SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~February~~May 2425, 2024

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.)
905 E. Walnut, Garland, Texas		75040
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 ~~April~~July 9, 2024, there were 2,578,315 shares of Common Stock, $0.10 par value, outstanding.

MICROPAC INDUSTRIES, INC.

FORM 10-Q

~~February~~May 2425, 2024

INDEX

PART I - FINANCIAL INFORMATION
	ITEM 1 - FINANCIAL STATEMENTS		3
		Condensed Balance Sheets as of February 24, 2024 (unaudited) and November 30, 2023	3
		Condensed Balance Sheets as of May 25, 2024 (unaudited) and November 30, 2023	3
		Condensed Statements of Operations for the three months ended February 24, 2024 and February 25, 2023 (unaudited)	4
		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 three months ended February 24, 2024 and February 25, 2023 (unaudited)	5
		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 months ended February 24, 2024 and February 25, 2023 (unaudited)	6
		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		1314
	ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		1617
	ITEM 4 - CONTROLS AND PROCEDURES		1617
PART II - OTHER INFORMATION
	ITEM 1 - LEGAL PROCEEDINGS		1618
	ITEM 1A -RISK FACTORS		1618
	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		1618
	ITEM 3 - DEFAULTS UPON SENIOR SECURITIES		1618
	ITEM 4 - MINE SAFETY DISCLOSURE		1618
	ITEM 5 - OTHER INFORMATION		1618
	ITEM 6 - EXHIBITS		1618
SIGNATURES			1718

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MICROPAC INDUSTRIES, INC.

CONDENSED BALANCE SHEETS

(Dollars in thousands)

CURRENT ASSETS	~~February~~May 2425, 2024			November 30, 2023
	(Unaudited)
Cash and cash equivalents	$	911,~~869~~017		$	10,299
Receivables, net of allowance for credit losses of $0 at February 24, 2024 and November 30 2023		4,673			8,021
Receivables, net of allowance for credit losses of $0 at May 25, 2024 and November 30, 2023		4,602			8,021
Other receivable		~~120~~121			139
Contract assets		~~501~~580			307
Inventories:
Raw materials and supplies		85,~~607~~957			7,367
Work in process		57,~~893~~254			4,113
Total inventories		1413,~~500~~211			11,480
Prepaid expenses and other assets		~~280~~366			487
Total current assets		29,~~943~~897			30,733
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land		1,518			1,518
Buildings		2120,~~013~~929			21,013
Facility improvements		~~1,126~~766			1,126
Furniture and fixtures		2,068			2,068
Construction in process equipment		206			181
Construction in process		181			181
Machinery and equipment		10,~~189~~248			10,175
Total property, plant, and equipment		3635,~~120~~710			36,081
Less accumulated depreciation		(12,~~247~~069	)		(11,982	)
Net property, plant, and equipment		23,~~873~~641			24,099
Deferred income taxes, net		475			475
Total assets	$	54,~~291~~013		$	55,307
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	~~1,900~~696		$	1,491
Accrued compensation		~~861~~991			958
Deferred revenue		~~455~~308			618
Property taxes		~~125~~320			746
Income tax		5117			444
Current portion of long term debt		436			432
Current portion of term debt		439			432
Other accrued liabilities		25			34
Total current liabilities		32,~~853~~796			4,723
Long term debt, net of debt issuance costs and current portion		15,212			15,316
Long Term Debt, net of debt issuance costs and current portion		15,106			15,316
Total liabilities		1917,~~065~~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 February 24, 2024 and November 30 2023		308			308
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,~~022~~061			983
Treasury stock, 500,000 shares, at cost		(1,250	)		(1,250	)
Retained earnings		35,~~146~~992			35,227
Total shareholders’ equity		3536,~~226~~111			35,268
Total liabilities and shareholders’ equity	$	54,~~291~~013		$	55,307

See accompanying notes to financial statements.

MICROPAC INDUSTRIES, INC.

CONDENSED STATEMENTS OF ~~OPERATIONS~~INCOME

(Dollars in thousands except share data)

(Unaudited)

	Three months ended						Six Months Ended
	February 24, 2024			February 25, 2023
	May 25, 2024			May 27, 2023			May 25, 2024			May 27, 2023
NET SALES	$	68,~~118~~063		$	67,~~190~~443		$	14,181		$	13,632
COST AND EXPENSES:
Cost of goods sold		(34,~~504~~972	)		(34,~~939~~583	)		(8,476	)		(8,521	)
Research and development		(~~494~~549	)		(~~652~~625	)		(1,043	)		(1,277	)
Selling, general and administrative expenses		(12,~~912~~219	)		(12,~~806~~010	)		(4,131	)		(3,817	)
Total cost and expenses		(57,~~910~~740	)		(67,~~397~~218	)		(13,650	)		(13,615	)
OPERATING INCOME (LOSS)		208			(207	)
OPERATING INCOME		323			225			531			17
Interest expense		(142	)		-
Interest income(expense)		(10	)		(3	)		(10	)		136
Other income, net		147			139
Other income		706			36			711			37
INCOME (LOSS) BEFORE TAXES		213			(68	)
INCOME BEFORE TAXES		1,019			258			1,232			190
(Provision) benefit for taxes		(36	)		12
Provision for taxes		173			44			209			32
NET INCOME (LOSS)	$	177		$	(56	)
NET INCOME	$	846		$	214		$	1,023		$	158
DIVIDENDS PER SHARE	$	~~0.10~~-		$	~~0.10~~-		$	0.10		$	0.10
NET INCOME (LOSS) PER SHARE, BASIC	$	0.07		$	(0.02	)
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 (LOSS) PER SHARE, DILUTED	$	0.07		$	(0.02	)
NET INCOME PER SHARE, DILUTED	$	0.32		$	0.08		$	0.39		$	0.06
WEIGHTED AVERAGE OF SHARES, DILUTED		2,609,509			2,~~578~~613,~~315~~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)

