MPAD Micropac Industries Inc (PK)

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended May 25, 2024

 

OR

 

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number 0-5109

 

MICROPAC INDUSTRIES, INC.

 

Delaware		75-1225149
(State of Incorporation)		(IRS Employer Identification No.)
1655 State Hwy 66, Garland, Texas		75040
(Address of Principal Executive Office)		(Zip Code)

 

Registrant’s Telephone Number, including Area Code: (972) 272-3571

 

Securities Registered Pursuant to Section 12(g) of the Act: common stock, par value $0.10.

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of large accelerated filer,” accelerated filer,” smaller reporting company,” and emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	o		Emerging growth company	o
Accelerated filer	o		Smaller reporting company	x
Non-accelerated filer	o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

On July 9, 2024, there were 2,578,315 shares of Common Stock, $0.10 par value, outstanding.

 

 

MICROPAC INDUSTRIES, INC.

 

FORM 10-Q

 

May 25, 2024

 

INDEX

 

PART I - FINANCIAL INFORMATION
	ITEM 1 - FINANCIAL STATEMENTS		3
		Condensed Balance Sheets as of May 25, 2024 (unaudited) and November 30, 2023	3
		Condensed Statements of Income for the three and six months ended May 25, 2024 and May 27, 2023 (unaudited)	4
		Condensed Statements of Cash Flows for the six months ended May 25, 2024 and May 27, 2023 (unaudited)	5
		Statements of Shareholders’ Equity for the three and six months ended May 25, 2024 and May 27, 2023 (unaudited)	6
		Notes to Condensed Financial Statements (unaudited)	7
	ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		14
	ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		17
	ITEM 4 - CONTROLS AND PROCEDURES		17
PART II - OTHER INFORMATION
	ITEM 1 - LEGAL PROCEEDINGS		18
	ITEM 1A -RISK FACTORS		18
	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		18
	ITEM 3 - DEFAULTS UPON SENIOR SECURITIES		18
	ITEM 4 - MINE SAFETY DISCLOSURE		18
	ITEM 5 - OTHER INFORMATION		18
	ITEM 6 - EXHIBITS		18
SIGNATURES			18

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

MICROPAC INDUSTRIES, INC.

CONDENSED BALANCE SHEETS

(Dollars in thousands)

CURRENT ASSETS		May 25, 2024				November 30, 2023
		(Unaudited)
Cash and cash equivalents		$	11,017			$	10,299
Receivables, net of allowance for credit losses of $0 at May 25, 2024 and November 30, 2023			4,602				8,021
Other receivable			121				139
Contract assets			580				307
Inventories:
Raw materials and supplies			5,957				7,367
Work in process			7,254				4,113
Total inventories			13,211				11,480
Prepaid expenses and other assets			366				487
Total current assets			29,897				30,733
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land			1,518				1,518
Buildings			20,929				21,013
Facility improvements			766				1,126
Furniture and fixtures			2,068				2,068
Construction in process			181				181
Machinery and equipment			10,248				10,175
Total property, plant, and equipment			35,710				36,081
Less accumulated depreciation			(12,069	)			(11,982	)
Net property, plant, and equipment			23,641				24,099
Deferred income taxes, net			475				475
Total assets		$	54,013			$	55,307
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	696			$	1,491
Accrued compensation			991				958
Deferred revenue			308				618
Property taxes			320				746
Income tax			17				444
Current portion of term debt			439				432
Other accrued liabilities			25				34
Total current liabilities			2,796				4,723
Long Term Debt, net of debt issuance costs and current portion			15,106				15,316
Total liabilities			17,902				20,039
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Common stock, $.10 par value, authorized 10,000,000 shares, 3,078,315 issued and 2,578,315 outstanding at May 25, 2024 November 30, 2023			308				308
Additional paid-in-capital			1,061				983
Treasury stock, 500,000 shares, at cost			(1,250	)			(1,250	)
Retained earnings			35,992				35,227
Total shareholders’ equity			36,111				35,268
Total liabilities and shareholders’ equity		$	54,013			$	55,307

 

See accompanying notes to financial statements.

 

 

MICROPAC INDUSTRIES, INC.

CONDENSED STATEMENTS OF INCOME

(Dollars in thousands except share data)

(Unaudited)

		Three months ended								Six Months Ended
		May 25, 2024				May 27, 2023				May 25, 2024				May 27, 2023
NET SALES		$	8,063			$	7,443			$	14,181			$	13,632
COST AND EXPENSES:
Cost of goods sold			(4,972	)			(4,583	)			(8,476	)			(8,521	)
Research and development			(549	)			(625	)			(1,043	)			(1,277	)
Selling, general and administrative expenses			(2,219	)			(2,010	)			(4,131	)			(3,817	)
Total cost and expenses			(7,740	)			(7,218	)			(13,650	)			(13,615	)
OPERATING INCOME			323				225				531				17
Interest income(expense)			(10	)			(3	)			(10	)			136
Other income			706				36				711				37
INCOME BEFORE TAXES			1,019				258				1,232				190
Provision for taxes			173				44				209				32
NET INCOME		$	846			$	214			$	1,023			$	158
DIVIDENDS PER SHARE		$	-			$	-			$	0.10			$	0.10
NET INCOME PER SHARE, BASIC		$	0.33			$	0.08			$	0.40			$	0.06
WEIGHTED AVERAGE OF SHARES, BASIC			2,578,315				2,578,315				2,578,315				2,578,315
NET INCOME PER SHARE, DILUTED		$	0.32			$	0.08			$	0.39			$	0.06
WEIGHTED AVERAGE OF SHARES, DILUTED			2,609,509				2,613,965				2,609,509				2,613,965

 

See accompanying notes to financial statements.

 

 

MICROPAC INDUSTRIES, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

		Six months ended
CASH FLOWS FROM OPERATING ACTIVITIES:		May 25, 2024				May 27, 2023
Net income		$	1,023			$	158
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation			531				376
Stock-based compensation			78				39
Amortization of right-of-use asset			-				14
Amortization of debt issuance costs			8				33
Gain on sale of building			(706	)			-
Changes in certain current assets and liabilities:
Decrease in accounts receivable			3,437				391
Increase in contract assets			(273	)			(458	)
Increase in inventories			(1,730	)			(1,658	)
Decrease in prepaid expenses			120				196
Decrease in deferred revenue			(310	)			(463	)
Decrease in accounts payable			(796	)			(346	)
Increase (decrease) in accrued compensation			33				(215	)
Decrease in income taxes payable			(427	)			(111	)
Decrease in lease liability			-				(14)
Decrease in property taxes			(427	)			(234	)
Decrease in all other accrued liabilities			(7	)			(5	)
Net cash provided by (used in) operating activities			554				(2,297	)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment			(73	)			(2,381	)
Proceeds from the sale of property, plant and equipment			706				-
Net cash used in investing activities			633				(2,381	)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividend			(258	)			(258	)
Proceeds from long term debt			-				1,222
Payments on long term debt			(211	)			-
Net cash (used in) provided by financing activities			(469	)			964
Net increase (decrease) in cash and cash equivalents			718				(3,714	)
Cash and cash equivalents at beginning of period			10,299				15,375
Cash and cash equivalents at end of period		$	11,017			$	11,661
Supplemental Cash Flow Disclosure:
Cash paid for income taxes		$	637			$	143
Supplemental Non-Cash Flow Disclosure:
Changes in accrued property, plant, and equipment		$	-			$	10

 

See accompanying notes to financial statements.

 

 

MICROPAC INDUSTRIES, INC.

STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED MAY 25, 2024 AND MAY 27, 2023

(Dollars in thousands)

(Unaudited)

		Common				Additional				Treasury				Retained
		Stock				paid-in-capital				Stock				Earnings				Total
BALANCE, November 30, 2022		$	308			$	885			$	(1,250	)		$	34,853			$	34,796
Dividend			-				-				-				(258	)			(258	)
Net loss			-				-				-				(56	)			(56	)
BALANCE, February 26, 2023		$	308			$	885			$	(1,250	)		$	34,539			$	34,482
Stock-based compensation			-				39				-				-				39
Net income			-				-				-				214				214
BALANCE, May 27, 2023		$	308			$	924			$	(1,250	)		$	34,753			$	34,735

 

			Common				Additional				Treasury				Retained
			Stock				paid-in-capital				Stock				Earnings				Total
BALANCE, November 30, 2023		$	308			$	983			$	(1,250	)		$	35,227			$	35,268
Stock-based compensation			-				39				-				-				39
Dividend			-				-				-				(258	)			(258	)
Net income			-				-				-				177				177
BALANCE, February 24, 2024		$	308			$	1,022			$	(1,250	)		$	35,146			$	35,226
Stock-based compensation			-				39				-				-				39
Net income			-				-				-				846				846
BALANCE, May 25, 2024		$	308			$	1,061			$	(1,250	)		$	35,992			$	36,111

 

See accompanying notes to financial statements.

 

 

MICROPAC INDUSTRIES, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

 

Note 1 BASIS OF PRESENTATION

 

Business Description

 

Micropac Industries, Inc. (the “Company”), a Delaware corporation, designs, manufactures and distributes various types of microelectronic circuits including solid state relays and power controllers, optoelectronic components, and sensor and display components and assemblies. The Company’s products are used as components and assemblies in a broad range of military, space, medical and commercial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200^o C) products.

 

The Company’s facilities are certified and qualified by the Defense Logistics Agency (DLA) to MIL-PRF-38534 (class K-space level) and MIL-PRF-19500 JANS (space level) and are certified to ISO 9001:2015 and AS 9100D. Micropac is a National Aeronautics and Space Administration (NASA) core supplier and is registered to AS9100-Aerospace Industry standard for supplier certification. The Company has Underwriters Laboratories (UL) approval on our industrial power controllers.

 

The Company’s core technology are microelectronic and optoelectronic designs to include the packaging and interconnecting of multi-chip microelectronics modules. Other technologies include light emitting and light sensitive materials and products, including light emitting diodes and silicon phototransistors, and electronic integration used in the Company’s optoelectronic components and assemblies.

 

The business of the Company was started in 1963 as a sole proprietorship. On March 3, 1969, the Company was incorporated under the name of “Micropac Industries, Inc.” in the state of Delaware. The stock was publicly held by 434 shareholders on May 25, 2024.

