities assumed | $ 270,700 |
Intangible Assets (Detail Tex36
Intangible Assets (Detail Textuals 1) - USD ($) | Nov. 03, 2014 | Dec. 27, 2015 | Jun. 28, 2015 | Jun. 27, 2015 | Sep. 27, 2015 | Dec. 28, 2014 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Fair value of intangible assets | $ 0 | |||||
Method of amortization of intangible assets | straight line basis | |||||
Customer backlog | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Fair value of intangible assets | $ 342,200 | |||||
Per month amortization of identifiable intangible assets | $ 57,000 | |||||
Manufacturing cost of sale | Customer backlog | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Amortizable intangible assets | $ 145,500 | |||||
General and administrative expense | Customer backlog | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Amortizable intangible assets | $ 25,500 | |||||
Applied Optics Product Line | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Unamortized Balance | $ 342,200 | |||||
Identifiable intangible assets amortized period | 15 years | |||||
General amortization of intangible assets | $ 0 | |||||
Applied Optics Product Line | Customer backlog | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Unamortized Balance | $ 0 | $ 0 |
Commitments and Contingencies37
Commitments and Contingencies (Details) $ in Thousands | Dec. 27, 2015USD ($) |
Fiscal Year | |
2,016 | $ 466 |
2,017 | 354 |
2,018 | 361 |
2,019 | 373 |
2,020 | 385 |
2,021 | 196 |
Total minimum lease payments | 2,135 |
Optex Systems Richardson | Lease Payments | |
Fiscal Year | |
2,016 | 196 |
2,017 | 266 |
2,018 | 271 |
2,019 | 281 |
2,020 | 291 |
2,021 | 148 |
Total minimum lease payments | 1,453 |
Optex Systems Richardson | CAM Estimate | |
Fiscal Year | |
2,016 | 65 |
2,017 | 88 |
2,018 | 90 |
2,019 | 92 |
2,020 | 94 |
2,021 | 48 |
Total minimum lease payments | 477 |
Applied Optics Center Dallas | Lease Payments | |
Fiscal Year | |
2,016 | $ 215 |
2,017 | |
2,018 | |
2,019 | |
2,020 | |
2,021 | |
Total minimum lease payments | $ 215 |
Applied Optics Center Dallas | CAM Estimate | |
Fiscal Year | |
2,016 | $ 60 |
2,017 | |
2,018 | |
2,019 | |
2,020 | |
2,021 | |
Total minimum lease payments | $ 60 |
Applied Optics Center Dallas Sublease | Lease Payments | |
Fiscal Year | |
2,016 | $ (46) |
2,017 | |
2,018 | |
2,019 | |
2,020 | |
2,021 | |
Total minimum lease payments | $ (46) |
Applied Optics Center Dallas Sublease | CAM Estimate | |
Fiscal Year | |
2,016 | $ (24) |
2,017 | |
2,018 | |
2,019 | |
2,020 | |
2,021 | |
Total minimum lease payments | $ (24) |
Commitments and Contingencies38
Commitments and Contingencies (Details 1) $ in Thousands | 3 Months Ended | ||
Dec. 27, 2015USD ($)ft²Renewal_option | Dec. 28, 2014USD ($) | Sep. 27, 2015USD ($) | |
Operating Leased Assets [Line Items] | |||
Operating leases, rent expense | $ | $ 154 | $ 104 | |
Optex Systems Richardson | |||
Operating Leased Assets [Line Items] | |||
Area of leased properties | 49,100 | ||
Lease expiration date | Mar. 31, 2021 | ||
Unamortized deferred rent | $ | $ 107 | $ 106 | |
Optex Systems Richardson | Minimum | |||
Operating Leased Assets [Line Items] | |||
Annual rental payment inflationary rate | 3.40% | ||
Optex Systems Richardson | Maximum | |||
Operating Leased Assets [Line Items] | |||
Annual rental payment inflationary rate | 4.80% | ||
Applied Optics Center Dallas | |||
Operating Leased Assets [Line Items] | |||
Area of leased properties | 56,633 | ||
Lease expiration date | Sep. 30, 2016 | ||
Number of renewal options | Renewal_option | 4 | ||
Renewal lease term of each operating lease | 5 years | ||
Applied Optics Center Dallas Sublease | |||
Operating Leased Assets [Line Items] | |||
Renewal lease term of each operating lease | 90 days | ||
Area of subleased properties | 12,000 |
Prepaid Royalties (Detail Textu
Prepaid Royalties (Detail Textuals) - USD ($) | 3 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Prepaid Expense, Noncurrent [Abstract] | ||
