PROFORMA CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

On October 14, 2008, in a purchase transaction that was consummated via public auction, Optex Delaware exchanged $15 million of IRSN debt owned by it and assumed approximately $3.8 million of certain Optex Texas liabilities for substantially all of the assets of Optex Texas. The $15 million of IRSN debt was contributed by Longview Fund and Alpha (secured creditors of IRSN) to Optex Delaware in exchange for a six percent (6%) $6 million note payable, $5.4 million and $0.6 million respectively, and $9 million equity interest in Optex Delaware of 45,081,350 and 4,918,650 shares respectively. There is no contingent consideration associated with the purchase. On October 30, 2008 Alpha Capital Anstalt sold their common stock interest to Arland Holding, Ltd. On February 20, 2009 Longview sold 100% of its equity interests in Optex Delaware to Sileas Corp.

On February 20, 2009, Sileas Corp. (“Sileas”), a newly-formed Delaware corporation owned by present members of the Company’s management, purchased 45,081,350 shares of Optex Delaware common stock held by Longview Fund, LP (representing 90% of the outstanding shares of Optex Delware) and the note issued to Longview in the principal amount of $5,409,762.

The purchase price for the Sileas acquisition was $13,524,405. The purchase was paid by a note made by Sileas, payable to Longview in the principal amount of the purchase price carrying four percent (4%) annual interest, ,and maturing on February 20, 2012 and secured by a pledge of the purchased assets.

Sileas has no operations or business activities other than holding the Purchased Assets and has no revenues.

On March 26, 2009, the Company’s Board of Directors approved a 1.7:1 forward split of its Common Stock to holders of record as of February 23, 2009. Accordingly, as a result of the forward split, the 45,081,350 shares of Common Stock held by Sileas Corp. were split into 76,638,295 shares, and the 4,918,650 shares of Common Stock held by Arland Holdings, Ltd. were split into 8,361,705 shares.

On March 27, 2009, Sileas and Alpha Capital Anstalt exchanged their promissory notes in the total amount of $6,000,000 plus accrued and unpaid interest thereon into 1,027 shares of Series A Preferred Stock. The Series A Preferred Shares entitle the holders to receive cumulative dividends at the rate of 6% per annum payable in cash at the discretion of Board of Directors.

On March 30, 2009, a reorganization/share exchange occurred whereby the then existing shareholders of the Company exchanged their shares of Company Common Stock with the shares of Common Stock of Sustut Exploration, Inc. (“Sustut”). For each share of Optex Common Stock tendered, the shareholder received 1.33 shares of Sustut Common Stock. For each share of Series A Preferred Stock of the Company tendered, the shareholder received 1 share of Sustut Series A Preferred Stock. The Company shall remain a wholly owned subsidiary of Sustut, and the Company’s shareholders are now shareholders of Sustut.

As of March 30, 2009 , the Company accepted subscriptions from accredited investors for a total of 27 units (the "Units"), for $45,000.00 per Unit, with each Unit consisting of Three Hundred Thousand (300,000) shares of common stock, no par value (the "Common Stock") of the Company and warrants to purchase Three Hundred Thousand (300,000) shares of Common Stock for $0.45 per share for a period of five (5) years from the initial closing (the "Warrants"), which were issued by Sustut after the closing referenced above. Gross proceeds to the Company were $1,219,750, and after deducting a finders fee of $139,555 which was payable in cash, and non-cash consideration of forgiveness of indebtedness owed to an investor of $146,250, net proceeds were $933,945. The finder also received five year warrants to purchase 2.7 Units, at an exercise price of $49,500 per unit.

 
 
 

The unaudited pro forma statements of operations of Optex Systems, Inc. for the year ended September 28, 2008 and three months ended December 28, 2008, give effect to (i) both the Optex Delaware acquisition as of October 14, 2008 and subsequent Sileas acquisition as of February 20, 2009 by applying the purchase method of accounting, (ii) certain adjustments that are directly attributable to the change in ownership from Irvine Sensors Corporation, (iii) certain adjustments related to the issuance of notes payable to Longview Fund, LP and Alpha Capital Anstalt as if the transactions were consummated as of October 1, 2007 and September 29, 2008.

