5 unchanged sentences
have audited the accompanying consolidated balance sheets of Optex Systems Holdings, Inc.
−Removed: and subsidiaries (the
−Removed: “Company”) as of October 1, 2023 and October 2, 2022, and the related consolidated statements of income,
−Removed: stockholders’ equity, and cash flows for the twelve months then ended, and the related notes (collectively referred to as the
−Removed: “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the
−Removed: financial position of the Company as of October 1, 2023 and October 2, 2022, and the results of their operations and their cash
−Removed: flows for the twelve months then ended, in conformity with accounting principles generally accepted in the United States of
+Added: and subsidiaries (the “Company”)
+Added: as of September 29, 2024 and October 1, 2023, and the related consolidated statements of income, stockholders’ equity, and cash
+Added: flows for the twelve months then ended, and the related notes (collectively referred to as the “financial statements”).
+Added: our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September
+Added: 29, 2024 and October 1, 2023, and the results of their operations and their cash flows for the twelve months then ended, in conformity
+Added: with accounting principles generally accepted in the United States of America.
financial statements are the responsibility of the Company’s management.
27 unchanged sentences
We determined that there are no critical audit matters.
−Removed: Whitley Penn LLP
+Added: /s/ Whitley Penn LLP
have served as the Company’s auditor since 2017.
−Removed: December 18, 2023
Systems Holdings, Inc.
Balance Sheets
−Removed: October 1, 2023
+Added: September 29, 2024
October 1, 2023
(Thousands, except share and per share data)
−Removed: October 1, 2023
+Added: September 29, 2024
October 1, 2023
7 unchanged sentences
Deferred Tax Asset
+Added: Intangibles, net
Right-of-use Asset
3 unchanged sentences
Accounts Payable
+Added: Credit Facility
Operating Lease Liability
7 unchanged sentences
Other Liabilities
−Removed: Credit Facility
+Added: Credit Facility-Long Term
Operating Lease Liability, net of current portion
11 unchanged sentences
Statements of Income
−Removed: October 1, 2023
+Added: September 29, 2024
October 1, 2023
1 unchanged sentence
Twelve months ended
−Removed: October 1, 2023
+Added: September 29, 2024
October 1, 2023
13 unchanged sentences
Statements of Cash Flows
−Removed: October 1, 2023
+Added: September 29, 2024
October 1, 2023
Twelve months ended
−Removed: October 1, 2023
+Added: September 29, 2024
October 1, 2023
Cash Flows from Operating Activities:
−Removed: Adjustments to Reconcile Net Income to Net Cash provided by (used in) Operating
+Added: Adjustments to Reconcile Net Income to Net Cash provided by (used in) Operating Activities:
+Added: Depreciation and Amortization
Stock Compensation Expense
9 unchanged sentences
Customer Advance Deposits
−Removed: (Decrease) Increase In Accrued Estimated Loss On Contracts
+Added: Increase (Decrease) In Accrued Estimated Loss On Contracts
Total Adjustments
−Removed: Net Cash (used in) provided by Operating Activities
+Added: Net Cash provided by (used in) Operating Activities
Cash Flows used in Investing Activities
+Added: Purchases of Intangible Assets
Purchases of Property and Equipment
Net Cash used in Investing Activities
−Removed: Cash Flows provided by (used) in Financing Activities
+Added: Cash Flows (used in) provided by Financing Activities
Cash Paid for Taxes Withheld On Net Settled Restricted Stock Unit Share Issue
1 unchanged sentence
Payments to Credit Facility
−Removed: Common Stock Repurchases
−Removed: Net Cash provided by (used in) Financing Activities
−Removed: Net Increase (Decrease) in Cash and Cash Equivalents
+Added: Net Cash (used in) provided by Financing Activities
+Added: Net (Decrease) Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
1 unchanged sentence
Supplemental Cash Flow Information:
−Removed: Non Cash Transactions:
−Removed: Right-of-Use Asset
−Removed: Operating Lease Liabilities
−Removed: Treasury stock retired
Cash Transactions:
−Removed: Cash Paid for (Refund of) Taxes
+Added: Cash Paid for Taxes
Cash Paid for Interest
2 unchanged sentences
Statement of Stockholders’ Equity
−Removed: (Thousands, except share data)
−Removed: Balance at October 3, 2021
−Removed: Stock Compensation Expense
−Removed: Vested restricted stock units issued net of tax withholding
−Removed: Common Stock Repurchase (1)
−Removed: Cancellation of Treasury Shares (1)
−Removed: Tender Offer Stock Repurchase and Cancellation (2)
−Removed: ( 1,603,773 )
−Removed: Balance at October 2, 2022
−Removed: Balance, value
+Added: (except share data)
+Added: at October 2, 2022
Stock Compensation Expense
−Removed: Vested restricted stock units issued net of tax withholding
+Added: Vested restricted stock units issued net of
+Added: tax withholding
Restricted Shares Issued (1)
1 unchanged sentence
Balance at October 1,
−Removed: Balance, value
−Removed: shares repurchased in the open market during the twelve months ended October 2, 2022.
−Removed: Shares were held in treasury using the cost
−Removed: As of October 1, 2023, all of the treasury shares have been cancelled.
−Removed: shares repurchased pursuant to the tender offer that closed on September 15, 2022.
−Removed: tendered shares of 1,603,773 at $ 2.65 , or $ 4.25 million, plus transaction costs of $ 111 thousand.
−Removed: Repurchased shares were immediately cancelled.
−Removed: common restricted shares which were forfeited and cancelled in February 2023.
+Added: Stock Compensation Expense
+Added: Vested restricted stock units issued net of
+Added: tax withholding
+Added: Balance at September
and unvested shares issued to board member on May 9, 2023.
Shares vest on 50 % January 1, 2024 and 50% January 1, 2025 .
+Added: common restricted shares which were forfeited and cancelled in February 2023.
accompanying notes are an integral part of these financial statements.
14 unchanged sentences
operations are based in Dallas and Richardson, Texas in leased facilities comprising 93,967 square feet.
−Removed: As of October 1, 2023, the Company
−Removed: operated with 106 full-time equivalent employees.
+Added: As of September 29, 2024, the
+Added: Company operated with 128 full-time equivalent employees.
2 — Summary of Significant Accounting Policies
26 unchanged sentences
Optex System Holdings’ fiscal year ends on the Sunday nearest September 30.
−Removed: Fiscal year 2023 ended on October 1,
+Added: Fiscal year 2024 ended on September 29,
2024 and included 52 weeks.
27 unchanged sentences
of Credit Risk :
−Removed: The Company’s revenues for fiscal year ended October 1, 2023 are derived from sales to U.S.
−Removed: agencies ( 22 %), three U.S.
+Added: The Company’s revenues for fiscal year ended September 29, 2024 were derived from sales to U.S.
+Added: agencies ( 20 %), four major U.S.
defense contractors ( 25 %, 7 %, 6 % and 6 %), one major commercial customer ( 13 %) and all other customers
−Removed: The Company’s revenues for fiscal year ended October 2, 2022 are derived from sales to U.S.
−Removed: government agencies ( 14 %), three major
+Added: The Company’s revenues for fiscal year ended October 1, 2023 were derived from sales to U.S.
+Added: government agencies ( 22 %),
defense contractors ( 14 %, 7 %, and 6 %), one major commercial customer ( 23 %) and all other customers ( 28 %).
−Removed: Optex Systems Holdings does not believe that this concentration
−Removed: results in undue credit risk because of the financial strength of the obligees.