	Three months ended
	Six months ended
CASH FLOWS FROM OPERATING ACTIVITIES:	~~February~~May 2425, 2024			~~February~~May 2527, 2023
Net income (loss)	$	177		$	(56	)
Net income	$	1,023		$	158
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		~~265~~531			~~103~~376
Stock-based compensation		3978			-39
Amortization of debt issuance cost		3			28
Amortization of right-of-use asset		-			14
Amortization of right-of-use assets		-			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,~~368~~437			~~834~~391
Increase in contract assets		(~~194~~273	)		(~~314~~458	)
Increase in inventories		(31,~~020~~730	)		(1,~~051~~658	)
Decrease (increase) in prepaid expenses and other assets		207			(29	)
Decrease in prepaid expenses		120			196
Decrease in deferred revenue		(~~162~~310	)		(~~546~~463	)
Increase in accounts payable		408			372
Decrease in accounts payable		(796	)		(346	)
Decrease in accrued compensation		(96	)		(244	)
Increase (decrease) in accrued compensation		33			(215	)
Decrease in income taxes payable		(~~394~~427	)		(~~124~~111	)
Decrease in lease liabilities		-			(14	)
Decrease in lease liability		-			(14)
Decrease in property tax liabilities		(625	)		(131	)
Decrease in property taxes		(427	)		(234	)
Decrease in all other accrued liabilities		(57	)		(~~335~~5	)
Net cash used in operating activities		(29	)		(1,493	)
Net cash provided by (used in) operating activities		554			(2,297	)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant, and equipment		(40	)		(480	)
Additions to property, plant and equipment		(73	)		(2,381	)
Net cash used in investing activities		(40	)		(480	)
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 on long term debt		-			100
Proceeds from long term debt		-			1,222
Payments on long term debt		(~~103~~211	)		-
Net cash used in financing activities		(361	)		(158	)
Net cash (used in) provided by financing activities		(469	)		964
Net increase in cash and cash equivalents		(430	)		(2,131	)
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	$	911,~~869~~017		$	1311,~~244~~661
Supplemental Cash Flow Disclosure:
Cash paid for income taxes	$	~~430~~637		$	~~118~~143
Cash paid for interest	$	138		$	130
Supplemental Non-Cash Flow Disclosure:
Changes in accrued property, plant, and equipment	$	22-		$	7510

See accompanying notes to financial statements.

MICROPAC INDUSTRIES, INC.

STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE ~~QUARTERS~~SIX MONTHS ENDED ~~FEBRUARY~~MAY 2425, 2024 AND MAY ~~FEBRUARY 25~~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 income		-		-		-			(56	)		(56	)
Net loss		-		-		-			(56	)		(56	)
BALANCE, February 25, 2023	$	308	$	885	$	(1,250	)	$	34,539		$	34,482
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~~	Common	~~Additional~~	Additional	~~Treasury~~	Treasury		~~Retained~~	Retained
	~~Stock~~	Stock	~~paid-in-capital~~	paid-in-capital	~~Stock~~	Stock		~~Earnings~~	Earnings		~~Total~~	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

~~The~~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 ~~industrial~~ commercial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, ~~and~~ medical devices, and high-temperature (200o C) products.

The Company’s facilities are certified and qualified by the ~~Defence~~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~~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 isare 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 ~~February~~May 2425, 2024.

In the opinion of management, the unaudited financial ~~statements~~ statements include all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the financial position as of ~~February 24~~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 ~~three~~six months ended ~~February~~May 2425, 2024 and ~~February~~May 2527, 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 isare 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 ~~including solid state relays and power controllers~~, ~~optoelectronic components~~optoelectronics, ~~sensor~~ and ~~display~~sensors ~~components~~ and ~~assemblies~~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, ~~and~~ medical devices, and high-temperature (200o C) products.

The Company’s revenues are from purchase orders and/or contracts with customers associated with the 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.7

7The 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
	Net Sales by Product Line (Dollars in thousands)
	Three months ended				Six months ended
	Feb. 24, 2024		Feb. 25, 2023
	25-May-24		27-May-23		25-May-24		27-May-23
Microelectronics	$	2,489	$	1,020
Microcircuits	$	3,340	$	1,574	$	5,829	$	2,650
Optoelectronics		1,500		1,857
Optoeletronics		1,759		2,147		3,259		4,008
Sensors and Displays		2,~~129~~964		3,~~313~~722		5,093		6,974
	$	68,~~118~~063	$	67,~~190~~443	$	14,181	$	13,632
Timing of revenue recognition:
Timing of revenue recognition
Recognized at a point in time	$	5,123	$	5,112
Transferred at a point in time	$	7,235	$	6,054	$	12,164	$	11,221
Recognized over time		995		1,078
Transferred over time		828		1,389		2,017		2,411
Total Revenue	$	68,~~118~~063	$	67,~~190~~443	$	14,181	$	13,632

~~The following table summarizes the Company’s net sales by major market.~~8

Schedule of net sales by major market
2024 First Quarter Sales by Major Market (Dollars in thousands)
	Military		Space		Medical		Commercial		Total
Domestic Direct	$	2,840	$	196	$	368	$	597	$	4,001
Domestic Distribution		1,224		147		-		377		1,748
International		97		103		-		169		369
	$	4,161	$	446	$	368	$	1,143	$	6,118

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 First Quarter Sales by Major Market (Dollars in thousands)

2023 Second Quarter Sales by Major Market

Military

Space

Medical

Commercial

Total

Domestic Direct

13,~~310~~006

52827

~~950~~826

~~1,306~~609

35,~~618~~268

Domestic Distribution

1,~~736~~143

~~410~~239

-4

~~150~~268

21,~~296~~654

International

2871

2162

~~246~~288

~~276~~521

34,~~074~~220

~~464~~1,228

~~950~~830

1,~~702~~165

67,~~190~~443

Receivables, net, Contract Assets and Contract Liabilities

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

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 Sheets.

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~~Contract Assets ~~assets~~ and ~~contract liabilities~~Contract ~~were as follows:~~Liabilities

Schedule of receivables, net, contract assets and contract liabilities
	Receivables, net, Contract Assets and Contract Liabilities (Dollars in thousands)
	February 24, 2024		November 30, 2023		December 1, 2022
Receivables, net	$	4,673	$	8,021	$	3,644
Contract assets	$	501	$	307	$	408
Deferred revenue	$	455	$	618	$	1,192

~~There~~Receivables, ~~was $162~~net,~~000~~ ofcontract ~~revenue recognized in fiscal year 2024~~assets ~~that~~and ~~was~~contract ~~included~~liabilities inwere ~~the deferred~~as ~~revenue liability balance at the beginning of the fiscal year.~~follows:

Contract costs


	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

~~The~~There ~~Company~~was ~~does~~$398,331 ~~not have material incremental costs to obtain a contract in the form~~ of ~~sales~~revenue ~~commissions~~recognized orin ~~bonuses.~~fiscal ~~The~~year 2024 ~~Company~~that was ~~incurs~~included ~~other~~in ~~immaterial~~the deferred ~~costs~~revenue liability tobalance ~~obtain~~at ~~and fulfill a contract; however,~~ the ~~Company has~~beginning ~~elected~~of the ~~practical~~fiscal ~~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~~Contract costs

InThe ~~the first quarter of 2020, the~~ Company ~~entered~~does ~~into~~not ahave material ~~three~~incremental costs to obtain a contract in ~~(3)~~the ~~year~~form ~~lease~~of ~~extension~~sales oncommissions ~~the~~or ~~property~~bonuses. ~~that~~The ~~has~~Company ~~been~~incurs ~~leased~~other onimmaterial acosts ~~year~~ to ~~year~~obtain ~~basis.~~and Asfulfill a ~~result,~~contract; ~~we recognized $ 165~~however,~~000~~ ~~for~~the ~~operating~~Company ~~lease~~has ~~liabilities~~elected ~~and~~the ~~right-of-use~~practical ~~assets~~expedient inunder ~~accordance with~~ ASC ~~842.~~340-40-24-4 ~~The~~to ~~Company~~recognize ~~had~~all anincremental ~~operating~~costs ~~lease~~to ~~expense~~obtain ofa ~~$14,000~~contract ~~for~~as ~~2023. The Company used~~ an ~~estimated~~expense ~~incremental~~when ~~borrowing rate of 3.25% representative of the rate of interest that the company would have to~~incurred ~~pay~~if ~~to borrow on~~ the ~~Company’s~~amortization ~~line~~period ofis ~~credit.~~one ~~The~~year ~~lease~~or ~~expired in March 2023 and was not renewed~~less.