Commercial useful life of patent | 7 years | |
Patent license net amount | $ 112,800 | |
Royalty expenses amortization method | straight line basis | |
Amortized royalty expense | $ 7,500 | $ 7,500 |
Debt Financing (Details)
Debt Financing (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended |
Nov. 17, 2014 | Dec. 28, 2014 | |
Debt Instrument [Line Items] | ||
Change in Fair Value - Derivatives | $ 847 | |
Convertible promissory note | ||
Debt Instrument [Line Items] | ||
Notes | $ 0 | 1,560 |
Derivative Value | 6,127 | |
Change in Fair Value - Derivatives | $ (847) | |
Convertible promissory note | Investors | ||
Debt Instrument [Line Items] | ||
Notes | 1,550 | |
Derivative Value | $ 6,929 | |
Change in Fair Value - Derivatives | ||
Convertible promissory note | Brokers | ||
Debt Instrument [Line Items] | ||
Notes | $ 10 | |
Derivative Value | $ 45 | |
Change in Fair Value - Derivatives |
Debt Financing (Details 1)
Debt Financing (Details 1) - USD ($) | 1 Months Ended | 3 Months Ended | |
Nov. 17, 2014 | Dec. 28, 2014 | Dec. 27, 2015 | |
Interest Expense for three months ending December 28, 2014: | |||
Change in Fair Value - Derivatives gain | $ 847,000 | ||
Convertible promissory note | |||
Interest Expense for three months ending December 28, 2014: | |||
Fair market value of derivatives | 6,127,000 | ||
Less: Debt discount on convertible notes | $ 0 | ||
Fair value adjustment on convertible notes issued November 17, 2014 | $ 5,414,000 | ||
Debt discount amortization | 33,000 | ||
Note interest at 12% per annum | 23,000 | ||
Debt issuance cost amortization | 4,000 | ||
Total Interest Expense (Convertible Notes) | 5,474,000 | ||
Change in Fair Value - Derivatives gain | $ (847,000) | ||
Convertible promissory note | Investors | |||
Interest Expense for three months ending December 28, 2014: | |||
Fair market value of derivatives | 6,929,000 | ||
Less: Debt discount on convertible notes | $ (1,550,000) | ||
Change in Fair Value - Derivatives gain | |||
Convertible promissory note | Brokers | |||
Interest Expense for three months ending December 28, 2014: | |||
Fair market value of derivatives | $ 45,000 | ||
Less: Debt discount on convertible notes | $ (10,000) | ||
Change in Fair Value - Derivatives gain |
Debt Financing (Detail Textuals
Debt Financing (Detail Textuals) | Feb. 20, 2009 |
Sileas Corp. | |
Debt Instrument [Line Items] | |
Equity method investment, ownership percentage | 100.00% |
Longview Fund, L.P | Optex Systems, Inc. | |
Debt Instrument [Line Items] | |
Equity method investment, ownership percentage | 90.00% |
Debt Financing (Detail Textua43
Debt Financing (Detail Textuals 1) - USD ($) | Jun. 05, 2015 | Feb. 20, 2009 |
Sileas Corp. | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 18,022,329 | |
Maximum beneficial ownership | 9.99% | |
Sileas Corp. | Series A Preferred Stock | ||
Debt Instrument [Line Items] | ||
Maximum beneficial ownership | 9.99% | |
Sileas Corp. | Secured Promissory Note | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 13,524,405 | |
Debt instrument, interest rate during period | 4.00% | |
Maturity date | May 29, 2021 | |
Sileas and Longview | Secured Promissory Note | ||
Debt Instrument [Line Items] | ||
Debt instrument, issuance date | Feb. 20, 2009 |
Debt Financing (Detail Textua44
Debt Financing (Detail Textuals 2) - Revolving credit facility - Avidbank - USD ($) | 1 Months Ended | 3 Months Ended | ||
May. 22, 2014 | Dec. 27, 2015 | Dec. 28, 2014 | Sep. 27, 2015 | |
Debt Instrument [Line Items] | ||||
Line of credit facility, expiration date | May 21, 2016 | |||
Line of credit facility, maximum borrowing capacity | $ 1,000,000 | |||
Line of credit facility, maturity term | 2 years | |||
Line of credit facility, interest rate description | greater of 7.0% and the then in effect prime rate plus 2.5% | |||
Interest rate effective percentage | 7.00% | |||