 

In the opinion of management, the unaudited financial statements include all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the financial position as of May 25, 2024, the results of operations for the three and six months ended May 25, 2024 and May 27, 2023 and the cash flows for the six months ended May 25, 2024 and May 27, 2023. Unaudited financial statements are prepared on a basis substantially consistent with those audited for the year ended November 30, 2023. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to the rules and regulations promulgated by the Securities and Exchange Commission (SEC). The Company’s fiscal year ends on the last day of November. The quarterly results end on the last Saturday of the quarter.

 

It is suggested that these financial statements be read in conjunction with the November 30, 2023 Form 10-K filed with the SEC, including the audited financial statements and the accompanying notes thereto.

 

Note 2 SIGNIFICANT ACCOUNTING POLICIES

 

Revenue Recognition

 

The core principle of revenue recognition under accounting principles generally accepted in the Unites States of America (GAAP) is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

 

The Company's revenue on the majority of its customer contracts are recognized at a point in time, generally upon shipment of products.

 

To achieve that core principle, the Company applies the following steps:

 

1.

Identify the contract(s) with a customer.

 

The Company designs, manufactures and distributes various types of microelectronic circuits, optoelectronics, and sensors and displays. The Company’s products are used as components and assemblies in a broad range of military, space, medical and industrial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200^o C) products.

 

7

 

The Company’s revenues are from purchase orders and/or contracts with customers associated with manufacture of products. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

 

2.

Identify the performance obligations in the contract.

 

The majority of the Company’s purchase orders or contracts with customers contain a single performance obligation, the shipment of products.

 

3.

Determine the transaction price.

 

The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer at a fixed price per unit shipped based on the terms of the contract or purchase order with the customer. To the extent our actual costs vary from the fixed price that was negotiated, we will generate more or less profit or could incur a loss.

 

4.

Allocate the transaction price to the performance obligations in the contract.

 

The Company’s transaction price is the fixed price per unit per each delivery upon shipment.

 

5.

Recognize revenue when (or as) the Company satisfies a performance obligation.

 

This performance obligation is satisfied when control of the product is transferred to the customer, which occurs upon shipment or delivery. The Company receives purchase orders for products to be delivered over multiple dates that may extend across reporting periods. The Company accounting policy treats shipping and handling activities as a fulfillment cost. The Company invoices for each delivery upon shipment and recognizes revenues at the fixed price for each distinct product delivered when transfer of control has occurred, which is generally upon shipment.

 

For certain contracts under which the Company produces products with no alternative use and for which the Company has an enforceable right to payment during the production cycle, the Company recognizes revenue for the cost incurred of work in process plus a margin at the end of each period and records a contract asset (unbilled receivable). The majority of these products are shipped weekly and monthly to the customers and the contracts require us to manage and limit the level of work in process to meet the scheduled delivery dates.

 

In addition, the Company may have a contract or purchase order to provide a non-recurring engineering service to a customer. These contracts are reviewed, and performance obligations are determined and we recognize revenue at the point in time in which each performance obligation is fully satisfied.

 

Disaggregation of Revenue

 

The following table summarizes the Company’s net sales by product line.

Schedule of net sales by product line
		Three months ended								Six months ended
		25-May-24				27-May-23				25-May-24				27-May-23
Microcircuits		$	3,340			$	1,574			$	5,829			$	2,650
Optoeletronics			1,759				2,147				3,259				4,008
Sensors and Displays			2,964				3,722				5,093				6,974
		$	8,063			$	7,443			$	14,181			$	13,632
Timing of revenue recognition
Transferred at a point in time		$	7,235			$	6,054			$	12,164			$	11,221
Transferred over time			828				1,389				2,017				2,411
Total Revenue		$	8,063			$	7,443			$	14,181			$	13,632

 

8

 

The following table summarizes the Company’s net sales by major market.

Schedule of net sales by major market
2024 Second Quarter Sales by Major Market
		Military				Space				Medical				Commercial				Total
Domestic Direct		$	3,992			$	110			$	487			$	420			$	5,009
Domestic Distribution			2,117				33				-				352				2,502
International			177				278				-				97				552
		$	6,286			$	421			$	487			$	869			$	8,063

 

2023 Second Quarter Sales by Major Market
		Military				Space				Medical				Commercial				Total
Domestic Direct		$	3,006			$	827			$	826			$	609			$	5,268
Domestic Distribution			1,143				239				4				268				1,654
International			71				162				-				288				521
		$	4,220			$	1,228			$	830			$	1,165			$	7,443

 

2024 Six Months Sales by Major Market
		Military				Space				Medical				Commercial				Total
Domestic Direct		$	6,831			$	307			$	855			$	1,021			$	9,014
Domestic Distribution			3,342				180				-				729				4,251
International			274				381				-				261				916
		$	10,447			$	868			$	855			$	2,011			$	14,181

 

2023 Six Months Sales by Major Market
		Military				Space				Medical				Commercial				Total
Domestic Direct		$	4,315			$	727			$	1,780			$	1,915			$	8,737
Domestic Distribution			2,879				800				-				419				4,098
International			99				164				-				534				797
		$	7,293			$	1,691			$	1,780			$	2,868			$	13,632

 

Receivables, net, Contract Assets and Contract Liabilities

 

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (deferred revenue) on the Condensed Balance Sheet. 

 

Receivables, net, contract assets and contract liabilities were as follows:

Schedule of receivables, net, contract assets and contract liabilities
		Receivables, net, Contract Assets and Contract Liabilities (Dollars in thousands)
		May 25, 2024				November 30, 2023				December 1, 2022
Receivables, net		$	4,602			$	8,021			$	3,644
Contract assets		$	580			$	307			$	408
Deferred revenue		$	308			$	618			$	1,192

 

There was $398,331 of revenue recognized in fiscal year 2024 that was included in the deferred revenue liability balance at the beginning of the fiscal year.

 

Contract costs

 

The Company does not have material incremental costs to obtain a contract in the form of sales commissions or bonuses. The Company incurs other immaterial costs to obtain and fulfill a contract; however, the Company has elected the practical expedient under ASC 340-40-24-4 to recognize all incremental costs to obtain a contract as an expense when incurred if the amortization period is one year or less.

 

9

 

Leases

 

In the first quarter of 2020, the Company entered into a three (3) year lease extension on the property that has been leased on a year to year basis. As a result, we recognized $165,000 for an operating lease liabilities and right-of-use assets in accordance with ASC 842. The Company had an operating lease expense of $14,000 for 2023. The Company used an estimated incremental borrowing rate of 3.25% representative of the rate of interest that the company would have to pay to borrow on the Company’s line of credit. The lease expired in March 2023 and was not renewed.

 

Inventories

 

Inventories are stated at lower of cost or net realizable value and include material, labor and manufacturing overhead. All inventories are valued using the FIFO (first-in, first-out) method of inventory valuation. The Company determines the need to write inventory down to the lower of cost or net realizable value via an analysis based on the usage of inventory over a three year period and projected usage based on current backlog.

 

Income Taxes

 

The Company accounts for income taxes using the asset and liability method. Under this method the Company records deferred income taxes for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. The resulting deferred tax liabilities and assets are adjusted to reflect changes in tax law or rates in the period that includes the enactment date.

 

The Company records a liability for an unrecognized tax benefit for a tax position that is not “more-likely-than-not” to be sustained.  The Company did not record any liability for uncertain tax positions as of May 25, 2024 or November 30, 2023.

 

Property, Plant, and Equipment

 

Property, plant, and equipment are carried at cost, and depreciation is provided using the straight-line method at rates based upon the following estimated useful lives (in years) of the assets:

Schedule of property,plant and equipment useful lives
Buildings	15-30
Facility improvements	8-15
Machinery and equipment	5-10
Furniture and fixtures	5-8

 

The Company assesses long-lived assets for impairment in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) ASC 360-10-35, Property, Plant and Equipment – Subsequent Measurement. When events or circumstances indicate that an asset may be impaired, an assessment is performed. The estimated future undiscounted cash flows associated with the asset are compared to the asset’s net book value to determine if a write down to market value less cost to sell is required.

 

Construction in progress relates to multiple capital projects ongoing during the year ended November 30, 2023 and the six months ended May 25, 2024.

 

Repairs and maintenance are expensed as incurred. Improvements which extend the useful lives of property, plant, and equipment are capitalized.

 

During the second quarter of 2024, the company recognized a gain of approximately $706,000 from the completion of sale of one manufacturing facility which resulted in a disposal of approximately $444,000 of fully depreciated assets.

 

Research and Development Costs

 

Costs for the design and development of new products are expensed as incurred.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

10

 

Note 3 NEW ACCOUNTING PRONOUNCEMENTS

 

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. The ASU requires the use of an “expected loss” model for instruments measured at amortized cost, in which companies will be required to estimate the lifetime expected credit loss and record an allowance to offset the amortized cost basis, resulting in a net presentation of the amount expected to be collected on the financial asset. The new guidance is effective for fiscal years beginning after December 15, 2022 for Smaller Reporting Companies, including interim periods within those fiscal years and requires a modified-retrospective approach to adoption. The Company adopted ASU 2016-13 on December 1, 2023, and had no material impact on the financial statements and related disclosures.

 

Note 4 FAIR VALUE MEASUREMENT

 

The Company had no financial assets or liabilities measured at fair value on a recurring basis as of May 25, 2024 or November 30, 2023.  The fair value of financial instruments such as cash and cash equivalents, accounts receivable, and accounts payable approximate their carrying amount based on the short maturity of these instruments.

 

The Company measures its long-term debt at fair value, which approximates book value as the long-term debt bears market rates of interest

 

There were no nonfinancial assets measured at fair value on a nonrecurring basis May 25, 2024 and November 30, 2023.

 

Note 5 COMMITMENTS

 

The Company obtained a commercial real estate construction loan for the construction of a new 76,000 square foot manufacturing center on the 9.2 acres of land in Garland, Texas that the Company has purchased. On March 26, 2021, the Company (acting as borrower) entered into a Construction Loan Agreement (the “loan agreement”) with Frost Bank (“Frost”) (acting as lender). The Construction Loan Agreement provides for a construction loan, in amounts not to exceed a total principal balance of $16,160,000 with an interest rate of (3.40%) per annum.

 

On May 16, 2023, the Company renewed the Revolving Loan Agreement with Frost through the “Seventh Amendment to Loan Agreement.” (See Exhibit 10.15). The Revolving Loan Agreement provides for revolving credit loans, in amounts not to exceed a total principal balance of $6,000,000 with a rate equal to prime rate with a floor of 3.25%. The Revolving Loan Agreement was originally entered into on January 23, 2013, between the Company as borrower and Frost as lender.  