+Added: Optex Systems Holdings
+Added: does not believe that this concentration results in undue credit risk because of the financial strength of the obligees.
Optex Systems Holdings records its accounts receivable at the original sales invoice amount less
−Removed: liquidations for previously collected advance/progress bills and an allowance for doubtful accounts.
−Removed: An account receivable is
−Removed: considered to be past due if any portion of the receivable balance is outstanding beyond its scheduled due date.
−Removed: On a quarterly
−Removed: basis, Optex Systems Holdings evaluates its accounts receivable and establishes an allowance for doubtful accounts, based on its
−Removed: history of past write-offs and collections, and current credit conditions.
−Removed: No interest is accrued on past due accounts receivable.
−Removed: As of October 1, 2023, and October 2, 2022, Optex Systems Holdings had an allowance for doubtful accounts of $ 5
−Removed: thousand, for non U.S.
−Removed: government account balances greater than 120 days.
+Added: liquidations for previously collected advance/progress bills and an allowance for expected credit losses.
+Added: As of the fiscal year
+Added: beginning October 2, 2023, the Company adopted Accounting Standards Update (ASU) 2016-13, “ Financial Instruments –
+Added: Credit Losses (Topic 326):
+Added: Measurement of Credit Losses on Financial Instruments.” Under the new standard, the current
+Added: expected credit loss (“CECL”) model is used for estimating an allowance for credit losses and an allowance is set up
+Added: when the receivable is initially recorded, even if the probability of loss is remote.
+Added: The Company utilizes a CECL model based on the
+Added: aging schedule method.
As the customer base is primarily U.S.
−Removed: government and
−Removed: government prime contractors, Optex Systems Holdings allowance for doubtful accounts is minimal.
−Removed: Optex Systems Holdings charges
−Removed: uncollectible accounts to bad debt expense in the period in which they are first deemed uncollectible.
−Removed: In the fiscal year 2023 we
−Removed: recognized zero
−Removed: in bad debt expenses associated with uncollectible accounts.
−Removed: In the fiscal year 2022 we recognized $ 21
−Removed: thousand in bad debt expenses associated with uncollectible accounts.
−Removed: Accounts receivable was $ 3,183 as of October 3, 2021.
−Removed: of October 1, 2023, 79 % of the accounts receivable balance was comprised of six customers:
−Removed: government, 17 %, four major defense
−Removed: contractors, 21 %, 9 %, 8 % and 6 %, and a commercial customer, 18 %.
−Removed: As of October 2, 2022, 89 % of the accounts receivable balance was comprised
−Removed: of eight customers:
−Removed: government, 10 %, five major defense contractors, 14 %, 12 %, 9 %, 8 % and 7 %, a commercial customer, 19 %, and
−Removed: a foreign military customer, 10 %.
+Added: government and government prime contractors, Optex Systems Holdings
+Added: allowance for credit losses is minimal.
+Added: On a quarterly basis, Optex Systems Holdings evaluates its accounts receivable and
+Added: establishes an allowance for credit losses, using a CECL model based on a rolling aging schedule method.
+Added: An account receivable is considered to be past due if any portion of the receivable balance is outstanding beyond
+Added: its scheduled due date.
+Added: No interest is accrued on past due accounts receivable.
+Added: As of September
+Added: 29, 2024, and October 1, 2023, Optex Systems Holdings had an allowance for credit losses of $ 15
+Added: thousand and $ 5
+Added: thousand, respectively, for non U.S.
+Added: government account balances.
+Added: Optex Systems
+Added: Holdings charges uncollectible accounts to credit loss expense in the period in which they are first deemed uncollectible.
+Added: fiscal year 2024 we recognized $ 10
+Added: thousand in credit loss expenses associated with uncollectible accounts.
+Added: In the fiscal year 2023 we recognized zero
+Added: in credit loss expenses associated with uncollectible accounts.
+Added: of September 29, 2024, 79 % of the accounts receivable balance was comprised of seven customers:
+Added: government, 15 %, five major
+Added: defense contractors, 26 %, 10 %, 9 %, 7 % and 7 %, and a foreign military customer, 5 %.
+Added: As of October 1, 2023, 79 % of the accounts receivable
+Added: balance was comprised of six customers:
+Added: government, 17 %, four major defense contractors, 21 %, 9 %, 8 % and 6 %, and a commercial
+Added: customer, 18 %.
Inventory is recorded at the lower of cost or net realizable value and adjusted as appropriate for decreases in valuation and
4 unchanged sentences
first-out method.
−Removed: As of October 1, 2023, and October 2, 2022 inventory included:
+Added: As of September 29, 2024, and October 1, 2023 inventory included:
Schedule of Inventory
−Removed: October 1, 2023
−Removed: October 2, 2022
+Added: September 29, 2024
October 1, 2023
+Added: September 29, 2024
October 1, 2023
5 unchanged sentences
Net Inventory
−Removed: the twelve months ended October 1, 2023 Optex Systems recorded $ 196 thousand of obsolete and excess inventory reserves.
+Added: the twelve months ended September 29, 2024 Optex Systems recorded $ 0.1 million of obsolete and excess inventory reserves.
Net Inventory
−Removed: increased by $ 2.9 million in support of increased customer backlog and higher revenue.
+Added: increased by $ 2.7 million in support of higher revenues and customer orders.
Some of Optex Systems Holdings’ customers require that the Company warrant the quality of its products to meet customer
6 unchanged sentences
future returns on previous deliveries.
−Removed: As of October 1, 2023 and October 2, 2022, the existing warranty reserve balances of $ 75 thousand
+Added: As of September 29, 2024 and October 1, 2023, the existing warranty reserve balances of $ 52 thousand
and $ 75 thousand, respectively, were reviewed and determined to be adequate to satisfy any future warranty claims that may have existed
4 unchanged sentences
warranty backlog and process future warranty returns.
−Removed: table below summarizes the warranty expenses and incurred warranty costs for the twelve months ended October 1, 2023 and October 2, 2022.
+Added: table below summarizes the warranty expenses and incurred warranty costs for the twelve months ended September 29, 2024 and October 1,
Schedule of Warranty Reserves
11 unchanged sentences
During the twelve months
−Removed: ended October 1, 2023, the warranty return rate was significantly below historical levels resulting in a favorable change in estimate
+Added: ended September 29, 2024, the warranty return rate was significantly below historical levels resulting in a favorable change in estimate
during the period.
17 unchanged sentences
under the guidance of ASC Topic 842.
−Removed: January 11, 2021, the Company executed amendments extending the lease terms of both facilities for eighty-six months.
−Removed: As of the twelve
−Removed: months ended October 2, 2022, the Company has recognized $ 51 thousand in right-of-use-asset and corresponding operating lease liabilities
−Removed: of $ 51 thousand for an office equipment lease expiring in December 2025.
See also Note 8.
19 unchanged sentences
by the Company, and compensated by the customer, at fixed monthly increments over time, consistent with the defined contract maintenance
−Removed: The total revenue recognized over time related to the contract is $ 455 thousand for the twelve months ended October 1, 2023 and
−Removed: $ 464 thousand for the twelve months ended October 2, 2022.
+Added: The total revenue recognized over time related to the contract is $ 483 thousand for the twelve months ended September 29, 2024
+Added: and $ 455 thousand for the twelve months ended October 1, 2023.
Company has on occasion, outside of the presented periods, received selective contract awards and modifications which included substantive
3 unchanged sentences
compliance to the new standard guidance.