The unaudited pro forma condensed balance sheets as of year ended September 28, 2008 and three months ended December 28, 2008 are presented as if both the Optex Delaware and Sileas acquisitions including the issuance of Optex Delaware common stock and notes payable had occurred on September 28, 2008 and December 28, 2008, respectively.

The fair value of the net assets acquired, in both transactions have been estimated based on the final offering price at the public auction held on October 14, 2008.

In the opinion of Optex System, Inc. all adjustments and/or disclosures necessary for a fair presentation of the pro forma data have been made. These pro forma financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the acquisitions been consummated as of the dates indicated or of the results that may be obtained in the future.

These pro forma financial statements and notes thereto should be read in conjunction with Optex System, Inc. financial statements and the notes thereto as of and for the year ended September 28, 2008 and three months ended December 28, 2008.

 
 
 

2008 Annual Balance Sheets 1

Optex Systems, Inc.
Proforma Balance Sheets (Unaudited)
Year Ended September 28, 2008

   
Optex-Texas
    
Optex Delaware
Proforma Adjustments
(10/14/09)
    
Sileas Proforma
Adjustments
(2/20/09)
    
Subtotal
    
Sustut Exploration, 
Inc.
    
Reorganization/share
exchange (3/30/09)
    
Proforma
  
                                           
ASSETS
                                          
                                           
Current Assets
                                          
Cash
     170,183                   170,183             933,945 (12)     1,104,128  
Accounts Receivable
     2,454,235                   2,454,235                     2,454,235  
Net Inventory
     4,547,726                   4,547,726                     4,547,726  
Prepaid Expenses
     307,507                   307,507                     307,507  
                                                   
Total Current Assets
     7,479,651       -       -       7,479,651       -       933,945       8,413,596  
                                                         
Property and Equipment
                                                        
Property and Equipment
     1,314,109                       1,314,109                       1,314,109  
Accumulated Depreciation
     (994,542 )                     (994,542 )                     (994,542 )
                                                         
Total Property and Equipment
     319,567       -       -       319,567       -       -       319,567  
                                                         
Other Assets
                                                        
Security Deposits
     20,684                       20,684                       20,684  
Intangibles
     1,100,140       2,936,650 (2)             4,036,790                       4,036,790  
Goodwill
     10,047,065       (2,936,650 )(2)     1,012,058 (3)     8,122,473               (1,012,058 )(13)     7,110,415  
                                                         
Total Other Assets
     11,167,889       -       1,012,058       12,179,947       -       (1,012,058 )     11,167,889  
                                                         
Total Assets
     18,967,107       -       1,012,058       19,979,165       -       (78,113 )     19,901,052  

See accompanying notes to pro forma financial statements

 
 
 

Optex Systems, Inc.
Proforma Balance Sheets (Unaudited) - Continued
Year Ended September 28, 2008

   
Optex-Texas
    
Optex Delaware 
Proforma Adjustments
(10/14/09)
    
Sileas Proforma
Adjustments
(2/20/09)
    
Subtotal
    
Sustut Exploration, 
Inc.
    
Reorganization/share
exchange (3/30/09)
    
Proforma
  
                                           
LIABILITIES AND EQUITY
                                          
                                           
Current Liabilities
                                          
Accounts Payable
     1,821,534                   1,821,534       1,950 (10)           1,823,484  
Accrued Expenses
     798,974                   798,974               65,000 (12)     863,974  
Accrued Warranties
     227,000                   227,000                       227,000  
Accrued Contract Losses
     821,885                   821,885                       821,885  
Loans Payable
     373,974                   373,974               (146,250 )(12)     227,724  
Income Tax Payable
     4,425       (4,425 )(1)           -                       -  
                                                       
Total Current Liabilities
     4,047,792       (4,425 )     -       4,043,367       1,950       (81,250 )     3,964,067  
                                                         