Line of credit facility, description | The loan period is from May 22nd through May 21st of the following year, beginning with the period of May 22, 2014 through May 21, 2015 and a revolving loan maturity date of May 21, 2016, at which time any outstanding advances, and accrued and unpaid interest thereon, will be due and payable. | |||
Line of credit facility renewal fees due on the one year anniversary of the date of the loan agreement | $ 5,000 | |||
Line of credit facility, amount outstanding | $ 310,000 | $ 817,000 | ||
Line of credit facility, periodic payment, interest | $ 18,000 | $ 5,000 | ||
Prime rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.50% | |||
Minimum | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, periodic payment, interest | $ 10,000 |
Debt Financing (Detail Textua45
Debt Financing (Detail Textuals 3) - USD ($) | Oct. 07, 2015 | Jun. 28, 2015 | Mar. 29, 2015 | Mar. 26, 2015 | Dec. 27, 2015 | Dec. 28, 2014 | Sep. 28, 2014 | Sep. 27, 2015 | May. 27, 2015 | Nov. 17, 2014 |
Debt Instrument [Line Items] | ||||||||||
Stated value of each share | $ 200 | |||||||||
Conversion price (in dollars per share) | $ 2.50 | |||||||||
Reverse stock split ratio | 1-for-1000 | 1:1000 | 1000:1 | |||||||
Series B Preferred Stock | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Preferred Stock, Shares Authorized | 1,010 | 1,010 | 1,010 | |||||||
Stated value of each share | $ 1,629 | $ 1,629 | $ 1,629 | |||||||
Conversion price (in dollars per share) | $ 0.0025 | $ 0.0025 | $ 0.0025 | |||||||
Reverse stock split ratio | 1000:1 | |||||||||
Stock issued upon conversion of debt | 1,000 | 1,000 | ||||||||
Convertible promissory note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 1,560,000 | $ 1,560,000 | $ 1,560,000 | |||||||
Subscription Agreement (the "Agreement") | Convertible promissory note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 2,100 | |||||||||
Debt Issuance Cost | $ 74,000 | |||||||||
Placement Fees | 10,000 | |||||||||
Amortization of Financing Costs | $ 0 | $ 5,000 | ||||||||
Unamortized Debt Issuance Expense | $ 0 | |||||||||
Subscription Agreement (the "Agreement") | Convertible promissory note | Accredited investors | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | 1,550,000 | |||||||||
Subscription Agreement (the "Agreement") | Convertible promissory note | Placement Agency | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 10,000 |
Debt Financing (Detail Textua46
Debt Financing (Detail Textuals 4) - USD ($) | 1 Months Ended | 3 Months Ended | |
Nov. 17, 2014 | Dec. 28, 2014 | Dec. 27, 2015 | |
Debt Instrument [Line Items] | |||
Expected volatility rate | 202.00% | 197.00% | |
Share price | $ 200 | ||
Default event rate | 0.00% | ||
Increasing default rate per month | 0.25% | ||
Change in fair value derivatives | $ 847,000 | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Risk-free rates | 0.54% | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Default event rate | 5.00% | ||
Risk-free rates | 0.73% | ||
Convertible promissory note | |||
Debt Instrument [Line Items] | |||
Change in fair value derivatives | $ (847,000) | ||
Note balance net of discount | $ 0 | $ 1,560,000 | |
Unamortized debt discount | $ 0 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) | 3 Months Ended |
Dec. 27, 2015$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Granted | 73,752 |
Shares Outstanding As of 12/27/15 | 62,847 |
Date of Grant - 03/30/09 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Date of Grant | Mar. 30, 2009 |
Shares Granted | 1,415 |
Exercise Price | $ / shares | $ 150 |
Shares Outstanding As of 12/27/15 | 1,415 |
Expiration Date | Mar. 29, 2016 |
Vesting Period | 3 years |
Date of Grant - 05/14/09 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Date of Grant | May 14, 2009 |
Shares Granted | 1,267 |
Exercise Price | $ / shares | $ 150 |
Shares Outstanding As of 12/27/15 | 1,072 |