−Removed: the twelve months ended October 1, 2023 there was $ 242 thousand of revenue recognized from customer deposit liabilities (deferred contract
−Removed: During the twelve months ended October 2, 2022, there was zero revenue recognized during the period from customer deposit liabilities
+Added: the twelve months ended September 29, 2024, there was $ 226 thousand revenue recognized during the period from customer deposit liabilities
(deferred contract revenue).
−Removed: As of October 1, 2023, there was $ 336 thousand in accrued selling expenses and $ 336 thousand in contract
−Removed: assets related to a new $ 3.4 million contract booked in November 2022.
−Removed: The costs will be amortized against the revenue for the contract
−Removed: deliveries expected to begin in the first half of fiscal year 2024 and extend through fiscal year 2025.
−Removed: As of October 2, 2022, there
−Removed: was no significant contract assets or selling expenses.
+Added: During the twelve months ended October 1, 2023 there was $ 242 thousand of revenue recognized from customer
+Added: deposit liabilities (deferred contract revenue).
+Added: of September 29, 2024 and October 1, 2023, there was $ 237 thousand and $ 336 thousand in accrued selling expenses, respectively, and $ 219
+Added: thousand and $ 336 thousand in contract assets, respectively, related to a new $ 3.4 million contract booked in November 2022.
+Added: costs are amortized against the revenue for the contract deliveries which began in the first half of fiscal year 2024 and are expected
+Added: to extend through fiscal year 2025.
Advance Deposits :
−Removed: Customer advance deposits represent amounts collected from customers in advance of shipment or
−Removed: revenue recognition which relate to undelivered product due to non-substantive milestone payments or other cash in advance payment
−Removed: As of October 1, 2023 and October 2, 2022, Optex Systems, Inc.
−Removed: had a balance of $ 481
−Removed: thousand and $ 311
−Removed: thousand, respectively, in customer advance deposits.
−Removed: Customer advance deposits were zero as of October 3, 2021.
+Added: Customer advance deposits represent amounts collected from customers in advance of shipment or revenue recognition
+Added: which relate to undelivered product due to non-substantive milestone payments or other cash in advance payment terms.
+Added: As of September
+Added: 29, 2024 and October 1, 2023, Optex Systems, Inc.
+Added: had a balance of $ 255 thousand and $ 481 thousand, respectively, in customer advance
Loss Reserves :
6 unchanged sentences
labor, combined with increased manufacturing overhead costs.
−Removed: As of October 1, 2023, the Company had contract
−Removed: loss reserves of $ 243 thousand which have been separately itemized on the balance sheet.
−Removed: As of October 2, 2022,
−Removed: the Company had contract loss reserves of $ 289 thousand.
−Removed: Many of Optex Systems Holdings’ contracts are prime or subcontracted directly with the Federal government and
−Removed: as such, are subject to Federal Acquisition Regulation (Federal Acquisition Regulation) Subpart 49.5, “Contract Termination Clauses”
−Removed: and more specifically Federal Acquisition Regulation clauses 52.249-2 “Termination for Convenience of the Government (Fixed-Price)”,
−Removed: and 49.504 “Termination of fixed-price contracts for default”.
−Removed: These clauses are standard clauses on prime military contracts
−Removed: and are required by the government to be “flowed down” by the prime contractor to any subcontractors used to perform work
−Removed: or provide components against the award.
−Removed: It has been Optex Systems Holdings’ experience that the termination for convenience is
−Removed: rarely invoked, except where it has been mutually beneficial for both parties.
+Added: As of September 29, 2024, the Company had contract loss reserves of $ 259
+Added: As of October 1, 2023, the Company had contract loss reserves of $ 243 thousand which have been separately itemized on the balance
+Added: Many of Optex Systems Holdings’ contracts are prime or subcontracted directly with the Federal
+Added: government and as such, are subject to FAR Subpart 49.5, “Contract Termination Clauses” and more specifically FAR 52.249-2 “Termination for Convenience of the Government (Fixed-Price)”, and FAR 49.504 “Termination of
+Added: fixed-price contracts for default”.
+Added: These clauses are standard clauses on prime military contracts and are required by the
+Added: government to be “flowed down” by the prime contractor to any subcontractors used to perform work or provide components
+Added: against the award.
+Added: It has been Optex Systems Holdings’ experience that the termination for convenience is rarely invoked,
+Added: except where it has been mutually beneficial for both parties.
Optex Systems Holdings is not currently aware of any pending
12 unchanged sentences
to estimate future cash flows and the fair value of long-lived assets.
−Removed: No impairment of long-lived assets was recorded for the periods
+Added: The Company reviewed the intangible assets as of September 29,
+Added: 2024 and found no impairment.
+Added: See also Note 6.
Compensation :
27 unchanged sentences
50 percent likely to be realized upon ultimate settlement with the related tax authority.
−Removed: of October 1, 2023, Optex Systems Inc.
−Removed: has a net carrying value of $ 0.9 million in deferred tax assets represented by deferred tax assets
−Removed: of $ 1.7 million and a deferred tax asset valuation allowance of ($ 0.8 ) million against those assets.
−Removed: The valuation allowance has been
−Removed: established due to historical losses resulting in a Net Operating Loss Carryforward for each of the fiscal years 2010 through 2016 which
−Removed: may not be fully recognized due to an IRS Section 382 limitation related to a change in control occurring in fiscal year 2018.
−Removed: October 1, 2023 and October 2, 2022, we reviewed the deferred tax assets and determined it was more likely than not that we would be
−Removed: able to utilize a substantial portion of the deferred tax asset balance against future earnings.
−Removed: Our assumptions were based on the previous
−Removed: three years earnings trend as well as anticipated future earnings.
−Removed: During the twelve months ended October 1, 2023, the Company recognized
−Removed: an income tax expense of $ 0.5 million.
−Removed: During the twelve months ended October 2, 2022, the Company recovered $ 0.3 million in cash for
−Removed: a tax refund related to a net operating loss carryback from the prior year ended October 1, 2022, and recognized an income tax expense
−Removed: of $ 0.4 million.
−Removed: We will continue to review the deferred tax assets and related valuation reserves in accordance with ASC 740 on an annual
+Added: of September 29, 2024 and October 1, 2023, Optex Systems Inc.
+Added: has a net carrying value of $ 0.9 million in deferred tax assets represented
+Added: by deferred tax assets of $ 1.7 million and a deferred tax asset valuation allowance of ($ 0.8 ) million against those assets.
+Added: The valuation
+Added: allowance has been established due to historical losses resulting in a Net Operating Loss Carryforward for each of the fiscal years 2010
+Added: through 2016 which may not be fully recognized due to an IRS Section 382 limitation related to a change in control occurring in fiscal
+Added: As of September 29, 2024 and October 1, 2023, we reviewed the deferred tax assets and determined it was more likely than not
+Added: that we would be able to utilize a substantial portion of the deferred tax asset balance against future earnings.
+Added: Our assumptions were
+Added: based on the previous three years earnings trend as well as anticipated future earnings.
+Added: During the twelve months ended September 29,
+Added: 2024 and October 1, 2023, the Company recognized an income tax expense of $ 1.0 million and $ 0.5 million, respectively.
+Added: We will continue
+Added: to review the deferred tax assets and related valuation reserves in accordance with ASC 740 on an annual basis.
Basic earnings per share is computed by dividing income available for common shareholders (the numerator) by the weighted
2 unchanged sentences
that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.
−Removed: potentially dilutive securities that Optex Systems Holdings had outstanding were restricted shares, restricted stock units and performance-based shares.