 

Construction Loans.  Subject to the terms of the Loan Agreement, Frost will lend to the Company an aggregate amount not to exceed $16,160,000.

 

Principal and interest shall be due and payable monthly in an amounts determined by Lender required to fully amortize the outstanding principal balance of this Note over a period of twenty-five (25) years, payable on the twenty-sixth (26th) day of each and every calendar month, beginning April 26, 2023, and continuing regularly thereafter until March 26, 2031, when the entire amount hereof, principal and accrued interest then remaining unpaid, shall be then due and payable; interest being calculated on the unpaid principal each day principal is outstanding and all payments made credited to any collection costs and late charges, to the discharge of the interest accrued and to the reduction of the principal, in such order as Lender shall determine.

 

The interest rate of (3.40%) per annum including an Interest-Only Period. Interest only shall be due and payable monthly as it accrues on the twenty-sixth (26th) day of each and every calendar month, beginning April 26, 2021, and continuing regularly and monthly thereafter until March 26, 2023; interest being calculated on the unpaid principal each day principal is outstanding and all payments made credited to any collection costs and late charges, to the discharge of the interest accrued and to the reduction of the principal, in such order as Lender shall determine.

 

The loan shall be secured by a “Deed of Trust, Security Agreement – Financing Statement” covering the 9.2-acre tract in Garland, Texas and the improvements made on it.

 

Revolving Credit Loans.  Subject to the terms of the, Loan Agreement, Frost will lend to the Company, on a revolving basis, amounts not to exceed a total principal balance of $6,000,000, minus amounts available and amounts previously disbursed under outstanding Frost letters of credit. Subject to certain terms and conditions, the Company may borrow, repay and reborrow under the Loan Agreement. There are no borrowings outstanding as of May 27, 2023. The loan has a maturity date of April 23, 2025.

 

The interest on the outstanding and unpaid principal balance shall be computed at a per annum rate equal to the lesser of (a) a rate equal to the Prime Rate per annum; provided, however, in no event shall the resulting rate be less than three and one-quarter percent (3.25%).

 

11

 

The Company has borrowed $16,160,000 against the construction loan as of May 25, 2024.

Schedule of long-term debt
Debt May 25, 2024
Notes payable		$	15,673,000
Less unamortized debt issuance costs			128,000
Net Debt			15,545,000
Less—Current portion			439,000
Total long-term debt		$	15,106,000

 

Estimated maturities of our long-term debt over the next 5 years are as follows (in thousands):

Estimated maturities of long-term debt
		2024 Remaining				2025				2026				2027				2028				Thereafter				Total
Notes payable		$	218			$	463			$	463			$	479			$	495			$	13,555			$	15,673

 

Note 6 EARNINGS PER COMMON SHARE

 

Basic and diluted earnings per share are computed based upon the weighted average number of shares outstanding during the year. Diluted earnings per share gives effect to all dilutive potential common shares.

 

The following is a reconciliation of the number of shares used in the calculation of the basic and diluted earnings per share for the three and six months ended May 25, 2024 and May 27, 2023:

Schedule of the basic and diluted earnings per share
		Three months ended								Six Months Ended
		May 25, 2024				May 27, 2023				May 25, 2024				May 27, 2023
Weighted average of shares, basic			2,578,315				2,578,315				2,578,315				2,578,315
Restricted stock units			31,194				35,650				31,194				35,650
Weighted average of shares, diluted			2,609,509				2,613,965				2,609,509				2,613,965

 

Note 7 SHAREHOLDERS’ EQUITY

 

On December 5, 2023, the Board of Directors of Micropac Industries, Inc. approved the payment of a $0.10 per share special dividend to all shareholders of record as of January 10, 2024. The dividend was paid to shareholders on February 9, 2024.

 

On December 7, 2022, the Board of Directors of Micropac Industries, Inc. approved the payment of a $0.10 per share special dividend to all shareholders of record as of January 11, 2023. The dividend was paid to shareholders on February 10, 2023.

 

NOTE 8 STOCK-BASED COMPENSATION

 

We have one restricted stock units ("RSUs") stock-based compensation award as part of Micropac Industries Inc.’s 2023 Equity Incentive Plan. The following table sets forth the stock-based compensation expense recorded in selling, general and administrative ("SG&A") expense (in thousands):

 

The following is a summary of our RSUs activity for six months ended May 25, 2024 and May 27, 2023:

Schedule of restricted stock units activity
		2024								2023
(shares in thousands)		Number				Weighted-				Number				Weighted-
		of				Average				of				Average
		Shares				Grant Date Fair Value				Shares				Grant Date Fair Value
Unvested at beginning of period			31.2			$	13.13				-				-
Granted			-				-				35.7			$	13.13
Vested			7.4			$	13.13				-				-
Cancelled			-				-				-				-
Unvested at end of the period			23.8			$	13.13				35.7			$	13.13

 

12

 

The following table sets forth the stock-based compensation expense recorded in selling, general and administrative ("SG&A") expense (in thousands):

Schedule of stock-based compensation
		May 25, 2024 and May 27, 2023
		Three Months Ended								Six Months Ended
		2024				2023				2024				2023
Stock-based compensation expense		$	39.00			$	39.0			$	78.00			$	39.0

 

The following table sets forth the stock-based unvested compensation expense by year to be recognized (in thousands):

Schedule of stock-based unvested compensation expense
		2024				2025				Total
Stock-based unvested compensation expense		$	156			$	156			$	312

 

 

 

[The remainder of this page intentionally left blank.]

 

 

MICROPAC INDUSTRIES, INC.

(Unaudited)

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Business

 

Micropac Industries, Inc. (the “Company”), a Delaware corporation, designs, manufactures and distributes various types of microelectronic circuits including solid state relays and power controllers, optoelectronic components, and sensor and display components and assemblies. The Company’s products are used as components and assemblies in a broad range of military, space and industrial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200^o C) products.

 

The Company’s facilities are certified and qualified by the Defense Logistics Agency (DLA) to MIL-PRF-38534 (class K-space level) and MIL-PRF-19500 JANS (space level) and are certified to ISO 9001:2008 and AS 9100D. Micropac is a National Aeronautics and Space Administration (NASA) core supplier, and is registered to AS9100-Aerospace Industry standard for supplier certification. The Company has Underwriters Laboratories (UL) approval on our industrial power controllers.

 

The Company’s core technology are microelectronic and optoelectronic designs to include the packaging and interconnecting of multi-chip microelectronics modules. Other technologies include light emitting and light sensitive materials and products, including light emitting diodes and silicon phototransistors, and electronic integration used in the Company’s optoelectronic components and assemblies.

 

Critical Accounting Policies

 

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions and factors that are believed to be reasonable under the circumstances. Note 2 to the Financial Statements in the Quarterly Report Form 10-Q for the quarter ended May 25, 2024, describes the significant accounting policies and methods used in the preparation of the Financial Statements. liabilities. Actual results could differ from these estimates.

 

The core principle of revenue recognition under accounting principles generally accepted in the United States of America (GAAP) is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company’s revenue on the majority of its customer contracts are recognized at a point in time, generally upon shipment of products. The application of GAAP related to the measurement and recognition of revenue requires us to make judgments and estimates. Specifically, the determination of whether revenues related to our revenue contracts should be recognized over time or at a point in time, as these determinations impact the timing and amount of our reported revenues and net income. Other significant judgments include the estimation of the point in the manufacturing process at which we are entitled to receive payment, as well as the progress of the job order to completion in order to determine the amount of consideration earned for contractual revenue recognized over time.

 

The allowance for credit losses accounts is based on our assessment of the collectability of specific customer accounts and the aging of the accounts receivable. If there is a deterioration of a major customer’s credit worthiness or actual defaults are higher than our historical experience, our estimates of the recoverability of amounts due us could be adversely affected.

 

Inventory purchases and commitments are based upon future demand. If there is a sudden and significant decrease in demand for our products or there is a higher risk of inventory obsolescence because of changing customer requirements, we may be required to increase our inventory allowances and our gross margin could be adversely affected.

 

The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. If we were to determine we would not be able to realize all or part of the deferred tax asset in the future, an adjustment to the deferred tax asset would be necessary which would reduce our net income for that period.

 

Depreciable and useful lives estimated for property and equipment are based on initial expectations of the period of time these assets will provide benefit. Changes in circumstances related to a change in our business or other factors could result in these assets becoming impaired, which could adversely affect the value of these assets.

 

 

Results of Operations

		Three months ended								Six months ended
			5/25/2024				5/27/2023				5/25/2024				5/27/2023
NET SALES			100.0	%			100.0	%			100.0	%			100.0	%
COST AND EXPENSES:
Cost of goods sold			61.7	%			61.6	%			59.8	%			62.5	%
Research and development			6.8	%			8.4	%			7.4	%			9.4	%
Selling, general & administrative expenses			27.5	%			27.0	%			29.1	%			28.0	%
Total cost and expenses			96.0	%			97.0	%			96.3	%			99.9	%
OPERATING INCOME BEFORE INTEREST AND INCOME TAXES			4.0	%			3.0	%			3.7	%			0.1	%
Interest			(0.1	)%			-				(0.1	)%			1.0	%
Other income			8.7	%			0.5	%			5.1	%			0.3	%
INCOME BEFORE TAXES			12.6	%			3.5	%			8.7	%			1.4	%
Provision for taxes			2.1	%			0.6	%			1.5	%			0.2	%
NET INCOME			10.5	%			2.9	%			7.2	%			1.2	%

 

Sales for the three and six month periods ended May 25, 2024 totaled $8,063,000 and $14,181,000, respectively. Sales for the second quarter increased $620,000 from the same period of 2023 while sales for the first six months of 2024 increased $549,000 from the first six months of 2023. The majority of the increase is related to timing of shipments of customer orders of standard microelectronic products. Sales were 14% in the commercial market, 6% in the medical market, 74% in the military market, and 6% in the space market for the six months ended May 25, 2024 compared to 21% in the commercial market, 13% in the medical market, 54% in the military market, and 12% in the space market for the six months ended May 27, 2023.

 

Three customers accounted for 20%,18%, and 17% of the Company’s sales for the three months ended May 25, 2024, and three customers accounted for 19%, 16%, and 12% for the six months ended May 25, 2024, while three customers accounted for 12% and 11% and 7% of the Company’s sales for the three months ended May 27,2023 and one customer accounted for 13% and two customers accounted for 8% for the six months ended May 27, 2023.

