Optex Systems Holdings Inc Commitments Disclosure
Note 8 — Commitments and Contingencies
Non-cancellable Operating Leases
The Company leases its office and manufacturing facilities for the Optex Systems, Inc. Richardson location and the Applied Optics Center Dallas location. The Company also leases certain office equipment under non-cancellable operating leases.
The leased facility under Optex Systems, Inc. located at 1420 Presidential Drive, Richardson, Texas consists of 49,100 square feet of space at the premises. The previous lease term for this location expired March 31, 2021 and the monthly base rent was $24.6 thousand through March 31, 2021. On January 11, 2021 the Company executed a sixth amendment extending the terms of the 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% on April 1 each year thereafter. The initial term included two months of rent abatement for April and May of 2021. The monthly rent includes approximately $15 thousand for additional Common Area Maintenance fees and taxes (“CAM”), to be adjusted annually based on actual expenses incurred by the landlord.
The leased facility under the Applied Optics Center located at 9839 and 9827 Chartwell Drive, Dallas, Texas, consists of 44,867 square feet of space at the premises. The previous lease term for this location expired on October 31, 2021 and the monthly base rent was $21.9 thousand through the end of the lease. On January 11, 2021 the Company executed a first amendment extending the terms of the 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 as of January 1, 2022 and escalates 2.75% on January 1 each year thereafter. The initial term includes 2 months of rent abatement for November and December of 2021. 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 rental rate. Our obligations to make payments under the lease are secured by a $125 thousand standby letter of credit. The monthly rent includes approximately $9 thousand for additional CAM, to be adjusted annually based on actual expenses incurred by the landlord.
The Company had one non-cancellable office equipment lease with a commencement date of October 1, 2018 and a term of 39 months. The lease cost for the equipment was $1.5 thousand per month from October 1, 2018 through December 31, 2021. The lease was renewed on November 18, 2021 for an additional 48 months at a cost of $1.2 thousand per month.
As of September 28, 2025, the remaining minimum base lease and estimated common area maintenance (CAM) payments under the non-cancellable office equipment and facility space leases are as follows:
Non-cancellable Operating Leases Minimum Payments
| (Thousands) | ||||||||||||||||||||
| Optex Richardson | Applied Optics Center | Office Equipment | Consolidated | |||||||||||||||||
| Fiscal Year | Facility Lease Payments | Facility Lease Payments | Lease Payments | Total Lease Payments | Total Variable CAM Estimate | |||||||||||||||
| 2026 Base year lease | $ | 346 | $ | 313 | $ | 4 | $ | 663 | $ | 293 | ||||||||||
| 2027 Base year lease | 357 | 322 | 679 | 298 | ||||||||||||||||
| 2028 Base year lease | 241 | 330 | 571 | 213 | ||||||||||||||||
| 2029 Base year lease | 83 | 83 | 30 | |||||||||||||||||
| 2030 Base year lease | ||||||||||||||||||||
| Total base lease payments | $ | 944 | $ | 1,048 | $ | 4 | $ | 1,996 | $ | 834 | ||||||||||
| Imputed interest on lease payments (1) | (62 | ) | (84 | ) | (146 | ) | ||||||||||||||
| Total Operating Lease Liability(2) | $ | 882 | 964 | $ | 4 | $ | 1,850 | |||||||||||||
| Right-of-use Asset(3) | $ | 806 | 890 | $ | 4 | $ | 1,700 | |||||||||||||
| (1) | Assumes a discount borrowing rate of 5.0% on the new lease amendments effective as of January 11, 2021. |
| (2) | Short-term and Long-term portion of Operating Lease Liability is $645 thousand and $1,205 thousand, respectively. |
| (3) | Includes $150 thousand of unamortized deferred rent. |
Total expense under both facility lease agreements for the twelve months ended September 28, 2025 was $951 thousand. Total expense under both facility lease agreements as of the twelve months ended September 29, 2024 was $905 thousand.
Total office equipment rentals included in operating expenses was $21 thousand for the twelve months ended September 28, 2025 and $24 thousand for the twelve months ended September 29, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 17, 2025 | Showing above |
| 2023 | Dec 18, 2023 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.