−Removed: Optex Systems Holdings uses the Treasury
−Removed: Stock Method to compute the dilutive effect of these securities.
−Removed: Securities that are anti-dilutive are excluded from the calculation
−Removed: of diluted earnings per common share.
−Removed: the twelve months ended October 1, 2023, 39,000 unvested restricted stock units, 120,000 restricted unvested shares and 27,000 performance
−Removed: shares (which converts to 37,111 incremental dilutive shares) were included in the diluted earnings per share calculation as dilutive
−Removed: and 108,000 performance shares were excluded from diluted earnings per share as they were below the target share price.
−Removed: For the twelve
−Removed: months ended October 2, 2022, 66,000 unvested restricted stock units and 180,000 unvested restricted shares (which converts to 91,045
−Removed: incremental dilutive shares) were included in the diluted earnings per share calculation as dilutive.
+Added: potentially dilutive securities that Optex Systems Holdings had outstanding were restricted shares, restricted stock units and performance-based
+Added: Optex Systems Holdings uses the Treasury Stock Method to compute the dilutive effect of these securities.
+Added: Securities that are
+Added: anti-dilutive are excluded from the calculation of diluted earnings per common share.
+Added: the twelve months ended September 29, 2024, 66,500 unvested restricted stock units and 60,000 unvested restricted shares (which converts
+Added: to 71,129 incremental dilutive shares) were included in the diluted earnings per share calculation as dilutive.
+Added: For the twelve months
+Added: ended October 1, 2023, 39,000 unvested restricted stock units, 120,000 restricted unvested shares and 27,000 performance shares (which
+Added: converts to 37,111 incremental dilutive shares) were included in the diluted earnings per share calculation as dilutive and 108,000 performance
+Added: shares were excluded from diluted earnings per share as they were below the target share price.
3 — Recent Accounting Pronouncements
2 unchanged sentences
Company’s reportable segments are strategic businesses offering similar products to similar markets and customers;
−Removed: the companies are operated and managed separately due to differences in manufacturing technology, equipment, geographic location,
−Removed: and specific product mix.
−Removed: Applied Optics Center was acquired as a unit, and the management at the time of the acquisition was
−Removed: Both the Applied Optics Center and Optex Systems – Richardson operate as reportable segments under the Optex
−Removed: Systems, Inc.
+Added: companies are operated and managed separately due to differences in manufacturing technology, equipment, geographic location, and specific
+Added: Applied Optics Center was acquired as a unit, and the management at the time of the acquisition was retained.
+Added: Both the Applied
+Added: Optics Center and Optex Systems – Richardson operate as reportable segments under the Optex Systems, Inc.
corporate umbrella.
−Removed: For both segments, the chief operating decision maker is Danny Schoening, CEO.
+Added: both segments, the chief operating decision maker is Danny Schoening, CEO.
Applied Optics Center segment also serves as the key supplier of laser coated filters used in the production of periscope assemblies
12 unchanged sentences
Systems is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet.
−Removed: As of October 1, 2023, the
−Removed: Richardson facility operated with 59 full time equivalent employees in a single shift operation.
−Removed: Optex Systems, Richardson serves as
−Removed: the home office for both the Optex Systems and Applied Optics Center segments.
+Added: As of September 29, 2024,
+Added: the Richardson facility operated with 81 full time equivalent employees in a single shift operation.
+Added: Optex Systems, Richardson serves
+Added: as the home office for both the Optex Systems and Applied Optics Center segments.
Optics Center (AOC) – Dallas, Texas
5 unchanged sentences
For the twelve months
−Removed: ended October 1, 2023, the AOC segment revenue from one major commercial customer, and one major defense contractor represent approximately
−Removed: 23 % and 7 % of the Company’s consolidated revenue, respectively.
+Added: ended September 29, 2024, the AOC segment revenue is derived from the U.S.
+Added: government, 5 %, one major commercial customer 12 %, and two
+Added: major defense contractors representing 6 %, and 6 % of the Company’s consolidated revenue, respectively.
Applied Optics Center is located in Dallas, Texas with leased premises consisting of approximately 44,867 square feet of space.
−Removed: October 1, 2023, AOC operated with 47 full time equivalent employees in a single shift operation.
+Added: September 29, 2024, AOC operated with 47 full time equivalent employees in a single shift operation.
financial table below presents the information for each of the reportable segments profit or loss as well as segment assets for each
The Company does not allocate interest expense, income taxes or unusual items to segments.
−Removed: of Segment Reporting Information
+Added: Schedule of Segment Reporting Information
Reportable Segment Financial Information
−Removed: Twelve months ended October 1, 2023
+Added: Twelve months ended September 29, 2024
(non-allocated
29 unchanged sentences
5 — Property and Equipment
−Removed: summary of property and equipment at October 1, 2023 and October 2, 2022 is as follows:
+Added: summary of property and equipment at September 29, 2024 and October 1, 2023 is as follows:
Schedule of Property and Equipment
+Added: September 29, 2024
+Added: September 29, 2024
Property and Equipment
6 unchanged sentences
Depreciation Expense
−Removed: the twelve months ended October 1, 2023, Optex Systems Holdings’ purchased $ 23 thousand in new furniture and fixtures, $ 300 thousand
+Added: the twelve months ended September 29, 2024, Optex Systems Holdings purchased $ 23 thousand in new furniture and fixtures, $ 614 thousand
in machinery and equipment and $ 44 thousand in leasehold improvements.
−Removed: During the twelve months ended October 1, 2023, there were no
−Removed: sales or retirements of fixed assets.
−Removed: During the twelve months ended October 2, 2022, Optex Systems Holdings’ purchased $ 6 thousand
−Removed: in new furniture and fixtures, $ 196 thousand in machinery and equipment and $ 55 thousand in leasehold improvements.
−Removed: During the twelve
−Removed: months ended October 2, 2022, there were no sales or retirements of fixed assets.
+Added: During the twelve months ended October 1, 2023, Optex Systems
+Added: Holdings’ purchased $ 23 thousand in new furniture and fixtures, $ 300 thousand in machinery and equipment and $ 53 thousand in leasehold
+Added: improvements.
+Added: During the twelve months ended September 29, 2024 and October 1, 2023, there were no sales or retirements of fixed assets.
+Added: 6 – Asset Purchase of Intellectual Property
+Added: January 18, 2024, Optex Systems Holdings, Inc., through its wholly-owned subsidiary Optex Systems, Inc.
+Added: (collectively, the “Company”),
+Added: entered into an asset purchase agreement and a contract manufacturing agreement with RUB Aluminum s.r.o.
+Added: agreements, the Company acquired certain intellectual property and technical and marketing information relating to the Speedtracker Mach
+Added: product line, which is primarily used for firearm projectile speed detection, measuring and tracking.
+Added: RUB may continue to manufacture
+Added: Speedtracker Mach products on behalf of the Company.
+Added: The Company acquired the assets using $ 1 million cash on hand, with potential
+Added: additional future cash payments based on successful completion of defined milestones.
+Added: The initial term of the contract manufacturing
+Added: agreement is one year, subject to additional one-year renewal terms to which both parties must agree.
+Added: Subsequent to the acquisition,
+Added: the Company has determined it would be more economical to move the manufacturing operations in house and is no longer ordering assembled
+Added: units against the contract manufacturing agreement.
+Added: acquisition included transaction costs of $30 thousand for legal fees.
+Added: Pursuant to the asset purchase agreement, the total earnout payment
+Added: would have been $238 thousand only if the earnout revenue milestones were achieved during the earnout period, otherwise the earnout would
+Added: As of January 18, 2024, the fair value of the contingent liability was $ 83 thousand.