~~Inventories~~9

~~Inventories~~Leases 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~~In ~~Taxes~~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.

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.Inventories

~~The~~Inventories ~~Company~~are ~~records~~stated aat ~~liability~~lower of cost or net ~~for~~realizable anvalue ~~unrecognized~~and ~~tax~~include ~~benefit~~material, ~~for~~labor aand ~~tax~~manufacturing ~~position~~overhead. ~~that~~All isinventories ~~not~~are ~~“more~~valued using the FIFO (first-~~likely~~in, first-~~than-not”~~out) method toof beinventory ~~sustained~~valuation. The Company ~~did not~~determines ~~record~~the ~~any~~need ~~liability~~to ~~for~~write ~~uncertain~~inventory ~~tax~~down ~~positions~~to asthe lower of ~~February~~cost ~~24,~~or ~~2024~~net orrealizable ~~November~~value ~~30,~~via an ~~2023~~analysis based on the usage of inventory over a three year period and projected usage based on current backlog.

9Income Taxes

~~Property,~~The ~~Plant,~~Company accounts for income taxes using the asset and ~~Equipment~~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.

~~Property,~~The ~~plant,~~Company ~~and~~records a ~~equipment~~liability ~~are~~for ~~carried~~an atunrecognized ~~cost,~~tax ~~and~~benefit ~~depreciation is~~for ~~provided~~a ~~using~~tax ~~the~~position ~~straight~~that is not “more-~~line~~likely-than-not” ~~method~~to atbe ~~rates~~sustained. The Company ~~based~~did ~~upon~~not ~~the~~record ~~following~~any ~~estimated~~liability ~~useful~~for ~~lives~~uncertain ~~(in~~tax ~~years)~~positions as of ~~the~~May ~~assets:~~25, 2024 or November 30, 2023.

Schedule of property,plant and equipment useful lives
Buildings	15-39
Facility improvements	8-15
Machinery and equipment	5-10
Furniture and fixtures	5-8

Property, Plant, and Equipment

~~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, ~~Property~~plant, ~~Plant~~ and ~~Equipment –~~equipment ~~Subsequent~~are ~~Measurement.~~carried ~~When events or circumstances indicate that an asset may be impaired~~at cost, anand ~~assessment~~depreciation is ~~performed.~~provided ~~The estimated~~using ~~future~~the ~~undiscounted~~straight-line ~~cash~~method ~~flows~~at ~~associated~~rates ~~with~~based ~~the~~upon ~~asset are compared to~~ the ~~asset’s~~following ~~net~~estimated ~~book~~useful ~~value~~lives to(in ~~determine if a~~years) ~~write~~of ~~down~~the ~~to market value less cost to sell is required.~~assets:

Construction in progress relates to multiple capital projects ongoing during the year ended November 30, 2023 and the three months ended February 24, 2024 facility.


Buildings	15-30
Facility improvements	8-15
Machinery and equipment	5-10
Furniture and fixtures	5-8

~~Repairs~~The ~~and~~Company ~~maintenance~~assesses ~~are~~long-lived ~~expensed~~assets asfor ~~incurred. Improvements~~impairment ~~which~~in ~~extend~~accordance ~~the~~with ~~useful~~Financial ~~lives~~Accounting ofStandards ~~property~~Board (FASB) Accounting Standards Codification (ASC) ASC 360-10-35, ~~plant~~Property, Plant and ~~equipment~~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 ~~capitalized~~compared to the asset’s net book value to determine if a write down to market value less cost to sell is required.

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

~~Costs~~Repairs ~~for~~and ~~the~~maintenance ~~design~~are ~~and~~expensed ~~development~~as incurred. Improvements which extend the useful lives of ~~new~~property, ~~products~~plant, ~~are~~and ~~expensed as~~equipment ~~incurred~~are capitalized.

~~Use~~During the second quarter of ~~Estimates~~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.

~~The~~Research ~~preparation of financial statements in conformity with GAAP requires management to make estimates~~ and ~~assumptions~~Development 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.Costs

~~Note~~Costs 3for ~~NEW~~the ~~ACCOUNTING~~design ~~PRONOUNCEMENTS~~and development of new products are expensed as incurred.

InUse ~~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.Estimates

~~Note~~The 4preparation ~~FAIR~~of ~~VALUE~~financial ~~MEASUREMENT~~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.

The Company had no financial assets or liabilities measured at fair value on a recurring basis as of February 24, 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.10

~~The~~Note ~~Company~~3 ~~measures~~NEW ~~its~~ACCOUNTING ~~long-term debt at fair value, which approximates book value as the long-term debt bears market rates of interest.~~PRONOUNCEMENTS

~~There~~In ~~were~~June no2016, ~~nonfinancial~~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 ~~fair~~amortized cost, ~~value~~in onwhich companies will be required to estimate the lifetime expected credit loss and record an allowance to offset the amortized cost basis, resulting in a ~~nonrecurring~~net ~~basis~~presentation ~~February~~of 24the amount expected to be collected on the financial asset. The new guidance is effective for fiscal years beginning after December 15, ~~2024~~2022 for Smaller Reporting Companies, including interim periods within those fiscal years and ~~November~~requires 30a 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 54 ~~COMMITMENTS~~FAIR VALUE MEASUREMENT

The Company ~~obtained~~had ano ~~commercial~~financial ~~real estate~~assets ~~construction~~or ~~loan~~liabilities measured ~~for~~at ~~the~~fair ~~construction~~value ofon a ~~new~~recurring ~~76,000~~basis ~~square~~as ~~foot manufacturing center on the 9.2 acres~~ of ~~land~~May ~~in Garland~~25, ~~Texas that~~2024 ~~the~~or ~~Company~~November ~~has~~30, ~~purchased~~2023. The Onfair ~~March~~value ~~26,~~of ~~2021,~~financial ~~the~~instruments ~~Company (acting as borrower) entered into a Construction Loan Agreement (the “loan~~such ~~agreement”) with Frost Bank (“Frost”) (acting~~ as ~~lender).~~cash ~~The~~and ~~Construction~~cash ~~Loan~~equivalents, ~~Agreement~~accounts ~~provides for a construction loan~~receivable, inand ~~amounts~~accounts ~~not~~payable toapproximate ~~exceed~~their acarrying ~~total~~amount ~~principal~~based ~~balance~~on ofthe ~~$16,160,000~~short ~~with an interest rate~~ maturity of ~~(3.40%)~~these ~~per annum~~instruments.