Expiration Date | May 13, 2016 |
Vesting Period | 4 years |
Date of Grant - 12/09/11 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Date of Grant | Dec. 9, 2011 |
Shares Granted | 46,070 |
Exercise Price | $ / shares | $ 10 |
Shares Outstanding As of 12/27/15 | 35,360 |
Expiration Date | Dec. 8, 2018 |
Vesting Period | 4 years |
Date of Grant - 12/19/13 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Date of Grant | Dec. 19, 2013 |
Shares Granted | 25,000 |
Exercise Price | $ / shares | $ 10 |
Shares Outstanding As of 12/27/15 | 25,000 |
Expiration Date | Dec. 18, 2020 |
Vesting Period | 4 years |
Stock Based Compensation (Det48
Stock Based Compensation (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Sep. 27, 2015 | Sep. 28, 2014 | |
Number of Shares Remaining Options | ||||
Granted | 73,752 | |||
Outstanding - Ending Balance | 62,847 | |||
Incentive Stock Option Plan | ||||
Number of Shares Remaining Options | ||||
Outstanding - Beginning Balance | 62,858 | 62,912 | ||
Granted | 0 | |||
Forfeited | (11) | (54) | ||
Exercised | ||||
Outstanding - Ending Balance | 62,847 | 62,858 | 62,912 | |
Exercisable | 55,347 | 40,266 | ||
Weighted Average Fair Value | ||||
Outstanding - Beginning Balance | ||||
Granted | ||||
Forfeited | ||||
Exercised | ||||
Outstanding - Ending Balance | ||||
Exercisable | ||||
Weighted Average Life (Years) | ||||
Outstanding | 2 years 29 days | 2 years 3 months 26 days | 3 years 4 months 28 days | |
Exercisable | 1 year 9 months 4 days | 1 year 5 months 12 days | ||
Aggregate Value | ||||
Outstanding - Beginning Balance | ||||
Granted | ||||
Forfeited | ||||
Exercised | ||||
Outstanding - Ending Balance | ||||
Exercisable |
Stock Based Compensation (Det49
Stock Based Compensation (Details 2) - 2009 Stock Option Plan - $ / shares | 3 Months Ended | 12 Months Ended |
Dec. 27, 2015 | Sep. 27, 2015 | |
Number of Non- vested Shares Subject to Options | ||
Non-vested, Beginning balance | 22,592 | 42,710 |
Non-vested granted | ||
Vested | (15,081) | (20,064) |
Forfeited | (11) | (54) |
Non-vested, Ending balance | 7,500 | 22,592 |
Weighted - Average Grant- Date Fair Value | ||
Non-vested Options, Beginning balance | $ 7.66 | $ 7.58 |
Non-vested granted | ||
Vested | $ 7.50 | |
Forfeited | ||
Non-vested Options, Ending balance | $ 7.66 |
Stock Based Compensation (Det50
Stock Based Compensation (Details 3) | 3 Months Ended |
Dec. 27, 2015$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Warrants Granted | 1,000 |
Outstanding as of 12/27/15 | 1,000 |
Avidbank- Line Of Credit | |
Class of Warrant or Right [Line Items] | |
Grant Date | Mar. 4, 2010 |
Warrants Granted | 1,000 |
Exercise price of warrants | $ / shares | $ 100 |
Outstanding as of 12/27/15 | 1,000 |
Expiration Date | Mar. 3, 2016 |
Term | 6 years |
Stock Based Compensation (Det51
Stock Based Compensation (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | Sep. 27, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 24 | $ 67 | |
Number of shares remaining option, granted | 73,752 | ||
Warrants | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unamortized interest balance | $ 0 | $ 0 | |
Intrinsic value of the outstanding warrants | $ 0 | ||
Merrick Okamoto | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Non- vested Shares Subject to Options, Vested | 7,500 | ||
Expenses directly attributable to the early vesting shares | $ 57 | ||
2009 Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized to issue | 75,000 | ||
Number of Non- vested Shares Subject to Options, Vested | 15,081 | 20,064 | |
Unrecognized compensation cost related to non-vested share based compensation | $ 111 | ||
Incentive Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares remaining option, granted | 0 | ||
Intrinsic value of outstanding options | $ 0 |
Stockholders Equity (Details)
Stockholders Equity (Details) - shares | Dec. 08, 2015 | Dec. 27, 2015 | Sep. 27, 2015 | Sep. 28, 2014 |