 

Cost of goods sold for the second quarters of 2024 and 2023 totaled 61.7% and 61.6% of net sales, respectively, while cost of goods sold for the six months ended May 25, 2024 and May 27, 2023 totaled 59.8% and 62.5% of net sales, respectively. In actual dollars, cost of goods sold increased $389,000 in the second quarter of 2024 compared to the same period of 2023. Year to date cost of goods sold decreased $45,000 for the first six months of 2024 as compared to the same period in 2023.

 

Research and development expense decreased $76,000 for the second quarter of 2024 versus 2023 and decreased $234,000 for the first six months of 2024 compared to the same period of 2023. The research and development expenditures were associated with continued development of several power management products, sensor products, and process automation improvements.

 

Selling, general and administrative expense for the second quarter and first six months of 2024 totaled 27.5% and 29.1% respectively of net sales compared to 27.0% and 28.0% for the same periods in 2023. In actual dollars, selling, general and administrative expense increased $209,000 for the second quarter and increased $313,000 for the first six months of 2024 compared to the same periods in 2023. The majority of the increase for the first six months resulted from an increase in consulting and depreciation on the new building.

 

Provisions for taxes increased $129,000 for the second quarter of 2024 and increased $177,000 for the first six months of 2024 compared to the same period in 2023. The estimated effective tax rate was 17% for 2024 and 17% for 2023.

 

 

Net income increased $632,000 for the second quarter of 2024 versus 2023 and increased $865,000 for the first six months of 2024 compared to the same period of 2023.

 

Liquidity and Capital Resources

 

The Company used a combination of cash and a commercial real estate construction loan for the construction of a new 76,000 square foot manufacturing center on the 9.2 acres of land in Garland, Texas the Company purchased. On March 26, 2021, the Company (acting as borrower) entered into a Construction Loan Agreement with Frost Bank (“Frost”), (acting as lender). The Construction Loan Agreement provides for a construction loan as discussed in Note 5 to the condensed financial statements.

 

As of May 25, 2024, the Company has $15,673,000 in notes payable on the construction loan. In addition, the Company has unamortized loan fees on the construction loan in the amount of $127,000.

 

In addition, the Company continues on-going investigations for the use of cumulative cash for business expansion and improvements, such as operational improvements and new product expansion.

 

Cash and cash equivalents totaled $11,017,000 as of May 25, 2024 compared to $10,299,000 on November 30, 2023, an increase of $718,000. The increase in cash and cash equivalents is attributable to $1,252,000 cash provided by operations, $203,000 payments on long term debt, payment of a cash dividend of $258,000 and $73,000 in cash for additional manufacturing equipment.

 

In addition to cash on hand, the Company also has the ability to borrow under a loan agreement as discussed in Note 5 to the condensed financial statements.

 

The Company has no significant off-balance sheet arrangements.

 

Outlook

 

New orders for year-to-date 2024 totaled $14,175,000 compared to $19,362,000 for 2023. The decrease resulted from timing of new orders for several custom products booked in 2023.

 

Backlog totaled $37,006,000 on May 25, 2024 compared to $39,203,000 as of May 27, 2023 and $36,370,000 on November 30, 2023 and represents a good mix of the company’s products and technologies.

 

2024 Current Backlog by Major Market
		Military				Space				Medical				Commercial				Total
Domestic Direct		$	14,306			$	161			$	2,687			$	4,665			$	21,819
Domestic Distribution			11,595				2,019				12				850				14,476
International			82				453				-				176				711
		$	25,983			$	2,633			$	2,699			$	5,691			$	37,006

 

2024 Current Backlog by Product Line
Microelectronics		$	18,119
Optoelectronics			4,835
Sensors and Displays			14,052
		$	37,006

 

The Company cannot assure that the results of operations for the interim period presented are indicative of total results for the entire year due to fluctuations in customer delivery schedules, or other factors over which the Company has no control.

 

Impact of COVID-19 on our Business

 

In March 2020 the World Health Organization declared the spread of the COVID-19 virus a pandemic.

 

The Company continues to monitor our supply chain and orders from customers for COVID-19 pandemic related changes. We are continuing to serve our customers while taking precautions to provide a safe work environment for our employees and customers. We have been staggering some shifts and otherwise adjusting work schedules to maximize our capacity while adhering to recommended precautions. We have established and implemented a work from home provision where possible.

 

 

To date, we have not experienced significant raw material shortages; however, supply-chain disruptions could potentially delay or prevent us from fulfilling customer orders.

 

Cautionary Statement

 

This Form 10-Q contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially. Investors are warned that forward-looking statements involve risks and unknown factors including, but not limited to: our expectations regarding the potential impacts on our operations of the COVID-19 pandemic; our expectations regarding the potential impacts on our supply chain and on our customers of the COVID-19 pandemic; overall changes in governmental spending for military and space programs; customer cancellation or rescheduling of orders, problems affecting delivery of vendor-supplied raw materials and components, unanticipated manufacturing problems and availability of direct labor resources.

 

The Company does not intend to update the forward-looking statements contained herein, except as may be required by law.

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable

 

ITEM 4.

CONTROLS AND PROCEDURES

 

(a)

Evaluation of disclosure controls and procedures.

 

The Chief Executive Officer and Chief Financial Officer of the Company evaluated the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15) as of May 25, 2024 and, based on this evaluation, concluded that the Company’s disclosure controls and procedures are functioning in an effective manner to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

 

(b)

Changes in internal controls.

 

There has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting during the six month period ended May 25, 2024.

 

 

PART II - OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS

 

The Company is not involved in any material current or pending legal proceedings.

 

ITEM 1A

RISK FACTORS

 

Information about risk factors for the three and six months ended May 25, 2024 does not differ materially from that set forth in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended November 30, 2023

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4.

MINE SAFETY DISCLOSURE

 

Not Applicable

 

ITEM 5.

OTHER INFORMATION

 

None

 

ITEM 6.

EXHIBITS

 

(a)		Exhibits
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002.
32.2		Certification of Chief Accounting Officer pursuant to 18 U. S. C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized.

 

 

MICROPAC INDUSTRIES, INC.

 

July 9, 2024		/s/ Mark King
Date		Mark King
		Chief Executive Officer
July 9, 2024		/s/ Patrick Cefalu
Date		Patrick Cefalu
		Chief Financial Officer

 

 

18

 

 

 

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Mark King, certify that:

 

1.

I have reviewed this quarterly report of Micropac Industries, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

Dated: July 9, 2024	/s/ Mark King
	Mark King
	Chief Executive Officer
	(Principal Executive Officer)

 

 

 

 

 

 

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Patrick S. Cefalu, certify that:

 

1.

I have reviewed this quarterly report of Micropac Industries, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

Dated: July 9, 2024	/s/ Patrick Cefalu
	Patrick S. Cefalu
	Executive Vice President and Chief Financial Officer
	(Principal Accounting Officer)

 

 

 

 

 

 

EXHIBIT 32.1

 

CERTIFICATION
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Micropac Industries, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

 

1.

The Quarterly Report on Form 10-Q for the period ended May 25, 2024 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.

The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Dated: July 9, 2024	/s/ Mark King
	Mark King
	Chief Executive Officer
	(Principal Executive Officer)

 

 

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 

 

 

EXHIBIT 32.2

 

CERTIFICATION
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Micropac Industries, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

 

1.

The Quarterly Report on Form 10-Q for the period ended May 25, 2024 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.

The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Dated July 9, 2024	/s/ Patrick Cefalu
	Patrick S. Cefalu
	Executive Vice President and Chief Financial Officer
	(Principal Accounting Officer)

 

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 

 

v3.24.2

Cover - shares	6 Months Ended
	May 25, 2024	Jul. 09, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	May 25, 2024
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2025
Current Fiscal Year End Date	--11-30
Entity File Number	0-5109
Entity Registrant Name	MICROPAC INDUSTRIES, INC.
Entity Central Index Key	0000065759
Entity Tax Identification Number	75-1225149
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1655 State Hwy 66
Entity Address, City or Town	Garland
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75040
City Area Code	(972)
Local Phone Number	272-3571
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,578,315

v3.24.2

CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	May 25, 2024	Nov. 30, 2023
CURRENT ASSETS
Cash and cash equivalents	$ 11,017	$ 10,299
Receivables, net of allowance for credit losses of $0 at May 25, 2024 and November 30, 2023	4,602	8,021
Other receivable	121	139
Contract assets	580	307
Inventories:
Raw materials and supplies	5,957	7,367
Work in process	7,254	4,113
Total inventories	13,211	11,480
Prepaid expenses and other assets	366	487
Total current assets	29,897	30,733
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land	1,518	1,518
Buildings	20,929	21,013
Facility improvements	766	1,126
Furniture and fixtures	2,068	2,068
Construction in process	181	181
Machinery and equipment	10,248	10,175
Total property, plant, and equipment	35,710	36,081
Less accumulated depreciation	(12,069)	(11,982)
Net property, plant, and equipment	23,641	24,099
Deferred income taxes, net	475	475
Total assets	54,013	55,307
CURRENT LIABILITIES:
Accounts payable	696	1,491
Accrued compensation	991	958
Deferred revenue	308	618
Property taxes	320	746
Income tax	17	444
Current portion of term debt	439	432
Other accrued liabilities	25	34
Total current liabilities	2,796	4,723
Long Term Debt, net of debt issuance costs and current portion	15,106	15,316
Total liabilities	17,902	20,039
SHAREHOLDERS’ EQUITY
Common stock, $.10 par value, authorized 10,000,000 shares, 3,078,315 issued and 2,578,315 outstanding at May 25, 2024 November 30, 2023	308	308
Additional paid-in-capital	1,061	983
Treasury stock, 500,000 shares, at cost	(1,250)	(1,250)
Retained earnings	35,992	35,227
Total shareholders’ equity	36,111	35,268
Total liabilities and shareholders’ equity	$ 54,013	$ 55,307

v3.24.2

CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	May 25, 2024	Nov. 30, 2023
Statement of Financial Position [Abstract]
Accounts Receivable, Allowance for Credit Loss, Current	$ 0	$ 0
Common stock, par value per share	$ 0.10	$ 0.10
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	3,078,315	3,078,315
Common stock, shares outstanding	2,578,315	2,578,315
Treasury stock, shares	500,000	500,000