10The Company measures its long-term debt at fair value, which approximates book value as the long-term debt bears market rates of interest

OnThere ~~May~~were ~~16,~~no ~~2023,~~nonfinancial ~~the~~assets ~~Company~~measured ~~renewed~~at ~~the~~fair ~~Revolving~~value ~~Loan~~on ~~Agreement with Frost through the “Sixth Amendment to Loan Agreement.” (See Exhibit 10.13). The Revolving Loan Agreement provides for revolving credit loans, in amounts not to exceed~~ a ~~total~~nonrecurring ~~principal~~basis ~~balance~~May ~~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,~~2024 ~~between the Company as borrower~~ and ~~Frost~~November as30, ~~lender~~2023.

~~Construction~~Note ~~Loans. Subject to~~5 ~~the terms of the Loan Agreement, Frost will lend to the Company an aggregate amount not to exceed $16,160,000.~~COMMITMENTS

~~Principal~~The ~~and~~Company ~~interest shall be due~~obtained ~~and~~a ~~payable~~commercial ~~monthly~~real inestate anconstruction ~~amounts~~loan ~~determined~~for ~~by Lender required to fully amortize~~ the ~~outstanding~~construction ~~principal balance~~ of ~~this Note over~~ a ~~period~~new of76,000 ~~twenty-five~~square ~~(25)~~foot ~~years,~~manufacturing ~~payable~~center on the ~~twenty-sixth~~9.2 ~~(26th)~~acres ~~day~~ of ~~each~~land in ~~and every calendar month~~Garland, ~~beginning~~Texas ~~April~~that ~~26,~~the ~~2023, and~~Company ~~continuing~~has ~~regularly~~purchased. ~~thereafter~~On ~~until~~ March 26, ~~2031~~2021, ~~when~~ the ~~entire~~Company ~~amount~~(acting ~~hereof,~~as ~~principal~~borrower) ~~and~~entered ~~accrued~~into ~~interest~~a ~~then~~Construction ~~remaining~~Loan ~~unpaid,~~Agreement ~~shall~~(the be“loan ~~then~~agreement”) ~~due~~with ~~and~~Frost ~~payable;~~Bank ~~interest~~(“Frost”) ~~being~~(acting ~~calculated~~as onlender). ~~the~~The ~~unpaid~~Construction ~~principal~~Loan ~~each~~Agreement provides ~~day~~for ~~principal~~a isconstruction ~~outstanding~~loan, ~~and~~in ~~all~~amounts ~~payments made~~not ~~credited~~ to ~~any~~exceed ~~collection~~a ~~costs~~total ~~and~~principal ~~late~~balance ~~charges~~of $16,160,000 towith ~~the~~an ~~discharge of the~~ interest ~~accrued~~rate ~~and to the reduction~~ of ~~the~~(3.40%) ~~principal,~~per ~~in such order as Lender shall determine~~annum.

~~The~~On ~~interest~~May ~~rate~~16, of2023, ~~(3.40%) per annum~~the ~~including~~Company anrenewed ~~Interest-Only~~the ~~Period.~~Revolving ~~Interest~~Loan ~~only~~Agreement ~~shall~~with beFrost ~~due~~through ~~and~~the ~~payable~~“Seventh ~~monthly~~Amendment asto itLoan ~~accrues~~Agreement.” on(See ~~the~~Exhibit ~~twenty-sixth (26th~~10.15). The ~~day~~Revolving ofLoan ~~each and~~Agreement ~~every~~provides ~~calendar~~for ~~month,~~revolving ~~beginning~~credit ~~April 26~~loans, ~~2021,~~in ~~and~~amounts ~~continuing~~not ~~regularly~~to ~~and~~exceed ~~monthly~~a ~~thereafter~~total ~~until~~principal ~~March~~balance 26of $6,000,000 ~~2023; interest being~~with ~~calculated~~a onrate ~~the~~equal ~~unpaid~~to ~~principal~~prime ~~each~~rate ~~day~~with ~~principal~~a isfloor ~~outstanding~~of ~~and~~3.25%. ~~all~~The ~~payments~~Revolving ~~made~~Loan ~~credited~~Agreement towas ~~any~~originally ~~collection~~entered ~~costs~~into ~~and~~on ~~late~~January ~~charges~~23, to ~~the~~2013, ~~discharge of~~ between the ~~interest~~Company ~~accrued~~as borrower and toFrost ~~the reduction of the principal, in such order~~ as ~~Lender shall determine~~lender.

~~The~~Construction ~~loan~~Loans. Subject to ~~shall~~the beterms ~~secured by a “Deed~~ of ~~Trust,~~the ~~Security~~Loan Agreement, –Frost ~~Financing~~will ~~Statement”~~lend ~~covering~~to the ~~9.2-acre~~Company ~~tract~~an inaggregate ~~Garland,~~amount ~~Texas~~not ~~and~~to ~~the~~exceed ~~improvements made on it~~$16,160,000.

~~Revolving~~Principal ~~Credit~~and ~~Loans. Subject~~interest shall be due and payable monthly in an amounts determined by Lender required to fully amortize the ~~terms~~outstanding principal balance of ~~the~~this Note ~~Loan~~over ~~Agreement,~~a ~~Frost~~period ~~will~~of ~~lend~~twenty-five to(25) years, payable on the ~~Company~~twenty-sixth (26th) day of each and every calendar month, onbeginning aApril 26, ~~revolving~~2023, ~~basis~~and continuing regularly thereafter until March 26, ~~amounts~~2031, ~~not~~when tothe ~~exceed~~entire aamount ~~total~~hereof, principal ~~balance~~and accrued interest then ofremaining $6unpaid,~~000,000,~~ ~~minus~~shall ~~amounts~~be ~~available~~then due and ~~amounts~~payable; ~~previously~~interest ~~disbursed~~being ~~under~~calculated ~~outstanding~~on ~~Frost~~the ~~letters~~unpaid ofprincipal ~~credit.~~each ~~Subject~~day toprincipal ~~certain terms~~is outstanding and all ~~conditions,~~payments ~~the~~made ~~Company~~credited ~~may~~to ~~borrow,~~any ~~repay~~collection costs and ~~reborrow~~late ~~under~~charges, to the ~~Loan~~discharge ~~Agreement.~~of ~~The~~the ~~loan~~interest ~~has~~accrued aand ~~maturity~~to ~~date~~the reduction of the ~~April 23~~principal, ~~2025~~in such order as Lender shall determine.

