Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets

v3.3.1.900
Intangible Assets
3 Months Ended
Dec. 27, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

Note 5 – Intangible Assets

 

On November 3, 2014, Optex Systems, Inc. purchased the assets comprising L-3 Communications’ Applied Optics Products Line (“Purchased Assets”) in exchange for $1,013.1 thousand and the assumption of approximately $270.7 thousand of liabilities (see Note 3 “Purchase of Applied Optics Product Line”). Optex Systems, Inc. has allocated the consideration for the acquisition of the purchased assets among tangible and intangible assets acquired and liabilities assumed based upon their fair values as of the acquisition date. Assets that met the criteria for recognition as intangible assets apart from goodwill were also valued at their fair values.

 

The purchase price was assigned to the acquired interest in the assets and liabilities of Optex Systems Holdings as of November 3, 2014 as follows:

 

    (Thousands)  
Assets:        
Current assets, consisting primarily of inventory of $940.1 thousand and prepaid assets of $47.1 thousand   $ 987.2  
Identifiable intangible assets     342.2  
Other non-current assets, principally property and equipment     2,064.7  
Total assets   $ 3,394.1  
         
Liabilities:        
Current liabilities, consisting of accounts payable of $119.4 thousand and accrued liabilities of $151.3 thousand   $ (270.7 )
Acquired net assets   $ 3,123.4  

 

The fair values of the intangible assets as of the asset transfer date consisted primarily of $342.2 thousand of undelivered customer order backlog with contracted delivery dates that is essentially fulfilled as of quarter ended June 28, 2015. The amortization of identifiable intangible assets associated with the acquisition will be amortized on a straight line basis over the six month period beginning on December 29, 2014 at a rate of $57.0 thousand per month pursuant to the expected order deliveries. The intangible amortization is allocable to operating expenses as manufacturing cost of sales and general and administrative expenses at a rate of $145.5 thousand and $25.5 thousand per quarter, respectively, through quarter ending June 28, 2015. The identifiable intangible assets are amortized over 15 years for income tax purposes. There were no unamortized intangible assets or amortization expenses incurred in the three months ending December 27, 2015. As of three months ending December 28, 2014 the total unamortized balance of intangible assets was $342.2 thousand.