v3.24.2

CONDENSED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	May 25, 2024	May 27, 2023	May 25, 2024	May 27, 2023
Income Statement [Abstract]
NET SALES	$ 8,063	$ 7,443	$ 14,181	$ 13,632
COST AND EXPENSES:
Cost of goods sold	(4,972)	(4,583)	(8,476)	(8,521)
Research and development	(549)	(625)	(1,043)	(1,277)
Selling, general and administrative expenses	(2,219)	(2,010)	(4,131)	(3,817)
Total cost and expenses	(7,740)	(7,218)	(13,650)	(13,615)
OPERATING INCOME	323	225	531	17
Interest income(expense)	(10)	(3)	(10)	136
Other income	706	36	711	37
INCOME BEFORE TAXES	1,019	258	1,232	190
Provision for taxes	173	44	209	32
NET INCOME	$ 846	$ 214	$ 1,023	$ 158
DIVIDENDS PER SHARE			$ 0.10	$ 0.10
NET INCOME PER SHARE, BASIC	$ 0.33	$ 0.08	$ 0.40	$ 0.06
WEIGHTED AVERAGE OF SHARES, BASIC	2,578,315	2,578,315	2,578,315	2,578,315
NET INCOME PER SHARE, DILUTED	$ 0.32	$ 0.08	$ 0.39	$ 0.06
WEIGHTED AVERAGE OF SHARES, DILUTED	2,609,509	2,613,965	2,609,509	2,613,965

v3.24.2

CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	May 25, 2024	May 27, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 1,023	$ 158
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	531	376
Stock-based compensation	78	39
Amortization of right-of-use asset		14
Amortization of debt issuance costs	8	33
Gain on sale of building	(706)
Changes in certain current assets and liabilities:
Decrease in accounts receivable	3,437	391
Increase in contract assets	(273)	(458)
Increase in inventories	(1,730)	(1,658)
Decrease in prepaid expenses	120	196
Decrease in deferred revenue	(310)	(463)
Decrease in accounts payable	(796)	(346)
Increase (decrease) in accrued compensation	33	(215)
Decrease in income taxes payable	(427)	(111)
Decrease in lease liability		(14)
Decrease in property taxes	(427)	(234)
Decrease in all other accrued liabilities	(7)	(5)
Net cash provided by (used in) operating activities	554	(2,297)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment	(73)	(2,381)
Proceeds from the sale of property, plant and equipment	706
Net cash used in investing activities	633	(2,381)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividend	(258)	(258)
Proceeds from long term debt		1,222
Payments on long term debt	(211)
Net cash (used in) provided by financing activities	(469)	964
Net increase (decrease) in cash and cash equivalents	718	(3,714)
Cash and cash equivalents at beginning of period	10,299	15,375
Cash and cash equivalents at end of period	11,017	11,661
Supplemental Cash Flow Disclosure:
Cash paid for income taxes	637	143
Supplemental Non-Cash Flow Disclosure:
Changes in accrued property, plant, and equipment		$ 10

v3.24.2

STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stocks [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Nov. 30, 2022	$ 308	$ 885	$ (1,250)	$ 34,853	$ 34,796
Dividend				(258)	(258)
Net income				(56)	(56)
Ending balance, value at Feb. 25, 2023	308	885	(1,250)	34,539	34,482
Stock-based compensation		39			39
Net income				214	214
Ending balance, value at May. 27, 2023	308	924	(1,250)	34,753	34,735
Beginning balance, value at Nov. 30, 2023	308	983	(1,250)	35,227	35,268
Stock-based compensation		39			39
Dividend				(258)	(258)
Net income				177	177
Ending balance, value at Feb. 24, 2024	308	1,022	(1,250)	35,146	35,226
Stock-based compensation		39			39
Net income				846	846
Ending balance, value at May. 25, 2024	$ 308	$ 1,061	$ (1,250)	$ 35,992	$ 36,111

v3.24.2

BASIS OF PRESENTATION	6 Months Ended
	May 25, 2024
Accounting Policies [Abstract]
BASIS OF PRESENTATION	Note 1 BASIS OF PRESENTATION   Business Description   Micropac Industries, Inc. (the “Company”), a Delaware corporation, designs, manufactures and distributes various types of microelectronic circuits including solid state relays and power controllers, optoelectronic components, and sensor and display components and assemblies. The Company’s products are used as components and assemblies in a broad range of military, space, medical and commercial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200o C) products.   The Company’s facilities are certified and qualified by the Defense Logistics Agency (DLA) to MIL-PRF-38534 (class K-space level) and MIL-PRF-19500 JANS (space level) and are certified to ISO 9001:2015 and AS 9100D. Micropac is a National Aeronautics and Space Administration (NASA) core supplier and is registered to AS9100-Aerospace Industry standard for supplier certification. The Company has Underwriters Laboratories (UL) approval on our industrial power controllers.   The Company’s core technology are microelectronic and optoelectronic designs to include the packaging and interconnecting of multi-chip microelectronics modules. Other technologies include light emitting and light sensitive materials and products, including light emitting diodes and silicon phototransistors, and electronic integration used in the Company’s optoelectronic components and assemblies.   The business of the Company was started in 1963 as a sole proprietorship. On March 3, 1969, the Company was incorporated under the name of “Micropac Industries, Inc.” in the state of Delaware. The stock was publicly held by 434 shareholders on May 25, 2024.   In the opinion of management, the unaudited financial statements include all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the financial position as of May 25, 2024, the results of operations for the three and six months ended May 25, 2024 and May 27, 2023 and the cash flows for the six months ended May 25, 2024 and May 27, 2023. Unaudited financial statements are prepared on a basis substantially consistent with those audited for the year ended November 30, 2023. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to the rules and regulations promulgated by the Securities and Exchange Commission (SEC). The Company’s fiscal year ends on the last day of November. The quarterly results end on the last Saturday of the quarter.   It is suggested that these financial statements be read in conjunction with the November 30, 2023 Form 10-K filed with the SEC, including the audited financial statements and the accompanying notes thereto.

v3.24.2

SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	May 25, 2024
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	Note 2 SIGNIFICANT ACCOUNTING POLICIES   Revenue Recognition   The core principle of revenue recognition under accounting principles generally accepted in the Unites States of America (GAAP) is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.   The Company's revenue on the majority of its customer contracts are recognized at a point in time, generally upon shipment of products.   To achieve that core principle, the Company applies the following steps:   1. Identify the contract(s) with a customer.   The Company designs, manufactures and distributes various types of microelectronic circuits, optoelectronics, and sensors and displays. The Company’s products are used as components and assemblies in a broad range of military, space, medical and industrial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200o C) products.   The Company’s revenues are from purchase orders and/or contracts with customers associated with manufacture of products. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.   2. Identify the performance obligations in the contract.   The majority of the Company’s purchase orders or contracts with customers contain a single performance obligation, the shipment of products.   3. Determine the transaction price.   The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer at a fixed price per unit shipped based on the terms of the contract or purchase order with the customer. To the extent our actual costs vary from the fixed price that was negotiated, we will generate more or less profit or could incur a loss.   4. Allocate the transaction price to the performance obligations in the contract.   The Company’s transaction price is the fixed price per unit per each delivery upon shipment.   5. Recognize revenue when (or as) the Company satisfies a performance obligation.   This performance obligation is satisfied when control of the product is transferred to the customer, which occurs upon shipment or delivery. The Company receives purchase orders for products to be delivered over multiple dates that may extend across reporting periods. The Company accounting policy treats shipping and handling activities as a fulfillment cost. The Company invoices for each delivery upon shipment and recognizes revenues at the fixed price for each distinct product delivered when transfer of control has occurred, which is generally upon shipment.   For certain contracts under which the Company produces products with no alternative use and for which the Company has an enforceable right to payment during the production cycle, the Company recognizes revenue for the cost incurred of work in process plus a margin at the end of each period and records a contract asset (unbilled receivable). The majority of these products are shipped weekly and monthly to the customers and the contracts require us to manage and limit the level of work in process to meet the scheduled delivery dates.   In addition, the Company may have a contract or purchase order to provide a non-recurring engineering service to a customer. These contracts are reviewed, and performance obligations are determined and we recognize revenue at the point in time in which each performance obligation is fully satisfied.   Disaggregation of Revenue   The following table summarizes the Company’s net sales by product line. Schedule of net sales by product line                                     Three months ended     Six months ended       25-May-24     27-May-23     25-May-24     27-May-23   Microcircuits   $ 3,340     $ 1,574     $ 5,829     $ 2,650   Optoeletronics     1,759       2,147       3,259       4,008   Sensors and Displays     2,964       3,722       5,093       6,974       $ 8,063     $ 7,443     $ 14,181     $ 13,632                                     Timing of revenue recognition                                 Transferred at a point in time   $ 7,235     $ 6,054     $ 12,164     $ 11,221   Transferred over time     828       1,389       2,017       2,411   Total Revenue   $ 8,063     $ 7,443     $ 14,181     $ 13,632     The following table summarizes the Company’s net sales by major market. Schedule of net sales by major market                                         2024 Second Quarter Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 3,992     $ 110     $ 487     $ 420     $ 5,009   Domestic Distribution     2,117       33       -       352       2,502   International     177       278       -       97       552       $ 6,286     $ 421     $ 487     $ 869     $ 8,063     2023 Second Quarter Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 3,006     $ 827     $ 826     $ 609     $ 5,268   Domestic Distribution     1,143       239       4       268       1,654   International     71       162       -       288       521       $ 4,220     $ 1,228     $ 830     $ 1,165     $ 7,443     2024 Six Months Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 6,831     $ 307     $ 855     $ 1,021     $ 9,014   Domestic Distribution     3,342       180       -       729       4,251   International     274       381       -       261       916       $ 10,447     $ 868     $ 855     $ 2,011     $ 14,181     2023 Six Months Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 4,315     $ 727     $ 1,780     $ 1,915     $ 8,737   Domestic Distribution     2,879       800       -       419       4,098   International     99       164       -       534       797       $ 7,293     $ 1,691     $ 1,780     $ 2,868     $ 13,632     Receivables, net, Contract Assets and Contract Liabilities   The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (deferred revenue) on the Condensed Balance Sheet.    Receivables, net, contract assets and contract liabilities were as follows: Schedule of receivables, net, contract assets and contract liabilities                             Receivables, net, Contract Assets and Contract Liabilities (Dollars in thousands)               May 25, 2024     November 30, 2023     December 1, 2022   Receivables, net   $ 4,602     $ 8,021     $ 3,644   Contract assets   $ 580     $ 307     $ 408   Deferred revenue   $ 308     $ 618     $ 1,192     There was $398,331 of revenue recognized in fiscal year 2024 that was included in the deferred revenue liability balance at the beginning of the fiscal year.   Contract costs   The Company does not have material incremental costs to obtain a contract in the form of sales commissions or bonuses. The Company incurs other immaterial costs to obtain and fulfill a contract; however, the Company has elected the practical expedient under ASC 340-40-24-4 to recognize all incremental costs to obtain a contract as an expense when incurred if the amortization period is one year or less.   Leases   In the first quarter of 2020, the Company entered into a three (3) year lease extension on the property that has been leased on a year to year basis. As a result, we recognized $165,000 for an operating lease liabilities and right-of-use assets in accordance with ASC 842. The Company had an operating lease expense of $14,000 for 2023. The Company used an estimated incremental borrowing rate of 3.25% representative of the rate of interest that the company would have to pay to borrow on the Company’s line of credit. The lease expired in March 2023 and was not renewed.   Inventories   Inventories are stated at lower of cost or net realizable value and include material, labor and manufacturing overhead. All inventories are valued using the FIFO (first-in, first-out) method of inventory valuation. The Company determines the need to write inventory down to the lower of cost or net realizable value via an analysis based on the usage of inventory over a three year period and projected usage based on current backlog.   Income Taxes   The Company accounts for income taxes using the asset and liability method. Under this method the Company records deferred income taxes for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. The resulting deferred tax liabilities and assets are adjusted to reflect changes in tax law or rates in the period that includes the enactment date.   The Company records a liability for an unrecognized tax benefit for a tax position that is not “more-likely-than-not” to be sustained.  The Company did not record any liability for uncertain tax positions as of May 25, 2024 or November 30, 2023.   Property, Plant, and Equipment   Property, plant, and equipment are carried at cost, and depreciation is provided using the straight-line method at rates based upon the following estimated useful lives (in years) of the assets: Schedule of property,plant and equipment useful lives   Buildings 15-30 Facility improvements 8-15 Machinery and equipment 5-10 Furniture and fixtures 5-8   The Company assesses long-lived assets for impairment in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) ASC 360-10-35, Property, Plant and Equipment – Subsequent Measurement. When events or circumstances indicate that an asset may be impaired, an assessment is performed. The estimated future undiscounted cash flows associated with the asset are compared to the asset’s net book value to determine if a write down to market value less cost to sell is required.   Construction in progress relates to multiple capital projects ongoing during the year ended November 30, 2023 and the six months ended May 25, 2024.   Repairs and maintenance are expensed as incurred. Improvements which extend the useful lives of property, plant, and equipment are capitalized.   During the second quarter of 2024, the company recognized a gain of approximately $706,000 from the completion of sale of one manufacturing facility which resulted in a disposal of approximately $444,000 of fully depreciated assets.   Research and Development Costs   Costs for the design and development of new products are expensed as incurred.   Use of Estimates   The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