The interest onrate ~~the~~of (3.40%) ~~outstanding~~per ~~and~~annum ~~unpaid~~including ~~principal~~an ~~balance~~ Interest-Only Period. Interest only shall be ~~computed~~due atand apayable ~~per~~monthly ~~annum~~as ~~rate~~it ~~equal~~accrues toon the ~~lesser of~~ twenty-sixth (a26th) aday ~~rate~~of ~~equal~~each toand ~~the~~every ~~Prime~~calendar ~~Rate~~month, ~~per~~beginning ~~annum;~~April ~~provided~~26, ~~however~~2021, inand nocontinuing ~~event~~regularly and monthly thereafter until March 26, ~~shall~~2023; interest being calculated on the ~~resulting~~unpaid ~~rate~~principal beeach ~~less~~day ~~than~~principal ~~three~~is outstanding and ~~one-quarter~~all ~~percent~~payments (3made 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.~~25%).~~

The ~~Company~~loan ~~has~~shall ~~borrowed~~be ~~$15~~secured by a “Deed of Trust,~~780,000~~ ~~against~~Security ~~the~~Agreement ~~construction loan~~– asFinancing ofStatement” ~~February~~covering 24the 9.2-acre tract in Garland, ~~2024~~Texas and the improvements made on it.

Schedule of long-term debt
Debt February 24, 2024
Notes payable	$	15,780,000
Less unamortized debt issuance costs		132,000
Net Debt		15,648,000
Less—Current portion		436,000
Total long-term debt	$	15,212,000

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.

~~Estimated~~The ~~maturities~~interest on the outstanding and unpaid principal balance shall be computed at a per annum rate equal to the lesser of ~~our~~(a) ~~long-term~~a ~~debt~~rate ~~over~~equal to the ~~next~~Prime 5Rate ~~years~~per annum; ~~are~~provided, ashowever, ~~follows (~~in ~~thousands~~no event shall the resulting rate be less than three and one-quarter percent (3.25%):.

Estimated maturities of long-term debt
	2024 (remaining)		2025		2026		2027		2028		Thereafter		Total
Frost Bank	$	326	$	447	$	463	$	479	$	495	$	13,572	$	15,780

~~Note~~The 6Company ~~EARNINGS~~has ~~PER~~borrowed $16,160,000 ~~COMMON~~against ~~SHARE~~the construction loan as of May 25, 2024.

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.

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

~~The~~Estimated ~~following~~maturities ~~is a reconciliation~~ of ~~the~~our ~~number~~long-term ofdebt ~~shares used~~over in the ~~calculation~~next of5 ~~the basic and diluted earnings per share for the~~ years ~~ended~~are ~~Feb.~~as ~~24,~~follows ~~2024~~(in ~~and Feb. 25, 2023.~~thousands):

Schedule of the basic and diluted earnings per share
Estimated maturities of long-term debt
	Three Months Ended
	2024 Remaining		2025		2026		2027		2028		Thereafter		Total
	Feb. 24, 2024		Feb. 25, 2023
Notes payable	$	218	$	463	$	463	$	479	$	495	$	13,555	$	15,673
Weighted average of shares, basic		2,578,315		2,578,315
Restricted stock units		31,194		-
Weighted average of shares, diluted		2,609,509		2,578,315

11Note 6 EARNINGS PER COMMON SHARE

~~Note~~Basic 7and ~~SHAREHOLDERS’~~diluted ~~EQUITY~~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.

OnThe ~~December~~following 5,is ~~2023,~~a ~~the~~reconciliation ~~Board~~ of ~~Directors~~the number of ~~Micropac~~shares ~~Industries, Inc.~~used ~~approved~~in the ~~payment~~calculation of athe ~~$0.10~~basic ~~per~~and ~~share~~diluted ~~special~~earnings ~~dividend~~per toshare ~~all~~for ~~shareholders~~the ofthree ~~record~~and assix ofmonths ~~January~~ended 10May 25, 2024. ~~The~~and ~~dividend was~~May ~~paid to shareholders on February 9~~27, ~~2024.~~2023:

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.


	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~~Note 87 ~~STOCK-BASED~~SHAREHOLDERS’ ~~COMPENSATION~~EQUITY

WeOn ~~have~~December ~~issued~~5, ~~restricted~~2023, ~~stock~~the ~~units~~Board ~~("RSUs")~~of ~~stock-based~~Directors ~~compensation awards as part~~ of Micropac Industries, Inc.’s ~~2023~~approved ~~Equity~~the ~~Incentive~~payment ~~Plan. Our 2023 annual grant~~ of ~~RSUs~~a ~~occurred~~$0.10 inper ~~the~~share ~~second~~special ~~quarter. The~~dividend ~~weighted~~to ~~-average~~all ~~grant-date~~shareholders ~~fair value~~ of ~~each~~record ~~unit~~as ~~granted~~of inJanuary ~~2023~~10, ~~was $13~~2024.~~13.~~ The ~~All~~dividend ~~the~~was ~~RSUs~~paid ~~granted~~to inshareholders ~~2023~~on ~~vest~~February ~~over~~9, ~~a three-year period~~2024.

~~The~~On ~~following~~December is7, a2022, ~~summary~~the Board of ~~our~~Directors ~~RSUs~~of Micropac ~~activity~~Industries, ~~for~~Inc. ~~three~~approved ~~months~~the ~~ended~~payment ~~February~~of 24a $0.10 per share special dividend to all shareholders of record as of January 11, 2023. ~~2024~~The ~~and~~dividend was paid to shareholders on February 2510, 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		-		-		-		-
Vested		7.4	$	13.13		-		-
Cancelled		-		-		-		-
Unvested at end of the period		23.8	$	13.13		-		-

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):

Schedule of stock-based compensation
	Three Months Ended
	February 24, 2024		February 25, 2023
Stock-based compensation expense	$	39	$	-

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

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


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

~~Note~~The 9following ~~SUBSEQUENT~~table ~~EVENTS~~sets forth the stock-based compensation expense recorded in selling, general and administrative ("SG&A") expense (in thousands):

The Company completed the sale of one manufacturing facility for $706,000 on March 28, 2024, which would result in an expected gain of $706,000.

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

12The following table sets forth the stock-based unvested compensation expense by year to be recognized (in thousands):

MICROPAC INDUSTRIES, INC.


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

~~(Unaudited)~~[The remainder of this page intentionally left blank.]

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~13

~~Business~~MICROPAC INDUSTRIES, INC.

The Company 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 industrial systems, including aircraft instrumentation and navigation systems, satellite systems, power supplies, electronic controls, computers, and medical devices.(Unaudited)

~~The~~ITEM 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 9100D2. ~~Micropac~~MANAGEMENT’S isDISCUSSION aAND ~~National~~ANALYSIS ~~Aeronautics~~OF ~~and~~FINANCIAL ~~Space~~CONDITION ~~Administration~~AND ~~(NASA)~~RESULTS ~~core~~OF ~~supplier and is registered to AS9100-Aerospace Industry standard for supplier certification. The Company has Underwriters Laboratories (UL) approval on our industrial power controllers.~~OPERATIONS

The Company’s core technology is 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.Business

~~Critical~~Micropac ~~Accounting~~Industries, ~~Policies~~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 (200o C) products.

