Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 27, 2020 | Dec. 10, 2020 | Mar. 27, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Optex Systems Holdings Inc | ||
Entity Central Index Key | 0001397016 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 27, 2020 | ||
Current Fiscal Year End Date | --09-27 | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7,805,249 | ||
Entity Common Stock Shares Outstanding | 8,519,728 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
ASSETS | ||
Cash and Cash Equivalents | $ 4,700 | $ 1,068 |
Accounts Receivable, Net | 2,953 | 3,066 |
Inventory, Net | 8,791 | 10,535 |
Prepaid Expenses | 229 | 348 |
Current Assets | 16,673 | 15,017 |
Property and Equipment, Net | 1,006 | 1,102 |
Other Assets | ||
Deferred Tax Asset | 1,227 | 1,414 |
Right-of-use Asset | 1,416 | |
Security Deposits | 23 | 23 |
Other Assets | 2,666 | 1,437 |
Total Assets | 20,345 | 17,556 |
Current Liabilities | ||
Accounts Payable | 833 | 1,833 |
Operating Lease Liability | 417 | |
Accrued Expenses | 1,077 | 1,180 |
Warrant Liability | 2,544 | |
Accrued Warranty Costs | 83 | 46 |
Credit Facility | 250 | |
Customer Advance Deposits | 1 | 3 |
Current Liabilities | 2,411 | 3,312 |
Credit Facility - Long Term | 377 | |
Operating Lease Liability, net of current portion | 1,037 | |
Warrant Liability - Long Term | 2,036 | |
Total Liabilities | 6,369 | 5,348 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Common Stock - ($0.001 par, 2,000,000,000 authorized, 8,795,869 and 8,436,422 shares issued, and 8,690,136 and 8,436,422 outstanding, respectively) | 9 | 8 |
Treasury Stock (at cost, 105,733 shares and zero shares held, respectively) | (200) | |
Additional Paid in capital | 26,276 | 26,134 |
Accumulated Deficit | (12,109) | (13,934) |
Stockholders' Equity | 13,976 | 12,208 |
Total Liabilities and Stockholders' Equity | $ 20,345 | $ 17,556 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 27, 2020 | Sep. 29, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 8,795,869 | 8,436,422 |
Common stock, shares outstanding | 8,690,136 | 8,436,422 |
Treasury stock, shares | 105,733 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 25,890 | $ 24,530 |
Cost of Sales | 19,802 | 18,277 |
Gross Margin | 6,088 | 6,253 |
General and Administrative Expense | 3,205 | 3,056 |
Operating Income | 2,883 | 3,197 |
(Loss) Gain on Change in Fair Value of Warrants | (508) | 1,344 |
Interest Expense | (19) | (23) |
Other (Expense) Income | (527) | 1,321 |
Income Before Taxes | 2,356 | 4,518 |
Income Tax Expense (Benefit), net | 531 | (1,150) |
Net Income | 1,825 | 5,668 |
Deemed dividends on participating securities | (598) | (1,868) |
Net income applicable to common shareholders | $ 1,227 | $ 3,800 |
Basic income per share | $ 0.14 | $ 0.45 |
Weighted Average Common Shares Outstanding - basic | 8,464,572 | 8,388,794 |
Diluted income per share | $ 0.14 | $ 0.45 |
Weighted Average Common Shares Outstanding - diluted | 8,589,919 | 8,492,884 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Cash Flows from Operating Activities: | ||
Net Income | $ 1,825 | $ 5,668 |
Adjustments to Reconcile Net Income to Net Cash provided by Operating Activities: | ||
Depreciation and Amortization | 248 | 340 |
Loss (Gain) on Change in Fair Value of Warrants | 508 | (1,344) |
Stock Compensation Expense | 197 | 113 |
Deferred Tax | 187 | (1,414) |
(Gain) On Sale of Fixed Assets | (7) | |
Accounts Receivable | 113 | (608) |
Inventory | 1,744 | (2,896) |
Prepaid Expenses | 119 | (243) |
Accounts Payable and Accrued Expenses | (1,065) | 903 |
Federal Income Taxes Payable | (22) | |
Accrued Warranty Costs | 37 | (55) |
Prepaid Royalties | 30 | |
Customer Advance Deposits | (2) | (305) |
Total Adjustments | 2,086 | (5,508) |
Net Cash provided by Operating Activities | 3,911 | 160 |
Cash Flows used in Investing Activities | ||
Purchases of Property and Equipment | (152) | (143) |
Proceeds From Sale of Property and Equipment | 8 | |
Net Cash used in Investing Activities | (152) | (135) |
Cash Flows used in Financing Activities | ||
Cash Paid for Taxes Withheld On Net Settled Restricted Stock Unit Share Issue | (54) | (37) |
Borrowings from payments (to) Credit Facility | 127 | (50) |
Proceeds from Warrant Exercise | 72 | |
Warrant Repurchase | (75) | |
Stock Repurchase | (200) | |
Net Cash used in Financing Activities | (127) | (90) |
Net Increase (Decrease) in Cash and Cash Equivalents | 3,632 | (65) |
Cash and Cash Equivalents at Beginning of Year | 1,068 | 1,133 |
Cash and Cash Equivalents at End of Year | 4,700 | 1,068 |
Non Cash Transactions: | ||
Right-of-Use Asset | 1,811 | |
Operating Lease Liabilities | (1,894) | |
Cash Transactions: | ||
Cash Paid for Taxes | 289 | 360 |
Cash Paid for Interest | $ 19 | $ 23 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Treasury Stock [Member] | Additional Paid in Capital [Member] | Retained Earnings [Member] | Total | |
Beginning balance at Sep. 30, 2018 | $ 8 | $ 25,938 | $ (19,602) | $ 6,344 | ||
Beginning balance, shares at Sep. 30, 2018 | 8,333,353 | |||||
Stock Compensation Expense | 113 | 113 | ||||
Vested restricted stock units issued net of tax withholding | (37) | (37) | ||||
Vested restricted stock units issued net of tax withholding, shares | 55,565 | |||||
Exercise of Warrants for Common Shares at $1.50 | [1] | 120 | 120 | |||
Exercise of Warrants for Common Shares at $1.50, shares | [1] | 47,504 | ||||
Net income | 5,668 | 5,668 | ||||
Ending balance at Sep. 29, 2019 | $ 8 | 26,134 | (13,934) | 12,208 | ||
Ending balance, shares at Sep. 29, 2019 | 8,436,422 | |||||
Stock Compensation Expense | 197 | 197 | ||||
Vested restricted stock units issued net of tax withholding | (54) | (54) | ||||
Vested restricted stock units issued net of tax withholding, shares | 59,447 | |||||
Restricted Board Shares Issued | [2] | $ 1 | (1) | |||
Restricted Board Shares Issued, shares | [2] | 300,000 | ||||
Common Stock Repurchase | [3] | $ (200) | (200) | |||
Common Stock Repurchase, shares | [3] | 105,733 | ||||
Net income | 1,825 | 1,825 | ||||
Ending balance at Sep. 27, 2020 | $ 9 | $ (200) | $ 26,276 | $ (12,109) | $ 13,976 | |
Ending balance, shares at Sep. 27, 2020 | 8,795,869 | 105,733 | ||||
[1] | Exercise of warrants for gross proceeds of $72 thousand and a warrant liability fair market value of $48 thousand as of the exercise date. | |||||
[2] | 100,000 restricted common shares issued to each of the Independent Board of Directors (Rimmy Malhotra, Dale Lehman, Larry Hagenbuch) on April 30, 2020 with 20% vesting as of each January 1 each year over a five-year period. The value of the shares at issue date is $525,000 for 300,000 shares to be amortized over the vesting period. | |||||
[3] | Common shares repurchased in the open market between June 11, 2020 and September 27, 2020 for $200 thousand and held in treasury stock using the cost method. |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | ||
Gross proceeds for exercise of warrants | $ 72 | ||
Fair market value of warranty liability | $ (75) | ||
Restricted common shares issued, value | [1] | ||
Common shares repurchased | [2] | $ 200 | |
Independent Board of Directors [Member] | |||
Restricted common shares issued, shares | 100,000 | ||
Share-based compensation vesting percentage | 20.00% | ||
Share-based compensation vesting period | 5 years | ||
Restricted common shares issued, value | $ 525 | ||
Amortized over the vesting period, shares | 300,000 | ||
Warrant [Member] | |||
Exercise of warrants for common shares | $ 1.50 | ||
Gross proceeds for exercise of warrants | $ 72 | ||
Fair market value of warranty liability | $ (48) | ||
[1] | 100,000 restricted common shares issued to each of the Independent Board of Directors (Rimmy Malhotra, Dale Lehman, Larry Hagenbuch) on April 30, 2020 with 20% vesting as of each January 1 each year over a five-year period. The value of the shares at issue date is $525,000 for 300,000 shares to be amortized over the vesting period. | ||
[2] | Common shares repurchased in the open market between June 11, 2020 and September 27, 2020 for $200 thousand and held in treasury stock using the cost method. |
Organization and Operations
Organization and Operations | 12 Months Ended |
Sep. 27, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | Note 1 — Organization and Operations Optex Systems Holdings, Inc. (“the Company”) manufactures optical sighting systems and assemblies for the U.S. Department of Defense, foreign military applications and commercial markets. Its products are installed on a variety of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, light armored and advanced security vehicles, and have been selected for installation on the Stryker family of vehicles. 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 or commercial customers. Optex Systems Holdings’ operations are based in Dallas and Richardson, Texas in leased facilities comprising 93,967 square feet. As of September 27, 2020, the Company operated with 102 full-time equivalent employees. |
Accounting Policies
Accounting Policies | 12 Months Ended |
Sep. 27, 2020 | |
Accounting Policies [Abstract] | |
Accounting Policies | Note 2 — Accounting Policies Basis of Presentation Principles of Consolidation: Use of Estimates: Segment Reporting: Fiscal Year: Fair Value of Financial Instruments: The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, are carried at, or approximate, fair value as of the reporting date because of their short-term nature. The credit facility is reported at fair value as it bears market rates of interest. Fair values for the Company’s warrant liabilities and derivatives are estimated by utilizing valuation models that consider current and expected stock prices, volatility, dividends, market interest rates, forward yield curves and discount rates. Such amounts and the recognition of such amounts are subject to significant estimates that may change in the future. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value and requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions. The accounting guidance establishes a hierarchy which requires an entity to maximize the use of quoted market prices and minimize the use of unobservable inputs. An asset or liability’s level is based on the lowest level of input that is significant to the fair value measurement. Fair value estimates are reviewed at the origination date and again at each applicable measurement date and interim or annual financial reporting dates, as applicable for the financial instrument, and are based upon certain market assumptions and pertinent information available to management at those times. Each of the measurements is considered a Level 3 measurement based on the availability of market data and inputs and the significance of any unobservable inputs as of the measurement date. The methods and significant inputs and assumptions utilized in estimating the fair value of the warrant liabilities, as well as the respective hierarchy designations are discussed further in Note 12 “Warrant Liabilities”. Cash and Cash Equivalents: Concentration of Credit Risk: Accounts Receivable: As of September 27, 2019, 89% of the accounts receivable balance was comprised of five customers: the U.S. government, 29%, three major defense contractors, 39%, 8% and 7%, and a commercial customer, 6%. As of September 29, 2019, 85% of the accounts receivable balance was comprised of four customers: the U.S. government, 41%, two major defense contractors, 25% and 13%, and a commercial customer, 6%. Inventory: (Thousands) As of 2020 As of 2019 Raw Materials $ 5,506 $ 7,395 Work in Process 3,214 3,599 Finished Goods 638 254 Gross Inventory 9,358 11,248 Less: Inventory Reserves (567 ) (713 ) Net Inventory $ 8,791 $ 10,535 In the twelve months ended September 27, 2020 Optex Systems physically disposed of $202 thousand of obsolete and excess inventories against the reserve balance and made other reserve adjustments of ($56) thousand. Net Inventory decreased by $1.7 million in support of deliveries against several long running contracts during the 2020 fiscal year. Warranty Costs: The table below summarizes the warranty expenses and incurred warranty costs for the twelve months ended September 27, 2020 and September 29, 2019. Years ended 2020 2019 Beginning balance $ 46 $ 101 Incurred costs for warranties satisfied during the period (39 ) (115 ) Warranty Expenses: Warranties reserved for new product shipped during the period (1) 106 86 Change in estimate for pre-existing warranty liabilities (2) (30 ) (26 ) Warranty Expense 76 60 Ending balance $ 83 $ 46 (1) Warranty expenses accrued to cost of sales (based on current year shipments and historical warranty return rate). (2) Changes in estimated warranty liabilities recognized in cost of sales associated with: the period end customer returned warranty backlog, or the actual costs of repaired/replaced warranty units which were shipped to the customer during the year. Property and Equipment: Leases: Leases (Topic 842). Revenue Recognition: The Company has on occasion, outside of the presented periods, received selective contract awards and modifications which included substantive milestone performance obligations, contract modifications, negotiated settlements and financing arrangements which could fall within the scope of FASB ASC 606 revenue recognition guidance on reoccurrence, and as such, the Company has expanded their contract review process to ensure any new contract awards, changes, modifications, financing arrangements or potential negotiated settlements are recorded in compliance to the new standard guidance. During the twelve months ended September 27, 2020, there was $3 thousand of revenue recognized during the period from customer deposit liabilities (deferred contract revenue). During the twelve months ended September 29, 2019 there was $289 thousand of revenue recognized during the period from customer deposit liabilities (deferred contract revenue), and $19 thousand of customer deposits refunded to the customer on order cancellation. As of September 27, 2020, there is $1 thousand in customer deposit liabilities. As of the twelve months ended September 27, 2020, there are no significant deferred contract costs such as sales commissions. Customer Advance Deposits: Government Contracts: Impairment or Disposal of Long-Lived Assets: Accounting for the Impairment or Disposal of Long-lived Assets Stock-Based Compensation Income Tax/Deferred Tax As of September 27, 2020, Optex Systems Inc. has a net carrying value of $1.2 million in deferred tax assets represented by deferred tax assets of $2.2 million and a deferred tax asset valuation allowance of ($1.0) million against those assets. The valuation allowance has been established due to historical losses resulting in a Net Operating Loss Carryforward for each of the fiscal years 2010 through 2016 which may not be fully recognized due to an IRS Section 382 limitation related to a change in control occurring in fiscal year 2018. Due to historical losses, our valuation allowance reserve was set at 100% of the deferred tax asset for the years 2014 through 