v3.24.2

NEW ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	May 25, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NEW ACCOUNTING PRONOUNCEMENTS	Note 3 NEW ACCOUNTING PRONOUNCEMENTS   In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. The ASU requires the use of an “expected loss” model for instruments measured at amortized cost, in which companies will be required to estimate the lifetime expected credit loss and record an allowance to offset the amortized cost basis, resulting in a net presentation of the amount expected to be collected on the financial asset. The new guidance is effective for fiscal years beginning after December 15, 2022 for Smaller Reporting Companies, including interim periods within those fiscal years and requires a modified-retrospective approach to adoption. The Company adopted ASU 2016-13 on December 1, 2023, and had no material impact on the financial statements and related disclosures.

v3.24.2

FAIR VALUE MEASUREMENT	6 Months Ended
	May 25, 2024
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENT	Note 4 FAIR VALUE MEASUREMENT   The Company had no financial assets or liabilities measured at fair value on a recurring basis as of May 25, 2024 or November 30, 2023.  The fair value of financial instruments such as cash and cash equivalents, accounts receivable, and accounts payable approximate their carrying amount based on the short maturity of these instruments.   The Company measures its long-term debt at fair value, which approximates book value as the long-term debt bears market rates of interest   There were no nonfinancial assets measured at fair value on a nonrecurring basis May 25, 2024 and November 30, 2023.

v3.24.2

COMMITMENTS	6 Months Ended
	May 25, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS	Note 5 COMMITMENTS   The Company obtained a commercial real estate construction loan for the construction of a new 76,000 square foot manufacturing center on the 9.2 acres of land in Garland, Texas that the Company has purchased. On March 26, 2021, the Company (acting as borrower) entered into a Construction Loan Agreement (the “loan agreement”) with Frost Bank (“Frost”) (acting as lender). The Construction Loan Agreement provides for a construction loan, in amounts not to exceed a total principal balance of $16,160,000 with an interest rate of (3.40%) per annum.   On May 16, 2023, the Company renewed the Revolving Loan Agreement with Frost through the “Seventh Amendment to Loan Agreement.” (See Exhibit 10.15). The Revolving Loan Agreement provides for revolving credit loans, in amounts not to exceed a total principal balance of $6,000,000 with a rate equal to prime rate with a floor of 3.25%. The Revolving Loan Agreement was originally entered into on January 23, 2013, between the Company as borrower and Frost as lender.     Construction Loans.  Subject to the terms of the Loan Agreement, Frost will lend to the Company an aggregate amount not to exceed $16,160,000.   Principal and interest shall be due and payable monthly in an amounts determined by Lender required to fully amortize the outstanding principal balance of this Note over a period of twenty-five (25) years, payable on the twenty-sixth (26th) day of each and every calendar month, beginning April 26, 2023, and continuing regularly thereafter until March 26, 2031, when the entire amount hereof, principal and accrued interest then remaining unpaid, shall be then due and payable; interest being calculated on the unpaid principal each day principal is outstanding and all payments made credited to any collection costs and late charges, to the discharge of the interest accrued and to the reduction of the principal, in such order as Lender shall determine.   The interest rate of (3.40%) per annum including an Interest-Only Period. Interest only shall be due and payable monthly as it accrues on the twenty-sixth (26th) day of each and every calendar month, beginning April 26, 2021, and continuing regularly and monthly thereafter until March 26, 2023; interest being calculated on the unpaid principal each day principal is outstanding and all payments made credited to any collection costs and late charges, to the discharge of the interest accrued and to the reduction of the principal, in such order as Lender shall determine.   The loan shall be secured by a “Deed of Trust, Security Agreement – Financing Statement” covering the 9.2-acre tract in Garland, Texas and the improvements made on it.   Revolving Credit Loans.  Subject to the terms of the, Loan Agreement, Frost will lend to the Company, on a revolving basis, amounts not to exceed a total principal balance of $6,000,000, minus amounts available and amounts previously disbursed under outstanding Frost letters of credit. Subject to certain terms and conditions, the Company may borrow, repay and reborrow under the Loan Agreement. There are no borrowings outstanding as of May 27, 2023. The loan has a maturity date of April 23, 2025.   The interest on the outstanding and unpaid principal balance shall be computed at a per annum rate equal to the lesser of (a) a rate equal to the Prime Rate per annum; provided, however, in no event shall the resulting rate be less than three and one-quarter percent (3.25%).   The Company has borrowed $16,160,000 against the construction loan as of May 25, 2024. Schedule of long-term debt         Debt May 25, 2024       Notes payable   $ 15,673,000   Less unamortized debt issuance costs     128,000   Net Debt     15,545,000   Less—Current portion     439,000   Total long-term debt   $ 15,106,000     Estimated maturities of our long-term debt over the next 5 years are as follows (in thousands): Estimated maturities of long-term debt                                                             2024 Remaining     2025     2026     2027     2028     Thereafter     Total   Notes payable   $ 218     $ 463     $ 463     $ 479     $ 495     $ 13,555     $ 15,673

v3.24.2

EARNINGS PER COMMON SHARE	6 Months Ended
	May 25, 2024
Earnings Per Share [Abstract]
EARNINGS PER COMMON SHARE	Note 6 EARNINGS PER COMMON SHARE   Basic and diluted earnings per share are computed based upon the weighted average number of shares outstanding during the year. Diluted earnings per share gives effect to all dilutive potential common shares.   The following is a reconciliation of the number of shares used in the calculation of the basic and diluted earnings per share for the three and six months ended May 25, 2024 and May 27, 2023: Schedule of the basic and diluted earnings per share                                     Three months ended     Six Months Ended       May 25, 2024     May 27, 2023     May 25, 2024     May 27, 2023                             Weighted average of shares, basic     2,578,315       2,578,315       2,578,315       2,578,315          Restricted stock units     31,194       35,650       31,194       35,650   Weighted average of shares, diluted     2,609,509       2,613,965       2,609,509       2,613,965

v3.24.2

SHAREHOLDERS’ EQUITY	6 Months Ended
	May 25, 2024
Equity [Abstract]
SHAREHOLDERS’ EQUITY	Note 7 SHAREHOLDERS’ EQUITY   On December 5, 2023, the Board of Directors of Micropac Industries, Inc. approved the payment of a $0.10 per share special dividend to all shareholders of record as of January 10, 2024. The dividend was paid to shareholders on February 9, 2024.   On December 7, 2022, the Board of Directors of Micropac Industries, Inc. approved the payment of a $0.10 per share special dividend to all shareholders of record as of January 11, 2023. The dividend was paid to shareholders on February 10, 2023.