Other Liabilities
                                                        
Note Payable
     2,000,000       (2,000,000 )(1)             -                       -  
Accrued Interest on Note
     336,148       (345,648 )(1)                                        
              9,500               -                       -  
Long Term Debt - Longview Fund LP
     -       5,409,762 (1)     8,114,643 (3)     13,524,405               (5,409,762 )(11)        
                                              (8,114,643 )(13)     -  
Long Term Debt - Alpha Capital Anstalt
             590,238 (1)             590,238               (590,238 )(11)     -  
Accrued Interest on Notes
                                             159,781 (11)        
                                              (159,781 )(11)     -  
Due to Parent
     4,300,151       (4,301,579 )(1)                                        
      -       1,428               -                       -  
                                                         
Total Other Liabilities
     6,636,299       (636,299 )     8,114,643       14,114,643       -       (14,114,643 )     -  
                                                         
Total Liabilities
     10,684,091       (640,724 )     8,114,643       18,158,010       1,950       (14,195,893 )     3,964,067  
                                                         
Equity
                                                        
Optex Systems, Inc. Stockholders' Equity
                                                        
                                                         
Sustut - Preferred Stock (.001 par 5,000 authorized,  1027 series A preferred issued issed and outstanding)
                                             1 (14)     1  
                                                         
Sustut - Common Stock (.001 par 200,000,000 authorized, 19,999,991 shares issued and outstanding)
                                     20,000 (10)     121,465 (14)     141,465  
Preferred Stock (.001 par 1,027 authorized, 1,027 shares issued and outstanding)
                                             1 (11)        
                                              (1 )(14)     -  
Optex Systems, Inc. Deleware - Common Stock (par $0.001, 300,000,000 authorized, 85,000,000 shares issued and outstanding)
             50,000 (1)                                        
              35,000 (9)             85,000                          
                                              8,132 (12)        
                                              (93,132 )(14)     -  
Optex Systems, Inc. Texas - Common Stock (no par 100,000 authorized, 18,870 shares issued and 10,000 shares outstanding)
     164,834       (164,834 )(1)             -                       -  
Optex Systems, Inc. Texas - Treasury Stock (8,870 shares at cost)
     (1,217,400 )     1,217,400 (1)             -                       -  
Additional Paid-in-capital
     15,246,282       (450,914 )(1)     (8,602,585 )(3)                                
                                                         
              (35,000 )(9)             6,157,783       467,700 (10)                
                                              552,646 (12)        
                                              454,417 (12)        
                                              (517,983 )(14)        
                                              8,602,585 (13)        
                                              6,159,780 (11)     21,876,928  
Retained Earnings (Deficit)
     (5,910,700 )     (10,928 )             (5,921,628 )     (489,650 )(10)                
                                              (159,781 )(11)        
                                              489,650 (14)     (6,081,409 )
                                                         
Total Optex Systems, Inc. Stockholders' Equity
     8,283,016       640,724       (8,602,585 )     321,155       (1,950 )     15,617,780       15,936,985  
                                                         
Non Controlling Interest
                     1,500,000 (3)     1,500,000               (1,500,000 )(13)     -  
                                                         
Total Liabilities and Equity
     18,967,107       -       1,012,058       19,979,165       -       (78,113 )     19,901,052  

See accompanying notes to pro forma financial statements

 
 
 
 
2008 Annual Income Statement 1
 
Optex Systems, Inc.
Pro Forma Statements of Operations (Unaudited)
Year Ended September 28, 2008

   
Optex - Texas
    
Pro forma
Adjustments
    
Proforma
  
         
 
       
Revenues
     20,017,209    
 
      20,017,209  
           
 
         
Total Cost of Sales
     18,145,211        1,327,346 (4)     19,472,557  
                         
Gross Margin
     1,871,998       (1,327,346 )       544,651  
                         
General and Administrative
                        
Salaries and Wages
     910,854               910,854  
Employee Benefits
     190,489               190,489  
Employee Stock Bonus Plan
     378,716       (378,716
)(7)
     -  
Amortization of Intangible
     223,491               223,491  
Rent, Utilities and Building Maintenance
     228,694               228,694  
Legal and Accouting Fees
     223,715               223,715  
Consulting and Contract Service Fees
     325,723               325,723  
Corporate Allocations
     2,076,184       (2,076,184 )(6)     -  
Other Expenses
     381,459       147,483 (4)     528,942  
Total General and Administrative
     4,939,325       (2,307,417 )       2,631,908  
                         