2018 for a net carrying value of zero. As of September 27, 2020, and September 29, 2019, we reviewed the deferred tax assets and determined it was more likely than not that we would be able to utilize a substantial portion of the deferred tax asset balance against future earnings. Our assumptions were based on the previous three years earnings trend as well as anticipated future earnings expected with the increases in U.S defense and Foreign Military market spending. In the twelve months ended September 29, 2019, The Company released $1.8 million against the valuation allowance which resulted in the recognition of a tax benefit. During the twelve months ended September 27, 2020, we recognized and additional $0.2 million in tax benefits from the deferred tax assets. We will continue to review the deferred tax assets and related valuation reserves in accordance with ASC 740 on an annual basis. Earnings per Share The potentially dilutive securities that Optex Systems Holdings has outstanding are convertible preferred stock, stock options and warrants. In computing the dilutive effect of convertible preferred stock, the numerator is adjusted to add back any convertible preferred dividends, 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, stock options and warrants that are anti-dilutive are excluded from the calculation of diluted earnings per common share. For the twelve months ended September 27, 2020, 182,000 unvested restricted stock units and 300,000 restricted unvested shares (which converts to 125,347 incremental dilutive shares) were included in the diluted earnings per share calculation as dilutive, and 4,125,200 warrants were excluded as anti-dilutive. For the twelve months ended September 29, 2019, 216,500 unvested restricted stock units (which converts to 104,090 incremental dilutive shares) were included in the diluted earnings per share calculation as dilutive, and 4,125,200 warrants and 25,000 stock options were excluded as anti-dilutive. Our outstanding warrants during the twelve months ended September 27, 2020 and September 29, 2019 are participating securities which share dividend distributions and the allocation of any undistributed earnings (deemed dividends) with our common shareholders. During the twelve months ended September 27, 2020 and September 29, 2019, there were no declared dividends and allocated undistributed earnings of $0.6 million and $1.9 million attributable to the participating warrants, respectively. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Sep. 27, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 3 — Recent Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on recurring and nonrecurring fair value measurements in Topic 820. The amendments in the update are effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. As such Optex Systems Holdings is required to adopt these provisions as of the fiscal year beginning on September 28, 2020. Entities are permitted to early adopt any removed or modified disclosure upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until their effective date. We do not anticipate any material impact on our financial statement disclosures as a result of the amendment and are currently assessing the changes in disclosure requirements as applicable for the potential of early adoption. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. As such, Optex Systems Holdings is required to adopt these provisions as of the fiscal year beginning on September 28, 2020. We do not expect any material impact on our consolidated financial statements and results of operations as a result of adopting ASU 2016-13. In February 2016, FASB issued ASU 2016-02— Leases (Topic 842). |
Segment Reporting
Segment Reporting | 12 Months Ended |
Sep. 27, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 4 Segment Reporting The Company’s reportable segments are strategic businesses offering similar products to similar markets and customers; however, the companies are operated and managed separately due to differences in manufacturing technology, equipment, geographic location, and specific product mix. Applied Optics Center was acquired as a unit, and the management at the time of the acquisition was retained. Both the Applied Optics Center and Optex Systems – Richardson operate as reportable segments under the Optex Systems, Inc. corporate umbrella. The Applied Optics Center segment also serves as the key supplier of laser coated filters used in the production of periscope assemblies for the Optex Systems-Richardson (“Optex Systems”) segment. Intersegment sales and transfers are accounted for at annually agreed to pricing rates based on estimated segment product cost, which includes segment direct manufacturing and general and administrative costs, but exclude profits that would apply to third party external customers. Optex Systems (OPX) – Richardson, Texas Optex Systems revenues are primarily in support of prime and subcontracted military customers. Approximately 88% of the Optex Systems segment revenue is comprised of domestic military customers, and 12% is comprised of foreign military customers. Optex Systems segment revenue is derived from the U.S. government, 40%, and two major U.S. defense contractors representing 19% and 6%, of the Company’s consolidated revenue, respectively. Optex Systems is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet. As of September 27, 2020, the Richardson facility operated with 65 full time equivalent employees in a single shift operation. Optex Systems, Richardson serves as the home office for both the Optex Systems and Applied Optics Center segments. Applied Optics Center (AOC) – Dallas, Texas The Applied Optics Center serves primarily domestic U.S. customers. Sales to commercial customers represent 32% and military sales to prime and subcontracted customers represent 68% of the total segment revenue. Approximately 84% of the AOC revenue is derived from external customers and approximately 16% is related to intersegment sales to Optex Systems in support of military contracts. For the twelve months ended September 27, 2020, the AOC segment revenue from the U.S. government, one major commercial customer, and two major defense contractors represent approximately 10%, 9% and 5% of the Company’s consolidated revenue, respectively. The Applied Optics Center is located in Dallas, Texas with leased premises consisting of approximately 44,867 square feet of space. As of September 27, 2020, AOC operated with 37 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. The Company does not allocate interest expense, income taxes or unusual items to segments. Reportable Segment Financial Information Twelve months ended September 27, 2020 Optex Systems Applied Optics Center Dallas Other (non-allocated costs and intersegment eliminations) Consolidated Revenues from external customers $ 17,233 $ 8,657 $ - $ 25,890 Intersegment revenues - 1,689 (1,689 ) - Total Revenue $ 17,233 $ 10,346 $ (1,689 ) $ 25,890 Interest expense $ - $ - $ 19 $ 19 Depreciation and Amortization $ 36 $ 212 $ - $ 248 Income before taxes $ 1,950 $ 1,130 $ (724 ) $ 2,356 Other significant noncash items: Allocated home office expense $ (673 ) $ 673 $ - $ - Loss on change in fair value of warrants $ - $ - $ 508 $ 508 Stock compensation expense $ - $ - $ 197 $ 197 Warranty expense $ - $ 76 $ - $ 76 Segment Assets $ 14,642 $ 5,703 $ - $ 20,345 Expenditures for segment assets $ 102 $ 50 $ - $ 152 Reportable Segment Financial Information Twelve months ended September 29, 2019 Optex Systems Applied Optics Center Other and intersegment eliminations) Consolidated Revenues from external customers $ 16,219 $ 8,311 $ - $ 24,530 Intersegment revenues - 1,712 (1,712 ) - Total Revenue $ 16,219 $ 10,023 $ (1,712 ) $ 24,530 Interest expense $ - $ - $ 23 $ 23 Depreciation and Amortization $ 29 $ 311 $ - $ 340 Income before taxes $ 2,019 $ 1,291 $ 1,208 $ 4,518 Other significant noncash items: Allocated home office expense $ (684 ) $ 684 $ - $ - Gain on change in fair value of warrants $ - $ - $ (1,344 ) $ (1,344 ) Stock option compensation expense $ - $ - $ 113 $ 113 Royalty expense amortization $ 30 $ - $ - $ 30 Warranty Expense $ - $ 60 $ - $ 60 Segment Assets $ 11,570 $ 5,986 $ - $ 17,556 Expenditures for segment assets $ 47 $ 96 $ - $ 143 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Sep. 27, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 5 — Property and Equipment A summary of property and equipment at September 27, 2020 and September 29, 2019 is as follows: (Thousands) Estimated Useful Life Year Ended 2020 Year Ended 2019 Property and Equipment Furniture and Fixtures 3-5 yrs $ 398 $ 378 Machinery and Equipment 5 yrs 3,782 3,650 Leasehold Improvements 7 yrs 276 276 Less: Accumulated Depreciation (3,450 ) (3,202 ) Net Property & Equipment $ 1,006 $ 1,102 Depreciation Expense $ 248 $ 340 During the twelve months ended September 27, 2020, Optex Systems Holdings’ purchased $20 thousand in new furniture and fixtures and $132 thousand in machinery and equipment. During the twelve months ended September 27, 2020, there were no sales or retirements of fixed assets. During the twelve months ended September 29, 2019, Optex Systems Holdings’ purchased $143 thousand in new machinery and equipment. During the twelve months ended September 29, 2019, Optex recorded proceeds on the sale of fixed assets of $8 thousand for the sale of $14 thousand in machinery and equipment with a net book carrying value of $1 thousand generating a gain on sale of $7 thousand. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Sep. 27, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 6 — Accrued Expenses The components of accrued liabilities for the years ended September 27, 2020 and September 29, 2019 are summarized below: Thousands Year Ended Year Ended September 27, 2020 September 29, 2019 Deferred Rent Expense $ - $ 83 Accrued Vacation 469 361 Property Taxes 113 113 Operating Expenses 323 476 Payroll & Payroll Related 172 147 Total Accrued Expenses $ 1,077 $ 1,180 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 27, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7 — Commitments and Contingencies Rental Payments under Non-cancelable Operating Leases Optex Systems Holdings leases its office and manufacturing facilities for the Optex Systems, Inc., Richardson address and the Applied Optics Center Dallas address, as well as certain office equipment under non-cancellable operating leases. The leased facility under Optex Systems Inc. at 1420 Presidential Drive, Richardson, Texas consists of 49,100 square feet of space and expires March 31, 2021. The monthly base rent was $23.0 thousand through June 30, 2019 with annual rental payment inflationary increases between 3.4% and 4.8% occurring April 1, each year. The monthly rent includes approximately $11 thousand for additional Common Area Maintenance (CAM) fees and taxes, to be adjusted annually based on actual expenses incurred by the landlord. The leased facility under the Applied Optics Center at 9839 and 9827 Chartwell Drive, Dallas, Texas, consists of 44,867 square feet of space at the premises. The current lease term will expire on October 31, 2021, with two renewal options available to the tenant, each with a renewal term duration of five years. The monthly base rent was $20.0 thousand through September 30, 2018 and escalates approximately 3% October 1, each year thereafter through 2021. The lease includes a one-month base rent abatement for October 1 through October 31, 2016 for $19.4 thousand. The monthly rent includes approximately $6.7 thousand for additional CAM, to be adjusted annually based on actual expenses incurred by the landlord. Our obligations to make payments under the lease are secured by a $125,000 standby letter of credit. The Company has one non-cancellable office equipment lease with a commencement date of October 1, 2018 and a term of 39 months. The lease cost for the equipment is $1.5 thousand per month from October 1, 2018 through December 31, 2021. Optex Systems Holdings adopted the provisions of ASC Topic 842 “Leases” as of the fiscal year beginning on September 30, 2019. Optex Systems Holdings has two significant operating facilities leases and one equipment lease which extends beyond twelve months and fall under the guidance of ASC Topic 842. Adoption of ASC Topic 842 resulted in the balance sheet recognition of a right-of-use asset of $1.8 million and corresponding operating lease liabilities of approximately $1.9 million as of September 30, 2019, representing the present value of future lease payments for the term of the equipment lease and both segment facility leases and which assumes the exercise of a five year renewal option at the Applied Optics Center as of November 1, 2021. As of September 27, 2020, the remaining minimum base lease and estimated 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 Richardson Applied Optics Center Office Equipment Consolidated Fiscal Year Facility Facility Lease Payments Total Lease Payments Total Variable CAM Estimate 2021 Base year lease 148 263 18 429 149 2022 Base year lease - 22 5 27 7 Total base lease payments $ 148 $ 285 $ 23 $ 456 $ 156 2022-2026 Lease option-assumed exercise (2) - 1,312 - 1,312 Total lease payments $ 148 $ 1,597 $ 23 $ 1,768 Imputed interest on lease payments (1) (3 ) (310 ) (1 ) (314 ) Total Operating Lease Liability (3) $ 145 $ 1,287 $ 22 $ 1,454 Right-of-use Asset $ 126 $ 1,268 $ 22 $ 1,416 (1) Assumes a discount borrowing rate of 7.5%. (2) Assumes only one of the two five-year options are exercised. The Company believes it is reasonably certain to exercise the first of the two five-year options but believes the additional five-year option falls outside of the range of reasonable predictability. (3) Short-term and Long-term portion of Operating Lease Liability is $417 thousand and $1,037 thousand, respectively. Total expense under both facility lease agreements for the twelve months ended September 27, 2020 was $735 thousand. Total expense under both facility lease agreements as of the twelve months ended September 29, 2019 was $700 thousand. Total office equipment rentals included in operating expenses was $22 thousand for the twelve months ended September 27, 2020 and $15 thousand for the twelve months ended September 29, 2019. As of September 29, 2019, there was $83 thousand in unamortized deferred rent included in accrued liabilities which was reclassed to the right of use asset on adoption of ASC842. |
Debt Financing
Debt Financing | 12 Months Ended |
Sep. 27, 2020 | |
Debt Disclosure [Abstract] | |