+Added: As of September 29, 2024, it was determined
+Added: that the revenue milestones related to the earnout agreement would be unachievable within the earnout period and the fair value of the
+Added: contingent liability related to the earnout was set to zero.
+Added: The intangible asset for the Speedtracker product acquisition will be amortized
+Added: on a straight-line basis over seven years.
+Added: the twelve months ending September 29, 2024, the Company invested an additional $ 20 thousand for software app development the Speedtracker
+Added: The software app development will be amortized on a straight-line basis over three years .
+Added: intangible assets are reviewed annually at each fiscal year end for possible impairment.
+Added: The Company reviewed intangible assets as of
+Added: September 29, 2024 and found no impairment.
+Added: of September 29, 2024 the value of intangible assets is:
+Added: Schedule of the Value of Intangible Assets
+Added: September 29, 2024
+Added: Intangible Assets – Intellectual Property Acquisition
+Added: Software App Development
+Added: Amortization of Intangible Assets
+Added: Net Intangible Assets
7 — Accrued Expenses
−Removed: components of accrued liabilities as of October 1, 2023 and October 2, 2022 are summarized below:
+Added: components of accrued liabilities as of September 29, 2024 and October 1, 2023 are summarized below:
Schedule of Accrued Liabilities
−Removed: October 1, 2023
−Removed: October 2, 2022
+Added: September 29, 2024
October 1, 2023
+Added: September 29, 2024
October 1, 2023
47 unchanged sentences
of $ 51 thousand during the twelve months ended October 2, 2022 .
−Removed: of October 1, 2023, the remaining minimum base lease and estimated common area maintenance (CAM) payments under the non-cancellable office
−Removed: equipment and facility space leases are as follows:
+Added: of September 29, 2024, the remaining minimum base lease and estimated common area maintenance (CAM) payments under the non-cancellable
+Added: office equipment and facility space leases are as follows:
Non-cancellable
1 unchanged sentence
Schedule of Non-cancellable Operating Leases Minimum Payments
−Removed: Facility Lease
−Removed: Facility Lease
−Removed: Total Variable
−Removed: Applied Optics
−Removed: Facility Lease
−Removed: Facility Lease
−Removed: Total Variable
−Removed: 2024 Base year lease
+Added: Optex Richardson
+Added: Applied Optics Center
+Added: Office Equipment
2025 Base year lease
10 unchanged sentences
and Long-term portion of Operating Lease Liability is $ 638 thousand and $ 1,760 thousand, respectively.
−Removed: expense under both facility lease agreements for the twelve months ended October 1, 2023 was $ 862 thousand.
−Removed: Total expense under both
−Removed: facility lease agreements as of the twelve months ended October 2, 2022 was $ 849 thousand.
−Removed: office equipment rentals included in operating expenses was $ 20 thousand for the twelve months ended October 1, 2023 and $ 22 thousand
+Added: expense under both facility lease agreements as of the twelve months ended September 29, 2024 was $ 905 thousand.
+Added: Total expense under
+Added: both facility lease agreements for the twelve months ended October 1, 2023 was $ 862 thousand.
+Added: office equipment rentals included in operating expenses was $ 24 thousand for the twelve months ended September 29, 2024 and $ 20 thousand
for the twelve months ended October 1, 2023.
26 unchanged sentences
to which the Borrowers’ existing revolving line of credit facility was decreased from $ 2.25 million to $ 1.125 million, and the
−Removed: maturity date was extended from April 15, 2022 to April 15, 2023.The PNC Loan Agreement required the Borrowers to maintain a fixed charge
+Added: maturity date was extended from April 15, 2022 to April 15, 2023.
+Added: The PNC Loan Agreement required the Borrowers to maintain a fixed charge
coverage ratio of at least 1.25:1.
11 unchanged sentences
acceleration upon the occurrence of an event of default as defined in the Line of Credit Note and PNC Loan Agreement.
−Removed: of October 2, 2022 and October 1, 2023 the outstanding balance under the PNC Facility was zero .
−Removed: The PNC Facility was replaced by the
−Removed: Texas Capital Facility on March 22, 2023.
+Added: PNC Facility was replaced by the Texas Capital Facility on March 22, 2023.
Facility — Texas Capital Bank
7 unchanged sentences
a rate equal to the secured overnight financing rate (SOFR) plus a specified margin, subject to a specified floor interest rate.
−Removed: October 1, 2023 the interest rate was 8.07 % per annum.
+Added: September 29, 2024 the interest rate was 7.67 % per annum.
Loan Agreement contains customary events of default (including a 25 % change in ownership) and negative covenants, including but not limited
7 unchanged sentences
The Loan Agreement further provides for a $ 125,000 Letter of Credit sublimit.
−Removed: outstanding balance under the Texas Capital Facility was $ 1.0 million as of October 1, 2023.
−Removed: the year ended October 1, 2023, the total interest expense under the above facilities was $ 55 thousand.
+Added: outstanding balance under the Texas Capital Facility was $ 1
+Added: million as of September 29, 2024.
+Added: The outstanding balance was paid to zero subsequent to the year ended September 29, 2024.
+Added: See also Note 14, “Subsequent
+Added: the year ended September 29, 2024, the total interest expense under the Texas Capital Facility was $ 47 thousand.
For the year ended October
−Removed: 2022, the total interest expense under the PNC Facility was zero .
+Added: 1, 2023, the total interest expense under both facilities was $ 55 thousand.
10 — Stock Based Compensation
2 unchanged sentences
and performance shares:
−Removed: of Aggregate Non-vested Restricted Stock and Restricted Stock Units Granted and Performance Shares
+Added: Schedule of Aggregate Non-vested Restricted Stock and Restricted Stock Units Granted and Performance Shares
Restricted Stock Units
6 unchanged sentences
Outstanding at October 1, 2023
−Removed: Outstanding at October 1, 2023
+Added: Outstanding at September 29, 2024
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
7 unchanged sentences
beginning on January 2, 2019.
−Removed: As of October 1, 2023, there was no unrecognized compensation cost relating to this award.
+Added: As of September 29, 2024, there was no unrecognized compensation cost relating to this award.
February 17, 2020, the Company granted 50,000 restricted stock units to Bill Bates, General Manager of the Applied Optics Center.
−Removed: 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 %
−Removed: in year one, and 33 % each year thereafter.
+Added: 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
+Added: one, and 33 % each year thereafter.
The stock price at grant date was $ 2.13 per share.
−Removed: The Company amortized the grant
−Removed: date fair value of $ 107 thousand to stock compensation expense on a straight-line basis across the three-year vesting period beginning
−Removed: on February 17, 2020.
−Removed: April 30, 2020, the Board of Directors held a meeting and voted to increase the annual board compensation for the three independent directors
−Removed: from $ 22,000 to
+Added: The Company amortized the grant date fair value
+Added: of $ 107 thousand to stock compensation expense on a straight-line basis across the three-year vesting period beginning on February 17,
+Added: April 30, 2020, the Board of Directors voted to increase the annual board compensation for the three independent directors from
$ 36,000 with an
−Removed: effective date of January 1, 2020, in addition to granting 100,000 shares of restricted stock to each independent director which vest
−Removed: at a rate of 20% per year (20,000 shares) each January 1 st through January 1, 2025.
−Removed: total fair value for the 300,000 shares was $ 525 thousand based on the stock price of $ 1.75 as of April 30, 2020.