Earnings (Loss) before Other Expenses and Taxes
     (3,067,327 )     980,071       (2,087,256 )
                         
Other Expenses
                        
Asset Impairment of Goodwill
     1,586,416               1,586,416  
Interest (Income) Expense - Net
     199,753       (200,000 )(5)     (247 )
                         
Total Other
     1,786,169       (200,000 )       1,586,169  
                         
Income (Loss) before Taxes
     (4,853,496 )     1,180,071       (3,673,425 )
Federal Income Tax Expense (Benefit)
     (21,544 )             (21,544 )
                         
Net Income (Loss) After Taxes
     (4,831,952 )     1,180,071       (3,651,881 )
                         
Less preferred stock dividend
     -       (369,720 )(15)     (369,720 )
                         
Net loss applicable to common shareholders
     (4,831,952 )     810,351       (4,021,601 )
                         
Basic and diluted loss per share
   $ (483.20 )           $ (0.03 )
                         
Weighted Average Common Shares Outstanding
     10,000               141,464,940 (16)

See accompanying notes to pro forma financial statements

 
 
 

Qtr 1 Balance Sheets 1
Optex Systems, Inc.
Proforma Balance Sheets (Unaudited)
as of Three months ended December 28, 2008

   
Optex-Texas
    
Sileas Proforma
Adjustments
    
Subtotal
    
Sustut
Exploration, Inc
    
Reorganization/share
exchange
(3/30/09)
    
Proforma
  
                                     
ASSETS
                                    
                                     
Current Assets
                                    
Cash
     497,152             497,152             933,945 (12)     1,431,097  
Accounts Receivable
     2,124,827             2,124,827                     2,124,827  
Net Inventory
     5,848,508             5,848,508                     5,848,508  
Prepaid Expenses
     46,811             46,811                     46,811  
                                             
Total Current Assets
     8,517,298       -       8,517,298       -       933,945       9,451,243  
                                                 
Property and Equipment
                                                
Property and Equipment
     1,339,636               1,339,636                       1,339,636  
Accumulated Depreciation
     (1,030,984 )             (1,030,984 )                     (1,030,984 )
                                                 
Total Property and Equipment
     308,652       -       308,652       -       -       308,652  
                                                 
Other Assets
                                                
Security Deposits
     20,684               20,684                       20,684  
Intangibles
     3,518,992               3,518,992                       3,518,992  
Goodwill
     7,110,415       1,012,058 (3)     8,122,473               (1,012,058 )(13)     7,110,415  
                                                 
Total Other Assets
     10,650,091       1,012,058       11,662,149       -       (1,012,058 )     10,650,091  
                                                 
Total Assets
     19,476,041       1,012,058       20,488,099       -       (78,113 )     20,409,986  

See accompanying notes to pro forma financial statements

 
Optex Systems, Inc.
Proforma Balance Sheets (Unaudited) - Continued
as of Three months ended December 28, 2008
 
   
Optex-Texas
    
Sileas Proforma
Adjustments
    
Subtotal
    
Sustut
Exploration Inc.
    
Reorganization/share
exchange
(3/30/09)
    
Proforma
  
                                     
                                     
LIABILITIES AND EQUITY
                                    
                                     
Current Liabilities
                                    
Accounts Payable
     1,964,795             1,964,795       1,950 (10)           1,966,745  
Accrued Expenses
     1,044,075             1,044,075               65,000 (12)     1,109,075  
Accrued Warranties
     256,397             256,397                       256,397  
Accrued Contract Losses
     743,319             743,319                       743,319  
Loans Payable
     214,490             214,490               (146,250 )(12)     68,240  
Interest on Loans Payable
     6,798             6,798                       6,798  
Income Tax Payable
     263,654             263,654                       263,654  
                                               
Total Current Liabilities
     4,493,528       -       4,493,528       1,950       (81,250 )     4,414,228  
                                                 
Other Liabilities
                                                
Long Term Debt - Longview Fund LP
     5,409,762                               (5,409,762 )(11)     -  
              8,114,643 (3)     13,524,405               (8,114,643 )(13)     -  
Long Term Debt - Alpha Capital Anstalt
     590,238               590,238               (590,238 )(11)     -  
Accrued Interest on Notes
     76,000               76,000               83,781 (11)     -  
                                      (159,781 )(11)     -  
                                                 