Debt Financing | Note 8 — Debt Financing Credit Facility — Avidbank The Company amended its revolving credit facility with Avidbank pursuant to a Seventh Amendment to Amended and Restated Loan Agreement, dated as of April 5, 2018. The amended revolving maturity date was April 21, 2020. The facility provided for up to $2.2 million in financing against eligible receivables and was subject to meeting certain covenants including an asset coverage ratio test for up to twenty months. The material terms of the amended revolving credit facility were as follows: ● The interest rate for all advances was the then in effect prime rate plus 2.5% and is subject to a minimum interest payment requirement per six-month period of $10,000. ● Interest was paid monthly in arrears. ● The loan period was from April 5, 2018 through April 21, 2020 at which time any outstanding advances, and accrued and unpaid interest thereon, would be due and payable. ● The obligations of Optex Systems, Inc. to Avidbank were 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 contained customary events of default. Upon the occurrence of an event of default that remained uncured after any applicable cure period, Avidbank’s commitment to make further advances would 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 had guaranteed all obligations of Optex Systems, Inc. to Avidbank. ● On April 21, 2018 and each anniversary thereof for so long as the Revolving Facility was in effect, the Company would pay a facility fee equal to one half of one percent (0.5%) of the Revolving Line. ● The Company could maintain accounts at third party banks so long as the total in those other bank accounts does not exceed 20% of the total on deposit at Avidbank, and it would remit to Avidbank monthly statements for all of those accounts within 30 days of the end of each month. In order to meet the security requirement under the lease, we entered into a letter of credit with Avidbank on October 17, 2016 in the amount of $250,000, which expires on October 17, 2019 and is renewable by us for successive one year periods unless the bank notifies us no later than 60 days prior to the end of the initial or any extended term that it shall not renew the letter of credit. Effective as of October 31, 2019 the letter of credit was reduced to $125,000 pursuant to the lease terms. As of September 29, 2019, the outstanding principal balance on the line of credit was $250 thousand. For the year ended September 29, 2019 the total interest expense against the outstanding line of credit balance was $23 thousand. On April 16, 2020, the Company terminated its facility with Avidbank and entered into a new facility with BBVA USA. Credit Facility — BBVA, USA On April 16, 2020, Optex Systems Holdings, Inc. and its subsidiary, Optex Systems, Inc. (the “Borrower”) entered into a line of credit facility (the “Facility”) with BBVA, USA (“BBVA”) The substantive terms are as follows: ● The principal amount of the Facility is $2.25 million. The Facility matures on April 15, 2022. The interest rate is variable based on BBVA’s Prime Rate plus a margin of -0.250%, initially set at 3% at loan origination, and all accrued and unpaid interest is payable monthly in arrears starting on May 15, 2020; and the principal amount is due in full with all accrued and unpaid interest and any other fees on April 15, 2022. ● There are commercially standard covenants including, but not limited to, covenants regarding maintenance of corporate existence, not incurring other indebtedness except trade debt, not changing more than 25% stock ownership of Borrower, and a Fixed Charge Coverage Ratio of 1.25:1, with the Fixed Charge Coverage Ratio defined as (earnings before taxes, amortization, depreciation, amortization and rent expense less cash taxes, distribution, dividends and fair value of warrants) divided by (current maturities on long term debt plus interest expense plus rent expense). As of September 27, 2020, the Company was in compliance with the covenants. ● The Facility contains commercially standard events of default including, but not limited to, not making payments when due; incurring a judgment of $10,000 or more not covered by insurance; not maintaining collateral and the like. ● The Facility is secured by a first lien on all of the assets of Borrower. The outstanding balance on the BBVA facility was $377 thousand as of September 27, 2020. For the year ended September 27, 2020, the total interest expense against the outstanding line of credit balance was $19 thousand. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Sep. 27, 2020 | |
Share-based Payment Arrangement [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 the Company’s officers, directors, employees and to independent contractors who provide services to Optex Systems Holdings as either incentive or non-statutory stock options determined at the time of grant. As of September 29, 2019, there were 25,000 fully vested stock options outstanding at an exercise price of $10 per share and an expiration date of December 18, 2020. During the twelve months ended September 27, 2020, all of the 25,000 outstanding stock options were repurchased at $0.01 per option for a total transaction of $250. There were no new grants of stock options during the twelve months ended September 27, 2020. As of September 27, 2020, there are zero stock options outstanding. Restricted Stock Units issued to Officers and Employees On June 14, 2016, the Compensation Committee (“Committee”) of the Board of Directors of Optex Systems Holdings, Inc. approved the Company’s 2016 Restricted Stock Unit Plan (the “Plan”). The Plan provides for the issuance of stock units (“RSU”) for up to 1,000,000 shares of the Company’s common stock to Optex Systems Holdings officers and employees. Each RSU constitutes a right to receive one share of the Company’s common stock, subject to vesting, which unless otherwise stated in an RSU agreement, shall vest in equal amounts on the first, second and third anniversary of the grant date. Shares of the Company’s common stock underlying the number of vested RSUs will be delivered as soon as practicable after vesting. During the period between grant and vesting, the RSUs may not be transferred, and the grantee has no rights as a shareholder until vesting has occurred. If the grantee’s employment is terminated for any reason (other than following a change in control of the Company or a termination of an officer other than for cause), then any unvested RSUs under the award will automatically terminate and be forfeited. If an officer grantee’s employment is terminated by the Company without cause or by the grantee for good reason, then, provided that the RSUs have not been previously forfeited, the remaining unvested portion of the RSUs will immediately vest as of the officer grantee’s termination date. In the event of a change in control, the Company’s obligations regarding outstanding RSUs shall, on such terms as may be approved by the Committee prior to such event, immediately vest, be assumed by the surviving or continuing company or cancelled in exchange for property (including cash). On June 15, 2016, the Company issued 150,000 RSUs to its Chief Executive Officer, Danny Schoening, and 50,000 RSUs to its Chief Financial Officer, Karen Hawkins. The RSUs issued to Mr. Schoening and Ms. Hawkins vest as follows: 34% on January 1, 2017, 33% on January 1, 2018 and 33% on January 1, 2019. The total market value of the restricted stock units based on the share price of $1.85 as of June 15, 2016 is $372 thousand. The cost of the shares is amortized on a straight-line basis across the vesting periods. These restricted stock units were fully vested as of January 1, 2019. On June 15, 2017, the Company issued 50,000 RSUs to its Applied Optics Center General Manager and new board member, Bill Bates. Pursuant to the RSU agreements the RSUs issued to Mr. Bates will vest as follows: 34% on January 1, 2018, 33% on January 1, 2019 and 33% on January 1, 2020. The total market value of the restricted stock units based on the share price of $0.95 as of June 15, 2016 is $47.5 thousand. The cost of the shares is amortized on a straight-line basis across the vesting periods. As of September 29, 2019, there were 16,500 unvested restricted stock units remaining from the June 15, 2017 issue which vested on January 1, 2020. On January 2, 2019, the Company granted 150,000 and 50,000 restricted stock units with a January 2, 2019 grant date, to Danny Schoening and Karen Hawkins, respectively, vesting as of January 1 each year subsequent to the grant date over a three-year period at a rate of 34% in year one, and 33% each year thereafter. The stock price at grant date was $1.32 per share. The Company is amortizing the grant date fair market value of $264 thousand to stock compensation expense on a straight-line basis across the three-year vesting period beginning on January 2, 2019. On February 17, 2020, the Company granted 50,000 restricted stock units to Bill Bates, General Manager of the Applied Optics Center. The restricted stock units vest as of January 1 each year subsequent to the grant date over a three-year period at a rate of 34% in year one, and 33% each year thereafter. The stock price at grant date was $2.13 per share. The Company will amortize the grant date fair market value of $107 thousand to stock compensation expense on a straight-line basis across the three-year vesting period beginning on February 17, 2020. The following table summarizes the status of Optex Systems Holdings’ aggregate non-vested restricted stock units granted under the Company’s 2016 Restricted Stock Unit Plan: Outstanding Wgt Unvested as of September 30, 2018 99,000 $ 1.56 Granted 200,000 $ 1.32 Vested (82,500 ) $ 1.68 Unvested as of September 29, 2019 216,500 $ 1.29 Granted 50,000 $ 2.13 Vested (84,500 ) $ 1.25 Unvested as of September 27, 2020 182,000 $ 1.54 On January 7, 2019, the Company issued 55,565 common shares to three directors and officers, net of tax withholding of $37 thousand, in settlement of 82,500 restricted stock units which vested on January 1, 2019. On January 7, 2020, the Company issued 59,447 common shares to one director and two officers, net of tax withholding of $54 thousand, in settlement of 84,500 restricted stock units which vested on January 1, 2020. Restricted Shares Issued to Independent Board Members On April 30, 2020, the Optex Systems Holdings, Inc. Board of Directors held a meeting and voted to increase the annual board compensation for the three independent directors from $22,000 to $36,000 with an effective date of January 1, 2020, in addition to granting 100,000 restricted shares to each independent director which shall vest at a rate of 20% per year (20,000 shares) each January 1 st Stock Based Compensation Expense Equity compensation is amortized based on a straight-line basis across the vesting or service period as applicable. The recorded compensation costs for restricted shares granted and restricted stock units awarded as well as the unrecognized compensation costs are summarized in the table below: Stock Compensation (thousands) Recognized Compensation Expense Unrecognized Compensation Expense Twelve months ended As of year ended September 27, 2020 September 29, 2019 September 27, 2020 September 29, 2019 Restricted Shares $ 79 $ — $ 446 $ — Restricted Stock Units 118 113 188 200 Total Stock Compensation $ 197 $ 113 $ 634 $ 200 The unrecognized compensation expense for restricted shares and restricted stock units is expected to be recognized over a weighted-average period of 4.25 years and 1.67 years, respectively. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Sep. 27, 2020 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | Note 10 — Defined Contribution Plan The Company sponsors a defined contribution pension plan under Section 401(k) of the Internal Revenue Code for all employees. Company contributions are voluntary and are determined annually at the discretion of the Board of Directors at the beginning of each fiscal year. For the fiscal years ended September 29, 2019 and September 30, 2018, the Company offered a qualified automatic contribution arrangement (QACA) with a 100% match of the first 1% and 50% matching of the next 5% and a 2 year vesting requirement. The Company’s contribution expense for the fiscal years ended September 27, 2020 and September 29, 2019 were $165 thousand and $153 thousand, respectively. |
Stockholders Equity
Stockholders Equity | 12 Months Ended |
Sep. 27, 2020 | |
Equity [Abstract] | |
Stockholders Equity | Note 11 — Stockholders Equity Dividends There were no dividends declared or paid during the twelve months ended September 27, 2020 and September 29, 2019. Common stock During the twelve months ended September 29, 2019, there were 55,565 common shares issued, net of tax withholding, in settlement of 82,500 restricted stock units which vested on January 1, 2019. On June 12, 2019, we issued 47,504 common shares for the exercise of 47,504 warrants at an exercise price of $1.50 per share. During the twelve months ended September 27, 2020, there were 59,447 common shares issued, net of tax withholding, in settlement of 84,500 restricted stock units which vested on January 1 2020. On April 30, 2020, there were 300,000 restricted shares issued to independent board members. There were no other issuances of common stock during the twelve months ended September 29, 2019. On June 8, 2020 the Company announced authorization for a $1 million stock repurchase program. The shares authorized to be repurchased under the new repurchase program may be purchased from time to time at prevailing market prices, through open market or in negotiated transactions, depending upon market conditions and subject to Rule 10b-18 as promulgated by the SEC. During the twelve months ended September 27, 2020, there were 105,733 common shares repurchased through the program at a cost of $200 thousand. The shares have been returned to the Treasury. A summary of the purchases under the plan follows: Fiscal Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plan Maximum dollar value that may yet be purchased under the plan May 24, 2020 through June 28, 2020 34,243 $ 1.84 34,243 $ 936,857 June 29, 2020 through July 26, 2020 6,806 $ 1.89 6,806 923,994 July 27, 2020 through August 23, 2020 10,688 $ 1.96 10,688 903,062 August 23, 2020 through September 27, 2020 53,996 $ 1.90 53,996 800,397 Total shares repurchased as of period ended September 27, 2020 105,733 $ 1.89 105,733 $ 800,397 Plan announced on June 8, 2020 for purchases up to $1 million at prevailing market prices. As of September 29, 2019, and September 27, 2020, the total outstanding common shares were 8,436,422 and 8,690,136, respectively. As of and September 27, 2020, there are 105,733 shares held in Treasury Stock. From September 28 through December 10, 2020 the company has repurchased 170,408 shares for $347 thousand dollars. Warrants On August 26, 2016, Optex Systems Holdings Inc. issued 4,323,135 warrants to new shareholders and the underwriter, in connection with a public share offering. The warrants entitle the holder to purchase one share of our common stock at an exercise price equal to $1.50 per share at any time on or after August 26, 2016 (the “Initial Exercise Date”) and on or prior to the close of business on August 26, 2021 (the “Termination Date”). Pursuant to a warrant agreement between Optex Systems Inc. and Equity Stock Transfer, LLC, as warrant agent, the warrants will be issued in book-entry form and shall initially be represented only by one or more global warrants deposited with the warrant agent, as custodian on behalf of The Depository Trust Company, or DTC, and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances, including in the event of a stock splits, stock dividend, extraordinary dividend on or recapitalization, reorganization, merger or consolidation. Under the terms of the warrant agreement, Optex Systems Holdings Inc. has agreed to use their best efforts to maintain the effectiveness of the registration statement and current prospectus relating to common stock issuable upon exercise of the warrants until the expiration of the warrants. During any period Optex fails to have maintained an effective registration statement covering the shares underlying the warrants, the warrant holder may exercise the warrants on a cashless basis. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their warrants and receive shares of common stock, except as set forth in the warrants. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders. Subject to limited exceptions, a holder of warrants will not have the right to exercise any portion of its warrants if the holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99% of the shares of our common stock then outstanding after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that, upon notice to the Company, the holder may increase or decrease the Beneficial Ownership Limitation, provided that in no event shall the Beneficial Ownership Limitation exceed 9.99% and any increase in the Beneficial Ownership Limitation will not be effective until 61 days following notice of such increase from the holder to us. No fractional shares of common stock will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, Optex Systems Holdings Inc. will, upon exercise, round up to the nearest whole number of shares of common stock to be issued to the warrant holder. If multiple warrants are exercised by the holder at the same time, Optex Systems Holdings Inc. will aggregate the number of whole shares issuable upon exercise of all the warrants. There is no established trading market for the warrants. The warrants have been approved for quotation on the OTCQB under ticker symbol “OPXXW”. In the event of a fundamental transaction (as defined in warrant), then the Company or any successor entity will pay at the holder’s option, exercisable at any time concurrently with or within 30 days after the consummation of the fundamental transaction, an amount of cash equal to the value of the remaining unexercised portion of the warrants on the date of consummation of the fundamental transaction as determined in accordance with the Black Scholes option pricing model. As of September 30, 2018, there were 4,260,785 warrants outstanding. During the twelve months ended September 29, 2019, 47,504 of the warrants were exercised. On June 26, 2019, the Company repurchased 88,081 warrants at $0.85 per warrant for a total transaction cost of $74,869. During the twelve months ended September 27, 2020, there were zero warrants exercised or repurchased. As of September 27, 2020, there were 4,125,200 outstanding warrants remaining. |
Warrant Liabilities
Warrant Liabilities | 12 Months Ended |
Sep. 27, 2020 | |
Warrant Liabilities [Abstract] | |
Warrant Liabilities | Note 12 — Warrant Liabilities On August 26, 2016, Optex Systems Holdings, Inc. issued 4,323,135 warrants to new shareholders and the underwriter, in connection with a public share offering. The warrants entitle the holder to purchase one share of our common stock at an exercise price equal to $1.50 per share at any time on or after August 26, 2016, and on or prior to the close of business on August 26, 2021. The Company determined that these warrants are free standing financial instruments that are legally detachable and separately exercisable from the common stock included in the public share offering. Management also determined that the warrants are puttable for cash upon a fundamental transaction at the option of the holder and as such required classification as a liability pursuant to ASC 480 “Distinguishing Liabilities from Equity”. The Company has no plans to consummate a fundamental transaction and does not believe a fundamental transaction is likely to occur during the remaining term of the outstanding warrants. In accordance with the accounting guidance, the outstanding warrants are recognized as a warrant liability on the balance sheet and are measured at their inception date fair value and subsequently re-measured at each reporting period with changes being recorded as a component of other income in the consolidated statement of operations. The fair value of the warrant liabilities presented below were measured using either a BSM valuation model. Significant inputs into the respective model at the inception and reporting period measurement dates are as follows: Issuance date Period ended Period ended Period ended Period ended Valuation Assumptions August 26, 2016 October 1, 2017 September 30, 2018 September 29, 2019 September 27, 2020 Exercise Price(1) $ 1.50 $ 1.50 $ 1.50 $ 1.50 $ 1.50 Warrant Expiration Date (1) 8/26/2021 8/26/2021 8/26/2021 8/26/2021 8/26/2021 Stock Price (2) $ 0.95 $ 0.98 $ 1.71 $ 1.56 $ 1.96 Interest Rate (annual) (3) 1.23 % 1.62 % 2.88 % 1.63 % 0.12 % Volatility (annual) (4) 246.44 % 179.36 % 64.05 % 53.66 % 51.67 % Time to Maturity (Years) 5 3.9 2.9 1.9 0.9 Calculated fair value per share $ 0.93 $ 0.87 $ 0.82 $ 0.49 $ 0.62 ( 1) Based on the terms provided in the warrant agreement to purchase common stock of Optex Systems Holdings, Inc. dated August 26, 2016. (2) Based on the trading value of common stock of Optex Systems Holdings, Inc. as of each presented period ending date. (3) Interest rate for U.S. Treasury Bonds, as of each presented period ending date, as published by the U.S. Federal Reserve. (4) Based on the historical daily volatility of Optex Systems Holdings, Inc. as of each presented period ending date. The warrants outstanding and fair values at each of the respective valuation dates are summarized below: Warrant Liability Warrants Outstanding Fair Value Fair Value Fair Value as of period ended 9/30/2018 4,260,785 $ 0.82 $ 3,500 Reclassification to additional paid in capital upon exercise of warrants (1) (47,504 ) (48 ) Warrant buyback and cancellation (2) (88,081 ) (72 ) Gain on Change in Fair Value of Warrant Liability (1,344 ) Fair Value as of period ended 9/29/2019 4,125,200 $ 0.49 $ 2,036 Loss on Change in Fair Value of Warrant Liability 508 Fair Value as of period ended 9/27/2020 4,125,200 $ 0.62 $ 2,544 (1) Exercise of warrants for gross proceeds of $72 thousand and a warrant liability fair market value of $48 thousand as of the exercise date. (2) Buyback of 88,081 warrants at $0.85 per warrant for a total consideration of ($75) thousand and a warrant liability fair market value of $72 thousand. The warrant liabilities are considered Level 3 liabilities on the fair value hierarchy as the determination of fair value includes various assumptions about of future activities and the Company’s stock prices and historical volatility as inputs. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 27, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13 — Income Taxes The income tax provision for the years ended September 27, 2020 and September 29, 2019 include the following: (Thousands) 2020 2019 Current income tax expense: Current year federal income tax $ 403 $ 279 Prior year tax adjustment (59 ) (15 ) 344 264 Deferred income tax provision (benefit): Federal 187 (1,414 ) Provision for (Benefit from) income taxes, net $ 531 $ (1,150 ) As of September 27, 2020, Optex Systems Inc. has a net carrying value of $1.2 million in deferred tax assets represented by deferred tax assets of $2.2 million and a deferred tax asset valuation allowance of ($1.0) million against those assets. The valuation allowance has been established due to historical losses resulting in a Net Operating Loss Carryforward for each of the fiscal years 2010 through 2016 which may not be fully recognized due to an IRS Section 382 limitation related to a change in control occurring in fiscal year 2018. Due to historical losses, our valuation allowance reserve was set at 100% of the deferred tax asset for the years 2014 through 2018 for a net carrying value of zero. As of September 27, 2020, and September 29, 2019, we reviewed the deferred tax assets and determined it was more likely than not that we would be able to utilize a substantial portion of the deferred tax asset balance against future earnings. Our assumptions were based on the previous three years earnings trend as well as anticipated future earnings expected with the increases in U.S defense and Foreign Military market spending. In the twelve months ended December 29, 2019, The Company released $1.8 million against the valuation allowance which resulted in the recognition of a tax benefit. During the twelve months ended September 27, 2020, we recognized an additional $0.05 million in tax benefits from the deferred tax assets. We will continue to review the deferred tax assets and related valuation reserves in accordance with ASC 740 on an annual basis. The income tax provision for Optex Systems as of September 27, 2020 differs from those computed using the statutory federal tax rate in the respective years due to the following permanent differences: 2020 % 2019 % Tax provision (benefit) at statutory federal rate $ 495 21 $ 949 21 Nondeductible expenses 108 5 (281 ) (6 ) Other 35 1 79 2 Prior year federal income tax adjustment (59 ) (2 ) (15 ) - Change in deferred tax valuation allowance (48 ) (2 ) (1,882 ) (42 ) Provision for (benefit from) income taxes, net $ 531 23 $ (1,150 ) (25 ) Deferred income taxes recorded in the balance sheets result from differences between financial statement and tax reporting of income and deductions. A summary of the composition of the deferred income tax assets (liabilities) follows: (Thousands) Deferred Tax Asset As of As of Stock Compensation $ 64 $ 88 Inventory Reserve 119 150 Unicap 31 39 Deferred Compensation 39 31 Fixed assets (18 ) (13 ) Goodwill Amortization 299 398 Intangible Asset Amortization 170 226 Net Operating Losses 1,362 1,407 Other 124 99 Subtotal $ 2,190 $ 2,425 Valuation allowance (963 ) (1,011 ) Net deferred asset (liability) $ 1,227 $ 1,414 The Company has a net loss carryforward of $6.5 million as of September 27, 2020 as compared to a net loss carryforward of $6.7 million as of September 29, 2019. Due to an IRS section 382 change in control limitation which was effective during the fiscal year ended 2017, it is anticipated that the company may only realize $2.6 million of the current net operating loss carryforward for a net tax benefit of $0.6 million over the next sixteen years. As the result of the application of the FASB ASC 740-10 , During the twelve months ended September 30, 2020 the Company paid $289 thousand in income taxes, and has a net tax refund due related to the fiscal year 2020 tax year of ($20) thousand included in prepaid expenses. During the twelve months ended September 29, 2019 the Company paid $360 thousand in income taxes, and had a net tax refund due related to the fiscal year 2019 tax year of ($75) thousand included in prepaid expenses. There were additional tax adjustments of $59 thousand due to changes from the provisional 2019 rates as compared to the federal income tax report associated with research and development tax credits and other adjustments. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 27, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 — Subsequent Events We entered into an updated employment agreement with Danny Schoening dated October 15, 2020. The term of the agreement commenced as of October 15, 2020 and the current term ends on November 30, 2021. Mr. Schoening’s base salary continues to be $284,645 per annum. Mr. Schoening will be eligible for a performance bonus which is based upon a rolling three-year operating plan adopted by our Board of Directors. The bonus will be tied to operating metrics decided by our board against the three-year plan, and such metrics will be decided annually and tie to the three-year plan. The target bonus equates to 30% of Mr. Schoening’s base salary. Our board will have discretion to alter the performance bonus upward or downward by 20% based on its good faith discretion. The employment agreement events of termination consist of: (i) death or permanent disability of Mr. Schoening; (ii) termination by us for cause (including conviction of a felony, commission of fraudulent acts, willful misconduct by Mr. Schoening, continued failure to perform duties after written notice, violation of securities laws and breach of the employment agreement), (iii) termination without cause by us and (iv) termination by Mr. Schoening for good reason (including breach by us of its obligations under the agreement, the requirement for Mr. Schoening to move more than 100 miles away for his employment without consent, and merger or consolidation that results in more than 66% of the combined voting power of the then outstanding securities of us or our successor changing ownership or a sale of all or substantially all of our assets, without the surviving entity assuming the obligations under the agreement). For a termination by us for cause or upon death or permanent disability of Mr. Schoening, Mr. Schoening shall be paid salary and for a termination due to his death or permanent disability, also any bonus earned through the date of termination. For a termination by us without cause or by Mr. Schoening with good reason, Mr. Schoening shall also be paid six months’ base salary in effect. As of December 10, 2020, there have been a total of 276,141 shares repurchased pursuant to the stock repurchase plan announced on June 8, 2020 for a total of $547 thousand. From September 28, 2020 through December 10, 2020 the company repurchased 170,408 shares for $347 thousand dollars. On December 15, 2020, the Company’s Board of Directors approved executive bonuses for Danny Schoening, CEO, of $48 thousand to be paid in January, 2021, and Karen Hawkins, CFO, of $37 thousand to be paid in December 2020. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Sep. 27, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation: |
Use of Estimates | Use of Estimates: |
Segment Reporting | Segment Reporting: |
