UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 3, 2022 Delaware 000-54114 90-0609531 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1420 Presidential Drive, Richardson, TX 75081-2439 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (972 ...

WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Securities registered pursuant to Section 12(b) of the Act: Delaware 000-54114 90-0609531 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 1420 Presidential Drive, Richardson, TX 75081-2439 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended October 3, 2021 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ until ___ Commission File Number 000-54114 OPTEX SYSTEMS HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 90-0609531 (State or other jurisdiction of incorpor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 27, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to______. OPTEX SYSTEMS HOLDINGS, INC. (Exact Name of Registrant as Specified in Charter) Delaware 000-54114 90-0609531 (State or other jurisdiction of incorporation ...

PART I— FINANCIAL INFORMATION [Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended March 28, 2021, including balance sheets, statements of operations, cash flows, and stockholders' equity, along with critical footnotes detailing accounting policies, segment performance, lease commitments, warrant liabilities, and stock-based compensation, reflecting a significant year-over-year decline in revenue and a shift from net income to a net loss [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific points in time Balance Sheet Summary (in thousands) | Account | March 28, 2021 (Unaudited) | September 27, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $15,062 | $16,673 | | **Total Assets** | **$21,127** | **$20,345** | | **Total Current Liabilities** | $3,575 | $4,955 | | **Total Liabilities** | **$7,326** | **$6,369** | | **Total Stockholders' Equity** | **$13,801** | **$13,976** | - Total assets increased to **$21.1 million**, primarily due to a significant rise in the right-of-use asset from lease amendments, while total liabilities also grew to **$7.3 million**[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income or loss over specific periods Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Mar 28, 2021 | Three Months Ended Mar 29, 2020 | Six Months Ended Mar 28, 2021 | Six Months Ended Mar 29, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $4,246 | $6,947 | $8,717 | $12,833 | | **Gross Margin** | $378 | $1,619 | $1,213 | $3,086 | | **Operating Income (Loss)** | ($414) | $781 | ($335) | $1,499 | | **Net Income (Loss)** | ($602) | $1,944 | $485 | $1,265 | | **Basic EPS** | ($0.07) | $0.15 | $0.04 | $0.10 | - Revenue for the three months ended March 28, 2021, decreased by **38.9%** year-over-year, leading to an operating loss of **$414 thousand** compared to an operating income of **$781 thousand** in the prior-year period[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary for Six Months Ended (in thousands) | Cash Flow Activity | March 28, 2021 | March 29, 2020 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $82 | $752 | | Net Cash used in Investing Activities | ($128) | ($96) | | Net Cash used in Financing Activities | ($774) | ($54) | | **Net (Decrease) Increase in Cash** | **($820)** | **$602** | | **Cash at End of Period** | **$3,880** | **$1,670** | - For the six months ended March 28, 2021, cash and cash equivalents decreased by **$0.82 million**, driven by stock repurchases and a significant reduction in cash from operations compared to the prior year[17](index=17&type=chunk) [Note 1 - Organization and Operations](index=10&type=section&id=Note%201%20-%20Organization%20and%20Operations) This note describes the company's business, key products, customer base, and recent operational challenges - The company manufactures optical sighting systems for U.S. and foreign military applications, with key customers including the U.S. government (**25%**) and three major U.S. defense contractors (**31%**, **13%**, **9%**)[21](index=21&type=chunk) - The company has experienced a significant reduction in new orders and backlog, attributed to a COVID-19 driven slowdown in contract awards and shifts in defense spending[23](index=23&type=chunk) - Revenue volume decreased by **32%** during the first six months of fiscal year 2021 compared to the same period in 2020, prompting the company to implement cost-saving initiatives, including reductions in force and compensation[23](index=23&type=chunk) [Note 3 - Segment Reporting](index=15&type=section&id=Note%203%20-%20Segment%20Reporting) This note provides financial information broken down by the company's distinct operating segments - The company operates through two reportable segments: Optex Systems in Richardson, TX (OPX) and Applied Optics Center in Dallas, TX (AOC)[50](index=50&type=chunk) Segment Revenue from External Customers (in thousands) | Segment | Three Months Ended Mar 28, 2021 | Three Months Ended Mar 29, 2020 | Six Months Ended Mar 28, 2021 | Six Months Ended Mar 29, 2020 | | :--- | :--- | :--- | :--- | :--- | | Optex Systems - Richardson | $2,805 | $4,422 | $5,833 | $8,066 | | Applied Optics Center - Dallas | $1,441 | $2,525 | $2,884 | $4,767 | [Note 8 - Stockholders' Equity](index=23&type=section&id=Note%208%20-%20Stockholders'%20Equity) This note details changes in the company's equity, including stock repurchases and capital structure - On June 8, 2020, the company authorized a **$1 million** stock repurchase program[84](index=84&type=chunk) - As of March 28, 2021, a total of **480,667 shares** have been repurchased for **$930 thousand**, with a remaining authorization of **$70 thousand** under the plan[84](index=84&type=chunk)[86](index=86&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant operational and financial challenges faced by the company, primarily attributing a **32%** year-over-year revenue decline for the first six months of FY2021 to the COVID-19 pandemic's impact on defense contract awards, detailing declining revenues, gross margins, and operating income across both business segments, and despite a decrease in backlog and an anticipated operating loss for the full fiscal year, management believes the company has sufficient liquidity through its cash reserves and credit facility [COVID-19 Impact](index=25&type=section&id=COVID-19%20Impact) This section discusses the significant effects of the COVID-19 pandemic on the company's revenue, orders, and operational strategies - The company is defined as essential critical infrastructure and has remained open, but has realized a **32%** reduction in revenue volume in the first six months of FY2021 compared to the prior year[99](index=99&type=chunk)[100](index=100&type=chunk) - Management attributes lower orders to a COVID-19 driven slowdown in contract awards and shifting defense budget allocations, anticipating a **26-32%** reduction in total fiscal year 2021 revenue compared to 2020[119](index=119&type=chunk)[155](index=155&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, gross margin, and profitability trends Non-GAAP Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended Mar 28, 2021 | Three Months Ended Mar 29, 2020 | Six Months Ended Mar 28, 2021 | Six Months Ended Mar 29, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) (GAAP) | ($602) | $1,944 | $485 | $1,265 | | **Adjusted EBITDA (Non-GAAP)** | **($292)** | **$871** | **($93)** | **$1,681** | - Adjusted EBITDA decreased by **$1.1 million** for the three-month period and **$1.8 million** for the six-month period year-over-year, primarily driven by lower revenue and gross margin[113](index=113&type=chunk) - Consolidated gross margin decreased to **8.9%** for the quarter from **23.3%** in the prior year, attributed to lower revenue, unfavorable product mix, and unabsorbed manufacturing overhead on reduced volume[120](index=120&type=chunk)[134](index=134&type=chunk) [Backlog](index=29&type=section&id=Backlog) This section reports the value of unfulfilled customer orders, indicating future revenue potential Backlog by Segment (in millions) | Segment | Backlog as of 3/28/2021 | Backlog as of 9/27/2020 | Variance | % Change | | :--- | :--- | :--- | :--- | :--- | | Optex Systems - Richardson | $10.6 | $13.2 | ($2.6) | (19.7)% | | Applied Optics Center - Dallas | $5.4 | $3.1 | $2.3 | 74.2% | | **Total Backlog** | **$16.0** | **$16.3** | **($0.3)** | **(1.8)%** | - Total backlog decreased slightly by **1.8%** to **$16.0 million**, with a significant decrease in the Optex Systems segment largely offset by strong new order bookings at the Applied Optics Center[122](index=122&type=chunk)[124](index=124&type=chunk)[127](index=127&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations and fund operations - As of March 28, 2021, the company had working capital of **$11.5 million** and cash of **$3.9 million**[151](index=151&type=chunk)[157](index=157&type=chunk) - The company executed new **86-month** lease amendments for its facilities, resulting in the balance sheet recognition of a **$3.7 million** right-of-use asset and corresponding lease liabilities[150](index=150&type=chunk) - The company has a **$2.25 million** revolving credit facility to support working capital needs and anticipates a positive cash flow from operations in the second half of 2021 despite projecting an operating loss for the full year[156](index=156&type=chunk)[157](index=157&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, evaluated the company's disclosure controls and procedures, concluding that these controls were effective as of March 28, 2021, and no material changes to the company's internal control over financial reporting were identified during the quarter - Based on an evaluation as of the quarter-end, the Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective[166](index=166&type=chunk) - There were no changes in internal control over financial reporting during the six months ended March 28, 2021, that have materially affected, or are reasonably likely to materially affect, internal controls[167](index=167&type=chunk) PART II— OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not aware of any material pending or threatened litigation against it - The company is not aware of any material litigation pending or threatened against it[168](index=168&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company states there have been no material changes to the risk factors that were previously disclosed in its Form 10-K for the fiscal year ended September 27, 2020 - There have been no material changes in risk factors since those set forth in the Form 10-K for the year ended September 27, 2020[169](index=169&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is reported as not applicable to the company's operations - This item is not applicable[170](index=170&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section provides a list of the exhibits filed concurrently with the Form 10-Q, which includes Sarbanes-Oxley Act certifications and XBRL data files for financial reporting - The report includes certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[171](index=171&type=chunk) - XBRL interactive data files are included as exhibits[171](index=171&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 27, 2020 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to______. OPTEX SYSTEMS HOLDINGS, INC. (Exact Name of Registrant as Specified in Charter) Delaware 000-54114 90-0609531 (State or other jurisdiction of incorpo ...