−Removed: On each of January 1, 2021, January 1, 2022, and January 1, 2023, 60,000 of the restricted director shares vested.
−Removed: 16, 2023, 40,000 of the unvested restricted shares were forfeited and cancelled when one of the independent directors departed
−Removed: On May 9, 2023, the Board of Directors approved a grant of 40,000 shares of restricted stock to independent board
−Removed: member Dayton Judd.
−Removed: The shares vest 50 % on each of January 1, 2024 and January 1, 2025.
−Removed: As of the grant date, the fair value of
−Removed: the shares was $ 124 thousand, to be amortized on a straight-line basis through December 31, 2024.
−Removed: The Company amortizes the grant
−Removed: date fair value to stock compensation expense on a straight-line basis across the five -year and two -year vesting periods beginning
−Removed: on April 30, 2020 and May 9, 2023, respectively.
−Removed: As of October 1, 2023, there were 120,000 unvested restricted shares outstanding.
−Removed: Company entered into an amended and restated employment agreement with Danny Schoening dated December 1, 2021.
−Removed: The updated employment
+Added: effective date of January 1, 2020, in addition to granting 100,000 shares of restricted stock to each independent director which
+Added: vest at a rate of 20% per year (20,000 shares) each January 1 st through January 1, 2025.
+Added: total fair value for the 300,000
+Added: shares was $ 525
+Added: thousand based on the stock price of $ 1.75
+Added: as of April 30, 2020.
+Added: On each of January 1, 2021, January 1, 2022, and January 1, 2023, 60,000
+Added: of the restricted director shares vested.
+Added: On February 16, 2023, 40,000
+Added: of the unvested restricted shares were forfeited and cancelled when one of the independent directors departed the Board.
+Added: 2023, the Board of Directors approved a grant of 40,000
+Added: shares of restricted stock to independent board member Dayton Judd.
+Added: The shares vest 50 %
+Added: on each of January 1, 2024 and January 1, 2025.
+Added: As of the grant date, the fair value of the shares was $ 124
+Added: thousand, to be amortized on a straight-line basis through December 31, 2024.
+Added: The Company amortizes the grant date fair value to
+Added: stock compensation expense on a straight-line basis across the five -year
+Added: and two -year
+Added: vesting periods beginning on April 30, 2020 and May 9, 2023, respectively.
+Added: As of September 29, 2024 there were 60,000
+Added: unvested restricted shares outstanding.
+Added: Company entered into an amended and restated employment agreement with Danny Schoening dated December 1, 2021.The updated employment
agreement also served to amend Mr.
14 unchanged sentences
then outstanding securities.
−Removed: The amended RSU Agreement contains certain exceptions to the definition of change of control.
−Removed: of the December 1, 2021 modification date related to the third and final vesting date of the 49,500 unvested restricted stock
−Removed: units held by Danny Schoening, there was no change in the fair value of the modified award as compared to the original award immediately
−Removed: prior to the modification date.
−Removed: The restricted stock units initially were certain to vest on January 1, 2022, but due to the modification,
−Removed: they were less certain to vest, contingent on a “change in control” occurring, which change in control, in case Mr.
+Added: The amended RSU Agreement contained certain exceptions to the definition of change of control.
+Added: of the December 1, 2021 modification date related to the third and final vesting date of the 49,500 unvested restricted stock units held
+Added: by Danny Schoening, there was no change in the fair value of the modified award as compared to the original award immediately prior to
+Added: the modification date.
+Added: The restricted stock units initially were certain to vest on January 1, 2022, but due to the modification, they
+Added: were less certain to vest, contingent on a “change in control” occurring, which change in control, in case Mr.
was terminated by the Company without cause or he resigns with good reason prior to such change in control, was required to occur prior
3 unchanged sentences
There is no additional compensation expense associated with the modification of the restricted stock unit agreement.
−Removed: January 4, 2022, the Company issued 23,216 common shares to Karen Hawkins, CFO, and Bill Bates (AOC GM), net of tax withholding
−Removed: of $ 19 thousand, in settlement of 33,000 restricted stock units which vested on January 1, 2022.
November 28, 2022, the Company entered into a new employment agreement with Danny Schoening which amended Mr.
2 unchanged sentences
restricted stock units granted under such agreement from the “change of control date” to January 1, 2023.
−Removed: January 4, 2023, the Company issued 46,432 common shares to Danny Schoening, CEO, and Bill Bates (AOC GM), net of tax withholding
−Removed: of $ 58 thousand, in settlement of 66,000 restricted stock units which vested on January 1, 2023.
−Removed: May 1, 2023, the Company granted an aggregate of 39,000 restricted stock units to eleven employees under its 2023 Equity Incentive
−Removed: As of the grant date, assuming a 23.1 % forfeiture rate based on expected turnover across the three years, the aggregate value of
−Removed: the restricted stock units is $ 90 thousand which will be amortized across the three-year period on a straight-line basis.
−Removed: the twelve months ended October 1, 2023, there were 3,000 restricted stock units forfeited.
−Removed: On August 14, 2023 there was an additional
−Removed: grant of 3,000 restricted stock units to one new employee with a fair value of $ 11 thousand.
−Removed: The restricted stock units will vest at
−Removed: a rate of 33.33 % annually on the anniversary date of the grant and any unvested restricted stock units will be forfeited if employment
−Removed: terminates prior to the relevant vesting date.
−Removed: As of October 1, 2023 there were 39,000 unvested restricted stock units outstanding.
−Removed: May 3, 2023, the Board of Directors approved a grant of 100,000 and 35,000 performance shares to Danny Schoening,
−Removed: CEO, and Karen Hawkins, CFO, respectively.
+Added: January 4, 2023, the Company issued 46,432 common shares to Danny Schoening, CEO, and Bill Bates (AOC GM), net of tax withholding of
+Added: $ 58 thousand, in settlement of 66,000 restricted stock units which vested on January 1, 2023.
+Added: May 1, 2023, the Company granted an aggregate of 39,000
+Added: restricted stock units to eleven employees under
+Added: its 2023 Equity Incentive Plan.
+Added: As of the grant date, assuming a 23.1 %
+Added: forfeiture rate based on expected turnover across the three years, the aggregate value of the restricted stock units is $ 90
+Added: thousand which will be amortized across the three-year
+Added: period on a straight-line basis.
+Added: During the twelve months ended October 1, 2023, there were 3,000
+Added: restricted stock units forfeited.
+Added: On August 14,
+Added: 2023 there was an additional grant of 3,000
+Added: restricted stock units to one new employee with
+Added: a fair value of $ 11
+Added: The restricted stock units will vest
+Added: at a rate of 33.33 %
+Added: annually on the anniversary date of the grant and any unvested restricted stock units will be forfeited if employment terminates prior
+Added: to the relevant vesting date.
+Added: May 3, 2023, the Board of Directors approved a grant of 100,000 and 35,000 performance shares to Danny Schoening, CEO, and Karen Hawkins,
+Added: CFO, respectively.
Each performance share represents a contingent right to receive one share of common stock.
−Removed: The performance shares vest in five equal increments if, in each case and during a five-year performance period beginning on October
−Removed: 2, 2023, the average VWAP per share of common stock over a 30 consecutive trading day period equals or exceeds $3.70, $4.45, $5.35, $6.40,
−Removed: The fair value of the shares, as of the grant date, is $ 320 thousand and will be amortized through December 31, 2025 based
−Removed: on the derived service periods using a Monte Carlo simulation valuation model.