The ~~preparation~~Company’s offacilities ~~financial~~are ~~statements~~certified and ~~related disclosures~~ inqualified ~~conformity~~by ~~with accounting principles generally accepted in~~ the ~~United~~Defense ~~States~~Logistics ~~requires~~Agency ~~management~~(DLA) to ~~make~~MIL-PRF-38534 ~~estimates~~(class ~~and~~K-space ~~judgments~~level) ~~that affect the reported amounts of assets, liabilities, revenues~~ and ~~expenses.~~MIL-PRF-19500 WeJANS ~~base~~(space ~~our~~level) ~~estimates on historical experience~~ and onare ~~various~~certified ~~other~~to ~~assumptions~~ISO 9001:2008 and ~~factors~~AS ~~that~~9100D. ~~are~~Micropac ~~believed~~is toa beNational ~~reasonable~~Aeronautics ~~under~~and ~~the~~Space ~~circumstances.~~Administration ~~Note~~(NASA) 2core tosupplier, ~~the~~and ~~Financial~~is ~~Statements~~registered ~~in the Quarterly~~to ~~Report~~AS9100-Aerospace ~~Form~~Industry ~~10-Q~~standard for ~~the~~supplier ~~quarter~~certification. ~~ended~~The ~~February~~Company ~~24,~~has ~~2024,~~Underwriters ~~describes~~Laboratories ~~the~~(UL) ~~significant~~approval ~~accounting~~on ~~policies~~our ~~and methods used in the preparation~~industrial ofpower ~~the Financial Statements~~controllers. ~~liabilities. Actual results could differ from these estimates.~~

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~~core ontechnology ~~the majority of its customer contracts~~ are ~~recognized at a point~~microelectronic ~~in time, generally upon shipment of products. The application of GAAP related to the measurement~~ and ~~recognition~~optoelectronic ofdesigns ~~revenue requires us~~ to ~~make~~include ~~judgments and estimates. Specifically,~~ the ~~determination~~packaging ~~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~~interconnecting of ~~our~~multi-chip ~~reported~~microelectronics ~~revenues and net income~~modules. Other ~~significant judgments~~technologies include light ~~the~~emitting ~~estimation~~and oflight ~~the~~sensitive ~~point~~materials inand ~~the~~products, ~~manufacturing~~including ~~process~~light atemitting ~~which~~diodes weand ~~are~~silicon ~~entitled to receive payment~~phototransistors, asand ~~well as the~~electronic ~~progress~~integration ofused ~~the job order to completion~~ in ~~order to determine~~ the ~~amount~~Company’s ofoptoelectronic ~~consideration~~components ~~earned~~and ~~for contractual revenue recognized over time~~assemblies.

~~The~~Critical ~~Company~~Accounting extends credit to its customers in the normal course of business. Accounts receivable represent unpaid balances due from customers. The Company maintains an allowance for credit losses for expected losses resulting from customers’ non-payment of balances due. The Company determination of allowance for uncollectable amounts is based on management’s judgements and assumptions, including internal information, prior loss experience, evaluation of customer credit risk and future economic conditions that will be used as adjustments to historical credit loss rates because the information is reasonably available without undue cost and effort. Receivables are written off after they are deemed to be uncollectable after all reasonable means of collection has been exhausted.Policies

~~Inventory~~The ~~purchases~~preparation of financial statements and ~~commitments~~related disclosures ~~are~~in ~~based~~conformity ~~upon~~with ~~future~~accounting ~~demand. If~~principles ~~there~~generally isaccepted ain ~~sudden~~the United States requires management to make estimates and judgments ~~significant~~that ~~decrease~~affect inthe ~~demand~~reported ~~for~~amounts ~~our~~of ~~products~~assets, orliabilities, ~~there~~revenues isand aexpenses. ~~higher~~We ~~risk~~base ofour ~~inventory~~estimates ~~obsolescence~~on ~~because~~historical ofexperience ~~changing~~and ~~customer~~on ~~requirements,~~various weother ~~may~~assumptions and factors that are believed to be ~~required~~reasonable under the circumstances. Note 2 to ~~increase~~the ~~our~~Financial ~~inventory~~Statements in ~~allowances~~the Quarterly Report Form 10-Q for the quarter ended May 25, 2024, describes the significant accounting policies and ~~our~~methods ~~gross~~used ~~margin~~in the preparation of the Financial Statements. liabilities. Actual results could bediffer ~~adversely~~from ~~affected~~these estimates.

The ~~Company~~core ~~recognizes~~principle ~~deferred~~of ~~tax~~revenue ~~assets~~recognition under ~~and~~accounting ~~liabilities~~principles ~~based on~~generally ~~differences~~accepted ~~between~~in the ~~financial~~United ~~reporting~~States ~~and~~of ~~tax~~America ~~basis~~(GAAP) ofis ~~assets~~that ~~and~~the ~~liabilities~~Company ~~using~~should recognize revenue to depict the ~~enacted~~transfer ~~tax~~of ~~rates~~promised ~~and~~goods ~~laws~~or services to customers in an amount that ~~are~~reflects ~~expected~~the consideration to which the entity expects to be entitled in ~~effect~~exchange ~~when~~for those goods or services. The Company’s revenue on the ~~differences~~majority of its customer contracts are ~~expected~~recognized at toa bepoint ~~recovered~~in time, generally upon shipment of products. IfThe weapplication ~~were~~of GAAP related to ~~determine~~the wemeasurement ~~would~~and ~~not~~recognition beof ~~able~~revenue requires us to ~~realize~~make ~~all~~judgments orand ~~part~~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 ~~deferred~~estimation ~~tax~~of ~~asset~~the point in the ~~future,~~manufacturing anprocess ~~adjustment~~at which we are entitled to receive payment, as well as the ~~deferred~~progress ~~tax~~of ~~asset~~the ~~would~~job beorder ~~necessary~~to ~~which~~completion ~~would~~in ~~reduce~~order ~~our~~to ~~net~~determine ~~income~~ the amount of consideration earned for ~~that~~contractual ~~period~~revenue recognized over time.

13The 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.