v3.24.2

STOCK-BASED COMPENSATION	6 Months Ended
	May 25, 2024
Stock-based Compensation
STOCK-BASED COMPENSATION	NOTE 8 STOCK-BASED COMPENSATION   We have one restricted stock units ("RSUs") stock-based compensation award as part of Micropac Industries Inc.’s 2023 Equity Incentive Plan. The following table sets forth the stock-based compensation expense recorded in selling, general and administrative ("SG&A") expense (in thousands):   The following is a summary of our RSUs activity for six months ended May 25, 2024 and May 27, 2023: Schedule of restricted stock units activity                                     2024     2023   (shares in thousands)   Number     Weighted-     Number     Weighted-       of     Average     of     Average       Shares     Grant Date Fair Value     Shares     Grant Date Fair Value   Unvested at beginning of period     31.2     $ 13.13       -       -   Granted     -       -       35.7     $ 13.13   Vested     7.4     $ 13.13       -       -   Cancelled     -       -       -       -   Unvested at end of the period     23.8     $ 13.13       35.7     $ 13.13     The following table sets forth the stock-based compensation expense recorded in selling, general and administrative ("SG&A") expense (in thousands): Schedule of stock-based compensation                                     May 25, 2024 and May 27, 2023       Three Months Ended     Six Months Ended       2024     2023     2024     2023   Stock-based compensation expense   $ 39.00     $ 39.0     $ 78.00     $ 39.0     The following table sets forth the stock-based unvested compensation expense by year to be recognized (in thousands): Schedule of stock-based unvested compensation expense                             2024     2025     Total   Stock-based unvested compensation expense   $ 156     $ 156     $ 312

v3.24.2

SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	May 25, 2024
Accounting Policies [Abstract]
Revenue Recognition	Revenue Recognition   The core principle of revenue recognition under accounting principles generally accepted in the Unites States of America (GAAP) is that the Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.   The Company's revenue on the majority of its customer contracts are recognized at a point in time, generally upon shipment of products.   To achieve that core principle, the Company applies the following steps:   1. Identify the contract(s) with a customer.   The Company designs, manufactures and distributes various types of microelectronic circuits, optoelectronics, and sensors and displays. The Company’s products are used as components and assemblies in a broad range of military, space, medical and industrial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, medical devices, and high-temperature (200o C) products.   The Company’s revenues are from purchase orders and/or contracts with customers associated with manufacture of products. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.   2. Identify the performance obligations in the contract.   The majority of the Company’s purchase orders or contracts with customers contain a single performance obligation, the shipment of products.   3. Determine the transaction price.   The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer at a fixed price per unit shipped based on the terms of the contract or purchase order with the customer. To the extent our actual costs vary from the fixed price that was negotiated, we will generate more or less profit or could incur a loss.   4. Allocate the transaction price to the performance obligations in the contract.   The Company’s transaction price is the fixed price per unit per each delivery upon shipment.   5. Recognize revenue when (or as) the Company satisfies a performance obligation.   This performance obligation is satisfied when control of the product is transferred to the customer, which occurs upon shipment or delivery. The Company receives purchase orders for products to be delivered over multiple dates that may extend across reporting periods. The Company accounting policy treats shipping and handling activities as a fulfillment cost. The Company invoices for each delivery upon shipment and recognizes revenues at the fixed price for each distinct product delivered when transfer of control has occurred, which is generally upon shipment.   For certain contracts under which the Company produces products with no alternative use and for which the Company has an enforceable right to payment during the production cycle, the Company recognizes revenue for the cost incurred of work in process plus a margin at the end of each period and records a contract asset (unbilled receivable). The majority of these products are shipped weekly and monthly to the customers and the contracts require us to manage and limit the level of work in process to meet the scheduled delivery dates.   In addition, the Company may have a contract or purchase order to provide a non-recurring engineering service to a customer. These contracts are reviewed, and performance obligations are determined and we recognize revenue at the point in time in which each performance obligation is fully satisfied.
Disaggregation of Revenue	Disaggregation of Revenue   The following table summarizes the Company’s net sales by product line. Schedule of net sales by product line                                     Three months ended     Six months ended       25-May-24     27-May-23     25-May-24     27-May-23   Microcircuits   $ 3,340     $ 1,574     $ 5,829     $ 2,650   Optoeletronics     1,759       2,147       3,259       4,008   Sensors and Displays     2,964       3,722       5,093       6,974       $ 8,063     $ 7,443     $ 14,181     $ 13,632                                     Timing of revenue recognition                                 Transferred at a point in time   $ 7,235     $ 6,054     $ 12,164     $ 11,221   Transferred over time     828       1,389       2,017       2,411   Total Revenue   $ 8,063     $ 7,443     $ 14,181     $ 13,632     The following table summarizes the Company’s net sales by major market. Schedule of net sales by major market                                         2024 Second Quarter Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 3,992     $ 110     $ 487     $ 420     $ 5,009   Domestic Distribution     2,117       33       -       352       2,502   International     177       278       -       97       552       $ 6,286     $ 421     $ 487     $ 869     $ 8,063     2023 Second Quarter Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 3,006     $ 827     $ 826     $ 609     $ 5,268   Domestic Distribution     1,143       239       4       268       1,654   International     71       162       -       288       521       $ 4,220     $ 1,228     $ 830     $ 1,165     $ 7,443     2024 Six Months Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 6,831     $ 307     $ 855     $ 1,021     $ 9,014   Domestic Distribution     3,342       180       -       729       4,251   International     274       381       -       261       916       $ 10,447     $ 868     $ 855     $ 2,011     $ 14,181     2023 Six Months Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 4,315     $ 727     $ 1,780     $ 1,915     $ 8,737   Domestic Distribution     2,879       800       -       419       4,098   International     99       164       -       534       797       $ 7,293     $ 1,691     $ 1,780     $ 2,868     $ 13,632
Receivables, net, Contract Assets and Contract Liabilities	Receivables, net, Contract Assets and Contract Liabilities   The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (deferred revenue) on the Condensed Balance Sheet.    Receivables, net, contract assets and contract liabilities were as follows: Schedule of receivables, net, contract assets and contract liabilities                             Receivables, net, Contract Assets and Contract Liabilities (Dollars in thousands)               May 25, 2024     November 30, 2023     December 1, 2022   Receivables, net   $ 4,602     $ 8,021     $ 3,644   Contract assets   $ 580     $ 307     $ 408   Deferred revenue   $ 308     $ 618     $ 1,192     There was $398,331 of revenue recognized in fiscal year 2024 that was included in the deferred revenue liability balance at the beginning of the fiscal year.
Contract costs	Contract costs   The Company does not have material incremental costs to obtain a contract in the form of sales commissions or bonuses. The Company incurs other immaterial costs to obtain and fulfill a contract; however, the Company has elected the practical expedient under ASC 340-40-24-4 to recognize all incremental costs to obtain a contract as an expense when incurred if the amortization period is one year or less.
Leases	Leases   In the first quarter of 2020, the Company entered into a three (3) year lease extension on the property that has been leased on a year to year basis. As a result, we recognized $165,000 for an operating lease liabilities and right-of-use assets in accordance with ASC 842. The Company had an operating lease expense of $14,000 for 2023. The Company used an estimated incremental borrowing rate of 3.25% representative of the rate of interest that the company would have to pay to borrow on the Company’s line of credit. The lease expired in March 2023 and was not renewed.
Inventories	Inventories   Inventories are stated at lower of cost or net realizable value and include material, labor and manufacturing overhead. All inventories are valued using the FIFO (first-in, first-out) method of inventory valuation. The Company determines the need to write inventory down to the lower of cost or net realizable value via an analysis based on the usage of inventory over a three year period and projected usage based on current backlog.
Income Taxes	Income Taxes   The Company accounts for income taxes using the asset and liability method. Under this method the Company records deferred income taxes for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. The resulting deferred tax liabilities and assets are adjusted to reflect changes in tax law or rates in the period that includes the enactment date.   The Company records a liability for an unrecognized tax benefit for a tax position that is not “more-likely-than-not” to be sustained.  The Company did not record any liability for uncertain tax positions as of May 25, 2024 or November 30, 2023.
Property, Plant, and Equipment	Property, Plant, and Equipment   Property, plant, and equipment are carried at cost, and depreciation is provided using the straight-line method at rates based upon the following estimated useful lives (in years) of the assets: Schedule of property,plant and equipment useful lives   Buildings 15-30 Facility improvements 8-15 Machinery and equipment 5-10 Furniture and fixtures 5-8   The Company assesses long-lived assets for impairment in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) ASC 360-10-35, Property, Plant and Equipment – Subsequent Measurement. When events or circumstances indicate that an asset may be impaired, an assessment is performed. The estimated future undiscounted cash flows associated with the asset are compared to the asset’s net book value to determine if a write down to market value less cost to sell is required.   Construction in progress relates to multiple capital projects ongoing during the year ended November 30, 2023 and the six months ended May 25, 2024.   Repairs and maintenance are expensed as incurred. Improvements which extend the useful lives of property, plant, and equipment are capitalized.   During the second quarter of 2024, the company recognized a gain of approximately $706,000 from the completion of sale of one manufacturing facility which resulted in a disposal of approximately $444,000 of fully depreciated assets.
Research and Development Costs	Research and Development Costs   Costs for the design and development of new products are expensed as incurred.
Use of Estimates	Use of Estimates   The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

v3.24.2

SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	May 25, 2024
Accounting Policies [Abstract]
Schedule of net sales by product line	Schedule of net sales by product line                                     Three months ended     Six months ended       25-May-24     27-May-23     25-May-24     27-May-23   Microcircuits   $ 3,340     $ 1,574     $ 5,829     $ 2,650   Optoeletronics     1,759       2,147       3,259       4,008   Sensors and Displays     2,964       3,722       5,093       6,974       $ 8,063     $ 7,443     $ 14,181     $ 13,632                                     Timing of revenue recognition                                 Transferred at a point in time   $ 7,235     $ 6,054     $ 12,164     $ 11,221   Transferred over time     828       1,389       2,017       2,411   Total Revenue   $ 8,063     $ 7,443     $ 14,181     $ 13,632
Schedule of net sales by major market	Schedule of net sales by major market                                         2024 Second Quarter Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 3,992     $ 110     $ 487     $ 420     $ 5,009   Domestic Distribution     2,117       33       -       352       2,502   International     177       278       -       97       552       $ 6,286     $ 421     $ 487     $ 869     $ 8,063     2023 Second Quarter Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 3,006     $ 827     $ 826     $ 609     $ 5,268   Domestic Distribution     1,143       239       4       268       1,654   International     71       162       -       288       521       $ 4,220     $ 1,228     $ 830     $ 1,165     $ 7,443     2024 Six Months Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 6,831     $ 307     $ 855     $ 1,021     $ 9,014   Domestic Distribution     3,342       180       -       729       4,251   International     274       381       -       261       916       $ 10,447     $ 868     $ 855     $ 2,011     $ 14,181     2023 Six Months Sales by Major Market     Military     Space     Medical     Commercial     Total   Domestic Direct   $ 4,315     $ 727     $ 1,780     $ 1,915     $ 8,737   Domestic Distribution     2,879       800       -       419       4,098   International     99       164       -       534       797       $ 7,293     $ 1,691     $ 1,780     $ 2,868     $ 13,632
Schedule of receivables, net, contract assets and contract liabilities	Schedule of receivables, net, contract assets and contract liabilities                             Receivables, net, Contract Assets and Contract Liabilities (Dollars in thousands)               May 25, 2024     November 30, 2023     December 1, 2022   Receivables, net   $ 4,602     $ 8,021     $ 3,644   Contract assets   $ 580     $ 307     $ 408   Deferred revenue   $ 308     $ 618     $ 1,192
Schedule of property,plant and equipment useful lives	Schedule of property,plant and equipment useful lives   Buildings 15-30 Facility improvements 8-15 Machinery and equipment 5-10 Furniture and fixtures 5-8