−Removed: assumptions and results for the Monte Carlo simulation are as follows:
−Removed: of Assumptions and Results for the Monte Carlo Simulation
+Added: The performance shares
+Added: vest in five equal increments if, in each case and during a five-year performance period beginning on October 2, 2023, the average VWAP
+Added: per share of common stock over a 30 consecutive trading day period equals or exceeds $3.70, $4.45, $5.35, $6.40, or $7.70 .
+Added: The fair value
+Added: of the shares, as of the grant date, was $ 320 thousand based on the derived service periods using a Monte Carlo simulation valuation
+Added: The fair value was amortized through May 17, 2024 when all of the shares had fully vested.
+Added: May 9, 2023, the Board of Directors approved a grant of 40,000 shares of restricted stock to independent board member Dayton Judd.
+Added: shares vest 50 % on each of January 1, 2024 and January 1, 2025.
+Added: As of the grant date, the fair value of the shares was $ 124 thousand,
+Added: to be amortized on a straight-line basis through December 31, 2024.
+Added: As of September 29, 2024, there were 60,000 unvested restricted shares
+Added: October 2, 2023, 27,000 performance shares vested for reaching the 30-day VWAP for Tranche 1.
+Added: The Company issued a total of 21,060 shares
+Added: on October 24, 2023 in settlement of the vested shares, net of tax withheld of $ 27 thousand.
+Added: December 22, 2023 and December 29, 2023, 27,000 performance shares vested each date for reaching the 30-day VWAP for Tranche 2 and Tranche
+Added: On January 8, 2024 the Company issued a total of 39,563 shares in settlement of the vested shares, net of tax withheld of $ 91 thousand.
+Added: March 11, 2024, 27,000 performance shares vested each date for reaching the 30-day VWAP for Tranche 4.
+Added: The Company issued a total of
+Added: 20,669 shares on March 13, 2024 in settlement of the vested shares, net of tax withheld of $ 46 thousand.
+Added: May 1, 2024, the Company granted an aggregate of 39,000
+Added: restricted stock units to eleven employees under
+Added: its 2023 Equity Incentive Plan.
+Added: As of the grant date, assuming a 7.7 %
+Added: forfeiture rate based on expected turnover across the three years, the aggregate value of the restricted stock units is $ 258
+Added: thousand which will be amortized across the three-year
+Added: period on a straight-line basis.
+Added: The restricted stock units will vest at a rate of 33.33 %
+Added: annually on the anniversary date of the grant and any unvested restricted stock units will be forfeited if employment terminates prior
+Added: to the relevant vesting date.
+Added: On June 4, 2024 there was an additional grant of 500
+Added: restricted stock units to one employee with a
+Added: fair value of $ 4
+Added: restricted stock units will vest 100 %
+Added: on the anniversary date of the grant and will be forfeited if employment terminates prior to the relevant vesting date.
+Added: As of September
+Added: 29, 2024 there were 66,500
+Added: unvested restricted stock units outstanding.
+Added: May 1, 2024, there were 12,000 shares vested under its 2023 Equity Incentive Plan for restricted stock units granted on May 1, 2023.
+Added: On May 3, 2024, 8,446 shares were issued to ten employees, net of tax withheld of $ 26 thousand.
+Added: May 17, 2024, 27,000 performance shares vested for reaching the 30-day VWAP for Tranche 5.
+Added: The Company issued a total of 20,426 shares
+Added: on May 17, 2024 in settlement of the vested shares, net of tax withheld of $ 53 thousand.
+Added: August 14, 2024, there were 1,000 shares vested under its 2023 Equity Incentive Plan for restricted stock units granted on August 14,
+Added: On August 20, 2024, 704 shares were issued to one employee, net of tax withheld of $ 2 thousand.
+Added: of September 29, 2024, there were no performance shares remaining to vest.
+Added: assumptions and results for the Monte Carlo simulation on the performance shares are as follows:
+Added: Schedule of Assumptions and Results for the Monte Carlo Simulation
Performance Period Start
25 unchanged sentences
Schedule of Unrecognized Compensation Costs
−Removed: Recognized Compensation
−Removed: Unrecognized Compensation Expense
−Removed: October 1, 2023
−Removed: October 2, 2022
+Added: Compensation Expense
+Added: Compensation Expense
+Added: September 29, 2024
October 1, 2023
+Added: September 29, 2024
October 1, 2023
3 unchanged sentences
Total Stock Compensation
−Removed: unrecognized compensation expense for restricted shares, performance shares and restricted stock units as of October 1, 2023, is expected
−Removed: to be recognized over a weighted-average period of 1.3 years, 2.3 years and 1.6 years, respectively.
+Added: unrecognized compensation expense for restricted shares and restricted stock units as of September 29, 2024, is expected to be recognized
+Added: over a weighted-average period of 0.3 years and 2.2 years, respectively.
11 — Defined Contribution Plan
3 unchanged sentences
For the fiscal
−Removed: years ended October 1, 2023 and October 2, 2022, the Company offered a qualified automatic contribution arrangement (QACA) with a 100%
+Added: years ended September 29, 2024 and October 1, 2023, 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.
−Removed: The Company’s contribution expense for
−Removed: the fiscal years ended October 1, 2023 and October 2, 2022 were $ 163 thousand and $ 155 thousand, respectively.
+Added: The Company’s contribution expense
+Added: for the fiscal years ended September 29, 2024 and October 1, 2023 were $ 202 thousand and $ 163 thousand, respectively.
12 — Stockholders’ Equity
−Removed: were no dividends declared or paid during the twelve months ended October 1, 2023 and October 2, 2022.
−Removed: the twelve months ended October 1, 2023, there were 46,432 common shares issued to officers, net of tax withholding of $ 58 thousand,
−Removed: in settlement of 66,000 restricted stock units which vested on January 1, 2023.
+Added: were no dividends declared or paid during the twelve months ended September 29, 2024 and October 1, 2023.
+Added: the twelve months ended September 29, 2024, there were 110,868 common shares issued to officers and employees, net of tax withholding
+Added: of $ 245 thousand, in settlement of 13,000 vested restricted stock units, and 135,000 vested performance shares.
the twelve months ended October 1, 2023, there were 46,432 common shares issued to officers, net of tax withholding of $ 58 thousand,
6 unchanged sentences
depending upon market conditions and subject to Rule 10b-18 as promulgated by the SEC.
−Removed: the twelve months ended October 1, 2023, there were no common shares repurchased through the program.
−Removed: During the twelve months ended
−Removed: October 2, 2022, there were 190,954 common shares repurchased through the program at a cost of $ 371 thousand.
−Removed: As of October 1, 2023,
−Removed: all of the repurchased shares had been cancelled.
−Removed: A summary of the purchases under the plan follows:
−Removed: Summary of Purchases Under Plan
−Removed: Fiscal Period
−Removed: purchase cost
−Removed: Average price
−Removed: October 4, 2021 through October 31, 2021
−Removed: November 1, 2021 through November 28, 2021
−Removed: November 29, 2021 through January 2, 2022
−Removed: January 3, 2022 through January 30, 2022
−Removed: January 31, 2022 through February 27, 2022
−Removed: February 28, 2022 through April 3, 2022
−Removed: April 4, 2022 through May 1, 2022
−Removed: May 2, 2022 through May 29, 2022
−Removed: May 30, 2022 through July 3, 2022
−Removed: July 4, 2022 through July 25,2022
−Removed: July 26, 2022 through August 13, 2022
−Removed: Total shares repurchased for twelve months ended October 2, 2022
−Removed: on August 18, 2022, the Company announced the commencement of a tender offer to purchase up to $ 4.25 million in value of shares of its
−Removed: common stock.