~~Depreciable~~Inventory purchases and ~~useful~~commitments ~~lives~~are ~~estimated~~based upon ~~for~~future ~~property~~demand. ~~and~~If ~~equipment are~~there ~~based~~is ona ~~initial~~sudden ~~expectations~~and ofsignificant ~~the~~decrease ~~period~~in ofdemand ~~time~~for ~~these~~our ~~assets~~products ~~will~~or ~~provide~~there ~~benefit.~~is ~~Changes~~a inhigher ~~circumstances~~risk ~~related~~of toinventory ~~a change~~obsolescence inbecause ~~our~~of ~~business~~changing orcustomer ~~other~~requirements, ~~factors~~we ~~could~~may ~~result~~be inrequired ~~these~~to ~~assets~~increase ~~becoming~~our ~~impaired,~~inventory ~~which~~allowances ~~could~~and ~~adversely~~our ~~affect~~gross ~~the~~margin ~~value~~could ofbe ~~these assets~~adversely affected.

~~Results~~The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of ~~Operations~~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.

	Three months ended
	February 24, 2024			February 25,2023
NET SALES		100.0	%		100.0	%
COST AND EXPENSES:
Cost of goods sold		57.3	%		63.6	%
Research and development		8.1	%		10.5	%
Selling, general and administrative expenses		31.2	%		29.2	%
Total cost and expenses		96.6	%		103.3	%
OPERATING INCOME (LOSS)		3.4	%		(3.3	)%
Other income, net		0.1	%		2.2	%
INCOME (LOSS) BEFORE TAXES		3.5	%		(1.1	)%
(Provision) benefit for taxes		(0.6	)%		.2	%
INCOME (LOSS)		2.9	%		(0.9	)%

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.

~~Sales for the first quarter ended February 24, 2024, totaled $6,118,000. Sales for the first quarter decreased 1% or $72,000 below sales of $6,190,000 for the first quarter of 2023.~~14

~~Two~~Results ~~customers accounted for 18% and 15%~~ of the Company’s sales for the first quarter of 2024 and three customers accounted for 18%, 11%, and 10% of the Company’s sales for the first quarter of 2023. One customer is a distributor that sells to multiple customers in 2024 versus three distributors in 2023.Operations

Cost of goods sold for the first quarter of 2024 and 2023 totaled 57.3% and 63.6% of net sales, respectively. Cost of sales decreased $435,000 or 11% for the first quarter of 2024 as compared to the first quarter of 2023. In 2023, two new custom products for separate customers have incurred higher material cost during the engineering and first production builds resulting in lower gross margins in the first quarter of 2023.

	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	%

~~Research~~Sales for the three and ~~development~~six ~~cost~~month ~~decreased~~periods ended May 25, 2024 totaled $~~158~~8,063,000 and $14,181,000, respectively. Sales for the ~~first~~ second quarter increased $620,000 from the same period of 2023 while sales for the first six months of 2024 ~~compared~~increased to$549,000 from the ~~same~~first ~~period~~six months of 2023. The ~~research~~majority ~~and~~of ~~development~~the ~~expenditures~~increase is related to timing of shipments of customer orders of standard microelectronic products. Sales were ~~associated~~14% ~~with~~in the ~~continued~~commercial ~~development~~market, 6% in ofthe ~~power~~medical ~~management~~market, ~~products~~74% in the military market, ~~sensor~~and ~~products~~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 ~~process~~12% ~~automation~~in ~~improvements~~the space market for the six months ended May 27, 2023.

~~Selling,~~Three ~~general~~customers accounted for 20%,18%, and ~~administrative~~17% of ~~expenses~~the Company’s sales for the ~~first~~three ~~quarter of~~months ended May 25, 2024, ~~totaled~~and ~~31.2%~~three ofcustomers ~~net~~accounted ~~sales~~for 19%, ~~compared~~16%, toand ~~29.2~~12% for the ~~same~~six months ~~period~~ended inMay ~~2023.~~25, ~~Selling~~2024, ~~general~~while three customers accounted for 12% and ~~administrative~~11% ~~expenses~~and ~~increased $106,000~~7% inof the ~~first~~Company’s ~~quarter~~sales offor ~~2024~~the asthree ~~compared~~months toended May 27,2023 ~~with~~and anone ~~increase~~customer inaccounted ~~commission~~for ~~expenses~~13% and ~~outside~~two ~~consultant~~customers ~~expense~~accounted for 8% for the six months ended May 27, 2023.

~~Provisions~~Cost of goods sold for ~~taxes~~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 $48389,000 ~~for~~in the ~~first~~second quarter of 2024 compared to the same period inof 2023. ~~The~~Year ~~estimated~~to ~~effective~~date ~~tax~~cost ~~rate~~of ~~was~~goods ~~17%~~sold decreased $45,000 for the first ~~quarter~~six months of 2024 ~~and~~as compared to the same period in 2023.

~~The~~Research ~~Company~~and ~~had~~development aexpense ~~net~~decreased ~~profit~~$76,000 for in the ~~first~~second quarter of 2024 of versus 2023 and decreased $~~177~~234,000 ~~compared~~for tothe afirst ~~net~~six ~~loss~~months of ~~$56,000~~2024 incompared to the ~~first~~same ~~quarter~~period of 2023. The research and development expenditures were associated with continued development of several power management products, sensor products, and process automation improvements.

~~Liquidity~~Selling, general and ~~Capital~~administrative ~~Resources~~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.

OnProvisions ~~March~~for ~~26,~~taxes ~~2021~~increased $129,000 ~~the~~for ~~Company (acting~~the assecond ~~borrower)~~quarter ~~entered~~of ~~into~~2024 aand ~~Construction~~increased ~~Loan Agreement with Frost Bank (“Frost”)~~$177,000 ~~(acting as lender). The Construction Loan Agreement provides~~ for athe ~~construction~~first ~~loan~~six asmonths ~~discussed~~of in2024 ~~Note~~compared 5 to the ~~condensed~~same ~~financial~~period ~~statements~~in 2023. The ~~Company~~estimated ~~used a combination~~effective oftax ~~cash~~rate ~~and~~was ~~the~~17% ~~commercial~~for ~~real~~2024 ~~estate~~and ~~construction~~17% ~~loan~~ for ~~the construction of a new 76,000 square foot manufacturing center on the 9~~2023.~~2 acres of land in Garland, Texas the Company purchased.~~

1415

~~Cash~~Net ~~and~~income ~~cash~~increased ~~equivalents totaled~~ $9632,~~869,~~000 asfor ofthe ~~February~~second quarter ~~24,~~of 2024 ~~compared~~versus ~~to $10,299,000 on November 30,~~ 2023, aand ~~decrease~~increased of $~~430~~865,000. ~~The~~for ~~decrease~~the infirst ~~cash~~six ~~and~~months ~~cash~~of ~~equivalents~~2024 iscompared ~~attributable~~ to ~~$29,000~~the ~~cash~~same ~~used~~period ~~in operations, $103,000 payments on long term debt, payment~~ of ~~a cash dividend of $258,000, and $40,000 in cash for additional manufacturing equipment~~2023.

InLiquidity ~~addition~~and toCapital ~~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.~~Resources

The Company ~~has~~used noa ~~significant~~combination of ~~off-balance~~cash ~~sheet~~and ~~arrangements~~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.