Total Other Liabilities
     6,076,000       8,114,643       14,190,643       -       (14,190,643 )     -  
                                                 
Total Liabilities
     10,569,528       8,114,643       18,684,171       1,950       (14,271,893 )     4,414,228  
                                                 
Equity
                                                
Optex Systems, Inc. Stockholders' Equity
                                                
Sustut - Preferred Stock (.001 par 5,000 authorized,  1027 series A preferred issued issed and outstanding)
                                     1 (14)     1  
Sustut - Common Stock (.001 par 200,000,000 authorized, 19,999,991 shares issued and outstanding)
                             20,000 (10)     121,465 (14)     141,465  
Preferred Stock (.001 par 1,027 authorized, 1,027 shares issued and outstanding)
                                     1 (11)     -  
                                      (1 )(14)     -  
Optex Systems, Inc. Deleware - Common Stock (par $0.001, 300,000,000 authorized, 85,000,000 shares issued and outstanding)
     50,000                                       -  
      35,000 (9)             85,000                       -  
                                      8,132 (12)        
                                      (93,132 )(14)        
Additional Paid-in-capital
     14,795,368       (8,602,585 )(3)                             -  
      (35,000 )(9)             6,157,783       467,700 (10)             -  
                                      552,646 (12)        
                                      454,417 (12)        
                                      (517,983 )(14)        
                                      8,602,585 (13)        
                                      6,159,780 (11)     21,876,928  
Retained Earnings (Deficit)
     (5,938,855 )             (5,938,855 )     (489,650 )(10)             -  
                                      (83,781 )(11)        
                                      489,650 (14)     (6,022,636 )
                                                 
Total Optex Systems, Inc. Stockholders' Equity
     8,906,513       (8,602,585 )     303,928       (1,950 )     15,693,780       15,995,758  
                                                 
Non Controlling Interest
             1,500,000 (3)     1,500,000               (1,500,000 )(13)     -  
                                                 
Total Liabilities and Equity
     19,476,041       1,012,058       20,488,099       -       (78,113 )     20,409,986  

See accompanying notes to pro forma financial statements

 
 
 

Qtr 1 Income Statements 1
 
Optex Systems, Inc.
Pro Forma Statements of Operations (Unaudited)
Three months ended December 28, 2008

   
Optex - Texas
    
Pro forma 
Adjustments
    
Proforma
  
                 
Revenues
     7,264,084             7,264,084  
                       
Total Cost of Sales
     6,305,050             6,305,050  
                       
Gross Margin
     959,034       -       959,034  
                         
General and Administrative
                        
Salaries and Wages
     158,876               158,876  
Employee Benefits
     83,420               83,420  
Employee Stock Bonus Plan
     -       -       -  
Amortization of Intangible
     101,158               101,158  
Rent, Utilities and Building Maintenance
     55,332               55,332  
Legal and Accouting Fees
     76,219               76,219  
Consulting and Contract Service Fees
     79,323               79,323  
Corporate Allocations
     -       -       -  
Other Expenses
     77,345               77,345  
Total General and Administrative
     631,673       -       631,673  
                         
Earnings (Loss) before Other Expenses and Taxes
     327,361       -       327,361  
                         
Other Expenses
                        
Other Income and Expense
     (436 )             (436 )
Interest (Income) Expense - Net
     92,298       (85,500 )(5)     6,798  
                         
Total Other
     91,862       (85,500 )     6,362  
                         
Income (Loss) before Taxes
     235,499       85,500       320,999  
Federal Income Tax Expense (Benefit)
     263,654       - (8)     263,654  
Net Income (Loss) After Taxes
     (28,155 )     85,500       57,345  
                         
Less preferred stock dividend
     -       (92,430 )(15)     (92,430 )
                         
Net loss applicable to common shareholders
     (28,155 )     (6,930 )     (35,085 )
                         
Basic and diluted loss per share
   $ (2.82 )           $ (0.00 )
                         
Weighted Average Common Shares Outstanding
     10,000               141,464,940 (16)

See accompanying notes to pro forma financial statements

 
 
 

 (A.)  BASIS OF PRESENTATION

The purchase method of accounting has been used in the preparation of the accompanying unaudited pro forma condensed financial statements.  Under this method of accounting, the purchase consideration is allocated to tangible and intangible assets acquired and liabilities assumed based on their respective fair values.  For purposes of the unaudited pro forma condensed consolidated financial statements, the fair values were established based on the final offering price at the public auction held on October 14, 2008.