−Removed: On September 15, 2022, the Company’s “modified Dutch auction” tender offer expired.
−Removed: In accordance with
−Removed: the terms and conditions of the tender offer, the Company accepted for purchase 1,603,773 shares of common stock at a price of $ 2.65
−Removed: per share, for an aggregate cost of approximately $ 4.25 million, excluding fees and expenses relating to the tender offer.
−Removed: The transaction
−Removed: cost associated with the tender offer was $ 111 thousand.
−Removed: The shares were immediately cancelled upon completion of the transaction.
−Removed: of October 1, 2023, and October 2, 2022, the total outstanding common shares were 6,763,070 and 6,716,638 , respectively.
+Added: the twelve months ended September 29, 2024 and October 1, 2023, there were no
+Added: common shares repurchased through the program.
+Added: of September 29, 2024, and October 1, 2023, the total outstanding common shares were 6,873,938 and 6,763,070 , respectively.
13 — Income Taxes
−Removed: income tax provision for the years ended October 1, 2023 and October 2, 2022 include the following:
+Added: income tax provision for the years ended September 29, 2024 and October 1, 2023 include the following:
Schedule of Income Tax Provision
3 unchanged sentences
Current income tax expense
−Removed: Deferred income tax provision:
+Added: Deferred income tax provision (benefit):
Provision for income taxes, net
−Removed: of October 1, 2023, Optex Systems Inc.
−Removed: has a net carrying value of $ 0.9 million in deferred tax assets represented by deferred tax assets
−Removed: of $ 1.7 million and a deferred tax asset valuation allowance of ($ 0.8 ) million against those assets.
−Removed: The valuation allowance has been
−Removed: established due to historical losses resulting in a Net Operating Loss Carryforward for each of the fiscal years 2010 through 2016 which
−Removed: may not be fully recognized due to an IRS Section 382 limitation related to a change in control occurring in fiscal year 2018.
−Removed: October 1, 2023 and October 2, 2022, we reviewed the deferred tax assets and determined it was more likely than not that we would be
−Removed: able to utilize a substantial portion of the deferred tax asset balance against future earnings.
−Removed: Our assumptions were based on the previous
−Removed: three years earnings trend as well as anticipated future earnings.
−Removed: During the twelve months ended October 1, 2023, the Company recognized
−Removed: $ 20 thousand in tax expenses to deferred tax assets.
−Removed: During the twelve months ended October 2, 2022, the Company recognized $ 33 thousand
−Removed: in tax expenses to deferred tax assets.
−Removed: We will continue to review the deferred tax assets and related valuation reserves in accordance
−Removed: with ASC 740 on an annual basis.
−Removed: income tax provision for Optex Systems as of October 1, 2023 and October 2, 2022 differs from those computed using the statutory federal
+Added: of September 29, 2024 and October 1, 2023, Optex Systems Inc.
+Added: has a net carrying value of $ 0.9 million in deferred tax assets represented
+Added: by deferred tax assets of $ 1.7 million and a deferred tax asset valuation allowance of ($ 0.8 ) million against those assets.
+Added: The valuation
+Added: allowance has been established due to historical losses resulting in a Net Operating Loss Carryforward for each of the fiscal years 2010
+Added: through 2016 which may not be fully recognized due to an IRS Section 382 limitation related to a change in control occurring in fiscal
+Added: As of September 29, 2024 and October 1, 2023, we reviewed the deferred tax assets and determined it was more likely than not
+Added: that we would be able to utilize a substantial portion of the deferred tax asset balance against future earnings.
+Added: Our assumptions were
+Added: based on the previous three years earnings trend as well as anticipated future earnings.
+Added: During the twelve months ended September 29,
+Added: 2024, the Company recognized a ($ 25 ) thousand tax benefit to deferred tax assets.
+Added: During the twelve months ended October 1, 2023, the
+Added: Company recognized $ 20 thousand in tax expenses to deferred tax assets.
+Added: We will continue to review the deferred tax assets and related
+Added: valuation reserves in accordance with ASC 740 on an annual basis.
+Added: income tax provision for Optex Systems as of September 29, 2024 and October 1, 2023 differs from those computed using the statutory federal
tax rate in the respective years due to the following permanent differences:
8 unchanged sentences
A summary of the composition of the deferred income tax assets (liabilities) follows:
−Removed: Schedule of Deferred Income Taxes
−Removed: October 1, 2023
+Added: of Deferred Income Tax Assets (Liabilities)
+Added: September 29, 2024
October 1, 2023
Deferred Tax Asset
−Removed: October 1, 2023
+Added: September 29, 2024
October 1, 2023
3 unchanged sentences
Property and Equipment
−Removed: Goodwill Amortization
Intangible Asset Amortization
4 unchanged sentences
Net deferred asset
−Removed: Company has a net loss carryforward of $ 6.0 million as of October 1, 2023 as compared to a net loss carryforward of $ 6.3 million as of
−Removed: October 2, 2022.
−Removed: Due to an IRS section 382 change in control limitation which was effective during the fiscal year ended 2017, it is
−Removed: anticipated that the Company may only realize $ 2.3 million of the current net operating loss carryforward for a net tax benefit of $ 0.5
+Added: Company has a net loss carryforward of $ 5.8
+Added: million as of September 29, 2024 as compared to a net loss carryforward of $ 6.0
+Added: million as of October 1, 2023.
+Added: Due to an IRS section 382 change in control limitation which was effective during the fiscal year
+Added: ended 2017, it is anticipated that the Company may only realize $ 2.1
+Added: million of the current net operating loss carryforward for a net tax benefit of $ 0.4
million through fiscal year ending in 2037.
−Removed: During the twelve months ended October 1, 2023, the Company recovered $ 0.3 million in cash
−Removed: for a tax refund related to the net operating loss carryback from the October 3, 2021 year end.
+Added: Accordingly, a valuation allowance of $ 0.8 million is recorded as of September 29, 2024 and October 1, 2023.
Company applied FASB ASC 740-10 and has no unrecognized tax benefits.
−Removed: By statute, the tax years ended October 1, 2023, October 2, 2022
+Added: By statute, the tax years ended September 29, 2024, October 1,
2023 and October 2, 2022 are open to examination by the major taxing jurisdictions to which the Company is subject.
−Removed: the twelve months ended October 1, 2023 the Company paid $ 534 thousand in income taxes.
+Added: the twelve months ended September 29, 2024, the Company paid $ 1.2 million in income taxes.
During the twelve months ended October 1,
−Removed: the Company paid zero in income taxes, received a tax refund of $ 312 thousand for fiscal year 2021 operating loss carrybacks, and recorded
−Removed: a current year federal income tax liability of $ 331 thousand which was paid during the twelve months ended October 1, 2023.
−Removed: As of October
−Removed: 1, 2023 the Company has recorded a tax liability of $ 247 thousand.
+Added: 2023 the Company paid $ 0.5 million in income taxes.
+Added: As of September 29, 2024 the Company has recorded a tax liability of $ 74 thousand.
14 — Subsequent Events
−Removed: October 2, 2023, 27,000 performance shares vested with an average 30-day VWAP of $4.15 which exceeded the $3.70 benchmark for Tranche
−Removed: On October 24, 2023 the Company issued 21,060 shares, net of tax withheld of $ 24 thousand.
+Added: October 23, 2024 and December 10, 2024, the Company paid $ 500,000
+Added: against the Texas Capital credit facility leaving an outstanding balance
+Added: of zero as of December 10, 2024.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.