Class of Stock [Line Items] | ||||
Common shares outstanding post reverse split, Beginning balance | 314,867 | |||
Issuance of shares on December 8, 2015 for DTC roundup correction | 247 | |||
Common stock shares outstanding, Ending balance | 331,145 | 314,867 | ||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Common shares outstanding as of September 28, 2014 pre-split | 170,913,943 | |||
Common shares after 1000:1 reverse split effective October 7, 2015 | 170,914 | |||
Roundup Quantity for holders less than 100 | 139,953 | |||
Common shares outstanding post reverse split, Beginning balance | 314,867 | 310,867 | ||
Conversion of Series B Preferred Shares | 16,031 | 4,000 | ||
Issuance of shares on December 8, 2015 for DTC roundup correction | 247 | |||
Common stock shares outstanding, Ending balance | 331,145 | 314,867 |
Stockholders Equity (Detail Tex
Stockholders Equity (Detail Textuals) - USD ($) | Dec. 15, 2015 | Dec. 08, 2015 | Oct. 07, 2015 | Jun. 28, 2015 | Feb. 11, 2014 | Oct. 23, 2015 | Aug. 31, 2015 | May. 27, 2015 | Mar. 29, 2015 | Mar. 26, 2015 | Mar. 24, 2014 | Mar. 19, 2013 | Feb. 21, 2012 | Dec. 27, 2015 | Sep. 27, 2015 | Sep. 28, 2014 | Dec. 28, 2014 | Nov. 17, 2014 | Apr. 01, 2012 |
Schedule Of Stockholders Equity [Line Items] | |||||||||||||||||||
Stockholders' Equity, Reverse Stock Split | 1-for-1000 | 1:1000 | 1000:1 | ||||||||||||||||
Shareholder with less than pre-split threshold shares | 100,000 | ||||||||||||||||||
Round lot quantity shares issued post split | 100 | ||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Common Stock, Shares, Outstanding | 331,145 | 314,867 | |||||||||||||||||
Amount of preferred stock converted | $ 4,887,000 | ||||||||||||||||||
Issuance of shares for DTC roundup correction | 247 | ||||||||||||||||||
Common stock convertible conversion price | $ 2.50 | ||||||||||||||||||
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 | |||||||||||||||||
Common stock, shares issued | 331,145 | 314,867 | 310,867 | ||||||||||||||||
Conversion price per share reset | $ 2.50 | ||||||||||||||||||
Stated value of each share | $ 200 | ||||||||||||||||||
Convertible promissory note | |||||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||||||||||
Principal amount | $ 1,560,000 | $ 1,560,000 | $ 1,560,000 | ||||||||||||||||
Minimum | |||||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||||||||||
Stockholders' Equity, Reverse Stock Split | 1-for-2 | 1-for-400 | |||||||||||||||||
Maximum | |||||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||||||||||
Stockholders' Equity, Reverse Stock Split | 1-for-3 | 1-for-1000 | |||||||||||||||||
Common Stock | |||||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||||||||||
Common shares after 1000:1 reverse split effective October 7, 2015 | 170,914 | ||||||||||||||||||
Roundup Quantity for holders less than 100 | 139,953 | ||||||||||||||||||
Common Stock, Shares, Outstanding | 331,145 | 314,867 | 310,867 | ||||||||||||||||
Number of preferred stock converted | 16,031 | 4,000 | |||||||||||||||||
Issuance of shares for DTC roundup correction | 247 | ||||||||||||||||||
Stock issued upon conversion of debt | 10,000,000 | ||||||||||||||||||
Exercise of Options | $ 4,000 | ||||||||||||||||||
Stated value of each share | $ 10 | ||||||||||||||||||
Additional retained earnings adjustment for dividends on the earliest potential conversion date | $ 700,000 | ||||||||||||||||||
Series A Preferred Stock | |||||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||||||||||
Preferred Stock, Shares Authorized | 1,027 | ||||||||||||||||||
Preferred Stock, Shares Issued | 1,001 | 1,001 | |||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||||||||||
Preferred stock, shares outstanding | 1,001 | 1,001 | |||||||||||||||||
Conversion price per share as adjusted from time to time of stock | $ 0.15 | ||||||||||||||||||
Conversion price per share reset | $ 0.01 | $ 0.0025 | |||||||||||||||||