The fair value of the ten percent (10%) non-controlling interest at the date of acquisition by Sileas on February 20, 2009 is estimated to be approximately $1,500,000. The fair value was derived by computing 10% of the value of the company as a whole, based on the value of the consideration given by Sileas for its ninety (90%) acquisition. The fair value of the Company as a whole was established by the consideration of $15,000,000 given in the previous transaction whereby Longview and Alpha Capital acquired the Company in a public auction on October 14, 2008. Based on the stability of the nature of the Company’s operations in the current marketplace, the fair value of the October 14, 2008 consideration was deemed to be representative of the current market value

(B.) CONSIDERATION

The aggregate consideration for the transfer of the assets of Optex Texas via public sale on October 14, 2008 consisted of $15 million of debt issued by IRSN and held by Optex Delaware and the assumption of approximately $3.8 million of Optex Texas liabilities by Optex Delaware.

The aggregate consideration for the subsequent acquisition of Longview Fund, LP’s 90% interest in Optex Delaware as of February 20, 2009 was fully funded by a $13,524,405 Note issued to Longview Fund, LP by Sileas that bears annual interest of 4%.  In exchange for the Note, Longview transferred 45,081,350 shares of Optex common stock  and the Optex Note, dated December 2, 2008, issued to Longview in the principal amount of $5,409,762.

(C.) DETAILS OF THE PRO FORMA ADJUSTMENTS RELATING TO THE LONGVIEW AND SILEAS ACQUISITONS ARE AS FOLLOWS:

1.            To record the acquisition of the net assets of Optex Systems, Inc. by Optex Delaware on October 14, 2008 for $15,000,000 and the effects of the purchase on asset, liability, and equity accounts for the assets transferred, notes and common stock issued and impacts to goodwill.

The purchase price consisted of:

As of October 14, 2008
  
Notes Payable
      
Longview Fund, LP
   $ 5,409,762  
Alpha Capital Anstalt
   $ 590,238  
Fair Value of Common Stock Issued (50,000,000 shares at .001 par)
   $ 9,000,000  
Total
   $ 15,000,000  
 
 
 
 

The Optex Delaware purchase was allocated as follows:

Assets:
      
Current assets, consisting primarily of inventory of $5,383,929 and accounts receivable of $1,404,434
   $ 7,330,910  
Identifiable intangible assets
     4,036,789  
Purchased Goodwill
     7,110,416  
Other non-current assets, principally property and equipment
     343,898  
         
Total assets
     18,822,013  
Liabilities:
        
Current liabilities, consisting of accounts payable of $1,953,833 and accrued liabilities of $1,868,180
   $ 3,822,013  
         
Acquired net assets
   $ 15,000,000  

Liabilities not assumed by Optex Delaware as of the acquisition are summarized below:

Optex "Texas" Liabilities not assumed :
  
As of October 14, 2008
  
       
Income Tax Payable
   $ 4,425  
Note Payable - Tim Looney
     2,000,000  
Accrued Interest on Looney Note
     345,648  
Intercompany Payable
     4,301,579  
Total Liabilities assumed by Irvine Sensors, Inc.
   $ 6,651,652  

2.           To record the effect of evaluation of intangible assets as of October 14, 2008 for the amortizable value as of the Optex Delaware acquisiton.  The unamortized balance of intangible assets as of September 28, 2008 and the acquisition date was $ $1,100,140. The amortizable intangible assets determined as a result of the evaluation is $4,036,790.  The resultant difference of $2,936,650 has been reflected as of the September 28, 2008 pro forma balance sheet.  The intangible assets acquired by Optex Delaware consist primarily of customer and program backlog with an expected amortization period of 5 years based on customer delivery schedules (contract backlog) and expected benefit period (program backlog) of the acquired asset.