Fiscal Year | Fiscal Year: |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, are carried at, or approximate, fair value as of the reporting date because of their short-term nature. The credit facility is reported at fair value as it bears market rates of interest. Fair values for the Company’s warrant liabilities and derivatives are estimated by utilizing valuation models that consider current and expected stock prices, volatility, dividends, market interest rates, forward yield curves and discount rates. Such amounts and the recognition of such amounts are subject to significant estimates that may change in the future. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value and requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions. The accounting guidance establishes a hierarchy which requires an entity to maximize the use of quoted market prices and minimize the use of unobservable inputs. An asset or liability’s level is based on the lowest level of input that is significant to the fair value measurement. Fair value estimates are reviewed at the origination date and again at each applicable measurement date and interim or annual financial reporting dates, as applicable for the financial instrument, and are based upon certain market assumptions and pertinent information available to management at those times. Each of the measurements is considered a Level 3 measurement based on the availability of market data and inputs and the significance of any unobservable inputs as of the measurement date. The methods and significant inputs and assumptions utilized in estimating the fair value of the warrant liabilities, as well as the respective hierarchy designations are discussed further in Note 12 “Warrant Liabilities”. |
Cash and Cash Equivalents | Cash and Cash Equivalents: |
Concentration of Credit Risk | Concentration of Credit Risk: |
Accounts Receivable | Accounts Receivable: As of September 27, 2019, 89% of the accounts receivable balance was comprised of five customers: the U.S. government, 29%, three major defense contractors, 39%, 8% and 7%, and a commercial customer, 6%. As of September 29, 2019, 85% of the accounts receivable balance was comprised of four customers: the U.S. government, 41%, two major defense contractors, 25% and 13%, and a commercial customer, 6%. |
Inventory | Inventory: (Thousands) As of 2020 As of 2019 Raw Materials $ 5,506 $ 7,395 Work in Process 3,214 3,599 Finished Goods 638 254 Gross Inventory 9,358 11,248 Less: Inventory Reserves (567 ) (713 ) Net Inventory $ 8,791 $ 10,535 In the twelve months ended September 27, 2020 Optex Systems physically disposed of $202 thousand of obsolete and excess inventories against the reserve balance and made other reserve adjustments of ($56) thousand. Net Inventory decreased by $1.7 million in support of deliveries against several long running contracts during the 2020 fiscal year. |
Warranty Costs | Warranty Costs: The table below summarizes the warranty expenses and incurred warranty costs for the twelve months ended September 27, 2020 and September 29, 2019. Years ended 2020 2019 Beginning balance $ 46 $ 101 Incurred costs for warranties satisfied during the period (39 ) (115 ) Warranty Expenses: Warranties reserved for new product shipped during the period (1) 106 86 Change in estimate for pre-existing warranty liabilities (2) (30 ) (26 ) Warranty Expense 76 60 Ending balance $ 83 $ 46 (1) Warranty expenses accrued to cost of sales (based on current year shipments and historical warranty return rate). (2) Changes in estimated warranty liabilities recognized in cost of sales associated with: the period end customer returned warranty backlog, or the actual costs of repaired/replaced warranty units which were shipped to the customer during the year. |
Property and Equipment | Property and Equipment: |
Leases | Leases: Leases (Topic 842). |
Revenue Recognition | Revenue Recognition: The Company has on occasion, outside of the presented periods, received selective contract awards and modifications which included substantive milestone performance obligations, contract modifications, negotiated settlements and financing arrangements which could fall within the scope of FASB ASC 606 revenue recognition guidance on reoccurrence, and as such, the Company has expanded their contract review process to ensure any new contract awards, changes, modifications, financing arrangements or potential negotiated settlements are recorded in compliance to the new standard guidance. During the twelve months ended September 27, 2020, there was $3 thousand of revenue recognized during the period from customer deposit liabilities (deferred contract revenue). During the twelve months ended September 29, 2019 there was $289 thousand of revenue recognized during the period from customer deposit liabilities (deferred contract revenue), and $19 thousand of customer deposits refunded to the customer on order cancellation. As of September 27, 2020, there is $1 thousand in customer deposit liabilities. As of the twelve months ended September 27, 2020, there are no significant deferred contract costs such as sales commissions. |
Customer Advance Deposits | Customer Advance Deposits: |
Government Contracts | Government Contracts: |
Impairment or Disposal of Long-Lived Assets | Impairment or Disposal of Long-Lived Assets: Accounting for the Impairment or Disposal of Long-lived Assets |
Stock-Based Compensation | Stock-Based Compensation |
Income Tax/Deferred Tax | Income Tax/Deferred Tax As of September 27, 2020, Optex Systems Inc. has a net carrying value of $1.2 million in deferred tax assets represented by deferred tax assets of $2.2 million and a deferred tax asset valuation allowance of ($1.0) million against those assets. The valuation allowance has been established due to historical losses resulting in a Net Operating Loss Carryforward for each of the fiscal years 2010 through 2016 which may not be fully recognized due to an IRS Section 382 limitation related to a change in control occurring in fiscal year 2018. Due to historical losses, our valuation allowance reserve was set at 100% of the deferred tax asset for the years 2014 through 2018 for a net carrying value of zero. As of September 27, 2020, and September 29, 2019, we reviewed the deferred tax assets and determined it was more likely than not that we would be able to utilize a substantial portion of the deferred tax asset balance against future earnings. Our assumptions were based on the previous three years earnings trend as well as anticipated future earnings expected with the increases in U.S defense and Foreign Military market spending. In the twelve months ended September 29, 2019, The Company released $1.8 million against the valuation allowance which resulted in the recognition of a tax benefit. During the twelve months ended September 27, 2020, we recognized and additional $0.2 million in tax benefits from the deferred tax assets. We will continue to review the deferred tax assets and related valuation reserves in accordance with ASC 740 on an annual basis. |
Earnings Per Share | Earnings per Share The potentially dilutive securities that Optex Systems Holdings has outstanding are convertible preferred stock, stock options and warrants. In computing the dilutive effect of convertible preferred stock, the numerator is adjusted to add back any convertible preferred dividends, 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, stock options and warrants that are anti-dilutive are excluded from the calculation of diluted earnings per common share. For the twelve months ended September 27, 2020, 182,000 unvested restricted stock units and 300,000 restricted unvested shares (which converts to 125,347 incremental dilutive shares) were included in the diluted earnings per share calculation as dilutive, and 4,125,200 warrants were excluded as anti-dilutive. For the twelve months ended September 29, 2019, 216,500 unvested restricted stock units (which converts to 104,090 incremental dilutive shares) were included in the diluted earnings per share calculation as dilutive, and 4,125,200 warrants and 25,000 stock options were excluded as anti-dilutive. Our outstanding warrants during the twelve months ended September 27, 2020 and September 29, 2019 are participating securities which share dividend distributions and the allocation of any undistributed earnings (deemed dividends) with our common shareholders. During the twelve months ended September 27, 2020 and September 29, 2019, there were no declared dividends and allocated undistributed earnings of $0.6 million and $1.9 million attributable to the participating warrants, respectively. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | As of September 27, 2020, and September 29, 2019 inventory included: (Thousands) As of 2020 As of 2019 Raw Materials $ 5,506 $ 7,395 Work in Process 3,214 3,599 Finished Goods 638 254 Gross Inventory 9,358 11,248 Less: Inventory Reserves (567 ) (713 ) Net Inventory $ 8,791 $ 10,535 |
Schedule of Warranty Reserves | The table below summarizes the warranty expenses and incurred warranty costs for the twelve months ended September 27, 2020 and September 29, 2019. Years ended 2020 2019 Beginning balance $ 46 $ 101 Incurred costs for warranties satisfied during the period (39 ) (115 ) Warranty Expenses: Warranties reserved for new product shipped during the period (1) 106 86 Change in estimate for pre-existing warranty liabilities (2) (30 ) (26 ) Warranty Expense 76 60 Ending balance $ 83 $ 46 (1) Warranty expenses accrued to cost of sales (based on current year shipments and historical warranty return rate). (2) Changes in estimated warranty liabilities recognized in cost of sales associated with: the period end customer returned warranty backlog, or the actual costs of repaired/replaced warranty units which were shipped to the customer during the year. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Information for Each of the Reportable Segments Profit or Loss as Well as Segment Assets for Each Year | The financial table below presents the information for each of the reportable segments profit or loss as well as segment assets for each year. The Company does not allocate interest expense, income taxes or unusual items to segments. Reportable Segment Financial Information Twelve months ended September 27, 2020 Optex Systems Applied Optics Center Dallas Other (non-allocated costs and intersegment eliminations) Consolidated Revenues from external customers $ 17,233 $ 8,657 $ - $ 25,890 Intersegment revenues - 1,689 (1,689 ) - Total Revenue $ 17,233 $ 10,346 $ (1,689 ) $ 25,890 Interest expense $ - $ - $ 19 $ 19 Depreciation and Amortization $ 36 $ 212 $ - $ 248 Income before taxes $ 1,950 $ 1,130 $ (724 ) $ 2,356 Other significant noncash items: Allocated home office expense $ (673 ) $ 673 $ - $ - Loss on change in fair value of warrants $ - $ - $ 508 $ 508 Stock compensation expense $ - $ - $ 197 $ 197 Warranty expense $ - $ 76 $ - $ 76 Segment Assets $ 14,642 $ 5,703 $ - $ 20,345 Expenditures for segment assets $ 102 $ 50 $ - $ 152 Reportable Segment Financial Information Twelve months ended September 29, 2019 Optex Systems Applied Optics Center Other and intersegment eliminations) Consolidated Revenues from external customers $ 16,219 $ 8,311 $ - $ 24,530 Intersegment revenues - 1,712 (1,712 ) - Total Revenue $ 16,219 $ 10,023 $ (1,712 ) $ 24,530 Interest expense $ - $ - $ 23 $ 23 Depreciation and Amortization $ 29 $ 311 $ - $ 340 Income before taxes $ 2,019 $ 1,291 $ 1,208 $ 4,518 Other significant noncash items: Allocated home office expense $ (684 ) $ 684 $ - $ - Gain on change in fair value of warrants $ - $ - $ (1,344 ) $ (1,344 ) Stock option compensation expense $ - $ - $ 113 $ 113 Royalty expense amortization $ 30 $ - $ - $ 30 Warranty Expense $ - $ 60 $ - $ 60 Segment Assets $ 11,570 $ 5,986 $ - $ 17,556 Expenditures for segment assets $ 47 $ 96 $ - $ 143 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | A summary of property and equipment at September 27, 2020 and September 29, 2019 is as follows: (Thousands) Estimated Useful Life Year Ended 2020 Year Ended 2019 Property and Equipment Furniture and Fixtures 3-5 yrs $ 398 $ 378 Machinery and Equipment 5 yrs 3,782 3,650 Leasehold Improvements 7 yrs 276 276 Less: Accumulated Depreciation (3,450 ) (3,202 ) Net Property & Equipment $ 1,006 $ 1,102 Depreciation Expense $ 248 $ 340 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | The components of accrued liabilities for the years ended September 27, 2020 and September 29, 2019 are summarized below: Thousands Year Ended Year Ended September 27, 2020 September 29, 2019 Deferred Rent Expense $ - $ 83 Accrued Vacation 469 361 Property Taxes 113 113 Operating Expenses 323 476 Payroll & Payroll Related 172 147 Total Accrued Expenses $ 1,077 $ 1,180 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Non-cancellable Operating Leases Minimum Payments | As of September 27, 2020, the remaining minimum base lease and estimated 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 Richardson Applied Optics Center Office Equipment Consolidated Fiscal Year Facility Facility Lease Payments Total Lease Payments Total Variable CAM Estimate 2021 Base year lease 148 263 18 429 149 2022 Base year lease - 22 5 27 7 Total base lease payments $ 148 $ 285 $ 23 $ 456 $ 156 2022-2026 Lease option-assumed exercise (2) - 1,312 - 1,312 Total lease payments $ 148 $ 1,597 $ 23 $ 1,768 Imputed interest on lease payments (1) (3 ) (310 ) (1 ) (314 ) Total Operating Lease Liability (3) $ 145 $ 1,287 $ 22 $ 1,454 Right-of-use Asset $ 126 $ 1,268 $ 22 $ 1,416 (1) Assumes a discount borrowing rate of 7.5%. (2) Assumes only one of the two five-year options are exercised. The Company believes it is reasonably certain to exercise the first of the two five-year options but believes the additional five-year option falls outside of the range of reasonable predictability. (3) Short-term and Long-term portion of Operating Lease Liability is $417 thousand and $1,037 thousand, respectively. |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Aggregate Non-vested Restricted Stock Units Granted | The following table summarizes the status of Optex Systems Holdings’ aggregate non-vested restricted stock units granted under the Company’s 2016 Restricted Stock Unit Plan: Outstanding Wgt Unvested as of September 30, 2018 99,000 $ 1.56 Granted 200,000 $ 1.32 Vested (82,500 ) $ 1.68 Unvested as of September 29, 2019 216,500 $ 1.29 Granted 50,000 $ 2.13 Vested (84,500 ) $ 1.25 Unvested as of September 27, 2020 182,000 $ 1.54 |
Schedule of Unrecognized Compensation Costs | The recorded compensation costs for restricted shares granted and restricted stock units awarded as well as the unrecognized compensation costs are summarized in the table below: Stock Compensation (thousands) Recognized Compensation Expense Unrecognized Compensation Expense Twelve months ended As of year ended September 27, 2020 September 29, 2019 September 27, 2020 September 29, 2019 Restricted Shares $ 79 $ — $ 446 $ — Restricted Stock Units 118 113 188 200 Total Stock Compensation $ 197 $ 113 $ 634 $ 200 |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Equity [Abstract] | |
Summary of Purchases Under Plan | A summary of the purchases under the plan follows: Fiscal Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plan Maximum dollar value that may yet be purchased under the plan May 24, 2020 through June 28, 2020 34,243 $ 1.84 34,243 $ 936,857 June 29, 2020 through July 26, 2020 6,806 $ 1.89 6,806 923,994 July 27, 2020 through August 23, 2020 10,688 $ 1.96 10,688 903,062 August 23, 2020 through September 27, 2020 53,996 $ 1.90 53,996 800,397 Total shares repurchased as of period ended September 27, 2020 105,733 $ 1.89 105,733 $ 800,397 |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Warrant Liabilities [Abstract] | |
