Note 9 Subsequent Events

On January 1, 2021, 60,000 of the 300,000 restricted director shares granted to the independent directors on April 30, 2020 were vested.

On January 2, 2021, the Company issued 58,392 common shares to directors and officers, net of tax withholding of $43 thousand, in settlement of 83,000 restricted stock units which vested on January 1, 2021.

On January 11, 2021 the Company executed a sixth amendment extending the terms of its current Optex Systems, Richardson location lease for eighty-six (86) months, commencing on April 1, 2021 and ending on May 31, 2028. The initial base rent is set at $25.3 thousand and escalates 3% each year thereafter on April 1, each year. The initial term includes 2 months of rent abatement.

On January 11, 2021 the Company executed a first amendment extending the terms of its current Applied Optics Center, Dallas location lease for eighty-six (86) months, commencing on November 1, 2021 and ending on December 31, 2028. The initial base rent is set at $23.6 thousand and escalates 2.75% each year thereafter on January 1, each year. The initial term includes 2 months of rent abatement. The amendment provides for a five-year renewal option at the end of the lease term at the greater of the then “prevailing rental rate” or the then current base rent rate. The Company estimates the new lease agreements will result in an increase in the balance sheet right of use asset of $2.9 million, and an increase in operating lease liabilities of $3.0 million as of January 11, 2021.