Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

v3.4.0.3
Commitments and Contingencies
6 Months Ended
Mar. 27, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 6 - Commitments and Contingencies

 

Rental Payments under Non-cancellable Operating Leases

 

Optex Systems Holdings leases its office and manufacturing facilities for the Optex Systems, Inc., Richardson address and the Applied Optics Center Dallas address, under non-cancellable operating leases.

 

The leased facility under Optex Systems Inc. at 1420 Presidential Drive, Richardson, Texas consists of 49,100 square feet of space and expires March 31, 2021. Pursuant to the terms of the most recent amendment to the Richardson site facilities lease, there was no base rent payment due from January 1, 2014 through March 31, 2014, with payments beginning April 2014, and annual rental payment inflationary increases between 3.4% and 4.8% occurring each year beginning in 2016. As of March 27, 2016 the unamortized deferred rent was $107 thousand as compared to $106 thousand as of September 27, 2015. Deferred rent expense is amortized monthly over the life of the lease.

 

The leased facility under the Applied Optics Center at 9839 and 9827 Chartwell Drive, Dallas, Texas, consists of 56,633 square feet of space at the premises. The term of the lease expires September 30, 2016, and there are four renewal options available to the tenant, each with a renewal term duration of five years. We anticipate a lease renewal during the next six months.

 

Approximately 12,000 square feet covered under the Applied Optics Center lease, is subleased under a separate Memorandum of Understanding dated October 27, 2014, to L-3 Communications Mobile Vision Inc. The sublease term is for November, 2014 through September, 2016. L-3 has expressed interest in a lease renewal and Optex expects to begin negotiations with L-3 Communications Mobile Vision Inc. during the next 90 days. The sublease is treated as a reduction in the company facilities rental and CAM expenses in the statement of operations.

 

As of March 27, 2016, the remaining minimum lease and estimated adjusted common area maintenance (CAM) payments under the non-cancelable office and facility space leases are as follows:

 

Non-cancellable Operating Leases Minimum Payments

 

    (Thousands)  
    Optex Systems
Richardson
    Applied Optics Center 
Dallas
    Applied Optics Center 
Dallas Sublease
       
Fiscal Year   Lease
Payments
    CAM
Estimate
    Lease
Payments
    CAM
Estimate
    Lease
Payments
    CAM
Estimate
    Total
Payments
 
2016   $ 66     $ 43     $ 143     $ 40     $ (31 )   $ (16 )   $ 245  
2017     266       88       -       -       -       -       354  
2018     271       90       -       -       -       -       361  
2019     281       92       -       -       -       -       373  
2020     291       94       -       -       -       -       385  
2021     148       48       -       -       -       -       196  
Total minimum lease payments   $ 1,323     $ 455     $ 143     $ 40     $ (31 )   $ (16 )   $ 1,914  

  

Total facilities rental and CAM expense for both facility lease agreements as of the three and six months ended March 27, 2016 was $151 and $304 thousand. Total expense under facility lease agreements as of the three and six months ended March 29, 2015 was $150 and $254 thousand.