Schedule of Fair Value Warrant Liabilities | Significant inputs into the respective model at the inception and reporting period measurement dates are as follows: Issuance date Period ended Period ended Period ended Period ended Valuation Assumptions August 26, 2016 October 1, 2017 September 30, 2018 September 29, 2019 September 27, 2020 Exercise Price(1) $ 1.50 $ 1.50 $ 1.50 $ 1.50 $ 1.50 Warrant Expiration Date (1) 8/26/2021 8/26/2021 8/26/2021 8/26/2021 8/26/2021 Stock Price (2) $ 0.95 $ 0.98 $ 1.71 $ 1.56 $ 1.96 Interest Rate (annual) (3) 1.23 % 1.62 % 2.88 % 1.63 % 0.12 % Volatility (annual) (4) 246.44 % 179.36 % 64.05 % 53.66 % 51.67 % Time to Maturity (Years) 5 3.9 2.9 1.9 0.9 Calculated fair value per share $ 0.93 $ 0.87 $ 0.82 $ 0.49 $ 0.62 ( 1) Based on the terms provided in the warrant agreement to purchase common stock of Optex Systems Holdings, Inc. dated August 26, 2016. (2) Based on the trading value of common stock of Optex Systems Holdings, Inc. as of each presented period ending date. (3) Interest rate for U.S. Treasury Bonds, as of each presented period ending date, as published by the U.S. Federal Reserve. (4) Based on the historical daily volatility of Optex Systems Holdings, Inc. as of each presented period ending date. |
Summary of Warrants Outstanding and Fair Values | The warrants outstanding and fair values at each of the respective valuation dates are summarized below: Warrant Liability Warrants Outstanding Fair Value Fair Value Fair Value as of period ended 9/30/2018 4,260,785 $ 0.82 $ 3,500 Reclassification to additional paid in capital upon exercise of warrants (1) (47,504 ) (48 ) Warrant buyback and cancellation (2) (88,081 ) (72 ) Gain on Change in Fair Value of Warrant Liability (1,344 ) Fair Value as of period ended 9/29/2019 4,125,200 $ 0.49 $ 2,036 Loss on Change in Fair Value of Warrant Liability 508 Fair Value as of period ended 9/27/2020 4,125,200 $ 0.62 $ 2,544 (1) Exercise of warrants for gross proceeds of $72 thousand and a warrant liability fair market value of $48 thousand as of the exercise date. (2) Buyback of 88,081 warrants at $0.85 per warrant for a total consideration of ($75) thousand and a warrant liability fair market value of $72 thousand. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The income tax provision for the years ended September 27, 2020 and September 29, 2019 include the following: (Thousands) 2020 2019 Current income tax expense: Current year federal income tax $ 403 $ 279 Prior year tax adjustment (59 ) (15 ) 344 264 Deferred income tax provision (benefit): Federal 187 (1,414 ) Provision for (Benefit from) income taxes, net $ 531 $ (1,150 ) |
Schedule of Income Tax Provision Computed Using the Statutory Federal Tax Rate | The income tax provision for Optex Systems as of September 27, 2020 differs from those computed using the statutory federal tax rate in the respective years due to the following permanent differences: 2020 % 2019 % Tax provision (benefit) at statutory federal rate $ 495 21 $ 949 21 Nondeductible expenses 108 5 (281 ) (6 ) Other 35 1 79 2 Prior year federal income tax adjustment (59 ) (2 ) (15 ) - Change in deferred tax valuation allowance (48 ) (2 ) (1,882 ) (42 ) Provision for (benefit from) income taxes, net $ 531 23 $ (1,150 ) (25 ) |
Schedule of Deferred Income Taxes | Deferred income taxes recorded in the balance sheets result from differences between financial statement and tax reporting of income and deductions. A summary of the composition of the deferred income tax assets (liabilities) follows: (Thousands) Deferred Tax Asset As of As of Stock Compensation $ 64 $ 88 Inventory Reserve 119 150 Unicap 31 39 Deferred Compensation 39 31 Fixed assets (18 ) (13 ) Goodwill Amortization 299 398 Intangible Asset Amortization 170 226 Net Operating Losses 1,362 1,407 Other 124 99 Subtotal $ 2,190 $ 2,425 Valuation allowance (963 ) (1,011 ) Net deferred asset (liability) $ 1,227 $ 1,414 |
Organization and Operations (De
Organization and Operations (Details Narrative) | 12 Months Ended |
Sep. 27, 2020ft²Employee | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Leased facility (in square feet) | ft² | 93,967 |
Number of employees | Employee | 102 |
Accounting Policies (Details Na
Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | ||
Cash and cash equivalents | $ 4,700,000 | $ 1,068,000 | ||
Federal deposit insurance amount | 500,000 | 250,000 | ||
Allowance for doubtful accounts | 5,000 | 5,000 | ||
Bad debt expenses associated with uncollectable accounts | 1,000 | 4,000 | ||
Inventory | 8,791,000 | 10,535,000 | ||
Net inventory decrease in support of deliveries | 1,700,000 | |||
Inventory reserve adjustments | 56,000 | |||
Warranty reserve | 83,000 | 46,000 | $ 101,000 | |
Right-of-use asset | 1,416,000 | |||
Lease liability | [1] | 1,454,000 | ||
Revenue | 25,890,000 | 24,530,000 | ||
Deferred contract revenue | 3,000 | 289,000 | ||
Refund of customer deposit | 19,000 | |||
Liabilities for customer deposit | 1,000 | |||
Customer advance deposits | 1,000 | 3,000 | ||
Contract cost with customer | ||||
Deferred tax assets net | 1,200,000 | 1,414,000 | ||
Deferred tax assets gross | 2,200,000 | |||
Valuation allowance | $ (963,000) | (1,011,000) | ||
Description on deferred tax | Due to historical losses, our valuation allowance reserve was set at 100% of the deferred tax asset for the years 2014 through 2018 for a net carrying value of zero. | |||
Net tax benefit | $ 600,000 | $ 1,800,000 | ||
Additional deferred tax assets tax benefits | $ 200,000 | |||
Number of stock option were included as dilutive | 8,589,919 | 8,492,884 | ||
Unvested Restricted Stock Units [Member] | ||||
Number of stock option were included as dilutive | 182,000 | |||
Unvested Restricted Stock [Member] | ||||
Number of stock option were included as dilutive | 300,000 | |||
Restricted Stock [Member] | ||||
Number of stock option were included as dilutive | 216,500 | |||
Number of stock units were incremental dilutive shares | 125,347 | 104,090 | ||
Warrant [Member] | ||||
Number of stock option were included as dilutive | 4,125,200 | 4,125,200 | ||
Declared Dividends | ||||
Allocated undistributed earnings | 600,000 | $ 1,900,000 | ||
Stock Option [Member] | ||||
Number of stock option were excluded as anti-dilutive | 25,000 | |||
Accounting Standards Update 2016-02 [Member] | ||||
Right-of-use asset | 1,400,000 | $ 1,800,000 | ||
Lease liability | 1,500,000 | 1,900,000 | ||
Obsolete And Excess Inventories [Member] | ||||
Inventory | 202,000 | |||
Service Contract [Member] | ||||
Revenue | $ 451,000 | $ 451,000 | ||
Revenue [Member] | U.S. Government Agencies [Member] | ||||
Concentration risk percentage | 50.00% | 60.00% | ||
Revenue [Member] | Major U.S Defense Contractor One [Member] | ||||
Concentration risk percentage | 19.00% | 22.00% | ||
Revenue [Member] | Major U.S Defense Contractor Two [Member] | ||||
Concentration risk percentage | 6.00% | |||
Revenue [Member] | Major U.S Defense Contractor Three [Member] | ||||
Concentration risk percentage | 5.00% | |||
Revenue [Member] | Major Commercial Customer One [Member] | ||||
Concentration risk percentage | 9.00% | 7.00% | ||
Revenue [Member] | All Other Customers [Member] | ||||
Concentration risk percentage | 11.00% | 11.00% | ||
Accounts Receivable [Member] | U.S. Government Agencies [Member] | ||||
Concentration risk percentage | 29.00% | 41.00% | ||
Accounts Receivable [Member] | Major U.S Defense Contractor One [Member] | ||||
Concentration risk percentage | 39.00% | 25.00% | ||
Accounts Receivable [Member] | Major U.S Defense Contractor Two [Member] | ||||
Concentration risk percentage | 8.00% | 13.00% | ||
Accounts Receivable [Member] | Major U.S Defense Contractor Three [Member] | ||||
Concentration risk percentage | 7.00% | |||
Accounts Receivable [Member] | Five Customers [Member] | ||||
Concentration risk percentage | 89.00% | |||
Accounts Receivable [Member] | Commercial Customer [Member] | ||||
Concentration risk percentage | 6.00% | 6.00% | ||
Accounts Receivable [Member] | Four Customers [Member] | ||||
Concentration risk percentage | 85.00% | |||
[1] | Short-term and Long-term portion of Operating Lease Liability is $417 thousand and $1,037 thousand, respectively. |
Accounting Policies - Schedule
Accounting Policies - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
Accounting Policies [Abstract] | ||
Raw Materials | $ 5,506 | $ 7,395 |
Work in Process | 3,214 | 3,599 |
Finished Goods | 638 | 254 |
Gross Inventory | 9,358 | 11,248 |
Less: Inventory Reserves | (567) | (713) |
Net Inventory | $ 8,791 | $ 10,535 |
Accounting Policies - Schedul_2
Accounting Policies - Schedule of Warranty Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | ||
Accounting Policies [Abstract] | |||
Beginning balance | $ 46 | $ 101 | |
Incurred costs for warranties satisfied during the period | (39) | (115) | |
Warranties reserved for new product shipped during the period | [1] | 106 | 86 |
Change in estimate for pre-existing warranty liabilities | [2] | (30) | (26) |
Warranty Expense | 76 | 60 | |
Ending balance | $ 83 | $ 46 | |
[1] | Warranty expenses accrued to cost of sales (based on current year shipments and historical warranty return rate). | ||
[2] | Changes in estimated warranty liabilities recognized in cost of sales associated with: the period end customer returned warranty backlog, or the actual costs of repaired/replaced warranty units which were shipped to the customer during the year. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details Narrative) - USD ($) | Sep. 27, 2020 | Sep. 29, 2019 | |
Right-of-use asset | $ 1,416,000 | ||
Lease liability | [1] | 1,454,000 | |
Accounting Standards Update 2016-02 [Member] | |||
Right-of-use asset | 1,400,000 | 1,800,000 | |
Lease liability | $ 1,500,000 | $ 1,900,000 | |
[1] | Short-term and Long-term portion of Operating Lease Liability is $417 thousand and $1,037 thousand, respectively. |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 12 Months Ended |
Sep. 27, 2020ft²Employee | |
Number of employees | 102 |
Optex Systems (OPX) - Richardson, Texas [Member] | |
Leased facilities | ft² | 49,100 |
Number of employees | 65 |
Applied Optics Center (AOC) - Dallas [Member] | |
Leased facilities | ft² | 44,867 |
Number of employees | 37 |
Domestic Military Customers [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | Revenue [Member] | |
Percentage of revenue | 88.00% |
Foreign Military Customers [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | Revenue [Member] | |
Percentage of revenue | 12.00% |
U.S. government [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | Revenue [Member] | |
Percentage of revenue | 40.00% |
U.S. government [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue [Member] | |
Percentage of revenue | 10.00% |
U.S Defense Contractor One [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | Revenue [Member] | |
Percentage of revenue | 19.00% |
U.S Defense Contractor Two [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | Revenue [Member] | |
Percentage of revenue | 6.00% |
Commercial Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue [Member] | |
Percentage of revenue | 32.00% |
Subcontracted Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue [Member] | |
Percentage of revenue | 68.00% |
Revenues from External Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue [Member] | |
Percentage of revenue | 84.00% |
Military Contracts [Member] | Applied Optics Center (AOC) - Dallas [Member] | Intersegment Sales Revenue [Member] | |
Percentage of revenue | 16.00% |
One Major Commercial Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue [Member] | |
Percentage of revenue | 9.00% |
Two Major Defense Contractors [Member] | Applied Optics Center (AOC) - Dallas [Member] | Revenue [Member] | |
Percentage of revenue | 5.00% |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Information for Each of the Reportable Segments Profit or Loss as Well as Segment Assets for Each Year (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Total Revenue | $ 25,890 | $ 24,530 |
Interest expense | 19 | 23 |
Depreciation and Amortization | 248 | 340 |
Income before taxes | 2,356 | 4,518 |
Allocated home office expense | ||
(Gain) loss on change in fair value of warrants | 508 | (1,344) |
Stock compensation expense | 197 | 113 |
Royalty expense amortization | 30 | |
Warranty Expense | 76 | 60 |
Segment Assets | 20,345 | 17,556 |
Expenditures for segment assets | 152 | 143 |
Other (Non Allocated Costs and Intersegment Eliminations) [Member] | ||
Total Revenue | (1,689) | (1,712) |
Interest expense | 19 | 23 |
Depreciation and Amortization | ||
Income before taxes | (724) | 1,208 |
Allocated home office expense | ||
(Gain) loss on change in fair value of warrants | 508 | (1,344) |
Stock compensation expense | 197 | 113 |
Royalty expense amortization | ||
Warranty Expense | ||
Segment Assets | ||
Expenditures for segment assets | ||
Optex Systems (OPX) - Richardson, Texas [Member] | ||
Total Revenue | 17,233 | 16,219 |
Interest expense | ||
Depreciation and Amortization | 36 | 29 |
Income before taxes | 1,950 | 2,019 |
Allocated home office expense | (673) | (684) |
(Gain) loss on change in fair value of warrants | ||
Stock compensation expense | ||
Royalty expense amortization | 30 | |
Warranty Expense | ||
Segment Assets | 14,642 | 11,570 |
Expenditures for segment assets | 102 | 47 |
Applied Optics Center (AOC) - Dallas [Member] | ||
Total Revenue | 10,346 | 10,023 |
Interest expense | ||
Depreciation and Amortization | 212 | 311 |
Income before taxes | 1,130 | 1,291 |
Allocated home office expense | 673 | 684 |
(Gain) loss on change in fair value of warrants | ||
Stock compensation expense | ||
Royalty expense amortization | ||
Warranty Expense | 76 | 60 |
Segment Assets | 5,703 | 5,986 |
Expenditures for segment assets | 50 | 96 |
Revenues from External Customers [Member] | ||
Total Revenue | 25,890 | 24,530 |
Revenues from External Customers [Member] | Other (Non Allocated Costs and Intersegment Eliminations) [Member] | ||
Total Revenue | ||
Revenues from External Customers [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | ||
Total Revenue | 17,233 | 16,219 |
Revenues from External Customers [Member] | Applied Optics Center (AOC) - Dallas [Member] | ||
Total Revenue | 8,657 | 8,311 |
Intersegment revenues [Member] | ||
Total Revenue | ||
Intersegment revenues [Member] | Other (Non Allocated Costs and Intersegment Eliminations) [Member] | ||
Total Revenue | (1,689) | (1,712) |
Intersegment revenues [Member] | Optex Systems (OPX) - Richardson, Texas [Member] | ||
Total Revenue | ||
Intersegment revenues [Member] | Applied Optics Center (AOC) - Dallas [Member] | ||
Total Revenue | $ 1,689 | $ 1,712 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Purchases of property and equipment | $ 152 | $ 143 |
Property and equipment, carrying value | 1,006 | 1,102 |
Furniture and Fixtures [Member] | ||
Purchases of property and equipment | 20 | |
Machinery and Equipment [Member] | ||
Purchases of property and equipment | 132 | 14 |
Proceeds from sale of fixed asset | 8 | |