v3.24.2

COMMITMENTS (Tables)	6 Months Ended
	May 25, 2024
Commitments and Contingencies Disclosure [Abstract]
Schedule of long-term debt	Schedule of long-term debt         Debt May 25, 2024       Notes payable   $ 15,673,000   Less unamortized debt issuance costs     128,000   Net Debt     15,545,000   Less—Current portion     439,000   Total long-term debt   $ 15,106,000
Estimated maturities of long-term debt	Estimated maturities of long-term debt                                                             2024 Remaining     2025     2026     2027     2028     Thereafter     Total   Notes payable   $ 218     $ 463     $ 463     $ 479     $ 495     $ 13,555     $ 15,673

v3.24.2

EARNINGS PER COMMON SHARE (Tables)	6 Months Ended
	May 25, 2024
Earnings Per Share [Abstract]
Schedule of the basic and diluted earnings per share	Schedule of the basic and diluted earnings per share                                     Three months ended     Six Months Ended       May 25, 2024     May 27, 2023     May 25, 2024     May 27, 2023                             Weighted average of shares, basic     2,578,315       2,578,315       2,578,315       2,578,315          Restricted stock units     31,194       35,650       31,194       35,650   Weighted average of shares, diluted     2,609,509       2,613,965       2,609,509       2,613,965

v3.24.2

STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	May 25, 2024
Stock-based Compensation
Schedule of restricted stock units activity	Schedule of restricted stock units activity                                     2024     2023   (shares in thousands)   Number     Weighted-     Number     Weighted-       of     Average     of     Average       Shares     Grant Date Fair Value     Shares     Grant Date Fair Value   Unvested at beginning of period     31.2     $ 13.13       -       -   Granted     -       -       35.7     $ 13.13   Vested     7.4     $ 13.13       -       -   Cancelled     -       -       -       -   Unvested at end of the period     23.8     $ 13.13       35.7     $ 13.13
Schedule of stock-based compensation	Schedule of stock-based compensation                                     May 25, 2024 and May 27, 2023       Three Months Ended     Six Months Ended       2024     2023     2024     2023   Stock-based compensation expense   $ 39.00     $ 39.0     $ 78.00     $ 39.0
Schedule of stock-based unvested compensation expense	Schedule of stock-based unvested compensation expense                             2024     2025     Total   Stock-based unvested compensation expense   $ 156     $ 156     $ 312

v3.24.2

SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	May 25, 2024	May 27, 2023	May 25, 2024	May 27, 2023
Product Information [Line Items]
Total Revenue	$ 8,063	$ 7,443	$ 14,181	$ 13,632
Transferred at Point in Time [Member]
Product Information [Line Items]
Total Revenue	7,235	6,054	12,164	11,221
Transferred over Time [Member]
Product Information [Line Items]
Total Revenue	828	1,389	2,017	2,411
Microcircuits [Member]
Product Information [Line Items]
Total Revenue	3,340	1,574	5,829	2,650
Optoeletronics [Member]
Product Information [Line Items]
Total Revenue	1,759	2,147	3,259	4,008
Sensorsand Displays [Member]
Product Information [Line Items]
Total Revenue	$ 2,964	$ 3,722	$ 5,093	$ 6,974

v3.24.2

SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	May 25, 2024	May 27, 2023	May 25, 2024	May 27, 2023
Domestic Direct	$ 5,009	$ 5,268	$ 9,014	$ 8,737
Domestic Distribution	2,502	1,654	4,251	4,098
International	552	521	916	797
Revenue	8,063	7,443	14,181	13,632
Military [Member]
Domestic Direct	3,992	3,006	6,831	4,315
Domestic Distribution	2,117	1,143	3,342	2,879
International	177	71	274	99
Revenue	6,286	4,220	10,447	7,293
Space [Member]
Domestic Direct	110	827	307	727
Domestic Distribution	33	239	180	800
International	278	162	381	164
Revenue	421	1,228	868	1,691
Medical [Member]
Domestic Direct	487	826	855	1,780
Domestic Distribution		4
International
Revenue	487	830	855	1,780
Commercial [Member]
Domestic Direct	420	609	1,021	1,915
Domestic Distribution	352	268	729	419
International	97	288	261	534
Revenue	$ 869	$ 1,165	$ 2,011	$ 2,868

v3.24.2

SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands	May 25, 2024	Nov. 30, 2023	Dec. 02, 2022
Accounting Policies [Abstract]
Receivables, net	$ 4,602	$ 8,021	$ 3,644
Contract assets	580	307	408
Deferred revenue	$ 308	$ 618	$ 1,192

v3.24.2

SIGNIFICANT ACCOUNTING POLICIES (Details 3)	May 25, 2024
Minimum [Member] | Building [Member]
Property, Plant and Equipment [Line Items]
Furniture and fixtures	15 years
Minimum [Member] | Facility Improvements [Member]
Property, Plant and Equipment [Line Items]
Furniture and fixtures	8 years
Minimum [Member] | Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Furniture and fixtures	5 years
Minimum [Member] | Furniture Fixtures [Member]
Property, Plant and Equipment [Line Items]
Furniture and fixtures	5 years
Maximum [Member] | Building [Member]
Property, Plant and Equipment [Line Items]
Furniture and fixtures	30 years
Maximum [Member] | Facility Improvements [Member]
Property, Plant and Equipment [Line Items]
Furniture and fixtures	15 years
Maximum [Member] | Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Furniture and fixtures	10 years
Maximum [Member] | Furniture Fixtures [Member]
Property, Plant and Equipment [Line Items]
Furniture and fixtures	8 years

v3.24.2

SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Feb. 24, 2020	May 25, 2024	May 27, 2023	Nov. 30, 2023
Accounting Policies [Abstract]
Deferred Revenue recognized		$ 398,331
Lease term	3 years
Operating lease liabilities	$ 165
Right-of-use assets	$ 165
Operating lease expense			$ 14
Borrowing rate	3.25%
Uncertain tax positions		0		$ 0
Gain on sale of manufacturing facility		706
Sale of manufacturing facility		$ 444

v3.24.2

FAIR VALUE MEASUREMENT (Details Narrative) - USD ($) $ in Thousands	May 25, 2024	Nov. 30, 2023
Fair Value Disclosures [Abstract]
Fair value financial assets liabilities recurring basis	$ 0	$ 0
Fair value non financial assets non recurring basis	$ 0	$ 0

v3.24.2

COMMITMENTS (Details) - USD ($) $ in Thousands	May 25, 2024	Nov. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Notes payable	$ 15,673
Less unamortized debt issuance costs	128
Net Debt	15,545
Less—Current portion	439
Total long-term debt	$ 15,106	$ 15,316

v3.24.2

COMMITMENTS (Details 1) $ in Thousands	May 25, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2024	$ 218
2025	463
2026	463
2027	479
2028	495
Thereafter	13,555
Total	$ 15,673

v3.24.2

COMMITMENTS (Details Narrative) - USD ($) $ in Thousands	6 Months Ended
	May 25, 2024	May 27, 2023	May 16, 2023	Mar. 26, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Notes Payable	$ 15,673
Borrowings outstanding		$ 0
Maurity date	Apr. 23, 2025
Construction Loan [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Notes Payable	$ 16,160
Revolving Loan [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Line of credit facility, maximum borrowing capacity			$ 6,000
Maximum Interest Rate			3.25%
Construction Loan Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Line of credit facility, maximum borrowing capacity				$ 16,160
Maximum Interest Rate				3.40%

v3.24.2

EARNINGS PER COMMON SHARE (Details) - shares	3 Months Ended		6 Months Ended
	May 25, 2024	May 27, 2023	May 25, 2024	May 27, 2023
Earnings Per Share [Abstract]
Weighted average of shares, basic	2,578,315	2,578,315	2,578,315	2,578,315
Restricted stock units	31,194	35,650	31,194	35,650
Weighted average of shares, diluted	2,609,509	2,613,965	2,609,509	2,613,965

v3.24.2

SHAREHOLDERS’ EQUITY (Details Narrative) - $ / shares	3 Months Ended		6 Months Ended
	May 25, 2024	May 27, 2023	May 25, 2024	May 27, 2023
Equity [Abstract]
Dividends payable, date declared			Dec. 05, 2023	Dec. 07, 2022
Common stock, dividends, per share, cash paid			$ 0.10	$ 0.10
Dividends payable, date of record			Jan. 10, 2024	Jan. 11, 2023
Dividends payable, date to be paid			Feb. 09, 2024	Feb. 10, 2023

v3.24.2

STOCK-BASED COMPENSATION (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares	6 Months Ended
	May 25, 2024	May 27, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares outstanding at beginning of period	31,200
Weighted average grant date fair value beginning of period	$ 13.13
Number of shares granted		35,700
Weighted average grant date fair value granted		$ 13.13
Number of shares vested	7,400
Weighted average grant date fair value vested	$ 13.13
Number of shares cancelled
Weighted average grant date fair value cancelled
Number of shares outstanding at end of the period	23,800	35,700
Weighted average grant date fair value end of the period	$ 13.13	$ 13.13

v3.24.2

STOCK-BASED COMPENSATION (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	May 25, 2024	May 27, 2023	May 25, 2024	May 27, 2023
Stock-based Compensation
Stock-based compensation expense	$ 39	$ 39	$ 78	$ 39

v3.24.2

STOCK-BASED COMPENSATION (Details 2) $ in Thousands	May 25, 2024 USD ($)
Stock-based Compensation
Stock-based unvested compensation expense for 2024	$ 156
Stock-based unvested compensation expense for 2025	156
Stock-based unvested compensation expense	$ 312

---