Conversion price per share reset pursuant to reverse stock split | $ 2.50 | ||||||||||||||||||
Number of preferred stock with beneficial conversion feature | 75.5 | ||||||||||||||||||
Rate of cumulative dividends | 6.00% | ||||||||||||||||||
Dividends arrears in exchange for increase in stated value | $ 884,000 | ||||||||||||||||||
Increase in stated value of preferred stock | $ 6,860 | $ 6,860 | $ 6,860 | ||||||||||||||||
Dividends, preferred stock | 0 | $ 0 | |||||||||||||||||
Adjustment to retained earnings for dividends for intrinsic value of beneficial conversion feature | $ 1,500,000 | ||||||||||||||||||
Preferred shares issued and not covered by conversion waiver and blocker agreement | 75.5 | ||||||||||||||||||
Outstanding Series A preferred shares convertible to common shares in future event | 926 | ||||||||||||||||||
Stated value of each share | $ 2.76 | ||||||||||||||||||
Series A Preferred Stock | Preferred Stock | |||||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||||||||||
Stock issued upon conversion of debt | 15 | ||||||||||||||||||
Series B Preferred Stock | |||||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||||||||||
Stockholders' Equity, Reverse Stock Split | 1000:1 | ||||||||||||||||||
Number of preferred stock converted | 6 | ||||||||||||||||||
Amount of preferred stock converted | $ 10,000 | ||||||||||||||||||
Common stock issued upon conversion of preferred stock | 4,000 | ||||||||||||||||||
Common stock convertible conversion price | $ 0.0025 | $ 0.0025 | $ 0.0025 | ||||||||||||||||
Stock issued upon conversion of debt | 1,000 | 1,000 | |||||||||||||||||
Preferred Stock, Shares Authorized | 1,010 | ||||||||||||||||||
Preferred Stock, Shares Issued | 969 | 994 | 0 | ||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Preferred stock, shares outstanding | 969 | 994 | 0 | ||||||||||||||||
Conversion price per share as adjusted from time to time of stock | $ 0.0025 | ||||||||||||||||||
Conversion price per share reset | $ 2.50 | ||||||||||||||||||
Conversion price per share reset pursuant to reverse stock split | $ 2.50 | ||||||||||||||||||
Adjustment to retained earnings for dividends for intrinsic value of beneficial conversion feature | $ 4,900,000 | ||||||||||||||||||
Stated value of each share | $ 1,629 | $ 1,629 | $ 1,629 | ||||||||||||||||
Series B Preferred Stock | Private investor | |||||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||||||||||
Number of preferred stock converted | 25 | ||||||||||||||||||
Amount of preferred stock converted | $ 40,000 | ||||||||||||||||||
Common stock issued upon conversion of preferred stock | 16,031 | ||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 1,629 | ||||||||||||||||||
Alpha Capital Anstalt | Series A Preferred Stock | |||||||||||||||||||
Schedule Of Stockholders Equity [Line Items] | |||||||||||||||||||
Number of preferred stock converted | 7.29 | 7.29 | 7.29 | ||||||||||||||||
Amount of preferred stock converted | $ 6,860 | $ 6,860 | $ 6,860 | ||||||||||||||||
Common stock issued upon conversion of preferred stock | 5,000 | 5,000 | 5,000 | ||||||||||||||||
Common stock convertible conversion price | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||||
Conversion of stock, amount issued | $ 50,000 | $ 50,000 | $ 50,000 | ||||||||||||||||
Common stock, shares issued | 5,000 | ||||||||||||||||||
Conversion price per share reset | $ 2.50 | ||||||||||||||||||
Dividends preferred stock waived | $ 213,000 |
Subsequent Events (Detail Textu
Subsequent Events (Detail Textuals) - Subsequent Event | 1 Months Ended |
Jan. 21, 2016USD ($) | |
Danny Schoening | |
Subsequent Event [Line Items] | |
Percentage of increase in base salary | 10.00% |
Karen Hawkins | |
Subsequent Event [Line Items] | |
Percentage of increase in base salary | 10.00% |
Performance bonus payment | $ 7,500 |
Peter Benz | |
Subsequent Event [Line Items] | |
Monthly director fee | $ 10,000 |