3.           To record the Sileas acquisition of 90% interest in Optex Delaware as of February 20, 2009.

 
 
 

Assets:
            
Current assets, consisting primarily of inventory of $5,327,438 and accounts receivable of $2,897,583
         $ 8,687,102  
Identifiable intangible assets
           3,173,793  
Purchased Goodwill
           7,110,415  
Other non-current assets, principally property and equipment
           316,923  
               
Total assets
         $ 19,288,233  
Liabilities:
              
Current liabilities, consisting primarily of accounts payable of $2,068,653 and accrued liabilities of $2,039,663
         $ 5,275,886  
               
Acquired net assets
         $ 14,012,347  
               
Purchase price
              
Total consideration to seller (Sileas 90% interests)
   $ 13,524,405          
Fair Value minority interest under FAS 141R
     1,500,000          
                 
            $ 15,024,405  
                 
Excess purchase price reported as goodwill
           $ 1,012,058  

The purchase of 90% interest by Sileas was fully funded by a Note issued in the amount of $13,524,405.

The management believes the evaluation of intangible assets as of the October 14, 2008 acquisition by Optex Delaware  to be a fair representation of the acquired asset as of February 20, 2009 as there has been no substantial change in customer or program backlog since the initial review.  The intangible balance of $3,173,793 represents the amount as of February 20, 2009, net of accumulated amortization of $862,997 expensed through the Sileas acquisition date.

4.           To record the total increased amortization expense of intangible assets of $1,474,829 for the year ended September 28, 2008.  This amount was based on the new amortization schedule amount as determined for the Optex Delaware acquisition of $2,071,194, less the $596,365 recorded for the respective year.  The amounts of $1,327,346 and $147,483 were allocated between cost of sales and general and administrative expenses, respectively.   The intangible amortization is not deductible for tax reporting purposes.

5.           To record the reduction in interest expense of $200,000 for year ended September 28, 2008 for the $2,000,000 Note to Tim Looney that was not assumed in the Optex Delaware acquisition.  To record the reduction in interest expense of $85,500 for the three months ended December 28, 2008 for the Tim Looney Note ($9,500) and Alpha Capital and Longview Fund $6,000,000 Notes ($76,000).

6.           To record the reduction in general administrative expenses for the elimination of IRSN corporate cost allocations of $2,076,184 for the year ended September 28, 2008.

7.           To record the reduction in employee stock bonus compensation for IRSN stock issues made to Optex employees of $378,716 for year ended September 28, 2008.

8.           To record the federal income tax benefit of $29,925 for the interest expense reduction during the three months ended December 28, 2008 based on an assumed tax rate of thirty-five percent (35%) of net income before intangible amortization. There are no federal income tax benefits for the year ended September 28, 2008 as the company had a cumulative retained deficit.

9.            To record the effect of the 1.7:1 Optex Delaware Stock split for the year ended September 28, 2008 and three months ended December 28, 2008.

 
 
 

10.           To record Sustut Exploration Company audited financial statement balances for December 31, 2008.  The financials as presented reflect the Sustut 2.5:1 stock split and cancellation of 25,000,000 common stock shares as of March 30, 2009.

11.           To record the effect of the conversion of debt and associated accrued and unpaid interest by Sileas and Alpha Capital Anstalt into 1,027 shares of series A preferred stock

12.           To record the effect of the private placement on cash, loan payable and equity as of September 28, 2008 and December 28, 2008.

13.           To remove the impact of the Sileas purchase on the Note Payable to Longview, goodwill and non controlling interest from Optex Delaware as of September 28, 2008 and December 28, 2008.  The Sileas ownership will have been diluted to a percentage less than that under which push-down accounting applies, and thus these amounts will be carried on the Sileas financial statements rather than Optex Delaware.

14.           To record the reorganization/share exchange between Optex and Sustut at a 1.16: 1 ratio of  Sustut common shares for each Optex common share.  Preferred shares are exchanged on a 1:1 ratio.

15.           To record effect of preferred stock dividend for year ended September 28, 2008 and three months ended December 28, 2008.

16.           To reflect new capitalized shares outstanding after reorganization for year ended September 28, 2008 and three months ended December 28, 2008.