Property and equipment, carrying value | $ 1 | |
Gain on sale of Property and equipment | 7 | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Purchases of property and equipment | $ 143 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Less: Accumulated Depreciation | $ (3,450) | $ (3,202) |
Net Property & Equipment | 1,006 | 1,102 |
Depreciation Expense | 248 | 340 |
Furniture and Fixtures [Member] | ||
Property and Equipment, Gross | $ 398 | 378 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property and Equipment, Estimated Useful Life | 3 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property and Equipment, Estimated Useful Life | 5 years | |
Machinery and Equipment [Member] | ||
Property and Equipment, Estimated Useful Life | 5 years | |
Property and Equipment, Gross | $ 3,782 | 3,650 |
Net Property & Equipment | $ 1 | |
Leasehold Improvements [Member] | ||
Property and Equipment, Estimated Useful Life | 7 years | |
Property and Equipment, Gross | $ 276 | $ 276 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
Payables and Accruals [Abstract] | ||
Deferred Rent Expense | $ 83 | |
Accrued Vacation | 469 | 361 |
Property Taxes | 113 | 113 |
Operating Expenses | 323 | 476 |
Payroll & Payroll Related | 172 | 147 |
Total Accrued Expenses | $ 1,077 | $ 1,180 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2019USD ($) | Oct. 31, 2016USD ($) | Sep. 27, 2020USD ($)ft² | Sep. 29, 2019USD ($) | Sep. 30, 2018USD ($) | Oct. 31, 2019USD ($) | Sep. 29, 2018USD ($) | ||
Lease description | The Company has one non-cancellable office equipment lease with a commencement date of October 1, 2018 and a term of 39 months. The lease cost for the equipment is $1.5 thousand per month from October 1, 2018 through December 31, 2021. | |||||||
Least cost for the equipment | $ 22,000 | $ 15,000 | ||||||
Right of use asset | 1,416,000 | |||||||
Operating lease liability | [1] | 1,454,000 | ||||||
Total expense | 541,000 | |||||||
Right of Use Assets [Member] | ||||||||
Unamortized deferred rent | 83,000 | |||||||
Facility Lease Agreement [Member] | ||||||||
Total expense | 735,000 | $ 700,000 | ||||||
October 1, 2018 through December 31, 2021 [Member] | ||||||||
Least cost for the equipment | $ 1,500 | |||||||
Right of use asset | $ 1,800,000 | |||||||
Operating lease liability | $ 1,900,000 | |||||||
Optex Systems (OPX) - Richardson, Texas [Member] | ||||||||
Area of land | ft² | 49,100 | |||||||
Expiration date | Mar. 31, 2021 | |||||||
Monthly base rent | $ 23,000 | $ 11,000 | ||||||
Lease description | The monthly base rent was $23.0 thousand through June 30, 2019 with annual rental payment inflationary increases between 3.4% and 4.8% occurring April 1, each year. | |||||||
Right of use asset | $ 126,000 | |||||||
Operating lease liability | [1] | $ 145,000 | ||||||
Applied Optics Center (AOC) - Dallas [Member] | ||||||||
Area of land | ft² | 44,867 | |||||||
Expiration date | Oct. 31, 2021 | |||||||
Monthly base rent | $ 19,400 | $ 6,700 | $ 20,000 | |||||
Lease description | The monthly base rent was $20.0 thousand through September 30, 2018 and escalates approximately 3% October 1, each year thereafter through 2021. | |||||||
Renewal term | 5 years | |||||||
Remaining borrowing capacity | $ 125,000 | |||||||
Right of use asset | $ 1,268,000 | |||||||
Operating lease liability | [1] | $ 1,287,000 | ||||||
[1] | Short-term and Long-term portion of Operating Lease Liability is $417 thousand and $1,037 thousand, respectively. |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Non-cancellable Operating Leases Minimum Payments (Details) - USD ($) | Sep. 27, 2020 | Sep. 29, 2019 | |
2021 Base year lease | $ 429,000 | ||
2022 Base year lease | 27,000 | ||
Total base lease payments | 456,000 | ||
2022-2026 Lease option-assumed exercise | [1] | 1,312,000 | |
Total lease payments | 1,768,000 | ||
Imputed interest on lease payments | [2] | (314,000) | |
Total Operating Lease Liability | [3] | 1,454,000 | |
Right-of-use Asset | 1,416,000 | ||
Office Equipment [Member] | |||
2021 Base year lease | 18,000 | ||
2022 Base year lease | 5,000 | ||
Total base lease payments | 23,000 | ||
2022-2026 Lease option-assumed exercise | [1] | ||
Total lease payments | 23,000 | ||
Imputed interest on lease payments | [2] | (1,000) | |
Total Operating Lease Liability | [3] | 22,000 | |
Right-of-use Asset | 22,000 | ||
Common Area Maintenance Estimate [Member] | |||
2021 Base year lease | 149,000 | ||
2022 Base year lease | 7,000 | ||
Total base lease payments | 156,000 | ||
Optex Systems (OPX) - Richardson, Texas [Member] | |||
2021 Base year lease | 148,000 | ||
2022 Base year lease | |||
Total base lease payments | 148,000 | ||
2022-2026 Lease option-assumed exercise | [1] | ||
Total lease payments | 148,000 | ||
Imputed interest on lease payments | [2] | (3,000) | |
Total Operating Lease Liability | [3] | 145,000 | |
Right-of-use Asset | 126,000 | ||
Applied Optics Center (AOC) - Dallas [Member] | |||
2021 Base year lease | 263,000 | ||
2022 Base year lease | 22,000 | ||
Total base lease payments | 285,000 | ||
2022-2026 Lease option-assumed exercise | [1] | 1,312,000 | |
Total lease payments | 1,597,000 | ||
Imputed interest on lease payments | [2] | (310,000) | |
Total Operating Lease Liability | [3] | 1,287,000 | |
Right-of-use Asset | $ 1,268,000 | ||
[1] | Assumes only one of the two five-year options are exercised. The Company believes it is reasonably certain to exercise the first of the two five-year options but believes the additional five-year option falls outside of the range of reasonable predictability. | ||
[2] | Assumes a discount borrowing rate of 7.5%. | ||
[3] | Short-term and Long-term portion of Operating Lease Liability is $417 thousand and $1,037 thousand, respectively. |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Non-cancellable Operating Leases Minimum Payments (Details) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Borrowing discount rate | 7.50% | |
Lease options exercised description | Assumes only one of the two five-year options are exercised. The Company believes it is reasonably certain to exercise the first of the two five-year options but believes the additional five-year option falls outside of the range of reasonable predictability. | |
Short-term operating lease | $ 417 | |
Long-term operating lease | $ 1,037 |
Debt Financing (Details Narrati
Debt Financing (Details Narrative) - USD ($) $ in Thousands | Apr. 16, 2020 | Apr. 05, 2018 | Oct. 17, 2016 | Sep. 29, 2019 | Sep. 27, 2020 | Oct. 31, 2019 |
Revolving Credit Facility [Member] | ||||||
Total interest expense against outstanding line of credit | $ 19 | |||||
Avidbank [Member] | Revolving Credit Facility [Member] | ||||||
Maturity date | Oct. 17, 2019 | |||||
Outstanding principal balance | $ 250 | $ 250 | $ 125 | |||
Expiration date | 1 year | |||||
Total interest (income) expense | $ 23 | |||||
BBVA [Member] | Revolving Credit Facility [Member] | ||||||
Maturity date | Apr. 15, 2022 | |||||
Description of term period | There are commercially standard covenants including, but not limited to, covenants regarding maintenance of corporate existence, not incurring other indebtedness except trade debt, not changing more than 25% stock ownership of Borrower, and a Fixed Charge Coverage Ratio of 1.25:1 | |||||
Outstanding principal balance | $ 377 | |||||
Line of credit principle amount | $ 2,250 | |||||
Line of credit interest percentage | 3.00% | |||||
Litigation Fee | $ 10 | |||||
BBVA [Member] | Revolving Credit Facility [Member] | Prime Rate Plus [Member] | ||||||
Line of credit interest percentage | 0.25% | |||||
Amended and Restated Loan Agreement [Member] | Avidbank [Member] | ||||||
Description of term period | The loan period was from April 5, 2018 through April 21, 2020 at which time any outstanding advances, and accrued and unpaid interest thereon, would be due and payable. | |||||
Line of credit renewable description | Renewable by us for successive one year periods unless the bank notifies us no later than 60 days prior to the end of the initial or any extended term that it shall not renew the letter of credit. | |||||
Amended and Restated Loan Agreement [Member] | Avidbank [Member] | Revolving Credit Facility [Member] | ||||||
Maturity date | Apr. 21, 2020 | |||||
Line of credit maximum financing eligible receivable | $ 2,200 | |||||
Line of credit interest rate description | Prime rate plus 2.5%. | |||||
Periodic minimum interest payment | $ 10 | |||||
Frequency of interest paid in arrears | Monthly | |||||
Description of term period | The Company could maintain accounts at third party banks so long as the total in those other bank accounts does not exceed 20% of the total on deposit at Avidbank, and it would remit to Avidbank monthly statements for all of those accounts within 30 days of the end of each month. | |||||
Percentage of facility fee | 0.05% |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) | Apr. 30, 2020 | Feb. 17, 2020 | Jan. 07, 2020 | Jan. 02, 2020 | Jan. 07, 2019 | Jan. 02, 2019 | Jun. 15, 2017 | Jun. 15, 2016 | Jun. 14, 2016 | Sep. 27, 2020 | Sep. 29, 2019 |
Shares outstanding | 8,690,136 | 8,436,422 | |||||||||
Number of shares issued during the period, shares | 59,447 | 55,565 | |||||||||
Vested restricted stock units issued net of tax withholding, shares | 84,500 | 82,500 | |||||||||
Unvested Restricted Stock Units [Member] | |||||||||||
Issuance of restricted common stock, shares | 16,500 | ||||||||||
Restricted Stock [Member] | |||||||||||
Unrecognized compensation expense, period for recognition | 4 years 2 months 30 days | ||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||
Unrecognized compensation expense, period for recognition | 1 year 8 months 2 days | ||||||||||
Mr.Danny Schoening [Member] | |||||||||||
Issuance of restricted common stock, shares | 150,000 | ||||||||||
Mr.Danny Schoening [Member] | January 1, 2017 [Member] | |||||||||||
Vesting percentage | 34.00% | ||||||||||
Share-based compensation vesting percentage | 34.00% | ||||||||||
Mr.Danny Schoening [Member] | January 1, 2018 [Member] | |||||||||||
Vesting percentage | 33.00% | ||||||||||
Share-based compensation vesting percentage | 33.00% | ||||||||||
Mr.Danny Schoening [Member] | January 1, 2019 [Member] | |||||||||||
Vesting percentage | 33.00% | ||||||||||
Share-based compensation vesting percentage | 33.00% | ||||||||||
Mr.Karen Hawkins [Member] | |||||||||||
Issuance of restricted common stock, shares | 50,000 | ||||||||||
Mr.Karen Hawkins [Member] | January 1, 2017 [Member] | |||||||||||
Vesting percentage | 34.00% | ||||||||||
Share-based compensation vesting percentage | 34.00% | ||||||||||
Mr.Karen Hawkins [Member] | January 1, 2018 [Member] | |||||||||||
Vesting percentage | 33.00% | ||||||||||
Share-based compensation vesting percentage | 33.00% | ||||||||||
Mr.Karen Hawkins [Member] | January 1, 2019 [Member] | |||||||||||
Vesting percentage | 33.00% | ||||||||||
Share-based compensation vesting percentage | 33.00% | ||||||||||
Applied Optics Center General Manager [Member] | January 1, 2018 [Member] | |||||||||||
Vesting percentage | 34.00% | ||||||||||
Share-based compensation vesting percentage | 34.00% | ||||||||||
Applied Optics Center General Manager [Member] | January 1, 2019 [Member] | |||||||||||
Vesting percentage | 33.00% | ||||||||||
Share-based compensation vesting percentage | 33.00% | ||||||||||
Applied Optics Center General Manager [Member] | January 1, 2020 [Member] | |||||||||||
Vesting percentage | 33.00% | ||||||||||
Share-based compensation vesting percentage | 33.00% | ||||||||||
Three Directors and Officers [Member] | |||||||||||
Number of shares issued during the period, shares | 55,565 | ||||||||||
Vested restricted stock units issued net of tax withholding | $ 37,000 | ||||||||||
Vested restricted stock units issued net of tax withholding, shares | 82,500 | ||||||||||
One Directors and Two Officers [Member] | |||||||||||
Number of shares issued during the period, shares | 59,447 | ||||||||||
Vested restricted stock units issued net of tax withholding | $ 54,000 | ||||||||||
Vested restricted stock units issued net of tax withholding, shares | 84,500 | ||||||||||
Three Independent Directors [Member] | |||||||||||
Vesting percentage | 20.00% | ||||||||||
Number of non-vested shares granted | 100,000 | ||||||||||
Vesting period of shares | 5 years | 5 years | |||||||||
Restricted shares description | An effective date of January 1, 2020, in addition to granting 100,000 restricted shares to each independent director which shall vest at a rate of 20% per year (20,000 shares) each January 1st, over the next five years, through January 1, 2025. | ||||||||||
Share-based compensation vesting percentage | 20.00% | ||||||||||
Stock issued during period shares share based compensation | 300,000 | ||||||||||
Stock issued during period value share based compensation | $ 525,000 | ||||||||||
Shares issued price per share | $ 1.75 | ||||||||||
Three Independent Directors [Member] | Minimum [Member] | |||||||||||
Share based compensation | $ 22,000 | ||||||||||
Three Independent Directors [Member] | Maximum [Member] | |||||||||||
Share based compensation | $ 36,000 | ||||||||||
2009 Stock Option Plan [Member] | |||||||||||
Number of share authorized | 75,000 | ||||||||||
Fully vested stock options outstanding | 25,000 | ||||||||||
Exercise price | $ 10 | ||||||||||
Expiration date | Dec. 18, 2020 | ||||||||||
Stock options repurchased price per share | $ 0.01 | ||||||||||
Total transaction amount | $ 250,000 | ||||||||||
Number of remaining options, shares granted | |||||||||||
Shares outstanding | |||||||||||
2016 Restricted Stock Unit Plan [Member] | |||||||||||
Amortization of grant date fair market value | $ 47,500 | ||||||||||
2016 Restricted Stock Unit Plan [Member] | Officers and Employees [Member] | |||||||||||
Issuance of restricted common stock, shares | 1,000,000 | ||||||||||
2016 Restricted Stock Unit Plan [Member] | |||||||||||
Stock price at grant date | $ 2.13 | $ 1.32 | $ 1.85 | ||||||||
Amortization of grant date fair market value | $ 107,000 | $ 264,000 | $ 372,000 | ||||||||
Number of non-vested shares granted | 50,000 | 200,000 | |||||||||
Vesting period of shares | 3 years | 3 years | |||||||||
2016 Restricted Stock Unit Plan [Member] | Mr.Danny Schoening [Member] | |||||||||||
Number of non-vested shares granted | 150,000 | ||||||||||
Vesting period of shares | 3 years | ||||||||||
Vesting percentage, next twelve months | 34.00% | ||||||||||
Vesting percentage, thereafter | 33.00% | ||||||||||
2016 Restricted Stock Unit Plan [Member] | Mr.Karen Hawkins [Member] | |||||||||||
Number of non-vested shares granted | 50,000 | ||||||||||
Vesting period of shares | 3 years | ||||||||||
Vesting percentage, next twelve months | 34.00% | ||||||||||
Vesting percentage, thereafter | 33.00% | ||||||||||
2016 Restricted Stock Unit Plan [Member] | Applied Optics Center General Manager [Member] | |||||||||||
Issuance of restricted common stock, shares | 50,000 | ||||||||||
Stock price at grant date | $ 0.95 | ||||||||||
2016 Restricted Stock Unit Plan [Member] | Bill Gates [Member] | |||||||||||