~~Outlook~~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.

~~New~~In ~~orders~~addition, ~~for~~ the ~~first~~Company ~~quarter~~continues ofon-going ~~2024 totaled $5,687,000~~investigations ~~compared to $6,361,000~~ for the ~~comparable~~use ~~period~~ of ~~2023.~~cumulative ~~Backlog~~cash ~~totaled~~for ~~$36,282,000~~business onexpansion ~~February~~and 24improvements, ~~2024,~~such ~~compared to $33,496,000~~ as of ~~February~~operational ~~25,~~improvements ~~2023~~ and ~~$36,370,000~~new onproduct ~~November 30, 2022~~expansion. ~~Approximately $32,488,000 of the current backlog is expected to ship during the remainder of 2024.~~

2024 Current Backlog by Major Market (Dollars in thousands)
	Military		Space		Medical		Commercial		Total
Domestic Direct	$	17,247	$	134	$	1,141	$	1,374	$	19,896
Domestic Distribution		12,653		1,871		12		916	$	15,452
International		254		514		-		166	$	934
	$	30,154	$	2,519	$	1,153	$	2,456	$	36,282

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.

2024 Current Backlog by Product Line (Dollars in thousands)
Microelectronics	$	20,270
Optoelectronics		5,342
Sensors and Displays		10,670
	$	36,282

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 ~~cannot~~has ~~assure~~no ~~that~~significant ~~the~~off-balance ~~results of operations for~~sheet ~~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~~arrangements.

~~Impact of COVID-19 on our Business~~Outlook

InNew ~~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~~year-~~19 pandemic related changes. We are continuing~~ to-date ~~serve~~2024 ~~our~~totaled ~~customers~~$14,175,000 compared ~~while taking precautions~~ to ~~provide~~$19,362,000 ~~a safe work environment~~ for ~~our~~ ~~employees and customers~~2023. WeThe ~~have~~decrease ~~been~~resulted ~~staggering~~from ~~some~~timing ~~shifts~~of ~~and~~new ~~otherwise~~orders ~~adjusting~~for ~~work~~several ~~schedules~~custom toproducts ~~maximize~~booked ~~our~~in ~~capacity while adhering to recommended precautions~~2023. ~~We have established and implemented a work from home provision where possible.~~

ToBacklog ~~date~~totaled $37,006,000 weon ~~have~~May ~~not~~25, ~~experienced~~2024 ~~significant~~compared to ~~raw~~$39,203,000 ~~material~~as ~~shortages;~~of ~~however~~May 27, ~~supply-chain disruptions~~2023 ~~could~~and ~~potentially~~$36,370,000 ~~delay~~on orNovember ~~prevent~~30, us2023 ~~from~~and ~~fulfilling~~represents ~~customer~~a ~~orders~~good mix of the company’s products and technologies.

Cautionary Statement

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

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.

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

The Company ~~does~~cannot ~~not~~assure ~~intend~~that tothe ~~update~~results of operations for the ~~forward-looking~~interim ~~statements contained~~period ~~herein~~presented are indicative of total results for the entire year due to fluctuations in customer delivery schedules, ~~except~~or asother ~~may~~factors beover ~~required~~which bythe ~~law~~Company has no control.

15Impact of COVID-19 on our Business

~~ITEM~~In 3.March ~~QUANTITATIVE~~2020 ~~AND~~the ~~QUALITATIVE~~World ~~DISCLOSURES~~Health ~~ABOUT~~Organization ~~MARKET~~declared the ~~RISK~~spread of the COVID-19 virus a pandemic.

~~Not~~The ~~applicable~~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.

~~ITEM 4. CONTROLS AND PROCEDURES~~16

~~(a)~~To ~~Evaluation~~date, ofwe ~~disclosure~~have ~~controls~~not ~~and~~experienced ~~procedures~~significant raw material shortages; however, supply-chain disruptions could potentially delay or prevent us from fulfilling customer orders.

~~The~~Cautionary ~~Chief~~Statement 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 February 24, 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)~~This ~~Changes~~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 ~~internal~~governmental ~~controls~~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.

~~There~~The ~~has been no change in the~~ Company’s ~~internal control~~does ~~over~~not ~~financial~~intend ~~reporting that has materially affected, or is reasonably likely~~ to ~~materially~~update ~~affect,~~ the ~~Company’s internal~~forward-looking ~~control~~statements ~~over~~contained ~~financial~~herein, ~~reporting~~except ~~during~~as ~~the~~may ~~three-month~~be ~~period~~required ~~ended~~by ~~February 24, 2024~~law.

~~PART~~ITEM II3. -QUANTITATIVE ~~OTHER~~AND ~~INFORMATION~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~ITEM~~Not ~~1. LEGAL PROCEEDINGS~~applicable

~~The~~ITEM ~~Company~~4. isCONTROLS ~~not~~AND ~~involved in any material current or pending legal proceedings.~~PROCEDURES

~~ITEM~~(a) 1AEvaluation ~~RISK~~of ~~FACTORS~~disclosure controls and procedures.

~~Information~~The ~~about~~Chief ~~risk~~Executive ~~factors~~Officer ~~for~~and Chief Financial Officer of the ~~three~~Company ~~months~~evaluated ~~ended~~the ~~February~~Company’s 24disclosure controls and procedures (as defined in Exchange Act Rule 13a-15) as of May 25, 2024 ~~does~~and, ~~not~~based ~~differ~~on ~~materially~~this ~~from~~evaluation, concluded that ~~set~~the ~~forth~~Company’s disclosure controls and procedures are functioning in ~~Part I,~~an ~~Item 1A,~~effective ofmanner ~~our~~to ~~Annual~~ensure ~~Report on~~that ~~Form~~the ~~10-K~~information ~~for~~required to be disclosed by the ~~year~~Company ~~ended~~in ~~November~~the 30reports that it files or submits under the Exchange Act, ~~2023~~is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

~~ITEM~~(b) 2.Changes ~~UNREGISTERED~~in ~~SALES~~internal ~~OF EQUITY SECURITIES AND USE OF PROCEEDS~~controls.

~~None~~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.

~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES~~17

~~None~~PART II - OTHER INFORMATION

ITEM 41. ~~MINE~~LEGAL ~~SAFETY DISCLOSURE~~PROCEEDINGS

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

ITEM 5.1A ~~OTHER~~RISK ~~INFORMATION~~FACTORS

~~None~~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 62. ~~EXHIBITS~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~(a) Exhibits~~None

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.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

16None

~~SIGNATURES~~ITEM 4. MINE SAFETY DISCLOSURE

~~Pursuant~~Not ~~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.~~Applicable

~~MICROPAC~~ITEM ~~INDUSTRIES, INC~~5. OTHER INFORMATION

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

None

17ITEM 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

Filing Compare · MICROPAC INDUSTRIES INC