Number of non-vested shares granted | 50,000 | ||||||||||
Vesting period of shares | 3 years | ||||||||||
Vesting percentage, next twelve months | 34.00% | ||||||||||
Vesting percentage, thereafter | 33.00% |
Stock Based Compensation - Sche
Stock Based Compensation - Schedule of Aggregate Non-vested Restricted Stock Units Granted (Details) - 2016 Restricted Stock Unit Plan [Member] - $ / shares | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Outstanding Unvested RSU's Shares, Beginning balance | 216,500 | 99,000 |
Outstanding Unvested RSU's Shares, Granted | 50,000 | 200,000 |
Outstanding Unvested RSU's Shares, Vested | (84,500) | (82,500) |
Outstanding Unvested RSU's Shares, Ending balance | 182,000 | 216,500 |
Wgt Average Grant Date Fair Value, Beginning balance | $ 1.29 | $ 1.56 |
Wgt Average Grant Date Fair Value, Granted | 2.13 | 1.32 |
Wgt Average Grant Date Fair Value, Vested | 1.25 | 1.68 |
Wgt Average Grant Date Fair Value, Ending balance | $ 1.54 | $ 1.29 |
Stock Based Compensation - Sc_2
Stock Based Compensation - Schedule of Unrecognized Compensation Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Recognized Compensation Expense | $ 197 | $ 113 |
Unrecognized Compensation Expense | 634 | 200 |
Restricted Stock [Member] | ||
Recognized Compensation Expense | 79 | |
Unrecognized Compensation Expense | 446 | |
Restricted Stock Units (RSUs) [Member] | ||
Recognized Compensation Expense | 118 | 113 |
Unrecognized Compensation Expense | $ 188 | $ 200 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Retirement Benefits [Abstract] | ||
Description of defined contribution pension and other postretirement plans | The Company offered a qualified automatic contribution arrangement (QACA) with a 100% match of the first 1% and 50% matching of the next 5% and a 2 year vesting requirement. | The Company offered a qualified automatic contribution arrangement (QACA) with a 100% match of the first 1% and 50% matching of the next 5% and a 2 year vesting requirement. |
Defined contribution expense | $ 165 | $ 153 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Dec. 10, 2020 | Sep. 27, 2020 | Jun. 11, 2020 | Apr. 30, 2020 | Jun. 12, 2019 | Aug. 26, 2016 | Dec. 10, 2020 | Jun. 26, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | Jun. 08, 2020 | Sep. 30, 2018 | Oct. 01, 2017 | ||
Dividends declared, amount | |||||||||||||||
Shares issued during the period, shares | 59,447 | 55,565 | |||||||||||||
Vested restricted stock units issued net of tax withholding, shares | 84,500 | 82,500 | |||||||||||||
Common shares exercise | 47,504 | ||||||||||||||
Warrants exercised | 47,504 | ||||||||||||||
Exercise price of warrants | $ 1.50 | $ 0.85 | |||||||||||||
Stock repurchase program, authorized amount | $ 1,000 | ||||||||||||||
Stock repurchased during the period, value | $ 200 | $ 200 | $ 200 | [1] | |||||||||||
Common shares outstanding | 8,690,136 | 8,690,136 | 8,436,422 | ||||||||||||
Treasury stock, shares | 105,733 | 105,733 | 0 | ||||||||||||
Proceeds from warrant exercised | $ 72 | ||||||||||||||
Treasury Stock [Member] | |||||||||||||||
Vested restricted stock units issued net of tax withholding, shares | |||||||||||||||
Stock repurchased during the period | [1] | 105,733 | |||||||||||||
Stock repurchased during the period, value | [1] | $ 200 | |||||||||||||
Warrant [Member] | |||||||||||||||
Warrants exercised | [2] | (47,504) | |||||||||||||
Exercise price of warrants | [3] | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 | ||||||||
Class of Warrant, Outstanding | 4,260,785 | ||||||||||||||
Proceeds from warrant exercised | $ 72 | ||||||||||||||
Warrant [Member] | New Shareholders [Member] | |||||||||||||||
Warrants exercised | 47,504 | ||||||||||||||
Exercise price of warrants | $ 1.50 | $ 0.85 | |||||||||||||
Warrants issued | 4,323,135 | ||||||||||||||
Class of Warrant, Outstanding | 4,125,200 | 4,125,200 | |||||||||||||
Warrants repurchases | 88,081 | 0 | |||||||||||||
Proceeds from warrant exercised | $ 74,869 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||
Stock repurchased during the period | 276,141 | 170,408 | |||||||||||||
Stock repurchased during the period, value | $ 547 | $ 347 | |||||||||||||
Restricted Stock [Member] | |||||||||||||||
Issuance of common stock vesting | 300,000 | ||||||||||||||
[1] | Common shares repurchased in the open market between June 11, 2020 and September 27, 2020 for $200 thousand and held in treasury stock using the cost method. | ||||||||||||||
[2] | Exercise of warrants for gross proceeds of $72 thousand and a warrant liability fair market value of $48 thousand as of the exercise date. | ||||||||||||||
[3] | Based on the terms provided in the warrant agreement to purchase common stock of Optex Systems Holdings, Inc. dated August 26, 2016. |
Stockholders Equity - Summary o
Stockholders Equity - Summary of Purchases Under Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Sep. 27, 2020 | Aug. 23, 2020 | Jul. 26, 2020 | Jun. 28, 2020 | Sep. 27, 2020 | |
Total number of shares purchased | 53,996 | 10,688 | 6,806 | 34,243 | |
Average price paid per share | $ 1.90 | $ 1.96 | $ 1.89 | $ 1.84 | $ 1.90 |
Total number of shares purchased as part of publicly announced plan | 53,996 | 10,688 | 6,806 | 34,243 | |
Maximum dollar value that may yet be purchased under the plan | $ 800,397 | $ 903,062 | $ 923,994 | $ 936,857 | |
Shares Repurchased [Member] | |||||
Total number of shares purchased | 105,733 | ||||
Average price paid per share | $ 1.89 | $ 1.89 | |||
Total number of shares purchased as part of publicly announced plan | 105,733 | ||||
Maximum dollar value that may yet be purchased under the plan | $ 800,397 |
Warrant Liabilities (Details Na
Warrant Liabilities (Details Narrative) - $ / shares | Aug. 26, 2016 | Sep. 29, 2019 | Jun. 12, 2019 |
Exercise price of warrants | $ 0.85 | $ 1.50 | |
New Shareholders [Member] | Underwriter [Member] | |||
Warrants issued | 4,323,135 | ||
Exercise price of warrants | $ 1.50 | ||
Termination date | Aug. 26, 2021 |
Warrant Liabilities - Schedule
Warrant Liabilities - Schedule of Fair Value Warrant Liabilities (Details) | Sep. 27, 2020$ / shares | Sep. 29, 2019$ / shares | Jun. 12, 2019$ / shares | Sep. 30, 2018$ / shares | Oct. 01, 2017$ / shares | Aug. 26, 2016$ / shares | |
Exercise Price | $ 0.85 | $ 1.50 | |||||
Warrant [Member] | |||||||
Exercise Price | [1] | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 | |
Warrant Expiration Date | [1] | Aug. 26, 2021 | Aug. 26, 2021 | Aug. 26, 2021 | Aug. 26, 2021 | Aug. 26, 2021 | |
Stock Price | [2] | $ 1.96 | $ 1.56 | $ 1.71 | $ 0.98 | $ 0.95 | |
Time to Maturity (Years) | 10 months 25 days | 1 year 10 months 25 days | 2 years 10 months 25 days | 3 years 10 months 25 days | 5 years | ||
Calculated fair value per share | $ 0.62 | $ 0.49 | $ 0.82 | $ 0.87 | $ 0.93 | ||
Warrant [Member] | Interest Rate (Annual) [Member] | |||||||
Fair value measurement input | [3] | 0.12 | 1.63 | 2.88 | 1.62 | 1.23 | |
Warrant [Member] | Volatility (Annual) [Member] | |||||||
Fair value measurement input | [4] | 51.67 | 53.66 | 64.05 | 179.36 | 246.44 | |
[1] | Based on the terms provided in the warrant agreement to purchase common stock of Optex Systems Holdings, Inc. dated August 26, 2016. | ||||||
[2] | Based on the trading value of common stock of Optex Systems Holdings, Inc. as of each presented period ending date. | ||||||
[3] | Interest rate for U.S. Treasury Bonds, as of each presented period ending date, as published by the U.S. Federal Reserve. | ||||||
[4] | Based on the historical daily volatility of Optex Systems Holdings, Inc. as of each presented period ending date. |
Warrant Liabilities - Summary o
Warrant Liabilities - Summary of Warrants Outstanding and Fair Values (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 12, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | |
Reclassification to additional paid in capital upon exercise of warrants | 47,504 | |||
Reclassification to additional paid in capital upon exercise of warrants Fair value | $ (75) | |||
Loss (Gain) on Change in Fair Value of Warrant Liability | $ 508 | $ (1,344) | ||
Warrant [Member] | ||||
Warrant liability, fair value outstanding beginning | 4,125,200 | 4,260,785 | ||
Reclassification to additional paid in capital upon exercise of warrants | [1] | (47,504) | ||
Warrant buyback and cancellation | [2] | (88,081) | ||
Warrant liability, fair value outstanding ending | 4,125,200 | 4,125,200 | ||
Fair Value per Share, beginning | $ 0.49 | $ 0.82 | ||
Fair Value per Share, ending | $ 0.62 | $ 0.49 | ||
Fair value of warrant liability, beginning | $ 2,036 | $ 3,500 | ||
Reclassification to additional paid in capital upon exercise of warrants Fair value | (48) | |||
Warrant buyback and cancellation fair value | [2] | (72) | ||
Loss (Gain) on Change in Fair Value of Warrant Liability | 508 | (1,344) | ||
Fair value of warrant liability, ending | $ 2,544 | $ 2,036 | ||
[1] | Exercise of warrants for gross proceeds of $72 thousand and a warrant liability fair market value of $48 thousand as of the exercise date. | |||
[2] | Buybackof 88,081 warrants at $0.85 per warrant for a total consideration of ($75) thousand and a warrant liability fair market valueof $72 thousand. |
Warrant Liabilities - Summary_2
Warrant Liabilities - Summary of Warrants Outstanding and Fair Values (Details) (Parenthetical) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||
Sep. 27, 2020 | Sep. 29, 2019 | Jun. 12, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | Aug. 26, 2016 | ||
Proceeds from warrant exercised | $ 72 | ||||||
Fair value of warrant liability | $ (75) | ||||||
Exercise price | $ 0.85 | $ 1.50 | |||||
Warrant [Member] | |||||||
Proceeds from warrant exercised | $ 72 | ||||||
Fair value of warrant liability | $ (48) | ||||||
Warrant buyback and cancellation | 88,081 | ||||||
Exercise price | [1] | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 | |
[1] | Based on the terms provided in the warrant agreement to purchase common stock of Optex Systems Holdings, Inc. dated August 26, 2016. |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets net | $ 1,200 | $ 1,414 |
Deferred tax assets gross | 2,200 | |
Valuation allowance | $ (963) | (1,011) |
Description on deferred tax | Due to historical losses, our valuation allowance reserve was set at 100% of the deferred tax asset for the years 2014 through 2018 for a net carrying value of zero. | |
Net tax benefit | $ 600 | 1,800 |
Additional tax benefits from deferred tax assets | 50 | |
Operating loss carryforwards | 6,500 | 6,700 |
Current net operating loss carryforward | $ 2,600 | |
Net operating loss carryforward, limitations on use | Next sixteen years. | |
Cash paid for income taxes | 289 | $ 360 |
Income taxes net of tax refund liability including prepaid expenses | $ (20) | (75) |
Additional tax adjustments of federal income tax | $ 59 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Income Tax Disclosure [Abstract] | ||
Current income tax expense: Current year federal income tax | $ 403 | $ 279 |
Current income tax expense: Prior year tax adjustment | (59) | (15) |
Current income tax expense | 344 | 264 |
Deferred income tax provision (benefit): Federal | 187 | (1,414) |
Provision for (Benefit from) income taxes, net | $ 531 | $ (1,150) |
Income Taxes - Schedule of In_2
Income Taxes - Schedule of Income Tax Provision Computed Using the Statutory Federal Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Income Tax Disclosure [Abstract] | ||
Tax provision (benefit) at statutory federal rate | $ 495 | $ 949 |
Nondeductible expenses | 108 | (281) |
Other | 35 | 79 |
Prior year federal income tax adjustment | (59) | (15) |
Change in deferred tax valuation allowance | (48) | (1,882) |
Provision for (benefit from) income taxes, net | $ 531 | $ (1,150) |
Tax provision (benefit) at statutory federal rate, percentage | 21.00% | 21.00% |
Nontaxable expenses, percentage | 5.00% | (6.00%) |
True up of deferred balance, percentage | 0.00% | 0.00% |
Rate change, percentage | 0.00% | 0.00% |
Other, percentage | 1.00% | 2.00% |
Prior year federal income tax adjustment, percentage | (2.00%) | 0.00% |
Change in deferred tax valuation allowance, percentage | (2.00%) | (42.00%) |
Provision for (benefit from) income taxes, net, percentage | 23.00% | (25.00%) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Taxes (Details) - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
Income Tax Disclosure [Abstract] | ||
Stock Compensation | $ 64 | $ 88 |
Inventory Reserve | 119 | 150 |
Unicap | 31 | 39 |
Deferred Compensation | 39 | 31 |
Fixed assets | (18) | (13) |
Goodwill Amortization | 299 | 398 |
Intangible Asset Amortization | 170 | 226 |
Net Operating Losses | 1,362 | 1,407 |
Other | 124 | 99 |
Subtotal | 2,190 | 2,425 |
Valuation allowance | (963) | (1,011) |
Net deferred asset (liability) | $ 1,227 | $ 1,414 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Dec. 10, 2020USD ($)shares | Oct. 15, 2020USD ($) | Sep. 27, 2020USD ($) | Jun. 11, 2020USD ($) | Dec. 10, 2020USD ($)shares | Sep. 27, 2020USD ($) | [1] | Dec. 15, 2020USD ($) |
Stock repurchased during the period, value | $ 200,000 | $ 200,000 | $ 200,000 | |||||
Subsequent Event [Member] | ||||||||
Stock repurchased during the period | shares | 276,141 | 170,408 | ||||||
Stock repurchased during the period, value | $ 547,000 | $ 347,000 | ||||||
Subsequent Event [Member] | Danny Schoening [Member] | ||||||||
Annual executive bonuses | $ 48,000 | |||||||
Subsequent Event [Member] | Karen Hawkins [Member] | ||||||||
Annual executive bonuses | $ 37,000 | |||||||
Subsequent Event [Member] | Employment Agreement [Member] | ||||||||
Milestone description | The employment agreement events of termination consist of: (i) death or permanent disability of Mr. Schoening; (ii) termination by us for cause (including conviction of a felony, commission of fraudulent acts, willful misconduct by Mr. Schoening, continued failure to perform duties after written notice, violation of securities laws and breach of the employment agreement), (iii) termination without cause by us and (iv) termination by Mr. Schoening for good reason (including breach by us of its obligations under the agreement, the requirement for Mr. Schoening to move more than 100 miles away for his employment without consent, and merger or consolidation that results in more than 66% of the combined voting power of the then outstanding securities of us or our successor changing ownership or a sale of all or substantially all of our assets, without the surviving entity assuming the obligations under the agreement). | |||||||
Subsequent Event [Member] | Employment Agreement [Member] | Mr. Schoening [Member] | ||||||||
Base salary | $ 284,645 | |||||||
Target bonus percentage | 0.30 | |||||||
Subsequent Event [Member] | Employment Agreement [Member] | Mr. Schoening [Member] | Upward or Downward [Member] | ||||||||
Target bonus percentage | 0.20 | |||||||
[1] | Common shares repurchased in the open market between June 11, 2020 and September 27, 2020 for $200 thousand and held in treasury stock using the cost method. |